INTELLECTUAL PROPERTY IN THE TWENTY-FIRST CENTURY: WILL THE DEVELOPING COUNTRIES LEAD OR FOLLOW?

Abstract

Developing countries, particularly the BRIC countries of Brazil, Russia, India, and China, should accommodate their national systems of innovation to the worldwide intellectual property (IP) regime emerging after the adoption of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) in a way that maximizes global economic welfare in the foreseeable future. As many developed countries’ experience demonstrates, badly configured, over-protectionist IP regimes stifle innovation by making inputs to future innovation too costly and too cumbersome to sustain over time. More carefully considered IP regimes, however, are an important way to protect innovative small- and medium-sized firms from predatory, larger competitors. The challenge is for emerging economies to capture the benefits of IP without importing the serious problems that developed countries have themselves failed to solve. Emerging economies can attain this balance by pursuing a policy of counter-harmonization in which they take advantage of existing exemptions in international agreements governing IP to establish regional, local, and international practices that promote more innovative, flexible uses of IP. Such practices include a research exemption for experimental uses of IP, government imposed nonexclusive licensing, anti-blocking provisions, an essential facilities doctrine, and compulsory licenses. Additional tools include an ex ante regime of compensatory liability rules for small scale innovation and sensible exceptions, particularly for science as well as general fair use provisions, to the exclusive rights of domestic copyright laws. Emerging economies will have to overcome strong economic pressure to accept more restrictive IP regimes as part of free trade agreements as well as a lack of technical expertise and internal government coordination. However, emerging economies have already accrued enough experience to be aware of the strengths and weaknesses of various IP schemes and their own ability to tailor IP to local needs. Developing countries will need to take advantage of that experience and defend innovative practices at international dispute resolution forums. Through creative, determined efforts, the developing countries can avoid other countries’ IP excesses while establishing the kind of IP norms that address the real conditions of creativity and innovation in today’s digitally empowered universe of scientific discourse.

I. Introduction: Emerging Role of the BRIC Countries

The precise connection between intellectual property and economic development varies over time from country to country and region to region.¹ For example, one cannot doubt that intellectual property laws played a major role in the United States’ development and economic growth over the past three decades. Yet, the moment one digs deeper, one discovers that, until 1982, the United States had one of the developed world’s most pro-competitive patent laws (i.e., least protective); until 1978, it had relatively weak copyright laws; and until the 1980s, it had an aggressively interventionist competition law along with a robust doctrine of patent misuse.² Somehow, the U.S. economy managed to survive and thrive in this relatively low protectionist, highly competitive environment.

Similarly, Japan, India, China, Korea, Malaysia, and Brazil all managed to attain relatively high levels of economic growth without strong intellectual property rights.³ The astounding success of the Indian pharmaceutical industry that began in the 1970s was achieved by means of a state policy that largely prohibited the patenting of medicinal products as such.⁴ This phenomenon reminds us that intellectual property rights are but one component of overall economic growth; that different states have different factor endowments; and that in many countries, especially those at an early stage of development, a sound agricultural policy or a sound pro-competitive industrial policy with a supportive political and legal infrastructure are more likely to stimulate economic growth than intellectual property laws.⁵

At the same time, we may confidently agree that countries such as China, India, Brazil, Korea, Malaysia, Indonesia, Argentina, Russia, South Africa, and many other emerging economies will not reach their full economic potential without suitable intellectual property regimes.⁶ For example, policymakers in most Asian countries that are already committed to becoming players in the knowledge economy clearly understand they will not reach the frontiers of that economy,⁷ nor will they convert their economies’ intangible, nonrivalrous outputs into tradeable knowledge goods, without articulating appropriate intellectual property laws and policies, along with a whole set of interrelated economic and political foundations that are essential to maintaining a viable post-industrial economy.⁸ To this end, China’s third amendment of its Patent Law in 2008 expressly reflects “the needs of development of China herself,” which require “the promotion of … independent innovation and the establishment of an innovation-oriented country.”⁹

The moment one looks at Asia as a regional group, one is struck by how much the IP scenario has changed over the past twenty-five years, i.e., since the Organisation for Economic Cooperation and Development (OECD) countries began to press for higher, relatively harmonized worldwide IP standards under the aegis of what eventually became the TRIPS Agreement of 1994.¹⁰ As many critics have observed, the TRIPS Agreement produced a regime that deliberately favored those OECD countries that already possessed developed national systems of innovation and whose multinational companies owned plenty of patented high-tech products to sell or manufacture around the world.¹¹ There was a built-in disposition to favor big companies seeking rents from existing innovations—or those in the pipeline—at the cost of making future innovations more difficult, especially for less technically advanced countries.¹²

Robert Ostergard recently described the “development dilemma” that TRIPS posed for poorer countries in the following terms:

[I]f they open their domestic markets to trade, they face political and economic pressure to protect foreign IP; if they protect foreign IP, they create conditions that force them to abandon their goal to obtain IP as inexpensively as possible.¹³

Of course, these IP concessions were partly offset by trade concessions in other areas (side payments), such as textiles, agriculture, and traditionally manufactured goods, a calculus that worked differently for different countries.

Yet, as often happens in international law, efforts to rig a regime for short-term advantages may turn out, in the medium- and long-term, to boomerang against those who pressed hardest for its adoption. In my very first article on this subject, I warned that by reaching for high levels of international protection (that could not change in response to less-favorable domestic circumstances), technology-exporting countries risked fostering conditions that could erode their technological superiority and resulting terms of trade over time.¹⁴ As more technology-importing countries discovered and cultivated their own innovative strengths and capacities, they would benefit both from the worldwide system of incentives and protections that the TRIPS Agreement had established, as well as from location and other endowment factors,¹⁵ at the expense of leading developed countries that took their own technical superiority for granted.

In short, given the “incipient transnational system of innovation”¹⁶ that had begun to emerge from the TRIPS Agreement, there was every reason to expect that the BRIC group as a whole,¹⁷ and many other emerging economies, would gradually become major competitors in the knowledge economy itself, with growing potential to match and challenge the advanced OECD countries’ pre-existing comparative advantages in this area.¹⁸

That this transformation has been occurring all around us is too solidly evidenced for us to review here in detail.¹⁹ What this Article will focus on, instead, is how those developing countries with growing technological prowess should accommodate their own national systems of innovation to the worldwide intellectual property regime emerging in the post-TRIPS period, with a view to maximizing global economic welfare in the foreseeable future.²⁰

II. Avoiding Protectionist Excesses

High-protectionist visions of intellectual property law have become a kind of latter-day religion promoted by the special interests that have long dominated the political scene in the United States, the European Union (EU), and Japan.²¹ The BRIC countries in particular will thus need to inoculate themselves against succumbing to these same high-protectionist delusions while there is still time.

If it remains true that a country cannot play in the knowledge economy without suitable intellectual property rights (IPRs),²² experience in many OECD countries is demonstrating that badly configured, unbalanced, over-protectionist IP regimes gradually stifle innovation by making inputs to future innovation too costly and too cumbersome to sustain over time.²³ Such regimes also enable large corporations that are sometimes slothful innovators to accumulate pools of cross-licensed patents that create barriers to entry for the truly innovative small- and medium-sized firms.²⁴ Properly designed IPRs do, however, protect innovative small- and medium-sized firms from the predatory practices of their larger competitors.

It is widely recognized that the patent system in the United States is emerging from a period of crisis. Among other problems, the cumulative costs of litigation generated by a plethora of weak patents that increasingly pervaded the upstream research dimension threaten to exceed the aggregate returns from patented innovation as such, especially in the field of information technologies.²⁵ There is still no consensus about how to reform the patent system, despite broad agreement that reforms are needed. As time passes, the demands of different industries become more contradictory and conflictual, particularly with regard to the information technology and biotechnology sectors.²⁶ For these and other reasons, the European Patent Office has expressed concerns about the uncertain future of the world patent system.²⁷

None of these domestic tensions deterred either the United States Trade Representative (USTR) or the European Commission (EC) from demanding that the rest of the world adopt a proposed Substantive Patent Law Treaty that, at the international level, would have locked in place most of the very unsolved problems that confront the domestic system of innovation in the United States.²⁸ The rest of the world might logically ask which version of U.S. patent law the USTR now seeks to export, given that the U.S. Supreme Court has so profoundly changed it in a series of recent cases.²⁹ By the same token, one may also ask why certain Asian patent offices blindly supported these same proposals for a further upward ratcheting of international patent norms. It was as if their governments were asking the other OECD countries, “Please give us all your insoluble problems and contradictions as soon as possible, so we can undermine our own national systems of innovation, too.”³⁰

Of course, the more that high- and middle-income developing countries become players in the knowledge economy, the more they share some of the fears and risks that usually underlie demands for higher levels of protection by powerful sectors of the advanced technology-exporting countries. For example, Asian entrepreneurs want their own exports of knowledge goods protected in the developing countries whose markets they increasingly penetrate through foreign direct investment (FDI), licensing, or sales of high-tech products. They also want to maintain flows of FDI and market-driven technology transfer into their own countries, in order to bolster their growing technological capacities.

Yet, such concerns do not necessarily add up to a compelling case for higher levels of international intellectual property protection. On the contrary, the TRIPS Agreement itself provided an unprecedented platform of IP protection for exports after 2000,³¹ and there is little evidence that this platform remains insufficient for the needs of Asian exporters, or for those of other emerging economies for the foreseeable future. Meanwhile, the relation between FDI and IPRs itself remains ambiguous, given that OECD technology exporters need entry into emerging economies as much as these economies need FDI and market-driven technology transfer from the OECD countries.³²

In China, India, and Brazil, moreover, knowledge economy skills and capacities have apparently reached the point where the stimulating effects of IPRs will influence different sectors and stakeholders quite differently, depending on the extent to which they are still driven by imitation-related innovation or investments in basic, or at least relatively original, R&D.³³ Increasingly, tensions arise between those who demand relatively strong patent protection for, say, research-driven pharmaceuticals, and those who demand a more forgiving, pro-competitive approach favoring generic pharmaceutical producers and exporters.³⁴ In either case, how to protect cumulative and sequential innovation—as distinct from path-breaking innovation—becomes an ever more pressing problem as more small- and medium-sized firms acquire a taste and capacity for such innovation.³⁵

A parallel set of problems that the BRIC countries and other emerging economies increasingly face is how to adjust the shifting relations between private and public goods. Education, public health, agricultural improvement, scientific research, and other important areas are still heavily dependent on the public sector in most of these countries. Yet international intellectual property rights may impede the acquisition of scientific³⁶ and educational materials;³⁷ essential medicines;³⁸ and seeds, stocks, and fertilizers needed for economic growth.³⁹ The extent to which these same types of impediments will adversely affect the development and dissemination of environmental technologies still remains to be seen.⁴⁰

Even with regard to the role of public-sector investment in basic research, which has been crucial in the most developed countries, there remains great uncertainty about the kind of regulatory regimes needed to ensure an appropriate social return from publicly funded or publicly generated research initiatives.⁴¹

III. Designing Intellectual Property Laws for the Twenty-First Century

As the high- and middle-income developing countries seek to strengthen their own national systems of innovation, they must decide how to address the challenges posed by a now highly articulated worldwide intellectual property system. This task requires policy decisions affecting the growth of a knowledge economy, rather than an economy based on physical, capital, or natural resources, which have relatively little to do with intellectual property laws as such.⁴²

To the extent that intellectual property laws do play an ancillary but important role, there are, roughly speaking, two different approaches on the table. One is to play it safe by sticking to time-tested IP solutions implemented in OECD countries, with perhaps a relatively greater emphasis on the flexibilities still permitted under TRIPS (and not overridden by relevant FTAs).⁴³ The other approach is to embark upon a more innovative and even experimental path, with a view to addressing and perhaps solving the very problems that the advanced technology-exporting countries currently find so daunting.⁴⁴

A. From “Fair Followers” to “Counter-Harmonization”⁴⁵

Most technical assistance experts and many academics take the view that developing countries should stick to time-tested IP solutions while exploiting available exceptions and limitations recognized by developed countries. This approach affords the advantages of requiring relatively modest lawyering inputs (although it still requires more lawyering than one might think⁴⁶); it may reduce internal debate about appropriate solutions; and it may deflect political and economic pressures from powerful countries whose own prior practices cast a comforting shadow.⁴⁷

While this strategy seems politically expedient, Professor Dreyfuss and I remain skeptical for one main reason. At the end of the day, discreetly following in the technology-exporting countries’ IP footsteps will merely bring the high- and middle-income developing countries face to face with the serious problems that the OECD countries have themselves failed to solve. It will place everyone in an equally unsatisfactory position, without having enhanced the governance skills of developing countries and without enriching the incipient transnational system of innovation with much-needed empirical evidence about alternative IP solutions to an array of apparently intractable problems. A deliberate policy of “counter-harmonization,” instead, could “reduce the collective administrative costs of adopting an alternative patent regime, create a transnational ‘counter-culture,’ and increase the costs … of extralegal retaliation.”⁴⁸

Consider, for example, the choking and blocking effects that a proliferation of patents rooted in low nonobviousness standards increasingly produced for the software and, arguably, biotech industries in the United States and elsewhere.⁴⁹ This phenomenon elicits pressures for “quality patents” that would presumably result from higher nonobviousness standards,⁵⁰ and the U.S. Supreme Court has recently taken a first step in this direction,⁵¹ pending further legislative reforms on the table.⁵² But higher nonobviousness standards, without more, will also expose costly cumulative and sequential innovation to free-riding forms of market failure, which was the risk that induced the Federal Circuit to lower its nonobviousness standard in the first place.⁵³

From this perspective, both the U.S. and foreign experiences reveal a cyclical or pendular shifting between states of under- and over-protection,⁵⁴ without policymakers ever having seriously addressed the underlying question of how appropriately to protect cumulative and sequential innovation at the core of much present-day technological progress.⁵⁵ This same question has now begun to surface in countries such as India and China.⁵⁶ For example, efforts to codify a relatively stiff standard of nonobviousness in the new Indian patent law were self-consciously aimed at freeing up space for India’s thriving generic pharmaceutical industry.⁵⁷ But these same efforts elicited complaints that India’s adoption of stiff eligibility standards would deprive the more research-driven pharmaceutical sector of sufficient incentives to invest in derivative applications of medicines initially developed abroad.⁵⁸

Besides an appropriately selective nonobviousness standard, in other words, India and similarly situated developing countries need an appropriately designed domestic regime that stimulates investment in cumulative and sequential innovation. Such a regime must also avoid creating barriers to entry or unduly hindering the transformation of today’s technological outputs into inputs for tomorrow’s follow-on applications.⁵⁹

Of course, the traditionalists would respond by recommending greater use of utility model laws,⁶⁰ and there has been a trend towards enacting such laws in the developing countries, including China.⁶¹ But the limits and weaknesses of patent-like utility model laws have been well documented since the 1970s at least, as are their inherent logical and economic contradictions, even if such regimes often prove better than nothing.⁶² Moreover, the Japanese experience suggests that advantages accruing from the use of utility models to surround foreign patents with tripwires of small-scale blocking effects tend to peter out once the country relying on this tactic shifts its own domestic emphasis to relatively basic research.⁶³ Sooner or later, utility model laws thus merely re-propose the same fundamental tensions that arise when too many patents cluster around the same rapidly developing technologies, each of which is dependent on preceding innovation and may stimulate equally dependent successive applications.⁶⁴

In other words, the clear boundaries between property rights that are a presupposed necessary condition for efficient trading of knowledge goods have become inherently blurred and overlapping as a consequence of the patent law’s struggle to keep abreast of the changing conditions of technological progress.⁶⁵ Why should the BRIC countries, for example, not address this and other related problems head on, instead of falling into the same old traps and pitfalls that undermine systems of innovation in the most developed countries?⁶⁶

That the traditionally structured OECD innovation framework has become increasingly “brittle” over time⁶⁷ appears from even a quick review of its three main premises:

1. Upstream scientific research, primarily theoretical in nature, was to remain immune from IPRs and to be regulated by the sharing norms of Mertonian science;⁶⁸

2. Routine innovation (largely cumulative and sequential in nature) was primarily protected as know-how by trade secret laws, which established a vast semi-commons accessible to all routine engineers willing to reverse-engineer by honest means, while also providing investors with natural lead time;⁶⁹

3. Legal monopolies were to be bestowed only on significant inventions, beyond the reach of routine engineers, while competition rooted in legally protected lead time and other comparative advantages drove the innovation process.⁷⁰

Today, instead, universities aggressively patent government-funded research results.⁷¹ Many countries protect even scientific databases as such,⁷² and there is no clear line between theoretical and applied research. The sharing norms of science have broken down to the point where they can only be maintained by contractually constructed scientific commons that artfully manage legal, economic, and technical restrictions on data, materials, and information.⁷³ At the same time, the technical know-how underlying cumulative and sequential innovation can seldom be kept secret for very long. Hence, trade secret protection also breaks down, and investors faced with mounting front-end costs suffer from a chronic shortage of natural lead time.⁷⁴

In response, patents, copyrights, and sui generis laws expand in all directions to absorb cumulative and sequential innovations that lack other refuges from free-riding appropriators and from the risk of market failure.⁷⁵ This trend, in turn, produces mounting thickets of rights that impede both technological progress and research, while the risk of endless litigation over uncertain legal boundaries leads to daunting litigation costs and anticompetitive, defensive patent pools held by big, but often slothful, technology distributors.⁷⁶

B. Where Developing Country Leadership Could Make a Difference

The incipient transnational system of innovation emerging from the TRIPS Agreement will simply reproduce these same unpropitious conditions if the BRIC countries and their allies discreetly follow the models embedded in the most developed intellectual property systems. What we need instead are new models experimentally derived from bold attempts to deal directly with these and other unsolved problems.

I cannot, within the confines of this short Article, explore these problems in depth, although more and more academic attention is being focused upon them.⁷⁷ Let me instead put forward a partial list of initiatives that the BRIC countries, and other emerging economies, working perhaps within the framework of a WIPO Development Agenda,⁷⁸ could consider. The list is not meant to be exhaustive, only suggestive, but it does give an idea of the kind of initiatives that are needed.

1. Measures Concerning Patents

In 1997, I suggested that developing countries could help to accommodate international minimum standards of patent protection to their national development goals by adopting relatively stringent eligibility standards covering subject matter, novelty, nonobviousness, and disclosure.⁷⁹

a. Eligibility Standards in BRIC Countries

The one country that has most aggressively pursued this strategy so far is India, which particularly seeks to promote its pharmaceutical industry. As Professor Kapczynski’s research confirms, India’s patent law denies subject-matter eligibility to new uses of known substances and new forms of known substances that do not enhance “efficacy.” Its stiff nonobviousness standard requires “a technical advance” or economic significance, all with a view to discouraging “me-too” and derivative patents that would circumscribe the space in which generic producers could operate.⁸⁰ Although India cannot legally vary eligibility standards to suit the needs of different industries,⁸¹ its generally high standards are reinforced by pre-grant and post-grant opposition procedures, and by stringent disclosure requirements,⁸² which other high- and middle-income developing countries would do well to consider.

The level of nonobviousness to be established under the recently enacted third revision of the Chinese Patent Law was not clear at the time of writing. Article 22 reportedly requires “prominent substantive features” and “notable” progress (as distinct from utility models that require only “substantive features” and “progress”); but the Patent Examiner’s Guidelines simply invoke the “person skilled in the art” standard used in most OECD countries without further illuminating the drafters’ intent.⁸³

The new Chinese law definitely adopts a broader, more absolute standard of novelty than before,⁸⁴ and it will allow a prior art defense to an infringement action that “to some extent shifts [the] validity issue of a patent from … [the examiners] to the court.”⁸⁵ The Chinese law will also require disclosure of origin for genetic resources, and may invalidate a pending patent if laws and regulations pertaining to licit procurement and use of such resources have been violated.⁸⁶

In general, it seems likely that the problems of low quality patents that recently plagued developed countries would become more pernicious if allowed to take root in high- and middle-income developing countries. In particular, low standards of nonobviousness would allow powerful foreign companies that accumulate patents on incremental innovations to block local improvers in developing countries and to maintain patent pools that could create formidable barriers to entry.

Even the United States has recently begun to elevate its eligibility standards,⁸⁷ although not as steeply as those in India. Because governments cannot discriminate against foreigners,⁸⁸ however, high standards of eligibility must apply equally to local inventors. The latter remain free to patent abroad, whatever the status of their inventions at home,⁸⁹ while “second tier” protection may be available to stimulate local investment in small-scale innovation.⁹⁰

Needless to say, the policy space for evaluating eligibility standards against local development needs could shrink drastically if such standards were harmonized by TRIPS-plus specifications under a Substantive Patent Law Treaty (SPLT).⁹¹ Developing countries should accordingly continue to resist such a harmonization exercise.

b. Problems on the Frontiers of Science

Another reason for resisting premature harmonization exercises is that, even in developed countries, experts remain uncertain how best to resolve problems affecting cutting-edge technologies,⁹² which makes evaluation of the relevant issues even more difficult in developing countries. For example, recent studies of the seminal genomic discoveries carried out at Duke University, under a grant from the National Institutes of Health and the Department of Energy, suggest a number of recurring problems on the frontiers of science that sometimes pose unresolved problems for the patent system as a whole.⁹³ These include:

• Broad foundational patents that can block research and downstream applications and that produce high transaction costs for would-be users.⁹⁴ For example, polymerase chain reaction (PCR) and recombinant DNA cloning were covered by a few patents, with narrowly averted blocking effects.⁹⁵

• An even bigger problem arises when basic research platforms are covered by multiple patents held by dispersed owners, public and private.⁹⁶

• More generally, thickets of overlapping patents may cover a research platform or multiple components of an end product, especially in interdisciplinary research fields. This problem arises, for example, with regard to microarrays, synthetic biology (which combines life sciences, computer science, and electrical engineering), and now even nanotechnology.⁹⁷

• With particular regard to information technology, hundreds of patents on small contributions may yield patent thickets with vague boundaries, resulting in holdups and excessive litigation.⁹⁸ A similar, if less dramatic process affects private-sector innovators in biotechnology,⁹⁹ although the extent of this problem in that sector remains controversial.¹⁰⁰

• Massing of patents for defensive purposes (especially in IT) may block entry to competitors and innovators.¹⁰¹

All these problems—and the resulting transaction costs—were then worsened by the proliferation of low quality patents, especially in the United States.

These and related problems could inhibit research and keep innovators in BRIC countries and other emerging economies from realizing their full potential in the biotechnology and information industries. They increasingly deter private-sector researchers and investors in developed countries from exploring promising routes,¹⁰² while placing universities in a delicate legal position as academics ignore patents when conducting cutting-edge research.¹⁰³ Worse, they could eventually complicate the race for innovative climate change technology if future massive government funding were to replicate problems now experienced in biotech and IT.¹⁰⁴

Generally speaking, the evidence points to the emergence of complex frontier sciences that may require integrated management in their upstream dimension (and sometimes even in the applications domain).¹⁰⁵ A holistic approach to intellectual infrastructure may then become essential. But the patent system operates on an ad hoc, case-by-case basis that is not designed to address or govern such complex innovation systems. There results a risk of systemic conflict between the holistic needs of frontier science (with its own corresponding innovation policy) and the methodology of traditional intellectual property laws.¹⁰⁶

i. Some Possible Solutions

In principle, at least five primary measures, with varying degrees of nuance, can be envisioned to address these challenges.

• A broad research exemption for the experimental users of patented inventions to find new inventions, to invent around old ones, or to develop improvements;¹⁰⁷

• An administrative or judicial power to require that the invention be made available on a nonexclusive license;¹⁰⁸

• An anti-blocking provision, normally in the form of a compulsory license for dependent patents, that allows improvers to avoid infringing a dominant patent;¹⁰⁹

• An “essential facilities” doctrine, familiar from competition law theory and practice, that would allow the pooling of overlapping patents within a platform technology;¹¹⁰

• Compulsory licensing, either for government (noncommercial) use or to enable third parties to supply the market in the public interest.¹¹¹

In practice, the availability of these solutions, and still others that have been proposed in developed countries,¹¹² varies from country to country and is always somewhat problematic. Yet, nothing in the multilateral conventions prevents developing countries from implementing these and other related provisions in their domestic laws.

U.S. patent law currently lacks a bona fide research exemption, and there is little chance that legislative reform will fill this gap. The formal position in the European Union is better,¹¹³ but actual state practice seems to have narrowed the factual availability of this exception. If so, that state of affairs would afford an obvious opportunity for “counter-harmonization”¹¹⁴ where developing countries could take the lead.

The Chinese Patent Law, as amended in 2008, codifies a so-called Bolar exception, which permits generic producers to reverse-engineer patented medicines and to conduct clinical trials prior to the expiration of the patent.¹¹⁵ A WTO panel upheld the legitimacy of this exception under Article 30 of the TRIPS Agreement.¹¹⁶ Whether Chinese patent law will maintain a broad exception for scientific research generally was not clear at the time of writing.¹¹⁷

There is no anti-blocking provision in U.S. patent law.¹¹⁸ Hence, if a dominant patentee and an improver bargain to impasse, as occurs from time to time, the dominant patentee may keep a patented improvement off the market because its sale or use would infringe the former’s patent.¹¹⁹ While this result may suit a dominant patentee because it defends him or her from a serious threat of competition, it lessens social welfare by depriving the public of the improved product,¹²⁰ unless the government intervenes with a public interest compulsory license.

Many European countries have accordingly codified compulsory licenses for dependent patents,¹²¹ which are perfectly compatible with the TRIPS Agreement,¹²² although European patent authorities had, until recently, been reluctant to grant them in practice. Anecdotal evidence suggests that the authorities in Europe may now be more willing to grant such licenses and that, even in the past, parties in Italy, Germany, and the United Kingdom tended to bargain around the possible threat of such an anti-blocking measure, despite the fact that few such licenses were actually granted.¹²³

While China will include a dependent compulsory license in its pending patent reform, its availability in other developing countries is not widely reported.¹²⁴ Here, in other words, one finds a relatively uncontroversial candidate for actual harmonization under TRIPS, rather than “counter-harmonization,” that developing countries should wholeheartedly embrace.

Even in the absence of a patented improvement as such, the complexity of present-day inventions in which numerous overlapping patents may be combined makes it advisable that courts have the power to deny permanent injunctions for infringement in the public interest and to allow compensation instead, preferably in the form of reasonable royalties. This use of a liability rule, rather than a property rule, seems especially pertinent when the parties are not in head-to-head competition, or when one of them does not actually work the patents it owns, as cases following the Supreme Court’s eBay decision¹²⁵ in the United States have increasingly recognized.¹²⁶ Professor Kapczynski, among others, rightly commends this approach to the developing countries, and she presents evidence that Indian case law has already begun to cite eBay with approval.¹²⁷

At higher levels of technological development, moreover, the advent of platform technologies, often affecting upstream research tools, may arise suddenly out of a convergence of formerly separate interdisciplinary pursuits. Such a situation can present formidable holdout problems that can adversely affect both basic research and downstream applications, as occurred in the case of microarrays.¹²⁸ If nothing is done, a dominant aggregator may sometimes solve the problem by means of vertical integration, while leaving the progress of science in an uncertain state and possibly generating serious antitrust problems to boot.¹²⁹

To solve this problem, when it arises, governments need the authority to override existing exclusive licenses and to grant nonexclusive licenses to additional or alternative parties in the public interest.¹³⁰ For example, governments must be able to pool or bundle platform technologies and to make the platform available as a whole to downstream applications when the platform becomes an essential infrastructure for future research and innovation.¹³¹ In that case, all third parties who use the pooled technology should have to pay equitable compensation from their applications to the bundle or trust, for distribution to right holders.¹³²

In principle, competition law can reach a comparable result by means of an “essential facilities” doctrine, which has sometimes been used in the European Union,¹³³ but remains in a semi-moribund state under existing case law in the United States.¹³⁴ Of course, a compulsory license for government use can also be invoked to address such a situation without a need to surmount the hurdles of competition law, and the United States has invoked government use licenses for similar purposes in the past.¹³⁵ Both India and China have enacted comprehensive compulsory licensing schedules that appear to clearly encompass such a power.¹³⁶

Nevertheless, developing countries with growing technological prowess should consider fashioning at least some guidelines, if not an actual codification, that would enable the authorities to intervene under an established “essential facilities” doctrine in order to rescue a platform technology when circumstances so require.¹³⁷ Such intervention becomes particularly necessary when holdouts elevate the prices charged for use of the platform to the point where both research and applications risk becoming casualties of deadweight loss.

Notice that, with regard to compulsory licenses for government use, which are widely invoked in the United States for multiple purposes, and not just national security, the TRIPS Agreement limits exports to 49.9% of production.¹³⁸ So it became necessary to amend TRIPS to allow back-to-back compulsory licenses, thus enabling countries with capacity to manufacture medicines to supply poor countries that needed access to generic drugs but lacked manufacturing capacity under compulsory licenses of their own.¹³⁹ Both China and India have adopted legislation enabling them to supply generic versions of patented medicines to other countries under this scheme.¹⁴⁰

There is a larger principle here of considerable importance. For example, developing countries may need to assist each other with access to essential climate change technologies, and pooled procurement strategies may become advisable.¹⁴¹ So this concept of back-to-back compulsory licenses for inputs of essential technology may need to be broadened, and NGOs concerned about access to green technologies have already commissioned studies of this topic.¹⁴²

ii. Checks and Balances in the Public Funding of Research

The developing countries that are more technologically advanced should also formulate their own approach to regulating the patenting of government-funded research results, particularly those obtained by universities and other public research centers. Although the benefits of the Bayh-Dole Act¹⁴³ are well advertised, the unresolved problems it creates are also increasingly well documented, as are a growing list of needed reforms, which will be hard to enact in the United States.¹⁴⁴

Recently, seven American experts published a detailed list of concerns about the effects of the Bayh-Dole Act in the United States,¹⁴⁵ and they recommended a number of minimum safeguards in the public interest.¹⁴⁶ Perhaps the most fundamental recommendation was that publicly funded university research results should not be exclusively licensed, unless such a license becomes essential for commercialization.¹⁴⁷ Because many research tools can be used off the shelf without further downstream R&D, as was the case with the Cohen-Boyer patents in DNA sequencing,¹⁴⁸ an exclusive license is often unnecessary and counterproductive.

Other recommendations these authors put forward are as follows:

• The governing legislation should ensure transparency in the patenting and licensing of publicly funded research results.¹⁴⁹

• Where initial licensing arrangements for publicly funded research do not achieve public interest objectives, governmental authorities must have power to override such licenses and to grant licenses to additional or alternative parties.¹⁵⁰

• The government should retain an automatic right to use any invention arising from its funding.¹⁵¹

• Besides promoting commercialization of upstream research results, the government must ensure consumer access to end products on reasonable terms and conditions.¹⁵²

• Governments should not presume that either patenting or exclusive licenses are necessarily the best options, but may instead “focus on placing by default or by strategy government-funded inventions into the public domain, creating a scientific commons, enabling collective management of intellectual property, or fostering open-source innovation.”¹⁵³

• “Where greater commercial incentives seem necessary, the benefits of nonexclusive licensing should always be weighed against the social cost of exclusive licenses.”¹⁵⁴

In other words, instead of simply imitating the U.S. model as it stands, the developing countries should try to formulate improved versions of the Bayh-Dole principle. Such efforts would better address both the need to ensure access to research tools for the research community and the question of abusive pricing of end products, given the extent to which relevant R&D costs were borne by taxpayers in the first instance. In this connection, developing countries need to devise their own public–private initiatives to endow venture capital funds (and perhaps related research prize contests¹⁵⁵) that might emulate or improve upon the successful models currently deployed in some OECD countries.

Unfortunately, India’s hurried enactment of a Bayh-Dole-like statute without due regard to these proposed safeguards does not bode well for the future.¹⁵⁶ Similar statutes are under consideration in numerous other countries, including South Africa,¹⁵⁷ and it remains to be seen whether greater caution will be exercised there than was the case in India.

iii. Smarter Use of Second Tier Regimes

While the emerging economies as a whole should maintain relatively pro-competitive markets for innovation vis-à-vis the high-protectionist regimes in the United States and the European Union, this strategy does not require developing countries to sacrifice their own domestic innovators to free-riding appropriators. Rather, these countries need to outsmart the high-protectionists by fashioning intellectual property regimes that match their own needs and capacities without violating international IP norms.¹⁵⁸

In particular, they could take the lead in making sensible uses of liability rules to stimulate rapid exchanges of cumulative and sequential innovation, especially for purposes of follow-on innovation,¹⁵⁹ while reserving strong exclusive rights for a relatively restricted class of truly nonobvious inventions. China’s second amendment to its Patent Law in 2000 may have taken a step in that direction by allowing a compulsory license when utility model owners refuse to deal on reasonable terms or conditions.¹⁶⁰

As previously discussed, there are several ways developing countries could achieve this different kind of balance: by enacting and implementing compulsory licenses for dependent improvements;¹⁶¹ by limiting injunctions to cases that demonstrably serve the public interest, now once again a characteristic of U.S. law and practice;¹⁶² or by codifying an ex ante regime of compensatory liability rules that I have elsewhere described, which might particularly benefit commercial exploitation of traditional knowledge and related resources.¹⁶³

iv. Incentives for Promoting Public Health, the Environment, and Collaborative Research

Developing countries should take the lead in revamping increasingly obsolete approaches to the use of IPRs in the field of medicine. In no other area is there a greater need for innovative approaches, with an ever-lengthening list of potential tools that could be used to increase research outputs and to achieve better distributional outcomes as well. These include:

• Proposals for pre-competitive pooling of privately owned small molecule libraries, with a view to facilitating the upstream identification of promising target molecules through university-generated assay designs;¹⁶⁴

• Proposals for public–private technology pools that would undo patent thickets and stimulate investment, while preserving revenues from downstream applications for single depositors;¹⁶⁵

• Proposals for government funding of clinical trial studies, with corresponding buy-ins at the international level and release of results to the worldwide scientific community;¹⁶⁶

• Proposals for buy-outs and humanitarian licensing,¹⁶⁷ as well as for pooled procurement strategies under the amended TRIPS provisions, with a view to encouraging the distribution of essential medicines on a “high-volume, low-margin” marketing strategy;¹⁶⁸ and

• Proposals for prizes and other novel research inducements that would help to separate the research and marketing functions in the medical sector.¹⁶⁹

Were the leading developing countries to pursue their own proactive policies in this area, precisely at a time when their medical research capacity keeps growing, it could lead to novel and perhaps breakthrough solutions of benefit to the rest of the world.

Less innovative, but still worth considering, is the possibility under Article 6 of the TRIPS Agreement¹⁷⁰ for any country to adopt a regime of international exhaustion, with a view to permitting parallel imports of patented products from any place where the product in question was put on the market with the patentee’s authorization. China’s third amendment of its Patent Law in 2008 has reportedly instituted just such a regime, with an eye to obtaining “patented medicine which China has difficulty in manufacturing or otherwise obtaining.”¹⁷¹ Parallel imports may also help some developing countries obtain “green technologies” at more affordable prices, although this process can also exert upward pressures on the prices generally charged in developing countries, in order to avoid arbitrage through parallel imports.¹⁷²

“Green technologies” are, of course, another area where developing countries could supply much needed leadership. Here some recent studies suggest that IPRs have so far been playing an appropriately stimulatory role.¹⁷³ The problems elsewhere observed in regard to information technology and biotechnology have not yet seriously appeared in this sector, perhaps because it remains at an incipient stage, with many small players and with relatively few large-scale capital investments.¹⁷⁴ Precisely because emerging economies could participate on the ground floor of future developments in environmental technologies, it behooves their governments to devise collaborative strategies to foster maximum growth and participation, without the impediments that excessive protection has caused in other sectors.¹⁷⁵

Moreover, there is growing interest in new strategies to develop the so-called sharing economy, which has produced such successes as the open-source operating system and Wikipedia.¹⁷⁶ Considerable efforts are also underway to devise new forms of scientific cooperation that could cut through legal, technical, and economic barriers to the Mertonian sharing ethos, that could help to establish worldwide scientific networks and commons on an unprecedented scale, and that might extend “open source” methodologies to new fields of study.¹⁷⁷ Here, again, developing countries should participate actively in these initiatives¹⁷⁸ and not sit on the sidelines waiting for others to succeed.

2. Measures Concerning Copyrights and Neighboring Rights

Another task badly in need of innovative solutions is the quest for sensible exceptions to, and limitations on, the exclusive rights of domestic copyright laws that are otherwise governed by the TRIPS Agreement and the under-theorized “three-step test” it incorporated from the Berne Convention.¹⁷⁹ Here, major efforts are under way in both academic and government circles to rethink the question of exceptions and limitations from a more public interest perspective than was possible in the immediate aftermath of TRIPS.¹⁸⁰

Much has been written lately about the excesses of recent copyright legislation in general, and the concomitant expansion of related rights, including database protection laws, which increasingly complicate and obstruct the very creativity and innovation that intellectual property rights were originally designed to promote.¹⁸¹ Nowhere are these tensions so acute¹⁸² or so likely to generate disproportionately large social costs as in the field of basic scientific research.¹⁸³ In particular, abundant evidence now shows that science-hostile intellectual property laws, in combination with the science publishers’ restrictive licensing practices, collide head-on with core advances in digitally integrated scientific research methods.¹⁸⁴

a. Privatizing the Scientific Research Commons

On one hand, new information technologies and related scientific tools, especially bioinformatics, are transforming traditional scientific fields, such as molecular biology,¹⁸⁵ and are spawning new fields such as genomics and proteonomics, with unlimited scientific opportunities in the digital environment.¹⁸⁶

The worldwide scientific community needs to develop and expand these digital opportunities, especially at public research institutes and universities, while maintaining the classical functions of certification and diffusion of research results inherited from the pre-digital print epoch.¹⁸⁷

On the other hand, the digital revolution that created such promising opportunities for scientific research “also generated intense fears that hardcopy publishers would become vulnerable to massive infringements online and to other threats of market failure.”¹⁸⁸ In response, publishers pushed legislatures to recast and restructure copyright law in the online environment so as to preserve business models built around the print media.¹⁸⁹ As Professor Okediji and I have noted before:

In so doing, [publishers] managed to curb pre-existing limitations and exceptions (L&Es) in the online environment, including those favorable to science; to embed pay-per-use machinery into electronic fences surrounding online transmissions even of scientific articles; and, particularly in the EU and increasingly elsewhere, to add new sui generis data protection disciplines that restrict access to the very facts, data, and information that are the lifeblood of basic scientific research.¹⁹⁰

As a result, thickets of rights, backed by Technological Protection Measures (TPMs) and Digital Rights Management (DRM) restrictions in the online environment, impede effective exploitation of automated knowledge discovery tools by blocking integrated access to scientific information and data scattered over a broad range of articles and databases that may or may not be available online.¹⁹¹

Scientists need, and traditionally depend on, a robust public domain, in which existing information and data become inputs to future knowledge assets that cannot be generated without them. Instead, successful special interest lobbying at both the national¹⁹² and international levels¹⁹³ has overprotected existing knowledge goods at the expense of the public domain, while compromising digitally empowered scientific research opportunities with little regard for the social costs and burdens imposed on future creation and innovation.

High-level officials at the European Commission have publicly recognized the dangers to public science in this situation.¹⁹⁴ In 2008, the Commission itself issued a Green Paper, seeking to foster a debate about how to better promote the “free movement of knowledge and innovation” in the European Union’s single market, with particular regard to the dissemination of research, science, and educational materials.¹⁹⁵

Notwithstanding these initiatives, entrenched publishing interests in the European Union and the OECD countries generally have so far blocked any realistic prospects for top-down legislative reforms, despite mounting worldwide pressures for greater “access to knowledge.”¹⁹⁶ This resistance has prodded the scientific community to make greater efforts to manage its own essential knowledge inputs by means that attempt to neutralize the impediments to upstream research that intellectual property rights increasingly spawn.¹⁹⁷ Some of these initiatives, particularly those spun off from the Creative Commons and Science Commons movements, have spread to developing countries, with notable success, for example, in Brazil.¹⁹⁸

b. Remedial Measures Available to the BRIC Countries

Developing countries labor under intense pressures from developed countries to duplicate the very barriers to digitally integrated scientific research that have been erected in OECD countries. Instead, the BRIC countries in particular should collectively resist these pressures and self-consciously adopt limitations and exceptions to copyright and related rights laws that would digitally empower their own scientific research communities without necessarily violating the relevant international intellectual property agreements. If these countries, and other emerging economies, marshaled the political will and governance capacity to undertake such reforms, their leadership in this area might give them a comparative advantage at a time when local scientific and technical innovation has begun to flourish in many key industrial sectors.

Accordingly, two fundamental recommendations are as follows:

• First, the BRIC countries should codify the idea–expression dichotomy—now established in the TRIPS Agreement—as a central subject matter exception,¹⁹⁹ and they should clarify that the legislative intent is to implement this exception at least as broadly as U.S. federal appellate courts routinely do.²⁰⁰

• Second, because the “use of automated knowledge tools in general and computational science in particular, requires scientists to reproduce entire articles from scientific journals; to extract excerpts of varying lengths from them; and to incorporate large extracts of data into their digital research tools for data mining, virtual experiments, and other forms of digital manipulation,”²⁰¹ the BRIC countries will need a broad and sweeping exemption for scientific research uses of literature and data. The clarity of such an exemption should require no gloss, no fine print, and no elaborately contrived carve-outs.²⁰²

The Max Planck Institute has recently proposed that a broad and general exemption of this kind should allow use and reuse of published scientific materials for virtually any scientific purpose, with express legitimatization of storage, archiving, data extraction, linking, and the like.²⁰³ Such a reform should further clarify that scientists remain free to subject any published articles, and any scientific work made publicly available online, to “data mining procedures, data manipulation by automated knowledge tools, including virtual scientific experimentation, without any constraint other than attribution under the norms of science.”²⁰⁴ Any database protection laws that the BRIC countries were unwise enough to enact (by, for example, succumbing to pressures for bilateral agreements with the European Union) would have to be similarly aligned with a broad copyright exemption for uses of scientific literature.²⁰⁵

Beyond these fundamental policy positions bearing on scientific research, the BRIC countries should revise and expand their copyright exceptions for libraries and educational institutions generally, in order to fully exploit the policy space deriving from flexibilities set out in the TRIPS Agreement and other relevant treaties, especially the WIPO Copyright Treaty of 1996.²⁰⁶ In this connection, the library community has been developing a plan of action to promote access to knowledge in developing countries, with particular regard to eliminating legal barriers to cross-border flows of books, periodicals, and other information in both the print media and the online environment.²⁰⁷ Cooperating countries that implemented these proposals could gradually build a contractually created space in which their domestic arrangements accommodating science, education, and libraries were given mutual and reciprocal recognition.²⁰⁸ Equally essential are clear legal measures to enable the bulk purchasing of foreign educational texts on reasonable terms and conditions.²⁰⁹

The BRIC countries, together with governments in other emerging economies, should also consider the potential advantages of adopting a “fair use” provision that would enable courts to deal with fact-specific situations falling outside the codified exceptions to copyright law’s exclusive rights, which invariably occur in practice. A fair use option would create a buffer zone available when other provisions favoring research, education, and libraries appeared unclear or uncertain and yet the use in question served the larger public interest without undue harm to authors.²¹⁰

Properly administered, a fair use provision could justify ad hoc awards of compensation to resolve apparent conflicts between private and public interests in hard cases. It would also help to attenuate potential conflicts between copyright law’s exclusive rights and fundamental human rights, especially free speech, and the overriding “objectives and principles” of the TRIPS Agreement, as set out in Articles 7 and 8.²¹¹

However, implicit in any serious discussion of the trend toward adopting “fair use” regimes outside the English-speaking countries is the fundamental need to reconcile broad exceptions in domestic copyright laws with the three-step test governing limitations and exceptions in international copyright law,²¹² as set out in Article 13 of the TRIPS Agreement,²¹³ and further elucidated in Article 10 of the WCT (together with the relevant Agreed Statement thereto).²¹⁴ Fortunately, the Max Planck Institute, following exhaustive discussions among some thirty experts, has prepared a Declaration on the Three-Step Test that seeks to accomplish this task.²¹⁵ Building on the WCT Preamble,²¹⁶ it would:

• Mandate that courts applying the three-step test of Article 13 in copyright cases take into account the interests of third parties, including individual and collective interests of the general public, and not just the interests of rights owners;²¹⁷

• Avoid prioritizing any one step, or requiring that the answer to all steps should be “yes,” but would instead require a judicial balancing of the different prongs, as occurs under U.S. fair use law;²¹⁸

• Give particular weight to unauthorized uses that are underpinned by fundamental rights²¹⁹ and other “public interests,” notably in scientific progress and cultural or economic development;²²⁰

• Seek to promote competition, especially in secondary markets, by a correct balancing of interests, but without making the three-step test a proxy for competition law;²²¹ and

• Expressly recognize that adequate compensation may be less than market pricing, where other public concerns are at stake, including third party interests or the general public interest.²²²

The BRIC countries could set an example for other developing countries by incorporating these proposals into their domestic laws, by supporting their incorporation into the WIPO Development Agenda, and, if necessary, by defending the tenets of the Declaration in WTO dispute resolution proceedings if they were challenged.²²³

Finally, no reform of the copyright laws’ limitations and exceptions would be worth much in practice if the resulting provisions could not be enforced online or if publishers could simply override them by contract. In regard to the online environment, the WCT of 1996 clearly preserved a signatory state’s rights to maintain all limitations and exceptions “permitted by law” when implementing international obligations to protect copyrightable works transmitted via digital networks by means of TPMs and DRMs.²²⁴ However, the implementing legislation in the United States, i.e., the Digital Millennium Copyright Act (DMCA), declined to exercise this treaty-given power,²²⁵ while the European Union’s implementing legislation, the Infosoc Directive of 2001,²²⁶ simply avoided the issue, which was tantamount to the same result.²²⁷

Developing countries should take exactly the opposite path by exercising the inherent power of WCT signatories to implement all limitations and exceptions “permitted by law” in the online environment.²²⁸ The first step is to enact legislation that expressly applies limitations and exceptions favoring scientific research, education, and libraries to works transmitted over digital networks, irrespective of the TPMs and DRMs that otherwise regulate such transmissions. The next step is to further adopt measures that effectively enable the beneficiaries of these exceptions to enforce them despite the electronic fences and digital locks that impair access to protected works in cyberspace.²²⁹

This result can be achieved, for example, by means of a system of “electronic locks and keys” to break through the electronic fences for specified purposes,²³⁰ or by resort to the less costly and burdensome “reverse notice and takedown” procedure that I and Professors Dinwoodie and Samuelson have proposed elsewhere.²³¹ The latter procedure enables would-be privileged users to oblige copyright proprietors to make relevant materials available without the users having to cross the electronic fence or enter the digitally locked gateway at all.²³²

Needless to say, neither approach will suffice if copyright proprietors can override applicable limitations and exceptions by contract, especially one-sided electronic contracts that regulate lawful access to digitally transmitted works. Hence, developing country legislators need to ensure that none of the key exceptions favoring research, education, and libraries can be waived or overridden by contract, especially in the online environment.²³³

Arguably, it is the BRIC countries, and other emerging economies, that have the greatest interest in treating access to scientific knowledge and educational materials as a domestic and global public good, one which should not be privatized beyond limits set by domestic law and policy.²³⁴ While operating within the confines of existing international intellectual property laws, it behooves these countries—both at the domestic and regional levels—to play a leadership role in implementing and amplifying the flexibilities set out in the relevant international conventions, with a view to benefiting their own research and educational communities.

At the multilateral level, these countries should evaluate the extent to which their own needs for access to knowledge oblige them to support WIPO Development Agenda goals consonant with those needs, in opposition to the high-protectionist policies favored by the United States and the EU.²³⁵ Bold legislative initiatives in domestic laws on these matters could thus help to set and define the international copyright law agenda for the next several decades.

3. Measures Concerning Competition Law and Misuse

There is nearly universal recognition of the need to redefine the border between intellectual property rights and competition law in a manner conducive to promoting worldwide markets for technology.²³⁶ Here the high- and middle-income developing countries need to formulate competition laws and policies “to ensure that foreign technologies and know-how flow to local markets” under reasonable terms and conditions and at prices local entrepreneurs can afford.²³⁷ In so doing, they should fully exploit the competition law exceptions available under the TRIPS Agreement²³⁸ and draw upon solutions and proposals emanating from both past and present practices in OECD countries and elsewhere, given the political will and skill to do so.

However, resorting to competition law and policy has so far proved difficult for most developing countries. In part, this reluctance may stem from the complex economic analysis, high transaction costs, and regulatory skills associated with the practice of competition law in the most developed countries.²³⁹ Moreover, key differences between EU practice, which emphasizes measures to prevent abuse of a dominant position, and—until recently—the less aggressive stance of the U.S. authorities, who seek evidence of actual or intended monopolization,²⁴⁰ may hinder clear thinking about the relevant problems in developing countries. Both the EU and U.S. regimes depend on proof of market power, although long-standing (but increasingly disfavored) common law precedents in patent law allow U.S. courts to suspend enforcement of valid patents for acts of “misuse,” even in the absence of market power.²⁴¹

Besides these technical intricacies, policymakers in developing countries that become serious about the interface between intellectual property and competition law must make high-level decisions about the goals of competition law in general, i.e., efficiency or fairness, or some combination of both.²⁴² They must then reconcile their versions of competition law with the incentives to innovate that flow from the exclusive rights of intellectual property laws.²⁴³ Here again they may be deterred by prevailing tendencies in developed countries to view competition law and intellectual property law as complementary means of mutually promoting social welfare, rather than as disparate regimes in conflict with one another.²⁴⁴ The latter view more readily supports doctrines that override intellectual property rights, such as the “essential facilities” doctrine, much invoked in European scholarship and much harder to obtain in practice than in theory.²⁴⁵

Although developing countries have lagged behind in this field, both India and China have recently begun to formulate competition law and policy with a view to circumscribing the exclusive rights of intellectual property laws. For example, India has adopted patent misuse provisions that limit a licensee’s ability to acquire or use “any article other than the patented article” or to use “any process other than the patented process,” with a view to prohibiting any form of tying.²⁴⁶ Refusals to deal may also trigger the grant of compulsory licenses under India’s current framework,²⁴⁷ as will undersupplying the market or charging excessively high prices.²⁴⁸

Similarly, China’s third amendment of its Patent Law seems to have expressly codified the power to grant compulsory licenses for abusive practices with regard to both patents and utility models. Articles 48 through 54 reportedly envision a compulsory license for abuse, including failure to work, within the purview of Paris Convention Article 5A, or for anticompetitive effects of the patent monopoly that “should be reduced or removed.”²⁴⁹ Such a license may also issue, under Article 54, for refusals to deal on reasonable terms or within a reasonable period of time.²⁵⁰

The measures adopted in India and China may serve to stimulate other emerging economies that have so far played virtually no formative role in this area at all. If so, developing countries may also discover needed self-help measures that competition law might afford if and when market failures of various kinds impede access to green technologies, as many fear will occur.²⁵¹

Policymakers should accordingly consider early U.S. cases that emphasize fairness over efficiency.²⁵² They should also adopt both the “abuse of a dominant position” approach found in EU competition law and flexible doctrines of “patent misuse,” which could reach refusals to deal, excessive prices, and undersupply of the market, without a showing of market power.²⁵³ But such measures must be applied equally to domestic and foreign firms, without discrimination,²⁵⁴ which could raise serious obstacles in many emerging economies.

C. Revitalizing a Petrified Intellectual Property System

The foregoing exercise attempted to illustrate how the BRIC countries and other emerging economies could forge needed solutions to bourgeoning intellectual property problems that developed countries have either neglected or failed to resolve. In this endeavor, BRIC countries would be motivated by the greater stake they now have in what Carolyn Deere has felicitously called the “Implementation Game,”²⁵⁵ owing to steadily mounting payoffs from strategic uses of locally generated knowledge goods. By carefully reevaluating their own intellectual property needs in the light of growing technological capacities,²⁵⁶ they could begin to overhaul and reshape an “out of balance” system driven by ideology and power politics²⁵⁷ in order to address the real conditions of creativity and innovation in today’s digitally empowered universe of scientific discourse.²⁵⁸

Once embarked along such a path, policymakers in these countries would discover the growing importance of publicly accessible infrastructure in the development of new and complex technological paradigms.²⁵⁹ They would profit from the problem-solving capacities of liability rules, especially when applied to upstream research outputs and tools that lack clear market values and that lend themselves to multiple downstream applications of unknown or uncertain value.²⁶⁰ They would strive for more fluid and balanced interchanges between public and private goods in knowledge economies driven by both heavy public investment in basic research and by private investment in translating that research into workable commercial products.²⁶¹ And they could play a unique role in developing global administrative law norms as well.²⁶²

In sum, the BRIC countries, pursuing their own self-interest in economic growth with suitable coordination strategies,²⁶³ could conceivably break the maximalists’ stranglehold on intellectual property lawmaking exercises, which aims mainly to preserve a “knowledge cartel’s” comparative advantage in existing technological outputs at the expense of future innovation requiring more subtle forms of nurture.²⁶⁴ In so doing, the BRIC countries would devise and test new approaches and solutions that could redound to the benefit of technology-exporting countries everywhere, most of which seem incapable of reforming their increasingly dysfunctional innovation systems at the present time.²⁶⁵

IV. Obstacles to Implementing “Counter-Harmonization” Initiatives

The question this optimistic portrait begs, however, is why developing countries have not already taken longer strides in this direction when implementing their responses to the challenges posed after the 1994 adoption of the TRIPS Agreement. Carolyn Deere’s recent efforts to answer that very question afford a bleak and cautionary picture of the obstacles that stand in the way of autonomous intellectual property reforms.²⁶⁶

She shows, for example, that strong economic pressures, including the threat of trade sanctions and other diplomatic measures, combined with offers of future trade concessions, were more likely to produce TRIPS-plus provisions in FTAs than efforts to flesh out existing flexibilities in the TRIPS Agreement.²⁶⁷ High-level lobbying by specialized knowledge communities, backed by one-sided technical assistance from WIPO and government agencies in developed countries,²⁶⁸ further “shap[ed] developing country perceptions of the political climate and their room for [maneuvering] within it,”²⁶⁹ although countervailing efforts by NGOs, academics, and others became more effective over time.²⁷⁰

On the domestic front, a lack of technical expertise hampered many developing countries.²⁷¹ As Professor Dreyfuss observes, “Astute lawyers should be able to utilize these [TRIPS] flexibilities …. The rub, however, is the need for astute lawyering … [which in turn depends on nurturing] a legal community capable of utilizing the Agreement’s flexibilities effectively.”²⁷²

Even when the relevant expertise emerged over time, the lack of internal government coordination among agencies affected by intellectual property law and policy left too much power in the hands of national IP offices, which were more likely to share the views of their foreign counterparts, and also left non-expert government officials more vulnerable to pressures from foreign governments.²⁷³ In many developing countries, parliamentary debate and public discussion about intellectual property issues were negligible, which delegated policy framing to “national associations of patent and trademark agents and copyright lawyers, staff of national intellectual property offices, and national legal scholars.”²⁷⁴ Weak governance and widespread corruption were, of course, ancillary factors in most of the developing world,²⁷⁵ with some notable exceptions in the Andean Community.²⁷⁶

One may then ask why matters should be different in the future. The answer is largely rooted in the real economic and technological capacities being attained in countries such as India, China, Brazil, and others. Such real world experience breeds, first, greater awareness of both the strengths and weaknesses of conventional intellectual property norms and policies encountered along the way, and second, a greater confidence in the ability of local entrepreneurs and policymakers to tailor future decisions and positions in their national interest.²⁷⁷

There is, of course, a countervailing risk that greater technical capacity at the national level, especially in the BRIC countries, could breed domestic lobbying pressures favoring protectionist measures that might further distort, rather than rebalance, the international intellectual property system.²⁷⁸ Also relevant is the continued ability of NGO advocacy initiatives, such as the Access to Knowledge Campaign,²⁷⁹ to reach policymakers in developing country capitals, despite funding cuts due to economic recession and to pressures from high-protectionist interests on foundations previously supportive of such initiatives.

Of particular importance are the lessons to be learned from the coordination and governance strategies of those BRIC countries that have most succeeded in resisting foreign pressures for TRIPS-plus agreements and legislation while maintaining an increasingly autonomous policy of their own.²⁸⁰ Here empirical evidence showing the ability of Andean Community institutions to resist attempts to influence the formation of regional intellectual property laws and policies on numerous occasions sets an impressive example.²⁸¹ But regional coordination, a key aspect of Professor Kapczynski’s own “counter-harmonization” strategy,²⁸² is often difficult to achieve and risks becoming fragile over time.²⁸³ Moreover, that very regional process can be captured and turned against the interests of national innovation systems needing broadened TRIPS flexibilities, as Carolyn Deere documents in the case of francophone Africa.²⁸⁴

To offset these risks, Professor Kapczynski buttresses her “counter-harmonization” thesis with supplementary strategies of “fragmentation” and “mimicry.”²⁸⁵ Fragmentation entails “the adoption of unique or semi-unique national variations in law that create legal ‘friction,’ impeding the flow of the transnational circuits” that undermine local autonomy.²⁸⁶ Mimicry, in contrast, entails “a dynamic reworking” of transplanted IP norms, which is cast as a process of “sharing or borrowing.”²⁸⁷

For these and other related proposals to succeed, however, at least three supporting institutional factors become relevant, if not indispensable. These are: 1) the need for interagency coordination at the national, and, ideally, regional levels; 2) the need to establish facts on the ground in the domestic laws of the emerging economies; and 3) the willingness of the relevant governments to defend national variations of TRIPS flexibilities before WTO dispute resolution tribunals.

A. Interagency Coordination of Intellectual Property Law and Policy

In the late 1990s, under a seed grant from a unit of UNDP, Ruth Okediji, Jayasharee Watal, and I argued that internal governmental coordination of intellectual property policy would be crucial to formulating appropriate domestic strategies to implement international intellectual property standards under the TRIPS Agreement.²⁸⁸ Because, in our view, these new IP standards would affect all of a country’s creative and industrial sectors in different ways, depending on its specific national assets and liabilities in each sector, there could be no internal “one size fits all” solutions, despite external pressures for such an approach.²⁸⁹ Rather, the challenge for governments was to take stock of those same national assets and liabilities and then to fashion implementing strategies that would enable each developing country to maximize potential gains from intellectual property protection over time while minimizing the social costs.²⁹⁰

Our central recommendation was accordingly that developing country governments needed to form and staff ongoing interagency coordinating committees on intellectual property law and policy, in order to advise policymakers about the implications for economic and social welfare as a whole of every proposed legislative or administrative decision concerning compliance with the TRIPS Agreement and related issues.²⁹¹ Above all, it seemed essential that these local coordinating committees would oversee the activities of national intellectual property offices, while pooling their resources at the regional level, in order to maintain coherent and effective negotiating positions in the relevant multilateral fora, including WIPO, WTO, WHO, UNCTAD, and UNESCO.²⁹²

To their credit, UNCTAD sponsored a conference in Ghana at which some sixteen delegations from different countries evaluated these proposals. Notwithstanding the attending delegations’ enthusiastic endorsement of these proposals, and UNCTAD’s strong commitment to promoting their implementation, further UNDP funding was denied. The project was soon abandoned, in part because some high-level UNDP officials thought that developing countries should work to repeal the TRIPS Agreement rather than to comply with it, and in part—one suspects—due to pressures on UNDP from key donor countries to steer clear of controversial intellectual property matters.

In retrospect, both Carolyn Deere’s and Laurence Helfer’s empirical findings demonstrate the validity of the proposals for interagency coordination that were put forward in the late 1990s and the extent to which such recommendations still remain relevant to today’s counter-harmonization strategies, including efforts to implement the WIPO Development Agenda. Deere’s study shows that those BRIC countries that were most successful in defining and maintaining autonomous intellectual property policies and positions over time, especially India and Brazil, despite enormous pressures from foreign governments, were precisely those countries that had highly developed interagency coordination mechanisms in place early on.²⁹³

In this connection, it is worth noting that China’s third amendment of its Patent Law in 2008, which self-consciously seeks to balance incentives to innovate with the larger public interest, was the product of a high-level policymaking group charged with the formulation of a National Intellectual Property Strategy.²⁹⁴

Elsewhere, Professor Helfer’s research team shows that the Andean Community’s own intellectual property rules significantly influenced the expectations and behavior of private actors.²⁹⁵ By the same token, the Andean Tribunal of Justice (ATJ) not only created the kind of procedures and standards familiar in well-functioning legal systems, it “helped to rebuff pressure by the United States and multinational corporations to circumvent Andean IP rules, leading to different behavior by national actors from what it would have been in the absence of the Andean legal system.”²⁹⁶

In contrast, most other governments delegated the task of responding to TRIPS and drafting the relevant laws to a small staff of technocrats located in national intellectual property offices.²⁹⁷ Carried to the regional level in Africa, for example, this meant that national intellectual property policies were largely delegated to the African Intellectual Property Organization (OAPI) and to the African Regional Intellectual Property Organization (ARIPO) (English-speaking countries). Both entities worked closely with WIPO and left few countries at the national level with sufficient “capacity … to critically review patents granted,” among other policy issues.²⁹⁸

Of course, the successes attained in India, Brazil, and China were also due to the economic opportunities their large markets offered to foreign investors, irrespective of their own intellectual property laws and policies.²⁹⁹ Nevertheless, it seems clear that without effective interagency coordination of these issues at the domestic level, developing countries will not attain the leadership role in intellectual property policymaking at the international level to which they otherwise could and should aspire.³⁰⁰

B. Establishing Facts on the Ground

The Development Agenda, now officially established at WIPO³⁰¹ and analogous forums at other institutions, such as the IGWG deliberations at WHO³⁰² and their progeny,³⁰³ have changed the policy climate at the international level. They elevate the concerns of developing countries, as well as the broader constituencies in developed countries that they indirectly represent, to a level of importance that cannot be ignored.³⁰⁴ They make the implementation of the flexibilities set out in the TRIPS Agreement and in other intellectual property conventions as much a matter of legitimate multilateral concern as compliance with proprietors’ exclusive rights.

In this respect, users’ rights and other third party interests, including the larger public interest in research, education, and access to knowledge, have become an integral part of the relevant international intellectual property standards set out in these conventions.³⁰⁵ Moreover, by linking the larger development component to questions of enforcing intellectual property standards at the international level, the Development Agenda and IGWG-related consultations make it mandatory for both IGOs and national delegations to take into account the countervailing demands of the human rights conventions,³⁰⁶ as well as the expressly designated objectives and principles codified in Articles 7 and 8 of the TRIPS Agreement.³⁰⁷

Yet, nothing is cheaper than talk at IGOs. The prospects of top-down multilateral legislation mandating hard law provisions favoring the interests of developing countries are virtually nil at the present time, given the governance structure of these organizations and the hostility of the United States, European Union, and Japan to any such initiatives. Whether soft law reforms stand a better chance of approval remains to be seen,³⁰⁸ including the social costs of any trade-offs that would have to be made in order to win the assent of the aforementioned developed countries.³⁰⁹

Meanwhile, secret provisions likely to be incorporated into the pending Anti-Counterfeiting Trade Agreement (ACTA) negotiations³¹⁰ could undo key provisions of the Doha Declaration on the TRIPS Agreement and Public Health.³¹¹ EU customs officials are further undermining access to medicines by intercepting shipments of unpatented generic pharmaceuticals from India to developing countries in other continents.³¹² And WIPO has hosted a major conference to convince least-developed countries, such as Haiti, that their future economic prospects depend on stronger intellectual property laws, which they are otherwise not obliged to enact until at least 2013.³¹³

What must occur, instead, if the WIPO Development Agenda is to produce more than talk,³¹⁴ is that leading developing countries, especially the BRIC countries, take steps to implement model TRIPS-compliant flexibilities in their own domestic laws, while championing these same positions in the relevant international fora. China, for example, has articulated the “public order” exception to patentability under Article 27.2 of the TRIPS Agreement to exclude “any invention-creation that is contrary to the laws of the State or social morality or that is detrimental to the public interest.”³¹⁵ Building on this provision, China’s third revision of its Patent Law regulates access to genetic resources for the first time;³¹⁶ imposes a “prior informed consent regime” consistent with the Convention on Biological Diversity;³¹⁷ and makes disclosure of origin a precondition for the granting of any patented invention “depending on genetic resources.”³¹⁸ These provisions were adopted to deal with the problem of “biopiracy” and modeled on similar legislation in the Andean Community and India.³¹⁹

In contrast with these palpable concerns about protecting potentially valuable genetic resources, the BRIC countries as a group lag behind in recognizing impediments to computational research methods and innovation that lie hidden in obsolete copyright regimes.³²⁰ For example, nothing prevents Brazil, India, and China from proceeding on their own to codify broad limitations and exceptions for digitally integrated scientific research, education, and libraries in their domestic laws, as stepping stones to broader international action.³²¹ By the same token, courts or legislatures in these and other countries could begin to implement the Max Planck Institute’s Declaration on the Three-Step Test in their domestic laws,³²² along with selected other “ceilings” on intellectual property rights that have emerged from parallel initiatives in the Nordic countries.³²³

Only if leading developing countries begin to enact suitable reforms of intellectual property law and policy at home will it become realistically possible to foresee these reforms spreading to the regional and multilateral levels, where both positive and negative results of such experiments could be evaluated. Just as the AIPPI forums in the nineteenth and early twentieth centuries shed a comparative light on state practice in developed countries and led to the progressive harmonization of inventors’ rights over time,³²⁴ so, too, can the WIPO Development Agenda become a focal point for comparing and contrasting diverse state actions on the road to achieving a new and better equilibrium between private and public goods at the national, regional, and multilateral levels.

Meanwhile, still other worthwhile initiatives can be rooted in state practice without formal acquiescence at IGOs. For example, there are now real prospects for an international treaty providing greater access to literature for the blind,³²⁵ a process that is long overdue and worthy of strong support by all WIPO member countries. At the same time, nothing stops the developing countries from immediately codifying key provisions of this proposed treaty in order to create “facts on the ground” that would benefit the blind now and pave the way for future enactment in the WIPO framework.

Similarly, if a prize fund to promote research on a vaccine for Chagas disease is a good idea, as the evidence suggests,³²⁶ then the Latin American countries should establish such a fund now, with their own contributions, and shame the developed countries into joining them later. In other words, the more that the developing countries are willing to stand up for their own intellectual property needs, the more likely they are to ensure that those needs will be respected in future international intellectual property lawmaking exercises.

C. Defending the TRIPS Flexibilities at the WTO

Moving beyond talk will not become feasible unless developing countries are willing to defend their rights to implement the TRIPS flexibilities in their own domestic laws without undue interference from powerful states that espouse conflicting interpretations of international IP standards. The more that single states, such as the BRIC countries, or regional coalitions, take steps to fully implement limitations and exceptions to the exclusive rights covered by the TRIPS Agreement, for example, the more likely it becomes that governments in developed countries will contest the legality of such actions through diplomatic representations and threats of retaliatory measures.

The USTR has repeatedly used actions under Section 301 of the Trade Act of 1974³²⁷ to challenge developing country governments’ interpretations of the TRIPS Agreement, in combination with threats to withdraw GSP privileges in reprisal.³²⁸ These tactics aimed to keep developing countries from using compulsory licenses to persuade pharmaceutical companies to market patented medicines on a “high-volume low-margin” basis³²⁹ rather than at prices only the affluent can afford.³³⁰

Unless public officials in developing countries are willing to stand up for their rights under the TRIPS Agreement and related conventions before the TRIPS Council³³¹ and, where necessary, in WTO dispute-resolution proceedings,³³² they will not retain the full policy space in which to maneuver that these conventions actually afford.³³³ Conversely, governments that do stand up for such rights stand a good chance of persuading the WTO Appellate Body that unilateral actions taken against them violate fundamental WTO precepts.

Article 23 of the WTO’s Dispute Settlement Understanding (DSU) obliges Members to seek redress for alleged violations of the WTO Agreement, including its TRIPS component, by means of specified multilateral venues and procedures.³³⁴ Under this provision, the U.S. authorities can challenge a developing country’s interpretation of its TRIPS obligations by initiating litigation before a dispute settlement panel, with a right of appeal to the WTO Appellate Body. But the USTR cannot unilaterally adjudicate disputes over matters covered by the TRIPS Agreement, nor can it legally impose sanctions for the loss of its expected trade benefits.³³⁵ Freedom from unilateral action of this kind is one major reason that developing countries signed onto the 1994 agreement establishing the WTO in the first place.³³⁶

In 1999, a WTO panel convoked by European Union officials criticized the United States for unilaterally applying Section 301 to TRIPS-related matters, and it warned that sanctions would be in order if such violations continued in the future.³³⁷ If developed countries continue to engage in unilateral retaliations of this sort, they run the further risk of other countervailing measures that aggrieved countries could invoke:

Because such action constitutes a violation of the DSU and of the framework Agreement Establishing the WTO, it would entitle the aggrieved party to all the remedies that the Vienna Convention on the Law of Treaties provides for breach of the relevant agreements. A primary remedy thus provided is the age-old right of self-help implicit in the power of an aggrieved party to suspend its obligations under the treaty in question, pending compensation for breach.³³⁸

Developing countries that win dispute settlement cases against developed countries may also invoke cross-collateral trade sanctions in the event that damages based on sanctions against imports of knowledge goods alone were insufficient to cover the actual trade losses caused by the defendant country’s violations of the WTO Agreements.³³⁹

Those developing countries willing to defend their interpretations of the TRIPS Agreement before WTO dispute settlement panels have already made significant contributions to our understanding of international intellectual property law. For example, in the very first WTO TRIPS case concerning a dispute between the United States and the European Union on one side and India on the other, the Appellate Body, while finding against India on the merits, rejected the interpretation put forward by the plaintiffs.³⁴⁰ Instead, the Appellate Body stressed the need for deference to the manner in which states undertook good faith implementation of TRIPS obligations within their domestic legal systems, in keeping with Article 1.1 of the TRIPS Agreement itself.³⁴¹

More recently, in a dispute about the enforcement of intellectual property rights between China and the United States, the panel’s decision on the merits went both ways, depending on the specific issues.³⁴² Nevertheless, as Professor Dreyfuss points out, the panel gave China “extensive leeway to determine how to dispose of infringing goods and where to set the threshold for criminal enforcement,” while stressing that “TRIPS is a minimum standards regime … that gives members freedom to determine the most appropriate method of implementing their obligations.”³⁴³ Professor Dreyfuss thus predicts that greater participation of the emerging countries in the WTO adjudication process would likely push both panels and the Appellate Body to more carefully scrutinize the balancing factors favoring developing country interests that are already built into the TRIPS Agreement than has so far occurred in cases where the only antagonists are developed country Members.³⁴⁴

V. Concluding Observations

While much of the recent literature continues to focus on two fundamental tenets of the high-protectionist rhetoric, namely that stronger IPRs necessarily lead to more innovation and more transfer of technology and that they are essential for attracting FDI,³⁴⁵ other studies have demonstrated that technology exporters need access to emerging Asian and Latin American markets as much as these countries need FDI, licensing, and up to date high-tech goods.³⁴⁶ So long as the general level of IP protection in emerging markets affords technology exporters the minimum standards and entrepreneurial options available under the TRIPS Agreement, these exporters will find ways to reach attractive markets, and would-be purchasers in developing countries can usually meet their needs through sound procurement strategies.

Specific bottlenecks are more likely to arise from refusals to deal, excessive pricing, territorial restraints on outputs, and other restrictive business practices that suitable competition laws and policies could help to resolve than from gaps or inadequacies in local intellectual property laws.³⁴⁷ Even so, the weak enforcement of IP laws may have detrimental effects on both local and foreign producers.³⁴⁸ Meanwhile, innovative firms benefiting from a pro-competitive environment in developing countries can also profit from high-protectionist IP regimes abroad—under the independence of patents doctrine³⁴⁹—without aping the protectionist excesses of those regimes.

As Keith Maskus has explained, IP regimes are but one component of a healthy development-oriented economy. Without an appropriate infrastructure that includes corporate law, bankruptcy law, and a solid educational system, among other variables, IP protection may add little to either FDI or economic growth in its own right.³⁵⁰ Moreover, as the relations between IPRs and innovation in knowledge economies become better scrutinized, the proper role of IPRs as such in overall development policies remains far less clear and more complex than the IP literature normally recognizes.³⁵¹

Policies favoring the formation of scientific research commons, as well as open access to knowledge initiatives, may become as important in the BRIC countries, especially for sustainable upstream knowledge outputs, as strategic reliance on exclusive rights to stimulate downstream commercial applications of basic research.³⁵² Unless these countries actively adapt the TRIPS Agreement’s flexibilities to their own development needs, with a view to maximizing the benefits and minimizing the social costs of harmonized international IP standards,³⁵³ they may end up “financing not just or even primarily their own growth, but promoting the economic growth of developed countries, possibly to the detriment of their own economic development.”³⁵⁴

Against this background, the high- and middle-income developing countries, as a group, are well positioned to undertake a leadership role in adapting traditional intellectual property law to the new technological conditions and challenges that the OECD countries have increasingly failed to address.³⁵⁵ To the extent that these emerging economies avoid the pitfalls that have begun to undermine markets for technology in the United States and the European Union, fashioning a more flexible, balanced, and modern approach to intellectual property law could in fact enable them to boost their growing comparative advantages in cutting-edge technologies well beyond current levels.³⁵⁶ To achieve this result, however, will require developing country governments to self-consciously adopt disciplined legal and political strategies that preserve the policy space in which to devise and test their own intellectual property institutions and to stimulate a vigorous and concerted debate about the proper design of those same institutions.³⁵⁷

Legal circles in the emerging economies will also have to study and master the relevant WTO jurisprudence, as the Japanese did at an earlier period,³⁵⁸ in order to steer clear of obvious legal obstacles and to defend national autonomy at the TRIPS Council or, when necessary, in actual dispute settlement cases. These countries should also avoid further multilateral and bilateral standard-setting negotiations likely to limit their own autonomy and governance capacities, while at the same time seeking to forge regional understandings on these same issues that could attenuate the pressures from abroad.³⁵⁹ Above all, most developing countries still need to establish solid interagency review mechanisms that can exercise oversight of their intellectual property bureaus and ensure that the latter properly implement national innovation policies established at the highest levels of government.³⁶⁰

From a broader perspective, any uniquely developing country effort to fashion appropriate intellectual property regimes for the twenty-first century must necessarily seek a new equilibrium between public and private goods. Because the last half of the twentieth century was so consumed with conflicts between public-centered and private-centered economies, insufficient thought was given to evaluating the proper and ever-evolving interrelationship between private and public goods, which the rise of knowledge economies has made so critically important.³⁶¹ In this context, Joseph Stiglitz’s call to recognize the role of “knowledge as a global public good”³⁶² has generated an important literature whose practical implementation should become a primary goal of forward-looking policymakers in all developing countries.³⁶³

These countries should also build ever stronger connections to the worldwide flow of scientific and technical information, a task that will require sharing locally generated scientific data with the rest of the world (as China has begun to do),³⁶⁴ while resisting legal, economic, and technological restraints on the dissemination of such data.³⁶⁵ A particularly forward-looking policy would, for example, lead developing countries to support open access and other sharing mechanisms at the level of scientific enquiry,³⁶⁶ while taking steps to better ensure downstream support for innovative applications flowing from cooperative public–private upstream research initiatives.

If, at the end of the twentieth century, we learned that access to knowledge was as important for economic growth and human welfare as stimulating investment in the production of knowledge goods, it could be the developing countries as a group that lead us out of certain blind alleys that currently pit these two essential policy goals against one another. It is, as Professor Dreyfuss and I have recently argued, precisely a time for experimentation, and not a time to copy or codify obsolete approaches that are likely to boomerang against the long-term interests of the very developed countries that are most avidly pushing the harmonization buttons at the international level.³⁶⁷

To be sure, charting one’s own course is never easy, especially when powerful countries and knowledge cartels apply countervailing pressures at every step. Nevertheless, I continue to believe that, with enlightened leadership, buttressed by “skillful lawyering, political determination and coordinated planning,”³⁶⁸ the intellectual property institutions inherited from the Industrial Revolution can evolve into a worldwide system of innovation that will benefit countries at every stage of economic development.