[Ip-health] WTO TRIPS Council (June 2014) - India's intervention on Intellectual Property and Innovation: Innovation Incubators

Thiru Balasubramaniam thiru at keionline.org
Wed Jun 11 09:36:33 PDT 2014

http://keionline.org/node/2019WTO TRIPS Council (June 2014) - India's
intervention on Intellectual Property and Innovation: Innovation Incubators

On Wednesday, 11 June 2014, India delivered a statement at the WTO TRIPS
Council on"Intellectual Property and Innovation: Innovation Incubators";
Chinese Taipei (WTO speak for Taiwan) and the United States proposed this
agenda item.

"We thank the delegations of the United States and Chinese Taipei for
tabling an agenda item on "Intellectual Property and Innovation: Innovation
Incubators " which we understand is a standalone item.

Chair, let me just recall our intervention when the agenda item on IP and
Innovation was first introduced in the TRIPS Council. Our statement is
still relevant when we are discussing the Innovation Incubators under the
broad theme of IP and Innovation. In that meeting India pointed out that
the word “innovation” appeared just once in the TRIPS Agreement, in Article
7 which states that intellectual property rights “should contribute to the
promotion of technological innovation and on the transfer of and
dissemination of technology,” and not for the sake of innovation itself,
but “to the mutual advantage of producers and users of technological
knowledge and in a manner conducive to social and economic welfare, and to
a balance of rights and obligations.”

Thus the TRIPS Agreement makes it very clear that the purpose of the IP
system is not solely to protect the commercial interests of the IP holder
but it is one of the many tools available to the Society to achieve
technological development, its social and economic welfare and innovation.
Further there is no direct correlation between IP and innovation and the
countries have to define the path depending on their level of socio
economic development.

Even today, the view that IP does not necessarily have a positive effect on
economic development is still predominant among economists. For instance,
based on an analysis of historical studies, Bessen and Meurer (2008)
concluded that '.nations with patent systems were no more innovative than
nations without patent systems. Similarly, nations with longer patent terms
were no more innovative than nations with shorter patent terms'. According
to Boldrin and Levine, '[I]ndeed, historical evidence provides little or no
support that innovative monopoly is an effective method of increasing
innovation.' It is not only economists who have this view; it is shared by
a growing sector of business actors. For instance, the Computers and
Communications Industry Association (CCIA), whose members include Google
and Microsoft, says in its Mission statement, 'Innovation – how to foster
it, protect it, and benefit from it – requires us to understand the dynamic
process that has worked to get us to where we are. We do not think it is an
accident that innovation has flourished in a society that values an open,
competitive economic marketplace, nor where original independent and free
speech are enshrined in law. Therefore, our commitment to vigorous
competition, freedom of expression, and openness is a natural product of
the understanding of what has helped our industry thrive, and what it needs
to continue to do so.'

Further, The World Health Organisation (WHO)'s Consultative Expert Working
Group on Research and Development: Financing and Coordination also
recommended open approaches to research and development (R&D) and
innovation. It found that there is insufficient R&D for diseases that
prevail in developing countries and endorsed the adoption of a binding
convention that guarantees the results of R&D will be public goods i.e. not
subject to appropriation but free for use, to generate medicines needed
particularly in developing countries. They also recommended prizes as
incentives to innovation, in particular milestone prizes.

Chair, since we are discussing about the innovation, let me also refer to
the book written by Anna Lee Saxenian: Regional Advantage: Culture and
Competition in Silicon Valley and Route 128. The book is a comparative
study of the two biggest electronics and ICT innovation centres in the US
viz the Silicon Valley and Route 128 corridor in Massachusetts and explains
the reasons for the success of the Silicon Valley and failure of 128 route.
The results of the analysis are relevant to the discussion of this agenda
item to counter the point being made by the proponents that high level of
IP is good for development and innovation. The two innovation clusters
commenced together in the 50s with heavy investment from the government and
without any market competition. Both developed around the Universities of
Stanford and MIT respectively so that the local industry could develop on
account of its proximity to these centres of excellence. Both focussed on
similar areas of technology. Behind the reason for the success of the
Silicon Valley the author gives different reasons. The Silicon valley
evolved a culture of interdependence between the firms with the Venture
capitalists acting as hubs to ensure synergy between different businesses
and services. The Route 128 on the other hand had a culture of independence
of the firms with vertical integration. While there was collaboration,
openness and informal exchange of information and knowledge between these
firms in Silicon Valley, the culture in Route 128 was of closure and
secrecy. High job mobility in Silicon Valley that spread new knowledge:
moving to another firm was not seen as being unfaithful but as a common
thing. New companies made to develop projects that were not possible in
other companies: employees that exited to create startups were not badly
considered but instead their previous employer could start to be client or
supplier of the new firm . On the other hand in Route 128 people stayed in
the same firm for 20 years or more and employees were seen as traitors if
they exited to start their own company. Thus innovation cannot be promoted
through the culture of secrecy propounded by the IP regime but through open
collaborative models, free exchange of information etc.

Chair, there is no doubt that the innovation incubators promote the
development of new technologies. But their success depends on several
factors like infrastructure, resources, level of education, quality of
universities and their linkages with industry , quality of manpower etc. We
are afraid that by looking at innovation through the narrow prism of IP, we
would not only undermine the spirit of innovation amongst the people but
would create barriers in providing affordable, low cost and appropriate
technologies to the developing countries. Further the IP centric model
would discourage basic research needed in varied fields of science and
would block access to affordable medicines to the millions of poor, hamper
the efforts of the developing countries to address environmental issues etc.

India strongly believes in innovation and has setup several such incubators
in the Universities and Premier technical institutes to promote low cost
innovation. The Cluster Innovation Centres, India Innovation Fund, One MP,
One Idea etc. under National Innovation Council have been successful in
providing innovation to the small and medium industries in different areas.
These ideas and centres, based on open source models, have been successful
in providing low cost solutions to the industries, farmers, entrepreneurs
etc. Even the private companies like Microsoft have set up several such
innovation centres to tap the IT skills of the students in India.

Let me therefore conclude by saying that there is not direct linkage
between IP and innovation. While innovation incubators can deliver
depending on individual capacities of the countries, it would be too
simplistic to say that IP focussed model can promote innovation incubators."

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