Technology Transfer and Intellectual Property Rights: Lessons from Korea’s Experience
UNCTAD-ICTSD Project on IPRs and Sustainable Development Series • Issue Paper 2
The present paper dealing with Transfer of Technology and IPRs: Lessons from Korea’s Experience is one contribution of the Project to this ongoing debate on the impact and relevance of intellectual property to development. It confirms, in essence, the finding of recent studies, according to which the effects of IPRs on technology transfer will vary depending on countries’ levels of economic development.
The Korean experience offers four lessons. First, strong IPR protection will hinder rather than facilitate technology transfer and indigenous learning in the early stage of industrialization when learning takes place through reverse engineering and duplicative imitation of mature foreign products. Second, only after countries have accumulated sufficient indigenous capabilities with extensive science and technology infrastructure to undertake creative imitation IPR protection becomes an important element in technology transfer and industrial activities. Third, if adequate protection and enforcement of IPRs is genuinely intended to enhance development, policy makers should seriously consider differentiation in terms of the level of economic development and industrial sectors. Fourth, developing countries should cooperate to change current trends towards a standardized all-encompassing multilateral IPR system. They should strive to make IPR policies more favourable to them in the short term. But they should also strengthen their own absorptive capacity for a long-term solution.
Intellectual property rights (IPRs) have never been more economically and politically important or controversial than they are today. Patents, copyrights, trademarks, industrial designs, integrated circuits and geographical indications are frequently mentioned in discussions and debates on such diverse topics as public health, food security, education, trade, industrial policy, traditional knowledge, biodiversity, biotechnology, the Internet, the entertainment and media industries. In a knowledge-based economy, there is no doubt that an understanding of IPRs is indispensable to informed policy making in all areas of human development.
Intellectual Property was until recently the domain of specialists and producers of intellectual property rights. The TRIPS Agreement concluded during the Uruguay Round negotiations has signalled a major shift in this regard. The incorporation of intellectual property rights into the multilateral trading system and its relationship with a wide area of key public policy issues has elicited great concern over its pervasive role in people’s lives and in society in general. Developing country members of the World Trade Organization (WTO) no longer have the policy options and flexibilities developed countries had in using IPRs to support their national development. But, TRIPS is not the end of the story. Significant new developments are taking place at the international, regional and bilateral level that build on and strengthen the minimum TRIPS standards through the progressive harmonisation of policies along standards of technologically advanced countries. The challenges ahead in designing and implementing IP-policy at the national and international levels are considerable.
Empirical evidence on the role of IP protection in promoting innovation and growth in general remains limited and inconclusive. Conflicting views also persist on the impacts of IPRs in the development prospects. Some point out that, in a modern economy, the minimum standards laid down in TRIPS, will bring benefits to developing countries by creating the incentive structure necessary for knowledge generation and diffusion, technology transfer and private investment flows. Others stress that intellectual property, especially some of its elements, such as the patenting regime, will adversely affect the pursuit of sustainable development strategies by raising the prices of essential drugs to levels that are too high for the poor to afford; limiting the availability of educational materials for developing country school and university students; legitimising the piracy of traditional knowledge; and undermining the self-reliance of resourcepoor farmers.
It is urgent, therefore, to ask the question: How can developing countries use IP tools to advance their development strategy? What are the key concerns surrounding the issues of IPR for developing countries? What are the specific difficulties they face in intellectual property negotiations? Is intellectual property directly relevant to sustainable development and to the achievement of agreed international development goals? Do they have the capacity, especially the least developed among them, to formulate their negotiating positions and become well-informed negotiating partners? These are essential questions that policy makers need to address in order to design IPR laws and policies that best meet the needs of their people and negotiate effectively in future agreements.
It is to address some of these questions that the joint UNCTAD-ICTSD Project on Intellectual Property and Sustainable Development was launched in July 2001. One central objective has been to facilitate the emergence of a critical mass of well-informed stakeholders in developing countries - including decision makers, negotiators but also the private sector and civil society - who will be able to define their own sustainable human development objectives in the field of IPRs and effectively advance them at the national and international levels.