IIPI Legal Intern Lauren Saltiel on Encouraging Innovation
Supporting International Involvement in Technology Transfer in Developing Countries
19 July 2012
Last month, the United Nations Trade and Development Agency (UNTDA) published a report from its Conference on Trade and Sustainable Development (UNCTSD) on “Structural Transformation and Sustainable Development in Africa,” which echoes a broader call to focus on technological development as a tool for economic growth worldwide. The report emphasizes the need for structurally transformative measures in the area of technology transfer in order to achieve sustainable development goals in the region. In this context, technology transfer is best described as a multidirectional and multi-phase process that includes not only the transfer of innovation, but also of knowledge related to the use and leveraging of this innovation.
The duty of developed countries to engage in technology transfer with developing countries is widely recognized, and is a major component of the WTO-TRIPS agreement. At this point, however, involvement on the part of the international community in this project is not as robust as it should be. This is due in part to an overly narrow understanding of how IPR protection corresponds to levels of development and the necessity for a more systemic and ecological approach to technology transfer. By better understanding how IPRs fit in to the technology transfer process, how the different components of this process affect each other, and the short and long term benefits of helping to build strong technology transfer systems in developing nations, developed countries will hopefully be motivated to take their responsibility as leaders in this process more seriously.
One of the major IPR related barriers to technology transfer is the lack of understanding on the part of developed nations that the level of IPR protection a country can realistically sustain is positively correlated to a nation’s level of development. The developed world believes that the exclusive right to intellectual property is necessary to encourage innovation, and thus pressures developing nations to enforce strict IPR regimes. However, in developing countries—which are overwhelmingly technology “followers” rather than “leaders”—strong IPR protection may not be immediately practicable. In fact, in states that lack a technology base, increasing access to patented technologies is essential for generating new innovations. This is important because it is only when a country has acquired a technology base and is in a position to leverage its own innovation, that stronger protection and enforcement of patent and other relevant IP rights becomes most beneficial. Thus, developed nations must begin to look at strong IPR protection and technology transfer capacity as the initial aims of, rather than requirements for, technology transfer to developing countries.
Unfortunately, even if developed countries are to accept the eventual benefits of helping developing nations achieve a strong technology base, this does not change the fact that they have a vested economic interest in controlling access to their own innovation. Thus, it is unlikely that developed countries will maximize their engagement in technology transfer if they perceive that they are being asked to “give away” their technology. Therefore, what developed countries must focus on is how access to technology in developing countries can be increased in a way that is mutually beneficial, and without sacrificing innovation or IPR protection.
Where protected property is concerned, licensing agreements, contracts, joint research and development agreements, and foreign direct investment (FDI) are all effective and profitable “channels for formalizing technology transfer flows” to developing countries, just as they are valuable tools for facilitating technology transfer between institutions in developed countries. Formalizing technology transfer may in turn help to displace the use of informal modes of transfer (such a reverse engineering) which are often more cumbersome given the existence of rights in the original product. Thus, by investing in building these formal channels, developed countries stand to benefit from the fact that their technologies are being used on terms they have had a hand in negotiating, while the recipient countries benefit from easier and more open access. It is necessary to note that the efficacy and advantage of substituting informal modes of transfer with formal mechanisms is complex and often industry specific. However, the point to glean from exploring these options is the possibility of immediate gains once technology transfer has been made a priority.
Also, IPRs are not the only barriers to technology transfer that developing countries face. There is a great deal of technology from which developing countries might benefit that is already in the public domain but that they do not have the resources or skills to access or leverage. Developed countries can help to reduce many of the costs of technology transfer by taking an active role in helping LDCs build self-sustaining technology transfer systems capable of managing domestic innovation as well as foreign technology. They can also help increase access to technology by educating LDCs on where to look for public domain technologies and by providing them with the knowledge required to use them. Thus, by supporting systemic change to a country’s innovation infrastructure, developed countries can increase their role in building technology transfer systems in the developing world without necessarily compromising protected intellectual property.
Finally, the transfer of technical and business knowledge allows developing nations to strengthen the capacity of their domestic research centers and the government agencies that support science and technology policies in order to successfully receive technical knowledge and continue to innovate. The growth and advancement of developing countries in turn contributes to the growth of the global market for innovation and the global supply of technology. Therefore, investing in the infrastructure of the technology transfer systems is equally as important as helping to build the technology base that fuels it in insuring the future success of the innovation sectors in developing countries and the return on foreign investment in their development.
With this long-term goal of systemic transformation in mind, the International Intellectual Property Institute (IIPI) will launch the second phase of the Innovation Opportunities project in the Philippines. The initiative aims not only to help technology transfer offices in Philippine research institutions become competent in identifying patentable material, educated in the business of technology transfer, and successful in building strong ties to industry, but also to encourage strategic governmental cooperation and smart policy choices. By working with the Philippines to foster an environment conducive to technological innovation and growth, IIPI hopes this program can serve as an example of how the international community can more effectively promote the use of technology transfer as a tool for economic growth in developing countries.
Moving forward, global technology transfer strategy must take more seriously the idea embodied in the TRIPS agreement that the “transfer and dissemination of technology” towards the ends of encouraging innovation is one of the “fundamental goals of intellectual property protection.” Rather than demanding that developing countries put in place strict IPR regimes before they are ready to support them, developed countries should help and encourage developing nations to build infrastructure, acquire knowledge, train professionals, and create an environment that can benefit from strong IPR regimes so that they are able and incentivized to enforce them.
 United Nations Conference on Trade and Dev., 2012, Econ. Dev. in Africa Rep. 2012:
Structural Transformation and Sustainable Dev. in Africa, 27 (June 13, 2012), available at http://unctad.org/en/PublicationsLibrary/aldcafrica2012_embargo_en.pdf [hereinafter “Africa Report”].
 See ICTSD Programme on Innovation, Tech., and Intellectual Prop., Suerie Moon, Harvard Kennedy Sch. of Gov’t, Pol’y Brief No. 9: Meaningful Technology Transfer to LDCs: A Proposal for a Monitoring Mechanism for TRIPS Art. 66.2, 8 (Apr. 2011), available at http://ictsd.org/downloads/2011/05/technology-transfer-to-the-ldcs.pdf (offering multiple definitions for technology transfer and asserting that there is no one definition which has been internationally accepted).
 The WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) includes provisions obliging developed nations to the facilitate the transfer of technology to developing countries (Art. 66.2), allowing for the issuing of compulsory licenses without the permission of the patent holder during certain emergent situations (Art. 31), granting least developed countries (LDCs) and extension for implementation of TRIPS, as well as an explicit recognition of the need for flexibilities in least developed countries. See TRIPS: Material on the WTO Website, WTO, http://www.wto.org/english/tratop_e/trips_e/trips_e.htm#issues (last visited July 16, 2012).
 Suerie Moon, supra note 2, at 13.
 See United Nations Conference on Trade and Dev., UNCTAD-ICTSD Project on Intellectual Prop. Rights and Sustainable Dev., 2010, Dev. Dimensions of Intellectual Prop. in Uganda: Transfer of Tech., Access to Meds. and Textbooks, 13, available at http://unctad.org/es/Docs/diaepcb200913overview_en.pdf [hereinafter “Uganda Report”].
 See EMMANUEL HASSAL ET AL., RAND CORP., INTELLECTUAL PROP. AND DEVELOPING COUNTRIES: A REVIEW OF THE LITERATURE, xiii (2010), available at http://www.rand.org/pubs/technical_reports/2010/RAND_TR804.pdf.
 Africa Report, supra note 1, at 91.
 Id. at 22.
 See CALESTOUS JUMA, CENTER FOR INTERNATIONAL DEV., HARVARD UNIV., INTELLECTUAL PROP. RIGHTS AND GLOBALIZATION: IMPLICATIONS FOR DEVELOPING COUNTRIES, SCIENCE, TECH. AND INNOVATION (1999), available at http://www.cid.harvard.edu/archive/biotech/papers/discuss4.pdf.
 Uganda Report, 5; see MICHAEL NICHOLSON, BUREAU OF ECON., F.T.C., INTELLECTUAL PROP. RIGHTS, INTERNALIZATION, AND TECH. TRANSFER (2002), available at http://www.ftc.gov/be/workpapers/wp250.pdf (discussing how preferred mechanisms for formalizing technology transfer varies depending on the nature of the innovation being transferred); see also Bernard Hoekman et. al., Transfer of Tech. to Developing Countries: Unilateral and Multilateral Pol’y Options (Research Program on Political and Economic Change, Working Paper No. 3, May 2004), available at http://www.colorado.edu/IBS/pubs/pec/pec2004-0003.pdf (discussing other possible channels of formalizing international technology transfer).
 Uganda Report, supra note 5, at 13.
 See e.g., Linsu Kim, UNCTAD-ICTSD Project on IPRs and Sustainable Dev., Tech. Transfer and Intellectual Prop. Rights: The Korean Experience (June 2003), available at http://ictsd.org/downloads/2008/06/cs_kim.pdf.
 Africa Report, supra note 1, at 91.
 Innovation Opportunities: Philippines, Int’l Intellectual Prop. Inst., available at http://iipi.org/2010/08/innovation-opportunities-philippines-2/.
 Africa Report, supra note 1, at 2 (Summarizing Article 7 of the TRIPS agreement.).
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