Global Trends by Martin Khor

Monday 26 October 2009

Hot debate over technology issues

The bone of contention is whether wealthy nations can relax their patent rights so that developing nations can have access to climate-friendly technologies.

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In the ongoing climate talks towards the Copenhagen Conference in December, technology transfer to developing countries is one of the hottest issues.

The developing countries argue that they are unable to successfully shift to a sustainable development pathway, that emits less carbon dioxide per unit of output, unless they have access to  climate-friendly technology at the most affordable price.

A workshop on technology development and transfer was held in Delhi last week, organised by the Indian government and the United Nations economic and social department.

The participants agreed on such measures as the setting up of a network of technology centres of excellence, and joint research among countries to develop and promote relevant technologies.

However, the biggest bone of contention, which was not resolved, was whether the wealthy countries should relax the global rules on intellectual property, so that developing countries can access patented technologies more cheaply and with fewer conditions.

Developing countries generally argue that the prices of technology will be higher if there is a monopoly over the products and the production processes.  Moreover, developing countries' firms will be hindered from producing the equipment or products if they are patented by the rich nations' companies.  

Thus, either developing countries should be allowed to exempt the relevant technologies from patents, or they should be allowed to more easily use existing or new flexibilities in the rules and their application.  And there should be guidelines to regulate the terms set by patent holders in providing licenses to others to make the products or use the processes.

However, the developed countries generally argue in return that patents are needed to provide incentives to spur innovation, and that they would not agree to relax the global rules on intellectual property.

One major reason for this disagreement is that the overwhelming share of patents worldwide is owned by companies or individuals in developed countries, and the developing countries often incur high costs if they want to access patented technologies.

Indian Prime Minister Mr. Manmohan Singh kicked off the debate by saying that climate-friendly technologies should be considered global public goods.  Intellectual property rights applied to those goods should balance innovation with the needs of humankind.

There should be incentives to develop green technologies, but there is also need to facilitate their deployment at affordable cost in developing countries.  This balance was struck for technologies producing medicines in developing countries, and a similar approach to support our climate and life support system is “equally compelling,” said the Prime Minister.

Two United Nations leaders also weighed in on behalf of technology transfer.  UN Under-Secretary General for economic and social affairs Mr. Sha Zukang said a tough issue was in intellectual property, on how to reward innovation while accelerating technology diffusion.

He advocated a big investment push on renewable energy in developing countries.  International technology cooperation and “knowledge sharing” can mobilise mature technologies for developing countries, and make other technologies like renewable energy more affordable to the poor.

The Secretary General of the UN conference on trade and development, Supachai Panitchpakdi, said intellectual property is a critical issue in technology transfer.  He quoted a Chatham House report that concludes that the IP system is too cumbersome.  Instead the rules must strike a balance between IP holders and the public interest, and the Copenhagen meeting should right that balance.

The WTO ministers' meeting in 2001 sent clear signals for developing countries to be encouraged to make full use of flexibilities in the IP agreements for health objectives, and the same logic should apply to climate technologies. There should be a well defined framework to allow the IP regime to transfer climate technologies, he concluded.

The Chairman of the Group of 77 and China, Sudan's Ambassador Mr. Abdalmahmood Mohamad, which represents developing countries, said the group has identified IPRs as a barrier to technology transfer.  Business as usual in IP cannot be the order of the day.  Therefore the group had proposed that all steps be taken in the relevant fora to allow developing countries to exclude climate friendly technologies from being granted patents.

The G77 also proposed creating a global technology pool, in which IP owners can lace their patents and know how, and developing countries can draw from this pool and have access to the technologies, including on royalty-free terms.

Bolivian Ambassador, Angelica Navarro, said although developing countries could use flexibilities like compulsory licenses, there are cumbersome procedures that make them inadequate tools.  Thus, Bolivia had proposed a mandatory exclusion of patents on climate-friendly technologies in developing countries.

Several developing countries' experts and officials however argued in favour of strict adherence of IP rules to give companies the incentive to invent technologies.

In a closed-door session to formulate a conference Declaration, the debate intensified but there could not be any agreement on IPRs.  Thus the Declaration was silent on this key issue.

In a summary of the conference proceedings by the conference Co-Chairs, the Indian environment minister and the UN Under-Secretary General, it was noted that there are different views on the IP issue and a common understanding has to evolve.  

The details of the ideal system should include how to provide more universal access to intellectual property and knowledge, how to democratise access to technologies, and how to ensure that IPRs do not become a barrier to achieving common global goals, said the Co-Chairs.

They added that there is wide recognition of the need for a special mechanism under the UN climate convention for technology transfer, and to oversee the functioning of the IPR regime for climate and development goals.

Other concerns to address include insufficient R and D, inadequate funding, weak capacity, market failure and market distortions, said the Chairs' summary.

As the climate talks proceed to Copenhagen, these technology issues will be even discussed.  Hopefully there will eventually be a good solution.