Understanding the Development Divide: An IP Problem or a Technology Problem?

“In my view, it’s technological capacity, not IP protection, that’s at the heart of the development divide.” – Francis Gurry

Understanding and overcoming the “development divide” between developed and developing nations requires insight into the synergies between technology development and intellectual property (IP) protection.

Arguably, a nation lacking access to or the ability to create and use technology will garner little domestic benefit from a strong IP registration and enforcement system. Because few opportunities for local innovation exist, some would argue that the main beneficiaries of strong IP laws are foreign companies.

But the absence of strong IP laws can discourage local innovation, for there is little profit in what others can copy without cost. A weak IP protection infrastructure can also discourage foreign investment that might prompt technological development.

So, which comes first? Technology development or IP protection?

“When it comes to the role that reducing the divide can play in raising living standards, some people would say that IP protection comes first, but consider, for example, that 99 per cent of essential medicines are off-patent,” says Francis Gurry, Strategic Advisor to IPH Limited (IPH) and the former Director-General of the World Intellectual Property Organisation (WIPO). “In my view, it’s technological capacity, not IP protection, that’s at the heart of the development divide.”

A strong IP system needs a technological base upon which to act, Gurry argues.  A strong IP system may help to develop that base, but without the base, IP has nothing to incentivize. 

Creating technological capacity, Gurry points out, is a long-term strategic process that relatively few countries have been able to achieve.  The Republic of Korea, China and Singapore are examples of very successful transitions to high-technology status, but the process took 30 or so years in each case.

“It requires years of concentrated effort, led from the top, with bipartisan support that doesn’t change when the government changes, and a strategy that involves everything from the educational system to the training of skilled intermediaries, such as patent attorneys and lawyers, the licensing and importation of foreign technologies, the development of capital markets and a start-up culture.”

Then there’s the question of resources, technical and financial, and competing priorities.

“One may ask, for example, why there are not more pharmaceutical plants in the developing world where the need is so obvious and where many technologies or pharmaceuticals are off-patent. Establishing such a plant requires purified water, plant and equipment, packaging and printing resources, a range of skilled and semi-skilled workers with technical and managerial training, a distribution network, and capital, to name but some of the requirements” Gurry says. It is never an easy process and many experiments in the 1970s with turnkey projects turned out to be disasters.” 

Asia, however, is one region where success stories abound.

“In the course of the last 40 or 50 years, we have seen Asia, in general, and China, in particular, emerge as strong, and now leading, technology competitors. Each story is unique, but they share in common a careful and single-minded strategy led from the top and executed over several decades.  The latest example is India where we see steep rises in the number of peer-reviewed science and engineering articles and in the number of domestic and foreign patent applications over the past several years and where, as we all know, highly skilled scientific and technical human resources abound. 

The challenges of developing technological capacity are made even more difficult in the current global environment where technology lies at the heart of competitive advantage and where the pace of technological development is lightening fast.  Catch-up becomes even more difficult as countries guard their competitive advantage zealously and new technologies, such as AI, quantum, bioengineering, and so forth, replace the existing technological base.

All of which is not to suggest that—technological capacity aside— there is no divide among developed and developing nations in the implementation of IP protections.

Chris Ross, Special Counsel in the Wellington, New Zealand office of AJ Park Law Limited, an IPH member, confronts this aspect of the divide regularly in his trademark practice that encompasses the Pacific Islands, where he represents a wide range of multinational companies seeking protection for their brands.

In the developing islands, such as Fiji, Vanuatu, Tonga, and Samoa, which have small populations and limited capacity to maintain infrastructure of any kind, that’s easier said than done.

“These islands lack access to the necessary finance for developing modern IP protection systems, they have difficulty securing the latest technology for registering trademarks and so a lot of the systems are still paper-based, and even where the technology is available, tech support is in very short supply, leading to long delays if any problems arise.”

Still, Fiji managed to enact new IP protection laws in 2021.

“But commencement dates haven’t been announced, and the governing regulations haven’t been drafted,” Ross says. “The trouble in places like Fiji is that often there are more pressing issues to deal with, particularly those resulting from natural disasters.”

Other islands, like Palau, Marshall Islands and Timor-Leste, have no IP law at all, so trademarks can’t be registered.

Samoa does have an updated law and has joined the Madrid System.

“WIPO has been instrumental in getting Samoa to where it is today,” Ross says.

Indeed, WIPO helps member developing nations strengthen their IP systems through training workshops, online resources, and support for legislative reform.

The hope is that IP will promote development rather than division. But that’s not an easy or simple task.

“Fixing the development divide is doable, but there’s no silver bullet,” Gurry says. “It’s a slow and gradual process, not something you can just snap your fingers at.”