Nations in their path to economic prosperity have transited through progression of phases from .not yet scientifically developed countries. to .scientifically capable developing countries. and then culminating into .scientifically advanced countries. to gain leadership positions in the technology- intensive competitive market. As society progresses and rapid developments take place, the intersections of science and technology with public policy become significant. National intellectual property policy paradigms evolved as necessities for those countries that elevated themselves from being mere primitive users to developers and traders of knowledge or transformed themselves from being imitators, reverse-engineers to innovators, thereby feeling the need to gain proprietary rights to their knowledge bases.

Viewed from various perspectives, the role of IPR may be perceived as a .cat and mouse. game or .a hare and tortoise race. between nations that have already progressed ahead in the knowledge value chain and the ones who have either made a slow start or are unable to meaningfully take off beyond the starting line. The key question is whether the weaker contestants will ever win the duel or catch-up with their stronger partners-.

However .Tom and Jerry. episodes and the .hare and tortoise. fable provide critical understanding of the processes in which size/strength or speed may not be the only positive deciders. Well-coordinated tactical planning, integrated strategy, and execution often deliver results that may otherwise be considered unrealistic and unattainable.

Recent industrial history has demonstrated that a nation's progress lies in the growth of literacy levels, education, information and knowledge proliferation, advancement and effective utilization of science and technology. The knowledge economy has clearly established that countries in possession of superior knowledge and endogenously built-up capability in innovative S&T possibly via initial cost-effective tapping and adaptation of exogenous technologies and resources complemented by progressive trade policies and industrial climate are able to attract relatively higher levels of foreign investments, chart a speedy course of technological innovations to promote national development. An enabling system of IPR only in tandem with economic progress is expected to set the framework for global social governance that would evolve and establish a sense of respect for the developed knowledge with due recognition, protection and reasonable benefits to the creator/owner, discourage parasitic, knowledge piracy., or .free riding., profiteering from counterfeits in the market and help to create a positive climate fostering symbiotic relationships in society between innovators, producers and users. An aspect of this symbiotic relationship is to afford exclusivity to the innovator for a limited period to benefit from his creation and at the same time discourage or even punish IPR owners for any anti-social monopolistic misuse or unfair use of the exclusivity granted to them. Only then would society provide an ethical climate to continually promote innovation, spur productivity and investment via fair .knowledge prospecting. and contribute to the establishment of a competitive, non-monopolistic and balanced humane world.

One has to recognize that there are no quick fixes in the realm of national S&T capacity building. Recent trends in the global technology trade illustrate trajectories of irreversible discontinuities driven by knowledge-mediated value-creation. stemming from a nation's innovation capability relating to building and extracting value - in both tangibles and intangibles. In the post-TRIPS era, nations, especially in the developing and the least-developed world have and are still struggling to grip and adapt policies to reflect their TRIPS-compliant measures. The dynamic economics of intangibles are problems that sensitively ride on the ever-pressing socio-political priorities causing concerns in the developing and the underdeveloped world on how to handle new knowledge-based drivers and manage strategic portfolio of knowledge assets/quasi-assets and competencies to survive the onslaughts of competitiveness in a society of unequal nations Knowledge has become a commodity, a currency and simultaneously a differentiator for durable profitable trans-border business with IPR proving to be a value-chain creator, stabilizer and differentiator.

The lead national agenda for scientifically capable developing countries of today and of the immediate future is judicious building of human resources, national capability and investments in knowledge through its planned seeding, nurturing and growing complimented by well-balanced enforceable IPR laws to achieve the highest levels of productivity that have hitherto not been achieved. This is to be considered in a backdrop of their position in the economic growth curve and the stage of technological development especially as these countries suffer from a backlash of their colonial legacies. It should also be recognized that the transition time available to these countries is relatively short and compressed as compared to those countries that took to the development trajectory much earlier. Further, in the context of TRIPS Agreement, such countries have to pragmatically landscape their policy platform anchored to national priorities as:

- enacting and implementing laws for the protection of innovations and proprietary data,
- boosting local R&D and industrial development and ensuring legitimate researchers. Rights on IP protected technologies and creations for knowledge enhancing processes,
- ensuring affordable access to relevant technologies,
- creating symbiotic relationships for global collaborative ventures with fair benefit sharing arrangements to facilitate R&D, technology transfer and development of local human resources and infrastructure,
- attracting high levels of foreign investments and global partnering to chart a speedy course of technological development thereby providing increased opportunities for adaptive innovations to stimulate domestic inventive activities and technology development through spillover to indigenous industries and institutions,
- gaining greater access to markets in the developed world,
- structuring multi-lateral taxation frameworks for international technology transfer and IPR,
- addressing trans-border issues on trademarks, copyrights especially involving use of cyberspace,
- protecting indigenous knowledge, environment and genetic resources with appropriate material transfer agreements and prior informed consent for use of any local genetic resource,
- responding to control on export of selective technologies by governments of developed countries,
- establishing strong competition laws to combat overuse or misuse of IPR, and
- setting up national IPR management infrastructure to especially enable local innovators protect their creations in a cost-effective manner.

An issue that is of concern to the developing world is the high-cost to obtain intellectual property rights. For most innovators in the developing world, the high-cost is a non-starter in the process to IPR. Another hurdle in the path to fair use of IPR is wrong granting of patents and other rights to innovations that do not truly qualify for such rights.

Recent patent infringement cases related to drugs with multi-billion turnover, such as, Augmentin, Paxil, Prozac, etc., in which the court rulings went against the. Innovator. company illustrates that a possible wrong granting of a patent can entail very large social cost in terms of delayed introduction of lower cost generics into the market. The question is whether the companies in the developing world have the financial resources to enter such IPR battles even if they possess the intellectual wherewithal.

Similarly, the Turmeric patent revocation. Case initiated by CSIR at the USPTO, the Neem wax patent opposition by a few NGOs at the EPO and the challenge to the. Basmati. Patent at the USPTO illustrates the need for national IPR policies to build in vigilance against deliberate or accidental misappropriation of traditional knowledge by patentees. There may be a need to set up national human resources and funds in developing countries to finance such legal proceedings.

A few case studies would illustrate the approaches taken by a few of the scientifically capable developing countries in restructuring their IPR systems during the last few decades.

India

The Indian Patents and Designs Act was passed in 1911 provided for product and process patents with a term of 16 years from the date of filing the patent. In addition, there were provisions for extension of the term of the patents by 5 years and in exceptional cases by 10 years.

The Indian Patents and Designs Act came under the management of the Controller of Patents and Designs on 15 August 1947. After independence, this Act was nationalized. A patents bill based on a committee presided over by Justice Tek Chand was introduced into Parliament in 1953. The Bill was not proceeded with and it lapsed. This was reintroduced in 1967 that resulted in the Patents Act of 1970, which, together with the rules, came into force on 20 April 1972. This Act known as the Indian Patents Act, 1970, has undergone major changes in the form of two amendments, namely, the Patents Amendment in April 1999 and the second amendment in May 2002. India is yet to enter into the product patent regime and has opted to wait till January 2005.

In the last few years, India has enacted fully TRIPS-compliant Trademarks Act, Copyright Act, Designs Registration Act, Geographical Indications Act and Protection of Layouts for Integrated Circuits Act. A novel Plant Varieties Protection and Farmers' Rights Act, 2001 and the Biodiversity Act, 2002 are also in place.

The Rajagopala Ayyangar Report submitted on 14 September 1959 is an example of a classic analysis of the socio-economic and political scenario of a country that just moved out of the colonial legacy to establish a patent system of its own. Various factors contributing to the elucidation of the problems connected to designing of a proper system of patent law for independent India were:
1 The stage of industrial development in the country.
2. Patentability of invention related to food, medicine, chemical products and substances and the degree of patent protection that ought to be afforded to these inventions.
3. A sui generis system for patentability of inventions related to atomic energy and those relevant for defense.
4. The conditions subject to which patents in general should be open to compulsory licensing and the terms and conditions to which licences should be granted.
5. The countering of attempts by patentees seeing to extend the scope of patent monopoly by entering into restrictive contracts touching the use of unattended articles.
6. Conclusions of the Swan Committee reports that formed the basis of changes in the UK Patents Act, 1949 (Interim reports in March 1945, April 1946 and the final report in September 1947).
7. Status of the patent laws in the UK, Australia
and Canada at that point in time.
8. Geographical limitations to decide on anticipation in case of publications and by prior use.

The Myanmar Report also produced an exhaustive scenario of the global status of patenting as of chemical substances/ products and processes including pharmaceuticals and foodstuffs. It was reported that countries such as Austria, Chile, Czechoslovakia, Finland, Germany, Holland, Hungary, Japan, Mexico, Norway, Poland, Spain, Sweden, Switzerland, USSR, and Yugoslavia did not allow product patents but inventions related to processes for making them were patentable.

The Myanmar Report also stated that barring the USA there were only a few countries in the world that did not have special provisions as regards to the patentability of inventions in respect of articles of food and medicine or as to licensing and working of patents in this class. In some countries even processes for producing them were unpatentable. The countries that did not allow patents for products related to medicines and food stuffs were: Argentina, Austria, Belgium, Chile, Czechoslovakia, Denmark, Egypt, Finland, Germany, Holland, Hungary, Italy, Japan, Mexico, Norway, Poland, Romania, Spain, Sweden, Switzerland and Yugoslavia. In the USSR, only author's certificates were issued for medical and food preparations, prepared by other than chemical means and patents were issued only for methods for preparing these products.

The history of law relating to chemical patents in the UK is fairly long and interesting as it illustrates why and how enactments were passed to meet the German competition to Britain's industry, particularly in the chemical field.

The Indian Patents Act of 1970, based on the Myanmar Report, which came into force in 1972, brought in significant changes with the introduction of a number of restrictions related to patenting of inventions, specially in the area of chemicals, pharmaceuticals, agro-chemicals, foods, in which product patents had been discontinued and patenting of processes with a restricted life of seven years from the date of filing of the complete specification (or five years from the date of sealing the patent, whichever is shorter) was introduced. Anticipation and novelty was benchmarked against global publications but were restricted to India for prior use. The concept of true and first inventor was defined with clarity and excluded communicate and. importer. Compulsory licensing conditions for inadequate working or non-working of the patented invention in India and revocation of patents for non-working.

The protected patent regime provided a safe platform on which pharmaceutical and chemical industries could strike roots and grow in India and also meet the need to increase production rather than relying on imports, which was critical for the national economy. For example, pesticide imports were reduced from around 12,000 tonnes in 1965-66 to a mere 1100 tonnes in 1992-93. The size of the Indian pharmaceutical market is around US $ 4.4 billion and still only about 1% of the global business of around US $ 392 billion with a projected growth to US $ 25 billion by 2010 with a market capitalization of about US $ 150 billion. The average growth in the last few years has been about 12% and ranks as one of the best in terms of technology, quality and range of products manufactured. It has also transformed itself from a net importer to a profitable exporter and employs at least 3.3 million people in India. A number of new processes and technologies for production of drugs, medicines and pesticides have been developed in India resulting in one of the most cost-effective and vibrant drug industry in the world.

The hyper protected patent regime had created a mindset for only the development of alternative cost-effective manufacturing processes and scanty efforts were invested in R&D towards inventing new molecules/products. Ignorance of IPR processes also has led to several. Orphaned innovations which have neither been protected by IPR nor found commercial applications leaving a trail of dormant intellectual property.

This has undergone considerable change in the last few years with enhanced realization both in the public and private sector that the global competition is sweeping in directions beyond process developments. Moreover, newer fields of biotechnology, communications technologies, smart materials, etc, are the fields for intense competition. As the debate progresses, a fraction of the Indian industry especially in the pharmaceutical sector, has already made rapid strides in restructuring the business to meet global standards to steer their growth through world class R&D, striking global alliances, partnerships, collaborations, licensing, etc. The next few years will be crucial for the Indian industry as changes are introduced especially as India moves towards a patent regime as required by TRIPS Agreement.

A jewel in India's R&D crown has been the extraordinary performance of the Council of Scientific & Industrial Research (CSIR), a chain of 38 national laboratories. Recent statistics related to patent filings by CSIR reveals that CSIR in the last decade has transformed its working from routine adaptive research to high valued knowledge generation and exploitation, aggressively patenting its technologies, striking deals for sponsored collaborations with global partners, and converting itself from a governmental. normal cost centre to a profit centre. CSIR now tops the list of PCT applicants from developing countries by sharing the top slot with Samsung Electronics (South Korea) with 184 PCT filings. The next two in the PCT filing list for 2002 are Biowindow Gene Development (China) and LG Electronics (South Korea) with 136 and 125 PCT patent filings respectively. When compared to the other Indian PCT applicants including the private sector, CSIR tops the list with 184 applications, followed by illustrious Indian pharmaceutical companies like Ranbaxy Laboratories with 56, Dr Reddy's Laboratories with 19 and Sun Pharmaceutical Industries with 19 PCT applications.

It is reported that the R&D budget of CSIR is Rs 11,000 million (US$ 234 million) corresponding to 6% of India's national R&D budget of approximately US$ 3.8 billion with 10% of the industrial production resulting from CSIR technologies. CSIR was granted 58 US patents in 2001 taking its total to 174 US patents since 1997. It presently earns approximately Rs 100 million (US$ 2.12 million) from licences but projects earnings of the order of Rs1500 million (US$ 32 million) in the next five years. The working of this organization may be considered as a. model. For institutions in the scientifically capable developing countries.

The Indian Institute of Technology, Bombay, has now integrated IPR into its education and R&D programmes. It has formulated an institutional IPR policy, introduced a course on IPR as formal part of the engineering degree courses, set up a cell to coordinate IPR related activities and conduct structured training programmes in the institution to implement its IPR policy and also incubate and nurture commercialization of their innovations through start-ups and student/faculty initiated companies. The initial results have been very encouraging and hold a good future. This could also serve as a model for educational institutions in the developing world.

In recent times some of the Indian pharmaceutical companies like Dr Reddy's Laboratories have already licensed their new chemical entities to global pharmaceutical industries. This trend including contract R&D, manufacturing, clinical trials, etc. are on the rise. Introduction of a modern Copyright Act well ahead of time gave the Indian IT industry the right impetus to develop and grow to world-class standards and needs no elaboration.

All these have been possible due to the gradual but definite development of S&T expertise over the years in a protective IPR regime. The country has utilized the last 50 years to develop the strong knowledge and S&T base now waiting to take off with a retuned IPR frequency to be in resonance with global trends. What India lacks at the moment is an efficient national IPR management system. However, the government has set aside funds and initiated action to modernize the IPR offices, train their personnel and also has introduced IPR awareness programmes in the country.

The dilemma before the Indian government is how to pace the changes in the Patents Act to make them TRIPS compliant so that the homegrown industries can continue to grow and prepare themselves to face the global competition.

Another area of concern is the protection of her rich biodiversity, traditional knowledge with fair benefit sharing arrangements to communities responsible for their upkeep and development. An issue of significance is one of a delicate balancing of an IPR regime that would offer the inventors a safe protection platform for their innovations and simultaneously keep adequate provisions for intervention by the government to check misuse of IPR. The point in debate is whether to retain strong and restrictive features in the IPR laws via Compulsory licensing or introduce a strong and enforceable IPR regime and do the balancing act of controlling misuse or overuse of IPR via a strong competition law.

China

In the last three decades China realized that the prosperity of the Chinese nation would also depend on its speed and ability to improve and perfect China's IP system as a prerequisite to access and build on world-class technologies acquired from exogenous sources complimented by strategic industrial and investment policies that would ensure protection of local entrepreneurs. China worked on comprehensive and multilevel frameworks to institutionalize IPR and harmonize its IPR laws in line with international systems to aggressively create a new China by building up a model for a socialist modern society. Though the laws were put in place, one of the weaknesses in the Chinese system has been its failure to strongly enforce IPR. Their success is reflected in the high levels of FDI into the country, development of their S&T infrastructure and a focused growth in IP related activities at the national level.

The national movement to protect intellectual property has impacted the educational system, R&D institutions and the industries alike. This is reflected in the dramatic growth of the domestic patent applications to 29,962, an increase of approximately 20% in 2001, the very first year of the 10th Five-year Plan over the previous year's figure of 18.1%. In the year 2000, the R&D expenditure in China was 89.6 RMB and 60.3% of this R&D expenses was given to enterprises. Surprisingly, the number of patent applications for inventions filed by the enterprises accounted for only 30% of the total domestic applications. This has been a cause of grave concern in China and several corrective measures under implementation are:
-. Enactment of globally harmonized IPR laws and systems.
-. Modernized IPR management and administration infrastructure.
-. Trial plan for patent work in 60 enterprises.
-. Three model zones for industrialization of patented technologies.
-. Development and research centre for intellectual property and examination system, including research in patent policy and strategy.
-. Centralized work on assessment of IPR assets.
-. Evaluation of China patent award.
-. Notice against counterfeiting in IPR.
-. Documentation of traditional knowledge databases and their protection.
-. Publicity of patent work.
-. Training of society to take on protection of intellectual property.
-. China intellectual property centres with a distance IPR training programme.
-. Targeted analysis and forecast on IPR protection in strategic technologies of importance to China, e.g. petroleum engineering, digital television technology, liquid display technologies, biotechnology, etc. This is made available to assist in the planning of R&D, allocation of national funds and resources, designing of academic-industry collaborations, managing nationally strategic collaborations, selection of enterprises bringing in FDI, etc.

The positive impact of such measures on China's international trade and economy is self-evident.

Republic of Korea

Republic of Korea has been the seat of rapid industrial development in the Far East. However, it was infested with problems of counterfeiting, blatant infringement of IPR, and systems that encouraged the production of me-too products. However, the reformulation IPR policies in South Korea took off only when large and small local companies including Daewoo, Samsung, transformed into major global players and became vulnerable to piracy even in their home turf. IPR then took off as a national thrust area. In addition to initiating targeted programmers in IPR along the lines similar to China, the Republic of Korea has been very successful in their IPR awareness and sensitization at all levels from the schools, colleges, R&D institutions and industries. This approach has helped to attract investments from companies especially from the electronics and IT sector. The results of this approach have already paid rich dividends. It is now interesting to observe Korea inducing other nations to initiate changes in their IPR laws.

The Next Integrating Steps…

Scientifically capable developing countries now have to evolve pragmatic policy models that would comprehensively address the integration of IPR into their national systems for continual and balanced economic growth. Wealth generation and distribution in the knowledge driven economy demands wellsprings of trained human resources, products and services. Most developing countries and the least-developed countries have been sources of capable manpower and services that get drained into developed countries without any significant return on investment to the country producing them. Such a siphoning generates a non-sustainable developmental framework.

What one needs is to nurture a system that generates capable human resources, high valued services and products that are appropriately protected as intellectual property and transferring them at optimum value as Value added wealth. (VOW!) into the country producing such resources. National policy makers must critically examine the parameters that will create, facilitate and activate such feedback mechanisms to establish symbiotic relationship between nations to ensure continual reinvigoration of national innovation processes.

- (Extracted from the talk delivered at the international conference, Intellectual Property Rights Driver of Competition and Growth or Unnecessary Constraint organized by the Royal Institute of International Affairs in Association with the Intellectual Property Institute, London, June 16-17, 2003).