Intellectual Property in Sri Lanka - a scientist’s viewpoint

Vijaya KumarIndustrial Technology Institute, Colombo.

SLINTEC Knowledge Seminar to Commemorate World Intellectual Property Day

Intellectual Property Rights (IPR)

World Intellectual Property Organization (WIPO) United Nations (1967) International agreements existed on IPR

– e.g. Paris Convention (1883) - Patents, Trade Marks. Flexibility and Autonomy in enacting National laws

Sri Lankan IPR until 1979 Laws based on British laws Signatory to Paris and Berne Conventions

Code of Intellectual Property Act No. 52 of 1979 Similar to Western legislation – US assistance ?

Trade Related IPR “TRIPS” Agreement, 1995

World Trade Organization (1993)

TRIPS - developed country norms on IPR Forced on Developing Countries WTO members - accept agreement totally Flexibility on IPR removed

– Process patent in Pharmaceutical Industry- India

Not properly negotiated US threat of trade sanctions on Brazil Marketed to developing countries

– Promise of expanded trade, technology transfer Unfavourable to developing countries ?

TRIPS - Changes in the IPR environment

All sections to be accepted by WTO members

National/Most Favoured Nation Treatment

Copyright - Computer programs, Databases

Patents - 20 years minimum period Microorganisms patentable (Art. 27.3b) Process patents disallowed Process patents - allowed in Europe until ’70s

Plant varieties Patent or “Sui generis” system (UPOV)

Strengthen enforcement of IPR laws Costs high - US $ 300m, Brazil $ 30m. Who pays ?

IPR in Sri Lanka after TRIPS Expected to conform by 2000

Amendment - copyright to computer programs Date extended – Seattle protests

Intellectual Property Act No. 36 of 2003 Copyright, Patents – scope, duration extended Microorganisms patentable (Only transgenic) Unfair Competition, Trade Secrets, Test results Geographical Indications Layout designs of Integrated circuits Enforcement Compulsory Licensing, Parallel imports (Courts)

Can developing countries benefit from IPR ?

Part of the New World Order No choice but to accept Contradiction between free market model and IPR

Strong IPR promotes national development Encourages inventors/ new technologies Compare innovation in USA/pre-1990 USSR Promotes FDI/Technology Transfer

Only true if: They have a strong national innovation system High national income, commercial environment Stable political system to attract FDI/Technology

Developing Country Concerns on TRIPS

Computer Programs/Journals Monopoly or near monopoly – not free market Prices high for low income economies

Reverse engineering discouraged Basis of Taiwan/Korea’s NIE status

Process patents disallowed Success of Indian pharmaceutical industry Protection of Test data

Geographical indications-only Western products

Mainly enforcing IPR of non-resident firms

Level playing field – For IPR ? For enforcement ?

Developing Country Scientists and IPR

Funds for research Low - insufficient to generate IPR Private sector Research funding negligible Costs include those for failed initiatives

Weak National Innovation System Quality of research staff, Venture capital Poor in commercialization (Incubators)

Human Resources in IPR Low Drafting of Patents- Claims, Patent examination

High cost of IPR and IPR enforcement abroad

Developing country patents often for prestige

Technology and Innovation are important for national development

Important Component of Economic Growth

Schumpeterian Growth

– Growth by increasing stock of human knowledge

– Technological progress and changes in institutions

– Technological change should lead to sustained growth

Important Factor in Improving Competitiveness

Technology and Innovation Perspective –

– Innovation and Learning at Enterprise / National Levels

– Active Public Policies to improve Competitiveness

Real world per-capita GDP grew by: Average of 5% per century during 15/16th century Average of 17.5% during 17th/18th century 248% in 19th century and 863% in 20th century

De Long, NBER Work Paper 7602 (2000)

High growth mainly due to technological change Industrial Revolution (IR) – early 19th century Rapid growth mainly in countries influenced by IR

- Britain, Western Europe and the USA Events following IR responsible for higher growth

Schumpeterian growth

Per Capita GDP 2007 (Source: HDR 2008) High Income countries (Over $ 12,000)

– Norway ($ 63,918), USA, Most W. Europe, Australia, Korea, Singapore, Israel, some oil states.

Upper Middle Income ($ 3500 - $ 12000) – Russia, Most Latin America/Caribbean, S. Africa, Malaysia

Lower Middle Income ($ 1000 - $ 3,500) – China, Developing countries like Sri Lanka, Thailand, India

Low Income (Less then $ 1000)– Pakistan, Most African countries

Big variation in income only after 18th century Most prominent in latter half of 20th century

Wide variation in country incomes today

Countries with > 20 major inventions during period England: first half of 18th, and second half of 19thcentury Germany: Second half of 19th century USA: Second half of 19th century, 1930-1965 & 1965-2000

Immense European gains in 20th century in spite of: Collapse of international trade after 1914 A costly depression in late 1920’s Two disastrous world wars, Loss of colonies

US domination Less involvement in World War II Loss of European colonies ?

Importance of Inventions

Newly Industrialised Economies – Korea, Taiwan Massive Investment in Science and Technology Transformed Agricultural to Industrial Economy 1980s – Model for many developing countries How relevant is this model in the post-WTO world ?

Investment in S&T and Economic Growth Direct correlation – Industrialised developed countries

Creation of useful knowledge Research & Development efforts of scientists and firms Technological Learning, Spin-offs

Concept of Innovation Innovation – Science, Engineering and Marketing National Innovation Systems

Exploiting Technology for development

Development Paradigm for developing countries

Old Paradigm

New Paradigm

Low Labour CostAbundant Natural Resources

Knowledge + Labour + NR

Unsustainable

Dev.

Sustainable

Dev.

Patents Granted by NIPO, Sri Lanka

Data not readily available www.nipo.lk web site – no data on patents granted www.wipo.org – Sri Lankan patents included in

“Others” in WIPO trend analysis tables (Other net sources) Sri Lanka 35% of 180 (2005)

2006 WIPO data Bangladesh 9.9% of 162 India 32.3% of 4320 (2005) Thailand 10.5% of 1121 Singapore 5.9% of 7393

Patents granted by US Patent and Trade Mark Office to Asian country inventors

Malaysia 93 98 131(15) 173(11) 168

Singapore 485 377 469(125) 451(32) 450India 376 403 506(143) 578(33) 672

Thailand 28 25 42 25 40Pakistan 4 4 2 5 7

Bangladesh 0 0 0 1 0Source: USPTO – includes utility, design and reissue patents

2006, 2007 No. of utility patents in parenthesis. Country of 1st author

Sri Lanka 3 1 3 3 2

2004

2005

2006

2007

2008

Utility Patents granted by USPTO (2004-8)

Average no. of patents granted/year = 160,200 Of which Foreign patents 49%

– 21% Japan. – 6% Germany. – 4% each Taiwan, Korea, Switzerland. – 2% each UK, France, Canada

Mainly by Corporations: US 44%, Foreign 44%– IBM 3400– Samsung 2400 – Canon, Matsushita 2000 each – Hitachi, Toshiba, Sony 1450 each

Universities, Research Institutes:– University of California Regents 350– Industr. Techn. Res. Inst., Taiwan 220

Knowledge Economy: Sri Lanka and its neighbours ?

How competitive are we ?

Economic competitiveness:

Technological and scientific capabilities

World Economic Forum Ranking

Knowledge economy (World Bank) Knowledge Assessment Methodology (KAM)

World Economic Forum (WEF)

Technology and Innovation Indicators Innovation

IndexTechnology Readiness

index

India 27 57

Korea 8 16

Singapore 13 7

Malaysia 40 15

Thailand 43 39

Bangladesh 98 106Source :WEF 2005 and 2006 (Rank out of 117 countries)

Sri Lanka 69 85

World Economic Forum (WEF) Core Indicators Impacting Technological Readiness

Firm level tech

absorptn

Prevalence of tech

licensing

Utility Patents

India 19 7 56 36 27 34 Thailand 38 16 60 28 37 23

Bangladesh 76 83 81 105 99 62

Source :WEF 2005 and 2006 (Rank out of 117 countries)

Sri Lanka 77 80 74 83 77 62

University Industry Collabortn

Corporate R&D

FDI & Tech transf.

Knowledge Assessment Methodology (KAM)

KAM is the average of four of pillars of KE developed by the World Bank Institute (WBI):

(1) economic and institutional regime,

(2) educated and skilled population,

(3) national innovation system, and

(4) dynamic information infrastructure. KAM is designed to help countries assessing their

strengths and weaknesses in making transition to knowledge economy.

KAM – What is measured ?

Economic Incentive and Institutional Regime Incentives for efficient use of existing and new knowledge and the flourishing of entrepreneurship

Education and Training An educated and trained population can create, share, and use knowledge well

Innovation and Technological Adoption An efficient innovation system of firms, universities, research centres etc. can tap into global knowledge, adapt to local needs, and create new technology.

ICT Infrastructure Good ICT infrastructure facilitates communication, dissemination, and processing of information.

Knowledge Economy Index 2008 Rankings

KEI 2008 Rank 2008

India 3.12 100 105

Korea 7.68 31 28

Singapore 8.24 24 20

Malaysia 6.06 4 8 48Thailand 5.44 60 53

Bangladesh 1.49 128 133Source :WEF 2005 and 2006 (Rank out of 117 countries)

Sri Lanka 4.16 82 91

Rank 1996

KAM Spidergram-Sri Lanka, Thailand, India

Strengthening Sri Lanka’s National Innovation System

Human Resources in S & T % of 17-24 age in Universities

– Sri Lanka 4%, Pakistan 4, India 10, SE Asia 28-44%– Sri Lanka - Undergraduate age high, Admissions low. – Encourage private education in S & T ?– Quality of degree?

% GDP spent on Education – Far too low: – Sri Lanka 2.1, Pak 2.3, India 3.7, S. E Asia 4.2- 7.4%.– Pakistan programme-Increase investment by 1500%

Researchers in R & D per 1 m. population – Sri Lanka 208, Pak, India 120-160, Thai/Mal 350-500

Korea 2400, Singapore 7000

Strengthening Sri Lanka’s National Innovation SystemResearch and Development Gross Expenditure on R & D/GDP:

– Sri Lanka 0.14, Pak-India 0.6-0.9%,Thai 0.24, Mal 0.7, Singapore 2.2, Korea 2.6

Private Sector ERD/GDP (or Business ERD/GDP) – Sri Lanka 0.01, Pak 0.02, India 0.1, Thai 0.09 Malaysia

0.5, Singapore 1.3, Korea 2.0 Domestic production of technology not facilitated Low technology innovations, No defence research

– High Military expenditure, 4% of GDP Licensing of technology, FDI low (privatization)

– Political stability. Private sector not vibrant enough

Improving Patent Output

Research should lead to Quality Patents Even in US only a third licensed

– Even less commercialized, still less high royalties– US Government $ 37b on R & D $1.3b royalties (2002)

7700 patents, 4700 licensed, 450 start-ups Can low income economies afford this expense ?

Mere increase in GERD/GDP will not work Recruiting quality research/support staff

– Investment in Human Resource Development– All successful development processes emphasize

higher education– Increase spending on higher education in S&T– Democratise access of education

Same investment - Brazil15% Korea 60% coverage

Improving Patent Output

Jobs for graduates in productive/research sector Provide incentives to firms providing such work

– Mobilize governments’ S & T demands (technological public procurements) from local firms

– Innovations- encourage Univ.-Industry interaction Focus on the renewal of traditional industries by

infusing new technology

The alternative is continuous brain drain Young people will go where there is demand

– We can’t afford not to train to highest possible level– We also can’t afford to lose them afterwards.– Retaining people is more strategic and probably

more difficult than training them.

Improving Patent Output

Initiatives to promote technological learning Technological licensing with involvement in R & D Inputs from technology savvy expatriates Foreign Direct Investment

– May improve if political situation stabilises

Increase investment in R & D – GERD/GDP Funding may become available with end of war

PERD/GDP more important than GERD/GDP Private sector research more likely to generate

patents Provide incentives for private sector research

Are we assured of success ?

Many pitfalls on the path to development More difficult in a post-WTO TRIPS World

Too much emphasis on Patents/IPR Many myths regarding patents promoted by

politicians, policymakers and management gurus– Developing countries with a little effort can exploit

IPR for their benefit– Research, whatever the budget would lead to patents– All patents from good research will generate income– Local firms are eager to invest in locally produced

technology Even some scientists believe in these myths

R & D is a hard slog. We need luck as well !