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close this bookBiotechnology and the Future of World Agriculture (GRAIN, 1991)
close this folderControlling the profit
View the document(introduction...)
View the documentAn historical appraisal
View the documentThe great reversal
View the documentTightening the grip: the push for patents on life
View the documentBox: Twelve Reasons to say no to life patents
View the documentThe implications

An historical appraisal

If the only question then is to be fair, why this 180 degree shift in position within the same company over one century? The answer to this question is complex and can be answered only in its historical context. A hundred years ago, those in favour of free trade battled against those who pleaded for the granting of patent monopolies. Today, the lobby for stronger patent protection worldwide is aggressively waving the banner of free trade and bemoans the lack of intellectual property systems as a non-tariff barrier.

What is clear if one looks at the history of the patent debate is that the assumption that patent protection stimulates innovation is not as sound as today's promoters of the patent system would have us believe. The very reason for opposing strong patent protection a century ago by many Europeans and today by most Third World countries, lies in the conviction that the patent system does, in fact, exactly the opposite: blocking innovation and creating dependence. The crux underlying the different positions is whether you import or export technology. A hundred years ago, many European countries were technology importers, the NICs (Newly Industrializing Countries) of the late 19th century. Their nationally oriented industries vehemently opposed the idea of having to pay royalties for the products and processes they were using. The quotes from Geigy and friends at the beginning of this chapter speak for themselves.

The Third World NICs of today find themselves in a similar position. Of the 3.5 million patents in existence worldwide in the 1970s, only about 200,000 were granted by developing countries. The vast majority of these, some 84%, were owned by foreigners, especially by TNCs from the five richest countries. (4) Graph 7.1 looks at the situation in Asia and Latin America and confirms this biased functioning of the patent system, at least for developing countries. Most significant is that less than five per cent of these foreign-owned patents were actually used in production processes in the developing countries. (5) In a recent report ( 1988), the Inter-American Development Bank pointed out with concern that most foreign-owned patents in Latin American countries are never used there, but rather function to secure, protect or monopolize import flows. (6) A decade earlier, two United Nations Agencies - the World Intellectual Property Organization (WIPO) and the UN Conference on Trade and Development (UNCTAD) - had reached the same conclusion. In a joint study they affirmed:

Instead of being used in production, an overwhelming majority of patents granted to foreigners through national laws of developing countries have been used to secure import monopolies. (7)

Third world patents - Most patents granted to non-residents

In the 1960s it gradually became clear that prevailing intellectual property systems, rather than stimulating transfer of technology, were really functioning to transfer income from technology importers to exporters. The Third World started to react, and after a decade of negotiations in UNCTAD, strong and precise recommendations to revise the global intellectual property system resulted. Developing and developed countries agreed that such a revision should meet the special needs of the Third World in order to 'become more satisfactory instruments for aiding developing countries in the transfer end development of technology.' (8) Meanwhile, developing countries began to change their national laws, excluding certain products from patent protection, strengthening provisions for compulsory licensing, and limiting the duration of patents. (9) In 1975, WIPO member states began negotiating the revision at the Paris Convention which governs patent law at the international level.