| Cover Story: LESSEN OBSESSION WITH WTO AND TRIPS |
Realign IPR focus locally, says Dr Martin
If a country like India with all its financial resources cannot defend its own basmati rice from being patented by a US company in 2000, then how can one expect countries in the Pacific to defend their innovation, asks Dr David Martin, founding CEO of US-based M-Cam Inc.
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Dr David Martin... IPR created to be a financial vehicle.
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The point he was trying to make, as he spoke to ISLANDS BUSINESS, was that there was a misconception in the Pacific region that if all legal systems and right ministers were in place to ensure a healthy, workable Intellectual Property Rights regime, the economy would flourish.
Countries like India and Denmark, he continued, were finding out just how much that belief was costing them. And the Pacific, instead of blindly adopting international trade rules dished out through mechanisms like the WTO’s Trade Related Aspects of Intellectual Property Rights (TRIPs) and the UN’s WIPO (World Intellectual Property Organisation), might want to change its approach to the issue of Intellectual Property Rights (IPR).
“Denmark has come to the conclusion that IPR has actually been detrimental to their economy,” said Martin.
“Because it turns out that if you want to enforce IPR, you have to have a lot of money to take people to court and to go to international proceedings.
“Most SMEs and even large companies in Denmark don’t have the resources to defend IPR. So having an IPR system and no means to defend it in the international court is worthless.
“So there is a growing awareness in other parts of the world that WTO and TRIPs promotion has been at least misleading and in some cases outright false.”
Martin was the principal resource person at the “Regional Workshop on Intellectual Properties (IP) and Traditional Knowledge (TK) as Economic Development Tools for Small and Medium Enterprises (SMEs)”, held in July in Fiji.
His company, M-Cam Inc., is described as “the international leader in intellectual property-based financial risk management” and is involved in a range of work including auditing patent quality for governments and patent offices and providing state-of-the-art actuarial risk management systems and solutions to the largest banks and insurance solutions.
Martin’s formula for the Pacific region is simple. Lessen the obsession with WTO and its TRIPS—which were designed to protect the rights of multinational companies—and realign the focus locally.
“We need to establish a system that links domestic innovation with domestic consumption regionally. So if you’re talking about the Pacific Islands Forum nations, then they need to create a system that first says: ‘How do we protect our innovation? How do we align capital, financing to that effort? And then: ‘how do we take that effort to scale the rest of the world?’ But you need to start locally. Start with a regional strategy, move up to a regional financial enabler and then go global, instead of taking a global system and trying to make it fit. Because the global system trying to fit into the Pacific islands has a lot of startling assumptions that are not right.”
When starting locally, policymakers need to realise that IPR is not so much a legal issue but something that was “fundamentally created to be a financial vehicle.”
“What IPR was meant to do—for example for the print makers of Samoa, or the people with traditional healing remedies in Papua New Guinea or maybe those with agricultural processes in Fiji was to provide a way for three things. One: for those people to get recognition for what they do; Two: to invite them to share it with someone else, and; Three: to have a means to control the value associated with whatever it is they are doing, whatever the business or opportunity is,” Martin explained.
At a very basic level, IPRs are exclusive rights granted by governments to individuals and businesses to protect creations of the mind; such as copyright to protect written works like songs and stories, patent to protect new inventions to further their creative development, and trademark to identify and protect a business’ or individual’s products and services.
These, said Martin, are tools that a business or individual can use to go to the bank and get finance.
“IPR has been legally used as a collateral in banking ever since the 1800s,” said Martin. “Now, very few countries in the world have any system at all in any of their banking programmes that actually allows a person with creativity to use that IPR as a collateral for a loan in the bank. What that means is that creative people have to go through much more expensive form of capital which makes their business much more difficult to run and many times lead to business failure, especially SMEs.
“So what is needed is for local and regional banking systems to establish a system that allows intangible property, traditional or otherwise, to actually serve as a collateral against the loan.”
Once that is established, governments then play a major role in supporting the development of local innovation.
“Governments are one of the largest consumers in any country so the idea here is a government can support the consumption of domestic innovation. For example in Samoa, the government wears shirts that are made locally,” said Martin, who had helped the Samoan government with the review of its national IPR issues in relation to Traditional Knowledge and SME development.
“It’s a small but wonderful example of saying: ‘yes, the government will support local innovation. And not only will it buy the goods, it will even pay a bit more for it.’ You probably can get cheaper fabric from China but if you’re serious about IPR, you should actually reward local production of creative products and services, even pay a premium for it, rather than looking outside for whatever is cheap, fast and efficient. Because sometimes, that’s not in the national interest.”
Such a realignment of focus, he added, would be needed if Pacific islands wish to squeeze benefits out of Intellectual Property Rights.
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