Rising Middle-IP Powers dissolving the North/South polarisation in the international IP system

by Ruth Knoblich and Dr. Tobias Schonwetter

Screen Shot 2018-04-09 at 11.02.01Screen Shot 2017-05-03 at 01.48.01 AMAcademia and the public have long been focusing on the North/South power asymmetries in the international IP regime. Two decades after the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) came into effect at the beginning of 1995, it is now becoming obvious, however, that rising economies such as Brazil, India, China and South Africa emerge as a cross-cutting group of players that may help, going forward, to dissolve the North/South polarisation in the international IP order. Firstly, these countries make full use of the existing international IP system: They design their national IP law in compliance with the TRIPS minimum standards for protection, while counterbalancing these standards by strategically utilising (and testing the boundaries of) the TRIPS flexibilities available to them. Secondly, emerging economies have also begun to successfully influence the international system of IP law and policy-making itself to better reflect their interests and needs.

The rise of these ‘middle-IP powers‘ is a major opportunity for developing and enhancing the international IP system. Those countries can help recalibrate the balance between IP rights and their access-oriented limitations, or, put differently, between the private and the public interest. Furthermore, they contribute innovation types and protection contexts that are very different to those underpinning the existing international IP system, but shared by the majority of countries in the global South. Rising middle-IP powers can thus function as creators of a future international IP system that strongly re-emphasises the preservation of a global public commons and social development in line with the global Sustainable Development Goals (SDGs), and supports more individualised development patterns and innovation strategies by embracing a broader range of knowledge forms and flexible instruments for their protection.

This article is the first in a series on rising middle-IP powers, particularly focusing on South Africa as a BRICS member country and a political and economic heavy weight on the African continent. It sheds light on the interests and mechanisms in protecting IP, mirrors current debates on IP reform, and traces the growing influence of these new actors in the realm of international IP law and policy making. The series directly links to the UCT IP Unit’s work on the creation of more balanced IP frameworks in Africa and beyond, sharing the conviction that rising middle-IP powers such as South Africa have a key role when it comes to defining and addressing IP challenges for development.

The deep roots of the IP divide

It is widely acknowledged that the protection of IP contributes to innovation and technological progress in developed economies. Yet, the interrelation of IP, innovation and technology in later-developing countries is much more complex and remains a poorly understood puzzle. Yet, a Western development paradigm of strong IP protection serving development was pushed forward over decades, and got finally institutionalised in the WTO’s TRIPS Agreement. TRIPS further increased the scope of international IP protection and expanded it globally as all WTO member states were forced to implement TRIPS’ international minimum standards of IP protection. This basically happened on request of technology-exporting nations and regions such as the US, Europe and Japan, whose companies sought to expand their sales markets globally and to outsource their production bases. For developing countries, TRIPS offered the prospect of increased technology transfer and foreign investment, but entailed restrictions on accessing and usage of new technological knowledge. And these restrictions quickly became a real burden, particularly in those industrial fields that had previously been strategically kept free of any such restrictions due to the need to adopt and imitate foreign technology in these fields – traditionally, a common catching-up strategy of technological learners and later-developing countries.

The post-TRIPS period has been marked by an ever-increasing polarisation between proponents and opponents of strong IP rights, referred to as the ‘IP divide’. Proponents of a development-oriented IP agenda support the limitation of IP rights and propose to keep TRIPS flexibilities open; advocates of strong IP protection, on the other hand, are trying to push upwards the international protection of IP beyond of the minimum standards that TRIPS prescribes or where the TRIPS Agreement keeps gaps open. Such TRIPS plus efforts, typically advanced in bilateral agreements or in plurilateral so-called “Country Club Agreements” such as the seemingly failed ACTA Agreement, are justifiably criticised not only for putting inappropriate pressure on developing countries, but also to fray out the multilateral IP bargaining arena, thus making international integration processes more complicated and hampering international trade.

It is unlikely that the IP divide and the incompatibility of the two opposing approaches can easily be overcome since a strong antagonism is being deeply rooted in the mindset around the concept of IP: It is a mindset that strictly divides innovators from imitators, or the private from the public interest. In a way, it is right to figure these issues as basic parameters that are in tension with each other. On the other hand, they are not necessarily opposites: Innovators, for instance, typically imitate as part of their innovative processes, and private citizens are part of the public and should therefore also be interested in the public interest. Anyway, if the IP protection system should function globally, thus across markets, and promote sustainable development, it needs to be balanced: guaranteeing adequate protection rights on the one hand but also sufficient flexibilities that enable catch-up development on different socio-economic levels on the other hand.

Challenges of the international IP system and the need of reforms

Experts are warning that the balance between private and the public interest is shifting globally in favour of the private interest. This makes it increasingly challenging to link the protection of IP not only with economic, but also with social development. At the same time, the international community is forced with new urgency to find solutions when IP protection conflicts with Human Rights and the preservation of global common goods such as public health, biodiversity, food security and climate stability. Furthermore, experts point to the so-called ‘Global Patent Warming’ — the drastic increase of patent applications and private-law-based knowledge — that is beginning to undermine IP’s original intention and starts inhibiting innovative activities. There are thus multiple calls for a reform of the system. While many argue that it makes still sense to further harmonize the conditions and procedures for securing IP internationally, there is certainly the need for far-reaching compromise solutions that put more emphasis on openness and flexibility, and a re-adjustment between private and public interest.

Rising middle-IP powers as mediators between former ‘North’ and ‘South’

If any consent in the light of the IP divide is a difficult undertaking, the increasing fragmentation of actors and interests in recent years seems to make this task all the more complex at first sight. Looking at it differently, though, it is a big opportunity that emerging economies are becoming new players or rising middle powers in the international IP regime: Huge investments in R&D, growing innovation capabilities and a strong dependency on cutting-edge technology and knowledge from foreign countries make them share some interests with developed countries on the one hand. On the other hand, there is a set of conditions they share with other developing countries in the global South. Despite rapid economic growth and technological development, social inequality and poverty rates remain high, and despite an overall advanced level of innovation capabilities, the innovation landscape is highly heterogeneous. Furthermore, similar to the majority of countries in the global South, emerging economies bring in specific forms of knowledge and types of innovation – e.g. traditional knowledge, forms of collaborative innovation and informal sector innovation – that are different to what is catered by the existing international IP system.

It appears, therefore, that rising middle-IP powers such as South Africa are key for defining IP challenges for development and for creating more balanced IP frameworks in countries from the global South. But they are also playing an important role for mediating between the traditional ‘North’ and ‘South’, for bridging the IP divide between the developed and developing world, if not even for dissolving these categories.

The next article of this series will take a closer look at middle-IP powers, and address the challenges of IP policy making in these countries as well as different channels of influencing the international IP system.