Literature on Intellectual Property Rights as a Barrier to Technology Transfer and Innovation
Source
Article: ARE IPR A BARRIER TO THE TRANSFER OF CLIMATE CHANGE TECHNOLOGY ? BY COPENHAGEN ECONOMICS A/S AND THE IPR COMPANY APS. 19 JANUARY 2009
URL = http://trade.ec.europa.eu/doclib/docs/2009/february/tradoc_142371.pdf
Excerpt
"There are various schools of thought on this subject in the literature, including studies adopting a comprehensive approach to technologies and modes of transfer, as well as those examining selected cases more closely, can be found to provide evidence for IPR functioning either as a barrier and a facilitator.
One strain of literature, represented by ICTSD (2008) and Khor (2008), examines the issue of IPR protection from a wider perspective, exploring for example different modes of technology transfer, different kinds of climate change technologies, and provisions in the TRIPS agreement. Another strain of literature, represented by e.g. Branstetter et al. (2005) investigates the role of IPR protection in concrete cases of technology transfer, at particular points in time and places, particular firms, and involving particular technologies.
ICTSD (2008) concludes that “IP is potentially both an incentive and an obstacle to the transfer of technology”. On the one hand, a certain amount of IPR protection is necessary to sustain innovation to deliver climate change technologies, but on the other hand too much protection can hamper transfer due to high costs. Khor (2008) acknowledges that there is already a range of climate change technologies in the public domain where IPR protection is not even relevant. And for those technologies covered by IPR, patents do not automatically constitute barriers to transfer, because the presence of cost-effective substitutes, high degree of competition among patent holders or low prices may work against the potential for IPR to become a barrier. Moreover, even in those cases where IPR does in the end increase the cost to the level where it becomes a barrier – or in cases where patents are used for a complete denial of access4 – the TRIPS agreement offers certain mechanisms to overcome these obstacles. Finally, Maskus et al. (2004) point to the importance of potential barriers created by non-IPR issues, such as lack of institutional capacity to absorb technologies, preferences of local suppliers or infrastructure deficiencies.
Another strain of literature looks more selectively into concrete examples of technology transfer, under specific circumstances. Branstetter et al. (2005) have examined technology transfer within US multinational corporations. They find that IPR reforms that strengthen protection in a set of emerging economies facilitate technology transfer. This is illustrated by an increase in royalty revenues from licensing following the implementation of the reform. Barton (2007) has examined the extent to which four renewable energy generation technologies are encompassed by IPR. He found that despite the presence of IPR protection for these technologies, the holders of patents could not demand higher prices for their products because of international competition and availability of substitute products. Smith (1999) has found that weak patent rights enforcement prevents the transfer of US technologies to destination countries where there is a high risk of imitation. When IPR protection improves in the destinations where the risk of imitation is high, technology transfers increase. Yi Quian (2007) has examined the effect of IPR reforms on the levels of innovation in the pharmaceutical industry in 85 countries over 20 years. He finds that patent law reforms have a mildly positive effect on domestic innovation although the effect is not immediate. Furthermore, there exists an optimal level of patent protection, beyondwhich the effect on domestic innovation is negative." (http://trade.ec.europa.eu/doclib/docs/2009/february/tradoc_142371.pdf)