WIPO Colloquia on Selected Patent Issues Patents and Transfer of Technology Geneva, 6 November 2007 Sisule F. Musungu Senior Samuelson Fellow, Information Society Project (ISP); Associate Research Scholar, Yale Law School

Presentation Outline Determinant of international technology transfer and the role of patents Analysing the relationship between patents technology transfer. Different entry points Patents and technology transfer in the 21 st Century: Some issues to consider Conclusion 2

Determinants of international technology transfer and the role of patents International transfer of technology essentially means the movement of technological knowledge and information across international borders and its effective diffusion into recipient countries. It is obvious that many factors and policies affect this activity with patents and patent policy being just one of those. Other factors that may affect technology transfer include market size, investment policies and laws, infrastructure, general innovation policies etc. The first point of analysis in discussions on patents and technology transfer is therefore to consider the importance of patent policies and legislation vis-a-vis the other factors. The importance of patents is likely to vary depending on the nature of the technology, the sector involved and even from country to country. 3

Analysing the relationship between patents technology transfer: Different entry points The effect of patents on international technology transfer can be analysed in various ways. For example, one can analyse: ▫ The effect of patenting on different formal and informal channels of technology transfer (licensing, foreign direct investment-FDI, joint ventures, trade in goods, temporary migration of personnel or other forms) including how the strength patents affect the efficiency of each channel ▫ Patenting (including strength of patents) as a determinant of firms’ choice of method of transfer especially between licensing and FDI. See e.g., Maskus, Saggi and Puttitanun: 2004 ▫ The effect of patenting on the ability of local firms and enterprises to technologically learn or on the general diffusion e.g., what is the effect of patenting on imitation Consequently, the analysis of patents and technology transfer needs to be highly nuanced and the results of different facets be properly disclaimed. 4

Patents and technology transfer in the 21 st Century: Some issues to consider The rates of patenting vis-a-vis innovations produced by firms and industry differences. For example, Arundel and Kabla (1998) show that the propensity of patenting, i.e. the percentage of innovations for which patent applications are made in Europe varied between 8.1% in the textile industry to 79.2% in pharmaceutical industry. There are also differences between product innovations and process innovations. The implications of the growing movement towards open innovation for technology transfer mechanisms and policies. See e.g., The Economist’s Special Report on Innovation (Print edition 13 th - 19 th October 2007). If open innovation is transforming entire industries and having an impact on the efficacy of ideas such as industry clusters, as the Economist report suggests, what does it mean for technology transfer? A movement towards open innovation may reduce the importance of patenting for appropriation or may significantly change their role in technology transactions. 5

Patents and technology transfer in the 21 st Century: Some issues to consider The relevance of existing legal and institutional frameworks to address the relationship between patents and technology transfer. How suitable are the mandates of various key institutions such as WIPO (UN WIPO Agreement mandate and WIPO Development Agenda mandate) in facilitating technology transfer in the context of the changing dynamics in innovation and country patenting profiles? See WIPO Patent Report 2007 Disruptive and/or new technologies and transfer of technology. How have disruptive and/or new technologies and innovations such as the internet or mobile telephones in Africa impacted on technology transfer? What evidence exists and how should this impact our thinking on the subject of patents and transfer of technology? Increasing or renewed interest in new or alternative incentive mechanisms. There has been a noticeable increase in the use of prizes or interest in their use including surfacing legislative proposals and there are important policy discussions (e.g.. WHO discussions on public health, innovation and IP). How should technology transfer be tackled in these process and discussions? 6

Conclusion The relationship between patents and technology transfer is obviously a complex one and there are different entry points in undertaking analysis of this relationship. The relationship is also evolving. In light of some of the issues raised for consideration in this presentation there are two key questions that need to be considered going forward:  Whether we have the appropriate conceptual framework to analyse and understand the relationship between patents and technology transfer in the 21 st Century; and  whether we have the proper international legal and institutional framework to effectively deal with patents as they affect technology transfer in this new age. 7