One of the interesting features of the compulsory licensing regime under TRIPS Agreement is that no limitation of the purposes for which compulsory licensing can be granted. This can be treated as a gain for developing countries since the US wanted to restrict the grounds for compulsory licences ⁴³. Further, states are also free to determine what constitutes a national emergency.

The TRIPS Agreement and Developing Countries

As discussed earlier, it is generally agreed that the TRIPS Agreement constituted a successful outcome for corporate actors and for developed countries. However, this does not necessarily imply that there are no benefits for developing countries to be derived from the implementation of the TRIPS Agreement. The TRIPS Agreement states that there are different economic benefits that can be expected from the introduction of stronger IPR standards. First, the TRIPS Agreement postulates that multi-national corporations, which have intellectual property portfolios, should increase foreign direct investment once they realise that their intellectual property assets are more secure. Secondly, a more secure legal framework should lead to increased levels of transfers of technology, know-how and expertise, thereby contributing to local economic growth. Thirdly, higher levels of protection should stimulate local innovation in relevant fields. And, finally, the TRIPS compliance should reduce the threat of bilateral sanctions, in particular from the US.

Pro tempore , it is difficult to provide an empirical assessment of the impact of the TRIPS Agreement on economic development because developing countries started implementing the rules laid down in the TRIPS Agreement since 2002 only. However, several points can be mentioned. First, there does not seem to have been a correlation between the level of intellectual property protection and flows of foreign direct investment (Matthews 2004). Secondly, intellectual property protection can only lead to useful transfers of technology, if the basic economic infrastructure of developing countries is ready to receive such technology. This may be the case in bigger countries like the US and the European landscape but is not the case in developing countries. Thirdly, the contribution of higher protection for intellectual property assets can only foster local innovation of the type that would benefit from patents, if there is sufficient infrastructure.

Notes and References

⁴³Ibid. : 320.