Emerging Markets and the World Patent Order : The Forces of Change

The implementation of patent law in the emerging market countries is having an impact on the international patent system. First, it is apparent that the principal emerging market economies are not strictly adhering to the patent regimen of the USA, Europe and Japan, but are instead adapting patent law to their own unique environments. This is more a story of adaptive management of existing standards than it is an innovation of new standards and models. Much of this adaptation of patent standards has been concentrated in the public health sector. Second, to the extent that these emerging economies want to maintain the operating space within which to chart their own paths, they are unlikely to sign on to a strong global patent harmonization exercise. Third, the emerging economies have placed some priority on addressing social welfare within the context of the patent regime, such as by using compulsory licensing to provide access to medicines. Perhaps the most interesting trend among the emerging markets is the building up of local technology-dependent industries through use of preferential procurement policies and other industrial policy mechanisms. While the domestic and international patent system may play a role in the shape of industrial development, it seems that the emerging markets have concluded that a patent system “does not a high-growth economy make”. This does not truly represent a break from the industrial policy implemented by the USA, EU and Japan. The governments of each of these countries have used their vast resources to incentivize local R&D and production. For the USA, much of this has been done in the context of expenditures by the Department of Defense, and more recently by the Department of Energy. For Europe, Airbus Consortium R&D and local production was heavily supported by government subsidy. The Japanese government has invested heavily in its computer industries. For countries that are pursuing an integrated industrial policy that focuses on the result, rather than the particular means used to accomplish the objective, patents are likely to remain a part of the industrial policy mix. This chapter does not suggest that emerging markets have discovered an alternative to patents. Rather, and not surprisingly, they appear to have concluded, despite simplistic arguments about patents and innovation, that they cannot simply rely on the patent system to build up a sound technological base and a competitive economy. Patents are a tool to be modified and used as the specific task requires. As the task changes, so may the terms of patenting