June 13, 2024

Intellectual property: A potential game-changer for least developed countries

Intellectual property rights are not distant, lofty ideals, but tangible tools in the hands of the world’s most vulnerable economies striving for development and progress.

In a global economy increasingly driven by innovation and knowledge, intellectual property (IP) can propel sustainable development and economic transformation in the world’s 45 least developed countries (LDCs).

IP rights, including patents, trademarks and copyrights, protect the myriad creations of the mind – from inventions and designs to literary and artistic works.

A new report by UNCTAD and the Commonwealth sheds light on a range of tools and options to help LDCs create an enabling environment for IP rights and use them strategically to unlock innovation, boost trade, attract investment and promote technological upgrading.

“The essence of our journey is not merely about adopting IP rights, but about revolutionizing the way we perceive and utilize them,” UNCTAD Secretary-General Rebeca Grynspan said on 29 January at an event to launch the report, joined by the heads of the Commonwealth and the UN’s World Intellectual Property Organization (WIPO).

“Not all IP policies will work in all LDCs. But all LDCs can implement successful IP policies,” Ms. Grynspan added.

Empowering LDCs: IP in action

In Cambodia, for example, premium pepper originating from the nation’s southern province of Kampot – registered as a geographic indication – helped farmers more than tripled their income since 2010.

This status establishes IP rights for products whose quality and reputation are specifically linked to their places of origin.

In Ethiopia, trademarking has contributed to a 275% increase in coffee exports since the early 2000s.

“Innovation — supported by appropriately targeted IP protection — can be a powerful catalyst and enabler for strengthening the productive capacities of LDCs and diversifying their economies and exports,” said Commonwealth Secretary-General Patricia Scotland.

‘A fraction’ of the global IP pool

Although IP protection filings generally have increased in LDCs in recent years, they account for only a fraction of the global pool.

The report notes that applications for trademarks, the most widely tapped IP rights in LDCs, averaged 2,197 annually between 2017 and 2021, far below the global average of 26,034 and that of other developing countries (24,789).

Annual applications for patents and utility models – both to protect inventors’ rights – in LDCs were just 55 and 24, respectively.

LDCs, often are at the bottom of the Global Innovation Index rankings, also have the lowest level of productive capacities and readiness to harness frontier technology. Shoring up capacity building and international cooperation will remain crucial going forward.

“It’s important that when we do technology transfer, we help local stakeholders have the right skill set to absorb and deploy the technology on the ground,” said WIPO Director General Daren Tang.

“If not, what happens is that the technology is there, but it’s not making a difference to the lives of people to whom it needs to make a difference.”

Need for stronger national IP systems

To stimulate innovation, the report says LDCs need a balanced approach to strengthening their domestic IP ecosystems.

Besides bolstering their productive capacities, this requires reforming their national IP systems, mainstreaming IP protections at the national level as part of a holistic approach to development, and improving their institutional capacity for IP administration, enforcement and regulation.

These efforts will help better leverage IP rights and existing flexibilities available to them through the World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights, which 35 LDCs have ratified.

Alternative IP protection in the informal economy

Earlier UNCTAD research shows that besides the standard market-based economy, LDCs have a significant share of innovation taking place in the informal sector, which accounts for at least 35% of their GDP.

This underscores the need to for some LDCs to complement formal IP rights with more flexible, informal legal protection mechanisms, often embedded in the normal working practices of firms.

These can help protect smaller businesses against both internal risks from staff turnover and external risks such as unfair exploitation of new ideas by other firms.

Exiting LDC status: Implications for innovation policies

Since leaving the LDC category entails losing eligibility to certain preferential treatment, graduation can bring additional challenges when trying to craft appropriate IP systems and regimes, at least within the formal economy. (More on LDC graduation)

The report says there is therefore a strong case for considering national capacities for production, science, technology and innovation when assessing LDCs’ readiness to change status.

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