Ron Marchant sparks debate on IP and emerging economies

Ron Marchant, the former CEO of the UK IP office, has warned that it is “unrealistic” to expect developing countries to immediately harmonise their IP systems with those of advanced economies.

Marchant was speaking on a panel at the World Trade Institute - Chinese University of Hong Kong summer programme in Hong Kong on Thursday.

The wide-ranging discussion covered a number of topics, such as how intellectual property relates to the development of emerging economies.

Ron Marchant

IP systems in the developed world have been evolving for the last 300 years, Marchant explained. “The system espoused by countries like the United States, Germany, and the United Kingdom “did not start at the TRIPs level, and it seems unreasonable and unrealistic to expect developing countries to compress this kind of change in 20 or 30 years.”

Marchant points out that the countries calling for the strongest IP protection went through phases where they used or imitated the IP of others. He points to the United States during the 1800s as an example, where it copied technologies developed by others during the Industrial Revolution. Similarly, Japan was often criticised in the period after World War II for stealing the IP of other countries.

“It is a step in development”, he argued.

Elliot Papageorgiou of Rouse echoed that view. He said that both the United States and Soviet Union took nuclear and rocket technology from Germany after World War II and built their own programmes with this intellectual property.

The role of IP in the development of emerging economies has long been a concern of Marchant’s. As the head of the UK Patent Office, he urged developed nations to work with developing nations toward balanced IP regulations.

“Unless we in the developed world take seriously the concerns of the developing world we won't have a global IP system", he warned in 2004.

Papageorgiou argued that the criticism of IP enforcement in countries such as China similarly lacks perspective. While China can still improve its IP system, he said it is important to remember that the IP system in China started about 30 years ago, and in light of that, China has made incredible progress.

Marchant agreed and compared China’s progress to Europe’s. “Over 30 years ago, Europe drafted an agreement for a unitary patent, and we still haven’t got that done yet”, he laughed.

Arno Hold of the World Trade Institute and moderator of the panel also raised the issue of when IP rights affect market forces and competition. One area that drew discussion were the recent parallel import cases, where manufacturers assert their IP rights to prevent unauthorised importers from selling genuine merchandise that were imported from another country.

“Should a German machine sold in the US be cheaper than in your country because there’s more competition there?” Papageorgiou asked. “And should the manufacturer be able to use trade mark law to prevent importers from selling the cheaper US version in your country?”

Marchant said that manufacturers sometimes used their trade mark rights in a manner that seemed antithetical to the main purposes of having a trade mark.

He told the audience of a discussion he had with a company that was complaining about parallel imports of its goods from another country. When he asked the company representative why he was upset by this, he admitted that the imports were of inferior quality to the goods designated for the UK market, even though the packaging and labelling were the same.

In that case, it seems that the labelling and the trade mark would actually be misleading consumers as to the quality of the product, Marchant said.

The main issue, the panellists argued, is how IP rights fit into the development of each country.

Marchant, who has been consulting with emerging economies on innovation policies, says the one question he always asks is: “How far does it make sense for developing countries to accept these systems?”