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Intellectual Property Rights and Biodiversity: The Economic Myths

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AUTHOR: The Gaia Foundation and Genetic Resources Action International (GRAIN)
TITLE: Intellectual Property Rights and Biodiversity: The Economic Myths
IN: Global Trade and Biodiversity in Conflict, Issue No. 3
DATE: October 1998
PLACE: London and Barcelona
AVAILABLE FROM: Hard copies from Gaia. Electronic copies from GRAIN.
Please see below for details.

New publication from Gaia and GRAIN


London/Barcelona, 30 October 1998 -- The Gaia Foundation and Genetic 
Resources Action International (GRAIN) have just published a new report, 
"Intellectual Property Rights and Biodiversity: The Economic Myths". This is 
the third briefing paper produced through their joint project on Global 
Trade and Biodiversity in Conflict.

"Intellectual Property Rights and Biodiversity: The Economic Myths" 
contrasts the costs and benefits of intellectual property rights (IPR) for 
the biodiversity-rich developing countries. From Hanoi to La Paz, 
governments have been lobbied to believe that strong intellectual property 
rights must be available in the South in order to attract foreign capital 
and foster the technology infrastructure necessary for poor countries to 
join the economic fast lane of globalisation. The WTO Agreement on 
Trade-Related Aspects of Intellectual Property Rights, or TRIPS, is designed 
to force countries precisely in that direction.

However, South countries have been hearing a one-sided promise of milk and 
honey. As the Gaia/GRAIN briefing puts it, there are three myths at work.

1. The technology transfer myth holds that transnational corporations will 
be more willing to transfer technology to the South if they enjoy strong IPR 
protection there. The facts belie this. Few TNCs control the bulk of the 
world's proprietary technologies, and most technology transfer going on 
today occurs in the form of mergers and acquisitions, not outward licensing. 
In this context, IPRs stimulate the creation of vaster TNC empires rather 
than improved access of the South to Northern technology.

2. The innovation myth says that strong IPRs are necessary as a prime 
incentive for technological innovation in the South, including of indigenous 
capacities. This is misleading. Much innovation occurs in absence of IPR, 
including most of the world's recent boom in biotechnology. Evidence shows 
that many other government policies profoundly influence research and 
development, such as R&D subisidies, tax credits and other fiscal measures. 
Standardised IPR regimes being imposed upon poor countries disregard the 
needs and dynamics of domestic innovative processes.

3. The investment myth is meant to convince the South that strong IPR will 
create a better climate for inflows of foreign direct investment (FDI). 
However, data show that there is no correlation between IPR and investment. 
The current growth of FDI flows to the South is mainly directed at a few 
East Asian countries. FDI flows are more responsive to short-term economic 

variables, such as exchange rates, than long term government policies, such 
as intellectual property.

Therefore, developing countries are urged to resist the ideological pressure 
to strengthen IPR since this pressure is geared to benefit TNCs over and 
above local biodiversity-based innovation systems. In particular, the TRIPS 
Agreement should be amended during the 1999 Review to exclude biodiversity 
from its jurisdiction.

Gaia and GRAIN
"Intellectual Property Rights and Biodiversity: The Economic Myths"
Global Trade and Biodiversity in Conflict, Issue No. 3 
London/Barcelona, October 1998, 16 pp.

Copies are available for free from the following sources:

Hard copy (air mail):
Gaia Foundation, 18 Well Walk, Hampstead, London NW3 1LD, UK. Tel: (44-171) 
435 50 00. Fax: (44-171) 431 05 51. Email: <>

Electronic copy (Internet or email):
You can download the report directly from GRAIN's webpage at If you do not have 
Internet access, you can request the report to be sent to you by email from 

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