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Published online by Cambridge University Press: 28 July 2009
The patent system has been claimed to be one of the ways of facilitating the transfer of technology from the industrialised North to the less developed countries of the South. It is by no means the only way in which this can be done. For one thing, not all technology is patented. Also, quite often before a patented process can be successfully worked there is need for the transfer of unpatented know-how along with the technology covered by the patent. Besides, it is not the patent itself which enables the transfer of the technology; rather, by making the title and exclusive rights of the patentee secure, it emboldens him to transfer his technology to others for commercial exploitation. Nevertheless, the patent is an important factor in the technology transfer process. As one United Nations report has put it:
1 See the expatiation on this point in E. Penrose, “International patenting and the lessdeveloped countries”, (1973) 83 The Economic Journal 768, at 771, where she says:
“The strongest argument supporting the proposition that foreign patenting helps to transfer technology, thus assisting economic development is essentially as follows: much of the technology required for industrial development is patented and the patents are owned by business corporations in the industrial countries. The disclosure of the technology which is contained in the patent grant and is public knowledge is rarely sufficient to permit its full application without the know-how and the technical help of the patentees. Business firms will not give this know-how and this help in conditions which might rob them of the protection their patents provide and in circumstances where it would be difficult to prove ownership and where consequently anyone could use the technology made available; moreoverc, “embodied technology”, that is, patented machinery, is often obtainable only from firms holding the patents, who may refuse to sell in the absence of patent protection. Thus, the patent becomes a necessary, though naturally not a sufficient, condition for the transfer of technology.”
However, this argument is rejected by some authors who argue that patents, far from facilitating the transfer of technology, restrict such transfer: see, e.g. Grundmann, “The economic arguments for patents and their validity for developing countries”, (1970) 18 The Indian Economic Journal 193.
2 See The Role of the Patent System in the Transfer of Technology to Developing Countries, United Nations, New York, 1975. United Nation Sales No. E 75. 11.D.6.Google Scholar
3 Although this legislation was originally a Decree, it is now an Act, pursuant to the Adaptation of Laws (Redesignation of Decrees, etc.) Order, 1980.
4 Geneva, 1978.
5 See pp. 87–8.
6 See s. 7(1) of the Act.
7 For a simplified explanation of how and why such higher profits can be made, see , Cornish, Intellectual Property: Patents, Copyright, Trade Marks and Allied Rights, London, 1981, 19ff.Google Scholar
8 See s. 6 of the ESARIPO Model Law on Patents, op. cit.
9 The British Patent System: Report of the Committee to Examine the Patent System and Patent Law, Chairman, MAL Banks, Cmnd. 4407, 1.
10 Ibid. 2.
11 See s. 6(1)(a). Cf. s. 32 of the ESARIPO Model Law, and s. 135(2) of the WIPO Model Law for Developing Countries on Inventions, World Intellectual Property Organisation, Geneva, 1979.
12 Italics mine.
13 See V. Vaitsos, “Patents revisited: their function in developing countries”, (1972) The Journal of Development Studies, 71–97.
14 Op. cit., p. 80, n. 2, above.
15 Para. 286.
16 Art. 5A(2).
17 Art. 5A(4).
18 See s. 1 of Sched. 1.
19 S. 4 of Sched. 1.
20 See now s. 48 of the Patents Act, 1977.
21 See WIPO Document AB/V/13, paras. 106 and 137.
22 See Basic Proposals for the Diplomatic Conference on the Revision of the Paris Convention, Geneva, 4 February to 4 March, 1980, WIPO Document PR/DC/3, 7. Italics mine.
23 Two years is the proposal of the developing countries.
24 Three years is the proposal of Group B countries (i.e. developed market economies).
25 Proposal of the developing countries.
26 Proposal by the developed market economy countries.
27 Information on this given by an official of the WIPO. However, the Conference requested the Assembly of the International Union for the Protection of Industrial Property to take the necessary measures for the continuation of the Conference at the earliest possible date. The chairman of the Committee which considered Art. 5A was of the view that useful progress had been made in the negotiations and was hopeful of a favourable outcome eventually. See WIPO Document PR/DC/INF/21.
28 See Art.5A(3).
29 Cf. Basic Proposals (op. cit., p. 85, n. 22, above, 59).
30 However, it must be pointed out that the Nigerian Act does give the Minister (Commissioner) power to abridge the period which should expire before a compulsory licence can be granted. S. 13 of the First Schedule provides: “The Commissioner by order in the Federal Gazette may provide that for certain patented products and processes (or for certain categories thereof) declared by the order to be of vital importance for the defence or the economy of Nigeria or for public health compulsory licences may be granted before the expiration of the period mentioned in paragraph 1 above and may permit importation.”
31 See s. 15 of the First Schedule.
32 See s. 17 of the First Schedule.
33 See s. 23(3) of the Act.
34 Cf. WIPO Model Law for Developing Countries on Inventions, Vol. 11, W.I.P.O., Geneva, 1980, 37.
35 As regards examination as to substance, the provision is as follows:
“Section 305: Examination as to Substance:
(1) The Patent Office shall examine whether the contract contains terms which impose unjustified restrictions upon the transferee and whether, as a consequence, the contract, taken as a whole, is harmful to the economic interests of the country. In such examination, the Patent Office shall take into consideration, in particular, any term contained in the contract whose effect would be:
(i) to import technology from abroad when substantially similar or equivalent technology may be obtained on the same or more favourable conditions without any importation of the technology from abroad;
(ii) to oblige the transferee to give consideration which is disproportionate to the value of the technology to which the contract relates;
(iii) to oblige the transferee to acquire any material from the transferor or from sources designated or approved by the transferor, unless it is otherwise impossible, for all practical purposes, to ensure the quality of the products to be produced and provided that the said materials are supplied at a reasonable price;
(iv) to restrict the transferee's freedom to acquire any materials from any source, unless it is otherwise impossible for all practical purposes, to ensure the quality of the products to be produced;
(v) to restrict the transferee's freedom to use any materials which are not supplied by the transferor or by sources designated or approved by the transferor, unless it is otherwise impossible, for all practical purposes, to ensure the quality of the products to be produced;
(vi) to oblige the transferee to sell the products produced by him exclusively or principally to persons designated by the transferor;
(vii) to oblige the transferee to make available to the transferor, without appropriate consideration, any improvements made by the transferee with respect to the technology to which the contract relates;
(viii) to limit the quantity of the products produced by the transferee;
(ix) to restrict the transferee's freedom to export himself or his freedom to allow others to export the products produced by him, provided that if the transferor owns, in a country to which such a restriction applies, a patent which would be infringed in case of importation of the said products to such a country or if the transferor already supplies the market in such a country with the same products, such facts shall be taken into account;
(x) to oblige the transferee to employ persons designated by the transferor not needed for the efficient transfer of the technology to which the contract relates;
(xi) to impose restrictions on research or technological development carried out by the transferee;
(xii) to restrict the transferee's freedom to use any technology other than the technology to which the contract relates;
(xiii) to extend the coverage of the contract to technology not required to achieve the objective of the contract and to oblige the transferee to give consideration for such technology;
(xiv) to fix prices for the sale or resale of the products produced by the transferee;
(xv) to exempt the transferor from any liability resulting from any defect inherent in the technology to which the contract relates or unreasonably to restrict such liability;
(xvi) to restrict the transferee's freedom to use, after the expiration of his contractual obligations, the technology acquired as a result of the contract, subject, however, to any right of the transferor under a patent;
(xvii) to establish the duration of the contract for a period which is unreasonably long in relation to the economic function of the contract, provided that any period which does not exceed the duration of the patent to which the contract relates shall not be regarded as unreasonably long.
(2) Where the Patent Office is of the opinion that the contract contains one or more terms which impose unjustified restrictions upon the transferee and that, as a consequence, the contract, taken as a whole, is harmful to the economic interests of the country, it shall notify the applicants accordingly and invite them, several times if it deems it necessary, to modify the contract so that it does not contain any such term.”
36 See The Acquisition of Technology from Multinational Corporations by Developing Countries, United Nations, New York, 1974, 29.Google Scholar
37 See p. 81, n. 3, above.
38 See s. 4(d)of the Act.
39 See s. 6(2) of the Act.
40 See s. 7 of the Act.
41 See ss. 3 and 4 of the Patents and Designs Act, 1970.
42 See s. 4(2) of the Act.
43 S. 1 reads as follows:
“(1) Subject to this section, an invention is patentable—
(a) if it is new, results from inventive activity and is capable of industrial application, or
(b) if it constitutes an improvement upon a patented invention and also is new, results from inventive activity and is capable of industrial application.
(2) For the purposes of subsection (1) above—
(a) an invention is new if it does not form part of the state of the art;
(b) an invention results from inventive activity if it does not obviously follow from the state of the art, either as to the methods, the application, the combination of methods, or the product which it concerns, or as to the industrial result it produces, and
(c) an invention is capable of industrial application if it can be manufactured or used in any kind of industry, including agriculture.”
44 S. 3 (2) provides:
“The description referred to in subsection (1)(a)(ii) above shall disclose the relevant invention in a manner sufficiently clear and complete for the invention to be put into effect by a person skilled in the art or field of knowledge to which the invention relates; and the claim or claims referred to in subsection (1) (a) (iii) above shall define the protection sought and shall not go beyond the limits of the said description.”
45 See s. 40 of the Model Law and the comments on it: Model Law for English-Speaking African Countries on Patents, op. cit., 66ff.
46 Penrose, op. cit., p. 80, n. 1, at 773.
47 See Sanjaya Lall, “The patent system and the transfer of technology to less-developed countries”, (1976) 10 Journal of World Trade Law 1, at 8ff.
48 Ibid, at 9.