Utility Model Protection in Pakistan an Option for Incentivising Incremental Innovation
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Utility Model Protection in Pakistan An Option for Incentivising Incremental Innovation Dr. Henning Grosse Ruse–Khan Senior Research Fellow, Max Planck Institute for Intellectual Property and Competition Law in cooperation with Mr. Ahmad Mukhtar as the national expert This paper was commissioned by the World Intellectual Property Organization (WIPO) under the second European Union-Pakistan Trade Related Technical Assistance (TRTA-2) Program. The views expressed in this work are those of the author in his/her personal capacity and do not necessarily represent the positions or opinions of the Secretariat of the World Intellectual Property Organization, its Member States or the funding institution. page 2 OUTLINE 1. Introduction a. Tasks assigned i. Contextual Background ii. Principal Tasks b. Methodology 2. Overview of Legal and Economic Aspects of Utility Model Protection a. International Legal Framework i. The Paris Convention ii. The WTO TRIPS Agreement iii. Free Trade, Economic Partnership, and International Investment Agreements iv. Key Aspects of Policy Space for Designing Domestic Protection b. Legal Aspects of Utility Model Protection i. Common Elements amongst National Systems ii. Main Areas of Divergence c. Economic Aspects and Policy Considerations of Utility Model Protection i. Economic Rationale 1. Incentives for Minor and Incremental Innovation 2. Incentives for Small and Medium Sized Enterprises (SMEs) 3. Encouraging Local Innovation ii. Costs and Disadvantages 1. Legal Uncertainty and Wasteful Litigation 2. Blocking the Public Domain and Preventing Technological Learning by Imitation iii. Specific Considerations for Developing Countries 1. Domestic Innovation below the Patent Level 2. Degree of Copying and Imitation in Sub-Patentable Innovation 3. Alternative Protection Regimes 4. Domestic IP Infrastructure (IP Offices, Courts, Professionals) 3. Key Features of Utility Model Protection in Selected Jurisdictions and Relevant Country Experiences a. Developed Countries i. Germany 1. History of Utility Model Protection in Germany 2. Protection under the Current System 3. Checks and Balances 4. Empirical Data and Economic Impact ii. Australia 1. History of Second-tier Protection in Australia 2. Main Features of the Current Innovation Patent System 3. Empirical and Economic Analysis b. Developing Countries, especially in Asia i. China 1. The wider Economic and Innovation Context 2. History of Utility Model Protection in China 3. The Main Features of Utility Model Protection 4. Empirical and Economic Analysis ii. Malaysia 1. History of Innovation Patents in Malaysia page 3 2. Main Features of Innovation Patent Protection 3. Empirical Findings and Economic Impact 4. Reasons For and Against Introducing Utility Model Protection in Pakistan a. The relevant Economic Situation & Technological Developments in Pakistan i. Pakistan as an IP Importing / Exporting Country ii. Which domestic industries (especially SMEs) engage in small scale or incremental innovative activities? iii. Is copying or imitation an issue in these industrial sectors which functions as disincentive? iv. How can relevant industries benefit from a system of legal protection for small scale / incremental innovation? v. Further (external) factors affecting the Operation of a Utility Model System: SMEs familiarity with IP issues (IP culture), rule of law, good governance, other relevant facts on the ground) b. The Local IP Infrastructure i. The Pakistani IP Office ii. Courts Dealing with IP Cases iii. Professionals (Lawyers, Patent Attorneys) c. Reasons for Introducing a Utility Model System i. Any relevant incentives for minor and incremental innovation? ii. Any relevant incentives for SMEs? iii. Can local innovation be encouraged by utility model protection? d. Reasons Against a Utility Model System in Pakistan i. Is there a significant threat of legal uncertainty and wasteful litigation due to introducing utility model protection? ii. Is there a realistic danger of blocking the public domain and/or preventing ongoing technological learning by imitation? 5. Recommendations a. A tailored Utility Model System suited to the Needs of Pakistan i. The Rationale for Introducing Utility Model Protection ii. Registration versus Examination System iii. Scope of Utility Model Protection 1. The Essential Object of Protection: Invention or Form? 2. Exclusion of Products from certain Fields of Technology and/or Processes 3. Limiting Protection to Inventions embodied in Working Tools and other Three-Dimensional Models or Objects? 4. Conditions for Protection (Novelty, Inventive Step) iv. Exceptions and Limitations (including compulsory licensing & duration of protection) v. Checks and Balances in the Enforcement System vi. Embedding Utility Model Protection in the IP Infrastructure of Pakistan (role of IP office, courts, IP professionals; awareness raising campaigns towards potential beneficiaries) page 4 b. Alternatives to Utility Model Protection in the Pakistani Context i. Retaining the Status Quo ii. Lowering the Thresholds for Patent Protection iii. Trade Secret Protection iv. Protection against Unfair Competition / Passing-Off Tort v. Industrial Design Protection Annex: Survey Questionnaire: Utility Model System in Pakistan page 5 1. Introduction a. Tasks assigned This section briefly describes the tasks assigned to us as consultants to prepare this analytical paper on the feasibility of introducing a system of utility model protection in Pakistan. It mainly reproduces the contextual background and principal tasks as described in the terms of reference agreed to by WIPO and the consultants. i. Contextual Background In the second phase of the Trade Technical Assistance Program (TRTA-II) for Pakistan, the lead implementing agency UNIDO selected WIPO and the International Trade Centre (ITC) as partner implementing agencies. UNIDO has signed a Contribution Agreement with WIPO to implement the Component of the Program relating to intellectual property (IP) in accordance with the Inception Report that was approved on September 30, 2010 by the Program Steering Committee (PSC) in Islamabad, Pakistan. Implementation of the Component 3 is planned to be completed by end of 2013. Component 3 activities are aimed at strengthening of the intellectual property rights (IPR) system and are grouped into the following four clusters: - Strengthening of IP Institutions - Strengthening IP Legislative and Policy Framework - Improving Enforcement of IPRs - Increasing Use of the IP System by Businesses and Research Institutions One of the activities under the cluster of “Strengthening IP Legislative and Policy Framework” is the preparation of an analytical paper on the protection of utility models in Pakistan. There is increasing interest in Pakistan the possibility of using utility models (or petty patents) to encourage incremental innovation. Such innovation is especially evident in the light engineering sector (e.g. in the automotive sector, agricultural machinery, machine tools). However, this small scale innovation is seldom recognized, let alone economically rewarded. Utility models could provide the necessary protection and economic incentive to promote innovation at this level. Utility models could also facilitate greater awareness and use of the patent system by local inventors. ii. Principal Tasks To assist the national authorities in their consideration of issues related to the protection of utility models, the International Consultant shall: 1. Prepare a paper on Protection of Utility Models in Pakistan. The paper shall include the following elements: (i) An overview of the legal and economic aspects of utility models; (ii) Key features of utility models legislation in certain countries having utility models protection, and the experience of these countries in the use of utility models; (iii) Reasons for introduction, or non-introduction, of utility models protection in Pakistan, taking into account the country’s level of economic and technological development; and (iv) Recommendations on further action, including on alternatives to utility models protection. page 6 2. The International Consultant shall carry out other activities as may be deemed necessary, and as may be requested by WIPO in order to help achieve the objectives of this exercise. 3. The International Consultant shall be assisted by a National Consultant who shall primarily be responsible for providing relevant national data/information, as required. 4. The International Consultant shall submit to WIPO an initial outline of the Paper within two weeks of accepting this assignment. A first draft of the Paper shall be submitted within ten weeks of submission of the outline. The final text of the Paper shall be submitted within three weeks of receiving comments/inputs from WIPO and the national authorities on the draft paper. The National Consultant assists the International Consultant in the preparation of paper by: (i) Providing relevant, Pakistan specific background information and documentation that may be required by the international consultant; (ii) Identifying, and as required, arranging telephonic interviews, with relevant officials/stakeholders whose views/comments may need to be taken into account in finalizing the paper; (iii) Circulating any questionnaires to stakeholders, and facilitating completion of such questionnaires; and (iv) Clarifying any questions and issues pertaining to Pakistan’s intellectual property and economic situation that may arise in the course of preparing the paper. b. Methodology