Introduction:

The Doha declaration on TRIPS1 agreement and public health has been a landmark in its
implications for technology transfer. A proper IP law considering Transfer of Tecnology, and
dissemination of technology helps in achieving the technological goals for the developing
countries. An appropriate IP law alone may not control all technology transfers nor prevent
the anti – competitive practices in technology transfer.

To solve the issues related to IP laws and effective competition, the developing countries
have to create proper legal procedures for encouraging innovation, competition along with
consumer welfare. Anti – competitive practices in Transfer of Tecnology need to be
regulated. Furthermore, the host countries should customize procedure related aspects of the
IP linked competition laws for rendering it as pressure or bargaining method to improve
Transfer of Tecnology.

⦁ As per Paris agreement article 10. 5 there must be proper scope for enhancing
innovation (‘Accelerating, encouraging & enabling innovation is critical for an effective, long
– term global response to climate change and promoting economic growth and sustainable
development.

⦁ Capturing the significance of the Doha Declaration on the TRIPS Agreement and its
implications for technology transfer and the necessity of IP laws in regulating technology
transfer and competition.

It is worth noting that there is no general unanimity on the definition of anti – competitive
practices of WTO2 laws in the matter of Transfer of Tecnology. Such rules generally vary
from country to country. Most major disparity is there between the laws of developing and
developed countries. For instance, while developed countries would like to opt for
innovation-oriented rules, the developing countries tend to have dissemination - based
counterparts.

In disputes relating to the national laws on competition and Transfer of Tecnology,

innovation and development-oriented rules defy normal jurisdiction. Further, appropriateness

1
UNFCCC, ‘INDCs and Technology’ (TEC Report, 27 April 2016)
2
The Declaration on the Establishment of a New International Economic Order (NIEO) was adopted by the
United Nations General Assembly during its 6th special session in 1974. The declaration called for a
restructuring of the international order toward greater equity for developing countries, particularly in
reference to a wide range of trade, financial, commodity, and debt-related issues.
of remedies provided by any system in linkage with TRIPS becomes questionable such that
developing countries have to defer as per the available flexibility.

It is expedient for each country to identify its own enforcement priorities in regulating
IPR related practices related to anti – competitive nature. Moreover, right from the inception,
developing countries have to prevent IPR – related anti – competitive practices which impact
Transfer of Tecnology and consumer welfare considerably.

For preventing inefficiency in application of law:

Avoiding inefficiency in application of law:

Developing countries should apply IPR – linked competitive law3 for their own
national benefit. It is pertinent to note that simply adopting the innovation-based laws of the
developed countries does not help in the case of developing countries because of the disparity
in the technological goals of the systems. Furthermore, a common IPR – related competition
rule is not feasible. This encapsulates the intricacies of varying definitions of anti-competitive
practices within WTO laws concerning Transfer of Tecnology and the contrasting approaches
between developed and developing nations, emphasizing the necessity for each country to
identify its enforcement priorities regarding IPR practices and anti-competitive behavior.

It is imperative that developing countries should adopt IPR – related laws in

synchronization with the TRIPS as well as the specific parameters of own technical needs. As
IP protection is being globalized under TRIPS, IPR linked laws in developing countries have
to be partly localized (globalized) to have a requisite balance a degree of protection and
development of Transfer of Tecnology.

In the Doha declaration, Ministers stressed “that the provisions 66.24 of the TRIPS
agreement are mandatory” and agreed that the TRIPS Council should put in place a
mechanism for ensuring the monitoring and full implementation of that obligation.

3
These agreements are not standard and need to be adapted to the specific circumstances and
requirements of each case.

4
Transfer of Clean Technologies from North to South: Legal Barriers & Mitigation” by
Bernard Colas (2016).
 This for developing countries to harmonize their IPR laws with TRIPS, catering to
their unique technical needs while addressing the globalized nature of IP protection. It
underlines the requirement for a balanced approach that promotes both protection and the
advancement of Transfer of Technology.

Summing up, it may be noted that after abortive discussions on the draft code of
conduct on Transfer of Tecnology, the provisions for anti-competitive ecosystem in the
TRIPS are the salient features of developing countries. Such provisions can form a legal
platform for these countries in WTO. This platform can provide considerable choice to tailor
the domestic competition rules for dealing with anti – competitive practices in Transfer of
Tecnology agreement. It is worth noting that successful Transfer of Tecnology is dependent
on the optimized usage of flexibility available in the TRIPS.

It is further recommended that a developing country should prefer such a proximation

model in the field of competition instead of adopting an apparently reasonable approach
based on level of development as well as institutional ecosystem. As pointed out earlier,
globalization is the important concept in these matters such that customization of domestic
competitive provisions has to be carried out. Industrialized countries treat IPR as primary
means of promoting technological development by offering protection to the inventors.
Developing countries have weakened law5

This encapsulates the importance of TRIPS provisions in combating anti-competitive

practices within Transfer of Tecnology agreements, emphasizing the necessity for tailored
domestic competition rules in developing countries and the significance of a prohibition-
based model in competition regulation within a globalized context.

To fully comprehend the complexities of the transfer of Technology Vs. International Trade
laws it is imperative to have grasp of same the fundamental terminology.

Energy Transition:

This refers to the change from fossil-based systems of energy production and
consumption including coal, natural gas and oil to renewable energy sources like wind and
5
The specific grievances related to restrictive business practices are present within the 1985
version of the International Code of Conduct, highlighting the 14 clauses that were
particularly concerning developing countries.
solar as well as lithium batteries. It is worth noting that renewable energy sources like wind
and solar emit little to nil greenhouse gases and are readily available and in most cases
cheaper than coal, oil or gas6. Actually, fossil fuels produce greenhouse emissions such as
CO2. With renewable energy, we can breathe easier, stay cooler and create a more
comfortable world for generations to come.

Climate change related Technologies and EST Concept:

Climate technologies reduce greenhouse emissions; these include wind energy, solar
& hydropower. Environmentally Sound Technologies (EST) are characterized by

(I) Resource efficiency which aims to reduce the consumption of energy, water and raw
materials

(ii) Pollution prevention

(iii) Sustainable usage

(iv) Life Cycle Improvement

(v) Social and Economic Impact

Barriers of Technology:

Technical barriers are related to

1) Security and Privacy

2) Information Overload

3) Connectivity Issues

4) Device Compatibility

5) Lack of Access of Technology

6) Technical Glitches

7) Lack of Technical Support

6
Reichmann & Hasenzahl are legal scholars who have written about the possibilities of non-voluntary licenses
in Article 31 of the TRIPS Agreement
TRIPS:

In 1994, TRIPS7 emerged as a part of the WTO package applicable to all the members. The
developing countries embraced it as the major powers were intimidating for imposing
sanctions. It was hoped that global IP protection improves technology transfer process. The
basis of TRIPS is that it makes IPR protection the most important feature of multilateral
trading.

Further, implementation of the TRIPS involves considerable economic and social

costs for the underdeveloped nation as it implies a substantial transfer of resources from
consumers and compares in the developing countries.

1. Article 678 of the Agreement on Trade Related Aspects of Intellectual Property Rights
(TRIPS) for instance, needs industrialized WTO members to provide technical associated
with execution of TRIPS agreement in developing countries.

2. According to financier George Soros, we live in a global economy, but the political
organizations of our global society are woefully inadequate. We benefit from the capacity to
preserve peace and to counteract the excesses of the global markets. Without these controls,
the global economy is liable to breakdown.

3. The context of TRIPS within the WTO package, the pressure faced by developing
countries for its adoption, the expected enhancement of technology transfer through global IP
protection, and the consequential economic and social burdens placed upon underdeveloped
nations during its implementation.

Prima face, it is surprising to have competition related features having intention of

promoting adequate measures of protection of IPR. Further, the developed countries did not
evince enough of interest in putting such rules in the TRIPS. On the contrary, the USA and

7
The Organization for Economic Co-operation and Development (OECD) is an international
organization that promotes policies to improve the economic and social well-being of people
around the world. It has 37 member countries that discuss and develop economic and social
policy. Members of the OECD are typically democratic countries that support free-market
economies.
8
According to the TRIPS of Feb 2003, article 66.2 of the TRIPS provides for the
developed member countries to submit reports.
EC concentrated on the effective standards of IP. At this juncture, the role of the developing
countries like India deserves mentioned in the process of legal procedure.

It was India which submitted a detailed report that elaborated on the perspective of the
developing countries. In Indian opinion, the perspective of the developing countries. In
Indian opinion, it was only the restrictive and anti – competitive procedures of the IPR
owners which could be treated as trade linked as those only prevented progress of
international trade. Further, India focused on discussion on the IP system which could keep in
view the essence of system in monopoly and restriction. The suggestion of developing
countries actually reflected their comprehension of IPR as a danger for competition.

Technology transfers may consist of various operations such as:

a) foreign direct investments based on the creation by the mother company of a subsidiary in
another country (in this scheme, the spill overs are enhanced)

b) licensing based on the payment of IP Rights to the patent owner which allows avoidance of
trade barriers and uncertainty of local markets.

(c) This footnote encapsulates the surprising nature of the competition-related features in the
TRIPS agreement, the contrasting focus of developed countries on effective IP standards, and
India's significant role in articulating the perspective of developing nations, emphasizing the
relationship between IPR and competition.

The Paris convention for the protection of Industrial Property considered the law of
unfair competition in 18839. Accordingly, 160 states were found by assurance of effective
protection in case of unfair competition for the other parties. Later in 1926 the League of
Nations had a multilateral convention to unite the national laws on restrictive business
standards.

In 1948, the Havana chapter proposed rules against restrictive business practices and
abuse of intellectual property rights (IPR). These rules were included in the Havana Charter.
However, the charter was never ratified. The World Trade Organization (WTO) has since

9
Jones Meckling and Llewely n Huges, ‘Global Interdependence in Clean Energy
Transactions (2018): Business & Politics.
taken up the issue of restrictive business practices and has established rules to address them.
It is worth noting that the Havana Chanter was not notified.

It is pertinent to note that restrictive business practices in Transfer of Tecnology were

highlighted in NIEO (New International Economic Order). Negotiation on draft International
Code of conduct from 1970 – 1985 was carried out by the United Nations Conference on
Trade and Development (UNCTAD).

Grant - back clauses are provisions10 in licensing agreement under which a licensor of
IPR Generally, a grant-back is deemed to have pro-competitive effects of reducing the
licensing risks for licensors, promoting investments and application of new technology, and
facilitating innovation and competition accordingly. reserves the right on the licenser’s
improvements made in the licensed technology during the licensing period. Some licensors
insist on Grant - back clauses to ensure control over the entire process and to avoid
competition with licenses having superior product11.

This synthesizes the historical progression from the Paris Convention to the Havana
Charter and the subsequent discussions on restrictive business practices within the context of
Transfer of Tecnology during the NIEO, culminating in the efforts of UNCTAD in
formulating the International Code of Conduct.

The grievances of developing countries originated from undesirable, restrictive

business clauses12. For instance, the 1985 version had 14 restrictive business practices in
chapter- 4 including Grant -back provisions, challenges towards validity, restrictions on
research excluding dealing, personnel usage, fixing of prices, & constraints on adaptation,
representative agreements, export restriction, tying arrangements, cross licensing agreements,

10
IPCC 2000, UNCTAD / ICTSD, 2004.

11
The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) is an international legal
agreement between all the member nations of the World Trade Organization.
12
Article 40.1 under TRIPS, addressing Transfer of Technology (Transfer of Tecnology),
emphasizes that licensing practices related to Intellectual Property not linked to Transfer of
Tecnology should not impede it. It primarily applies at the international level of Transfer of
Tecnology, allowing corrective action by members in cases of any obstruction to trade or
technology transfer due to anti-competitive licensing practices. Notably, TRIPS permits
members to establish antitrust measures as deemed beneficial, and the WTO's Dispute
Settlement Body (DSB) suggests employing a "necessity test" akin to GATT/GATS issues,
adaptable for TRIPS-related competition disputes.
publicity constraints, payment after expiry of IPR, and restriction after cessation
arrangements.

It is pertinent to note that a lot of discussions took place on the negotiations of

Chapter- 4 of the draft code relating to the rule of reason on the per se rule for listed practices
under restriction. Even though in the 1970s, per se rule was applied to some specific cases,
many close the restrictive practices to be under rule of reason considering individual cases.
The rule of reason was not approved by the developing countries. They suggested that such
terms would be detrimental to their interests. The support for the draft code evaporated in the
mid-1980s. In fact, the negotiations on this subject abruptly stopped in 1985 and have not
been taken up the last 40 years. UNCTAD was completely sidelined in the time of Uruguay
negotiations.

The negotiations resulted in two important sectors. Firstly, these gave opportunity to
diagnose the difficulties facing the Transfer of Tecnology in third world countries.
Agreement on many of the issues made the negotiations of the TRIPS a lot easier. Secondly,
the adoption of policies on restrictive business practices were impacted having strong residual
effect on the TRIPS.

1. India, Brazil, Morocco, Egypt & Mexico reached good to medium performance level (with
a score of more than 56.82) ahead of many European countries like Belgium, the Netherlands
or even Germany, Argentina was very close to a medium performance level. China reached a
good performance level (with score of 49.60)

2. This analysis draws upon historical trade negotiations predominantly focusing on the
discussions surrounding the per se rule and the rule of reason within Chapter 4 of the draft
code. It reflects the divergence of opinions among developing nations on the application of
these rules and their perceived impact on trade interests, which ultimately led to a stall in
negotiations since the mid-1980s. The observations here also highlight the implications of
these discussions on Trade-Related Aspects of Intellectual Property Rights (TRIPS)
negotiations and their lasting influence on policies regarding restrictive business practices.

Further, in 1993, a team of anti-trust experts announced a draft International Antitrust

Code aka Munich code and suggested it to be considered as a General Agreement on Tariffs
and Trade (GATT) Plurilateral Trade Agreement. It is worth noting that the Munich code
depended on an idealistic vision of the global politics of trade. It could still be used for
inculcating competition policy into WTO legalities. This would help create an ambition-
oriented agreement which could support debate on the necessity of international rules of
competition. The Munich code also recognized the exercise of IPR within the constraints of
legal contents so that any utilization beyond the legal benchmark would be treated as illegal.

⦁ Based on the examination of the INDCs presented by the countries (and assessed by
the TEC committee) it is seen that demands of clean energy technology are mainly coming
from developing countries as defined by IMF 2018 classification except China. As per the
IMF, the category of “Emerging & Developing Economics” refers to countries such as
Argentina, Bangladesh, Brazil, China, Egypt, India, Indonesia, Kazakhstan, Malaysia,
Mexico, Morocco, Nigeria, Pakistan, Philippines, Saudi Arabia, South Africa, Turkey,
Vietnam etc.13

⦁ The Munich code, proposed in 1993, by a consortium of anti-trust experts, advocated

the creation of an International Antitrust Code, intended for integration within the General
Agreement on Tariffs and Trade (GATT) as a Plurilateral Trade Agreement. Rooted in an
idealistic perspective of global trade politics, the code aimed to incorporate competition
policy into the legal framework of the World Trade Organization (WTO). It aimed to catalyze
discussions regarding the need for international competition rules. The code notably
acknowledged the permissible exercise of Intellectual Property Rights (IPR) within defined
legal boundaries, marking any utilization beyond these parameters as illegitimate. The
Munich code served as an initiative bridging competition policy with international trade
regulations within the context of the WTO.

It is imperative to note that incorporating the competition related rules meant a bit of
conceding policy for the developing countries in articles 8. 2, 31(k) and 40. The exercise of
IPR in competition rules is not stipulated by the WTO. Substantial discretionary rights are
there in the application of competition law for IPR. Indirectly, the articles mentioned earlier
accept the power of the intervention by the members in controlling IPR – related anti –
competitive platform.

According to Article 8. 2: -

13
The Environmental Kuznets Curve (EKC) is a hypothesized relationship between various indicators of
environmental degradation and income per capita.
Appropriate measures, provided that they are consistent with the provisions of this
agreement, may be needed to prevent the abuse of intellectual property rights by right holders
or the resort to practices which unreasonably restrain trade or adversely affect the
international transfer of technology.

As per Article 31 (k): -

Members are not obliged to apply the condition set forth in subparagraphs (b) and (f)
where such use is permitted to remedy a practice determined after judicial or administrative
process to be anti – competitive.

The need to correct anti–competitive practices may be taken into account in

determining the amount of remuneration in such cases. Competent authorities shall have the
authority to refuse termination of authorization if and when the conditions which led to such
authorizations are likely to recur.

The integration of competition-related rules within the World Trade Organization

(WTO) framework involved nuanced negotiation, particularly impacting developing
countries in articles 8.2, 31(k) and article 40.

The explicit incorporation of IPR within competition rules wasn't mandated by the
WTO, granting considerable discretionary power to members in applying competition laws to
IPR. Articles like 8.2 indirectly acknowledged members' authority to intervene in controlling
anti-competitive practices related to intellectual property rights, permitting appropriate
measures to prevent abuse of these rights or practices that unreasonably restrain trade or
affect international technology transfer, as outlined in the WTO agreements.

Analysis:

There are three types of restrictive practices in article 8. 2. These are

a) IPR abuse of rights holders

b) practices which restrain trade rather irrationally

c) practices which have detrimental effort on Transfer of Tecnology.

 Both unilateral abuse by a firm, and bilateral contractual restraints of anti–
competitive conduct are covered. It is worth noting that this article read along with article 48.
1 can be applied to anti – competitive abuses of IPR.

In summary, article 8. 2 applies to IPR – linked abuses and avoids potentially anti–
competitive arrangements like acquisitions, mergers and collaborative ventures.

Regarding article 40. it may be seen that this recognizes certain IPR – related
licensing practices or conditions having negative impact on trade and technology
dissemination. Further, this constitutes member’s opinion on the adverse results of licensing
practices, while the definition of the actual practices is meant for purview of domestic laws.
However, this article is not just a note of declaration. When the members agree that some
licensing practices have to be checked, inactivity of the members becomes contrary to the
aims of article 7.

article 40. 114, it is imperative to examine three aspects for Transfer of Tecnology.
Firstly, the practices of licensing on related conditions may not have any negative impact on
Transfer of Tecnology. This article is clearly to for licensing of IP not related to Transfer of
Tecnology.

Article 40. 2 add “with the other provisions of this agreement”. Finally, the
implementation aspects are left to the discretion of the members.

Articles 40.3 and 40.4 within TRIPS address consultation and cooperation. Article
40.3 establishes a limited duty for antitrust law enforcement through multilateral agreements,
focusing on controlling restrictive contractual practices and technical cooperative ventures.

For consultation and cooperation, articles 40. 3 and 40. 4 are relevant. In article 40. 3,
an assistance duty in antitrust law enforcement has been set by multilateral agreement in a
limited way for having control on restrictive contractual practices covering both case –
specific and technical cooperative ventures.

Additionally, Article 67 mandates developed countries to provide technical

cooperation for IPR enforcement and abuse prevention, albeit with less transparent
cooperation permits.
14
The Doha Declaration on the TRIPS Agreement and Public Health was adopted by
the WTO Ministerial Conference of 2001 in Doha on November 14, 2001. It reaffirmed
flexibility of TRIPS member states in circumventing patent rights for better access to
essential medicines.
 It is noteworthy that article 67 necessitates that developed countries must provide
technical cooperation for enforcement of IPR and prevention of abuses. These cooperation-
related permits are not very transparent, of course.

similarly, article 8.2, this article is applicable to only international level of Transfer of
Tecnology even though it has some linkage to dissemination aspects due to the broad
coverage of the TRIPS. Thirdly, a not particular degree of negative effect of anti–competitive
licensing practices is necessary so that any detrimental effect on trade or any obstacle on
technology transfer can permit the members to take corrective action.

It may be noted that TRIPS do not bar the members from establishing the focus of
antitrust measures as they perceive to be fit for their own benefit. WTO Dispute Settlement
Body (DSB) has expressed with clarity the steps like “necessity test” on GATT / GATS
linked problems. Such tests may be applied mutates mutandis for disputes of competition in
TRIPS.

US – India Dispute:

In the WTO solar dispute case between the USA and India, the former made a complaint
against India’s enforcement of domestic content requirements (DCRs) on solar power
developer. Further, it was clarified that the developers were absolutely necessary for
producing certain categories of solar cells and modules for the country. It was decided by
WTO that specific measure was “trade restrictive and discretionary as an irony of fate”. As
India has a binding obligation according to Paris agreement for proposing NDCs, it must
have flexible platform for having own strategies of development. According to article XX (b)
and (g) of GATT, India could develop its local market indigenously to take care of its own
environment. The Paris agreement is quite clear on the issue of the legal nature of NDCs as
the members could only submit Nationally Determined Contributions (NDCs) regarding
mitigation of climate change. Any step for developing local markets to produce clear energy
needs to be viewed as an integral part of the international steps amenable to TRIPS.

1.The strategy of avoiding reference to IPRs in the international climate framework is

supported by technology exporting countries such as the USA, Austria, Japan and other
developed countries.
2. In the WTO solar dispute case between the USA and India, India's enforcement of
domestic content requirements (DCRs) for solar power developers was contested. The WTO,
acknowledging the necessity of these measures for domestic solar production, deemed them
"trade restrictive and discretionary." India defended its actions, citing its obligations under
the Paris Agreement to propose Nationally Determined Contributions (NDCs). India argued
that fostering the local market for clean energy aligned with the Paris Agreement's focus on
mitigating climate change and should be considered an integral part of international efforts in
compliance with Trade-Related Aspects of Intellectual Property Rights (TRIPS).

Present Status of India:

India’s IP regime has expanded in the last few decades. According to The United
Nations Environment Programme (UNEP) study of 201015, 80% of patent application for
clean energy technologies were from the USA, Germany, South Korea and France.

The report also catalogues UNEP’s broad response to the on-going financial
instability set against an increase in the frequency and intensity of natural disasters and
shifting weather patterns. The report attempts to set UNEP’s work over the last year in
context and show its future relevance in meeting the emerging challenges of the coming
years.

The core objective of the United Nations Environment Programme (UNEP) is to

serve as an authoritative advocate for the global environment, to help governments set the
global environmental agenda, and to promote the coherent implementation of the
environmental dimension of sustainable development within the United Nations system

Further, this report showed that 42% had licensing arrangements with parties in
developing countries in the previous three years. It is significant that some of the countries
covered by the study were involved in Environmental Goods Agreement in Genera. At the
present stage, it is expedient for India to participate in the Environmental Goods Agreement

15
The Bretton Woods Institutions, namely the World Bank and the International Monetary Fund (IMF), were
established in 1944 with the aim of rebuilding the postwar economy and promoting international economic
cooperation.
such that the advantages of Tariff liberalization can be used to facilitate production of energy
efficient technologies by reducing costs.

1.For emerging markets as in India, the securities trading takes place “over the counter” in
the informal global network of brokers, dealers and investors. The uncertainty created by the
Asian financial crisis led to unprecedented heavy sales which peaked in November 1997 at
five time’s normal traffic. The settlement mechanisms were not suited for such volume
resulting in fundamental problems of reconciliation and matching.

2.India's intellectual property (IP) regime has expanded notably in recent years. A UNEP
study found that 80% of clean energy technology patent applications originated from the
USA, Germany, South Korea, and France, with 42% involving licensing arrangements with
developing countries. Given the involvement of certain nations in the Environmental Goods
Agreement discussions, India's participation becomes crucial. Joining this agreement could
leverage tariff liberalization to support the production of energy-efficient technologies,
reducing associated production costs.

Provision of Cooperation: -

The provisions of cooperation relating to the protection and enforcement of IPR have been
elaborated in Article 67. However, it does not place explicit obligation on developed
countries for enforcing their own competition laws to prevent misuse of IPR. Because of this
laxity, the developed country members have concentrated on preparation of domestic
legislation for IP protection and hardening enforcement measures in developing countries.
Rarely do they offer cooperation on utilization of flexibilities spelt in 8.2, 31 (k) and 40 of the
TRIPS documents. It is worth noting that, at present, mechanisms of control and prevention
of IPR related anti – competition rules are non-existent in many developing countries.

1.Many environment – related efforts have been taken under WTO including negotiating
tariff reductions in environmental goods & services having more transparency on the
relationship between the existing WTO rules and specific trade obligation in multilateral
environmental agreements and seeking disciplines in many subsidies.

2.Article 67 of TRIPS covers cooperation in protecting and enforcing Intellectual Property

Rights (IPR) but lacks explicit obligations on developed countries to enforce their own
competition laws against IPR misuse. This oversight has led to a focus on reinforcing IP laws
in developing nations rather than aiding in utilizing TRIPS flexibilities (Articles 8.2, 31(k),
and 40). Consequently, many developing countries currently lack mechanisms to control IPR-
related anti-competition practices.

Amendments of TRIPS:

A project called IPT (Intellectual Property Rights in Transition) had proposed a new
competition article in the form of 8b and amendment of article 40. 2 for having a rule which
could be “binding” de jure, but flexible de facto. As per this proposal, the competition
provisions of TRIPS should be substituted by mandatory rules to compel the members to
adopt and apply statutory licenses to prevent IPR – linked anti – competitive procedures.

Tamara Lothian has described the “Washington Consensus” as a body of ideas and repertoire
of solutions” shared by the U. S government, many U. S. Universities and the major
international financial institutions based in Washington. In his work, The Democratized
Market Economy in Latin America: An Exercise in Institutional Thinking within Law and
Political Economy, he has discussed that consensus rests on four major principles: Orthodox
stabilization of the economy through fiscal austerity, export orientation, liberalization &
privatization.

It was worth noting that earlier too there were such proposals. After the failures of
WTO Ministerial Conference on Cancun in 2003 on the Singapore issues, Poly of
Competition was actually bopped from WTO Doha negotiations. Mandatory clauses are not
normally acceptable to WTO. Considerable choice for WTO members in formulation of
domestic IPR – linked regulations under the present rules of TRIPS are capable of helping
both types of countries. Amendment of the competition rules in TRIPS may not be desirable
or feasible in the near future.

The OECD16 has taken up many points on trade & environment such as regional trade
agreements (RTAs) the drivers of environmental provisions in RTAs as well as the stringer of
environmental policies as a driver for trade in goods in environmental goods and services.
Currently, a set of policy indicators are being taken up on trade and environment to help
monitor progress towards more policy coherence and to identify policy priorities at the
intersection of trade and environment.

16
The United Nations General Assembly (UNGA) declaration on climate change has been increasingly active in
addressing climate change issues since the late 1980s, with significant resolutions and declarations.
Common but Differentiated Responsibility, Technology IPRs: -

CBDR (Common but Differentiated Responsibility) is an accepted principle of International

Law covered under UNFCCC and Kyoto Protocol. Though both developing and developed
countries are supposed to protect the environment and help sustainable development, their
responsibilities differ according to socio–economic development. As per the Rio declaration,
11 states shall cooperate in a spirit of global partnership to conserve, protect and restore the
health and integrity of the Earth’s ecosystem.

The Frame–work Convention on Climate Change has stated that the members should act on
the basis of equality and in accordance with their common but differentiated responsibilities
and respective capabilities. The developing countries are to be a party to international treaties
and comply; the obligations are not shared equally. The developed nations are supposed to
help through technology transfer, economic packages to achieve the common objective. The
Montreal Protocol has covered this aspect of cooperation. For instance, agreement on Ozone
implied that Ozone destroying substances would be phased out in return for financial and
technical assistance.

CBDR in Climate Change: -

It is established that the developed countries are major polluters in CGHS. The developing
nations have their share towards climate change as their part of emissions is also increasing.
The responsibilities of developed nations are definitely more. Because developing nations
require development and growth and cannot compromise in the cause of sustainable
development, the developed countries are expected to “lead in modifying long – term trends
in anthropogenic emissions of greenhouse gases”.

In the Singapore Declaration on Climate Change, Energy and Environment, CBDR has been
used “Stress that all countries should play a role in addressing the common challenge of
climate change, based on the principles of common but differentiated responsibilities and
respective capabilities: and that developed countries should continue to play a leading role in
this regent”. China has highlighted CBDR for finding solution to climate change. However,
technology transfer under UNFCCC / Kyoto Protocol has not succeeded as expected. Even
then, the principle of CBDR has not lost its relevance.
TRIPS - KEY FEATURES:

TRIPS (Trade Related Intellectual Property Rights) is one of the major agreements of
WTO. Basically, it strives to establish a minimum level of IP protection. Under the WTO’s
Dispute Settlement Mechanism (DSM) IP laws and allied policies can be challenged. The
linking of TRIPS with DSM and the mechanism of cross – retaliation have made TRIPS quite
effective. The scope of TRIPS goes beyond IP protection and includes facilitations of
Transfer of Tecnology for developing countries and LDCs as well as usage of IPR and
technology by all the member states.

The key features of the TRIPS agreement are as follows:

 It establishes minimum standards for the regulation by national governments of

different forms of intellectual property (IP) as applied to nationals of other WTO
member nations.
 Grant of patents in all fields of technology (Article 27)
 Grant of Exclusive rights to make and sell import technology.
 Mandatory Licensing subject to provision of TRIPS.

 Requires WTO members to provide copyright rights, covering authors and other
copyright holders, as well as holders of related rights, namely performers, sound
recording producers, and broadcasting organizations; geographical indications;
industrial designs; integrated circuit layout-designs; patents; new plant varieties;
trademarks; trade names; and undisclosed or confidential information.
 Sets out the minimum standards of protection to be provided by each Member in
respect of each of the main areas of intellectual property covered by the TRIPS
Agreement.
 Twenty-year term of patent protection from the date of filing (Article 33)
 specifies enforcement procedures, remedies, and dispute resolution procedures.
 Non-discrimination between nationals & non – nationals in IP protection

TRIPS & PATENTS:

1. TRIPS provides exemption from patenting for public morality or ordure public to preserve
human, animal or plant life.

2. Article 27. 3 (b) ensures protection of plant varieties by patents or by an effective

subgenera’s system. However, the components of subgenera are not indicated.

3. Like the Paris convention, TRIPS has allowed the countries to select the mode of
implementation in patents. It mandates that all member countries except LDCs will provide
patent protection for pharmaceutical products by 1st Jan 2005. (LDCs have been exempted
longer).

4. Developing nations are to explore options like using competition policy to ensure that the
monopoly rights are not abused.

It is evident that whereas “technology push policies” like R & D incentives & funding
makes sure that a new technology goes to the deployment phase, the progress would depend
on the marketing skill. This basically sums up the Gallagher proposal for the dynamics of
marketing.

The technique effect is a consequence of cross border trade which might impact LCT
diffusion. In one case, with increase of income, the consumers may want products with lower
carbon footprint. In another case, the producers have access to adopting better technology.

Finally, the technique effect can nullify the growth of the scale of emission due to
improved trading. This is reflected in Environmental Kuznets Curve 17(EKC). A balanced
view in the matter is that it is enough to say that pro – active internal trade policies actually
help low – carbon technology diffusion by starting the technique effect.

Open trade can impact Transfer of Tecnology Greenhouse gas (GHG) emissions of an
economy through. Scale, composition on technique effects. The transfer of technology to
support national action on climate change has been an essential element from the beginning
of the UNFCCC18 process. The Paris Agreement speaks of the vision of fully realizing

17
The United Nations Environment Programme (UNEP) published its annual report for 2010 on March 22,
2011. The report highlights the beginning of a new, strategic, and transformational direction
for UNEP as it began implementing its Medium-Term Strategy (MTS) for 2010-2013 across
six areas: Climate change, Disasters and conflicts, Ecosystem management, Environmental
governance, Harmful substances and Hazardous waste, and Resource efficiency, Sustainable
consumption, and production.
18
A diplomatic conference in Paris in 1880, the convention was signed on 20 March 1883 by 11 European
countries.
technology development and transfer for both improving resilience to climate change and
reducing GHG emissions. It establishes a technology framework to provide overarching
guidance to the Technology Mechanism. The scale effect shows an increase in emission. The
composition effect shows increasing efficiency sector wise.

Domestic tariff and non – tariff measures, as well as global trade rules set the terms of
interaction for firms engaged in LCT transactions across borders. By doing so, trade
regulation provides the overall framework within which transactions – both voluntary and
compulsory – will take place. Therefore, trade rules are important determiners of how a novel
technology is taken up by the market actors.

In more theoretic terms, diffusion is a key stage in a new technology’s journey from the
drawing board to the market. At that stage, a new technology spreads along different trade –
related pathways given that adequate enabling conditions exist. The following figure shows
that while the ‘technology push policies’ (e.g. R & D funding, incentives) ensure that a new
technology reaches the deployment stage, whether it would progress further or not depends
on the existence of appropriate ‘market pull’ measures. This is what Gallagher proposes as
market formation policies for LCTs. Therefore, to the extent trade rules are concerned, their
role can hypothetically to be allowed, also promote such a push and pull dynamic to take
place.

Transfer of Tecnology and TRIPS: Legal Implication: -

TRIPS may be interpreted as an agreement which contains rights and obligations which have
space for the members to balance the competing demands and to have IP rights
circumscribed. For detailed analysis of the provisions of TRIPS, the decisions of the panel of
the DSM are final until these are negated by the Appellate body. It is worth noting that there
is a conflict between IP protection and access. In case of public health needs, the members
require power and authority to provide importance to access.

Article 7 mentions ‘balance of rights and obligations. The flexibility of TRIPS and the
powers of governments are constrained by the interpretations of Panels / Appellate bodies.

The article 8. 2 is significant for technology transfer as it accepts the necessity to prevent the
procedure of resorting to practices which are detrimental to international trade. Article 40
implies that ‘rule of reason’ approach should be applied for assessing the anti – competitive
measures. Article 40. 2 has instances which may be thought to be restrictive as those which
oblige the transfer of the improvements made on the licensed technology only to the licenses.
This article states that only if such practices constitute an abuse of intellectual property rights.

Trip and Refusal to Deal:

An interesting situation arises when the patent holder refuses to license the related
technology. Compulsory licensing is applicable for developing nations when the patent is
filed in that area. However, compulsory licensing option has definite limitation. Firstly, the
firms may not be capable of using the technology because the information would not be
sufficient for actual practice. In most cases, taut technology is not useful. Further, the patent
holder has no obligation to transfer the technology. It is a most point whether it is possible to
obtain compulsory license for supplying or exporting to a market in developing country.

The only binding rule for compulsory licensing is in Article 31. The chief purpose of
compulsory licensing is to restrict its use in exports. The domestic market actually benefits
from this procedure. Article 30 is not of much use as its language is more restrictive than that
of article 31. As per Reichmann & Hasenzahl19, the possibilities of non – voluntary licenses
are wider in article 31 because Article 31 has limitations which are more flexible and can be
used to address a wider range of public health concerns. However, the grant of compulsory
licenses is subject to certain conditions, such as prior negotiation with the patent holder and
payment of adequate remuneration.

It is worth noting that the actions possible under article 82 are circumscribed by Article 40
which limits the capacity of administration for taking steps for prohibiting anti – competitive
methods of technology transfer. Such a situation does raise questions about the extent of
competition policy in encouraging technology transfer and in stopping the so-called
techniques of an anti–competitive nature.

Overall, TRIPS considerably restricts the capacity for invoking competition policies for
reversing the abuse of rights of IP holders. Thus, usage of competition policy for ensuring
that Transfer of Tecnology agreements do not improve restrictions which are detrimental to
competition or restrictive in nature for the licenses.

LCT: Case of Climate Technology

Clara Brandi has studied extensively in “Trade Elements in Countries Climate Contribution
19

under the Paris Agreement” at ICTSD (International Centre for Trade & Sustainable
Development) in 2017.
Diffusion of Low carbon technologies has been in focus because of their indispensable role in
mitigating climate change. Maintenance of safe climatic conditions has been rather
troublesome. Factors like finding critical point of catastrophic emission, perception of
negative impact on growth are having adverse impact on the complexity of climate change
problem. The international tracts-based set of climate rules lacks normative strength as well
as the level of influence for international trade regulation.

IPCC: -

Intergovernmental Panel on Climate Change (IPCC) has identified some key risks coming
from human induced climate change. Five broad threats arising from these are:

⦁ danger to the unique & threatened systems

⦁ Global aggregate impacts

⦁ Extreme Weather Events

⦁ Uneven distribution of impact

⦁ Large scale singular events.

It is also projected that six different ranges of temperature rise would be there due to different
levels of Greenhouse gas (GHG). Concentration on CO2 – equivalent terms by the end of
21st century. Carbon budget is the limit for cumulative anthropogenic emission of
greenhouse. As per a special report by IPCC after the Paris agreement20, there is a 50%
chance of staying within 1.5 degrees temperature limit with the remaining carbon budget at
580 GtCO2. (For 66% probability, the value is around 420 GtCO2). A portion of this budget
is exhausted by natural events which are triggered already.

1. Inspite of break forecasts, the international community agreed at the Paris meeting in 2015
much line 1992 framework convention.

20
The World Trade Organization (WTO) is an international organization that aims to promote
free trade by reducing trade barriers and providing a platform for member countries to
negotiate trade agreements. The WTO also has provisions to address anti-competitive
practices, which are defined as practices that restrict competition in a market and harm
consumers
2. Given the downturn due to Covid, mitigation is no longer the priority. Even the USA has
withdrawn from the Paris Agreement.

LCTs in Mitigation:

Successful emission pathways project an increase in the share of renewables in electricity

creation of the order of 70 – 85% within thirty years. Share of coal is supposed to be
negligible. Emission from the industry sector is expected to be 75 – 90% lower in 2050 as
compared to the state four decades earlier. The share of low – emission fuel could rise from
less than 5% to about 35 – 65% by 2050. However, such transformations are naturally
challenged by economic, institutional & socio – cultural barriers. Even the factors of
uncertain carbon dioxide removal (CDR) have to be circumvented.

As per UNFCCC secretariat, all the developing countries have taken up similar issues in
INDCs (Intended Nationally Determined Contribution) documents21. Above 100 developing
countries have expressed a need for technology – linked support for being able to reach their
goals in this aspect.

Trade for LCT (low carbon technology) Diffusion: -

It is pertinent to note that compared to the term “Environmentally Sound Technology” (EST)
used as treaty term, low carbon technology is narrower in scope, and it is more emphatic on
climate mitigation. Further, the IPCC special report on limiting global warming to 150 C has
defined the scope of LCT. For instance, solar power generation and wind energy necessitate
grid systems and storage capacities for intermittent of renewable energy. Similarly, CCS
(Carbon Capture & Storage Technologies) are required for fossil – fuel dependent power
sectors. Energy efficiency improvements are expected from information technology as well
as from cross sector technologies such as steam systems, motor systems and waste heat
recovery mechanisms.

Trade often triggers transmission of knowledge in soft and hard ways across the demarcation
lines. The outcome of this process are the new products or processes which find market in

21
Grant-back is an arrangement under which a licensee agrees to authorize the licensor of
IPRs to use the licensee's improvements to the licensed technology or new application
obtained in using the licensed technology.
partner economics. Number of pathways have been listed by IPCC in which the interaction of
the stake holders leads to Transfer of Tecnology.

IPCC List: - Direct purchase, licensing, franchising, FDI, JV, subcontracting, R & D
cooperation, exchange of scientific & technical personnel.

This footnote synthesizes the distinction between "Environmentally Sound Technology" and
"low carbon technology," elaborates on the scope of LCT as defined by the IPCC and
discusses the role of various technologies in climate mitigation, as well as the significance of
trade in facilitating the transmission of knowledge leading to the Transfer of Technology.

The IPCC pathways are classified as public, private & community driven. Private sector
driven pathways always had the dominant mode of technology transfer. It is worth noting that
in this spontaneous process of diffusion, the part of trade policy, and regulation are at best
facilitative. Actually, tariff measures and global trade rules decide the terms of interaction for
firms in LCT transactions. In this process, trade regulation helps the framework in which
voluntary and mandatory transactions take place and hence, trade rules are really the
determiners for technology with respect to markets.

As per the representation shown, diffusion is the major stage for starting the path of new
technology from the planning stage to the customer. New technology goes in different trade –
related paths such as imports, licenses and agreements.

Barriers to diffusion in LCTs are: -

a) Users do not bear the cost of non – adoption

b) Lack of appropriate information unwillingness

c) Innovators to produce ideas for others.

Pricing of carbon emission or removal of fuel subsidies may prevent market failures. The role
of public international law on trade (WTO law) and domestic trade policy steps needs to be
examined in the context of greater LCT diffusion. It must be noted that certain caveats exist
when the efficacy of internal policies triggers transfers which need complementary steps in
education and training. The countries which are not open to trade need support for being
integrated into any trade – related scheme of technology diffusion.
Dichotomy between Trade & Climate Legal Framework: -

There exist some basic differences between the treaty arrangements of international trade and
climate change. The discrepancy between the regimes is further widest in their inclination
towards domestic rules. The domestic commitments are setting standards of global climate
regime. Whereas non–discrimination is the guiding rule in trade, the principle of common as
well as differentiated responsibilities is in force in climate law. Further, in climate law, trade
related aspects of technology development and transfer have not been spelt out. According to
De Conin – ck and Sager, “developed countries favor an approach which exclusively
promotes markets through enabling environments whereas most developing countries are of
the opinion that support developing capabilities are independent of market – conformity.

Internal trade policies are linked to technology benefit from GVCs (Global Value Chains). It
is worth noting that cross border trade in intermediates involves low – carbon technologies in
solar photo voltaic products. It is a fact that developing country firm's role in such supply
chains leads to efficiency improving technologies from the corresponding firms of developed
countries; however, the process is not automatic. The GVCs develop quasi – independent
links with business houses in the process involving competitive pressure. It has been found
that developing countries are lagging in terms of capability amelioration; instead, these get
dragged into medium skill – intensive supply chains.

Common Ground: -

It is imperative for the two frameworks to have a synergy-based cooperation. The doctrine of
Common Concern adds to the strength of the rules in the form of jus cozens. The idea of
“Common Concern of humankind” has been mooted in UNGA in the late 1980s. Ever since
the UNGA declaration on climate change22 was done, a number of legal instruments have
been affected. Other factors include biodiversity, plant generic resources, cultural heritage
and link between environment and development. It is worth noting that the International Law
Commission debated regarding common concern of humankind being taken as a fundamental
norm in protection of the atmosphere.

22
UNFCCC: “Technology & NDCs”, October 2020.
Link of Trade & Climate Regime: -

The lack of proper linkage between laws relating to trade and climate does not mean
that these are contrary to each other. Progressive logic of WTO Appellate Body has a
jurisprudence to the effect that trade measures may be encouraged to promote environmental
issues of there in scope under law.

The intention of avoiding conflict with trade rules was discussed in the 1992
Framework Convention and later in Kyoto Protocol. However, taking a different path, the
issue of reconciliation with trade rules was closed in the Paris Agreement. As of the latest
status, an inference can be drawn that a coherent, constructive relation between trade and
LCT diffusion still defies solution. The job of coherence building between the two regimes
involves prediction of overlap and finding a path for co evolution as well as integration.

The progress of international environmental law over the last few decades reflects
another aspect of globalization implying awareness that environmentally unfair practices in
particular areas could have global effect. Firstly, the regional problems created by such
practices could affect the global economy. Secondly, when these practices were related to
economic production, environmental danger created by the products could spread globally
when the products crossed borders of international economy.

To reduce environmentally unsound practices, the Montreal Protocol on substances

that deplete the ozone layer came into shape in 1989. Other multilateral agreements include
Basel Convention on the control of Trans boundary movements of Hazardous Wastes and
convention on biodiversity and climate change signed at the 1992 United Nations Conference
on Environment and Development in Rio de Janeiro. The Montreal Protocol required
governments to mandate the substitution of environmentally harmful substances such as
chlorofluorocarbons with safer substitutes for which technology is not available in
developing countries. Thus, the need for technology transfer is unavoidable.

Expanding International Law: -

The World Trade Organization (WTO) was established in 1995 as a successor of GATT
(General Agreement on Tariffs and Trade). The need for technical assistance related to WTO
has been covered under the Agreement on Trade – Related Intellectual Property Rights
(TRIPS). In December 1996, the first Ministerial conference on the WTO adopted a plan of
action “aiming at improving the overall capacity of least developed countries to respond to
the challenges and opportunities offered by the trading system”.

It is worth noting that Bretton Woods Conference of 1944 has a participant from India,
Shanmukham Chetty, who later became Finance Minister after independence. The impression
that the prescription of the “Bretton Woods” institutions such as IMF (International Monetary
Fund), World Bank and GATT require minimal intervention in the economy is changing in
the international story of progress. The governance necessary for the “Washington
Consensus” for liberalized economic growth is different from other plans normally associated
with government intervention.

Legal Framework for Transfer of Tecnology: -

The legal framework for the transfer of technology involves several aspects such as

Technology Transfer Agreements23: The transfer of knowledge and information about

technology can take place in two ways: informally through the transfer of knowledge, and
formally through technology transfer agreements.

Types of Agreements: There are different types of technology transfer agreements that are
frequently used to transfer technology from lab to market.

These include:

Legal Regulations: Different countries have different regulations for technology transfer. For
example, under the UNFCCC legal framework, transfer of technology requires the transfer of
know-how and the right to use and further develop these technologies in support of the
development and enhancement of endogenous capacities and technologies of developing
countries.

23
The United Nations Framework Convention on Climate Change (UNFCCC) is an international treaty that was
signed in 1992 at the Earth Summit in Rio de Janeiro, Brazil. The treaty aims to stabilize greenhouse gas
concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with
the climate system.
Licensing Agreements: These are legally binding contracts where the owner of intellectual
property (IP) in a valuable technology (the licensor), gives someone else (the licensee)
permission to use that IP in ways (terms) that are spelled out in the agreement.

Assignments of Intellectual Property Rights: An assignment of IP rights involves the transfer

of ownership of IP from the owner (assignor) to the assignee (physical or legal entity) with
permanent effect.

In India, the transfer of the exclusive rights to a patented technology or the permission
to use a specific technology or know-how occurs through the establishment of legal
relationships between the “transferor,” who is the owner of the exclusive rights or the
supplier of the know-how, and the “transferee,” who purchases them.

The United Nation General Assembly adopted a resolution in 1974 regarding

“Declaration on the Establishment of a New International Economic Order24”. This was
followed by a resolution entitled “Programme of Action on the Establishment of a New
International Economic Order”.

The momentum of the developing country administrations was based on three issues:
first, “massive expansion of international organization for cooperative purposes”, second, the
“growing importance of states representing non – western civilizations” due to decolonizing
progress and third, “the growing gap between the economically developed and economically
less developed countries”. The Bretton Woods institutions25 gave a boost for rules governing
the international economy. However, two decades later, many developing nations were
objecting to adopting “laissez – faire” attitude for internal growth and link to the international
scenario.

In 1964, the frustrations of the developing nations and the disappointment of the
developed nations got ventilated in the United Nations Conference on Trade & Development
which provided the framework for NIEO (New International Economic Order). The rules of
“special and differential treatment for developing countries was the core issue of NIEO.
24
Article 67 of TRIPS requires industrialized members to provide technical assistance
associated with the implementation of the TRIPS agreement in developing countries.

25
IPR laws grant exclusive rights to the owner of the intellectual property. In contrast, competition laws aim to
prevent anti-competitive practices and ensure a level playing field for all market participants
 The NIEO framework stipulated that industrialized actors were supposed to provide
developing countries favorable treatment for aiding industrialization. Basically, transfer of
technology was a salient feature of the NIEO framework.

The programme of Action on the Transfer of Technology called for an “international

code of conduct for the transfer of technology corresponding to needs and conditions
prevalent in developing countries”, “access on improved terms to modern technology”, and
the adoption of “commercial practices governing transfer of technology” as per the
requirements of developing countries.

As most of the primary actors were multinational corporations, the code of conduct
was required also because of the fact that transfers of technology occurred as a product of
foreign direct investment. The code strove to make rules which would change developing
countries' economies from being just satellites of industrialized nations. Actually, foreign
investments created circumscribed centers for export to industrialized markets to generate
profit for being sent to home countries of investors. This implied that production was
regulated by owners and there was no dissemination of technology in the developing
countries.

The NIEO reforms were portion of the grand design for reformation of foreign
investment in developing countries. UN code of conduct on Transfer of Tecnology has tried
to achieve this in two ways: -

It has authorized last governments to invest that foreign investors must train local
personnel in the technology and to encourage R & D in the developing countries. The second
initiative was to restrict the proprietary regulations over technology. When joint ventures
were done with local investors by limiting royalty payments, “grant – back” provisions and
“tie – in” arrangements.

The progress of international environmental law over the last few decades reflects
another aspect of globalization implying awareness that environmentally unfair practices in
particular areas could have global effect. Firstly, the regional problems created by such
practices could affect the global economy. Secondly, when these practices were related to
economic production, environmental danger created by the products could spread globally
when the products crossed borders of international economy.
 To reduce environmentally unsound practices, the Montreal Protocol on substances
that deplete the ozone layer came into shape in 1989. Other multilateral agreements include
Basel Convention on the control of Trans boundary movements of Hazardous Wastes and
Convention on biodiversity and climate change signed at the 1992 United Nations
Conference on Environment and Development in Rio de Janeiro. Montreal Protocol
required governments to mandate the substitution of environmentally harmful substances
such as chlorofluorocarbons with safer substances for which technology is not available in
developing countries. Thus, the need for technology transfer is unavoidable.

Expanding International Law:

Technology transfer is a significant aspect of international law. The term technology

transfer entered international law in the 1960s, and it involves the process of sharing
intellectual property with others. It concerns the efficient and equitable allocation of existing
technology in the world. In international technology transfers, the crossing of national
borders by technology is subject to the control of import-export trade laws.

Furthermore, trade agreements often include provisions for technology transfer. These
provisions can be classified into four subgroups: general intention to transfer technology,
technical cooperation, intellectual property, and joint work on R&D.

The World Trade Organization (WTO) was established in 1995 as a successor of

GATT (General Agreement on Tariffs and Trade). The need for technical assistance related
to WTO has been covered under the Agreement on Trade – Related Intellectual Property
Rights (TRIPS). In December 1996, the first Ministerial conference on the WTO adopted a
plan of action “aiming at improving the overall capacity of least developed countries to
respond to the challenges and opportunities offered by the trading system”.

The TRIPS Agreement (Agreement on Trade-Related Aspects of Intellectual Property

Rights) under the World Trade Organization aims to achieve the transfer and dissemination
of technology as part of its objectives. It specifically requires developed country members to
provide incentives for their companies to promote the transfer of technology to least-
developed countries.

It is worth noting that Bretton Woods’s conference of 1944 had a participant from
India, Shanmukham Chetty, who later became Finance Minister after independence. The
impression that the prescriptions of the “Bretton Woods” institutions such as IMF
(International Monetary Fund), World Bank and GATT require minimal intervention in the
economy is changing in the international story of progress. The governance necessary for the
“Washington Consensus” for liberalized economic growth is different from other plans
normally associated with government intervention.

As most of primary actors were Multinational Corporation, the code of conduct was
required also because of the fact that transfers of technology occurred as by – product of
foreign direct investment. The code strove to make rules which would change developing
country economies from being just satellites of industrialized nations. Actually, foreign
investments created circumscribed centers for export to industrialized markets to generate
profit for being sent to home countries of investors. This implied that production was
regulated by owners and there was no dissemination of technology in the developing
countries.

The NIEO reforms were portion of the grand design for reformation of foreign
investment in developing countries. UN code of conduct on Transfer of Tecnology26 has tried
to achieve this in two ways: -

It has authorized last governments to insist that foreign investors must train local personnel in
the technology and to encourage R & D in the developing countries. The second initiative
was to restrict the proprietary regulations over technology. When joint ventures were done
with local investors by limiting royalty payment, “grant – back” provisions and “tie – in”
arrangements. It is worth noting that the code of conduct set by the UN became embroiled in
many disputes. There was a tangible attempt to construct the base of legalities for
customizing rules on Transfer of Tecnology from other international documents & principles.
With the crisis of payments in 1980s, these efforts reduced along with the NIEO movement.

26
R. L. Rothstein’s book: A North – South Retrospections has discussed this aspect. Legal
aspects of International Technology transfer to developing countries were discussed.
Transformation in International Order:

The transformation in the international order in technology transfer has been significant over
the years. Here are some key points:

Trade Agreements and Technology Transfer: Trade agreements that include technology-
related provisions impact exports of goods, and this impact differs depending on the
technological content of the goods. For instance, the Regional Trade Agreement (RTA)
between the EU and the Caribbean Community (EU-CARIFORUM) establishes the
intensification of activities to promote innovation and technology transfer between the
parties.

Digitalization and International Trade: Services are being increasingly traded online. This
includes information technology (IT), professional, financial, retail, and education services.
New digital services, such as cloud computing, have been developed and are becoming
crucial business inputs.

Technology Transfer Case Studies: Patents facilitate technology transfer from R&D-
conducting organizations and promote market success.

Complexity of Technologies: Technologies are becoming increasingly complicated and

interconnected. Cars, airplanes, medical devices, financial transactions, and electricity
systems all rely on more computer software than they ever have before.

Studies in Technology Transfer: Countries have taken steps in using international and
domestic transfer of technology and combining these transfers with knowledge accumulated
through internal effort in order to build stronger capabilities and improve their innovation
performance.

It is pertinent to note that the NIEO model has been substituted by the Bretton Woods
model. Actually, each of these models seeks to liberalize some rules while tightening others
to get a balance favoring certain areas. The first model of NIEO had loose IPR protection
coupled with tight Transfer of Tecnology regulation. This required that foreign investment
generate certain benefits for local actors. On the other hand, the Bretton Woods model
slackens the Transfer of Tecnology restrictions and tightens the IPR protection. This would
help to give greater authority to foreign investors. It has been noticed that broad areas persist
in which the Bretton Woods model of Transfer of Tecnology is deficient; greater oversight is
required even in a liberalized regime.
 It is imperative to note that some of these fields come from the very changes in the
international economic order which removed the older technology scheme. Such changes
have generated costs of implementation and a need for technology to take care of improved
international trade, information and IPR channeling. Furthermore, Transfer of Tecnology
needs linked to international legal compliance can come up under international laws for
environment.

In the changed scenario, the “new international economic order” has placed many
costs on developing country participants. An international legal framework is necessary to
force balance between these extreme points by proper distribution of costs of Transfer of
Tecnology for industrialized countries and developing nations.

In WTO, the members of developed type have made endeavor in limited and non -
systematic manner providing compliance related technical support to the developing nations.
For the international environmental law, limited scope for Transfer of Tecnology has been
granted by the Montreal Protocol and the World Bank. Of course, it needs more improvement
to meet the requirements in a systematic way.

Further, proper allocation of Transfer of Tecnology costs has been a consistently most point.
Transfer of Tecnology is obviously more important than other resource transfers due to its
productivity. So, its implementation reflects a greater cost for competitions who are
sometimes reluctant to have complete transfers and retain proprietary rights.

Without efforts in Transfer of Tecnology, destabilization may come through volatility

in political sphere which may be consequence of external demands put on developing country
administration. Continuing doubts regarding the effectiveness of rules in controlling
technology transfer have disturbed many efforts to have systematic rules of administering the
transfer processes. A proper legal framework is necessary to balance the cost of technology
transfer for managing globalization such that equity is recognized along with efficiency.

These transformations are shaping the future of international order in technology transfer.

Evaluation of the TRIPS agreement:

The TRIPS agreement is a legal agreement between member countries of the World
Trade Organization (WTO) that sets down minimum standards for many forms of intellectual
property (IP) regulation. The agreement aims to achieve the transfer and dissemination of
technology as part of its objectives, and specifically requires developed country members to
provide incentives for their companies to promote the transfer of technology to least-
developed countries.

The TRIPS agreement, which stands for Trade-Related Aspects of Intellectual

Property Rights, is a treaty that sets out the minimum standards for intellectual property
rights in trade between countries. The TRIPS agreement requires developed country members
to provide incentives for their companies to promote the transfer of technology to least-
developed countries. Article 66.2 of the TRIPS agreement obliges developed countries to
provide incentives for technology transfer. Its information the statistics advanced
international locations are to deliver through the cease of every year on how their incentives
are functioning in practice. This selection is being carried out and become reviewed in
complete whilst the TRIPS Council met in November 2003.

The TRIPS agreement is a multilateral treaty that sets minimum standards for the
protection and enforcement of intellectual property rights (IPRs) among its members. One of
the objectives of the TRIPS agreement is to promote the transfer and dissemination of
technology, especially to developing and least-developed countries (LDCs), in order to foster
their social and economic welfare and development.

However, the evaluation of the TRIPS agreement technology transfer is not

straightforward, as there are different perspectives and criteria to assess its effectiveness and
impact.

Some of the aspects of the TRIPS agreement that are relevant to technology transfer are:

Article 7, which states the objectives of the agreement, including the promotion of
technological innovation and the transfer and dissemination of technology.

Article 8, which allows members to adopt measures to protect public health and nutrition, and
to prevent the abuse of IPRs that may adversely affect the international transfer of
technology.

Article 27, which requires that patents be available for any inventions, whether products or
processes, in all fields of technology, without discrimination as to the place of invention, the
field of generation and whether or not merchandise are imported or domestically produced.
Article 31, which allows members to grant compulsory licenses for the use of patented
inventions without the authorization of the right holder, subject to certain conditions and
limitations, such as adequate remuneration and a predominantly domestic market supply
requirement.

Article 40, which recognizes that some licensing practices or conditions pertaining to IPRs
may have adverse effects on trade and may impede the transfer and dissemination of
technology and allows members to consult each other on the prevention and control of such
practices.

Article 66.2, which obliges developed country members to provide incentives to their
enterprises and institutions to promote and encourage the transfer of technology to LDC
members, in order to enable Them to create a legitimate and feasible technological base.
While it has been successful in promoting the protection and enforcement of intellectual
property rights, its effectiveness in promoting technology transfer to developing countries is
still a matter of debate.

There are several aspects of the TRIPS agreement that are relevant to transfer of technology:

Strength: TRIPS provides a complete private IPR regime that can be enforced to reduce
uncertainty about IPR protection. It can also encourage innovation of new ESTs and help in
their transfer to developing countries. Further, it helps domestic inventions in developing
countries and provides protection for conventional knowledge. The MFN (Most Favored
Nation) principles also help free trade and facilitate Transfer of Tecnology.

Weakness: Overall, TRIPS is bothered about how the developing countries can give proper
environment for Transfer of Tecnology. Overall, it favors “pull” factors over “push” factors.

The evaluation of the TRIPS agreement technology transfer can be done from different
angles, such as:

The legal perspective: which examines the interpretation and implementation of the relevant
provisions of the agreement, and the extent to which they facilitate or hinder the transfer of
technology.
The economic perspective: which analyzes the costs and benefits of the agreement for the
technology suppliers and recipients, and the impact of the agreement on the innovation and
diffusion of technology.

The social perspective: which assesses the effects of the agreement on the public health,
environment, human rights, and development goals of the technology recipients, and the role
of the civil society and other stakeholders in the technology transfer process.

Some of the challenges and limitations of the TRIPS agreement technology transfer are:

The lack of clarity and specificity of some of the provisions, such as the definition of
technology, the criteria for patentability, the scope and conditions of compulsory licensing,
and the incentives for technology transfer to LDCs.

The asymmetry of bargaining power and information between the technology suppliers and
recipients, which may result in unfavorable terms and conditions for the technology transfer,
such as high royalties, restrictive clauses, and limited access to know-how and technical
assistance.

The potential conflict of interests and objectives between the technology suppliers and
recipients, which may affect the willingness and ability of the former to share their
technology, and the capacity and demand of the latter to absorb and use the technology.

The influence of external factors and actors, such as the global market forces, the political
and legal environment, the institutional and infrastructural constraints, and the role of the
international organizations and the civil society, which may affect the availability,
affordability, appropriateness, and effectiveness of the technology transfer.

Some of the suggestions and recommendations for improving the TRIPS agreement
technology transfer are:

To clarify and harmonize the interpretation and implementation of the relevant provisions of
the agreement, and to ensure their consistency and compatibility with other international
agreements and norms, such as the Convention on Biological Diversity, the UN Framework
Convention on Climate Change, and the Doha Declaration on TRIPS and Public Health. the
technology transfer activities, to share best practices and experiences, and to provide
technical and financial assistance and capacity building to the technology recipients.
To promote the participation and consultation of the technology recipients and other
stakeholders, such as the civil society, the academia, and the private sector, in the technology
transfer process, to ensure that their needs, preferences, and interests are taken into account,
and that their rights and obligations are respected and balanced.

To foster the development and diffusion of pro-poor, pro-development, and pro-environment

technologies, such as the green technologies, the health technologies, and the agricultural
technologies, that can address the social and economic challenges and opportunities of the
technology recipients, and that can contribute to the achievement of the sustainable
development goals. Unlike other WTO agreements, TRIPS is proscriptive implying that
countries must have affirmative policies to implement the Agreement (instead of abolishing
tariffs and trade barriers). Further, as developed countries have input knowledge on IPR and
also because developing countries need guidance, foreign pressure may come on developing
countries to reinforce IPR laws beyond the TRIPS.

Even if the poor countries have licenses, companies may not be able compensate IPR holders.
Geographic & temporal limitations can stop firms from recovering investment. Competition
from stronger parties can drive licenses out. Many amendments in TRIPS may be required;
until then EST seekers may not get full advantage. Furthermore, the WTO Dispute Settlement
Mechanism needs huge financial & human capitals expenditure as the field is not levelled.

Possible Modification of the TRIPS agreement:

The agreement has been criticized for creating a global imbalance in the access and use of
technology, especially for the least developed countries (LDCs) that face multiple challenges
in their development process.

Some possible modifications of the TRIPS agreement that have been proposed are:

Expanding the scope and duration of the transition period for LDCs to implement the TRIPS
obligations, as well as the exemptions and flexibility they can use.

Enhancing the monitoring and reporting mechanism of Article 66.2 to ensure that developed
countries provide effective and appropriate incentives for technology transfer to LDCs.

Establishing a multilateral fund or mechanism to support technology transfer and innovation

in LDCs, especially in areas related to public health, food security, and climate change.
Creating a special regime or waiver for LDCs to access and use climate technologies that are
protected by IPRs, such as compulsory licensing, patent pools, or technology clearinghouses.

These are some of the possible modifications of the TRIPS agreement that could address the
issue of technology transfer and development.

According to Reichman & Maskus, “to benefit from TRIPS, flexibility needs a degree
of legal and regulatory expertise which may exceed the capacity of many countries for the
foreseeable future”. Perhaps, a new “Declaration on TRIPS and Climate Change” might
clarify existing flexibilities and provide better facilities for EST transfer.

Integrated, pro competition provisions could also promote technology transfer. Developed
countries could lead by making licensing compulsory for climate change related IPRs held
domestically. However, pro competition provisions could be resisted by IPR holders who
have upper hand over several WTO participants.

Further, procedures for challenging patents could be made less complicated for lowering
developmental costs.

Additionally, licensing guidelines may be stipulated for providing fixed low fees for EST
patenting such proposal need protracted discussions.

Synchronized Measures for Climate Change-induced Technology Transfer:

Synchronized measures for climate change-induced technology transfer pertain to policies

designed to facilitate the development, diffusion, and uptake of low-carbon technologies
among nations. These policies not only focus on mitigating climate change impacts but also
encompass broader objectives such as fostering economic growth, promoting social equity,
and ensuring environmental sustainability.

Some of the key elements of such policies are:

Providing predictable and long-term policy signals to encourage innovation and investment in
climate-friendly technologies.

Using flexible policy measures to avoid locking-in technologies that may become inefficient
or obsolete in the future.
Putting a price on greenhouse gas emissions, for example through taxes or tradable permits,
to create incentives for reducing emissions and adopting low-carbon technologies.

Providing a mix and sequencing of complementary policy measures, such as subsidies, public
procurement, financing, standards and regulations, to overcome barriers to the development
and diffusion of breakthrough technologies.

Balancing the benefits of technology-neutral policies with the need to direct technological
change toward climate-saving trajectories, by diversifying the portfolio of technologies for
which support is provided and identifying general purpose technologies with environmental
benefits.

Supporting research and development in a broad range of fields, not just energy or
environmental R&D, and fostering international cooperation and knowledge sharing on
climate technologies.

Supporting international technology-oriented agreements as an important complement to

other international efforts, such as emissions-based agreements, and addressing issues such as
trade barriers and intellectual property rights.

These policies require coordination and collaboration among various actors and institutions,
both at the national and international levels, and involve multiple challenges and trade-offs.

The UN Framework Convention on Climate Change (UNFCCC) has established a

Technology Mechanism to facilitate technology transfer and innovation for low-carbon
development, consisting of two bodies: the Technology Executive

However, there is still a gap between the original ambitions and the actual outcomes of this
mechanism, and more efforts are needed to enable developing countries and least-developed
countries to access and use climate technologies at scale.

The UN Framework Convention on Climate Change (UNFCCC) has established a

Technology Mechanism to facilitate technology transfer and innovation for low-carbon
development, consisting of two bodies: the Technology Executive Committee and the
Climate Technology Centre and Network.
However, there is still a gap between the original ambitions and the actual outcomes of this
mechanism, and more efforts are needed to enable developing countries and least-developed
countries to access and use climate technologies at scale.

Instead of uniform policy strategy, heterogeneous solution which integrates technology

transfer issues at various levels of public policy: -

In the matter of Trade Policies, the USA and the European Union are steadily strengthening
IPRs and eroding the TRIPS flexibility by including “TRIPS – Plus” provisions. Such
instances are: -

⦁ Extension of patent protection

⦁ Broader patent ability

⦁ Patent re – registration “Ever greening “for different usage of innovation

⦁ Regulatory Linkage: Preventing licenses from entering markets

⦁ Improved data Exclusivity provisions

⦁ Treatment of IPRs as investments

⦁ Greater Deference

⦁ Creation of dispute settlement mechanism

References:

1. K. Ravi Srinivas Climate Change, Technology Transfer and Intellectual Property Rights,
RIS DP # 153. April 2009

2. Mathew Littleton the TRIPS Agreement and Transfer of Climate Change Related
Technologies to Developing countries, Oct. 2008, DESA Working paper.

3. Zaker Ahmad Climate Technology, Trade, and the Doctrine of Common Concern,
2021, DOI: 10. 1163

4. Fordham International Law Journal Vol. 22. 2096

5. Koshkina A Farah P. D.

Ibrahim I A Trade in Clean Energy Technologies: Sliding

from Protection to Protectionism through obligations for Technology Transfer in Climate
Change law, or vice versa.

Journal of World Energy Law & Business 2020, 13, 114 - 128

6. Less C. T.

Mc Millan S. Achieving the Successful Transfer of Environmentally Sound Technologies:

Trade Related Aspects.

OECD Trade & Environment Working Paper No. 2005 – 02

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