449. Brazil would like to thank the US delegation for proposing this agenda item and welcome the debate on IP and Innovation: University technology partnerships.
450. At the outset, it is important to highlight that patents are far from being the single element driving innovation. It is only one in a larger mix of different tools that promote innovation. The Global Innovation Index, for example, refers to the importance of linkages and the right infrastructure for innovation, to the fact that collaboration, the flow of ideas among different innovation players, and access to knowledge as important ingredients of innovation.
451. My first comment is that any in-depth discussion on this topic must be based on the realization that the granting of exclusive IPRs can only be justified to correct a potential failure in the markets of technology and knowledge.
452. That correction of situations of market failure entails costs for society. By establishing monopolies, however provisional they may be, protection of IP can impair market efficiencies in allocating production factors and resources. To compensate for the possible costs of misallocation, the IP system demands, in return for the granting of exclusive or monopolistic IPRs, full disclosure of the know-how of the protected invention in such a way that society as a whole may benefit from it and build upon it.
453. Regarding the efforts to balance rights in some international models of university technology partnerships, one example that can be mentioned is the march-in rights mechanism. This mechanism is applied in cases where a public funded invention has not been adequately developed or applied to inventions within a reasonable time required by the government allowing for non-exclusive licensing.
454. This essential trade-off to the patent system has another component: to be able to apply for it, inventions must be, according to Article 29, novel, useful and non-obvious. Not all innovations or inventions should be entitled to patent protection. This is clear enough. However, what exactly should be protected and how to translate the three conditions for patent application in Article 29 into national legislation and regulations remains one of the most intractable and divisive issues whenever one discusses the current international patent system.
455. Against this background, the greatest challenge for public policy makers in any country is arguably how to design a theoretically "optimal" system that would be capable of generating incentives for investment in innovation while at the same time minimizes losses caused by the granting of IP rights.
456. Having said that, I would like to refer to Brazilian national experience in University Technology Partnerships. Since the adoption of the Innovation Act in 2004, all the Brazilian universities and research institutes are encouraged to establish Technological Innovation Centres (the so-called NITs) with a view to manage their innovation policies. In accordance with the Innovation Act, the NITs are responsible for (a) safeguarding institutional policies related to the fostering of creations' protection, licensing, innovation and transfer of technology; (b) evaluating and classifying the results obtained from research activities and projects developed by the institution; (c) assessing the convenience and promoting the protection of the inventions developed by the institution; and (d) monitoring the processing of applications and the maintenance of IPRs of the institution.
457. The NITs have an important role in raising awareness on how to innovate and protect inventions. The NITs are also responsible for managing the partnerships between the institution and the private sector, fostering public-private cooperation.
458. After 10 years, the NITs still face some challenges, but it is important to note that they are changing the way universities and research institutes work in Brazil. In 2012, 176 institutions participated in a broad research with a view to evaluate the implementation of the Innovation Act. The results were very positive: 116 institutions already completed the establishment of their NITs and 49 are completing the process. Before the Innovation Act, only few institutions had a structure similar to a NIT and they were concentrated in the most developed regions of the country. The establishment of the NITs was followed by the growth of investments in research and development in such institutions and of the patent applications submitted by them both in Brazil and abroad. In fact, in 2012, three of the top five spots in PCT patent applications in the Brazilian Patent office (INPI) were occupied by Brazilian Universities.
