550. Brazil would like to thank the delegations of the United States, the European Union and Switzerland for proposing this agenda item and welcomes the debate on IP and innovation: promoting awareness; case studies. Raising awareness of the tools offered by the IP System to incentivize innovation is a very important goal of public policies.
551. At the outset, as it was also stated by other delegations, it is important to highlight that patents are far from being the only element driving innovation. They are only one in a larger mix of different tools that promote innovation. Having the right infrastructure for innovation, collaboration on research, the flow of ideas among different innovation players, and access to knowledge are often more important ingredients of innovation.
552. My first comment is that any in-depth discussion on this topic must be based on the realization that the granting of exclusive intellectual property rights can only be justified to correct a potential failure in the markets of technology and knowledge.
553. That correction of situations of market failure entails costs for society. By establishing monopolies, however provisional they may be, protection of intellectual property can impair market efficiencies in allocating production factors and resources. To compensate for the possible costs of misallocation, the intellectual property system demands, in return for the granting of exclusive or monopolistic intellectual property rights, 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.
554. This essential trade-off to the patent system has another component: to be able to apply for protections, inventions must be, according to Article 27 TRIPS, 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 27 into national legislation and regulations remains one of the most divisive issues whenever one discusses the current international patent system.
555. Against this background, the greatest challenge for public policymakers in any country is arguably how to design a theoretically "optimal" IP system that would be capable of generating incentives for investment in innovation, while at the same time minimizing losses caused by the granting of IP rights.
556. Having said that, our delegation would like to mention one sucessful case study of innovation and its interesting relation with the IP System. In 2003, a group of Silicon Valley engineers founded a company to develop electric vehicles. Today, after only 11 years since its start, that company employs more than six 6,000 workers.
557. One of its success stories is a sports car that can go from 0 to 60 mph, 0 to almost 100 km/h in 3.7 seconds and travel for 245 miles or almost 400 km per charge.
558. In 12 June, one day after the conclusion of our last TRIPS Council, the CEO of the company made public he would radically change the IPR policy in order to foster the access to their technologies and expand the usage of electric vehicles. They started an open-source policy aimed at strengthening the position of that automotive company and spreading the usage of their technologies. According to the words of the CEO:
"(...) we felt compelled to create patents out of concern that the big car companies would copy our technology and then use their massive manufacturing, sales and marketing power to overwhelm us."
Still according to him:
"Technology leadership is not defined by patents, which history has repeatedly shown to be small protection indeed against a determined competitor, but rather by the ability of a company to attract and motivate the world's most talented engineers."
559. With that, we would like to state once again that national policymakers have over their shoulders the responsibility of creating the necessary balance in the IP system that can foster innovation, avoid unnecessary barriers to trade and incentivize the adoption of the latest technologies. In performing this task, it is necessary to bear in mind the experience of innovators and their interaction with the patent system.
