IPR and Innovation : A Tete-a-tete with Mr. John Matheson

Mr John Matheson, former General Counsel, Global Public policy at Intel, Singapore delivered a special lecture on Trade secrets—emerging dynamics in the current scenario” on the 26th of July,2016. The Lokniti team caught up with him afterwards for his insights on the IPR regime and more.

Lokniti: There have been controversial allegations against the mechanisms and secrecy with which trade negotiations are carried out, and this raises concerns about the surrendering of a country’s sovereignty to these corporations who will carry out dispute settlements. What is your take on these concerns?

JM: There is a very formalised process with how USTR works with businesses and with trade associations. They have a very good grasp of what businesses want in trade agreements. Of course, they don’t always agree with them but they know what businesses want. I would contrast that to RCEP. It seems very surprising to me that Indian companies are not more active in working with the trade representatives to try and get strong language in trade agreements. But it is going to help Indian companies in those areas if trade agreements apply. And it might simply be the immaturity of the system that that type of import has not been catered for in the past (sic).

Lokniti: Or is it a lack of transparency of what has been pushed and what has not?

JM: Well, it could be

Lokniti: Do you feel it is a deliberate attempt at maintaining that lack of transparency?

JM: Well, I can’t say it is deliberate. It might simply be the history of how things have always been done.

Lokniti: Just a norm?

JM: Which is a norm, maybe, a norm that is way out of date. Because as I mentioned in old days, trade agreements were simple documents about terrorists mostly and now because it is so expensive covering all areas of commerce, you do wonder whether the government is sufficiently familiar with what industry wants to actively represent at an international forum.

Lokniti: There is an over-reliance on regional cooperation when it comes to trade secrets protection. For example, the 12 countries of Trans-Pacific Partnership (TPP) and the ASEAN countries have negotiated and agreed upon trade secret protection. How difficult it is to agree on a global legal policy framework, on the lines of WIPO or WTO for safeguarding trade secrets?

JM: Well, the more people you have around the table, the more difficult it is to get them to agree. So, obviously at the multilateral trade level and particularly at the WTO when there are so many countries and so many different views, it is going to be a long time before we can make any substantial progress beyond TRIPS. I think TRIPS will be the ground rules for IP for a long time to come. But, because it is so difficult to get change at that level, it has to be done at the regional level like TPP or at the bilateral level, where countries like the United States and South Korea are coming to an agreement on issues bilaterally that involve substantial reforms. But, the smaller the grouping is, the easier it is. So, I don’t think we will be getting any answers from Geneva. It has to be driven more locally.

Lokniti: With regards to the Cyber-security issues, the threat of hacking is always impending. How do you think the trade secrets could be protected in such a scenario?

JM: Well, there is an interface between trade secret protection and hacking. In jurisdictions where hacking can be done without breaching the domestic wall, there it may be that trade secrets provision assisting or making it easier. But, most countries have computer crime movers in place. But, they are broad and designed for so many different things. It makes it really complex to detect issues specific to hacking, such as where it was done, and where the perpetrator is located. A trade secret law might put the needle in the right direction but certainly, that won’t be the sole solution.

Lokniti: There are serious global challenges, such as climate change, which necessitates the free trade of knowledge, skills and technologies, how do you think the IP regime should respond to such global challenges?

JM: There is always going to be a tension and we have seen this in pharmaceuticals where it costs billions of dollars to produce drugs. The drugs are very expensive and the people who need it live in the third world. Such a tragedy is very difficult to resolve from a legal standpoint because everyone wants to see low priced medicine reaching the right people. And we got the same potential conflict in green energy, but it should be easier because Governments need to incentivise their own people to use renewable energy.

So, I think the government has a role to play in helping to resolve the conflict. You’ve got to be careful to not stick to compulsory license solutions. The compulsory license is the strongest police power that a country has over a company and it leads to very quick erosion of trust in the legal environment. So, companies would be less inclined to invest in a country that nationalises their IP. So, I would encourage countries not to look at that solution and look at government and centres working with IP owners as part of the solution.

Lokniti: Don’t you think without government intervention, innovation will be stymied? People will prefer business-as-usual and there will be less focus on research and development of new technologies?

JM: Well, I think India, like everywhere else has to start innovating. Intel, as a company, when it was starting off had a major problem with IBM. IBM owned all the IP, and as a small company, Intel’s strategy was to start on a small, creating their own innovations and to innovate around IBM’s IP. So, I think India has got the capability of doing that. In green energy, for example, where so many IP owners want to be in the market, India is in a very good negotiating position. To be working with the owners of the IP and undertaking joint developments.

You know, if a company wants to be in India and you’ve got strong research capabilities here, it is a perfect opportunity for a joint development in this environment where you’ve got so many smart people and a great need for technology. So the solution requires some creativity. It’s not just blaming the big business for having all the IP. I would say stop feeling sorry for yourself and go and do something about it.

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