-developing economies

3 JUSTIFYING UTILITY MODELS The traditional premise within market economies is that patents are necessary tools as they confer a protective buffer on inventors against other competitors. The consequent societal welfare is assured: labour is rewarded, the invention is divulged to the public, further technological innovation is stimulated, and a public knowledge base is incrementally strengthened, upon which a society’s future technological progress will be built.18

Nevertheless, this utopian vision only materialises within certain political, economic and social environments, where intellectual property rights are allowed to act as competitive boosts to innovation and growth. IPRs are often seen as being ‘a drain on learning and source of market power that is inimical to development’.19 Policy and economic rationales underpin the limits placed on national patent law, ensuring that not all inventive activities are embraced as being worthwhile of protection. Inventions must fulfil certain criteria under a rigorous examination procedure, while other types of subject matter are excluded ab initio from the patent regime so as to support complementary, or sometimes conflicting, policies in maintaining the public domain, competition, health and education. It is now accepted that the monopoly privileges and exclusivity arising from patents invariably affect other public spheres, and the rigorous eligibility standards are essential to prevent excessive patenting.20

So how do we justify the introduction of a sui generis law that potentially undermines the strict demarcations of traditional intellectual property rights? Sui generis rights (such as utility model, design, semiconductor chip, geo- graphical indications or database laws) emanate from the inability of legisla- tors and jurists to stretch the existing three bulwarks of the intellectual property regime to accommodate new things to protect.21 The subject matter, criteria and scope of protection of sui generis regimes inevitably reflect copyright, patent or trade mark characteristics, or a mixture of all three types of intellectual property rights. For instance, the novelty criterion betrays the patent origin of plant variety and utility model laws. Geographical indication laws, with their roots in trade protectionism and product identity, adopt a trade mark approach, protecting signs of distinctive qualities and geographical origins. Nevertheless, a constant battle is fought as to the rationale and scope of such rights. In our case, the questions are varied: Should utility model laws protect all innovations which show a modest level of inventiveness and novelty? Should utility model laws be confined to minor innovations in the field of engineering and construc- tion, and exclude more ‘advanced’ technologies such as computer programs, biotechnology and pharmaceuticals? The following discussion explores such issues by focusing on three main rationales for a sui generis utility model right: (1) ameliorating the defects of the national patent system; (2) preventing free riding copying and encouraging innovation, especially in relation to SMEs; and (3) improving the legal environment in developing countries.

3.1 Curing Patent Law In 1843, the first known second tier patent system was introduced by the United Kingdom’s Utility Designs Act in response to criticism of the Victorian British patent system as being administratively complex and causing insuperable costs. The law protected the ‘shape or configuration of useful articles of manu-facture’.22 In a similar vein, the German utility model system emerged in 1891 as a backlash against the stringent German patentability standards, especially its level of inventive step.23 Arguably, the introduction of a sui generis law was perhaps the inevitable solution in these two newly industrialised nations in order to resolve the deficiencies of their patent systems, especially in terms of cost, speed and ease. It is noteworthy that British history continued to show that an ineffective utility model system which fails to grapple with the patent problem is doomed to failure, and by 1919 the British utility model experiment had concluded. Instead, in 1989, Britain eventually dealt with the lacuna in protecting minor innovations through its own national sui generis unregistered design right – a system which protects functional three dimensional shapes, using much lower criteria.24

However, from the German perspective (and indeed, as we see below, from the East Asian one), it is unarguable that a sui generis regime is useful in resolving or avoiding the deficiencies of the current patent system, in terms of cost and speed of securing protection and in harnessing and diffusing indigenous technologies. One commentator lists the advantages of utility model registration, in comparison to patents in Germany, as including lower costs, lower thresholds in relation to novelty and inventiveness, quicker registration procedure and strategic means of obtaining full protection during the inter- mediate period between publication and actual grant of a patent.25 This type of reasoning can be easily extrapolated across other established, developed countries