Competition Law, Technology Transfer and the TRIPS Agreement

Competition Law, Technology Transfer and the TRIPS Agreement

Implications for Developing Countries

Tu Thanh Nguyen

The book investigates competition law and international technology transfer in the light of the TRIPS Agreement and the experience of both developed and developing countries. On that basis, it draws relevant implications for developing countries.

Chapter 3: Application of Competition Law to Technology Transfer in Developing Countries

Tu Thanh Nguyen

Subjects: law - academic, competition and antitrust law, intellectual property law, international economic law, trade law


3.1 3.1.1 BACKGROUND Overview Technology, as one of the three main forces driving globalization,1 is a vital factor in economic growth, not only in the developed but also in developing countries. It provides ‘a solid potential for improving the well-being of all peoples’.2 However, the level of technological development in developing countries is still low. There is a large technological gap between the developed and developing countries. This gap tends to be increasingly widening as the result of rapid technological advances in developed countries and relatively slow advances in most developing countries.3 Consequently, most developing countries are net importers of technology. The majority of relevant technology currently is the property of MNCs, which can be transferred only through negotiated commercial agreements. On the one hand, the MNCs in principle offer good opportunities for developing countries to gain access to technology. On the other hand, these firms, if not controlled by appropriate legislation in host countries, often try to maximize the profits of technology transfer to developing countries by (i) refusing to work, (ii) refusing to license, (iii) charging excessive prices for technology 1 Technology, broader political changes and economic policies are the main forces that have driven globalization. See WTO (2008), World Trade Report 2008: Trade in a Globalizing World, Geneva: WTO, p. 20. 2 UN Declaration on the Establishment of a New International Economic Order, Resolution 3201(S-VI) of 1 May 1974, A/RES/S-6/3201, para. 1. 3 WB (2008), Global Economic Prospects 2008: Technology Diffusion in the Developing World,...

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