The Structuring of a Second-Tier Protection Regime Designed to Promote Innovations of Small and Medium-Sized Enterprises in Developing Countries within the South Asian Regions; with Particular Emphasis on Sri Lanka

Punchi Hewage Nishantha Sampath

In a knowledge-based economy, intellectual property (IP) is considered a tool for technological and economic development. The protection of IP is one of the building blocks of national innovation policies in many countries. Innovation is not necessarily lacking in developing countries; however, harnessing innovation to generate wealth is a huge challenge for many of those developing countries. This is true, without exception, to the South Asian region. A closer perusal of the innovation climate in the Asian region reveals that there is an innovation gap between South Asian and South-East Asian countries. This in turn mirrors a protection gap in the existing patent laws and policies. Arguably, the South Asian region has failed to address the issue of improvement innovations and falls short in providing them with an adequate protection mechanism. The issue of protecting sub-patentable innovation is discussed cursorily though it warrants the serious attention of policymakers by reason that they are vulnerable and open to unfair copying and misappropriation. It has been proved beyond doubt that many developing countries including the so-called "growth miracles" such as the East Asian fast-growing countries have largely benefited from incremental innovation than by radical innovation. There is a need therefore to introduce a second-tier protection regime for the countries in the South Asian region. Moreover, the recent scholarship in the area has suggested that in absence of such protection, there would be no incentives for innovators to invest.

A Utility Model System offers a cheap protection regime for minor and incremental innovations which would not usually fulfil strict patentability criteria. This protective scheme is primarily aimed at protecting smaller technical innovations of a shorter lifespan. On the other hand, utility models could effectively be used to stimulate local innovation in developing countries in the South Asian region in particular those that are predominantly created by small and medium-sized enterprises (SMEs). This by no means denies that larger enterprises may benefit from this system even though the utility model system targets a different class of user. It has also been observed that most of the innovations based on traditional knowledge may effectively be protected under the utility model system if they are given modern technological touches. There is persuasive evidence from developed and emerging-market countries that a carefully designed second-tier protection regime can improve the environment for local industries and facilitate a speedy economic growth. Indeed, both a patent and the utility model system can exist in parallel and are necessary to promote innovation. Most remarkably, the utility model system can either be used as an important supplement to existing intellectual property rights or be complementary to each other. The doctorial thesis aims at showing that this model is well-suited for developing nations in the South Asian region which largely relies on small and medium-sized enterprises. This study will mainly be limited to three leading jurisdictions in the South Asian region, namely Sri Lanka, India and Pakistan.