The Synergy of Intellectual Property and FDI as Catalysts for Transformative Poverty Reduction

Paper Details 

Paper Code: RP-VBCL-14-2025

Category: Research Paper

Date of Publication: April 20, 2025

Citation: Mr.Sayed Qudrat Hashimy & Prof. (Dr.) MS Benjamin, “The Synergy of Intellectual Property and FDI as Catalysts for Transformative Poverty Reduction", 2, AIJVBCL, 182, 182-200(2025).

Author Details: Mr. Sayed Qudrat Hashimy, Ph.D. Scholar (Law), Department of Studies in Law, University of Mysore, India.

Prof. (Dr.) MS Benjamin, Dean, Faculty of Law, Chairman and Professor, Department of Studies in Law, University of Mysore, India.

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ABSTRACT

Poverty remains a pervasive global issue, affecting millions and prompting sustained efforts by nations and international organizations to eradicate it. Yet, a fundamental question persists: who truly benefits from global poverty alleviation initiatives, and what role can intellectual property (IP) play in this process? This article examines the potential of intellectual property to contribute to poverty reduction, focusing on how international investment in IP could foster innovation in vital sectors such as affordable housing, healthcare, clean water, and sustainable agriculture. The relationship between intellectual property and poverty is not merely theoretical but has real-world implications for marginalized populations. This study explores how foreign direct investment (FDI) in the intellectual property domain can serve as a tool for poverty alleviation, particularly for Least Developed Countries (LDCs) under the TRIPS Agreement. It also considers the IPR policies of the United Kingdom, the United States, and India, to understand how inclusive IP investment can help break down barriers to poverty. By investigating the interplay between intellectual property rights (IPR) and sustainable development, this research underscores the potential of IPR to improve socio-economic conditions. It ultimately advocates for a more equitable global IP policy framework that empowers the world’s most disadvantaged communities.

Keywords: Economic Growth, Intellectual Property Rights, International Investment, Poverty Alleviation, Technology Transfer, Sustainable Development and IPR and Human Development.

Introduction

Poverty can take many forms, including intellectual poverty, water poverty, and it varies from nation to nation and location to location. The World Bank states that poverty includes things like lack of food, lack of housing, sickness, lack of access to employment and education, and fear of what the future holds.  In response to this challenge, the United Nations developed the Millennium Goals and, later, the Sustainable Development Goals, which are ambitiously set by the United Nations and consist of 17 goals that were started in 2015 with the aim of achieving the desired outcome by 20230.[1] Ending poverty is the core SDG, and it is the focal point of all other SDGs, including SDG 2 on hunger.[2] In order to meet the fundamentals, it supports economic opportunity and education.  The question is, how might IPR help reduce poverty?   The World Bank reports that 700 million people, mostly women from South Asia and Sub-Saharan Africa, live below the poverty line.[3]Intellectual property strategy is crucial for agricultural output and affordable medical diagnostics. It enhances rights of common people by obtaining patents and enhancing the rights of artists and innovators. IPR law addresses global issues like poverty alleviation and sustainable development, while protecting artists and innovators. IPR is a divisive topic in developing nations, where activists and least developed nations contend that antiretroviral medication patents render AIDS treatments prohibitive in low-income regions.  Pharmaceutical firms contend that wealthy nations should bear the burden of providing vaccines and medications to the underprivileged, and that the issue is elsewhere.

 Concerns regarding traditional knowledge, health, education, research, and plant breeders' rights are among the main issues in the conflict between developed, developing, and even least developed nations.  While least developing countries were permitted to prolong the transition period until 2016 and now it is up 2034,[4] the WTO TRIPS agreement mandated that all WTO members have at least rudimentary IPR protection by 2006.[5]Health policies often make sense in developed countries due to the income generation and resource availability of individuals. Intellectual Property Rights have been primarily focused on the availability of drugs for AIDS and other epidemics in developing nations. Pharmaceutical prices have remained high due to patents obstructing competition from generic medicine producers.[6] Brazil and South Africa are granting compulsory licenses to generic manufacturers, bypassing patents at nominal costs.[7]IP rights have sparked social justice issues, including restricting access to educational resources, influencing farming methods, and leading to "biopiracy," in which multinational businesses use indigenous knowledge to obtain patents.

The Notion of Intellectual Property

The phrase "intellectual property" suggests that an author or inventor owns an intellectual asset.[8] However, from the perspective of the general public and consumers, copyright is a grant of a limitation on commerce, and patent rights are a grant of a monopoly.[9] Only inasmuch as the monopoly and restriction are required for the general welfare can they be justified. It is believed that in order to guarantee that an author will continue to publish and an inventor will continue to invent, patent and copyright protection are required. It is currently impossible to assess the validity of this assumption. Curiosity plus the advantage of being the first in the field might be enough to guarantee that study and discoveries would go on. The experiences of hospitals and war are more responsible for medical advancements than the industry,[10] which constantly bombards practitioners with incentives and marketing materials.IPR includes all forms of human creativity, including inventions and literary works.  IPRs offer economic and goodwill benefits, much as patents and trademarks.  For the protection of creativity and the advancement of science and the arts, these rights must be protected.It gives brilliant brains a framework, predictability, and structure so they can focus on what they do best create and invent. Through the threat and actuality of trade sanctions and assistance withdrawal, the Agreement on Trade-Related Aspects of Intellectual Property Rights (the "TRIPS Agreement") was reached.[11] Similar techniques are currently being used to enforce the TRIPS Agreement.[12]For instance, poor nations are only able to purchase half of the medications they desperately need and only half of the books and tuition needed to end illiteracy.

IPRs are territorial, private rights governed by national legislation.[13]  They are exclusive to the state's borders and separate from those bestowed by other states.  The national legislation that establishes these rights strikes a compromise between the rights granted to the IP owner and the need for societal benefits. Globally, different IPR are covered under varied levels of complexity and comprehensiveness by international IP treaties and trade agreements. TRIPS agreement creates the global minimum standard that all WTO members must adhere to.  The involvement of African nations in bilateral agreements and multilateral accords pertaining to intellectual property rights varies greatly as well.

The Hula Hoop of SDG and IPR

The Millennium Summit of 2000 aimed to eradicate extreme poverty, achieve universal primary education, promote gender equality, reduce child mortality, improve maternal health, combat diseases, and foster global development partnerships.[14]However, underprivileged countries face health risks due to inadequate diet, polluted water supplies, and limited access to healthcare services.[15]SDG 1 aims to eradicate poverty by providing clean water, sanitation, and financial resources. Poverty hinders access to education, skills, and employment opportunities, affecting all SDGs, including SDG 1, SDG 2, SDG 3, and SDG 4, which focus on poverty alleviation and sustainable livelihoods.[16]The UN Millennium Project identifies six main barriers to healthcare access, insufficient national commitment, inadequate human resources, insufficient international financing, lack of coordination in international aid, the TRIPS agreement, and an inadequate incentive framework.[17] These issues threaten initiatives aimed at improving health systems and healthcare in developing nations,  access to essential medications and immunizations is the core aim of the SDG 3.[18]The International Covenant on Economic, Social, and Cultural Rights (ICESCR) is a crucial international human rights document that balances inventors' rights with society's interests in intellectual property.[19] Article 15 mandates “States Parties to uphold moral and material interests from scientific, literary, or creative creations, while acknowledging everyone's right to benefit from scientific advancement.”

The Intricaciesof Poverty and IPR

The IPR purpose is not to directly advance human development or happiness. The monopolies of the developed countries contribute to a society in which half of the population is affluent and the other half is famished.[20] IPR is commonly used to safeguard the rights of creators, inventors, and investors. The protection of indigenous people's rights to their traditional knowledge is greatly aided by IPR. IPR can stimulate economic growth, progress, and economic activities, as well as be a commercial strategy for corporate development. It can also help generate economic income and job opportunities.Most developed countries need national awareness of intellectual property rules to understand international treaties' implications, leverage flexibilities, stimulate creativity, invest in research, transfer knowledge, and benefit from innovation.[21]Patents are the only option for protecting innovation in low-income countries. Utility models, copyrights, trademarks, industrial designs, and GIs may be more suitable tools to alleviate poverty. Enhancing national IP systems, utilizing legislative flexibilities, scaling up technology transfers, and accounting for innovation in informal economies are essential steps.[22] These measures can encourage innovation, investment in R&D, and equitable distribution of social gains. IPR in least developed countries boost competitiveness, innovation, trade, and investment through various types of patents, trademarks, and copyrights, promoting risk-taking and cultural preservation.[23]

The goals of the TRIPS Agreement and the ambitions of the Sustainable Development Goals are still unattainable in countries where the legal system is closely linked to socioeconomic stability and in which others are trapped in the chaos of "banana republic" status.[24] This disparity widens the gap between potential and actuality and impedes advancement while also intensifying the poverty cycle. In these settings, structural flaws that sustain inequality and stagnation frequently eclipse the goals of fair growth and justice.

The Motto of TRIPS Agreeement

The TRIPS Agreement, adopted in 1994, has long been attacked for dividing the international community among those nations that have intellectual property rights and those that do not.[25] While industrialized nations, with their robust economic frameworks, have disproportionately benefited from the TRIPS provisions, developing nations and the least privileged statessuch as Afghanistan, Yemen, Syria, Palestine, South Sudan, and other conflict-affected statesare largely excluded from fully utilizing the potential of IPR. Many individuals, especially farmers, are unaware of protections like breeder rights and geographical indications, and the concept of IPR is often unfamiliar to the general public in these war-torn countries.The harsh truth is that people suffer from hunger and great poverty in many locations, and basic rights are seldom upheld. A persistent problem in Sub-Saharan Africa,[26] where millions of people are living with HIV and the COVID-19 pandemic's aftermath, is availability to necessary medications.[27] For instance, there is less space for encouraging invention or creativity, and Afghan girls and women lack access to basic immunization programs.

The IP monopoly widens the disparity in access to technology and education, further dividing wealthy and developing countries. For instance, because of the industrial and financial advantages possessed by industrialized countries like the United States, the state-of-the-art technology that are accessible in Henrico, Virginia, could remain entirely unattainable in areas like Mysore, Karnataka. These circumstances unequivocally demonstrate that the TRIPS pledge that intellectual property protection would benefit all nations, not just developed ones, was not kept.The pandemic is a prime example of how TRIPS did not live up to expectations. The difficulty to get affordable medications caused millions of deaths under COVID-19, and the intellectual property system exacerbated this injustice.[28] The lifetime plus seventy-year copyright rights further restrict access to information. The inability to get information in a way that meets their needs makes this particularly true for people with impairments.

Even while prestigious academic publications from institutions like Oxford, Cambridge, and Harvard significantly enhance science and technology, their costly costs prevent the average person in developing countries from affording them. This intellectual property structure may promote innovation, but it also reinforces structural inequities. This gap illustrates the underlying issue: the North-South divide has been strengthened rather than eradicated by the international system of IPR. While the citizens of impoverished governments continue to be denied access to the benefits of scientific and technical advancement, the IP system has disproportionately benefited affluent individuals and multinational enterprises. Developing nations are starting to adopt IP tactics, as seen by the concept of IP licensing, which is evident in nations like India where surnames are trademarked. These initiatives are often insufficient, however, since the 1995 adoption of the TRIPS Agreement only served to complicate an already complicated system that was influenced by earlier frameworks such as the Paris and Berne Conventions. The fundamental differences in IP access throughout the world have not been resolved by the harmonization brought about by TRIPS, which places an emphasis on national treatment and most-favored-nation status.

Therefore, closing the loopholes in the system is a prerequisite for using intellectual property as a tool to reduce poverty. IPR should be seen as a catalyst for human development rather than just a means of making money if it is to help less developed countries. To educate the public about the role that intellectual property may play in advancing economic development, governments must fund IPR awareness initiatives. The IPR system must, above all, be socially accountable, giving public benefit and human development precedence above private interests. Only then will intellectual property be able to fulfil its actual function, which is to assist the world's poorest countries escape poverty and promote a more creative and just society.

TRIPS Agreement and LDCS Tranistion to overcome

Economic development in LDCs is hampered by structural limitations, yet IP protection strategies successfully safeguard innovations, encourage sustainable production, improve brand recognition, and increase sales and profits.[29] This research focuses on four industries financial services, tourism, mining, and pharmaceuticals that have substantial and underutilized development potential for LDCs. LDCs must improve their domestic intellectual property (IP) strategies, frameworks, and institutional structures in order to better handle these challenges and implement IPRs. They must also make sure that these plans are in line with local demands and conditions, economic structures and development levels, existing skill sets, and educational capacities.  In addition to these initiatives, establishing critical minimum levels of technological and productive capacity can fully utilize both formal and informal IPRs, as well as the flexibilities already provided by the WTO Agreement on Trade Related Aspects of Intellectual Property Rights and other international IP regulations and frameworks. Additionally, strategic IP regimes may help LDCs draw in new technology and foreign direct investment.  Knowledge-based businesses are more likely to locate in low-income countries when intellectual property rights is in place.[30]

By empowering inventors to market their products, raise R&D money, and draw in investors, IPRs improve the investment climate for multinational corporations, draw in foreign investment, and promote innovation in low-income countries (LDCs).Additionally, they support the broader innovation ecosystem by granting temporary exclusive rights to technologies and artistic creations.  Obtaining licenses from other companies may benefit inventors financially and promote business-innovator partnerships.  Because it provides financial incentives in the form of royalties, supports marketing and R&D investment, and promotes healthy competition, trademark protection is essential for promoting branding and market completeness in LDCs. In the light industrial and artisanal manufacturing sectors, industrial design protection in LDCs fosters innovation and creativity.  Because legal protections stop illegal usage of original designs, money may be spent on new designs, which fosters collaborations, partnerships, and the sharing of information.  In addition to preserving traditional patterns and promoting cultural and artistic legacy, protection may also assist the environment. For items that don't fit the criteria for patentability, utility models are essential for safeguarding small inventions and functional enhancements.  Without utility models, local product innovationwhich is crucial for production and knowledge developmentwould not be as attractive to both international and domestic investors.[31]

 Copyrights are essential for protecting artistic works in creative fields including publishing, music, and film. They offer artists financial stability and reward, promote freedom and creativity, and stimulate investment in creative creations.[32]  Businesses and entrepreneurs in LDCs are successfully utilizing intellectual property protection to safeguard concepts, promote eco-friendly production, build brands, boost sales, and enter new markets.  With the 2010 Nagoya Protocol seeking to prevent biopiracy and advance fair benefit-sharing,[33] genetic resources (GR) have been a subject of international discussion for more than a decade.[34]  Legal advice specific to the country and support for indigenous and local people seeking to enforce pertinent laws in developed countries are among the substantial capacity building assistance required to ensure the Protocol's early adoption. 

Intellectual Property Disparity between Developed and developing States

The 19th century marked the development of intellectual property rights (IP) to solve social problems such as poverty, employment, transfer of technology, climate change, sickness, ageing populations, and energy security. [35]The global intellectual property system has to change to meet these issues as technology develops. The pandemic swine flu has brought attention to the need of an adaptable system for providing medications to those who are in need. Presently, the IP system encourages the creation of novel medications with the largest potential profit, but it is ineffective for illnesses like cholera, bilharzia, and malaria that strike impoverished nations.  Therefore, the study highlights the strategies employed by the United Kingdom, the USA, and India in addressing poverty through the strategic use of intellectual property rights (IPR) as a means to attract investment and promote export-driven growth.

United Kingdom

In order to support patent pools for the development of novel medications to treat neglected illnesses, the UK is collaborating with GlaxoSmithKline and the World Health Organization on its Global Strategy. This action is a component of the IP system's endeavors to encourage the exchange of technology and information. Access to medication may also be supported by philanthropy. The Fureai Kippu system in Japan is an example of how the internet can foster interpersonal relationships. New solutions that address garbage and encourage recycling may be developed with the help of the IP system. In order to combat climate change, technology transfer is essential since it gives developing nations access to current technologies and promotes more innovation. To guarantee that the advantages of cross-border cooperation are safeguarded and distributed, the UK is creating model agreements for cooperation on R&D projects with China. Prioritizing and processing patents that potentially have the greatest effect on combating climate change is one of the first initiatives the UK has taken to solve the worldwide backlog of patents. In an effort to shorten the time it takes for innovations to reach the market, the UK announced in March that patents for green technology will be expedited in the country. The UK must make sure that the most impoverished members of society profit from innovative concepts and technologies, and the global intellectual property system should be a component of the solution rather than the issue. Marginalized communities should have a share in innovative ideas and technology as part of an IP framework that addresses the demands of both urban elites and rural poor.

Everyone, affluent or poor, must be able to use the worldwide IP system. Technology has made phone calls cheaper, linked impoverished and rural areas, and made education more accessibleall of which are essential for bringing people out of poverty. Addressing poverty and fostering economic growth legitimizes the function of government and provides people a say in their own destiny. On the other hand, addiction and crime may take control when communities collapse, and IP crime requires advanced solutions.In the end, it is in everyone's best interests to help poorer nations develop the ability to fight intellectual property theft. A Commission on IP and Development was established by the UK in 2002 to investigate issues related to traditional knowledge, commerce, health, and agriculture. To assist manufacturers in sub-Saharan Africa, sell and brand their goods and increase sales, the UK has funded initiatives in this region.Nonetheless, it seems that the IP framework often helps the rich. This may be changed by addressing the global intellectual property system and developing a global trade and development package that promotes free and fair markets. A trade system that helps individuals escape poverty is one way to do this, as is encouraging free markets and guaranteeing equitable access to technology, capital, and expertise.Many people find the existing copyright situation to be difficult to use and confusing, and intellectual property needs to be more relevant and understandable. This problem has prompted the UK to start a copyright review. Several million patent applications are pending processing globally, indicating that the global patent system is also having difficulties.

In order to address this backlog, there has to be more collaboration amongst patent examiners across nations.The IP system must also address certain requirements, such expanding the visually challenged population's access to copyrighted content. Examining our broader problems and how IP may assist address them is the goal of this conference.The Commission on Intellectual Property Rights (CPIR) has called for a relaxation of patent and intellectual property laws to help developing countries combat poverty and access technology, medicines, and research.[36]In addition to extending the TRIPS compliance date, the commission recommends poor nations to enact legislation allowing access to generic and inexpensive medications, barring diagnostic techniques from patents, and rewarding technology sharing with tax advantages..[37]LDCs are exempt from most elements of the Agreement except national treatment, most-favored nation treatment, and precedence of WIPO procedures. A special transition period has been granted for IP protection in the pharmaceutical industry, excluding LDCs from protecting patents and undisclosed information. Article 66.2 requires developed countries to provide incentives for technology transfer to LDCs and formal obligations for technical and financial assistance to facilitate the Agreement's implementation and strengthen national capacities for IP policy-making, administration, and enforcement.[38]

United States of America

The U.S. Constitution grants Congress the power to promote science and the useful arts through copyrights and patents. This utilitarian approach to intellectual property law encourages creators to produce new innovations that benefit the public good. However, US IP law often eschews moral considerations like justice and fairness. Copyrights and patents provide exclusivity, but they can inhibit innovation. IP regimes aim to balance rights given to creators with those available to the public. Knowledge and inventions play a significant role in economic growth, and the IPR regime indirectly affects growth by encouraging innovative activity and promoting total factor productivity improvements.[39]Intellectual property regimes aim to balance creators' moral and economic rights with society's needs. Patents and copyrights are justified by incentives and rewards for inventors, which benefit society. The WIPO links an equitable patent system to incentives for inventiveness, investment in industrial applications, and technology transfer.[40]

Plant patents have faced various arguments, including the "product-of-nature doctrine" and the unethical suitability of plants as subjects of patents.[41] The US Act 1930 established a new type of plant patent for vegetatively grown materials, but standard utility patents can now be obtained on plant types in the US.[42] The dispute about plant patent protection was finally settled in the US in 1985. India passed the "Protection of Plant Varieties and Farmers' Rights" (PPVFR) Act, 2001,[43] a sui generis system of plant variety protection, in accordance with the TRIPS Agreement and other policy developments.

India

India's market is unique in the globe because of its remarkable and economical use of information technology. Even the humblest traders in India use online banking and UPI (Unified Payments Interface), whether they be street food vendors, coconut water vendors, autorickshaw drivers, or small vegetable hawkers. Payments ranging from one rupee to one lakh, with no deductions, are now easy and reasonable thanks to this technological innovation, which has completely changed the way transactions are carried out. With its strong IP framework, developed nations such as the United States, on the other hand, require that transactions be made using debit or credit cards, which could not provide the same ease of use or cost-effectiveness. In order to align its market with the larger Liberalisation, Privatisation, and Globalisation (LPG) paradigm,[44] India, the world's largest consumer market, has welcomed foreign investment through joint ventures.

India suffers severe social problems even though its economy is one of the biggest and fastest-growing in the world. According to the UN, a sizeable section of the populationroughly 27%continues to live in poverty. Millions of people endure horrific living conditions, malnutrition, substandard housing, a lack of access to clean water, and hunger. Many people lack shelter, which emphasizes the country's glaring socioeconomic inequality.[45]

As regard to India as on November 2024 about 60 % of the Indian population is that is around 1.3 billion people live on less than 3.1. per person per day and 21% that is more than 250 million people survey on less than 2 dollar a day.[46] Today riches 10% people of India control 80% of the country’s wealth. According to survey conducted by Oxfam fighting poverty, the top own 58 % of the India’s wealth, whereas in US 1% of rich people owns 37% of the wealth.[47]

How to resolve this from the lense of creation of innovative activities IPR can be strategical tools to help over the problem by IPR mechanism to develop irrigation techniques for forming and resistance drought seeds in the prone areas, creation of affordable health diagnostic and treatment and it attracts foreign and domestic investor to scale these problems.

The Green Revolution in India has successfully ensured cereal crop food security, but the integration of agro-based technology remains a challenge.[48] To meet growing population and economic expansion, agricultural practices must be strengthened, including specifications for food production quantity and quality.[49] Intellectual property protection has been extended to various food and agriculture-related knowledge, materials, and products over the last two decades. However, ethical problems and patentability issues have led to significant changes in national laws and relevant laws. Disputes over farmers' lack of legal legitimacy and commercialization and industrialization strain biological diversity in agriculture. Funding agricultural innovations, enhancing genetic viability, and putting poverty reduction plans into action are all required to protect the intellectual property rights of different plant species.[50]Plant protection under IPR has been a challenge since the first generation of patent laws, with only a select group of inventions qualifying for patent protection. The Indian Patent Act, enacted in 1970, lacked protection for plant varieties and did not ensure farmers' rights.[51]Sui generis protection for plant breeders is weaker than patent protection, limiting economic use and encouraging commercial breeding activities from public sector or foreign research organizations.

At its core IPR has the protentional to shape solution they can uplift million from the shackle of poverty.IP is not just about the patent or trademark protection in its conventional sent is about empowerment of ideas, techniques, technologies and innovation that can make tangible difference in the public life and welfare of the country.  The development of low-cost housing technologies, affordable medical treatment, agricultural innovation and water purification solation all has been and possibly made though IPR system protection investment, creativity and scale up the question is how to emancipate or deliver people from poverty? how to eradicate poverty? what mechanism or strategy are available to improve socio economic conditions of the poor people?One of the means and way is IPR such as patent, trademark, trade secret, and Industrial designs, IPR crates opportunities for the creators or innovator to commercialize their work and they can market it globally, attract the inflow of capital from abroad, generate employment or job and promote social development of individuals and thereby IPR contributes for eradiation of poverty. IPR paly a very important role in poverty eradication by encouraging innovation promoting growth and facilitating access to new technologies.

Intellectual Property and Development

In order for developing nations to acquire innovations, alleviate poverty, and foster development, an effective IPR framework is essential.[52] There is conflicting information regarding the impact of IPR protection on trade flows into developing nations. In the majority of developing nations, there is typically no positive correlation between foreign investment and IPR protection. Most of the data on IPRs' impact on investment and commerce pertains to emerging nations with advanced technology.[53] In the short and medium term, the advantages of trade and investment are not likely to outweigh the disadvantages for many developing nations. A significant concern in contemporary global society is intellectual property, especially as the world transitions to a knowledge economy.[54] By enabling innovators to limit the use of their knowledge, the intellectual property regime encourages innovation. TRIPS, a global agreement on intellectual property rights, primarily benefited industrialized nations by providing broad access and incentives for future developments. However, developing nations face concerns about administrative costs and long-term benefits.[55] There are grounds to believe that the implementation of IPRs improves growth prospects overall. Higher rates of innovation drive growth at the domestic level, but IPRs are also linked to increased trade and foreign direct investment flows across the income spectrum, resulting in faster rates of economic growth. Different income levels require different levels of IPR enforcement. Some aspects of IPRs may be better implemented gradually in poorer nations, as they are less able to bear the related costs and are less likely to benefit from domestic innovation. The purpose of intellectual property rights is to balance the demands of society to support the use of products, technologies, and creative and literary works while encouraging innovation and the commercialization of these objects. There are various types of intellectual property, and governments choose IPRs in response to conflicting interests, just as they do with other economic policies. Economic and societal conditions influence perceptions of the optimal trade-off between creation and dissemination, which in turn affects the level of intellectual property protection.

Intellectual Property and FDI Flow

The relationship between poverty alleviation and international investment law is complex, with FDI having the potential to contribute to poverty reduction if regulated sustainably and directed into appropriate sectors and regions of developing countries.[56] However, certain investment projects, such as large-scale resettlements or the privatization of water supplies, may increase the risk of impoverishment for local communities. This has led to a growing awareness of the responsibilities of home states of foreign investors in regulating and promoting investment for poverty alleviation.[57]The impact of FDI on poverty reduction remains ambiguous. Liberal development economists view foreign investment as a key element of poverty reduction strategies, while critics argue that the isolated impact of FDI on economic performance is difficult to measure.[58] Governments must regulate investment to specifically support poverty alleviation goals, including setting social and environmental standards.[59]Basic principles for international trade and investment agreements are needed, focusing on reducing inequalities, ensuring social and environmental sustainability, and recognizing economic growth as a means to achieve common good objectives.[60] A radical and comprehensive approach is required, including changes to current models, increased respect for international legal frameworks, greater coherence across international laws, limitations on investor privileges, and enforceable corporate responsibilities. The rapid advancement of biotechnology, particularly in developed countries, has led to the establishment of a global patent protection system.[61] The manipulation and understanding of DNA sequences hold great promise for medical research, industry, and agriculture.[62] However, these advancements also present potential risks, particularly when transnational businesses seek ownership of genetic material upon discovering new functions or applications. Developing and least developed countries hold majority of global biodiversity, which is crucial for genetic resources in agriculture and industry. [63]The use of patents on plant genetic resources in the Global South may threaten food security, as a large proportion of the population in poverty is engaged in agriculture. Critics argue that intellectual property rights in agro-biotechnology may harm small farmers,[64] increase pesticide use, and reduce biodiversityand IPR investment economists hold differing views on the relationship between intellectual property and economic growth.[65] Some believe that stronger intellectual property protection leads to increased FDI and growth, while others argue that certain types, like trademarks, provide more direct economic benefits.[66] Many developing countries, however, struggle to establish suitable patent systems to harness the economic and social benefits of intellectual property. Understanding how intellectual property contributes to development and poverty alleviation is crucial for national policies.[67]

Intellectual property rights can significantly impact global economic interactions by attracting technical investments through international trade in commodities and services, FDI, and licensing of technologies.[68] Imports of commodities and services help transfer and distribute technology, while imports of capital goods and technological inputs reduce manufacturing costs and improve productivity. The effect of intellectual property rights on trade volumes depends on patent changes, market size, and reduced imitation risks. Countries with strong imitation capabilities, like Argentina and Brazil, may face significant consequences. FDI is a principal channel for technology transfer, and its importance varies across sectors. Firms with easily replicable goods and technologies may focus more on protecting patents and trade secrets.[69]

Impact of Foreign Direct Investment on Poverty Alleviation

Investment treaties recognize the importance of foreign investment in economic development, providing employment, spreading information and technology, fostering human capital development, integrating trade, creating a competitive corporate landscape, and promoting enterprise growth.[70] However, these benefits depend on the host state’s appropriate frameworks and policy instruments. International investment agreements aim to attract foreign investment for economic development. Historically, developed nations prioritized foreign investment protection, but the modern legal framework has evolved from development connections. Nonetheless, FDI does not eliminate economic disparity or address all dimensions of poverty. Alternative solutions include government-initiated programs that enhance social safety nets and facilitate income redistribution.[71] FDI is particularly important in nations where conventional economic strategies are insufficient. Critics argue that productivity gains are often exported overseas; however, this does not occur when foreign investors operate in competitive environments. Foreign investment does not exploit impoverished nations but creates an incentive framework for international investors, where shareholders benefit from successful ventures and creditors are protected from losses in the event of project failures.FDI can improve corporate governance,[72] attract investment to regions like Sub-Saharan Africa, and establish social safety nets for the impoverished. Foreign direct investment can provide tax revenue, finance assistance, and deliver services to the impoverished.[73] However, it does not always allocate revenue to the most impoverished segments of society. Foreign enterprises can also offer superior services, including in telecommunications, energy, and water, demonstrating their commitment to serving impoverished and remote communities. FDI in developing states is expected to promote knowledge spillover. For example, FDI has facilitated poverty alleviation and growth in the productive sector in the Western Balkan states. However, its effects on local communities, the environment, and innovation remain ambiguous. As trade and investment liberalization intensifies, low- and middle-income countries are attracting more FDI, but these efforts are under scrutiny for their impact on sustainable development goals such as poverty reduction, human rights, and environmental sustainability.[74]

Intellectual property, once a peripheral issue, now dominates the market value of Fortune 500 companies, with its protections playing a central role in international politics, morality, and social justice debates.IPR boost innovation by increasing the appropriability of returns, promoting domestic innovation, knowledge spillovers, productivity, and international diffusion of technology. To optimize their role in global innovation, nations must strengthen their intellectual property regulatory framework, standards, and collaboration.[75] A new approach is needed to transcend the entrenched divisions in intellectual property discourse within the global economy, which remains deeply divided between developed and developing nations. The global economy is increasingly driven by innovation, supported by information, creativity, and technology, all of which rely on a robust IP regime. Intellectual Property Rights (IPRs) can improve innovation incentives, encourage R&D in poor countries, expand trade and investment in high-tech goods, support international knowledge transfer,[76] enhance consumer guarantees of product origin, build markets for creativity, facilitate price differentiation, and offer greater protection for traditional knowledge.[77] However, challenges remain, including administrative and enforcement costs, potential licensing abuses, and the high costs of medicines, agricultural inputs, and environmental technologies.[78]

Conclusion

IPR and FDI have a significant synergy that can drive economic progress, particularly in reducing poverty. IPRs drive innovation, knowledge creation, competitive marketplaces, and high-value enterprise growth. When combined with strategic FDI flows, these methods can advance technology, strengthen governance, and open doors for sustainable development.

IPRs encourage local businesses and global firms to invest in R&D and knowledge dissemination, enabling emerging countries to participate in global value chains and create jobs. FDI facilitates technology, information, and skill transfer to local markets, providing financial support. But as we have seen, the advantages of this synergy are not guaranteed and need for careful consideration of local laws, international agreements, and the balance of power in the world. To guarantee that all countries may use IPRs for their economic development, the differences in intellectual property rights between developed and developing nations must be addressed. Additionally, the TRIPS agreement's framework for LDC transitions underscores the potential and difficulties of striking a balance between international standards and the development requirements of the world's poorest nations.  In the end, even though IPRs and FDI work well together to reduce poverty, a comprehensive strategy that incorporates sound governance, fair policy frameworks, and sustainable development objectives is needed to guarantee that the most disadvantaged groups can profit from economic advancement. By carefully embracing these two forces, nations may create a robust and inclusive global economy where intellectual property, investment, and innovation are used to benefit everyone, not just a select few. The way forward has to be one of international cooperation, where foreign investment and intellectual property work together to promote sustainable, inclusive growth and provide real chances to reduce poverty on a global scale.

* Ph.D. Scholar (Law), Department of Studies in Law, University of Mysore, India.

** Dean, Faculty of Law, Chairman and Professor, Department of Studies in Law, University of Mysore, India.

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