Intellectual Property Rights


Excerpt From: Rischard, Jean-Francois.

“High Noon: 20 Global Problems, 20 Years To Solve Them.” iBooks.


“The protection of intellectual property rights (IPRs)—patents, trademarks, copyrights, trade secrets, and the like—has changed over the last two decades from an obscure national regulation issue to a hotly debated global issue. It’s a very complex issue to summarize, as there are quite a few strands. But behind all these strands, there is one central new world economy phenomenon.

The new world economy is, as we saw in earlier chapters, bent on knowledge and constant innovation—the opposite of a static economy. And here’s the rub: in a static economy, there would be a case for giving intellectual property less protection than physical property. How so? Simply because an object used by X cannot be simultaneously used by Y, so that physical property rights are needed to avoid a war of all against all. By contrast, if X listens to a song or watches a film, Y can still do the same at near-zero additional cost, so that assigning property rights to them would merely result in the wasteful exclusion of would be consumers.

But in the anything-but-static new world economy, just as physical property rights must be protected, some sort of protection of intellectual property rights is needed if there’s going to be any incentive for people to try to invent new software, pharmaceutical drugs, songs, films, and so on. You could even argue that this protection is needed more than ever, as the cost of producing such innovations can be very heavy—some drugs costs several billion dollars to develop, some movies cost fortunes, some trademarks take decades to build into vouchers of quality. These costs are going up just as the new technologies make duplication and free dissemination easier than ever. The tension between the two is at its maximum in the new world economy.



This explains why there are so many different strands to this issue and why the whole field is in such flux. Here’s a triple sample:



The world is moving steadily in the direction of protecting software with patents, with the United States and Japan ahead of the rest of the world in this. Yet opponents argue that software should be no more patentable than a mathematical formula—and that protecting it will decrease innovation in that industry.29 As an example of how big the stakes of the debate are, some upstart companies, like Ximian, have been trying to rewrite the rules of the software business by creating and giving away word processors, spreadsheets, e-mail readers and other programs that mimic the look and feel of Microsoft’s signature products—yet Microsoft’s $25 billion a year business is based on the idea that software should be owned and that its basic ingredients are proprietary.30 Opponents also argue that strengthening software patenting could create monopolies for first movers—pointing to a tricky intersection between the promotion of competition (the role of antitrust laws) and the promotion of innovation (the role of intellectual property laws, whose aim is to protect innovators from competition long enough to make it worth their while to create in the first place).



Patents are being issued for living organisms. This raises a host of issues: moral and religious issues for some people, perceived environmental risks (see above in this chapter), and worries by the developing countries that large multinationals will come to dominate the supply of seeds for new plant varieties. Some 920 patents have been taken out on rice, maize, soybean, wheat, and sorghum, 70 percent of them by six multinational companies.32 This practice raises two worries: that more and more patents are being won for varieties where there is little evidence of innovation; and that farmers using patented crops will be forced into a royalty-paying system under which they are denied the right to save, grow, exchange, and resell seeds as they like. Another issue has become pressing as well: the patenting of decrypted gene sequences, which can raise delicate controversies. Human Genome Sciences is involved in one: having had the foresight to apply for a patent for the gene for CCR5, which, as a receptor, looked like a promising target for anti-AIDS drugs, it could now insist on cross-licensing by any other lab that would want to aim drugs at this receptor.


Looming clash between developed and developing countries.

Many of the new IPR rules have been piggybacked onto the WTO even though they have only indirect links to international trade, as hinted by the title of the relevant agreement, the Agreement on Trade-Related Aspects of Intellectual Property Rights, or TRIPs—quite a mouthful. For the developing world, most of these rules will kick in only around 2005, but the anguish is mounting, as the developing countries will have to remedy several typical weaknesses in their intellectual property systems: weak standards and limited enforcement of patents; lax or nonexistent copyright, trademark, and trade secret protection; and their frequent refusal to recognize patents on things like pharmaceutical products, agricultural chemicals, biotechnology, and new plants. Many developing countries see it this way: while the world at large will benefit from better incentives for innovation and creation, the developing country group will see its ability to imitate foreign products and technologies reduced. And they are afraid of a double cost burden: beside the massive expense of improving their own IPR administration systems, they may face higher prices for the protected products. This issue recently flared up in relation to the pricing and licensing of anti-AIDS drugs; how real it is for poor countries became clear when even the United States and Canada choked on the price of anthrax-fighting drugs and threatened for a short while to override patent rights in view of the bioterrorism menace.

These three strands should give a sense of the urgency of moving to global solutions for this complex issue of IPRs. It is too central and too complex to be left under diverging national laws (outside the EU, no two countries so far have identical IPR laws). It is too important to be dealt with as a mere subpart of the largely unrelated and already difficult international trade negotiations. And it’s an urgent issue at that—as reality has been moving much faster than the world’s IPR setup for it. This is also true of the next issue.”


Excerpt From: Rischard, Jean-Francois.

“High Noon: 20 Global Problems, 20 Years To Solve Them.” iBooks.