[e-drug] On intellectual property, U.S. forgets its own past

["kaecherie" <kaecherie@yahoo.co.uk>]

E-drug: On intellectual property, U.S. forgets its own past
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[Copied as fair use. BS]

International Herald Tribune: On intellectual property, U.S. forgets 
its own past
Steve Lohr The New York Times
Wednesday, October 16, 2002

NEW YORK In the 19th century, the United States was both a rapidly
industrializing nation and - as Charles Dickens and others knew all too
well - a bold pirate of intellectual property.

But these days, when it comes to dealing with developing countries around
the world, the United States seems to be forgetting its own swashbuckling
heritage. At least, that is the implication of a recent report by the
international Commission on Intellectual Property Rights, a group sponsored
by the British government.

The report recommends that the World Trade Organization's treaty on
intellectual property rights be made much more flexible so that developing
countries from Brazil to Bangladesh can adopt rules more at their own pace.

The global debate over intellectual property rights - patents, copyrights
and trademarks - is focused mainly on forward-looking industries such as
computer software, pharmaceuticals and biotechnology. But Americans can look
back to the 19th-century experience in book publishing, for example, to
understand the developing world's viewpoint.

Back then, U.S. law offered copyright protection - but only to its own
citizens and residents. The works of English authors were copied with
abandon and sold cheaply to an American public hungry for books.

This so irritated Dickens - whose "A Christmas Carol" sold for 6 cents a
copy in America, considerably less than in England - that he toured the
United States in 1842, urging the adoption of international copyright
protection in the long-term interest of American authors and publishers.

Such appeals proved unpersuasive until 1891, when the United States had a
thriving literary culture and a book industry that wanted its own
protections abroad. Congress then passed a copyright act extending
protection to foreign works in return for similar treatment for American
authors overseas.

The economies that were shining success stories of development, from the
United States in the 19th century to Japan and its East Asian neighbors such
as Taiwan and South Korea in the 20th, took off under systems of weak
intellectual property protection. Technology transfer came easily and
inexpensively until domestic skills and local industries were advanced
enough that stronger intellectual property protections became a matter of
self-interest.

But, according to the recent report, this kind of economic-development
tactic - copying to jump-start an industry - is endangered by the U.S.-led
push for stronger intellectual property rights worldwide.

As part of a sweeping trade deal reached in 1994, World Trade Organization
members must adhere to a global agreement known as TRIPS, for Trade-Related
Aspects of Intellectual Property Rights. TRIPS stemmed partly from the
prevailing belief during the 1990s that the "American model" - free trade,
wide-open capital markets and strong intellectual property protection - was
the way to global prosperity.

But those prescriptions are now being questioned. "If we cut off imitation
strategies for developing countries, we are drastically narrowing the
options they have to reach an economic takeoff," said John Barton, a
professor at Stanford University law school who led the commission on
intellectual property rights.

Many economists regard the 1994 agreement as a triumph for a few
industries - mainly pharmaceuticals, software and Hollywood - that stand to
gain a lot from the protections and whose interests were championed by the
U.S. government.

"TRIPS was a matter of powerful companies with intellectual property
concerns essentially dictating trade policy," said Keith Maskus, a trade
specialist at the University of Colorado.

The United States does stand to gain the most from stronger intellectual
property protections. A World Bank study estimates that U.S. companies would
pocket an additional $19 billion a year in royalties, while developing
nations such as China, Mexico, Brazil and India would pay more to the patent
holders.

Intellectual property rights are temporary grants of monopoly intended to
give economic incentives for innovative activity. Why toil for months or
years to develop a new drug or to think up a clever software program, the
thinking goes, unless there is the potential for a big payoff? The intended
result is that consumers will pay somewhat higher prices for an individual
drug or software program but will benefit from all the additional innovation
in the economy.

That is the theory. But even within the United States, there is criticism
that the corporate frenzy to patent any technical advance, even business
methods, undermines innovation by unnecessarily restricting the flow of
ideas. And just last week, the U.S. Supreme Court heard a challenge to a
1998 law that extended copyrights in the United States by 20 years; the
law's opponents contend that the extension inhibits public creativity by
making it harder for other people to obtain and build upon existing works.
But in general, the theory behind intellectual property rights tends to work
in rich nations.

The concern about TRIPS is that it is too much of a one-size-fits-all
approach that works to the detriment of developing nations. "It would be
fine if we lived in a world of all rich people," said Jeffrey Sachs, a
development economist at Columbia University. "The danger with TRIPS is that
it will mostly hurt the developing countries' access to ideas."

In the end, the debate over intellectual property rights may be more a
dispute about speed than direction. Free trade, open financial markets and
intellectual property rights are economic goals worth pursuing.

But that is not to say that the preferred path is necessarily the straight
line of ideological purity. TRIPS reflects "a mentality born of the American
triumphalism of the 1990s," Sachs said. "There is a widespread sense that
that approach to development policy has to be recalibrated."


[Submitted by "kaecherie" <kaecherie@yahoo.co.uk>
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