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[ba-unrev-talk] NYTimes.com Article: Debate on Intellectual Property

This article from NYTimes.com 
has been sent to you by garyrichmond@rcn.com.    (01)

Another thoughful article by Steve     (02)

garyrichmond@rcn.com    (03)

Debate on Intellectual Property    (04)

October 14, 2002
By STEVE LOHR     (05)

In the 19th century, the United States was both a rapidly
industrializing nation and - as Charles Dickens, among
others, knew all too well - a bold pirate of intellectual
property.     (06)

But these days, when it comes to dealing with developing
nations around the world, the United States seems to be
ignoring its own swashbuckling heritage. Or at least that's
the implication of a recent report by the international
Commission on Intellectual Property Rights. The report
recommends that the World Trade Organization's treaty on
intellectual property rights be made much more flexible so
that developing nations, from Brazil to Bangladesh, can
adopt rules more at their own pace.     (07)

The global debate over intellectual property rights -
patents, copyrights and trademarks - is focused mainly on
forward-looking industries like computer software,
pharmaceuticals and biotechnology. But Americans can look
back to this nation's 19th-century experience in book
publishing, for example, to understand the developing
world's viewpoint.     (08)

Back then, American law offered copyright protection - but
only to citizens and residents of the United States. The
works of English authors were copied with abandon and sold
cheap to an American public hungry for books. This so
irritated Mr. Dickens - whose "Christmas Carol" sold for 6
cents a copy in America, versus $2.50 in England - that he
toured the United States in 1842, urging the adoption of
international copyright protection as being in the
long-term interest of American authors and publishers.     (09)

Such appeals proved unpersuasive until 1891, when the
United States had a thriving literary culture and a book
industry that wanted its own intellectual property
protection abroad. So Congress passed a copyright act
extending protection to foreign works in return for similar
treatment for American authors overseas.     (010)

Indeed, the economies that were shining success stories of
development, from the United States in the 19th century to
Japan and its East Asian neighbors like 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.     (011)

But according to the recent report, this kind of
economic-development tactic - copying to jump-start an
industry - is endangered by the United States-led push for
stronger intellectual property rights worldwide.     (012)

As part of a sweeping trade deal reached in 1994, the
member nations of the World Trade Organization 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 1990's that
the "American model" - free trade, wide-open capital
markets and strong intellectual property protection - was
the sure way to global prosperity.     (013)

But just as the prescriptions of the International Monetary
Fund are now being questioned, as prosperity has proved
elusive for countries like Brazil and Argentina, so are the
W.T.O.'s intellectual property rules.     (014)

"If we cut off imitation strategies for developing
countries, we are drastically narrowing the options they
have to reach an economic takeoff," said John H. Barton, a
professor at Stanford law school who led the commission on
intellectual property rights.     (015)

Many economists regard the 1994 agreement as a triumph for
a few industries - pharmaceuticals, software and Hollywood
- that stand to gain a lot from the protections and whose
interests were championed by the United States government.
"Trips was a matter of powerful companies with intellectual
property concerns essentially dictating trade policy," said
Keith E. Maskus, a trade expert at the University of
Colorado.     (016)

The United States does stand to gain the most from stronger
intellectual property protections, most of which must be in
effect by 2005, under Trips. A World Bank study estimates
that American companies would pocket an additional $19
billion a year in royalties, while developing nations like
China, Mexico, Brazil and India - net importers of
intellectual property - would pay more to the patent
holders.     (017)

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 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.     (018)

That is the theory. 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 United States Supreme Court heard a challenge to
a 1998 law that extended copyrights in this country 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.     (019)

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 D. Sachs, a
development economist at Columbia University. "The danger
with Trips is that it will mostly hurt the developing
countries' access to ideas."     (020)

The report of the intellectual property rights commission,
which was sponsored by the British government, includes a
long list of recommendations, some of which would be
anathema to American companies:     (021)

¶Encourage developing nations to make greater use of
compulsory licensing of drugs.     (022)

¶Allow more "reverse engineering" of software programs -
that is, copying a product by studying and making educated
assumptions about the underlying code.     (023)

¶Permit "cracking" of software used to protect copyrighted
digital media, if the country determines that the
copy-protection technology limits the fair use of digital
text, video or music.     (024)

The commission's report comes amid a growing backlash in
developing countries against the imposition of a strong
global system of intellectual property rights. The
lightning-rod issue has been the AIDS epidemic, and the
resulting confrontation between developing nations and the
pharmaceutical industry.     (025)

Facing a public outcry and the threat of compulsory
licensing in countries like South Africa, Brazil and India,
the pharmaceutical companies began cutting prices by 80
percent or more on drugs for use in treating AIDS-related
ailments in developing nations two years ago.     (026)

The World Trade Organization, at its meeting last November
in Doha, Qatar, issued a declaration that public health
matters must be weighed equally with intellectual property
rights. As part of the Doha declaration, the trade
organization allowed the world's least developed nations,
mostly in Africa, to exempt pharmaceuticals from patent
protection until 2016. (The intellectual property rights
commission recommends that exemption for the poorest
nations be extended to all fields of technology.)     (027)

Whether the AIDS episode was a single, isolated case or a
sign of a changing relationship between the developing
counties and the pharmaceutical industry is uncertain. But
emboldened developing countries could invoke the public
health argument for diseases like heart disease and
diabetes - and the increasing sophistication of generic
drug makers in India and China could give them alternate
sources of supply.     (028)

"H.I.V.-AIDS is what made everybody think about this," said
Dr. Jim Yong Kim, a professor at the Harvard Medical School
and an expert on health projects in poor countries. "But I
think access to medicine will be on the table much more
broadly in the developing world."     (029)

The pharmaceutical makers insist that they responded
quickly to the AIDS crisis, working cooperatively with the
United Nations and other international agencies. But the
industry says focusing on low-cost drugs alone ignores the
more significant chronic hurdles to treating diseases of
all kinds in developing nations - lack of public health
infrastructure, education, financing and political will.
There are 35,000 people in Africa being treated under the
international program begun two years ago, while an
estimated 30 million people have H.I.V. in Africa.     (030)

"There is plenty of supply," said Harvey E. Bale Jr.,
director general of the International Federation of
Pharmaceutical Manufacturers Associations in Geneva.
"Access is not the issue."     (031)

Those who defend the Trips global standards for
intellectual property protection say that a strong patent
system not only fuels innovation but provides the best way
for developing nations to attract investment and encourage
a rapid transfer of technology. China, for example, has
steadily given foreign companies a greater measure of
protection for intellectual property and last year signed
on to Trips, when the nation joined the World Trade
Organization.     (032)

"There is no doubt that has played an important role in
attracting R. & D. investment in China," said Brad Smith,
the general counsel of Microsoft. In June, Microsoft
announced that it would spend $700 million over the next
three years in China in education, training and research,
and in investments in local companies.     (033)

In the end, the debate over intellectual property rights,
like the controversy over I.M.F. policies in developing
nations, 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.     (034)

Trips, as it stands, reflects "a mentality borne of the
American triumphalism of the 1990's," said Mr. Sachs of
Columbia. "There is a widespread sense that that approach
to development policy has to be recalibrated."     (035)

http://www.nytimes.com/2002/10/14/technology/14NECO.html?ex=1035610986&ei=1&en=c121ab08e7b328b7    (036)

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