? September 2002
Study on IPR and Development Close But No Cigar
alone could resolve the debate over extending intellectual property
rights in the developing world, then the new report by the U.K.'s
Commission on Intellectual Property Rights represents a major breakthrough.
Regrettably goodwill cannot trump economic common sense. As a result,
the report, "Integrating Intellectual Property Rights and Development,"
does not provide a workable blueprint to increase both economic growth
and access to medicines and knowledge in developing countries. That
is a shame really given how honestly the authors approached their
the report's ultimate shortcomings, it does deserve a careful read.
That in itself is an accomplishment. Literally tons of books and studies
now come out each month on the question of whether and how developing
countries should improve their intellectual property regimes. This
is due in part to a new awareness of patents as a result of the HIV/AIDS
crisis and the looming deadline of 2005 for many developing countries
to implement the minimum standards contained in the 1994 World Trade
Organization treaty, Trade Related Aspects of Intellectual Property
Rights (TRIPS). Sadly most literature simply repeats the stale charge
that intellectual property rights are a neo-colonialist conspiracy
of big business. "Integrating Intellectual Property Rights and
Development Policy" does not fall for that lie. The authors seek
to find a balance between industrial interests and the claims of the
NGO horde. Middle ground is not necessarily even ground.
to the problem lies in who are the authors, themselves. Stanford University
law professor, John Barton, chairs the commission. He is joined by
Dr. Ramesh Mashelkar, Director General of the Indian Council of Scientific
and Industrial Research and one of his country's leading scientists;
Dr. Gill Samuels, Senior Director of Science Policy at Pfizer, a large
pharmaceutical company; Professor Carlos Correa, a well known Argentine
scholar; Dr. Sandy Thomas, Director of the Nuffield Council on Bioethics;
and Mr. Daniel Alexander, a prominent London barrister. The authors
represent ably the professions of science and law. Unfortunately their
ranks did not include an economist and advice from "dismal science"
would have improved the result.
The authors set out to answer three questions. "How national
IPR regimes could best be designed to benefit developing countries
within the context of international agreements, including TRIPS?"
(The Trade Related Aspects of Intellectual Property Rights or TRIPS
is the 1994 treaty negotiated through the World Trade Organization
that sets forth the international minimum standard of IPR protection.)
"How the international framework of rules and agreements might
be improved and developed?" And, finally, what is "the broader
policy framework needed to complement intellectual property regimes,"
e.g., competition policy and law.
To each question, the authors bring an understandable desire to find
recommendations that could uphold at least the shell of intellectual
property rights while giving developing countries leeway just short
of defection. For instance, they recommend expanding the ability of
developing countries to import drugs from countries who do not uphold
patent rights. They recommend extending the TRIPS deadline to 2016.
They recommend countries adopt an intrusive competition or anti-trust
policies that would in effect trump intellectual property rights through
arbitrary regulatory harassment. Such is the result of using the misguided
politics of compassion rather than principle as your compass.
the authors have avoided the trap of capitulation disguised as compromise?
To start they should have paid more attention to Professor Keith Maskus,
the leading economist on intellectual property rights and public policy.
They cite his work but fail to understand the importance of his perspective
that "The main goal of an intellectual property system should
be to create economic incentives that maximize the discounted present
value of the difference between the social benefits and the social
costs of information creation, including the cost of administering
the system." Maskus or at least any knowledgeable economist was
the missing member of the team.
welfare analysis of Maskus and others transforms the research approach
from bartering a deal to finding the evidence. It provides an understanding
of how long-term dynamic gains in investment and research compensate
for the short-term static losses resulting from price changes. The
loss is particularly evident when the authors address the critical
question of how higher level of patent protection affect drug prices
in developing countries. They cite but fail to appreciate the new
economic evidence that the existing market conditions have a stronger
impact on prices than the potential gains from exclusivity.
commission added an economic perspective to its scientific and legal
expertise, the authors would have produced a different and more useful
guide to truly integrating intellectual property and development.
We are grateful to the International Policy Network for permission