November 25 2002
Report Sends Developing Countries a Distorted Message on IP Rights
United States and the rest of the developed world well know, intellectual
capital is a primary engine for growth. Effective use of that capital-developing
it, exploiting it, and protecting it- is an economic necessity. That's
where the intellectual property system comes in. The IP system has
long been used by developed countries to encourage the growth and
use of intellectual capital.
In much of the world outside North America and Europe, however, IP
systems are inadequate-often seriously inadequate. As a result, the
developing world has been losing out for years. It's in the economic
interest of both the developed and the developing world to build up
those systems. Unfortunately, a recent report from a British government
commission urges a giant step in the wrong direction.
The Commission on Intellectual Property Rights [CIPR] was established
by the United Kingdom's Department for International Development for
the purpose of investigating how intellectual property could be used
to benefit developing countries. It included individuals from Great
Britain, India, and Argentina and was chaired by an American, Stanford
law professor John Barton. On Sept. 12, it released a report entitled
"Integrating Intellectual Property Rights and Development Policy."
The CIPR report has generated a lot of buzz. Instead of suggesting
ways that developing countries could take better advantage of the
intellectual property system, the report makes the argument that strong
IP protections are not in the interests of developing countries. It
suggests that the efforts under the Agreement on Trade Related Aspects
of Intellectual Property [TRIPS] to bring developing countries into
compliance with the international IP system have been misguided and
should be reconsidered in critical ways.
Earlier this year I was interviewed by the CIPR. At the time, I thought
that the commission's work was the beginning of a coordinated British
effort to take seriously its responsibilities under Article 67 of
the TRIPS Agreement. Article 67 obligates developed countries to provide
the technical assistance necessary for developing countries to build
functioning IP systems. Developing countries themselves called for
Article 67 during the Uruguay Round to ensure that their inventors
and artists would benefit from TRIPS.
Now, this UK effort strays far from the constructive engagement promised
under Article 67. Countries that move to adopt its recommendations
will do themselves more harm than good. Indeed, the CIPR report could
have a serious impact on the economic strategies of developing countries.
With the imprimatur of the UK's international aid agency, the report
will likely be used by many developing countries as a policy guide.
This is a frightening thought, since the report implicitly encourages
the reversal of hard-fought IP reforms that many developing countries
have thus far made. If developing countries proceed to dismantle what
little intellectual property infrastructure they might have, they
will experience a devastating setback in achieving their economic
A well-functioning IP system takes a country's intellectual capital-that
is, its cumulative scientific, technical, and cultural knowledge-and
channels it into economically productive uses. But to reap the benefits
their citizens deserve, developing countries need help and encouragement.
They need technical assistance in implementing thisadmittedly complex
system. And they need to understand that entering the IP system is
in their best interests.
From the initiatives that the International Intellectual Property
Institute pursues around the world-projects aimed at improving the
ability of developing countries to make use of the international IP
system-I've learned firsthand how inadequate skill sets and intellectual
property infrastructure can undermine the economies of the developing
world. Consider the case of Jamaica. With a 3.5 percent share of the
global music market, Jamaican composers and performers account for
about $385 million of the royalties received by European, American,
and Asian copyright royalty collecting societies. Yet none of that
money finds its way back to Jamaica's own collecting societies because
their artists and collecting societies lack the required expertise
in international licensing laws. With adequate technical assistance,
Jamaican artists would receive their proper share of global copyright
revenue. And the result would be at least a 3 percent rise in Jamaica's
gross domestic product.
Another example is Brazil, a country that devotes significant tax
revenue to financing scientific research and development, which in
turn produces a wealth of scientific knowledge with commercial potential.
Brazil, however, lacks both an effective patent system and sufficient
local experts knowledgeable in how to obtain, enforce, and license
rights in important markets such as the United States and Europe.
As was recently reported in The Washington Post, Brazilian scientists
at the University of So Paulo were successful in decoding the genome
of a grape-killing pest that had threatened California's $2.7 billion
wine industry. California vintners welcomed the discovery and persuaded
the U.S. and state departments of agriculture to support the Brazilian
research. Unfortunately, the funding agreement with the University
of So Paulo provided that there would be no patents on this research.
The result: Brazilian science will get nothing except good press,
when it might otherwise have been compensated by the very markets
that could and should have paid for its discoveries. If the University
of So Paulo were located in the United States, the outcome might have
been very different. In the United States, research conducted at universities
funded by government dollars is automatically reviewed for patenting.
If the research had taken place, for example, at the University of
California, the innovations would have been patented and the resulting
royalties would have been added to the $250 million a year in patent
licensing income the university already receives. With technical assistance
in designing and implementing a comparable IP mechanism, Brazil could
open its doors to a whole new source of national wealth stemming from
research efforts. The cases of Jamaica and Brazil illustrate another
crucial point: There is no shortage of intellectual capital in developing
countries. The problem such countries face is
simply the lack of knowledge, expertise, and funding to fully implement
a broad IP system. Efforts by the United States and other developed
countries to improve IP systems in developing countries have so far
been limited, focused mainly on establishing minimal recognition of
intellectual property rights in the laws of developing countries.
The daunting task of building IP infrastructures and training people
skilled at using them has been left to developing countries themselves.
That has to change. The TRIPS Agreement provides a good framework
for expanding the benefits of intellectual property to all peoples.
But it won't work if we encourage the developing world not to build
IP systems that can protect their own good ideas.
Lehman is president of the D.C.-based International Intellectual Property
Institute, an international development organization that addresses
issues of IP as a tool for economic growth, particularly in developing
countries. Lehman served as assistant secretary of commerce and commissioner
of patents and trademarks in the Clinton administration.