India's Approach To Pharma Patents Under US Attack, But Other BRICS Nations Likely To Adopt It

Techdirt has been reporting for a while on India's growing success in providing its population with access to low-cost generic drugs, making use of the permissions to do so granted by TRIPS. That has naturally earned it the ire of Western pharma companies, which now seem to be striking back, as this post on Infojustice.org explains: 

On Techdirt.

Now US And EU Want To Apply Upward Ratchet To TRIPS Itself

Here on Techdirt we often talk about the copyright ratchet -- the fact that for three hundred years changes to copyright have always been in one direction: longer, wider and stronger. But there's a group of countries where the copyright ratchet isn't in place yet. These are the so-called LDCs -- the Least Developed Countries -- where many of the world's poorest citizens live. That's because the main Agreement on Trade Related Aspects of Intellectual Property Rights, better known as TRIPS, explicitly allows LDCs a transitional period of ten years, during which time they are not required to meet all the stringent requirements laid down there for granting intellectual monopolies. Moreover, the TRIPS agreement specifies: 

On Techdirt.

India Says: 'There Is No Direct Correlation Between IP And Innovation'

Techdirt has been pointing out for years that more patents is not the same thing as more innovation, even though many around the world would have us believe otherwise. It seems the message is finally getting through: here's a remarkable statement from India on the subject of innovation and small- and medium-sized companies, made at a TRIPS Council meeting: 

On Techdirt.

The Origins of Europe's Suicidal Copyright Policies

One of the most important recent pieces of research to appear in the field of copyright and its enforcement was "Media Piracy in Emerging Economies".  If you haven't read it, please do so now - I'll wait...

The author of that study, Joe Karaganis, has now penned perhaps the best short explanation of why Europe's policy on strong enforcement of copyright does not make economic sense:

where do the EU’s economic interests lie?  Let’s look at the numbers:

*** According to the World Bank, Europe’s audiovisual imports exceed its exports by a ratio of around 4-1.  In 2008, Europe (EU 27) imported roughly $14.7 billion in audiovisual and related services (basically, licenses for movies, TV, radio, and sound recording).  In contrast, it exported about $3.9 billion, for a net trade deficit of $10.8 billion  (International Trade Statistics 2010: 156).

*** About 56% of those imports ($8.35 billion) come from the US.  The EU, in turn, exports about $1.7 billion to the US, resulting in a net negative trade balance of around $6.65 billion.  This does not include software licenses, where US companies monopolize larger parts of the European consumer and business markets.

*** The US, in contrast, is a large net exporter of audiovisual goods, with roughly $13.6 billion in exports and $1.9 billion in imports.

 Therefore:

For countries or regions that are net importers of copyrighted goods, higher IP standards and stronger enforcement will result in increased payments to foreign rights holders.  Because the US thoroughly dominates European audiovisual markets, stronger enforcement in these areas is, in practice, enforcement on behalf of Hollywood.

So pirating of US audiovisual products actually reduces the outflow of money from the European economy.  Ah, yes, the industry pundits will retort, but what about the loss of revenue due to pirating of copyright works that circulate purely within the EU?

Domestic piracy may well impose losses on specific industrial sectors, but these are not losses to the larger national economy. Within a given country [or in this case, region], the piracy of domestic goods is a transfer of income, not a loss. Money saved by consumers or businesses on CDs, DVDs, or software will not disappear but rather be spent on other things—housing, food, other entertainment, other business expenses, and so on. These expenditures, in turn, will generate tax revenue, new jobs, infrastructural investments, and the range of other goods that are typically cited in the loss column of industry analyses. To make a case for national economic harms rather than narrower sectoral ones, the potential uses of lost revenue need to be compared: the foregone investment in the affected industries needs to represent a better potential economic outcome than the consumer surplus generated by piracy (Sanchez 2008). The net impact on the economy, properly understood, is the difference between the value of the two investments. Such comparisons lead into very complicated territory as marginal investments in different industries generate different contributions to growth and productivity. There has been no serious analysis of this issue, however, because the industry studies have ignored the consumer surplus, maintaining the fiction that domestic piracy represents an undiluted national economic loss.

For our part, we take seriously the possibility that the consumer surplus from piracy might be more productive, socially valuable, and/or job creating than additional investment in the software and media sectors. We think this likelihood increases in markets for entertainment goods, which contribute to growth but add little to productivity, and still further in countries that import most of their audiovisual goods and software—in short, virtually everywhere outside the United States.

This is a point I've made elsewhere, and which is almost universally overlooked in analyses of the economic impact of piracy.

The paper then provides a fascinating analysis of one particular industry, that of films.  It looks at what films are made in which countries, and who really benefits.  Not surprisingly, it reveals that the European film industry is completely in thrall to Hollywood, and it is this that is guiding copyright policy in Europe:

It’s this junior partnership that should be weighed against the wider sacrifices of privacy and freedom of speech built into so many recent national and EC-level IP enforcement policies, such as the French ’3-strikes’ plan, which will cut French citizens off of the Internet for the piracy of Hollywood productions.  Strong enforcement reinforces status quo positions in the market, but at an escalating public cost as consumer behavior becomes the real focus of enforcement activities.  There is nothing in these policies will alter the balance of cultural power or change the direction of payments.  That’s why I’ve characterized the EC enforcement plan as: “send money to the US.”

Moralizing IP rhetoric is also a handicap in this context.  Continuing to defend IP as a fundamental right long after it has been made an object of trade policy is to surrender any real leverage in making deals.  A trade negotiator would be very lucky have such a partner on the other side of the table.  

And that's precisely what the US has in Europe, not least thanks to Sarkozy, who has been the main proponent of Europe's counterproductive copyright infringement agenda.  The key statement of that topsy-turvy policy was made by him during the global joke known as the e-G8 meeting:

I know and understand that our french conception of author’s rights isn’t the same as in the United States or other countries. I simply want to say that we hold to the universal principles proclaimed in the American constitution as much as in the Declaration of the Rights of Man in 1789: that no one should have the product of their ideas, work, imagination–their intellectual property–expropriated with impunity.

Each of you understands what I say here because each of you is also a creator, and it is in virtue of these creator’s rights that you have founded businesses that today have become empires. The algorithms that give you your strength; this constant innovation that is your force; this technology that changes the world is your property, and nobody contests it. Each of you, each of us, can thus understand that the writer, the director, or the performer can have the same rights. – French President Sarkozy, opening the ‘e-G8? conference that he convened this past April.

As Karaganis points out:

With this fulsome praise of tech and media CEOs at the e-G8, Sarkozy expressed the basic European cognitive dissonance on IP:  the embrace of universal rights as a way of pretending equality with the real powers in the room.

The rest of his piece looks at how Europe ended up in this position where it would be arguing strenuously for an approach that was against its own best interests.  As such, it provides invaluable context for today's moves, and should be read by anyone wanting to understand them - and to counter them.

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EU on ACTA: "TRIPS Is Floor Not Ceiling"

Getting information about the Anti-Counterfeiting Trade Agreement is like getting blood from a stone, but here's an article with some useful informtion:

The EU Commission is “committed to improve the international legal framework for IP protection” and sees “ACTA as one way to reach that goal,” Devigne said. There was no intention to duplicate TRIPS. Rather, “we want to go beyond it,” he said, adding, “TRIPS is the floor, not the ceiling.”

Well, that's pretty clear: they are aiming to produce something even worse than TRIPS. This, though, is less convincing:

“It is not that we want to hide something, we just don’t have something to show.” Devigne also rejected all claims about a possibly secrecy in the negotiations. “Quite on the contrary, for international trade negotiations we normally do not have such a democracy exercise where everybody can raise their concern,” said Devigne. For this kind of negotiations the Commission would normally only consult with member states.

One other nugget is the following:

so far there is only consensus in any case to exempt patents from criminal law sanctions.

Drip, drip, drip....

SECURE's Future Not So Secure?

Last year I wrote about an insidious little agreement called SECURE - Standards to be Employed by Customs for Uniform Rights Enforcement. As you might guess, those "standards" involve intellectal monopolies to the nth degree. But lo! There is hope:

In what might be seen as a victory for defenders of flexibilities for poor nations in international trade rules, the World Customs Organization in December recommended the discontinuance of a working group on intellectual property enforcement standards after it became “deeply embroiled” in debate from member governments fearing it would impose undue obligations on them. But the IP and customs issue may not be out of the fire yet.

A new committee will be sought with a stronger focus on technical assistance and capacity building, according to a WCO document, but this has raised new doubts about participation in new committee’s creation, according to a developing country official.

“The Policy Commission was informed that the SECURE Working Group established by the Council in June 2007 to deal with IPR issues had become deeply embroiled in difficulties related to its terms of reference, essentially because of a perceived fear that the group’s work on standard-setting might be used as a means of enlarging the obligations imposed on countries by the WTO TRIPS Agreement,” said the summary of outcomes document [pdf] of the WCO Policy Commission, which met from 9-11 December in Buenos Aires.

It ain't over yet, but what is important is that it seems that the developing nations are really waking up to the way that intellectual monopolies are being used as a kind of new imperialism: the more that realise that, the less chance TRIPS and its misbegotten siblings will have in imposing their hidden agendas around the world.

The (Intellectual Monopoly) Empire Fights Back

I've chronicled how WIPO is beginning to shift towards some semblance of fairness when it comes to intellectual monopolies. This is clearly bad news for those that have used WIPO to impose all kinds of unfair regimes on developing countries. It seems those forces of monopoly murkiness are fighting back - dirtily:

The World Customs Organisation is recommending far-reaching new rules on intellectual property rights that some say may extend beyond the organisation’s mandate.

Staff at the WCO’s Brussels headquarters are preparing what they describe as voluntary ‘model legislation’ to provide guidance on how IP rights can be upheld at border posts.

While they are hoping that the model will be approved by the 171-country body in June, representatives of developing countries were meeting this week to address concerns raised by Brazil over the proposal’s likely breadth.

Brazil is perturbed by a WCO recommendation that customs authorities need to be conferred with powers and be able to take measures that are additional to those set out in the key international accord on IP issues: the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). TRIPS does not oblige its signatories to introduce border control measures relating to exports or goods in transit.

During discussions in February, Brazil argued that a WCO working group known as SECURE (Standards to be Employed by Customs for Uniform Rights Enforcement) had no mandate to alter the international legal framework on intellectual property.

I'm sure they won't let a little detail like having "no mandate" get in the way....

Trumping Intellectual Monopolies

Some misguided people seem to think that intellectual monopolies are "sacred" - probably because they insist on calling them "intellectual property", and property, as we all know, is totally sancrosant. But it seems that some are realising there may be higher imperatives - like saving the planet:

Intellectual property rules should be reshaped to ensure that they do not hinder developing countries from gaining access to technology considered vital for addressing climate change, the European Parliament has declared.

Members of the Parliament (MEPs) on 29 November approved a report that urges examination of the possibility of revising the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). TRIPS may need to be amended, the report suggests, in order to allow for the compulsory licensing of environmentally-friendly technology that is patented.

Amending TRIPS? Now there's an interesting idea.

Winds of Change at the WTO?

OK, this might not seem much, but the fact that it's being discussed at all is something of an achievement:

The proposal for a new five-paragraph Article 29bis to the WTO’s 1994 TRIPS agreement, aims at protecting biodiversity particularly found in developing countries by making it mandatory for patent applicants to reveal where they obtained the biological resources or traditional knowledge in question, and to ensure fair and equitable benefit-sharing of commercial uses, as well as legal requirements in the providing country for prior informed consent to access the resources.

Now we need to move further by turning the WTO into a forum not about protecting intellectual monopolies, but about balancing them with various kinds of intellectual commons.

A Short Trip Through TRIPS

The WTO's Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement has figured many times in this blog. It's increasingly clear that it represents one of the bastions of old-style intellectual monopoly protection. Indeed, one measure of success in re-framing the debate about intellectual monopolies would be when TRIPS is repealed, or at least superseded. Here's a handy guide to it, together with links to recent TRIPS-related news.

Coincidence? I Don't Think So....

Last week I noted a highly partial piece of writing that leapt to Microsoft's defence over its dispute with European Commission. And what do we have here? Why, a highly partial piece of writing that leaps to Microsoft's defence over its dispute with European Commission:

the Commission alleges that Microsoft has established "unreasonable" prices for its protocol licensing of its server technology in Europe. The Commission characterizes Microsoft's proprietary server software protocols, which is protected by patent, copyright and trade secret law, as containing "virtually no innovation." The Commission then remarkably concludes that everyone in the industry, nonetheless, "needs" Microsoft's protocols, and that Microsoft should provide them "royalty-free." What the EC demands in the end is that Microsoft make its intellectual property available to its competitors for free.

Now, where have I heard that before? Oh, yes:

The heart of the commission's theory, to quote its press release, is that "there is no significant innovation in the interoperability information" supplied by Microsoft and "hence the prices proposed by Microsoft are unreasonable." On this basis, the assertion is that Microsoft may charge only a nominal fee for the 10,000 pages of technical documentation it has provided and may face fines of up to 2 million to 3 million euros a day if the company does not yield.

The commission is silent on some inconvenient truths. European and U.S. patent offices have awarded Microsoft 36 patents for the technology in these interoperability protocols, and the company has an additional 37 pending applications being reviewed by patent offices around the world.

In order for technology to be patentable, it must be novel, "non-obvious," and make a technical contribution—in short, it must be innovative. What's more, trade secrets and knowhow also are valuable intellectual property, valued independently of their patentable character and protected by law and precedent internationally and in the EU. Indeed, the World Trade Organization's TRIPS agreement, to which all EU 27 member states are bound, expressly protects undisclosed information as a form of intellectual property, different from but co-equal with patents.

Uncanny: it's almost as if they were part of a concerted campaign, or something.

TRIPS Tripped up by Doha?

Here's a hopeful analysis. It concerns the pernicious Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement, which is often used by Western nations to force other countries to pass harsh laws that control intellectual monopolies.

The piece claims that TRIPS was accepted by developing countries as a quid pro quo for obtaining fairer treatment for their agricultural goods. But the recent collapse of the so-called Doha round of trade negotiations means that such fairer treatment is unlikely to be forthcoming. So, the logic runs, maybe developing countries should give TRIPS the heave-ho in return. Interesting.