TCS Daily

The Ideological War Over Intellectual Property

By Mark Schultz - May 2, 2005 12:00 AM

Intellectual property, once a dry, technical subject, has been cast as the villain in a modern day struggle between darkness and light. Free Culture and open source advocates argue passionately that intellectual property rights harm us all by locking up knowledge and culture. Their protests are loudest in the U.S. and E.U., but the most consequential front in this burgeoning ideological war over intellectual property rights is the developing world.

Intellectual property critics say the World Intellectual Property Organization ("WIPO") needs to abandon its pro-IP orientation to help the developing world. Until now, WIPO's job has been to promote intellectual property rights and harmonize the world's intellectual property laws. The premise behind WIPO is that intellectual property rights are good for all nations and people. A group of developing countries and NGOs led by Brazil and Argentina aims to change that premise. They want WIPO to adopt a presumption against increased IP rights, allowing "higher standards of protection . . . only when it is clearly necessary . . . and where the benefits outweigh the costs of protection." WIPO is seriously considering this proposal, having just concluded a week of discussions in April, with more meetings to be held in June and July, and a vote scheduled in September.

For the sake of the developing world, let's hope that this proposal does not succeed. Developing countries need help with intellectual property rights, but not this kind of help. Despite the doubts some have about IP rights and others have about UN bureaucracies, the current pro-IP version of WIPO is on the side of the good guys.

The New International IP Agenda

The debate at WIPO is best understood in light of a broader international movement challenging intellectual property rights on behalf of the developing world. Some developing world politicians and activists contend that the current international IP regime is "intellectually weak, ideologically rigid, and sometimes brutally unfair and inefficient" for developing countries. These critics are promoting a new agenda to guide future international policy making on intellectual property.

Proponents of this new international IP agenda are deeply skeptical of the benefit of intellectual property rights. They assert that access to health care and knowledge are fundamental human rights. As they see it, private ownership of intellectual property violates these rights, making drugs too expensive and interfering with obtaining knowledge and educating people in poor countries.

These critics say that private parties' intellectual property rights should take a back seat to public needs. The AIDS crisis has been a rallying point, as they have pushed for compulsory licensing of patented drugs. This movement resulted in the adoption of the "Declaration on the TRIPS Agreement and Public Health" at the WTO meeting in Doha, Qatar in 2001. The Doha declaration essentially allows WTO members to set their own prices for patented drugs to address public health crises.

Another key initiative of the new international IP agenda is a treaty promoting Access to Knowledge. Extending the logic of their arguments regarding patented drugs, NGOs and developing country representatives now contend that the public's need for knowledge should also trump intellectual property rights. The proposal includes compulsory licensing of textbooks and other educational works, free use of government funded research, severe limitations on anti-copying technology, and broad privileges for libraries.

The new international IP agenda treats intellectual property rights as the least desirable way to encourage innovation. For example, a proposed treaty on Medical R&D would require governments to devote a certain percentage of GDP to medical research. This treaty would create incentives against private ownership of inventions and limit the ability to get patents for certain types of research. NGOs are also urging governments worldwide to adopt a preference or requirement for the use of open source software in government projects, arguing that proprietary software impedes economic development.

Prospects for the New International IP Agenda

Clearly, the new international IP agenda has a lot of energy and thought behind it, but do intellectual property owners and supporters need to pay attention to it? Yes. The NGOs promoting the new international IP agenda (particularly the US-based Consumer Project on Technology) are well-funded (George Soros, the MacArthur Foundation, and other big donors), well-organized, smart, and incredibly persistent. In one international forum after another, NGOs have challenged intellectual property rights: the WTO, WIPO, UNESCO's proposed Convention on Cultural Diversity, the UN's World Summit for the Information Society, the World Health Organization, and others. A number of developing countries, particularly Brazil and Argentina, have adopted this agenda. India, despite its growing tech economy, continues to vacillate on IP rights. Even in the EU, newer members like Poland have been persuaded that strong intellectual property rights threaten their growing technology sectors.

The advocates of the new international IP agenda are energized right now. They should be. WIPO is talking about their issues and is certain to adopt some form of a "Development Agenda" later this year. The only question is the content of that agenda.

Supporters of intellectual property rights need to articulate a coherent, principled case for intellectual property protection in the developing world. In the developed world, the debate about intellectual property has mostly been about achieving the "right" balance in IP rights. In those instances, the technology and creative industries have done fine looking after their own interests. The debate on the international stage is more consequential because it is about something more fundamental -- whether intellectual property is good for society.

When it comes to development issues, critics of intellectual property have little patience for the niceties of IP law. They say the needs of the poor should take precedence over the rights of intellectual property owners. The argument is far more compelling than any offered by U.S. critics of intellectual property, who are worked up over whether DJ Danger Mouse can sample the Beatles' White Album. We all want to and should help the dying mother in Africa unable to afford AIDS drugs or the poor kid without the books she needs to learn. The new international IP agenda demands a thoughtful response that addresses its moral and practical consequences.

The Response to the New International IP Agenda

Having a heart for the poor does not call for getting rid of intellectual property rights. We should stop treating the people of the developing world as victims, forever at the mercy of corporations and more developed countries. Yes, we should find ways to help the poor with the needs of the moment. That short term poverty, however, does not mean that they cannot help themselves to prosper. But to do so, they need the same institutions that have helped the people of developed nations to fulfill their potential: The rule of law and private property rights, including intellectual property.

As the late, great economist, Julian Simon argued, people are the ultimate resource. There are third world countries, but there is no such thing as a third world mind. As Simon was fond of saying, there are potential new Einsteins, Mozarts, and Michelangelos being born every day in every country. What do these nascent geniuses need to realize their potential to benefit their nations and the world? So many things would help -- security, education, and most of all, liberty. But innovation and creativity require a particular kind of nourishment. Development expert Robert Sherwood explains:

        "If people seem to be more inventive in the United States or Europe or 
        Japan, it is not an accident. It is not because of genes or schooling 
        or intelligence or fate. Implementation of the intellectual property system is 
        critical because of the habit of mind which is fostered in the population. 
        Human ingenuity and creativity are not dispersed unevenly across the globe. 
        Those talents are present in every country. In some, unfortunately, 
        the enabling infrastructure of effective intellectual property protection 
        is missing."

Like people everywhere, people of developing nations can and do invent things. Indeed, when they immigrate to developed countries they are often among the most creative and inventive people in their new homes. The problem in developing countries is that there is little reward for innovation. In conversations with developing world businessmen, Sherwood found that they were well aware of the consequences of the lack of intellectual property rights. These businessmen often did stumble onto innovations, but rivals would soon copy them. In such circumstances, a smart businessman knows that putting resources into innovation and creativity is a bad investment. You cannot capture a return, and you have no property right in which others can invest. In the absence of intellectual property laws, innovation must remain accidental and creative work is for amateurs.

In his acclaimed book, The Mystery of Capital, Hernando de Soto identified the lack of well-defined property rights as the root of many of the troubles of the developing world. Without clear, enforceable property rights, people in developing nations cannot unlock the value of the capital they hold. In developed nations, property rights and the rule of law help people to secure loans, raise investment, enter contracts, and make plans knowing that what they have today will not be taken tomorrow. Not so in much of the developing world. De Soto estimates that poor people in developing nations hold trillions and trillions of dollars worth of capital, but it remains "dead capital" because the lack of property rights prevents it from being developed. De Soto's argument largely focuses on real property, but it applies to intellectual property with equal force. A vast amount of intellectual capital in the developing world is underdeveloped, and we are all poorer for it.

In recent decades, we have experienced wondrous new things springing from the innovation and creativity of a relative handful of the world's people. Most of those people come from a minority of the world's nations -- not because the people in those nations are smarter or work harder, but because they live in countries that are free, governed by the rule of law, and provide the encouragement and investment fostered by intellectual property rights.

As people in the developed world argue over how long the law should give Disney the exclusive right to Mickey Mouse, they need to remember the blessings of intellectual property rights. Yes, intellectual property laws are imperfect and sometimes abused, but they have helped create the most prosperous, dynamic, and enjoyable society the world has ever known.

Critics are right when they say that we need to do more than simply demand that developing nations respect the intellectual property rights of the developed world. But we will not help the developing world by discouraging it from doing what has helped the developed world to prosper. If we truly have a heart for the poor, we should help them build institutions that foster intellectual property rights. Unlocking the creativity of all the world's people is a worthy development agenda.

The author is Assistant Professor, Southern Illinois University School of Law



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