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02. 5.2008

IPRs in BRIC Economies

Following post-World War II efforts by the major industrialized nations to reintegrate the global economy through Bretton Woods and other international policies, less developed nations faced the prospects of entering the global stage at different phases of economic and industrial maturity. Consequently, views of international trade were shaped by nations’ unique economic situations. As history has shown, economies subsequently adopted more open vs. closed trade practices based on immediate economic-industrial challenges.

Researchers Robert Bird and Daniel Cahoy have released a new paper on how the BRIC economies (Brazil, Russia, India, China) are taking steps towards adopting and enforcing stronger IP laws, while balancing new IP rules with their economic situations. The Emerging BRIC Economies: Lessons from Intellectual Property Negotiation and Enforcement, Northwestern Journal of Technology and Intellectual Property, 2007.

It is tempting to view the BRIC’s options for the future from one of two opposing perspectives: (1) the Western property rights view, which argues for strong legal protections and the rejection of free-riding when a country has the economic strength to participate in global innovation, or (2) the Southern open access view, calling for a noble resistance to the coercion of industrialized oppressors intent on maximizing profits without a realistic understanding of development needs...

On one hand, the BRICs seem to respond to the economic incentive to limit IP enforcement when home industries can effectively copy the creativity and technology of industrialized nations. Conversely, the property rights push can seem a bit disingenuous in view of the fact that many western nations owe aspects of their economic development to a lack of IP Protection. As a result, nations often end up talking past each other or resorting to grudging conciliation without truly understanding the others’ needs.

Perhaps the dichotomous narrative is simply wrong on both counts. One can argue that it misses a middle ground that may better characterize the optimal future relationship of the BRICs with developed countries, as well as the larger developing world. It is possible that a hybrid model of IP protection and occasional exception—a process of convergence and resistance—will provide the mix necessary for developing countries to gain an economic foothold, protect the health and safety of their citizens, and play a responsible and vital role in the world economy. This model may not mimic the regimes of industrialized nations now, or event in the distant future. But it may provide a predictable projection the value of investment incentives in these growing global markets.

Although the BRIC economies may approach IPRs grudgingly, they must balance the extent to which they defy stronger IP laws and enforcement with the consequences on their trade relationships and long term development. For example, with the first industrial revolution, nations such as Germany “leap-frogged” by copying others’ machinery, production techniques and business models. One German statesman reportedly said: “We will gladly copy what we admire.” Germany would later adopt stringent IP laws to maximize the benefits of local commercial activity. Now, in the current global economy, based on innovations protectable by copyrights and patents, copying of foreign inventions that could be valuable to non-dominant nations is often prohibited. At the same time, enforcing strong IP laws will draw more foreign investment, provide consumers with greater access to modern goods and help mobilize local industry. Weak IP regimes may be beneficial in the maturing stages of industrialization, however long term economic goals require respect for copyrights and patents.

posted by Noel Le @ 12:15 PM | Academia , International

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01.30.2008

NDN Globalization Initiative Report Out

The NDN Globalization Initiative has released a report entitled "The Idea-Based Economy and Globalization: The Real Foundations of American Prosperity in the 21st Century," by Dr. Robert J. Shapiro.

He writes of the changing landscape of economic value:

Federal Reserve data show that since the mid-1990s, U.S. companies have invested as much in intangibles–mainly the intellectual property of patents and trademarks, as well as databases, branding, organizational changes and the training or human capital to use these ideas–as in physical assets, from equipment to land and buildings. For the first time, intangible assets are more important business investments than physical assets.
This shift is evident in the way U.S. and international investors value America’s public companies. In 1984, the market value of the physical assets of the top 150 U.S. public companies – their “book value” – accounted for 75 percent of the total value of their stocks. A firm was worth nearly what its plant, equipment and real estate could be sold for. By 2004, the book value of the top 150 U.S. corporations accounted for 36 percent of the total value of their shares. Nearly two-thirds of the value of large companies now comes from what they know and the ideas and relationships they own.

Continue reading NDN Globalization Initiative Report Out . . .

posted by Solveig Singleton @ 9:51 AM | International , Markets: Business, Investment & Innovation

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01.28.2008

International Software Patents

A report from the Financial Times on an important ruling in the UK-

Hi-tech companies will be able to patent software programs after a key court decision that may move the UK closer to Europe in its treatment of computer related inventions.

The (UK) High Court yesterday said that the Patent Office was incorrectly applying the law in automatically rejecting claims for computer programs, in a case brought by four small British businesses.
...
If companies can show that their programs make a substantive inventive contribution they will be eligible for protection regardless of the fact that they are distributed on a computer disc, the court said.

This is good for innovation. Per the news coverage on beneficiaries of the decision-

The ruling should help level the playing field in an industry dominated by corporate titans such as Microsoft and Oracle, intellectual property experts said.

"This is a win for hard-working inventors and small businesses, who need patent protection to take advantage of any niche in the market," said Ed Round, a patent attorney at Marks & Clerk.
...
The decision should ease the burden on small technology companies who were going to Europe to seek patent protection, where the hurdle for computer-related patents is generally lower, lawyers said.

posted by Noel Le @ 11:20 AM | International

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01.24.2008

OECD Countries Pull Further Ahead

The OECD released new research on emerging national innovation practices in member countries. I found several salient points-

More and more OECD governments are giving firms tax breaks to drive innovation while cutting their direct (federal) spending on business R&D and are also encouraging public research organisations to commercialise their inventions, according to a new OECD report.

Tax breaks OECD governments recognize the importance of private sector investment in innovating activity. Commercial entities are in the best position to gauge technological areas sustainable by business supply-consumer demand market dynamics. Tax breaks give businesses further incentive to undertake basic R&D for innovations spanning years ahead rather than merely focusing on applied R&D or tweaking existing inventions.

Cutting back federal business R&D By shifting reliance for business R&D onto commercial entities, OECD nations' observe the argument by many economists, such as Michael Porter, that innovation is the providence of the business sector and not government. Historically, nations that fostered private commercial activity experienced greater economic growth and innovation than those unsupportive of private enterprise. Even when governments played central roles in developing new technologies, such as DARPA funding of early Internet technologies, successful policies encouraged for-profit business participation.

Commercializing public research Increasing innovation through commercialization of public research is consistent with the ex-post economic justification for patents and technology transfer policies such as the Bayh-Dole Act (and its foreign counterparts). Innovation in public R&D best serves society through commercialization by getting out of the lab and into useful application.

posted by Noel Le @ 10:08 AM | International

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01.22.2008

Stockholm Network on Developing Nations & Pharma IP

A new paper from the Stockholm Network on developing countries and pharmaceutical patents. In a review of the empirical literature, the report finds, among other things:

Continue reading Stockholm Network on Developing Nations & Pharma IP . . .

posted by Solveig Singleton @ 1:11 PM | International , Patents , Pharma

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11.28.2007

Tyler Cowan on Chinese Movie Piracy

In "Chinese Movie Piracy is Overestimated," Tyler Cowan blogs a paper on the issue, and comments follow.

"Pilgrim" makes a good point in commenting that the reason that China is such a concern is partly because of their significant exports to other markets, even if domestic consumption of the products were low due to the generally low standard of living.

And, as always, one might reasonable point out that not every product necessarily would have been a sale. And that poverty in such countries makes that even less likely. But these points only go so far. Business models have to be forward looking. Someone who buys a pirated product is certainly a part of a potential market, if not a current market. Standards of living rise--potentially quite quickly.

posted by Solveig Singleton @ 1:38 PM | Academia , Enforcement & Remedies , International

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More WHO Antics--Roger Bate Reports

The American has an article by Roger Bate assessing current compulsory licensing trends at WHO:

The drug companies have tried voice: they have pointed out the need to make some profit from middle-income markets; they have complained to governments, activists, the media, and anyone that will listen; and they have tried litigation and threats of exit. Perhaps it is time to actually try exit.
The first to take action might be Novartis. According to several sources, the company has shelved plans to build a $500 million factory in Brazil that would manufacture an anti-meningitis vaccine.

posted by Solveig Singleton @ 8:12 AM | International , Patents , Pharma

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11.27.2007

Patents, Meds, and the Developing World: Clips & Links

Recently, there are reports of more compulsory licensing for 20 more drugs in Thailand; and a conference is announced to celebrate this strategy.

Hence this series of links and clips.

On April 11, http://www.africasia.com/services/news reported on a plan that seems to implicitly suggest that African states might set aside an array of patents (sorry, no present link):

"We need to produce (medicines) in Africa. We have the potential, why do we want to take them from outside when we can take it in Africa?" Mamadou Diallo, chief pharmacist in the AU commission's medical services directorate, told AFP.
"The main objective is to identify which kinds of medicines we are going to produce, essential drugs we need for Africa, and who is going to produce these drugs."

Many African countries currently rely on India and China for imports of affordable generic drugs, but both countries are subject to patent laws which threaten Africa's access to the medicines.

According to Diallo, Africa has all the resources and capacity at its disposal to manufacture essential medicines for the opportunistic infections like tuberculosis, malaria and HIV/AIDS which plague the continent.

It is sad that the plan to produce the drugs in Africa apparently does not extend to actually inventing and developing more such drugs in Africa--or then the patents would be important.

Contrast Alec Van Gelder's article on African medicines:

The UN Economic Commission for Africa endorses fears that “drastic trade liberalization, particularly substantial reductions in tariff, could entail, for instance, loss of tariff revenue hence fiscal difficulties.” The anti-globalisation group Oxfam issued a 128-page document in 2005 called “Why Developing Countries Need Tariffs”, as part of the Trade Justice Movement coalition.
All of this means that many religious, aid and international organisations think incomes for bureaucrats matter more than prices for citizens. They also believe that tariffs protect local industries and allow them to grow up into competitive industries.

Thus Tanzania imposed on 26 July a 10 per cent tariff on imported medicines, to protect what it called its “infant medicine industries.”

What about real infants? The immediate effect of this new tariff will be deadly. “Low income of the majority of the Tanzanian population hinders their accessibility to health services as medicines and other services are unaffordable,” according to the World Health Organisation. The average Tanzanian earns US$744 annually--a 10 % increase in the cost of medicines can make the difference between life and death for the 21.7% of the population that suffers from malnutrition.

While few of the world’s poorest--and least healthy--countries have any viable pharmaceutical sectors, a shocking number apply similar taxes and tariffs on medicines. A 2005 American Enterprise Institute study revealed that over 33 countries impose levies higher than the new Tanzanian rate.

Continue reading Patents, Meds, and the Developing World: Clips & Links . . .

posted by Solveig Singleton @ 10:02 AM | International , Patents

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11. 6.2007

Delong on EU's Microsoft Decision

Jim Delong on the EU's Microsoft theory--and the implications for the rest of tech. He notes among other things:

Any company with a significant market share could be defined as "dominant," and forced to disaggregate an integrated product into as many separate pieces as the EC, or competitors, desire. The possibility is very real that the EU will force manufacturers to forego integration lest they run afoul of some objection filed in the future, complete with retroactive fines, and force consumers to pay for the integration services.

For an immediate example, makers of integrated circuits should worry. As Moore’s Law works its magic, they are incorporating into a single chip features that were once put on complementary chips, as recently noted by tech investment guru Paul McWilliams.

posted by Solveig Singleton @ 7:47 AM | International , Software , Standards

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09.26.2007

Further Asian Roundup

Thailand "negotiates" for cancer drugs.

More on India and innovation.

In India, price controls on some medicines are seen as threat to investment.

World economic freedom report for 2007 released in India: In this year’s main index, Hong Kong retains the highest rating for economic freedom, 8.9 out of 10. The other top scorers are: Singapore (8.8), New Zealand (8.5), Switzerland (8.3), Canada (8.1), United Kingdom (8.1), United States (8.1), Estonia (8.0), Australia (7.9), and Ireland (7.9). The rankings and scores of other large economies are Germany, 18 (7.6); Japan, 22 (7.5); Mexico, 44 (7.1); France, 52 (7.0); Italy, 52 (7.0); India, 69 (6.6); China, 86 (6.3); Brazil, 101 (6.0); and Russia, 112 (5.8).

Nintendo targets Korean sites for piracy.

posted by Solveig Singleton @ 8:20 AM | International

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08.29.2007

International R&D and IPRs

posted by Noel Le @ 12:34 PM | Academia , International

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08.28.2007

WHO on Innovation, IP & Health

posted by Solveig Singleton @ 3:58 PM | International , Pharma

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08.26.2007