TEXTS
The Injustice of Intellectual Property
By Peter Drahos
Intellectual property rights are growing in strength and spreading.
Many people working in Internet-related businesses would be wearily
familiar with cease and desist letters from intellectual property
owners alleging infringement of a trade mark, patent or copyright.
Amazon’s “1-click” patent is but one example of many thousands of
patents that relate to the most basic functions of the Internet,
including the transmission and receipt of files. Intellectual property
used to be a civil matter, but these days you can go to jail for
infringing someone’s intellectual property. Aside from using the
criminal law to police their monopolies, intellectual property owners
also sermonize to the rest of us on what we should and should not be
doing. The Recording Industry Association of America’s website says
that in addition to parents giving their kids guidance about sex, drugs
and alcohol, they should also talk to them about the immorality of
sharing music files.
Hardly
an area of social life remains untouched by intellectual property
issues. Research scientists find themselves worrying as much about who
owns the intellectual property rights in the research tools they need
to solve a problem, as they do about the problem itself. School
teachers, musicians, lecturers, programmers have to steer their way
through thickets of copyright rules in order to be able to do their
jobs. Small to medium-sized companies, which never bothered much with
intellectual property protection, spend more and more time worrying
about it.
The one constant in all of this is the cacophony of
intellectual property lawyers. In the manner of a Greek chorus they
wail for more and more protection of intellectual property. It’s a
great form of protection to be in, because intellectual property is
invisible and intangible. No matter how much money it hands over to the
lawyers, a company can’t be sure that it has done enough to protect
these invisible assets. And then there is the uncomfortable fact that
these assets can grow through exchange. When people get together and
exchange ideas, information and knowledge these things grow. There are
also examples of business models based on open domain approaches to
information. The growth of the Free Software movement and the use by
some businesses of software licences that permit free access to the
source code of a program is a case in point. This suggests that there
are alternative and less costly strategies for dealing with intangible
assets.
Should we be worried about the rising tide of
intellectual property regulation? The answer depends on who is the “we”
in the question. Some individual firms have a lot to gain from
increased levels of intellectual property protection because they are
large enough to afford the costs of intellectual property systems. IBM
takes out roughly 2000 patents a year in the US market alone. Not many
firms, however, can afford the cost of so many patents.
If we
think of intellectual property protection as a kind of arms race, we
can see that firms should think very carefully before entering the
race. An arms race in intellectual property is expensive because you
are forever paying the lawyers to escalate to new levels of protection.
In an arms race it’s hard to get ahead and even harder to stay ahead.
There can only be one winner and that is the person with the deepest
pockets. There is also a basic paradox if you want your company to
remain innovative. Innovation depends on people communicating with each
other. The more that you place your creative people in intellectual
property cells, the more risks you take with the innovation process.
Not
all firms will benefit from the global paradigm of intellectual
property that is emerging through the World Trade Organization and
other international organizations like the World Intellectual Property
Organization. Probably only a few will. Not many countries will benefit
either because most are net intellectual property importers. By
agreeing to ever higher standards of intellectual property developing
countries especially are simply worsening their terms of trade. Most
patents in developing countries are owned by foreigners, mainly by US
and European patentees. Increasing patent protection benefits, in
income terms, the US and to a lesser extent Europe. It is not just
about patents, however. Increased copyright protection for textbooks,
journals and computer programs will raise the costs of mass education
in developing countries. Basically intellectual property begins to look
like a game in which the rich have found new ways to rob the poor.
The
stench of hypocrisy is everywhere when it comes to the US and Europe
setting the rules of the intellectual property game. These countries
grew economically in the nineteenth and first part of the twentieth
century using strategies of technological imitation. Developing
countries will not be given the same sovereignty over their growth
policies. The whole point of intellectual property is to block
imitation and competition. The US and Europe mouth the importance of
human rights, but apparently the right to health of poor people in
developing countries does not count. Why else have the US and Europe
done so little to reform the patent rules at the WTO to help poor
people gain access to patented drugs for diseases like HIV/AIDS? In
fact, the draft deal that was tabled at the WTO last December actually
strengthens the hand of US and European pharmaceutical multinationals.
The US and Europe preach a pro-development rhetoric, but they send
their bullying trade negotiators to inflict further trade losses on
developing countries in bilateral deals that see intellectual property
protection ratcheted up and up. Developing countries are obliged to
protect Western intellectual property assets. They also face protected
agricultural markets in the US and Europe. Apparently the economic
despair that arose in European countries because of the
beggar-thy-neighbour trade policies that prevailed between the First
and Second World Wars has been forgotten in the West.
One of
the real dangers of global intellectual property rules is that they
might eventually blow the world’s trade regime out of the water. Trade
is about goods and services moving across borders. But intellectual
property law through its complex rules on parallel importation,
exhaustion of rights and doctrines of infringement allows owners of
intellectual property to stop the movement of goods. Europe, for
example, is busily exploring how the intellectual property in
geographical indications can be extended to include high recognition
terms like ‘feta’, ‘bratwurst’ and ‘brut’. A lot of the new
protectionism that will confront developing countries will be hidden
under the cloak of intellectual property law’s complexity.
The
globalization of intellectual property that we are witnessing is part
of a familiar colonial phenomenon. The basis of competition lies in the
development of skills and knowledge. When newcomers acquire skills and
knowledge they disturb roles and hierarchies. The success of the Indian
pharmaceutical industry fundamentally threatens those at the top of an
international hierarchy of pharmaceutical production – the US, Europe
and Japan. Underneath the moral rhetoric of intellectual property there
lies an agenda of underdevelopment. It is all about protecting the
knowledge and skills of the leaders of the pack.
Peter Drahos
is Professor at he Australian National University. His latest book on
intellectual property, co-authored with John Braithwaite, is
Information Feudalism: Who Owns The Knowledge Economy? (Earthscan,
London, 2002 and the New Press, New York, 2003).
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