Intellectual Property Rulemaking in the Global Capitalist Economy

Essay: Peter K. Yu. INTELLECTUAL PROPERTY RULEMAKING IN THE GLOBAL CAPITALIST ECONOMY.

URL = http://www.peteryu.com/andersen.pdf

Source: Peter K. Yu, The International Enclosure Movement, 82 Ind. L.J. 827 (2007).

Abstract

"The chapter begins by tracing the international enclosure movement from the creation of Berne and Paris Conventions to the establishment of the TRIPs Agreement and the recent bilateral and regional trade agreements. It explains how the one-size-fits-all standards required by the latter agreements have drastically reduced the policy space available to less developed countries. The chapter then examines the resistance efforts put up by less developed countries during the Doha Development Round of Trade Negotiations (―Doha Round). It discusses, in particular, the Doha Declaration on the TRIPS Agreement and Public Health (―Doha Declaration), the Decision on the Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health (―August 30 Decision), and the proposed article 31bis of the TRIPs Agreement. The chapter concludes with a brief discussion of the root causes of the international enclosure movement and offers suggestions on how countries can reform the international intellectual property system—both to restore its balance and to reclaim their lost policy space." (http://www.peteryu.com/andersen.pdf)

Introduction

Peter Yu:

"In the global capitalist economy, people, goods, services, capital, culture, and ideas flow through borders with ease, and countries interact with each other in a complex, interdependent economic relationship. As information and knowledge become increasingly commodified, high-technology goods and services have become a staple of both domestic and crossborder trade. In many developed and middle-income developing countries, information- and entertainment-based industries now constitute some of the most highly important and fastest growing sectors in the national economy. The protection of intellectual property rights has therefore moved from a meager domestic or bilateral issue to the forefront of the international trade debate.

For many economic actors—whether they be wealthy developed countries or powerful transnational corporations—intellectual property provides the key ingredients for developing new forms of economic wealth and organization. At its core, intellectual property protection provides economic incentives for authors and investors to create.1 Without these incentives, authors and inventors may be unable to recoup the time, effort, or resources they expended in the creative and inventive processes, and society would be worse off. From the macroeconomic standpoint, a well-functioning intellectual property system may also bring to a country its much-needed foreign investment, creating new jobs, facilitating technology transfer, promoting indigenous industries and technologies, and generating considerable tax revenues.

Notwithstanding these benefits, economic incentives do not provide the primary motivation for all creative and inventive activities. For example, I do not need economic incentives to write an email to thank Birgitte Andersen for putting together this interesting volume, even though such an email is eligible for copyright protection if it is original, sufficiently creative, and satisfies other statutory requirements. Likewise, parents do not need economic incentives to take snapshots of their children, although those snapshots are also eligible for copyright protection—and may sell for a large sum of money if these children turn out to be celebrities later in their lives. In fact, because intellectual property rights were not ―invented until a few centuries ago, many important inventions in humankind have been created without the economic incentives generated by the intellectual property system. The old adage, ―necessity is the mother of all inventions, remains a valid explanation for the emergence of many historical inventions.

To complicate matters, economists have questioned the linkage between the strength of intellectual property protection and the volume of foreign direct investment, particularly in countries whose intellectual property system is underdeveloped or out of balance.3 As they point out, by creating limited monopolies, the protection of intellectual property rights may incur considerable economic costs. If these costs are high enough, they eventually may offset the overall benefits derived from the intellectual property system. Among the documented costs are administrative and enforcement costs, adjustment costs due to labor displacement, social costs associated with monopoly pricing, higher imitation and innovation costs, and potential costs resulting from the abuse of intellectual property rights. Thus, if countries are to benefit from their intellectual property systems, they need to strike the right balance between proprietary interests and public access needs in their intellectual property system. To do so, they need wide policy space—or, in political terms, autonomy and sovereign discretion—to design their intellectual property system. Unfortunately, the growing push for high international intellectual property standards by developed countries has taken away the policy space needed by less developed countries. (Throughout this chapter, the term ―less developed countries will be used to cover both developing and least developed countries as referred to by the TRIPs Agreement.)

In recent years, commentators like James Boyle and Yochai Benkler, have extensively discussed a movement to ―fence off the public domain and turn freely-available raw materials into private property.5 Professor Boyle termed this movement the ―second enclosure movement, comparing it to the earlier enclosure movement in England. While this second enclosure movement is important and alarming, a different—and I would argue more important—movement is taking place at the global level. This movement is largely the result of rapid globalization, the increasing economic dependence on information- and knowledge-based goods and services, and the wide range of efforts to harmonize international rules and standards, especially in the intellectual property area.

For comparative purposes and rhetorical effectiveness, I will describe the latter phenomenon as the ―international enclosure movement. Unlike the second enclosure movement, which fences off the public domain, this international enclosure movement fences off areas that provide attractive policy options for individual countries. As a result, less developed countries are increasingly forced to introduce intellectual property standards that do not sit well with their conditions, capabilities, interests, and priorities. They are unable to catch up with developed countries, and they have great difficulty in responding to problems within their borders—the massive HIV/AIDS crises being a very good but disturbing example."