This article was downloaded by: [Northeastern University]On: 19 November 2014, At: 17:33Publisher: RoutledgeInforma Ltd Registered in England and Wales Registered Number: 1072954 Registeredoffice: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK

Information & CommunicationsTechnology LawPublication details, including instructions for authors andsubscription information:http://www.tandfonline.com/loi/cict20

From information to property and backagainVirginia Brown Keyder aa Bosphorus University and Sabanci University , TurkeyPublished online: 20 Aug 2006.

To cite this article: Virginia Brown Keyder (2005) From information to property and back again,Information & Communications Technology Law, 14:3, 299-312

To link to this article: http://dx.doi.org/10.1080/13600830500377061

PLEASE SCROLL DOWN FOR ARTICLE

Taylor & Francis makes every effort to ensure the accuracy of all the information (the“Content”) contained in the publications on our platform. However, Taylor & Francis,our agents, and our licensors make no representations or warranties whatsoever as tothe accuracy, completeness, or suitability for any purpose of the Content. Any opinionsand views expressed in this publication are the opinions and views of the authors,and are not the views of or endorsed by Taylor & Francis. The accuracy of the Contentshould not be relied upon and should be independently verified with primary sourcesof information. Taylor and Francis shall not be liable for any losses, actions, claims,proceedings, demands, costs, expenses, damages, and other liabilities whatsoever orhowsoever caused arising directly or indirectly in connection with, in relation to or arisingout of the use of the Content.

This article may be used for research, teaching, and private study purposes. Anysubstantial or systematic reproduction, redistribution, reselling, loan, sub-licensing,systematic supply, or distribution in any form to anyone is expressly forbidden. Terms &Conditions of access and use can be found at http://www.tandfonline.com/page/terms-and-conditions

From Information to Property and Back Again

VIRGINIA BROWN KEYDER

Bosphorus University and Sabanci University, Turkey

ABSTRACT The paper traces the ascendance of intellectual property law to the summit ofeconomic life in all countries from the 1960s onwards before a backlash started to emergein recent years in courtrooms, parliaments and public forums particularly in the US andEurope, among NGOs, public interest groups and international organizations. It arguesthat the widespread feeling that the international intellectual property regime has onlybenefited the multinational corporations and not the broader public in the developing anddeveloped countries may generate problems which no amount of military power will beable to mitigate. The paper therefore calls for global justice and a return to the balancebetween encouraging innovation and fostering public benefit in intellectual property law.

The US Perspective

Last summer, John Ashcroft’s Deputy Chief of Staff David Israelite said ‘We viewIP theft as a threat to our national security . . . As we move into the future, oureconomy is going to be increasingly dependent on our ability to protect IP. If theftincreases at the rate we see long term, you’re looking at a scenario for economicdisaster.’ (Blum.)

On 9 January 2005, Ted C. Fishman of The New York Times reported a statementmade to him by a US consular official in China to the effect that, ‘’Nothing has ahigher priority in our trade policy than the fight to protect American intellectualproperty. It is every bit as important an effort for us as the war against weapons ofmass destruction.’

In defense of the new US-drafted (before the invasion and after consultationswith the RIAA) Iraqi copyright law (which includes protection of titles,compilation of data and recitals of the Holy Koran, none of which are protectedin the US), Grover Norquist in defense of his suggested changes to Iraqi copyrightlaw, said, ‘The right to trade, property rights, these things are not to be determinedby some democratic election.’ (Palast.) (This law, along with new trademark andpatent laws, and approximately 100 others including an MAI-type investment lawwere brought to Iraq and enacted as part of the US invasion.)

In 2004, the US House Judiciary Committee issued a statement calling for‘single, low-cost world patents’. In its own words:

The cost to U.S. companies and inventors of applying for and obtainingseparate patents in each of 150 or more countries is prohibitive. Indeveloping countries and even in Europe, patent fees are at such high

Information & Communications Technology Law,Vol. 14, No. 3, October 2005

ISSN 1360-0834 print/ISSN 1469-8404 online/05/030299–14 � Taylor & Francis

DOI: 10.1080/13600830500377061

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

17:

33 1

9 N

ovem

ber

2014

levels that they constitute a tax on innovation. European government feesto obtain and maintain a patent are more than ten times the fees in theU.S. In addition, the expense of retaining separate patent attorneys oragents in each foreign country is burdensome and expensive. The UnitedStates could take a leadership role in negotiating an agreement underwhich countries would give full faith and credit to patents granted by aninternational organization or one of the three largest patent offices in theworld – the U.S. Patent Office, the European Patent Office, or theJapanese Patent Office. Countries giving full faith and credit wouldcharge a minimal fee for patenting in that country, and it would beunnecessary to retain separate patent attorneys or agents to obtain apatent in that country. The obstacles to negotiating and implementingsuch an arrangement would be formidable, but a single low-cost worldpatent is the best long-term approach to obtaining effective world-widepatent protection for U.S. companies and inventors.1

Recent suggestions put forward for international policing of US IP haveincluded plans to post prosecutors abroad, and simplify extradition to the US ofthose suspected of IP ‘crimes’ committed abroad.2 (This, in spite of the US Court ofAppeals for the Federal Circuit’s reiteration only weeks ago in Fuji Photo Film Co.,Ltd. v. Jazz Photo Corp. et al. (03-1324 – 1331) that the ‘United States patent systemdoes not provide for extraterritorial effect . . .’ (Int’l Rectifier Corp. v. Samsung ElecsCo., 361 F. 3d 1355, 136) [and] ‘Further, it is well known that United States patentlaws ‘do not and were not intended to, operate beyond the limits of the UnitedStates’ quoting Brown v. Duchesne, 60 U.S. 183, 195 [1856]).

In this context, a recent statement by then National Security AdviserCondoleezza Rice expressing opposition to measures outlawing torture on thegrounds that it ‘provides legal protections to foreign prisoners to which they arenot now entitled under applicable law and policy’ (New York Times, 13 January2005) gains new poignancy.

Polarization and its discontents

The message of these officials is clear, and confirms the US’s increasing distancefrom multilateralism, its refusal to be bound by international legal norms or acceptother nations’ sovereignty, and its willingness to expand and act indefinitely on itsown definition of self-defense.

It is well known, but needs to be said, that intellectual property (IP) law, thevehicle for determining what information is free to use and what information hasbeen locked up as property, began life as a bargain. It is a pact between the state onthe one hand, which offered its courts to protect limited monopolies or privilegesgranted to creators of products embodying new ideas on the presumption that athinking society is a prosperous society, and the public as heir to those ideas on theother. This balance has been set out in many universally acclaimed documentsfrom the US Constitution to the Universal Declaration of Human Rights.

How, and more particularly by whom, IP law has been formulated andexercised in recent years has given rise to a response, a reaction, or more precisely,a backlash, today. Over the past thirty years, and especially in the last ten,American and to a lesser extent, European, multinationals have successfullyprevailed on their governments to impose a legal framework for the protection of

300 V. B. Keyder

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

17:

33 1

9 N

ovem

ber

2014

IP not only in their own countries, but around the world. The backlash to thiswestern-multinational corporate vision of IP is being articulated not only bytheorists such as Lawrence Lessig and James Boyle (through defense of the publicdomain, fair use and open source philosophy), but also by national andinternational NGOs through lobbying and publicity, by competitors of IPrightsholders such as generic drug makers, and by citizens who feel their interestsincreasingly ignored in favor of corporate contributors to the law-making process.Finally, it is being rejected by bodies within the state itself whose health budgetdeficits leave them no choice but to circumvent the stranglehold of bigpharmaceuticals and those under their influence.

Reaction is being expressed by jurists as well. Judge Mukasey of US DistrictCourt of the Southern District of New York recently advised unsuccessfultrademark plaintiff Tommy Hilfiger to ‘chill’ after rejecting his claim against acanine perfume maker for his use of the name ‘Tommy Holedigger’ (TommyHilfiger Licensing, Inc. v. Nature Labs). Again from the animal world, the JapaneseSupreme Court found in Tecmo Ltd. V. Kanamorimori & others (Tessensohn) thathorses had no right to prevent unauthorized commercial use of their name. On amore serious note, the recent House of Lords decision in which Amgen’s patentfor epogen, a genetically engineered form of erythropoitin (EPO), was found notonly uninfringed but invalid, has been described as one of the most importantpatent decisions in the last twenty years. Amgen, said the decision, ‘havinginvented a perfectly good and ground-breaking process for making EPO and itsanalogues, they were determined to try to patent the protein itself, notwithstand-ing that, even when isolated, it was not new.’ (Tait.) Even the pro-IP Eldred v.Ashcroft, wherein the US Supreme Court (2003) decided on the validity of theeleventh extension of the US copyright term to 95 years, was followed by thatCourt’s decision in Dastar Corp. v. Twentieth Century Fox Film Corp. (2003) whichheld that s. 43(a) of the Lanham Act ‘does not prevent the unaccredited copying ofa work that is in the public domain.’ Some scholars saw this as a ‘reaction to theconcerns of a shrinking public domain as a result of its decision in Eldred.’(Hoffman.) These, along with the Chinese High Court’s recent rejection of theViagra patent and numerous other similar decisions the all bear witness to judicialsentiment that IP law has possibly reached its zenith.

Finally, of course, is the worldwide challenge to IP by ever-more successfulpirates, whose clients feel vindicated by high prices (and judicially declared cartelsin the case of the record industry). Heavy-handed tactics, such as increasing prisonterms as encouraged by the US (with its unshakeable belief in growing levels ofincarceration) have largely failed in the rest of the world, and where theconsumers’ choice comes down to buying from pirates or not at all, the decision topatronize them is an easy one.

The empire strikes back

A new perspective is also being heard from lawyers in developing countries,particularly India, who have now acquired the skills, the vision and theeconomic interests to challenge the validity of internationally acquired patentson both western drugs and on substances ‘extracted’ from developing countries.Defeat of the neem, basmati and turmeric patents (Raj) all signal that the sunmight be setting on biopiracy-based patents. One prominent lawyer, JayDeshmukh, of Indian pharma giant Ranbaxy was recently in the limelight for

From Information to Property and Back Again 301

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

17:

33 1

9 N

ovem

ber

2014

his challenge to the validity of the patent for Lipitor, due to expire in 2006, onthe grounds that it does not cover the form of a key ingredient, atorvastatin.Ranbaxy alleges that Pfizer misrepresented that fact to the USPTO when it wonan extension on the patent until 2010. Although Ranbaxy largely failed in theUS, it was successful in the UK.

China has acquired, in addition to the skills of its lawyers and judges, themarket clout to demand improvement of terms in Microsoft’s release of a newsimpler Windows at a lower price.

Background to worldwide IP

IP law was not a global issue and certainly not a trade issue before the 1980s, priorto which IP treaties (Paris and Bern) largely facilitated mutually recognizedprotection by all residents of signatory states through national treatment andpriorities. When a US or European inventor wanted to patent an invention orregister a trademark in another country, his/her lawyer would contact colleaguesabroad to perform the necessary national applications. Responding to manyfactors arising in and after the late 1960s (namely the appearance of copyingtechnologies, the expansion of areas subject to IP protection, and the desire ofsome governments to get out of the research business and pass on the gains andrisks to the private sector) and later to the various elements of globalization, theentire landscape of IP changed.

With globalization, as made manifest in the 1995 World Trade Agreement(WTA), corporations (themselves the recipient of new status and powerthroughout out the world) in Europe and America pressured their traderepresentatives to impose through ‘negotiations’ identical IP laws on all nationswho wished to join the WTO. Designed to protect the value of developedcountries’ exports (covered almost totally by some form of IP) for which WTAopened the way by maintaining price levels, collecting license fees and securingthe use of national courts everywhere to pursue infringers, ‘harmonization’ washeralded as the new levelling through universal rule of law, the new equality. Itwas bound to conflict with the interests, and the sovereignty, of poorercountries, however, and concerns over access to educational materials andmedicines and diagnostics necessary for public health, along with control overtheir own agriculture have been paramount in the reaction of developingcountries.

Harmonization (successfully developed in the European Community as ameans to achieve a single market) was resisted by many countries in the context ofthe World Trade Organization (WTO). Most developing countries had weak IPlaws at best, and those that existed were often left over from colonial times. Inreturn for accepting this unpopular WTO entry condition, developing countriesextracted from their developed counterparts a promise to dismantle the 1974Multi-Fiber Agreement barriers to textile imports and to reduce agriculturalsubsidies and tariffs so as to open markets to their products. Theoretically, WTObrought an end to two important ‘first world’ obstacles to world trade—agricultural subsidies and textile protectionism—while ushering in a major anti-trade edifice: near-universal IP national monopolies.

Ten years on, we see that trade-related aspects of intellectual property (or theTRIPS section of the WTA) has spread IP law over the globe like thick ooze,covering everything from orange juice and the sound of a Harley Davidson to

302 V. B. Keyder

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

17:

33 1

9 N

ovem

ber

2014

ways of doing business. We see the vast majority of the world’s IP owned bycorporations headquartered and established in a country which today unabash-edly gives unprecedented weight to the demands of a certain segment of its owncorporations over both the welfare of its own citizens and international law.

If the spread of IP has made significant progress in the last decade, it has takenat least that long for developed countries to even begin to carry through onpromises made in 1995. In practice, agricultural subsidies to developed countries’farmers have continued to rise. 2002 saw subsidies rise by $80 billion in the US.According to a 2004 World Bank study, OECD countries spent well over $200billion supporting domestic farm products in 2001 – 2002, through direct subsidiesand import tariffs. Agricultural subsidies show little sign of fading and in factsubsidized agricultural products continue to be dumped on developing countriessuch that not only is export capacity of these countries nullified, but also theirability to compete in their own local markets. So unsuccessful have moves underWTO been to remove agricultural subsidies that the World Bank has recentlyreleased a study delineating the nature of current subsidies and the dangers toworld poverty they represent.

Textile barriers have only recently (1 January 2005) come down, and then withconsiderable calls from the US to maintain its protectionist practices, particularlyagainst the largest and most efficient textile producer, China. ‘On Oxfam’sfigures, the US duty levied on Sri Lanka for exports of clothing and textiles alonewas $244 million in 2003. The EU charged $77m in the same year. In Indonesia,the corresponding charges were $426m and $180m. Tariffs are so harsh that thecharity estimates the overall income lost to the developing world at $40 billion.Western generosity is woefully selective’. (Mary Riddell, Observer, 9 January2005.)

Reaction widespread

Locking up of ideas through US and US-inspired laws has not been universallypopular even within the US itself. University researchers, though increasinglyfunded (and having their research topics dictated) by corporate sponsors andmany wading waist-deep in licensing income undreamed of in the past, havebegun to see their research capabilities seriously thwarted by ‘patent thickets’ andresearch results locked in unaffordable journals. Those affected by suchdevelopments in the US have provided a considerable impetus to the backlashamong non-US economic actors.

This backlash against the excesses of IP law are today focused on TRIPS, Super-TRIPS bilateral agreements and other pressures being brought to bear ondeveloping countries. One theoretical center of this backlash is the intellectualresponse of the open-source movements (widespread but centered on figures likeLawrence Lessig) and attempts to revive the strength of the public domain, asdeveloped by James Boyle and others. Beyond this, the stridency of the movementhas been fueled by:

1. the reaction of developing countries to both the AIDS crisis and the morediffuse problems of unequal distribution;

2. the growing fragility of the compact between states and their citizens, in termsof the impossibility of serving both the needs of IP rights-holding corporationsand the citizenry;

From Information to Property and Back Again 303

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

17:

33 1

9 N

ovem

ber

2014

3. the battle among the various capitalist actors in today’s world economy, asrepresented in conflicts, for example, such as that between genericpharmaceutical manufacturers on the one hand, and branded drug manu-facturers on the other, or the textile lobby and the retail sector.

The fact that this is being played out in an international environment dominatedby one militant, belligerent, unilateral superpower is also a major factor inunderstanding the reaction to the highly beneficial treatment bestowed on thatpower’s own corporations at the expense of everyone else.

Today we see a world where virtually everything contains intellectualproperty. This new ‘enclosures movement’ has unleashed privatization on ascale undreamed of in human history. New forms of IP, most recently and mostprominently in the form of ‘data exclusivities’ are being devised anddisseminated throughout the world the mechanisms outlined above. Poorercountries are being forced to construct expensive IP systems (in the sense of newlaws, new information systems, new bureaucracies, expensive retraining oflawyers and judiciary, international reporting requirements, etc.), the prices ofpharmaceuticals and agricultural inputs are increasing steadily, and criminalsanctions are being expanded (although the 2004 IP Enforcement Directive(2004/48 EC) failed to mandate criminal sanctions). A new draft directive wouldmake all commercial violations of IP a crime (see CCM [2005] 276 final fornew Council Framework Decisions and Directives). Mercifully, many existingsanctions throughout the world are being ignored by judges who cannot acceptthat copiers of software should receive the same prison sentence as a driver whoinadvertently commits manslaughter on the road. In the US however, new lawshave been proposed to further strengthen criminal penalties. Under theIntellectual Property Protection Act 2005, stronger penalties have been combinedwith new government powers of seizure.

Today the most powerful and aggressive force the world has ever knownproduces comparatively little but intellectual property, and what ‘goods’ itactually still produces are heavily laden with IP as well. An increasing number ofUS corporations produce nothing tangible, but deal only in IP, their incomesderived from prosecution and licensing of IP. Those US corporations that stillproduce do so on an increasingly outsourced basis, thus exposing IP to potentialcopiers in exchange for ever-cheaper labor. This in turn strengthens theirperceived need for universally harmonized IP laws. Often the fruits ofinfringement proceedings are factored into their business plan. Some companies,like Intellectual Ventures LLC, have no other business than to buy unworkedpatents with a view to suing infringers (Forston).

The protection of ideas has gained unprecedented prominence in law overthe past two or three decades. In terms of legal rights and remedies, theoptions to prosecution of IP have expanded considerably. Infringement hasgone from a wrong giving rise to civil tort damages to a right of property (inNew York State, this is traced to a 1921 case, Fisher v. Star, dealing with thecartoon characters of Mutt and Jeff. The judge here stated ‘Any civil right notunlawful in itself nor against public policy, that has acquired a pecuniary valuebecomes a property right that is entitled to protection as such’), to one whoseviolation entails ever-increasing criminal liability. Statements such as thosequoted above indicate that even stronger unilateral international sanctions maywell follow.

304 V. B. Keyder

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

17:

33 1

9 N

ovem

ber

2014

What has been largely ignored, primarily due to the aggressive stance taken bydefenders of US interests (on the old theory that the best defense is a goodoffence), is that the US has put itself in highly vulnerable position. Were themajority of nations to decide tomorrow morning to stop protecting intellectualproperty, the US economy would collapse. Given its recent record of reliance onmilitary strength to achieve control over offshore resources, it is not hard toimagine that this might result in military action similar to that used to the otherpillar of western economies, oil. The US has already announced an expandeddomestic role for the Pentagon in pursuing economic espionage, or the stealing oftrade secrets (Pincus, Washington Post, 27 November 2005).

Under the rubric of harmonization, the US, champion of its own sovereignty toa degree that has moved it to abandon all restraints on its behavior imposed byinternational law, has forced nations to enact laws which arguably benefit onlyitself. Its first line of attack was under its s. 301 (of 1974 Trade Act) procedure(though a subject of WTO decision which allowed its continuation only because ithad other functions that violation WTA it is still being used to threaten othernations with unilateral sanctions), then TRIPS, then super-TRIPS bilateral andmultilateral ‘free trade’ agreements. Most recently, as mentioned above, it spreadits preferred version of IP law when it marched Iraq with laws apparently draftedwell before the invasion, though whether as general war gear or specifically forIraq is unknown [Palast]). These laws spelled out advantages to the US that wouldeven be unacceptable at home. Crucially, farmers’ rights to reuse seeds, forexample, are not merely absent as an exception to patent rights, but are subject toabsolute prohibition. (Contrast with e.g. India’s August 2001 Protection of PlantVarieties and Farmers Rights Act Farmers Rights Act, a sui generis option compliantwith TRIPS where breeders, researchers, the government, the public and farmersare given rights.)

Data exclusivity—case in point

Iraq’s new patent law includes (within the Patent Law itself, though such rightshave no direct relation to patent law) data exclusivity protection, a highlycontroversial issue throughout the world today, which, contrary to widespreadpropaganda is not mandated by TRIPS. Art. 39 of TRIPS requires only thatmembers protect undisclosed information in accordance with Art. 10 bis of ParisConvention, and data submitted to governments or governmental agencies. 39(3)mandates that ‘Members, when requiring, as a condition of approving themarketing of pharmaceutical or of agricultural chemical products which utilize newchemical entities, the submission of undisclosed test or other data, the originationof which involves a considerable effort, shall protect such data against unfaircommercial use. In addition, Members shall protect such data against disclosure,except where necessary to protect the public, or unless steps are taken to ensure that thedata are protected against unfair commercial use’ (emphasis added). The US andEurope fulfill this obligation by requiring exclusive data protection for five andten years from drug registration or authorization, respectively, as is theirprivilege as sovereign entities.

Other, notably developing, countries do not feel this serves their interests,however, and have not followed this path. India, a country with an increasinglystrong pharmaceutical lobby has nevertheless chosen not to legislate forexclusive data protection, but rather to follow, in keeping with the balance of

From Information to Property and Back Again 305

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

17:

33 1

9 N

ovem

ber

2014

interests on which IP law is based, the guidelines set out in Art. 7 of TRIPS. Thissets out the objectives of contributing to ‘to the promotion of technologicalinnovation and to the transfer and dissemination of technology, to the mutualadvantage of producers and users of technological knowledge and in a mannerconducive to social and economic welfare, and to a balance of rights and obligations’(emphasis added). India has decided to protect such data from unfaircommercial rather than to ‘commodify’ it as a new member of the intellectual‘property’ family.

As a reminder of the difference between IP and unfair competition, it isinteresting to remember WIPO’s delineation of their respective functions:

Industrial property deals principally with the protection of inventions,marks (trademarks and service marks) and industrial designs, and therepression of unfair competition. The three subjects first mentioned havecertain features in common inasmuch as protection is granted forinventions, marks and industrial designs in the form of exclusiverights of exploitation. The repression of unfair competition is notconcerned with exclusive rights, but is directed against acts ofcompetition contrary to honest practices in industrial or commercialmatters, for example, in relation to undisclosed information (tradesecrets). (www.wipo.org)

Special attention is given here to data exclusivity for three reasons. It is, first ofall, perhaps one of the most obvious examples of the harm to the public of turningyet another form of information into property: a government collects andevaluates information to protect the public from dangerous drugs but then mustdeny access to that information both to itself and to those who would put it to theuse for which it was intended (both by the requirement itself, i.e. to provideaffordable health care, and in the context of the ‘IP bargain’ mentioned above andset out in the US constitution and the UN Declaration on Human Rights) byturning it to property owned by providers of the information. Properly placed,this exclusion of information from the public may well serve to effectively extendthe life of the exclusivity provided by the patent.

Second, the distinction set out by WIPO is, in this context, provingincomprehensible to negotiators and legislators in many countries, and thisconfusion is not lost on highly skilled US and EU negotiators. Whether this is dueto intentional obfuscation or simple lack of familiarity with the increasinglyintricate workings of pharmaceutical law is a mute question. The fact is thatpeople do not understand the ramifications of what they are being asked tolegislate and thus fall prey to the representations of local branches of multinationalpharmaceutical companies over the interests of their own citizens.

Third, given the trend towards cost-cutting outsourcing and recent scandals inthe US involving FDA approval of drugs later (and often earlier) proved to bedangerous, many pharmaceutical companies are moving their clinical trialsabroad (where they are called ‘research’ thus providing dubious evidence that Rand D will follow IP law). Pressing for ‘data exclusivity’, i.e. the conversion ofinformation required for public safety into private property, gains newimportance and protection for such companies. Although many drug companiesare now voluntarily agreeing to publish negative data alongside positive clinicalresults in an effort to avoid mandatory disclosure of such tests, this is obviously

306 V. B. Keyder

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

17:

33 1

9 N

ovem

ber

2014

not an ideal solution and hiding negative results behind developing countries’data exclusivity laws is far more effective.

Reaction

Eroding sovereignty, and an escalating inability to provide affordable education,health care, a productive and self-sufficient agricultural policy free from foreignclaims to inputs are seriously affecting governance in developing countries. Theseissues are increasingly tied up with the international IP regime. Researcheverywhere is suffering from IP ‘thickets’, as more and more ideas are lockedup in IP. It should be no surprise to anyone that a backlash is unfolding. Thequestion remains as to how developing countries can proceed to best protect theirdevelopmental interests, and their populations. Similar questions are being askedin certain segments of the US and European economies as well, most notably byuniversity researchers, those segments of the state apparatus whose job it is toassure healthcare, and competitors of well represented economic actors, such asgenerics firms and the retail sector.

Reactions to the trends exhibited by US, and to a lesser degree, European,lawmakers and IP owners have noticeably accelerated in recent years. In 2001Duke University Law School in North Carolina held what some have called thefirst conference devoted to the study of the public domain where scholarsexplored the origins of public domain and its relevance to the digital, art andculture and scientific and technical data. Numerous websites such as those oforganizations like IP Justice, Public Knowledge, Creative Commons, ElectronicFrontier Foundation, Union for Public Domain, Public Library of Science andGrain have emerged in recent years to explain and advise on strategies forresponding to IP owners’ exaggerated lobbying capabilities and greed. Morerecently institutions such as UNCTAD, The Royal Academy in the UK, the USFederal Trade Commission, World Bank (see Poor People’s Knowledge—PromotingIntellectual Property in Developing Countries, a 263-page report on how poorcountries can commercialize traditional knowledge) and even the Quakers in theircommissioned study of the history of intellectual (Dutfield and Suthersanen) havemade important contributions to providing alternatives that both protect IP andpreserve the function around which it developed.

The work of these organizations has confirmed and publicized the fact thatmany of the premises on which the expansion of IP is based are simply false.Among them are:

1. The development argument, that says that only through establishingintellectual property rights will countries be able to reach levels ofdevelopment similar to those of the US and Europe. No country institutedIP regimes before they had the industries which could use them. France, forexample, only allowed pharmaceuticals to be patented in 1960, Ireland in1964, Germany in 1968, Japan in 1976, Switzerland in 1977, Italy and Swedenin 1978, and Spain in 1992. Brazil and India, embarking on pharmaceuticalproduction passed laws to exclude pharmaceuticals (Dutfield and Suthersa-nen). Switzerland between 1850 and 1907 and the Netherlands between 1869and 1912 did not recognize patents at all (Monbiot).

2. The investment argument that says countries without advanced IP laws willreceive no foreign investment. This argument is two-pronged: first, that

From Information to Property and Back Again 307

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

17:

33 1

9 N

ovem

ber

2014

companies in the developed world need high returns on their investment,securable only through IP law, in order to continue their work on life-savingdrugs needed by the rest of the world; and second, that such companies willonly invest in developing countries with highly developed IP laws. First, it hasbeen shown that investment in new research is often well below half of what isspent on marketing by many large companies. Much of the research that isdone goes into wealthy-country life-style drugs (aimed at curing bad sex lives,hair-loss, and general malaise, etc.) rather than into curing diseases thatplague most of the world. The latter are seen as unprofitable and are virtuallyignored. On the second point, corporations invest in countries where mentaland manual labor are cheap, as indicated by the massive move of jobs,including high-tech jobs, to India and China. As Nagesh Kumar has pointedout, investment in Indian ‘availability of abundant trained low cost humanresources and scale of on-going R and D in their own fields appears to be moreimportant considerations for location of R and D in developing countries thanthe strength of patent protection’. There is little doubt that comparative laborcosts are by far the most important reason for foreign investment in today’sglobal economy. Even the drafting of patents is moving to India, a trend thatstarted long before current patent reforms were on the table in that country(Sandburg).

As a recent World Bank study states: ‘It must be emphasized that strongIPRs alone are insufficient for generating strong incentives for firms to investin a country. If that were the case, recent FDI flows to developing economieswould have gone largely to Sub-Saharan Africa and Eastern Europe. Incontrast, Brazil, China, and other high-growth, large-market developingeconomies with weak protection would not have attracted nearly as much FDIif investment were heavily dependent solely on IPRs’ (Maskus).

3. The research argument, that says that corporations will only conduct researchin those countries with IP laws. Again, the increasing relocation of R & Dto India belie this argument. Calling clinical trials, moved off-shore forquestionable reasons, primary research does not make it so.

4. The economic loss argument, which sees every pirated copy as a lost sale.Given the prices of IP-laden products such as films, music and books, no onein developing countries would even be able to contemplate buying thesegoods at market prices. Ghosh cites the example of software prices: ‘The priceof a typical, basic proprietary toolset required for any ICT infrastructure,Windows XP together with Office XP, is US$560 in the U.S. This is over 2.5months of GDP/capita in South Africa and over 16 months of GDP/capita inVietnam. This is the equivalent of charging a single-user licence fee in the U.S.of US$7,541 and US$48,011’.

In pharmaceuticals, it is clear that even in the US (where prices are by farthe highest in the world), drugs are beyond the reach of a large segment of thepopulation who must either acquire their drugs elsewhere or go without.The move to brand Internet or other over-the-border purchases of legallyproduced drugs as illegal or (as a scare tactic) dangerous is perhaps the bestexample of IP as anti-trade.

5. The moral argument, that ‘stealing is bad’. Most rational people still equatestealing with depriving an owner of his goods, a notion not easily reconcilablewith the purchase of a DVD of a movie one would never be able to see in thecinema or buy at market prices. Furthermore, rampant historical and

308 V. B. Keyder

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

17:

33 1

9 N

ovem

ber

2014

contemporary biopiracy (we need not go back to the colonial legacy here) andthe ‘privatization’ by corporations based in developed countries of traditionalknowledge of inhabitants of developing countries, coupled with thegargantuan loss of moral authority by the US in recent years have lessenedthe persuasiveness of this argument. Even within the developed world, asindividual states in the US, for example, struggle to provide health careagainst the greed of pharmaceutical companies, it becomes increasinglydifficult to play the moral card on the companies’ behalf. The US response toSouth African attempts to acquire drugs through compulsory license andparallel imports (neither of which can be described as immoral or a violationof TRIPS) stripped the world of any illusion that morality plays a role in IP.The success of Monsanto’s lawsuits, and in particular the eight-month prisonsentence and $1.7 million damages levied against a Tennessee cotton farmerKem Ralph in 2004 for hiding a truckload of seed for a friend have donenothing to convince anyone that morality is an issue in the intellectualproperty law.

6. The incentive argument: this argument says that IP as currently structured isnecessary to provide incentives to new authors and innovators. Many havechallenged the notion that rights which continue for seventy years after thedeath of the author really provide any meaningful incentives. Most patentstoday are not for new inventions but rather for minute improvement on or newuses for older inventions designed to extend the life of the monopoly. It is atautology that patents provide incentive, in an era where applicants are almostuniversally corporations, whose sole function is profit. These corporations aremerely going about the very business for which they were established: todevelop and sell products. While true ‘invention’ can only be done byindividuals, or at most by a small group of determined skilled workers, theincentive for invention in this context is to maintain or acquire employment.

The exposure of the fallacies of these arguments has enabled a more objectiveassessment of the true function and value of IP rights.

A new perspective within TRIPS

Events in the last three years have given rise to a new impetus for developingcountries to escape the constraints imposed upon them through TRIPs. The 2001anthrax debacle in the US, resulting in President Bush threatening to resort tocompulsory license and parallel imports to secure vaccines from Germanpharmaceutical company, Bayer, in order to appear to be dealing with the‘national emergency’ of 14 deaths, blew a huge hole (possibly only the first ofmany if the bird flu scare continues apace) in the US defense of its ideology thatsuch measures were anathema to IP’s role in world trade and development. SouthAfrica’s defense of its 1997 legislative authorization of parallel imports of drugs atthe 2001 TRIPS Council meeting was also influential in the November 2001adoption of the Declaration on TRIPS and Public Health. WTO members agreedafter long negotiations that TRIPS ‘does not and should not prevent membersfrom taking measures to protect public health’. The right to grant compulsorylicense (as provided in Art. 31 of TRIPS) and ‘the freedom to determine thegrounds upon which such licenses are granted’ were reaffirmed, but it was left tothe 30 August 2003 Decision to escape the requirement that compulsory license be

From Information to Property and Back Again 309

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

17:

33 1

9 N

ovem

ber

2014

limited to domestic use and to provide a waiver on the limitation of exports ofgoods produced under compulsory license (Tuosto). This waiver is onlytemporary however and so far no country has actually used it. It is interestingto note that the US reportedly requested, in light of its Tamiflu shortage, that itsname be removed from the list of countries that had agreed not to import drugsproduced under compulsory license elsewhere. This apparently did not preventthe US from bringing pressure against developing countries not to use thecompulsory license provisions by offering trade deals in exchange, and fromresponding that ‘aggressive opposition to the US way of doing things wascounter-productive’ (citing two articles in the Guardian by Sarah Boseley of 14 and15 July, entitled ‘France accuses US of AIDS blackmail’ and ‘US defendsabstinence policy amid uproar’, respectively).

In May 2004 Canada became first country to implement the DOHADeclaration on TRIPS and Public Health, making it easier for generics to obtaina compulsory license, and limiting patentees submissions of appropriateness ofsuch licenses except where abuse of the system is alleged (ABA IPL newsletter,Fall, 2004).

Calls for a ‘right to development’ presented to WIPO, an arm of the UN, byBrazil and Argentina, as representing a number of countries and NGOs in October2004, were built on the WTO August 2003 Cancun Decision to allow moreflexibility in the application of the compulsory licensing provision of the TRIPSAgreement. Countries backing this right demanded, among other things, thatWIPO back off on its support of the Substantive Patent Law Treaty which would‘considerably raise patent protection standards, creating new obligations thatdeveloping countries will hardly be able to implement. In the course ofdiscussions, developing countries have proposed amendments to improve thedraft SPLT by making it more responsive to public interest concerns and thespecific development needs of developing countries.’ (A Development Agenda forWIPO.) Many organizations have arisen to take alternative roads to solve theproblems presented by the rise of IP-based warriers to health and development.The centre for the Management of Intellectual Property is but one (see ‘FTReport - Understanding Medical Innovation’, Financial Times, 25 November 2005for further references and organizations).

The US continues to aggressively introduce domestic legislation at the behestits corporations to further criminalize IP infringement. A description of legislationas summarized on a number of websites operated by organizations mentionedabove, is attached as Appendix A. Given the relative failure of furthercriminalization of IP infringement to protect rightsholders’ interests, and theEU’s current refusal to mandate criminal sanctions in its recent IP EnforcementDirective, it is at least arguable that the influence of the US is waning. Given itsvulnerability, however, it is not impossible that tactics like those seen in Iraq willnot be attempted in other countries. IP has gone way beyond a mere economicissue in its potential for international conflict. Events in Iraq and the success ofinternational cohesion in the interests of public health, development and genuinefree trade will determine where it will end.

Notes

1 http://judiciary.house.gov/about.aspx?Section=62 http://www.export.gov/stop_fakes_gov/index.asp

310 V. B. Keyder

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

17:

33 1

9 N

ovem

ber

2014

References

Boyle, J. (2003) The opposite of property, Law and Contemporary Problems, 66(1 – 2).Basu, S. (2003) Doha declaration nearly decided—the fate of medicine access in poor countries, Bulatlat,

August 31 – September 6, reprinted from Znet/Global Economy.Boldrin, M. & Levine, D.K. (2002) The Case against Intellectual Property (University of Minnesota and

UCLA).Blum, V. (2004) The strange GOP-Hollywood alliance: justice department prepares to join fight against

digital pirates, Legal Times, 19 July.Boyle, J. (2004) A manifesto on WIPO and the future of intellectual property, Duke L. & Tech. Rev., 0009.Clement, M. (2004) Rice imperialism: the agribusiness threat to Third World rice production, Bulatlat,

8 – 14 February.Cullet, P. (2004) Human rights and intellectual property, Working Paper 4, International Environmental

Law Research Center, Geneva.Cullet, P. (2001) Patents bill, trips and right to health, Economic and Political Weekly, 27 October.Dutfield, G. & Suthersanen, U. (2004) Harmonization or differentiation in intellectual property

protection, Quaker United Nations Office, Occasional Paper No. 15, August.Espada, D. (2002) Plant variety protection act: farm law to safeguard TNCs—but not planters, Bulatlat,

15 – 21 December.Finger, J.M. & Schuler, P. (Eds) (2004) Poor People’s Knowledge—Promoting Intellectual Property in

Developing Countries (World Bank and OUP).Fink, C. & Maskus, K.E. (2005) Intellectual Property and Development—Lessons from Recent Economic

Research (World Bank).Forston, D. (2004) The big squeeze: more companies are making a business solely out of patent

licensing. Is this the start of an IP Armageddon, IP Law and Business, 29 November.Ghosh (2004) The opportunities of free/libre/open source software for developing Countries.

Unpublished paper presented at UNCTAD-ICTSD Dialogue on Moving the Pro-development IP

Agenda Forward: Preserving Public Goods in Health, Education and Learning, Bellagio, 29 November –3 December 2004.

Goel, R. (2005) India: data exclusivity—its interpretation and India, Mondaq, 7 January.Heller, M. & Eisenberg, R. (1998) Can patents deter innovation? The anticommons in biomedical

research, Science, 280(5364), pp. 698 – 701.Hoffman, B.T. (2004) An art lawyer’s musings on the intellectual property debate in the digital age:

defining the delicate balance, NYSBA Bright Ideas, Fall.Kaplan, W. & Laing, R. (2004) Priority Medicines for Europe and the World (World Health Organization).Kumar, N. (2003) Intellectual property rights, technology and economic development: experiences of

Asian countries, Economic and Political Weekly, 18 January.Lesser, W. (2001) The Effects of TRIPs-Mandated Intellectual Property Rights on Economic Activities in

Developing Countries (WIPO).Lohr, S. (2004) Knowing their politics by their software, New York Times, 5 July.Maskus, K.E. (2005) The role of intellectual property rights in encouraging foreign direct investment

and technology transfer, in Intellectual Property and Development–Lessons in Recent Economic Research

(World Bank).Monbiot, G. (2002) Patent nonsense—companies now demanding intellectual property rights were built

up without them, The Guardian, 12 March.Okediji, R. (2004) Development in the information age issues in the regulation of intellectual property

rights, computer software and electronic commerce, Issue Paper No. 9 UNCTAD.Ott, R. (2004) Protection of plant varieties and the farmers rights act, OKLA Journal of Law and

Technology, 14.Palast, G. (2004) Big business the key to US strategy people’s press printing society Ltd, Morning Star, 9

November.Perelman, M. (2002) Steal this Idea (Palgrave).Rai, A. & Eisenberg, R. (2000) Bayh-dole reform and the progress of biomedicine, Law and Contemporary

Problems, 289.Raj, R.D. (2000) Biopiracy-friendly laws worry neem battle winner, Asia Times, 27 May.Rajkumar, R. (2005) The central American Free Trade Agreement: an end run around the DOHA

declaration on TRIPS and public health, 15 Alb. L.J. Sci. & Tech., 433.Reisinger, S. (2004) Giant slayer, Corporate Counsel, 30 December.Rost, P. (2004) Big pharma’s dirty little secret, Los Angeles Times, 26 December.

From Information to Property and Back Again 311

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

17:

33 1

9 N

ovem

ber

2014

Sandburg, B. (2005) India inked, The Recorder, 18 January.Slind-Flor, V. (2004) Can these mice be saved?: Fenwick lawyers say that DuPont’s licensing terms are

preventing researchers from using the Harvard Mouse, IP Law and Business, 30 September.Story, A. (2004) Intellectual property and computer software—a battle of competing use and access

visions for countries of the South, UNCTAD, Intellectual Property Rights and Sustainable Development,Issue Paper 10, May 2004.

Tait, N. (2004) A patently valid decision, Financial Times, 8 November.Tessensohn, J.A. (2004) Publicity rights for horses reined in by supreme court of Japan, NYSBA Bright

Ideas, Fall.Tuosto, C. (2004) The TRIPS council decision of August 30, 2003 on the import of pharmaceuticals

under compulsory license, EIPR, December.Zagaris, B. (2004) U.S. starts anti-counterfeiting initiative, International Enforcement Law Reporter,

December.

Reports

Trade Progress Report (2004) Focus on Agricultural Trade (World Bank).

Integrating Intellectual Property Rights and Development Policy Report of the[UK] Commission on Intellectual Property Rights (2002) Established by Secretaryof State for International Development, May 2001.

Report by the Federal Trade Commission (2003) To Promote Innovation: The ProperBalance of Competition and Patent Law and Policy, October.

312 V. B. Keyder

Dow

nloa

ded

by [

Nor

thea

ster

n U

nive

rsity

] at

17:

33 1

9 N

ovem

ber

2014