Globalization and Intellectual Property 2006929347, 9780754624035

Table of contents :
Cover
Half Title
Title Page
Copyright Page
Table of Contents
Acknowledgements
Series Preface
Dedication
Introduction
PART I THE POLITICS AND ECONOMICS OF GLOBAL INTELLECTUAL PROPERTIZATION
1 ‘The International Relations of Intellectual Property’, Cambridge Law Journal, 52, pp. 46–63
2 ‘Why IPRs are a Global Political Issue’, European Intellectual Property Review, 25, pp. 1–5
3 ‘The Economics of Intellectual Property Rights and the GATT: A View from the South’, Vanderbilt Journal of Transnational Law, 22, pp. 243–64
PART II TRADE-LINKED INTELLECTUAL PROPERTY NEGOTIATIONS: LATERALISMS AND TRIPS
4 ‘Battle of Lateralisms: Intellectual Property and Trade’, Boston University International Law Journal, 8, pp. 239–46
5 ‘Industry Strategies for Intellectual Property and Trade: The Quest for TRIPS, and Post-TRIPS Strategies’, Cardozo Journal of International and Comparative Law, 10, pp. 79–108
6 ‘BITs and BIPs: Bilateralism in Intellectual Property’, Journal of World Intellectual Property, 4, pp. 791–808
PART III NEO-IMPERIALISM? GLOBAL INTELLECTUAL PROPERTIZATION IN A POST-COLONIAL AGE
7 ‘The Global Intellectual Property System and Sub-Saharan Africa: A Prognostic Reflection’, Toledo Law Review, 33, pp. 749–71
8 ‘North-South Disputes Over the Protection of Intellectual Property’, Canadian Journal of Economics Revue canadienne d’Economique, 29, pp. S376–S81
9 ‘TRIPS - Natural Rights and a “Polite Form of Economic Imperialism’” , Vanderbilt Journal of Transnational Law, 29, pp. 415–70
10 ‘Neocolonialism, Anticommons Property, and Biopiracy in the (Not-So-Brave) New World Order of International Intellectual Property Protection’, Indiana Journal of Global Legal Studies, 6, pp. 11–58
PART IV GLOBALIZATION’S EFFECTS ON INTELLECTUAL PROPERTY LAW’S CLASSIC DOCTRINES AND RATIONALES
11 ‘The Integration of International and Domestic Intellectual Property Lawmaking’, Columbia - VLA Journal of Law and the Arts, 23, pp. 307–15
12 ‘A Long, Strange TRIPS: The Pharmaceutical Industry Drive to Harmonize Global Intellectual Property Rules, and the Remaining WTO Legal Alternatives available to Third World Countries’, University of Pennsylvania Journal of International Economic Law, 17, pp. 1069–125
13 ‘Harmonization and the Goals of Copyright: Property Rights or Cultural Progress?’, Indiana Journal of Global Legal Studies, 6, pp. 117–38
14 ‘The Globalization of Private Knowledge Goods and the Privatization of Global Public Goods’, in Keith E. Maskus and Jerome H. Reichman (eds), International Public Goods and Transfer Technology: Under a Globalized Intellectual Property Regime, Cambridge: Cambridge University Press, pp. 3–45
PART V BEYOND LAW: CULTURAL EFFECTS OF GLOBAL INTELLECTUAL PROPERTIZATION
15 ‘The Impact of Foreign Investment on Indigenous Culture: An Intellectual Property Perspective’, North Carolina Journal of International Law and Commercial Regulation, 23, pp. 229–80
16 ‘Has Creativity Died in the Third World? Some Implications of the Internationalization of Intellectual Property’, Denver Journal of International Law and Policy, 24, pp. 109–44
17 ‘(Intellectual) Property and Sovereignty: Notes Toward a Cultural Geography of Authorship’, Stanford Law Review, 48, pp. 1293–355
18 ‘The Cultural Life of Things: Anthropological Approaches to Law and Society in Conditions of Globalization’, American University Journal of International Law and Policy, 10, pp. 791–835
Name Index

Citation preview

Globalization and Intellectual Property

The International Library of Essays on Globalization and Law Series Editor: Michael K. Addo Titles in the Series: The Globalization of International Law Paul Schiff Berman Globalization and International Investment Fiona Beveridge Globalization and E-Commerce Indira Carr Globalization and Intellectual Property Alexandra George Globalization and International Organizations Edward Kwakwa

Globalization and Intellectual Property

Edited

by

Alexandra George Queen Mary, University o f London, UK

O

Routledge Taylor & Francis Group

LONDON AND NEW YORK

First published 2006 by Ashgate Publishing

Published 2016 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon 0X14 4RN 711 Third Avenue, New York, NY 10017, USA Routledge is an imprint o f the Taylor & Francis Group, an informa business Copyright © 2006 Alexandra George. For copyright of individual articles please refer to the Acknowledgements. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval s ystem, without permission in writing from the publishers. Notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. British Library Cataloguing in Publication Data

Globalization and intellectual property. - (The international library of essays on globalization and law) 1.International property 2.Globalization I.George, Alexandra 346\048 Library o f Congress Control Number: 2006929347 ISBN 9780754624035 (hbk)

Contents Acknowledgements Series Preface Introduction PART I

THE POLITICS AND ECONOMICS OF GLOBAL INTELLECTUAL PROPERTIZATION

1 W.R. Cornish (1993), ‘The International Relations of Intellectual Property’, Cambridge Law Journal, 52, pp. 46-63. 2 Christopher May (2003), ‘Why IPRs are a Global Political Issue’, European Intellectual Property Review, 25, pp. 1—5. 3 Carlos Alberto Primo Braga (1989), ‘The Economics of Intellectual Property Rights and the GATT: A View from the South’, Vanderbilt Journal o f Transnational Law, 22, pp. 243-64. PART II

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3 21

27

TRADE-LINKED INTELLECTUAL PROPERTY NEGOTIATIONS: LATERALISMS AND TRIPS

4

Robert P. Merges (1990), ‘Battle of Lateralisms: Intellectual Property and Trade’, Boston University International Law Journal, 8, pp. 239-46. 5 Susan K. Sell (2002), ‘Industry Strategies for Intellectual Property and Trade: The Quest for TRIPS, and Post-TRIPS Strategies’, Cardozo Journal o f International and Comparative Law, 10, pp. 79-108. 6 Peter Drahos (2001), ‘BITs and BIPs: Bilateralism in Intellectual Property’, Journal o f World Intellectual Property, 4, pp. 791-808.

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PART III NEO-IMPERIALISM? GLOBAL INTELLECTUAL PROPERTIZATION IN A POST-COLONIAL AGE 7 Adebambo Adewopo (2002), ‘The Global Intellectual Property System and SubSaharan Africa: A Prognostic Reflection’, Toledo Law Review, 33, pp. 749-71. 8 R. Stephen Richardson and James D. Gaisford (1996), ‘North-South Disputes Over the Protection of Intellectual Property’, Canadian Journal o f Economics Revue canadienne dEconomique, 29, pp. S376-S81. 9 A. Samuel Oddi (1996), ‘TRIPS - Natural Rights and a “Polite Form of Economic Imperialism’” , Vanderbilt Journal o f Transnational Law, 29, pp. 415-70.

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10 Keith Aoki (1998), ‘Neocolonialism, Anticommons Property, and Biopiracy in the (Not-So-Brave) New World Order of International Intellectual Property Protection’, Indiana Journal o f Global Legal Studies, 6, pp. 11-58.

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PART IV GLOBALIZATION’S EFFECTS ON INTELLECTUAL PROPERTY LAW’S CLASSIC DOCTRINES AND RATIONALES 11 Graeme B. Dinwoodie (2000), ‘The Integration of International and Domestic Intellectual Property Lawmaking’, Columbia - VLA Journal o f Law and the Arts, 23, pp. 307-15. 12 Robert Weissman (1996), ‘A Long, Strange TRIPS: The Pharmaceutical Industry Drive to Harmonize Global Intellectual Property Rules, and the Remaining WTO Legal Alternatives available to Third World Countries’, University o f Pennsylvania Journal o f International Economic Law, 17, pp. 1069-125. 13 Kenneth D. Crews (1998), ‘Harmonization and the Goals of Copyright: Property Rights or Cultural Progress?’, Indiana Journal o f Global Legal Studies, 6, pp. 117-38. 14 Keith E. Maskus and Jerome H. Reichman (2005), ‘The Globalization of Private Knowledge Goods and the Privatization of Global Public Goods’, in Keith E. Maskus and Jerome H. Reichman (eds), International Public Goods and Transfer Technology: Under a Globalized Intellectual Property Regime, Cambridge: Cambridge University Press, pp. 3—45. PART V

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BEYOND LAW: CULTURAL EFFECTS OF GLOBAL INTELLECTUAL PROPERTIZATION

15 Doris Estelle Long (1998), ‘The Impact of Foreign Investment on Indigenous Culture: An Intellectual Property Perspective’, North Carolina Journal o f International Law and Commercial Regulation, 23, pp. 229-80. 16 Ruth L. Gana (1995), ‘Has Creativity Died in the Third World? Some Implications of the Internationalization of Intellectual Property’, Denver Journal o f International Law and Policy, 24, pp. 109—44. 17 Keith Aoki (1995), ‘(Intellectual) Property and Sovereignty: Notes Toward a Cultural Geography of Authorship’, Stanford Law Review, 48, pp. 1293-355. 18 Rosemary J. Coombe (1995), ‘The Cultural Life of Things: Anthropological Approaches to Law and Society in Conditions of Globalization’, American University Journal o f International Law and Policy, 10, pp. 791-835. Name Index

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Acknowledgements The editor and publishers wish to thank the following for permission to use copyright material. Adebambo Adewopo for the essay: Adebambo Adewopo (2002), ‘The Global Intellectual Property System and Sub-Saharan Africa: A Prognostic Reflection’, Toledo Law Review, 33, pp. 749-71. Blackwell Publishing for the essay: R. Stephen Richardson and James D. Gaisford (1996), ‘North-South Disputes Over the Protection of Intellectual Property’, Canadian Journal o f Economics Revue canadienne dEconomique, 29, pp. S376-S81. Cambridge University Press for the essay: Keith E. Maskus and Jerome H. Reichman (2005), ‘The Globalization of Private Knowledge Goods and the Privatization of Global Public Goods’, in Keith E. Maskus and Jerome H. Reichman (eds), International Public Goods and Transfer Technology: Under a Globalized Intellectual Property Regime, Cambridge: Cambridge University Press, pp. 3—45. Copyright © 2005 Keith E. Maskus and Jerome H. Reichman, reproduced with permission of the authors and publisher. Cardozo Journal of International and Comparative Law for the essay: Susan K. Sell (2002), ‘Industry Strategies for Intellectual Property and Trade: The Quest for TRIPS, and Post-TRIPS Strategies’, Cardozo Journal o f International and Comparative Law, 10, pp. 79-108. Copyright Clearance Center for the essay: Keith Aoki (1995), ‘(Intellectual) Property and Sovereignty: Notes Toward a Cultural Geography of Authorship’, Stanford Law Review, 48, pp. 1293-355. Indiana University Press for the essay: Keith Aoki (1998), ‘Neocolonialism, Anticommons Property, and Biopiracy in the (Not-So-Brave) New World Order of International Intellectual Property Protection’, Indiana Journal o f Global Legal Studies, 6, pp. 11-58; Kenneth D. Crews (1998), ‘Harmonization and the Goals of Copyright: Property Rights or Cultural Progress?’, Indiana Journal o f Global Legal Studies, 6, pp. 117-38. Journal of World Intellectual Property for the essay: Peter Drahos (2001), ‘BITS and BIPS: Bilateralism in Intellectual Property’, Journal o f World Intellectual Property, 4, pp. 791— 808. Robert P. Merges (1990), ‘Battle of Lateralisms: Intellectual Property and Trade’, Boston University International Law Journal, 8, pp. 239-46. Copyright © 1990 Robert P. Merges.

Globalization and Intellectual Property

Oxford University Press for the essay: Doris Estelle Long (1998), ‘The Impact of Foreign Investment on Indigenous Culture: An Intellectual Property Perspective’, North Carolina Journal o f International Law and Commercial Regulation, 23, pp. 229-80. Sweet and Maxwell for the essay: Christopher May (2003), ‘Why IPRs are a Global Political Issue’, European Intellectual Property Review, 25, pp. 1—5. University of Pennsylvania, Journal of International Economic Law for the essay: Robert Weissman (1996), ‘ALong, Strange TRIPS: The Pharmaceutical Industry Drive to Harmonize Global Intellectual Property Rules, and the Remaining WTO Legal Alternatives available to Third World Countries’, University o f Pennsylvania Journal o f International Economic Law, 17, pp. 1069-125. Vanderbilt Journal of Transnational Law for the essays: Carlos Alberto Primo Braga (1989), ‘The Economics of Intellectual Property Rights and the GATT: A View from the South’, Vanderbilt Journal o f Transnational Law, 22, pp. 243-64; A. Samuel Oddi (1996), ‘TRIPS - Natural Rights and a “Polite Form of Economic Imperialism’” , Vanderbilt Journal o f Transnational Law, 29, pp. 415-70. Every effort has been made to trace all the copyright holders, but if any have been inadvertently overlooked the publishers will be pleased to make the necessary arrangement at the first opportunity.

Series Preface Globalization is as much a process as a phenomenon of our age with forceful transformative qualities that affect conventional knowledge of politics, economic and the law. In most cases, but not always, globalization has led to an increasing convergence of values that affect different sectors of society unequally. Of the diverse dimensions of globalization, its tangible impact on economic processes is illustrative of the transformative potential and impact. Economic globalization has so fundamentally affected the roles and relationships of national and international actors that conventional rules of law have come under intense scrutiny. With economic globalization comes the confirmation of neo-classical economic doctrine as a dominant theme in policy-making and with it the diminution of the State and other symbols of sovereignty, coupled with a noticeable empowerment of actors such as transnational corporations, civil society groups and intergovernmental economic organizations. In this rapidly changing environment the law continues to play its usual defining and facilitative role but with a responsive twist to the demands of the phenomenon and processes of globalization. As a thematic collection of essays put together by experts in different fields transformed by globalization, the International Library of Essays on Globalization and Law seeks to capture the changing role of the law in modem society. In addition to containing key articles, each volume has an authoritative introduction which explains the context and significance of the essays which have been selected. Considerable care and attention have gone into selecting essays for each volume and I am grateful to each editor for this.

MICHAEL K. ADDO Series Editor University o f Exeter, UK

To Derek Jones With thanks

Introduction How to Globalize the World: The Jurisprudence of International Intellectual Propertization If you want to globalize the world, international intellectual propertization is a useful and effective tool with which to do it. This is immediately evident from the worldwide ubiquity of thriving multinational trade marks such as Coca Cola, McDonalds, Microsoft, Nike, Adidas and Disney. It is obvious from the allure on equities markets of multinational pharmaceutical companies that produce and sell patented medicines. And it is apparent from opposition to the perceived cultural domination of Hollywood and the large music and software industries based in the United States of America (‘US’), opposition that manifests itself as organized political and religious resistance, culturally protectionist laws, and social practices such as ‘culture jamming’.1 Owning and distributing information and knowledge is a lucrative business, but it is also immensely vulnerable to political and economic forces. It is underpinned by intellectual property laws and, in the face of defiance or when it is otherwise disregarded, successful intellectual property investments depend on the ability to have recourse to a strong enforcement regime. A portfolio of information and knowledge on which royalties can be charged throughout the world is an attractive investment for savvy entrepreneurs and their financial and political backers. However, a prerequisite for international success is arguably a body of reasonably uniform laws that harmonize conditions across national borders. Globalizing intellectual property principles through multilateral treaties and bilateral agreements helps to create commercial conditions in which ‘knowledge’ industries (those based on the ownership and control of ideas, information and knowledge) can thrive. Legal regimes that enable such industries to enforce their rights locally can encourage international investment and the transfer of technologies from one nation to another, bringing with them commercial opportunities and enhancing the likelihood of economic development in poorer societies. The flip-side is a range of sundry consequences such as the whittling of sovereignty as strong international pressure to intellectual propertize and introduce intellectual property-friendly legal provisions is brought to bear on independent nations. Other consequences are perceptions of neo-colonialism and cultural imperialism, change to legal cultures, and dilution of the cultural differences that distinguish different societies and mark national identities. Yet another upshot is population change as people chase employment and other apparent opportunities created by the knowledge industries, stimulating migration from rural areas to cities or from one’s homeland to another country. These issues provoke much concern and deliberation, and international intellectual

1 ‘Culture jamming’ involves the manipulation and use of existing media such as trade marks or advertisements to comment (usually negatively) on the message of the original media. It is essentially resistance to commercialism that has been used by the anti-globalization movement. A d Busters magazine is a key proponent of culture jamming activism.

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propertization is therefore contentious and important. Current trends suggest it is likely to remain that way. The collection of essays included in this volume provides the reader with an overview and understanding of the nature and operation of intellectual property laws in an international context. It also offers insight into the ways in which a process of international intellectual propertization is globalizing the world and some of the consequences that this is producing. The volume thus provides a guide to globalization via intellectual propertization, a manual for those who would seek to utilize such strategies (including in other contexts), and a textbook for those who would resist the process and its globalizing outcomes. For those who simply desire to understand how international intellectual propertization occurs and ways in which societies and cultures around the world are responding to it, this collection contains many of the most insightful essays on the topic of globalization and intellectual property that have been published in academic journals to date. Synopsis This brief synopsis provides an overview of the volume’s contents. Part I of the collection, entitled ‘The Politics and Economics of Global Intellectual Propertization’, contains several essays that introduce the language and landscape of intellectual property. Rather than treating intellectual property law as a necessary fact, these essays show how the development of intellectual property doctrines responds to the needs of certain segments of the community. In doing so, they flag areas of controversy and they provide a good overview of the terminology, the economics, the politics and the international context of intellectual propertization. Part II deals with the strategy of linking intellectual property to trade and the ways in which national governments have faced intellectual propertization requirements as a condition of engaging in international trade. In particular, the essays in this section look at multilateral treaties such as the TRIPS Agreement and WIPO conventions, bilateral agreements, and negotiating strategies employed - especially by the US government and the European Community (‘EC’) - to encourage other nations to commit to measures that bolster intellectual property rights and enforcement regimes in their domestic laws. The essays in Part III look at the historical implications and political connotations of globalization via intellectual propertization. Objections that globalization by intellectual propertization is a form of neo-imperialism or neo-colonialism are considered from the perspectives of both industrialized and less developed nations, and conclusions are offered about the interests that are served when poorer nations are compelled to adopt stringent intellectual property standards in their laws. Part IV takes an alternative approach. Shifting from the effects of globalization via intellectual propertization on the ‘recipient’ societies in which the process occurs, it examines the process effects on the ‘donor’ legal systems and intellectual property doctrines that are caught up in this pattern. It becomes clear that it is not only the recipient societies that are affected. The laws and legal doctrines of donor societies whose intellectual property traditions are replicated abroad can also be reflexively transformed by the globalization process. Indeed, they sometimes become less appropriate to the society from which they were transplanted. The essays in Part IV indicate how the compromises involved in negotiating international

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are scooped together under the ‘intellectual property’ banner, perhaps making discussions about intellectual property seem opaque to non-specialists. The following paragraphs seek to translate some of this jargon into lay-language. Lack of clarity about definitions can contribute to misunderstandings and disagreement about what ‘intellectual property’ itself implies. Most simply (or glibly), the term can be defined as a collection of objects controlled by intellectual property laws. These are laws that regulate the imitation and use of ideas, information and knowledge, and they are perhaps best described by reference to their common effect: the artificial creation of a scarcity of knowledge (Christopher May, Chapter 2, p. 21, discussed below). This situation has traditionally been brought about by bestowing power in the form of legally enforceable monopolies on intellectual property proprietors that allows them to prevent others from engaging in nominated kinds of commercial activity (see William Cornish, Chapter 1, p. 3, discussed below). Increasingly, the power extends to non-commercial activity as well. The characteristics of the most prominent of intellectual property doctrines - copyright, patents, and trade marks - are clearly outlined in Chapter 1 by William Cornish writing on ‘The International Relations of Intellectual Property’ (at pp. 6-11), where he also explains newer types of intellectual property rights that have been vested in things such as semi­ conductor chips, databases and computer programs (pp. 11-17). In summary, copyright laws provide limited monopolies over the use of literary, artistic, musical and dramatic works - such as books, paintings, musical scores and scripts for plays - and their derivative forms such as recorded music and movies. Patent laws provide limited monopolies over the use of novel, useful inventions, and trademark laws provide renewable monopolies over the use of distinctive commercial symbols such as business names and brand logos. These three doctrines are often thought of as the traditional core areas of intellectual property law, supplemented by ‘design rights’ that allow monopolies over the original, non-commonplace outward shape and configuration of articles. The objects of rights created by laws affording protection over inventions (that is, patent law), designs and trademarks are traditionally referred to as ‘industrial property’. In addition, there are many newer intellectual property rights. These are often described as ‘sui generis’, meaning they are classes of rights that have been especially devised to address demands for specific new intellectual property protection. These rights tend to be created by law-makers in response to new situations that have arisen as developing technologies have provided fresh opportunities for investment in innovation and imitation. As Cornish’s essay makes clear, the legislative creation or judicial identification of sui generis rights that answer demands arising in new commercial conditions is a key way in which intellectual propertization occurs (p. 11). The objects that are regulated by intellectual property laws are frequently described as ‘intangible’, ‘immaterial’ or ‘incorporeal’. In other words, they are things (such as ideas, information and knowledge) that lack a three-dimensional, physical form. The application of intellectual property law to these objects affects the ways in which they can be used and reproduced, as well as the ways in which they influence the development of new intangible objects. Pre- or post-intellectual propertization, intangible objects such as these are either unregulated or are regulated in a manner that allows public access to them. As such, they are said to lie either in the ‘public domain’ (containing material that is not regulated by law) or the ‘commons’ (containing material that is not regulated as private property but is left available for people to use without requiring specific permission, even though conditions such as ‘non­

Globalization and Intellectual Property

commercial purposes’ may be attached to that use). Alternatively, they might be regarded as ‘community resources’, which refers to intellectual or cultural material regulated by local law or traditions for the benefit of a specified community. Once subject to intellectual property laws, the same objects take on a different legal form: private property. Subject to legal limits established in each jurisdiction, their use is then determined by the decision-making authority of the proprietor or rights-holder. The way in which this power is brought about and utilised is a core theme running through this volume. Terms of art are one of the obvious features of intellectual property talk; acronyms and abbreviations are another. The national or domestic laws that govern intellectual property objects are greatly influenced by a series of international treaties to which a large majority of the world’s nations have acceded. The most momentous of these is the 1994 Agreement on Trade-Related Aspects o f Intellectual Property Rights, generally known as ‘TRIPS’. As several of the essays in this volume explain by way of background to later developments or other issues, TRIPS grew out of the General Agreement on Tariffs and Trade (‘GATT’). Administered by the World Trade Organization (‘WTO’), compliance with TRIPS is compulsory for WTO members and it carries the requirement to be a signatory to other international intellectual property agreements such as the Berne Convention fo r the Protection o f Literary and Artistic Works of 9 September 1886 (as amended) and the Paris Convention for the Protection o f Industrial Property of 20 March 1883 (as amended). TRIPS is therefore an essential foundation underpinning modem globalization by intellectual propertization, and reference to it recurs throughout the volume. The importance of TRIPS is immediately clear in Christopher May’s short but revealing essay ‘Why IPRs are a Global Political Issue’ in Chapter 2. May’s essay draws together the themes caught up by the aforementioned definitions to provide a perceptive and straightforward map of the socio-legal territory spanned by intellectual property rights. The political economy approach taken by May argues that globalization via intellectual propertization and the process of harmonization of intellectual property laws that is accompanying this is unjust in a global society that is so economically disparate and in which the ‘haves’ are so removed (in terms of wealth, but also often in terms of geography) from the ‘have nots’. In summarising the reasoning behind his fears, May offers a very clear synthesis of many of the wider issues that are taken up in more detail elsewhere in this collection. Building on foundational ideas set out in May’s essay, Carlos Braga’s discussion of ‘The Economics of Intellectual Property Rights and the GATT: A View from the South’ in Chapter 3 provides insight into the way in which the linking of intellectual property law to trade law from the 1980s gave rise to TRIPS. Braga explains the political machinations and power struggles between various economically developed and less developed countries during this period, placing these against the contextual backdrop of jurisprudential justifications and economic models for and against intellectual property. Focusing particularly on the interests of less developed countries, Braga’s essay highlights the considerations and concerns of many nations compelled to participate in the WTO’s TRIPS-driven process of globalization by intellectual propertization. Between them, the essays in Part I of this collection thus provide a solid introduction to the language and scope of global intellectual propertization. This sets the scene for discussions of the more detailed political and jurisprudential issues raised in the rest of the volume.

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Linking Trade to Intellectual Propertization Although international treaties governing intellectual property had existed for over a century prior to 1994, a new phase of rapid globalization through international intellectual propertization accompanied the introduction of TRIPS. TRIPS linked international trade to international intellectual propertization far more completely than had any previous multi­ national treaty and - supplemented by a plethora of bilateral trade agreements containing intellectual property provisions - it dramatically changed the nature of intellectual property governance worldwide. The history behind this stratagem lies in intellectual property laws dating back hundreds of years. Some of these early laws were introduced primarily in order to further political (as opposed to economic) goals. For example, the first English copyright law gave the sovereign the ability to regulate the book trade and censor those who controlled the printing presses. (Patterson, 1968, p. 143) That law gradually evolved into versions containing provisions that resembled those that are common to modem copyright statutes throughout the world, and it was therefore a forerunner of contemporary intellectual propertization. Other early intellectual property laws were intended to control or promote domestic industries, and precursors to modem laws can be found in national statutes dating back to the fifteenth century AD. For example, the Venetian Patent Act 1474 granted 10-year monopoly privileges to those who invented or imported inventions of new arts and machines (Nard and Morriss, 2004, pp. 9-13), and England’s Statute o f Monopolies 1624 authorized King James I to issue letters patent granting limited monopolies to the inventors or importers of original inventions. These laws were instmmental in nature, aimed at increasing national technological expertise by encouraging the import of industrial know-how from other jurisdictions (‘technology transfer’) and the development of local knowledge and technical skills. Such capacity-building was ultimately intended to give domestic markets an advantage with respect to their trading partners, thus improving commercial conditions within the local jurisdiction. These early intellectual property laws were not designed to directly regulate trade but their effects on local trade and commerce could be very beneficial. They marked the advent of a conjunction between intellectual property law and trade in which intellectual propertization was driven by a desire to promote domestic economic development and trading goals. A key issue linking older intellectual property laws and treaties to TRIPS and the new era of globalization via intellectual propertization that it ushered in was the problem of copyright piracy and trademark/patent counterfeiting; that is, the intentional, unauthorized copying or use of materials protected by intellectual property laws. Although domestic statutes provided intellectual property protection in specified jurisdictions, the material covered by those laws locally remained vulnerable to unauthorized copying abroad. As a consequence, patent laws that were originally intended to encourage the import of inventions from overseas evolved to meet changing national interests throughout the nineteenth century. England, France, the US and some other European states became increasingly anxious to end the activities of foreign free-riders who were pirating and counterfeiting the works of their authors and inventors during this period, and they began to alter their intellectual property laws in response. Two common reactions to the international conditions were the conclusion of bilateral agreements and multilateral treaties between countries that allowed nationals of signatory states to better protect their intellectual property abroad (Sherman and Bently, 1999, pp. I l l -

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118). The essays in Part II of this volume - ‘Trade-Linked Intellectual Property Negotiations: Lateralisms and TRIPS’ - explain how this occurred. Robert Merges’ essay on the ‘Battle of Lateralisms: Intellectual Property and Trade’ in Chapter 4 outlines the territory in which the bi- and multilateral negotiations concerning trade and intellectual property takes place and, in ‘Industry Strategies for Intellectual Property and Trade: The Quest for TRIPS, and Post-TRIPS Strategies’ in Chapter 5, Susan Sell provides detail about the political strategies used in fighting this battle of lateralisms. Peter Drahos’ essay ‘BITS and BIPS: Bilateralism in Intellectual Property’ in Chapter 6 concludes this section, taking an historical approach to the way in which global intellectual propertization via lateralisms is occurring and suggesting approaches that developing countries might take to combat the trend. By way of introducing these issues, the following discussion provides a brief overview of the content covered by the essays in Part II. (a)

Multilateralism and the TRIPS Agreement

The aforementioned Paris and Berne Conventions of the late nineteenth century were two important multilateral agreements that were intended to prevent foreign free-riding of trademarks, patented inventions and copyright materials. These treaties established minimum standards of intellectual property regulation that were to be observed in signatory states, and they instigated the principle of ‘national treatment’ that required signatory countries to afford nationals of other signatory jurisdictions the same level of intellectual property protection as enjoyed by their own nationals. Both conventions are now administered by the World Intellectual Property Organization (‘WIPO’), with 169 jurisdictions having signed the Paris Convention and 160 having signed the Berne Convention.2 The principles set out in these conventions have therefore become de facto templates for intellectual property laws worldwide. Accession to the Paris and Berne Conventions has tended to occur because a jurisdiction reached a certain level of industrialization, because it was a colony of an industrialized power, or because of another perceived national interest. Examination of each type of stimulus is enlightening. Industrialization is perhaps the key motivating factor behind a country’s accession to the WIPO conventions. For example, the until the nineteenth century the US was a net importer of technology and, as Robert Merges notes in Chapter 4, it acquired a reputation for ignoring foreign intellectual property rights (such as British laws restricting technology exports) when convenient (p. 57). However, the situation evolved as US firms made technological advances throughout the nineteenth century and themselves became vulnerable to intellectual property piracy and counterfeiting, and US inventors gradually joined European cries for stronger international patent protection. Governmental endorsement of this position saw the US supporting the 1883 Paris Convention, which it acceded to in 1887. Colonization was another important impetus behind the early spread of intellectual property law throughout the globe. Colonies tended to inherit the legal traditions of their imperial masters. They were also subject to specific provisions that were transplanted from 2 As at 1 April 2006. See http ://www. wipo. int/treati es/en/ShowResults.j sp?country id“ ALL&start_year=ANY&end_year=ANY&search_wha1^C&treat}/_id” 15&treaty_id“ 2

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the ‘homeland’ as directly applicable laws and to treaties (such as the Paris and Berne Conventions) to which an imperial power acceded on their behalf. For example, Article 19 of the Berne Act for the Convention gave the imperial powers of France, Germany, Spain and the UK the right to accede to the Berne Convention ‘at any time for their Colonies or foreign possessions’ (Drahos, 2001a, pp. 8-9). As Adebambo Adewopo illustrates in Chapter 7, vast tracts of the globe thus became subject to laws that defined and regulated intellectual property rights (pp. 109-113). Even after they had gained their political and legal independence, many ex-colonies maintained the legal traditions and laws received from their former imperial masters. The intellectual property roots planted during colonial times thus tended to persist, even when the economies and domestic interests of young independent nations differed from those of the countries in whose interests accession had originally occurred. Accession to the WIPO conventions has also been propelled by shifting domestic conditions and national interests. For example, the US Copyright Act 1790 protected only authors living in the US, and US publishers frequently ignored UK copyright during the 1800s. Indeed, Philip Altbach describes the US as one of ‘the most egregious violators’ of copyright during the nineteenth century (Altbach, 1995, p. 18). This created conditions that threatened nineteenth century European literary and technological superiority, and that led to foreign lobbying within the US. Responding to vocal English protests, the US Congress inserted a clause into the Chase Act 1891 (which remained in operation until 1986) that granted copyright to foreign authors whose books were manufactured in the US and published there no later than in their country of origin (Sell, 2003, pp. 60-62). Successive versions of the US Federal Copyright Act similarly required any author seeking domestic copyright protection to register their works with the US Register of Copyrights and to deposit a copy in the Library of Congress. These provisions differed from, and somewhat contradicted, those required by the Berne Convention, and the US remained outside Berne for over a century. It instead complied with the more attractive requirements of the 1952 Universal Copyright Convention (‘UCC’). However, by the mid-1980s the US had become a mass exporter of copyright-protected material such as software, music and films. It finally acceded to the Berne Convention in 1989, thus providing a good example of a country whose national interests had transformed with time and whose membership of international intellectual property treaties evolved to meet its changing conditions and needs. The pressure on previously abstaining countries to accede to Paris, Berne and other WIPO Conventions has also been a condition or result of them obtaining WTO membership. WTO members are required to comply with TRIPS, which establishes standard, minimum levels of protection for copyright, patents, trademarks, industrial designs and other sorts of intellectual property that members should incorporate in their national laws. TRIPS also requires accession to the Paris and Berne Conventions, among others, but the minimum standards it demands of national laws in signatory states are often significantly higher than those required by pre­ existing national laws or the Paris and Berne Conventions. This controversial ‘ratchet effect’ has caused commentators to express concern about the likely effects on developing economies (for example, Drahos, Chapter 6, especially pp. 10Iff). TRIPS was itself an outcome of much discussion and disagreement that eventually resulted in reluctant compromise. It arose from a process that gained momentum throughout the 1980s when the US government, responding to pressure from national industries, became increasingly interested in promoting laws awarding and protecting the international intellectual

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property rights of US nationals. Perhaps the most vocal proponents of this approach were the chief executive officers of a group of companies who joined together to form a powerful industry organization known as the Intellectual Property Committee (‘IPC’). The corporations involved were US-based Bristol-Myers, CBS, DuPont, General Electric, General Motors, Hewlett-Packard, IBM, Johnson & Johnson, Merck, Monsanto and Pfizer (Sell, Chapter 5, pp. 61-78): their interests substantially depended on enforcement of their intellectual property rights and their leaders thus found a common interest in targeting foreign free-riders who ignored their intellectual property interests (Braga, Chapter 3, p. 29). The IPC propounded the benefits of linking intellectual property to trade negotiations abroad to the US Chamber of Commerce and industry organizations within the US, and its members also persuaded their European and Japanese industry counterparts to lobby their own governments with the same message (Sell, pp. 71-72). The strategy was effective and the results were swift. Japan and the European Union joined a call by the US government for strong minimum standards of intellectual property worldwide, and they supported the linking of these standards to trade issues. Susan Sell’s essay in Chapter 5 of this collection provides a detailed analysis of the political strategies used by US corporate actors in their quest to bring about TRIPS. While some of the world’s most industrialized and wealthy nations pushed to globalize minimum intellectual property law standards by linking international discussions about intellectual property to international trade talks, a group of ten developing countries raised forceful protests. Argentina, Brazil, Cuba, Egypt, India, Nicaragua, Nigeria, Peru, Tanzania and Yugoslavia (Bradley, 1987, p. 81) strongly objected to the linking of trade and intellectual property, and they voiced robust concerns about the likely effects of obliging non-industrialized and developing nations to devise and enforce intellectual property laws that were inappropriate to national conditions and short-term domestic interests. These countries feared that the IPC’s proposals would alter the balance of costs and benefits away from developing country users of existing bodies of information and knowledge in favour of wealthy or wealthier foreign proprietors of intellectual property rights. Despite these protests, the institutional location for multilateral intellectual property negotiations was moved - ‘forum shifted’ - from WIPO to the 1986-94 Uruguay Round of negotiations for the General Agreement on Tariffs and Trade (‘GATT’). It was not coincidental that the developing countries had wielded more collective power under WIPO’s one-stateone-vote system (Merges, Chapter 4, p. 52-53; Braithwaite and Drahos, 2000, p. 61), whereas the industrialized nations were more likely to triumph under the GATT voting rules. The GATT Uruguay Round therefore gave rise to three significant outcomes. One was the creation of GATT’s successor, the WTO. Second, and closely related, was the drafting of TRIPS. Third, and a direct consequence of establishing the WTO and TRIPS, was the metamorphosis of intellectual property law into a ‘trade’ issue. Despite much negotiation and opposition from developing countries, TRIPS ultimately contained about 95% of the provisions that the IPC had originally sought (Braithwaite and Drahos, op cit., p. 97). These changes resulted in a process of rapid intellectual propertization worldwide, and converging legal standards have led to an increasing level of international homogeneity in intellectual property laws around the planet (Braithwaite and Drahos, op cit., p. 18). The effect has been globalization via intellectual propertization. With approximately 192 nations in the

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world, of which 149 are WTO members,3 over three-quarters of countries are required to act in accordance with the WTO’s TRIPS Agreement. Translated into population terms, roughly 83% of the earth’s people are now required to abide by TRIPS-compliant laws.4 (b)

US Bilateral Agreements and Penalties

Multilateral agreements such as TRIPS and the treaties that its members are obliged to accede to have not been the only factors driving globalization via international intellectual propertization. Global intellectual propertization is also a consequence of bilateral agreements between countries. Intellectual property ‘bilaterals’ stem from the mid-1800s, with early agreements concluded between negotiating partners such as Britain and Prussia, France, Hamburg, Belgium and Spain. These precursors to the Paris and Berne Conventions (Sherman and Bently, 1999, p. 115) laid the foundations for later treaties. More than a century later (in the 1980s), and at the same time as the leaders of some of their most powerful industrial companies were propounding the linkage of intellectual property law policy-making to international trade negotiations, the EC and the US became increasingly active in the negotiation of bilateral treaties containing stringent intellectual property requirements. Driving this approach on behalf of the US government and its industrial/corporate constituents was the Office of the United States Trade Representative (‘USTR’). In its negotiation of bilateral agreements on behalf of the US, the USTR often includes discussion of intellectual property provisions and it has frequently obtained commitments from its negotiating partners to insert into their laws more rigorous minimum intellectual property standards than are required under TRIPS or other international conventions. The reward for the partners can be compromise in unconnected areas of trade, and the USTR seems proud of its record in eliciting TRIPS-plus intellectual property standards in this manner: The United States is committed to a policy of promoting increased intellectual property protection ... We are pleased that the recently concluded FTAs with Central America including the Dominican Republic, Morocco and Australia will strengthen the protection of IPR in those countries. Specifically, the intellectual property chapters of these agreements provide for higher levels of intellectual property protection in a number of areas covered by the TRIPs Agreement.5

Each of these negotiating partners was already subject to TRIPS obligations, but the agreements reached as a result of bilateral negotiations with the USTR required them to implement still stricter standards of protection for intellectual property rights holders. The bilateral Free Trade Agreements (‘FTAs’) these countries concluded with the US - whereby ‘each wave 3 As of 11April 2006: < http:11www. wto.or g/eng li sli/thcwto_e/~whatis_e/ti f_e/o rg 6_e.htm> 4 This figure was calculated by adding national population statistics from the CIA - The World Factbook for those countries appearing on the WTO membership list . and calculating the total (5,378,798,297) as a percentage of the total world population of 6,446,131,400 (accessed 3 October 2005, with Saudi Arabia added to WTO membership total and % recalculated on this basis in April 2006). 5 Office of the United States Trade Representative, 2004 Special 201 Report: Executive Summary (Washington, 2005) at 2.

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of bilateral or multilateral treaties never derogates from existing standards and very often sets new ones’ (Drahos, Chapter 6, p. 97) - thus contributes to a further ratcheting up of the process of globalization via intellectual propertization. Thus, globalization via intellectual propertization is occurring not only as a consequence of nation states’ membership of the WTO and their accession to treaties such as the Berne and Paris Conventions, it is also occurring as a result of pressure to conclude USTR-negotiated agreements, and bilateral agreements with other nations. Identical or similar provisions reappear in the bilateral agreements that the USTR concludes with various nations, resulting in a trend towards even greater harmonization of intellectual property laws worldwide. The standards that are becoming commonplace as a result of bilateral agreements with the US (and also with the EC) offer increasing levels of protection to the interests of intellectual property proprietors, many of whom are based in the US or other industrialized countries. One particularly noteworthy aspect of US domestic legislation deserves explanation at this point. Under Section 301 of the US Trade Act 1974, the USTR is required to identify countries whose domestic standards of intellectual property protection are considered to be inadequate or ineffective. Countries that deny fair and equitable market access to those who rely on intellectual property protection are also to be identified. An important role of the USTR is therefore to carry out ongoing scrutiny of other countries’ laws. With tip-offs and other practical assistance from US industry, the USTR investigates the adequacy and effectiveness of intellectual property laws abroad and its annual ‘Special 301’ report (‘Special 301’ being a reference to Section 1303 of the US Omnibus Trade and Competitiveness Act 1988) outlines its findings. As part of this strategy, a series of Section 301 ‘watch’ lists are brought into play when the USTR determines that US interests cannot be properly protected due to another country’s inadequate domestic laws or trading conditions. The most serious miscreants and those who ‘fail to enter into good faith negotiations or make significant progress in bilateral or multilateral negotiations to provide adequate and effective protection of intellectual property rights’6 are placed on the ‘Priority Foreign Countries’ list. At the other (weaker) end of the scale is the ‘Watch List’ for those who are considered guilty of the least serious misdemeanours, such as countries that have acted too slowly in the implementation of stronger intellectual property laws or those who are considered to have provided insufficient market access for US products. It is interesting to note how these watch lists have been used as a carrot (an incentive to avoid repercussions) and a stick (a punishment for reluctant or recalcitrant nations). For example, after leading the opposition by developing countries to the campaign by US enterprises to forum-shift multilateral intellectual property negotiations from WIPO to GATT in the 1980s, India and Brazil were placed on the USTR’s Priority Watch List. Supporters of the opposition -Argentina, Egypt and Yugoslavia - found themselves on the Watch List (Abbott, 1989, pp. 708-709). Countries that appear on Section 301 watch lists can expect the USTR to lead further action against them. For ‘Priority Foreign Countries’, penalties can include a loss of benefits under the US President’s Generalized Special Preferences scheme for trade from developing countries. The US might also invoke WTO dispute settlement procedures, resulting in trade sanctions 6 Office of the United States Trade Representative, ‘Special 301 Report Finds Progress and Need for Significant Improvements’, Press Release (Washington, 29 April 2005).

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against countries that do not meet their TRIPS obligations. The USTR expects ‘Watch List’ countries to engage in bilateral negotiations to address their ‘underlying intellectual property rights problems’7and, as noted earlier, such negotiations are likely to lead to an agreement that requires the non-US party to implement increased minimum standards of intellectual property rights within their jurisdiction, thus extending the global harmonization of such standards. Many of the essays contained in this volume refer to ways in which the US/USTR, along with the governments of other highly industrialized or economically developed nations (for discussion of EC bilaterals, see for example, Drahos, pp. 100-101), are effectively promoting a pattern of globalization via intellectual propertization through their aggressive pursuit of ‘lateral’ agreements. This does not reflect a critical bias or an attempt to attack the national policies of any country: readers can reach their own conclusions about whether individual governments are using their international influence (and, particularly, their political and economic power) wisely and skilfully to best secure the interests of their own citizens and enterprises at home and abroad. For readers seeking to understand more about the justifications used by the US and other key players in the push for globalization via intellectual propertization, an essay by Jerome Reichman is strongly recommended. ‘From Free Riders to Fair Followers: Global Competition Under the TRIPs Agreement’8 was reluctantly omitted from this collection due to its length (82 pages). This much-cited essay adds an extra dimension to the discussion, setting out the socio-economic advances - for developed and developing countries alike - that bilateral and multilateral agreements are supposed to engender. Surveying and assessing the benefits touted as an upshot of global intellectual propertization, Reichman discusses how issues such as scientific innovation and technology transfer are likely to be affected by a shift from the anti-competitive, high-protectionist policies traditionally common in developing economies to conditions based on principles of free-market competition. The essay assesses the likelihood of projected outcomes being achieved, and the prognosis (especially the long­ term prognosis) offered by Reichman with respect to developing countries is more positive than that of most other essays in the collection. The methodology followed in Reichman’s thorough essay thus offers a welcome alternative approach to assessing issues surrounding the policy of encouraging global intellectual propertization through the use of bi- and multilateral agreements, and it is recommended to readers. The essaysthat have been included in this section of the collection reflect the very significant role that the political and trade strategies employed by the governments of developed and economically industrialized economies are playing in the process of globalization via intellectual propertization. It is clear that the conclusion of numerous multilateral and bilateral agreements is creating a web of progressively standardized intellectual property law that stretches around the globe. As each agreement builds layer-upon-layer of everincreasing minimum intellectual property standards into national laws - the aforementioned ‘ratchet effect’ - intellectual property laws worldwide are becoming ever more uniform and harmonized. Whatever the reasons for this, and whatever the pros- and cons- attached to it, an

7

Ibid.

8 Reichman, J. H. (1996-1997), ‘From Free Riders to Fair Followers: Global Competition Under the TRIPs Agreement’, International Law and Politics 29, 11-93.

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objective observer must surely agree that the result is a distinct process of globalization via intellectual propertization. Neo-Imperialism? Global Intellectual Propertization in a Post-Colonial Age The push towards globalization by promoting the harmonization of intellectual property laws worldwide has led to strong criticisms that the process disregards and erodes national sovereignty. This issue is examined in Part III of the collection. Opening the discussion, Adebambo Adewopo’s discussion of ‘The Global Intellectual Property System and Sub-Saharan Africa: A Prognostic Reflection’ in Chapter 7 considers the way in which global intellectual propertization has arrived in and is affecting nations in subSaharan Africa. The essay provides empirical examples of the reception of legal systems and intellectual property principles as a consequence of nineteenth century imperialism within the region, thereby giving practical illustrations of the process described by Peter Drahos in the previous chapter. Charting what he describes as ‘territorial’, ‘international’ and ‘global’periods in the region’s history, Adewopo notes how the reception of colonial laws and international intellectual property agreements during the eighteenth to twentieth century era of European empires began the process of global intellectual propertization. However, it was the operation of US trade policy (and especially the USTR’s use of s.301) that he identifies as the most significant force to stimulate intellectual propertization in the global era (p. 112). While some have been eager to establish African intellectual property systems and government administrative offices such as the African Regional Intellectual Property Organization and the African Intellectual Property Organization, culturally-sensitive issues about applying Western laws in an African context should not be overlooked. As Adewopo notes, Western philosophical and legal concepts of intellectual property do not necessarily coincide with traditional African ideas and rules concerning the control of intangible objects (p. 112-113). Forcing African - and other - countries to adopt legal principles that do not accord with their indigenous traditions could be regarded as imperialistic. The new colonial master might have metamorphosed from a single dominant power wielding military might into a consortium of economically developed or industrialized nations propounding intellectual propertization via WTO membership and TRIPS compliance, but the implications for a state’s sovereignty have a familiar feel. As Keith Aoki notes in his essay ‘Neocolonialism, Anticommons Property, and Biopiracy in the (Not-So-Brave) New World Order of International Intellectual Property Protection’ in Chapter 10: [W]ith the enactment of TRIPS, Third World countries might be thought of as being coerced into joining GATT, which literally said to Third World countries: if you want to export your goods, agricultural and otherwise, you must protect the intellectual properties of other nations ... Under the ideological banner of Tree trade,’ the intellectual property regimes of the developed nations were given expanded reach - in other words, rules that purportedly were meant to encourage and protect creative expression were now put in place, giving owners the legal means to reach extraterritorially into Third World countries to prevent unauthorized use. (p. 204)

Two questions encapsulate the ensuing concerns. First, is intellectual property law appropriate in the local conditions of recipient countries? And, second, if intellectual property

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principles are appropriate, what sort of laws should be introduced? The initial query identifies concerns about whether other recipient communities - like those in the African nations discussed by Adewopo - are likely to benefit from the commodification of ideas, information and knowledge. The latter question is concerned with the type of commodification that might occur and the intellectual property standards that will help to bring it about. Like all law, intellectual property law is a socially constructed entity that can be changed by a society to suit its particular needs: there is no natural form of intellectual property law (although some would disagree with this contention, as will become apparent with respect to the reference to ‘natural rights’ in Chapter 9, below). This leaves intellectual property law open to construction and interpretation. African countries - like others - can in principle construct laws that best suit their needs. In practice this may not be possible due to accession to restrictive multilateral and bilateral agreements that prescribe the adoption of certain intellectual property doctrines and proscribe various public domain or commons-type approaches. Left to their own devices, African - and other - nations might devise intellectual property laws that they consider would best suit their local conditions; in the face of international treaties that demand the implementation of certain doctrines and minimum standards of protection, there may be little opportunity to be creative in drafting the best possible laws for a particular community. The essay ‘North-South Disputes Over the Protection of Intellectual Property’ by Stephen Richardson and James Gaisford in Chapter 8 indicates, from the perspective of economists, how rational actors (countries) might act if left to adopt the intellectual property interests that they perceived to be in their own best interests. Working through the possibilities, the economists conclude that the benefits of globalization via intellectual propertization in the form of TRIPS are far more likely to accrue to economically developed countries than their less developed trading partners. Yet even those opposed to TRIPS and/or globalization via intellectual propertization tend to accede. For example, with the exception of some parts of the former Yugoslavia, all members of the group of developing countries that strongly opposed the forum-shifting of intellectual property trade issues from WIPO to the WTO in the 1980s-1990s and who noisily opposed TRIPS eventually joined the WTO and must comply with TRIPS. Why would developing countries accede to international agreements requiring them to implement intellectual property laws that they believe are likely to benefit foreigners more than their own nationals? The answer, suggest Richardson and Gaisford, is that less developed countries appear to ‘have traded losses off in the realm of intellectual property protection for gains elsewhere in the GATT agreement’ (p. 137). In other words, countries that might have little to gain directly from introducing stringent intellectual property rights into their domestic laws may benefit indirectly by receiving positive incentives such as access to markets in non-intellectual property goods such as agricultural produce and primary resources. Negative incentives, such as limiting the likelihood of being named on USTR watch lists and suffering the consequences that accompany that status, could also be persuasive. Does the fact that recipient countries have weighed the pros and cons and agreed to strengthen their intellectual property systems negate charges of neo-imperialism? Arguably not. If one’s options are narrowed so that all options seem unappealing, the sovereign domain in which one can exercise free-will and self-determination is whittled away. This may be the unfortunate and unavoidable result of natural environmental factors, such as limited natural

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resources or force majeure. Alternatively, it may be the outcome of the self-seeking actions of others who engage in manipulative or harassing strategies that narrow the choices available to the target. In the latter case, dispute resolution talks are unlikely to greatly advance the selfinterests of a target who is poor, weak or has little to offer at the negotiating table. Confronted with such odds, it is not surprising that economically developing countries tend to succumb and agree to implement provisions that they do not perceive to be in their own national interests. When the blow is softened by incentives in other areas (for example, ‘we will give you access to our markets to sell your primary produce if you sign up to new intellectual property laws’), even an unattractive offer can seem irresistible. This is the sort of process that Samuel Oddi describes as a ‘polite form of economic imperialism’ in his essay ‘TRIPS - Natural Rights and a ‘Polite Form of Economic Imperialism’ in Chapter 9. Looking at the type of option-narrowing process described above, Oddi observes that even human-generated situations have been defined as natural (and, by implication, therefore inevitable) in an attempt to shift the rhetorical force towards those who would wish to impose their beliefs and/or their hegemony on others. This is done by casting intellectual property rights as ‘natural rights’ that derive from God, nature, reason, or from the mere fact of living as a human (Chapter 9, pp. 150-161). Such an argument posits intellectual property rights as an unarguable fact, rather than a socially-constructed aspect of positive law (that is, law drawn up by humans in response to the needs of a society, perhaps based on principles enshrined in constitutional ‘rights’). Oddi’s essay examines the way in which natural law argumentation - whose credibility is highly contested in other areas of jurisprudence - has infiltrated the process of globalization via intellectual propertization. He shows how the natural rights argument allows intangible properties to be defined as legal property, and how any unauthorized use of those new objects of property law can then be regarded as infringement, theft or piracy (p. 156). Such an approach does not allow for alternative beliefs, and it does not respect the different philosophies native to many peoples whose traditions do not lie in Western liberal theory. These philosophies may see intangible objects as being community resources that lie in the public domain or commons. They might see intangible objects as being regulated by local religious beliefs. Or they might have other ‘unconventional’ (from a Western philosophical perspective) approaches to the issue. To force upon such societies the viewpoints of Western liberalism raises concerns about neo-colonialism. Marci Hamilton thus calls TRIPS ‘old-fashioned, Westem-style imperialism’ (Hamilton, 1996, p. 615). Concern about the way this is occurring grows in cases in which the ‘natural rights’ identified seem to serve the interests of their proponents far more than they serve the general interests of the recipient communities. Interestingly, Oddi’s conclusions query whether the natural rights justified patent provisions in TRIPS are really likely to generate their much vaunted benefits for either developed or developing countries. Keith Aoki’s essay in Chapter 10 observes that the assumption that economic development will follow intellectual propertization has been prominent since the 1960s (p. 203). Yet, despite some success stories such as the ‘Asian Tiger’ economies (Hong Kong, Singapore, South Korea and Taiwan), the theory has not been borne out by experience throughout much of the developing world. TRIPS was nonetheless introduced on the basis of the same justifications. Another important neo-imperialistic trend is the transfer of ideas, information and knowledge from developing to developed countries, and the sale of refined or synthesized versions of these back to the societies from which they originally derived. As Aoki notes:

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The pattern is becoming depressingly familiar: resources flow out of the Southern regions and are transformed by Northern entrepreneurial authors and inventors into intellectual properties, which in many cases are priced so high that the people from whom such knowledge originated cannot afford to license them. (p. 211)

Examples of the sorts of objects affected by this movement of ‘traditional knowledge’ include traditional remedies and medicines, seeds, natural pesticides and other traditional agricultural practices, and cultural traditions such as visual art, songs, stories, oral histories, totems, religious symbols, and local handicrafts. Laws that effectively define (either explicitly or by omission) these sorts of objects as residing in the public domain or commons, and that therefore allow their use and exploitation by foreigners - and particularly by multinational corporations which then seek royalties for their subsequent use - seem to depart from the ‘natural law’ arguments put forward in favour of other sorts of intellectual property protection. As Aoki points out, it seems unbalanced to treat the biological and cultural resources of developing countries as belonging to the ‘common heritage of humanity’ while simultaneously treating the intellectual resources of developed nations as ‘private property’, (p. 46) It is a traditional feature of empires that their colonies’ natural resources would be used for the benefit of the homeland. Surely the current pattern of globalization via intellectual propertization is not intended to be a throwback to colonial times? But when the governments and corporations of industrialized and economically developed nations push for globalization via intellectual propertization, largely defending their action by recourse to a moral ‘need’ to prevent piracy and counterfeiting of their intellectual ‘property’, some commentators, activists and national spokespeople for developing countries have reciprocated with claims that Western ‘bio­ prospecting’ (searching for biological resources in the communities of traditional cultures) leads to bio-piracy of the intellectual resources of developing countries. Aoki’s essay explains some of the convincing examples given by the developing nations to defend their claim. The essays in Part III thus demonstrate very clearly that the debate over international intellectual propertization is not morally neutral. It is not objective. It seems fair to suggest that, if globalization via intellectual propertization is to occur, it should be implemented in a manner that does not raise fears that ‘globalization’ is a synonym for ‘neo-colonialism’ or ‘new-imperialism’. From an African perspective, Adewopo notes: The fundamental concepts and norms underlying the existence of traditional intellectual property in the African communities require integration into intellectual property jurisprudence... it is therefore of crucial importance for African countries to recapture the intellectual property philosophy and wrestle it from the Western manipulative jurisprudence without losing its commercial significance within the international framework. (Chapter 7, p. 129).

Consideration of the traditions and local philosophies of all affected nations should surely be given when intellectual property standards are being devised, and the need for this becomes greater when those standards are intended to be globally-applicable. Particularly if geo­ political conditions mean that those standards are to be explicitly or implicitly forced upon weaker nation-states, surely the best way to avoid charges of neo-imperialism or a disregard for national sovereignty is to construct standards that would be accepted by democratic governments deciding which intellectual property laws would themselves serve their national best interests. Rather than having to threaten nations to accede to agreements containing these

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standards, or having to entice them with trade-offs in areas unrelated to intellectual property law, would it not be better to create standards that developing countries perceived to be inherently beneficial to their societies? The essays in Part III of this collection would suggest so, and they offer insight into the sorts of facts and arguments that might be considered in a debate concerning these issues. Globalization’s Effects on Intellectual Property Law’s Classic Doctrines and Rationales Part IV of the collection looks at globalization via intellectual propertization from a reflexive perspective: it turns the spotlight back on intellectual property law’s classic doctrines and rationales, and it studies the effects that being caught in the globalization process is having on them. This is essentially a discussion about the international harmonization of intellectual property laws, and the essays in Part IV shed light on the shifting definitions found in national intellectual property laws as they are exposed to the forces of foreign doctrines and interpretations. The process of harmonizing intellectual property laws is summarized in Graham Dinwoodie’s ‘The Integration of International and Domestic Intellectual Property Lawmaking’ in Chapter 11 as ‘reducing the disparities between national laws [that] will reduce the cost, time and uncertainly involved in determining and/or acquiring rights, thus reducing barriers to innovation and to global trade’ (p. 246). It is not surprising that a process of global harmonization would cause changes to domestic laws. However, the changes are perhaps not always quite those that were expected. Dinwoodie comments that harmonization frequently involves an attempt to replicate existing laws rather than to conciliate and create a new form of the law. Moreover, he observes, ‘it is normally the laws of the developed world that are replicated’ (p. 247). This arguably explains the abovementioned failure to take into serious consideration the local traditions and conditions of societies in developing nations when devising the intellectual property standards that are enshrined in TRIPS and that have therefore become subject to globalization. It also understandable that the US and the European nations at the forefront of lobbying for TRIPS and negotiating its provisions should have wished to preserve and replicate abroad the doctrines with which they were familiar. Indeed, it is perhaps trite to suggest that these are the doctrines - in their established forms and with their established definitions - which these countries and their proponent corporations had in mind when they used the term ‘intellectual property’ and called for intellectual property standards to be reproduced around the globe. However, even these nations sometimes disagree on the detail. No two independent countries have exactly the same legal traditions or laws. Even nations with similar philosophical principles can have diverging intellectual property laws. For example, some French copyright concepts historically differed from those found in Britain, as did US copyright principles throughout the nineteenth and early twentieth centuries (see above, this is explained in essays in Part II of the collection). For harmonization of such systems to occur, someone’s domestic doctrines would obviously have to change. Dinwoodie’s essay discusses some of these changes, including the irony of some of the greatest proponents of strengthening intellectual property law standards globally having to accept new - and sometimes unwelcome - standards in their own laws as part of the harmonization process.

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It is also clear that transplanting a foreign legal concept into the domestic laws of various nations can have diverse results. For example, Dinwoodie cites the instance of UK and Swedish judges offering quite different interpretations of a single piece of EC trademark legislation that applied in both countries (p. 250). Similarly, it is not uncommon for countries that conclude FTAs with the US to receive portions of law lifted directly from US legislation, such as the controversial Digital Millennium Copyright Act 1988 (‘DMCA’), (Weiss, Thurbon and Mathews, 2004, p. 114). Thus, jurisdictions with such divergent cultural and legal traditions as Singapore, Chile and Australia find themselves applying identical provisions in dissimilar conditions: it is only to be expected that the interpretations and results might diverge. In the case of the reception of DMCA provisions, signatory countries are effectively required to implement legislation that replicates US intellectual property laws, even though their own legal frameworks may not contain the checks and balances that protect US society from the undesirable side-effects (such as the ‘chilling’ of free speech) that those laws could produce. In the US, for example, fair use provisions provide some protection to ‘fair’ users of copyright materials, but Australian law does not contain the fair use tradition and its ‘fair dealing’ principles are far narrower. Calls for new Australian fair use provisions in response to the FTA have met resistance from industry groups that profit from the new restrictions; industry argues that importing US-style fair use provisions would ‘somehow compromise the integrity of the Australian legislation’ (Rimmer, 2006, p. 29). In a situation in which the integrity of the local law is arguably already being compromised in order to meet the requirements of a new bilateral treaty, it is questionable whether responses by local law-makers within the recipient legal system can really be found guilty of damaging the domestic law’s internal structure and underlying principles. Either way, the fact that it must operate in a different legal system means that the received law will inevitably end up looking somewhat different to its donor counterpart. The inward transplant of foreign legal principles obviously affects the integrity and interpretation of the domestic law; the outcomes of such quasi-harmonization cannot be expected to be uniform. Kenneth Crews’ ‘Harmonization and the Goals of Copyright: Property Rights or Cultural Progress?’ in Chapter 13 looks at the effects of the global harmonization of intellectual property law standards on US copyright law and demonstrates that the US has not been immune to changes to domestic doctrines as a result of the global harmonization process. He concludes that: The transition from previous law to ‘harmonized’ law has generated clumsy juxtapositions of legal doctrines, reflecting a collision of cultural and economic objectives that underlie copyright. Most of all, the drive toward greater harmonization has produced copyright law that simply drifts from its constitutional purposes ... (p. 315)

On this view, even a dominant proponent of the globalization of intellectual property standards through worldwide harmonization is not immune from impractical, unwanted or culturally-inappropriate collateral fallout appearing in its domestic laws. Examples Crews provides include the extension of the copyright term (pp. 315-318 and 325-326), the removal of certain copyright formalities (pp. 319-320), and the introduction of ‘moral rights’ - a traditionally Continental European intellectual property concept - into US copyright law (pp. 321-322). He concludes that many of the changes to US copyright law have benefited only a small number of people and have harmed the public interest (pp. 328 and 333-334). It

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is a criticism that has been levelled worldwide at recent attempts to harmonize intellectual property standards around the globe and it is interesting to see how this problem of collateral damage has also affected US laws. While the effects of harmonization on developed-country recipients are certainly important, the situations of developing countries recipients have received far more attention in discussions about the effects on domestic legal doctrines of harmonizing intellectual property law standards globally. This probably reflects a perception that the developing countries have the most to lose from the process, as well as the fact that it is the legal doctrines of developing countries that typically have to change the most in response to TRIPS and the new global standard-setting and harmonization process. In turn, this is a reflection of the fact that the new global standards have tended not to derive from jurisprudence shaped in developing nations. Chapter 12 examines the implications on developing countries and their laws of harmonizing patent law. Robert Weissman’s essay 4A Long, Strange TRIPS: The Pharmaceutical Industry Drive to Harmonize Global Intellectual Property Rules, and the Remaining WTO Legal Alternatives available to Third World Countries’ surveys the way in which the US pharmaceutical industry lobbied to have strict, US-style patent laws adopted worldwide. This process has seen the global harmonization of patent law following a US model, in which patent rights-holders are typically awarded more rather than less control over their inventions and scientific discoveries. The effect is to limit the knowledge that is freely available for use by others and, in jurisdictions that subscribe to 'national treatment’ agreements, to ensure that licenses are sought and royalties paid for the use of others’ foreign patented inventions and discoveries. When the rights-holders typically reside in economically developed nations, this can lead to a stream of capital leaving developing countries. Alternatively, it can mean that patented material remains unaffordable, or that patent laws are disregarded and patents breached. Weissman shows that the US-style patent model was only one of several formulae that could have been chosen when the standards were being designed and drafted, and he looks at the ways in which proponents of this model skewed the debate in their favour. The success of these tactics led to the US-style model being enshrined in TRIPS, and Weissman goes on to discuss methods by which developing countries can import this model into their own laws while nonetheless departing in significant ways from the protection offered by the US law (pp. 282-302). The last essay in this section is Keith Maskus and Jerome Reichman’s analysis of the ways in which developing countries might interpret and implement TRIPS-mandated standards in ways that best protect their national interests. Contained in Chapter 14, 'The Globalization of Private Knowledge Goods and the Privatization of Global Public Goods’ was originally published in the Journal o f International Economic Law, but the copy in this volume is reproduced from Maskus and Reichman’s own edited collection entitled International Public Goods and Transfer o f Technology: Under a Globalized Intellectual Property Regime (2005). Maskus and Reichman note that the laws required by TRIPS and TRIPS-plus agreements hamper particular ways of promoting imitation and innovation, and they 'may raise roadblocks against deploying new technologies that could help improve the provision of environmental protection, health care, biological diversity, and basic scientific research’ (p. 343). However, faced with the fa it accompli of TRIPS, existing bilaterals and globalization via intellectual propertization, developing countries must attempt to make the best of what many of them perceive to be a bad situation. One approach is to continue to lobby for change.

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Another concurrent strategy for protecting national interests is to construe TRIPS-mandated provisions in one’s favour and implement laws accordingly. Maskus and Reichman argue that wise management of innovation policies and information/technology transfers may enable developing countries to attract foreign direct investment (‘FDI’) and technology licensing, as well as increase their access to advanced knowledge goods (p. 338). They suggest that careful implementation of globalized intellectual property standards can create a legal environment that attracts overseas investment by protecting foreign intellectual property rights. Such conditions can encourage technology transfers to less industrialized economies and give developing countries access to direct investment and advanced technologies that they might not otherwise have obtained (p. 338), ideally resulting in the development of local industries, domestic expertise and new intellectual property that would not otherwise have prospered (p. 343). Used in this way, TRIPS may indeed enhance economic development in less developed or industrialized countries. Examples of the recommendations that Maskus and Reichman make for the wise implementation of the required standards include: halting and/or opting out of further international intellectual property standard-setting exercises that would promote the ratchet effect (pp. 368-371); the design of national innovation systems and national intellectual property bureaux to coordinate their domestic policies (pp. 371-373); the planning of strategic investment in the public goods that are important to rapid technological progress (p. 368); and banding together in coalitions to achieve the best possible bargaining position when negotiating bilateral and multilateral agreements (p. 372). Their essay thus points to strategies by which developing countries - and others - might resist the globalizing effect of international intellectual propertization by adapting their domestic laws so as to best benefit from the changes. In her essay on ‘The Impact of Foreign Investment on Indigenous Culture: An Intellectual Property Perspective’ in Chapter 15 - examined further below - Doris Long offers equivalent strategies for developing countries seeking to assure the protection of their native and indigenous cultures in the face of globalization via intellectual propertization. She contends that TRIPS standards ‘need not become cultural straitjackets, designed solely as a sword to protect the deculturizing acts of foreign investors’ (p. 415), and she suggests general TRIPScompliant approaches that countries can take to co-opt their intellectual property laws in the fight to protect local cultures against the culturally-destructive effects of foreign investment. These measures involve requisitioning intellectual property laws by taking advantage of the flexibility inferred from some TRIPS provisions and interpreting them to the advantage of a particular society (pp. 415^131). For example, Long suggests that the moral right of integrity could be used to protect the cultural integrity of native works (pp. 427^128). Reading through these essays, it is obvious that merely harmonizing laws will not harmonize outcomes. TRIPS and other international agreements might propel global transplants of intellectual property doctrines, but they often do so objectively and with little or no regard for the subjective local conditions into which they are being inserted and expected to operate. Where transplanted laws fit uncomfortably into a recipient jurisdiction’s legal structures, they risk changing or undermining that country’s legal traditions and the efficacy of its laws. They also risk generating resentment and a disregard for the law. Intellectual property law cannot be effective without public support and observance of its provisions (Hamilton, 1996, p. 616). Surely it must therefore be in the interests of those who

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propound the international harmonization of intellectual property to devise laws that will suit the societies into which they are being transplanted? And, ultimately, the global harmonization of intellectual property standards seems more likely to be successful - that is, to produce the desired results by which it is justified, rather than just appearing in the law books as current but disregarded statutes - if it is accompanied by other policies that will concurrently improve and harmonize the economic and social conditions of nations worldwide. May has argued that globalization by intellectual propertization cannot be morally justified until wealth, industrialization and economic development are more equally distributed throughout the global society (Chapter 2, p. 22). Whether or not one goes this far, it must surely be the case that global respect for intellectual property rights is more likely to be achieved alongside a reduction in poverty and preventable disease, an increase in equality, and the promotion of democracy. Tangible benefits are arguably more likely to engender respect for intellectual property rights than simply transplanting standards, announcing their potential benefits, and proclaiming their force as law. As Dinwoodie notes: It is not a new lesson that real approximation of laws, one that will endure, does not come from the transplanting of disembodied concepts. But the pedigree of the lesson makes it no less valuable. It is economic and social contexts that sustain these laws, and if a similar social setting does not exist, merely harmonizing text may be of little value. (Chapter 11, p. 250)

Beyond Law: Cultural Effects of Global Intellectual Propertization The final group of essays in the collection explores some of the disparate and eclectic socio­ cultural consequences of globalization via intellectual propertization. The many possible outcomes of globalization by intellectual propertization are diverse and not yet entirely clear, and a number of excellent journal contributions consider the social and cultural effects of this process. The four essays selected for Part V provide just a sample of the superb scholarship that is being done in this area. These pieces touch on a variety of perspectives, synthesizing techniques borrowed from subjects such as economics, legal analysis (including international law, constitutional theory and human rights law), law and society scholarship, philosophy, critical theory, political science, sociology and anthropology to assess some of the short- and long-term socio-cultural implications of the globalization that is accompanying the process of harmonizing intellectual property law standards worldwide. This introduction to the collection concludes by offering preliminary glimpses of these selected essays, which themselves offer snapshots of some of the ways in which the world is changing as a result of globalization via intellectual propertization. Doris Long’s aforementioned analysis of the impact of foreign investment on indigenous culture in Chapter 15 examines deculturization as an upshot of globalization. A degree of commercial uniformity worldwide is no doubt to be expected when copyright laws are harmonized globally. It should therefore come as no surprise when the same music, movies, theatrical shows, art, books and computer software can be found throughout the world. It is likewise unsurprising that many of the same companies, brands, logos, advertisements and fashions appear all over the world: this is a predictable outcome of globalizing trademark laws. When the intellectual property laws that underpin commercial practices such as franchising and branding enable these techniques to be extended across national borders, replicated

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worldwide, and regulated as if they were in their home-economy, a substantial degree of global standardization and homogeneity must be anticipated. Globalizing intellectual property laws helps to create legal and economic conditions that allow culture to be commodified and merchandized internationally. (Long, Chapter 15, pp. 383-384) It can also have the side-effect of ‘deculturization’ of traditional customs, rituals and folklore (pp. 395-397), and (as referred to in the previous part of this introductory essay) Long suggests ways in which TRIPS-compliant laws could be commandeered by the nationals of developing countries and other recipients of foreign intellectual property law standards to protect their indigenous cultural rather than allow it to be exploited by foreigners. Deculturalization of societies is arguably an upshot of trends such as ‘Coca-Colonization’ or ‘MeWorld’: the global spread of internationally recognizable commercial symbols such as Coca Cola, McDonalds, KFC, Microsoft and CNN. Long describes this as ‘the new economic imperialism of developed countries’ (p. 393). These symbols of commercial activity infiltrate the popular culture and transcend political and national boundaries, sometimes replacing indigenous symbols such as customs, rituals and folklore. This trend also has the capacity to appropriate and commercialize traditional symbols, which can isolate the symbol from its customary meaning and give it anew tokenistic significance (pp. 395-396). Intellectual property laws underpin these commercial activities. Globalization via intellectual propertization, and particularly the entrenchment of procedural enforcement norms into domestic intellectual property laws worldwide (p. 413), has the capacity to threaten native cultures. However Long believes that, used wisely, the new global intellectual property standards can also be adopted to protect indigenous cultures against the deculturalization processes whose impacts have prompted a number of anti-globalization protests to date. In Chapter 16, Ruth Gana asks ‘Has Creativity Died in the Third World? Some Implications of the Internationalization of Intellectual Property’, drawing on classical canons of political science to analyse correlations between capitalist development and a society’s production of intellectual goods. Gana points to the disjuncture that occurs between a state’s obligations to its people and its international obligations when it accedes to a treaty, such as TRIPS, which perhaps conflicts with the underlying values of its society. Rather than focusing on the aforementioned ‘sovereignty’ issues implicated by such a situation, Gana looks at this as a problem of conflicting ‘values’. Noting the political science viewpoint that law is the main institution by which a society can assert its values (p. 436, quoting Alexander M. Bickel), Gana’s analysis contrasts issues involving political values with those involving consumer values or ‘the good life’. Where intellectual property law upholds values that promote a population’s conception of the good life, dissonance is less likely. Problems arise when the sets of values conflict. The essay argues that it is ultimately a society’s conception of what constitutes the good life that will determine what sort of intellectual property regime a nation considers appropriate. Gana believes that we see in TRIPS an attempt to globalize the conception of the good life - one underpinned by a belief in the sanctity of private property rights - that is popular or dominant in the US. (p. 444). Her essay goes on to consider how this political philosophy conflicts with conceptions of how to generate the good life that exist in some of the traditional societies and developing economies that are being forced to come to terms with TRIPS. The essay demonstrates that creativity can occur in the absence of intellectual property laws, and Gana cautions that forcing non-US societies to comply with

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TRIPS provisions could erode the indigenous values that protect their own forms of creativity and conceptions of the good life within those societies: History suggests, that these groups ultimately face, in the absence of laws which recognize and serve in their interests, the translation and thus death of objects and values which undergird their creativity under the current multilateral framework, (p. 464)

On this view, the globalization of intellectual property standards could weaken or destroy the values at the heart of indigenous systems of protecting intangible objects (that is, indigenous equivalents of a Westem-style intellectual property system), and it could ultimately destroy the ability of indigenous peoples and developing countries to preserve their traditional cultures and determine their own social identities. It is a grim outlook in which, Gana says, the peril is created by 4a system which denies legitimacy and threatens the viability of anything opposed to it’ (p. 466). One can only hope that globalization via intellectual propertization does in fact induce less destructive results, and that her warnings prove to be a false alarm. Keith Aoki’s essay on '(Intellectual) Property and Sovereignty: Notes Toward a Cultural Geography of Authorship’ in Chapter 17 looks at a very different challenge to a very different sort of traditional viewpoint: territorial notions of sovereignty as the digital age opens the way for information to flow increasingly fluidly across international borders. Transnational movements of digitized information are prompting questions about the adequacy and sustainability of traditional intellectual property concepts, and the digital environment is itself triggering a re-examination of longstanding intellectual property concepts such as 'romantic authorship’. Transnational movements of objects of intellectual property laws are also undermining traditional notions of sovereignty that are based on geography rather than ownership. The interplay of threatened notions and of contested and evolving concepts, and the ensuing challenge to culturally-engrained beliefs about the role in society of individuals, community, national identity, national borders, sovereignty and property are the subjectmatter of Aoki’s essay. These are matters of belief and identity, and they lie at the heart of the constituent tenets that link members of a society and determine who will belong and who will be considered to be outsiders or 'other’. They are manners of thinking about society that are fundamental to the way in which millions of people live their lives in diverse countries throughout the world, yet they are being challenged by a force of technological and legal change that makes them less appropriate to modem conditions. Aoki examines how the advent of new ways of transferring information is forcing communities to confront these entrenched beliefs. He argues that this logical challenge is precipitated (but not produced) by the march of technology, which is caused by and causing further globalization via intellectual propertization. It is ultimately undermining traditional cultural and philosophical beliefs, and it is therefore a deeply significant phenomenon. Aoki’s essay considers its implications for the future of our societies and beliefs. Globalization’s transformation of economic stmctures can also produce unexpected social effects in both developed and developing societies. In Chapter 18, Rosemary Coombe’s essay on the 'Cultural Life of Things: Approaches To Law and Society in Conditions of Globalization’ investigates the participation of Nigerien Songhay migrants in New York City’s informal economy where they often work as unlicensed street vendors selling merchandise that includes copyright- and trademark-infringing goods (pp. 559-560). Utilising the

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anthropological technique of ethnographical analysis, Coombe examines the way in which the process of globalization involves the movement of ‘people, information, capital, goods and services’ in a manner that links spaces such as cities (p. 540). Certain cities become entrepots for globalization’s movement of people, capital, etc. They are the centres of networks of factories, workers, entrepreneurs, investors, governments, and service outlets and their consumers (p. 542), and they exert a centripetal pull that attracts migration of people, capital, etc. Various types of service provider (for example, labourers, financiers, lawyers, and advertising agencies) congregate in these hubs and support the activities of the enterprises involved in international trade, including trade in intangible goods that are covered by globally harmonized intellectual property laws. The service industries’ workforces spend their income on services and consumer goods, further sustaining the manufacturing and service industries who are their clients and employers. Managers are transferred between operational centres to administer operations, and migrant workers often transfer funds ‘home’ to their countries of origin. The result is a self-perpetuating movement of capital and people around the globe. Many factors contribute to this globalization phenomenon, and intellectual property law is prominent among these. Most of the goods and services that circulate in the global economy are (or have been) in some way underpinned by intellectual property laws. For even the simplest of goods, it is common for trademark laws to protect the commercial symbols that are applied to them, for copyright laws to protect their packaging and informational content, and for patent laws to provide monopoly rights to exploit the structural forms or formulae that make them industrially valuable. This is the formally recognized role of intellectual property law, but intellectual property law also performs an informal role. Intellectual property law affects the goods and services, and the global movement of the goods and services simultaneously affects the intellectual propertization process. Returning to the example of New York City’s informal economy and the Songhay migrants who have been drawn into this global city, Coombe demonstrates how lives are affected by the various and transformative interpretations and meanings that native New Yorkers and new migrants give to the globalizing forces that operate in their city’s communities. She comments that ‘[t]he incorporation of peoples into world economies is not a homogenizing process, but a complex and dialectical encounter between multiple cultural worlds which are all transformed by their mutual embrace’ (p. 551). It is a reaction to social transformation and dislocation, and the symbolic significance of objects protected by globalized international intellectual property laws is one area of contested meanings that New Yorkers negotiate in this context (p. 553). For example, Songhay migrants - and others - who work as unlicensed street vendors selling counterfeit trademarked goods (‘knockoffs’) find their activities structured by conscious or subconscious awareness of the internationally harmonized intellectual property laws that make their work unlawful (p. 549 and 553-554). The migrants may be selling unlicensed - and, therefore, ‘illegal’ - goods precisely because they are not authorized to be in the US at all and are thus excluded from participating in the ‘legitimate’ and legally regulated workforce. Their opportunities for employment are therefore indirectly determined by the very intellectual property laws that make the jobs they do unlawful. Layered on this is another set of cultural meanings that implicate intellectual property laws. It is not just the selling of counterfeit goods (that is, the activity) that is interesting; the nature of those counterfeit goods (that is, their substance) is also symbolic.

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Coombe notes the trend among Songhay migrants to sell branded knockoffs in New York. Their customers are New York’s African American community. Their wares are ‘African’ goods, albeit objects that are produced specifically for an African-American market, as well as goods branded with counterfeit trademarks of the multinational enterprises (such as Polo, Ralph Lauren and Guess) and the sports teams that are most fashionable among the target consumers (p. 564). The Songhay street vendors - Africans in America - thus perpetuate stereotypes within the African-American community, reinforcing consumption patterns with their sales of goods marked with counterfeit trademarks that carry particular significance in this sub-culture. The trademarks have different meanings in different sub-cultures within New York City, and beyond, and the significance attached to them by each sub-culture potentially affects the value and marketing of the trademark by the corporate proprietor (pp. 566-567). The meanings of these trademarks in the informal economy thus affect and are affected by the meanings created for the trademarks by their corporate ‘owners’. In the case of New York’s Songhay community, the meanings that are created are implicated by layer-upon-layer of meaning influenced by intellectual property laws. The meanings change every time one alters the angle from which one is gazing on them. Each of the essays included in Part V thus provides quite different examples of the multitude of - sometimes unexpected - ways in which the process of globalization is a cause and effect of the international harmonization of intellectual property laws standards worldwide. Other essays mentioned on the list of recommended reading that accompanies this collection provide many more ways of approaching the topic. Conclusion The conclusion to this introductory essay is also an invitation to enjoy the collection of essays that follows it. The essays selected for inclusion in this volume demonstrate that, when applied on a global scale, quite specific strategic outcomes can be achieved through the tailoring of internationally applicable minimum standards for insertion into national intellectual property laws. The effects of such globalized standard-setting can be as subtle or dramatic as desired, though the externalities and collateral effects cannot always be predicted. The impact on ordinary people is indirect, and the effects ostensibly occur as a matter of course - they are sometimes even described as naturally occurring rights - thus limiting the likelihood of a popular backlash against the intellectual propertization process itself. In any event, the process is bedecked with legal jargon and it is one about which most people have little understanding. The globalizing effects of the international harmonization of intellectual property laws are therefore unlikely to attract much popular dissent or transform into an election issue for cautious politicians to fear. As a result, international intellectual propertization seems to be a much safer, more flexible, more precise and less contentious option than traditional methods of wielding authority internationally and achieving national advantages abroad, such as military campaigns and occupation or imperial campaigns and colonization. However, as many of the essays in this volume indicate, global intellectual propertization changes existing conditions, and it sometimes does so in unwelcome ways. Global intellectual propertization might stimulate investment and the international transfer of knowledge and technology, but it can also undermine traditional beliefs, concepts and identities. It can challenge traditional models by which societies are organized, and it can have varied and

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unexpected effects on population groups. Global intellectual propertization is a massively important force within the modem world, and its likely consequences should be carefully considered, discussed and addressed. It is to be hoped that the collection of essays in this volume will help bring such issues more clearly into focus. Globalization brings many opportunities, but it also brings risks. It would be short-sighted and foolish to underestimate the effects that today’s globalization of intellectual property standards will have on the societies of tomorrow, and it would be negligent to disregard potential long-term legacies - positive or negative, depending on one’s perspective - as cultures are changed forever as a result of short-term quests for commercial gain. We have learned how to globalize the world. We now need to be cautious in our use of this tool. References Abbott, Frederick M. (1989), ‘Protecting First World Assets in the Third World: Intellectual Property Negotiations in the GATT Multilateral Framework’, Vanderbilt Journal o f Transnational Law, 22, pp. 689-745. Altbach, Philip G. (1995), ‘The Subtle Inequalities of Copyright’ in Altbach, Philip G. (ed.), Copyright and Development: Inequality in the Information Age, Chestnut Hill, Mass.: Bellagio Publishing Network Research and Information Center, pp. 1-8. Bradley, A. Jane, (1987), ‘Intellectual Property Rights, Investment, and Trade in Services in the Uruguay Round: Laying the Foundations’, Stanford Journal o f International Law, 23, pp. 57-98. Braithwaite, John and Drahos, Peter (2000), Global Business Regulation, Cambridge: Cambridge University Press. Brown, Michael F. (2003), Who Owns Native Culture?, Cambridge, Mass: Harvard University Press. Drahos, Peter (2001), Developing Countries and International Intellectual Property Standard-Setting, Study Paper 8, Commission on Intellectual Property Rights. Drahos, Peter with Braithwaite, John (2002), Information Feudalism? Who Owns the Knowledge Economy?, London: Earthscan Publications. Hamilton, Marci(1996), ‘The TRIPS Agreement: Imperialistic, Outdated and Overprotective’, Vanderbilt Journal o f Transnational Law, 29, pp. 613-634. Maskus, Keith E. and Reichman, Jerome H. (2004), ‘The Globalization of Private Knowledge Goods and the Privatization of Global Public Goods’, Journal o f International Economic Law, 1, pp. 279-320. Nard, Craig Allen and Morriss, Andrew P. (2004), ‘Constitutionalizing Patents: From Venice to Philadelphia’, Case Research Paper Series in Legal Studies, Working Paper, 04-12, (August 2004). Office of the United States Trade Representative (2005a), 2004 Special 301 Report: Executive Summary, Washington, 2005. Office of the United States Trade Representative (2005b), ‘Special 301 Report Finds Progress and Need for Significant Improvements’, Press Release Washington, 29 April 2005. Patterson, Lyman Ray (1968), Copyright in Historical Perspective, Nashville: Vanderbilt University Press. Reichman, J.H. (1996-1997), ‘From Free Riders to Fair Followers: Global Competition Under the TRIPs Agreement’, International Law and Politics, 29, pp. 11-93. Rimmer, Matthew (2006), ‘Robbery Under Arms: Copyright Law and the Australia-United States Free Trade Agreement’ 11, First Monday, Online journal: http://firstmonday.org/issues/issuell_3/rimmer/index.html Sell, Susan K. (2003), Private Power, Public Law: The Globalization o f Intellectual Property Rights, Cambridge: Cambridge University Press.

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Sherman, Brad and Bently, Lionel (1999), The Making o f Modern Intellectual Property Law, Cambridge, Cambridge University Press. Weiss, Linda, Thurbon, Elizabeth and Mathews, John (2004), How to Kill a Country: Australia’s Devastating Trade Deal with the United States, Crows Nest, Sydney: Allen and Unwin.

Recommended Reading Adams, Francis and Gupta, Satya Dev (1997), ‘The Political Economy of Globalization: An Introduction’ in Gupta, Satya Dev (ed.), The Political Economy o f Globalization, Boston: Kluwer Academic Publishers, pp. 1-12. Baremore, John Paul (1999), ‘Don’t Shoot the Messenger: Congress and the Prospect of Patent Harmonization’, Loyola Law Review, 44, pp. 761-783. Beck, Ulrich (2000), What Is Globalization?, Cambridge: Polity Press. Blakely, Timothy W. (2000), ‘Beyond the International Harmonization of Trademark Law: The Community Trade Mark as a Model of Unitary Transnational Trademark Protection’, University o f Pennsylvania Law Review, 149, pp. 309-354. Bowonder, B. (2001), ‘Globalization of R&D: the Indian Experience and Implications for Developing Countries’, Interdisciplinary Science Reviews, 26, pp. 191-203. Boyle, James (2004), ‘A Manifesto on WIPO and the Future of Intellectual Property’, Duke Law & Technology Review 9, Online journal: http://www.law.duke.edu/journals/dltr/articles/2004dltr0009. html Campbell, Randy L. (2003), ‘Global Patent Law Harmonization: Benefits and Implementation’, Indiana International & Comparative Law Review, 13, pp. 605-638. Coombe, Rosemary J. (1998), ‘New Dilemmas in International Law Posed by the Recognition of Indigenous Knowledge and the Conservation of Biodiversity’, Indiana Journal o f Global Legal Studies, 6, pp. 59-115. Caviedes, Alexander A. (1998), ‘International Copyright Law: Should the European Union Dictate its Development?’, Boston University International Law Journal, 16, pp. 165-229. Cheek, Mamey L. (2001), ‘The Limits of Informal Regulatory Cooperation in International Affairs: A Review of the Global Intellectual Property Regime’, George Washington International Law Review, 33, pp. 277-323. Collins, Tracy (2001), ‘The Pharmaceutical Companies Verses AIDS Victims: A Classic Case of Bad Verses Good? A Look at the Struggle between International Intellectual Property Rights and Access to Treatment’, Syracuse Journal o f International Law and Commerce, 29, pp. 159-183. Corbett, Ron J.T. (2000), ‘Impact of NAFTA and TRIPS on Intellectual Property Rights Protections in Canada and the United States’, NAFTA: Law and Business Review o f the Americas, 6, pp. 591-636. Cottier, Thomas and Panizzon, Marion (2004), ‘Legal Perspectives on Traditional Knowledge: The Case for Intellectual Property Protection’, Journal o f International Economic Law, 7, pp. 371-399. Demaret, Paul (1995), ‘The Metamorphoses of the GATT: From the Havana Charter to the World Trade Organization’, Columbia Journal o f Transnational Law, 34, pp. 123-171. Demske, Susan (1997), ‘Trade Liberalization: De Facto Neocolonialism in West Africa’, Georgetown Law Journal, 86, pp. 155-180. Dinwoodie, Graeme B. (2004), ‘Trademarks and Territory: Detaching Trademark Law from the NationState’, Houston Law Review, 41, pp. 885-973. Dinwoodie, Graham B. and Dreyfuss, Rochelle Cooper (2004), ‘International Intellectual Property Law and the Public Domain of Science’, Journal o f International Economic Law, 7, pp. 431-448. Drahos, Peter and Braithwaite, John (2002), ‘Intellectual Property, Corporate Strategy, Globalization: TRIPS in Context’, Wisconsin International Law Journal, 20, pp. 451-480.

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Drahos, Peter and Mayne, Ruth (eds) (2002), Global Intellectual Property Rights: Knowledge, Access and Development, Basingstoke: Palgrave Macmillan. Dreyfuss, Rochelle Cooper (2004), ‘TRIPS-Round II: Should Users Strike Back?’, University o f Chicago Law Review, 71, pp. 21-35. Edwin L.-C. and Qui, Larry D. (2003), ‘The North’s Intellectual Property Rights Standard for the South?’, Journal o f International Economics, 59, pp. 183-209. Footer, Mary E. and Graber, Christoph Beat (2000), ‘Trade Liberalization and Cultural Policy’, Journal o f International Economic Law, 3, pp. 115-144. Gadbaw, R. Michael (1989), ‘Intellectual Property and International Trade: Merger or Marriage of Convenience?’, Vanderbilt Journal o f Transnational Law, 22, pp. 223-242. Ganguli, Prabuddha (1998), ‘Intellectual Property Rights in Transition’, World Patent Information, pp. 171-180. Germain, Randall D. (ed.) (2000a), Globalization and its Critics: Perspectives from Political Economy, London: Macmillan Press Ltd. Germain, Randall D. (2000b), ‘Globalization in Historical Perspective’ in Germain, Randall D. (ed.), Globalization and its Critics: Perspectives from Political Economy, London: Macmillan Press Ltd, pp. 67-90. Gervais, Daniel J. (2002), ‘The Internationalization of Intellectual Property: New Challenges from the Very Old and the Very New’, Fordham Intellectual Property, Media & Entertainment Law Journal, 12, pp. 929-990. Gonsalves, Maria Eduarda (2002), ‘Technological Change, Globalization and the Europeanization of Rights’, International Review o f Law, Computers and Technology, 16, pp. 301-316. Grupp, Hariolf and Schmoch, Ulrich (1999), ‘Patent Statistics in the Age of Globalization: New Legal Procedures, New Analytical Methods, New Economic Interpretation’, Research Policy, 28, pp. 377396. Gupta, Amit (2004), ‘Patent Rights on Pharmaceutical Products and Affordable Drugs: Can TRIPS Provide a Solution?’, Buffalo Intellectual Property Law Journal, 2, pp. 127-153. Gupta, Satya Dev (ed.) (1997), The Political Economy o f Globalization, Boston: Kluwer Academic Publishers. Gutterman, Alan S. (1993), ‘The North-South Debate Regarding the Protection of Intellectual Property Rights’, Wake Forest Law Review, 28, pp. 89-139. Heifer, Laurence R. (2004), ‘Regime Shifting: The TRIPs Agreement and New Dynamics of International Intellectual Property Lawmaking’, Yale Journal o f International Law, 29, pp. 1-83. Hicks, Laurinda L. and Holbein, James R. (1997), ‘Convergence of National Intellectual Property Norms in International Trading Agreements’, American University Journal o f International Law & Policy, 12, pp. 769-814. Jones, R.J. Barry (2000), ‘Globalization in Perspective’ in Germain, Randall D. (ed.), Globalization and its Critics: Perspectives from Political Economy London: Macmillan Press Ltd, pp. 245-266. Koechlin, Tim (1997), ‘The Limits of Globalization: An Assessment of the Extent and Consequences of the Mobility of Productive Capital’ in Gupta, Satya Dev (ed.), The Political Economy o f Globalization, Boston: Kluwer Academic Publishers, pp. 59-79. Leaffer, Marshall A. (1998), ‘The New World of International Trademark Law’, Marquette Intellectual Property Law Review, 2, pp. 1-31. Legrain, Philippe (2003), Open World: The Truth About Globalization, London: Abacus. Long, Doris Estelle (2002), ‘Democratizing’ Globalization: Practicing the Policies of Cultural Inclusion’, Cardozo Journal o f International and Comparative Law, 10, pp. 217-269. MacLean, John (2000), ‘Philosophical Roots of Globalization and Philosophical Routes to Globalization’ in Germain, Randall D. (ed.), Globalization and its Critics: Perspectives from Political Economy, London: Macmillan Press Ltd, pp. 3-66.

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Maskus, Keith E. (1997), The International Regulation o f Intellectual Property, Seminar Paper 97-11, Centre for International Economic Studies, University of Adelaide, Australia. Maskus, Keith E. (2004), The WTO, Intellectual Property Rights and the Knowledge Economy, Cheltenham: Elgar Reference Collection. Maskus, Keith E. and Reichman, Jerome H. (eds) (2005), International Public Goods and Transfer o f Technology under a Globalized Intellectual Property Regime, Cambridge: Cambridge University Press. May, Christopher (2000), A Global Political Economy o f Intellectual Property Rights: The New Enclosures?, London: Routledge. May, Christopher (2002), ‘The Venetian Moment: New Technologies, Legal Innovation and the Institutional Origins of Intellectual Property’, Prometheus, 30, pp. 159-179. Mercurio, Bryan C. (2004), ‘TRIPS, Patents, and Access to Life-Saving Drugs in the Developing World’, Marquette Intellectual Property Law Review, 8, pp. 211-253. Murumba, Samuel K. (1998), ‘Globalizing Intellectual Property: Linkage and the Challenge of a Justice-Constituency’, University o f Pennsylvania Journal o f International and Economic Law, 19, pp. 435-460. Nayyar, Deepak (1997), ‘Globalization: The Game, the Players and the Rules’ in Gupta, Satya Dev (ed.), The Political Economy o f Globalization, Boston: Kluwer Academic Publishers, pp. 13-40. Nerozzi, Michelle M. (2002) ‘The Battle over Life-Saving Pharmaceuticals: Are Developing Countries being ‘TRIPped’ by Developed Countries?’, Villanova Law Review, 47, pp. 605-641. Perraton, Jonathan (2000), ‘What are Global Markets: The Significance of Networks of Trade’ in Germain, Randall D. (ed.), Globalization and its Critics: Perspectives from Political Economy, London: Macmillan Press Ltd, pp. 164-182. Petras, James and Veltmeyer, Henry (2001), Globalization Unmasked: Imperialism in the 21st Century, London: Zed Books. Reichman, J.H. (2000), ‘The TRIPS Agreement Comes of Age: Conflict or Cooperation with the Developing Countries?’, Case Western Reserve Journal o f International Law, 32, pp. 441-470. Rein, Judy (2001), ‘International Governance through Trade Agreements: Patent Protection for Essential Medicines’, Journal o f International Law & Business, 21, pp. 379-408. Sell, Susan K. (1998), Power and Ideas: North-South Politics o f Intellectual Property and Antitrust, New York: State University of New York Press. Sell, Susan K. (2002), ‘Post-TRIPS Developments: The Tension Between Commercial and Social Agendas in the Context of Intellectual Property’, Florida Journal o f International Law, 14, pp. 193— 216. Sell, Susan K. (2004), ‘What Role for Humanitarian Intellectual Property? The Globalization of Intellectual Property Rights’, Minnesota Journal o f Law, Science & Technology, 6, pp. 191-211. Smith, Carrie P. (2000), ‘Patenting Life: The Potential and the Pitfalls of Using the WTO to Globalize Intellectual Property Rights’, North Carolina Journal o f International Law & Commercial Regulation, 26, pp. 143-181. Stevenson, Nick (2000), ‘Globalization and Cultural Political Economy’ in Germain, Randall D. (ed.), Globalization and its Critics: Perspectives from Political Economy, London: Macmillan Press Ltd, pp. 91-113. Su, Evelyn (2000), ‘The Winners and the Losers: The Agreement on Trade-Related Aspects of Intellectual Property Rights and its Effects on Developing Countries’, Houston Journal o f International Law, 23, pp. 169-218. Tully, L. Danielle (2003), ‘Prospects for Progress: The TRIPS Agreement and Developing Countries after the DOHA Conference’, Boston College International and Comparative Law Review, 26, pp. 129-143.

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Wade, Robert Hunter (2003), ‘What Strategies are Viable for Developing Countries Today? The World Trade Organization and the Shrinking of “Development Space’” , Review o f International Political Economy, 10, pp. 621-644. Yang, Yong (1998), ‘Why do Southern Countries have Little Incentive to Protect Northern Intellectual Property Rights?’, Canadian Journal o f Economics, 31, pp. 800-816.

Part I The Politics and Economics of Global Intellectual Propertization

[1] THE INTERNATIONAL RELATIONS OF INTELLECTUAL PROPERTY W.R.

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o r n is h *

I n t r o d u c t io n I n t e l l e c t u a l property is not a term with a standard meaning. Traditionally it was used to describe the copyright protection of authors and to distinguish this from industrial property, i.e., patents for inventions, industrial design rights, plant variety rights, trade marks and the like. Recently it has become an umbrella for copyright, rights related to it and the various forms of industrial property. The new generic grouping has been needed for a world where demand for these rights has risen to an altogether new pitch. In part this is the consequence of extraordinary advances in technologies which make recorded information easily and precisely reproducible; and partly it supports the quest of advanced economies to conserve superior knowledge as a weapon in international trade. The subject is accordingly complicated and full of perplexities. This paper concentrates on one basic aspect of the international relations which seem increasingly to determine how it develops in order to meet new needs. The paper is addressed primarily to non­ specialists, so it is desirable to make a few introductory points, which will be organised under three headings.

A. The Growth o f Intellectual Property When countries take off into industrialisation, at least under some variant of market economy, they accept the need for intellectual property rights as one legal underpinning of that process.1 One common characteristic of all these rights is that individuals acquire power to stop others engaging in commercial conduct of a particular kind; they may be prevented from producing and marketing a * This article is based on an inaugural lecture delivered in the University of Cambridge on 27 February 1992. 1 Or so one may say by way of encapsulation; but along the way there has been unending controversy—over whether a measure o f protection should be accorded, and if so for what purposes and for what period. Once established in a country, intellectual property rights have often shown considerable resilience, even in face of a state’s conversion from capitalism to advanced socialism.

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patented machine, substance or process, a copyrighted book, film or picture; or they may be enjoined from selling goods or services using another’s trade mark or get-up. The rights are referred to as property, and in varying senses they are good against persons with whom no relationship exists.2 They are “property” also because the word has reassuring associations quite at odds with “monopoly”; but— inescapably—exclusive rights to prevent other people from doing things are at least monopolistic in a legal sense, if not necessarily in an economic one.

B . National Character Intellectual property rights exist as instruments of legal-cum-economic policy country by country. There may be supranational arrangements for the acquisition of these national rights, as is now the case with the European Patent Office in Munich.3 But no international and very few regional institutions yet grant rights which have a unified legal effect over more than the territory of a single nation state.4 Certainly the European Community has well-developed plans to introduce a patent and a trade mark operating throughout the Common Market.5 These will each become alternatives to national patents and trade marks. However, a certain hang-fire quality besets these projects, for all their value as symbols of the completed internal market.6 2 There is no homogeneity about this. The most uncompromising are rights good even against those who produce or acquire the protected idea independently—as with patents for inventions, registered (and sometimes unregistered) trade marks and many systems of registered industrial designs. By contrast, copyright and trade secret protection depend upon acquisition of material from the plaintiff either directly or indirectly. 3 Established by the European Patent Convention 1973 and put into operation from 1 June 1978, its use by multinational industry has made it a success beyond common expectation. It now has 14 participant states, comprising most of the EC, plus Austria, Sweden and Switzerland. 4 The best-known examples of supranational schemes are the Benelux trade mark register and designs register. 5 The Community Patent Convention was initially signed by Common Market states as long ago as 1975, as a complement to the European granting system mentioned in note 3 above. It has since been amended on two occasions, but still waits in the wings as an institution in its own right. It has in the meantime been of considerable significance in the modernisation and harmonisation of national patent laws. The Community Trade Mark, which evolved through the 1980s, is to be the subject of an EC Regulation (under article 235, Treaty of Rome) establishing a Community Trade Mark Office. While it is still not finalised (no decision has been reached on the official language or on the site o f the Office), there is already in force a Directive designed to bring national trade mark laws into conformity with basic requirements of the future Community system. So again there has already been a considerable harmonising effect from the inchoate law. * Whatever political drive there is for the introduction, it is not matched by equal pressure from industry within the Community. By and large users arc content with the half-way house of a European Patent Office which grants a “bundle” of national patents, normally in common form; and with national trade mark registers, which will continue to be much used because of language differences and which may in any case become more completely linked through implementation of the 1989 Protocol to the Madrid Agreement on the Internationa! Registration of Trade Marks.

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Because intellectual property has been so closely allied to national economic objectives there has been some tendency in each country to exclude nationals of other states from acquiring or retaining it. The tendency is most marked in relation to copyright, because its subject matter in particular does not incline recipient countries to pay out royalties to foreign owners. This has meant that at a secondary, but highly important level, agreements have been necessary between states for the mutual recognition of intellectual property. At first there were bilateral arrangements which required strict reciprocity. But over the past century, the need has come largely to be satisfied through multilateral conventions. The two most basic of these—both with many countries around the world as members—have celebrated their centenaries over the past decade: they are the Paris Convention on Industrial Property (patents and designs, trade marks and unfair competition), originally of 1883; and the Berne Convention on Copyright (or more strictly Authors’ Rights) of 1886. Both are now administered by the UN organ in the field: the World Intellectual Property Organisation (WIPO). These Conventions are at the heart of my present subject. Both Conventions can be amended only by the unanimous agreement of member states. Nonetheless, until relatively recently they have been revised every two decades or so, mainly so as to increase their scope in favour of industrialised producer countries. At the same time, member states have honoured their obligations in the main, without any too scrupulous regard for precise compliance. But then there are as yet no specific provisions for dispute settlement in the Conventions; nor is intellectual property a field in which one country ventures to institute proceedings against another before the International Court in order to demand that a Convention be strictly observed. The comfortable, slightly dishevelled, approach of earlier decades has not, however, survived into a world of much heightened inter­ national trade. On the one hand leaders of many industries see their products being pirated on an increasing scale, not least in those countries undergoing novel and rapid industrialisation. On the other hand, the least successful countries of the developing world, threatened in many overwhelming ways, see intellectual property as a leech used selfishly and aggressively by the richest to suck away their little wealth, leaving no nourishment behind from which they can replenish their economic blood supply. They have argued that the Conventions must be adapted so as to foster their ability to attract foreign technology, and also the stuff of learning, entertainment and sophisticated marketing so as to found and foster their domestic industry. As a result, the 1967 revision of the Berne Convention on

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Copyright at Stockholm came close to disaster and was rescued only by a special compromise four years later.7 And while between 1981 and 1984 the WIPO valiantly sustained efforts to revise the Paris Convention, the negotiations ended in an adjournment sine die. The standard assumption has since been that neither Convention is now capable of direct amendment, though recently an Expert Group has been examining the possibility of elaborating or refining the Berne Convention, possibly by means of a separate Protocol for those states willing to accept it. More significantly, in a scissors movement led by the United States, there has been a revival of bilateral action in the course of country-to-country trade talks; and at the same time, the prospect of a new measure of international agreement has been raised in the present Uruguay renegotiation of the General Agreement on Tariffs and Trade, the GATT.8 To this new level of international excitement I shall come back at a later stage. C. Characteristic Types I must return briefly to intellectual property at the national level: as nations have engaged in the business of devising laws in this field, three broad types of intellectual property have predominated. There is much greater difference between these three types than between the various national laws relating to any one type. The three types are as follows. 1. Patents fo r technological inventions. Since we look upon technical advance as a crucial key to economic progress, both national and international, great quantities of research and development are directed to discovering what is there to be unearthed. Patent systems offer, and perhaps achieve, a short term incentive to this process. A typical maximum term nowadays is 20 years,9 the right being accorded 1 The special concession of compulsory licensing powers to developing countries, particularly as respects translations into local languages and educational material, survived as an Appendix to the Paris Act of Berne, but in considerably modified form: see Ricketson, The Berne Convention fo r the Protection o f Literary and Artistic Works: 1886-1986 (1987), pp. 117-124. 8 Since the GATT already embodies dispute settlement machinery, it is a more efficient international mechanism than either of the main intellectual property Conventions, and this superiority has been a major argument in favour of including “trade-related” intellectual property within the GATT. When eventually it proves possible to amend the intellectual property Conventions, it is likely that they too will acquire dispute settlement arrangements (for WIPO consideration of the issue, see further j 1990] Copyright 54). Contracting states may then come to regret some of the terms which they have in the past accepted without fear of being brought to account. 9 A maximum term (i.e., one subject to the payment o f renewal fees) o f 20 years from the date of application for the patent has become standard in Western Europe: sec the European Patent Convention 1973, art. 63. The basis of calculation remains somewhat different in some systems, notably that of the United States. This is one of the matters on which there is currently negotiation in an attempt to reach a common approach at least among industrial nations.

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not for invention in itself but (in most countries) for being first to apply and so to secure a patent for the invention. This patent gives a right which has effect even against those who independently reach the same result. Typically states have been willing to allow patents to foreigners, because they have been moved to adopt their system in any case by the hope of attracting advanced foreign technology to their country; they are more likely to wish to impose conditions later (particularly by way of compulsory licence) if they find that the technology is not being used in domestic production and the patent merely protects importation. This has been an obsession of today’s developing countries, but they have behaved in the matter no differently from the developing countries of earlier periods. All these factors underscore how predominantly patent systems have economic enhancement as their goal, rather than any conception of natural entitlement by way of reward to the inventor personally.10 The most fundamental characteristic of a patent for a particular invention is its potential ability to confer real market power in an economic sense— the power to restrict production and maintain prices so as to maximise profitability in the absence of direct competition. This potential is realised only in a tiny proportion of all inventions actually patented. But the lure is there, as is demonstrated by the resilience of patent systems, for all the criticism which they face for their cumbersomeness, wastefulness and unpredictability. Their essential drawing power lies in their ability to grant legal exclusivity, in the case of a true break-through, for all the ways of exploiting an invention industrially, not merely in respect of the particular version or application of the concept on which the inventor has actually worked in the course of research. But just because the lure is so considerable, the granting of patents has to be reserved for the best cases—advances which can rank as “patentable inventions”. Today this imports various legal pre-conditions which, in the more developed systems, will include a substantive requirement of inventive step over the existing art, and a Patent Office examination before grant. These conditions make patenting a slow, expensive, complex and often uncertain affair, particularly for small businesses. 10 The British invention patent, given a substantial legal basis in the Statute o f Monopolies 1624, was plainly devised as an exception, for good economic reason, to the general campaign against royal monopolies: among other things, those who brought technical ideas into the Kingdom, even if they were not their ideas, were “inventors". Later, however, conceptions of natural right underpinned the introduction o f patents, first and most notably in the United States and France; and the same rhetoric still emerges from time to lime today. For example, the EC Court o f Justice has justified the “specific subject-matter" of a patent by reference to the need to reward the creative effort of the inventor ( Centmfarm BV v. Sterling Drug Inc. (1974j E.C.R. 1147, Judgment, para. 9). But many concepts in modern law condition the inventor’s entitlement: the need to show that the invention is both novel and inventive and that it is being adequately worked in the territory strongly suggests that the real justification for the system lies in its economic impact.

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2. Copyright. This second basic type of intellectual property is a creature of very different genus. The typical period of copyright protection in a literary, musical or artistic work (what our Continental neighbours would call an “authors’ right”), is for the author’s life and 50 years thereafter. In the Common Market, if the Brussels Commission gets its way, it will soon become life plus 70 years.11 Though copyright acts as a basic prop for the publishing, recording, film and broadcasting industries, the right is by common consent given for a period far longer than is needed to persuade doubting entrepreneurs to invest in the initial commercialisation of works of which the public might otherwise be deprived. Investment decisions are not calculated upon distant prospects but upon predictable returns over relatively short periods. The earnings of even 20 years hence have only the most heavily discounted present value. The cultural well-being of a society, the enlargement of choice for the edification and entertainment of its consumers—these are only secondary objec­ tives of copyright as a form of legal protection. Here, to a degree not found with patents, legislatures have been persuaded to accord rights which will allow the authors of long-lasting works to share in that value for a span which extends beyond their own lives to that of at least one generation of their inheritors. Competitors will have to pay for the right to use the work, if indeed they are not wholly excluded from using it, throughout a period which may be 100 years or more. Such an exclusion of competition has been acceptable because the right is limited to the act of copying the work in question; and moreover to a copying of the particular expression of the work and not the broader, more embracing concept or idea which underlies it.12 The classic notion of copyright has been sustained by the image of the artist-hero. Indeed the sharper-eyed exemplars of that high tradition— one thinks of Charles Dickens, of Victor Hugo, of Richard Strauss13—have campaigned conspicuously for copyright. But the right has long applied over much wider territory than that of works more or less great. In measures which have differed somewhat between countries, it gave legal cover not only to popular culture, some of it remarkably durable, but also to “informational” products n Proposal for a Council Directive Harmonising the Term of Protection o f Copyright and Certain Related Rights (23 March 1992, COM(92) 33 final; draft text: 0 3 EC C 92/6. 11 April 1992). 12 Copyright lawyers, impelled to give meaning to the “idea/expression dichotomy” , find its clusivencss frustrating. But for want of any more stable indicator they continue to pursue it, recognising that otherwise they might be admitting a legal right of oppressive dimensions into the canon o f intellectual property. ° The first for his outrage at US failure to accord copyright to foreign authors (including his much-pirated self); the second for his patronage of I’Association Litterairc et Artistique Internationale, progenitor of the Bcrnc Convention; the third for his championing of performing rights in copyright music.

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of many kinds. Courts everywhere, naturally reluctant to impose their own opinions of what amounts to Art, have let in more and more small coin alongside the notes of high denomination. So much so that, in the modern world of data bases, both the Dutch and the United States Supreme Courts have just sought to impose some limits on this process.14 Working at a tangent to this, there has been a persistent move­ ment, first in the British tradition, then in a growing number of Continental countries, and eventually in the United States,15 to place so-called '‘neighbouring rights” alongside copyright. These are separate, additional rights, given for the most part directly to the financial organisers of the copyright industries—publishers, music and film producers, broadcasting organisations, cable-casting entities. The movement had advanced sufficiently far by 1961 for it then to acquire its own international arrangement, the Rome Convention for the Protection of Performers, Producers of Phonograms (which is international English for the record industry) and Broadcasting Organisations. This Convention, however, suffers from internal strains, as well as outside suspicion, and has attracted adherents only slowly.16 3. Trade marks and unfair competition. The third basic form of intellectual property (though that rather grand appellation fits it ill) is the law protecting trade and service marks, get-up, business names and the like. Here the law, whatever particular form it adopts, has yet again a different objective. In essence, the rights falling under this head have no limit on their duration because what is being protected are those indicators in the process of commercial competi­ tion by which one rival distinguishes his products or services from those of others. The protection cannot keep any trader who wants to market anything from doing so; it merely keeps him from adopting a particular trade dress for his thing if this would lead purchasers to think that it came from another source or had characteristics associa­ ted with another product or service. 14 Romme v. Van Dale Lexicografie (4 January 1991, Hoge Raad); Feist Publications v. Rural Telephone Service (27 March 1991; US Supreme Court); both reported in Dommering and Hugenhollz, Protecting Works o f Fact (1991), Appendices 1, 2. The same line of thought in German law has produced the much contested decisions (beginning with Inkasso-Program (1986) 17 I.I.C. 681). which require, for literary copyright to exist in a computer program, a degree of creativity beyond that of routine program-writing. This severity is now deliberately to be relaxed under the EC’s Directive on Copyright in Computer Programs, art. 1(3) (OJ, 1991, No. L 122142). 15 In the US, this development has been hampered by the Constitutional requirement that rights o f this character be given to “authors”— a conception which is capable of benign extension, but only to a somewhat limited extent; cf. the Feist case, note 14 above. 16 By 1971 the upsurge of record piracy was considered to necessitate a less ambitious Convention dealing with that matter alone.

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In addition to these and other nominate forms of inteliectual property—such as registered and unregistered designs, semiconductor-chip rights and plant variety rights—most developed legal systems have some form of drag-net right, arising as part of their general law of tort or delict, or under legislation directed towards the prevention of unfair competition. This general right enables one competitor to bring a civil action for an injuction and pecuniary relief against another in respect of additional activities which are characterised as unfair competition or some more precise and limited concept within that very general and vague idea. The major tendency historically has been for unfair competition laws to act as a supplement to my third specific category of intellectual property, suppressing passing off and similar confusions of the consumer. It may in particular tackle imitations of get-up, or borrowings from advertising campaigns, whose tendency is to mislead consumers and so damage competitors. It is a development which harnesses the self-protective energy of competitors to the protection of consumers, and some countries— notably civil law systems, such as the German—have been prepared to go much further down this road than others—notably common law systems, such as that of this country. In the international sphere, under the Paris Convention on Industrial Property, article 1Obis, the contracting states undertake to give legal protection against acts contrary to honest practices and amounting to unfair competition, three types being given as illustra­ tion. In brief these are: customer confusion, false disparagement, and misleading statements about goods. Nothing is said about the legal form which this protection should take. Civil law and common law countries alike have been much less ready to allow an unfair competition action where all that has been taken by one competitor from another is information about products or services. There has been a marked, and for the most part, thoroughly virtuous, inclination to say that, save in the cases where a nominate form of intellectual property applies, the process of competition demands a freedom to adopt the ideas of others. This is a judgment of great sense for free market economies, but nonetheless there have been signs, at least in the industrially most advanced nations, that certain compromises are now needed. First, the misap­ propriation of industrial and commercial secrets—information which competitors strive to keep confidential from outsiders by whatever means they can—is coming to be protected not simply through obligations of contract but on a wider basis, which in some countries at least is classified within the general concept of unfair competition. Secondly, those countries with a general unfair competition law have tended in recent years to develop a sub-genus—a right against slavish

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imitation—which may well be available to hinder persistent and unnecessarily close imitation of a rival’s products or services.17 T h e C r e a tio n

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N e w R igh ts

I now move from introductory matters to the problems of today. My focus of attention is on the creation of new forms of intellectual property. Until 20 years ago, the needs of industry and commerce were by and large met by laws of the varying types I have mentioned— at least in developed economies. For a host of reasons intellectual property was not of much significance in less advanced countries. And from an equal variety of causes, that picture of comfort no longer represents the real world. Above all, modern technology has suddenly enhanced immeasurably the opportunities for market-place imitation: it makes the actual copying of sophisticated electronic, microbiological and other things possible at a small fraction of the initial development costs; it enables information to travel, multiply and change unceasingly; and equally it provides new ways of annexing the advertising goodwill and other marketing strategies of others. So there is already a jostling queue of claimants to new intellectual property, who assert that their investment in what they produce is large enough to justify legal protection against corner-cutting imita­ tion. Quite apart from the insistent demands from the computer industry for protection of programs and other elements in software, data bases, computer-generated output and artificial intelligence techniques, there are the burgeoning claims for the commercially successful products of genetic manipulation, including now the demand for patents over new plant and animal forms (most notori­ ously, Harvard’s oncoiogically primed mouse); and at the edges of the entertainment and education industries, there are novel claims that lie beyond the present scope of copyright and its neighbouring rights: for the refurbishment of old sound recordings and now classic films, for instance, or for the format of television game shows (absurd though it might be to accede to such a narrow claim). These are among the outsiders currently beating at the citadel gate. Who can tell what will have replaced them in five or ten years? On present form we can expect the queue of would-be entrants to have lengthened and changed even in that time-span. Intellectual property may be extended to new subject matter either by accretion or by emulation. Accretion involves re-defining 17 A development clearly analysed in Fcllner. The Future o f Legal Protection fo r Industrial Design (1985).

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an existing right so as to encompass the novel material; emulation requires the creation of a new and distinct right by analogy drawn more or less eclectically from the types already known. While many factors affect the choice between accretion and emulation, my purpose here is to emphasise how insistent among them in recent years has become the determination to secure protection across national boundaries; it is now a factor, as I shall argue, so exigent that it tends to crowd out other proper considerations in the search for balanced policy and law. Let me turn to the great issues of the 1980s set by the first demands for new intellectual property from the computer industry; first demands, because already others are on their way. Not surpris­ ingly, these demands arose initially in the United States from its own industry and arrived at a time when computer product-ranges were extending from bespoke tailoring to off-the-peg super-marketing. After considerable hesitation and bewilderment, the major computer lobbyists in the United States pressed for computer programs to be protected by accretion, i.e., by treating them as literary works within traditional notions of copyright; and they have now persuaded much of the world to adopt this approach through the enactment of specific statutory provisions on the matter.18 On the other hand, when it came to protection for the design structure of semi-conductor chips in which so many programs are embodied, the American computer industry opted for emulation. They argued for a sui generis form of right, and in their own country obtained a short-term, 10-year, protection against copying of the chip design.19 The consequences for international relations depended (to a considerable extent) on this choice between accretion and emulation. A major object of implanting computer programs within the concept of literary copyright has become to convince all concerned that this is subject matter which has all along been within those “literary and artistic works” covered by the Berne Convention, and that each of the 1H Early attempts to reach this result through case-law met with some success in the US and other countries, but came to grief in Australia. There a majority of the High Court conceived a program in object code to be nothing other than the means of making a machine function in a particular way; it was not material that could itself be regarded as “literary”: Computer Edge v. Apple (I986J F.S.R. 537. The movement towards legislation, which had begun in the US in 1980, spread further afield from around the time of the Australian decision. It has increased considerably of late (at least 43 states have acted, not all of them Berne or UCC states) and is now the subject of an EC Directive (above, note 14) and may be introduced into a future version of the Berne Convention. See. e.g. (in an incessant literature), Dreier, “The International Development of Copyright Protection for Computer Programs” in Lehmann and Tapper, European Software Law (1993) at pp. 230-232). ,g Semiconductor Chip Protection Act 1984; for which see, e.g., Ladd, Licborwitz and Joseph, Protection fo r Semiconductor Chip Masks in the United Slates (1986); Stern, Semiconductor Chip Protection (1986).

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90-odd member states is therefore under an international obligation to accord this new outgrowth a copyright for 50 years after the life of the author (or more likely authors); and more importantly to give at least that copyright to nationals of all other Berne states.20 So musky indeed was the aroma of these ideas, that in 1989 the United States finally abandoned its 103-year-old resistance and actually joined the Berne Convention;21 which inter alia puts Americans in an unassaila­ ble position to tell us all what the Convention means. By contrast, the separate creation of a sui generis right in semi­ conductor chip layout became part of a converse international strategy. The United States insisted that it would enter mutual relations with other countries only if they adopted legislation which was similar to its own in relation both to the extent of rights and to limitation upon them, notably a special and quite wide-ranging exception which allows the reverse engineering of layouts, essentially for experimental use, in order to discover and make other layouts.22 This insistence on reciprocity was carefully monitored and led, for instance, to an EC Directive requiring Common Market countries to create a chip right in Yankee mould.23 The end point in this strategy should have been a new international agreement making a single web of the growing number of bilateral strands and indeed in 1988 the WIPO did succeed in having such a Convention sighed.24 But its birth appears to have been stillborn: to bring the South to any agreement with the North it was necessary to limit the Convention’s minimum period of protection to eight years and to introduce possibilities of compulsory licensing; neither provision was acceptable to the United States or to Japan and leading states are thus unlikely to ratify the new Convention. If this brief, intense history has a moral, it appears to be: Don’t emulate, accrete. Or at least that is the moral unless you have the nerve to propose doing both for the same subject at the same time— as the EC Commission has just done for data bases.25 If you accrete, 2(1 The Berne Convention was last revised at a time when little thought was being given to program copyright. Accordingly the argument that they are already within the Convention has met with less than universal acceptance, as the WIPO has recently observed: Memorandum on a Possible Protocol to the Berne Convention, reprinted in [1992] Copyright 30. 21 The Berne Convention Implementation Act of 1988 (in force, 1 March 1989) has been described as “ ‘minimalist’— amending U.S. law only where absolutely necessary to bring the United States into compliance with Bcrnc strictures, and then limiting the amendment’s scope to the extent possible": D. Nimmcr in M. Nimmcr and Gcllcr, International Copyright Law and Practice, p. U SA -8. 22 Semiconductor Chip Protection Act 1984, § 906. 23 EC Council Directive (16 December 1986) on the Legal Protection of Topographies of Semiconductor Products (87/54/EEC), OJ 1987 No. L 24/36; implemented in the UK by the Design Right (Semiconductor Topographies) Regulations 1989, S.l. 1989/1100. 24 Treaty on the Protection of Intellectual Property in Respect o f Integrated Circuits, 16 May 1989 (Washington, D .C.). 25 Proposal for a Council Directive on the Legal Protection of Data Bases (22 July 1992; COM (91) 276 final; draft text: OJEC C 156/4, 23 June 1992). The Commission proposes to protect

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in one jump you may gain wide international protection, or at least a sufficient semblance of it for most useful diplomacy. But that brings us to the very problems of accretion. Over time the patent system has certainly undergone much accretive addition—from machines and processes to substances, from purely industrial to agricultural and now medical uses. While the process has often involved intense argument and long delays, at least the discussion has mostly centred on the economic and social impact of granting the extension sought, rather than on collateral issues. It is over accretion to copyright, that the strains become so evident. The tensions relate to the special character of the right, created as it has been to protect a form of cultural endeavour of high intrinsic value and particular individuality. Yet copyright seems so often to be what is wanted. As an informal right against copying which endures for very considerable periods and has a broad international base, it is under constant pressure from accretists. Thus in international circles, record producers have pressed hard of late for a full copyright for their technical expertise in making sound recordings;26 and publishers are currently claiming that their case for a right against reprography of their texts is equally strong.27 Much is heard of the sensitive brilliance of recording engineers, as of the highly creative editing undertaken by publishers’ staff. Claims such as these have gained spark from lighting the touchpaper for copyright in computer programs. What is going wrong may seem simple to identify, but in present circumstances it cannot be too strongly stated. Take again the central case of computer programs. It is true that there is enough common ground between the writing of a book (particularly a mathematical treatise) and the creation of a computer program through the steps of writing first an algorithm (flow-chart), and then detailed source code, before that code is electronically assembled in binary or hexadecimal form for conversion into object code which will function in the computer itself. So there was some case for implanting programs (in at least the early stages of their evolution) within “literary works” for copyright purposes. But to say so, is conveniently to forget all wider issues. The whole first by copyright and at the fringes by an unfair extraction right. Apparently the latter is not to form part of any country’s unfair competition law, particularly so that the EC may play the reciprocity game; how far the rules allow for such nominalism is not known. 26 The case for a producers’ right as an authors’ right has been strongly argued recently, notably at the WIPO Committee of Experts’ Meetings to consider a Berne Convention Protocol (above, note 20). The case has not however made much progress. For an extreme version, claiming that authors’ rights are today anachronistic and therefore “dead”, see Turkevich, 38 J. Copyr. Soc. US 41 (1990). 27 See, for instance, a string of publications from the International Federation of Reproduction Rights Organisations (IFRRO).

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purpose of a program differs from that of a book; its object is not to communicate the expression of ideas to humans for their information, education or entertainment; programs cause a machine to function. In 1984, the High Court of Australia had the courage to say this, following the lead given at first instance by the perceptive Beaumont J. But in consequence there were redoubled efforts around the world to secure legislation which would state computer programs to be literary works, a campaign whose effectiveness has been noticeable not least in Australia itself.28 There are other pointers to the essential rightness of the Australian High Court’s perception: this new type of copyright is not in recognition of intellectual activity by an individual in some humane sphere which may enrich our cultural resources. Programs are rarely the work of authors who expect a flow of royalties throughout their lives and for the next generations of their inheritors, because the economic value will accrue to an employer or be transferred outright to an entrepreneur.29 Programmers are not authors who deserve the right to demand their names on the program, or to object to alterations to the program which reflect upon their moral integrity as program writers.30 It is the investment in creating a highly efficient functional tool for the manipulation of data and ideas which demands—and certainly to some extent deserves—protection. Legislatures round the developed world have been induced over the last few years to accord literary copyright to computer programs by the demonstration of the extent to which plain and immediate piracy goes on, not so much on the domestic hearth (though there are of course problems about video games and word processing packages), as in commerce, industry, finance, government and education. Large and respectable offices everywhere seem to be pock-marked with pirated software, as for instance became apparent in a recent raid on the beleaguered Mirror Group. If this were the only issue, there might be little to worry about. But as is already apparent from the lively course of software litigation 28 See note 18 above; for a recent critical voice,, note esp. Soltisynski (1990) 21 1.l.C. 1. 29 A s a rule, copyright systems do not require that authors or their estates be entitled to any part of the economic return on a work while the right endures. But it is a common mode of dealing for an author to be paid royalties or equivalent sums which are related to the extent to which the copyright is exploited. The justification for granting such a long term of protection is largely related to this. 30 Author’s rights systems o f the Continental type make great play of the need to guarantee moral rights. These give authors rights which are separate from economic rights of exploitation. They remain inalienable by the author, however he or she may choose to deal with the economic rights. This mode o f thought has secured a place in the latest versions o f the Berne Convention, article 6bis of which requires recognition o f the right to claim authorship and to object to derogatory treatment. However, in explicitly acknowledging this Convention obligation for the first time, the UK Copyright, Designs and Patents Act 1988 refuses to extend either of these moral rights (inter alia) to authors of computer programs (see ss. 79(3), 81(5)).

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in the United States, the ambition of the program proprietors is by no means limited to preventing simple piracy of their final product, as sold in object code form. They wish copyright to give broad protection of the various ways in which their programming idea might be realised in detail. In the notorious United States case of Whelan v. Jaslow ,31 the program allegedly taken over and re-written in different form, was for dental treatment records—a storing of personal, financial and oral data which necessarily involves the classification of much the same information in much the same way. Although the detailed content of the program had very largely changed, the Court allowed as part of the “expression” protected by copyright the structure, sequence and organisation of the program; thereby leaving precious little which could be accounted the “idea” on which the program was founded and which would not be protected.32 This approach has since been battered by criticism. If it were to become settled law in major countries, proprietors would not have much need of another of their current campaigns, which is to secure patent protection for computer programs as such. They would acquire a protection of patent-like breadth without any of those systematic controls which limit the scope of patents to the “best cases”— inventions which are novel and not obvious, as tested inter alia in pre-grant examination proceedings. The signs at present are that very extensive copyright is provoking a reaction, mainly from the courts themselves, though there is in the background also the prospect of anti-trust control and legislative intervention, of the type to be found in the “decompilation” exception admitted to the EC Directive on the subject.33 The present limits on the patent system after all are not the result so much of high philosophy as of bitter experience with laxer, over-protective patent regimes. It seems unfortunate that we are destined to witness an equivalent performance in the copyright sphere, when it might have been avoided at the outset by defining the rights accorded in a way suited to their unique nature. There were other important issues raised by this transference of copyright into the sphere of machines and their function which the 31 979 F.2d 1222 (1986). Subsequent case-law has divided into the approving, the distinguishing and the disapproving: cf. as well as the decisions mentioned in the next note, e.g. , Manufacturers Technologies v. CAMS 706 F. Supp. 984 (1989); Lotus Development v. Paperback Software 740 F. Supp. 37. For recent hostility to Whelan, see esp. Computer Associates v. Altai, 92 Cal. Daily Op. Service 10213 (1992) . . Sega v. Accolade, 977 2d Fd. 150 (1992)____ 32 In similar vein, the “look and feel” o f visual elements of computer operations, such as menu displays and video game formats, became subject matter within the scope of copyright, according to some US decisions: e .g ., Broderbund Software v. Unison World 648 F. Supp. 1127 (1986). 33 Directive on Copyright in Computer Programs (note 14 above), art. 6. For the eruptive process by which this exception was generated, see esp. Vinje, “The Legislative History of the EC Software Directive” in Lehmann and Tapper {op. cit., note 18 above) 39.

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initial race for protection looked set to suppress. Only latterly, for instance, did part of the computer industry appreciate the need for some freedom of experimental use, as would be normal in a patent law approach and as had been included in the semi-conductor chip right. Some measure of reverse analysis would then be permitted in order to produce other, perhaps improved or varied programs. In the event, this did become the source of massive conflict and wordy compromise in the EC’s Directive on the Legal Protection of Computer Programs, but only when the Brussels clock already stood at ten-to-twelve. My purpose here, in touching upon the explosive impact of computer program copyright, has not been to delve into the various complex arguments about it perse so much as to extract what lessons I can for dealing with other demands for protection. I am driven above all to one conclusion: what currently is missing in our international foundations is a sufficient accord on the proper scope of industrial property, as distinct from copyright. The only general convention on industrial property remains the Paris Convention. As I mentioned above, when revision was last attempted it reached an impasse, and it did so partly because of the Convention’s unanimity rule, which the United States in particular insisted on maintaining. The world has now moved on a pace or two and some are pinning great hopes on the Intellectual Property provisions in a future GATT. These discussions, however, remain at the level of immediate practical concerns. If eventually adopted, they will contain what the South has to stomach of an indignant North’s most pressing claims for help. The kinds of fundamental revision which I have in mind must come, if they are to come at all, in the Paris Convention. That Convention already covers considerable territory. Its first article lays down that “the protection of industrial property (to which contracting states are binding themselves) has as its object patents, utility models, industrial designs, trademarks, service marks, trade names, indications of source or appellations of origin, and the repression of unfair competition”. Indeed “industrial property shall be understood in the broadest sense . . .” So when in 1988, our own Government invented a new kind of unregistered right in industrial designs34—particularly for technical, non-decorative shapes—it announced that it was proceeding by emulation; accordingly it did not need to accord rights to nationals of other, non-reciprocating countries. It was nonplussed then to hear from the German Government that such a right already fell within its international 34 Copyright, Designs and Patents Act 1988, Part III.

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obligations under the Paris Convention. Our Government was obliged to take defensive action and this may yet undermine the strictly reciprocal position which it was seeking to secure for its new right.35 With the underlying breadth of the Paris Convention in mind, let us concentrate our attention on the commitment already in the Convention concerning unfair competition—the obligation given precision in article lObis by the undertaking to assure to nationals of each other contracting state effective protection against unfair competition, i.e. , “any act of competition contrary to honest practices in industrial and commercial matters”. By these broad and spendidly imprecise sentiments, the states concerned have so far had in mind activities which involve the making of false or misleading statements, as is indicated by the short illustrative list in the article itself. That list does not include actions which involve merely the appropriation of ideas embodied in a competitor’s product: not even the protection of trade secrets or confidential industrial or commercial information is to be found there, let alone the slavish imitation of products. Precisely what is needed is explicit recognition in the Convention text that unfair competition extends to some forms of the misappropriation of the ideas of others. I would certainly not pitch the case high, for there can be no doubt of the difficulties. No country could bind itself internationally to protect subject matter which has not yet been conceived as a commercial possibility and which accordingly has not yet been provided for in domestic legislation or case-law. In any event the object is to find some means which will enable individual countries, in considering the balance of interests between protection and freedom of competition in each new case, to proceed essentially by emulation rather than by some more or less forced and inappropriate accretion. To achieve this within the frame of thought of the present general Conventions is not inherently difficult because the prime Convention obligation lies in the principle of national treatment, i.e., the obligation to offer the same rights to foreigners from other Convention states as are offered to one’s own nationals. What therefore is called for at present is, first, an express statement in article 106& that the misappropriation of ideas may, in certain circumstances, constitute 35 Apart from EC states, qualification for the new right is restricted by the requirement of reciprocity (see Copyright Designs and Patents Act 1988, s. 217 and the Design Right (Reciprocal Protection) (No. 2) Order 1989, S.l. 1989/1294); but s. 221 gives the Government power to accord equal treatment to nationals o f all Paris Convention states. To the extent that the new Design Right is available for designs which are also registrable, it is hard to escape the proposition that the Convention applies. Whether it also applies to purely technical designs when a state chooses to protect them nationally is more debatable. The answer ought to depend upon the substantive meaning of the Convention, and not upon the label which a country uses for a right. But nominalism o f the latter kind is not infrequently heard, particularly on the Continent of Europe.

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the type of dishonest business practice which ranks as unfair competi­ tion under Art 106w of the Paris Convention; and secondly, that it remains for Convention states to define for their own territory which acts are to count as improper appropriation. It will then follow that the same treatment must be offered when nationals of other Convention states are injured by the conduct. One root difficulty will remain. Agreement upon national treat­ ment is a desirable objective whenever a country is predominantly concerned with the protection of its own nationals abroad. But suppose that one country introduces a form of intellectual property which it is most unlikely that others will also adopt. If in addition there is real likelihood that foreigners will be among those who take advantage of the new right at home, then the home country would apparently be getting nothing but disadvantage out of a Convention obligation to accord national treatment. In the circumstances there is likely to be an insistence that international relations be purely on a reciprocal footing. But for a country to go it alone, to the extent of needing reciprocity as a spur, is a mark of desperation. Most private rights in a legal system, including property rights, are offered to foreigners and nationals alike without even the need of general treaty obligations. In special cases, as with intellectual property, Convention arrangements exist to a very large extent by virtue of the principle of national treatment, because it is expected that any right worth introducing will spread by imitation into other countries—at least to those in broadly the same economic condition. The cases therefore in which resort to reciprocity remains necessary, should be regarded as exceptional. While doubtless in relation to new forms of misappropriation it would be necessary to leave reciprocity as an ultimate resort, it might well be possible to subject it to conditions—to arrive, for instance, in the Convention text itself, at limited periods of time during which the principle of national treatment could be replaced by reciprocity. These periods might be preliminary, requiring national treatment to operate after a certain number of years; they might involve a subsequent preclusion, a period after which reciprocity might be demanded of particular countries which refused to offer an equivalent in return. There are various possibilities. What must be reached is international acknowledgement, within a Convention format which already has most important countries adhering to it, that they will normally agree to apply the principle of national treatment to such new forms of industrial property as they create. Then the process of settling the scope and limitations of the new right can be argued in a manner which is not distorted by undue concern over foreign nationals and similar protection abroad.

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o n c lu s io n

Just as intellectual property rights seem to be with us for good, so there are always going to be demands to protect the investment involved in new initiatives, great and small. There will be attempts not only to get protection against specific and detailed imitation but also against all the commercially viable variations of a successful product or service. One historical element worth recalling is that intellectual property was a by-product of the movement of economies from the dominance of local groupings, underpinned by various forms of political and trade protection, towards competition on a national, and even an international, scale. Intellectual property is a residue of legal exclusivity for special cases and needs always to be seen as such. It is of the essence of competition that each participant is constantly examining the products and the services of his rivals to see what he should provide which is the same or is some variation with an enhanced value to some of the customers in the market concerned. In a competitive market imitation is mostly to be reckoned virtuous, not sinful. Intellectual property should be no more than a corrective for those cases where the introduction of novel products and services will be unduly impeded if the special incentive of an exclusive right is not in some measure granted. It is vitally important where new claims to protection are demanded that that measure is no more than is warranted by the particular case. Getting the balance right is never easy and the job is made more difficult where a chorus of demanders chants a firm, reiterative monody, while the voices of doubters make only a thin, aleatory piping. Yet even the most insistent tunes must use standard scales and harmonic progressions if they are to be taken up by listeners. That is why it is so vital, in respect of my present subject, to get such matters as an agreed basis for international collaboration onto a proper footing for current and future needs. To newcomers the adjustment for which I have contended may seem modest in the extreme; to old hands it is likely to appear hopelessly ideal. I want only to say that I think it essential and therefore something to be striven for over time, however unlikely the prospects of success may appear to be at the moment.

[2] Why IPRs are a Global Political Issue Christopher May

1 Kathy Bowrey, “Who’s Writing Copyright’s History?” [1996] E.I.P.R. 322-329. 2 To list a few: Carlos Correa, Intellectual Property Rights, The WTO and Developing Countries (2000); Keith Maskus, Intellectual Property Rights in the Global Economy (Institute for International Economics, 2000); Vandana Shiva, Protect or Plunder? Understanding Intellectual Property Rights (2001); Seth Shulman, Owning the Future (1999). A large political science, and economics, journal literature has also emerged, which is too voluminous to list here. 3 There are of course exceptions, of which James Boyle and Lawrence Lessig are perhaps the most prominent. 4 See Christopher May, A Global Political Economy of Intellectual Property Rights: The new enclosures? (2000).

Some years ago Kathy Bowrey, w riting in this journal, suggested that the history o f copyright was best n o t left to legal scholars alone.1 H er m ain concern was th at while there was m uch being w ritten on copyright, there seem ed little awareness o f this literature by many legal scholars. W ith negotiations getting u n d er way regarding revisions to the Trade-related Aspects o f Intellectual Property Rights (“T R IP s”) Agreement at the W orld T rade O rganization (“W T O ”), this O pinion argues for a similarly wider discussion of the (global) politics of intellectual property. W hile non-legal scholars are often very aware of the legal debates, m any legal scholars and w riters often seem less aware of the political debates emerging around intellectual property generally, rather than regarding its specific forms. These political debates are centred on the proposition that until we have a global society th at is m ore equal we cannot justify a global regime that attem pts to treat all countries and regions similarly when knowledge is m ade property. T h ere has been a flurry o f recent work addressing IPRs in the contem po­ rary econom y,2 b u t a relative lack of work by legal scholars sensitive to the now globalised politics o f IPRs. Work th at has appeared from astute and w ell-inform ed law professors has been adm irably focused and detailed. C o n cern ed w ith specific issues, in particular areas of intellectual property law, this nevertheless often misses the m ore general political issues.3 W hile there is m uch to com m end this work, it also represents a partial failure of political im agination, inasm uch as few political conclusions have been draw n except regarding increm ental reform . T his is not to decry refor­ mism , only to suggest th at there is a significant need to set such focused debates in a broader political context. In this O pinion, the author aims to establish such a context, if only briefly, to spur further analysis, and engagem ent. As readers o f this journal know, IPRs construct a scarcity in knowledge w here none necessarily exists. Intellectual property replaces knowledge’s largely non-rival character w ith a regime of rival property. This is necessary for a price to be taken and for the benefits of “ow nership” to be obtained; m arkets can only properly function where com m odities are not freely avail­ able, and are formally scarce. Space precludes a long discussion of how this im position o f scarcity has been justified, b u t the three narratives that are used in various com binations will be familiar.4 T h e first argum ent is that effort deserves reward. T his draws on a long line of political theory starting w ith John Locke’s argum ent about property rights in previously com m on land being awarded to the diligent cultivator. It has now becom e a m ore general argum ent th at n o t only should effort be rewarded, b ut to stim ulate useful h u m an activity rew ard is vital and necessary. In intellectual property (mobilising the widely accepted, although no t unproblem atic, m etaphor betw een m aterial and im m aterial property) this suggests that only by allow­ ing innovators and creators ow nership rights over their creations can society stim ulate and rew ard their efforts. T h e construction of scarcity serves the social n eed o f encouraging innovation and creativity. Secondly, IPRs also reflect the rights of individuals to own the products o f th eir ow n efforts, in th at these efforts reflect the expression o f an individ­ ual’s self-identity. T h u s individuals should be allowed to own intellectual property in the products o f their m ental activity, because it is their m ental work th a t has produced th at w hich is m ade property. This draws on a notion o f property as a protection from interference by others or the state, as originally set out by G eorge H egel in the early nineteenth century. O n the C o n tin en t for many years and m ore recently in the U nited K ingdom , this has pro m p ted the recognition of the m oral rights of creators and authors to ensure th at their work rem ains as they intended even w hen the econom ic rights have been transferred.

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5 The author dates the (formal) history of intellectual property law from the Venetian statute of 1474, see Christopher May, “The Venetian Moment: New Technologies, Legal Innovation and the Institutional Origins of Intellectual Property” (2002) 20/2 Prometheus 159-179. 6 See for instance, Martha Woodmansee, “The Genius and the Copyright: Economic and Legal Conditions of the Emergence of the ‘Author’ ” (1984) 17 Eighteenth Century Studies 425-448.

T h e th ird narrative o f intellectual property is m ore closely related to the capitalist character of m odern society. H ere the argum ent is concerned with the benefits o f introducing m arkets into any particular area of social exis­ tence. M arkets, it is argued, prom ote efficiency of use, and therefore (again m obilising a m etaphorical link betw een the m aterial and im m aterial), in order to ensure that ideas and knowledge are used efficiently, for the m ax­ im um benefit o f society, m arkets need to be introduced into the distribution o f inform ation and knowledge. H ere the construction of scarcity prom otes efficient use by ensuring inefficient users are priced out of the m arket, while the drive to enhance efficiency itself spurs new innovations. However, because the effects of m arkets in knowledge often impose (sometimes oner­ ous) costs on users, the other two narratives of justification are used to additionally support the construction of property in knowledge. These three narratives of justification appear in various com binations and have becom e p art of the “com m on sense” o f treating knowledge as prop­ erty. However, these narratives imply, b u t seldom explicitly state, that all those involved in the transaction are p a rt of the same society in which the legal settlem ent encapsulated in particular laws has been subject to a legit­ im ate political process. Indeed, the history o f IPRs has been largely con­ c erned w ith politically determ ining the balance between private rights to rew ard and the public benefit of “free” availability of useful inform ation and knowledge. This private-public bargain is encapsulated in the term limits th a t IPRs are subject to, and its variation betw een different forms of intellectual property. Broadly, patents enjoy (under T R IP s’ com pliant laws) only 20 years’ protection owing to the considerable social benefit of innova­ tion being in the pubic dom ain for use by all, while copyrights are subject to a longer period o f protection because it is seen as less costly if expressive works are n o t swiftly and widely distributed and, owing to their enduring usefulness as m arket inform ation, trade marks can be renew ed in perpetuity. A lthough from the beginning the central concern of intellectual property law has been to balance the private and the public,5 500 years o f intellectual p roperty legislation has seen a shift from an em phasis on the public need for inform ation dissem ination, w ith circum scribed m onopolies aw arded in spe­ cific circum stances, to the contem porary (alm ost exclusive) focus on the private need for reward. In earlier centuries tem porary monopolies were aw arded in direct relation to a specific social good that would be produced in the longer term ; they were “ carved o u t” of a public realm of knowledge. H owever, in the light o f the celebration of the individual as creator, along­ side th e emergence o f the individual author as the paradigmatic econom ic actor,6 over tim e this situation was reversed. N ow the public realm of knowledge is largely the residual that is left after all IPRs that m ight possibly be claim ed have been exercised. W here societies share a general level of developm ent and wealth this may be of little im portance, indeed it may reflect previous political negotiation and settlem ent. But, where there are vast disparities in wealth and technical developm ent, things look a little different. T h e history of the international recognition of IPRs is considerably shorter th an any o f its (various) national histories. In the late nineteenth century the Paris and Berne C onventions attem pted to construct an inter­ national regim e for the protection of IPRs, bu t it was only w ith the T R IP s A greem ent over 100 years later, linking IPRs to the dispute settlem ent m echanism at the W T O , that the international regime gained any teeth. T h u s only for the last seven years has there been a truly global legal regime for IPR s, although m any less developed countries (“L D C s”) are still nav­ igating transitional periods. T h e final achievem ent of this “one-size-fits-all” settlem ent has revealed the central problem for the globalisation of IPRs. Its effects already suggest that, w ithout a well-developed global society, the notio n o f a global regim e for IPRs is difficult (if not impossible) to jus­ tify. T h e original intent of including IPRs in the international trade negotia­ tions leading to the form ation of the W T O was merely to enhance inter­ national anti-counterfeiting measures. However, finding that they had a reasonably free hand, a group of m ultinational corporations “helped” the

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7 See Susan Sell, Power and Ideas. North-South Politics of Intellectual Property and Antitrust (1998), especially Chaps 4 and 6. 8 The author has discussed this issue at some length elsewhere, see Christopher May, “Unacceptable Costs: The Consequences of Making Knowledge Property in a Global Society” (2002) 16/2 Global Society 123-124. 9 Kavaljit Singh, “Anthrax, Drug Transnationals, and TRIPs”, Foreign Policy in Focus, April 29, 2002 (available at www.fpif. orgl'outsideI'commentary/ 2002I0204trips_body.html (May 15, 2002)).

U S G overnm ent establish their negotiating position on this issue, and pushed for a m uch w ider-ranging agreem ent.7 Before the end of the nine­ teen th century (and for m any countries, into the tw entieth), non-national intellectual property was seldom recognised. Indeed, from Venice onwards the legal recognition o f IPRs was dependent on national registration or national production. Fam ously the U S publishing industry thrived in the n in eteen th century publishing “unauthorised” work of E uropean authors, b u t perhaps less often noted, U S industrialisation proceeded apace with technologies th at were patented abroad, b u t freely available (essentially through “piracy”) to entrepreneurs in America. T h e character of national laws (only recognising national invention or creation) supported this appropriation of foreign knowledge and inform a­ tion w hen the U nited States, and before that Britain, were “developing countries” . Since the fifteenth century the restrictions on who was recog­ nised as an owner o f IPRs represented a strategic development policy to encourage the im portation of innovation by dom estic companies (and before th em artisans). T h u s it is ironic that, having reached the heights of econom ic developm ent, the governm ents o f the m ost developed countries now argue in m ultilateral negotiations that the very protection they ignored in th eir years o f speedy expansion will actually aid and support the eco­ nom ic developm ent of other countries. T heir claims regarding the benefits of IP R protection fail to recall that the social bargain they wish to reproduce was constructed through national political m ediation of interest, and not the im position of a “one-size-fits-all” model. B ut alongside this historical anom aly there is a m uch m ore serious practical problem. T h ere is no need to go into the details of the dispute betw een various L D C s and the m ultinational corporations at the centre of the pharm aceuti­ cal industry, as it is certain that readers are familiar with the issue as it relates to the cocktail o f drugs which can keep H IV + patients alive almost indefinitely.8 As the pharm aceutical com panies argue (quite correctly), the AID S pandem ic in sub-Saharan Africa will not be halted merely by the abrogation o f drug patents, b u t nevertheless it raises an im portant and problem atic aspect of the globalised regime for IPRs. As noted above, at the centre o f the politics o f IPR s is the question of balancing private rights to rew ard and public benefits of “freely” available knowledge. W hatever the condition o f m any African health care systems, one clear aspect of patent protection for AID S drugs is that few sub-Saharan sufferers can afford the drugs th at could keep them alive (and relatively healthy). In national juris­ dictions w here a social need (such as the support of life) is in tension with price m echanism s, governm ents can and have taken action in health, m ost often through a form o f welfare provisions. In extreme circum stances a recourse to the com pulsory licensing of patented drugs has been justified on the basis o f pressing social need. If ever circum stances required such action, the AIDS pandem ic m ust surely be it. Indeed, as m any com m entators noted, when the U S citizenry was suddenly threatened by anthrax, their governm ent wasted little tim e ensuring th at the necessary drugs were available. T h e threat of com pulsory licensing to deal w ith a health crisis where the dead could be counted on the fingers o f one hand was used to w rest significant reductions in price.9 H owever, this logic is largely missing from the same governm ent’s policy on A ID S m edicines in sub-Saharan Africa, and despite recent large price cuts (prom pted by public pressure) the drugs rem ain beyond the reach of all but a small elite. We are told th at generic substitutes (m anufactured mainly in India) are still an unacceptable violation of the rights of U S com panies, likely to h alt their innovative response to the illness. This position stems from the disjuncture betw een the narratives of justification and the (nascent global) society in which they are being deployed. W hile at a national level a political bargain may have been struck betw een private rewards and public benefits, in the global realm where the availability of drugs and the social groups who need them are sorely m ism atched, the political debates have been neutered. W here this political debate has occurred, m ost sig­ nificantly in the negotiations behind the D oha declaration on public health, L D C s encountered significant resistance from the U nited States in even gaining acquiescence to a declaration that merely restated the content of

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10 For an extended discussion of the need for differential pricing through compulsory licensing, see Arvind Subramanian, “The AIDS Crisis, Differential Pricing of Drugs, and the TRIPs Agreement” (2001) 4/3 Journal of World Intellectual Property 323-336, and for a Canadian proposal for side-stepping the import issue see Angela Thornton-Millard, “Intellectual Property Rights and the AIDS Epidemic in SubSaharan Africa” (2001) 11/2 Transnational Law and Contemporary Problems 517-540.

A rts 8 and 31 o f TR IPs. However, as the declaration only concerns com pul­ sory licensing for national production, the problem s of im porting A ID Srelated generics rem ain.10 We are currently in a transitory period, w here the global governance regim e for IPRs has been established b ut the political com m unity on which the justification of intellectual property itself depends is far from globalised. W hile m echanism s exist at the national level to ameliorate problem s that the balance of private rew ards and public benefits might produce, few m echanism s exist at the global level. T here is little way for L D C s m ean­ ingfully to factor in the national social costs of strong IPR laws. W hereas in national political debates those groups shouldering the im m ediate social costs may have a num ber of political avenues through which counter­ m easures may be mobilised, w ith the exception of breaking international agreem ents there is m uch less scope for such mediation at the global level. T h e horse-trading w hich produced agreem ent on TR IPs included issues of m arket-opening by developed states and the agreem ent to revisit issues around international agricultural trade. M any L D C s in 1995 took the best deal they could get, on the basis th a t such m arket opening w ould be of a clear benefit to their own farm ers desperately needing to reach developed m arkets for the cash crops they had been encouraged to produce by devel­ opm ent agencies and international financial institutions. However, the last seven years have seen on one side the forward m arch of T R IP s producing effects largely unexpected by L D C s, b u t on the other relatively little move­ m en t on the concessions that they were offered to get the agreem ent rat­ ified. T his shortfall has prom pted considerable disquiet at the possible fu rth er strengthening o f the IPRs regime in this round of multilateral trade negotiations. T h e w orld is n o t sufficiently globalised (whatever com m entators cele­ brating the “borderless w orld” claim) for any political and legal settlem ent to closely follow previous national bargains; the justifications that have previously been used to u n derpin IPRs do n o t have sufficient purchase on the c u rren t global situation. Given the vast inequalities evident in the world, the im pact o f these inequalities m ust be recognised and the social costs that are required for the continued support for private rewards highlighted. T h e cu rren t settlem ent for IPRs m ay work well for the developed countries, b u t for L D C s the central bargain at the centre of IPR s makes little sense. T h e private rights o f IP R “ow ners” in the richer states are being purchased at too great a social cost in the developing world. Before T R IP s this was essentially recognised in the de facto acceptance of w idespread “piracy” outside the developed countries. This was by no m eans a perfect solution, and a re tu rn to the essentially ungoverned character of the pre-T R IPs world o f intellectual property is im probable. However, the current settlem ent does n o t com m and significant support outside the developed world. T his, then, returns us to the political realm. T here are two broad direc­ tions negotiations regarding T R IP s could move in response to this problem . T h e n eed to offer varying private-public bargains in different parts of the world, essentially differential protection, could be recognised. O r the nego­ tiations could establish a m echanism that allows social costs (even if these costs are n o t evident across all signatories to the agreem ent) to play a larger role in th e protection of IPR s at the global level. T h e move to differential protection (although widely supported in L D C s and by various n on­ governm ental organisations) requires a step back from the harm onisation o f intellectual property law th a t is at the h eart of the TR IPs Agreem ent. O ne way o f achieving this w ould be to lengthen the transition period for develop­ ing co untry m em bers of the W TO . A clear threshold when full accession to T R IP s w ould be required, and clear param eters set for how non-protected IPRs m ight be used in the developing world. M ost seriously the problem of parallel im ports (which has moved to the centre of the argum ents p u t forward by the pharm aceutical companies) would need to be addressed. However, the move to inner and outer T R IP s compliance m ight prove beyond the realms of political possibility w ith the U S G overnm ent’s deter­ m ination to uphold T R IP s’ universality.

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W ith the “success” o f the D oha declaration negotiations, the notion of social costs has moved up the agenda of global IP R politics. T here may be a real possibility o f establishing u nder the D oha declaration’s logic a wider range o f circum stances in w hich T R IP s m ight allow compulsory licensing. T h u s lim itations on monopoly, a central elem ent of early IPRs, could be reinstated at the global level. R ather than assum e that private rights should be recognised except in extrem e circum stances of unacceptable social costs (the A ID S pandem ic is the paradigm atic case), the balance of proof could be shifted to require the dem onstration of real national social benefits available from the protection of rich countries’ IPRs in poor countries. To insist on a wholesale reorientation of the protection of IPRs in this m anner w ould likely hit significant political resistance; however, it is not beyond the realm o f possibility th at the provisions of Arts 8 and 31 could be expanded beyond th e current practical lim itation to health emergencies. Again, this m ight n o t be simple n o r easy, b u t could transform the ability of some L D C s to take advantage of new products and technologies. Equally in the debates over the protection (and theft) of traditional knowledge, some limits on the reach o f IPRs m ight well prove appropriate for L D C s, moving from IP R ’s focus on the individual to some notion of com m unity knowledge in certain circum stances. T h e debates briefly alluded to above are n o t lim ited to the global sphere; at the level o f T R IP s-com pliant national legislation regarding IPRs, even developed countries may need to revisit the private-public bargain in areas where new inform ation and com m unication technologies have shifted the advantages and costs th a t ow nership of inform ation and knowledge brings in its wake. W hile space precludes a treatm ent of the parallel issues in the developed countries, m uch of the current legal discussion misses im portant global political issues related to the general balance between the private rights to rew ard and the construction or fostering of a public realm of “free” knowledge (sometimes referred to as the knowledge commons). W hile legal scholars have m uch to offer these debates they also need to think about the global context o f these issues and address the problem s which stem from the m ism atch of (national) justifications and (global) society. C H R IS T O P H E R MAY University of the West of England, Bristol

[2003] E.I.P.R. ISSUE 1 © SWEET & MAXWELL LIM ITED [AND CONTRIBUTORS]

[3] The Economics of Intellectual Property Rights and the GATT: A View From the South Carlos Alberto Primo B raga* T able of C o n t e n t s

I. II.

I n t r o d u c t i o n ................................................................................ I n t e l l e c t u a l P r o p e r ty R ig h ts a n d t h e G ATT

243 ..

245

III.

T h e E c o n o m ic s o f I n t e l l e c t u a l P r o p e r t y R i g h t s

IV.

251 The Case Against Intellectual Property Rights Pro­ tection ................................................................................. 258 B. The Case fo r Intellectual Property Rights Protec­ tion ...................................................................................... 260 C. The Political Economy o f Intellectual Property Rights Protection...................................................... 261 C o n c l u s i o n ..................................................................................... 264 P r o t e c t i o n .....................................................................................

A.

I.

I n t r o d u c t io n

Knowledge is a very elusive commodity.1 But the ability to create new knowledge and to use it efficiently in the productive process is a funda-

* Assistant Professor of Economics, University of Sao Paulo; Senior Researcher, Fundacao Instituto de Pesquisas Economicas, Sao Paulo, Brazil. This Article was writ­ ten while the author was a Visiting Professor at the School of Advanced International Studies/The Johns Hopkins University with support from the program CAPES/Fulbright. The author gratefully acknowledges comments by Alice T. Zalik, Alison J. Sondhaus, John H. Welch, Robert E. Hudec, and Robert M. Sherwood. The views expressed here are the sole responsibility of the author. 1. For the sake of consistency, this Article will employ the following arbitrary defini­ tions: a) Knowledge is a stock concept. When it flows in or out its point of storage (e.g., the mind, a book, software, a computer memory), it becomes information; b) Science is the “body of verifiable knowledge and an associated conceptual framework that attempts to structure the observable features of the natural world and to predict the outcome of observations and experiments yet to be conducted.” J. G r a n g e r , T e c h n o l o g y a n d I n t e r n a t i o n a l R e l a t i o n s 9 (1979); c) Technology is knowledge employed in the pro­

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mental requirement for economic development.2 Knowledge products (or products of the mind) resemble a pure public good to the extent that their benefits are usually characterized by incomplete appropriability. Such a characteristic provides the basic economic rationale for govern­ ment intervention in the production of knowledge.3 Granting intellectual property rights via legal codes to the producers of new knowledge is a common response to this problem. Although most societies recognize the importance of intellectual prop­ erty protection, there are significant differences in the way in which na­ tions approach this issue. Differences among national intellectual prop­ erty systems are tantamount to nontariff barriers (NTBs) to trade insofar as they may affect trade in knowledge-intensive products.4 Yet, these differences are not cognizable under G ATT despite “G A T T ’s pro­ scription of NT B s.”5 In the 1980s, industrialized countries began to change their trade laws, classifying “defective” intellectual property sys­ tems as a type of unfair trade practice. Meanwhile, under the leadership of the United States, the First World began to press for the extension of GATT disciplines to trade-related aspects of intellectual property rights (TRIPs). As a consequence, TRIPs became one of the formal negotiat­ ing groups in the Uruguay Round of multilateral trade negotiations. This Article explores the attitude of less developed countries (LDCs) with respect to the debate on TRIPs at the Uruguay Round.6 Part II

duction of goods and services for the satisfaction of human needs. For further details on these concepts, see E c o n o m i c C o u n c i l o f C a n a d a , R e p o r t o n I n t e l l e c t u a l a n d I n d u s t r i a l P r o p e r t y , 1 -3 0 (1 9 7 1 ); P. D a s g u p t a & P. S t o n e m a n , E c o n o m i c P o l ­ i c y a n d T e c h n o l o g i c a l P e r f o r m a n c e (1 9 8 7 ); G . Y a n k e y , I n t e r n a t i o n a l P a t ­ e n ts a n d T e c h n o lo g y T r a n sfe r s t o 2.

L e s s D e v e l o p e d C o u n t r i e s (1 9 8 7 ).

See generally Solow, Technical Change and the Aggregate Production Function,

3 9 R e v . E c o n . & S t a t . 15, 1 2 -2 0 (1 9 5 7 ); E. D e n i s o n , A c c o u n t i n g f o r S l o w e r E c o n o m i c G r o w t h (1 9 7 9 ); Mansfield, Intellectual Property Rights, Technological Change, and Economic Growth, in I n t e l l e c t u a l P r o p e r t y R i g h t s a n d C a p i t a l F o r m a t i o n in t h e N e x t D e c a d e (C . Walker & M. Bloomfield eds. 1 9 8 8 ). 3. See generally Arrow, Economic Welfare and the Allocation of Resources fo r In­ vention, in T h e R a t e a n d D i r e c t i o n o f I n v e n t i v e A c t i v i t y 6 0 9 (R . Nelson ed. 1 9 6 2 ).

4. The expressions “intellectual property system” or “intellectual property regime” will be used here to summarize the whole array of intellectual property laws (patents, copyright and neighboring rights, trademarks, geographic denominations and designs, chip topography protection, trade secret rights) as well as enforcement practices concern­ ing these laws. 5. Stern, Intellectual Property, in T h e U r u g u a y R o u n d : A H a n d b o o k f o r t h e M u l t i l a t e r a l T r a d e N e g o t i a t i o n s 2 0 2 (J . Finger & A. Olechowski eds. 1 9 8 9 ) [hereinafter H a n d b o o k ]. 6. In many instances in this Article, the LDCs will be referred to as if they had a

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addresses the evolution of the debate at the G ATT level. Part III presents the economics of intellectual property rights protection from the point of view of LDCs. Finally, Part IV summarizes the main conclu­ sions and recommendations of the Article. II.

In t e l l e c t u a l P r o p e r t y R ig h t s

and th e

GATT

By the end of the Tokyo Round (1979), both developed and develop­ ing contracting parties of the GATT shared a sense of frustration. D e­ spite important results in the Tokyo Round— particularly in extending some discipline to the use of NT B s—there was a widespread feeling that the multilateral trade system was not working well.7 For the LDCs, the shortcomings of the “special and differential treatment approach” (S&D) coupled with G ATT’s deficient coverage of their main trade interests were the basic reasons for frustration. For the industrialized countries, frustration reflected the concern with free-rider behavior by LDCs and the recognition of the growing importance of trade issues that were not dealt with properly in the G ATT—such as services, intellectual property rights, trade-related investment measures, and high-technology trade. The economic crisis of the early 1980s put additional pressure on the system because it accelerated the adoption of protectionist measures throughout the world. Against this background, the United States called a GATT Ministerial Meeting in 1982 to serve as a launch p a d for a new round of multilateral trade negotiations (M TN ). The agenda suggested by the United States included the so-called new themes, a more stringent discipline for agricultural export subsidies and the creation of a safeguards code. To a certain extent, the American pro­ posal tried to pave the way for a G ATT reform (that is, the inclusion of the new themes).8 By putting together the new themes with issues of

joint position with respect to intellectual property rights and the Uruguay Round. Of course, this is an oversimplification of the issue. Most of the time, what is presented as the position of the LDCs reflects positions adopted by Brazil and India, which are the most active Third World countries in these negotiations. At the same time, the positions of the industrialized countries are presented from the perspective of the “maximalist” proposals of the United States. These simplifications help to emphasize the main differ­ ences in the debate in a “North-South” framework. 7. See Martone & Primo Braga, Brazil and the Uruguay Round, Paper presented at the Conference on the Multilateral Trade Negotiations and the Developing Countries, sponsored by the Rockefeller Foundation, Washington, D.C., Institute for International Economics (1988). 8. For additional details on the antecedents of the Uruguay Round, see Bergsten & Cline, Conclusion and Policy Implications, in T r a d e P o l i c y in t h e 1 9 8 0 ’s , 7 4 7 , 7 6 0 6 3 (W. Cline ed. 1 9 8 3 ); Maciel, 0 Brasil e o GATT, 3 C o n t e x t o I n t e r n a c i o n a l 8 1 -

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interest to numerous countries (agriculture and safeguards), the Ameri­ can negotiators expected to find enough support for the launching of a new round. This agenda, however, was not well received in Geneva. The European Community, particularly France, was skeptical about the prospects of trade liberalization efforts amid world recession. The LDCs stressed that the main problems with the multilateral trade system, from their point of view, were related to the lack of compliance by industrial­ ized countries with G ATT disciplines in traditional trade areas (such as agriculture, textiles, and clothing). Accordingly, the task of recovering the G ATT’s credibility would be best served not by extending its disci­ plines to new areas, but by addressing the old problems of the system. These different views clashed in Geneva, and the Ministerial Declara­ tion of November 1982 reflected the lack of consensus in favor of a new round.9 The Declaration included general remarks about the desirability of a more efficient safeguard system, recognized the “urgent need to find lasting solutions to the problems of trade in agricultural products,” and recommended “to each contracting party with an interest in services” to develop national studies in order to form the basis for future debate.10 LDCs’ priorities were also acknowledged with reference to the impor­ tance of S&D and pledges of further trade liberalization in textiles and clothing and in tropical goods. In practical terms, however, effective measures were postponed at least until the 1984 Session of the Con­ tracting Parties. Intellectual property rights were also mentioned in the 1982 Ministe­ rial Declaration. Actually, some analysts11 consider the inclusion of a section entitled Trade in Counterfeit Goods in the Declaration as a milestone in the history of dealing with intellectual property rights within the GATT. This section stated that the Council should be instructed: to examine the question of counterfeit goods with a view to determining the appropriateness of joint action in the GATT framework on the trade aspects of commercial counterfeiting and, if such joint action is found to be appropriate, the modalities for such action, having full regard to the com-

91 (1986); R. Barros, 0 GATT de Havana a Punta del Este, R e v i s t a B r a s i l e i r a d e C o m e r c io E x t e r i o r 9 (1987). 9. Ministerial Declaration of November 1982, GATT Doc. No. 1328, B ISD /29S/9 (1983) reprinted in L a w a n d P r a c t ic e U n d e r t h e GATT 111.A.1 (K. Simmonds & B. Hill eds. 1988). 10. Id. at 5, 10, 16. 11. See, e.g., Greenwald, The Protection of Intellectual Property Rights in the GATT and the Uruguay Round: The US Viewpoint, reprinted in L a w a n d P r a c t ic e U n d e r t h e GATT, supra note 9, at IV.A.5, 1.

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petence of other international organizations.12 It is worth mentioning at this point that intellectual property consider­ ations were present in the G ATT since its origin. Article IX, for in­ stance, establishes that marks of origin (trade names, geographical indi­ cations, etc.) should not be used in such a way as to hamper international trade.13 This article also seeks to prevent misleading indi­ cations of the “true origin of a product, to the detriment of such distinc­ tive regional or geographical names of products as are protected by legis­ lation.”14 Article XX(d), in turn, places the adoption or enforcement of measures necessary to secure “the protection of patents, trade marks and copyrights, and the prevention of deceptive practices” among the socalled general exceptions in the G A T T.15 These measures, as long as they are non-discriminatory and necessary to assure compliance with GATT-compatible laws and regulations, are not bound by G ATT disci­ plines. In addition, there are references in articles XII:3(c) and XVIII: 10 to the fact that trade restrictions allowed under balance-ofpayments crises should not be inconsistent with intellectual property rights laws.16 It is also true that many instruments negotiated under G ATT aus­ pices, using GATT procedures and practices, took into account intellec­ tual property rights—such as the 1958 recommendation on marks of ori­ gin,17 the Customs Valuation Code,18 and the Standards Code negotiated during the Tokyo Round.19 The 1982 Ministerial Declaration neverthe­ less constituted a major development in the history of intellectual prop­ erty rights in the GATT system. It is important to remember that since 1978 the United States had attempted to garner support for an Anti-

12. L a w a n d P r a c t ic e U n d e r t h e GATT, supra note 9, at 1.13. 13. The General Agreement on Tariffs and Trade, 61 Stat. A3, T.I.A.S. 1700, 5161 U.N.T.S. [hereinafter GATT], art. IX, Oct. 30, 1947, GATT Doc. No. BISD IV (1969). 14. GATT, Trade in Counterfeit Goods and Other Trade-Related Aspects of Intel­ lectual Property (II), 49 GATT Focus N e w s l e t t e r 2 (1987). 15. GATT, supra note 12, art. XX(d), reprinted in L a w a n d P r a c t ic e U n d e r t h e GATT, supra note 9, at 53. 16. Id. arts. XII(3)(c), XVIII(IO), reprinted in L a w a n d P r a c t ic e U n d e r t h e GATT, supra note 9, at 31, 43-44. 17. See Trade and Customs Regulations: Marks of Origin, 1959 B a s ic I n s t r u ­ m e n t s a n d S e l e c t e d D o c u m e n t s 117; GATT, supra note 12, art. IX, reprinted in L a w a n d P r a c t ic e U n d e r t h e GATT, supra note 9, at I.A-19. 18. GATT, supra note 12, art. VII, reprinted in L a w a n d P r a c t ic e U n d e r t h e GATT, supra note 9, at I.A-15. 19. Agreement on Technical Barriers to Trade (Standards Code) (Jan. 1, 1980) reprinted in L a w a n d P r a c t ic e U n d e r t h e GATT, supra note 9, at II.C.4-99.

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Counterfeiting Code.20 This effort, which gradually gained support from the European Community, Japan, and Canada, did not reach the con­ sensus level needed for incorporation in the results of the Tokyo Round. With the Ministerial Declaration, however, the debate on intellectual property rights gained new momentum.21 In 1984, the GATT estab­ lished a Group of Experts to study trade aspects of commercial counter­ feiting.22 Although this Group could not reach a final decision, the grow­ ing concern for intellectual property-related issues paved the way for the inclusion of TRIPs in the Uruguay Round. The road to the Uruguay Round, however, was not an easy one. The idea of a new round of M T N was raised again by Japan in 1983. By 1985, the common perception that the multilateral trading system was in jeopardy fostered the search for compromises to brighten the gap be­ tween developed and developing countries. The introduction of the dual track approach, concerning negotiations on services, is a good example in this context.23 After tense negotiations, the eighth round of M T N was finally launched in September of 1986. The fact that TRIPs became a subject for negotiation in the round did not mean that an international consensus on the issue had been reached. Actually, it only meant a change in the focus of the debate which became centered on the issue of the coverage of the negotiations. The Ministerial Declaration of Punta del Este represents a masterpiece of diplomatic compromise and, consequently, allows many interpretations. In the case of TRIPs, for instance, the negotiating objective read as follows: In order to reduce the distortions and impediments to international trade, and taking into account the need to promote effective and adequate protec­ tion of intellectual property rights and to ensure that measures and proce­ dures to enforce intellectual property rights do not themselves become bar­ riers to legitimate trade, the negotiations shall aim to clarify GATT

provisions and elaborate as appropriate new rules and disciplines.

20. GATT, Trade in Counterfeit Goods and Other Trade-Related Aspects of Intel­ lectual Property (III), 50 GATT Focus N e w s l e t t e r 2 (1987). 21. In a parallel development, GATT’s dispute-settlement mechanism began to be used frequently to analyze trade-related aspects of intellectual property rights. GATT panels have addressed, for instance, the use by the United States of section 337 in allega­ tions of patent infringement, the United States copyright “Manufacturing Clause,” and the Japanese labelling practices on imported wines and alcoholic beverages. See id. at 2, 8 22. Greenwald, supra note 11, at 6. 23. For a description of the dual-track procedure presented by Brazil in June 1985, see Bhagwati, Services, in H a n d b o o k , supra note 5; Martone & Primo Braga, supra note 7.

.

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Negotiations shall aim to develop a multilateral framework of princi­ ples, rules and disciplines dealing with international trade in counterfeit goods, taking into account work already undertaken in the GATT. These negotiations shall be without prejudice to other complementary initiatives that may be taken in the World Intellectual Property Organi­ zation and elsewhere to deal with these matters.24 It is quite clear in this Declaration that a major objective of the nego­ tiations should be the drafting of an Anti-Counterfeiting Code (a m ulti­ lateral framework). In this context, one could say that the American position had finally been vindicated. Ironically, this objective was now further down on the American intellectual property rights agenda. By 1986, pushed by the interests of knowledge-intensive industries, the United States saw as its main objective the development of a set of stan­ dards for intellectual property rights protection in order to curb “piracy.”26 These standards, “presumably . . . modelled after [United States] legislation,”26 and the G A T T ’s dispute-settlement mechanism, would provide the means for enhancing intellectual property rights pro­ tection on a world-wide basis. The adoption of such standards in the GATT system would mean a radical departure from the original G ATT approach to intellectual property. As described above, the only G ATT provision which requires the protection of intellectual property rights by contracting parties is article IX(6). One could argue, however, that the Declaration provides for such a broad negotiating objective to the extent that “effective and adequate protection of intellectual property rights” is accepted as a necessary condition to reduce the distortions and impedi­ ments to international trade. From the point of view of the LDCs, such an objective was well be­ yond the legal mandate for negotiations on TRIPs at the Uruguay Round. The LDCs accepted the existence of a clear mandate to negotiate trade in counterfeit goods, but these negotiations should be restricted to the examination of the trade effects of counterfeiting without entering

24. GATT, Ministerial Declaration of Punta Del Este, o f September 20, 1986, re­ printed in L a w a n d P r a c t ic e U n d e r t h e GATT, supra note 9, at 111.A.3, 25 (em­ phasis added). 25. C. Yeutter, An Agenda fo r the New GATT Round, Address before the U.S. Chamber of Commerce, September 10, 1986, reprinted in L a w a n d P r a c t ic e U n d e r t h e GATT supra note 9, at ll l .C .l , 6-7; Gadbaw & Gwynn, Intellectual Property Rights in the New GATT Round, in I n t e l l e c t u a l P r o p e r t y R i g h t s : G l o b a l C o n ­ s e n s u s , G l o b a l C o n f l i c t ? 38 (R. Gadbaw & T. Richards eds. 1988) [hereinafter G l o b a l C o n s e n s u s ].

26.

Greenwald, supra note 11, at 9.

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the discussion of “what constitutes counterfeiting.”27 Another facet of the LDCs5 position was the resistance to any attempt to transform the nego­ tiations into “an exercise to set standards of protection of intellectual property rights or to attempt to raise the levels of such protection under existing multilateral agreements through the strengthening of enforce­ ment procedures. . . .5523 LDCs also emphasized their strong support for the existing international agreements administered by the World Intel­ lectual Property Organization (WIPO)29—that is, the Paris Convention (patents, utility models, designs and trademarks, trade names, and appel­ lation of origin),30 the Berne Convention (copyrights),31 the Madrid and Lisbon Agreements (repression of false or deceptive indications of source on goods, and the protection and registration of appellations of ori­ gin)32—and by the United Nations Educational, Scientific and Cultural Organization (UNESCO)—namely, the Universal Copyright Conven­ tion.33 By disputing the adequacy of G ATT as a forum for a broad de­ bate on intellectual property rights, the LDCs raised jurisdictional argu­ ments against the American agenda. The other major players from the First World, the European Com­ munity, and Japan, adopted a less radical approach in the negotiations compared to the United States.34 Both Japan and the European Commu­ nity supported the goal of better intellectual property rights protection around the world. Yet, they did not share the United States enthusiasm

27. Brazil-MRE, As Negociacoes da Rodada Uruguai: Os Novos Temas, Paper presented at the seminar GATT e a Rodada Uruguai, Sao Paulo, Ministerio, das Relacoes Exteriores, Doc. No. FIESP/CIESP, FA DVSP, 18 (1988). 28. Statement of Brazil to the Negotiating Group on Trade-Related Aspects of Intel­ lectual Property Rights, Including Trade in Counterfeit Goods, (March 25, 1987) at 1; Gadbaw & Gwynn, supra note 25, at 41-2 n.6. 29. Convention Establishing the World Intellectual Property Organization, July 19, 1967, 21 U.S.T. 1749, T.I.A.S. No. 6932, 828 U.N.T.S. 3. 30. Paris Convention for Protection of Industrial Property of March 20, 1883, 13 U.S.T. 1, T.I.A.S. No. 4931, as revised at Stockholm July 14, 1967, 21 U.S.T. 1508, T.I.A.S. No. 6903, 828 U.N.T.S. 305. 31. Berne Convention for the Protection of Literary and Artistic Works, Sept. 1886, 828 U.N.T.S. 221 (implemented by the United States in H.R. Doc. No. 609 100th Cong., 2nd Sess. (1988)). 32. Madrid, Agreement Concerning the International Registration of Marks of April 14, 1981, as revised at Stockholm on July 14, 1967, 828 U.N.T.S. 389, 201 W.I.P.O. 1983; Lisbon Agreement for the Protection of Appellations of Origin and their Interna­ tional Registration of October 31, 1958, as revised at Stockholm on July 14, 1967 and Regulation of October 5, 1976, 264 W.I.P.O. 1976. 33. Sept. 6, 1952, 6 U.S.T. 2731, T.I.A.S. No. 3324, 216 U.N.T.S. 132. 34. P. Carl, Intellectual Property Rights in the Uruguay Round: The EC Viewpoint, in L a w a n d P r a c t ic e U n d e r t h e GATT, supra note 9, at IV A.6, 19.

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concerning the use of GATT to set international standards for intellec­ tual property systems. Among their major concerns was the use of na­ tional intellectual property laws as “barriers to legitimate trade,” as in the case of section 337.36 There were also significant differences in terms of negotiating tactics. The European Community, for instance, suggested that negotiations should first address the issue of repression of counter­ feiting and piracy. Only after sufficient progress in this area has been achieved should the negotiations focus on “weaknesses in the availability and scope of basic rights.”36 Given these conflicting agendas, the lack of substantive progress in the negotiations on TRIPs at the Uruguay Round is not surprising.37 The next section summarizes the main arguments for and against intellectual property rights protection, emphasizing the economic implications of en­ hanced intellectual property rights for LDCs. III.

T

he

E c o n o m ic s

of

In t e l l e c t u a l P r o p e r t y R ig h t s

P r o t e c t io n

The debate on intellectual property rights at the G ATT level has thus far been dominated by the following issues: the question of jurisdiction (the WIPO v. GATT debate), the interpretation of the negotiating man­ date of the Punta del Este Declaration, and procedural questions (the precedence of the anti-counterfeiting code negotiation and the pace of negotiations on TRIPs vis-a-vis other negotiating groups in the Uruguay Round).38 Some believe that the debate has focused on form rather than substance, and hence has failed to generate results. If one tries, however,

35. 19 U.S.C. § 1337, 1337a, (1982 & Supp. V 1987); See Barshefsky & Zucker, Amendments to the Antidumping Countervailing Duty Laws Under the Omnibus Trade and Competitiveness Act of 1988, 13 N.C.J. I n t ’l L. & C o m . R e g . 251, 251 n.2 (1988). 36. Greenwald, supra note 11, at 12 (quoting the EC Commission). 37. The Ministerial Meeting at Montreal in December 1988 confirmed the complex­ ity of the negotiations on intellectual property rights at the GATT level. TRIPs were among the items (the others being Agriculture, Safeguards, Textiles, and Clothing) that required further consultations, placing on hold all the results achieved in the other areas of negotiation. See GATT, Trade Negotiations Committee Meeting at Ministerial Level, (1988) GATT Doc. No. M TN, T N C /7 (MIN). 38. The issue of the relative pace of the negotiations on TRIPs, not addressed above, has been another point of contention. The United States pressed for an early commitment to negotiate a comprehensive GATT agreement that would establish substantive stan­ dards for protection on intellectual property rights. Yeutter, supra note 25, at 6. LDCs opposed the idea that TRIPs should “move forward more rapidly than any other area of the GATT negotiations.” Richards, B razil, in G l o b a l C o n s e n s u s , supra note 25, at 184.

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to identify substantive issues that are at the core of the debate, changing the focus would not help bring the negotiating parties any closer to con­ sensus. There are major conflicts in the way different nations approach the issue of intellectual property rights protection lurking behind proce­ dural discussions. At the legal level,39 the conflict reflects a century old debate on the territoriality of intellectual property rights laws and its implications for international trade. Another legal dimension of the debate is to what extent infringement of private property rights can be attributed to the state, justifying external reprisals. The Uruguay Round can be inter­ preted as a new attempt to promote universality in the protection of in­ tellectual property rights. Previous attempts, beginning with the Paris Convention for the Protection of Industrial Property of 1883,40 have al­ ways encountered difficulty in imposing strict international law stan­ dards in the area of intellectual property rights. The continuing debate is even more complex because of its ambitious coverage and the widespread perception that the United States is trying to translate its domestic provi­ sions into international standards. The debate also carries clear political connotations. After all, a com­ mon definition of international leadership is based on the capacity of a country to maintain a relative primacy in the generation and commer­ cialization of new technologies.41 Some analysts42 interpret the growing concern of industrialized nations with intellectual property rights as an attempt to control the diffusion of new technologies or “as a weapon in the struggle of ‘haves’ against ‘have nots’.”43 Accordingly, the ultimate goal of the industrialized countries would be to freeze the existing inter­ national division of labor by way of the control of technology transfers to the Third World. Another political dimension of the debate from the perspective of LDCs has to do with the role of foreign capital in these economies. The major beneficiaries of better intellectual property rights protection, at least in the short run, would be transnational corporations. In most Third World countries, a reform of intellectual property laws

39.

Wilner, An International Legal Framework fo r the Transfer of Technology, in 53 (J. Mc­ Intyre & D. Papp eds. 1986); Meessen, Intellectual Property Rights in International Trade, 21(1) J. W o r l d T r a d e L., 67 (1987). 40. Paris Convention, supra note 30. 41. Rostow, Is There Need fo r Economic Leadership? Japanese or U.S.?, 75(2) A m . E c o n . R e v ., 285 (1985). 42. Barbosa, Por Que Somos ‘Piratas’?, Revista Brasileira de Comecio Exterior (1988). 43. Stern, supra note 5, at 203. T h e P o l it ic a l E c o n o m y o f I n t e r n a t io n a l T e c h n o l o g y T r a n s f e r ,

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perceived to favor foreign capital would be highly controversial. There are also significant philosophical differences along the NorthSouth divide with respect to intellectual property rights. In the First World, intellectual property protection is usually presented “as a funda­ mental right comparable to rights to physical property.5’44 The criticism of countries with “defective55 intellectual property systems is often designed to stress the high moral ground from which these attacks are made. The thesis that natural law provides a firm basis to the notion of inherent rights in products of the mind, however, is at best debatable. One can make an eloquent case for the importance “to conceive of ideas as property, and of property not solely as material but also as spiri­ tual.5545 Yet, the history of the evolution of national patent systems sug­ gests that “economic expediency55 has usually dominated legal and moral considerations.46 As a consequence, any attempt to present a country’s intellectual property system as a model of “enlightened55 virtues is bound to face a great deal fo skepticism in the T hird World. Moreover, in con­ trast with developed economies, LDCs tend to assign a higher weight to “social” interests (often loosely defined) than to private interests. Intel­ lectual property systems always entail a compromise between private and social interests. Arguments against intellectual property rights protection for pharmaceutical and food products, for example, are often based on social considerations, such as the objective of avoiding price increases in health and nutrition.47 At the core of the conflict between industrialized countries and LDCs, however, are some basic economic issues. A common belief was that law­ yers took intellectual property rights protection too seriously while econ­ omists took the issue too lightly. Economists’ attitudes towards intellec­ tual property rights, however, have been changing significantly over the

44. Gadbaw & Richards, in G l o b a l C o n s e n s u s , supra note 25, at 2 (Introduction). 45. Novak, Built Wiser Than They Knew, Lecture in Honor of the Two-Hundreth Anniversary of the U.S. Constitution, delivered at the University of Santa Clara, at 4 (1987). 46. Anderfelt argues that the notion of inherent rights is hardly compatible with “systems in which examination (as to novelty, inventiveness, etc.) precedes the patent grant” as occurs in most countries. U. Anderfelt, International Patent-Legislation and Developing Countries, Doctoral Dissertation, n. 204, Geneve: Martinus Nijhoff-Den Haag atg 19 (1971). 47. A good example of this position can be found in the words of Indira Gandhi at the World Health Assembly in May 1982: “The idea of a better-ordered world is one in which medical discoveries will be free of patents and there will be no profiteering from life and death.” Gadbaw & Kenny, India, in G l o b a l C o n s e n s u s , supra note 25, at 86.

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last decade. The growing share of knowledge-intensive products in inter­ national trade, the economic impact of new copying technologies, the possibilities of world-wide integration brought by communication net­ works, and the increase in international technological rivalry have mag­ nified the economic significance of “piracy.” At the same time new tech­ nologies (computer software, semiconductor chip design, etc.) are challenging existing patterns of intellectual property rights protection. Consequently, there is growing interest in the economics of intellectual property rights. Nevertheless, the analysis of the costs and benefits of more sound intellectual property systems for LDCs is still in its infancy.48 The conventional reasons for intellectual property rights protec­ tion—to promote investments in research and development (R&D) and technological innovation, and to encourage the disclosure of new knowl­ edge—are not enough to make an economic case for the adoption of in­ tellectual property laws. First, one can argue that there are other institu­ tional arrangements which could in theory generate the same results of the concession of legal rights in new knowledge. As Dasgupta and Stoneman point out, the theory of public goods suggests at least two other solutions for the problem of efficient production and allocation of knowledge: (1) the direct production of knowledge by the government which would “allow free use of it, and finance the expenditure by the imposition of lump-sum taxes”; or (2) the encouragement of “private production of knowledge by the imposition of (differential) subsidies for their production and the levying of lump-sum taxes to finance these sub­ sidies.”49 This is not the place to discuss these alternative institutional arrangements, particularly because the debate at the GATT level is not concerned with this type of discussion. My position is that, not to men­ tion practical considerations, historical hindsight and public choice the­ ory (in essence the criticism of the idea that public officials in performing their tasks would be basically concerned with the well-being of the na­ tion) provide strong support for the superiority of the proprietary approach. It is, however, important to recognize that the economic rationale for intellectual property rights protection goes beyond the issue of underpro­ duction of knowledge in the absence of government intervention. It re-

48.

See MacLaughlin, Richards & Kenny, The Economic Significance of Piracy, in supra note 25, at 89; Sherwood, The Benefits Developing Coun­ tries Gain from Safeguarding Intellectual Property, Paper prepared for the Intellectual Property Committee, Washington, D.C. (1988). 49. D a s g u p t a & S t o n e m a n , supra note 1, at 3. G lo bal C o n s e n s u s ,

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quires that the benefits associated with increased production of knowl­ edge be greater than the costs due to its underutilization, a possible by­ product of monopolization. The literature tends to support the proposi­ tion that a net positive welfare effect results from intellectual property rights protection.50 This conclusion, nonetheless, becomes disputable when the focus of analysis changes from a closed economy (or from a global perspective) to an open economy. Berkowitz and Kotowitz, for example, point out that a national government “is bound to value the welfare of its own citizens or residents more heavily than that of foreign­ ers.”51 In this context, they were able to derive results showing that for an LDC a shorter period of patent protection (vis-a-vis an industrialized country) may be optimal in terms of national welfare.52 Lyons adopts a more provocative position based on these results, stating that “[t]here ap­ pears to be little reason for small countries to adopt a patent system.”53 The implications of these results for the North-South debate on intel­ lectual property rights, however, have to be qualified. First, the model is developed for a small country “in which little invention takes place and/ or in which invention markets are competitive.”54 Some of the newly industrialized countries (NICs) of the Third World no longer fit this description. Second, the model assumes away the possibility of retaliation against defective intellectual property systems. As recent United States actions against Korea, Taiwan, and Brazil, as well as European Com­ munity measures against Indonesia suggest, the possibility of intellectual property-related trade retaliations has to be taken into account for an adequate evaluation of an intellectual property-system reform. Finally, the model does not capture some of the benefits that sound intellectual property systems may generate.55

50.

Regarding the patent system, see W. N o r d h a u s , I n v e n t i o n , G r o w t h a n d T h e o r e t ic a l T r e a t m e n t o f T e c h n o l o g ic a l C h a n g e (1969); Nordhaus, The Optimal Life of A Patent: A Reply, 62 A m . E c o n . R e v . 428 (1972); Scherer, Nordhaus’ Theory of Optimal Patent Life: A Geometric Reinterpretation, 62 A m . E c o n . R e v . 422 (1972); Tandon, Optimal Patents with Compulsory Licensing, 90 J. P o l . E c o n . 470 (1982). For an analysis of the effects of increased copyrights protec­ tion, see Novos & Waldman, The Effects of Increased Copyright Protection: An Analyti­ cal Approach, 92 J. P o l . E c o n . 234 (1984). 51. Berkowitz & Kotowitz, Patent Policy inan Open Economy, 15 C a n . J. E c o n . 1, 2 (1982). 52. See id. at 3. 53. Lyons, International Trade and Technology Policy, in D a s g u p t a & S t o n e m a n , supra note 1, at 199. 54. Berkowitz & Kotowitz, supra note 51, at 3. 55. For example, the inducement of foreign investment. For a discussion regarding this point, see infra page 268. W elfare: A

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Despite these considerations it is important to recognize that for a Third World country a reform designed to increase intellectual property rights protection will tend to generate a welfare loss at its initial stages. Because LDCs are typically net importers of technology, a usual conse­ quence of a more strict regime of intellectual property laws would be an increase in royalty payments to foreigners (d$R). A related cost would be the displacement of firms devoted to “piracy” (d$P).56 From a social per­ spective, the costs of dislocation of “pirates” will only be relevant as long as foreigners benefit from the process (either by an increase in imports or by an increase in license fees paid by domestic firms to the foreign own­ ers of intellectual property rights). As MacLaughlin, Richards, and Kenny point out the “transfer of sales or royalty payments to other na­ tionals would represent merely a transfer of income from one member of society to another.”57 In this context, this income transfer would not gen­ erate a social welfare loss. Other social costs associated with the reform would be the opportunity cost of additional domestic R&D (OCdR&D) and the eventual loss of consumer surplus (dCoS) brought by higher prices that could result from the “monopolization” process.58 The issue of the opportunity cost of ad­ ditional R&D has received little attention in the debate since most ana­ lysts seem to profess an unlimited admiration for the benefits of invest­ ments in R&D. Without disputing the importance of R&D for economic development, one should also take into account its related costs. In LDCs, human-capital tends to be the scarcest factor of production. As a consequence, an increase in domestic R&D will increase the demand for this scarce resource with potential implications for other productive ac-

56. One might also argue that in addition to the displacement of piratical activities one should consider the loss in potential capital formation in these areas after the change in the intellectual property regime. For the sake of simplicity, however, we will assume that this effect is captured by the coefficient of d$P. 57. MacLaughlin, Richards & Kenny, supra note 48, at 107 n.22. 58. In most LDCs, the danger of monopolization may be secondary given the exis­ tence of price controls. In other words, increased intellectual property rights protection will not necessarily be translated into higher prices, particularly in industries—such as the pharmaceutical industry—for which price controls are usually rationalized in terms of social goals. Indeed, price controls can even play a role in explaining the evolution of intellectual property systems in the Third World. In the case of Brazil, for example, Danneman suggests that patent protection for pharmaceutical products was revoked in 1969, because national laboratories under the impact of “a rigid system of price controls . . . convinced the government that their difficulties derived from an unfair advantage for­ eign laboratories enjoyed in the Brazilian market because of their exclusive patent rights for the production of most drugs.” Danneman, Brazil Not a Pirate of Intellectual Prop­ erty (interview published in I n f o b r a z i l , 10(2), 9 (1989)).

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tivities and could even have a negative short term impact in terms of income distribution.59 Another source of potential costs, which were not considered in the model, are the local subsidiaries of transnational corpo­ rations. Local R&D by these companies can be translated into future royalty payments abroad if intellectual property rights “reside with the parent company, regardless of the location of the research.”60 The model also does not take into account the costs of establishing an effective, intel­ lectual property system (from the organization of a “cadre” of patent examiners to the costs of enforcing intellectual property rights). For a small LDC, these costs can be substantial. Turning now to the social benefits that an LDC would achieve by enforcing more strict intellectual property rights, one could list the fol­ lowing impacts: (a) cost savings associated with new technologies devel­ oped by additional R&D and by the disclosure of new knowledge (CSdR&D); (b) cost savings associated with technological transfers that could only occur under more strict intellectual property rights protection (CSdTT); and (c) additional investment fostered by the new regime of protection (dK). Items (a) and (b) can be interpreted as the main chan­ nels through which the benefits of technological change are translated into economic growth. Other potential benefits could accrue in the form of higher quality products becoming available for consumption61 and through the contribution of better national intellectual property rights protection to world technological growth. The magnitude of this contri­ bution is an open question, but it seems reasonable to assume that the impact of any individual intellectual property reform in the Third World would be marginal at best.

59. Another way to look at the opportunity cost of additional R&D, which is rele­ vant for both LDCs and industralized countries, is suggested in an unconventional note entitled The Uruguay Round Comes to the NFL (1988) by J.M. Finger. Finger presents the following arguments and questions looking at the intellectual property issue from the United States perspective: An extensive governmental system of intellectual property protection encourages industry to always develop new things that the law will protect for them. A less extensive system encourages industry to do the old things better. Would we be better off if all the ways that Japanese cars are better than their competition could be protected by law? . . . Are we, a society that chooses to set aside very little of our income for savings and investment, really advantaged by a legal system that encourages frequent changeover of what we produce, and frequent changeover of the equipment we use to produce it? Finger at 2-3. 60. Berkowitz & Katowitz, supra note 51, at 16. 61. For an interesting analysis of the benefits of trademarks for consumers, see Mc­ Laughlin, Richards & Kenny, supra note 48, at 103-04.

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Assuming that these costs and benefits can be expressed in monetary terms, the analysis of an intellectual property-system reform from the point of view of an LDC would require the comparison of the following functions: (1) C = f(d$R, d$P, OCdR&D, dCoS) (2) B = g(CSdR&D, CSdTT, dK) where, C = social costs associated with a higher level of intellectual property rights protection. B = social benefits associated with a higher level of intellectual prop­ erty rights protection. A proxy for the net welfare impact (NW ) of the reform over a period of time would be estimated in the following way: (3) nw where, a t0 T

= = = =

toJ"T (B -C )e-«t dt social rate of discount. the moment of introduction of the reform. the time horizon relevant for theevaluation.

Equation (3) provides the basic framework for the analysis of an intel­ lectual property-system reform in an LDC. In the case of NW > 0, the reform should be adopted. In the case of NW < 0, the reform (from a national point of view) should not be implemented. Its simplicity, how­ ever, is misleading. The shape and the evolution over time of functions f and g, as well as the value of its parameters— such as a —provide many points of contention. Different specifications of f and g, for instance, will generate conflicting results. Besides, equation (3) does not take into ac­ count the possibility of trade retaliations against “defective” intellectual property systems. A typical LDC would most likely incur a net loss in the initial mo­ ments after the reform. In other words, it seems reasonable to assume that Ctl0 > Btl0 in the Third World for while the costs associated with the reform would be immediately felt, the benefits would take time to materialize. A necessary condition for the reform to generate a positive NW in an LDC (with the above mentioned initial conditions) is:

(4) g’ > P

where, g’ = dg/dt and P = df/dt. A.

The Case Against Intellectual Property Rights Protection

Those who oppose more strict intellectual property rights protection tend to dispute the benefits summarized by equation (2). The rationale for this attitude is partially based on the hypotheses that domestic R&D will not respond significantly to the reform, that the growth impact of any additional R&D will be marginal, or that capital formation and

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technological transfer are not very sensitive to intellectual property rights protection. Some alternative formulations of the above hypotheses are: local incompetence; a very inelastic supply of human capital; the argu­ ment that intellectual property rights protection is only one of the rele­ vant variables which explain R&D and that it can be ineffective in the absence of additional conditions (such as a larger stock of human capi­ tal); the belief that modern technology is carried forward by large enter­ prises (particularly transnational corporations); and doubts about the net contribution of foreign capital to economic development. The criticism is also directed to the cost aspects of an intellectual property-system reform. First, it is argued that the weight of additional royalties would be disruptive given the foreign-exchange constraint faced by many LDCs. Second, a high value is assigned to the perceived bene­ fits of having access to technology in the cheapest possible way. Accord­ ing to this approach, by “taxing” imported products of the mind,62 LDCs would be lowering the costs of important inputs in the productive process and they would increase consumption possibilities. In other words, it is assumed that dCoS would have a very high coefficient. The question of dislocation of “piracy,” however, does not receive much at­ tention from those who oppose more strict intellectual property laws in the Third World for tactical and legal reasons. For some countries, par­ ticularly those with problems of enforcement of intellectual property laws, it would not be wise to acknowledge the magnitude of the problem. For many LDCs the problem simply does not exist since from a legal standpoint their intellectual property systems comply with international agreements, such as the Paris Convention (which allows each country to choose its own patent conditions as long as there is no discrimination against non-nationals).63 As Barbosa notes, entrepreneurs in countries with “defective” intellectual property systems, from a United States per­ spective, could at best be called corsairs with all the legal licenses to operate.64 Hence, the economic case against intellectual property rights protec­ tion can be presented in three different formats, all of them based on the above considerations. The first is the radical fo rm a t, which basically de­ nies the possibility of g’ > f . According to this approach, which is often combined with political considerations, costs would not only continue to exceed benefits over time, but the wedge between them would tend to

62. Stern notes that “defective” intellectual property systems are equivalent to a “tax” on the returns of intellectual property. Stern, supra note 5, at 206. 63. Paris Convention, supra note 30, at art. 2. 64. Barbosa, supra note 42, at 1.

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increase. This latter effect would be caused by the growing dependence of the LDC on foreign technology. There is also the fear that modern technology, particularly robotics, would allow countries in the technolog­ ical frontier to reshape their structures of comparative advantage. Ad­ vanced countries could even recuperate competitiveness in traditional la­ bor-intensive activities—such as textiles—imposing structural adjustment costs upon LDCs. In this context, attempts to back the United States proposal with static comparative advantage arguments do not find much echo in the Third World. The second format, the pragmatic fo rm a t, accepts the possibility of g’ > f , but maintains that NW would be negative. Several reasons can be advanced to explain this result: a very high net loss at the initial stages of the reform; a high social rate of discount; or f being only marginally smaller than g \ The third format is the threshold form at, which argues that the shapes of f and g change as development (particularly in terms of human capital accumulation) evolves. In this context, LDCs would be advised to wait until the development threshold was reached (from then on g’ not only would be larger than f but NW would be positive) in order to increase their level of intellectual property rights protection. B.

The Case fo r Intellectual Property Rights Protection

The economic arguments for intellectual property rights protection in the Third World are built around the concept of self-interest. Most anal­ yses implicitly assume not only that condition (4) is obeyed but also that g5 > > f , generating NW > 0. Emphasis is usually placed on the high social rate of return from investments in new technology and the ten­ dency for under-investment in this area when intellectual property rights are not well-protected.65 The effectiveness of local R&D is heralded and the micro benefits of sound intellectual property regimes is suggested by case studies at the firm level. Some analysts, such as Sherwood,66 recog­ nize that these benefits are difficult to quantify, but they tend to stress that small firms and universities will become much more active in the process of technological innovation under enhanced intellectual property rights protection. An argument which is becoming quite influential is the thesis that presently “technology drives investment” and to the extent that technol­ ogy “is reluctant to flow where it is not protected” the lack of an ade­ quate level of protection could stunt technological transfer and foreign

65. 66.

See generally Mansfield, supra note 2. Sherwood, supra note 48.

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investment.67 The relationship between technology and investment can also be explored at the domestic level based on the proposition that en­ hanced intellectual property rights protection, particularly trade secret laws, would be an important stimulus for local capital formation. Turning to the social costs of a reform, analysts tend to downplay the importance of the displacement of pirates. This attitude reflects strong assumptions about labor mobility in the Third World coupled with the belief that growth in sectors benefited by the reform would rapidly ab­ sorb displaced workers. The potential loss of consumer surplus (dCoS) is also downplayed because these benefits would be achieved at the high cost of fostering imitation and copying instead of invention and creativity. Hence, the case for protection is built mainly around the potential benefits of sound intellectual property regimes for LDCs. The micro­ foundations of these arguments are quite appealing but a great deal of research is still needed to support their claims. The research agenda will have to address issues like the R&D response of small firms and the reaction of individuals in the Third World to enhanced intellectual prop­ erty rights protection, the role of transnational corporations, the effec­ tiveness of local R&D (the issue of domestic competence), the importance of protection for technology transfers, the threshold argument, and the impact of the injection of new technology in terms of economic growth for LDCs. A parallel effort will have to be developed in order to esti­ mate the magnitudes of d$R and d$P. There are some analyses on the economic impact of piracy from an industrialized country perspective.68 These studies focus on revenue loss estimates for United States industries and are limited in terms of their coverage of industries and countries. The same methodology, however, can be adapted to estimate d$P. In sum, a much higher degree of knowledge on the characteristics of NW in LDCs will be necessary if economic calculus is expected to play a more influential role in the negotiations. The benefits of this research agenda should not, however, be oversold in terms of their impact on trade negotiations. A look at the political economy of intellectual prop­ erty reforms illustrates this point. C.

The Political Economy o f Intellectual Property Rights Protection

In this section I assume that additional research will confirm that con­ dition (4) holds in most LDCs (or at least in the NICs). Such a result,

67. 68.

Sherwood, Investment: Driven by Technology, 1. See, e.g., U.S. I n t e r n a t i o n a l T r a d e C o m m i s s i o n , F o r e i g n P r o t e c t i o n o f I n t e l l e c t u a l P r o p e r t y R i g h t s a n d t h e E f f e c t o n U.S. I n d u s t r y a n d T r a d e , P u b . N o . 2065 (1988); MacLaughlin, Richards & Kenny, supra note 48.

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however, would not mean the end to resistance to more strict intellectual property rights protection in the Third World. As previously noted, ine­ quality (4) is a necessary but not a sufficient condition to ensure that NW > 0. Im patient societies, that is countries with very high social rates of discount, could still find out that a reform would generate a net economic loss. Politicians and policy-makers in the Third World tend to adopt very high a ’s in response to the instability of their environments. Consequently, perceptions about the proper range of values for the rate of discount can be quite different from the ones that prevail in industri­ alized countries. Another possibility, perhaps even more interesting from a political economy perspective, would be the situation in which the government would not be able (or willing) to reform the country’s intellectual prop­ erty system despite recognizing that NW is positive. The rationale for this attitude is analogous to one that usually hinders trade liberalization attempts: while the benefits would evolve gradually and would affect the society as a whole (mainly through higher rates of economic growth), the costs would be immediate and focused on very specific sectors (those dedicated to “piracy”). Those who have a vested interest in avoiding the reform would tend to lobby forcefully against enhanced intellectual prop­ erty rights protection. The potential beneficiaries, in turn, would tend to be much less organized and prone to adopt a free-rider attitude in the policy debate. As a result, the political support for such a reform may not be sufficiently strong to override the opposition. Hence, it is not enough to point out that an LDC would need only a small increase in its rate of economic growth in order to offset the “short term benefits of piracy.”69 The allocation and concentration of costs and benefits of the reform is also a major factor in the process. Up to this point, all economic evaluations assume a small country con­ text. In other words, the country’s choice in terms of intellectual prop­ erty regime would induce neither antagonism nor cooperation from its trade partners. As suggested above, this hypothesis has been outpaced (at least in the case of the NICs) by the reality of industrialized countries’ unilateral actions against “defective” intellectual property systems. The possibility of retaliation has to be taken into account in terms of its im­ pact on NW and on the relevant political equation. Expected export revenue losses (ERL) should be included among the variables considered in the benefit function (g).70 The expected value of NW would then be

69. MacLaughlin, Richards & Kenny, supra note 48, at 107. 70. As in the case of d$R, the social cost of ERL should be estimated using the shadow-price of foreign currency relevant for the economy.

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estimated as a weighted average of NW with and without retaliation, the weights being the perceived probabilities of retaliation and its comple­ ment. In the case of an LDC with a high ERL, as the probability of retaliation approaches one, the expected value of NW could change from a negative to a positive sign. In this context, from the perspective of an industrialized country, the appeal of aggressive reciprocity with respect to intellectual property rights protection is high. The political economy of a reform induced by trade retaliation, however, is quite complex. As discussed above, the fact that NW becomes positive does not guar­ antee the reform, especially in a situation where economic calculus is influenced by external pressure. No government likes to be perceived as submitting to foreign threats. Once retaliation is implemented, domestic support for stronger intellectual property rights protection may be nega­ tively affected. Trade retaliations are always blunt weapons. The eco­ nomic groups affected by this process most likely will not be the ones that profit from “piracy.” The burden of retaliation will tend to fall upon export-oriented sectors that are typically more receptive to argu­ ments in favor of intellectual property rights protection. This fact may not influence the overall attitude of export sectors towards change, but certainly it will not enhance their commitment to the cause of intellectual property rights protection. A final comment worth making at this point concerns the role of bu­ reaucracies in the intellectual property systems of the Third World. These bureaucracies are quite influential in the debate and tend to adopt a critical view of First World proposals for enhanced intellectual prop­ erty rights protection. Their attitude is often influenced by ideological interpretations, such as the concept of technological imperialism.71 It is important to recognize, however, that their attitudes also reflect the pre­ dominance of a scientific ethos which has at its basis the norm of com­ plete disclosure. This “culture,” as Dasgupta poses it,72 is hostile to the view of knowledge as a private capital good that is the foundation of the so-called mature intellectual property systems of the industrialized econ­ omies. Consequently, the dialogue between technology-oriented interests and government bureaucracies, an important domestic facet of the intel-

71. Arruda, for example, suggests that by excluding the clause of fu ll disclosure in the context of patents in new technologies, industralized countries would be able to domi­ nate markets and to control competition. Arruda, O Desenvolvimiento Tecnologico Brasiliero Atravees de Internacionalizacao de Economica, Paper presented at the seminar A Nova Politica Industrial, Sao Paulo, FIPE (1988). 72. Dasgupta, The Economic Theory o f Technology Policy, in D a s g u p t a & S t o n e m a n , supra note 1, at 10.

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lectual property rights debate, tends to be a difficult one. IV.

C o n c lu s io n

This Article has summarized the economic aspects of the debate on intellectual property rights and their relevance for the Uruguay Round negotiations from a Third World perspective. The main points are the following: First, the impact of enhanced intellectual property rights protection upon Third World economies may vary significantly among different countries. There is no a priori strong evidence that these countries will necessarily benefit or lose from a reform of their intellectual property systems. Second, the political economy of intellectual property rights protection helps to explain the resistance of LDCs to reforms even when a strong case based on economic self-interest can be developed. Third, the uncertainty in terms of economic calculus, as well as legal, political and philosophical differences along the North-South divide, sug­ gest that radical proposals will not lead the way in the Uruguay Round negotiations. The importance of trade distortions generated by discrepan­ cies among national intellectual property systems, however, will probably continue to increase over time. In this context, G ATT disciplines for TRIPs are a worthwhile goal to be pursued in the long run. Gradualism is probably the best strategy to achieve this goal. The completion of an Anti-Counterfeiting Code could be a first step in the right direction. The comity approach followed by WIPO should also be encouraged. Finally, experience in this area has shown that unilateral actions designed to force LDCs to reform their intellectual property systems may easily backfire and, given the present stage of the debate, can lead to the contamination of other negotiating areas in the Uruguay Round.

Part II Trade-Linked Intellectual Property Negotiations: Lateralisms and TRIPS

[4] BATTLE OF LATERALISMS: INTELLECTUAL PROPERTY AND TRADE Robert P . Merges*

I n t r o d u c t io n

Like a body building contest, two rival camps in international trade policy flex their respective “lats”: the multilateral camp argues for continued use of general trade agreements that apply to many countries; the bilateral camp says we must form agreements with individual countries to maximize US interests.1 Although this contest has broader dimensions, I have seen it played out on the intellectual property stage, and will comment on it from that vantage point. It is difficult to begin discussing the “battle of the lateralisms” without reference to particulars: “Which multilateral institutions are we talking about?”; “With which countries are we considering making bilateral deals?” And, as I will conclude, whichever forum is appropriate in a given case, we must formalize the anecdotal evidence linking enhanced intellectual prop­ erty protection with speedier economic development. Only this way will other countries voluntarily adopt broader intellectual property protection. Returning to the particulars, there are two multilateral institutions: the World Intellectual Property Organization (WIPO) and the General Agree­ ment on Tariffs and Trade (GATT). The US has negotiated bilaterally with three country groups or countries: the Newly Industrialized Countries (NICs, see Korea and Thailand), the Less Developed Countries (LDCs, which include many African nations) and Japan. I.

M u l t il a t e r a l I n s t it u t io n s

The traditional multilateral forum is WIPO. This United Nations agency was formed to administer two important international treaties adopted in the nineteenth century: the Berne Copyright Convention and the Paris Conven­ tion (on patents). WIPO carried on its administrative functions under the treaties, and has accumulated a large staff in Geneva, a primary function of which is to spread the virtues of intellectual property to the developing world. A common complaint heard in the developed world was that WIPO had come under the sway of the LDC’s, whose ideological and economic * Professor of Law, Boston University School of Law. 1 Actually, both groups often concede the need for limited use of the other “lateralism”; the struggle centers around which approach will dominate.

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objections to increased intellectual property protection hampered WIPO’s ability to implement broader protection. As a consequence, US (and to some extent European and Japanese) indus­ try groups began agitating to put intellectual property issues on the agenda for the Uruguay Round of GATT negotiations. Though many fail to see the relevance of these issues to the central concerns of GATT2 there was a logic to their being added to the GATT agenda. The US hoped that by introduc­ ing intellectual property issues into a forum where it had a stronger bargain­ ing position vis-a-vis WIPO, it would have more leverage in the negotiations. From the perspective of those concerned with enhanced protection, an increasingly lethargic and bureaucratized WIPO forced these issues into GATT, relevant or not. The problem with this new arrangement is that intellectual property is not just another trade issue. Intellectual property rights have their own history, institutional structure and constituencies; furthermore, they may involve greater conceptual complexity than many trade issues.3 Without belaboring the point, it should be noted that the very abstractness of intellectual prop­ erty rights makes their administration complex. Consequently, carrying out a straightforward policy such as “strengthened rights” can require a myriad of interrelated adjustments to the principles, rules and doctrines that define the dimensions of an intellectual property right. This is more evident in the case of an initiative to broaden the scope of the claims in the average patent, for instance, than in an attempt to have pharmaceuticals included in the list of patent items in a country’s patent laws. But even the latter program requires the hiring of new patent examiners and the development of pharma­ ceutical-specific rules and doctrines to govern what a patent applicant must disclose in her application, which new compounds deserve a patent, and which competing compounds infringe a patented compound. Thus the content of intellectual property rights is multi-dimensional, the various rules and doctrines constituting the dimensions. Because of this, it may be difficult to adopt broad principles (such as that all inventions be “adequately” protected) that will have any effect. Thus, although the pro­ posed TRIP Code in the Uruguay Round has some specificity to it, it may in fact suffer from the crucial flaw of vagueness. Ironically, to enforce any such Code, the GATT might have to recreate 2 Dr. Jagdish Baghwati, at the conference where this paper was delivered, referred to the Trade Related Intellectual Property (TRIP) issues in the Round as “Tangentially Related Intellectual Property” issues. 3 While no one would deny the complexity of many trade issues, e.g., agricultural subsidies, it is often the assessment of impacts from rule changes that is complex. The issues themselves are not as complex as those in intellectual property. Crop subsidy programs may be complicated in some cases, but they cannot compare with the statutes and cases that answer questions such as “What is a patentable invention?”; “Is this invention new in light of everything that came before it?”; and “Is this invention a significant enough advance to warrant a patent?”

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some of WIPO’s expertise, and with if some of WIPO’s administrative appa­ ratus. Though GATT may object that “intellectual property is too impor­ tant to be left to the technicians,” GATT may merely replace WIPO’s technicians with its own. This duplication would not be total; as mentioned above, at least part of WIPO’s structure is dictated by its mandate to spread the intellectual property gospel, a goal GATT would not need to undertake. But the nature of intellectual property rights, to paraphrase, is that the essence of the right is in its details. In negotiating for enhanced rights, GATT may find itself arguing over the same old “technical” rules and doc­ trines that WIPO has been arguing over for years. At the very least, GATT advocates should be aware that when it comes to intellectual property rights, progress requires technicians as well as strategists. II. B il a t e r a l N e g o t ia t io n s The US has negotiated one-on-one with three country groups or countries: (1) the NICs, (2) the LDCs, and (3) Japan. The pitfalls and successes of each set of negotiations teach something about the effectiveness of bilateral dealmaking. Perhaps the most significant progress has been made with the NIC’s. In the past few years, broader intellectual property protection has been secured for American products in Korea, Hong Kong, Brazil and Thailand. Neither WIPO nor the GATT have come close to matching the deals struck with these countries. It is instructive to examine why not. Primarily bilateral negotiations have been successful because the US is able to place intellectual property rights in a larger trade context; we can threaten vital NIC interests such as market access in a way not possible in WIPO, which is concerned only with intellectual property rights. There is little potential for horsetrading in the WIPO context. Even when a US nego­ tiator (in WIPO) can fashion a deal, s/he must face the LDC majority, mak­ ing it most unlikely that anything substantially beneficial to the US will be passed. Typically, smaller but politically connected “pirate” industry groups dom­ inate debate over alterations of patent and copyright statutes. Bilateral negotiations urging NICs to alter their internal statutes can potentially bene­ fit from political dynamics within NICs. By proposing foreign economic policy beneficial to NICs contingent on stronger NIC protection of intellec­ tual property rights, the US can draw NIC manufacturing and trading com­ panies into the debate. This seems to have been successful in the case of Korea. Results have been less successful with respect to LDCs. Many LDCs con­ tinue to resist the expansion of patent protection. For the most part the lack of progress has not greatly exercised the US, due to the small markets most LDCs represent. The lesson is that in these countries bilateral negotiating is not worth the price. This suggests a need for multilateral forums such as

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WIPO, to allow nations to negotiate intellectual property matters without the expense of dealing with LDCs individually. Japan is a special case. Although cooperation between the US and Japa­ nese Patent Offices goes back many years, recent publicity has put many features of the Japanese patent system in public view, and hence on the agenda of trade negotiators. The Japanese patent system is often used as an example of non-tariff barriers employed by Japan. US-Japanese intellectual property negotiations are complicated by the complexities of the legal issues involved. Progress, as defined by the US side, will require more than detailed rule changes. The Japanese patent system has been said to limit the scope of exclusive rights which can be obtained, and thus encourage minimal claiming, licensing, and other “cooperative” behaviors. There is some truth to this claim. If correct, it marks a stark contrast with the more individual­ istic, pioneer-oriented US system. To that extent, the patent systems reflect deep-seated cultural differences. A cynic might then observe that negotiating patent changes between the US and Japan is like a Jesuit arguing with an atheist over the nature of God. A more pragmatic view of the negotiations would emphasize the importance to the US of obtaining concessions on the details of Japanese patent practice. US firms would benefit by Japanese concessions regarding, among other things, the breadth of claims permissible in applications, the scope of claims for infringement purposes, and limits to the opposition procedures available to challengers of an application. The three sets of negotiations just described illustrate the strengths of bilateralism. Because different countries are at different stages of develop­ ment at any one time, multilateral codes can only operate at fairly high levels of generality. The Paris Convention on patent law is an example. It establishes important principles, yet leaves much room for variation in the patent laws of member countries. The proposed GATT intellectual property code, which attempts to provide more substantive guidelines, has met with stiff opposition from some members of the Paris Convention, in part because of its specificity on certain matters (e.g., pharmaceutical patents). Individual countries believe they would feel the effects of the proposed code’s specific provisions in different ways. Those which see net economic harm resist the code. Bilateralism allows a way out of this impasse. Agreements can be tailored to specific countries, and maximum gains can be negotiated across a variety of countries. But there is a cost. Few negotiators have the expertise to carry on negoti­ ations with individual countries. There may be a surplus of trade negotia­ tors, but there is a deficit of international patent experts. Though this may argue for multilateralism, the shortfalls of the multilateral approach outlined above still appfy. There remains a place for multilateralism, but the limita­ tions of the available forums counsel caution. They may be more efficient, but that does not make them effective. Ultimately, bilateralism should be expected to predominate. The various agencies, especially the United States

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Trade Representative (USTR) and the Patent Office, will have to set priori­ ties for allocating their bilateral negotiating resources. III.

C o n v in c in g O t h e r C o u n t r ie s t o E x p a n d I n t e l l e c t u a l P r o pe r t y P r o t e c t io n

Whichever forum is chosen, US negotiators must convince their counter­ parts to adopt broader intellectual property protection. Such persuasion takes two forms: threats and promises. Section 301 provisions on intellec­ tual property are an example of the former, while other tactics used in recent negotiations are instances of the latter. Threats have been shown effective with regard to Korea. Promises usually take the form of statements that the evidence shows that stronger intellectual property protection will be a net benefit to the reluctant country’s domestic economy. In 1988 the International Trade Commission prepared an estimate of the loss to US firms from violations of intellectual property rights (TTC Study).4 The range of estimated losses was $43 billion to $61 billion per year. Though based on estimates, these figures provide the starting point for the US negotiating position. To sell broader protection to the LDCs and NICs, economists have been enlisted to estimate the impact of changes in intellectual property laws on their. A recent study approached the problem by asking how much extra annual growth it would take in various LDC/NIC economies to offset the loss of revenues from industries dependent on weak intellectual property protection (pirate industries). The estimates — stretched over a twenty-five year time horizon — ranged from .07% for India and Mexico to .2% for Argentina.5 The US would argue that much of this growth will be supplied by new investment spurred by broader intellectual property rights. Estimates of GNP growth in NICs and LDCs as a consequence of broader intellectual property protection in studies designed for advocacy should ulti­ mately be examined for biases in their assumptions. But this paper will sim­ ply ask why, if it is in these countries’ interests to change their laws, they don’t. An answer which does not undermine the “self-interest” arguments for change comes from the literature on “public choice,” or collective action theory.6 This framework would explain the reluctance to change intellectual property regimes by reference to well-entrenched interest groups. Though it might be in the best interests of a country as a whole to change, representa4 U.S. I n t ’ l T r a d e C omm ’ n ., F oreign Protection of I n tellec tu al Pr operty a n d t h e E ffect on U.S. I n du stry a n d T r ad e , ITC Pub. No. 2065 (Feb. 1988). 5 M. G a d b a w , P rotecting I n tellec tu al P roperty R ights W o r l d w id e 107 (1988). 6 See M. O lson , T h e L ogic of C o llective A ction : P u blic G oods a n d t h e T heory of G roups (1965) (a general discussion of collective action theory). R ights

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tives of the “pirate” industries may have enough political clout to block the proposed changes. As mentioned, one feature of bilateral negotiations is that they have the potential to break the stranglehold of special pirate interests on foreign legislative bodies. By placing larger interests of the nation at risk in the negotiations, these negotiations invite participation from larger economic players who can offset the political influence of the entrenched pirate groups. But another answer is possible. Some countries might be better off not broadening protection. There is no reason to assume that pirate industries are overrepresented in the legislative processes of all countries that oppose broadened rights. And there is no reason to assume that all countries would compensate with growth for the loss due to the elimination of pirate indus­ tries. There are those in the NIC/LDC community who believe so: Practically all the patents in the Third World are foreign- owned. As such, the monopoly privileges granted through patents have, among other repercussions, an international rather than simply a domestic, income distribution effect. They also have, as a result of income flows across national boundaries, balance of payments implications. . . .7Data on balance of payments supports at least part of this position.8 Key to understanding the NIC/LDC position is to recognize that to these countries, intellectual property is primarily a matter of technology transfer, rather than of encouragement of innovation.9 Their goal is to maximize technology imports given a low transfer payment budget. For countries seeking inflow of technological information, any loss of GNP growth works contrary to their goals. And they are naturally inclined to ask whether the studies on estimated GNP loss impartially account for all the costs of increased protection. US negotiators might place greater emphasis on technology transfer issues. The US should stress that stronger protection would increase imports, patent application filings, and licensing activity, all of which con­ tribute to inflow of technology. It is clear that much technological informa­ tion cannot be learned from studying foreign products and patents; personto-person communication of the details of how things work is equally impor­ tant.10 As such communication often takes place in the context of licensor7 Vaitsos, Legal Issues in the Revision o f the International Patent System, in T he of L a w : A T h ird W or ld R ead er 304, 305 (Y. Ghai, R. Luckham & F. Snyder eds., 1987). 8 U.S. D ept , of C omm ., U.S. D irect In vestm ent A b ro ad : 1982 B enchmark Survey D a t a (Dec. 1985) (U.S. ran a positive net balance of payments for intellectual property licensing royalties of $4.4 - 4.5 billion in 1982-1984). 9 S cie n ce a n d T e c h n o lo g y : L essons f o r D e v e lo p m e n t P o li c y 353 (R. Evenson & G. Ranis eds., 1990) (while adoption of current international intellectual property conventions by developing countries might be globally optimal, it is not in the best interests of particular developing countries, since the best regime for them is one that facilitates the transfer of technology). 10 See eg., Contractor, Technology Importation Policies in Developing Countries: Some Political Econ om y

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licensee relations, and since these relations are based on underlying intellec­ tual property rights, the symbiosis between know-how training and intellec­ tual property should be stressed. This information may not be fully appreciated in the LDC/NIC world, perhaps explaining why these countries perceive it in their self-interest to oppose broader protection. Nonetheless, broader protection may not make sense for all countries. A recent issue of The Economist observed: Companies in rich countries often imply that all such diputes over intel­ lectual property are a straightforward matter of piracy or theft. . . . However, the developing countries are more concerned about patent protection for technologically sophisticated goods such as drugs and chemical fertilizers. . . . In many cases, matching rich-country stan­ dards of patent protection would make such goods a lot more expensive to thrid-world buyers p]n their dealings with the third world, com­ panies regard the conventions agreed at home as self-evidently correct for everywhere else. It is not at all obvious that the developing countries are obliged, either morally of for the sake of sound economics, to meet the rich countries’ demands.11 The history of the United States bears this out. Until sometime in the nineteenth century the US was a net technology importer; some technology was obtained despite foreign intellectual property-type claims. For example, in the early days of steam engine technology, Britain forbade the export of engines, parts, and skilled personnel. The US imported all three regard­ less.12 Recognition of British rights might have yielded a net benefit to the US, but that is doubtful. The decision was made in the US that at that stage of economic development, the best policy for the US was lax enforcement of foreign intellectual property. Can the US now say that all developed coun­ tries are in such different positions that they cannot make the same decision? Implications o f Recent Theoretical and Empirical Evidence, 17 J. D ev elo pin g A reas 499, 505 (1983). But see Kirim, Reconsidering Patents and Economic Development- A Case Study o f the Turkish Pharmaceutical Industry, 13 W o rld D e v . 219, 232 (1985) (patents have no straightforward relationship to transfer of technology; they neither help nor hurt). 11 Something Old, Something New, Special Survey on World Trade, T h e E conomist , Sept. 22, 1990, at 34, 35. 12 David Jeremy, Penetrating British Barriers to Technology Transfer in the Early Industrial Period, 1790s-1840s: Some Recent Research, Paper presented at the Society for the History of Technology Annual Conference, Sacramento California, Oct. 1989, at 6-12 (prohibitory export laws in Britain were easily evaded by exporting only mental images of the technology rather than physical embodiments); see generally D. Jerem y , T r an satlan tic I n dustrial R evo lu tio n : T h e D iffusion of T e xtile T echnologies B e tw e e n Britain a n d A m e r ic a , 1790-1830s (1981) (an in-depth

study of how American firms evaded British restrictions on technology export, especially emigration of skilled workers, and thereby built the U.S. textile industry into world power).

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That is not to say that lax protection does not impede economic develop­ ment in some countries. A recording industry flourished in Hong Kong for the first time after passage of a copyright act protecting sound recordings; the Indian software industry saw a growth surge after a copyright was extended to software; and so on. A recent study of business practices in Brazil and Mexico provides fascinating details of the business losses which result from inadequate protection, especially regarding recruitment of employees with knowledge of trade secrets.13 Note that all these countries are relatively advanced, however; perhaps stronger rights make sense at some “takeoff” stage in a country’s development. C o n c l u s io n

It is difficult in practice to determine which countries would actually bene­ fit from strengthened intellectual property rights.14 But clearly, a monolithic “stronger rights” approach will not work. Unless enough country-by-country flexibility can be built into a multilateral framework, bilateralism may be the best solution. In the meantime, the US must highlight the positive domestic conse­ quences of enhanced protection in those countries which objective research shows would truly benefit from it. To shore up the US position in this respect, the US needs credible economic data on the Hong Kong and India anecdotes mentioned above. Additionally, if a free trade agreement with Mexico goes forward, intellectual property might be made a part of it. The effects of stronger protection on a NIC economy which is both familiar and easily accessible to study could then be assessed. Only be collecting persua­ sive data can the US hope to convince other NICs/LDCs to change their intellectual property regimes. Where the data shows no real improvement in the domestic economy from stronger protection, the US must live with the fact that pressure for change will most likely be unavailing.

13 See R. Sherw ood , Intellectu al P roperty a n d Economic D evelopm ent 101-58 (1989). 14 Frame, National Commitment to Intellectual Property Protection: An Empirical Investigation, 2 J. L. & T ech . 209, 217-18 (1987) (the countries with the weakest protections are those on the verge of emerging into developed world).

[5] IN D U STR Y STRATEGIES FOR INTELLECTUAL PROPERTY A N D TR A D E: THE Q UEST FO R TRIPS, A N D POST-TRIPS STRATEGIES Susan K. Sell*

I.

In t r o d u c t io n

The last two decades have ushered in a dramatic change in the global environment for the protection of intellectual property (“IP”) rights. Until recently, nations enjoyed extensive discretion in the adoption and implementation of domestic IP regulation that suited their comparative advantages in either imitation or innova­ tion. The multilateral conventions governing IP protection - the Paris Convention for the Protection of Industrial Property, and the Berne Convention for copyrights - only set minimum standards that signatories had to uphold. By contrast, the 1994 Agreement on Trade-Related Aspects of IP Protection (“TRIPS”) introduced a brand new era that extends the global reach of IP regulation based on the concepts of protection and exclusion rather than dis­ semination and competition. Unlike the earlier conventions, TRIPS does not merely circumscribe the range of acceptable poli­ cies governments may practice, but “obliges governments to take positive action to protect IP rights.”1 This paper explores the emergence of this controversial agree­ ment, focusing on its origins, its adoption and its aftermath. I ar­ gue that corporate actors, based in the United States, are largely responsible for TRIPS and I highlight their political strategies before, during, and after the adoption of TRIPS. Section II pro­ vides a brief overview of TRIPS. Section III surveys its origins in * Associate Professor, Department of Political Science, The George Washington Uni­ versity; Ph.D. (Political Science), University of California, Berkeley (1989); M.A. (Political Science), University of California, Santa Barbara (1980); B.A. (Political Science), Colorado College (1979). This paper was prepared for presentation at the conference on Intellectual

Property, World Trade, and the Global Elites: International Lawmaking in the New Millen­ nium , Benjamin N. Cardozo School of Law, Yeshiva University, New York, NY, March 7, 2001. This paper draws from my forthcoming book,

P r iv a t e P o w e r , P u b l ic L a w : T h e

G l o b a l iz a t io n o f In t e l l e c t u a l P r o p e r t y R ig h t s 1 B ernard

H oekm an

&

M ic h e l

W o r l d T r a d in g S y st e m : F r o m

GATT

(2003).

K o s t e c k i, T h e to

P o l it ic a l

WTO 156 (1995).

E conomy

of

the

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the 1970’s and early 1980’s. Section IV examines the Uruguay Round negotiations leading to the adoption of TRIPS. Section V addresses post-TRIPS political strategies of U.S.-based corporate actors in promoting IP protection. Section VI offers conclusions and highlights emerging challenges to TRIPS. The TRIPS Agreement: What’s New? TRIPS is part of the multilateral trade agreements that were made binding on members in the Final Act of the Uruguay Round of trade negotiations. Adhering to TRIPS is obligatory for all states that wish to join the World Trade Organization (“WTO”), and is part of the common institutional framework established under the WTO. The Agreement covers all IP rights, patents, trademarks, copyrights, trade secrets, including relatively new ones such as semiconductor chip protection. It incorporates the Berne Convention for copyright norms, and adds additional copyright protection for computer software, databases, and sound recordings. TRIPS adopts a patent law minimum well above the previous stan­ dards of the 1883 Paris Convention, extending both subject matter covered and term of protection. Patent rights are extended to vir­ tually all subject matter (with the exception of plants and animals other than micro-organisms), including pharmaceutical products, chemicals, pesticides, and plant varieties, and are to be granted for twenty years. States are required to provide adequate and effec­ tive enforcement mechanisms both internally and at the border and are to incorporate into their national laws civil and criminal penal­ ties for violations of IP rights. The Agreement makes the WTO’s dispute settlement mechanism available to address conflicts arising under TRIPS, and significantly provides for the possibility of cross­ retaliation for states that fail to abide by WTO’s Dispute Settle­ ment Body’s rulings. TRIPS proponents helped to devise an en­ forcement mechanism linking IP protection to trade leverage in order to compel developing countries to respond. Now infractions in IP can lead to sanctions on goods. The WTO is empowered to monitor compliance to ensure that defendants carry out their obli­ gations within a reasonable period of time. If the defendants fail to comply, the WTO will authorize the complainant to impose retalia­ tory trade sanctions if requested to do so. This gives the WTO power to enforce the agreement. TRIPS increases the range of regulatory standards that states are obliged to implement; specifies in greater detail what those

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standards must be; requires states to implement those standards; mandates and institutionalizes greater substantive convergence of national IP systems; and ties the principle of national treatment to a higher set of standards for IP protection.2 Overall, TRIPS has “added solidly to the property power around the world of corpora­ tions with high technology resources.”3 II.

The O

r ig in s o f t h e

TRIPS A g r e e m e n t

The Political and Economic Context Without private sector activism there would be no TRIPS to­ day. However, it is important to place this activism into a broader economic, historical and political context. In this section I will fo­ cus on the United States, because this is where the quest for a TRIPS began. Several trends, emerging in the 1970’s and acceler­ ating in the early 1980’s began to weigh heavily on U.S. policymak­ ers’ minds. First of all, policymakers were preoccupied by perceived American “decline,” as reflected in twin budget and trade deficits. Worries over trade deficits in particular elevated the importance of trade in American policymaking. Competitiveness concerns dominated policy debates as Japan and East Asia ap­ peared to be overtaking the United States in trade competition. Second, the increasing importance of high technology sectors in the global economy heightened U.S. policymakers’ interest in IP as an important component of competitive advantage. Traditional industries in decline as a result of aggressive im­ port competition from low-wage labor sites enjoyed reduced politi­ cal power. High technology, IP-based industries began to eclipse formerly powerful sectors such as steel and textiles. TTie high tech­ nology IP-based sectors could claim trade surpluses in their prod­ ucts and services in sharp contrast to the overall U.S. trade deficit. The pharmaceutical, entertainment and software industries were vigorous exporters that boasted positive trade balances. Third, in response to emerging trade pressures U.S. support for “free trade” was weakening. Successful proponents of a new conception “free-but-fair-trade” - argued that it was necessary to reduce dis­ tortions emanating from other countries’ trade practices. This im2 See Peter Drahos, Thinking Strategically About Intellectual Property Rights, 21 202 (1997). 3 Christopher Arup, Competition over Competition Policy for International Trade and Intellectual Property, 16 P r o m e t h e u s 376 (1998). T e l e c o m m . P o l ’y

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plied that in a perfect world, the U.S. could continue to practice free trade but that others were preventing it from doing so. In principle, the fair trade policy is designed to promote freer trade worldwide by opposing protectionism at home, enforcing individ­ ual cases brought under U.S. trade law to counter “unfair” foreign practices, and negotiating bilateral and multilateral agreements to reduce trade barriers.4 In contrast to promoting domestic protec­ tionism as a remedy, the “free-but-fair” framework endorsed a strategy of easing competitive pressures on U.S. exporters “by ask­ ing for, not higher import barriers against others, but lower import barriers by others.”5 In this context the U.S. government “began to re-evaluate its policy of benign neglect toward United States in­ vestment abroad” and focused on the United States Trade Repre­ sentative (“USTR”) “as the agency most receptive to industry concerns and in the best position to coordinate efforts by the United States Government to develop responses.”6 Section 301 of the U.S. Trade Act allows the President to deny benefits or impose duties on products or services of countries unjustifiably restricting U.S. commerce. In 1974 the USTR was granted the authority to administer Section 301 procedures. By 1979 the USTR became the lead agency addressing investment issues and using trade measures as tools to combat restrictive investment practices abroad. Amendments to Section 301 in the Trade Agreements Act of 1979 institutionalized private sector participation in foreign trade policy. It established the right of private petitioners to seek government redress and made Section 301 “a potentially powerful weapon for a U.S. industry aggrieved by foreign trade practices.”7 By requiring the federal government “to take account of the views of the af­ fected industry” the amendments effectively established “a cooper­ ative relationship between public and private sectors.”8 Throughout the process of a 301 investigation, the USTR is ex­ pected to continue its consultations with the petitioner and other 4 See John Greenwald, Protectionism in U.S. Economic Policy, 23 S t a n . J. I n t ’l L. 233, 234 (1987). 5 Jagdish Bhagwati, United States Trade Policy at a Crossroads, 1 2 T h e W o r l d E c o n . 452 (1989). 6 R. Michael Gadbaw, Intellectual Property and International Trade: Merger or Mar­ riage of Convenience?, 22 V a n d . J. T r a n s n a t ’l L. 223, 228 (1989). 7 Bart S. Fisher & Ralph G. Steinhardt, III, Section 301 of the Trade Act o f 1974: Pro­ tection for U.S. Exporters o f Goods, Services, and Capital, 14 L a w & P o l ’y I n t ’l B u s . 569, 599 (1982). 8 Id. at 605.

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relevant private sector actors. The 1979 amendments significantly enlarged the scope of private sector participation in U.S. trade pol­ icy. The U.S. began to employ market access as a bargaining chip in exchange for investment liberalization and increased IP protec­ tion abroad. Industry Strategies: Domestic This institutional, economic, and political context provided a favorable environment for advocates of high protectionist norms in IP to press their case. A number of important industry representa­ tives had been actively pushing for an IP-trade linkage already in the late 1970’s in the waning days of the Tokyo Round of GATT negotiations. The Levi Strauss Corporation initiated an effort to combat foreign counterfeiting of its trademark blue jeans.9 Levi Strauss pressed its case with other trademark-sensitive firms (lob­ bying as the International Anti-Counterfeiting Coalition) and ob­ tained the backing of the USTR for an anti-counterfeiting code. Owing in part to the eleventh-hour introduction of the proposal, the effort ultimately failed. By 1982, the U.S., the European Com­ munity, Japan, and Canada had reached agreement on a draft pro­ posal. Developing countries resisted its adoption. Meanwhile, a number of firms were engaged in intensive bilat­ eral consultations with trading partners over alleged violations of U.S. firms’ IP rights. In the late 1970’s, Monsanto Agricultural Company, FMC, and Stauffer, acting through the U.S. government, pressed the Hungarian government to end piracy of agricultural chemicals. Pfizer, IBM, and DuPont also began to seek ways to change foreign IP practices. Indeed, Edmund Pratt, CEO of Pfizer and John Opel, CEO of IBM had been active in the International Anti-Counterfeiting Coalition at the end of the Tokyo Round. The agricultural chemicals industry joined forces with the International Anti-Counterfeiting Coalition and the Copyright Alliance to press for changes in U.S. trade policy. In 1982, at the behest of a number of American firms, the USTR embarked on a series of consulta­ tions with Hungary, Singapore, Mexico, Korea, and Taiwan to ad­ vocate increasing protection for U.S. firms’ patents, trademarks, and copyrights. The consultations resulted in assurances that the targeted countries would increase levels of protection, and con9 See Paul N. Doremus, The Externalization of Domestic Regulation: Intellectual Prop­ erty Rights Reform in a Global Era, 3 I n d . J. G l o b a l L e g . S t u d . 341 (1996).

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vinced a large segment of U.S.-based high-technology and creative interests that exploiting IP and trade linkage was fruitful.10 Owing in large part to the government’s concerns over trade competitiveness and the economic power of U.S.-based high tech­ nology industries, these private sector representatives enjoyed su­ perb access to the highest levels of policymaking. In particular, the Advisory Committee for Trade Negotiations (“ACTN”), provided an official channel for business people to provide private sector consultation to the president. ACTN is constituted by the Execu­ tive branch to solicit private sector views on trade policy. It is the top oversight committee of the private sector advisory system; it is managed by the USTR in cooperation with the departments of Commerce, Agriculture, Labor, and Defense.11 The president ap­ points its members and they played a major role in devising a trade-based IP strategy and in shaping U.S. trade policy. From 1981 Edmund Pratt of Pfizer chaired this influential committee, en­ suring that IP concerns would gain a hearing at the top policymak­ ing level. In 1981, on recommendation of ACTN, the USTR created a new post, assistant trade representative for investment charged with, among other things, focusing on investment obstacles and weak IP protection.12 Pratt and Opel pursued parallel efforts during 1983 and 1984 to advance their specific concerns to the ad­ ministration. Their efforts helped to catalyze and sharpen a resur­ gent governmental focus on competitiveness. In a 1983 national address, President Reagan avowed his com­ mitment to maintaining American technological superiority into the 21st century. However, the President’s pledge turned out to be a last minute addition without backup papers; the private sector quickly filled the breach with an array of proposals featuring trade and IP initiatives.13 Largely as a result of private sector input, the President’s Commission on Industrial Competitiveness, chaired by John Young, president and CEO of Hewlett-Packard and eventual TRIPS activist, issued its 1983-1984 report including an addendum outlining the effects of weak IP protection abroad on U.S. competitiveness. 10 See J. Enyart, A GATT IP Code, 25 L e s N o u v e l l e s 53, 54 (1990). 11 See S y l v i a O s t r y , G o v e r n m e n t s a n d C o r p o r a t i o n s i n a S h r i n k i n g W o r l d 21, 22 (1990). 12 See M i c h a e l R y a n , K n o w l e d g e D i p l o m a c y : G l o b a l C o m p e t i t i o n a n d t h e P o l i t i c s o f I n t e l l e c t u a l P r o p e r t y 68 (1998). 13 See Gadbaw, supra note 6, at 234.

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Private sector lobbying intensified throughout 1983 and 1984. The U.S. government first officially linked IP and trade in 1984 when Gerald Mossinghoff, Assistant Secretary and Commissioner of Patents and Trademarks, issued a strong statement underscoring the vital link between IP protection and American industry’s abil­ ity to compete globally. He concluded by stating that “this Admin­ istration is committed to strengthening that protection as an integral component of our service to U.S. trade and industry.”14 In a classic example of the “revolving door” between the government and the private sector, Mossinghoff left government service to be­ come president of the U.S.-based Pharmaceutical Manufacturers Association (now called Pharmaceutical Research and Manufac­ turers of America) in 1985. This organization has emerged as one of the strongest, best-organized campaigners for using U.S. trade leverage for securing stronger IP protection abroad. Copyright interests were also actively engaged in this cam­ paign. During this same period Jack Valenti, of the Motion Picture Association of America (“MPAA”), became an outspoken critic of copyright piracy abroad. He urged the government to use bilateral trade pressure on countries engaging in widespread piracy of American movies and videos. His association successfully lobbied for an IP provision in the Caribbean Basin Economic Recovery Act (“CBERA”) of 1983 stipulating that those countries pirating U.S. copyrighted products would be denied non-reciprocal tariff waivers on their imports under the Generalized System of Prefer­ ences. Inspired by the motion picture industry’s strategy, Ameri­ can book publishers also looked to the CBERA as a way to curb book piracy in the region. Cooperation between the entertainment and publishing industries emerged to pressure the government ex­ plicitly to incorporate IP protection in its trade policy and was in­ strumental in the 1984 amendments to the Trade and Tariff Act.15 This inter-industry mobilization expanded with the creation of the International IP Alliance (“IIPA”). The IIPA was founded in 1984 to promote copyright interests and quickly emerged as a powerful and effective lobbying arm rep­ resenting over 1500 corporations “whose annual output exceeds

14 Gerald Mossinghoff, The Importance of Intellectual Property in International Trade, Bus. A m ., Jan. 7, 1984, at inside cover. 15 See R y a n , supra note 12, at 7 0 .

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five percent of the U.S. Gross Domestic Product.”16 Headed by Eric Smith, it coordinates policy positions based on shared con­ cerns of its members, tracks copyright policies abroad, provides de­ tailed information on foreign copyright practices and infractions, testifies before Congress, and publishes influential reports that it delivers to Congress and the USTR. Industry associations lobbied hard for amendments to U.S. trade policy. Congress adopted amendments in the Trade and Tariff Act of 1984 that directly responded to the demands of the IP lobby and institutionalized the link between IP and trade. For the first time the amended act included the failure to adequately pro­ tect IP as actionable under Section 301. The Section permits indus­ tries, trade associations, and individual companies to petition the USTR to investigate actions of foreign governments. The 1984 amendments included IP protection as a new criterion for assessing developing countries’ eligibility for nonreciprocal trade conces­ sions under the Generalized System of Preferences program. This reflected the CBERA precedent and the lobbying efforts of the entertainment, publishing, and pharmaceutical industry associations. Despite the substantial legislative victories that the private sector lobbyists had won in the 1984 amendments, the IP lobby accelerated its activities and kept IP on the front burner of trade policymaking. Now that the Trade and Tariff Act had more statu­ tory bite, especially for IP, the lobbyists pressed the government to take action. Throughout 1985 and 1986, the PMA, the IIPA, and the MPAA continued to press Congress and the USTR to follow through with trade pressure to force countries to ratchet up their levels of IP protection. The sentiments of these lobbyists found more formal expres­ sion in the report of the Advisory Committee for Trade Negotia­ tions’ Task Force on IP Rights. Among the participants of the eight-member task force were the CEO of IBM, John Opel, Vice President and Counsel of the Motion Picture Industry Association, Fritz Attaway; and President of the International Division of Merck & Company, Inc., (at that time America’s largest pharma­ ceutical corporation), Abraham Cohen. The report endorsed U.S. efforts to incorporate IP rights into the GATT framework. The 16 Paul C.B. Liu, U.S. Industry’s Influence on Intellectual Property Negotiations and Special 301 Actions, 13 UCLA P a c . B a s i n L.J. 87, 102 (1994).

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task force also advocated a carrot and stick approach - on the one hand, providing technical assistance in training foreign IP officials, and on the other, strengthening U.S. trade leverage over reluctant foreign governments. Between 1984 and 1988, industry representa­ tives not only lobbied Congress, USTR, and foreign governments but also conducted raids on pirate operations abroad and pursued Section 301 actions against foreign governments.17 In short, they pursued multiple channels and adopted concerted strategies to in­ crease levels of IP protection abroad. Pressures for a trade remedy for America’s economic woes reached a strident climax in the form of the proposed Gephardt Amendment of 1986-88. This amendment, targeted at countries running a trade surplus with the United States, would have man­ dated an annual trade surplus reduction of ten percent. Under the terms of the proposal, the U.S. would impose mandatory tariffs and quotas on recalcitrant states. At this juncture American trade pol­ icy was at a crossroads between the pursuit of “fair trade” and out­ right protectionism. Industry associations presented a politically viable alternative to protectionism that was more compatible with America’s post-World War II penchant for free trade. Their alter­ native was a better fit between America’s self-professed values and its postwar policies than was the Gephardt proposal. U.S. export industries did not relish the prospect of trade contraction that the Gephardt proposal would invite. The specter of protectionism mo­ bilized like-minded industries in opposition to Gephardt’s pro­ posed amendment and spurred the adoption of the 1988 Omnibus Trade and Tariff Act and the revisions of Section 301. The bill ef­ fectively transferred substantial authority from the President to the USTR, which enhanced USTR’s status as the lead trade agency. The 1988 Act transfers to the USTR the authority under Section 301 “not only to determine whether foreign practices are unfair, but also to take action.”18 The 1988 Trade Act strengthened the IP components originally incorporated in 1984. Now the USTR must annually identify IP priority countries (violators) and self-initiate investigations within thirty days of identification. Furthermore, the USTR must determine the actionability of foreign activity and de­ vise a policy response within six months of the initiation of the in17 See generally

S u s a n S e l l , P o w e r a n d Id e a s : T h e N o r t h -S o u t h P o l it ic s o f I n ­

(1998). 18 Judith H. Bello & Alan F. Holmer, The Heart o f the 1988 Trade Act: A Legislative History of the Amendments to Section 301, 25 S t a n . J. I n t ’l L. 1, 8 (1988).

tellectual

P r o p e r t y a n d A n t it r u s t

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vestigation. It must implement Section 301 action within thirty days of an affirmative determination. The tight time deadlines and requirement for the public identification of violating countries re­ flect the expressed desires of the private sector to toughen U.S. resolve. The amendments require the USTR to make a determina­ tion in every case, whether or not retaliatory action is taken; by contrast the 1984 law did not require the President to make a de­ termination in each case. The process of compiling USTR reports to identify foreign trade barriers includes gathering information from private sector advisory committees. In addition, the USTR’s methods to calcu­ late the economic damage caused by foreign trade barriers rely ex­ clusively on estimates provided by affected U.S. industries. “Thus, corporations and individuals who stand to benefit from the finding or exaggeration of foreign trade barriers are also relied upon for information in determining the existence and impact of these barri­ ers.”19 Consultation procedures further institutionalize the partici­ pation of the private sector under Section 306. Under this amendment, “before taking any action, the USTR shall consult with the petitioner and the domestic industry and provide an op­ portunity for public views.”20 U.S. preferences for a trade-based approach to IP protection were the result of both the power of various industry associations, and the specific ideas and policy prescriptions that they promoted. This powerful group of associations mobilized behind a tradebased conception and presented themselves as part of the solution to America’s trade problems. These associations captured the im­ agination of American policymakers who sought to stave off an ap­ parently impending protectionist approach to trade policy. III.

I n d u s t r y St r a t e g ie s : T r a n s n a t io n a l M o b il iz a t io n and

TRIPS

As the previous section pointed out, traditional industry as­ sociations did much of the heavy lifting in building support for a trade-based approach to IP protection. Private sector actors pains­ takingly and relentlessly worked to change attitudes toward IP, and 19 William H. Lash III, . . . In Our Stars: The Failure of American Trade Policy, 18 N.C.J. I n t ’l L. & C o m . R e g . 1, 14 (1992). 20 Julia Christine Bliss, The Amendments to Section 301: An Overview and Suggested Strategies for Foreign Response, 20 L a w & P o l ’y I n t ’l B u s . 501, 519 (1989).

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to get the government to take concrete steps to institutionalize this new approach. The advocacy of industry associations and a hand­ ful of well-connected corporate players was critical in developing support for a trade-based approach to IP in a strikingly short pe­ riod of time. Their efforts met with considerable success in part because of institutional changes in American trade policymaking that increased their direct access to the policy process. Another important component of their success was the government’s preoc­ cupation with competitiveness and trade policy. The broader polit­ ical, economic and institutional context helped to bolster the influence of high technology and IP-based industries at the expense of older protectionist coalitions. The ultimate defeat of the Gephardt amendment reflected the government’s commitment to a new set of private sector lobbyists. One must keep in mind the fact that the actions of individuals and lobbyists are always embedded in a broader context. Ignoring that context overestimates the effi­ cacy of particular individuals, and obscures broader structural con­ ditions that render efficacious action possible. That said, I now turn to the discussion of a small group of private sector lobbyists that took concerns over IP and trade to the multilateral level in the Uruguay Round. In 1984, the USTR requested private sector input on the issue of including IP on the agenda of the upcoming GATT Round. Opel of IBM commissioned Jacques Gorlin, an economist who had served as a consultant to ACTN and subsequently the IPC, to draft a paper for the USTR outlining a trade-based approach for IP. Gorlin’s September 1985 paper, “A Trade-Based Approach for the International Copyright Protection for Computer Software,”21 be­ came the basis of the multilateral IP strategy that corporations soon pursued. 1985 was a turning point in the private sector’s quest for the globalization of its preferred trade-based conception of IP protec­ tion. Gorlin’s contribution was his synthesis and extension of the more ad hoc lobbying requests and position papers that corpora­ tions and industry associations had presented to Congress and the Executive Branch throughout the early 1980’s. His document pro­ vided the contours of a possible multilateral agreement for the GATT, as well as suggested strategies for consensus building. Not 21 See Jacques Gorlin, A Trade-Based Approach for the International Copyright Pro­ tection for Computer Software (1985) (unpublished manuscript, on file with author).

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surprisingly, in October 1985 the ACTN Task Force on IP Rights presented its report to ACTN and its recommendations appeared to be lifted wholesale out of Gorlin’s document.22 Gorlin advocated a number of strategies including: a campaign to educate IP experts on the economic aspects of the issues; U.S. accession to the Berne Convention for the Protection of Literary and Artistic Works; the negotiation of an IP code with like-minded industrialized countries within the OECD or plurilaterally within the GATT, “to avoid the obstructionist tactics of the LDCs;”23 the recognition that the World IP Organization (WIPO) would need to be consulted, and its resistance to the establishment of an IP code at GATT overcome; and the continuation of complementary uni­ lateral and bilateral efforts to combat piracy and weak enforce­ ment abroad. According to Gorlin, the advantages of incorporating IP into the multilateral trade regime would include availability of a dispute settlement mechanism, the use of linkage to other trade and investment issues, and the greater political lev­ erage of trade officials. As Gorlin summarized, developing a trade-based code “would help deal with the problems of piracy that are caused by governmental actions such as substandard legal pro­ tection and enforcement, by providing a forum with higher visibil­ ity, a tradition of finger-pointing, and a willingness to get involved in dispute settlement.”24 To build the necessary consensus, Gorlin advocated pursuing plurilateral simultaneous negotiations within the OECD and GATT. In February and March 1986, USTR Clayton Yeutter asked Opel and Pratt for assistance in putting IP on the Uruguay Round agenda.25 Yeutter pointed out that the European, Japanese, and Canadian governments were not getting any industry pressure for IP, and that without all of the big four on board (U.S., Canada, Europe, Japan) there was no chance of an IP deal in the Uruguay Round. To develop an IP code, Pratt and Opel needed a core of committed and actively engaged companies with international con­ nections to secure U.S. governmental and foreign support.26 At 22 U.S. Trade Representative Task Force on IP, Summary of Phase I: Recommendation of the Task Force on IP to the Advisory Committee for Trade Negotiations (Octoberl985) (unpublished report, on file with author). 23 See Gorlin, supra note 21. 24

Id .

25 Interview with Jacques Gorlin, President, The Gorlin Group, in Washington, D.C. (Jan. 22, 1996). 26 See Enyart, supra note 10, at 54.

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this point Opel and Pratt contacted their peers and convinced their fellow CEOs to form the Intellectual Property Committee in March 1986. Initially, the IPC represented the following compa­ nies: Bristol-Myers, CBS, Du Pont, General Electric, General Mo­ tors, Hewlett-Packard, IBM, Johnson & Johnson, Merck, Monsanto, and Pfizer. According to James Enyart, then-Director of International Affairs for Monsanto Agricultural Company and founding IPC member, the CEOs provided adequate funding and human resources to the IP effort, and provided added momentum by directly contacting their corporate counterparts.27 The IPC, rather than working through its respective industry associations, chose to bypass these associations in search of a quick consensus. The IPC sought rapid results; to maximize its impact it deliberately limited its membership, and insisted that member companies be represented by the top echelons of management to avoid cumbersome negotiations within the corporations. The IPC operated as a committee of the whole, and its streamlined structure was designed to get things done quickly. It represented a broad array of U.S. industries - chemical, computer, creative arts, elec­ tronics, heavy and consumer manufacturing, and pharmaceutical industries. As Enyart points out, “no existing U.S. trade group or association really filled the bill, we had to create one.”28 The first step was to arrive at a consensus as a group. Repre­ senting pharmaceuticals, movies, and computers, for example, raised coordination challenges. According to Pratt, this group of “strange bedfellows” needed to define its objectives and strategies very clearly.29 In fairly short order the group resolved that the three critical aspects for an international IP agreement were: 1) a code of minimum standards for copyrights, patents, trademarks, and appellation of origin issues; 2) an enforcement mechanism; and 3) a dispute settlement mechanism. Domestically, the IPC was far from idle. It contacted the U.S. Chamber of Commerce and numerous industry associations to per­ suade them of the merits of a trade-based approach to IP. These organizations adopted IPC positions and endorsed the overall mul­ tilateral strategy. For example, in July 1986 the Joint Working Party on IP issues and the GATT of the International Chamber of 27

Id.

28

Id.

29 See

O stry, supra note 11, at 23.

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Commerce recommended the inclusion of IP in the new GATT round.30 Since the IPC member corporations were among the most active in their respective industry associations as it was, this was not a particularly hard sell. From the time of its formation in March 1986, the IPC only had six months before the upcoming September Punta del Este meeting. IPC members immediately contacted their counterparts in European and Japanese industry. In June 1986, the IPC met with the Confederation of British Industries, the Bundesverband der Deutschen Industrie (“BD I”) in Germany, the French Patronat, and through them, with the Union of Industrial and Em­ ployers’ Confederations of Europe (“UNICE”). UNICE is the official representative of European business and industry in Euro­ pean institutions; it is composed of 33 member federations from 22 countries. In July, the IPC went to Japan and met with the Japan Federation of Economic Organizations (hereinafter “Keidanren”). Keidanren is a private, non-profit economic organization repre­ senting virtually all branches of economic activity in Japan. In these meetings, the IPC stressed that the issue of IP was too important to leave to governments.31 The group argued that indus­ try needed to decide upon the best course of action and then tell governments what to do. The IPC convinced its European and Japanese counterparts of the merits of a trade-based approach by emphasizing their shared experience and common plight. The IPC stressed the high costs of IP piracy, and the successes that it had achieved through bilateral trade negotiations. The IPC succeeded in forging an industry consensus with its European and Japanese counterparts, who agreed to work on it and pledged to present these views to their respective governments in time for the launch­ ing of the Uruguay Round. As Pratt noted, this joint action by the U.S., European, and Japanese business communities represented “a significant breakthrough in the involvement of the international business community in trade negotiations.”32 UNICE and Keidanren successfully advanced their new cause to their govern­ ments. By the launching of the new trade round in September, the 30 See Possible New Round o f Trade Negotiations Before the Committee on Finance, 99th Cong. (1986). 31 Interview with Jacques Gorlin, supra note 25. 32 Peter Drahos, Global Property Rights in Information: The Story o f TRIPs at the GATT, 13 P r o m e t h e u s 6, 13 (1995).

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U.S., Japan, and Europe were united behind the inclusion of an IP code in the GATT. The IPC, UNICE, and Keidanren agreed to continue to work together to devise a consensual approach to an IP code at the GATT. Industry representatives met in October and November 1986, and worked on producing a consensus document to present to their respective governments and the GATT Secretariat. Par­ ticipants made a concerted effort to “honestly represent all forms of IP and all industries concerned.”33 In June 1988, this “trilateral group” released its “Basic Framework of GATT Provisions on IP” (IPC, Keidanren, and UNICE, 1988). This document was strik­ ingly similar to Gorlin’s 1985 paper, covering minimum standards of protection, enforcement and dispute settlement provisions, and became the basis of the eventual TRIPS agreement. It was a con­ sensus document that included compromises. For instance, the U.S. non-generic pharmaceutical industry was not completely satis­ fied with the compulsory licensing provisions, but the IPC con­ ceded the issue to keep the Europeans and Japanese on board. Having produced this consensus proposal, the IPC, Keidanren, and UNICE had to go home and sell the approach to other companies and industries.34 This process was not at all difficult for the IPC, which faced a very receptive home government. In fact, the U.S. government sent out the June 1988 proposal as reflecting its own views.35 The private sector’s normative power was consolidated and in­ stitutionalized insofar as it “elevated its own self-interest to the sta­ tus of a substantive norm” and established “understandings about what is proper, natural and legitimate” that reflected “the interests of the big corporate players.”36 In the TRIPS negotiations the IPC had a potent ally at the Uruguay Round in Edmund Pratt of Pfizer, who was an advisor to the U.S. Official Delegation at the Round in his capacity as chair­ man of ACTN. This was auspicious because the private sector has no official standing at GATT. UNICE and Keidanren represented European and Japanese business in Geneva throughout the negotiEnyart, supra note 10, at 55. See id. Interview with Jacques Gorlin, supra note 25 S. Wilks, Comparative Capitalism and the Political Power o f Business, in G l o b a l i s a ­ t i o n a n d C a p i t a l i s t D i v e r s i t y : E x p e r i e n c e s o n t h e A s i a n M a i n l a n d 50 (S. Strange ed.,1996). 33 34 35 36

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ation process. The IPC worked closely with the USTR, the Com­ merce Department, and the Patent and Trademark Office (“PTO”). A 1988 IPC report stated that “this close relationship with USTR and Commerce has permitted the IPC to shape the U.S. proposals and negotiating positions during the course of the negotiations.”37 Between 1986 until April 1989, IP issues stalled in the trade negotiations. The so-called “Group of Ten” developing countries, led by India and Brazil, vehemently protested the inclusion of IP in the GATT.38 Meanwhile, as discussed in the previous section, the U.S. increased the pressure by adopting new amendments to U.S. trade laws. In 1988, the U.S. strengthened its trade-based ap­ proach to IP. Motivated by industry lobbying, Congress pressed the Administration to use Section 301 more vigorously. Despite the fact that progress on the TRIPS negotiations had stalled, the IPC continued to pursue its multilateral efforts. The IPC worked to keep its business coalition together, and also focused its efforts on the GATT Secretariat. IP was a new issue for the GATT Secre­ tariat. Some members of the Secretariat recognized the inherent tension between free trade and the monopoly privileges of IP, yet did not systematically analyze TRIPS in this light but rather “re­ sponded to the ‘imperatives of the negotiations.’”39 Furthermore, taking a page from the 1985 Gorlin paper, negotiators worked in enclave committees to achieve plurilateral consensus - just as the IPC had done in its discussions with its European and Japanese counterparts. The IPC replicated its consensus building approach within the GATT, and two subgroups - a “Friends of IP” group, and the QUAD (the most powerful enclave committee) signifi­ cantly contributed to developing the TRIPS text.40 By April 1989, leading developing countries had accepted that GATT could have jurisdiction in IP, and that the TRIPS group could negotiate a comprehensive code of all trade-related aspects of IP rights. At the April 1989 Geneva meeting the delegations adopted a declaration endorsing continuation of the negotiating

37 38 Peru, 39 40

Drahos, supra note 32, at 13. These ten countries were Argentina, Brazil, Cuba, Egypt, India, Nicaragua, Nigeria, Tanzania and Yugoslavia. Drahos, supra note 32, at 19. See id.

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round and the applicability of GATT principles to IP issues.41 A f­ ter this breakthrough the negotiations entered into a more inten­ sive phase and a number of developing countries became more engaged in the process.42 Thus, by 1989 developing country resistance had finally been overcome. By the end of 1989 negotiators reached a consensus that developing countries should be allowed a grace period to im­ plement measures to permit them to conform to an IP agreement. The TRIPS negotiating process shifted from the North-South im­ passe to hard bargaining over specific provisions between the Europeans and Americans, and the Americans and the Japanese. While the IPC, UNICE, and Keidanren had reached broad consen­ sus on the substance of a multilateral IP agreement as reflected in their trilateral document, differences emerged over details of spe­ cific provisions. “North-North” issues dominated the remaining negotiations. Essentially, the Europeans pressed the Americans to accept some European features of IP policy, and the Americans challenged areas of difference between American and Japanese practices.43 The EC played a leading role in trying to bridge differ­ ences outstanding as of January 1990 and was the first to submit a comprehensive draft text during this new phase of negotiations.44 Throughout 1990 the U.S. and E.C. clashed over exceptions to patentable subject matter. The U.S., Japanese, Nordic and Swiss proposals offered no exceptions. The E.C.’s and developing coun­ tries’ draft proposals included exceptions for “inventions that would be contrary to public policy and health, plant or animal vari­ eties or the biological processes for their production.”45 Those listed by the E.C. and developing countries (ultimately incorpo­ rated in TRIPS as Article 27(3)) were seen as a direct challenge to the booming U.S. biotechnology industry. American biotechnol­ ogy interests have argued that without patent protection for their products and processes they are hard pressed to attract venture 41 See Frank Emmert, Intellectual Property in the Uruguay Round - Negotiating Strate­ gies o f the Western Industrialized Countries, 11 M i c h . J. I n t ’l L. 1317, 1374 (1990). 42 See Gail Evans, Intellectual Property as a Trade Issue — The Making o f the Agree­ ment on Trade-Related Aspects of Intellectual Property Rights, 18 W o r l d C o m p . 137, 170 (1994). 43 See T h e GATT U r u g u a y R o u n d : A N e g o t i a t i n g H i s t o r y (1986-1992) (Terence P. Stewart ed., 1993). 44 See Evans, supra note 42, at 171. 4 5 T h e GATT U r u g u a y R o u n d : A N e g o t i a t i n g H i s t o r y (1986 - 1992), supra note 43, at 2273.

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capital for their businesses. While American law permits the pat­ enting of life forms,46 e.g., the infamous “Harvard mouse”, the idea of patenting life forms is distasteful on moral grounds in much of Europe, and the Catholic Church, which is very strong in a number of European countries, looks down upon such practices.47 Further­ more, the very idea of patenting a life form raises controversial questions about invention, novelty, and the suitability of patenting products of nature. The TRIPS agreement follows the European Patent Convention of 1973, which permits the patenting of micro­ biological but not macrobiological processes; so micro-organisms and non-biological and microbiological processes are protected, but higher organisms are not.48 On December 7th 1990, the Uruguay Round negotiations col­ lapsed in Brussels over a deadlock over agricultural subsidies be­ tween the EC on the one hand, and the United States and the Cairns group of agricultural exporters on the other. Since TRIPS progress was linked to the progress of the Round as a whole, the agricultural stalemate slowed down the TRIPS momentum. GATT Director General Arthur Dunkel took over the process at this point. Dunkel took stands on controversial issues for countries to react and respond to. In the second half of 1991, most of the TRIPS negotiating action now shifted from the formal negotiations to the informal “Quad” group (U.S., E.C., Japan, and Canada) and bilateral meetings because at this point the major differences were between the Europeans, Americans, and Japanese.49 46 In the landmark case Diamond v. Chakrabaty, 447 U.S. 303 (1980), the Supreme Court ruled that a live, genetically altered microorganism could be patented. This prece­ dent-setting case has led to the expansion of rights to own living organisms. In 1987, Harvard researchers Philip Leder and Timothy Stewart won a patent on a transgenic mouse; they developed a strain of mice for cancer research by inserting a cancer gene into mouse egg cells. 47 European and Japanese biotechnology firms have coped with their more restrictive legislative environments by establishing alliances with American firms to conduct research and develop products in the U.S. A number of German firms have relocated their research facilities in the U.S. where the legal and political climate is more hospitable. See Robert S. Tancer, Trends in Worldwide Intellectual Property Protection: The Case o f the Pharmaceuti­ cal Patent, 37 I n t ’l E x e c u t i v e 147, 159 (1995). 48 J.H. Reichman, The TRIPS Component o f the GATT’s Uruguay Round: Competitive Prospects for IP Owners in an Integrated World Market, 4 F o r d h a m I n t e l l . P r o p . M e d i a & E n t . L.J. 171, 192-93 (1993). For an excellent discussion of all the points of contention, see T h e GATT U r u g u a y R o u n d : A N e g o t i a t i n g H i s t o r y (1986 - 1992), supra note 43. 49 See T h e GATT U r u g u a y R o u n d : A N e g o t i a t i n g H i s t o r y (1986 - 1992), supra note 43, at 2280.

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Eager to save the Round and move the negotiations forward, in December Dunkel produced a draft comprised of the results of the negotiations in each sector. This draft included a new TRIPS text that “provided an arbitrated resolution to issues undecided by the negotiators.”50 Dunkel presented his draft to negotiators and proposed that the so-called “Dunkel Draft”51 be rejected or ac­ cepted as a whole. For the next two years, the Dunkel Draft was roundly criticized for its inadequate treatment of IP rights. In the United States the IPC, the IIPA, PhRMA, the MPAA all testified as to its shortcomings before Congress, and continued to pursue aggressive 301 strategies through USTR. Their specific complaints will be discussed in more detail below, but they all opposed the transition provisions, or grace periods, for developing countries. However, these complaints must be placed in their proper context. Referring to the pharmaceutical industry, Weissman points out, “the industry’s vociferous opposition to a ten-year transition pe­ riod obscured how much it had won. It had completely seized con­ trol of the terms of the debate. The disputed issue was no longer whether the rest of the world should or would adopt strict patent rules but when it would.”52 According to Evans, a combination of negotiation fatigue, sunk costs, a sagging world economy, and fears of looming protectionism prompted negotiators to bring the Round to a conclusion.53 Negotiating parties finally reached agreement on the so-called “Dunkel Draft” and the Uruguay Round was success­ fully concluded on April 15, 1994. The IPC succeeded in getting most of what it wanted in the TRIPS agreement in the Uruguay GATT round. According to Gorlin, except for the lengthy transition periods for developing countries, the IPC got 95% of what it wanted.54 The IPC was par­ ticularly pleased with the enforcement provisions. The industry representatives’ demands are reflected clearly in the final agree­ ment. For example, the TRIPS agreement affirms the principle of id. at 2282. 51 See GATT Director, Agreement on Trade-Related Aspects o f IP Rights, Including Trade in Counterfeit Goods (Annex III), in Draft Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations, MTN.TNC/W/FA (Dec. 20, 1991). 52 Robert Weissman, A Long, Strange TRIPS: The Pharmaceutical Industry Drive to Harmonize Global Intellectual Property Rules, and the Remaining WTO Legal Alternatives Available to Third World Countries, 17 U. Pa. J. I n t ’l E c o n . L. 1069, 1084-85 (1996) (emphasis added). 53 See Evans, supra note 42, at 174. 54 Interview with Jacques Gorlin, supra note 25. 50

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national treatment and Article 33 mandates a 20 year minimum period for exclusivity of patent rights from the date of filing the patent application.55 Chemical and pharmaceutical producers gained by the provision in the TRIPS agreement that reverses the former burden of proof in process patent infringement cases; before the burden of proof of infringement rested with the patent holder, now the alleged infringer must demonstrate that the pro­ cess used is substantially different.56 Furthermore, the agreement restricts the issuance of compulsory licenses by forbidding exclu­ sive licenses and sharply reducing the conditions for and scope of such licenses (TRIPS, Art. 31). This is significant because in the past a number of developing countries reserved the right to issue exclusive compulsory licenses - authorizing a third party to work an invention and excluding the property owner from exploiting the resource. Policymakers in developing countries suspected that many foreigners filed patents solely to block the use of the pat­ ented invention in the country or to promote importation of that article by the patent holder. In order to protect themselves from paying above-market rates for patented technology due to an im­ port monopoly, many developing countries believed that the threat of exclusive compulsory licensing was a powerful tool for ensuring that foreign IP holders put their IP to productive use rather than abuse their monopoly rights. This tool is no longer available to TRIPS signatories. The compulsory licensing provisions followed the EC conditions for such licensing, which are somewhat more forgiving than the outright prohibition that the U.S. pharmaceuti­ cal industry preferred. IV .

P o s t -T R IP S I n d u s t r y S t r a t e g i e s

The new global regulation of IP rights requires a “web of sur­ veillance,”57 particularly since the vast majority of countries signing on to TRIPS will be negatively affected (at least in the short term). Net importers of IP-based goods and services will pay higher costs. The web of surveillance operates on multiple levels. The private sector activists continue to play a central role in monitoring imple55 See Office of the U.S. Trade Representative, Agreement on Trade-Related Aspects of IP, Including Trade in Counterfeit Goods, August 27, 1994, The 1994 General Agree­ ment on Tariffs and Trade, Annex 1(C), arts. 3(1), 27(1), and 33 of the TRIPS Agreement. This patent term was also included in the Trilateral group’s July 1988 agreement. 5 6 Christopher Kent, NAFTA, TRIPS Affect IP, 28 L e s N o u v e l l e s 176, 179 (1993). 5 7 J o h n B r a i t h w a i t e & P e t e r D r a h o s , G l o b a l B u s i n e s s R e g u l a t i o n 87 (2000).

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mentation and enforcement efforts. Domestic state institutions are responsible for adopting and enforcing TRIPS-compliant policies. The WTO provides an additional and crucial resource for the global regulation of IP. Since the adoption of TRIPS the American IP activists have remained vigilant in monitoring the implementation and compli­ ance of TRIPS worldwide. They have continued to avail them­ selves of the U.S. 301 apparatus to pressure developing countries to alter their domestic IP policies. They also have utilized the mechanisms of the WTO, through USTR, to file complaints over TRIPS. At the same time the impact of TRIPS has become more palpable, new pockets of resistance and social mobilization have emerged to challenge TRIPS. With the exception of initial devel­ oping country resistance, opposition to TRIPS emerged rather late - when the ink was dry. This implies that while TRIPS cannot be “undone” in any direct sense, the fight over loopholes, alternative interpretations of vague language, and perhaps, most importantly, effective resistance to further expansion of global IP rights are on the horizon. This section discusses post-TRIPS industry strategies and actions for ensuring compliance through the WTO process. It examines the continued use of Section 301 for IP issues and the use of the WTO dispute settlement mechanism. Finally, it presents the contours of opposition to TRIPS. Industry Strategies In January 2000 an advocate for the IPC, Charles Levy, spoke to the American Bar Association’s Section of International Law and Practice and spelled out the IPC post-TRIPS strategy. Levy is a Washington lawyer and lobbyist who works closely with Jacques Gorlin and, like Gorlin, receives the IPC’s lobbying dollars. Levy bemoaned the “significant noncompliance” with TRIPS and sug­ gested that TRIPS supporters should use litigation “selectively, bringing, in the first instance, those cases they know they can win, and that present strategic issues that will develop the necessary body of precedent.”58 Further, he argued that members must dis­ play resolve by taking dispute settlement “as far as necessary” to ensure full compliance with TRIPS. The hope of this strategy is to turn high profile dispute resolution decisions into a powerful exam58 Charles S. Levy, Implementing TRIPS — A Test o f Political Will, 31 789, 790 (2000).

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pie that other more lax countries will choose to follow. Levy also stressed the benefits of both intergovernmental and private sector diplomacy, emphasizing that the business community, and in par­ ticular “companies with a major presence in a country, can play a role in helping countries to understand the benefits of fully imple­ menting the legal regime required by TRIPS.”59 Similarly, Eric Smith, President of the IIPA, emphasized a number of post-TRIPS strategies. At the multilateral level, besides urging use of the WTO dispute settlement machinery, Smith en­ dorsed exploiting the opportunity provided by the TRIPS Coun­ cil60 practice of reviewing implementation and obligations to point out deficiencies in various countries’ laws. The TRIPS Council is a Committee of the Whole consisting of all current WTO members. It is charged with overseeing TRIPS implementation. For the re­ view process, states must notify the TRIPS Council of the steps they have taken to implement TRIPS, and then must respond to questions put to it by other TRIPS Council members. The IIPA, along with other interested parties, prepares questions and detailed enforcement information that it then submits to USTR for the TRIPS Council review process. In Smith’s words: “this is an im­ portant means to put pressure on countries that have not yet fully implemented their obligations to do so immediately or risk the commencement of a formal consultation and dispute settlement process.”61 Indeed, in 1998 the USTR reported that it had been using the TRIPS Council meetings as “an opportunity to educate developing country members as to how these provisions must be implemented in their laws.”62 The USTR indicated that the Coun­ cil meetings have been useful for keeping pressure on developing country members and have provided a valuable forum for confirm­ ing U.S. interpretations of the TRIPS Agreement.63 59 Id. at 794. 60 Formally known as the Council for Trade-Related Aspects of Intellectual Property Rights. 61 Implementation o f the Uruguay Round Agreements and the World Trade Organiza­ tion Before the House Comm, on Ways and Means, Subcomm. on Trade, 104th Cong. (1996) [hereinafter Testimony of Eric H. Smith] (testimony of Eric H. Smith, President, International Intellectual Property Alliance ). 62 1998 Trade Policy Agenda and 1997 Annual Report o f the President o f the United States on the Trade Agreements Program, U.S. Trade Representative, available at http:// www.ustr.gov/html/1998tpa_contents.html (last visited Apr. 9, 2002). 63 See id.

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Predictably, given the IIPA’s vigorous support of bilateral di­ plomacy to promote strong IP protection, Smith praised the fact that in its implementing legislation the U.S. expressly retained its prerogatives to suspend GSP benefits, and benefits under various regional initiatives such as the Carribean Basin Initiative and the Andean Trade Preferences Act. The U.S. sought to accelerate TRIPS compliance by developing countries prior to the negotiated deadlines, or transition periods. This reflected widespread indus­ try dissatisfaction with the negotiated transition periods. Smith further underscored the continued importance of Special 301 “which has done more than any other provision of U.S. trade law to improve the level of worldwide protection of U.S. products em­ bodying copyright.”64 Special 30165 is the U.S. trade law requiring the identification of IP rights priority countries. To the delight of IP activist industries, in its implementing legislation the U.S. strengthened Special 301 by requiring the USTR to take into ac­ count a country’s prior status under Special 301, the history of U.S. efforts under Special 301 and the country’s response to such ef­ forts. To the extent that this increases the information require­ ments for USTR it may make the USTR even more dependent on private sector groups for data and analysis. This amendment was designed to help highlight persistent recalcitrance in the face of Special 301 pressure. Key private sector groups articulated three major post-TRIPS strategies for the U.S.: use of the WTO dispute settlement mecha­ nism; the TRIPS Council process; and Special 301 of the Trade Act. Since private actors do not have standing at WTO, they must con­ vey their wishes to the USTR and hope that the USTR will act on their behalf and take up their particular causes. The USTR has been remarkably responsive to the expressed wishes of these key private sector actors. There is a strong correlation between the ex­ pressed wishes of the IP activists and government monitoring and enforcement. Former General Counsel and Deputy General Counsel for USTR, and now Executive Vice President of PhRMA,66 Judith H. Bello states that: 64 Testimony of Eric H. Smith, supra note 61. 65 While widely known as “Special 301”, this provision is Section 182 of the Trade Act of 1974, added by section 1303 of the Omnibus Trade and Competitiveness Act of 1988. 66 PhRMA membership: Abbott Laboratories; Allergan, Inc.; ALZA Corporation; American Home Product Corporation; Amgen; Ares-Serono International; AstraZeneca PLC; Aventis Pharma AG; Bayer Corporation; Biogen, Inc.; Boehringer Ingelheim Corpo­

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although an adm inistration’s lawyers determ ine the strategy and content of advocacy and represent the United States before the Dispute Settlement Body, they rely upon and work closely with the directly affected private parties. The input provided by the latter serves as additional resources and thereby reduces the burden on an administration in WTO litigation. . . . On the cases they select... the governm ent’s trade lawyers will collabo­ rate closely with legal counsel for the private parties most di­ rectly affected by the foreign government practices being challenged.67

In 1996, USTR established an Office of Monitoring and En­ forcement, indicating its seriousness of purpose. This office over­ sees trade agreement implementation and pursues enforcement actions, “aggressively” litigating disputes to “compel compliance” with the WTO agreements, NAFTA, and other regional and bilat­ eral agreements.68 This same office also addresses problems outside the framework of the multilateral and regional treaties by invoking Section 301 and Special 301 of the Trade Act. It is likely no coincidence that 1997 saw a 25% increase in the number of trading partners named under Special 301 in 1996.69 Not surprisingly, the U.S. has been the most aggressive coun­ try in the IP area. It has filed more WTO TRIPS complaints than all other member countries combined. True to the strategy advo­ cated by Levy, all fifteen U.S. TRIPS cases have been straightfor­ ward violation complaints in which states simply failed to enact the

ration; Bristol-Myers Squibb Company; E.I. du Pont de Nemours & Company; Elan Pharmaceuticals; Fujisawa Healthcare, Inc.; Genentech, Inc.; Genzyme Corporation; Gil­ ead Sciences, Inc.; Glaxo Wellcome pic; Hoechst Marion Roussel, AG; Hoffman-La Roche inc.; Immunex Corporation; Johnson & Johnson; Ethicon, Inc.; Knoll Pharmaceutical Com­ pany; Eli Lilly and Company; Merck & Co., Inc.; Novartis Pharmaceuticals Corporation; Nycomed Amersham Imaging; Organon Inc.; Pfizer Inc.; Pharmacia Corporation; The Procter & Gamble Company; Purdue Pharma L.P.; Rhone-Poulenc Rorer Inc.; SanofiSynthelabo Inc.; Schering-Plough Corporation; SCHWARZ PHARMA, INC.; SmithKline Beecham; Solvay Pharmaceuticals, Inc.; 3M Pharmaceuticals; and Warner-Lambert Company. 67 Judith H. Bello, Some Practical Observations About WTO Settlement o f Intellectual Property Disputes, 37 Va. J. I n t ’l L. 357, 360-61 (1997). 68 1998 Trade Policy Agenda and 1997 Annual Report o f the President o f the United States on the Trade Agreements Program, supra note 62. 69 See id.

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TRIPS provisions.70 Bello also predicted that the early IP cases would be easy wins that would help build support for the system.71 Other Actions Under 301 Industry also has availed itself of other tools under Special 301. The IIPA and PhRMA lobbied actively in the 1980’s to ensure additional forms of trade leverage by incorporating IP protection as a condition for certain preferential benefits. The U.S. is free to suspend privileges under the GSP program and the Carribean Ba­ sin Initiative (“CBI”) without abrogating its WTO obligations. The U.S. continues to use this form of bilateral leverage in the IP area. For instance, in March 1998, USTR suspended a portion of Honduras’ benefits under the GSP and the CBI because of pirated TV satellite signals. The Honduran case originated in 1992 when the MPAA filed a petition under the GSP program alleging wide­ spread unauthorized broadcasting of pirated videos and re-broad­ casting U.S. satellite-carried programming.72 Argentina also lost GSP benefits on about $260 million worth of its exports in 1997. In March 2001 the Ukraine was named as a Priority Foreign Country for its production and export of bootleg CDs and CD-ROMs.73 The USTR imposed $75 million worth of sanctions on Ukranian products in January 2002. The Ukraine was renamed a Priority Foreign Country in 2002 and the sanctions remained in place.74 Overall, industry strategies have been to press the USTR to invoke 301 and WTO dispute settlement measures, to use trade leverage and the TRIPS Council forum to achieve full-scale com­ pliance with TRIPS. Industry has engaged in extensive monitoring of global IP protection. Charles Levy, the IPC lawyer, expressed his initial belief that the force of the concept “the rule of law” was “so infectious that it would necessarily spur voluntary compliance 70 See Tuan N. Samahon, TRIPS Copyright Dispute Settlement After the Transition and Moratorium: Nonviolation and Situation Complaints Against Developing Countries, 31 L a w & P o l ’y I n t ’ l B u s . 1051, 1059 (2000). 71 See generally Bello, supra note 67. 72 See 1998 Trade Policy Agenda and 1997 Annual Report o f the President o f the United States on the Trade Agreements Program, supra note 62. 73 USTR 2001 Special 301, available at http://wwwustr.gov/enforcement/special.pdf (Apr. 30, 2001). 74 USTR 2002 Special 301 Report, available at http://wwwustr.gov/reports/2002/special 301-pwl.htm (last accessed May 2, 2002)

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by developing countries to implement effective protection.”75 As Reichman and Lange point out, in the wake of TRIPS: the zeal with which the developed countries have thrown them ­ selves into this monitoring . . . exercise has bred high expecta­ tions among rightsholders and their organized representatives. . . . . This euphoria stems . . . from the conviction that top-down pressures from governments in powerful developed countries, coupled with strategic litigation in defense of private right­ sholders . . . will suffice to keep developing countries in line and make it expedient for them to cooperate fully in the implemen­ tation process. The outcome thus envisioned is a worldwide in­ tellectual property system in which the ‘rule of law’, once firmly established at the international level, becomes translated into lo­ cal action by orderly and effective means.76

However, Reichman and Lange warn that this “euphoria” is mis­ placed insofar as there are many opportunities to “bargain around” TRIPS. Despite the extensive monitoring efforts documented above, there is undoubtedly room for some foot dragging, some so-called passive aggression, slowness in implementation and the like.77 Nu­ merous developing countries have requested extensions on the va­ rious negotiated grace periods, claiming among other things that their under-financed administrations need more time to implement the complex agreement.78 Furthermore, a number of scholars have pointed out that vagueness, ambiguities and loopholes abound in the TRIPS Agreement.79 However, in the next section I will focus my discussion not on possible ways to get around the TRIPS stric­ tures but rather on active and mobilized opposition to elements of the treaty. 75 Levy, supra note 58, at 790. 76 J.H. Reichmann & David Lange, Bargaining Around the TRIPs Agreement: The Case for Ongoing Public-Private Initiatives to Facilitate Worldwide Intellectual Property Transactions, 9 D u k e J. C o m p . & I n t ’l L. 11, 13-14 (1998). 77 For examples of this in the Special 301 context, see S e l l , supra note 17, at Ch.6. 78 See Inti Linkletter Knapp, Comment, The Software Piracy Battle in Latin America: Should the United States Pursue Its Aggressive Bilateral Trade Policy Despite the Multilat­ eral TRIPS Enforcement Framework?, 21 U. P a . J. I n t ’l E c o n . L. 173, 191-92 (2000). 79 See generally Paul Edward Gelier, Legal Transplants in International Copyright: Some Problems of Method, 13 UCLA P a c . B a s i n L.J. 199 (1994); A. Samuel Oddi, TRIPS - Natural Rights and a Polite Form o f Economic Imperialism, 29 V a n d . J. T r a n s n a t ’l L. 415 (1996); J.H. Reichman, From Free Riders to Fair Followers: Global Competition Under the TRIPS Agreement, N.Y.U. J. I n t ’l L. & P o l ’y 11 (1997); Robert Sherwood, The TRIPS Agreement: Implications for Developing Countries, 37 I d e a 491 (1997).

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C o n c lu s io n a n d E m e rg in g C h a lle n g e s

While industry was spectacularly successful in its quest to insti­ tutionalize the link between intellectual property and trade, in the wake of TRIPS a number of challenges have emerged. Two of the most important challenges are the “no patents on life” and the “ac­ cess to essential medicines” campaigns. These campaigns reveal an emerging tension between commercial and social agendas for the regulation of intellectual property. I briefly will discuss each cam­ paign before concluding. The “no patents on life” campaign highlights a sharp divide. On one side of the debate are America’s biotechnology, pharma­ ceutical, agricultural chemical and seed industries. They champion patentability with no exceptions. On the other side are grass roots activists, farmers’ groups, environmental groups, development groups, human rights groups, and consumer groups who are spearheading the global “no patents on life” campaign. These groups have mobilized to oppose an increasingly aggressive ap­ proach to intellectual property by American corporations. Among the central concerns of this campaign are farmers’ rights to save, reproduce and modify seeds. As early as 1993 hun­ dreds of thousands of Indian farmers demonstrated against TRIPS claiming that their rights would be jeopardized by the implement­ ing legislation. Vandana Shiva, an Indian grass roots activist, helped to mobilize a campaign against “biopiracy.”80 Biopiracy is seen as a new form of western imperialism in which global seed and pharmaceutical corporations plunder the biodiversity and traditional knowledge of the developing world. Biopiracy is the unauthorized and uncompensated expropriation of genetic re­ sources and traditional knowledge. According to this argument, corporations alter these “discoveries” with science, patent them, then resell the derived processes or products at exorbitant rates to the very people they stole them from in the first place. This turns the discourse of “piracy” upside down insofar as these activists seek to demonstrate that American corporations are the biggest “pirates” on the planet.

80 See (1997).

V andana

S h iv a , B io p ir a c y : T h e

P lu n d e r

o f N a tu re

and

K n o w le d g e

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Two particularly vivid Indian cases have animated this cam­ paign - the turmeric and neem tree cases.81 In these cases Ameri­ can researchers and corporations respectively asserted patent rights over these substances and were challenged by “no patents on life” activists. As Jeremy Rifkin, an activist American lawyer, summed it up: “ ‘the real battle is whether the genetic resources of the planet will be maintained as a shared commons or whether this common inheritance will be commercially enclosed and become the intellectual property of a few big corporations.”82 Further re­ lated controversies surround Article 27.3 (b) of TRIPS. While Ar­ ticle 27 permits the exclusion of plants and animals from patentability, 27.3(b) requires that members provide protection for plant varieties either by patents or an “effective sui generis” system. However, there is no consensus on what constitutes an effective sui generis system. American industries are pushing for adoption of the Union for the Protection of New Varieties of Plants (UPOV) as amended in 1991. This agreement is very generous to the corpo­ rate plant breeder and sharply curtails farmers’ rights. Supported by grass roots activists, developing countries are exploring other alternatives (including the 1993 Convention on Biological Diver­ sity) that respect farmers’ rights and communal indigenous forms of knowledge. A related area of building opposition to TRIPS is pharmaceu­ tical patents. In the face of the devastating HIV/AIDS crisis in sub-Saharan Africa and Thailand, the “access to essential medicines” campaign has mobilized to highlight the public health consequences of overly broad patent rights. At issue is the devel­ oping countries’ ability to avail themselves of emergency compul­ sory licensing provisions under TRIPS to produce generic equivalents of life-saving HIV/AIDS drugs. U.S. trade pressure on both South Africa and Thailand has helped to galvanize criticism of TRIPS in relation to health policy. Ralph Nader’s Consumer Pro­ ject on Technology, headed by James Love, and the Nobel-prize winning group Medecins Sans Frontieres have joined forces to pro­ test American trade policy in intellectual property and the TRIPS trade-off in favor of commercial interests over public health con­ cerns. Significantly, President Clinton angered the non-generic 81 See Emily Marden, The Neem Tree Patent: International Conflict over the Commodifi­ cation o f Life, 22 B .C . I n t ’l & C o m p . L . R e v . 279 (1999). 82 Id. (citing John F. Burns, Tradition in India vs. A Patent in the United States, N.Y. T i m e s , Sept. 15, 1995, at D4).

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pharmaceutical industry by publicly announcing that he would re­ strain the USTR with respect to South Africa. He further indi­ cated that public health concerns would henceforth be considered in the context of intellectual property trade policy and institution­ alized collaboration between the USTR and the Department of Health and Human Services to implement trade policies. Clinton’s Executive Order of May 10th, 2000 reined in the USTR by stating that athe United States shall not seek, through negotiation or oth­ erwise, the revocation or revision of any intellectual property law or policy of a beneficiary sub-Saharan African country, as deter­ mined by the president, that regulates HIV/AIDS pharmaceuticals or medical technologies.. . .” This was the first time that he had not supported fully the non-generic pharmaceutical industry in the context of intellectual property and trade.83 The Bush administra­ tion indicated that it would uphold Clinton’s Executive Order. Companies increasingly are having to respond to the challenge posed by the HIV/AIDS crisis and public health activists. In April 2000, Pfizer offered to provide fluconazale tablets free to South Africa. Companies fear that cut-rate drugs provided for develop­ ing countries will begin to flood developed country markets and reduce profit margins, but public pressure in the face of what ap­ pears to be a treatable crisis is demanding a response. 2001 was an eventful year for the public health activists. In March 2001 39 pharmaceutical companies abruptly dropped their lawsuit against South Africa. Shortly thereafter, the Bush adminis­ tration announced that it would be dropping a high profile intellec­ tual property WTO case against Brazil. HIV/AIDS drug prices dropped dramatically as generic producers from Brazil and India ramped up production. At the behest of the African countries, the TRIPS Council convened a special session in June 2001 to address the access to medicines issues. Developing countries sought offi­ cial confirmation that measures to protect public health would not make them subject to WTO dispute settlement procedures. The TRIPS Council resolved to continue analyzing the degree of flexi­ bility afforded by TRIPS. The United Nations held its first ever General Assembly Special Session devoted to a public health issue, which focused on the HIV/AIDS pandemic. It issued a “Declara­ tion of Commitment” and called for the creation of a Global AIDS 83 Africa/HIV/AIDS Executive Order 13155, Pharm-policy, available at http://lists.essential.org/pipermail/pharm-policy/2001-January/000613.html (Jan. 24, 2001).

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and Health Fund.84 At the November 2001 WTO Ministerial in Doha, negotiators adopted the Declaration on the TRIPS Agree­ ment and Public Health which states: “we agree that the TRIPS Agreement does not and should not prevent members from taking measures to protect public health.”85 Public health activists agreed that this was an important step forward. Overall, the post-TRIPS picture is mixed. TRIPS has ener­ gized industry to press further for TRIPS-plus policy changes in foreign countries.86 USTR has been busy promoting industry’s po­ sition, but was somewhat reined in by Clinton’s executive order. TRIPS has galvanized an increasingly vociferous and mobilized civil society campaign to temper the previously unchecked industry dominance over the intellectual property agenda. At the very least, the post-TRIPS trends have revealed new areas of contesta­ tion and portend a more difficult political environment for industry.

84 See Jennifer Steinhauer, U.N. Unites to Combat AIDS but Splits over How to Do It, N.Y. TIMES, June 27, 2001, at Al. 85 Declaration on the TRIPS Agreement and Public Health, WT/MIN(01)/DEC/2, World Trade Organization, available at http://www.wto.org/english/thewto_e/minist_e/ min01_e/mindecl_trips_e.htm (Nov. 20, 2001). 86 See, e.g., Peter Drahos, BITS and BIPS: Bilateralism in Intellectual Property, 4 J. W o r l d I n t e l l . P r o p . 791 (2001).

[6] B its a n d B ips Bilateralism in Intellectual Property

Peter DRAHOS*

I.

T he P rom ise Setting

of

M ultilateralism

in

Intellectual P r o per ty St a n d a r d -

During the period that the Agreement on Trade-Related Aspects of Intellectual Property Rights (Trips) was being negotiated (1986—1993), there were suggestions that if developing countries agreed to T rip s the United States would ease off negotiating intellectual property standards bilaterally. The following statement in 1989 from the Director for Intellectual Property at the Office of the U.S. Trade Representative ( U s tr ) makes the point: “What happens if we fail [to obtain T rips]? I think there are a number o f consequences to failure. First, will be an increase in bilateralism. For those o f you who think bilateralism is a bad thing, a bad thing will come about.”1

It was always clear at all stages of the T rip s negotiations that the principal players (the United States, the European Community and Japan) saw T rip s as setting only minimum obligations. Nevertheless, developing countries might reasonably have expected the World Trade Organization (W to ) or World Intellectual Property Organization (W IPO) in some cases to become the principal fora for the negotiation of new intellectual property standards. T rips was concluded as part of the text of Final Act of Uruguay R ound negotiations— the R ound was concluded on 15 December 1993 and the Final Act signed on 15 April 1994— and came into operation on 1 January 1995. There has been no apparent decline in U.S. bilateral activity on intellectual property since the signing o f TRIPS. The Annex at the end of this article shows that the level of bilateral activity by the United States has increased. This is consistent with a broader trend identified by John Jackson in U.S. trade policy in which the United States has moved away from its earlier support for multilateralism and most-favoured-nation (M fn) treatment to:

* H erch el Sm ith S en io r Fellow in In tellectual Property, Q u e e n M ary C ollege, U niversity o f L o n d o n , L ondon, U .K . T h e au th o r w o u ld like to th a n k Ju lie Ayling for h e r assistance, especially in th e preparation o f the A nnex. 1 Em ory Sim on, “Remarks o f M r Emory Sim on”, Symposium: Trade-Related Aspects o f Intellectual Property, 22 Vanderbilt J o u rn a l o f T ran sn atio n al Law, 1989, 370.

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“a more ‘pragmatic’— some might say ad hoc approach— o f dealing with trading partners on a bilateral basis, and ‘rewarding friends’.”2

II.

T h e R o le o f S e c tio n

301

in B ila te r a l is m

Section 301 is the section o f the U.S. Trade Act which is used by the USTR to address foreign unfair trading practices, including unfair practices on intellectual property rights. A 301 investigation may culminate in a bilateral agreement between the United States and the target State or, failing that, the imposition of trade sanctions by the United States (the latter is a rare occurrence). U.S. 301 bilateralism has increased since the 1980s. Many more countries are the subject of 301 surveillance and the Section has been amended to increase the number of reviews that take place (so-called “out-of cycle” reviews). The USTR announced in the 2000 Special 301 Report that the adequacy of intellectual property protection in more than seventy countries had been reviewed. In 1994, the USTR announced that Section 301 “should be an even more effective tool as a result of the Uruguay R ound agreements”.3 Not all trade negotiations that the USTR carries out with other countries involve the process under 301. Nevertheless, Section 301 is a constant presence whether in the foreground or background in U .S . bilateralism on intellectual property. Section 301 might produce a “TRIPS-plus” (defined in the next Section) consequence without there being a formal agreement between the United States and the relevant developing country. The developing country may simply decide to adopt a TRIPS-plus measure in order to avoid further action by the United States under the 301 process. O n the effectiveness of Section 301 it is worth noting the following remark by a USTR official: “One fascinating aspect o f the Special 301 process occurs just before we make our annual determinations, when there is often a flurry o f activity in those countries desiring not to be listed or to be moved to a lower list. IP laws are suddenly passed or amended, and enforcement activities increase significantly.”4

III.

D e fin itio n o f “T r ip s - P lu s ”

The term “TRIPS-plus” is used to cover two different types of consequences in this article. T r i p s confers on its Members the discretion to implement “more extensive protection” than is conferred by T r i p s standards (see Article 1.1). T r i p s also allows Members to qualify the operation o f some standards, to choose amongst standards or to choose when to adopt standards (“option-creating standards”). So, for example, Article 27.3 allows Members to qualify the standard of patentability in Article 27.1 by 2 J. Jackson, 7h e World Trading System, T h e M i t Press, C am bridge, Mass., L o n d o n , 1997, 173. 3 See Us'TR, 1994 Annual Report, Section 3 01, available at: . 4 Technological Progress and American Rights: Trade Policy and Intellectual Property Protection, testim ony o f Ambassador R ic h ard W . Fisher, D e p u ty U .S. T rad e R ep resen tativ e, S u b co m m ittee o n International E c onom ic Policy and T rade H o u se C o m m itte e o n In tern atio n al R elations, W ashington, D .C ., 13 O c to b er 1999, 3.

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excluding some subject-matter from patentability and Article 27.3(b) gives Members a choice as to how to protect plant varieties. The transitional provisions in Articles 65 and 66 create entitlements for developing countries, former centrally planned economies and least-developed country Members as to the timing of the adoption of TRIPS standards. A bilateral agreement that: -

requires a Member to implement a more extensive standard;

or -

w hich eliminates an option for a M em ber under a T rips standard,

is, for the purposes o f this article, a TRIPS-plus standard. Bilateral treaties also set standards on issues that T rips does not deal w ith— e.g. whether reproduction in copyright law includes temporary copies— and w hich are therefore not strictly TRIPS-plus.

IV. B a c k g r o u n d — T h e “O ld B ila t e r a lis m ” U.S. bilateralism on intellectual property was largely a response to its failure to obtain an agreement on trade in counterfeit goods at the end of the Tokyo R ound (1979) and the resistance of developing countries in the first half of the 1980s to including intellectual property as a negotiating item in a new G a t t Round. Led by India and Brazil, ten developing countries at first opposed the U.S. proposal to make a code on intellectual property a negotiating item (the remaining countries were Argentina, Cuba, Egypt, Nicaragua, Nigeria, Peru, Tanzania and Yugoslavia).5 Breaking the resistance of these hard-liners was fundamental to achieving the outcome the United States wanted. During the 1980s the United States reformed its Trade Act of 1974 to create a linkage with intellectual property. The principal enforcement tool of U.S. trade policy, Section 301, was amended to make it clear that it could be used to obtain protection for U.S. intellectual property; a mechanism known as “Special 301” was created, requiring the U s t r to identify countries denying adequate and effective protection for intellectual property rights and the administration of the Generalised System o f Preferences programme— giving developing countries duty free trading privileges in the U.S. market—was linked to the adequate protection of U.S. intellectual property rights. At the same time as it reformed its trade law in the 1980s to accommodate intellectual property, the United States linked its Bilateral Investment Treaty (B it) Program to the goal of adequate and effective protection for intellectual property.6 5 A. Jan e Bradley, Intellectual Property Rights, Investment, and Trade in Services in the Uruguay Round: Laying the Foundations, 23 S tanford J o u rn a l o f Intern atio n al Law, 1987, 57, 81, fo o tn o te 72. 6 T h e m o d el B it p ro g ram m e that the U n ite d States d ev elo p ed in the 1980s pro tected intellectual p ro p e rty as an investm ent activity. B y 1987 the U n ite d States had signed a B it w ith eleven developing countries and was negotiating w ith seven others. See F. A b b o tt, Protecting First World Assets in the Third World: Intellectual Property Negotiations in the G a i 7 Multilateral Framework, Symposium: Trade-Related Aspects o f Intellectual Property, 22 V anderbilt Journal o f T ran sn atio n al Law, 1989, 689, 712, fo o tn o te 12.

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T H E J O U R N A L O F W O R L D IN T E L L E C T U A L P R O P E R T Y

T rips-P lus M odels

In bilateral trade negotiations between States involving both a strong and a weak State, generally speaking the strong State comes along with a prepared draft text which acts as a starting point for the negotiations. Bilateral negotiations are complex and lengthy affairs, features which make them costly even for strong States. In order to lower the transaction costs of bilateralism, the United States has developed models or prototypes of the kind of bilateral treaties it wishes to have with other countries. Once a model treaty is ratified by the Senate, U.S. trade negotiators know that if they stick to its terms in other negotiations there is a good chance that the treaties flowing from these negotiations will also be approved. For the United States, there are very strong incentives for a standardization of bilateral treaty standards. So, for example, the B it which the United States signed with Nicaragua in 1995 was based on the prototype that the United States had developed for such treaties in 1994. Similarly, the Free Trade Agreement (Fta) that the United States has negotiated with Jordan will serve as a model for the other Ftas being negotiated with Chile and Singapore. The following two Sections offer a brief analysis of the intellectual property provisions of the Nicaraguan B it and the Jordan F ta. VI. T h e N ic a r a g u a n B it The Nicaraguan B it is part of the U.S. Bilateral Investment Treaty Program. This Program continues the same set of policy objectives that lay behind the draft Multilateral Agreement on Investment (M ai). Broadly speaking, the belief is that foreign investment and trade flows are intimately related and that liberalizing the rules on investment will also enhance trade. Adequate and effective protection for intellectual property is an explicit goal of the U.S. B it Program. The Nicaraguan B it, like other B its, does not set specific standards of intellectual property. Instead, it protects the rights of investors who use intellectual property as a mode of investment. The B it accomplishes this by including intellectual property in its definition o f investment (much like the draft M ai did). Intellectual property is defined widely to include copyright, patents, rights in plant varieties, designs, semi-conductor chips, trade secrets, trade and service marks and trade names. The licensing of intellectual property also falls within the meaning of investment since the definition of investment includes “rights conferred pursuant to law, such as licences and permits.”7 Typically, a B it creates M fn obligations and national treatment obligations for the parties to the treaty. These principles are not o f much use to U.S. investors if the developing country in question does not have intellectual property laws, has lowstandard la\ys or is taking advantage of the transitional provisions under Trips. M fn and 7 See the N icaraguan B it , A rticle l.l(d )(v i).

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national treatment in bilateral treaties have the effect of equalising treatment but not of raising standards within a country. It is for this reason that “prospective B it partners are generally expected, at the time the B i t is signed, to make a commitment to implement ... T rip s Agreement obligations within a reasonable time.”8 If this expectation is not met, the United States is ready to use its 301 process to secure the necessary commitment (on this as a negotiating strategy see Section vil). Since B its do n ot usually contain intellectual property standards, but rather depend on standards set in other agreements, their TRIPS-plus effects are difficult to evaluate. Adding to this is the fact that investm ent is defined broadly, the definition o f investm ent in these treaties bein g only illustrative rather than exhaustive. An example o f an intellectual property investm ent-related activity not counting as investment for the purposes o f a B it w ou ld be the simple case o f the sale o f an intellectual property related good across a border involving no other activity. H ow ever, m ost other uses o f intellectual property by intellectual property owners in foreign territories w ould appear to be caught by the provisions o f a standard B it . As Section VII o f this article shows, the United States is using B its as a carrot to get developing countries to sign bilateral intellectual property agreements (BlPs). This does not o f itself make a BlP a TRIPS-plus agreement. The w ide-ranging terms in w hich B its are drafted are likely to give international investors grounds for arguments, w hich if successful, may w ell be TRIPS-plus in their effects. For exam ple, a U.S. com pany may grant an exclusive licence to a company in a developing country to import its intellectual property related products, or it may set up a subsidiary for the same purpose. T he purpose o f the licensing arrangement may be to give the local com pany an incentive to support and market the relevant goods. Assuming the developing country governm ent has signed a standard B it, the licensing arrangement w ou ld be a covered investm ent for the purposes o f that B it.9 If the developing country passes a measure that undermines this contractual arrangement— e.g. the issue o f a com pulsory licence— then the U.S. com pany w ould be able to argue a breach o f som e o f the provisions o f the standard B it — e.g. the obligation not “to impair by unreasonable and discriminatory measures the management, conduct, operation ... o f covered investm ents.”10 The ou tcom e o f such a dispute w ou ld be affected by a variety o f factors, including the kind o f exhaustion regim e the developing country ran and its membership o f treaties other than T r ips . T h e general point, though, is that because the B it protects the contractual exploitation o f intellectual property rights as a covered investment, there may be circumstances w here it produces a TRIPS-plus effect. 8 See U .S. Bilateral Investment Treaty Program: Fact Sheet, R eleased by the O ffice o f Investm ent Affairs, B ureau o fE co n o m ic and Business Affairs, 1 N o v e m b e r 2 000, available at: T f > 0). All of the monopoly profits accrue to the Northern firm and, consequently, North has a greater incentive to protect intellectual property. Boundary equilibria where South provides no patent protection are quite possible. If both countries agree to simultaneously increase their patent protection, they could both be made better off because they would overcome the free­ rider problem. Since Northern welfare increases as Southern patent protection rises, North is better off at any position lying to the right of its Nash equilibrium indifference curve, EWnNE, in figure 1. Analogously, South is better off at any position lying above its Nash equilibrium indifference curve, EWsne. Thus, a move into the lens formed by the two indifference curves would be beneficial to both nations. This implies the possibility of a mutually beneficial but asymmetric intellectual property agreement. An example of such a mutually beneficial asymmetric position is point AP in figure 1 which is on the efficiency locus or contract curve, CC. Consider a move from the Nash equilibrium to point SP in figure 1 where the two countries have the same patent lengths and world efficiency prevails. The patent protection that is provided by South at this symmetric efficient position must be greater than that which prevails at the Nash equilibrium, but Northern IP protection at the symmetric point could be higher or lower than at the Nash equilibrium. Notice that the symmetric efficient point must lie to the right of North’s Nash equilibrium indifference curve and, thus, a move to this position would be welfare enhancing for North. Yet, the symmetric position may well be below South’s Nash equilibrium indifference curve as shown in figure 1. In such a case, a move from the Nash equilibrium to the symmetric efficient point would have a negative

Globalization and Intellectual Property

S380 R. Stephen Richardson and James D. Gaisford

impact on South’s welfare. Suppose that the level of patent protection that North offers at the symmetric efficient point happens to be less than or equal to that at the Nash equilibrium. This is a sufficient, but by no means necessary, condition for South to be worse off at the symmetric efficient point than at the Nash equilibrium. Of course even in cases where South is worse off, North could compensate South and still be better off from the move. Since the move to common world standards in the TRIPs Section of the Uruguay Round GATT agreement does not involve significant increases in intellectual property protection by the Developed Countries, it is very likely that the LDCs as a group will lose. A numerical simulation in Gaisford and Richardson (1994) suggests that the group of countries that comprise the South would lose for all plausible parameter values and that, for the most plausible parameter values, the South’s expected gains from innovation at the symmetric efficient position would be between 53% and 60% of the expected gains at the Nash equilibrium. These latter quantitative results may overstate the reduction in Southern benefits from innovation because the underlying analysis has overstated the difference in innovative capability between the North and the South and abstracted from possible producer-side gains from technology transfer and direct foreign investment. Nevertheless, the qualitative conclusion that Less Developed Countries as a group will tend to lose from the worldwide standards on intellectual property protection seems to be inescapable. It appears that the LDCs have traded off losses in the realm of intellectual property protection for gains elsewhere in the GATT agreement (The Economist 1993, p. 66). The trade liberalization and other benefits achieved under the Uruguay Round were probably too important for the Less Developed Countries to place at risk by holding out on IP protection. Whether the new TRIPs code will ultimately be effective remains to be seen. Enforcement of intellectual property rights in LDCs is likely to become an even more difficult and controversial matter because the symmetric agreement is not a Nash equilibrium. As LDCs increase the duration of IP protection to comply with the new, highly visible worldwide standards, there will be an incentive for them to put less effort into areas such as enforcement which are much more difficult to monitor.

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North and south disputes S3 81

NOTES The authors acknowledge helpful comments and suggestions from S. Bucovetsky, J. Church, T. Cottrell and T. Ross. The responsibility for any remaining problems lies with the authors.

REFERENCES Besen, S., and L.J. Raskind (1991) ‘An introduction to the law and economics of intellectual property.’ Journal o f Economic Perspectives 5 (1), 3-27 Costa, M. (1988) ‘A view from Brazil.’ In Intellectual Property Rights and Capital Formation in the Next D ecade, eds. C.E. Walker and M.A. Bloomfield (Lanham: University Press of America) Dhanjee, R., and L.B. de Chaournes (1990) ‘Trade related aspects of intellectual property rights (TRIPS): objectives, approaches and basic principles of the GATT and of intellectual property conventions.’ Journal o f World Trade 24, 5-15 Gaisford, J.D., and R.S. Richardson (1994) ‘North-South disputes over the protection of intellectual property.’ Discussion Paper #94-03, Department of Economics, University of Calgary, Calgary, Canada GATT (1992) 'The Dunkel D raft’ from the GATT Secretariat (Buffalo: William S. Hein and Co.) Government of Canada News Release (1989) No. 260, October 26 Nordhaus, W .D . (1969) Invention, Growth, and W elfare (Cambridge, MA: M .I.T. Press) Smith, M.B. (1988) ‘The Uruguay Round and the intellectual property agenda. ’ In Intellectual Property Rights and Capital Formation in the Next Decade, eds. C.E. Walker and M .A. Bloomfield (Lanham: University Press of America) Taylor, M.S. (1993) ‘TRIPs, trade, and technology transfer.’ Canadian Journal o f Economics 26 (3), 625-37 The Economist (1993) ‘For richer, for poorer.’ 329, December 18-24 (7842), 66 Wolfhard, E. (1991) ‘International trade in intellectual property: the emerging GATT regime.’ University o f Toronto Law Review 49, 106-51

[9] TRIPS—Natural Rights and a “Polite Form of Econom ic Imperialism** A. Samuel Oddi * A bstract

This Article discusses the current predominance of natural rights theory in the area of intellectual property and of patents in particular. Due to the alleged problems of international theft and pirating of patents, the recent GATT negotiations saw intellectual property law come to center stage in the debate over trade. These negotiations concluded that trade-related aspects of intellectual property law can no longer be left to the public policy of individual countries, but require new international minimum standards. The author discusses how the basic principles of natural rights theory have been used to convince the world community to move toward a universal world standard of intellectual property law. By using the concept of natural rights, all countries must thus recognize the natural property rights entitlement of the inventor. Thus, copying an invention is considered Tmmoral** by the community of nations and the rights of the inventor must be protected by positive law. However, the author notes that developing countries may not be as eager as developed nations to accept a natural rights premise. * Professor o f Law, Northern Illinois University College of Law. The author wishes to acknowledge the valuable research assistance provided by Kenneth Murray at the University o f California at Davis School of Law and Christine Takata at Northern Illinois University College o f Law. He also wishes to thank Sandra Braber-Grove, Computer Services and Research Librarian, Northern Illinois University College of Law, for her research efforts on this Article, as well as those in the past, and to wish her the best as she moves on to Vanderbilt University School o f Law. The title of this Article is based on a statement by J.H. Reichman. J.H. Reichman, Intellectual Property tn International Trade: Opportunities and Risks of a GATT Connection, 2 2 V a n d . J. T r a n s n a t ’l L. 7 4 7 , 8 1 3 (1 9 8 9 ) . Professor Reichman attributes this thought to Steven P. Ladas stating: “Imposition o f foreign legal standards on unwilling states in the name of ‘harmonization’ remains today what Ladas deemed it in 1 9 7 5 . namely, a polite form o f economic imperialism.” Id . (citing 1 S t e v e n P. L a d a s , P a t e n t s , T r a d e m a r k s , a n d R e l a t e d R ig h t s : N a t io n a l a n d I n t e r n a t io n a l P r o t e c t i o n 1 4 - 1 5 ( 1 9 7 5 ) ) .

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The author seeks to establish the premise that the patent portion of TRIPS implements a natural property rights theory of patents by closely analyzing different TRIPS provisions. Professor Oddi also discusses how patents and inventors will be treated under such a theory and the different provisions. He then attempts to justify TRIPS independent of natural rights by analyzing the relevant provisions according to various economic theories of patents. Professor Oddi suggests that economic theories do not clearly support the natural rights theory of TRIPS. He concludes the Article by determining the economic results of transforming patents to universal entitlements as natural rights by focusing on the different impacts of such a theory on developed and developing nations. The author also suggests various strategies for developing countries to cope with TRIPS. Finally, Professor Oddi questions whether implementing TRIPS is likely to provide the promised economic advantages to either developing or developed nations. Ta b l e o f c o n t e n t s I.

INTRODUCTION— THE REALPOL1TIK OF NATURAL PROPERTY RIGHTS.........................................................................

II. III.

Natural R ig h t s A s p e c t s o f P aten t TRIPS (NRAPTS) NRAPTS V e r s u s e c o n o m ic t h e o r i e s ................................ A. Patent-Induced Theory..........................................

B. C.

D.

IV.

V.

R en t D issipation T h e o r y .......................................

Race-to-Invent Theory......................................... Prospect Theory...................................................

E. Portable Fence T heo ry ................................................ F. S u m m a r y .................................................................. E con o m ic im pa c t a n d s t r a t e g ie s ....................................... A. Economic Im p a c t........................... B. S tra teg ies.................................................................. C o n c l u s io n .....................................................................................

417 426 440 441

445 448

450 452 454 455 455 461 469

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NATURAL RIGHTS

417

There is in all Ipeoplel a demand for the superlative, so much so that the poor devil who has no other way of reaching it attains it by getting drunk. It seems to me that this demand is at the bottom of the philosopher’s effort to prove that truth is absolute and of the jurist’s search for criteria o f universal validity which [the jurist] collects under the head o f natural law. Justice Holmes1 I heartily agree with the Court that ’fraud’ is bad, ’piracy’ is evil, and ‘stealing’ is reprehensible. But in this case . . . . Justice Black2

I. INTRODUCTION— THE REALPOLITIK OF NATURAL PROPERTY RIGHTS

As a school of jurisprudential thought, natural law surely is not at the forefront in the last throes of the twentieth century.3

Yet, in the sometimes scholastic world of intellectual property,4 and of patents in particular, as subsum ed into the often dog-eatdog world of international trade, natural rights, presumably derived from natural law, h as become the preeminent theory (even if in somewhat corrupted or disguised form).5 Principal

1. Oliver Wendell Holmes, Natural Law , 32 H a r v . L. R e v . 40 (1918). 2. Graver Tank & Mfg. Co. v. Linde Air Prods. Co., 339 U.S. 605, 612 (1950) (Black, J., dissenting). 3. “The natural-law tradition is not one that has generated much enthusiasm in the contemporaiy world outside o f Roman Catholic circles.” G e o r g e C. C h r is t ie , J u r is p r u d e n c e 78 (1973). As put b y Professor Cohen: To defend a doctrine o f natural rights today, requires either insensitivity to the world’s progress or else considerable courage in the face o f it. Whether all doctrines o f natural rights of Ihumanity] died with the French Revolution or were killed by historical learning o f the 19th century, everyone who enjoys the consciousness o f being enlightened knows that they are, and by rights ought to be. dead. The attempt to defend a doctrine of natural rights before historians and political scientists would be treated very much like an attempt to defend the belief in witchcraft. M.R. C o h e n , R e a s o n a n d N a t u r e 401 (1931), reprinted in P h ilip S h u c k m a n , C o h e n a n d C o h e n ’s R e a d in g s in J u r i s p r u d e n c e a n d L e g a l P h ilo s o p h y 565 (1979). M.R. Cohen is described as “(a U.S.] naturalist philosopher.” Id . at 81. 4. Dawson Chemical Co. v. Rohm & Haas Co., 448 U.S. 176, 188 (1980) (“lujnder the sometimes scholastic law o f patents . . . " ) . As stated by Justice Story in Folsom v. Marsh , 9 F. Cas. 342, 344 (C.C.D. Mass. 1841) (No. 4901), "Patents and copyrights approach nearer than any other class o f cases belonging to forensic discussions, to what may be called the metaphysics o f the law, where the distinctions are, or at least may be, very subtle and refined, and, sometimes, almost evanescent.” 5. It is true, for example, that the various natural-rights theories did find their roots in the natural-law tradition and it is true that those who, at various

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attention is given here to patents because of their perceived importance in international trade and the radical changes in the international patent system affected by TRIPS.6 Until TRIPS, the prevailing theory of patents, at both the national and international levels, seem ed to be essentially an instrumentalist form of “reward” theory.7 The state offers a reward in the form of a time-limited monopoly to induce inventors to invent. The underlying instrum entalist premise is that, without the inducem ent of the monopoly award, an inadequate number of inventions would be created, to the detriment of

times, have been opposed to legal, social, or economic change have often tried to support their positions by reference to a natural law. But, there is no necessary connection between what can legitimately be called the natural-law tradition and the natural-rights theories and certainly none between this tradition and political conservatism. C h r is t ie , supra note 3 , at 7 8 . “Those who invoke natural law for judicial creation of supra-constitutional rights can hardly insist that natural law is to be distinguished from natural rights.” Raoul Berger, Activist Censures of Robert Bork. 85 Nw. U. L. R e v . 993, 1020 (1991). See infra text accompanying notes 76-81 (discussing the rhetorical use and ambiguity in the Jurisprudential basis for TRIPS). 6. This Article will explore whether harmonization under the Trade Related Aspects of Intellectual Property Agreement (TRIPS) imposes the same form o f politeness. As used herein, “Patent TRIPS’*refers to Section 5 (Articles 2734). See Final Act Embodying the Results of the Uruguay Round o f Multilateral Trade Negotiations, Apr. 15, 1994 (hereinafter Final Act], reprinted In T h e R e s u l t s o f t h e U ru g u a y R o u n d o f M u lt i la t e r a l T ra d e N e g o tia tio n s — T h e L e g a l T e x ts 2 3 (GATT Secretariat ed., 1994) (hereinafter R e s u l t s o f t h e U r u g u a y R o u n d ];

Marrakesh Agreement Establishing the World Trade Organization, Apr. 15, 1994 (hereinafter WTO Agreement], Apr. 15, 1994, Annex 1C: Agreement on TradeRelated Aspects of Intellectual Property Rights (hereinafter TRIPS Agreement], reprinted in R e s u l t s o f t h e U r u g u a y R o u n d , supra , at 6-19, 365-403. For U.S. congressional approval, see Uruguay Round Agreements Act, Pub. L. No. 103465, §§ 101-103, 108 Stat. 4809 (1994) (hereinafter URAAJ (authorizing the President to accept the Uruguay Round Agreements and implement the WTO Agreement, but denying treaty status and domestic legal effect to the Uruguay Round Agreements as such, and excluding private actions under those agreements). 7. The instrumental form o f reward theory should be distinguished from a natural-law-based reward theory. For a consideration o f the latter form, see E d it h T i l t o n P e n r o s e . T h e E c o n o m ic s o f t h e I n t e r n a t i o n a l P a t e n t S y s te m 2 1 - 3 1 (1951); F r it z M a c h lu p , S e n a t e S u b c o m m . o n P a t e n t s , T r a d e m a r k s , a n d C o p y r ig h t s , 8 5 t h C o n g ., 2 d S e s s . . A n E c o n o m ic R e v ie w o f t h e P a t e n t S y s t e m 21 (Comm. Print 1958) (hereinafter M a c h lu p ]. The reward theory has also been applied as an economic theory. See W a r d S . B o w m a n , J r .. P a t e n t a n d A n t i t r u s t Law: A L e g a l a n d E c o n o m ic A p p r a is a l 15-32 (1973) and infra text accompanying

notes 50-65. The term “instrumentalist" is used herein in the broad sense, rather than being limited to a strict utilitarian sense. See A la n R yan, P r o p e r t y a n d P o l i t i c a l T h e o r y 7 (1984) (hereinafter R yan, P r o p e r t y & P o l i t i c a l T h e o r y ]. **|A] strict utilitarian would, in principle, though less certainly in practice, be relatively deaf to questions about justice or fairness.” Id. at 8.

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society.8 This general theory dates at least from the first general patent statute of the Venetian Republic in 1474: We have among u s Ipeoplej o f great genius, apt to invent and discover ingenious devices; and in view o f the grandeur and virtue o f our City, more such (peoplel come to us every day from divers parts. Now, if provision were made for the works and devices discovered by such persons, so that others who may see them could not build them and take the inventor’s honor away, more {peoplel would then apply their genius, would discover, and would build devices o f great utility and benefit to our Commonwealth.9

Accordingly, the reward of exclusivity is offered as the inducem ent to invent. There is, nonetheless, a hint of a “natural,*1 or at least a “personal,11 right in the idea that copiers would take away the “inventor’s honor.11 Monopolies, in general, fell upon hard tim es due to the ab uses of the Tudor kings in England.10 The Statute of

8.

Professor Turner questions both aspects o f the premise:

The basic rationale o f the patent system can be simply put. The economic case rests upon two propositions; first, that we should have more invention and innovation than our economic system would provide in the absence o f special inducement; and second, that the granting o f a statutory monopoly to inventors for a period o f years is the best method o f providing such special inducement. In addition to the economic case, there is a rather widespread view, which is essentially a moral argument,

that the creator or discoverer of new and useful knowledge is rightfully entitled to the economic value to society o f what he [or she] has done, and that it is and knowledge without appropriately rewarding the inventor. None of these propositions Is entirely free from doubt, and two of them—that the patent system is the best form o f inducement to more invention and innovation, and that it is morally well founded—are highly questionable.

unfair

inequitable for others to profit from the use of this

Donald F. Turner, The Patent System and Competitive Policy, 44 N.Y.U. L. R e v . 450, 450-51 (1959). See also Paul A. Davidf Intellectual Property Institutions and the Panda's Thumb: Patents, Copyrights, and Trade Secrets in Economic Theory and History , in O f f i c e o f I n t ’l A f f . N a t ’l R e s . C o u n c il, G l o b a l D im e n s io n s o f I n t e l l e c t u a l P r o p e r t y R i g h t s in S c i e n c e a n d T e c h n o l o g y 21 (Mitchel B. Wallerstein et al. eds., 1993) [hereinafter G l o b a l D im e n s io n s ] (raising the unanswered empirical questions o f whether the faster growth o f scientific and technological knowledge is always a “good thing” and whether the creation of socially needed inventions is responsive to economic incentives). 9. Giulio Mandich, Venetian Patents ( 1450-1550 ), 30 J. P a t . O f f . S o c ’y 166, 176-77 (1948) (translated by F.D. Prager from Giulio Mandich, Le Privative Industrlali Venezlane (1450-1550), 34 R iv o s t a d i D i r i t t o C o m m e r c ia ls 511 (1936)). 10. See 1 W illia m C. R o b in s o n , T h e L a w o f P a t e n t s § 6 (1890) (explaining Queen Elizabeth I’s use o f monopolies for personal and political reasons). By the end o f her reign, monopolists controlled the market for staples, such as, salt, iron, powder, vinegar, bottles, saltpeter, oil, starch, and paper, with corresponding monopolistic pricing. Id. See also 1 E r n e s t B a in b r id g e L ip sco m b

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Monopolies of 1623 barred monopolies solely from the “buying, selling, making, working or using of any thing within this realm /’11 However, patents for inventions, which were excluded, could be granted for fourteen years or less for the exclusive working or making of inventions within the realm .12 The need to exempt patents for inventions from the general prohibition of monopolies clearly undercuts any natural right of exclusivity for inventors in their inventions.13 Monopolies were hardly favorites of the United States Founding Fathers.14 Thomas Jefferson originally urged that the Bill of Rights proscribe monopolies, including limited monopolies.15 After the drafting of the Bill of Rights, however, Jefferson agreed that time-limited monopolies for literature and inventions would be desirable in a constitutional provision.16 Summarizing Jefferson’s views, the Supreme Court in Graham v. Jo h n Deere Co. stated: He rejected a natural rights theory in intellectual property rights and clearly recognized the social and economic rationale o f the patent system. The patent monopoly was not designed to secure to the inventors] . . . natural rightls] in Itheir) discoveries. Rather it was a reward, an inducement, to bring forth new knowledge.17

As finally ratified in the U.S. Constitution, Article 1, section 8, clause 8 grants Congress the power “to promote the progress of Science and the useful Arts, by securing for limited times to Authors and Inventors the exclusive right to their respective writings and discoveries.” As patents were to be granted for limited times in order to promote the “useful Arts,” there is no

III, L ip sco m b ’s W a lk e r o n P a t e n t s § 1 :2 (3d ed. 1 9 8 4 ) (describing early common law monopolies in England); Edward C. Walterscheid, To Promote the Progress of

Science and the Useful Arts: The Background and Origin o j the Intellectual Property Clause of the United States Constitution. 2 J . I n t e l l . P r o p . L. 1 ( 1 9 9 4 ) (discussing United States opposition to the English monopoly theory and practice). 11. An Act Concerning Monopolies and Dispensations o f Penal Laws, and the Forfeitures Thereof, 1623, 21 Jam. 1, ch. 3, § I (Eng.). 12. Id. § VI. 13. Indeed, patent monopolies were In derogation o f the common law, monopolies having been held illegal. See Darcy v. Allen (The Case o f Monopolies), 7 2 Eng. Rep. 8 3 0 (1 6 0 2 ) . See also R o b in s o n , supra note 1 0 , §§ 9 , 1 2 . 14. Graham v. John Deere Co., 383 U.S. 1, 7 (1965) (noting that Jefferson and other notable U.S. citizens abhorred monopolies). 15. Id. at 7-8. “[Tlhe benefit even o f limited monopolies is too doubtful to be opposed to that o f their general suppression.” V T h o m a s J e f f e r s o n , T h e W r it in g s o f T hom as J e f f e r s o n 47 (Paul Leicester Ford ed., 1895). 16. Jefferson moderated his views and approved o f monopolies for literature and inventions. Id. at 113. Jefferson made it clear that such a grant was in the nature of a privilege and not a natural right. Graham, 383 U.S. at 8 n.2. 17. 383 U.S. at 8-9.

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indication of an inventor’s natural right to a patent, but rather patents are to be granted a s a privilege according to congressional enactm ent for the indicated instrum entalist purpose.18 In the “age of enlightenm ent,” practically contemporaneous with the constitutional deliberations in the United States, a distinct theory of intellectual property rights w as evolving in France.19 With evident revolutionary zeal, intellectual creations were declared to be am ong the “rights of m an.”20 Indeed, the preamble of the French Patent Act 1791 provides: Every novel idea whose realization or development can become useful to society belongs primarily to [the person] who conceived, it would be a violation of the rights of [humanity] in their very essence if an industrial invention were not regarded as the property of its creator.21

Nonetheless, this “right of m an” as an “entitlem ent” of the inventor was time limited and carried with it a “natural duty” to work the invention in France in order to maintain its exclusivity.22 Moreover, it w as not only inventors who could share in this “natural right” but also those who imported an invention into France.23 In the nineteenth century, a number of countries enacted patent statutes, apparently based on an instrum entalist philosophy.24 Some anti-patent sentim ent, however, did arise

18. “Innovation, advancement and things which add to the sum of useful knowledge are inherent requisites in a patent system which by constitutional command must ‘promote the progress of . . . useful Arts/ This is the standard expressed in the Constitution and it may not be ignored.” Id. at 6. 19. “[WJhat we now see in the world, from the revolutions o f [the United States] and France, are a renovation o f the natural order o f things, a system of principles as universal as truth and the existence of Ihumanity], and combining moral with political happiness and national prosperity.” T h o m a s P a in e , R ig h t s o f M an 118(1987]. 20. D e c la r a t i o n o f t h e R i g h t s o f M an a n d C it iz e n , art. 11(1789), reprinted in R e t t R. L u d w ik o w sk i & W illia m F. F o x , J r ., T h e B e g in n in g o f t h e C o n s t i t u t i o n a l E r a 225 (1993). This article o f the Declaration was adopted by the National Assembly during the French Revolution on August 26, 1789, and reaffirmed by the Constitution of 1958. Id. 21. 2 Lois & Actes du Government (1790-91), reprinted in part and translated in Frank D. Prager, A History of Intellectual Property From 1545-1787. 26 J. Pat. O ff. S o c ’y. 711, 756-57 (1944) [hereinafter Lois & Actes). 22. Id. § 16 (working required within two years except for good reason). 23. Id. § 3 (“The first person to import a foreign discovery into France shall enjoy the same advantages as if [that person] were the inventor thereof.”). 24. See 1 S t e v e n P . L a d a s , P a t e n t s , T r a d e m a r k s , a n d R e l a t e d R ig h t s : N a t io n a l a n d I n t e r n a t io n a l P r o t e c t i o n 7 n.27 (1975) (listing countries adopting patent legislation during the 19th century).

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later in the century, primarily at the instance of econom ists.25 For example, the Netherlands repealed its patent statute in 1869 and did not reenact one until 1910, which hardly reflects any natural rights sentim ent.26 The end of the nineteenth century also saw the establishm ent of an international patent regime under the Paris Convention for the Protection of Industrial Property of 1883 (Paris Convention or Convention).27 This Convention adopted a minimalist approach im posing very few requirements on its members—the two basic ones being national treatment28 and a right of priority29 to encourage the early disclosure of foreign inventions. According to national treatment, the only requirement on a member of the Paris Union is that foreigners m ust be treated like nationals.30 Each member state is th u s free to establish the formal and substantive provisions of its dom estic patent regime, including protectable subject matter, conditions for protection, and scope and duration of protection.31 National treatment is the antithesis of a natural right. Can it be said that an inventor has a natural right to patent protection in one country yet that invention is free for the taking in another, while both are in full compliance with the Paris Convention? Do inventors of whatever nationality have an entitlem ent as a natural right in the country that protects, but none, not even a privilege, in nonprotecting countries? The closest the Paris Convention seem s to come to

25.

See Penrose, supra note 7, at 12-17 (1973) (discussing 19th century

patent controversy).

See generally Fritz Machlup & Edith Penrose, The Patent Controversy in the Nineteenth Century » 10 J. E c o n . H is t . 1 (1950). 26. P e n r o s e , supra note 7, at 15. It is interesting to note that neither the Netherlands nor Switzerland had patent statutes, while being original signatories and adherents to the Paris Convention for the Protection o f Industrial Property, Mar. 20, 1883, as last revised , July 14. 1967, 21 U.S.T. 1583, 828 U.N.T.S. 305 (hereinafter Paris Convention]. Even when Switzerland enacted a patent statute in 1888, it excluded processes. P e n r o s e , supra note 7, at 16, 123-24. See also * E r i c S c h i f f , I n d u s t r ia liz a t i o n W it h o u t N a t io n a l P a t e n t s (1971). 27. Paris Convention, supra note 26. 28. Jd. art 2. 29. Id. art. 4 (providing a priority period o f 12 months with respect to application for utility patents). 30. Id. art. 2 J 1 (“Nationals of any country o f the Union shall, as regards to the protection o f industrial property, enjoy in all the othercountries o f the Union the advantages that their respective laws now grant, or may hereafter grant, to nationals ."). 31. It should be noted that the Paris Convention does Impose some limitations on members with respect to requirements for grant of priority (art. 4); independence of patents (art. 46fs); grant o f compulsory licenses and forfeitures (art. 5). Id. arts. 4, 4bis, 5.

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any form of natural or personal right is the right to be named as inventor in the patent document itself.32 In sum, there seems very little that could reasonably be categorized as a natural right in intellectual property law,33 particularly with reference to patents at both the national and international levels, until this theory was introduced into the Uruguay Round of GATT in the late twentieth century.34 The political and economic motivations for TRIPS have been admirably documented elsewhere,35 but may be briefly

32. Article 4 ter o f the Paris Convention provides: “The inventor shall have the right to be mentioned as such in the patent." Id. art. 4fer. This provision, however, did not appear in the original 1883 version, being added at the London Conference in 1934. Moreover, the inventors can waive their rights, which undercuts any status even as a personal right. See G.H.C. B o d e n h a u s e n , G u i d e A pplication o f t h e P a r is C o n v e n t io n f o r t h e P r o t e c t io n o f In d u st r ia l P r o per ty 24 (1969).

to th e

33. If there is any long-lasting legal incident of the “rights of man" in intellectual property law, it would appear to be the continued adherence to “moral rights’*in copyright law. The United States, however, has shown little enthusiasm for such a doctrine, even after finally adhering in 1988 to the Berne Convention for the Protection o f Literary and Artistic Works o f Sept. 9, 1886, a s last revised July 24. 1971, 828 U.N.T.S. 221 (hereinafter Berne Conventionl. References herein will be to the Paris text. See Id. art. 6 bis (Moral Rightsj. See generally 2 M elville B. N im m er & D a v id N im m e r . N im m e r o n C o py r ig h t § 8D.02 (1995) (discussing moral rights under U.S. law). 34. See generally Final Act. supra note 6; T h e GATT U r u g u a y R o u n d : A N eg o t iating H istory Ch. 2 (1995) (discussing Trade Related Aspects o f Intellectual Property Rights) (hereinafter N egotiating H ist o r y ). 35. The literature is extensive. See generally N eg o t ia tin g H ist o r y , supra note 34 (overall negotiating background of the Uruguay Round). Two excellent symposia deal with the early history o f TRIPS: Symposium, Trade-Related Aspects

o f Intellectual Property: Intellectual Property Negotiations In the GATT Multilateral Framework , 22 V a n d . J. T r a n sn a t ’l L. 223-384 (Pt.I), 689-922 (Pt.II) (1989); see, in particular, R. Michael Gadbaw. Intellectual Property and International Trade: Merger or Marriage of Convenience?, 22 V a n d . J. T r a n sn a t ’l L. 223 (1989); Carlos Alberto Primo Braga, The Economics of Intellectual Property Rights and the GATT: A Viewfrom the South, 22 V a n d . J. T r a n sn a t 'l L. 243 (1989); Robert W. Kastenmeier & David Beier, International Trade and Intellectual Property: Promise, Risks, and Reality, 22 V a n d . J. T r a n sn a t ’l L. 285 (1989); Frederick M. Abbott, Protecting First World A ssets in the Third World: Intellectual Property Negotiations in the GATT Multilateral Framework, 22 V a n d . J. T r a n sn a t ’l L. 689 (1989); William M. Walker, Uruguay Round TRIPS: A Bibliographic Essay, 22 V a n d . J. T r a n sn a t ’l L. 911 (1989); J. H. Reichman, Intellectual Property in International Trade: Opportunities and Risks of a GATT Connection, 22 V a n d . J. T r a n sn a t ’l L. 747 (1989) (hereinafter Reichman, GATT Connection); GATT o r WIPO? N e w W a y s in t h e Internatio nal P r o t e c t io n o f Intellectual P r o p e r t y (Friedrich-Karl Beier & Gerhard Schricker

eds., 1989). For a European viewpoint, see Hans Peter Hunz-Hallstein, The U.S. Proposalfo r a GATT-Agreement on Intellectual Property and the Paris Convention fo r the Protection of Intellectual Property, 22 V a n d . J. T r a n sn a t ’l L. 265; Wolfgang Fikentscher, GATT Principles and Intellectual Property Protection, 22 V a n d . J. T r a n sn a t ’l L. 99 (1989); Hanns Ullrich, GATT: Industrial Property Protection, Fair

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summarized: Industry groups (lobbyists) in developed countries, particularly in the United States, found a receptive government ear to their plea that their intellectual property was being “counterfeited,” “pirated,” “stolen,” and “infringed” to their detriment and to the detriment of intellectual property-exporting countries by a generally bad lot in certain countries.36 Moreover,

Trade and Development, 22 V a n d . J. T r a n sn a t ’l L. 127 (1989).

See generally

G en e r a l A ccounting O f f ic e , In te r n a t io n a l T r a d e : S t r e n g t h e n in g W o r l d w id e P r o t e c t io n o f I ntellectual P r o p e r t y R ig h t s (1987) (h e r e in a fte r GAO R e p o r t ] ( d e s c r ib in g th e a d m in is tr a tio n ’s u s e o f m u ltila te r a l a n d b ila te r a l n e g o tia t io n s w ith r e s p e c t to “p r o b le m ” c o u n tr ie s ); U n it e d S t a t e s Inter n a t io n a l T r a d e C o m m is sio n , F o r e ig n P rotection o f In te ll ec tu a l P ro pe r t y R ig h t s a n d t h e E f f e c t o n U.S. I n d u s t r y a n d T r a d e (1988) ( s t u d y e s t im a t in g lo s s to U.S. in d u s t r ie s d u e to in a d e q u a t e in te lle c tu a l p r o p e r ty p r o te c tio n in fo r e ig n c o u n t r ie s ); E d w a r d S lavko Ya m b r u s ic , Tr a d e R e l a te d A p p r o a c h e s t o t h e P r o t e c t io n o f Intellectual P r o p e r t y (1992).

36.

See, e.g., GAO R e p o r t , supra n o t e 35, a t 9:

Intellectual property pirates are often in a better position than legitimate producers to satisfy demand in newly industrialized countries since they generally enjoy lower production costs. Because pirates merely copy products rather than developing their own, their design an d/or research and development costs are often minimal. They pay no royalties to those who originally developed the intellectual property. Advertising and market development costs are not key concerns as their markets are largely created for them by the efforts and at the expense o f companies selling authentic products. Moreover, because they copy only products with proven market success, pirates escape the cost o f developing products that turn out to be market failures.

See also Gadbaw, supra note 35, at 233: If these (intellectual] assets are as vulnerable to plunder as the slowmoving merchant ships o f the 1700s were to the Barbary pirates, the United States ability to trade with countries that harbor such pirates could be seriously hampered. Harm to United States interests is exacerbated when the pirates can turn around and exploit their bounty by reproducing it for sale in domestic and foreign markets as though it were their own, thereby further damaging the export potential o f United States industry. See also Clayton Yeutter, Negotiating Intellectual Property Rights Protection, in I ntellectual P ro perty R ig h t s a n d C apital F o rm at io n in t h e N ex t D e c a d e 109, 112 (Charles E. Walker & Mark A. Bloomfield eds., 1988): I f a n y c o u n try , w h e t h e r i t b e a d e v e lo p in g c o u n t r y o r a d e v e lo p e d c o u n tr y , h a s to d e p e n d u p o n t h e p ir a c y o f in t e lle c t u a l p r o p e r ty in o r d e r to h o ld d o w n c o n s u m e r c o s t s , w h e t h e r it b e fo o d o r d r u g s or w h a te v e r , th a t i s a n in d e f e n s ib le w a y to r u n a n y s o c ie t y . I d o n ’t s e e h o w a n y n a tio n in th e w o r ld c a n d e fe n d p ir a c y in t h e c o n t e x t o f p r e s e r v a tio n o f lo w c o n s u m e r

costs for food or drugs or anything else. So we need to deal with it w h e r e v e r th e p r o b le m m a y b e .

If a rhetorical question could be permitted with regard to Mr. Yeutter’s statement made while he was U.S. Trade Representative, would a country be justified in using slave, child, or prison labor to keep costs down as long as no “piracy*’ was

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they were able to convince their governments that anticounterfeiting measures on an international level were not enough. The real problem was that many of the countries that condemned such “illegal” conduct failed to provide adequate intellectual property protection.37 The World Intellectual Property Organization (WIPO), which presumably had jurisdiction over international intellectual property matters, was incapable or unwilling to deal with the problem of inadequate intellectual property protection.38 This inability was supposedly the result of the block power exerted by developing countries in WIPO and the tension between developed and developing countries, which had resulted in a stalemate in the revision of the Paris Convention over the past two decades.39 An anticounterfeiting code had been introduced at the end of the Tokyo Round of GATT negotiations, but it was not adopted.40 GATT provided a much more commodious venue for developed countries. They could use the leverage of trade and access to their markets against developing countries rather than merely dealing with the minutiae of intellectual property.41

involved? See also Reichman, GATT Connection, supra note 35, at 775-800 (discussing the broad and rhetorical use of “piracy” and “infringement”). 37. See, e.g., GAO R e p o r t , supra note 35, at 35: In its April 1986 policy statement, the administration outlined two proposals for GATT action: (1) complete and implement an “anticounterfeiting” code aimed at eliminating market access for imported goods that counterfeit or infringe trademarks and (2) conclude an enforceable agreement against trade distorting practices arising from inadequate protection o f intellectual property rights. 38. WIPO initially seemed to lack interest in the forum dispute and was evidently willing to concede jurisdiction to GATT. WIPO was reported as stating that “it has neither the funds nor the mandate from its members to consider the issue." GATT Expert Group Ready to Draft Report but Industrial Nations, LDCs Still Split 2 Int ’l T ra d e R e p . 934, 934 (1985). See also Monique L. Cordray, GATT v. WIPO. 76 J. Pat. & T r a d e m a r k O ff. Soc^y 121, 141 (1994). As summarized by

Professor Merges:

“From the perspective of those concerned with enhanced

protection, an increasingly lethargic and bureaucratized WIPO forced these issues into GATT, relevant or not." Robert P. Merges. Battle o f Lateralisms: Intellectual Property and Trade. 8 B .U . I nt ’l L .J . 239, 240 (1990). 39. See GAO R e p o r t , supra note 35, at 26 (developing countries wanted the authority to grant exclusive compulsory licenses, to permit forfeiture before granting compulsory licenses, and to grant compulsory license to forfeit within shorter time periods). 40. See N eg o tiating H ist o r y , supra note 34, at 2259-60. 41. See GAO R e p o r t , supra note 35, at 36-37. Greater progress may be attainable in GATT then in WIPO for two reasons. First, GATT has a more fluid mechanism for adopting new measures; the members of GATT have not formed voting blocs, largely because o f their

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Through this strategic maneuver of shifting from foundering WIPO to accommodating GATT, intellectual property somehow fundamentally acquired trade-related aspects.42 Furthermore, these newly discovered trade-related aspects were of such importance that they could not be left to the public policy of individual countries but had to be imposed as international minimum standards. Indeed, certain of these trade-related aspects directed to patents were deemed of such paramount importance that they seemed to have acquired natural rights aspects.43 This Article first seeks to establish the premise that the patent portion of TRIPS implements, in significant provisions, a natural property rights theory of patents. Next, in an attempt to determine if any or all of these theories justify such provisions independent of natural rights, the author will analyze these relevant provisions according to various economic theories of patents. Then, an attempt will be made to determine the economic impact effected by the transformation of patents from domestic privileges to universal entitlements as natural rights. Finally, some strategies will be suggested to deal with that impact, particularly with respect to developing countries and least developed countries (LDCs). II.

n atu ral r ig h t s a s p e c t s o f p a te n t

TRIPS (NRAPTS)

In contradistinction to being based upon positive law—constitutional or statutory—natural rights, being an entitlement of personhood or rationally following from higher

varying economic interests in the many aspects o f trade subject to GATT negotiation. Most GATT non-tariff barrier obligations are embodied in “codes" to which adherence is optional. . . . Second, GATT dispute settlement procedures, while viewed as needing considerable improvement, are generally considered better than those In WIPO. . . .

Id. (footnote omitted). 42. While always having relevance to international trade, intellectual property was now seen as transcending the territorial jurisdiction o f countries as a necessary aspect of trade relations among countries. 43. Such natural right aspects o f patent TRIPS will be identified and analyzed infra text accompanying notes 82-106. Both the instrumentalist and natural right theories are based on Western philosophy. It may be instructive to compare Eastern philosophy concerning intellectual creations. See, in particular. Professor Alford’s works: W illiam P . A l f o r d , T o S te a l a B o o k Is a n e l e g a n t O f f e n c e (1995), and William P. Alford, How Theory Does—and Does Not—Matter: American Approaches to Intellectual Property In E ast Asia. 13 UCLA Pa c . B a s in L.J. 8 (1994).

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principles, devolve from a higher source.44 In his famous book, The Rights of Man, Thomas Paine stated: Natural rights are those which always appertain to (human beings) in right of {their) existence. O f this kind are all the intellectual rights, rights of the mind, and also all those rights o f acting as individualls) o f (their) own comfort and happiness, which are not injurious to the rights o f others.45

Pervading any discussion of the nature or philosophy of property is the tension between property as an entitlement, a natural right, and property as a privilege or a creation of positive law serving instrumentalist goals.46 The tension is heightened when natural rights are extended beyond tangible property to intangibles, including ideas, inventions, or expression.47 Generally two lines of reasoning have been offered as naturalrights justifications for patents. One is the “first occupancy” thesis: The person who discovers or creates an invention should be entitled morally to its exclusive use.48 This appears to be the approach of the “rights of man” implemented in the French Patent Act of 1791.49 The other thesis is a “labor” justification for natural rights treatment. It is based on the principle that the person who expends labor in creating intellectual property—an invention—should be morally entitled to the fruits of that labor.50 This is a Lockean approach based upon the premise that labor is unpleasant, and those who engage in it deserve, in justice, to be rewarded.51 There is, however, an instrumentalist aspect to this

44. See A lan R y a n , P r o p e r t y 6 1 ( 1 9 8 7 ) (“The traditional theory of natural rights (insofar as it was one entity) characteristically derived individual rights from the law of God, or Nature or Reason.”). 45. P a in e , supra note 19, at 43. 46. See R yan , supra note 44, at 53. Professor Robinson consistently refers to the “patent privilege.” See 1 R o b i n s o n , supra note 10, §§ 11-44. 47. I n te lle c tu a l c r e a tio n s a r e d iffe r e n t fr o m ta n g ib le p r o p e r ty in t h a t t h e y a r e in e x h a u s t ib le a n d , in t h is s e n s e a r e “fr e e g o o d s .” In a d d itio n , t h e y a r e “p u b lic g o o d s ,” w h e r e u p o n d is c lo s u r e t h e y a r e s u b j e c t to u s e a n d r e p lic a tio n u n l e s s o t h e r w is e p r o te c te d . See G l o b a l D im e n s io n s , supra n o t e 8 , a t 2 4 - 2 8 ( d is c u s s i n g

the “public good” nature of information). See also Steven Cherensky, Comment, A Penny for Their Thoughts: Employee-lnventors, Preinvention Assignment Agreements, Property, and Personhood, 8 1 C a l. L. R e v . 5 9 5 , 6 2 7 - 2 8 , n . 1 4 7 ( 1 9 9 3 ) ( d is c u s s i n g v a r io u s p r o p e r ty t h e o r ie s o f p a t e n t s i n t h e c o n t e x t o f e m p lo y m e n t a g reem en ts). 48. Law re nce C . B e c k e r , P r o p e r t y R ig h t s P h il o so p h ic F o u n d a t io n s 2 4 - 3 0 (1 9 7 7 ) .

49. 50. 51. Peardon rights in

See Lots & Actes, supra note 21. B eck er , supra note 48, at 32-56. J ohn Lo c k e . T h e S e c o n d T r e a t ise o f G o v e r n m e n t 16-30 (Thomas P. ed., 1952). The other labor thesis of Locke is that, as one has property one’s body, a right would also extend to the product of that body’s labor.

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theory, in that society should want to provide rewards to induce individuals to engage in distasteful but socially beneficial labor.52 Either of these theories seems to justify a “natural right” in inventors to their own inventions.53 This scope of natural right in an invention is of a nonexclusive nature, and thus may be considered a “weak form” of natural right.54 Inventors would be entitled to maintain their inventions in secrecy or to exploit their inventions publicly, albeit in a nonexclusive manner, provided there is no preclusion by positive law.55 Even presuming the patent system should be abolished, this weak form of natural right would still persist.56 Extending the first occupancy or labor theories or a combination of them to grant to inventors exclusivity in their inventions, as a natural right, appears to require further justification. Exclusivity for inventions is obtained only by means of a positive law enactment creating a patent system, and then only by satisfying the formal and substantive conditions mandated by the system for the grant of a patent.57 The argument can be made that a patent statute merely codifies the

Id. See John Christman. Can Ownership Be Justified by Natural Rights, 15 P h il . & Pub. A ff. 156. 159-64 (1986) (discussing Locke’s labor theories). 52. At least to the extent that society is benefited by the labor as compared to being damaged (e.g.. by pollution or over-exploitation). 53. As stated by Professor Robinson: “In order, therefore, to retain exclusive ownership o f (thel idea, (the inventor] must withhold its material embodiment from observation: and as long as (the inventor] can do this, the invention is as truly his (or hers] by natural right as if it never had been thus externally expressed.” R o b in s o n , supra note 1 0 , at 3 8 (footnote omitted). 54. This usage as non-exclusivity being the “weak form” and "exclusivity” being the “strong form” is to be distinguished from Professor Christman’s usage. He considered the “strong sense” of natural right to be that which persons would possess in a state o f nature and the “weak sense” to be that not imposed by humanity. See Christman, supra note 51, at 157-58. 55. A primary form o f exclusion would be the grant o f a patent on the same invention to another. Other types o f supervening positive law provisions would include those for safety, environmental protection, etc. Nevertheless, inventors might even be able to enjoy the best o f both worlds by publicly exploiting inventions that are not self-disclosing of any trade secrets and that would require extensive reverse engineering to discover. 56. It may be argued that this weak form o f natural right protection of invention would in itself be adequate to create an adequate number o f inventions. Inventions would still, o f course, be made whether or not patents are available. Competition in the marketplace may provide an adequate incentive for providing a sufficient number o f inventions. See Infra text accompanying notes 108-22 (discussing the patent-induced theory). 57. Patent protection may be contrasted with copyrights where protection in the United States and most countries o f the world subsists by fixing an original work in a tangible medium o f expression. See 17 U.S.C. § 102(a) (1994). Moreover, as mandated by the Berne Convention, supra note 3 3 . art. 5(2), no fo r m a litie s m a y b e r e q u ir e d fo r s u c h p r o te c tio n .

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natural right of inventors in their inventions and, hence, recognizes that right in its “strong form,” entailing exclusivity.58 The argument then would run: as exclusivity is the essential attribute of property, treating inventions as property is the necessary natural right entitlement justified by bringing the invention to fruition.59 If, then, a patent system is based on natural rights theory, what should rationally follow as characteristics of such a system? A fundamental characteristic would appear to be universality, protecting all forms of inventions everywhere. Thus the system should protect all forms of inventions as broadly as possible within the full spectrum of ideas—from general to specific implementations.60 In theory, the subject matter of protection should be as expansive as possible so as not to exclude any inventive creation of the mind. Universality would also require that there should be no limitation as to the duration of exclusivity.61 If there is a natural property right to a patent, there would seem to be no justification

58.

Such could be said o f the French Patent Act o f 1791. See Lois & A ctes ,

supra note 21.

See also Y v e s P l a s s e r a u d & F r a n c o is S a v ig n o n . L’etat E t L’in v e n t io n : H istoire D e s B r e v e t s 46-48 (1986). The Supreme Court early identified the difference between the “weak" and the “stron g versions o f the right: “It is the fact that the patentee has invented or discovered something useful and thus has the common-law right to make, use, and vend i t . . . which induces the government to clothe Ithe patentee] with power to exclude everyone else from making, using, or vending it.” Crown Die & Tool Co. v. NYE Tool & Mach. Works, 261 U.S. 24, 36 (1923). This recognition, of course, does not ordain that the grant of a patent “naturally” follows from the “common law" right. 59. Compare the economic argument that so treating inventions results in efficiency, especially with respect to transferability and transaction costs. See R ic h a r d A . P o s n e r , E c o n o m ic A n a l y s is o f La w § 3.1 (4th ed. 1992) thereinafter P o s n e r , E conom ic A n a l y s is ] (“The creation o f exclusive rights is a necessary rather than a sufficient condition for the efficient use o f resources: The rights must be transferable.”). 60. Arthur Kuflik, Moral Foundations o f Intellectual Property Rights, in Owning Scientific and Technical Information 219, 225 (Vivian Weil & John W.

Snapper eds„ 1989) (“What is needed Is a coherent account of why, even though people have such a right, it applies only to certain products o f their mental activity—specific inventions, particular works o f authorship—rather than to all such mental products.”). 61. See Penrose, supra note 7, at 24 (footnote omitted) (“ll]f the patent grant is justified on p o u n d s of natural property, there is no more logical or moral justification for limiting in time than in space."}.

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for making it time limited except on instrumentalist grounds.62 Tangible property does not expire, although it may be expended.63 Another aspect of the universal nature of the right is that it should not be territorially limited because it does not arise from the positive law of a given sovereign but rather from a higher order.64 Moreover, the arbitrary happenstance of where the invention was created, the nationality of the inventor, or the countries where patent protection is available should not affect the recognition of the natural right.65 Finally, if the patent right is an entitlement, then the reward granted should be commensurate with the invention’s contribution.66 Exclusivity, as the principal incident of property, is expected to achieve this result.67 The failure of actual patent systems to satisfy these idealized characteristics of a natural-rights-based system has been the principle criticism of this theory. Actual patent systems are not universal. They are limited by territory, subject matter, and duration, among others.68 Finally, there seems to be little correlation between the contribution of an inventor and the reward to the patent owner.69

62. term). 63.

See infra note 106 (citing studies on the economic value of the patent

Seef e.g., Roscoe Pound. The Law o f Property and Recent Juristic Thought. 25 A B A . J. 993, 997 (1939): According to the civilians, property involves six rights: a ju s possldendl or right of possessing, a right in the strict sense; a ju s prohibendl or right o f excluding others, also a right in the strict sense; a ju s dlsponendl or right o f disposition, what we should now call a legal power; a Jus utendl or right o f using, what we should now call a liberty; a ju s Jruendl or right o f enjoying the fruits and profits; and a ju s abutendl or right o f destroying or injuring if one likes—the two last also what today we should call liberties. Article 1, § 8, cl. 8 o f the U.S. Constitution, o f course, imposes the requirement that copyrights and patents be time limited. 64. See Ryan, supra note 44. 65.A country could grant patents only to native-born citizens with respect only toinventions made within the country and exclude a wide variety of technology from protection. See Infra note 89 (citing the exclusions o f various categories of inventions).

66. 67.

See Kuflik, supra note 60, at 231-32. There are, of course, other inducements that may provide an adequate

number o f inventions at a lower cost to society [e.g., prizes, awards, subsidies).

But see Infra note 69. 68. In addition to novelty and utility (industrial application) requirements, inventions are subjected to a quality standard expressed in terms of nonobviousness or involving an inventive step. See Infra note 89 (quoting the patent TRIPS art. 27(1) requirements). 69. See Penrose, supra note 7, at 30-31 (“One man may spend his life developing a great idea for which society is not ready; another may perfect a bright idea in an evening for a clever gadget which society is willing to buy in large

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Aside from these criticisms is the difficulty of justifying a natural rights theory when there is an independent creation of the same invention*70 If a patent right is a natural right, how can it be appropriated exclusively by the first applicant or the first inventor to file, thus depriving other independent inventors of their natural rights?71 In addition, no invention is truly independent. All rely upon the past intellectual contributions forming the whole body of prior art. The concept of “standing on the shoulders of giants,”72 or even of “ordinary mechanics,”73 supplies a justification for a natural right to copy, at least in the “weak form” (f.e., unless proscribed by positive law}.74

quantities and pay millions o f dollars for."). In a generalized property context, see supra note 7 , at 9 1 (“Although utilitarianism is inhospitable to the concept o f desert, the fact that utilitarian accounts o f R yan, P r o p e r ty & P o l it ic a l T h e o r y ,

property rights so often invoke arguments about the incentive to labour makes it embarrassingly hard to overlook the way in which those who work hardest generally receive least."). Cf. G lo b a l Dimensions, supra note 8. at 3 2 (“{T]he avoidance of administrative arbitrariness in awarding prizes or granting subsidies for invention has been recognized as an advantage o f the patent system by economists since Adam Sm ith/). 70.

K uflik,

supra n o t e

60, at 226.

71. While it may be argued that awarding the patent to the first inventor is somewhat less arbitrary than awarding It to the one who wins the race to the patent office, it still does not resolve the contradiction of only one inventor’s winning the lottery o f the natural rights. 72. See R o b e r t K. M e r t o n , O n t h e S h o u l d e r s o f G ia n ts : A S h a n d e a n P o s t s c r i p t (1967) (considering the history o f the phrase, often attributed to Isaac Newton); see also Suzanne Scotchmer, Standing on the Shoulders of Giants: Cumulative Research and the Patent Law, 5 J . E c o n . P e r s p . 29 (1991). 73. In the context o f weeding out inventions worthy of patent protection from those unworthy, the U.S. Supreme Court stated in Graham v. John Deere Co., 383 U.S. 1, 11 (1965) (referring to Hotchkiss v. Greenwood , 52 U.S. (11 How.) 248 (1850)): “Hotchkiss by positing the condition that a patentable invention evidence more ingenuity and skill than that possessed by an ordinary mechanic acquainted with the business, merely distinguished between new and useful innovations that were capable o f sustaining a patent and those that were not." 74. Professor Robinson considers there to be a balance between natural rights and correlative natural duties: The natural right o f the public to appropriate all new ideas that may be voluntarily disclosed Is no less evident than that of the inventor to conceal them. It is a law o f nature that (people! should profit by the discoveries and inventions of each other. This is the law which binds society together, and in obedience to which lies all the possibility o f moral, intellectual, and material advancement. . . . To benefit by the discoveries o f [others! is thus not only a natural right, it is also the natural duty which every (person! owes to (the self] and to society; and the mutual, universal progress thence resulting is the fulfillment o f the earthly destiny o f the human race.

Robinson, supra note 10, at 39 (footnotes omitted).

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Whatever may be the merits or failings of the philosophical underpinnings of a natural rights theory of intellectual property and of patents in particular, this theory has had great rhetorical power in convincing the world community to sacrifice country-bycountry traditional instrumentalist control over intellectual property to a more universal world standard as dictated by TRIPS. While never quite articulated as such, natural rights theory is submitted to have played a major rhetorical role in the strategy of industry groups dominated by multinational corporations (MNCs) to convince their governments in developed countries to demand "adequate” protection of intellectual property in the GATT negotiating process.75 A basic rhetorical argument, based upon a natural law premise, is that "theft,” and "pirating” and "infringement” occur any time an invention patented anywhere in the world is copied anywhere else in the world, including in countries where that invention was not patented or even not patentable because of that country’s positive law.76 This line of argument illustrates that inventions should be considered as being universal and not territorially limited. Nonetheless, it is, of course, perfectly legal to replicate an invention that is in the public domain in a particular country.77 Moreover, such copying presumably should be

75. See Paul C. B. Liu, U.S. Industry's Influence on Intellectual Property Negotiations and Special 301 Actions, 13 UCLA P a c . B a s in L.J. 87 (1994). 76. See supra note 36. Even if a patent fails to claim a particular invention, this invention is dedicated to the public and is free for all to copy. If patent protection is assuaged in lieu of secrecy or there is a failure to file for whatever reason, with the loss o f secrecy, this invention also goes into the public domain and may be freely copied. The use o f this rhetorical argument may be seen by SmithKlIne Beecham’s complaint against the generic copying o f “Tagam er in various countries that did not protect pharmaceuticals. SmithKIine alleged a loss of $50 million because of such failure to protect in developing countries. See O f f ic e o f T e c h n o l o g y A s s e s s m e n t , I ntellectu al P ro per ty R ig h t s in a n A g e o f E le c tr o n ic s a n d In f o r m a t io n 229-30 (1986). See also . Allen S. Gutterman, The North-South Debate Regarding the Protection of Intellectual Property Rights, 28 W ake F o r e s t L. R e v . 89, 136 (1993) (discussing Thailand’s use of over 26 generic brands competing at prices as low as $0.35 per daily dose, as opposed to $1.68 daily for SmithKline’s “Tagamer). 77. A classic example v/ould be Deepsouth Packing Co. v. Laitram Corp., 406 U.S. 518 (1972), in which the Court held that it was not infringement in the United States to package parts o f a shrimp-deveining machine patented in the United States with instructions for assembling the machine and shipping the kit to Brazil, where it could be assembled within one hour. Id. at 532. There was no

infringement in Brazil because there was no Brazilian counterpart to the U.S. patent. Thus, the Brazilian purchaser was free to make and use the machine. Congress has closed this loophole so that the kit assembler in the United States would now be an infringer o f the U.S. patent. See 35 U.S.C. § 271(f) (1994). Nonetheless, there still would be no Infringement in Brazil by the user o f the invention unless a corresponding Brazilian patent existed. See also supra 76

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encouraged because of the economic efficiencies associated with free riding of this sort.78 Certainly, such copying is neither theft nor piracy nor even infringement in the legal sense. It is only through the rhetorical construct of natural property rights that inventions are to be protected universally and that the "immorality” of copying inventions becomes manifest. Copying an invention, wherever created and patented, becomes immoral because it is an incident of a natural property rights entitlement of the inventor (patent owner). All countries of the world must recognize this entitlement by means of its positive law, even though free copying might benefit particular countries. By accepting the natural rights premise, the basic philosophical tension between patents as a privilege or as an entitlement appears to be resolved in favor of the latter under patent TRIPS.79 Even though the rhetoric may be clear, the jurisprudential basis for TRIPS is not. For example, the preamble states: Desiring to reduce distortions and impediments to international trade, and taking into account the need to promote effective and adequate protection of intellectual property rights, and to ensure that measures and procedures to enforce intellectual property rights do not themselves become barriers to legitimate trade; . . .

Recognizing the underlying public policy objectives of national systems for the protection of intellectual property, including development and technological objectives;. . .89

While perhaps leaving something to be desired, even for international bureaucratic drafting, the message of the introductory “desiring” clause, that inadequate protection of (discussing the sale o f ‘Tagamet" in countries not granting patent protection on pharmaceuticals). 78. Bonlto Boats. Inc. v. Thunder Crafts Boats. Inc.. 489 U.S. 141. 146 (1989). is instructive on this point; “From their inception, the federal patent laws have embodied a careful balance between the need to promote innovation and the recognition that imitation and refinement through imitation are both necessary to invention itself and the very lifeblood o f a competitive economy." In countering the argument that the Florida statute only prohibited duplication o f boat hulls by means o f the "direct molding process," the Court stated; It is difficult to conceive o f a more effective method o f creating substantial property rights in an intellectual creation than to eliminate the most efficient method for its exploitation. Sears and Compco protect more than the right of the public to contemplate the abstract beauty o f an otherwise unprotected intellectual creation—they assure its efficient reduction to practice and sale in the market-place. Jd. at 164. 79. See supra note 6 (defining “patent TRIPS"). 80. TRIPS Agreement, supra note 6, pmbl. (emphasis added).

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intellectual property rights may somehow distort and impede international trade, appears to justify a universalist natural rights theory if the nexus is accepted. On the other hand, the "recognizing" clause acknowledges the instrumental goals of national intellectual property systems as including “development and technological objectives.” The objectives stated in Article 12 again imply at least a qualified instrumentalist view, but on a worldwide basis as opposed to the national basis in the preamble: The protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations.81

The qualification, seemingly a natural rights one, is that users of “technological knowledge” must also recognize their obligation to protect it. Two major provisions of patent TRIPS are submitted to represent primarily a natural rights philosophy, and are singled out for detailed analysis.82 These collectively will be called “natural rights aspects of patent TRIPS” (NRAPTS).83 These are Article 27 (Patentable Subject Matter) and Article 33 (Term of Protection). Article 27 provides: “Paragraph 1. Subject to the provisions of paragraph 2 and 3 below, patents shall be available for any inventions whether products or processes, in all fields of technology . . . .”84 Paragraph 2 generally permits the exclusion

81.

Jd. art. 12. Other provisions o f TRIPS may also be seen as having natural rights aspects. However, within the thesis o f this ArUcle. only two of the principal ones will be analyzed in detail. Other natural rights aspects o f TRIPS may be seen in the subject matter required to be protected (e.g., sound recordings (art. 14) (not mandatory under the Berne Convention), geographical indications (arts 22-23). industrial designs (arts. 25-26), semiconductor chip layout (arts. 35-38), trade secrets (art. 39)). TRIPS, supra note 6.

82.

83.

The qualification of natural rights by aspect is believed appropriate

because o f the ambiguous jurisprudential bases for TRIPS. 84. Subject to the provisions o f paragraphs 2 and 3 below, (adopted by the National Assembly during the French revolution on August 26, 1789, and reaffirmed by the Constitution o f 1958) patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, Involve an invenUve step and are capable of industrial application. Subject to paragraph 4 o f Article 65. paragraph 8 o f Article 70 and paragraph 3 o f this Article, patents shall be available and patent rights enjoyable without discrimination as to the place o f invention, the field of technology and whether products are imported or locally produced.

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from patentable subject matter inventions “necessary to protect ordre public or morality.”85 Paragraph 3 permits the exclusion of “diagnostic therapeutic and surgical methods for the treatment of humans or animals” and “plants and animals other than microorganisms, and essentially biological processes for the production of plants or animals other than non-biological and microbiological processes.”86 However, members are required to protect “patent varieties either by patents or by an effective sui generis system or by any combination thereof.”87 Aside from these limitations and the requirement that the invention fall within a field of “technology,” members are obligated to provide patent protection to “any inventions.”88 This statutory subject matter definition certainly goes well beyond that of many nations which exclude, inter alia, pharmaceuticals, food, and agricultural chemical products. These exclusions presumably are based upon instrumental public policy.89 Indeed, the scope of

Id. art. 27(1). 85. Members may exclude from patentability inventions, the prevention within their territory o f the commercial exploitation o f which is necessary to protect ordre public or morality, including to protect human, animal or plant life or health or to avoid serious prejudice to the environment, provided that such exclusion is not made merely because the exploitation is prohibited by domestic law.

Id. art 27(2). 86.

Members may also exclude from patentability:

(a) diagnostic, therapeutic and surgical methods for treatment o f humans or animals; (b) plants and animals other than microorganisms, and essentially biological processes for the production o f plants or animals * other than non-biological and microbiological processes. However, Members shall provide for the protection o f plant varieties either by patents or by an effective sui generis system or by any combination thereof. The provisions o f this sub-paragraph shall be reviewed four years after the entry into force o f the Agreement Establishing the MTO.

Id. art. 27(3). 87. Id. 88. Id. 89. See World Intellectual Property Organization, Existence Scope and Form o f Generally Internationally Accepted and Applied Standards/Norms for the Protection of Intellectual Property, W O/INF/29 Sept., 1988 GATT Document MTN. G N G /N G11/W /24/Rev. 1 [hereinafter WIPO Study). This study finds the

following among the principal exclusions: 49 countries exclude pharmaceutical products, 10 countries exclude pharmaceutical processes, 45 countries exclude animal varieties, 44 countries exclude plant varieties, 35 exclude food product, 32 countries exclude computer programs, and 22 countries exclude chemical products. See also N eg o t ia tin g H is t o r y , supra note 34, at 2273 (“Whereas the developed countries’ texts all supported negotiation o f a comprehensive agreement on [protection o f pharmaceuticals], the developing countries viewed

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subject matter of Article 27 may be broader than the “process, machine, manufacture or composition of matter,” which are categories of Section 101 of the U.S. Patent Statute.90 The broad mandatory subject matter definition of Article 27 more clearly implements a natural rights theory than an instrumentalist view. Historically, it is difficult to justify an instrumentalist view of Article 27, because most countries have had specific exclusions from patentability based upon perceived public policy. These countries, of course, could have been mistaken as to the merits of their public policy, which has now been clarified by the international community. However, a more plausible explanation might be that Article 27 implements natural rights theory to the effect that all inventions, including certain categories of inventions that have been traditionally excluded from protection by many countries, are now of such importance to international trade that they must be protected universally. Their value transcends perceived national instrumentalist self-interest, which now must yield to the natural rights entitlement.91 Patent TRIPS may even be seen as creating “supernatural” property rights in two particular classes of inventions, namely, pharmaceutical and agricultural chemical products. In Article 70, entitled “Protection of Existing Subject Matter,” paragraph 8 requires that all members “make available as a date of entry into the force of the Agreement Establishing the WTO patent protection for pharmaceutical and agricultural chemical products

intellectual property not as a property right, but rather as an instrument o f public policy."). 90. U.S. courts have found it difficult to fit computer programs into the process, machine, or manufacture categories. See , e.g., Gottschalk v. Benson, 409 U.S. 63 (1972); Parker v. Flook, 437 U.S. 584 (1978); Diamond v. Diehr, 450 U.S. 175 (1981). Relevant decisions o f the U.S. federal circuit courts include; In re Alappat, 33 F.3d 1526 (Fed. Cir. 1994) (machine). In re Schrader, 22 F.3d 290 (Fed. Cir. 1994) (process); In re Lowiy, 32 F.3d 1579 (Fed. Cir. 1994) (composition o f matter). 91. Nonetheless, there is jurisprudential ambiguity even within Article 27(1), which, after defining statutoiy subject matter, defines the substantive standard for protection mandated for all members; An invention to be patented must be “new. involve an inventive step and Ibe) capable o f industrial application. . . . " TRIPS, supra note 6, art. 27(1). Footnotes explain that “inventive step" may be interpreted as being synonymous with “non-obvious," and “capable of industrial application" with “useful." Id. The non-obvious standard indicates that some new and useful inventions are more meritorious than others. The usual rationale for this is an instrumentalist one, as articulated in Graham v. John Deere C o 383 U.S. 1, 11 (1966), that the non-obvious standard was devised to solve the “inherent problem [of] developling) some means o f weeding out those inventions which would not be disclosed or devised but for the inducement of a patent.” An entitlement view has no need to weed out inventions induced by a patent system, because protection is inherent as a natural right independent o f any patent system inducement.

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commensurate with its obligations under Article 27.”92 Those members, including developing countries and LDCs,93 that do not must: (1) provide a procedure for accepting applications with respect to such inventions, (2) examine such inventions according to the substantive standards of Article 27, and, moreover, (3) protect such inventions according to the duration set out in Article 33 94 With respect to all other categories of subject matter, developing countries and LDCs may delay the operation of Article 27 for various transitional periods.95

92. Where a Member does not make available as of the date o f entry into force of the Agreement Establishing the MTO patent protection for pharmaceutical and agricultural chemical products commensurate with its obligations under Article 27, that Member shall: (i) notwithstanding the provisions o f Part VI above, provide as from the date o f entry into force of the Agreement Establishing the MTO a means by which applications for patents for such inventions can be filed; (ii) apply to these applications, as o f the date o f application of this Agreement, the criteria for patentability as laid down in this Agreement as if those criteria were being applied on the date o f filing in that Member or, where priority is available and claimed, the priority date o f the application; (Ui) provide patent protection in accordance with this Agreement as from the grant o f the patent and for the remainder of the patent term, counted from the filing date in accordance with Article 33 of this Agreement, for those o f these applications that meet the criteria for protection referred to in sub-paragraph (ii) above. TRIPS, supra note 6. art. 70(8). 93. See Marco C.E.J. Bronckers, The Impact of TRIPS: Intellectual Property Protection In Developing Countries, 31 C o m m o n M k t . L. R e v . 1245, 1255 (1994) (listing 47 countries as LDCs). 94. See supra note 84 (quoting substantive requirements); see infra note 100 (quoting duration). 95. As summarized by Bronckers, supra note 93, at 1252: “The least developed countries are not obliged to apply the provisions of the TRIPS agreement in the first eleven years following the entry into force of the ’WTO." In the first Jive years following the entry into force of the WTO [other developing] countries are not obliged to apply the provisions o f the TRIPS agreement. This is to be compared with the one year transitional period for developed countries. . . . As for the pharmaceutical and agricultural chemical products, however, an exceptional regime has been established as described above. Id. at 1257-58. See also J.H. Reichman, Universal Minimum Standards of Intellectual Property Protection Under the TRIPS Component of the WTO Agreement 2 9 Int ’l Law . 345, 353 [hereinafter Reichman, Universal Minimum Standards ] (discussing transitional provisions o f TRIPS).

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In addition, under Article 70, paragraph 9, all members must provide so-called “pipeline” protection96 for pharmaceutical and agricultural chemical product inventions in the form of “exclusive marketing rights.”97 Such rights are to extend for five years starting from the date of market approval in that country or until a patent is granted or rejected, with the proviso that a patent has been granted in another member and that market approval has been obtained.98 The “existing rights” provisions of Article 70 thus make it clear that some inventions are more equal than others. Pharmaceutical and agricultural chemical product inventions presumably are of such importance that immediate protection must be implemented. Indeed, protection must be provided to such inventions even when they were created prior to their protectability under the positive law of certain members.99 Evidently, the GATT community concludes that there are some preexisting supernatural rights in pharmaceutical and agricultural chemical product inventions that all members are bound to protect, even though this was unrecognized in their positive law.

96. “The protection o f pharmaceuticals subject to a patent, but not yet developed or marketed is known as ’pipeline* protection.. . . The United States . . . proposed that the TRIPS agreement provide ’pipeline* protection for patented drugs which have not been marketed in foreign countries.” N eg o tiating H ist o r y , supra note 34, at 2286, 2298. See also Reichman, Universal Minimum Standards , supra note 95, at 353 (footnote omitted) (“Nevertheless, a pipeline provision, clarified at the last minute, safeguards existing pharmaceutical and agrochemical patents, which, if otherwise eligible, must obtain at least five years o f exclusive marketing rights even in those developing countries that did not previously grant patents in these fields.”). 97. Reichman, Universal Minimum Standards , supra note 95, at 353. 98. Where a product is the subject of a patent application in a Member in accordance with paragraph 8(i) above, exclusive marketing rights shall be granted, notwithstanding the provisions of Part VI above, for a period o f five years after obtaining market approval in that Member or until a product patent is granted or rejected in that Member, whichever period is shorter, provided that, subsequent to the entry into force of the Agreement Establishing the MTO, a patent application has been filed and a patent granted for that product in another Member and marketing approval obtained in such other Member. TRIPS, supra note 6, art. 70(9). 99. For example, an application for a pharmaceutical invention filed on a member protecting such inventions prior to entering into force o f the Agreement will be entitled to protection under Art. 70(8), in a member that did not provide such protection at the time o f the original filing, and must even give that application a priority date. It is not apparent when the priority date starts to

run—from the date of original filing, from its date of entry into the Agreement or otherwise.

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The second provision in patent TRIPS that is submitted to have a natural rights aspect is Article 33, mandating a uniform term for all patents of twenty years running from the filing date.100 Prior to the enactment of this provision, many nations, including the United States, had a different term of protection.101 Many countries had shorter terms with respect to all or with respect to particular classes of inventions.102 Thus, by virtue of this provision, individual members are excluded from establishing the term of protection on an instrumentalist basis according to the perceived value of a particular class of inventions. All classes of inventions are to be treated the same for the same period of time. Hence, by acquiring foreign patents, owners will be assured of a twenty-year term from the filing date in that country, and will be able to continue their monopoly position in foreign countries even after expiration of their patents in the originating country.103 This again would appear to be based on the natural rights theory that all inventions require a minimum duration as an entitlement, and that the term should be uniform irrespective of the perceived value of that class of invention to a given nation. Moreover, by extending the patent term, the value of the entitlement is accordingly increased.104 This extension will 100. The term of protection available shall not end before the expiration of a period of twenty years counted from the filing date.” TRIPS, supra note 6, art. 33 (footnote omitted). 101. The 17-year term from grant for U.S. patents began under the Patent Act o f 1861. This term superseded that o f the Patent Act o f 1836, which provided for a 14-year term from grant with the possibility of a 7-year renewal term. The first Patent Act of 1790 and that o f 1793 provided for a 14-year term from grant. See 1 P et e r D. R o s e n b e r g , P a t e n t La w F u n d a m e n t a l s § 1.07 (2d ed. 1995). 102. For example, 25 countries plus the African Intellectual Property Organization (OAPI) countries have shorter terms from the date o f filing; 15 start protection from the date o f grant. See WIPO Study, supra note 89. See also 2 J.W. B a xter et al .. W o r l d P a t e n t Law a n d P ra c t ic e §§ 6.00-6.01 (1992) (listing patent terms). 103. Patents in Commonwealth countries expired at the same date their United Kingdom counterparts expired. WIPO Study, supra note 89. Article 4bls o f the Paris Convention, supra note 26, requires: **(5) Patents obtained with the benefit of priority shall, in the various countries of the Union, have a duration equal to that which they would have, had they been applied for or granted without the benefit of priority.” This requirement has now been implemented in the United States under 35 U.S.C. § 154(a)(3) (1995). 104. The optimal term for a patent has been studied. See, e.g., Machlup,

supra note 7, at 66-73 (shortening or lengthening the duration of patents); W illiam D. N o r d h a u s , In v e n t io n , G r o w t h , a n d W e l fa r e 76-86 (1969) (the optional life of a patent); F.M. S c h e r e r , Inn o v a t io n a n d G r o w t h , 130-41 (1984) (theory o f optimal patent life); J.E.S. P a r k e r , T h e E c o n o m ic s o f I nno v a t io n 303-

06 (2d ed. 1978); C. Michael White, Why a Seventeen Year P atent 38 J. P a t . O f f . S oc ’y 839 (1956). See G lo b a l D im e n s io n s , supra note 8, at 36 (summarizing studies).

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provide a special bounty to owners of certain classes of inventions, particularly pharmaceuticals.105 In sum, the TRIPS provisions on statutory subject matter (Article 27) and mandatory term of patent protection (Article 33) are submitted to have significant natural right aspects. They provide universal subject matter protection for substantially all inventions and provide a uniform term of protection, irrespective of subject matter. This protection must be accorded by a member of GATT, regardless of its impact on social welfare in that country. According to a natural rights thesis, these rights are so important that individual member welfare should not stand in the way of their being protected as an entitlement of the creators. This invokes a counter-instrumentalist policy that members, regardless of their state of industrialization, should sacrifice their national interests in favor of the posited higher order of international trade.106 III. NRAPTS VERSUS ECONOMIC THEORIES While it may take a true believer to embrace a natural property rights justification for the significant benefits offered under patent TRIPS to patent owners in developed countries, nonetheless there may be other justifications, in particular economic ones, that would lead the world community, including developing countries and LDCs, to submit to such a regime under GATT. In this Section, the natural rights aspects of patent TRIPS, identified and discussed supra, will be evaluated in terms of economic theories that have been or may be advanced in justification of patent TRIPS.107

105. Harvey Bale, executive vice-president o f the Pharmaceutical Manufacturers Association, stated with regard to the effects of the absence of pipeline protection in the TRIPS Agreement: “If the Uruguay Round pact takes effect in 1993 and developing countries do not have to abide by its provisions until 2003, then drugs under development as late as 2013 could be pirated. . . .

Wefre talking about $100 billion in lost sales." See infra note 135 (indicating importance of patents to the pharmaceutical industiy based on 30-year review o f studies). 106. C f TRIPS, supra note 6, art. 7, which uses instrumentalist language “to the mutual advantage o f producers and users o f technological knowledge/ but makes clear that there should be a “balance o f rights and obligations/* which TRIPS then proceeds to define. 107. The author has been critical o f the claim that patent economic theories can predict the validity o f patents in actual cases. A. Samuel Oddi. Un-Un(fled

Economic Theories of Patents—The Not-Qulte~Holy GralL 7 1 N o t r e D a m e L. R e v . 267 (1996) [hereinafter Oddi, Un-Unified Economic Theories ). However, the author has concluded that such theories provide a valuable analyUc technique for evaluating the efficiency o f various provisions of patent law. Id. at 327. Several

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A. Patent-Induced Theory A basic premise of the patent-induced theory is that there would be a net benefit to society if patents were granted only to those inventions that were actually induced by the patent system .108 Thus, there should be a causal connection between the creation of an invention and the patent system {i.e., but for the patent system this invention would not have been created).109 There is little question that many inventions have been and would still be created without the incentive of a patent system.110 These so-called non-patent-induced inventions would be created, in any event, as a consequence of competitive market pressures.

economic models have been developed to study the effect o f patent rights on North-South trade. See J u d it h C . C h in & G e n e M. G r o s s m a n , Intellectu al P r o p e r t y R ights a n d N o r t h - S o u t h T r a d e (National Bureau o f Economic Research) Working Paper No. 2769, 1988) (finding the South benefiting from “pirating” and the North being harmed); I s h a c D iw an & D a n i R o d r ik . P a t e n t s , A p pr o pr ia t e Te c h n o l o g y a n d N o r t h -S o u t h T r a d e (The World Bank Working Paper No. 251, 1989) (implying that if the welfare of the South is preferred to that of the North, patent protection in the South need not be lower, but that increased protection in the South need not be beneficial to the North). Both studies include the caveat that it Is not clear whether the South should increase or decrease intellectual property protection. Compare Richard T. Rapp and Richard P. Rozek, Benefits and Costs of Intellectual Property Protection in Developing Countries. J. W o r l d T r a d e , O ct 1990, at 75 (concluding that benefits in the form o f investment and technology transfer exceed costs in developing countries) with Edwin Mansfield,

Unauthorized Use of Intellectual Property: Effects on Investment, Technology Transjer, and Innovation, in G lo b a l D im e n s io n s , supra note 8. at 140 (finding no statistically significant correlation between the perceived strength of a given country’s intellectual property protection and direct investment by U.S. firms in the late 1980s and 1990s). 108. See F.M . S c h e r e r , In d u st r ia l M a r k et S t r u c t u r e a n d e c o n o m ic P e r fo r m a n c e (2d ed. 1980) (hereinafter S c h e r e r , In d u s t r ia l ]; Douglas F . Greer, The Case Against Patent System s in Less-Developed Countries, 8 J. Int ’l L. & E c o n . 223 (1973); Alfred E. Kahn, The Role of Patents, in C o m p e t it io n , C a r t e l s a n d T h e ir Regulation 308 (John P. Miller ed., 1962); A. Samuel Oddi, Beyond Obviousness: Invention Protection in the Twenty-First Century, 38 Am. U. L. Rev. 1097, 1101-02, 1114-16 (1989) [hereinafter Oddi, Beyond Obviousness1; A. Samuel Oddi. An Uneasier Case fo r Copyright Than fo r Patent Protection o f Computer Programs, 72 Neb. L. Rev. 351 (1993) [hereinafter Oddi, Uneasier Case); A. Samuel Oddi, The International Patent System and Third World Development.* Reality or Myth? 1987 D u k e L.J. 831 (1987) [hereinafter Oddi, International Patent System]. 109. “Induced” is used in a broad sense with the understanding that the patent system may induce inventions at various stages in the developmental process—from the conception stage through the improvement (commercialization) stage, as well as by providing an alternative to protection by secrecy. See Oddi, Uneasier Case, supra note 108, at 374-75. 110. Few would doubt the maternity of many inventions. See J o h n B a r t let t , Familiar Q u o t a t io n s 134 (Emily M. Beck ed., 15th ed. 1980) (Anonymous: Latin—mater artlum necessitas).

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The market often provides an adequate incentive for their creation in the forms of the competitive advantages associated with headstart, market recognition, and learning curve advantage,111 There are, nonetheless, certain types of inventions that, in theory, depend significantly upon the existence of the inducement of the patent system. The most important type of patent-induced invention has been identified as a “revolutionary” invention by Professor Scherer. He defines these inventions as those producing revolutionary changes in consumption or production.112 This type of invention generally has an indeterminable benefit-to-cost ratio, normally requires considerable developmental investment, and has a significant risk of failure.113

111. See S c h e r e r , In d u s t r ia l , supra note 108, at 443-48. See also Oddi, Beyond Obviousness, supra note 108, at 1114-16. Perhaps a classic example o f high benefit-to-cost inventions would be the plow covered by the 798 patent invalidated in Graham v. John Deere Co.. 383 U.S. 1 (1966). This was supposedly an Improvement patent over the plow covered by the 811 patent. In actuality, the 798 patent was a defensive patent never marketed by Graham, but used to exclude competitors. See Oddi, Un-Unlfled Economic Theories, supra note 107, at 314-16 (discussing the history o f these patents). In the context o f Identifying nonobvious inventions, the court in Graham stated that: “The inherent problem was to develop some means o f weeding out those inventions which would not be disclosed or devised but for the Inducement o f a patent.** 383 U.S. at 11. Obvious inventions did not need the inducement; they would become available in any event In the context of providing patent-like protection, the U.S. Supreme Court in Bonlto Boats . Inc. v. Thunder Craft Boats , Inc.. 489 U.S. 141, 151 (1989) stated: “State law protection for techniques and designs whose disclosure has already been induced by market rewards may conflict with the veiy purpose o f the patent laws by decreasing the range o f ideas available as the building blocks o f further

innovation.* 112. It is conceivable that without a patent system certain spectacular technical contributions—those effecting a genuine revolution in production or consumption patterns—might be lost or (more plausibly) seriously delayed because their support lends itself poorly to rational benefit/cost calculation. Such innovations may lie off the beaten paths o f industrial technology, where no firm or group of companies has a natural advantage; and the innovator may be forced to develop completely new marketing channels and production facilities to exploit them. They may entail greater technological and market uncertainties, higher development costs, and longer inception-to-commercialization lags than the vast bulk of all industrial innovation.

supra note 108, at 448. Examples would include: the airplane, antibiotics, instant photography, lasers, sulfonamids, synthetic textiles, telegraph, telephone, television, tranquilizers, transistors, and xerography. See S c h e r e r , In d u st r ia l ,

S h erm an Gee, Te c h n o l o g y Tr a nsfer, In n o v a t io n , and Internatio nal C o m p e t it iv e n e ss 161 (1981); U n it e d S t a t e s P a t e n t O f f ic e , R evo l u tio n a r y Id e a s , P a t e n t s & P r o g r e s s in A m e r ic a (1976). 113. S c h er e r , I n d u s t r ia l supra note 108, at 448. Scherer identifies

another category of inventions that are dependent on the patent system having a

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On the other hand, many Inventions commonly have a high benefit-to-cost ratio by virtue of being improvements in existing product lines of a given enterprise.114 Because the product already has a market and a distribution system, there is a relatively high likelihood of success for any improvement. These types of high benefit-to-eost inventions are likely to be far less dependent on the patent system and may be identified as nonpatent- or market-induced, their primary inducement being the market itself. Hence, granting a patent tends to be costly because the public would, in any event, have received them free of the patent monopoly.115 According to the patent-induced theory, a patent system is justified if the ratio of patent-induced to non­ patent-induced inventions is at least high enough to insure a net benefit to society.116 One may then ask the question: what impact will the imposition of universal statutory subject matter and duration requirement have on the ratio of patent-induced to non-patentinduced inventions on a worldwide basis? First, it is clear that there will be a significantly greater incentive offered to invention producers. The inducement to invent has been augmented by the number of additional countries who now protect previously unprotected subject matter for an extended term. One must then address a series of follow-up questions. Is the incentive offered by the marginal addition of further countries necessary for the creation of particular inventions? Will this marginal increase in incentive result in, at least, a marginally equivalent additional investment in research and development for the creation of inventions that would not otherwise have come

low benefit-to-cost ratio. These would include detail inventions in a crowded market where there would be little incentive to create them but for the possibility o f patent protection, albeit narrow protection. Scherer conclu des that society benefits little from their creation. Id. 114. Id. at 443-48. 115. Id. X16. [EJxcept when innovators’ profits come largely from cannibalization o f the profits that would otherwise be enjoyed by the producers o f substitute products, it is likely that society as a whole (i.e., including both consumers and producers) gains from inventions and innovations induced or hastened b y the grant o f patent rights. Id. at 443 (emphasis added); see also Greer, supra note 108, at 224 (“Nevertheless, it can be formally demonstrated that the economic benefits o f such inventions (in the form o f production cost savings or new product consumption utilities) always exceed those social costs to yield a net social benefit.”); Kahn, supra note 108, at 311 (“So long as the innovation would not have been forthcoming without the patent, this social cost must always be less than the benefit; but o f course the converse is equally true.”).

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into being? Will any additional inventions so created be of the type dependent upon the patent system, and, in particular, will more revolutionary inventions be created? While it is difficult to measure, there seems to be little evidence that there was a dearth of inventions prior to the adoption of patent TRIPS.117 The primary problem that TRIPS was intended to solve appears to be that inventions, once created, were being copied in countries that did not provide adequate intellectual property protection.118 Indeed, with the incentives provided by the patent systems of the United States, the European Union, and Japan, it may be difficult to ascertain what additional incentives would be necessary in order to produce revolutionary inventions, let alone improvement inventions.119 While some increased investment in inventions may be anticipated with certain large market countries now providing patent protection previously unavailable,120 it is difficult to conclude that the addition of any other countries on a marginal basis will provide a proportional increase in invention creation. To the contrary, providing protection in marginal countries is likely to reduce the net benefit in those countries whose patent systems had nothing to do with the inducement for creation of those inventions. Without protection for such non-patentinduced inventions, those countries, of course, could freely copy. With respect to those countries that had no inducing power in the creation of the invention, one can hardly say that they are “free riders” because there was no causal connection between the created invention and their patent system. To the contrary, this may be seen as “free loading” by the patent owners who derive the primary economic benefit from the import monopoly in these

117. The rhetorical argument is that more would be invested in research and development (R&D) if the investment could be protected. But even assuming increased investment, it does not logically follow that this investment was necessaiy to create an adequate number of inventions, especially societally beneficial ones. 118. See supra note 37. 119. By definition revolutionary inventions would have worldwide impact. Commercialization o f these inventions will begin in developed countries and then trickle down to developing countries. 120. Obvious examples would be countries with large populations, such as: China (1.16 billion—1992), India (846 million— 1991), Indonesia (188 million— 1993), Brazil (146 million--1991), Pakistan (119 million— 1992), Bangladesh (119 million— 1993), and Nigeria (89 million— 1991). See T h e S t a t e sm a n 's Y ea r bo o k (Brian Hunter ed., 131st ed. 1994-95). The problem with such markets, however, is the low GNP per capita: China ($370— 1991), India ($330— 1991). Indonesia ($620— 1992), Bangladesh ($220— 1991), Pakistan ($400— 1991), Nigeria ($290— 1991)—compared to a GNP per capita in the United States o f $22,560 in 1991; however, note Brazil had a $2,680 GNP per capita in 1991. Id.

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marginal countries.121 The patent systems of such countries provide no needed incentive to invent, but protection is offered as a boon in order to remain a member in good standing of GATT. These arrangements force the marginal countries to pay for something that they otherwise would have received for free but for patent TRIPS, presuming they have the technological ability to replicate such inventions created in the developed world.122 In sum, it is difficult to conclude that the ratio of patentinduced to non-patent-induced inventions will increase under patent TRIPS. Moreover, it is also difficult to conclude that there will be an increase in invention creation proportional to the increase of market protection for a given subject matter for a longer term. B. Rent Dissipation Theory Society may be seen as benefiting from receiving an invention in excess of its development costs, and the inventor should be compensated by a “rent” in the form of a patent monopoly.123 The amount of the rent would be the difference between what society is willing to pay for the invention and the development costs.124 By evoking the rent by means of a patent monopoly, free riders are barred from copying and the incentive to invest in development is protected.125 However, according to rent dissipation theory as posited by Professor Grady and Mr. Alexander, the incentive provided by the patent system may result

121. This is clear in those cases where, even though patent protection was available, the owner o f the invention failed to avail itself o f that protection in a given country. It is even clearer when a particular country does not provide protection on certain subject matters and investment is made toward creating an invention in the unprotected subject matter category. 122. Without patent protection in these marginal countries, even without the technological ability to replicate, there would be no import monopoly and presumably the invention would be available at more competitive pricing. 123. See Mark F. Grady & Jay I. Alexander, Patent Law and Rent Dissipation, 78 V a . L. R e v . 305 (1992); Kevin Rhodes, Comment, The Federal Circuits Patent Non-Obviousness Standards : Theoretical Perspectives on Recent Doctrinal Changes, 85 Nw. U . L. R e v . 1051 (1991). Judge Posner defines “rentseeking” as “the incentive to overproduce goods that promise a return greater than the cost of production (that is, an economic ‘rent*), and to the resulting waste when rents are transformed, through competition to obtain them, into costs.” R ic h a r d A. P o s n e r , La w a n d Lit e r a t u r e 342 (1988); P o s n e r , E c o n o m ic A n a l y s is , supra note 59, at 37-38 (analyzing the costs of such behavior). See generally , T o w a r d a T heory o f t h e R e n t - S e e k in g S ociety (James M. Buchanan et a l. eds., 1980). 124. Grady & Alexander, supra note 123, at 308. 125. Id.

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in rent dissipation, imposing societal costs.126 They identify three forms of rent dissipation. The first form is at the conception stage, where multiple independent inventors may he investing in the development of the same invention.127 The second form is at the improvement stage, where a basic invention may induce others to over-invesl in improving that invention.128 The third stage that may result in excess rent dissipation is the over­ investment in maintaining the invention in secrecy.129 The basic question thus faced under the rent dissipation theory is whether mandating universal subject matter and duration protection results in diminished or increased rent dissipation. At the conception stage, an increase in rent dissipation can be anticipated primarily because of the greatly increased incentive to win the patent “lottery,” compared to being limited to individual countries with varying degrees of protection. Hence, uniformity would add to the incentive for enterprises throughout the world (especially the developed world) to invest in the hopes of obtaining essentially a world patent monopoly.130 Increased rent dissipation may also be anticipated at the improvement stage. Again, this would be based on the premise that there would be a greater incentive to invest in improving inventions if worldwide protection could be obtained on the improvements. This may be a particularly strong incentive in an evolving world market.131 Grady and Alexander maintain that rent dissipation may be minimized by precluding broad protection on fundamental inventions because they, by definition, cannot be improved upon. Therefore, it would be highly rent dissipating to provide the incentive to create such inventions.132 On the contrary, detail inventions, which indicate they may be improved (f.e., “signal” improvements), should be protected so that others would be discouraged from trying to improve such inventions and thereby dissipate resources.133 126. Id. at 306-09. The rent dissipation theoiy as postulated by Grady and Alexander is critiqued in Donald L. Martin, Reducing Anticipated Rewards from Innovation Through Patents: Or Less Is More. 78 Va. L. Rev. 351 (1992); and in Robert P. Merges, Rent Control in the Patent District Observations on the GradyAlexander Thesis. 78 VA. L. Rev. 359, 376-77 (1992). 127. Grady 8c Alexander, supra note 123, at 306-07. 128. Id. at 308. 129. Id. at 308-09, 318. 130. For example, the countries that previously excluded such categories of pharmaceuticals and food products are now forced into the combined incentive pool. 131. This may be especially true where local conditions may lead to various improvements, for example, preference’due to local customs, available materials, standardization, etc. 132. Grady & Alexander, supra note 123, at 321. 133. Id. at 320.

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Of course, there is no indication that fundamental or basic inventions would be treated less favorably in the various countries (especially in developed countries) after TRIPS than would any other inventions.134 Indeed, with respect to pharmaceutical inventions, which receive special status in TRIPS and tend to be of a broad fundamental nature, a great incentive will be offered to competing enterprises to invest in the creation of such inventions.135 Whether or not there will be excessive dissipation at the improvement stage will depend upon the scope of protection given to patents in each country. The broader the scope, the less incentive to make improvements on that patent. However, if narrow scope is provided, such as in Japan (compared with the United States), then it may be assumed that there will be an increased incentive to find improvements.136 With universal subject matter protection for a common duration, certain countries may find it in their self-interest to provide a narrow scope of inventions in order to permit the local improvement of

134. See Oddi, Un-Unifled Economic Theories . supra note 107, at 290-95, 303-05 (illustrating eases where broad protection was provided). 135. In sharp contrast to the situation pertaining in most other industries and the electronics field in particular, the patent grant often confers significant benefit to innovators in the pharmaceutical field. My discussions with patent attorneys working for pharmaceutical firms brought out two likely reasons for this situation. First, unusually strong patents are obtainable in the chemical field, of which pharmaceuticals is a part. Second, it is often difficult to invent around a pharmaceutical patent. Pharmaceutical patents can be unusually strong because one may patent an actual molecule found to have useful medical properties and its analogs. One need not make each analog claimed but can simply refer to lists o f recognized functional equivalents for each component of the molecule at issu e.. . . Many pharmaceutical patents are difficult to invent around today because the mechanisms by which pharmaceuticals achieve their medical effects are often not well understood. E ric v o n H ippel , T h e S o u r c e s o f I n n o v a t io n 53 (1988).

136.

In Japan, once a patent application disclosing a basic invention is

published as required by Japanese patent law, it is common practice for Japanese competitors immediately to begin to develop improvement inventions and file numerous patent applications circumscribing the basic invention with improvements. See G e n e r a l A c c o u n t in g O f f ic e , I nte ll ectu al P ro perty R ig h t s , U .S . C o m pa n ie s ’ P a t e n t E x p e r ie n c e s in J apan 49-50 GAO/GGD-93-126 (1993) (surveying experience o f 360 U.S. firms with the Japanese patent system) (hereinafter GAO R e p o r t -J a p a n ). A major complaint o f U.S. companies with Japanese patent practices is the narrow scope o f protection granted to basic inventions. Id. at 3, 48-49.

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fundamental inventions and, in addition, to protect those improvements. In sum, it is far from apparent that rent dissipation will be less prevalent under TRIPS than under a country-by-country system. At least with respect to rent dissipation due to excessive investment in maintaining inventions in secrecy, some lessening of dissipation may be expected if Section 7 (Protection of Undisclosed Information) is fully implemented, requiring members to provide trade secret protection.137 Nonetheless, this provision would apply only if there is a transfer of trade secrets into the country. With the expansion of protection under patent TRIPS, invention owners will be more likely to rely on patent protection than on trade secret protection, and any savings in rent dissipation is likely to be overridden by increased dissipation at the conception and improvement stages.138 C. Race-to-Invent Theory The “race-to-invent” theory posits that “faster is better” with respect to the creation of inventions.139 The rationale for this theory, developed by Professors Merges and Nelson, is that economic well-being increases with productivity, productivity increases with the number of inventions, and the number of inventions increases with research and development

137.

TRIPS, supra note 6, art. 39(2) provides:

Natural and legal persons shall have the possibility of preventing information lawfully within their control from being disclosed to, acquired by, or used by others without their consent in a manner contraiy to honest commercial practices so long as such information: — is secret in the sense that it is not, as a body or in the precise configuration and assembly o f its components, generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question; — has commercial value because it is secret; and — has been subject to reasonable steps under the circumstances, by the person lawfully in control o f the information, to keep it secret. 138.

As stated in Kewanee Oil Co. v. Blcron Corp., 416 U.S. 470, 490 (1974):

Where patent law acts as a barrier, trade secret law functions relatively as a sieve. The possibility that an inventor who believes his lor her] invention meets the standards o f patentability will sit back, rely on trade secret law, and after one year o f use forfeit any right to patent protection, 35 U.S.C. 8 102(b), Is remote indeed. 139. Robert P. Merges & Richard R. Nelson, On the Complex Economics of Patent Scope, 90 C o l u m . L. R e v . 839, 878 (1990) (“Our argument rests on a simple premise: when It comes to invention and innovation, faster is better/); see also Robert P. Merges, Commercial Success and Patent Standards: Economic Perspectives on Innovation, 76 C a l . L. R e v . 803 (1988).

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expenditures. Accordingly, the faster inventions are created, the greater the economic benefit to society.140 As a corollary to this, Merges and Nelson, on the basis of empirical studies, conclude that technological development has often been retarded when broad patent protection has been obtained in certain industries.141 Thus, they conclude that a relatively narrow scope of protection would be preferable, even for fundamental inventions, so that there will be a race-to-improve upon these inventions toward the end of increasing productivity.142 In contrast, if broad control were provided by the means of patents, this would tend to retard the evolution of a particular technology. If a broad scope of protection within a given industry and a given country retards technological development in that country, it would logically follow that this retardation would, in all likelihood, increase if uniform worldwide subject matter and duration protection were provided. Thus, industries acquiring broad, worldwide patent protection would have limited incentive for rapid improvement and would proceed to exploit current inventions. Concomitantly, competitors (domestic and foreign) would have limited incentive to improve these patented inventions if such broad control were provided on a worldwide basis. The antidote to this consequence would be to limit the scope of patent protection. This, however, is hardly a likely outcome, particularly in highly industrialized countries, with the possible exception of Japan.143 With particular reference to TRIPS, Professor Merges concludes that it may not be in the economic interest of all countries to adopt a strong system of intellectual property protection. “It is difficult in practice to determine which countries would actually benefit from strengthened intellectual property r ig h ts .

B u t c le a rly , a m o n o lith ic ‘s tr o n g e r r i g h t s ’ a p p r o a c h w ill

not work. Unless enough country-by-country flexibility can be built into a multilateral framework, bilateralism may be the best solution.”144 Patent TRIPS imposes a contrary solution.

140. Merges & Nelson, supra note 139, at 878. 141. Id. at 877, 884-908 (analyzing electrical lighting industry, automobiles and airplanes, radio, semiconductors and computers, chemical industries and science-based industries). 142. Id. at 876. 143. See supra note 136. 144. Merges, supra note 38, at 246.

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D. Prospect Theory The prospect theory of patents, developed by Professor Kitch, provides an economic rationale for an essentially natural rights treatment of patents.145 A prospect is defined as “a particular opportunity to develop a known technological possibility.”148 Thus, Kitch maintains that patent rights should be treated as any other property right, and patent owners should be able to provide broad coordinating power over the future developments of their inventions. Treating patents as property minimizes transaction costs, eliminates the need for secrecy, and provides notice to potential copiers.147 Kitch argues that providing such broad coordinating power will not result in the underutilization of the inventions because of the availability of competing inventions, which will result in a net societal benefit.148 Accordingly, if broad coordinating power is desirable within a given country’s patent system, the extension of this coordinating power on a global basis would produce even more desirable economic results. Therefore, it is not surprising that the prospect theory offers a theoretical economic basis for patent TRIPS beyond a pure natural rights theory. Moreover, Professor Kitch, contrary to conventional wisdom that developing countries would submit to TRIPS in order to obtain the trade advantages of GATT, recently concluded that it would be in the self-interest of developing countries themselves to participate.149 Hitch’s first argument is based upon the realization that the information disclosed in the patent is not adequate to enable the working of patented inventions in developing countries.150 The rationale for this argument appears to be that a strong patent system is needed to attract technologically sophisticated employers. These employers would need to have access to

145. Edmund W. Kitch, The Nature and Function of the Patent System . 20 J. L. & E c o n . 265, 265 (1977) [hereinafter Kitch, Nature & Functions1; see also Edmund W. Kitch, Patents: Monopolies or Property Rights . 8 R e s . L. & E c o n . 31 (1986). 146. Kitch, Nature & Functions* supra note 145, at 266. 147. Id. at 276-80. 148. Id. at 274. 149. See Edmund W. Kitch, The Patent Policy o f Developing Countries♦ 13 UCLA P a c . B a s in L.J. 166, 167 (1994) [hereinafter Kitch, Patent Policy] (“A conventional answer would be that [developing countries) Join the international intellectual property system in order to gain other trading advantages from the developed world."); se e also Richard T. Rapp & Richard P. Rozek, Benefits and Costs of Intellectual Property Protection in Developing Countries , 24 J. W o r l d T r a d e 75, 102 (1990) (concluding that protecting intellectual property should be a public policy goal o f developing countries). 150. Kitch, Patent Policy* supra note 149, at 173-75.

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technically trained employees, the ability to restrict these employees from transferring this technology to other employers, and the ability to market their products in other markets.151 As technological information resides in the hands of patentowning enterprises in developed countries, this argument assumes that these patent owners are willing to transfer the necessary technology to enable the patent to be worked in a particular country. This assumption may hold occasionally, but it is hardly universal that technology owners have an economic interest in providing the wherewithal to produce an invention in a given country. In most instances, the primary motive of patent owners would seem to be to preserve the import market by means of patents. They would agree to the transfer of technology for the local working of that invention only when it was to their economic advantage, principally in terms of obtaining comparative advantage by local production.152 Indeed, patent TRIPS has weakened the grounds of the grant of compulsory licenses, as will be discussed infra.153 Hitch’s second argument is based upon the realization that the technological sophistication available in developed countries may not be suitable for developing countries.154 Thus, developing countries need technology that is adaptable to their particular needs. The argument continues that, with a patent system, an incentive would be provided to local enterprises to develop technology suitable for the particular industrialized level of their country.155 The assumptions of this argument are that there is sufficient infrastructure to determine what is technologically needed and that enterprises in developed countries have an incentive to provide basic information to accommodate the relatively unsophisticated industrial needs of a particular country. As the owners of technology are more likely to be interested in maintaining an import monopoly in a given country, transfer would occur only in those instances where it would be to their economic interest to transfer technology at whatever level of sophistication. The third argument is that developing countries should be able to pay for patent rights because “poor countries will inevitably pay proportionately less than wealthy countries for the

151.

Id. at 171-76.

152.

For example, cheap labor, available raw materials, geographical

location, local market size, etc. 153. See Infra text accompanying notes 171-75. 154. Kitch, Patent Policy, supra note 149, at 176-77. 155. Id. at 177.

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use of patent rights.”156 Again, the assumption is that patent owners are willing to license enterprises in developing countries. Does “proportionality” mean in proportion to the absolute value paid in developed countries or, perhaps, upon the ratio of gross domestic product or some other proportional scale? In any event, with the admission that developing countries require know-how in addition to patent rights, one would expect that developing countries would pay proportionally more, as they require more than a mere naked patent license, which may be all that is needed in an industrialized country.157 In sum, these arguments apparently depend upon the assumption of a willingness on the part of patent and technology owners to transfer the necessary technology to developing countries in order to enable enterprises in developing countries to work the patented inventions. Such an assumption may run contraiy to normal assumptions concerning the economic behavior of patent and technology owners. E. Portable Fence Theory Professor Reichman postulates that international law should establish for intellectual creations a “surrogate form of ownership by instituting a fictitious system of portable fences.”158 Such a portable fence would bar the replication of an intellectual creation of another while permitting the transfer of ideas from one mind to another.159 He argues that, in light of the current economic

156. Id. 157. It is, at least, the anecdotal impression o f the author, while engaged in licensing patents and know-how for multinational corporations to enterprises in developing countries, that this was the expectation. 158. Reichman, GATT Connection, supra note 35, at 803. Professor Reichman has written extensively on the GATT negotiations concerning intellectual property. See generally , Reichman, Universal Minimum Standards . supra note 95; J.H. Reichman, The TRIPS Component o f the GATT's Uruguay

Round: Competitive Prospects f o r Intellectual Property Owners in an Integrated World Market 4 F o r d h a m In te ll . P r o p . M e d ia & E n t . L.J. 171, 173-78, 254-66 (1993); J.H. Reichman, Beyond the Historical Lines of Demarcation: Competition Law, Intellectual Property Rights and International Trade After the GATT’s Uruguay Round , 20 B rook . J. In t ’l L. 75 (1993); J.H. R e ic h m a n , Im plication s o f t h e D raft TRIPS A g r ee m ent f o r D e v e l o p in g C o u n t r ie s a s C o m p e t it o r s in a n In t e g r a t e d W o r l d M arket (United Nations Conference on Trade and Development Discussion

Paper No. 73,1993). 159.

Reichman, GATT Connection, supra note 35, at 803.

The costs of the patent system include (besides inducing potentially excessive investment in inventing) driving a wedge between price and marginal cost . . . . Once an invention is made, its costs are sunk; in economic terms, they are zero. Hence a price that includes a royalty to the inventor will exceed the opportunity cost of the product in which the

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necessity to innovate, any historical differences between tangible property and intellectual property are anachronistic. This conclusion, he urges, does not result “from an appeal to natural justice,” but rather “from refined economic analysis.”160 The next step in Reichman’s logic is to posit that the portable fence against replication of intellectual products does not stop at the boundaries of the given country but follows that product wherever it goes.161 Because the tangible property of aliens is protected under international law from confiscation, he reasons by analogy that intangible intellectual property, which often is much more valuable, should be similarly protected against such expropriation. “To pretend that aliens have no legal claims arising from wholesale, unauthorized uses of their most valuable property while respecting laws that protect less valuable alien property only because it is tangible rather than intangible is to exalt form over substance.”162 While Professor Reichman’s arguments are ingenious, they contain that element of circularity that is inherent when addressing the philosophical foundations of property, and, in particular, whether a right of property inheres in intangible intellectual creations. This is the paradox of value: does property have inherent value as a natural right entitlement, or is it only valuable because society has decided to protect it, presumably on utilitarian or instrumentalist grounds?163 If the fence vanishes once an intellectual creation leaves the domestic jurisdiction of the fence-erecting country, so goes its value. In essence, this portable fence would appear to be an aspect of an entitlement arising from natural rights, so its value must be recognized even

invention is embodied. This wedge, however, is analytically the sam e as the cost of a fence to demarcate a property right in land; it is an indispensable cost o f using the property rights system to allocate resources. P o s n e r , E co no m ic A n a l y s is , supra note 59, at 39-40 (emphasis added). The imposition o f the cost o f a “portable fence” raises the question o f whether there is sufficient incentive to invent without portability. 160. Reichman, GATT Convention , supra note 35, at 806. 161. id. at 806-811. 162. Id. at 810-11. 163. This is well put by Professor Penrose:

The more widely a good can be used, the greater, surely, is its total usefulness and to limit its use is to limit its usefulness although this may at the same time give it an economic value. This is, o f course, a restatement of the famous paradox o f value, but so far as inventions are concerned a price is put on them not because they are scarce but in order to make them scarce to those who want to use them. Penr ose,

supra n o te 7 , a t 2 2 .

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though to do so may be to the economic disadvantage of a particular country (I.e., be noninstrumentalist). It is, of course, more efficient for a particular nation to permit the replication of intellectual creations of foreigners (free ride) than it is to pay rents for the purchase of the imported “patented” product in addition to being excluded by the fence from replicating it.164 In short, it would seem that the portable fence theory, requiring the acceptance of a universal system of patent protection, is founded on the premise (a priori) that an inadequate number of intellectual products would be created without such a worldwide incentive. Nonetheless, it is far from clear that inadequate incentives were being provided when each country could determine its own national policy for protection or that universal protection is better adapted to optimize social welfare on a global scale, let alone at the national level.166 F. Summary The foregoing analysis, even if somewhat speculative, does not lead to the clear conclusion that the identified natural right aspects of patent TRIPS can be justified on any of the economicsbased theories. The patent-induced and rent-dissipation theories lead to contrary conclusions, primarily because of the over­ incentive being provided by a uniform global system. The race-toinvent theory does not support these natural rights aspects because of the likelihood of retardation in the development of given technologies due to centralized control on a worldwide basis. The prospect theory is the antithesis of the race-to-invent theory, but it depends upon the premise that broad coordinating power in the hands of patent owners would achieve efficient results, not only on the domestic level but also at the global level. While it may be admitted that intangible intellectual creations may be more “valuable” than tangible property, this does not resolve the issue of whether that value (the portable fence) results because it is created by the sovereign as a privilege or results as a natural right entitlement. Indeed, it may be asked whether the fundamental purpose of an international system based on a natural property right theory is to induce inventions or to prevent the replication of inventions.

164. The patent owner may elect to exploit the patent solely by importation or may collect royalties by licensing domestic enterprises, whichever presumably optimizes profits. 165. See supra note 8.

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ECONOMIC IMPACT AND STRATEGIES

A. Economic Impact The big winners under patent TRIPS would clearly be those enterprises (read multinational corporations) in developed countries that create inventions and are heavily engaged in international trade. Particular winners would be those entities in the pharmaceutical and agricultural chemical industries that receive “supernatural" property rights under patent TRIPS. The benefits are clear: patent protection is now mandated for fields of technology’ that were previously unprotected in many countries, and the duration of protection is set at twenty years from the filing date compared to significantly shorter periods, even when that subject matter was protected. Again to the advantage of such enterprises in developed countries is that under Article 6 of TRIPS the “exhaustion of intellectual property rights” is retained within the domestic jurisdiction of the respective members.166 Such a retention appears inconsistent with a natural rights theory. Under natural rights, the invention itself is theorized as being ubiquitous and hence entitled to protection everywhere by its nature. For purposes of logical consistency within a natural property rights theory, it should follow that, once an invention is placed in commerce (“first sale”) by the patent owner or with the owner’s authorization, this should “exhaust” any patent rights anywhere in the world and the product may freely cross national borders.167 After all, it is a primary goal of the GATT to enhance free trade.168

166. “For the purposes o f dispute [resolution] under this Agreement, subject to the provisions o f Articles 3 Inational treatment] and 4 [most-favorednation treatment] above, nothing in this Agreement shall be used to address the issue o f the exhaustion o f intellectual property rights.” TRIPS, supra note 6, art. 6. 167. The United States imposes essentially a territorial exhaustion doctrine. See 4 D o nald S. C h is u m , P a t e n t s § 16.03(2} (1995) (U.S. application o f the “firstsale” doctrine); id. § 16.05(3) (U.S. application o f exhaustion doctrine with respect to imported products). Compare the European community, which imposes an essentially community-wide exhaustion doctrine. More extensive rights recognised [sic] by national legislation or case-law on the exercise of patents or trademarks (or analogous rights) such as the right to object to the importation o f goods which have been marketed in another Member State by or with the consent o f the patentee or trade mark owner, are not saved by the terms o f the first sentence o f Article 36 EEC. In these circumstances the rights are said to have been exhausted.

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While all members must provide a broad subject matter protection for a long uniform term for all inventions, according to Article 6,169 individual members may adopt a very restrictive exhaustion policy to exclude importation of patented inventions legitimately made in other member states with the authorization of the patent owner.170 This retention of the exhaustion doctrine within the domestic jurisdiction of members provides significant trade advantages to patent owners. They may control production and optionally exploit their patents domestically. In other countries where patent protection has been obtained, they may maintain an import monopoly or may exploit that market by licensing. Yet, under the domestic exhaustion rule of the producing countries, the patent owner or licensee can restrict access to its domestic market and hence avoid any adverse competition that may arise from comparative advantages of foreign authorized production. Patent TRIPS, furthermore, weakens the ability of members to use compulsory licenses in order to insure local working of inventions when those inventions are only being exploited in their country by importation. In Article 31, restrictions are added beyond those provided in Article 5A of the Paris Convention,171

P.J.G. Kapteyn & P. V e r l o r e n V a n T h em a a t , In t r o d u c t io n t o E u r o p e a n C om m unities 399 (Laurence W. Gormley ed., 2d ed.

the

Law

of the

1989). See also Bronckers, supra note 93, at 1268) (discussing worldwide exhaustion and

concluding “I submit that it would be simply wrong for the developed countries to blame a developing country for choosing a broad exhaustion doctrine/). 168. The preamble o f the original GATT Agreement o f 1947 provides: “Being desirous of contributing to these objecUves by entering into reciprocal and mutually advantageous arrangements directed to the substantial reduction of tariffs and other barriers to trade and to the elimination o f discriminatory treatment in international commerce.” General Agreement on Tariffs and Trade, opened fo r signature. Oct. 30, 1947, 61 Stat. A3, 55 U.N.T.S. 194, 196 [hereinafter GATT]. 169. TRIPS, supra note 6, art. 6. 170. Id. 171. A.—(1) The importation by the patentee into the country where the patent has been granted o f articles manufactured In any o f the countries of the Union shall not entail forfeiture of the patent. (2) Each country o f the Union shall have the right to take legislative measures providing for the grant of compulsory licenses to prevent the abuses which might result from the exclusive rights conferred by the patent, for example, failure to work. (3) Forfeiture o f the patent shall not be prescribed except in cases where the grant o f compulsory licenses would not have been sufficient to prevent such abuses. No proceeding for the forfeiture or revocation o f a patent may be instituted before the expiration o f two years from the grant o f the first compulsory license. (4) A compulsory license may not be applied for on the ground o f failure to work or insufficient working before the expiration of a period o f four years from the date o f filing o f the patent application or three years

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including the requirement that an effort be made to obtain a license from the patent owner prior to seeking a compulsory license.172 Also, the compulsory license may only be granted for a limited scope and duration and for an authorized purpose.173 Indeed, for semiconductor technology, a compulsory license may only be obtained for public noncommercial uses or to remedy an anticompetitive practice.174 Thus, it would appear that semiconductor technology is excluded from any local working requirement except on these two grounds. Semiconductor technology may not rise to the “supernatural” rights status of pharmaceuticals and agricultural chemicals, but the technology does receive super-immunity from compulsory licenses. Moreover, any compulsory license granted must be “predominantly for the supply of the domestic market.”175 Thus, compulsory licensees would be precluded from achieving economies of scale by exporting, even to countries where the patent owner has not obtained analogous patent protection. A final benefit to patent-owning enterprises is the requirement in TRIPS that members implement various domestic remedies with respect to violations of intellectual property rights.176 In addition, procedures are provided within the World Trade Organization (WTO) for dispute resolution concerning whether members are in compliance with the mandates of TRIPS.177 Presumably, developed countries also will be beneficiaries under the “trickle down” effect from patent-owning enterprises having primary industrial bases within such countries. Again, from the date of the grant of the patent, whichever period last expires; it shall be refused if the patentee justifies his (or her] inaction by legitimate reasons. Such a compulsory license shall be non-exclusive and shall not be transferable, even in the form o f the grant o f a sub-license, except with that part of the enterprise or goodwill which exploits such license. (5) The foregoing provisions shall be applicable, mutatis mutandis . to utility models.

Paris Convention, supra note 26, art. 5(A). 172. 173. 174. 175. 176. 177. applicable

TRIPS, supra note 6, at art. 31(b). Id. art. 31(c). Id. Id. art. 31(0. Id. arts. 41-61. Id. art. 64 (making the provisions of Articles XXII and XXIII of GATT to disputes under TRIPS); see generally Paul Edward Geller, Intellectual Property In the Global Marketplace: Impact o j TRIPS Dispute Settlements?. 29 In t 'l Law 99 (1995); Robert E. Huder, Dispute Settlement In C o m plet in g t h e U r u g u a y R o u n d : A R e su l t s -O r ie n t e d A ppr o a c h t o t h e GATT t r a d e N eg o t ia tio n s 180 (Jeffrey J. Schutt ed., 1990) (discussing shortcomings of dispute resolution mechanisms).

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presumably, these enterprises will increase investment in research and development, thereby increasing the number of inventions and hence the productivity to the benefit of these countries and the economic and social well-being of their nationals. Nonetheless, the economic theories discussed above cast some doubt over the significance of any welfare gains to be achieved by any increased investment in creating inventions.178 While it seems likely that there will be some increased investment in research and development (R&D), there may also be significant profit taking with only marginal increases in R&D expenditures.179 Indeed, it would be surprising if the increases in R&D would be proportional to the added incentives provided by a worldwide market with universal subject matter and duration protection. In sum, one should remain agnostic concerning the long-term benefits accruing to developed countries from the implementation of patent TRIPS. There may, and probably will, be short-term advantages to multinational corporations operating out of developed countries, provided TRIPS is fully implemented and enforced. At first blush, the biggest losers under patent TRIPS would appear to be the so-called newly industrialized countries (NICs), which, after all, were the basic target of TRIPS.180 Enterprises within these countries availed themselves of foreign technology, had the industrial capability of replicating it, and were evidently competing effectively with the creators of this technology.181 If

178. See supra text accompanying notes 107-65. 179. This would appear to he the economic consequence o f a switch from an instrumental view o f providing an incentive to create to an entitlement view o f reaping the rewards o f creation by excluding others. 180. NICs or newly industrializing economies (NIEs) are defined by Primo Braga as follows: NIEs are defined here as those developing economies that by 1989 had an

income per capita of at least U.S. $2,000, a share of manufacturing in gross national product o f at least 30 percent, and exports o f manufactured products accounting for more than 40 percent o f total export revenues. Brazil, Hong Kong, Malaysia, Mexico, Singapore, the Republic of Korea, and Taiwan qualify as NIEs according to these criteria. Carlos Alberto Primo Braga, The Newly Industrializing Economies. In G lobal supra note 8, at 168-69. 181. See Robert E. Evenson, Global Intellectual Property Rights Issues in Perspective: A Concluding Panel Discussion . in G lo bal D im e n s io n s supra note 8. at 360-63. Professor Evenson divides developing countries into stages. Stage 1 countries are essentially the least developed countries. Stage 2 countries are more industrially advanced and range from those that have a “mastery o f conventional technology” to those that are in transition to being NICs and those on the “threshold o f technological competitiveness.” Evenson, supra, tbl. 16-1; se e also Braga, supra note 180, at 169 (“It is also worth mentioning that all o f D im e n s io n s ,

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the governments of the NICs fully implement patent TRIPS, it should follow that this type of copying will be retarded within the limits of enforcement. This would force enterprises operating within these countries either to develop their own technology or to seek licenses from the patent owners. The course of acquiring licenses may, in the short term, be the preferred one, provided that patent owners are amenable to granting licenses.182 As these countries have made significant technological progress in a very short period of time, it would seem that enterprises within NICs will shortly have the capability of producing their own technology, with the advantage of its particular adaptability to their state of industrialization. Thus, over the long run, a worldwide patent system, by protecting technology that may be more readily usable domestically and transferable to other countries in the Third World, may be to the advantage of the NICs. It is difficult to perceive what benefits will accrue to developing countries, in particular LDCs, by the implementation of patent TRIPS, unless the implementation results in the increased transfer of technology to these countries. Increasing patent protection without the concomitant development of an industrial infrastructure with technological capability would not advance whatever instrumental goals TRIPS espouses with respect to third world countries.183 It is unlikely that the “security interest” of patent protection will necessarily result in the transfer of technology.184 Moreover, by the uniform subject matter and duration requirement, LDCs must compete for transfer of technology on grounds other than the extent of patent protection provided. In addition, the primary model for developing countries and particularly LDCs redounding under patent TRIPS would appear to be that of consumers. The

them were exporting more than U.S. $3 billion per year of knowledge-intensive products by the end o f the 1980s.").

182. This may, in certain circum stances, p re se n t significant advantages to p a te n t owners over relying u p o n the im port monopoly or trying to enforce their patents in a foreign forum. Enterprises in NICs may also soon be in a position to license or cross license their own patents. See J. Davidson Frame, National

Commitment to Intellectual Property Protection: An Empirical Investigation, 2 J.L. & Tech . 209, 216 (1987) (indicating th a t U.S. p a ten ts were being acquired by enterprises in NICs). 183. See supra text accompanying note 80 (quoting preamble o f TRIPS). 184. Mansfield, supra note 107, at 107, 130 (study indicating no significant statistical relationship between the strength o f intellectual property protection in a country and direct investment by U.S. terms); see also Oddi, International Patent System . supra note 108, at 848-55 (discussing the limited utility of patents to developing countries for Implementing the transfer o f technology).

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implementation of TRIPS insures an import monopoly in these countries for the exploitation of patented products, with little incentive for the local working of these inventions unless a particular country would provide some form of comparative advantage.185 There also would appear to be relatively little incentive for invention creators in developed countries to develop inventions at the technological level required by these countries in their status as consumers subject to an import monopoly. Hence, it appears likely these countries will remain consumer countries rather than productive participants in world trade beyond whatever natural resources may be exploitable.186 Consequently, in either the short or long run, it is difficult to foresee that patent TRIPS will accrue to the benefit of developing countries, especially LDCs, unless incentives outside the patent system are provided for the transfer of technology and hence the industrialization of these countries. Indeed, the natural rights aspects of inventions may be seen as eliminating the comparative advantage of those nations that previously provided no or weak patent protection for particular classes of inventions. Prior to patent TRIPS, those nations fhat did not protect particular classes of subject matter or protected them only for a short period of time had a comparative advantage in relation to those nations that did. If patent protection is not subject to the self-interest of individual countries, why, in the next round of GATT, should this not be extended to the elimination of other types of comparative advantage traditionally admitted by positive law?187

185. See supra n o t e 1 5 2 . 186. E v e n w ith r e s p e c t to n a t u r a l r e s o u r c e s , a s s u m m a r iz e d b y A rn o ld : “T h e e x t e n t o f T h ird W o rld r e s o u r c e s , th e r e fo r e , h a s to b e v ie w e d w ith c a u tio n . J u s t b e c a u s e a c o u n t r y o r r e g io n h a s a n a b u n d a n c e o f m in e r a ls (or o n e p a r tic u la r m in e r a l) d o e s n o t a u t o m a t ic a lly e n s u r e e c o n o m ic p r o s p e r it y . Indeed an d p e r v e r s e ly , it m a y p r o d u c e th e r e v e r s e .” G uy A r n o l d , T h e T h ir d W o r l d H a n d b o o k 1 6 1 (2 d e d . 1 9 9 4 ). F a c to r s th a t r e s u lt in th e r e v e r s e in c lu d e th e p o w e r o f M N C s in t h a t c o u n tr y a n d p o litic a l p r e s s u r e s to r a is e r e v e n u e q u ic k ly . Id.

187. To “even the playing field,” should minimum comparable wage and environmental standards be imposed? Should tax or other incentives [e.g., for exploration for natural resources or for research and development) be eliminated? This is to say nothing o f the problems o f agricultural subsidies as a perennial point of contention among developed countries. See N eg o t ia tin g H ist o r y , supra note 34, at 127-254 (discussing historical background, negotiations during Uruguay Round, and including an extensive bibliography on the problem of agricultural subsidies).

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B. Strategies Some strategies for coping with patent TRIPS may be suggested to those countries impacted by them. Such strategies are primarily based on existing practices within various developed countries or on specific provisions of TRIPS. These suggestions are offered, however, with the caveat that an overzealous application or extension of any of these suggestions may result in complaints of noncompliance with TRIPS, thus evoking the dispute resolution mechanisms under the Agreement or resulting in bilateral pressures being applied by developed countries at the instance of patent owning enterprises.188 Nonetheless, some of these suggestions may mitigate certain perceived adverse consequences of the implementation of patent TRIPS, particularly within developing countries and LDCs. One suggestion would be to establish a fee for patent acquisition at a level adequate to completely fund the patentgranting agency in the country. Indeed, countries might follow the example of the United States to add a surcharge to fees, making them adequate not only to provide for a self-financing a g e n c y b u t a lso to g e n e r a te e x c e s s f u n d s , w h ic h c a n t h e n b e u s e d fo r o th e r g o v e rn m e n ta l f u n c t i o n s .189

188. See Oddi, International Patent System, supra note 108, at 873-75 (discussing the potential repercussions from straying too far from the norms o f conduct expected o f third world countries). 189. A surcharge was imposed on U.S. Patent and Trademark Office fees under the Omnibus Budget Reconciliation Act of 1990 (PL 101-508). Congress must approve any expenditure from this fund. See 35 U.S.C. § 42(e) (Supp. 1993). Since the inception o f the surcharge, Congress has diverted an estimated $60 million, and this is expected to increase and continue with the surcharge being extended until 2002. See Judiciary Votes Along Party Lines to Extend Surcharge on Patent Fees, 50 Pat. T r a d e m a r k & C o py r ig h t J. 559-60 (BNA 1995). It may be anticipated that for those developing countries that are members of the Patent Cooperation Treaty, June 19, 1970, 28 U.S.T. 7645, 1160 U.N.T.S. 231 (amended Oct. 2, 1979 and modified Feb. 3, 1984) a majority o f applications will originate as international applications filed under the Treaty with developing countries being designated states. Nonetheless, the suggestions made herein may be effected to the extent possible within the national procedure after the application is transmitted to the respective designated offices. Note that national fees may be imposed. See id . art. 22. See also id. art. 27 H5: Nothing in this Treaty and the Regulations is intended to be construed as prescribing anything that would limit the freedom o f each Contracting State to prescribe such substantive conditions of patentability as it desires. In particular, any provision in this Treaty and the Regulations concerning the definition o f prior art is exclusively for the purposes of the international procedure and, consequently, any Contracting State is free to apply, when determining the patentability of an invention claimed in an international application, the criteria o f its national law in respect of prior

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Those industries that benefit most from the patent system in a given country might be expected to pay in accordance with the benefits afforded to them. For example, fees could be based upon the worldwide assets of multinational corporations seeking patent protection in the country. Alternatively, or in addition to an assets approach, fees may be based upon the subject matter of patent applications. Thus, pharmaceutical, agricultural chemical, and semiconductor inventions may be required to pay augmented fees. Such an asset or subject-matter-based fee system would not be contrary to the national treatment requirement of TRIPS, the Paris Convention, or the Berne Convention, because domestic corporations would be treated the same as foreign ones.190 Of course, as the vast majority of patent applications in developing countries are filed by foreign enterprises, the impact would fall upon the actual beneficiaries of the system.191 Also, countries may charge a multiplicity of fees.192 In addition to filing fees should be examination fees, search fees, reexamination fees, issuance fees, etc. Moreover, maintenance fees on a periodic basis, even yearly, would seem desirable. A set fee for all patents could be established, which could then be augmented by an additional fee based on a percentage of the domestic sales of the patented invention.193

art and other conditions of patentability not constituting requirements as to the form and contents of applications. 7d. However desirable fees may be, many LDCs, o f course, do not have functioning patent offices. See Evenson, supra note 181, at 361 (indicating that about 60 to 70 LDCs have essentially no intellectual property systems). 190. Domestic subsidiaries o f MNCs could be treated as domestic corporations for the purposes o f fees if this would serve as an incentive to establish a domestic subsidiary or related enterprise. 191. A 1974 study o f the United States Conference on Trade and Development (UNCTAD) found that no more than 1% o f patents granted in developing countries were owned by their nationals. See U.N. D e p ’t o f E c o n . & S oc. A f f ., UNCTAD S ecr eta r ia t a n d In t ’l B u r e a u o f t h e WIPO, T h e R o l e o f t h e P a t e n t S yste m in t h e T r a n s f e r o f T ec h n o l o g y to D e v e l o p in g C o u n t r ie s 92, U.N. Doc. T D /B /A C .11/19 (1974). In 1984, according to statistics collected by WIPO, approximately 90% o f patents granted in developing countries that are members o f the Paris Union were granted to foreigners. See W o r l d Inte ll ectu al P r o perty O rg anizatio n , In d u st r ia l P roperty S ta t ist ic s 8-9, WIPO Doc. No. IP/STAT/1984/B (Publication B) (1985). The most recent statistics indicate no significant change. See W o r l d Inte ll ec tu a l P ro p e r t y O r g a n iza t io n , Ind u st r ia l P ro per ty S tatistics 1-9, WIPO Doc. IP/STAT/1993/A (Publication A) (1993). 192. The U.S. model may be useful. See 35 U.S.C. § 41 (1988), which imposes fees for, inter alia , filing, issue, disclaimer, filing appeal, brief and oral hearing, revival of abandoned application, extensions, national fee for international application, maintenance, recording, photocopies, and patent copies. 193. The problem with this approach Is, of course, that the patent owners will, if competition permits, pass on the augmented fees to the consumers. Thus,

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Revenues received in excess of the cost of operating the patent office could thus be used for any other governmental functions or deficit reduction; however, it might be politic to apply the excess to technical education, industrial development, or related activities. Another suggestion is based upon a requirement of Article 29 of patent TRIPS obligating members to require that applicants for a patent “disclose the invention in a manner sufficiently clear and complete for invention to be carried out by a person skilled in the art and may require the applicant to indicate the best mode for carrying out the invention.”194 The enabling requirement is, of course, boilerplate in most patent statutes.195 However, developing countries in particular should take this requirement seriously and should insist upon a complete disclosure, which will enable the making of the invention in that particular developing country. Hence, mere translations of patent applications as originally filed in other countries should not be automatically accepted.196 The statutory requirements for enabling disclosure could be quite specific in requiring specifications, blueprints, dimensions, chemical compositions, exact temperatures, pressures, bill of materials, equipment requirements, etc. Impacted countries could impose the optional “best mode” requirement with the clear understanding that the disclosure should be of the best mode of making and using the invention in

some differentiation would seem advisable, for example, between inventions on luxury Items and those related to essentials. 194. TRIPS, supra note 6, a rt 29 (Conditions on Patent Applicants): 1. Members shall require that an applicant for a patent shall disclose the invention in a manner sufficiently clear and complete for the invention to be carried out by a person skilled in the art and may require the applicant to indicate the best mode for carrying out the invention known to the inventor at the filing date or, where priority is claimed, at the priority date of the application. 195.

Article 29 essentially tracks 35 U.S.C. § 112 K 1 (1988):

The specification shall contain a written description o f the invention, and o f the manner and process o f making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same, and shall set forth the best mode contemplated by the inventor of carrying out his [or her} invention. TRIPS, supra note 6, art. 29. 196. CJ. Herbert Stumpf, Interests and Conflicts of Interest In Technology Transfer: The Role of Patents, 9 In t ’l R e v . I n d u s . P r o p . & C o py rig h t L. 309, 315 (1978)(claiming that translation into the language o f the developing country to be one of the major advantages to their grant of patents).

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that country while taking into account the availability of equipment, components, materials, etc.197 Another suggestion for impacted countries would be to adopt a Japanese model of patent prosecution and scope of protection.198 The patent prosecution should be made as complex and lengthy as possible to ensure formal compliance with the patent statute and, moreover, ensure scrupulous compliance with the enabling requirement, as discussed supra. Extending the pendency period of a patent would accordingly cut into its duration, which is mandated by Article 33 to run from the filing date in that country.199 In order to quickly disseminate the technological information contained within the patent application, the application should be published as soon as possible after filing. There is no requirement that the application not be published, as is the current practice in the United States, or only after an extended period, such as eighteen months after filing, which is the practice in many countries.200 An opposition procedure may also be implemented so that any interested parties may oppose the grant of this particular application.201 This has the advantage of having interested parties provide the best prior art and also augmenting the technological search capability of the domestic patent office. A high standard of patentability should be adopted to ensure that mere detail patents of the type that tend to be market-

197. While the “best mode" requirement under § 112 is generally construed as being a subjective standard (See 2 C h isu m . supra note 167, § 7.0511]). there is no reason why inventors seeking patents in a particular countiy should not be required to disclose what they would consider to be the best mode in that country, rather than in the country o f origin. 198. See supra note 136. 199. Adhering to this suggestion too vigorously could, of course, result in repercussions. For example, in response to pressure from the United States. Japan has agreed to permit filing o f applications in English and to permit correction of translation errors during prosecution and after grant. In addition, Japan has agreed to eliminate pre-grant oppositions. In return, the United States agreed to a 20-year term from the filing date and to publication o f applications 18 months after filing and to expand re-examination procedures. See U.S. Says "Not Now* on Flrst-to-Ftle and Agrees with Japan on Patent Term , 47 P a t . T r adem ark & C o py r ig h t J. 285, 285-86 (BNA 1994); U.S. Japan Conclude Agreement on Reexamination and Publication, 48 Pa t . T r a d e m a r k & C o py r ig h t J. 412, 412-14 (BNA 1994). The 20-year term has already been implemented under patent TRIPS. Bills have been introduced for publication (H.R. 1733) and for expanding re-examination (H.R. 1732). 200. See 2 B a x t e r e t a l . , supra note 102, § 5.01 (listing publication dates o f applications, with 18 months from filing being a common time, including that of the European Patent Office). 201. See id. §§ 14.01-14.04 (summarizing the procedures employed by countries having oppositions).

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induced rather than truly revolutionary or basic inventions are not granted. Article 27, after all, imposes a Western standard for patentability.202 Patent offices within impacted countries should demand the search results from corresponding applications as generated by the major patent offices of the world as authorized by Article 29, paragraph 2, and use these results as a guide for disposition.203 However, the mere fact that a patent had been granted on an analogous patent application in another country should not be determinative of whether or not a patent should be granted in this country.204 Care should be taken not to equate the enabling standard of a person skilled in the act in this country with the “nonobviousness” or “inventive step” substantive requirement. An impacted country could base its substantive standard for the grant of a patent on whether the claimed invention would be nonobvious to a person skilled in that art anywhere in the world.205 Further, it is suggested that a pre-grant opposition procedure be implemented, thus providing competitors with an opportunity to oppose the grant of the particular claims.206 Post-grant challenges to the patent and re-examination procedures would also be suggested.207 Of course, appropriate fees should be imposed in order to fully underwrite all of the procedural steps involved in the grant and post-grant periods.

202. Cf. TRIPS, supra note 6, art. 27 with 35 U.S.C. §§ 101. 102, 103 (1994), art. 52 o f the European Patent Convention o f 5 October 1973 (as amended) (inventions must be “susceptible of industrial application, which are new and which involve an inventive step”) and arts. 54-55 (novelty) and art. 56 (defining “inventive step” in terms o f nonobviousness), reprinted In 2K J ohn P. Sinnott, World Patent Law and Practice 30-32 (1994). 203. TRIPS, supra note 6, art. 29(2) (“Members may require an applicant for a patent to provide information concerning (the applicant’s] corresponding foreign applications and grants.”). 204. The Paris Convention, supra note 26, art. 4, after all, mandates the independence of patents. Thus, invalidating a patent in one country does not automatically invalidate the corresponding patent in another. Id. art. 4 H 2. The same should follow for the independence in granting. 205. What may be nonobvious in a developing country because o f its relatively low level o f technological development may be obvious to one skilled in the art in a developed country. 206. For example, in Japan, a two-month period after publication is provided when “any person” may file an opposition to the grant o f a patent. See The Patent Law and the Enforcement Law Thereof, Law No. 121, Apr. 13, 1959 (as amended) arts. 55-65, reprinted in 2F J o h n P. S i n n o t t & W illia m J. C o t r e a u , W o r l d P a t e n t L aw a n d P r a c t i c e 28.1-30 (Japan) (1995). 207. An example is the re-examination procedure in the United States. 35 U.S.C. §§ 301-07 (1988).

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A statutory provision should be included in the patent acts of impacted countries to establish a narrow scope of protection. Accordingly, there should be a veiy limited doctrine of equivalents, and claims should be interpreted narrowly.208 This essentially follows the Japanese model and, when coupled with early publication of the application, enables competitors to file for patents on improvements on the published invention.209 Thus, competition among the various entities for improvements on the basic invention will be engendered, and any improvement patents issued will be limited to a narrow scope. A procedure for dealing with “blocking patents” should be established. Thus, when a basic patent would otherwise block an improvement patent, some form of compulsory licensing system should be available, such as indicated in Article 31(1) of patent TRIPS 210 Such a procedure would aid access to the improvement in the country. Another suggestion is that impacted countries adopt a worldwide exhaustion doctrine, building upon the model of the European Union.211 Under a worldwide exhaustion doctrine, any patented product sold by or with the authorization of the patent owner may be imported into the country without regard to whether that particular product is patented in that country. Thus, the first authorized sale anywhere removes any fences from the product, and it may be freely imported into the country. This

208. This would avoid the problems that the United States in particular has had with the doctrine of equivalents. See generally, Chisum, supra note 167, § 18.04. 209.

See supra note 136 (Japanese practice).

210. Where the law o f a Member allows for other use o f the subject matter o f a patent without the authorization o f the right holder, including use by the government or third parties authorized by the government, the following provisions shall be respected: (1) where such use is authorized to permit the exploitation o f a patent (“the second patent”) which cannot be exploited without infringing another patent (“the first patent”), the following additional conditions shall apply: (I) the invention claimed in the second patent shall involve an important technical advance o f considerable economic significance in relation to the invention claimed in the first patent; (ii) the owner o f the first patent shall be entitled to a cross­ license on reasonable terms to use the Invention claimed in the second patent; and (ill) the use authorized in respect o f the first patent shall be non-assignable except with the assignment o f the second patent. TRIPS, supra note 6, art. 31. 211. See supra note 167. See also Judgment o f Mar. 23, 1995 (Japanese Auto Prods. Kabushiki Kaisha & Anor. v. BBS Kraftfahrzeug Technik A.G.), Koto Saibansho [Tokyo High Courtl, No. 3272 o f 1994 (Japan).

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will permit competition in a particular patented product manufactured in and exported from various countries throughout the world with the authorization of the patent owner. An exception to this exhaustion rule may be considered to the effect that, if the patented invention is domestically worked, worldwide exhaustion would not apply. Hence, the domestic patent owner or licensee could exclude patented products originating from other countries as an incentive for local working. There is a downside to such an exception. The universal adoption of such a rule could seriously hamper domestic enterprises from competing in the international market.212 As many impacted countries will serve only as consumers of patented products, with little or no hope of any actual transfer of technology and local working of such products, it would seem appropriate that, at least with respect to products charged with a national interest (e.g., health, safely, food production, and basic services), particular controls for foreign imports be imposed within the GATT framework. Thus, for example, with regard to pharmaceutical and other medical products, governmental controls could be established with respect to such products. This certainly is not an unknown model in the developed world.213 This may be implemented by price or profit regulation or by centralized buying based upon competitive bidding for substantially identical or equivalent products. Such regulation would avoid dissipation of valuable foreign exchange, and would tend to neutralize the excessive demand created by extensive advertisement and promotional activities.214

212. On the other hand, the principal market for domestically produced products may be in developed countries with the authorization of the patent owners, who have elected to work particular inventions locally because of comparative advantages in the developing country. 213. See M. Dickson, The Pricing of Pharmaceuticals: An International Comparison , 1 4 C lin . T h e r . 6 0 3 (Abstract), available in LEXIS, Medlne Library. Four types o f pricing policies and regulations are recognized: product price control, as practiced in France, Italy, Portugal, and Spain; reference pricing, as in Germany and the Netherlands; profit control, as in the

United Kingdom; and no control, as in the United States. The system in Canada is a hybrid o f product price control and reference pricing; a producer may set any price for a new product as long as it is within guidelines established by a federal government review board. Id. 214. Developing countries can thus learn from the various control mechanisms used in the developed world. See id. The end result should be a leveling of prices to the world level whether the pharmaceutical is unpatented or patented. Indeed, it would appear that many developing countries are well along on the learning curve. See Rapp & Rozek, supra note 149, at 96 (indicating that

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A final general suggestion would be the adoption of measures that would encourage the transfer of technology to impacted countries, and hence provide incentives for that transfer and for the development of technological capability and industrial infrastructure. One could reduce or eliminate patent maintenance fees with respect to patented inventions that involve transfer of technology to implement local working. To further strengthen the incentive to work locally, strong trade secret protection legislation could be adopted by fully implementing Article 39 of TRIPS.215 One of the arguments against transfer of technology to developing countries has been the inadequacy of trade secret protection.216 The legislation could be made specific to technology transfers as part of a patent licensing arrangement so as to enjoin the use of any misappropriated trade secrets at least for the term of the patent protection. In all likelihood, the competition over technology transfer and industrialization among developing countries will increase under the harmonizing effect of TRIPS throughout the world. Nonetheless, it is still possible for an individual country to provide augmented incentives by means of its patent system for particular categories of inventions considered to be of high benefit to that country. For example, a country having a severe problem with certain diseases may provide increased incentives with respect to inventions relating to such diseases, such as, longer terms, reduced fees, and in rem protection.217

at least 38 developing countries have adopted some form o f price regulation for pharmaceuticals). 215. See supra note 137 (quoting TRIPS, art. 39). 216. See Odd!, International Patent System , supra note 108, at 851-52, 851 n.86. Kitch apparently believes the major problem is misappropriation of trade secrets by employees o f enterprises in developing countries. See Kitch, Patent Policy supra note 149, at 175, where he states that “Oddi discusses the trade secrecy issue, but then dismisses it for reasons that are unclear." /d. at n.12. In the author’s view, the major problem is that technology owners in developed countries are unwilling to release trade secrets to enterprises in developing countries when such countries lack a legal basis, procedure, and remedies (especially injunctive relief) for the unauthorized disclosure o f trade secrets. Hence, § 7 (Protection o f Undisclosed Information) o f patent TRIPS is supposed to solve both problems. 217. See the proposal for a “transfer-of-technology” patent conditioning the grant o f such a patent upon a preexisting foreign patent and the transfer of adequate know-how to work the claimed invention In the operating country. 2 W o r l d I n t e l l e c t u a l P r o p e r t y O r g a n iz a t io n , WIPO M o d e l L aw f o r D e v e lo p in g C o u n t r i e s o n I n v e n t io n s §§ 601-16, at 82-102, WIPO Publication No. 841(E) (1980). See also Oddi, International Patent System , supra note 108, at 871-73 (discussing advantages o f such a patent to developing countries). See also Oddi, Beyond Obviousness, supra note 108, at 1137-41 (discussing augmented protection to be afforded to “revolutionary” patents).

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Outside of the intellectual property system, impacted countries may also follow the lead of developed countries in providing incentives for establishing industrial facilities in a given location by providing various subsidies, which may take the form of real estate, utilities, transportation linkups, tax abatement, etc.218 These incentives may be necessary to supplement whatever comparative advantages a particular country may have. V . C o n c l u s io n

One need not get overwrought for the sake of developing countries under TRIPS and patent TRIPS in particular. On balance, membership in GATT may be to their advantage if they have any capacity for foreign trade. LDCs do not, almost by definition, have the technological capacity to replicate inventions of any sophistication and have limited resources to provide a market for such inventions. Developing countries on the way to industrialization and NICs in particular can cope with patent TRIPS. After all, they have taken advantage of a “head start” during their “piratical” period not unlike the United States and Japan during corresponding periods of their industrialization. Moreover, countries with such a technological capability may be expected to acquire any needed intellectual property rights and know-how from enterprises in developing countries that find it economically advantageous to license rather than export. Also one would have been naive to assume, even with the complete domestic implementation of patent TRIPS, that there will be particularly zealous enforcement against local enterprises at the instance of foreign patent owners or the government itself. Nor should one be too sanguine about the economic benefit accruing to developed countries and their enterprises from patent TRIPS. Consumers are only worth their salt if they have disposable income. Unless patent TRIPS somehow aids the industrialization of developing countries and leads to their ability to purchase foreign inventions, patent TRIPS may do little to expand foreign trade.

218. See Mary Jo Waits & Rick Heffemon, Business Incentives: How to Get What the Public Pays for. 67 S p e c tr u m : J. S t a t e G o v t . 34 (1994) (listing safeguards in granting incentives); Charles Mathesian, Romancing the Smoke Stack . C o n g r . Q. (1994) (indicating the rising cost per job created—Nissan plant in Tennessee—$11,000 per job (early 1980s); Saturn plant in Tennessee—$26,000 per job (1985); Mercedes-Benz plant in Alabama—$200,000 per job (1993)). Not to be outdone, for a Dofasco Steel plant in Kentucky, the incentives amounted to $350,000 per job.

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Finally, one may be suspect of international trade policy advanced by the governments of developed countries but initiated and driven by industry groups even to the extent of special interest protection for preeminent members of such groups. This may not amount to “gun boat” diplomacy, but it does smack of economic imperialism against uppity “pirate” states who deign to compete by “imitation,” which, if not “the very lifeblood of a competitive economy,”219 is at least an aspect of economic completion. In any event, one can hope that the world has now been made safe for intellectual property.

219. Bonito Boats. Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141. 146 (1989). See supra note 78 (quoting more fully from the Bonito Boats case).

[10] Neocolonialism, Anticommons Property, and Biopiracy in the (Not-So-Brave) New World Order of International Intellectual Property Protection K eith A oki *

Introduction

One o f the biggest mistakes one can make when considering the globalization o f intellectual property law is to assume away the increasingly contentious politics o f the phenomenon. This is not to say that the emerging politics o f international intellectual property law are simple, easy to understand, or unchanging— quite the contrary is true. However, we should resist the understandable tendency to reach for a quick, technocratic set o f Procrustean tools that assume away the “messiness o f the world” and make it seem that concepts such as “sovereignty” and “property” should be, are, or always have been, particularly stable constructs. Professor Fred Cate has brought together at the Roundtable a diverse group o f scholars working from a wide range o f political and ideological positions. He should be commended for avoiding the pitfalls o f a “Jetson’s Jurisprudence”1type o f gathering that sanguinely implies that the “future is so bright, we need to wear sunglasses” because o f a quick techno fix. In the not-so-brave new world order2 following the collapse o f the Soviet Union in 1989, questions about the limits o f the nation-state and the market are more important than ever. In particular, when considering developments, such

* Associate Professor, University of Oregon School of Law; B.F.A., 1976 Wayne State University; M.A., 1986, Hunter College; J.D., 1990, Harvard Law School; LL.M., 1993, University of Wisconsin School of Law. Thanks to Fred Cate for inviting me to participate in this symposium as well to James Boyle, Rosemary Coombe, Ruth Gana, and Carol Rose, whose work continues to educate, inspire and challenge me. Thanks also to David Kennedy and other participants at the Dighton Writer’s Workshop, where I presented a draft. 1. James Boyle coined the term “Jetson’s Jurisprudence” which refers to a “style of legal writing [that employs] a listing of technological marvels in the hope they will make a related set of legal rules alluringly futuristic by association.” S h a m a n s , S o f t w a r e a n d S p l e e n s : L a w a n d t h e C o n st r u c t io n o f t h e In fo r m a t io n S o c ie ty at x (1996). 2.

N oam C hom sky , W orld O rders O ld a n d N ew (1994).

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as the spread o f the World Wide Web, the jurisdictional scope o f national regulatory regimes (whether specifically applicable to intellectual property per se3 or not, as is the case with laws regulating things like hate speech, pornography, obscenity, privacy, or encryption) is forced to the fore. However, the digital environment is not the only front on which questions about extraterritorial assertions o f sovereignty are pressing. Indeed, one might look at the rise and spread o f digital communications technologies as a smaller part o f the dramatic global economic restructuring during the last half o f the twentieth century that has been referred to as globalization.4 There are three large categories that may help us structure a discussion about the politics o f international intellectual property protection. These categories consist o f issues raised when asking questions about the following: (1) the political economy o f intellectual property, considered both domestically and globally; (2) that which James Boyle has called “Logging the Cyberforest,”5 basically, how are we to think about the intellectual “commons,” or public domain; and (3) the legitimacy o f various types o f cultural (in the broadest sense) appropriation. I will briefly describe some o f the issues in each o f these three areas and suggest some tentative connections pointing in the direction o f understanding the rapidly emerging politics o f intellectual property law, international and otherwise.

3. For an excellent overview of the technological dilemmas facing contemporary U.S. copyright law and urging a return to its constitutionally-mandated ambit, see Fred H. Cate, The Technological Transformation o f Copyright Law, 81 Iow a L. Re v . 1395 (1996); see also Jessica D. Litman, Copyright, Compromise and Legislative History, 72 C ornell L. Re v . 857 (1987) (examining some interpretive problems of the 1976 Copyright Act). 4. See, e.g., PETER DlCKEN, GLOBAL SHIFT: INDUSTRIAL CHANGE IN A TURBULENT WORLD (1986) (providing a useful overview from the perspective of economic geography of the economic processes referred to as “globalization”); ROLAND ROBERTSON, Globalization : S ocialT h eo r y a n d Global C ulture (1992); G lobal C u lture , N ationalism , Globalization a n d M odernity 7 (Mike Featherstone ed., 1992) (special volume including articles from a range of theoretical perspectives on the significance of culture within the contemporary processes of global change); Paul Hirst & Grahame Thompson, The Problem of ‘Globalization International Economic Relations, National Economic Management and the Formation of Trading Blocs, 21 E c o n . & S o c ’y 357 (1992); D avid H ar v e y , T he C ondition of P ostm odernity : A n E nquiry into the ORIGINS OFCULTURALCHANGE(1989); Bruce Robbins, Some Versions of U.S. Internationalism, 45 SOC. TEXT 97 (1995).

5. James Boyle coined this term during a presentation entitled “The Intellectual Property Grab” at the New Approaches to International Law “fm-de-NAIL” conference at Harvard Law School (May 1996). Cf James Boyle, A Politics o f Intellectual Property: Environmentalism for the Net?, 47 D uke L.J. 87 (1997).

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I. T he E m erging P olitical E conom y of In ternatio nal Intellectual P roperty L a w

First, one should note that there is a deep contradiction between the definition o f an “intellectual property right,” that is, a state-backed monopoly handed out to individuals or firms, and the popular neoliberal vision that valorizes “privatization” and free market economics.6 Neoliberalism has three distinctive analytical characteristics that need to be on the table before discussing the international political economy o f intellectual property.7 First, neoliberalism makes an ideological claim about a strict division between public and private. Second, neoliberalism entails a sort o f “Forward into the Past” elevation o f freedom o f contract that is similar in many ways to the Lochner-e ra jurisprudence o f the late nineteenth and early twentieth century United States.8 Third, and similarly, neoliberalism has a strong attachment to a type o f conceptual formalism that tends to characterize actors, whether individual contracting parties or nations, as abstract and formally equal. Central to the neoliberal vision is a strict split between the “public sphere” (the state) and the “private sphere” (the market), with the latter privileged and the former strictly cabined.9 This is an ideological claim analogous to a situation in which someone says, “It’s not the money, it’s the principle.” However, more often than not, it is the money. Here, the conceptual importance

6. See generally David C. Korten, The Mythic Victory o f Market Capitalism, in T he C ase A gainst 183 (Jerry Mander & Edward Goldsmith eds., 1996) [hereinafter T he C a se A gainst the Global E conom y ]; W illiam G reider , O n e W o rld , Re a d y or N o t : T he M anic Logic of G lobal C apitalism (1997). 7. C f David Morris, Free Trade: The Great Destroyer, in T he C ase A gainstthe G lob al E cono m y , supra note 6, at 218 (critiquing the politics and ideology of free trade); Tariq Banuri, Development and the Politics o f Knowledge: A Critical Interpretation o f the Social Role o f Modernization Theories in the Development of the Third World, in D ominating Kno w le d g e : D evelopment , C ulture , a n d R esistance 29 (Frederique Apffel Marglin & Stephen A. Marglin eds., 1990); David Slater, Contesting Occidental Visions o f the Global: The Geopolitics o f Theory and North-South Relations, M as A lla D el D erecho [B ey o n d La w : S tories of Law an d S ocial C hange from Latin A merica a n d A r o u n d the W orld ], December 1994, at 97; A rjun A pp adura i, M odernity at La rg e : C ultural D im ensions of G lobalization (1996). 8. Julie E. Cohen, Lochner in Cyberspace: The New Economic Orthodoxy of “Rights Management, ” 97 M ich . L. R e v . (forthcoming Nov. 1998); cf R ichard A. E pstein , T a kin gs : Private P roperty a n d the P ow er of E m inent D omain 279-82 (1985). 9. See Morton J. Horowitz, The History of the Public/Private Distinction, 130 U. P a . L. R e v . 1423 (1982); Gerald E. Frug, The City as a Legal Concept, 93 H a r v . L. R e v . 1057, 1099-1105 (1980); Joseph William Singer, Legal Realism Now, 76 C a l . L. R e v . 465, 477-95, 528-32 (1988) (book review); see also Richard Peet & Michael Watts, Development Theory and Environment in an Age o f Market Triumphalism, 69 E c o n . G eography 227 (1993); see generally, A merican Legal R ealism 98-129 (William W. Fisher et al. eds., 1993). the G lobal E c o no m y :A n d f o r a T u r n T ow ard the Local

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o f claiming a strict public and private split works to mask the proliferation and interpenetration o f public and private as exemplified by institutions like non­ governmental organizations (NGOs) o f all types.10 It is interesting that the “public” and “private” international institutions have also converged in the area o f intellectual property law. For example, the “public” international institutions o f Dumbarton Oaks, such as the United Nations, have intersected with the World Trade Organization (WTO), which developed from the postwar Bretton Woods “private” institutions, such as the International Monetary Fund (IMF), the World Bank, and the General Agreement on Tariffs and Trade (GATT).11 It is also ironic that this interpenetration is simultaneously obscured by assertions that “intellectual property rights are private rights.”12 To the extent that neoliberalism undergirds the push toward “free trade” exemplified by multilateral agreements such as GATT, its successor— WTO, the North American Free Trade Agreement (NAFTA), and the formation o f the European Union, there exists an irony first pointed out early in the twentieth century by U.S. legal realists such as Morris Cohen and Robert Hale.13 Cohen

10. Representative organizations include the Canadian-based Rural Advancement Foundation International (RAFI), the Women and Development Unit (WAND) in the Caribbean, Transafrica, and organizations referred to in Ibrahim F. I. Shihata, The World Bank and Non-Governmental Organizations, 25 C ornell In t ’l L.J. 623 (1992); and Enrique R. Carrasco, Law, Hierarchy, and Vulnerable Groups in Latin America: Towards a Communal Model of Development in a Neoliberal World, 30 S t a n . J. In t ’l L. 221 (1994); see also John C lark , D emocratizing D evelopment : The R ole of V o luntary O rganizations (1991); Peter J. Spiro, New Global Communities: Nongovernmental Organizations in International Decisionmaking Institutions, W a sh . Q., Winter 1995, at 45; Brian H. Smith, An Agenda of Future Tasks for International and Indigenous NGOs: Views From the North, 15 W orld D e v . 87 (Supp. 1987); Carolyn Stremlau, NGO Coordinating Bodies in Africa, Asia, and Latin America, 15 W orld D e v . 213 (Supp. 1987); YashTandon, Foreign NGOs, Uses and Abuses: An African Perspective, IFDA D ossier , Apr.-June 1991, at 67, 70-72. 11. See generally David C. Korten, The Failure o f Bretton Woods, in T he C ase A gainst the G lobal E co no m y , supra note 6, at 20; Richard N. Gardner, The Bretton Woods-GATTSystem After Fifty Years: A Balance Sheet o f Success and Failure, in T he B retton W o ods -GATT S y stem : R etrospect a n d P rospect A fter F ifty Y ears 181 (OrinKirshnered., 1996); International M onetary Fu n d & W orld B a n k G ro u p , F ifty Y ears A fter B retton W o o d s : T he Future of the IMF a n d the W orld B a n k (James M. Boughton & K. Sarwar Lateefeds., 1995); M anaging the W orld E co n o m y : F ifty Y ears after B retton W oods (Peter B. Kenen ed., 1994); John H. Jackson , T he W orld T rading S y stem : L aw an d P olicy of International E conomic R elations (1989); B eyo nd B retton W o o d s : A lternatives to the G lobal E conomic O rder (John Cavanagh et al. eds., 1994); 50 Y ears Is E n o u g h : T he C ase A gainst the W orld B ank a n d the International M onetary F u n d (Kevin Danaher ed., 1994); P erpetuating P o vert y : T he W orld B a n k , the IMF, a n d the D eveloping W orld (Doug Bandow & Ian Vasquez eds., 1994). 12. Agreement on Trade-Related Aspects of Intellectual Property Rights, Including Trade in Counterfeit Goods ofthe General Agreement on Tariffs andTrade, December 15,1993,331.L.M. 81 (1994) (“Recognizing that intellectual property rights are private rights”). 13. See Morris Cohen, Property and Sovereignty, 13 C o rnell L.Q. 8 (1927); Robert L. Hale, Bargaining, Duress, and Economic Liberty, 43 C olum . L. Re v . 603 (1943); Robert L. Hale, Coercion and

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pointed out that so-called “private property” rights o f individuals and firms were more or less state-backed delegations o f public sovereignty— the ability to “tax” future social output.14 Furthermore, Robert Hale wrote that the state’s coercive force was similarly implicated in every “private” transaction in the market— even state noninterference with market transactions was a form o f “public” intervention— by allowing and creating the legal rules o f the game for private property owners to coerce one another in the “private” sphere, thereby implicating the state in underwriting “private” markets and their outcomes.15 If intellectual property may be fairly characterized as a jointly produced social product,16then the state-underwritten rules determining allocation o f benefits from production o f that social product constitute a delegation o f the sovereign’s power to “tax” via licensing, or, conversely, fair uses. In agreements such as the Trade-Related Aspects o f Intellectual Property

Distribution in a Supposedly Non-Coercive State, 38 P o l . S c i . Q. 470 (1923); Robert L. Hale, Rate Making and the Revision o f the Property Concept, 22 C o l u m . L. R e v . 209 (1922); For a contemporary gloss on the continuing relevance of Robert Hale’s work and Legal Realism in general see the chapter entitled “The Stakes of Law, or Hale and Foucault!” in Duncan Kennedy’s book S ex y D r e ssin g , E t c . : E ssa y s o n t h e P o w e r a n d P o l itic s o f C u l t u r a l I d e n tity 83-125 (1994). 14. See Cohen, supra note 13, at 12-13. 15. Hale, Coercion and Distribution in a Supposedly Non-Coercive State, supra note 13, at 471-73. 16. See K e n n e d y , supra note 13, at 85-86: The [legal] realists’ coercion analysis contained a substantive insight as well, an insight into the role of legal rules. The state uses force to ensure obedience to the rules of the game of bargaining over a joint product. To the extent that these rules affect the outcome, forcing the parties to settle for x rather than y percent of the joint product, the state is implicated in the outcome. It is an author of the distribution even though that distribution appears to be determined solely by the ‘voluntary’ agreement of the parties. It is not a stretch to conceive of “intellectual property” as a joint product, consisting of differing proportions of preexisting works and ideas. Furthermore, in the intellectual property area, the state is expressly implicated in conferring (or modifying) rights. This becomes clear when one realizes the “flip-ability” value in the area of fair use. For example, is the fair use doctrine a subsidy flowing to the public of users or consumers of copyrighted works? Or is a strong vision of copyright a subsidy flowing to authors from the public of potential users or consumers of works? It is far from clear that there is any determinate answer to the “efficiency” of either outcome. For a penetrating and useful analysis of the impossibility of establishing any neutral, prepolitical default from which to assess value, see Duncan Kennedy & Frank I. Michelman, Are Property and Contract Efficient?, 8 H o fstr a L. R e v . 711 (1980). See also Lloyd L. Weinreb, Copyright for Functional Expression, 111 H a r v . L. R e v . 1149, 1239-40 (1998): Even if allocative efficiency alone is considered, the desirable nature and extent of a copyright regime are uncertain. Why, after all, should the author or publisher of a work own the copyright rather than just the copy itself? . . . Copyright has the effect of ‘privatizing’ and thereby bringing into the market goods that would otherwise be free to all. The longstanding convention that authors have a copyright in their works deflects attention from the fact that copyright is itself an intervention in the market, rather than as is so often made to appear, the ‘natural’ way of things.

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Rights (TRIPS) component o f GATT and the WTO, there are serious questions as to what nations, regions, and classes o f persons benefit from “free trade,” whether it be in scientific textbooks, bestsellers, bytes, germ plasm, or CDs.17 On issues as far-ranging as the impact on scientific research o f restrictive database protection laws18to the impact on democratic dialogic participation, questions about the international political economy o f intellectual property are becoming harder to avoid.19 In particular, as between the developed nations o f the North and the less developed countries o f the South,20 increasing numbers o f scholars have been questioning whether the flow o f benefits o f international intellectual property protection, which are part o f the whole “free trade”

17. “Copyright industries [of Western Europe and North America] are not economically marginal-25 billion dollars in 1985 in Britain, 2.9 per cent of the Gross National Product (GNP), greater than car manufacturing [T]he United States in 1990.. .estimated] that copyright industries contribute 5.8 percent of the U.S. GNP, employing almost 5 per cent of the U.S. workforce.” Urvashi Butalia, The Issues at Stake: An Indian Perspective on Copyright, in C opyright a n d D evelopm ent : Inequality in the Inform ation A ge 49,52 (Philip G. Altbach ed., 1995) [hereinafter C opyright a n d D evelopment ]; Alan S. Gutterman, The North-South Debate Regarding the Protection o f Intellectual Property Rights, 28 WAKE F orest L. Re v . 89 (1993). 18. See the Database Investment and Intellectual Property Antipiracy Act of 1996, H.R. 3531, 104th Cong. § 2 (1996); see also Committee of Experts on a Possible Protocol to the Beme Convention, Proposal of the United States of America on Sui Generis Protection of Databases, Geneva, May 22-24,1996, WIPO Doc. BCP/CE/VII/2-INR/CE/VI/2 (May 24, 1996) (rejected by WIPO in December 1996); World Intellectual Property Organization, Draft WIPO Copyright Treaty, December 20, 1996, WIPO Doc. No. CRNR/DC/89 (December 20,1996) [hereinafter Draft WIPO Copyright Treaty]; Pamela Samuelson, Big Media Beaten Back, W ired , March 1997, at 61; Denise Caruso, Global Debate Over Treaties on Copyright, N.Y. T imes , Dec. 16, 1996, at D1 (describing the bill that incorporated the White Paper’s proposals of “failed legislation”). 19. See B oyle , supra note 1; A n n e W ells B ranscom b , W ho Ow ns Inform ation ? From Privacy to P ublic A ccess (1994); Rosemary J. Coombe, Objects o f Property and Subjects o f Politics: Intellectual Property Laws and Democratic Dialogue, 69 T e x . L. Re v . 1853 (1991); Niva Elkin-Koren, Copyright Law and Social Diaglogue on the Information Superhighway: The Case Against Copyright Liability o f Bulletin Board Operators, 13 C ardozo A rts & En t . L.J. 345 (1995); Niva Elkin-Koren, Cyberlaw and Social Change: A Democratic Approach to Copyright Law in Cyberspace, 14 C ardozo A rts & En t . L.J. 215 (1996); Neil Weinstock Netanel, Copyright and a Democratic Civil Society, 106 Y ale L. J. 283 (1996); Keith Aoki, (Intellectual) Property and Sovereignty: Notes Toward a Cultural Geography o f Authorship, 48 S t a n . L. Re v . 1293 (1996); Neil Weinstock Netanel, Asserting Copyright's Democratic Principles in the Global Area, 51 V a n d . L. R e v . 217 (1998). 20. See Andrew Pollack, A Cyberspace Front in a Multicultural War, N. Y. Times , Aug. 7,1996, at D1, featuring a map of what regions of the world are “wired” provided by the Internet Society, in which most of SubSaharan Africa, with the exception of South Africa, is unconnected to the Internet. The map’s title reads “Connected, but Not Communicating” and its captions state: North and South America both use Latin alphabets, making computer communication between them relatively easy___ There are few computer networks in Africa, and the large number of dialects, languages, and alphabets makes electronic communication difficult.... Most of Europe can communicate with Latin script. China and other Asian countries require more complicated character sets than the Internet allows. Id.

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package, may be skewed to the advantage o f the economies, cultures, and nations o f the North.21 To the extent that the countries o f the North have developed bifurcated economies with large wealth gaps between rich and poor, the concerns o f the nations o f the South fold into pockets o f Third World-like immiseration within the First World.22

21 .See V a n d a n a S hiva , B iopiracy : The P lun der of N ature a n d Know ledge (1996) [hereinafter B iopiracy ]; V a n d a n a S h iv a , M onocultures of the M in d : P erspective o n B iodiversity a n d B iotechnology (1993); C opyright a n d D evelopment, supra note 17; B oyle , supra note 1; Intellectual P roperty R ights a n d Indig eno us P eoples : A S ourcebook (Tom Greaves ed., 1994); Jack R. K loppenberg , Jr ., F irst the S ee d : T he P olitical E conom y of P lant B iotechnology (1988); Ruth L. Gana, The Myth o f Development, The Progress o f Rights: Human Rights to Intellectual Property and Development, 18 Law & P o l ’y 315 (1996) [hereinafter Gana, The Myth o f Development]', Ruth L. Gana, Has Creativity Died in the Third World? Some Implications o f the Internationalization o f Intellectual Property, 24 D e n v . J. In t ’l L. & Po l ’y 109 (1995) [hereinafter Has Creativity Died in the Third World?]; Darrell Addison Posey, Intellectual Property Rights: What is the Position o f Ethnobiology?, 10 J. E thnobiology 93 (1990); Darrell Posey, Intellectual Property Rights and Just Compensation for Indigenous Knowledge, A nthropology To d a y , Aug. 1990, at 13; see also Judith C. Chin & Gene A. Grossman, Intellectual Property Rights and North-South Trade 10506 (National Bureau of Economic Research Working Paper No. 1040,1990); Carlos Alberto Primo Braga, The Economics o f Intellectual Property Rights and the GATT: A View From the South, 22 V a n d . J. T r a n sn a t ’l L. 243, 254 (1989); J. H. Reichman, Intellectual Property in International Trade: Opportunities and Risks o f a GATT Connection, 22 V a n d . J. T r a n sn a t ’l L. 747, 861-63 (1989); Ricardo Grinspun & Robert Kreklewich, Consolidating Neo-Liberal Reforms: Free Trade as a Conditioning Framework, (May 27-29,1994) (unpublished paper presented to the International Conference on Economic Integration and Public Policy: NAFTA, the European Union and Beyond, York University, Toronto. “The new trading arrangements effectively remove many economic and social policy objectives from democratic consideration. These policy changes are directed to inhibit governments from engaging in interventionist policies in particular in the area of export promotion and import protection.”) 22. Saskia Sassen, On Concentration and Centrality in the Global City, in W orld C ities in a W orld S ystem 63, 71 (Paul Knox & Peter J. Taylor eds., 1995): [W]e are ... [s]eeing the formation of a transterritorial ‘centre’ constituted via digital highways and intense economic transactions New York, London, and Tokyo could be seen as constituting such a transterritorial terrain of centrality And at the limit we may see terrains of centrality that are disembodied, that lack any territorial correlate, that are in the electronically generated space we call cyberspace One question here is whether the type of spatial organization characterized by dense strategic nodes spread over the broader region does or does not constitute a new form of organizing the territory of the ‘centre’, rather than, as in the more conventional view, an instance of suburbanization or geographic dispersal. See also S askia S assen , T he Global C ity : N ew Y ork , Lo n d o n , T okyo (1991); He r b er t I. S chiller , Inform ation Inequa lity : T he D eepening S ocial C risis in A merica xvi (1996): [T]he information crisis-denial of access and debased messages and images—deepens social inequality and intensifies] the general social crisis. . . . [T]he media informational sector... [h]as become a major site of employment and income (domestic and international), and also provides an increasingly integrated symbolic environment from which the nation derives its ideas, values, expectations.. . . The character and quality of message and image flow, therefore, is a crucial terrain of contestation in the time ahead.

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In particular, disparities between North and South23 are most pronounced as to the question o f “free trade” and its relationship with the idea o f “development.”24 The question facing the postwar architects o f the world economic order was, Now that colonialization has ended, how do we move on?25 In the 1960s, development o f the Third World was seen as crucial, and the means whereby development would occur was via technological transfers.26

23. Anthony D. Taibi, Racial Justice in the Age of the Global Economy: Community Empowerment and Global Strategy, 44 D uke L.J. 928, 975 n.118 (1995): [T]he disparity between the richest countries in the world (bearing in mind that at least half of our people are not so rich) and the poorest in terms of income and access to basic resources (safe drinking water, sufficient caloric intake, medical attention and sanitation, education, and so on) is about 150 to 1 The North with about one-fourth of the world’s population, consumes 70% of the world’s energy, 75% of its metals, 85% of its wood and 60% of its food. (citing Human Development Report 1992, U. N. Development Programme, at 34 (1992)). 24. See generally Report o f the Working Group ofGovernmental Experts on the Right to Development, U.N. Commission on Human Rights, U.N. Doc. E/CN. 4/1489 (1982); U.N. Declaration on the Right to Development, G.A. Res. 41/128, U.N. GAOR, 41st Sess., Supp. No. 53, at 186, U.N. Doc. A/41/53 (1986); C hristopher C hase -D u n n , G lobal F orm ation : S tructures of the W orld -E conom y (1989); A rturo E sc o ba r , Encountering D evelopm ent : T he M aking a n d U nm aking of the T hird W orld (1995); K athy M c A fee , S torm S ig n a ls : S tructural A djustm ent a n d D evelopment A lternatives in the

(1991); Russell Lawrence Barsh, The Right to Development as a Human Right: Results o f a Global Consultation, 13 H u m . R t s . Q. 322 (1991); Enrique R. Carrasco & M. Ayhan Kose, Income Distribution and the Bretton Woods Institutions: Promoting an Enabling Environment for Social Development, 6 T r a n sn a t ’l L. & C ontem p . P ro bs . 1 (1996); Arturo Escobar, Reflections on DevelopmentGrassroots Approaches and Alternative Politics in the Third World, 24 Futures 411 (1992); The Myth o f Development, supra note 21; Elizabeth M. Iglesias, Human Rights in International Economic Law: Locating the Latinas/os in the Linkage Debates, 28 U. M iami Inter -A m . L. R e v . 361(19961997); James C. N. Paul, The Human Right to Development: Its Meaning & Importance, 25 J. M arshall L. Re v . 235 (1992); Richard Warren Perry, Rethinking the Right to Development: After the Critique o f Development, After the Critique o f Rights, 18 Law & P o l ’y 225 (1996); L. Amede Obiora, Beyond the Rhetoric o f a Right to Development, 18 Law & P o l ’y 355 (1996). 25. See Elliot M. Burg, Law and Development: A Review of the Literature & A Critique o f “Scholars in Self-Estrangement,” 25 A m . J. C omp . L. 492 (1977); John Henry Merryman, Comparative Law and Social Change: On the Origins, Style, Decline & Revival o f the Law and Development Movement, 25 A m . J. C om p . L. 457 (1977); Robert Seidman, Law and Development: A General Model, 6 Law & Soc’y R e v . 311(1972); David M. Trubek & Marc Galanter, Scholars in Self-Estrangement: Some Reflections on the Crisis in Law and Development Studies in the United States, 1974 Wis. L. Re v . 1062. 26. See Perry, supra note 24, at 236-37: To understand the post-War development project, we must situate it historically alongside the Marshall Plan, its “foreign aid” cousin, whose goal was to counter the Soviet Union’s menace to the United States’ primacy in Europe through strategic infusion of U.S. capital for the redevelopment of Europe’s economic infrastructure. Indeed, the development framework for North-South geopolitical relations was no less integral to the new post-World War II world order than was the East-West strategic confrontation that we know as the Cold War Arturo Escobar... argues that, from the late 1940’s ,... paleo-colonial notions of development underwent a paradigm shift as the Truman-era development agenda engendered its logical counterpart, a new C a r ib b e a n

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An explicit assumption o f development theories o f this period was that the United States and Western European nations achieved a high level o f development because o f their intellectual property systems that fostered innovation; therefore, what worked for the West should work for the rest.27 One main push during this period was for the countries o f the developing world to adopt intellectual property regimes based on transplanted U.S. and European models; technological advancement would take care o f itself.28 Unfortunately, development did not occur on this unilinear model, and during the 1970s, development o f the sort that aimed to make the Third World look like the First World received increasing criticisms as uneven development persisted.29 During the 1980s and 1990s, structural adjustment policies advanced by the IMF and

conceptualization of underdevelopment. . . . The Truman-era development agenda would setthe conceptual framework, the ground-rules, according to which the First and Second Worlds would contend for hegemony over the newly christened Third. 27. Id. at 237-38: The dualist model of development/modernization theory depicts the “problem” of underdevelopment as a matter to be remedied by a benign process through which the “modem world”, together with the “advanced” (“Westernized,” “modernized,”) elite sectors of “backward” societies collaborate to “overcome” those societies’ recalcitrant “traditionalism” that stood as a barrier to their progress. One implication of this conceptual framing was that persevering resistance to Western hegemony - in either its classically colonialist or neocolonialist forms - now could be marginalized not simply as anti-Western, but also as anti-modem, as a stubborn obstacle in the one-way street of progress, as anti-development. See also Gana, The Myth o f Development, supra note 21, at 349 n.39. The theory that development is unilinear is an outgrowth of Darwinian thought which holds that progress is inevitable. According to this theory, poor countries of the world are simply replicas of developed countries at earlier stages in the[ir] development. With time, developing countries would go through their own industrial revolution and eventually achieve a level of development comparable to developed countries. Margaret Chon, Postmodern “Progress’*: Reconsidering the Copyright and Patent Power, 43 D e P a u l L. R e v . 97(1993). 28. Gana, The Myth o f Development, supra note 21, at 346 n.24: The debate about the role of intellectual property is usually framed around the question of whether protection for intellectual property rights is a prerequisite for development. However, this question is not helpful unless the fundamental issue of differences in values that underlie political, social, and legal institutions in countries is factored into the models of protection for intellectual property. 29. See, for example, the work of Dependency theorists who critiqued the unilinear model of development, arguing that over rapid industrialization led to underdevelopment, A n d r e GUNDER F r a n k , C a pita l ism a n d U n d e r d e v e l o pm e n t in L atin A m e r ic a : H isto rica l S tu d ie s o f C h ile a n d B r a zil (1967); K e it h G r if f in , U n d e r d e v e l o p m e n t in S pa n ish A m e r ic a (1969); F r a n c es S t e w a r t , T e c h n o l o g y a n d U n d e r d e v e l o pm e n t (1977); Im m a n u e l W a lle r ste in , T h e M o d e r n W o r l d -S y st e m (1974). But see E r n e sto L a c l a u , po l it ic s a n d Id e o l o g y in M a rx ist T h e o r y : C a pita lism , F a sc ism , P o pu l ism (1977); M a r g a r e t C. S n y d e r & M a ry T a d e sse , A f r ic a n W o m en a n d D e v e l o p m e n t : A H ist o r y : T h e St o r y o f t h e A f r ic a n T r a in in g a n d R e se a r c h C e n t e r f o r W o m en o f t h e U n ite d N a tio n s E c o n o m ic C o m m issio n fo r A fr ic a

(1995).

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the World Bank tended to encourage privatized development.30 By the early 1990s, with the enactment o f TRIPS, Third World countries might be thought o f as being coerced into joining GATT, which literally said to Third World countries: If you want to export your goods, agricultural and otherwise, you must protect the intellectual properties o f other nations. Thus, the cotton that passes out o f Malaysia at one dollar per pound returns as a tshirt bearing the trademarked image o f Mickey Mouse or Bart Simpson selling for twenty-five dollars.31 Under the ideological banner o f “free trade,” the intellectual property regimes o f the developed nations were given expanded reach— in other words, rules that purportedly were meant to encourage and protect creative expression and scientific innovation were now put in place, giving owners the legal means to reach extraterritorially into Third World countries to prevent unauthorized use.32 TRIPS also places important constraints on the sovereignty o f nations o f the developing world to implement innovation schemes based on local and regional considerations, factors which may differ drastically from country to country and industry to industry. Ruth Gana writes: Given the history o f the international intellectual property system, the notion that either the pre- or post-TRIPS multilateral system is based upon consensus is still a myth as

30. 50 Y ea rs Is E n o u g h : T he C a se A g a in s t t h e W o r l d B a n k a n d th e In ter n a tio n a l M o n e ta r y F u n d , supra note 11; P e r pet u a t in g P o v e r t y : T h e W o r l d B a n k , t h e IM F, a n d th e D e v e l o pin g W o r l d , supra note 11; Victor L. Urquidi, Reconstruction vs. Development: The IMF and the World Bank, in T he B r e tt o n W o o d s -G A TT S y s t e m : R e tr o spe c t an d P ro spe c t A fte r F ifty Y ea rs 30 (Orin Kirshner ed., 1996). 31. Keith Aoki, The Stakes o f Intellectual Property Law, in T h e P olit ic s o f L a w : A P r o g r e ssiv e C r it iq u e , 259 (David Kairys ed., 3d ed. 1998). See also Aoki, supra note 19; Rosemary J. Coombe, The Cultural Life o f Things: Anthropological Approaches to Law and Society in the Conditions o f Globalization, 10 A m . U. J. In t ’l . L. & P o l ’y 791 (1995). 32. Gana, The Myth o f Development, supra note 21. See also Joel R. Reidenberg, Governing Networks and Rule-Making in Cyberspace, in B o r d er s in C y b e r spa c e 84 (Brian Kahin & Charles Nesson eds., 1996); Curtis A. Bradley, Territorial Intellectual Property Rights in an Age o f Globalism, 37 V a . J. In t ’l L. 505 (1997); Dan L. Burk, Federalism in Cyberspace, 28 C o n n . L. R e v . 1095 (1996); David R. Johnson & David Post, Law and Borders: The Rise o f Law in Cyberspace, 48 S t a n . L. R e v . 1367 (1996). See generally R e st a t em e n t (T h ir d ) o f t h e F o r e ig n R e la t io n s L a w o f t h e U.S. § 402 (1987) (a state’s “jurisdiction to prescribe” may be exercised with respect to “certain conduct outside its territory by persons not its nationals that is directed against the security of the state or against a limited class of other state interests.”); Larry Kramer, Vestiges o f Beale: Extraterritorial Application o f American Law, 1991 S u p . C t . R e v . 179, 184 (“the world in which a presumption against extraterritoriality made sense is gone.”); Note, Constructing the State Extraterritorially: Jurisdictional Discourse, the National Interest and Transnational Norms, 103 H a r v . L. R e v . 1273 (1990).

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far as developing countries are concerned. Those countries that will feel the brunt o f its provisions include both the African countries that remain on the periphery o f the international market and the emerging economies in Asia whose markets are attractive to foreign investors from the developed countries.... [T]he TRIPS Agreement accomplishes, through the potential threat o f economic ostracism, what could not be accomplished through negotiations independent o f the international economic framework. . . . Copyright and patent laws will continue to extract exorbitant costs from developing countries in exchange for access to literary works, computer programs or other technology. . . . [G]iven the values reflected in the current intellectual property system, values which are deemed “universal” yet are clearly not, there is no assurance that the current framework will benefit developing countries in any significant way.33 With regard to the long-term effects o f growing disparities between the developed world and the developing world on questions o f technology transfer, Jerome Reichman has been prescient. Professor Reichman asks us to consider whether we are in control o f our institutions or whether they are in control o f us.34 By asking us to take North and South distributional consequences o f intellectual property regimes seriously, Reichman asks us to consider the long-

33. Gana, The Myth o f Development, supra note 21, at 334-35. See Ruth L. Gana, Prospects for Developing Countries under the TRIPS Agreement, 29 V a n d . J. T r a n sn a t ’l L. 735 (1996); See also Marci A. Hamilton, The TRIPS Agreement: Imperialistic, Outdated and Overproteclive, 29 V a n d . J. T r a n sn a t ’l L. 613 (1996); Samuel A. Oddi, The International Patent System and Third World Development: Reality or Myth?, 1997 D u k e L.J. 831; Samuel A. Oddi, TRIPS - Natural Rights and a (iPolite Form o f Economic Imperialism,” 28 V a n d . J. T r a n sn a t ’l L. 415 (1996); Sam Ricketson, The Future o f the Traditional Intellectual Property Conventions in the Brave New World of Trade-Related Intellectual Property Rights, 26 In t ’l R e v . In d u s . P r o p . & C o py r ig h t L. 872 (1995). 34. See J. H. Reichman, Charting the Collapse o f the Patent-Copyright Dichotomy: Premises for a Restructured International Intellectual Property System, 13 C a r d o zo A rts & E n t . L.J. 475 (1995); J. H. Reichman, Compliance With the TRIPS Agreement: Introduction to a Scholarly Debate, 29 V a n d . J. T r a n sn a t ’l L. 363 (1996); J. H. Reichman, Enforcing the Enforcement Procedures o f the TRIPSAgreement, 37 V a . J. In t ’l L. 335 (1997); J. H. Reichman, From Free Traders to Fair Followers: Global Competition Under the TRIPS Agreement, 29 N.Y.U. J. In t ’l L. & P o l . 11 (1997) [hereinafter Fair Followers]; see also J. H. Reichman, The TRIPS Component of the GATT’s Uruguay Round: Competitive Prospects for Intellectual Property Owners in an Integrated World Market, 4 F o r d h a m In t e l l . P r o p . M e d ia & E n t . L.J. 171 (1993); J. H. Reichman, Universal Minimum Standards of Intellectual Property Protection under the TRIPS Component o f the WTO Agreement, 29 In t ’l L a w . 345 (1995) [hereinafter Universal Minimum Standards].

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term effects o f international intellectual property regimes that are now being put in place. Importantly, he recharacterizes the stakes o f intellectual property protection as involving a struggle between clashing visions. On one hand, Reichman sees the nations and firms o f the developed world promoting anticompetitive, maximalist policies under the ideological banner o f “free (or fair) trade.”35 On the other hand, the interests o f the developing and least developed nations o f the Third World may be advanced by either promoting procompetitive intellectual property strategies on the national or regional level, or what Reichman refers to as “fair following,” involving “legitimate rights o f local firms to reverse-engineer unpatented foreign technologies by honest means.”36 With an eye toward long-term stabilization and relative equalization o f the field o f competition among the nations along the spectrum from North to South, developed to developing to least developing nations regarding economic relations, Reichman urges us to look critically upon the: [PJrotectionist appetites o f . . . powerful industrial combinations that have successfully captured the legislative and administrative exponents o f trade and intellectual property policies . . . [and] where the interests o f both consumers and small or medium-sized innovators are held hostage to the political influence o f oligopolistic combinations that use intellectual property rights to expand market power.37 A specific example o f this overreaching is the proposed (but rejected, for now at least) World Intellectual Property Organization (WIPO) Database Protection Treaty o f 1996.38 The economically formidable U.S. copyright and information industries recently lobbied Congress, the Commerce Department, international bodies such as WIPO (a subagency o f the United Nations), and the

35. On the free trade-fair trade distinction, see generally Robert Howse & Michael J. Trebilcock, The Fair Trade-Free Trade Debate: Trade, Labor and the Environment, 16 In t ’l R e v . L. & E c o n . 61 (1996). In some ways, the arguments that undergird both the free trade and the fair trade positions in terms of upwardly harmonizing the international trade framework carry less persuasive power in the intellectual property area than in the environmental and labor rights area. 36. Fair Followers, supra note 34, at 92. 37. Id. at 17, 25. 38. Pamela Samuelson, The U.S. Digital Agenda at WIPO, 37 V a . J. In t ’l L. 369 (1997). See also Basic Proposal on the Substantive Provisions of the Treaty on Intellectual Property in Respect of Databases to be Considered by the Diplomatic Conference, WIPO Doc. CR/NR/DC6 (Aug. 6,1996); J.H. Reichman & Pamela Samuelson, Intellectual Property Rights in Data?, 50 V a n d . L. R e v . 51 (1997).

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WTO to expand statutorily the content o f both national and international protections for intellectual property. When WIPO met in Geneva in December 1996, the copyright, media, and information industry representatives behind the Commerce Department’s White Paper o f 1995 sought to implement globally five problematic protections o f otherwise uncopyrightable information within databases39 advocated in the failed White Paper.40 Because o f vocal protests from the international scientific and legal communities, who viewed the proposed Treaty as potentially disastrous for scientific research, the proposed Database Protection Treaty was rejected, and the White Paper-like proposals were taken under consideration for further discussion by WIPO.41 What is notable is that when the U.S. copyright and information industries could not get what they wanted on the domestic level, they sought to make a supranational end run, a tactic which has had some prior success with the TRIPS component

39. The 5 significant changes in domestic U.S. Copyright law that the failed 1995 White Paper advocated (which were advocated to WIPO in December 1996) were: (1) subjecting transitory or temporary copies in a computer Random Access Memory to the copyright owner’s exclusive right to authorize reproductions thereby making RAM copies into infringing copies; (2) treating digital transmissions of copyrighted works as distributions to the public, thereby subjecting Internet Service Providers to a strict liability contributory infringement scheme; (3) imposing criminal sanctions as the penalty for tampering with copy-protection or management of digital texts; (4) curtailing the ability of states to make exceptions or limits on the exclusive rights of copyright owners, thereby modifying the “fair use” defense by instituting a problematic commercial and noncommercial use distinction and limiting first sale privileges; and (5) allowing copyright owners to challenge the manufacture and sale of technology or services that could circumvent copy-management or protection technology. In addition, the United States wanted WIPO to create a sui generis legal protection for the contents of databases. On the December 1996 WIPO discussions, see Peter H. Lewis, 160 Nations Meet to Weigh Revision o f Copyright Law, N .Y . T im e s , Dec. 2, 1986, at Al. See also James Love, Archive of WIPO Database Protection Materials (visited Sept. 22,1998) (assembled by James Love of Taxpayer Assets Project and Consumer Project on Technology); Samuelson, supra note 38, at 372-73. 40. See Basic Proposal on the Substantive Provisions of the Treaty on Intellectual Property in Respect of Databases to be Considered by the Diplomatic Conference, WIPO Doc. CR/NR/DC6, art. 10 (August 30, 1996); Basic Proposal on the Substantive Provisions of the Treaty on Certain Questions Concerning the Protection of Literary and Artistic Works to be Considered by the Diplomatic Conference on Certain Copyright and Neighboring Rights Questions, WIPO Doc. CR/NR/DC4, art. 7(1), 13, 14 (August 30, 1996). See generally Samuelson, supra note 38. 41. See Draft WIPO Copyright Treaty, supra note 18. See also Samuelson, supra note 18; Caruso, supra note 18 (describing the bill that incorporated the White Paper’s proposals as “failed legislation”).

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o f GATT.42 Moving away from concerns about corporate ethnobotanists rifling through the shaman’s bag in search o f pharmaceutical miracles or designing legal protections for elections swirling globally in cyberspace, consider the printed book, a more quotidian item from the Age o f Gutenberg,43 and how maximalist visions o f internationalized copyright may negatively affect the educational and research capacity o f nations in sub-Saharan Africa, Asia, or Latin America.44 During the nineteenth century, the United States was considered to be the

42. See Final Act Embodying the Results of the Uruguay Round ofMultilateral Trade Negotiations, Legal Instruments Embodying the Results of the Uruguay Round of Multilateral Trade Negotians Done at Marrakesh on April 15,1994, vol. 1; Annex 1C Agreement on Trade-Related Aspects of Intellectual Property Rights, Legal Instruments Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations Done at Marrakesh on April 15,1994, vol. 31,331.L.M. 81 (1994). For the U.S. ratification of the TRIPS component of the WTO Agreements, see Uruguay Round Agreements Act, Pub. L. No. 103-465, §§ 101-103,108 Stat. 4809 (1994). See also Universal Minimum Standards, supra note 34; Has Creativity Died in the Third World?, supra note 21. 43. See Philip G. Altbach, The Subtle Inequalities of Copyright, in C o py r ig h t a n d D e v el o pm e n t , supra note 17, at 1, 2, 5: There is, in reality, a difference between a Mickey Mouse Watch, a Hollywood film, or even a computer software program, on the one hand, and a scientific treatise, on the other. Textbooks, technical reports, and research volumes are subject to the same copyright regulations as a novel by James Clavell. Those who control the distribution of knowledge treat all intellectual property equally—and are perfectly happy to deny access to anyone who cannot pay [I]t is important to realize that the international knowledge system is highly unequal, and it can be argued that those who are in control of the system-and specifically copyright arrangements-have a special responsibility to assist in the intellectual and educational development of the Third World. There is a kind of OPEC of knowledge in which a few rich nations and a small number of multinational publishers have a great deal of control over how and where books are published, the prices of printed materials, and the nature of international exchange of knowledge. 44. HenryM. Chakava, International Copyright and Africa: An Unequal Exchange, in C o p y r ig h t an d D e v e l o pm e n t , supra note 17, at 18: One can only assume that African countries have chosen to sign [onto the Berne Convention] because they believe this will facilitate the flow of knowledge from the North to their own countries [T]he reality of the situation is that these rights holders [in the North] do not appear keen to extend printing licenses to African publishers. Instead they are using copyright as a weapon to maintain the dependency relations that currently exit. The African signatories have arrogated themselves the role of collecting copyright fees from their own people and remitting these to the owners in the North. This has serious repercussions for the cost of education, and for the future of the education industries in Africa. When Africa finally [achieves] the necessary economic, production and distribution infrastructures... to permit proper commercial publishing to emerge . . . [Africa] will replace Asia as the battleground for piracy and other copyright infringement battles presently raging in the rest of the world.

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“Barbary Coast” o f intellectual property.45 The United Nations Educational, Social & Cultural Organization (UNESCO) reports that in 1993 , while “Africa ha[d] 12% ofthe world’s population, itproduc[ed] only 1.2% o f its books, and that this percentage is declining [Furthermore, Africa] controls only about 0.4% o f the world’s intellectual property.”46 By comparison, North America, which has roughly five percent o f the world’s population, produces thirteen percent ofthe world’s books. Similarly, papers, journals, magazines, and “80% o f the world ’s knowledge industries are based in the North [where their output] is copyrighted.”47 There is a strong case to be made that African nations should be able to enact local copyright laws that allow for compulsory licensing, expanding and strengthening rules regarding exemptions for education and research purposes, simplifying copyright assignment clauses, and working toward a multilateral reduction in copyright term duration.48 Admittedly, the tenor o f the U.S. copyright industry’s interpretation o f TRIPS runs counter to these sorts o f proposals, but at the very least, one should consider the importance o f books and journals, particularly educational and scientific texts and in terms o f generating local innovation, to the developing and least developed countries. Philip Altbach writes: Copyright, after all, is a moral and ideological concept as well as a legal and economic one. There is no recognition that the

45. Altbach, supra note 43, at 8 : One of the most egregious violators of copyright in the nineteenth century was the United States, which felt, probably incorrectly, that it could build up its domestic publishing industry most effectively by freely reprinting works from abroad while protecting the rights of domestic authors. Once American publishing was well developed, the United States became a defender of copyright. Until the 1960s, the Soviet Union had a similar perspective-international copyright was violated as the country used knowledge from abroad for its own purposes. China had a similar perspective up to the 1990s and has only recently joined the international copyright system. Nations must see copyright as in their best national interest before they become fully supportive of it. See also A u b e r t J. C l a r k , T h e M o v e m e n t f o r I n t e r n a t i o n a l C o p y r ig h t in N i n e t e e n t h C e n t u r y A m e ric a (1960). 46. Chakava, supra note 44, at 13, 17, 19. 47. Id. at 17. 48. See generally id.\ Gana, The Myth of Development, supra note 21; Amadio A. Arboleda, Distribution: The Neglected Link in the Publishing Chain, in P u b lis h in g in t h e T h i r d W o r l d : K n o w le d g e A n d D e v e lo p m e n t 42, 44 (Philip G. Altbach ed., 1985) (“Even meeting the basic needs for achieving mass distribution, i.e., adequate book manufacturing equipment, distribution equipment, display equipment, a distribution system and plan (including transportation), necessary capital, an adequate editorial and production staff, and tax relief, is beyond the capabilities of publishers in most developing countries!’).

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legacy o f colonialism and the power o f multinationals has, to a significant extent, created the current highly unequal world knowledge system. It is, o f course, much easier for the “haves” to cling to the economic and legal system that has given them a virtual monopoly over the world’s knowledge products than to recognize that we live in an interdependent world and that the Third World desperately needs access to knowledge and technology [These needs] are not limited to the poor countries o f the developing world. For example, M oscow’s famed Lenin Library is no longer purchasing any scientific journals from the West because there is no allocation o f “hard currency” funds. Few, if any, other libraries or academic institutions in the former Soviet Union are able to obtain access to key books and journals in the current circumstances. The situation is even more desperate for many sub-Saharan African countries, where purchases o f books and journals from abroad ceased several years ago because o f lack o f funds. . . . The end o f conflicts in such countries as Cambodia, Laos, Uganda, Angola, Ethiopia and others has permitted them to turn their attention to the rebuilding o f educational and library systems— and there is a desperate need for books o f all kinds.49 One troubling example o f the unidirectional drain o f intellectual resources from the Third World is the research area o f African oral literatures and traditions. These cultural stories and practices do not belong to any individual; instead, they are the cultural property o f ethnic groups or nations. However, as soon as researchers (with most coming from the North) collect this cultural and traditional material, and copyright the resulting compilation, no one can use the

49. Altbach, supra note 43, at 7.

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material without the researcher’s permission.50 The pattern is becoming depressingly familiar: resources flow out o f the Southern regions and are transformed by Northern entrepreneurial authors and inventors into intellectual properties, which in many cases are priced so high that the people from whom such knowledge originated cannot afford to license them. It is important that intellectual property policy, whether on the domestic or international level, should not be driven solely by the maximalist imperative. The maximalist logic seems to be that if a little bit o f protection is good, then a lot will be better, leading us to levels o f intellectual property protection spiraling ever upward. There is no consideration o f the idea that traditional intellectual property law has been concerned with striking a balance between society’s interests and those o f individual creators. Reichman importantly reminds us that traditionally intellectual property policy has sought to strike this balance between incentives or rewards to creators and the interests o f users, consumers and competitors— the public. Furthermore, by ignoring the importance o f this idea o f a necessary balance and opting for over-protection, we may “m isallocate... scarce resources devoted to research and development and . . . reduce the efficiencies that flow from reverse-engineering and from cumulative, sequential innovation generally.”51 Also in the international arena, policies that produce oligopolistic barriers block entry for firms in the nations o f the least-developed and developing world. As legal regimes o f the world’s developed nations steadily expand the scope o f property rights in information, many decision makers begin opting for multilateral and supranational intellectual property regimes. As transnational intellectual property regimes begin setting minimum standards o f protection, traditional territorial and political notions o f sovereignty are eroded. This occurs in large part because entities holding increasingly large blocks o f intellectual property rights are not nations, but instead are “private” multinational corporations. The irony is that such entities must then assert the

50. Chakava, supra note 44, at 20. Africa’s leading fiction writers are published in the North, mostly in Britain, France and the United States. The majority ofthem sprang into prominence in the 1950s and 1960s when the African publishing industry was either at its nascent stage, or did not exist at all. They continue to be published in those centers because local African industries are not yet sufficiently developed to provide maximum exposure to their works— [This is] a sad reality for the 34 African countries that ascribe to the Beme Convention and constitute the largest members from any continent. Id. at 19. 51. Fair Followers, supra note 34, at 24.

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“sovereignty” o f domestic intellectual property laws to underwrite their ownership claims.52 It is on the level o f national sovereignty that countries o f the least-developed and developing world may be able to make strong arguments for a procompetitive interpretation o f TRIPS. It is here that Reichman argues for striking a balance among producers, competitors, users and consumers, with a view towards long-term stabilization, rather than short-term maximum returns, to an increasingly concentrated small number o f transnational producers based in the nations o f the developed world. II. T he Q uestion of D efining a n d P rotecting a n Intellectual “C om m o ns ”

A recent article by Michael Heller entitled, The Tragedy o f the Anticom m ons: Property in the Transition From M arx to M arkets53 is a very good place to begin looking at some o f the questions about how many and what types o f intellectual property rights we want to confer, as well as the equally important question o f what things do we not want to “propertize” or “thingify.”54 To begin, Heller discusses Garrett Hardin and his famous evocation o f the Tragedy o f the Commons55that arises when too many people have a privilege to use a resource and no one user has a legal right to exclude any other user— the result is over consumption and depletion o f the resource. By contrast, to Heller, a “Tragedy o f the Anticommons” occurs when “too many owners hold[] rights o f exclusion, the resource is prone to underuse.”56 One o f the examples Heller uses to demonstrate the “Tragedy o f the Anticommons” is post-1989 M oscow storefronts that remain empty, even as

52. Aoki, supra note 19. 53. Michael A. Heller, The Tragedy o f the Anticommons: Property in the Transition from Marx to Markets, 11 H a r v . L. R ev. 621 (1998); see also Duncan Kelly & Frank Michelman, Are Property and Contract Efficient?, 8 H o f s t r a L. R ev. 711 (1980). 54. Legal realist Felix Cohen gave an example of “thingification” in 1935: Nobody has ever seen a corporation. What right have we to believe in corporations if we don’t believe in angels? To be sure, some of us have seen corporate funds, corporate transactions, etc But this does not give us the right to hypostatize, to “thingify” the corporation, and to assume that it travels about from State to State as mortal men travel. Felix Cohen, Transcendental Nonsense and the Functional Approach, 35 C o lu m . L. R ev. 809, 811 (1935). 55. Garrett Hardin, The Tragedy o f the Commons, 162 S c ie n c e 1243 (1968). Heller, supra note 53, at 624-25; see also Harold Demsetz, Toward a Theory o f Property Rights, 57 Am. E c o n . R ev. 347 (1967) (discussing how private property rights are one solution to the “Tragedy of the Commons” insofar as they require users to internalize the costs of consuming the resource). 56. Heller, supra note 53, at 624.

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flimsy metal kiosks proliferate.57 Underlining the contingency o f our property classifications, Heller identifies three key elements o f socialist property law that became problems as Soviet law transitioned to a market economy: (1) a hierarchy o f property, placing state property with the most protection and socalled “private property” with the least protection;58 (2) the objects o f greatest economic value, such as land, were defined as unitary and said to belong to “the people;”59and (3) there were divided, multiple, and overlapping rights to control socialist property that resided in various levels o f the state bureaucracy60— no individual “owner” was assigned to a particular object. The problem was that too many “owners” possessed a “right to exclude” related to a particular object o f property such that it remained underutilized.61 A crucial difference between Hardin’s “Tragedy o f the Commons” and Heller’s “Tragedy o f the Anticommons” is what happens with the “right to exclude.”62 In the commons situation, part o f the problem is that no one has the

57. Id. at 631. The working hypothesis in this section is that private property emerges less successfully in resources that begin transition [from a socialist to a market economy] with the most divided ownership. In such resources, poorly performing anticommons property is most likely to appear and persist. In contrast, private property emerges more successfully in resources that begin transition with a single owner holding a near-standard bundle of market legal rights. 58. Id. at 628-29. Socialist law erected a hierarchy based on the level of protection afforded property held by different owners. At top was socialist property, which received the most protection. Next came cooperative property, which received similar but somewhat less protection. Personal property received still less protection. The residual category of private property was abolished altogether in the Soviet Union; the rest of the socialist world gave it the least protection from taxation, regulation, and confiscation. 59. Id. at 629. [A]ll productive assets were in principle “unitary” and belonged to the “people as a whole,” socialist law did not delineate the ordinary physical boundaries— In the early years of the transition from socialism, private owners and public officials often could not answer the question, “Who controls the land on which we stand?” 60. Id. (“Instead of assigning an owner to each object, socialist law created a complex hierarchy of divided and coordinated rights in the objects it identified [that could be] loosely compare[ed] to Western forms of trust ownership.”). 61. Professor Heller gives many other examples of anticommons property, such as the Sergeant Preston of the Yukon-Quaker Oats one-square inch of land giveaway in the 1950s. Other examples include restrictive covenants in deeds or land use permitting processes where multiple parties exercise what could be thought of as the “right to exclude” certain types of development. See id. at 679 n.259. 62. Id. [F]our categories of rights-holders emerged during the transition. Each of these categories of rights-holders are ‘owners’ in the sense that they could block other rightsholders from using a store without permission (a) Owners,. . . (b) Users,.. . (c) Balance-sheet Holders,... [and] (d) Regulators.... The Moscow storefront thus meets

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right to exclude, thereby giving rise to over-utilization and depletion. By contrast, with the anticommons situation, too m any parties independently possess the right to exclude, giving rise to under-utilization— tragedy o f the anticommons.63 In one situation, the “bundle o f sticks” comprising property rights lacks a significant “stick”— no one party is able to exclude any other party from the “commons.” In the other situation, the significant “stick” (the right to exclude) is broken up and held by many parties— any o f whom may exercise the right. Many traditional aspects o f U.S. intellectual property law seem to intuitively reflect Professor Heller’s observations about the problem o f “too many” potential owners.64

my definition of anticommons property, that is, a property regime in which multiple owners hold rights of exclusion in a scarce resource. Id. at 636-39. 63. Importantly, one should note that Professor Heller states thatthe anticommons is not always tragic-he points out that “Elinor Ostrom has shown that people may be able to manage non-private property efficiently by developing and enforcing stable systems of informal norms.” Id. at 674-75 (citing to E l i n o r O s tr o m , G o v e r n in g t h e C o m m o n s: T h e E v o l u t i o n o f I n s t i t u t i o n s f o r C o l l e c t i v e A c tio n 58-102 (1990)). Additionally, Professor Heller points out that: [SJome resources may be most efficiently held as anticommons [Including] familiar property rights arrangements, such as a scheme of restrictive covenants in a residential subdivision. . . [T]o the extent that creating such a scheme increases property values more than it imposes negative externalities, the developer’s decision to convert raw land to anticommons form can be an efficiency-enhancing move. Id. (citing Carol Rose, The Comedy o f the Commons: Customs, Commerce and Inherently Public Property, 53 U. Chi. L. R ev. 711 (1986)).

64. For example, consider the statutory rules and case law surrounding the works-made-for-hire doctrine, that seeks to clarify and consolidate ownership rights for commissioned works and works made as part of an employment relationship. In the absence of such rules, one could imagine an anticommons situation. See 17 U.S.C § 201 (1996): In the case of work made for hire, the employer or other person for whom the work was prepared is considered the author for purposes of this title, and, unless the parties have expressly agreed otherwise in a written instrument signed by them, owns all of the rights comprised in the copyright. See also the definition of “work made for hire” at 17 U.S.C. § 101(1996); Community for Creative Non­ violence v. Reid, 490 U.S. 730 (1989); cf Aymes v. Bonelli, 980 F.2d 857 (2d Cir. 1992) (stating that provisions of employee benefits and tax treatment are the most important factors in determining whether a person is an independent contractor or employee). Consider also the Joint Works category, for which a deliberate intent must be shown to have created a collaborative work. See 17 U.S.C. § 101 (1996) (“A ‘joint work’ is a work prepared by two or more authors with the intention that their contributions be merged into inseparable or interdependent parts of a unitary whole.”); see also Childress v. Taylor, 945 F.2d 500 (2d Cir. 1991); Margaret Chon, New Wine Bursting From Old Bottles: Collaborative Internet Art, Joint Works, and Entrepreneurship, 75 Or. L. R ev. 257 (1996). Alternately, in terms of creating potential “anticommons” situations in the patent area, consider the “shop right” doctrine, that grants a nonexclusive license to the employer of an inventor who comes up with a patentable invention. See D o n a l d S. C h isu m & M i c h a e l A. J a c o b s , U n d e r s t a n d i n g I n t e l l e c t u a l P r o p e r t y L a w at § 2g[l] (1992) (“If an employee uses his employer’s resources to conceive of or reduce to practice an invention, the employer acquires a ‘shop right’, a nonexclusive royalty-free, non-transferable license

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Heller mentions how he and his colleague, Rebecca Eisenberg, are working on an anticommons analysis o f how expanding the scope o f patentable subject matter to include basic biomedical research may lead to the development o f fewer useful pharmaceutical products— an underutilization o f the information or knowledge.65 At the very least, one can imagine a variety o f licensing schemes in which multiple licensees or holdouts might exercise their licenses to exclude other researchers working along similar lines involving patented technology. Alternately, one might conceive o f a situation that conceptually resembles the 1987 Supreme Court case, H odel v. Ir v in g 6 (which Heller describes as a spatial anticommons), in which a formerly unitary patent right to a pioneer technology becomes so splintered that the development o f the

to make and use the invention.”); see also Womack v. Durham Pecan Co., Inc., 715 F.2d 962,219 U.S.P.Q. 1153 (5th Cir. 1983). Also, consider the geographic scope of a common-law trademark-it is possible for multiple trademark proprietors to have exclusive rights in the same mark in different regions of the country. See D o n a l d S. C h isu m & M ic h a e l A. J a c o b s , U n d e r s t a n d i n g I n t e l l e c t u a l P r o p e r t y L a w at § 5E[2] (1992): At common law, a manufacturer or merchant’s trademark rights geographically extended only to markets in which he sold the trademark bearing-goods. Notwithstanding the first use priority rule, a second user could obtain exclusive trademark rights by adopting and using in good faith in a remote market a mark similar or identical to a first user’s. See also Hanover Star Milling Co. v. Metcalf, 240 U.S. 403 (1916); United Drug Co. v. Rectanus Co., 248 U.S. 90 (1918). The federal Lanham Act addresses this problem by instituting a national registry for trademarks. See 15U.S.C. § 1051 (a) (1997) (providing for registrations for trademarks used in commerce), and (b) (providing for registration of trademarks intended to be used in commerce). 65. See Heller, supra note 53. In a forthcoming article [Upstream Patents and Downstream Products: A Tragedy o f the Anticommons?], Rebecca Eisenberg and I use an anticommons analysis to show how increased patentability of basic biomedical research may lead to the development of fewer useful pharmaceutical products.. . . Another intellectual property example occurs in the emerging multimedia field, in which multiple ownership and licensing requirements could create a ‘Brady Bunch anticommons. ’ Use of The Brady Bunch has required agreement from each of the actors portraying Brady kids (and their parents, while the actors were still minors), the Brady parents, and the Brady housekeeper, Alice-as is typical of licensing agreements for such shows. Id at 679 n.259. 6 6 . Hodel v. Irving, 481 U.S. 704 (1987); see also Babbitt v. Yuopee, 117 S. Ct. 727 (1997).

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relevant technology is seriously hindered.67 Or one might imagine an impasse, such as the case with the development o f radio technology prior to World War I, where two economic competitors held key components to radio technology and neither would cross-license to the other.68 The impasse was ultimately broken by the U.S. government which needed radio technology in the war effort and managed to force the parties holding blocking patents to work together. Similarly, granting or expanding proprietary rights in fundamental aspects o f things such as the basic information in databases69or functionally necessary

67. Theoretically, at least, the doctrines of denying protection to utilitarian aspects of useful goods and the dichotomy between idea and expression in copyright law work to ensure that the basic ideas remain nonproprietary. Similarly in trademark law, the idea of aesthetic functionality (or functionality in the design patent area) works to keep certain basic design features from becoming proprietary. And the unpatentability of mathematical formula, naturally occurring substances, and the laws of nature works conceptually similarly in Patent. Needless to say, while these doctrines serve to avoid anticommons property situations, at the margins of all of these areas, there is substantial doctrinal confusion about where to draw the line between protection and unprotectability. See generally I. H. Reichman, Legal Hybrids Between the Patent and Copyright Paradigms, 94 C o lu m . L. R ev . 2432 (1994). 68. D a v id F. N o b le , A m e ric a b y D e sig n : S c ie n c e , T e c h n o lo g y a n d t h e R ise o f C o r p o r a t e

93-94(1997): By the beginning of World War I, a number of companies had arrived at a stalemate with regard to radio development, due to mutual patent interferences. During the war, when the government guaranteed to protect the companies from infringement suits, research in radio proceeded at a rapid pace. The close of the war, however, brought with it a renewed deadlock. “Ownership of the various patents pertaining to vacuum tubes and circuits by different concerns prevented the manufacture of an improved tube for radio use.” In addition to domestic competition, there was a very real possibility that control over radio might be secured by the British Marconi Company, which was trying at the time to obtain rights to the necessary GE-controlled Alexanderson alternator.

C a p ita lis m

In light of this threat to American supremacy of the airwaves, Woodrow Wilson and a number of armed-forces representatives prevailed upon GE to withhold the necessary patent rights and set up instead an American-owned company to control radio. In late 1919, GE thus established the Radio Corporation of America . . . and transferred its assets, along with the Alexanderson and other GE-owned patents, to RCA. The industry-wide impasse nevertheless remained, and “the only solution... was to declare a truce: get together and draw up an agreement defining the rights of the various squatters on the frontiers of science.” The truce was declared between AT&T [that controlled the Lee DeForest-invented vacuum tube] and GE in the license agreement of July 1, 1920, and within the following year . . . the other companies in the patent conflict joined the radio-patent pool [T]he agreements kept all who were not party to them out of the radio field. 69. See generally Reichman & Samuelson, supra note 38; see also Samuelson, supra note 38.

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computer programs70may have the unintended consequence o f bringing about a situation o f underutilization and lower innovation and competition with regard to those items. Looking to an even earlier time, consider how copyrights in maps and navigational charts were seen as giving rise to either a monopoly on descriptions o f geographic and navigational features o f coastlines or to an underutilization o f navigational charts.71 Benjamin Kaplan has pointed out that one reason legal documents (conceived o f as legal “maps”) have generally not been thought o f as possessing thick copyrights is that doing so might create situations where too many people would be drafting around earlier legal documents creating an unacceptable level o f unpredictability.72 In a sense, to give strong legal protection to legal boilerplate would create an anticommons situations where law firms would expend wasteful amounts o f time exercising and policing their “property rights” in legal language. Similarly, under traditional understandings o f trademark law, generic or common descriptions o f goods,73mere geographic designations o f origin74and surnames75were not considered susceptible to proprietorship without a showing that they had acquired “secondary meaning” in the minds o f relevant consumers.76 Until recently, trade dress, those aspects o f a product that

70. See generally Pamela Samuelson, Fair Use for Computer Programs and Other Copyrightable Works in Digital Form: The Implications o f Sony, Galoob & Sega, 1 J. I n t e l l . Prop. L. 49 (1993); Sega Enters., Ltd. v. Accolade, Inc., 977 F.2d 1510 (9th Cir. 1992); Atari Games Corp. v. Nintendo of Am., Inc., 975 F.2d 832 (Fed. Cir. 1992). 71. Mason v. Montgomery Data Inc., 967 F.2d 135 (5th Cir. 1992) (finding about the maps in question that ( 1) the merger doctrine did not apply (idea and expression merge, and expression is unprotectable) and (2 ) they possessed sufficient originality to qualify for copyright protection); see also U.S. v. Hamilton, 583 F.2d 448 (9th Cir. 1978); Jane C. Ginsburg, Creation and Commercial Value: Copyright Protection o f Works of Information, 90 C o lu m . L. R ev . 1865 (1990). But see David B. Wolf, Is There Any Copyright Protection for Maps after Feist?, 39 J. C o p y r ig h t Soc ’Y 224 (1992); Kern River Gas Transmission Co. v. Coastal Corp., 899 F.2d 1458,1460 (5th Cir. 1990) (stating that because the idea and its expression embodied in plaintiffs maps are inseparable, “the maps at issue are not copyrightable”), cert, denied, 111 S. Ct. 374 (1990). 72. B e n ja m in K a p la n , A n U n h u r r i e d V iew o f C o p y r ig h t 64-65 (1967) (criticizing the Continental Casualty Co. v. Beardsley case in which the Second Circuit found copyright infringement liability for use of an insurance claim form. Kaplan wrote, “the effect of the decision may be to force users to awkward and possibly dangerous recasting of the legal language to avoid infringement actions.”). 73. King-Seeley Thermos Co. v. Aladdin Industries, Inc., 321 F.2d 577 (2nd Cir. 1963); Anti-Monopoly, Inc. v. General Mills Fun Group, 684 F.2d 1316 (9th Cir. 1982). 74. 15 U.S.C. § 1052 (e) (2) (1997); American Waltham Watch Co. v. United States Watch Co., 173 Mass. 85 (Mass. 1899); In re Nantucket, Inc., 677 F.2d 95 (C.C.P. A. 1982); In re House ofWindsor, Inc., 221 U.S.P.Q. 53 (T.T.A.B. 1983). 75. 15 U.S.C. § 1052 (e)(4)(l 997); In re Application of Harris-Intertype Corp., 518 F.2d629(C.C.P.A. 1975). 76. Zatarain’s, Inc. v. Oak Grove Smokehouse, Inc., 698 F.2d 786 (5th Cir. 1983); In re Application of Synergistics Research Corp., 218 U.S.P.Q. 165 (T.T.A.B. 1983).

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involved its shape or packaging, was not considered protectable unless it was nonfunctional or inherently distinctive. Until the Two Pesos case in 1992,77 it was necessary to show a secondary meaning as well. After Two Pesos, no showing o f secondary meaning is required, thereby expanding the scope o f trade dress protection. These doctrines were all common-sense recognitions that allowing property ownership (the right to exclude) to vest in things like ideas,78 facts,79 mathematical formulas,80 laws o f nature,81 and common descriptive words or phrases would lead to underutilization o f intellectual works incorporating those preexisting, fundamental building blocks.82 Intuitively and implicitly, the traditional intellectual property understandings o f what was considered to be in the public domain was seemingly an attempt to avoid a “tragedy o f the anticommons.” One key difference between Moscow storefronts and patents or copyrights is that intellectual property rights do not involve a tangible boundary, but rather a conceptual boundary— a boundary demarcated by the legal line between that which is considered to be in the public domain (ideas; functional aspects o f useful goods and facts distinguished from original authorial expressions in copyright; mathematical formulas; laws o f nature distinguished from novel, nonobvious, useful innovations in patent; and surnames and geographically descriptive and common or generic terms distinguished from arbitrary, fanciful, distinctive marks with secondaiy meaning in trademark law) and the private domain. Another key difference between physical property and intellectual

77. Two Pesos, Inc. v. Taco Cabana, Inc., 112 S. Ct. 2753 (1992) (stating that proof of secondary meaning not required under a Lanham Act § 43(a) claim when trade dress is inherently distinctive). See 15 U.S.C. § 1125 (1996) (often referred to as a federal unfair competition law, because § 43(a) does not require registration on the principal register). 78. 17 U.S.C.§ 102 (b) (1996) (“In no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discoveiy, regardless of the form in which it is described, explained, illustrated, or embodied in such work.”); see also Baker v. Selden, 101 U.S. 99 (1879); Mazer v. Stein, 347 U.S. 201 (1954); Lotus Dev. Corp. v. Borland Int’l, Inc., 49 F.3d 807 (1st Cir. 1995), qff'di4-4), 116 S. Ct. 804 (1996). 79. Feist Publication, Inc. v. Rural Telephone Service Co., 499 U.S. 340 (1991); see also Bell South Advertising & Publishing Corp. v. Donnelley Information Publishing, Inc., 999 F.2d 1436 (11th Cir. 1993); Jane C. Ginsburg, Sabotaging and Reconstructing History: A Comment on the Scope o f Copyright Protection in Works o f History After Hoehling v. Universal City Studios, 29 J. C o p y r ig h t S o c ’y 647 (1982). 80. Compare Gottschalk v. Benson, 409 U.S. 63 (1972), with Diamond v. Diehr, 450 U.S. 175 (1981). 81. Compare Funk Bros. Seed Co. v. Kalo Innoculant Co., 333 U.S. 127 (1948), with Diamond v. Chakrabarty, 447 U.S. 303 (1980). 82. See David Lange, Recognizing the Public Domain, 1981 L a w & C o n te m p . P r o b s . 147 (1981); Jessica Litman, The Public Domain, 39 E m o ry L. J. 965 (1990); Keith Aoki, Authors, Investors and Trademark Owners: Private Intellectual Property and the Public Domain, Part I and II, 18 C o lu m . J. L. & A r t s . 1-73, 191-267(1993-1994).

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property is that the supply o f storefronts or grazing land is physically finite. As Heller points out, if one continues drawing boundaries and parceling out property rights, one eventually ends up with a spatial anticommons. Elsewhere, I have discussed the “public goods” aspects o f intellectual property,83 but the main relevant point is that intellectual property seems infinite, as though it were created ex nihilo, pulled from the empty ether by the fevered imagination or intellect o f a transformative artistic or scientific genius. As James Boyle has articulately pointed out, it is this vision o f romantic creativity that makes our common sense traditional intellectual property law and doctrines expand consistently, if not always in the direction o f greater protection.84 This expansion tends to make us ignore the common-sense knowledge that new intellectual creations are formed from preexisting thoughts and ideas in a long chain stretching back into antiquity. This particular and peculiar vision o f creativity makes it seem that expanding the scope and increasing the types o f intellectual property are without cost because the supply o f new ideas and works is apparently infinite. I say that this is apparent, because as Heller points out, there is a point where too many property rights owned by too many parties creates a legal “smog,” that is, an anticommons. When we reach this situation, a serious and consequentialist rethinking and rebundling o f property rights may be necessary so that we may connect the purpose and intent o f our intellectual property (or other) laws with their effects— to “promote the Progress o f Science and the useful Arts.”85 Thus, the nonphysicality o f intellectual property may matter less here than the idea o f the scope o f initial intellectual property entitlement as well as how the rights to control are bundled. Reichman argues that we are able to recognize these types o f concerns, and to tailor our legal system to address them. Observed in this light, the landmark F eist case might be seen in part as an attempt to avoid a “tragedy o f the anticommons”— an attempt to make sure that the threshold for copyright

83. See generally Aoki, supra note 82, at 19-22; see also Paul A. Samuelson, The Pure Theory o f Public Expenditure, 36 R ev. E co n . & S t a t . 387 (1954). 84. B o y le , supra note 1. See also Mark A. Lemley, Romantic Authorship and the Rhetoric of Property, 75 T ex . L. R ev . 873 (1997) (reviewing Jam e s B o y le , S h a m a n s , S o f t w a r e , a n d S p le e n s : L a w a n d t h e C o n s t r u c t i o n o f t h e I n f o r m a tio n S o c ie ty ( 1996)). See generally Peter Jaszi, Toward a Theory o f Copyright: The Metamorphoses o f “Authorship, ” 1991 D u k e L. J. 455 (1991); M a r t h a W o o d m a n se e , T h e A u t h o r , A r t , a n d t h e M a r k e t : R e r e a d in g t h e H i s t o r y o f A e s th e tic s (1994); M a r k R o se , A u t h o r s a n d O w n e r s : T h e I n v e n tio n o f C o p y r ig h ts (1993); P a u l G o ld s te i n , C o p y r i g h t ’s H ig h w a y : F ro m G u t e n b e r g t o t h e C e l e s t i a l J u k e b o x (1994). 85. U.S. C o n s t, art. I, § 8, cl. 8.

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ownership was not set so low that all sorts o f infringement claims would arise, resulting in the underutilization o f facts and data from public domain sources. However, note that while the questions o f commons or anticommons property has not been generally addressed when considering expanding the scope o f patent rights, whether through the doctrine o f equivalents86or through statutory interpretation o f subject matter categories (e.g., medical procedures or sports moves87) within the United States, perhaps it should be. There is another wrinkle in considering the expanding scope o f domestic intellectual property protection and the “public domain.” In many ways, our current conception o f the public domain is that nobody affirmatively owns public domain materials. It is this unowned characterization that is somewhat at odds with a characterization o f the public domain o f intellectual materials as

8 6 . See Hilton Davis Chemical Co. v. Warner-Jenkinson Co., 62 F.3d 1512 (Fed. Cir. 1995) (holding that in every patent infringement case, the court must apply the doctrine of equivalents); see also Peter K. Schalestock, Equityfor Whom? Defining the 'Reach of Non-Literal Patent Infringement, 19 S e a t t l e U.L. R e v . 323 (1996); Mark A. Lemley, The Economics of Improvement in Intellectual Property Law, 75 T e x . L. REV. 989 (1997). William W. Fisher HI, The Growth of Intellectual Property: A History of the Ownership of Ideas in the United States 5-6 (Sept. 4, 1997)(on file with the INDIANA JOURNAL OF GLOBAL LEGAL S t u d ie s ).

87. Nineteenth century cases held that medical procedures were not patentable for policy grounds. See Morton v. New York Eye Infirmary, 17 F. Cas. 879,881 (C.C.S.D.N.Y.) (No. 9,865) (holding that a method of performing surgery “combining therewith the application of ether” developed by two surgeons during the Civil War was not patentable). Note that the PTO has changed its position and has indicated that medical methods are patentable as processes if they meet the conditions of utility, nonobviousness and novelty. See Ex Parte Scherer, 103 U.S. P.Q. (BNA) 107 (Pat. Off. Bd. App. 1954) (upholding a patent for a method of injecting medicine via pressure jet); Edward Felsenthal, Medical Patents Trigger Debate Among Doctors, W a l l S t. J., August 11,1994, at B1; Joel J. Garris, The Casefor Patenting Medical Procedures, 22 Am. J.L. & M ed . 85(1996); Jeffrey Lewis, No Protectionfor Medical Processes: International Posture May Be Hurt by New Law, N e w Y o r k L aw . J., March 10, 1997, at SI. See also U.S. Patent No. 4,960,129 (patenting method for diagnosing heartbeat disorders); U.S. Patent No. 5,026,53 8 (patenting method for treating arthritis); U.S. Patent No. 5,320,094 (patenting method for administering insulin); Robert M. Kunstadt, et al., Are Sports Moves Next in IP Law?, N a t i o n a l L.J., May 20, 1996, at C2: Although the norms of sports enthusiasts might be offended, sports is now big business, and big business demands this protection. Entire industries exist to sell and promote goods and services at sporting events and for use by sports participants. Players in this vast market may benefit from the efficiency of fixed property rights in the fuel that drives these market transactions. A key element of that fuel is the sports moves themselves, and patents, copyrights and trademarks may provide the best tools for securing those rights. See also Fisher, supra note 86 , at 4-5.

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a commons.88 For example, Carol Rose has raised a set o f extremely cogent arguments in response to Hardin’s Tragedy o f the Commons. Rose has described how in certain situations the solution to depletion or overutilization o f scarce resources may not be to bestow private property rights, but to deploy common law and statutory strategies that she has referred to as involving the Comedy o f the Commons?9 The situations that Rose refers to involve what is thought o f as “public property.” Rose points to the long Western legal pedigree o f the idea o f “public property,” or ju s publicum .90 Traditionally, due to their “inherent publicness,” certain types o f property— land between high and low tides, roadways, land underlying navigable waterways, and other such properties— were conceived o f as being subject to a public easement for fishing, commercial and navigation purposes.91 During the 1970s, 1980s, and 1990s,

8 8 . Carol M. Rose, The Comedy o f the Commons: Custom, Commerce, and Inherently Public Property, 53 U. C hi. L. R ev . 711, 721 (1996) [hereinafter Comedy o f the Commons] (“[Property in . . . an unorganized public would amount to an unlimited commons, which seems not to be property at all, but only a mass of passive ‘things’ awaiting reduction to private property through the rule of capture or, worse yet, their squandering in the usual ‘tragedy of the commons.’”). See also Carol M. Rose, A Dozen Propositions on Private Property, Public Rights, and the New Takings Legislation, 53 W a s h . & L ee L. R ev. 265 (1996) [hereinafter A Dozen Propositions]. 89. Comedy of the Commons, supra note 8 8 . 90. Id. at 713. See also Alfred C. Yen, Restoring the Natural Law: Copyright as Labor and Possession, 51 Ohio St. L.J. 517 (1990) (“The idea/expression dichotomy’s roots in res communes and ferae naturae provide the most obvious was in which the natural law creates a public domain [Tjhese concepts prohibited property claims in those objects which were by nature difficult to possess . . .[and imply] that copyright should not be extended to those facets of a work which are difficult to possess.”); Daniel R. Coquillette, Mosses From an Old Manse: Another Look at Some Historic Property Cases About the Environment, 64 C o r n e l l L. R ev. 761 (1979); Harry N. Schneiber, Public Rights and the Rule o f Law in American Legal History, 72 C a l. L. R ev. 217 (1984); Molly Selvin, The Public Trust Doctrine in American Law and Economic Policy, 1789-1920, 1980 W is. L. R ev. 1403. 91. Comedy of the Commons, supra note 88 , at 713-14. See also Illinois Cent. R.R. Co. v. Illinois, 146 U.S. 387 (C.C.S.D. 111. 1892) (Field, J.): That the State holds the title to the lands under the navigable waters of Lake Michigan, within its limits, in the same manner that the State holds title to soils under tide water, by the common law, we have already shown.... But it is a title different in character from that which the State holds in lands intended for sale.. . . It is a title held in trust for the people of the State that they may enjoy the navigation of the waters, carry on commerce over them, and have liberty of fishing therein freed from the obstruction or interference of private parties. Id. at 452. For an updated application of the Public Trust Doctrine applied to lakefront property owned by Loyola University in Chicago, see Lake Michigan Fed’n v. United States Army Corps of Eng’r, 742 F. Supp. 4 4 13445-447 (N.D. 111. 1990): Three basic principles can be distilled from this body of public trust case law. First, courts should be critical of attempts by the state to surrender valuable public resources to a private entity Second, the public trust is violated when the primary purpose of a legislative grant is to benefit a private interest Finally, any attempt by the state to

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state courts began using these older precedents, some dating back to the mid­ nineteenth century, to carve out a growing set o f “public rights” that served to limit what private property owners could do with their property.92 In particular, the public easement for fishing, commerce and navigation has been expanded to include recreational uses, and in some cases has been extended to include dry sand areas o f beaches.93 Rose observes: Like the older precedents, the new beach cases usually employ one o f three theoretical bases: (1) a “public trust” theory, to the effect that the public has always had rights o f access to the

relinquish its power over a public resource should be invalidated under the doctrine.... What we have here is a transparent giveaway of public property to a private entity. The lakebed of Lake Michigan is held in trust for and belongs to the citizenry of the state. The conveyance of lakebed property to a private party-no matter how reputable and highly motivated that private party may be-violates this public trust doctrine. 92. See Marks v. Whitney, 491 P.2d374(Cal. 1971) (extending the Public Trust Doctrine to encompass preservation of tidelands in their natural state in the face of the tideland owner’s desire to fill them in, and recognizing that Public Trust may protect other interests such as wildlife habitat, water quality, recreation, and aesthetics). See also National Audubon Soc’y v. Superior Court of Alpine County, 658 P.2d 709 (Cal. 1983) (California Supreme Court rejected a takings challenge to a permit granted by the California Water Board to the City of Los Angeles to draw down five tributaries feeding Mono Lake (because of drawdowns, Mono lake had shrunk to a third of its former size)-the Court held that the State of California lacked the authority to grant absolute water rights that would cause substantial ecological damage); Just v. Marinette County, 201 N.W.2d 761 (Wis. 1972) (extending Public Trust Doctrine to wetlands and preventing private owner from infilling); Joseph L. Sax, The Limits of Private Rights in Public Waters, 19 E n v t l . L. 473 (1989); Richard J. Lazarus, Changing Conceptions o f Property and Sovereignty in Natural Resources: Questioning the Public Trust Doctrine, 71 Io w a L . R ev. 631 (1986); Joseph L. Sax, The Public Trust Doctrine in Natural Resource Law: Effective Judicial Intervention, 68 M ich . L. R ev . 471 (1970). But c f James L. Huffman, A Fish Out o f Water: The Public Trust Doctrine in a Constitutional Democracy, 19 E n v t l . L. 527 (1989); James L. Huffman, Avoiding the Takings Clause Through the Myth o f Public Rights: The Public Trust and Reserved Rights Doctrines at Work, 3 J. L a n d U se & E n v t l . L. 171 (1987). 93. Comedy o f the Commons, supra note 88 , at 713-14. For cases expanding public access to waterfront properties, see, e.g., Stevens v. City ofCannon Beach, 854 P.2d449 (Or. 1993), cert, denied, 114 S. Ct. 1332 (1994) (Scalia, J. and O’Connor, J., dissenting from denial of certiorari); Matthews v. Bay Head Improvement Ass’n, 471 A.2d355(N.J. 1984) (using Public Trust Doctrine); City of Berkeley v. Superior Court, 606 P. 2d 362(Cal. 1980), cert, denied, 449 U.S. 840 (1980) (holding that 19* century “inherently public” tidelands did not convey title free of the public trust, however, lands filled in the past, now free of trust); Van Ness v. Borough of Deal, 393 A.2d 571 (N.J. 1978); City of Daytona Beach v. Tona-Rama, Inc., 294 So.2d 73 (Fla. 1974) (using prescription theory); Gion v. Santa Cruz, 465 P.2d 50 (Cal. 1970) (using theory of “implied dedication,” but subsequently legislatively overruled); Borough ofNeptune City v. Borough of Avon-By-TheSea, 294 A.2d 47 (N.J. 1972) (using Public Trust Doctrine); State ex rel. Thornton v. Hay, 462 P.2d 671 (Or. 1969) (using idea of custom to support access). But cf. McDonald v. Halvorson, 780 P.2d 714 (Or. 1989) (applying custom only to beaches where actual public use could be demonstrated); Opinion of the Justices, 313 N.E.2d 561 (Mass. 1974) (rejecting New Jersey Public Trust Doctrine approach); Bell v. Town of Wells, 557 A.2d 168 (Me. 1989) (limiting Public Trust Easement in tidelands strictly to those uses reserved in colonial ordinances from 1641; fishing, fowling and navigation).

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property in question, and that any private rights are subordinate to the public’s “trust” rights; (2) a prescriptive or dedicatory theory, by which a period o f public usage gives rise to an implied grant or gift from private owners; and (3) a theory o f “custom,” where the public asserts ownership o f property under some claim so ancient that it antedates any memory to the contrary.94 Rose goes on to observe that these cases seemingly contradict traditional economic analysis by inverting the logic o f viewing private property as the optimal solution to the tragedy o f the commons. At first blush, these cases take private property and turn it into a commons, in which anyone and everyone can overuse and despoil such properties— the right to exclude has been taken from the owner’s bundle o f sticks. This raises the question whether, “[A]ny property inherently or even presumptively [should be] withdrawn from exclusive private expropriation?”95 To answer this question, Rose points to two traditional exceptions to the general preference favoring private property ownership: (1) ‘“plenteous’ goods. . . . [T]hings that are either so plentiful or so unbounded that it is not worth the effort to create a system o f resource management. . . [f]or which the difficulty o f privatization outweighs the gains in careful resource management,”96 and, (interestingly for intellectual property purposes); (2) public goods “where many persons desire access to or control over a given property, but they are too numerous and their individual stakes too small to express their preferences in market transactions.”97 Interestingly, note that intellectual property possesses two characteristics o f a “public good:” jointness o f supply and impossibility o f exclusion. While the analogy between real property and intellectual property is incomplete and discontinuous in many ways, some o f the logic o f the “public trust” and “custom” cases, such as National Audubon Society v. Superior Court o f Alpine County (the “Mono Lake” case)98 in 1983 and Stevens v. City

94. Comedy o f the Commons, supra note 88 , at 714. 95. Id. at 717. 96. Id. 91. Id. at 719. 98. National Audubon Soc’y, 658 P.2d at 709 (1983).

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o f Cannon Beach in 1993," may be helpful in framing questions o f the intellectual public domain. In the Mono Lake case, the California Supreme Court stated that the State o f California lacked the authority to grant the City o f Los Angeles absolute water rights which had significant ecological impact (drawing down the water level in Mono Lake by diverting five feeder streams to Los Angeles and shrinking Mono Lake by over a third in size) on areas that were subject to the public trust.100 In the Stevens case, the Oregon Supreme Court held that the denial o f a building permit to build a seawall on the dry sand area o f a beach was not a taking under the Just Compensation Clause, and that maintenance o f public access to the dry sand beach had arisen pursuant to the doctrine o f custom.101 The Stevens case was appealed to the U.S. Supreme Court, which denied certiorari over a strong dissent from Justices Scalia and O’Connor.102 What significance might a salt lake in California and a stretch o f dry sand beach in Oregon hold for intellectual property law? First, the logic o f both opinions suggests that certain types o f land possessing unique characteristics are subject to the public trust. A baseline presumption in U.S. property law is that all property rights within the United States originate from the United States or some predecessor sovereign. When the federal sovereign passed these property rights either to the state sovereigns or to private individuals, it retained or reserved the stick in the property rights

99. Stevens, 854 P.2d 449, cert. denied, 114 S. Ct. 1332, 1335 (1994) (Scalia, J. and O’Connor, J., dissenting from denial of certiorari). 100. National Audubon Soc’y, 658 P.2d at 724. [T]he public trust is more than an affirmation of state power to use public property for public purposes. It is an affirmation of the duty of the state to protect the people’s common heritage of streams, lakes, marshlands and tidelands, surrendering that right of protection only in rare cases when the abandonment of that right is consistent with the purposes of the trust. 101. Stevens, 854 P.2d at 456-57. When plaintiffs took title to their land, they were on notice that exclusive use of the dry sand areas was not a part of the “bundle of rights” that they acquired, because public use of dry sand areas “is so notorious that notice of the custom on the part of persons buying land along the shore must be presumed.” . . . We, therefore, hold that the doctrine of custom as applied to public use of Oregon’s dry sand areas is one of “the restrictions that background principles of the State’s law of property. . . already place upon land ownership.” ... We hold that plaintiffs have never had the property interests that they claim were taken by defendants’ decision and regulations. 102. Stevens, 854 P.2d 449, cert, denied, 114 S. Ct. 1332, 1335 (1994) (Scalia, J. and O’Connor, J., dissenting from denial of cert.): To say that this case raises a serious Fifth Amendment takings issue is an understatement. The issue is serious in the sense that it involves a holding of questionable constitutionality; and it is serious in the sense that the land-grab (if there is one) may run the entire length of the Oregon coast.

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bundle pertaining to use and maintenance o f those properties, consistent with the public trust. To the extent that private property owners use their property contrary to the public trust, state government may move in to regulate or prohibit those uses in the name o f exercising its reserved public trust responsibilities, thereby acting as trustee for members o f the public. Additionally, when acting pursuant to the public trust, no “taking” occurs because the “right” to use private property contrary to the public trust was never a part o f the bundle o f sticks that we call property ownership in the first place, but was reserved by the sovereign. Similarly, in the Stevens case, expectations that had arisen over the course o f a long period o f time about public beach access were recognized, and the judicial (or legislative) recognition o f these customary rights effected no “taking” either because the property owner took title subj ect to, and with notice of, the “custom” o f beach access in Oregon. The relevance for intellectual property law is that instead o f geographic features o f land (beaches, lakes, and wetlands), there may be categories o f information that could be conceived o f as possessing characteristics o f public trust property. One problem with our intellectual property law, and copyright law in particular, is that it, on a general level, treats all copyrightable subject matter the same. For example, a song by Kurt Cobain is different from a scientific treatise, DOOM is different from a first grade textbook about the alphabet, an X-Men comic book is different than Lotus 1-2-3. Perhaps there are some categories o f uses that might be worth granting an “easem enf’-like right in members o f the public (or for that matter, publishers in the Third World). The structure o f the argument would proceed through several steps. First, because the U.S. Constitution mandates “securing for limited times to authors and inventors the exclusive rights to their respective writings and discoveries” in order to “promote the Progress o f Science and useful Arts,” there is a link between the positivist property rights granted and a constitutionally mandated public purpose. Second, one might argue that this grant is from the sovereign to “authors and inventors” only to the extent that promotion o f that public purpose (advancing science and the useful arts) is achieved. Furthermore, such a conditioned grant presupposes a reservation o f power in the sovereign when the actual effects o f such a grant work against those public purposes. A shadow o f this reasoning can be seen in copyright and patent misuse cases. The grant o f exclusive rights to authors and inventors never included the right to use that grant for anticompetitive purposes that are contrary to antitrust laws— it was never a stick in the bundle o f rights that comes with a patent or a

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copyright.103 Another shadowy example is copyright law’s fair use doctrine and patent law’s reverse doctrine o f equivalent exceptions— one might conceive o f “fair use” or “reverse doctrine o f equivalents” as a species o f “easement” in the name o f the public.104 Third, this line o f reasoning embodies some broad-based public trust-type

103. In the patent misuse area, see Brulotte v. Thys Co., 379 U.S. 29 (1964) (refusing use of licenses beyond term of patent); Dawson Chem. Co. v. Rohm & Haas Co., 448 U.S. 176 (1980) (tying unpatented products to patented products to capture the market for both); U. S. Dept, of Justice Guidelines for the Licensing and Acquisition of Intellectual Property § 5.6 (Aug. 8,1994) (unpublished manuscript, on file with the author) (prohibiting certain types of “grant back” clauses that require a patent licensee to “grant back” to the licensor any improvement patents). See generally Mark A. Lemiey, Note, The Economic Irrationality of the Patent Misuse Doctrine, 78 C a l . L. R ev . 1599 (1990). In the area of copyright, misuse is relatively recent. In particular, since 1990, there have been a number of cases finding a plaintiffs copyright unenforceable because of misuse. See DSC Communications Corp. v. DGI Technologies, Inc., 81 F.3d 597 (5thCir. 1996) (finding copyright misuse appropriate where copyright owner tried expanding the copyright beyond its scope into a patent-like monopoly); Bateman v. Mnemonics, Inc., 79 F.3d 1532,1547 (11thCir. 1996) (suggesting that copyright misuse was relevant to prevent an owner of a copyright from gaining protection for an idea in violation of 17 U. S.C. § 102(b)); Lasercomb America, Inc. v. Reynolds, 911 F.2d 970, 978 (4th Cir. 1990) (describing copyright misuse as “an equitable defense to an infringement action . . . [when] the copyright is being used in a matter violative o f . . . the public policy embodied in the grant of a copyright.”); Qad Inc. v. ALN Assocs., Inc., 770 F. Supp. 1261 (N.D. 111. 1991); Timothy H. Fine, Misuse and Antitrust Defenses to Copyright Infringement Actions, 17 H a s tin g s L.J. 315 (1965); Marshall Leaffer, Engineering Competitive Policy and Copyright Misuse, 19 U. D a y t o n L. R ev. 1087 (1994); James A. D. White, Misuse or Fair Use: That Is the Software Copyright Question, 12 B e r k e l e y T e c h . L.J. 251 (1997); Ramsey Hanna, Note, Misusing Antitrust: The Search for Functional Copyright Misuse Standards, 46 S t a n . L. R e v . 401 (1994). These additional issues arise in terms of contract and license terms that conflict with a user’s legitimate interests under the copyright statute. There are many open questions about the validity of software contracts that purport to prohibit reverse engineering and decompilation of licensed software. There have been a series of cases that have allowed some degree of reverse engineering in certain circumstances. See Lotus Dev. Corp. v. Borland Inf 1,49 F.3d 807, 818 (1st Cir. 1995); Sega Enter. Ltd. v. Accolade, Inc., 977 F.2d 1510, 1527-8 (9thCir. 1992); Atari Games Corp. v. Nintendo of America, Inc. 975 F.2d 832,843-4 (Fed. Cir. 1992); Vault Corp. v. Quaid Software Ltd., 847 F.2d 255, 270 (5th Cir. 1988). See also Julie E. Cohen, Reverse Engineering and the Rise o f Electronic Vigilantism: Intellectual Property Implications o f “Lock-Out ” Programs, 68 S. Cal. L. R ev . 1091 (1995); Samuelson, supra note 70. Contracts and licenses may also ask licensees to waive other rights provided by the copyright statute, such as the § 117 right to copy and adapt a program to work on a particular machine. 17 U.S.C. § 117 (1994). Or licenses may forbid licensees from transferring copies of the copyrighted work in ways that conflict with the “first sale” doctrine of § 109(a). See 17 U. S.C. § 109(a)-(bX 1)(A) (1994). There are also nonwaivable rights granted by the copyright statute, such as the right of authors of older works to terminate transfers of rights in a copyrighted work between 35 and 40 years after the work was created. See generally Mark A. Lemiey, Beyond Preemption: The Federal Law and Policy o f Intellectual Property Licensing, Cal. L. Rev. (forthcoming January 1999). 104. Some other examples of areas where lower (or nonexistent) levels of per se intellectual property protection have actually helped spur competitiveness and innovation are: clothing designs (which are noncopyrightable, although trade dress protection may apply for confusingly similar garments); utilitarian aspects of useful goods; architectural designs prior to 1992 (when architectural works became copyrightable); university-sponsored scientific research prior to 1984 (when the federal government directed that such research be patented); and legal documents (which while copyrightable, are seldom asserted) and judicial opinions.

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o f responsibility reserved to the federal government to keep certain information (for example, some types o f basic scientific research, information in databases, educational purposes and uses, new medical techniques, or even human genomic material)105 available and open to benefit both the public and private owners. Lastly, an important point is that this line o f reasoning conceptualizes information in the public domain not as “unowned,” but as owned by everyone. Part o f the tragedy o f the commons was that no one asserted the public right to maintain the commons— the default position seemed to be a powerless local government. As Rose has shown, public and private property rights work in tandem to maintain a vibrant free-enterprise system.106 Duncan Kennedy and Frank Michelman have argued that: [While] much legal and related policy-analytic literature reflects and reinforces the view that certain legal institutions (e.g., private property, free contract) are in some sense generally orpresumptively efficient, while others (e.g., central regulatory command, commonses) are generally or presumptively inefficient [A]ny actually efficient regime, though it may well contain rules fairly characterizable as private property and free contract, must contain them in combination with rules drawn from realms perceived as opposite to private property/free contract (viz., unowned commonses and collective controls) so that there is no more reason for awarding the palm o f “presumptive efficiency” to private property/free contract than to its opposites.107

105. The copyright statute already has a plethora of odd, seemingly unconnected exemptions. See 17 U.S.C. § 110 (6 ) (1994) (exempting from copyright infringement liability a “performance of a nondramatic musical work by a governmental body or a nonprofit agricultural or horticultural . . . fair or exhibition conducted by such body or organization...”); 17U.S.C. § 110(1) (1994) (exempting a “performance or display of a work by instructors or pupils in the course of face-to-face teaching activities of a nonprofit educational institution, in a classroom or similar place devoted to instruction .. .”). 106. A Dozen Propositions, supra note 88 , at 267. [Hjistoric Anglo-American legal principles did indeed recognize the importance of private property rights, which are essential in a functioning free enterprise economy. But those principles also recognized what were called “public rights,” particularly in resources that are not easily turned into private property—historically, air, water resources, and fish and wildlife stocks—because the management of such diffuse resources is also essential in a functioning economic order of free enterprise. 107. Kennedy & Michelman, supra note 16, at 714.

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Perhaps, some types o f information may be so conceptually similar to things like land underlying navigable waterways, beaches and coastal areas, and the electromagnetic spectrum, that too many private property rights give rise to “common pool” problems that are only addressable through some type o f regulatory regime that ensures continued access for the public. Note that in this formulation, the anticommons problem does not arise because “everyone” does not possess the “right to exclude” as was the case with M oscow storefronts, but the “public” (via the government) may be able to prevent private parties from making maximalist property claims that harm the promotion o f science and useful arts. Additionally, rather than conceptualizing the intellectual public domain as unowned (a sort o f default zone where things that are so rudimentary or useless come to lie), we may be able to conceptualize it as an intellectual zone where things that are too important to be owned by one party reside. They are, in effect, owned by the public. There are three major criticisms o f this approach. First, it is unclear (even in the real property area) whether the federal government is subject to the public trust doctrine. To date, it has been largely a creature o f state common law and has been quite controversial over the past three decades.108 Indeed, I am not even arguing that public trust doctrine be applied to intellectual property, only that it may provide a different perspective on conceptualizing intellectual property rights. Second, there are large definitional problems in terms o f delineating categories o f creations that might be subject (educational, scientific, and so on)— how narrowly or broadly should possible categories be defined to this “intellectual public trust,” particularly given the paradigmatic institutional capture by the agropharmaceutical and copyright industries o f the U.S. Copyright and Patent and Trademark Office in the 1990s. Finally, questions o f standing to sue would be very problematic in terms o f who would be empowered to assert the “public trust.” There are an increasing number o f organizations that are possible candidates, such as the Taxpayer Assets Proj ect (headed by James Love), the Electronic Frontier Foundation or the Digital Future Coalition that opposed the adoption in 1996 o f the WIPO Database Protection Proposal. I do not offer these observations to introduce a ready-for-implementation

108. See District of Columbia v. Air Florida, Inc., 750 F.2d 1077, 1082-83 (D.C. Cir. 1984) (“In this country the public trust doctrine has developed almost exclusively as a matter of state law.. . . [N]either the Supreme Court nor the federal courts of appeals have expressly decided whether public trust duties apply to the United States.”); see also Charles F. Wilkinson, The Public Trust Doctrine in Public Ixmd Law, 14U.C. DAVIS L. R ev . 269(1980).

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legislative or judicial proposal— far from it. I believe that some o f the ultimate goals that underlie the public trust doctrine in the environmental law area may have some deep connections with how we are administering and constructing our information environment— in particular, how we talk about “property,” intellectual or otherwise. A privatized information environment that is unable to contemplate any other standard for measuring its worth other than market efficiency may be, on many levels, a dystopian environment indeed. James Boyle has recently written o f the analogies between the nascent state o f environmental law in the early 1960s, when public consciousness o f the dangers o f environmental degradation began dawning, and the current state o f public consciousness o f intellectual property laws.109 Boyle has called for an “environmentalism for the Net” in terms o f the need for activism in the name o f protecting and maintaining a healthy balance o f public and private rights in the digital environment. Boyle points out: In both environmental protection and intellectual property, the very structure o f the decision-making process tends to produce a socially undesirable outcome. Decisions in a democracy are made badly when they are primarily made by and for the benefit o f a few stakeholders, be they landowners or content providers. It is a matter o f rudimentary political science analysis or public choice theory to say that democracy fails when the gains o f a particular action can be captured by a relatively small and well-identified group while the losses— even if larger in the aggregate— are low-level effects spread over a larger, more inchoate group. This effect is only intensified when the transaction costs o f identifying and resisting the change are high.110 As part o f this “environmentalism” to protect the “intellectual” environment, we must first define exactly what we are protecting, which is where the works o f Reichman, Rose, and Boyle are very helpful. If we fail to begin this project now, in fifty years we may find ourselves looking back as we consider how the true “tragedy o f the commons” was the massive privatization

109. Boyle, supra note 5, at 87. 110. Id. at 110.

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o f the intellectual public domain in the late twentieth century.111

III. T h e L e g itim a c y o f C u l t u r a l A p p r o p r ia tio n s Connected to questions about our legal construction o f the intellectual public domain are additional and troubling questions o f cross-cultural appropriations that occur with greater frequency in the not-so-brave new world economic order o f TRIPS and globalization. We need to be careful about constructing the public domain to avoid conceiving o f the biological and cultural resources o f the Third World as belonging to the “common heritage o f humanity,” thereby effectively putting them up for grabs by entrepreneurs from the developed countries eager to turn such public domain items into private intellectual property. There is a paradoxical need to simultaneously rein in the maximalist impulse in the intellectual laws o f the developed countries and to imagine ways to protect the cultural and biological resources o f the developing and least developed countries. In particular, there is a very serious question whether the category “property,” or the historically contingent and individualistic notion o f “property” that has arisen in the West, is even appropriate when discussing things like agricultural practices, cell lines, seed plasm, and oral narratives that “belong” to communities rather than individuals.112 If we are not capable o f acknowledging the existence o f different life-worlds and ways o f envisioning human beings’ relationship to the natural world in our intellectual property laws, then unfortunately, it may be late in the day for biodiversity and hopes for a genuinely multicultural world.113

111. See James Boyle, Sold Out, NY. T im es, Mar. 31, 1996, available in 1996 WL 7499914. 112. See Gana, The Myth o f Development, supra note 21; See also Has Creativity Died in the Third World?, supra note 21. 113. For an example of this tendency to conceive of the cultures, indeed, the very bodies of indigenous peoples as “treasure,” see Lisa Belkin, Chasing Bad Genes to the Ends o f the Earth: The High-Tech Future of Medicine Is Encrypted in the Blood of Remote Peoples. For the New, Intrepid Gene Hunters, There Is Treasure Buried in Those Veins, N.Y. TIMES MAG., Apr. 26,1998, at 46,52 (describing medical expeditions from U.S. Universities to gather genetic materials and blood from peoples in Saudi Arabia (searching for glaucoma gene), Nigeria, Ghana (searching for diabetes gene), Mongolia (searching for deafness gene)), Tristan da Cunha (searching for asthma gene) and the island of Cebu in the Phillipines (searching for cleft palate and lip gene): There is money to be made in genetic research, because pharmaceutical companies are eager to buy the patent rights for cloned genes that could be used to create new families of drugs. For example, the gene that regulates the production of leptin, which in turn regulates the metabolism of fat, was purchased by the pharmaceutical company Amgen from Rockefeller University for $20 million. The search for the asthma gene o f Tristan de Cunha is being financed by Axys Pharmaceuticals.

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Vandana Shiva,114Ruth L. Gana (Okediji),115Rosemaiy Coombe,116James B oyle,117Jack Kloppenberg,118 and others119have been writing and working to theorize and publicize what has been called the “Great Seed Ripo f f ’— international conventions granting “plant breeder’s rights allowing commercial plant breeders to use traditional indigenous varieties o f seeds, and ‘improve’ them via minor genetic alterations and then receive patents in the varieties, eventually selling them back to the communities that produced them initially.”120 However, their concerns go much further than merely protesting the granting o f U.S. patents in seed plasm and biologically-engineered genetic material. Vandana Shiva writes: The freedom that transnational corporations are claiming through intellectual property rights protection in the GATT agreement on Trade Related Intellectual Property Rights is the freedom that European colonizers have claimed since 1492. Columbus set a precedent when he treated the license to conquer non-European peoples as a natural right o f European men. The land titles issued by the pope through European kings and queens were the first patents. . . . Eurocentric notions o f property and piracy are the bases on which the IPR

Id. at 52. See also Naomi Roht-Arriaza, O f Seeds and Shamans: The Appropriation o f the Scientific and Technical Knowledge o f Indigenous and Local Communities, 17 M ich . J. I n t ’l L. 919 (1996). 114. B io p ira c y , supra note 21. 115. Gana, The Myth o f Development, supra note 21. 116. R o s e m a r y J. C o o m b e , C u l t u r a l A p p ro p ria tio n s : A u th o r s h ip , A l t e r i t y a n d t h e L a w (forthcoming 1998). 117. B o y le , supra note 1. 118. K lo p p e n b e r g , supra note 21, at 1492-2000 (1988); J a c k R. K lo p p e n b e r g , J r ., S e e d s a n d S o v e r e ig n ty : T h e U se a n d C o n t r o l o f P l a n t G e n e tic R e s o u r c e s (1988). 119. See, e.g., Jeremy Rifkin, The Biotech Century: Human Life as Intellectual Property, N a tio n , Apr. 13, 1998 at 11; Andrew Kimbrell, Biocolonization: The Patenting o f Life and the Global Market in Body Parts, in T h e C a s e A g a in s t t h e G l o b a l E c o n o m y , supra note 6; A n d r e w K im b r e ll, T h e H u m a n B o d y Shop: T h e E n g in e e r in g a n d M a r k e t i n g o f L ife (1993); Susan Wright, Down on the Animal Pharm: Splicing Away Regulations, N a tio n , Mar. 11, 1996; Darrell A. Posey, International Agreements and Intellectual Property Right Protection for Indigenous Peoples, in I n t e l l e c t u a l P r o p e r t y R ig h ts f o r I n d ig e n o u s P e o p le s : A S o u r c e b o o k , supra note 21. 120. See the Plant Variety Protection Act of 1970 that extends patent-like protection to novel varieties of sexually reproduced plants. 7 U.S.C. §§ 2401-2582 (1988), amended by the Plant Variety Protection Acts Amendments of 1994, Pub. L. No. 103-349,108 Stat. 3136. See also 17 U.S.C. § 161 (1984) (providing for patents in asexually reproduced plants); Craig Edgar, Patenting Nature: GATT on a Hot Tin Roof, 34 W a s h b u r n L.J. 76(1994); Shayana Kadidal, Note, Plants, Poverty, and Pharmaceutical Patents, 103 Y a l e L.J. 223 (1993); Erin B. Newman, Earth's Vanishing Medicine Cabinet: Rain Forest Destruction and its Impact on the Pharmaceutical Industry, 20 Am. J.L. & M ed . 479 (1994).

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law s o f the GATT and [WTO] have been framed. When Europeans first colonized the non-European world, they felt it w as their duty to “discover and conquer,” to “subdue, occupy, and possess,” . . . [everyth ing, every society, every culture.

The colonies have now been extended to the interior spaces, the “genetic codes” o f life-forms from microbes and plants to animals, including humans. . . . The assumption o f empty lands, terra nullius, is now being expanded to ‘empty life,’ seeds and medicinal plants . . . [and this] same logic is being used to appropriate biodiversity from the original owners and innovators by defining their seeds, medicinal plants, and medical knowledge as nature, as nonscience, and treating tools o f genetic engineering as the yardstick o f “improvement.” . . . At the heart o f the GATT treaty and its patent laws is the treatment o f biopiracy as a natural right o f Western corporations, necessary for the “development” o f Third World communities. 121 The question o f the direction o f the flow o f valuable resources, whether genetic or indigenous agricultural or medical knowledge, is extremely relevant to constructing the intellectual public domain as well. As Vandana Shiva points out, representing the cultural property o f non-European peoples as “natural” or “primitive” equates such properties as “unowned” and up for grabs by erstwhile and entrepreneurial “civilized” proprietors. Any formulation o f the intellectual public domain must take account o f the culture-bound nature o f our concepts o f property and how: The model on which protection o f creative labor currently [advocated by TRIPS] is premised on a unique combination o f convictions about what constitutes property, the role o f property, and the use o f property rights to allocate resources . . . [and] reflects] values o f liberty, individualism, and autonomy, which are central to the society o f western

121. B iopiracy , supra note 2 1 , at 2-5. See also Mark Ritchie, et al., Intellectual Property Rights and Biodiversity: The Industrialization o f Natural Resources and Traditional Knowledge, 11 S t . Jo h n ’s J. Leg al C om m ent . 431 (1996); Ajay K. Sharma, The Global Loss o f Biodiversity: A Perspective in the Context of the Controversy Over Intellectual Property Rights, 4 U. B alt . Intell . P rop . L.J. 1 (1995).

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liberalism. . . . [This ignores the interests of] developing countries all over the world . . . [in] retaining] those values that are core to their identities and that ultimately determine how development occurs___Simply enacting [westem-style] intellectual property laws in a cultural, economic and political vacuum is shortsighted and futile. . . . Trivializing] the contributions o f pre-industrial peoples to the wealth o f the world’s resources in inventions, literature, music, and the arts, despite the fact that some o f this contribution continues to supply the industrialized world with answers to modem plagues.122 The sad irony is that the intellectual property-rich nations o f the developed world have pushed for swift enactment o f TRIPS in order to avoid what they claim are disastrous and ruinous levels o f piracy o f their intellectual properties, whether computer programs, videos, music CDs, movies, or technology, by countries o f the developing and least developed nations. However, the ideological content o f these piracy claims becomes evident when considering that the fears seem to mask the amount o f piracy occurring in the opposite direction— invaluable biological and cultural resources flowing out o f the countries o f the South as “raw materials” into the developed nations o f the North where they are magically transformed in the laboratories o f pharmaceutical and agricultural corporations into protected intellectual properties whose value is underwritten by provisions o f multilateral agreements such as TRIPS. Vandana Shiva writes: The United States has accused the Third World o f piracy. The estimates for royalties lost are $202 million per year for agricultural chemicals and $2.5 billion annually for pharmaceuticals. In a 1986 U.S. Department o f Commerce survey, U.S. Companies claimed they lost $23.8 billion yearly

122. Gana, The Myth of Development, supra note 21, at 339, 341. See also Michael J. Huft, Indigenous Peoples and Drug Discovery Research: A Question of Intellectual Property Rights, 89 Nw. U. L. REV. 1678 (1995); Kirstin Peterson, Recent Intellectual Property Trends in Developing Countries, 33 HARV. I n t ’l L.J. 277 (1992); Vandana Date, Comment, Global “Development” and its Environmental Ramifications-The Interlinking of Ecologically Sustainable Development and Intellectual Property Rights, 27 GOLDEN G a t e U . L. R ev . 631 (1997); Curtis M. Horton, Protecting Biodiversity and Cultural Diversity Under Intellectual Property Law: Toward a New International System, 10 J. ENVTLL. &LITIG. 1 (1995).

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due to inadequate or ineffective protection o f intellectual property.. . . [However] if the contributions o f Third World peasants and tribespeople are taken into account, the roles are dramatically reversed: the United States would owe Third World countries $302 million in agriculture royalties and $5.1 billion for pharmaceuticals.123 For example, it raises the issue o f what role national sovereignty may play in establishing local regimes not only o f intellectual property protection, but also local regimes that dictate that certain subject matter will not be susceptible to privatization and appropriation. It may be that despite many rumors o f its impending demise in the era o f globalization, news o f the demise o f the nation­ state may be premature. Ironically, the increasing transnational proprietors o f vast (and private) intellectual property holdings must turn to the national legal regimes in order to underwrite the value o f their holdings. Additionally, there is a paradox, because as “free trade” ideally envisages a single global market, traditionally both publishers asserting copyrights and corporations asserting patents have depended on their ability to restrict territorially rights in separate national markets— markets that are underwritten and demarcated by national sovereignty. Thus, it is far from clear that a global intellectual property will be able to be completely free from the centripetal pull o f national or local intellectual property regimes. For example, the Indian Government is currently considering legislation creating a National Bioresource Authority (NBA) to protect India’s bioresources and would: [Prohibit non-Indians] from “obtaining any biological resources for research or commercial utilization or collecting

123. BlOPERACY, supra note 21, at 56. See generally Craig D. Jacoby & Charles Weiss, Recognizing Property Rights in Traditional Biocultural Contribution, 16 STAN. ENVTL. L.J. 74 (1997); Lester I. Yano, Protection ofthe Ethnobiological Knowledge of Indigenous Peoples, 41 UCLA L. REV. 443 (1993); Heana Dominguez-Urban, Harmonization in the Regulation of Pharmaceutical Research and Human Rights: The Need to Think Globally, 30 C o r n e l l I n t ’l L.J. 245 (1997); John R. Adair, Comment, The Bioprospecting Question: Should the United States Charge Biotechnology Companiesfor the Commercial Use of Public Wild Genetic Resources?, 24 ECOLOGY L.Q. 131 (1997); Robert Weissman, A Long, Strange TRIPS: The Pharmaceutical Industry Drive to Harmonize Global Intellectual Property Rules, and the Remaining WTO Legal Alternatives Available to Third World Countries, 17 U. PA. J. INT’L ECON. L. 1069 (1996); Edgar J. Asebey and Jill D. Kempenaar, Biodiversity Prospecting: Fulfdling the Mandate of the Biodiversity Convention, 28 VAND. J. TRANSNAT’L L. 703 (1995).

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samples or undertaking any activity in the nature o f bioprospecting without previous approval o f the NB A ” [and makes it illegal for an Indian citizen to transfer] “the results o f any research with respect to any biological resource for monetary consideration to any person who is not a citizen o f India without NBA approval.” Violators will face a five-year jail term and a fine o f US $30,000.124 This type o f legislation has been inspired in large part by the activities o f companies such as W.R. Grace, the Native Plant Institute, and the Japanese Terumo Corporation that together have patented a number o f products derived from the neem tree. The neem tree is a versatile Indian plant, an evergreen that grows up to fifty feet in height. The neem tree’s bark, flowers, seeds, and fruit have been used medicinally since ancient times to treat a wide variety o f ailments. Additionally, branches o f the neem tree have been used as an antiseptic toothbrush, and its oil has been used in toothpaste and soap. Importantly, residue o f neem seeds, after oil has been extracted, has been used for generations as a potent insecticide against locusts, nematodes, mosquito larvae, boll weevils, and beetles.125 In 1971, Robert Larson, a U.S. national who was aware o f the multiple uses o f the neem tree in India, imported neem seeds to the United States and began experimenting with them, ultimately producing and patenting a pesticide named Margosan-0 made from neem extract. Since the mid-1980s, Grace and other firms have received over a dozen patents on neem-based solutions and emulsions; Larson sold his patent to W.R. Grace in 1988. W.R. Grace has set up a plant and network to process twenty tons o f neem seed per day. Neem seed prices have gone up from 3 00 rupees per

124. K.S. Jayaraman, India Drafts Law to Protect Bioresources, N a t u r e , N ov. 13, 1997, at 108. A key provision of the legislation is that no one will be able to apply for a patent based on research or information gathered from any Indian biological resource without informing the NBA. Before giving permission for patenting, the authority will impose a benefit-sharing fee or royalty which will be credited to a biological diversity fund to be used to develop the communities which helped to conserve the biological resources. See also Sarah Laird, Natural Products and the Commercialization of Traditional Knowledge, in I n t e l l e c t u a l P r o p e r t y R ig h ts a n d In d ig e n o u s P e o p le s: A S o u r c e b o o k , supra note 21; Stephen B. Brush, A Non-Market Approach to Protecting Biological Resources, in INTELLECTUAL PROPERTY RIGHTS AND INDIGENOUS PEOPLES: A SOURCEBOOK 131, supra note 21; Compare R. King, Establishing Reciprocity: Biodiversity, Conservation and New Models for Cooperation Between Forest-Dwelling Peoples and the Pharmaceutical Industry, in INTELLECTUAL PROPERTY RIGHTS AND INDIGENOUS PEOPLES: A SOURCEBOOK 69, supra note 21. 125. Vandana Shiva & Radha Holla-Bhar, Piracy by Patent: The Case o f the Neem Tree, in T h e C a s e A g a i n s t t h e G l o b a l E c o n o m y , supra note 6 , at 146.

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ton to 3000 to 4000 rupees per ton, turning: [A]n often free resource into an exorbitantly priced one, with the local user now competing for seed with an industry that is supplying wealthy consumers in the North. As the local farmer cannot afford the price that industry can, the diversion o f the seed as raw material from the community to industry w ill ultimately establish a regime in which a handful o f companies holding patents will control all access and all production related to neem as raw material.126 Another example o f this biocolonialism where resources and discoveries flow out o f the Third World as “raw materials,” only to return from the laboratories o f the West as intellectual properties owned by foreign corporations, is the case o f the African Soapberry. The African Soapberry has been used traditionally for centuries as insecticide and fish intoxicant. In 1964 an Ethiopian researcher, Dr. Akilu Lemma, reported to the English Tropical Products Institute that the African Soapberry o f Endod was toxic to watersnails that carried the disease dilharzia. Subsequently, the Tropical Plant Institute patented an extraction process to produce a commercial molluscicide to kill zebra mussels that clog North American waterways. Dr. Lemma was neither credited for the discovery nor receives any royalties.127 Even human beings are not exempt from this process. National sovereignty cuts both ways. While India or the countries o f the European Union may not want to go down the path o f biopatents, the United States has forged ahead full speed. Since the landmark 1980 U.S. Supreme Court case, D iam ond v. Chakrabarty,128 that upheld Dr. Ananda K. Chakrabarty’s (a General Electric microbiologist) patent claim in a genetically engineered oil-eating bacteria, the holding thereby overturned the traditional legal rule that “products o f nature” such as life-forms were not patentable subject matter. In 1985, the U.S. Patent and Trade Office (PTO) granted a patent to Dr. Kenneth Hibberd on the

126. Id. at 153; See also Shayana Kadidal, Subject-Matter Imperialism? Biodiversity, Foreign Prior Art and the Neem Patent Controversy, 37 IDEA 371 (1997). 127. Shiva & Holla-Bhar, supra note 125, at 155. See also the patent granted to RiceTec for genetically engineered Basmati Rice (U.S. Patent No. 5,663,484 (Sept. 2,1997)) that was protested by over 50,000 people at the U.S. Embassy in New Delhi, India, in May 1998; See generally Statement from Peoples’ Movements & NGOs in Southeast Asia to the World Trade Organization, No Patents on Rice! No Patents on Life! (May 15,1998) (on file with the Indiana Journal of Global Legal Studies). 128. Diamond v. Chakrabarty, 447 U.S. 303 (1980).

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culture, seed, and plant o f an entire line o f com .129 In 1987, the PTO granted a patent to Philip Leder and Timothy Stewart on a genetically engineered mouse.130 If carried to its logical extreme, the question arises that if a genetically engineered mouse could be patented, why not a genetically engineered person (or part o f a person)? For years epidemiologists have noted that a virus associated with hairy-cell leukemia was prevalent among the Guayami tribe in Panama. In the early 1990s, U.S. researchers took blood samples from members o f the Guayami tribe to analyze. In particular, the blood o f a twenty-six year old mother o f two who had contracted hairy-cell leukemia interested the researchers. In December 1991, acting on the behest o f the U.S. Commerce Department, the researchers applied for a patent on a cultivated cell line from the Guayami woman’s blood. The patent application listed Dr. Jonathan Kaplan o f the Centers for Disease Control in Atlanta as the “inventor” o f the cell line.131 Opposition to the global politics o f intellectual property is emerging. For example, in March 1995, the European Parliament voted to ban the patenting o f life-forms. When news o f the patent application for the Guayami woman’s cell line reached the press, religious leaders and indigenous communities were outraged, and the Commerce Department eventually abandoned its patent application in November 1993. In October 1993, on Gandhi’s birthday, 500,000 Indian farmers staged a mass protest in Bangladore at the Indian offices o f Cargill Seeds Private Ltd., a subsidiary o f the largest privately held corporation in the United States. The farmers objected to the patenting o f the neem seed which had been used in their farming communities for centuries— as well as the agricultural and intellectual property provisions o f the then imminent GATT.132

129. See Ex parte Hibberd, 227 U.S.P.Q. (BNA) 443 (Bd. Pat. App. & Interf. 1985). 130. See U.S. Patent No. 4,736,866 (April 12, 1988); Keith Schneider, Harvard Gets Mouse Patent, A World First, N.Y. Tim es, Apr. 13, 1988, at Al. 131. Kimbrell, Biocolonization, supra note 119, at 142-43. On the possibility of someone (or a corporation) becoming the Bill Gates or Microsoft of the Human Genome, see Nicholas Wade, Scientist ’s Plan: Map All DNA Within 3 Years, N.Y. Tim es, May 10, 1998, at Al: Perkins-Elmer intends to be sparring in laying claim to intellectual property rights over the genome, believing the company will create more demand for its [gene-sequencing] machines if it allows its sequences to be widely accessible. . . .Whether the new company could gain a significant lock on the human genomes . . . is not at all clear. Human Genome Sciences [another biotech company], for example, has already obtained the full-length sequence of 80 percent of human genes . . . and has presumably filed patent applications. 132. Philip L. Bereano, Patent Nonsense - Patent Pending: The Race to Own DNA, S e a t t l e T im es, Aug. 21, 1995, at B5.

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These trends also hold ominous prospects within countries such as the United States. In March 1998, using about $229,000 o f government funds, the U.S. Department o f Agriculture (USD A), in collaboration with Delta and Pine Land Company (the largest producer o f cotton seeds with a seventy-three percent market share), received a patent for a genetic “technology protection system”133that makes it possible for seed companies to sell seeds that will work only for a single growing season. Crops will grow, but their seeds will be unable to germinate. This marks a radical break with farming traditions worldwide— the practice o f farmers saving seeds from one growing season to the next. In South America, poor farmers use knowledge passed down over centuries to select seeds best suited to the local climate and soil. Across the equator their counterparts in South Dakota do it too; 80 to 90 percent o f wheat farmers there save seeds from harvest Seed saving may be good for farmers, but it’s not good for the chemical and seed companies who are spending billions to develop genetically engineered seed varieties. Although a 1970 law permits U.S. farmers to save proprietary seeds for use on their own farms, companies selling genetically engineered varieties now say that farmers must not reuse their patented varieties at all. They say they can’t make ends meet unless farmers pay each and every season. Biotech seed companies have managed to control the “problem” o f seed saving in this country by policing farmers. . . . How can these companies continue spending millions to develop new high-tech seeds if they can’t reach the millions o f farmers in the untapped markets o f China, India, Pakistan, South America? USDA to the rescue. “The need was there to come up with a system that allowed you to self-police your technology, other than trying to put on laws and legal barriers to farmers saving

133. See U.S. Patent No. 5,723,765 (Mar. 3, 1998) (for Control of Plant Gene Expression; Assignee: Delta and Pine Land Co. and the United States Department of Agriculture).

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seed, and to try and stop foreign interests from stealing the technology,” says USDA Scientist Melvin Oliver, the primary inventor o f the new patent-protecting technology. Oliver says the invention is a way to “put billions o f dollars spent on research back into the system.”134 Oliver5s “invention” covers both transgenic and ordinary varieties o f seeds and could even be applied to self-pollinating varieties o f wheat, oat, and rice. With this technology, farmers growing those varieties would have to buy new seed every year. Monsanto, Pioneer, Hi-Bred, and Novartis, and other seed companies have already taken licenses on the “Terminator” technology— licensing revenue is expected to be approximately two million dollars a year to the USDA and Delta and Pine. In May 1998, Monsanto acquired control o f Delta and Pine. This technology may be seen as: A threat to millions o f resource-poor farmers who depend on saving seeds, and exchanging seed with their neighbors, for their livelihood. . . . Since the technology will enable multinational seed companies to enter Second and Third World markets, there is also the fear that greater amounts o f identical crops will be grown worldwide, increasing monocropping and further eroding agricultural biodiversity.135

134. Leora Broydo, A Seedy Business: A New “Terminator ” Technology Will Make Crops Sterile and Force Farmers to Buy Seeds More Often-So WhyDidthe U.S.D.A. Inventlt?, M o t h e r J o n e s O n lin e , (Apr. 7, 1998) at . 135. Id/, interestingly, Monsanto Co. announced in May 1998 that it bought DeKalb Genetics Corp. for $2.3 billion and Delta & Pine Land Co. (and presumably the Terminator patent) for $1.9 billion. See Scott Kilman, Monsanto Buys Two Companiesfor $4.2 Billion, W a l l S t. J., May 12, 1998, at A2: Though expensive, the acquisitions would give Monsanto an army that rivals the muscle of the biotechnology alliance formed last year between DuPont Co. and pioneer Hi-Bred International Inc. . . . The upshot is that some of the most important types of crop technology are dominated by two companies: Monsanto and DuPont, a Wilimington, Del., Chemicals giant The huge premiums paid by Monsanto reflect the intense race by the globe’s chemical giants to build businesses that can exploit their expanding knowledge about genetic engineering of plants.... DeKalb Genetics was the last big U.S. seed company available for purchase; it controls 11% of the lucrative North American com-seed market [holding a patent] for genetically engineering a com plant to make an insecticide that is harmless to humans. U.S. farmers are planting about 12 million acres with the seed this spring. See also Scott Kilman & Susan Warren, Old Rivals Fightfor New Turf-Biotech Crops, W a l l S t. J., May 27, 1998, at Bl: In the three years since the first transgenic seeds were introduced, crop biotechnology

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In another related example, Monsanto, a multinational agrochemical corporation based in the United States, recently genetically engineered and patented soybean and cotton seeds amenable to direct applications o f another patented Monsanto product, a broad-spectrum herbicide, ROUNDUP. These seeds are called ROUNDUP READY, but they have an additional characteristic: crops will die if they are sprayed with broad-spectrum herbicides manufactured by other companies.136 Other agrochemical multinational corporations are getting into the act as well. Plant patents have been granted to varieties o f crop plants that are resistant to Ciba-Geigy’s ATRAZINE herbicide and DuPont’s GIST and GLEAN— it is easier (and cheaper) via genetic engineering to make the crop fit the chemical herbicide or pesticide than vice versa. A new crop variety may cost two million dollars to develop and patent, but a new herbicide may cost more than forty million dollars.137 Monsanto’s ROUNDUP READY cotton comprises about three million acres o f the fourteen million acres o f U.S. cotton crop. Use o f a Monsanto brand cotton guarantees use o f a Monsanto-brand herbicide— good for corporate profits, but not so good for genomic crop diversity. In the summer o f 1997, the three million acres o f Monsanto-brand suffered a catastrophic crop

has grown from ayoung science to a hot business: About halfof U.S. cotton fields, 40% of soybean fields and 20% of com fields are genetically altered. Now, in a stunningly swift concentration of power, much of the design, harvest and processing of genetically engineered crops is coming under [Monsanto and DuPont's] influence.... Monsanto alone stands to control a staggering 80% of the U.S. cotton-seed market, if pending transactions win regulatory approval. . . . Seeds equipped with Monsanto genes are being planted around the globe this year on roughly 55 million acres-roughly the size of all the farmland in Iowa and Illinois. But DuPont has more patents for the [next] and potentially far more valuable - wave, which involves changing plants' nutritional attributes... [such as] instructing soybeans to make more of a natural compound that might fight cancer, or making com that reduces the amount of saturated fat in the eggs of the chickens that eat it. . . . Monsanto [has formed] a joint venture with the grainprocessing behemoth Cargill Inc. ... [which is] America's biggest closely held company, with fiscal 1997 sales of $56 billion. . . .The shrinking number of independent seed companies is making U.S. farm organizations nervous, and public interest groups are complaining to the Clinton administration officials. Monsanto and DuPont “have a choke hold on germ plasm,” or the reproductive cells in plants, says Margaret Mellon of the Union of Concerned Scientists, an activist group. 136. See Mark Arax, No Way Around Roundup: Monsanto’s Bioengineered Seeds Are Designed to Require More o f the Company's Herbicide, M o t h e r J o n e s , (Jan.-Feb. 1997), ; Robert Steyer, Monsanto Gets Green Light on Altered Soybeans, S t. L o u is P o s t- D is p a tc h , May 26, 1995, at 13D; See generally Karen Lehman & Al Krebs, Control o f the World's Food Supply, in T h e C a s e A g a in s t t h e G l o b a l E c o n o m y , supra note 6 , at 122.

137. Vandana Shiva, M o n o c u l t u r e s o f t h e M in d , P e r s p e c tiv e s o n B io d iv e r s ity a n d 112 (1993).

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failure. The cause ofthe failure was unclear. Monsanto also sells a genetically engineered variety o f cotton called BOLLGARD that was bioengineered with Bacillus thurengesis DNA to produce proteins that were toxic to the bollworm; however, BOLLGARD cotton ended up having twenty to fifty times the normal level o f bollworm infestation. However, to the extent that the use o f patented seed stock such as ROUNDUP READY or BOLLGARD become widespread, farmers who use such stock must sign restrictive licensing agreements wherein they agree to terms such as allowing Monsanto to inspect their fields, to use only Monsanto-brand herbicides and not to save seed for further planting— all o f which contribute to both further centralization o f agribusiness and increasing as well as potentially disastrous dependence on vulnerable monocultured seed stock (ten seed companies control about forty percent o f the commercial seed market138)— results that some have referred to as “bioserfdom” underwritten by our intellectual property laws.139

Conclusion This Article has briefly raised questions about the emerging globalized vision o f intellectual property protection embedded in multilateral agreements such as the TRIPS component o f GATT. In particular, there are serious distributive questions about the international political economy o f intellectual property protection as between the “have” and “have-not” nations that should be addressed sooner rather than later. Additionally, on both national and international levels, the question o f constructing and maintaining an intellectual public domain or commons remains extremely important, if only because the unprecedented grab by intellectual property owners o f the developed nations o f the North seems to be imminent. This grabbing obscures traditional understanding (at least within the Anglo-American intellectual property tradition) that intellectual property law is about striking a vital and important balance between the rights o f authors and inventors and the public o f consumers and users as well as the fact that all intellectual property owners are also users. F inally, and perhaps most disturbingly, what are we to make o f the massive and generally uncompensated flow o f cultural and biological resources out o f

138. Broydo, supra note 134, at 56. 139. See Verlyn Klinkenborg, Biotechnology and the Future o f Agriculture, N . Y. Tim es, Dec. 8,1997, at A24.

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the developing and least developed nations o f the South (where they are characterized as “raw materials” or “naturally occurring”) into the laboratories, universities, and factories o f the developed nations o f the North and emerge as strongly-protected and economically valuable intellectual properties, protected against “pirates” o f the developing nations by multilateral intellectual property agreements? At the very least, it is becoming increasingly clear that, whether on the domestic or international level, the vicious circle o f increasingly strong (and virtually automatic) intellectual property protection comes with some serious costs on both the local and global levels and deserves to be addressed now.

Part IV Globalization’s Effects on Intellectual Property Law’s Classic Doctrines and Rationales

[11] The Integration of International and Domestic Intellectual Property Lawmaking by Graeme B. Dinwoodie’ It is increasingly impossible to analyze intellectual property law and policy without reference to international lawmaking. That is not, however, merely because several recent domestic reforms have been prompted by international developments.1Indeed, because o f significant U.S. influence in the formation o f contemporary intellectual property treaties, U.S. law has undergone less change than most in order to comply with newly-assumed international obligations. Nor is it simply because, in an era o f global trade and technological advances, a state is unable effectively to regulate economic activity on its own. Rather, the need for a broader awareness flows most directly from the integration o f the international and domestic lawmaking processes. Consider this historical example. As nations met in Berlin in 1908 to revise the Beme Convention, the United States received an invitation to attend with “full free­ dom o f action.”2 Instead, the Register o f Copyrights attended only as an observer.1 The reason might now seem unduly quaint. Thorvald Solberg, the Register o f Copyrights explained to the Conference that the United States found it impracticable to send a delegate authorized to commit it to actual adhesion to the Beme Convention since some of the questions to be discussed there were pending before the Congress and premature action at the Convention might embarrass the legislative branch of the Government.4 Today, in contrast, there is a conscious blending o f domestic and international lawmaking. International lawmaking demands attention to Washington; and domestic * Associate Professor of Law, University of Cincinnati College of Law; LL.B., Glasgow University, 1987; LL.M., Harvard Law School, 1988. Thanks to Brad McPeek for research assistance. This essay is based on a presentation to the Association of American Law Schools* Workshop on Intellectual Property in San Francisco on March 12, 1999. Copyright O 1999 by Graeme B. Dinwoodie. 1. See, e.g., Sonny Bono Copyright Term Extension Act,Pub. L. No.105-298, 112 Stat. 2827 (1998), tit. I (extending term of copyright partly in response to EU TermDirective);Digital Millennium Copyright Act, Pub. L. No. 105-304,112 Stat. 2860 (1998), tit. I (implementing WIPO Copyright Treaty); Uruguay Round Agreements Act, Pub. L. No. 103-465,108 Stat. 4809 (1994), tit. V (implementing TRIPS Agreement); Trademark Law Treaty Implementation Act, Pub. L. No. 105-330,112 Stat. 3064 (1998), tit. I (implementing Trademark Law Treaty). 2. Barbara A. Ringer, The Role o f the United States in International Copyright - Past, Present, and Future, 56 GEO. L.J. 1050, 1057 (1968) (quoting Thorvald Solberg, The International Copyright Union, 36 Y a le L.J. 68,97 (1926)). 3. Id. 4. Id.

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lawmaking cannot be conducted without regard for what is going on in Brussels, Geneva, Tokyo, and elsewhere. Indeed, in some areas o f intellectual property, we may be moving toward a single lawmaking process that embodies a series o f complex relations among national, regional and global institutions and laws. Within the United States, this biplay between national and international fora - in particular, between executive branch activity at the international level, and legislative activity in Congress - has been treated by some with a certain suspicion.5 This interaction is, however, essential in a global age. And it should not be disconcerting. The Constitution sets out a process for concluding and ratifying treaties,6 and a separate process for enacting legislation.7 Each mechanism has its own limits. It would be somewhat surprising if each branch o f government did not use the leverage with which it is endowed by the constitutional scheme. In any event, this blending or integration o f lawmaking is a political reality o f which we must take account in our assessment o f how intellectual property law is made. This Essay addresses the operation o f this integrated process in the fields o f design and trade dress protection. I will focus on two primary issues, using examples drawn from recent developments in those fields. First, I will discuss the characteristics o f what has arguably been the predominant form o f international lawmaking in recent years, namely the process o f harmonization; and, second, I will identify some current design or trade dress protection issues that may soon be part o f this complex lawmaking process.

I. THE PROCESS OF HARMONIZATION A. S im il a r it y

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A dominant impulse for much recent international lawmaking has been the harmo­ nization o f laws. The objectives o f harmonization are frequently and easily stated: reducing the disparities between national laws will reduce the cost, time and uncertainty involved in determining and/or acquiring rights, thus reducing barriers to innovation and to global trade.8 Indeed, design protection is an area in which these

5. See, e.g.. Pamela Samuelson, The U.S. Digital Agenda at WIPO, 37 Va. J. In t’ l L. 369,373-75 (1997) (discussing relationship between the “digital agenda** of the Clinton Administration pursued in the U.S. Congress and that pursued by the Administration in Geneva at WIPO Diplomatic Conference leading to the WIPO Copyright Treaty). 6. See U.S. CONST, art. II, § 2, cl. 2. 7. See U.S. CONST, art. I, § 7, cl. 2. 8. See e.g., Marshall A. LeafTer, The New World o f International TrademarkLaw, 2 M arq. INTELL.PROP. L. Rev. 1, 5 (1998) (“The numberof trademark registrations worldwide in 1967 was 400,000; by 1992, registrations totaled 1,200,000, a three-fold increase [I]t is obvious that trademark

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arguments resonate with some force because there are few areas o f intellectual property law where the applicable rules are quite so disparate and incoherent. Within the European Union (“EU”), for example, most member states have some form o f special design law. However, the elements o f those systems diverge significantly, even where the elements bear similar labels.9 These disparities motivated the European Commission, in 1993, to propose a directive harmonizing the registered design laws o f the Member States o f the EU around a single model.10 This model offers twenty-five years o f protection to aesthetic and functional designs alike.11 An amended version o f the directive was recently adopted, and published in the Official Journal on October 28 (the same date, coincidentally, on which President Clinton signed the Vessel Hull Design Protection Act.)12 B . R e p l ic a t io n o f L a w s

A second motivation underlying harmonization is perhaps less explicitly stated but is clearly acknowledged. Participants in the process not only wish to make different countries’ laws look the same, but they also seek to make foreign laws look like their laws. That is to say, harmonization is often an attempt to replicate rather than to conciliate - and it is normally the laws o f the developed world that are replicated. Here too, developments in design protection are illustrative. The industrial design provisions in the TRIPS Agreement,13 which intrude slightly more than the Paris Convention upon the autonomy of states to provide design protection on terms and in a form o f their own choosing, are modeled almost without deviation on the provisions found in NAFTA.14 Importantly, this desire reveals itself not merely when the moment o f harmonization arrives. The European Commission indicated that one o f the reasons

owners need speed, certainty, and efficiency in seeking and maintaining their rights internationally.”). 9. See Graeme B. Dinwoodie, Federalized Functionalism: The Future o f Design Protection in the European Union, 24 AM. INTELL. PROP. L. ASS’N Q.J. 611,623 (1996). 10. See Proposal for a European Parliament and Council Directive on the Legal Protection of Design (Dec. 3, 1993), 1994 O.J. (C 345/14) 1. 11. See Hugh Griffiths, Overview o f Developments in Europe on Industrial Design Protection, 4 FORDHAM INTELL. PROP. MEDIA & ENT. L.J. 359,370 (1993) (discussing scope of designs covered by proposals). 12. See Directive 98/71/EC of the European Parliament and of the Council on the Legal Protection of Design (Oct.28, 1998), 1998 O.J. (L 289) 1; Digital Millennium Copyright Act, Pub.L.No. 105-304, 112 Stat. 2860 (1998), tit. V (Vessel Hull Design Protection Act). 13. See Agreement on Trade-Related Aspects of Intellectual Property Rights, Including Trade in Counterfeit Goods, arts. 25-26, Dec. 15,1993,33 I.L.M. 81,93 (hereinafter TRIPS Agreement). 14. See North American Free Trade Agreement, art. 1713,32 I.L.M. 605,676 (1993).

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for developing its design legislation in the first place was “to strengthen its hand internationally.”13 The outcome o f the harmonization process will be more to a country’s liking i f it can present a ready-made model for international adoption. This should not be surprising. Nor is it inherently troublesome. It is more time consuming to develop models from scratch. But it is important to understand that particular forms o f replication are being effected. C . “ H a r m o n iz in g u p ” a n d D e g r e e o f S u b s t a n t iv e A n a l y s is

The Design Directive of the EU also exemplifies the tendency o f harmonization exercises to “harmonize-up,” to mandate higher levels o f protection. With few excep­ tions, the directive did not seek to curtail any o f the more excessive forms o f protection available for designs in some EU countries. Instead, it simply required all member states to make twenty-five years o f registered design rights available equally to aesthetic and functional designs that satisfied a level o f ingenuity falling somewhere between originality and novelty.16 This upward trend may not be hugely different from the direction o f domestic law. But the EU design exercise demonstrates that the desire to harmonize can overwhelm any substantive analysis ofthe merits o f legislative proposals or any effort to assess whether an enhancement o f protection is warranted. Thus, for example, industrial designs are granted broad copyright protection by some EU Member States.17 The continued availability o f copyright will realistically undermine any balance that the Commission embodied in the design regime proper. But restricting copyright protection for designs would require significant philosophical and political accommodation and would take time. The internal market demanded more similar design laws, and it is easier to enact new rights than to curtail existing ones. Yet, better and more appropriate approximation o f the laws o f different states might occur if pursued at more deliberate speed. Past experience suggests that the need for speed may defeat the need to contemplate.

15. See Green Paper on the Legal Protection of Industrial Design, Working Document of the Services of the Commission, Doc. # 11 l/F/5131/91-EN (1991) U3.5.2 (copy on file with author). 16. See Dinwoodie, supra note 9, at 651 -63 (threshold), 705-07 (term). 17. See, e.g.. Case No. 4 Ob 95/91, Decision of the Austrian Supreme Court (Nov. 5, 1991), reprinted in 25 INT’ L Rev. Indus. PROP. & COPYRIGHT L. 126 (1994) (protecting design of Le Corbusier lounge chair under copyright law)\seealso Marie-Ang&le P£rot-Morel, Specific Protection o f Designs and its Relation to Protection by Copyright in French Law, in DESIGN PROTECTION45,47 (H. Cohen Jehoram ed. 1976).

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D. T h e L im it s o f H a r m o n iz a t io n

European initiatives on design and trade dress protection also highlight the limits o f harmonization as the primary instrument o f international intellectual property lawmaking. 1. Supranational Law First, harmonization o f national laws cannot avoid the partitioning o f markets that is occasioned by territorial rights, nor can it eliminate fully the costs o f applying for and maintaining serial national industrial property registrations. Thus, when the European Commission introduced its harmonizing design directive, it also proposed a Regulation (essentially a federal European law) that would create unitary EU-wide design rights, consisting o f a three-year unregistered design right and a registered right that could endure for twenty-five years.18 That Regulation has not yet been adopted. But the EU does already offer EU-wide trade dress rights through a CommunityTrademark Registration. This possibility was introduced by an earlier Regulation, the Trademark Regulation, in 1994.19 And the Community Trademark Office recently issued its first Community-wide registration for a three-dimensional product design trade dress, the shape o f the LEGO building block.20 These supranational laws - both the proposed Design Regulation and the enacted Trademark Regulation - have the potential to achieve the goals o f harmo­ nization, but in a much more comprehensive fashion. 2. Organic Law Second, harmonizing the text o f laws may not achieve a real approximation o f intellectual property rights. The judicial response to a different piece of EU trademark legislation - the harmonization directive - illustrates this point. The definition o f trademark included in the EU trademark harmonization directive expressly referenced product shape and packaging as trademark subj ect matter 21 Prior to the enactment o f

18. See Proposal for a European Parliament and Council Regulation on the Community Design (Dec. 3, 1993), 1994 O.J. (C 29/20) 1. 19. See Council Regulation 40/94 on the Community Trademark (Dec. 20,1993), 1994 O.J. (L11) 1.

20. See Application No. 107,029, CTM Bulletin No. 90/1998, at 57 (Nov. 23,1998) (copy on file with author). 21. See First Council Directive 89/104 to Approximate the Laws of the Member States Relating to Trade Marks, art. 2., 1989 O.J. (L 40) 1, 2.

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the Directive, the U.K. courts had declined to register shapes o f products or containers as trademarks. Indeed, as recently as 1986, the House o f Lords upheld the denial o f trademark registration for the shape o f the Coca-Cola bottle.22 Continental courts were more receptive to the notion o f product design trade dress protection. Since the reforms, U.K. law and continental European law have been ostensibly the same. But two courts, one in Sweden and one in the United Kingdom, have recently been confronted with an identical issue: whether Philips has trade dress rights in the shape of its three-headed rotary shaver.23 The courts reached wholly different results. O f itself, this should not be a concern. It may be that the Swedes are more receptive to visual stimuli than the British, and will tend more readily to identify a product by its shape. If full-scale harmonization is a goal, however, it is o f concern that, identical text notwithstanding, the British court interpreted the law in a much more restricted fashion, apparently because of the U.K.’s different tradition 24 It is not a new lesson that real approximation o f laws, one that will endure, does not come from the transplanting o f disembodied concepts. But the pedigree o f the lesson makes it no less valuable. It is economic and social contexts that sustain these laws, and if a similar social setting does not exist, merely harmonizing text may be o f little value.

II. CURRENT DESIGN AND TRADE DRESS ISSUES FOR U.S. POLICYMAKERS In several domestic venues, we might soon witness discussion o f trade dress or design issues that form part o f this broader process o f lawmaking.

A . V e s s e l H u l l D e s ig n P r o t e c t io n A c t

In October 1998, Congress enacted the Vessel Hull Design Protection Act, and this has now been codified as Chapter 13 o f Title 17 o f the U.S. Code.25 This Act,

22. See re Coca-Cola Co.’s Applications, [1986] 2 All E.R. 274, 275-76 (U.K. H.L.). The shape of the Coca-Cola bottle has been registered as a trademark under the new U.K. law implementing the EU Trademark Directive. See Registration No. 2,000,548 (Sept. 1, 1995). Passing off actions did exist in the U.K. to protect source-identifying designs and packaging. See, e.g., Reckitt & Colman Prods. Ltd. v. Borden Inc., [1988] F.S.R. 601 (U.K. H.L.) (lemon shaped container). 23. See Philips Elecs. NV v. Remington Consumer Prods., 1998 R.P.C. 283 (Eng. Ch.); Ide Line Aktiebolag v. Philips Elecs. NV, [1997] E.T.M.R. 377 (Stockholm Dist. Ct. 1997). 24. See Philips, 1998 R.P.C. at 299. 25. See Digital Millennium Copyright Act, Pub. L. No. 105-304, 112 Stat. 2860 (1998), tit. V (codified at 17 U.S.C. §§ 1301-32).

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which might reasonably be called the Bonito Boats Memorial Act, gives ten years o f anti-copying protection to the designers o f boat hulls. The legislation is subject to a two-year sunset provision. And in the interim, the Patent and Trademark Office and the Copyright Office will jointly undertake a study on the operation of the regime. It would seem inconceivable that this study will not serve as a vehicle for consideration o f a broad-based design protection. Indeed, the current provisions have been drafted in a way that could, with minimal legislative revision, be converted into a broad-based regime. The first model that one would expect Congress to consider would therefore be that used in the Vessel Hull Design Protection Act. Looking at recent legislative activity, however, the second model will be that just developed by the EU. The protagonists in the EU legislative process were the same persons fighting over the design legislation in the United States in the late 1980s, and the supporters o f design legislation (such as car manufacturers) are likely to urge close examination o f the EU model. Moreover, the pressure to enact a broad-based design law along the lines o f the EU model might strategically be increased by claims that the U.S. design patent law does not comply with the requirements o f TRIPS. The argument would be that Article 25 o f TRIPS requires countries to protect designs that are new or original, and that U.S. design patent law insists on more than originality.26 This argument is hardly incontrovertible, but its force in the domestic context may depend upon how the World Trade Organization (“WTO”) dispute resolution process evolves. If panels accord traditional margins o f deference to national interpretations, then the U.S. law might pass muster; if the WTO system becomes more adjudicatory in nature, as was (to some extent) its purpose, the issue might be closer. Thus, we see the potential interaction o f activities at the national, regional and global levels. B . T r a d e D r e s s P r o t e c t io n A c t

A second (perhaps more speculative) example of how national and international events and institutions could converge might be in connection with product design trade dress protection. The Trade Dress Protection Act27 will likely be reintroduced in this session o f Congress, and would for the first time explicitly provide for trade dress protection within the Lanham Act. It would resolve a circuit split on how to

26. See J. H. Reichman, Universal Minimum Standards o f Intellectual Property Protection Under the TRIPS Component o f the WTO Agreement, 29 In t’ l Law. 345, 375-77 (1995) (outlining argument of non-compliance). 27. Trade Dress Protection Act, H.R. 3163, 105th Cong. (1998).

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determine the inherent distinctiveness o f trade dress, and it would provide a statutory definition o f functionality. Given the contentious and confused nature o f both those issues, the legislation is not likely to go through without some debate. Indeed, it is likely that this legislation may be circulating for some time before enactment. But one issue that might receive some attention as part o f that deliberative process is whether, in bringing trade dress protection within the body o f trademark law, (famous) product design trade dress should receive the same protection against dilution as word marks. This issue is currently percolating in the lower courts, most notably in Sunbeam Products, Inc. v. West Bend Co. in the Fifth Circuit,28 and in Lund Trading v. Kohler Co. in the First Circuit.29 That topic, o f course, raises some interesting constitutional questions. But dilution also raises some interesting international questions. The legislative history o f the Federal Trademark Dilution Act suggested (incorrectly, I believe) that dilution protection was endorsed (and perhaps even mandated) by TRIPS.30 If one follows the logic o f the legislative history - and I don’t accept the premise that TRIPS mandates dilution protection - then there should be dilution protection for any type o f trademark, whether words or product design. It may be that we have a conflict between Congress’s interpretation o f TRIPS and the constitutional issues being raised in Lund.il Moreover, as an additional contribution to that debate, within the last two years the World Intellectual Property Organization published a largely unnoticed set o f model provisions on unfair competition that are intended to be an “interpretation” o f the Paris Convention obligations to protect against acts o f unfair competition - and these include dilution protection for product designs.32 In contrast, last year, a U.K. court in Philips Electronics NV v. Remington Consumer Products dismissed the notion that the Paris Convention obliged trade dress protection for product designs, in that case under Article 6bis, arguing that the drafters o f the Paris Convention would not have contemplated designs acting as trademarks.33 What w e see here are conflicting efforts to establish interpretations o f Paris Convention or TRIPS obligations that over time might amount to, or influence, state practice - and that might in turn sway a WTO panel that gives too much weight to the shift, contemplated by the setting up o f the WTO, toward a greater adjudicatory role

28. 123 F.3d 246,257 (5th Cir. 1997). 29. 163 F.3d27(lstCir. 1998). 30. See H.R. Rep. 104-374, at 4 (1995) (noting role of international developments in justifying enactment of the Federal Trademark Dilution Act of 1995). 31. See 163 F.3d at 32. 32. See M o d e l Provisions on P r o te c tio n A g a in st U n fa ir C om petition (WIPO 1996), art. 3(2)(a)(iv). 33. 1998 R.P.C. 283 (Eng. Ch.).

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for the dispute settlement system. To be sure, it would be hugely ironic, and indeed quite unlikely at present, for the United States (of all countries) to be accused o f insufficient protection o f product designs against dilution. This topic, however, potentially introduces national constitutional issues into the milieu that represents the new lawmaking process.34

34. The process continues with pending legislation. See, e.g., Legislation: Database Bill is Still Flawed Administration, Researchers Tell Panel* 57 PAT. TRADEMARK & COPYRJGHT J. (BNA) 418,419 (Mar. 25, 1999) (reporting the testimony of Marybeth Peters, Register of Copyrights, at the Hearing on Proposed Database Legislation, House Subcommittee on Courts and Intellectual Property Law, Mar. 18, 1999, to the effect that “database treaty deliberations in the World Intellectual Property Organization are unlikely to move forward until a U.S. database law is enacted”). See also id. (reporting the testimony of Michael Kirk, Executive Director of the American Intellectual Property Law Association, to the effect that “international pressures [such as the EU Database Directive] compel enactment of a U.S. database protection scheme.”).

[12] A L O N G , STRANGE TRIPS: T H E PH A R M A C E U TIC A L IN D U ST R Y D R IV E TO H A R M O N IZ E G LOBAL INTELLECTUAL PROPERTY RULES, A N D T H E REM AININ G W TO LEGAL ALTERNATIVES AVAILABLE TO T H IR D W ORLD C O U N T R IE S R o b e r t W eissm a n ’ l.

I n t r o d u c t io n

O ne of the great ironies of the recent drive to global free trade — evidenced most notably in the negotiation and implementation o f the N orth American Free Trade Agreement (“N A F T A ”)1 and the Uruguay Round of the General Agreement on Tariffs and Trade (“GATT”)2 — is the inclusion of intellectual property on the free trade bandwagon. By definition, protecting intellectual property is about restricting trade in certain goods. A nd the pharmaceutical industry in the United States, the beneficiary o f massive subsidies and border protection against unwanted import competition, has played a critical role in placing intellectual property protection on the free trade agenda. Yet, ironic or not, intellectual property protection has become a central part of the free trade agenda, as well as the major global trade agreements. This Article considers how this state of affairs

Editor, Multinational Monitor and Director of Essential Information’s International Projects (Washington, D.C.). J.D. 1995, Harvard Law School. Special thanks to Eben Moglen, as well as to Gregory T. Parks and the University of Pennsylvania Journal of International Economic Law editing team. 1 See North American Free Trade Agreement, Dec. 17, 1992, Can.-Mex.U.S., 32 I.L.M. 289 (1993), 32 I.L.M. 605 (1993), reprinted in THE NAFTA (U.S. Gov’t Printing Office ed., 1993); see also North American Free Trade Agreement Implementation Act, Pub. L. No. 103-182, 107 Stat. 2057 (1993) (implementing necessary changes in U.S. law to comply with N A FT a ana reprinting the agreement). 1 See Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations, Apr. 15, 1994, LEGAL INSTRUMENTS — Results of the Uruguay Round vol. 1 (1994), 33 I.L.M. 1125 (1994) [hereinafter Final Act].

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came about, and what it means for the Third World. Its crucial concern is the range of pharmaceutical patent policy options that remain open to Third World nations in the wake o f the successful conclusion of the Uruguay Round and the ensuing establishment of the World Trade Organization (“WTO"). Section 2 provides some background on the range of possible patent regimes. The goal of this section is to emphasize that there is more than a single approach to patent policy. There are viable alternatives to U.S.-style laws that current strict protectors of patents have historically used. Section 3 recounts the U.S. pharmaceutical industry’s political offensive over the last fifteen years designed to force all nations to adopt restrictive patent laws on the model of the United States. Restrictive in this context means that they grant more rather than less control to the patent holder. Restrictive patent rules are therefore the sort preferred by pharmaceutical patent holders. This section is itself divided into two parts. The first part describes the maneuverings and power plays the pharmaceutical industry has used with tremendous success to advance its global interests. The second part focuses on the way the debate over global patent policy has been framed — the language, metaphors and, imagery characterizing the debate and how they have shaped conceptions about property, particularly conceptions of moral right. This part further shows how the pharmaceutical industry is attempting — on the political level, and in the way it frames its arguments — to suppress alternatives to its preferred intellectual property regime. By elucidating this effort, this part attempts to reinforce the very point the industry is trying to obscure: that there are alternatives. Section 4 undertakes a close analysis of the GATT Trade Related Aspects of Intellectual Property Agreement (“TRIPS" or “the Agreement"),3 the basic thrust of which is to require all signatory nations to adopt U.S.-style patent laws. This part argues that despite its highly restrictive appearance, the Agreement in fact leaves a number of options open to Third World signatory nations. Under the Agreement, these countries must provide 3 See Agreement on Trade-Related Aspects of Intellectual Property Rights [hereinafter TRIPS Agreement], Apr. 15, 1994, Marakesh Agreement Establishing the World Trade Organization, Annex 1C, art. 66, para. 1, LEGAL In st r u m e n t s — R esults o f t h e U r u g u a y R o u n d vol. 31; 33 I.L.M. 81 (1994).

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some patent protection, but it can differ in significant ways from the protections of U.S. law. Section 5 considers the costs and benefits of various patent policy alternatives. It focuses especially on compulsory licensing schemes. The concluding part of this Article outlines a patent policy approach for Third World nations that conforms to the TRIPS Agreement and would better serve their national interests than strict U.S.-style laws. 2.

2,1.

P a t e n t P o l ic y O p t io n s

Patent Policy Rationale

The logic underlying the creation of patents4 is familiar: while society wants knowledge in the public domain, inventors need protection for their innovations in order to maintain an incentive for creative inquiry.5 The inventor could provide herself some protection by withholding information regarding the specifics of her invention. However, this would keep the informa­ tion out of the public domain. The attraction of the patent, in addition to certain enforcement and administrability benefits, is that the inventor immediately places her newly-created knowledge in the public domain. In exchange, she receives exclusive rights to use the patented knowledge for a limited period of time.6 Justified even on its own terms, the patent is not an unmitigat­ ed good. Rather, it represents a compromise between competing interests.7 While the patent represents a positive good to the extent that it provides desirable protection to inventors, it represents a compromise from the perspective of public use.8 It

4 In the United States, for example, patents are awarded for new, useful, and nonobvious products or processes, or new, useful and nonobvious improve­ ments to existing products or processes. See 35 U.S.C. §§ 101, 103(a) (1994). 5 See Gary Myers, The Restatements Rejection o f the Misappropriation Tort: A Victory fo r the Public Domain, 47 S.C. L. REV. 673, 685 (1996) (proclaiming the virtues of a system “which can provide protections sufficient to offer suitable incentives to create, while also limiting those rights in a manner that will permit broad access to information”). 6 For example, in the United States, that period of time is 20 years. See 35 U.S.C. § 154(a)(2) (1994). 7 See Wendy J. Gordon, Comment, Assertive Modesty: A n Economics o f Intangibles, 94 COLUM. L. REV. 2579, 2593 n.8 (1994) (explaining the policy balance involved). 8 See id,

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does accomplish its stated goal of placing information regarding the new ly invented item in the public domain, but it does so at the expense of conditioning the right to use this information commercially on securing a license from the patent holder. A license can usually only be acquired for a fee and, in the case of pharmaceuticals, is often not available for any feasible price. 2.2.

Specific Policy Options

As applied to pharmaceuticals, or any product, there is a wide range of options in striking the balance between competing interests, some of which can be pursued in conjunction with others. 2.2.1.

U.S.-Style Patent Protections

At one end of the spectrum is the strict U.S. patent regime.9 The U.S. system provides twenty years of patent protection for both processes and products.10 There are no compulsory terms for patent holders, w ho are free to license or not license their patent, to use it or let it lie dormant for its entire life.11 2.2.2.

No Patents

At the other end of the spectrum is a no-patent regime. U ntil recently, Argentina and Brazil had no-patent systems for pharmaceuticals.12 Companies were free to copy and sell pharmaceuticals invented by other companies, even if patented in other countries, w ithout penalty.13 Unlike CD copying in China, which has been the object of so much recent attention and fury,14 pharmaceutical companies in Argentina and Brazil engaged in copying were not violating domestic law. 9 See 35 U.S.C. §§ 101-203 (1994). 10 See 35 U.S.C. § 154(a)(2) (1994). 11 See 35 U.S.C. §§ 101-203 (1994). 12 See Bruce Rubenstein, Latin American Slow to Protect Patents Under Nafta, CORP. L egal T imes , v. 6, N o . 52, Mar. 1996, at 17 (discussing BraziPs reluctance to implement any patent scheme); Argentina: No Patents fo r Drugs Till 2005, MARKETLETTER, N ov. 7,1994, at 11 (stating that even if Argentina s Congress passed the contemplated patent bill, pharmaceuticals would not enjoy patent protection until the year 2005). 13 See Rubenstein, supra note 12, at 17. 14 See Paul Blustein, U.S. Warns China to Step Up Efforts Against (P iracy\ WASH. P o st , N ov. 30, 1995, at B13.

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Process Versus Product Patents

O ne in-between position is to issue patents only on products and not on processes, or on ly on processes and not on prod­ ucts.15 U n til recently, India’s patent scheme was process-only for pharmaceuticals.16 A drug inventor could patent the process by which he produced a pharmaceutical, but not the drug itself.17 Another producer was free to synthesize the same drug if she was able to develop another industrial process to do so.18 2.2A.

Different Length o f Terms

The period of patent protection can be shortened or length­ ened. Although the United States long held its seventeen year period inviolate,19 there is no inherent reason w hy the protection could not be afforded for only ten years — or thirty years, for that matter. 2.2.5.

Compulsory Licensing

In a compulsory licensing scheme, U.S.-style patents are granted, with one major caveat. During the patent’s exclusive term, patent holders are required to grant non-exclusive licenses to competitors, or any entity that wants to use the patent, in exchange for a reasonable licensing fee.20 U ntil recently, Canada maintained a compulsory licensing system for pharmaceuticals.21

15 For a summary of the arguments respecting process patents, see generally Lara L. Douglass, Note, Medical Process Patents: Can We Live Without Them? Should We?, 3 J. INTELL. PROP. L. 161 (1995). 16 See Martin J. Adelman & Sonia Baldia, Prospects and Limits o f the Patent Provision in the TRIPS Agreement: The Case of India, 29 VAND. J. TRANSNAT’L L. 507, 520 (1996). 17 See Gerald T. Mossinghoff, Research-Based Pharmaceutical Companies: The Needfo r Improved Patent Protection Worldwide, 2 J.L. &TECH. 307, 311 (1987). 18 See id. 19 Although the United State first afforded patent protection in 1793, the term of patent protection was only 17 years until 1994. See Pub. L. No. 103465, § 532(a)(1), 108 Stat. 4809, 4984 (1994) (amending 35 U.S.C. § 154 (1988)). 20 For examples and an overview of compulsory licensing systems throughout the world, see Gianna Julian-Arnold, International Compulsory Licensing: The Rationales and the Reality, 33 J.L. & TECH. 349 (1993). 21 See Janet Hamilton, What's Going on in Intellectual Property Law?, 84 A m . So c ’y

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Work-tbe-Patent Requirements

These requirements have at least two variants. In one, a patent holder who does not “work the patent” — that is, bring it to the market, either as its own good or as a component in another good — within a certain time frame loses his patent rights. This policy addresses the concern that giant companies might file for and control huge numbers of patents, thereby locking up domains of knowledge, even though they do not put the patented knowledge to use. This purely anti-competitive activity undermines the public policy balancing embodied in the initial grant of a patent. This type of work-the-patent require­ m ent probably has little applicability to the pharmaceutical industry. In contrast, the second work-the-patent variant applies directly to the drug industry. It requires a patent holder to literally “work the patent” in the country where it holds the patent. For example, if Uruguay had such a requirement, and Johnson & Johnson took out a patent on a new drug, it could not meet this requirement merely by selling the new drug in Uruguay. It would have to produce the new drug in Uruguay or lose patent protection there. 2.2.7.

Tax Schemes

Taxes can be levied on the sale of patented goods, with the proceeds allocated to purposes such as domestic research. This would allow a country to reap the benefits of econom ic advantage from the patents and re-invest those benefits in furthering scientific knowledge. 2.2.8.

Price Controls

A nation can seek to limit drug prices by instituting a partial or across-the-board system of price controls on pharmaceuticals. Price controls on pharmaceuticals are comm on throughout the industrialized world.22 2.3.

Modem Patent Policies M ost industrialized countries now maintain strict patent

22 See, e.g.y H.R. 3600, 103d Cong., 2d Sess., tit 1(f), § 1572 (1994) (containing President Clinton’s recent proposal for drug price controls).

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regimes, but many of those nations only adopted strict patent laws in recent years.23 After World War II, many Third World nations began experimenting with the range of patent policy variations.24 This experimentation became more purposeful in the 1960s and early 1970s, when a call for a new international econom ic order arose from the Third World.25 Third World policy makers focused attention on the issue of technology transfer.26 No-patent regimes, compulsory programs, and process patent systems all attracted the attention of Third World governments and were used increasingly by these countries.27 3. 3.1.

T he Pharm aceutical Indu str y O ffensive

Political Maneuvering

By the late 1970s, the momentum underlying the call for a new international economic order had slowed significantly. W ith the election of Ronald Reagan in 1980, the m omentum shifted direction. By 1985, the pharmaceutical industry was on the offensive, in an effort to force Third World countries to adopt U.S.-style patent laws.28 W hile the industry attempted to directly persuade Third World policy makers of the merits of guaranteeing strict patent protection, its main strategy was to persuade U.S. policy makers to coerce Third World countries to adopt restrictive patent rules.29 The U.S. pharmaceutical industry trade association — until recently known as the Pharmaceutical Manufacturers Association (“PM A”) and now called the Pharmaceutical Research and

23 See infra note 113 and accompanying text. 24 See G a r y G ereffi, T h e P h a r m a c e u t ic a l In d u s t r y a n d D e p e n d e n ­ c y IN THE T h ir d W o r l d 3 (1983) [hereinafter GEREFFI, PHARMACEUTICAL INDUSTRY] (stating that “modernization theory arose after World War IE”). 25 See id. at 128-35 (citing the example of Mexico’s “new major policy initiatives” in this time period). 26 See id. at 202-03 (citing India’s attempts to transfer technology from transnational corporations to domestic industries through the use of various altered policies). 27 See id. 28 See Julie Kosterlitz, Rx: Higher Prices, NAT’L J., Feb. 13, 1993, at 76. 29 See id.

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Manufacturers Association (“PhRMA”)30 — became one of the most aggressive and high profile trade groups in Washington.31 The PM A hired Gerald Mossinghoff, Assistant Commerce Secretary and Commissioner of Patents and Trademarks in the Reagan administration from 1981 to 1985, as its president.32 Other prominent government officials also spun through the revolving door between government and the pharmaceutical industry. For example, PM A vice president Harvey E. Bale Jr. worked at the Office of the U.S. Trade Representative (“USTR”) for twelve years, leaving in 19 87.33 David Bier, vice president for government affairs at Genentech Inc., a San Francisco-based biotechnology company, formerly worked on trade and intellectu­ al property matters for the H ouse Judiciary Committee.34 Representatives of the PM A and individual pharmaceutical companies acquired seats on important advisory boards that shape government policy. Executives from D ow Chemical Co., Johnson & Johnson, Merck, and other pharmaceutical firms became part of a special presidential trade advisory group.35 Senior officials from the PMA, Pfizer, and Immunon Technologies36 joined a technical advisory committee to the USTR on intellectual property rights.37 Officials from DuPont, Monsanto and Procter & Gamble, each of which has significant pharmaceutical interests, also served on the advisory committee.38 The industry also undertook aggressive high-profile lobbying campaigns, testifying frequently before Congressional committees about the need to secure greater patent protection abroad. One significant element of the industry's political campaign was the funding of academic

30 See Victor Ostrowidski, A New Look at the PMA: Pharmaceutical Manufacturers Association Changes Name to Pharmaceutical Research and Manufacturers Association, AM. DRUGGIST, June 1, 1994, at 11. 31 See Kosterlitz, supra note 28, at 77. 32 See id. 33 See id. (“Bale concedes that his connections are a plus for PMA. ‘I hope so,’ he said. ‘I don’t hide it. In fact, I’m happy to help them out.’”). 34 See id. 35 See id. 36 Immunon Technologies is a Bedford Hills, New York, biotechnology firm. See id. 37 See id. 38 See id.

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studies proclaiming the merits of strict patent protections.39 Although the industry would come under attack domestically in the 1980s and 1990s for maintaining inflated prices on domestic sales, the campaign for the U.S. government to adopt the industry’s international goals as its own met w ith tremendous success.40 Framing other nations’ intellectual property regimes as a U.S. trade issue,41 the pharmaceutical industry succeeded in making strict international protection of intellectual property a central goal of U.S. international economic policy. The industry’s success manifested itself in at least three ways. First, the Office of the USTR exerted extraordinary pressure on individual Third World countries to adopt U.S.-style patent laws.42 Second, intellectual property protection became a central component of NAFTA, and promises to be included in any additional regional free trade agreements involving the United States.43 Third, and most importantly, the United States insisted that intellectual property protection be included in the Uruguay Round GATT negotiations, which began in 1986 and finally concluded in 1994.44

39 See id. 40 U .S. Trade Representative Clayton K. Yeutter recalls that when he left government service at the ena of the Ford administration, hardly anyone in Washington had ever heard of the notion of intellectual property. He returned to government two years ago to find it one of the hottest buzzwords in town. ‘Intellectual property issues have become central to congressional debate on trade policy,’ says Sen. Patrick Leahy (D-Vt.). John Burgess, Fighting Trespassing on "Intellectual Property "* U.S. Tries to Prevent Overseas Copying of Everything From Music to Microchips, WASH. POST, Dec. 6, 1987, at H I. 41 The industry’s success in framing its goal of securing strict patent protection in other countries was itself a victory. This is especially true in light of the disparity between the industry’s objectives and the traditional domain of international trade policy — which was primarily focused on tariff and related matters. See Curtis Reitz, Enforcement o f the General Agreement on Tariffs and Trade, 17 U. PA. J. INT’ L ECON. L. 555, 559-79 (1996) (discussing the history and legacy of the GATT system prior to the Uruguay Round). 42 See Burgess, supra note 40, at H I, H4 (detailing the extensive pressure exerted by various U.S. government authorities, including the USTR). 43 See International Agreements: Intellectual Property Enforcement to Play Major Role in NAFTA Talks, 8 Int’l Trade Rep. (BNA) No. 42, at 1553 (Oct. 23, 1991). 44 See Burgess, supra note 40, at H4.

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Section 301

Beginning in the mid-1980s, the Office of the USTR, acting on the authority conferred on it by Section 301 of the Trade Act of 1974, undertook an annual rite of placing countries which did not provide adequate protection to U.S. intellectual property on “watch lists” and “priority watch lists.”45 Those countries placed on watch lists were notified that the United States would impose trade sanctions upon them (in the form of tariffs on their exports to the United States) if they did not reform their patent laws.46 The process was intensified after 1988, when Congress enacted “Special 301” of the 1988 Trade Act, a provision which required the USTR to impose sanctions on countries which did not revise their patent laws.47 Although the USTR placed several dozen countries on watch lists, the main targets of USTR sanction threats were large Third World countries that had begun to develop domestic industries to compete against U.S. pharmaceutical manufacturers in their domestic market: India, Argentina, Brazil, Taiwan, and Thai­ land.48 Some observers speculated that the USTR focused particularly on India and Brazil because of their leading role in advancing Third World demands in GATT negotiations.49 In October 1988, for the first time in the intellectual property arena, the United States acted on its trade sanction threats.50 Acting in response to a petition filed by the PM A,51 and follow­ ing lengthy negotiations, the Reagan administration imposed 100% tariffs on thirty-nine m illion dollars worth of Brazilian imports.52

45 See Hills Removes Taiwan, Korea, Saudia Arabia from Priority List, Five Countries Remain, 6 In ti Trade Rep. (BNA) No. 44, at 1436 (Nov. 8, 1989). 46 See id. 47 See Kantor Singles Out Brazil, India, Thailand for Special 301 Designation, 10 In ti Trade Rep. (BNA) No. 18, at 726 (May 5, 1993)., 48 See id, 49 See Reagan, Charging Patent Piracy, Imposes Sanctions on $39 Million o f Brazilian Goods, 5 In ti Trade Rep. (BNA) No. 42, at 1415 (Oct. 26, 1988) (reporting on comments from foreign relations officials in Brazil). 50 See id. 51 In addition to requiring certain action by the USTR, Section 301 and Special 301 allow private parties to petition the Trade Representative to impose sanctions against a country for discriminating against U.S. products. See id. 52 See id.

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The government claimed that this amount was equivalent to the market loss to U.S. pharmaceutical makers arising from Brazil’s relative lack of patent protections for pharmaceuticals.53 The Brazilian government and media reacted with outrage. Reflecting popular sentiment, Veja, a leading Brazilian weekly, headlined its story on the sanctions as “The Empire Strikes Back.”54 The Brazilian government denounced the U.S. exercise in big power unilateralism as illegal under GATT, claiming that the thenexisting version of the trade agreement required member countries to arbitrate disputes through the GATT dispute settlement machinery.55 The sanctions, and a change of government, succeeded in changing Brazil’s patent laws — though still not to U.S. satisfac­ tion. In 1990, when the neo-liberal government of new President Fernando Collor de Mello agreed to revise its patent law to provide for strong patent protections, the United States lifted the sanctions.56 The 1990 agreement ameliorated the tension in the United States-Brazil conflict, but it did not completely eliminate the friction. The USTR placed Brazil on its priority watch list in

53 See id. The Office of the USTR stated: T h e President declared his intention to take this action on July 22, 1988 at the conclusion of an unfair trade investigation under section 301 of our trade laws, following over two years of unsatisfactory bilateral consultations/ [then-USTR] Clayton Yeutter said. ‘Pharma­ ceutical and chemical companies have little motivation to invest in the research and development of products important to mankind unless they are assured that the right to market those products will be safeguarded by patent protection. Patent piracy simply cannot go unchallenged. Press Release From the Office o f the United States Trade Representative on President Reagan’s Decision to Impose Trade Sanctions Against Brazil, FEDERAL NEWS Service , Oct. 20,1988, available in LEXIS, News Library, Arcnws File. 54 See Julia Michaels, U.S. Sanctions Over Drug Patents Brings Sharp Words From Brazil, THE CHRISTIAN SCI. MONITOR, Oct. 25, 1988, at 1 (quoting the Veja article). 55 “Paulo Tarso Flecha de Lima, Brazilian foreign ministry’s No. 2 official, told a news conference that the sanctions are ‘illegal, truculent, unjustified and do not have the support of international law.’” william R. Long, Brazil Blasts U.S.-Imposed Trade Sanctions as “Illegal* and “Unjustified", L.A. T imes , Oct. 22, 1988, at 2. 56 See Hills Lifts $40 Million in Sanctions After Brazil Pledges to Enact Patent Law, 7 In ti Trade Rep. (BNA) No. 27, at 996-97 (July 4, 1990).

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1991 and 1992,57 and named Brazil one of the worst offenders of intellectual property rights (a “priority foreign country”) in 1993.58 W ith some variation, the USTR applied the same sort of persistent pressure to the other countries designated as primary infringers of U.S. companies’ intellectual property. Thailand and Taiwan both agreed to substantial changes in their patent laws, largely because of U.S. pressure.59 India and Argentina essential­ ly withstood the direct pressure from the USTR. 3.1.2.

NAFTA

The inclusion of intellectual property protection in N A FT A required that both Mexico and Canada change their patent laws. These changes were resisted most strongly in Canada, which had long maintained a compulsory licensing scheme.60 In 1987, Canada revised its Patent Act to provide patent protection for seven to ten years before triggering its compulsory licensing requirements.61 Although welcomed by the Canadian and U.S. pharmaceutical companies at the time, those changes left Canadian law far short of U.S. standards.62 N A FT A provided an opportunity for the industry to address this shortfall. Indeed, on February 4, 1993, Canada enacted Bill C-91, replacing its compulsory system w ith a U.S.-style regime.63 But this change only came after a long and bitter fight. That fight was predictable, given the prevailing analysis that “[t]here’s one point everyone agrees on: The federal government’s new

57 See USTR Cites India, Taiwan, Thailand as Worst Intellectual Property Offenders, 9 Inti Trade Rep. (BNA) No. 19, at 784-85 (May 6, 1992). 58 See Kantor Singles Out Brazil, India, Thailandfor Special 301 Designation, 10 In ti Trade Rep. (BNA) No. 18, at 726 (May 5, 1993). The United States insisted that Brazil’s patent protections were too short, and complained about working requirements and compulsory licensing provisions. See id. 59 See Peter Ungphakorn, Thais Pass Bill After American Patent Demands, Fin. TIMES, Feb. 28,1992, at 3; Taiwan Strengthens Patent Laws to Help GATT Entry, Reuters, Dec. 25,1992, available in LEXIS, News Library, Arcnws File. 60 See Kosterlitz, supra note 28, at 76. 61 See Act of Nov. 19, 1987, ch. 41, 1987 S.C. 1171 (Can.). 62 See id. 63 See Patent Act Amendments Receive Royal Assent, Canada NewsWire, Feb. 4, 1993, available in LEXIS, News Library, Arcnws File.

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patent plan will raise drug prices.”64 Estimates of the cost to Canadian consumers of passage of C-91 ranged as high as seven billion Canadian dollars over a twenty-year period.65 In the face of these estimates of skyrocketing prices, the industry promised that, if the bill were passed, it would invest an additional $530.6 m illion in research in Canada, raising its percentage of profits devoted to research from eight to ten.66 Opponents of the patent law reform included the thenopposition Liberal Party, the Canadian generic drug industry, consumer advocates, health activists, and all of the country’s provincial governments.67 They harped on the expected cost of the change.68 Opponents also emphasized the consequences of Canada’s previous stronger patent policy enacted in 1987: drug costs had risen; only approximately 400 of the 3,000 new research jobs promised by the industry had been created; little basic drug research took place in Canada; and Canada had gained little ability to manufacture the active ingredients of drugs.69 Opponents lobbied hard and undertook a substantial public education effort, but their efforts fell for naught.70 The Conservative Party then held an absolute majority in Parliament, rendering the result of the fight predetermined once the government committed itself to Bill C-91.71 The generic industry also unsuccessfully sought to prevent enactment of C-91 by legal action, claiming it violated the 1987 Patent Act’s provision precluding further revisions to the

64 Ian Austen, Side Effects Unknown: Estimates o f Cost, Real Impact o f New Law Vary Wildly, OTTAWA CITIZEN, Dec. 6, 1992, at A7. 65 See id. 66 See Canadian 091 Goes to the Senate, MARKETLETTER, Dec. 21, 1992, available in LEXIS, News Library, Arcnws File. 67 See Shawn McCarthy, Provinces Try Last-Ditch Plea to Halt Drug Bill, TORONTO Star , N ov. 18, 1992, at A10. In Canada’s highly decentralized governing system, the provinces are largely responsible for running the health care system, and it is the provinces who will be forced, in significant part, to bear whatever increased costs attach to C-91. See id. 68 See id. 69 See Ian Austen, Few Benefits from 1987 Drug-Patent Changes: Study; Despite Report, Ottawa Moves to Further Reduce Competition in Pharmaceutical Industry, GAZETTE (Montreal), Sept. 17, 1992, at E3. 70 See Canada's Bill C-91 Almost There, PHARMACEUTICAL BUS. N e w s , Dec. 18, 1992, available in LEXIS, News Library, Arcnws File. 71 See id.

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country’s patent law for a ten-year period.72 A ll parties saw the passage of C-91 as a victory for the U.S. pharmaceutical industry, and one orchestrated by the industry as well. The Canadian industry is effectively a subset of the U.S. industry. The Pharmaceutical Manufacturers Association (“PM A”) of Canada is a mere fief of the U.S. PMA. Am ong the “Canadi­ an” companies pledging to increase their Canadian research if C-91 passed were: Marion Merrell Dow, Merck Frosst Canada, BristolMyers Squibb, Pfizer Canada, Eli Lilly Canada, and Upjohn.73 It seemed clear that the U.S. companies were able to advance their interests through their branch operations and subsidiaries in Canada. These companies also lobbied from the U.S. side of the border. One manifestation of the U.S. industry’s influence appeared in a letter to then-USTR Carla H ills from the Intellectu­ al Property Committee, a coalition of thirteen major U.S. companies including DuPont, Merck, Pfizer, IBM, General Electric, and General Motors.74 The letter included negotiating instructions and specific demands for inclusions in N A FT A to satisfy industry.75 The letter was leaked in Canada, sparking outrage.76 The success o f the U.S. industry in securing patent provisions in N A FTA was perhaps best summarized by Edgar G. Davis, former vice president of Eli Lilly and now professor at Harvard University’s Kennedy School of Government.77 Davis boasts that putting the patent provisions in N A FT A was “'a master stroke, [demonstrating] what an industry that has its act together can accomplish.’”78 3.1.3.

The GATT Attack

The industry’s success through 301 actions and N A FTA were critically important. It was able to set an example by targeting the most prominent opponents of alternative pharmaceutical

72 See id. 73 See id 74 See Linda Diebel, How U.S. Drug Lobby Put New Patent Law Atop Canada’s Agenda, TORONTO STAR, Dec. 6, 1992, at A l. 75 See id. 76 See id 77 See Milt Freudenheim, Canadians See Rise in Drug Costs, N.Y. TIMES, Nov. 16, 1992, at D l. 78 Id.

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patent regimes. But the one-country-at-a-time approach also had significant drawbacks for the industry, the most obvious of which was that it was inefficient. There are far too many countries with lucrative pharmaceutical markets to approach individually. If pharmaceutical companies’ intellectual property was truly going to be protected on a global basis, some kind of comprehensive agreement would be necessary. GATT was not the most obvious place for fashioning such an agreement. The existing international agreements on intellectual property, the Paris Convention on patents79 and the Berne Convention on copyrights,80 are administered by the United Nations-affiliated World Intellectual Property Organization (“W IPO”).81 Third World countries strongly favored WIPO negotiations over revision to international intellectual property obligations.82 They noted that the WIPO had traditionally handled such matters.83 Furthermore, Third World countries felt that they would exercise greater influence in W IPO negotiations than they would in GATT.84 The United States insisted, however, that the GATT Uruguay Round negotiations include intellectual property.85 This point continued to be disputed into the negotiations, with Chile'asserting as late as 1990 that intellec­ tual property standards are themselves neutral and that all substantive proposals on intellectual property made in GATT should be forwarded to WIPO.86 Nonetheless, the U.S. insis­ tence on confining the negotiations to GATT prevailed, and the W IPO alternative faded as the Uruguay Round negotiations

79 See Paris Convention for the Protection of Industrial Property, July 14, 1967, 828 U.N.T.S. 305, 21 U.S.T. 1583. 89 See Berne Convention for the Protection of Literary and Artistic Works, July 1, 1967, 828 U.N.T.S. 22. 81 See id. art. 1 (referencing the WIPO). 82 See Craig Edgar, Note, Patenting Nature: GATT on a Hot Tin Roof, 34 W ashburn L. J. 76, 98 n.54 (1994)

83 See id. 84 See Jean M. Dettmann, GA T T : A n Opportunityfo r an Intellectual Property Rights Solution, 4 TRANSNAT’L LAW J. 347, 356 (1991) (explaining that in WIPO, each nation has a vote and Third World Countries outnumber developed countries, whereas GATT relies on a “consensus” framework giving developed countries more leverage). 85 See Robert Weissman, Patent Plunder: TRIPping the Third World, M ultinational M onitor , Nov. 1990, at 8.

86 See id. at 9.

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continued into the 1990s.87 The United States also rejected out of hand a Third World proposal to negotiate separate agreements covering counterfeit goods and patents.88 Throughout the TRIPS negotiations, the United States maintained a firm stance; for an agreement to be reached, other countries would have to adjust to its position.89 That position, essentially calling for the world to adopt U.S.-style patent law, was developed largely by the pharmaceutical industry, according to the industry itself. The Intellectual Property Committee (“IPC”) claimed to have “‘played a key advisory role, at USTR's request, in developing the official U.S. proposal on intellectual property that the U.S. government tabled before the GATT TRIPS working groups in October 1987.’”90 The Committee added in its promotional materials that its “‘close relationship with USTR and Commerce has permitted the IPC to shape the U.S. proposals and negotiating positions during the course of the negotiations.5”91 The overwhelming success of the pharmaceutical industry's GATT effort was highlighted in 1992. Ironically, this occurred even as the industry was threatening to oppose the TRIPS Agreement. The source of the industry's frustration was the proposal for a ten-year transition period for Third World nations to develop full-fledged strict patent regimes.92 The industry's

87 See id. 88 See id. 89 See GATT: U.S. Proposal on Intellectual Property Is Presented to GATT, Gets Mixed Reviews, 7 Int’l Trade Rep. (BNA) No. 14, at 680 (May 16, 1990) (detailing a United States proposal encouraged by other industrialized countries and criticized by Third World countries). 90 Weissman, supra note 85, at 8. 91 Id. 92 See, e.g., Harvey E. Bale, Jr., New GATT Draft Text is a Potential Step Backwardfo r Intellectual Property Rights, LEGAL BACKGROUNDER, Mar. 6,1992, at 12, available in LEXIS, News Library, Arcnws File (criticizing the lenient nature of the transition rules). This criticism of the TRIPS agreement often focuses on the various economic and non-economic harms purportedly caused by the continuing opportunity for international piracy over the ten-year transition period: The December 20 TRIPS text, while containing a number of both positive and negative elements, is critically defective because it would: (1) allow at least another decade of theft of U.S. pharmaceutical and other innovations; (2) give pharmaceutical pirates in Argentina, Brazil, Thailand, Hungary, India, and other developing nations grounds for

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vociferous opposition to a ten-year transition period93 obscured how much it had won. It had completely seized control o f the terms of the debate. The disputed issue was no longer whether the rest of the world should or would adopt strict patent rules, but when it would. Third World advocates of alternative patent policies had largely silenced their criticisms of the U.S. demands. Their silence reflected domestic political changes; a decision to make sacrifices in the TRIPS text in exchange for purported benefits elsewhere in GATT; and, critically, the fact that the global intellectual and political climate had changed, making it much harder to argue for alternative patent schemes than it had been ten years earlier. 3.2.

The Conceptual Offensive: Framing for Victory

Relying on the studies it had funded over the years, the industry was able to gather an impressive set of data and argu­ ments to make two powerful claims about the importance of patent protection.94 First, it contended that inadequate interna­ tional intellectual property protection costs U.S. manufacturers billions of dollars in sales annually.95 N o one estimated the cost to the drug industry at anywhere near those levels, but the figure was placed in the billions nonetheless.96 The ITC study estimat­ ed the cost to ten drug manufacturers to be almost two billion dollars in 1986, and pharmaceutical maker Merck estimated the

opposing early reforms that would stop piracy and encourage investment and innovation in these countries; ana, (3) continue to foster for a decade the export from India, et al., of substandard and counterfeit medicines that seriously harm consumers and the environ­ ment of the Third World — a subject of growing attention by the World Health Organization (“WHO”). Id. 93 This provision was eventually included in the final TRIPS Agreement. See infra note 156 and accompanying text. 94 See Al Wyss, Patent Protection Winning New Roundy CHEMICAL MARKETING Rep., Mar. 19, 1990, at SR22 (citing many of the studies used by the industry).

95 A widely cited study (the “ITC study”) by the International Trade Commission (“ITC”) placed the cost between $43 billion and S61 billion for all intellectual property violations. This estimate included not only generic drugs, but copyright violations like software copying and trademark infringe­ ments such as Rolex watch imitations. See id, 96 See id.

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cost to be six billion dollars annually for the entire industry.97 In an era of persistent and large U.S. trade deficits, these were numbers large enough to make policy makers take notice. Second, the industry made an impressive set of arguments about the necessity of strong intellectual property protection in fostering economic development.98 It argued that respecting patent rights would actually benefit the Third World by encourag­ ing foreign and domestic investment in research and by enabling high technology companies to engage in technology transfer with Third World nations. But however convincing these arguments, it was not their merit which made it so difficult to defend genuine alternative approaches to patent policy by the early 1990s.100 Rather, that depended crucially on the ability of the pharmaceutical industry and its allies in the U.S. government101 to frame the debate on their terms. 3.2.1.

R ights Talk

Characterizing patent protections as a kind of intellectual property “right” was a first step in setting the terms of debate. This characterization is of course not novel; patents, trademarks, and copyrights have long been viewed as intellectual property rights. This is evidenced, in part, by the comm on reference to intellectual property rights by the acronym “IPR.”103 N o r is the characterization, from a legal standpoint, startling or at all surprising. Lawyers com m only understand that the holders of government-authorized powers have “rights,” w ithout attaching any particular moral force to the term.

97 See id. 98 See, e.g.y Richard T. Rapp & Richard P. Rozek, Benefits and Costs o f Intellectual Property Protection in Developing Countries, J. OF WORLD TRADE, Oct. 1990, at 75, 77-81 (discussing a study funded by a grant from the PMA).

99 See id. 100 See infra Section 6 for a critique of the second set of arguments. 101 The period of time involved here is expansive enough to include officials in the Reagan, Bush, and Clinton administrations. 102 See Robert Fredrico, Operation o f the Patent Act o f1790,18 J. PAT. OFF. SOC. 237, 238 (1936) (consistently describing patents as a “right”). m See, e.g., Robert P. Merges, Comment, O f Property Rules, Coase, and Intellectual Property, 94 COLUM. L. REV. 2655,2655 (1994) (referring consistent­ ly to “IPRs”).

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In the debate over international patent policy, however, the use of the term “right” exercised an important influence. As a preliminary matter, it is important to recognize that while “rights” may be commonplace in legal discourse, the allocation or recognition of a right may nonetheless privilege certain actions or relations. Characterizing something as a right tends to immunize it from challenge both in practice and in the realm of ideas. To transgress a right is to “violate” it, to commit a wrong. To define something as a right is to remove it, more or less, from political challenge. Even if it is not considered a “natural” right; in moral terms, a right is supposed to be somewhat inviolate. While rights talk may have the general effect in legal discourse of elevating the defined conduct or relationship above politics, that effect was particularly strong in the case of patent policy. The vociferous insistence of industry and the U.S. government assumed a moral character.104 This was an especially notable accomplishment in light of the intangible nature o f intellectual property. Additionally, intellectual property is more obviously a creation of the state than other sorts of property. Hence it intuitively enjoys less of a moral right than other property claims. At the practical level, one does not receive a patent until an invention is certified by the state as new, useful, and nonobvious.105 This makes it unusually clear that the state could choose not to grant the right at all. At the conceptual level, patent rights evaporate after a set period.106 Governments may grant patents for longer or shorter periods, on conditions, or not at all. The characterization of an inventor or producer’s intellec­ tual property interest as a “right” works to obscure the contingent nature of the patent.107

104 See infra Section 3.2.2. 105 See, e.g., 35 U.S.C. § 101-103 (1994) (prescribing conditions for patentability). 106 In part, this reflects the policy balancing embedded in the decision to grant patents at all. See supra note 7 and accompanying discussion. 107 Put another way, imagine the debate was not about intellectual property rights, but about intellectual property grants (or licenses or privileges). That would cast the discussion in an entirely different light. If tne government is granting something, it seems logical to permit tne government to attach conditions to it. A grant is discretionary as well, suggesting the government has the power — and is morally entitled — to refuse to make the grant altogether.

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Piracy

The dominant and most aggressive metaphor of the debate was piracy. The pharmaceutical industry and the U.S. government labeled generic drug companies which copied pharmaceuticals patented in other countries “pirates.”108 They denounced countries that permitted drug copying as harboring pirates.109 The pharmaceutical industry did not invent this metaphor, which has been used for hundreds of years.110 But the pharma­ ceutical industry did use the metaphor more extensively, aggres­ sively, and successfully than any before. It became a term with emotional content, rather than just descriptive purpose. The piracy metaphor effectively changed a policy debate into an absolutist moral drama. Theft is simply wrong, and theft by violence is even worse. There is no room for a policy discussion about the merits of piracy, nor any space for compromise in the direction of pirates. Consider the stridency of C.L. Clemente, the vice president-general counsel of Pfizer: W hy is it that another government can base a policy of helping the consumers in their country to steal foreignowned technology? If we went back to the days when countries engaged in piracy, wouldn’t it have been ludicrous to say, ‘Well, Brazil owes the United States a great deal of money, so we cannot stop their pirates from boarding our ships because, after all, they obtain a great deal of revenue from this, and gold and silver, et cetera.’ Obviously, that’s absurd. It’s really not too different when we’re talking about intellec-

108 See C.L. Clemente, A Pharmaceutical Industry Perspective, in INTELLEC­ TUAL P r o p e r t y R ig h t s a n d C a p i t a l F o r m a t i o n in t h e N e x t D e c a d e 127, 132-33 (Charles E. Walker & Mark A. Bloomfield eds., 1988). 109 See id. Some Third World development activists^ and their allies in industrialized countries reverse the metaphor by labeling pharmaceutical company attempts to patent genetic strains cultivated by Third World farmers and herbalists as “biopiracy.” See Hope Shand, Patenting the Planet, MULTINA­ TIONAL MONITOR, June 1994, at 9; see also infra Section 3.2.3. (discussing the author versus source distinction). 110 See, e.g.y Evans v. Eaton 20 U.S. (7 Wheat.) 161, 163 (1822) (describing an alleged use of the Hopperboy, a flour manufacturing machine, as “pirating”).

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tual property; that kind of stealing is just as bad.111 Similarly, when the PM A voiced its opposition to a ten-year phase-in for the strict GATT patent requirements, association representatives decried the effort to provide a “long ‘grace period’ for piracy.”1’2 3.2.3.

Author Versus Source

Professor James Boyle suggests another metaphor underlying the patent policy debate: the figure o f the romantic author as inventor and creator, someone w ith a right to make a property claim because of the original contribution she has made to general knowledge.113 The PM A has not claimed for itself authority conferred by Shakespeare, but it is highly cognizant of the principle enunciated by Professor Boyle. In fact, in 1994, the PM A changed its name to the Pharmaceutical Research and Manufacturers of America.114 This critical move emphasizes the originality and unique contribution of member companies’ research. The emphasis on their research efforts — as opposed to the “imitative” or pirating techniques115 of their generic competi­ tors — is a moral claim, a means to defend high drug prices in the United States and to justify the demand that other nations adopt U.S.-style patent laws.116 This distinction serves as the basis for the normative "author versus source” dichotomy that the PhMRA attempts to exploit. Perhaps the most illuminating application of Professor Boyle’s author versus source distinction is in the context of Third World biological resources patenting. Most of the world’s biodiversity is located in the Third World, particularly in tropical and semi-

111 Clemente, supra note 109, at 132-33. m Bale, supra note 92, at 12. 1,5 See James Boyle, A Theory o f Law and Information: Copyright, Spleens, Blackmail, and Insider Trading, 80 CAL. L. Rev. 1413, 1510 (1992). 114 See supra note 30. 115 See Gerald T. Mossinghoff, Research-Based Pharmaceutical Companies: The Need for Improved Patent Protection Worldwide, 2 J. OF L. & TECH. 307, 307 (1987) (“There are two kinds of pharmaceutical companies: research-based companies and imitators that do not carry out substantial research on their own but profit from the fruits of the research of others.”). Whether the claim to originality is fully justified is addressed in the public versus private discussion, see infra section 3.2.4.

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tropical regions.117 O nly a relatively small fraction of that biodiversity has been categorized and studied, and scientists are increasingly coming to believe that it may contain the ingredients for a wide array of life-saving medicines.118 Accordingly, multi­ national pharmaceutical corporations are increasingly surveying plant life in Third World regions to locate genes that can form the basis for new drugs.119 Although naturally occurring substances are not patentable, the pharmaceutical companies are able to synthesize chemical substances with mild alterations and patent them .120 The image of the adventurous pharmaceutical company explorer-genetic prospector superficially suggested by the corpo­ rate effort to survey Third World genetic resources is inaccurate. Company representatives do not wander into the rain forest jungle to collect samples. Instead, corporate botanists and anthropologists rely on Third World farmers and herbalists, especially from indigenous communities that make their home in or live off of the rain forest, to direct them to plants that they use in local medicines.121 Over centuries, these farmers and herbal­ ists have identified, cultivated, bred, and protected the plant varieties.122 These informal innovations are not patentable, however, because they are not “new.55123 More obviously, a Kayapo farmer in Brazil and a Sakai herbalist in Indonesia have no practical means to patent their innovations. Permitting drug companies to patent company contributions, and the legal inability of the Third World innovators to patent their contributions, Boyle suggests, illustrates the power of the romantic author impulse in patent law.124 The chemical company’s scientists fit the paradigm of

117 See Shayana Kadidal, Note, Plants, Poverty, and Pharmaceutical Patents, 103 Y a le L. J. 223, 224 n.8 (1993). 118 See id, a t 223 n.3. 119 See Klaus Basselmann, Plants and Politics: The International Legal Regime Concerning Biotechnology and Biodiversity, 7 COLO. J. INT’L ENVT. L. & POL’Y 111, 117 (1996). 120 See Kadidal, supra n o te 118, a t 237-43. 121 See Shand, supra n o te 110, a t 10-11.

122 See id. 123 See id. 124 See Boyle, supra n o te 114, a t 1529.

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authorship. The farmers are everything that authors should not be: their contribution comes from a communi­ ty rather than an individual, tradition rather than an innovation, evolution rather than transformation. Guess w ho gets the intellectual property right?125 The Third World farmers and herbalists’ contribution is thus denigrated. The author versus source metaphor condemns them as merely an adjunct of the source, the indigenous plants.126 It further shapes a substantial portion of patent allocations for the industry.127 Recognition of this reality undermines the pharmaceutical companies’ moral claim to strict patent rules in every country. Furthermore, calling attention to the Third World’s unacknowl­ edged contribution to the development of pharmaceuticals also raises the possibility of alternative approaches to patent policy. 3.2.4.

Public Versus Private

The public versus private distinction pervades patent law.128 Inventions already in the public domain cannot be patented, because they fail the novelty test.127 At the same time, one of the motivating rationales of the patent system is to bring knowl­ edge from the private domain into the public by offering protections to private creators.130 Furthermore, one of the conceptual tensions in patent law is reflected in the determination of whether patents should be issued for inventions building on

125 Id. 124 See Shand, supra note 110, at 11. 127 See id. at 11 (“An estimated three-quarters of all plant-derived prescrip­ tion drugs were discovered as a result of their prior use in indigenous medicine. The annual world market value of these medicines is estimated at $43 billion 128 “[E]very dispute about property rights in information resolves itself into a dispute about whether the issue ‘is’ in the public or the private realm.” Boyle, supra note 114, at 1435. 122 See, e.g., Kevin Rhodes, Comment, The Federal Circuit's Patent Nonobviousness Standards: Theoretical Perspectives on Recent Doctrinal Changes, 85 NW. U. L. REV. 1051, 1051 (1991) (citing provisions of U.S. patent law, including 35 U.S.C. § 102 (1988)). 150 See J. Davidson Frame, National Commitment to Intellectual Property Protection: A n Empirical Investigation, 2 J.L. & TECH. 209, 210 (1987).

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information already in the public domain.131 What is defined as public and what is defined as private is thus an ultimate issue of patent law. It is in the pharmaceutical companies’ interest to define the biological resources of the Third World as “the common heritage of mankind.”132 That makes the resources public, and thus unpatentable. If the biological resources are not patentable, then Third World countries are basically unable to capture any of the wealth-producing benefits of their industrial development.133 The pharmaceutical industry, however, is far less generous in its understanding of the public domain w ith regard to industrial­ ized countries. For example, the U.S. government spends billions annually on biomedical research.134 Thus, government-funded research often provides the platform for industry to conduct its own research. Furthermore, government-funded research often leads to the discovery of new drugs which are exclusively licensed to private companies, or sometimes slightly modified and patented.135 A generous conception of the “public” nature of

131 For example, under a “labor theory of property rights” there is a strong incentive to accord patent protection to tne development of a useful invention from a publicly known but undeveloped source. See John R. Thomas, The Question Concerning Patent Law and Pioneer Inventions, 10 HIGH TECH. L. J. 35,78 (1995). 132 See id. at 228 n.35 (discussing the origins of this phrase). 133 See id. at 224 (“Little or none of [the profits] go to the countries where these naturally occurring compounds were originally found.”). Contrast this case to other sorts of resources, such as oil, where geographic location determines ownership. 134 The total federal allocation for research and development in fiscal year 1993 was $76 billion. See Chris Lewis, Public Assets, Private Profits: Federal R&D and Corporate Graft, MULTINATIONAL MONITOR, January/Febniary 1993, at 8. That amount represented 46% of the total national expenditure, public and private, on research and development. See id. 135 See id. The quintessential example of this point is AZT, one of the few drugs available to relieve conditions associated with the Human Immunodefi­ ciency Virus (“HIV”) and resulting Acquired Immune Deficiency Syndrome (“AIDS”). AZT was developed in federal government laboratories. See id. Burrougns Wellcome, the British company which eventually acquired exclusive control over the drug, contributed little money to the drug’s development. See id. The company only became interested after the National Cancer Institute had identified AZT as an effective agent in curbing the advance of AIDS among HIV-positive patients. See id. Consider also the remarkable findings of the Washington, D.C.-based Taxpayer Assets Project (“TAP”): For example, in a study presented in February 1993, TAP

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drugs developed with a large dose of government funding could undermine the pharmaceutical companies’ patent claims. There is no escaping the private-public distinction in patent and intellectual property law. Certainly the pharmaceutical industry understands, at least implicitly, how to manipulate the distinction to its advantage. Consciously focusing on how this distinction plays a key role in the allocation of intellectual property “rights” should highlight the alternatives available to policy makers in providing either more or fewer protections to different parties.

examined the federal government’s role in the development of all FDA approved cancer [fighting] drugs that were discovered since 1955, and found that 34 of the 37 cancer [fighting] drugs were developed with significant federal support. Earlier this year, TAP presented a study of all "priority” drugs approved by the FDA from 1987 to 1991. During this 5 year period the FDA issued 2,270 drug approvals, but most were for generic drugs or new combinations of existing compounds. Only 117 of the new drug approvals involved so called “New Molecular Entities” (NMEs) . . . drugs distinctly different in composition from drugs already on the market. Of these 117 NMEs, only 30 were judged by the FDA to be drugs that were used in the treatment of severe ilmesses or to represent a substantial gain in therapeutic value. Of these 30 “important” new drugs approved by the FDA, 15 benefited from significant funding; by the U.S. government. When one considers the country where the drug was discovered the government’s role is even more important. Seventeen of the “important” new drugs were discovered in the U.S. Of these drugs, 12 were developed with significant government funding — that is, 71% were developed with significant government funding. The U.S. government spends an enormous amount of money on health care research, and this investment has been very productive. On the basis of our research, we have concluded that whde the private sector’s R&D investments are also large, they tend to be directed at the lower risk ventures, and often are directed at the development of so called “me too” drugs, which do not represent significant improve­ ments in therapy, but rather are marginally different methods of treating illnesses which represent large markets, measured by the companies in the number or dollars they will receive from consumers. James P. Love, Pharmaceutical Drug Pricing: Hearings Before the Senate Committee on Government Affairs, FED. DOCUMENT CLEARING HOUSE, July 27, 1994, available in LEXIS, News Library, Arcnws File (citations omitted).

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GATT AND THE TRIPS AGREEMENT

The WTO and the Promise o f Forceful GATT Enforcement

In April 1994, the Uruguay Round GATT negotiations concluded.136 In December 1994, the U.S. Senate approved the new GATT, paving the way for the agreement to take effect in 1995.137 The Uruguay Round creates a new World Trade Organization to administer and enforce the GATT agreements.138 Under the WTO, GATT member countries will be severely constrained from violating the terms of any of the Uruguay Round agree­ ments, including the TRIPS Agreement.139 The WTO includes a powerful new dispute resolution machinery to resolve disputes between GATT members about a nation’s adherence to the terms of the Uruguay Round agree­ ments.140 Three-person dispute settlement panels, composed of trade experts141 who meet in secret,142 issue decisions on wheth­ er a country’s actions, laws, or regulations violate the terms of a Uruguay Round agreement.143 Decisions of the dispute settle­ ment panels can be appealed to a standing seven-member Appel­ late Body.144

136 See generally JEFFREY J. SCHOTT & JOHANNA W . BURMAN, THE

U r u g u a y R o u n d : A n A ssessm ent (1994) (detailing the long and complex process of negotiations involved in the Uruguay Round).

137 See H.R. 5110, 103d Cong. (1994) (enacted) (evidencing the final ratification of the Uruguay Round); see also Helene Cooper & John Harwood, Major Shifts in Trade are Ensured as GATT Wins Key Senate Vote> WALL ST. J., Dec. 2, 1994, at A12 (reporting on the Senate’s approval of GATT). 138 See Final Act para. 1. 139 See generally Reitz, supra note 41 (discussing the new enforcement procedures of the Uruguay Kound); see also Understanding on Rules and Procedures Governing the Settlement of Disputes [hereinafter Dispute Settlement Understanding], Apr. 15, 1994, Annex 2, LEGAL INSTRUMENTS — R e s u lts o f t h e U r u g u a y R o u n d vol. 31,331.L.M. 1226, app. l (specifically listing the TRIPS agreement as a “covered agreement” under the understanding). 140 See Dispute Settlement Understanding, art. I. 141 See id. art. 8, para. 1. 142 See id. art. 2. 143 See id. art. 3. 144 See id. art. 17 (referring to the Appellate Bod)); see also Reitz, supra note 41, at 582-84 (discussing the significance of the Appellate Body). Although the Appellate Body consists of seven members, only three members actually hear

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Dispute panel decisions, or Appellate Body decisions in the instance of an appealed case, are final unless every W TO Member nation — including the complaining country — agrees to reject the panel or Appellate Body’s recommendation.145 This “reverse consensus” requirement turns past GATT practice on its head by eliminating the de facto veto which member nations maintained under the old GATT dispute settlement process146 and gives every W TO signatory the unilateral power to force adoption of any panel or Appellate Body decision.147 If the losing party declines to revise its laws to make them consistent with the panel’s interpretation of WTO rules, then it must either agree to pay perpetual compensation negotiated with the prevailing party or face trade sanctions imposed by the prevailing party.148 Trade sanctions are to be o f an amount equivalent to the value of market access lost by the prevailing party due to the practices found WTO-illegal, but may be levied against any industrial sector.149 This complicated dispute settlement mechanism is likely to apply severe pressure on countries to alter patent or other laws found by a dispute settlement panel to be WTO-illegal. Potential sanctions are likely to be large, especially from the viewpoint of poor Third World nations. The threat of “cross-sectoral retalia­ tion” — the imposition of sanctions against a different economic sector than the one in which the WTO-illegal law exists150 — w ill be particularly coercive. It raises the possibility that domestic lobbies in unrelated industries would emerge to oppose laws or

any given appeal. See Dispute Settlement Understanding art. 17. 145 See id. art. 16, para. 4. This entire body is referred to as the Dispute Settlement Body (“DSB”). See id. 146 See G. Richard Shell, The Trade Stakeholders Model and Participation by Nonstate Parties in the World Trade Organization, 17 U. PA. J. INT’ L ECON. L. 359, 363-65 (1996) (discussing the “de facto5* veto power that the losing party enjoyed under the previous system). 147 See Reitz, supra note 41, at 585-86 (discussing this “ingenious*5 method of international enforcement). 148 See Dispute Settlement Understanding art. 22, para. 2. 149 See id. art. 22, para 4. 150 Cross-sectoral retaliation is expressly permitted in the Dispute Settlement Understanding. See id. art. 22, para. 3(c). For example, if the United States successfully challenges Thailand’s patent law, and Thailand refuses to repeal the law, the United States could levy sanctions not just on the Thai pharmaceutical industry, but on Thai textile imports. See id.

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regulations found WTO-illegal.151 These lobbies would repre­ sent industries that would feel the pain of WTO-authorized sanctions but not reap the benefits of the laws giving rise to sanctions.152 Finally, W TO decisions are likely to give countries the political legitimacy to impose more trade sanctions. Under the prior regime, even the United States, which in the last fifteen years has been rhetorically belligerent about imposing sanctions against violators of international trade rules, has been significantly constrained from doing so.153 This is part of the reason w hy U.S. trade negotiators sought to strengthen the GATT dispute settlement procedure and w hy they pointed to the final dispute settlement agreement as a victory.154 The bottom line: it is going to be far more difficult for countries — especially less powerful countries — to maintain domestic laws in contravention of GATT rules than it has been previously. 4.2.

Patent Policy Alternatives Under TRIPS

Backed by its strong enforcement mechanism, the new GATT unquestionably limits the patent policy options of national governments in the Third World and the industrialized world Sike.155 The final TRIPS Agreement ultimately did mandate adoption of U.S.-style patent laws — or so it seems at first glance.156 However, there are a number of exceptions and loopholes which leave countries with substantial leeway, though not as much as they had before the TRIPS Agreement, to 1M Some commentators have even speculated about the effects that private lobbies could have on the WTO process itself. See, e.g., Steve Charnovitz, Participation of Nongovernmental Organizations in the World Trade Organiza­ tion, 17 U. Pa. J. I n t ’l E con. L. 331 (1996). 152 For example, assume a WTO panel determined that French subsidies to grape growers were violations of GATT principles in a complaint brought by the United States. The United States, consistent with new GATT principles, could impose sanctions on cheese imports from France. Cheese exporters in France would obviously lobby against the grape growing subsidies since they receive no benefit but would be damaged by the sanctions. 153 See Overview o f the Results o f the Uruguay Round: Hearings Before the Senate Comm, on Commerce, Science, and Transp., 103d Cong. 9 (1995) (statement of Hon. Michael Kantor, United States Trade Representative). 154 See id. 155 Article 66 of the TRIPS agreement provides for a 10-year transition period for least developed countries. They will not have to comply with the terms of the agreement until 2005. See TRIPS Agreement art. 66. 156 See id.

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experiment with different patent schemes. Section 5 of the TRIPS Agreement covers patent rules in Section 5, the core of which is Article 27 and 28.157 Article 27 defines patentable subject matter.158 It provides, “[p]atents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application.”159 Article 27 also requires that patent rights be conferred “w ithout discrimination as to place of invention, field of technology, or whether the products are imported or locally produced.”160 Article 28, Paragraph 1, defines the rights conferred by a patent: A patent shall confer on its owner the following exclusive rights: (a) where the subject matter of a patent is a product, to prevent third parties not having his consent from the acts of: making, using, offering for sale, selling, or importing for these purposes that product; (b) where the subject matter of a patent is a process, to prevent third parties not having his consent from the act of using the process, and from the acts of: using, offering for sale, selling, or importing for these purpos­ es at least the product obtained directly by that pro-

O n their face, Articles 27 and 28 appear to preclude most of the alternatives to strict patent regimes implemented or considered by Third World countries in the last several decades. The

157 See id. arts. 27-28. 158 See id, art. 27. 159 Id. art. 27, para. 1. A footnote to the article establishes that “the terms ‘inventive step’ and ‘capable of industrial application’ may be deemed by a Member to be synonymous with the terms ‘non-obvious’ and ‘useful’ respectively.” Id. n.5. ,i0 Id art. 27. 161 Id art. 28, para. 1 (citation omitted). Article 29 establishes the reciprocal conditions on patent applicants: they must “disclose their invention in a manner sufficiently clear and complete for the invention to be carried out by a person skilled in the a r t . . . .” Id art. 29, para. 1.

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requirement that signatories grant patents for “any inventions . . . in all fields of technology” that are new, useful and non-obvious clearly encompasses pharmaceuticals, making the strategy of excluding pharmaceuticals from patent protection altogether GATT-illegal. The Agreement specifically requires coverage of both products and processes, precluding countries from establish­ ing regimes which recognize only one or the other. Article 33 requires that patent protection be afforded for twenty years from the date of filing, preventing countries from tinkering w ith the length of patents in order to calibrate the longitudinal strength of the m onopoly they confer.162 Article 28’s strict limitations on third parties’ use of patents in the absence of the patent holders’ consent seems to eliminate the possibility of compulsory licensing schemes.163 Article 27’s requirement that patent rights be enjoyable without regard to whether products are imported or locally produced precludes work-the-patent requirements.164 A comprehensive reading reveals, however, that special tax schemes — as long as they are nondiscriminatory between domestic and foreign producers — and price controls — again, so long as they are nondiscriminatory — are not precluded by the core elements of the Agreement.165 Despite apparent narrowing of the patent policy alternatives open to Third World countries, the TRIPS Agreement also contains a number of exceptions arguably reopening opportunities seemingly foreclosed by the provisions discussed above. There are three relevant exceptions explicitly stated in the TRIPS Agree-

162 See id. art. 33. 163 See id. art. 28. Indeed the terms are so all-inclusive that some generic drug makers have complained that it will prevent all development of production processes for pharmaceuticals going off patent until after the patent expires, effectively adding years to the length of time over which the patent holder will maintain a monopoly over the patented product. See Generic Drug Industry Underpressure on Several Fronts, PHARMACEUTICAL BUS. NEWS, June 26,1992, at 4 (Article 28 “‘will add about five years of effective patent life* (two years of product development and three years for regulatory approval)” according to Wayne Schnarr, research director of the Canadian Drug Manufac­ turers Association). 164 See supra section 2.2.5. (discussine work-the-patent ^ requirements). Obviously, a patent that is invalid unless developed or used in the domestic countries does not fulfill this non-discriminatory requirement. 165 See generally TRIPS Agreement.

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m ent,166 and one implied by the structure of the Agreement, which should serve to preserve pharmaceutical patent policy alternatives available to Third World policy makers. The first exception is contained in Article 27. It permits exclusion from patentability where necessary to protect public health and the environment.167 Article 30 provides the second exception, permitting members to provide limited exceptions to patent exclusivity, contingent upon a showing that the interests of the patent owner are not unreasonably infringed upon.168 Article 31 provides the third exception; it explicitly permits compulsory licensing subject to a long list of restrictions.169 A fourth exception, implicit in the Agreement’s allowance of price controls,170 effectively allows a government to impose price controls or nondiscriminatory taxes and condition their waiver on a patent holder’s willingness to license its product or process on a non-exclusive basis. 4.2.1.

The Public Health Protection Provision

As referenced above, the TRIPS agreement contains a public health exception: Members may exclude from patentability inventions, the prevention within their territory of the commercial exploitation of which is necessary to protect ordre public or morality, including to protect human, animal or plant life or health or to avoid serious prejudice to the environ­ ment, provided that such exclusion is not made merely because the exploitation is prohibited by domestic law.171 By its terms, the public health exception permits countries to

164 A fourth, very important exception is not relevant to the discussion here; The TRIPS agreement also provides that “diagnostic, therapeutic and surgical methods for treatment of animals and humans,” as well as “plants and animals other than microorganisms” may be excluded from patentability. Id. art. 27, para. 3. 167 See id. art. 27, para.2. 161 See id. art. 30. 169 See id. art. 31. 170 See id. art. 40, para.2. 171 Id. art. 27, para. 2.

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deny patents altogether where they have a legitimate health or environmental reason to prevent the commercial exploitation of an invention. Assuming the reason is legitimate, the exception will permit a country to deny a patent to a particular drug or to all drugs. However, the provision requires the denial of patentability to be linked to a denial of commercial exploitation of the inven­ tion .172 This requirement substantially limits the scope of the public health provision. It does not allow for either a no-patent system where private corporations are free to produce and sell generic drugs for profit or for compulsory licensing schemes. Both of these systems implicitly contemplate commercial exploita­ tion. N o r would it allow for shorter patent terms, since although they are designed to speed generic production of drugs and thus lower overall drug prices, they too are based on expectations of future commercial exploitation.173 Moreover, the public health provision offers no support to work-the-patent requirements, which are designed to encourage foreign investment and technology transfer. They are not necessarily directly targeted at public health goals. Still, the public health provision does offer at least one important alternative to Third World countries. Capitalizing on the provision, they could deny patentability for one or all drugs and produce and distribute them non-commercially through a state-owned marketing board, quasi-state entity, single non-profit manufacturer, or system of non-profit manufacturers. Especially for countries pursuing Essential Drugs programs,174 this govern-

172 See id. m A further consideration questions whether compulsory licensing schemes or shorter terms would qualify under the public health provision for yet another reason — the provision speaks of excluding from patentability, not conditioning patentability. An interesting argument could be formulated that the exclusion of patentability necessarily permits the conditioning of patentabil­ ity — a kind of hierarchy of powers argument. Such an argmnent would be irrelevant, however, in view of the preclusions presented by principles set forth in the main text above. 174 Essential Drugs programs rely on a government registry of a core group of essential drugs, which are made available in generic form at low prices. See, e.g.y John E.S. Parker, Pharmaceuticals and Third World Concerns: The Lall Report and the Otago Study, in THE INTERNATIONAL SUPPLY OF MEDICINES: Im p lic a tio n s o f u.S. R e g u l a t o r y R efo rm 135,139 (Robert B. Helms ed., 1980) (giving an example of the Indian essential drug policy). Mild Essential Drugs programs can co-exist with for-profit sales of drugs. More aggressive

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ment/non-profit option may be attractive. In order to adopt a policy of domestic, non-commercial exploitation, however, a GATT signatory nation would have to overcome another hurdle: the requirement that its actions be “necessary." In recent years, GATT dispute settlement panels have created a substantial jurisprudence interpreting GATT Article X X , which provides for general exceptions to GATT rules.175 In the W TO adjudicatory system, there is no formal system of stare decisis, but relevant precedent nonetheless exerts strong persuasive influence on current decisions.176 The interpretation o f the TRIPS Article 27 is likely to be shaped in significant part by the doctrines developed in prior GATT Article X X decisions, and analyzing the scope of the TRIPS public health provision requires a review of those decisions.177 The first critical Article X X decision involved a European Economic Community challenge to Section 337 of the U.S. Trade Act of 1930.178 That act established an optional procedure for U.S. patent holders to bring legal action against foreign persons or corporations allegedly exporting to the United States products

versions m ay involve a ban altogether o n sales o f non-listed drugs. See DIANNA M e l r o s e , B i t t e r P ills : M e d ic in e s a n d t h e T h ir d W o r l d P o o r 148 (1982). T h e listed drugs are often produced b y dom estic generic makers, but cou la be produced by governm ent o r non-profit entities. See id. at 153.

175 See General Agreement on Tariffs and Trade, Oct. 30,1947, 61 Stat. A11, T.I.A.S. 1700, 55 U.N.T.S. 194, art. XX(b) [hereinafter GATT], The provision states: Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade, nothing in this Agreement shall be construed to prevent the adoption or enforcement by any contracting party of measures: . . . ( b ) necessary to protect human, animal or plant life or health . . . . Id.; see also Reitz, supra note 41, at 569 n.63 (discussing a case between the United States and Canada concerning resolution of Article XX issues). 176 See Pierre Pescatore, Drafting and Analyzing Decisions on Dispute Settlement, in 1 PIERRE PESCATORE, ET AL., HANDBOOK OF WTO/GATT D isp u te SETTLEMENT pt. 2, at 6, 23 (6th ed. 1995) (discussing the proper role of stare decisis in past and future GATT decisions). 177 See id. 178 See Report of the Panel on United States: Section 337 of the Tariff Act of 1930, Nov. 7,1989, GATT B.I.S.D. (36th Supp.) at 345-46 (1990) [hereinafter Section 337 Panel Report].

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which infringed their patents.179 While a purely domestic dispute over patent infringement would be heard in a federal district court, the optional special procedure concerning alleged foreign infringers involved a quasi-judicial hearing before an administrative law judge of the U.S. International Trade Commis­ sion.180 This hearing varied in a variety of ways from federal district court proceedings.181 The then-EEC attacked the procedures as a discriminatory violation of GATT Article III,182 which requires equal national treatment of imported goods.183 The United States defended the parallel ITC proceedings on several grounds. O ne o f these was Article XX(d), permitting exceptions to GATT rules where “necessary to secure compliance with laws or regulations which are not inconsistent w ith the provisions of this Agreement, including . . . the protection of patents.”184 The United States argued that the parallel enforcement procedure was necessary to provide quick resolution and adequate sanctions against foreign infringers who could not be satisfactorily targeted through traditional civil remedies.185 The GATT dispute resolution panel rejected the U.S. argument with logic that has framed subsequent Article X X cases.186 First, the panel concluded that Article X X provided exceptions to the general GATT rules, and that panels should first analyze challenged practices for consisten­ cy w ith general GATT rules.187 Article X X analysis should ensue after a determination that certain conduct was a viola­ tion .188 This conclusion establishes that “Article XX(d) thus provides for a limited and conditional exception from obligations under other provisions.”189 In other words, Article X X should

175 See id. at 350. 180 See id. 181 See id. at 351. Domestic patent holders alleging foreign infringement maintained the option of filing tneir case in federal district court. See id. 182 See GATT Art. IE. 183 See Section 337 Panel Report, supra note 179, at 354. 184 GATT art. XX. 185 See Section 337 Panel Report, supra note 179, at 375. 186 See id. at 395. 187 See id. at 345 (“The Panel noted that Article XX is entitled ‘General Exceptions’ . . . .”). 188 See id. 189 Id. at 385.

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be treated as a disfavored provision, with a special burden placed on countries invoking it as a defense. Second, and building on the first point, the Panel placed great weight on the term “necessary” in Article XX: It was clear to the Panel that a contracting party cannot justify a measure inconsistent w ith another GATT provi­ sion as ‘necessary’ in terms of Article XX(d) if an alterna­ tive measure which it could reasonably be expected to em ploy and which is not inconsistent w ith other GATT provisions is available to it. By the same token, in cases where a measure consistent w ith other GATT provisions is not reasonably available, a contracting party is bound to use, among the measures reasonably available to it, that w hich entails the least degree of inconsistency w ith other GATT provisions.190 Henceforth, the “least-trade-restrictive” alternative test has been used. It is a very intrusive test in terms of impingement on national sovereignty, and one destined to become a major source of contention in the U.S. debate over the Uruguay Round agreements.191 It also seems clear that it is still part of G ATT/W TO jurisprudence.192

190 Id, at 392-93. The Panel sought to limit the sweep of its ruling by stating: The Panel wished to make it clear that this [the imposition of the least-trade-restrictive test] does not mean that a contracting party could be asked to change its substantive law or its desired level of enforce­ ment of that law, provided that such law and such level of enforce­ ment are the same for imported and domestically produced products. Id, at 393. Thus the disputed principle in the Section 337 case was that of nondiscrimination, not the substance of U.S. patent law. m The debate concerning GATT’s impacts on U.S. sovereignty was particularly potent when the U.S. Senate considered ratification of the Uruguay Round. See Leonard Bierman, et al., The General Agreement on Tariffs and Trade: World Tradefrom a Market Perspective, 17 U. Pa. J. INT’ L ECON. L. 821, 825 (1996). m On January 17, 1996, the first panel decision rendered under the new WTO machinery was produced. See Bhushan Bahree, WTO Panel Rules Against U,S, in Dispute Over Gasoline Normsy WALL ST. J., Jan. 18, 1996, at A ll. This panel decision also relied on the “least-trade-restrictive” standard. See Office of the United States Trade Representative, Panel Decision: Venezuela, Brazil,

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Third, and again reflecting its disfavor for Article X X based defenses, the Panel determined that it was not enough for a country to justify its entire challenged scheme as necessary.193 “In the view of the Panel, what has to be justified as ‘necessary’ under Article XX(d) is each of the inconsistencies with another GATT article found to e x is t. . . .”194 The Section 337 case was an Article XX(d) case, involving a measure purportedly necessary to enforce domestic laws. The interpretive conclusions of the Section 337 Panel arguably did not apply to Article XX(b) concerning the protection of human, animal or plant life and health. The possibility of applying distinct standards to Articles XX(d) and XX(b) was rejected, however, in 1990, exactly one year after the Section 337 case, in the Thai Tobacco case.195 The United States sought to challenge Thailand’s de facto ban on the importa­ tion of foreign tobacco.196 Its tobacco excise system authorized higher taxes on foreign-made cigarettes in the event they were imported.197 It also included various tobacco industry regula­ tions, including a ban on tobacco advertising, that the United States alleged to be discriminatory practices in violation of GATT’s general prohibition on quantitative restrictions of imports as well as the Agreement’s requirement of national treatment.198 The Panel determined that the Thai practices did violate the referenced GATT provisions, and then considered whether the Thai practices could be justified as public health measures under Article XX (b).199 M ost important in terms of establishing persuasive precedent, the Thai Tobacco Panel imported the Article XX(dJ analysis from the Section 337 case into Article XX(b) analysis. Citing and quoting the Section 337 case, the panel concluded that it “could

United States on the Rule Issued by the Environmental Protection Agency on 15 December 1993, Jan. 17, 1996, available in WESTLAW, GATT Database. 193 See Section 337 Panel Report, supra note 179, at 393. 194 Id. at 393 (emphasis added). 195 See Report of the Panel on Thailand: Restrictions on Importation of and Internal Taxes on Cigarettes, Nov. 7, 1990, GATT B.I.S.D. (37th Supp.) at 200 (1990) [hereinafter Thailand Tobacco Panel Report]. 196 See id. at 204. 197 See id. at 203. 198 See id. at 211-12. 199 See id. at 221-22.

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see no reason why under Article X X the meaning of the term ‘necessary’ under paragraph (d) should not be the same as in paragraph (b).”200 The Panel proceeded to adopt the Section 337 least-trade-restrictive-alternative test: The Panel concluded from the above that the import restrictions imposed by Thailand could be considered to be ‘necessary’ in terms of Article XX(b) only if there were no alternative measure consistent with the General Agree­ ment, or less inconsistent with it, which Thailand could reasonably be expected to employ to achieve its health policy objectives.201 The Panel rejected Thailand’s argument that its restriction o f foreign tobacco imports and its conferral of a tobacco marketing m onopoly on a state company were “necessary” to control the domestic supply of the public health menace of tobacco and to prevent the importation of foreign cigarettes which contained extra dangerous additives.202 Education campaigns, bans on advertising and labeling requirements could all serve those goals in a less restrictive manner, the Panel reasoned.203 It accepted Thailand’s claim that a nondiscriminatory ban on advertising did not violate national treatment requirements; and, the Panel concluded, even if it accepted the U.S. argument that the mainte­ nance of an advertising ban in the immediate aftermath of a prior state m onopoly on tobacco would discriminate against foreign producers whose brand names were relatively unknown, such discriminatory effect would be justified under Article XX(b).204 A subsequent panel again adopted a narrow reading of Article XX(b) in a 1991 decision condemning U.S. restrictions on imports of tuna not caught by dolphin-friendly methods.205 The Tuna-

200 Id. at 223. 201 Id. 202 See id. at 226. 205 See id. at 224. 204 See id. 205 See Report of the Panel on United States: Restrictions on Imports of Tuna, Aug. 16, 1991, GATT B.I.S.D. (39th Supp.) at 155 (1993) [hereinafter Tuna-Dolphin Panel Report]. Because of the political controversy generated by the Panel report — a controversy which threatened support for the North

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D olphin panel reiterated that Article X X permitted measures inconsistent with GATT only “to pursue overriding public policy goals to the extent that such inconsistencies were unavoid­ able.”206 The Panel reasoned that rather than imposing import restrictions, the United States should have sought to negotiate international cooperative arrangements.207 It also concluded that the nature of the U.S. import restriction — w hich pegged the permissible dolphin kill of foreign tuna exporters to the number actually killed by U.S. tuna fishers (allowing the foreign fishers a kill rate 1.25 times that of the U.S. fishers — was not consistent w ith an Article XX(b) effort to protect animal health.208 If the Article XX(b) decisions are to stand as precedent for Article 27, then a country seeking to invoke Article 27 would have to be prepared to argue that there was no means less inconsistent with the TRIPS Agreement available to achieve its public health goals of providing affordable essential drugs to its population. There should be little difficulty in demonstrating the public health importance of providing essential drugs at an affordable price. There is ample research showing the importance of access to affordable drugs, and the W H O is a strong endorser of Essential Drugs programs, a fact a WTO panel is likely to note and defer to.209 But a government would also have to show that no less inconsistent measure existing to accomplish this end. A challenging party may argue that government subsidies of drugs would accomplish the purpose, but given the potential cost of a subsidy program, such an alternative would not be reasonably available. Additionally, W TO panels cannot allow the subsidy argument to defeat public health programs, because it would swallow the entire public health provision of the TRIPS and the GATT. For example, in the Thai tobacco case, given the foreign company name recognition disadvantage, it would have been less inconsistent with GATT principles for Thailand not to ban advertising but to pay foreign tobacco companies not to advertise.

American Free Trade Agreement and the Uruguay Round — the GATT signatory parties did not adopt the report. See ial 206 Id. at 199. 207 See id. at 199-200. 208 See id. 209 Cf. Thai Tobacco Panel Report, supra note 196, at 216 (asking for and relying on opinions of WHO on health-related matters).

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N o one could reasonably propose such a standard. A more effective challenge to the non-commercial exploitation of drugs would be a claim that price controls would be less restrictive.210 Another viable approach is available for a country defending a non-commercial exploitation policy from a least-trade-restrictive challenge. Specifically, a country could argue that the Article X X jurisprudence, despite the similarity in language and purpose, does not apply to Article 27. The development of the least-traderestrictive test in the Article X X context was rooted in a concep­ tion of the Article as providing exceptions which were limited and conditional.211 In contrast, Article 27, paragraph 2, is not an exception; it is included in one of the core provisions of section 5, and it is part of the very definition of patentable subject matter.212 Thus the term “necessary” in Article 27 should not be given the intrusive interpretation it has been in Article X X GATT Panel decisions. A less stringent reading of “necessary” — something closer to important, and with little or no attention to available alternatives213 — is more appropriate in this con­ text.214 Under this more deferential standard, the defending country would make the same arguments, and they would be nearly sure-fire winners.

210 Indeed, if a patent holder were to agree to provide the desired drug at marginal cost or below, this option shoulcfsatisfy the government — at least insofar as it is motivated by legitimate public health concerns. Even while pursuing a noncommercial exploitation strategy, a government could hope to build up domestic technological know-how. But while this would be a worthy goal, it would not be cognizable as a legitimate one for Article 27 purposes. 211 See supra note 190 and accompanying text. 212 See TRIPS Agreement art. 27, para. 2. 213 O r perhaps alternatives should be considered, but so should the political, institution^ and fiscal impediments to adopting those alternatives — a set of factors GATT/WTO panels have heretofore refused to consider. 214 This word [necessary] must be considered in the connection in which it is used, as it is a word susceptible of various meanings. It may import absolute physical necessity or inevitability, or it may import that which is only convenient, useful, appropriate, suitable, proper, or conducive to the end sought. It is an adjective expressing degrees, and may express mere convenience or that which is indispensable or an absolute physical necessity. Bla c k ’s L a w D ic t io n a r y 1029 (6th ed. 1990).

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Article 30: Exceptions to Rights Conferred

TRIPS Article 30 potentially provides for very broad excep­ tions to the patent requirements of the Agreement: Members may provide limited exceptions to the exclusive rights conferred by a patent, provided that such exceptions do not unreasonably conflict w ith a normal exploitation of the patent and do not unreasonably prejudice the legitimate interests of the patent owner, taking account of the legitimate interests of third par­ ties.215 U nlike Article X X o f the GATT or Article 27, paragraph 2, of the TRIPS Agreement, Article 30 does not limit the purposes for which a country may make exceptions to the Agreement.216 Both public health purposes and a desire to promote local industry are legitimate Article 30 purposes. This would seem to authorize countries to undertake any of the range of patent policy options. However, although Article 30 does not condition exceptions on national purpose, it does impose conditions on the right to make exceptions to the overall Agreement.217 These conditions are logical, because there is no evidence that Article 30 was intended as an all-purpose opt-out from TRIPS patent rules. The Article specifies three limitations. First, exceptions must be “limited.”218 Second, the exceptions cannot “unreasonably conflict with a normal exploitation of the patent.”219 Third, the exception must not “unreasonably prejudice the legitimate interests of the patent owner.”220 Quite obviously, none of these limitations are self-defining. Whether they allow or preclude various patent policy alternatives will turn on WTO panel interpretations of their meaning. The

215 TRIPS Agreement art. 30. 216 See id. 217 See id. 218 See id. 215 Id. 220 Id.

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argument here is that these limitations should reasonably be interpreted to preserve a broad range of exceptions under Article 30, and hence a broad range of pharmaceutical patent policy alternatives for Third World nations. The first limitation on the Article 30 mandates that any exceptions must be limited.221 A strong case can be made that the meaning of “limited” is defined within the Article, by the subsequent “provided that such exceptions . . .” language.222 In other words, the subsequent, more precise conditions describe what “limited” means in this precise context. The counterinterpretation would hold that such a reading makes “limited” superfluous, that it is intended to have independent force. In support of this counterinterpretation, a country challenging a Third World patent law could argue that Article 30 explicitly provides for exceptions, and one of the teachings of the Article X X GATT Panel jurisprudence is that exceptions are to be interpreted narrowly so as to preserve the broad integrity of the core Agreement.223 This argument carries some weight, but is not decisive, because Article 30 does provide a potential internal definition of “limited,” while Article X X contains no such definition of “necessary.”224 The merits of these arguments appear about even. Assume that the challenging country wins on this point, and “limited” should be interpreted to mean something more than the subsequent conditions in Article 30. “Limited” is still a term that restricts scope, but to an indeterminate degree. It is not at all apparent what sort of principled, substantive content can be given to the term other than those of the subsequent conditions. If “limited” is to have independent meaning, it must be that the Article 30 exception is not meant to be used to defeat the TRIPS Agreement on patents altogether. And at this level, every patent policy option discussed in the paper survives, because they are “limited” to the case of pharmaceuticals. They do not contem­ plate restrictions on patents in other fields.225 The second Article 30 limitation, that a patent exception not

221 222 223 224 225

See id. Id. See supra, note 190 and accompanying text. Compare TRIPS Agreement art. 30, with GATT art. XX. This is not to argue that such restrictions might not be appropriate.

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unreasonably conflict w ith the owner’s normal exploitation of it,226 poses fewer problems for countries seeking alternative pharmaceutical patent policies. O nly a policy prohibiting a patent holder from exploiting its patent — such as the government/non­ profit non-commercial proposal discussed in the context of the public health provision — would potentially run afoul of this limitation. Even that proposal arguably would not “unreason­ ably” conflict with the patent owner’s rights, but there is no need to make such a case in view of the TRIPS-legality of such a policy under the public health provision. A ll of the other options discussed in this paper would allow the patent holder to exploit the patent to whatever extent desired. A nation challenging a Third World country’s patent policy could argue that “exploiting” a patent includes the right not to use it or license it at all. This argument, however, would run contrary to the comm on use of “exploitation” which means to make use of, or to work up.228 This argument would require claiming that normal exploitation of a patent includes purposeful non-exploitation of it. That interpretation is more than the language can bear, since the drafters could have written “does not unreasonably conflict w ith patent holder rights” in the place of the exploitation clause had they intended to convey such a meaning. Moreover, the very next clause speaks to the “legitimate interests of the patent owner,”229 which would make the exploi­ tation clause redundant were it to have the broad meaning required to include both exploitation and nonexploitation. The third limitation — to not unreasonably prejudice the legitimate interests of the owner230 — is really the crux of the matter. This is especially true from the viewpoint of elaborating TRIPS-legal pharmaceutical patent policy. Critically, this limitation is itself limited, by a requirement to take into account the legitimate interests of third parties.231 In other words, it calls for a balancing process. A valid policy must balance the interests of patent-holding pharmaceutical companies in industrial-

226 See TRIPS Agreement art. 30. 227 See supra section 4.2.1. 228 Black ’s Law D ictionary 579 (6th ed. 1990). 229 TRIPS Agreement art. 30. 230 See supra note 221 and accompanying text. 231 See supra note 216 and accompanying text.

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ized countries with the interests of Third World citizens and domestic pharmaceutical companies. There is a strong case to be made that, in view o f the pervasive government subsidies from which the industry benefits, the “legitimate interests” of the industrialized country pharmaceutical companies should be construed much more narrowly than the industry asserts.232 Third World countries seeking to invoke Article 30 do not need to rest their case on this argument alone. The equities of the balance lie heavily on the side of Third World consumers, who are overwhelmingly poor and unable to afford important drugs. Furthermore, unsanitary conditions and various conditions associated w ith poverty make Third World citizens more susceptible to illness than industrialized country consum­ ers.233 The balance is further tipped in favor of permitting the less restrictive patent policies by virtue of the fact that Article 30 arguably allows “prejudice” to the interests of the patent owner, just not “unreasonable prejudice.”234 Thus, Article 30 should permit some of the patent policy alternatives discussed in this paper, but it probably requires that they be carefully calibrated so as not to unreasonably or excessive­ ly infringe patent holder rights.235 In this regard, shortening the life of the patent for pharmaceuticals — as a means to promote the more rapid diffusion of lower-priced generics — seems to pass Article 30 muster, although exactly how much shorter patents could be made is unclear. A t some point, shortening would arguably cross the threshold into “unreasonably prejudice” territory. Compulsory licensing would also be permissible under the balancing test — again to promote the diffusion of more affordable drugs to a poor population — but may require a royalty system to limit the degree of infringement of patent owners’ interests. Work-the-patent requirements would be harder to justify

232 See supra note 135 and accompanying text. 2,5 The interests of Third World domestic producers probably count for little in the balance, since developing local industry is an only minimally “legitimate” third party interest in Uruguay Round terms, if it is legitimate at all. 234 See Trips Agreement art. 30. 235 The adverb here is “unreasonably,” not “unnecessarily,” which suggests a much less strict standard than the least-trade-restrictive interpretation of Article XX.

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under Article 30, since they do not directly advance the public health interest in lower drug prices, but they too may be permissible. An argument on behalf of work-the-patent require­ ments would rest on two grounds. First, that promoting technology transfer is a legitimate interest of a third party, namely the country beneficiary o f the transfer. Second, to the extent that work-the-patent requirements succeed at technology transfer and building up the domestic scientific base, they bring countries closer to developing their own independent research capacity. These research capacities could be directed to addressing local diseases for which the treatment, prevention, or cure does not hold out the prospect of sufficient profit to draw the interest of industrialized country pharmaceutical companies. That is, the argument would be that there is an indirect public health interest in work-the-patent requirements. Article 30 would not permit a no-patent system. Even if such a system could be justified under the “unreasonable prejudice” clause, Article 30 only allows for exceptions “to the exclusive rights conferred by a patent,”236 meaning the patent itself must initially be granted.237

4.2.3.

Article 31: Other Use Without Authorization of the Right Holder (Compulsory Licensing)

Article 31 specifically authorizes countries to undertake compulsory licensing schemes, contingent upon meeting a series of provisions.238 These conditions include:239 (a) authorization for compulsory licensing must be considered on the individual

236 TRIPS Agreement art. 30. 237 Note that this requirement does not affect the other alternatives discussed here. Compulsory licensing is clearly a limitation on patent exclusivity. For Article 30 purposes, so are work-the-patent and shorter terms provisions; work-the-patent provides for an exception to patent exclusivity where a patent holder does not use the patent as pan or a manufacturing process in the granting country, and “shorter patent terms” — at least if properly drafted — provide for an exception to patent exclusivity at the end of a patent term. m See TRIPS Agreement art. 31. The existence of specific authorization for compulsory licensing in Article 31 does not preclude a compulsory licensing program under Article 30. Article 31 explicitly does not displace Article 30, but creates alternatives to member countries in addition to those made available under Article 30. See TRIPS Agreement art. 31, n.7. 239 The lettering here tracks the lettering in Article 31.

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merits; (b) the licensee must have “made efforts to obtain authorization from the right holder on reasonable commercial terms and conditions and that such efforts have not been success­ ful w ithin a reasonable period of time;” (c) the scope and duration of the license can only be for specifically authorized purposes; (d) “such use shall be non-exclusive;” (e) the license must be nonassignable; (f) the use of the license must be predominantly for the supply of the domestic market; (g) the license must “be terminated if and when the circumstances which led to it cease to exist and are unlikely to recur”; (h) “the right holder shall be paid adequate remuneration in the circumstances of each case, taking into account the economic value of the authorization;” and (i) and 0 the compelling of the license and the amount of remuneration must be open to judicial review.2''0 Most of these provisions pose little problem for the operation of an efficient compulsory licensing scheme. Provision (a) would require a government agency to oversee the compulsory licensing scheme, even where it maintained a strong presumption that it would require licensing for m ost drugs. This may add unneces­ sary bureaucracy, but it would not essentially impede a compulso­ ry licensing program. It would provide the benefits of individual­ ized review, enabling the government to permit exclusive production by the patent holder for “orphan drugs” — those which treat illnesses that do not occur in significant enough numbers to merit drug company involvement in the absence of a right to charge especially high prices. Provision (b) should be cause only for minimal delay. The potential problem in provision (b) — determination of reasonable commercial terms — will be a consequence of the background understanding of adequate remuneration under provision 0 ) . It does not by itself pose any additional difficulties for a compulsory licensing program. Provisions (c), (d), and (e) should pose no particular difficulties in the pharmaceutical context. Similarly, provision (g) seems likely to have little restrictive effect on compulsory licensing schemes for pharmaceuticals. The circumstances giving rise to the compulsory scheme — poverty, high incidence of disease, etc. — are not likely to cease any tim e soon. A nd the judicial review required by provisions (i) and (j) should pose few problems, either.

2,0 See id.

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Provision (f), however, while not fatal to a well-run compulso­ ry licensing regime, creates substantial difficulties. Generic manufacturers can lower their marginal costs by expanding their demand pool, that is, by selling in other countries. A nd a rationally configured compulsory licensing scheme in many regions of the Third World might rely heavily on a comm on market approach, so that the countries of, for instance, East Africa would develop an integrated compulsory licensing and generic drug manufacturing and marketing approach. Provision (f)’s requirement that use be “predominantly” for domestic use seems to preclude the full elaboration of such an approach. The critical potential obstacle to adoption of a compulsory licensing program under Article 31 is provision (h), requiring adequate remuneration be paid to involuntary patent licensors. What constitutes adequate remuneration? Provision (h) says only that “the economic value of the authorization” must be taken into account. But there is no single economic value of an involuntary license. As a general matter, the license will be worth more to the involuntary grantor — w ho is thereby forced to sacrifice m onopoly profits — than it is to the nonexclusive grantee — w ho w ill only be able to earn competitive profits. The question then becomes: in the absence of any independent means to establish a level of adequacy, whose version of the economic value of the authorization should control the meaning of adequate remunera­ tion? The TRIPS text does not provide an answer, but logic suggests the answer must be the value to the grantee. Where the value is set at the grantor’s valuation, the patent holder would w illingly grant the license w ithout compulsion, and there would be no need for Article 31. In other words, defining adequate remuneration at the level of the involuntary grantor’s valuation would swallow up Article 31 altogether.241

4,2.4,

Price Controls and Compulsory Licensing

The TRIPS Agreement does not m ention price controls, which remain legal under the Uruguay Round agreements as long as they

241 I do not here consider what the value of the license is to the grantee, but it should be set at a level to allow the grantee reasonable profits. The royalty formula could be attached to the grantee's profit margin, or to gross sales.

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are administered in a non-discriminatory manner.242 In some cases, a government may find that price controls work well. But in many instances price controls are an unsatisfactory policy instrument, from the perspective of all players. Patent holders characterize price controls as severe and arbitrary, and sometimes more costly than compulsory licensing schemes.243 Further­ more, price controls are difficult for governments to administer, since they often require extensive investigation and negotiation w ith patent holders. Additionally, the inherent uncertainty of the enterprise is exacerbated because industry-provided data are somewhat suspect. Depending on implementation, price controls may be less beneficial to consumers, who, at least with some drugs, may find themselves paying higher prices than they would under an alternative scheme such as compulsory licensing. Furthermore, price controls do not benefit local, generic produc­ ers, w h o do not gain any enhanced right to or claim on multina­ tional pharmaceutical company patents. Given the industry-wide dislike of price controls, the system could be combined with a compulsory scheme to provide an independent TRIPS-legal basis for compulsory licensing. Pharma­ ceutical patent holders could be given a choice: accept price controls on the patented product or process, or agree to provide non-exclusive licenses to all domestic takers.244 In the context of an aggressively administered price control system, most companies would probably opt for the licensing alternative. This proposal would not have to meld itself to fit in the constraints of Article 31, because it would not constitute an allowance of use of the patent “without the authorization of the right holder.” Even within the framework of Article 31, the price-control-orlicensing option could address the most contestable issue in Article 31: determining the economic value of the authorization. In the context o f a price control scheme, the economic value of a patent would be substantially lower than it would be were the patent

242 Any discriminatory action is likely to be violative of general GATT principles of unequal treatment. See GATT art. XVII. 243 See, e.g., Robert T. Abbott, Written Testimony Before the House Committee on Science, Space and Technology, FED. NEWS SERVICE, Sept. 28, 1994, available in LEXIS, News Library, Arcnws File (using his company, Viagene, as an example). 244 See James Love, Patents Vs. People, MULTINATIONAL MONITOR, June 1994, at 22.

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holder permitted to charge unregulated, monopoly-profit-maximiz­ ing prices. Indeed, with an aggressively administered price control system, the economic value may be the same to both the licensor and the licensee. 5.

A P o t e n t ia l A l t e r n a t iv e

The central purpose of this Article is to argue that pharmaceu­ tical patent policy alternatives remain viable under the TRIPS Agreement. The existence of these alternatives, however, is of little importance if none of the alternatives are attractive. This section first assesses the advantages of the alternatives for Third World countries, considers and largely rejects the arguments against the efficacy of the alternatives, and then proposes, in capsule form, an alternative pharmaceutical patent policy approach for Third World countries.

The Benefits of Limiting the Patent Right The benefits of limiting the patent right accrue primarily to two Third World groups: pharmaceutical consumers and Third World generic manufacturers. The benefit to the consumer is lower prices, meaning more affordable health care. By whatever means generic production is prompted — no patents or compulsory licensing,245 or shorter patent terms246 — prices w ill fall. The evidence on this point is irrefutable. Schut and Van Bergeijk found that drug prices vary substantial­ ly across borders,247 and that direct price controls, bulk purchas­ ing, promotion of the use of generics and abolishing patents all

245 Obviously either option would bring generic competitors into the market almost immediately. 246 In contrast, shorter patent terms would spark generic competition sooner than longer terms would. 242 See Frederick T. Schut & Peter A.G. Van Bergeijk, International Price Discrimination: The Pharmaceutical Industry, 14 WORLD D ev . 1141,1147 (1986). Specifically, a 10% increase in per capita income corresponds to an 8% increase in average drug prices. See id. Importantly, however, they note, “Although drug prices in developing countries are often lower than in developed countries, the real costs of these products, relative to the purchasing power of the population, are considerably hieher (the real costs of drugs in Malawi are 12 times higher than in the Unitea States . . . Id.

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work to lower pharmaceutical prices.248 The important implica­ tion of their finding that “drug prices vary arbitrarily, depending on the existence and degree of success of a national drug policy,” they conclude, is that pharmaceutical companies will charge what the "market will bear.”249 There is a lot of room for play in pharmaceutical prices, and sound and effective national drug policies can provide Third World consumers w ith substantial savings.250 The empirical evidence in support of the price-reducing effects of the introduction of generics is overwhelming.251 Empirical studies reveal that, “[o]ver tim e patents are a major factor in sustaining high drug prices; the appearance of generic competition results in prices of these drugs being much closer to the marginal production costs than those of brand name companies.”252 In the United States, generic producers "enter the market quoting prices much lower than those of their branded competitors, and these prices also decline as the number of generic competitors increases, potentially falling to roughly seventeen percent of the branded producer’s pre-entry price.”253 In Canada, in 1983, when the country maintained a compulsory licensing system, "[t]he average price of compulsorily-licensed drugs sold by both the patent-holding and the compulsorily-licensed firms in Canada

248 See id. 249 See id. 250 See id.at 1148. 251 See id. (surveying theextent oftheevidence). 252 Id. (providing anecdotalevidence of generics selling at one-tenth the price of their brand name counterparts in the United States). 253 Richard E. Caves et al., Patent Expiration, Entry and Competition in the U.S. Pharmaceutical Industry, in BROOKINGS PAPERS ON ECONOMIC ACTIVITY: MICROECONOMICS 1,44-45 (Martin Neil Baily & Clifford Winston eds., 1991). The authors further note that u[t]he effect of additional generic competitors is also noticeably stronger on generic prices than on branded ones.” Id. at 45. Former patent holders are able to build on name recognition, consumer confidence and, importantly, relations with doctors to continue selling at a supracompetitive price to a substantial segment of the market. See id. at 46. For a detailed study of the issue of substitution of generics in the United States for brand name drugs (by state-funded medical providers), the potential savings from substitution, and the cultural and institutional barriers to substitution, see generally ALISON MASSON & ROBERT L. STEINER, FEDERAL T r a d e C o m m ’n G e n e r ic Su b s t it u t io n a n d P r e sc r ipt io n D r u g P rices -. E c o n o m ic E ffects o f St a t e D r u g P r o d u c t Se l e c t io n L aws (1985)

(publishing a report from the U.S. Bureau of Economics of the Federal Trade Commission on the effectiveness of substitution law).

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was approximately half the prices prevailing in the United States for the same drugs;” non-compulsorily licensed drugs in Canada cost an average of eighty percent of the U.S. price.254 In India, the adoption of price controls and a process-only patents trans­ formed Indian drug prices from among the highest in the world to among the lowest.255 And a no-patent system has driven down drug prices in Argentina as well.256 Indeed, industry representatives and consultants do not dispute the fact that generic producers drive down prices. Instead, their argument is that prices need to be maintained to enable drug manufacturers to recoup their investments.257 Limiting patent rights drives down prices because it facilitates entry of generic imitative products.258 Because the technological demands of producing an already patented product are substantial­ ly less than those of undertaking the research to create the patented product, less technologically sophisticated enterprises are

254 H.C. Eastman, The Protection o f Intellectual Property: Pharmaceutical Products in Canada, in MULTINATIONALS, GOVERNMENTS AND INTERNATION­ AL TECHNOLOGY T r a n s f e r 153, 164-65 (A.E. Safarian & Gilles Y. Bertin, eds., 1987). 255 See Weissman, supra note 85, at 10 (citing a report from B.K. Keayla, convener of the Indian National Working Group on Patent Laws). 256 See Love, supra note 245, at 22. In an advertising campaign in the United States in 1990, the Argentinean pharmaceutical manufacturers trade group highlighted the example of an anti-arthritis drug which sold in the United States for $169.84, but only $35.08 in Argentina. See Weissman, supra note 85, at 10. 257 See Clemente, supra note 109, at 128-29. Some observers argue that competition takes place among substitutable patented drugs. See Rapp and Rozek, supra note 98, at 90-96 (arguing that high costs associated with greater intellectual property protection for pharmaceuticals are often overstated because of incentives to find new uses for patented drugs and competition among these drugs); Parker, supra note 175, at 136 (suggesting that the high sales concentration m the pharmaceutical industry may often be accompanied by economic rivalry). To whatever extent this sort or competi­ tion does take place, however, it clearly does not have the pro-competitive effects of generics. If it did, patent holders would not care about generic competition, and prices would not fall so sharply with the introduction of generics. Moreover, to the extent that competition does take place among substitutable patented drugs, it is not entirely socially optimal. Much of the research money invested in substitute drugs could have been more profitably invested — from a social rather than private corporate viewpoint — in treatments for other ailments. 258 See Clemente, supra note 109, at 129.

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able to produce generics.259 This provides an opportunity for fledgling companies in Third World nations w ith sufficiently large domestic markets. For example, India, Argentina, and Turkey have all developed flourishing domestic pharmaceutical industries in the last three decades. These are arguably the result of policies of granting no pharmaceutical patents (Argentina and Turkey) or imposing significant limits on them (India).260 Indeed, it was through imitation that virtually every industrialized country built up its technological capacity.261 Although industry-sponsored scholars claim that all technologically advanced countries maintain strong patent laws, virtually every industrialized country adopted strong patent laws after developing their technological infrastruc­ ture,262 in significant part through copying strategies.263 Many of the most industrialized countries have only permitted patents on pharmaceuticals in the last couple of decades.264 If promoting a domestic pharmaceutical industry is a goal of Third World policy makers, then limitations on patent rights are sensible. But those outside of Third World countries hoping to promote the development of domestic pharmaceutical industries should take a clear-eyed approach. Dom estic industries are not a panacea for Third World ills. Based on his study of Turkey, Kirim concludes that domestic manufacturers engage in many of

259 See id. m260 See G e reffi, P h a r m a c e u t ic a l In d u str y , supra note 24, at 220-23 (discussing policies in Argentina); Arman S. Kirim, Reconsidering Patents and Economic Development: A Case Study o f the Turkish Pharmaceutical Industry, 13 WORLD D ev . 219,220 (1985) [hereinafter Kirim, Reconsidering Patents] (stating that in Turkey “[ajbolition of patents . . . was an important factor underlying the substantial growth of the locally-owned drug firms”); P.L. Narayana, Indian Pharmaceutical Industry: Problems & Prospects, MARGIN, Jan. 1984, at 39 (relating to India). 261 See Rapp & Rozek, supra note 98, at 79. 262 See id. 263 Furthermore, in the information age —when new innovations build on the foundation of earlier inventions to an ever greater extent — there is reason to believe that copying is more important than ever if less industrialized nations do not want to consign themselves to permanent have-not status. 264 Germany and France first granted patents for pharmaceuticals in 1967, the Nordic countries in 1968, Japan in 1976, Switzerland in 1978, and Italy in 1979. See Laudeline Auriol & Francois Pham, What Pattern in Patents?, OECD OBSERVER, Dec. 1992, at 15, available in LEXIS, News Library, Arcnws File.

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the same undesirable practices as their multinational counter­ parts.265 Most notably, Turkey experienced spurious product differentiation, as well as production and prom otion of drugs irrelevant to major causes of mortality in Turkey.266 N onethe­ less, domestic industries provide national benefits that multination­ als do not. Domestic companies are more likely to adapt and m odify technologies for local use than multinationals.267 They promote the development of the local technological infrastructure and favor generics.268 Furthermore, profits accumulated by domestic companies stay within the country, rather than flowing out and contributing to current account deficit problems.269 Finally, many Third World countries may desire to undertake a drug development policy geared toward meeting local needs that do not offer sufficient market incentives to attract the interest of multinationals. If a Third World country is going to rely on the private sector — rather than government entities — to market and perhaps do final stage development of the drugs, then it is likely to need a built-up domestic industry with which it can enter into

265 See Arman S. Kirim, Transnational Corporations and Local Capital: Comparative Conduct and Performance in the Turkish Pharmaceutical Industry, 14 WORLD Dev. 503, 516-17 (1986) [hereinafter Kirim, Transnational Corporations]. 266 See id. at 516. 267 See Gary Gereffi, The Global Pharmaceutical Industry and its Impact in Latin America, in PROFITS, PROGRESS AND POVERTY: CASE STUDIES OF Internatio nal Industries in La t in A merica 259, 277-78 (Richard S. Newfarmer ed., 1985) [hereinafter Gereffi, Global]. 268 As Gereffi observes: [M]any domestic private drug firms in the Third World contribute more to national goals of resource efficiency and equity than TNCs [transnational corporations] do. The motives underlying this socially desirable behavior are not altruistic, however. It just so happens that the self-interest of local firms and national development objectives often overlap. The tendency of local companies to reduce their reliance on foreign know-how because it compromises management control coincides with the Third World country’s interest in techno­ logical autonomy. And whereas domestic enterprises favor bulk drug and generic product manufacture because the absence of heavy promotion and established brand names makes competition witn TNCs easier, developing nations also prefer this strategy because it leads to increased vertical integration and lower drug prices, especially for essential items required by the poor. Id. at 295. 269 See id. at 277-78.

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formal or informal partnership.270 Even in the late stages of product development, multinationals are not likely to pursue what appears from their perspective as only a niche market burdened by various government controls.271

5.2.

The Costs of Limiting the Patent Right

Proponents of strict patent regimes contend strict regimes w ill benefit Third World nations.272 They assert that non-restrictive patent systems will inhibit foreign investment — and hence technology transfer — and dampen the development of an indigenous research and development capacity.273 As a preliminary matter, for some Third World countries, neither of these purported costs of limited patent rights may be a concern.274 For countries whose dominant or sole policy concern is with disseminating a core group of most important drugs at low prices — the “costs” of limiting the patent rights are not as significant.275 But even those countries which are concerned with attracting foreign investment and promoting local research and development should not be deterred from limiting patent rights. The claim that stronger patent protections fosters foreign investment is analytically suspect. In the context of pharmaceuticals, choosing the site for investments is based on factors w holly distinct from the patent protections afforded at the site. If Merck decides to set up research facilities in Switzerland, Switzerland's patent rules are

270 See Kirim, Reconsidering Patents, supra note 261, at 220. The existence of a domestic industry may be necessary but it is certainly not sufficient. Developing a local industry will not by itself automatically spark innovative research and development. See id. 271 Cf. A. Samuel Oddi, The International Patent System and Third World Development: Reality or Myth?, 83 DUKE LAW J. 831, 834-44 (1987) (stating that foreign corporations are the most prevalent beneficiaries of patents in developing countries as “very few inventions are made by nationals”). 272 See Rapp & Rozek, supra note 98, at 87-88 (noting that U.S. research and development expenditure abroad is predominately focused in Western Europe where intellectual property laws are adequate while falling in Latin American where the industry claims it is inadequate); see generally Mossinghoff, supra note 116 (describing the effect of the patent laws of foreign countries on American pharmaceutical research and development commitments). 273 See Rapp & Rozek, supra note 98, at 87-88. 274 See Parker, supra note 175, at 139. 275 See id.

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probably irrelevant. It plans to recoup its investment in the international and primarily the U.S. market. The empirical evidence does not support the claim that limiting patent protections will result in decreased foreign investment.276 In Turkey, "abolishing patents . . . has not adversely influenced the flow of direct foreign investment and the transfer of technology into the country.”277 In Brazil, which eliminated patent protec­ tion for pharmaceuticals in 1969 in an effort to break the grip of multinationals over the local industry, foreign investment in the industry rose nearly six times in the 1970s.278 The more important claim by proponents o f strict patent laws is that inadequate patent protection will impede local research and development, or multinational research and development designed to solve local problems.279 There is at least a grain of truth in this argument. It does seem likely that the promise of patent monopolies might induce some research which would not otherwise take place.280 However, this static analysis of the technological development process ignores the fact that Third World countries may not have the domestic capability to undertake that sort of research. That capability may depend in part on building up a domestic industry through pursuit of a nonrestrictive patent policy. Moreover, to the extent that strict patent protection is necessary to induce research, that protection still must come at the expense of the consumer and national interest in lower drug prices. There is no reason to believe that the twenty year exclusive terms mandated by the TRIPS Agree­ ment281 strikes the proper balance. To the extent there is a need for a balance, it calls for careful calibration by policy makers administering price controls, or setting the royalties in a compul­ sory licensing system, or determining the length of domestic

276 See Schut & Van Bergijk, supra note 248, at 1142. 277 Kirim, Reconsidering Patents, supra note 261, at 220. 278 See Gereffi, Global, supra note 268, at 289. 279 The literature supporting this contention is extensive. See, e.g., Parker, supra note 175, at 139; Rapp & Rozek, supra note 98, at 79. ^ 280 Note that this assumes the Third World companies are domestically oriented, and primarily not looking to export to industrialized countries with strict patent protections. If this assumption is incorrect, then local companies should receive sufficient inducement from patent protections in the industrial­ ized countries. 281 See TRIPS Agreement art. 33.

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patent protection. “Ideally,” concludes F.M. Scherer, perhaps the leading scholar of compulsory licensing, “we would like a flexible policy — one that can be ‘fine-tuned* to individual circumstances. Despite this caveat, I am persuaded that technical progress would not grind to a halt if a uniform policy of compulsory licensing at ‘reasonable royalties’ . . . were implemented.”282 Historical and recent empirical experience suggests Scherer’s claim is correct. It seems that proponents of strict patent policies have vastly exaggerated whatever merit their argument may have. After all, many industrialized countries developed pharmaceutical industries in the absence o f patent protection. Moreover, those Third World countries not adopting strict patent policies have proven more innovative than those who have.283 J. Davidson Frame, after conducting a global survey and regression analysis, finds that countries w ith a low commitment to supporting intellectual property laws (“LOWCOMM countries”) have, on average, notably larger scientific and technological capacities than other Third World countries.284 H e also finds that LOWCOMM countries patent more heavily in the United States than do other Third World countries.285 Frame concludes that “it becomes increasingly difficult to accept arguments by LOWCOMM countries that they are weak, helpless actors in the international system w ho need special protection”286 and that the LOWCOMM countries maintain a “double standard.”287 But he strangely misses the more notable implication of his findings: those countries with less restrictive patent protections have developed stronger domestic research capacities while at the same time becoming more innovative. There are unquestionably legitimate concerns about the degree of innovation in Third World countries. But the claim that low 282 F.M. S c h e re r, T h e E c o n o m ic E f f e c ts o f C o m p u lso ry P a t e n t L icen sin g 85 (Edwin J. Elton & Martin J. Gruber eds., 1977). 283 See J. Davidson Frame, National Commitment to Intellectual Property Protection: An Empirical Investigation, 2 J.L. & TECH. 209, 215 (1987). 284 See id. 285 See id, at 216. 286 Id. at 215. 267 See id. at 216-17 (“These countries have been identified by various sources as having the most flagrant disregard for intellectual property among the countries of the world, yet they are first among Third W orld countries to take advantage of intellectual property protection offered in the world’s largest market.”)

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levels o f research and development are caused by inadequate patent protection is dubious. What is missing to a greater or lesser degree in most Third World countries is a science and technology infrastructure — a national system of advanced education and research. A patent system sim ply cannot provide those things. - 6.

CONCLUSION: FORMULATING AN ALTERNATIVE

The primary concerns of a rational drug policy for Third World nations should be disseminating useful drugs as widely and cheaply as possible, and encouraging research and development of products to address local illnesses.288 These w ill often include tropical diseases that do not draw the attention of corporations from industrialized countries.289 As I have alluded earlier, I believe a critically important approach to the first of those goals is the adoption and implemen­ tation of an Essential Drugs program.290 But Essential Drugs programs relate only tangentially to patent policy, and are outside of the scope of this paper. W ithin the realm of patent policy, the best means to achieve the first goal — of providing drugs widely and cheaply — is to promote generic production. I believe compulsory licensing — in conjunction with price controls if necessary to pass TRIPS muster — is the most feasible means to promote generics. Compulsory licensing is a decentralized, anti-bureaucratic means to ensure the rapid development of generics once the system is legislated into place or otherwise adopted. It is structurally pro-competitive, and hence not easily susceptible to corruption, incompetence, or lack of resources. The development of the domestic industry as an outgrowth of a compulsory licensing system may aid in the creation of an indigenous research capacity and in promoting research on local illnesses. Historical experience shows, however, that developing

288 See Gereffi, supra note 187, at 276-77 (exploring the often inappropriate mix of pharmaceuticals offered in Third World nations). 289 See, e,g.y id. at 276 (pointing to India where the most prevalent diseases include malaria, dysentery, and tilariasis, but pharmaceutical sales focus on vitamins, cold medicines, and “health restorers^. 290 On the case for essential drugs programs, see generally MELROSE, supra note 175.

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a domestic industry w ill not accomplish these goals by itself. To achieve these ends, Third World nations should look to the example of the United States — not for its patent law, but for its biomedical infrastructure, which is crucially dependent on government funding.291 Collective action problems and other factors affecting corporate incentive, structure, and organization preclude private industry by itself from accomplishing what government funding can: development of an indigenous capacity in basic and early-phase applied research which creates break­ through advances and spins off into commercial applications. W ith very few exceptions, however, Third World nations do not have available funds easily diverted into biomedical research programs in national universities or laboratories. There are, however, at least two attractive options to generate these monies. First, a percentage of royalty payments to patent licensors could go to a national biomedical fund.292 Second, a national tax could be placed on all drug sales, or, preferably, on all nonessential drug sales, w ith the resulting revenue also directed to the national biomedical fund. This collection of proposals would be: non-discriminatory in GATT terms; compatible w ith the TRIPS Agreement; an effective m ethod of attending to the pharmaceutical-related public health needs o f the poor segments of the population; and an effective means to overcome the spurious tradeoff between fair prices and research posited by proponents of strict patent policies. The key to implementing reforms of this sort is conceptualiz­ ing and promoting them as legitimate and valid policy choices. Once they have crossed the threshold of legitimacy in practical, political, economic, legal, and metaphoric terms, they can be considered on their merits. This w ill provide the best ultimate chance of popular acceptance and approval, and, ultimately, implementation.

2,1 This portion of this Article’s proposal elaborates on suggestions made by James Love. See Love, supra note 245, at 24. 292 This can be conceived of as an amount separate from the royalty, a tax on the royalty or a portion of the royalty — all three are essentially the same.

[13] Harmonization and the Goals of Copyright: Property Rights or Cultural Progress?

Kenneth D. Crews*

Introduction A leading force shaping United States copyright law in recent decades has been the desire to conform U.S. law to the laws o f other countries where many American companies and individuals in the copyright industries frequently pursue business.1 Those countries are often in Western Europe, where U.S. publishers, film producers, software developers, and others regularly make sales. One may look to trends and developments in other countries to see the future o f U.S. copyright. The “harmonization” o f laws has brought the promise o f predictability and ease o f conducting business across national borders.2

* Kenneth D. Crews (B. A., Northwestern University; J.D., Washington University; Ph. D., University of California, Los Angeles) is an Associate Professor in the Indiana University School of Law—Indianapolis and the IU School of Library and Information Science. He is also Associate Dean ofthe Faculties for Copyright Management. Email address: [email protected]. Copyright 1998, Kenneth D. Crews. The author would like to thank his colleague at Indiana University, Professor Fred Cate, for inviting him to join the roundtable on “Sovereignty and the Globalization of Intellectual Property.” He is especially grateful to the other participants who commented on this paper and gave many valuable insights, including Jerome Reichman of Vanderbilt University, Trotter Hardy of the College of William and Mary, Keith Aoki of the University of Oregon, and Marshall Leaffer of Indiana University. Bringing this paper to its final, published form has required yet other important support. Becky Parman, assistant in the IU Copyright Management Center, deployed her word-processing skills to produce the early drafts, and Dwayne Buttler, one of the author’s law students who now works in the Center, read the manuscript while in progress and provided important comments. Jennifer Garrett and the other editors of this Journal exhibited endless patience and care as they brought this work to publication. Much of the labor of research, however, was greatly improved and expedited by the enthusiastic and tireless contributions of a graduate student in the IU School of Library and Information Science, Ms. Noemi Rivera-Morales. Her contributions strengthened the paper throughout and allowed the author to meet the generously extended deadlines for completion. 1. William Belanger, U.S. Compliance with the Berne Convention, 3 G eo . M aso n L. R e v . 373, 373 (1995) (noting that changes in global trade have led to international protections for intellectual property).

2. See, e.g., Ysolde Gendreau, Copyright Harmonization in the European Union and in North America, 20 C o lu m .-V L A J.L. & A r t s 37 (1995); David Nimmer, Nation, Duration, Violation, Harmonization: An International Copyright Proposalfor the United States, 55 L a w & C o n te m p . P r o b s . 2, Spring 1992, at 211. Harmonization has also been important in an era of multinational computer networks and instant communication and business transactions. Neil Weinstock Netanel, Asserting Copyright ’s Democratic Principles in the Global Arena, 51 V a n d . L. R ev . 217, 312-13 (1998).

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However, this harmonization also has brought distinct change to U.S. law in ways contrary to the fundamental purposes o f copyright law and its social objectives. The influence o f harmonization in reshaping U.S. copyright law has been evident for decades. Beginning with the Copyright Act o f 19763and continuing through a series o f amending statutes, several fundamental changes in the law result directly from the press for harmonization.4 This transition is often manifest in compliance with multinational treaties.5 For example, the United States joined the Bem e Convention for the Protection o f Literary and Artistic Works6in 1989, which mandated several changes.7 An unwillingness to adopt those changes was one major reason for the United States’s long delay in becoming a signatory to that treaty.8 Congress anticipated that the United States eventually would join the treaty and began to make some o f the required changes with the passage o f the Copyright Act o f 1976.9 Congress took additional and theoretically “final” steps toward treaty compliance with amendments to the 1976 Act in 1988 and 1990. 10 Yet, pressure for additional change continues. Some member countries have argued that the United States has not fully conformed to the requirements o f the Beme Convention, and in the meantime, more recent treaties have compelled further restructuring o f U.S.

3. Copyright Act of 1976, Pub. L. No. 94-553, 90 Stat. 2541. 4. Although the actual statutory changes of importance in this Article began with the Copyright Act of 1976, international developments had been deployed long before to argue for revisions in U.S. law. See, e.g., James J. Guinan, Jr., Duration o f Copyright, Study No. 30, Copyright Law Revision, Sen. Comm, on the Judiciary, 86 th Cong. (1961), at 62-70 (examining efforts in Congress, beginning in 1922, to revise U.S. law to conform with requirements of the Beme Convention). 5. See, e.g., World Intellectual Property Organization Copyright Treaty, Dec. 20,1996,361.L.M. 65 (1997) [hereinafter WIPO Copyright Treaty]; World Intellectual Property Organization Performances and Phonograms Treaty, Dec. 20, 1996, 36 I.L.M. 76 (1997) [hereineafter WIPO Performances and Phonograms Treaty]. For a general discussion of the WIPO Performances and Phonograms Treaty, see Rebecca F. Marin, The WIPO Performances and Phonograms Treaty: Will the U.S. Whistle a New Tune? 44 J. C o p y r i g h t Soc’y U.S.A. 157 (1997). 6 . Beme Convention for the Protection of Literary and Artistic Works, Sept. 9,1886, revised Paris, July 24, 1971, 25 U.S.T. 1341, 828 U.N.T.S. 221 [hereinafter Beme Convention]. The Beme Convention is a multinational treaty, with 130 signatory countries as of May 1998. See U.S. Copyright Office, I n t e r n a t i o n a l C o p y r i g h t R e l a t i o n s o f t h e U n ite d S t a t e s , Circular 38a (1998). It fundamentally provides for mutual protection of copyrighted works in each country and sets substantive standards that the laws of each country must meet. 7. Berne Convention Implementation Act of 1988, Pub. L. No. 100-568, 102 Stat. 2853. 8 . Belanger, supra note 1, at 375. 9. See supra text accompanying notes 3-4. 10. See Berne Convention Implementation Act of 1988, Pub. L. No. 100-568, 102 Stat. 2853. See also Visual Artists Rights Act of 1990, Pub. L. No. 101-650, 104 Stat. 5089.

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copyright law.11

I. “Harmonization” and the Revision of U.S. Law Numerous examples o f change in U.S. law are attributable to harmonization. The pressure for international conformity has altered the means for acquiring copyright, has restructured the term o f copyright duration, and has brought new protection under U.S. law where no legal rights previously existed. The process o f defining the conditions o f harmonization also has generated some awkward results. New forms o f protection sometimes extend only to certain works and apply only in narrow and ill-defined contexts. The quest for international harmonization has resulted in greater protection under U.S. law for foreign works than for domestic works. The transition from previous law to “harmonized” law has generated clumsy juxtapositions o f legal doctrines, reflecting a collision o f cultural and economic objectives that underlie copyright. Most o f all, the drive toward greater harmonization has produced copyright law that simply drifts from its constitutional purposes, often generating results that are more complicated and at times divergent from the ideal o f an international standard.12 A. Restructured Term o f Copyright Protection With the passage o f the 1976 Act, Congress altered the term o f protection for copyrighted works from a term o f twenty-eight years, renewable for twentyeight additional years,13 to a term o f life o f the author, plus fifty years.14 Statistically, the “life-plus-fifty” term was not significantly longer than the prescribed term o f seventy-five years under the previous law.15 Thus, the revision in 1976 did not greatly alter the average length o f a copyright’s

11. A principal treaty leading to most recent pressure for statutory change is the WIPO Copyright Treaty. See WIPO Copyright Treaty, supra note 5. For a discussion of some of the Treaty’s implications, see infra text accompanying notes 74-77. 12. Belanger, supra note 1, at 390 (arguing that the expanded scope of rights required under the Berne Convention exceeds “that necessary to promote the public dissemination of private works”). 13. Copyright Act of 1909, 17 U.S.C. § 24 (1976) (current version at 17 U.S.C. § 302(a) (1998)). 14. Copyright Act of 1976,17 U.S.C. § 302(a) (1998). More recently, Congress extended that protection to the life of the author, plus seventy years. For a discussion of that development, see infra notes 78-82 and accompanying text. 15. James J. Guinan, Jr., Duration o f Copyright, Study No. 30, Copyright Law Revision, Sen. Comm, on the Judiciary, 86 th Cong. (1961), at 76 (referring to a 1930 study that protection for “life-plus-fifty” would result in an average term of protection of between 76 and 86 years).

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duration. The restructuring o f the term was, however, a direct result o f the Bem e Convention that the United States was preparing to join in 1976.16 More importantly, the 1976 law brought a new term o f copyright that would assure protection for the author’s life, as well as for the subsequent generation. Under the previous Copyright Act o f 1909, protection in the United States had been for an initial term o f twenty-eight years plus a renewal for twenty-eight, not forty-seven, additional years.17 In 1962, Congress began an incremental process o f “ad interim” protection, eventually extending copyright for existing works to a term o f twenty-eight plus forty-seven years.18 Congress specifically instituted that change to create a term o f protection roughly equivalent to the number o f years that one would have under a “life-plus-fifty” system. The relative merit o f basing copyright duration on a defined, albeit unrenewable, term versus a term determined by an author’s life, is a policy question open to continued debate.19 Arguments for a term based on the author’s life clearly have had the greatest influence on copyright laws around the world. In making the transition away from a fixed term, the United States generally applied the “life-plus-fifty” rule only to works coming into existence on or after January 1,1978, and retained the fixed term for most other existing copyrights.20 Consequently, pre-1978 publications are generally protected for a maximum o f seventy-five years; later works are protected for life-plus-fifty .21 Congress was not prepared to alter fundamentally the duration o f existing copyrights.22 As a result, U.S. copyright law today embodies both systems for

16. In particular, the 1976 Act added new §§ 302-304 related to the term of protection. Copyright Act of 1976, Pub. L. No. 94-553, 90 Stat. 2541. 17. Copyright Act of 1909, 17 U.S.C. § 24 (1946). 18. The first step in this process was a 1962 enactment that extended existing copyrights until the end of 1965. Congress continued to renew those copyrights every 1 or 2 years. Until enactment of the Copyright Act of 1976. See, e.g., Pub. L. No. 87-668, 76 Stat. 555 (1962). 19. Author Samuel Clemens made an impassioned plea for copyright that should last at least for the author’s life and some ensuing years. He testified before Congress in 1906 about the agony of living long enough to see some of his early works lapse into the public domain and of the desire to provide for his offspring. See Margolit Fox, The Rights o f Writers as a Twain Obsession in a Rediscovered Manuscript; Wisdom Seeker and Statesman Spar, N.Y. Tim es, Feb. 16, 1998, at El. 20. Copyright Act of 1976, 17 U.S.C. § 304 (1994). Although U.S. law was revised in 1976, the new law did not take effect until January 1,1978. Hence, that date is pivotal in reference to significant changes in copyright standards. Pub. L. No. 94-553, § 102, 90 Stat. 2541, 2598-99 (1976). 21. This statement can only be made generally. Consistent with the Beme Convention, a fixed term of protection applies to works made for hire. In the United States, the term of protection is either 95 years from the date of publication or 120 years from creation, whichever occurs first. Copyright Term Extension Act, Pub. L. N o. 105-298, § 102(b), 112 Stat. 2827 (1998) (amending 17 U.S.C. § 302(c) (1994)). 22. Restructuring existing copyrights by converting them from a fixed term to a term based on the author’s life could in many instances have disruptive effects on existing agreements for the exploitation of the works.

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measuring the term o f copyright protection. The effort to eliminate confusion by establishing an international standard instead has complicated the standard even further in the United States. To calculate the length o f a copyright in the United States, one must first determine whether the work was created before or after January 1, 1978, a potentially difficult task.23 Furthermore, the revision o f U.S. copyright in 1976 restructured the term o f protection for existing unpublished works.24 The 1976 Act preempted the common-law copyright that previously had given unpublished works perpetual copyright protection as long as they remained unpublished. The pre-1978 protection o f up to seventy-five years applied to the work only upon its publication. Congress, in 1976, replaced the common-law rule with protection for unpublished works based on the life o f the author, plus fifty years. Thus, unpublished works created before 1978 are protected for a term dependent on the author’s life, while works published before 1978 are under copyright for the maximum fixed term o f seventy-five years. Determining the duration o f copyright thus requires identifying whether the work ever has been published.25 The quest for copyright information depends on an increasing array o f facts,

For example, in the mid-1970s a purchaser of a copyright may have forecast investments in the work based on an expectation of at least 75 years of protection. A conversion to a term based on the author’s life could shorten the duration, if the author should die shortly after creating the work. Similarly, the author may have negotiated a price for the copyright based on an expectation of 75 years of rights, but if the author lives longer than 25 years, the author may have underestimated the price. On the other hand, Congress has extended the term of protection on various occasions, notably after 1962 when duration was effectively extended from 56 to 75 years. See supra note 18. To adjust for that windfall of continued protection, Congress gave to the original copyright owner, or heirs, a right to terminate the transfer of the copyright. Thus, an early transfer of the copyright based on an assumption of 56 years of protection could still be limited to last only 56 years. Copyright Act of 1976, 17 U.S.C. § 304(c) (1994). Congress could possibly have alleviated some ofthe concerns about converting the duration of the existing copyright by providing a similar termination right and a minimum term of 75 years for existing copyrights. A second type of conflict with restructuring the duration of existing copyrights is a constitutional restriction. The Fifth Amendment to the U.S. Constitution stipulates: “nor shall private property be taken for public use, without just compensation.” U.S. C o n s t, amend. V. Any redefinition of copyright’s protection that could result in a shortening of existing duration could be construed as a violation of the “takings clause” of the Fifth Amendment. Again, assurance of at least 75 years for pre-1978 works may have avoided that pitfall. 23. U.S. C o p y r ig h t O ffic e , How t o I n v e s t i g a t e t h e C o p y r ig h t S t a t u s o f a W o r k , Circular 22, at 7 (1995). 24. See Copyright Act of 1976, 17 U.S.C. § 303(a) (1994). 25. It is actually even more complex than this brief summary suggests. In the case of pre-1978 unpublished works, for example, protection continues through December 31,2002, regardless ofthe date ofthe author’s death. Further, if the work is published before December 31,2002, copyright continues for at least an additional 45 years through December 31, 2047. Copyright Term Extension Act, Pub. L. No. 105-298, § 102(c), 112 Stat. 2827 (1998) (amending 17 U.S.C. § 303(a) (1994)).

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many o f which are difficult or impossible to isolate. Those facts may include the place o f creation o f the work,26 the date o f creation,27 the date o f publication,28 whether it is a work made for hire,29 and the date o f the author’s death.30 One must also determine whether an apparently unpublished document in fact has been published at any time and in any form.31 Discovering those basic facts can require extensive research.32 The restructured term o f copyright protection is an essential part o f the harmonization o f copyright, and it is designed to make the law consistent and more predictable. But the restructured term has not meshed well with U. S. law, leaving the duration o f copyright protection under U.S. law distinctly “unharmonized” and vastly more complex. The complexity o f a dual system o f duration may continue under existing law as long as copyrights vested before 1978 exist. Since most o f those copyrights previously lasted for seventy-five years, the dual system was extended to last until 2053, seventy-five years after 1978.33 This Article will later examine the recent successful effort to extend copyright by twenty years.34 Because the extension has become law, the “temporary” transition will now last until at least 2073.

26. If the work originated in a country that is not a party to the Beme Convention or another treaty, it may have no copyright protection in other countries. See Copyright Act of 1976, 17 U.S.C. § 104 (1994). 27. As already analyzed, the term of protection under U.S. law differs, depending on whether the work was created before or after January 1, 1978. See supra text accompanying notes 21-22. 28. Underpre-1978 law, the fixed term ofprotection began only upon publication. Further, ifaworkwas created before 1978, but published after the effective date of the new law, the work may receive the additional forty-five years of protection. See Copyright Term Extension Act, Pub. L. No. 105-298, § 102(c), 112 Stat. 2827 (1998) (amending 17 U.S.C. § 303(a) (1994)). 29. A “work made for hire” is, in general, a work created by an employee within the scope of employment. Copyright Act of 1976,17 U.S.C. § 101 (1994). In that event, the copyright belongs to the employer, and the term of protection is either ninety-five years from the date of publication or 120 years from the date of creation, whichever occurs first. CopyrightTerm Extension Act, Pub. L. No. 105-298, § 102(b), 112 Stat. 2827 (1998) (amending 17 U.S.C. § 302(c) (1994)). Determining whether a work is one made for hire clearly provides for a term of protection that breaks from the general contemporary rule of “life-plus-fifty,” or “life-plus-seventy” under the newly extended term. 30. If a copyright lasts for a period of years following the author’s death, the author’s basic obituary information becomes crucial. 31. For example, a researcher has possession in 1999 of a manuscript letter by an author who died in 1890. The copyright may not have expired, because the rule of life-plus-seventy for such works does not take effect until 2003. On the other hand, if the work had been properly published in 1900, even if the researcher is not aware of that publication, the copyright expired at the latest in 1995. Another possibility is that the heirs published the letter in 1990. In that event, the copyright lasts until at least2048. Researching these possibilities for publication is crucial for the scholar who may want to use that letter in a book or other work. 32. See U.S. C o p y r ig h t O ffic e , supra note 23. 33. See Tung Tin, Reviving Fallen Copyrights: A Constitutional Analysis o f Section 514 o f the Uruguay Round Agreements Act of 1994, 17 L o y . L.A. E n t. L.J. 383, 383 (1997). 34. See infra text accompanying notes 78-82.

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B. Lim ited Requirem ent o f Copyright Formalities The requirement o f executing certain formalities in order to secure protection, at least for published works, had been a long-standing fixture o f U.S. copyright law before 1978. Under pre-1978 law, those formalities were the inclusion o f a copyright notice on published works and registration o f the work with the U.S. Copyright Office.35 These requirements were antithetical to the standards o f the Berne Convention.36 With passage o f the 1976 Act, Congress began phasing out the notice and registration requirements,37 ultimately eliminating them as requirements for copyright protection in 1989 when the United States joined the Berne Convention.38 Congress, however, did not eliminate entirely the benefits o f formalities.39 Registration is often required before filing a copyright infringement lawsuit, although that registration can occur long after the work is created or even published; copyright protection still vests automatically.40 As a practical matter, registration is necessary for copyright owners because published works must still be deposited with the Library o f Congress,41 and the process o f depositing the work is little different from formal registration. If the copyright owner goes to the trouble o f depositing the work, he is advised to register the work at the same time. Moreover, registration prior to an infringement provides the copyright owner with significant financial remedies in a successful infringement action.42 The copyright owner can ask the court for “statutory damages” in lieu o f actual damages,43 and the copyright owner may, if successful, obtain attorneys’ fees from the defendant.44 In many cases, the inability to secure statutory damages and reimbursement o f attorneys’ fees means that a copyright infringement action is economically impossible to

35. Copyright Act of 1909, 17 U.S.C. §§ 9-10 (1946). The 1909 Copyright Act did not specifically require registration of published works, but the copyright owner did need to deposit two copies of the work with the Library of Congress at the time of publication and file a renewal registration 28 years later. For all practical purposes, these requirements made registration an expected step atthe time of publication. See Nimmer, supra note 2, at 219 n.54. 36. See M arshall Leaffer , U nderstanding C opyright Law , 380-81 (2d ed. 1995). 37. See Copyright Act of 1976, Pub. L. No. 94-553, 90 Stat. 2541, 2576-83. 38. See Berne Convention, supra note 7. 39. Belanger, supra note 1, at 394-95 (arguing that continued requirement of formalities for certain remedies nevertheless complies with the Berne Convention). 40. Copyright Act of 1976, 17 U.S.C. § 411(a) (1994). 41. Id. § 4 0 7 . 42. Id: § 412. 43. Id § 504. 44. Id § 505.

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prosecute.45 Some critics object that the United States has not fully complied with the treaty46 because it has made the formalities o f notice and registration a precondition to the practical ability to enforce a copyright.47 C. Restoration o f Foreign Copyrights While the United States took the most recent step to eliminate the notice and registration formalities in 1989,48 many other countries long had been signatories to Bem e and had dropped formalities decades before.49 Consequently, for example, a French author had not been required to comply with formalities to obtain protection in France and in many other countries that already had eliminated the prerequisites. However, once that work had been exported to the United States, the work entered the public domain in the United States if it lacked a copyright notice and perhaps registration.50 The works o f many unsuspecting foreign authors entered the public domain during the

45. A good example of the importance of recovering attorney fees is Basic Books, Inc. v. Kinko ’s Graphics Corp., 758 F.Supp. 1522 (S.D.N.Y. 1991). The court held that the commercial photocopy shop infringed the copyrights held by book publishers when it photocopied and sold “course packs” comprising chapters from various books. Basic Books, Inc. v. Kinko’s Graphics Corp., 1991 U.S. Dist. LEXIS 19930 (S.D.N.Y. Oct. 16, 1991). The court awarded the publishers statutory damages in the amount of $510,000, and Kinko’s was required to reimburse the publishers’ attorney fees in the amount of $1,365,000. Id. Clearly attorney fees can vastly outstrip damages, and the ability to recover them can determine the feasibility of legal action. In 1994, the U.S. Supreme Court ruled that either a plaintiff or a defendant may be a “prevailing party” in an infringement lawsuit and thus allowed under the Copyright Act of 1976, 17 U.S.C. § 505 (1994), to request an award of attorney fees. Fogerty v. Fantasy Music, 510 U.S. 517,534 (1994). Timely registration, however, is a prerequisite to the ability of the copyright owner, not the defendant, to receive this remedy. Copyright Act of 1976, 17 U.S.C. § 412 (1994). 46. For critical examinations of current formality requirements under U.S. law, see Irwin Karp, A Future Without Formalities, 13 C a r d o z o A r t s & E n t. L.J. 521 (1995); Shira Perlmutter, Freeing Copyrightfrom Formalities, 13 C a r d o z o A r t s & E n t. L.J. 565 (1995). 47. To relieve some critics, the requirement of registration before filing a lawsuit does not apply to most foreign works. Copyright Act of 1976, 17 U.S.C. § 411(a) (1994). On the other hand, registration as a precondition to statutory damages and attorney fees does not change the fact that the copyright owner has enforceable rights. John B. Koegel, Bamboozlement: The Repeal o f Copyright Registration Incentives, 13 C a r d o z o A r t s & E n t. L.J. 529, 535 n.33 (1995). Moreover, the previous common-law protection for unpublished works did not allow recovery of either statutory damages or attorney fees, so registration actually allows an expansion of rights that did not exist before the effective date of the Copyright Act of 1976. Id. at 530 n. 10 . 48. See Berne Convention, supra note 6 . 49. See U.S. C o p y r ig h t O ffic e , I n t e r n a t i o n a l C o p y r ig h t R e l a t i o n s o f t h e U n ite d S t a t e s , Circular 38 a (1998), for a list of countries adhering to the Berne Convention, with their dates of accession. See Nimmer, supra note 2, at 228-32 (discussing the conflicts of copyright protection that arose during the era when U.S. law continued to require formalities). 50. See supra note 35 and accompanying text.

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decades the United States held fast to formalities. In a striking development that began with the North American Free Trade Agreement (NAFTA),51 and was later expanded by the General Agreement on Tariffs and Trade (GATT),52the United States was obligated to bring many o f those foreign copyrighted works that had entered the public domain back under copyright protection.53 Effective January 1, 1996, U.S. copyright protection was restored to a broad range o f materials that originated in other countries but, due to noncompliance with U.S. formalities, had lost protection in the United States.54 The copyright was restored for the remaining term o f protection that the works would otherwise have enjoyed, which was typically a period o f seventy-five years from the date o f original publication.55 Foreign works that were once in the public domain are now back under copyright. However, U.S. works that also entered the public domain due to inadequate formalities had to remain in the public domain. As a result, U.S. law gives stronger copyright protection to a broader class o f foreign works than it gives to similar domestic works. U.S. law also demands that a researcher identify whether or not the work originated in the United States in order to determine whether it may still be protected. Often that seemingly simple information can be extraordinarily difficult to ascertain. D. M oral Rights Moral rights for authors and artists are a European concept56 introduced

51. North American Free Trade Agreement, Dec. 17,1992, U.S.-Can.-Mex., 321.L.M. 289 (1993), 32 I.L.M. 605 (1993) [hereinafter NAFTA]. 52. General Agreement on Tariffs and Trade, General Agreement on Tariffs and Trade, Oct. 30,1947, 61 Stat. 1103, 55 U.N.T.S. 187 [hereinafter GATT]. 53. Before the current version of 17 U.S.C. § 104A, Congress enacted a statute in 1993 pursuant to NAFTA that had a relatively limited application to motion pictures. See North American Free Trade Agreement Implementation Act, Pub. L. No. 103-182,107 Stat. 2057,2115(1993). The current statute applies more broadly to all types of works, as required by GATT. See Uruguay Round Agreements Act, Pub. L. No. 103-465,108 Stat. 4809,4976 (1994). Even before entering into these treaties, the United States arguably was required to grant retroactive protection to some foreign works under the Beme Convention. Congress apparently intended not to accept retroactive protection, although it apparently changed that policy in more recent years. See Nimmer, supra note 2, at 229. 54. Copyright Act of 1976, 17 U.S.C. § 104(A) (1998). 55. Ironically, the protection for 75 years is still not true “harmonization.” Many other countries long ago adopted a “life-plus-fifty” rule, while in the United States the work is restored to a fixed duration. 56. Arthur B. Sackler, The United States Should not Adhere to the Berne Copyright Convention, 3 J .L. & T e c h . 207, 209 (1988). “The concept of moral rights ... has long been recognized in European and other countries.” Belanger, supra note 1, at 383.

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into U.S. copyright law in a most minimalistic manner solely to comply with Bem e Convention obligations.57 Moral rights in the United States give an artist o f certain “works o f visual arts”58the right to preserve his or her name on copies o f works,59as well as the right to have the artist’s name removed if an owner o f the copy alters it in ways objectionable to the artist.60 Moral rights also give artists o f certain works the ability to prevent the owner o f the copy from destroying it.61 Authors and artists in the United States did not have these rights before the enactment o f moral rights provisions in 1990.62 The result has been a distinct expansion o f the scope o f rights, at least for a narrow class o f works. E. B ootleg Sound Recordings While moral rights were a new form o f right for some copyrighted works, treaty requirements also extended U.S. legal protection to works that previously lacked copyright protection altogether. The lack o f legal protection for bootleg recordings o f musical performances is a surprising void, making this revision perhaps the most sympathetic o f all changes in U.S. law described in this Article. An unauthorized sound recording o f a performance, due to a quirk in U.S. copyright law and constitutional interpretation, had previously lacked copyright protection for the performer. The person making the recording was not responsible for the original performance captured on tape, and thus had contributed no “originality” to the work. The performer had not authorized the recording and consequently was not the one “fixing” the performance onto the

57. Belanger, supra note 1, at 383. 58. Copyright Act of 1976, 17 U.S.C. § 101(1998) (defining “work of visual art”). 59. Id. § 106A(a) (explaining the right of paternity or attribution). 60. Id. 61 Id; See Martin v. Indianapolis, 982 F.Supp. 625 (S.D. Ind. 1997), for a leading case on this issue. 62. Belanger, supra note 1, at 399 (noting that moral rights are the “most significant” area in which the United States continues to fail to meet the requirements of the Beme Convention).

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tape.63 Hence, that recording was not the work o f the performer or the recorder. Protection for such a sound recording often fell into a legal void. The existence o f that void was inconsistent with the laws o f most other countries and with multinational treaty requirements.64 The United States now provides legal protection for the performers, giving them the ability to bring action against persons who make and distribute bootleg recordings.65 However, that protection is not “copyright” law. Rather, it is protection enacted by Congress under either its commerce or treaty powers66but it applies the remedies given to a copyright owner under the Copyright Act.67 It is for all practical purposes copyright protection for unauthorized sound recordings, but enacted by Congress under its other powers found in the U.S. Constitution, thereby avoiding the rigors o f the Copyright Clause.68 F. Database Protection The World Intellectual Property Organization (WIPO) Copyright Treaty o f 1996 provides that databases shall be protected,69 a declaration that, in many applications, defies established U.S. copyright law. In 1991, the U.S. Supreme

63. Copyright Act of 1976, 17 U.S.C. § 101 (1998). The definition of “fixed” provides that a work eligible for copyright must be fixed “by or under the authority of the author.” Id. A bootleg recording is not made with the authority of the copyright owner of the composition or the performer. The U.S. Constitution empowers Congress to grant protection only to “authors” for “their writings.” U.S. C o n s t, art. I, § 8,cl. 8. The power may not encompass “writings” that are “fixed” by someone other than the “author.” 17 U.S.C. § 101. The issue of bootleg recordings deals largely with the interests of the performer of a musical composition. If the composition existed in a “fixed” version, whether as a musical score or as a separate recording, before the performance that was “bootlegged,” the composer most certainly has copyright protection for the composition. Hence, the composer could take action against many uses of the bootlegged recording, while the performer would not have any rights under previous law. The new statute gives rights to the performer. Copyright Act of 1976, 17 U.S.C. § 1101 (1998). 64. See Peter Jaszi, Goodbye to All That: A Reluctant (and Perhaps Premature) Adieu to a Constitutionally-Grounded Discourse o f Public Interest in Copyright Law, 29 V a n d . J. T r a n s n a t ’l L. 595 (1996). 65. Copyright Act of 1976,17U.S.C. § 1101 (1998). One critic notes that because the anti-bootlegging statute is technically separate from the basic regime of copyright protection, it is not necessarily subject to the limited term of protection and offers “potentially perpetual protection.” Jaszi, supra note 64, at 603. 66. U.S. C o n s t, art. I, § 8, cl. 3 &art. VI; Jaszi, supra note 64, at 605 (referencing the Commerce Clause as the source of congressional power). 67. Copyright Act of 1976, 17 U.S.C. § 110(a) (1998). 68. Jaszi, supra note 64, at 602. “While dealing with a creative activity, which has been acknowledged to represent a form of authorship, the anti-bootlegging provisions go beyond what Congress could do if it were legislating under the Patent and Copyright Clause.” Id. 69. WIPO Copyright Treaty, supra note 5, art. 5. “Compilations of data or other material, in any form, wh ich by reason of the selection or arrangement of their contents constitute intellectual creations, are protected as such.” Id.

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Court ruled as a constitutional matter that copyright law could not protect compilations o f data that were not selected, arranged, or coordinated in some original manner.70 The database in the 1991 case, an alphabetical telephone listing, was merely an unoriginal compilation o f unprotectable facts, and it could have no copyright protection.71 Many other countries provide protection for such databases and saw the U.S. decision in Feist Publications, Inc. v. R ural Telephone Service Co., Inc. to be an anomaly that left many databases in the public domain. Such databases still lack protection in the United States, and U.S. copyright law cannot encompass them.72 In an exercise o f congressional power to regulate interstate commerce, proposals in Congress would have extended sui generis legal rights for databases where copyright ends.73 Once again, treaty obligations have compelled the prospect o f change in intellectual property law. In this instance, the change is potentially in direct contravention o f a constitutional decision rendered by the U. S. Supreme Court. II. T h e C o n tin u in g M a r c h o f H a r m o n iz a tio n The march o f harmonization continues with additional new legislation and further treaty negotiations.74 One direct example o f this development is the right to secure “copyright management information” (CMI) and “copyright protection systems” (CPS) pursuant to the WIPO treaty.75 These additions to U.S. copyright law do not come without controversy. The statutes that now authorize copyright owners to place technological controls and to prescribe regulatory information in connection with the access to and dissemination o f protected works also impose severe penalties on individuals who circumvent or remove the controls on that information. Those penalties would apply even if

70. Feist Publications, Inc. v. Rural Telephone Service Co., Inc., 499 U.S. 340 (1991). 71. According to the Supreme Court, the alphabetical telephone listing was a “garden variety” listing that lacked “some minimal degree of creativity.” Id. at 362. 72. The Feist decision is based on a constitutional requirement for U.S. copyright protection, and hence an Act of Congress pursuant to the Copyright Clause cannot overturn it. See id. at 363-64. 73. Digital Millennium Copyright Act, H.R. 2281, 105th Cong., tit. 5 (1998) (Title5 is entitled “Collections of Information Antipiracy Act”); Collections of Information Antipiracy Act, S. 2291,105th Cong. (1998); See Jaszi, supra note 64, at 605 (questioning the constitutionality of the database legislation). 74. At least one piece of legislation from recent years, offered with the objective of treaty compliance, has died with little prospect for reintroduction. A bill in 1993 would have eliminated the requirement of registration as a precondition to filing a lawsuit and securing certain remedies. See supra notes 35-45 and accompanying text. See Koegel, supra note 47, for a critical examination of the bill. 75. WIPO Copyright Treaty, supra note 5, art. 11, 12; Digital Millennium Copyright Act,Pub. L. No. 105-304, § 103(a), 112 Stat. 2860, 2863-76 (1998) (to be codified at 17 U.S.C. Title 12).

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a user were to take actions in order to utilize the resources in a manner consistent with fair use or other legal rights to use copyrighted works.76 Thus, while the law explicitly states that the addition o f CMI and CPS does not affect the exercise o f fair use, copyright owners may unilaterally impose regulatory devices that could restrict uses more narrowly than would be within the framework o f existing fair use, exposing a user to legal liability for bypassing CMI or CPS in pursuit o f the lawful exercise o f fair use.77 Fair use may continue to apply to works once they are lawfully accessed, but the copyrighted works will, as a practical matter, be locked behind secured devices and software blocks. Access may also be limited by contractual obligations that could limit fair use. Another development in U.S. law is the recent, successful effort to extend the term o f copyright protection. The Copyright Term Extension Act adds twenty years o f protection to the current copyright duration provided under the law.78 This new law extends that term to life o f the author plus seventy years. The bill would add twenty years to almost all works, including works made for hire and unpublished manuscripts originating before 1978. The impetus for this development grows largely out o f a similar extension o f the term adopted by many countries.79 The term o f “life-plus-seventy” has been advanced as the appropriate standard for all members o f the European Union.80 This change in U.S. law is not required under any treaty or other obligation on the part o f the United States. It is simply an effort to “harmonize up” with the laws o f other countries in order to provide maximum protection for U.S. copyrights in those other countries. It is also a tremendous windfall o f twenty additional years o f protection for all new works, particularly for existing

76. Considerable controversy about the survival of fair use surrounds the new law. The law does include provisions that explicitly provide for the preservation of fair use, but it does allow restrictions on access to copyrighted works, even if that access is for lawful purposes, such as fair use. See Digital Millennium Copyright Act, Pub. L. No. 105-304, § 103(a), 112 Stat. 2860 (1998) (to be codified at 17 U.S.C. Title 12). 77. The bill as passed by Congress does include provisions that ostensibly preserve fair use. See, e.g., Digital Millennium Copyright Act, Pub. L. No. 105-304, § 103(a), 112 Stat. 2860 (1998) (to be codified at 17 U.S.C. Title 12). 78. Copyright Term Extension Act, Pub. L. No. 105-298, 112 Stat. 2827 (1998). 79. See Lisa M. Brownlee, Recent Changes in the Duration o f Copyright in the United States and European Union: Procedure and Policy, 6 F o r d h a m I n t e l l . P ro p . M e d ia & E n t. L.J. 579 (1996); Shauna Bryce, Life Plus Seventy: The Extension o f Copyright Terms in the European Union and Proposed Legislation in the United States, 37 H a r v . I n t ’l L.J. 525 (1996); Jerome N . Epping, Harmonizing the United States and European Community Copyright Terms: Needed Adjustment or Moneyfor Nothing, 65 U. C in. L. R ev. 183 (1996). 80. Directive on Harmonizing the Term of Protection of Copyright and Certain Related Rights, Council Directive 93/98, 1993 O.J. (L290/9).

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U.S. works that may otherwise have been on the verge o f entering the public domain.81 These developments, often in the name o f harmonization, are supported by some compelling arguments. Indeed, the arguments in favor o f change have been sufficiently persuasive in the negotiation o f treaties, the ratification o f treaties by the U.S. Senate, the enactment o f amendments to the Copyright Act by both the House and the Senate o f the U.S. Congress, and the signing o f those bills into law by the President o f the United States. Passage by Congress o f the latest bills, designed to implement the WIPO Treaties and extend the term o f copyright, are merely the latest evidence o f the pressure for harmonization. Arguments in favor o f passage center largely on economic implications.82 For example, the extended term o f protection may generate twenty more years o f commercial revenue for many economically viable works. Much o f that revenue may come from foreign countries where many novels, motion pictures, and other U.S. works from the early twentieth century continue to find a market. The economic argument translates not only into greater revenues for U.S. copyright holders, but also into the subsequent tax revenues, employment prospects, and shareholder profits that accompany expanded business. Moreover, if those revenues are derived from foreign markets, the strengthened protection and longer term o f protection for copyrights may also help shift the balance o f international trade in favor o f the United States. Many o f the arguments in favor o f these changes also exacerbate tensions among property claims, the rights o f creators, and the public rights o f use. For example, one basic principle o f copyright is the separation o f the work from its copyright.83 An artist, for example, may create and sell a painting. Unless otherwise agreed, the buyer owns only the object; the copyright and its appurtenant privileges remain with the artist. One outgrowth o f this legal construct is that the buyer has property rights with respect to the painting and may treat the physical object in almost any manner chosen, including further resale or even destruction o f the work, whether the work is a painting, book, videotape, or other copyrighted work. However ill-advised destruction may be,

81. Indeed, concerns about imminent expiration of some major works from the 1920s and 1930s have motivated the Gershwin estate and the Disney companies to be major proponents of term extension. Steve Zeitlin, Editorial, Strangling Culture with a Copyright Law, N .Y .T im es, Apr. 25, 1998, at A15. 82. One strong critic of term extension presented his arguments at hearings before the U.S. Senate Judiciary Committee and lamented that his points were overwhelmed by the more immediate concern of lost revenue that could result if copyrights were not granted the additional 20 years. See Jaszi, supra note 64, at 598. 83. Copyright Act of 1976, 17 U.S.C. § 202 (1998).

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it is consistent with traditions o f property ownership. Burning a book may carry historical or social stigma, but it is the right o f the book owner.84 The granting o f moral rights, however, conflicts with those traditions o f private property. One may still burn or discard a book, regardless o f its value or uniqueness, but if the owner o f a “work o f visual art” sends that work to its demise, the owner may face damage claims payable to the artist.85 Perhaps more pragmatic for modem industry, a representative o f a major publishing company argued strongly against adoption o f moral rights in U.S. law because o f its potential interference with the ability o f publishers to crop photographs and edit writing.86 While the version o f moral rights eventually adopted in the United States extends only to certain works o f “visual arts,” this layer o f rights belongs to artists and other creators o f new works. Therefore, even if the editor properly obtains consent from the copyright owner, the moral rights nevertheless may well belong to yet another party. Editors, publishers, and others would need to redouble their efforts by obtaining clearances from both the copyright owner and the original artist.87

84. This writer is hardly an enthusiastic supporter of burning books, and indeed has been an active proponent of the preservation of historical materials. One might also argue that a limitation on the right to destroy a copyrighted work may be consistent with efforts to preserve historical buildings and other architectural sites. Often when a site is identified for historical preservation, the owner is prevented by law from destroying or altering the building. The social objectives of such law are laudable. On the other hand, historical preservation is fundamentally different from moral rights. For example, moral rights are legal rights that belong only to the individual creator, while rights to prevent destruction of historical buildings are enforceable by governmental authorities. Further, moral rights, at least in the United States, last only for the life of the artist, while preservation restrictions last indefinitely. Consequently, preservation restrictions may in fact limit free exercise of property rights. Penn Central Transportation Co. v. New York City, 438 U.S. 104 (1978) (upholding the constitutionality of preservation laws). However, they do so in a manner that is more clearly directed at serving a broader public objective, rather than a personal one. 85. Copyright Act of 1976, 17 U.S.C. § 106A (1998). 86. Sackler, supra note 56, at 207-08. 87. Ironically, one major argument against adoption of moral rights was that it would require additional time and expense, burdening the decisions made by publishers and editors: “[Ejditors can afford neither the time to obtain consent for specific uses of works nor to hesitate on decisions out of concern that they may subsequently be second-guessed in litigation.” Sackler, supra note 56, at 208. See also Roberta Rosenthal Kwall, How Fine Art Fares Post VARA, 1 M a r q . I n t e l l . P ro p . L. R ev . 1,3(1997) (“When the United States joined Beme in 1988, the entertainment and publishing industries vehemently opposed the adoption of specific moral rights legislation.”). Publishers have strongly rejected similar arguments from educators and librarians seeking to make “fair use” of existing publications. See, e.g., Carol Risher, Libraries, Copyright and the Electronic Environment (Barcelona, Apr. 1996) (position paper on behalf of the International Publishers Copyright Council of the IPA 25th Congress, on file with the Copyright Management Center at Indiana University-Purdue University Indianapolis). The Sackler article also objects to the need to give attribution to the creators in addition to the copyright owner. Sackler, supra note 56, at 208. Again, publishers generally have insisted that educators and librarians include formal notices on any “fair use” copies, even though nothing in the “fair use” law requires attribution.

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Other changes in copyright law in the name o f “harmonization” also defy deeper principles o f property ownership. Rights o f free alienation are generally secured by the “first-sale” doctrine o f copyright law,88which allows the owner o f a lawful copy to pass that copy to others by sale, gift, or rental. The WIPO Copyright Treaty o f 1996, by contrast, calls for some curtailment o f leasing certain works.89 This right to lend, lease, or transfer ownership o f copies o f protected works has not been unlimited under recent U.S. law. Forexample, in 1990, Congress revised the “first-sale” statute90 to preclude the commercial rental or lending o f computer programs or sound recordings o f musical works.91 The WIPO treaty, however, could allow federal law to add further restrictions on sales, rentals, or even loans o f books, videotapes, and other works. III. H a rm onization a n d the H a r m to P ublic Interest

Despite the pragmatic and economic arguments in favor o f recent developments in U.S. copyright law, many changes have provided benefits ultimately to only a small number o f individuals at the expense o f a large segment o f the U.S. public. U.S. copyright law is built on a principle o f social policy that attempts to find a balance between granting rights o f ownership and control to copyright owners and tempering those rights with a number o f exceptions or “limitations” reserved to the public to make socially constructive uses o f copyrighted works under limited circumstances.92 That balance between private rights and social utility is critical to U.S. copyright law and is implicit in the social objectives o f the law as provided in the constitutional clause empowering Congress to make copyright law: “The Congress shall have Power . . . To promote the Progress o f Science and useful Arts, by securing for limited times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”93 Congress has the power to grant rights to copyright owners, but only if the measure o f rights granted is apportioned to serve the overall objective o f advancing knowledge and learning. If the grant o f rights is too

88. Copyright Act of 1976, 17 U.S.C. § 109(1998). 89. WIPO Copyright Treaty, supra note 5, art. 7. 90. Copyright Act of 1976, 17 U.S.C. § 109(1998). 91. Judicial Improvement Act of 1990, Pub. L. No. 101-650, 104 Stat. 5089, 5134-35 (codified as Computer Software Rental Amendments Act of 1990, 17 U.S.C. § 109(b)(1)(A) (1998)). 92. Netanel, supra note 2, at 220. “[Cjopyright’s constitutive, democratic purpose is both a primary rationale for according authors proprietary rights in original expression and the proper standard for delimiting those rights.” Id. 93. U.S. C o n s t., art. I, § 8, cl. 8.

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broad or too rigid, then the public’s ability to utilize protected works and to build on and to learn from them is unduly constrained. Few o f the recent changes in U.S. copyright law that have added to the rights o f the copyright owner include any measure o f corresponding balance o f rights for the public.94 One fundamental reason for that lack o f balance may simply be that these changes reflect an effort to harmonize U.S. law with laws originating in foreign countries where copyright law is not rooted in the same social principles and the same quest for a balancing o f rights. Many Western European countries have stronger rights o f private property and copyright ownership along with fewer rights regarding fair use than have been customary in the United States. Harmonizing U.S. law with such legal traditions might result in developments lacking the balance o f public interest that has been a hallmark o f U.S. law. A trend o f harmonization that adds predominately to the rights o f the copyright owners without a corresponding balance o f public rights promises fundamental change in U.S. copyright law at a high cost to the public. First, any expansion o f scope or duration o f protection is, by necessity, a corresponding contraction o f the public domain. Loss o f the public domain, even a partial loss, is a loss o f one o f the few clear opportunities for a member o f the public to build upon existing works and to expand upon the base o f creative resources available in the marketplace. Sometimes that member o f the public is an individual acting alone or is a business executive seeking maximum profits and in turn contributing to the broader economy. Novels, for example, on which the copyrights have expired, have become available to the public as inexpensive reprints, public television serials, and major Hollywood motion pictures. The public domain is a valuable resource for individuals seeking affordable access to works and for large companies seeking to profit by bringing those works to market either in their original forms or in new media.95

94. Even more distressing than the lack of any broad limitation for public benefit is the inclusion in the Copyright Term Extension Act, Pub. L. No. 105-298, 112 Stat. 2827 (1998), of an exemption for the public performance of music and other works in restaurants, taverns, and other business establishments. The wisdom or appropriateness of such an exemption is beyond the scope of this Article, and it is not a new concept. It expands upon an existing provision. See Copyright Act of 1976, 17 U.S.C. § 110(5) (1994). The distress, however, is found in the congressional justification for that exemption, with some members of Congress arguing that it provides the essential protection for the public interest to balance against the windfall for private parties that would come from the additional 20 years of copyright. 144 Cong. Rec. HI457 (daily ed. Mar. 25,1998) (statement of Rep. Sensenbrenner). It is true that the existing § 110 of the Copyright Act presents a litany of important limitations on owner rights, but a benefit for one class of commercial uses is far from adequate to compensate for the strain on the public interest generated by term extension. 95. For example, the Disney Company, which strongly supports term extension, has benefitted greatly

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Second, the trend toward tightened copyright protection harms the public good by narrowing the exercise o f fair use.96 Fair use is a crucial element o f the U.S. copyright system that allows limited uses o f protected works in furtherance o f the constitutional objectives. Fair use is not free use, and it is not an unrestricted opportunity to exploit unwilling copyright owners. Some copyright owners do object to some claims o f fair use. However, fair use is essential not only to the public seeking to build on existing works, but also for the creation o f the next generation o f many new copyright-protected works. If new legal structures constrict fair use, the public loses opportunities to benefit from intellectual works in many creative ways, and the next generation o f copyright owners is inhibited from using a previous generation o f material as a fresh foundation. A third consequence is undue restriction on the deployment o f new technologies. The success o f many new technologies, from the photocopier to the Internet, depends on the ability to utilize copyright protected materials in ways that raise questions about the possibility o f infringement. The photocopier can reproduce copyrighted works; the VCR can play videotapes; the Internet can transmit or distribute digital works. The availability o f the technology is alone hardly justification for revising copyright laws to allow full utilization o f all technology. However, the advance o f technologies is crucial for economic and social progress. Many o f the recent developments in photo reproduction, telecommunications, and computer networking are central to enhanced communications, greater efficiency o f commercial activity, and the growth o f major industries. Much o f the domestic and international economy today depends on a successful application o f these technologies for the growth o f business and for the exploration o f new commercial opportunities. Just as the motion picture and publishing industries might argue that stronger copyright protection can reinforce their businesses and have strong positive consequences for the economy, so could the computer and technology industries argue that greater opportunities for reproduction and transmission o f copyrighted works can make new technologies more useful, more valuable, and consequently o f

from the public domain. Disney’s 1996 movie, The Hunchback o f Notre Dame, to cite one example, is a motion picture based on an 1831 novel by Victor Hugo. Without the expiration of the original work, Disney would have canceled its project or have paid handsome royalties to the Hugo estate. 96. In furtherance of GATT the United States and numerous other countries entered into the Agreement on Trade-Related Aspects of Intellectual Property Rights, Apr. 15, 1994, 33 I.L.M. 1199 (also known as TRIPS), and established the World Trade Organization. TRIPS allows fair use and other exceptions to the rights of the copyright owners, but only under narrow circumstances, possibly invalidating some of the applications of fair use in recent U.S. court rulings. Netanel, supra note 2, at 309-10.

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greater importance to the economy. A fourth consequence for the public, resulting from restrictions, is the diminished ability to share or disseminate protected works. If teachers are barred from using materials in the classroom, leaders are constrained from sharing materials at public functions, and cultural programs are prohibited from performing or otherwise making works available to an audience, then the public is simply denied exposure to creative works. That lack o f exposure translates into a loss o f learning opportunities and a curtailment o f cultural progress. Those restrictions may arise from longer copyright protection, new forms o f enforceable legal rights, imposition o f binding technological controls on access, and automatic grants o f copyright protection for all works, regardless o f the author’s intent.97 C o n c lu sio n : H arm onization a n d the F uture of C opyright

Change is inevitable in any area o f the law. Changes allow the law to adapt to new social demands and expectations and enable the law to be responsive to contemporary forces, whether political or technological. Critical examinations o f copyright law and periodic revisions are essential. The problem with many o f the recent changes in U.S. copyright law is that they are motivated overwhelmingly by the pressure for harmonization with the laws o f other countries, rather than by the belief that the changes will produce better law. Especially lost in the recent debates over copyright has been any focus on the public interest and the constitutional foundation o f copyright: to advance the growth o f knowledge and learning. That shift from the constitutional foundation o f copyright represents the most problematic consequence o f harmonization. The U.S. Constitution empowers Congress to make copyright law within the context o f a social objective: “[t]o promote the Progress o f Science and useful Arts.” Historically, that clause has compelled an evaluation o f the effect o f copyright law, as well as any revisions and interpretations, in light o f a tension that is inherent in the struggle over rights to intellectual property: identifying the scope o f rights that

97. Reduced need for registration of works jeopardizes the completeness and integrity of the registration records at the U.S. Copyright Office. See Koegel, supra note 47 at 538. It could also undermine the system of legal deposit of materials for addition to the collection of the Library of Congress. See Kenneth D. Crews, Legal Deposit in Four Countries: Laws and Library Services, 80L.LIBR. J. 551 (1988). Legal deposit under American law is today required by statute, separate from any requirement of registration. See Copyright Act of 1976, 17 U.S.C. § 4 0 8 (1 9 9 4 ).

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ought to belong to the owner o f the work, while tempering those rights to grant public rights o f use in order to encourage productive uses o f existing works.98 A prominent example o f that tension, as addressed in recent years, is the Feist decision from the U.S. Supreme Court in 1991." In Feist, the Court held that standard white-pages telephone directories were not sufficiently creative to be eligible for copyright protection. In so holding, the Court also rejected the “sweat o f the brow” doctrine that had emerged in some lower courts. By that rule, copyright would vest in a work if time, money, or energy were expended. The Justices recognized that rejection o f the “sweat” doctrine would jeopardize copyright for numerous works that are the product o f investment but lack creativity. The Court madeclearthatwhile such aresult may seem inequitable, it is crucial for serving the objectives o f copyright. Despite that strong endorsement from the Supreme Court for the constitutional objectives o f copyright, Congress is taking steps toward enactment o f database protection legislation that would provide protection for noncreative compilations o f data that the F eist decision found inappropriate for copyright and its appurtenant rights.100 While the Supreme Court focused on the social objectives o f the law, Congress has taken del iberate steps to serve instead commercial interests. Similarly, recent legislation in the name o f harmonization would test the constitutional power o f Congress to grant copyrights for “limited times” as the copyright term continues to expand from the original maximum o f twenty-eight years to a term o f seventy years beyond the life o f the author.101 Congress has confronted the constitutional limits on protections for bootleg recordings with new legislation, and it has tested traditional doctrines o f property rights by giving artists moral rights regarding some o f their visual works. These changes represent not only a shift in the philosophical foundation o f copyright and related law, but also a shift in the constitutional foundation for congressional measures. Congress is adopting legislation that, in many

98. Jaszi, supra note 64, at 596 (warning that “constitutionally-grounded arguments for limitations on proprietary rights will become irrelevant in tomorrow’s intellectual property debates”). 99. See supra text accompanying notes 70-72 for a discussion of Feist. 100. See supra text accompanying notes 69-73 for a discussion of the database legislation. 101 . See Dennis S. Karjala, Comment o f U.S. Copyright Law Professors on the Copyright Office Term o f Protection Study, 16 E u r . I n t e l l . P ro p . R ev . 531 (1994) (highly critical of extending the term of protection and contests its constitutionality); see also Joseph A. Lavigne, For Limited Times? Making Rich Kids Richer Via the Copyright Term Extension Act o f1996, 73 U. D e t. M e r c y L. R ev. 311 (1996); J.H. Reichman, An Evaluation o f the Copyright Term Extension Act o f 1995: The Duration o f Copyright and the Limits o f Cultural Policy, 14 C a r d o z o A r t s & E n t. L.J. 625 (1996).

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respects, functions similarly to copyright law, but it is instead relying on either the Treaty Clause or the Commerce Clause for authority. Under the Treaty Clause, Congress can enact legislation consistent with treaties entered into by the United States, but that legislation may not expand congressional authority to take action that would contradict the U.S. Constitution.102 Through the last several decades, the Commerce Clause has become an expansive source o f congressional authority for enacting diverse legislation that concerns almost any activity affecting more than one state.103 By contrast, the Copyright Clause begins with a statement o f policy: that copyright privileges should be shaped to duly encourage the creation o f new works and to allow limited public uses also for the growth o f knowledge.104 That policy has been interpreted as a dynamic force shaping copyright law and defining the boundaries o f congressional development o f copyright statutes.105 On the other hand, a database bill enacted under commerce powers would not be required to balance the rights o f copyright owners and the rights o f the public; the bill may grant protection to compilations o f data that are constitutionally unprotected under copyright law. The bill may also allow protection o f an indefinite duration, while copyrights are constitutionally allowed for “limited times.” The bill recently in Congress had exactly those attributes. These developments in the law reflect not only constitutional, policy, and philosophical shifts, but they also manifest a steady shift in the identity o f the stakeholders in the shaping o f U.S. intellectual property law. Copyright law protects works such as motion pictures and computer software, a growing source o f domestic employment and revenue as well as foreign trade. The economic importance o f movies, computer programs, and other works has been a powerful influence shaping U.S. copyright law. Computer technology has brought inexpensive and efficient means for reproducing and transmitting

102. See Reid v. Covert 354 U.S. 1 (1957). But cf Missouri v. Holland, 252 U.S. 416 (1920) (treaties may establish law that conflicts with state authority). 103. See Heart of Atlanta Motel v. United States, 379 U.S. 241 (1964). See also United States v. Lopez 514 U.S. 549 (1995) (striking down federal legislation barring possession of a gun in the area around a school), for the isolated recent example ofthe Supreme Court finding that Congress has exceeded its authority under the Commerce Clause. 104. “[F]ull compliance with the Beme Convention would shift the balance of U.S. law, arguably placing an author’s rights ahead of the public interest in access to copyrighted works, such compliance would be unconstitutional.” Belanger, supra note 1, at 391. 105. Feist, 499 U.S. at 349 (noting that copyright law may produce some results that “seem unfair,” but those results are sometimes a “constitutional requirement”).

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protected content to and from any location in the world. The strength o f these industries in the current economy and the ease o f committing infringements have combined to persuade most lawmakers o f the need for considerably stronger protections for intellectual property. The strengthened rights, however, are often without a corresponding right o f public use— whether that right is fair use or a clearer establishment o f the public domain. Thus, the economic pressures and the growing international significance o f copyright have led to new law. That new law is overwhelmingly in furtherance o f expanding protection, easier protection, and longer protection. Moral rights, database protection, technological controls, extended copyrights, eliminated formalities, and even restored copyrights that were long in the public domain are symptoms o f a legal regime o f extraordinary and rapid growth. That growth, however, has been the direct outcome o f legislation reaching beyond the constitutional limits found in the Copyright Clause and underscored by the Supreme Court. Congress is also securing greatly strengthened legal rights without the constitutional policy to balance those rights for the benefit o f the public. The public may well benefit from the economic residuals o f legal strictures, but the public will ultimately lose as cultural and intellectual progress is increasingly subject to rigorous structures o f the law.

[14] The globalization of private knowledge goods and the privatization of global public goods K E I T H E. M A S K U S JEROME H. R E I C H M A N *

Abstract I. Introduction and conceptual framework A. International public goods and intellectual property rights B. Technology transfer after the TRIPS agreement II. Re-regulating the global marketplace to protect knowledge as a private good A. Legal and organizational impediments to the creation and diffusion of knowledge goods 1. Preserving temporary competitive advantages with international intellectual property standards 2. Instability and loss of balance in developed intellectual property regimes 3. Exporting a dysfunctional system to the rest of the world? B. Impact of intellectual property standards on the reserved welfare powers of WTO members III. Balancing public and private interests in an emerging transnational system of innovation A. Developing countries as defenders of the competitive ethos 1. A moratorium on stronger international intellectual property standards 2. An institutional infrastructure for reconciling existing IPRs with national and regional systems of innovation B. Maintaining the supply of knowledge as a global public good 1. Dynamic properties of knowledge as a global public good 2. Nurturing a transnational system of innovation

* Keith Maskus is Professor in, and Chair of, the Department of Economics at the University of Colorado, Boulder, Colorado. J.H. Reichman is the Bunyan S. Womble Professor of Law at Duke University School of Law, Durham, North Carolina. This chapter is based on a paper presented at the Conference on International Public Goods and Transfer of Technology under a Globalized Intellectual Property Regime, held at Duke University School of Law on 4-6 April 2003.

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K E I T H E. M A S K U S A N D J E R O M E H . R E I C H M A N

ABSTRACT

Global trade and investment have become increasingly liberalized in recent decades. This liberalization has lately been accompanied by substantive new requirements for strong m inimum standards of intellectual property (IP) protection, which moves the world economy toward harmonized private rights in knowledge goods. While this trend may have beneficial impacts in terms of innovation and technology diffusion, such impacts would not be evenly dis­ tributed across countries. Deep questions also arise about whether such glob­ alization of rights to information will raise roadblocks to the national and international provision of such public goods as environmental protection, public health, education, and scientific advance. This chapter argues that the globalized IP regime will strongly affect prospects for technology transfer and competition in developing countries. In turn, these nations must determine how to implement such standards in a pro-competitive manner and how to foster innovation and competition in their own markets. Developing countries may need to take the lead in policy experimentation and IP innovation in order to offset overly protectionist tendencies in the rich countries and to maintain the supply of global public goods in an emerging transnational system of innovation.

I.

Introduction and conceptual framework

Economists studying international trade remain optimistic about the ability of liberal trade policies and integration into the global economy to encourage growth and raise people in poor countries out of poverty. For example, in a recent speech at Duke University, the World Bank’s former Chief Economist, Nicholas Stern, showed figures depicting a significant rise in per capita GDP across developing countries as a whole in recent years.1 His point was that, despite other obstacles to growth, more open markets, improved governance, and increasing entrepreneurial activity were generating a positive impact in poor countries. Even Oxfam, an organization that has been highly critical of globalization, in a recent report recognized the role that open trade regimes have played in providing greater opportunities for the impoverished to benefit from extended markets.2 1 Nicholas Stern, International Action for Fighting Poverty: An Historic Opportunity, Lecture given at Duke University (2 Sept. 2003). See also J.H. Reichman, Managing the Challenge of a Globalized Intellectual Property Regime, Paper presented to the Second Bellagio Meeting on Intellectual Property and Development, UNCTAD/ICTSD, 17-20 Sept. 2003 (discussing Stern’s thesis); David Dollar 8c Aart Kraay, Trade, Growth, and Poverty, Development Research Group, The World Bank (2001) (unpublished manuscript, on file with authors). 2 O xfam, R igged R ules and D ouble Standards : T rade , G lobalisation , and the F ight A gainst P overty (2002).

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In general, we share this confidence but argue that a considerable qualifica­ tion needs to be made. Open trade and investment regimes work best to encourage development and structural transformation where markets for information and technology transfer are competitive in ways that permit innovation, learning, and diffusion to flourish. Put differently, for poor coun­ tries to take advantage of globalization opportunities, they need to absorb, implement, and even develop new technologies. An inability to do so risks increasing fragmentation and divergence from the technology-driven world economy rather than growing integration and con­ vergence. Indeed, one could have applied Stern’s optimistic description to the centrally planned economies of Eastern Europe over the period 1950-1975. They had high rates of savings (even if forced) and capital accumulation, and were generating apparently high growth. However, these economies failed to establish effective innovation systems: they lacked skills, infrastructure, and the entrepreneurial culture that could encourage competition and learning, and they relied instead on protected and inefficient industrial behemoths. These establishments could not cope well with competitive pressures dependent upon economic liberalization, and their economies stagnated. A different kind of technological roadblock may be facing developing countries in their efforts to integrate into the world economy. A central element in global policy is the ever-increasing levels of required protection for information, technology, and creative activity through exclusive intellectual property rights (IPRs). This trend is most evident in the Agreement on TradeRelated Aspects of Intellectual Property Rights (TRIPS Agreement), a component of the Agreement Establishing the World Trade Organization (WTO).3 The TRIPS Agreement sets out a comprehensive set of minimum protection standards that Members must observe and enforce with respect to patents, copyrights, trademarks, geographical indications, confidential business information, indus­ trial designs, and integrated circuit designs.4 Even stronger rules are being widely established through bilateral and preferential trade agreements that the United States and the European Union have negotiated with developing countries.5 3 Agreement on Trade-Related Aspects of Intellectual Property Rights, 15 Apr. 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1C, L egal I nstruments - R esults of the U ruguay R ound vol. 31, 33 I.L.M. 81 (1994) [hereinafter TRIPS Agreement]. 4 See, e.g., J.H. Reichman, Universal Minimum Standards of Intellectual Property Protection under the TRIPS Component of the WTO Agreement, in I ntellectual P roperty and I nternational T rade : T he T rips A greement 21 (C.M. Correa & A. Yusuf eds., 1998); see generally J ayashree W atal , I ntellectual P roperty R ights in the W TO and D eveloping C ountries (2001); C arlos M. C orrea, I ntellectual P roperty R i ghts , the W TO and D eveloping C ountries (2000). 5 See, e.g., Peter Drahos, Developing Countries and International Intellectual Property StandardSetting, 5 J. W orld I ntell . P rop . 765 (2002); Keith E. Maskus, Strengthening Intellectual Property Rights in Lebanon, in C atching up with the C ompeti ti on : T rade

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Recent agreements reached at the World Intellectual Property Organization (WIPO) on the electronic transmission of works protected by copyrights or related rights6 and ongoing negotiations at that organization on harmoniza­ tion of patent rights7 continue the drive to ratchet upward global protection regimes. The evolving system of stronger private rights in new technologies could lead to global gains in innovation and additional market-mediated information transfers to developing countries.8 Indeed, one can argue that the harm on­ ization of IPRs provides developing countries with tools for technology-driven development that they would otherwise lack. By wisely managing these tools, developing countries may obtain additional foreign direct investment (FDI), more licensing of high-quality technologies, and more access to advanced knowledge goods. We do not dispute the potential for such outcomes, although we believe that the scope for achieving them in different nations much depends on innovation policies and other complementary factors.9 In this introductory chapter, how­ ever, we raise some fundamental concerns about the implications of the new regime for the ability of firms in developing countries to break into global - or even domestic - markets and compete effectively. It seems increasingly likely that stronger global IPRs could reduce the scope for such firms to acquire new, and even mature, technologies at manageable costs. The natural competitive disadvantages of follower countries may become reinforced by a proliferation of legal monopolies and related entry barriers that result from global minimum intellectual property (IP) standards. Such external restraints on competition could consign the poorest countries to a quasi-permanent status at the bottom of the technology and growth ladder. We find it ironic that, as tariffs, quotas, and other formal barriers to trade are dismantled, there has been a strong push to re-regulate world technology markets. Although the ratcheting up of global IPRs could adversely affect the growth prospects of developing countries, these nations have so far exerted little

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O pportunities and C hallenges for A rab C ountries 251-52 (B. Hoekman & J. Zarrouk eds., 2000). WIPO Copyright Treaty, adopted by the Diplomatic Conference on 20 Dec. 1996, WIPO Doc. CRNR/DC/94 (23 Dec. 1996); WIPO Performances and Phonograms Treaty, adopted by the Diplomatic Conference on 20 Dec. 1996, WIPO Doc. CRNR/DC/95 (23 Dec. 1996); see generally Pamela Samuelson, The U.S. Digital Agenda at WIPO, 37 Va. J. I n t ’l L. 369 (1997). WIPO, Standing Committee on the Law of Patents, Draft Substantive Patent Law Treaty, Ninth Session (Geneva, 12-16 May 2003), SCP/9/2, available at http://www.wipo.int/scp/ en/documents/session_9/pdf/scp9_2.pdf (visited 5 Jan. 2004) [hereinafter Draft Patent Law Treaty]. See also John H. Barton, Issues Posed by a World Patent System [this volume]. K eith E. M askus , I ntellectual P roperty R ights in the G lobal E conomy 109-42 (Institute for International Economics 2000) [hereinafter M askus , IP R i ghts ]. Id. at 199-232.

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influence on standard-setting exercises. Indeed, the progressive re-regulation of world markets for knowledge goods is not driven by a broad consensus of economic agents in the developed world. Rather, pressures to elevate IP norms are exerted by powerful private interests whose lobbying activities hold sway in legislative and regulatory initiatives in rich countries and international forums. These efforts are largely detached from the traditional goal of domestic IP systems to strike a balance between commercial profitability and public-interest concerns. To the extent that this imbalance makes it harder for entrepreneurs in developing countries to obtain inputs they need to compete in the production of knowledge goods, these countries could discover that the re-regulated global economy had in effect removed the rungs on which they could advance.10 As private interests take precedence over public concerns, moreover, we argue that the proliferation of exclusive rights could raise fundamental road­ blocks for the national and global provision of numerous other public goods, including scientific research, education, health care, biodiversity, and environ­ mental protection.11 The architects of the new system evidently have paid little attention to these issues, believing that a clear specification of strong property rights could establish appropriate incentives for private development of modalities to advance these and other public activities. In our view, the greater likelihood is that the privatization of public-interest technologies could in many cases erect competitive barriers, raise transactions costs and produce significant anti-commons effects, which tend to reduce the supply of public goods related to innovation as such, and also to limit the capacity of single states to perform essential police and welfare functions not otherwise available from a decentralized international system of governance.12 In Part I of this chapter, we set out some basic principles and observations regarding the provision of global public goods (GPG) and how that provision is implicated by the increasingly internationalized system of IP protection. In Part II, we evaluate legal and organizational impediments to the creation and diffusion of knowledge goods in a re-regulated global economy. In particular, we point out that unbalanced IP regimes in developed countries may be triggering counterproductive results and the concomitant risk that efforts to lock in the temporary competitive advantages of powerful technology cartels may raise costs for the developing world. 10 See, e.g., Commission on Intellectual Property Rights (CIPR), Integrating Intellectual Property Rights and Development Policy 8-9, 11-27 (2002) [hereinafter CIPR]. 11 See below text accompanying nn. 100-27. 12 In this article, we offer only an overview of essential concepts regarding global public goods and their interaction with IP protection. These issues are covered more extensively in other treatments. See, e.g., Peter Drahos, The Regulation of Public Goods [this volume]. For an extensive discussion of the concepts and problems of provision and distribution of such goods, see P roviding G lobal P ublic G oods : M anaging G lobalization (Inge Kaul et al. eds., United Nations Development Program 2003) [hereinafter P r ov i di n g GPG].

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In Part III, we consider the seemingly paradoxical possibility that, as develop­ ing countries experiment with their own IP regimes, and with associated regimes of competition law and innovation promotion, they might re-inject a needed global stimulus to dynamic competition. They could also contribute to the evolution of national and regional strategies to maintain the supply of other essential public goods that has been compromised by the crosscutting effects of efforts to privatize the creation and distribution of knowledge and information as such.

A.

International public goods and intellectual property rights

Global public goods might usefully be defined as those goods (including policies and infrastructure) that are systematically underprovided by private market forces and for which such under-provision has important international externality effects.13 The concept that a good is “public” stems from a combin­ ation of non-rivalry in consumption and nonexcludability in use.14 An item is nonrival if its use by one actor does not restrict the ability of another actor to benefit from it as well. A good is nonexcludable to the extent that unauthorized parties (“free riders”) cannot be prevented from using it. Classic examples include national defense, environmental protection, and investments in new technical information. Each of these endeavors generates results that are essentially nonrival and at least partially nonexcludable. In consequence, pri­ vate markets would not provide them at all or would do so at deficient levels relative to those demanded by citizens. A role for government thus arises to resolve this market failure. Those concerned about the efficient provision of public goods must address three fundamental issues.15 First, what are the optimal levels of the various goods to be supported? The answer depends on the underlying demand for such goods, and it may be difficult to reveal the preferences of citizens accurately. Second, how are the desired goods to be provided? Note that public policies may provide goods directly through taxes, subsidies, and public production. Alternatively,

13 An “externality effect” means that a failure to provide the public good imposes costs on third parties. For example, pollution arising in some countries may affect health status in others, or financial volatility in one nation may generate follow-on fragility elsewhere. In general, national policymakers are not likely to consider the well-being of foreign citizens in setting their own policies regarding public goods, which is why GPG require some form of global coordination. See P roviding GPG, above n. 12; Daniel G. Arce, Leadership and the Aggregation of International Collective Action, 53 O xford E c o n . P apers 114 (2001). 14 Economic analysis of public goods has a long standing in the literature. See Paul A. Samuelson, The Pure Theory of Public Expenditure, 36 R ev . E co n . & Stat . 387 (1954); T odd Sandler , C ollective A cti on : T heory and A pplications (1992). 15 See P roviding GPG, above n. 12, at 36-40.

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policies may indirectly provide public goods through such regulations as com­ petition policy, intellectual property rights, and price controls. For example, IPRs provide a second-best resolution of the excludability - also called appropriability - problem inherent in developing knowledge goods, which could otherwise be distributed at the marginal cost of making copies.16 To the extent that such rights elicit benefits from investment that exceed these social costs, they may be welfare enhancing over either market-driven solutions or pure public provision and distribution. A third question for policymakers is to determine the best jurisdictional level for providing public goods. As a general rule, the more localized the need, the narrower should be the jurisdiction. Thus, police, public schools, and voting processes are typically seen as local obligations under United States law and practice. National defense, macroeconomic policy, and foreign policy are federal obligations. How to organize the provision of GPG without adequate international mechanisms has become a difficult and pressing question in recent years. In practice, this function has been left largely to national or sub-national author­ ities. Because there are international spillover impacts, however, reliance on national provision likely fails to meet global needs efficiently or equitably. Approaches to providing GPG are required at the international level because national regimes generally disregard cross-border externalities and the result­ ing need for policy coordination. Many critical public goods have become increasingly global in their effects and supply needs.17 It is fair to say that, whereas analysis of the need for integrated systems has a long history, the actual organization, provision and distribution of GPG are at an early and critical stage. This situation is well illustrated by the emerging global system of IP protection. By long tradition, IPRs were constituted as a national policy prerogative, with relatively little attention paid to coordinating standards across countries. However, wide variations in national regulations can have significant international static and dynamic externalities.18 For example, recent economics literature points to several reasons why, acting on their own interests, countries would tend to protect new technology and product development at a level that is lower than would be globally optimal.19 The main reason is that some of the gains from innovation accrue 16 See M askus , IP R i ghts , above n. 8, at 36-38. 17 See P roviding GPG, above n. 12. 18 Keith E. Maskus, Regulatory Standards in the WTO: Comparing Intellectual Property Rights with Competition Policy, Environmental Protection, and Core Labor Standards, 1 W orld T rade R ev. 135 (2002). 19 Philip McCalman, National Patents, Innovation, and International Agreements, 11 J. I n t ’l T rade & D ev . 1 (2002); Gene M. Grossman & Edwin L.-C. Lai, International Protection of Intellectual Property (2002) (unpublished manuscript); Suzanne Scotchmer, The Political Economy of Intellectual Property Treaties (2002) (unpublished manuscript).

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to consumers and users in other countries, a benefit that framers of IPRs would not take into account in setting domestic standards. Countries with limited innovation capacities would logically free ride on foreign R&D investments by offering only limited technology protection. Some means of international coordination, perhaps within the ambit of the WTO, thus arguably would move global standards closer to the optimum by elevating incentives to invest. To be sustainable, however, this coordination should take into account the development and social needs of different economies. In principle, this object­ ive calls for a mix of differential and flexible standards, along with compensa­ tory side payments to induce free riders to adopt and enforce stronger IPRs. To be sure, there is some flexibility permitted developing countries in implementing the TRIPS standards.20 Yet, even the m inimum TRIPS require­ ments may overly burden poor nations in some circumstances. Furthermore, to benefit from residual flexibilities requires a degree of legal and regulatory expertise that may exceed the capacity of many countries for the foreseeable future. While the WTO Agreement offers some scope for implicit side pay­ ments through greater market access in developed countries for exports from developing countries, progress in achieving such access has been uneven.21 Thus, serious questions arise as to the sustainability of the attempt in TRIPS to resolve the international externality aspects of protecting new knowledge goods. An additional criticism leveled at the emerging IPR system is that the agenda for increasing protection has been articulated and pushed by rich-country governments effectively representing the commercial interests of a limited set of industries that distribute knowledge goods. Even within some developed countries, the tendency to espouse a protectionist IP agenda seems more a reflection of policy capture than a reasoned attempt to balance domestic needs, and the long-term effects on real innovation have yet to be ascertained. At the global level, the virtual inability to date of public-minded interest groups to affect this agenda raises further questions about the sustainability of TRIPS and other elements of the system.22 If the initial impetus for a trade-related intellectual property initiative was to prevent wholesale duplication of high-tech products, the TRIPS Agreement went well beyond that objective. Whether it strikes an appropriate balance between the needs of developers, users, and public authorities on a global scale remains open to question. At least in the short run, it seems likely to shift the 20 J.H. Reichman, From Free Riders to Fair Followers: Global Competition under the TRIPS Agreement, 29 N.Y.U. J. I n t ’l L. & P o l . 11 (1997) [hereinafter Reichman, Free Riders to Fair Followers]. 21 See, e.g., World Bank, Global Economic Prospects and the Developing Countries 2002, at 37-64 (2001). 22 See, e.g., id. at 145-49; Carlos M. Correa, Internationalization of the Patent System and New Technologies, 20 Wis. I n t ’l L.J. 523, 544-50 (2002).

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rules sharply in favor of IP developers,23 while the potential for long-term gains for the poorest countries seems cloudy at best.24 We have suggested that the emerging international IP system bears characteri­ stics of a GPG but that it seems flawed in execution and design. Moreover, this regime influences the ability of governments to provide other public goods. First, TRIPS constrains them from pursuing certain avenues for promoting imitation, innovation, and related social policies. Second, stronger private rights in infor­ mation may raise roadblocks against deploying new technologies that could help improve the provision of environmental protection, health care, biological diversity, and basic scientific research. These topics are examined below in Part II.

B.

Technology transfer after the TRIPS agreement25

The international flow of technological information and its successful integra­ tion into domestic production and management processes are central to the ability of firms in developing countries to compete in the global economy. Technological change is a principal source of sustained growth in living standards and is essential for the transformation and modernization of eco­ nomic structures. In most instances, developing countries find it cheaper and faster to acquire foreign technologies than to develop them with domestic resources. Such technologies may “spill over” into wider improvements in productivity and follow-on innovation in the domestic economy. International technology transfer (ITT) is a comprehensive term covering mechanisms for shifting information across borders and its effective diffusion into recipient economies. It refers to numerous complex processes, which range from innovation and international marketing of technology to its absorption and imitation. There are also many different channels through which technology may be transferred. One major conduit consists of trade in goods, especially capital goods and technological inputs. A second is foreign direct investment (FDI), which generally transfers technological information that is newer or more productive than that available from local firms. A third is technology licensing, which may occur either within firms or between unrelated firms. Licenses typically involve the purchase of production or distribution rights and the technical information and know-how required to exploit them.26 23 Philip McCalman, Reaping What You Sow: An Empirical Analysis of International Patent Harmonization, 55 J. I n t ’l E con . 161 (2001). 24 M askus , IP R i ghts , above n. 8; Pamela J. Smith, How Do Foreign Patent Rights Affect U.S. Exports, Affiliate Sales, and Licensesf, 55 J. I n t ’l E c on . 411 (2001). 25 This section draws on Keith E. Maskus, Encouraging International Technology Transfer, draff report to UNCTAD/ICTSD (2003) [hereinafter Maskus, Encouraging International Technology]. 26 lames R. Markusen & Keith E. Maskus, General Equilibrium Approaches to the Multinational Firm: A Review of Theory and Evidencey in H andbook of I nternational T rade 320

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There are also im portant non-market channels of ITT. Perhaps most sig­ nificant is the process of imitation through product inspection, reverse engin­ eering, and trial and error. A related mechanism is triggered when technical and managerial personnel leave a firm and start a rival firm based on informa­ tion learned in the original location. Still another means is to study informa­ tion available from patent applications. Thus, patents provide both a direct source of technology transfer, through FDI and licensing, and an indirect source through legally regulated disclosures. Indeed, “trade in ideas” is a significant factor in world economic growth, and developing economies could gain considerably more access to foreign technologies as international firms take out patents in their locations.27 Nevertheless, this benefit remains dependent on local abilities to learn from incoming technological information, and on the diffusion practices or strategies of technology-exporting firms. Much knowledge appears to be transferred through the temporary migra­ tion of students, scientists, and managerial and technical personnel to uni­ versities, laboratories, and conferences located mainly in the developed economies. Finally, technical information may be available from the public domain, making it free for taking, or from a research commons accessible with certain restrictions.28 International markets for trading technologies are inherently subject to failure due to distortions attributable to concerns about appropriability, prob­ lems of valuing information by buyers and sellers, and market power, all strong justifications for public intervention at both the domestic and global levels. Technology developers are interested in reducing the costs and risks of making transfers, along with protecting their rights to profit from them. They argue that effective protection and policy supports for markets are necessary to increase the willingness of innovative firms to provide knowledge about their production processes to firms in developing countries. Technology importers are interested in acquiring knowledge and products at minimal cost. Some observers argue that this objective is best met by limiting the exclusive rights to exploit technology.29

(K.Choi&J.Harriganeds.,2003);A. A rora et al. ,M arkets for T echnology : T he E conomics of I nnovation and C orporate Strategy 115M2 (2001). 27 Jonathan Eaton & Samuel Kortum, Trade in Ideas: Patenting and Productivity in the OECD, 40 J. I nt ’l E con . 251 (1996). 28 See, e.g.> J.H. Reichman & Paul Uhlir, A Contractually Reconstructed Research Commons for Scientific Data in a Highly Protectionist Intellectual Property Environment, 66 L aw & C ontemp . P robs . 315 (2003) [hereinafter A Contractually Reconstructed Research Commons]. See generally T he R ole of S cientific and T echnical D ata and I nformation in T he P ublic D omain (J.M. Esanu & Paul Uhlir eds., National Research Council 2003) [hereinafter R ole of S cientific and T echnical D ata ]. 29 Theory favoring IPRs may be found in I. Horstmann & J.R. Markusen, Licensing versus Direct Investment: A Model of Internalization by the Multinational Enterprise, 20 C an . J.

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While the close and complex relationships between intellectual property rights and ITT cannot be fully discussed here,30 it is useful to consider some of the main impacts, both positive and negative, that stronger global IPRs may have on international information flows. First, the preponderance of econo­ metric studies suggests that market-mediated flows of technology respond positively to the strengthening of patent laws across countries. This finding applies to international trade flows, especially in patent-sensitive industries and capital goods, as regards patents in middle-income and large developing countries.31 However, trade flows to poor countries seem unresponsive to patent laws. Similarly, recent studies of patents and inward FDI find positive impacts on more advanced and larger developing countries, but not on poor and small countries.32 Licensing volumes between U.S. firms and unrelated concerns in larger developing countries also expand with the rigor of local patent regimes.33 A reasonable interpretation of these findings is that there are threshold effects in market-based licensing. Economies with low incomes and limited technological capacity present neither attractive markets nor a competitive imitation threat. Because their intellectual property regimes are not par­ ticularly important in attracting ITT, it seems unlikely that the standards implemented in compliance with TRIPS will encourage additional technology transfer to the poorest countries. However, at higher incomes and techno­ logical capacities, IPRs become an im portant factor in this regard, even though they are only one of a list of variables that influence ITT. Other im portant factors include effective infrastructure, efficient governance, market size and growth, and proximity to suppliers and demanders.34 The literature also suggests that stronger patent rights may be expected to raise considerably the rents earned by international firms as patents become more valuable, with the result that firms in developing countries would pay

30

31 32 33

34

E c on . 464 (1987); A. Arora, Contracting for Tacit Knowledge: The Provision of Technical Services in Technology Licensing Contracts, 50 J. D ev. E con . 233 (1996). For a critical view, see Carlos M. Correa, Can the TRIPS Agreement Foster Technology Transfer to Developing Countries? [this volume], See, e.g., Keith E. Maskus, The Role of Intellectual Property Rights in Encouraging Foreign Direct Investment and Technology Transfer, 9 D uke J. C ompar . 8cI n t ’l L. 109 (1998); Kamal Saggi, International Technology Transfer: National Policies, International Negotiations, and Multilateral Disciplines, report to Commonwealth Secretariat (2003). See Smith, above n. 24; Keith E. Maskus 8c Mohan Penubarti, How Trade-Related are Intellectual Property Rights?, 39 J. I nt ’ l E con . 227 (1995). Smith, above n. 24; M askus , IP R i ghts , above n. 8. Guifang Yang 8c Keith E. Maskus, Intellectual Property Rights and Licensing: An Econometric Investigation, 127 W eltwirtschaftliches A rchiv 58 (2001); Michael Nicholson, Intellectual Property Rights and International Technology Transfer: The Impact of Industry Characteristics (2002) (unpublished manuscript, on file with U.S. Federal Trade Commission). Markusen 8c Maskus, above n. 26.

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m ore for the average inward protected technology.35 Expansion of breadth, scope, and length of patents would tend to amplify this result. Thus, there are countervailing impacts in middle-income countries: higher volumes of ITT but increased payments per unit of technology. Moreover, recipient countries are more likely to benefit where the supply of technologies is competitive and local firms are capable of adapting them effectively into production processes.36 While the evidence supports the claim that TRIPS standards could enhance ITT (at least into the larger and more advanced developing economies) through better performing technology markets, it should be weighed against national historic experience. Few now-developed economies underwent sig­ nificant technological learning and industrial transformation without the benefit of weak intellectual property protection.37 A good example is Japan, which from the 1950s through the 1980s pursued an industrial property regime that favored small-scale innovation, adaptation and diffusion, and the licensing of new technologies. Key features of this system included pre-grant disclosure, rapid opposition to patent grants, narrow patent claims, local reliance on utility models and advantages for licensing.38 Another example is South Korea, which in the 1970s encouraged domestic firms to acquire and adapt mature technol­ ogies available on international markets for purposes of developing local • • 39 innovation capacities. The extent to which the emerging global IP regime may be expected to enhance or impede ITT thus poses a complicated question. Answering it is made even harder because technology transfer across borders involves a mix­ ture of private activities and public measures of encouragement (or discour­ agement). This mixture varies in cost and efficiency by sector, country, and over time, which suggests that globalized IP protection could have both com­ plex and suboptimal effects unless accompanied by appropriate complemen­ tary policy approaches.40 The new system raises entry barriers for firms and competition in the poorest countries, while even the middle-income nations find their scope of action limited. Market distortions due to misuses of intellectual property rights 35 McCalman, above n. 19; The World Bank, above n. 21, at 132-34. 36 Maskus, Encouraging International Technology, above n. 25. 37 Z. Khan, Intellectual Property and Economic Development: Lessons from American and European History, Commission on Intellectual Property Rights, Background Paper 1A (2002); N. Kumar, Intellectual Property Rights, Technology and Economic Development: Experiences of Asian Countries, Commission on Intellectual Property Rights, background paper IB (2002). 38 Janusz A. Ordover, A Patent System for Both Diffusion and Exclusion, 5 J. E c o n . P ersp . 43 (1991). 39 Linsu Kim, Technology Transfer and Intellectual Property Rights: Lessons from Korea’s Experience, UNCTAD/ICTSD Working Paper (2002). 40 M askus , IP R i ghts , above n. 8, at 143-60.

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may also be harder to detect or police in developing than in developed countries. Moreover, new or relatively untested forms of intellectual property protection that choke access to upstream information inputs - including scientific and technical data as such - could narrow access to the research commons and limit other transfer mechanisms, with incalculable long-term effects on ITT as it used to occur.41 In our view, governments in developing countries need to be pro-active in ensuring that the net effect of expanded IP protection is to enhance access to technology and to encourage its domestic adaptation and diffusion. Potential gains in dynamic competition are reason enough for this approach. An add­ itional important factor is that tightened protection raises significant questions regarding the ability to access international technology and information to improve the provision of broader public goods. In the rest of this article we explore these issues in more detail.

II.

Re-regulating the global marketplace to protect knowledge as a private good

One paradox of an increasingly global economy is that it ultimately requires collective action to further enhance the social benefits of free competition in an unruly marketplace that the General Agreement on Tariffs and Trade (GATT) and the Agreement Establishing the World Trade Organization (WTO) have progressively liberated from state-imposed barriers to trade.42 Who should take responsibility for this regulatory task in the absence of any duly constituted global governance authority and how to identify measures that would actually promote global welfare without creating disguised barriers to trade remain daunting problems for a decentralized international system.43

41 See, e.g., Rebecca S. Eisenberg, Bargaining over the Transfer of Proprietary Research Tools: Is this Market Failing or Emerging?, in E x p a n d i n g t h e B o u n d a r i e s o f I n t e l l e c t u a l P r o p e r t y : I n n o v a t i o n P o l i c y f o R T h e K n o w l e d g e S o c i e t y 223 (Rochelle Dreyfuss et al. eds., 2001) [hereinafter E x p a n d i n g t h e B o u n d a r i e s o f IP]; Arti K. Rai, Proprietary Rights and Collective Action: The Case of Biotechnology Research with Low Commercial Value [this volume]; J.H. Reichman, Database Protection in a Global Economy, 2002 R e v u e I n t e r n a t i o n a l e d e D r o i t E c o n o m i q u e 455 (2002) [here­ inafter Reichman, Database Protection]; J.H. Reichman & Pamela Samuelson, Intellectual Property Rights in Data ?, 50 V a n d . L. R e v . 51 (1997). 42 Multilateral Agreements on Trade in Goods, 15 Apr. 1994, WTO Agreement, Annex 1A, 33 I.L.M. 1154 (1994) [hereinafter GATT 1994]; WTO Agreement, above n. 3. 43 While the extent and degree of regulation that is needed remains controversial, even the most laissez-faire economists recognize problems attributed to market failures, market distortions, and other factors that decrease overall efficiency and welfare. See, e.g., M a s k u s , IP R i g h t s , above nn. 8, 18. Others stress concerns about potential “races to the bottom” in regulatory standards. See, e.g., J o s e p h S t i g l i t z , G l o b a l i z a t i o n a n d i t s D i s c o n t e n t s (2002).

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Nowhere are these tensions more acute than in the knowledge goods sector of the world economy, a sector that is the most dynamic of all in terms of potential growth and yet partially resistant to any consensus-based economic analytical framework. Here, according to classical intellectual property theory, knowledge begins life as a public good available to all and as an input into the generation of additional knowledge. It subsequently becomes artificially scarce as states grant IPRs to stimulate investment in the production of private knowledge goods. The resulting tensions between the long-term benefits of these legal monopolies, which tend to elevate the level of competition over time,44 and the social costs of restraining competition in the meanwhile45 are recognized in Article XX(d) of the GATT itself.46 This provision, which gen­ erally assigns responsibility for enacting IPRs to the WTO Members’ domestic legislatures, admonishes them to observe a criterion of reasonable necessity and to avoid “disguised restriction [s] on international trade.”47

A.

Legal and organizational im pedim ents to the creation and diffusion o f knowledge goods

Drawing the lines between knowledge goods accessible to all and those subject to private property rights has always been a delicate, controversial, and economic­ ally uncertain task in even the most developed economies. Periods of relatively weak and relatively strong levels of protection have alternated over time, often at fairly short intervals, with little consensus in law or economics about the cumulative lessons to be learned. How to ensure that the social benefits of maximizing investment in current innovation are not offset by the social costs of deterring future innovation and impeding current competition is no clearer today than it was 50 years ago.48 The question has become especially difficult to 44 Lehman, The Theory of Property Rights and the Protection of Intellectual and Industrial Property, 16 I n t ’ l R e v . I n d u s . P r o p . & C o p y r i g h t ( I I C ) 525 (1985); Edmund Kitch, Nature and Function ofthe Patent System, 30 J.L. 8c E c o n . 265 (1977). 45 Hanns Ullrich, Expansionist Intellectual Property Protection and Reductionist Competition Rules: A TRIPS Perspective [this volume]. 46 GATT 1994, above n. 42, art. XX(d). 47 Id. This provision is, of course, subject to subsequent treaties, notably the TRIPS Agreement, which further limits states’ rights. Nevertheless, the pro-competitive mandate of this provision, taken in the larger context of reserved powers under GATT art. XX generally, remains of cardinal importance to the meshing of private and public goods in further international regulation. See below text accompanying nn. 124-25. 48 See, e.g., J a m e s B o y l e , S h a m a n s , S o f t w a r e a n d S p l e e n s : L a w a n d t h e C o n s t r u c t i o n o f t h e I n f o r m a t i o n S o c i e t y 25-46 (1996) [hereinafter B o y l e , S h a m a n s , S o f t w a r e 8c S p l e e n s ] ; John H. Barton, The Economics of TRIPS: International Trade in Information-Intensive Products, 33 G e o . W a s h . I n t ’ l L. R e v . 473 (2001); Roberto Mazzoleni 8c Richard R. Nelson, Economic Theories About the Benefits and Costs of Patents, 32 J. E c o n . I s s u e s 1031 (1998).

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answer with regard to newer, cutting-edge technologies that obstinately refuse to behave like the traditional technologies of the industrial revolution.49 Today, moreover, the regulation of knowledge goods in national markets impinges on the provision of other public goods - health, education, scientific research, agriculture and the environment - in ways that were virtually unknown to previous generations. The centrality of innovation in dynamic developed economies has fostered a process of “enclosure” and privatization that increasingly threatens the provision of those other public goods that citizens take for granted and identify with the very exercise of state sovereignty.50 When these unresolved tensions between public and private interests in the production of knowledge goods are transferred from their territorial base in nation states to the nascent world market, they become far more acute. This follows because the stakes are much higher,51 empirical evidence with which to assess the conflicting claims of high and low protectionists remains scarce, and nations have varying economic interests. The adverse effects of these uncertainties are then made worse by another paradox of the interna­ tional trading system that one of us emphasized at the start of the Uruguay Round. Here we refer to the tendency of rich countries, that traditionally urged free competition on the rest of the world, to demand strong legal monopolies to protect private knowledge goods in international trade, and the tendency of poor countries to want unbridled competition with respect to these same knowledge goods, most of which are produced at great cost in the technology-exporting countries.52 1.

Preserving temporary competitive advantages with international intellectual property standards

To understand why new distortions in the global market for knowledge goods seem to crop up faster than the old ones disappear, it is well to recognize that 49 See, e.g., Arti K. Rai, Fostering Cumulative Innovation in the Biopharmaceutical Industry: The Role of Patents and Antitrust, 16 B e r k e l e y T e c h . L.J. 813 (2001); James Boyle, Enclosing the Genome: What the Squabbles over Genetic Patents Could Teach Us, in P e r s p e c t i v e s o n P r o p e r t i e s o f t h e H u m a n G e n o m e P r o j e c t 97 (F. Scott Kieff ed., 2003); J.H. Reichman, Saving the Patent Law from Itself: Informal Reflections on Systemic Problems Afflicting Developed In tellectual Property Regimes, in P e r s p e c t i v e s o n P r o p e r t i e s o f t h e H u m a n G e n o m e P r o j e c t , above, at 289 [hereinafter Reichman, Saving the Patent Law from Itself]. 50 See, e.g., James Boyle, The Second Enclosure Movement and the Construction of the Public Domain, 66 L a w 8c C o n t e m p . P r o b s . 33 (2003) [hereinafter Boyle, Second Enclosure Movement]. 51 See, e.g., Joseph Stiglitz, Knowledge as a Public Good, in G lobal P ublic G oods : I nternational C ooperation in the 21 st C entury (Inge Kaul et al. eds., 1999); Paul David, The Political Economy of Public Science, in T he R egulation o f S cience and T echnology 38 (Helen Lawton Smith ed., 2001). 52 See, e.g., J. H. Reichman, Intellectual Property in International Trade: Opportunities and Risks of a GATT Connection, 22 V a n d . J. T r a n s n a t ’ l L. 747 (1989).

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there is even less consensus among economists about how to regulate the global market for knowledge goods than exists in successful national markets, and that these uncertainties are aggravated by inequalities between rich and poor nations. The need to set standards ex ante - in order to reduce the public good character of facts, ideas, discoveries, and research results in favor of developing private knowledge goods - then compounds all the governance problems that beset transnational regulatory exercises in general.53 There is, for example, no expert body of legal and economic scholars charged with disinterested analysis of these issues, or with the collection of systematic inputs from all affected interests. The one agency entrusted with managing intellectual property rights at the international level - the World Intellectual Property Organization (WIPO) - has recently interpreted its legislative mandate as one of progressively elevating intellectual property rights throughout the world. Whether this strategy actually benefits innovation or the world’s inhabitants seems to count for little in implementing this mandate.54 Even if this “democratic deficit” were overcome, differences of resources, institutional capabilities, and organization could still combine to create both a knowledge gap and a power gap at the regulatory center owing to the inex­ perience and ineffectiveness of the developing countries as a whole to manage their interests in this sector. Most of these states do not yet treat intellectual property as an integral part of national or regional systems of innovation. They are compliance oriented, not given to interagency review of the issues, but rather prone to leaving them to their intellectual property bureaus and to bartering concessions in this area for advantages in other areas, without any solid basis for calculating the true costs and benefits of these tradeoffs.55 Most developing countries lack access to impartial technical assistance, and must rely instead on assistance funded by sources whose interests are not necessarily in line with theirs.56 They are also advised by nongovernmental organizations (NGOs), which have managed to produce an impressive array of 53 See, e.g., Paul David, Koyaanisqatsi in Cyberspace: The Economics of an “Out-of-Balance” Regime of Private Property Rights in Data and Information, [this volume]; Mark Lemley, Ex Ante versus Ex Post Justification for Intellectual Property, working paper (2003); Frederick Abbott, The Future oflPRs in the Multilateral Trading System, in T r a d i n g i n K n o w l e d g e 36, 44 (C. Bellman et al. eds., 2003) (stressing indeterminacy in the economic analysis of TRIPS-related issues owing to lack of objective data). 54 See, e.g., Carlos Correa, Formulating Effective Pro-development National Intellectual Property Policies, in T r a d i n g i n K n o w l e d g e , above n. 53, at 209, 214 (criticizing WIPO Secretariat for emphasizing “the benefits and largely ignoring the costs of IPR protection” and generally failing “to present the range of options available to developing countries”). See generally Sisule F. Musungu 8c Graham Dutfield, Multilateral Agreements and a TRIPS-plus World: The World Intellectual Property Organization (WIPO), Quaker U.N. Office, Geneva, TRIPS Issues papers No. 3 (2003). 55 See, e.g., Correa, above n. 54. For the situation prior to 1994, see J. W a t a l , above n. 4. 56 See Musungu & Dutfield, above n. 54; papers presented at UNCTAD/ICTSD Second Bellagio Conference, 17-20 Sept. 2003.

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public-oriented outcomes in an increasing number of forums.57 Yet, good as they sometimes are in tactical maneuvers on well-defined issues, such as public health, the NGOs5contribution cannot compensate for the general inability of the developing countries to integrate multilateral negotiations into broader national and regional innovation strategies.58 Those few developing countries that have built some capacity to participate in standard-setting exercises may run into coercive pressures from governments and corporations whose interests they challenge. Increasingly, such pressures are exerted in bilateral, unequal bargaining situations in which ever-higher IPRs are demanded without regard to the legal or political consequences of undermining the basic MFN principles of the GATT itself.59 In effect, this regulatory gap at the center is left at the mercy of powerful state actors representing the interests of corporate clients at the international level. These clients, which may constitute a de facto “knowledge cartel,”60 control the distribution of a disproportionately large share of existing technologies without necessarily being particularly innovative themselves. Their membership typically does not include the smalland medium-size entrepreneurs, who drive innovation in the United States, nor does it include the universities and public research institutes who depend on constant access to facts, data, discoveries, and the research results of others. Because the members of this knowledge cartel depend on sales of existing innovation, they push their governments to regulate the global market in ways that lock in temporary competitive advantages without necessarily advancing the global public interest in innovation, competition, or the provision of complementary public goods. Indeed, representatives of the global public interest are unlikely to be seated at the table where hard-law negotiations take place.61 W ithout a legitimizing governance process that adequately represents all stake­ holders, the baseline need to support both public and private interests in the transnational market for knowledge goods thus risks being compromised in at least two ways. First, there is a pronounced risk that a substantial component of the recently liberated global trade market will become re-regulated through IPRs to reflect dubious practices in developed markets for knowledge goods that may actually 57 See Laurence R. Heifer, Regime Shifting: The TRIPS Agreement and New Dynamics of International Intellectual Property Lawmaking, 29 Y a l e J. I n t ’ l L. 1 (2004). 58 Cf John Barton, Integrating IPR Policies in Development Strategies, in T r a d i n g i n K n o w l e d g e , above n. 53, at 57, 60-64. 59 See Frederick M. Abbott, Trade Diplomacy, the Rule of Law and the Problem ofAsymmetric Risks in TRIPS, Quaker United Nation Office Occasional Paper 13 (Sept. 2003), available at http://www.geneva.quno.info/pdf/OP13 Abbottfindft rev_l.pdf (visited 1 May 2003); Drahos, above n. 5. 60 “The difficulty of entry into markets dominated by multinational oligopolies is thus compounded by the international IP system.” Barton, above n. 58, at 61. See generally, Hanns Ullrich, above n. 45. 61 See Heifer, above n. 57 (distinguishing hard and soft law processes).

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hamper both innovation and competition in the long run. Second, there is the further risk that an over-regulated market for knowledge goods could com­ promise the ability of nation states to supply other public goods that only they can provide in a decentralized world economy. 2.

Instability and loss of balance in developed intellectual property regimes

The drive to stamp out free-riding practices thus tends to obscure serious problems engendered by the radical transformation of IP policies that has occurred in developed countries. This transformation constitutes a prolonged effort to strengthen the protection of investors in cutting-edge technologies, especially computer programs and biogenetically engineered products, which fit imperfectly within the classical patent and copyright paradigms.62 Under the classical IP system, as implemented in the United States through the mid-1960s, for example, the strong legal monopolies of the patent law protected only a narrow layer of discontinuous inventions that fell outside the technical trajectories guiding the day-to-day application of normal scientific discoveries.63 Entrepreneurs constrained to innovate in a highly competitive economy looked to the liability rules of unfair competition law, especially trade secret law, to provide natural lead time in which to recoup their investments, and to the rules of trademark law to maintain a foothold in the market based on their reputations as producers of quality goods.64 Because copyright law excluded industrial products in virtually every form,65 their producers could not hope to avoid the rigors of competition by masquerading as authors of literary and artistic works. As for the rest, vigorously enforced antitrust laws, supplemented by a robust doctrine of patent misuse, rid the market of deleter­ ious patent pools and other barriers to entry and, in the view of Professors Mowery and Rosenberg, by disciplining Bell Labs and IBM, paved the way for the technological leaps of the 1970s and 1980s.66

62 See generally J.H. Reichman, Legal Hybrids between the Patent and Copyright Paradigms, 94 C olum . L. R ev. 2432 (1994); J.H. Reichman, Charting the Collapse ofthe PatentCopyright Dichotomy, 13C ardozo A rts &E n t .L.J. 475 (1995); see also J ames B oyle, Shamans , S oftware , & S pleens , above n. 48, at 119-44; Pamela Samuelson et al., A Manifesto Concerning the Legal Protection of Computer Programs, 94 C olum . L. R ev . 2308 (1994). 63 See, e.g., Nelson and Merges, On the Complex Economics of Patent Scope, 90 C o l u m . L. R ev . 839 (1990). 64 Samuelson & Scotchmer, The Law and Economics of Reverse Engineering, 111 Yale L. J. 157 (2003). 65 Baker v. Selden, 101 U.S. 99 (1879); Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225 (1964); Compco Corp. v. Day-Brite Lighting, Inc., 376 U.S. 234 (1964). 66 David S. Mowery & Nathan Rosenberg, The U.S. National Innovation System, in N ational I nnovation S ystems 29-75 (Richard R. Nelson ed., 1993).

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This classical system of intellectual property protection obliged innovators to look to the public domain for the basic inputs of most technological development. They took the availability of vast amounts of government­ generated or government-funded scientific data and technical information for granted; and they assumed that facts and data generated by non-confidential public research endeavors at universities and other nonprofit institutions would become public goods available to all.67 Investors also assumed that sub-patentable innovations could be reverse-engineered by proper means that would endow competitors with improvements and lower cost modes of production. They further assumed that even patented inventions would enter the public domain at fairly short intervals and that it was not inordinately difficult to work around these inventions if the commercial payoffs justified the effort. However, basic underlying scientific discoveries would remain freely available. If we now fast forward to a descriptive analysis of the current U.S. system, one could hardly imagine a starker contrast. The United States Court of Appeals for the Federal Circuit, entrusted by Congress to manage the patent system, has deliberately remolded that system to protect investment as such, rather than discontinuous technical achievements that elevate the level of competition. The patent system has accordingly degenerated to protecting incremental slivers of know-how applied to industry, including those very business methods that were formerly the building blocks of the free-enterprise economy.68 The copyright system, expanding in the same direction, now confers vir­ tually perpetual protection on computer software and digital productions of all kinds, and it encourages creators to surround even their unprotectable tech­ nical ideas and components with untouchable electronic fences.69 Once sur­ rounded by these fences, even the underlying facts and data may be put off limits; while one-sided electronic adhesion contracts may override public interest exceptions favoring education and public research, and they may even prohibit reverse engineering by honest means.70 67 Reichman & Uhlir, above n. 28 (citing authorities); see also Rebecca Eisenberg, Proprietary Rights and the Norms of Science in Biotechnology Research, in T h e E c o n o m i c s o f S c i e n c e A n d I n n o v a t i o n 357 (The International Library of Critical Writings in Economics, 117:1) (P.E. Stephan & D.B. Audretsch eds., 2000) (originally published under the same title in 97 Y a l e L.J. 177 (1987)). 68 State St. Bank & Trust Co. v. Signature Fin. Group, Inc., 149 F.3d 1368 (Fed. Cir. 1998); Reichman, Saving the Patent Law from Itself above n. 49. 69 Digital Millennium Copyright Act of 1998, 17 U.S.C. §§ 1201-1205 (2000) [hereinafter DMCA]; Pamela Samuelson, Mapping the Digital Public Domain: Threats and Opportunities, 66 L a w & C o n t e m p . P r o b s . 147 (2003). 70 Bowers v. Baystate Techs., 320 F.3d 1317 (Fed. Cir. 2003); J.H. Reichman & Jonathan Franklin, Privately Legislated Intellectual Property Rights: Reconciling Freedom of Contract with Public Good Uses of Information, 147 U. P a . L. R e v . 875 (1999); Nina Elkin-Koren, A Public-Regarding Approach to Contracting Over Copyrights, in E x p a n d i n g t h e B o u n d a r i e s o f IP, above n. 41, at 191; Jane C. Ginsburg, U.S. Initiatives to Protect Works of Low Authorship, in E x p a n d i n g t h e B o u n d a r i e s o f IP, above n. 41, at 55.

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As hybrid IP regimes multiply to fill still other perceived gaps in the system, there are virtually no products sold on the general products market that do not come freighted with a bewildering and overlapping array of exclusive property rights that discourage follow-on applications of routine technical know-how.71 Weak enforcement of antitrust laws then further reinforces the barriers to entry erected upon this thicket of rights, while the need to stimulate and coordinate investment in complex innovation projects justifies patent pools, concentra­ tions of research efforts, and predatory practices formerly thought to constitute misuses of the patent monopoly.72 The end results of this process, which James Boyle has felicitously called the “Second Enclosure Movement,”73 are not fully known, but the problems it is already causing for developed systems of innovation shed light on the larger problems facing the international economy. The availability of upstream data and scientific information from the public domain is shrinking at the very m oment when advances in Internet technologies make it possible to link both centrally located and distributed data repositories as never before. A growing thicket of rights surrounds gene fragments, research tools, and other upstream inputs of scientific research, and the resulting transaction costs impede and delay research and development undertaken in both the public and private sectors.74 Lost research and competitive opportunities appear to be mush­ rooming as exchanges of even government-funded research results become problematic.75 As well-known economists point out, complex research and development projects at every level - whether public or private - will become increasingly impracticable if too many owners of too many rights have to be tithed along the way.76

71 See J.H. Reichman, O f Green Tulips and Legal Kudzu: Repackaging Rights in Subpatentable Innovation, 53 V a n d . L. R e v . 1743 (2000) [hereinafter Reichman, Green Tulips]. 72 See, e.g., Ullrich, above n. 45. 73 Boyle, Second Enclosure Movement, above n. 50. See generally Duke Symposium on Intellectual Property Rights and the Public Domain, 66 L a w & C o n t e m . P r o b s 1 (2003). 74 See, e.g., Michael A. Heller & Rebecca S. Eisenberg, Can Patents Deter Innovation? The Anticommons in Biomedical Research, 280 S c i e n c e 698 (1998); Rai, above n. 41; Rebecca S. Eisenberg, Bargaining over the Transfer of Proprietary Research Tools, in E x p a n d i n g t h e b o u n d a r i e s o f IP, above n. 41; see also Walter W. Powell, Networks of Learning in Biotechnology: Opportunities and Constraints Associated with Relational Contracting in a Knowledge-Intensive Field, in E x p a n d i n g t h e B o u n d a r i e s o f IP, above n. 41. 75 See Reichman 8c Uhlir, above n. 28. 76 See, e.g., Richard Nelson, Linkages Between the Market Economy and the Scientific Commons [this volume]; Paul A. David, A Tragedy of the Public Knowledge “Commons”? Global Science, Intellectual Property and the Digital Technology Boomerang, SIEPR Discussion Paper No. 00-02, Stanford Institute for Economic Policy Research (2000), available at http://siepr.stanford.edu/papers/pdf/00-02.html (last visited 8 Jan. 2004); Paul David & Michael Spence, Towards Institutional Infrastructures for E-Science: The Scope ofthe Challenge, O x f o r d I n t e r n e t I n s t i t u t e (14 Sept. 2002).

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Meanwhile, the sharing norms of science and the principle of open access to data have begun to break down as universities commercialize publicly funded research products. New intellectual property rights in collections of data adopted in the E.U. and pending adoption in the U.S.77 - further undermine these norms by enabling scientists, universities, and entrepreneurs to retain control of data and technical information even after the publication of research results in articles or after public disclosure for purposes of filing patent applications on such results.78 These and other social disutilities cast light on the problems afflicting the international system and raise serious questions about its future prospects. They represent the unintended consequences of an excess of regulation and interference with market forces. In allowing large multinational firms to lock in temporary advantages,79 the IP system could discourage innovation by those same small and medium-sized firms that depend on access to public domain inputs for developing applications of new technologies. In this environment, economists fear that the ratcheting up of intellectual property standards will boomerang against the capacity to innovate in devel­ oped countries.80 They ask whether the breakthrough inventions of the recent past would still be possible in a protectionist environm ent and in the presence of a shrinking public dom ain.81 They make us question whether future innovation will flourish in a dynamic, transnational system of innovation liberated from excessive governmental regulation or flounder in a re-regulated, ever more anti-competitive market that increasingly resembles the top-down economies that trailed behind U.S. high-tech industries in the past. 3.

Exporting a dysfunctional system to the rest of the world?

Logically, the shift to a high-protectionist agenda in the developed countries should spark a cautious and skeptical response from the rest of the world for a number of reasons. First, the TRIPS Agreement itself, coupled with the WIPO 77 Directive 96/9/EC of the European Parliament and of the Council on the legal protection of databases, 1996 OJ. (L 77), at 20 (27 Mar. 1996) [hereinafter E.C. Database Directive]; H.R. 3261, 108th Cong. (1st Sess. 2003); see generally Reichman, Database Protection, above n. 41. 78 See, e.g.> Reichman 8c Uhlir, above n. 28; Royal Society, Keeping Science Open: The Effects of Intellectual Property Policy on the Conduct of Science, Policy Doc. 02/03 (Apr. 2003) [hereinafter Royal Society Report]. 79 See, e.g., P e t e r D r a h o s & J o h n B r a i t h w a i t e , I n f o r m a t i o n F e u d a l i s m (2002); S u s a n K. S e l l , P o w e r a n d I d e a s : N o r t h - S o u t h P o l i c i e s o f I n t e l l e c t u a l P r o p e r t y a n d A n t i t r u s t (1998); S u s a n K. S e l l , P r i v a t e P o w e r , P u b l i c L a w : T h e G l o b a l i z a t i o n o f I n t e l l e c t u a l P r o p e r t y R i g h t s (2003). 80 See David, above n. 76 and accompanying text. Professor David speaks explicitly of a “boomerang” effect. Id. 81 See above nn. 73-76; Graeme B. Dinwoodie 8c Rochelle Cooper Dreyfuss, WTO Dispute Settlement and the Preservation of the Public Domain of Science under International Law [this volume].

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Copyright Treaties of 1996,82 foreshadowed a revolutionary transformation of the legal and economic infrastructures in developing countries, and they need a lengthy period of time in which to digest and adjust to these reforms. These countries can hardly absorb the unknown social costs of new intellectual prop­ erty burdens when the real costs of the last round of legislative initiatives are still making themselves felt.83 Yet, this reality has not attenuated the pressures for TRIPS-plus standards in both multilateral and bilateral forums. A second reason for diffidence in developing countries is the scholarly debate that the high-protectionist agenda has generated in both the United States and Europe, and the corresponding fears that this agenda could harm investment and research-based innovation in the long run. If the critics prove right, then the last thing the developing countries should want to do is to emulate these policies. Consider, for example, that the drive to further harmonize the international m inimum standards of patent protection at WIPO84 has occurred at the very time when the domestic standards of the United States and the operations of its patent system are under critical assault. That country's patent system has been subject to scathing criticism in numerous law journal articles,85 in the scientific literature,86 and even in magazines of general circulation.87 New proposals to reform both the domestic and international patent systems appear frequently, and commissions to study or propose reform are operating on numerous fronts.88 How, under such circumstances, could it be timely to harmonize 82 See above nn. 3, 6. 83 See CIPR, above n. 10, at 155-57. 84 WIPO Draft Patent Treaty, above n. 7. 85 See, e.g., Arti K. Rai, Engaging Facts and Policy: A Multi-Institutional Approach to Patent System Reform, 103 C o l u m . L. R e v . 1035 (2003); Jay P. Kesan, The Private and Social Costs of the Patent System: Why Bad Patents Survive in the Market and How We Should Change, working paper (2004) (citing articles by Thomas, Leung, Quillen and Ogden, Baird and others); Jay P. Kesan, Carrots and Sticks to Create a Better Patent System, 17 B e r k e l e y T e c h . L.J. 763 (2002); Robert Merges, As Many as Six Impossible Patents before Breakfast: Property Rights for Business Concepts and Patent System Reform, 14 B e r k e l e y T e c h . L.J. 577 (1999); John Allison & Mark Lemley, The Growing Complexity ofthe United States Patent System, 82 B o s t o n U. L. R e v . 77 (2002). 86 See, e.g., Heller & Eisenberg, above n. 74; John K. Barton, Reforming the Patent System, 287 S c i e n c e 1933 (2000); see also Eisenberg, Bargaining over the Transfer of Proprietary Research Tools, above n. 41; John P. Walsh et al., Effects of Research Tool Patents and Licensing on Biomedical Innovation, in P a t e n t s i n t h e K n o w l e d g e - B a s e d E c o n o m y 285-340 (W.M. Cohen & S.A. Merrill eds., National Research Council 2001). 87 James Gleick, Patently Absurd, N e w Y o r k T i m e s M a g a z i n e , 12 Mar. 2000, at 44. 88 See, e.g., John K. Barton, above n. 86; Rai, above n. 85; Paul Edward Geller, An International Patent Utopia?, 25 E.I.P.R. 515 (2003). At the time of writing, both the Federal Trade Commission and the National Research Council were conducting studies of the U.S. patent system with a view to launching reform proposals. See also Mark A. Lemley, Rational Ignorance at the Patent Office, 95 Nw. U. L. Rev. 1 (2001) (finding that poor patent examination procedures save resources because few patents are actually litigated or licensed). Taken to their logical conclusion, Prof. Lemley’s findings would ironically suggest that an efficient worldwide patent regime should revert to the

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and elevate international standards of patent protection - even if that were demonstrably beneficial - when there is so little agreement in the U.S. itself on how to rectify a dysfunctional apparatus that often seems out of control? Even in the courts themselves, which, in the United States, still operate at some degree of removal from lobbying and other political pressures, there are elements of change, uncertainty, and disarray that do not bode well for an international standard-setting exercise. In the past few years, for example, the U.S. federal courts have significantly changed the way patent claims are inter­ preted; narrowed the doctrine of equivalents in patent infringement actions; practically eliminated the research exemption under which universities had operated for 50 years or more; expanded patent protection of computer programs in ways that both the domestic and European authorities had pre­ viously opposed; and opened patent law to the protection of business methods in ways that have disrupted settled commercial activities.89 These events should make U.S. authorities cautious about surrendering the power to undertake adjustments in the future, and policymakers in the rest of the world should become wary of locking themselves into the untested results of ad hoc judicial tinkering in a single country.90 It is therefore disconcerting to think of “harmonizing” the international patent system at such a time, when the risks of unintended harm to worldwide competition seem high, and when the only basis for a consensus on harmonization might be to squeeze out the remaining flexibilities in the TRIPS Agreement. One can paint a similar picture with respect to copyright and related rights laws. Here, the developing countries, acting in concert with user interests in the developed countries, managed to ensure that the 1996 WIPO treaties govern­ ing works transmitted in digital media continued to allow certain privileged uses and exceptions permitted by prior law.91 Notwithstanding this outcome at the

registration system previously used in France and Italy, and not the examination system derived from U.S. and German practice. 89 Markman v. Westview Instruments, Inc., 52 F.3d 967 (Fed. Cir. 1995), a ff’d, 917 U.S. 370 (1996); Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 234 F.3d 558 (Fed. Cir. 2000), vacated by 122 S. Ct. 1831 (2002); Duke v. Madey, 307 F.3d 1351 (Fed. Cir. 2002); In re Alappat, 33 F.3d 1526 (1994); State St. Bank & Trust Co. v. Signature Fin. Group, Inc., 149 F.3d 1368 (Fed. Cir. 1998). See generally Gerald Sobel, Competition Policy in Patent Cases and Antitrust, in P e r s p e c t i v e s o n P r o p e r t i e s o f t h e H u m a n G e n o m e P r o j e c t , above n. 49, at 23, 26-41 (“The Federal Circuit's transformation of the law”). 90 Cf, e.g., Ruth L. Okediji, Public Welfare and the Role of the WTO: Reconsidering the TRIPS Agreement, 1 7 E m o r y I n t ’ l L. R e v . 8 2 1 , 8 2 2 - 2 5 (2 0 0 3 ). 91 See, e.g., WIPO Copyright Treaty, above n. 6, arts. 8, 10; Agreed Statements Concerning the WIPO Copyright Treaty, Concerning Article 10, adopted by the Diplomatic Conference on 20 Dec. 1996, WIPO Doc. CRNR/DC/96 (23 Dec. 1996); Samuelson, above n. 6; Ruth Okediji, Development in the Information Age: Issues in the Regulation of Intellectual Property Rights, Computer Software and Electronic Commerce, UNCTAD/ ICTSD (2003).

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international level, the United States and the European Union both ignored these provisions and cut well back on permitted uses in their domestic implementa­ tion laws;92 and they have been pressing developing countries for still higher standards of protection in bilateral negotiations. Yet, these domestic initiatives to expand and strengthen copyright protec­ tion of works transmitted over digital telecommunications networks have generated popular resistance to copyright norms in the United States as well as strenuous academic concerns about free competition, free speech, privacy, and the need to ensure access to inputs for future creative works.93 Further harmonization efforts in this climate thus am ount to a gamble from which bad decisions and bad laws are far more likely to emerge than good laws that appropriately balance public and private interests. There are still other risks of participating in further harmonization exer­ cises that are even more sobering. First, certain new initiatives - such as the European database protection right94 - could radically subvert the classical intellectual property tradition built around patents and copyrights, with unintended consequences that could elevate the costs of research and develop­ ment across the entire knowledge economy. While pressures to adopt similar legislation in the United States mount, legal and economic analysis of database protection as a generator of anti-competitive effects and of potential obstacles to innovation also grow more refined and alarming.95 Such premature initiatives could undermine sound economic development everywhere, and action in this regard at the international level would require great caution under the best of circumstances. 96 In this climate, it is difficult to see that developing countries have anything to gain from new efforts to strengthen IP standards. As matters stand, these international standard-setting exercises are not being conducted either to 92 DMCA, above n. 69; Directive 2001/29/EC of the European Parliament and of the Council on the harmonization of certain aspects of copyright and related rights in the information society, 2001 O.J. ( L 167) 10 (22 May 2001); s e e g e n e r a l ly J e s s i c a L i t m a n , D i g i t a l C o p y r i g h t ; P r o t e c t i n g I n t e l l e c t u a l P r o p e r t y o n t h e I n t e r n e t (2001). 93 See, e.g., Yochai Benkler, Through the Looking Glass: Alice and the Constitutional Foundations of the Public Domain, 66 L a w & C o n t e m p . P r o b s . 173 (2003); Samuelson, above n. 69. See generally T h e D i g i t a l D i l e m m a : I n t e l l e c t u a l P r o p e r t y i n t h e I n f o r m a t i o n A g e (National Research Council 2000). 94 E.C. Database Directive, above n. 77. 95 See, e.g., David, above n. 53; Royal Society Report, above n. 78. See also Jacqueline Lipton, Balancing Private Rights and Public Policies: Reconceptualizing Property in Databases, 18 B e r k e l e y T e c h . L.J. 773 (2003). 96 See Reichman, Database Protection, above n. 41 (proposing minimalist interim agreement to avoid wholesale duplication of noncopyrightable collections of data). Equally prob­ lematic as a candidate for “harmonization” is competition law, which still affords a potential range of checks and balances on legal monopolies and restrictive licensing agreements. See Ullrich, above n. 45; Eleanor Fox, Can Antitrust Policy Protect the Global Commons from the Excesses oflPRs? [this volume].

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promote their interests or the global public interest. On the contrary, the developing countries play virtually no role in norm formation (partly due to their disorganized institutional apparatus),97 and the global public interest is hardly represented at the negotiating tables in the developed countries them­ selves, much less in international forums where hard law is enacted.98 From this perspective, even if the developing countries possessed more bargaining power than they do, they should remain wary of further harmonization exercises in the absence of effective strategies for preserving and enhancing the public good side of the equation. Until this gap in international lawmaking has been suitably addressed, such initiatives will continue to suffer from a basic design defect. Any gains in efficiency of operations and lower transaction costs that greater harmonization might entail are likely to be offset by losses of sovereign power to control the single states' own innovation policies; by a shrinking public domain; by still higher costs of technological inputs and reverse engineering; and by growing thickets of rights that will make transfer of technology harder for those operating outside patent and IP pools (pools that could soon include major research universities as well as corporate holding companies). With every rise in international IP standards, moreover, there will likely be a corresponding loss of flexibility under the TRIPS Agreement and still greater risks deriving from the possible claims of nonviolatory acts of nullification that new standards may engender in the future.99 B.

Im pact o f intellectual property standards on the reserved welfare powers o f W T O members

An International Task Force on Global Public Goods was recently created at the initiative of France and Sweden to explore further the concept of GPG, to clarify the definition, and to propose concrete and operational recommendations to policymakers. In assessing how such goods could collectively be harnessed to reduce poverty and enhance welfare, this group has given priority to “peace and security; trade regimes; financial stability; control of communicable diseases; and sustainable management of the national commons.”100 A sixth item, “knowledge,” is also included in the list for its “classical public good properties.” However, the task force believes that this rubric requires a separate and particular treatment owing to its “cross-cutting” nature and to the everincreasing role of knowledge as both a private and public good.101

97 See below text accompanying nn. 153-57 . 98 See generally Heifer, above n. 57. 99 See TRIPS Agreement, above n. 3, arts. 64.2, 64.3. 100 See International Task Force on Global Public Goods, Report of the First Meeting, 25-26 Sept. 2003, available at http://www.gpgtaskforce.org/bazment.aspx (visited 21 Dec. 2003). 101 Id.; see below text accompanying nn. 159-76.

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As programs like this one emerge to focus attention on the role of GPG in advancing the welfare of developing countries, they increasingly encounter obstacles and problems stemming from the existence of patents and other IPRs held by universities, research institutes, and the private sector on funda­ mental research technologies.102 These intellectual property rights may play a positive role, especially when they enable private investors to take publicly funded research results out of the laboratory and into the stream of com­ merce.103 Increasingly, however, these rights have invaded the research com­ mons itself and made it both costly and difficult to obtain cutting-edge technologies needed for public health, agriculture, environmental protection, and the provision of other public goods.104 Private capture of the global regulatory process for IP standard setting not only undermines the ability of governments in developing countries to devise and promote their own national systems of innovation. It also erodes national control over the provision of non-TRIPS public goods by other affected minis­ tries that lack inputs into the intellectual property standard-setting exercises. The risks of progressively entangling the WTO Members5 police and welfare powers in the coils of IP treaties are aggravated by the poor organizational capacities of developing countries and their lack of expertise, which have so far impeded recourse to public-interest tools that the TRIPS Agreement still makes available.105 They are further aggravated by the practice of excluding those who disagree with the knowledge cartel from key negotiating forums and from a disinclination to include those who speak for the public interest or the preserva­ tion of complementary public goods in “technical55standard-setting exercises. The stakeholders excluded from the process of norm building in the field of IPRs have not quietly faded away, but have, on the contrary, worked through numerous NGOs to defend global public goods against further encroachment in parallel or alternative forums. This strategy of “regime shifting55106 imitates that of the knowledge cartel, which in the 1990s shifted the regulation of IPRs from WIPO, whose secretariat at that time was overtly sympathetic to the goals 102 Barton, above n. 58, at 61. 103 See, e.g., Rebecca S. Eisenberg, Public Research and Private Development: Patents and Technology Transfer in Government-Sponsored Research, 82 V a . L. R e v . 1663 (1996). 104 See, e.g., Boyle, above n. 49; Correa, above n. 22, at 545-48; Robert E. Evenson, Agricultural Research and Intellectual Property Rights [this volume]; Arti K. Rai & Rebecca S. Eisenberg, Bayh-Dole Reform and the Progress of Biomedicine, 66 L a w & C o n t e m p . P r o b s . 289 (2003). 105 For a major exception, see Decision of the South African Competition Commission con­ cerning AIDS medicines, available at www.cptech.org/ip/health/sa/settlementl2092003.pdf (visited 7 Feb. 2004). See generally J.H. R e i c h m a n w i t h C a t h e r i n e H a s e n z a h l , N o n -v o lu n tary

Licensing

of

P atented

Inventions:

The

Law

and

(UNCTAD/ICTSD 2003) (discussing broad reliance on government use provisions in U.S. law). 106 Heifer, above n. 57. P ractice

of th e U nited S tates

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of developing countries, to the GATT (later to become the World Trade Organization), where market power was the prevailing influence. As Professor Laurence Heifer shows, these parallel efforts to balance the private interests of intellectual property rights holders against larger public interest goals have been increasingly successful with respect to public health, biodiversity, plant genetic resources, human rights, and the protection of traditional knowledge and culture.107 The most dramatic success came in the area of public health, where the NGOs5 campaign for access to essential medicines culminated in the Ministerial Declaration on TRIPS and Public Health, and in the supplementary decision of 30 August 2003.108 Also noteworthy from this perspective is the work of NGOs within United Nations human rights bodies, which “has led to the adoption of non­ binding declarations and interpretive statements that emphasize the public’s interest in access to new knowledge and innovations and assert that states must give primacy to human rights where the two sets of obligations conflict.”109 Professor Heifer identifies at least four different goals that NGOs have striven to fulfill in these parallel regime-shifting initiatives. First, they seek to prom ote and maximize desired policy outcomes that differ from those of IP stakeholders, particularly where those policy outcomes “have been ignored or marginalized in other international regimes.”110 Second, they have cre­ ated safety valves that help to relieve pressure for action at the WTO by 107 “Increasingly broad and vocal consortiums of ... NGOs ... are challenging the ‘moral, political and economic legitimacy’ of TRIPS, focusing on provisions of the treaty that affect public health, human rights, biodiversity, and plant genetic resources.” Heifer, above n. 57, at 3. See, e.g., Convention on Biological Diversity, 5 June 1992, 311.L.M. 818, available at http://www.biodiv.org/convention/articles.asp (last accessed 28 July 2004); International Treaty on Plant Genetic Resources for Food and Agriculture (ITPGR), opened for signature 3 Nov. 2001 (not yet entered into force); Heifer, above n. 57, at 22-28, 32-34. 108 WTO Doha Ministerial Conference, Declaration on the TRIPS Agreement and Public Health, WT/MIN(01)/DEC/W/2 (14 Nov. 2001), 41 1.L.M. 755 (2002) [hereinafter Doha Declaration on TRIPS and Public Health]; Decision of General Council of 30 Aug. 2003, Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health, WT/L/540 (1 Sept. 2003), 43 I.L.M. 509 (2004). See generally Frederick M. Abbott, The Doha Declaration on the TRIPS Agreement and Public Health: Lighting a Dark Corner at the WTO, 5 JIEL 469 (2002); Duncan Matthews, WTO Decision on Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health: A Solution to the Access to Essential Medicines Problem?, 1 JIEL 73 (2004). 109 Heifer, above n. 57, at 38 (citing authorities); see generally id. at 37-43; Audrey R. Chapman, The Human Rights Implications of Intellectual Property Protection, 5 JIEL 861, 867 (2002) (stating that “from a human rights perspective, intellectual property protection is understood more as a social product with a social function, and not primarily as an economic relationship”). 110 Heifer, above n. 57, at 48. “By attending meetings, submitting information to expert and working groups and interacting with government officials ... in the biodiversity, PGR,

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“consigning an issue area to a venue where consequential outcomes and meaningful rule development are unlikely to occur.”111 Third, regime shift­ ing focuses efforts on generating norm s that operate to check or counter the goals of the high protectionist coalitions and thereby provide governments “a csafe space’ in which to analyze and critique those aspects of TRIPS . . . they find . . . problem atic.”112 Fourth, NGO activities seek to blend or integrate new hard and soft law rules into both WTO and WIPO processes as a means of focusing attention on other public goods besides innovation, and of enabling “developing countries to achieve outcomes not attainable” in any single negotiating forum.113 There are, of course, risks of overkill and unintended consequences inherent in these regime-shifting exercises. Putting human rights behind the drive for access to essential medicines clearly strengthened the claims of those dying from AIDS while governments debated the intricacies of patent law and the effects of reference pricing on the cost of medicines in developed countries.114 It has done little to clarify the complex problems of funding risky research and development that lie at the heart of the patent system,115 although new NGO initiatives that focus specifically on devising alternative research and develop­ ment strategies may yield more promising results in the future.116 Similarly, while the drive for legal protection of traditional knowledge under some form of intellectual property right could give poor countries a bigger stake in the global market for knowledge goods,117 it could further privatize resources - especially genetic resources - that were previously treated as agricultural public goods. It could also make innovation and creativity more difficult in the very countries that are the richest suppliers of traditional knowledge, especially if foreign firms that acquired these inputs subject to

111 112 113 114 115 116

117

public health, and human rights regimes, NGOs can shape debates over intellectual properly protection in ways that are foreclosed to them within the trade regime.” Id. at 48. Id. at 49. This may serve the interests of both developing and developed countries in different ways. See id. at 49-50. Id. at 58. Id. at 48-55. Cf. also Boyle, Enclosing the Genome, above n. 49 (stressing deeper moral and philosophical dimensions of this focus). See, e.g., Patricia Danzon & Adrian Towse, Theory and Implementation of Differential Pricing for Pharmaceuticals [this volume]. See, e.g., Alan O. Sykes, TRIPs, Pharmaceuticals, Developing Countries and the Doha “Solution,” 3 C h i . J. I n t ’ l L. 47 (2002). See Henry Grabowski, Increasing R&D Incentives for Neglected Diseases: Lessons from the Orphan Drugs Act [this volume]; James Love & Tim Hubbard, From TRIPS to RIPS: A Better Trade Framework to Support Innovation in Medical Technologies, presented at the workshop on economic issues related to access to HIV/AIDS care in developing countries, Agence Nationale de Recherches sur le Sida, Marseille, France (2003), available at http://www.cptech.org/ip/health/rndtf/trips2rips.pdf (visited 30 Jan. 2004). See Thomas Cottier & Marion Panizzon, Legal Perspectives on Traditional Knowledge: The Case for Intellectual Property Protection [this volume].

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“benefit sharing” royalty agreements were under no effective ancillary obliga­ tions to share their technological know-how with the countries of origin.118 Above all, legal protection of traditional knowledge could boomerang against developing countries as a group if they were tempted to trade it for a strong database protection treaty, as the European Union proposes.119 In any event, the burgeoning encroachment of international IPRs on the reserved welfare and police powers of states constitutes an anomaly in public international law that must be fixed before it cripples the WTO and fatally weakens the infrastructure that supports world trade. One should not view this as some minor irritant to be blamed on NGOs or recalcitrant developing coun­ tries. Telling poor people in rich countries that the TRIPS Agreement prevents domestic policymakers from regulating access to essential medicines will not long remain politically feasible. As matters stand, if nothing had been done to address the plight of millions dying of AIDS because of TRIPS patent rights, then the WTO would have contributed to the greatest health tragedy in history.120 Similar errors must be prevented in other critical areas. Until there are some agreed global governance mechanisms for food security, agriculture, educa­ tion, public health, environmental protection, scientific research, and other public goods, states cannot be presumed to have surrendered sovereign police and welfare powers in the course of intellectual property standard-setting exercises at which their ministries of health, education, agriculture, and public welfare played little or no role. Professor Robert Howse has suggested that WTO dispute-settlement panels in cases covered by the TRIPS Agreement could attenuate such conflicts by invoking article 8.1 of that Agreement.121 This provision recognizes the power of states “in formulating or amending their laws and regulations, [to] adopt measures necessary to protect public health and nutrition, and to promote the public interest in sectors of vital importance to their socio-economic and technological development . . . [if] consistent with the provisions of this 118 See, e.g., Gustavo Ghidini, Equitable Sharing of Benefits from Biodiversity-Based Innovation [this volume]. 119 That solution could limit the ability of researchers and entrepreneurs in developing countries to access scientific and technical data and information - the most important input into the knowledge-based economy - at the very moment when digitized network technologies could make such data available as never before. It could also elevate the costs of innovation everywhere while creating global barriers to entry in favor of a handful of firms that hold disproportionate market power in the supply of information as such. See, e.g., Reichman & Uhlir, above n. 28; Reichman, Database Protection, above n. 41. 120 See Frederick Abbott, Managing the Hydra: The Herculean Task of Ensuring Access to Essential Medicines [this volume]. 121 Robert Howse, The Canadian Generic Medicines Panel: A Dangerous Precedent in Dangerous Times, 3 J. W orld I ntell . P rop . 493 (2002) (criticizing the decision in Canada - Patent Protection of Pharmaceutical Products (Generic Medicines), WT/DS114/R (WTO Dispute Settlement Panel 17 Mar. 2000)).

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Agreement.”122 It could allow panels to interpret TRIPS provisions in the light of other relevant international laws, including ‘“soft law’ sources, such as resolutions and authoritative reports and policy statements of relevant inter­ national forums.”123 W hile endorsing this proposal, we think that respect for dom estic a u th o­ rity over the provision of public goods outside the TRIPS framework must ultimately rest on a more solid foundation if the W TO’s own infra­ structure is to become stabilized over time. Here, perhaps, another lesson to be drawn resides, by analogy, in the express list of reserved state police and welfare powers set out in article XX of the General Agreement on Tariffs and Trade. This provision subjects state power over intellectual property laws to a criterion of “reasonableness” when derogating from the pro-competitive m andate of the GATT.124 It further subjects the exercise of reserved state powers generally to two additional criteria, set out in the accompanying chapeau clause, namely, that resulting measures shall not be applied in ways that “would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail” or in ways that constitute “a disguised restriction on international trade.”125 While the pre­ cise legal impact of these provisions on post-TRIPS state action remains to be clarified, we think they point the way to a broader principle. If the TRIPS Agreement is not to become a Trojan horse that enabled corporate distribu­ tors of private knowledge goods to disrupt the provision of global public goods, the continued exercise of WTO Members’ police and welfare powers m ust be buttressed by an implied or express understanding that all interna­ tional intellectual property standard-setting exercises presuppose a kind of de facto “article XX” limitation in reverse. States that agree to engage in such exercises cannot thereby be tacitly understood to waive or surrender these reserved powers. On the contrary, and in conjunction with both the Preamble to the TRIPS Agreement itself126 and article 8.1, it must be generally understood that the implementation of international IP standards is necessarily limited by criteria 122 TRIPS Agreement, above n. 3, art. 8.1. 123 See Howse, above n. 121, at 504. Cf. United States - Import Prohibition of Certain Shrimp and Shrimp Products, WT/DS/26, 69 K 169 (WTO Appellate Body 12 Oct. 1998); bu t see European Communities - Measures Concerning Meat and Meat Products (Hormones), WT/DS/26,48 123 (WTO Appellate Body 13 Feb. 1998) (declining to evaluate impact of “precautionary principle” in international law). See generally J o o s t P a u l w e l y n , C o n f l i c t o f N o r m s i n I n t e r n a t i o n a l L a w : H o w W TO L a w R e l a t e s t o O t h e r R u l e s o f I n t e r n a t i o n a l L a w (Cambridge University Press 2003). 124 See GATT 1994, above n. 42, art. XX(d). 125 See id. art. XX. 126 “Recognizing the underlying public policy objectives of national systems for the protec­ tion of intellectual property, including developmental and technological objectives.” TRIPS Agreement, above n. 3, Preamble.

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of reasonableness. These standards, as implemented, must not become dis­ guised barriers to the exercise of those other police and welfare powers that are normally reserved to states.127 Where, in short, there is a conflict between private IPRs and the sovereign preservation of other public goods affecting, for example, competition, public health, sustainable agriculture, environmental protection, and the guarantees of human rights, WTO panels should respect the reserved powers of states unless they had expressly delegated their regulatory powers to some international authority or otherwise explicitly bargained them away. In the presence of any such conflict, moreover, WTO tribunals should place the burden of proof on states defending private claimants to show that their interpretation of the relevant international standards would meet these limiting criteria and would not unreasonably compromise the provision of public goods otherwise reserved to states.

III.

Balancing public and private interests in an emerging transnational system o f innovation

All countries could benefit from a functionally efficient transnational system of innovation if low barriers to entry enabled entrepreneurs anywhere to invest in the production and distribution of knowledge goods. The reduction of trade barriers, the broadening of global capital markets, and the relative harmoniz­ ation of intellectual property standards could then channel the flow of invest­ ments to innovators wherever they were situated and enable them to access and utilize the technological inputs they needed, whether by purchase or license. These same investors could then export the resulting knowledge goods in the relative security that international minimum standards of IP law would protect their respective lead time advantages against free riding duplicators who contributed nothing to the collective costs of research and development (R&D).128 In such a system, public safeguards should also enable digital telecommuni­ cations networks to link the providers of scientific and technical inputs in an endless research commons.129 Global incentives to innovate would then reward entrepreneurs who converted these inputs into value-adding, follow-on applications with unprecedented transnational payoffs. 127 Cf. J. H. Reichman, Securing Compliance with the TRIPS Agreement after U.S. v. India, 1 JIEL 585, 594-97 (1998) (discussing mix of national autonomy and IPR agreements in Appellate Body’s decision in India - Pharmaceutical Patents decision); Graeme B. Dinwoodie, The Architecture of the International Intellectual Property System, 77 C h i . K e n t L. R e v . 993, 1005-06 (2002); Okediji, above n. 90, at 870-72. 128 See, e.g., M a s k u s , IP R i g h t s , above n. 8, at 192-94; Reichman, above n. 4. 129 See, e.g., Reichman&Uhlir, above n. 28, at 356-60; see generally L a u r e n c e L e s s i g , T h e F u t u r e o f I d e a s : T h e F a t e o f t h e C o m m o n s i n a C o n n e c t e d W o r l d (2002).

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In practice, however, economic realities in the post-TRIPS environment may differ significantly from these potential outcomes.130 Objective difficulties of accessing technical information generated abroad and of adapting it to local conditions still hamper the catch-up activities of firms in developing countries. International IP standards augment these difficulties by elevating the cost of inputs and by making the task of reverse engineering by honest means more costly and sometimes impossible. Additional obstacles arise when high prices charged for foreign technologies make locally produced goods uncompetitive, when foreign suppliers refuse to license needed technology at all, or when they impose unreasonable terms and conditions that restrict exports and otherwise create barriers to entry.131 We do not mean to overstate the case or to sound unduly pessimistic. The reform of the worldwide intellectual property system has undoubtedly improved the infrastructure supporting the exchange of knowledge goods, and researchers have begun empirically to evaluate the positive contribution to economic growth this makes possible.132 The case of the Indian software industries, for example, shows just how fast small- and medium-sized indus­ tries in developing countries can catch up once the relevant technical know­ how becomes embedded in an appropriate commercial environment.133 Impressive technological gains have also occurred in many other countries, including Brazil, China, and South Africa. The point is that, as a rudimentary transnational system of innovation begins to take shape, it consists of many different components at different levels of development whose intellectual property needs and interests vary considerably. If, indeed, one looks beyond the North-South conflict of interests that informed yesterday s debates about IP standards, one might better view the developing countries today as territorial economic arenas in which a proportionately larger collection of small- and medium-sized entrepreneurs operate without the benefits of basic research results available to their counterparts in developed countries.

130 131 132 133

See, e.g., CIPR, above n. 10, at 20-29; Drahos, above n. 5; Ullrich, above n. 45. See, e.g., CIPR, above n. 10, at 24-26; Barton, above n. 58, at 60-64; Correa, above n. 29. See M a s k u s , IP R i g h t s , above n. 8; A r o r a e t a l . , above n. 26. These industries benefited particularly from a previous brain drain and from the resulting return of know-how to the poorer country of origin. Moreover, much of the basic research results emanating from government-funded scientific and educational institu­ tions in developed countries, particularly the United States, do become at least nominally available through digital telecommunications networks to scientists, innovators, and entrepreneurs even in the poorest and most remote countries. See generally Reichman & Uhlir, above n. 28, Part II (mapping the public domain for research results, and describing the legal infrastructure that supports it). Skills needed to adapt such results to the production of locally suitable knowledge goods are obtainable on the international labor market, and they seem likely to emerge on local labor markets as well in response to the heightened production of such goods.

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While the technical expertise of such firms lags well behind that of similarly sized firms that drive innovation in, say, the United States, these are differences of degree, not kind. All such firms tend to have more in common with each other than they do with the large multinational companies that are often not very innovative at all, but mainly powerful distributors of innovation originat­ ing from smaller, more dynamic firms. Like the biggest firms, small- and medium-sized entrepreneurs - wherever situated - need IPRs to appropriate the fruits of their investments at home and to facilitate sales, licensing, and direct investments abroad. They also need these rights to defend themselves from the predatory practices of the large m ulti­ nationals.134 However, these firms would logically oppose the drive for TRIPS plus levels of intellectual property protection that tended to expand and multiply exclusive rights, limit access to the research commons, and diminish the space for reverse engineering or other pro-competitive strategies built around value-adding applications of new technologies.135 A.

Developing countries as defenders o f the competitive ethos

Because a disproportionately large number of such entrepreneurs may be located in developing countries, governments in those nations could become the defenders and promoters of a transnational system of innovation in which properly balanced intellectual property rights were not ends in themselves, but rather the means of generating more scientific and technical inputs into a healthy competitive environment. To the extent that these governments repre­ sented the interests of both consumers and follow-on innovators, they would want to maintain the flows of publicly available scientific and technical information that traditionally fueled innovation in the United States; to preserve and strengthen the rights to reverse-engineer routine innovations by proper means; to foster the exchange of technical know-how between innovators at work on common technical trajectories; and to ensure that regulatory solutions to overcome market failure did not create barriers to entry or otherwise impoverish the public domain.136 To this end, the developing countries need to integrate the international IP standards codified during the Uruguay Round into their national and regional systems of innovation in ways that maximize the benefits and minimize the social costs. This difficult and financially burdensome task requires them to master and defend the flexibilities still residing in the TRIPS Agreement; to match those flexibilities with their respective, often widely different innovation assets and other comparative advantages; and to forge a pro-competitive 134 See, e.g., Herbert Hovenkamp et al., Anticompetitive Settlements of Intellectual Property Disputes, 87 M i n n L. R e v . 1719 (2003). 135 See, e.g., Correa, above n. 22, at 544-49. 136 See, e.g., UNCTAD, T h e TRIPS A g r e e m e n t a n d D e v e l o p i n g C o u n t r i e s 15-28 (1996).

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strategy with respect to the technologically more advanced countries, within the confines that the WTO Agreement makes legally possible.137 To succeed in this endeavor, there are at least three necessary, if not sufficient pre-conditions. First, developing countries as a group need to halt or opt out of new international intellectual property standard-setting exercises that would only complicate their task and narrow their options. Second, they will need to rationalize their decision-making and interagency governance structures so as to coordinate the activities of their intellectual property bureaus with policy decisions affecting the design of their national systems of innovation. Third, they will have to dedicate significant efforts and resources to conserving and promoting those public goods that are increasingly undersupplied in developed countries but that remain indispensable to rapid technological and overall social progress in developing countries. 1.

A moratorium on stronger international intellectual property standards

Building an effective transnational system of innovation is a sobering task because the choice and disposition of optimal incentive structures have become increasingly uncertain in both theory and practice, especially as regards new technologies,138 and because neither high-protectionist interests in devel­ oped countries nor low-protectionist interests in developing countries could be expected to advocate principles appropriately balancing the needs of innova­ tors with those of followers.139 From this perspective, further harmonization is not an improper goal, but rather a premature exercise under the new and uncertain conditions that attend the development of cutting-edge technologies generally and information-based technologies in particular. Here the single most daunting problem is how to allocate public and private interests in such goods, given that their raw materials - information - necessarily perform a dual function as both outputs and inputs of a “cumulative and sequential” innovation process.140 As matters stand, the complex nature and 137 See generally Reichman, From Free Riders to Fair Followers, above n. 20. 138 Compare, e.g., Richard Epstein, Steady the Course: Property Rights in Genetic Material, in P e r s p e c t i v e s o n P r o p e r t i e s o f t h e H u m a n G e n o m e P r o j e c t , above n. 49, at 153-93, with Rochelle Cooper Dreyfuss, Varying the Course in Patenting Genetic Material: A Counter-Proposal to Richard Epstein’s Steady Course, in P e r s p e c t i v e s o n P r o p e r t i e s o f t h e H u m a n G e n o m e P r o i e c t , above n. 49, at 195-208 and Reichman, Saving the Patent Law from Itself, above n. 49. See generally Dan L. Burk & Mark A. Lemley, Policy Levers in Patent Law, 89 V a . L. R e v . 1575 (2003). 139 See esp. Okediji, above n. 90, at 825-72 (discussing some theoretical implications of multilateral IP negotiations). 140 See, e.g., Niva Elkin-Korin, A Public Regarding Approach to Contracting over Copyrights, in E x p a n d i n g t h e B o u n d a r i e s o f IP, above n. 41, at 191, 195-98; Richard R. Nelson, Intellectual Property Protection for Cumulative Systems Technology, 94 C o l u m . L. R e v . 2674 (1994); Reichman & Franklin, above n. 70, at 884-99.

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pace of cutting-edge innovation so outstrips the conventional assumptions of the patent and copyright paradigms handed down from the nineteenth century that disinterested economists and policymakers in the most technologically advanced countries lack both the experience and the evidence to draw these lines with confidence. Contrary to the special interests5 relentless propaganda, in other words, intellectual property law has not arrived at the end of history. On the contrary, the turmoil generated by the TRIPS Agreement and its aftermath, including the WIPO Copyright Treaties,141 suggests that we stand at the threshold of an era in which unanswered questions about the role of IPRs in a networked informa­ tion economy demand a lengthy period of “trial and error” experimentation, like that which ensued after the adoption of the Paris and Berne Conventions in the 1890s. In order to validate empirically the loose claims made for and against different modes of protection, we will thus need a period of time in which states at different levels of development accommodate existing international standards to their own nascent or evolving systems of innovation.142 This would yield a new body of “laboratory effects,” to use Ladas’s phrase, with which to compare and test different development strategies.143 In the long run, the resulting empirical data could make it possible for states to trade further intellectual property concessions on a win-win basis, without coercion and with fewer risks that powerful interest groups had rigged the rules to lock in fleeting competitive advantages. The time has come, in short, to take intellectual property off the inter­ national law-making agenda and to foster measures that better enabled devel­ oping countries to adapt to the challenges that prior rounds of harmonization had already bred.144 Such a moratorium would then enable both high and low protectionist countries to test their respective strategies against actual results without fear that the market openings nominally available to developing country entrepreneurs would be foreclosed by premature, ill-advised, or unbal­ anced efforts to re-regulate that same marketplace at their expense. A “time out” along these lines would make it possible, for example, to evaluate growing fears that overprotection of research results in developed countries will produce anti-commons effects and lost competitive oppor­ tunities likely to retard the pace of innovation over time. It would allow 141 See above n. 6. 142 Accord: JohnF. Duffy, Harmony and Diversity in Global Patent Law, I 7B erkeley T ech . L.J. 685, 709-25 (2002); see also Boyle, above n. 49. 143 S tephen P. L adas , P atents , T rademarks and R elated R ights - N ational and I nternational P rotection 9-16 (1975); see also Graeme B. Dinwoodie, A New Copyright Order: Why National Courts Should Create Global Norms, 149 U. P a . L. R ev . 469, 514-15 (2000); Graeme B. Dinwoodie & Rochelle Cooper Dreyfuss, above n. 81. 144 Cf. Ladas , above n. 143, at 15 (criticizing “trend toward viewing ‘harmonization’ as a good thing no matter what the problems are, as an end in itself” and stressing costs to single nations that may make it “simply undesirable or impracticable”).

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room for any countries so inclined to experiment with alternative forms of protecting investment, including proposals for more open-source initiatives145 and for compensatory liability regimes that could reconstitute the shrinking semi-commons that historically mediated between exclusive intellectual prop­ erty rights and the public dom ain.146 It would allow time for the worldwide scientific community to reformulate its data exchange policies and to recon­ struct contractually the public domain for scientific and technical information that has recently come under a privatizing assault.147 A moratorium on stronger international intellectual property standards would especially help developing countries shift their attention and limited resources away from compliance-driven initiatives148 toward programs to potentiate their national and regional systems of innovation. It would, for example, give them time to adapt promising new initiatives to their own environments, such as programs to encourage the transfer of technology from universities and public research centers to the private sector, which have produced mixed results in the United States.149 It would also give them breathing room in which to formulate competition laws and policies rooted in fairness, in concerns to lower barriers to entry, and in the need to ensure that market-induced transfers of technology were not thwarted by refusals to deal and unreasonable licensing terms or conditions.150 Efforts to institute such a moratorium could, however, run up against legitimate concerns in developed countries to prohibit free riding on invest­ ments in new technologies that enter the global marketplace. Developing countries that demand a moratorium on stronger intellectual property stan­ dards must therefore remain willing to oppose free-riding practices that under­ mine incentives to invest in new technologies everywhere.151 A willingness to accommodate legitimate concerns about free riding could defuse potentially heated conflicts and remove controversial topics, such as database protection, 145 See, e.g., Yochai Benkler, Coase’s Penguin, 112 Y a l e L. R e v . 369 (2002); see also Creative Commons available at http://www.creativecommons.org. 146 Reichman, Green Tulips, above n. 71; Jerome H. Reichman & Tracy Lewis, Using Liability Rules to Stimulate Local Innovation in Developing Countries: Application to Traditional Knowledge [this volume]. 147 See above nn. 28, 129 and accompanying text. 148 See, e.g., Peter Gerhart, Distributive Values and Institutional Design in the Provision of Global Public Goods [this volume]; Beyond the Treaties: A Symposium on Compliance with International Intellectual Property Law, 32 C a s e W. R e s . J. I n t ’ l L. 357 (2000). 149 See Rai & Eisenberg, above n. 104. 150 See, e.g., Ullrich, above n. 45; Correa, above n. 29. 151 It was a failure to recognize a need to protect research and development investments in innovative technologies against unbridled free riding that led developed countries to demand adoption of the TRIPS Agreement within the WTO framework in the first place. See, e.g., Gail E. Evans, Intellectual Property as a Trade Issue: The Making ofthe Agreement on Trade Related Aspects of Intellectual Property, 18W orld C o m p e t i t i o n , L . & E c o n . R ev . 137 (1994). This mistake should not be repeated.

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from a more ambitious standard-setting agenda.152 It would also reinforce the credibility of a demand for a moratorium on further harmonization efforts by accompanying it with a ccclean hands” doctrine that would reassure investors in all countries. 2.

An institutional infrastructure for reconciling existing IPRs with national and regional systems of innovation

The m inimum international standards of intellectual property protection already mandated by the TRIPS Agreement are not uniform law, and WTO Members retain considerable flexibility in the ways those standards can be incorporated into their domestic legal systems.153 The challenge for every developing country is to enact laws and implement policies that, while con­ sistent with international m inimum standards, also effectively promote national development priorities.154 In so doing, single governments should also take into account the possibilities of cooperative actions or strategies that could reduce the overall social and economic costs of compliance with those obligations for any given region as a whole. All developing countries should accordingly consider the feasibility of establishing a high-level, permanent working group on trade-related innov­ ation policies, which could become the focal point for interagency review with respect to the integration into domestic law of existing and evolving international legal standards affecting innovation. These working groups or advisory councils would not duplicate the activities of national IP bureaus. They should instead play a supervisory role that requires inputs from those bureaus but that subjects policy-making decisions of importance to a suitable interagency review process concerned with national development strategy.155

152 See, e.g., Reichman, Database Protection, above n. 41 (proposing interim international agreement against wholesale duplication). 153 Sec UNCTAD, T h e TRIPS A g r e e m e n t a n d D e v e l o p i n g C o u n t r i e s , above n. 136, at 32; World Bank, Global Economic Prospects and the Developing Countries 2002, above n. 22, at 140-44. 154 See Reichman, Free Riders to Fair Followers, above n. 20. Mastering the legal and economic challenges of the standards mandated under the WTO Agreements further requires that countries should, in general, avoid adopting “off the rack” model laws that may codify or embody objectives different from those likely to accommodate their own needs. See generally J.H. Reichman, Ruth Okediji, and Jayasharee Watal, Draft UNDP Flagship Program on Innovation, Culture, Traditional Know-How and Bioresources, prepared for the Special Unit for Technical Cooperation Among Developing Countries (TCDC), Apr.-May 2000 [hereinafter Draft UNDP Program]. 155 This proposal was first put forward in Draft UNDP Program, above n. 154. The proposed interagency working groups could oversee the sustained training of cadres and updating of knowledge needed by governments to formulate policy options over time. They could also undertake the following additional endeavors:

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Each regional or sub-regional group of developing countries should also consider the feasibility of establishing a similar working group for the purposes of coordinating positions on matters of common concern. These regional councils, once established, could benefit from the pooling of resources and expertise among their members to become centers for formulating regional standards concerning IPRs and for consensus building for future bilateral and multilateral negotiations bearing on innovation policies. In putting forward these proposals, we make no assumptions that develop­ ing countries would think alike on the relevant issues or that members of any regional group will readily embrace a common position. The opposite is true. What experience demonstrates is that any coalition of developing country interests will be more effective than the absence of such a coalition.136 Compromise positions staked out by regional groups can block the most egregious proposals emanating from special interest coalitions, and can some­ times even lead to universally valid intellectual property legislation of value to the developing countries.157 The organization of national and regional interagency working groups would reduce the dependence of developing countries on ad hoc support by foundations, NGOs, and pro bono legal counsel. The existence of such organ­ izations would further ensure early detection of new protectionist initiatives, facilitate prom pt reactions to them, and enable the formation of coalitions to resist them if undesirable or to modify and support them if desirable. It would also make it possible to appoint subcommittees that could follow ongoing initiatives at WIPO and the WTO, and support the work of permanent delegations and regional political caucuses at these and other intergovernmen­ tal organizations on a continuing basis. Above all, the existence of national and regional working groups on traderelated innovation policies would enable developing countries to formulate broad-based strategies to resist pressures at the bilateral and multilateral levels for undesirable demands for protection. Collective action to resist such pres­ sures seems more likely to succeed than leaving each state to fend for itself, in Coordinate activities to enable consensus building at the national level; Support the training and sensitization of law enforcement officials to ensure a cadre of skilled personnel in each developing country and to formulate regional enforcement standards based on national positions; Coordinate inter-council activities with a view to identifying best practices and models for adaptation by other countries and to facilitating consensus building at the regional level; Support the activities of national, regional and international nongovernmental organizations (NGOs), which identify with the mission of the advisory councils. See id. 156 See, e.g., Abbott, above n. 53, at 42-43; Okediji, above n. 90, at 842-61 (discussing role of coalitions in TRIPS negotiations). 157 See, e.g., Samuelson, above n. 6.

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which case there is simply no institutional infrastructure for promoting a systematic and coordinated response to what has become a systematic and coordinated drive to re-regulate the global economy. B.

M a intaining the supply o f knowledge as a global public good

Critical to the future success of an emerging transnational system of innovation is its ability to ensure the production and adequate supply of needed public inputs known to have fueled the production of private knowledge goods in the technologically most advanced economies.158 This topic is relatively new and extremely complex, and the need for collective international action has been inadequately studied. 1.

Dynamic properties of knowledge as a global public good

In thinking about the uncertain properties of knowledge as a global public good, the intimate and complex relationship between knowledge and trade requires particular attention, especially in light of the TRIPS Agreement and related issues that were previously discussed. In principle, international trade law rooted in the GATT and the WTO Agreement should stimulate worldwide competition in the provision of goods and services generally, including knowl­ edge goods. At the same time, qualitative leaps in knowledge as a product of aggregate investment in R&D also depend on private intellectual property rights, especially patents, which deliberately restrain trade in the short run in order to elevate the level of competition later on.159 In this process, knowledge plays at least a triple role. Existing knowledge fuels the production of additional knowledge as an input from any commons accessible to any given set of researchers or entrepreneurs. New knowledge emerges fresh from publicly supported research endeavors, often involving massive expenditures, whence it may enter a research commons, as typically occurred in the United States, or it may attract proprietary rights of either a public or private nature.160 Finally, new knowledge may come to light from privately funded research and development initiatives, or from public-private 158 See, e.g., Michael Callon, Is Science a Public Good ?, 19Sci. & H u m . V a l u e s 395, 400 (1994); Nelson, above n. 76; David, above n. 53; Stiglitz, above n. 51. 159 John H . Barton, The Economics of TRIPS: International Trade in Information Intensive Products, 33 G e o . W a s h . I n t ’ l R e v . 473, 486-91 (2001) (stressing tradeoffs between short-term costs to consumers in higher prices and long term benefits through increased innovation). 160 See E.C. Database Directive, above n. 77; Reichman & Uhlir, above n. 28, at 325-50. The tendency of intellectual property rights to make new knowledge artificially scarce in order to reward investors then impacts on the provision of other public goods, including free trade, the preservation of the natural commons or efforts to promote public health, in ways that, as previously discussed, may trigger resentment and public outcry around the world. See above text accompanying nn. 28, 129 & 152.

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partnerships. In this form, it may or may not become available as an input for open research in the future, depending upon the modalities of intellectual property protection - including permanent rights in collections of data - that investors obtain under national and international law. Further complicating any assessment of appropriate international action affecting the provision of knowledge as a global public good is the fact that its positive role in domestic systems of innovation, though palpable and univer­ sally recognized, is not well understood nor fully elaborated. Nor do the most successful systems of innovation demonstrate any common or universal set of practices in this respect that could readily be transcribed to the international level. In the United States, for example, especially during the Cold War period, massive amounts of federal money were spent on producing data and research, usually through universities and other scientific institutes. Under traditional U.S. law, all government-generated data automatically entered the public domain, where this gave a huge fillip to both public and private research. Most publicly funded research results likewise became widely available under both the sharing ethos of science and “open access” policies that federal funding agencies imposed.161 Recently, however, funds for government-generated data have shrunk; and there is a growing tendency for government agencies to license such data from the private sector under increasingly restrictive conditions. Moreover, government-funded research results are increasingly transferred to the private sector under exclusive patent rights,162 made possible by the Bayh-Dole Act of 1980.163 New IPRs in digital transmissions and collections of data may further augment the privatization of government-funded research at the expense of the scientific community’s sharing ethos and traditional open access policies.164 In the European Union, in contrast, government-generated data were trad­ itionally subject to exclusive property rights, and some recent research suggests that this practice greatly hampered development in some sectors, such as weather-related innovation.165 At the same time, government-funded research in the E.U. is increasingly likely to be transferred to the private sector through patents, while all collections of data - including publicly funded data - have become subject to powerful and potentially permanent exclusive property 161 See generally Reichman & Uhlir, above n. 28, at 325-50. 162 See id. at 366-71; Rai 8c Eisenberg, above n. 104. 163 Pub. L. No. 96-517,6(a), 94 Stat. 3015,3019-28 (1980) (codified as amended at 35 U.S.C. §§ 200-12 (2000)).

164 See Reichman 8c Uhlir, above n. 28, at 361-415. 165 Peter Weiss, Conflicting International Public Sector Information Policies and Their Effects on the Public Domain and the Economy, in R o l e o f S c i e n t i f i c a n d T e c h n i c a l D a t a , above n. 28, at 129-32.

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rights under the E.C. Directive on Databases of 1996.166 The impact of these measures on overall research and development in the E.U. remains to be seen, but the scientific community there has voiced growing concerns.167 Practices with respect to the provision of knowledge as a public good in developing countries are quite different and even harder to evaluate. Here there has always been a disproportionately large reliance on the public sector, with uneven but sometimes commendable results.168 However, efforts to open up previously “command economies” to private enterprise in these countries have put new pressures on existing modes of producing knowledge goods in the public sector, and new modes of transferring knowledge from the public to the private sector are badly needed in any case. As the drive to stimulate invest­ ments in private research and development acquires momentum in more developing countries, careful thought will have to be given to preserving and enhancing a public sector research infrastructure that was formerly taken for granted. This brief survey confirms that ensuring the provision of knowledge as an essential public good in an incipient transnational system of innovation would be extremely difficult to manage under the best of circumstances owing to the diversity of practices among existing systems and to the changes underway within these systems. This task is made still more difficult by relentless pres­ sures to ratchet up international standards of intellectual property protection without regard to, and often at the expense of, traditional modes of generating knowledge as a public good. This one-sided push for privatization requires a collective response aimed at preserving the roles of both knowledge and competition as international public goods. Calibrating this response, however, is difficult precisely because national experiences in technology-exporting countries are both diverse and changing, while the challenge and problems of protecting investment in cutting-edge technologies today makes reliance on even the most successful national solutions of the past problematic. 2.

Nurturing a transnational system of innovation

This perplexity gives rise to a troubling conundrum. W ithout an organized, collective movement to promote and enhance the supply of knowledge as a public good, the transnational system of innovation taking root in the wake of 166 See above n. 77. 167 Paul A. David, Will Building “Good Fences” Really Make “Good Neighbors” in Science? Digital Technologies, Collaborative Research on the Internet and the EC’s Push for the Protection of Intellectual Property, Stanford Institute for Econ. Pol’y Res., Discussion Paper No. 00-33 (2000), available at http://www-econ.stanford.edu/faculty/workp/ swpo/005.html (last visited 1 Aug. 2004); see also Royal Society Report, above n. 78. 168 See, e.g., Heifer, above n. 57. See also Cottier & Panizzon, above n. 117.

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the TRIPS Agreement could become suboptimal and skewed from the outset. Yet, without a lengthy period of experimentation in both developed and developing countries, policymakers lack the experience and data to confidently design the balance of public and private interests that should prevail in that same system. This conundrum in itself constitutes a valid justification for a moratorium on international intellectual property standard-setting exercises, and it underscores the need for national and regional experiments that could shed more light on how a transnational market for knowledge goods should ultimately be structured. To the extent that developing countries could successfully ensure that their respective systems of innovation promoted healthy competition in knowledge goods while otherwise delivering an adequate supply of public goods, they could more readily and capably articulate these same interests in multilateral negotiations affecting the future shape of a transnational system of innovation. This experience would arm them with serious counter-proposals to avoid the excesses of intellectual property protection that some developed countries have embraced. The long-term prospects for an emerging worldwide system of innovation ultimately depend on the level of investment it attracts, on the quantity and quality of innovation it stimulates, and on the degree of healthy competition it sustains. While intellectual property law will necessarily play a crucial role in attaining positive outcomes, such a system cannot fulfill its promise if it becomes prematurely shackled by the intellectual property policies and norms favored by any particular group of powerful companies or countries. On the contrary, the evidence shows that small- and medium-sized companies continue to generate the bulk of real technological advances,169 and any regulatory scheme developed for this system must take their needs and interests into account. Pro-competitive pressures generated from within the emerging trans­ national system of innovation could then reverberate upon highly protectionist national systems in developed countries. They could embolden, if not empower, coalitions of small- and medium-sized entrepreneurs there to seize the political initiative and recalibrate the balance of public and private interests in their domestic intellectual property regimes.170 It is well to remember that the law and economics disciplines still know relatively little about how an incipient transnational system of innovation should best be organized and regulated in the short and medium terms. Countries big and small, rich and poor, find themselves at the start of a new era, in which serious thought and bold experimental undertakings will be 169 See most recently Josh Lerner, The New New Financial Thing: The Sources of Innovation Before and After “State Street,” N.B.E.R. Working Paper No. W10223 (Jan. 2004). 170 For illustrations of measures that might be taken in developed countries without violat­ ing the TRIPS Agreement, see Dinwoodie and Cooper Dreyfuss, above n. 81.

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needed to identify the optimal mix of public and private goods in this broad­ ened but largely uncharted domain. The one sure conclusion that follows from this analysis is that hardening past experience into possibly flawed international rules to regulate this emerging transnational system should be avoided. What is needed, instead, is a long period of experimentation under pro-competitive conditions that could yield instructive “laboratory effects” comparable to those that gradually led to the progressive development of international intellectual property law after the Berne and Paris Conventions - the “Great Conventions” were established in the 1890s.

Part V Beyond Law: Cultural Effects of Global Intellectual Propertization

[15] The Impact of Foreign Investment on Indigenous Culture: An Intellectual Property Perspective D oris Estelle Longf

I. Coca-Colonization and McWorld—De-Culturization in the Global Marketplace...................................................... 240 EL Current International Intellectual Property Protection Regimes.................................................................246 m . Intellectual Property Rights—Sword and Shield.................. 263 IV. Conclusion..............................................................................279 The [ancient] civilizations [of the Americas] have left us with rich historical landmarks, proud people and the desire to explore and experience their past, understand their present and visualize their future. - Luis Vasquez1During the late twentieth century,culture2 has become r Associate Professor of Law, The John Marshall Law School. J.D. 1980, Cornell Law School. The genesis of this Article was a speech presented at the Ninth Annual Cuban and North American Philosophers Conferences held in Havana and Guantanamo, Cuba in June 1997. The author would like to thank Dean Robert Gilbert Johnston and Associate Dean Susan Brody for the research grant that supported the development of this Article. The author would also like to thank Karen E. Long for her insights into the problems of de-culturization and the tourism industry. 1 Travel W orld News 35 (Mar. 1997) (discussing statement by the President of MILA, a wholesaler specializing in cultural tours to Latin America). 2 Indigenous and native culture, the focal point of this Article, has been variously defined, depending on the aspects of “culture” for which protection is sought. For instance, the Convention on the Means of Prohibiting and Preventing the Illicit Import, Export, and Transfer of Ownership of Cultural Property, Nov. 14, 1970, 823 U.N.T.S. 231, 10 I.L.M. 289 [hereinafter Convention on Illicit Transfer), classifies cultural property into categories and allows each country to determine which objects have cultural significance for archeology, history, literature, art, and science. See id. art. I, 823 U.N.T.S. at 231, 10 I.L.M. at 289. Other definitions have similarly focused on “culture” as demonstrated through its objectification in relics or artifacts. See, e.g., Native American Graves Protection and Repatriation Act of 1990, 25 U.S.C.A. § 3001(3)(D) (1997) (defining “cultural patrimony” as “an object having ongoing

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historical, traditional or cultural importance central to . . . [the] culture itself. . . and which . . . cannot be alienated, appropriated or conveyed by an individual”)*, see also infra note 21 (discussing the Native American Graves Protection and Repatriation Act). By contrast, conventions which concern “culture” as a “human right” appear to treat culture as an amorphous concept which includes all aspects of a group’s history, works, traditions, practices and knowledge. See, e.g., International Convention on Civil and Political Rights, Dec. 16,1966, 999 U.N.T.S. 171,6 I.L.M. 368 (providing that persons belonging to “ethnic, religious or linguistic minorities . . . shall not be deprived of the right, in community, with other members of their group to enjoy their own culture”). Much of the legislation regarding the protection of indigenous culture has focused on tangible manifestations and has limited protection to those objects that have archeological, scientific or historical values. See, e.g., Terri Janke et al., Proposals for the Recognition and Protection o f Indigenous Cultures and Intellectual Property § 5.3 (last modified Aug. 27, 1997) ; see also infra note 22 (discussing the definition of “culture”). This effort to compartmentalize culture has been strongly criticized by some scholars and commentators. The distinction between “cultural property” and “intellectual property” of indigenous peoples has been criticized as inappropriate by “try[ing] to subdivide the heritage of Indigenous peoples into separate legal categories such as ‘cultural,’ ‘artistic’ or ‘intellectual,’ or into separate elements such as songs, stories, science or sacred sites.” Erica-Irene Daes, Study in the Protection of the Cultural and Intellectual Property o f Indigenous Peoples, U.N. Sub-commission on Prevention of Discrimination of Minorities, at 9, U.N. Doc. E/CN.4/Sub.2/1993/28 (1993). Daes prefers the term “heritage” to “culture,” which she defines as “including] all expressions of the relationship between the people, their land and the other living beings and spirits which share the land, and which is also the basis for maintaining social, economic and diplomatic relationships—through sharing—with other people.” Id. at 39. Similarly, the term “heritage” has been used to refer to indigenous culture and has been defined as “all objects, sites and knowledge the nature or use of which has been transmitted from generation to generation, and which is regarded as pertaining to a particular people or its Territory.” The Final Report on the Protection o f the Heritage o f Indigenous People at 10, U.N.Doc. E/CN/4/Sub2/l 995/26 (1995). This definition also includes “objects, knowledge and literary or artistic works which may be created in the future based upon its heritage.” Id. The treatment of “heritage” as an all-encompassing definition is further emphasized by the Report's reiteration that the definition includes all moveable cultural property as defined by the relevant convention of UNESCO; all kinds of literary and artistic works . . . ; all kinds of scientific, agricultural, technical and ecological knowledge, including cultigens, medicines and rational use of flora and fauna; human remains; immovable cultural property such as sacred sites, sites of historical significance, and burials; and documentation of indigenous peoples’ heritage on film, photographs, videotape and audiotape. Id. The author does not disagree that the “culture” of a people can be an all encompassing term that incorporates every aspect of a people’s history, knowledge, works and traditions. However, given the traditional requirement that intellectual property consist of some tangible manifestation, whether fixed or unfixed, the author has

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“big business.” From eco-tourism to cultural tours and souvenir artifacts, culture has been transformed into a commodity that can be merchandised and sold across international borders.3 This “commodification”4 of culture is part of a larger trend—the chosen to adopt a definition of “culture” that reflects only those definitions that can be expressed in a tangible manner. Thus, “culture,” for purposes of this Article, includes the historical, political, artistic, folkloric, and ritualistic elements of a nation’s heritage which can be manifested or expressed in some tangible form. This definition is intended to encompass the broadest possible spectrum of elements that may form part of a region’s or country’s cultural heritage. The following elements are included: artistic, literary, and musical works; scientific, agricultural, and medical innovations; and folkloric traditions, indigenous religious rituals, and monumental works. This definition does not include human remains. Although such remains are clearly entitled to respect and protection, they do not involve the product of intellectual creativity or indigenous knowledge, which is an activating requirement for the protection scheme discussed in this Article. 3 See, e.g., Terri Janke et al., Contribution to Industry, Pt. Ill, § 2.2 (last modified Aug. 27, 1997) . A survey of international visitors to Australia conducted in February and March 1993 found that almost one-half are interested in experiencing the indigenous cultures and that one-third actually do experience an indigenous cultural performance or participate in a tour. See id. Similarly, the value of sales of indigenous arts and souvenirs to international visitors has been estimated at $46 million per year. See id.; see also Robert McKelvie, Shooting Very Very Big Fish (with a Nikon), T he INDEP.-LONDON, Nov. 2, 1997, at 4, available in 1997 WL 15214307 (noting that the eco-tourist explosion in Kaikoura, New Zealand led to an increase in tourists from 3,400 in 1987 to 188,000 in 1995); Susan C. Valerio, Weekender: What Really is Ecotourisml, Bus. W orld (M anila), Sept. 19, 1997, available in 1997 WL 13852251 (examining thd historical development, goals and problems caused by eco-tourism); Ecotourism Officials Meeting in Brazil, D allas M orning N ews, Sept. 19, 1993, at K2, available in 1993 WL 3388210 (analyzing conservation and the business of eco-tourism); Terri Janke et al., Proposals for the Recognition and Protection o f Indigenous Cultures and Intellectual Property, § 5.3 (last modified Aug. 27, 1997) (discussing the problem of boomerangs and didgeridoos being manufactured abroad and then imported into Australia and sold as authentic Aboriginal art). Although “true” eco-tourism can provide certain benefits, including the preservation of natural resources and cultural heritage, see, e.g., Valerio, supra (discussing the potential benefits of eco-tourism), the big business aspects of eco-tourism and cultural tours can result in the transformation of culture into a marketable commodity divorced from its cultural context. See Janke, Contribution to Industry, supra. 4 The right to control the commodification of culture is implicit in the claim of a proprietary right to control indigenous culture. Thus, Native American accusations that mainstream Canadian authors are guilty of “cultural theft, the theft of voice” in their use of native histories seems to imply that part of the loss caused by such “unauthorized” uses involves losing the ability to control the marketing of the cultural goods derived from this “voice.” See Rosemary T. Coombe, The Properties o f Culture and the Politics o f Possessing Identity: Native Claims in the Cultural Appropriation Controversy, 6 C an .

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emergence of a global marketplace and the resulting drive by newly industrialized countries to develop an industrial and commercial base in order to participate in this marketplace.5 These trends impose a growing need for developing countries6 to seek foreign investment, in both capital and technology, in order to face the economic challenges of the coming century. Increasingly, the ability to attract such foreign investment is tied to the protection o f so-called “intellectual property rights,” including patents,7 J.L. & Juris. 249 (1993). In keeping with this view that culture has a proprietary nature, “commodification” for purposes of this Article is defined as the transformation of an object, custom or ritual into a commercial good or service capable of being massmarketed. Examples of commodification include, but are not limited to, the manufacturing and sale of “cultural artifacts” as souvenirs for tourists, the development and presentation of bastardized rituals as part of a tourist enterprise, and use of cultural icons and traditions in popular fiction outside of its cultural context. 5 See, e.g., Jeffrey Blatt et al., Preparing for the Pacific Century: Fostering Technology Transfer in SouthEast Asia, 3 A nn. Surv. Int’ l & Comp. L. 235 (1996); James Forstner, Patent Strategies: Asia Pacific, PLI G lobal Intell. Prop. Series (1992); International Developments, J. Proprietary Rts., May 1997, at 24; see also infra note 19 (describing the effects of this process on developing nations). 6 “Developing country” and “developed country” have various definitions. Such terms are usually based either on United Nations definitions used to determine foreign aid levels or on World Bank definitions based on per capita income. See, e.g., Marco C.E.J. Bronchers, The Impact o f TRIPS: Intellectual Property Protection in Developing Countries, 31 CommonMkt L. Rev. 1245 (1995); Reiko R. Feaver, China’s Copyright Law and the TRIPS Agreement, 5 J. Transnat’l L. & P o l’ y 431 (1996). For purposes of this Article, the term “developing country” refers to Third World countries that have not attained the level of industrialization of members of the Organization of Economic Cooperation and Development (OECD). This definition will include lesser developed countries (LCD’s), newly industrialized countries (NIC’s), and members of the “Group of 77.” By contrast, the term “developed country” will refer to industrialized countries such as the United States, Canada, Japan, and most members of the European Union, and the OECD. Developed countries are generally perceived as owning or controlling most of the world’s presently available technology. The above definitions generally comply with United Nations guidelines and will serve to place present disputes in an understandable context. 7 There is no generally accepted international definition for the various forms of intangible property rights that are included within the definition of “intellectual property.” Nevertheless, based on widely accepted multinational treaties, some commonly accepted parameters of protection can be ascertained. For instance, patent law usually protects scientific inventions and discoveries concerning new products and processes. These include, for example, machines, manufacturing processes, and chemical or electrical structures and compositions, as long as such inventions are new, useful, and non-obvious. See, e.g., Agreement on Trade Related Aspects of Intellectual Property Rights, Including Trade in Counterfeit Goods, Apr. 15,1994, art. 27, 33 I.L.M. 81 [hereinafter TRIPS]; see also 35 U.S.C. § 101 (1997) (permitting patent protection

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copyrights,8 trademarks9 and trade secrets.10 Newly industrialized for a “new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof’); Patent Law of the People’s Republic of China, ch. I, art. 22 (1985) (giving protection to inventions that are novel, inventive, and have practical applicability); Japanese Patent Law, arts. 2, 29 (1959), reprinted in Japan, 2F W orld Patent Law & Practice (John Sinott ed., 1997) (defining an invention, hat samei, as “any high grade creation among creations of technical idea utilizing natural rules’’ and requiring novelty, non-obviousness, and ability to be “utilized in industry” for patentability); West German Patent Law, art. I, reprinted in Germany, 2D W orld Patent Law & Practice (John Sinott ed., 1997) (permitting patent protection for “new inventions which permit industrial application”). 8 Copyright law generally protects works of artistic, literary and musical expression, including books, cinematographic works, paintings, sculpture, photographic works, pantomime, and,‘more recently, computer software programs and databases. See, e.g., Beme Convention for the Protection of Literary and Artistic Works, Sept. 9, 1886, as revised July 14, 1967, art. 2/ 828 U.N.T.S: 221, 227 [hereinafter Beme Convention] (defining copyrightable subject matter as “every production in the literary, scientific and artistic domain, whatever may be the mode or form of its expression”); see also 17 U.S.C. § 102 (1997) (enumerating eight categories of protectable works under U.S. law, including, inter alia, literary, dramatic, graphic, architectural and musical works, and computer programs); (U.K.) Designs and Patents Act of 1988 (c48), pt. I, ch. I, § 1(a) (1989) (protecting literary, dramatic, musical and artistic works, computer programs, cinematographic and audio-visual works); Teruo Doi, Japan, in 2 International Copyright Law & Practice (Paul E. Geller et al. eds., 1997) (citing Japanese Copyright Act, arts. 2(1)(i), 10(1) (1970), which protects works of authorship, Chosakubutsu, which is defined as a “production in which thoughts or emotions are expressed in a creative way and which fall in the literary, scientific, artistic or musical domain” and listing as protected nine enumerated categories of literary, musical and choreographic works; paintings, woodcut prints, architectural works, maps, cinematographic works; and program works, including computer programs); Economic Law of Russia Law of the Russian Federation No. 5351-1, arts. 6,7 (1993), available in LEXIS, Intlaw Library, Rflaw File (covering “works of science, literature and the arts, that are the result of creative activity, irrespective of the purposes or merits of such works”; forms include written, oral, sounds or videorecording, image and threedimensional forms and lists as “objects of copyright,” literary, dramatic, choreographic, musical, audio-visual; paintings, sculpture, applied art, scenographic art, architecture, photographic works, maps and computer programs). 9 Trademark law generally protects corporate symbols, logos and other distinctive indicia of the origin of goods or services. Seet e.g., 'TRIPS, supra note 7, art 15 (defining a trademark as “any sign or any combination of signs, capable of distinguishing the goods or services of one undertaking from those of other undertakings”); see also 15 U.S.C. § 1127 (1997) (defining a trademark under U.S. law as “any word, name, symbol or device, or any combination thereof used by a person . , . to identify and distinguish his or her goods, including a unique product, from those manufactured or sold by others and to indicate the source of the goods, even if that source is unknown”); Japanese Trademark Law No. 127, art. 2(1) (1991), reprinted in International Intellectual Property Law : Global Jurisdictions 27 (Dennis Campbell et al. eds., 1996) (protecting “letters, figures, signs or 3-dimensional shapes,

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or any combination of these and colors”). 10 Trade secret law generally protects confidential information that has commercial value due to its secret nature and that has been the subject of reasonable steps by the person lawfully in control of the information to keep it secret. See, e.g., TRIPS, supra note 7, art. 39 (defining as “secret” protected confidential information having “commercial value because it is secret,” and having been subject to “reasonable steps” to keep it “secret”); see also Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470 (1974) (defining a trade secret under U.S. law as confidential information which is not generally known and is subject to reasonable efforts to protect its secret nature); Uniform Trade Secrets A c t § 1(4) (1985) (defining trade secrets as “information .. . that derives independent economic value . . . from not being generally known to, and not being readily ascertainable by proper means by, other persons . . . and is the subject of efforts that are reasonable under the circumstances to maintain its secrecy”); Peter Chrocziel, Germany, in W o rld Wide Trade Secrets Law § B11.02(1) (Terrence F. MacLaren ed., 1997) (stating that trade secrets are protected in Germany if the information is secret, known only to a limited number of people, subject to reasonable steps for its protection, and where the owner has a business interest in keeping it secret); Kathie Claret, France, in In ternation al W o r ld Wide Trade Secrets Law § 3.02(1 )(a) (Terrence F. MacLaren ed., 1997) (stating that France protects manufacturing secrets, secrets de fabrique, confidential business information and know-how, savoir faire)\ Kazuko Matsuo, Japan, in W o r ld Wide Trade Secrets Law § Cl.02(1) (Terrence F. MacLaren ed., 1997) (stating that Japan protects technical information that has economic value, is protected and treated as a secret, and is not publicly known); Simon Mehigan et al., United Kingdom, in W o rld Wide Trade Secrets Law § B2.01(2) (Terrence F. MacLaren ed., 1997) (stating that the United Kingdom protects information used in trade or business where the owner limits dissemination because its disclosure to a competitor would result in significant harm to the owner). The growth of trade secret protection as a topic of international protection concerns is a relatively new development. One other form of “traditional” intellectual property right that has been the subject of multinational protection is the so-called “industrial design,” also referred to as “utility models” or “utility designs.” See, e.g., Margaret Boulware et al., An Overview of Intellectual Property Rights Abroad, 16 Hous. J. Int ’ l L. 441 (1994); CHRISTINE Fellner, Industrial D esign Law (1995), Hector L. M acQ ueen, C opyright, Competition and Industrial D esign (2d ed. 1995); G uy T ritton, Intellectual Property in Europe ch. 5 (1996). “Industrial designs” generally include those designs not subject to patent protection, but having some degree of novelty or originality that warrants protection against unauthorized use. See Fellner, supra. The standards for novelty or originality of an industrial design are generally lower than for a patent or copyright. See id. See generally TRIPS, supra note 7, art. 25(a) (members to protect “independently created industrial designs that are new or original”); Roland Liesegan, German Utility Models After the 1990 Reform Act, 20 A m . Intell. Prop. L. A ss’ n Q.J. (1992) (comparing the different inventiveness requirements underlying German patent and industrial design law). Despite their potential usefulness in protecting certain design elements that could not otherwise qualify for patent or copyright protection, industrial designs, in the author’s opinion, ultimately serve little practical usefulness in constructing an intellectual property-based protection scheme to protect a developing country’s culture

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countries are faced with mounting refusals by multinational corporations to enter into joint investment or researchdevelopment deals without the assurance o f “adequate protection” for the technology the multinational corporations are expected to provide." Such “adequate protection” generally includes the enactment and subsequent enforcement in the developing countries of laws protecting intellectual property rights—laws which are heavily influenced by or modeled on U.S. or European systems." The conflict between developed and developing countries over the enforcement of intellectual property rights is one o f the most divisive legal issues of the latter twentieth century.13 Despite the against de-culturizing forces. This is because industrial designs have been subject to wide divergence in protection, more than any other form of intellectual property (with the exception of trade secrets). Moreover, the author shares the view of other scholars that utility designs form a poor basis for a future-looking protection regime. See, e.g., Ruth Gana, Prospects for Developing Countries Under the TRIPS Agreement, 29 V and. J. Transnat’ l L. 735 (1996). Consequently, the author will not discuss the use of industrial design protection as part of her proposed protection scheme. 11 For example, in 1977, Coca-Cola terminated its operations in India after being ordered to dilute domestic equity to 40% or divulge its secret formula. Operations were not resumed until 1993 when the threat of disclosure was lifted. See Coca-Cola India to Sell Shares to Public, Agence France-Presse, Oct. 26, 1997, available in 1997 WL 13421059. This is only one example, and an admittedly extreme one, of the refusal to invest in developing countries without adequate intellectual property protection. See generally Blatt et al., supra note 5, at 235 (1996); see also infra note 12 (examining the relationship between foreign investment and intellectual property rights). 12 See, e.g., Transnational Corporations and Management Divisions o f the UN Department o f Economic and Social Development: Intellectual Property Rights and Foreign Direct Investment, U.N. Doc. ST/CTC/SER.A/24 (Carlos M. Correa ed., 1993) (examining the inter-relationship between intellectual property rights and foreign investment in diverse countries); Judy Dempsey, U.S. and Israel Clash on Trade Barriers, Fin. T imes, May 30, 1997, at 6, available in 1997 WL 11031361 (reporting that weak intellectual property rights handicap Israel in attracting foreign investment); Not Quite So Sparkling China: Foreign Investment—Has Foreign Investment Peaked in China? And will It Ever Take Off in Japan?, Economist, Mar. 1, 1997, at 38 (reporting that weak intellectual property rights enforcement is slowing down foreign investment in China); Jennifer Humphrey, Mercosur Magnetism, 9 Int’ l Bus. 41-42 (1996) (reporting that stronger patent protection in Brazil results in higher foreign investment). 13 See generally Edward S. Y ambrusic, Trade Based A pproaches to the Protection of Intellectual Property (1992); The GATT Uruguay R ound: A Negotiating History (Terrence P. Stewart ed,, 1993) [hereinafter A N egotiating History]; Doris Estelle Long, The Protection o f Information Technology in a Culturally Diverse Marketplace, 15 J. M arshall J. C omp. & Info. L. 129 (1996) [hereinafter Long, The Protection of Information Technology]. The global piracy problem of the 1970s which gave impetus to the negotiation of a multilateral trade treaty specifically

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accession of over 111 countries to the Agreement on TradeRelated Aspects of Intellectual Property Rights (TRIPS),14 global piracy and the efforts required to eradicate it remain key areas o f dispute.13 Intellectual property protection undeniably impacts a broad range of international issues, including inter alia, trade,16

dealing with the problem of international protection of intellectual property rights, in the author’s opinion, was an early indication that intellectual property rights protection would take a prominent position in international affairs during the latter part of the twentieth century. For a brief history of the problems posed by global piracy and its impact on multinational trade negotiations, see Joseph A. Greenwald, The Protection o f Intellectual Rights, in GATT and the Uruguay Round: T he U.S. V iewpoint, in C onflict and Resolution in U.S.-E.C. Trade Relations at the O pening of the Uruguay R ound 229 (Seymor J. Rubin & Mark L. Jones eds., 1989); see also infra note 49 (describing the TRIPS agreement). The negotiation of such a treaty itself under the auspices of the General Agreement on Trade and Tariffs (GATT) took over seven years and was marked by intensive debate. If the negotiation of TRIPS was expected to resolve these issues, at least in the short-run, it has failed to do so. Counterfeiting remains a problem of global significance. Moreover, the question of the scope of protection to be afforded intellectual property rights is increasingly inteijected into debates dealing with such diverse topics as biodiversity, the protection of the heritage of indigenous peoples, and technology transfers. See infra notes 18-21 and accompanying text (describing the various topics and viewpoints in these debates). A speech delivered by Fidel Castro at the 1992 Rio de Janeiro Conference on Biodiversity is only one example of the increasing passions which underscore these issues. For further description of Castro’s speech, see infra note 19. 14 See TRIPS, supra note 7. 15 A major impetus behind negotiations that led to the TRIPS Agreement was the desire of developed countries to combat global piracy. For a more detailed discussion of earlier efforts to combat piracy under GATT auspices, and the role of these anti­ counterfeiting activities in connection with the negotiation of TRIPS during the Uruguay Round, see Doris Estelle Long, Copyright and the Uruguay Round Agreements: A New Era o f Protection or An Illusory Promise?, 22 Am. Intell. Prop. L. ASS’ N Q.J. 531, 535-47 (1995) [hereinafter Long, Copyright and the Uruguay Round Agreements]. The enactment of TRIPS, however, has not eliminated the problem of global piracy. See infra note 40 (describing the continuing problem of global piracy). 16 The TRIPS Agreement negotiated during the Uruguay Round of GATT represents the clearest acknowledgment of the trade nature of intellectual property rights enforcement. Not only was it negotiated as part of a multinational trade treaty, TRIPS itself recognizes in its preamble the critical role of enforcement of intellectual property rights “to reduce distortions and impediments to international trade . . . and to ensure that measures and procedures to enforce intellectual property rights do not themselves become barriers to legitimate trade.” TRIPS, supra note 7, pmbl., cl. 1.

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technological development,17 wealth-transfer,18 environmental 17 Intellectual property law historically has been related to the protection of technological advances. Thus, for example, copyright law has long served as a critical method for protecting the products of new technologies. The first U.S. copyright statute protected a relatively limited category of works—maps, charts, and books. See Copyright Act of 1790, Act of May 31, 1790, ch. 15, 1 Stat. 124. Subsequent revisions reflected the advance of technology, adding, respectively, photographs, motion pictures, and computer programs. See Copyright Act of 1865, 13 Stat. 530; Copyright Act of 1909, 35 Stat. 1075 (1909), repealed by Copyright Act of 1949, 61 Stat. 668, amended by Copyright Amendments of 1980, 94 Stat. 3028 (codified as amended 17 U.S.C. § 1 (1997)); Copyright Amendments of 1980, Pub. L. No. 96-517, § 10, 94 Stat. 3028. Patents have reflected a similar growth in scope ,of protection, from mechanical and chemical processes, to bacteria, see Diamond v. Chakrabarty, 447 U.S. 303 (1980), and computer programs, see Diamond v. Diehr, 450 U.S. 175 (1981). The scope of protection granted intellectual property rights currently serves as one of the key sources of debate between developed and developing countries regarding the cost of access to technological advances. See generally Long, The Protection o f Information Technology, supra note 13 (discussing the relationship between technology and intellectual property rights); see also infra note 18 (giving examples of the range and tenor of the debate between developed and developing nations regarding the scope of protection to be afforded intellectual property rights in technology). 18 The transfer of technology from developed to developing countries has been the subject of intense international debate. See, e.g., A ssafa Endeshaw, Intellectual Property Policy for Non-Industrial Countries (1995); Ruth L. Gana, U.S. Science Policy and the International Transfer o f Technology, 3 J. T ransnat’ l L. & Pol ’ y 205 (1994); David M. Hang, The International Transfer o f Technology: Lessons that East Europe Can Learn from the Failed Third World Experience, 5 Harv. J.L. & Tech. 209 (1992); Long, Copyright and the Uruguay Round Agreements, supra note 15; J.H. Reichman, The TRIPS Component o f the GATT's Uruguay Round: Competitive Prospects for Intellectual Property Owners in an Integrated World Market, 4 Fordham Intell. Prop. M edia & Ent. L.J. 171 (1993). This debate is fueled in part by the belief among developing nations that without the technology “wealth” of the industrialized nations they will continue to remain poor step-children of their richer, and in many cases former colonial, masters. See, e.g., Fidel Castro, Tomorrow is T oo Late: Development and the Environmental Crisis in The T hird W orld (Ocean Press 1993). In a report circulated at the 1992 Ekth Summit in Rio de Janeiro, Fidel Castro tied Third World poverty, environmental protection, and sustainable development to present intellectual property protection schemes. Castro stated, in pertinent part: Today more than ever, the underdeveloped countries urgently need access to knowledge, to scientific and technological development. This is not only because it would allow them to solve infinite economic, social and ecological problems, but because, in the current stage of capitalist development, scientific knowledge plays a principal role in the accumulation of capital. . . . Through the possibilities presented by the modem development of modem biotechnology, the genetic resources of the underdeveloped world have gained extraordinary value . . . . In fact, the possession and control of genetic resources constitutes a new way of plundering the Third World, which has

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protection,19 sustainable development20 and cultural patrimony.21 become the main objective of those transnational corporations involved in this field. . . . The privatization boom, together with the need to maximize profit, are having a growing impact on the new mechanisms for controlling copyrights of biotechnological advances, and even on the control of the national heritage of the underdeveloped countries. Attempts are being made to impose a patent system on the underdeveloped countries which . . . does not recognize the right of these countries to enjoy the profits made . . . . Due to the fragility of the ecosystems of the underdeveloped nations and the lack of resources available for them to confront the deterioration of the environment, the transfer of environmentally sound technology is an essential component of sustainable development. . . . As a consequence of the profound transformations brought about by the current scientific and technological resolutions, there have been significant changes in the corporate strategies of transnational companies. These corporate strategies promote the formation of strategic alliances among firms in the developed nations in order to confront the rising costs of research and development and to guarantee greater protection of copyrights. This lessens the transfer of technology to the Third World. These new corporate strategies have met with strong support from the industrialized nations. In effect, the governments of these countries, particularly that of the United States, have pushed strongly in the Uruguay Round for stricter and more uniform norms regarding the protection of intellectual property rights. The establishment of these kinds of protective measures would result in rising costs for imported technology, especially in the industries that make intensive use of patented procedures. This entails additional demands for financial resources in the underdeveloped nations, which must be taken into account where new agreements and protocols are signed for the protection of the environment. Id. at 32-40. This speech strongly reflects the views of developing countries that intellectual property represents the “common heritage of mankind,” and should be freely available. The position papers presented by India, Brazil, and other developing countries during the Uruguay Round Negotiations reflect similar views. See Y ambrusic, supra note 13 (reprinting diverse position papers including those of the Republic of Korea, Brazil, Peru, and India); see also A N egotiating History, supra note 13 (discussing the debates and issues during the GATT Uruguay Round). 19 See supra note 18 for Fidel Castro’s views on the value and exploitation of underdeveloped countries’ ecological resources; see also Edgar J. Asebey & Jill D. Kempenaar, Biodiversity Prospecting: Fulfilling the Mandate o f the Biodiversity Convention, 28 V and. J. T ransnat’ l L. 703 (1995); David R. Downes, New Diplomacy for the Biodiversity Trade: Biodiversity, Biotechnology and Intellectual Property in the Convention on Biological Diversity, 4 T ouro J. T ransnat’ l L. 1 (1993); David Hurlbit, Fixing the Biodiversity Convention: Toward a Special Protocol for Related Intellectual Property, 34 N at. Resources J. 379 (1994) (discussing the relationship between bio­ diversity and the protection of intellectual property rights).

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Each topic warrants its own in-depth examination. This Article has a more modest goal. It focuses on the threat of globalization to native and indigenous culture22 and presents potential solutions, 20 See supra note 18 for various sources detailing the divergent views on technology transfers from developed to developing nations. 21 See Bellagio Declaration, Mar. 11, 1993, reprinted in International Intellectual Property A nthology 107 (Anthony D’Amato & Doris Estelle Long eds., 1996) (supporting the development of neighboring (or related) rights regimes to protect “folkloric works," “works of cultural heritage,” and “biological and ecological ‘know-how’ of traditional peoples”) [hereinafter Bellagio Declaration]; see also E.P. Gavrilov, The Legal Protection o f Works o f Folklore, 20 C opyright 76 (1984); Doris Estelle Long & Anthony D’Amato, Intellectual Property as Culture, reprinted in International Intellectual Property A nthology 95 (Anthony D’Amato & Doris Estelle Long eds., 1996). The term “cultural patrimony” has been variously defined as “antiquities,” “cultural goods,” and “cultural property.” Lisa J. Boradkin, The Economics o f Antiquities Looting and a Proposed Legal Alternative, 95 Colum. L. Rev . 377 (1995) (“antiquities”), Victoria J. Vitrano, Protecting Cultural Objects in an Internal Border-Free EC: The EC Directive and Regulations for the Protection and Return o f Cultural Objects, 17 Fordham Int ’ l L.J. 1164 (1994) (“cultural goods” and “cultural property”). Similarly, “cultural patrimony” has been defined as “an object having ongoing historical, traditional, or cultural importance central to the . . . culture itself. . . and which . . . cannot be alienated, appropriated, or conveyed by any individual . . . .” Native American Graves Protection and Repatriation Act of 1990, 25 U.S.C. § 3001 (3)(D) (1997). Moreover, UNESCO defines “cultural property” as “property which, on religious or secular grounds, is specifically designated by each state as being of importance for archeology, prehistory, history, literature, art or science . . . .” Convention on Illicit Transfer, supra note 2, art. I, 823 U.N.T.S. at 231. The protection scheme the author proposes in this Article might be applied to cultural elements that fall within these varied definitions, but should not be considered limited to objects of “cultural patrimony.” Moreover, as the definitions contained herein demonstrate, the definition of “cultural patrimony” varies depending on the goals sought to be achieved. Thus, the issue of which elements of a country’s culture require protection in accordance with the regime proposed herein necessarily will vary in accordance with the needs and views of the culture at issue, and the strength of the deculturizing forces it faces. 22 Most multinational treaties and draft treaties regarding the protection of culture use the term “indigenous peoples” or “indigenous culture” to refer to the culture of a particular people. See, e.g., International Labour C onference, Convention Concerning Indigenous and Tribal Peoples in Independent Countries, art. 1, para. 1(b) (1989), reprinted in 15 Okla. City U. L. R ev. 237, 238 (1990) (categorizing people as indigenous peoples “on account of their descent from the populations which inhabited the country, or a geographical region to which the country belongs, at the time of conquest or colonisation or the establishment of present state boundaries and who, irrespective of their legal status, retain some or all of their own social, economic, cultural and political institutions”). But see Tunis Model Law on Copyright for

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using intellectual property laws as the framework. Part I of this Article briefly examines the impact o f globalization on native and indigenous culture, seen through the prism o f intellectual property rights.23 In Part n, present international standards for intellectual property rights protection are set forth, with a primary emphasis on TRIPS standards as the international norm.24 Finally, Part HI proposes changes in intellectual property laws that developing countries can make that will assure protection of their culture and comply with international standards.25 In effect, this solution permits developing countries to utilize demanded-for intellectual property rights as a sword and shield against the deculturizing forces o f globalization and foreign investment. Part IV concludes by summarizing the problems faced by developing countries and by providing potential solutions to these problems afforded by international intellectual property protection regimes.26

I. Coca-Colonization and McWorld—De-Culturization in the Global Marketplace The presence of foreign investment and the subsequent development of a commercial culture that facilitates participation in the global marketplace can have an adverse impact on indigenous culture.27 The “Coca-colonization” o f non-Westem, Developing Countries, UNESCO Pub. No. 92-3-101 463-3 (1976) [hereinafter Tunis Model Law] (suggesting protection for works of “national folklore** (emphasis added)). Despite this apparent equivalency, the author submits there may be a perceived distinction between need for specialized protection depending on the dominant nature of the culture at issue. Thus, for purposes of this Article the term “indigenous culture” refers to the culture of the original inhabitants of a particular country or region. “Native culture,” by contrast, refers to the culture of non-indigenous peoples. For example, in the United States, “indigenous culture” would be represented by the Native Americans and Native Hawaiians while “native culture” would be represented by subsequent tribal and regional groups, including long-standing immigrant groups. The terms are not precise but are used simply to indicate that both cultures may be considered deserving, and in need, of protection against harmful de-culturization. 23 See infra notes 27-42 and accompanying text. 24 See infra notes 43-142 and accompanying text. 25 See infra notes 143-207 and accompanying text. 26 See infra section IV. 27 There is no question commodification of culture leads to certain, albeit limited,

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non-capitalist societies is a documented fact of twentieth century life.28 Symbolized by the spread of a global, commercial culture based largely on Western consumer images of technological advancement and popular culture—fast food, fast computers, fast music and fast news, purveyed by such well-known multinational corporations as KFC, Microsoft, MTV and CNN—Cocacolonization has become the new economic imperialism of developed countries.29 The key aspect of this Coca-colonized global commercial culture is image—modem, forward-moving and above-all conspicuous consumerism.30 benefits. Eco-tourism must be credited at least in part for preservation of wildlife and natural parks to fill consumer demand. See, e.g., Larry Tye, Eco Tourism, Boston G lobe, Sept. 1, 1989, available in 1989 WL 4909142; Valerio, supra note 3. Similarly, the dissemination of culture, by commodification into souvenirs and tourist ceremonies at least serves to broaden the reach of such culture, though in a bastardized form. Such dissemination may facilitate cross-cultural exchanges that enrich both parties. See infra note 30 (listing articles on the potential benefits that can accrue from these exchanges). These potential benefits, however, do not eradicate or exceed the harms of de­ culturalization that may accompany commodification. 28 The term “Coca-colonization” appears in Ulf Hannerz, Cultural in the Social O rganization of M eaning 217 (1992). “Cocacolonization” generally refers to the global homogenization which arises from the replacement of local products with mass produced goods, which usually originate in the industrialized countries of the West. See David Howes, Introduction: Commodities and Cultural Borders, Cross-Cultural Consumption: G lobal M arkets, L ocal Realities 3 (David Howes ed., 1996). Other terms used to refer to this twentiethcentury phenomenon include “Neo-Fordism,” L. Grossberg, W e Gotta Get O ut of T his Place: Popular Conservatism and Post M odern Culture (1992); “cultural imperialism,” John Tomlinson, Cultural Imperialism (1991); and “ MeWorld,” Complexity: Studies

Benjamin R. Barber, Jihad v . M cW orld: Reshaping the W orld (1996). See generally

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infra notes 29-37 and accompanying text (discussing the cultural impact of mass produced goods); see also Howes, supra, at 3-8 (discussing the universalist and transcultural aspects of Coca-Cola’s image, and the role that the image has on the internalization of American political ideology). 29 The author does not mean to suggest that the cultural-leveling effect of Cocacolonization is solely a problem for developing countries. To the contrary, the “traditional” American culture of mom and pop enterprises, local bookstores, and the proverbial “Main Street USA” has given way to mega-stores, malls, and all of the other fast food, fast-living, convenience-driven life style represented by “Coca-colonization.” See, e.g., Jim Duffesne, Specialty Outdoor Outlets Feeling Pinch from Chain Stores, Grand Rapids Press (Iowa), Oct. 25, 1997, available in 1997 WL 15625337; Holly Rosenkrantz, Latte, Anyone?, Fairfield County Bus. J. (Conn.), Sept. 23, 1996, at 1, available in 1996 WL 855023. Thus, even the Western industrialized societies that spawned the phenomenon must deal with its adverse affects. 30 See, e.g., Barber, supra note 28 (examining the conflict between global

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Benjamin R. Barber coined the term “McWorld” to describe this growing trend toward a homogenized, global marketplace, notable for its absence of recognizable national boundaries.31 He stated: What just a few years ago, Robert Reich called “the coming irrelevance o f corporate nationality,” is not coming anymore. It is h ere Thomas Jefferson’s warning that merchants have no country has become a literal truth for the multinational corporations of McWorld. And the markets they ply now a days are more anonymous still. How are nations to control the market in pirated software or smuggled plutonium? . . . Has it even got an address?32

According to Barber, “McWorld” exists outside of national or commercial culture and Third World values); Celia Lury , Consumer C ulture (1996) (examining, inter alia, globalization and consumer culture); Monroe Price & Aimee Brown Price, Custom, Currency and Copyright: Aboriginal Art and the $10 Note, Cardozo L ife, Fall 1996, at 19 (exploring the conflict between aboriginal rituals and commercial demands for art); Michael Blakeney, Milpurrurru & Ors. v. Indofum Pty Ltd. & Ors—Protecting Expressions o f Aboriginal Folklore Under Copyright Law (visited Aug. 21, 1997) (exploring the conflict between aboriginal rituals and commercial art). The author does not intend to suggest that the cross-cultural borrowing represented by “McWorld” is unique to the twentieth century or that all cross-cultural borrowing is necessarily harmful or destructive. To the contrary, cross-cultural borrowing may enrich the native culture and may also lead to greater mutual tolerance of cultural differences. See David Howes, Cultural Appropriation and Resistance in the American Southwest: Decomodifying ‘Indianness, ’ in C ross-C ultural C onsumption: Global M arkets, Local Realities 156 (1996) [hereinafter Howes, Cultural Appropriation and Resistance in the American Southwest], However, the author believes that cross-cultural borrowing that results in de-culturization represents the type of destructive borrowing that countries may, and should, wish to control. Furthermore, although this Article focuses on the use of intellectual property laws to protect the culture of Third World countries, concern over de-culturization is not limited to the Third World. To the contrary, French and Canadian efforts to protect their culture from the leveling effects of U.S. television and movies is well-known. See Lawrence G.C. Kaplan, The European Community's Television Without Frontiers Directive: Stimulating Europe to Regulate Culture, 8 Emory Int’ l L. Rev . 255 (1994) (discussing the use of the Television Without Frontiers Directive by the EC to protect European culture from globalization); Stacie I. Strong, Banning The Cultural Exclusion: Free Trade and Copyrighted Goods, 4 Duke J. Comp. & Int’ l L. 93 (1993) (examining the use of cultural exclusions under the Canadian Free Trade Agreement to protect Canadian culture from dominance by the U.S. broadcasting industry). 31 See B arber, supra note 28, at 231. 32 Id.

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political boundaries. It is “a product of popular culture driven by expansionist commerce . . . . It is about culture as commodity, apparel as ideology.”33 It seems that the opening o f non­ industrialized countries to the global marketplace is invariably accompanied by the arrival of Western commercial culture. Icons such as Mickey Mouse, Ronald McDonald, and Barbie are known throughout the world.34 The arrival of a global commercial culture brings the all-toocommon de-culturization of traditional customs, rituals and folklore in order to allow their streamlining for mass consumption. For example, the traditions o f the Maori in New Zealand, the native Hawaiians and native Americans in the United States, and certain indigenous cultures o f Latin America have become commercialized to such an extent that their cultural and religious significance has been virtually erased from public memory. Thus, tourists in New Zealand watch performers clad in bastardized versions of “traditional” Maori dress perform a welcoming ceremony although the performers have no concept of, or appreciation for, the cultural significance of such rituals.35 In Peru, local workers manufacture and sell replicas of golden artifacts symbolizing Incan culture with no remembrance or connection to the heritage that created such artifacts.36 In the United States, the names of native American tribes and historical personages have been used to name and adorn every type of consumer “good” imaginable, including sports teams, T-shirts, and alcoholic beverages.37 33 Id. at 13,17. 34 Indeed, in a recent trip to Cuba, the author discovered a photo studio which used Mickey Mouse to advertise its child portrait services despite a U.S. embargo that should have made this icon virtually unknown in the country. 35 See, e.g., Maoris to Develop Mark o f Authenticity, T r a v e l T r a d e G a z e t t e E u r o p a , Sept. 5, 1996, at 30, available in 1996 WL 16536096. 36 See supra notes 29*30 (discussing the leveling effects of cultural commodification); see also Cross-C ultural Consumption, supra note 28 (containing diverse articles exploring the impact of globalization on local culture). 37 See infra note 42 (discussing the perceived lack of benefit afforded developing countries from the enforcement of intellectual property rights); see also Howes, Cultural Appropriation and Resistance in the American Southwest, supra note 31, at 142-44. Howes describes a controversy involving a comic book entitled ‘The Kachinas Sing of Doom,” published in March 1992 by Marvel Comics. In this comic book, the villains

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This transformation of “indigenous culture” into a deculturized, marketable commodity may be facilitated and, potentially even accelerated, by the development and enforcement of the intellectual property laws required to attract foreign investors. Such laws may exacerbate this de-culturization by promoting “McWorld” over native traditions and customs.38 The products o f culture that have the greatest value in the global marketplace, at least for the present, appear to be those o f the technologically developed, industrialized countries.39 Patented drugs, copyrighted videos, records and computer programs, and trademarked fast food franchises are “hot commodities” in the are white members of a local gambling cartel who wear Kachina masks and costumes as disguises. The use of such imagery is directly contrary to the transformative power represented by the masks in the Hopi religion. The Kachina mask does not serve as a disguise. Instead, the wearer is transformed into the spirit represented by the mask. See id. David Howes posits that the harm caused by this de-culturization is actually two­ fold. The first he calls “the dilution of tradition,” which results in the undermining of the culture’s fundamental beliefs by incorporating the misconceptions derived from the de-culturization. In the case of the Marvel Comics, the misconception would be that masks are for disguise, not revelation. See id. at 143. The second harm he calls “the dissemination of tradition,” which is the loss of control over public dissemination of “culturally sensitive information.” Id. Where, as in the Hopi culture, the ritual or information is considered sacred, or restricted only to initiates, its uncontrolled public dissemination is directly contrary to the cultural precepts in which it arises. See id. at 143-44; see also Blakeney, supra note 30 (examining the adverse impact on Pitjantjara culture of an anthropology textbook which disclosed secret rituals). Both harms, in the author’s opinion, qualify as de-culturizing harms against which protection should be provided. Protection against the harm of unauthorized “dissemination” should be carefully exercised since it could lead to harmful censorship. See infra notes 171-73 and accompanying text (examining censorship issues). 38 See, e.g., Constance Classen, Sugar Cane, Coca-Cola and Hypermarkets: Consumption and Surrealism in the Argentine Northwest, in C ross-C ultural Consumption, supra note 28, at 39, 42-43 (examining the adoption of Coca-cola and other Western products and traditions into the culture of Northwestern Argentina to such an extent that they are considered indigenous); Mary M. Crain, Negotiating Identities in Quito’s Cultural Borderlands: Native Women’s Performances for the Ecuadorian Tourist Market, in Cross-C ultural Consumption, supra note 28, at 125, 137 (examining de-culturizing forces on the hotel labor force and the tourist market’s presentation of “native” culture). For a contrasting view of the impact of globalization on native traditions, see Carol Hendrickson, Selling Guatemala: Maya Export Products in U.S. Mail-Order Catalogues, in C ross-C ultural Consumption, supra note 28, at 106, 112-13 (examining the methods used to market native products through references to “tradition,” “uniqueness” and environmental protection benefits). 39 See infra note 40 (discussing the type and quantity of goods pirated from industrialized nations).

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global marketplace.44 By contrast, developing countries currently do not possess a large body of protected works created by their own authors, inventors or native culture which can find a ready international market.41 Thus, the recognition and enforcement o f intellectual property rights may be seen as providing little benefit to the developing countries themselves.42 40 Perhaps the most telling evidence of the global desirability of these products is the amount of revenues lost as a result of the pirating of such goods. According to the Intellectual Property Alliance, in 1995, the United States lost an estimated S6.9 billion in exports due to foreign counterfeiting of movies, records, books, and software. See Bruce Stokes, The Diminishing Return o f Slapping China for Piracy o f U.S. Copyrights, L.A.TlMES, May 26, 1996, at M2. The Pharmaceutical Manufacturer’s Association estimates lost revenue due to pirating of patented drugs exceeds three billion dollars. See id.\ see also Eric Smith, Worldwide Copyright Protection Under the TRIPS Agreement, 29 V and. J. Transnat’ l L. 559 (1996). The Software Business Alliance claims that in 1996, the U.S. lost over $11.2 billion as a result of the illegal copying and distribution of computer software worldwide. See Berta Gomez, Global Software Piracy Continues to Rise, Says New Survey (visited July 1997) . For an interesting examination of the history and impact of global copyright infringement, see John G urnsey, Copyright T heft (Aslib Gower ed., 1995). 41 The only exception may be de-culturized items created for the tourist market and some mail-order catalogue creations. See Hendrikson, supra note 38. 42 See, e.g., Carlos Alberto Primo Braga, The Economics o f Intellectual Property Rights and the GATT: View from the South, 22 V and. J. T ransnat’ l L. 243 (1989) (examining Third World views regarding the harm caused by intellectual property rights protection); Long, The Protection o f Information Technology, supra note 13 (discussing developing countries’ view that technology is “the common heritage of mankind”). Furthermore, such laws might actually be perceived as harmful since they might be used to solidify rights in the de-culturized aspects of native culture in the hands of the commodifier. For example, in the United States the names of various Native American tribes and historical figures have been used in connection with sports teams and consumer products, including alcoholic beverages such as Crazy Horse beer. The users of these de-culturized products of Native American culture have sought trademark protection for such uses, thus investing their use with the benefits of proprietorship. See, e.g., Richard A. Guest, Intellectual Property Rights and Native American Tribes, 20 Am. Indian L. Rev. I ll (1996) (discussing the Crazy Horse case, among others). Although efforts have been made to challenge these attempts at appropriation, see Cathryn Claussen, Ethnic Team Names and Logos—Is There a Legal Solution?, 6 M arq . Sports L. J. 409 (1996) (briefly analyzing efforts to remove federal trademark registrations of team names using ethnic terms), they are not always successful. A recent attempt to challenge the use of the mark “The Original Crazy Horse Malt Liquor” ultimately failed on First Amendment grounds. See Homell Brewing Co. v. Minnesota Dept, of Public Safety, Liquor Control Division, 553 N.W,2d 713 (Minn. Ct. App. 1996). Descendants of the original Chief Crazy Horse challenged the unauthorized use of their ancestor’s name. See id. at 715. The association was considered particularly

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Given these concerns, newly industrialized countries may be faced with a painful dilemma—seek foreign investment to advance their technological and industrial base at the risk o f potentially irreversible harm to indigenous and native culture or protect such culture at the cost of technological advancement. This author contends that there may be a workable solution to this problem, based on the very intellectual property laws that seem to contribute to the problem.

II. Current International Intellectual Property Protection Regimes Most intellectual property law models are based on Western, capitalist philosophy, and indeed appear to be developed with such a world view in mind.43 The mere fact that works of intellectual pernicious since Chief Crazy Horse did not drink alcoholic beverages and had even argued against the evils of alcohol during his lifetime. Although the label was originally held illegal for its misleading affiliation with an American Indian leader, the decision was ultimately reversed for violating the brewing company’s First Amendment free speech rights. See id. at 719. 43 See, e.g., A ssafa Endeshaw, Intellectual Property Policy for NonIndustrial Countries (1996). Although it is the author’s position that Western capitalist views do not necessarily have to be adopted in order to comply with present international standards, there is no question that most models appear to incorporate the individuated property views of the West. See infra note 49 and accompanying text (discussing the role of “private rights” in international intellectual property models). For example, protected works under the copyright laws of the developed countries generally require an individual, recognizable author to whom exploitation rights for these works are granted. See supra note 9 and infra notes 45-47 and accompanying text for a discussion of these laws. Such individuated rights by their nature preclude recognition of the governmental or societal ownership views of a socialist economic system. Thus, although pre-Soviet Russia boasted intellectual property laws that recognized ownership and exploitation rights for the individual author or inventor, such rights were eliminated under the socialist system of the Soviet Union. See, e.g., Endeshaw, supra, at 75-79; see also Irina V. Savaleya, Copyright in The R ussian Federation (1993) (discussing pre-Soviet patent laws in Russia). These rights were re-established after the collapse of the Soviet Union and the re-emergence of a market economy. See id. Similarly, the individuated property rights of Western intellectual property systems appear to preclude recognition of commutarian or tribal authorship which underlies much of the intellectual property rights of the indigenous and native cultures of the developing countries. See, e.g., V aluing Local Knowledge: Indigenous Peoples and Intellectual Property Rights (Stephen B. Brush & Doreen Stabinsky eds., 1996); Rosemary J. Coombe, The Properties o f Culture and The Politics of Possessing Identity: Native Claims in the Cultural Appropriation Controversy, 6 CONST. J.L. & Juris. 249 (1993); Madhaui Sunder, Authorship and Autonomy As Rites o f Exclusion: The

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creativity and innovation, so-called “works o f the mind,” are granted the status of protectable individual property itself represents a Western view.44 It is no coincidence that intellectual Intellectual Propertization of Free Speech in Hurley v. Irish-American Gay, Lesbian and Bisexual Group of Boston, 49 Stan. L. Rev . 143 (1997). As the Bellagio Declaration recognized: Contemporary intellectual property law is constructed around a notion of the author as an individual, solitary and original creator, and it is for this figure that its protections are reserved. Those who do not fit this model—custodians of tribal culture and medical knowledge, collectives practicing traditional artistic and musical forms, or peasant cultivators of valuable seed varieties . . . are denied intellectual property protection. Bellagio Declaration, supra note 21, at 108. Consequently, recent efforts to extend protection to communtarian works such as folklore have focused on sui generis regimes outside traditional intellectual property schemes. See supra notes 166-71 (discussing the author’s proposed protection scheme). As discussed more fully below such sui generis schemes are not mandated under current international standards, and may even be counterproductive, in the author’s opinion, because they unnecessarily place the protection of such works outside the mainstream of intellectual property protection. Such “special” status not only slows the extension of protection on a global scale (because new accords must be developed), it also makes such protection less likely, because there is no pre-existing framework on which to develop an international protection regime. 44 In To Steal a Book is an Elegant Offense, William Alford cogently examines the “problem” of intellectual property enforcement in China and makes a strong case for the view that property-based views of such protection are contrary to Chinese culture. Alford explains that “interaction with the past is one of the distinctive modes of intellectual and imaginative endeavor in traditional Chinese culture.” W illiam A. A lford, To Steal a Book is an Elegant Offense: Intellectual Property L aw in Chinese Civilization 28 (1995) (footnote omitted). Such interaction requires both

unfettered access to information in all forms, including written, musical and painted forms, and unfettered distribution of those forms deemed useful by the pertinent authorities. This type of access and distribution exists outside the merchant guilds and printers monopolies that characterized the development of intellectual property rights in Europe. See also Liwei Wang, The Chinese Traditions Inimical to the Patent Law, 14 N.W. J. Int’ l L. & Bus. 15 (1993). Tribal cultures have a communitarian view of property and information that similarly does not translate to individual proprietorship. See R onald V. Betty, Copyrighting Culture: The Political Economy of Intellectual Property 12-13 (1996) (Indian and Balinese traditions); Christopher Byrne, Chilkat Indian Tribe v. Johnson and Nagpra: Have We Finally Recognized Communal Property Rights in Cultural Objects?, 8 J. Envtl. L. & LrriG. 109 (1993) (Native American traditions); Ruth Gana, Has Creativity Died In the Third World? Some Implications of the Internationalization o f Intellectual Property, 24 Denv. J. Int’ l L. & Pol ’ y 109, 132-37 (1995) (diverse aboriginal traditions); Philip McCabe & Brent Porter, Of Lore, Law and Intellectual Property, 27 IP W orld 23 (1995) (Maori traditions).

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property rights were first recognized in Western Europe where individual ownership of property was possible.45 The Western model for protecting works o f cultural and intellectual creativity is based largely on the recognition o f property rights granted to creators o f the work in question.44 These property rights give creators the legal right to control the use o f their creations, including control over the economic terms on which they will allow their commercial commodification and dissemination.47 Despite the historical role that Western views o f property ownership have played in the growth o f intellectual property rights,48 the adoption of such Western views is not 45 The first reported copyright law was enacted in England in 1710. See Statute of Anne, 8 Anne, c. 19 (1710). The first reported trademark type regulation may have been enacted in Venice in the Middle Ages. See Stephen P. L adas, T he International Protection of Industrial Property 8-9 (1930). Multinational treaties governing intellectual property rights were similarly first established in Europe, including, most notably, the Beme Convention for the Protection of Literary and Artistic Works in 1886 and the Paris Convention for the Protection of Industrial Designs in 1883. See B enjamin Kaplan, A n Unhurried V iew of Copyright (1967); Frank Schechter, The Historical Foundations of the Law Relating to Trade-M arks (1925). See generally Donald Chisum & M ichael Jacobs, Understanding Intellectual Property Law (1992); M arshall Leaffer, Understanding Copyright Law (1995). 46 For example, Article I of the U.S. Constitution grants Congress the right to “promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.” U.S. Const, art. I, § 8, cl. 8. Pursuant to this clause, copyright owners are granted a proprietary interest in their protected works, see 17 U.S.C. § 106 (1997), and inventors are granted similar rights over their patented inventions, see 35 U.S.C. §§ 154, 271 (1997). See generally M ark R ose, A uthors and Owners: T he Invention of Copyright (1993); Stephen L. Carter, Does It Matter Whether Intellectual Property Is Property?, 68 Chi.-Kent L. Rev. 715 (1993); Wendy J. Gordon, A Property Right in Self-Expression: Equality and Individualism in the Natural Law o f Intellectual Property, 102 Y ale L.J. 1533(1933). 47 For example, U.S. copyright law grants authors five exclusive rights over their protected works, including the right to authorize the reproduction and distribution of the work, in whole or in part. See 17 U.S.C. § 106 (1997). Other countries grant similar rights. See United Kingdom Designs and Patents Act of 1988 (c48), pt. I, ch. I, § 16(1) (1989); Law of the People’s Republic of China arts. 21, 45 (1990), reprinted in United N ations Educational, Scientific and Cultural Organization, 1 Copyright L aws and T reaties of the W orld (Supp. 1990); Russian Federal Law on Copyright and Neighboring Rights art. 15 (1993), reprinted in United N ations Educational, Scientific and Cultural O rganization, 3 Copyright Laws and Treaties of the W orld (Supp. 1995).

48 See supra note 45 (discussing Western intellectual property law development).

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necessarily required under current international standards.49 To the contrary, using TRIPS50 as the source for current international intellectual property protection norms, the author believes that a domestic system of protection can be created to meet these international standards while providing the flexibility required to assure that indigenous cultures and traditions can be protected and, more importantly, nurtured. TRIPS is the most recent, and most comprehensive, multinational treaty which deals with the protection of all four “traditional” forms of intellectual property.51 For the source of its

49 The author does not mean to suggest that TRIPS cannot be seen as representing the Western capitalist view of intellectual property rights as individual property rights. Accord Marci Hamilton, The TRIPS Agreement: Imperialistic, Outdated and Overprotective, 29 V and. J. Transnat’ l L. 613, 616 (1996); J.H. Reichman, Beyond the Historical Lines of Demarcation: Competition Law, Intellectual Property Rights, and International Trade After the GATT's Uruguay Round, 20 BROOK. J. Int’ l L. 75, 113 (1993). TRIPS itself recognizes that intellectual property rights are “private rights.” TRIPS, supra note 7, pmbl., cl. 4. However, this recognition must be balanced with the equivalent recognition in TRIPS of “public policy objectives of national systems for the protection of intellectual property, including developmental and technological objectives,” and the need for “maximum flexibility” to allow developing countries “to create a sound and viable technological base.” Id. pmbl., els. 5, 6. Furthermore “private rights,” do not necessarily mean “property” rights as that term is defined under Western philosophy, particularly since several articles in the Agreement concern “unfair competition” issues. See, e.g., TRIPS, supra note 7, arts. 39-40 (protecting undisclosed information as “ensuring effective protection against unfair competition as provided in Article 10*1* of the Paris Convention” and permitting members to prohibit licensing conditions or practices that “constitute an abuse of intellectual property rights having an adverse effect on competition in the relevant market”). Even though TRIPS may be seen as a pro-developed country regime, as demonstrated more fully below, it does not require standards that impose such a regime. 5° TRIPS, supra note 7. Because of broad support in the international community for TRIPS—over 111 countries signed it initially—-TRIPS undoubtedly serves as an international standard for protection. Most of its provisions incorporate pre-existing international treaty provisions which have long served as the basis for international protection standards for intellectual property rights. See infra notes 51-142 and accompanying text (discussing TRIPS). Although TRIPS contains significant gaps in coverage, including, perhaps most importantly, copyright protection i n' a digital environment, it is a forward-looking multinational treaty that arose from a lengthy negotiation process involving most of the countries of the world. See Long, Copyright and the Uruguay Round Agreements, supra note 15, at 2281-91, for a detailed examination of the negotiating history of TRIPS. 51 See TRIPS, supra note 7. See supra notes 8-11 for a brief review of the general attributes of the four “traditional” forms of intellectual property that are pertinent to the

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international protection norms, TRIPS relies on the longestablished, minimum substantive norms contained in the Beme Convention for the Protection of Literary and Artistic Works (governing copyrights)52 and the Paris Convention for the Protection of Industrial Property (governing patents and trademarks).53 Although a detailed discussion o f these critical multinational treaties is beyond the scope o f this Article,54 each o f issue of protection against de-culturization—patents, copyrights, trademarks and trade secrets. Negotiated under the Uruguay Round of GATT, TRIPS not only establishes multinational protection norms, it represents the growing international acknowledgment that intellectual property rights are an item of trade. See generally Long, Copyright and the Uruguay Round, supra note 15. Furthermore, unlike previous multinational treaties affecting intellectual property rights, TRIPS established minimum enforcement standards and had the force of GATT (now WTO) sanctioning mechanisms to compel compliance. See infra notes 91-142 and accompanying text for a more detailed discussion of TRIPS. 52 See supra note 9. 53 See Paris Convention for the Protection of Industrial Property, Mar. 20, 1883, revised by July 14, 1967, 21 U.S.T. 1629 [hereinafter Paris Convention]. TRIPS incorporates Articles 1-21 of the Beme Convention and Articles 1-12 and 19 of the Paris Convention. See TRIPS, supra note 7, arts. 9,2. These incorporated articles contain the major substantive law provisions of their respective treaties. Despite the incorporation of these standards, the author does not mean to imply that TRIPS merely reflects the older protection regimes of the Paris and Beme Conventions. To the contrary, TRIPS represents a marked advance over these regimes. While international protection under the Beme and Paris Conventions established some substantive protection norms, many standards were left to domestic law norms. See Ruth Gana, Prospects for Developing Countries Under TRIPS Agreement, 29 V and. J. Transnat’ l L. 735 (1996). The resulting patchwork of protection failed to provide a consistent international protection standard. This lack of consistency was one of the motivating forces behind the TRIPS negotiation. See Long, Copyright and the Uruguay Round Agreements, supra note 15. Although scholars debate the desirability and efficacy of the protection regime established under TRIPS, there is no doubt that the intention was to establish stricter standards for protection. Hence, some of the vagaries of the Paris and Beme Conventions, such as the definition of a patented invention or a trademark, have been clarified in TRIPS. See infra notes 104-42 and accompanying text (discussing some of the significant advances in protection established under TRIPS). 54 See generally Sam Ricketson, Berne C onvention for the Protection of Literary and Artistic W orks 1886-1986 (1987) (providing a helpful general reference on the Beme Convention); George Bodenhauser, G uide to the application of the paris convention (1968) (providing a helpful general reference on the Paris Convention); Intellectual Property and International T rade: A Guide to the Uruguay R ound Trips A greement (1996) (providing a helpful general reference on TRIPS); L aw and Practice of the W orld T rade Organization (Joseph F. Dennis ed., 1995) (same).

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these contains several pertinent provisions that must be understood in order to develop a workable solution to the problem o f deculturization. The Beme Convention was first established in 1886.55 The result of multinational negotiations, which can be traced to an international convention presided over by the famous French author Victor Hugo,56 the Beme Convention has gone through numerous revisions.57 Yet, the Convention has maintained its status as the pre-eminent multinational copyright treaty.5* Like many other early multinational and bilateral treaties, the Beme Convention required adherents to grant the identical level o f protection to domestic and foreign intellectual property owners

55 A detailed examination of the Beme Convention is beyond the scope of this Article. All Beme Convention provisions relating to the substantive protection of copyrights have been incorporated into the TRIPS Agreement. See TRIPS, supra note 7, art. 9 (incorporating Articles 1-21 of the Beme Convention, excluding Article 6to which relates to moral rights, not copyrights). See infra notes 193-97 and accompanying text for a brief discussion of Article 6th and moral rights. 56 See Peter Burger, The Beme Convention: Its History and its Key Role in the Future, 3 J. Law & Tech. 1 (1988). In 1878, Hugo presided over an International Association conference that adopted five resolutions that eventually became the foundation for the original Beme Convention. See id. 57 Diplomatic conferences to revise the Convention were held in Berlin in 1908, Rome in 1928, Brussels in 1948, and Stockholm in 1967. See id. Most recently, WIPO convened a diplomatic conference in Geneva in 1996 to discuss the so-called “Beme Protocol,” designed to “update” Convention coverage to include such newly emerging issues as database rights, digital communication and the protection of performance rights. This latest conference resulted in the entry into force of two new treaties, the WIPO Copyright Treaty, WIPO Doc. CRNR/DC94 (Dec. 23, 1996), 36 I.L.M. 65 (1997), and the WIPO Performances and Phonograms Treaty, WIPO Doc. CRNR/DC/95 (Dec. 23, 1996), 36 I.L.M. 76 (1997), both of which used the Beme Convention as their starting point for copyright protection principles. 58 Although the United States did not accede to the Beme Convention until 1989, such delay was not based on the low status of the Convention as a force for international copyright standards. See Report on the B erne Convention Implementation A ct of 1988, H. R. Rep. No. 352, 100th Cong., 2d Sess. 3 (1988). To the contrary, accession was delayed largely by United States concerns over Article 6** and its requirement that adherents grant moral rights protection to artists. See Beme Convention, supra note 8, art. 6**, 828 U.N.T.S. at 235. See generally Gerald Dworkin, The Moral Right of the Author: Moral Rights and the Common Law Countries, 19 Colum.-VLA J.L. & A rts 229 (1995); Orren G. Hatch, Better Late Than Never: Implementation o f the 1886 Beme Convention, 22 Cornell Int’ l L.J. 171 (1989); see infra notes 193-97 and accompanying text (discussing moral rights and Article 6bu).

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(referred to as “national treatment”).59 The Beme Convention, however, went beyond merely requiring national treatment to establish minimum substantive standards of protection that adherents were required to meet in their domestic laws. The Convention currently requires copyright protection for enumerated categories of “literary and artistic works [including] every production in the literary, scientific and artistic domain whatever may be the mode or form of its protection.”60 It also requires that authors be granted a term of protection of no less than the life o f the author plus fifty years for most copyrighted works,61 and that they be given the right to control the reproduction o f their works,62 their translation,63 and their public distribution, performance and display.64 The Beme Convention expressly recognized a country’s right to provide certain exceptions to these granted rights for purposes o f news reporting,65 education66 and other designated “fair uses.”67 Although die United States did not accede to the Beme 59 See Beme Convention, supra note 8, art. 5, 828 U.N.T.S. at 231-32. 60 Id. art. (2)(1), 828 U.N.T.S. at 227. Among the enumerated works included in this definition are the following: books, pamphlets and other writings; lectures, addresses, sermons and other works of the same nature; dramatic or dramatic-musical works; choreographic works and entertainments in dumb show; musical compositions with or without words; cinematographic works to which are assimilated works expressed by a process analogous to cinematography; works of drawing, painting, architecture, sculpture, engraving and lithography; photographic works to which are assimilated works expressed by a process analogous to photography; works of applied art; illustrations, maps, plans, sketches and three-dimensional works relative to geography, topography, architecture or science. Id. 61 See id. art. 7,828 U.N.T.S. at 235-37. 62 See id. art. 9,828 U.N.T.S. at 239. 63 See id. art. 8, 828 U.N.T.S. at 239. Article 12 of the Beme Convention also grants authors the exclusive right of “authorizing adaptations, arrangements and other alterations of their works.” Id. art. 12, 828 U.N.T.S. at 243-44. 64 See id. arts. 11, 11*1, 11~, 828 U.N.T.S. at 241-42. 65 See id art. 10 * 828 U.N.T.S. at 241. 66 See id. art. 10(2), 828 U.N.T.S. at 241. 67 For example, Article 2** of the Beme Convention permits member countries to exclude from copyright protection “political speeches and speeches delivered in the course of legal proceedings.” Beme Convention, supra note 8, art. 2W ,(1), 828 U.N.T.S. at 229. Article 10 allows exemptions for purposes of comment so long as the use of

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Convention until 1989,68 the Convention has served as a primary driving force in the establishment o f international copyright protection norms.69 It is currently administered by the World Intellectual Property Organization (WIPO).70 The Paris Convention governs patents and trademarks and was first established in 1883.71 Like its counterpart, the Beme Convention, the Paris Convention requires national treatment72 and such works “is compatible with fair practice” and does not “exceed that justified by the purpose.” Id. art 10(1), 828 U.N.T.S. at 239. These provisions have been incorporated through TRIPS Article 9 and, therefore, remain legitimately recognized international exceptions to protection. See TRIPS, supra note 7, art. 9. 68 See Beme Convention Implementation Act of 1988, Pub. L. No. 100-568, 102 Stat. 2853 (1983). This delay in accession was largely due to U.S. reluctance over the moral rights provision of Article 6biI of the Beme Convention. See supra note 58 (discussing the U.S. reluctance to accede to the Beme Convention). 69 This importance was demonstrated when the United States acknowledged that the Beme Convention established international protection norms for copyrighted works. In the House Report for the Beme Implementation Act, Congress stated: The Beme Convention for the Protection of Literary and Artistic Works . . . is the highest internationally recognized standard for the protection of works of authorship of all kinds. US membership in the Beme Convention will secure the highest available level of multilateral copyright protection for US artists, authors and other creators. Adherence will also ensure effective US participation in the formulation and management of international copyright policy. Adherence to the Convention is in the national interest because it will ensure a strong, credible US presence in the global marketplace . . . . For more than 100 years, the Beme Convention has been the major multilateral agreement governing international copyright relations Accession to Beme assures the highest level of protection in the countries that are the largest users of American copyrighted works. Report on the Berne Convention Implementation A ct of 1988, H. R. Rep. No. 100352, 100th Cong., 2d Sess. 3 (1988). The Beme Convention continues to play a pre­ eminent role in the development of international copyright standards, as demonstrated by the adoption of Beme Convention standards in the TRIPS Agreement. See supra note 52 and accompanying text (discussing the incorporation of Beme Convention standards in TRIPS). 70 See Texts of Treaties Administered by WIPO (visited Feb. 17, 1997) . 71 See Beme Convention, supra note 8. A detailed examination of the Paris Convention is beyond the scope of this Article. Similar to the treatment of Beme Convention requirements for copyright protection incorporated into TRIPS, all pertinent provisions of the Paris Convention relating to the substantive protection of patents and trademarks have been incorporated into TRIPS. See TRIPS, supra note 7, art. 2 (incorporating Articles 1-12 and 19 of the Paris Convention). 72 See Paris Convention, supra note 53, art. 2(1), 21 U.S.T. at 1631.

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establishes minimum protection standards for patented inventions. The Paris Convention requires member countries to provide patent owners many rights, including a right o f priority of one year from the date of national filing in which to file patent applications in member countries;73 independence of existence so that forfeiture of a patent in one country does not result in world-wide forfeiture;74 and the right of the inventor to be mentioned as such in the patent.75 Remarkably, the Paris Convention provides no definition o f the term “patent.”76 Like the Beme Convention, the patent provisions of the Paris Convention have received constant international attention and have been modified numerous times.77 The Paris Convention also requires national treatment for trademark owners78 and establishes minimum substantive standards for their protection.79 Similar to its treatment o f patent rights, the Convention contains no detailed definition o f the types of source designators which qualify as protectable trademarks.80

73 See id. art. 4,21 U.S.T. at 1631-32. 74 See id art. 4‘“, 21 U.S.T. at 1635-36. 75 See id. art. 4", 21 U.S.T. at 1636. 76 Instead, Article I defines “patents” as one of the “objects” of “protection of industrial property.’* Id, art. 1(2), 21 U.S.T. at 1630. The only “definition” appears in Article 1(4) which provides that patents “shall include the various kinds of industrial patents recognized by the laws of the countries of the Union, such as patents of importation, patents of improvement, patents and certificates of addition, etc.” Id. art. 1(4), 21 U.S.T. at 1630. TRIPS finally established a multinational definition of sorts for a protectable invention. In Article 27, it provides that patents “shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application.” TRIPS, supra note 7, art, 27. See infra notes 106-12 and accompanying text for a more detailed discussion of patent requirements under TRIPS. 77 Since its inception, the Paris Convention has been revised four times. Conferences were held in The Hague in 1925, London in 1934, Lisbon in 1958, and Stockholm in 1967. See J.W. Baxter, 2 W orld Patent Law and Practice § 10.05 (1996). 78 See Paris Convention, supra note 50, art. 2(1), 21 U.S.T. at 1631. 79 See infra notes 80-82 and accompanying text (describing the key substantive standards under the Convention). 80 Although the Paris Convention provides for the protection of trademarks, service marks and collective marks, it does not define these terms or provide any other list or explanation of the types of industrial property which should qualify as a protected mark. In fact, it does not even use the term “source designator” or “indicator” when

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The Convention does, however, indicate that marks may be refused protection if they are “devoid o f any distinctive character ... Most o f the provisions of the Paris Convention regarding the protection of trademark rights focus on the requirements for allowing a foreign owner the ability to register and protect its mark.82 The Convention also requires member countries to provide protection for “well-known” marks by prohibiting their “reproduction, imitation, or translation” on identical or similar goods where such use is “liable to create confusion.”83 It also grants owners of protected marks the right to secure seizures o f infringing goods where their marks are subject to domestic protection.84 The Paris Convention did not directly address the protection o f referring to such potentially protectable marks. See Paris Convention, supra note 53. 81 Id. art. 6 ^ ^ (B)(2), 21 U.S.T. at 1644. 82 Among the registration standards established under the Paris Convention are the right of member countries to require use prior to registration; see id. art. 5(C)(1), 21 U.S.T. at 1637; the acceptability of concurrent use by co-proprietors of the mark; see id. art 5(C)(3), 21 U.S.T. at 1638; and the independence of trademark registrations so that cancellation in the country of origin does not result in automatic cancellation worldwide. See id. art. 6(3), 21 U.S.T. at 1639. Subsequent multinational treaties regarding trademarks have similarly focused on registration issues, including the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks, Aug. 2, 1972, 23 U.S.T. 1336, 550 U.N.T.S. 45 (known as the “Nice Classification Treaty”); the Madrid Agreement Concerning the International Registration of Trademarks, Apr. 14, 1891, as revised June 15, 1997, 828 U.N.T.S. 389; Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks, June 28,1989, available in (“Madrid Protocol”); and the Trademark Law Treaty, Oct. 27,1994, available in . 83 Paris Convention, supra note 53, art. 6^(1), 21 U.S.T. at 1640. This article provides: The countries of the Union undertake, ex officio if their legislation so permits, or at the request of an interested party, to refuse or to cancel the registration, and to prohibit the use, of a trademark which constitutes a reproduction, an imitation, or a translation, liable to create confusion, of a mark considered by the competent authority of the country of registration or use to be well known in that country as being already the mark of a person entitled to the benefits of this Convention and used for identical or similar goods. These provisions shall also apply when the essential part of the mark constitutes a reproduction of any such well-known mark or an imitation liable to create confusion therewith. Id. 84 See id. art. 9, 21 U.S.T. at 1647.

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trade secrets. It did, however, in Article 10w’, require “effective protection against unfair competition,”*5 and defined acts o f unfair competition as including “any act of competition contrary to honest practices in industrial or commercial matters.”86 Although subsequent language in the treaty focused on unfair acts which “create confusion” or “mislead the public,”87 Article 10“* has subsequently served as the basis for establishing minimum trade secret rights.88 The Paris Convention, like the Beme Convention, is administered by WIPO.8’ The most recent, and in the author’s view, the most significant, multinational treaty concerning intellectual property rights is TRIPS.90 The result of nearly seven years o f multinational negotiations during the Uruguay Round o f GATT,91 TRIPS not only relies upon the long-established protection norms o f the Beme and Paris Conventions, it fills some important gaps in protection under these treaties. Similar to the Beme and Paris Conventions, adherents to TRIPS are required to grant the identical level of protection to domestic and foreign intellectual property owners (referred to as “national treatment”).92 Moreover, 85 Id. art. 10tu(l), 21 U.S.T. at 1648. 86 Id. art. 10‘“(2), 21 U.S.T. at 1648. 87 Article 10“ specifies three “particular" acts which must be “prohibited,” including “all acts of such a nature as to create confusion by any means whatever with the establishment, the goods, or the industrial or commercial activities, of a competitor,” Id. art. lO^OXl), 21 U.S.T. at 1648 (emphasis added), and “indications or allegations the use of which in the course of trade is liable to mislead the public as to the nature, the manufacturing process, the characteristics, the suitability for their purpose, or the quantity, of the goods,” Id. art. 10to(3)(3), 21 U.S.T. at 1648. The third prohibited act is use of “false allegations in the course of trade of such a nature as to discredit the establishment, the goods, or the industrial or commercial, activities, of a competitor.” Id. art. 10az,(3)(2), 21 U.S.T. at 1648. 88 See TRIPS, supra note 7, art. 39. For a more detailed discussion of TRIPS, see infra notes 91-142 and accompanying text 89 See, e.g., Texts o f Treaties Administered by WIPO (visited Jan. 31, 1998) . 90 See TRIPS, supra note 7. 91 See, for example, A NEGOTIATING H istory, supra note 13, for a history of the length and range of the debates leading up to TRIPS. 92 See TRIPS, supra note 7, art. 3. TRIPS requires national treatment “with regard to the protection of intellectual property, subject to the exceptions already provided in, respectively, the Paris Convention (1967) [and] the Beme Convention (1971).” Id.

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TRIPS goes beyond sim ply requiring national treatment and, like its predecessors the Bem e and Paris Conventions, establishes minimum substantive standards o f protection.” Because it incorporates Articles 1-12 o f the B em e Convention, TRIPS provides copyright protection for the enumerated categories o f “literary and artistic works” as set forth in the Bem e Convention.94 Such protection includes a term o f protection for m ost works o f no less than the life o f the author plus fifty years95 and the right to prohibit the unauthorized reproduction,96 translation,97 public distribution,98 public display99 or public performance100 o f their protected works. TRIPS explicitly extends copyright protection to computer programs and “com pilations o f data or other material . . . which by reason o f the selection or arrangement o f their contents constitute intellectual creations.”101 TRIPS also adopted the B em e Convention exceptions for TRIPS defines “protection’*as including “matters affecting the availability, acquisition, scope, maintenance, and enforcement of intellectual property rights as well as those matters affecting the use of intellectual property rights specifically addressed in this Agreement.** Id. art. 3 n.3. “Intellectual property rights*’ is defined as copyrights, trademarks, industrial designs, patents, geographical indications, topographies of integrated circuits and trade secrets (or “undisclosed information”). See id. art. 1(2). “Geographical indications “are defined as “indications which identify a good as originating in the territory of a Member, or a region or locality in that territory, where a given quality, reputation or other characteristic of the good is essentially attributable to its geographical origin.” Id. art, 22. They are often treated as a sub-category of trademarks. 93 See infra notes 94-127 and accompanying text (describing the key substantive standards established under TRIPS). 94 See TRIPS, supra note 7, art. 9 (incorporating Article 2(1) of The Beme Convention). 95 See id. (incorporating Article 7 of the Beme Convention). 96 See id. (incorporating Article 9 of the Beme Convention). 97 See id. (incorporating Articles 8 & 12 of the Beme Convention). 98 See id. (incorporating Article 11* of the Beme Convention). 99 See id. (incorporating Article 11^ of the Beme Convention). 100 See id. 101 Id. art. 10(2). This category was not previously expressly protected under the Beme Convention. See supra note 60 (defining protected works under the Beme Convention). TRIPS, however, does not define or otherwise specify the requirements for constituting an “intellectual creation,” including to what extent “originality” of the work may be required. See infra note 146 (discussing various tests for “originality” and their impact on international protection issues).

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protection for purposes o f education and news reporting.102 However, TRIPS provides that “lim itations or exceptions to exclusive rights” must be confined to “certain special [but undefined] cases which do not conflict with a normal exploitation o f the work and do not unreasonably prejudice the legitim ate interests o f the right holder.”103 Similar to its treatment o f copyright,104 TRIPS incorporates the minimum substantive standards o f the Paris . Convention for its required level o f protection for patents, trademarks and trade secrets.105 However, TRIPS goes beyond these standards to establish minimum definitional requirements for a patentable invention. It requires that patent protection be extended to inventions “in all fields o f technology”106 and further requires that patent rights be extended only to those inventions which are “new ,” “involve an inventive step,” and are “capable o f industrial application.”107 Among the rights that foreign and dom estic patent owners must be granted under TRIPS is a twenty year minimum term o f protection from the date o f the application,108 the right to prohibit the unauthorized use o f a patented process,100 and the 102 See TRIPS, supra note 7, art. 9. (incorporating Articles 2 and 10 of the Beme Convention). 103 Id. art. 13. TRIPS does not further define which cases would “conflict with a normal exploitation of the work.*’ This language originally appeared in Article 9(2) of the Beme Convention but was limited to fair use reproduction. See Beme Convention, supra note 8, art. 9(2), 828 U.N.T.S. at 239. 104 See supra notes 94-103 and accompanying text (discussing copyright treatment). 105 See TRIPS, supra note 7, art. 2. i°6 t r i p s , supra note 7, art. 27. 107 Id. The phrases “inventive step” and “capable of industrial application” may be considered synonymous with “non-obvious” and “useful,” respectively. See id. art. 7 n.5. They are not further defined under TRIPS. Despite the absence of specificity, these requirements represent a marked advance over Paris Convention treatment of patents. The Paris Convention did not specify patent-protected subject matter. See Paris Convention, supra note 53. Instead, its most significant contribution to patent protection, in the author’s opinion, was the recognition of a member country’s obligation to honor an applicant’s prior filing of a patent application in a member country—so long as the applicant makes the subsequent filing within six months of the original filing date (the so-called “priority right”). See id. art. 4. 108 See TRIPS, supra note 7, art. 33. 109 See id. art. 28(1).

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unauthorized “making, using, offering for sale, selling or importing” o f a patented product110 or o f a product created directly by a patented process.111 TRIPS recognizes a country’s right to deny patent protection where the prevention o f commercial exploitation is “necessary to protect ordre public or morality” including “to protect human, animal or plant life or health” or “to avoid serious prejudice to the environment.”112 In connection with its expanded protection o f trademark rights, TRIPS defines those source designators that must be protected. It requires that trademark protection be granted to “[a]ny sign or any combination o f signs, capable o f distinguishing the goods or services o f one undertaking from those o f other undertakings.”113 The owner o f a registered trademark must be granted the “exclusive right” to prohibit the use by unauthorized third parties o f “identical or similar signs for goods or services which are identical or similar to those in respect o f which the trademark is registered where such use would result in a likelihood o f confusion.”114 Registration must be granted for a minimum term o f

110 id. 111 See id. 1,2 Id. art. 27(2). Countries may also deny patent protection to “diagnostic, therapeutic and surgical methods for the treatment of humans or animals,” “plants and animals other than micro-organisms,” and “essentially biological processes, for the production of plants or animals other than non-biological and microbiological processes.” Id. art. 27(3). TRIPS also incorporates Paris Convention registration requirements. See supra notes 79-84 and accompanying text for a discussion of these requirements. TRIPS also establishes further requirements, including the duty to “disclose the invention in a manner sufficiently clear and complete for the invention to be carried out by a person skilled in the art.” TRIPS, supra note 7, art. 29. 113 Id. art. 15(1). 114 Id. art. 16(1). The treaty does not specify the factors to be used in deciding whether likelihood of confusion exists. Under U.S. law, such factors vary depending on the forum. See generally Doris E stelle Long, Unfair Competition and the Lanham Act 55-64 (1993) (listing by circuit the factors used to determine likelihood of confusion). Generally, however, such factors as the strength of the marks, their similarity, the similarity of the respective goods and services, the similarity of the respective channels of trade and distribution, the sophistication of the respective customers, evidence of actual confusion, and the second user’s bad faith in creating his mark are considered. See, e.g., Polaroid Corp. v. Polarad Elecs. Corp., 287 F.2d 492 (2d Cir.), cert, denied, 368 U.S. 820 (1961); In re E.I. DuPont deNemours & Co., 476 F,2d 1357 (C.C.P.A. 1973).

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seven years and must be indefinitely renewable.115 Protection o f unregistered marks remains subject to the discretion o f dom estic laws except for famous or well-known marks, which continue to be protected under Article 6to o f the Paris Convention.116 U se may be required to maintain a trademark registration,117 but such use cannot be “unjustifiably encumbered by special requirements, such a s . . . use in a special form.”118 TRIPS builds on the brief mention o f “honest practices in industrial or commercial matters” in Article 10to o f the Paris Convention119 and explicitly requires the protection o f “undisclosed information . . . in a manner contrary to honest commercial practices.”120 Such information must be protected so long as it is “secret,”121 “has commercial value due to its secret nature”122 and “has been subject to reasonable steps under the circumstances, by the person law fully in control o f the information, to keep it secret.”123 TRIPS also requires the protection o f undisclosed test or other data w hose “origination . . .

115 See TRIPS, supra note 7, art. 18. 116 See Paris Convention, supra note 50, art. 6to(l), 21 U.S.T. at 1640 (incorporated by reference under Article 2 of TRIPS); see also supra note 83. Article 16 of TRIPS further clarifies that Article 6to protection of well-known marks applies to service marks and provides that “knowledge of the trademark in the relevant sector of the public, including knowledge . . . obtained as a result of the promotion of the trademark” must be considered in deciding whether the mark is well-known. TRIPS, supra note 7, art. 16(2). 117 See TRIPS, supra note 7, art. 19. 118 Id. art. 20. TRIPS also requires adherents to allow “interested parties” to prevent the use of misleading “geographical indications,” including the right to “refuse or invalidate the registration of a trademark” which “contains or consists” of a misleading geographic indication. See id. art. 22. 119 See Paris Convention, supra note 53, art. 10*\ 21 U.S.T. at 1648; see supra notes 85-89 and accompanying text (discussing trade secret protection under the Paris Convention). 120 TRIPS, supra note 8, art. 39. 121 See id. art. 39(2)(a). TRIPS defines “secret” as “secret in the sense that it is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons within circles that normally deal with the kind of information in question.” Id. This definition largely follows the definition under U.S. law. See supra note 10 for the definition under U.S. law. 122 TRIPS, supra note 7, art. 39(2Xb). 123 Id. art. 39(2)(c).

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involves considerable effort”124 and which is submitted as a condition o f approving the marketing o f pharmaceutical or agricultural chemical products utilizing “new chem ical entities.”125 Such protection is excused where disclosure is “necessary to protect the public”126 or where “steps are taken to ensure that the data are protected against unfair commercial use.”127 These provisions in TRIPS represent one o f the few tim es that trade secrets have been the subject o f an express multinational treaty obligation.128 Perhaps the most notable advance in protection contained in TRIPS is its establishment o f procedural enforcement norms that adherents must include in their dom estic law s.129 Included among these procedural norms are that enforcement procedures available under a member’s national laws “permit effective action against any act o f infringement o f intellectual property rights covered by [TRIPS], including expeditious remedies to prevent infringements and remedies which constitute a deterrent to further infringement.”130 All such procedures must be “fair and equitable” and cannot be “unnecessarily com plicated or costly” or “entail

124 Id. art. 39(3). 123 Id. m Id. 127 Id 128 The only other instances are Article 10“ of the Paris Convention, which formed the basis for the relevant TRIPS provision, see Paris Convention, supra note 53, art. 10**, 21 U.S.T. at 1648, and Article 1711 of the North American Free Trade Agreement, see North American Free Trade Agreement, Dec. 14, 1992, art. 1711, 32 I.L.M. 612, 674. In NAFTA, the term “trade secret” was used, as opposed to “undisclosed information.” See id. To qualify for protection, the “information” at issue must be “secret,” have “actual or potential commercial value” because of its secret nature, and be subject to “reasonable steps . . . to keep it secret.” Id. These are broadly the same requirements established under TRIPS, although NAFTA may protect a broader category of information since information must only have “potential commercial value” to be protected. Cf. TRIPS, supra note 7, art. 39 (requiring that the information “has commercial value because it is secret” (emphasis added)). 129 This requirement is a substantial advance over the Beme and Paris Conventions, which contained no procedural enforcement norms. See Beme Convention, supra note 8; Paris Convention, supra note 53. 130 TRIPS, supra note 7, art. 41(1).

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unreasonable time lim its or unwarranted delays.”131 D ecisions on the merits must be made available to the parties “without undue delay”132 and must be based only on evidence “in respect o f w hich parties were offered the opportunity to be heard.”133 TRIPS does not require members to establish a separate judicial system for the enforcement o f intellectual property rights.134 It does, however, require that litigants be given certain procedural safeguards including the protection o f confidential inform ation,135 representation by independent legal counsel,136 and the right “to substantiate . . . claim s and to present all relevant evidence.”137 It also establishes minimum remedies that m ust be provided to litigants, including the right to injunctive relief,138 the right to m oney damages “adequate to compensate for the injury the right holder has suffered . . ”139 and, in connection with pirated and counterfeit goods, criminal penalties “sufficient to provide a deterrent, consistently with the level o f penalties applied for crimes o f corresponding gravity.”140 Failure to live up to treaty requirements results in trade sanctions by the World Trade Organization—the governing body for TRIPS.141 The existence o f

131 M art. 41(2). 132 Id. art. 41(3). 133 Id. In connection with willful trademark counterfeiting and copyright piracy “on a commercial scale,” TRIPS also requires members to provide for “criminal procedures and penalties including imprisonment and/or monetary fines. . . sufficient to provide a deterrent, consistently with the level of penalties applied for crimes of corresponding gravity.” Id. art. 61. 134 Id. art. 41. Article 41 of TRIPS specifically provides: “It is understood that this Part [establishing general obligations for enforcement mechanisms for intellectual property rights] does not create any obligation to put in place a judicial system for the enforcement of intellectual property rights distinct from that for the enforcement of laws in general ” Id. art, 41(5). 135 See id. art. 42. 136 See id. 137 Id. 138 See id. art. 44. 139 Id. art. 45(1). 140 Id. art. 61. 141 See id. These sanctions include the imposition of tariff barriers against the offending country’s goods. See id. art. 64(1). For an in-depth review of WTO Dispute Settlement Procedures, see P ierre Pescatore et al ., H andbook of WTO/GATT

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this sanctioning power assures that obligations tinder TRIPS should form at least the floor for international protection o f intellectual property rights in the future.142

III. Intellectual Property Rights—Sword and Shield Although TRIPS established broad standards for intellectual property protection, these standards need not becom e cultural straitjackets, designed solely as a sword to protect the deculturizing acts o f foreign investors. To the contrary, both the language o f TRIPS and the circumstances surrounding its negotiation support a flexible approach to intellectual property rights enforcement, an approach that is broad enough to permit developing countries to use their intellectual property laws as a shield against the ravages o f de-culturizing foreign investment. The language o f TRIPS eschew s narrowly circumscribed standards o f protection in favor o f a broad-based, theoretical approach that grants adherents maximum flexibility in fashioning

Dispute Settlement (1996).

142 Such sanctioning power realistically did not exist under either the Berne or Paris Conventions. Consequently, although the basic protection standards under these two multinational treaty regimes have been largely adopted by most countries, and, in the author's opinion, can be considered as at least part of accepted international law regarding the scope of protection that must be afforded intellectual property rights, they did not contain die same force for adherence that TRIPS poses. It should be noted, however, that as of the date of this Article, although various claims for sanctions are pending before 'the WTO for failure to meet TRIPS obligations, decisions on these claims remain unresolved. See, e.g., U.S. Europe Challenge Japanese Recorded Music Copyright Practices, West's Legal News, Feb. 15, 1996, available in 1996 WL 258541 (reporting complaint filed against Japan for failure to provide rental rights for sound recordings created prior to 1972); see also Sanctions (visited Nov. 25, 1997) (listing various complaints filed under TRIPS, including a claim against India and Pakistan for failure to provide adequate patent protection for pharmaceutical and agricultural chemical products, one against Ireland for failure to grant neighboring rights, another against Denmark and Sweden for failure to provide provisional measures in civil proceedings to enforce intellectual property rights, and one against Portugal for failure to provide required terms of patent protection). Thus, it is too soon to tell whether WTO sanctioning power will be wielded with the full force it appears to have. The potential for such sanctions alone, however, has already helped to assure compliance. Russia, China, and even the United States have revised their laws to assure TRIPS compliance. See, e.g., Uruguay Round Agreements Act, 108 Stat. 4809 (1994). Whether such in terrorem force will continue, however, if WTO does not impose stringent sanctions, or if it does not obtain compliance with any such sanctions, is not clear.

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acceptable domestic law s.143 This flexibility is apparent in the general lack o f specificity contained in many o f die substantive treaty provisions.144 For example, although TRIPS requires the protection o f “[c]om pilations o f data . . . which by reason o f the selection or arrangement o f their contents constitute intellectual creations,”145 it does not specify what level o f originality, if any, is required to qualify as an “intellectual creation.”144 Sim ilarly, in

143 The nature of multinational treaties, to a certain extent, requires a broad-based theoretical approach in order to obtain the consensus required for concordance. Thus, TRIPS is not alone in using broader language in establishing minimum substantive standards for protection. Beme Convention, supra note 8, and the Paris Convention, supra note 53, for example, similarly failed to establish standards for such fundamental issues as originality, infringement or fame. The “problem’1 with such flexible approaches, however, is that they result in inconsistent treatment on a global basis. For example, efforts to protect the unique design of Coca-Cola’s rippled bottle as a trademark were successful in the United States but unsuccessful in the United Kingdom, despite the fact that both parties were signatories to the Paris Convention at the time of their respective decisions. Compare In re Coca-Cola Application, 1 W.L.R. 695 (1986), 2 All E.R. 274 (1986) (denying contour bottle registration in the U.K.) with U.S. Trademark Regis. No. 696, 147 (April 12, 1960) (citing decision by U.S. Trademark Office to register the bottle design). 144 This flexibility also serves as the basis for criticism since it does not guarantee the identity of protection which the supporters of TRIPS seemed to anticipate. See Long, Copyright and the Uruguay Round Agreements, supra note 16, at 550-55. In the absence of identity of protection, disputes regarding the appropriate level of protection to be afforded intellectual property rights will, no doubt, continue. 145 TRIPS, supra note 7, art. 10(2). 146 In a seminal decision, Rural Telephone Service Co. v. Feist Publications, Inc., 499 U.S. 340 (1991), the United States Supreme Court refused to extend copyright protection to the white pages of a telephone directory on the grounds that such factual compilations lacked the requisite modicum of originality. See id. at 346. This originality requirement has been applied to refuse protection to certain computer databases. See Atari Games Corp. v. Nintendo of Am., Inc., 30 U.S.P.Q.2d 1401, 140407 (N.D. Cal. 1993). This high level of originality is not required in Western Europe. Compare this treatment with the E.C. Database Directive, which grants sui generis protection to databases that “by reason of the selection or arrangement of their contents, constitute the author’s own intellectual creation,” Council Directive 96/9, art. 3(1), 1996 O.J. (L 77) 20, 25, and yet define such “creation” as requiring “qualitatively and/or quantitatively a substantial investment in either the obtaining, verification or presentation of the contents.” Id. art. 7(1), 1996 O.J. (L 77) at 25. The issue of the need for “originality” or “intellectual creativity” in determining copyright protectability is not limited to the subject of databases. To the contrary, the issue remains a hotly debated one for all types of potentially copyright protected works. See, e.g., F ellner, supra note 10, at 63-64 (varying definitions of “originality” for designs under U.K. law). Compare Interlego A.G. v. Tyco Indus., Inc., [1987] 1 App.

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keeping with the treatment o f intellectual property rights under the B em e and Paris Conventions, TRIPS does not establish standards for such critical protection issues as the test for infringement o f the protected right,147 the standard to determine if a mark is “w ellknown” enough to require protection regardless o f its registered status in a country,148 what role, if any, the doctrine o f equivalents should have in determining patent protection,149 or the doctrinal requirements for novelty and/or non-obviousness.150 Cas. 217, 241 (P.C. 1988) (appeal taken from H.K,) (stating that under U.K. law originality for artistic works requires some artistic element) with Bleistein v. Donaldson Lithographing Co., 188 U.S. 239, 251 (1903) (stating that work does not have to be artistic or have artistic merit to qualify for protection in the United States). The outcome of this dispute could have a direct impact on the scope of protection afforded native or indigenous works of long-standing existence. 147 For example, the treaty does not specify what elements are used to establish infringement of the right of reproduction of a copyrighted work. Such critical elements as the need for access to the work, the amount of the work required to be copied for infringement to lie and the degree of similarity needed where verbatim copying has not occurred are not specified. Differences in treatment of these elements could be outcome determinative of protection. TRIPS similarly fails to specify what elements are required to establish “likelihood” of confusion of a trademark, or whether patent infringement can be based on other than literal infringement of the claims at issue. See supra note 105-12 and accompanying text (discussing patent protection under TRIPS). 148 Under Article 6* of the Paris Convention, a well-known mark must be protected against uses “liable to create confusion.” Paris Convention, supra note 53, art. 6to, 21 U.S.T. at 1640 (incorporated by reference by TRIPS, supra note 7, art. 2(1)). Neither the Paris Convention nor TRIPS establishes the factors used to establish the requisite degree of notoriety of a mark. Whether actual use in the country is required can have a direct impact on the scope of protection afforded a mark. Where certain cultural symbols have achieved broad notoriety, such symbols might qualify as famous marks, worthy of protection beyond the borders of the source country. The scope of protection for such symbols could be directly affected if renown alone is not sufficient to justify protection. 149 Neither the Paris Convention nor TRIPS specifically addresses the issue of the extent to which the doctrine of equivalents can or should be used in establishing infringement or patentability. Where strict claim construction is followed for purposes of patentability or literal infringement is required for purposes of infringement, local adaptations of existing patented inventions would not be considered infringing. This would directly affect the scope of the monopoly afforded a patent owner. See infra note 155 for a further discussion of this issue. 150 Although TRIPS imposes the dual obligation that an invention be “new” and “involve an inventive step,” TRIPS, supra note 7, art. 27(1), these are equivalent to the requirements of novelty and non-obviousness. See supra note 107 for a brief discussion of this equivalency. The terms are not further defined. Thus, for example, “novelty” may depend on the role of prior public use and the degree of newness required. The

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Perhaps most notably, enforcement standards under TRIPS are posited in broad terms such as requiring “fair and equitable” procedures,151 “adequate compensation” for infringing uses,152 and indemnification to defendants when enforcement procedures have been “abused.”153 Since TRIPS does not require the establishm ent o f a separate judicial system for enforcement o f intellectual property rights, these broad concepts permit countries to adapt existing system s.154 This virtually ensures widespread divergence between countries in both the methods used for enforcing rights under the treaty and the dom estic law standards for undefined term s.155 TRIPS expressly recognizes that members may “adopt measures necessary t o . . . promote the public interest in sectors o f vital importance to their socio-econom ic . . . developm ent.”156 It allow s members to lim it the broad rights granted copyright owners under the treaty when such works are used for such socially desirable goals as news reporting and scholarship.157 Patent rights may be similarly subjected to compulsory licensing requirements, including working requirements, where such provisions fill public

outcome of these decisions could have a direct impact on the protectable nature of such cultural elements as folk remedies and medical practices. 151 TRIPS, supra note 7, art. 41(2). 152 Id. art. 45(1). 153 Id. art. 48. 154 See id. art. 41(g). Article 41(g) permits enforcement under members’ national laws by permitting them to use already existing legal systems. See id. 155 The author does not mean to suggest that there are no standards for defining such terms. Clearly, definitions of “novelty,” “non-obviousness,” and the like should conform with international standards. Since, however, there is presently no agreed-upon single definition for these requirements, TRIPS permits a degree of flexibility within certain parameters in establishing the content of such terms. This flexibility can be used to a developing country’s advantage in crafting intellectual property laws to protect its cultural heritage. Thus, for example, if a country did not require absolute novelty, public use in the form of a traditional folk remedy might not bar patent protection for adapted local uses. See supra note 149 and accompanying text for a discussion of the issue. 156 TRIPS, supra note 7, art. 8(1). 157 See supra notes 65-67 and accompanying text for the pertinent provisions. TRIPS incorporates Article 10 of the Beme Convention. See TRIPS, supra note 7, art. 9.

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needs.158 Even the grant o f trademark protection rights are subject to exceptions derived from the need for public order.139 The circumstances surrounding the establishment o f TRIPS sim ilarly support a flexible approach to intellectual property protection that can be used to protect indigenous culture. During the period o f the Uruguay Round N egotiations, no single philosophical basis for the protection o f intellectual property rights existed, even among developed countries. For example, the fundamental activating principle behind U .S. copyright law was the encouragement o f the creation and dissem ination o f new works to the public by providing econom ic incentives to creators. Article I o f the U .S. Constitution recognizes the importance o f copyright protection by establishing the mechanism o f “securing for lim ited Tim es to Authors . . . the exclusive Right to th eir. . . W ritings.”160 One o f the purposes o f this lim ited right was to encourage authors to spend the time, money, and effort required to create new works by granting authors merchandising rights in those new works.161 B y contrast, Continental Western European nations placed authorship and the “romantic” view o f creative “genius” at the center o f protection.162 The creative “spark” represented by an

158 See TRIPS, supra note 7, art. 31. 159 See id, art. 17. Article 17 permits exceptions such as the “fair use of descriptive terms” so long as such exceptions “take account of the legitimate interests of the owner of the trademark and of third parties.” Id. 160 U.S. Const, art. I, § 8, cl. 8. See also supra note 43 and accompanying text for a further discussion of the impact of this clause on intellectual property rights in the United States. 161 See, e.g., Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 429 (1984) (stating that the limited grant under Article I “is a means by which an important public purpose may be achieved. It is intended to motivate the creative activity of authors and inventors by the provision of a special" reward, and to allow the public access to the products of their genius after the limited period of exclusive control has expired.”). These merchandising rights in the United States include the exclusive right to publicly distribute the copyrighted work or to authorize such public distribution. See 17 U.S.C. § 106(3)(1997). 162 See generally Jeff Berg, Moral Rights: A Legal Historical and an Anthropological Reappraisal, 6 Intell. Prop. J. 341 (1991); Steven L. Carter, Does It Matter Whether Intellectual Property Is Property?, 68 C hi.-Kent L. Rev. 715 (1993) (advocating support for authors* moral rights); Wendy J. Gordon, A Property Right in Self-Expression: Equality and Individualism in the Natural Law o f Intellectual Property, 102 Y ale L.J. 1533 (1993); Peter Jaszi, Toward a Theory o f Copyright: The

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author’s personality was protected under these schemes— not sim ply the economic value o f the artist’s labor in creating the work.163 TRIPS did not choose among these com peting schem es, but allow ed both rationales to flourish.164 Given that TRIPS expressly permits members to adopt measures that promote their own socio-econom ic interests and that the standards set forth in the treaty are broadly worded,165 developing nations should be able to craft dom estic laws that protect their culture from the harm o f de-culturization w hile com plying with international standards under TRIPS. Although this Article uses the broadest definition o f “culture” in examining the potentially adverse impact o f globalization and foreign investment on native culture, in reality not all aspects o f such “culture” need specially crafted intellectual property laws to protect them from de-culturization. “Traditional”166 artistic, literary Metamorphosis of 'Authorship,' 1991 Duke L.J. 455 (1991); Michael B. Reddy, The Droit de Suite: Why American Fine Artists Should Have the Right to a Resale Royalty, 15 Loy. L.A. Ent. L.J. 509 (1995). This does not mean that commercial exploitation is not considered a significant right, merely that such right derives from the value of personality, and not simply from the desire to compensate an author’s labors. 163 See supra note 162 and sources cited therein. 164 The exception of the moral rights provisions of Article 6bl1 of the Beme Convention from inclusion in TRIPS under Article 9 does not contradict this view. See TRIPS, supra note 7, art. 9. Although such exclusion represents, to a certain extent, the victory of the U.S. position that only economic rights should be included in TRIPS, the exclusion does not prohibit moral rights protection or copyright protection regimes based on the recognition of the personality value of the creative act or a creator’s “natural right” to control her creation. To die contrary, TRIPS allows such systems to continue to flourish by virtue of its broad conceptual terms which allow and, the author contends, promote variable treatment by adhering nations. See supra notes 143-50 and accompanying text (discussing the variable treatment under TRIPS of diverse intellectual property protection issues). Such variable treatment includes permitting diverse philosophical foundations for protection. See supra notes 142-49 and accompanying text. Given that TRIPS is intended to be a trade-based treaty, failure to include non-economic rights, such as moral rights, is fully in keeping with the trade objectives of TRIPS and may be explained on that basis. 165 See TRIPS, supra note 7, art. 31; see also supra notes 141-48 and accompanying text for examples of such broadly worded standards. 166 The term “traditional” is not intended in this instance to refer to a particular style or type of work, such as “classic,” “neo-classic” or the like, but to those works which fit easily within the definitions of a protectable work, see supra note 60 (citing examples of such works) and have a readily-identifiable creator capable of exercising control over the use and dissemination of the work in order to avoid its de-culturization.

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and m usical forms are already amply supported by “traditional” W estern view s o f protected rights represented in the intellectual property laws sought by foreign m ultinationals.167 Instead, it is those forms o f “culture” that do not readily conform to such traditional view s that are m ost in need o f a new approach to assure their protection. Such “non-traditional” forms lack an identifiable creator. They cannot be considered within the type o f “products o f the mind” protected due to individual effort or by the need to protect a particular creator’s personality-value. They are m ost often forms which are currently considered part o f the public domain16* because o f their long existence or their current identification as part o f a nation’s cultural patrimony.169 Such forms include, but are not be lim ited to, fables, stories, m yths, rituals, costum es, folk m edicine and other elem ents o f pre-literate society that combine to form cultural “expression” or heritage.170

167 Most copyright laws of the developed countries protect “traditional” musical, literary and artistic works, such as novels, poetry, songs, paintings and sculpture. See supra note 8 and accompanying text. These laws in turn grant the creator the right to control the exploitation of these works. See supra note 47 and accompanying text. By contrast, folklore and other “works” which do not have an identified creator do not readily fit within these “traditional” forms. See generally Cathryn A. Berryman, Toward More Universal Protection o f Intangible Cultural Property, 1 J. Intell. Prop. L. 293 (1994); see also Bellagio Declaration, supra note 21, at 108. 168 Works may be considered in the public domain either through failure to comply with required formalities for protection, such as, failure to publish a copyrighted work with adequate notice, see 17 U.S.C. § 401 (1988) (subsequently revoked under the Beme Implementation Act of 1989), or failure to exercise quality control over a trademark, see Dawn Donut Co. v. Hart’s Food Stores, Inc., 267 F.2d 358, 366 (2d Cir. 1959), or due to expiration of the period of time granted for protection of the work under domestic law, see 17 U.S.C. § 302 (1997) (establishing the term limits for U.S. copyrights). 169 See supra note 21 and accompanying text (defining “cultural patrimony”). 170 In an excellent examination of the problems posed by efforts to protect folklore as culture, Cathym A. Berryman defined folklore’s basic traits as follows: (I) It is passed from generation to generation by unfixed forms; (II) It is a community-oriented creation in that its expression is dictated by local standards and traditions; (III) Its creations generally are not attributable to individual authors; and (IV) It is being continually utilized and developed by the society in which it lives. Berryman, supra note 167, at 311. These traits help underscore some of the more problematic aspects in crafting intellectual property laws that protect folklore and other elements of cultural heritage while still complying with present international standards.

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Since m ost folklore and ritual lack identifiable creators or holders o f rights, their protection pose unique problems for intellectual property regimes. There is no question that one o f the m ost difficult issues regarding the protection o f works o f folklore is the adverse effect such protection would presumably have on the scope o f works available from the public domain. Virtual elim ination o f the public domain through the w holesale protection o f all cultural elem ents o f a society would do untold harm to the creation o f future works. At a minimum, such control would im pose derivation costs not currently present by requiring the payment o f license fees for use o f protected elem ents. Where control over the formerly public domain elem ents is exercised by a governmental agency, there is also a serious threat o f censorship. Selective use o f protection o f cultural works that might otherwise be considered part o f the public domain, creating a lim ited “domain public payant,” should reduce harmful derivation costs by removing only those elements o f the nation’s culture from unfettered use w hich the nation itself believes to be either more vulnerable to deculturization or more valuable to the maintenance o f the country’s cultural heritage.171 Censorship is a more problematic issue, but the refusal to protect cultural elements from the harm o f de-culturization solely on the basis that such protection might result in censorship is to See generally supra note 2 and accompanying text (discussing the elements of cultural heritage). 171 For these reasons, the author does not support or recommend the development of an across the board, unlimited public domain “payant” such as established in Section 17 of the Tunis Model Law, supra note 22. This model law, developed under the auspices of UNESCO and designed to assist developing countries in devising copyright laws which would protect their countries’ valuable intellectual property, including folklore, contains many provisions which the author believes are not required under current international standards and may actually defeat the goals of protection they are designed to meet. Thus, for example, under Section 17 of the Tunis Model Law, “use of works in the public domain or their adaptation, including works of national folklore” are subject to use fees based upon a specified percentage of the receipts “produced” by such use. Id. § 17. While a limited “domain public payant” may serve the cultural protection goals discussed in this Article, see supra note 165 and accompanying text, an unrestricted one could raise the cost of native creativity without providing an equivalent societal benefit The goal of a public domain “payant” should be to protect native and indigenous culture, not simply to raise funds regardless of the use to which public domain elements are being put.

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ignore the concrete problem o f de-culturization for the potential problem o f harmful censorship.172 M oreover, the threat o f uncontrolled censorship can be reduced through careful delineation o f the types o f elem ents to be protected and the acts or uses that qualify as “unauthorized.” The purpose o f the protection regime proposed in this Article is to prevent the creation and distribution o f de-culturized products.173 Only those uses that remove the significant cultural meaning, o f works, rituals and the like should be prohibited. Thus, for example, parody and satire should not generally be prohibited since they are not based on deculturization but, in fact, rely upon the acknowledged existence o f the cultural traditions being parodied. It is the author’s contention that copyright laws can form the first line o f defense in protecting indigenous culture and still com ply with TRIPS standards. There is no requirement under TRIPS that protected works be recorded or fixed in som e tangible medium o f expression.174 Oral works and performances, such as fables, storytelling, and folkloric dances and rituals, may thus be protected despite the absence o f a fixed record o f such

172 It is not the author’s intention to discuss the merits of censorship or to debate on a metaphysical level whether protection of intellectual property rights itself serves as a form of censorship. There are, however, levels of censorship which harm the vitality of cultural growth and interchange of ideas. See supra note 27 and accompanying text (discussing the positive impact of cross-cultural borrowing and efforts to regulate such borrowing). This type of censorship must be avoided to prevent the proposed protection scheme from becoming a sword that strikes down the very culture it is designed to protect. See, e.g., Benjamin Kaplan, A n Unhurried V iew of Copyright (1967) (equating the flourishing of Elizabethan literature with the relatively free borrowing of plots, characters and the like by authors). 173 The second purpose of the proposed protection scheme is undeniably to provide compensation to the developing country for the development of mass-marketable products and processes. Such purpose, however, does not directly impact censorship concerns. 174 The Beme Convention, incorporated by Article 9 of TRIPS, merely provides member countries with the right to “prescribe that works . . . shall not be protected unless they have been fixed in some material form.” Beme Convention, supra note 8, art. 2(2), 828 U.N.T.S. at 227. Although U.S. law requires fixation, other countries do not. Compare 17 U.S.C. § 102 (1997) (limiting protection to “works . . . fixed in a tangible medium of expression”) with Russian Federal Copyright Law, supra note 8, art. 6(2) (extending protection to oral works “in any objective form whatsoever”).

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performances.175 Since there is no requirement o f originality or intellectual creativity under TRIPS for copyright-protected works,176 the fact that such folklore has been in existence for centuries— and may therefore lack present day “originality”— should not preclude its protection.177 Similarly, the absence o f an identifiable “author” for such folklore should not preclude protection. U .S. and European intellectual property laws reflect the “romantic” view o f the author as creative genius and appear on their face to require a natural person to be at the heart o f the creative experience.178 N o such international requirement exists, how ever.179 Furthermore, the growth o f doctrines such as “work for hire,” which grant copyright ownership to the employer for works created by em ployees within the scope o f their em ploym ent,180 and the protection o f collective 175 Presumably such fables, pantomime and ritualistic dance would fall within the categories of potentially protected literary and artistic works, more specifically lectures, dramatic works and choreographic works. See Beme Convention, supra note 8, art. 2(1), 828 U.N.T.S. at 227 (incorporated into TRIPS under art. 9); see also supra note 57 (defining protected works under the Beme Convention). 176 The only requirement for intellectual creativity under TRIPS is for compilations of data. See TRIPS, supra note 7, art, 10(2). 177 To the contrary, given the largely anonymous nature of most cultural works, and their relatively lengthy existence (often pre-dating literate society), an “originality” requirement, applied conscientiously, would preclude protection of many works which, the author believes, should be protected from harmful de-culturization. For this reason, the author does not support the adoption of the Tunis Model Law, without changes, since it appears to limit protection to “original” works. See Tunis Model Law, supra note 22, §§1(1), 1(3). 178 See, e.g., Peter Jaszi, Toward a Theory of Copyright: The Metamorphoses o f “Authorship, ” 1991 Duke L.J. 455,485-91 (1991); David Lange, At Play in the Fields o f the Word: Copyright and the Construction of Authorship in the Post Literate Millennium, 55 La w & Contemp. Probs. 139 (1992). 179 Neither the Beme Convention nor TRIPS requires a human agent as an author. Although both treaties discuss rights to works in terms of “authors,” neither defines the term. Furthermore, the rights granted to such “authors” do not preclude their exercise by a non-human agent. See Beme Convention, supra note 8; Paris Convention, supra note 53. 180 See 17 U.S.C. § 101 (1997) (defining a “work made for hire” as inter alia “a work prepared by an employee within the scope of his or her employment”); see also 17 U.S.C. § 201 (1997) (granting ownership rights in a work for hire to the employer). For a brief review of European work for hire doctrines, see, for example, Gerald Dworkin, The Moral Right of the Author: Moral Rights and The Common Law Countries, 19 C olum.-VLA J.L. & A rts. 229 (1995); Robert A. Jacobs, Work-For-Hire and the

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works181 have already seriously eroded the view that “authorship” requires a sole human agent as the focus for copyright protection. A s a practical matter, the absence o f an identifiable author may make the enforcement o f granted rights difficult because no one person would have the standing to assert the protected right. Where there is no identifiable author, as in the case o f a folkloric fable or traditional ritual, copyright ownership could reside in a private or governmental rights organization charged w ith licensing the use o f such works. Such organizations could assure that com m ercialization o f protected works does not result in deculturization.182 D eveloping countries are already using copyright law to protect their folkloric traditions. For example, Russian copyright law protects oral works, including folklore.183 Chinese copyright law protects quyim— a form o f unfixed ritual dance and pantom im e.185 Cuban copyright law protects “works o f folklore” Moral Right Dilemma in the European Community: A U.S. Perspective, 16 B.C. Int ’ l & Comp. L. Rev. 29 (1993). 181 See 17 U.S.C. § 101 (1994) (defining a “collective work” as “a work, such as a periodical issue, anthology, or encyclopedia, in which a number of contributions, constituting separate and independent works in themselves, are assembled into a collective whole”). By their nature, collective works are often the result of collaborative efforts and are in direct opposition to the sole authorship view of traditional copyright doctrines. 182 Such organizations could be modeled on ASCAP or other private or governmental models. To limit the increase in derivation costs, minimal fees could be charged for those who seek to use the elements to create new works that maintain the required cultural contextualization to prevent de-culturization. For further information about ASCAP, see American Society o f Composers, Authors, and Publishers (visited Jan. 1, 1998) . 183 See Russian Federation Law on Copyright and Neighboring Rights art. 6 (1993), reprinted in United Nations Educational, Scientific, and C ultural O rganization, 3 Copyright Laws and Treaties of the W orld (Supp. 1995). The scope of folklore protected is not so broad as, for example, under the Tunis Model Law, supra note 22, since Article 8 specifically excludes “folk art” from the scope of copyright works. See id. art. 8. Thus, those elements of “folklore” which are embodied in works of folk art, such as icons or other objects of figurative arts or wall hangings, would be excluded from protection. Fables, pantomimes and other elements of folklore, however, remain protectable. 184 See Guo Shoukan, China, 1 International C opyright L aw & Practice (Paul E. Geller et al. eds., 1997) (citing Copyright Act of the Peoples’ Republic of China, art 3 (1990)). 185 Quyi is defined under Chinese copyright law as xiang sheng (cross talk), kuaishu

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that apparently are “o f an original character,”186 and “involve creative activity on the part o f their authors.”187 These laws could form useful study m odels for other countries to consider in developing protection standards for their own folkloric and ritual traditions.188 However, when crafting protection for “folklore,” the scope o f the protected work should be clearly defined so that enforcement is predictable in accordance w ith international standards. Similarly, a finite term o f protection needs to be established. The term o f protection should be no greater than required to protect the cultural elem ent at issue from die threat o f de-culturization. This period o f protection could be lim ited by a specified term measured from the date o f creation (if such a date can be determined), or from the date o f first efforts to produce or market de-culturized products.189 The integrity o f costum es, rituals, literature and artwork can be (clapper talk), dagu (ballad singing with drum accompaniment) and pingshu (story telling based on classical novels), which are all used for performance involving mainly recitation or singing or both. See id. 186 Cuban Law of Copyright, arts. 2, 26, reprinted in United N ations Educational, Scientific, and Cultural O rganization, 2 C opyright Laws and Treaties of the World (Supp. 1977). Article 26 of the present Cuban copyright law protects “works of folklore.” To qualify for protection, a work of folklore “must have been transmitted from generation to generation, thereby contributing in an anonymous and collective manner, or in any other form, to a national institution of cultural character.” Id. art. 26. The act, however, only specifically grants protection to persons who assemble and compile “dances, songs, proverbs, fables and other manifestations of national folklore which are “authentic and specific works.” Id. art. 27. Article 2 further limits copyright protection to “works of an original character” which “involve creative activity on the part of their authors.” Id art. 2. At first blush, the requirement of “originality” appears limited to enumerated categories of protected “original works,” including “written and oral works, musical works [and] choreographic works . . . Id. However, since works of folklore appears to include dances, songs and fables, which fall within the enumerated categories of protected works, originality may also be required to protect “folklore.” 187 Id. art. 2. See supra note 186 for a discussion of the apparent requirement of originality in protection of folklore under Cuban law. 188 The author does not mean to suggest that any of these models fully meet current international protection standards. But they, along with the Tunis Model Law, supra note 22, serve as a useful beginning point for utilizing the ideas contained in this Article to create an appropriate protection regime. 189 In the latter case, measurement from the date of first efforts of de-culturization would not establish the date of protection, but, more specifically, the limited term of continued protection.

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further protected through carefully drafted moral rights and trademark laws. Moral rights are non-econom ic rights granted to the author o f a protected work.190 Because they protect reputational rights and the creative value o f the work, moral rights generally survive the transfer o f the author’s copyright interest, and are usually non-transferable and non-waivable.191 Moral rights are not required under TRIPS.192 They are, however, required under Article 66iI o f the B em e Convention, which provides: Independently of the author’s economic rights, and even after the transfer of said rights, the author shall have the right to claim authorship of the work and to object to any distortion, mutilation or other modification o f or other derogatory action in relation to, the said work, which would be prejudicial to his 193 honor or reputation. One o f the rights included among an author’s moral rights is the right o f integrity.194 This right prohibits the alteration o f a protected work without the author’s perm ission.195 Thus, for exam ple, film s in the United States may be colorized without the director’s permission because the director has no recognized moral rights in die film .196 B y contrast, in France, the director’s moral rights preclude such unauthorized m utilation o f the film ’s integrity.197 Moral rights laws may sim ilarly be used to maintain

190 See, e.g., Jack A. Cline, Moral Rights: The Long and Winding Road Toward Recognition) 14 N ova L. Rev . 435,435 (1990). Moral rights are designed to protect the author’s reputation rights and the creative value of the work. See id. 191 See, e.g., Raymond Saurraute, Current Theory on the Moral Right o f Authors and Artists under French Law, 16 A m . J. C omp. L. 465 (1968). 192 Article 9 expressly exempts the moral rights provision of the Berne Convention from inclusion, and does not require any equivalent rights be granted by members. See TRIPS, supra note 7, art. 9. 193 Beme Convention, supra note 8, art. 6to, 828 U.N.T.S. at 235. These moral rights are generally referred to as including the right of attribution, or patrimony, and the right of integrity. 194 See, e.g., Cline, supra note 190, at 438. 195 See Beme Convention, supra note 8, art. 6bb(1), 828 U.N.T.S. at 235. 196 U.S. copyright law currently extends moral rights protection to works of visual art, which does not include motion pictures. See 17 U.S.C. §§ 101, 106A (1994) (extending rights of “attribution and integrity” to visual artists regardless of copyright ownership in the work in question). 197 See, e.g.t Judgment of May 28, 1991 (Huston v. LaCinq) Cass, le civ. 1991

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the cultural integrity o f native works.198 Such law s could grant the creator o f the work the legal right to protect the work against unauthorized alterations. These, laws should specify that such rights exist separate from any copyright transfers. Where the work has no identifiable creator, a designated rights organization could be granted moral rights over the work. H owever, where moral rights are not exercised by a natural person, who has a finite life­ span and, therefore, a finite right to control the moral rights contained in a work, it may be desirable to establish a measurable period o f time during which moral rights exist.199 Care should be exercised to limit control over integrity to de-culturizing uses. Thus, for example, w hile a parody may, on its face, appear to violate the integrity o f a work,900 such uses should generally qualify as permissible exceptions since, as noted earlier, parodies do not usually qualify as a de-culturizing use.201 Bull. Civ. No. 89-19.522 (Fr). 198 Although moral rights are usually designed to protect a human author’s reputation value, the absence of a definable author for most works of folklore sought to be protected under the proposed regime should not preclude the application of moral rights principles. To the contrary, the protection of integrity and reputation value embodied in moral rights principles are strongly analogous to the prohibition of decontextualizing de-culturization that is the concern of this Article. 199 Given the close relationship between copyright and moral rights, the author recommends a term of protection co-extensive with the term of copyright granted the work at issue. 200 A parody must necessarily “mimic [the] original to make its point.” Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 580-81 (1994). This need to “conjure-up the original,” may result in a work that is close enough to the original to be considered an unauthorized alteration of the work. See id. at 1168. 201 The author recognizes that “true parodies” and satires are not always easy to distinguish from de-culturizing uses. Much of the debate in U.S. copyright law over whether a work qualifies as a fair use parody or illegal infringement is based upon an often unpredictable analysis of the extent to which the original work is required to be used to call-up the original. Compare Loew’s Inc. v. Columbia Broad. Sys., 239 F.2d 532 (9th Cir.), aJjTd, 356 U.S. 43 (1956) (per curiam) (holding burlesque of movie “Gaslight” which utilized key scenes and dialogue did not qualify as a fair use because “a parodized or burlesque taking is to be treated no differently from any other appropriation”) with Campbell, 510 U.S. at 569 (holding parody of the song “Pretty Woman” is fair use because of its transformative nature—regardless of the amount of the original utilized). As Justice Kennedy, in his concurring opinion in Acuff-Rose, recognized: “As future courts apply our fair use analysis, they must take care to ensure that not just any commercial take-off is rationalized post hoc as a parody.” Id. at 680. Care must similarly be taken to assure that not just any commercial take-off is

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Trademark laws may also be used to protect against the im perm issible marketing o f de-culturized products. Although trademark law generally protects source designators,202 it can also be used to protect against false descriptions or representations related to marketed goods and services. Thus, for exam ple, section 43(a) o f the Lanham (Federal Trademark) A ct o f the United States prohibits the unauthorized use in interstate commerce o f any “false or m isleading description . . . which is likely to cause confusion, or to cause mistake or to d e c e iv e ”203 This statute has been used to prohibit the unauthorized alteration o f broadcasted comedy skits because such alteration constitutes a false description—an unannounced departure from the original.204 Similar applications may be used to prohibit the comm ercialization o f specified cultural rituals without adequate notice o f the de-culturized nature o f such rituals. This notice could include a detailed disclaim er regarding the de-culturized nature o f the cultural artifact or ritual in question. W hile this lim itation does not prohibit the marketing o f de-culturized products, it does at least require that such products be put in a cultural context. Such contextualization would reduce som e, but not all, o f the harm created by its de-culturization. Patent laws, in the author’s view , may be o f relatively lim ited significance in the fight against de-culturization. They might, however, be crafted to protect the practice o f folk m edicines. Since TRIPS requires commercial application as w ell as an “inventive step,”205 patent laws them selves probably could not be used to protect the practice o f a well-known folk remedy p e r se and still com ply with international standards. Patent protection, however, could be made available for the distillation o f the chem ical composition that has the required therapeutic characteristics or for the manufacturing processes utilized to condemned as an unauthorized alteration. 202 See Jerome Gilson, Trademark Protection and P ractice (1996); Long, U nfair Competition and The Lanham A ct, supra note 1 14; J. Thomas M cC arthy, M cC arthy on Trademarks and U nfair Competition (3d ed. 1995). 203 15 U.S.C. § 1125(a) (1997). 204 See Gilliam v. American Broad. Cos., 538 F.2d 14,24 (2d Cir. 1976). 205 See TRIPS, supra note 8, art 27. See also supra note 107 and accompanying text for a brief discussion of this requirement.

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com m ercialize the folk remedy. In crafting such laws, the author strongly urges reconsideration o f the first-to-file procedures generally adopted for patent applications.206 Such procedures, which grant patent protection to the first applicant to file for protection, as opposed to the first to invent, do not adequately protect the rights o f indigenous practitioners. To the contrary, they virtually guarantee that multinational corporations, who have a more sophisticated approach to patent applications, w ill obtain patents for such folk rem edies.207 By contrast, where protection is granted to the first

206 Under first-to-file procedures, the patent is granted to the first applicant to file a valid application disclosing a patentable invention. This procedure has the benefit of easy administrability and places the greatest emphasis on winning the race to the Patent Office. When combined with publication of pending applications, the end result of this procedure is to encourage early public dissemination of potentially patentable inventions. By contrast, first-to-invent procedures grant the patent to the first person to invent a patentable device, regardless of when the application is filed. For instance, in order to qualify as the first inventor, the United States requires that the applicant have been the first to conceive of the invention and have worked diligently to reduce the conception to practice. See 35 U.S.C. § 101 (1997). First-to-invent procedures emphasize, within limits, rewarding the act of conception but may delay patent issuance due to interference proceedings brought by other alleged first investors claiming rights to the applied-for invention. The first-to-invent system may adversely affect predictability of patent enforcement, since even an issued patent might be subject to a claim that another person developed the invention first. For an examination of the first-to-file debate, see generally Charles R. B. Macedo, First-To-File: Is American Adoption o f the International Standard in Patent Law Worth the Price?, 1988 Colum. Bus. L. Rev. 543 (1988); Robert W. Pritcherd, The Future is Now—The Case for Patent Harmonization, 20 N.C. J. Int’ l L. & Com. Reg. 291 (1995). 207 The grant of patents for folk medicines and seed varieties have caused some of the most heated debates over the desirability of intellectual property protection regimes for developing countries. See Peter Jinks, Battle Ahoy Over "Pirates " of Bio-Booty, The Scotsman, May 25, 1997 (discussing the threat to the Third World posed by protection for bio-technology products); Michael D. Lemonick, Seeds o f Conflict, Time, Sept. 25, 1995, (Magazine), at 50 (discussing the patenting of a pesticide made from neem seeds from India); Alan Simpson, The Theft o f Our Souls, The Guardian (London), July 11, 1997, at 019 (discussing problems posed by granting patents on the “healing powers of the neem trees”); Sowing the Seeds o f Conflict, The Hindu, Mar. 23, 1997, at 25 (examining the adverse effect of patent protection on seed varieties); S.M. Mohamed Idris, Doublespeak and the New Biological Colonialism (visited Feb. 16, 1997) (alleging a double standard for protection of knowledge where knowledge of Third World farmers “does not qualify as knowledge” but laboratory creations qualify as “new knowledge” for

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inventor, it is more likely exploitation rights w ill be held by native users. Finally, trade secret laws could be developed that protect manufacturing, gathering and curing techniques for folk m edicines. Although such processes lack the novelty required for patent protection, where the processes have been disclosed in an environment where confidentiality was required (such as to a lim ited number o f practitioners, sworn to secrecy), such processes could continue to be protected under a carefully drafted trade secret law. IV . C onclusion D eveloping countries cannot survive without becom ing active participants in the global marketplace. Such participation, fueled largely by foreign investment, often places the culture and heritage o f developing countries on a collision course with the global consumer culture o f the more powerful developed countries. The com m odification and de-culturization o f native and indigenous culture that results from such a collision is supported, and may even be enhanced, by the intellectual property protection regim es enacted by the developing countries at the behest o f foreign investors. Although the purpose o f such law s is usually seen through the narrow prism o f protecting the technological investm ent o f foreign m ultinationals, present international protection standards do not require such a view . To the contrary, despite the potential for m isuse in supporting the com m odification and de-culturization o f native and indigenous culture, properly crafted and enforced intellectual property laws may not only m eet the protection demands o f foreign investors but can actually shield a country’s cultural heritage against the leveling forces o f globalizing de-culturization. U sing the protection norms o f the B em e and Paris Conventions, as refined by TRIPS, developing countries can craft a protection regime that would provide protection for such critical cultural elem ents as folklore, ritual, costum es, and folk m edicine. Focusing on copyright as the primary tool for inhibiting unauthorized de-culturization o f cultural works, these regim es which patent protection is available).

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would recover cultural works by redefining the scope o f public domain elements and establishing organizations to administer these new ly expanded rights. A careful balance is required to avoid imposing too high a cost for the creation o f new works using protected elements and to avoid the threat o f harmful censorship. N ative culture must not only be protected by such laws, but must also be allowed to flourish. Thus, too strict an application o f the law s could destroy (through stagnation) the very culture the law was designed to protect. Appropriately crafted moral rights, trademark, patent, and trade secret laws should be enacted to support these efforts. In addition to serving as a cultural shield, strong intellectual property protection m ay positively affect the variety o f dom estically-created products available for consumption. W ith the assurance o f a sufficient econom ic return granted under such laws, native authors and artists w ill have greater incentive to spend the tim e, money and effort to create new products for a growing marketplace. Where legitim ate channels o f distribution are protected, problems o f scarcity and inconsistent supply m ay be elim inated, further expanding the available pool o f products and services. In order to assure that these positive developm ents are not purchased at the price o f the destruction o f the country’s native and indigenous culture, however, laws must be created with the dual roles o f promotion o f econom ic growth and protection o f culture firmly in mind. The secret is in creating an acceptable set o f intellectual property laws that meet these twin goals. It is not an easy task, but for developing countries, it may w ell be a matter o f cultural survival.

[16] H as Creativity Died in the Third World? Some Im plications of the Internationalization of Intellectual Property R u th I.

L.

G ana*

I n tro du ction

The recently concluded round of multilateral trade negotiations ac­ complished some significant changes in the multilateral trading system.1 As with its predecessor agreements, the Uruguay Round agreement is ex­ pected to boost the world economy as a result of a negotiated reduction in tariffs. Under the new agreement, nations made commitments to reduce

* Associate Professor of Law, University of Oklahoma, College of Law, Norman, Oklahoma. This article was written while I was a Visiting Research Fellow at the MaxPlanck Institute for Foreign and International Patent, Copyright, and Competition Law, Munich, Germany. The article is adapted from 2 chapters of my doctoral dissertation sub­ mitted to Harvard Law School. An earlier version of the article was presented at the Law and Society Association Annual Meeting held June 1-4, 1995, in Toronto, Canada. I am very grateful to Professor Leroy Vail for his unstinting and unwavering support of my scholar­ ship and other professional endeavors. He, as always, read earlier drafts of this article and gave insightful suggestions and challenging criticism. He has been teacher, mentor and friend and I express my sincere gratitude to him. I am also grateful to Professor William Alford whose comments on the relevant chapters of my dissertation sharpened my ideas and helped me develop my themes more clearly. Professor Rennard Strickland took time from an extremely busy schedule to read and provide comments which helped me clarify some points on Native Indian approaches to property and creative expression; his steadfast en­ couragement and support of my professional development has been an enormous blessing to me. Comments from attendees at the Harvard S.J.D. Colloquium held on April 13, 1995, where I presented my initial ideas helped me think more thoroughly through some of the complex anthropological and cultural concerns; Kevin Wisner provided dedicated research assistance; the Max-Planck Institute for Foreign and International Patent, Copyright, and Competition Law, Munich, Germany, and the University of Oklahoma College of Law pro­ vided financial support during the summer. 1. The Uruguay Round of multilateral trade negotiations is the eighth round of world trade negotiations since the inception of the multilateral trading system established by the General Agreement on Tariffs and Trade (GATT) in 1947. As part of the institutional framework established by the Bretton Woods system after World War II, the primary pur­ pose of the GATT was to limit government measures which distorted international trade flows. This goal was important for both political and economic reasons. Restrictive or unfair trade policies by nations, it was felt, increased the incidence of protective measures by other sovereign nations which in turn led to retaliatory practices with widespread repercussions. Economic conflict also engendered political hostilities which had devastating effects on the world economy. The GATT system was thus the result of what the victor nations of World War II felt was advantageous for worldwide economic and political stability. Today, good trade relationships between sovereign nations is still closely linked with political coopera­ tion. See A Gift From the Cold War: Bretton Woods Revisited, T h e E c o n o m is t , July 9, 1994, at 4, 4.

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tariff rates,2 agreed on clearer rules to govern unfair trade practices,8 and established a unified dispute resolution system.4 Most significantly, the Uruguay Round established a new international institution, the World Trade Organization (WTO), to administer and oversee the new body of trade rules.5 Nations ratifying the WTO Charter automatically become subject to the three annexed agreements8 which constitute the new GATT. By offering a “single package” GATT agreement, the WTO Char­ ter ensures that countries wishing to join the multilateral trading system will be bound by all the agreements, thus eliminating to a large extent, the problem of free riding.7 As a whole, the “new GATT” is not as much “new” as it is “im­ proved.” There is a clear commitment under the WTO charter to con­ tinue to follow and uphold prior GATT decisions, practices, and proce-

2 . The Uruguay Round, it is projected, will reduce tariffs by 24% and 38% for devel­ oped and developing countries respectively. See J o h n H. J a c k s o n e t a l . , L e g a l P r o b l e m s o f I n t e r n a t i o n a l E c o n o m ic R e l a t i o n s , C a s e s , M a t e r i a l s a n d T e x t 6 ( 3 r d E d . 1 9 9 5 ).

3. The Uruguay round initially was not expected to deal with the Antidumping code established under the Tokyo Round in 1979. However, dissatisfaction with the 1979 Code led to a new compromise code, the Uruguay Round Antidumping Agreement. See A g r e e ­ m e n t o n I m p le m e n t a t io n o f A r t . VI o f GATT 1994; U r u g u a y R o u n d A g r e e m e n t A c t , P u b . L. No. 103-465, 108 S t a t . 4809 (1994). See also J a c k s o n , supra note 2 , at 685. 4. Dispute resolution in international trade is regulated generally by GATT Art. XXIII. See 61 Stat. A3, 1366, T.I.A.S. 1700, 55-61 U.N.T.S. Under the Uruguay round, a Dispute Settlement Understanding was negotiated. See A g r e e m e n t E s t a b l i s h i n g t h e M u l t i n a ­ t i o n a l T r a d e O r g a n iz a t io n ( W o r l d T r a d e O r g a n i z a t io n ) [hereinafter WTO C h a r t e r ] , T h e F in a l A c t o f t h e M u lt i n a t i o n a l T r a d e N e g o t ia t io n s (T h e U r u g u a y R o u n d ), P a r t

II, A n n e x 2, S e c . 26.1, 26.2 [hereinafter Uruguay Round]. The Understanding significantly changes the difficult and frustrating dispute resolution process under the old GATT system. To reflect the new resolve for strong and effective rules for dispute resolution, Art. Ill of the WTO Agreement provides that the administration of the Rules and Procedures Governing the Settlement of Disputes is one of the primary purposes of the Organization. See Uruguay Round, P art II, Annex 2, Sec.3. Further, the Dispute Settlement Understanding clearly states that dispute settlement is a core part of the new GATT system. Id. at Part II, Art. III, Sec. 3. 5. The WTO is a full fledged international institution with legal personality. It is re­ sponsible for the coordination and administration of all the texts which make up the Uru­ guay Round Agreement. The Charter establishes a Secretariat to be headed by a DirectorGeneral who will be assisted by several Assistant Director-Generals. The Charter establishes a budget and gives the WTO authority to work with other international institutions, includ­ ing non-governmental organizations, to promote the aims and objectives of the GATT. See id. at Art. V-VIII. 6 . There are four annexes to the WTO Charter, but only three are mandatory for all contracting parties. The first annex consists of the multilateral agreements made up of GATT 1994, the General Agreement on Trade in Services and the agreement on Trade Re­ lated Aspects of Intellectual Property Rights. The second annex is the Dispute Settlement Rules and the third annex the Trade Policy Review Mechanism. See WTO Charter, supra note 4. 7. The problem of free riding had been a consistent complaint under the old GATT, particularly because ratification of side agreements was not required of all the contracting parties. Since the most favored nation (MFN) principle required the extension of conces­ sions to all other GATT contracting parties, some countries were able to gain benefits with­ out attendant costs in concessions. See J a c k s o n e t a l . , supra note 2 , at 383-384.

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dures.8 Old rules have been strengthened and new commitments have been secured to ensure that the world economy benefits from the fruits which free trade promises. Only months after its implementation, the Uruguay Round is already beginning to have its intended effect: world trade is expected to grow 8.9 percent in 1995 and continue into 1996 at 7.8 percent.® Beyond the institutional changes which the Uruguay Round accom­ plished, and even beyond the economic benefits which the new m ultilat­ eral agreement offers most countries, the single most im portant accom­ plishment of the Uruguay Round is the extension of trade rules to new subject matters. Prior to the Round, the m ultilateral trade system dealt primarily with trade in m anufactured goods. Under the auspices of the Uruguay Round, two additional subject m atters were added to the juris­ diction of the multilateral trading system: intellectual property and trade in services. These two new areas resulted in an agreement on Trade Re­ lated Aspects of Intellectual Property Rights (TR IPS)10 and the General Agreement on Trade in Services (GATS),11 both of which were negotiated as part of the Uruguay Round. These three agreements, the GATT, GATS, and TRIPS form the core of the new multilateral trading system to be administered by the WTO. This article examines the implications of the TRIPS agreement in the context of intellectual property issues in Third World countries.13 It focuses specifically on the impact of the new internationalization of intel­ lectual property on creativity in Third World countries. The broad thesis is th at the nature of protection of intellectual goods proceeds apace with the rate and development of capitalist relations in a society. Rather than focusing on the use of TR IPS as a means of combatting international piracy,13 or as a tool to secure foreign compliance with minimum stanSee WTO Charter, supra note 4, at Art. XVI: 1. 9. See Economy: Slower OECD Growth May Affect Developing Nations, Inter Press Service, June 20, 1995, available in LEXIS, NEWS Library, Curnws File. 10. TRIPS Agreement, 33 I.L.M. 81 (1994). 11 . General Agreement for Trade in Services (GATS), Dec. 15, 1993, 33 I.L.M. 44 (1994). 12 . Although aware that the term “Third World” is no longer deemed appropriate for use, I opted to use this term because the alternative term, “developing countries,” typically denotes sovereign states and is not necessarily inclusive of indigenous peoples. The subjects of this paper include indigenous groups, such as Native Americans and Aboriginals, premodern societies, such as Israel in Biblical times, as well as developing countries such as China and Brazil. The common denominator among those subjects is the existence of tradi­ tional organizational norms upon which the larger suprastructure of the modern state is superimposed. 13. It is no secret that the main impetus behind the TRIPS agreement is to secure enforcement of U.S. intellectual property rights abroad. Very early on in the Uruguay nego­ tiations, intellectual property was identified as a “high priority” for the United States. The number of articles on this issue are voluminous. For a good overview, see, e.g., Marshall A. Leafier, Protecting United States Intellectual Property Abroad: Toward a New Multilater­ alism, 76 I o w a L. R ev . 273 (1991); Alan S. Gutterman, International Intellectual Property: A Summary of Recent Developments and Issues for the Coming Decade, 8 C om p. & H ig h 8.

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dards of intellectual property protection,14 this article instead examines the implications of TRIPS as a form of passive coercion; that is, the re­ quirement that Third World societies establish particular forms of pro­ tection for intellectual goods as a condition to membership in the new m ultilateral trading system. This requirement m ust be met despite the fact th at these forms may be both incompatible with cultural institutions within these societies and invalid under local law and custom. The TR IPS agreement thus raises a significant point of conflict between de­ veloping country governments and traditional societies which are constit­ uents of these countries. The conflict is one which implicates the disci­ pline of international law and human rights because the TRIPS agreement, in this regard, impinges upon the freedom of a collective to observe, develop and preserve the underlying values of its society as ex­ pressed through law. The state has conflicting obligations to these socie­ ties and to the international community under the TRIPS agreement. The article then examines what contemporary forms of intellectual prop­ erty protection suggest about creativity in the Third World. Finally, the article examines the relationship between the “global model” of intellec­ tual property protection and the underlying values and norms expressed in the protection of creativity in the Third World. The central claim is th a t all forms of creative expres­ sion—mechanical, literary, or artistic—are value driven. The nature and variety of goods produced in any society is, initially, a function of needs as the popular adage “necessity is the mother of invention” attests. More important, however, the laws which protect these inventions — laws which define what is to be protected and how th at protection is to be effected — reflect the underlying values of a society. Intellectual property law, like other law “is more than just another opinion; not because it em­ bodies all right values, or because the values it does embody tend from time to time to reflect those of a majority or plurality, but because it is the value of values. Law is the principle institution through which a so­ ciety can assert its values.”16 Further, the selection of what goods to protect and the nature of such protection is shaped by values and needs in accordance with a soci­ ety’s perceptions of what constitutes “the good life.” Nowhere is this more reflected than in the Anglo-American philosophy of copyright pro­ tection which seeks to balance private reward and encouragement of crea­ tive activity with public benefit of access to a goodly supply of literary works. In Macauley’s celebrated 1841 speech in the English House of

L. J. 335 (1992). 14. For articles discussing enforcement, see Note, Willard A. Stanbuck, International Intellectual Property Protection: An Integrated Solution To The Inadequate Protection Problem, 29 Va. J. I n t ’l L. 517 (1989); R. Michael Gadbaw, Intellectual Property and In ­ ternational Trade: Merger or Marriage of Convenience?, 22 V a n d . J. T r a n s n a t ’l L. 223 (1989). 15. A l e x a n d e r M. B i c k e l , T h e M o r a l i t y o f C o n s e n t 5 (1975) (emphasis added).

T ech.

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Commons, the need for copyright was expressed as a m atter of value and perceptions of what is needed for a good life: The principle of copyright is this. It is a tax on readers for the pur­ pose of giving a bounty to writers. The tax is an exceedingly bad one; it is a tax on one of the most innocent and most salutary of human pleasures . . . but it is desirable that we should have a supply of good books: we cannot have such a supply unless men of letters are liberally remunerated; and the least objectionable way of remunerating them is by means of copyright.16

In the United States, Thomas Jefferson’s famed letter to Isaac Mc­ Pherson on the protection of intellectual property reveals a similar under­ standing of the incidents of the good life and society. In his attem pt to balance the competing values implicated by a proprietary theory of intel­ lectual property protection, Jefferson noted: That ideas should freely spread from one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have been peculiarly and benevolently designed by nature [w]hen she made them like fire, expansible over all space, with­ out lessening their density in any point, and like the air in which we breathe, move and have our physical being, incapable of confinement or exclusive appropriation. Inventions then cannot in nature be sub­ ject of property. Society may give an exclusive right to the profits aris­ ing from them, as an encouragement to men to pursue ideas which may produce utility, but this may or may not be done according to the will and convenience of society. . . .17

The idea that copyright, as well as other forms of exclusive privileges, was a necessary part of the good society reflects values such as liberty, property, private enterprise, accumulation of capital and rapid consump­ tion; in a word, values th at nurture capitalism. In the celebrated Slaugh­ ter-House cases18 a majority of the court justified a monopoly privilege on the grounds that in Great Britain and the United States, these governments, . . . representing the people . . . have from time immemorial to the present day, continued to grant to persons and corporations exclusive privileges - privileges denied to other citizens — privileges which come within any just definition of the word monopoly . . .; the power to do this has never been questioned or denied. Nor can it be truth­ fully denied, that some of the most useful and beneficial enterprises set on foot for the general good, have been made successful by means of these exclusive rights, and could only have been conducted to suc-

16. M a c a u le y , C o p y r ig h t , 195, 197 (Trevelyan ed. 1879), quoted in Zechariah Chafee, Reflections on Copyright Law, 45 C o lu m b ia L. R e v . 503, 507 (1945). 17. Reproduced in F.D. Prager, A History of Intellectual Property From 1545 to 1787, 26 J. P a t e n t O f f ic e S o c . 711, 759, 760 (1944). 18. 16 Wall (83 U.S.) 36, (1872).

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cess in that way.19

These values resonate in American legal history, and continue to be reinforced by modern courts. To fully understand how deeply entrenched in the Western European and American vision of the good life intellectual property is, and how the forms of protection reflect this, particularly in the area of copyright, it is im portant to understand the profound intellec­ tual, social and political influence and transformation brought about by literacy in Europe.20 In Gibben’s The History of The Rise and Fall of The Roman Em ­ p ire? 1 the importance of literacy was described in the following way, . . . the use of letters is the principal circumstance that distinguishes a civilized people from a herd of savages incapable of knowledge or re­ flection. Without that artificial help, the human memory soon dissi­ pates or corrupts the ideas entrusted to her charge; and the nobler faculties of the mind, no longer supplied with models or with materi­ als, gradually forget their powers; the judgment becomes feeble and lethargic, the imagination languid or irregular. Fully to apprehend this important truth, let us attempt, in an improved society, to calcu­ late the immense distance between the man of learning and illiterate peasant. The former, by reading and reflection, multiplies his own ex­ perience, and lives in distant ages and remote countries; whilst the latter, rooted to a single spot, and confined to a few years of existence, surpasses, but very little, his fellow-labourer the ox in the exercise of his mental faculties. The same, and even a greater, difference will be found between nations than between individuals; and we may safely pronounce, that without some species of writing, no people has ever preserved the faithful annals of their history, ever made considerable progress in the abstract sciences, or ever possessed, in any tolerable degree of perfection, the useable and agreeable arts of life."

The powerful appeal of literacy, and the vision of the good life it wrought, was felt all over the world as European expansionism took place in Asia, in Africa, and in the Americas. The legitimization of this vision of the good life found a home in Darwin’s writings on evolution. Races and cultures were repeatedly classified in a hierarchical fashion, setting the stage for the series of historical events such as slavery and colonialism. Historians Vail and White explain the intellectual setting in the following: From the mid-1850s onwards, however, an important shift of empha­ sis in writings about race began to occur. By then it was becoming clear that ethnology’s preoccupation with finding physical differences

19. Id. at 66. 2 0 . See generally, L e r o y V a i l a n d L a n d e g W h it e , P o w e r a n d t h e P r a i s e P o em , S o u t h e r n A f r ic a n V o ic e s in H i s t o r y (1 9 9 3 ). 21. E d w a r d G ib b o n s, T h e H i s t o r y o f T h e D e c l i n e a n d F a l l o f T h e R o m a n E m p ire

(Womersley ed. 1994). 2 2 . Id. a t 235.

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between the races not only encouraged notions of polygenesis offen­ sive to faithful Christians but, equally damaging, the study was yield­ ing conclusions of highly doubtful scientific validity. As a conse­ quence, racial theorists began to combine in a new synthesis earlier romantic preoccupations with the uniqueness of individual national cultures with the contemporary pride in technological progress arising from literacy and education. The earlier racism based on calibration thus yielded to a new racism based on cultural distinctions perceived as determined by and linked to racial identity; that races with a com­ mon origin could possess fundamentally different cultures and ways of thinking was soon explained in terms of one of the major organizing ideas of the last half of the nineteenth century, evolutionism. The findings of the new science of archeology had transformed the West­ ern perception of humankinds' position in Time from [Bjiblical brev­ ity to geological expansiveness. Human history thus could be thought of as a gradual evolutionary development through a set of stages. By being situated within the matrix of evolutionism, the old static hierar­ chy of races was given both a temporal dimension and a history. Some races were different from others because they had experienced greater cultural evolution from human-kind's common origin than the others. Important cultural distinctions between races arose from their occu­ pying different places along the path of dynamic evolutionary devel­ opment, with technological advances — such as Gutenburg’s invention of movable type — central to the accumulated differences.88

This intellectual mood was reflected in some literature which, in link­ ing invention to culture, yielded to the temptation to classify in hierarchi­ cal fashion: The Mediterranean race is the most mechanical of all, the blue-eyed and the brown-eyed variety must each settle for itself which shall bear the palm. The Semite is much less so. The mongolian is, perhaps, more ingenious with his hands. The Africans and Papuans are more mechanical than the brown Polynesians; the Eskimo than the red In­ dians; and the Australians are the least clever of all. In each several division of humanity there are smaller centres of invention, owing both to natural ingenuity and to natural resources. In the higher walks of language, art, social structures, literature, science and philos­ ophy, the peoples of Europe and Asia will need a new distribution for each classific concept. The Hebrew has never been excelled for sub­ lime conceptions on religious topics, the Egyptian invented chronicles, the Greek perfected harmony and portraiture in art, the Romans laid the foundations for jurisprudence.84

The modern debate over intellectual property protection in develop­ ing countries has failed to take account of cultural differences which af­ fect the understanding of what constitutes property or what may right-

23. V a i l & W h it e , supra n o t e 20, a t 3. 24 . O ns T. M a s o n , T h e O r ig in s op I n v e n t io n : P e o p l e s 31 (1 s t ed . 1895) (1 9 6 6 ).

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fully be the subject of private ownership. While avoiding the ethnological categorizations of the nineteenth century literature, it is im portant for the modern debate to link intellectual property laws to the social realities of societies in developing countries. Not only may this yield more effec­ tive approaches to securing enforcement of intellectual property rights in developing countries, it also presents the possibility that western based intellectual property laws may have some real impact on industrial inno­ vative activity in these countries, thus contributing to the economic wel­ fare of the Third World. However, as this article argues, culture may in­ fluence what is created but it is those values, rooted in a conception of a good society, that determine how and what kind of intellectual property laws societies enact. II.

I n tern ation alization and th e I n ter n a tio n al D im ensions I n te l le c tu a l P r o pe r ty P r o tectio n

of

Central to Anglo-American intellectual property law25 is the convic­ tion th a t a system which rewards creativity by granting monopolies over the use, possession, and disposition of the objects of intellectual endeavor is a necessary prerequisite for creativity and innovation.26 At the heart of

25. The constitutional authority for intellectual property law in the United States is premised on the principle of national progress. Art. 1, § 8 , cl. 8 of the U.S. Constitution gives Congress legislative power “to promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” U.S. C o n s t ., art. I, § 8 , cl. 8 . Out of this mandate, several forms of protection were crafted for the different expressions of creativity. Patents protect “new and useful” inventions, 35 U.S.C. 101 (1981); copyright protects “original works of author­ ship” primarily of a literary and artistic nature, 17 U.S.C. 102(a) (1994); and trademarks secure a monopoly right to use a mark or appellation which identifies a product or a service (e.g. Exxon or Coca-Cola), 15 U.S.C. 1051 (1991); and trade secrets protects information such as a “formula, pattern, compilation, program, device, method, technique or process,” Uniform Trade Secrets Act 1(4) (1985), that has acquired independent market value and which the owner has made reasonable efforts to keep secret. Id. 26. Creativity and innovation are usually used interchangeably in intellectual property literature. I use the terms distinctly because in the last few years they have come to reflect different strands of philosophies underlying intellectual property, particularly in the field of copyright. Creativity, like all esoteric terms, is difficult to define succinctly. Simply defined as the act of making something, creativity is, in one sense, the direct object of continental intellectual property systems. Under French copyright law, for example, the authors right (“droit d’auteur”) was conceptualized as a natural right, protecting the very essence of the personality of the creator and existing independent of a positive grant through statutory law. As a result, the French copyright system protects a wide variety of rights which include “personality” rights, i.e., rights which inhere in the very nature of creating. These rights are referred to as moral rights and they come in three basic forms: the right to disclose the work to the world (right of publication), the right to be recognized as author (right of paternity), and the right to prevent unauthorized changes in the work (the right of integrity). For a general overview of moral rights in the context of the Berne Convention, see S am R i c k e t s o n , T h e B e r n e C o n v e n t i o n f o r t h e P r o t e c t i o n o f L i t e r a r y a n d A r t i s t i c W o r k s : 18861986 5-6 (1987). The philosophy behind these rights is, in one regard, theological; Just as God created man and thus man is both a reflection and the embodiment of God (See Gene­ sis 1: 26,27), so also the work of a human creator reflects the personality of that creator and

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the m atter is a long-held economic theory th at explains human behavior as a series of responses to incentives.47 Underlying this theory is the as­ sumption th at rational human beings make choices which will maximize their individual welfare.28 Property rights, including intellectual property

embodies a part of that creator as well. Jane C. Ginsburg, A Tale of Two Copyrights: Literary Property In Revolutionary France and America, 64 T u l . L. R e v . 991 (1990) (arguing that the differences between the French and American copyright philosophies have been overstated). A creativity element (Schopfungshohe) also exists in German copyright law. Unlike its French counterpart however, Schopfungshohe is not linked to individuality. Rather, it is a practical requirement that “A work must . . . rise above craftsmanship, above the average, . . . ” to reflect a “minimum level of intellectual-creative achievement” which is the “ quan­ titative aspect” of individuality. Gerhard Schricker, Farewell to the “Level of Creativity” (Sch'dpfungsh'dhe) in German Copyright Lawl in 26 I n t ’l . R e v . o f I n d . P r o p . & C o p y r ig h t L. 41, 42 (1995). Schopfungshohe is thus deployed to help determine the satisfaction of the requirement, under German law, that a copyrightable work be a “personal intellectual crea­ tion.” Id, Innovation, on the other hand reflects more of the utilitarian vision of Anglo-American intellectual property systems. In both England and the United States, intellectual property was regarded solely as a creation of statute. See A u b e r t J. C l a r k , T h e M o v e m e n t f o r I n t e r n a t i o n a l C o p y r ig h t In N i n e t e e n t h C e n t u r y A m e r ic a (photo, reprint 1973) (1960). While a natural rights theory had existed in England prior to the passage of the Statute of Anne in 1709, the House of Lords decidedly quashed this notion in the case of Donaldson v. Beckett, 98 Eng. Rep. 257 (1774), deciding that the copyright was a creation of statute, and that the statutory grant superseded any prior conception of the right. In this philosophical framework, intellectual property is a means to an end. The costs of maintaining a monopoly system would be well worth the advancement in science and the useful arts, and would contribute to public welfare by encouraging dissemination of new knowledge and inventions. See Roger E. Meiners & Robert J. Staaf, Patents, Copyrights, and Trademarks: Property or Monopoly? 13 Harv. J.L. & Pub. Pol’y 911, 912-913 (1991). As a result, the goal of the intellectual property system is to balance these interests in an efficient framework. See S.M. Besen & L.J. Raskind, 5 J o u r n a l o f E c o n o m ic P e r s p e c t i v e s 1 , 5 (1991). For an interna­ tional perspective, see Gunnar W.G. Karnell, The Berne Convention Between Authors’ Rights and Copyright Economics- An International Dilemma, 26(1) IIC 193 (1995). Apart from a general theme of individuality versus utilitarianism, another dimension to distinguishing creativity from innovation is the commercial impetus that has come to be associated with innovation. The deployment of large sums of capital for research and devel­ opment stems primarily from a desire to exploit a felt need in the market. See Stephen J. Kline and Nathan Rosenberg, An Overview of Innovation, in T h e P o s i t i v e S um S t r a t e g y (N. Rosenberg and R. Landau, eds., 1986) (explaining innovation as the result of the right combination of commercial opportunities and scientific discoveries/progress). The fear of free riding from competitors who have not invested the time and resources needed to invent and market a new product is thus another traditional justification for intellectual property monopolies, particularly the patent system. It would be helpful if one could bracket creativ­ ity as an element of copyright and innovation as the function of patents, but crossbreeds in new technologies, such as computer programs and digital technologies which currently are protected under Copyright law, make this unfeasible. 27. See S t e v e n S h a v e l l , E c o n o m ic A n a l y s i s o f A c c i d e n t L a w vii (1987); See also Comment, An Economic View of Innovation and Property Right Protection in the E x­ panded Regulatory State, 21 P ep p . L. R e v . 127 (1993); Richard T. Rapp and Richard P. Rozek, Benefits and Costs of Intellectual Property Protection in Developing Countries, 24 J . o f W o r l d T r a d e 75 (1990); Alan S. Gutterman, The North-South Debate Regarding the Protection of Intellectual Property Rights, 28 W a k e F o r e s t L. R e v . 89 (1993). 28. For a leading work on economic analysis of law, including property law, see R ic h -

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rights,29 by securing monopoly privileges, allow individuals to make wel­ fare maximizing choices without the fear of free-riding by members of the public.30 In theory, the aggregate sum of individual welfare accrues to the national economy, impacting the level of national wealth and ensuring the efficient functioning of the marketplace of goods and technology which are, ultimately, the embodiments of creativity and innovation. In order to capture the aggregate gain of individual welfare, the ultimate goal of the intellectual property system m ust be to “maximize the benefits from cre­ ating additional works minus the losses sustained from limiting public access to the works, plus the costs of administering copyright protec­ tion.”81 The role of the courts is to police the system, and the rights claimed within it, to execute this purpose and maintain this efficient balance.82

A. P o s n e r , E c o n o m ic A n a l y s i s o f L a w , C h a p . 3 (2 d ed. 1977). See also, David J. Gerber, Prometheus Born: The High Middle Ages and the Relationship Between Law and Economic Conduct, 38 St. L o u is U. L.J. 674 (1994). More specifically on the economics of the intellectual property system, see William M. Landes and Richard A. Posner, An Eco­ nomic Analysis of Copyright Law, 18 J. L e g a l S t u d . 325 (1989). 29. An important theme to understand for the purposes of this article is the process by which intellectual goods become “propertized” in Anglo-American law, and in the western world in general. While a full examination is not possible within the confines of this article, what is important to note here is that the denial of a natural perpetual right in literary works, for example, led advocates of international copyright to substitute the natural rights basis of their cause with a property theory {see C l a r k , supra note 26, at 26) which was another powerful concept in western law and, indeed, in western political systems. As early as 1765, William Blackstone had singled out property as a fundamental feature of human existence in civil society. See 2 W il lia m B l a c k s t o n e , C o m m e n t a r ie s o n t h e L a w s o f E n g ­ l a n d (1766). This conception of property was, however, limited to physical objects to which rights attended to. Where incorporeal objects such as rents were concerned, the physicalist conception of property rectified the rights in order to fit them into the dominant frame of thought. In American legal history, the changing meaning of the term “property” is associ­ ated with the rise of the modern state in the nineteenth century. Property was “ dephysical ized” during this period to conform to the needs of the industrial society. An expanded idea of property was necessary to embrace new alliances and interests created by modernization. See generally M o r t o n J. H o r w i t z , T h e T r a n s f o r m a t i o n o f A m e r ic a n L a w 1870-1960: T h e C r is is o f L e g a l O r t h o d o x y , 3 (1992). In 1964, Charles Reich published the leading article on the dephysicalization of property, identifying government created jobs, licenses and in­ come as “new property.” See Charles A. Reich, The New Property, 73 Y a l e L.J. 733 (1964). In the Minnesota Rate Case, the U.S. Supreme Court held that expected earning power, anything with exchange-value, could constitute a form of property. See Chicago, M.& St.P.Ry. v. Minnesota, 134 U.S. 418 (1890). Finally, in the celebrated case of International News Service v. Associated Press, 248 U.S. 215 (1918), the U.S. Supreme Court recognized copyright as a form of property: “news matter, however little susceptible of ownership or dominion in the absolute sense, is stock in trade, to be gathered at the cost of enterprise, organization, skill, labor, and money, and to be distributed and sold to those who will pay money for it, as for any other merchandise. Regarding the news therefore, . . . it must be recognized as quasi property.” Id at 236. By 1942, the notion that copyrightable subject matter was property was firmly entrenched in the American judiciary. See, e.g., M. Witmark & Sons v. Fred Fisher Music Co., 125 F.2d 949 (2 d Cir. 1942). 30. See J a c k s o n e t a l . , supra note 2. 31. Gunnar W.G. Karnell, supra note 26, at 193. 32. Id. ard

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The economic incentive theory has permeated the recent discourse on international intellectual property,83 as indeed has the utilitarian con­ ception of intellectual property laws.34 International intellectual property has become, primarily, the mechanism for redressing trade deficits and for maintaining a competitive edge in global markets.35 While interna­ tional intellectual property protection has always secured market shares for holders of intellectual property rights,88 the transformation of indus­ trial economies into information economies has increased the stakes in the global dimensions of intellectual property rights.87 As a result, the emphasis in this era has not been on patent laws which often take the credit for the rapid pace of western industrialization38 but rather copy­ right laws which protect the expression of knowledge. In an economic era defined by global information technologies,38 a monopoly right in the fruits of information is indispensable for the gener­ ation of new capital and invaluable for maintaining a global competitive edge. Intellectual property under the TRIPS agreement is a means to this end. The agreement is primarily a reflection of the vulnerability of infor­ mation-based economies to the demands of the market for pirated and counterfeit goods.40 It is also a reflection of values which are integral to 33. Id. See also, Eric Wolfhard, International Trade in Intellectual Property: The Emerging GATT Regime, 49 T o r o n t o F a c u l t y o f L a w R e v ie w 107 (1991) (arguing that the distinction between trade policy and intellectual property is an artificial one, and that eco­ nomic conditions beyond the control of individual nation-states create an interdependence between trade and intellectual property). 34. See Gutterman, supra note 27. 35. Anne Moebes, Negotiating International Copyright Protection: The United States and European Community Positionslr, 14 L o y . L.A. I n t ’l & C om p. L.J. 301 (1992). See also, Eric Wolfhard, supra, note 33. 36. See, e.g., C.V. Vaitsos, The Reuision of the International Patent System: Legal Considerations for a Third World Position, 4 W o r l d D e v e l o p m e n t 85-86 (1976); see also C.V. Vaitsos, Patents Revisited: Their Function in Developing Countries, 19 I n d ia n E c o ­ n o m ic J. (1972); “The patent system in developing countries has a predominantly negative effect and is devoid of significant benefits for these countries; virtually all owned by large foreign corpo­ rations, patents are used as a vehicle for achieving monopoly privileges . . . .” Id. Similarly, a study prepared in 1957 for the U.S. Senate Judiciary Committee concluded that the provisions of the international patent system “ . . . it is evident, have altered the complexion of the patent grant from one designed primarily to stimulate domestic industry to one in which the foreign patentee has an increased chance of producing where he chooses while retaining his patent monopoly.” Id. 37. See Moebes, supra note 35. See also R. Michael Gadbaw, supra note 14. 38. “As one looks back over the history of the [United States] he cannot, I think, es­ cape the conclusion that the [patent] system has been a powerful force in our growth from an insignificant agricultural and trading federation to the most powerful industrial nation on earth. It is a force too powerful in what it has done, and in what it can still do, to be tampered with lightly.” H.A. T o u m lin J r ., P a t e n t s a n d T h e P u b l i c I n t e r e s t (1939). 39. See C a r n o y e t a l . , T h e N e w G l o b a l E c o n o m y in T h e I n f o r m a t io n A g e 6 (1993) (pointing out that the new international division of labor is based on the capacity to gener­ ate new knowledge and to apply it rapidly). 4 0 . This market is the result of a combination of forces which include technological dependency of Third World countries, pervasive poverty which keeps “genuine” goods out

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western post-modern, capitalist societies; values such as individual owner­ ship, autonomy, economic theories about incentives, all of which are born out of particularized historical events such as, for example, the industrial revolution. By the late eighteenth century in the United States, the combination of m arket forces expressed through commercial treaties with Europe, and the legal foundation already in place in favor of property rights and indi­ vidual autonomy, together created a social system primed for the recogni­ tion of rights in a new form of “property.” Things such as good will were assigned social and economic value in society and it was only a question of time before protection was extended to other forms of intangible goods. W hether the emphasis was placed on “rights,” or “liberty,” or “property,” the socio-economic ethos was eminently receptive to the idea of proprie­ tary interests in the fruits of creative endeavor. The impetus behind the TRIPS, an American initiative, is thus not to encourage creativity and innovation, but rather to protect a particular conception of property priv­ ileges across national borders.41 The agreement, simply put, promotes na­ tional economic interests and social values in the legitimizing form of treaty law. By situating intellectual property at the core of international trade regulation, by making intellectual property the subject of international trade rules, and by premising membership and participation in the m ulti­ lateral trade system on the adoption of a global model of intellectual property protection, intellectual property law has, for the first time, been “internationalized.” T hat is, intellectual property has adopted a universal mode which all countries m ust adopt in order to benefit from the re-or­ dered basis of the international economy. It is important, before proceeding further, to distinguish between what in this article will be referred to as the “ internationalization of in­ tellectual property,” and the international aspects of intellectual property protection. “Internationalization” refers to the universal mode or “global model” of intellectual property law made m andatory by the provisions of the TR IPS agreement. Under this model countries who previously did not offer protection for intellectual property in the forms recognized in Euro­ pean and American legal systems must now enact substantive laws to conform to this model. In addition, some countries must create entirely new structures, ranging from courts to copyright and patent offices, to administer these new laws. Finally, these countries must develop an intel­ lectual property jurisprudence substantially similar to what currently ex­ ists in the United States and Europe in order to nurture the success of their new intellectual property laws. of reach for the vast majority of the population in these countries, the relative ease and low cost of counterfeiting, and the penetration of European and American cultural goods in these societies. 41. For good reading on intellectual property in the international trade system, see Wolfhard, supra note 33; Gadbaw, supra note 14; Leaffer, supra note 13.

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The international aspects of intellectual property protection, on the other hand, addresses the scope of international protection of intellectual goods. The focus here is on the nondiscriminatory treatm ent of foreign works. The Berne Convention for the Protection of Literary and Artistic Works42 and the Universal Copyright Convention48 are the principal in­ ternational instruments for the international protection of copyright. The Paris Convention for the Protection of Industrial Property44 regulates the international protection of patents. Each of these treaties is administered by international institutions affiliated with the U.N system.46 Some major differences between the internationalization of intellec­ tual property and the international protection of intellectual property m ust be kept in mind. First, the former establishes substantive rules for the protection of intellectual property while the latter simply delineates a minimum floor or scope of protection for intellectual property. P ut differ­ ently, the TRIPS agreement prescribes both what m ust be protected and how, while the Berne, UCC, and Paris Act focus more on elements of protection. All of the agreements establish minimum standards of protec­ tion; the TRIPS however raises the floor and provides more substantive rules as well as procedures for enforcement and sanctions. Second, the former is premised solely on economic considerations, while the latter in­ corporates elements of the natural rights philosophy, recognizing inherent value in the act of creating.46 Third, the former is a condition for partici­ pation in multilateral trade relationships while the latter is not condi­ tioned on anything, but rather is the product of a certain level of real consensus.47 Non-membership in any of the treaties does not necessarily

42. Berne Convention for the Protection of Literary and Artistic Works, Sept.9, 1886, revised, Paris (July 24, 1971), reprinted in American Intellectual Property Law Association, Worldwide Protection of Intellectual Property (1984) [hereinafter Berne Convention]. 43. The Universal Copyright Convention of September 6 , 1952, revised in Paris, July 24,1971. Reproduced in N o r d e m a n n e t a l . , I n t e r n a t i o n a l C o p y r ig h t : C o m m e n ta r y (1990). 44. The Paris Convention for the Protection of Industrial Property 1883, revised, Stockholm (1967), reprinted in A m e r ic a n I n t e l l e c t u a l P r o p e r t y L a w A s s o c i a t i o n , W o r l d w i d e P r o t e c t i o n o f I n t e l l e c t u a l P r o p e r t y (1984) [hereinafter P a r is C o n v e n t i o n ] . 45. The Berne Convention and the Paris Convention are both administered by the World Intellectual Property Organization (WIPO). WIPO is an intergovernmental organiza­ tion, established in 1967 as a successor institution to the United International Bureaux for the Protection of Intellectual Property (BIRPI). It became one of the specialized agencies of the United Nations in 1974. The United Nations Economic and Social Council (UNESCO), a U.N. agency, is responsible for administering the Universal Copyright Convention (UCC). 46. The Berne Convention, for example, protects moral rights which the TRIPS ex­ pressly excludes. Moral rights are rights which protect the relationship between an author and the work. “Any author, whether he writes, paints or composes, embodies some part of himself — his thoughts, ideas, sentiments and feelings — in his work, and this gives rise to an interest as deserving of protection as any of the other personal interests protected by the institutions of positive law . . “[T]he author then enjoys an exclusive right by the sole act of creating.” See R ic k e t s o n , supra note 26 at 456; Andre Lucas and Robert Plaisant, France, in N im m e r a n d G e l l e r , I n t e r n a t i o n a l C o p y r ig h t L a w a n d P r a c t i c e 10 (1988). 47. At least as between members who participated in its formation. For a detailed his­ tory reflecting the negotiation and compromise that resulted in the Berne Convention, see

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result in political ostracism48 nor denial of material benefits;4®the goals of the latter may be accomplished through bilateral agreements, thus mak­ ing the multilateral agreement unnecessary if a country deems th at a bi­ lateral approach is more feasible or more prudent for its well being.50 The institution which implements the former, i.e. the World Trade Organiza­ tion, may make substantive “law” as a result of the dispute resolution system it is charged with utilizing.51 The institutions52 which implement the latter, on the other hand, do not have any formal dispute resolution m andate and do not have independent authority to make law in the judi­ cial sense. These institutions may only be involved, if at all, in dispute settlem ent at the request of two contracting parties. For the treaties ad­ ministered by the World Intellectual Property Organization,53 explicit provision is made for the jurisdiction of the International Court of Justice over conflicts involving the interpretation or application of the treaties.54 Finally, another im portant difference between the internationaliza­ tion of intellectual property and the international aspects of intellectual property lies in the structure of the institutions which administer these treaties. Significant differences exist, both in terms of their scope of re­ sponsibility, in their processes of dispute settlement, and in the binding nature of their decisions. As mentioned earlier, one of the key functions of the WTO is dispute resolution.55 With particular regards to intellectual property disputes, a Council for the TRIPS agreement was established under the WTO Charter.56 The TRIPS Council is responsible for moni­ toring the operation of the TR IPS agreement and compliance by consupra note 26, at 233. 48. The U.S. for example, refused to join the Berne Convention for many years without any significant problems. Even its recent accession in 1989 is questionable in terms of full compliance with minimum Berne standards. See R i c k e t s o n , supra note 26, at 233; J.C. Ginsburg & J.M. Kernochan, One Hundred and Two Years Later: The U.S. Joins the Berne Convention, 13 C o lu m b ia - VLA J. L. & A r t s 1 (1988). 49. Except of course, for whatever was lost by the fact of nonmembership. 50. The U.S. and many other countries favored a bilateral approach for many years preceding the Berne. See R i c k e t s o n , supra note 26, at 25-30. Bilateral agreements on intel­ lectual property are still used today, in addition to the multilateral agreements. See, e.g., Memorandum of Understanding On The Protection of Intellectual Property, Jan. 17, 1992, 34 I.L.M. 676. For an insightful overview of these agreements, see William Alford, Perspec­ tive on China: Pressuring the Pirate, L.A. T im e s , Jan. 12, 1992, at M5. 51. See GATT, supra note 4, at Art. XXIII. 52. The World Intellectual Property Organization (WIPO) and the United Nations Ec­ onomic and Scientific Organization (UNESCO) respectively. 53. See, S t a t e s P a r t i e s T o t h e C o n v e n t i o n E s t a b l i s h i n g t h e W o r l d I n t e l l e c t u a l P r o p e r t y O r g a n iz a t io n a n d t h e T r e a t i e s A d m i n i s t e r e d b y WIPO A n d S t a t e M e m b e r s o f t h e G o v e r n in g B o d ie s a n d C o m m it t e e s o f WIPO (Status on May 1 , 1993), WIPO Docu­ ment 423(E). 54. Art. 33 of the Paris Act of the Berne Convention makes acceptance of the jurisdic­ tion of the International Court of Justice optional by means of a reservation to that effect by a member country at the time of ratification or accession to the Convention. See Berne Convention, supra note 42, at Art. 33(2). 55. See WTO Charter, supra note 4. 56. See id. R ic k e ts o n ,

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tracting parties.57 Disputes arising under the agreement are governed by the central dispute resolution process of the WTO.68 Very briefly, under this process, disputing countries are required to consult with each other with an intent on resolving the dispute. If after 60 days the dispute re­ mains unresolved, a complaining party may request the establishment of a dispute resolution panel.59 The panel hears oral arguments and reviews written submissions of both parties. A panel report containing detailed conclusions and the panel’s legal analysis is subm itted to the disputing parties for comments. The final panel report is then submitted to the dis­ pute settlement body (DSB) and must be adopted by the body at the second meeting on which the report is placed on the agenda. Any party to the dispute may appeal to the appellate body.80 The implementation of the panel or appellate report recommendations, whichever is adopted, is monitored by the DSB to ensure th at the offending member complies with GATT rules. In the event of non-compliance the prevailing party is entitled either to compensation or to request authority to suspend conces­ sions made to the offending party,61 This elaborate structure is duplicated in form or substance neither under the Paris or Berne Conventions nor under the UCC. The activities of the World Intellectual Property Organization are limited to the coordi­ nation and promotion of intellectual property protection in various coun­ tries. The “overall objectives of WIPO are to m aintain and increase re­ spect for intellectual property throughout the world, in order to favor industrial and cultural development. . . .”62 The internationalization of intellectual property provides a more rigid framework and perhaps, con­ sequently, promises more consistency and coherency under this new system. In summary, the merger of intellectual property with the multilateral trading system has ushered in a new era for international aspects of intel­ lectual property protection. The protection of intellectual property through trade accomplishes several im portant things: 1. easier international monitoring through the institutional apparatus of the World Trade Organization; 2. the increased nationalization of intellectual goods, by which p ri­ vate (individual) rights have essentially been transformed into public 57. Id. 58. See Art. 64(1) of the TRIPS Agreement. See also WTO Charter, supra note 4. 59. Under the Dispute Settlement Understanding, the WTO Secretariat is responsible for recommending panel members. Where disputing parties do not agree with the recom­ mendations, the GATT Director-General is authorized to appoint the panel in consultation with the Dispute Resolution Body (DSB) and other relevant committees or council. See J a c k s o n e t a l . , supra note 2 , at 342. 60. See Understanding on Rules and Procedures Governing The Settlement of Dis­ putes, Annex 2 , World Trade ORganization Agreement. 61. See id. For more details, see J a c k s o n e t a l ., supra note 2 , at 340-346. 62. B a c k g r o u n d R e a d in g M a t e r i a l o n I n t e l l e c t u a l P r o p e r t y , WIPO P u b l i c a t i o n , 40 (1988).

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(state) rights;63 3. the internationalization of intellectual property, by which coun­ tries who desire to be a part of the liberal trading system are required to enact laws to comply with the TRIPS agreement and as a result 4. the creation and establishment of a global system of intellectual property protection. III.

C r e a t iv it y in t h e T h ir d W o r l d

Nothing is more common than the assertion that men do not pur­ posely invent in the lower civilisations, that they simply follow the leading strings and the mandates of nature. The savage, it is said, does not invent, he simply borrows his clothing from the animals, his house from the trees and caverns, his food from many sources. He is an out-and-out imitator. But [t]he race or people that did not lay at least one dressed stone on this stately edifice (of nature) cannot possi­ bly have survived.64

This section will examine various fundamental differences in the phi­ losophies underlying systems for protecting creative endeavor in the T hird World. As mentioned earlier, the term “Third World” as employed in this article is inclusive of indigenous groups which have not attained formal statehood but who are recognized both in the national and inter­ national sphere as having a distinct political, cultural, and social identity within a formal state. Such groups include Native Americans and aborigi­ nal groups, and other indigenous or “traditional” societies. At the outset, this section does not examine the integration of devel­ oping countries into the international intellectual property system,65 nor the concerns of developing countries about the intellectual property sys-

63. Under the WTO only contracting parties (limited to sovereign states) may bring claims for dispute resolution. The multilateral trade system does not recognize private par­ ties. As such states stand in the shoes of their citizens to press for redress over intellectual property infringement. This transformation of a private right is not new to the multilateral trade system, neither is it new in dealing with international intellectual property issues. Under U.S. trade laws for example, the United States Trade Representative is authorized to undertake a wide variety of measures against countries identified as denying adequate and effective protection of intellectual property. See Trade Act of 1974, 19 U.S.C.S. § 2242, § 2901 (1993). The legitimate reach of this power is questionable in a post-Uruguay round era. 64. Mason, supra, note 24 at 19, 23 (1895). 65. Most developing countries were subject to the principal intellectual property trea­ ties (with the exception of the UCC) by virtue of their status as colonies of sovereign states who ratified these treaties. After attaining political independence most of these ex-colonies acceded to the treaties in their new status as independent sovereign entities. I have ex­ amined elsewhere the reasons surrounding developing country ratification of these treaties and the process of integrating these countries into the international system. See Ruth L. Gana, P r o b l e m s a n d P r o s p e c t s f o r I n t e r n a t i o n a l C o p y r ig h t A t t h e C l o s e o f T h e T w e n t i e t h C e n tu r y : L e s s o n s F o r t h e U n i t e d S t a t e s (S.J.D. Dissertation, Harvard Law School (unpublished manuscript on file with the author)) (1995).

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tem as a whole.66 Rather, this section examines indigenous attitudes re­ garding creative ability and the forms of protection offered through the norms which underlie social, political, and legal organization in these soci­ eties. For effective discussion, two related and longstanding themes about creativity and its protection in the Third World are addressed. The first is a myth which holds that creative activity is non-existent in Third World countries. The second is an assumption, perhaps originating from the myth, that intellectual property laws do not exist in these countries.67 I suggest th at the real issue behind these two themes is that the attitudes and rules governing the protection and dissemination of the fruits of crea­ tive endeavor in Third World societies do not mirror those which exist in western industrial post-modern societies. Finally, this section questions another assumption th at the chosen forms68 of protection for intellectual property in these societies are objective or scientific models which inhere somehow in the nature of creativity and so must be adopted by all who wish to protect and encourage creative activity. A. Has Creativity Died in the Third World? As stated earlier, the prevailing wisdom of Anglo-American jurispru­ dence justifying intellectual property laws is that such laws are a neces-

6 6 . During the development era, a veritable amount of literature was produced by de­ velopment economists, classical economists, political scientists, and scholars from other dis­ ciplines about the role of intellectual property laws in the development process. Develop­ ment scholars argued endlessly about the negative effects of patents in particular, on economic development, and technology transfer. The major arguments centered on the ef­ fect of the patent grant on indigenous creativity. By granting a seventeen year monopoly on a process or machinery, independent inventors of the same product or machinery could not legally use or develop the machine or process. In addition, improvements to licensed tech­ nology were contractually assigned to the licensor as a precondition for, or term of the li­ censing agreement. Arguments also focused on the role of multinational corporations in hin­ dering the exposure of local employees to technology utilized by the firm. These arguments, and the literature on technology transfer to the developing world, the phenomena of techno­ logical dependency and the effect of the international intellectual property system continue to abound today. See, e.g., C h a r l e s G o u l e t , T h e U n c e r t a i n P r o m is e , V a l u e C o n f l i c t s in T e c h n o l o g y T r a n s f e r (1977) (2 ed. 1989).; A.Samuel Oddi, The International Patent Sys­ tem and Third World Development: Reality or Myth?, 63 D u k e L.J. 831 (1987). 67. See, e.g., Kirsten Peterson, Recent Intellectual Property Trends In Developing Countries, 33 H a r v a r d I n t e r n a t i o n a l L a w J o u r n a l , 277 (1992); Brent W. Sadler, Note, Intellectual Property Protection Through International Trade, 14 H o u s t o n J o u r n a l o f I n t e r n a t i o n a l L aw 393 (1992); Alan S. Gutterman, The North-South Debate Regarding the Protection of Intellectual Property Rights, 28 W a k e F o r e s t L.R. 89 (1993); Marshall A. Leaffer, Protecting United States Intellectual Property Abroad: Toward a New M ulti­ lateralism, 76 I o w a L.R. 273 (1991). I think it would be a fair appraisal to say that much of the existing literature on intellectual property in developing countries assumes this fact, including literature by scholars from developing countries. 6 8 . T hat is, patents, copyrights and trade secrets, together with the various require­ ments on which their validity is based, e.g. a copyright must be an “original expression,” “fixed,” 17 U.S.C.S. § 102(a) (1994); a patent must be a “new” idea, reduced to a working form, and the inventor must have been the first to invent it (at least under U.S. law) 35 U.S.C. § 101 (1981).

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sary prerequisite for creativity.69 The argument is not that creative activ­ ity will not take place at all without intellectual property laws which give a property right in the fruits of creative energy, but rather, that such activity will be minimal70 and industrial growth will be constrained.71 As a result, the enactment of intellectual property laws has been linked to eco­ nomic development, growth, and prosperity.72 Failure to enact intellectual property laws, some literature suggests, results in economic stagnation, the inefficient use of scarce resources, technological backwardness, and general economic malaise.78 Further, the absence of intellectual property laws discourages indigenous creativity and innovation.74 It is with this claim, and more specifically, the inference that creative activity does not 69. Virtually every article one picks up on intellectual property echoes this justification. I mentioned earlier that the premise of this reasoning is an economic theory: “By defining the parameters for the use of scarce resources and assigning the associated rewards and costs, the prevailing system of property rights establishes incentives . . . for investment, production and exchange. Since property rights define the behavioral norms for the assign­ ment and use of resources, it is possible to predict how differences in property rights affect economic activity.” Rapp & Rozek, supra note 27, at 77. 70. See Meiners & Staaf, supra note 26, at 911, 913. 71. The strongest testament against this argument is the recent transformation of coun­ tries of such as South Korea, Taiwan, Hong Kong, and Singapore. These countries have become efficient producers of technology goods and, thus, have come to occupy positions of strategic importance in modern international economic relations. The gains made by these countries certainly are not due solely or even largely to intellectual property laws. Rather, these countries and others economies such as that of India and more recently China, em­ barked upon economic and political reforms which encouraged domestic innovation and competitiveness by developing R & D infrastructure which improved local capacity to ab­ sorb technical and scientific knowledge. In addition, export oriented strategies were imple­ mented in countries such as Korea and India, combined with investment in education and R & D and general liberalization of foreign investment regulation. See generally A g m o n & v o n G l in o w , T e c h n o l o g y T r a n s f e r in I n t e r n a t i o n a l B u s i n e s s (1991); J o s e p h M. G r ic c o , B e ­ t w e e n D e p e n d e n c y a n d A u t o n o m y , I n d ia ’s E x p e r i e n c e w it h t h e I n t e r n a t i o n a l C o m p u te r I n d u s t r y (1984).

72. This argument has been around for sometime and indeed is to be found among the development literature I mentioned earlier. For contemporary advocates of this thesis, see Richard T. Rapp and Richard P. Rozek, supra note 27. See R o b e r t M. S h e r w o o d , I n t e l ­ l e c t u a l P r o p e r t y a n d E c o n o m ic D e v e l o p m e n t (1990); Edwin Mansfield, Intellectual Property Rights, Technological Change, and Economic Growth, in I n t e l l e c t u a l P r o p e r t y R i g h t s a n d C a p it a l F o r m a t i o n in t h e N e x t D e c a d e (Charles E. Walker & Mark A. Bloom­ field eds., 1988). But cf. Justin Hughes, The Philosophy of Intellectual Property, 77 G e o . L.J. 287 (1954); A. Plant, The Economic Theory Concerning Patents for Inventions, 1 E c o n o m ic 67, 67-95 (1934); Stephen Bryer, The Uneasy Case for Copyright: A Study of Copyright in Books, Photocopies and Computer Programs, 84 H a r v . L. R e v . 281 (1970); A. Plant, The Economic Aspects of Copyright in Books, 1 E c o n o m ic 167 (1934), All arguing that the award of copyrights and patents is unnecessary to stimulate or encourage creative activity. 73. S h e r w o o d , supra note 72; Mansfield, supra note 72; see also Rapp & Rozek, supra note 27. 74. In addition to other literature, WIPO publications tend to take this position. See, e.g., B a c k g r o u n d R e a d in g M a t e r i a l O n I n t e l l e c t u a l P r o p e r t y , supra note 62, at 43: “Without a national industrial property system and, more particularly, a patent system, it will be difficult for a country to stimulate and protect the results of indigenous innovation.” Id.

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exi9t in the Third World as a consequence of weak or non-existent intel­ lectual property laws76 th at issue is taken in this section76 with discussion limited to the context of copyrights, the most recent bone of contention between developed countries and the Third World.77 The subject m atter of copyright protection is creative expression.78 Copyright protects the expression of an idea and not the idea itself,79 the latter being the purview of patent law.80 In order to be copyrightable, an expression must be original and fixed.81 These elements constitute the core of formal requirements for copyright-ability in most legal systems today.84 Creative expression has been a part of hum an experience ever since Adam “named” the animals and, later, Eve in the garden of Eden.83 The essence of communication, whether in language, prose, song, or symbol, requires some modicum of creativity and forms the core of every society,

75. Id.; see also Gutterman, supra note 67, at 55, 59. 76. The title for this paper was a question I had long been grappling with since my “baptism” in this area of study. The perennial question of piracy, and the implications that the Third World stole what it could not create were troublesome to me. More troublesome however, was the implication that resistance to intellectual property laws, or the refusal to enact particular forms and of intellectual property laws, were persistent because there was nothing to protect in the Third World. I began my research by asking the question, is there no creativity in the Third World? 77. I have also chosen to limit my discussion to copyrights because of the discernible difference between creativity and innovation. See Kline & Rosenberg, supra note 26. The difference currently is of no legal import per se, but it has some implications for my broader thesis. 78. See 17 U.S.C.A., § 102(a) (1994). 79. See Baker v. Selden, 101 U.S. 99 (1879); Mazer v. Stein, 347 U.S 201, 217 (1954). The idea/expression dichotomy in copyright law is a fundamental, but troublesome, doctrine in copyright law particularly in the area of new technologies. See, e.g., Computer Assoc. Int’l v. Altai Inc., 982 F.2d. 693 (2 d Cir. 1992). “Drawing the line between idea and expression is a tricky business.” Id. at 704; Whelan Assoc. Inc. v. Jaslow Dental Lab., Inc., 797 F.2d 1222 (3d Cir. 1986); Apple Computer, Inc. v. Franklin Computer Corp., 714 F.2 d 1240 (3d Cir. 1983); Peter Pan Fabrics Inc. v. Martin Weiner Corp., 274 F.2 d 487 (2d Cir. 1960) “Obvi­ ously, no principle can be stated as to when an imitator has gone beyond copying the ‘idea* and has borrowed its ‘expression.’ Decisions must therefore inevitably be ad hoc.” Id. at 489. The idea/expression dichotomy is codified in 17 U.S.C. § 102 (b). 80. See Baker, 101 U.S. at 102 . 81. See 17 U.S.C. § 102 (a) (1994). The fixation requirement for copyright protection requires a work of authorship to be fixed in a tangible medium of expression from which the work can be perceived, reproduced or otherwise communicated. This requirement which is also incorporated in the Berne Convention, and now the TRIPS agreement, is problematic for many indigenous societies which do not maintain forms of literary expression. For exam­ ple, many African societies and Native American societies have oral traditions. The contem­ porary norms of copyright law preclude the representation of the vast wealth of oral litera­ ture existing in these societies, in the copyright system as a result of this fixation requirement. 82. This uniformity in part, reflects the international consensus expressed in the trea­ ties governing copyright. See, e.g., Art. 2 , Berne Convention; Art. I, Universal Copyright Convention. 83. See Genesis 2:19-23.

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regardless of its stage of development. Indeed, any cursory study of his­ tory or anthropology will reveal th at every society at any stage of devel­ opment invented, created, and developed sui generis products necessary to sustain the life and well being of the society. These products were both mechanical, such as farming tools, and expressive, such as music, arts, and literature. The same holds true for the Third World and the contin­ ued vitality of creative expression is undeniable.84 From songs to dances, artistic designs, paintings, sculptures, herbal and other medicinal formu­ las, and folktales, the list of protectable subject m atter emanating from T hird World societies is endless. These products are often located in western market economies as goods for sale or as objects of educational benefit in museums. In addition to the manifestation of creativity in material objects, cre­ ative expression in Third World societies often takes place in the context of specific cultural institutions which are responsible for accumulating and preserving the history and heritage of the society. Creative expression through the famous “talking drum s” of Yoruba tradition is but one exam­ ple of this phenomena.85 In a great number of African societies, oral liter­ ature remains a significant form of creative expression. While the validity of the term “oral literature” has been debated by anthropologists, histori­ ans, and ethnologists,88 it seems clear th at societies not restricted to printed expression, indeed those whose intellectual and creative exper­ iences have not been formed around Gutenberg’s press nor defined by printed works fall completely outside the sphere of copyright norms. Con­ sequently, creativity in indigenous societies of most Third World coun­ tries do not “fit” the model for copyright protection which has captured the landscape of international economic relations in this era. The critical point to note about recognizing creativity in the Third World is that forms of recognition and protection are a function of, and deeply embedded in, the institutions and underlying norms of social or­ ganization. In one sense, this is no different from the forms of protection for intellectual goods in the developed world. The individualism on which property rights are based and the nature of commodification which is cen­ tral to liberal market economies are reflected clearly in modern intellec­ tual property laws. As far back as Biblical times, these goods which are now the subject m atter of intellectual property were not protected in the forms and cate­ gories of patents, copyrights, trademarks, or trade secrets.87 Indeed, it was

84. See, e.g., K a r in B a r b e r , T h e P o p u l a r A r t s in A f r i c a (1986). 85. See B a r b e r a n d F a s ia s , D i s c o u r s e a n d I t s D is g u i s e s : T h e I n t e r p r e t a t i o n o f A f ­ r i c a n O r a l T e x t s (1989). 8 6 . On this matter, and on the subject of the use and power of oral literature in social and political organization in African society, see V a i l & W h it e , supra note 20. 87. A trade secret protects information, such as “a formula, pattern, compilation, pro­ gram, device, method, technique or process” which generates independent economic value. U n i f o r m T r a d e S e c r e t s A c t , § 1(4) (1985). To be protectable, a secret must not be known

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not until the era of Kings in ancient Israel th at material reward was given for the results of creative effort.88 Yet, creativity and its fruits existed, and in abundance! During the reign of King Solomon,89 intellectual endeavor and skill expressed in literary and artistic works was recognized, protected, and re­ warded.90 In the process of building the Temple,91 Solomon requested woodcarvers from the King of Tyre after acknowledging their superior skill in the art of carving.92 Solomon hired Hiram of Tyre, who was “filled with wisdom, understanding and skill to work (engrave) with bronze.”98 The Sidonians, a people recognized for their great carving skills, were also hired to carve designs and sculptures for the Temple.94 The elaborate en­ gravings of Hiram and the sculptures of the Sidonians certainly consti­ tute protectable subject m atter under modern copyright laws.95 These works and the individual artists were, however, not “protected” in the form copyright law today provides. Apart from the fact th at duplication of the Temple design was nearly impossible,99 creative ability in this soci­ ety was attributed to God who inspired these artists and gave the skill which was used in the creation of the products.97 Similarly, the PimaPapago Native American tribe distinguished “picked up songs” (learned from other tribes or white settlers) from “dream t songs” (obtained from spirits) and “songs given in the beginning” (in a sense, natural songs).98 In this understanding of “authorship,” like th at of ancient Israel, the in­ dividual was not recognized as the source of the created work. The idea of Hiram “owning” the Temple engravings or the Sidonians “owning” the

and there must be reasonable efforts made by the claimant to maintain its secrecy. Id. 8 8 . Solomon paid wages for the work of the Sidonians. He also gave Hiram twenty thousand cors of wheat and twenty cors of pressed oil each year until the Temple was com­ pleted. See 1 Kings 5:6,11. 89. 961 B.C. - 922 B.C. 90. See 1 Kings 5:6. 91. See 1 Kings 5:5. 92. 1 Kings 5:6. 93. I Kings 7:13,14; seealso 2 Chronicles2:14. 94. It is interesting to note that a similar arrangement is valid under contemporary intellectual property law. Under the “work for hire” doctrine, an employer is regarding as the lawful owner of a product created or invented by an employee during the course of employment. See 17 U.S.C.S. § 101(1) (1981); see also Community for Creative Non-Vio­ lence v. Reid, 490 U.S. 730 (1989). 95. See 17 U.S.C.S. § 102(a)(5) (1994) (recognizing pictorial, graphic, and sculptural works as copyrightable subject matter). See Mazer v. Stein, 347 U.S. 201 (1954); Bleistein v. Donaldson Lithographing Co., 188 U.S. 239 (1903). 96. See I Kings 7: 15-43. 97. See, e.g., Exodus 31:1-6: “Then the Lord spoke to Moses saying, ‘See I have called by name Bezaleel, the son of Uri, the son of Hur, of the tribe of Judah. And I have filled him with the Spirit of God, in wisdom, in understanding, in knowledge, and in all manner of workmanship. And I, indeed I, have appointed with him Aholiab the son of Ahisamach, of the tribe of Dan; and I have put wisdom in the hearts of all who are gifted artisans, that they may make all that I have commanded you.’ Id. 98. H a r o l d E. D r i v e r , T h e I n d ia n s o f N o r t h A m e r ic a 221 (1962).

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woodcarvings would have been unthinkable; indeed, it would have been tantam ount to a claim by Moses of ownership of the ten commandments (which, incidentally, also qualify as copyrightable subject m atter).00 The forms of intellectual goods recognized in this Biblical example (sculptures and engravings) were first protected in the United States under the Copy­ right Act of 1909.100 Under Moses’ leadership, elaborate rules existed governing the use and ownership of a new process or formula. For example, use of anointing oil, in ways or for purposes other than those prescribed, was prohibited by law,101 and sanctions for violation were clearly spelled out.109 The norms which governed recognition of creative effort were rooted in the nature of the theocracy under which ancient Israel, at the time, was gov­ erned. Not surprisingly, the primary reason for protection was ecclesiasti­ cal with the goal of preserving the sanctity or purity of a process or prod­ uct in obedience to a holy command. This “controlling” feature in copyright has a long history. For example, it was evident in England dur­ ing the nineteenth century when controlling the press was essential to the government’s decision to grant a stationer’s copyright.108 In order to m aintain purity of text, censorship was also a dominant feature of copy­ right law in Imperial China.104 Additionally, while China led the world in the invention of printing108 and several other significant technological ad­ vances, China, until very recently did not protect creativity in the forms expected by prevailing western jurisprudence.100

99. Actually, even much more than the wood carvings or Temple designs, the ten com­ mandments are clearly copyrightable subject matter. The four main requirements of copy­ right — copyrightable subject matter (the commandments are literary work), originality (who would doubt this?), fixation (written on tablets of stone), authorship and ownership (who would claim it? This wouldn’t be a problem as Moses had the rights “transferred” to him on Mount Sinai!). See generally Exodus 20:1-17; 34:1. Obviously, the term of copyright protection would have expired by now. 100. See U.S. S t a t . A t L a r g e , V o l . 1, 124 (1789). The Act originally extended copy­ right protection to “authors of books, maps and charts”). Id. Sec. 1 . Through a series of amendments however, the scope of copyright protection was expanded to include among other things, artistic works and sculpture. Thus by 1903, courts recognized copyrightable subject matter in a variety of products which were expressive of creative effort in a literary or artistic sense. See, e.g., Bleisten v. Donaldson Lithographing Co., 188 U.S. 239 (1903) (recognizing copyright in chromolithographs). 101 . See generally Exodus Chapter 30. 102. Id. 103. See L . Ray Patterson, Free Speech, Copyright, and Fair Use, 40 V a n d . L. R e v . 1, 21-22 (1987); see generally A u b e r t J. C la r k , T h e M o v e m e n t f o r I n t e r n a t i o n a l C o p y r ig h t in N i n e t e e n t h C e n t u r y A m e r ic a (photo, reprint 1973) (1960). 104. See William P. Alford, Don’t Stop Thinking About , . . Yesterday: Why There Was No Indigenous Counterpart to Intellectual Property Law in Imperial China, 7 J. Chi­ n e s e L. 3, 11-18 (1993). 105. Block printing was invented in China in the 6 th century and paper was invented around A.D. 105. See N o r b e r t W ie n e r , I n v e n t io n : T h e C a r e a n d F e e d in g o f I d e a s 47 (1993). 106. Alford, supra note 104, at 6-7.

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Intangible property was recognized by all Native American groups.10’ Examples of such goods include familiar objects of modern intellectual property law such as songs, dances, formulas, as well as less familiar types of intellectual property such as myths, membership in sibs and sodalities, and magic formulas.108 The type of property recognized included the right to participate in ceremonies, the right to wear certain insignia and the right to perform a particular dance.109 In terms of protection for processes, knowledge of herbal medicines developed through a process of time and training was guarded by the institution of native doctors.110 Other kinds of specialized knowledge, such as new hunting methods or other skills, were taught to the community or to selected members of the group. There is some sense in intellectual property literature th at once the development concerns are substantially resolved,111 intellectual property issues will “fit” in the developing world structure. This approach ignores the fact th at local perceptions of intangible goods, in particular goods which result from creative activity, and local values which shape a system of protection for these goods have never been seriously considered in the context of the North-South debate over intellectual property protection. Substantive intellectual property doctrine has played an ancillary role in this debate, with the issue framed, primarily, in ideological term s.112 Scholarship from both sides tends to focus exclusively on the economic impact of protecting intellectual property rights.118 However, there is nothing conclusive available in the economic literature about the effect of intellectual property rights;114 yet, there is nothing th at takes into ac­ count indigenous perceptions of intangible goods and indigenous ap­ proaches to intellectual property protection. These may very well have more of a significant impact on the success of intellectual property pro­ tection in developing countries.

107. iSee D r iv e r , supra note 98, at 263. 108. Id. 109. Id. at 264. 110 . Id. at 219. 111 . These concerns include technological “backwardness,” huge national debt, pov­ erty, illiteracy, and political instability. 112 . The ideology of intellectual property, quite distinct from its philosophy, has also been a point of conflict between developed and developing countries. During the develop­ ment era, scholarship from a “Third World perspective” regarded intellectual property and scientific knowledge in general as “the common heritage of mankind.” This view held that preventing access to the fruits of modern science was wrong and ought not to be enforced within an international system premised on equality. Western European countries as well as the United States rejected this position, maintaining that science and technology were the result of investment and labor. As such, the fruits of invention belong to the creators and not, to “humanity.” 113. Oddi, supra note 6 6 ; V a i t s o s , supra note 36. 114. Some scholars have concluded that it is simply impossible to determine exactly, whether, how, and why intellectual property systems are indispensable to a society.

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B. Elem ents of Laws and Norms Concerning The Regulation and Pro­ tection of Creative Efforts In Indigenous Societies Recognition and protection of intellectual goods in indigenous socie­ ties differs substantially from the modern treatm ent of intellectual prop­ erty in industrialized nations. A first cause of the differences in treatm ent of intellectual property is th at forms of property ownership in these societies are different. Many indigenous societies are not organized around individuals as such but around a clan or other extended unit.115 As such, “ownership” means something different from its accepted conception in Anglo-American law. Property in most western societies consists of a bundle of rights. The most im portant of these rights are the right to absolute possession, the right to exclude others from use, and the right to dispose of the property as one wishes. Virtually all forms of property in western societies are de­ fined in relation to these rights; the most im portant right being the right to exclude.118 This absolutist conception of property in Anglo-American law was transferred wholesale into the domain of intellectual goods.117 Exclusive individual ownership of goods, however, is not a scientific principle of social existence. Exclusive ownership was, for example, a rare feature of social organization in some Native American tribes.118 Notwith­ standing this fact, however, all Native American groups recognized own­ ership rights in intangible property,119 including some objects familiar to modern intellectual property laws such as songs, dances, and formulas,120 as well as less familiar ones, such as myths, membership in sibs, sodali­ ties, and magic formulas.121 Among the Mesa-Indians of North America, rights in intangible goods as well as other goods included the right to be recognized as “owner,” but not the right to exclude others from use.122

115. It is important not to confuse the clan or hamlet with the broader society as a whole. Perhaps a helpful analogy is once again the Biblical nation of Israel. There are twelve tribes which together comprised this political unit. See Exodus 1:1-4. Each tribe, however, was identified by specific rules, specific histories, and in some cases, specific sub-cultures. 116. See Morris R. Cohen, Property and Sovereignty, 13 C o r n e l l L. Q. 8 , 12 (1927). “The essence of private property is always the right to exclude.” Id. 117. In INS v. Associated Press, supra note 79, at 246. Justice Holmes and Brandeis maintained a vigorous dissent to the court’s decision to diminish the absolutist conception of property when it related to property in news. Property could not be “quasi” the justices maintained. The distinguishing feature of property was its absolute nature. Id; see also H o r w i t z , supra note 29. 11 8 . See D r iv e r , supra n o te 9 8 . 119. Id. 120. Protected under copyright law and trade secret law respectively. See 17 U.S.C. § 102 (1994); Uniform Trade Secrets Act § 1(4) (1985). 121. See Rennard Strickland, Implementing the National Policy of Understanding Preserving, and Safeguarding the Heritage of Indian Peoples and Native Hawaiians: Human Rights, Sacred Objects, and Cultural Patrimony, 2 4 A r iz o n a S t . L.J. 175, 184 (1 9 9 2 ). 1 22.

See

D r iv e r ,

supra

n o te 9 8 .

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Even where individual ownership was possible within certain Native American groups, such ownership was limited to specific categories of goods.1*8 For example, Native Americans along the Northwestern coast of North America recognize private ownership, in the exclusive sense, of fishing, trapping, and wild plant gathering rights.124 “Ownership” accord­ ing to this group of Native Americans was really a form of stewardship, wherein an owner in title was recognized, but the refusal to bar other members of the society from using the product was not permitted.125 Another important feature of “ownership” of intangible goods in cer­ tain Native American groups is th at tribal laws often restrict the right to dispose of the good.120 Typically, this restriction was limited to disposi­ tion to non-members of the group. In addition, sometimes one was per­ mitted to exclude members of the clan from using or making a good which was the subject of an ownership claim, but very often the owner could not assert these rights against family members.127 Finally, it is im­ portant to note that ownership is a function of the system of rights distri­ bution. In some Native American groups, exclusive “ownership” rights could be earned, such as a right to sing a bear song, to participate in a traditional ceremony, or to take on a certain name.128 A second cause of difference in intellectual property treatm ent in Third World countries lies in the purpose of protection. Whereas the stated underlying purpose of Anglo-American intellectual property law is to encourage creative endeavor, protection of creative endeavor in Third World societies is purposely used to achieve a myriad of social, political, and economic goals. Thus, in Imperial China, unauthorized copying was forbidden out of concern for the ways in which various commodities were identified (i.e. a form of tradem ark law), in an attem pt to maintain the purity of classic texts129 as well as to fulfill the censorship function men­ tioned earlier. Concern for public order or morals180 also led to outlawing of reproduction and dissemination of “devilish books and talk,” to pre­ serve the supremacy of certain literary and to prevent the spread of

123. Id. at 251. 124. Id. 125. Id. 126. Thus, for example, one of the key elements of the Native Graves Protection and Repatriation Act (1990) (NAGPRA) is that the concept of “ownership” or “right of posses­ sion” is cast in the Native American cultural context. See Strickland, supra note 121 , at 180; see also Rennard Strickland & Kathy Supernaw, Back to the Future: A Proposed Model Tribal Act to Protect Native Cultural Heritage, 4 6 A r k . L. R e v ., 1 6 1 , 1 65 (1 9 9 3 ). 127. Id. 128. See D river , supra note 9 8 . 1 29. Alford, supra note 1 04, at 11 . 130. While the protection or preservation of public order and morals is not a central feature of most Western copyright laws, exceptions do exist for government interference with the rights of individual authors when it is necessary for the public interest. A similar provision exists under the Berne Convention. See Berne Convention, supra note 42, at Art. 17.

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works th at would denigrate imperial authority.131 For many indigenous societies, protection exists to protect the sanc­ tity of a process or idea, to preserve cultural patrimony and in particular, to preserve the sacredness of an object, or to preserve the sacredness of meaning. In the recent case of Milpurrurru v. Indofurn P ty Ltd.,182 the applicant and other well-known and internationally recognized Aboriginal artists brought an action for copyright infringement under the Australian Copyright Act of 1968 against a company, Indofurn, and its three direc­ tors, who were selling rugs bearing unauthorized copies of various paint­ ings by the applicants. The company had imported carpets from Vietnam which bore imprints of the works of the various artists. The carpet de­ signs were substantial reproductions of various paintings which the appli­ cants had authorized for use by the Australian National Art Gallery (ANAG) and the Australian Information Service (AIS). The ANAG and AIS had issued posters of these paintings from which the reproductions had been made. The applicants had not approved the reproduction of their work on carpets. By importing carpets which infringed protectable works and which the respondents should have known were infringing works, the respondents were deemed to have infringed the copyright of the Aboriginal artists. The applicants sought damages and an order from the Court for respondents to deliver up the infringing carpets.188 The case indicates th at the Aboriginal artists in question were con­ cerned about the accuracy of the depictions of the paintings on the in­ fringing carpets. The Court noted th at the paintings “concerned creation stories of spiritual and sacred significance to the artist,” and th at it also had “deep cultural and religious significance to Aboriginal people.”134 In the Court’s words, “ [A]ccuracy in the portrayal of the story is of great importance. Inaccuracy, or error in the faithful reproduction of painting, can cause deep offence to those familiar with the dreaming.”135 The language of the Court suggests th at even the most careful repro­ duction of a work of art will not avoid harm to the community repre­ sented in the art and to those to whom the art speaks. Art in such a society is not only about creativity, it is about community. In this society, the preservation of sacredness and sanctity, as in the case of Israel and the anointing tabernacle oil,138 is prescribed by the law that recognizes the property. Similarly, with Native American art, particularly among the Pueblan Indians, the preservation of sacredness is a significant function

131. Alford, supra note 104, at 12-13. 132. Milpurrurru v. Indofurn Pty Ltd., Federal Court of Australia, 13 December 1994, (reported in 17(3) Eur. I n t e l l . P r o p . R e v ., March 1995, at D-61). 133. This is a remedy recognized in almost all copyright laws, and was recently in­ cluded as an element of the global model for copyright under the TRIPS agreement. See Trips Agreement, supra note 10 , at Art. 46, Part III. 134. Id. 135. Id. (Emphasis added). 136. Id.

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of protecting art forms. As one scholar has noted: Understanding the sacredness of the art objects of a holistic people requires a holistic view . . . . [Principles such as holistic integration of life within art, are held in common among Native Americans . . . . These works provide a multi-faceted window through which to glimpse and better understand the religion and lifeways . . . that made them and continue, in most instances to make them.1*7

A third cause of the differences in intellectual property treatm ent in the Third World is th at the theory of creation or creativity is different. Under Aboriginal law, for example, “the right to create paintings and other works depicting creation stories and stories of the dreaming resides in the traditional owners (or custodians) of the stories or images.”138 This right is vested exclusively but jointly in the custodians as prescribed by Aboriginal law and custom. In the same sense, under ancient Israel's th e­ ocratic rule, creativity was recognized as a gift from God, thus limiting the extent to which its fruits could be commodified.189 A fourth cause of the differences in intellectual property treatm ent in indigenous societies is th at the value ascribed to creative expression is jointly held by the group as a whole.140 This value is not material as such, thus reflecting the non-commodifiability of certain goods in these cul­ tures. Under Aboriginal law for example, the right to create paintings and other works about creation is vested in a group of custodians who are responsible for determining “whether the stories and images may be used in a painting, who may create the painting, to whom the painting may be published, and the terms on which it may be reproduced.”141 By m ain­ taining such a structured form for administering the right to create, the Aboriginals are able to guard the value of the meaning of the painting to their society. The Australian Court in Milpurrurru recognized the per­ sonal and cultural distress th a t the infringing carpets had caused to the Aboriginal community, noting th at the losses, “which were a reflection of the aboriginal cultural environment in which the artists reside,” could be accounted for in giving award damages.142 Among Native American groups of the Northwest coast, art is used “as a language of social power, creating images that connote aristocratic perogatives.”148 The objects of western intellectual property, such as songs, formulas, drawings, dances, and emblems are, in these groups, methods for acquiring power, visible expressions of power, or even sacred

137. Strickland, supra note 121, at 182. 138. Milpurrurru, supra note 132, at D-61-62. 139. For example, it was forbidden for the anointing oil tobe reproduced by any indi­ vidual, the punishment being ostracism. See Exodus 30:32. Similarly, the composition of the perfume Moses was instructed to make could not be reproduced. See Exodus 30:37. 140. See Strickland & Supernaw, supra note 126, at 165. 141. Cohen, supra note 116. 142. Id. 143. Strickland, supra note 12 1 , at 182.

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objects.144 As Professor Strickland points out: Western classification systems are out of touch with the American In­ dian world-view. Indeed, even the terms art, art work . . . as nonIndians use them, embody concepts foreign to Native American socie­ ties. Among many Indian peoples, all man-made objects are grouped together and referred to as that-which-has-been-made. The distinc­ tion between aesthetic objects, sacred objects, functional objects, pub­ lic objects and commercial objects simply does not exist.145 In a holis­ tic society, there are no such lines.14®

Finally, a fifth cause of differences in recognition and protection of intellectual property between indigenous societies and industrialized na­ tions is that the organizing principles of these societies are so different as to affect the very idea of what is considered the appropriate subject of private ownership. Most Third World societies are organized around a social unit which extends certainly beyond the individual and, in most cases, beyond the nuclear family. The forms and very definition of owner­ ship are thus crafted in a way opposite to property conceptions of western legal and economic structures central to the development of private and public law.147 W hat is representative of intellectual property laws in these societies are thus, not surprisingly, nothing* like their western counterparts. There is one im portant similarity between the protection of creative endeavor under western intellectual property laws and in indigenous soci­ eties. Both aim, ultimately, to enhance public welfare by protecting the fruits of creative effort. Given the value ascribed to creativity in many indigenous societies, it seems obvious that the protection of the fruits of creative energy is essential to the well being, to the sense of identity, and to the preservation of cultural patrimony th at is so vital to the viability of these groups. Similarly, the enhancement of public welfare has long been the asserted purpose of intellectual property law in Anglo-American juris­ prudence.148 The divergent forms th at these laws take on in indigenous societies and in the western hemisphere is the strongest testimony of the fundamentally different philosophical tenets which underlie these sys­ tems. Above all, the fact th a t creativity remains a vital part of life and

144. Id. at 184-185. 145. Id. at 184. The distinction between functional objects and aesthetic objects is par­ ticularly important in copyright law. Under the utilitarian function exception, copyright protection does not extend to works whose artistic features are not distinguishable from its utilitarian dimensions. “Such works are not copyrightable regardless of the fact th at they may be “aesthetically satisfying and valuable.’ ” H.R. 5668, 94th Cong., 2d Sess. (1976). See Carol Barnhart Inc. v. Economy Cover Corp., 773 F.2 d 411 (2 d Cir. 1985). 146. Strickland, supra note 121 , at 184. 147. See Kenneth J. Vandevelde, The New Property of the Nineteenth Century: The Development of the Modern Concept of Property, 29 B u f f a l o L. R e v . 325 (1980). 148. See Mazer, supra note 79, at 219. “The economic philosophy behind the clause empowering Congress to grant patents and copyrights is the conviction that encouragement of individual effort by personal gain is the best way to advance public welfare.” Id..

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th at it holds such powerful leverage and meaning in these societies tells the rest of the world th at creativity is not only alive, but that it is also central to the social, political, and economic welfare of indigenous societies.148 IV.

T h ir d W o r l d C r e a t iv it y and t h e I n t e r n a t io n a l iz a t io n o f In te lle c t u a l P ro p e rty

Prior to the TRIPS agreement, intellectual property had significant international dimensions. Technological advances during the nineteenth century made the reproduction of literary works relatively cheap, and thus created a demand for the works of authors and artists. International piracy emerged as a significant problem which led to the negotiation of two principal international agreements on intellectual property, namely, the Berne Convention for the Protection of Literary and Artistic Works160 and the Paris Convention for the Protection of Industrial Property.161 These two treaties neither created international patent or copyright rights nor established substantive law in these areas. Rather, the Berne Convention reflected an attem pt to create rights, at the international level, for individual authors as their works moved through channels of commerce from country to country.162 Similarly, as suggested by the events during its incipient stages, the Paris Convention arose out of a desire to provide protection for foreign works whereby nations agreed to recognize and protect the rights of foreign artists within their own domes­ tic borders.163 The issue, then, for international patent and international copyright protection was not the absence of similar domestic laws but

149. See Strickland, supra note 121, at 181-189; see also

B arbee,

supra note 84, at 28-

45. 150. Berne Convention, supra note 42. 151. Paris Convention, supra note 44. 152. See R ic k e t so n , supra n o te 26. 153. The origins of the Paris Convention may be traced back to a temporary law en­ acted by the Austria-Hungarian Empire in 1873, to encourage inventors to participate in an international exhibition of inventions to be held in Vienna. The unwillingness of inventors to participate because of fear that inventions would be duplicated and ideas stolen led to the law which provided special protection for foreign exhibitors and their inventions for the duration of the exhibition. By this time however, domestic patent systems existed in most European states. In 1873, the same year of the international exhibition, a Congress was convened in Vienna with the objective of examining the possibilities for a more effective and useful international system for protecting patented works. In 1878 an International Con­ gress on Industrial Property was convened as a follow up to the earlier Vienna Congress, with the purpose of determining the basis of uniform legislation in the field of industrial property. A proposal for an international union was prepared and sent to other governments together with an invitation to attend an international conference in 1880. The 1880 confer­ ence adopted a draft Convention, parts of which is still incorporated in the Paris Conven­ tion today. Finally, in 1883, a new conference convened in Paris to adopt and sign a final draft of the 1880 Congress. This was the Paris Convention for the Protection of Industrial Property. It has since been revised several times, the most popular revision being the Stokholm revision of 1967. See generally B a c k g r o u n d R e a d in g M at e r ia l o n I n t e l l e c t u a l P r o p e r t y , supra note 62, at 49-50.

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rather the refusal to extend domestic protection under the law to the works of foreigners.154 Both treaties built upon concepts of copyright and patent laws155 similar to what already existed in the countries represented as well as that which conformed to the general philosophies of the time. Professor Ricketson points out that, in the area of copyright, “ [although the legal theories underlying copyright protection differ from country to country, the origins of this form of protection in each country were strikingly similar: the grant of exclusive printing rights or privileges which were made to printers and publishers soon after the introduction of printing in Europe in the late fifteenth and early sixteenth centuries.”165

The concern for providing adequate protection of foreign works re­ sulted in a national treatm ent principle as the central requirement of the international treaties. The national treatm ent principle meant that treat­ m ent of foreign authors and their works would be no less favorable than treatm ent afforded to the nationals of the protecting country.167 This ef­ fectively put a stop to the discriminatory treatm ent of foreign works. Thus, the Berne Convention and the Paris Convention did not create substantive law for member states; further, they also did not impose new law on the member states. Rather, they reflected, to a large extent, a con­ sensus reached among the states which was legitimated by the existence of a similar system within their respective domestic countries. The TRIPS agreement155 makes the protection of intellectual goods in the forms and categories recognized in western cultures a mandatory requirement for nations within the m ultilateral trading system. TRIPS requires countries to protect copyrights and related rights,159 patents (in­ cluding utility and process patents),160 tradem arks,101 industrial de­ signs,162 layout-designs of integrated circuits,108 and trade secrets.164 Part

1 5 4 . See R ic k e t s o n , supra n o t e 2 6 , a t 5 -1 9 . 155. This should not be surprising as these countries shared to some degree, a similar­ ity in political structures. The arts have always been a significant part of European culture and life. It is thus not surprising that these principal treaties have their roots in Europe, but also, that they were informed by European conceptions of what constitutes civilized society. Thus in the 1858 Brussels Conference on Literary and Artistic Property an outline of what would constitute elements of a universal copyright law was prepared by the Congress, which was of the opinion “that the principle of international recognition of the property of authors in their literary and artistic works should be enshrined in the legislation of all civilised peoples.” Id. 156. R ic k e t s o n , supra note 26, at 3. 157. The principle of national treatment is a standard feature of most trade and intel­ lectual property treaties. 158. TRIPS Agreement, supra note 10, at 209-237. 159. Id. at §1, Art. 9-14. 160. Id. at §5, Art. 27-34. 161. Id. at §2 , Art. 15-21. 162. Id. at §4, Art. 25-26. 163. Id. at §6 , Art. 35-37. 164. Id. at §7, Art. 39.

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II of the agreement requires nations to comply with the substantive pro­ visions of the Berne Convention166 with the exception of the moral rights provision.166 This includes nations which may not have acceded to the Berne Convention. The requirem ent essentially erodes any possibility th at a nation might independently negotiate its own accession to the Berne Convention, which has always been a possibility under the interna­ tional aspects of intellectual property protection. Computer programs are to be protected as literary works for which the Berne Convention does not yet explicitly provide. The agreement lays a basis for rental rights,167 defines what kinds of marks m ust be protected,168 and provides for m ini­ mum rights of all rights holders.169 Similar provisions are also made for industrial designs.170 Finally, in the area of patents, the agreement estab­ lishes the scope of patentable subject m atter,171 defines the rights a p a t­ ent must confer on its owner,172 and outlines the conditions for granting a patent application.178 Significantly, the agreement requires a twenty year protection period for all inventions, products, and processes, in virtually every area of technology.174 This is a broader right than th at which is currently recognized under the Paris Convention.175 P art III of the Agreement sets out the obligations of contracting members to ensure th at the rights of domestic and foreign authors and inventors are effectively enforceable within the local legal system.176 The treaty does not require the establishment of a separate system of enforce­ ment but establishes civil and administrative procedures and remedies with which the contracting members must comply.177 Remedies spelled out in the text include damages, injunctions, imprisonment, fines, and the right of judicial authorities to order the destruction or disposal of the infringing goods.178 The agreement also requires th at judicial authorities have the power to order prom pt provisional measures and th at criminal penalties and procedures be provided in the case of wilful infringements in a commercial transaction.179 Finally, the agreement includes a phase-in time period for countries at various stages of development to implement legislation to bring their 165. Id. at Art. 9. 166. Id. 167. Id. at Art. 11 . 168. Id. at Art. 15(1). 169. Id. at Art. 1. 170. Id. at Arts. 1 , 25. 171. Id. at Art. 27. 172. Id. at Art. 28. 173. Id. at Art. 29. 174. Id. at Arts. 33, 34. 175. The agreement raises the level and scope of protection for all categories of intellec­ tual property. 176. TRIPS Agreement, supra note 10, at Art. 41, 42. 177. Id. at § 2. 178. Id. 179. Id. at Art. 35, 61.

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respective local laws and judicial systems into conformity with the agreement.180 The TRIPS agreement at best prioritizes intellectual property, and at worst, imposes a model assumed to be objectively the “right form” of intellectual property protection. This “form” has all the elements of west­ ern property concepts, including exclusive ownership, the right to limit use, and the ownership right of control over the propertized good. How do Native American or Aboriginal conceptions of intellectual goods fare under this system? What place does the “holistic world view” of Native American peoples play in this model? Is there any possibility th at indigenous laws protecting creativity will have room to assert them ­ selves in a system based on this foreign model of intellectual property protection? For example, will an Aboriginal, wanting to sell a painting depicting the dreaming which he has been given the right to create by the community leaders, be able to assert against the group a right to dis­ tribute th at painting in channels of commerce? Can an art object which is not considered alienable by a Native American group, yet which is cre­ ated by an individual member of the group, be alienable by such a mem­ ber because copyright law recognizes the member as the “author” giving this individual an exclusive right to dispose of it? Above all, how will intellectual goods, which have significant spiritual and cultural meaning to these peoples, be affected by the commodification which undergirds the internationalization of intellectual property? The ramifications of these questions touch on the thesis of this arti­ cle, but cannot be fully addressed here. Suffice it to remark th at the cur­ rent international framework does not supply encouraging answers. Un­ fortunately, the burden will once again fall on indigenous peoples to establish mechanisms which will protect their laws and preserve their sense of meaning. History suggests, however, th at these groups ultimately face, in the absence of laws which recognize and serve in their interests,181 the translation and thus death of objects and values which undergird their creativity under the current multilateral framework.182 As Strick­ land observes: Many non-Indians have a problem in the cultural translation of Na­ tive works. A non-Indian viewer of a Hopi figure, a Tlingit mask, or a Shoshone-painted hide translates the object into the familiar frame­ work of his own culture. In doing so he confronts the same distortion

180. Id. 181. Virtually all international treaties recognize the needs of developing countries and, at least on paper, attempt to make some special provisions for them; the TRIPS agreement is no exception. Without going in to the merits of these “special” provisions, it is important to note that a system, which at once globalizes a model and yet provides for a mechanism for assimilating differences, is at best palliative and at worst deceiving. A truly multilateral agreement must both recognize and serve the interests of all parties, however fragile that consensus may be. 182. Strickland, supra note 121 , at 185.

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as the English-speaking reader of a translated Cherokee lovesong. The song, translated into English, has its syntax transposed, verb tenses approximated, and inflections altered. No longer a linguistic reflection of its maker, the song becomes a carnival mirror, distorting the deli­ cate thought patterns of its creator’s culture. The non-Indian’s per­ ception of Native American objects requires a similar translation. The visual arts, and the verbal arts, demand a holistic context. It is sim­ ply not possible to judge the meaning of a sacred object from a view­ point and value structure outside the culture itself.183

V.

S om e Im p lic a tio n s

It is quite clear th at one of the central motivations behind the TRIPS agreement was to target enforceability of foreign intellectual property rights in developing countries. As such, the global model of in­ tellectual property protection imposed by the agreement is not a reflec­ tion of the need to encourage creativity or to promote the public welfare. Rather, the chief aim of the agreement is to secure from these countries and societies the full monopoly benefits that western intellectual property laws offer. The implications of these strategic moves are many, the most im portant of which are discussed below. The need to maintain incentives to encourage creative activity is lim­ ited, in many respects, to western m arket democracies. These democra­ cies revolve, in large part, around individual autonomy and liberty, not­ withstanding the greater social loss, of nonmaterial value th at individualism tends to breed. The successful commodification of intellec­ tual goods can only be achieved in a society which embraces this sort of rugged individualism. Until indigenous societies reach this point, the in­ ternational community may have to come to terms with a persistent level of piracy in international trade.184 Piracy, however, cannot simply be ex­ plained mechanically in economic terms based on the reasoning th at pov­ erty necessitates the availability of cheap products.188 For many of these societies, the difficulty in introducing western copyright principles is that these principles attem pt to overturn social values which are centuries old.186 The laws protecting intellectual goods in these societies simply re­ flect fundamental notions of what the society considers to be the appro­ priate subject of exclusive ownership. The duplication of literary work is thus, for example, not perceived as stealing but as making a good thing accessible to the general public.187 Knowledge in many indigenous socie183. Id. 184. One should note that piracy is not limited to Third World societies/developing countries. A fair amount of piracy exists in Europe and the United States as well. 185. See, e.g., Remarks by Donald Westmore, Economic Development in the Third World: What Can Be Expected From the Uruguay Round?, A.S.I.L. Proceedings, April 8 11, 1987. 186. See, e.g., W illia m A l f o r d , To S t e a l a b o o k is a n E l e g a n t O f f e n s e : I n t e l l e c t u a l P r o p e r t y L a w in C h in e s e C i v i l i z a t i o n (1995). 187. For example, China. Id.

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ties is not perceived as something th at can be commodified or objectified through law. It is impossible to ignore such fundamental conceptions in these communities. In addition to responding to a persistent level of piracy, the interna­ tionalization of intellectual property also suggests that there is some way to objectively measure protection of intellectual property. By not taking into account the possibility of alternative forms of protection, the TRIPS agreement, as did its predecessor treaties,188 presupposes that “all civi­ lized nations” will and m ust recognize this global model of intellectual property protection.189 By mandating this model, governments in devel­ oping countries are faced with the difficult job of destroying, or at least attem pting to destroy, native conceptions about life and living and about what constitutes an ordered society. The allocation of material value to goods, and the way in which this value is expressed, is grounded firmly in the history of the evolution of a people. The internationalization of intel­ lectual property threatens to undermine, if not totally destroy, the values th at indigenous systems ascribe to intellectual property and the manner in which they allocate rights to intellectual goods. W hat the internationalization of intellectual property implies, ulti­ mately, is that there is only one way to participate in the international economy and that is by playing in accordance with prescribed rules, re­ gardless of its impact on a group of peoples. It is a message that is not unfamiliar in the history of world affairs, and yet it is a message which, so history informs us, has caused devastation of unimagined proportions to human society. The next few years will reveal just how far native peoples, indigenous groups, and developing countries will fare in the preservation of their cultural patrimony and in their ability to determine the identity of their group in an increasingly hostile international economic environment. VI.

C o n c lu s io n s

There is still much to be said about intellectual property and its cor­ onation as the defining element of international economic regulation. For the purposes of this article, however, only the implications of a system which denies legitimacy and which threatens the viability of anything op­ posed to it, is important. Third World creativity, regardless of how it is to be protected, must be recognized not only as a m atter of law but as a m atter of life within the various communities. Perhaps an innovation ver­ sus creativity distinction m entioned earlier in the article will prove useful in helping to fashion a system which offers Third World creativity an op-

188. The Berne Convention and the Universal Copyright Convention. Native Americans were “encouraged” in a similar manner to “engage in the indus­ trious pursuits of agriculture and civilized life” by adopting property laws similar to those recognized at common law. See R e n n a r d S t r i c k l a n d , F i r e a n d S p i r it s 5 1 , 2 3 7 -2 3 8 (1 9 7 5 ), quoted in Strickland & Supernaw, supra note 126, at 1 0 3 . 189.

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portunity to be protected on terms necessary to ensure its continued via­ bility.190 Innovation, undoubtedly, holds benefits for all societies, al­ though surely it is unnecessary for every society to re-invent the wheel. On the other hand, some societies may invent better wheels, better at least, to suit their specific needs as a community.191 Innovation, however, does not come without costs. The present form of protecting innovation incurs particular social costs in Third World societies; costs which are destructive to the accepted values and principles of their social and polit­ ical organization. It is critical for developing countries, as well as for all groups of people recognized as forming a distinct ethnic/political entity, th at social costs of protecting innovation and creativity be properly linked to their specific political, social, and cultural contexts. In this re­ gard, different legal rules may emerge for innovation, rules which fairly represent the large amounts of capital expended by multinational corpo­ rations and which will also perhaps take into account the years of effort and resources a community may have invested in perfecting, for example, an herbal drug through the work of traditional native doctors.192 The TRIPS agreement represents an attem pt to protect certain forms of creative activity (i.e., innovation) in specific ways which have proved beneficial to corporatized, post-modern economies. As one scholar has observed: postmodernity is distinguished by a dramatic restructuring of capital­ ism in the post war period, a reconstruction of labor and capital mar­ kets, the displacement of production relations to non-metropolitan re­ gions, the consolidation of mass communications in corporate conglomerates, and the pervasive penetration of electronic media and information technologies. Such processes have coalesced in the West­ ern world societies oriented towards consumption. Consumption is managed by the mass media’s capacity to convey imagery and infor­ mation across vast areas to ensure a production of demand. Goods are increasingly sold by harnessing symbols, and the proliferation of mass media imagery means that we increasingly occupy a “cultural” world of signs and signifiers that have no traditional meanings within social communities or organic traditions.1®3

However one interprets the TRIPS Agreement it is important that

190. See supra note 26. 191. See G e o r g e B a s a l l a , T h e E v o l u t i o n o f T e c h n o l o g y 7-14 (1988). One of the longstanding criticisms of the international patent system has been the way the system blocks specialized inventions once the idea of, for example, the wheel, has been patented elsewhere in the world. 192. See Stephen R. King, The Source of Our Cures, 43 C u l t u r a l S u r v i v a l Q . 19, 23 (1991) (noting that the antimalarial drug known as guinine was first used by Indians). See generally Kirsten Peterson, Recent Intellectual Property Trends in Developing Countries, 33 H a r v . I n t ’l L.J. 277 (1992) (discussing in some detail the importance indigenous native healers in discovering new sources of treatment for modern ills). 193. Rosemary Coombe, Objects of Property and Subjects of Politics: Intellectual Property Laws and Democratic Dialogue, 69 T e x . L. R ev . 1860, 1862-1863 (1991).

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the current implications to non-Western societies of the internationaliza­ tion of intellectual property not be ignored.

[17] (Intellectual) Property and Sovereignty: Notes Toward a Cultural Geography of Authorship Keith Aoki* Keith Aoki discusses the challenge that the rise o f digital information tech­ nology poses to traditional legal conceptions o f property. He chronicles the evolution o f the idea o f “property” and its relationship to “sovereignty” in Anglo-American law. In contrast to developments in other areas o f property law, the legal characterization and protection o f intellectual property rights maintain a sharp boundary between public and private, a division counter to early understandings o f copyright law. Professor Aoki locates the origins o f this division in a deeply embedded image o f originary romantic authorship, which is evoked to justify rights in information itself. As information flows more freely across borders, supranational sovereignty over information erodes traditional, territorial notions o f sovereignty. Professor Aoki calls attention to the flaws in our current maps o f intellectual property and concludes that reimagining the regulation o f digital information flows will shape both the conceptual and the physical geography o f the information age. I n t r o d u c t i o n ............................................................................................................................. I.

C o n t r o v e r s ia l R e p r e s e n t a t io n s A. B.

II.

of a

T r o u bled F ie l d

Mapping as Representational P ra ctice................................. Legal Cartographies.................................................................

P r o p e r t y , S o v e r e ig n t y , T e r r it o r ia l it y , S t a t e : T r o u b l e d M a p p in g s

N

1299 1300 1305

a t io n -

P r i v a t e .................

1311

“Public” and “Private” Sovereigns........................................ B. Property and Sovereignty........................................................ C. The Romantic Author as an Amalgam o f Property and Sovereignty................................................................................. D. Resolving the Question o f Public vs. Private by “Privatizing” Information Production.................................... E. Property and Technological C hange.....................................

1311

A.

of

P u b l ic

a n d the

1294

and

1314 1322 1327 13 3 3

* Assistant Professor o f Law, University o f Oregon School o f Law; B.F.A. 1978, W ayne State; M.A. 1986, Hunter C ollege; J.D., Harvard Law School; LL.M. 1993, University o f W isconsin-M adison School o f Law. I would like to sincerely thank James Boyle, M aggie Chon, Rosemary Coombe, Garrett Epps, Rich Ford, Ibrahim Gassama, Angela Harris, Lisa Kloppenberg, David Lange, Joe Singer, and Fred Yen for their invaluable comments, criticisms, and suggestions on many earlier drafts. Addition­ ally, I would like to express my gratitude for the superb research assistance provided by Greg Broiles, Jamey Carter, Anne Fujita, David Munsey, and Mary Ann Murk. Last but not least, I also would like to thank Mona Tillman Aoki for her unwavering support and encouragement.

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III.

N o tes T o w a r d a C u l tu r a l G e o g r a ph y o f A u t h o r s h ip 1338 A. Globalization and International Intellectual Property P aradigm s................................................................................... 1339 B. The Political Economy o f Global Intellectual P roperty 1345 C. The Information Economy's Spaces and Places: The “Global” Does Not Equate With the “Planetary”............... 1348

IV.

C o n c l u s io n : W h y E v e r y t h in g W e K n o w A b o u t I n t e l l e c t u a l P r o p e r t y I s NOT W r o n g , b u t T h e r e ’ s M o r e t o t h e P ic t u r e T h a n M ee t s t h e E y e ...............................................

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This article is located at the intersection of discourses represented by the following four quotations: two from Foucault, one from Wired magazine, and one from United States legal realist Felix Cohen. A whole history remains to be written of spaces—which would at the same time be the history of powers (both these terms in the plural)—from the great strategies of geo-politics to the little tactics of the habitat. . . passing via eco­ nomic and political installations.1 The author allows a limitation of the cancerous and dangerous proliferation of significations within a world where one is thrifty not only with one’s re­ sources and riches, but also with one’s discourses and their significations. The author is the principle of thrift in the proliferation of meaning. . . . We are used to thinking that the author is so different from all other men, and so transcen­ dent with regard to all languages that, as soon as he speaks, meaning begins to proliferate . . . . The truth is quite contrary: the author is not an indefinite source of signifi­ cations which fill a work; the author does not precede the works; he is a certain functional principle by which, in our culture, one limits, excludes, and chooses; in short, by which one impedes the free circulation, the free manipulation, the free composition, decomposition, and recomposition of fiction. . . . One can say that the author is an ideological product, since we represent him as the opposite of his historically real function.2 I prowl the aisles of the software piracy mother lode, the Golden Shopping Arcade in Hong Kong’s Sham Shui Po district. Before leaving . . . I buy the first of my installer discs, Volume 2. This tribute to pirate technology costs the same as all the other CD-ROMs at Golden Arcade, about 9 bucks or three for US$25. . . . [T]his disc has 86 programs on it, [including] a beta copy of Windows 95 as well as OS/2 Warp, CorelDraw! 5, Quicken 4.0, Atari Action Pack for Windows, Norton Commander, KeyCad, Adobe Premier, Microsoft Office, and dozens of other applications . . . . Some­ one from Microsoft later tells me that the retail value of the disc is between 1. M i c h e l F o u c a u l t , The Eye of Power, in P o w e r / K n o w l e d g e : S e l e c t e d I n t e r v i e w s a n d O t h e r W r i t i n g s , 1972-77, at 146, 149 (Colin Gordon ed. & Colin Gordon, Leo Marshall, John Me-

pham & Kate Soper trans., 1980). 2. M i c h e l F o u c a u l t , What Is An Author?, in now ed. & Josue V. Harari trans., 1984).

T he F o u c a u lt R ead er

101, 118-19 (Paul Rabi-

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$20,000 and $35,000. Not a bad deal for less than what it costs to fill the tank with unleaded at the comer gas station.3 The divorce of legal reasoning from questions of social fact and ethical value is not a product of crusty legal fictions inherited from darker ages. . . . Courts and scholars . . . have taken refuge in a vicious circle to which no obviously extra-legal facts can gain admittance. The current legal argument runs: One who by the ingenuity of his advertising or the quality of his product has induced consumer responsiveness to a particular name, symbol, form of packaging, etc., has thereby created a thing of value; a thing of value is prop­ erty; the creator of property is entitled to protection against third parties who seek to deprive him of his property. . . . The vicious circle inherent in this reasoning is plain. It purports to base legal protection upon economic value, when, as a matter of actual fact, the economic value of a sales device depends upon the extent to which it will be legally protected. . . . The prejudice that identifies the interests of the plaintiff in unfair com­ petition cases with the interests of business and identifies the interests of busi­ ness with the interests of society . . . will not be recognized . . . so long as the hypostatization of “property rights” conceals the circularity of legal reasoning.4 A spectre is haunting the Infobahn. The spectre is a romantic vision of originary authorship that is deeply embedded in the national intellectual prop­ erty regimes of Western Europe and North America.5 This spectre serves to structure debate, in express and implicit ways, over in what direction interna­ tional protection of intellectual property should proceed.6 Surrounding this 3. A. Lin Neumann, Information Wants To Be Free—But This Is Ridiculous: We Go on a Shop­ ping Spree for Pirate Software in Asia, W i r e d , Oct. 1995, a t 88, 88. 4. Felix S. Cohen, Transcendental Nonsense and the Functional Approach, 35 C o l u m L. R e v . 809, 814-17 (1935). 5. While the umbrella term “intellectual property” encompasses not only copyright, but also pat­ ent, trademark, trade secret, unfair competition, industrial property, neighboring rights, and so on, this article will focus primarily on tensions between national and putative international copyright regimes. This is in part because of the Trade Related Aspects of Intellectual Property accord of the Uruguay Round of the General Agreement on Tariffs and Trade concession that computer programs are “literary works” and therefore are copyrightable, as well as similar pronouncements in other multilateral conven­ tions. Agreement on Trade-Related Aspects of Intellectual Property Rights, Including Trade in Counter­ feit Goods, Apr. 14, 1994, 33 I.L.M. 1197, 1201 (1994) [hereinafter TRIPs]; see also J.H. Reichman,

The TRIPs Component of the GATT's Uruguay Round: Competitive Prospects for Intellectual Property Owners in an Integrated World Market, 4 F o r d h a m I n t e l l . P r o p ., M e d ia & E n t . L. J. 171 (1993); J.H. Reichman, Universal Minimum Standards of Intellectual Property Protection Under the TRIPs Component of the WTO Agreement, 29 I n t ’l L a w . 345 (1995); for a pre-TRIPs-overview, see Ruth L. Gana, Has Creativity Died in the Third World? Some Implications of the Internationalization of Intellec­ tual Property, 24 D e n v . J. I n t ’l L. & P o l ’y 109 (1995); Marshall A. Leaffer, Protecting United States Intellectual Property Abroad: Toward a New Multilateralism, 76 I o w a L. R e v . 273 (1991). 6 . For explanations of how the author trope can shift legal discourse, see, e.g., J a m e s B o y l e , S h a m a n s , S o f t w a r e , a n d S p le e n s : L a w a n d t h e C o n s t r u c t i o n o f t h e I n f o r m a t i o n S o c i e t y xi

(1996) (arguing that the “unconscious use of the [romantic] author paradigm has wide-ranging negative effects, with costs in everything from biodiversity and the production of new drugs to the shape of the international economy and the structure of the computer industry”); M a r k R o s e , A u t h o r s a n d O w n ­ e r s : T h e I n v e n t i o n o f C o p y r i g h t 141 (1993) (“Much of the notorious difficulty of applying copyright doctrine to concrete cases can be related to the persistence of the discourse of original genius and to the

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spectral figure is a constellation of equally deeply embedded beliefs and as­ sumptions about the nature of individual, group, and national identity, propri­ ety, property, territoriality, sovereignty, and borders— all of which are currently contested and undergoing major transformation.7 The rapid rise and spread of digital information networks is forcing us to consider sooner (many say too soon),8 rather than later, how the law is going to characterize the in­ creasing transborder flow of information, and how these legal characterizations will substantively and formally affect the production and use of such informa­ tion. This will in turn ultimately structure and regulate the identities of users. Digital information technology is not the cause of this crisis. Rather, the deeply embedded and largely unarticulated legal assumptions that attend our problems inherent in the reifications of author and work.”); M a r t h a W o o d m a n s e e , T h e A u t h o r , A r t , a n d t h e M a r k e t : R e r e a d i n g t h e H i s t o r y o f A e s t h e t i c s 54-55 (1994) (describing emergence of the “radically new conception of the book as an imprint or record of the intellection of a unique individual” in nineteenth century Germany); Martha Woodmansee & Peter Jaszi, Introduction to T h e C o n s t r u c ­ t i o n o f A u t h o r s h i p : T e x t u a l A p p r o p r i a t i o n in L a w a n d L i t e r a t u r e 13 (Martha Woodmansee & Peter Jaszi eds., 1994) (“The essays collected here demonstrate that our [existing] construction of the author as the bearer of special legal rights and cultural privileges carries consequences for the ways in which power and wealth are distributed ”); David Lange, At Play in the Fields ofthe Word: Copyright and the Construction of Authorship in the Post-Literate Millennium, 55 L a w & C o n te m p . P r o b s . , Spring 1992, at 139 (celebrating the advent of new technologies that change the concept of authorship from a tool of institutional power in state intellectual property regimes to a liberating force of creativity); Jessica Litman, The Public Domain, 39 E m o r y L.J. 965, 969 (1990) (arguing that romantic notions of authorship and copyright’s originality standard discount the importance of a broad public domain of creative raw materials); see also J a y D a v i d B o l t e r , W r i t i n g S p a c e : T h e C o m p u t e r , H y p e r t e x t a n d t h e H i s t o r y o f W r i t i n g (1991); W a l t e r J. O n g , O r a l i t y & L i t e r a c y : T h e T e c h n o l o g i z i n g o f t h e W o r d (1982); M a r k P o s t e r , T h e M o d e o f I n f o r m a t i o n : P o s t s t r u c t u r a l i s m a n d S o c i a l C o n t e x t 15 (1990) (“What the mode of information puts into question . . . is not simply the sensory apparatus but the very shape of subjectivity. . . . In the mode of information the subject is no longer located in a point in absolute time/space, enjoying a physical, fixed vantage point from which to rationally calculate its options. . . . [W]e are being changed from ‘arborial’ beings, rooted in time and space, to ‘rhizomic’ nomads who daily wander at will . . . across the globe . . . without necessarily moving our bodies at all”). 7. See Rosemary J. Coombe, The Properties of Culture and the Politics of Possessing Identity: Native Claims in the Cultural Appropriation Controversy, 6 C a n . J.L. & J u r i s p r u d e n c e 249, 285 (1993) (“The range of Western beliefs that define intellectual and cultural property laws—that ideas can easily be separated from expressions, that expressions are the singular products of the individual minds of Romantic authors, and that these expressive works can be abstracted from the meaningful worlds in which they figure to circulate as the signs of unique personality, that cultures have essences embodied in objects that represent unbroken traditions—are not universal values that express the full range of human possibility, but particular, interested fictions emergent from a history of colonialism that has disempowered most of the peoples on this planet.”). See generally S t a t e S o v e r e i g n t y a s S o c i a l C o n ­ s t r u c t (Thomas J. Biersterker & Cynthia Weber eds., 1996). 8 . Peter Jaszi, On the Author Effect: Contemporary Copyright and Collective Creativity, 10 C a r d o z o A r t s & E n t . L.J. 293, 320 (1992) (“ A battle is shaping over the future of the Internet. On the one side are those who see its potential as a threat to traditional notions of individual proprietorship in information, and who perceive the vigorous extension of traditional copyright principles as the solution. On the other side are those who argue that the network environment may become a new cultural ‘com­ mons,’ which excessive or premature legal control may stifle.”) (emphasis added) (footnote omitted); see also I t h i e l d e S o l a P o o l , T e c h n o l o g i e s o f F r e e d o m (1983); Dan L. Burk, Transborder Intellec­ tual Property Issues on the Electronic Frontier, 6 S t a n . L. & P o l ’y R e v . 9 (1994); Ithiel de Sola Pool & Richard Jay Solomon, Intellectual Property and Transborder Data Flows, 16 S t a n . J. I n t ’l L. 113 (1980); Eric J. Novotny, Transborder Data Flows and International Law: A Framework for PolicyOriented Inquiry, 16 S t a n . J. I n t ’l L. 141 (1980); Fred H. Cate, Global Information Policymaking and Domestic Law, 1 In d . J. G l o b a l L e g . S t u d s ., Spring 1994 (available at http://www.law.indiana.edu/ glsj/vol2 /cate.html).

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concepts of “authorship,” “property,” and “globalization” create problems when they are deployed in situations that challenge their premises. The rise and spread of digital information networks is one such situation.9 This article presents three basic ideas: First, there is a strong relation be­ tween ideas of “property” and “sovereignty” in Anglo-American law. Authors (or more likely than not, those standing in their shoes) have been and continue to be accorded a high degree of sovereignty with respect to their interests in intellectual property, which is particularly surprising in light of the degree to which ideas of both “property” and “sovereignty” have become “unbundled” at the end of the twentieth century.10 Second, the author trope plays into a curi­ ous reassertion of both national boundaries and territorially premised intellec­ tual property regimes, even as technology makes those borders increasingly porous to information flowing in and out. Finally, I explore the reasons why a unitary concept of intellectual property protection, particularly one based on territorial boundaries, plays an important part in producing not only the concep­ tual, but also the actual physical spaces of the information age. This article observes that our current maps of intellectual property are fail­ ing us internationally. Recently, for example, the United States has insisted that the People’s Republic of China adopt and enforce United States-style intel­ lectual property laws, threatening that otherwise, the United States will retaliate by changing its trade policy toward China.11 This hard line on Chinese intel9. See generally Linda M. Harasim, Networlds: Networks as Social Space, in G l o b a l N e t w o r k s 15-16 (Linda M. Harasim ed., 1993) (“Historically, changes in the means of communication—from speech to writing to the printing press—have transformed human development. Technological change . . . defines the horizon of our material world as it shapes the limiting conditions of what is possible and what is barely imaginable. . . . As a technological innovation and a social construct, global networks impact the way in which we communicate, with transformative implications for how we form community, how we work, and how we learn.”). 10. David Elkins defines “unbundling” as: another way to repackage identities . . . from the point of view of the long-standing bundles called nations, unbundling is an undoing of what had been taken for granted. . . . Unbundling may weaken the hierarchy and may change the relative significance of particular identities, but it need not eliminate any of them. More crucial is this: unbundling will create spaces in which the hierarchy of identities is replaced by multiple hierarchies. D a v i d J. E l k i n s , B e y o n d S o v e r e i g n t y : T e r r i t o r y a n d P o l i t i c a l E c o n o m y in t h e T w e n t y - F i r s t C e n t u r y 31 (1995). 11. David E. Sanger, $2,8 Billion of U.S. Tariffs On China Are Threatened: Deadline Runs Out on Talks Over Piracy, N.Y. T im e s , Jan. 1, 1995, at A6 (quoting then-United States Trade Representative Mickey Kantor about a proposed retaliatory tariff on Chinese exports to the United States: “We have to send an unambiguous message to Beijing [that] now is not the time to let them continue to act as they have in the past.”); see W i l l i a m P. A l f o r d , T o S t e a l a B o o k Is a n E l e g a n t O f f e n s e : I n t e l l e c t u a l P r o p e r t y L a w in C h in e s e C i v i l i z a t i o n 3 (1995) (“American policy regarding intellectual property law has been based on fundamental misconceptions about the nature of legal development and is there­ fore in need of major reformulation.”); Marcus W. Brauchli, Chinese Flagrantly Copy Trademarks of Foreigners, W a l l S t . J., June 20, 1994, at Bl, B2 (“Pirated music accounts for half of China’s nearly $700 million a year in recording sales. And the software industry estimates that 94% of the software sold in China is fake, a loss [the] industry puts at $595 million.”); Seth Faison, Razors, Soap, Corn­ flakes: Pirating Spreads in China, N.Y. T im e s, Feb. 17, 1995, at Al, D2 (quoting Joseph T. Simone, a Hong Kong attorney: “In most countries, if you have 10 pirates, you can go after one, expect seven to stop, and then figure out how to get the remaining two. . . . But in China, when you go after one, the other nine see exactly what you’re doing. Not only do they keep pirating, but you invite 10 more to join in.”). On February 27, 1995, the day that the People’s Republic of China and the United States signed a Memorandum of Understanding that China would more stringently enforce its recently enacted copy­ a n d I n t e r n a t i o n a l C o m m u n ic a tio n s

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lectual property protection stands in contrast to the more cautious approach that the Bush and Clinton Administrations have taken toward countries’ sales of nuclear technology to Pakistan, China’s internal abuses of human and civil rights, and China’s increasingly militant assertions of sovereignty over Taiwan. But while this international bluster over intellectual property rights continues, the United States’ domestic intellectual property regime is at least on the verge of major transformation12 and perhaps about to collapse,13 especially with re­ spect to digital information technology. right law, the New York Times ran a story describing how test versions of Windows 95, which wasn’t released in the United States until August 1995, were selling for $40 a copy in Hong Kong. Edward A. Gargan, Pirate’s Bazaar Thrives in Hong Kong, N.Y. T im e s, Feb. 27, 1995, at Dl; see Seth Faison, U.S.

and China Sign Accord To End Piracy of Software, Music Recordings and Film: Washington Drops Plan to Impose $1 Billion in Trade Sanctions, N.Y. T im es, Feb. 27, 1995, at Al. See generally R e y C h o w , W r i t i n g D ia s p o r a : A g a i n s t t h e L u r e s o f D i a s p o r a (1993); J i a n y i n g Z h a , C h i n a P op: H o w S o a p O p e r a s , T a b l o i d s a n d B e s t s e l l e r s a r e T r a n s f o r m i n g a C u l t u r c (1995); Orville Schell, To

Get Rich is Glorious: In the New Market Boom, Maverick Entrepreneurs are Challenging the State’s Media Control, Few are Getting Political— Many are Going Tabloid, T h e N e w Y o r k e r , July 25, 1994, at 26; Orville Schell, Twilight ofthe Titan: China— The End of an Era, T h e N a t i o n , July 17, 1995, at 84. 12. For discussions of this transformation see Symposium: Toward a Third Intellectual Property Paradigm, 94 C o lu m . L. R e v . 2307 (1994). The most notable of these papers, A Manifesto Concerning the Legal Protection of Computer Programs, by Pamela Samuelson, Randall Davis, Mitch Kapor, and Jerome Reichman, criticizes the current copyright paradigm as applied to legal protection of computer programs and argues persuasively for a sui generis regime of protection for the applied know-how that computer programs embody. See Pamela Samuelson, Randall Davis, Mitchell D. Kapor & J.H. Reichman, A Manifesto Concerning the Legal Protection of Computer Programs, 94 C o lu m . L. R e v . 2308 (1994). But see, e.g., Jane C. Ginsburg, Four Reasons and a Paradox: The Manifest Superiority of Copyright Over Sui Generis Protection of Computer Software, 94 C o lu m . L. R e v . 2559, 2559-60 (1994) (criticizing the manifesto for underestimating copyright law and the value of its acceptance inter­ nationally as a regime for protecting computer programs). Compare Dennis S. Karjala, Misappropria­ tion As a Third Intellectual Property Paradigm, 94 C o lu m . L. R e v . 2594 (1994); Peter S. Menell, The Challenges of Reforming Intellectual Property Protection for Computer Software, 94 C o lu m . L. R e v . 2644 (1994).' 13. The work of John Perry Barlow, co-founder (with Mitch Kapor) of the Electronic Frontier Foundation, is more revolutionary than the authors of the computer program manifesto. Barlow writes: Since we don’t have a solution to what is a profoundly new kind of challenge, and [we] are apparently unable to delay the galloping digitization of everything not obstinately physical, we are sailing into the future on a sinking ship. This vessel, the accumulated canon of copyright and patent law. was developed to convey forms and methods of expression entirely different from the vaporous cargo it is now being asked to carry. . . . Legal efforts to keep the old boat floating are taking three forms: a frenzy of deck chair rearrangement, stem warnings to the passengers that if she goes down, they will face harsh criminal penalties, and serene, glassy-eyed denial. . . . . .. We will need to develop an entirely new set of methods as befits this entirely new set of circumstances. John Perry Barlow, The Economy of Ideas: A Framework for Rethinking Patents and Copyrights in the Digital Age (Everything You Know About Intellectual Property is Wrong), W i r e d , Mar. 1994, at 84, 85 (reprinted with changes at http://www.eff.org/pub/Publications/John—Perry—Barlow/HTML/idea—e conomy—article.html); see also John Perry Barlow, A Declaration ofthe Independence of Cyberspace, (Feb. 8 , 1996) (available at