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to you, which you would most like to see adopt fully adequate and effective intellectual property protection'' (U.S. International Trade Commission, 1988:D22). Thus, the countries that are cited most often are not necessarily those in which U.S. firms would be least likely to license or utilize advanced technology. Instead, they are those where U.S. firms felt that their reductions in profit due to weak intellectual property rights protection were greatest. As noted above, these may not be the same thing. Also, countries such as South Korea have acted to strengthen their system of intellectual property rights protection after 1986. This too may help to explain the low correlation.

XIII. REASONS INTELLECTUAL PROPERTY RIGHTS PROTECTION IN SOME COUNTRIES IS REGARDED AS INADEQUATE

As we have seen, a substantial percentage of U.S. firms in some industries regard the protection of intellectual property rights in many of the 16 listed countries as being too weak to enable them to make certain kinds of investments in those countries or to transfer particular types of technology there. Based on interviews with officials of many of these companies, it appears that in deciding whether a particular country's system of protection is too weak, they are especially interested in the answers to three broad questions. First, are the country's laws of sufficient scope to protect their technology? For example, some countries do not permit chemical or pharmaceutical inventions to be patented. Second, does an adequate legal infrastructure exist in the country? In some countries, there are few patent attorneys or other specialists dealing in this area of expertise. Third, are the relevant government agencies in the country able and willing to enforce the laws and to provide prompt and equitable treatment to foreign firms? In some countries, there are reports of corruption and of local firms winning in court with uncanny regularity.

It is not very difficult to see why many U.S. firms would feel that some of the 16 countries have inadequate systems of intellectual property rights protection. In India, no product patents are granted for drugs, chemicals, alloys, optical glass, semiconductors, and intermetallic compounds. In Thailand, firms have complained about the lack of patent protection for chemicals, pharmaceuticals, food and beverages, and agricultural equipment, as well as the weak protection of trademarks and copyrights.10 In Brazil, no patent

10  

See Sen (1990) on India and Schumann (1990) on Thailand. In the May 25, 1989, report of the U.S. Trade Representative on "Special 301," Thailand and India were leading on its "priority watch list," followed by South Korea, Taiwan, and the People's Republic of China.



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