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protection for chemicals, pharmaceuticals, and foodstuffs exists, and the protection of trade secrets is weak.11

In Taiwan, foreign firms have claimed that patent protection for chemicals and pharmaceuticals has been inadequate and that there has been no unfair competition law dealing with false advertising, imitative product packaging, and inaccurate marks of origin. In 1986, a revised patent law was passed that extends full patent protection to chemical and pharmaceutical products. Also, firms unregistered in Taiwan can pursue trademark infringement cases in local courts, and copyright protection has been extended to computer software. Nonetheless, many problems remain; for example, violators can file "invalidation claims" to delay court cases, making plaintiffs defend the legality of their patents or trademarks.12

Even where patent protection exists, the term of the patent may be relatively short. In India, the patent term is seven years for food, medicines, and drugs. In some countries, the patent holder must work the invention within one to three years after the patent is granted; otherwise, the patent is subject to compulsory licensing or may lapse. Firms object that they cannot manufacture their products in every nation where they expect patent protection. When compulsory licenses are granted, the royalty rate is often set at 0.5 percent or less of sales, which producers regard as very low. In India and the Philippines, pharmaceutical patents are subject to compulsory license on demand, even if the patent holder does work the invention there.13

XIV. FACTORS RESPONSIBLE FOR INTERINDUSTRY VARIATION IN THE EVALUATION OF PROTECTION IN PARTICULAR COUNTRIES

As emphasized above, industries differ considerably in their evaluation of intellectual property rights protection in particular countries. Based on

11  

See Frischtak (1990) and Sherwood (1988). Also, metallic admixtures and alloys are not patentable unless they have "specific intrinsic qualities precisely characterized by the nature and proportions of their ingredients or by special treatment." Nonetheless, as shown in Tables 5-3 to 5-5, this seems to have had little or no effect in discouraging U.S. metals firms, illustrating once again the importance of an industry-by-industry analysis. According to some U.S. metals firms, they often can incorporate sensitive technologies in "black boxes" that can be protected.

In April 1991, a new industrial code was forwarded to Brazil's Congress for consideration. This new code would cover pharmaceuticals and other products and processes not currently protected. See Suzigan (1991).

12  

See Schumann (1990) and references in note 13.

13  

See Goans (1986), Hill (1985), Matthews (1988), and the President's Commission on International Competitiveness (1985).



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