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Discussion

Given a diversity of national interests, what is the probability that a global intellectual property right (IPR) system such as that being proposed in the negotiations of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) can gain widespread acceptance? This question, and the forces moving nations both closer and further apart on IPR issues, were addressed by the conference audience and panel members in a discussion of the perspectives presented in Chapter 6.

During the conference, it was pointed out that many of the newly industrialized economies (NIEs) have recently implemented higher levels of intellectual property protection. One audience member questioned whether this development stemmed from the NIEs' perception that the benefits of rewarding innovation in their countries now outweigh the costs of having to pay for intellectual property, or whether the motivating factor was the belief that the loss of income due to U.S. trade retaliation would offset the opportunities and benefits of "free riding" on foreign technology.

As his essay in Chapter 6 indicates, Carlos Primo Braga believes that both factors played a role. At the conference, he added that although bilateral pressure from the United States has been credited with success in bringing the NIEs closer to the standards of industrialized countries, this success may have been helped by an internal push for increased IPR protection, and vice versa. In the case of Brazil, the efforts of domestic parties to acquire greater protection for biotechnology products was accelerated by the threat



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Global Dimensions of Intellectual Property Rights in Science and Technology Discussion Given a diversity of national interests, what is the probability that a global intellectual property right (IPR) system such as that being proposed in the negotiations of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) can gain widespread acceptance? This question, and the forces moving nations both closer and further apart on IPR issues, were addressed by the conference audience and panel members in a discussion of the perspectives presented in Chapter 6. During the conference, it was pointed out that many of the newly industrialized economies (NIEs) have recently implemented higher levels of intellectual property protection. One audience member questioned whether this development stemmed from the NIEs' perception that the benefits of rewarding innovation in their countries now outweigh the costs of having to pay for intellectual property, or whether the motivating factor was the belief that the loss of income due to U.S. trade retaliation would offset the opportunities and benefits of "free riding" on foreign technology. As his essay in Chapter 6 indicates, Carlos Primo Braga believes that both factors played a role. At the conference, he added that although bilateral pressure from the United States has been credited with success in bringing the NIEs closer to the standards of industrialized countries, this success may have been helped by an internal push for increased IPR protection, and vice versa. In the case of Brazil, the efforts of domestic parties to acquire greater protection for biotechnology products was accelerated by the threat

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Global Dimensions of Intellectual Property Rights in Science and Technology of retaliatory U.S. trade action in response to alleged infringement of protection for pharmaceutical products. During the conference discussion, Deepak Nayyar suggested that transnational corporations (TNCs) operating in developing countries are also using their influence to encourage stronger IPR laws. The incentive for stronger laws may be attributed to technological progress in telecommunications and computers that have allowed TNCs greater flexibility in the international marketplace. The ability to easily transfer and access the data of subsidiaries around the globe gives a parent company the power of centralization. The more consistent IPR regimes worldwide, the easier it becomes to treat the products of subsidiaries as if they were all in one place. The global dispersion of production, distribution, and marketing has given transnational companies an opportunity to take advantage of the world economy and its resources. Standardization of IPR laws is a further step toward the ''globalization" of markets, the removal of uncertainty in transactions, and the elimination of requirements for special strategies for each country or market. One discussant at the conference wondered if yesterday's NIEs are today's industrialized countries because they had a lax IPR regime in the past. In an environment in which IPR protection is weak, a nation could theoretically move along the technology learning curve without paying for foreign technology, while attracting capital investment in less costly reproduction capabilities (because of the absence of R&D costs). The accumulation of capital and expertise can push a country into the next stage of industrialization. It has also been noted that the NIEs have instituted stronger levels of protection only since their level of industrial development has risen, a fact that supports the argument that, until there is innovation and development, there is no need for IPR protection. Carlos Primo Braga responded that despite the appearance, there is no evidence that the absence of strong IPRs has somehow contributed to or propelled economic growth and development. Bryan Harris added that conclusions about the effects of IPR laws are difficult to draw because some countries do not have intellectual property laws, but others have laws yet do not enforce them. It is not clear whether this difference has any differential effect on a nation's growth. James Armstrong was asked at the conference if there was a similarity between Paul David's thesis that national IPR regimes have developed in response to the particular development of industries and the recent reciprocal criticisms of the United States and Japan, each of which has claimed that the patent system of the other is geared to protecting and promoting local technology over foreign technology. Mr. Armstrong argued against this notion, saying that he could see no basic differences between the standards of patentability in the two countries. He acknowledged, however, that the two nations approach IPR legal issues differently, a by-product of

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Global Dimensions of Intellectual Property Rights in Science and Technology the fact that the Japanese system is "adopted" from Germany, whereas the U.S. system is rooted in the long history of common law. One observer from the Arab Society for the Protection of Industrial Property noted that harmonization among the United States, Japan, and the EC seemed the most feasible, not because there are fewer disagreements or differences in their IPR systems, but because they collectively possess nearly all of the technological capacity in the world and have a natural, common interest in establishing strong protection for their assets. By the same logic, he argued, it should not be surprising that there is little incentive for the rest of the world to embrace this level of protection, since the majority of the world operates under completely different circumstances. Many participants at the conference thought that the different technological and economic circumstances among countries must at least be acknowledged by the industrialized world as it pushes for a uniform system. To the lesser developed countries (LDCs), granting individuals or companies strong property rights to new varieties of grain seems counterintuitive when hunger is a basic problem for most of them. On the other hand, as LDCs have watched foreign pharmaceutical companies turn native germ plasm into valuable new medications beyond the purchasing power of their citizens, they have sought to gain recognition for the concept of "property rights" in local gene pools by the country of origin. As one audience member asked, "Can we distinguish between intellectual property rights for a razor blade and for a rice strain simply keeping in mind that food crops are closely linked to basic human rights, which are perhaps not an intellectual property right but are still a right?" The LDCs have difficulty taking the leap of faith needed to accept the logic that by extending private rights, temporary monopolies, and monetary incentives to individuals, the public ultimately will benefit. The challenge of addressing LDC concerns in an international IPR dialogue prompted a discussion on the suitability of the GATT negotiations on Trade Related Aspects of Intellectual Property Rights (TRIPS) to serve as the forum in which to move toward uniformity. Given the origins of GATT as a mechanism for trade enhancement among industrialized countries, and the fact that the industrialized countries have controlled the agenda and rulemaking process of GATT ever since its establishment, it may not be a suitable forum for a North-South discussion. On the other hand, it was contended that because these multilateral talks address trade issues in a variety of sectors, the GATT presents an opportunity to make cross-sectoral agreements to the economic benefit of all parties. The success of GATT is dependent, however, on agreement across all sectors. Given the difficulty of justifying to the LDCs on an empirical basis the benefits of specifics of the Dunkel draft in the TRIPS negotiation, the industrialized countries may have to be willing to make trade-offs in terms

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Global Dimensions of Intellectual Property Rights in Science and Technology of market access or agricultural concessions to gain the acceptance of stronger IPRs by LDCs. The improbability of such concessions leaves open the prospect of losing all of the gains made toward agreement during the IPR negotiations. A member of the academic community suggested that because the TRIPS proposal is based on the straightforward imposition of uniform standards, rather than on principles or stage-of-development considerations, its rigidity may be its weakest aspect. During the conference discussion, Paul David added that although there are theoretical arguments in favor of standardization, the creation of standards based on consensus alone may result in a regime that is inflexible and unadaptive to changes in technology and in international business relations. Moreover, he added, "the same laws in different cultural and economic environments do not imply the economic effects will be the same in all of those countries." He suggested that James Armstrong's assessment of the situation between the United States and Japan was a case in point, that is, similar laws have a different effect. As a possible alternative solution, he proposed a more flexible, constitution-like framework, which could be interpreted by the courts. Another option suggested was the adoption of a convention of "adequate and effective protection" for those issues not agreed to thus far in the TRIPS negotiations. The boundaries of what constitutes adequate and effective protection would be decided for each country by a special GATT committee, which would take into account stages of economic development. The ambiguity that these various alternatives imply, however, may not be acceptable to the industrialized countries, whose principal goal is the assurance of stronger protection for IPRs internationally. To craft an agreement without the provisions of strong standards is, as Jacques Gorlin commented, "to put structure above substance." The "fast-track" authority for U.S. congressional ratification of a GATT agreement will expire in 1993. If the GATT negotiations fail to produce a satisfactory TRIPS agreement, the United States will return to its plan of bilateral pressure, a method it has found successful but slow, and one that raises international resentments that may fuel further resistance to broad, multilateral solutions.