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Introduction

As Paul David states in Chapter 2, intellectual property rights have traditionally been considered a stimulus to useful innovation and economic growth. The process of scientific and technological advance has, however, changed in ways that raise questions as to whether IPRs remain effective instruments for achieving these objectives. The papers in this section address the changing nature of scientific and technological advance and the implications of those changes for the role of IPRs in organizations in different industries, economic sectors, and countries.

With the global diffusion of technological capability, competition in technology-intensive goods and piracy of intellectual property have increased. The rising cost of scientific and technological development has increased the importance of IPR protection, as well as the incentive to engage in cooperative R&D. These and a variety of other factors associated with scientific and technological change that affect the need for and the effectiveness of IPR protection are discussed in this section.

Changes in the nature of scientific and technological advance and their effects on the role of IPRs have important implications for organizations involved with technology. These implications may vary depending on the industry, sector of the economy, or country. For example, now that universities are much more heavily involved in the commercialization of research, they are dealing with IPRs and are affected by international IPR issues. What are the implications for the role of IPRs in the corporate strategy of companies in different industries and in different countries? How do changing



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Global Dimensions of Intellectual Property Rights in Science and Technology Introduction As Paul David states in Chapter 2, intellectual property rights have traditionally been considered a stimulus to useful innovation and economic growth. The process of scientific and technological advance has, however, changed in ways that raise questions as to whether IPRs remain effective instruments for achieving these objectives. The papers in this section address the changing nature of scientific and technological advance and the implications of those changes for the role of IPRs in organizations in different industries, economic sectors, and countries. With the global diffusion of technological capability, competition in technology-intensive goods and piracy of intellectual property have increased. The rising cost of scientific and technological development has increased the importance of IPR protection, as well as the incentive to engage in cooperative R&D. These and a variety of other factors associated with scientific and technological change that affect the need for and the effectiveness of IPR protection are discussed in this section. Changes in the nature of scientific and technological advance and their effects on the role of IPRs have important implications for organizations involved with technology. These implications may vary depending on the industry, sector of the economy, or country. For example, now that universities are much more heavily involved in the commercialization of research, they are dealing with IPRs and are affected by international IPR issues. What are the implications for the role of IPRs in the corporate strategy of companies in different industries and in different countries? How do changing

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Global Dimensions of Intellectual Property Rights in Science and Technology science and technology, and changing international IPR regimes, relate to the missions of the federal government? The chapters in this section address these issues. In Chapter 8, John Armstrong discusses in detail the trends in global science and technology and what they mean for intellectual property systems. He identifies and describes three trends: (1) science will continue to provide an increasing number of discoveries; (2) research topics will continue to proliferate and the conduct of research will become globalized; and (3) short, quick steps to product application will be at a premium. From these trends he discerns two general principles: (1) in the face of continuing scientific and technological change, the best course of action will be to rely on flexible adaptation of existing, basic IPR concepts; and (2) since research, development, and invention are increasingly global, IPR systems should also be globalized. In Chapter 9, three discussants describe the implications of the trends in IPRs for organizations in different economic sectors. John Preston describes the nature of his university's interest in intellectual property and how that drives the use of IPRs in licensing. Bruce Merrifield addresses implications for the government sector. He discusses the opportunities and challenges that exist for using advanced technology to expand economies and improve the quality of life around the world. He argues that the federal government has an important role to play in providing incentives and that intellectual property protection is required for the entrepreneurial function to thrive. George McKinney III discusses the gap between historical/theoretical models of IPRs and the real world in which U.S. corporations must operate. He raises several issues that he believes illustrate improvements that are needed in the IPR system. In Chapter 10, representatives from companies in different industries and different countries describe the implications of recent changes in science, technology, and IPRs for corporate strategy. Otto Stamm attests to the importance of strong patent protection for continued development of new drugs. In the face of increasing development costs, government cost controls, and imitative products, he predicts that the pharmaceutical industry will be increasingly unable to afford a globally oriented marketing strategy for new products unless worldwide protection of pharmaceuticals is achieved. Michiyuki Uenohara addresses the issue of the higher license fees being charged by some U.S. companies in those industries. He criticizes the higher fees on the basis that they obstruct advancement of the public welfare by contributing to higher product costs. He argues that it is time to restore the original purpose of intellectual property law, which he views as "to legally protect the inventor's right in order to promote the application of such valuable intellectual creations for the benefit of the public welfare." Antonio Medina Mora Icaza discusses the implications of recent changes

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Global Dimensions of Intellectual Property Rights in Science and Technology in the Mexican copyright law for the Mexican software industry. The Mexican software industry association sought modifications of Mexican copyright law to improve the protection of software, and in July 1991, those modifications were approved. In Mr. Medina Mora's view, strengthening intellectual property protection is a strategic move for developing countries such as Mexico, a move that can build the competitiveness of a nation's industries and gain the trust of foreign investors. W.L. Keefauver describes how AT&T's use of intellectual property evolved over the life of the company. In the early years, AT&T used patents as entrepreneurial assets to establish markets. Later, as a heavily regulated enterprise, it used IPRs to obtain "freedom of design" through cross-licensing with other firms. With divestiture and the globalization of markets, AT&T has again entered international competition, and its IPR and licensing practices are being tailored to specific competitive strategies. This trend seems likely to continue, and IPRs in software have the potential of becoming the most important of all. The following chapters illustrate that one of the principal effects of recent changes in the nature of scientific and technological advance has been to increase the importance of IPRs to organizations involved with technology, whether they be in industry, academia, or government. They also show that there are differences of opinion on the appropriate and adequate protection of intellectual property and on whether the present IPR system is functioning adequately, and that those differences do not correspond simply to sectoral, industrial, or national lines.