Intellectual property can be among the most contentious issues that must be addressed when putting together an international collaboration, but it is one that nonetheless must be solved for such collaborations to move forward with the necessary trust between collaborators. This session explores several important questions regarding intellectual property, including:
- How does trade policy influence intellectual property rights globally?
- What are the different types of intellectual property and how is each type protected?
- How do differing cultural attitudes toward ownership of ideas and intellectual property affect cross-cultural partnerships?
- How is intellectual property protected in a researcher’s home country, and how do different enforcement mechanisms influence collaboration?
Three speakers addressed these questions in a session moderated by James Casey, Interim Director of Pre-Award Services at the University of North Carolina at Chapel Hill. Julissa Reynoso, U.S. Ambassador to the Oriental Republic of Uruguay, discussed the challenges of developing intellectual property rights protections that meet international standards. Robert Stoll, Partner at Drinker Biddle & Reath LLP, spoke about intellectual property developments around the world and Daniel Satinsky, Vice President for Business Development at Foresight Science & Technology, described the effect of culture on the actual practice of intellectual property law and participation in the marketplace.
Presenter: Julissa Reynoso, U.S. Ambassador to the Oriental Republic of Uruguay
As the global economy becomes more inclusive, interconnected, and interdependent, entities of all types, ranging from individuals to companies to nation-
al governments, will become increasingly reliant for their prosperity and effectiveness on the intellectual property that they create, said Julissa Reynoso. “Intellectual property is as never before the engine of economic prosperity, making the subsequent protection of that property via international negotiated standards and enforcement more important than ever,” said Ambassador Reynoso.
For decades, the United States has played a key role in the development of these rules and regulations and still considers the protection of intellectual property to be a top priority in its international relations with other governments, said Ambassador Reynoso. In the post-World War II era, the regulation and enforcement of international intellectual property rights was tasked to an agency within the United Nations known as the World Intellectual Property Organization (WIPO). Despite WIPO’s establishment in 1967, decades would pass until Congress decided to make intellectual property rights a focus of U.S. foreign policy.
In 1988, the Office of the U.S. Trade Representative was officially granted the responsibility of identifying countries that did not offer fair and equitable market access to the U.S. Weak or nonexistent regulations on intellectual property rights in foreign nations would be considered barriers to trade in the eyes of U.S. agencies, with those governments subject to penalties and U.S. sanctions. The U.S. Trade Representative has since been required to publish an annual report categorizing all countries in the world based on the effectiveness of their intellectual property rights regulation and enforcement, known as the “Special 301 Report.”
Uruguay, noted Ambassador Reynoso, has played an important role in the global development of intellectual property rights. Among the principal accords reached during the so-called Uruguay Round of negotiations that led to the creation of the World Trade Organization (WTO) was an agreement on trade-related aspects of intellectual property rights (TRIPS). This agreement was the first successful introduction of enforceable intellectual property rights law in the international system.
Perhaps because of its modern infrastructure, busy ports, educated population, strong democracy, relative lack of corruption, and large middle class, Uruguay is considered an excellent destination for international and U.S. business investment. Immediately following World War II, the United States made a concerted effort to strengthen its relationship with Uruguay by signing multiple treaties related to security cooperation and scientific partnerships. “Over the latter half of the 20th century, Uruguay remained a strategic ally of the United States as well as strong contributor to the international community in many aspects,” said Ambassador Reynoso.
However, when the TRIPS agreement was enacted, Uruguay was among the countries considered to have the most notable deficiencies in the spheres of intellectual property rights protection and regulation. During a 5-year grace
period established by the WTO to allow developing nations to conform to the TRIPS requirements, the Uruguayan government worked diligently to pass legislation to govern trademarks and patents. Despite some progress from 1998 to 1999, Uruguay was placed on the so-called Watch List that the U.S. Trade Representative developed in 1999 as a result of continuing noncompliance with TRIPS requirements and governing trade law among other issues. Uruguay was downgraded further to a Priority Watch List, an even harsher category, in 2001 and 2002 as necessary implementing legislation continued to be delayed in the Uruguayan Congress. At around the same time, Uruguay also confronted a serious economic crisis that affected most of South America, when neighboring Argentina defaulted on its international debt obligations and collapsed into a severe financial crisis.
Prompted by this economic crisis, Uruguay moved to diversify its trade and investment partners beyond its neighbors and worked hard to integrate itself more fully into the new international trade system. As a result, the country finally passed the necessary legislation to overhaul its outdated laws regarding intellectual property rights. With a modern intellectual property rights framework in place, the American scientific community began lobbying U.S. authorities to open discussions aimed at easing collaborations between the two nations. By 2006, Uruguay was removed from the Watch List—one of the few countries in Latin America to ever do so—and in 2008 the U.S./Uruguay Science and Technology Agreement was signed, completing a 5-year run of diplomatic breakthroughs that produced a bilateral investment treaty and a trade investment framework agreement.
As a result of these and subsequent agreements, Uruguay has engaged in numerous collaborations with U.S. research institutions and government science agencies that Reynoso characterized as producing landmark achievements in cooperation with the Uruguayan education and research communities. These collaborations have strengthened Uruguay’s innovation capacities and promoted research advances across a wide array of areas. All of these developments, said Ambassador Reynoso, were made possible by Uruguay’s decision to comply with international standards that not only protect other nations’ intellectual property rights but its rights, too.
Protection of intellectual property rights will remain a key to sustaining global economic integration and prosperity, said Ambassador Reynoso. Today, however, U.S. companies lose billions of dollars annually because of theft of intellectual property rights, and networks engaging in the trade of pirated goods have never been more profitable. In addition, the rise of the Internet as an engine of economic growth is bringing with it a new set of challenges related to the protection of intellectual property rights that are just now being studied and addressed. “The WTO has a new challenge, which is how to keep up with the evolving world in which we live,” said Ambassador Reynoso. The WTO is
engaging in this and other issues, such as the right of developing nations to produce generic versions of life-saving drugs, to ensure that proper protections exist that provide a balance between development of new technologies and protections for private owners and private entities that have a stake in these new technologies and new sciences.
Ambassador Reynoso noted in response to a question that, while Uruguay does not have a significant indigenous population, other countries in South America do. It is important, she said, to ensure that the cultural norms of these populations and the rules that they feel are important in their communities are adequately supported, respected, and protected while at the same time ensuring that these populations understand that the basic rules of intellectual property rights also have to be enforced for the entire country to be in compliance with international standards. “That has been the balance that a lot of these countries have to deal with in Latin America,” she said.
Presenter: Robert Stoll, Partner at Drinker Biddle & Reath LLP
For Robert Stoll, a former Commissioner of the U.S. Patent and Trademark Office and U.S. representative to WIPO, cultural issues have played a critical role in every treaty he has negotiated and every bilateral agreement he has helped develop. Cultural tension is problematic, he said, because people from different cultures are not listening to one another. One problem he sees frequently in his current role advising universities and companies on matters of intellectual property rights is the culture of publication that dominates U.S. universities. In most countries in the world, patent rights are lost once a discovery is revealed in any public forum, such as a publication or a lecture. This issue can be particularly relevant in international collaborations where some collaborators may be more aware than others of patent issues, particularly because there are many forms of intellectual property about which most researchers know very little.
Briefly, Stoll explained how patents, trademarks, and copyrights differ. Patents are the reduction to practice of a concept. Trademarks represent the source of a good, and they can range from a name to a design feature. Copyrights represent an expression—they do not protect an underlying issue, but merely the expression of that issue. He also noted that when it comes to negotiating agreements related to any of these forms of intellectual property, trust between potential partners is critical. It is also essential when it comes to negotiating agreements between countries to find ways to ensure that both sides benefit from an agreement and that neither side feels inferior. Stoll found that a key to establishing trust and equal footing was to convince his negotiating
counterparts that their country needs to protect its intellectual property just as much as the United States does and that entrepreneurial money goes to those countries that protect their intellectual property.
Protecting traditional knowledge and local biodiversity are complex problems that have risen to prominence in intellectual property circles, said Stoll. He believes that there need to be mechanisms in place to compensate countries for traditional knowledge that becomes useful on a broader scale or when an indigenous plant or animal yields genetic information that leads to the discovery of a new drug. These are complicated matters, but Stoll believes that it is critical for the United States to take a leading role in discussing these issues.
Culture is also important on the U.S. side of negotiations, Stoll noted. Contrary to popular belief, American pharmaceutical companies are not against letting developing nations produce generic versions of life saving drugs for their citizens. Their key concern is that these drugs are not reaching their intended users but instead find their way into the so-called gray market, in which generic drugs produced for use in developing nations end up being sold in the United States. Stoll concluded his remarks by noting that the best way for U.S. universities and companies to realize all of the benefits of their intellectual property is to use their abilities to help their collaborators grow their own understanding and capabilities.
Stoll noted in the ensuing discussion that WIPO is a good source for models, templates, and recommended practices that can be used to structure agreements concerning intellectual property rights. Not only are these models based on successful examples of collaboration, but they have the imprimatur of being agreed to by all of WIPO’s member states.
Presenter: Daniel Satinsky, Vice President for Business Development at Foresight Science & Technology
While the formal regulation of intellectual property rights is well-established in international law, culture colors the actual practice of intellectual property law and participation in the marketplace, said Daniel Satinsky. As an example, he discussed his experiences working with individual scientists and institutions in Russia. Until recently, he said, there was no way to determine who owned the intellectual property that was developed in Russian universities. Russia has since passed the equivalent of the U.S. Bayh-Dole Act1 and, as a
1The Bayh-Dole Act, also known as the Patent and Trademark Law Amendments Act, gives universities, not-for-profits, and small businesses the rights to intellectual property generated using federal funding (in most cases). This Act was intended to increase the commercialization of inventions resulting from federally funded research.
result, it is now possible to sort out that question with some due diligence; but it remains an important issue to address when contemplating collaboration with a Russian scientist or institution.
From a historical perspective, the older generation of Russian scientists has the attitude that the use of science for practical matters is beneath them—those who disagreed with this outlook largely fled the country for the United States. Today, Satinsky explained, there is a new generation of scientists who are trying to sort out this issue for themselves, both in terms of legislation and how they relate to an international market for their research. Historical experience also leads to suspicion on the part of Russian researchers that the United States wants to collaborate in order to steal Russia’s science. Edward Snow-den’s 2013 revelations about the National Security Agency’s information collection practices have increased the level of suspicion and mistrust toward American researchers.
On the other hand, Russian researchers do trust the intellectual property rights systems of other countries more than that of their own country. Satinsky said that many Russian scientists have told him that they keep their best work to themselves out of fear that someone will steal it despite getting patent protection. “There is not a level of trust of the internal patent system, so the best partner is a foreign partner because the foreign partner will obey the law,” he explained. In that respect, Satinsky agreed with Stoll that it is in everyone’s best interest that collaborating nations see the value in enforcing their intellectual property laws. He noted that one of his company’s clients, a Russian software outsourcing firm, was trying to work with Western clients and despite impeccable qualifications was not having much success. The problem was that Western companies feared that their software would be stolen in Russia. In this case, the company had to demonstrate that while formal protection of intellectual property might be lax in Russia, its internal culture would enforce an informal protection of intellectual property. The company recognized that even one instance of software being stolen would be enough to put them out of business due to a lack of trust. Satinsky explained that the value an organization places on the protection of intellectual property directly correlates to the informal protection of intellectual property that said organization will provide. In some instances, the informal protection of intellectual property provides the necessary level of trust that the formal, legal protections do not provide.
One challenge to developing international collaborations that Satinsky has experienced arises from differing perceptions of value. It is important, he said, to establish an objective value for any technology and for all parties to the agreement to truly understand all of the parameters that go into determining value. “It is important to understand where a technology fits in a chain of value that the technology is creating,” said Satinsky. The value of a piece of technology increases as it becomes more developed and ready for market. The amount
of work necessary to transition a technology from the laboratory to the market is often overlooked when a scientist estimates the value of a piece of technology. Understanding about how value changes as a technology gets closer to market is growing among scientists outside of the United States, but the difference between perceived and actual value continues to be a challenge, given that value depends on culture as much as economics. Because international technology markets are not fully developed yet, it can be difficult, for example, to understand what royalty rates are appropriate for a given technology. Again, trust is an important factor when negotiating such details. “Everybody’s interests have to be represented,” Satinsky said in closing his remarks.