Global Dimensions of Intellectual Property Rights in Science and Technology (1993)

We live today in a world in which the economic health of nations and the competitiveness of firms is determined largely by the ability to develop, commercialize, and most importantly, to appropriate (or capture) the economic benefits from scientific and technological (S&T) innovations. Intellectual property rights (IPRs), such as patents and copyrights, are an important means used by firms to help protect their investments in innovation. They are legal instruments that have been used by governments for centuries to encourage industrial development and economic growth.

IPRs protect investments in innovation by granting the innovator a temporary monopoly on the use of the innovation. This prevents rapid imitation that could cut into the innovator's returns and decrease the incentive to innovate. By restricting imitation, however, IPRs arguably raise the cost of the new technology and restrict its availability. This may, in turn, retard further progress in the technology by preventing other firms from developing new innovations or improvements that build on the original innovation in a cumulative way. If the new technology has productivity-enhancing effects when used in economic activity, these too may be retarded by the protection of the original innovation.

Thus, IPRs inherently embody a policy conflict between the objective of providing an incentive to technological innovation and the objective of encouraging the rapid diffusion of new technology and the accumulation of technological knowledge. These competing objectives also represent powerful, competing economic interests—from R&D-intensive and non-R&D-in-

tensive firms at one level, to the industrialized, newly industrialized, and developing countries at another.

Governments have generally recognized, at least implicitly, the tradeoffs that are involved in IPR laws, and each nation has established national IPR systems that attempt to strike a balance between competing objectives that is deemed appropriate for its national economic, political, and social context. It is important to note in this regard that IPRs are primarily a matter of national jurisdiction (i.e., the protection offered to an innovation is governed by the laws of the nation in which the innovation is made, used, or sold). Thus, for example, a patent obtained from the U.S. Patent and Trademark Office provides protection only within the territory of the United States. If a company is doing business in another country, it must file for and obtain IPR protection in that country. Moreover, the protection offered by that country's laws in many cases is not as strong as U.S. IPR protection. Although international IPR conventions exist, they do not establish specific rights. Instead, the extant international agreements attempt merely to ensure that, in any given country, foreign inventors receive the same rights as those granted to local inventors.

The protection offered by IPRs has never been complete, and for that reason many observers have criticized the idea that they grant even a temporary monopoly. Moreover, there has always been a tendency for some countries to seek to use IPR laws to favor domestic firms over foreign ones. (The major international IPR conventions are aimed at controlling this behavior in the interest of encouraging international trade.) Recent changes in global science, technology, trade, and economic development have, however, strained even further the effectiveness of IPRs in protecting S&T innovations.

This volume focuses on the nature of these changes, the challenges they present for national and international IPR systems, and their implications for science and technology. The Office of International Affairs of the National Research Council undertook an examination of the global dimensions of intellectual property rights in science and technology in response to increasing concern expressed by important segments of U.S. industry—and, to a lesser extent, the U.S. university research community—about the lack of uniform international treatment of IPRs and the difficulty of protecting their innovations from imitation. This examination took the form of a major conference, the proceedings of which are published in this volume.

A report of the U.S. International Trade Commission (1988:viii) estimated that the aggregate losses to U.S. industry from inadequate intellectual property protection in other countries in 1986 were $23.8 billion, or 2.7 percent of total sales. Much of the recent concern has focused on the developing world, particularly on the so-called newly industrializing countries (NICs), where patent and copyright laws have been weak or, in some cases, nonexistent. Unauthorized expropriation of intellectual property in

the developing world has resulted from a combination of individual actions (i.e., piracy) and national economic policies (i.e., protectionism).

In an effort to accelerate their rate of economic development and increase their level of wealth in the short term, some governments have, for example, conveniently looked the other way when products or technologies are copied or used without permission. Many of these governments argue that some degree of protection from the need to pay for the use of ideas or technologies developed elsewhere is required if they are successfully to promote the maturation of so-called infant industries, whereas others contend that their countries cannot afford to pay the monopoly prices charged for technology protected by IPRs. There is also concern that some of the United States' major trading partners, notably Japan, may be using their IPR systems to deprive U.S. companies of their intellectual property.

As a result of these concerns, IPR issues have been elevated to high political levels within the Group of Seven (G-7) advanced industrialized countries, as demonstrated by the fact that they were an explicit agenda item at a recent G-7 Economic Summit meeting. IPR issues have also been a major point of discussion (and disagreement) in the so-called Uruguay Round of trade negotiations within the General Agreement on Tariffs and Trade (GATT).

The danger posed by inadequate IPR protection is that economic losses suffered by innovating firms could lead to a reduction in the rate of industrial innovation in the United States and other technologically advanced countries capable of generating innovations. A lower rate of innovation could, in turn, result in slower world economic growth, which would hurt all countries. Despite this argument, however, NICs and less developed countries (LDCs) that might benefit from more robust world economic growth have been reluctant to accept the premise that stronger IPR protection is in their long-term national interest.

This apparent paradox reflects the complexities, conflicts, and uncertainties surrounding IPR issues as they pertain to science and technology. The central purpose of the conference reported here was to identify and illuminate the international IPR issues of concern to the U.S. and international S&T communities and, in so doing, to contribute to the process of public education and debate that must guide policymaking in this area. The primary perspective offered on these issues is that of the United States, and the volume may be judged a success if it contributes to the crafting of a U.S. approach to international IPR issues that will serve the national interest. It is obvious, however, that in today's world of scientific, technological, and economic interdependence, the U.S. national interest in the global IPR system cannot be considered in isolation from the interests of other nations. Therefore, the volume also includes viewpoints of other nations as well.

The rest of this chapter introduces some of the major issues as background for the in-depth discussions that follow. It also suggests a set of themes and questions that may be useful in considering the policy implications of the following chapters.

Today, scientific and technological changes are occurring so rapidly and across such a broad spectrum that they are creating unprecedented pressures for change in intellectual property protection in the United States and abroad. One of the major S&T trends that causes increased demand for effective intellectual property protection is the rising cost of R&D and other innovation-related activities. In the pharmaceutical industry, for example, an average expenditure of more than $231 million is required to discover, test, and secure marketing approval for a new drug in the United States (Pharmaceutical Manufacturers Association, 1992). To recoup such substantial investments, a company must be able to market the resulting products globally, which makes the worldwide intellectual property protection critical.

At the same time, product life cycles in some IPR-sensitive industries are shrinking dramatically, in some cases to 18 months or less. This time compression, in turn, reduces the period in which R&D and innovation costs can be recouped and puts a premium on strong and rapid protection of the innovation. Changes in technology, however, occasionally result in inventions that do not fit the old categories of patentable subject matter or cannot meet other requirements for patentability in certain countries. Biotechnology inventions (particularly microorganisms), for example, do not lend themselves to a written disclosure that enables their reproduction. Computer programs are perceived to have the characteristics of mathematical formulas, which are not patentable in some countries. Semiconductor chip designs are perceived as not meeting the U.S. criteria of novelty and nonobviousness.

Scientific discoveries, which are of increasing economic importance, also face difficulties when it comes to obtaining protection. Patent systems traditionally have denied protection to such discoveries. Moreover, the universities and research institutions in which basic scientific research is performed have traditionally put a premium on early dissemination of results, which is also at odds with the requirements for obtaining patents. For example, in many countries, any disclosure of an invention before a patent application has been filed precludes patentability. In one important case, the Cohen-Boyer patent on the basic recombinant DNA technique was granted in the United States, but the discoveries were denied protection in Europe and thereby suffered a considerable loss of royalties, because of their earlier publication (Benko, 1987:29-30).

Changes in technology also have blurred the distinction between inventions, which have been traditionally protected by patents, and literary works, which have been traditionally protected by copyrights. A computer program, for example, may be regarded as a literary work and a functional work, because it gives instructions to a computer to make it perform, a function. In the United States, computer programs are protected primarily by copyrights, although in recent years the U.S. Patent and Trademark Office has granted an increasing number of patents for computer programs.

Technological changes also can make copying and production of R&D intensive products cheaper, quicker, and in many cases, harder to detect. Digital audio recording, for example, makes it possible to reproduce thousands of perfect copies of the original. This, in turn, makes it more difficult for owners to assert their right to control their inventions through the traditional self-enforcement mechanisms. In some cases, technological ''fixes" may be possible to combat copying (e.g., a piece of software that must be replicated in order to "unlock" a protected use), but these are likely to have only limited effectiveness as a general solution.

These and other challenges to the existing IPR regime that are created by the rapid advance of science and technology are discussed in depth in this volume.

Some of the most significant emerging technologies—including those in the areas of information, electronics, communications, and the new biotechnology—do not fit neatly within existing categories of intellectual property rights.¹ They may force a reevaluation of current approaches to protection at national and international levels. Although detailed case studies of these technologies—and the adaptation of IPRs in response to them—are presented later in this volume, a brief background summary is provided here.

Computer software is expensive to develop but relatively easy to copy, conditions that make it highly vulnerable to infringement of intellectual property rights. The issue of how to protect computer software was first

acted on in the United States, where protracted debate and many studies considered such alternatives as patents, copyrights, and sui generis intellectual property rights.

Proponents of copyright protection for computer software argue that it is simply another form of writing brought about by technical change, as were sound recordings and motion pictures. Proponents of patent protection argue that the mental and financial effort required to produce software and the functional uses of software more closely resemble inventive activity rather than artistic creation, and thus patents are the more appropriate analogy. Still others argue for a third approach, some form of sui generis protection (i.e., a unique form of protection for IPRs in computer programs), which might possibly have characteristics of both copyright and patent law.

In the United States, the debate resulted in the decision to protect computer software primarily under the copyright laws. In 1980, the Copyright Act of 1976 was amended explicitly to grant copyright protection for software. The United States also has been encouraging other nations to protect computer software under copyright laws. Important questions remain, however, about the adequacy of copyright protection because of the fundamental limitations of copyright, which protects the form of expression of an idea but not the idea itself. Perhaps for this reason, as pointed out in Chapter 12 by Pamela Samuelson, the precise nature of protection for computer programs is still not certain in some countries, even though it may be covered under their copyright laws. Moreover, to complicate matters even further, the U.S. Patent and Trademark Office has been granting a growing number of patents for computer programs.

Semiconductor chips pose somewhat similar problems with respect to existing forms of intellectual property protection. Like computer software development, designing and preparing masks for chip manufacture are expensive, but reproducing masks is relatively simple and inexpensive. The basic technology for manufacturing chips is well established, so it is difficult to establish novelty or nonobviousness as is generally necessary for patent protection. Yet, a chip design is usually too functional to meet the requirements for copyright.

In the case of semiconductor chips, the U.S. Congress approved a sui generis form of protection in the Semiconductor Chip Protection Act of 1984. The legislation borrows from copyright law in its protection of reproduction, importation, and distribution rights, and from patent law in granting the right to exclude others from manufacturing and selling. The term of protection is only 10 years, which is shorter than for either patents or copyrights.

The main forms of intellectual property that are relevant to inventors and companies working in the new biotechnology—for example, rDNA, cell fusion, and novel bioprocessing techniques—are patents, plant breeders' rights, and trade secrets. Biological and medical inventions are excluded from patent protection in many countries. Whereas U.S. patent law, as a result of Diamond v. Chakrabarty, allows for the patenting of a broad range of subject matter, including plants and animals, the laws in Europe and Japan generally do not. The European Patent Convention, for example, prohibits patent protection for "plant or animal varieties or essentially biological processes for the production of plants and animals" (Benko, 1987:44).

The new biotechnology is affected particularly by the patent doctrine that excludes scientific discoveries, because of the increasing frequency with which such discoveries can be turned quickly into commercial products. Moreover, because academic scientists are playing such an important role in its development, biotechnology is affected particularly by differing criteria of novelty as reflected in the variable length of grace periods. Some universities, however, require research results to be published within 6 months of completion of the research, which may not be long enough to allow a patent search and application process to be completed. On the other hand, some of the universities that have developed major research support relationships with private industry now permit longer delays between discovery and publication. Previous publication is a bar to patentability in many countries, as in the case of the Cohen-Boyer patent mentioned earlier.

In many countries, a deposit of the microorganism is required to obtain protection.² In countries that publish unexamined patent applications (the majority of developed countries), deposited cultures are usually released to the public at the same time—generally 18 months after the application is filed. The culture thus can become publicly available before any patent rights have been granted.³ This effectively negates the potential for protection under trade secret law (which requires the inventor to take measures to keep the invention secret) if a patent is not issued. As a recent Office of Technology Assessment (OTA, 1984:389) report noted: "In essence . . . the

holder of a patent on a microorganism that produces a commercially useful polypeptide such as insulin must turn his or her 'factory' (i.e. the microorganism) over to competitors."

In most countries, new plant varieties fall within the domain of plant variety rights, or plant breeders' rights, a right established to provide protection for plant products.⁴ The scope of protection of breeders' rights falls short of patent protection, however, because the breeder's prior authorization is not required for some important uses of the new plant variety. New plant varieties arising from genetic engineering methods would appear to have some characteristics of patentability—for example, they may be the subject of written description and repeatable, as required by patent law. However, double protection (e.g., plant variety protection and patent protection) is prohibited under the International Union for the Protection of New Varieties of Plants (Benko, 1987:44-45).

Increasing levels of infringement have made IPR issues highly visible in recent years; not only does the level of infringement appear to be rising, but there has also been a change in the industries affected. Whereas, in the past, manufacturing of fashion types of consumer goods was primarily affected, today producers of a broad range of industrial goods, including products and processes in such high-technology areas as computer hardware and software, biotechnology, and pharmaceuticals, are suffering significant economic losses due to infringement (U.S. International Trade Commission, 1984:ix). The losses threaten the incentive of firms in the involved industries to develop and introduce technological innovations.

The rise and spread of infringement of intellectual property rights have a number of causes. First, there is significant profit to be obtained from counterfeiting. Second, in many cases there are only limited risks because of weak intellectual property laws, weak enforcement, or both, and it is difficult to detect infringement. Third, infringement is also becoming significantly easier and cheaper in many instances, often because of technological changes that place the means for copying and producing in the hands of many. This has happened in the case of audio- and videotapes, for example, and in software for personal computers. Finally, the governments of some developing countries apparently allow infringement to flourish within

their borders because such activities contribute to their national economic development.

The definition of infringement varies from nation to nation, depending on a nation's intellectual property laws. Thus, what constitutes infringement in the United States may not be infringement under another country's laws. Often, what U.S. companies find objectionable is not really infringement, but rather the low level of protection afforded by some countries' intellectual property laws and enforcement, compared with those of the United States and other industrialized countries.

The terms infringement, piracy, and counterfeiting are often used interchangeably, but the policy debate would be better served by observing the distinctions among them. Infringement, which refers to the transgression of a legally recognized right that is usually litigable in the courts, is the term generally used in relation to the violation of most forms of intellectual property rights, except for trade secrets, in which case violation is termed misappropriation. In this country, patent infringement is defined as the unauthorized making, using, or selling of any patented invention within the United States (OTA, 1984:390). Piracy, although not a legal term of art, refers primarily to unauthorized reproduction for commercial gain of literary, musical, artistic, and other copyright works,⁵ but may also be used in some cases in the context of trademarked or patented works. Counterfeiting is a term used most often to refer to unauthorized duplication of a product's trademark to give a similar appearance to a specific product, but it may also be said to exist when a clone⁶ of a legitimate product is produced even without the use of the trademark.

Reliable estimates of the losses due to infringement are necessary to evaluate the severity of the problem and to determine what policy actions are warranted. It is quite difficult to develop such estimates, however, because definitions of infringement vary among nations, and it is difficult to detect infringing activities or products. Infringement problems are specific to certain industries or products, countries, and particular forms of intellectual property rights. To study the problem rigorously, it is necessary to focus on selected products in selected countries. Such analysis does not, of course, provide a basis for extrapolating to worldwide infringement losses.

Even if the dollar volume of infringing sales is known, which it often is not, that is not necessarily the same as the dollar amount of sales lost to the

legitimate producer. Moreover, what really counts to companies is not the total amount of sales lost, but the net amount of profits lost. Although estimates of lost sales and lost profits can be made, they are subject to assumptions that are of uncertain validity (U.S. International Trade Commission, 1988:4-11). Further, not all economic harm can be measured directly, as when lack of confidence in intellectual property protection causes a firm to avoid a market altogether. Indirect effects, such as reduced research, development, and related innovation activities and reduced U.S. employment, are even more difficult to estimate.

Some of the best estimates of the economic impact of infringement are probably those in two reports by the U.S. International Trade Commission (ITC, 1984, 1988). Even these reports are based on questionnaire responses from nonrandom samples of U.S. companies and thus cannot be extrapolated to all firms. The 1988 ITC report estimated aggregate worldwide losses of $23.8 billion in 1986 for key U.S. industrial sectors due to inadequate intellectual property protection.

The 1988 ITC study also provides some of the best information on the quantitative effects of inadequate intellectual property protection on specific American industries. The scientific and photographic goods industry reported the greatest aggregate worldwide loss as a result of inadequate intellectual property protection in 1986-$5.1 billion, or 21 percent of the total for all industries. This was followed by the computer hardware and software industries ($4.1 billion, or 17 percent), the electronics industry ($2.3 billion, or 10 percent), the motor vehicle and motor vehicle parts industries ($2.2 billion, or 9 percent), the entertainment industry ($2.1 billion, or 9 percent), and the pharmaceutical industry ($1.9 billion, or 8 percent). The largest losses due to infringing imports (not including gray market goods) were reported in the industrial and farm equipment industry, electronics, and textiles and apparel. The largest export losses to infringing products were reported in motor vehicles and parts and in electronics (U.S. International Trade Commission, 1988:viii, 4-3).

During the conference and the preparation of this volume, a discernible pattern of policy themes and questions emerged that should be kept in mind while reviewing the material that follows. The most fundamental of these questions is, How can economic incentives for technological innovation be provided, while ensuring rapid and widespread diffusion of new technology? This is a dilemma for all firms and nations, not just the United States. At a higher level of analysis the question becomes, What kind of international IPR regime would be in the long-term national interest of the United States?

The primary rationale for intellectual property rights has been that such rights are necessary to provide incentives for inventors to invent and disclose their ideas to society. Once an invention has been introduced to the market, implemented in practice, or otherwise disclosed, it can often be imitated easily. In the absence of intellectual property protection, an inventor or company may invest in developing and introducing an invention only to find that imitators rapidly enter the market, thereby reducing the economic return to the originator of the idea. Moreover, because they have not incurred the development costs, imitators may be in a superior economic position relative to the original inventor. In this situation, there may not be much incentive—indeed, there may be a disincentive—for inventors to invest resources, even if the return to society as a whole is potentially large. On the other hand, as pointed out by Paul David in Chapter 2, overprotection of an invention can discourage subsequent innovation and diffusion, because in some cases the economic rents demanded by the inventor are too high.

Thus, a tension exists between the financial return necessary to provide an incentive to invest in invention and the rapid, widespread diffusion of new technology. Both are necessary for technology to contribute to economic growth and social welfare. The policy question facing nations has been how to achieve the appropriate balance between incentives to innovate and the diffusion of new technologies, such that the economic costs of granting the rights do not outweigh the benefits of increased innovation.

The appropriate trade-off between incentives to innovate and the diffusion of new technologies is also the fundamental policy question at the international level. Here, a way must be found to balance the diverse interests of nations. Proponents of stronger worldwide intellectual property protection argue that it is necessary to ensure adequate economic returns in order to sustain continued investments in innovation. Opponents argue, on the other hand, that the negative effects of monopolistic restrictions on trade and economic development inherent in IPRs outweigh any benefits from increased innovation and, further, that the worldwide extension of such systems is disadvantageous to the developing countries.

These fundamental policy questions can never be answered completely. At the national level, ongoing political and policy processes ensure that the relevant dimensions of the problems are considered and that some degree of balance is achieved. At the international level, however, there does not appear to be sufficient commitment, or even a consensus on the need to balance these competing objectives. This situation may continue to make it difficult to achieve the kind of international agreement necessary to extend

a strong intellectual property rights system worldwide and thereby promote equitable, global economic growth.

In seeking changes to the current system, it is important to consider the kind of international IPR regime that would be in the long-term U.S. national interest. Two characteristics of such a regime might be that it would (1) foster continued global economic development and (2) accommodate the imperatives of newly emerging technologies. Many of the complaints about inadequate intellectual property protection focus on the NICs and the developing countries. The economic development policies of many of the developing countries have been based on imitation and expropriation of the intellectual property of firms from industrialized nations. To date, such policies apparently have been quite successful for many of the developing countries that have now reached the status of NICs.

For this reason, the NICs have been much less supportive of strong intellectual property protection than industrialized countries. Strong intellectual property rights have been regarded as an obstacle to acquiring and diffusing the advanced technology necessary to fuel economic growth in developing countries. The NICs and LDCs often argue that intellectual property rights do little to stimulate indigenous innovation in their countries because they lack the necessary scientific and technological infrastructure. Rather, they view such rights as beneficial primarily to foreign companies that enter their markets. Moreover, until recently, few nationals of NICs and LDCs wished to obtain intellectual property protection in foreign countries. However, as more and more of the NICs begin to have indigenous technology to protect, their view of the IPR "problem" begins to change.

Two important policy questions emerge in this regard: Can economic growth and industrialization in the LDCs and the NICs be sustained on the basis of existing weak protection for intellectual property? When firms from industrialized countries suffer economic losses due to weak intellectual property protection in developing countries, are those losses large enough to endanger their investment in innovation or their ability to survive? Expropriation of intellectual property reduces the economic return to innovation obtained by firms in the industrialized nations and, if of a large enough magnitude, could lead to a lower rate of innovation. In the past, these firms have been the source of the new technologies that fuel world economic growth. Thus, continued reliance on such policies could lead to slower economic growth for all countries.

Clearly, as noted above, indigenous innovations developed in the NICs will require protection, not only in domestic markets but in foreign markets as well. As intellectual property protection becomes more important to

indigenous innovators, the governments of these countries will face more pressures to enact and enforce strong protection. Again, the overarching issue is one of balance.

Advances in computer software, semiconductor chips, and biotechnology have set off major debates over how to protect the innovator's rights in those new technologies. It is not yet possible to determine the adequacy of the solutions reached. Emerging technologies, such as artificial intelligence and biochips, raise even more difficult intellectual property issues for the future. The rapidity of technological change in these fields means that actions taken now to deal with IPR problems, whether on the national or the international level, will have to be reevaluated continually and in all likelihood revised in the years to come.

One of the major questions posed as new technologies emerge is whether existing rights can provide adequate protection or whether a new form of rights is needed. Countries typically have dealt with this issue at the national level, and the resulting divergent national approaches to protection have made international agreement more difficult to achieve. This raises, in turn, a related question about the kinds of institutional structures and processes that can facilitate the development of international norms for protecting new technologies and the continuing review that will be necessary.

The U.S. government has taken a multifaceted, trade-oriented approach to the international IPR issue, an approach that consists of multilateral and bilateral negotiations, as well as unilateral trade measures. General policy questions concern the effectiveness and long-term implications of this overall approach and its various components. For example, what kinds of tradeoffs between IPRs and other trade policy objectives will result? How can the United States develop a consistent policy for worldwide protection of intellectual property when actions are being taken in many different forums?

An international code on patents, trademarks, and copyrights currently is being negotiated as part of the Uruguay Round of GATT. The GATT is viewed by some as having several advantages for achieving worldwide IPR protection. It represents a significant shift in approach, away from the World Intellectual Property Organization (WIPO), the U.N. agency that administers most major international IPR conventions, where strong intellectual property protection has been effectively opposed by the developing countries.

As the premier world trade forum, GATT places intellectual property issues in a trade context and links them to other trade and investment issues, thereby potentially bringing enormous bargaining power to bear. On

the other hand, linkages with other trade issues may work to the detriment of those concerned with IPRs. Either way, it is likely that a GATT agreement on IPRs, if one is achieved, would include strengthened minimum standards of protection and procedures for settling disputes.⁷

Policy questions with respect to GATT negotiations include whether a satisfactory IPR agreement can be achieved under the Uruguay Round, whether a significant number of countries will sign such an agreement, and whether effective enforcement procedures can be agreed upon and implemented. If international IPR issues become subject to the GATT, what then will be the role of WIPO? Can WIPO be used to deal with new technology issues? Can either GATT or WIPO assume the important balancing role needed to resolve international IPR disputes?

Intellectual property rights issues also interact importantly with other economic and health policies. The recent initiative of the National Institutes of Health concerning patentability of genetic sequences has, for example, created the possibility of setting off a frantic race among private companies to "stake out" rights to certain gene sequences before it is even clear how they are commercially useful. At the other extreme, laws that bar patentability for inventions that have been previously disclosed are often at odds with university research policies that stress early and free dissemination of research results. Antitrust policies in the past have sought to place narrow limits on the legally permissible exploitation of intellectual property rights. In the area of health policy, delays in new drug approval can reduce the effective period of patent protection, and price controls on medicines in many countries reduce the economic return on those products, which are highly R&D intensive. Each of these interactions, many of which are addressed in this volume, raises important issues at both the national and the international levels.

The challenge of an edited volume based on the proceedings of a conference is to present the material in an interesting and coherent fashion, while avoiding the tendency to try to recreate the agenda of the meeting itself. We have endeavored in the following pages, therefore, to provide an

intellectual framework for the salient issues raised during the conference and to include only the most cogent points from various discussion sessions. After an interesting and insightful analysis in Chapter 2 of the economic theory and historical development of intellectual property rights by economic historian Paul David, the remainder of the volume is divided into five major sections.

Section II presents the basic cases for and against a uniform, worldwide system of intellectual property rights. As success in the global economy turns increasingly on access to information and technical know-how, there are few areas in which the differences in approach between rich and poor countries are more clearly exemplified. Section III supports the analysis in the previous chapters with a comparative examination of national approaches, using the experience and practice of representative countries. This section also provides an up-to-date examination of ongoing efforts to negotiate new international IPR agreements.

Section IV takes an entirely different cut at global IPR issues by considering the impact of scientific and technological advance on the modern-day application of IPRs. After Chapter 8 considers how industries use—and seek to protect—their advanced technology to achieve and sustain global competitiveness, a series of different sectoral views of the problem is presented. Chapter 9 provides views of the problem from the standpoint of government, the university research community, and entrepreneurial business. Chapter 10 presents the perspective of multinational firms. Section V then takes up and examines, in turn, the adaptation of existing IPRs to particular, often problematic, new technologies, such as computer software or biotechnology, some of which do not conform well to existing IPR safeguards.

Section VI provides a distillation of some of the most salient unresolved IPR issues, as addressed in the closing panel discussion of the conference. A menu of interesting research questions is presented in a final coda. Biographical sketches of the conference speakers and contributors are included in the appendixes in Section VII.

Beier, F.K. et al. 1985. Biotechnology and Patent Protection. Paris: Organization for Economic Cooperation and Development.

Benko, Robert P. 1987. Protecting Intellectual Property Rights. Washington, D.C.: American Enterprise Institute.

Pharmaceutical Manufacturers Association. 1992. The cost of innovation in the pharmaceutical industry: New drug R&D cost estimates. Industry Issue Brief (July).

U.S. Congress, Office of Technology Assessment. 1984. Commercial Biotechnology: An International Analysis. Washington, D.C.: U.S. Government Printing Office .

U.S. Congress, Office of Technology Assessment. 1986. Intellectual Property Rights in an Age of Electronics and Information. Washington, D.C.: U.S. Government Printing Office.

U.S. Congress, Office of Technology Assessment. 1989. Patenting Life. Washington, D.C.: U.S. Government Printing Office.

U.S. International Trade Commission. 1984. The Effects of Foreign Product Counterfeiting on U.S. Industry. Final Report on Investigation No. 332-158 under Section 332(b) of the Tariff Act of 1930, Publication 1479. Washington, D.C.

U.S. International Trade Commission. 1988. Foreign Protection of Intellectual Property Rights and Its Effect on U.S. Industry and Trade. Report to the U.S. Trade Representative, Investigation No. 332-245, Publication No. 2065. Washington, D.C.