The impact of the new world order on economic development: The role of the intellectual property rights system

European Review

Volumn 15, Issue 1, 2007, Pages 47-63

  Straus, Joseph ^a  

^a MAX PLANCK INSTITUTE FOR INTELLECTUAL PROPERTY COMPETITION AND TAX LAW   (Germany)

Author keywords

[No Author keywords available]

Indexed keywords

DEVELOPING WORLD; ECONOMIC DEVELOPMENT; ECONOMIC IMPACT; INTELLECTUAL PROPERTY RIGHTS; INTERNATIONAL TRADE; WORLD TRADE ORGANIZATION;

ASIA; CHINA; EURASIA; FAR EAST; INDIA; SOUTH ASIA;

EID: 33846118927     PISSN: 10627987     EISSN: 14740575     Source Type: Journal    
DOI: 10.1017/S1062798707000051     Document Type: Article

References (87)

1. One of the latest and clearest signs for the critical attitude of developing countries is the recommendation 'For the establishment of a Developmental Agenda for WIPO' (WIPO Document WO/GA/31/11), submitted by Argentina and Brazil on 26 August 2004 to the General Assembly of the World Intellectual Property Organization (WIPO), which will be explored more closely later in this paper.
2. In this regard reference is made only to: Petersmann, From Negative to Positive Integration in the WTO: The TRIPs Agreements and the WTO Constitution, in Cottier and Mavroidis (eds) (2003) Intellectual Property - Trade, Competition and Sustainable Development (Ann Arbor), p. 21 et seq.,
3. with further references. Petersmann writes: 'Trade liberalization in the WTO should not only be based on utilitarian objectives of "welfare maximization" but also on human rights concepts, such as individual freedom [...], non-discrimination [...], and rule of law subject to judicial review by national courts and international adjudication [...].' Further: 'The time has come for recognizing that human rights law offers WTO rules moral, constitutional and democratic legitimacy that may be more important for the parliamentary ratification of future WTO Agreements than the traditional economic and utilitarian justifications.' (loc. cit. p. 44).
4. Annan, Laying the Foundations of a Fair and Free World Trade System in: Sampson (ed) (2001) The Role of the World Trade Organization in Global Governance (Tokyo, New York, Paris), p. 19 et seq. (27).
5. (2004) The globalization of private knowledge goods and the privatization of global public goods, Journal of International Economic Law, 7, 279 et seq.
6. Multilateral Agreements and a TRIPs-plus World: The World Intellectual Property Organization (WIPO), Geneva 2004.
7. A Manifest on WIPO and the Future of Intellectual Property, available at http://www.law.duke.edu/journals/dltr/articles/2004dltr0009.html
8. The Second Enclosure Movement and the Construction of the Public Domain, 66 Law & Contemp. Probs. 33 et seq. (Winter/Spring 2003).
9. Maskus and Reichman (2004) Journal of International Economic Law, 7, 319.
10. Musungu and Dutfield, loc. cit., p. 24.
11. Loc. cit.
12. See for this Straus (1996) Implications of the TRIPS agreement in the field of patent law. In: Beier and Schricker (eds), From GATT to TRIPS - The Agreement on Trade Related Aspects of Intellectual Property Rights (Weinheim), pp. 160 et seq. (162 et seq. with further references).
13. (2002) Integrating Intellectual Property Rights and Development Policy (London), pp. 8, 21.
14. See the interview 'How to fix the IP Imbalance' with Mamudi, Managing Intellectual Property, p. 28 et seq.
15. WIPO Document WO/GA/31/11, III (p. 2), IV (p. 3), V (p. 3), Annex No. 3.
16. Cf. Panitchpakdi, Balancing competing interests: The future role of the WTO. In Sampson (ed.), loc. cit., fn. 3, p. 29 et seq.
17. Cf. for example Steinberg and Josling (2003) Where the peace ends: The vulnerability of EC and US agricultural subsidies to WTO legal challenge, Journal of International Economic Law, 6(2), 369 et seq.
18. See the report 'Grow up - developing countries are growing at their fastest pace for decades,' The Economist, 6 October 2004, p. 12.
19. Cf. De Jonquieres (2001) Dealing in Doha, Financial Times, 6 November, p. 16.
20. Alikhan and Mashelkar (2004) Intellectual Property and Competitive Strategies in the 21st Century (The Hague/London/New York), report in this respect: 'The developing countries generally have had an increasingly larger share of the industrialized world's imports, which rose from 15% in 1990 to almost 25% in 2000. Over half of Japan's manufactured imports come from developing countries, while the share for the United States of America was 45%. In the year 2000 alone, developing countries' exports rose by 15% - three times their GDP growth - the best rate of growth in five decades. Likewise, the exports from the 49 least developed countries rose by 28% in the same year - amounting to around US$34 billion. The developing countries' share of world trade has risen from one-fifth in the 1970s to one-third, and as per current trends it is likely to grow to well over half of world trade in the next 25 years. Incidentally, world exports of manufactured goods have expanded by 8% annually on an average between 1948 and 2000. For the year 2000, the value of world exports of manufactured goods from these countries was more than 50 times larger than that in 1948, and while the ratio of exports in respect of goods and services to the GDP was 8% in 1948, it had increased to 29.5% in the year 2000 (taken at constant 1987 prices)' (p. 34).
21. The report of the 'High Level Group' led by Wim Kok (2004) can be referenced here, Facing the Challenge - The Lisbon Strategy for Growth and Employment (Luxembourg), November, ex. p. 10.
22. Cf. Straus, loc. cit. fn. 10, pp. 168 et seq. for further references.
23. Cf. Fischer and von Zedtwitz (2004) Chinese R&D: Naissance, renaissance or mirage? R&D Management, No. 4, September, Special Issue on Managing R&D in China, pp. 349 et seq. (354 et seq.)
24. further Gao and Tisdell (2004) China's reformed science and technology system: An overview and assessment, Prometheus, 22(3), September, 311 et seq. (321).
25. Admittedly, China began preparations for a system of intellectual property protection already at the end of the 1970s, as it prepared to enter the Paris Convention. Advanced development of the system only took place during preparation for and adoption of TRIPs. (cf. Guo (1996) TRIPs and Intellectual Property Protection in the People's Republic of China, GRUR Int. 1996, 292 et seq.).
26. For detailed information on the new system of Chinese patent law see Ai, Li, Wu and Hu (2005) Patents. In China Intellectual Property Law Guide (The Hague), at 15, 001 et seq.
27. From statistics published in the Report on Intellectual Property Rights Protection in China in 2003, from the SIPO, p. 24 f.
28. For somewhat different data see Gao and Tisdell, Prometheus, 22(3), September, p. 313;
29. von Zedtwitz (2004) Managing foreign R&D laboratories in China, R&D Management, 34(4), September (loc. cit.), 439 et seq. (439).
30. In 2002 Foreign Direct Investment (FDI) amounted to US$53 billion, with which China passed the USA (cf. Gassmann and Han (2004) Motivations and barriers of foreign R&D activities in China, R&D Management, 34(4), September, loc. cit. 423 et seq. (423)).
31. As Gassmann and Han (loc. cit.) note, this clearly shows the support China received from international investors for entering the WTO in November 2001.
32. According to OECD statistics, as seen in von Zedtwitz, loc. cit. In 2003, the expenditures amounted to US$69 billion (cf. Fischer and von Zedtwitz, R&D Management, 34(4), September (loc. cit.), 358).
33. For an overview in more detail, see: E. Aerts and H. Van der Wee (2001) Economic history. In: N.J. Smelser and P.B. Baltes (eds), International Encyclopedia of the Social and Behavioral Sciences (Amsterdam), pp. 4102-4108.
34. See also Gao and Tisdell, loc. cit., p. 318.
35. On the capabilities of Chinese firms in technological innovation, see the empirical survey by Yam, Guan, Pun and Tang (2004) An audit of technological innovation capabilities in Chinese firms: Some empirical findings in Beijing, China, Research Policy, 33, 1123 et seq.
36. This was from approximately 50 billion in 1990 (for more see the report 'Men and machines - technology and economics have already revolutionized manufacturing. White-collar work will be next,' The Economist, 13 January 2004, p. 5 et seq. (6)).
37. von Zedtwitz (2004) R&D Management, 35(4), September, p. 440. According to the data collected by von Zedtwitz, foreign firms should have established some 400 R&D Centers in China by 2002 (loc. cit.).
38. R&D Management, 34(4), September 2004, 442 et seq.
39. Gassmann and Han (2004) R&D Management, 34(4), September, 427 et seq., provide a detailed and exhaustive analysis of the motives of transnational companies establishing R&D activities in China.
40. See only Huang, Amorim, Spinoglio, Gouveia and Medina (2004) Organisation, program and structure: An analysis of the Chinese innovation policy framework, R&D Management, 34(4), September, 367 et seq. (382).
41. Further Mertha (2005) The Politics of Piracy - Intellectual Property in Contemporary China (Ithaca and London).
42. Gao and Tisdell (2004) Prometheus, 22(3), September, p. 324.
43. See Gupta, Bhojwani, R. Koshal and M. Koshal (2000) Managing the process of market orientation by publicly funded laboratories: The case of CSIR, India, R&D Management, 30(4), 289 et seq.
44. See the brochure Indien 2003-2004 - Verlässicher Wirtschaftspartner - Attraktives FDI Gebiet,' p. 11 et seq. published by the Ministry of External Affairs of the Indian Government.
45. Cf. for example Ganguli (1998) Intellectual property rights in transition, World Patent Information, 20, 171 et seq. (175 et seq.);
46. Rajeshwari and Gabriel (2004) An Indian summer - contract research heats up, Patent World, October, p. 19 et seq. (19). Last amendments to the Indian Patent Act were passed by the Parliament on March 22, 2005.
47. Cf. Ganguli, World Patent Information, 20, p. 177.
48. They are about 25% less than China, however the productivity of a worker in India is about 50% less than of one in China (see Luce (2004) India's investment climate shows big improvement, Financial Times, 24 January, p. 5).
49. See Indien 2003-2004 loc. cit., fn. 33, pp. 5/6, 97.
50. Every year approximately 300,000 IT engineers graduate from Indian universities, of those about 30,000-40,000 are most highly-qualified and in special demand from foreign companies such as IBM and Accenture. (cf. the report 'The place to be - in the global market for white-collar work, India rules supreme. But others are lining up,' The Economist, 11 November 2004, p. 8 et seq. (10)).
51. IBM, already employing some 42,000 people at more than a dozen centres in India, just revealed plans for a further investment of US$6 billion over the next three years (cf. Merchant (2006) IBM $6 bn to be India's biggest inward technology investment, Financial Times, 7 June, p. 13).
52. Cf. the report 'The Place to be,' The Economist, 11 November, p. 8.
53. See the report 'Faster, cheaper, better - India's emerging IT firms are trying to beat their western rivals on their home turf,' The Economist, 13 November, 2004, p. 10 et seq. By 2008 it is expected that Indian IT industry will create 2.5 million jobs.
54. IBM, Microsoft, Metamove, Oracle and Sathyam computers have built corporate schools for training in India (see Imam (2006) How does patent protection help developing countries?, IIC, 37, 245 et seq., at 256).
55. On the corresponding development of the Indian pharmaceutical industry, see Vepachedu and Rumore (2004) Patent protection and the pharmaceutical industry in the Indian union. Intellectual Property Today, October, p. 44 et seq.;
56. and especially Chandran, Roy and Jain (2005) Implications of new patent regime on Indian pharmaceutical industry: Challenges and opportunities. Journal of Intellectual Property Rights, 10, 269 et seq. (July).
57. More information can be found at Rajeshwari and Gabriel (2004) Patent World, October, p. 19 et seq.;
58. also at Indien 2003-2004 loc. cit., fn. 42, p. 83.
59. For the current state of the Indian service-based manufacturing see Marsh (2006) A new manufacturing mantra, Financial Times, 16 May, p. 8.
60. See Musungu and Dutfield, loc. cit., p. 12.
61. See the report 'WIPO has failed in its development mission', TWN Third World Network, available at http://www.twnside.org.sg/title2/twrl71h.htm.
62. See Drahos, Lokuge, Faunce Goddard and Henry (2004) Pharmaceuticals, intellectual property and free trade: The case of the US-Australia free trade agreement. Prometheus, 22(3), p. 243 et seq.;
63. Lawson and Pickering (2004) 'TRIPs-plus' patent privileges - an intellectual property 'cargo cult' in Australia. Prometheus, 22(4), December, 355 et seq.
64. Details see Price (2004) The U.S. Bahrain free trade agreement and intellectual property protection. The Journal of World Intellectual Property, 7, p. 829 et seq.
65. Cf. the synopses of Drahos, Lokuge, Faunce Goddard and Henry (2004) Prometheus, No.3, September, p. 254.
66. See also El-Said (2005) The road from TRIPS-Minus to TRIPS, to TRIPS-Plus. The Journal of World Intellectual Property, 8, p. 51 et seq., at 57 et seq.
67. See for example Article 17.9.7 of the FTA with Australia.
68. See Gervais (2003) The TRIPs Agreement - Drafting History and Analysis, 2nd edn (London), p. 274 et seq.
69. See for example Article 17.10 of the FTA with Australia.
70. See Article 17.9.13.
71. See Drahos, Lokuge, Faunce Goddard and Henry (2004) Prometheus, No.3, September, p. 252 et seq.
72. All data from Drahos, Lokuge, Faunce Goddard and Henry (2004) Prometheus, No.3, September, p. 244 with further references.
73. Drahos, Lokuge, Faunce Goddard and Henry (2004) Prometheus, No. 3, September, p. 244 et seq.
74. See for example Drahos and Braithwaite (2002) Information Feudalism - Who Owns the Knowledge Economy? (London).
75. Drahos, Lokuge, Faunce Goddard and Henry (2004) Prometheus, No. 3, September, p. 244.
76. WTO Document WI/L/540 on September 1, 2003. Additionally see the statement of the chairman, Ambassador Carlos Pérez del Castillo, on August 30, 2003 (WTO News: 2003 News Items).
77. From the recommendation of the CIPR, loc. cit., fn. 11, Box 6.1 on p. 122.
78. For more on this see J. Straus (2005) Patents on biomaterial - a new colonialism or a means for technology transfer and benefit-sharing? In Thiele and Ashcroft (eds), Bioethics in a Small World (Berlin and Heidelberg), p. 45 et seq. (59 et seq.) for further references, also to doubtful regulations of some other WTO member states.
79. (2003) Agricultural biotechnology innovations versus intellectual property rights - are developing countries at the mercy of multinationals?, The Journal of World Intellectual Property, 6, p. 211 et seq. (230).
80. Cf. McGregor (2004) China's success inspires envy and awe. Financial Times, 28 May, p. 8.
81. For more on this complicated problem see the analysis 'Into the unknown - where will the jobs of the future come from?' The Economist, 13 November 2004, p. 12 et seq.
82. and 'Sink or swim - sourcing from low-cost countries works only in open and flexible markets. Europe's are neither,' The Economist, 13 November 2004, p. 14 et seq.
83. See the report 'A world of opportunity - why the protectionists are wrong,' The Economist, 13 November 2004, p. 12 et seq.
84. UNCTAD, The Role of the Patent System in the Transfer of Technology to Developing Countries, Doc. TD/B/AC/11/19, 21 April 1974.
85. See on this, critically, J. Straus (1989) Patent protection in developing countries, an overview. In: Equitable Patent Protection for the Developing World, Cornell Agricultural Economic Staff Paper 89-36, Ithaca, NY.
86. 'Ihr logischer Gehalt ist sicher groß aber ihr empirischer Gehalt ist Null.' Popper, Wissenschaftslehre in entwicklungstheoretischer und in logischer Sicht, in: Popper (2004) Alles Leben ist Problemlösen - Über Erkenntnis, Geschichte und Politik (Munich and Zurich), p. 15 et seq. (41).
87. For more see Hubbard (2004) Attacking drug makers is no cure, Financial Times, 16 June, p. 15.