Friday, May 27

WTO Patent Regime: Pundita channels Pericles to deliver sound advice

"Pundita, dear, I enjoyed Dave Schuler's charming coin story but I had to visit Wikipedia's article on the WTO, which you thoughtfully link on your sidebar, to find the answer to the questions you posed in your aptly titled Dim Sum Squad essay. You asked whether international patent law now supersedes domestic patent law and if so, "whose bright idea was that?"

The answer to the first question is yes if one amends "law" to read "de facto international law." No country has to be a member of the WTO but exclusion from the WTO constitutes a de facto embargo by the Big Three [US, EU nations, and Japan] against any or all of a nonmember's exports.

A nation can't be a member of WTO without accepting the TRIP rules. These are the rules that pertain to patent and copyright protections. Any nation breaking the rules is open to sanctions. This would include the United States.

Aspects of patent laws vary from nation to nation, and nations have latitude in how they enforce compliance with regard to TRIPs; however, if a nation wants to avoid the threat of sanctions, they must comply with TRIPs. The rules in part, as listed in Wikipedia, are as follows:
Copyright terms must extend to 50 years after the death of the author (although films and photographs are only required to have fixed 50 and 25 year terms, respectively).

Copyright must be granted automatically, and not based upon any "formality", such as registrations or systems of renewal.

Computer programs must be regarded as "literary works" under copyright law and receive the same terms of protection.

National exceptions to copyright (such as "fair use" in the United States) must be tightly constrained.

Patents must be granted in all "fields of technology" (regardless of whether it is in the public interest to do so).

Exceptions to patent law must be limited almost as strictly as those to copyright law.

In each state, intellectual property laws may not offer any benefits to local citizens which are not available to citizens of other TRIPs signatories (this is called "national treatment").
The penalty for breaking the rules is potentially very stiff:
...unlike other international agreements on intellectual property, TRIPs has a powerful enforcement mechanism. States which do not adopt TRIPs-compliant intellectual property systems can be disciplined through the WTO's dispute settlement mechanism, which is capable of authorising trade sanctions against non-compliant states.
Now to answer your second question. Bringing nations under a de facto international law on patents and copyrights was chiefly the US government's bright idea or to be more specific, it was Pfizer's bright idea, which they sold to the US government.
...the United States strategy of linking trade policy to intellectual property standards can be traced back to the entrepreneurship of senior management at Pfizer in the early 1980s, who mobilised US corporations and made maximising intellectual property privileges the number one priority of US trade policy.
Of course this was before AIDS became epidemic in Third World countries but there you have it: One the one hand, the US and other developed nations will end up spending billions to fight the AIDS epidemic in Africa, India and China with medications that are hideously expensive because of TRIPs rules. Is this what you mean by the loop de loop?
Boris in Jackson Heights"

Dear Boris:
I think you might be the most cynical of all my readers. But yes, that's an example of the Loop de Loop. However, don't discount Dave Schuler's contribution because he focused on untangling the rationale for the Monsanto chapati patent and similar patents. For that, one needs to learn about the aspect of TRIPs that deals specifically with biotechnology. That's what Dave ferreted out and focused on--Article 27.3(b). To really understand why the G-20 nations are upset about TRIPs, you need to know about that particular rule--and to know about the G-20 (or G-21; the number of members, as with the Coffee Club, waxes and wanes).

The G-20, as distinct from the G-77 (the world's poorest nations), represent the world's middling developing nations. Don't let the 'middling' fool you. China, Brazil and India are members, as are major oil exporting nations such as Mexico, Argentina, and Nigeria. So taken as a bloc, the G-20 represent 65% of the world's population.

But that's not the key statistic when it comes to understanding the outrage directed at TRIPs and specifically Article 27.3. Here are the statistics to keep uppermost in mind:

The G-20 represent 72% of the world's farmers while representing only 22% of the world's agricultural output.

Taken together, the statistics suggest that no small part of that 65% of the world's population has to import food. If basic foodstuffs such as rice and wheat are patented, that ups the price for the imports.

The 22% figure is also important because the G-20--and indeed, the entire anti-globalization movement--is bent out of shape because of the WTO double standard. The most powerful nations in the WTO retain trade protections and subsidies for their farmers and the farm output. At the same time, the nations demand that the little guy nations drop their protections.

To keep the charge about a double standard in perspective, the G-20 should remember that without the G-7, there would be no international trade to speak of. So they can hop and down outside the G-7 annual meeting all they want; it won't change the fact that they depend greatly on the big fish for their survival and progress.

However comma it's crossing the line that separates Darwinian Survival from Greedy Fool when one starts patenting the staff of life. This is because anyone can play the patents game. So with 65% of the world's population as the brain pool, it's only a matter of time before inventions that are critical to the G-7 peoples emanate from G-20 nations. For all we know, tomorrow could see an invention from a genius in a Peruvian village that makes petroleum obsolete or puts Microsoft out of business. Then the patent shoe will be on the other foot.

What's the tiebreaker? As with solving many problems, common sense and common decency go a long way. If you ask Americans what an inventor is, they think of brain-busting labor. They don't think of a technician who takes a bit of wheat, puts it in a gizmo connected to a computer, then watches the computer print out the genetic code of the wheat and then patents the printout. That's not invention. That's use of modern and very expensive technology.

That kind of behavior, when codified and protected by a powerful international trade organization, is definitely on the Greedy Fool side of the line. The ghost of Pericles could tell you where that side leads; it leads inexorably to little guys ganging up and launching war that can last a generation and bring down a mighty civilization.

I will close with a passage from The Glittering Eye essay:
Once again narrowing the focus to the intellectual property law of biotechnology, Article 27.3(b) of the agreement micro-organisms, non-biological, and microbiological processes must be eligible for patents. Governments may elect to exclude plants, animals, and “essentially biological processes” from patent protection but plant varieties must either have patent protection or some sui generis system created especially for the purpose (or both)...
The paragraph indicates that governments can elect to practice common sense, and common decency, when it comes to interpreting how patent laws are applied to critical export products. Good foreign policy should be directed at encouraging all exporting nations to take that path.

The quotes in Boris's letter are from the Wikipedia article on TRIPs . You might want to review the Wikipedia article on the WTO (see Pundita sidebar link "What is the WTO?") before starting on TRIPs.

Well, I intended this post to be about North Korea, which means I did not meet my goal to publish three essays today. The other two will have to wait until the weekend, which bumps forward to next week other essays in the works.


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