[A-List] US imperialism: intellectual property

["Michael Keaney" <michael.keaney@xxxxxx>]

Protecting drug patents brings real benefits
By Stuart Eizenstat
Financial Times: December 19 2002

For decades, the world has been trying and failing to offer developing
countries durable solutions to their economic woes. Many bold new ideas have
fallen out of favour - not always for good reasons. Here's one that ought to
fall back in.

Intellectual property has become the poison pill of international trade
debates, blamed unfairly for depriving the developing world of medicines.
Further assaults on the current legislation and more street protests are
expected at the World Trade Organisation talks this week, as activists and
developing countries press for expanded authority to break drug patents, and
government negotiators try to meet their deadline for resolving the issue at
the end of the year.

Things looked much rosier in the early 1990s, when the US and its leading
trading partners forged a global consensus on legal protection - in
developed and developing countries alike - for inventions, literary works,
sound recordings and other forms of intellectual property.

The conventional wisdom back then was that developing countries would do
themselves a favour by implementing strong international rules on
intellectual property protection. Strong protection would open doors to
trade and create incentives for investment, domestic innovation and
entrepreneurship.

Over the past three years, the truly catastrophic Aids crisis has caused the
pendulum to swing in the other direction. Urgent demand for access to
patented drugs - expensive to create but priceless to the needy - has
convinced some developing countries that intellectual property laws could be
downright harmful. Other countries have seized the opportunity presented by
the crisis to further the interests of their own "knock-off" pharmaceutical
industries.

Today, it has reached the point where even American trade negotiators -
former champions of intellectual property protection - seem to have doubts.
If the US does not stand by its principles here, and instead compromises a
vital domestic industry in the name of striking a political deal, other US
industries have reason to worry - are they next?

Access to medicines is critically important. But this issue has very little
to teach us about the real merits of intellectual property protection in
developing countries.

Virtually everyone - including the pharmaceutical industries - supports
relaxing patent protections for the medicines needed in sub-Saharan Africa
and other regions to deal with the Aids, malaria and tuberculosis crises, as
well as future epidemics of similar gravity and scope. Rules already built
into the system, and further clarified a year ago, permit that flexibility.

Unfortunately, the drug debate, which is about when and how to make
important (but relatively rare) exceptions to intellectual property rules,
has needlessly tarnished international faith in the rules themselves. Trade
negotiators must remind themselves not to give up on the broader system and
deny the developing world the benefits that intellectual property protection
can provide.

The experience of a country that defies today's conventional wisdom proves
that strong intellectual property rules are in fact exactly what they were
cracked up to be in the early 1990s - a good opportunity for economic
development.

Jordan made the hard decision under King Abdullah II to join the WTO in late
1999, embracing its strong intellectual property rules despite the perceived
threat that WTO membership posed to its pharmaceutical sector. Domestic drug
manufacturers had built Jordan's second biggest industry largely on their
own versions of medicines patented in developed countries.

The consequences were indeed swift and significant. With the ratification of
world-class intellectual property laws, Jordan's pharmaceutical industry
enjoyed an influx of investment and technology transfer. Moreover, the
country's exports of high-quality generic pharmaceuticals increased 25 per
cent between 1999 and 2001, and patent protection has not affected prices
for products domestically.

While countries facing more basic corruption and rule-of-law issues need a
lot more than intellectual property protection to jump-start economic
growth, it is worth reminding ourselves of something we may have forgotten
in the heat of the medicines debate: development follows intellectual
property protection and not the reverse. It is worth reminding trade
negotiators as well.

The writer was deputy secretary of the Treasury, undersecretary of state and
undersecretary of commerce during the Clinton administration