The Economics of Knowledge

["ÁÎ×Ó¹â Henry C.K.Liu ¹ù¤l¥ú" <hliu@xxxxxxxxxxxxxx>]

There are signs that Agreement on trade-related aspects of intellectual
property rights (Trips), the subject of Annex 1C of the agreement
establishing the World
Trade Organisation, is the latest translation of cultural imoperialism
into economic imperialism on a global scale.

The Schumpetrean "creative destruction" that Greenspan tirelessly
celebrates, is increasing distorted from the specific idea of a better
mouse trap, to the systemic appropriation of the broad notion linking
mice to traps. In this bastion of democracy, we are witnessing the
creative destruction of economic democracy through the rule of law.

Not only do the poor economies not have a fighting chance under TRIPS,
the people of the advanced economies are quietly put in technological
servitude by the new patent regime.  The notion that an individual
should be granted permission to stake a personal claim on a nation's
natural resource (such as gold, oil and other mineral rights) is
undemocratic enough, but now intellectual property rights are defined
way beyond any reasonable personal efforts, such as writing a book or a
symphony (covered under copy rights), to thoughts while shaving that
really amount to wholesale robbery from the public domain.
US annual revenue from patent licenses now exceeds $100 billion, which
is larger than most countries foreign exchange reserves.  Through TRIPS,
US patents gain global status without the burder of sharing patent fees
with other governments.

Keynesian Thought surely can show that patents and its WTO tool: TRIPS,
add up to bad economics.

Henry

Excerpted from Patently Absurd
By JAMES GLEICK

Two professors at the Massachusetts Institute of Technology are suing
the Ask Jeeves search site over two patents on handling questions in
natural language.

Patents legendarily protect the lone inventor, the pioneering genius in
a garage, against the predation of big companies. In reality the
opposite has usually been true. As basic industries like electricity,
telephony and broadcasting developed in the 20th century, the great
corporations learned to create arsenals of interrelated patents to use
as sword and shield. "The wise people, with good patent lawyers, patent
a whole system," says Thomas P. Hughes, a historian of technology.
Although small companies can get patents, the big companies can afford
to litigate -- when it comes into court, guess who's going to win?"
Absurd patents can be fought and overthrown, but to challenge a patent
costs, on average, more than $1 million.

Patent battles have become a strong catalyst for mergers, reducing
competition in various domains. The largest corporations, with gigantic
patent portfolios, routinely enter into cross-licensing agreements with
their largest competitors.   Companies without portfolios of their own
have to pay cash, representing a hidden tax within the high-tech
economy, and the costs are skyrocketing: revenues in the United States
for patent licenses were about $15 billion in 1990; eight years later
they had soared to more than $100 billion. I.B.M. alone took in well
over $1 billion from licensing last year and received a record 2,756 new
patents.

Full article:
http://www.nytimes.com/library/magazine/home/20000312mag-patents.html

Agreement on trade-related aspects of intellectual property rights
(Trips), the subject of Annex 1C of the agreement establishing the World

Trade Organisation. Note in particular that China will be forced to
accept the terms of the Trips if it wants to join the WTO.

Before the Trips agreement, countries like China, Egypt or India granted

or recognised patents on pharmaceutical processes, but not on the final
products. This allowed generic medicines to be manufactured locally,
with a considerable effect on costs. As the United Nations Development
Programme (UNDP) 1999 report stressed, the price of medicines may be as
much as 13 times higher in Pakistan, which accepts patents on products,
than in India.



                         DEFINING THE WORLD'S PUBLIC PROPERTY

                             Who owns knowledge?

                                    by PHILIPPE QUÉAU *

                        Far from being a mere technical adjustment to
the "information society", the changes to intellectual property
law are a political matter. Using the "multimedia revolution" as an
argument, some interest groups have in fact mobilised to get
intellectual property law revised, strengthening it in the rights
holders' favour.

                        They have succeeded in getting the period of
protection for works extended and new intellectual property rights
created (like the sui generis right that protects the activity of
constructing data bases from existing information, hardly an
"invention"), statutory exceptions restricted (like the fair use of
protected works), and the established benefits for users (public
libraries) called into question, not to mention the possibility of
patenting computer programs.

                        In 1985 all the data from the American
publicly-funded programme of earth observation by the Landsat satellite
were conceded to EOPSat, a subsidiary of General Motors and General
Electric. As a result, the cost of access to the data increased 20 fold.

Universities could no longer afford to buy the information, even though
it had been obtained entirely using public money. It was used mainly for

the benefit of the big oil companies, who thus received a direct
subsidy.

                        This new development is but one sign of the
changing balance of power between countries (net exporters or importers
of intellectual products) and between social groups with divergent
interests (shareholders, teachers, educators, scientific researchers,
users). Thought must therefore be given to the concept of "general
interest" if intellectual property rights are not to be turned to the
benefit of the dominant groups alone.

                        Most innovations and inventions are based on
ideas that form part of the common property of humanity. It cannot
therefore be right to restrict access to the information and knowledge
that make up this common property by making the law too keen to
safeguard individual interests.

                        Guaranteeing the protection of a global "public
domain" of information and knowledge is an important aspect of defending

the general interest. The market does benefit from the "global public
goods" currently available, such as knowledge falling within the public
domain or information or research financed out of public funds. But it
is not its role to contribute directly to promoting and defending this
public domain. International organisations, on the other hand, are well
placed to do so.

                        The "multimedia revolution" served as a catalyst

and pretext for launching a general round of intellectual property law
revision, which began in 1976 with the revision of the US Copyright Act.

                        The European directives on databases (1) or the
protection of computer programs (2), the two World Intellectual Property

Organisation (Wipo) treaties adopted in 1996 (treaty on performances and

phonograms and treaty on copyright), the Digital Millennium Copyright
Act or the Sonny Bonno Copyright Term Extension Act adopted in the US in

October 1998, the Trips agreement (3), etc. are all evidence of an
excessive legislatory zeal.



Le Monde diplomatique           January 2000 Summary   DEFINING THE
WORLD'S PUBLIC PROPERTY
Who owns knowledge? by PHILIPPE QUÉAU *

 http://www.monde-diplomatique.fr/en/2000/01/14queau