Friday, February 24, 2006

Presentation: IP Protection in India

By the year 2020, India could very well be a superpower. For decades, India’s economic power has been rapidly growing, particularly in the IT and pharmaceutical fields. India is a prime example, of how developing countries, who have long been resistant to comply with international intellectual property rights, have benefited from poor domestic enforcement of intellectual property rights. Indian Patent law did not recognize patenting of substances that result from chemical reactions, and they did not allow product patent protection for drugs. During the 1970's and 80', India's pharmaceutical industry grew rapidly as it focused on the manufacture of generic drugs, and on learning from products that had been developed elsewhere.

What is telling is that developing countries such as India are often quite capable in scientific skills. But they need the same flexibilities that today's developed countries had when they themselves were at a comparable stage of development. Higher and higher levels of IP protection, are extremely detrimental to developing countries. The primary objective of IP protection is often viewed as maximizing public welfare, and it is not surprising then, that developing countries are protecting their own interests.

The developed countries speak of 'development' in the context of Intellectual Property protection, but they do so with their own interests in mind. The term 'development' to the west means increasing a developing country's capacity to provide protection to the overwhelmingly developed country owners of IP rights. The message seems to be, protect our rights so that we can benefit, and then you too will eventually share and enjoy a piece of the pie. Such a view takes next to no consideration of India’s immediate public welfare. Especially since India has been the victim of biopiracy from corporations in developed countries. 'Biopiracy' refers to the ways that corporations - almost all from the developed world - claim ownership of, free ride on, or otherwise take unfair advantage of, the genetic resources and technologies of developing countries.

The current status of IP protection is very lacking. It is no wonder that millions of copies of films from Hollywood and Bollywood are illegally copied and distributed. Piracy is running wild in India. Struggling film directors are “borrowing” plots from hit American movies. In the U.S. a DVD can cost upwards of $20.00. The average person in India makes $500 a year. A pirated DVD fetches $1 in India, and if sold abroad, $10. The economic realities have further contributed to a general cultural apathy towards copyright and general IP protection.

Threats and pressure from the U.S. to strengthen IP laws, including a threat of reducing trade benefits, has been minimally successful. In the long run, alienating India may not be the best approach for U.S. foreign policy, or for furthering the objectives of TRIPs. Instead, For developing countries to benefit from providing IP protection to western rights holders there has to be some obligation on the part of developed countries to transfer technologies to developing countries, and to prevent further biopiracy. Only then will India and other developing countries accept the self-interest that exists in greater enforcement of IP laws.


Blogger DSomogy said...

My comment, briefly: Do developing countries cover the costs of developing countries having lax IP laws?

Also, is it a problem for a market's development when its foundations are in weak IP protection?

1:50 PM  
Blogger duffee said...

I just wanted to post my question that I raised in class:

Do you think there is any risk of companies or countries avoiding India or other developing countries if there is insufficient IP protection? If this is not a concern for India and China with their huge populations, might it be a concern for other smaller developing countries?

2:01 PM  
Blogger Brian Bulson said...

Following up on Duffee's post. I agree that one big positive argument to encourage developing countries to implement strong IP laws is to encourage foreign investment in their countries. As he mentioned, companies may be reluctant to start operations in countries where their IP will be stolen or unprotected. On the flip side, if they are confident they will have sufficient protection, then they may open factories in those countries creating more jobs and helping the local economy. This is more of a long term benefit, but probably shouldn't be overlooked.

6:11 AM  
Blogger Christine said...

I agree with the previous posts - This seems to be a tradeoff though - a strong IP regime may help to encourage foreign investment. But, at the same time - until the market catches up and there is enough investment to create local jobs and increase the standard of living - those products would likely be priced out of the market in India - and would just be exported. The local people would not be able to afford them and realize the benefits - and they would not be able to afford royalties to build on these processes to create their own inventions. India would probably not benefit until far down the road. On the other hand weak IP regimes may make products available to the locals - and promote innovation - possibly eventually allowing India to depend as an economically independent country.

Ashik - I think your proposal is very interesting. I'm sorry that I missed it. I remember in Oxford we discussed some sort of transitional agreement under TRIPS - not sure if this is outside of the scope of your paper - but, is this something that you intend to discuss?

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