25 March 2008

Business Experts Call for Intellectual Property Protection, March 25, 2008

(U.S. Chamber of Commerce decries worldwide IP infringement)

By Phillip Kurata
Staff Writer

Washington -- Protecting intellectual property (IP) does not benefit only Bill Gates, one of the world's richest men, or Time Warner, a global media giant, or pharmaceutical companies that hold patents on drugs to treat HIV/AIDS, cancer, heart disease and other dire illnesses, according to the U.S. Chamber of Commerce.

Future economic growth in China and India, for instance, where intellectual property theft is rampant, or better medical treatment for HIV/AIDS sufferers in, say, Thailand, where the former military government "expropriated" drug patents, will depend, in large measure, on how well those countries safeguard IP, according to the chamber.

David Chavern, the chamber's vice president; Murray Hiebert, of the chamber's Southeast Asia division; David Hirschman, president of the chamber's Global Intellectual Property Center; and Caroline Joiner, the center's executive director, spoke recently on the common interest of producers and users to protect IP.  The key point, in the chamber's view, is that without IP protection, there is no incentive for innovation and, without innovation, there is no economic growth.

They made their case in Washington before their departure for the chamber's annual global forum on innovation, creativity and intellectual property, held this year February 26-27 in Mumbai, India.

Chavern said the fundamental challenge facing the chamber is growing theft, not only by criminals who make counterfeit name-brand handbags and fake digital video discs, but also, and more disturbing, by governments.

"A broader and more disturbing trend is essentially the expropriation of intellectual property by governments with the support of NGOs [nongovernmental organizations], with noble-sounding reasons why they're doing it, but ultimately with the same effect -- crush the innovative engine, not only of our economy, but ultimately of the worldwide economy," Chavern said.

China was the site for the chamber's 2007 forum on IP protection.  The chamber considers China and India, the host country for this year's forum, as countries posing challenges to IP protection and believes both nations stand to reap economic rewards if they tackle the problem.

China, owing its current economic growth to its advantage as a low-cost manufacturer, will be restricted to low profit margins so long as IP protections remain weak, in the chamber's view.  As China transitions into a more developed economy, it will want to move beyond making products designed abroad to producing goods designed domestically, the chamber says.  "If China is after big margins in terms of future growth, it is in innovation.  IP is where economic benefits are highest.  To move up the value chain, China must better protect IP and communicate effectively about IP protection," a chamber member said.

In the industry of online video games, Chinese companies are global leaders.  Those companies are working to export their products, and they are demanding that the Chinese government clamp down on copyright and patent piracy, according to the chamber.  "I think you'll see an increasing number of industries in China begin to join and support IP, " a chamber member said.

The chamber says the Indian government "buys in" to the need for IP protection and understands its link to innovation and economic growth.  The Indian Department for Industrial Policy and Promotion, the government agency responsible for IP protection, was a co-sponsor of this year's global forum on innovation, creativity and intellectual property.  The Indian Institutes of Technology have emerged among the world's best educational institutions for engineering.  For India to develop a domestic information technology sector commensurate with the talent of its engineers, the government will have to stop IP piracy, the chamber says.

In the case of Thailand, where the former military government encouraged IP "expropriation" of drug patents, the chamber says it has seen signs of improvement since civilian rule returned in February.  The military government authorized drug patent "expropriation" on the grounds that it did not have money to buy the patented drugs for HIV/AIDS and heart disease at market prices.  The chamber calls that a short-sighted policy leading to long-term worsening of health care because “Thailand would not be able to acquire the next innovative drug if it stole the last one,” a chamber executive said.

The chamber is encouraged by statements by the new Thai prime minister and health minister that they are going to launch consultations on the issue.

In Brazil, another country where the debate over the ethics of patent infringement is ongoing, pharmaceutical companies support IP protection.  The chamber says it is not an "either-or" scenario.  Health care advances require that patients have access to drugs and that pharmaceutical companies be able to profit from the drugs they develop, the chamber says.