The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which took effect on January 1, 1995, is one of the three "pillars" of the World Trade Organization (WTO), standing alongside trade in goods (already represented by the GATT) and trade in services in supporting the edifice of global commerce. It establishes minimum standards for intellectual property (IP) protection for all WTO members, effectively globalizing what before had largely been the domain of domestic policy. For countries that are net importers of technological innovation,1 the value of the agreement is questionable, and TRIPS has in fact been increasingly challenged as its consequences for developing economies have become clearer. Prior to TRIPS, developing countries had traditionally benefited from less restrictive intellectual property regimes. Many analysts point out that today’s industrial powers achieved development in part by freely appropriating the intellectual property of other countries. In the 19th century, for example, the United States imported British steam engine technology in spite of British prohibitions on export (Sell 2003: 64). We find a more contemporary example in South Korea, which, in its pre-TRIPS IP-related altercations with the U.S. over its failure to recognize U.S. copyrights and patents, self-consciously argued that it had "not yet reached a level of economic development sufficient to make intellectual property protection a cost-effective government policy" (Ryan 1998: 75) Subsequently, however, TRIPS has closed off this route to WTO members as a policy option, effectively "pulling up the ladder" on developing countries, to evoke an oft-used image.
It is now quite natural for us to think of failure to respect copyrights and patents as "piracy," the stealing of others’ "property," however intangible. Drawing upon the Lockean philosophical tradition, many contemporary legal scholars emphasize the "natural" rights of creators, noting that individuals have a "right to protection of their productive labor" (Epstein 2005). Neo-orthodox economists, in turn, see strong intellectual property protection as absolutely indispensable to technological and cultural innovation. Without strong intellectual property protection, they argue, creators and inventors would lack sufficient incentive to engage in their vocations. As suggested above, however, it hasn’t always been this way. The history of intellectual property has been characterized by a tension between conceiving knowledge and innovation as public goods and recognizing and protecting the private rights of authors and inventors (Sell 2003: 13, see Appendix for my attempt to sketch the relevant antinomies). Nor is the importance of strong IP protection as an incentive for innovation an unassailable proposition (see Boyle 2002). The contemporary TRIPS context happens to be one in which the rights of intellectual property holders are privileged over the interests of society at large, but there was a time when the other extreme commanded the consensus, when the appropriation of foreign intellectual property was seen not only as not dishonorable, or "piracy," but as the rendering of a public service (Drahos 2002: 32). The question this paper seeks to address is how we arrived from that point to where we are today, to a situation where a far-reaching, comparatively inflexible IP regime like TRIPS could be implemented globally with relatively little resistance.
In Private Power, Public Law: The Globalization of Intellectual Property Rights, Susan Sell suggests that the history of intellectual property is best understood as traversing three general phases: national, international, and global (2003: 10). In the national phase, intellectual property regulation was concerned primarily with protecting the rights of domestic authors and inventors, within a country’s borders. We find early examples of both copyright and patent activity in the Renaissance-era Italian city-states of Venice and Florence. Indeed, according to Michael P. Ryan, in 1474 authorities in Venice institutionalized a patent statute that "contained all the main features of contemporary patent law," recognizing the utility of such a statute for stimulating and diffusing innovation. These developments were short-lived, however, and when intellectual property statutes made their appearance elsewhere in Europe, it was in the form of royal favors accorded to privileged guilds, in authoritarian France as well as Elizabethan England (Ryan, 1998: 24). In England, the parliaments that succeeded the reign of Queen Elizabeth perceived how the monopolies generated by such favors damaged free trade, and thus worked to suppress them (Drahos 2004; Ryan 1998: 24). With this development, we begin to see the evolution of a more contemporary conception of intellectual property regulation as a practical means to foster technological progress and contribute to public well-being.2 Here France, after its Revolution, would part ways with England philosophically, opting for a conception of "natural" or "moral" rights in statutes protecting intellectual property. This led to an essentialist, even absolutist approach in which, for example, time limits played no role in the conferring of monopolies. Ryan suggests that the decline in French innovation in the 19th century may be partially attributable to the lack of pragmatism inherent in this way of thinking, which in itself was a kind of reaction to authoritarian abuse of power (1998: 37).
The United States, which would ultimately lead the charge to impose a strong IP rights regime on the global trading system in the form of TRIPS, inherited the more pragmatic thinking of its English forebears. The U.S. Constitution Article I, Section 8 establishes the authority "To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." Thomas Jefferson, who as the first Secretary of State was in charge of administering patent policy "adopted a social and economic rationale for patents rather than a natural rights rationale. The patent system was needed for the public good, to induce and reward invention that was made available to the public. It was not needed to protect the ‘intellectual property’ of the individual" (Ryan, 1998: 26). The absence here of any "natural" or "moral" rights conception of intellectual property set the stage for the long history of appropriation of foreign IP by the United States. During the 1830s, an economic depression encouraged the wholesale piracy of the English publishing industry, leading British authors–most famously, an irate Charles Dickens–to petition the US congress in 1836 for protection for non-US authors, to no avail (Sell 2003: 61). During the same time, as mentioned earlier, the US was appropriating English steam engine technology with no attribution or recompense. Meanwhile, in Europe, the "national" phase was giving way to the "international" phase with bilateral deals for mutual protection of intellectual property (losses incurred by the British book trade in particular propelled this (Sell 2003: 10, Drahos 2002: 32), and ultimately with the signing of the Berne Convention for the Protection of Literary and Artistic Works in 1886 and the Paris Convention for the Protection of Industrial Property in 1883. While these agreements did establish common principles for all parties to observe (among them non-discrmination, national treatment, and right of priority, which protected rights holders from unauthorized use), they also allowed for variation in such matters as scope and duration of the rights conferred, and the ability to choose what to patent and what not to patent (pharmaceuticals were a frequent exception). This permitted national autonomy in adjusting protection levels depending on level of economic development or in accordance with other policy objectives (Sell 11-12).
While the U.S. did demonstrate interest in international regulation for patents, given the exceptional innovations of its inventors such as Thomas Edison (while not an original signatory to the Paris Convention the U.S. did accede to it in relatively short order), it would not accede to the Berne Convention for one hundred years. Just as Dickens had led an effort to get the U.S. to protect foreign copyrights within the US, in the 1880s major American authors like Mark Twain and Walt Whitman tried to get the U.S. Senate to accede to the Berne Convention because they found their works were being copied overseas without authorization (Ryan, 1998: 50). They failed just as Dickens did, though an Act passed in 1891 did provide some gestures–however token–in the direction of protection for foreign authors within the U.S. A "manufacturing clause" in that Act offered copyright protection to foreign authors, but only under the condition that their works be printed in the U.S. (Drahos 2002: 33).
There was, however, a brief interruption in the United States’ relatively freewheeling intellectual property trajectory. The laissez-faire character of the Gilded Age of the late 19th and early 20th century induced a relaxation of concern about the deleterious effects of monopolies–including those conferred by the granting of intellectual property rights–on competition and the public welfare during that period. Sell relates the Supreme Court case Henry v. A.B. Dick & Co. (1912) which affirmed A.B. Dick’s right to deny purchasers of its mimeograph machine the right to use ink from other manufacturers with the machine, even though the ink itself carried no patent (2003: 65). But in the context of the 20th century, such excesses would prove to be exceptions to the rule. Sell writes, "Throughout most of the 20th century patents were considered to be monopolies rather than necessary incentives for innovation." From the date of the Sherman Antitrust Act onward (while the act was passed in 1890, it was not used extensively until Roosevelt took office at the turn of the century), and especially from 1940s through the early 1980s, patents were largely denigrated in the U.S., to such an extent that even an opponent of strong IP regimes like Sell suggests that American innovation suffered in fields like consumer electronics, for "few American businesses were willing to undertake the financial risks of commercializing new technologies" (2003: 66-67).
So what happened in the early 1980s to turn the tide? How did we move from the "national" and "international" phases of IP history, in which the U.S. (and other countries) took full advantage of their sovereign right to implement flexible IP policies domestically, to today’s "global" phase of strong, multilaterally harmonized IP rights? Given that it was the United States that first conceived and then pushed most aggressively for the TRIPS regime, answering the question requires an examination of events and circumstances in that country during this period.
To begin with, during the 1970s and early 1980s, the United States began to experience losses in its share of world trade, even as sizable trade surpluses turned to massive deficits. The challenge posed by Japan led to the development of a "policy discourse … of a United States in decline," which was at least partially attributable to Japanese appropriation of American know-how (Drahos 2004). At the same time, there was growing recognition of the importance of knowledge and innovation for the American economy, as well as the importance of foreign markets for products based on that knowledge and innovation. Starting as early as 1977 the so-called "copyright industries" grew at an annual average rate double that of economy as a whole (Ryan, 1998: 10). Furthermore, fully 40% of the value of publicly traded American companies came from intangible assets (Cukier 2005: 3).3 The stakes for the U.S. economy were accordingly high.
Sell suggests that the trend toward financial liberalization and deregulation, which began in the early 1970s with the demise of the Bretton Woods regime of fixed currency rates, also had an impact on thinking about intellectual property policy. More specifically, what was regarded by many as a "retreat of the state" during this period is more accurately seen as a "’state-market’ condominium defined as ‘a changing balance of public and private authority within the state’" (2003: 19). That is, in a context of deregulation, the state could no longer be relied upon directly to put the interests of the public at large ahead of those of private interests; privileging the latter was presumed to have "trickle-down" effects which would enhance public welfare as well. Also significant in this connection, then, was the influence of the orthodox "Chicago school" of economics on the Reagan administration, which took office in 1981. Under Reagan, "the executive agencies viewed the economic incentives provided by intellectual property rights as a legitimate means of extracting the full economic benefit from innovation" (Sell 2003: 73).
These changes in the composition of American economic activity and in economic thinking began to be felt juridically as well, when the Supreme Court stated in its ruling on Dawson Chem. Co. v. Rohm & Haas Co. (1980) that "the policy of free competition runs deep in our law … but the policy of stimulating invention that underlies the entire patent system runs no less deep" (Sell 2003: 67). A related development was the centralization of jurisdiction regarding patent cases in the Court of Appeals for the Federal Circuit (CAFC) in 1982. In 1986 the CAFC heard the landmark case Polaroid vs. Kodak, which ended in a judgment of a whopping $1 billion in damages to be awarded to Polaroid for Kodak’s infringement of its patented instant photography technology. This decision convincingly demonstrated the irrevocably pro-patent trend of the courts, and also taught business that patent infringement was no longer a viable option (Sell 2003: 71-72).
Against such a backdrop, the American government became increasingly receptive to the strong IP rights message broadcast by those with an interest in IP policy reform. Chief among those were the pharmaceutical giant Pfizer, which sought reform of the Paris Convention in order to impose minimum global standards for patent protection, and IBM, which, while also interested in patent reform, sought primarily to make software copyrightable, within the context of the Berne Convention (Ryan 1998: 68). These and other major multinational corporations with strong interests in both patents and copyrights, devised a strategy of pushing their case for strong IP rights through various institutional and communications channels. The Advisory Committee on Trade Policy and Negotiation (ACTPN), for example, established by the 1974 Trade Act, "institutionalized business input into US trade policy and multilateral negotiations," and was initially chaired by Pfizer CEO Edumund T. Pratt (Ryan 1998: 68). From this position, Pfizer managed to have an enormous impact in diffusing its message within government, among corporate leaders, and among the general public, by way of speeches to trade associations, editorials in major U.S. media,4 and contributions to major policy think tanks like the American Enterprise Institute and even the left-leaning Brookings Institution. In the case of this latter strategy, of particular interest for our brief history is that given the pro-free trade bias of these groups, and given the inescapable fact that intellectual property necessarily confers a kind of monopoly, "Pfizer … had to relocate the intellectual property issue within a frame of fundamental liberal values–the individual right of property ownership; the right to a reward for labour; fairness" (Drahos 2004). The discourse of "piracy" that dominated the editorializing about the issue fulfilled a similar legitimizing function. Such a rhetorical strategy in effect turned Jefferson’s pragmatic approach, described above, on its head, restoring to respectability the more antiquated–largely French in origin–discourse about the "natural" and "moral" rights of authors and inventors.
The efforts of Pfizer and IBM (and their partners who would ultimately join them in the Intellectual Property Committee going into the Uruguay Round negotiations5 ) to legitimize their strong IP rights program flourished in the circumstances described above, and ultimately led to the establishment of TRIPS. The question of how developing countries were persuaded to agree to an arrangement that was clearly contrary to their interests is a topic for another paper (suffice it to say that coercion played no minor role), but the legitimacy of the regime has been increasingly called into question. In November 2001, for example, a coalition of developing countries managed to persuade the WTO to recognize the primacy of public health over IPR, and allow for flexibilities on patent law implementation with regard to pharmaceuticals. The recognition was codified in the Doha Declaration on Public Health. Perhaps of less immediate significance, but also interesting, is the emergence of Free and Open Source Software, with which the necessity of strong IP rights as a sine qua non incentive for innovation is being increasingly challenged, undermining at least one of the justifications for a strong IP rights regime like TRIPS. Despite the proliferation of so-called "TRIPS-plus" bilateral accords that impose minimum standards for IP protection that are even more stringent than those of TRIPS, if we’re optimistic, we may conclude at the very least that the future of TRIPS does not appear as secure as it once did. The pendulum of intellectual property history may have reached the apex of the current arc.
|||"Of the 3.5 million patents in existence in the 1970s, the decade before the TRIPS negotiations, nationals of developing countries held about one per cent." (Drahos 2004)|
|||England’s Statute of Monopolies in 1623, for example, was intended "to make the patent add to public wealth" (Ryan, 1998: 24)|
|||Today, according to Cukier, that figure is as high as 75%.|
|||Perhaps the most significant of these was an opinion piece titled "Stealing From The Mind" and published in the New York Times on 9 July 1982.|
|||For the record, the original members of the IP Committee were Pfizer, IBM, Merck, General Electric, DuPont, Warner Communications, Hewlett-Packard, Bristol-Myers, FMC Corp., General Motors, Johnson & Johnson, Monsanto, and Rockwell International (Ryan 1998: 69).|
Boyle, James. "Fencing off ideas: Enclosure & the disappearance of the public domain," Daedalus, Spring 2002. Also available online at: http://www.findarticles.com/p/articles/mi_qa3671/is_200204/ai_n9042086
"The Constitution of the United States," http://www.archives.gov/national-archives-experience/charters/constitution_transcript.html
Cukier, Kenneth. "A Market for Ideas: A survey of patents and technology." The Economist, 22 Oct 2005.
Drahos, Peter and John Braithewaite. Information Feudalism : Who Owns the Knowledge Economy? New York: New Press, 2003.
Drahos, Peter and John Braithewaite. Drahos: "Who Owns the Knowledge Economy?: Political Organising Behind TRIPS," Corner House Briefing 32, http://www.thecornerhouse.org.uk/item.shtml?x=85821
Epstein, Richard A. "The Creators Own Ideas," Technology Review, June 2005. Online: http://www.technologyreview.com/read_article.aspx?id=14503&ch=infotech
Ryan, Michael P. Knowledge Diplomacy: Global Competition and the Politics of Intellectual Property. Washington: Brookings Institution Press, 1998.
Sell, Susan. Private Power, Public Law: The Globalization of Intellectual Property Rights. Cambridge: Cambridge UP, 2003.
World Trade Organization. "Doha Declaration on Public Health", http://www.wto.org/English/thewto_e/minist_e/min01_e/mindecl_trips_e.htm