Brief from the AdvoKat: Hunting for IP's Nemesis

The AdvoKat

The Financial Times today contains a review article about intellectual property and in particular considers the US’s inclination to export its IP system to the world. The author, Alan Beattie, opens his analysis by making reference to Washington delivering the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) in the 1990s and the strong opposition to IP from developing countries which followed in the Doha Round of the World Trade Organization (WTO). The author then brings us up to date by reference to “controversial” talks about IP taking place in the context of the TPP (Trans-Pacific Partnership) and that the US has pressed Chile to tighten its copyright laws.  The author also reminds us that a complaint has been made by Ukraine, Honduras and the Dominican Republic against Australia at the WTO in response to its decision to require cigarettes to be sold in plain olive-green packaging.

Although the article lacks focus, the impression one is left with is that the export of a US IP system to developing countries is mostly a bad idea.  The article concludes, that few doubt there is a need for rules to protect IP but that such rules are mainly being written by the beneficiaries ["And just who are these beneficiaries?", the IPKat wonders].

Although the balancer of life,
the Greek Goddess, Nemesis,
would find difficulty finding
the creators of balance
in the IP system 

Articles like this are an easy target for criticism. There is however a point worthy of serious consideration. We know that monopoly rights are about balances between the need to protect ideas (for moral and commercial reasons) and the need to allow ideas to flow freely. Whether you are in Washington, Shenyang or Nairobi there is a balance to be struck. International treaties and government legislation provide the necessary framework for the existence and enforcement of IP rights but, other than setting the length of those rights, they say little about where the balance should be set in terms of breadth of protection. It is surely the breadth of IP rights which is a crucial factor in determining the extent to which ideas are allowed to flow through the economy. (For example, in patent law one gets little assistance from the legislature as to how broad a patent claim can be drawn if a novel gene or a novel chemical is identified; and in copyright one gets little legislative guidance as to how much material has to be taken for there to have been a copying.)  

Decisions on such matters are made by courts and patent and trademark offices. Such institutions build up a body of case law and judges and hearing officers build up personal experience of what is acceptable. 

But if not the legislature then what are the forces present at the macro level which are directing courts and administrative bodies to find where the correct balance lies? One might argue that ultimately it is the users – the monopolists and infringers – who affect the setting of this balance. This argument would be akin to the, now often criticised, ‘efficient market hypothesis’ in finance. On the other hand is the setting of the balance nothing more than a collection of largely subjective views which just happen to end up in a particular place?