I. Introduction Brazil must choose the right path: innovation vs. opportunism.The Purpose of this White Paper
The purpose of this article is to reintroduce Re`in`tro`duce´
v. t. 1. To introduce again.
Verb 1. reintroduce - introduce anew; "We haven't met in a long time, so let me reintroduce myself"
re-introduce the notion of private property rights into the current global debate about the utility of intellectual property (IP) in promoting scientific and technological invention and innovation. (1) This article argues that, if the Government of Brazil reexamined the elements of and rationale underlying the international recognition of private property rights, including intellectual property rights (IPRs) (i.e., patents, trade secrets, copyrights, etc.) it would see how it could dramatically improve Brazil's future scientific, technological, and economic prospects. This article also argues that, based on the successes experienced in other countries that have rediscovered the value of intellectual property rights, the Brazilian government would inevitably be able to promote the indigenous innovation, domestic entrepreneurship, foreign direct investment, and R&D-related technology transfers necessary to catapult Brazil to national and international advancement.
This article, furthermore, explains how, by choosing to proceed down the opportunistic 'open source'/ universal access path of development, which eschews the concept of private property, including privately held IPRs, in favor of plentiful and cheap public knowledge, Brazil risks the success of its own IP-rich domestic industries. These include mostly small and medium-sized enterprises, many of which rely on know-how and innovation to survive and flourish. In addition, this article explains how governmental failure to strike the right balance between private and public property rights when designing a national innovation system can actually jeopardize the very public goods--knowledge, technology, human health, environmental protection and poverty alleviation (i.e., economic freedom (2 3 4) as well as political freedom)--that open source/universal access methods cannot possibly provide.
Moreover, this article describes the significant and indispensable role that private IPRs and innovation have played in the history of national Industrialization industrialization
Process of converting to a socioeconomic order in which industry is dominant. The changes that took place in Britain during the Industrial Revolution of the late 18th and 19th century led the way for the early industrializing nations of western Europe and and development. It also cites the important distinctions between the individual-centric (American) and state-centric (Europe-Japan-China-India) innovation systems that Brazil must consider as it reevaluates its policy options. Although there is historical precedent upon which Brazil apparently relies to justify its opportunistic IP behavior, the previous international order that fostered such conduct no longer exists, and the former protagonist nations themselves have since been in the process of politically and economically evolving. Indeed, the more respectful of private property rights and law-abiding emerging and developing economies in Asia, Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. and the Middle East have become, the greater the prosperity and access to healthcare and knowledge their citizens have enjoyed.
Brazil Promotes a New Global Paradigm that Favors IP Opportunism Opportunism
squire’s wife matchmakes with money in mind. [Br. Lit.: Doctor Thorne]
shrewdly and unscrupulously becomes merchant prince. [Yiddish Lit.
The Brazilian Government has undertaken a number of provocative activities internationally within intergovernmental fora to challenge the established global system that protects exclusive private property rights, including intellectual property rights (IPRs), championed by the developed nations of the Organization of Economic Cooperation and Development (OECD OECD: see Organization for Economic Cooperation and Development. ). These fora include the WTO See World Trade Organization. , WHO, WIPO WIPO World Intellectual Property Organization
WIPO World Intellectual Piracy Organization (satire website)
WIPO Write in Poll Option
WIPO Wing Information Protection Office (USAF) , UNCHR UNCHR United Nations Commission on Human Rights , UNDP UNDP United Nations Development Programme
UNDP Unión Nacional para la Democracia y el Progreso (National Union for Democracy and Progress) , UNEP UNEP United Nations Environment Program(me)
UNEP Unbundled Network Element Platform
UNEP University of Northeastern Philippines and UNESCO UNESCO: see United Nations Educational, Scientific, and Cultural Organization.
in full United Nations Educational, Scientific and Cultural Organization . (5) * There, Brazil has assumed a leading role in helping to promote a new global paradigm that calls for the current high technology, knowledge and information-based digital era to become 'universally accessible, 'open source', and essentially 'free of charge" to developing countries--i.e., 'public international goods'. Brazil, along with a growing chorus of developing nations, activists and self-proclaimed 'new social and environmental thinkers', has alleged that such an IPR-counter paradigm is consistent with an expansive notion of 'sustainable development (SD). (6 7) Brazil has opportunistically defined itself, for these purposes, as a 'developing' country.
Sustainable development Sustainable development is a socio-ecological process characterized by the fulfilment of human needs while maintaining the quality of the natural environment indefinitely. The linkage between environment and development was globally recognized in 1980, when the International Union , (8) as defined in this context, is premised on the need to secure continuous international 'science and technology IP transfers' (9) at concession rate prices. (10) Anti-market, anti-private property and anti-WTO advocates, and increasingly, American internationalists, believe that this is necessary in order to prevent the emergence of extreme economic, scientific, technological and social disparities and popular backlashes against globalization globalization
Process by which the experience of everyday life, marked by the diffusion of commodities and ideas, is becoming standardized around the world. Factors that have contributed to globalization include increasingly sophisticated communications and transportation that will likely threaten international peace and security, (11 12 13 14 15) These advocates also claim that such actions are called for within the Millennium Development Agenda goals so that developing countries may liberate themselves from endemic poverty and ultimately achieve economic and social parity with the developed world. (16) In other words Adv. 1. in other words - otherwise stated; "in other words, we are broke"
put differently , 'sustainable development', a concept originally articulated almost twenty years TWENTY YEARS. The lapse of twenty years raises a presumption of certain facts, and after such a time, the party against whom the presumption has been raised, will be required to prove a negative to establish his rights.
2. ago, has since been effectively hijacked and shaped, by politically astute social, health and environmental activists and socialist-minded government bureaucrats, into a negative anti-development, anti-market, anti-private property and anti-WTO doctrine, largely modeled alter the European welfare state. (17) Many such individuals have long been able to influence policymaking pol·i·cy·mak·ing or pol·i·cy-mak·ing
High-level development of policy, especially official government policy.
Of, relating to, or involving the making of high-level policy: in Europe and the United" Nations, even without fully understanding science, technology, economics or trade. (18)
However, recent research has shown how the pursuit of such a negative paradigm of sustainable development actually harms rather than helps developing country prospects for scientific, technological and economic advancement. (19) And, prior research, as well, performed by famous French author and historian Alexis de Tocqueville Noun 1. Alexis de Tocqueville - French political writer noted for his analysis of American institutions (1805-1859)
Alexis Charles Henri Maurice de Tocqueville, Tocqueville , recognized how exclusive private property ownership in 19th century America held a positive and taming influence over the dark forces of revolution and war which had then plagued continental Europe. (20)
Evidently, the Government of Brazil has been influenced and encouraged by the populist campaigns waged by developing nation governments and utopian-minded social and environmental activist groups (the modern-day "revolutionaries') that are aimed at (intended to ingratiate in·gra·ti·ate
tr.v. in·gra·ti·at·ed, in·gra·ti·at·ing, in·gra·ti·ates
To bring (oneself, for example) into the favor or good graces of another, especially by deliberate effort: ) the 'common people'--the underprivileged (poverty-stricken) masses. Comprised of mostly political and economic socialists, activist nongovernmental organizations (NGOs), and anti-private property and anti-free market academics, (21 22 23), these groups are well skilled in manipulating public opinion and the organs of the United Nations to promote an alternative global framework that minimizes private property ownership rights and the role of 'neo-liberal economics'. Brazilian politicians are also, to some extent, observing the current political debates within the U.S. over patent system reform (24 25 26 27) and concerning the utility of the current regulatory framework by which hi-tech industries commercialize U.S. federally funded university-based R&D. (28 29 30) Their goal is to exploit these debates in order to undermine exclusive U.S. private property rights both domestically and abroad. (31) * (32 33 34) ** Unfortunately, these crosscurrents have generated more policy conflict than consensus among the various expert groups within the Government of Brazil. One may even speculate that this lack of consensus has emboldened em·bold·en
tr.v. em·bold·ened, em·bold·en·ing, em·bold·ens
To foster boldness or courage in; encourage. See Synonyms at encourage.
Adj. 1. Brazil's ruling party to promote a culture of political and economic opportunism within Brazil--intended to mask internal Brazilian systemic deficiencies--that has now transcended national boundaries. (35)
Brazil's Innovation Conundrum conundrum A problem with no satisfactory solution; a dilemma
The industrializing economy of Brazil possesses many favorable competencies and capabilities owing to owing to
Because of; on account of: I couldn't attend, owing to illness.
owing to prep → debido a, por causa de its cultural diversity, its growing technological know-how, and its expanding entrepreneurial class. As with any new global power, Brazil has its own national interests at heart when it participates in the international arena and seeks to influence international policymaking. Yet, it also speaks increasingly for the member nations of the developing world from which it has largely emerged. This is as much an honor as it is a serious responsibility.
Brazil is a country rich in entrepreneurial spirit, economic growth opportunities, and natural resources. However, it lacks the core human capital (36 37 38) (to invent) and a market-friendly enabling environment that incorporates strong IPRs (market-based incentives to innovate), and this has largely impaired its ability to develop the indigenous know-how and the commercial innovations (39) that will maintain and improve Brazil's international economic and technological competitiveness during the twenty-first century. (40) This deficit in human capital, namely, education, (41) has presented Brazil with a major challenge as it endeavors to become a world power in its own right and a spokesperson for the developing world. Brazil also has other unsustainable domestic spending priorities that compromise its national healthcare and knowledge dissemination policies. It has become increasingly apparent that, in order to remedy its internal problems, Brazil has helped to design an updated new international economic order (42) for all developing economies.
The Government of Brazil has recently focused on two key policy areas--global information technology and global health to help promote the 'public international good' of global knowledge. It has articulated a national and international position concerning each of these areas that speaks at one-and-the-same time about the benefits to society of creating scientific and technological know-how and innovation, and about the need to make that know-how universal and accessible to all at least cost. However, within its own borders, the Brazilian government has been unable to identify the mechanism that will enable it to convert Brazil's indigenous know-how into a form that may be used as a sustainable engine of national and international economic growth.
To remedy its national knowledge deficit, the Government of Brazil recently enacted a national technical innovation law. Its objective is to promote public-private collaborations for basic research and development and product/process commercialization between Brazil's well recognized public research institutes and universities and the various sectors of Brazilian industry, especially its entrepreneurs. Unfortunately, the new Brazilian innovation law does not incorporate the key elements of the successful U.S. innovation system based on the Bayh-Dole Act The Bayh-Dole Act or University and Small Business Patent Procedures Act is a piece of United States legislation from 1980. Bayh-Dole is codified in 35 U.S.C. 200-212, and is implemented by 37 C.F.R. 401. of 1980. Instead, it borrows from prior failed state-centric innovation models. Most importantly Adv. 1. most importantly - above and beyond all other consideration; "above all, you must be independent"
above all, most especially , there does not appear to be a legal and economic mechanism to transfer, on an exclusive basis, the knowledge generated as the result of public, private, or public-private R&D collaboration efforts, to private companies for the purpose of market commercialization. There is also no evidence that the know-how, once transferred to and transformed by Brazilian companies into useful products and service innovations, and the associated revenue streams, would be considered exclusive private property deserving of protection under Brazilian domestic law.
Private Property and the Established International Order
Clearly, the age-old tension between what is and should be "private' versus 'public' property (i.e., as concerns both tangible assets and intangible know-how) and how governments should protect and regulate each, is central to Brazil's current dilemma. Political debates over property rights continue to arise in numerous countries throughout the world. (43) Such debates have taken place, for example, in China, (44 45 46) India, France, (47 48 49 50 51 52 53) Finland, Norway and Sweden, (54 55) the EU, (56) and the US. (57) Typically, they result from objections raised by ex-communists, newly reconstituted socialists (58), environmental extremists, trade protectionists, and/or health care and open-source technology activists whom are dissatisfied with their lack of economic success, influence or opportunities. (59) Their prescribed antidote is to reverse the process of globalization, and to secure, at both the national and international levels, greater public welfare benefits at the expense of private interests--i.e., they favor a stated public policy of societal parity over societal progress. (60) In some countries, including Brazil, such groups have exacerbated the division between these two forms of property ownership, and have called for the imposition of more regulation, both nationally and internationally, to redefine and limit how science, technology and industrial (IP) know-how should be generated, accessed and utilized. (61)
Obviously, each nation possesses the sovereign right to choose how to balance these two types of property ownership, including transcendental human knowledge and creativity. However, that right is subject to the well established international principles of law, economics and politics (the "international order') institutionalized (62) by the Bretton Woods Bretton Woods can refer to:
While this order may have some objectionable features, as has been pointed out, time and again, by the nations of Europe, and increasingly by Brazil and Argentina as they speak up on behalf of the developing world it can, nevertheless, be argued that it has been, and continues to be, an overwhelming success. It has created the greatest sustained engine of international economic growth and prosperity, improved human health and education, and technological innovation the world has ever known. (63) As complex and elaborate as it has become, this order has remained, nonetheless, flexible enough to permit provisional derogations upon demonstration of genuine national needs and exigencies. Most notable among these, are the issues of abject poverty, and the potentially serious, health (epidemic and pandemic pandemic /pan·dem·ic/ (pan-dem´ik)
1. a widespread epidemic of a disease.
2. widely epidemic.
Epidemic over a wide geographic area.
n. ) and environmental risks that are determined, as a matter of empirical science, to result from technological advancement. In each of these situations, government policymakers employ principles of equity and risk management to govern the development, use and deployment of innovations and technologies, as circumscribed circumscribed /cir·cum·scribed/ (serk´um-skribd) bounded or limited; confined to a limited space.
Bounded by a line; limited or confined. by legal, scientific, and economic frameworks designed to balance societal and individual interests. (64)
As noted, the established international order and the institutions (65) that support it are strongly rooted in the recognition and protection of strong private property rights, adherence to the rule of law, benchmarked objective science and economic cost-benefit analysis, and continuous incentive-based technological innovation. Together, these principles have reinforced the universally accepted proposition that private property, economic growth, industrialization, innovation and trade are good things in themselves and must be promoted and preserved.
"The fundamental purpose of property rights, and their fundamental accomplishment, is that they eliminate destructive competition for control of economic resources. Well-defined and well-protected property rights replace competition by violence with competition by peaceful means (emphasis added). (66)
This result is not only desirable, but also essential, because these mechanisms also constitute perhaps the only remedy to the poverty, ill health and environmental degradation that pervades developing nations and threatens peace.
"Poverty, not trade, is the underlying cause of worker exploitation and environmental degradation in developing countries. These social ills are symptoms of a disease for which trade is the cure, not the cause. In the long run, the single best way to encourage developing countries to enforce workers' rights and protect the environment is to transform them into middle-income countries. Freer trade is an important mechanism through which the United States can assist in alleviating global poverty, because it provides an engine for economic growth in the developing world. Trade increases economic growth in developing countries; growth reduces poverty and its concomitant social ills.
Trade expansion directly and indirectly promotes democratic values by pushing countries toward policies that are compatible with democracy. For free trade to yield the greatest economic gain, governments must acquire a healthy respect for economic freedom, the rule of law, and well-defined property rights. These attributes are prerequisites of a functioning liberal democracy. Trade also contributes to greater income growth in poorer countries. By increasing economic growth, trade liberalization lib·er·al·ize
v. lib·er·al·ized, lib·er·al·iz·ing, lib·er·al·iz·es
To make liberal or more liberal: "Our standards of private conduct have been greatly liberalized . . . facilitates democratization de·moc·ra·tize
tr.v. de·moc·ra·tized, de·moc·ra·tiz·ing, de·moc·ra·tiz·es
To make democratic.
de·moc , as wealthy countries are more likely to have stable democratic regimes. Among political scientists, it is a truism that freer trade, combined with international organizations and democratic institutions, reduces violent interstate conflict. Some studies go further, arguing that it is economic freedom itself that reduces the likelihood of war" (emphasis added). (67)
A basic definition of property can help to elucidate the relationship between persons and things.
"It determines the fights that persons have in things. Typically, the existence of such rights is predicated on two factors: (1) whether the person has sufficient ability to control possession, use, and transferability of the thing; and (2) whether the underlying policies of the law are furthered by bestowing property rights on the thing. When a person has the unrestricted right to possess, use, and transfer a thing, it is granted property status and the person is the owner of the thing. When a person has no fights of possession, use, and alienation, the thing is denied property status, and it becomes part of the public domain. If the fight to possess, use, and transfer a thing is within these two extremes, the determination of whether to grant or withhold property status must be based on what will further the underlying policies of the relevant body of law. This conclusion is supported by the numerous things that are granted property status despite the existence of limitations and restrictions on the possession, use, or transferability of the thing." (68)
Property is described rather broadly for this purpose. It includes tangible natural assets and resources, especially raw land and converted real estate, as well as, manmade structures and personal assets. Each type of tangible property tangible property n. physical articles (things) as distinguished from "incorporeal" assets such as rights, patents, copyrights, and franchises. Commonly tangible property is called "personalty. can be properly managed for both private and public benefit, given the right incentives.
In addition, property also has increasingly encompassed intangible human know-how, ideas and creativity (intellectual property) that can and inevitably do lead to inventions and incremental and breakthrough innovations that benefit both individuals AND society. (69)
"There are two basic underlying policies of intellectual property law. The first is to secure for the public the benefits of intellectual property. Granting property status to ideas provides an incentive for innovators to develop new ideas by giving the innovator the right to control use of the idea. As a result, the public will gain the benefit of the idea because economic motives will spur the innovator to share it with the public. The second policy underlying intellectual property law is to regulate and manage competition. Innovators should be entitled to monetary gain from their ideas. Nevertheless, the control of ideas is inimical inimical,
n a homeopathic remedy whose actions hinder, but do not counteract those of another. Also called
incompatible. to a free society because it may allow monopolization mo·nop·o·lize
tr.v. mo·nop·o·lized, mo·nop·o·liz·ing, mo·nop·o·liz·es
1. To acquire or maintain a monopoly of.
2. To dominate by excluding others: monopolized the conversation. of ideas. Therefore, intellectual property law attempts to regulate or manage competition by granting or withholding property status. Thus regulation strikes a balance between rewarding a person for intellectual achievement and the societal importance of maintaining marketplace competition. The granting of property status to ideas is consistent with the basic definition of property" (emphasis added). (70)
An individual's right to own and enjoy real and personal property, including intellectual property (IP), and the inventions and innovations derived from it, to the exclusion of all others, has had historical, moral and philosophical significance both before (71 72) and after the development of 18th century English common law. (73) Since that time, the U.S. Constitution and its accompanying Bill of Rights have recognized such a right in property as one of the most fundamental, inalienable Not subject to sale or transfer; inseparable.
That which is inalienable cannot be bought, sold, or transferred from one individual to another. The personal rights to life and liberty guaranteed by the Constitution of the United States are inalienable. and liberating, of all natural and civil rights guaranteed to U.S. citizens. (74 75 76) * Since 1948, this right has also been recognized and defined as a fundamental and inalienable human right. (77) In addition, since 1992, the Constitution of the independent and sovereign Republic of Mongolia, within its Chapter 2 entitled "Human Rights and Freedoms" and Article 16 entitled "Citizens' Rights", expressly provides for the protection of exclusive private property rights, including patents and copyrights. (78)
The Brazilian Government has undertaken a number of provocative acts nationally and internationally that jeopardize this fundamental right, each of which strongly signals an intention to indirectly 'take' foreign (including U.S.) patents and trade secrets for Brazilian 'public use' without 'just compensation'. Both the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights
The Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS ('TRIPS') (79 80) and the World Intellectual Property Organization ('WIPO') (81) Agreement recognize and protect exclusive individual private property rights, as do the Universal Declaration of Human Rights Universal Declaration of Human Rights
Declaration adopted by the United Nations General Assembly in 1948. Drafted by a committee chaired by Eleanor Roosevelt, it was adopted without dissent but with eight abstentions. and other international instruments. (82 83 84 85)
Exclusive Private Property Rights are Essential for Innovation
One of the key features of private property is its exclusive nature.
"A property right is the exclusive authority to determine how a resource is used, whether that resource is owned by government or by individuals ... Private property rights have two other attributes in addition to determining the use of a resource. One is the exclusive fight to the services of the resource ... That is the right to the services of the resources (the rent) ... Finally, a private property fight includes the fight to delegate, rent, or sell any portion of the fights by exchange or gift at whatever price the owner determines (provided someone is willing to pay that price) ... Thus, the three basic elements of private property are (1) exclusivity of rights to the choice of use of a resource, (2) exclusivity of rights to the services of a resource, and (3) fights to exchange the resource at mutually agreeable terms" (emphasis added). (86)
"Ideas that can be exclusively possessed, used, and transferred by a person are granted property status. Once control of an idea is lost to the public, property status ends. The concept of novelty has been developed to determine whether a person has control of an idea, If a person develops a new idea that is not generally known, the idea is novel and potentially subject to property status. This result is consistent with the basic definition of property because it recognizes that an idea that is both new and not generally known can be controlled by its creator. Likewise, an idea which is not new or is generally known cannot be controlled by an individual; hence, it is not appropriate subject matter for property status" (emphasis added). (87)
There is now growing recognition, due to the leading work of Latin American economist Hernando De Soto de So·to , Hernando or Fernando 1496?-1542.
Spanish explorer who landed in Florida in 1539 with 600 men and set out to search for the fabled riches of the north. , that exclusive private tangible real property ownership is fundamental to the operation of capitalism. In addition, there is also a greater understanding of how real property's formal recognition and protection in law can bring many intangible economic and societal benefits (economic as well as political freedom) to developing country citizens--i.e., once land and improvements thereto have been legally titled, registered, collateralized and exchanged and enforced in courts of law. (88) According to according to
1. As stated or indicated by; on the authority of: according to historians.
2. In keeping with: according to instructions.
3. Dr. De Soto,
"We were told that there is something about the Latin American culture that is not compatible with capitalism. We don't see that ... it's not that poor, pest-communist countries don't have the assets to make capitalism flourish ... [rather, it] ... is that such countries have yet to establish and normalize normalize
to convert a set of data by, for example, converting them to logarithms or reciprocals so that their previous non-normal distribution is converted to a normal one. the invisible network of laws that turns assets from 'dead' into 'liquid' capital." (89 90)
Given the success of Dr. De Soto's Latin American real property title registration and enforcement program, developing country citizens should expect even greater economic and social benefits to flow from formal government recognition, and enforcement in law of personal intangible (intellectual) property ownership. In other words, the premise underlying Hernando De Soto's work with real property is equally applicable and analogous to intellectual property. At least one legal expert agrees with this position.
"De Soto's argument largely focuses on real property, but it applies to intellectual property with equal force. A vast amount of intellectual capital in the developing world is underdeveloped." (91)
This is especially important if developing countries are to emerge from poverty during the fast-paced science, technology, and information-based age in which we now live.
Unlike tangible property which tends to be finite as to size and use (what economists refer to as 'rival' goods), however, intangible properly, such as ideas, expressions and know-how, has no such boundaries. Intangible property intangible property n. items such as stock in a company which represent value but are not actual, tangible objects. , comprised of ideas, especially know-how, is essentially limitless--limited only by human imagination and the ability of national and international policymakers to understand, embrace, and harness it for individual and societal ends. Since know-how, which economists now refer to as a "non-rival' good, (92) has already become, in many ways, the new global engine of future scientific, technological, and economic growth, it should be managed prudently.
The World Bank's recently released "Doing Business 2007' report (93) seems to corroborate To support or enhance the believability of a fact or assertion by the presentation of additional information that confirms the truthfulness of the item.
The testimony of a witness is corroborated if subsequent evidence, such as a coroner's report or the testimony of other Dr. De Soto's thesis and experience. With respect to Brazil, in particular, it found that "Registering property in many Brazilian states is difficult in comparison with the rest of Latin America. In the 12 states and the Federal District, an entrepreneur spends on average 61 days and 3.5% of the property value to register property". (94) According to the Bank's accompanying 'Doing Business in Brazil 2007' report, these and other statistical indicators led the Bank to rank Brazil "17[th] out of 22 countries in Latin America ..." This poor showing foreshadowed Brazil's less than stellar performance in the Bank's overall global 'ease of doing business rankings': 121 out of 175 countries evaluated i.e., Brazil was only in the 31st percentile. (95)
Given the conceptual parallels between real property and intangible property registrations, and the actual findings of Dr. De Soto and the World Bank concerning the relationship between business' economic performance and the cost and efficiency of government real property registration systems, one must conclude that Brazil's inefficient real property registration system is a negative harbinger of its IP registration system. Indeed, this white paper discusses, in later sections, how various technological, economic and social problems have flowed from Brazil's troubled IP registration and protection/enforcement systems.
Experts agree that there is nothing to prevent the Government of Brazil and its local industries from creating and commercializing their own indigenous know-how. However, Brazil must first accept that there is a more efficient and socially appealing way to do so--through recognition and vigorous enforcement of IPRs. Brazilian citizens are, certainly, not any less inventive than those living in OECD countries, and consequently, the Brazilian government should not adopt policies that assume that they are.
"If people seem to be more inventive in the United States or Europe or Japan, it is not an accident. It is not because of genes or schooling or intelligence or fate. Implementation of the intellectual property system is critical because of the habit of mind which is fostered in the population. Human ingenuity and creativity are not dispersed unevenly across the globe. Those talents are present in every country. In some, unfortunately, the enabling infrastructure of effective intellectual property protection is missing." (96)
Arguably, the current (albeit imperfect) U.S. intellectual property rights framework that covers patents, copyrights and trademarks memorializes the most successful balance thus far struck between private and public intangible property rights. Many of its key features are contained within the provisions of the WTO's TRIPS Agreement and the WIPO Agreement. TRIPS, however, also borrowed certain of its language from the competing frameworks of other countries, including the member states of the European Union and other OECD members, which incorporate a number of civil society championed flexibilities. At the very least, both the U.S. and the EU frameworks recognize society's need to foster individual as well as collective experimentation and discovery, as a matter of human nature and societal necessity. Moreover, they each acknowledge that significant emotional and economic costs will be incurred and capital, technological, and human resources The fancy word for "people." The human resources department within an organization, years ago known as the "personnel department," manages the administrative aspects of the employees. expended incident to the innovation process, which not all people are willing or able to bear.
The U.S. and EU frameworks, however, have tended to diverge according to the extent that they reward inventors and innovators for the investment risks they have undertaken, and this tension is now being felt at the WTO and other international fora. In exchange for bearing such risks, the U.S. IPR IPR Intellectual Property Rights
IPR Inprocess/Inprogress Review
IPR Industrial Property Rights
IPR Institute for Policy Research (Northwestern University and University of Cincinnati)
IPR Institute of Public Relations system, in particular, rewards inventors, innovators and their financial sponsors and co-venturers with a temporary market monopoly (exclusivity). (97 98) Such an incentive is designed to allow them to not only recoup their out-of-pocket costs for basic research, but also to recoup their costs and profit from the commercialization of their inventions, for a limited legally protected period of time. It is understood, that the fruits of their labors will diffuse throughout and benefit society overall as the innovations they have created become incorporated and embedded bit, by bit, into everyday products, services and activities, that will eventually serve as the seeds of tomorrow's new inventions.
The EU and its member states, however, have embraced a less private property-centric approach to rewarding innovation, and that has had an increasingly negative impact on the innovation potential of European pharmaceuticals, biotechnology, (99) computer software, and information and communication technology sectors. For example, Europe's relatively weaker (100 101) but more expensive (102 103) IPR protections circumscribed by civil law notions of 'ordre public', equity and morality, (104 105) freedom of expression and human rights, (106) overly restrictive regulatory policies, and mandatory price caps, more or less, favor public interests over private interests, and this has had a serious chilling effect This article or section may deal primarily with the U.S. and may not present a worldwide view. on national and regional innovation and competitiveness. In addition, such policies have strengthened the political influence of national socialist parties and civil society activist organizations, which have increasingly demanded institutionalization Institutionalization
The gradual domination of financial markets by institutional investors, as opposed to individual investors. This process has occurred throughout the industrialized world. of what were once purely academic notions (open source and universal access information technology and health care). In response to these growing anti-private property and anti-free market movements, a growing number of European-based multinational companies have shifted their research and development facilities and innovation activities to other nations with laws more favorable to and protective of private property. The U.S. has been the primary beneficiary of such capital flows. (107 108) Predictably, the European Commission has responded by urgently reforming its regional and global policies concerning R&D investment and innovation in order to stem industry flight and the accompanying brain drain brain drain
The loss of skilled intellectual and technical labor through the movement of such labor to more favorable geographic, economic, or professional environments. .
The Government of Brazil has observed these negative European developments, and it is aware that America's lead in innovation and technology development has continued to provide its industries and citizens with a significant competitive advantage over their international counterparts. Yet, Brazil continues to embrace and promote policies that threaten the individual private property rights of both foreign and domestic investors, in the hope of securing illusory state benefits. (109) Of particular concern, is the Brazilian government's adoption of the populist doctrines of 'free and open source' (FOS FOS
free on steamer ) and universal access as national policy.
Brazil Must Choose the 'Right Path'
These external and internal forces have arguably led the Brazilian government to challenge the carefully negotiated international trade rules found within the TRIPS Agreement that it, along with other WTO members, previously agreed to uphold. They have also led the Government of Brazil to threaten the exclusive private property holdings of the very same internationally focused companies that, along with Brazilian domestic small and medium-sized businesses, develop and produce the technologies and know-how upon which Brazil now depends for its present and future innovation and welfare. And, it is doing so believing that it is in compliance with the WTO TRIPS Agreement and the WIPO Agreement. According to at least one expert, however, it is not only what Brazil says it is doing concerning IPRs, as evidenced by its IPR legislation, that counts; rather, it is also how the investment community perceives what Brazil is actually doing, as measured by its IPR enforcement.
"... [S]ome in Brazil express the view that basically the country has a good intellectual property system ... This view is plausible because it is common to assess protection in terms of specific statutory provisions. This misses the importance of overall marketplace effect as the critical test of an intellectual property system. The test of whether protection is weak or not is determined by the net marketplace effect of the interrelated parts of an entire system. More precisely, it is determined by people's decisions made in reaction to the system. A lack of confidence in the system is a primary indicator of weakness" (emphasis added). (110)
If the Brazilian government's conduct continues without reevaluation, it will dampen foreign and Brazilian industry enthusiasm for investment in research and development, discourage international and Brazilian commercialization of technological innovations, undermine the established international order and thus extinguish any future opportunity for Brazil and its industries to secure economic growth based on technological advancement. (111) Americans and other OECD country citizens also stand to lose from Brazil's persistent efforts to undermine the existing global IPR regime. At the very least, America's ability to continue functioning as the engine of global scientific and technological innovation and economic growth will be significantly jeopardized, (112) and, its long-held advantages in international trade and innovation and the GDP GDP (guanosine diphosphate): see guanine. and living standards living standards npl → nivel msg de vida
living standards living npl → niveau m de vie
living standards living npl of its citizens will likely be significantly reduced. (113) Indeed, one recent economic study estimates that,
"the current value of the intellectual property that embodies ... U.S. ideas ... from computer software and musical recordings to patented pharmaceuticals and information technologies ... is worth between $5 trillion and $5.5 trillion, equivalent to about 45 percent of U.S. GDP and greater than the GDP of any other nation in the world." (114 115)
Brazil is clearly at a crossroads. As an emerging economy and an aspiring regional (116 117) and global (118) power possessing great potential, it is obliged to exercise prudence and responsibility in its international affairs Noun 1. international affairs - affairs between nations; "you can't really keep up with world affairs by watching television"
affairs - transactions of professional or public interest; "news of current affairs"; "great affairs of state" . It has the option of following the proven path towards innovation and economic growth, or of riding populist appeals down the slippery slope 'slippery slope' Medical ethics An ethical continuum or 'slope,' the impact of which has been incompletely explored, and which itself raises moral questions that are even more on the ethical 'edge' than the original issue of IP opportunism. It is time for the Brazilian government to transcend its IP identity crisis and evolve--to choose the right path for the benefit of both its citizens and the world, before it is too late.