Do China And India Really Want Stronger Intellectual Property?

from the stay-tuned-to-find-out dept

Over the past few months, I have been researching the role that intellectual property plays in China and India, with specific attention to the frequent calls for increased protection in those countries. I believe that a careful and critical review of national goals, potential solutions and likely outcomes will, in fact, make intellectual property harmonization a disagreeable mechanism for bringing China and India to continued global prestige. This series, adapted from a recent paper, will first outline the role that intellectual property can play in economic development. Because of their relative importance, patents will be the focus. Following brief overviews of the intellectual property systems in China and India, it will examine the case for stronger IP in China and India. The most time will be dedicated to explaining why strengthened intellectual property is likely to disproportionately advantage the developed world, decrease the ability of China and India to diffuse productivity-enhancing innovations, prove both insufficient and unnecessary for promoting innovation, and even be counterproductive to the countries' innovation systems. Finally, the series will end with recommendations for the way forward for China and India.

Every year, in conjunction with the content industry, the US Trade Representative produces the Special 301 report that identifies other nations as significant concerns in regards to intellectual property. It is among the most prominent reminders of the substantial pressure placed on countries to consistently strengthen their national intellectual property regimes. For two developing nations, China and India, the pressure is particularly noteworthy. Governments, donors, private industry and academia give these rising superpowers dozens of reasons to believe that stronger intellectual property is a highly desirable improvement to their respective business environments. They propose international intellectual property "harmonization" - a process through which the developing world upgrades protection and enforcement of intellectual property to levels seen in the developed world, if not further.

A Brief Background On The Challenges Facing China And India

China's spectacular rise over the past three decades has been thanks, in large part, to good infrastructure and low-cost labor. But to continue its meteoric climb, China must make a sustained commitment to developing as a knowledge economy - one that effectively harnesses and uses new and existing knowledge to improve productivity and increase overall welfare. Right now, the service sector is very underdeveloped in China for a country of its per capita income; and although China is now the third largest spender in absolute R&D, productivity is low and regional inequalities are stark. China's leaders must take a multipronged approach to development by: promoting competition; upgrading education and learning; exploiting global knowledge; diffusing new technologies; supporting small and medium enterprises; and establishing a viable social security system.

Although China receives much of the media attention, India, too, has enjoyed historic success over the past couple decades. India's unique characteristics - skilled, English-speaking knowledge workers with diaspora linkage, free market institutions, a well-developed financial sector, and macroeconomic stability - make the knowledge economy an attractive national goal. However, the success stories of Indian IT firms betray the significant challenges facing India. India needs to strengthen the institutions supporting an efficient innovation system. It remains a relatively closed economy that receives minimal foreign direct investment (between 2003 and 2004, India received only $4.26 billion, compared to $53.5 billion in China) (Dahlman 2005). Further, it currently devotes little GDP to R&D, and private sector involvement is crowded out by government intervention. Finally, India must continue to develop a broad base of educated and skilled workers.


Other posts in this series:


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  1.  
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    Anonymous Coward, Jun 24th, 2009 @ 4:06pm

    "(between 2003 and 2003, India received only $4.26 billion, compared to $53.5 billion in China)"

    Between 2003 and 2003? I'm assuming typo.

     

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  2.  
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    Anonymous Coward, Jun 24th, 2009 @ 5:03pm

    This would be a great thing to post somewhere else in it's entirety and then just link to it from a single post. Way too long for the format of this blog, and likely will lose much of it's meaning broken up.

     

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  3.  
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    PRMan, Jun 24th, 2009 @ 5:13pm

    Duh...

    Why do you think the US is FORCING them to do it?

     

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  4.  
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    Anonymous Coward, Jun 24th, 2009 @ 6:23pm

    On India

    Recently, I read a very interesting article about how Indian Pharmacutical Company Ranbaxy provides most of the $4.00 prescriptions to WalMart. Now normally, I wouldn't have thought two seconds on it, but nonetheless, it was interesting.

    It appears that India has something of a problem with sequencing events, identifying patterns, and overall, the steps necessary to be followed which ultimately bring a product to market. To some extent, it may have been this inability to process such high level thinking that precluded King Ferdinand and Queen Isabella's mind for months upon end. Eventually, the idea to take advantage of these people economically financed Christopher Columbus' journey across the Atlantic. The Nina, The Pinta, and the Santa Margarita in search of India and their products to bring to market, and increase trade.

    Instead, as you may know, Christopher Columbus found North America. He named the indigenous people "Indians" (as that was what they were looking for) and slowly devalued the land they found.

    Nonetheless, King Ferdinand and Queen Isabella were possibly very disappointed when they didn't find the spices or fine silks they were looking for. Ideas may have precluded of a "Fountain of Youth" just so that the King and Queen were able to spare their head.

    While they were unable to find the passage to India they were looking for, they found something interesting, which brought a group of well mannered, indept group of people fed up with the poppycock of Brittan to America in 1620 upon the Mayflower.

    Then there were the scholars who fled from France, Germany, Norway, Italy.

    The news traveled back home about the ability to own property and others came along:

    Soon thereafter, Germans, Norwegians, Finns, Swedes came as well. Those who believed they could make a difference came to this place called America, where you're greeted by the Statue of Liberty (Which Ken Salazar re-opened on his first week in office.)

    But during this time, the Indian trade routes subsided and very few people emigrated to India.




    But in some ways, it seems many things haven't changed. It seems that India may not be able to live without lax IP laws or rights. In fact, lax IP and inability to adhere to standards were perhaps reasons why WalMart decided to assist India-based Ranbaxy. This allowed them to provide low quality prescriptions for $4.

    Nevermind the DoJ and FDA involvement with WalMart's Supplier. The fact that there's documented problems in 2009 shouldn't scare you either.

    http://www.wakeupwalmart.com/feature/ranbaxy/

    Can India do anything right without work, rework, rework, rework, rework, rework?

    Eventually, it's best to do what happened shortly after 1942. Just give up and pull what CostCo did in the story-- Raise your prices, and say, 'If you want quality you expect, it's going to cost more.'

    There's a reason why Macs hold their resale value, and cost more. Think about it.

     

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  5.  
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    Mike Masnick (profile), Jun 24th, 2009 @ 6:58pm

    Re:

    Between 2003 and 2003? I'm assuming typo.

    Yeah, typo. Thanks. It's been fixed. The actual dates were between 2003 and 2004.

     

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  6.  
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    Reed, Jun 24th, 2009 @ 9:11pm

    Just say no to IP

    If you look at the history of invention one thing that will surprise you is just how often ideas are thought of and developed simultaneously.

    Ideas and works are also created independently of each other but share striking similarities regularly.

    The world is a different place nowadays. We are 6 billion+ strong and growing rapidly. How long will we continue to hoist the individual above the good of the people?

    Not just the people of the US, but the people of the world. Do they really want IP law when it is clear it will do nothing but hold up progress?

    I for one hope the China, India, Russia, and everyone else ignores IP law and thus grow faster and become stronger.

    This is what we should be striving for. Not artificially slowing down markets so entities can rake in the profits meanwhile people cry out for the basic needs in order to survive.

    For me IP law is a little high minded in a world were millions are starving right now. We need great works and great cooperation to get past our current hurdle of resource limitations and IP rights offer nothing to advance this cause.

    Intellectual Property is DOA in the 21st century IMHO

     

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  7.  
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    Anonymous Coward, Jun 24th, 2009 @ 10:02pm

    I am impressed. A student term paper is being cited.

     

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  8.  
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    Anonymous Coward, Jun 25th, 2009 @ 5:54am

    Re: Just say no to IP

    If you look at the history of invention one thing that will surprise you is just how often ideas are thought of and developed simultaneously.

    Excluding discoveries, i.e., looking only at inventions, just how often would "just how often" be?

    Ideas and works are also created independently of each other but share striking similarities regularly.

    Again, just how often? Is there a summary of the frequency of occurrence? Also, an idea is not an invention, so a million people can think one day, gee, would it be neat to have an engine-powered vehicle, but it is just as unlikely that 999,990 of those people would be clueless as to where to start on an actual invention.

    The world is a different place nowadays. We are 6 billion+ strong and growing rapidly. How long will we continue to hoist the individual above the good of the people?

    Let's see. The Soviet Union nominally put the good of the people ahead of the individual, and they failed as a society miserably. The Chinese were even better at putting the good of the people ahead of the individual for a number of decades, and their progress on all fronts, scientific, economic and cultural, came to a near halt. Yes, there is a balance between the needs of individuals and the good of an over-populated world that will eventually get its over-expansion checked by mother nature, but we should not blindly follow the path that leads to the loss of individual rights.

    Not just the people of the US, but the people of the world. Do they really want IP law when it is clear it will do nothing but hold up progress?

    Really? It is "clear" that IP laws do nothing but hold up progress? Sanity check: IP law has been around continuously in various forms forms for about 500 years or so. Patent systems have existed continuously in various countries, including the U.S., for at least 200 years. Yet, the U.S. with one of the strongest IP systems in the world, is also one of the most advanced countries in the world. The level of invention in the U.S. has remained phenomenal and have continued at nearly an exponential rate. How is such speed of development and invention "hold[ing] up progress"?

    I for one hope the China, India, Russia, and everyone else ignores IP law and thus grow faster and become stronger.

    Interesting that you should pick China and India as examples. China is not reluctantly being dragged to embrace patent law, they are embracing it enthusiastically and have set national goals for numbers of patents. China has been one of the world's fastest growing economies, and their growth parallels the growth of IP. India, on the other hand, has little or no IP, and their growth has stagnated in some ways. Their manufacturing in particular is inefficient, technically immature, and of poor quality. Of course, IP and manufacturing go hand-in-hand. Sure, the Indian people should continue to ignore IP law. They already have been, and look where it has not got them.

    This is what we should be striving for. Not artificially slowing down markets so entities can rake in the profits meanwhile people cry out for the basic needs in order to survive.

    Oh please. What next? Patents kill kittens? Patents are so far beyond basic needs that I am surprised you would bring up such nonsense in a paragraph. Of course, given your previous statements, you begin to sound like a socialist. Take away money from evil corporations to give to the hungry!!!

    I also dare you to prove that patents have "slowed" markets to a measurable extent. That would be interesting.

    For me IP law is a little high minded in a world were millions are starving right now. We need great works and great cooperation to get past our current hurdle of resource limitations and IP rights offer nothing to advance this cause.

    On the other hand, IP rights do not seem to be relevant to this cause. The two seem somewhat independent, and it seems high minded of you to tie the two together without some sort of proof or evidence. On the other hand, offer incentives to solve these problems and you might just get more people interested in finding solutions.

    Intellectual Property is DOA in the 21st century IMHO.

    Obviously your humble opinion is not well supported by fact. The countries that have historically not had patents are strengthening their patent system and becoming more inventive and innovative at the same time. All of the industrialized world has a patent system, and not a single one of them seems as though it is going away any time soon. Patent systems are alive and well in the 21st century, and thank goodness for the speed at which they continue to propel the world.

     

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  9.  
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    Reedatschool (profile), Jun 25th, 2009 @ 7:54pm

    Re: Re: Just say no to IP

    IP law in the form we see now have not been around for 500 years... The only sanity check needed is a good clinical visit for you with your shrink

    China, India, and Russia all willfully and continually violate IP laws. To state they have suddenly come around and are embracing IP is blatantly false.

    As far as "how often" one only has to look at electricity, flight, and phones for just a few examples of inventions happening at the same time.

    The same is true for works of culture. As the world grows it becomes increasingly stupid to grant special rights to specific entities. It is clear that it is being thought of and created by thousands of people around the world already, so what makes you so f'ing special?

    You say technology is not stifled by patents? One only has to look at the current trend of large corporations continuously bullying smarter and more efficient small business into partnering or selling out. I am surprised you have never heard of this, but then again I am not.

    You clearly have no idea what your talking about, but that's ok. You have a lot to learn :)

     

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  10.  
    identicon
    Anonymous Coward, Jun 25th, 2009 @ 8:59pm

    Re: Re: Re: Just say no to IP

    IP law in the form we see now have not been around for 500 years... The only sanity check needed is a good clinical visit for you with your shrink

    Did I say that IP law has been around for 500 years in the form we have it now? No. In fact, I specifically said it has been around in various forms...learn to read in between your visits to your social worker.

    China, India, and Russia all willfully and continually violate IP laws. To state they have suddenly come around and are embracing IP is blatantly false.

    *sigh* Why are you making things up. Did I say a single word about Russia? No. Do you have a reading disability? As for China, I direct you to:

    http://duncanbucknell.com/articles/422/Chinas-national-IP-strategy-2008
    http://lanzhou.china .com.cn/english/MATERIAL/25050.htm

    As far as "how often" one only has to look at electricity, flight, and phones for just a few examples of inventions happening at the same time.

    Three inventions, 7.5 million patents. That does not speak well for your percentages. Based, on your limited example, the answer is "not very often."

    The same is true for works of culture. As the world grows it becomes increasingly stupid to grant special rights to specific entities. It is clear that it is being thought of and created by thousands of people around the world already, so what makes you so f'ing special?

    rolfmao...You know, I hear that all the time, and yet the total number of examples tends to be extremely limited. In some cases, take for example the Jake brake used on trucks, the inventor worked hard to convince companies that (a) it would work, (b) it would be reliable and (c) people would buy it. Did anyone else invent the Jake brake? No. Is it likely that someone else would have invented it in another 20, 30 or 50 years, maybe 100 years? Sure. Of course, the early invention and disclosure gave us a safer brake system for trucks, one that only took 70 or 80 years to develop after the invention of the diesel engine. I guess those "thousands" of people inventing the same thing at the same time neglected to bring it to market.

    You say technology is not stifled by patents? One only has to look at the current trend of large corporations continuously bullying smarter and more efficient small business into partnering or selling out. I am surprised you have never heard of this, but then again I am not.

    You have failed to quantify a market suppression. What you have done is provide anecdotal evidence. I have evidence that tens of thousands of inventors have advanced our society in a broad range of technologies. I am surprised that you have never heard of this, but then again, given your earlier statements, I am not.

    You clearly have no idea what your talking about, but that's ok. You have a lot to learn :)

    You clearly have not one fact to back up your statements, so obviously you are full of gas. I wondered what that smell was. But that is okay. You are young. You still have time to learn, if you will.

     

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