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The World Bank is preparing a study on post-communist migration which hopefully will bring some light on this. This underlines the concern that "well educated migrants [are] doing menial jobs". Although this may be a problem, experience tells us that: 1) educated immigrants quickly evolve towards high-paid positions (provided labour market regulations and incentives are appropriate) 2) despite all the talk of "quality immigration", this is humanly and economically nonsensical, because it stems from a static (and statist) approach. Who can tell whether immigrant X will become Citizen Kane? Or whether the person arriving, deprived of everything except her faculties and skills will not become the next entrepreneurial genius? The very idea of selecting people for immigration based on an arbitrary guess on their contribution to the national income is utter nonsense and a shame to civilized societies. True, Canada practices such a policy and allows for greater immigration than the United States for instance. There have been sketchy attempts in the EU to adopt similar policies to supply Indian computer scientists or other "worthy" immigrants. Conversely, seeing that that growth is in Central and Eastern Europe, might we not expect an eastward migration as well, at least potentially? In terms of "human resources", should we consider what would have happened to Einstein, Mises or Hayek if quotas had prevailed at the time? As somebody said: "You start by not letting anybody in; you end
up not letting anybody out." TRIPS: will licensing help? This means that countries without domestic manufacturing capacities may access other supplies of medicines. Presumably, this mostly aims at supplying cheaper antiretrovirals to help fight HIV-AIDS in Africa and elsewhere. Last week, the European Parliament also voted for a draft regulation in the same vein. But before rejoicing too much, there may be room for some hard figures as well. We all know that HIV-AIDS is creating disaster in many developing countries (and although Africa is the main focus, the disease is spreading rapidly in Asia and Russia as well). But at the same time, malaria kills a child every 30 seconds in Africa yet doesn’t get the same media attention at all. Second, it is widely assumed that "generic" automatically means "cheaper". This ain’t necessarily so. Last May, the Hudson Institute released an update of its study of antiretroviral prices (pdf here) which is worth looking at: "Of the thirteen comparable ARV drugs listed in Untangling the web of price reductions, 6th Edition by Médecins Sans Frontieres (MSF), eight patented drugs were cheaper than the average copy drug prices. Of the remaining five drugs, only one patented drug, nevirapine, was significantly higher-priced." Unfortunately, such facts are unlikely to compete effectively in
the media with Bono or Geldof. A matter of taste, sound and smell I would have thought such esoteric undertakings were rare, but
quickly found some interesting information
from down under. The Kiwi Patent Office has for a long time
considered that taste and smell may be considered for trademark
protection, provided the applicant can show that it is somehow distinctive
for the product. Check this one: apparently, Harley Davidson applied
to register the distinctive sound of its motorbikes (the article
doesn’t mention if it succeeded). According
to Wikipedia (but I cannot vouch for the accuracy, seeing that
this dictionary is an open source endeavour) "Non-conventional trademarks
may therefore be visible signs (eg. colours, shapes, moving images,
holograms, positions), or non-visible signs (eg. sounds, scents,
tastes, textures)." Certainly there is no limit to the inventiveness
of patent and trademark applicants, and we should always welcome
imaginative solutions. But maybe we should also reflect on what
this does to the arguments of IP opponents. Lego stumbles in Canada Lego also initially caused Mega Bloks to stumble at first: the latter produce a copy product which is almost identical to the first. And although the patent had expired in the mid-1980s, Lego sued for trademark infringement, based on functional design, i.e. the knobs that hold the blocks together should be considered the trademark. In Germany, Lego failed but it managed to win in the Netherlands; Canada’s Supreme Court has now rejected the appeal from last July. The legal lingo on Lego is that "an expired patent couldn't be extended by a claim that the design had acquired trade dress distinctiveness". Lego remains a lot bigger ($ 1 bn in sales in 2004) but is losing
market share to Mega Bloks ($ 234 million); but then that’s the
rule of the game. All agog with Google This is a tricky balance. Sorry for being so late in catching on to this, but my colleagues haven’t commented on it either (I hope!). A couple of months ago, Cnet ran a story about Google’s founder, having used the search engine to find and publish personal details about the CEO. You could find out where he lives, how much he’s worth and what he does in his free time. Upon which the latter said he would boycott CNET for a year (this was later cancelled however). Perhaps the article gave some food for thought in terms of privacy issues. It’s a bit unsettling to discover that information you thought was protected turns up on Google within half an hour's search. But I rather enjoyed ZDNet
UK’s comment on the story. ICANN now, but it may be over before UNow
it The issue is of course that ICANN is a US-based corporation; and although Kofi Annan recently denied any plans for a UN hostile take-over, there are various noises which are more or less covertly calling for some kind of control. "We have to have a platform where leaders of the world can express their thoughts about the Internet," EU Commissionner for IT, Viviane Reding, recently told the Guardian. Yes, she actually did say that. We can only assume that she was very briefly let out of Berlaymont, had her gag removed and was then shut up again. She added: "If they [world leaders, presumably] have the impression that the Internet is dominated by one nation, and it does not belong to all the nations, then the result could be that the Internet falls apart.'' I assume that she’s not advocating making the Internet collective property; maybe it just sounds like that? World leaders are not exactly short-changed when it comes to talking-shops;
others may be, but that can be easily handled by, well, developing
the Internet for a start. If it is free to function and privately
owned, please note. IP protection made in Hong Kong Interestingly, this scheme may not be used by its members to stop parallel trade of goods; it is aimed at counterfeiting, and IP owners are urged to take their complaints directly to the ISP owners when they discover that illicit products are being auctioned online. Said a representative of Salomon: "We mostly rely on the intelligence of the consumer. We say 'let the buyer beware'. If you find a deal that is too good to be true and you buy a fake, then don't come crying to us." The initiative is supported by the Intellectual
Property Rights Protection Alliance; their website features
an impressive list of recent crackdowns
on counterfeiters which gives but a sample. We may bet high
odds that this is only the tip of the iceberg. An ever closer union ... against the US? If Google frightens the French cultural elite by its project to digitise millions of volumes, it is not primarily for copyright reasons. It’s once more France contra mundum. His diatribe may be seen as a logical complement to Prime Minister de Villepin’s perorations about "economic patriotism". This follows a curious logic where foreign takeovers must be resisted. On the other hand, French takeovers of foreign companies are no problem. The Belgian Electrabel will soon be under French control, and the Belgian "patriotism" was apparently no obstacle. The same applies to the lawsuits against Microsoft and Yahoo: before too long, our thinking will be entirely controlled by US corporations and technologies. We thus face a most depressing protectionist downward spiral where the lowest common denominator is fear of competition and an angelic belief in government powers. But also a more disquieting impression that the US is a potential threat to our freedom of speech. Hence, the golden rule in this battle, at least on the European
side, seems to be: "Do unto others as they would do unto you, but
be sure to do it first." IP and the market for ideas It’s clear that IP as a factor of business development is exploding, especially in the computer and software industry. This creates a market for ideas where one solution for recouping investment is provided by licensing fees. (This is not negligible, since legal fees for preparing applications may reach $ 35,000.) Considering the "arms race" for building up patent portfolios, it is sometimes useful to exchange patents with your competitors. This is a tall order, but things are developing, as detailed by a representative of Sun who stresses that this enhances innovation through exchange. Large corporations have realized the benefit of specific IP divisions to manage their assets, e.g. through cross-licensing agreements. Also, the open source movement offers interesting hybrid solutions, and not all of them are explicitly hostile to IP. The OS platform builds on IP and corporations like IBM, Sun Novell and Red Hat have earned huge profits from their involvement with Linux. A flurry of OS organisations are active in this debate: the Open Knowledge Foundation, the Creative Commons, the Electronic Frontier Foundation, and so on... Is this consolidation or convergence? It’s certainly worth watching. We are all IP – let’s move! This is unfortunately a benefit which globalisation has yet to accomplish more adequately. Still, I greatly admire people like my cleaning lady in Paris. She has worked in France for many years, and returns to the Philippines once a year to see her family, but also to look after her business. She has built a house, furnished it and hopes to further develop her business. (I’ve seen pictures and can assure you that I will never achieve the same wealth in France!) The point is that free movement of people and their access to labour markets is probably the most inert element in globalisation (most people are loathe to relocate internationally for family and other reasons). This is why technocratic tinkering and social engineering cut no ice with those who believe that the freedom to move is firstly an issue of, well, freedom. It is not about how the national economy will fare (national statistics be damned) nor about how immigrants adapt (they will). Therefore, open borders will always favour IP in the deepest sense;
but it has to start with people. Fighting it out in Geneva The IPI is extremely prolific and its publications outstanding. Moreover, its members have been regularly monitoring the discussions at WIPO, and their comments on the current meeting may be found on the IPI blog. And you may bet high odds that one of the coming issues will be whether the UN galaxy of busybodies should get a tighter grip on the Internet. Seeing that WIPO is a UN agency, the IPI rightly points out in a recent brief that IP rights are in fact included in the various human rights declarations. (Although an important caveat should be that the 1948 UN Declaration also contains a cluster of "positive rights" which have the potential of destroying the classical, negative rights.) And the authors conclude: "Those who want to weaken IP protections
are really tapping into a failed and discredited economic theory
that the public doesn’t benefit from privately owned goods. However,
expropriation of others’ property not only undermines creation and
invention, it also undermines economies and societies. It is, ironically,
one of the most ‘anti-human rights’ actions governments could take."
A lowdown on downloads One feature in the last issue of the bulletin looks at the Grokster case and the famous case for copyright infringement done by P2P software. Whereas the US Supreme Court ruled last June that software companies would be liable when consumers use their technology for illegal downloads, the Court of Appeals had held in 2004 that distributors could not be held responsible for infringements done by users. The Napster case was more serious, because its P2P file-sharing system in itself was found contributory to infringement. Although the case is not entirely clear cut, it would seem that Grokster was not guilty, whereas Napster was somewhat guilty. In other words, should the producer be charged if it can be argued that it has some knowledge of the potential illegal use? Meanwhile, the legal download business is doing
quite well: Napster UK now has 750,000 members who have carried
out 55 million downloads since May 2004. I think Brian’s last posting
points to the right solution: only more and constantly improved
technology can beat deficient technology. Parallel trade, Kiwi style Evidence of piracy receives scant or no attention. Interestingly, the Copyright Amendment Act of 2003 (applying to the Copyright Act of 1998 authorising parallel trade) provides an exception: where pirated goods are imported for "private and domestic use", the copyright owner has to prove that this was not the purpose. In terms of software piracy for instance, New Zealand has a comparatively decent record to date: 23%. This may be compared to the US (22%), Western Europe (38%) and Singapore (43%). The overall argument is necessarily based on utilitarian considerations: PT is good because it offers a larger choice of goods, lower prices and other benefits for consumers. The legitimate rights of IP are not discussed: the right of a supplier to control its distribution chain is clearly subordinate to other concerns. Nor does the document discuss whether producers will retaliate
in the shape of supply restrictions. This may yet be a legitimate
way for IP rights holders to demonstrate their disagreement. Standard selection Without standards, no mass production and no global markets. Over time, the market decides on which standard to adopt (anybody still remember the attempt to launch "digital" audio cassettes?). On another score, reflecting conflicting standards, the Paris-London Eurostar connection is slower on the UK side because the British rails don’t allow for maximum speed as yet. But how about private appropriation? Can individuals actually "own" standards? Does anybody own the World Wide Web? (Well, ICANN owns a chunk of it in fact and since it is a US corporation, some fear that this amounts to American control of the Internet.) Some of these topics are discussed in an excellent
paper (pdf) by our colleague Jim DeLong at the Progress and
Freedom Foundation. The PFF is holding its annual Aspen
Summit at the end of this week on the theme "Building a Digital
Ownership Society: The Place for Property and Commons"', if you
are looking for a worthwhile excursion. Research and destroy Claude Allègre is a highly respected and qualified geologist, and an ephemeral Minister of Education in France who had to resign because of irreverent remarks about the need for downsizing the bureaucracy. He now writes a column in L’Express which is often enjoyable, but frequently bears the hallmark of the civil servant. This week’s contribution carries the usual grievances of public research officials, as well as a funny anecdote on how government runs research. First, the new minister critiques his predecessor; then he calls a large conference on the future of national research; finally, he proclaims a new legislation for researchers nationwide. And then he’s told there’s no money. Once he’s been fired, the successor starts anew on the same track. The basic complaint is that brilliant young scientists in France are increasingly lured away (in majority to that awful place across the herring pond) where both salaries and working conditions are more attractive. Whereas French politicians cling to the planned management of research which fails to produce innovation, just as Soviet factories failed to supply wanted goods. Everyone knows that IP depends on research; what why on earth
should we go on believing that the government is capable of providing
it? Borderline cases Are there any solutions to this problem, short of forcing Canada to free its drug prices? This would be the right course of action, but since Canadians consider that their health care system is what defines them as a nation, we are unlikely to see them apply for US statehood anytime soon. All the same, the Canadian Health Minister recently announced that he will propose to make exports of prescription drugs illegal. This is a pre-emptive move, since various members of the US congress have introduced bills to make the practice legal on the US side of the border. But there is growing evidence that re-importation opens up the pipeline for counterfeit drugs, especially since products may be bought on websites which are not necessarily based in Canada. Indeed, in a survey of 765 prescriptions filled by approved pharmacies, almost half violated agreements; recent checks on shipments to the US found that 88% "contained non-FDA approved substances, inert ingredients, products shipped under inappropriate storage conditions, expired and recalled products, and banned controlled substances". So when parallel traders tell us that their business is harmless,
they are less and less credible. Remember the Concorde crash in
2000? Well, one of the causes was a counterfeit piece of equipment. Lisbon revisited Halfway through the process which set out to make Europe "the most competitive and dynamic knowledge-based economy in the world" by 2010, it’s clear that the reform agenda has come to naught. This is particularly visible in France and Germany: on Monday, the OECD announced that inward investment in France was reduced almost by half in 2004; in Germany it was negative (minus $ 39 billion). This concerns R&D as well of course. Various panels at the conference (including the founder of Easyjet, Esther Dyson or politicians like Wim Kok or Alain Madelin) invariably delivered similar conclusions: Europe, although heteregeneous, remains hostile to innovation and new business ventures to a large extent. And the benefits of globalisation are not well understood, since no jobs are being created. Entrepreneurship and profits are frowned upon. As a corollary, IP development is bound to suffer or relocate. The French and the Dutch rejected the Constitution; but we
should remember that entrepreneurs retain the right to vote with
their feet. Stranger in a strange land It doesn't concern beating poverty through trade (though this would be a great theme), but rather a campaign to raise awareness on counterfeiting and piracy. I don't know whether this connects with the ICC campaign (launched last December), but famous artists and musicians have signed appeals for protecting their wares, both in France, Sweden and probably elsewhere over the past few months. There's been a response
from copyleftists of course ("We're all pirates"); not surprising
when you know that the official view is that music shall and will
be performed once a year (22 June this time) at the "Fête de la
Musique", created by then Culture Minister Jack Lang in 1982. Before
that date, sadly there was no music in France. So remember: IP doesn't
exist, if it does, that's bad, but government will deliver the goods.
And credits to A. Gore for inventing the Web. Trading forces in Europe The industry has used various instruments to reduce the impact of this trade, one of which is known as supply restrictions: if one country is particularly targeted by PT, a company may decide to reduce its deliveries. Several lawsuits have arisen from this, where the parallel traders invoke article 82 of the EC which prohibits the abuse of dominant position. Jurisprudence is complex enough on national levels; it doesn't get any easier when trying to divide competencies between countries and the EU. The recent case concerns the judgment by the European Court of Justice which could not rule in the case involving GlaxoSmithKline and parallel traders in Greece, as the claimant was the Greek Competition Commission. GSK declared it would continue to fight the parallel traders, by delivering directly to hospitals and pharmacies; the latter responded by saying that the (non-)judgment means that GSK should "meet supply orders in full". Yet the opinion
given by Advocate General Francis Jacobs (October 2004) seems pretty
clear: "Given the specific economic characteristics of the pharmaceutical
industry, a requirement to supply would not necessarily promote
either free movement or competition and might harm the incentive
for pharmaceutical undertakings to innovate." Three cheers for this imperialism The EU response was archetypical: 1) this is a disgrace, 2) how can we counter US cultural imperialism? We have to do the same thing with 3) a grand, tax-financed design, since the enemy is in the private sector. This was supplemented by an appeal by Chirac and Schröder who presumably had to learn what digitisation means before they could sign the document. Obviously, the operation requires respecting existing copyrights, and Google has already faced lawsuits for infringement. Currently, where copyrights have expired, the entire book is available to browse, whereas three pages per book are offered for works still protected. Links to large online book stores are then the next option. "We would be delighted to work with the Europeans", said
Google’s vice-president in an interview with Le Figaro. No doubt;
but the opposite is not necessarily true unfortunately. 'Twere best done quickly Perhaps the most striking part of the argument is that the teleological view dominating this debate is unproductive, i.e. patentability should not be discussed by considering its positive or negative consequences. Going further, innovation as such is not positive or negative. Still, the justification for patents is the need to compensate and encourage the innovator. But once you acknowledge the utilitarian perspective, the discussion must focus on defining the "usefulness" of the invention. This means striking the right balance between a sufficient reward for the inventor (economic incentives) and the temporary monopoly. The latter should not be overestimated: although nominally valid for 20 years, Simonnot points out that the real lifespan of a software patent is on average but eight years, because the royalties paid to protect it are not worthwhile beyond this limit. It is instead the economic theory of property which offers the key to patent protection. We should also remember that the "software directive" is a misnomer:
it aims to allow the patentability of computer and software-based
inventions. For an admirably concise clarification, have a look
at the Stockholm
Network’s new monthly IP bulletin. Playing hardball on software The Open Source lobby is as usual on the barricades on the issue of interoperability, arguing for copyright protection rather than patents. Otherwise, they claim, operating systems such as Linux would be threatened with extinction. The technical aspects are beyond me, but there are several odd claims in this debate. One is that open source is "free"; in fact, the market for OS services (where IBM and other firms make their money) amounted to $4 billion in 2003. More recently, Dell invested $100 million into Red Hat, Intel has created a working group to handle its relations with Linux and other OS distributors, and India just launched the "Knowledge Public License", etc. But OS software is predominantly geared to the tech-savvy public: just for size, I tried to download Linux and found that I couldn't (or at least I didn't have that much time). And I'm not part of the famous bug-fixing community where everyone supposedly helps out for free. The OS universe contains everything from whacky geeks to more moderate
online
campaigns. Perhaps the most far-fetched example was when French
activists tried to convince UNESCO to make free software part of
the World Cultural Heritage. Surely there is a difference between
software and the Taj Mahal? Faking it really well The process is of course facilitated and encouraged by globalization and the move towards platform companies: ideas, design and sales are still being done in the US and the EU, but manufacturing is outsourced. Hence, reverse engineering is popping up in very remote corners of the globe. This story is a fascinating read, but worrisome for IP stakeholders. According to the International
Chamber of Commerce, counterfeit goods now amount to $ 600 billion
annually around the globe - and it covers virtually every kind of
product (even motorcycles). But as one commentator says, "once Chinese
companies start to sue other Chinese companies, the situation will
become more balanced". This is probably an important key to global
"harmonization" on IP rights; once India and China switch from the
copycat stage to innovation, producers will hopefully see the need
for enforcement and protection. As Groucho Marx said, the important
thing is sincerity; once you can fake that, you've got it made. Publish, be damned, get paid As noted by The Economist, new business models are popping up, including the tip-jar system where readers pay small sums when they feel like rewarding certain authors. OhmyNews (Korea), a recent medium, once received $ 30,000 in tips from readers out of a single feature. When the chips are down, newspapers will need to put more efforts on how to distribute news, and decidedly less on the paper part. On another score, Stephen King decided to discontinue his online novel, as readers were not ready to pay him enough … After Brian’s recent exhaustive tips on useful blogs, it
becomes hard to enrich the discussion, but I was delighted to see
that the Institute for Policy Innovation now has its own IP
forum with amusing comments on the recent WIPO jamboree in Geneva.
Find out why the activists wore T-shirts denouncing IP which carried
no less than two kinds of … IP protection. "Show me your Open Source
T-shirts!" our colleague prompted. Altogether an attractive mix
of news and comments worth keeping an eye on. When opinions don't matter We’ve heard all this before. But while polls may be useful for politicians looking for a heftier chunk of votes, mere perceptions should not be used to shape policy. It doesn’t matter if 700 people polled "think" that reimportation is safe; it isn’t. In recent months, there have been several cases of counterfeit drugs entering the pipeline, because manufacturers are no longer in control of their supply chain. Nor should an isolated survey be taken as evidence that prices would indeed drop through reimportation. And finally, parallel trade is not about goods, but about importing price controls. For an excellent overview, rather than being mesmerized by
opinion polls, get the facts by checking on Stephen Pollard’s recent
testimony before the US Senate. And that’s a qualified opinion. What’s in a name? This came to my mind when I read on this site that Chinese firms are using Hong Kong company registration rules to copy famous Japanese brands, then selling counterfeits. (We made fun of the Japanese as well, as they used reverse engineering to copy our products, come to think of it. Hm, what’s the French equivalent of Sony called again? You know, the one created when president Mitterrand stopped the import of Japanese VCRs in the 1980s?) Speaking of France, political trademarks are also getting their share of attention. Some thrifty individuals registered websites for the 2007 presidential elections already in 2003. www.Chirac2007.org is already online whereas www.jacqueschirac.com is for sale … Jospin2007 has already been taken and François Bayrou (UDF) is having a site being built. Perhaps the most intriguing is www.sarkozy2007.org: this address will lead you to … the French Socialist Party site. Well, who wants a bad copy of a bad original? Biopiracy: who’s stealing what from
whom? The issue is not without political controversy, however. When researchers go to developing countries to get samples of micro-organisms with the potential of curing tropical diseases, the discussion quickly turns to property issues. Isn’t this part of the nation’s patrimony? This is what the Convention on Bio-Diversity says. A swamp full of bacteria could in fact be a great reservoir of future drugs. All right, let’s fish them out (and why weren’t we told before?) But you may be branded a "bio-pirate" if you don’t follow the rules of the CBD. It should be made clear that a "resource" is not just something
lying around. Lawsuits
concerning illegal sampling were made once something useful had
come out of it, specifically patents. It may indeed be argued that
people in poor countries should get a share of the resources involved,
but this can only be done by better defining property rights, both
to the bio-material used, land ownership and above all the knowledge
used in transforming a mud pond into a medicine closet. This takes
a bit more effort than simply putting your hands on the final product. Search and destroy? In terms of intellectual property, this means that content (older than 70 years) would be freely available. Sounds wonderful. But there is a catch: Google (and other search engines doing similar projects) would retain the exclusive right to put the books online. The president of the Bibliothèque Nationale de France is adamant: this should be done, but only in the form of a Grand Design, piloted by the EU. In the same article, Jacques Attali stresses that we have to "avoid that our knowledge [collective property?] one day comes into exclusively American hands". So in essence, it’s a good idea but not if it’s done by somebody else (and, in petto, quite suspicious if US capital is involved). It resonates like an echo from Animal Farm: "politics
good, market bad". Isn’t it eerie that politicians always seem to
trust themselves more than the people they are supposed to represent? Heaven has no rage, EU style But this wasn’t the end of it: Microsoft also has to give out essential parts of its source code for Windows, allegedly to provide greater interoperability between operating systems. Yes, it’s true: if you followed the recent jamboree after the happy funeral of the Bolkestein directive, you will have realized that the political leitmotiv is very simple: if they give in, punch them again. There is no other interpretation in both cases: the sanction of the victim is necessary, even essential when champions of free-market ideas seem hesitant about their raison d’être. What is particularly remarkable is not that Microsoft is attacked; any big corporation will make enemies. It is the fact that the trial was based to a large extent on claims and requests from the major competitors, which was also acknowledged during the previous proceedings. In other words, the accusation of dominant position was in fact no more than a recognition from competitors that the leader should be whipped. A company should never be defended per se; capitalism is
about competition, and there are numerous examples of large corporations
using their political clout to get favours. Not so in this case,
as far as the evidence goes. But do read the excellent
briefing paper (PDF) by Istituto Bruno Leoni; it will make you
laugh or weep, depending on your interoperability. Down under right now It addresses the problem of copyright extension which I mentioned the other day, and the claim that Mickey Mouse would be the sole beneficiary of this. But the connection with trade should not be overlooked either. Australia’s free trade agreement with the United States has been seen as harmful, as the former is a net importer of intellectual property. In fact, this situation is evolving and may well be reversed. Another important component in the context of copyrights is of course the DMCA which is perhaps more criticized than actually read. Looking into the details, I found this Aussie
organization; one of its researchers provides tips to bloggers
on how to deal with copyrights so as to avoid unpleasant claims
of plagiarism. Have a look and see
if I complied. Something new in the East? In fact it turned out rather interesting, at least for me: things evolve quickly these days. Last year, the pharma industry lobbied quite a bit to alert Brussels about parallel trade linked to EU enlargement. It was thought that Central and Eastern Europe would flood the EU 15 with cheap parallel imports. But a recent study shows that this has yet to happen; the picture will likely change over the next 5-10 years, but so far there has been little development. In early 2004, the Social Market Foundation staged a seminar in London featuring the then-patron of parallel traders in Europe, Don Mc Arthur, who dismissed the safety argument saying there had been no evidence of counterfeited medicine resulting from parallel trade, or at least no harm reported. He seemed to be right, at the time. But since, there have been several cases as shown in a recent book by the Stockholm Network. The links between two are not obvious, nor automatic; but
the issue deserves attention, and it’s far from boring. Birkenstock options Birkenstock, until recently well-known for health shoes unsurpassed in ugliness, came into the limelight a couple of years ago as a fashion brand worn by stars like Hugh Grant or Gwyneth Paltrow. After having been available in black and brown, there were all kinds of colours, glitz and glamour galore, because a female member of the family had decided to jazz up the image: by going on international marketing lecture tours, soon Susanne Birkenstock had also put an attractive face on the trademark producing orthopedic shoes which previously nobody in his right mind would ever wear outside the house. A little too attractive for her own good though. At the same time she launched her own brand and design, SB Beutystep. Although the shoes had nothing to do with the venerable Birkenstock firm, the new company used the name in advertisements, which soon drew the ire of the family. Then followed separation from her husband (co-owner of the company) and a lawsuit which ended last month: according to the court, the startup may not use the trademark Birkenstock to avoid confusion with the established brand. Always tread carefully when sneaking off with the family
jewellery. Mickey goes to Washington and other
headaches Referring to the recent contributions below, there seems indeed to be considerable confusion on what may properly be cited or used in terms of copyright. This brings to mind various eccentric characters, e.g. Andy Galambos who sought reparation whenever his "ideas" were used inappropriately. Readers of Tuccille’s classic will recall the "Galambosian". A couple of years ago, a project which I had worked on was
"appropriated" by one of the participants; my co-author and myself
regretted the not-so-friendly takeover as our work was not rewarded
in the end. Should we have asked for a "copyright"? Maybe; but the
legal procedures would have impossible to enforce. The consolation
is that the project did indeed succeed; I was recently invited to
become a contributor. Ideas have consequences; but we should think
twice before asserting our "rights" to what could in effect prove
to be mere intuitions. Johnny be good, or go off the record This may seem odd at first sight; but the cooperation between artists and producers is built on a partnership where the latter invest in launching and promoting the former. The MP Patrick Balkany, a longtime friend of Hallyday’s, recently introduced a bill granting the right of an artist to recuperate his catalogue of songs in case of a fallout with the label. But this would seriously disrupt the incentives to make a long-term investment in any singer. In addition, France has signed the Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations which regulates the status of a producer; this means that modifying French legislation would not be sufficient, as pointed out by the minister of Industry. But in France, lawmaking is frequently more an issue of defending
special interests than laying down general rules. This generally
makes it difficult to dance, as the music keeps changing. Huddled masses waiting for the Lisbon
Agenda This was by conventional standards decidedly not a "brain-drain"; simply people wanting to escape downright poverty and earn a decent living. If border controls in the south of the US are any gauge, it may show both the courage of individuals and the commitment of American politicians to resource management. Conversely, as an Indian professional said recently, development is great because it means we won’t all have to emigrate. In terms of IP, this gives food for thought; the extraordinary growth (and acceptance of immigrant workers) of the US in recent decades demonstrates that America remains a magnet for ability, regardless of education level. This should be taken into account as the discussion in Europe seems increasingly bent on "quality immigration". We all know that Australia is a nation of criminals, right? This is an unfortunate stance, but at least Samuel
Brittan provides a sensible approach on the UK case. Intellectual
property is, in the end, the power to use your own faculties, even
if they will not be branded, patented or copyrighted; working men
and women around the world ask in essence to be able to work and
get paid. EU governments have to realize that, failing the ability
to use their voice, those who are fed up will exit. Something to
remember when you hear politicians and the media extol economic
"miracles". It’s not a miracle, it’s the market . Trading the marks, marking the trade
When I go shopping, I sometimes look for "generic" products. They’re not necessarily better, but good enough. Admittedly, these copies would not exist unless they used an original; but there it is. This is not exclusively plunder, however; consumers realize they are getting a bargain, but they do their shopping precisely because they have a brand name as reference. The point is, the original product is still the basic incentive: I’m prepared to take a downgrade in quality which is more or less proportional. Building upon existing achievements is not a bad thing; we do this all the time but we should acknowledge what we build upon. If my contributions to this page could be trademarked, I’d be much obliged. (Any offers welcome, my fees are competitive and I could use the money to buy branded products more often; my children are very keen on these.) IP considerations aside, imitation is an essential part of
human behaviour. We cannot all be innovators, so most of us need
to look for good examples. This will sometimes spur partial innovation,
both in consumer patterns and in production. Nonetheless, there
has been some recent encouraging buzz
from Commissioner McCreevy on the need to enhance IP and you
may consult the full Action Plan here
which aims at giving full benefits to consumers through public electronic
procurement. Discovery procedure is the key; government involvement
is the fiend. I believe "No Logo" would translate into Greek as
"Don’t take my word for it". Musical pirates sinking? But these are absolute figures: as the market has expanded by 30% over the past two years, the trend is still strong. The French music industry is now using a large advertising campaign with famous faces to promote legitimate downloads which is already a large market in itself : Apple’s ITunes is now selling more than 1,25 million songs per day! Music producers are also preparing an automatic system for
detecting pirates, demonstrating yet again how technology eventually
provides solutions for better defining and enforcing property rights
in cyberspace. The first French music pirates are expected to go
on trial later this year. The record (excuse the pun) is held by
an individual charged with 10,000 illegal downloads; the industry
is suing for more than 28,000 euros in compensation. Caveat emptor. Dead poets’ society ? Please hum quietly
The song is prescient in the sense that the substance is still on the lips of many and in the streets, but the IP rights have vanished or will very soon. You may recall that even such a household tune as "Happy Birthday" was still protected by copyright a couple of years ago (but of course no birthday party was subject to royalties for using it). Now however, many a popular tune will become part of the collective property, much to the dismay of those still kicking. Acccording to the latest edition of the Economist, some 100 million old albums currently on sale in Europe will have joined the choir invisible of public domain by 2010, meaning a revenue loss of $ 1 billion, or 3% of annual sales. Sonny
Bono may have been concerned about the welfare of others, but
he certainly looked after his own interests before inadvertently
hugging a tree too intensely. But 95 years after publication should
do the trick, as the US Congress ordered in 1998. From the pan into the fry The cargo (some 50,000 cartons) also included malaria drugs and had not received any clearance or official certificates. Furthermore, this seems to be a portion of the medicines financed by the UN Global Fund so we should all be concerned, first by the obvious health risks, and second by the fact that we are all paying for it. Product diversion may be legal (such as the case of parallel trade inside the EU market) or illegal. Some years ago, the largest German parallel importer Kohl-Pharma was involuntarily involved in trading AIDS medicines which originally had been destined to Africa, but were in fact shipped back to Europe and sold at a tidy profit. This should tell us that 1) re-importation may cover a variety
of phenomena, some legitimate and others which are more than shady;
2) praising generics at all costs is bad policy and even worse economics
considering the waste of resources in this case and 3) as Bastiat
pointed out, there is what you see and what you don’t see.
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