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Thanks for the scoop; apart from the welcome recommendations of greater liberty for personal use, IP since its inception has been a utilitarian construct where policy and social considerations are constantly present. Hopefully, the balance struck gives sufficient weight to innovation and entrepreneurship; the costs remain “social”. And it remains to be seen how a British government report may influence the future reform of the EU patent system. As noted by our friends at the Stockholm Network in its submission
(pdf here,
cited on p. 81 of the report), the brunt of patent costs in Europe
are, in fact, due to translation into national languages. These
may not be as high as what is incurred at the EU institutions, which
must ensure interpretation by, and translation into, 23 languages
(starting January 2007); in 2005, this represented € 1.1 billion.
There seems to be some convergence towards narrowing it down, although
the Commissioner is weary; and somebody has yet to seek a patent
for the Tower of Babel. The Asian Challenge According to a recent WIPO report, China and Korea can chalk up rapid increases in patent applications: between 1995 and 2004, the rise was 557% and 76% respectively. An embarrassing hitch however: when WIPO published its survey, the ranking of patenting activity seemed to conform to previous patterns. Japan came in first followed by the United States, with Europe in an honourable third place. But soon it turned out that in fact Korea was third, China fourth, thereby relegating Europe to a fifth consolation prize position. Nobody could seriously claim that the West has not been warned;
the evidence bears out the decline in innovation. Good news for
consumers worldwide that Asian countries are picking up the gauntlet;
but the US and the EU should take serious notice. Rewarding innovation The Economist Innovation Awards were presented last week (but in fact distributed early November): bioscience, computing and communications, energy and environment, social and economic innovation, business processes and “no boundaries”. Our think-tank colleague, the Institute
for Liberty and Democracy, gets the award for social and economic
innovation for its long-time work on formalising property rights
in markets where these are ignored or not enforced. (M. Yunus of
the Grameen Bank and this year’s Nobel Laureate in economics is
a jury member.) This is a timely and important reminder to those
who insist that developing countries cannot handle market institutions.
But it is significant that only one laureate comes from outside
Europe and the Americas: Sam Pitroda, CEO of Worldtel (India). A
lot remains to be done. Here's looking-alike at you, kid But also more recent trademarks are exposed to free-riders: Starbucks lost its case against a Korean look-alike, Starpreya. Check it out here: any similarity with actual trademarks, living or dead, are of course purely coincidental. The ICC has launched Business Action to Stop Counterfeiting and
Piracy, BASCAP
and you may find daily reports on the site with some staggering
figures on the type of goods and volumes seized every day. Consider:
in the last 5 days alone, 16,277 fake items were seized, with a
seizure value $1.3 million and a loss value exceeding $30 million. License to prosper The Open Source movement is well-known; less so perhaps are the exciting and spontaneous developments within copyright, specifically in the music industry (YouTube is but one example). The encouraging aspect is that market-based mechanisms allow for collaborative schemes along the models of Creative Commons in combination with pay-per-click technologies, such as Revver. One expert commented thus to MIP: “It is not a case of rights versus abandoning rights.” And another: “Just because you are giving something away for free doesn’t necessarily mean that the license document should be less detailed than if you were entering into a normal royalty agreement.” Quite: any market enforcing property rights will allow for an infinite variety of contractual arrangements, including giving away content, retaining some rights, leasing others, establishing exclusive agreements etc. Take your pick: a garage band in search of notoriety may opt for wide distribution and little or no pay. A star will choose another model. Have an Open Cola or a Coke, a Vores Öl (yes, there is Open Source beer) or a Heineken. But please, don’t use the law to establish one or the other as
a legal standard. A world of IP He also develops another favourite topic of mine, namely the huge rewards to be reaped from having universities and high-tech companies work together. This is something which Europe sorely lacks, as governments are loathe to seek alternative financing and even abhor closer relationships with business from sheer habit. Lest we forget: the brave new world of global capitalism is built
to a large extent on IP. As remarked by our friends at IPI,
when anti-globalists launch into their battle they rely on the web,
laptops, aircrafts and mobile phones, all of which would not have
been developed in the absence of IP rights. In many cases, they
rely on funding from US foundations which are based on endowments
from capitalist ventures and proprietary concepts. Tough luck; but
in the end this will show which system is built for sustainability. Science, sense and serendipity In the past 80 years, progress has been flamboyant; yet reports of the drying drug pipeline are legion. Biotech is all the rage, and corporations are buying them out to get some butter on the table; but it is not a panacea. Biologics is about tailor-made medicine, adapted to individual needs. For industry, this means the beginning of a farewell to blockbusters and mass marketing; for government, it means a growing movement of informed consumers who demand individually designed therapies and products, far from the vision of an average patient. As The Economist pointed out last week, “America, Europe and Japan
will face an explosion in health-care costs unless researchers find
new treatments”. Yes and no: new thinking is needed, especially
by looking at health care as a growth industry, instead of a growing
liability for worn-out Welfare States. Second, start-ups such as
Care Capital
and Symphony
Capital have taken on drugs rejected by the majors. The Milken
Institute is also active in discovering new ways of financing
development. And serendipity works: more often than not, products
intended for a certain ailment turn out useful for other patients.
Provided of course that governments allow this to proceed. We have
yet to find a cure for the opposite situation. Past masters and petty theft What is actually stolen is frequently a contentious issue: I would claim for instance that the introductory chords of Tchaikovsky’s first piano concerto were lifted directly from Bach’s prelude n° 1 (the harmonization, not the key). Through this
site, I got to the Columbia Law Library's Music
Plagiarism Project where you may browse famous cases, and even
compare the litigious artworks yourself. Many of the multinationals
feature, including Disney, Paramount, Warner and McDonald’s. (A
propos: if you would like to catch up with the "Mc Strife"
series, check out how the mother of all burgers won its
case in Malaysia.
Seek and ye shall find, hopefully Former French minister of education Allègre wrote this week that, although EU research in many areas match US standards of excellence, the problem lies in insufficient private investment. Unlike the American market, research doesn’t translate into innovation, nor into financing of universities. This is no scoop for France, where government has always been the prime “investor”, turning scientists into civil servants. My neighbour, a young talented chemist, in vain looked for employment in Paris before settling in New Jersey. Chirac’s recent Stalinist invention, the Agency for industrial innovation, will hardly help. A pitiful practical application of this kind of thinking is Airbus, truly a lovely example of bold industrial policy, wisely conducted by Franco-German leadership. The result: a two-year delay for orders and annual cutbacks to the tune of € 2 billion. Une affaire. This IHT story sums up the debacle nicely. Let’s revive the Concorde quickly: the design was great, and EU
scientists may want to scurry even more rapidly. In video veritas According to Business Week, the streets of large Chinese cities are full of pirate copies, sold generally at around $1. In response, major US studios have reduced their prices from $3 to $1.88. This seems to pay off, since quality remains an important concern for consumers. Apparently, some pirate copies or even quite a few are the result of camcorder amateur sneaking, and not always a quality hit; translation is also a problem. Our friends at IPI recently published a paper, carrying some staggering figures on the loss to industry from piracy and counterfeiting: $6.1 billion in 2005 alone. Friends of private copying would argue that this hurts nobody poor, especially not the majors and their handsomely paid actors. Yet the industry seems to reap some benefit from lowering prices to counter this massive underground business. Concerning developing countries, the outlook will change once the
national producers in places like China and India (a market of more
than 2 billion after all) begin to feel the need to support IP legislation
to protect their own endeavours. Should it get physical? "When you steal a car, the former owner loses the car. (…) But when you copy a copyrighted work, the original owner still has their copy. Nothing physical is stolen, so it seems very different." Copyright in the software domain is of course demonstrative of what modern technology does to the concept of IP. I recently circulated a short story to friends; their acclaim encouraged me to seek publication in a newspaper. But if anybody passed it on into wider circulation, I could really do nothing about it (nor would I try); but somebody might eventually publish in his own name. And I would have no right to the theoretical proceeds as no copyright protection existed. (Also, my text was inspired by a famous Swedish author, so I might even be accused of plagiarism, although it was intended as a pastiche.) Self-ownership is a useful place to start, as Brad Templeton does.
The value of a thing is not in the material aspect, but in the way
the material is arranged. Mind over matter is often ignored even
by non-Marxists when copyright is involved. Content to be king I also like to think that I produce a text which is something I’d like to read myself (the feedback is scarce, however). In a web environment access to information improves by the minute, but the frontier between copyright and the right to copy is hotly debated, indeed even modified every day as multiple actors define new ways to create content and new channels of distribution. In 2004, I attended the Aspen Summit (sometimes described as "the digital Davos"). The closing speech this year (pdf here) was made by the well-known S. Redstone, founder of Viacom and although he may be anathema to youngsters in pursuit of freebies, his presentation is well worth reading. Similar events have been launched in Europe, much thanks to our
friends at the Istituto
Bruno Leoni. Another blow for traders After the European Court of Justice ruled on the Bayer case in 2000 (supply restrictions of the product Adalat to prevent parallel trade from France and Spain), the Greek competition authority ruled in favour of GlaxoSmithKline two weeks ago in a similar case. As in the Astra-Zeneca example (see my posting from last week), the issue was whether a company’s refusal to supply could be considered an abuse of dominant position under Article 82 of the EC Treaty. But the case could not be put to the ECJ, because the Greek authority is not an independent judicial body. Is jurisprudence changing? This article suggests that, as parallel trade has expanded heavily, the judicial approach has also evolved. At any rate, already the ECJ ruling in the Bayer case stated that “(nor), finally can the Commission rely in support of its argument upon its conviction, which is, moreover, devoid of all foundation, that parallel imports in the long term bring about the harmonisation of the price of medicinal products”. True; the benefits accrue essentially to the traders who, moreover,
are involved in an artificial arbitrage created by price controls. Is Losec the loser? The focus was on the Commission’s interpretation of antitrust legislation vs. IP protection. It would seem that EU authorities maintain a double standard when judging innovation, depending on the industry sector. As summarised by the conference chair, Dr. Meir Pugatch, “in terms of software, follow-on innovation is mostly celebrated for competition; whereas new pharmaceutical products are usually described as ‘me-too’ drugs”. He also asked, is there a middle ground in EU policy between reasonable IP protection and antitrust legislation? Astra Zeneca was found guilty in 2005 on two points: first, “giving misleading information to several national patent offices, resulting in gaining extended patent protection (…)”. Second, “misusing rules and procedures (…) with the intent of blocking or delaying entry of generics firms and parallel traders”. The fines are probably small change, both for the victim and for
the EU budget (€112 bn for 2006). Yet, finding more companies guilty
of such practices provide profitable cash-cows. The show must go
on, and there is no legislation against that. A bite out of Apple As I wrote (20 March), the demand on Apple to make iPod compatible to other formats is germane to suing an author for not having published her works in all languages. (David also reported on the case on 6 July.) Still, the French constitutional decision must be saluted, although the requirement for interoperability remains (but with compensation) and Apple may be forced to license iTunes. The law could now either incorporate the changes to conform to the Constitution, or be submitted to another vote in Parliament. However, and perhaps more importantly, the Council decision makes reverse engineering illegal. On the other side of the ledger, Apple had to admit defeat recently
in a $100
million settlement with the Singapore-based Creative on the
use of its Zen patent for developing iPod. For this sum, the company
may now use the Creative patent in all its products. Considering
that iPod now represents 40% of Apple sales, this is probably relatively
cheap. IP - therefore I am Personal trademarks are certainly big business, and we may marvel at what may actually be the object of commercial exploitation. According to Wikipedia, “trademarks can be a style of haircut (Elvis Presley's distinctive ducktail), articles of clothing or accessories (Liberace's flamboyant costumes and jewelry or Elton John's oversized sunglasses), facial hair (Groucho Marx's mustache), or even breast size (Dolly Parton and Pamela Anderson)”. It should be underlined that, whereas your last name may indeed qualify for trademark registration, the same turns out to be more delicate with a first name: as I mentioned previously, UK popstar Sting tried unsuccessfully to register his artist name some time ago. French football star Zidane (despite his dishonourable discharge in the last minute of the World Cup final; you may watch it here) is a multiple trademark: metal chains, trophies, glasses, clothing etc … In fact, even this act is now the object of IP rights as a Chinese entrepreneur has deposited a license for marketing the sequence in China. Increasingly, celebrities are protecting their names since tucking
their initials on whatever product may prove a profitable venture.
And let me stress to potential sponsors that my name is still available
and not yet registered. No violence involved. Say “cheese”! Pas du tout The French law (my translation) states that: “Is punished by one year imprisonment and € 15,000 in fines the fact of publishing, in whatever manner, the edited words or image of a person without her consent, if it doesn’t clearly appear that it is edited or if it is not expressly mentioned.” With the obvious exception made for taking pictures of celebrities doing their stuff, the “droit à l’image” is extremely severe. As an individual, you even have the right to prohibit somebody taking a picture of your block of flats. A couple of years ago, weeklies started barring people’s faces on almost every photo, giving the somewhat eerie impression that the whole publication was about people involved in criminal lawsuits. And in a way they were, at least potentially. Many people had found out that suing the media for privacy infringement could be pretty lucrative. In case of broadcasting or publication, the prison sentence is
the same but the fine can reach €45,000. But then the question is:
does Brian have the right to publish pictures taken in Paris on
his website? Or can I publish pictures taken in London on a French
site? After all, there are lots of French people in London. Sounds familiar As it turns out, this is Madonna’s single Hung Up, released last October (sorry for being late). She asked authors Andersson and Ulvaeus for permission to use the ABBA song “Gimme gimme gimme”. As a curiosity, the song was released as a telephone ringtone even before the actual song was. According to press accounts, Madonna had to do a good deal of grovelling to get what she wanted. And the deal must have been very juicy on both sides, perhaps especially for Madonna: she is the second exception to the rule that ABBA songs are not to be recycled. The Fugees managed to get permission to use “The Name of the Game” in their track “Rumble in the Jungle” in 1996. (On a different score, this reminds me of when Serge Gainsbourg
recorded a satirical reggae version of La Marseillaise “Aux armes
et caetera” which brought him the ire of French nationalists; but
since he had bought the manuscript by Rouget de Lisle, he could
show that his version was actually closer to the original where
the words of his title figure…) "And that's Monopoly!" While attending the latest meeting of the Amigo Society in Brussels the other week on IPRs and competition, this argument came back to me (full transcript will be available within the next week, but you may read a good summary of the event in the KnowIP newsletter. Maybe some will also recall that marvelous poem/book/video “The
Incredible Bread Machine”. Others have written more and better
on this than I ever could (see for instance IBL’s
Briefing Paper) but I cannot see a reason for disqualifying
a “monopoly by consumer choice”, which is more or less what the
Microsoft case is about. Come to think of it, it’s not even a monopoly.
Which would mean that EU authorities will have their work cut out
for them in coming years, "correcting" consumer choice. Where does it come from? But one aspect is conspicuously absent, and I cannot help wondering about the underlying motives. Even The Economist waxes lyrical about “doing some good to the world that has done so much good to them”. W. Buffett was also cited, deriding his country club pals who complain about excessive welfare benefits, yet give their children loads of money. Rich people may give their money to their children (with admittedly possible negative consequences for their offspring’s sense of responsibility) or to others; and the urge to give is doubtless a good thing. But I resent the idea that this stems from some obscure obligation to restitute to society what has been taken from it. Messrs. Buffett and Gates are free to select their endowments, and right to be rigorous in monitoring how the capital is spent. But the assumption that they “give back” resources to the community implies that it was “stolen” in the first place. Charity implies that there is something to give away which was
first created. IP entrepreneurs like Bill Gates should be particularly
careful about semantics in dealing with welfare projects, lest they
undermine the legitimacy of their fortune: no good deed goes unpunished. The right to smell Legend has it that Chanel n° 5 as a name was chosen because the sample picked by Coco Chanel from the rack of various possibilities from the laboratory carried that number. (Much later number 19 arrived, but I doubt it came from the 1950s echantillon.) The Dutch supreme court recently ruled in favour of Lancôme’s copyright claims concerning its product Trésor (immortalised by Isabella Rossellini in some breathtakingly beautiful commercials of immaculate execution) against Kefoca’s Female Treasure. Now, notwithstanding the similarity in brand names, how any mortal can detect nuances in scent between similar perfumes is beyond my olfactory capabilities: I can tell a locker-room at half from a rosebud, but that’s about it. A Dutch lawyer, commenting on the verdict, said: “Where the product is original and passes the ‘work’ test, there will be protection against smell-a-likes, but I would not expect a huge scope of protection.” On the other hand, if copyright is allowed for the smell of perfume, this may provide a case for protecting other smells as well. Again, innovation doesn’t go entirely without imitation and the
scent of success is always irresistible. Regulation: competition is needed There is room for improvement, provided we recognise a major factor: globalisation of trade ignores national boundaries and legislation. This is already wreaking havoc on existing frameworks. Were we to examine existing rules on IP, I wager that major revisions are due: what is the proper role of copyright in the digital age and how to enforce it? Can patents be extended, based on minor addenda to the existing product? Recent discussions at WIPO and WTO reflect the increasing complexity of industry and the ensuing need for flexibility in rule-making; why not declare a free market in standards, certification and labels? Creation deserves protection of property rights; but clearly the
existing rules are slowly reaching their date of expiry. CIPIH: not patentable Unlike the authors of the CIPIH report, our colleagues had a great idea: why not apply the criteria for patent applications to this long-awaited publication? That is to say, is it innovative, applicable and non-obvious? Perhaps unsurprisingly to readers of this page, the authors find that the WHO report fails the test: the lasting impression is a rather pitiful mix of excruciatingly bland statements (“it is important to seek innovative ways of combating Type I diseases, as well as Type II and Type III dieases”), ideological ranting reflecting the UN configuration and a general hostility to IP. As underlined by the authors, in view of the considerable resources
spent on producing the report, taxpayers worldwide could reasonably
expect to get more value for money. But then, government (along
with, a fortiori, international organisations) was never
hung up on consumer satisfaction. A depressing but necessary read. Science makes strange bedfellows To defend itself from insects, the tobacco plant produces terpenoids whose metabolism may be genetically modified to extract molecules with pharmacological benefits. This could also potentially prove useful for Alzheimer patients. And it’s not only tobacco: plants like basil, sage (rosemary and thyme, if you want to sing along) and even lavender are potential candidates for generating new medicines. Right now the company Librophyt is growing this medicinal tobacco in greenhouses, but recently got government approval for planting a small field (despite the constitutionally guaranteed principle of precaution, no less). As the article points out, best of luck until José Bové and his comrades turn up … Perhaps this could eventually also turn out to be a boon for tobacco
farmers, once the anti-smoking lobby has won its ultimate victory
to make cigarettes illegal. And it will be very interesting to see
if the anti-GMO community will welcome patent applications for such
a novelty. Regulation: yes, but independent please Dr. Chen of the Jiatong University recently tarnished the spirit of the Chinese equivalent of the Bayh-Dole Act, which was supposed to stimulate cooperation between academia and business. Chen claimed he had produced China’s first high-speed chip, using substantial government funding, thus boosting the official policy of a home-grown high-tech industry, independent of imports. But officials at his university revealed that he had in fact used Motorola chips and slapped his own trademark on these. As in many other cases, official watchdogs may prove insufficient; according to The Economist, an independent website, New Threads (for Sinophones only!) has unveiled numerous examples of academic fraud. This may be compared to what goes on in medicine: the higher incidence of heart attacks which forced the withdrawal of Vioxx from the US market in 2004, was revealed by off-label research by independent scientists. The FDA review had missed this, as pointed out in a recent book from the Cato Institute. Fortunately, the market is very good at certifying products, indeed
often better than government. In the case of medicine this system
kicks in once the FDA has approved new products. Competition, once
more, is key to effective regulation. The flavour of fake, the scent of success It has been asked in recent years to “show the corpses”; well, they are apparently here. In Haiti, some 30 people have died after consuming a counterfeit cough medicine. The other day, the Union des Fabricants organised an event in Paris on counterfeit medicines, and some staggering figures were made public. Historically, France was not directly concerned, as the country was essentially a transit territory for this kind of business. Today, transit is half; the rest is for the national market. There are 9,000 francophone websites for pharmaceuticals. On a more positive note, it seems that creators of perfume will
be protected by copyright, at least in France (I believed this was
already the case). Not a bad thing, at least for the Treasury, considering
that the perfume industry represents half of the country’s expenditure
for oil. Olfactory or oil factory; that is the question. Comedy of the cybercommons Now that domain names are becoming trademarks in their own right, it is profitable to register names and wait for them to be bought. WIPO deals with dispute resolution, but there is no genuine international consensus on how to treat problematic names. And the number of disputes is rising. The artist Sting wanted to register sting.com, but the demand was rejected because the name is also a common word. By contrast, the French organisation AFNOR early started to register common words and then sell them whenever somebody tried to use these in corporate names or on the web. I find it heartening that the Internet keeps working largely thanks
to standards such as the ICANN
policies which have evolved spontaneously, or at least without
undue government meddling. But will it last? Taking a French leave Whatever that means. Meanwhile sales of CDs are falling sharply for the third consecutive year according to the SNEP and the IFPI which recently published a report on the expansion of legal music downloads (pdf) which doubled in 2005 (reaching more than 420 million tracks). But France being France, the real action is of course very often in the streets: a newly created lobby, StopDRM (or should that perhaps read “mobby” since they seem to be doing quite a bit of flashmobbing?) staged a demonstration in Paris yesterday to protest against “digital locks”. Judging by the list of associations supporting this (including the free software crowd), there may have been quite a turnout. After demonstrations for life-time employment in the public sector,
this may be the opportunity to ask for another free ride at the
expense of those who actually create something. Laissez-faire...l’Etat The recently created state Agency for Industrial Innovation (indeed, who would otherwise take care of this?) has a budget of € 2 bn to “reinforce the excellence of our industry and our services to create new high-tech jobs”. (Query: if French industry is excellent, why is this needed? And from what sectors is the money taken to finance this?) This last-minute homage to central planning from a dying political regime is indicative of the general decadence of the only genuinely communist leadership in western Europe. The French presidency seems set on turning its delusions of grandeur into yet another mind-boggling waste of taxpayers’ money. Still, Chirac noted that China spends five times more than France
on research; but is there any reflection at all in high places on
the reasons for this? If the state were the source of innovation
and development, France would be a world champion of prosperity.
Maybe there is room for rethinking; 1 million French university
graduates/young professionals have already used their intellectual
faculties to move elsewhere. Flashback to the future: when a lawsuit is
good news This is worthy of record, not only because it is a forerunner of the shape of things to come; it ushers in the conversion of a long-time pirate economy to the blessings of IP to ensure the lasting prosperity of a booming industry. In short: Netac, based in Shenzen, recently charged PNY (Texas) for violating its patent on a flash-memory product. According to some media accounts, Netac is better known for its litigation than for its products; still, this is a primer. For a number of years, foreign companies, in particular US corporations, didn’t bother with IP protection in China because of lack of faith in the judicial system’s willingness to enforce it. However, China has accepted patent applications for more than two decades. Indeed, more than 60% of US patents in China were granted in the period 2001-2004. And WIPO has reported a 43.7% increase in patent registration in 2005 compared to the previous year. It may seem odd to salute a lawsuit in this context; but this
may well herald the beginning of a positive trend, indicating the
transition to increased IP protection thanks to growing prosperity
and globalisation. Said the CEO of Netac: “IPR can also bring profits
to us.” Indeed. Mac the Strife or them Apples The issue, said the Court, is not about reputation, but concerned the possibility of deception and confusion: the defendant, Future Enterprises, had asked for trademark registration of MacTea, Mac Noodles and MacChocolate. The claim was then that this could be mixed up with McNuggets, Mc Chicken, MacFries and what have you. The suit was launched in September 2003. The defendant was accused of being in the same business (fast food) and using the prefix “Mac” (although with an altogether different logotype as may be seen here). Albeit a McDonald by ancestry (Scottish, not American), I think it slightly ludicrous to claim a monopoly on a prefix. Speaking of Macs, Apple Corps (the Beatles’ old label) recently
attacked Apple Computers in the High Court of London.
Since the latter has moved into the music business by virtue of
the explosive success of iPod and iTunes, Apple Corps says this
is a breach of a 1991 settlement. The jury is still out on these
Apples of discord. Round up the usual suspects Although certainly better than similar documents from international agencies, it’s still a long way from a genuine understanding of what the creative process is about. An example: there is no market for western drugs in developing countries, because of poverty. Arguable; but why are people poor? Not because there is no market, but because there is no market economy! It’s a bit odd to blame the market for the lack of medicines, where you should blame the lack of market. The so-called market failure is supposedly fixed by increased use of public/private partnerships. Thanks to IPI for the alert. The IPN has produced an effective response (pdf here). As stressed by dissenters in the working group, further definitions
are needed: there is talk of “developing countries” without distinction;
this group covers both extremely poor countries (e.g. Sudan) as
relatively or even quite wealthy ones (like Brazil. Further, the
dichotomy “access/patents and pricing” rears its head once again,
although it should be clear by now that 1) almost all essential
drugs on WHO’s list are off patent, and 2) if such a correlation
existed, most Indians would have access to ARVs. To be continued... French kiss of death Demonstrations galore as I write, awaiting Chirac’s speech to the nation (Friday 31 March). The concerns are nominally domestic; the implications in effect universal. Should Chirac retract the reform, he will lose whatever is left of his credibility. If Prime Minister de Villepin is forced to resign little more than one year before the next elections, same thing. If they both press ahead, protests will continue. And France’s international reputation for reform will be further tarnished. The outcome of this crisis will determine the “fin de règne” of Chirac's largely disastrous 12 years in power. In terms of intellectual property, France has probably wasted more resources than any country, bar the Soviet Union: although innovative industry has performed well (abroad), public discourse and policy have damaged entrepreneurs beyond imagination. The French economy has little space for IP and innovation, because its political leaders are paralyzed by their fear of open markets. The progressive embrace of IP protection in Asia is astounding
by comparison (although the
US recently blamed lacking IP legislation in China for its trade
deficit). Although Chirac is a great admirer of Chinese civilization,
his interest lies mainly in the past and not in current achievements.
During his mandate, the French intelligentsia has managed to produce
countless publications explaining why capitalism works everywhere,
except in France. Open source developments OS structures have expanded recently to cover many other areas (e.g. Wikipedia) and even drug development ). These projects are often useful resources, building on a “strength through joy” of sorts where cooperation is the founding value, at least theoretically. But there is equally a growing business element, since no viable industry may take shape without some kind of admission of proprietary information, acknowledging individual contributors. As The Economist put it recently, “rather than a democracy, open source looks like a Darwinian meritocracy”. The strength of the OS movement lies partly in free or very cheap dissemination of existing information. But it has yet to yield substantial innovation. Also, one of the founding documents, the GPL licence, was recently overhauled and a debate is ongoing. This is worth watching; and OS developments are fine as long as
its supporters don’t take their model to policymakers to make it
mandatory. But this temptation cannot be excluded. Plus ça change... As I write this, French students are demonstrating against the new labour legislation, introducing a trial period of two years before offering steady employment. IP is also about every individual’s freedom to use her faculties for profit. And what I see through my window are young people, most of whom are keen to find gainful employment. But current French legislation has a sovereign disdain for new candidates (unless you are a high civil servant). I bet high odds that the CPE (Contrat Première Embauche) will be severely watered-down, or withdrawn before long. The issue comes down to exit and voice: what you see is the students
protesting against a system which has stalled. What you don’t see
are those who have understood that the so-called French social model
is neither a model, nor social as it consistently creates 10% unemployment,
and you also don't see those who have taken their talents abroad.
As France is governed by elites with no understanding of international
economics and globalization, this is hardly surprising. But it illustrates
once more the illusions of the chattering classes, and – more sadly
– the plight of those who persist in believing them. French Toast Politicians are usually 10 years late, and in France probably even more; but civil society and business are very much attuned to the global context. The issue of music downloads is a case in point, hotly debated lately. The other day, government backtracked on a draft law which would have authorized downloading for private use. I’m not sure to which extent this is favourable to IP as such; but a recent Op-ed in French economic daily Les Echos detailed the benefits of legal downloading, and it was signed by five major industry representatives. The article interestingly stressed the niche provided by the web for budding artists who have yet to sign with a company. And this fits in nicely with the fact that music fans on the internet generally don’t download albums, but carefully selected tracks. Compare this to a salad bar versus the greengrocer: in the first instance, you appreciate the mix offered; in the second case, you don’t want a mixed salad imposed if you are only looking for a carrot and some tomatoes. But again, remember that IP rights are essentially a government
concession, subject to social outcomes, and therefore a constant
potential victim of political trade-offs. Flat-pack capitalism Indeed, the holy concept was first formulated by founder Ingvar Kamprad in 1976. It puts draconian limits on any franchiser’s wish to stray from the original intent, by modifying for instance the layout of IKEA stores. The basic rule is that people come to furnish their home; the largest room is the living room; and the most important piece of furniture is the sofa. So a tour around the store must start there. Any recalcitrant faces the ultimate threat of having the IKEA sign removed from the operation. As Kamprad puts it in his memoirs: “The framework is sacrosanct, but inside its limits freedom and creativity are free to explode.” (my translation) Such a trademark faces constant challenge. Probably the most bizarre
“takeover” attempt was made a couple of months ago by Russian populist
politician Zhirinovsky, suggesting a name swap (see
here). Show me your DNA, please The mapping of the human genome may well spell the end of pharma-economics as we know it, although we don’t yet know when and how. But genetic testing is already being done, and according to Sandberg, we will soon be able to get it on the Internet. This will on one hand create potential dilemmas in the production of medicine (will there still be a mass market? Is this the beginning of personalized drugs?) and on the other considerable privacy issues (producers will need to access some data to provide genetically adapted medicine, and individuals may not necessarily agree). There is also the issue of orphan drugs – would they become more or less “orphan”? Testing will become easier as technology develops; and the increasing
demand for better access to the latest products and more information
will combine to put more pressure on companies. But it should also
put pressure on regulators not to hamper innovation in the name
of safety; and on politicians to appreciate the outcomes of new
technology, rather than seeing it unilaterally as a "cost". Lisbon: is the agenda buried or mislaid? This feeling often haunts me when reading political news. Take the famous Lisbon Agenda which is increasingly cited – not because it’s really on the table, but because reality keeps coming back in through the window, and politicians need to show that they are active, insightful, concerned about the future and statesmanlike. Or as the Luxembourg PM said in 2005, "We know what has be done, - the only problem is that we don’t know how to win elections after we’ve done it." President Barroso is worried about R&D in Europe: it lags far behind the US and Japan in terms of percentage of GDP, and is well below the 3% goal. He detailed this in a speech last month and relaunched the idea of a European MIT. Ostensibly with the objective of avoiding red tape, pooling national resources and encouraging scientists to submit their own projects, this smacks suspiciously of constructivism once more. The very idea that science and innovation may somehow be fostered and nurtured by state (or even EU directed) projects should seem absurd. I would recommend more careful reflection on the correlation between profit levels and R&D spending. Neither is the work of the government, yet European leaders often seem hellbent on raising another memorial to Soviet performance instead of stemming the brain-drain. And that the French are pleased with the new version of the Services
directive voted last week doesn't bode well for the Lisbon process. Trademark buzz, or the Beetles Greatest Hits As the Economist recently editorialized, taxonomists have long used family or friends’ names (an old privilege it seems) for their discoveries, but it looks like this is increasingly a potential business for wannabe trademarks. In 2005, president Bush and his VP as well as Defence Secretary Rumsfeld were honoured (if that’s the word) with beetles bearing their Latin names (e.g. Agathidium rumsfeldi). There are of course many historical examples: Bougainville and Linné (plants), or people putting their names on places discovered (Vespucci never got any royalties as far as I know, not to speak of Columbus). An interesting detail is that a name for a monkey fetched a forbidding sum of money, sold by an online casino in 2005, according to the same source. And as the article suggested, there may be a sponsorship business in this, what with corporations constantly looking for new symbols, logos, gimmicks and mastheads. As we know, politicians and wealthy people are all keen to leave
their name on something; proprietary instincts are frequently a
major driver in the search for immortality. Small comfort perhaps,
but it could apply to many things; you name it. Open source and hidden conflicts What’s the claim? I don’t pretend to understand this in detail, but the issue seems to be the following. Some weeks ago, the latest version of the GPL (General Public License) was released, and Torvalds recently declared that he will not sign up his Linux to version 3, saying: "I don't think the GPL v3 conversion is going to happen for the kernel, since I personally don't want to convert any of my code." (Details here.) The free software people would like to name the system GNU/Linux, as Stallman had already started his project when Torvalds came along in 1991 to create a splash with his new operating system. The problem is that Linux offers copyrights to quite a number of people who helped write the code, and they would have to agree to the proposed conversion. Oh yes, things become complicated when you want to oppose IP (that
of others) and keep it (when it’s yours). But then, denying the
existence of property always was a tricky business. |
