Strengthened intellectual-property laws in developing countries decreases the ability of local communities to gain access to technological information (through reverse engineering and other imitative methods). This makes technological catching-up all the more difficult. In this brave new privatized world, the only way to have market power is to innovate. But the only way to innovate is to have lots of capital to invest in the first place, and developing countries only account for 6 percent of global research and development expenditures. As poor nations strengthen their intellectual-property regimes, their markets increasingly are dominated by imported goods, because their local industries can’t compete.
The WTO acts as a policing mechanism that allows countries to bring “unfair competition” charges and other actions against offending countries. For instance, the Bush 2.0 administration has been under pressure from the biotech industry to bring charges against the European Union for its ban against genetically modified food. In a letter to Bush signed by virtually every agribusiness and biotech firm, it claimed that the ban stigmatized biotechnology and “may be negatively affecting the attitudes and actions of other countries.” As if other countries should not dare form their own opinions and policies.
For years, the United States opposed in WTO courts the waiving of patents in countries that have been overwhelmed by AIDS and other deadly diseases, making it illegal for those countries to import generic versions of drugs at a fraction of the cost. Economic studies of Taiwan, China, and India have shown that when patent laws are strengthened, drug prices go up because these countries can no longer manufacture generic drugs. This pattern has been repeated numerous times in poorer countries, where price increases can be devastating. During the 1990s, the Brazilian government was proactive in dealing with AIDS, allowing local pharmaceutical manufacturers to produce low-cost generic HIV therapies. It wrote its patent laws to allow for what’s called compulsory licensing, which legally compels owners to license their patents at a rate regulated by the government.
This approach allowed Brazilian manufacturers to produce Nevirapine — which helps prevent mother-to-child HIV transmission — for an affordable amount. It cost $0.59 U.S. dollars a day to treat each victim, which resulted in a 50 percent drop in AIDS related mortality between 1996 and 1999. As a reward for this achievement, the United States took Brazil to the WTO dispute panel to force the country to undo its liberal patent laws.[16] “The power of the rich countries and of the transnational corporations,” argued John Sulston, “was being used in a bullying and inequitable fashion to achieve ends that benefit them rather than mankind as a whole.”After years of worldwide pressure, the United States granted concessions in the WTO that were largely meaningless, like a provision that allowed countries to manufacture lifesaving drugs with-out penalty. However, most of these African countries had no such pharmaceutical production base, making it impossible for them to legally acquire the drugs.
Years dragged on, millions upon millions died until, in 2001, the United States agreed on a proposal that allows countries to import manufactured generic drugs. But under pressure from the pharmaceutical industry, the Bush 2.0 administration quietly changed its position and sent its trade representative to the WTO to kill the proposal. Much of the world reacted with rage to this shift, and finally in 2003 the United States signed on to an agreement that technically allowed countries with no manufacturing base to import cheap lifesaving drugs. I use the word “technically” because the agreement contains so much red tape that it severely limits the amount of supplies it can import. “Today’s deal was designed to offer comfort to the U.S. and the Western pharmaceutical industry,” said Ellen Hoen of the medical-aid group Doctors Without Borders. She told the Associated Press, “Unfortunately it offers little comfort for poor patients. Global patent rules will continue to drive up the price of medicines.”
I only hope that she is wrong, though given the WTO’s and the pharmaceutical industry’s track record on this issue, I have little faith. The kinds of constraints intellectual-property laws impose on culture may be bad for music and creativity, but in the case of drug patents it’s literally a life-and-death matter. Patent policy is as much a moral issue as it is an economic one, solid proof that property rights trump human rights nine times out of ten. Yes, I realize that these pharmaceutical companies invest millions of dollars in research and development, but there are times when profits alone shouldn’t guide us and empathy and compassion should take over. However, we’re living in a time when, increasingly, money is the only thing that matters.
I’m not claiming that all patents are bad things, because it’s demonstrable that they can encourage investment in the development of products. However, I am arguing for two things. First, there should be some flexibility in the way patent protections are enforced, especially in situations such as the worldwide AIDS crisis. It simply should not have taken ten years for the WTO to adopt halfhearted rules about importing generic drugs, and I believe that those who tried to block it have blood on their hands. Second, there are too many instances when overly broad patents are awarded, which can cause information flow to be slowed and research and innovation to be stunted.
The most shameful detail in all of this is that all developing countries — whether they were the United States and Switzerland in the nineteenth century or Brazil and Thailand in the twentieth century — had very weak patent and copyright laws. Historically, countries left out of the technological-development loop have emphasized the right of their citizens to have free access to foreign inventions and knowledge. The United States in particular had extremely lax intellectual-property laws at the turn of the twentieth century, which allowed it to freely build up its cultural and scientific resources. Also, the United States’ agricultural economy depended on the importation of crops native to other countries because the only major crop native to North America was the sunflower. [17]
Even the music for the U.S. national anthem, “The Star-Spangled Banner,” was swiped from a popular eighteenth-century English song, “To Anacreon in Heaven.” This old drinking song was written by a group of English dandies in the Anacreonic Club, which was devoted to an orgy-loving Greek bard who lived during the 500 b.c.e. era. (Little do people know when they patriotically sing the anthem at sports games that the tune originally celebrated Dionysian explosions of sex and drinking.) In 1812 lyricist Francis Scott Key borrowed the tune, and in 1931 it became the national anthem.[18] Then in 1969, at Woodstock, Jimi Hendrix famously reappropriated the anthem and drenched it in a purple haze of feedback that fit the violent and dissonant Vietnam era. We are a nation of pirates.
Now the United States and other rich countries want strict enforcements of intellectual-property laws that ensure developing countries will remain uncompetitive within the globalized economy. Again, we wonder why much of the world hates us. Defenders of overbroad gene patents, terminator seeds, and global intellectual property treaties argue that without technologies and legal protections that safeguard their investments, there would be no incentive to develop new, innovative products. Companies such as Monsanto (whose comforting motto is “Food -Health -Hope”) insist that their motivations for doing business are grounded in a desire to prevent world hunger. By creating more efficient products, biotech, agribusiness, and pharmaceutical companies can contribute to the betterment of humanity, they say.
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K. E. Maskus, Intellectual property rights in the global economy; V. Shiva, Protect or plunder?; P. Drahos with J. Braithwaite, Information feudalism.