Date: 15 February 2011
Source: China Daily
Link: http://www.chinadaily.com.cn/bizchina/2011-01/20/content_11891425.htm
Champions of intellectual property rights (IPR) say it is the driving force of economic
growth and technological innovation. China has made its legislators perfect IPR
laws ever since it decided to embrace market economy, and asked its
law-enforcement agencies to ensure that they are properly implemented and
protected. The country`s increasing foreign trade has further strengthened this
demand, and the government and judicial authorities have made great efforts to
perfect the IPR system.
China has enacted and implemented a series of laws and regulations on IPR protection
and issued the Outline of the National Intellectual Property Strategy in 2008.
Its judicial authorities at various levels continue to crack down on people and
companies violating IPR. On the whole, the country has made considerable
progress both in legislation and enforcement of IPR laws.
But the purpose of an IPR system is not only to protect intellectual property,
but also to encourage innovation,
maintain social justice and thus promote comprehensive economic and social
progress.
The present tendency to lay undue emphasis on intellectual property both at
home and abroad may go against the original intention of an IPR system. Some
practices and disputes in the United States and other Western countries have
taught a lesson to China, rather than being experiences worthy of emulation.
The fundamental driving force of innovation is competition, while IPR
protection in substance is a kind
of monopoly. Monopoly can provide incentives for innovation, but it can also
prompt former innovators to gain high return by relying on the products they
have already innovated, rather than pushing them toward
further innovation. Such a situation will ultimately weaken the power of technological
innovation.
Moreover, a stringent IPR protection system will encourage enterprises to take
moral risks. To maintain their
competitive edge, some enterprises can use a strict IPR system to set up
barriers for their competitors.
Some scholars describe the IPR disputes raised by developed countries against
developing countries as "removing the ladder of development of developing
countries". Enterprises in developed countries often erect trade barriers
against their foreign competitors, especially those from developing countries,
in the name of
"infringement of intellectual property".
Very stringent IPR protection laws can worsen the conditions needed for
innovation. They can force innovators to focus less on further innovation, and
more on "infringement". The patent project in the US is now subdivided.
In the past, engineers used to apply for a patent on complete software. Now,
nearly each code has a patent right. Apparently, such an approach helps protect
the interests of inventors. But in reality, it greatly hinders technological innovation,
because an engineer now has to ensure that he/she is not using a code in
his/her new software that has been patented by someone else.
People championing the cause of IPR say that the huge expenditure in the early
days of technological innovation needs to be compensated by high returns now.
What they do not realize is that by selling more products at a lower price they
can recover the cost in relatively less time.
In their economics paper, Perfectly Competitive Innovation, Michele Boldrin and
David K. Levine argue that
in many current and historical markets, innovation has thrived in the absence
of copyrights, patents and other forms of monopoly power. They say that the
presence of rents induced by government monopoly grants,
intellectual property in the form of copyrights and patens may be socially
undesirable, and that government grants of intellectual monopoly could lead to
fewer innovations than under competition. Their conclusions may not be
absolutely correct, but they can be used for reference.
Developed countries have transformed their will into "international
rules" through multilateral, regional and
bilateral channels. They force developing countries to accept these "international
rules" which usually are in favor of the West. Such tactics are given full
expression in the disputes over formulation, passage and implementation of the
World Trade Organization`s Agreement on Trade-Related Aspects of Intellectual
Property Rights.
Another approach used by developed countries is to infiltrate the proceedings of
developing countries` domestic legislation and strive to formulate laws and
regulations in line with their interests, leading to imbalance in the
legislative process of IPR in developing countries.
After all, foreign institutions with abundant experience can easily gain the
upper hand and are more likely
to include their selfish motives into the seemingly reasonable proposals in the
name of "international convention" in developing countries, which are
busy mulling legislation in newly emerging industries.
In such cases, legislators must ensure that the voices of other market players
are fully reflected in the
legislative process to guarantee impartiality in rules. Hence, neutral and
objective Western observers should not label China`s efforts to seek justice as
"protectionism".
Every coin has two sides. The system to protect IPR is no exception. Whether
the system can be the driving force of innovation or turned into barriers impeding
technological progress depends on whether we can get rid of the shackles of
some presumptuous interest groups.
Keywords: IPR / China / Developing countries
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