A Panel Discussion on Policy Approaches to Intellectual Property Enforcement and the Impact on Trade Agreements
Organized by the Property Rights Alliance, this event was hosted by the Intellectual Property Caucus and sponsored by Rep. Tom Feeney.
Date: 12:00-1:30pm October 4, 2007
Venue: Rayburn House Office Building, Washington DC
Attendance: Congressional staff, industry representatives, other interested parties.
The panel discussion began with brief welcome remarks from Kelsey Zahourek, Executive Director of Property Rights Alliance (PRA). (The PRA’s position on recent compulsory licenses can be found at:
http://www.propertyrightsalliance.org/index.php?content=cmplsrylic)
PRA annually publishes the International Property Rights Index
(http://www.internationalpropertyrightsindex.org/). This report ranks countries on property rights protection. One of the highlights of the most recent report is the reported positive correlation between property rights protection and economic well-being as indexed by GDP per capita.
Introductory remarks were by Satya Thallam (PRA) who will author the second International Property Rights Index report. Mr. Thallam addressed the question of whether strong intellectual property (IP) protection and free trade can co-exist. He highlighted two aspects of the relationship between IP protection and free trade: IP enforcement can be thought of as restricting trade in certain ways (e.g., exportation of pirated products) and, IP enforcement requires agreement from all parties involved in free trade.
Brad Huther (President and CEO, International Intellectual Property Institute; and Senior Advisor for Intellectual Property Enforcement, U.S. Chamber of Commerce) commenced the discussion. He remarked on the role FTAs and US interaction with developing countries has on how US IP policies are perceived and accepted outside the country, especially in developing coutries. He mentioned that the US was increasingly experiencing a lot of push-back from developing countries at international fora such as WIPO, WTO with regards to raising IP standards.
Victoria Espinel (Assistant U.S. Trade Representative for Intellectual Property and Innovation) explained that IP rules and free trade often appear to be competing ideas. She explained that in fact that any conflict between the two is only limited to the short term and strong IP is essential to achieving the long term goal of fostering innovation.
The US has signed approximately 13 bilateral agreements so far and each one has had very comprehensive chapters on IP and enforcement that cover the whole spectrum of IPRs (copyright, patent, trademarks etc.), she said. The US position is to push for the highest possible IP standards. USTR has policy instruments to protect its IP rights in the form of FTAs, TIFAs (Trade and Investment Framework Agreements) and bilateral discussions (at any given time the US is conducting an average of 60 bilateral discussions).
An important instrument to incentivize enforcement is the Special 301 program which publishes the Special 301 Report each year. Although trade sanctions are not attached to some of the categories that countries are ranked under, just inclusion or position on the watchlist serves as a powerful tool to stimulate improvements in enforcement in the countries concerned. With such results USTR envisions increased spending on its 301 program. USTR also employs dispute settlement procedures such litigation under the WTO and FTA agreements. For instance, USTR currently has 2 cases against China in the WTO (for IP and market access restrictions for US companies).
Finally, Ms. Espinel pointed out that there was a limit to how much could be achieved under US government pressure. Countries need to have a higher stake in IP and become innovators in order to appreciate the benefits of a strong IP system. The TRIPS is a landmark agreement. Yet, at the time it was drafted a lot of the present day’s challenges did not exist. There is a need for higher IP standards to be embraced internationally. In this regard, more and more countries are improving cooperation around IP.
Joe Papovich (Senior Vice President-International, Recording Industry Association of America) commented on how developing countries refuse to negotiate improvements in IP. The US does IP well and is therefore grateful that it an important ingredient of our trade policy. Luckily, we can make use of bilateral negotiations and FTAs to acquire leverage over countries (recent example of Korean FTA). He mentioned the use of the GSP program whereby the US government grants duty free access to the US market and these benefits can be revoked if the concerned country fails to maintain high IP standards.
He also acknowledged that there is growing resentment in countries because of US pressure. Yet the creative communities in these countries are starting to appeal to their governments for stronger IP laws. As an industry representative, he would like the government to provide more technical assistance and train local law enforcement etc.
Greg Frazier (Executive Vice President-Worldwide Government Policy, Motion Picture Association of America) sees the Congress as an ally against worldwide piracy. Free trade as a rules-based trading system includes the protection of property. As an example of the benefits IP provides: India is the largest motion picture industry and China has the most producers of movies. Yet, the US industry earns more and is an export winner. Critical to this industry are FTAs, bilaterals.
Chris Israel (U.S. Coordinator for International Intellectual Property Enforcement, Department of Commerce) commented that the value of IP amounts to about half of the US GDP. It is important to think about how to generate the motivation for IP in those countries. “We have to make sure we are the standard for the world.” Export our strong domestic enforcement to other countries.
Q&A
Q: Comment on the very real problems of access that exist along with high IP standards. For instance, access to knowledge goods- textbooks that are priced too highly in developing countries, or pharmaceutical products that can make the difference between like and death. With promoting higher IP doesn’t there also come a responsibility to address issues of access?
Victoria Espinel: Aware that a lot of concerns have been raised about access but this is a complicated issue. Yet, there is no clear link between high IP and lack of access. USTR takes these concerns seriously and recognizes the flexibilities that exist. If countries need to use them they should use them. But the answer is not to dismantle the current IP system.
Chris Israel: The link (between high IP and poor access) is over simplistic and not based on facts. Access is being offered by the companies and through quality supply chains. Companies are meeting needs on open and honest terms. Such arguments are being used a negotiation ploy/tactic by some countries.
Comment by Association of American Publishers, Inc.: Need strong IP protection because in each country publishers need to tailor their textbooks to the local environment. They cannot enter a market without investing a lot of resources. Publishers are doing a lot by heavily discounting books.
Comment by former legal counsel for Merck in the Africa region: Raising awareness on issues of access in Africa has actually been a great success. This has reduced the risk against non-quality products because companies are meeting the needs with quality products.
Q: Question on applying remedies to deal with problems of access. Are CLs fair and equitable?
Vistoria Espinel: TRIPS allows them. While they exist, people are using them as a way to dismantle the IP system generally and setting a dangerous precedent. Should be careful about creating the impression that IP reduces access. Need a system of rules to incentivize companies to continue creating and innovating. Example of Indian pharmaceutical industry which is gaining momentum (more innovation).
Q: Comment from audience: have you ever thought about using the argument that IP leads to strong industry and income. For example, India has decent copyright policy and has a thriving related industry. It has poor patent law and therefore not much related innovation.
Panel answered that they were not about whether strong copyright law spurred on the industry or industry existed before laws.
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There were very few questions before the session ended. Following the initial question on access comments mostly continued to focus on access and use of flexibilities. One comment was that for the next panel there should be persons representing the whole range of IP, especially patents/trademark.