Embassy of the United States

Economics

Intellectual Property Archive

AA09261
Quart, Alissa EXPENSIVE GIFTS (Columbia Journalism Review, vol. 48, no. 2, July/August 2009)
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Shepard Fairey, famous for his red and blue Obama silkscreen “Hope,” is a proponent of “free culture,” a stance that advocates open sharing of intellectual property. This “economy of giving” is a hallmark of the new digital reality. However, the Associated Press (AP) and the photographer who shot the photo Fairey appropriated for his art claim copyright, and the AP sued the artist for copyright infringement. For many, the debate hinges on whether or not open, participatory culture will destroy useful, traditional journalism institutions. It also illuminates the vagueness of “fair use” under copyright law. The author examines the ethics and importance of money and attribution in the emerging dispensation of the “gift economy.”

2009 SPECIAL 301 REPORT.
Office of the United States Trade Representative. April 30, 2009.
Full Text [PDF format, 44 pages]

The “Special 301” Report reports on the adequacy and effectiveness of intellectual property rights (IPR) protection by U.S. trading partners. Canada is being elevated to the Priority Watch List for the first time, reflecting increasing concern about the continuing need for copyright reform, as well as continuing concern about weak border enforcement. Korea is being removed from the Watch List in recognition of the significant improvements it has made during the past year, and the Korean Government’s policy direction of continuing to place a priority on improving its IPR regime.

AA08330
Bate, Roger; Nugent, Rachel THE DEADLY WORLD OF FAKE DRUGS (Foreign Policy, no. 168, September/October 2008, pp. 57-65)
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The fake-drug sector has continued to grow in speed and sophistication and, in the past decade, become one of the world’s fastest-growing criminal enterprises, says the author, a resident fellow at the American Enterprise Institute. Knock-offs have expanded, with often fatal consequences for unaware patients, from mostly lifestyle drugs to pharmaceuticals used in treating major diseases. A lack of quality oversight and enforcement makes poorer countries the most lucrative potential markets for counterfeiters. Bate points to China and India as the largest sources of dangerous fakes. The Indian government denies it has a problem, and in China, the military is rumored to be engaged in manufacturing and trade of fake drugs. The international community officially condemns counterfeiters but is too afraid to engage on a politically sensitive issue. NGOs contribute to the problem by purchasing inadequately-tested copy drugs from China and India. The author believes that pursuing major producers of fakes will require far more effective international drug testing and oversight as well as determination and funds. But he fears that it may take large-scale casualties for real action to occur.

INTELLECTUAL PROPERTY: FEDERAL ENFORCEMENT HAS GENERALLY INCREASED, BUT ASSESSING PERFORMANCE COULD STRENGTHEN LAW ENFORCEMENT EFFORTS.
Government Accountability Office, GAO-08-157, Report to Senate Committee on Homeland Security and Government Affairs. Web posted March 18, 2008.
Full Text [pdf format, 89 pages]

Five government agencies play a role in Intellectual Property (IP) enforcement; their enforcement functions include seizures, investigations, and prosecutions. While IP enforcement is generally not the highest priority in these agencies, enforcement activities have increased during the past five years. What GAO found, however, is that most participating agencies have not systematically analyzed their IP enforcement statistics, something which is critical with regard to IP crimes with a public health and safety risk, such as production of counterfeit pharmaceuticals.

GENERAL OVERVIEW OF U.S. COPYRIGHT LAW.
Congressional Research Service, RS22801, Library of Congress. Brian T. Yeh. February 5, 2008.
Full Text [pdf format, 6 pages]

This report provides a general overview of copyright law and briefly summarizes the major provisions of the U.S. Copyright Act.

INTELLECTUAL PROPERTY RIGHTS AND INTERNATIONAL TRADE.
Shayerah Ilias and Ian F. Fergusson. Congressional Research Service (CRS), Library of Congress. December 20, 2007.
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“This report provides background on intellectual property rights (IPR) and discusses the role of U.S. international trade policy in enhancing IPR protection and enforcement abroad.” Presently, counterfeiting and piracy in other countries result in a loss of billions of dollars to U.S. firms as well as a loss of jobs.

There are several key concerns for Congress about IPR protection and enforcements; such as, the appropriateness of FTAs (Free Trade Agreements) for promoting IPR and the effectiveness of current U.S. enforcement structures. This report will be updated when warranted.

ECONOMIC IMPACT OF COUNTERFEITING AND PIRACY. Directorate for Science, Technology and Industry, Committee on Industry, Innovation and Entrepreneurship, Organisation for Economic Co-operation and Development (OECD)]. June 4, 2007.
Full Text [pdf format, 25 pages]

In 2005, international trade in counterfeit and pirated products was approximately $200 billion. This figure did not include products domestically produced and consumed and digital products distributed via the internet. This report examines the magnitude of this trade and suggests policies and practices that governments and industries could use to effectively combat this abuse.

SPECIAL 301 REPORT: 2007.
Office of the U.S. Trade Representative. Web posted April 30, 2007.
Full Text [pdf format, 52 pages]

This report is an annual review of international property rights (IPR) protection and enforcement throughout the world. It examines IPR in 79 countries, and it designates 43 countries under a Priority Watch List, Watch List, and/or Section 306 Monitoring. This report also shows that progress in IPR protection and enforcement has been made in many countries, although China and Russia continue to have severe problems with counterfeiting and piracy enforcement. “This report reflects the Administration’s resolve to encourage and maintain effective IPR protection and enforcement worldwide.” 

AA07156
Friedmann, Alice. PEAK SOIL: WHY CELLULOSIC ETHANOL, BIOFUELS ARE UNSUSTAINABLE AND A THREAT TO AMERICA.
(Culture Change, posted April 10, 2007)
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In this extensively-referenced article, the author, a freelance journalist specializing in energy and a systems architect/engineer in California, points out that the current headlong rush into ethanol and biofuels in both the U.S.A. and around the world is unsustainable, and will take a heavy toll on the environment. All biofuels have a negative net energy return, and contribute to deforestation, water pollution, and topsoil depletion, due to continued extraction of plant material. In a special section on cellulosic ethanol, Friedemann enumerates the many daunting roadblocks to creating cellulosic fuels -- no organism or enzyme has yet been discovered that will handle widely varying plant feedstocks in impure environments, and the logistical challenges are immense. A 2000-dry-ton-per-day biorefinery would require “200 trucks per hour delivering biomass during harvest season ... and would need 90% of the no-till crop residues from the surrounding 7,000 square miles with half the farmers participating,” and would require a covered storage structure encompassing 100 acres with the bales stacked 25 feet high. She notes that the destruction of topsoil has never been considered in the biofuels boom, and laments that soil scientists have largely been left out of the debate. Friedemann concludes: “Responsible politicians need to tell Americans why their love affair with the car can’t continue. We are betting the farm on making cellulosic fuels work at a time when our energy and financial resources are diminishing. No matter how desperately we want to believe that human ingenuity will invent liquid or combustible fuels despite the laws of thermodynamics and how ecological systems actually work, the possibility of failure needs to be contemplated. There need to be plans for de-mechanization of the farm economy if liquid fuels aren’t found.”

ANTITRUST ENFORCEMENT AND INTELLECTUAL PROPERTY RIGHTS: PROMOTING INNOVATION AND COMPETITION.
U.S. Department of Justice and U.S. Federal Trade Commission. Web posted April 22, 2007.
Full Text [pdf format, 217 pages]

Intellectual property laws create and enforce “property rights for creators of new and useful products, more efficient processes, and original works of expression.” Antitrust laws “ensure that new proprietary technologies, products, and services are bought, sold, traded, and licensed in a competitive environment.” U.S. courts recognize that intellectual property laws and antitrust laws share the goals of consumer welfare and promotion of innovation. This report discusses how these principles and goals are applied in the U.S.

Archive

 

THE DIGITAL MILLENNIUM COPYRIGHT ACT: EXEMPTIONS TO THE PROHIBITION ON CIRCUMVENTION.
Kate M. Manual and Brian T. Yeh. Congressional Research Service (CRS), Library of Congress. February 21, 2007.
Full Text [pdf format, 18 pages]

The Digital Millennium Copyright Act (DMCA) passed in 1998 to protect copyright owners from infringement facilitated by digital technologies. However, the DMCA does permit temporary exemptions, such as “fair use,” which are granted every three years.

Six new exemptions have been granted and will take effect on October 27, 2009. These exemptions permit (1) the making of compilations of video clips for study courses; (2) archiving of obsolete computer programs or games; (3) bypassing obsolete hardware locks; (4) reading-aloud e-book functions; (5) connecting wireless telephone handsets to networks; and (6) testing for and correcting security flaws.

PROTECTING INTELLECTUAL PROPERTY RIGHTS IN CHINESE COURTS: AN ANALYSIS OF RECENT PATENT JUDGMENTS.
Mei Y. Gechlik. Carnegie Papers, Carnegie Endowment for International Peace. January 2007.
Full Text [pdf format, 28 pages]

China’s president has vowed to make China an “innovative country” by 2020. In order to accomplish this goal, China must improve its patent protection system. Presently Chinese companies are hesitant to encourage technological innovation due to the fact that the current legal system does not fully protect research and development. Several recommendations are offered which would not only achieve China’s 2020 goal but would benefit American parties as well.

THE WTO, INTELLECTUAL PROPERTY RIGHTS, AND THE ACCESS TO MEDICINES CONTROVERSY. Congressional Research Service, Library of Congress. Updated December 12, 2006.
Full Text [pdf format, 11 pages]

“In August 2003, the World Trade Organization (WTO) reached an agreement on the use of compulsory licenses by developing countries without manufacturing capacity to access life-sustaining medicines. This agreement was incorporated as an amendment to Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement.” Developed countries view the TRIPS agreement essential to protect the pharmaceutical industry and to help the industry recoup costs of new medicines. The U.S. has been forceful in defending pharmaceuticals but agreed to support the 2005 TRIPS amendment. The 109th Congress introduced legislation to grant compulsory licenses, but the legislation did not pass. It is expected to be reintroduced in the 110th Congress.

STRATEGY FOR TARGETING ORGANIZED PIRACY (STOP) REQUIRES CHANGES FOR LONG-TERM SUCCESS. General Accountability Office. Web posted December 8, 2006.
Full Text [pdf format, 57 pages]

The protection of intellectual property (IP) rights is crucial to preventing billions of dollars in losses from trade in counterfeit and pirated goods. The National Intellectual Property Law Enforcement Coordination Council (NIPLECC) was created by Congress in 1999 as an oversight body. The Strategy for Targeting Organized Piracy (STOP) is a comprehensive integrated national strategy to protect and enforce IP rights. STOP was initiated by the Bush Administration in 2004 and is led by the National Security Council.

The report states that these two entities have much overlap and their objectives are largely undefined. STOP is a good first step, but its potential is limited since it does not fully address the characteristics related to planning and accountability. It also lacks permanence beyond the current administration. NIPLECC, on the other hand, lacks a clear, effective strategy.

GENE PATENTS: A BRIEF OVERVIEW OF INTELLECTUAL PROPERTY ISSUES.
Wendy H. Schacht. Library of Congress, Congressional Research Service. October 3, 2006.
Full report [pdf format, 6 pages]

Under U.S. law, a product of nature (a preexisting substance that is found in the wild) may not be patented, per se. However, the courts have also determined that such a product of nature may be patentable if significant artificial changes are made. By purifying, isolating, or otherwise altering a naturally occurring product, an inventor may obtain a patent on the product in its altered form. Thus, “one cannot patent a naturally occurring gene or protein as it exists in the body, but one can patent a gene or protein that has been isolated from the body and is useful in that form as a pharmaceutical drug, screening assay or other application.”

The practice of awarding patents on genes, while upheld by the courts, has come under scrutiny and criticism by some scientists, legal scholars, and politicians. The subject of gene patenting involves various ethical, legal, and economic components. This report provides a short discussion of several issues.

AA06306
Dolfsma, Wilfred IPRs, TECHNOLOGICAL DEVELOPMENT, AND ECONOMIC DEVELOPMENT
Journal of Economic Issues, Vol. 150, No. 2, June 2006, pp. 333-342)
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Dolfsma says intellectual property rights (IPRs) have become increasingly prominent in debates and are almost unanimously deemed to favor economic development -- especially by policymakers in developed countries. It is acknowledged that some parties may benefit more from a system of IPRs than others, but some degree of improvement for all parties is the expected outcome, he writes. He analyzes the empirical and theoretical findings relevant to the question of IPRs' effect on technological development, and thus prospect for economic development. He concludes that the ideal levels of IPRs change as a country becomes more developed. For example, he notes that under today's IPRs Japan might not have had its strong electronics industry and the U.S. might not have had its strong film industry. Dolfsma asserts IPR systems need to be carefully designed to balance the needs for incentives for inventors, incentives for follow-on innovations, consumer benefits and economic development.

AA06208
Roush, Wade INSIDE THE SPYWARE SCANDAL (Technology Review, May/June 2006, pg. 49-57)
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In 2005, Sony BMG Music Entertainment company put antipiracy software on their CDs. In doing so, they spied on their own customers and gave hackers the power to access people's computers. The author tells the story of how Sony installed secret software on its customers computers that prevented listeners from making more than three copies of their music, and secretly contacted Sony via the Internet every time a PC user played a copy-protected disk. The scandal ignited a dispute in the public sphere over the ways consumers should be allowed to use copyrighted digital information, and over how far copyright holders can go to secure their intellectual property against piracy.

THIRD ANNUAL BSA AND IDC GLOBAL SOFTWARE PIRACY STUDY. Business Software Association (BSA); IDC. Web-posted May 23, 2006.
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This is the third annual global software piracy study commissioned by the Business Software Alliance (BSA) and conducted by IDC. According to the study, thirty-five percent of the packaged software installed on personal computers (PC) worldwide in 2005 was illegal, amounting to $34 billion in global losses due to software piracy. However, some improvements in a number of markets indicate education, enforcement and policy efforts are beginning to pay off in emerging economies such as China, Russia and India, and in Central/Eastern Europe and the Middle East & Africa.

Other findings of the study include the following points:

• The four countries with the largest percentage point drop in their piracy rate during the past year were China (4 points), Russia (4 points), Ukraine (6 points) and Morocco (4 points).
• The countries with the highest piracy rates were Vietnam (90 percent), Zimbabwe (90 percent), Indonesia (87 percent), China (86 percent) and Pakistan (86 percent).
• The countries with the lowest piracy rates were the United States (21 percent), New Zealand (23 percent), Austria (26 percent) and Finland (26 percent).

AA05363
Cukier, Kenneth A MARKET FOR IDEAS: A SURVEY OF PATENTS AND TECHNOLOGY (The Economist, Vol. 377, No. 8449, special insert)
View article on publisher's website

Intellectual property protection can be good for the technology industry as well as for consumers if handled carefully, says Cukier. Finding the right balance between protection and sharing will test the technology industry, policy makers and the public in years to come, he adds. Offering an historical perspective, the author says that ideas and innovation have become the world's most important resource, replacing land, energy and raw materials. Ideas, he says, are to the information age what the physical environment was to the industrial one: the raw materials of economic progress. Generating intellectual property is also less capital-intensive because it relies mainly on people rather than bricks and machinery. Cukier says that sharing intellectual property can be more profitable than keeping it to oneself because sharing can ensure the ideas are taken all the way through to the market. Further, he says, China and India have both learned to challenge Western tech firms through innovation, not just cheap labor, although the United States and Japan still lead the world in terms of numbers of annual patents granted.

2005 SPECIAL 301 REPORT. [ON INTELLECTUAL PROPERTY RIGHTS (IPR) PROTECTION]
Executive Office of the President. Office of the United States Trade Representative (USTR). April 29, 2005.
Download the document [pdf format, 65 pages]

The "Special 301 Report" is the U.S. Trade Representative's (USTR's) annual report on the adequacy and effectiveness of intellectual property rights (IPR) protection around the world. Despite progress by some countries, the 2005 report finds that weak IPR protection continues to be a serious problem and calls for tough actions to combat global piracy and counterfeiting. Among problems identified in this year's Special 301 Report are piracy of copyrighted works in Ukraine, China, Paraguay, Brazil, Russia, India, Thailand, Bulgaria, Pakistan and other markets and inadequate protection against unfair commercial use for test data submitted by drug companies to health authorities in Israel, Turkey and elsewhere.

Countries identified as Priority Foreign Countries can be subjected to a Section 301 investigation and face the possible threat of trade sanctions. These are countries that fail to enter into good faith negotiations or make significant progress in bilateral or multilateral negotiations to provide adequate and effective protection of IPR. Currently, one country (Ukraine) is designated to be in this category and remains subject to $75 million in sanctions.

This year's report lists fourteen trading partners on the Priority Watch List. These countries are: Argentina, Brazil, China, Egypt, India, Indonesia, Israel, Kuwait, Lebanon, Pakistan, the Philippines, Russia, Turkey, and Venezuela.

Thirty-six trading partners are placed on the Watch List, meriting bilateral attention to address the underlying IPR problems. These countries or economies are: Azerbaijan, Bahamas, Belarus, Belize, Bolivia, Bulgaria, Canada, Chile, Colombia, Costa Rica, Croatia, Dominican Republic, Ecuador, European Union, Guatemala, Hungary, Italy, Jamaica, Kazakhstan, Korea, Latvia, Lithuania, Malaysia, Mexico, Peru, Poland, Romania, Saudi Arabia, Slovakia, Taiwan, Tajikistan, Thailand, Turkmenistan, Uruguay, Uzbekistan, and Vietnam.

The report also presents the results of USTR's special Out-of-Cycle Review (OCR) of China's intellectual property regime, and concludes that infringement levels remain unacceptably high throughout China, in spite of Beijing's efforts to reduce them. As a result of the OCR, USTR has elevated China to the Priority Watch List because of serious concerns about China's compliance with its obligations under the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and its Joint Commission on Commerce and Trade (JCCT) commitments.

POOR PEOPLE'S KNOWLEDGE: PROMOTING INTELLECTUAL PROPERTY IN DEVELOPING COUNTRIES.
J. Michael Finger and Philip Schuler, editors. World Bank and Oxford University Press. Web-posted January 11, 2005.
Download the document [pdf format, 263 pages]

Since the agreements reached at the Uruguay Round came into effect in 1995, the World Trade Organization (WTO) Agreement on the Trade-Related Aspects of Intellectual Property Rights (TRIPS) has more or less defined the discussion of intellectual property (IP) and development. This agreement, as the editors note, is about knowledge that exists in developed countries, about developing countries' access to that knowledge, and particularly about developing countries paying for that access. This volume is about knowledge that exists or might be created in developing countries.

The contributions in this compilation cover a wide range of issues, as the titles of the chapters indicate:

• Kuyujani Originario: The Yekuana Road to the Overall Protection of Their Rights as a People [in the Amazon and Orinoco Basins regions];
• Handmade in India: Traditional Craft Skills in a Changing World;
• Enhancing Intellectual Property Exports through Fair Trade;
• The Africa Music Project;
• Preventing Counterfeit Craft Designs;
• Bio-prospecting Agreements and Benefit Sharing with Local Communities;
• Bio-piracy and Commercialization of Ethnobotanical Knowledge;
• Prevention of Misappropriation of Intangible Cultural Heritage through Intellectual Property Laws;
• Making Intellectual Property Laws Work for Traditional Knowledge.

Note: Contains copyrighted material.