Business Impact

A Dose of Common Sense

Each country’s patent and copyright laws should serve the greater good.

All over the world, fractious fights over ownership rights have raged unabated this past year, especially between rich and poor nations. This fall, we watched a classic face-off when China, finally acknowledging its enormous AIDS problem, broached the idea of making its own generic AIDS drugs. Depending on one’s point of view, China’s announcement was received as either a desperately overdue public-health decision or a frontal assault on the World Trade Organization and the U.S. pharmaceutical industry.

Many debates over intellectual property are driven by empty dogma. For reasons I’ve never quite fathomed, many supporters of intellectual-property rights hold the erroneous belief that more is always better: stronger ownership rights will always foster more innovation and a stronger economy. Conversely, plenty of people hold the equally dubious view that patent and copyright systems will always amass more power for elite companies, squash innovation, and exploit developing countries.

When one looks at catastrophes such as AIDS in China, it seems unquestionably clear that neither of these views make much sense. Strong intellectual-property protection will do nothing to put affordable medications into the hands of AIDS patients in China. Yet it is also undeniably true that we probably wouldn’t have the drugs in the first place if it weren’t for strong patent protection in the developed world.

This story is part of our December 2002/January 2003 Issue
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Neither side seems able to get beyond the heavy rhetoric. But it turns out that there is a broad swath of common ground upon which to build a fruitful compromise. This, in essence, is the finding of a blue-ribbon commission appointed by the U.K. government. Commission members visited developing countries and recruited experts and activists worldwide to prepare 17 working papers addressing and considering a broad range of case studies and viewpoints. The commission’s extraordinary report, issued this fall, is available at

The commission concluded that a global drive to expand patent protection in the pharmaceutical industry would mean higher-priced medicines for most developing countries and no significant benefit for their local industries. Perhaps even worse, the current system-based as it is on the economic incentives of vast, lucrative markets for patented drugs-would do little to stimulate research on diseases that affect primarily poor people, for example, schistosomiasis, caused by freshwater parasites.

The answer, the report says, is not for developing nations to abandon the nascent international intellectual-property system, as China essentially threatened to do in the case of AIDS drugs. Such a strategy is a prescription for increasing tensions that will likely lead to a spiral of retribution and create punitive trade barriers. Instead, the report argues, countries should individually mold patent and copyright regimes to fit their own needs. For instance, each country could spell out exceptions-such as compulsory licensing for drugs under specific circumstances-that would allow it to make and distribute cheap generic drugs but still uphold the basic patent framework.

Developing countries, the report adds, would be wise to institute explicit rules that exclude diagnostic, therapeutic, and surgical methods from patentability. Many developed nations have already done so, allowing for less expensive and wider dissemination of new and potentially life-saving techniques. The same strategies should be applied to agriculture: according to the report, the patenting of seeds, plants, or animals hurts developing countries more than it helps them.

What works for patents can work also for copyright rules. The commission recommends that rather than embracing or ignoring piracy, developing countries ought to accept rich nations’ copyright systems. Furthermore, they should adopt the broadest possible fair-use rules and explicitly allow copying documents for educational, research, and library uses. As the report notes, many countries-including South Korea in the 1960s and 1970s and the United States in the 18th and early 19th centuries-used such flexible copyright and intellectual-property protection rules to aid their industrialization.

It’s important to note that the commission, chaired by John Barton, a patent law professor at Stanford Law School, was not content to show only developing nations how to navigate the icy waters of international intellectual-property policy. The report offers developed nations a strategy for asserting intellectual-property rights in a way that can earn international respect. Developed nations should adopt a nuanced strategy for intellectual-property protection that does not ignore the pressing public-health and development needs of the Third World. In doing so, they will lessen the risk that developing nations will ignore the emerging international intellectual-property system.

What is most refreshing about this report is its implicit view that intellectual-property rights must serve the greater public good. The paramount goals, the commission argues, should be to reduce poverty and help poor nations gain access to needed technologies. Both sides of the intellectual-property debate should heed the report’s recommendations. That’s a lot to ask: representatives from the U.S. pharmaceutical industry have already bristled at its suggestion of compulsory licensing. But in addition to the stature of the commission members, what gives this U.K. effort traction is the growing recognition that compromise might be the only viable game in town.

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