[ipr-ict] what is the problem with ipr?

[Philipp Schmidt <philipp@bridges.org>]

Dear colleagues:

I am forwarding a short summary of issues areound IPR in Africa. The  
text was prepared by Vera Franz (who is on holiday and not able to  
present it herself during this disussion) and she generously made it  
available under a Creative Commons Attribution 2.5 license. It raises  
many important points.

I can provide a pdf version for anyone interested in printing it out.

Apologies for posting this in English only - we do not have a French  
version of the document (the license does allow translation - any  
volunteers?).

Best, Philipp

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What is the current problem with IPR?

Vera Franz
licensed under a Creative Commons Attribution 2.5 License
21 July 2005


Intellectual Property Rights (IPRs) are an important open society  
issue because they govern the ownership and control of knowledge.  
They are powerful means to deny, delay or distort access to knowledge  
and knowledge-based goods – or, alternatively, to enable affordable  
access and ensure continued creativity and innovation. They affect  
everything from the availability and price of textbooks, scientific  
journals, drugs and software, to affordable and free communications  
via the Internet, to patterns of economic growth. A healthy knowledge  
ecology – one based on a balance between property rights and the  
commons – is not only key to a vibrant educational system and culture  
and the advancement of sciences, but ultimately shapes the economic,  
social and political development of every open society.

IPRs represent a societal bargain. Rewarding and providing incentive  
for invention and creative work, IPRs are a state-backed monopoly  
which ensures time-limited exclusivity to the inventor or creator to  
recoup returns from their work. At the same time, IPRs provide for  
access rights so that the public may enjoy the fruits of invention  
and creativity and may eventually build upon and improve them. But  
under the global IP regime that has emerged in recent decades,  
particularly since the WTO TRIPS agreement of 1994, this original  
purpose has been distorted as the balance between private  
intellectual property rights and public access rights has been  
overturned. Further, the potential of open collaborative modes of  
knowledge production is ignored by  the current IP system. The  
resulting threats for open societies are significant.

Books provide a tangible example. In countries such as Senegal,  
library holdings are as low as 1 book per 7 inhabitants. In Burkina  
Faso, the rate is as low as 1 book per 70 inhabitants. The  
correlation between library holdings and illiteracy rates is  
striking.  In South Africa, a copy of Nelson Mandela's Long Walk to  
Freedom costs far more than in the UK or US, making it – and most  
other books – unaffordable to the majority.  Although poverty is one  
reason for this situation, the new IP regime does nothing to  
alleviate it. Rather, it makes it worse, deepening illiteracy and in  
turn deepening poverty. In a larger frame, the new IP regime is not  
only responsible for the unavailability of books, but also restricts  
access to all knowledge-based goods, such as medicines, software and  
patented technologies.

Here is a brief catalogue of some emerging consequences of this new  
regime:

• erosion of the public domain – IP protection has expanded  
exponentially in breadth, scope and term over the last century,  
leading to a dramatic erosion of the public domain. In the past,  
copyright protected expressions of ideas, not the ideas themselves,  
while patents covered inventions; IPR restrictions are now being  
extended to apply to ideas themselves, and even to facts. We grant  
rights over new subject matter such as gene sequences, business  
methods and software patents. And we have greatly lengthened terms of  
protection. For example, the copyright term has increased from the  
life of the author plus 28 years to the life of the author plus 50  
years (international treaties) or 70 years (US).  If we returned to  
the copyright regime of, say, 80 years ago, we would have a public  
domain twice the size of what we have now, in terms of the number of  
works available without restriction.  In some cases, privatizing some  
goods in the public domain can in fact provide economic incentives  
for better exploitation of those goods.  But the public domain  
provides the raw materials for future creativity and innovation, and  
in most cases, privatizing it leads to the negative effects listed  
below, such as inhibited innovation, higher prices, and less access  
across the board.

• erosion of access rights – Long-established access rights (e.g.,  
copyright exceptions and limitations for the general public, or  
patent exemptions for poor countries) are under serious threat.  
Technological protection measures (TPMs) illustrate this: they  
enforce a ‘gapless’ property regime (‘gapless’ meaning a regime  
without exceptions and limitations).  And governments no longer shy  
away from invoking criminal law for breach of TPMs for any use, even  
if it is “fair use” permitted by law. This means, for example, that a  
teacher making legitimate copies of a TPM-protected digital document  
for classroom use would be committing a criminal offense, as the  
copying of the document would entail the breach of a TPM.

• owners take precedence over creators – Mechanisms originally  
intended to compensate and support creative individuals have become  
unfair to creators themselves.  Standard contracts between authors  
and publishers, for example, provide for the transfer of almost all  
rights from the author to the publisher. This means that even if a  
publisher decides not to continue printing the work, the author often  
has no means to ensure the continued availability of his or her work.  
And musicians often earn no more than a very small percentage of the  
profit from their own recordings, the lion's share going to the media  
company.

• investment takes precedence over innovation – Rather than  
stimulating innovation and creativity, the primary aim of the new IPR  
regime is to protect large-scale investment, often to the detriment  
of innovators.  As the building blocks of knowledge are locked up and  
concentrated in private hands, this regime is blocking innovation and  
creativity at a fundamental level. The latest illustration of this  
trend is the Broadcasting Treaty currently under negotiation at WIPO.  
This Treaty would, on top of conventional copyright, introduce a new  
layer of rights protecting the investment (the signal) of  
broadcasters, cable-casters and webcasters. This would mean that  
public domain material disseminated over these “casters” networks  
would be locked up by the casting right. The trend is further evident  
in the area of patents, where over-extended patent protection favors  
those who already have very large patent portfolios.  These large  
patent holders can and do use their portfolios to block disruptive  
technologies and innovations.

• inhibition of new models – Beside inhibiting innovation at a  
fundamental level, the new IPR regime also blocks innovation at the  
level of economic and social organization, by extending the life of  
outdated business models and inhibiting the development of less  
restrictive alternatives, such as collaborative peer production and  
distribution.  The music industry provides the best-known example,  
but parallels can be seen in science, software development, and  
publishing.

• higher prices for essential goods – Concentrated ownership and  
control of knowledge lead to uncompetitive markets, which drive up  
prices for essential knowledge-based goods such as medicines,  
textbooks, medical information or tools, or basic software.  This is  
an inconvenience for middle-class consumers, but devastating to the  
poor.

• political and professional corruption – Concentrated ownership  
based on IPR monopolies creates powerful interests which invest  
heavily in lobbying and marketing to maintain their market share.   
The pharmaceuticals industry provides the most egregious example: it  
spends far more on lobbying and marketing than on R&D for new drugs.   
Large-scale lobbying of governments and international agencies leads  
both to corruption of policymaking and to ever more restrictive IP  
regimes. Massive marketing to physicians, some have argued, has led  
to growing corruption of the medical profession.  Similar effects can  
be observed in the software and scientific publishing industries  
(many examples could be cited, such as Microsoft's recent  
intervention at WIPO to block discussion of peer production, or the  
science publishing lobby's attempts to kill Open Access at the NIH).

• 'one-size-fits-all' globalization makes the rich richer and the  
poor poorer – This new IP regime is being imposed by rich countries  
on the rest of the world. The movement towards “harmonization” is not  
new – it has been going on for over a century. However, the TRIPS  
Agreement first made minimum standards of IP protection mandatory for  
WTO members. Developing countries had no fair chance to participate  
in the formulation of this new global regime: when TRIPS was being  
negotiated, no African country was a player in any of the key  
negotiating groups that shaped its final contents.  In the past,  
copyright and patent rules were differentiated according to local  
cultural traditions and economic conditions; under the new regime,  
poorer countries are forced to accept a one-size-fits-all paradigm  
that goes against their interests and needs. As the UK Government’s  
Commission on IPR concluded recently, the main effect of the new IP  
regime is to benefit those who have knowledge and inventive power,  
and to increase the costs of access to those without. Thus the costs  
and benefits of the system are unfairly distributed and in fact  
increase the gap between rich and poor.