WTO: Buying and selling ideas and knowledge Guyana and the Wider World
By Dr Clive Thomas
Stabroek News
July 14, 2002

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This week we resume our extended consideration of the WTO and turn to a discussion of intellectual property rights (IPR). IPR cuts across several areas in the WTO Agreement including agriculture, food security, and services, which we have already considered separately in this series.

What is intellectual property?

The first matter we need to clarify is the meaning and interpretation that is given to intellectual property in the economics literature generally, and more specifically in the WTO Agreement. In its broadest meaning intellectual property relates to the ownership of ideas and knowledge. That is, persons, firms, or organisations which generate new ideas and knowledge and the rights they have to own these because they are their creators. If we thought about it carefully, much of what we trade today, whether they are goods or services, derive their value from the ideas and knowledge that are embedded in them. The process however, of incorporating ideas and knowledge into goods and services has become exceedingly complex. It includes at the very minimum, several different stages of research, invention, innovation, design, and testing.

On reflection we would observe therefore, that whether it is a cell phone, motor-car, piece of clothing/wearing apparel, tool or equipment, medicine, film, book, or computer, which we import into Guyana, all embody ideas and knowledge that give them their real value to us. In other words, we do not buy these products because of the materials that are used to make them, but the ideas and knowledge embodied in these materials.

If we went back a few decades, it would have been the case that many of the products that we used to import did not have nearly as much ideas and knowledge embedded in them as compared to the same products today. One consequence of globalisation is that when we buy new products today, we expect them to have incorporated within them improved ideas and knowledge, and that is what encourages us to purchase them.

IPR rights

We could therefore argue that, if this is the case, then the creators of these ideas and knowledge should have rights to them. The question is how can these rights be made meaningful? Basically, these rights are expressed if the creators of new ideas and knowledge are in a position to prevent others form using them. Based on this exclusive right, the owners of ideas and knowledge can then sell or use their ideas as they wish. Such rights are termed intellectual property rights.

These rights can take many forms. Thus an inventor may take out a patent for his/her work. An example is somebody like Captain Fedna Stoll in Guyana, who invented a new process to produce dehydrated foods from a wide variety of fresh fruits, vegetables, and plants for which he has taken out a patent in the USA to protect his invention. In other cases the product may be given a brand name, or a logo may be designed to represent the product. Or again, an author may produce a book and have it copyrighted. In all these cases and many more, the creator’s rights are protected by law. Persons wishing to use the idea and knowledge must do so through a commercial arrangement with the inventor of the idea or knowledge.

The motor-force of the market system and capitalism is competition, but intellectual property effectively creates a monopoly for the person or enterprise that creates the new idea or knowledge. To reconcile this contradiction, the monopoly concession which is granted is usually restricted, sometimes in terms of time. Thus in the United States a patent can be obtained for an original invention, but this gives the inventor the exclusive right to use it for 17 years.

TRIPS: rules and dispute settlement

Because of the innate diversity and all-embracing character of intellectual property, the extent of its protection, and more importantly, the enforcement of that protection, varies from country to country around the world. At one point of time, the then socialist countries refused to recognise the legality of intellectual property. Today this is no longer the case. One reason for this may well be the rapidly increasing role of intellectual property in traded goods and services, in this age of globalisation.

It is concerns like these that propelled participants in the Uruguay Round (1986-94), which preceded the formation of the WTO to pay systematic attention to the question of regulating trade in intellectual property rights. The rubric under which this is now done is the WTO’s Agreement on the Trade-Related Aspects of Intellectual Property Rights (TRIPS).

The primary function of the TRIPS is to create uniformity in the way in which intellectual property rights are protected around the world. Similar to other aspects of the WTO, this is achieved by bringing all trade related aspects of IPR under common international rules. Further, if it is felt by one of the parties that these rules are being breached, then as in other areas of the WTO Agreement, the dispute can be referred to the dispute settlement mechanism.

This has an enforcement capacity to ensure that countries comply with the rules. In this sense the TRIPS fully conforms to the WTO’s basic approach of creating a new rules-based trade order with a dispute settlement mechanism and enforcement capacity to deal with those who breach the rules.

Seven categories

The TRIPS covers seven categories of intellectual property. The first is copyright and related rights, which have already been mentioned. The second was also referred to, that is, trade marks including services marks. The third is geographical indication. Thus Scotch whisky or indeed plain whisky is a product of Scotland. Some might ask: what then of ‘Demerara sugar’ or ‘Demerara rum’? The answer is that no legal licence to protect these indications was pursued and obtained. The absurd result is that ‘Demerara sugar’ is now produced in Mauritius and Florida, which sell nicely packaged yellow crystals around the world under the geographical indication: ‘Demerara Sugar.’

The fourth category is industrial design with which we are familiar. The fifth is patents, which we have already referred to above. The sixth category covers the layout-design or as it is sometimes termed ‘topographies’ of integrated circuits. And, the final category is undisclosed information, including trade secrets. Two examples of these that we should be familiar with are ‘coca cola’ and ‘Angostura bitters’. In both cases the ingredients and the formula used in their preparation are kept secret so as to protect these products from duplication by competing firms.