Wednesday, November 16, 2011

US takes issue with China's Intellectual Property forgot its lax approach to Japan and Taiwan allies in the 70s - the Truth about IP

Obama gets impatient with China over Intellectual Property rights enforcement, another key issue of contention after the currency manipulation charges. 

Some facts to note and reflect on before jumping to conclusions : 

- Developed countries own most of the IP and therefore have most to gain by insisting on strict regime implementation globally so its MNCs can profiteer.  

- Developing countries are naturally and unfairly disadvantaged by "RULES" set by economically advanced countries. This is translated into higher production costs and a form of disguised protectionism imposed on the poor before they are able to catch up.

- Consumers benefit from lower cost alternatives. Think universal education for poorer folks in developing countries and the chronically ill. They don't mind paying less for no frills and do not care about branded goods and medicines. 

- Paradox : the stricter the rules, the room for infringement increases discourage compliance and drive more potential violators underground instead of paying for costly rights usage and penalties.

-  Excessive IP protection stifles creativity even in the US and western countries.  Why must the originator always be the "winner that takes all"?  A way for monopolies to get around anti-trust laws?  

- US has restrictions on exporting high technology on strategic grounds. Ironically, US trade balance will be fixed in no time if bans are lifted.  

- TRIPS / WTO Doha Round actually endorses legitimate rights to fair competition by trade partners. It would help if they cooperate than fight head-on. US does not have a good track record of observing WTO regulations but likes to cherry pick what is advantageous and self serving. 

Capacity building and judicial enforcement (not just institutions) takes time for countries that have been set back by colonialism and internal strife. 

- The previous wave of newly industrialised Asian economies, notably US allies Japan and Taiwan, were allowed imitation during its initial economic development stage. Does the US have short memory or inclined on applying double standards? 

- China is a large nation that is hard to detect creative wizards and businessmen bypassing monitors, regulators and police.  It is also not a priority for developing nations preoccupied with economic growth and income disparity social issues. 

-  Weaker and smaller US trade partners have submit to TRIPS-plus schemes imposed by the US to gain market access through the backdoor.  Talk about economic bullying. 

- Are US pharmaceutical companies paying patent and knowledge rights for TCM (traditional Chinese medicine) and piracy of South American and Indian herbal medicine and exotic plants? 

Rest assured, China pays important attention to IP as it is inevitable for  modern economies.  In the coming years, China, India and Brazil will institute stricter IP laws to protect their home inventions, some notable works of creativity and R&D are in the manufacturing pipeline. 

It pays to be patient. But who will have the last laugh?

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