To protect physical property, the process is relatively straightforward: guard what you own, and don’t let another person walk away with it. Intellectual property (IP), however, is an entirely different matter; because IP is the creation of the mind that is manifested in inventions or artistic works, it is something that can be stolen without a physical heist. As such, it is much easier to steal an intellectual idea or work and profit from the illicit redistribution.
Developed countries with established markets and effective legal institutions are usually able to defend the intellectual property rights (IPR) of their citizens through a combination of patents, trademarks, and copyrights. Should an individual transgress on another’s work, they may be held liable for the costs in a judicial setting, providing a deterrent against the behavior. But the situation becomes much more complicated when transgressing party is outside the jurisdiction of the country in which the IP is protected. Treaties and bilateral cooperation do exist, but their enforcement can be particularly difficult in developing countries that lack the resources or willpower to prevent IP theft on an international scale.
Because of the gaps in enforcement, the vast majority of intellectual property thefts go unprosecuted. The International Chamber of Commerce has estimated that IP theft is responsible for a $500-600 billion loss each year, a 5-7 percent of world trade volumes. The biggest losers are industrialized nations with large entertainment industries, but developing countries are hurt as well. Developed countries lose access to foreign markets and potential buyers, while emerging economies are set back in their attempts to establish their own trademarks, brands, and innovations.
Since the beginning of IPR conceptualization, a reoccurring dichotomy dominates the dialogue. On one hand a strong IPR regime is desirable in the sense that it allows the ownership of original ideas, encouraging greater innovation and competition. A country that fails to prevent IPR theft not only sustains losses to the affected industry, but also forgone revenue and increased unemployment. On the other hand, one study shows that it might be possible for IPR enforcement to slow the diffusion of knowledge to an undesirable pace.
Regretfully, there is no single litmus test to determine a legitimate case of IPR theft. IPR has evolved into a complex branch of law and public policy, with violations that are often determined on a case-by-case basis.
Some violations are more obvious than others. Take for example the consumption of software in China: in 2010, 78 percent of the software sold in the country was pirated, inflicting $7.8 billion in damages. The Chinese government has repeatedly promised to crackdown on the problem. But to date, their words have been almost entirely empty rhetoric; in fact, the government itself contributes to the problem. Large numbers of the computers in state-owned offices across the country are run by illegal software, evidence of Beijing’s lax commitment to IPR protection.
Many of the other IPR disputes are much more complicated. Controversies involving traditional and indigenous knowledge (TK) are a case in point. For hundreds, perhaps thousands of years, local communities of indigenous people have passed on traditions to subsequent generations in fields such as medicine, agriculture, conservation, and religious beliefs. Because many of the traditions are exchanged orally or written in obscure languages, it can be challenging to credit an idea to a certain person or people group. Consequentially, many in the West believe that TK is in the public domain, available to anyone for the taking. Some have tried to incorporate TK into IPR law for the purposes of research and enterprise, in effect excluding the originators from their own technology without compensation.
Caught between the crossfire of TK and IPR has been the practice of Yoga. Derived from the ancient art of Hindu meditation thousands of years ago, yoga become increasingly popular in Western countries as a form of exercise; so much so, the U.S. Patent Office has issued 150 yoga-related copyrights and 2,315 trademarks to protect styles, poses, and sequences. The reception has not been favorable in India. Outraged by the Americans giving away what was not originally theirs, the Indian government has created an extensive database cataloguing thousands of yoga postures to avoid what they consider piracy.
Ideas are one the key engines that drive economic prosperity. Accordingly, governments with a serious commitment to market growth should ensure that IPR are protected in a manner that encourages domestic ownership of ideas and incentivizes innovation. At the same time, however, IPR systems should be structured to respect the property rights of others as well.
Blogal Prosperity by the Center for Global Prosperity 