[WSIS CS-Plenary] FW: [Reader-list] How to stop worrying and learn to live with piracy

[Gurstein, Michael]

Perhaps a contribution to the development of the CS perspective on the
IPR discussion.

MG

-----Original Message-----
From: reader-list-bounces at sarai.net
[mailto:reader-list-bounces at sarai.net] On Behalf Of Jeebesh Bagchi
Sent: January 31, 2005 3:01 PM
To: reader-list at sarai.net
Subject: [Reader-list] How to stop worrying and learn to live with
piracy 


http://www.businessworldindia.com/feb0705/index.asp

How to stop worrying and learn to live with piracy 
 
A US professor has rocked the current patent debate by saying that
piracy is not only inevitable, it may even be beneficial. 

Doron S. Ben-Atar is hardly your usual suspect when it comes to
subversion. He is a genial giant from the world of academia, a professor
of history at Fordham University in New York who has written or
co-authored several books, a researcher who has won prestigious
fellowships. For all that, he has managed to undermine the conventional
arguments in today's hotly debated question of who owns intellectual
property (IP) - simply by looking at the issue through the prism of the
past.

Ben-Atar's contention is that all developed nations, especially the US,
did not respect IP rights and indulged in rampant piracy - and he has
detailed researches to prove this - during a certain period in their
history of industrialisation. Tracing the roots of patent and copyright
laws in early America, he says that during the country's industrial
revolution, its very prosperity was founded on copyright infringement,
industrial espionage and outright theft of IP.

What could be construed as subversion is his belief that developing
countries should be allowed to do the same. He believes this for two
reasons. One: no amount of regulation and policing will stamp out
piracy. Indeed, a new study validates this; it shows that losses due to
software piracy are rampant across the world, but are highest in the US
itself (see 'Topping The Piracy Charts'). Two: it would be unfair to
force developing nations to devote their scarce resources to protect the
interests of the rich and powerful. He maintains that as long as the
income disparity between rich and poor persists "the temptation to
pirate would triumph over all principled devotions to an abstract notion
of IP."
 
And here is a radical prescription: leaders of developing nations should
pay lip service to IP agreements "and occasionally raid a warehouse full
of pirated CDs or prosecute a high-profile pirate". That's because US
history teaches us that symbolic acts and talk of principles,
accompanied by lax enforcement, are a winning combination, he says (see
'Lessons For India').

This unusual perspective on intellectual piracy comes in a riveting
study that Ben-Atar has brought out on the historical intellectual
piracy in the US and the efforts made by Britain to stem this outflow to
its former colony. Published some months ago, Trade Secrets:
Intellectual Piracy And The Origins of American Industrial Power (Yale
University Press) has received widespread interest. Much of the buzz
around the professor's thesis has been occasioned by the growing
competition to a range of American industries from the giant
manufacturing hub of China, and to a lesser degree, India and other
emerging economies.

Ben-Atar takes pains to highlight the many ironies surrounding the IP
issue in America. At the same time that the young republic was indulging
in full-scale piracy, it had also enacted the most exacting patent laws
which required inventions to be original and novel across the world, and
not just in America - unlike Europe which granted patents to introducers
of technology in use elsewhere. That set new standards for protecting
IP. But, shows Ben-Atar, it was a Janus-faced approach. Nearly every
branch of manufacture in the US was founded upon imported skill and
machinery which was smuggled in because there were strict prohibitions
in Europe, especially in Britain, against the emigration of skilled
artisans and the exportation of machinery.

The IP laws were actually a smokescreen for a very different reality,
says the Israel-born academic who went to study in the US 25 years ago.
The statutory requirement of international originality and novelty did
not hinder widespread and officially sanctioned technology piracy. In
fact, most of the patent applications were for devices already in use,
since getting a patent involved little more than successful completion
of paperwork.

But what use is the past in the current battle by the US and allies to
impose the WTO-mandated trade related aspects of intellectual property
rights (TRIPS) agreement on developing countries? Does history have any
les-sons for today's IP warriors in an intensely contested arena?
Ben-Atar says it is important to remind Americans of their past so that
they better understand what is happening in other parts of the world.
"Before Americans rush to condemn those who pirate our knowhow, they
must not forget how the US became the richest and most powerful nation
on earth."

Towards the closing decades of the 18th century, the British colonies of
North America were mostly underdeveloped agricultural settlements. The
foundations of the American empire were laid during the next 75 years as
the US was transformed from an underdeveloped decentralised entity on
the periphery of the Atlantic economy into the hub of industry, wealth,
and power. "Piracy," says Ben-Atar flatly, "played a crucial role in
this process."
 
So, if the developing world is taking a similar route, the US should not
be complaining. It is no surprise, says he, that while all WTO members
promise to respect international IP rights, in practice, developing
nations do little to enforce those laws. His basic point is that all
efforts to protect technology are destined to fail. "If past patterns
are going to be repeated, within a short time, local entrepreneurs in
the developing world will acquire, by whatever means, America's trade
secrets and produce the desired goods and services on their own."

The latest collision between the US and China on IP violations
substantiate his position. In recent weeks, the confrontation between
the two trading par-tners has accelerated over US charges that China's
state-owned car manufacturer, Chery Automobile Company, had stolen the
design from General Motors to make its QQ model. In December last year,
GM filed a lawsuit against Chery Automobile for alleged piracy of the
design of its Chevrolet Spark, developed by its South Korean affiliate
Daewoo. In recent days, US officials have been stepping up the heat on
the Chinese government to crack down on IP theft.

According to the US commerce department, Chinese piracy is bleeding
America of nearly $24 billion annually.

In a sharp attack two weeks ago, US commerce secretary Donald L. Evans
told the Chinese leaders that they had to 'forcefully confront' the
widespread violations of IP rights in China to avoid strains on
bilateral relations. While Chery has denied the piracy charge and said
that it "is one of the key state-backed automakers that depends on
itself for development", the Chinese government's response has been
laconic. It has advised GM to resolve the issue through mediation or
legal means.

That is likely to prove costly for GM, since QQ's sales are already way
ahead of the Spark, which was launched after the Chinese mini-car hit
the roads. And in a most ironic twist, the six-year-old Chery - it is
China's eighth largest automaker with sales of around 90,000 vehicles -
has just signed a deal with a major American car firm to export cars to
the US. Some analysts believe it is Chery's deal with Visionary Vehicles
(in which it has also committed to investing $200 million in the Chinese
company) that has prompted the high-decibel Washington response.

Lessons for India

Doron Ben-atar is categorical about one thing: he is not advocating
piracy. Some excerpts from an interview with BW.

Are you saying that developing countries should flout international IP
regulations and take to piracy?

Ben-atar: I am not drawing these historical parallels to condone piracy,
but to point out the wrong-headedness of the West's often self-righteous
position on IP.

Trips imposes patent obligations on developing countries. There are
penalties for flouting the rules.

Ben-atar: It would be wrong of me to claim that I really under-stand the
context and complexities of the current system. What the US benefited
from was the absence of international agencies with coercive powers like
GATT and TRIPS. The recent development in India is bad for the entire
world because the new Ordinance (the amendment of the Patents Act) has
alarming consequences. Indian generic drugs had a monumental influence
in addressing the health concerns of the underdeveloped world.

What can developing countries like India do?

Ben-atar: The American experience shows how you can negotiate the
terrain of IP by saying you want to adhere to certain standards, but
claiming that you are producing something different. The second lesson
is of greater importance. The key to the American economic miracle was
the immig-ration of millions who brought their skills and ingenuity.
Developing nations must develop their own IP, unless they are content
with the crumbs.

Is it enough to copy the IP of the developed countries? 

Ben-atar: Developing nations, however, must realise that they will not
be able to find prosperity through piracy alone. The only way you can
stop the brain drain is by creating an equal environment in India, one
that will compensate the bright people for staying behind.
 
There are others who believe that the Ben-Atar is only too right about
the impossibility of checking IP theft. The US justice department for
one. It said in a recent report that the country was losing the battle
against piracy. This is especially true of software. According to the
first annual study on software piracy conducted in 2003 by Business
Software Alliance (BSA) and IDC (the IT industry's market research and
forecasting firm), the industry is losing about $30 billion annually.
The rate of losses, however, are the highest in Eastern Europe (71 per
cent) compared with 53 per cent for the Asia-Pacific region.

All of which, it would appear, underlines the futility of enacting
legislation to prevent the diffusion of knowledge. Ultimately, says
Ben-Atar, devoting resources to enforcing western standards of
intellectual property in the developing world is not only hypocritical
and sometimes cruel, but above all, a futile act. "A country's most
valuable asset is not yesterday's invention, but tomorrow's innovation.
 


_________________________________________
reader-list: an open discussion list on media and the city. Critiques &
Collaborations To subscribe: send an email to
reader-list-request at sarai.net with subscribe in the subject header. List
archive: <https://mail.sarai.net/pipermail/reader-list/>