IP Rights and Economic Development

March 16, 2007 - by Stan

OK, yeah, this general topic is not news. In fact, this is a very old topic amongst economists and policy analysts. The main question is the appropriate level of IP protection/enforcement in developing countries, and should they be treated differently from other countries.

Interesting post on IP Dragon about a recent interview with the deputy director of SIPO. Note that the State Intellectual Property Office (SIPO) is not, contrary to appearances, the national IP office. It is really the Patent Office. Trademarks and copyrights are dealt with by other agencies, not by SIPO.

Regardless, the interviewee, Zhang Qin, makes a distinction between trademarks and copyrights, on the one hand, and patents on the other. This distinction is based on the old argument that technology is crucial to development, and therefore a rigorous patent enforcement regime is harmful to economic development. Trademarks and copyrights should therefore be strongly enforced, but not necessarily patents. Funny how this gets the SIPO off the hook with regard to criticism of IP enforcement in China, but SAIC (trademarks) and the copyright office will take the blame. Nice politics, and not even a little subtle.

Anyway, there is no doubt that technology helps development. The trick is to figure out when to stop the lax patent regime and switch over to a more robust system once your economy is sufficiently developed. Some would say that the right time is when you start innovating. I think it needs to be done earlier, to spur that innovation domestically, and many policy wonks in Beijing agree with me on this. The laws have been changed to reflect this, most notably the Technology Transfer Law several years ago. I think China is well into that switchover period and has done so by design.

So really we are back to an enforcement issue, not a Patent Law reform issue (for the most part). Hard to say whether the old economic development arguments are just being used in a self-serving manner, or if there is a sincere feeling in certain policy circles here that this is a legitimate issue.

I am a cynic, and an IP lawyer, so my feelings on this are rather obvious.



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