Following up on an earlier post about the potential for fast-growing developing countries to adopt less restrictive, more growth-oriented IP regulations, I want to look at two concepts that are important for understanding international IP debates.
The first is “counter-harmonization,” which is used several times in the article I referred to about the BRIC countries by Jerome Reichman. The movement to harmonize international copyright laws resulted in the Berne Convention, which the US finally joined in 1988, and the TRIPs agreement (for “Trade Related Aspects of Intellectual Property”) adopted by the World Trade Organization in 1994. Those treaties have a lot to say about harmonizing levels of protection for copyrighted materials, but very little in regard to limitations and exceptions. In other words, parties to the agreements are obligated to provide protection without formalities and to extend protection for at least the life of an author plus 50 years. No similar obligation exists to provide any particular exceptions to copyright protection, such as educational viewings of films, free library lending, or reproduction of small excerpts for the purpose of research and scholarship.
In fact, the international treatises have generally seemed rather hostile to limitations and exceptions, even though they are as much at the core of the reason for copyright as is protection itself, at least insofar as copyright is intended to encourage creativity and innovation. Creativity depends on some rights of reuse as much as it does on the assurance of a market for new works. But in Berne and TRIPs, all exceptions in the national laws of the signers are made subject to a three-step test that has been interpreted, wrongly in my opinion, to be so narrow that many existing exceptions in national laws would violate its terms.
The call for counter-harmonization comes out of the WIPO development agenda, which has recognized that harmonizing only high levels of protection without also building in safeguards for reuse and innovation is contrary to the best interests of developing countries. Those countries are being encourage, by Prof. Reichman and others, to exploit the flexibility still available under Berne and TRIPS to adopt limitations and exceptions that best suit the needs of their own growing economies.
The other major concept that is currently getting some attention is “cross-retaliation.” The TRIPs agreement, for the first time in international law, gives countries the right to retaliate against another signer, if and when their IP rights are not protected, by imposing tariffs and other restrictions on other types of goods and trade. So if country A gets a ruling that its IP rights are not being adequately protected in country B, A can impose tariffs on manufactured goods or crops imported from B. This was new in the TRIPs agreement and has created some interesting problems. Pedro Paranagua, who is a law professor from Brazil and a doctoral candidate at Duke University’s Law School, explains in this blog post how retaliation can be used both to enforce IP protections and to penalize an IP producer who competes unfairly in other markets.
As Paranagua explains, the US and other developed countries want retaliation under TRIPs to be a one-way affair — available only to a country whose IP rights were infringed so that they could penalize the infringer in other markets. The WTO, however, ultimately allowed cross-retaliation to be two-way, so that a country whose markets in other goods are unfairly impeded — cotton is the market at issue in Paranagua’s post — could retaliate against IP from the offending country.
Cross-retaliation is another example of unintended consequences for the United States, and another indication that developing countries, particular those whose economies are growing rapidly, can use the international IP treaties to their own advantage. As the global economy becomes more and more competitive, it behooves each nation, including ours, to re-examine its stance on IP regulation with an eye to fostering its overall best interests, rather than the needs of only one segment of the world-wide market.