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Magazine
New values in intellectual properties
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Is there a connection between cultural factors, economic development and intellectual property rights? ... wonders S. MOHAN.
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Pirated CDs and equipment ... related to intellectual property rights.
"Modern science is standing in tiptoe, ready to open the doors of a golden age"
Sir Winston Churchill
THE "golden age" has opened new values in intellectual property. Intellectual property? Five years ago, the phrase wasn't even in the vocabulary of many companies, let alone a part of their business strategy. The knowledge economy has given rise to a new ecology of competition in which intellectual assets, rather than physical assets, are the principal wellsprings of shareholder wealth and competitive advantage.
Therein lies a great corporate challenge: figuring out how to unlock the hidden power of patents. In the context of present-day development it is essential to know how companies can manage and deploy their patents not just as legal instruments but also as powerful financial assets and competitive weapons. This can significantly enhance a company's success in three broad ways: by establishing a proprietary market advantage, by improving financial performance, and by enhancing overall competitiveness.
Intellectual property rights are a recurring focus of international negotiation. On the one hand, nations argue that such rights are essential for promoting innovation and economic growth. Many developing nations, on the other, argue that intellectual property rights inhibit economic development by restricting use of existing knowledge.
Developed countries provide greater protection for intellectual property than do developing countries. High-income countries tend to have lower piracy rates. This is true both in a simple comparison of piracy rates with per capita income and, to a lesser extent, in regressions that control for other factors. This is consistent with the hypothesis that intellectual property rights promote economic development. However, it may also reflect reverse casualty (e.g., if developing nations offer less protection so that they can use the intellectual property of developed nations) or common causation by other factors.
Another hypothesis is that differences in intellectual property rights reflect broader differences in social and economic institutions, in particular those that enforce contracts and protect traditional physical property. Countries with strong institutions protecting contracts and traditional property will also have strong institutions protecting intellectual property.
Piracy rates correlate with certain economic, institutional, and cultural factors.
Current debates about intellectual property reveal that developed nations generally prefer stronger intellectual property rights than do developing nations.
Commentators have argued that Western nations, with their focus on individual rights, are more receptive to intellectual property rights than many non-Western nations, with their focus on collective rights. "The problem of intellectual property rights is very individual. Ours is a collective culture where ideas belong to everyone. Unfortunately, some people here don't realise that when they copy something they deprive someone of their rightful earnings." (The Bangkok Post, 1995)
Hofstede (1983, 336) defines individualism as "a preference for a loosely knit social framework... in which individuals are supposed to take care of themselves and their immediate families only." Collectivism, in contract, is "a preference for a tightly knit social framework in which individuals can expect their relatives, clan, or other in-group to look after them, in exchange for unquestioning loyalty." Individualism both encourages and requires social institutions that protect individual rights. Chief among these are conceptions of individual ownership and equality before the law. Collectivism, in contrast, encourages institutions that favour close relatives, friends, and trusted associates (the "in group") over outsiders. Such institutions emphasize resource sharing rather than individual ownership; they also attribute different rights to insiders and outsiders.
These findings, therefore, have several implications. First, they support the argument that intellectual property is a cultural phenomenon as well as an economic one. Countries with a collective culture-one that emphasises sharing over individual ownership rights-have significantly higher piracy rates than do countries with an individualist culture. Second, the results indicate the important link between economic institutions and intellectual property. Countries that protect contacts and traditional property also tend to be ones that protect intellectual property to software. Third, they indicate that the positive correlation between economic development and protection of intellectual property (i.e., low piracy rates) need not be casual. Although the exact relation between economic development and intellectual property protection is unclear, it appears that much of the positive correlation can be explained by cultural and institutional factors that are correlated with economic development. Taken together, these results suggest that efforts to reform intellectual property rights around the world must be sensitive to differences in cultural traditions and economic institutions, as well as differences in economic development.
The writer is a former judge of the Supreme Court.
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