[Graeme]

How intellectual property could save the economy

Today is World Intellectual Property Day – which like many themed days, will probably pass most people by. One that few will consider has any relevance to them.

But IP is one of the most profoundly important aspects of our history and key for the future of our economy. The UK design industry has been ranked fourth in the world and our army of 350,000 designers needs to be recognised, not only in the traditional areas of design, but as leaders in the socially-responsible and environmentally-sustainable innovation that will become the cornerstone of the emerging economy.

Like the industrial revolution, post-war consumerism and the technology revolution, we are in a state of massive change. Yet unlike those periods, the convergence of economic, social and environmental pressures has created an even more perfect storm for innovation. There are seven billion people on our resource-constrained planet and at the current rates of development that will be nine billion by 2050, with some suggesting this figure could be as high as 10.6 billion.

Our existence will depend on a surge of creativity and invention. The next thirty years will not be defined by the frivolous gadgets of the past; necessity will once more be the mother of invention.

Currently we know that much British IP is being acquired by organisations in China and the Middle East, meaning the intellectual property rights are not being exploited for long-term commercial benefit by British companies. While we have the opportunity to develop oil and gas independence with renewables, we are losing our rights to those inventions because we do not sufficiently value uncommercialised design assets until it is too late.


Sustainable design doesn't just mean green or environmental technologies, but we need to encourage our designers to come up with alternative materials and manufacturing processes for our resource-constrained future. Design ingenuity has come up with a host of exciting solutions from turning recycled plastics into jeans and hoodies, to fashioning old car tyres into uber-trendy footwear. We are only limited by our imagination and the desire to gain global competitive advantage by playing to our strengths; but with parity and fairness.

guardian

[Graeme]

3D printing 'could herald new industrial revolution'

As potentially game-changing as the steam engine or telegraph were in their day, 3D printing could herald a new industrial revolution, experts say.

For the uninitiated, the prospect of printers turning out any object you want at the click of a button may seem like the stuff of science fiction.

But 3D printing is already here, is developing fast, and looks set to leap from the labs and niche industries onto the wider market.

"There are still limits imposed by the technology available today," said Olivier Olmo, operational director of Switzerland's EPFL research institution.

"But I'm certain that within 10 or 20 years, we'll have a kind of revolution in terms of the technology being available to everyone," he said.


Francis Gurry, head of the UN's World Intellectual Property Organisation, underlined that the global 3D printing business is forecast to be worth $3.7 billion by 2015.

In contrast, world merchandise exports were worth $18.3 trillion last year, and commercial services, $4.3 trillion.

Despite remaining small in global terms, Gurry noted, the value of 3D printing is expected to expand relatively fast, to $6.5 billion by 2019.

phys.org

[Pops]

Increasing "dispossessing accumulation" of "intellectual property" is the path toward tomorrows feudalism. Try to imagine Jonas Salk today not seeking a patent for his polio vaccine, you can't.

Not surprising that the OP article is from Briton, a hub of modern financialization and an old hand at empire and rentier economics.

The increasing power of concentrated financial capital is accompanied by an extension of processes of commodification and procedures of dispossession similar to forms of original accumulation. This continuing and reinforced accumulation by dispossession in its different guises is capital’s answer to the problem of over-accumulation. As a form of dispossessing accumulation, the implementation and extension of intellectual property monopolies is of particular importance. In the context of an increasing socialization of labor, in particular of innovative activities, the private appropriation of knowledge in the form of intellectual property monopolies and its commercial valorization has become a central characteristic of the current configuration of capitalism.
Income based on such property titles has become an important form of the appropriation of resources in the finance-dominated accumulation regime.

https://www.sbg.ac.at/gew/Zeller/RIPE.pdf

[Graeme]

Global Agenda Council on the Intellectual Property System 2012-2013

Intellectual property (IP) is about promoting progress and innovation. The global IP system should be seen as a tool to regulate and facilitate trade, information and knowledge in innovative and creative goods and services.

While intellectual property may seem like a foreign concept to many, the fruits of IP are everywhere; consider mobile phones, cars, music, medicine and products bought in a supermarket. The knowledge and human creativity embodied by the IP in these products makes the modern world possible.

IP rights do not simply benefit creators, but rather society as a whole. In today’s interconnected knowledge-centric society, the economic stakes of an appropriate IP framework are high. Intellectual property enables greater investment in products and services to improve society, including life-saving vaccines and medicines, or high-yield, drought-resistant crops that increase the world's food supply. By leveraging the IP system for social and economic growth, society will benefit from a wider base of knowledge, increased investment in research and development (R&D), broader support of creative arts, greater access to open markets, better consumer protection and greater accessibility to IP benefits.

However, the IP system does not always function smoothly; it is not a single global system, but rather a patchwork of systems created within each country. This creates many challenges, including high costs, uncertainty in legal rights, inconsistencies between systems, unfair competition, enforcement challenges across borders and the lack of access to IP protection.

Given the disorder in the global economy, the IP system is more important than ever in providing the framework to foster new products and cultivate new inventions that are instrumental in creating the next generation of jobs, investments and growth.

Did You Know?

The three main types of IP are patents, trademarks and copyrights: patents cover new inventions and technology; trademarks protect brand names and symbols used in commerce; copyrights cover creative works like books, music and movies.

International patent filings under the World Intellectual Property Organization (WIPO)-administered Patent Cooperation Treaty (PCT) set a record in 2011 with 181,900 patent applications, a 10.7% increase from 2010 and the fastest growth since 2005. China, Japan and the United States accounted for 82% of total growth.

An ongoing geographic shift exists in the use of the PCT system, from North America and Europe towards Asia. Applications from Asia accounted for 38.8% of total applications in 2011, while those originating from Europe and North America accounted for 30.9% and 28.3% respectively. China experienced the fastest-growing rise of patent applications, with a 33% increase in 2011.

weforum

[ralfy]

In contrast, I'm reminded of the Global Village Construction Set:

http://www.youtube.com/watch?v=zIsHKrP-66s

[Graeme]

Raify, Thanks for your post! Great idea. However, this is still 'intellectual property', and the GVC Group still has to be run as a business. Their income is at present mainly donations and 'grants'. Let see if their income diversifies.

Expect exponential progress

Massachusetts Institute of Technology was so advanced in 1965 that it actually had a computer. Housed in its own building, it cost $11 million (in today's dollars) and was shared by all students and faculty. Four decades later, the computer in your cellphone is a million times smaller, a million times less expensive, and a thousand times more powerful. That's a billionfold increase in the amount of computation you can buy per dollar.

Yet as powerful as information technology is today, we will make another billionfold increase in capability (for the same cost) over the next 25 years. That's because information technology builds on itself – we are continually using the latest tools to create the next so they grow in capability at an exponential rate. This doesn't just mean snazzier cellphones. It means that change will rock every aspect of our world. The exponential growth in computing speed will unlock a solution to global warming and solve myriad other worldly conundrums.

Thanks to its exponential power, only technology possesses the scale to address the major challenges – such as energy and the environment, disease and poverty – confronting society.

Take energy. Today, 70 percent of it comes from fossil fuels, a 19th-century technology. But if we could capture just 1/10,000th of the sunlight that falls on Earth, we could meet 100 percent of the world's energy needs using this renewable and environmentally friendly source. We can't do that now because solar panels rely on old technology, making them expensive, inefficient, heavy, and hard to install. But a new generation of panels based on nanotechnology is starting to overcome these obstacles. The tipping point at which energy from solar panels will actually be less expensive than fossil fuels is only a few years away. The power we are generating from solar is doubling every two years; at that rate, it will be able to meet all energy needs within 20 years.

Nanotechnology itself is an information technology and therefore subject to what I call the "law of accelerating returns," a continual doubling of capability about every year. I'm confident that the day is close at hand when we will be able to obtain energy from sunlight using nanoengineered solar panels and store it for use on cloudy days in nanoengineered fuel cells for less than it costs to use environmentally damaging fossil fuels.

It's important to understand that exponentials seem slow at first. In the mid-1990s, halfway through the Human Genome Project to identify all the genes in human DNA, researchers had succeeded in collecting only 1 percent of the human genome. But the amount of genetic data was doubling every year, and that is actually right on schedule for an exponential progression. The project was slated to take 15 years, and if you double 1 percent seven more times you surpass 100 percent. In fact, the project was finished two years early. This helps explain why people underestimate what is technologically feasible over long periods of time – they think linearly while the actual course of progress is exponential.

What's more, this exponential progression of information technology will affect our prosperity as well. The World Bank has reported, for example, that poverty in Asia has been cut in half over the past decade due to information technologies and that at current rates it will be cut by another 90 percent over the next decade. That phenomenon will spread around the globe.

Clearly, the transformation of our 21st-century world is under way, and information technology, in all its forms, is helping the future look brighter ... exponentially.

csmonitor

[ralfy]

Just because a project is funded by donations and grants doesn't make the output part of intellectual property.

The diagrams are open source and have been released. Anyone is now free to experiment with them, modify them, etc.

http://opensourceecology.org/wiki-gvcs.php

Finally, FWIW,

"Ray Kurzweil uses math to prove that we have no energy crisis"

http://io9.com/5766786/ray-kurtzweil-us ... rgy-crisis

[Graeme]

OK, lets get back to the theme of the thread. Here is a reference that puts IP into perspective.

Intellectual Property: The Engine of U.S. Economic Growth

Today [11 Apr 2012 ], Victoria Espinel, the U.S. Intellectual Property Enforcement Coordinator, together with John Bryson, the U.S. Secretary of Commerce and David Kappos, the Director of the U.S. Patent and Trademark Office, released Intellectual Property and the U.S. Economy: Industries in Focus. This report is notable for what it shows about the role IP plays in driving U.S. jobs and economic growth. A few facts stand out in particular:

· IP-intensive industries directly employ 27.1 million Americans, and indirectly contribute to another 12.9 million jobs. All told, 27.7 percent of all U.S. jobs are attributable to IP-intensive industries.

· IP-intensive industries account for $5.06 trillion in value added, representing 34.8 percent of U.S. gross domestic product (GDP) in 2010.

· Respondents in the computer industry indicated that patents were an effective means for securing competitive advantage from innovations over 40 percent of the time, a higher rate than in most other industries.

This study demonstrates that intellectual property is an enabler of innovation, resulting in the creation of businesses and jobs. And jobs in IP-intensive industries are high paying, with average weekly wages 42 percent higher than in other industries.

Of course, none of this would be possible without a strong and effective IP system in the U.S. Policymakers across the political spectrum have long recognized the importance of IP in driving jobs and economic growth, and today’s report provides strong confirmation of their approach.

technet

[ralfy]

From what I gathered, the theme of the thread is that as we face "massive change" (i.e., the effects of continued global financial crisis, peak oil, and global warming), then we will need more "creativity" and "innovation," especially "innovation" that leads to sustainability, which is why we need to have intellectual property.

Unfortunately, intellectual property, especially that which leads to income generation, does not promote sustainability as the cost of intellectual property is added to that of manufacturing products needed to support basic needs, etc. That means the consumer has to become more productive in order to pay the higher cost for the manufactured good. The result is more debt, resource consumption, and pollution.

[Graeme]

R, My last post illustrates how important in monetary terms IP is to the economy. I can't tell you what proportion of IP in 2010 contributes toward sustainability because it is a complex issue. In any case, we have around 20-30 years to convert the global economy toward a sustainable one because that is when the global population stabilizes and begins to fall (see population thread).

To illustrate the complexity, I can refer you to the appropriate UN body who administer through the WTO sustainable IP issues. You are welcome to read all the links on this page. For example, in the link in the text on International Centre for Trade and Sustainable Development, you can see on the bottom right another link on the Summary: International Technology Diffusion in a Sustainable Energy Trade Agreement. Within that summary, you can see a pdf which lists a checklist of "potential technology diffusion elements for a Sustainable Energy Trade Agreement (SETA)".

Furthermore, I started a thread on sustainable (steady-state) economics. Please read links in my latest post on SEF and Constanza who discuss the issues you raised.

[Pops]

R, My last post illustrates how important in monetary terms IP is to the economy. I can't tell you what proportion of IP in 2010 contributes toward sustainability because it is a complex issue.

Unfortunately Graeme your techno-unicorn vision of the future is just a rerun of the feudal past.
"Intellectual Property" is the opposite of innovation, it is the monopolization of ideas. Humans are curious, they will innovate, monopolizing ideas only serves one purpose, making one person more wealthy at the expense of society.

Patenting a gene sequencerelated to breast cancer for example prevents anyone else from making a therapy or test for that gene - it prevents anyone from even looking at that gene!

Again, can you imagine if Jonas Salk had been prevented from even looking at the polio virus?

Here from the Worldwatch institute whose motto btw is "Vision for a Sustainable Future"

Like thousands of others in southern Germany in the late 19th century, Karl and Anna Schmeiser worked long, hard days farming a baron’s vast tracts of land to keep a roof over their heads and food on the table. The baron owned the land, the draft animals, the equipment, and most of the crop—more or less as barons before him had since the Middle Ages. Also like thousands, Karl and Anna dreamed of a better life, and in 1890 they scraped together every last pfennig and left Germany forever, taking ship to the United States. Seeking cheap land and independence, they eventually moved northward to the prairies of western Canada, settling in Saskatchewan in 1904.

A century later, the land is no longer so cheap. The independence Karl and Anna found is threatened too, as grandson Percy Schmeiser and his wife Louise discovered in 1998. That’s when Monsanto Corporation sued them after their canola seed was found to contain the company’s patented, herbicide-resistant genes.* The case generated worldwide headlines, and an uncertain future for many farmers. Although the Schmeisers ultimately didn’t have to pay Monsanto, the courts did find them guilty of patent infringement. The fact that a transnational corporation would persecute small farmers is troubling to many, and shows the depth and breadth of a decades-long transformation: the steady erosion of farmers’ practice of developing and saving seeds. “Neither I nor my parents or grandparents ever envisioned farmers losing control of their seed,” Schmeiser says.

...
Scientific advances in the 1970s and ’80s heralded a new era in agriculture. To boost flat sales, Monsanto and other agrichemical companies ventured into genetic engineering and transformed themselves into the biotechnology industry. They bought out traditional seed companies and engineered their herbicide-resistant genes into the newly acquired seed lines. Although the lower-cost, traditional seed lines simultaneously became less available, to maximize profits the industry needed farmers to buy new seed every year instead of saving it. This was a new arrangement. In the past, the public institutions in North America that bred seed varieties enjoyed a measure of intellectual property protection under the U.S. Plant Variety Protection Act or Canada’s Plant Breeders’ Rights Act. The institutions licensed companies to sell the seed to farmers and usually claimed a royalty. Farmers were permitted to save successive generations of seed for planting on their own farms. Arguably, this was a fairer system, but hardly profitable for a multinational biotechnology industry busy absorbing seed companies.

[SeaGypsy]

Succinctly put Pops, turning the thread away from unicornery to what it should be, a realistic discussion about how to balance the need for openness in innovation with incentive to innovate. Perhaps one of those quandaries which will find no solution. What happens instead of a solution is likely to be a continuation of the state of affairs currently, a mess of litigation by IP owner/ claimants, unpoliceable legislation, breaches all over depending on the apparent clout and litigiousness of said. Interestingly the greatest thief of patent ever is also the fastest growing economy in the world and everyone wants/ needs to do business with them. I applaud open source innovators as heroes, but I can see the lines blurring to the point where in many areas source is varied and debatable. IP law is probably going to be a very lucrative business in this era, but doubtful enough to to 'save' the economy.

[Graeme]

Pops/Seagypsy, I understand your feelings on the 'apparent' negative effects of IP but I don't agree with them. It was instructive from the link that Pops gave that his /her criticism was from a Marxist! Salk chose not to patent his vaccine. That was his moral choice.

When he was asked in a televised interview who owned the patent to the vaccine, Salk replied: "There is no patent. Could you patent the sun?"

On a simple level, how would you feel if somebody else copied your work and made money from it. There has to be some protection for your original work under law.

Intellectual property (IP) is a legal concept which refers to creations of the mind for which exclusive rights are recognized.[1] Under intellectual property law, owners are granted certain exclusive rights to a variety of intangible assets, such as musical, literary, and artistic works; discoveries and inventions; and words, phrases, symbols, and designs. Common types of intellectual property rights include copyright, trademarks, patents, industrial design rights, trade dress, and in some jurisdictions trade secrets.

On the other hand, IP can lead to monopolization as you say. Here is how the UN views this conflict of interest:

The World Intellectual Property Organization (WIPO) recognizes that conflicts may exist between the respect for and implementation of current intellectual property systems and other human rights.[59] In 2001 the UN Committee on Economic, Social and Cultural Rights issued a document called "Human rights and intellectual property" that argued that intellectual property tends to be governed by economic goals when it should be viewed primarily as a social product; in order to serve human well-being, intellectual property systems must respect and conform to human rights laws. According to the Committee, when systems fail to do so they risk infringing upon the human right to food and health, and to cultural participation and scientific benefits.[60][61] In 2004 the General Assembly of WIPO adopted The Geneva Declaration on the Future of the World Intellectual Property Organization which argues that WIPO should "focus more on the needs of developing countries, and to view IP as one of many tools for development—not as an end in itself"


According to Article 27 of the Universal Declaration of Human Rights, "everyone has the right to the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he is the author".[32] Although the relationship between intellectual property and human rights is a complex one,[33] there are moral arguments for intellectual property.

As I said earlier, this is a complex issue. I am in no position to dismiss your criticisms because I'm not a lawyer. However, I can refer you to an example where you can defend human rights relative to IPR.

Using the agricultural domain as an example, Cullet noted three instances of how current Intellectual Property Rights (IPR) impact human rights. First, by restricting access to knowledge, IPR favour monopolies. Second, IPR allow agribusiness to patent genetic modifications of seed lines. While these IP protections help businesses reap profits from innovation, they also restrict access to and use of many seeds. Thirdly, the IP regime fosters the commercialization of agriculture, promoting monoculture and cash crops over subsistence farming. Such IP restrictions and favouritism of big business interests have devastating impacts on the human right to food and protection of traditional knowledge.

Flagging the now well-known impact of patents on access to medicines, Cullet proposed that a similar approach be used to realign agricultural IP norms with human rights. He argued that legal instruments in support of such a framework exist. For example, Article 152of the International Covenant on Economic, Social and Cultural Rights (ICESCR) articulates the right to benefit from scientific progress. Advocates could use provisions such as this one to substantiate demands for access to and protection of knowledge. In addition, Cullet described how Article 15 could be used by human right defenders to claim IP protections for traditional knowledge.

Strategies for human rights advocates to effect change within the IPR regime include three basic steps: 1) participate in informing and advising IP policy decisions, 2) lobby in favour of containing and limiting the IP system (such as the prohibition of seed patents), and 3) challenge the rising trend towards increased commodification of knowledge.

[Pops]

I don't know much about Marx but I think he didn't like capitalists because profit is the difference between what they can convince labor to take and the consumer to pay for whatever product it was they produced.

I would guess he liked rentiers even less because they produce no product, seeking to profit merely from ownership.

To look at it another way, capitalists profit by using their capital to make something happen in the future whereas rentiers profit from something that happened in the past.


--
I started to pontificate about how I do creative work and so am very cognizant of copyrights. But then I remembered the techno-unicorn I'd posted above. I traced it back to the artist who explicitly reserved all rights (which is actually meaningless since "all rights" are automatically the creators) so I removed it.

The upshot is her art doesn't get seen and so can't make a contribution, that's cool, it's her's, she owns it. But it also makes my point I think, because if she had chosen to give some type of reciprocal license (CopyLeft, Share Alike, etc) her work would have combined with my "work" writing the post to create something larger (if not necessarily more meaningful).

But she's the owner, she would rather hold out for money than see her work used to make something larger and then passed along freely for the betterment of society. That in a nutshell is the definition of rentier capitalism.

--
Actually kind of funny you bring up the steady state economy in conjunction with charging rent on the past, i.e. Intellectual Property. As I understand it, a steady state economy would have zero growth and so interest rates and inflation would be zero - without growth, where does the money come from to pay the rent (profit) on all these tecno-utopian breakthroughs?

I was going to see what this article had to say, The euthanasia of the rentier — A way toward a steady-state economy? but it turns out it costs $35 to read.

[Graeme]

Pops, I don't think the situation you describe is black and white. There is a case for IP as long as you understand the advantages as well. I don't see anything wrong with paying for access to crucial information. For example, when you want medical expertise, you look for the best possible consultant. By supplying free information initially (a well-known business technique), it can give the consumer confidence that the person they want to pay has the necessary skills. Here are excepts from an essay that I could get free access to and explains the advantages quite well.

Intellectual Property in the United States has become increasingly more important in the last decade. The right to own one's genius is not a new concept. However, with the arrival of the digital age, it has become much harder to remain in control of one's intellectual property. Intellectual property has grown from the need to protect one's new invention, such as soap, to the need to protect a slogan or a color. In other words, intellectual property rights no longer protect solely the interest of preserving a trade secret; it is now the interest to preserve one's monetary gain.


Patents are grants from the government giving exclusive rights to ``make, use, and sell a product for 20 years.'' Their attributes include providing strong protection, and total exclusivity. Their downsides include long expensive, technical processes, and inventors must make all the details of their product known to the public. One must apply to the Federal government for a patent. Patents protect ``novel, useful, non-obvious and intangible'' ideas.

Copyrights protect all written pieces including, but not limited to: books, periodicals, songs and music, theatre productions including all accompanying music, movies and all accompanying music, letters, etc. Copyrights are important because they protect the First Amendments rights of freedom of speech and of the press. The right to speak freely is the right to ensure that what ones says or writes belongs to them and not hundreds of others.


It seems that IP is best used as an economic tool. There will always be drawback to using IP, but that is really the nature of usefulness. Not everything on Earth has only good uses or only bad uses. We can see this in computers, where the same computer can be used by a researcher and a hacker. The original intent of the computer will blur in light of what the users intent is. The same goes for IP. IP as an economic tool includes the marketing or contracting of licenses, patents, trademarks, in both commercial and private transactions.

According to the World Intellectual Property Organization (WIPO) IP has helped foster global economic growth and economic growth in many country-specific cases because it promotes investment in private research and development (R&D). This is important at the global level because of trade. IP quickly became a tool to control piracy across borders. So IP is respected in all countries, developed or not. This is especially important in foreign investment.


In court cases all the public sees of IP is how it is used to prevent others from using a certain thing, a song or computer chip, in a certain way. IP is also used to license products and technology as a way to discourage theft and misuse. By licensing technology, rights are given to the user to work in almost any way they please except those that would harm the technology or alter it from its licensed state. Licenses allow for products and technology to be improved or modified, at the creators discretion. So there is still movement and creativity. Licenses do not prevent the use of a creation, they protect the creator and make a space where the creator can modify the creation without somehow oppressing the user.


Creative Commons- Variable Licenses

Creative Commons is a project to promote a different copyright regime; ``some rights reserved.'' Under this new paradigm, inventors, writers, etc. can decide what sort of restrictions they want to put on their creations. These include requiring attribution, that the product not be used for commercial purposes, that the original work not be altered, or that any derived works be shared under the same conditions as the original[40]. Creators are also free to use any combination of the above. In order to get around these specific reserved rights, the prospective use has to either be ``fair use,'' or with the permission of the author.

[Pops]

You're right it isn't clear cut. I know you are hoping someone will invent us out of our various predicaments and dream up a techno-utopia but the fact is the landlords are hoping to privatize everything and send you a bill.

You mention medicine, one aspect of economic rent is creating false scarcity, as in the American Medical Association limiting the number of doctors graduated so those that remain are more highly sought. Even hair dressers have successfully lobbied to require licenses to braid hair in some places.

That is called "rent seeking" and is the direction we, at least in the US are headed. "Financial" transactions are 30% (?) of the US economy: profit without product, money for nothing.

Those at the top of the trickle up economy can only accumulate so much physical property - there is only so much to be had. The push for "Intellectual Property" (Rentier economics) is at the center of that because there is no end to the "ideas" that can be patented, copyrighted and licensed. Many mergers are made merely to obtain patents and reduce competition to increase a scarcity premium.


So yeah, innovation is a good thing. But when you think of "intellectual property" don't think of George Jetson putting along in his water-powered flying saucer, think of paying a toll on the turnpike that was once a public roadway.

[Graeme]

I think you are just seeing the negative side of IP and ignoring those who use it in a positive way (see above essay).

We can see this in computers, where the same computer can be used by a researcher and a hacker. The original intent of the computer will blur in light of what the users intent is.

Actually, I only posted the original story because it was World IP Day recently. I've since discovered that it forms a significant part of the American and world economy but it also can be be widely abused (see recent story below). And also the appointment of a new director of the WTO just happens to require expertise in IP!

Global Piracy, SAP, Takeda, GM: Intellectual Property

Ukraine’s copyright protections have deteriorated to a level where the Obama administration may consider trade sanctions, according to a U.S. report that also cites China for trade-secret theft.

The U.S. Trade Representative’s office labeled Ukraine as the lone “priority foreign country” yesterday in its annual assessment of enforcement of intellectual property rights. The designation, reserved for nations the U.S. considers egregious violators of IP trade law, can spark an investigation and, potentially, an increase in tariff rates.

In releasing the report, the U.S. pledged “to take strong action to support critical jobs and exports in IP-intensive industries,” acting U.S. Trade Representative Demetrios Marantis said yesterday in a statement.

The U.S. also urged China’s government leaders to take “serious steps” to stop trade secret theft from American companies tied to Chinese operators. “The theft of trade secrets is an escalating concern,” according to the report.

Cyber attacks and corporate espionage originating in the Asian nation have added tension in relations between the U.S. and China, the world’s largest economies. White House National Security Adviser Thomas Donilon said in a March 11 speech that the U.S. is concerned about “cyber intrusions emanating from China at a very large scale.”

President Barack Obama’s administration in February released a strategy to combat trade-secret theft, including use of the USTR report to identify weaknesses in trade-secret protections.

China remained on the agency’s “priority watch list” for concerns about its failure to enforce intellectual property rights, according to the report. Other countries on the list are Algeria, Argentina, Chile, China, India, Indonesia, Pakistan, Russia, Thailand, and Venezuela.

bloomberg

Final Two WTO Director Candidates Highlight Technology And IP

The selection process for the next director general of the World Trade Organization is down to two candidates, both from Latin America. Intellectual Property Watch asked them to comment on why they would be the best leader for those interested in technology and intellectual property rights.

The WTO announced on 26 April that the field had shrunk from five candidates down to two, based on the views of the 158 WTO members.

The remaining candidates are Herminio Blanco of Mexico and Roberto Carvalho de Azevêdo of Brazil. Blanco is coming from the private sector, and is the former trade minister and trade negotiator for Mexico, including the North American Free Trade Agreement (NAFTA). Carvalho de Azevêdo is Brazil’s ambassador to the WTO as well as to the World Intellectual Property Organisation (WIPO), the UN Conference for Trade and Development (UNCTAD), and the International Telecommunication Union (ITU).

The next round of consultations with members will run from 1 to 7 May. The outcome is expected to be announced on 8 May.

ip-watch.org

[Graeme]

It's funny how several threads tie together and are relevant to this one - the economy, IP and climate change are linked. I've just seen this:

Four changes to trade rules to facilitate climate change action

The research on the links between trade rules and climate-change action has mostly been concerned with how far climate-change action is constrained by current trade rules pertaining, for example, to border-tax adjustments (Horn and Mavroidis 2011), subsidies (Green 2006) and exports of natural gas (Levi 2012 and Hufbauer et al. 2013).

The research reflects – in part – the assumption that climate-change action (e.g. carbon-price increases) can be taken as a given. But our approach and proposals are predicated on:

The current reality that action on climate change is proving fiendishly difficult.
The assumption that only radical technological progress can reconcile climate-change goals with the development and energy aspirations of humanity (Mattoo and Subramanian 2012).
The relevant question then is: can trade rules be designed or changed to facilitate – in any way, direct and indirect, economic and political – climate-change action, including by fostering technological progress, without unduly damaging trade? In a new paper (Mattoo and Subramanian 2013) we propose changes in four areas.

Green subsidies

Under current WTO rules, economy-wide subsidies for clean energy would be permissible because they are not specific to an industry. However, any form of export subsidies including those involving clean energy and/or green technologies is prohibited (Pauwelyn 2009). Domestic subsidies for specific industries for the development and production of green products are not prohibited but actionable by partner countries if the latter believe that their domestic production or exports are adversely affected (Green 2006).

On the face of it, these rules are an example of how trade negotiations can produce disciplines that are good for global welfare by preventing wasteful subsidy wars driven by influential producer groups (think agriculture and aircraft makers).

In relation to climate change, however, these rules curtail three important benefits of subsidies.

First of all, any subsidy that promotes clean energy and green products at home confers a benefit also to partner countries because there is less CO2 in the atmosphere.
Second, a country also makes available cheaper green products and technologies to other countries, and that encourages their use, taking us closer to the social optimum.
Third, there is an arguably bigger, political-economy benefit.
Prospects for climate change action in the US in the form of a carbon tax or cap-and-trade do not seem bright. One development may galvanise action in the US: the threat that green-technology leadership will be captured by China. In other words, the US needs a Sputnik moment of collective alarm at the loss of US economic and technological ascendancy.

The global battle against climate change is thus being fought with a depleted arsenal (see, for example, Acemoglu et al. 2012). Countries that have the financial means to do so should be allowed to deploy industrial policy to promote clean energy and green technologies. What the world needs is unbridled competition or even a race initiated by a change in global trade rules to facilitate large scale support for the development and production of the currently under-supplied green goods.

Thus, we would propose altering current rules in the following manner. Production subsidies for specific green products and technologies should be permissible. Partner countries should not be able to take action unilaterally or through WTO dispute settlement against them. Export subsidies related to green products and technologies should not be prohibited. However, since they carry greater risks of mercantilist abuse, they should be regulated more strictly than production subsidies.

Border-tax adjustments

A lot has been written on this subject. Based on previous work (UNEP and WTO 2009, Mattoo et. al. 2013), we proposed a possible compromise between no border tax adjustments, which is best from a trade perspective, and adjustment based on carbon content of imports, which is attractive from an environmental perspective. This compromise would involve taxes based on the carbon content in domestic production rather than that embodied in imports. Countries could accept this principle as a pragmatic and negotiated compromise between not just trade and environmental concerns, but also between the interests of different countries.

An alternative to import taxes would be for the exporting country to impose taxes on exports, which could be designed to have the same environmental consequences as the import-based border taxes. The big difference would be that the tax revenues would be collected by the exporting countries rather than the importing countries. International cooperation, in the form of coordination and information sharing between importing and exporting countries (but also more broadly in the form of clarifying existing rules) would help walk the narrow path between carbon tax avoidance (if the exporting country under-taxes) and double taxation of carbon (if the importing country taxes what has already been taxed).

Export restrictions on fossil fuels

If greater use of natural gas is on balance globally desirable because it is cleaner than substitutes such as oil and coal (as Helm 2012 argues in his recent book), then restrictions on exports might be harmful for global energy emissions. If the environmental benefits of unrestricted gas are not so clear, the export ban on natural gas should be disallowed on traditional trade grounds. This is then an example where WTO rules need to be tougher on mercantilist practices for the sake of the environment. So, we would support the emerging consensus (Levi 2012 and Hufbauer et al. 2013) in favour of disallowing export restrictions on fossil fuels.

Intellectual property rights protection

To provide more affordable medicines, developing countries are increasingly attempting to dilute patent rights by issuing compulsory licenses (licences granted without the authorisation of the right holder). Developing countries have also argued for weak intellectual property rights to facilitate dissemination of green technologies.

If, however, these countries come to believe that

Their stakes in preventing climate change are high.
Technology generation is key to preventing or mitigating the effects of climate change.
Because they are large emitters of greenhouse gases and because their markets for green technologies are large, technology generation will be materially affected by the property rights protection that they provide;
Then their incentives for strengthening intellectual property rights protection will be enhanced. In this case, rules on intellectual property rights could be strengthened.

One way of doing this would be to tighten the compulsory license provisions at least for the large emerging market economies such as China, India, Brazil, Indonesia, Russia, and South Africa. One possibility, for example, would be to change Article 31 (h) of the TRIPs agreement to say that where compulsory licenses are granted for green technologies, the right holder shall be paid remuneration related to the fixed cost of inventing them (suitably apportioned across the large markets).

Political economy of international cooperation

Thus, we propose here a bargain on trade rules between industrial countries and the dynamic emerging economies that would facilitate climate-change action.

Trade actions/contributions by the dynamic emerging economies could take two forms:

First, by permitting industrial countries to take bilateral trade agreements – or by imposing export taxes on energy-intensive manufacturing goods themselves – they could facilitate the political economy of industrial countries raising carbon prices;
Energy-intensive industries in the US and Europe would receive some protection against the loss of competitiveness and thus be less resistant to carbon-price increases.

Second, by strengthening intellectual property rights protection, they could contribute to the global effort at technology development. In turn, industrial countries would agree to modify trade rules to allow subsidies for green goods and technologies, and lift export restrictions on natural gas.
From the perspective of the bargaining dynamic between China on the one hand and the US and EU on the other, there is a possible give-and-take which makes cooperation feasible.

voxeu

[Graeme]

Brazil wins race for next WTO director

The World Trade Organization has settled on Roberto Azevedo of Brazil, a well-known diplomat and consummate insider in Geneva circles, to serve as its director-general for the next four years, officials said Tuesday.

Azevedo won by positioning himself as someone who could turn around – even heal – the organization as it struggles for relevancy in global trade negotiations.


Last week, in an interview with The Associated Press, Azevedo said his candidacy was based on his status as an insider, and he compared himself to a surgeon with the skills and knowledge to heal the WTO, after having represented Brazil to the organization since 2008.

"I think we're getting a very sick patient. The WTO at this point in time is not doing well. It's almost like the next DG (director-general) is coming to the operating table with a very sick patient on it," he said at his elegant private residence, beside a park overlooking Lake Geneva.

"In my view, he has to put on the gloves, the mask and start operating immediately, because the patient is almost terminal," he added. "The contribution I have to the system is that when I come to the table, I won't have to open a book and, you know, start reading medical practice."

huffingtonpost

The backgrounds of all candidates can be found on the WTO website here. An analysis of the positions of candidates was provided by the International Centre for Trade and Sustainable Development (ICTSD), here.

[Graeme]

Renewable-Energy Patents on the Rise

The number of patents issued for renewable-energy technologies has risen sharply over the last decade, according to new research from MIT and the Santa Fe Institute (SFI). The study shows that investments in research and development, as well as in the growth of markets for these products, have helped to spur this dramatic growth in innovation.

“We were quite surprised,” says Jessika Trancik, an assistant professor of engineering systems at MIT and a co-author of the new report, published in the journal PLoS ONE. Trancik — working with Luís Bettencourt of SFI and graduate student Jasleen Kaur from Indiana University — created a database of energy-related patents issued in more than 100 countries between 1970 and 2009, using keyword searches of the patents themselves, rather than the classifications assigned by patent offices. In all, the team examined more than 73,000 patents issued for energy-related technologies.

This database “gives you a view into innovation activity — who’s doing it, and where,” Trancik says. Further statistical analysis, she says, showed a clear correlation between this rise in patents and prior investments in R&D, along with growth in the markets for such renewable technologies.

The increase was most dramatic in patents related to renewable energy, chiefly solar energy and wind. Patents in fossil-fuel technologies showed a more modest increase, while those in nuclear technology were flat.

For example, between 2004 and 2009, the number of patents issued annually for solar energy increased by 13 percent per year, while those for wind energy increased 19 percent per year, on average; these growth rates approach or exceed the rates for technologies such as semiconductors and digital communications. Overall, renewable-energy patents in the United States increased from fewer than 200 per year in the period from 1975 to 2000 to more than 1,000 annually by 2009. By comparison, there were about 300 fossil-fuel-related patents in 2009, up from about 100 a year in earlier decades. The fraction of all patents accounted for by energy is also increasing.

pddnet