# Convenors' Introduction: The Culture and Economics of Participation in an International Intellectual Property Regime **Authors:** Rochelle C. Dreyfuss, Diane L. Zimmerman **Citation:** "Convenors' Introduction: The Culture and Economics of Participation in an International Intellectual Property Regime," 29 *N.Y.U. J. Int’l L. & Pol.* 1 (1997) (with Diane L. Zimmerman) **Source:** https://its.law.nyu.edu/faculty/profiles/representiveFiles/dreyfuss -Convenors' Introduction_1E1789AC-C7E7-47D2-6559ECF0244085A5.pdf *p. 3* a beginning, rather than the culmination, of a collective conversation. *p. 3* In the United States, as in most of the industrially developed countries, intellectual property has recently been transformed from an interesting but esoteric discipline into a hot topic. Patented, copyrighted, and trademarked goods constitute at least a quarter of the dollar value of all exports today from the United States. 1 Film exports, for instance, are now worth more to the U.S. economy than exports of steel. And more than just money is involved. To take just one example, biotechnology developed in one nation may offer the citizens of many countries the promise of effective, low-cost treatment for diseases that were once either expensive, or even impossible, to cure. *p. 3* Ironically, however, the flourishing technology community has also produced innovations that make these new intellectual goods harder for their owners to protect from piracy. Bioengineered organisms sometimes reproduce themselves. Even where human intervention is necessary, the copying of extant software, films, and semiconductor chips is now as fast and cheap as it was expensive and difficult to develop these products in the first instance. With the launching of satellites and the advent of the Internet, the cost of distributing illicit copies has also been considerably reduced. *p. 3* Producers of intellectual goods responded to the mixture of economic opportunity and risk of piracy by urging a threepronged global approach to regulating the trade in intellectual property. First, they argued, international standards of protection should be formulated. Second, national borders should be made fully permeable to the international flow of intellectual products (by, for instance, eliminating such restrictions as tariffs and quotas). Finally, all nations should be required to engage in strict enforcement of these international norms of intellectual property protection. The argument in favor of this position was not merely that it would be profitable for existing producers, but that this regime, if implemented, would result in more innovation and in a concomitant improvement in the welfare of the entire global community. ## CONVENORST INTRODUCTION *p. 4* From this was born, as an addition to the General Agreement on Tariffs and Trade [GATI], the Agreement on Trade-Related Aspects of Intellectual Property Rights [TRIPS]. *p. 4* Standing, as we do today, on the threshold of this novel international experiment, the time seemed ripe to ask some critical questions about the assumptions underlying the TRIPS Agreement. The United States took an active role in its negotiation, with the objective of enhancing international trade. The United States Trade Representative takes the position that the norms promulgated by TRIPS should be interpreted in a manner that imposes on all member states levels of protection equivalent to (or even higher than) those found in such highly developed economies as the United States, the European Community and Japan. *p. 4* The principal questions addressed by the authors of the collection of papers that have emerged from the conference are whether this is a fair reading of the Agreement and, if so, whether this model of high standards of international compliance is appropriate. In his overview article, J.H. Reichman, Professor of Law at Vanderbilt University and a prolific commentator on developments in international intellectual property law, argues that the appropriate approach to the TRIPS Agreement is a flexible one that allows it to respond to the political, economic, social, and cultural conditions of each member state. 2 Professor Reichman's paper defends this contrary view by addressing the special problems of developing countries. Although he predicts that these countries will ultimately be in a position to become producers of intellectual products in their own right, he argues that they cannot benefit from the high levels of protection that the United States favors until they absorb the world's knowledge base. For the TRIPS Agreement to be a success, it must therefore be interpreted to permit such acquisitions at reasonable cost. After providing guidance on how the TRIPS Agreement can be so interpreted, the paper concludes by generalizing from its core premise. Professor Reichman asserts that his proposed reading will benefit not only developing nations, but, as a class, all utilizers of intellectual products. He concludes that the TRIPS Agreement, if interpreted to provide the necessary flexibility, will ul-timately lead to a "global equilibrium" between innovators and the consumers of their products. *p. 5* The remainder of the articles in this volume examine Professor Reichman's flexibility thesis from a series of different perspectives. The first set of pieces continues the debate as it relates to developing countries. Dr. Harvey Bale, International Vice President of the Pharmaceutical Research and Manufacturers of America, sets out the positive case for strong protection. 3 Using the example of the pharmaceutical industry, where the costs of development are very high relative to the costs of copying, Bale presents the argument that the impetus to invest in research is diminished by free riding. He claims that the countries that maintain low levels of protection ignore the dynamic quality of strong intellectual property rights. Were these countries to provide stronger protection, their pharmaceutical industries would have the incentives needed to develop products that would better meet the particularized needs of local populations. *p. 5* The other commentators on developing countries do not disagree with Bale's overall point, but, like Reichman, they share concerns about timing and scope. Dr. Carlos Correa, Professor of Economics at the University of Buenos Aires, shows that stronger protective regimes are developing in Latin America. 4 He warns, however, that moving too quickly to a high, internationally-imposed set of norms can create local resistance-especially if the immediate and most visible effect of protection is to raise the cost of important products, such as pharmaceuticals. He argues that a flexible approach-one that allows each country room to strike the right balance between the demands of producers and the needs of users-is critical. *p. 5* William P. Alford, Director of East Asian Legal Studies at Harvard University, takes a social, rather than Correa's political and economic, approach, but comes to a similar conclu- sion. 5 Examining the cultural dimension of intellectual property enforcement in the People's Republic of China [PRC], he concludes that part of the problem that some developing countries may have with strong intellectual property rights is that they do not have the kinds of experiences that make the value of this sort of regime resonant for them. He posits that much of the difficulty that the United States is encountering in protecting its intellectual products in the PRC results from a lack in the Chinese, at least at this point in their cultural history, of appreciation for the value of private property rights in general and intellectual property rights in particular. In Professor Alford's view, strong protection will be accorded by the PRC only if its citizens gain enough access to cultural goods to develop their appreciation for a multiplicity of viewpoints, a sense of the role of private ownership, and an understanding of the part that intellectual property can play in fostering a marketplace of ideas. *p. 6* The second set of articles takes up subtle questions that arise concerning the interpretation and application of the TRIPS Agreement in developed nations. These are countries that, in most instances, already have strong intellectual property protection, but that differ nonetheless on how this protection is implemented. In some sense, harmonization would seem self-evidently desirable: it would lower the cost of achieving worldwide protection, and it would maximize the transparency of borders. As a result, Toshiko Takenaka, Director for Advanced Study and Research on Intellectual Property at the University of Washington, predicts that, despite considerable differences in history, business practices, and technological output between Japan and the United States, their strong agreement on fundamental principles, coupled with the benefits that these countries will see from unimpeded trade, makes the convergence of legal and trade practice likely. 6 Other commentators were not so sure that such a result would be desirable, especially under a mandatory regime. Professor Edmund Kitch, Professor of Law at the University of Vir- ginia, claims that much would be lost if one nation were permitted to impose its views of the proper regime on others. 7 In the context of the United States and Japan, he argues that differences in systems should be left in place, even if they are experienced as barriers to trade. In some instances, the problems created by the differences in regimes are actually exaggerated. Also, some differences stem from variations in the way that business is conducted. The sacrifices required by harmonization, he argues, are likely to be greater than the costs of requiring outsiders to learn to cope with the differences. *p. 7* Thomas Bishop, Chair of the Center for French Civilizadon and Culture at New York University, is even more strongly opposed to the position that we need full harmonization. 8 In his view, culture is "an expression of what is most profound in a people, in a nation-it is its history, its language, its very identity." 9 It is simply too important an interest for a nation to surrender to the workings of a competitive marketplace. Judith Prowda, a former Engelberg Fellow at New York University School of Law, supports his position.1 ° She notes that, like the controversy over balancing the interests of users and producers, the debate over a "cultural exception" to free trade is also long-standing. Since cultural homogenization is surely a result that no one wants, she too argues that when a nation is battling cultural domination, it must be given the ability to foster its local culture through such measures as tax policy and broadcast restrictions. *p. 7* The final series of papers, dealing with intellectual property protection in the United States, shifts from the question of what intellectual property regimes nations should choose to implement to the question of what intellectual property laws individual citizens will choose to obey. It begins with a summary of the Report of the Working Group on Intellectual Property Rights and the National Information Infrastruc- ## CONVFNORS' INTRODUCTION *p. 8* ture," presented by its principal author, Assistant Secretary of State and Commissioner of Patents and Trademarks Bruce A. Lehman. 12 In keeping with the government's position that intellectual products are key to the American economy, the report recommends that domestic copyright law be amended to strengthen greatly the extent of intellectual property rights on the Internet. *p. 8* Professors Tom Tyler and Jessica Litman both question whether this approach-mapping the current legal regime into a new distribution environment-is viable. Professor Tyler, of the Department of Psychology at the University of California at Berkeley, examines the general conditions under which people obey law.' 3 He shows, based on empirical evidence, that the threat of punishment is far less important to whether people obey legal rules than are such factors as notions of morality and legitimacy. Professor Litman's arguments are largely consistent with Professor Tyler's. She takes the position that the copyright rules proposed by the Working Group are too counterintuitive and arbitrary to command voluntary compliance.' 4 Moreover, she argues that these rules are not necessary. She examines the material that is available on the World Wide Web in the absence of new intellectual property protections, and questions whether, given the costs of dissemination in this format, protection from free riders is really necessary in the digital environment. *p. 8* These articles conclude with a wonderfully provocative piece by Dean Thomas Bender and David Sampliner of New York University's Humanities faculty on the history of the United States as a respecter of foreign intellectual property rights?1 5 Like the currently less-developed nations, the United States was once in a position where it found it advantageous not to recognize the rights of foreign intellectual property owners. These authors provide a fascinating look at the benefits gained by the United States from this approach. Perhaps casting some light on Bale's counterintuitive observation that the same countries that do not recognize patent rights often themselves have large pharmaceutical manufacturing capacity, Bender and Sampliner show how the American publishing industry was nourished in its early years by the opportunity it enjoyed to publish books without paying royalties. Underscoring Professor Alford's notions about culture, the authors suggest that the availability of cheap editions of foreign works fostered the growth of a literate citizenry, and ultimately provided a strong consumer base for the publishing industry's output. Furthermore, domestic authors, whose works were protected by copyright, were forced to compete with cheap foreign books. According to Bender and Sampliner, this competition led to the creation of a distinctive American genre of literature. Once the United States had a robust intellectual community in place, it was ripe for adopting the stronger protection for foreign authors that it eventually enacted. *p. 9* Several conclusions can be drawn from these papers. First, it is clear that the TRIPS Agreement holds enormous potential for increasing global welfare. Aggregating global demand can produce new, more varied, and better products; as new countries recognize intellectual property rights, hopefully, the intellectual needs of new groups will be met. At the same time, however, it appears that there is no single "right" intellectual property regime. Because intellectual products are a major transmitter of cultural values, and a vehicle of material and social welfare, their sociopolitical and personal meanings within each individual society are peculiarly powerful. Thus, it is crucial that the balance struck in each country between the demands of producers and the needs of users, reflect not just considerations of global welfare, but each individual nation's economic and political situation, its cultural and aesthetic values, and its artistic and scientific traditions. In the end, the power and promise of intellectual products may militate against the success of a program that depends on each country affording strict enforcement of relatively uniform intellectual property laws. A strong argument can be made that the TRIPS Agreement must be read to emphasize the notion of minimum standards-standards that can be interpreted to vary the level of protection from country to country and from time to time. *p. 10* The Engelberg Center owes a debt not only to the authors of the wonderful pieces that appear in this volume, but also to the other speakers at the conference and the many distinguished scholars and practitioners who participated in it. They added immeasurably to the richness of the intellectual experience, turning Al Engelberg's vision into an exciting reality. The editors of the Journal of International Law and Politics are especially to be thanked for the strong commitment to academic scholarship that they evidenced by choosing to memorialize the inauguration of the Engelberg Center in this volume. ## Footnotes > J.H. Reichman, From Free Riders to Fair Followers: Global Competilion Under the TRIPSAgreement 29 N.Y.U.J. Int'l L & Pol. 1.1 (1997).