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HOW HE SEES IT Keeping our intellectual property safe



Published: Thu, June 23, 2005 @ 12:00 a.m.



By JAMES P. PINKERTON

LONG ISLAND NEWSDAY

GENEVA -- Most Americans have probably never heard of the World Intellectual Property Organization, headquartered here in Switzerland. But they should know now about WIPO. Otherwise, they will learn about it the hard way.

Intellectual property is intangible property, such as software or music. And while it might seem somewhat unreal, its value is very real. According to a study by Leonard Nakamura, an economist at the Federal Reserve Bank of Philadelphia, the total value of intellectual property in the United States is more than $5 trillion. That's more than a third of the value of the U.S. stock markets.

However, because intellectual property is so fluid, protected only by copyrights and patents, it is relatively easy to steal or counterfeit. The U.S. software industry, for example, estimates that it will lose a billion dollars this year to pirates in Brazil alone.

Another country that routinely rips off American intellectual property is China. Ohio State's Oded Shenkar, author of "The Chinese Century: The Rising Chinese Economy and Its Impact on the Global Economy, the Balance of Power, and Your Job," argues that the Chinese are following a perfectly logical -- from their point of view -- strategy on this theft. In a nutshell: If the Chinese can make American wealth their own, then they are better off, and we are worse off. That's not such a bad plan for them, is it?

Swindling prospects

Now comes yet another threat to America's intellectual property -- and also to the health of the world. Here in Geneva, WIPO and other international bodies are meeting to consider new rules that would dramatically raise the cost for biotech companies "prospecting" around the world for new chemical compounds in plants and animals that can contribute to human healing. The stakes are not small. A single flower, the Madagascar periwinkle, has led to two potent cancer treatments, vincristine and vinblastine.

Sounds pretty good, doesn't it? Medicine does create miracles. Western science succeeded, for example, in eradicating the age-old scourge of smallpox in 1977 -- not a single case since. So an estimated 20 million lives have been saved these past three decades. One might think that in the spirit of science, and out of pure self-interest, all countries would be eager to contribute anything they could -- intellectual, technical or botanical -- to develop still more cures.

Well, anybody who thinks that should come to Geneva, to see what's going on here. A group of 17 Third World countries, the so-called Like-Minded Megadiverse Countries (LMMC), are gathered here to figure out how to twist the rules concerning intellectual property. Their goal? To impose additional costs and potentially ruinous liabilities on Western biotech companies, most of them American. And oh yes, if the LMMCs can stick Uncle Sam in the eye, that's cool, too.

Injurious insult

In the words of Kevin Moley, U.S. ambassador to international organizations in Geneva, the LMMC countries are making an offer that the West must refuse. "It's as if someone sells you iron ore," Moley explains, "which you then manufacture into an automobile. But then the person who sold you the ore says, 'I don't want just to be paid for the ore, I want a portion -- a big portion -- of the value of the car you just made.'"

In fact, the dollars in question are real. A study released here by the San Francisco-based Pacific Research Institute finds that the proposed new regulations would cost biotech companies $144 billion over the next decades. Higher drug prices, anyone?

Even more dire would be the loss to public health: The study suggests that between 150 and 200 new drugs would never make it to the market under the proposed LMMC strictures.

Should Americans care? Moley thinks they should. He compares the effort of the LMMC countries to enmesh biotech companies in a web of red tape to those of the tiny Lilliputians to tie down Gulliver in the famous tale by Jonathan Swift. Of course, however, the Lilliputians got away with their scheme only because Gulliver was asleep.

Los Angeles Times-Washington Post News Service




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