Chapter II

Intellectual Property Rights and Social Development:

A Framework

2. Introduction

Property has been one of the fundamental institutions of the

society. The very concept and nature of the property evolved in the course

of time shaped by the philosophical, cultural, economic and socio-

political aspects of the particular stage of the society. The unique feature

of property rights is related to the ownership and there is an inherent

dichotomy between private and public interests. Extension of natural

rights arguments for the protection of physical property and intellectual

property i.e., knowledge on a similar platform has been problematic,

because IPR in the international arena are tailored to enhance the interests

of industrial exploitation of intellectual capital by highlighting the role of

the rights owner and underplaying the role of other needs. The intellectual

property embraces all the intangible assets at stake, including raw genetic

resources, advanced agricultural and pharmaceutical research, and the

ethnobiological knowledge that often transforms a locally useful organism

into a globally valued application of biotechnology. Western concepts of

exclusive ownership, alienability and monopoly rights are largely

inconsistent with indigenous peoples' traditional forms of ownership

which tend to focus on collective, intergenerational creations that often do

not contain rights of alienability and which are produced from

community-based economies. Thus, attention has recently turned to the

sui generis laws of indigenous peoples as the source for developing legal

regimes to protect indigenous works. Tribal law is also uniquely well-

suited to accommodate the religious and cultural beliefs of tribes in ways

that Western law cannot.

The political construct of the intellectual property has been

internationalised with certain standards under the WTO’s TRIPS aegis.

Such a process mostly from economic and legal perspective has come

18 Chapter II

under serious scrutiny. The globalisation offers both challenges and

opportunities to indigenous knowledge systems. Opportunities may

outweigh the challenges if the globalisation undermines the legal and

cultural context in which rich indigenous knowledge system is located.

The main object of this chapter is to delve into theoretical framework of

such construct from a social development perspective in order to

understand how biodiversity associated traditional knowledge has been

hierarchically placed into the lowest realm of the society vis-à-vis public

domain to facilitate transfer of rich heritage of such information and

knowledge into intellectual property regimes.

2.1 Historical Origin of Intellectual Property Rights

2.1.1 Institution of Property

Property, one of the fundamental institutions of the society, is as

old as history. As a political principle, property draws attention to the

relationship of ownership that exists between the object in question and

the person or group to whom it belongs. So there is a clear distinction

between property and simply holding an object as possession. The

concept of property involves more than possession but it also includes the

socially defined ways in which possessions can be owned and disposed

of. Gifts, inheritance, barter, and sale are all ways of exchanging

possessions. In each society, some things are defined as "not for sale." In

modern societies you can sell your land but not your children. In many

earlier ones land could not be owned by individuals, but was instead the

collective property of a kinship group. People could inherit the right to

use a share of property but not to sell or give it to strangers. Some of these

societies did permit the sale of human beings, in a few cases even one’s

own children.

The ownership of property is, therefore, reflected in the existence

of rights and powers over an object, and also acceptance of duties and

liabilities in relation to it. However, one can notice that there is no

unanimity among societies regarding the form and evolution of property.

What is most common among the societies is that each society instituted

some kind of property system to provide control and inheritance over

Intellectual Property Rights and Social Development: A Framework 19

things. (New Encyclopaedia Britannica 1997: 182-205) The rise of

mercantilism and subsequent stage of feudalism broadened the concept of

property into real and personal. With the advent of industrial revolution

and the consequent shift away from agriculture set the stage for equal

importance to both real and personal property.1

In the contemporary scenario, intellectual property as personal

property received great attention as the basis of competitive advantage

lies with the control of abstract objects. In order to alleviate the puzzle

that exists between intangible rights and tangible properties, Peter Drahos

(1996) states that all rights are intangible and incorporeal but nature of

objects to which property rights refers can be both tangible and intangible.

The theoretical literature that debate on the origin of intellectual property

rights usually traces back to institution of property rights either to justify

or to criticise their implications to the society.

2.1.2 Purpose of Property

Karl Polanyi, well-known scholar in this debate, states that the

purpose of property is to meet the “provision of the means of existence.”

The purpose of institutions and activities that shape material life is to

provide communities with goods, services, and other values necessary to

sustain community or group life, free of deprivation. Penalver, another

scholar, suggests that property deserves protection to the extend that it

promotes human dignity, there exists in natural law, a minimum standard

for the treatment of property consistent with human dignity, and that

redistribution of property can be justified when one’s person dignity need

is greater than that of another. (Christopher Saporita 2003:271-275)

Property is a social institution interpreted by state to meet its

social and political requirements at each particular period. The legal

1 Land and anything that is firmly attached to land is considered as Real property

whereas Personal property includes all the tangible and intangible properties that can

be legally owned. For example book is a tangible personal property and intellectual

property rights are intangible personal properties. Bhalla, R.S. (1984): The Institution

of Property Legally, Historically and philosophically regarded: Eastern Book

Company.

20 Chapter II

construction of property emerged to control the actions of others in

respect to the objects of property. The history of property is also related to

the history of the protection of the individual’s interest from the

intervention of the state. Thus, property rights derived from the state-

sanctioned legal apparatus are also held against the state. Property, as an

institution, protects certain interests in society in a specific manner. But

there is a parallel history of the ways in which the institution of property

has been legitimised and justified within the social relations in which it

currently appears.

Property as a social institution seeks to internalise the costs and

benefits of individual activities. Legal constitution of property rights help

owners to secure benefits while keeping costs externalised. Social

efficiency might be best served by costs accruing to the property that

delivers the benefit; however, for individual owners it is more efficient to

have the costs met by others. So there is an inherent dichotomy between

public and private interests in the property rights.

In that sense, it could be argued that property rights are

constructed to meet the particular interests of individual actor’s who has

the power to devise new rules. Efficiency has been utilised to justify the

property rights but whose efficiency is increased in a world of positive

transaction cost is the question that has to be addressed. The concept of

property has been changed from the old understanding of it as physical

things held for the owner’s use to the modern concept of property that

treats it as assets that can be exchanged for potential use.(Christopher

May 2000: 18-21)

During the rise of capitalism, land and human labour were socially

redefined as being "for sale". Although they did not become commodities

by most strict definitions of the term (because they are not "made"), they

did become private rather than social. The appropriation of things to

secure one’s needs is the foundation of property as an institution. With

social and cultural changes, with new discoveries and inventions, the

requirements of individuals change, as do the resources accessible to meet

such needs. Such changes also produce men’s conception of property.

Intellectual Property Rights and Social Development: A Framework 21

With the development of the human labour power, acts and activities that

could produce products for the market economy, came themselves to be

regarded as object of property. The idea of exchange value was new

importation into the institution of property having little relation to the

basic idea of property. (R.S. Bhalla 1984)

Subsequently, the rise of capitalism altered the social restrictions

on property. A particular form of property, the commodity, became more

prevalent. Unlike earlier products, which were made to be used or

exchanged in the context of a social relationship between producer and

consumer, commodities were made to be sold for profit using rationally

organised wage labour. The value of a commodity is measured by a

universal medium of exchange, money. The price of a commodity

represents its value and includes the cost of materials, wages, other

production expenses, and profit. When it is sold, the exchange is based

upon the price of the product, not upon the social positions of buyer and

seller. A set of impersonal market relationships reduce direct social

contact between the maker and the consumer who may be strangers to one

another.

Economists define property in terms of income it generates, that is

capital. When capital used to generate new goods and services, another

economic property is created. Property is transferable and it has a

representative value rather than the true value. So property ownership

consists of various rights to decide what do with tangible and intangible

things. So the law of property deals with the legal relations among people

with regard to things. In this view, the term “right”, whether applied to

property, humanity in general or individual in particular, assumes a

special meaning and significance.2

2.1.3 Diverse Notions on Property

One of the initial problems faced by early thinkers was as to how

does a thing becomes a piece of property for the first time or how does the

2 John C. Becker and Timothy W. Kelsey, “Property Rights Interests and Perspectives

the Overview,” at http://extension.aers.psu.edu/pubs/proprightsoverview1.pdf.

22 Chapter II

transition from Hobbesian state of nature to the state of civil order in

terms of distribution of property rights occurred? The fundamental

equality concept developed by Locke leads to riots and vendetta as

everyone uses the executive power to enforce the law of nature in one’s

own favour (Chris Bertram 2004). David Friedman opines that

coordination without communication is possible when people act upon one

another on the basis of utility and interests. (David Friedman, 1994:4-14)

The legal system seems to agree with simple and unilateral private action

to give each thing an owner like occupation of land, capture of animals

etc. Thereafter rules of voluntary transfer are adopted by consensual

means. David Hume points out that property rights are set out by human

conventions and conventional classification of things find three categories

in Institute of Justinian. They are common property, state property and

private property. Private property attracted wide range of discussion and

debates as it is the area in which each individual person may engage in

voluntary actions to gain and transfer property rights. (Richard A. Epstein

1994: 32-34).

Pufendorf and Grotius derived the principle of fidelity to divide

earth. Thomas Hobbes relies on sovereign authority who makes law

creating private property. Locke argues that people have God given duty to

improve the earth and that private property is a necessary adjunct to this

task and to that of sustaining human life by mixing labour with what is

yours. (John Simmons 1994: 70-71) Locke favoured the appropriation of

private property as there is “enough and as good left in common for others”

which has been forgotten by his successors who use his argument to justify

all form of private property. (Christopher Saporita 2003: 266-269).

The liberal approach justified the institution of property on the

basis of natural right and utilitarian philosophy at the cost of injustice

existing in relation to the distribution of property and inequalities. On the

other hand, socialist considered property as means to end, subsumed by

the purposes of sharing social, economic and cultural rights.3 Pierre-

3 Tibor Machan, “Right to Private Property,” at

http//www.iep.utm.edu/p/property.htm#individuality.

Intellectual Property Rights and Social Development: A Framework 23

Joseph Proudhon in his essay “What is Property?” asserts that all

“Property is theft!”, and all proprietors are robbers and traitors. Marx saw

communism as the essence of the actual development of property

relations, while he recognised the demand for state property as necessarily

arising from the struggle against the iniquity of capitalism and looked

forward instead to a transcendence of private property, rather than its

abolition. (Andy Blunden 1999)

The Roman system of property law and modern legal system insist

on the absolute nature of individual dominium over particular assets, but

its actual operation recognised that both common and private property are

complementary parts of the total system. The inherent limitations of

private property and common property are exclusion and coordination

respectively. It seems difficulty to give importance to one over the other

as both systems may effectively work in certain situations but depends on

the nature of resource in question and technology that are available to

exploit it. Thus, no single regime properly will be good for all times and

all occasions. (Richard A. Epstein 1994: 20-23) The Industrial Revolution

expanded our ideas of property to include other forms of wealth such as

innovative ideas and productive techniques. This tendency widened

further by considering information and knowledge as property.

2.1.4 Historical Development of IPRs

Historically, the origin of IPR could be traced to the Industrial

Revolution and it has been an important driving force behind industrial growth

and development of capitalism since then. The IPRs from the very beginning

have not recognised the informal systems of innovation of artisans, farmers,

indigenous communities, etc. The idea of knowledge ownership was

unprecedented when the modern notion of patents and copyrights started to be

developed during the fifteenth century Venice. (May & Sell 2005) Inventions

were not considered as commodity and did not have market value in the

ancient world. Even amidst issues of theft and plagiarism, Roman and Greek

laws never protected intellectual property. From the late medieval period or

roughly from the early renaissance period onwards knowledge was considered

as a distinct concept of having an economic value. Guilds were the

24 Chapter II

frontrunners in regulating access to knowledge to protect their members’

power in the market economy. Thus, by attributing value to the skill,

separating itself from the product, guilds seemed to have encouraged the

abstraction of intellectual property. This tendency further strengthened during

the Renaissance, as genius individuals were considered as center of creative

process and granted ownership to the fruits of their minds. Marketplace

notions associated innovations with the individuals who supposedly originated

them and thus entitled them to enjoy their fruits. In the meantime, states

adopted the practice of securing rights and royalties to authors and inventors to

encourage innovations from within and abroad. Different states followed

different policies to encourage new innovations. For example, in France the

process of knowledge production was controlled by privilege, while in

England the application of knowledge itself was the key to success. (Ben-Atar

2004:1-2) The British Empire of the eighteenth century awarded patent

monopolies for a specified duration to inventors to promote innovation and

industrialisation. (Prager 1944:721)

2.1.5 Three historical stages of IPR

Western notion of IP has spread across the globe in three

successive stages as the territorial, the international, and the global

periods. (Peter Drahos 1996) In the territorial epoch, IPRs were strictly

under state government. The international period was characterised by

bilateral and multilateral agreements that endorsed mutual reciprocity in

the protection of IPRs. The third period starts with the TRIPS Agreement

marking a major transition from the national character of IP into a

globally regulated subject matter. The irony is that IP was considered a

subject within the jurisdiction of national governments with the powers to

determine the scope, nature, duration of protection. All of these powers

are now circumscribed under the TRIPS Agreement, states governments

have been made to implement it even discarding their national sentiments.

(Chidi Oguamanam 2004: 163-164)

2.1.6 Property Rights and Intellectual Property Rights (IPR)

Intellectual property represents a particular form of ownership. It

represents a property right in an intangible, abstract idea expressed in

Intellectual Property Rights and Social Development: A Framework 25

tangible form. Tangible qualities typically characterise the ownership of

physical property. What intellectual property has common with tangible

or physical property is the political significance of exclusion from

possession and enjoyment of real property that is virtually as palpable as

the property itself. An essential feature of property rights in general, is

the "right of exclusion." It is the power that "may be exercised to the

exclusion of all others, freely and without restrictions." An

understanding of organised and legitimate force shows a generalised

concept of property as socially and politically contingent category.

(Richards 2004: 26)

According Carol Rose (2005) "Property is one of the most

sociable institutions that human beings have created, depending as it

does on mutual forbearance and on the recognition of and respect for the

claims of others". And while property and intellectual property remain

distinct domains, there is in fact much that intellectual property can gain

from the social relations approach to property. The expansion of

intellectual property rights around the world, touching billions of diverse

people of all levels of economic and cultural development, brings

intellectual property's social effects to the foreground and begs for a

deeper analysis of how this law ought to accommodate its diverse

effects. The quest of traditional knowledge-holders for respect and

recognition of their cultural authorship, the claims of developing nations

for more equitable economic and social relations, and public concern for

the health of the poor require that intellectual property decision-makers

pay heed to the following lessons of the social relations theory of

property. (Carrier 2004)

However, a peculiar characteristic of intellectual creations, from

an ontological point of view, is "non-exclusivity." This means that

intellectual creations can be at many places at once and are not consumed

by their use. On the other hand, it is very different when the object of

ownership is a res, such as a parcel of land. The pure possession or use of

that parcel by one person prevents others from possessing or using it.

Land, like almost every other resource, is limited and thus, private

26 Chapter II

property rights are needed to "fence" the land in order to ensure peaceful

possession by the owners and to avoid the dreaded "tragedy of the

commons." (Richard Hardin 1968) Therefore, the state must step in and

protect the rights holder, giving him the power to prevent others from

using his creation, thereby making it artificially scarce. Indeed, without

the state's intervention the rights holder could do nothing to prevent

unauthorised use of his creation. (Vincenzo2005:157-158)

A clear example is the strong protection accorded to a patent

holder, who can rely on the strict liability that would occur whenever

someone uses (or sells, offers to sell, etc.) the inventor's device without

his or her permission. Such a strong defense against infringement is

almost unthinkable without state’s legislative and judicial intervention.

So there is a fundamental problem between economics and law in

finding out a solution for the scarcity of resources and their subsequent

cost. With IPRs the problem becomes as to how "to measure out" the

scarcity (i.e., the scope of the power of exclusion) between the owner

(the rights holder) and society (the community). The "scarcity" created

by the granting of IPRs is modulated by different constructs of property

rights, which inevitably affect the relation between the values at stake.

(Vincenzo 2005: 160)

2.1.7 Intellectual Property as Social Relations

Traditionally, real property rights have been considered perpetual

and unqualified; they do not automatically expire within a term of years

and, for the most part, they were thought to advance private interests in

autonomy, efficiency, and sovereignty, not public interests in community

and human rights. Intellectual property rights, on the other hand, were

foundationally understood as limited exclusive rights, and offered by the

state not to reward private persons but to promote the public interest in art

and science. Real property rights were conceptually absolute and private;

intellectual property rights were qualified and public-minded.

The last century, however, has seen a reversal in the fundamental

properties of these core legal rights. During this time, real property rights

have come to be understood not as absolute rights, but as a set of "social

Intellectual Property Rights and Social Development: A Framework 27

relations" among various actors that require limited rights so as to respect

competing private and public interests, including human rights and the

dignity of persons. But the scope and duration of intellectual property

rights, in contrast, have grown substantially, so that today many of these

rights have become virtually perpetual and unqualified. Furthermore,

society has moved far away from an understanding of intellectual property

as serving the public interest, toward a regime that conceptualises rights

almost exclusively as the private economic rights of creators and

concentrated in the hands of a few. (Michelman 1987: 1319-1329)

This conception of intellectual and property law is being

challenged. As a result, the Doha Declaration's assertion that intellectual

property rights serve human values, intellectual property is being re-

envisioned as limited by the property and personal rights of others, not

just by economic incentive theory alone. Despite laypersons' conceptions

of property law as individualistic, economic, and absolute, in fact, real

property law is today one of the most venerable, robust, and important

mechanisms for organising complex social life.

Property rights have social effects. As Joseph Singer (2001), a

leading social relations theorist, describes, modern property law

recognises that "owners do not live alone. Both ownership and the use of

property affect others for good and for ill." Property law's focus on social

effects goes beyond mere description to prescription, offering normative

justification for judges and legislators to take social effects into account

when creating, limiting, and distributing property rights. Property law

distributes rights in shared resources. The bundle of sticks metaphor helps

to imagine real property not as absolute but as a set of rights, sticks, that

can be shared.

Property rights balance incommensurable values. Modern property

law is founded upon a variety of normative theories from Lockean labour

theory to economic reasoning to theories of personhood. The goal in

recognising a variety of values is not to prioritise one over others, but to

maximise each value where possible. Property as social relations recognises

that unequal distributions of power and wealth enable some persons to

28 Chapter II

coerce others in property relations and inhibit them from realising the

multiple values that property rights should promote, from autonomy to

health and dignity. Social relations theory would rectify this imbalance,

prescribing rules that would maximise the ability of all persons to exercise

their property and personal rights. (Radin 1993: 15-16)

Munzer (2001:49), in his New Essays in the Legal and Political

Theory of Property, suggests that property rights structure social relations.

While an economic analysis of property tailors law to maximise

individual pleasure or welfare, a social relations analysis of property

seeks laws that structure better social relations, respecting the health and

dignity of all people. Property as social relations recognises that the state

actively structures certain social relations as it distributes and enforces

property rights.

Property rights mediate relations between the individual and

community. Jennifer Nedelsky (1990) has been similarly concerned that

property rights should neither isolate the individual nor reify the

community. Nedelsky and Radin sought for property rights to enable one

to constitute a stable, socially grounded, historicised, and autonomous self

in the world. Societies look for similar visions for intellectual property.

Madhavi Sunder (2006) considers that improved social relations,

measured by every individual's maximisation of numerous moral values,

from freedom to equality to health and efficiency, are not inevitable; they

require the attention and active promotion of law. We must attentively

design the legal and communications architecture in accordance with the

kinds of social relations society needs.

2.1.8 Foundation of International Legal System

The TRIPS Agreement enforced on the international community in

arbitrary and unilateral manner is enshrined in the liberal framework.

When property rights take new forms in the society, it is necessary to take

into account the interests and values shared by other approaches. Different

views are critical when "shaping" the scope and structure of property

rights, since the satisfaction of interests is the starting point for the

Intellectual Property Rights and Social Development: A Framework 29

process that leads to the "rule of law." (Dawkins & Vallianatos 1996: 431)

Different concepts of property exist in different legal systems as

well as in legal theory. For example, in some societies, property is

considered as a commodity whereas in others property is viewed in terms

of "social needs." Joseph Singer (1988) considers that when the power of

the owner is stressed in the construct of property rights, property rights are

deemed to become a "commodity". Conversely, emphasis on the social

aspect of ownership stresses the interests of society as a whole, as opposed

to those of the owner alone. Indeed, the idea and the content of the "rule of

law" are an outcome of the philosophical and political thought that

underpin any given society at any given time and space. Peter Drahos

(1996) analyses that since "law is politics," property rights are "shaped" and

interpreted according to liberal thought from the twentieth century to the

present.

Joseph Stiglitz (2002) view that the idea of property as a market

commodity is based on the belief that free individuals in a society will act

in a free market through contractual instruments in order to maximise

their interests. This is enshrined in the TRIPS agreement which is a neo-

liberal creed of "market fundamentalism." The dialectical relationship

between the two concepts of property rights pervades every level of the

debate about IPR.

Gathii (2001) opines that industrilalised regions, such as the

United States and Europe, "intellectual capital" has become both an

important asset to protect and a field of comparative advantage to

withhold. For that reason, the political construct of the TRIPS agreement

has been clearly embedded with western interests by defining IPRs only

in terms of their industrial and commercial application and needs.

In the TRIPS agreement, a public policy strand including human

rights concerns, environmentalism and public health stands in tension

with the commodity logic of IPRs. This tension, in the pre-TRIPS era,

was mitigated by international agreements that provided mechanisms

(such as rules requiring compulsory license) to strike a balance among the

competitive interests. With the adoption of the TRIPS agreement the

30 Chapter II

tension has dramatically increased between rights owners, interested in

maximising their profits, and the consumers of IPRs interested in

receiving a fair price and accessibility to products. (Gathii 2001:759)

The impact of property rights in knowledge is felt in areas where

the deployment of technology has particularly beneficial and perceptible

social benefits, such as health and agriculture. With the advent of

information technology and biotechnology scientific and academic

credentials have brought the question of property rights in a wider scientific,

commercial and consuming audience than preceding technologies. Both

technologies touch vital interests like freedom of speech and the sanctity of

life thereby introducing a more conscious ethical and political dimension to

the question of property rights.( Francis 2005: 294-295)

The notion of intellectual property is elastic enough to embrace all of

the intangible assets at stake, including raw genetic resources, advanced

agricultural and pharmaceutical research, and the ethnobiological knowledge

that often transforms a locally useful organism into a globally valued

application. Since property rights serve as a model for intellectual property

rights, then each political view will influence their construct and scope.

2.2. Theoretical Perspectives on Property Rights

2.2.1 The Classical notion of Property

The classical idea of property rights and ownership derived from

Roman law where the scope of property rights considered as the "absolute"

dominion. Even in the absolute dominion, social control of property rights is

concerned, ownership has never been absolute. That is to say, most

individualistic age of Rome, ownership had a social aspect, such as the

liability for the execution of a debt and the possibility of expropriation by the

public authority. (Martino: 1979)

Sir William Blackstone (1969) maintains that the function of private

property is to secure freedom and autonomy for individuals. He considers that

property rights are conceived as the "sole and despotic dominion which one

man claims and exercises over the external things of the world, in total

exclusion of the right of any other individual in the universe." According to

Intellectual Property Rights and Social Development: A Framework 31

this view, property links only the owner to the object and there is no

relationship with any other person. As the owner could do anything that he

wants with his property, the right to own property is an absolute right whereas

a relative right is "one which is incident to men as members of society and

standing in various relations to each other." Indeed, Blackstone's idea of

property is much more "absolute" than the one conceived by the Romans.

2.2.2 Realist Framework

Interestingly, by the turn of 19th

century, a shift occurred from the

person-thing conception of ownership to a social, or relational, conception

of ownership. By this time, the metaphor of property as a "bundle of

rights" was being used to describe ownership. In this new stream of

thought, ownership was considered as a complex set of legal relations in

which individuals are interdependent. Some degree of social interference

with one person's ownership interest was deemed inevitable, but the real

question was which interferences should be legally prohibited and which

should be permitted. But it depends strictly upon which policies a society

decides to promote at a given time. (Vincenzo 2005:163-164)

The individual side and the social side are the two important factors

in the institution of property. But the social side of property might be lost or

deteriorate if it were not enforced, especially in cultures whose ideologies

emphasised the individual aspect of property ownership. Because

individuals have incentives to maximise control over their own property,

they lack incentives to monitor the use of property interests that they share

in common with others. For each individual, the costs of policing the social

side of property greatly exceed the individual gains, so each individual

chooses to neglect the social side. As a result, aggregate social welfare

diminishes unless the state, as society's agent, acts to protect the social side.

At the international legal framework, however, the problem remains how to

promote this social side as there is no central government in the

international arena to act as a state and safeguard the social interest, how

can the social function be protected?( Alexander 1997: 366)

In the legal realist view, there is no right without duty and duty is

owed to the society as a whole. This new idea of property was ushered into

32 Chapter II

the legal framework by legal statutes and judicial decisions only with the

emergence of the "welfare state." Social welfare programs undermined the

"commodity conception." Various types of property, which were traditionally

regarded as market assets, came to be seen as serving other, non-market

functions. Moreover, the law began to protect the "noncommodified" aspects

of property arrangements. (Alexander 1997: 366).

2.2.3 Libertarian and Egalitarian Liberals

During the 1950s, Friedrich Von Hayek strongly opposed the

premise and consequences of the "new property." He opposed the whole

idea of welfare states and, generally, the intervention of the state in the

market. The state's core legitimate function is to facilitate individual

attempts to satisfy personal preferences, which will ordinarily occur

through market transactions. Property, then, must always be available as

market property, or commodity. In similar vein, Robert Nozick (1974)

argues that the primary task of the state is to secure individual property

rather than interfere with it. The result is a "market-oriented" idea, an

"ultra-minimum state." On the other hand, Egalitarian liberals like John

Rawls (1999) disagree with this view and consider: "government should

therefore assure each person, as a matter of right, a decent level of such

goods as education, income, housing, health care and the like."

2.2.4 Communitarian Liberals

The communitarians challenges one of the aspects endorsed by

egalitarian and libertarian liberals that "rights are prior to the good," that

is, the "neutrality" of the state. Communitarians maintain that justice

cannot be detached from any conception of the "good life," and that rights

depend for their justification on the moral importance of the ends they

serve. This is the central critique of the communitarians against the liberal's

creed of "neutrality" of the state. Since communitarians are sensitive to

emerging values and interests, and because they recognise the influence of

the good life in the lawmaking process, they can spur a "social-oriented

view" of the property that takes into account, inter alia, the demand for a

more equitable distribution of wealth and for, more generally, "non-

western" approaches. For example, IPRs in the international arena are

Intellectual Property Rights and Social Development: A Framework 33

tailored to enhance the interests of industrial exploitation of intellectual

capital by highlighting the role of the rights owner and underplaying the

role of other needs. The communitarian idea of property would take into

account those other needs, such as the nonindustrial uses of intellectual

property (e.g., like food security and conservation) and would be very

useful in counterbalancing the continuing trend in the expansion of IPRs.

(Vincenzo 2005:169)

2.2.5 The Public Domain Debate

For libertarian liberals, the state must avoid interfering with the private

rights of citizens and intellectual property rights because of their nature (i.e.,

non-excludable and non-rivalrous), require a strong intervention by the state.

In the same way, the contemporary "public domain" school of thought argues

for limiting the scope and the expansion of IPRs. It assumes that the public

domain must be protected against a "new enclosure movement." This

scholarship opposes the creation of strong IPRs because it believes that the

purpose of intellectual creation is to serve all humankind and it will be better

fulfilled by allowing intellectual creation to remain in the public domain.

James Boyle (2003) attempts to broaden the scope of the public domain.

This approach tries to reify the concept of public domain by shifting

attention away from the interest of the single subject to the common

interest of all subjects considered as a unit. To accomplish this, all

"scattered" interests must be fused into one single but shared interest, thus

creating a new concept of public domain. In this way Boyle, accords

conceptual autonomy to the social aspect of property and is able to "both

clarify and reshape perceptions of self-interest" in a way that can lead to a

new and more solidaristic idea of property right.

Both scholars, Chander & Sunder (2004) consider that the public

domain is now the cause célèbre among progressive intellectual property

and cyberlaw scholars, who extol the public domain as necessary for

sustaining innovation. But scholars obscure the distributional consequences

of the commons. They presume a landscape where every person can reap

the riches found in the commons. The belief that a resource is open to all by

force of law, it will indeed be equally exploited by all. But in practice,

34 Chapter II

differing circumstances render some better able than others to exploit a

commons including knowledge, wealth, power, access, and ability.

Just as recognition of the tragedy of the commons is the central

justification for private property, recognising the romance of the

commons may justify forms of property uncommon in Western legal

traditions. The tragedy of overuse or the related tragedy of underuse

dominates the law's attention. Law presumes that producing efficiency is

"the problem of the commons" as they fail to establish efficient use in the

face of the tragic commons and the anticommons. (Hardin 2002: 119)

The TRIPS Agreement transformed a global public domain in

information by propertising the information resources of the West but

leaving in the commons the information resources of the rest of the world,

such as genetic resources and traditional knowledge. (Chander & Sunder

2004: 1332) Central to most definitions of the public domain is the notion

that resources therein are available broadly for access and use. Just as

property consists in a varying bundle of rights revolving around a central

right to exclude, the public domain consists in a varying bundle of rights

revolving around the right to access and use. As James Boyle (2003)

succinctly asks, "Who needs a public domain if you can create out of

nothing?" Jessica Litman (1990) countered such argument by stating the

public domain as essential for the process of creation and ultimately,

propertisation.

The new mantra of the movement exposed private property and the

public domain as two sides of the same coin: innovation captured as

private property depends upon the existence of a rich public domain.

Taking up the utilitarian banner, intellectual property scholars argued that

"innovation can suffer both from leaving too little and too much in the

public domain." Too many intellectual property rights raise the cost of

access to some resource and can create "choke points" on innovation.

James Boyle (2003) has defined the public domain as "the material that is

free for all to use and to build upon." So the necessity of public domain as

a key to efficient economic growth becomes true.

Intellectual Property Rights and Social Development: A Framework 35

In biotechnology, this reliance on the commons for building

blocks of intellectual property is so standard that it even has a name: "bio-

prospecting." Naturally occurring chemicals and compounds, genetic

information in local flora and fauna, traditional medicines, and folklore

may serve as the foundation for technological and cultural advances,

especially in pharmacology, agriculture, etc. Thus, the developing world's

efforts to claim proprietary interests in traditional knowledge and genetic

resources has, predictably, sparked resistance from corporations that wish

to commercialise them at little or no cost. Advocates for the public

domain, with their preference for free information, join hands with the

corporations to keep traditional knowledge and genetic resource in the

global commons. (Chander & Sunder 2004: 1337)

The literature in this regard elucidate the pros and cons of the

perils of the propertisation and evils of common by emphasising on utility

and liberty values but incomprehensible importance of equality values.

The public domain movements care about the dispossessed and remind us

that the movement to privatise the commons generally involved breaking

down a more communal social order and concentrating wealth in the

hands of the powerful. This conception fails to acknowledge disparities in

the ability of individuals to exercise their freedoms.

It turns out a new world hierarchy, one that separates those nations

and regions that are bioliterate from those that are bio-illiterate. This is

the world of DNA space, populated by a self-selecting few who have

chosen to participate in the new bio or nano-technology revolution where

have the ability to produce, read, or translate DNA. This means that even

as biodata begins to drive industries from agribusiness to computing,

cosmetics to chemical manufacturing, few nations have the skills required

to develop, access, and use it. (Martinez et al., 2003: 160)

2.2.6 Dialectical relationship between the Public Domain and

Intellectual Property

The binary rhetoric of intellectual property versus the public domain

masks the ways in which the commons often functions more in the interests

36 Chapter II

of traditional property owners than in the interests of commoners. So there is

a dialectical relationship between the public domain and intellectual

property. Intellectual property flourishes from the public domain, and the

public domain grows as information passes, over time, out of intellectual

property. So the current understanding of the public domain as "the opposite

of property" is deceptive.

In fact, the public domain is essential to private property system

because it offers a sphere of free works upon which capitalists can draw

without either seeking consent or drawing liability. The Lockean labour

theory of property starts with the proposition that "every man has a property

in his own person," from which it follows that "the labour of his body, and

the work of his hands . . . are properly his." (Chander & Sunder 2004:1344)

In the seventeenth and eighteenth centuries patent monopoly system as an

award was justified by natural rights and utilitarian arguments. Natural rights

philosophers argued that man’s right to property is inalienable and that he is

entitled to the wealth created by his labour. John Locke (1690), in his Two

Treatises of Government, argues “every man has a Property in his own

Person. This no Body has any right but himself. The labour of his Body, and

the work of his Hands, we may say, are properly his. Whatsoever then he

removes out of the State that Nature hath provided, and left it in, he hath

mixed his Labour with, and joined to it something that is his own, and

thereby makes it his Property,”. According to the arguments of Locke,

inventions are a form of property and all individuals are entitled to benefit

from the fruits of their labours. So it is the duty of the society to protect

intellectual property on the similar legal framework of physical property.

Thus, granting rights to authors and inventors over their intellectual property

is a just extension of their natural rights to the labour that created the value.

Patent system provides an inherent tension between capitalism’s

commitment to a free market and the countercompetitive nature of

monopolies. Natural rights arguments bridge this tension as society is

obliged to reward inventors for their labour only in proportion to its value. So

there is an informal perception across the borders to provide limited

monopoly to useful inventions. But extension of natural rights arguments for

Intellectual Property Rights and Social Development: A Framework 37

the protection of physical property and intellectual property i.e., knowledge

on a similar platform is problematic on three grounds. First of all, the use of a

physical property excludes others from its use whereas knowledge is

pervasive in nature so the inventor can still use his invention when others

duplicate it. Secondly, exclusion and monopoly right over physical property

is absolute in nature, on the other hand, intellectual property rights provide

only limited monopoly for a specific duration. Finally, the value of

intellectual property is not confined by international boundaries but each

state is compelled to protect the intellectual property rights of other countries

within its jurisdiction and must consider imitation as theft. As natural rights

property is embodied in the individual himself, he may carry the patent

monopoly with him as he moves between locations. (Ben-Atar 2004:4-5)

According to Locke, a person who labours upon resources that are

either unowned or "held in common" has a natural property right to the fruits

of his or her efforts--and the state has a duty to respect and enforce that natural

right. Locke's labour theory of property depends upon the existence of a

commons or public domain of resources from which individuals can freely

take and appropriate.(Waldron 1993: 841) The Hegelian "personality," or

"will," theory is similarly premised upon the existence of a public domain.

According to Hegel, everything is in the public domain until an individual

endeavors to put her "will" into an object and asserts ownership over it. In

The Philosophy of Right, Hegel (1967) asserts "the absolute right of

appropriation which man has over all 'things."' For Hegel, possession or

occupancy is the basis of property rights. But possession is not physical as

much as metaphysical--the important issue is whether one's will has possessed

the external object. Possession satisfies man's "natural need, impulse, and

caprice" to make something his own. Thus, a thriving commons is

instrumental for Hegel, serving as a symbiote of private property. (Rose 1985).

James Boyle (2003) argues that "It is a mistake to suppose that the

public domain and private property are independent realms. Instead, the two

are intimately intertwined, both historically and economically." Progressive

scholars' explain their sanguine portrayal of the public domain to the

assumption that any commons is inefficient, if not tragic". In Michael

38 Chapter II

Brown’s Who Owns Native Culture? (2003) highlight the discourse in

incentives suggests that folklore and traditional knowledge must remain in

the public domain. Intellectual property rights make creation too expensive

and create "choke points" on innovation--can be voiced by Big Pharma and

multinational agricultural enterprises against proposed property rights in

traditional knowledge and genetic resources: added costs may dissuade

discoveries that help people. New claims for property rights in traditional

knowledge and genetic resources are also dismissed based on liberty

grounds: property in ideas, stories, and naturally occurring flora and fauna

conflict with firmly embedded notions of free speech and access. Finally, the

intellectual property versus public domain binary elides the promise of

hybrid property or commons forms, what we call "uncommon property".

From the current structural relationship between intellectual property

and the public domain emphasis that they are made for each other as the

public domain often functions in service of property, not in opposition to it.

TRIPS establishes both Western property rights and the right of foreigners to

own property. To establish a property regime, TRIPS requires substantial

standards of protection for intellectual property in all member states. To

enable foreign ownership, TRIPS imposes national treatment obligations,

requiring states to treat foreigners as equals of their own citizens. This

cocktail of robust private property rights and foreign access thereto is leading

to a steady transfer of the "ownership" of intellectual "products" from the

developing world to the developed world.(Reichman 1995:345)

2.3. Structural Dimensions of Global Power

2.3.1 Hierarchies of Culture and Power

Olufunmilayo Arewa, an scholar, in his unpublished manuscript on

Piracy, Bio-piracy and Borrowing: Culture, Cultural Heritage and the

Globalisation of Intellectual Property suggests that the global power

relationships evident at the negotiating table in the international trade and

other international arenas reflect longstanding global power hierarchies. Such

hierarchies are in large part a consequence of historical patterns of

relationships, particularly hierarchies of culture and power. A relative

ranking of cultures became predominant in the nineteenth century assuming

Intellectual Property Rights and Social Development: A Framework 39

that all societies moved through an identical progression from "savagery" to

"civilisation" and European countries represented "civilisation". Current

Third World countries are ranked on the lower ladder by those at the top.

These hierarchies of culture are important for both global power

relationships and the development of global intellectual property standards.

Such hierarchies became a justification for political domination and

suppression. Those who lived in cultures that were deemed less advanced

were often denied the opportunity to participate in the negotiation of accords

and agreements that directly concerned them. Local communities in such

areas of the world were largely denied any opportunity to participate in the

decision-making process.

Cultural hierarchies also played an important role in the type of

knowledge that came to be protected under global intellectual property

standards. As a result of the evolutionary assumptions about the development

of cultural systems and the existing dynamics of global power relationships,

emerging global intellectual property frameworks largely did not protect

local knowledge. Local knowledge that did find protection in existing

national intellectual property systems and eventually in global frameworks as

well was geographical indications, which is notable because such

frameworks protected types of knowledge that existed in Europe. The

addition of geographical indications provisions to TRIPS, thus, reflects the

experience of national and international lawmaking and the vigorous

advocacy of such protection by the European Union during the adoption of

TRIPS. (Lindquist 1999: 314-315)

Certain types of local knowledge such as folklore were not protected

within existing intellectual property frameworks in the nineteenth and early

twentieth centuries. After the lack of protection of folklore was raised by the

Indian delegation at the 1967 conference, the Berne Convention was amended

in 1971 to include folklore in the enumeration of literary and artistic works.

Nineteenth century hierarchies, thus, played an important role in determining

who participated in decisions about intellectual property and in shaping what

was deemed protectable under emerging global standards. The TRIPS

Agreement echoes this treatment of local knowledge. (Arewa 2006: 160-164)

40 Chapter II

2.3.2 Knowledge Systems of World

Knowledge systems by definition are evolutionary in nature.

Unfortunately, given asymmetry of power and resources, certain kinds

of creativity tend to get much greater institutional attention and support

than other kind of creativity. The dialogue between institutional

scientists and the local knowledge experts can take place through

several channels and cultural processes. One can take the local

knowledge out of its institutional context and test it in modern

laboratories and develop value added products. These products can be

protected through the application of modern intellectual property rights

systems, wealth can be generated and shared among various

stakeholders in an equitable manner.

One challenge, which has been under appreciated in the studies

on indigenous knowledge, is the overlap between private, community

and public domain of knowledge. Transition from one to another or

blend of one with another generates complex obligations on the part of

outsiders who wish to access this knowledge and then share the

benefits. The property rights on the resources vis-à-vis the property

rights on the knowledge can even further complicate the knowledge

context. A community may have a knowledge about a particular

resource use but the ability or the skill to practice it and tailor it to the

specific conditions may not exist equally well among all the

community members.

Reductionism is considered as the only way the expertise or

extraordinary skill evolves in an individual for solving a particular set

of problems. Markets obviously pay more to attention to such things

and people that have value. Such an understanding will lead to the loss

of lot of local minor crops, varieties, old animal breeds, indigenous

tree species will be lost because the contemporary market cannot

generate incentives for their conservation. The right of the future

generation to these biodiverse resources, some of which may have

extraordinary medicinal or other properties has to be recognised. The

Intellectual Property Rights and Social Development: A Framework 41

state, market, civil society organisations and individual activists may

not always coordinate their interests and intentions.4

The contribution of knowledge as a factor of production is being

increasingly given central importance in economic development. The

management of knowledge not just in farms and firms but also in non-farm

sector will become very crucial in coming years. The debate on the relevance

and appropriateness of the conventional IPR regime for Plant varieties,

products based on knowledge of local communities and individual informal

experts and use of local biodiversity even without use of associated knowledge

systems has become an issue.

The rate of knowledge erosion has increased in the post independent

societies. Obviously, there must be endogenous reasons which are responsible

for the erosion of knowledge as well as biodiversity. It is certain that blending

of indigenous/local knowledge with institutional knowledge, science and

technology can unleash tremendous creative power inherent in human

ingenuity (Anil K Gupta 2005).

2.3.3 Structural Dimensions and International Free Trade

A deep structural impetus for economic globalisation and liberalisation

emerged from the increasing mobility of capital. Capital mobility and the

ideological shift toward a radical free market agenda served to enhance the

power of global corporations and particularly those engaged in knowledge-

intensive processes and production. In effect, these structural and ideational

factors delivered these corporations to the forefront of global business

regulation. The growth of offshore capital markets, the removal of capital

controls, financial deregulation, and the cross-border integration of capital

markets has created "an explosion in the availability of private liquidity which

governments are hard pressed to control." As a consequence, transnational

corporations in knowledge-intensive sectors such as computers, software, and

pharmaceuticals "have the resources, motivations and capabilities to roam the

world searching for the kind of opportunities which promise lucrative

4 Anil K Gupta, “Indigenous knowledge: Ways of knowing, feeling and doing,” at

http://www.sristi.org/CONF.PAPERS%201979-2003/indegenous%20knowledge%20-

% 20ways% 20of%20knowing,% 20feeling%20and%20doing.doc

42 Chapter II

rewards." These corporations have become increasingly influential in

policymaking in the United States because of their positive trade balances and

their contribution to the state's competitiveness goals. Now, "the private

interests of the market are integrated into the state, asymmetrically in

accordance with their structural power and organisational capacity, through

their close relationship to state institutions in the policy decision-making

process. . ." (Susan K 2004:369).

Towards an Effective IP Policy-making Process

Source: David Vivas-Eugui and Christophe Bellmann (2004): “Towards development

Oriented Technical Assistance in Intellectual Property Policymaking,” Paper prepared

for "Reflections on IPR Technical Assistance to Developing Countries & Transition

Economies" workshop 15-17 September 2004, Burnham Beeches, UK.

Intellectual Property Rights and Social Development: A Framework 43

The WTO and GATT advocate global free trade which is based on

the presumed benefits of international trade for all parties involved in free

trade. Such presumed benefits derive from the theoretical underpinnings

of international trade theory that delineate the benefits of free trade and

the elimination of trade barriers. During the post-war era, the GATT

system was associated with unprecedented prosperity, albeit with

progressively increasing complexity and accompanying problems. By the

post-independence era, Third World countries had begun to be added to

this existing system, which magnified existing problems in the GATT

system. (Thomure, Jr.1995: 188-189)

Although economic theory suggests that free trade yields benefits

in certain instances, the reality of the implementation of free trade in the

global arena may not always yield such benefits for all involved parties.

This is at least partly a consequence of the fact that international trade

accords are negotiated and implemented in a real world of power

asymmetries and webs of history and culture that often condition the

assumptions and relationships of participants in such negotiations. In

addition, relative competitive advantage, including scientific, technological,

and institutional capacity, can play an important role in determining the

beneficiaries of a particular global intellectual property framework or

bilateral or regional agreements within such a framework. As a result, the

negotiation and implementation of agreements such as TRIPS cannot be

understood without assessing the relative position of the parties at the

negotiating table. In addition, strategic positioning and trade-offs that are

part of the negotiation and implementation processes also influence the

outcome. (Helfer 2004)

Technological innovations are essential for human progress. These

innovations have driven social and economic development over the

centuries. Underlying narratives of appropriation is yet another

asymmetry: relative scientific, technological, and institutional capacity

between North and South. Although not a homogenous group, an

immense technological disparity exists between North and South.

Consequently, many countries in the South do not have extensive internal

44 Chapter II

technological and scientific capacity to enable them to transform local

knowledge into knowledge that might be protected under current

intellectual property frameworks. Without the establishment of structures

within current global intellectual property frameworks intended to help

the development of such capacity, TRIPS has the potential to exacerbate

existing disparities in technological and scientific capacity. This is partly

a result of the relative inflexibility of TRIPS for Third World countries. In

addition, the existence of technological and scientific disparities means

that some countries in the South are less likely to experience the benefits

that are supposed to accompany free trade in the intellectual property

arena. (Arewa 2006: 168-169)

2.4. Intellectual Property Rights and Development

2.4.1. Distributional Problem and Intellectual Property

It is increasingly evident that utilitarianism fails as a

comprehensive theory of intellectual property, either descriptively or

prescriptively. Intellectual property theorists begin with the "utilitarian"

goal of maximising creative output. Because information is assumed by

its nature to be non-rivalrous and non-excludable, free-riding will

eliminate any incentives to produce information. State-granted property

rights in information create the excludability necessary to incentivise

production. Indeed, market failure is cited as the raison d'être for

intellectual property, explaining copyright, patent, and even trademark.

(Landes & Posner: 37-70) A central feature of this account is its focus on

the market as the vehicle for solving distributional problems. Willingness

to pay determines access to the fruits of this information regime. After the

property right is established, the government's role is limited to protecting

that property right--and also to intervene in cases of further market

failures, such as in the case of fair use in copyright.

There are three drawbacks to intellectual property utilitarianism:

(1) it fails descriptively to capture fully the dynamics of cultural creation

and circulation; (2) it fails descriptively as a comprehensive account of

extant legal doctrine; and (3) it fails prescriptively as an account for

deciding the important intellectual property conflicts of the day.(Sunder

Intellectual Property Rights and Social Development: A Framework 45

2006:284) Prescriptively, there is no way of judging which specific types

of utility i.e., public health? rank high, and which cultural productivity?

rank low. The modern law and economics approach would rely upon the

market to spur creation but this leads to the mistake that drugs for

baldness are more important than drugs for malaria because the former

enjoys a multi-billion dollar market, while those who need the latter are

too poor to offer much to save their own lives. Understanding intellectual

property as incentive to create reduces to the claim that the ability to pay,

as evidenced in the marketplace, should determine the production of

knowledge and culture. (Robert Nozick1974)

Utilitarianism's central failure, of course, is its neglect of

distribution. At times, utility in the intellectual property context is defined

simply as the maximisation of creative output. A utilitarian calculus that

presumes overall welfare in the aggregate "doesn't tell us where the top

and the bottom are”. In Nussbaum's (2000) words, "aggregate data aren't

enough for a normative assessment" of how we are doing. We "need to

know how each one is doing, considering each as a separate life."

2.4.2 Growth Theories and Development

Developments in the research and policy-making communities

have stimulated renewed interest in the links between protection of

intellectual property and economic growth. With regard to the former, the

emphasis that new growth theory places the role of technological progress

in the growth process, with research and development (R&D) being

undertaken either to improve existing products or develop new ones, has

stimulated extensive academic research. In the global economy,

individual countries acquire improved technologies through a variety of

channels, both direct and indirectly via spillovers. These channels include

innovation, licensing, trade, foreign direct investment, imitation and

piracy. Since stronger IPR protection has different and sometimes

opposing influences on the flow of technology through these channels, the

overall effects of stronger IPRs on technology acquisition and aggregate

growth are in general ambiguous. The impact of stronger IPR protection

is likely to vary across countries depending on their levels of

46 Chapter II

development, as reflected in their capacities to innovate and imitate.

(Foster & Greenaway 2004:1)

The role of technology in the growth of an economy is analysed by

the endogenous and exogenous growth theory. From the endogenous

perspective, technological change is induced by previous economic

conditions and focuses development on the development of new

technology for the world market, which determines the growth of a

nation-state. According to the exogenous growth theory, technological

changes contribute to increased output without any change to the input

and capital in the production processes.

A well-known, academician, Joseph Schumpeter developed a

growth theory centered on innovation and entrepreneurship. He saw a

dynamic economy not as one in equilibrium, but rather, as one that is

constantly disrupted by technological innovation. Although agreeing that

several factors were necessary for economic development, Schumpeter

regarded entrepreneurial zeal for profit as the driving force of most

innovation. Schumpeter considered that some degree of monopoly power

would be necessary to enable entrepreneurs to continue innovating.

However, he later predicted the demise of entrepreneurs and the

emergence of a new mode of economic organisation in which innovation

and R&D would be conducted by large firms.

In the 1950s, the neoclassical economists, led by Robert Solow,

started focusing on technological progress as an important variable in

economic growth. Solow introduced technological improvements as an

exogenous variable into his growth model and changed the way economists

perceived the contribution of technological progress in the economic growth

of a nation-state. Solow focuses on four variables: out-put, capital, labour,

and knowledge. It analyses how capital, labor and knowledge combine to

produce output, the level of which can determine the growth of an economy

over a period of time. He assumes that technological progress occurs when

there is an increase in the amount of knowledge, and that the production

function constantly returns to scale in relation to capital and effective labour.

Intellectual Property Rights and Social Development: A Framework 47

In the 1980s, new growth theories, also known as new endogenous

growth theories, emerged, formulating technological progress as an

endogenous variable, which could be influenced by government policy.

Paul Romer introduced a model which suggested that the accumulation of

knowledge was the driving force behind economic growth. In order to

encourage people or institutions to be involved in knowledge creation, the

principle of excludability had to be invoked. He argued that two ways can

be used to exclude others: first, keeping the knowledge a secret and second,

invoking effective intellectual property laws. (Romer 1990: 807-827)

The two factors that influenced the economic development of

some countries in 1990s are policy changes emerging from rapid

knowledge creation and the adoption of new knowledge management

practices and, second, changes due to the emergence of new technologies.

The new pattern of global trade started by forging of a deliberate

connection between trade law and IP policies when some advanced

countries began to “use trade measures to curb piracy of intellectual

property rights abroad.” Among other things, this led to the inclusion of

the TRIPS Agreement as one of the agreements in the framework of the

multilateral trade negotiations under the Uruguay Round. That Agreement

established global standards for IP protection that would be binding on

both developed and developing countries, including enforcement and

border measures. The rapid development of new technologies has led to

adaptation to, prevailing IP regimes.5

2.4.3 Different factors that influence Growth and Development

The plea for increased role for IPR protection arises because

intellectual property displays many of the characteristics of a public good.

It is typically non-rival and can be non-excludable. In the extreme, these

characteristics could remove the incentive to invest in R&D, and IPRs

protection can therefore restore that incentive. (Maskus 2000: 471-506)

The importance of R&D and innovation has been emphasised by new growth

theory. In these models, entrepreneurs invest in R&D in the expectation of

5 Kamil Idris, “Intellectual Property –A Power Tool for Economic Growth”, WIPO at

http://www.wipo.int/about-wipo/en/dgo/wipo_pub_888/pdf/wipo_pub_888_cover.pdf

48 Chapter II

profiting from their inventions. In addition to new products, innovation adds to

a public stock of knowledge which lowers the cost of future innovation.

Besides rewarding innovation, IPRs protection stimulates the acquisition and

dissemination of knowledge, since the information in patent claims is then

available to other potential inventors. The rate of growth depends upon the rate

of innovation and the stock of knowledge. Strong IPRs protection need not

always yield higher innovation and growth. Giving innovators too much

protection may limit the spread of new ideas and lead to monopoly. Entry by

rivals may be impeded, and successful innovators may have reduced

incentives for developing and exploiting subsequent innovations. (Gilbert

& Newey 1982: 514-526)

In practise, R&D and innovation are heavily concentrated in a

small number of advanced countries, when most developing countries

undertake little or none. But imitation can be a significant source of

technological development in the latter. In this case, providing stronger

IPR protection to foreign firms could cripple domestic industries

previously relying on pirated technologies. In effect, a stronger regime

would act to transfer profits to firms outside the country rather than

encouraging domestic innovative activity, (Deardoff 1992: 33-51)

particularly in relatively closed economies where few domestic

alternatives to the imported product are available. One should not

overstate the case however, since IPR protection could help reward

creativity and risk-taking even in developing economies, with countries

that retain weak IPR protection remaining dependent on dynamically

inefficient firms that rely on counterfeiting and imitation.(Maskus 2000:

471-506)

The strength of IPR protection may also impact upon the levels of

trade, inward foreign investment and technology licensing, all of which

affect productivity and output growth through technology transfer.

Maskus and Penubarti argue that IPR protection has an indeterminate

effect on trade. While firms should be encouraged to export their patented

goods into foreign markets with strong IPRs protection, since such

protection reduces the risk of imitation or piracy, they may choose to

Intellectual Property Rights and Social Development: A Framework 49

reduce their export sales in a foreign market in response to stronger IPRs

protection, because their market power increases as the ability of local

rivals to imitate the firm’s product is curtailed.( Maskus & Penurbarti

1995: 227-248) Mansfield (1995) opines that there is no clear-cut

relationship between IPR protection and inward FDI. Strong protection

reduces the risks of technology leakage through armslength technology

licensing, thus reducing the need for FDI. But, as Smith argues, weak IPR

regimes tend to affect the investment climate adversely, thus discouraging

FDI. While theory highlights the potential importance of IPR protection

for innovation and growth in the global economy, it also suggests that

there could be important differences in the relationship between IPR

protection and growth across countries, depending inter alia, on their

capabilities for innovation and imitation.

From the Rights perspective on development, it has been argued

that provisions in the TRIPS run counter to the letter and spirit of various

conventions and declarations adopted under auspicious of various

specialised agencies of the United Nations. The classic illustration is the

mismatch between the provisions of the UN declaration on the Right to

Development (RTD) and provisions in the TRIPS Agreement. (Raju

Thadikkaran 2006) The institutionalisation of IPR under dominant

paradigms of thought undermines the social development of all

developing societies and indigenous societies in particular. In this context

following session shall examine, how the major schools of thought on

development places Biodiversity Associated Traditional Knowledge and

indigenous communities of developing countries in the public domain.

2.5. Different Schools of thought on Development

2.5.1 Pluralist view on Development

Pluralist scholars articulate more pluralistic norms for the

determination of global social welfare in the intellectual property context.

According to Helfer, NGOs, CSOs, intergovernmental organisations

(IGOs) and other non-state actors have entered into the intellectual

property norm-generating fray and influenced policy-making outcomes.

Because of their ability to shift from intellectual property rule-making

50 Chapter II

venues to human rights and other venues, developing countries are not as

handicapped by the rules of the intellectual property game, and can use

regime-shifting to their strategic advantage. Implicitly, this is a positive

development, particularly since the core institutions of intellectual

property globalisation such as the WTO and WIPO are resistant to the

concerns of developing countries. Underlying this analysis is an

assumption that institutions such as human rights organisations and public

health agencies have the wherewithal to "correct" the excesses of

development caused by the over-extension of intellectual property norms.

These commentators tend to view TRIPS as allowing developing countries

sufficient policy space to participate in a framework that has moved

decisively beyond sovereign calculations of social welfare. (Braithwaite &

Drahos 2000: 571)

2.5.2 Skeptical Views on Development

Skeptical approaches towards development are characterised by

their emphasis on the enduring nature of power differentials among

nation-states, as well as attention to forms of resistance to these

differentials. They view the neo-liberal development paradigm as based

on a toxic "catching-up" rationale, which immediately marks certain

countries as inferior because they are "less developed," while masking the

oppressive activities of "more developed" countries as benign providers of

technical assistance.(Rajagopal 2003:13-16)

In contrast to the neo-liberal approach, which views laws as

neutral rules of the development game, skeptical approaches tend to view

laws generally as instruments of domination, creating legal norms and

standards that are predictably and one-sidedly in favor of the developed

countries. International law has played an important justifying role in the

evolution of neo-liberal development ideology and, conversely,

development ideology has contributed to the expansion of international

law. (Bedjaoui 1979:76)

From a skeptical perspective, neo-liberal legal scholarship often

over-relies on human rights as the primary accepted remedy to the

massive political, cultural, and social problems engendered by

Intellectual Property Rights and Social Development: A Framework 51

development. Indeed, the human rights response to development

encourages the continued compartmentalisation of development, ruled by

economic thinking, from any non-economic concerns. Similarly, calls for

increased democratisation and participation are viewed cynically, as

mechanisms that appeal to political ideals while maintaining material

status quo. Although the "right to development," declared by the U.N.

General Assembly in 1986, has the potential to collapse the boundary

between economic and non-economic development boxes, it has not yet

been a robust source of legal change.(Rajagopal 2003:219-22)

The insistence by developing countries to include the term

"development" in the TRIPS agreement can be seen as part of a

"turnaround is fair play" proactive legal strategy. TRIPS imposed what

many suspected were inappropriately high minimum standards of

intellectual property protection upon developing countries and thus set the

stage for enduring structural inequity.( Susan Sell 2003: 165)

Yet, when developing countries attempted to invoke these

potentially ameliorative provisions in TRIPS, in justifying their enactment

of domestic "flexibilities", they have been met with strong-arm tactics

from countries such as the U.S. with substantial pharmaceutical patent

industries. Moreover, invoking section 301 of Trade and Competitiveness

Act, as well as the negotiation of so-called TRIPS-plus and other bilateral

or regional agreements, the U.S. is currently by-passing the minimum

standards and the negotiated transition periods for developing countries

under TRIPS Articles 65 and 66, which were to allow developing

countries more time for compliance. Even laws designed as concessions

to developing countries, such as the technical assistance provisions of

TRIPS, rarely work to the advantage of these countries. The same is true

of the compulsory licensing provisions, such as the Appendix to the Berne

Agreement, because it was forged in the context of an over-determined

relationship between the developed countries and their former colonies.

From a perspective skeptical of development, this simply illustrates a

truism that law is always embedded in institutions that operate politically

in favor of the more powerful. Neo-liberal proposals about democratic

52 Chapter II

participation in decision-making are yet another masked rhetorical game

of enforcing the unequal conditions of development. (Koepsel 2004: 167)

The whole debate has been placed by Drahos, "underneath the

development ideology of intellectual property there lies an agenda of

underdevelopment. It is all about protecting the knowledge and skills of the

leaders of the pack." (Drahos & Braithwaite 2002:12) Neo-liberal views

maintain that growth necessarily results in an increase in overall social

welfare and thus are not so concerned with distributional consequences.

Alternatively, social concerns are incorporated into the neo-liberal

framework only to the extent that they also demonstrably contribute to

economic growth. While the skeptical views contain some strains that reject

economic growth as the measure of development, it is safe to assume that

the developing country members of the WTO do view economic growth as

a primary vehicle of development. The question for them, however, is to

what extent economic growth should function as the sole measure of

healthy development. There is convergence between the two frameworks,

with some neo-liberal institutions advocating "market-centered agendas for

social justice" or "pro-poor growth agendas." (Obiora 1996: 364)

Skeptical scholars like Peter Drahos tend to articulate the need for

a new substantive norm in the context of intellectual property

globalisation. Given the uncertain benefits of minimum standards of

intellectual property for many developing countries, one might question

why these countries acceded to it. While TRIPS was presented as a win-

win solution to developing countries via linkage bargaining, "most

importer nations did not have a clear understanding of their own interests

and were not in the room when the important technical details were

settled." They vastly over-estimated the benefit that would accrue to their

own domestic intellectual property holders. (Peter Drahos & Braithwaite

2002:11-12)

Another area of intellectual property's application to development

is in the area of traditional knowledge. Chander and Sunder have turned

orthodoxy on its head by suggesting that progressive intellectual property

scholars have over-romanticised the public domain precisely at the time

Intellectual Property Rights and Social Development: A Framework 53

when groups of people who have been historically disempowered have the

potential to claim rights to exclude. The distributional consequences of

open access are not being critically analysed by scholars who take their

entitlement to rights for granted. Chander and Sunder provocatively

highlight the submerged distributional question in intellectual property by

calling into question the standard liberal assumption that the public

domain always serves distributionally positive purposes. (Rose Mary

Coombe 2003: 1171)

2.5.3 The Contemporary Concepts of Development

When Neo-liberal perspective emphasises economic growth and

efficiency, skeptical school pays more attention to distributional consequences

of growth. Development has always been one of the fundamental criteria by

which nations and peoples are defined. The contemporary concept of

development has a quite short history. Notions of progress and growth have

been part of Western discourse for well over a hundred years and, more

generally, since the Enlightenment. "Development" as it is currently

construed (i.e., modernisation and national economic growth), however, is

essentially a post-World War II phenomenon. (Gordon & Sylvester 2004: 2)

But as Richard Peet and Elaine Hartwick explain, "development

differs from economic growth in that it pays attention to the conditions of

production, for example, the environments affected by economic activity,

and to the social consequences, for example, income distribution and

human welfare." The post-developmental school, the one that has rejected

development entirely, insists that "development is, above all, a way of

thinking."(Peet & Hartwick 1999:7)

2.5.4 The Neo-liberal Approach to Development

Most of the development perspectives derives primarily from

economic theory. The flavor has changed over time from a Keynesian

approach that unashamedly approved of state intervention to the current

model, based on neoclassical economics and known alternatively as neo-

liberalism or the Washington consensus. These disparate economic

approaches are denoted here as neo-liberal to highlight that the "neo"

54 Chapter II

aspect is a relatively recent gloss on what is primarily a "liberal" aspect:

"'liberal' in the classical sense of . . . reliance on markets and the price

mechanism, 'liberal' in the contemporary sense of concern for victims, but

'neo' in the sense that suffering was accepted as an inevitable consequence

of reform and efficiency." Because many otherwise liberal development

specialists are increasingly uncomfortable with the costs borne by

developing countries and their inhabitants under the neo-liberal vision.

(Joseph Stiglitz 2004: 22)

According to the neo-liberal world view, the development system

basically works, with some minor adjustments needed as problems arise.

To remedy politically unacceptable differences among the developing and

developed countries, policymakers need just add a little more "equality"

and stir. One underlying assumption is that short term costs of free trade

will result in long term gains by pushing countries into greater economic

growth.(Rittich 2004:202-203)

Neo-liberalism is characterised by certain policy recommendations,

including, among other things, trade liberalisation, foreign direct investment,

and property rights. In the intellectual property world, this neo-liberal

emphasis on property rights resonates very deeply with the dominant

rationale for exclusive rights conferred by copyrights and patents.

Moreover, the WTO Agreement, of which TRIPS is an annex, is based on

a free trade rationale: that economic growth is achieved most efficiently

through free trade. Thus, much of the economic literature on intellectual

property and development focuses on the impact of liberalising

intellectual property laws--which translates into increased state

intervention by strengthening them--on foreign direct investment in

developing countries. Foreign direct investment is thought to be an

optimal way for developing countries to increase their knowledge

capacity, technical innovation and ultimately their economic growth.

(Gervais 2005: 515-516)

One important consequence of this neo-liberal paradigm on global

intellectual property policy-making is that the policy debate over access to

essential medicines is not easily expressed in intellectual property law or

Intellectual Property Rights and Social Development: A Framework 55

trade law generally. A second consequence of the neo-liberal world view

is that standards grounded in economic rationales, by virtue of being hard-

wired into TRIPS, are privileged over possible alternative rationales based

on different models of development. Neo-liberal concepts of development

mean that the term "development" is already captured by a discourse that

privileges the efficiency norms and incentive rationale of intellectual

property, rather than the human development and basic needs approach

favored by those advocating access to goods protected by intellectual

property. (Helfer 2004: 78) But neo-liberal way of thinking about

development, many are registering strong reservations about the costs that

developing countries and their populations are bearing for the

liberalisation of their markets. Deep integration can only function well

under certain conditions. (Birdsall & Lawrence 1999: 134)

Integrating intellectual property standards through TRIPS is

supposed to result in long-term economic growth through innovation

across all member states, at the cost of short term decreases in access to

goods because of higher prices. For developing countries, this innovation-

driven growth (created primarily through foreign direct investment and

accompanying technology transfer) may be an abstract or perhaps even

non-existent benefit. Firms may not enter into the poorest countries

regardless of the level of intellectual property protection they offer

because no profit is likely to be made where consumers cannot pay.6

Thoughtful observers across the political spectrum have voiced

increasing concern that the intellectual property minimum standards of

TRIPS are simply inappropriate for the poorest countries and of

questionable benefit for some of the middle income countries. TRIPS

severely constrained the policy-making space for countries in areas of

critical concern for public health. For example, prior to TRIPS, India was

able to design a patent law policy that suited its national circumstances.

Its current relative success in this intellectual property-driven industry is

6 Commission on Intellectual Property Rights (2002): “Integrating Intellectual Property

Rights and Development Policy,” at http://www.iprcommission.org/graphic

/documents/final_report.htm

56 Chapter II

attributable to this flexibility, which is no longer available to countries at

relatively low levels of development. (Omer 2002: 559-561)

2.5.5 The Human Capabilities Approach

The debate has become vibrant with the emergence of the Human

Capability Approach. Two relatively recent nuances on the concept of

development are described: (1) the human capabilities approach

popularised by economist Amartya Sen and advocated in legal scholarship

by philosopher Martha Nussbaum; and (2) the global public goods

approach which are grounded in neo-liberal development economics

rather than concepts of development that are more based on political,

cultural or post-colonial theory. These newer ways of liberal thinking

about development share a common ground in the creation of a

substantive equality principle to guide intellectual property globalisation,

similar to the creation of a substantive equality standard of comparison in

the area of development economics. (Pereira Neto 2005:2)

Recent insights from the field of development economics suggest

strongly that intellectual property should include a substantive equality

principle, measuring its welfare-generating outcomes not only by

economic growth but also by distributional effects. When intellectual

property globalisation encounters development, even in debates that

prominently feature development concerns, dysphoria ensues. This is true

even though the term "development" features prominently in the basic

legal texts that purportedly address differentials among disparately-

situated member states in an otherwise formally equal global intellectual

property system. For example, the TRIPS Agreement references the

"developmental . . . objectives" of all member states as well as member

states' ability to "adopt measures necessary to protect public health and

nutrition, and to promote the public interest in sectors of vital importance

to their socio-economic and technological development."7

7 Agreement on Trade-Related Aspects of Intellectual Property Rights, (1994):

Marrakesh Agreement Establishing the World Trade Organisation, Annex 1C, Legal

Instruments--Results of the Uruguay Round, I.L.M., vol. 33 (81), article.8

Intellectual Property Rights and Social Development: A Framework 57

Intellectual property, when it encounters development either

domestically or globally, must incorporate a more comprehensive

understanding of social welfare maximisation. This alludes not only to the

material divide figuring in other debates on intellectual property, but also

to an unnecessary ideological divide between efficiency and

distributional-driven understandings of development. (Rittich 2004:225)

And while there is a rapidly increasing body of scholarship on

protection of traditional knowledge, relatively little attention has been paid

to local development cultures and values outside this context. Nor, except

in the context of technology transfer and technical assistance to implement

intellectual property minimum standards, has much attention been paid to

whether and how intellectual property globalisation should contribute to

what some development or welfare economists, taking a developmental

ethics perspective, have called human capability potentials, culminating in

the so-called human development approach. (Ghosh 2003: 497)

The "capabilities approach" to development pioneered by Amartya

Sen (1999) and Martha Nussbaum (2003) offers a critique of the utilitarian

account of development as measured by GDP or technological

advancement alone. Sen's vision of "development as freedom" is pluralist,

measuring development by assessing an individual's ability to exercise

many freedoms, including market-oriented freedom.

One can readily see intellectual property law as a means of

development and implicitly as a means of thwarting development in the

health and traditional knowledge context. Patents and copyrights determine

our access to drugs and education, while trademarks and rights of publicity

define the contours of freedom of speech and the ability to play with

cultural icons. Development must entail not only economic growth, but also

a life that is culturally fulfilling. Recognising people's humanity requires

acknowledging their production of knowledge of the world. This

recognition, in turn, fuels remuneration to new creators. A U.N. report puts

it, "at its best, the Knowledge Society involves all members of a

community in knowledge creation and utilisation." Hence, "the Knowledge

Society is not only about technological innovations, but also about human

58 Chapter II

beings, their personal growth, and their individual creativity, experience

and participation." (Amartya Sen 2004:39)

Amartya Sen’s idea of Development as Freedom reflects from his

statement that "The ends and means of development require examination

and scrutiny for a fuller understanding of the development process; it is

simply not adequate to take as our basic objective just the maximisation of

income or wealth, which is, as Aristotle noted, 'merely useful and for the

sake of something else.' For the same reason, economic growth cannot

sensibly be treated as an end in itself. Development has to be more

concerned with enhancing the lives we lead and the freedoms we

enjoy."(Amartya Sen 1999:14)

The assumption that wealth or utility maximisation is the sole

legitimate measure of social welfare meant that a single economic growth

indicator (i.e., gross national or gross domestic product) was thought to

suffice in the development context. But this measure could actually

miscalculate welfare: a majority of a country's people could be living without

access to the essential goods and services required for human functioning, with

a small percentage of its population capturing a disproportionate amount of the

overall wealth. Recognising this shortcoming in the standard welfare

economics approach, economists such as Amartya Sen began to theorise an

alternative human capability approach towards the measurement of social

welfare, which has been adopted by mainstream development institutions.

Since 1991, the Human Development Index composed of three variables--

life expectancy at birth, educational attainment, and the standard of living

measured by real per capita income has been used annually by the United

Nations Development Programme to measure social welfare within and

across nations. Yet this human capability approach based on the idea that a

society is not fully developed until certain basic needs are provided for all

of its people, has not yet informed intellectual property globalisation.

(Malhotra 2004: 13-18).

Development encompasses not only economic but also cultural,

social, and political dimensions of national well-being, a more deliberate

consideration of these newer concepts in development economics could

Intellectual Property Rights and Social Development: A Framework 59

ameliorate intellectual property's one-sided emphasis on pure wealth- or

utility-maximisation. In the trade context of TRIPS, this emphasis tends to

favor countries with well-established intellectual property industries and

compounds a bias towards measuring the development effects of

intellectual property solely through economic growth. The net result is an

intellectual property balance that has become increasingly lopsided in favor

of producer interests, possibly to the detriment of overall global social

welfare and clearly to the detriment of the most vulnerable populations.

(Peet & Hartwick 2002: 222)

Classical scholarship feel the difficulty inherent in the dual

balancing act of intellectual property globalisation: the domestic welfare

balance between the producers and users of intellectual property along with

the simultaneous global welfare balance between developing and developed

countries. They insist on the primacy of the nation-state as the initial arbiter

and enforcer of the domestic welfare balance. In their view, the basic

challenge with globalisation is how to protect that domestic balance from

being corrupted from undue pressures introduced by globalised trade

regimes such as TRIPS.(Chon 2006:2 852-53)

According to this view, economic growth is a necessary but not

sufficient condition to development because an aggregate measure of

growth . . . pays no attention to how that output is distributed amongst the

population; it says nothing about the composition of output (whether the

goods are consumption goods investment goods or public goods such as

education and health provision), and it gives no indication of the physical,

social and economic environment in which the output is produced.

(Thirlwall 2002: 42)

Why should intellectual property globalisation heed this approach?

That it is an offshoot of welfare economics makes it highly relevant in any

reconsideration of the instrumental purpose of intellectual property, which in

its current guise is heavily rationalised within an economic framework. That it

is grounded as well in political philosophy means that it is connected to a set of

normative justifications beyond simple utility maximisation and thus compels

a fresh look at intellectual property, perhaps through a more cosmopolitan set

60 Chapter II

of theoretical norms. In any event, a practical philosophical approach that asks

what the goal of government ought to be in providing its citizens with basic

needs comports with the instrumental purpose of intellectual property in

promoting "Progress" domestically or generating welfare globally.(Chon

2006: 2876-78)

2.5.6 The Global Public Goods Approach

All intellectual property specialists are aware that public goods

theory addresses the non-rivalrous and non-exclusive qualities of goods. In

the case of intellectual property, these goods are called knowledge goods.

Unprotected knowledge goods such as creative works or inventions may be

subject to free riding and thus lead to sub-optimal levels of innovative

activity. Hence the "public goods problem." So to address this market

failure, it is necessary for the state to intervene by providing legal rights to

exclude others in the form of copyrights and patents. This will enable

market transactions in knowledge goods among rational, rights-bearing

actors, and ultimately encourage the production and widespread distribution

of more knowledge. (Chon 2006: 2880)

Economist Joseph E. Stiglitz (1999) states generally about public

goods: "The central public policy implication of public goods is that the

state must play some role in the provision of such goods; otherwise they

will be undersupplied." In the case of knowledge goods, intellectual

property provides a legal incentive for authors and inventors to produce

them. Public goods theory locks powerfully into the neo-liberal belief in the

primacy of property rights in the form of IPRs. Intellectual property law is

said to enhance dynamic efficiency (that is, the rate of innovation over the

long run) at the cost of static efficiency (increased prices and greater

impediments to access generated by intellectual property laws in the short

run), depending on the term of protection. (Correa 2003: 411)

Pure economic theory would apply the term "public goods" to a tiny

class of goods (perhaps only the military) whereas sociologists and political

scientists might apply it to any good the non-provision of which generates

largely negative externalities. Moreover, the regulatory or policy

consequences flowing from the designation of a good as a "public good"

Intellectual Property Rights and Social Development: A Framework 61

are far more diverse than we are accustomed to thinking about in the

intellectual property arena: there are many ways to incentivise innovation

than to automatically privatise goods through a scheme of exclusive rights

such as patent or copyright. (Chon 2006: 2881-82)

Drahos (2005) considers that these global public goods theories

build on the longstanding insight that many public goods, including

knowledge goods, are not pure public goods, but rather are a mix of public

or private or are "impure" public goods. "Publicness and privateness are

highly variable and malleable social norms." Particularly due to the

proliferation of global actors, including non-state actors, the concept of

public requires critical re-examination in a global regulatory environment.

The public can no longer simply be reduced to the state; the public includes

civil society, corporations, as well as the state--and in the context of

globalisation, "transnational nonstate, non-profit actors."

Just as public goods (knowledge) can be turned by policy choices

into private goods (as through intellectual property laws), the reverse is true

as well. Private goods such as education can be made the subject of public

provision through the public education system. Thus, public goods theorists

include an enormous array of things under the rubric of potential public

goods. Whether framed by the disciplines of political science or

international relations, where the concern is to avoid prisoner's dilemmas,

or by the economist's perspective of avoiding negative externalities, global

public goods theory is a fresh look at a neo-liberal theory badly in need of

repair in a globalised context. (Kaul et al 2003: 22&88)

2.6. Indigenous Knowledge in the context of Globalisation

2.6.1 Globalisation of IPR and Indigenous Knowledge

Conventional narrative depicts globalisation as a triple process of

economic, social, and political transnationalisation. It facilitates by a

centralised regulatory scheme in a number of spheres including economic,

social, human, natural, and material resources. Globalisation depicts

structural changes in transitional structures within the rubric of capitalism.

(Santos 1995: 253-259) In the knowledge-based, digital and information

62 Chapter II

society, IP plays a very crucial role. Within the logic of globalisation,

TRIPS as a centralised or global regulatory regime on IP could be

perceived as a necessity, especially in relation to international globalisation

and opening of markets. The shrinking of state sovereignty over IPR

became inevitable in order to yield a more extensive and pervasive IP

regime whereby weaker states are circumscribed in their ability to deploy

IP protection to foster peculiar national interests. The international arena,

dominated by stronger players, especially the United States and its allies,

became the appropriate site for the regulation of IP.

Given that the inquiry into indigenous knowledge-protection

protocols is centrifugal in orientation, how does it fit into the global

direction of IPR as reflected by the TRIPS Agreement? There is no doubt

that globalisation has accentuated homogenisation in its diverse

ramifications: economic, social, political, industrial, informational, cultural

assimilation and erosion, migration pattern, other forms of

transnationalisation, and so on. Conversely, it has heightened an

unprecedented global networking of hitherto uncoordinated interests and

coalitions. It has yielded the flourishing of alterity, especially in the cultural

expression and resistance of indigenous and/or minority cultures to forces

of domination or homogenisation, including the blossoming of what a

prominent scholar calls the "cosmopolitan alternative. (Waldron 1995: 93).

Globalisation's promotion of laissez-faire free-market capitalism has

increased international and intranational economic disparities, with

indigenous peoples consistently on the losing end of the spectrum. As

globalisation has intensified, the gap between per-capita incomes in rich

and poor countries has widened as commercial globalisation is proposed

and pursued on behalf, and for the benefit of, First World countries. In

regards to indigenous peoples in particular, scholars are now asking the

question of what is the appropriate balance between their respective

contributions and their rightful share in the vastly increased output of goods

and services which have been made possible by the combination of

traditional knowledge with modern science. The method by which that "fair

share" is assessed is of particular importance for indigenous groups, to

Intellectual Property Rights and Social Development: A Framework 63

whom "fairness and equality," as defined in a global world market, may be

inconsistent with indigenous worldviews altogether. (Tsosie 1996: 225-226).

The digitalisation of information and globalisation of

communication also poses a distinct threat to the cultural survival of

indigenous peoples. Today, it is far easier than ever before for indigenous

peoples' cultural knowledge to be appropriated illicitly. In one brief

moment, sacred and confidential information can be placed irreversibly in

the global public domain, where it can then be appropriated, transformed

and commodified for the world. Thus, while mobilising indigenous

movements, technology has also made possible the almost instantaneous

distribution of sacred indigenous knowledge. The challenge of protecting

indigenous knowledge from mass dissemination through technology is

perhaps one of the biggest problems faced by indigenous groups today.

(Daes 2001: 144)

Under the current intellectual property framework, the

appropriation, distortion, and commodification of indigenous peoples'

traditional knowledge can occur almost instantaneously and without legal

redress. It is clear that intellectual property regimes fail to adequately

capture all of the cultural and economic significance of community-based,

traditional knowledge or to ensure the perpetuation of local knowledge

systems. Given that so many resources have been put into developing

comprehensive laws to ensure the protection of intangible knowledge, one

might ask why current legal systems do not safeguard the cultural and

intellectual property of indigenous groups. The problem is multi-faceted.

First, intellectual property law was largely developed in the West, and its

models are based on a capitalistic philosophy designed to serve a market

economy. The mere fact that works of intellectual creativity and

innovation, so-called "works of the mind," are granted the status of

protectable individual property itself represents a Western view. Western

concepts of exclusive ownership, alienability and monopoly rights are

largely inconsistent with indigenous peoples' traditional forms of

ownership, which tend to focus on collective, intergenerational creations

64 Chapter II

that often do not contain rights of alienability and which are produced from

community-based economies.(Riley 2000: 183-184)

Similarly, patent laws presume that the act of innovation is largely

individual, rather than social, and that innovators are motivated by financial

gain. This places the responsibility on the state, rather than on innovators,

to ensure that new knowledge is used responsibly. Such is not the case in

indigenous communities, where custodians of local knowledge believe that

knowledge is socially created through interaction among humans, animals,

nature and the spirit world, that individuals are obliged to put their

knowledge to use for the good of the community, and that holders of such

knowledge have a responsibility to ensure its proper use. (Lawrence Barsh

2001: 153)

Realising that Western intellectual property law does not

accommodate indigenous works, nation-states and international

organisations have attempted to define indigenous cultural knowledge in

such a way as to make it amenable to intellectual property protection. This,

too, has proven problematic, as many indigenous peoples believe such

efforts are inconsistent with rights to self-determination. It is difficult, if not

impossible, for such entities to fully comprehend the role of oral tradition,

indigenous medicine, and folklore in any particular community. When such

attempts are made, indigenous knowledge, lifeways, and values are often

mischaracterised or misunderstood. (Daes 2001: 146)

While the efficacy of such databases is apparent - there is a value,

after all, to articulating, organising, and putting others on notice of

protected materials - such proposals have been met with great opposition in

indigenous communities, because many believe that databases will only

make it easier for those who wish to exploit cultural heritage and steal

secret and sacred traditions. The idea of disclosing traditional knowledge

within a public forum - even one with controlled access - represents a risk

of exploitation and destruction that is, for many, far too great.(Bodeker

2003: 803-804)

Also, integral to respecting indigenous rights to self-determination

is recognition of the differences among indigenous communities. While

Intellectual Property Rights and Social Development: A Framework 65

there are significant overlaps in the worldviews of indigenous peoples

across the globe, there are many variances that the groups themselves must

contemplate and account for in defining their own property. Each group

represents unique peoples with a particular history and culture. The great

diversity of indigenous peoples means there is no single position on these

issues and certainly no one position that be called an indigenous one.

(Coombe 2001:227).

As Barsh points out: "Indigenous peoples possess their own locally-

specific systems of jurisprudence with respect to the classification of

different types of knowledge, property procedures for acquiring and sharing

knowledge, and the nature of the rights and responsibilities that attach to

possessing knowledge." The ways in which indigenous peoples characterise

and define property are as varied as the peoples themselves, and Westerners

must resist the urge to narrow and define the "indigenous

perspective."(Lawrence Barsh 1999: 74-75)

Many indigenous groups simply lack access to the essential

information and resources necessary for them to utilise intellectual property

laws, even once they are in place. The continuous process of monitoring

and challenging patents, for example, places an enormous financial burden

on indigenous peoples and the NGO's that represent community interests.

In fact, enforcement of most transnational intangible property protections is

"well beyond the capacities of all but the well-funded NGOs." As

intellectual property laws are imposed on countries with significant

indigenous populations, indigenous peoples are forced to reclassify, remap,

and remake their traditional knowledge in the image of the coloniser if they

wish to avail themselves of existing intellectual property protections. They

must conceive of the very essence of traditional life as broken down into

distinct sticks of property, and protect the bundle from pirates and

infringers just to preserve the right to their continued existence. (Rose Mary

Coombe 2001:227& 281)

The desire of indigenous peoples to contribute to an alternative

vision of IPRs should be seen in the context of the wave of indigenous

renaissance in the global constitutive process. Indigenous peoples have

66 Chapter II

linked their quest for self-determination to the protection of their

knowledge, thus making knowledge the new frontier of the indigenous

question in international law. (Rose Mary Coombe 1998:79) Since 1992,

beginning with the set of international environmental instruments

articulated in Rio, indigenous peoples have become active participants in

policy decisions that affect them. As a testament and highpoint of their

activism, there is now the U.N. Permanent Forum on Indigenous Issues.

(Carey & Wiessner 2001) In addition, there is a pending expectation of an

eventual United Nations Draft Declaration on the Rights of Indigenous

Peoples. This document, now in draft form, articulates in a comprehensive

manner, among other things, the importance of knowledge in the survival

of indigenous peoples. The integration project is both the consequence and

part of the logic of indigenous renaissance. (Daes 1993)

Indigenous successes in the twentieth century happened in the

contexts of globalisation and indigenous renaissance. Both phenomena are

inextricably linked and reinforcing. Globalisation, to some extent,

empowers minority cultures and generates increased consciousness of

cultural membership and identity. Indigenous renaissance and its impact on

boosting various forms of cultural emancipation are incidences of

globalisation. In fostering homogenisation, globalisation also engenders

resistance to domination and cultural appropriation which the integration

initiative symbolises. (Rose Mary Coombe 1998: 278) Cultural

preservation and expression are platforms for resisting domination. Among

the diverse ways in which globalisation has enhanced indigenous

emancipation and the integration project in the last few years is by

facilitating a networking culture amongst indigenous peoples across the

globe. (Santos 1995: 257) This trend has enabled the world's indigenous

peoples to press forward in influencing the global constitutive process

exemplified, for instance, by the elaborate debate on IP. Here, globalisation

fulfils one of its significant and less reckoned expectations, namely,

generating "uncontrollable dangers" of "unsuspected emancipations."

(Santos 1995: 261)

Intellectual Property Rights and Social Development: A Framework 67

Even though the TRIPS Agreement symbolises globalisation by

prescribing minimum statutory conditions of IP for global application, it

did not dispense with the national character of IPRs. TRIPS' encroachment

on the rights of national governments is not absolute and should not be

taken as foreclosed. (Susan Sell 2002: 193) For instance, under Article 27.2

of TRIPS, national governments have some leverage in determining the

patentability of particular subject matters. That provision permits national

governments to exclude from being patented inventions whose exploitation

may be offensive to ordre public. Inventions that impinge upon indigenous

cultural sensitivities have been linked to the ordre public exception under

that provision. Since knowledge-protection protocols are products of the

contexts and culture in which knowledge is generated, one unique aspect of

such regimes is that they must of necessity be in harmony with indigenous

cultural sensitivities. (Chidi Oguamanam 2004:169)

It is expected to set the stage for a global framework for the

protection of indigenous knowledge on the basis of indigenous conceptions,

and as a global plan of action on how to conserve biological diversity. To

this extent, the integration project may not be in any serious conflict with

globalisation, as it appears on first consideration. (Chidi Oguamanam

2004:169)

2.7 Summary

The concept and nature of the property, its changing notions as

discussed above, evolved in the course of time and were shaped by the

philosophical, cultural, economic and socio-political aspects of the

particular stage of the society. In the contemporary scenario, Intellectual

Property received great attention as the basis of economic development and

competitive advantage. But the scope and duration of Intellectual Property

Rights (IPR) have widened substantially giving excessive importance to

private interests, so that today many of these rights have become virtually

perpetual and unqualified.

The unique feature of proprietary rights, as revealed by diverse

perspectives, is on the inherent dichotomy between private and public

interests. When the power of the owner is stressed in the construct of

68 Chapter II

property rights, property rights are deemed to become a commodity and on

the other hand, the social aspect of ownership stresses the interests of

society as a whole. What IP has common with tangible or physical property

is the political significance of exclusion from possession and enjoyment of

real property that is virtually as palpable as the property itself. With IPR the

problem becomes how "to measure out" the scarcity between the owner and

society. The "scarcity" created by the granting of IPR is modulated by

different constructs of property rights, which inevitably affect the relation

between the values at stake.

Modern property law is founded upon a variety of normative

theories from Lockean labour theory to economic reasoning to theories of

personhood. The goal in recognising a variety of values is not to prioritise

one over others, but to maximise each value where possible. Extension of

natural rights arguments for the protection of physical property and

intellectual property i.e., knowledge on a similar platform is problematic on

three grounds. Firstly, Intangible nature of knowledge can not excluded as

physical property. Secondly, exclusion and monopoly right over physical

property is absolute in nature, whereas IPR provide only limited monopoly

for a specific duration. Finally, the value of IP is not confined by

international boundaries but each state is compelled to protect IP value

within its jurisdiction and must consider imitation as theft.

At the beginning of the twentieth century, the metaphor of property

as a "bundle of rights" was being used to describe a complex set of legal

relations in which individuals are interdependent. The idea of property was

ushered into the legal framework by legal statutes and judicial decisions

only with the emergence of the "welfare state." In the 1950s the

intervention of the state in the market was challenged and market-oriented

"ultra-minimum state” is encouraged.

Communitarians maintained that justice cannot be detached from

any conception of the "good life," and that rights depend for their

justification on the moral importance of the ends they serve. Because IPR

in the international arena are tailored to enhance the interests of industrial

exploitation of intellectual capital by highlighting the role of the rights

Intellectual Property Rights and Social Development: A Framework 69

owner and underplaying the role of other needs. The public domain school

of thought argues that the purpose of intellectual creation to serve all

humankind is better fulfilled by allowing intellectual creation to remain in

the public domain. Thus, the TRIPS Agreement transformed a global public

domain by propertising the information resources of the West but leaving in

the commons the information resources of the rest of the world, such as

genetic resources and Traditional Knowledge (TK). In biotechnology, this

reliance on the commons for building blocks of IP is so standard that it

even has a name: "bio-prospecting." Thus, there is a dialectical relationship

between the public domain and IP. IP flourishes from the public domain,

and the public domain grows as information passes, over time, out of IP. So

the current understanding of the public domain as "the opposite of

property" is deceptive.

Locke's labour theory of property depends upon the existence of a

commons or public domain of resources from which individuals can freely

take and appropriate. The Hegelian "personality," or "will," theory is

similarly premised upon the existence of a public domain. The public

domain and private property are intimately intertwined, both historically

and economically. So folklore and TK must remain in the public domain.

This cocktail of robust private property rights and foreign access thereto is

leading to a steady transfer of the "ownership" of intellectual "products"

from the developing world to the developed world.

The global power relationships evident at the negotiating table in

the international trade and other international arenas reflect longstanding

global power hierarchies in culture and power. Cultural hierarchies also

played an important role in the type of knowledge that came to be protected

under global IP standards and those related to biodiversity associated

traditional knowledge in particular.

With the advent of information technology and biotechnology that

touch vital interests like freedom of speech and the sanctity of life

introducing a more conscious ethical and political dimension to the

question of property rights. IP embraces all the intangible assets at stake,

including raw genetic resources, advanced agricultural and pharmaceutical

70 Chapter II

research, and the ethnobiological knowledge that often transforms a locally

useful organism into a globally valued application of biotechnology.

Capital mobility and the ideological shift toward a radical free

market agenda served to enhance the power of global corporations and

particularly those engaged in knowledge-intensive processes and

production. Thus, the private interests of the market are integrated into the

state, asymmetrically in accordance with their structural power and

organisational capacity, through their close relationship to state institutions

in the policy decision-making process. Though the WTO advocates global

free trade based on the economic theory that incur benefits to all, the reality

of the implementation of free trade in the global arena may not always yield

such benefits for all involved parties. Southern countries do not have

extensive internal technological and scientific capacity to enable them to

transform local knowledge into knowledge that might be protected under

current IP frameworks. Without the establishment of structures within

current global IP frameworks intended to help the development of such

capacity, TRIPS has the potential to exacerbate existing disparities in

technological and scientific capacity.

Indeed, market failure is cited as the raison d'être for intellectual

property, explaining copyright, patent, and even trademark. A central

feature of this account is its focus on the market as the vehicle for solving

distributional problems. Utilitarianism's central failure, of course, is its

neglect of distribution. New growth theories rely on knowledge as the

driving force behind economic growth through the principle of excludability

either keeping the knowledge a secret or invoking effective IP laws led to the

inclusion of the TRIPS Agreement as one of the agreements in the framework

of the multilateral trade negotiations under the Uruguay Round. The rate of

growth depends upon the rate of innovation and the stock of knowledge.

However, giving innovators too much protection may limit the spread of new

ideas and lead to monopoly. In effect, a stronger regime would act to transfer

profits to firms outside the country rather than encouraging domestic

innovative activity, particularly in relatively closed economies where few

domestic alternatives to the imported product are available.

Intellectual Property Rights and Social Development: A Framework 71

Skeptical approaches towards development are characterised by

their emphasis on the enduring nature of power differentials among nation-

states. International law has played an important justifying role in the

evolution of neo-liberal development ideology and, conversely,

development ideology has contributed to the expansion of international

law. TRIPS imposed minimum standards of IP protection upon developing

countries and thus set the stage for enduring structural inequity. The human

capabilities approach popularised by economist Amartya Sen and Martha

Nussbaum suggest strongly that IP should include a substantive equality

principle, measuring its welfare-generating outcomes not only by economic

growth but also by distributional effects. Development encompasses not

only economic but also cultural, social, and political dimensions of national

well-being, a more deliberate consideration of these newer concepts in

development economics could ameliorate IP one-sided emphasis on pure

wealth or utility maximisation.

In regards to indigenous peoples in particular, scholars are now

asking the question of what is the appropriate balance between their

respective contributions and their rightful share in the vastly increased

output of goods and services which have been made possible by the

combination of TK with modern science. Under current IP regimes, the

appropriation, distortion, and commodification of indigenous peoples' TK

can occur almost instantaneously and without legal redress. Western

concepts of exclusive ownership, alienability and monopoly rights are

largely inconsistent with indigenous peoples' traditional forms of

ownership, which tend to focus on collective, intergenerational creations

that often do not contain rights of alienability and which are produced from

community-based economies. So IP laws presume that the act of innovation

is largely individual, rather than social, and that innovators are motivated

by financial gain. Whereas custodians of TK believe that knowledge is

socially created through interaction among humans, animals, nature and the

spirit world, that individuals are obliged to put their knowledge to use for

the good of the community, and that holders of such knowledge have a

responsibility to ensure its proper use. Indigenous peoples possess their

own locally-specific systems of jurisprudence with respect to the

72 Chapter II

classification of different types of knowledge, property procedures for

acquiring and sharing knowledge, and the nature of the rights and

responsibilities that attach to possessing knowledge. The desire of

indigenous peoples to contribute to an alternative vision of IPRs should be

seen in the context of the wave of indigenous renaissance in the global

constitutive process. Indigenous peoples have linked their quest for self-

determination to the protection of their knowledge, thus making knowledge

the new frontier of the indigenous question in international law.

In brief, the foregoing discussion in this chapter reveals that

proprietary rights and its protection were central to almost all perspectives

and development debates. However, the built in and inherent bias in favour

of the primacy of private over public stand in the way of genuine

appreciation from the perspective of social development. When it comes to

the protection of IP especially those related to biodiversity associated

traditional knowledge, there was a huge vacuum except in the capabilities

approach advanced by Martha Nussbaum and nobel laurite Amartya Sen.

As already mentioned earlier, this line of scholarship does not perceive

economic growth as an end in itself.

Development encompasses not only economic but also cultural,

social, and political dimensions of national well-being, a more deliberate

consideration of these newer concepts in development economics could

ameliorate intellectual property's one-sided emphasis on pure wealth- or

utility-maximisation. In the trade context of TRIPS, this emphasis tends to

favor countries with well-established intellectual property industries and

compounds a bias towards measuring the development effects of

intellectual property solely through economic growth. The net result, it

rightly argued, is an intellectual property balance that has become

increasingly lopsided in favor of producer interests, possibly to the

detriment of overall global social welfare and clearly to the detriment of the

most vulnerable populations.