CCIA Op Ed On IP/Trade Published Today

November 8, 2008

By Ed Black

Special to the Mercury News

Posted: 12/08/2008 05:39:33 PM PST

As the Obama administration seeks to boost the innovation economy and repair strained relations around the world, it needs to change our current 20th century foreign policy when it comes to intellectual property. For decades, the U.S. government has aggressively pursued ever-increasing levels of IP protection, on the assumption that patent, copyright and trademark infringement abroad hurts U.S. jobs.

Re-evaluating the appropriate role of IP in the trade arena is all the more urgent as names of potential nominees surface for U.S. Trade Representative, including Rep. Xavier Becerra, D-Los Angeles, whose district includes Hollywood. From all indications he would be fair-minded. But it’s important that whoever ultimately is chosen, like all those accepting jobs in the new administration, leave existing parochial, corporate or constituent interests behind now that his or her new constituency is the American public.

There is limited evidence foreign infringement reduces U.S. jobs or deters innovation. The economic “studies” offered by some IP industries typically involve unsubstantiated assertions by paid economic consultants. There are now three compelling reasons to re-evaluate our IP foreign policy.

First, browbeating our trading partners to ratchet up IP protection or face trade sanctions has alienated our friends. Adrian Cristbal, director general of the Philippines IP office, recently wrote that U.S. insistence on draconian Advertisement IP regimes breed resentment and show a lack of “respect for the sovereignty” of developing countries. This high political price measures poorly against meager gains in enforcement. While a “what’s good for Disney must be good for America” approach to IP foreign policy may once have made sense, it now impedes efforts to repair our international relationships.

Second, in the “clash of civilizations” we want our ideas and culture disseminated widely. Bootleg rock ‘n’ roll, bluejeans and “Dallas” played a role in the fall of the Iron Curtain. By badgering repressive states to suppress “piracy,” we legitimize restrictions on the cultural commodities and communications tools that induce citizens to seek greater openness.

We must maintain incentives for IP industries. But we can do this without alienating friends and hobbling efforts to export Western values. Even if this suggests the need for some assistance to corporate rights-holders, this cost pales compared with long-term military spending.

Third, the type of IP provisions we are forcing on our trading partners might actually harm the most innovative sectors of our economy. U.S. law includes important exceptions, such as “fair use” and limitations on secondary liability. These have been critical to the success of companies, including Internet pioneers. Many foreign countries, however, don’t have these exceptions. As a result, foreign courts now threaten U.S. companies. They have penalized Google and eBay for conduct that’s legal in the United States.

Our trade negotiators exacerbate this situation by insisting foreign governments adopt more stringent rules, which are now enforced against American companies, in a manner that usually advantages domestic interests in that country.

Whoever becomes Obama’s U.S. trade representative must re-evaluate our IP foreign policy and reassess how much foreign infringement affects U.S. interests. The USTR should examine whether protecting Hollywood and some established companies is handicapping innovative industries.

Hollywood should direct movies, not trade policy. The USTR shouldn’t be pressured to adopt extreme views on copyright, including harsh unbalanced IP enforcement rules in trade agreements, particularly since these policy preferences find little support in economic data.

We need a balanced IP agenda that shows other nations what’s good about American culture, yet respects theirs, and that doesn’t discriminate against the Internet. We won’t have a 21st century IP policy until we question why national security and foreign trade interests are taking a back seat to securing profits for some well-connected companies.

Ed Black is president and CEO of the Computer & Communications Industry Association. He wrote this article for the Mercury News.

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