IPR LIMITS I

On his last month's comment at the Project Syndicate site (www.project-syndicate.org), Prof. Joseph E. Stiglitz analyzed WIPO's Intellectual Property regime proposal for developing countries (look for WIPO's document on the right sidebar). He highlighted the important shift towards the interests of the developing world provided by WIPO's General Assembly since last October. Stiglitz query the social benefits of Intellectual Property Rights (IPR) in developing countries, arguing that the cost/benefit structure of IPR is different in industrialized and non-developed countries.

Prof. Stiglitz's argument is based on the following assumptions:

1. Although IPR spells innovation and creativity, it slows down the diffusion and use of ideas;

2. Faster innovation sometimes do not offset the costs of the monopoly power created by IPRs;

3. Competition in innovation not always lead to a succession of firms. In fact, a monopolist, once established, may be hard to dislodge;

4. The creation of any product requires many ideas, and sorting out their relative contribution to the outcome – let alone which ones are really new – can be nearly impossible.

Stiglitz concludes that the appropriate intellectual property regime for a developing country is different from that for an advanced industrial country. There has been a lot of controversy in the extent of World Trade Organization (WTO) negotiations regarding IPR's issues. Industrialized nations are continuously pushing non-developed countries to accept TRIPs standard agreement under international trade negotiations. As Stiglitz assigns, the incentive structure of IPR is different for each country. Shouldn't the IPR regime also be different?

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