Don't worry about intellectual property in poor places

One of our unfashionable ideas is that we shouldn’t worry overmuch about intellectual property in poor places.

Yes, IP like patents and copyrights is vital for some solution is necessary to that public goods problem. If anyone and everyone can just copy then little profit can be made therefore no one invests in the initial creation. When a new drug can cost $2 billion that’s a problem that has to be solved.

But this has also led to an insistence, in some quarters, that everywhere should have to obey those same IP rules. And, well, no.

Truly poor places have, by definition, no money. So, if they have to obey all the IP laws they’ll not buy any of the IP. The impact of IP laws on the revenue of those who developed the IP is zero. If those same poor people then steal the IP instead the impact upon development incentives is also zero. But, clearly, the poor people are made better off. This is a Pareto improvement and therefore we should do that. It makes absolutely no difference to those incentives and people still become better off.

But we then get to that problem of when’s the dividing line between poor and steal and rich and pay?

Chinese authorities have targeted a major online sales platform accused of supplying counterfeit goods, raiding warehouses holding millions of packages destined for overseas buyers.

Earlier this month police raided the Hangzhou office and several warehouses of Pandabuy after reported legal action by 16 brands over copyright infringement. More than 200 public security branch officers, 50 private sector investigators and local police were involved, according to reports.

This is not an exact claim but a general one. This is something that can be left to the market. Everyone has the same nominal rules, obviously. But they require enforcement by those domestic authorities to be effective. When will those domestic authorities enforce?

When that place is creating IP that it would like other countries to also enforce rights to. Which is a useful definition of being richer rather than poorer too - a place that is creating IP is going to be richer than a place which is not.

As we say, not an exact rule but a useful general guide we think. Mutual recognition of intellectual property will come when places are rich enough to be creating IP they want protected. A place that is poorer than that likely doesn’t have any money to buy IP anyway. Yes, obviously grey areas at that interface and dividing line but still, we insist, a useful guide.

Yes, this does mean we’re rather against TRIPS. Oh well, if that’s where logic leads us….