Tuesday, April 12, 2005

THE IP "AXIS OF EVIL": As the value of IP becomes more evident by the day, our economic future becomes less tied to what we manufacture, and instead becomes more dependant on what we invent. Unfortunately, the nature of IP is such that it is easy to steal - especially compared, say, to an automobile factory. Some nations specialize in reverse-engineering: discovering the chemical composition of a drug. Others wink at domestic factories that make rip-off software and movies. The main protection for IP lies in patents and copyrights, recognized internationally and enforced vigorously.

Lately, some powerful developing countries are putting the global regime that protects IP in serious jeopardy. They're not playing by the rules. The three main culprits are China, India and Brazil — a group that James Pinkerton, New America Foundation fellow and former White House policy adviser, calls the "IP Axis of Evil."

On April 4, the U.S. trade representative delayed a decision on whether to punish Brazil for violating a special agreement with developing countries, the Generalized System of Preferences. Brazil is the 11th-largest economy in the world and a major trade partner and competitor of the United States (Brazil even makes planes that compete with Boeing). Under GSP, we let $3 billion in Brazilian goods enter our country duty-free.

Four years ago, the U.S. trade representative put Brazil on its watch list for chronic flouting of our copyright laws. According to the International Intellectual Property Alliance, "estimated losses due to the piracy of copyrighted materials (by Brazil) totaled $785 million in 2003" — and that doesn't even include losses from patent piracy.

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