Perceptions of IP: A Review

Perceptions of IP: A Review

In a recently released report by the Intellectual Property Institute (IPI) in London, Dr. Roya Ghafele takes a unique approach in synthesizing the many existing viewpoints in the multi-faceted arena of IP public policy debate.  In an age where these debates are becoming ever more complex and heated, her accessible and balanced summary is useful in providing a thorough primer on the many troughs and valleys in the landscape of the current public discourse. Geographically diverse and ideologically neutral, this tour of current perspectives capably captures the many divergent views.

The paper, entitled "Perceptions of Intellectual Property: a review", explores the many perceptions of the term ‘intellectual property' in public discourse, and aims to "grasp underlying themes, assumptions and connotations associated with the term ‘IP', so as to identify paths leading to a more comprehensive understanding of IP and the opportunities it provides to market participants, consumers, policy makers and citizens worldwide." (p. 2)

Emanating from a premise that language "has the power to create the reality in which we live," Ghafele's methodology seeks to "'dismantle' many of the inherent assumptions associated with the two letter word ‘IP'."  Specifically, the report does not "argu[e] in favour of or against a specific view, but simply ... illustrate[s] the collectively-accepted social truth we all live by when speaking of ‘IP'." That is, it attempts "to demonstrate the linguistic space in which policy makers, business and NGOs operate." (p. 26)

Ghafele structures the report into 4 main areas: IP and Globalization, IP and Health, IP and Counterfeiting/Piracy, and Discourse on various forms of IP.  While noting that each discourse has its own themes and stakeholders, she nevertheless observes that common to all the debates is vocabulary from the domain of war, military, and football.  To that extent, she observes that "the current discourse on intellectual property shows a remarkable polarization of positions, where NGOs can be found at one extreme and business at the other." (p. 30) While I will leave it to the interested reader to read the report in its entirety, I will nonetheless survey some of examples she provides.

Please note that the footnotes have been omitted for the quotes below.

IP and Globalization

The report observes that there are two main camps driving this discourse:

"The one is interested in advancing the knowledge economy, an approach based on the belief that knowledge is the driving factor behind economic growth. The other resides on a belief that IP is a major means to advance the process of globalization.  While the former is strongly motivated by new economic growth theory, as for example advanced by Stanford professor Paul Romer, the latter is based on typical antiglobalization arguments, such as for example the position that the IP system helps multinational companies to build up monopolies to the detriment of the poor, drives small and medium-sized enterprises (SMEs) and local business in developing countries out of business and increases prices for consumer products, be they pharmaceuticals or software." (p. 3)

In the context of discussing criticisms of the Uruguay Round of the TRIPs agreement, the report further notes:

"Since IP gained recognition primarily through the international trade/trade liberalization perspective, rather than through an internal market, innovation, cultural policy or even business perspective, the perceived advantages and disadvantages of IP were primarily assessed through the trade lens. ... Under this paradigm academics have primarily investigated multi-country trade and direct investment surveys or flows, finding either that weaker intellectual property protection policy systems discourage or that stronger intellectual property protection policy systems encourage trade and direct investment. These findings suggest that developing countries will receive more trade and direct investment after intellectual property reform, and these are important research findings-but they say nothing about the domestic innovation effects of reform. Rather, these studies tend to put developing countries in a receiving position and ignore the pool of talent existing in developing countries." (p. 6)

IP and Health

Ghafele observes a similar polarization in the context of IP in its relation to health, noting that "[t]he debate is polemic, passionate and everything other than calm and balanced".  On the one hand, there is the argument that pharmaceutical patents stand in the way of public health by causing important medicines to be more expensive than they otherwise would be.  On the other hand, there is the argument that patents provide the proper incentive for undertaking the expenses involved in developing innovative drugs. 

Despite the polarization, Ghafele points out a minority school of thought that takes "a more pragmatic approach and asks what type of policy choices may work towards obtaining social inclusion and equitable distribution of research and development findings within the existing intellectual property framework." (p. 17)  She describes this school of thought as follows:

"The discipline considers itself as "public interest IP management" and seeks to offer policy choices on how to reconcile the apparent contradiction between the exercise of exclusive rights and the universal right to equitable access to health. ... Public interest IP management argues that the IP system cannot be viewed in isolation, but is part of a wider matrix of policy choices regulating property. It is the successful interplay of a variety of various policies, such as antitrust, free speech, privacy, telecommunications law, tax law, international trade law and intellectual property law that makes or breaks the success of public policy aiming at assuring equity and equality." (p. 17)

IP and Counterfeiting/Piracy

Ghafele notes that even though the TRIPs agreement provided rights holders with "a major breakthrough [that] enabled the internationalization of the knowledge-based economy," (p. 18) the actors in this arena are markedly different.  While governments, industry/trade associations, and police are active in the discourse, there is an absence of NGOs and anti-globalization voices in this debate.  Thus, the seeming counterweight acting against the many international initiatives aimed at preventing counterfeiting and piracy is existing consumer opinion.  

To illustrate this, Ghafele surveys several consumer opinion surveys.  For example, she mentions a Gallup survey which consisted of 65,000 interviews in 51 countries showing that 25% of those surveyed purchased counterfeit goods.  Generally, the cited surveys seemed to indicate that there was a general apathy in the mind of the consumer when it came to consuming counterfeit/pirated goods, regardless of whether they are apparel, bags, footwear, music or movies. The exception was a Microsoft counterfeit survey which showed that 52% of UK respondents considered the purchase of counterfeit goods as theft, and further, that they would stop if they knew other crimes were funded with the proceeds.

Against this backdrop of a seeming consumer disrespect for IP rights and a growing exposure to piracy via the Internet, Ghafele notes that the use of polarizing terminology such as a 'war on piracy' for the 'health' of the economy has emerged.  However, Ghafele's general theme that rational thought instead of emotional rhetoric should prevail can be found in this section also.

First, she notes that the discourse is often framed in the context of legal rights as opposed to business assets - i.e., that "IP ... operates to let players 'defend one's rights and protect oneself against infringers'."(p. 20)   To that extent, Ghafele observes that such discourse "has not recognised that piracy and counterfeiting may have both positive and negative effects." (p. 20)  She elaborates this point by pointing to further studies that indicate that "inimitability of an entrepreneurial firm's IP does not necessarily diminish performance since piracy can increase the value of this resource by stimulating networks and provoking signaling and standard-setting effects." (p. 23).  However, I would note that such studies only concerned software firms, and it seems such arguments may not necessarily be applicable to other goods such as media content or apparel. 

Second, she notes that there has been a large emphasis in quantifying the costs of counterfeiting/piracy.  For example, Ghafele points to a 2007 OECD presentation that estimates the costs at US$ 176 Billion annually, which constituted about 2.4 percent of world trade in manufacturing.  

These latter themes seemingly focus the discourse on the real economic effect of counterfeiting and piracy. To that extent, they provide rational fact-based arguments for understanding why such activities should be stopped.  Though it is not clearly enunciated, it would seem that such arguments are preferred over emotional rhetoric.  

Discourse on various forms of IP

In this section, the author notes that "[a]mong the various forms of IP, only patents and copyrights and related rights emerge as controversial subjects." (p. 23) Ghafele then continues to explore poignant issues with regards to both patents and copyright. 

With respect to patents, it is observed that even though patents are romanticized as providing protection for the individual inventor, they are in fact often used amongst other business facilities in generating profit. Moreover, patents in large corporations are seldom used to exclude others from the stated invention, but rather are used as bargaining chips in licensing negotiations to ensure freedom to operate. 

With regards to copyright, the author points out uncertainty in the online marketplace and freedom of expression as main concerns in current public discourse.


Overall, this report helps to illustrate the vast number of stakeholders that IP touches - and the difficulty in formulating appropriate policy that properly meets the different needs.  In light of this difficulty, Ghafele suggests that the current climate of ideological polarization is not helpful in safeguarding the interests of all parties.  Instead, she suggests that further research should be pursued in a solution-driven perspective "around questions such as managing IP in the public interest or the role of IP in public private partnerships for health or environmental protection." (p. 31)

For further reading, the report is here, and another review is available here.