THE European Commission has reportedly provided one million euros to Pakistan for a project aimed at strengthening the protection and enforcement of intellectual property rights.
The project is a three-year trade-related technical assistance programme (TRTA) phase 11. It was launched in Karachi last month by the World Intellectual Property Organisation. Usually, when developing countries are engaged by the WIPO for technical assistance, the path they take is that of WTO-plus.
Ever since the creation of the WTO and adoption of Trips agreement, the West has been too anxious to set higher standards of IPRs, usually described as WTO-plus in the developing countries, notwithstanding the inadequate implementation of the WTO/Trips rules. This has kept the developing countries encircled in the standard-setting process controlled by Washington, New York, Geneva and Brussels — places where new ideas about intellectual property are born. The purpose of the EC project is apparently to enable Pakistan come out of IPR lag and help it develop a culture of compliance without which it cannot catch up with its trading partners. The only option before Pakistan, in the West’s view, is to upgrade its intellectual property infrastructure and enforcement mechanism in tandem with global trends if it wants to have access to foreign investment as well as the markets in the West for its exports. Even technology transfer from the West is unthinkable without formulation and enforcement of a stringent IP regime. Foreign companies would seldom transfer advanced technology or invest in research and development facilities in countries where their patents are stolen.
The new chairman of Pakistan’s Intellectual Property Organisation (IPO), Hameedullah Jan Afridi, who was till recently federal minister for environment, seems to be well aware of the realities and the challenges ahead. On July 22, he expressed determination in an interview to earn a respectable place in the US Trade Representative’s list of performers where it is on priority watch list which means extremely poor implementation of Trips agreement.
It is clearly evident that making IPO an efficiently functioning body, much less a strong body, has never been a priority of the successive governments. As a result, nothing is in proper order in the IPO even after six years. Only 20 seats are filled at the headquarters against the sanctioned strength of 75 (2008 figures) despite having spent Rs503 million during 2005-2008. Even the ordinance which created it has lapsed and it has ceased to exist legally.
Afridi says, “we are putting our house in order by re-introducing the lapsed legislations and also re-structuring the organisation to give it a new look by facilitating the local companies for registration of property rights.” So far, he says, the IPO had been directionless but now he intends to cut down dependence on government grants and ultimately make it an autonomous body.
In April, soon after he took over as the IPO chief, he felt so upset by the dismal conditions in the IPO that he thought it deserved, “world economic sanctions.” The IPO has failed to meet the objectives it was created for, he said. One reason for the sorry state of affairs was in-fighting between the previous chairman and the director-general. They had submitted two separate drafts of legislation to the ministry of law for reviving the organisation and had given more powers to themselves in their drafts.
Meanwhile, piracy, theft and counterfeits of the IPRs has increased dramatically in the country and the industry thinks the government is losing about Rs9 billion annually in sales tax, excise duty, customs and other taxes. Piracy in cable television, music and software is more than 90 per cent, resulting in what one would estimate to be over one billion dollars loss in tax revenue.
According to 2010 study by Business Software Alliance (BSA), Pakistan is rated among top 15 countries known for the highest rate of software piracy. The rate in Pakistan is 84 per cent, which means that out of every 10 PCs, eight are running unlicensed software. Pirates’ syndicates are directly profiting from the manufacturing, sale and even export of counterfeit software. Pakistani customers, even if they are aware of the crime, do not resist or boycott for they are also the beneficiary. The study says that BSA’s efforts to contain software theft in Pakistan are making some difference.
Meanwhile, the global piracy rate has increased from 41 to 43 per cent due to fast growth of piracy markets in China, India, and Brazil.
The US government has traditionally used the tools of trade policy to seek stronger intellectual property laws and their enforcement. Examples include bilateral trade dialogues, communicating concerns through the Special 301 Report, persuading trading partners to protect American intellectual property through agreements such as the Anti-Counterfeiting Trade Agreement, the Trans-Pacific Partnership, and, when necessary, asserting their rights through the WTO dispute settlement process.
The US Trade Representative’s office publishes a Special 301 watch report every year showing the state of compliance/violation of IPRs of American companies in individual countries. The latest report issued in May this year shows Pakistan being on the Priority Watch List. It reports some progress in the enforcement of IPRs in 2010 and improved cooperation between the copyright industry and enforcement authorities. However, widespread piracy, including book piracy and piracy of software programmes in enterprises, as well as trademark counterfeiting, still persist.
Intellectual property which to Americans is also an investment activity originally aimed at protecting invention and innovation of chemical industry in the 19th century Europe rather than being a hegemonic trade tool as it has come to be now. Reports show that the US is losing its edge when it comes to innovation. A study by the National Association of Manufacturers ranks the US eighth, with Singapore, South Korea, and Switzerland at the top. And when it comes to patents, America is no longer on top. In 2008, the US Patent & Trademark Office issued more patents to foreigners than to Americans. So, manufacturing, research and development continue to migrate to emerging markets.