JUNE 8, 2003
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Q&A With Jack Dangermond
Meet the President of the California-based Environmental Systems Research Institute, a $480-million Geographic Information System (GIS) company. The man was in Delhi recently to sign an MoU with the Department of Science and Technology (DST) for the 'Mapping Your Neighbourhood' project. So what's this all about?


Village Women
Could Hindustan Lever be on to something big? Its Shakti project is a micro-credit programme that intends to get rural women organised into self-help groups, and that too, in such a way that raises their purchase budgets manifold. This just might be the way to crack the rural scene. A look at the potential.

More Net Specials
Business Today,  May 25, 2003
 
 
Nine Lives of Copycat


The recent supreme court ruling staying the telecast of a daily soap based on novelist Barbara Taylor Bradford's bestseller, 'A Woman of Substance', has yet again brought to the fore the contentious issue of copyright violation. As the novelist herself points out, the world is shrinking and gross violations of copyright such as this one can no longer go unnoticed. That should certainly stem the creative juices of Bollywood badshahs, many of whose 'hits' have been blatant lifts from Hollywood flicks. Now the broadcast industry in its own quest for the hit formula has very simply decided to tread on the same ground.

Films, media or broadcast, however, are by no means the only violators of copyright. The issue really is one of Intellectual Property Rights (IPR) violation whereby the right to an idea is vested with an individual who has laid claim to the generation of that idea and as its innovator would need to be compensated whenever the idea is used. IPR broadly encompasses the rights belonging to individuals in the form of copyrights, trademark rights and patent rights. If this simple definition be applied then everyone right from the cable operator who lifts signals of a channel to insert his own advertisements to the counterfeit products manufacturer who causes substantial revenue erosion for MNCs like Lever, is a violator of IPR. Why even a commonly accepted practice like reverse engineering of in-patent drugs by domestic pharma companies would be construed as a violation of IPR once the patent regime comes into force in India.

Several developing countries including India have been put on the United States 301 Priority Watchlist on grounds that domestic IPR legislation is not in tune with international requirements. While these allegations are debatable it might be worthwhile to delve into the core of the argument. At the core of it all is affordability of products and services whose IPR cost needs to be factored into the price of the product. And this becomes particularly relevant in the case of developing economies where the cost of most products and services would turn prohibitive once the IPR cost is included.

Let's take the case of software where high prices coupled with the ease with which it can be copied have resulted in rampant levels of unlicensed software in developing countries, particularly China where the pc shipments far exceed the numbers in India but the amount of software sold by MNCs is almost the same in the two countries. That means that a majority of Chinese users simply thrive on unauthorised software. The issue of IPR and the resultant monopolies is one that has taken epic proportions in this sector, which also has the unique distinction of taking the bull by its horns through the revolutionary open source movement. But that is another story.

A more pragmatic way to address the issue would be to look at the cost heads of IPR protection and the mechanisms available to address these issues particularly in the context of developing economies. Why do IPR-protected products cost as much as they do? The process of registering IPR itself is an expensive one and all IPR barring copyright is territorial and has to be registered individually across territories. Enforcement is also country-wise and carries its own cost. Finally, the IPR regime includes just two parties-the innovator and the user with practically no room for a third-party unless the compulsory licence clause is applied. The compulsory licence is a provision that allows for the government to step in case of emergencies or to address issues of affordability. The provision is almost never used by governments for fear of the political signals that it would send out. A judicious use of the compulsory licence coupled with a kitty to compensate the innovator could be one measure to handle IPR violation issues. And there is the competition law, which comes into play when someone is perceived to be overcharging users. This law saw Microsoft being hauled to the courts in the famous anti-trust case. The issue finally boils down to one of a balancing act that involves compensating the innovator even as users are spared undue costs. And this is the issue that governments and trade bodies in developing economies are going to have to address as the world economy gets integrated.

 

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