21 April 2008
Trademarks -- Not Counterfeits -- Create Jobs, Experts Say
India, Africa, other developing areas can benefit from strong IPR laws
United Nations -- Developing nations stand to be the biggest beneficiaries of strong trademark and copyright laws, experts said at a forum focusing attention on World Intellectual Property Day, which will be observed April 26.
Reform of intellectual property laws, coupled with strong protection efforts, can unleash the technical and creative innovation that has been the hallmark of long-term growth and development in Western economies, the trademark experts said.
Michael Ryan, director of the Creative and Innovative Economy Center at The George Washington University Law School, said that when trademarks and other intellectual property tools are part of national development strategies they can spur growth and prosperity in economic sectors from agriculture and medicine to entertainment.
“We've been told in developing country after developing country that pirates are a good thing because they create jobs. No. Pirates are not good things. They don't create very good local jobs. Instead, what they do is they take away lots of good jobs,” Ryan said during the forum.
“Film pirates do not hire directors, actors, cinematographers, sound technicians and key grips; software pirates do not recruit computer science and business management graduates from universities. They manufacture discs worth a few cents and pay their workers accordingly,” he said.
Bollywood is one of the world's biggest producers of films, yet a fundamental constraint is piracy, Ryan noted. “Piracy has made it difficult for Indian filmmakers to get much return on their investment," he said.
“If they can figure a way to get control of piracy, which is prevalent throughout the distribution chain, they will have an extraordinary opportunity. Bollywood has not yet seen what it will be able to do with both the creativity and profits that will be unleashed,” he said.
Pirates of patented technologies, copyrighted creative expressions and trademarked goods operate multibillion-dollar global industries, but they provide only low-skill, low-wage jobs, according to Ryan. He said they do not comply with good manufacturing practices, but produce poor-quality goods that can be ineffective or downright dangerous. He said they add nothing to the well-being of a country.
Pirates do not open their factories to inspection by health and labor regulators; they do not establish relationships of trust with consumers, nor do they pay taxes, Ryan said.
COFFEE PRODUCTION
Meanwhile, Colombian and Ethiopian coffee producers are brilliantly managing their trademarks and brands, panelists said. Through marketing strategies, quality control and intellectual property enforcement, Colombia has been able to get 10 cents per pound more than market price for its coffee for decades, Ryan pointed out. “That is a remarkable achievement,” he said.
Begun in 1927 by coffee growers, the nonprofit National Federation of Coffee Growers of Colombia has used trademarks, marketing, enforcement and an internal system of accountability to bring international recognition for its coffee. It has meant improved living standards for 566,000 growers and a better price for Colombian coffee on world markets, said Mary Petitt, vice president of the federation.
The federation's logo of Juan Valdez is known worldwide as “a seal of quality” for a good cup of coffee, Petitt said. (See "Juan Valdez Travels the World, Sends Profits Home to Colombia.")
Ethiopia's efforts to get control of the names of three of its high-quality coffees -- Sidamo, Harar and Yirgacheffe -- is one of a number of recent initiatives designed to give developing countries and their farmers and artisans a bigger profit share.
Ron Layton, chief executive of the nonprofit Light Years IP, said that Ethiopia's strategy is to control the brands and change negotiating terms so that the coffee price, and therefore the farmers' income, increases. The country now issues royalty-free licenses that allow third parties to use the trademarks. In exchange, the licensees must advertise the origin of the coffee, educate customers about Ethiopia's coffee and provide information on retail sales.
As a result of the new strategy, Layton expects demand for Ethiopian coffee to grow and bring $100 million to $150 million in additional income to the country each year.
TEXTILE MANUFACTURING
On the other hand, Washington-based lawyer Anthony Carroll said that the demise of traditional textile manufacturing in West Africa is a sad lesson on how a region lost control of its creative heritage and was unable to protect its markets.
In the 1980s at the height of production, 600,000 tons of the unique wax-dyed cotton was produced by more than 100,000 workers. In the 1990s, however, 140 of 180 factories in West Africa closed; the jobs went to China, where most of the traditional patterned cloth now is produced.
INTELLECTUAL PROPERTY PROTECTION AND INNOVATION
After reforms to national intellectual property laws, biomedical companies in Brazil and Jordan have become “very dynamic innovators,” Ryan said. One Brazilian company has turned decades of research toward developing its own products. A Jordanian company, instead of focusing on producing generic drugs, has secured 80 patents worth $5 million since 2006.
Layton said that he already has been approached by a number of developing countries about how they can protect their products and has identified 30 potential industries in Africa that could benefit from intellectual property protection.
