Food For Thought From Halabi’s New International Economic Order, by Katja Weckström Lindroos

by Guest Blogger — Tuesday, Oct. 2, 2018

My shelves are full of books with colorful stickers and scribbles in the margins. I’ve had heated discussions with the authors, which unfortunately (for all the wrong reasons) remain fictional and trapped in my head. I would like to thank Chris Walker and the Yale Journal on Regulation’s Notice and Comment team for creating the opportunity to share my thoughts on Sam Halabi’s wonderfully thought-provoking work on intellectual property and wealth redistribution in the global knowledge economy.

Halabi positions contemporary intellectual property issues and the North-South dialogue in a historical and “sociological” context that adds layers to our understanding of the recent history of international relations. He adds depth and nuance with coverage of a broad range of unrelated, yet economically integrated, intellectual property themes. By doing so, he creates a bridge between two polarized (political, cultural and legal) debates. In war, bridges are bombed to prevent the enemy from advancing and bringing the artillery within range.

Bridges are central to scholarly debate, since they prevent us from preaching to our own choirs and creating the illusion of agreement or “truths” on contested issues. Halabi presents facts that hammer away at some illusions of truth relating to intellectual property law-making and bring forth a perspective on shifts in economic development. This is refreshing.

Intellectual property law is and always has been highly relevant to the international economic order. The history of international IP law-making is filled with ugly truths to uncover. The fact remains that strong international intellectual property protection is locked in by strategic use of the rule of law. However, only recent history has opened the debate to developing countries as active participants in the making of a new international economic order. In Chapter 4 Halabi explains the strategic intellectual property policy advanced across global institutions against international law-making by Western governments that further the interests of multi-national corporations in developing markets. I find it particularly interesting how Halabi traces the “basic human needs” approach to development that culminates in the Millennium Development Goals (MDGs); shifting focus from short term gains to long term development targets within the international legal framework.

I am less inclined, however, to celebrate the pony express in the age of digitalization. Why do we not replicate the policy models suggested on p. 66 (e.g. China and Tanzania) that have demonstrated measurable effectiveness and traded off with higher rates of economic growth? Certainly, focusing on basic human needs is essential for world development. Yet, should any country not have an IP policy that focuses on its economic growth and capitalizing on comparative advantage, instead of basic human needs or intellectual property protection. I would argue that international law-making should not guide IP policy on regional or international level. Instead, national IP policy should guide alliances sought in international IP law-making. This is so, even if such IP policies do not conform to traditional views of IPRs as assets for wealth generation.

Why is the distinction important? I see three narratives that are particularly harmful to a functioning national IP policy: the development narrative, the North-South narrative and the intellectual property narrative.

First, the development narrative ignores the economic fact that future market growth occurs in developing, not developed countries. Trade is a driver for economic development that equally affects all economies. The rise of wealth in countries with large populations increases demand for goods and services. The development narrative easily perpetuates the mistrust of foreign governments in developing countries in a manner that paralyzes domestic policy-making and outsources economic power for short-term political gains. Mistrust of bilateral investment treaties and international law-making has not prevented foreign direct investment practices that contractually lock-in markets to benefit private actors and channel wealth out of developing economies. It is undoubtedly true as Halabi (and FAO) states that “robust intellectual property protections for agricultural inputs including seeds and pesticides have allowed large agrochemical firms to enter, shape and some cases exercise substantial control over markets in developing countries.”

To me however, this is a clear case of how the development narrative skews debate and policy-making. The same market shift has occurred across agricultural markets all over the world, and farmers and national agriculturally driven economies suffer as a result. Those of us with perfect vision can see the market concentration in the seed industry as elegantly illustrated in the book (p. 115) that naturally affects the global agricultural market. Thus, the real problem is that national regulatory policy is weak and neglects to consider public interest exceptions in existing intellectual property law. Increasing public interest concerns for biodiversity, climate change resilience and economic development remain ideological, if targeted development policy remains separated from economic policy in national decision-making. Countries should not be content with receiving international law. They should endeavor to make the best possible decisions of national policy while complying with international law. Indian IP policy is a good example of an active national policy that takes full advantage of public interest exceptions in patent law. It has fueled growth in the pharmaceutical sector and affected markets across the globe. This is not to say that all policy decisions have carried fruit, only to show that national policy decisions may be taken.

Second, the North-South narrative implies that all developing and developed countries are economically similar and that economic interests are perpetually juxtaposed. In reality, strong developing economies can be regional drivers just as well as developed economies. Weak developing economies may benefit from aligning with developing and developed economies sharing similar interests. For example, the EU advances economic and IP policies in regional trade agreements with favorable terms for agricultural products, which would also reinforce a commitment against dumping European agricultural products in developing markets (Yes, bad EU). Yet, internal policy in some West African countries clouded by mistrust of intellectual property prevents added regional benefits from economic cooperation. While individual countries sign separate agreements with the EU, they perpetuate the power imbalance of the North-South narrative. At the turn of the Millennium, Nigeria was one of the economies with great potential for becoming regional economic drivers. Yet, the North-South narrative has led Nigeria’s internal policy-making away from economically sound partnerships failing to capitalize on opportunities for international trade for 20 years in favor of capitalizing on short term gains in the energy market. Smaller economies like Kenya and Ghana have instead sought partners for growth that would seem favorable for developing economies and indeed translated national economic policy into measurable economic growth.

Third, the intellectual property narrative locks-in international intellectual property protection as a policy tool to influence foreign governments. The narrative benefits existing strong economic actors in emerging markets instead of supporting growth in domestic industries. It ignores the fact that the power to regulate international commercial activity shifts to developing markets with increased consumer spending-power. Halabi addresses some concerns related to expansion of trademark protection and international investment arbitration in the area of trademark law, namely referring to advertising of alcohol and tobacco advertising. I share the concerns relating to the advertising practices in some industries, but I would distinguish these practices from international intellectual property law-making. The practices of fraudulent or misleading advertising in relation to products that are harmful to our health do not necessarily connect to the expanded scope of trademark protection. To be sure, the underlying issues connect to power politics, but the ugly underbelly of investment arbitration is yet another long-standing practice that governments have compartmentalized away from the public eye. Secret negotiations of regional trade agreements deserve scrutiny that I leave to my fellow commentators to address.

For the moment though, I want to focus on trademark law and labeling fraud. Strong trademarks are powerful property and unlike other forms of IP, there is no hiding from the public eye. The public interest behind trademark law is straightforward, yet often misunderstood. Halabi discusses expropriation of tobacco trademarks by plain packaging regulation. While protecting the investment function of trademarks ruffles the feathers of any trademark law scholar it does so for encroaching on the advertising language that connects traders with consumers. Plain-packaging laws prevent the use of advertising in any shape or form to sell tobacco products. I am all for plain-packaging legislation (and against unreasonable compensation), but as a property owner I would feel entitled to compensation, if I was barred from using my property for its intended purpose.

False or misleading advertising is a fascinating field, which deserves much more attention from IP scholars. This area of law is generally excluded from international IP law, which unfortunately excludes the issue from being addressed in many developing countries. The same is true also within the European Union, where national legislation governs. Technical and detailed labeling legislation hardly ever considers the public interest they address, but focus on standards for required information. In the name of protecting consumers, the EU regulation of health and nutrition claims has added a technical barrier to access markets, which disproportionately affects SMEs and food products from developing countries. These regulations target food and the European Food Safety Authority (who unlike the FDA does not issue guidelines on drug regulation) sets a scientific standard for acceptable health and nutrition claims. Once approved, health and nutrition claims are free for anyone to use, if the product properties satisfy set criteria. Negative claims or non-disclosure of health or nutrition information are not addressed by law, as long as standard information requirements are fulfilled. Instead, false advertising law focuses on whether a particular statement is unlawful or misleading in relation to the advertised product. If a product does not contain sugar, it is not legally relevant that artificial sweetener is unhealthy. The law is simply not on top of things.

However, trademark law makes the company interested in what consumers think, because of the impact on the value of the trademark, their property. Consumers may expropriate a trademark without any possibility of compensation. As such, it is a powerful vehicle for relaying positive information to consumers. An SME or farmer collective can build a trademark that connotes quality and utilize the international trademark protection infrastructure to enforce their rights against free riding in far away markets. This is the most under-utilized aspect of international IP law that continues to baffle. A patent is costly and copyrights nearly impossible to enforce globally. Relatively speaking trademarks are neither. I would argue that the policy issue in trademark law is not that property exists or who owns it, it is whether the property infrastructures facilitate and protect lawful transactions. Food fraud is a problem of great magnitude in developing countries and starting to disrupt formal streams of commerce throughout the world. Fraudulent practices target labels and trademarks.

My favorite aspect of Halabi’s argument lies in him translating the “basic human needs” approach into a concrete suggestion of better IP legislation. He recognizes that a commercial seed system is not only sound IP policy, but it simultaneously advances several goals towards sustainable economic development. A policy that recognizes the added power imbalance of gendered decision-making aligns with MDGs, as opposed to juxtaposing development and economic policies. Women play key roles in decision-making relating to seed-saving, farming, producing and consuming food. Women in the developing world are keepers of know how relating to under-utilized nutritious crops and protein-rich insect foods. The demand for this food knowhow is soaring. Why should this not translate to a comparative economic advantage in resource rich nations? Shifting focus from short-term gains to long-term development targets is key to policy change within the international legal framework. Redistributed growth creates wealth, but public interest driven economic policy may redistribute wealth to the many instead of the few. A changed future lies in the actions of the present that avoid us replicating our past mistakes.

Katja Weckström Lindroos is Professor of Commercial Law at UEF Law School, University of Eastern Finland. Follow on Twitter @weckstromkatja

This post is part of a symposium reviewing Intellectual Property and the New International Economic Order: Oligopoly, Regulation, and Wealth Redistribution in the Global Knowledge Economy, a new book by Sam Halabi, Associate Professor at the University of Missouri School of Law and Scholar at the O’Neill Institute for National and Global Health Law at Georgetown University. All of the posts can be read here.

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