International IP Shelters: A Regulatory or Deregulatory Move?

by Chris Walker — Thursday, Oct. 4, 2018@chris_j_walker

I am not, as Jeff Pojanowski described himself in his contribution to this symposium, an “administrative law scholar in the fustiest sense of the term.” Sure, I too have written about Chevron deference and judicial review. But I pride myself as a scholar who researches in the bureaucratic trenches, examining how administrative law actually works in regulatory practice. I’ve even dabbled a bit recently on research at the intersection of patent and administrative law (and write up this review while in Iowa attending a symposium on the subject).

Yet, like Jeff, I feel wholly unqualified to review Sam Halabi’s important new book Intellectual Property and the New International Economic Order. I am no position to respond to the main arguments of the book, much less grapple with the book’s interaction with the underlying literature.

That said, as a foreigner in this international intellectual property world, I sure learned a lot. Halabi does a masterful job of explaining the history and evolution of what is now the new international economic order and the interaction between global wealth and intellectual property. He deftly illustrates this history and evolution with engaging case studies, such as vaccines, seeds, infant formula, and tobacco. Through these examples, the lay reader can easily grasp the central role that intellectual property has played in global wealth creation and redistribution (or the lack thereof).

As an outsider to this field, my intuition would be that strong international intellectual property rights would largely benefit the wealthy, allowing global firms to maintain high prices even in the developing world. That is definitely a large part of the story. But the more surprising and fascinating chapters in this story appear in Parts III and IV, when Halabi introduces what he coins “international intellectual property shelters.”

As Halabi explains, low- and middle-income states have engaged in regulatory efforts — IP shelters — to narrow or eliminate firms’ intellectual property rights that have been guaranteed in international agreements. These regulatory measures themselves have helped bring drugs, vaccines, seeds, and other technologies to developing countries at an affordable price, and they also have indirectly prompted global firms and other countries to restructure incentives for firms to provide access to IP-protected goods in developing countries. Again, Halabi uses rich examples to demonstrate international IP shelters at work in the context of patent, copyright, and trademark law.

Halabi concludes with two main arguments regarding the effect of international IP shelters. First, they are powerful tools to redistribute wealth and encourage technology transfer (ch.14). Second, they are regulatory alternatives to antitrust/competition law (ch.15). “As forms of regulation,” Halabi concludes (p.228), “intellectual property shelters’ design will ultimately determine how well they achieve their objectives, whether those are protection of global public welfare or merely efforts to redistribute wealth from rich to poor or vice versa, and in which contexts additional shelters are likely to emerge.”

Visualizing IP shelters as a regulatory tool, however, leads this administrative law professor to ponder the nature of the regulatory tool: Is this a tool to regulate or deregulate? (This pondering benefited greatly from reading an early draft of Jonathan Masur’s contribution to the Iowa Law Review‘s Administering Patent Law Symposium that takes place tomorrow.)

The answer to this question may turn on one’s view of the nature of intellectual property, which is reminiscent of the Supreme Court’s decision last Term in Oil States that patent grants are public rights — not private rights — as a constitutional matter, at least under Article III and the Seventh Amendment.

If IP is viewed in terms of a government-conferred license or permit — a grant of a public franchise, to which Justice Thomas analogized a patent grant in Oil States — then IP shelters that eliminate strong IP rights are efforts to deregulate. They eliminate the regulatory barriers to others more freely utilizing and borrowing from publicly available ideas and inventions.

If, on the other hand, IP is more properly viewed as essentially just another type of property, it is less clear whether the removal of such property protections should be deemed a deregulatory move. Indeed, if IP is property, one could reasonably view an IP shelter as a dramatic regulatory, as opposed to deregulatory, intervention into one’s personal property. (Of course, this regulatory-deregulatory distinction is further complicated by the fact that we are dealing with international IP law where, as Daniel Hemel explains in his contribution to the symposium, there are various theories for why countries agree to comply with international agreements that protect IP rights.)

This debate about the nature of IP is of course not new. And it does not, and probably should not, play a central role in Halabi’s book. But whether IP shelters are regulatory or deregulatory could help compare IP shelters as a regulatory alternative to antitrust and competition law.

And whether an action is regulatory or deregulatory matters, at least as a political matter and maybe even as a legal matter, in debates about the future of the regulatory state in the United States. Is this regulatory-deregulatory blurring limited to the oddity of IP rights? Or does it have implications outside of the context of IP? Regulatory contexts such as immigration and environmental protection come immediately to mind.

In all events, I learned a lot from reading Halabi’s new book, and I highly recommend it to others who want to better understand the role of intellectual property in the global economy.

 


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.

Cite As: Author Name, Title, 36 Yale J. on Reg.: Notice & Comment (date), URL.

About Chris Walker

Christopher Walker is a law professor at The Ohio State University Moritz College of Law. Prior to joining the law faculty, Professor Walker clerked for Justice Anthony Kennedy of the U.S. Supreme Court and worked on the Civil Appellate Staff at the U.S. Department of Justice. His publications have appeared in the California Law Review, Michigan Law Review, Stanford Law Review, and University of Pennsylvania Law Review, among others. Outside the law school, he serves as one of forty Public Members of the Administrative Conference of the United States and as Vice-Chair of the American Bar Association’s Section on Administrative Law and Regulatory Practice. He blogs regularly at the Yale Journal on Regulation.

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