Patents are the lifeblood of creative and innovative societies. If governments don’t protect ideas, pirates will plunder the intellectual property.
Brazil, which enjoys special trade benefits with America, is home to some of the most pervasive IP piracy in the world. U.S. companies estimate piracy of intellectual property in Brazil alone cost them $932 million in lost sales last year, up from $785 million in 2003. It’s such a problem that the United States is considering suspending those privileges, which allowed Brazil to export roughly $3.2 billion worth of goods duty free into the U.S. in 2004.
By contrast, China and India are moving in a positive direction.
Long a nation that made inexpensive goods and worthless trinkets for other countries, China has recently discovered its entrepreneurial side. And with the growth of Chinese IP and foreign investment, protecting patents is suddenly a high priority.
India, which has previously not recognized international patents, is traveling a similar route. Indian companies, especially pharmaceutical interests, have begun to innovate and need the protection of patents. In March, India’s parliament amended national law to create a stronger, albeit imperfect, patent protection regime.
In both nations, the extra attention to patents not only benefits domestic firms, it helps attract foreign capital. Companies don’t like to risk their investments in nations where their intellectual property is subject to piracy.
Strong patent protection also benefits consumers. Consider Brazil, which threatened to break the patents on five AIDS drugs made by international pharmaceutical companies so domestic companies can make the drugs cheaper. That’s one way to ensure that the companies whose patents are broken will not be selling their next generation AIDS drugs, or any other medications for that matter, in Brazil.
You know the old maxim that necessity breeds invention. Well, we need to add that invention breeds invention protection.
China and India are learning that lesson. If Brazil ever wants a dynamic entrepreneurial society, it will have to learn that lesson also.