Kuro't Palaisipán

Questioning the Connection Between Intellectual Creation, Commercialization and Commodification : A Challenge to the Intellectual Property Office of the Philippines

By the Development and Intellectual Property Study Group ¹

The National Intellectual Property Policy and Strategy (NIPPS) is an initiative by the Intellectual Property Office of the Philippines (IP Philippines) that seeks to institutionalize the inter-agency coordination on the enforcement of intellectual property rights as well as increase the awareness of the Filipino public about intellectual property. The NIPPS document has since been submitted to President Gloria Macapagal-Arroyo during the first National Innovation Summit last November 26, 2007 and is currently being implemented by IP Philippines as the “Philippine Intellectual Property Policy and Strategy.”

The IP Value Chain: towards a unified IP Strategy

As expressed in NIPPS, the country’s National IP policy is founded on what IP Philippines calls the “IP Value Chain.” According to NIPPS, there are three steps in the “IP Value Chain” – first. is intellectual capital or intellectual assets; second is the acquisition of intellectual property rights; and third is commercialization and value creation.

The third step in the “IP Value Chain” focuses on the creation and exploitation of the economic value of knowledge products. This third step is also considered in NIPPS as the “trigger” in the “IP Value Chain” because it supposedly starts the whole chain once more: “commercialization spurs competition, competition spurs innovation, and innovation spurs creation.”

In the effort to establish a unified IP strategy, it is not surprising that NIPPS places all the different laws under the term “intellectual property” (Copyright Law, The Law on Patents, The Law on Trademarks, Utility Models, Industrial Designs) within the single context of “commercialization.” Thus, cultural production is no longer any different from production for markets or production in general: Folklore is just as subject to commercialization as are industrial designs.

Through the mechanism of the “IP value Chain”, NIPPS asserts the idea that creative and innovative acts are uniformly economic acts and that there exists a correlation between economic incentive on the one hand and innovation and creativity on the other. NIPPS also assumes an unproven economic motivation for all creative acts, and equates the motivations and interests of individual authors and inventors with those of vendors and markets.

The dilemma of “Economic Incentives”

The problem with NIPPS’s principle of “economic incentives” is that such incentives are intimately connected with the marketing and distribution system and the nature of the values system that relates the amount of monetary gain to specific acts (creative or not). This therefore encourages certain acts which are more profitable and discourages those which are not, regardless of their actual social values.

While in practice, one gets what one pays for, however, the complex nature of corporate structures and stockholder-led commercial systems often obscure and confuse the relationship between those who profit and those who must pay the price for the profit of others.

For example, wages are generally higher on the international market than the local market, so the incentive is for creative people to work for international companies or to market their products through these companies. Under these conditions, it is highly unlikely that “economic incentives” can ultimately benefit the national economy. In fact, the loss of intellectual and creative resource is the more likely outcome: local talent will be encouraged to support the gigantic global companies and not remain in the country to inspire others by playing a role in the development of local traditions through education and training. Instead they are likely to promote the values of the international companies that employ them or distribute their products. This then presents an economic disadvantage to their fellow countrymen involved in the disparity between the profit made from exporting local products when measured against the cost of importing foreign products or even locally designed products distributed via the global marketing system.

The strategy of the NIPPS is based on the assumption that exploiting the economic incentive benefits all those involved -by promoting commerce and industry in the commercial sector. The neutrality of this assumption needs examining further.

Generally, it is the normal task of the government to utilize the economic advantage through the fiscal and legal systems to shape the development of the kind of society its members wish. By handing this task over to anonymous so called “market forces”, controlled not by governments but entirely by the self-interest of giant multi-national corporations, the democratic power of national government is completely undermined. Socio-cultural fine-tuning in support of local needs then becomes virtually impossible. The interests of mega-corporate business places the emphasis on the attainment of purely economic ends at the expense of broader social-cultural means which results in a dulling of the sensitivities of the members of society to things that really matter. The shift of focus towards “edutainment” obscures a more critical analysis of societal problems and distracts the public perception away from the systems and mechanisms that are actually consciously or unconsciously manipulating them. With control of the world back in the hands of the global commercial monopolies one can see that even the existence of a “free-market” becomes a myth.

The scheme of intellectual property rights promoted by NIPPS thus destroys the social incentive to creative work in a manner that only promotes the commodification of knowledge: In the long run this will impede the production of useful knowledge because commodified systems of production promote homogenous and sterile environments completely divorced from the day-to-day needs of the people. The recent failure of the global financial system shows that when the global commercial system fails, it is still governments that must come to the rescue. Thus not the other way around, as we are constantly told by organizations such as WTO and WIPO and are apparently forced to accept if NIPPS is implemented.

Economic growth and social well-being

NIPPS also talks about an understanding of “the interdisciplinary nature of IP.” However, actually underlying this “interdisciplinary nature of IP” is an economic fundamentalism that drives the race to respond to a global economy shifting into a “knowledge economy.” According to NIPPS, this trend drives a shift from tangible to intellectual assets, and, acknowledging the Medium Term Philippine Development Plan 2004-2010, “imbibing new knowledge and bringing the products of that knowledge to market are keys to success in the knowledge century.”

Here, the education and enforcement strategies of NIPPS purports to bring about both economic growth and social well-being, and that “the promotion and protection of intellectual property spurs economic growth, creates new jobs and industries, and enhances the quality and enjoyment of life.”

But isn’t it ironic that one has to launch an education and enforcement campaign about a concept which is supposedly so evidently crucial to the quality and enjoyment of human life?

What, ultimately, does “knowledge to market” mean to social well-being?

In reality, market forces inevitably create the kinds of products and social effects that are given value by the market itself. This “market value” is largely irrational and has developed sophisticated financial investment techniques which completely divorce it from primary human needs. Ultimately, market forces often operate in ways that are often against the interests of the community that is exposed to them.

For example, if one owns a large supply of water then a large scale water shortage is to one’s economic advantage. On the other hand, a large scale water shortage would obviously have disastrous consequences for human life. So rational water management from a human perspective would aim at maintaining an adequate supply of water which would presumably keep prices low.

However, economic incentive principle would dictate the creation of a life threatening emergency situation that would drive prices up. One sees similar mechanisms active in education. A humane society would develop education based on increasing the ability of citizens to live an enjoyable life while contributing to social development, whereas an economic-based approach would require the substitution of social interaction and the ability of citizens to satisfy their own needs with an education geared for opening up markets based on the sale of products that act as substitutes for the basic needs that they are no longer able to provide for themselves.

NIPPS therefore actually endangers both the social and the economic sustainability of the Philippines.

The economic incentive and the loss of diversity

The IP Philippines crafted its policies and strategies for NIPPS in response to “emerging trends and developments in IP in the world.” One such trend and development is the shift in business management. According to NIPPS, “With competition among companies intensifying on a global basis, companies now need to be constantly supplying differentiated products and services, and for this reason, knowledge has become an important source of differentiation in products and services.”

Differentiation in products and services ultimately mean market differentiation. In reality, markets are increasingly in the hands of a few global companies against which communities and individual authors and innovators are almost powerless. For many authors, for example, the spread of ideas may be more important than the profit principle, but profit may be the exclusive motivating force for the companies but not so with the authors.

In many cases, innovation may actually be against the companies’ interests. A large scale globalized economy requires the large scale marketing of mass produced products. As often happens, global vendors usually kill product lines that do not appeal to mass audiences, while for truly creative innovation, a long period of sustained experiment is required. This is only possible through the support of small audiences composed of “social innovators” prepared to finance the development of un-marketable experimentation.

Sociologically, there is not a single market but a layered system of social classes each of which have their own role in innovating change. But with responses and policies aligned to competition on a global basis, this “social ecology” is being undermined. The result is that innovation will cease just as agricultural systems also become unsustainable when mono-production destroys the multi-functional value of biologically or culturally diverse systems.

The Challenge

At the recently concluded forum “Should NIPPS Be Nipped in the Bud ?” held in Balay Kalinaw UP Diliman, Quezon City, we undertook an evaluation of NIPPS from the perspectives of Biodiversity and Farmers, Traditional Knowledge and Indigenous Peoples’ Rights, Artists, Workers, Education and University Innovators and Researchers, Public Health and Access to Essential Medicines.

One of our challenges to IP Philippines as a public institution is to take responsibility in the assessment of its actual role and effect in facilitating meaningful development – sustainable social and economic development of the country– as the priority, rather than its WIPO-mandated goals of “promote, protect, commercialize and market intellectual property.”

Can the promotion of “intellectual property” actually provide for education for intellectual creation and innovation rather than education intended specifically for “intellectual property” protection? Can the commercialization of “intellectual property” under the current global market system provide for appropriate agricultural development as priority rather than a corollary of profits for multinational corporations? Can the protection of “intellectual property” substantially contribute to public health where we may be able to identify essential medicines and produce them in our own country so that our people may afford them?

If IP Philippines were to tackle meaningful development and address these questions then perhaps the country’s development will take precedence over “intellectual property” to actually benefit the people directly.

We would like to see IP Philippines take up this challenge.