WIPOD – Page Points: Transcript of Episode 13

Intellectual Property and Trade

Antony Taubman:
I now work in something called the World Trade Organization. We don't have a definition of trade. It's unlike WIPO, WIPO, the WIPO treaty does at least seek to define intellectual property. We don't have that in the World Trade Organization. And I find that fascinating because it leaves open the possibility for rethinking what trade is, and in particular, how to recognize, how to work with the knowledge component of trade.

Lise McLeod:
Digital technology has transformed business models based on intellectual property, and IP transactions are forming an integral part of global production chains. Innovators can now access new trading platforms, which are creating new business opportunities, while also increasing attention paid to how we can best make use of the opportunities provided by the knowledge economy. 

Hello, Page Points listeners. I hope you're doing well today. I am pleased to welcome Antony Taubman on the podcast, who is joining us from the World Trade Organization, where he is the Director of the Intellectual Property Division.  Antony is here today to discuss a book that he co-edited entitled ‘Trade in Knowledge, Intellectual property, Trade and Development in a Transformed Global Economy’. Welcome, Antony.

Antony Taubman:
Thank you very much. Great to be kind of back with you in WIPO.

Lise McLeod:
Excellent.  When I read the title of the book that begins with ‘Trade in Knowledge’, I was wondering about the word knowledge.  Could we begin with defining what is meant by knowledge in this context?

Antony Taubman:
Yes, it's a fair question because it's a title, I suppose, that's there to get attention, but it doesn't necessarily convey a lot of information in itself. There's no intent to have a formal definition of knowledge, or even the knowledge economy. It's more to get the idea across that trade and the transmission of knowledge, the sharing of know-how, the sharing of how to do things, are interrelated, and in kind of surprising ways, in ways that are changing over time. It’s a bit paradoxical because knowledge by definition is something that can be shared. Thomas Jefferson and all of that. If you light your taper at mine, I retain the light and you have light as well. So what's it mean to trade in something that can be shared in that way? So it picks up some of the paradoxes that we're dealing with. But loosely speaking, yeah, it's a focus on technological knowledge, inventions, know-how, but also much more loosely creative content, artistic and literary works and so on. So the kind of content that intellectual property systems typically recognize and protect.

Lise McLeod:
How about if you could clarify for us - and I know this is a complex question – the relationship between trade and intellectual property.

Antony Taubman:
It's something that matters to me a great deal personally, because it's more or less why I took my current job. The sense that there is a very complex interrelationship, but one that we're still wrestling with.

I now work in something called the World Trade Organization. We don't have a definition of trade. It's unlike WIPO, WIPO, the WIPO treaty does at least seek to define intellectual property. We don't have that in the World Trade Organization. And I find that fascinating because it leaves open the possibility for rethinking what trade is, and in particular, how to recognize, how to work with the knowledge component of trade.

Really the way I'd frame it is to say that however you want to look at it, it has undeniably radically transformed over the past twenty-five, thirty years, that was really the impulse behind this book, because we do in the WTO famously or infamously have an agreement on the so-called trade-related aspects of intellectual property rights.

This concept emerged in the mid-80s, more or less as a device, as a diplomatic mechanism to get intellectual property quite literally on the agenda of trade negotiations, but it was without any common understanding as to what were those trade-related aspects of intellectual property rights.

And indeed, when this led to negotiations on what ultimately became the Agreement on Trade-related Aspects of Intellectual Property Rights, the first two or three years were spent debating exactly that question. What are the trade-related aspects of intellectual property rights? And I guess at this time we’re talking about the late 80s, early 90s. The working sense was, well, trade is in goods. Trade is stuff that you, as the phrase goes, stuff you can drop on your foot, stuff that gets packed into containers and shipped across borders. And there's somebody with a clipboard at the border counting the number of goods that are entering, and that's your trade.

That certainly made sense at that time and we're sitting in Switzerland right now. You could work out at that time what was Switzerland's trade in music, what was Switzerland's trade in publications, in even audio-visual works, films and so on. Because it was all on physical things, physical media that would be packed up and shipped across the border. They'd be measured as trade in goods. And the IP part was really just a way of thinking about the content embedded in those disks, those books, those journals, whatever. And that, if you like, was a kind of trade in knowledge products or trade in creative works. That was the situation through the late 80s, early 90s.

And I think the WTO agreement on intellectual property, the Agreement on Trade-related Aspects of Intellectual Property Rights, or the TRIPS agreement, that was concluded with that in mind. But curiously, at exactly that time, just down the road from the WTO, just down the road from WIPO at that time, Tim Berners-Lee was in the very process of inventing the World Wide Web. We know that the negotiators working on these trade-related aspects of intellectual property rights were not aware of that development, they were simply unaware of it.

And yet, as we now know, 30 years later, the diffusion of the internet, the development of the web as a means of diffusing, sharing, enjoying, trading in knowledge content, creative content, it totally transformed the way we work with intellectual property and the content that it covers, but also, and this is ultimately where we are now, how that content is traded because Switzerland's trade in music is certainly not limited to the piles of vinyl or optical disks that shuttle backwards and forth in containers. It's almost entirely through the passage of bits and not atoms. And that's the transformation in the way that we trade in knowledge, to use the slogan. That's the transformation that we wanted to explore in developing this book.

Lise McLeod:
If I remember correctly, TRIPS came about in the 90’s?

Antony Taubman:
The text was agreed in 94. The text was largely agreed already by about 91. But yeah, it came into force legally in 95. Technically 96 for some countries, 2000 for others. But conceptually, it's a child of the early 90s.

Lise McLeod:
And to think of how much has changed since that time, and the influence of the technology and the Internet as you mentioned. What about the challenge with regulating the knowledge – the relationship between the need to share and the need to recognize and reward. You mention the two paradoxes when looking at this relationship. Can you expand on that?

Antony Taubman:
Yeah, absolutely. I'm very keen on those two paradoxes, partly because they're so fascinating, they're quite tantalizing, but also to my mind, they go to the very heart of the policy challenges. So it's not simply an abstract or academic interest. It really goes to the heart of these challenges. The first paradox is the following, that in trade negotiations, the mindset is automatically zero sum. The very existence of the TRIPS agreement, the WTO agreement on IP, is seen historically in itself as a concession, as a trade-off, that developing countries would agree to it, provided they got benefits elsewhere. So the very agreement was seen in zero-sum terms. And more generally, in trade negotiations, the dynamic typically, conventionally, is zero sum.

So if I want market access or benefit from your system, I'm going to have to pay for it. And the calculus is in principle or supposedly that zero sum where at least everything I give away is duly paid for by you. I have my doubts as to whether that really is what happens, because if you expand that to a multilateral level, it's almost impossible for any human mind to process all those different trade-offs and make sense of it. But there's no doubt that that's conventionally the driving instinct that pushes forward trade negotiations. And yet we're dealing here with knowledge with creative works that thanks in part to the technology we've been bestowed with, are virtually infinitely reproducible. We're not dealing in a situation of scarcity. On the contrary, we would just have virtually unworkable quantities of knowledge, creative works in a way that would have been unthinkable even 30 years ago.

And that leads to the second paradox, which goes to the heart of the intellectual property system, because we say that knowledge goods are non-rivalrous in the jargon. In other words, if I happen to have, unlikely, if I happen to have useful knowledge that's useful for you, or creative works or a performance that that others might like to experience, again, unlikely, but let's say. Well, that can be shared, that can be made available, and the original is not lost. It's not the same as a physical book, a physical item. Either you possess it or I possess it or we fight over it, but both of us can't have it.

And yet, the intellectual property system is based on creating restrictions on how otherwise non-rivalrous products, non-rivalrous goods, can be shared, can be reproduced. And yet it's not doing this in principle purely for the sake of locking things down. It's doing this in principle, to promote and encourage the creation of these knowledge goods.  So, as I like to put it, through exclusive rights, it's producing inclusive ways of sharing material, sharing creative inventive products. And that is paradoxical. This is why I think for the person in the street, a lot of intellectual property law can be rather counterintuitive, and we saw this very acutely in the COVID-19 pandemic, we continue to see it, the idea of why would you have exclusive rights over something like a vaccine where overwhelmingly, unquestionably, urgently the public good involves sharing this, making this widely available.

But there is that paradox at the heart of intellectual property law as well. We seek to promote the production and even the sharing of knowledge goods, non-rivalrous knowledge goods, by creating exclusive rights over those. And okay, that's another podcast, another lecture and so on. But those two paradoxes, I think, go to the heart of the policy challenge today. And I think it's come all the more into focus these days, because we do have the realistic possibility of virtually unlimited sharing of knowledge products and creative works, which was just not the case 30 years ago.

As a spotty teenager, I remember really fighting over access to particular vinyl discs that were very, very hard to get hold of. My children's experience is exactly the opposite. They have seemingly tens of thousands of works that I could never hope to see. So this is a fantastic development, but I think policymakers and certainly legislators treating negotiations are still scrambling to catch up.

One of the really inspirational quotes that I draw on in my conclusion to this book is in fact from the economist Paul Romer, who is the Nobel Economics Laureate for 2018.   He was given that honour for his work exactly in this field. And in his Nobel speech, accepting the award, he dwells on exactly these points. So here you have a real serious hardcore economist really talking in the most utopian terms about how we all benefit from moving beyond, as he puts it, the Pleistocene Age, where we are scrambling for survival in an environment of scarcity. And, you know, I get access to this resource, or you do, and we may literally fight to the death over it because it's a matter of survival. He says we're now in a situation where if we understand knowledge goods as infinitely shareable, not only can I share my knowledge with you, or vice versa, without losing out. But indeed, I benefit from the fact that you can take up my knowledge and work with it and create with it or develop new inventions, new products that I benefit from. So as he puts it in this very utopian Nobel Laureate speech, we move to a situation where we actually benefit from the presence of others rather than being locked into this Pleistocene, zero-sum world dominated by scarcity. Very utopian, but really quite an inspiring idea and that's certainly what drew this book forward and why we thought it would be really worth teasing out these ideas and confronting these apparent paradoxes.

Lise McLeod:
As a co-editor, you were able to gain a bird's eye view of the different aspects and perspectives of the contributing authors. And from what you just said, it sounds like there is an argument for an opportunity for a more equitable social and economic system. As a co-editor, in your concluding remarks, the authors’ contributions were divided into four areas: 1. conceptual clarity, 2. better data and better use of data, 3. insights for policymakers, and 4. implications for government. So, four very substantial areas. If I could invite you to expand on that – and to also ask you to include your thoughts on patent data as a guide for policy makers.

Antony Taubman:
Absolutely, absolutely. And I mean, what I'd love to do at this stage is to acknowledge all of our fantastic authors, but that would consume, I think, all of the bandwidth we have available. So I really encourage people to explore the book and get into touch with the authors and myself for more details.

But yes, that's the conceptual framework we worked with. The first point on conceptual clarity. This comes from a recognition that the way we talk about trade these days still doesn't grapple with the true nature of the way intellectual property functions in international transactions. It's very challenging and our authors dig deeply into this, but I would present two, I think, quite clear examples. One is the development of platforms of downloadable materials. My own chapter starts with the example of Lil Nas X, an American rapper whose song Old Town Road was enormously successful, set new records for charting success in 2019. 

The beat for that was actually licensed, purchased as a license on a beatbox, on a platform designed for purchasing internationally, purchasing licenses to use certain beats. It's got hundreds of thousands of beats. He purchased a license and then built on that and created an enormously successful song. Consumers have access to various platforms for downloading songs, for downloading other material, downloading apps. And what's striking is that in each of these cases, we take out, if we're paying for something, if we pay our 99 cents or whatever, we are purchasing an IP license. And if you scroll through your 44 pages of terms and conditions, you'll find somewhere, normally the statement: ‘you are not buying this content, you are buying a license.’

Now, there are now hundreds of billions of such transactions every year, cross border transactions and for that fortunate half of humanity that have effective internet access, the digital divide is another issue of course, but this has now become a fairly routine way of trading in content, purchasing content. And yet, our trade statistics, don't really capture this. One of the chapters that looks into this quite deeply. There are, if you like, known unknowns, and that is the development, trade, economic implications of these many billions of international transactions that we think can and certainly should benefit creative people, innovative people in developing countries, those that have been traditionally excluded, effectively excluded from international markets. But the conventional trade data doesn't capture it, ironically, because it is virtual. It is not concrete. It's not in the form of physical things, physical carrier media crossing borders. But it's terribly important and very important from a development point of view, but very difficult to track, but we certainly need to build those understandings into how we see trade, but more importantly, how we see international trade can support more equitable international development.

And the second example, the dispersed global production chains, best known for, if you like, consumer tech such as smartphones and so on, which are, again, typically tracked and traced as trading goods. So if the US imports a smartphone valued at $1,000, that counts as a trade deficit of $1,000 to the US. But if you unbundle it and look into it, of course, a huge amount of that value is in the form of IP licenses. The actual raw materials and the labour involved in packaging the thing, assembling it, not so much.

But again, we have real difficulty because it's virtual, because it's not material, in mapping and understanding that complexity of the international IP transactions, the licenses that go into that product. But it's very important to do so, not only, if you like, just for more accuracy of the data, but more importantly, to understand the knowledge flows, what the economists call the spillovers, the knowledge spillovers that many developing countries are looking to as part of their technological development, because their participation in different ways in these global production chains is shown to be a means of diffusing knowledge and embedding it in their economies. And a couple of our chapters really analyse this very closely and demonstrate this phenomenon.

So it's intriguing to think about how the ability to trade in disembodied IP or digital products has redefined trade, broadened it, made it more diverse, in some ways made it more accessible to those who are otherwise excluded. But it's also incredibly important if we want to understand the knowledge foundations of development in areas that many governments, many societies are really looking to achieve sustainable social and economic development. One of the impulses for this book in fact came from a discussion with trade minister from a Central American country who was asking me, “Look, okay, there's all this stuff about agricultural trade and all our usual things, but what I'm really worried about is the fact that we have an incredibly well-educated, very cyber savvy, very enthusiastic, very smart, younger generation and we're not finding jobs for them. What can you do?”

And as somebody dealing with intellectual property in the World Trade Organization concerned as we all are about promoting social and economic development, we have to finance this. So that's the conceptual part of it, shades also into the idea of greater clarity about the empirical foundation, because what we are able to measure at the moment doesn't correspond with either the real value of international transactions, nor the real knowledge impact.

And this is where the work in a number of chapters on patent data, it's been so interesting, because a number of our authors have been able to develop new methodologies, new ways of probing patent data to track those knowledge flows and to come up with some surprising new developments, including reverse knowledge flows. So we're no longer in a situation where technological knowledge and innovation flows in a very crude way in North-South. Paul Romer's original paper in 1990 says, okay, you've got the US which creates knowledge, you've got the Philippines which uses the knowledge. Let's have a good understanding of international economics that takes account of that. That made sense, I guess, in 1990 to some extent, it doesn't make sense now. The analysis of patent data is showing how knowledge flows are much more diverse and much more interesting than I guess our perceived vision would present. But also it shows the importance of other developments such as foreign direct investment and the knowledge component of that, as well as the correlation between trade flows and patterns of patent filings and patent protection. So again, it gets very geeky, but in a really interesting way when our authors dig deep into the patent data and show novel ways of extracting real insights from those data.

Lise McLeod:
And how can that data inform policymakers?

Antony Taubman:
Well, I think, and this is me being utopian again, but it gets us to a stage where we can move beyond that zero-sum thinking. It demonstrates how... properly conceived, properly managed, properly administered, and this is not, or is the case, I stress, the intellectual property system can be used in this positive some way to promote not only the generation of valuable new technologies, wonderful new creative content, but also to facilitate its sharing, its much wider ability for broader social and economic welfare.

This is an aspiration, an objective even, that was framed in the TRIPS agreement in the original texts 1990, 1991. And it's now in Article 7 of the TRIPS agreement stating quite clearly that the intellectual property system should work in a positive some way for the mutual benefit of the producers and the users of technological knowledge. It doesn't always do that. It's very hard to get that right in practice. It's a fantastic principle, and it's a fundamentally important policy benchmark. But it's always a moving target. So the way you would achieve that in practice, that positive sum mutual advantage balancing, was clearly going to be different in 1990 as compared with 2023. Why? Most of all because of those two developments.

Firstly, the ways we have of making available and sharing knowledge, creative content, are fundamentally different, could not be more radically transformed. But secondly, thanks to insights from Paul Romer and other economists, we have a much better idea about the knowledge component of economic and social development, the way knowledge does drive forward development. It's not an external factor, it's not in a black box on its own, it's not exogenous in the jargon. It is part of the way we understand development. If you look at the Sustainable Development Goals, the common focus for international cooperation on development, so many of them rely on the development but also the dissemination, the effective diffusion of new and adapted technologies. And it is the proper function of the intellectual property system to facilitate that. Getting that right, however, is a continuous challenge. It does involve looking hard at the empirical data, improving the empirical and policy foundation of our explorations and not taking the existing system on trust as it is, but rather probing it, considering how it can be adapted, reformed, reviewed, updated, made more relevant to the contemporary environment. And I guess that's the latter half of the book is exploring what that means in practice at the multilateral level, at the domestic level, at the regional level. because there are attempts to deal with these issues, but it was always going to be difficult. And unfortunately, of course, that instinct for zero-sum negotiations, zero-sum debates, that instinct kicks in. But I'm hoping that this kind of conversations that this book and later approaches will foster, help us move beyond that to see that a positive sum approach is not only achievable but is a vast improvement for all concerned.

Lise McLeod:
Those were excellent concluding remarks for this very brief overview of a very full and insightful book. I'm assuming from what you've said that the discussion does not stop with the release of the book. Where can our listeners learn and discover more in this area.

Antony Taubman:
Yes, indeed. And so here's another paradox for our collection. We celebrate, explore, engage with the liberation of knowledge and the sharing of knowledge through the transformative impact of digital technologies through the form of a big, thick book. 806 pages I think, and twenty-five chapters. 

And firstly, I would argue that at the very least, this is a reminder that sometimes we do need to switch off our screens and really absorb ourselves in the written word, in print, on pieces of paper. And I guess I'm a Luddite in that sense. But more generally it was only intended to be a platform, a foundation for a much needed, much more far-reaching set of conversations along the kind of things we've discussed. And so from that point of view, in the WTO, we've set up a website, Trade in Knowledge, which is intended to build on this foundation and to be a forum for sharing more material, but also to feed into, from our point of view, our many conversations with our member governments, many of these conversations we share in technical assistance activities with which we cooperate with WIPO, a close and valued partner, and so the idea is to use that to feed that into our outreach, technical assistance and policy support.  I'd encourage anyone to get in touch with us to check out our website. You'll find on easily WTO Trading Knowledge. But also the fabulous WIPO Knowledge Center, which is a fantastic resource, would be an excellent way of accessing it.

Lise McLeod:
Well, thank you for that. And thank you, Antony, we really appreciate you taking the time to share this thought-provoking resource with us.

Antony Taubman:
No, huge pleasure and really enjoy your podcast series. I'm honoured to be part of it.

Lise McLeod:
I hope that you enjoyed learning more about trade-related issues in connection to IP and knowledge.  I would like to remind you that you can access a copy of the book that we discussed in our WIPO Knowledge Repository.  Otherwise as Antony highlighted, additional resources can be found on the WTO’s webpage ‘Trade in Knowledge’.

Until next time, and the next Page Points, bye for now!