I. INTRODUCTION
The discussion of globalization, a term laden with confusion, has
filled volumes of political science, economics, and sociology journals.
However, the effect of globalization on the legal community has yet to
be fully explored. With the birth of the General Agreements on Tariffs
and Trade (GATT) after World War II and the subsequent creation of the
World Trade Organization (WTO) in the early 1990's, the entire
arena of international trade changed shape. (1) Issues formerly
considered the sovereign business of nation-states to enforce are
suddenly fair game for global adjudication. (2) The rise of private
actors, usually described with a multitude of acronyms such as
TNC's, MNC's, NGO's, or IGO's (and variations
thereof), suddenly have a role to play in international legal
enforcement. (3)
Furthermore, the rise of the Internet has increased the ease with
which intellectual property can be pirated overseas. (4) Countries such
as Thailand, China, and even Canada are under fire from the Office of
the United States Trade Representative (USTR) for piracy of United
States intellectual property. (5) In order to protect their interests,
many multinational corporations have teamed up to fight for their right
to profit from their intellectual property. (6) This is significant
because without any initiation from nation-states or world governments,
private actors have become, in essence, a world police for hire. (7) The
implications of this practice are worrisome: if too many infant
businesses are penalized for their illegal use of intellectual property,
the economies of developing countries can be negatively impacted. (8)
The purpose of this note is to explore the complex web of
international enforcement mechanisms for intellectual property in
developing countries, especially in the area of software piracy. In
order to discuss this, however, it is important distinguish between the
de jure intellectual property regime (the law in the books) and de
.facto regime (the law that is actually enforced). Put simply, many
developing nations have domestic laws protecting software, but they do
not enforce those laws as much as others. (9)
Why would a country fail to enforce all of its own laws? As this
note will explore, many reasons exist. However, as the tension rises
between those who desire intellectual property enforcement and those who
do not, a line between developed and developing countries emerges. (10)
Software creators, who tend to come from highly-developed economies,
want to charge a fee for their product, yet users in developing
countries do not want to pay for software (and in some cases cannot
pay), especially when the money goes to the already "rich"
software creators. (11)
From here we have a clash: a conflict between the "Robin
Hood" mentality of developing countries--who want to steal from the
rich to help their own poor--and the "Bullies"--players in the
developed countries who want tougher international enforcement for their
hard-earned software creations. (12) In classic economics, this is
called the logic of collective action, wherein free riders-individuals
who "rely on others to bear the costs of a program from which [they
benefit]"--have no incentive to pay for something they can get for
free. (13) In the case of software piracy, software users who find these
products available for free or discounted rates will most often select
that cheaper option. (14)
According to the logic of collective action, the only way software
creators can prevent widespread infringement is to create regulations
declaring such behavior illegal and then "bully" the
infringers into compliance. (15) This explains why many of the
intellectual property laws in developing countries did not originate
domestically, but were required by the international community. (16)
Until developing countries start to see tangible benefits from enforcing
anti-piracy laws, it is unlikely that they will take intellectual
property laws for software seriously. (17) To explore this issue
thoroughly, Part II will cover the evolution of intellectual property
protection, including the recent incorporation of protection for
software into international law. Part III will discuss the de facto
system of enforcement for software protection in developing countries
and the barriers that must be overcome for enforcement Success.
II. SOFTWARE PROTECTION "DE JURE"
A. History of Intellectual Property
The general concept of protecting intangible ideas as property is a
relatively new phenomenon in the history of the world: the first law
protecting ideas was established in the Republic of Venice in 1474. (18)
It was motivated by the logic that, if inventors had the right to profit
from their ideas, they would be motivated to continue inventing and
increase technological advancement. (19) After realizing the benefit of
recognizing intellectual property rights, other European countries, most
notably England, passed intellectual property laws. (20) Taking from its
predecessors in England, the United States codified the concept in its
Constitution: "The Congress shall have Power... To promote the
Progress of Science and useful Arts, by securing for limited Times to
Authors and Inventors the exclusive Right to their respective Writings
and Discoveries." (21) Since then, intellectual property has become
commonplace among Western powers: by 1883, fourteen states had joined
the Paris Convention, the first international intellectual property
treaty, which protected trademarks, patents, and industrial designs.
(22) By 1886, the international community protected copyrights for
artistic works with the Berne Convention. (23)
The modern concept of intellectual property rights primarily
includes three major types: patents, copyrights, and trademarks. (24) A
patent is protection for an invention that is new to the world, such as
a chemical compound or a new type of computer equipment. (25) Patent
holders are allowed exclusive profit and use of their invention for a
fixed period of time. (26) After that period, others may use the
technology or create new inventions from it. (27) A copyright is
protection for a creative expression of an idea, such as a song, a poem,
or other artistic creation. (28) Typically, the American rule is that
the idea itself, such as a song about love, cannot be copyrighted, but
the expression of the love song, such as the words, melody, etc., can be
copyrighted. (29) Finally, a trademark is any recognizable device that
is associated with the quality of the owner's product (such as,
say, Mickey Mouse ears, associated with the Walt Disney Company). (30)
As the registered owner of the intellectual property, the creator
may profit exclusively from his or her invention or creation. (31) If
another uses the property without permission from the owner, this is an
illegal infringement of the owner's intellectual property rights.
(32) The owner can then, ideally, sue for damages. (33) Regardless, the
typical procedure for protection of any of these creations is to first
register the item with some sort of central body in order to clearly
identify the owner of a particular product. (34) However, as will be
discussed at length later, being registered with an agency by no means
guarantees any recovery of damages, especially overseas. (35)
The World Intellectual Property Organization (WIPO) was developed
by the United Nations in 1967 "to contribute to better
understanding and cooperation among States [and] to promote the
protection of intellectual property throughout the world." (36)
However, despite WIPO's overarching goal of harmonizing
international intellectual property legislation, (37) there are no
worldwide registration offices. (38) Intellectual property owners must
still register with each individual country (such as with the United
States Patent Office or the United Kingdom Patent Office) or a regional
office (such as the European Patent Office, or the African Regional
Intellectual Property Organization). (39)
B. History of Intellectual Property Rights for Software
Even with the growing international support for intellectual
property, the concept of protecting software as intellectual property
had not even been considered prior to 1976, when Bill Gates was one of
the first to address the issue. (40) In an open letter to computer
hobbyists accusing them of "stealing" software, he wrote,
"The value of the computer time we have used exceeds $40,000"
while "[t]he amount of royalties we have received from sales to
hobbyists makes the time spent on [the program] worth less than $2 an
hour ... [m]ost directly, the thing you do is theft." (41) Prior to
then, neither WIPO nor the existing international trade regime, the
General Agreements on Tariff and Trade (GATT), had made any provisions
for software as intellectual property. (42) While domestic countries
scrambled to work software protection into their existing copyright
treaties, the United States was the first country to grant official
copyright protection for software (43) with the Computer Software
Copyright Act of 1980. (44)
Despite the progress of protection for software on the domestic
front, it took until the mid-1990's for the international community
to realize the economic benefit of protecting software as intellectual
property. The first GATT document regarding intellectual property (not
including software) was not produced until 1986, and it circulated under
special distribution to member countries. (45) It was the first time the
international community publicly drew a link between intellectual
property protection and free trade: "Technological progress is an
increasingly important aspect of international competitiveness ...
[t]rade distortions and impediments arise when a country's sales of
products of innovation and creation are lost to foreign infringement
activities." (46) Because of this realization, the contracting
parties of the GATT argued that "The GATT can and should play an
important role in reducing and eliminating trade-distortive deficiencies
in intellectual property protection." (47)
When the World Trade Organization (WTO) was born out of the Uruguay
Round of GATT negotiations in 1994, (48) its purpose was to ensure that
trade between nations goes as "smoothly, predictably and freely as
possible." (49) Realizing the connection between free trade and
intellectual property rights, the WTO parties agreed to Trade-Related
Aspects of Intellectual Property Rights, or the TRIPS Agreement. (50) By
this time, software had become a solid part of international trade and
was protected as a literary work under TRIPS. (51) Finally, WIPO
followed suit in 1996 with the WIPO Copyright Treaty and granted
protection to software as a literary work. (52) Currently, software can
be copyrighted or patented, depending on the novelty of the product, but
it still must be registered with the appropriate domestic or regional
agency. (53)
C. Developing Countries and Intellectual Property Protection
While laws protecting software exist both domestically and
internationally, the concept of intellectual property rights (let alone
software protection) is by no means universal. China, for example, does
not enforce foreign copyrights "because it sees the development of
its economy as dependent in part upon such illicit activity." (54)
South Korea also avoided enforcing intellectual property rights until it
was threatened with trade sanctions by the United States. (55) India,
too, has revolted against the idea of intellectual property. (56) When
American firms considered patenting traditional Indian spices because of
the disparity in intellectual property laws, many Indians complained,
saying, "[e]veryone in India knows about turmeric. It belongs to us
and we offer it to the world so long as they don't forget that
it's Indian." (57) In fact, the majority of the top twenty
software piracy offenders are developing countries, showing there is a
clear lack of interest in enforcement for software copyright or patent
protection. (58)
In contrast, the enforcement of intellectual property--especially
in the area of software--has become a hallmark for truly developed
economies. (59) The majority of software patents and copyrights
originate from the United States. (60) Meanwhile, software piracy barely
exists in the least-developed countries because they cannot even afford
to have computers! (61) This illustrates a clear clash of interests
between the developed and developing world over intellectual property
rights: software copyright has proven to be a tough sell in developing
countries, while the West is accused of being an "'unholy
alliance' controlling culture and information." (62)
Considering the deep pockets of the Western software firms, the thought
of developing countries punishing their own people in order to pump more
money into these agencies seems counterintuitive at best.
In addition, with the onset of globalization and the increasing
authority of multilateral institutions such as the WTO and WIPO,
developing countries--even those who stand most to gain from software
copyright protection (63)--are understandably feeling
"bullied" into compliance. (64) As of 2007, there are 150
members of the WTO, (65) thirty-two of which are considered
"least-developed. (66) In order to join as an official member,
nations must agree to rules and regulations on issues such as tariffs,
agriculture, safety standards, textiles, the service industry,
intellectual property, antidumping, subsidies, and many more. (67) The
underlying hope in creating such an organization is twofold: 1) that
trade disagreements will result in international courtroom battles
instead of international war and 2) that by creating a forum for
enforcement, countries will play by the rules in order to ensure the
collective gain that comes from a liberalized economy. (68)
The most significant aspect of the WTO's existence is that for
the first time in history, a governing body has the authority to
adjudicate trade disputes between nation-states. (69) This includes
disputes involving intellectual property: members who join the WTO are
required to agree to TRIPS, which requires them to establish a minimum
level of protection. (70) The General Provision explains:
Desiring to reduce distortions and impediments to international
trade, and taking into account the need to promote effective and
adequate protection of intellectual property rights, and to ensure
that measures and procedures to enforce intellectual property
rights do not themselves become barriers to legitimate trade ...
Recognizing, to this end, the need for new rules and disciplines
concerning [intellectual property].... (71)
Western nations--with massive constituents depending one hundred
percent on trading intellectual property--consider enforcement of
intellectual property rights to be a non-negotiable issue in WTO
agreements. (72) If an intellectual property framework were not a part
of WTO protections, many industries--especially the software
industry--simply could not afford to invest in research and development
if there were no hope to recoup costs. (73) This means that all members
would establish intellectual property rights in their country, whether
they agreed with the concept or not:
Members shall ensure that enforcement procedures as specified in
this Part are available under their law so as to permit effective
action against any act of infringement of intellectual property
rights covered by this Agreement, including expeditious remedies to
prevent infringements and remedies which constitute a deterrent to
further infringements. (74)
Of course, not all states at WTO negotiations are created equal. In
fact, states are oftentimes considerably unequal. Those that are in the
midst of economic struggle, social unrest, or political upheaval are
often more concerned with feeding their people than developing legal
infrastructure, let alone intellectual property infrastructure. (75)
Consequently, the Council for TRIPS allowed grace periods for
least-developed nations to comply with TRIPS. (76) This would allow the
countries time to create the laws and infrastructure necessary to
enforce intellectual property rights. (77) Article 66 provides:
In view of the special needs and requirements of least-developed
country Members, their economic, financial and administrative
constraints, and their need for flexibility to create a viable
technological base, such Members shall not be required to apply the
provisions of this Agreement ... for a period of 10 years from the
date of application ... [t]he Council for TRIPS shall, upon duly
motivated request by a least-developed country Member, accord
extensions of this period. (78)
Additionally, the TRIPS Council and WIPO agreed in 1995 to work
together to help developing countries meet the requirements for TRIPS
within the ten-year deadline, (79) and least developed countries were
allowed a one-year extension:
[T]he least-developed countries, and for so long as they remain in
that category, while complying with the general rules set out in
the aforesaid instruments, will only be required to undertake
commitments and concessions to the extent consistent with their
individual development, financial and trade needs, or their
administrative and institutional capabilities. The least-developed
countries shall be given additional time of one year from 15 April
1994 to submit their schedules as required in Article XI of the
Agreement Establishing the World Trade Organization. (80)
Currently, the WTO has agreed to allow further extension for TRIPS
compliance on a case-by-case basis for the thirty-two least-developed
countries. (81) It explained that "least-developed countries will
not have to provide the intellectual property protection covered by the
TRIPS Agreement until 1 July 2013 unless they graduate from being
least-developed." (82)
The dispute resolution mechanism provided by TRIPS allows states to
use the WTO dispute settlement system to enforce members'
compliance with its provisions. (83) If one member thinks another is not
living up to its WTO obligation under TRIPS, the member can complain to
the TRIPS Council and, in effect, "sue" the other member. (84)
Of the twenty-three TRIPS disputes listed on the WTO Website, the United
States has been the complainant in fourteen and co-complainant with
Australia in one, with the remainder divided among Canada, the European
Communities, and Brazil, (85) which added itself as a complainant in a
dispute when it required consultation with the United States on
provisions of the U.S. Patent Code. (86) This exemplifies the common
perception that when the time limit for least-developing countries
expires, the fragile markets of these countries will become a proverbial
meal for the West, with its insatiable appetite for litigation and
self-sustaining economic growth. (87)
Realizing the quid pro quo nature of multilateral institutions,
developing countries joined to protect their interests in the WTO
negotiations. (88) This alignment was largely responsible for the
ultimate failure of the 1999 WTO negotiations, (89) when developing
countries put a deadlock on negotiations over their fundamental
disagreement with TRIPS (often tagged, the "Battle in
Seattle"). (90) Talks resumed once the West made certain
concessions (mostly over medical patents), (91) and now the WTO insists
that the former alliance of developing countries has weakened. (92)
However, now that the ten-year grace period for certain countries to
enforce TRIPS has ended, whether future TRIPS disputes will increase the
divide between developed and developing countries remains to be seen.
III. "DE FACTO" SOFTWARE IP ENFORCEMENT: ROBIN HOOD
VERSUS THE BULLIES
A. The Six Barriers to Software Protection in Developing Countries
In his article about the intellectual property rights in India,
Jishnu Guha lists six reasons why developing countries choose not to
enforce IP laws: 1) a lack of resources, 2) a lack of cost-benefit
tradeoffs, 3) a need for economic growth and protection of domestic
industry, 4) a different cultural value, 5) "a 'Robin
Hood' mentality of justifiably robbing the rich to help the
needy," and, finally, 6) suspicion of Western intentions. (93) In
order to analyze these six factors fully, it is easiest to limit
discussion to one country, ideally one with high software piracy rates.
Additionally, it makes sense to choose an emerging market that has
"graduated" from the TRIPS least-developed country list and
fully entered the "bullying" force of the international
intellectual property regime.
India is one such country where software piracy rates and tensions
over the issue are extremely high. (94) As a founding member of the WTO
and WIPO, India is obligated under TRIPS to support intellectual
property rights, (95) but, as a developing country, it was given the
obligatory eleven years plus an extension (which ended on January 1,
2005) to comply. (96) Additionally, like many developing countries,
India created the requisite laws to gain membership in the WTO, but
habitually failed to enforce them. (97) According to the International
Intellectual Property Alliance (IIPA), India pirated over $443 million
worldwide in intellectual property in 2005 alone, and the number is
expected to grow. (98) The numbers for software piracy were emphasized
in the 2006 report, saying:
Corporate end-user piracy (unauthorized use of business software in
a business setting) continues unabated in both large and small
Indian companies, while piracy at the retail and wholesale level is
also prevalent, including hard disk loading and the outright sale
of pirate software in many of the famous pirate markets throughout
India. Losses increased again in 2005, to US$265.1 million, while
the piracy rate stayed the same--at 74%, much higher than the
regional average in Asia of 53%. India is out of step with the
region, and there is little sign things can be turned around unless
courts begin adjudicating with greater efficiency and meting out
more deterrent sentences. (99)
What are the reasons for this high level of piracy? Doesn't
India have a vested interest in pleasing its potential foreign investors
by enforcing their beloved software copyrights and patents? What about
India's growing domestic software developing industry? (100)
Guha's six reasons will prove especially useful in answering these
questions. (101)
As Guha explains, one of the reasons developing countries do not
enforce intellectual property laws is a lack of resources. (102) This is
especially applicable to India, where thirty-six percent of its
population makes less than one dollar pe