Monday, November 04, 2019

BWorld 378, IPRI 2019 and banning brand

* My column in BusinessWorld on October 18, 2019.

“Man… had still in himself the great foundation of property… when invention and arts had improved the conveniences of life, was perfectly his own, and did not belong in common to others.”

— John Locke, Second Treatise on Government (1690)

About two centuries before the concept of intellectual property rights (IPR) was formally articulated and legislated in many countries, the great British classical liberal thinker John Locke has already argued that such inventions and arts are private property and not societal, collective, or communal property.

I used that quote when I presented my paper during the global launching of the “International Property Rights Index (IPRI) 2019 Report” at the Fairmont Hotel in Makati on Oct. 16.

IPRI is an annual study and published by the Property Rights Alliance (PRA, Washington DC) in partnership with close to a hundred independent and market-oriented think tanks worldwide.

During the formal launch, PRA Executive Director Lorenzo Montanari discussed the philosophy behind IPRI and its annual reports. He said that private property rights are human rights.
IPRI 2019 author Dr. Sary Levy-Carciente, an academic economist from the Universidad Central de Venezuela and a Fulbright Visiting Scholar at Boston University, Center of Polymer Studies, discussed the components, sub-components and data sources of IPRI. The results of IPRI 2019 covering 129 countries, vs IPRI 2018 covering 125 countries can be seen in the table.

The Philippines’ performance in 2019 over 2018 can be summarized as: (1.) an improvement in overall IPRI rank, 67th/129 vs 70th/125, also in overall score, 5.31 vs 5.22; (2.) an improvement in PPR rank, 60th/129 vs 63rd/125, score is the same; (3.) an improvement in IPR rank, 58th vs 62nd; and, (4.) a deterioration in LPE, 102nd/129 vs 95th/125, although score has barely changed. Meaning other countries simply improved significantly in LPE compared with the Philippines.

The keynote speaker before the launch was Department of Trade and Industry Secretary Ramon M. Lopez. Mr. Lopez recognized the improvement in the Philippines’ overall ranking and noted improvements in their mandates like the rising number of IPR registrations like utility models, patents, and trademarks. He also noted that the Ease of Doing Business and Anti-Red Tape laws were created only last year and this year, hence the gains are not yet fully captured in IPRI 2019 results. So we can expect an improvement in the Philippines’ ranking in IPRI 2020 and 2021. Good point, Mr. Lopez.

IPRI 2019 has several cases studies, including my paper, “Banning Brand — Economic and Consumer Impact of Plain Packaging.”

It is surprising that while the original target of banning branding on packaging and using plain packaging instead — using largely graphic warnings, bland and non-colorful marks with no brands but with the names in very small type — was tobacco, recent moves and proposals are to extend banning branding among basic consumer items — candies, crisps, sweets, high sugar drinks, soda, and even chocolates. The new goal is to fight obesity and non-communicable diseases by demonizing major brands and companies that produce these goods, and these proposals are more pronounced in UK.

I showed a critique to these moves in UK by Ron Cregan, founder of Endangered Species. He wrote:

“Simplifying the design, construction and manufacturing of consumer packaging effectively lowers, and even removes, the barriers to entry for counterfeiters. Without this complexity, plain packaging allows criminal gangs to copy and reproduce authentic and legitimate products with relative ease.”

Banning brands is ineffective at achieving policy goals, It damages the IPR environment, and cedes market share to criminal syndicates that prefer to remain anonymous rather than earn a reputation.

IPRs like trademarks and brands should be protected — for consumer choices, for investment protection, even for government taxation and battling criminality and terrorism — and not prohibited.

There were three reactors to my presentation. Director General of the Intellectual Property Office of the Philippines Josephine Santiago, FEF Fellow and trade lawyer Kristine Alcantara, and vice-chair of the Philippine Chamber of Commerce and Industry’s IPR committee, Dmitri Roleda.

After the launch, Lorenzo and Dr. Carciente also visited some government offices like the office of Senator Koko Pimentel, the Chairman of the Philippine Competition Commission Arsenio Balisacan, and the Chairman of the Optical Media Board Anselmo Adriano.

It is important that the sanctity of private property, physical and intellectual property, should be upheld always. Inventors, composers, writers, artists who produce original and innovative products and services should be rewarded with such recognition.

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