BWorld 223, Ease of setting up and closing down business

* This is my article in BusinessWorld last June 18, 2018.

Last June 6, I attended the “Seminar on Protecting your Trademarks and Inventions Overseas” jointly organized by the Philippine Chamber of Commerce and Industry (PCCI) and the World Intellectual Property Organization (WIPO), held at the PCCI building in McKinley Hill, Taguig City.

The main audience of that seminar were entrepreneurs and companies big and small to help them be aware of existing intellectual property rights (IPR) rules and their protection, commercialization, licensing and dispute resolution. I do not represent any SME or big company but I was invited there by Jess Varela, Chairman of PCCI Committee on IPR.

The three important speakers that day were Dennis Broze and Peter Willimott of WIPO Office in Singapore and Atty. Allan Gepte, Commissioner of the Tariff Commission and former Director-General of the Intellectual Property Office (IPO).

Then last June 13, I attended the 6th Ease of Doing Business (EODB) Summit 2018 at the PICC, organized by the Department of Trade and Industry (DTI). It is an annual event sponsored by the DTI with one important goal — to raise or improve the Philippines’ global ranking in the World Bank’s (WB) Doing Business (DB) annual reports. The DB 2018 report was recently released and the Philippines’ global rank has worsened, compared to its ranking in the last two or three years.

This year, the EODB 2018 event is more optimistic because of the passage of the “Ease of Doing Business Act of 2018” or RA 11032 which was signed into law only last month. The DTI and various agencies including SEC, LRA, BIR, BOC, BFP, LGUs have adopted various measures to hasten the law’s implementation.

Among the important speakers in the EODB 2018 were DTI Secretary Ramon Lopez, who is also the Chairman, Ease of Doing Business and Anti-Red Tape Advisory Council; Senators Juan Miguel Zubiri and Aquilino “Koko” Pimentel III, and Mr. Guillermo Luz, former Co-Chairman of the National Competitiveness Council (NCC). Sen. Zubiri is the main author of the law in the Senate and also the Majority Leader while Sen. Pimentel is former Senate President and now Chairman of the Committee on Trade.

In both the PCCI-WIPO and DTI events, the over-riding subject is competitiveness of the Philippine economy and its businesses.

Below are results of three annual reports, the WB’s DB, World Economic Forum’s (WEF) Global Competitiveness Index (GCI), and WIPO, INSEAD and Johnson Cornell University’s Global Innovation Index (GII) annual reports.

Numbers in parentheses represent the number of countries and economies covered in that particular annual report.

While the results in global ranking vary among the three reports, one trend can be identified — the most competitive Asian economies are Singapore, South Korea, Hong Kong, Japan, Malaysia, and Thailand.

The Philippines is among the least competitive in the region, which is not good for us.

I have three wish lists on this matter.

One, the prioritization and signing into law of RA 11032 is among the very few measures of the Duterte administration that I support. I wish that he will do more ease of doing business policies, not the ease of closing businesses such as when he moved to close Boracay for six months or the ease by which the government over-taxed people via TRAIN.

Two, I wish there was a provision on the ease of closing a business in RA 11032. Among the best incentives to attract investment is a contestable market or free/easy entry, free/easy exit. If businesses see that government will bureaucratize and harass them if they decide to close shop someday, they will think twice about coming in.

Three, I wish there was another law mandating that work in government (local and national, elected and appointed, continuous or on-off) will only be a maximum 15 years, prompting officials and staff to go back to the private sector.

Since many officials intend to become regulators and bureaucrats until they retire, they tend to be more prohibitionist and extortionist since their over-regulations and taxation of business will not apply to them.

Bienvenido S. Oplas, Jr. is President of Minimal Government Thinkers, a member-institute of Economic Freedom Network (EFN) Asia.

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See also:

BWorld 211, Intellectual property, innovation, and prosperity, May 20, 2018 

BWorld 220, Trade imbalances, protectionism and rhetoric, June 15, 2018 

BWorld 221, Mindanao power development, reality vs illusion, June 16, 2018 

BWorld 222, Austrian thinkers and the G7 zero tariff challenge, July 8, 2018

BWorld 211, Intellectual property, innovation, and prosperity

* This is my column in BusinessWorld last May 10, 2018.

The BusinessWorld Economic Forum 2018 is fast approaching this coming May 18 and it has a timely theme, “Disruptor or Disrupted? The Philippines at the Crossroads.” Focus is on the challenges, risks and potentials of artificial intelligence (AI) and other technological advances.

Endless trial and error, research and development, intangible and intellectual creations, are at the heart of innovation and economic disruptions. The role of property rights protection in general and intellectual property rights (IPR) in particular cannot be overlooked.

Here are some numbers showing the degree of competition among countries and economies in encouraging and protecting innovation and IPR as shown by three data sources. These are the

(1) World Intellectual Property Organization (WIPO), INSEAD, and Cornel SC Johnson College of Business, “The Global Innovation Index 2017” (GII); (2) Property Rights Alliance (PRA) — International Property Rights Index 2017 (IPRI); and the (3) US Chamber of Commerce (USCC) — Global Innovation Policy Center (GIPC), International IP Index (IIPI) 2018.

WIPO’s methodology is interesting.

The overall GII score is computed by getting the simple average of the Input and Output Sub-Index scores. The Innovation Input Sub-Index is comprised of five pillars: (1) Institutions, (2) Human capital and research, (3) Infrastructure, (4) Market sophistication, and (5) Business sophistication. The Innovation Output Sub-Index is composed of two pillars: (6) Knowledge and technology outputs and (7) Creative outputs.

Each pillar is divided into three sub-pillars and each sub-pillar is composed of individual indicators, for a total of 81 indicators. Cool.

Data on GDP per capita income at purchasing power parity (PPP) $ values are from the International Monetary Fund (IMF), World Economic Outlook database, April 2018. The numbers in parenthesis of each report (WIPO-GII, IPRI, IIPI) represent the total number of countries included in their respective reports (see table).

  

These numbers show the following:

One, countries with high global rank and scores in innovation and IPR index are also those with high per capita income. Conversely, countries with low global rank in innovation also have low per capita income.

Two, the Philippines in particular exhibits this low ranking. Placing only 73rd out of 127 countries in WIPO-GII 2017 report, 64th out of 127 countries in PRA-IPRI 2017 report, and 38th out of 50 countries in the GIPC-IIPI 2018 report. Our GDP per capita income of only $8,300 at PPP values is low, and even lower if nominal GDP prices are used, less than $3,000.

Three, many East Asian economies are rising in ranking, landing in the top 25% in global ranks.

To further reiterate the importance of intellectual property (IP) and innovation, 70 independent and free market-oriented think tanks and institutes worldwide sent an open letter to WIPO Director General Dr. Francis Gurry, during the 2018 World IP Day last week, April 26.

The letter was spearheaded by the PRA in the US and Minimal Government Thinkers is among the 70 co-signatories. The letter was also sent to UN Secretary-General Antonio Guterres, and Director-General of the World Health Organization (WHO) Tedros Adhanom Ghebreyesus.

The letter highlighted some important facts, among them:

* In 2016, a record 3.1 million new patents were filed worldwide. These patents protected groundbreaking technological processes, helped cure devastating diseases, and modernized everyday conveniences.

* Copying is not the same as inventing and enforcement of IP rights helps prevent counterfeits that undermine innovation and help finance criminal organizations. This shadow economy of counterfeits is responsible for nearly 2.5% of global imports, amounting to nearly $461 billion.

* 10% of global pharmaceutical trade is thought to be counterfeit. These “medicines” have serious health consequences, including death. New medicines require research, trials, $2.8 billion, and up to 12 years. IP Rights incentivize commitment and collaboration.

* Removing trademarks through plain packaging has costly economic, health, and security consequences. $300 billion is the implied loss to the beverage industry if such packaging is applied to alcohol and sugary drinks.

Another global group, the Biotechnology Innovation Organization (BIO) is also promoting innovation in biotechnology of innovative health care, agricultural, industrial, and environmental products.

Governments, national and multilaterals like the UN and WHO, should help encourage and respect IPR and innovation. Some cases however show that they do otherwise.

For instance, the 2016 UN High-Level Panel on Access to Medicines, their report has portrayed patents and IP as harmful to global development and human rights. Backward thinking.

The enemy of public health and human rights are counterfeits and substandards — medicine, food, and drinks — and the criminal organizations that manufacture and sell these products.

Bienvenido S. Oplas, Jr. is President of Minimal Government Thinkers, a member-institute of Economic Freedom Network (EFN) Asia.

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See also:

BWorld 206, Intellectual property rights in East Asia, May 09, 2018

BWorld 208, Consumer choice in electricity supply and prices, May 11, 2018 

BWorld 209, Is the PCC a facilitator or a hindrance to business competition? May 15, 2018 

BWorld 210, Electricity competition, EPIRA, and WESM, May 16, 2018

BWorld 206, Intellectual property rights in East Asia

* This is my column in BusinessWorld last April 19, 2018.

The degree of wealth and economic size of East Asian economies generally correlate with their degree of private property rights protection, both physical and non-physical or intellectual property. While protection of physical properties like houses, cars, and land are easier to see and measure, the protection of intellectual property rights (IPR) like patents, copyrights, trademarks, and trade secrets are not so tangible.

IPRs are important because they represent the “heart and soul” of private enterprises and the goods and services that they produce.

For instance, people differentiate and choose shoes made by companies as represented by their logos such as a big check, three striped leaves, or letter F. These same people also choose products from food companies with logos of a double arch, a happy insect, or a smiling young female.

Here are some numbers showing the degree of IPR protection of selected East Asian economies. (Data and report sources are (1) Property Rights Alliance (PRA)- International Property Rights Index (IPRI) 2017 Report, (2) US Chamber of Commerce (USCC)- Global Innovation Policy Center (GIPC), International IP Index (IIPI) 2018, and (3) World Economic Forum (WEF), Global Competitiveness Report (GCR) 2017-2018. The numbers in parenthesis beside each report represent the number of countries or economies covered. The WEF’s GCR is composed of 12 pillars and pillar #1 is about Institutions; among the sub-pillars there is IPR protection).

These numbers show that East Asian tiger economies also rank high in IPR protection. Conversely, emerging economies aspiring to join the club of tiger and developed countries tend to have medium to low ranking in IPR protection. The exception is Brunei, a developed economy in terms of per capita income (thanks to its high gas exports and small population) but it is low in IPR protection.

The issue of IPR protection in the region was tackled by a symposium early this week entitled “Intellectual Property Rights in the ASEAN Economic Community: Challenges and Potentials” at Intercontinental Kuala Lumpur, Malaysia. The event was organized by the Institute for Democracy and Economic Affairs (IDEAS), Malaysia’s first and most dynamic free market think tank.

There are moves to abolish the trademark, corporate logos and branding of products deemed “unhealthy” in many countries.

For instance, plain packaging of tobacco products has been legislated in Australia and France, and is currently considered to be legislated in Singapore too. Such trademark busting policies are also considered as extended to other “unhealthy” products like alcohol, sugary food like chocolates, confectionery and candies.

IDEAS commissioned a study that was presented in the symposium entitled “Challenges in Improving Intellectual Property Rights in ASEAN: Case study of Singapore, Malaysia, Indonesia, Thailand and Philippines” by Adidarmawan, S.H. and Marolita Setiati.

In the paper, the two authors noted that:

“Trademark promotes freedom of choice and enable consumers to make quick, confident and safe purchasing decisions. Standardizing… packaging for tobacco products that would restrict the use of brands, trademarks and trade… concern is if brand marks are eroded, then consumers are not able to differentiate between inferior products and those with a reputation for reliability that may create an environment in which companies may end up competing on price instead of quality. In addition, plain packaging is easier for counterfeiters to copy and could result in an increase in inferior — and more dangerous — imitations. The counterfeiters will have an easier time duping the consumer into buying products that are sub-standard. Brand restriction sets an unfortunate precedent, opening the door for IP rights to be weakened in other industries.”

A BusinessWorld report early this week entitled “Excise tax increase triggers widespread cigarette smuggling” also underscores these concerns.

High taxes, rising regulations and plain packaging have similar effects — they make the consumption of legal and branded products like tobacco and alcohol more restricted and more costly, which open up more space and markets for illicit, illegal, smuggled, and cheaper products. This results in more smoking, more drinking, more consumption of the restricted products.

Governments should focus on protecting private property rights, both physical and intellectual. Weakening such property rights will also lead to a weakened state and strengthen the powers of smugglers and criminal syndicates who do not pay taxes and do not respect brands and intellectual property.

Bienvenido S. Oplas, Jr. is President of Minimal Government Thinkers, a member-institute of Economic Freedom Network (EFN) Asia.

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See also:
BWorld 203, TRAIN, inflation and PPP, April 10, 2018
BWorld 204, Mining attractiveness index and the Philippines, April 30, 2018 

BWorld 205, Energy mix and wishful thinking, April 30, 2018

BWorld 200, IPR in the ASEAN and plain packaging in the West

* This is my column in BusinessWorld on March 27, 2018.

Last week, March 22, a global coalition of 62 market-oriented independent or nongovernment think tanks and institutes sent a letter to the World Health Organization (WHO) on the subject, “Five years of failure: Global coalition letter against plain packaging.” Three institutes from ASEAN countries were among the signatories: the Center for Indonesian Policy Studies (CIPS) in Jakarta, the Institute for Democracy and Economic Affairs (IDEAS) in Kuala Lumpur, and Minimal Government Thinkers (MGT) in Manila, my think tank.

The statement was circulated well in social media particularly by signatory-institutes. The paper noted,

“After Australia implemented the policy, other industries have been targeted around the world: alcohol, sugary beverages, fatty foods, even toys. These industries employ millions and any regulation that would deny key IP assets would have a devastating global economic impact. The trademark value alone of only twelve companies associated with these sectors is estimated to be more than $1.8 trillion.

The costs of plain packaging are enormous: the loss of the innovation incentive, the mutilation of established international IP law, the market carve-out to illicit actors, including terrorists. We urge the WHO and governments around the world to stop infringing on intellectual property rights with plain packaging policies.”

This coming April 18, IDEAS will hold a public forum on “Intellectual Property Rights in the ASEAN Economic Community: Challenges and Potentials” to be held at Intercontinental Kuala Lumpur. The forum will partly cover an emerging big issue in international trade — the proliferation of illicit products.

The proliferation of illicit trade and smuggling is ironic in a period of overall tariff reduction and trade liberalization in the ASEAN and many other regions in the world.

What explains this irony?

It is non-tariff barriers (NTBs) or non-tariff measures (NTMs). After all, these require additional permits, sanitary and phytosanitary measures (SPS), and technical barriers to trade (TBTs).

And, as mentioned in the letter, the emerging attack on IPR — plain packaging, abolition of trademark and logo, abolition of corporate branding, initially for tobacco products. Then advocates will move to other “unhealthy” goods like alcohol, sugary drinks, confectionery and candies, and so on.

Australia is the first country in the world to legislate and implement plain packaging or standardized packaging in December 2012. The estimated consumption of illicit and smuggled tobacco products was 12.2% of overall tobacco consumption in 2011 and 11.5% in 2012.

When plain packaging was implemented, the estimated illicit consumption went up: 13.5% in 2013, 14.5% in 2014, 14.1% in 2015, 13.9% in 2016 (source: KPMG, March 2017. “Illicit Tobacco in Australia, 2016 Full Year Report”).

Removing the trademark, logo and brand via plain packaging is less of an assault on tobacco companies with long years of corporate existence but more of an assault on a country’s tradition of protecting private property rights.

Below are some numbers showing average wealth and IPR protection in 15 economies, ASEAN + five in Northeast Asia. Data sources are (a) IMF’s World Economic Outlook (WEO) for GDP per capita, (b) Property Rights Alliance (PRA) International Property Rights Index (IPRI) 2017 Report, and (c) World Economic Forum (WEF) Global Competitiveness Report (GCR) 2017-2018.

The GCR is composed of 12 pillars and pillar #1 is about Institutions; among the sub-pillars there is IPR protection (see table).

These numbers show that countries with high per capita GDP whether in current or nominal prices or in purchasing power parity (PPP) values are also those with high scores and global ranking in intellectual property rights (IPR) protection. And countries with low per capita income also have low scores and ranking in IPR protection. The exception to this trend is Brunei in the IPRI Report, and South Korea in the GCR.

High and rising taxes and now plain packaging as measures to discourage smoking is successful only in reducing smoking of legal and branded tobacco products. Not mentioned by advocates is that these measures are highly favorable to producers and distributors of illicit, fake, non-branded, and cheap tobacco products.

Since brand and product differentiation is effectively abolished, producers and manufacturers, old and new players, will only compete in pricing. So more cheap tobacco will be introduced and this will encourage more smoking.

To further reduce smoking incidence, governments and NGOs should continue public education about the dangers of smoking. But almost all smokers already know the dangers of smoking, the same way that cliff and plane jumpers, high wall/rock climbers, motorcycle stunt drivers, extreme bicycle downhill riders, deep sea scuba divers, MMA/UFC fighters, etc. know the dangers of their sports and passion but they keep doing it anyway, repeatedly.

People own their body, not governments or health NGOs. There is a limit to state nannyism and very often, such nannyism results in adverse, unintended consequences.

Governments should instead focus on protecting private property as a way to encourage more economic prosperity. 

Bienvenido S. Oplas, Jr. is President of Minimal Government Thinkers, a member-institute of Economic Freedom Network (EFN) Asia.

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See also:
BWorld 197, Estimating electricity price hikes because of TRAIN, Part 2, March 22, 2018 
BWorld 198, Three levels of global disruption, March 24, 2018 
BWorld 199, Charity and giving should not be legislated, March 27, 2018

IPR and Innovation 42, Coalition letter to WHO re plain packaging

Today, a global coalition of 62 market-oriented independent or non-government think tanks and institutes sent a letter to the WHO. Three institutes from ASEAN countries were among the signatories -- CIPS in Indonesia, IDEAS in Malaysia, and MGT in the Philippines.

Dr. Tedros Adhanom Ghebreyesus

Director-General

World Health Organization

December 01, 2017, marked the five-year anniversary of the full implementation of plain packaging in Australia. The removal of brands and trademarks from packaging remains a gross violation of intellectual property rights and has failed to achieve its intended goal. As a global coalition of sixty-two think tanks, advocacy groups and civil-society organizations that have been critical of plain packaging for any product, we write in response to proposed plain packaging tobacco control measures and to the announcements by several countries of their interest in pursuing these policies.

Intellectual property rights are human rights enshrined in the Universal Declaration of Human Rights: Article 17, the right to ownership; Article 19, the right to freedom of expression; and Article 27, the right to protection of material interests. In this regard, even if plain packaging is effective, it should still be repealed, as rights are inalienable and should not be discarded for political purposes.

International trade law, the UNDHR, and historic international treaties are designed to protect intellectual property for this very purpose. The innovation incentive created by trademarks fuels competition and produces amazing products demanded by consumers like affordable medical advances that save lives. Obviously, any loophole should be closed, not exploited....

After Australia implemented the policy, other industries have been targeted around the world: alcohol, sugary beverages, fatty foods, even toys. These industries employ millions and any regulation that would deny key IP assets would have a devastating global economic impact. The trademark value alone of only twelve companies associated with these sectors is estimated to be more than $1.8 trillion.

The costs of plain packaging are enormous: the loss of the innovation incentive to the economy and society are inestimable, the mutilation of established international IP law is unprecedented, and the market carve-out to illicit actors, including terrorists, is reprehensible. It is beyond reason that such a policy continues to be pursued, even after it has failed to achieve its intended goal.

We urge the WHO and governments around the world to stop infringing on intellectual property rights with plain packaging policies.

(Full letter and names of institute heads, co-signatories, see  http://www.propertyrightsalliance.org/wp-content/uploads/2018/03/2018-Global-Plain-Packaging-Coalition-to-WHO.pdf, or 

https://www.slideshare.net/Noysky/global-coalition-letter-to-who-vs-plain-packaging)

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See also: 

IPR and Innovation 39, Recent IP developments in CN, TW, KR, ID, November 05, 2017 

My first article in BWorld, Oct 2007, on IPR, December 29, 2017 

IPR and innovation 40, WHO health alarmism and IPR tinkering, January 16, 2018 

IPR and Innovation 41, Governments and the UN on patent prizes, February 23, 2018

WHO must go back to basics

I am reposting this good article by a friend, Philip Stevens, published in BusinessWorld last Thursday, January 18.
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To maintain relevance, WHO must go back to basics

AS one of 34 executive board members of the World Health Organization (WHO) meeting in Geneva next week, the Philippines shares a pivotal role in setting the global health agenda for the next year.

The WHO’s work has never been more important to address serious and evolving international health threats. It is only a matter of time before there is another global influenza pandemic to match the devastating outbreak of 1918, and, as recent outbreaks of Ebola and Zika have shown, new and deadly diseases can emerge at any time.

As a UN organization to which almost every country in the world belongs, the WHO should make strengthening national health systems and coordinating defenses against transnational disease its priority. But it’s often hard to know if the organization has any priority.

Superficial involvement in a ballooning number of health areas has made it a directionless, ineffective, and inward-looking player in an increasingly crowded global health scene.

The WHO’s tendency to do a lot poorly has seen it fail in its core business of leading international action on transnational disease outbreaks.

Take the organization’s response to the West African Ebola crisis of 2014.

An expert panel convened by Harvard Global Health Institute and the London School of Tropical Medicine criticized the WHO for its “catastrophic” delay in declaring a public health emergency.

The worry is that WHO will fail to handle the next inevitable global pandemic, leading to needless loss of life.

Funding is part of the problem: The WHO spent just 5.7% of its 2014-2015 budget on disease outbreaks, a 50% drop on the previous two years.

The WHO’s core budget, paid by member governments, fell from $579 million in 1990 to a feeble $465 million this year. To put this in context, this is considerably less than the Philippines receives each year in foreign aid earmarked for health.

The WHO has topped up its budget with project-based donations from countries and big charities, which now constitute 80% of its overall income. But that has cost the WHO its strategic independence.

Alongside global health staples like tropical diseases and immunization, the WHO now publishes recommendations on subjects from adolescent health and headaches to traffic safety and prisons.

Jeremy Farrar, director of the UK-based global health research charity the Wellcome Trust, argues the WHO is being undermined by its inability to focus on a few core issues.

“It’s so thinly stretched,” he told Reuters. “There’s arguably no organization on earth that could cover all those (topics) at sufficient depth to be authoritative.”

This lack of focus and mission creep will be on full display at next week’s WHO executive board meeting. Bizarrely, large parts of the agenda are dedicated to discussion of how to dilute the intellectual property (IP) protections that drive discovery of new health technologies.

Given the scale of today’s global health challenges, it’s not clear how repeating a tired and long discredited debate about IP and access to medicines will help. The vast majority of treatments prescribed in both developing and developed countries are off-patent and therefore unaffected by IP rules, yet far too many still do not have reliable access to them.

The real reasons for this have been well known for decades. There are too few doctors and clinics, and a lack of social and health insurance to protect people from the cost of health care expenditures (something WHO itself implicitly recognizes in its efforts to promote universal health care). In many places, weak supply chains and poor infrastructure separate people from the treatments they need.

A narrow and divisive focus by WHO on IP may tick political boxes, but it does nothing to improve health and will only lead to more unproductive debate. It looks like a power grab by WHO staff to intervene in areas that are best left to national governments.

In 2017, former Ethiopian foreign minister Tedros Adhanom was elected as new director general on a mandate to reform and consolidate the WHO. Almost immediately, he appointed no fewer than 14 assistant director generals to oversee a huge number of program areas. This is not the work of a reformer.

Next week is the first executive board meeting under Tedros’s leadership. The Philippines and other member states need to steady the ship. To maintain its relevance, WHO must get back to basics and do a few things well, not many things poorly. It must therefore unite nations around practical solutions, not divide them in pointless debates.

Philip Stevens is director of Geneva Network, a UK-based research organization focusing on international trade and health issues.

IPR and innovation 40, WHO health alarmism and IPR tinkering

Seven years ago, I briefly surveyed the various offices under the UN and I was surprised to see about 100+ different agencies. See UN bureaucracies -- too many! (December 20, 2010).

Among the huge and wide UN offices and bureaucracies is the World Health Organization (WHO). On its website, Media Center, News Releases 2017, these stories seem like we are still in the 90s or even the 80s, or the 70s -- there are many scary and alarmist stories in public health around the world until now.

It is already 2018 -- when illiteracy is already zero in many developing countries, when smoke signal and animal whistles are no longer used to communicate as hundreds of millions of poor people in developing and emerging countries now use smart phones with access to emails, facebook, twitter, youtube and other social media.

And the WHO and WB still declare that "half the world lack access to essential health services"? That measles "still kills 90,000 per year"?

Going back a few decades ago, the WHO was known for various health alarmism worldwide. Like the HIV/AIDS alarmism in the 80s to 90s and more recently, about NCDs (non-communicable diseases) alarmism.

Then the usual fare of the WHO -- blame directly or indirectly IPR and drug patents by innovator pharma and biotech R&D. Also blame free trade and FTAs for expensive medicines.

And I was surprised to see this.

http://www.who.int/medicines/EB142_13_shortage_and_access_medicines_vaccines.pdf?ua=1

"Global shortage of medicines and vaccines", wow. Since about 95-99% of WHO's essential medicines list (EML) are already off-patent, what stops the WHO and member-governments from mass-producing these drugs, directly or indirectly?

The WHO needs to shrink, both in size of bureaucracy and governments' funding. It has lots of health and economic global central planners that they want to plan-and-control many things and policies, forgetting that it was the private sectors and corporations' risk-taking that gave the world plenty of life-saving medicines since many decades ago.
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See also:

IPR and innovation 37, US-China dispute on IP, September 17, 2017

IPR and Innovation 38, Recent IP development in some ASEAN countries, October 24, 2017 

IPR and Innovation 39, Recent IP developments in CN, TW, KR, ID, November 05, 2017 

My first article in BWorld, Oct 2007, on IPR, December 29, 2017

My first article in BWorld, Oct 2007, on IPR

I just rediscovered this image from my old emails a decade ago -- my first article in BusinessWorld. Reposting.

Intellectual Property Rights

BWorld, October 24, 2007, page 5.

Downloading pirated songs from the internet is cool. Dying from counterfeit medicine is not. But the pirates and the slack law enforcement that give you one also give you the other--and there are people who will tell you this is a good thing.

Many governments and humanitarian groups want you to believe that patents and intellectual property rights on medical innovations deprive the poor of important medicines and should be discarded in the name of public health.

But if one's innovation and invention that produces welfare to society, like producing medicines to cure malaria or cancer, using extracts from the leaves and fruits of the most common fruit tree in a particular country, is not respected, why would some guys innovate in the first place? It is protection of patents that brought those useful drugs into existence, along with millions of other products, wonderful and mundane alike: yielding to the slogan "patients over patents" would hurt poor patients the most by depriving them of new inventions.

Say you are an unknown band, performing in bars. You wrote a few good original compositions and your audiences like them. Suddenly your songs have been recorded and patented by someone else, on albums and CDs, with no mention of you and no royalties. How would you feel?

You are a researcher or academic. You presented a paper to a conference. A few months later, you see a paper published in some magazine or journal that contains most of your paper--your methodology, scientific model, data, results and conclusions. How would you feel?

You are an ordinary inventor. You invented a device that can reduce fuel consumption in diesels by 35% and you're selling it for a few bucks because you don't have a wide marketing network, or you don't have the capacity for mass production. Then, a few months later, your device is patented by someone who is selling it a handsome price, with no mention of you.. How would you feel?

The civil contracts of intellectual property, like deeds to physical property, underpin innovation, creativity and growth, as well as personal and political freedoms. Left-leaning health activists claim that breaking patents would hit multinationals and "Big Pharma" hardest--but these guys are innovators, they can find their way out like investing their money and people into something else, like new cosmetics and perfumes. It's the poor who will suffer most, from bad products, lack of new effective medicines, and economic stagnation.

And how do the consumers feel when they get these rip-offs? If you buy a pirated book or CD and it turns out to be of bad quality, you only lose your money. But if you buy pirated and bad quality medicine, you can lose your health--even your life.

This year Kenya found 20,000 counterfeit doses of anti-malarial Duo-cotecxin, one of many counterfeits in an uncontrolled market where some 35,000 people die of malaria each year. The fake, probably from China, does not just fail to cure the disease, it can increase drug resistance and make patients worse.

Governments around the world like to play the hero by promising to reduce prices, usually by price controls or patent infringement but never by cutting taxes on goods or service. My older brother, our eldest in the family, died of prostate cancer more than a year ago. His earlier hormonal chemo-theraphy cost around P25,000 per session excluding the physician's fee. Of that amount, government VAT collection alone was P3,000 per session. After several sessions, he did not get well. He was later given chemo that cost P90,000 per treatment, of which government's VAT was nearly P11,000 per session. The import tax, corporate income tax, business permit and other related taxes not included yet.

If a government wants to bring down the price of medicines, rice, clothing, fertilizers, farm tractors, or any commodity essential to life and economic growth, the first thing would be to drastically cut, if not abolish, the import duties and direct taxes that hit the poor hardest.

So the next time your government blames foreign companies or international rules for high prices, find out what taxes and covert barriers it is hiding from you--and shout the truth out loud.

BWorld 169, On tobacco tax and plain packaging

* This is my column in BusinessWorld last November 30, 2017.

Protection of private property rights — including physical and intellectual — is an important cornerstone of a free society. People can exclusively use, keep, sell, donate or give away their property if they want to.

There is a measurement of property rights protection worldwide being done annually by the Property Rights Alliance (PRA), a Washington DC-based think tank. It produces the annual International Property Rights Index report and partners with independent, nongovernment, and market-oriented think tanks and institutes from many countries. IPRI covers three major areas: (1) Legal and Political Environment, (2) Physical Property Rights (PPR), and (3) Intellectual Property Rights (IPR) that include protection of patents, trademarks and brands, copyrights and trade secrets.

In the IPR of several ASEAN countries, the gap is not very wide between say, Singapore and the Philippines or Indonesia (see table).

Currently, there are IPR issues that are intertwined with taxation issues of some “sin products” like tobacco and alcohol.

In the Philippines, the sin tax law of 2012 or RA 10351 is turning five years old next month. The law has dual purposes of (a) reducing smoking and drinking incidence in the country by raising tobacco and alcohol taxes, and (b) raising more government revenues.

So far, both have been achieved but there are moves and legislative bills to further raise tobacco tax to twice or thrice their current rates.

In December 2012, Australia introduced a variant of this law aimed to further discourage smoking. Its plain packaging law required tobacco companies to remove the brand, trademark, and logos of its tobacco products and replace them with plain packs with graphic warnings.

Since some smokers may be unable to distinguish good brands from new and/or inferior brands, they are supposedly discouraged from stop smoking.

While the goal is good — to protect public health — the means and the policy leaves much to be desired.

Since it is assumed that consumers can no longer distinguish good brands from inferior ones, brand competition is precluded.

As a result, companies will now be forced to compete on the basis of prices alone, allowing players with poor but cheap products to gain advantage and attract more customers.

Which may then defeat the purpose of anti-tobacco initiatives because this may yet increase the incident of smoking.

Five years after introducing its plain packaging scheme, has Australia been able to meet its goal?

The Australian government collects data on national smoking incidence every three years as part of its National Drug Strategy Household Survey (NDSHS).

Based on 2016 data — its most recent — there has been no statistically significant decline in the overall daily smoking rate between 2013 (12.8%) and 2016 (12.2%).

So the plain packaging scheme is a failure in Australia.

Moreover, the plain packaging law has unwittingly succeeded in raising the consumption of illegal tobacco, estimated at 13.9% of total consumption in 2016. This results in an estimated excise tax loss of A$1.6 billion for the government last year.

Furthermore, Australia is also facing a dispute resolution panel at the WTO for implementing the law that disrespects IPR laws on trademark and branding.

France and the UK have also introduced the plain packaging scheme in recent years. One unintended result in France is the rise in illicit tobacco coming from some terrorist groups and criminal syndicates while the French government suffered an excise tax loss of approximately €2 billion in 2016. This illicit trade was linked to jihadists traveling to Syria and Iraq and terrorist attacks in France. Counterfeit cigarettes are also among the most investigated IP-crime in the UK and are linked directly to criminal organizations.

In Asia, there are plans to introduce plain packaging legislation in Singapore, Malaysia, Taiwan, Sri Lanka, and Nepal.

This may a dangerous precedent.

Soon, other “sin products” will be targeted — alcohol, sugary drinks and beverages, fatty foods, even toys.

I am a non-smoker and have never been a fan of smoking. I am just a fan of individual liberty and people having the freedom what to do with their own body and life, also a fan of the rule of law and people’s right to private property.

The plain packaging scheme is dangerous because (a) it disrespects private property rights and IPR laws, (b) encourages the production of illicit items from illicit and possibly criminal players who can easily play with price competition, (c) it encourages more consumption because very cheap products with no brands are more easily available, and (d) it reduces government potential excise tax revenues, which might result in creating new taxes elsewhere.

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See also: 
BWorld 153, Property rights, trademarks and consumer protection, September 30, 2017

BWorld 166, US energy trading and implications for Asia and Philippines, November 26, 2017 

BWorld 167, Multilateral, bilateral, or unilateral liberalization, November 27, 2017
BWorld 168, Uncertainty in mining policy and the Manicani debate, December 12, 2017

IPR and Innovation 39, Recent IP developments in CN, TW, KR, ID

Reposting these news stories collated by PRA, enjoy.
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China launches campaign to protect IPRs of foreign companies

China.org.cn, September 19, 2017

The Chinese government has begun a campaign to protect the intellectual property rights (IPR) of foreign companies.

The campaign will focus on malicious trademark registration and imitation of foreign brands, the Ministry of Commerce said Monday, citing a joint action plan by 12 government departments.

From September to December, the campaign will also target infringement of online IPRs, patent rights and plant variety rights, as well as industrial espionage, according to the plan.

IP in the Cloud: the China Perspective

Lexology, October 20, 2017

China is in the middle of a rapid shift towards cloud technologies. Execution of the 13th Five Year Plan will deliver substantial investment into cloud computing and the sector is undergoing unprecedented growth. Meanwhile, organisations operating in this digital economy face an increasingly complex intellectual property (IP) environment, as China becomes a global IP center and scales up IP protection, enforcement and penalties for infringement. Indeed, the number of cloud-related IP lawsuits in China grew 158% between 2011 and 2016. Against this backdrop, organisations face an important question: how can they take advantage of the enormous opportunities presented by the cloud in a way that manages this complex IP landscape? In this post, Matt Pollins and Nick Beckett from CMS look at the practical steps organisations can take to protect themselves and succeed in the cloud. 

Taiwan approves major amendment to protect trademarks at the border

World Trademark Review, September 26, 2017

A major amendment in Taiwan to the regulations governing customs border measures will play a key part in protecting trademarks. The measures allow the owner of a trademark registered in Taiwan to file an application with Customs to have the trademark recorded on its database enabling Customs to seize counterfeits when it inspects imported or exported goods ex officio. The legal basis for this mechanism is rooted in the Regulations Governing Customs Measures in Protecting the Rights and Interests of Trademark, which is enacted pursuant to Paragraph 2 of Article 78 of the Trademark Act.

S.Korea urges DPRK not to violate property rights in closed inter-Korean factory complex

XinhuaNet, October 10, 2017

South Korea's unification ministry on Tuesday urged the Democratic People's Republic of Korea (DPRK) not to violate property rights owned by South Korean companies which had operated factories in the currently closed inter-Korean industrial complex.

US presses India on IP protection, market access and trade barriers

The Economic Times, October 27, 2017

Seeking to achieve a "more balanced" trade relationship, the Trump administration has pressed India on key issues like market access, lifting of trade barriers and intellectual property protection. During the first US-India bilateral Trade Policy Forum (TPF) under the Trump administration which was attended by US Trade Representative Robert Lighthizer and Union Minister of Commerce and Industry Suresh Prabhu, India strongly differed with the American position on many of the contentious issues.

India Taking Steps to Strengthen Intellectual Property Rights

PRA

During a meeting in New Delhi last week, Indian Commerce & Industry Minister Suresh Prabhu announced how "extremely important" it is for India to protect intellectual property rights. Minister Prabhu noted that the Indian economy has undergone robust changes during recent decades and is now a leader in innovation and developing technologies.

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See also:

IPR and Innovation 36, Plain packaging from tobacco and soon to soft drinks, alcohol, ice cream products, May 31, 2017 

IPR and innovation 37, US-China dispute on IP, September 17, 2017

IPR and Innovation 38, Recent IP development in some ASEAN countries, October 24, 2017

IPR and Innovation 38, Recent IP developments in some ASEAN countries

Property rights protection of both physical and non-physical/intellectual -- trademark/logo, copyright, patent, etc. -- is among the cornerstones of dynamic, mature and market-friendly economies. Individuals and enterprises develop new products and services via innovation and they create new value, new wealth for society.

I am reposting some developments on IPR in the ASEAN. Thanks to the Property Rights Alliance (PRA) for the bi-weekly IP updates.
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Intellectual property protection a 'key element of Thailand 4.0'

The Nation, October 02, 2017 

There's a role for intellectual property protection in the Thailand 4.0 vision and initiative, and the national government's Intellectual Property Department sees a role for itself promoting innovation through offering increased knowledge sharing and more convenient services.

"We are a key mechanism in protecting new technology and innovation vital to economic development, and we do this by motivating new developments," said Thosapone Dansuputra, director-general of the department.

Thailand to accede to the Madrid Protocol

Lexology, October 04, 2017

As of November 2017, Thailand will accede to the so-called Madrid Protocol as member no. 99. This entails cost savings compared to previously when trademark proprietors are to register their trademarks in Thailand. The Madrid Protocol is an international system through which trademark proprietors may apply for protection in several countries through one basic registration.

Website blocking in Malaysia has reduced online piracy, says film makers body

The Edge Markets, October 10, 2017 

Website blocking in Malaysia has significantly reduced online piracy, with a 74% fall in traffic to pirate websites recorded in the six months after the government initiated its sixth effort to block such sites in June 2016, says the Motion Picture Association (MPA). As pirate websites generate income through advertising revenue, a disruption to their business model can help stop online piracy, said Oliver Walsh, regional director at the Asia-Pacific hub for Motion Picture Association International (MPA-I).

Trademark protection awareness, registration remain low in Laos

XinhuaNet, September 19, 2017

The number of trademark registrations is lagging in Laos as many businesses lack understanding of their rights and fail to register to protect their intellectual property, according to the Intellectual Property (IP) Department under Ministry of Science and Technology on Monday.

Laos Struggling with Trademark Protection

PRA, October 6, 2017 

According to a study by the Intellectual Property (IP) Department of the Ministry of Science and Technology, only about 40,500 trademark applications have been filed in the Southeast Asian country since 1991. This is a relatively low number of applications for trademark protections for a country of 7 million and an economy with a GDP of $37.3 billion.

Brunei's Patent Examination System to Increase Efficiency Through Agreement with Japan

Lexology, October 11, 2017

On August 28, 2017, the Brunei Intellectual Property Office (BruIPO) signed an agreement to introduce a new patent examination initiative - the Patent Prosecution Highway Plus (PPH+) - with the Japan Patent Office (JPO), which commenced on October 1, 2017. Using this PPH+ system, patent prosecution procedures in Brunei are accelerated by allowing BruIPO to reuse the search and examination results of corresponding patent applications filed in Japan - thus reducing examination workload and time, minimizing costs, and improving patent quality.

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See also:

IPR and Innovation 35, Letter to WIPO on World IP Day, May 06, 2017 

IPR and Innovation 36, Plain packaging from tobacco and soon to soft drinks, alcohol, ice cream products, May 31, 2017 

IPR and innovation 37, US-China dispute on IP, September 17, 2017

BWorld 153, Property rights, trademarks and consumer protection

* This is my article in BusinessWorld last September 18, 2017.

Private property rights that people and businesses enjoy are among the cornerstones of a free and dynamic society. People have exclusive rights on what to do with their private properties — use them, sell, rent out, or donate.

However, when rights to private property — both physical and intangible assets — are unprotected, society can quickly degenerate into disorder. As a result, consumers will be unable to recognize which among manufacturers and service providers are trustworthy and which are suspicious.

Measuring the extent of property rights protection across many countries is done annually by the Property Rights Alliance (PRA), a Washington DC-based think tank. It produces the International Property Rights Index (IPRI) annually and partners with independent, nongovernment, and market-oriented think tanks and institutes from many countries.

IPRI is derived by getting the score (1 to 10, 10 being the highest) of each country covered in three major areas:

1. Legal and Political Environment (LP), covers judicial independence, rule of law, control of corruption, and political stability of a country or economy.

2. Physical Property Rights (PPR), includes registration and protection of physical properties, access to loans.

3. Intellectual Property Rights (IPR), includes protection of patents, trademarks and brand, and copyrights.

Countries with high scores in two or all three of these areas will have a high IPRI overall score and global rank (see table).

Among the important insights in the above numbers are: One, the more developed the economies are like Singapore and Japan, the higher the IPRI score and global rank. Which implies that as private property is better recognized and protected, there are more economic activities and innovations that occur.

Two, the Philippines experienced some improvement in its global rank, from 77th out of 131 countries in the 2013 report. It rose to 64 out of 127 countries in 2017. Its low score in legal and political environment was compensated by its high score in physical property rights.

One emerging issue in IPR non-protection is plain packaging (PP) of tobacco products purportedly for health reasons. Besides being slapped with high taxes, tobacco products also feature graphic warnings on packaging. Advertising tobacco products have also been restricted and smoking in may areas have been disallowed, which are part of several moves to deter people from lighting up.

These have been tried in many countries but smoking incidence does not seem to significantly decline as people shift to cheaper and often, illegal, illicit products. So the next step is to prohibit the use of a tobacco brand, logo, or trademark. This has been done in Australia and there are plans to introduce legislation in Singapore, Malaysia and Taiwan.

This plan does not appear to be right because a brand or logo of a company represents how effective it is in developing consumer loyalty and service. Imagine also if all ice cream, all soft drinks, all beer, all wine, etc. will simply be labeled as “ice cream,” “soda,” “beer,” etc. with no brand recognition of who produced or manufactured the products.

Or all government departments and agencies (DoH, DoF, DPWH, NEDA, etc.) will lose their logo and will simply have a generic brand “Philippine government,” it would not seem right.

I have never been a smoker nor have I been a fan of smoking but was once a fan of tobacco ads in cycling or in the F1 race. But I will not recommend the scrapping of a brand or trademark of companies in a particular industry. People who hate the companies should attack them as such and they may even use the company brand for their attacks.

Intellectual property rights like medicine patents, song copyrights, company brand or trademarks, play an important role of recognizing efficiency and innovation. Consumers look up to these brands and decide which ones to support and patronize and which ones to reject based on their specific needs and interests.

Governments therefore, should respect and protect these IPRs the same way it should respect and protect physical private properties. Moreover, people own their bodies and not the state nor NGOs.

After rising taxes, health warnings, and business regulations are in place, governments should leave individuals and allow them to seek their own happiness without harming other people.

Bienvenido S. Oplas, Jr. is the president of Minimal Government Thinkers, which is a member of EFN Asia and the Property Rights Alliance (PRA).

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See also:

BWorld 150, Rising state-inspired murders and budget 2018, September 18, 2017 

BWorld 151, Mining taxes per hectare of land, September 22, 2017 
BWorld 152, Cronyism in Renewable energy, gas sectors? September 23, 2017