Soros-Funded KEI Works to Establish Globally Governed (Socialized) Health Care, With Aid of Liberal U.S. Politicians

The Open Society Institute, a George Soros Foundation ‘civil society’ NGO, also advances a new paradigm of supranational global governance of health, much as it also supports the establishment of a new global paradigm of ‘open source methods’ in the ICT sectors. Both initiatives endeavor to reduce the importance of private property rights, including IPRs. “The Law and Health program seeks to advance public health priorities and open societies b y supporting civil society‘s capacity in law and health and promoting the practice and discipline of law and health… The Law and Health program is also addressing key issues at the intersection of law and health, such as the global governance of public health. This includes the overarching regulatory framework for public health like the Global Fund to Fight AIDS, Tuberculosis and Malaria and their Country Coordinating Mechanisms (CCMs). A key aim for OSI within these new global structures is to ensure the participation of civil society and to develop new legal models for governance, participation, and transparency.” [1]

The following example shows how the Socialist-leaning Soros Open Society Institute has worked to undermine intellectual property rights internationally.

“Shortly following the commencement...by the WIPO General Assembly...of the 2004 special session...to consider... proposed amendments to the WIPO Convention essentially call for each country's stage of development to determine the scope and degree of private intellectual property protections in that country..., a group of European socialist-minded open source advocates and civil society activists submitted their own WIPO proposal, otherwise known as the ‘Geneva Declaration on the Future of WIPO’ . [2] The declaration demanded that, “WIPO abandon its current culture of expanding monopoly privileges without regard to social cost and to instead strike a balance between the public domain and competition on the one hand and the realm of property rights on the other. [It] also expresse[d] strong support for the…Argentina and Brazil…Proposal.” [3] It focused on the perceived inequities surrounding access to innovations in, and the scientific and technical know-how underlying, medical, information, and other essential technologies. And, it called for WIPO to ensure universal access to all such knowledge, as a matter of both morality and international law. [4] Following the political success of the Geneva Declaration, other European activists have since submitted their own proposals equating these inequities with human rights violations, and calling for a reinterpretation of the WIPO Convention’s mandate, consistent with international human rights law.” [5] [6]

Ralph Nader and James Love-operated KEI and its affiliates (formerly CPTech) justifies its ‘universal access to knowledge (A2K) program as being consistent with human rights, which are somehow different from economic rights.[7] However, KEI and its band of merry activists ignore how human rights also include economic rights and that there is no legal hierarchy among human rights.[8]

Furthermore, Robert Weissman, a key officer from KEI affiliate Essential Action, described as a “a nonprofit advocacy organization that works on pharmaceutical access and other corporate accountability issues”, recently testified before the U.S. Congress decrying how U.S. life sciences companies are abusing their hard-earned patent rights because they were unwilling to sell the products derived from those patents to the public and to developing countries at or below cost.[9] Mr. Weissman is also “counsel to [another KEI affiliate] Essential Inventions, a separate nonprofit corporation that aims to promote the creation and distribution of essential inventions and other works that support public health and access to information”. This organization, in other words, seeks to convert private goods (i.e., privately owned patents, copyrights, trade secrets – proprietary knowledge) into public goods (a/k/a ‘universal access to knowledge – A2K’) without providing the IP rights holders with just compensation. Mr. Weissman intentionally distorts the distinction between basic R&D lab work and the much more costly and extensive clinical trial and commercialization stages which transform the laboratory knowledge into market-relevant products.[10] He does so in order justify KEI’s agenda of reforming what is perhaps the most significant U.S. legislative enactment in the past 25 years to promote the commercialization and licensing of government granted basic R&D into market relevant products – namely, the Bayh-Dole Act - which has placed the United States at the global forefront of patent development and innovation.[11] But he ignores how the cost and time committed to the commercialization process far exceeds the cost and time committed to the basic R&D, which in many cases is rather fundamental and of not much relative use or value. KEI and its affiliates has also worked with left-leaning academics to advocate the surrender of U.S. constitutionally guaranteed property rights and U.S. national sovereignty to the United Nations-based World Health Organization (WHO).[12]


KEI (Formerly CPTech) Works With Liberal U.S. Politicians to Give-Away US Private IP Rights to Developing Countries Calling For Socialized HealthCare Paradigm

Soros-funded KEI/CPTech legitimizes its mission by working with others to redefine the doctrine of sustainable development so as to encourage governments to secure continuous international “science and technology IP transfers”[13] at concession rate prices.[14] Unfortunately, this contorted definition of sustainable development, which Czech President Vaclav Klaus has described in the context of environmental activism as ‘soft socialism’,[15] appeals to anti-market, anti-private property and anti-WTO advocates, as well as, to American multilateralist politicians. Many such politicians now believe that a government-controlled socialized healthcare system which allows for the ‘donation’ of U.S. patents to developing countries at less than fair market value, and thereby minimizes the importance of private intellectual property rights, is necessary in order to prevent the emergence of extreme economic, scientific, technological and social disparities and popular backlashes against American-driven globalization that will likely threaten international peace and security. [16] But, the apologists are not limited to politicians. They also include certain multinational firms[17] and economists[18], who work alongside Soros-funded KEI to preserve their competitive interests[19] and/or public (brand) reputations. At least one partisan bill would effectively relinquish U.S. constitutionally guaranteed private property rights, without payment of just compensation, for the benefit of third country citizens, for ostensible political (foreign diplomacy) gain.[20]

The recent General Accounting Office (GAO) politically-charged report[21] prepared for California Congressman Waxman and Massachusetts Senator Edward Kennedy[22] at the request and applause of activist NGOs, such as Soros-funded KEI, Essential Innovations, Essential Action, etc.,[23] is the latest entry in a parade of public pleas by U.S. multilateralist politicians demanding that American life sciences firms to ‘give-away’ their valuable patents for the benefit of developing countries. The report essentially claims that the Bush administration’s policy of protecting the constitutionally guaranteed exclusive private property rights of U.S. patent holders violates the spirit of the WTO Doha Declaration.[24] Arguably, Messrs. Waxman and Kennedy were likely influenced to prepare this report by the generic drug industry which seeks to obtain greater benefits at the expense of patent holding pharmaceutical and biotech companies. And, it wouldn’t be the first time that Congressman Waxman did the bidding for ‘enlightened’ U.S. industry members with the help of the activist community.[25] Consequently, the suggestion made by Soros-funded KEI’s Weissman that, “Congress should investigate and end [such] practices [that lead to] “Improper interference in the WHO Intergovernmental Working Group on Public Health, Innovation and Intellectual Property negotiating process, including by pressuring country negotiators not to support positions embodying Doha Declaration objectives”, is disingenuous, to say the least.[26]

[1] See “Public Health Program – Law and Health”, Open Society Institute & Soros Foundation Network, at: http://www.soros.org/initiatives/health/focus/law See also David Horowitz, “The Cult of Soros: A New Foreign Policy”, Wall Street Journal, Letters to the Editor (8/24/06), at p. A11.
[2] See “Geneva Declaration on the Future of the World Intellectual Property Organization”, at: http://www.soros.org/initiatives/information/news/wipo_20040929/wipo_declaration.pdf .
[3] See “Declaration on the Future of WIPO”, News and Announcement - Information Program, Open Society Institute & Soros Foundation Network (9/30/04), at: http://www.soros.org/initiatives/information/news/wipo_20040929 “OSI’s Information Program , together with the Consumer Project on Technology (CPTech), convened a group of experts to draft a ‘declaration’ calling upon the World Intellectual Property Organization (WIPO) to adopt a fairer approach to intellectual property (IP) policymaking. The ‘Geneva Declaration on the Future of WIPO’ arose from a workshop on the future of WIPO that was hosted by the TransAtlantic Consumer Dialogue on September 13 and 14, 2004, in Geneva, Switzerland. The drafters of the declaration— including academics and NGO representatives— are urging WIPO, the United Nations agency that oversees intellectual property, to seriously reconsider its agenda.” Ibid. “We do not ask that WIPO abandon efforts to promote the appropriate protection of intellectual property, or abandon all efforts to harmonize or improve these laws. But we insist that WIPO work from the broader framework described in the 1974 agreement with the UN, and take a more balanced and realistic view of the social benefits and costs of intellectual property rights as a tool, but not the only tool, for supporting creativity intellectual activity. WIPO must also express a more balanced view of the relative benefits of harmonization and diversity, and seek to impose global conformity only when it truly benefits all of humanity. A “one-size fits all” approach that embraces the highest levels of intellectual property protection for everyone leads to unjust and burdensome outcomes for countries that are struggling to meet the most basic needs of their citizens.” See
“Geneva Declaration on the Future of the World Intellectual Property Organization”, supra, at p. 2.
[4] See “Geneva Declaration on the Future of the World Intellectual Property Organization”, at p. 1.
[5] See ―Policy Brief on Intellectual Property, Development and Human Rights: How Human Rights Can Support Proposals for a World Intellectual Property Organization Development Agenda”, Policy Brief 2, 3D (Feb. 2006) at: http://www.3dthree.org/pdf_3D/3DPolBrief WIPO-eng.pdf ); “Human Rights and the Establishment of a WIPO Development Agenda”, 3D Information Note 51 (June 2006), at: http://www3dthree.org/pdf_3D/3Dnote5_WIPO_June06.pdf
[6] See Lawrence A. Kogan, “Rediscovering the Value of Intellectual Property Rights: How Brazil’s Recognition and Protection of Foreign IPRs Can Stimulate Domestic Innovation and Generate Economic Growth”, INT’L J. ECON. DEV. Vol. 8 Nos. 1-2 (Sept. 2006) at: http://www.itssd.org/White%20Papers/ijed-8-1-2-kogan.pdf
[7] One NGO in particular, Consumer Project on Technology (CPTech) (now KEI), has “argued that access to health [care] or medicine and access to knowledge [A2K ] are human rights.” See Mark F. Schultz and David B .Walker, “How Intellectual Property Become Controversial: NGOs and the New International IP Agenda”, citing CPTech, “Health Care and Intellectual Property”, at: http://www.google.com/custom?q=human+rights+&sa=Google+Search&cof=AH%3Acenter%3BAWFID%3A3b5c352b544b655c%3B&domains=www.cptech.org&sitesearch=www.cptech.org ; CPTech, “Access to Knowledge (A2K), at: http://www.google.com/custom?q=A2K&cof=AH%3Acenter%3BAWFID%3A3b5c352b544b655c%3B&domains=www.cptech.org&sitesearch=www.cptech.org Dr. Khor is director of the Third World Network, a Penang-based NGO, and works with developing country governments in opposing the WTO agenda. Dr. Khor notes how participants who attended an A2K experts meeting co-organized by CPTech, the International Federation of Library Associations and the Third World Network, during the February 2005 Geneva WIPO Secretariat‘s Development Agenda Meeting, “proposed… that a treaty on access to knowledge should be based on the human rights model, in which access of knowledge is acknowledged as a human right, that this right is primary, and the rights to holders of copyrights or patents are seen as secondary or exceptions, and should thus be limited and in ways that
would not threaten the prim ary hum an rights.” See, Martin Khor, “Offsetting IPRs’ Adverse Effects on Access to Knowledge”, South - North Development Monitor (Feb. 4, 2005), at: http://lists.essential.org/pipermail/a2k/2005-February/000083.html ; https://arl.org/Lists/SPARC-OAForum/Message/1594.html
[8] As a matter of human rights law, Article 17 of the Universal Declaration of Human Rights expressly states that, “1. Everyone has the right to own property alone as well as in association with others; 2. No one shall be arbitrarily deprived of his property.” In fact, various other provisions within this seminal document, when read together with Article 17, as well as with certain provisions of the ICESCR, support the conclusion that there exists no hierarchy at all among the various types of human rights, whether health, education, or economic-related. See Universal Declaration of Human Rights, supra note 70, at art. 17; See id. pmbl., arts. 2, 3, 8, 12, 17, 25, 27-29, 30; ICESCR, supra note 55, at pmbl., arts. 1.2, 2.2, 4, 5.1, 15.1, 15.3, 25.
[9] “The public health consequences are most profound in the developing world, where high prices typically mean that patients go without life-saving and other essential medicines. There is a U.S. taxpayer component in the global health arena as well, because U.S. aid monies are not uncommonly used to buy drugs invented with federal research support. Bayh-Dole created the climate in which these abuses could occur, but they were not inevitable. Government agencies could have implemented Bayh-Dole on terms that would have prevented or at least greatly limited the abuses that have occurred. With few exceptions, they have declined to do so.” See Testimony of Robert Weissman "The Role of Federally-Funded University Research in the Patent System" Before the Committee on the Judiciary U.S. Senate (Oct. 24, 2007) at pp. 1-2, at: http://judiciary.senate.gov/pdf/07-10-24WeissmanTestimony.pdf
[10] The Bayh-Dole Act was signed into law in 1980, and effectively expanded through administrative and subsequent Congressional action over the next decade. The law aims to promote commercialization of government-funded inventions. It transfers title to government-funded inventions to universities and other contractors. Universities in turn are able to license the inventions to other parties, including on an exclusive basis. Although federal agencies have actively embraced the Bayh-Dole mission of licensing federally funded inventions to private corporations, our experience shows that the government has abrogated its duty to ensure that pharmaceuticals incorporating federally funded inventions are reasonably priced. The result is a public policy outrage, and a public health tragedy. U.S. taxpayers pay to fund R&D. The government turns the fruits of the research over to pharmaceutical and biotechnology companies, which then price gouge U.S. consumers and even the government itself. Thus the industry is able to execute a double swindle of the public. There is little doubt that U.S. consumers experience financial hardship as a consequence, and sometimes have been deprived of needed medicines. The Bayh-Dole licensing system has, in too many cases, distorted and concentrated markets, and facilitated abuses of market power, all with substantial deleterious consequences for pharmaceutical affordability and other public health objectives -- including promotion of the R&D enterprise. Id., at p. 1.
[11] Although the United States has arguably struck the most successful balance between private and public intangible property rights the world has ever known, considering that it remains both the world’s largest economy and the world leader in innovation,101 the United States’ IPR framework covering patents and trade secrets has increasingly become the subject of heated national debate.102 See Michael Luger et al., European Trend Chart on Innovation: Annual Innovation Policy Trends Report for United States, Canada, Mexico and Brazil 2005, EUR. COMM’N ENT. DIRECTORATE-GENERAL i-iii, 4-5 (2005); ORG. OF ECON. COOPERATION & DEV. [OECD], SCIENCE, TECHNOLOGY AND INDUSTRY SCOREBOARD 7-9 (2003), available at http://www.oecd.org/dataoecd/41/0/17130709.pdf (“In the United States, investment in knowledge – the sum of investment in R&D, software and higher education – amounted to almost seven percent of GDP in 2000, well above the share for the European Union or Japan. . . . R&D expenditure has risen faster in the United States (5.4% a year) than in the European Union (3.7%) and Japan (2.8%). . . . OECD data on patent families (a set of patents filed in various countries to protect a single invention) show the existence of more than 40,000 patent families in 1998 in the OECD area, a 32% increase from 1991. The United States accounted for around 36%, followed by the European Union (33%) and Japan (25%).” (emphasis added)). See also F.M. Scherer, The Political Economy of Patent Policy Reform in the United States, Aug. 2006, available at http://www.ksg.harvard.edu/m-rcbg/papers/scherer/PATPOLIC.pdf (unpublished comment, on file with Harvard University).
[12] In fact, at least one such academic has proposed that the U.S. Bayh-Dole Act be amended to legislatively impose a ‘public interest limitation’ on IPRs created as the result of federally funded basic research and development. In addition, he has suggested that the U.S. Government surrender national sovereignty to the WHO by delegating power to the Organization to “issue a compulsory license . . on behalf of the patent holder to relevant generic manufacturers to produce . . drug[s] . . . [in] recogni[tion of the] right of access to essential medicines. . . .” See e.g., Jonathan Kahn, Rights and Practical Access to Medicine, 84 BULL. WORLD HEALTH ORG. 409 (May 2006), available at http://www.who.int/bulletin/volumes/84/5/405.pdf. Indeed, the objectivity of the academics that have promoted alternatives to the current U.S. and international private property rights-based patent and R&D systems appears strained at best. See James Packard Love, Drug Development Incentives to Improve Access to Essential Medicines, 84 BULL. WORLD HEALTH ORG. 408 (May 2006), available at:
http://www.who.int/bulletin/volumes/84/5/405.pdf (discussing how H.R. 417, the Medical Innovation Prize Fund, was proposed by Representative Sanders [I-VT] during 2005 as “a working model for a new paradigm of drug development”). “The immediate cause of high drug prices is government granted patent monopolies, which allow drug companies to charge prices that are often 400 percent, or more, above competitive market prices.” See Dean Baker, Financing Drug Research: What Are the Issues?, CTR. FOR ECON. & POL’Y RES. (Sept. 21, 2004), at Executive Summary and p. 3, available at http://www.cepr.net/publications/intellectual_property_2004_09.htm Indeed, Professor Baker’s anti-patent and pro-government intervention views are not dissimilar to those held by other individuals whom he has credited in his report as giving “helpful comments on an earlier draft.” Id. They include James Love, a healthcare and anti-intellectual property and anti-business activist (his controversial work is referenced throughout this article) and Simone Baribeau, researcher-activist-author and contributor to Marxist publication Political Affairs. See Politicalaffairs.net: Marxist Thought Online, http://www.politicalaffairs.net/article/author/view/1118 (last visited Nov. 1, 2006). Political Affairs is a monthly magazine of partisan Marxist ideology, politics, and culture, and a publication of the Communist Party, USA. See About Us, Political Affairs - A Marxist Monthly, available at http://wwwpoliticalaffairs.net/article/static/17/1/3 (last visited Nov. 1, 2006); Dr. Aidan Hollis would seem to be in favor of greater governmental intervention in the healthcare markets. He is an assistant professor of economics at the University of Calgary in Alberta, who is credited with “devis[ing] a different approach [for stimulating drug innovation]: the government would set up a fund to compensate drug companies based on how much their new drugs improve the quality of life and how often they were used.” Eduardo Porter, Do New Drugs Always Have to Cost So Much?, N.Y. TIMES, Nov. 14, 2004. Professor Hollis also authored an article that appears to have resonated with the WHO CIPIH. He also credits James Love for providing him with “helpful comments, questions and critiques which forced me to clarify my thinking.” See Aidan Hollis, An Optional Reward System for Neglected Disease Drugs (Univ. of Calgary, Inst. of Health Econ., Working Paper Last Updated May 18, 2005), available at http://econ.ucalgary.ca/fac-files/ah/optionalrewards.pdf. (“The essence of the proposal is to offer rewards to drug innovators who relinquish the exclusivity rights of their patents, with the rewards to be based on the incremental health effects of the innovation in developing countries.”). Prof. Hay, a pharmaceutical economist and associate professor at the University of Southern California School of Pharmacy, also seems to be an advocate for more governmental intervention in the healthcare markets – i.e., in the pricing of medicines and medical treatments. See Joel W. Hay & Minnie M. Yu, Drug Patents and Prices: Can We Achieve Better Outcomes, in MEASURING THE PRICES OF MEDICAL TREATMENTS 152, 154 (Jack E. Triplett ed., 1999) (“[D]oes current policy for patent protection and monopoly pricing of innovative medications achieve the best possible outcomes for society? We will argue that the answer is emphatically negative . . .”); See generally Id. at 152-94.
[13] “The US Trade Act 1974 established a link between IPR protection and trade. However, for a long time, at the international level, there was no consensus about such a link. Developing countries were concerned about their own development. They claimed that transfer of technology was needed for development. They also pointed out the risk of being obliged to patent inventions related to public health and nutrition (UNCTAD70).” See Dr Barbara Rosenberg, Director, Secretariat of Economic Defence, Brazilian Ministry of Justice, Presentation Made at “Workshop: Global Intellectual Property From a Brazilian Perspective”, University of Oxford Centre for Brazilian Studies
(11/4/05), at: http://www.brazil.ox.ac.uk/confreports/IP%20report%20final3.pdf
[14] See Martin Khor, “Globalization and the Crisis of Sustainable Development” United Nations University (2002), at: http://www.unu.edu/interlink/papers/WG1/Khor.doc
[15] “As someone who lived under communism for most of his life, I feel obliged to say that I see the biggest threat to freedom, democracy, the market economy and prosperity now in ambitious environmentalism, not in communism. This ideology wants to replace the free and spontaneous evolution of mankind by a sort of central (now global) planning. The environmentalists ask for immediate political action because they do not believe in the long-term positive impact of economic growth and ignore both the technological progress that future generations will undoubtedly enjoy, and the proven fact that the higher the wealth of society, the higher is the quality of the environment. They are Malthusian pessimists”. See Vaclav Klaus, “Freedom, Not Climate is at Risk”, Financial Times (June 13, 2007) at: http://www.ft.com/cms/s/9deb730a-19ca-11dc-99c5-000b5df10621.html .
[16] American multilateralists (apologists) believe that it is absolutely necessary to begin rehabilitating America‘s image internationally, which, they allege, has been sullied by the foreign policy initiatives of the current presidential administration. To do so, they call upon Americans to collectively concede their ‘exceptionalism’ as a nation without peers, as well as, to sacrifice their inalienable individual constitutionally guaranteed private property rights, including intellectual property rights, for the benefit of developing countries and in furtherance of global harmonization. This American doctrine of knee-jerk multilateralism is likely to have negative repercussions for the United States, which holds most of the know-how and technologies that the world wishes to obtain. See, e.g., “Congressman to Secretary Leavitt on WHA R&D Resolution”, IP -Health (5/19/06), at: (http://lists.essential.org/pipermail/ip-health/2006-May/009569.html ; http://www.cptech.org/ip/health/who/59wha/congress05192006.pdf This letter was signed by three well-known congressional Democrats: Tom Allen-D. ME; Lloyd Doggett-D.TX; and Dennis Kucinich-D.OH; one Independent: Bernard Sanders-I.VT; and one Republican: Dan Burton-R .IN . It restates the arguments made by Brazil‘s socialist ruling party and international health activists, such as James Love and Ralph Nader. Coincidentally, the U.N. World Health Organization also happens to embrace these arguments. The position these politicians, bureaucrats and activists have articulated threatens to weaken the U.S. system of exclusive private property rights, especially intellectual property rights, and America‘s competitive advantage in international trade. By advocating in favor of internationalizing health-related technology R&D through means of a UN-style ‘public-private partnership’ R&D treaty, these congressman and activists would obligate the U.S. government to follow UN dictates to instruct U.S. companies how they may conduct basic research and development and
how much profit they can make commercializing inventions based on federally-funded R&D. Consistent with the WHO CIPIH ‘s position, the letter‘s supporters reason that intellectual property rights, by themselves, are insufficient to promote an adequate economic incentive for U.S. industry to commit significant funds to research and development of drugs, medical treatments and technologies that benefit third world country citizens, but don‘t explain why that is necessary if the companies can‘t make a profit doing so. They also allege that the WHO proposal for an international R&D treaty, first proposed by Love and Nader, will actually reduce the cost of drugs to U.S. citizens because other countries’ governments would be obligated under such a treaty to pay their fair (‗equitable‘) share of R&D costs, which they would derive by taxing industry and citizens. However, they do not provide evidence that this would actually occur, because no such evidence exists. These proposals are idealistic and unworkable at best, and misrepresentative at worst. The recommendations set forth in this letter would essentially amount to another hidden tax on American consumers. They also would violate the U.S. Constitution – i.e., it would result in a government ‘taking’ of private property for ‘public use’ without ‘just compensation’, in much the same way that U.S. Supreme Court Justice Stevens’ majority ruling in last year‘s highly controversial Kelo decision would deny individual citizens their private real property rights by providing government with broad discretion to
exercise its eminent domain power via regulation. Furthermore, once this international/national template (framework) is established, it will then likely be applied to the U.S. information and communication technology (ICT) sectors. Apparently, at least one US-based ‘multilateralist’-minded foundation is not very worried about weakening U.S. constitutional property right protections, nationally and abroad, and has recently awarded the NGO operated by health and environmental activists James Love and Ralph Nader a $500,000 startup grant. Their NGO, Knowledge Ecology International was formerly known as CPTech. See Judy Sarasohn, “An Honor and a Boon for Nine Nonprofits”, Washington Post, The Federal Page (8/24/06), at p. A19,at: http://www.washingtonpost.com/wp-dyn/content/article/2006/08/23/AR2006082301670.html .
[17] American ‘multilateralist’ include business leaders, as well. In a recent Financial Times op-ed article, IBM chief executive Sam Palmisano argues in favor of more globally, and thus, culturally integrated multinational companies that open up access to and freely share technologies and business standards with other countries and their industries, which are now made more easily available by the evolving global information technology and communications infrastructure. He reasons that such information and technology sharing (give-aways) would enable such companies to “connect m ore intimately with partners, suppliers and customers, and most importantly… to engage in multifaceted collaborative innovation. This kind of innovation is much m ore than the creation of new products”, he states. “It is also how services are delivered… This kind of innovation changes how business processes are integrated, how companies and institutions are managed, how knowledge is transferred, how public policies are formulated and how enterprises, communities and societies participate in and benefit from it all… Today, innovation is inherently global… But shifting to the model of globally integrated enterprises also presents big challenges for leaders in every sector of society… This will mean significant changes in organizational culture, new forms of partnership among multiple enterprises and segments of society and new standards for managing a com plex m arketplace.‖ In other words, companies will have many masters, including and beyond governments (see below)*. Interestingly, if U.S. companies don‘t subscribe to his thinking, the alternative is unthinkable. “These changes will take time. But the alternative to global integration is not appealing: left unaddressed, the issues surrounding globalization will only grow. People may ultimately elect governments that impose strict regulations on trade or labour, perhaps of a highly protectionist sort. Worse, they might gravitate toward more extreme forms of nationalism, xenophobia, and anti-modernism [a oblique reference to terrorism ]” (emphasis added). See Samuel Palm isano, “Multinationals Have Been Superceded”, Financial Times (6/12/06), at p. 15. The editors of the Financial Times, of course, picked up on this rhetoric. “Sam Palmisano, head of International Business Machines, today calls on multinationals to evolve into a new type of corporation if they are to avoid an antiglobalization
backlash that leads to the election of governments hostile to the interests of big business” (emphasis added). See Francesco Guerrera and Richard Waters, “IBM Chief Wants End to Colonial Companies”, Financial Times (6/12/06), at p. 1. It is arguable whether Mr. Palmisano is actually apologizing for the success of American capitalism/globalization, and that he actually recommending that Americans sacrifice their technologies and innovations (i.e., their constitutionally protected private property rights) for the greater good of global society to avoid mass anti-globalization activism. *See also “How to Regulate the Global Corporation”, Editorial, Financial Times (6/13/06), at p. 14. “Mr. Palmisano’s principal suggestion is to develop a global regulatory system through better cooperation between regulatory agencies (as apposed to creating a single behemoth). Companies might operate globally diverse supply chains. But they are still technically domiciled in one place and beholden to one set of shareholders. It should be the task of politicians everywhere to encourage greater cooperation between jurisdictions and to improve corporate governance. But this can only be part of the answer. As the world continues to integrate, reconciling tensions between efficient global economics and local democratic politics w ill test everyone‘s
imagination.” Id.
[18] Some American economists, as well, fall into the multilateralist apologist camp, such as Joseph Stiglitz, a well-known spokesperson for ‘political liberalism’ (social justice, environmentalism). According to a recent New York Times book review , Stiglitz’ new book entitled, “Making Globalization Work”, focuses on how ‘neoliberal economics’ derided as ‘market fundamentalism’‘ or the ‘Washington consensus’ “ vandalized the developing world” (emphasis added). It also describes how “smart people in Washington and New York with the correct ideas can help set the world right… Dr. Stiglitz’s vision for more equitable globalization — with caveats about the toughness of
the task — entails freer trade (no more loopholes for rich countries or corporate lobbies), curtailed intellectual property rights (‘monopolies’) and green accounting (factoring resource depletion and ecological damage into G.D.P.). It also means more transparency in international finance (to curb corruption), debt forgiveness (foolhardy creditors must take responsibility, too) and democracy (less secretive procedures opened to nongovernmental organizations and others). “It seemed terribly unfair,‘ he w rites, ‘that in a world of richness and plenty, so many should live in such poverty.’ Unfair it is. Designing a new global trade regime is a snap for Dr. Stiglitz. But how might it be put into place?... Often, he exhorts. ‘Rich countries’, he writes, ‘should simply open up their markets to poorer ones, without reciprocity.‘ As for global enforcement of rules, ‘w hat is needed is an international tribunal.’ Would its judges be appointed or elected? Would there be some disincentives, too, for global class-action suits? Details omitted. There is another catch. Developing countries, after getting their ‘fair share’, must ‘use the money well,’ he writes. So they‘ll need nonkleptocratic governments, uncensored media, enforced property rights, the rule of law. How to acquire them? He wants ‘developed country governments to provide role models’, and to inhibit the collusion in malfeasance abroad. Intent on championing regulation over an ‘unfettered’ market, he turns to postwar Japan and South Korea as examples of how governments can pilot an economic boom, though this view has been undermined on empirical grounds. He commends China for go-slow liberalization, without noting that the late-70‘s dismantling of peasant communes was a liberalizing big bang or that critics inside China today accuse the central government of abandoning economic liberalization, under the guise of gradualism , to gorge on the spoils of office” (emphasis added). See Stephen Kotkin, “Aiming to Level a Global Playing Field”, New York Times, Off the Shelf (9/3/06), at: http://www.nytimes.com/2006/09/03/business/yourmoney/03shelf.html?_r=2&oref=slogin&oref=slogin . See also Joseph Stiglitz, “We Have Become Rich Countries of Poor People”, Financial Times Comment (9/8/06), at p. 11. “We see an unfair global trade regime that impedes development and an unstable global financial system in which poor countries repeatedly find themselves with unmanageable debt burdens… Globalization seems to have unified so much of the world against it, perhaps because there appear to be so many losers and so few w inners… Growing inequality in the advanced industrial countries was a long predicted but seldom advertised consequence: full economic integration implies the equalization of unskilled wages throughout the world… Unfettered globalization actually has the potential to make many people in advanced industrial countries worse off, even if economic growth increases… The Scandinavian countries have shown there is another way. Investment in education and research and a strong safety net can lead to a more productive and competitive economy. A t the core of m any o f globalization’s failures is a simple fact: economic globalization has outpaced the globalization of politics and mindsets” (emphasis added). Id.
[19] Interestingly, extremists James Love and Ralph Nader, of the Consumer Project on Technology (CPTech) have long worked together to develop ‘open source methods’ as an international paradigm in both the health and information technology sectors. See James Love and Ralph Nader, “What To Do About Microsoft”, Le Monde Diplomatique (Nov. 1997), at: http://mondediplo.com/1997/11/nader ; James Love, “Nader Colleague Responds”, Information Week (6/13/02), at: http://wwwinformationweek.com/story/IWK20020613S0004 ; Ralph Nader and James Love, “Opinion: Ralph Nader Tells Feds to Stop Microsoft”, CNN.com (11/11/98), at: http://www.cnn.com/TECH/computing/9811/11/nader.idg/index.html ; Ralph Nader and James Love, “A Framework for ICANN and DMS Management”, proposals presented by Ralph Nader to “Governing the Commons: T he Future of Global Internet Administration”, a conference organized by Computer Professionals for Social Responsibility, (9/25/99), at: http://www.eff.org/Infrastructure/DNS_control/ICANN_IANA_IAHC/19990927_nader_icann_coms.html ; “Ralph Nader and James Love February 18, 1999 Letter to Secretary of State Madeleine Albright Regarding NGO/State Dialogue on International HIV/AIDS and Intellectual Property”, at: http://www.cptech.org/ip/health/cl/mafeb181999.html ; Sabin Russell, “New Crusade To Lower AIDS Drug Costs Africa's Needs at Odds With Firms’ Profit Motive” San Francisco Chronicle (5/24/99), at: http://www.sfgate.com/cgibin/article.cgi?file=/chronicle/archive/1999/05/24/MN104738.DTL ; “CPT Urges Gore to Reverse Policy on South African Policies Regarding Access to HIV/AIDS Drugs, Other Medicines” Common Dreams News Wire (4/9/99), at: http://www.commondreams.org/pressreleases/april99/040999i.htm
[20] In the U.S. Senate, there is currently proposed federal legislation – an amendment to U.S. patent law – which arguably violates the U.S. Bill of Rights Fifth Amendment ‘Takings’ clause. On May 25, 2006, Senator Patrick Leahy (D-VT), the ranking Democrat on the Senate IP subcommittee, introduced legislation – S .3175, entitled, “T he Life-Saving Medicines Export Act of 2006” – “A bill to amend title 35, United States Code, with respect to establishing procedures for granting authority to the Under Secretary for Commerce for Intellectual Property and Director of the Patent and Trademark Office to grant compulsory patent licenses for exporting patented pharmaceutical products to certain countries consistent with international commitments made by the United States, and for other purposes…” See Congressional Record – Senate (May 25, 2006), S5245-5252, at p. S5245, at: http://frwebgate.access.gpo.gov/cgi-bin/getpage.cgi?dbname=2006_record&page=S5245&position=all . “Under my bill, U.S. generic manufacturers would be allowed to make generic versions of patented drugs without the consent of the patent holders. Those patent holders would receive compensation in the form of a royalty payment under a so-called ‘compulsory license’ and the generic companies would then be required to sell those less-expensive generic drugs only to least-developed or developing nations. Use of a compulsory license occurs when Congress determines that there is an important need which should be addressed” (emphasis added). STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS -- (Senate - May 25, 2006), Ibid., at p. S5246, at: http://frwebgate.access.gpo.gov/cgibin/getpage.cgi?position=all&page=S5246&dbname=2006_record . A pharmaceutical product for purposes of the bill is defined as, “any patented pharmaceutical product, or pharmaceutical product manufactured through a patented process, including any drug, active ingredient of a drug, diagnostic, or vaccine needed to prevent or treat public health problems.” S.3175 Sec. 5(a)(7) at Cong. Rec. pp. 5250 -51. The Leahy bill, if adopted, would implement a proposed amendment to the WTO TRIPS Agreement provisions entitling pharmaceutical exporting country governments to issue compulsory licenses on privately owned patented drugs for the benefit of developing countries that lack their own drug manufacturing capacity. The amendment will go in effect, for those nations which adopt it, once 2⁄3 of the member nations adopt it. The current waiver approach, allowing nations to implement it now, will remain in place until the permanent amendment is adopted. Section 3 of the Leahy bill specifically “requires the Director of the United States Patent and Trademark Office to issue a compulsory license (permission to make and sell a patented product under this new Act) to permit generic companies to make and export medicines under the terms of WTO international agreements under several conditions.” Section 3 of the Leahy bill also grants the U.S. government (i.e., the PTO Commissioner) the authority to determine the price of the drugs and what the royalty rate shall be. “The holder of the compulsory license shall pay a royalty to the patent holder, as determined by the Director of the PTO within a limited range of possible rates set forth in the bill, taking into account such factors as humanitarian needs, the economic value to the importing nation, and the need for low-cost pharmaceutical products by persons in the importing nation… The maximum royalty for any shipment shall not exceed 4 percent times the commercial value of the pharmaceutical products to be exported under this Act under that supply agreement.” Thus, Section 3 of the bill only requires that “Efforts must have been made by the generic company to buy the right to make and sell the medicine under normal business arrangements with the patent holders.” It does, not, however, require that reasonable efforts be made to negotiate a fair arms-length price. Moreover, Section 3 of the Leahy bill would grant broad discretion to the PTO Commissioner to issue compulsory licenses for the benefit of multiple developing countries at the same time, and, without any benchmarks, to arbitrarily waive the provisions of the bill w hen deem ed necessary to achieve the bill‘s underlying objective. ―In addition, the Director may accept combined applications from multiple eligible countries. Note that in emergency situations the Director may waive provisions of the bill in a manner consistent with the WTO agreements” (emphasis added). Section 4 of the bill expressly declares that “(Not a patent infringement): This section makes clear that compulsory licenses issued under this Act shall not be considered an infringement of a patent” (emphasis added). Consequently, the Leahy bill “would allow U.S. generic drug firms to manufacture low-cost generic versions of patented medicines for export to nations in need when a voluntary agreement between the generic and the brand-name U.S. compan[ies] cannot be negotiated. Those patent holders would get royalty payments, and the generic firms would then be required to sell those less-expensive drugs only to the poorest countries… Leahy‘s bill would amend U.S. patent law to allow implementation of the low-cost drug provisions of a 148-nation agreement completed last year. The Bush Administration itself has not proposed any implementing legislation…” See “Leahy Unveils Bill to Foster Low-Cost Drugs for World‘s Poorest”, Press Release (5/21/06), at: http://leahy.senate.gov/press/200605/051906.html The fact that the European Union previously promulgated its own regulation to implement the proposed WTO should not influence how the U.S. Congress treats U.S. private property rights. Interestingly, considering the tone of the European regulation, it is not surprising that Senator Leahy justifies the need to enact his bill on moral grounds. “This is a moral issue. I am working with a number of religious groups, humanitarian organizations, international assistance groups, and generic drug companies on this effort” (emphasis added). Id. In addition, Senator Leahy justifies this ‘taking‘ of private property‘ for ‘public use’ without ‘just compensation’ on ‘CRISIS’ grounds - as necessary to “enhance America‘s image in the world” and to “contain diseases in other nations” before they strike Americans and others traveling abroad, who can then bring the diseases with them back to America. “Thus, the bill addresses both the urgent needs of millions of low-income families in impoverished nations while protecting the interests of the patent owners of these life-saving medicines and w ill hopefully help enhance America‘s image in the world. For those only interested in self-interest rather than humanitarian aid, note that because of the globalization of travel our Nation is at risk from failure to contain diseases in other nations. America has a strong self-interest in combating diseases in foreign nations. A surprising number of new diseases have emerged in recent years. Some of these new diseases are variations of existing diseases. The volume of people and cargo going to and from distant nations is astounding. According to ‘Rx for Survival’ by Philip Hilts, ‘if you count only travel between nations with a heavy burden of disease and those with less disease, more than a million people a week are making the trip. The more viruses and bacteria mutant inside animals and people, and the more people and goods travel throughout the world, the more residents living in the United States are at risk of being harmed by dangerous diseases.’” STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS -- (Senate - May 25, 2006), Id., Cong. Rec.-Senate at p. S5246, supra.
[21] See “Intellectual Property: U.S. Trade Policy Guidance on WTO Declaration on Access to Medicines May Need Clarification”, U.S. Government Accountability Office (Sept. 2007) at: http://oversight.house.gov/documents/20071030125409.pdf
[22] “Regrettably, the U.S. trade strategy has prioritized patents over public health," said Rep. Waxman. ‘The Democratic leadership in Congress has pushed the White House to make significant changes in the Peru and other recent free trade agreements. I support these important first steps to achieve a more balanced policy. But as today's report demonstrates, we have a long way to go in improving the public health aspects of U.S. trade policy as a whole.’ ‘The Bush Administration must stop putting the financial interest of the pharmaceutical industry ahead of the needs of the poor and sick in developing countries,’ said Sen. Kennedy.” See “New GAO Report Indicates U.S. Trade Policy Neglects Public Health Issues” Press Release (Oct. 30, 2007) at: http://oversight.house.gov/documents/20071030130846.pdf
[23] “The GAO report highlights in some detail the many ways that the Bush administration has violated the Doha provision in the 2002 Trade Promotion Authority legislation. The Act designated respecting the Doha Declaration on the TRIPS Agreement and Public Health as a principal negotiating objective related to intellectual property. ‘It is time for the Bush administration to stop defending Big Pharma's interests in extended patent monopolies, at the expense of public health," says Robert Weissman, director of Essential Action, a Washington, D.C.-based organization that aims to expand access to essential medicines. "The life-and-death consequences are just too high.’ ‘A new policy should have advancing public health, rather protecting large corporate contributors, as its starting point," said Weissman. "From there, it's easy to see what to do: promote generic competition — including but not limited for the AIDS drugs that the President's own AIDS program is purchasing — stop pushing for higher patent and drug monopoly standards in developing countries, and explore new ways to promote both innovation and affordability.’” See “GAO Report Highlights How U.S. Policy Undermines Public Health”, Essential Action Press Release (Oct. 31, 2007) at: http://www.essentialaction.org/access/index.php?/archives/79-GAO-Report-Highlights-How-U.S.-Policy-Undermines-Public-Health.html
[24] “The GAO report, "Intellectual property: U.S. Trade Policy Guidance on WTO Declaration on Access to Medicines May Need Clarification” ‘assesses how the office of the U.S. Trade Representative (U.S.T.R.), along with other agencies, has interpreted and implemented the 2002 Trade Promotion Authority (TPA) Act, which affirmed the United States' commitment to the Doha Declaration. The report indicates that until the current congressional leadership negotiated public health modifications to pending free trade agreements, U.S.T.R. made virtually no changes in its trade strategy to advance the goals of the Doha Declaration. It further finds that the Bush Administration entered into a series of free trade negotiations with developing countries demanding provisions that threaten the ability of our trade partners to take necessary public health measures.’” Id.
[25] See Lawrence Kogan, “Claims of Improper U.S. Lobbying Quite a REACH”, EU Reporter (May 3-7, 2004) at p. 18, at: http://www.itssd.org/Publications/1-20_EUR_04May04.pdf (Waxman worked with environment activist community to criticize Bush administration policy as unduly interfering with EU chemicals policymaking, notwithstanding that its US government conduct was consistent with WTO law).
[26] “GAO chose to limit the scope its report. There are other ways in which the executive branch is working to undermine the promise of the Doha Declaration, beyond what is included in the report. Congress should investigate and end these practices. They include: Misguided and poor quality technical assistance that encourages developing countries to overprotect pharmaceutical patent monopolies (this is mentioned in an appendix to the GAO report, but merits much closer scrutiny); Pressure on the World Health Organization (WHO) — including efforts to suppress important reports — not to advise countries on how to make medicines affordable; and Improper interference in the WHO Intergovernmental Working Group on Public Health, Innovation and Intellectual Property negotiating process, including by pressuring country negotiators not to support positions embodying Doha Declaration objectives.” See “GAO Report Highlights How U.S. Policy Undermines Public Health”, Essential Action Press Release, supra.