Lula Disrespects Private Property, “Taking” Foreign Investors’ DPP

By Lawrence A. Kogan


Brazilian obligatory licensing law motivated politically

Some time ago the media was discussing the right of the Thai and Brazilian governments to
declare a compulsory patent license for medicine, obtained by foreign pharmaceutical companies
that do business within those two countries. The truth is the Brazilian government concluded
\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:12.0pt;font-family:TimesNewRoman\"\>that the Brazilian law and\nthe WTO allow the government to issue compulsory licenses for\u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:12.0pt;font-family:TimesNewRoman\"\>medication used to combat\nAIDS. Arguably, Lula was encouraged by the Thai government’s\u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:12.0pt;font-family:TimesNewRoman\"\>controversial issuing of\nthree compulsory licenses. The justification for the illegal expropriation\u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:12.0pt;font-family:TimesNewRoman\"\>of private property for Brazil was that\nit was necessary to protect the “public interest/good”,\u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:12.0pt;font-family:TimesNewRoman\"\>according to the country’s\nConstitution and Intellectual Property Law. Lula’s government also\u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:12.0pt;font-family:TimesNewRoman\"\>argued that these actions\nappropriately implemented Article 31 of the WTO’s TRIPS agreement,\u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:12.0pt;font-family:TimesNewRoman\"\>that when they correspond\nwith the Doha Declaration, reflects a greater leniency in “allowing\u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:12.0pt;font-family:TimesNewRoman\"\>governments to declare\n(subjectively) a ‘national emergency’ and to issue compulsory\nlicenses\u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:12.0pt;font-family:TimesNewRoman\"\>for any reason, without\nconsulting with the owner of the foreign patent.”",1]
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that the Brazilian law and the WTO allow the government to issue compulsory licenses for
medication used to combat AIDS. Arguably, Lula was encouraged by the Thai government’s
controversial issuing of three compulsory licenses. The justification for the illegal expropriation
of private property for Brazil was that it was necessary to protect the “public interest/good”,
according to the country’s Constitution and Intellectual Property Law. Lula’s government also
argued that these actions appropriately implemented Article 31 of the WTO’s TRIPS agreement,
that when they correspond with the Doha Declaration, reflects a greater leniency in “allowing
governments to declare (subjectively) a ‘national emergency’ and to issue compulsory licenses
for any reason, without consulting with the owner of the foreign patent.”
\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:12.0pt;font-family:TimesNewRoman\"\> \u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:12.0pt;font-family:TimesNewRoman\"\>Arguably, Brazil’s\nstance was forged and encouraged by NGOs in the developed world,\u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:12.0pt;font-family:TimesNewRoman\"\>motivated by propaganda and\nample resources. These groups, apart from their socialist party\u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:12.0pt;font-family:TimesNewRoman\"\>ideology, are now focusing\non the elimination of private property as their central pillar in the\u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:12.0pt;font-family:TimesNewRoman\"\>international legal field.\nIt is clear that the Brazilian government is using the NGOs to promote a\u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:12.0pt;font-family:TimesNewRoman\"\>new global anti-IP paradigm\nof open source access in the area of health assistance and the spread\u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:12.0pt;font-family:TimesNewRoman\"\>of information that will\nprevent strong private property rights, particularly American patent\u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:12.0pt;font-family:TimesNewRoman\"\>owners, publishers and trade\nsecrets. It is clear that this new world paradigm is a key part of\u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:12.0pt;font-family:TimesNewRoman\"\>President Lula’s\nnational innovation plan.\u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>",1]
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Arguably, Brazil’s stance was forged and encouraged by NGOs in the developed world,
motivated by propaganda and ample resources. These groups, apart from their socialist party
ideology, are now focusing on the elimination of private property as their central pillar in the
international legal field. It is clear that the Brazilian government is using the NGOs to promote a
new global anti-IP paradigm of open source access in the area of health assistance and the spread
of information that will prevent strong private property rights, particularly American patent
owners, publishers and trade secrets. It is clear that this new world paradigm is a key part of
President Lula’s national innovation plan.
\u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:12.0pt;font-family:TimesNewRoman\"\>Moreover, it is common\nknowledge that in the past Lula has favored the poor, the uneducated,\u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:12.0pt;font-family:TimesNewRoman\"\>and his national labor\nunions in order to assure his reelection. This favoritism was necessary due\u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:12.0pt;font-family:TimesNewRoman\"\>to a series of corruption\nscandals involving some of his closest collaborators, and for his\u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:12.0pt;font-family:TimesNewRoman\"\>government’s inability\nto implement public education, pension and infrastructure measures that\u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:12.0pt;font-family:TimesNewRoman\"\>the educated would have held\nhim responsible for. The uneducated are not better off in\u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:12.0pt;font-family:TimesNewRoman\"\>economic or social terms\neven though they receive monthly assistance in exchange for votes\u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:12.0pt;font-family:TimesNewRoman\"\>(Bolsa Familia program). The\ncapital markets are also not better off than what they would have\u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:12.0pt;font-family:TimesNewRoman\"\>been, not including a\nrelative calm during the first and second quarters. In each one of these\u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:12.0pt;font-family:TimesNewRoman\"\>",1]
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Moreover, it is common knowledge that in the past Lula has favored the poor, the uneducated,
and his national labor unions in order to assure his reelection. This favoritism was necessary due
to a series of corruption scandals involving some of his closest collaborators, and for his
government’s inability to implement public education, pension and infrastructure measures that
the educated would have held him responsible for. The uneducated are not better off in
economic or social terms even though they receive monthly assistance in exchange for votes
(Bolsa Familia program). The capital markets are also not better off than what they would have
been, not including a relative calm during the first and second quarters. In each one of these
\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:12.0pt;font-family:TimesNewRoman\"\>well being of the people and\ntheir ability to care for themselves did not improve one bit.\u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:12.0pt;font-family:TimesNewRoman\"\> \u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:12.0pt;font-family:TimesNewRoman\"\>After signing the order to “break”\nthe patent for AIDS medication, Lula advised that this could\u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:12.0pt;font-family:TimesNewRoman\"\>occur with other licenses if\nprices cannot be afforded. Furthermore, even after various warning\u003c/span\>\u003c/font\>\u003cfont size\u003d\"2\" face\u003d\"TimesNewRoman,BoldItalic\"\>\u003cspan style\u003d\"font-size:10.0pt\"\>\u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:12.0pt;font-family:TimesNewRoman\"\>by foreign investors that\nLula’s actions are slowing foreign direct investment into Brazil, Lula\u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:12.0pt;font-family:TimesNewRoman\"\>has responded by saying that\nthe benefit of “breaking” the patents is to the benefit of\nBrazilians\u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:12.0pt;font-family:TimesNewRoman\"\>and world citizens alike. If\nLula’s tone is more like Robin Hood than head of state, it’s\nprobably\u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:12.0pt;font-family:TimesNewRoman\"\>not a coincidence.\u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:12.0pt;font-family:TimesNewRoman\"\>",1]
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cases, the groups are not less dependent than they were prior to the election. It is clear that the
well being of the people and their ability to care for themselves did not improve one bit.

After signing the order to “break” the patent for AIDS medication, Lula advised that this could
occur with other licenses if prices cannot be afforded. Furthermore, even after various warning
by foreign investors that Lula’s actions are slowing foreign direct investment into Brazil, Lula
has responded by saying that the benefit of “breaking” the patents is to the benefit of Brazilians
and world citizens alike. If Lula’s tone is more like Robin Hood than head of state, it’s probably
not a coincidence.
\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:12.0pt;font-family:TimesNewRoman\"\>research and development\nthat has guided foreign direct investment, scientific innovation and\u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:12.0pt;font-family:TimesNewRoman\"\>technology, and economic\ngrowth will continue at the current pace. Lula will also not be able to\u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:12.0pt;font-family:TimesNewRoman\"\>guarantee to small and\nmedium sized that they will have the technical capacity to compete\u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:12.0pt;font-family:TimesNewRoman\"\>internationally. The\ngovernment is also under pressure to maintain positive relations with the\u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:12.0pt;font-family:TimesNewRoman\"\>United\n States\u003c/span\>\u003c/font\>\u003cfont face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-family:TimesNewRoman\"\>, Brazil’s largest trade\npartner, and some hope that President Lula’s stance on\u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:12.0pt;font-family:TimesNewRoman\"\>property rights does not\nharm the relationship.\u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:12.0pt;font-family:TimesNewRoman\"\> \u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:12.0pt;font-family:TimesNewRoman\"\>In conclusion, Brazilian\nbusinesses and investors in biotechnology, pharmaceuticals, chemicals,\u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:12.0pt;font-family:TimesNewRoman\"\>",1]
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Besides the rhetoric, Lula’s government can’t provide businesses with the guarantee that the
research and development that has guided foreign direct investment, scientific innovation and
technology, and economic growth will continue at the current pace. Lula will also not be able to
guarantee to small and medium sized that they will have the technical capacity to compete
internationally. The government is also under pressure to maintain positive relations with the
United States, Brazil’s largest trade partner, and some hope that President Lula’s stance on
property rights does not harm the relationship.

In conclusion, Brazilian businesses and investors in biotechnology, pharmaceuticals, chemicals,
\u003c/font\>\u003c/p\>\n\n\u003cp style\u003d\"text-autospace:none\"\>\u003cfont size\u003d\"3\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:12.0pt;font-family:TimesNewRoman\"\>secrets and copyrights they\ncurrently enjoy will be next in Lula’s sights.\u003c/span\>\u003c/font\>\u003cfont size\u003d\"2\" face\u003d\"TimesNewRoman\"\>\u003cspan style\u003d\"font-size:10.0pt;font-family:TimesNewRoman\"\>\u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp\>\u003cfont size\u003d\"2\" face\u003d\"Arial\"\>\u003cspan style\u003d\"font-size:10.0pt;font-family:Arial\"\> \u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp\>\u003cfont size\u003d\"2\" face\u003d\"Arial\"\>\u003cspan style\u003d\"font-size:10.0pt;font-family:Arial\"\> \u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp\>\u003cfont size\u003d\"3\" face\u003d\"Times New Roman\"\>\u003cspan style\u003d\"font-size:12.0pt\"\>The Portuguese Translation of this article appeared on page 8 within the\nJune 2007 issue of the Revista Leader Magazine, a publication of the Instituto\nDe Estudos Empresariais, Porto Alegre,\nBrasil. \u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cdiv align\u003d\"center\"\>\n\n\u003ctable border\u003d\"0\" cellspacing\u003d\"0\" cellpadding\u003d\"0\" width\u003d\"72%\" style\u003d\"width:72.46%\"\>\n \u003ctr height\u003d\"39\"\>\n \u003ctd width\u003d\"100%\" height\u003d\"39\" valign\u003d\"top\" style\u003d\"width:100.0%;padding:0in 0in 0in 0in\"\>\n \u003cp style\u003d\"text-align:justify\"\>\u003cfont size\u003d\"3\" color\u003d\"black\" face\u003d\"Times New Roman\"\>\u003cspan style\u003d\"font-size:12.0pt;color:black\"\>\u003ca href\u003d\"http://www.itssd.org/Publications/artigosentrevistas_rev(2)-KoganarticleIEERevistaLeader-June2007.pdf\" target\u003d\"_blank\" onclick\u003d\"return top.js.OpenExtLink(window,event,this)\"\>Lula\n Desrespeita A Propriedade Privada ‘Tomando’ OS DPP De\n Investidores Estrangeiros\u003c/a\>\u003c/span\>\u003c/font\>\u003c/p\>\n \u003c/td\>\n \u003c/tr\>\n\u003c/table\>\n\n\u003c/div\>\n\n\u003cp\>\u003cfont size\u003d\"2\" face\u003d\"Arial\"\>\u003cspan style\u003d\"font-size:10.0pt;font-family:Arial\"\> \u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp\>\u003cfont size\u003d\"2\" face\u003d\"Arial\"\>\u003cspan style\u003d\"font-size:10.0pt;font-family:Arial\"\> \u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp\>\u003cfont size\u003d\"2\" face\u003d\"Arial\"\>\u003cspan style\u003d\"font-size:10.0pt;font-family:Arial\"\> \u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp\>\u003cfont size\u003d\"2\" face\u003d\"Arial\"\>\u003cspan style\u003d\"font-size:10.0pt;font-family:Arial\"\> \u003c/span\>\u003c/font\>\u003c/p\>\n\n\u003cp\>\u003cfont size\u003d\"2\" face\u003d\"Arial\"\>\u003cspan style\u003d\"font-size:10.0pt;font-family:Arial\"\>",1]
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software, automobile and aeronautical sectors should ask themselves if the patents, commercial
secrets and copyrights they currently enjoy will be next in Lula’s sights.


The Portuguese Translation of this article appeared on page 8 within the June 2007 issue of the Revista Leader Magazine, a publication of the Instituto De Estudos Empresariais, Porto Alegre, Brasil.
Lula Desrespeita A Propriedade Privada ‘Tomando’ OS DPP De Investidores Estrangeiros