I. Introduction Brazil must choose the right path: innovation vs. opportunism.

• Author: Kogan, Lawrence A.

The Purpose of this White Paper

The purpose of this article is to reintroduce the notion of private property rights into the current global debate about the utility of intellectual property (IP) in promoting scientific and technological invention and innovation. (1) This article argues that, if the Government of Brazil reexamined the elements of and rationale underlying the international recognition of private property rights, including intellectual property rights (IPRs) (i.e., patents, trade secrets, copyrights, etc.) it would see how it could dramatically improve Brazil's future scientific, technological, and economic prospects. This article also argues that, based on the successes experienced in other countries that have rediscovered the value of intellectual property rights, the Brazilian government would inevitably be able to promote the indigenous innovation, domestic entrepreneurship, foreign direct investment, and R&D-related technology transfers necessary to catapult Brazil to national and international advancement.

This article, furthermore, explains how, by choosing to proceed down the opportunistic 'open source'/ universal access path of development, which eschews the concept of private property, including privately held IPRs, in favor of plentiful and cheap public knowledge, Brazil risks the success of its own IP-rich domestic industries. These include mostly small and medium-sized enterprises, many of which rely on know-how and innovation to survive and flourish. In addition, this article explains how governmental failure to strike the right balance between private and public property rights when designing a national innovation system can actually jeopardize the very public goods--knowledge, technology, human health, environmental protection and poverty alleviation (i.e., economic freedom (2 3 4) as well as political freedom)--that open source/universal access methods cannot possibly provide.

Moreover, this article describes the significant and indispensable role that private IPRs and innovation have played in the history of national Industrialization and development. It also cites the important distinctions between the individual-centric (American) and state-centric (Europe-Japan-China-India) innovation systems that Brazil must consider as it reevaluates its policy options. Although there is historical precedent upon which Brazil apparently relies to justify its opportunistic IP behavior, the previous international order that fostered such conduct no longer exists, and the former protagonist nations themselves have since been in the process of politically and economically evolving. Indeed, the more respectful of private property rights and law-abiding emerging and developing economies in Asia, Latin America and the Middle East have become, the greater the prosperity and access to healthcare and knowledge their citizens have enjoyed.

Brazil Promotes a New Global Paradigm that Favors IP Opportunism

The Brazilian Government has undertaken a number of provocative activities internationally within intergovernmental fora to challenge the established global system that protects exclusive private property rights, including intellectual property rights (IPRs), championed by the developed nations of the Organization of Economic Cooperation and Development (OECD). These fora include the WTO, WHO, WIPO, UNCHR, UNDP, UNEP and UNESCO. (5) * There, Brazil has assumed a leading role in helping to promote a new global paradigm that calls for the current high technology, knowledge and information-based digital era to become 'universally accessible, 'open source', and essentially 'free of charge" to developing countries--i.e., 'public international goods'. Brazil, along with a growing chorus of developing nations, activists and self-proclaimed 'new social and environmental thinkers', has alleged that such an IPR-counter paradigm is consistent with an expansive notion of 'sustainable development (SD). (6 7) Brazil has opportunistically defined itself, for these purposes, as a 'developing' country.

Sustainable development, (8) as defined in this context, is premised on the need to secure continuous international 'science and technology IP transfers' (9) at concession rate prices. (10) Anti-market, anti-private property and anti-WTO advocates, and increasingly, American internationalists, believe that this is necessary in order to prevent the emergence of extreme economic, scientific, technological and social disparities and popular backlashes against globalization that will likely threaten international peace and security, (11 12 13 14 15) These advocates also claim that such actions are called for within the Millennium Development Agenda goals so that developing countries may liberate themselves from endemic poverty and ultimately achieve economic and social parity with the developed world. (16) In other words, 'sustainable development', a concept originally articulated almost twenty years ago, has since been effectively hijacked and shaped, by politically astute social, health and environmental activists and socialist-minded government bureaucrats, into a negative anti-development, anti-market, anti-private property and anti-WTO doctrine, largely modeled alter the European welfare state. (17) Many such individuals have long been able to influence policymaking in Europe and the United" Nations, even without fully understanding science, technology, economics or trade. (18)

However, recent research has shown how the pursuit of such a negative paradigm of sustainable development actually harms rather than helps developing country prospects for scientific, technological and economic advancement. (19) And, prior research, as well, performed by famous French author and historian Alexis de Tocqueville, recognized how exclusive private property ownership in 19th century America held a positive and taming influence over the dark forces of revolution and war which had then plagued continental Europe. (20)

Evidently, the Government of Brazil has been influenced and encouraged by the populist campaigns waged by developing nation governments and utopian-minded social and environmental activist groups (the modern-day "revolutionaries') that are aimed at (intended to ingratiate) the 'common people'--the underprivileged (poverty-stricken) masses. Comprised of mostly political and economic socialists, activist nongovernmental organizations (NGOs), and anti-private property and anti-free market academics, (21 22 23), these groups are well skilled in manipulating public opinion and the organs of the United Nations to promote an alternative global framework that minimizes private property ownership rights and the role of 'neo-liberal economics'. Brazilian politicians are also, to some extent, observing the current political debates within the U.S. over patent system reform (24 25 26 27) and concerning the utility of the current regulatory framework by which hi-tech industries commercialize U.S. federally funded university-based R&D. (28 29 30) Their goal is to exploit these debates in order to undermine exclusive U.S. private property rights both domestically and abroad. (31) * (32 33 34) ** Unfortunately, these crosscurrents have generated more policy conflict than consensus among the various expert groups within the Government of Brazil. One may even speculate that this lack of consensus has emboldened Brazil's ruling party to promote a culture of political and economic opportunism within Brazil--intended to mask internal Brazilian systemic deficiencies--that has now transcended national...