The Wall Street Journal (WSJ) ran an opinion piece yesterday arguing that India is “rapidly evolving into Asia’s innovation center” and “leaving China in the dust” because of its famed intellectual property regime.
Not only is the claim patently bogus, but the opposite—that the Indian innovation is surviving primarily through piracy—is very likely true. It is, of course, clear that the authors of the article have never ventured to Palika Bazaar or Nehru Place in Delhi or the countless other entities that use and sell pirated materials in India. Nor have the authors ever read an Indian science book, for all they will find are hasty copies of works by foreign authors on poor paper. Nor have they ever been to an Indian store in the US. For they won’t be able to spot a rightfully purchased Bollywood movie at these stores.
Yes, India has a wonderful copyright law. At least so the gentlemen would like us to believe. However, it is rarely enforced. The article points out that in 1994 the copyright act was amended to explain the rights of holder and penalties for infringement. “In 1994, the Indian Copyright Act was amended to clearly explain the rights of a copyright holder and the penalties for infringement of copyrighted software.” Nowhere does the article mention that the act itself was rewritten to make it tougher. The only effect of the law, which the article mentions has been called one of the “toughest in the world” (without quoting sources), was to create this handbook.
Since the implementation of a copyright law that was “one of the toughest in the world,” a government study on copyright piracy in India done in 1999 concludes, “The total value of pirated copyright products sold in India during 1996-97 was about Rs. 1,833 crores which formed 20% of the legal market. Segment wise, the piracy rate is found to be the highest in computer software (44%) and lowest in cinematographic works (5%).”
Let me finish by focusing on how piracy has helped India innovate. Without the countless street level computer training centers which mostly rely upon pirated software, there wouldn’t have been an IT revolution in the country. Without the lax patent laws on Pharmaceuticals, which patented only the way in which a medication is produced and not the mix of ingredients itself, there would have been no Indian success story in Pharmaceuticals. Without the cheap knock-off science books that are abundant for poor Indian students, there wouldn’t have been the countless educated Indians with a high level of understanding of fundamentals of science.
Moving on to the authors’ contention that India is leaving behind China in the dust. The authors use the following line to support such an exaggerated claim, “The number of Indian patent applications filed has increased 400% over the past 15 years.”
Aah, the wonders of statistics.
Let’s put the numbers in perspective. “According to the World Intellectual Property Organization’s (WIPO), the number of international patent applications from Japan, Republic of Korea, and China, has risen by 162%, 200%, and 212%, respectively, since 2000. These growth rates reflect the rapidly growing technological strength in northeast Asia.” More instructively, China in 2004 filed for 1,705 patents while India filed for 689. [PDF – WIPO statistics]. One more comment about China. Chinese economy (and innovation) with annualized growth rates of upwards of 9% and with high tech stalwarts like Lenovo is flourishing. Any comments as to leaving China in the dust aren’t just wrong, but also dumb or dishonest.
Lastly, I would like to address the question of why this poorly researched article trumpeting fake achievements and rationale for India’s success has made it to the Wall Street Journal. My guess is that this is a deliberate piece, produced after much deliberation with the businesses. It comes as no surprise that one of the authors of the article, Mr. Wilder is a lawyer representing the euphemistically named IP lobbying Association called the “Association for Competitive Technology.”