INTELLECTUAL PROPERTY RIGHTS PROTECTION IN SINGAPORE : AN ECONOMIC ANALYSIS

Abstract

It is difficult to disengage our everyday life from intellectual property (IP). The book that we read, the electrical appliances that we use, the products that we consume is someone's intellectual property. IP had never warrant as much attention as it did since the last decade. Changing business environment and economic conditions coupled with the increase in the pace of technological advancement were the primary reasons for increasing significance in IP. Losses to counterfeit manufacturers in the developing economies are staggering, amounting to a conservative estimate of U.S.$200 billion compared to U.S.$61 billion in 1986. In the software industry alone, software piracy plaque the industry in 1996 with worldwide dollar losses exceeding U.S.$11.2 billion. No product categories are left unscathed. Brands associated with popular culture, e.g. Walt Disney characters, Malboro, Adidas, Polo Ralph Lauren, Gucci, Rolex have been favourite targets because of the global diffusion of popular culture and also because the manufactures of these products and images require relatively simple technologies. Production involving more sophisticated technologies, e.g. pharmaceuticals, biotechnology and machinery were also becoming increasingly popular due to the large profit margins. Pirating is a lucrative business to producers of pirated goods because the profit margin is large, the probability of being caught is low and the penalty for many of those convicted is light While corporations are vexed with the huge financial losses from all forms of piracy but the consumers welcome such pirated goods, particularly recorded music, software and clothing, especially when pirated copies nearly replicate the quality of the original. In Singapore, it is not difficult to see counterfeits of Walt Disney, Warner Brothers and other brands of fashion apparels but they are very much under control and there have been no complaints from the original producers about the counterfeits of these products. Software and recorded music piracy are the two most rampant and most criticised IPRs problems here. The study looks into the problem in the software market to analyse if their criticism about this industry is valid and worth rectifying. Using the theory of third degree price discrimination, it was found at the most basic level of the research, that it is not urgent for the government to take specific actions to improve the current situation. The monopoly software has not suffered as much losses as was claimed and even if the government were to administer stricter enforcement, original software sales will not improve significantly. Software pirates were catering to a separate demand. In addition to this finding, it seems that removal of piracy might hurt the industry on the whole due to the lost consumer and producer surpluses. Furthermore, there is no local software development industry and other evidences to substantiate the argument of protection were non-existent.