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https://www.belmontentertainmentlaw.com/2022/04/12/your-patent-is-no-good-here-russias-war-on-intellectual-property-following-war-in-ukraine/

What are the pros and cons of wilfully engaging in IP piracy?

Most countries that are poor are members of the WTO and decide to pay remuneration for the use of IP held by a foreign country. I am wondering why Russia is the only country that did that when there are poorer countries that could benefit from IP piracy since the use and production of certain medicines are extremely costly.

I always thought that the pros always outweighed the cost, but after seeing Russia do what it did, I am wondering if there are some pros and cons that I am not fully aware of.

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    The USSR did something rather similar IIRC. And probably China too, before opening their economy to the West. And even after that to some extent, some would say. Commented Aug 8, 2022 at 13:41
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    There are some details here cs.stanford.edu/people/eroberts/cs201/projects/2007-08/… on patents in early communist China, but not much on foreign patents. China did briefly completely scrap patents in 1963. Commented Aug 8, 2022 at 13:47
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    And that's probably an understatement, that law wasn't apparently changed until 1985. However, they kinda recognized American patents in a 1979 trade agreement. Commented Aug 8, 2022 at 13:56
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    This appears to be about actions by Russia and not the WTO
    – Joe W
    Commented Aug 8, 2022 at 13:56
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    As for the last para, the WTO does give some ability to (developing) countries to invoke difficulties for excepting medical patents. Also, no countries left the WTO, as far as I know, so the Q is doubly bad from that perspective. Commented Aug 8, 2022 at 14:06

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The "up" side is clear.

IP piracy gets you stuff for free. Or for the cost of reverse engineering it which is very often drastically less than the cost of a license, and nearly always less than the cost of producing equivalent IP on your own.

Additionally, for countries at least, any negative consequences are very likely to be delayed, possibly fall on people other than those doing the piracy or those getting the benefits, and possibly may be avoided completely.

The "down" side is comes in two forms.

First, some direct punishment is possible, at least in theory.

There are some international agencies that try to do something about IP theft. These may attempt to levy fines, exclude certain groups or countries from participating in certain meetings or treaties, and various other such items.

If the IP theft is large enough, various governments may get involved. This may produce such things as sanctions, banning of certain products from countries that don't police IP or companies that don't respect IP, black lists such that certain persons cannot get visas, and so on. As one example, if a company is sufficiently blatant in IP theft, its employees may get imprisoned if they visit a country that has become upset about the IP theft.

The producers of the IP also make some attempts to hamper the theft. Unregistered software may not work correctly, for example. There are other possible things such software could do, but I will not list them since I do not want any possibility of appearing to condone them. But pirated software has lots of possible drawbacks.

Pirated software does not come with support. You can't call the 1-800 number to get help with your software if your software was copied.

Another possible type of drawback is reputation damage. If a country is well known to steal IP then companies and other countries may withdraw from trade with the pirate. Whether or not that happens, and whether or not it is persuasive to the pirate, will have very many complicating factors. For example, a developing country with lots of agriculture but not much cash, may think it is better to steal a million copies of MS Windows and accept the hit to their reputation. In comparison, an indistrialized nation with a large fraction of their economy in exported goods may find the reputation damage is far more costly than the price of the software they could steal.

Another aspect of reputation damage is exclusion from information sharing. Consider the recent COVID pandemic. If a country is a severe pirate of bio IP, it may be excluded from accessing data regarding such bio IP. That may mean they cannot get such things as data bout the virus to help them with testing, vaccine distribution and administering, and related items.

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  • I'll note that Russia's ability to trade IP legally may be hampered by the various sanctions being imposed on Russia as well as by foreign companies refusing to do business with Russia. IP piracy is useful in cases where the IP is not legally available, even in exchange for money.
    – Brian
    Commented Aug 10, 2022 at 13:17

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