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 Peterson Institute for International Economics

PRIVATE RIGHTS AND PUBLIC PROBLEMS

PRIVATE RIGHTS AND PUBLIC PROBLEMS

Private
“A landmark publication produced by a distinguished author who continues to lead in a field
he helped create and define, this volume offers three essential resources that policy discussions
on intellectual property always need but rarely exhibit so abundantly: theoretical precision, a
sound empirical footing, and robust common sense.”

Rights
—Antony Taubman, Director, Intellectual Property Division, World Trade Organization

“It is hard to find an area of international commerce in which policy discussions do not touch
on questions of intellectual property (IP) protection–whether they concern medicines or
music, seeds or solar cells. Few economists have studied these questions as thoroughly as Keith

and
Maskus. This book is a state-of-the art resource for anyone seeking insight into thinking and
evidence on international IP matters.”
—Carsten Fink, Chief Economist, World Intellectual Property Organization

Public
“Keith Maskus remains essential reading. Twelve years after Intellectual Property Rights in the
Global Economy, this book builds upon more than fifteen years of experience since the incep-
tion of the WTO TRIPS Agreement. Lucidly written, it makes available economic analysis and
policy suggestions to a wider audience interested in the legal challenges of shaping a proper

Problems
balance of private rights and public goods. The book makes a critical contribution to the
debate.”
—Thomas Cottier, Managing Director, World Trade Institute, University of Bern, Switzerland

“In this book, Maskus maps out the landscape of what we know and do not know in this
critical policy domain and offers up a useful, balanced, and thought-provoking set of policy
recommendations. Not everyone who cares about innovation and technology diffusion in the
21st century global economy will agree with all the recommendations Maskus makes, but even
those who disagree will benefit from reading this book.”
—Lee Branstetter, Associate Professor of Economics and Public Policy, Carnegie Mellon
The Global Economics
University, and former Senior Economist, Council of Economic Advisers
of Intellectual Property
  
Keith E. Maskus, research fellow at the Peterson Institute for International Economics, is in the 21st Century
professor of economics and associate dean for social sciences at the University of Colo-
rado, Boulder. He is also a fellow at the Kiel Institute for World Economics and an adjunct
professor at the University of Adelaide. He was a lead economist in the Development
Research Group at the World Bank, visiting professor at the University of Bocconi, and a
visiting scholar at the CES-Ifo Institute at the University of Munich and the China Center
for Economic Research at Peking University. He serves as a consultant to the World Bank and the World
Intellectual Property Organization and is currently chairing a panel of the National Academy of Sciences
on intellectual property management in standard-setting organizations. He is the author of Intellectual
Property Rights in the Global Economy (2000).
MASKUS
MASKUS

1750
1750 Massachusetts Avenue, NW
Massachusetts Avenue, NW
Washington,
Washington, DC 20036-1903
20036-1903
(202)
(202) 328-9000 (202) 659-3225
328-9000 Fax (202) 659-3225
www.piie.com
www.piie.com KEITH E. MASKUS
Cover
CoverIllustration:
Illustration:iStockphoto
iStockphoto
Cover
CoverDesign
Designby byPeggy
PeggyArchambault
Archambault

NewIPRJacket.indd 1 9/4/12 1:32 PM

 Private
Private
rights
rights
and
and
Public
Public
Problems
Problems
ThE Global EconomIcs
of InTEllEcTual ProPErTy
ThE
In ThEGlobal EconomIcs
21sT cEnTury
of InTEllEcTual ProPErTy
In ThE
KEITH 21sT cEnTury
E. MASKUS

KEITH E. MASKUS

Peterson Institute for International Economics

Washington, DC
Peterson Institute September KEITh
for International
2012
E. masKus
Economics

Washington, DC
September 2012
KEITh E. masKus
Title Page.indd 1 8/27/12 9:50 PM
Keith E. Maskus, research fellow at
the Peterson Institute for International
Economics, is professor of economics and
associate dean for social sciences at the
University of Colorado, Boulder. He is also
a fellow at the Kiel Institute for World
Economics and an adjunct professor at
the University of Adelaide. He was a lead
economist in the Development Research
Group at the World Bank, visiting professor
at the University of Bocconi, and a visiting
scholar at the CES-Ifo Institute at the
University of Munich and the China Center
for Economic Research at Peking University.
He serves as a consultant to the World
Bank and the World Intellectual Property
Organization and is currently chairing a
panel of the National Academy of Sciences
on intellectual property management in
standard-setting organizations. He is the
author of Intellectual Property Rights in the Global
Economy (2000).
PETER G. PETERSON INSTITUTE FOR
INTERNATIONAL ECONOMICS
1750 Massachusetts Avenue, NW
Washington, DC 20036-1903
(202) 328-9000 FAX: (202) 659-3225
www.piie.com
C. Fred Bergsten, Director
Edward A. Tureen, Director of Publications,
Marketing, and Web Development
Printing by United Book Press, Inc.
Cover design by Peggy Archambault
Cover photo: © iStockphoto
The views expressed in this publication are those of the author. This publication is part of
the overall program of the Institute, as endorsed by its Board of Directors, but does not
necessarily reflect the views of individual members of the Board or the Advisory Committee.
Copyright © 2012 by the Peter G. Peterson
Institute for International Economics. All
rights reserved. No part of this book may be
reproduced or utilized in any form or by any
means, electronic or mechanical, including
photocopying, recording, or by information
storage or retrieval system, without permis-
sion from the Institute.
For reprints/permission to photocopy please
contact the APS customer service depart-
ment at Copyright Clearance Center, Inc., 222
Rosewood Drive, Danvers, MA 01923; or email
requests to: info@copyright.com
Printed in the United States of America
14 13 12 5 4 3 2 1
Library of Congress Cataloging-in-
Publication Data
Maskus, Keith E. (Keith Eugene)
Private rights and public problems : the
global economics of intellectual property in
the 21st century / Keith Maskus.
p. cm.
Includes indexes.
ISBN 978-0-88132-507-2
1. Intellectual property—Economic aspects.
I. Title.
K1401.M373 2012
346.04’8—dc23
2012030469
Contents

Preface vii
Foreword xi
Acknowledgments xv
1 Introduction: The Big Stakes in Selling Knowledge 1
The Ever-Elusive Balance 4
The Policy Landscape 9
Four Ideas to Improve the Global System Today 16
Organization of the Book 22

2 The Big Global Upgrade: Is It Working? 25

How the Situation Has Changed 26
Intellectual Property Right Reforms and Innovation 35
Intellectual Property Rights and Technology Transfer 64
Country Experiences and “Catching Up” with Intellectual Property 82
Rights
Summary 91

3 Global Governance 93
TRIPS Finishes Its Test Ride 94
The World Intellectual Property Organization Does Its Part 117
When TRIPS Is Not Enough 120
A Powerful Pushback 133
The New Enforcement Emphasis 137
Summary 142

iii
4 Regulating a Stressed System 143
Cleanup in Aisle Global Patent 144
The Standards Question 158
Exhaustion: Your Price or Mine? 172
Geography Made Delicious 189
Digital Dilemmas 204
Enforcement Economics 222
Summary 231

5 Intellectual Property Rights and Global Policy 233

Challenges
Intellectual Property Rights, Policy Space, and Development 234
Patent Problems and Progress in Public Health 251
Technology Transfer and Climate Change 270
Agriculture and Genetic Resources 280
Trading in Traditions 294
Knowledge as an International Public Good 297
Summary 312

6 Revitalizing a Tired System 313

Pressures to Move On 314
Extending the Long and Strained TRIPS? 316
Reaching for Balance beyond the World Trade Organization 318
Future Vision 322
A Final Observation 326

References 329
Index 351
Tables
2.1 Changes in the Ginarte-Park patent rights index 27
2.2 Changes in the Global Competitiveness Report intellectual 32
property rights and protectionism indexes relative to the
United States
2.3 Economic characteristics of and growth in patent grants in Brazil, 36
Mexico, South Korea, and China
2.4 Summary of cross-country studies of IPR and innovation measures 50
2.5 Growth of R&D in 350 large Indian pharmaceutical firms, 57
1990–2005
2.6 Indicators of technology transfer to selected countries 68
2.7 Summary of econometric studies of intellectual property rights and 75
technology transfer
3.1 TRIPS-Plus provisions in the Jordan-US free trade agreement 123
(2001)

iv
3.2 Comparison of TRIPS-Plus elements in selected US free trade 124
agreements
4.1 Growth in patent applications, 1995 and 2008 147
4.2 Comparison of online per-pill retail prices 177
4.3 Changes in recorded music sales, 2005 and 2007 206
5.1 Price reductions in key antiretroviral medicines, 2001 and 2010 253

Figures
2.1 Changes in the Ginarte-Park patent rights index, by income 29
quartile, 1990–2005
2.2a World Bank innovation index (2000) and Ginarte-Park patent 40
rights index (1995)
2.2b World Bank innovation index (2009) and Ginarte-Park patent 41
rights index (2000)
2.2c Research and development as a percent of GDP (2000) and 42
Ginarte-Park patent rights index (1995)
2.2d Research and development as a percent of GDP (2005) and 43
Ginarte-Park patent rights index (2000)
2.2e US scaled patent grants (2000) and Ginarte-Park patent rights 44
index (1995)
2.2f US scaled patent grants (2005) and Ginarte-Park patent rights 45
index (2000)

Boxes
1.1 The new ownership society 5
2.1 China’s indigenous innovation policy 89
4.1 Reforming US patents 153
4.2 China’s standardization policy for information and 169
communication technology
4.3 Value extraction in Ethiopian coffee 197
4.4 When rights become wrongs: The user community stands up 214
5.1 India’s Patents Act of 2005 and pharmaceuticals 261
5.2 Sharing of intellectual property rights in the International AIDS 265
Vaccine Initiative

v
Preface

International economists devote great efforts to analyze how trade and invest-
ment liberalization affect global commerce, development, and growth. Far
less attention is paid to the national and international regulatory architecture
that governs the actual conditions under which such activities occur. A central
foundation of this architecture is the global system of intellectual property
rights (IPRs), made up of both national laws and international agreements.
Patents and trade secrets play critical roles in supporting international
trade and investment in high-technology goods. Copyrights govern legal
exchanges of digital products in the information and entertainment indus-
tries. Trademarks and geographical indications offer firms the ability to differ-
entiate their names and quality characteristics in international trade, appealing
to consumers of varying tastes and incomes. These and other IPRs permit firms
to segment markets and offer different prices across countries and consumer
groups in order to raise profits and the returns to innovation and creativity.
Indeed, IPRs are ubiquitous in trade, investment, licensing, production, and
marketing on a global scale and therefore demand analytical attention.
The Peterson Institute first took on this challenge 12 years ago when it
published a volume by Keith Maskus titled Intellectual Property Rights in the
Global Economy. That book, written in the wake of the founding of the World
Trade Organization (WTO) and the TRIPS Agreement, has often been cited
as a landmark in the area of IPRs, trade, and development. Much has changed
since its release in 2000, however. There are additional international treaties,
significant IPR reforms throughout the emerging-market and developing
economies, and dramatic and ongoing technological changes in key indus-
tries that are stressing the system. Further, many of the areas that are foremost
on the international policy agenda, such as access to medicines, agricultural

vii
sustainability, environmental protection, preservation of biodiversity, and the
dissemination of basic scientific knowledge, are closely related to IPRs.
The Institute believes that these issues are extremely important, yet not
fully understood, and that now is a good time to bring out a new and thor-
ough analysis. In this volume, Maskus offers a comprehensive economic
treatment of the full range of global issues touched by IPRs. He argues that
recent empirical evidence strongly suggests that recent and ongoing intellec-
tual property reforms—arguably more dynamic than trade liberalization—are
working behind the scenes to improve channels of international technology
transfer including trade, investment, and licensing. Thus, IPRs are asserting
their “trade-relatedness” in a positive way, facilitating global information
markets. The bulk of this improvement, however, occurs among the developed
and emerging-market and middle-income countries, with little effect in the
poorest nations.
Many readers may think that global IPR policy changes stopped with the
TRIPS Agreement but, as Maskus describes, the situation has evolved dynami-
cally since then. A strong tension has emerged between major industrialized
countries, which push for ever-stronger IPRs in preferential trade agreements
and other arenas, and key developing economies, which advocate more restric-
tions on the international scope of patents and copyrights. Whether and how
this tension might resolve itself is unclear, though the economic analysis in
this book suggests some guidelines.
As that history indicates, debates over IPRs go far beyond the basic ques-
tion of how they may affect international trade. Thus, Maskus takes on a series
of difficult questions, ranging from how well the current system works to the
deep connections between patents and global public health and between IPRs
and access to knowledge. For example, he extensively analyzes the competi-
tive effects of market segmentation, rights exhaustion, and parallel imports
on pharmaceutical prices within the European Union and uses that history
to argue for a cautious and phased approach to opening the US market to
reimportation. He also takes a critical look at the attempts of digital content
providers to use expanded copyright law, and the courts, to defend their
economic models against rapid and inevitable technological change. These
efforts are ultimately unsustainable without reforms in how digital goods
are licensed. Maskus sets out a broad roadmap for that purpose, arguing in
particular for streamlined global licensing rights and international competi-
tion among rights-collection societies. He also calls for more transparency and
information in patent databases, cautious progress in the global treatment of
geographical indications, and new means of encouraging meaningful invest-
ments in IPR enforcement.
The thorniest problems raised by IPRs are in their complex interrelation-
ships with the provision of critical global public goods. Whether discussing
access to medicines, diffusion of green technologies, protection of new agricul-
tural varieties, preservation of genetic resources and traditional knowledge, or
the privatization of basic knowledge, Maskus analyzes the economic tradeoffs

viii
in these contentious and controversial interfaces. In each case, an extensive set
of national and international policy recommendations is made based on these
economic factors. Readers may disagree with many of these ideas but they are
presented here with as much evidence and logic as possible.
Ultimately, Maskus believes that the global IPR system stands at a funda-
mentally important crossroads and policymakers need to consider how to
modify it in order to meet the needs of 21st century innovators, creators, and
consumers. These needs are evolving rapidly in ways that often are no longer
consistent with traditional IPR protection. The system needs to become more
open, transparent, and responsive, while still protecting the returns to invest-
ments in innovation and creativity. It is a delicate balance to strive for.
Because it is a comprehensive treatment of a complex set of regulatory
issues and their far-reaching effects, this volume is unusually lengthy for a
publication of the Peterson Institute. However, we are pleased to present it
to policymakers, international organizations, private enterprises, NGOs, and
academic scholars as an indication of our commitment to wide-ranging anal-
ysis of fundamentally important, yet often overlooked, areas of global regula-
tion. We hope the book, like its predecessor from 2000, raises understanding
and awareness while provoking deeper thought and debate.
The Peter G. Peterson Institute for International Economics is a private,
nonprofit institution for the study and discussion of international economic
policy. Its purpose is to analyze important issues in that area and to develop
and communicate practical new approaches for dealing with them. The
Institute is completely nonpartisan.
The Institute is funded by a highly diversified group of philanthropic foun-
dations, private corporations, and interested individuals. About 35 percent of
the Institute’s resources in our latest fiscal year was provided by contributors
outside the United States. Generous initial support for this study was provided
by the Pfizer Foundation.
The Institute’s Board of Directors bears overall responsibilities for the
Institute and gives general guidance and approval to its research program,
including the identification of topics that are likely to become important
over the medium run (one to three years) and that should be addressed by
the Institute. The director, working closely with the staff and outside Advisory
Committee, is responsible for the development of particular projects and
makes the final decision to publish an individual study.
The Institute hopes that its studies and other activities will contribute to
building a stronger foundation for international economic policy around the
world. We invite readers of these publications to let us know how they think we
can best accomplish this objective.
C. Fred Bergsten
Director
July 2012

ix
PETER G. PETERSON INSTITUTE FOR INTERNATIONAL ECONOMICS
1750 Massachusetts Avenue, NW, Washington, DC 20036-1903
(202) 328-9000 Fax: (202) 659-3225

C. Fred Bergsten, Director

BOARD OF DIRECTORS ADVISORY COMMITTEE
* Peter G. Peterson, Chairman Barry Eichengreen, Chairman
* George David, Vice Chairman Richard Baldwin, Vice Chairman
* James W. Owens, Chairman, Kristin Forbes, Vice Chairwoman
Executive Committee
Isher Judge Ahluwalia
Leszek Balcerowicz Steve Beckman
Ronnie C. Chan Olivier Blanchard
Chen Yuan Barry P. Bosworth
* Andreas C. Dracopoulos Menzie Chinn
* Jessica Einhorn Susan M. Collins
Stanley Fischer Wendy Dobson
Arminio Fraga Jeffrey A. Frankel
Jacob A. Frenkel Daniel Gros
Maurice R. Greenberg Sergei Guriev
Herbjorn Hansson Stephan Haggard
Tony Hayward Gordon H. Hanson
* Carla A. Hills Bernard Hoekman
Yoshimi Inaba Takatoshi Ito
Karen Katen John Jackson
W. M. Keck II Peter B. Kenen
Michael Klein Anne O. Krueger
* Caio Koch-Weser Paul R. Krugman
Andrew N. Liveris Justin Yifu Lin
Sergio Marchionne Jessica T. Mathews
Donald F. McHenry Rachel McCulloch
Indra K. Nooyi Thierry de Montbrial
Paul O’Neill Sylvia Ostry
David J. O’Reilly Jean Pisani-Ferry
Hutham Olayan Eswar S. Prasad
Peter R. Orszag Raghuram Rajan
Samuel J. Palmisano Changyong Rhee
Michael A. Peterson Kenneth S. Rogoff
Victor Pinchuk Andrew K. Rose
Lynn Forester de Rothschild Fabrizio Saccomanni
* Richard E. Salomon Jeffrey D. Sachs
Sheikh Hamad Saud Al-Sayari Nicholas H. Stern
Edward W. Scott, Jr. Joseph E. Stiglitz
*Lawrence H. Summers William White
Jean-Claude Trichet Alan Wm. Wolff
Laura D’Andrea Tyson Daniel Yergin
Paul A. Volcker
Peter Voser Richard N. Cooper,
Jacob Wallenberg Chairman Emeritus
Marina v.N. Whitman
Ronald A. Williams
Ernesto Zedillo

Ex officio
* C. Fred Bergsten
Nancy Birdsall
Richard N. Cooper
Barry Eichengreen

Honorary Directors
Alan Greenspan
Lee Kuan Yew * Member of the Executive Committee
Frank E. Loy
David Rockefeller
George P. Shultz
Foreword

In 2000 the (then) Institute for International Economics kindly published this
volume’s predecessor, titled Intellectual Property Rights in the Global Economy. In
that book I tried to place before interested readers the basic proposition that
intellectual property rights (IPRs) were a critical element of innovation and
trade policy that deserved far greater attention from international and devel-
opment economists. The book also had a substantial policy focus, coming in
the wake of the recent conclusion of the Agreement on Trade-Related Aspects
of Intellectual Property Rights (TRIPS) at the World Trade Organization. It
offered largely speculative analysis of how the new regime of required IPR
standards might affect economic development prospects and how reforming
nations might best manage their transformations. The book ended on a largely
optimistic note, suggesting that a globalized regime could, if appropriately
complemented by other policies, materially improve the functioning of inter-
national trade in technology and information.
Over ten years have passed and now seems a propitious time to bring
out a completely new volume that both analyzes the period since TRIPS and
offers further policy insights. Things have changed considerably in the last
decade or so, in a number of important dimensions. First, ten years ago the
economics literature remained thin and there were fewer aspects of IPRs and
trade about which we had solid evidence than there were gaping holes in our
understanding. Fortunately, since that time economic analysis has deepened
and broadened considerably, offering new evidence and fresh insights into the
major roles and significant impacts of IPRs in the global economy. Trade econ-
omists certainly now understand that we need to go beyond simulating the
effects of basic tariff cuts and focus more attention on fundamental regulatory
changes, which may well be more powerful than trade liberalization. Analysts
of intellectual property rights have been at the forefront of this trend.
xi
 Several examples could be mentioned but two will make the point. One is
that several trade economists have developed novel models explaining the effects
of parallel imports (merchandise traded legally but without the authorization
of the owner of the relevant IPRs) on prices, welfare, and innovation. These
insights have direct implications for understanding the likely outcomes of
liberalizing such restrictions on reimportation. Another is that economists
have carefully studied the reactions of individual multinational firms to
changes in patent rights around the world. Results of such investigations are
considerably more informative than those of cross-country regressions, which
were the standard of evidence available ten years ago.
A second massive change is that IPRs have become the major coin of the
realm in trading goods and technologies across borders, whether through
goods, investment, licensing, or, especially, over the internet. At least among
the developed economies—though increasingly also in such major emerging-
market economies as Brazil, India, South Korea, and China—inventive firms
and creative interests rely increasingly on their ability to control production
and distribution in order to earn profits. In chapter 1 I refer to this “new
ownership economy” and sketch out some major implications. Among these
are the elucidation of new and expanded forms of intellectual property, a
massive expansion of global patenting, and the emergence of complex interre-
lationships among intricate technologies, all of which require policy attention.
Further, digital content providers desire to sell their products globally but run
inevitably into problems of unauthorized downloading and use, which in itself
may sometimes be a form of creativity worth nurturing. Perhaps most devilish,
the amount of copyright piracy and trademark counterfeiting in global trade
has grown apace, raising a number of strategic policy issues.
A third, and fundamental, change has been the growing realization that
IPRs have numerous and complex relationships with other forms of public
policy, such as providing essential medicines to poor patients, deploying new
and locally effective green technologies to improve soil conditions or reduce
greenhouse gas emissions, and sustaining widespread access to scientific
knowledge. Opinions about these interfaces are contentious and strongly
held, with elements of civil society often arguing that IPRs should be severely
restricted in scope in order to expand access and reduce prices and practitioners
countering that IPRs are essential components of that very access. There are no
easy answers to such questions, though economic analysis can offer important
insights.
In this context, I really have four objectives in writing the present volume.
The first is to take stock of what evidence may be gathered from new economic
analysis of the roles IPRs play in innovation, investment, trade, licensing, and
strategic behavior. This is the task of chapter 2, which documents the remark-
able expansion of global IPRs in the period since TRIPS. An extensive review
of the economics literature leads to the conclusion that these changes are
having notable impacts on international technology transfer, at least toward
larger emerging-market economies. There is also evidence of structural change

xii
in emerging-market countries, associated with patent reforms, supporting
growth in exports of sophisticated manufacturing goods. A number of qualifi-
cations to these positive results are drawn in that chapter, however, in the hope
that further research will be inspired and undertaken. Economists interested
in the trade, technological, and development aspects of IPRs should find this
chapter worth reading.
A second goal is to assess where the global IPR system has moved since
the implementation of TRIPS in 1995. There are numerous elements of these
additional policy reforms, including the so-called TRIPS-Plus agenda in
free trade agreements, new treaties struck at the World Intellectual Property
Organization (WIPO), and a new emphasis on stronger enforcement measures
among major trading partners. Equally, those concerned about the possibility
that a reformed global IPR regime will damage prospects for economic devel-
opment and limit the scope of public policy have mounted an effective push-
back, expressed most forcefully in the new Development Agenda at the WIPO.
These complex issues are the subject of chapter 3. Readers interested in the
law and economics of international negotiations and how these policies affect
international relations should find that review worthwhile.
A third objective is to offer a thorough assessment of how economists
analyze critical issues in the global IPR system arising largely through private
use of the regime. This is the subject of chapter 4, which focuses on several
key issues. For example, global patent offices are awash in patent applications
and need to improve means of collaborating in reducing their burdens. More
importantly, there is a strong public interest in seeing these offices establish
a global and accessible database of all patent applications to greatly increase
the transparency and utility of the system. Another critical issue is how to
encourage standard-setting organizations in industries with interlocking
and overlapping technical standards to collaborate and increase access to
their patented specifications. China’s ambitious policy is both instructive and
disconcerting in this context.
Yet another example is the question of exhaustion of IPRs, which deter-
mines the legal scope of parallel imports. Economists have uncovered a
number of complexities here, making it a far more interesting subject than
simple arbitrage might suggest. Chapter 4 also reviews the economics and law
of protecting geographical indications, which are a particular form of intel-
lectual property for high-quality goods from specific regions. In this case the
economics are not particularly definitive, except where the attempts to protect
involve asserting property rights against names already in the public domain.
This discussion may therefore be of greater interest to legal scholars and poli-
cymakers. A subsequent section should be of considerable general interest,
however, since it focuses on the thorny problems of selling digital goods to
multiple countries in the face of considerable threats from downloading.
After reviewing strategic—and often self-defeating—attempts to manage these
problems on the part of content providers, I offer some thoughts on how the
world’s copyright infrastructure might be transformed to achieve a solution
that is better all around.
xiii
 A fourth objective is to confront, in chapter 5, the complex interfaces
between the provision of public goods and the exclusive private rights estab-
lished by IPRs. These are difficult questions and I generally limit the discus-
sion to areas in which economic analysis is helpful. For example, although the
policy issues are addressed, I say relatively little in the book about developing
new forms of IPRs to protect traditional knowledge and cultural expressions,
since it is hard to say much about the incentive effects of elucidating private
rights in collective and long-standing knowledge.
Thus, after a review of the economics of compulsory licenses, variable
patent standards, and other forms of “TRIPS flexibilities” I turn to four crit-
ical areas of public policy and their relationships with IPRs: public health and
medicines, environmentally sound technologies, agriculture and preservation
of the genetic commons, and global access to scientific knowledge. There are
three primary points. First, by themselves IPRs can raise access barriers in each
of these areas, though the evidence is mixed. Second, however, appropriately
structured rights can be essential for supporting contracts to achieve mean-
ingful and appropriate technology transfer.
Third, IPRs rarely can be counted on to achieve the optimal provision and
distribution of public goods. Rather, they need to be a component of overall
public and public-private strategies to expand resources for financing R&D,
transferring technologies, and adapting them to local use. I offer some policy
recommendations in these areas, ranging from practical ideas rooted in micro-
economics to more abstract, though economically defensible, concepts such
as a treaty for improving access to basic scientific knowledge. I hope that poli-
cymakers, NGOs, and economists alike will find these ideas challenging and
worth thinking about deeply.
The world has reached a significant crossroads regarding the definition
and use of intellectual property rights in the 21st century. Too often, IPRs are
considered an end in themselves, whether as an imperfect measure of inno-
vation performance or, more fundamentally, a strategic means of protecting
the competitive positions of existing firms from new competition. It is time
to recast intellectual property rights in their proper role as a means to several
ends, including promoting innovation and creativity, diffusing new goods
and ideas around the world, enhancing cultural opportunities, encouraging
economic development, and even reducing poverty. All of these are possible
with a forward-looking and expansive rebalancing of the global policy regime,
the subject of the concluding chapter.
Keith E. Maskus
July 2012

xiv
Acknowledgments

It is impossible to write a volume like this without the guidance and assis-
tance of colleagues and friends. In addition to the many people I was able to
thank in the first book, I would like to mention certain people and institutions
that have supported my work on intellectual property rights (IPRs) and often
collaborated with me. I am grateful to the World Bank, UNCTAD, WIPO,
WTO, WHO, and OECD for engaging me in a variety of IPR-related projects
over the last ten years, the results of which are reflected in these chapters. I
especially thank Ricardo Melendez-Ortiz, Pedro Roffe, and Ahmed Latif of the
International Centre for Trade and Sustainable Development for their encour-
agement in involving me in their important projects on intellectual property
and economic development.
Many colleagues around the world have been supportive over the years,
including Kym Anderson, Tom Bollyky, Maggie Chen, Yongmin Chen, Michael
Ferrantino, Carsten Fink, Mattias Ganslandt, Amy Glass, Kim Elliott, Yin He,
Bernard Hoekman, Denise Konan, Edwin Lai, Josh Lerner, Changying Li,
James Markusen, Will Martin, Christine McDaniel, Frantzeska Papadopoulou,
Walter Park, Jonathan Putnam, Yi Qian, Mohan Rao, Kamal Saggi, Tim
Swanson, Guifang Yang, Lei Yang, and Lisa Zhang. I am also indebted to
an outstanding group of current and former graduate students who have
worked with me on various aspects of IPRs, innovation, and trade, including
Juan Blyde, Luis Castro, Po-Lu Chen, Ben Li, Michael Nicholson, Jirawat
Panpiemras, Kremena Platikanova, Katherine Sauer, Yuchen Shao, Eric Stuen,
Eina Wong, Xiaofei Yang, Mei Yuan, and Yuan Zhuang. I need to thank also the
Institute for Behavior Sciences at the University of Colorado, for providing a
quiet and convenient place to draft the book, and Todd Gleeson for his consid-
erable patience.

xv
 I am grateful also to the many talented legal scholars whose writings help
frame my own thinking about the complexities of global IPRs. I have learned a
great deal from reading their work. Among these lawyers I mention particularly
Frederick Abbott, John Barton, Carlos Correa, Thomas Cottier, Daniel Gervais,
Mark Lemley, Lawrence Lessig, Jon Putnam, Arti Rai, Pamela Samuelson, and
Peter Yu. I am especially grateful to Ruth Okediji, Jerome Reichman, Jayashree
Watal, and Dick Wilder, who are both towering authorities on global intellec-
tual property and close friends and colleagues.
I thank many colleagues at the Peterson Institute for International
Economics, for both their insights and their patience in waiting for this long-
delayed manuscript. I particularly thank Fred Bergsten, Gary Hufbauer, and
Jeff Schott for their support, along with a former colleague, David Richardson,
who originally urged me to write the first of these books. The Institute’s will-
ingness to publish this long and comprehensive new volume about issues that
go far beyond questions of international trade and investment is remarkable
testament to their broad-minded view of the global economy. I am deeply
grateful for it.
Finally, I am again indebted to Susan Rehak for her great enthusiasm and
understanding during this project. Without her support it could not have been
completed.
Keith E. Maskus
July 2012

xvi
 1
Introduction: The Big Stakes
in Selling Knowledge

The world is an astonishingly creative place. African musicians, Peruvian textile

designers, Indian movie studios, Australian wineries, and British authors all
have creations to delight us and stories to divert us. Chinese biotechnology
enterprises, Japanese hybrid automobile developers, US university scientists,
and global pharmaceutical concerns offer applied and basic knowledge that
pushes the information frontier forward. Society gains immeasurably from
these and thousands of additional intellectual pursuits, which need to be
nurtured and shared. Or perhaps they should be owned and sold.
Politicians and pundits everywhere agree: We live in a global knowledge
economy and the key to “winning the future” is to excel at turning what we
discover and learn into marketable new products and technologies. Innovation,
adaptation, and the use of these new technologies are the primary drivers of
growth within economies and across international borders.1 Higher-quality
technical inputs reduce production costs and spur further innovation. New
medicines treat our maladies, and novel technologies offer us alternatives to
fossil fuels as energy sources. Software permits interpersonal connections on a
scale never before seen. Consumers benefit greatly from new varieties of goods
and digital entertainment products. In the 21st century, knowledge truly is the
basis on which human life will improve.
How does a society encourage this creation and use of knowledge and then
generate income and jobs from it? To be sure, education, creativity, market

1. Economists have taken to referring to dynamic competition among technologically advanced

firms as an “innovation arms race,” with its connotations of success and defeat, and survival and
destruction (Baumol 2002).

1
dynamics, and the competitive spirit all matter greatly in this process. So does
the enormous set of policies—ranging from subsidies to basic science, tax
inducements for investments in research and development (R&D), limits on
market entry and labor mobility, and regulation of skilled immigration and
international trade—that affects incentives to innovate and market new goods
and services. Countries and cities are routinely graded on their creative capaci-
ties and investment climates, including their support for innovation.
Located centrally in this mix are intellectual property rights (IPRs), the
complex stew of patents, copyrights, trademarks, trade secrets, and related
tools that, in essence, determine the legal conditions of competition among
creators and innovators and the terms of access for users of knowledge. How
nations define IPRs is fundamentally important in a global society where
knowledge is the basic input underlying the goods we eat and drink, the medi-
cines we ingest, the digital products we watch and read, the cars we drive, and
the financial services we use to invest.
Various forms of IPRs have been around for centuries, whether as informal
norms among competitors (such as Parisian chefs), royal patent grants in
Britain, or intensely legal rules establishing the boundaries of a creator’s exclu-
sive and proprietary rights in pharmaceutical products or software. Perhaps
what is new is the sheer and visible ubiquity of IPRs in modern life. Today,
people almost everywhere lead lives surrounded by the powerful traces of these
rights. Consumers buy goods and services sold under names and logos that
build brand value. They have expectations about the quality of Volkswagen
sedans, Armani suits, Apple iPhones, and McDonald’s hamburgers—expecta-
tions that are instantly associated with trademarks.
Patients and public health providers pay for Viagra, Lipitor, and Retrovir
at prices that at least partially reflect the value of the underlying patents on
those products. Patents also affect competition in electronics, airframes, auto-
mobile parts, bioengineered seeds, new plant varieties, and virtually every
other productive sector, including financial services. Film buffs purchase or
rent copyrighted digital video disks at prices that vary widely across market
segments and international locations. Software users routinely download
computer programs for which they may pay a license fee, but also blindly click
on an “I agree” button that makes it illegal to make copies for other uses.
Fortunes rest on the prospect of inventing, selling, and competing with
new ideas and creative products. Because IPRs offer their owners the legal
ability to exclude others from using their ideas or copying their expressive
elements, they can establish breathtaking market power. Only in a world in
which people need to create and share documents could Bill Gates amass
his wealth by selling platform software to countless users. And only where
massive numbers of people and firms wish to interact virtually online could
Mark Zuckerberg and other developers of social networking programs become
billionaires while barely out of college.
Microsoft and Facebook are extreme cases because they rely on over-
whelming network economies associated with some forms of software to

2 PRIVATE RIGHTS AND PUBLIC PROBLEMS

establish their effective, if temporary, monopolies. However, that same market
power would be far weaker in the absence of software patents, copyrights,
and legally protected digital rights systems that preclude rivals from legally
copying both the intellectual content and its marketed expressions. The road
to vast riches today increasingly is paved with private control over intellectual
content with global reach.
This general reliance on IPRs to support profits and market positions goes
far beyond software, of course. All originator firms strive to earn profits by
setting prices that more than recapture the costs of investing in product devel-
opment and producing and selling their goods. Among the many means of
doing so, exclusive rights loom large in advanced and emerging-market econo-
mies. Whether it is Disney, Siemens, Elsevier, Burberry, Monsanto, AstraZeneca,
Sony, Samsung, or Haier, global firms seek such rights behind which to carve
out protected market positions and build brand values. University technology
spinoffs, biotechnology startups, and application program developers register
patents and enforce copyrights to attract financing and grow markets. The
commercial world at times seems to run on patents, trademarks, copyrights,
and licensing agreements.
Equally, we live in a world where violations of IPRs are endemic and
growing. Counterfeit Rolex watches, Shiseido cosmetics, Armani apparel,
and Pfizer drugs are commonly found in developing countries, though they
also exist readily in developed-world cities and can be purchased online. The
Organization for Economic Cooperation and Development (OECD) estimated
that in 2007 the remarkable growth of fake products entering international
trade channels had reached $250 billion.2 Patented technologies and confi-
dential trade secrets owned by foreign firms leak rapidly into domestic use in
China, despite private and public efforts to discourage it.
In the United States, Europe, and elsewhere, illegal downloading and
file sharing of digital music continues to defy the enormous efforts of the
recording industry to stop it, while film and television producers and media
companies increasingly face the same problem. In the internet age, the scale of
this problem is truly massive and global. In China, Russia, Vietnam, and else-
where, it is possible to purchase pirated DVDs of movies even before they are
released by studios for little more than the cost of the blank disk. Many coun-
tries are home to internet services such as China’s dy558.com, where first-run
movies can be streamed instantly.
Given the global ubiquity of IPRs, the explosion of infringement is hardly
surprising. To the extent that trademarks permit enterprises to sustain large
markups in fashion goods, they will always attract knockoffs. If patent owners
choose not to license their technologies, local rivals will seek to copy or reverse
engineer them in order to compete. Where copyrights support prices in soft-

2. There is great uncertainty about such estimates. Chapter 4 will consider the economics of coun-
terfeiting and piracy in trade.

INTRODUCTION 3
ware, books, and digital products that greatly exceed the marginal cost of
reproducing them, unauthorized copying will thrive. Indeed, in a world where
“if you build it they will copy” is virtually a behavioral norm, there is a constant
struggle between firms appropriating economic value from innovation and
infringers making money by copying goods and selling them at lower prices
to a willing, if sometimes confused, crowd of consumers. The problem is espe-
cially acute for producers of medicines, new seed varieties, software, movies,
and music—the classic “intellectual property goods” that feature immense
upfront investment costs and low marginal distribution expenses, yet are
copied at very low cost.
Thus, the battle rages between those who innovate, create, or own exclusive
rights and those who would free ride on the gap between the economic value
of products distributed under those rights and the low costs of infringing
them. This contest is especially intense and controversial at the international
level. As a rough but reasonably accurate guide, firms headquartered in richer,
postindustrial economies develop over 95 percent of global patents, produce
the great majority of popular movies and music, write the most commonly
installed platform computer programs, and have the greatest global brand
values. These same firms face the largest rates of patent infringement, counter-
feiting, and piracy in the developing world.
However, the conflicts do not arise only between developed countries
and developing countries, that is “North versus South.” Within and across
developed countries, IPRs pit music companies against file-sharing college
students, and research-based pharmaceutical firms against generic providers
and patients buying drugs online. The situation even raises the specter that
long-standing informal scientific norms under which university researchers
have freely shared results and materials could be threatened as illegal patent
and copyright infringement.

The Ever-Elusive Balance

As these comments suggest, controversies over IPRs are about much more
than punishing trademark counterfeiters and copyright pirates, as important
and difficult as that task is. Rather, the whole concept of what really consti-
tutes intellectual creativity and how it can be owned is controversial. In much
of the developed world the definition of intellectual property has expanded
inexorably to create what might truly be called the “new ownership society,” as
described in box 1.1. If everyone should be able to own a home, why shouldn’t
everyone also own the exclusive rights to whatever inventions, music, books,
and commercial names they can come up with? People build and buy homes so
they can benefit from them, whether by just living there or renting them out.
Creators equally want to enjoy the fruits of their labor by offering their goods
or technologies for sale or license under terms they decide.

4 PRIVATE RIGHTS AND PUBLIC PROBLEMS

Box 1.1 The new ownership society

The curriculum vitae of a prominent economic theorist lists 11 US patents that

he has received for working out the mathematics of various auction mecha-
nisms. A patent was once granted for a two-piece woman’s jumpsuit with a belt
that could be removed, permitting the pieces to separate so the wearer can uri-
nate. A Japanese company owns US patent rights to any experimental rabbits
(or other nonhuman mammals) that have been treated in a way to engender
certain corneal diseases and that may be used in medical experimentation. The
European Patent Office seems willing to approve a patent on a variety of broc-
coli developed by conventional breeding techniques.
In the late 1980s, Los Angeles Lakers coach Pat Riley registered trademarks
on the phrase “three-peat” in anticipation of his team winning a third consecu-
tive championship (it did not). He still owns three trademarks and the phrase
appears on T-shirts. In February 2010, the National Football League admitted
that it did not, in fact, own exclusive trademark rights of the colloquial phrase
“Who Dat?”, a long-standing rallying cry used by fans of the New Orleans
Saints. The Soloflex Company owns US trademark number 380748, which gives
it exclusive rights to market exercise equipment and related goods under the
phrase “exercise and eat right.”
If a shop in the European Union wishes to sell something called Parma Ham it
must be sure the meat was packed and sliced in Parma itself. Yorkshire pudding
is a commonly made dish throughout the United Kingdom, but manufacturers
located specifically in Yorkshire have petitioned the European Commission to
restrict usage of the name. Only T-Mobile can use the distinctive shade of pink
its advertisements and packaging feature in marketing telecommunications
products.
Researchers around the world hoping to publish their findings routinely sign
away their copyrights to publishers, who then compile articles, with the free
assistance of reviewers and editors, into journals that are sold to the libraries of
the very universities employing these highly skilled workers. When the Disney
Company’s foundational copyrights on Mickey Mouse and related characters
were about to expire, the US government passed the Sonny Bono Copyright
Term Extension Act in 1998, which will keep those images out of the public
domain until 2019. The European Union went one better by restoring copyright
protection to works that had already seen their protection expire.
These patents and trademarks are not unusual, nor was it necessarily wrong
to grant them, though each has its critics. The copyright extensions mentioned
in the previous paragraph may have been questionable in terms of econom-
ics—extending the length of protection on existing works could not induce
anybody to create them again—but they are hardly out of touch with US and
European opinions toward intellectual property rights. These stories really
point out that almost anything people create or improve can be owned as intel-
lectual property, and governments are anxious to protect the right to do so.

GRAPHICS 5
INTRODUCTION 1
 The analogy to home ownership cannot be taken very far, of course.3
Homes are rival goods and only a finite number of people can live in them.
Information is nonrival because a song or book or technological process could
be enjoyed or used by many people without diminishing its quality or quan-
tity. Thomas Jefferson, for example, compared an idea to the flame of a candle,
which could be used to light other candles without diminishing the original
light.4 Real property is also excludable in that unauthorized users may be kept
out with fences (though legal rules are often necessary). Ideas and informa-
tion goods are inherently nonexcludable without laws and regulations defining
rights under which others may be prevented from accessing them.
In a static sense, exclusion is likely to be inefficient and diminish social
welfare, since the marginal costs of supplying information goods—whether
pills, compact disks, or computer programs—are very low, and access to as
many users as possible is beneficial. In a dynamic sense, the very ability to
control access, and therefore earn returns on creative efforts, may be critical
to ensure the progress of culture and technology. Without at least temporary
excludability, inventors and creators would find it difficult or impossible to
appropriate sufficient economic returns on their investment efforts, reducing
the incentives to invest. This tradeoff between static benefits from reasonably
open access and dynamic gains from appropriation through exclusive rights
cannot be easily solved, and the task of policymakers is to work out an effec-
tive balance.
If defining legal rights is tough, it is equally challenging to determine
which activities should be considered illegal infringement where access to
information goods is involved. At one level the debate is about defining “free
riders” versus “fair followers” (Reichman 1993). At what point does imita-
tion by competing firms shift from acceptable reverse engineering to patent
infringement? To what extent should generic drug producers and seed compa-
nies be permitted to experiment on protected medicines and plant varieties in
order to accelerate entry into the market? Do unauthorized downloading and
file sharing constitute theft, as the music companies insist? Or are they means
of breaking the hold of entertainment oligopolies on information that should
be freely enjoyed by all?
Arguably, the issues get deeper when discussing the role and scope of
IPRs in the provision of fundamental public goods. Scientific knowledge, for
example, is a public good in two senses. First, it is inherently impossible to
exclude others and the nonappropriability of knowledge requires public inter-
vention, typically in the form of government research funding. In principle,
it is possible to offset this problem with exclusive IPRs afforded to scientists.
However, the second public characteristic of knowledge is that it supports

3. Putnam (2008) offers an extensive and fascinating comparison between natural property and
intellectual property.
4. David (1993) discusses Jefferson’s notions of knowledge and exclusion.

6 PRIVATE RIGHTS AND PUBLIC PROBLEMS

massive broader benefits as a positive externality, including experimentation by
other scientists generating more knowledge and practical commercial applica-
tions meeting consumer and industrial needs. Even these novel applications
may be considered by some observers as public goods to the extent that they
help meet such social needs as public health and clean air.
Thus, should universities be encouraged to patent the results of govern-
ment-funded basic research, potentially limiting access to those who buy
licenses? Or should they be required to place these results and materials into
the public domain? Should public libraries have wide latitude to copy and
distribute educational materials? Should new crop varieties developed from
genetic resources be privately owned or deposited into a common global agri-
cultural heritage?
There are no ready answers to questions like these. Across the mature
economies there are large differences of opinion about the appropriate balance
to strike between the market rights of innovators and the access privileges of
users, and about the proper role of IPRs in encouraging creativity and inven-
tion. In this context, the “North” is hardly monolithic. There are also major
differences between recently industrialized nations, emerging-market econo-
mies, and poor countries. Regarding IPRs and their perceived impacts, it makes
no sense anymore to refer to a singular “South.”
In this complex environment, one would expect research-intensive firms
and creative artists in the mature countries to lobby their governments to
negotiate relief in the form of stronger global IPRs. Those governments have
responded, beginning with enhanced protection via the Agreement on Trade-
Related Aspects of Intellectual Property Rights (TRIPS) of the World Trade
Organization (WTO) in 1994, and extending through current bilateral and
regional trade agreements.5 The result has been a dramatic expansion of the
ability of firms to register and protect their exclusive rights to produce and
sell their new goods and technologies around the world, even if those rights
remain poorly enforced.
By itself, this fundamental policy change is globally contentious because
it bespeaks a significant increase in the market power of private firms, located
mostly in the wealthier economies, to sell their technologies and products
around the world under terms they prefer. It also diminishes the ability of
follower enterprises anywhere, but especially in emerging-market and devel-
oping economies, to copy and reverse engineer those elements. Advocates of
these reforms believe they will bolster global technology markets and stim-
ulate a flowering of innovation and technology diffusion that will generate
productivity gains and economic growth throughout the world. Opponents
envision the further entrenchment of “information oligopolies” that will
sharpen the differences between advanced and lagging economies and facili-
tate rent seeking. Which of these outcomes is more likely is a difficult question

5. This history and its implications are the subject of chapter 3.

INTRODUCTION 7
to answer.6 As always in the IPR arena, the tradeoffs between producers and
users and innovators and followers are complex and context specific.
However, the new global system of rights is far more controversial than
even these matters would suggest. The reason is that the framers of TRIPS and
other more recent agreements placed primary priority on improving the value
exploitation rights of private firms, and paid considerably less attention to the
implications for basic issues of global public policy. There are domestic and
global public goods that must be provided, and strict IPRs affect the ability
of governments and institutions to do so. To be sure, some of these effects are
positive, such as the enhanced ability of public-private partnerships to work
out use rights and licensing terms when a new vaccine or AIDS drug is devel-
oped. Similarly, new bioengineered seed varieties offer the best possibilities for
poor countries to expand agricultural productivity, a critical need in a world
with growing demand for food. However, some effects are negative, such as
the higher costs that educational institutions and libraries must pay for copy-
righted scientific materials.
Put differently, expanded private rights designed to capture the private
values inherent in new ideas and knowledge may not account sufficiently
for the public valuations that countries and the global community place on
access to those same factors. This sweeping statement needs careful quali-
fication, because TRIPS requires minimum—not maximum—standards of
protection and does permit countries to limit the scope of IPRs in various
ways (see chapters 3 and 5). Still, as we enter the second decade of the new
century, fundamental international controversies abound in the IPR context.
Should we limit the reach of copyrights to ensure that researchers, students,
and libraries in developing countries have greater access to new knowledge? Is
it true that patents on new drugs increase the burden on patients and public
health budgets in poor countries, and what could be done about it? Are IPRs a
barrier to effective transfer of new technologies that could reduce greenhouse
gas emissions in the developing world?
Such issues have a major impact on international relations. They have
surely sharpened the rhetorical divide between the innovators and owners of
rights in developed countries and the followers and users in emerging-market
and poor countries, to a degree not seen since the days of what was called the
new international economic order in the late 1970s. They have energized civil
society groups and nongovernmental organizations (NGOs), many of which
are extremely critical of the new global regime and call for major reforms.
Indeed, many outspoken NGOs, such as the Access to Medicines Campaign
of Médecins Sans Frontières, Knowledge Ecology International, and the Elec­

6. An attempt is made in chapter 2. To preview it here, the poorest countries are not likely to
be helped much, and could be disadvantaged, without investing in complementary development
policies and receiving assistance from abroad. However, the system should help larger developing
countries and rapidly emerging economies move up the global technology ladder.

8 PRIVATE RIGHTS AND PUBLIC PROBLEMS

tronic Frontier Foundation, were founded to oppose the extension of private
rights into control over ostensibly public goods.
These debates, often waged as fiercely within countries as across borders,
remind us that the private rights to exclude others from using novel inven-
tions, new cultural creations, and improved processes quickly bump up against
the ambiguous bounds set by the dictates of public policy. Those bounds are
necessarily ambiguous because different countries assign different weights to
the primacy of private property and the demands of providing public goods.
The challenge of global governance is to balance these distinctive interests in
a way that satisfies the fulfillment of public goods needs without significantly
diminishing the incentives that firms have to invent, create, innovate, and sell
new goods and technologies. It is a difficult task even within a country and
becomes enormously complex when taking into account the sharply different
opinions across countries.

The Policy Landscape

The complexity of the intellectual property arena makes it impossible in a
single volume to comprehensively describe, much less analyze, the full range
of critical international issues. To make the task manageable and the reading
accessible, this book is organized into broad policy themes that are discussed
primarily as problems in international economics. This framework offers valu-
able insights about policy tradeoffs and economic effects. These questions are
of course also treated by scholars in law, international relations, science and
technology, and ethics, plus civil society and popular media. But in a world
awash in discussions of a constantly evolving commercial and policy arena,
the hope is that this relatively narrow analytical snapshot will be enlightening.
This section briefly previews the policy questions to come.

How Well Is the System Working in Economic Terms?

As noted above, the basic global policy structure for IPRs is the TRIPS Agreement,
which binds WTO member governments to meet and attempt to enforce certain
minimum standards of protection. This agreement, along with rules negotiated
in preferential trade agreements and unilateral reforms in many countries, has
facilitated a remarkable expansion of legal rights around the globe. The primary
economic question is whether these expanded rights are supporting additional
and more efficient economic activity. This is a difficult question to answer satis-
factorily because of the complex factors involved. However, available evidence
suggests that the system facilitates more foreign trade and international tech-
nology transfer, expanding local learning and indirectly supporting innovation.
There is evidence that newer standards support manufacturing export growth
in both developed and emerging-market countries. In short, behind the scenes
the reformed global regime is working to improve channels of developing and
trading technical information—one of its key purposes.

INTRODUCTION 9
 At the same time, stronger legal rights, if poorly enforced, do not slow
the loss of technological information through patent infringement and other
problems, an issue of particular importance to Western firms operating in
China. Chinese policy seems especially attuned to extracting maximum bene-
fits from foreign technologies under a regime of weak enforcement. There is
also tentative evidence that stronger global patent rights sometimes support
markedly higher prices for medicines in certain developing countries. However,
this effect is countered by the enhanced ability of pharmaceutical companies
to offer steep discounts in humanitarian situations. These issues suggest that
IPR reforms always need to be accompanied by appropriate complementary
policies, such as fiscal supports for R&D, incentives to diffuse technologies,
and regulation of competition.

Should TRIPS Be under the World Trade Organization?

Underlying these controversies is the important prior question of whether
TRIPS even belongs in the WTO architecture. From a strict trade policy stand-
point, the answer may well be no, an opinion expressed forcefully during
negotiation of the Uruguay Round by advocates of multilateral trade rules,
including T. N. Srinivasan (1999, 1053), who called its inclusion a “colossal
mistake,” and Arvind Panagariya (1999). The first objection was that there was
already an international body, the World Intellectual Property Organization
(WIPO), with recognized expertise in IPRs so it made little sense to burden the
WTO with this management task. A second was that strengthened global intel-
lectual property rules would not be in the interests of developing countries
and would diminish their interest in the trading system. Put differently, inter-
national IPR reforms would not necessarily improve the welfare of all partici-
pants, whereas mutually beneficial impacts may be expected from strict trade
liberalization (see chapter 2).
A third problem was that inclusion in the multilateral system of trade
rules of IPRs, which are a fundamental area of “behind the border” regulation,
would inevitably open the door to provisions governing environmental protec-
tion and labor standards. These elements indeed would be problematic for the
system to deal with sensibly (Maskus 2002). In this view, the system of the
WTO and the General Agreement on Tariffs and Trade (GATT) is optimally
restricted to disciplines covering border measures that affect international
market access, such as tariffs, foreign direct investment (FDI) regulations, and
barriers to service providers. Finally, this expansion of the multilateral trade
rules into a complex and controversial area of regulation probably would
reduce the likelihood of successful future trade negotiations.
In Maskus (2002) I summarize the counterarguments that were made.
First, among regulatory areas IPRs are uniquely trade-related, both theoreti-
cally and empirically. Patents and trade secrets are important in principle
for inducing more trade and FDI in technologically advanced products,
while trademarks and copyrights help enterprises earn higher global returns

10 PRIVATE RIGHTS AND PUBLIC PROBLEMS

on product development and creative goods. International diffusion of new
goods and technologies is enhanced by transparent and enforceable IPRs. Put
differently, both excessively weak and excessively strong protection can serve as
nontariff barriers to trade. Thus, their inclusion in the trading system should
facilitate more trade flows. This same relationship to trade does not apply as
closely to environmental regulation and labor rights.
Second, while harmonization of IPRs at the highly protective levels of the
United States and the European Union surely would not benefit many devel-
oping countries, TRIPS actually calls for minimum standards and permits
countries to erect significant limitations on the scope of IPRs. Thus, it is
possible that the gains from enhanced technology transfer would outweigh
the costs of greater foreign monopoly rights in medicines, plant varieties, and
the like for many developing and emerging-market economies. In combination
with other market access gains associated with the Uruguay Round, even poor
countries might see net benefits from joining TRIPS.
More than 15 years have passed since the WTO and TRIPS were launched.
What can be said about whether conjoining these two major trade regimes
was a good idea or an uneasy marriage? Of course, this question cannot be
answered satisfactorily because it asks an impossible counterfactual: How
would the world have evolved without a TRIPS Agreement in the WTO and
would the world trade situation be better than what we have now? There is
no doubt that pushing global IPR reform would have been high on the trade
policy agendas of the United States, European Union, Switzerland, and Japan
in this period, even in the absence of TRIPS. Thus, the many effects of TRIPS
on trade and trade policy cannot be fully identified, much less erased, from the
historical record.
It is possible, though, to offer a few observations that matter for a quali-
tative assessment of TRIPS. First, the evidence provided in chapter 2 should
convince disinterested readers that patent reforms do facilitate more interna-
tional trade, FDI, and technology transfer, including to middle-income and
emerging-market economies. In that sense, IPRs are clearly trade-related and
TRIPS seems to be achieving at least one of its basic aims. Second, the inclu-
sion of TRIPS does not seem to be taxing the resources for dispute settlement
in the WTO. Indeed, the dispute resolution process is building a useful body
of judicial interpretation of the precise relationships between IPRs and trade
policy, as argued in chapter 3. Moreover, dispute settlement has become an
important means for developing countries to explore their policy space and
even to use the removal of IPR commitments as a means of enforcing decisions
in their favor.
Third, there likely would have been no ability to establish the WTO itself in
the absence of an intellectual property accord, given the importance attached
to it by major countries. Rather, a plurilateral approach among developed and
emerging-market nations to protect intellectual property would have emerged,
leaving poorer countries to the side of the trading system itself. Further, it
is highly probable that, in the absence of TRIPS, the demandeurs would have

INTRODUCTION 11
pushed for stronger if more fragmented efforts to expand the internation-
al scope of IPRs through free trade agreements. Using this “TRIPS-Plus”
approach, trade authorities in the United States and the European Union have
secured intellectual property standards in some countries that are question-
able on development grounds. However, the minimal and more flexible rules in
TRIPS offer others a basis from which to discourage such adventurism. Indeed,
governments in numerous developing countries have shifted over time in their
opinion of the TRIPS Agreement from resigned acceptance of a flawed docu-
ment to active assertion of a reasonably flexible baseline, to the point where
few would now favor removing it from the WTO.
Countering these positive factors is the possibility that disagreements over
further multilateral reforms of IPRs contribute materially to the clear diffi-
culties in concluding another round of WTO negotiations. The Doha Round
launched in 2001 has not reached fruition more than 10 years later. There are
numerous reasons for this failure, including concerns about reducing tariffs in
agriculture in key countries and an inability to negotiate meaningful market
access in services. However, the issues raised in the IPR area are equally thorny.
In particular, the European Union demands considerably expanded protection
for geographical indications, while many developing countries ask that patent
approvals require inventors to reveal the sources of origin of genetic resources
used to develop new medicines and biotechnologies. The United States and
numerous other countries strongly oppose these demands and see no reason
to link them to the broader market access negotiations.
In truth, it is likely that the Doha Round negotiations would struggle
whether or not TRIPS reforms were on the table, given the diminished enthu-
siasm today for multilateralism in the United States and other major coun-
tries. At a minimum, however, the inclusion of IPR issues has not facilitated
cross-issue bargaining toward progress, which is a solid first strike against
TRIPS as a component of the WTO.
A second strike is that, however much the gains in trade and technology
transfer may be, they are not widely distributed across the developing world.
Specifically, there is scarce evidence that stronger IPRs encourage more
access by the poorest and smallest countries to global technologies. There
are many reasons for this problem, related essentially to the need for IPRs to
be surrounded by welcoming investment climates, transparent governance,
investments in human capital, and other factors in order to be effective
(Hoekman, Maskus, and Saggi 2005). In this sense, the inclusion of TRIPS can
do little by itself to foster technology transfer to such countries. At the same
time, the required changes in patent and copyright rules raise the prospects
of higher costs or diminished access for medicines, plant varieties, and educa-
tional materials, while offering little in terms of foreign market access. Poor
countries can argue that TRIPS has been “all pain and no gain” to this point.
A potential third—and perhaps fatal—strike is the widely voiced claim in
civil society that globalized IPRs pose serious roadblocks to the unilateral and
international provision at low cost of medicines, green technologies, textbooks,

12 PRIVATE RIGHTS AND PUBLIC PROBLEMS

and other goods that resolve public goods problems. Chapter 5 provides a
thorough analysis of this claim. The view here is that the concern is misplaced:
Having TRIPS in the WTO does not necessarily interfere with finding such
solutions, because of both the flexibilities in its provisions and the fact that
effective approaches generally require coordinated actions outside the trading
regime.
Reasonable people can contemplate these and perhaps other pros and
cons of having the TRIPS Agreement in the WTO and come to quite different
opinions. The answer here is a qualified pro: The balance of economic evidence
and the opportunities for deploying reforms within the TRIPS framework tilt
the balance in favor of its inclusion. Still, there are important steps to take to
improve the system and integrate it better with broader public goods concerns
on the global stage.

How Is the Global Governance Structure Evolving?

For a variety of reasons, the current global IPR regime, with its foundation in
TRIPS, is viewed by many as inadequate, incomplete, or already out of date,
leading to pressures for further changes. These pressures are the subject of
chapter 3. Advocates of strong patents in pharmaceuticals and biotechnology,
for example, think TRIPS offers too much freedom to limit patent scope, and
they are pushing for greater rigor in countries negotiating preferential trade
agreements with the United States and the European Union. These so-called
TRIPS-Plus requirements are highly controversial.
In contrast, many developing and emerging-market countries believe that
the system as negotiated is one-sided in favoring the exclusive private rights
of inventors and creators, who are found mostly in the industrialized world.
These governments argue for rebalancing the system, whether by modifying
TRIPS or establishing a pro-development focus at the WIPO. One example of
how this is playing out is the ongoing discussions about establishing recog-
nized limitations and exceptions on the scope of copyrights, along with prin-
ciples of “fair use,” under which countries would be permitted to designate as
legal certain unauthorized uses of protected material.
Echoes of this debate are found also in attempts by the United States and
European Union to procure a global patent treaty at the WIPO that would
harmonize substantive patent rules around the world. This rather quix-
otic attempt is resisted by many countries, rich and poor, that see value in
sustaining flexible rules and national sovereignty.
Certain interests on both sides of this basic debate also find the system
incomplete and want it to be extended. The European Union, for example, in
partnership with several developing economies, is pushing to expand protec-
tion in TRIPS of geographical indications, or names that identify quality or
other characteristics of consumer goods from particular locations. Many
developing countries also wish to introduce into TRIPS intellectual property
standards for recognizing and protecting rights to traditional knowledge, such

INTRODUCTION 13
as folklore and artisanal designs, as well as products developed from genetic
resources. This preference is noteworthy for it points out that IPRs are seen by
many, even in poor nations, as an affirmative approach to organizing global
markets for communal knowledge and resources. To date, however, attempts to
expand TRIPS to accommodate these interests have met unyielding opposition.

What Are the Systemic Stresses?

Opinions that the global IPR governance system is inadequate and outdated
also stem from basic structural pressures that threaten to overwhelm it in crit-
ical dimensions, as laid out in chapter 4. To put it briefly, a system designed
for 20th century technologies, procedures, and resources sometimes fails in
critical ways to meet the needs of 21st century clients, both rights holders and
users.
One problem is an explosion (prior to the Global Recession) of patent
applications in the major markets, including the United States, European
Union, Japan, South Korea, and China, in addition to registrations of multi-
country patents at the WIPO. This situation reflects a variety of factors,
including expanding innovation and technology transfer, increasing needs for
enterprises to accumulate global patent portfolios, and structural characteris-
tics that encourage large-scale filing. There are at least two key consequences.
First, national authorities are increasingly swamped and firms face rapidly
rising patent backlogs and delays. Many of these authorities now seek means
of international cooperation to reduce costs. Second, the mushrooming of
patent applications and grants is increasingly creating complex claims and
counterclaims about ownership of particular technologies or families of tech-
nologies across borders. This problem makes it costly for others to penetrate
this complex and opaque system to determine claims on ownership.
A second factor is that major IPR holders are frustrated with the lack of
strong mechanisms to enforce their rights against counterfeiting and piracy,
especially in cross-border trade. It is technically difficult to exclude infringing
goods from countries even with rigorous intellectual property protection.
However, unauthorized copies and illegitimate merchandise are readily traded
across borders where there is little reach of customs authorities. Trade in
counterfeit medicines and food products may be especially problematic for
public health reasons. To combat this problem, the governments of several
major economies recently negotiated an Anti-Counterfeiting Trade Agreement
(ACTA) with the aim of establishing standards for enforcing IPRs, including
internet piracy. This agreement, with voluntary membership, would exist
outside the WIPO and WTO, raising a number of difficult questions about
process and governance.
A third major stress is that the rapid advance of software, the internet, and
digital communication technologies makes it virtually impossible to protect
and enforce copyrights as they are traditionally understood. This is because
the very acts of controlling distribution of digital copies and preventing their

14 PRIVATE RIGHTS AND PUBLIC PROBLEMS

use in compilations and user-provided music and videos are extremely difficult
in an era of costless downloading and file sharing. Attempts to do so via digital
rights solutions are met quickly with countermeasures to sustain copying,
while the heavy-handed approach of suing users in court seems ultimately self-
defeating for content providers. And, as always, the reach of such enforcement
is greatly limited when users and servers reside abroad.
At the same time, traditional copyright models are increasingly hard to
sustain in a world where digital goods have a greater international reach,
meaning that their rights are subject to greater fragmentation and legal uncer-
tainty in numerous jurisdictions. These models also do not necessarily opti-
mize the opportunities of artists and musicians in poor countries to access
global media markets. Thus, a more sustainable and international approach is
to explore cross-border business models and low-cost, licensing-oriented solu-
tions in which users have ready access to digital content, while ensuring that
artists, authors, and content providers receive sufficient returns for their work.

How Do Intellectual Property Rights Interact with Global Public

Goods?
A primary point of this book is that while there are significant economic
efficiency gains from a globalized IPR regime, the system’s inherent focus
on defining and enforcing private rights sometimes ignores, and may even
encroach upon, the needs and abilities of authorities to cooperate in providing
important public goods. For example, concerns continue to be raised about
whether restraints on compulsory licensing can block attempts to increase
access to medicines. Similarly, many argue that patents in critical green tech-
nologies may impede much-needed technology transfer and local adaptation,
while copyrights may block access of students in developing countries to
published educational materials.
It must be stressed that such problematic outcomes are not always true,
precisely because IPRs can improve market processes even as they define private
rights. For example, patents can support the establishment of contract terms
in public-private partnerships that aim to develop and distribute essential
medicines. These contracts assign rights and obligations, determine licensing
royalties and access terms, and support dissemination. Similarly, patent pools
can be effective means of combining rights needed to produce and license a
suite of complementary environmental technologies. And observers should
not lose sight of the basic fact that reliance on IPRs is central for supporting
R&D investments in pharmaceuticals and biotechnology, industries that
provide key inputs for public health and agriculture.
Nevertheless, significant concerns arise in a number of areas, some of
which will be addressed in chapter 5. In general, economists ask two basic
questions. First, does the global IPR system raise a sufficient number of road-
blocks to providing and accessing public goods to justify changes in norms
or procedures? Second, is reliance on private exclusive rights enough to meet

INTRODUCTION 15
needs for investment in development and dissemination of new technologies,
or are significant complementary initiatives required?
Within that framework, five broad and essential issues are analyzed. First,
what is the scope of policy space for developing countries seeking to benefit
from reformed IPR systems? For many countries, transparent and effectively
enforced regimes should generate real development gains in the medium term.
Nevertheless, countries may deploy important limitations and exceptions to
exclusive rights for both development and social policy reasons. The discus-
sion considers how effective such policies as compulsory licenses and regula-
tion of competition may be and under what circumstances.
Second, what is the role of IPRs in the development and distribution of
medicines and how do they affect public health policies, especially in devel-
oping countries? The section is largely a progress report on initiatives to date,
but notes the need for further approaches.
Third, are patents an impediment or a boost to the transfer of environ-
mental technologies and how might they be supplemented by additional
global and local policies? There are a number of similarities between the prob-
lems with medicines and green technologies, but also enough differences to
merit separate treatments.
Fourth, how can IPRs be deployed to spur agricultural innovation and
productivity improvements in developing nations? Are IPRs inimical to the
protection of traditional knowledge or can they be used to generate income for
such creative work?
Finally, perhaps the ultimate public good is knowledge itself. Policymakers
in at least the United States and European Union increasingly resort to IPRs as
a means of bringing to the market the commercial manifestations of scientific
knowledge. Yet if we conceive of knowledge as a basic public good that should
be widely available, there is a clear tension between exclusive rights and free
access. This raises the thorny question of whether, or to what degree, the useful
results of basic scientific work should be placed in some form of information
“semi-commons” for widespread access.
Encapsulated in the analysis of these issues is the obvious problem that
public health, environmental protection, and knowledge acquisition all
involve significant externalities and market failures that IPRs may resolve or
exacerbate. Economics can shed light on these questions and that is the essen-
tial task of chapter 5. However, even the economic issues and solutions can be
highlighted only in general terms in a short treatment, which will essentially
ignore equally complex questions in law, science, and international relations.

Four Ideas to Improve the Global System Today

A central message of this book is that well-defined and transparent intellectual
property rights are an indispensable building block of the global economy.
At the basic level they play an important, if complicated, role in supporting
economic development and growth. They resolve certain market shortcom-

16 PRIVATE RIGHTS AND PUBLIC PROBLEMS

ings in the cross-border trade in information and facilitate the emergence
of modern international technology markets. IPRs are the foundation of the
licensing arrangements needed to build production facilities and transmit
know-how among private partners. They also are critical for defining the terms
of technology transfer and technology sharing agreements among universi-
ties, foundations, pharmaceutical companies, NGOs, and members of public-
private partnerships that may develop and distribute essential medicines. The
legal assurances of copyrights support contracts in complex, multiple-agent
creative activities and facilitate global distribution of entertainment goods
and digital media. IPRs offer scope for transmitting new seed varieties, on the
one hand, and protecting the rights of those with traditional knowledge, on
the other.
Thus, IPRs can be powerful agents for development and transformation
and it is a mistake to dismiss them as rent-generating barriers to trade and
competition. Still, optimism about potential gains does not preclude worries
that the existing global structure is suboptimal in a number of important
ways, particularly looking toward the future. At least four general concerns
may be raised. First, in some ways the current system underperforms its poten-
tial, both because rights may be poorly defined and ambiguously enforced and
because users have inadequate information about how to maneuver in this
environment. Second, traditional IPRs, based on concepts of discrete inven-
tion, linear technical progress, and exclusive distribution control seem increas-
ingly out of touch with modern innovation, networking, and learning. The
system remains rather rigidly wedded to these notions, some of which need to
be reconsidered. No less an authority than Francis Gurry, the general director
of the WIPO, argues that the copyright system must “adapt or perish” in light
of pressures from the internet.7
Third, despite the many residual policy flexibilities in the TRIPS Agreement,
the global regime still has a certain one-size-fits-all logic, with a tendency
toward upward harmonization of standards. Developing countries may not
want to uncritically adopt these long-standing norms and practices. Rather,
some may prefer to experiment with modified innovation tools that make these
rights more affirmative for their growth needs.
Finally, despite their critical role in markets, IPRs cannot always be relied
upon as the major bridge to finding means of providing important global
public goods. In this task, IPRs are sometimes complementary building blocks
and sometimes difficult stumbling blocks. They need to be fit into a broader
approach to investments, diffusion, and adaptation.
Comments are made throughout the book about specific aspects of
these critical issues. To preview, consider the following “top four list” of ideas
for short- to medium-term policy changes that would help reestablish the
affirming complementary role of IPRs in the greater objectives of supporting

7. “Copyright System Must ‘Adapt or Perish,’ WIPO Director Says,” Intellectual Property Watch,
March 15, 2011.

INTRODUCTION 17
innovation, diffusing information, encouraging cultural growth, promoting
development, and addressing global public needs. Deeper background analysis
will be found in other parts of the book. The recommendations stem largely
from a mix of economic analysis and empirical evidence. However, in cases
where economics cannot provide a clear answer and evidence is lacking, the
ideas rest also on a measure of common sense and global fairness. Each of
these suggestions promises significant net global benefits over time and all are
feasible, given sufficient political will.

Idea 1: Designate the World Intellectual Property Organization as a

Global Information Repository
Establish the WIPO as a global information repository with a mission and resources to
develop comprehensive searchable databases on patents and the cultural repertoire.

The global patent system greatly needs more transparency and efficiency, as
discussed in chapter 4. International enterprises can be caught unaware of
existing patent rights in various markets, while inventors and researchers need
access to a fully articulated and comprehensive database of patent claims.
Thus, a highly desirable policy initiative would be for the developed and
major emerging-market and developing economies to invest in an online, fully
searchable database of all patent claims in force at any time, at least within
those countries. The natural location for this facility is the WIPO, which has
already begun developing searchable patent databases in limited technology
areas.
A comprehensive database would lower search costs for examination
offices and inventors. A more diffuse and highly desirable benefit would be
that published patent applications and grants, with information about dura-
tion of protection, could be readily linked to scientific literature and other
forms of prior art. This kind of information would be invaluable for the devel-
opment of “patent landscapes” that characterize the range and geographical
scope of patents in key technologies. The utility of an online patent database
could be further enhanced through a centralized patent-licensing registry, in
which firms could voluntarily list their licensee partners for specific technolo-
gies. The WIPO could offer a similar searchable database of trademark regis-
trations, geographical indications, and plant variety rights.
Note that the WIPO’s responsibility need not be limited to industrial
property. Even more ambitious would be a concerted effort to catalog to
the extent possible the creative works of authors, musicians, and artisans
around the world. One direct benefit is that such a registry could assist music
publishers and other content providers to license their works internationally.
Perhaps more importantly, developing a repertoire of music and catalogs of
designs and even elements of traditional knowledge in the developing world
would offer an important resource linking creative people in poor countries
with global commercialization streams.

18 PRIVATE RIGHTS AND PUBLIC PROBLEMS

Idea 2: Facilitate Global Digital Licensing
Clarify through a multilateral agreement that digital content providers have global trans-
mission rights and facilitate greater international competition among national rights
collection societies.

It is time to recognize that copyrights in their traditional form are increas-

ingly at odds with rapidly evolving digital and information technologies that
favor free availability, global distribution at near-zero marginal cost, and
creative uses of digital content (see chapter 4). Continued reliance on nation-
ally defined rights, technological controls, and litigation cannot defeat these
trends for long. The current strategy also contradicts the essential public
purpose of copyrights, which is to make information and cultural goods avail-
able as widely as possible while ensuring returns to artists and writers suffi-
cient to ensure that new goods are continually developed.
A more fruitful approach would meet certain principles: a neutral frame-
work that supports innovation in business models, makes paying for content
as easy as downloading it, and recognizes the global reach of the digital
world. However, voluntary global licensing faces three essential problems:
Transmission rights are not necessarily global, there are high transactions
costs associated with different national laws and regulations among rights
collection societies, and national copyright laws often excessively restrict usage
rights. In principle, these difficulties could be overcome by defining a licens-
able global digital transmission right that would apply only to online content
distribution. Copyright holders could offer licenses to music, video, and news
service providers, who would be able to upload and transmit files in the catalog
in return for paying a subscription fee. Individual users could also pay a fee
to permit noncommercial file sharing and the use of music in videos, celebra-
tions, and the like. Properly structured, such license fees could well attract
more users and expand payments to the content industries.
This system can work well only with the close cooperation of rights collec-
tion societies, which are often insular, nationalistic, and costly, especially in
developing countries. The digital industries are global, but because copyrights
are defined nationally, and each country has its own collection societies, distri-
bution is highly fragmented. Remarkably, this balkanized system pertains
also to organizing local rights to internet transmissions, which are inherently
a worldwide phenomenon. Internet service providers must reach separate
licensing agreements with rights holders or performance rights organizations
and collection societies in each country.
This situation limits the global reach of such providers and makes it quite
difficult for individual users to license international content. Thus, it is impor-
tant to encourage competition among collection societies in order to maximize
choices for music fans and give rights owners more flexibility in selling their
content. Particularly in developing economies, opening up music collection
societies to entry, including by such societies located abroad, would enhance
the ability of local musicians to gain access to licensing revenues.

INTRODUCTION 19
Idea 3: Establish Revenue Streams to Enhance the Infrastructure of
Intellectual Property Rights
Encourage national IPR offices to implement small levies on industrial property regis-
trations, grants, and renewals to establish funds for improving the administrative and
judicial systems for IPRs, including especially enforcement. These levies could be supple-
mented by lump-sum taxes on firms offering copyrighted content.

There are three certainties about international enforcement against trademark

counterfeiting and copyright piracy (see chapter 4). First, domestic copying
and illicit trade are highly profitable activities that cannot easily be controlled.
Second, the firms selling legitimate versions, overwhelmingly from the devel-
oped world, want strong crackdowns on rapidly growing misappropriation of
their rights. Third, many developing countries are not willing to pay the costs
of enforcing IPRs, both because their administrative and financial resources
are heavily constrained and because the owners of the rights are mostly foreign.
The political economy of this situation could not be clearer, and it explains
why the major intellectual-property-exporting countries have negotiated
ACTA. Their evident hope is that its provisions will come to be seen as best
practices that must be adopted by developing nations if they wish to sustain
open market access abroad. This seems a vain hope unless active investments
are made in registering, administering, and enforcing IPRs in poor countries.
There are sound public interest reasons for supporting these investments.
They are unlikely to be made, however, without additional revenue sources to
pay the costs. Some of this might come in the form of public subsidies from
developed-country governments to pay for more training and administrative
resources. A more sensible approach is to recognize that the major beneficiaries
of greater enforcement will be intellectual property owners. Thus, additional
burdens should be placed on producers of legitimate goods, thereby making
them shoulder a portion of the costs. One concrete suggestion would be for
governments to place a small special levy on patents, geographical indicators,
plant variety rights, and, especially, trademark applications and renewals.
The levy could be tied to market sales or some other measure of local pres-
ence in order to avoid an excessive burden on small companies and startups.
Safeguards may be needed to prevent diversion of these user fees into other
unrelated areas. One possibility would be to have these small fees, designated
clearly for building administration and enforcement capacity, collected and
managed by the WIPO. A complementary or alternative idea would add small
fees to patent applications under the Patent Cooperation Treaty and interna-
tional trademark registrations under the Madrid Protocol to help pay for tech-
nical assistance and enforcement.
Finding dedicated resource streams could help raise the willingness and
ability of smaller economies to address counterfeiting and piracy. However,
their ability to deal with massive problems in China, Russia, India, and other
large markets is doubtful. Here the problem is less a lack of resources and more

20 PRIVATE RIGHTS AND PUBLIC PROBLEMS

an unwillingness to deal with structural sources of infringement. In such cases,
there seems little alternative except continued engagement and sustained pres-
sure on those governments to take these problems seriously, while convincing
them that cleaning up these problems is in the interests of innovators and
creators in their own economies.
There are many other IPR-related conflicts with China, of course, such
as the contours of its indigenous innovation and standards policies, both of
which affect patent rights (see chapter 4). Dealing successfully with these prob-
lems likely will require considerably more cooperative bilateral and plurilateral
engagement to increase mutual understanding and find confidence-building
measures.

Idea 4: Make an Affirmative Declaration on Technology Transfer

Announce that technology transfer for development and public needs is a clear global
priority.

Probably the most frequently heard complaint about TRIPS from developing
nations and NGOs is the perceived lack of technology transfer flows in the wake
of its implementation. Despite some indirect econometric evidence of posi-
tive effects, the perception is real and deeply felt, particularly in the poor and
least developed economies. In turn, there is great frustration on two grounds.
First, probably the major selling point of TRIPS to poor countries was the
potential it would create for more technology transfer. Without clear evidence
of such growth, countries have lost confidence in the economic benefits of
TRIPS and the global IPR system in general. Second, TRIPS itself, in Article
66.2, committed the developed countries to positively encourage outward
technology transfer at least to the least developed countries. Any reading of
the periodic reports to the TRIPS Council reveals that such efforts have been
minimal and poorly targeted.
This frustration is important in light of the clear importance of tech-
nology transfer, both as a direct contribution to economic development and
as the most feasible means of accessing critically needed technical solutions
to problems in public health, environmental protection, and agriculture (see
chapters 3 and 5). Available evidence suggests that patents are not often a
major impediment to such access. Indeed, they play an important supporting
role in many cases. Overall, however, the existing IPR system has yet to marshal
much success in expanding the volumes of technology development aimed at
problems in poor countries and ensuring their international diffusion.
In this context, probably the greatest confidence-building measure
developed countries could achieve in the IPR arena is to make a meaningful
commitment to investing in these needs. Such a commitment might be termed
an Affirmative Declaration on Technology Transfer, which could powerfully
complement the conclusion of the Doha Round but should go forward even if
the round ultimately fails. The provisions of such a declaration might incorpo-

INTRODUCTION 21
rate a wide variety of positive inducements that, if focused on meeting future
public needs, would make a substantive contribution to both economic devel-
opment and global welfare.
Among the suggestions supported by economic analysis would be those
listed below, as outlined in chapters 5 and 6.
First, announce a program to explore the potential for using differentiated
patent terms and buyouts to encourage technology transfer in specific tech-
nologies supporting public goods and development needs. Second, commit
public funding to support local use and adaptation of protected technologies
under specific circumstances. This approach could also facilitate collaborative
mechanisms that build sustainable technical and information-sharing rela-
tionships among global enterprises and local firms and institutions. Third,
find means to encourage universities, research laboratories, and enterprises to
license on terms differentiated to the needs of local markets. Fourth, announce
a commitment to join meaningfully in discussions at the WIPO over terms of
an agreement on permissible use of copyrighted materials for education and
science.
Moving further afield, such a declaration could signal a willingness to
incorporate into public research grants provisions for researchers to network
with scientists in developing countries, both to focus efforts on projects of
demonstrated importance and to transmit knowledge. It could also give a
sympathetic nod to proposals to increase the flow of temporary migration
of scientific and technical personnel. Ultimately, such steps could serve as
a building block for an eventual agreement on international access to basic
science and technology.
Finally, many key elements to facilitate needed technology transfer involve
public and foundation funding for R&D programs, dissemination of new
information, and adaptation of technologies to local uses in poor countries.
Greater enthusiasm for such funding by taxpayers in economically stressed
high-income countries is unlikely to emerge for some time. In this context,
a significant commitment of resources from China, the oil kingdoms in the
Middle East, and other countries with large monetary reserves could be a deci-
sive signal of their intention to contribute meaningfully to meeting global
public needs.

Organization of the Book

With this foundation, the remainder of the book delves deeply into the inter-
national economics of IPRs. Chapter 2 begins by analyzing the impact of IPR
policy reforms on various forms of innovation and technology transfer. While
there is certainly room for more research, the evidence convincingly supports
the view that IPRs, measured primarily by patent rights, have positive effects
on international information dissemination through market channels of
new technologies. However, that optimistic conclusion requires qualification
in a number of dimensions, most importantly that such evidence to date is

22 PRIVATE RIGHTS AND PUBLIC PROBLEMS

absent as regards technology transfer to the poorest economies. The evidence
of impact on innovation is more ambiguous and anecdotal, reflecting the
complexities of this issue.
The policy stage is set in chapter 3 by reviewing major changes in the
global system since the introduction of TRIPS. While this chapter is largely
descriptive, it highlights a number of controversies that have been addressed—
or deepened—by these successive regime changes. Chapter 4 turns to an
analysis of a number of current international pressures and strategic issues
regarding the commercial use of IPRs. These cover such problems as patent
overload, patents and technical standards, geographical indications, parallel
trade, internet copyrights, and dealing with counterfeiting and piracy. Chapter
5 continues in that vein but with an emphasis on global social needs, particu-
larly in developing countries. The chapter reviews questions regarding IPRs
and public health, patents and environmental technologies, and the complex
subject of private rights in both traditional knowledge and fundamental scien-
tific results.
Based on the analysis in the text, chapter 6 offers general conclusions for a
policy agenda. While these recommendations are based as much as possible on
the economic evidence and logic, inevitably they are about finding a forward-
looking balance and cannot meet the preferences of all stakeholders. They will
appeal to some readers and dismay others; to yet others they will appear naïve.
It is unlikely that anyone will agree with all of them. But if readers feel better
informed and challenged to think through these issues more fully, the book
will have done its job.

INTRODUCTION 23
 2
The Big Global Upgrade:
Is It Working?

Beneath all the Sturm und Drang about intellectual property rights (IPRs) that
sometimes pits developed against developing countries, industry against civil
society and nongovernmental organizations (NGOs), and digital content
hawks against free-information doves lies a basic fact: The global system of
intellectual property protection has changed fundamentally in the last 17
years. Virtually every nation has adopted laws offering stronger exclusive rights
while promising to enforce those rights with more vigor, if not enthusiasm.
While far from constituting a globally harmonized regime, the Agreement
on Trade-Related Aspects of Intellectual Property Rights (TRIPS), the World
Intellectual Property Organization (WIPO) treaties, free trade agreements
(FTAs), and other policy vessels have ratcheted up the rules with the devel-
oping world growing closer to developed-world norms.1 Multinational firms
should, therefore, enjoy stronger rights and greater certainty of enforcement
than was the case even five or 10 years ago.
All these raise some basic questions that need exploring. First, how much
have IPRs actually changed since TRIPS was implemented? It is difficult to
measure real changes in commercial regulation, but available indicators sug-
gest that the international expansion of legal rights indeed has been dramatic.
Second, has this new world had detectable effects on innovation, and are there
differences in these effects across levels of economic development? Third, what
about the effects of these changes on international flows of technology trans-
fer? If the primary rationale justifying these policy reforms is to expand access
to global technologies, and thereby increase productivity, structural transfor-
mation, and economic growth in developing countries, there needs to be some

1. Chapter 3 describes this history and the ongoing controversies.

25
indication that the process is under way. Fourth, if these effects are conditional
on local characteristics—and they seem to be—what is it that they depend on?
Finally, can anything systematic be said about the apparent distribution of
gains and losses across countries in the wake of these policy changes, at least
from looking at the economic data? That is a complex question that cannot be
answered definitively, but is well worth posing.

How the Situation Has Changed

The TRIPS Agreement mandated significant changes in IPR standards and
laws in much of the developing world. Further, as more countries such as
China and Vietnam joined the WTO, they had to take on the TRIPS rules.
Regional trade agreements with intellectual property chapters extended these
requirements. Moreover, a number of developing countries undertook unilat-
eral reforms for their own reasons, including a widespread vision that more
rigorous IPRs are a pillar upon which to build national innovation strategies.
Thus, the 1990s and early 2000s were a period of major legislative change in
IPRs. Substantial external and, increasingly, internal pressure has also been
applied to push particular nations to invest in expanded enforcement efforts.

Measuring the Policy Shift

All of those changes surely have affected the levels of protection around the
world. How can this phenomenon be measured? There are essentially two
possible approaches. First, one can read the laws and try to capture legislative
changes by virtue of some variable index. That method helps trace through
what is on the books in terms of the ability of rights holders to protect their
intellectual property, which is an important factor. It is also an objective
approach—either a law exists or it does not—and is therefore comparable across
countries and over time.
However, this first approach misses how well enforced the laws may be
or how IPR reforms interact with economic characteristics to improve protec-
tion. Thus, the second approach is just to ask people who are in a position to
explain whether and how things are changing. The subjectivity of their answers
is problematic, but the results can be highly revealing.
By far the most prominent measure used in the economics and legal liter-
ature to assess policy reforms and their impact is the national patent rights
index first developed by Juan C. Ginarte and Walter G. Park (1997) and updated
by Park (2008a). Commonly called the GP index, it captures the presence or
absence of particular elements in patent law, with these elements aggregated
into five broad categories: duration of protection, coverage (e.g., which tech-
nologies are eligible for patents), membership in international treaties, legal
enforcement mechanisms (such as preliminary injunctions), and limitations
on patent breadth (such as compulsory licensing). The components in each
category are summed to get a figure between zero and one, and then the cate-

26 PRIVATE RIGHTS AND PUBLIC PROBLEMS

 Table 2.1 Changes in the Ginarte-Park patent rights index
Percent
Income/country 1990 1995 2000 2005 rise Sample
Low-income countries 1.78 2.03 2.26 2.67 50 33
Lower-middle-income 1.61 2.30 3.04 3.34 107 44
and middle-income
countries
Upper-middle-income 2.24 2.93 3.39 3.91 75 13
countries
High-income 3.37 4.13 4.34 4.38 30 24
countries
Quartile 1 1.84 2.01 2.19 2.65 44 30
Quartile 2 1.53 2.11 2.69 3.06 100 29
Quartile 3 1.69 2.58 3.27 3.57 111 29
Quartile 4 3.26 3.99 4.27 4.34 33 29
India 1.03 1.23 2.27 3.76 265
China 1.33 2.12 3.09 4.08 207
Brazil 1.28 1.48 3.59 3.59 181
Mexico 1.36 3.14 3.68 3.88 186
South Korea 3.69 3.89 4.13 4.33 17
Taiwan 1.26 3.17 3.29 3.74 198
Singapore 2.04 3.88 4.01 4.21 106
Israel 2.94 3.14 4.13 4.13 40
Hungary 2.28 4.04 4.04 4.50 97
Portugal 1.67 3.35 4.01 4.38 163
Jordan 0.74 1.08 3.03 3.43 363
United States 4.68 4.88 4.88 4.88 4
Notes: Low-income countries have 2003 gross national income per capita (purchasing power parity) of
less than $2,500. Lower-middle-income and middle-income countries have per capita incomes rang-
ing from $2,500 to $11,000. Upper-middle-income country per capita incomes range from $11,000 to
$20,000. High-income country per captia incomes are greater than $20,000.
Sources: Computed by the author from Ginarte and Park (1997); Park (2008a); World Bank (2005).

gories are equally weighted to achieve an overall patent rights index that varies
between zero and five. The GP index begins in 1960 with 80 countries and is
computed every five years through 2005, when it covers 117 nations.
Questions certainly can be raised about the accuracy of the GP index in
capturing the actual scope of patent protection. However, since this is the
only index computed on a consistent basis over time for a large number of
countries, it is worth reviewing what has happened since just before TRIPS
was founded in 1995. Table 2.1 organizes countries according to per capita
real income levels in 2003, measured at purchasing power parity exchange

GRAPHICS 27
THE BIG GLOBAL UPGRADE: IS IT WORKING? 15
rates. In the top panel, countries are categorized as low income, lower middle
income and middle income, upper middle income, and high income. As may
be seen, the 33 poorest countries raised their statutory patent rights by about
50 percent, on average. These countries were given a 10-year phase-in period to
implement TRIPS, and may apply to the TRIPS Council for further extension.
In many cases their legal reforms are far from completed (Deere 2009). Indeed,
the least developed countries are not required to implement patent reforms in
pharmaceuticals until 2016.
Far greater increases were erected in the lower-middle-income and middle-
income categories, which passed reforms sufficient to raise the average patent
index by over 100 percent. Many of the countries in these groups, including
China, India, Egypt, Turkey, Thailand, and Brazil, have been the subject
of particular concern on the part of multinational firms about weak IPRs
combined with a significant ability to copy technologies and products. Thus,
the doubling of protection in just 16 years is a marked change. The upper-
middle-income countries also enacted significantly stronger patent rights.2
This category is composed mainly of countries that newly joined the European
Union and had to adopt tighter IPRs as a consequence. Finally, the high-
income countries on average saw a modest rise in their average legal patent
rights. To some degree this is a statistical artifact, since the index is capped at
five. But it is evident that the wealthier economies were not obliged to change
their laws much in the process of global reform.
Further perspective is available in the second panel, where countries are
arrayed into income quartiles. Note that in 1990 the average statutory protec-
tion level was actually higher in the poorest nations than in the next two quar-
tiles. This fact reflects the well-known “U shape” between per capita income
and patent protection first discussed by Mohan Penubarti and myself (Maskus
and Penubarti 1995). Thus, prior to TRIPS the scope of patent protection first
fell as economies moved from low- to middle-income status before turning
upward. Some of this effect reflected stronger laws enacted long ago in British
and French colonies still in the low-income group. However, the nonlinearity
existed even in regressions controlling for this factor, suggesting that as poor
countries developed more capacity to copy and reverse engineer products, their
policy response was to weaken patents (Maskus 2000a). In table 2.1, however,
it is clear that reforms overturned this situation and established a monotonic
relationship between patents and income by 1995, which was even stronger by
2005. Overall, both the second and third quartiles—those economies posing
the greatest threat of copying—doubled their legal patent rights over this
period. Again, the relative increase in the highest-income quartile of countries
was considerably less.

2. Often in this book, reference will be made to “stronger” and “weaker” IPRs. This is a positive
reference solely to the existence and scope of such rights, rather than a normative indication of
their appropriateness.

28 PRIVATE RIGHTS AND PUBLIC PROBLEMS

Another random document with
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 CHAPTER X.
WHAT FURTHER BEFEL LOUISE IN THE CATACOMBS OF THE BIÈVRE

As the last of the lawless band departed from the carrière

Lachaussée advanced towards the altar, at the foot of which Louise
Gauthier had claimed a sanctuary. In spite of Bras d’Acier’s last
threat, the denunciation of the Abbe Camus had somewhat awed
him. But Lachaussée was less scrupulous. He was as dead to all
religious feeling as the others, and besides this, superstition had no
power over him. Advancing to the cross, he seized the arm of
Louise, and tore her from the altar into the middle of the apartment.
The knocking which had struck such terror into the hearts of the
subterraneous gang still continued, and again Louise raised her
voice for assistance.
‘They will murder me!’ she cried. ‘Help! this instant, or it will be too
late. There are but two, and——’
Lachaussée placed his hand over her mouth and stopped her
cries. And then, assisted by Bras d’Acier, he hurried her into a
smaller carrière leading from the great one by a rude archway, which
could be closed after a manner, like the door, by a large curtain of
rude sackcloth. It was a vault hewn out similarly to the other, with a
rough attempt to form a gothic roof and buttresses from the
limestone. But there were horrid features in the apartment which
made Louise shudder as she looked timidly round. A dull and
smoking lamp was here also suspended from the ceiling, and by its
light could be seen coffins in every direction round the walls; some
with their feet projecting some inches beyond them; others lying
sideways, such as we see bounding the grave of a crowded burying-
ground. In many instances they were open, but no remains were
visible. Their cases appeared to have been appropriated to use as
cupboards, in which articles of various kinds were stored. In one
corner were a few skulls and bones thrown carelessly together; the
number was insignificant, and they were not ranged in the order of
the existing catacombs. As we have stated, the carrières were at that
time the mere result of excavations for building stone; it was not until
more than a century after the date of our story that the health of the
city demanded the removal of the foul and reeking burial-ground
attached to the Église des Innocens, at the corner of the Rue St.
Denis and the Rue aux Fers, near the present market, with whose
beautiful fountain every visitor to Paris is familiar.3
In one corner of this ghastly chamber was a large font filled with
water, which distilled drop by drop from the stalactites that overhung
it, and the reflection of the lamp quivered on its dark surface. It ran
over at one corner, and small channels hewn in the floor conveyed it
away to carrières still deeper.
‘Another word,’ said Lachaussée, ‘and we leave you to your own
company in this dreary place.’
‘I ask no more,’ replied Louise, recoiling from him as he relaxed
his hold. ‘Let me be anywhere, so long as I am alone, and away from
those fearful people.’
‘I am sorry you do not like them,’ said Bras d’Acier; ‘the more so
as you will perhaps have to pass a little time amongst us. Only it
would not have answered to have taken you from the sanctuary
before them. They are particular in matters of religion.’
And he accompanied these last words with a horrid laugh.
‘Do not take me among them again, M. Lachaussée,’ said Louise,
‘I implore you. Let me remain here rather, even in this dismal vault.’
‘Pshaw!’ cried Lachaussée; ‘you know not where you are. Look at
those coffins—they have long since been despoiled of their festering
contents to hold Bras d’Acier’s riches. You are below the cemetery of
St. Medard, hemmed in on all sides by corpses, the accumulation of
centuries. Would you like this for a companion?’
He stooped to pick up a skull, and held it in mockery over the
flame of the lamp, which hideously illuminated it. Then, tossing it
back to the corner of the chamber, he went on—
‘The very air is redolent of mortality. The decay of ages, in some of
the coffins, leaves but the food for that lamp which is now burning
above us. Bras d’Acier is an economist; and many of the quiet
inhabitants of the cemetery become more useful to mankind in death
than they ever were in lifetime. They form his flambeaux.’4
 ‘Is there no one to aid me,’ cried Louise in agony, and shrinking
from the accumulated horrors of Lachaussée’s description.
The dull knocking sound was again audible, but louder. It
appeared to be close at hand, and the girl redoubled her outcry.
‘Be still, I tell you,’ said Bras d’Acier, ‘and come instantly with us.’
‘With you!’ exclaimed Louise; ‘never; you shall kill me first. Mother
of Mercy! pity me; for to you alone can I now look for assistance.’
She fell on her knees and grasped a small crucifix that was
suspended from her neck. Lachaussée snatched it from her, and
threw it amidst the bones and rubbish in the corner.
‘One moment’s delay,’ he added, ‘and you are lost. Do you see
that wall where the water is trickling and oozing into the font? It is not
thicker than the length of your hand, and that is the only boundary
between us and a branch of the cold Bièvre, which flows over our
heads. We have but to confine you in this room, and let in the river;
the carrière will be filled, and every record of the deed hidden.
Come.’
‘Leave me here—drown me—if you know what mercy means,’
returned Louise, as she struggled with her persecutor. ‘How have I
ever injured you, that you should persecute me thus terribly?’
‘Your own sense might have warned you not to annoy M. de
Sainte-Croix as you have done. But we have no time for words; you
will have plenty of leisure in the Carrière Montrouge to learn
everything. Bras d’Acier, you have broader shoulders than my own to
carry a burden. Take up the squalling minx, and follow me. I will
precede you with the light.’
The huge ruffian advanced towards Louise Gauthier, who, despite
their threats, shrieked with terror as he approached. He lifted her as
he would have done an infant, whilst Lachaussée took down the
lamp from where it hung and prepared to go before him. But as they
were leaving the vault the noise sounded close at their side; the very
walls appeared to quiver from some unseen blows; a few of the
stalactites fell down with the vibration at their feet, and lastly the
gypsum that formed the doorway was shivered into the chamber in
large blocks, and a bar of iron, sharpened at one end, protruded, as
though it came from the very bowels of the quarry. The concussion
and the fall of the blocks brought down others with them, and one
large mass falling from the top of the archway completely closed the
passage.
Bras d’Acier recoiled at the unexpected obstruction, and, throwing
Louise off, raised a long heavy pistol fitted with a snaphaunce—a
cheap modification of the wheel-lock, much used by the marauders
of the period—and discharged it at the aperture whence the blocks
had tumbled. The report caused a few more lumps to fall from the
ceiling, and when the smoke cleared off, the upper part of a man’s
body appeared at the opening.
‘If that is one of Colbert’s blood-scenters, I have winged him,’ said
Bras d’Acier.
‘Not yet,’ said the stranger, smashing the wall on either side and
scrambling into the vault; ‘not yet, mes braves. Pheugh! I was
obliged to knock a long time before you let me in!’
‘Benoit!’ cried Louise, as she recognised our friend of the boat-mill,
and flew towards him. ‘What good angel brought you here?’
‘No better one than yourself, ma belle,’ replied the Languedocian.
‘So,’ he continued, looking around him, and perfectly undismayed by
the threatening looks of Bras d’Acier; ‘this is an odd place for gallant
officers, like M. Gaudin, to give appointments at or receive visitors!’
‘Where are your fellows?’ asked Lachaussée.
‘Oh, I’m alone,’ replied Benoit. ‘What should I want with fellows?’
‘To bury you if we blow your brains out,’ returned Bras d’Acier.
‘Do it,’ said Benoit, drawing Louise towards him with one arm,
whilst with the other he carelessly dug a bit of gypsum from the wall
with his iron spike, and kicked it towards them. ‘Do it; and to-morrow
my little wife, Bathilde, will go to the Préfet with a note from me,
ordering a search for Louise and M. Lachaussée there, and telling
him where there will be a chance of finding me.’
‘How came you here?’ asked Lachaussée fiercely.
‘Not by your route,’ said Benoit. ‘I know every turn of the quarries
better than yourselves; I ought to do, for I worked in them when the
stone was hewn for the new works at the Gobelins. Do me the
pleasure, ma’amselle, to scramble through this opening.’
The last words were addressed to Louise, who remained close to
her new protector during the hurried parley, but at his bidding
prepared to climb over the debris of the gypsum into a passage
beyond. Bras d’Acier made a movement to intercept her, but was
restrained by Lachaussée.
‘Your turn is yet to come,’ said the robber, grinding his teeth at
Benoit.
‘As you please, mon maître; only think twice about it first,’
answered the Languedocian, as he assisted Louise through the
archway.
‘You have checked us to-night,’ said Lachaussée; ‘it is the first
time, but it is the last; and when we meet above ground we will let
you know it.’
‘Sacré bleu!’ roared Bras d’Acier, rushing forward with a sudden
impulse. ‘I can’t lose our promised wages thus, come what may.
Give up the girl.’
As he flew at the broken archway, Benoit met him with a heavy
blow from his weapon upon his head. To another man it would have
caused instant death. Upon Bras d’Acier it had no other effect than
making him reel back against Lachaussée, who was behind him.
‘Fly, ma’amselle!’ said Benoit; ‘straight before you, towards that
light at the end of the souterrain. I warned you,’ he continued, turning
to the others. ‘You will find as strong arms in Languedoc as in Paris.’
Bras d’Acier was for the minute stunned; he caught Lachaussée
by the arm and leant upon him for support. Benoit took advantage of
the circumstance to put the final coup to his enterprise.
‘When we hunt out vermin,’ he said, ‘it is of no use unless we
destroy their nest. Now, save yourselves as you like; but you shall
not come near me.’
He was already on the other side of the passage, when,
 Bras D’acier and Lachaussée Outwitted

scrambling forward, he stood once more on the broken masses of

the quarry, brandishing his iron weapon. And then, with Herculean
force, he drove it against the side of the chamber which Lachaussée
had pointed out as adjoining the Bièvre. Another and another blow
succeeded, whilst a foaming stream followed the spike every time he
withdrew it, until, weakened by the ruptures, an immense portion of
the gypsum gave way, and, with the roar of a mighty cataract, an
enormous body of water burst through the wall, carrying everything
before it, as it rushed at once, leaping and chafing, to every part of
the chamber.
As the irruption took place, Benoit leaped back to the aperture he
had himself broken open. Lachaussée and Bras d’Acier, in the alarm
of the moment, prepared to follow him, for the lashing water had
already reached nearly unto their knees. But the force of the torrent
drove them back, and as it rushed to the readiest and lowest outlet—
that leading to the large vault—hurried them along with it, washing
down all the barrier that had been made in the archway by the fallen
blocks. By the lamp which still hung from the ceiling, Benoit saw
them whirled through the narrow passage; and the next instant the
water reached the level of the gallery wherein he stood.
‘Now! now, sweetheart, make use of your legs, if ever you did!’ he
cried to Louise, who had remained close to him. ‘We must travel fast
to outstrip it; but, thank heaven, it is all up-hill. Ah—lash away; we
shall beat you yet.’
He addressed the last words to some waves which dashed over
the broken gypsum at his feet; for, in spite of the vast carrières into
which it had burst, the water was rising rapidly, in consequence of
the inequalities of their levels.
Then, seizing Louise, they fled rapidly, hand in hand, along the
gallery—which was altogether a different one from that by which she
had arrived—towards the end of it, where he had taken the
precaution to leave a light, chased by the furious stream that was
hurrying with a noise like thunder after them, coupled with the
crashing and falling of the blocks of limestone, which continually
broke down before its resistless force.
Fast and faster they sped through the labyrinth of vaults—now
crouching along a rough and narrow passage, and now flying over
the hard floor of a large vault, or scrambling across an eboulement of
the gypsum. And louder came the roar of the water, as it seemed
animated in the pursuit by a spirit of life. With the courage which
despair gives to the weakest, Louise kept up with and sometimes
out-stripped her companion, who cheered her as he best could; and
whilst he threaded the intricate way with a readiness that showed his
perfect familiarity with the carrières, promised her a safe asylum
when they left them.
 At last they emerged; not, however, into the pure air, but the damp
and dim obscurity of a vault under one of the questionable dwellings
in the Rue d’Enfer. This street was then inhabited almost entirely by
the low and criminal population, which French statists have named
‘les classes dangereuses.’
Louise knelt in the vault and prayed. Benoit, after a moment’s
pause, reverently crossed himself and knelt by her.
‘Eh bien, ma’amselle!’ said he, when his devotions were finished,
although still out of breath. ‘Here is the worst part of our journey
over. Still——’
And Benoit paused and scratched his head violently.
‘Run into no further danger on my account, good friend,’ said
Louise, guessing at once the cause of his embarrassment. ‘It is
enough that I have escaped the fearful danger of those caverns.
Leave me now; I will find some shelter and employment. A convent
——’
‘The religieuses do not look upon young women exactly as
godsends, unless their pockets happen to be better garnished than I
take yours to be, ma colombe,’ said Benoit. ‘I would take you back to
the boat-mill, and welcome, but that would be the first place to which
they would come to find you. Now I have a friend—Lord forgive me
for abusing the word!—an acquaintance hereabouts, where you
would be safe enough from M. Lachaussée and his band; if they are
not settled by the Bièvre long before this. Mais——’
And Benoit shrugged his shoulders in most eloquent
bewilderment.
‘Who and what is your acquaintance?’ said Louise.
‘Why, he calls himself a professeur, ma’amselle,’ replied Benoit;
‘but what he is just now is not quite so easily told. I have known him
already in the last half-dozen years as juggler, Bohemian, bravo,
cattle-doctor, rope-dancer, archer—ay, and courtier too. But courage!
It is but a trial.’
Louise paused, and Benoit proceeded towards the outlet of the
vault or cellar in which they stood, looking back to his pale charge
when he reached the stairs. The appeal of his honest open face was
irresistible, and Louise followed him. They ascended and found
themselves in a rude corridor. The filth and damp of years was thick
and clammy on the walls; and the dim light that struggled through the
narrow windows, scattered at random up and down, showed long
passages that branched from the palier where they stood, lined with
doors on either side. Benoit, after looking about him for a moment as
if to recall his memory of the localities, struck down the one which
faced them.
They paused at the third door. Benoit raised his hand to knock,
when the sound of a woman’s voice within arrested it. Louise held
her breath and listened earnestly. Benoit turned and looked at her,
as she motioned with her hand that they should return towards the
point from whence they had come. But her guide shook his head,
and, with a sort of desperate grin, knocked loudly with the iron bar he
still held in his hand. The sounds within ceased, and a heavy step
approached the entrance. Benoit repeated his assault on the door.
‘Who knocks?’ said a shrill voice.
‘Tsa tshen pal!’5 was Benoit’s reply.
The tongue in which he spoke was unintelligible to Louise, but the
words seemed to reassure the occupant of the room, who at once
proceeded to withdraw two heavy bolts, and gave admittance to
Benoit and his companion.
The person who opened the door now stood before them. He was
a slender well-proportioned man, in a close-fitting doublet and
chausses of black serge. The sharp and angular features, the saffron
complexion, and large filmy black eye, showed the real gipsy blood.
He looked at Louise with a strange fixed stare, but it was impossible
to read anything in the gaze, either of astonishment or alarm.
‘Who is she?’ he asked shortly of Benoit, in the gipsy tongue.
‘A sister of mine,’ replied the Languedocian. ‘She needs shelter
and concealment for a while.’
‘She cannot have them here,’ was the answer.
‘By the morro6 and the lon7 she must,’ said Benoit calmly.
The man pointed to an inner door, and said—
‘There is a ranee8 there already confided to my safe keeping.
What does your sister fear, that she comes here for safety?’
‘The pursuit of a grand seigneur of the court, who has taken a
fancy to her, and be hanged to him!’ said Benoit. ‘Come, it will be but
for a day or two—perhaps but for an hour. Remember we are
brothers, and the law of the Rommany binds you to help me.’
‘True,’ said the gipsy. He advanced towards Louise and,
addressing her in French, told her she could remain where she was
so long as it suited her convenience, but on one condition.
‘Name it,’ said Louise.
‘To pay no heed to what does not concern you,’ returned the other.
‘I will give you a companion, who, if she amuses you as she has
entertained me, will make the time pass pleasantly enough.’
So saying, he opened the door leading to an inner room, and
beckoned her to follow.
From the squalor of the outer apartment Louise Gauthier was little
prepared for the scene which presented itself. The room into which
they passed was small, but furnished with a richness and elegance
that would have fitted a royal boudoir. The walls were painted with
flowers, and cupids sporting amidst them. Rich curtains of damask
almost covered the single window. Piles of cushions, fauteuils of
velvet and ormolu, costly tables, and a marble chimney-piece, with
its gay pendule, almost dazzled poor Louise; and it was not until she
had taken a rapid inventory of all these that she found the room
contained an inmate. A young girl, richly dressed, was half-sitting,
half-lying on a divan, in the darkest corner. It was Marotte Dupré—
the actress who had vainly implored Sainte-Croix, but a short time
previously, to rescue her from the Marquis of Brinvilliers. But she had
apparently become reconciled to her abduction, or feigned to be so,
for, starting gaily to her feet and springing forward, with a merry
laugh, she exclaimed—
‘Welcome, mon preux gardien! You have brought me a companion
of my own sex, to keep me company until the Marquis returns from
the Tuileries. Did you think I wanted one whilst you were here?’
And she threw a witching glance from her dark eye upon the
gitano, who, taking her hand, kissed it passionately.
‘She is a young girl, sister to a friend of mine,’ returned the man;
‘who seeks an asylum here for a time.’
‘We welcome her to our court,’ said the actress, with mock dignity,
extending her hand to Louise. ‘Sit by us, and tell us of your wishes,
hopes, sorrows—everything about you, in fact. And you, my cavalier,
dismiss that gentleman with the round face, who is gaping over your
shoulder. We would be alone with our new friend.’
The gipsy, thus addressed, turned to Benoit, and a rapid
conversation in the dialect of his tribe ensued between them. When it
was over, Benoit took Louise aside, and saying, ‘I will find a safer
place for you than this—fear nothing, I will return soon,’ left the room,
in company with the Bohemian.
‘Who is the other lady?’ asked Benoit as they quitted the
apartment.
‘I don’t know, nor do I much care,’ replied the man. ‘She was
brought here by the Marquis de Brinvilliers, who was sent for to the
Tuileries almost the instant he arrived.’
‘Is she here against her will, then?’
‘Mass! I don’t know what to make of it. It seems that the Marquis
was nearly being set upon, in mistake, by his friend, Captain de
Sainte-Croix, for carrying her off.’
A hurried exclamation escaped Benoit’s lips.
‘Whereabouts?’ he asked eagerly.
‘Between the Captain’s lodgings and the Hotel d’Aubray, you may
be sure,’ was the reply.
Benoit heard no more; but hurriedly bidding his acquaintance
farewell, left the house. How he succeeded in his enterprise has
been already explained.
As the door of the room closed the manner of Marotte Dupré
entirely changed. Hastily and breathlessly drawing Louise to the
window, she whispered—
‘I am kept here by force and treachery. The gipsy is a creature of
the Marquis of Brinvilliers, who has carried me from the theatre. He
is absent for a while; and I am trying the force of my fascinations
upon my gaoler, the more readily to compass the means of escape.
From whom do you seek asylum here?’
‘I know not,’ said poor Louise, ‘who is my enemy. I do not believe
that Gaudin would ever——’
She was interrupted by Marotte. ‘Gaudin de Sainte-Croix?’
Louise assented.
‘Fear the worst,’ said her companion. ‘If Sainte-Croix is your
friend,’ and she laid an ironical expression on the word, ‘you are
indeed deserving of pity.’
Louise was about to speak, when a clamour in the street below
attracted their attention. Marotte uttered a cry of joy, and pointing
down the Rue d’Enfer, of which the window commanded a view,
cried—
‘Look! look!—we are saved!—we are saved!’
Louise followed the direction of her finger, and saw a heavy and
magnificently decorated carriage, which, with its attendant lackeys,
had just drawn up at the miserable door of a house exactly opposite
to the one in which they were. A beautiful young woman, in rich
costume, descended from it, and entered the house. Marotte Dupré,
with clasped hands, followed her movements with intense anxiety.
‘There is not a moment to lose. O mon Dieu!’ she exclaimed as
she hastily drew some writing-tablets from her bosom, and, tearing
out a leaf, wrote a few lines upon it with marvellous rapidity. ‘Now—
now!’ she continued, rolling it up into a ball. ‘Open the window!’
‘Alas!’ returned Louise, as she tried the hasp of the heavy
casement; ‘it is secured. I cannot unfasten it.’
‘I have it!’ cried Marotte, whilst a sudden inspiration lighted up her
pale features; ‘my ring will open the glass.’
And drawing a diamond ring from her finger—the rich gift of some
habitué of the Théâtre du Temple—she drew it around the pane, and
then with a gentle pressure forced the glass to yield without. Had
they broken it, the sound would have alarmed the gitano in the outer
room.
Their chamber was on the entresol; the street was narrow, and the
lackey of the carriage was nearly on a level with them. Marotte
passed her white arm carefully through the opening, and threw the
writing towards the lackey, accompanying the action by a low ‘Hist!’
But it was not heard; and the little note, falling short of its aim, lay in
the mud of the street, yet still perceptible in the gleam of the lamps
on the carriage.
He was on the point of driving away, when a slight call from
Marotte attracted his attention. With some little difficulty he at last
perceived the note on the ground, and got down to seize it. Its
contents seemed to surprise him; for, after reading it, he passed into
the house which the lady had just entered. Marotte followed his
movements with feverish anxiety, and Louise caught the infection.
‘Who is that lady?’ she asked; ‘and what was the import of your
note?’
‘It is Madame Scarron,’ returned Marotte; ‘the widow of my best
friend. She is now in high favour at the court. Oh! she is so good—so
kind. I wrote to implore her assistance to deliver us from this house;
and she will do it.’
At this moment the gitano returned. Marotte, with the skill of her
calling, rose to receive him. All trace of anxiety had disappeared
from her face, and she was radiant with smiles. Advancing to the
man, she exclaimed—
‘Bien, my gallant protector! You will not leave us to ourselves,
then?’
The gipsy’s dull eye dilated, and the large pupil flashed with a
strange light as he looked at the beautiful woman before him.
‘I cannot stay without and know that you are here,’ he replied. ‘I
love to hear you speak and to look at you.’
Louise shuddered at the tone in which he spoke. Marotte had
risen; and, while she stood half-turned from the window, threw a
rapid glance into the street. The next moment she seized a
mandoline that lay on a console of marble, and burst into a gay and
jovial song, keeping time to the measure with graceful and wild
movements. The gipsy listened with wide open eyes, and lips apart.
He had no sight nor ears but for his bewitching prisoner and her
song. Louise comprehended Marotte’s object. It was to cover the
noise of footsteps and voices on the staircase.
As she expected, a knock sounded at the door of the outer room.
The gipsy, with a half-spoken curse, turned his head in the direction
of the interruption, but did not stir from the spot as Marotte finished
her song.
‘It is Benoit returned,’ said Louise.
‘I hope it may be,’ said the gipsy. ‘I best like mademoiselle here to
be alone.’ And he left the room, without closing the door.
Louise’s remark was made in so natural a tone, that no suspicion
entered his mind. He did not even pause to ask who knocked, but
ushered in the stranger at once.
 The tall and beautiful lady whom Louise had seen step from the
carriage entered the apartment, followed by four stout and well-
armed lackeys.
The gipsy, with the quickness of his tribe, saw his error; but it was
too late to repair it. Marotte and Louise, who had watched with
intense eagerness the opening of the door, rushed from the inner
room, and the former, throwing herself at the feet of Madame de
Maintenon (for Madame Scarron had lately received the lands and
title of Maintenon from the King) seized her hands, and kissing them,
poured forth mingled thanks and prayers. With that winning and
grave gentleness which belonged to her, the lady calmed her, and
addressing herself to Louise, said—
‘Marotte’s note tells me you too are in danger, and need a friend
and a refuge. Come with me, both of you.’
The gitano saw that resistance was useless. The lackeys clutched
their long batons in a style that showed it would take but little
pressure to make them use them. With all the suppleness of a true
Bohemian, he was profuse in his apologies to Madame de
Maintenon, to Marotte, and to Louise, and asked their witness to the
kindness and civility of his treatment towards them.
Madame de Maintenon cut short his protestations with a
contemptuous gesture, and bidding her lackeys mark the number of
the house, and the appearance of the gipsy, left the room,
accompanied by her two protegees.
Then mounting her carriage, she placed them opposite to her, and
giving the order to her attendants, ‘A Vaugirard’—they drove off
rapidly along the Rue d’Enfer.
 CHAPTER XI.
MAÎTRE PICARD PROSECUTES A SUCCESSFUL CRUSADE AGAINST THE
STUDENTS

There are very few portions of Paris which have retained their
physiognomy of the moyen âge with less change than the Quartier
Latin. The narrow tortuous streets have undergone little alteration
since they were first built; few new thoroughfares have intersected
the dense cluster of tall gloomy houses that bound them; in fact, as
far as the line of the Rue des Fosses, whereon the ramparts were
still partly situated at the time of this romance, everything has
remained nearly in the same state for centuries. The humble nature
of the articles exposed for sale in the different shop windows, and
the small prices attached thereunto, were the same formerly as now.
For the denizens of this learned pays have been, time out of mind,
the members of the different schools; and poverty and clerkship ever
wandered hand-in-hand together about its venerable streets, or
ruminated in its cloistered quietudes.
Yet have not the livelier parts of the city, most known to passing
sojourners, a fiftieth part of the interest which is attached to the dirty
old quartier wherein our scene now passes, although money has
ever been the scarcest article to be found within its limits, since the
days when the ‘Cloistre St. Benoyt’ and ‘Hostel de Clugny’ were
newly erected buildings. We ourselves have lived merrily therein, in
small cabins at the extreme summits of houses, where carnival
irregularities drove us to restrict our expenses, literally to a few sous
a-day—when three hard eggs, some bread, and a cruet of wine
formed a jovial dinner; and a pair of bright eyes could sometimes be
found to laugh in company over such an humble meal as this, and
desire none better. Certainly if such a thing as disinterested affection
exists in the world—which at times we feel inclined to doubt—it is to
be found in the Quartier Latin. And then its associations! It conjures
up no visions of English parvenus, vulgar tourists, and Meurice’s
Table d’Hôte; you would not find a Galignani’s Messenger, or a cake
of Windsor soap throughout its entire range. No; all your thoughts
would be of doublets and pointed shoes—of rapiers and scholars of
Cluny; of anything, in fact, the reverse to what would suggest itself
on the other side of the river.
But our hobby is fairly running away with us over a course we
have before traversed; we must return once more to that which has
long past. In 1665 there stood at the corner of the Rue des
Mathurins and Rue de la Harpe, in the very heart of this venerable
division of Paris, the shop of ‘Maître Picard, chapelier.’ It was a
modest edifice, with one large window, in which were displayed hats
and caps of every age and style. For the students then, as now, held
prevalent fashions in great contempt, and dressed according to their
whims and finances, or in whatever they contrived to capture in night
skirmishes from the persons of the bourgeoisie.
To advertise his calling Maître Picard had erected a sign in front of
his house, over and above the intimation just mentioned. It was a
huge hat of red tin, gaily adorned with gilt edges, from which, on
certain festivals, bright ribbons floated in the draughts of wind that
whisked round the corner of the streets, to the great admiration of
the passers-by in general, coupled with wonder that it had remained
so long unmolested in such a precarious locality as the
neighbourhood of the Hôtel Dieu and Sorbonne. But this was
because it was a little too high up for them to clutch it; a few feet
lower, and long ago, Maître Picard would have been horrified some
fine morning at perceiving his sign had vanished: for, as we have
seen, the rotund little patrol was one of the marching watch; and the
same antipathie vouée which the student of the Quartier Latin at the
present time exhibits towards the Sergent de ville, existed quite as
forcibly two hundred years ago between the scholar of Cluny and the
Garde Bourgeois.
Since the rude treatment which Maître Picard had received from
the hands of his sworn persecutors at the ‘Lanterne,’ in the Rue
Mouffetard, he had neglected no opportunity of interfering with their
enjoyments, and various had been the schemes which Camille
Theria and Phillipe Glazer had planned for revenge. But they had all
failed; especially every enterprise against the hat, to which their
designs were principally directed. For they knew that the gigantic
metal sign was the pride of Maître Picard’s heart, and the glory of the
Rue des Mathurins—that its abstraction would crush his public spirit;
and that as such, no stone should be left unturned in effecting its
destruction. And indeed, as far as that went, they tried to carry out
their intentions in a very literal spirit, as the broken state of the rude
pavement below, and several large dents in the enormous hat
above, fully testified.
At last, by what appeared to be a fortunate chance for the
marauders, Jean Blacquart, the Gascon, took a lodging on the upper
floor of the house; being principally led to such a step by a feeling of
gratitude for the timely intercession of Maître Picard, when his fellow-
students were about to hang him. The instant this became known, it
was resolved that advantage should be taken of his occupancy to
carry off the hat. Blacquart, at first, plumply refused to assist in such
an irregular proceeding; but after Theria had assured him that in the
event of his non-compliance he would be dropped in the Bièvre, or
slowly roasted before the fire of the cabaret in the Rue Mouffetard,
the Gascon assented. A particular night was fixed upon for the
attempt, and a meeting of the ‘Gens de la Courte Epée’ called at a
tavern in the Rue des Cordeliers—the site of the present Rue de
l’École de Médecine—to effect this object.
That night Maître Picard, not being on guard, resolved upon
indulging in potent drinks and toothsome viands in his little parlour
behind the shop. He had closed his wareroom at an early hour; and
having invited Jean Blacquart to join him—for the Gascon was not of
the marauding party, although he had an indirect part to perform in
the outrage—was discussing hot wine with his lodger a little after
curfew, and listening to his rhodomontades connected with his
profession and deeds and actions generally.
Jean had told a great many narratives about encounters he had
won (which had never taken place) and enemies he had killed (who
were still alive), increasing the marvels of each with each cup of
wine, until the fulness of his heart, coupled with his fear of being
mixed up in the affair, led him to inform Maître Picard of the intended
attempt upon his hat to be made that very evening. The apartment
occupied by the Gascon was at the top of the house; it had formerly
been a granary—such as may still be seen in Paris—and outside a
small but strong wooden crane was fixed, hanging over the doomed
sign. To the rope of this a loop was to be made, and then Camille
Theria, who had taken the danger and the glory of the enterprise to
himself, was to be hauled up until he came within reach of the hat,
which he was to take from its fixings and bear off in triumph.
The first feelings inspired in the breast of Maître Picard, as he
heard this bold scheme unfolded, were those of fright; the next
partook largely of revenge.
‘How many will there be?’ he asked.
‘Oh! a hundred,’ replied Blacquart. It was the ‘Gascon’ for twenty.
‘Bless me!’ said Maître Picard; ‘a great number—an awful number.
You have told me to-night that you once fought a score yourself; but I
don’t think you could face so many.’
‘I don’t think I could,’ said Blacquart. ‘I will try, if you please; only if
my courage led me into any rash attack, I might be fatally wounded,
and then what a scrape you would get into.’
‘True—true,’ said Maître Picard, wiping his face, and taking a long
draught of wine; ‘and it is the same with me. My frame is rather
round than large; but there is a great spirit at work within it, which I
cannot always command. I will call together the Garde Bourgeois.’
‘Will not their assembling alarm the others,’ said Blacquart.
‘Not at all—not at all,’ returned the chapelier. ‘We will have them
come by twos and threes, and hide in my shop.’
‘Excellent!’ said the Gascon.
‘Will you summons them, then?’ asked Maître Picard.
‘I think not,’ said Blacquart; ‘although they know me as a daring
and gallant coadjutor. My appearance in the streets might provoke
suspicion with any of the students I might meet.’
To the joy of the Gascon, who thought inside the house the safest
position with such an event about to come off, Maître Picard rose,
with some trouble, from his settle, and, puffing and blowing, started
out to summons his brother-guards. The Gascon remained to finish
the wine; which, having done, he felt so nerved that he sang bold
and warlike songs to himself, and then drawing his sword fought
imaginary duels with nobody, and slaughtered many chimerical
adversaries, concluding from mere want of breath, in high good
humour with himself and his prowess. He was yet panting from his
late courageous exertions, when his landlord returned with a few of
his brethren in the guard, and these were speedily followed by
others, who were stationed in the shop and parlour. Their presence
increased the Gascon’s valour to such a pitch that, when he saw
they had all arrived, he even offered to go and fight the students
himself. And had it not been for one of the guard, who, from sheer
wickedness, recommended Jean to do so, to his extreme terror,
there is no knowing to what lengths he might have gone, or what
wonderful actions he might have committed.
The curfew sounded; the lights disappeared in the Quartier Latin,
as the shops were closed, and the glimmer of the lanterns alone
illumined the thoroughfares. Maître Picard disposed the Garde
Bourgeois for a proper sortie, and then went up to Blacquart’s room,
accompanied by the student, whom he placed to keep a look out at
the window.
‘I think I hear them coming,’ said Jean, after he had been a short
time at his post.
‘They are marching in order,’ observed Maître Picard, with
breathless attention; ‘the students have mustered strongly.’
‘No; it is the Guet Royal,’ returned the Gascon, as the night-patrol
came round the corner of the Rue de la Harpe.
‘I think we had better call them in, too,’ said the affrighted little
hatter.
‘No—no,’ answered Jean; ‘the disturbance and the clank of their
arms will alarm the others. Beside, is there not enough to protect
you? You have me.’
‘Very true,’ said Maître Picard. But he said it as if he did not think it
was. However, he was resigned to his fate, and the Guet Royal
passed along the Rue des Mathurins, turning off towards the
Sorbonne.
‘They will not be back for half an hour,’ murmured Maître Picard,
as the last cresset disappeared round the corner.
‘Then they will be too late for our gentlemen,’ said the Gascon; ‘for
I hear them now coming in reality.’
In effect he was right. The students had evidently waited until the
patrol had passed, knowing they would thus be for a certain time
uninterrupted, and they now came quietly in front of the house. One
of them, whom Blacquart knew to be Camille Theria, clapped his
hands, and the Gascon replied to the signal.
‘They wanted to hang me the other night,’ said he; ‘but I mean to
succeed better with them than they did with me. And yet,’ he added
as he looked below, ‘there seems to be a great many of them.’
‘What are you waiting for?’ asked the chapelier.
‘Me? oh! nothing—nothing,’ said the Gascon. His blood was
ebbing down rapidly every instant. ‘Only I was thinking if you were to
make a speech from the window, and forgive them, how they would
esteem you; and perhaps it would save bloodshed.’
Theria, who was below, repeated the signal.
‘Lower down your rope,’ said Maître Picard, who was peeping over
the parapet.
‘Upon my honour, I don’t much like to do so,’ said Blacquart, as his
last atom of heroism evaporated.
‘If you don’t let the line down immediately, I will give you into
custody below as an accomplice,’ said the bourgeois, in wrathful
accents.
Another impatient signal from Theria was heard; and poor Jean, in
a terrible fright, proceeded to unwind the cord from its winch; whilst
the hatter kept looking just over the parapet to see what was going
on.
‘It is almost close to the ground,’ he said. ‘Now it touches it; and
that rascal Theria has got hold of the end. He puts his foot in it.
Huzza! huzza! now wind away; he is ours.’
And the rotund little man delivered himself up to the performance
of such joyful gymnastics, that at last his hat fell off and tumbled into
the street. A student, who saw it fall, thought it was Theria’s, and
cramming his casquette into his cloak-pocket, put it on, until the
other should come down.
‘Now, stop! for your life!’ said Maître Picard to the Gascon, who
kept winding away in great trepidation, but saying through it all that
he was easily accomplishing the work of six men. ‘Now stop! he is on
a level with the sign; let him remain there.’
Jean implicitly obeyed; the catch fell into the toothed wheel, and
he came to the window, whilst Maître Picard hurried down stairs very
rapidly, by reason of his gravity, and told his fellow police that it was