State Department, Congress Unhappy with World Intellectual Property Organization Sending Computers to Iran, North Korea

Earlier this year the World Intellectual Property Organization (WIPO) came under fire for sending computers to North Korea in violation of United Nations sanctions.  See WIPO Embroiled in North Korean Computer Deal.  Now, the international agency charged with monitoring and implementing international treaties relative to intellectual property, including the extraordinarily popular Patent Cooperation Treaty (PCT), is under fire again.  It seems that WIPO not only shipped computers to North Korea, but also shipped computers to Iran as well.

Congresswoman Zoe Lofgren (D-CA) called this latest WIPO transgression “an outrage.”  At a hearing where Deputy USPTO Director Teresa Rea was a witness, Lofgren went on: “Really, it’s an outrage that WIPO would be transferring material, violating the sanctions that we have to North Korea and Iran…  I mean it’s basically, it’s funded by U.S. inventors.”

Lofgren isn’t completely correct, but close enough.  According to the WIPO FAQ section on its website, “WIPO generates nearly 90% of its annual budget through its widely-used international registration and filing activities. The remainder comes from contributions by Member States.”

With 48,596 international patent filings during 2011, the United States is the largest user of the PCT system, which is implemented by WIPO.  There are certainly many other countries that use the various international filing mechanisms, but the next closest in terms of PCT for 2011 were Japan (38,888), Germany (18,568) and China (16,406).  There is no doubt that the United States substantially funds WIPO activities.

Testifying before Lofgren’s House Committee Deputy Director Rea explained the leadership USPTO was “disappointed” when they learned of the WIPO transfer of computers to North Korea and Iran.  Indeed, it would be hard not to be disappointed.  The leadership at the USPTO knows their WIPO counterparts well.  I know some of the WIPO players to varying degrees myself.  They are good people committed to a worthwhile mission. Yet something has gone terribly wrong.

Before proceeding let me just say that I do not believe WIPO to be a rogue branch of the United Nations as many news outlets are portraying them.  Neither do I believe the various Members of Congress, both Republican and Democrat, when they say that this is a shocking action that demonstrates malice.

Having said that, there is no doubt that this looks bad and fits into a narrative about the United Nations believed by many.  I myself find it practically unbelievable that the likes of China, Cuba, Libya and Saudi Arabia are members of the UN Human Rights Council, but this WIPO story is not of the same sort.

On July 5, 2011, Charles Krauthammer, the Pulitzer Prize winning conservative columnist who is a prominent commentator on FOX News summed it up this way:

This is an insane proposition what happened. Here is a U.N. agency working against itself, giving this stuff to rogue states. We’re not sure why – either negligence, stupidity, perhaps malice. But that is how the U.N. runs entirely, either negligence or stupidity or malice.

Frankly, it is hard to argue with Krauthammer’s characterization, but I disagree.  The folks at WIPO are not at all stupid, and it is impossible for me to believe there is any malicious intent.  Unfortunately, negligence doesn’t capture this WIPO story either.  It seems to me that this story one best explained by a bunch of well intended individuals who severely under estimated politics of the issue.  They were for lack of a better word — naive.

It certainly makes sense to believe that WIPO was either negligent, malicious or stupid, and there are facts that easily tend to support that analysis.

FOX News initially broke the news story relating to clandestine efforts to ship computers to North Korea in violation of several UN Resolutions, including UN Security Council Resolutions 1718 and 1874.  There was also a trail of memos back and forth detailing that WIPO was aware of the issues and still nevertheless choose to proceed.

As the story goes, Moncef Kateb, who is President of the WIPO Staff Association, wrote a memo on March 22, 2012, which starts off “Strictly confidential.”  I guess that is the universal code for please leak this as soon as possible!  Regardless, the memo explains:

The Staff Council was informed that WIPO is currently implementing a project with the Democratic People’s Republic of Korea (DPRK) that is allegedly in violation of UN Security Council Resolutions 1718 and 1874.

Under such project, computer hardware and other electronic equipment have been purchased and shipped to the DPRK’s Invention Office in Pyong-Yang…

Based on the information gathered by the Staff Council, Member States have not been consulted and have no knowledge of this project.  Thus, they were not given an opportunity to review or object to it…

The Staff Council is extremely concerned by the fact that WIPO staff may be implementing a project in violation of two UN Security Council Resolutions related to Sanctions against the DPRK and possibly in violation of staff’s own international obligations, and their national laws.

What a mess! Not only did WIPO sent computer to North Korea but there were internal efforts in writing trying to dissuade those efforts.  This is how those not familiar with this “obscure UN agency” come to the conclusion that there was malice involved, which given the history of the United Nations does have a historically accurate ring to it.  For more memos and e-mails see WIPO Embroiled in North Korean Computer Deal.

Obviously, FOX News and increasingly other news agencies seem to have some well placed informants on this story. Regardless of whether WIPO meant any harm, the optics are terrible, and Now the United States Department of State is involved.

FOX News online reported:

“The State Department first became aware of a WIPO development  project in Iran in early May 2012, while conducting a review of all WIPO projects in countries under U.N. Security Council sanctions,” the spokesman said. “We have made several inquiries to the WIPO Secretariat and requested any related documentation.”

The spokesman added that State is now “working with like-minded countries” to press WIPO’s director general, Australia-born Francis Gurry, to “conduct an independent, external fact-finding exercise into past WIPO projects in countries under [Security Council] sanctions” presumably to discover if there are further unpleasant surprises in store, and also to “ensure future development projects are properly reviewed prior to being approved and implemented.”

See State Department investigating UN agency.  The FOX News report goes on to suggest the State Department has had several conversations with Gurry and the U.S. will work “to put in place policies that provide greater accountability and transparency at WIPO.”

Is WIPO evil or subversive? No.  WIPO is altruistic and wants to help third-world and developing countries economically succeed. In fact, WIPO spreads the gospel of IP and has been responsible for many millions of people coming out of poverty as the result of economic growth spurred forward through efforts lead by WIPO.  The WIPO formula works, but those having decision making authority need to keep their eyes open to broader geo-political issues.

Whether WIPO meant to do anything wrong or whether they did anything wrong is completely immaterial.  By pushing forward sending computers to North Korea and Iran, WIPO has brought needless international scrutiny onto the Organization.  This will only make it more difficult for WIPO to fulfill its mission moving forward, and will make many question the motives of the Organization.

Intellectual property ought not be a political issue, but it frequently is one.  There are those who simply hate exclusive rights despite that fact that the only objective evidence shows that those countries with strong rights have the strongest economies, the most jobs and greatest quality of life.  While it is admirable to work to raise awareness of these important truths in third-world and developing nations, it is reckless and naive to engage in such activities in pariah nations.

I have no doubt that the good people at WIPO will right the ship and continue on with their good work.  As long as there are no more surprises, this will pass and the world will move on to more important matters.  In the meantime, during the slow summer news cycle, this will likely be fodder for talk radio and Cable TV, perhaps again coming to the forefront again during the sleepy news days of August as Congress is on vacation and the Presidential race jockey’s to heat up leading into Labor Day.