Officials, Industry Discuss IPR In Relation To Economy And Society

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Two top international organisations in Geneva are working to adapt to trends in global intellectual property systems with an eye toward contributing to a positive economic impact, officials told a private sector conference this week. But they heard a complex message about the role of IP in addressing public policy concerns.

Intellectual property is “very much a changing field,” said World Intellectual Property Organization Director General Francis Gurry. “It leads to the conclusion that IP is about change,” and “acts as an agent of change in our society.”

Gurry was speaking to the Licensing Executives Society Global Technology Impact Forum, held 23-25 January in tandem with the Center for Applied Innovation Invent For Humanity Technology Transfer Exchange Fair. The fair featured a variety of practical inventions aimed at poor populations in developing countries, such as new ways to roll sanitised drinking water to destinations, or simple handheld solar electric devices.

“This is bringing together a whole lot of actors and we are working to engage” with those actors, Gurry told Intellectual Property Watch afterward. “Because the problems we face require concerted action” on the part of all.

WIPO is a “service provider to the global economy,” he told the meeting, working on global patent and trademark applications. It also is a forum for work on the global legal framework, he said, mentioning the upcoming treaty negotiation on audiovisual performances, as well as “mature” discussions on treaties for print-disabled readers, broadcasters, industrial design, and traditional knowledge, traditional cultural expressions and genetic resources. In addition, WIPO helps coordinate the global IP infrastructure with tools like PatentScope, and works to increase the participation of developing countries in the IP system as well as their use of the system.

The nearby World Trade Organization, which hosts the 1994 Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), is increasingly considering trade in IP rights including the value of what is traded, said WTO Deputy Director General Rufus Yerxa. This can be challenging in a system based on the difference between goods and services, he said.

At WTO, there is becoming less of a clear line between what is exported or imported by countries and more about the global value chain, he said, such as within and between companies, he said. This was supported in relation to technology transfer by Thaddeus Burns, senior counsel for intellectual property and technology policy at General Electric, who said it no longer works in a North-South manner. Rather there are global supply chains, and technology flows in many different directions. “The key is to make sure it gets where it is needed,” he said, so the policymakers’ role is to create the enabling environment for that.

Yerxa said that TRIPS was mainly created with a focus on IP enforcement and has had a positive impact by triggering the strengthening and harmonising of the IP system. But it also has drawn attention to other policy areas, such as development, public health, food security and access to knowledge. He noted efforts by some members to create linkages of TRIPS to other issues, such as the Convention on Biological Diversity.

He said that there has been “considerable tension” over some issues like TRIPS and public health, and that debates are being seen in other areas such as climate change, where commercial rights and country obligations need to be worked out.

Gurry painted innovation as critical to addressing global economic and social concerns and taking society “to the next level,” compared with a lack of innovation, which would mean the problematic status quo. “Innovation is the mechanism that society uses to overcome its problems,” he said.

IP as Part of the Solution

David Koris, chairman of the Commission on Intellectual Property at the International Chamber of Commerce, said the recognition of IP’s contribution to the economy is being seen as more discussions about IP are being heard among financial analysts. He also said that in regulation, industry looks for stability, clarity and simplicity, with faster court decisions and easier patent filings.

Alan Lewis, immediate past president of the Licensing Executives Society International, said there must be a profit motive for innovation to occur, and that “education” must occur to counter the view among some that “IP is a barrier to access.”

The “law of unintended consequences applies” when it comes to IP rights, he said, but overall such rights are valuable to society.

Thaddeus Burns said that “in Geneva, you hear a lot about IP as a barrier” to technology transfer. But a panel he was moderating suggested that if IP is a factor at all, it is “far down the list,” after issues like corruption, tariffs and non-tariff barriers, discriminatory regimes favouring local companies, and import substitution regimes.

Barriers to technology diffusion lie in trade distorting factors, he said, but if education does not occur among policymakers, “then IP is going to get pinned” for being the problem. What does need to happen in relation to IP is to create a system for developing countries to develop their own technologies. And for that, “IP is the linchpin,” Burns said. “It’s going to be the catalyst.”

Yerxa agreed with the industry view, saying it is important in policy debates to challenge the assumption that IP rights require a barrier to diffusion of technologies. There are “a lot” of examples of societies that have not had good IP protection and that do not see new technologies flowing in. Finding the balance of recognising the need for and rewarding innovation, and taking into account public policies, is “a long, continuous struggle,” he said.

Some speakers called for new terminology and new ways of looking at the transfer of technology, including more harmonisation of laws governing transfer.

But the fusion of IP and public policy is leading to some novel ideas with benefit to society.

WTO IP Division Chief Antony Taubman summed up a series of panels, and suggested that it may not be useful to say that everything fits in a new market mechanism, but rather to look at specific activities and learn from those. For instance, there are IP exchanges arising, notably IP Exchange International (IXPI) in Chicago (IPW, Finance, 15 April 2011), which received strong backing in December, and one announced this week between groups in China and the United States. Other examples are the Association of University Technology Managers Global Technology Platform (GTP), and the new WIPO exchange for neglected disease licences called Re:Search.

On a global market for IP, Taubman said, “’My message: Watch this space.’” He predicted there will be new models, such as in green technologies and public health.

Economists’ View

Meanwhile, the chief economists of WIPO and the European Patent Office told the meeting that IP policy and public policy have become intertwined.

“IP rights have an important effect on economic performance,” said WIPO Chief Economist Carsten Fink, who added that more analysis of this needed. “IP questions have become public policy questions. There is a need for policymakers to have empirical evidence” on which to make decisions.

WIPO has started a World IP Report series, which will follow a different theme each year, he said. The WIPO economist’s office also does work for committees and under the WIPO Development Agenda is conducting national studies on the impact of IP rights on innovation and economic development.

Jayashree Watal of the WTO IP Division said economics has long been a part of the WTO, and that there is a growing community of economists with which WTO is now trying to collaborate. She said WTO, WIPO and the World Health Organization are working on a trilateral study on innovation and access to medical technologies.

Economists are studying the explosion in patenting since the 1980s and before, said Fink, and now there is an increasing concern among economists that at some point strategic patenting becomes a barrier to innovation as the landscape gets crowded. But there are new benefits to the patent system that were not appreciated 20 years ago.

EPO Chief Economist Nikolaus Thumm said IP offices are looking at the policy side of the IP system, both the innovation side and the knowledge transfer side. Mostly it is the innovation side, with the notion that “the market will work it out” if the IP system is left to operate without over-regulation.

But Thumm said this “sounds kind of odd,” given that IP itself is already a market intervention (as it creates a monopoly). “There seems to be a lot of friction in the system already,” he said, and it is important to understand the policy side too.

He said economists are looking at where the growth in patent filings is coming from, as they are on the rise despite the economic crisis. Much of the growth is in Asia, he said, with Europe staying even.

On patent quality, he said many people equate that with value, but there may be different interpretations of what is a valuable patent. For instance, it might be asked whether it helped many people in society.

In a separate panel dedicated to IP valuation, discussions were on mechanisms used by leading firms in California’s Silicon Valley and elsewhere by companies buying, selling or investing in patented ideas. There were a variety of methods in use by companies.

Watal said new research is looking at different types of developing countries and finding that they are not all the same, with middle income countries having more to gain from the IP system. There also is evidence that most productivity growth is taking place due to foreign patent filings. Only a small number of countries have innovation that exceeds what is coming in from outside, she said.

New US-China Patent Index

Separately, at the event the Ocean Tomo ITPE 200 Patent Index was announced. It claims to be the “world’s first index based on the value of both US and Chinese intellectual property.”

The index is made up of the top 100 companies that own the most valuable US patents relative to their book value and 100 companies that have the most valuable Chinese patents. Both sides consider that “IP represents a major bridge between the economies of China and the United States and this collaboration, the first in a series of initiatives, will enhance investor understanding and help support the creation of a global market for intellectual property rights investment,” they said in a release.

William New may be reached at wnew@ip-watch.ch.

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