US Industry IP Index Released: US Advances, India Shows Leadership, EU, Singapore Near Top

The leading United States industry association yesterday released its annual International Intellectual Property Index, ranking countries on their progress in protecting US intellectual property rights. The ranks show the US advancing in the area of patent protection, while retaining the top overall score; India strengthening IP and charting a course for other developing countries; and EU countries dominating the higher scoring bracket with Singapore first on patent protection. 

The US Chamber of Commerce Global Innovation Policy Center (GIPC) released its 7th International IP Index yesterday entitled, “Inspiring Tomorrow [pdf],” which “creates a roadmap for countries that aspire to foster economic growth and global competitiveness through stronger IP,” a Chamber press release said.

The research for the index was conducted by Pugatch Consilium, and the report was authored by Meir Pugatch, founder, and David Torstensson, partner of Pugatch Consilium.

Over the last year, IP has taken “center stage,” highlighted by the “ongoing trade dispute between China and the U.S. [that] brought much-needed attention to long-standing challenges that are holding back global investment in IP-intensive industries,” it said.

While global progress has been “slow and inconsistent” in strengthening IP standards, the release said that there have been key areas of growth, but also threats, such as the use of compulsory licensing by some countries. “Notwithstanding,” it said, “there is evidence that the world is becoming an IP believer, inspired by the possibility of a better tomorrow.”

The overall ranking sees the US, UK, several European countries, Japan and Singapore at the top. Particular progress to note is that the US rose in rank from 12th to 2nd in the area of patent protection, Mexico and Argentina advanced showing competitiveness in their region, while India and Brazil also advanced showing leadership for the BRICS (Brazil, Russia, India, China, South Africa) and other developing countries.

A “Roadmap” to Stronger IP Protection

The index benchmarks the IP framework in 50 economies, representing 90 percent of global GDP. It evaluates IP infrastructure based on 45 indicators in 8 categories of IP protection: patents, copyrights, trademarks, trade secrets, commercialization of IP assets, enforcement, systemic efficiency, and membership and ratification of international treaties.

The report concludes that its data on IP “continue[s] to point to a direct linkage between the strength and enforceability of a country’s IP rights and its ability to capitalize on domestic innovative and creative capacity, as well as to access the world’s innovations.”

One aspect of the “roadmap” to stronger IP that the Index provides is its section on trade agreements, which highlights the example of the strong IP provisions in the recently completed United States-Mexico-Canada Agreement (USMCA). The press release said that the USMCA has “laid a foundation for 21st century IP protection in free trade agreements.”

“Intellectual Property at its core is a means to an end, and the end that we are seeking is innovation and creativity. Intellectual property laws, when they are strong, reliable and predictably enforced, drive [and] really enable investment in innovative and creative sectors,” Patrick Kilbride, senior vice president of the Chamber GIPC, said in a 7 February press briefing on the release of the index.

US Shows Progress, But Should Not Be “Complacent”

“While the United States previously ranked 12th in patents due to ongoing unpredictability around the validity of patents,” the Index explained, “the U.S. is now tied for 2nd place alongside a number of EU countries and Japan. The improvement is a result of U.S. Patent and Trademark Office (USPTO) reforms, which should help to reduce unpredictability in the patent opposition system in the U.S.”

This increased predictability of patents occurred under the leadership of Andrei Iancu, under secretary of Commerce for intellectual property and director of the USPTO, it said.

“As the global intellectual property space becomes increasingly competitive, we must continue to fuel American innovation through a reliable, predictable, and high-quality patent system,” Iancu said in a USPTO press release.

“I am proud of the USPTO’s work to secure the rights of inventors and brand owners to fulfill our constitutional mandate,” he said.

In response to the release of the index and to the progress made by the US, Brian Pomper, executive director of the Innovation Alliance, a coalition of research and development-based companies, issued a statement.

“Despite the improvement in the U.S. ranking, we must not become complacent and assume that all is well in the U.S. patent system,” he said. “Recent court decisions and legislation have weakened patent rights and undermined our nation’s innovation ecosystem. As a result, U.S. startup activity has slumped and venture capital investment has increasingly moved overseas.”

“We must continue the progress that has been made and work to ensure our patent system continues to serve as an engine for U.S. innovation and job creation,” he said.

Progress for BRICS and Developing Countries

The index shows progress in BRICS and developing countries. While it notes that there is “room for improvement,” it points toward a trend of increasing global IP protection.

“We want to see countries not just have access to US, Japanese, [and] European technology,” Kilbride said in the press briefing.

“We want to see technology made at home. Because when we are looking for those one-in-a-billion solutions to the big challenges that we all share, we need a billion Indians to have their innovative capacity to reach its full potential. We need a billion Chinese to be working at their full innovative potential,” he said. “The index helps to point the way.”

“India experienced its second consecutive year of growth in the IP global ranking, jumping eight places from 44th to 36th,” the index press release noted. “While broader challenges remain [for India], the increase is a result of specific reforms that better align India’s IP environment with the international IP system.”

The government of Brazil advanced in the ranking due to its utilization of “programs and incentives to help SMEs [small and medium enterprises] create and register IP assets,” it said. And Argentina advanced due to reforms introduced by the government “to streamline the patenting process, increase international cooperation on IP, and bolster transparency and stakeholder engagement.”

Mexico’s score also advanced, in part due to its role in the US-Mexico-Canada Agreement (USMCA), which “includes provisions to help harmonize and strengthen IP protection across North America,” the index explained.

“The USMCA raised the bar for IP enforcement and protections in North America,” David Hirschmann, president and CEO of GIPC, said in the release. “The agreement lays the foundation for IP chapters in future trade deals with Japan, the UK, and the EU, allowing innovators and creators to prosper around the globe.”

The provisions of the agreement include “a 10-year term of regulatory data protection for biologics, more effective trade secrets protection, and stronger enforcement mechanisms against counterfeit goods, including those in-transit,” the release said.

Compulsory Licensing “Undermines” Strong IP

While the index found progress overall, it said that the ongoing use of compulsory licensing “undermines” the IP system, stating that “[s]everal governments have undertaken measures that reduce the reliability of patents as a vehicle for return on investment.”

In Latin America, the index noted that “the governments of Chile, Colombia, and Peru are considering utilizing compulsory licenses on Hepatitis C medicines to address price concerns.”

“Compulsory licenses,” it argued, “undermine legal certainty and jeopardize the availability of future innovative medicines in the region.”

In Russia, “the government issued a compulsory license on an innovative biopharmaceutical product as a mechanism to address economic concerns around the cost of medicines,” it continued.

“Unfortunately, the net effect of these policies is to undermine the economic conditions that facilitate innovation, R&D, and investment,” the index asserted.

“Using compulsory licensing, in particular, as an industrial and health policy tool is not only outside international norms but ultimately self-defeating: over time it will hollow out the IP environment and reduce the opportunities for future innovation—biopharmaceutical or otherwise—in a given economy,” it said.

 

Image Credits: US Chamber of Commerce Global Innovation Protection Center