WIPO Faces Possible Negative Annual Income Despite Record Trademark Filings

The World Intellectual Property Organization is facing the possibility of negative income for the first time in its history, the United Nations agency’s director general said Monday.

Director General Francis Gurry made the remarks during a press conference on its annual report on trademark filings at WIPO in 2008 that showed a new record high for trademark registrations but signs of a slowdown late in the year.

“There is very little doubt that [the global crisis] will have a significant negative impact,” Gurry told reporters on 9 March. “We would expect for the first time in the history of the organisation that … income will decline.” WIPO was established in 1967 and is a perennial positive financial contributor to the United Nations system.

WIPO saw a record high of 42,075 applications for trademarks in 2008, an increase of 5.3 percent for the year. But growth was 6.9 percent in the first six months and 3.9 percent in the second six months. And developing countries accounted for just 5.1 percent of all filings worldwide, despite significantly discounted fees.

Germany had the most filers for the 16th consecutive year, followed by France, United States, European Community, Switzerland, Italy, Benelux countries (Belgium, Netherlands, Luxembourg), China, Japan and Austria. European Union countries can file at the national level or with the EU regional office in Alicante, Spain. The country most designated for protection was China (for the fourth year in a row), followed by Russia.

Product areas for which trademarks were sought were widespread. The most designated product area for trademarks was computer hardware and software at 8.5 percent of the total, WIPO said. The average fee for an international registration was CHF3,734 Swiss francs; 52 percent paid less than CHF3,000.

There are 184 members of WIPO, and 84 members of the Madrid Union.

Development Agenda Funding Okay for Now

Funding for WIPO’s Development Agenda is set for the year, so there will be no impact this year, Gurry said, but this could change in the future if member governments decide to decrease expenditures. The Development Agenda funding was the subject of scrutiny at the December special assembly on the budget after questions arose over possible non-allocation of more than half of the CHF 8 million Swiss francs approved by the WIPO Committee on Development and Intellectual Property for the Development Agenda.

WIPO’s first priority is toward implementation of international treaty obligations, then comes the prioritisation of other programmes, Gurry said.

Gurry still predicted that numbers would be positive for the 2008-2009 biennium, but that budgeting for 2010-2011 may look different. The WIPO secretariat currently is drafting a proposed budget for the next biennium and will consult member states over the coming months. “At this stage we are not sure what the impact will be, but the objective is for the organisation never to go into deficit,” Gurry said.

WIPO earns the vast majority of its own revenues through fees for its services, including about 73 percent from the Patent Cooperation Treaty, and 14 percent from the 84-member Madrid system for the international registration of trademarks, known as the Madrid system. About 8 percent of the remainder comes from governments, and Gurry said he does not anticipate that government portion of WIPO revenues changing in the future.

It is unknown how long the economic difficulties will last, he said, so WIPO is “very carefully” monitoring the economy. It recently reported a slowing of patent filings as well.

WIPO also is increasing its interest in enforcement activities, it appears, despite lacking a mandate to engage in policymaking on enforcement. Its focus appears to be largely aimed at economic analysis related to enforcement.

Gurry freely quoted statistics about “illegal” filesharing globally that he later said came from the music industry. He said the problem is not piracy, but rather the economics of the “creative culture.” There needs to be attention to finding a way to extract some value to give to creators, he said.

He also raised concerns about counterfeiting of medical products, which he said have “very significant risks” for health. WIPO does not have a mandate from its members to make policy on enforcement matters

Gurry said WIPO believes trademarks “can be a very useful mechanism” for contributing to African economies by helping to spread products from the region.

Gurry declined to comment on an intellectual property rights issue that has blown up in Geneva in recent weeks: seizures by Dutch authorities of shipments of legal generics being shipped by companies in India to patients in Latin America on suspicion of counterfeiting.