The Chilean Mining Industry: The Role Of IP In The Innovation Process 09/06/2015 by Eimear Murphy for Intellectual Property Watch Leave a Comment Share this:Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Facebook (Opens in new window)Click to email this to a friend (Opens in new window)Click to print (Opens in new window)The mining industry in Chile offers an interesting case study on the role of intellectual property in the innovation process, according to a discussion at a recent event held at the World Intellectual Property Organization. The Permanent Mission of Chile in Geneva in conjunction with Chile’s Instituto Nacional de Propiedad Industrial (INAPI) and WIPO held an event on “Mining, Innovation and Industrial Property” on 28 May. The event focused on the development of innovation and the role of intellectual property in the Chilean mining industry. Marco Aleman, acting director of the WIPO Patent Law Division, summed up the discussion during the event as why Chile is an interesting study on the “role of intellectual property on the innovation process.” Here are the points Aleman made: (1) “Chile has proactively integrated into the world economy” through a large number of bilateral and regional trade agreements that account for over “90 percent of the trade of the country.” Some 55 percent of the total export is linked to the mining sector. These trade agreements play a role in facilitating trade activity in Chile and intellectual property is an “accompaniment of many of these agreements.” (2) Chile has “progressively” adjusted to the IP system and on “three occasions has revised its industrial property law” (Law 19.039) which entered into force on 1991. In addition, the legal framework of Chilean intellectual property is a framework which has adjusted to “every new need in the evolution of the economy.” For example, Chile has joined “several multilateral treaties” (some of which are administered by WIPO) amongst which are the Paris Convention for the Protection of Industrial Property in 1991, the Patent Cooperation Treaty in 2009, the Budapest Treaty in 2011. (3) “A large number of research universities” are active in filing patents such as the Universidad de Concepción, which has filed “more than 130 patents.” The activity of universities and research centres may be a source for shifting “economic growth towards new sectors and gaining economic wide productivity through innovation not only in traditional sectors like mining” but in specific areas such as “mining services.” (4) In WIPO indicators from 2014 for patent filing and granting, patent filing activity shows that “despite tripling from 1999, from 1775 patent applications to almost 4000 patent applications in 2014, the number of patents filed by residents is still a little bit low, about 400 patent applications in 2014.” Most of these new patent applications were “filed by Chilean companies in the field of chemicals and pharmaceuticals but particularly in areas related to mining” such as in the case of CODELCO and Biosigma, but also companies with a “broader chemical portfolio.” (5) The “low patent intensity” of Chile can largely be explained by the fact that Chile has an industrial sector with a “low propensity to patent and to file patents,” such as in the case of mining and services. However, this may change in the future as: (i) “the answer to the challenge of the mining industry may come from local innovation” and (ii) the revenue from mining may be used to “finance innovation” not only in mining but other key industries. New IP Law and Government Agenda Maximiliano Santa Cruz, director of the National Institute of Industrial Property of Chile (INAPI), discussed a new draft industrial property law in Chile. He said in his presentation that this will offer: (i) simpler and shorter procedures, (ii) a deposit system for utility models and industrial designs, (iii) exceptions and limitations, and (iv) stronger enforcement. INAPI serves as a consultative and advisory body to the Chilean president in industrial property matters. INAPI is part of the Presidential Commission for the Development of Sciences in Chile, which aims to deliver a proposal to make sciences a fundamental pillar of development. Santa Cruz discussed the idea of incorporating intellectual property into the national innovation system. He described the current government’s agenda to promote economic productivity through innovation such as: (i) IP as a cross tool to successfully implement the agenda, and (ii) direct measures such as the Public Domain Patent Search engine. The Public Domain Patent Search engine was launched in 2014, and makes available to the public (in Spanish) all patents that have been filed in Chile since 1840 and that are currently expired, thus falling into the public domain and available for use. Santa Cruz mentioned that after working on IT services, legislation, transfer of knowledge and its new role as an International Searching Authority (ISA-IPEA) under the PCT, INAPI is working on developing technological information services for the private and public sector. He presented the INAPI analysis on all applications in the mining sector that have been filed in Chile from 2000 to date. Challenges and Opportunities Chilean Ambassador Hector Casanueva stated that the Chilean mining industry faces challenges where industrial and intellectual property is an essential factor. WIPO’s Aleman highlighted that according to the World Economic Forum Global Competitive Report of 2013-2014, Chile ranks as the most competitive country in Latin America, and according to the Global Innovation Index Report of 2014, Chile is ranked as the 2nd in Latin America and 46th in the world. He stated that the Chilean economy “continues to grow” but that several challenges have arisen, which were discussed at the panels of different speakers. These challenges can be seen as opportunities, he argued. Aleman also mentioned a Chilean report on the Future of Mining in Chile from 2014. In this report, a number of challenges and opportunities were identified. These include: (i) difficult access to energy and water, (ii) shortage of human capital, (iii) declining productivity, (iv) need to improve environmental sustainability, and (v) transfer of power of the wealth created from mining to local communities. Aleman states that “it is clear that there is a role to be played by innovation” in regards to the way these challenges will be faced by the mining industry. One of the questions normally posed by CEOs and CFOs is how to transform “inventions into gold.” he said. However, Chilean policymakers are facing the question of how to transform Chilean “natural resources into future inventions”, he said. The Patent Portfolio Aleman also said the industry may wonder if there is room for a different approach to managing the patent portfolio. He said “there is certainly room to use patent rights not only in a defensive manner,” particularly in a sector that is looking at an “important challenge in terms of productivity.” One possibility is exploring the patent portfolio in a strategic manner, such as licensing to other competitors, which may be a source of revenue for companies. Patent Mapping and Mining Innovation At the event, WIPO Chief Economist Carsten Fink mentioned three ways in which patents can support mining innovation: appropriability, disclosure and specialisation. Fink discussed these concepts with IP-Watch in terms of their meaning generally and their application to the mining industry in Chile. Firstly, he stated that there is little economic research that provides evidence on the role of patents in the mining industry. A Google search for “economics mining patent” reveals how economists have mined patent databases but it doesn’t produce economic research on the mining industry, he explained. In this way, the question that emerges is how the general insights we have gained about the value of patent protection apply to the mining industry. He stated that appropriability is concerned with the importance of patents in securing a return to R&D investment. This differs a lot across industries, with patents playing a more central role in pharmaceuticals and chemicals and a less central role in many ICT-related industries. In the case of mining, secrecy is probably of some importance given that many innovations relate to process rather than product technologies. Disclosure is important, he said, and the IP office in Chile is investing a lot in patent information to promote technology adoption in Chile’s mining sector. It is difficult, though, to assess how important patents documents are as a source for technological learning in the mining industry, he said. In relation to the specialisation point, he stated that this is interesting in the case of mining. It seems that most mining innovation is not undertaken by the big mining operators but by specialised companies, many of which are small and medium enterprises in the mining equipment technology service (METS) industry. The patent system can play a role in facilitating this type of specialisation, as it does in other industries, though that is probably more a conjecture than a firm conclusion at this stage, he said. Intellectual Property Watch asked Fink what patent mapping can tell us about innovation in the mining industry. He said that the most important point in relation to this is that the big mining operators do not seem to be the ones responsible for most innovation – at least as captured through patent filings. Instead, companies in the METS industry seem to account for most innovation. In terms of whether a picture has emerged on what types of organisations/companies are responsible for most of the innovation in the mining industry in Chile, he said that generally both university and company actors are important. Interestingly, some Chilean entities also file patents abroad, notably in other mining-heavy economies such as Australia and South Africa. Eimear Murphy is a researcher at IP-Watch. She is an LL.M. graduate from American University Washington College of Law in Washington DC with a specialty in Intellectual Property and Information Policy issues. Share this:Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Facebook (Opens in new window)Click to email this to a friend (Opens in new window)Click to print (Opens in new window) Related Eimear Murphy may be reached at email@example.com."The Chilean Mining Industry: The Role Of IP In The Innovation Process" by Intellectual Property Watch is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.