Impact of Global Economies on
Patenting of High Tech Innovation
Denise M. Kettelberger
PLI Patent Law Institute
April 6-7, 2017 New York City
April 26-26, 2017 San Francisco
Role of Intellectual Property in Stimulating
Innovation and Economic Growth
Strong IP rights encourage innovation
Innovation provides new technology for commercialization
Commercialization provides new products, new companies
New trade provides economic growth, jobs, higher GDP
Strong Patent Systems include:
Efficient patent office, examination system, opposition methods
Few limits on patent eligibility and patentability
Effective enforcement systems
Limited localized restraints on trade
Local production, procurement, and manufacturing requirements
Compulsory licenses
Important Factors for Innovation Economies
Strong Intellectual Property Protections
Robust standards for Patents, Trademarks, Designs, CR
Ability to stimulate and reward innovation
Strong Research Institutions and R&D Personnel
Ability to transfer innovation to commercial products
TPP required IP protections
Rule of Law – Supportive Government Structures
Political policies; enforcement of IP laws
Lack of protectionist policies
Global Marketplace Trade Agreements
Raise IP Standards
TRIPS -1994
Aim to harmonize global IP protections for all WTO members
Established minimum standard IP framework, including:
Dispute resolution and settlement standards
WTO Members commit to minimum global IP standards
Floor not a ceiling for IP protection
TPP – 2016
The only enforceable global IP standard
Reaches beyond TRIPS to higher IP standards for innovation
and economic growth
Requires membership to have at least 85% GDP
Global Marketplace Trade Agreements
Raise IP Standards
TRIPS -1994
Aim to harmonize global IP protections for all WTO members
Established minimum standard IP framework, including:
Dispute resolution and settlement standards
WTO Members commit to minimum global IP standards
Floor not a ceiling for IP protection
Requires membership to have at least 85% of GDP
Member Nations: Australia, Brunei, Canada, Chile, Japan,
Malaysia, Mexico, New Zealand, Peru, Singapore, the
United States (until 23 January 2017) and Vietnam.
TPP Extends TRIPS
Requires threshold IP protection measures
Members must provide authority to detain or suspend imports,
exports, or goods in transit, with seizure authority
Members “shall adopt or maintain appropriate laws… requiring
central government agencies to use only non-infringing
computer software protected by Copyright and related rights
Regulatory drug data protection
at least 5 years small molecules; at least 8 years large molecules
Barriers Constructed by economies
Localization and Licensing restrictions not addressed in TPP
Indexes Rank Innovation
USDA and Bloomberg Indexes
Bloomberg Index ranking system
Research and Development – Commercialization
Value Added Manufacturing
Number of High Technology Companies
Number of Research Personnel
Number of Post-Secondary Students
Rule of Law; Supportive Governmental Policies
USDA ranking system
IP Systems: Patents, Trade Secrets, Copyrights, Trademarks
Enforcement, Market Access, Ratification of International Treaties
2017 US Chamber of Commerce – 5th Ed.
2017 Bloomberg Innovation Index
Rank USCC Bloomberg
1 US South Korea
2 UK Sweden
3 Germany Germany
4 Japan Switzerland
5 Sweden Finland
6 France Singapore
7 Switzerland Japan
8 Singapore Denmark
9 South Korea US
10 Italy Israel
Bloomberg Index 2017
Innovative Economies (2016 data)
Rank R&D Manufacturing Hi-Tech Co Post-2d Ed Research
Personnel
1 S. Korea Switzerland US S. Korea Finland
2 Israel Ireland China Russia Iceland
3 Finland Singapore Japan Finland Denmark
4 Sweden Germany S. Korea Israel Israel
5 Japan Australia Canada Ukraine Singapore
New IP Law / Amendments –South Korea
Extends deadline for filing Divisional
Within 3 months of Notice of Allowance or Registration
Grace Period of 12 months
Eliminates1 year bar against registration of expunged marks
TM owner can file invalidity action at any time
Codified electronic marks
Centralized jurisdiction of patent, TM, design rights in 5
specialized District Courts with appeal to Patent Court
Injunctions and damages more available
Court of Appeals rule on invalidity and infringement
Sweden’s Advantages
High ranking for value added manufacturing
People known for personal ambition and creative ideas
Rule of law is high
Favorable incentives and tax structure
Government financing of small firms
Ranks high for R&D spending
Currency undervalued, helps country’s exports
IP Laws/Amendments in Finland
Invention must be susceptible to industrial application
The following, as such, shall not be regarded as inventions:
(1) discoveries, scientific theories and mathematical methods;
(2) aesthetic creations;
(3) schemes, rules and methods for performing mental acts,
playing games or doing business, and programs for computers;
(4) presentations of information
Ineligible Subject matter - Finland
Methods for surgical or therapeutic treatment or diagnostic
methods, practiced on humans or animals, shall not be
regarded as inventions.
This provision shall not, however, preclude the grant of patents for
products, including substances and compositions, for use in any of
these methods.
Patents shall not be granted for plant or animal varieties.
Inventions which concern plants or animals shall nevertheless be
patentable if the technical feasibility of the invention is not
confined to a particular plant or animal variety.
Patents shall not be granted for essentially biological processes for
the production of plants or animals.
Free Trade Agreements
Increase Global IP Protections
Trade Agreements have progressively raised the bar for
IP standards world wide*
TRIPS requires minimal IP Protections
TRIPS requires standards for IP protections & enforcement
TPP attempts to limit national protectionist practices
Compulsory licenses
Required national manufacturing
TPP aims to provide higher standards for IP protections
Future of TPP unclear with US withdrawal
• US Department of Commerce, Global IP Center, “Roots of Innovation (2016)
Growth of Global Economies
Free Trade treaties stimulate growing economies
World Trade Organization
World merchandise trade value rose 20% in 2011 to USD 16.7 Trillion
Growth in Emerging Economies cited as one major factor
GDP of Emerging Economies grew up to 6% in early- mid 2000s
GDP of Advanced Economies remained steady at 2%
Since 2008 financial crisis, growth in emerging markets has slowed
Investopedia.com – The Effect of Trade on Industrial Growth 2015
Success and Challenges of
Global Value Added Chains
Globalization created opportunities and challenges
Driven to more efficient ways to manufacture
Production model now in fragments, outsourced to specialty
companies, both domestic and foreign
Cost differences – wages, transportation costs, IP rights and
enforcement
Global supply chains and global value-added chains
Multinational global production – IP ownership?
Considerations for Patenting in Global
Emerging and/or Innovative Economies
Rule of Law vs Protectionist Policies
Requirements for manufacturing
Eligible Subject matter
Systems for Enforcement
US withdrawal from TPP – Impact on emerging economies
Multi-national Value Added Chains
IP ownership of value added innovations
Corporate relationships
Potential harm to chain by one weak link
Questions?
Thank you!