intellectual property and innovation development wipo/aeppi international symposium on intellectual...
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Intellectual Property and Intellectual Property and Innovation DevelopmentInnovation Development
WIPO/AEPPI INTERNATIONAL SYMPOSIUM ON INTELLECTUAL PROPERTY: WIPO/AEPPI INTERNATIONAL SYMPOSIUM ON INTELLECTUAL PROPERTY: CHALLENGES FOR DEVELOPING COUNTRIES IN A GLOBAL ECONOMY CHALLENGES FOR DEVELOPING COUNTRIES IN A GLOBAL ECONOMY
Marriott Hotel, Cairo, December 2 and 3, 2007Marriott Hotel, Cairo, December 2 and 3, 2007
Patricia Simão-SartoriusPatricia Simão-SartoriusProgram Officer – Intellectual Property and Economic for Development DivisionProgram Officer – Intellectual Property and Economic for Development Division
WIPOWIPO
Intellectual Property - Intellectual Property - New Imperative and Focus ShiftNew Imperative and Focus Shift
Earlier, emphasis on Earlier, emphasis on strengthening legal infrastructure/IP officesstrengthening legal infrastructure/IP offices capacity building and HRD capacity building and HRD
After TRIPS, extended assistance contributed to After TRIPS, extended assistance contributed to better understanding of IP concepts better understanding of IP concepts greater use of systemgreater use of system
New aim: capitalize on technical/legal assistance New aim: capitalize on technical/legal assistance rendered for more economic, social and cultural rendered for more economic, social and cultural deliverablesdeliverables
Not merely to preserve market exclusivity but to Not merely to preserve market exclusivity but to build strategic partnershipsbuild strategic partnerships
IP assets - investment, not business costsIP assets - investment, not business costs Use IP for Economic and Cultural Development and Use IP for Economic and Cultural Development and
to enhance Growth Competitivenessto enhance Growth Competitiveness
Growth Competitiveness IndexGrowth Competitiveness Index
1. Public Institutions Protection of rightsResolution of disputesEfficiency / transparency
Three Variables :
2. Macro Economic Environment Monetary and fiscal policies
3. TechnologyWithout tech progress can accumulate capital but not sustainable growth
How is Technology How is Technology ObtainedObtained
Core Innovation Core Innovation
Technological DiffusionTechnological Diffusion
R&D expenditures of selected region and R&D expenditures of selected region and countries: countries: 1990–20031990–2003
Source: National Science board, Science and Engineering Indicators, 2006
Growing Investment in production of knowledge
Beatriz Amorim, Agosto de 2007
EPO, Scenarios for the Future, 2007
Technological DiffusionTechnological Diffusion
Rapid growth if successful in adopting/adapting foreign technologiesRapid growth if successful in adopting/adapting foreign technologies FDI - effective way of technology transfer and facilitated by the domestic FDI - effective way of technology transfer and facilitated by the domestic
environmentenvironment Size of the marketSize of the market Stability of macro economic policies Stability of macro economic policies Free repatriation of profits and dividendsFree repatriation of profits and dividends Guarantees against nationalizationGuarantees against nationalization Protection of Intellectual Property RightsProtection of Intellectual Property Rights
Patents and Patents and Technological DevelopmentTechnological Development
Facilitate transfer and investmentFacilitate transfer and investment
Disseminate initial knowledge as free input (“public Disseminate initial knowledge as free input (“public
good”) to produce further knowledge as output good”) to produce further knowledge as output
(“private good”)(“private good”)
Limit “free riders” not “innovators”Limit “free riders” not “innovators”
Encourage licensing arrangementsEncourage licensing arrangements
Catalyze new technologies and businessesCatalyze new technologies and businesses
How Trade Marks Create How Trade Marks Create Economic ValueEconomic Value
Increase sales volumes and priceIncrease sales volumes and price Stabilize demand through consumer Stabilize demand through consumer
relationshipsrelationships Earn royalties through licensing and franchisingEarn royalties through licensing and franchising Transfer brand equity to new product categoriesTransfer brand equity to new product categories
Copyright and Copyright and Economic DevelopmentEconomic Development
Protects creativity and ensures adequate Protects creativity and ensures adequate recompense for creators and producersrecompense for creators and producers
Balances public with private interestBalances public with private interest Preserves cultural heritage Preserves cultural heritage Prevents creation from being reproduced Prevents creation from being reproduced
elsewhere and competing with originalelsewhere and competing with original Enhances economic growthEnhances economic growth
Innovation ModelInnovation Model
Cash flow pattern for a product (innovation)Cash flow pattern for a product (innovation) Product passes through the following stagesProduct passes through the following stages
DevelopmentDevelopment IntroductionIntroduction MaturityMaturity SaturationSaturation DeclineDecline
Investment expenditures continue after market introduction Investment expenditures continue after market introduction due to due to product variants product variants design adaptationsdesign adaptations production automations production automations new market investmentsnew market investments
Product Life-CycleProduct Life-Cycle
Total Income
Total Investment
Development Introduction Growth Maturity Saturation Decline
Time
Sales Margins
Operating Costs
R&D
Production Marketing
Gross Income
Diffusion Processes for InnovationsDiffusion Processes for Innovations
Imperative to be competitive in technology related Imperative to be competitive in technology related businessesbusinesses
In fact, to create economically successful new In fact, to create economically successful new products products
Innovation a “routinized activity”Innovation a “routinized activity” Commercialization of product leads to Commercialization of product leads to buyerbuyer and and
sellerseller diffusion diffusion Innovating company do their best to Innovating company do their best to
accelerate buyer diffusion for good profit marginsaccelerate buyer diffusion for good profit margins prevent seller diffusion that reduces profit marginsprevent seller diffusion that reduces profit margins
Benefits For InnovatorBenefits For Innovator
Buyer Diffusion:Buyer Diffusion: Trademarks and Designs boost marketing effortsTrademarks and Designs boost marketing efforts Patents signal technological superiorityPatents signal technological superiority
Seller DiffusionSeller Diffusion Limited/delayed by keeping process/technology secretLimited/delayed by keeping process/technology secret Patents/copyright create entry barriersPatents/copyright create entry barriers
BenefitsBenefits For Society For Society
Benefits:Benefits: innovators/producers net surplusinnovators/producers net surplus additional consumer surplus due to cost savings additional consumer surplus due to cost savings
from the invention from the invention dissemination of patent informationdissemination of patent information
Costs:Costs: Installing and operating a patent system - offices, Installing and operating a patent system - offices,
enforcement mechanisms, inventors costs etc enforcement mechanisms, inventors costs etc
Some aspects of InnovationSome aspects of Innovation
Creative destruction, introduced in 1942 by the economist Joseph Schumpeter, describes the process of transformation that accompanies radical innovation.
In Schumpeter's vision of capitalism, innovative entry by entrepreneurs was the force that sustained long-term economic growth, even as it destroyed the value of established companies that enjoyed some degree of monopoly power.
Examples of this theory: Companies that once revolutionized and dominated new industries – for example, Xerox in copiers or Polaroid in instant photography – have seen their profits fall and their dominance vanish as rivals launched improved designs or cut manufacturing costs (lowering their own costs allows them to charge lower prices to customers, thereby drawing customers away from less efficient competitors who eventually close their doors or move into other products where they are able to find a cost advantage).
Wal-Mart is a recent example of a company that has achieved a strong position in many markets, through its use of new inventory-management, marketing, and personnel-management techniques, using its resulting lower prices to eliminate the profitability of older or smaller companies. Just as older “giants” perceived to be juggernauts by their contemporaries (e.g., Kmart, Sears) were eventually undone by agile and more innovative competitors.
Wal-Mart faces the same threat. Just as the cassette tape replaced the 8-track, only to be replaced in turn by the compact disc (which is now being undercut by MP3 players), the seemingly dominant Wal-Mart may well find itself an antiquated company of the past. This is the process of creative destruction.
Role of the StateRole of the State
Role of StateRole of State
In order to accelerate economic development policy makers need to In order to accelerate economic development policy makers need to prevent tendency to under invest in R&Dprevent tendency to under invest in R&D How? i.e.: create incentives for additional investments; favourable How? i.e.: create incentives for additional investments; favourable
financial system financial system During its life-cycle, product is subjected to competition - initially weak, During its life-cycle, product is subjected to competition - initially weak,
subsequently strongsubsequently strong Innovators use property rights to check imitation and ideally should be able to Innovators use property rights to check imitation and ideally should be able to
count on effective enforcement system in order to stop it – results in count on effective enforcement system in order to stop it – results in encouragement of innovation.encouragement of innovation.
Easy in the case of physical property – associated with excludabilityEasy in the case of physical property – associated with excludability However, difficult for IP, as knowledge characterized by non-excludability However, difficult for IP, as knowledge characterized by non-excludability
and non-rivalrousness and non-rivalrousness
Hence,Hence, state intervention imperative in the form of IP state intervention imperative in the form of IP
protectionprotection Market distortions created, but required for the wider Market distortions created, but required for the wider
good of societygood of society Provides innovator/creator with a source of potential Provides innovator/creator with a source of potential
competitive advantage competitive advantage In most cases for a limited period of time, during the In most cases for a limited period of time, during the
early period of the product life-cycleearly period of the product life-cycle For instance, patents enable inventor to obtain a steady For instance, patents enable inventor to obtain a steady
stream of operating profits fromstream of operating profits from product inventionsproduct inventions cost reducing process inventions cost reducing process inventions learning advantages-minor cumulative improvementslearning advantages-minor cumulative improvements
National Policies for Industrial, Economic, Educational, and Technological Development
Education / Capacity Building Basic Education Technical Education Science, Technology and Engineering Training Graduate Education Entrepreneurial Training Policies for continuous “learning” and for the built up
of an indigenous technological capability IP Education at different levels of formal education Training for IP agents and IP technology managers
Infrastructure and Institutional Framework Transportation Communication Energy Ports Standards and Certification Judiciary system Intellectual Property Offices IP enforcement / IP Specialized Courts
Financial System / Funding agencies Banking system Special loan system for businesses undertaken in
special areas Special Loans for SMEs Venture capital Incentives for investments in R&D Programs for the financing of IP protection (including
the international protection of trademarks and patents)
Science, Technology, and Innovation Science and Technology funding programs Programs for funding technology development
within enterprises Policies for university-industry links Special policies and incentives for IP generation and
protection among innovative actors (researchers, university professors and SMEs)
Promotion of IP Management Strategies – valuing and commercializing IP
Programs to support the establishment of TTOs Monitoring technology
National Policies for Industrial, Economic, Educational, and Technological Development
(cont’d)
External Relations / Foreign Trade International Treaties – management of current
agreements and analysis on the convenience of adopting new ones
Promotion of bilateral and multilateral interactions on all fields
Special policies for exporting Branding Strategies for Exporterdfihhsvi
IP Audit – a tool to facilitate decision-making IP Strategies – requires policy measures at several levels, in several areas
WIPO’s StrategyWIPO’s Strategy
Strategic Use of IP for Strategic Use of IP for DevelopmentDevelopment
Move from basic infrastructure needs to effective Move from basic infrastructure needs to effective exploitation of assetsexploitation of assets
At the macro-level examine interface between IP protection At the macro-level examine interface between IP protection and growthand growth
Test, validate, challenge assumptionsTest, validate, challenge assumptions Enable SMEs to intensify IP use and expand role in Enable SMEs to intensify IP use and expand role in
employment generation, investment, exportsemployment generation, investment, exports Development/management of IP assets primary concern for Development/management of IP assets primary concern for
private enterprises - technology and cultural industries private enterprises - technology and cultural industries sectorsector
Some ElementsSome Elements
Strengthened documented evidence on the effects of Strengthened documented evidence on the effects of IP protection on economic development IP protection on economic development
Development of conceptual frameworks, Development of conceptual frameworks, methodologies, indices to assess IP situations at methodologies, indices to assess IP situations at national levelnational level
Enhanced international exchange of research resultsEnhanced international exchange of research results Partnerships with stakeholdersPartnerships with stakeholders
Some Elements(contd.)Some Elements(contd.)
Improved capacity by SME support Improved capacity by SME support institutions to deliver IP services to their unitsinstitutions to deliver IP services to their units
Strengthened ability of businesses and Strengthened ability of businesses and research institutions to develop and manage IP research institutions to develop and manage IP assetsassets
Greater awareness on financial support for IP Greater awareness on financial support for IP asset developmentasset development
