IPR Cooperation with Acceleration of Globalisation and New Technologies

By Peter Tensen

The acceleration of globalisation, new technologies and cross-border technology transfer is driving the evolution of IPR legal practices and management.

Globalisation

In recent decades increasing effort has gone into the development of global IP treaties and policies to extend international IP coverage and harmonise legal frameworks, including the Madrid Protocol, WIPO’s Patent Cooperation Treaty, the EU’s IP Directives, and the TRIPS agreement. In addition to multinational treaties, there has been an increase in cooperation among patent offices in different countries and regions to streamline cross-border filing and IPR enforcement.

Examples of this include recent moves between the Mexican and the US patent offices to offer reciprocal patent filing and the development of the EU’s Unified Patent Court (UPC) which provides a common patent litigation system applicable across Europe. The EU has also made moves to harmonise copyright law to deal with the impact of technological globalisation. Even the UK plans to adhere to EU IP law post-Brexit, including staying with the UPC and recognising EU trademarks.These trends help innovators to reduce IP risk thereby promoting international innovation to the benefit of the global economy. However, standards are still very local and more work is needed in the direction of legal globalisation to align national IP regimes and to make it easier and less costly for SMEs to manage full global patent coverage.

In addition, East Asia’s IP regimes and volume of patent applications continues to surge, led by China with over 1.5 million applications in 2019 and followed by Japan and South Korea. China has also been working to resolve IP issues connected to its trade disputes with the US, including further strengthening its IP infrastructure, such as creating several specialist IP courts around the country and successfully stemming the flow of counterfeit goods. Despite outdated perceptions and political posturing in the West, China’s IP protection system is already largely on par with its global peers which is helping to further accelerate IPR integration and harmonisation.

Another long-term trend has been the growth of the value of intangible assets among multinational firms.Today, intangible assets like IP and brand represents most of the value of large firms globally. This trend has prompted organisations to start to view IP more as an important portfolio of assets to be managed and exploited through licensing and other royalties away from simply viewing IPR from a defensive posture. This has also shifted the focus of IP practitioners from purely legal service providers to business advisors helping to generate additional sources of revenue for the firm.

Technology

Technology also continues to reshape IP practice,from basic office automation that increases efficiency and quality to online channels that facilitate faster IP advisor-client communication. Increasingly,intelligent software is being introduced to speed patent applications, infringement research and patent landscaping. The use of AI and blockchain is just beginning and will likely accelerate in the coming years.Applications of AI to improve IP management include automating the analysis of IPRs to automate valuation,patent filing, prosecution, and IP portfolio management.Blockchain will be another important technology to watch out for, which can be used to better manage copyright royalties and patent licensing, helping IP owners collect fees globally and enforce their rights.These technological advances will have the net effect of strengthening IPR protection while lowering costs.

Peter Tensen（The United States/Ireland）, Founder of Global Technology Innovation Partnerships, CEO of Nanjing Tensen International Technology Transfer Centre

IP law is also being reshaped by technology and is in a constant race to keep up. This is particularly true in jurisdictions like the US where common law norms are starting to be eclipsed by technological advances.For example, IP regulation around the internet and social media is still catching up, as evidenced by recent moves to give domain names the same legal status as registered trademarks. Also, IP legislation around underpinning technologies like 5G and autonomous vehicles will also need to quickly advance to keep pace with these rapidly developing sectors and to enable the many IP intensive components to interoperate and to avoid costly legal challenges that will adversely impact innovation.

Additionally, new IPR categories, such as Orphan Drug Exclusivity, Data Exclusivity and Standard Essential Patents have recently been developed in response to new technology. In the future AI will likely be used to produce unique designs and other IP, which will push the frontiers of IP legislation, and there is a danger that IP law will lag technological developments.

Technology Transfer

Another accelerating trend has been the growth of cross-border technology transfer, through imports, FDI,licensing and non-resident patent filings. Developing countries tend to be the net beneficiaries of such technology flows especially those countries with open policies and a positive macroeconomic environment.Increasing technology transfer has also led to calls to strengthen IPR protection leading to a debate over the overall economic impact of IPR regulation on developing countries. Some argue that stricter IPR controls increase capital flows from poor to rich countries, while other maintaining that stronger IPR protection accelerates innovation, economic growth, and technology transfer for all countries.

Research suggests that the net economic impact of IPR depends upon each country’s level of development.Those with greater innovation capabilities, especially fast-growing middle-income countries, can benefit from a strengthening of IPR protection while those countries with weaker capacity tend to suffer from greater technology access costs with little residual knowledge dissemination benefit to their domestic innovation ecosystems. In fact, the evidence suggests that excessive IPR protection in less developed economies can produce effective barriers of entry to domestic rivals stifling innovation and leading to effective foreign monopolies,resulting in fewer sales of relatively high-cost goods and little technology diffusion.

Thus, each country needs to find the right policy balance to encourage both technology transfer and domestic innovation long-term. For advanced economies with high R&D spending and many innovators, stronger IPR regimes are highly correlated to economic growth. For countries with limited innovative capacity, a weaker IPR system can actually stimulate greater knowledge diffusion via imitation and knowledge spill over in the near term though may deter cross-border technology transfers in the long-term for fear of IP theft and poor enforcement of patent infringements. For many countries, the strategy is to progressively strengthen IPR protections as it moves up the development ladder in order to increasingly reward innovation and entrepreneurship as the twin engines powering sustained economic growth.