WIPO investigations suggest IP activities can boost revenue for companies and aid economic recovery
According to the Recent Economic Thought book series, historically there is a positive correlation been IP rights and economic development, and economists largely agree that robust IP frameworks and strict enforcement aid economic growth. Properly implemented IP laws incentivise innovation, which breeds start-ups and the further growth of existing businesses.
The International Monetary Fund estimates that the pandemic caused the global economy’s GDP to fall by 4.4%. In Latin America, The Entrepreneur estimates that the covid-19 caused 24.5 million people to sink into poverty and the effects have also been striking in Mexico. With high public debt and central bank interest rates at almost zero, there is are no easy answers to rebuilding the economy. However, IP enforcement is one proven way to boost economic growth, and there is an obligation for WIPO, governments and IP firms to explore how they can contribute to a recovery.
Fortunately, WIPO is striving to encourage economic growth through IP initiatives that incentivise innovation and entrepreneurship. One of these is WIPO Pearl, which promotes accurate and consistent scientific and technical vocabulary across Patent Cooperation Treaty countries such as Mexico to make it easier to share scientific knowledge and therefore significantly increase rates of technological progress. WIPO Pearl database has over 190,000 terms translated into 10 languages, and in light of the pandemic, WIPO has added a further 147, in hopes of fostering innovations that might help solve covid-19 related issues.
There has been a recent boom in nanotechnologies in developed countries such as the United States and Canada, however, this technology has more applications and potential for scalability in developing countries to solve widespread social issues such as water sanitation. Adding more nanotechnology-relevant terms to WIPO Pearl would facilitate nanotechnology innovation through entrepreneurship in the developing world.
WIPO also carries out field studies to gather data on levels of innovation, IP engagement, causes for entrepreneurs registering patents or trademarks, and structural issues that stand in the way of IP activity. Even though this initiative is merely descriptive, it fills an informational gap that informs government action.
In 2018 WIPO carried out a study in Chile to assess IP activity. First, it gathered simple descriptive data to show the big picture of intellectual property in the country (eg, number of patents filed each year). Then it explored what caused companies to file patents. Finally, it examined which IP activities led to more economic growth and how the Chilean government could encourage these.
The study found that:
- only 2% of Chilean manufacturing companies filed a patent in the year observed, while 52% filed at least one trademark. Chile is heavily reliant on metal exports, and unsurprisingly there was more IP activity in this industry than others;
- Chilean companies that are located in Chile’s capital, Santiago, are significantly more likely to file a patent. Larger firms and those that export goods are also more likely to consider filing trademarks and patents; and
- Chilean firms that decided to file a trademark grew significantly faster and gained more revenue.
In light of these findings, WIPO suggested to the Chilean government that it develop better mechanisms to identify early-stage metal companies growing at a fast pace to provide them with incentives to file patents and trademarks. By adopting a public policy that encourages these types of businesses to engage with IP firms, WIPO thus contributes to more effective government spending that has the proven effect of boosting economic growth.
These studies show that filing patents and trademarks has uses beyond the obvious IP benefits, such as brand protection.
These WIPO studies apply across cultures, for example, though not empirically proven, WIPO has suggested that middle-income and Latin American countries may show the same IP characteristics. Hence, by generalising the findings, other Latin American countries may benefit from adopting advice offered by WIPO.
In the shifting landscape left in the wake of covid-19, countries, companies, and institutions need to find unconventional ways to rebuild their economies. WIPO’s actions to facilitate innovation in all countries need to be utilised to the fullest to create a strong recovery.
IP activity can contribute to global economic recovery following the pandemic. Now more than ever we in the IP community need to be proactive, taking advantage of WIPO resources to either suggest IP-related public policies to governments or encourage companies to file more patents and trademarks.
This is an Insight article, written by a selected partner as part of WTR's co-published content. Read more on Insight
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