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!