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WTO Symposium on the 15th Anniversary of the Information Technology Agreement (15 May 2012)
The Information Technology Agreement and Innovation
Wolf Meier-Ewert
Intellectual Property Division
World Trade Organization
WTO Symposium on the 15th Anniversary of the Information Technology Agreement (15 May 2012)
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Scope of this presentation
1. Information Technology and Innovation
2. Evidence from Intellectual Property Indicators
3. Challenges to Innovation in Information Technology
WTO Symposium on the 15th Anniversary of the Information Technology Agreement (15 May 2012)
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1. IT and Innovation
Ministerial Declaration on Trade in Information Technology
Products (13 December 1996)
…
Desiring to achieve maximum freedom of world trade in
information technology products;
Desiring to encourage the continued technological development of
the information technology industry on a world-wide basis;
Mindful of the positive contribution information technology makes
to global economic growth and welfare;
…
WTO Symposium on the 15th Anniversary of the Information Technology Agreement (15 May 2012)
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1. IT and Innovation: Concept
Innovation
“the implementation of a new or significantly improved product (good or service), or process, a new marketing method, or a new organisational method in business practices, workplace organization or external relations”
OECD Oslo Manual (3rd ed. 2005)
in Application Sectors
Organizational innovation
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IT as a General Purpose Technology facilitates innovation across downstream sectors
WTO Symposium on the 15th Anniversary of the Information Technology Agreement (15 May 2012)
IT as a General Purpose Technology
rapid development in itself
wide range of applications throughout the economy
-> organisational improvements, efficiency gains
ability to facilitate technological improvements in downstream sectors
-> “innovational complementarity “
Demand Behaviour for IT multiplies positive trade effects
Price elasticity of demand for IT products
Income elasticity of demand for IT products
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1. IT and Innovation: Multiplying mechanisms
WTO Symposium on the 15th Anniversary of the Information Technology Agreement (15 May 2012)
2. Evidence from Intellectual Property Indicators
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Patent statistics as indicators of Innovation have shortcomings …
only represent a small share of innovation
Innovation not passing patentability criteria is screened out
Protection not sought for all innovations
only represent a particular type of innovation
mostly technological innovation
mostly product innovation – less process innovation
… yet remain useful due to standardization and availability of international data.
WTO Symposium on the 15th Anniversary of the Information Technology Agreement (15 May 2012)
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Japan United States
2. Evidence from IP Indicators: Patent applications
Worldwide patent applications by residents in selected industries: WTO Secretariat based on WIPO Statistics Database and EPO PATSTAT Database, 2011
WTO Symposium on the 15th Anniversary of the Information Technology Agreement (15 May 2012)
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2. Evidence from IP Indicators: Patent applications
Worldwide patent applications by residents in selected industries: WTO Secretariat based on WIPO Statistics Database and EPO PATSTAT Database, 2011
WTO Symposium on the 15th Anniversary of the Information Technology Agreement (15 May 2012)
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2. Evidence from IP Indicators: Patent applications
Worldwide patent applications by residents in selected industries: WTO Secretariat based on WIPO Statistics Database and EPO PATSTAT Database, 2011
WTO Symposium on the 15th Anniversary of the Information Technology Agreement (15 May 2012)
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China
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Worldwide patent applications by residents in selected industries: WTO Secretariat based on WIPO Statistics Database and EPO PATSTAT Database, 2011
2. Evidence from IP Indicators: Patent applications
WTO Symposium on the 15th Anniversary of the Information Technology Agreement (15 May 2012)
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2. Evidence from IP Indicators: Patent applications
Worldwide patent applications by residents in selected industries: WTO Secretariat based on WIPO Statistics Database and EPO PATSTAT Database, 2011
WTO Symposium on the 15th Anniversary of the Information Technology Agreement (15 May 2012)
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Russian Federation
Brazil
Mexico
2. Evidence from IP Indicators: Patent applications
WTO Symposium on the 15th Anniversary of the Information Technology Agreement (15 May 2012)
Since 1996, most top-trading ITA participants have deepened or developed a relative focus of innovative activity in IT-related industries.
Increased trade share of developing country ITA participants is accompanied with a disproportional shift into IT-related innovative activity in these countries.
Illustrates a relationship between trade and manufacturing in certain products, and the use of the intellectual property system for related inventions.
Suggests that high-tech manufacturing can spur high-tech innovation.
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2. Evidence from IP Indicators: Patent applications
WTO Symposium on the 15th Anniversary of the Information Technology Agreement (15 May 2012)
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3. Challenges: The effects of outsourcing
Outsourcing and Offshoring …
generally associated with increased productivity through cost reduction, leading to increased competitiveness, resources for R&D and marketing
… in areas where product design is highly integrated with manufacturing …
outsourcing manufacturing may remove an important feedback loop, and lead to long-term loss of technological competence
ownership structure of manufacturing facilities may influence investment decisions, removing control from OEMs
… may have detrimental effects on the ability to innovate.
will depend on:
degree of independence of R&D from manufacturing
maturity of the manufacturing technology
WTO Symposium on the 15th Anniversary of the Information Technology Agreement (15 May 2012)
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3. Challenges: Strategic use of the Patent System
The Patent System’s original function was to incentivize …
rewarding qualified inventions with temporary exclusive rights
thereby mobilizing market forces and guiding R&D investment
... but if patents are used for increasingly strategic purposes …
patent thickets - leading to strategic patent portfolio acquisitions
rent-seeking by non-practising entities through strategic litigation
… the system’s ability to deliver innovation may be affected.
may block competition and discourage innovation in certain areas
can bind considerable resources for strategic acquisitions or litigation
may lead to sub-optimal research decisions
WTO Symposium on the 15th Anniversary of the Information Technology Agreement (15 May 2012)
Thank You
