VentureOutsource.com recently caught up with Dr. Kamil Idris, director general for the World Intellectual Property Organization (WIPO) based in Geneva. (http://www.wipo.int)
In this exclusive interview, read what Dr. Idris says about transferring intellectual property (IP) across borders, managing against potential IP pitfalls and ways company executives can mitigate risk of IP theft, ways to develop and manage your company’s IP in multiple jurisdictions, and more. Transcripts from that discussion follow.
VentureOutsource.com: Globalization is influencing the way companies outsource their product contract manufacturing and the ways in which companies manage their supply chains. As company operations become more extended, new offshoring contract manufacturing destinations are emerging. With regards to creating a patent system that promotes and enhances local economies, what suggestions does the World Intellectual Property Organization (WIPO) have for emerging outsourcing destinations?
Idris: The general message that intellectual property (IP) is an important tool for development, particularly in an economic context in which knowledge, information and ideas are the drivers of economic growth, is relevant to all countries.
In terms of how this is applied and translated into practical benefits is determined by a number of factors including the national policy objectives of a country; the level of political commitment to IP for development, the general level of awareness of the potential of the IP system and of the need to respect IP rights in all quarters of society, the existing legislative and operational infrastructure that is available, the number of skilled IP professionals as well as the existence of an enabling policy environment that encourages innovation and creativity.
VentureOutsource.com: What is being done to address intellectual property pitfalls as a result of globalization?
Idris: Intellectual property pitfalls resulting from globalization can be identified as piracy and counterfeiting, and increased backlogs in the processing of patent applications. Another challenge resulting from globalization is the need to focus greater resources and attention on IP training and the development of IP capacity and human resources.
The communications revolution has also posed significant challenges. It has facilitated an escalation in copyright piracy as creative works can now be distributed, with or without the authorization of the right holder, across the globe by the click of a mouse. Similarly, improved communications have facilitated the massive growth in the manufacture and distribution of counterfeit goods. The human, social, and economic costs of piracy and counterfeiting are enormous and concerted efforts by all stakeholders are required to meaningfully tackle this multi-faceted problem. WIPO plays an important role in tackling these problems at various levels.
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Dr. Kamil Idris Director General World Intellectual Property Organization (WIPO) |
The WIPO Copyright Treaty (WCT) and the WIPO Phonograms and Performances Treaty (WPPT) are a major step forward in bringing the international copyright framework into the digital age. These treaties establish minimum levels of protection for owners of copyright-protected material in the digital environment. WIPO’s Advisory Committee on Enforcement (ACE) also plays an important role as a forum for countries to exchange experiences and to identify opportunities for greater coordination of enforcement procedures.
In addition to the legislative advice it provides, in all aspects of IP, including enforcement issues, WIPO organizes and runs training programs, workshops and seminars both for users of the system and for those who administer IP systems, including judges and customs officials.
Improved communications has also created enormous opportunities in terms of improving access to scientific and technological information contained in patent documents, for example. Increasingly, national patent offices are hosting digitized collections of patent data. This largely untapped resource has the potential to significantly boost economic and technological development by offering easy access to detailed and highly relevant technical information which is useful in identifying appropriate technologies and opportunities for product development.
Globalization has fuelled the search for new export markets for new and improved products and technologies. As a consequence, the volume of international patent applications has exploded, placing greater pressure on various patent offices around the world. Incremental workload at certain patent offices in some cases has increased faster than their capacity to examine patent applications.
For example, the USA had more than 900,000 patents pending in 2005. The Japanese Patent Office had more than 800,000 patents pending in 2005. The added pressure under which many patent offices are operating has highlighted the extent of duplication of effort in the system.
While the number of patent applications pending examination differs significantly from one office to another, it is important to find common ground within the international community on how to overcome these bottlenecks. This is clearly a priority for users of the system who are seeking affordable and efficient IP services and WIPO is providing a forum for these discussions.
Growing recognition of the pivotal importance of IP as a strategically important economic policy instrument has also triggered growing demand for assistance in building IP infrastructural capacity and in training specialists for national IP administration systems. Moreover, as stakeholders become increasingly aware of IP’s commercial importance, so demand for training courses on IP for business is growing. There is an urgent need for additional resources to be devoted to the development of the IP human resource capacity, in particular, of developing countries and economies in transition to a market economy.
VentureOutsource.com: Varying levels of patent enforceability across the globe, from jurisdiction to jurisdiction, make it difficult for technology companies not only to decide which locations to spend valuable resources on when filing patents, but also, which outsourcing destinations their company can feel ‘most comfortable’ outsourcing to. What are some things you feel can be done to create more uniform patent enforceability across the globe?
Idris: The TRIPS Agreement (trade-related aspects of intellectual property rights) formulates a set of IP enforcement-related standards which must exist in the legal systems of contracting parties. These measures include civil and administrative procedures and remedies, provisional measures, and, in certain cases, border measures and criminal sanctions. While part III of the TRIPS Agreement provides a comprehensive set of IP enforcement-related provisions in a multilateral instrument, it nevertheless leaves room for national implementation.
Much more than national laws dealing with the substantive protection of IP rights, IP enforcement legislation typically is deeply rooted in legal tradition and national rules on procedure. In this sense, the TRIPS enforcement provisions are minimum standards, giving countries broad flexibility to determine further details.
Countries are also free to establish more strict IP enforcement standards, as long as an adequate balance is maintained, especially with regard to safeguards against abusive practices and barriers to legitimate trade. At the same time, part III of the TRIPS Agreement provides for a range of optional provisions enabling countries to decide whether or not to make use of certain enforcement mechanisms. It should be noted that least developed countries (LDCs) are not obliged to implement TRIPS standards, including in field of enforcement, before July 2013.
Thus, only limited level of harmonization of IP enforcement legislation exists around the globe. Significant differences remain at national levels, including in the field of patent enforcement. Prominent examples include the varying levels of damage awards granted in patent litigation in different jurisdictions and the differing approaches to the role of equity considerations in patent claims for injunctive relief.
Whether or not further international harmonization of enforcement legislation is desirable is viewed differently among countries. In the near future a global ‘TRIPS-plus’ harmonization in the field of enforcement appears unlikely. It is recalled, however, that many developing and developed countries already apply higher standards of IP enforcement.
While WIPO, as an intergovernmental organization, is committed to support the evolution of global legal frameworks, harmonization in the field of IP enforcement is a matter that rests with member states.
VentureOutsource.com: With regard to outsourced manufactured products being offshored, and their respective transfer of technologies across borders / jurisdictions, what are some activities manufacturing company executives can do to avoid technology transfer disputes? What are some activities companies can do to manage and resolve technology transfer disputes when they do surface?
Idris: Companies operating internationally need to be vigilant in protecting and managing IP assets. All companies stand to gain from having an IP-focused business strategy. A proactive approach to management of IP assets enables companies to maximize the use and value of their IP assets. Technology transfer is one of the objectives of the patent system.
Companies seeking to enter technology transfer agreements should exercise due diligence in selecting partners, build trust through transparent dealings, and carefully draw up contracts and terms of engagement.
Companies can circumvent a number of problems by clearly setting out requirements at the beginning of the relationship, regularly reviewing agreements and establishing regular contact with the partner company to facilitate resolution of nascent problems.The terms of the agreement or contract should be drawn up by a lawyer specializing in this field and should cover both parties, bearing in mind the applicable law of both countries.
The agreement or contract should define in detail, such items as the scope of the technology transfer including reference to products, processes, payment terms, royalties, training, the duration of the agreement and arrangements to be followed in the event of a dispute arising between the parties concerned.
As technology-transfer agreements and licensing programs abound in an integrated global market place, so too disputes become more common.
Good contracts and licensing practices anticipate that disputes may arise and make arrangements for effective resolution of disputes. Given the drawbacks of litigation in multiple jurisdictions, (e.g. negative publicity, expense, complexity, risk (different outcomes may result in different jurisdictions) and time), alternative dispute resolution (ADR) strategies, such as, arbitration and mediation may be more effective and practical options.
Such ADR strategies do not work through formal legal systems but are set up by the parties concerned. Given the likelihood of disputes arising, companies involved in multiple partnerships / licensing arrangements are advised to develop a dispute-prevention and resolution strategy. The WIPO Arbitration and Mediation Center offers a number of ADR services which may be useful for companies involved in technology transfer disputes.
VentureOutsource.com: Which parts of the US patent system do you feel could be looked at more carefully and possibly changed? (i.e., eliminate first-to-invent, increase obviousness standards) Why these particular parts?
Idris: It would not be appropriate for me to comment on the national patent law of any one country. The reform of the US patent system is something for U.S. decision-makers to ponder and decide.
The USA is a strong advocate of IP and actively participates in all aspects of our organization’s work, be it norm-setting, capacity-building or the services we provide to industry and the private sector.
I am sure that the reform process that is on-going at the moment will result in a patent system that best suits the country’s needs and expectations as a leading player in an increasingly internationalized commercial and trading environment.
VentureOutsource.com: Someone once said “a lock only keeps an honest man honest.” With regard to global protection systems, no system is truly perfect. There is always room for improvement. With this in mind, which three (3) jurisdictions do you feel currently have the best, or most fair, or most practical patent systems in place at this particular point in time? Why these three?
Idris: There is no simple answer to this question. A simple ranking of countries would obscure the complex reality and developments taking place in many jurisdictions.
For example, if you measure the performance of countries in terms of their use of the international patent system for 2006 the list was topped by applications from the USA, Japan, Germany, and Republic of Korea. This said, the US and Japanese offices both have significant backlogs in the processing of patent applications.
On the other hand, patent offices in Singapore and Israel do an excellent job in processing patent applications, but have a more modest workload. Still, other patent offices, such as in India and Brazil, have made substantial progress in upgrading their operations.
As for the ‘most fair’ patent system, one should not forget the notion of ‘fairness’ is an integral part of the patent system. Indeed, the effectiveness of the patent system hinges on its ability to strike an appropriate balance between the interests of inventors and creators and those of the general public.
The TRIPS Agreement establishes a widespread minimum standard of IP protection in a large number of countries. It is WIPO’s task to facilitate the evolution of the international IP framework in such a way that it continues to meet the needs and emerging concerns of all stakeholders. This goes hand-in-hand with our mandate to support efforts to strengthen effective use of the IP system in all countries.
It should be noted that WIPO treaties relating to international IP norms, establish minimum standards of protection. They are drafted in general terms, and necessarily so, in order to enable contracting parties, to integrate their international treaty obligations into national legislation in a manner that conforms with national law and practice.
Moreover, these treaties outline various options, exceptions and limitations which may be applied under certain circumstances and at the discretion of a given member state. In light of this, companies seeking to invest in any given country are advised to consult the relevant national IP legislation.
VentureOutsource.com: In 2004, the Patent Cooperation Treaty (PCT) topped one million applications worldwide. Meanwhile, innovation continues to drive economic growth. Are there any changes in store for PCT practice? What are your thoughts on addressing patent trolls relative to the United States? What is the level of concern for patent trolls on a worldwide basis?
Idris: The PCT is an extremely dynamic system and there are constant changes made to improve its functionality, provide new protections and new services to PCT applicants, and to increase the PCT’s usefulness as a tool for those seeking international patent protection for their inventions. Recent PCT developments include amendments to the PCT Regulations which entered into force on April 1, 2007 and which provided for:
- allowing a priority claim to remain in a PCT application even if the PCT application was not filed within the Paris Convention 12 month period (under certain conditions and along the lines of what is contained in the Patent Law Treaty (PLT));
- the incorporation by reference of the content of the priority application in a PCT application which can be used to remedy missing elements or parts in the PCT application;
- the adjustment of the standard of obviousness required for the rectification of obvious mistakes, to make this procedure more usable; and
- the addition of patent documents of the Republic of Korea to the PCT minimum documentation, which all PCT International Searching Authorities are required to use when they produce international search reports and the written opinions on potential patentability.
Furthermore, the PCT Assembly in October 2007 approved the appointment of the Indian Patent Office and the Brazilian National Institute of Industrial Property as PCT International Searching and International Preliminary Examining Authorities, bringing the total number of such authorities to 15. Additionally:
- the amendment of the PCT Regulations to add Korean and Portuguese as languages in which international applications may be published; and
- the establishment of a supplementary international search system to enable PCT applicants to find additional relevant prior art at an early stage and in additional languages. This new system, which will be available from 2009, will give applicants the possibility to request international searches by Authorities in addition to the main search.
While there are always new issues and proposals for further PCT modification that are under discussion, the PCT is also making progress with practical matters such as creating a system through which the International Bureau can obtain priority documents directly from the issuing offices, thus eliminating the need for applicants to furnish them. Additionally:
- extending the information published online concerning the countries in which PCT applications have entered the national phase;
- creating a private file inspection system for PCT applications, allowing applicants and their representatives secure access to status information;
- adding patent landscaping tools to its PCT search website (http://www.wipo.int/patentscope/en/);
- creating multilingual terminology databases which will result in cross-language searching of published PCT applications; and
- assisting national patent offices by scanning, optical character recognition (OCR) and hosting national patent collections
As for the second part of your question, as I mentioned earlier, WIPO renders advice to its member states at their request but does not comment on the results of multilateral or bilateral agreements in the field of the enforcement of IP rights. Likewise, WIPO does not publicly argue in favor of, or against, changes in IP enforcement policy of governments of member states or business practices.
Generally speaking, there appears to be an increasing number of entities which are not active in the development of technology, but specialize in acquiring and holding patents, in order to generate licensing revenues.
Sometimes such entities seek to obtain excessive royalties, which may undermine either the development of other technologies or the application of a standard, if the patent(s) in question relate to standardization. Such behavior may lead to high royalty levels and conflict with the main objective of the patent system, which is to use private resources to achieve innovative products useful to society, in general.
VentureOutsource.com: Knowledge-based economies help drive growth and contribute to the GDP for developed and developing nations. Some knowledge can be considered competitive intelligence and is what helps define a nation’s future. Meanwhile, Free Trade is not necessarily Fair Trade. With these points in mind and, given WIPO is a global organization, what are WIPO’s thoughts on multilateral treaties?
Idris: WIPO is committed to multilateralism. As an intergovernmental organization, the Organization is a forum for its membership, which currently counts 184 countries, to address both long-standing and emerging issues in the field of IP.
If we are to ensure the international IP system continues to evolve in line with an ever-changing technological environment we need to ensure all countries have a voice in developing durable and practical solutions.
WIPO is committed to inclusive dialogue with all stakeholders. This is a pre-requisite, we believe, for building broad-based understanding of and workable solutions for the complex issues the IP community is facing in a dynamic technological and political environment.
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