Defence of intellectual property vital to economic growth

It set up the European Patent Convention in 1973 covering the seven founding countries. Many more have since discovered the benefits of a centralised, strong patent, with 30 members now on board, and two more lining up to join later this year.

The decision to create a central system proved challenging but the right move. The applicant may choose the number of countries to be designated, depending on his needs, as well as the language of procedure between French, English and German.

In 2004, the European Patent Office (EPO) peaked at about 180,000 applications and the projection for 2005 is expected to approach 200,000. To cater for this rapid expansion, the EPO now employs 6,500 people and has become the second largest international organisation in Europe after the European Commission (EC). Almost 600 million inhabitants people its territory.

The EPO works to support innovation, competitiveness and economic growth for the benefit of the citizens of Europe. Through the 60,000 high-quality patents granted in 2004, the EPO seeks to efficiently contribute to this growth.

Demands for Community Trade Mark and Registered Community Design protection also have steadily risen at Office of Harmonisation for the Internal Market (Ohim). In 2004, Ohim received a record breaking 58,000 Community Trade Mark applications, increasing the total number of filings to more than 400,000.

Between 1994 and 2002, demand for patent protection worldwide rose from 2.7 million to 14.5 million in a trend which we expect will continue.

One of the core objectives of the European Union's relations with Asia is to strengthen the mutual trade and investment flows between the two regions. Two-way trade and investment have increased dramatically over recent years. In 2000, Asia accounted for 21% of EU exports making it the third largest regional trading partner.

Early on, the EC explored ways to improve trade and investment between the Association of Southeast Asian Nations (Asean) and EU and chose intellectual property rights (IPR) as one path. In the early 90s, it launched the EC-Asean Patents and Trademarks Programme (Ecap) and later the EC-Asean Intellectual Property Rights Cooperation Programme (Ecap II) to foster the economic exchange between the two blocs by strengthening intellectual property rights protection.

Ecap II focuses on all areas of intellectual property and aims at strengthening these through a comprehensive approach ranging from the legal framework through to the administration of IP rights, their enforcement and public awareness. Ecap II also has a regional component to promote intra-Asean investment.

The EPO and Ohim could serve as models for future possible Asean integration. Ecap II has already implemented more than 90 activities at regional and national levels in Aseann in the form of training courses, seminars, workshops, study tours, technical assistance, automation to name but a few activities. By the end of the programme in December 2006, more than 200 activities will have been undertaken across the Asean region.

IPR is an integral part of the agreements forming the World Trade Organisation (WTO) and are thereby confirmed as a pillar of modern trade. They are emphasised in the agreement on ''Trade Related Aspects of Intellectual Property Rights'' or the TRIPs Agreement. The fact that 148 countries are members of the WTO, and thereby accepting the minimum IPR standards defined therein, is testimony to the importance which countries place on IPR.

The steep increases of 240% in applications for patents since 1995 is caused by the use of the so-called Patent Cooperation Treaty (PCT). The PCT's main advantage is that it is an international filing system open to its 126 members.

In Asean, Indonesia, the Philippines, Singapore and Vietnam are members to the PCT and Malaysia is on the verge of acceding thereto. (Thailand, Brunei, Cambodia, Laos and Burma are the other Asean members.)

The use of the PCT shows the international developments in the field of IPR and the global reach of innovation. Traditionally, patents were often seen as a monopoly right given for a limited period to an innovator. The economic logic, from the very conception of the patent system in 14th century Venice, was that inventors would innovate best in an economy that rewarded their ideas by giving them a temporary exclusive right.

Effectively, the patent system managed two key risks:

From the inventor's perspective, the patent managed the risk of his ideas being stolen and copied.

From the eyes of the Venetian state, the patent managed the risk that valuable knowledge would not be shared.

In the latter part of the 20th century, a market in patent rights has developed. Society has witnessed the emergence of the knowledge economy and a growing dependence on innovation for wealth.

The patenting system today, therefore, no longer manages risks only for inventors and the state, but increasingly for investors, licensees and standards bodies, while serving the needs of consumers as well. In short, it is not the system that has changed so much, as the way in which it is used.

The title of my address shows that the classic reasons for patenting have changed. It has become part of the company strategy to acquire IPR because these, as ''intangible assets'', are becoming more valuable and strategic.

The ''intangible assets'' are being advertised as a competitive advantage of products for companies.

It is sufficient to look at strong trademarks in the luxury goods market such as Louis Vuitton and Chanel where the trademarks have a very high value.

We also see this in other areas such as in the automotive industry where Mercedes Benz, BMW, Peugeot and Renault are premium brands. Brands as well as IP portfolios are becoming an ever-more important part of the companies' assets.

Transfer of IP portfolios is becoming a key issue in mergers and acquisitions. They represent huge values and prospects related to the company profile and development. These are examples where wrong handling of IPR-related issues has cost companies large amounts of money. It is of the utmost importance to actively monitor and study the trends in the field of IPR.

Thanks to the patent system and to the development of the knowledge society, the necessary information regarding technologies embedded in published patents is available free of charge.

The emergence of new important technologies can be forecast by scrutinising statistics and individual filings more closely through the use of electronic tools via the Internet.

The growth in EPO filing numbers between 1991 and 1994 was about 2% on an annual basis, except in the Information and Communications Technology (ICT) area where the growth was close to zero.

Between 1995 and 2001, however, the increase was considerably higher, particularly in the areas of biotechnology and ICT, which experienced an annual 12% increase. Today, new areas are developing, for instance in the field of nanotechnology, which may become the revolution of tomorrow.

IPR has become a strong tool for technological development and investment. A well functioning IPR system needs several links to form a chain. These include:

FA sound legal framework for all the available intellectual property rights: patents, trademarks, industrial designs and copyright. The TRIPs Agreement provides the international guideline for such a legal framework, which gives applicants a degree of guarantee. Most countries have sound legal framework which is being constantly upgraded.

FThe administration of IPRs needs to function properly, with the rights registered, or granted within a reasonable time, and enjoying high quality.

A common concern in this region is the backlogs at local patent offices. Typically such offices are not equipped to meet the high numbers of applications entering the country. Nor do they have a proper professional for drafting local applications.

They also tend to lack staff, particularly in the registration and granting process. The upgrading of patent offices would help develop the technology for protection.

Backlogs still stalk the Asean countries despite efforts to reduce them. Authorities must do their utmost to manage the flow of patents, both from and into a country.

FThe rights granted have to be respected and enforceable. If the IPR is merely a piece of paper, it is of little use to the applicant. Enforcement is usually the most important but also the most difficult issue. It is here where the Asean countries meet their largest hurdle.

A central issue in the area of enforcement is to combat piracy and counterfeiting. Authorities must uunderstand that this problem has to be tackled from different angles depending on the kind of IP rights.

From the patent perspective, counterfeit products may be less visible than pirated copyrights or counterfeit trademarks.

However, patented inventions used in goods are often, in the eyes of the users, invisible. Nevertheless, they represent key content of the product value both in technical and security-related areas. For instance, a mobile phone and a pharmaceutical drug needs to take account of numerous patented inventions as well as a long and expensive development process.

Counterfeit patented products may easily endanger the health of the unaware consumer.

Counterfeiting and piracy are a rampant issue and numerous counterfeit products stem from this part of the world. But it is also true that the counterfeiting is driven by a demand from consumers all over the world, including Europe.

Thailand has developed a unique structure, inspiring to neighbouring countries, through the creation of the Central Intellectual Property and International Trade Court seven years ago. Ecap II is assisting the IP Court in establishing an IP research centre.

The IP Court will also host the Ecap II regional activity on enforcement of IP rights through specialised courts in December 2005. I visited the IP Court in Thailand and was impressed by this dedicated institution.

FAwareness. We need to educate people that intellectual property is also property. A country that secures all four links to form a strong chain will be best equipped to receive, promote and foster innovation.

The patent system not only provides safeguards for investments. It also performs the other vital function of informing the public about patents.

In the EPO's so-called database, there are some 50 million documents of technical literature available, searchable and free of charge to anyone. According to an EC study, 80% of all technology is only available through patent literature. The EPO alone has spent the last 25 years collecting this information dating back to 1836.

If this information is not consulted you are likely to invent something which has already been invented!

The EPO's new policy will be to ensure legal certainty in the patent granting process, raise patent awareness, and promote training in IPR policy, as well as the use of for researchers. It also plans to manage a network addressing the flow from idea to invention, from invention to patent, from patent to innovation and from innovation to market.

Alain Pompidou is president of the European Patent Office. He delivered this speech during a session with members of the EU IPR Network in Thailand on March 25.

Source: Bangkok Post