Giorgi Gvalia Ilia State University Conference Presentation Conference Organizers: World Intellectual Property Organization (WIPO), Hungarian Intellectual Property Office (HIPO) Hungary, Budapest April 2013

 IP Rights Protection Systems and Economic Growth: Some Theoretical Considerations  Brief Overview of Georgia’s Legislative and Institutional Framework Regulating Intellectual Property Rights  Current Situation in Regards of IP Rights Protection in Georgia  Major Challenges Hindering Efficient Functioning of IP Rights System in Georgia  Brief Overview of Georgia’s Economic and Political Profile  Macro, Meso and Micro Level Factors Hampering Innovative Development in Georgia  Georgia’s Technology Transfer Center (TTCG) – Link Between Private Sector and R&D Institutions  Concluding Remarks

Major Trends in Research on IP Rights and Economic Growth 1. Strong IPR protection systems positively impact economic growth 2. Strong IPR protection systems negatively impact economic growth in transitional economies 3. IPR protection system is just one variable among complex set of variables affecting economic growth 4. The issue of causal direction - Do efficient IPR protection systems lead to economic growth or economic growth leads to efficient IPR protection?

 ENP AP Priority Area – Protection of Intellectual and Industrial Property Rights  The National Intellectual Property Center – Sakpatenti  Interagency Coordination Council for Copyright Protection – Established in 2010

The Major Laws Regulating IP Rights System in Georgia: 1. The Patent Law of Georgia 2. The Trademark Law of Georgia 3. The Law of Georgia on Appellations of Origin and the Geographical Indications of Goods 4. The Law on Topographies on Integrated Circuits 5. The Law on Copyright and Neighboring Rights 6. The Law on Protection of New Varieties of Plants 7. The Law on Border Measures Related to Intellectual Property 8. The Law of Georgia on Design

 Georgian legislation governing Intellectual Property Rights is harmonized with its European equivalent  The major problem – Video Piracy and the use of unlicensed software  According to Business Software Alliance and IDC Global Software Georgia is one of the largest user of pirated software

 Problems in the enforcement of the legislation  Lack of public awareness  Passivity in the business sector  Low indicator of court disputes related to IP Rights  Low level of competence among judges in this area  Lack of trust towards the courts

 Georgia’s Soviet legacy and path dependency  Economic recovery and infrastructural development in the 2000s  The world’s top reformer in “ease of doing business” by the World Bank and International Financial Corporation  Despite the reforms poverty in both rural and urban areas still the major challenge  Georgia is currently at a stage of technology absorption rather than developing innovations  According to the Global Competitiveness Index , Georgia ranks 77 th worldwide.

Source: Competitiveness of Georgia: Analysis and Perspectives, 2010

YearRANK Source: World Economic Forum. The Global Competitiveness Report 2012–2013.

CountryRANK Azerbaijan46 Georgia77 Armenia82 11 Source: World Economic Forum. The Global Competitiveness Report 2012–2013.

 Policy document defining national innovation policy/strategy is not elaborated yet  Poor involvement of the business community in innovation policy elaboration  Lack of education in the field of IPR  Lack of cooperation among universities, R&D institutes and private sector  Low output of patentable ideas (patent activity ratio 0.3)  Low technological level  Low state funding of R&D (around 0.2% of GDP, no data available for private sector investment)  Low qualified labor force

 According to Sakpatenti by December 2011 a total of 45,380 trademarks had been registered  2038 Patents are currently in force (1021 foreigners, 1017 locals)  251 certificates have been issued for design  Majority of trademarks have been registered by large companies, notably by companies engaged in pharmaceutical sector  Pharmaceutical sector - Company ``Aversi Pharma``  Wine and Alcoholic Sector - Company ``Chateau Mukhrani``  Banking Sector - ``Liberty Bank``  Food Sector – Company ``Barambo``

Registration of Intellectual Property and GDP Growth Source: Economic Policy Research Center (EPRC), Sakpatenti

 TTCG could play significant role in efficiently linking private sector and R&D institutions  The major mission of the Center 1. Rise Awareness in the field of Technology Transfer 2. Strengthening Innovative Culture in Georgia 3. Strengthening of MSME Competetiveness  Success story: InnoGeorgia 2012 – Innovation and Technology Transfer Competition

TTCG Government: Sakpatenti and Shota Rustaveli Science Foundation (Min. of Education) Business : Georgian Employers Association, Georgian Chamber of Commerce and Industry, Georgian Small and Medium Enterprise Association Universities Tbilisi State University Ilia State University Batumi Shota Rustaveli State University Agrarian University Kutaisi Akaki Tsereteli State University TTCG Founders and possible partners Other Universities and research organizations. (State Technical University) PMO, MoESD, MoES, GNIA, etc.. Other Business organizations: Business Association of Georgia, other companies. Foreign partners (TTCs, R&D institutions, etc)

33% Educational Sector 33% Private Sector 33% Public Sector

 No One Size Fits all Solution  IP Rights related challenges are multilayered and require complex approach  Better coordination between macro, meso and micro level actors is required  Importance of establishing National Innovation Council  Importance of establishing regional TTCs  More emphasis on public awareness rising activities  More funding for R&D activities  More emphasis on strengthening human capital

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