Needs and Expectations towards the Development of the Tool on the Economic Aspects of IP in Countries in Transition Speaker: Tereza Pigova Lviv, Ukraine22 rd February, 2011 Inter-regional Workshop on Economic Aspects of Intellectual Property (IP)

Economic tool 1.Clarify the true relationship between the intellectual property rights (IPRs) and the economic growth of a country 2.Reinforce the flow of information between the IP offices and the WIPO more transparent and effective cooperation 3.Initiative coming from the region’s IP offices Importance of the economic tool

Today’s agenda 1. Scope of the research 2. Outcome and findings 3. Suggestions for the design of the economic tool

1. Scope of the research a. Research and Development (R&D) b. Economics of IP c. Roster of Consultants Division for Certain Countries in Europe and Asia (33 WIPO member countries) 17 Central European and Baltic states 11 Caucasian, Central Asian and Eastern European countries 5 Mediterranean countries

Unique field experiment Before After Transition from centrally planned economies to market driven economies in the former Soviet bloc and Eastern Europe Changes in the political, legal and economic environment

2. Findings Lack of availability of data Main constraints Information asymmetry

Subject matterAvailableUnavailable Information related to innovation and R&D activities - Institutions - Private and public incentives - National policies and strategies - INNO Report (initiative of the DG for Enterprise and Industry, EC) - UNESCO - Countries’ national academies of science IP infringement - Value of seized products - Policies aimed at preventing counterfeit trade and piracy - Results from seizure on the borders - UNCTAD - OECD - IPRI (International Property Rights Index) Report Filing activities with regard to different types of IPRs - Annual reports of the individual IP offices (sometimes incomplete or missing for recent years or no English translation) Costs and benefits of IPRs enforcement X Actual use and application of patented inventions X Methods of valuing IPX Estimation of costs resulting from counterfeit and piracy X

3. Suggestions What kind of information is needed? 1.Economic data 2.Intellectual Property Rights 3.Innovation Ownership of IP Innovative activities Economic growth Rewards and recognition New products and technologies

Extractable information Number of patents Geographic distribution of inventions Citations Problems due to:  Unclear classification  Intrinsic variability  Classification of patents is not based on their economic significance How to use patents statistics?

Derive information The economic value of a patent The value of patent rights Utilize the information Measure the inventive output Indentify and measure the R&D spillovers Patents remain the best available proxy for innovation. Its uniqueness lies in wide availability and good accessibility of the data; and its industrial, organizational, and technological detail.

Changes in the GDP Increases in per capita income, attainment of a higher living standard Increased entrepreneurial activity How to measure economic growth?

Macroeconomic indicators Microeconomic indicators Economic tool 4. Additional comments

Foreign Direct Investment (FDI) and the investor’s willingness to invest: Country A Country B Increased economic growth The greater the attractiveness of a country, the higher the willingness of the investor to invest

Favorable or Functioning Non-favorable or Non-functioning versus Measure and compare the different IP regimes IPRI REPORT

Country with the most favourable IP environment: Estonia (6.7) Country with the least favourable IP environment: Bosnia and Herzegovina (3.6) The average in countries in North America was 8.2 in Results (for DCEA’s region):

GOVERNMENTS BUSINESSESCONSUMERS Counterfeit and Piracy (C&P) trade: Effects are three-fold

Intangible Tangible Firm’s market value

National IP strategies leading to economic growth Need for more effective and transparent communication Learn from the past Concluding remarks ULTIMATE GOAL

Tereza Pigova +44 (0)