Key Takeaways from the U.S. Chamber’s Latest International IP Index

The U.S. Chamber of Commerce’s Global Innovation Policy Center (GIPC) Recently Released its International IP Index

The U.S. Chamber of Commerce’s Global Innovation Policy Center (GIPC) recently released its International IP Index. The annual report evaluates the intellectual property (IP) environments of 50 world economies and ranks them based on 40 different indicators. The indicators are divided into eight categories of IP protection: patents, copyrights, trademarks, trade secrets, commercialization of IP assets, enforcement, systemic efficiency, and membership and ratification of international treaties.

As in the past, the International IP Index highlights that investment in IP protection leads to tangible economic growth. In fact, IP-driven economies are 55 percent more likely to adopt sophisticated, state-of-the-art technology, and are 26 percent more competitive overall. In addition, these economies are twice as likely to produce and export complex, knowledge-intensive products and 30 percent more likely to attract venture capital and private equity funds.

“The results of this year’s Index illustrate a growing global commitment to IP-driven creativity and innovation,” said David Hirschmann, president and CEO of GIPC. “The majority of countries took steps to strengthen their IP systems and foster an environment that encourages and incentivizes creators to bring their ideas to market. While a clear pack of leaders in IP protection top the rankings, the leadership gap has narrowed in a new global race to the top. There is still work to be done, and we hope governments will use this Index as a blueprint to further improve their IP ecosystems and grow competitive, knowledge-based economies. When countries invest in strong IP systems, we all benefit.”

Significant IP Trends

This year’s International IP Index added several new indicators. Four new indicators focus on commercialization of IP assets and market access: barriers to technology transfer; registration and disclosure requirements of licensing deals; direct government intervention in setting licensing terms; and tax incentives for the creation of IP assets.

In addition, the Index includes two new indicators on trade secrets and systemic efficiency: protection of trade secrets (criminal sanctions) and targeted incentives for the creation and use of IP assets for small and medium-sized enterprises (SMEs).

The United States again received the top overall ranking, earning the distinction of the strongest intellectual property regime in the world. The United States also improved its ranking with respect to patent rights, climbing from the twelfth to second spot.

“The improvement is a result of U.S. Patent and Trademark Office (USPTO) reforms, which amount to a modest course correction while creating greater certainty around the inter partes review (IPR) process,” the report states. “This should help to reduce unpredictability in the patent opposition system in the U.S.”

The report also noted several weaknesses U.S. IP system. They included a 2018 congressional proposal for compulsory licensing as a pharmaceutical cost containment policy; continued uncertainty over patentability for high-tech sectors; and the lack of a targeted legal basis for addressing online piracy in line with other global leaders.

Below are several other key takeaways:

• Increase in global trade disputes: The report notes that the current trade dispute between China and the U.S. brought much-needed attention to long- standing issues that create significant challenges for IP-intensive industries globally.
• Strides by developing countries: In Asia, India’s score improved, climbing eight places in the rankings from 44th in 2018 to 36th in 2019. While broader challenges remain, the increase is a result of specific reforms that better align India’s IP environment with the international IP system, including its accession to the WIPO Internet Treaties, the agreement to initiate a Patent Prosecution Highway (PPH) with Japan, a dedicated set of IP incentives for small business, and administrative reforms to address the patent backlog. In Latin America, the government of Brazil utilized programs and incentives to help SMEs create and register IP assets, serving as a model for how countries can leverage IP. In Argentina, the government introduced reforms to streamline the patenting process, increase international cooperation on IP, and bolster transparency and stakeholder engagement. As a result, Argentina’s overall score increased by 15% and improved in the rankings from 46th in 2018 to 40th in 2019.
• USMCA sets new standard for IP protection internationally: The report highlights that the U.S.-Mexico-Canada Agreement (USMCA) includes provisions to help harmonize and strengthen IP protection across North America, including a 10-year term of regulatory data protection for biologics, more effective trade secrets protection, and stronger enforcement mechanisms against counterfeit goods, including those in-transit. “As the U.S. looks to additional trade negotiations with the UK, Japan, and the EU, future agreements should address the areas where the USMCA falls short of the Index standard on indicators covering secondary liability, statutory damages obligations, and requirements for injunctive-style relief,” the report states.
• Measures that undermine the reliability of patents: The report highlights that several governments have undertaken measures that reduce the reliability of patents as a vehicle for return on investment. Specifically, the governments of Chile, Colombia, and Peru are considering utilizing compulsory licenses on Hepatitis C medicines to address price concerns. “Compulsory licenses undermine legal certainty and jeopardize the availability of future innovative medicines in the region,” the report states.

As the International IP Index highlights, IP protection is increasingly important to the global markets. For businesses which operate internationally, it is essential to protect your trademarks, patents, copyrights, and trade secrets on a global level. For assistance developing a comprehensive worldwide IP protection strategy, we encourage you to contact a member of the Scarinci Hollenbeck Intellectual Property Group.

If you have any questions, please contact us

If you have any questions or if you would like to discuss the matter further, please contact me, David Einhorn, or the Scarinci Hollenbeck attorney with whom you work, at 201-806-3364.