The importance of intellectual property

“Part and parcel of intellectual capital are intellectual properties. These creations of the minds must be respected, developed, and protected.”

Intellectual property (IP) is a catalyst for growth and an important determinant of how businesses will move forward especially in a knowledge-based economy. Intellectual capital is put in high premium wherein intangible assets are valued and regarded. Part and parcel of intellectual capital are intellectual properties. These creations of the mind must be respected, developed and protected.

In business, IP is considered a growth tool involving mind asset creating more opportunity, including the generation of additional revenues. If businesses are to be competitive, the innovative capabilities, such as the ability to create, disseminate and utilize knowledge, must be a major source of competitive advantage and wealth creation. Countries with whom we are active economic partners, such as the US and Japan, take seriously the development and protection of IP.

In the heart of IP advocacy are small and medium enterprises. They need to learn the value added gained from IP – that spending on it, through its development and protection, is not an arbitrary layer. For competitiveness to flourish, businesses should be clear-minded on the value of IP and use it to their advantage.

There are four critical fronts on IP: namely, valuation, commercialization, protection and enforcement. These four fronts guarantee that IPs are properly valued; encouraged to provide solutions to life’s challenges once commercialized; justly protected and rights are enforced. There is a need for a rationalized system that is objective and easily understood in terms of how IP assets are valued. When valued properly, this can be used as collaterals to secure loans. Knowing the economic value of IP assets created and protected will greatly help a business in strategy, licensing, merger and acquisition, taxation and in securing loans easily once a valuation system is in place. The Philippines follows a set guideline of IP valuation, commercialization and information sharing in RA 10555.

On IP commercialization, the Philippines ranks the 73rd most innovative economy in the world out of 127 economies per the 2017 Global Innovation Index — the highlights of which are in the areas of business sophistication (rank 45) arid knowledge and technology outputs (rank 42). However, the Index reflected a need to improve infrastructure, especially on ICT-related infra (rank 72) and human capital and research (rank 95). These rankings manifest the need to further promote innovation and knowledge creation, with which the Philippines abounds. The challenge is identifying the technology the industry needs and how to bridge proponents to possible collaborators in the industry.

The WIPO defines patents as exclusive rights granted to an invention that offers new technical solution to a problem; trademarks, as signs that distinguish goods and services; and copyright, as rights that creators have over literary or artistic works. Protecting IP assets of many businesses will be an incentive for IP owners to make full use of their creations.

Strong IP protection encourages heightened trade and investment opportunities. According to the WTO Trade Policy Review, the Philippines real GDP had grown at an annual average of 6 percent from 2012-2017 during which the per capita GDP had increased and poverty declined. The report says these developments are attributed to the improvement of IP rights protection and the establishment of the Bureau of Copyrights.

The Philippines’ removal from the US Trade Representative list of IPR violators four years in a row contributed to the renewed confidence of our trade and investment partners. In order to create an environment where people are inspired to innovate, and for trade to flourish, IP rights should be protected from infringement and other violations. There must be stricter border control in customs to ensure that counterfeit products do not come in. The influx of counterfeit and pirated goods hurt the economy, particularly owners of IP assets.

Ensuring IP is respected will result in major economic gains. In 2017, an lnternational Trademark Association-commissioned study made by Frontier Economics presented the direct contribution of Trademark intensive industries in the Philippines to be over 17 percent of GDP. The three most trademark-intensive industries in the Philippines are manufacturing, information and communication and construction.

These industries have a snowball effect in terms of competitiveness, employment generation and other economic activities. It is, however, recognized that these remain as challenges as far as IP enforcement is concerned.

Developing IP assets in creating a working IP system ensures a productive and competitive economy in this digital age. The Philippines is a signatory to different treaties on IP, such as the TRIPS agreement, the Madrid Protocol and the Patent Cooperation Treaty.

These treaties have helped IP owners to venture overseas without fear that their assets may not be protected. The Madrid Protocol, for example, has helped with the ease of doing business and considerably has cut the cost of registration. Owners of Marks can now seek registration in countries party to the protocol using a single application to be filed in the National IP Office. Businesses complaint with the IP system, invariably gain a more advantageous position as they clearly practice and uphold the culture of innovation, vital to any business venture.

As Steve Jobs once said, “Innovation distinguishes between a leader and a follower.” One has to be a thousand steps ahead, pioneer and recognize those who do. That is how the IP system works. Society celebrates pioneers and encourages new ones to emerge. It is a never-ending cycle of innovation and creativity. Jess Varela

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