The Role of Intellectual Property have begun to generate homegrown improvements. It is logical to expect that the growth of resident innovations will con- in Building Economic Strength tinue to increase number and scope as Brazil’s economy expands. in Developing Countries The WIPO Patent Report (2006) lists the top 20 patent offices around the world according to the total number of patent application filings in 2004, the most recent become appealing places for transnational BY HOWARD L. BERNSTEIN OF SUGHRUE MION PLLC year for available statistics. In addition to companies to do business. the Republic of Korea and the People’s As transnational companies bring their I ntellectual Property Rights (IPR) may Republic of China, the patent offices of technologies to developing countries with seem like a low priority to a country that Brazil, India, Mexico and Argentina are enforceable intellectual property systems, is struggling to ensure the basic needs of also included. 5 The filings in each of these homegrown improvements by local resi- its population. However, it is undeniable dents are spawned. These improvements countries are from resident as well as non- that by attracting investments from compa- may come from the resident subsidiaries of resident inventors. This shows that all of rably wealthy nations, emerging countries these countries are trying to develop their the transnational corporation that intro- can accelerate their own economic growth. own intellectual property, as well as protect duced the foundation technology, from resi- Assuring those wealthy nations that it is foreign investments in their economies. dent individuals, or universities and public safe to outsource their manufacturing to a laboratories. Patent applications from resi- The number of patent applications filed developing country or to bring in their pro- dent filers developing the improvements in a country, while a reflection of at least an prietary manufacturing processes are key will follow. Although these may come later expectation that the patent system will pro- factors in generating investments. vide a measure of protection, is not neces- and be less frequent than those from non- While the United States, Japan, and sarily directly proportional to the strength resident filers, each step forward helps the industrialized European countries remain of that country’s intellectual property pro- local economy and brings expertise, confi- the leaders in patent filings around the dence, and revenue to residents. tection regime. The role of IPRs in devel- world, emerging economies seem to have Eduardo da Motta e Albuquerque, an oping South American countries and other begun recognizing that patents can play a adjunct professor at the Universidade emerging economies cannot be judged by significant role in encouraging investments Federal de Minas Gerais in Brazil, has writ- the number of patent filings alone, as each and stimulating local innovation. 1 Since patent system has its differences as well as ten on several differences between the 1995 there has been a significant increase its similarities with those of mature Brazilian national system of innovation and in the number of patent applications by res- those of developed nations. 4 He notes economies such as the United States, Japan idents and non-residents of economically among the differences (1) the relative and Germany. developing countries, such as the Republic importance in Brazil of patents to individu- of Korea, Peoples Republic of China (PRC), DOES ONE SIZE FIT ALL? als as opposed to firms, suggesting innova- India and countries of South America, such There is a tendency toward internation- tions that required less capital as Argentina, Chile, and Brazil. 2 The rate of alizing the patent systems of the different expenditures; (2) the relative productivity increase appears to follow the developing (in terms of patenting) of firms’ technologi- countries due to the international treaties country’s economic growth, with more fil- cal efforts, noting his view that not only do and agreements such as the World Trade ings in those countries with more advanced Latin American firms under-invest in R&D Organization’s Agreement on Trade related economies. innovation, but that also little patenting Aspects of Intellectual Property Rights Not surprisingly, patent filings by non- (TRIPS). The TRIPs agreement clearly activity results from such a low effort; (3) residents of emerging economies have affects how innovation will be protected in that in Brazil, between 1980 and 1995, increased at a greater rate than the filings 1,207 firms (62% of patent owner firms) developing countries. There remain, how- by country residents 3 . In this age of global- were granted only one patent, and only 35 ever, strong incentives, particularly among ization, transnational companies often look firms were granted at least one patent a immature but emerging economies to adjust to developing countries for their manufac- year in the referenced period, signifying a their patent systems to meet national turing or assembly facilities to reduce labor requirements for economic development. lack of continuity in patenting activity by costs or garner a more supportive govern- The international model of the WTO firms; (4) the relative importance of patent- mental environment than they might find at ing by foreign owned firms; and (5) the may not be the most appropriate system in home. However, these companies are not character of the innovations generated by all cases, according to Naazneen Barma of likely to bring their proprietary technolo- the firms seeking patent protection were the University of California, Berkley. Ms. gies into a country where this intellectual predominately adaptive innovations sug- Barma cautions that an international stan- property can not be protected. Local patent gesting improvements over imported tech- dard may inhibit local innovation. systems become important tools for attract- Developing countries like Argentina, Chile nology from countries with strong ing and protecting these investments. innovation systems by subsidiaries in coun- and Brazil might look to integrate interna- Countries with enforceable intellectual tries with weak systems. tional IP standards into national systems to property protection systems stand out in the Brazil is one example of a country in maximize the benefits of a system that both global marketplace. Those countries which patented, imported technologies protects imported innovation to encourage 14 INTELLECTUAL PROPERTY TODAY NOVEMBER, 2006
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