It‘s the Intellectual Property, stupid!

Sadly, the IP community has for long failed to go out telling the non-IP world – not least the top management of companies and governments alike – in simple, understandable terms what crucial role IP plays and how underestimated its potential in international trade and economic growth is. And how we must change this.

Here is an example. Technology development and technology transfer between the “have’s” and the “have-not’s” are key in obtaining global economic growth in a time when we are looking for ways out of this economic malaise. Take green technology, many disagreements remain as IP is an obstacle to transfer of climate-related (“green”) technologies. Disagreements on the types of measures that should be taken, remain. It is time to take action to overcome them. That is why we need business people and governments that understand this role of IP. Urgently, please.

Three examples, all taken from the same day issue of Financial Times of Friday March 6 struck me to underwrite this theme.

1.  Mistrust between Rich and Poor Hits Green Trade

Cutting-edge green technologies are mostly concentrated in the US and Europe. Yet to stimulate global trade these technologies needs to be disseminated. China maybe a have-not in IP on these areas, they certainly have the know-how to manufacture at low prices and are able to make green techologies more widely used in the world. The have’s, US, Europe and Japan, however are not sharing their technologies, afraid that they are that after transfer of the technology to manufacture, China will copy and come off after the same innovative companies in order to globally compete with them.  Climate change needs international technology transfer, so a big barrier to trade is IP. There must be ways to overcome this obstacle, e.g. by having China to change its IP policies so as to find ways to respect IP and ensure that technology transfer is not followed by copying technologies, rather take a license to manufacture and become a technology partner and respectful of IP. If, in the future, China becomes the new R&D engine and produces its own green IP innovations, well, then the reverse should be true, US, EU and JP companies then should take licenses under this Chinese IP protected green technologies. The reality however is that EU, US and JP are ahead in this technology area, so ….let us get rid of the IP barriers to prevent the tech transfer so badly needed.

2.  China Mobile in research offer

Another example of how removing IP barriers can promote international trade. China Mobile betted on 3G TD-SCMA technology for their wireless handsets. However they have problems to have these function properly. China Mobile wants their so called dual mode handsets being capable of running on both its 3G and 2G wireless networks. So, to solve technology issues and improve innovation, China Mobile acknowledges that its Western, Korean and Japanese counterparts are much more advanced in R&D in these areas. As a result, China Mobile offers to help finance R&D efforts by the same Western, Korean and Japanese companies to solve these technical issues. This would entail technology transfer both ways first from KR, JP, US and EU to China and then, I guess, back to those same companies that helped creating the solutions. That can only happen if the IP systems in China are as good and effective as in the US, Europe, Korea and Japan. As long as these parties consider China to be a risk factor in that they will ultimately disrespect IP and copy what they see and learn, nobody will show “the back his tongue” and no international tech transfer will take place.  Research, necessary to stimulate innovation and stimulate international economies, will then fail to cross borders.

3. “Taiwan looks to transform D-Ram sector. Move to breathe life into Chip Industry

Third example. Taiwan recently created a new company, TMC, to reinvigorate their D-Ram (Dynamic Random Access Memory) industry’s technology to better compete internationally with Korean (Samsung) and US companies. This is Taiwnan’s move to shape up the US$ 23.6 billion global industry. TMC, in order to beef up its industry competitiveness, wants to buy technology from Japanese companies like Elpida, Micron and others. How come Taiwan ended up to be lagging behind in the first place? Intellectual Property is the answer. Taiwanese companies lacked proprietary technologies, so they are now forced to license in the latest technology form third parties. Again, had Taiwanese paid more attention by buying in those proprietary technologies or invest in R&D and translate that into US, EP, KR and JP patents, they would be in a different position all together.

So, It’s the intellectual property, stupid!