Intellectual Property Week 2021

‘Paving the path to growth and development through the protection of Intellectual Property Rights’ THE JIPO PROJECT Strengthening the IP ecosystem to increase innovation, competitiveness and growth in MSMEs in Jamaica T HE POTENTIAL of intellectual property (IP) as a source of income/revenue is being recognised. In most cases, legal and financial regulations limit the options for IP to be used to leverage its financial potential in national and international markets. The absence of supporting financial structures makes these limits appear insurmountable. Some countries have benefited from the existence of frameworks that have enabled them to leverage the financial potential of IP through auctioning, collateralization, securitisation, direct sell and licensing of IP assets. The Jamaica Intellectual Property Office (JIPO) in 2017 conceptualised and is spearheading a project to interrogate how the existing financial structures and IP ecosystem can be strengthened to recognise and unleash the potential value of IP assets and improve access to finance for IP owners, and increase innovation, competitiveness and growth in Jamaica on that basis. Licensing and selling are well established practices in some countries, while securitisation, collateralization and auctioning are new and evolving. Access to credit remains the primary obstacle for the economic growth of micro, small and medium-sized enterprises (MSMEs). Access to credit is limited to established businesses and persons who own land and generally excludes IP being accepted as collateral. The gaps in IP awareness and the IP ecosystem limits IP collateralization and commercialisation. The Security Interests in Personal Property Act (SIPPA) established the National Collateral Registry to provide increased access to credit for MSMEs. The SIPPA facilitates the use of a wider range of collateral in secured lending, such as inventory and intellectual property, improving access to credit for those with less traditional forms of security. There are obstacles that render it difficult for MSMEs to access finance on the strength of their IP. JIPO is leading a project, ‘Strengthening the IP Ecosystem to Increase Innovation, Competitiveness and Growth in MSMEs in Jamaica’, funded by the Inter-American Development Bank and the Caribbean Development Bank, which seeks to strengthen the IP ecosystem in Jamaica so that MSMEs can leverage their IP assets and obtain financing. This will help to increase their competitiveness and foster innovation, which will contribute to economic growth in Jamaica. The majority of Jamaica’s MSMEs are in the micro-sector. These enterprises have challenges in obtaining financing, as some providers consider them to be risky borrowers, and they are the ones least likely to access funding even when resources are available. Jamaica’s MSME and Entrepreneurship Policy recognises the need for greater financial inclusion, including special treatment for the microenterprise sector and for MSMEs involved in agriculture. The acceptance of IP as collateral can assist MSMEs that have limited access to traditional forms of collateral, such as land. IP valuation is one of the prerequisites for IP collateralization and commercialisation. However, there is limited knowledge of IP valuation generally. So as to facilitate commercial lending using IP as collateral, there is a need to develop a cadre of experts in Jamaica in IP valuation. MSMEs would benefit from tools for valuing and monetising their IP, as it would support their ability to (i) identify and utilise their IP in the valuation of their companies, (ii) increase their knowledge in developing IP monetisation strategies and new revenue streams, and (iii) leverage their IP assets for seeking debt and equity financing to support their firm’s growth. The project supports the implementation of the SIPPA by aiming to establish a framework to facilitate the acceptance of IP as loan collateral and by developing a valuation regime, as well as a road map and action plan for commercialisation, including ways to stimulate a secondary market for IP assets in the event of loan default. This project is part of a broader Government of Jamaica effort to improve the local business climate and to increase support and access to finance for MSMEs to foster the expanded innovation and IP registration by MSMEs, and enlargened contribution to economic growth and international competitiveness. The ultimate aim of the project is to shift public and stakeholder perception and awareness of the benefits of IPR creation, valuation and monetisation. DR. MARCUS GOFFE Deputy Director/Legal Counsel, JIPO +RZ XVLQJ WKH SDWHQW V\VWHP FDQ EHQHoW \RXU micro, small & medium-size enterprise I NTELLECTUAL PROPERTY Rights (IPRs) are important tools to foster a culture of innovation. IPRs include trademarks, copyrights, patents, geographical indication and designs, and protecting them enhances the competitiveness of your micro, small & medium enterprises (MSMEs). Conventionally, enterprises have relied upon physical assets (land, labour and capital) for their growth, but over the years, increasingly, it is becoming the IPRs which determine the growth and bottom line of the enterprises. A patent is the granting of a property right by a sovereign authority to an inventor. This grant provides the inventor exclusive rights to the patented process, innovation, or invention for a designated period in exchange for a comprehensive disclosure of the invention. Similar to patents, utility models protect new technical inventions through granting a limited exclusive right. Utility models provide fast and low-cost protection for technical innovations, since they are usually granted without substantive examination. For this reason, they are more accessible to individual innovators or small and medium-size enterprises (SMEs) than patents, to which they are similar in their principle. In some countries, utility models may be referred to as ‘petty patents’ or‘ innovation patents’. Patent and utility model law aims at safeguarding innovators and inventors of products and processes by granting them certain time-limited rights to control the use of those improvements and inventions. Those rights do not apply to the physical object in which the creation may be embodied into the technical improvements in the product. A patent enables MSMEs to have exclusivity over the exploitation of their innovative products, their technical improvements, thus creating an appropriate incentive for investing in improving their competitiveness. A patent on its own is no guarantee of commercial success. It is a tool that enhances a company’s capacity to benefit from its inventions. In order to provide a tangible benefit to a company, a patent needs to be exploited effectively and will generally make money only if the product is based on sound patent protection and successfully marketed. This will lead to a boost in the firm’s reputation and bargaining power. How can MSMEs use such an intellectual property right to grow their business? Considering the different options for commercialising your patented invention, and making sure that you have a clear and convincing business plan if you decide to take an innovative product to market. • Licensing revenues – Royalty rates and other features of licensing agreements are a function of negotiation, and so it is advisable to seek expert advice when drafting and negotiating licensing agreements. Consider the reasons for granting exclusive/non-exclusive licences, particularly in light of the maturity of the technology and your company’s business strategy. IP adds value at every stage of the value chain, from creative/innovative idea to putting a new, better and cheaper products/service in the market making IP protection and management an inevitable and crucial key of competitive advantage and essential corporate value for the MSMEs in the modern knowledge-based economy. JASONWONGSAM Assistant Patent Manager VII