Iancu Weighs in on IP Waiver, Critical Role of Patents for SMEs at World IP Day Event

“Property rights are not just good for the economy, they save lives”, Grover Norquist, President of Americans for Tax Reform, said yesterday, speaking at Innovating the Future: Celebrating 2021 World IP Day, which was sponsored by the Property Rights Alliance. Norquist would go on to conclude his brief opening remarks lamenting, “the damage that would be done if some of the critics of intellectual property have their way.”

An Immediate Danger

Norquist was implicitly referring to an IP waiver proposal by South Africa and India, which would allow nations to ignore patent rights relating to COVID-19 related innovations, particularly vaccines. This waiver of the Trade-Related Aspects of Intellectual Property Rights (TRIPS) is a truly bad idea, and one addressed head on by Andrei Iancu, senior adviser to the Renewing America Innovation Project at the Center for Strategic and International Studies and former Director of the United States Patent and Trademark Office (USPTO).

“I think that the waiver proposal is a dangerous proposal for many reasons. One, it is dangerous to innovation,” Iancu explained. “More importantly, the waiver imposes an immediate danger to widespread dissemination of the vaccine.”

Iancu, responding to a question from the audience, explained that large and small companies are collaborating, and cited India, which is going to make 1 billion doses of the vaccine, as an example of success. Such a large dose of the vaccine would make India second only to the United States.

“If you remove IP, companies are going to retreat into their trade secret shells and be less likely to collaborate,” Iancu explained. His culminating point related to his desire to make sure policies are adopted to ensure the world is prepared for the next pandemic.

Furthermore, “if we waive IP rights, and exclude the original manufacturers, how are we going to control the quality of the vaccines that go into people’s arms? How are we going to control for the fake vaccines? Just last week we saw fake Pfizer vaccines,” Iancu said with emphasis. “The system is working well; we have already deployed 1 billion shots, by the end of May it will be 2 billion, by the end of the year it will be 9 to 10 billion shots, enough to vaccinate all adults around the world… the system is working, let it work for its intended purposes.”

The theme for World IP Day this year relates to the importance of IP for SMEs, which make up 90% of the world’s businesses, according to Philippe Baechtold, WIPO Senior Director, PCT Services. SMEs are more likely to achieve high growth in subsequent years. SMEs with intellectual property rights have 68% higher revenue than those that do not own any form of intellectual property rights. SMEs that own a combination of patents, trademarks and design rights, generate double the revenue than companies that do not own any IP rights. Unfortunately, “fewer than 9% of SMEs in Europe own any type of IP rights,” Baechtold explained.

‘Patents are Primarily for SMEs’

Iancu used his primary presentation to tell a story, which is common for his speeches. He told the audience about two engineers who, in the mid 1990s, in the prime of their careers, thought they would strike out on their own. They left really good jobs, depleted their savings, and with really good ideas they received several patents. “TiVO changed the way we watched television,” Iancu said as he revealed the company he was discussing.

The issue for TiVo, Iancu explained, was that big cable and satellite companies decide they did not want to work with TiVo, and when pressed by their customers to incorporate the innovative features included in TiVo products, they decided to copy rather than license. Luckily TiVo had patents, was able to get injunctions and ultimately got nearly $2 billion.

“What would TiVo have done without patents?” Iancu asked. “Patents are critical from an economics point of view.”

Patents increase growth by almost 40%. SMEs create nearly two-thirds of all new jobs. “Now we understand how important patents are to SMEs and how important patents are to the overall economy. “Patents are primarily for SMEs,” Iancu said, because “SMEs have few other tools to win… they do not have economies of scale,” for example. If you want competition, if you want to prevent monopolistic behavior, and you want to give the little guy a shot at winning, you want patents for SMEs, Iancu told the World IP Day virtual audience.