Intellectual Property in
the Digital Economy
PRESENTER: Erica K. Smith
JIPO/WIPO Training for Trainers
Kingston, Jamaica
JUNE 4-6, 2012
The Digital Economy
• As a result of technological changes,
driven by the internet, the primary
driver of economic growth is based on
the ability to innovate, no longer is
competitiveness based on the
ownership of land or the access raw
materials or capital. Thus the
movement to a digital economy based
on the ownership/control of intangible
assets which are exploited digitally.
Definition
The digital economy is the global
network of economic and social
activities that are enabled by
platforms such as the internet,
mobile and sensor networks.
Australian Government,
Department of Broadband,
Communications and the Digital
Economy
Importance of Innovation
“Creativity is one of the last
remaining legal ways of gaining
an unfair advantage over the
competition.” Ed Mcabe
Innovation allows for job creation
and the introduction of new
markets and products E.G. I-pod,
I-pad
Importance of Innovation
Innovation is crucial to
competitive edge, sustainability
and relevance. That makes
Intellectual Property (IP) policy an
increasingly important tool for
stimulating economic growth.
Innovation is based on creativity.
Impact of the Digital
Economy
• Enterprises are required to relook their approach to business –
sales, customer service,
distribution and production
• Such changes are evident
particularly in the creative sector
– new business models for music,
film with streaming, digital
downloads.
Impact of the Digital
Economy
• Digital music revenues up 8% to US$5.2
billion
• Global revenues to record companies grew
by an estimated 8 per cent to US$5.2 billion
in 2011 with strong consumer demand for
both single track downloads (up 11 per cent
by volume), digital albums (up 24 per cent by
volume) and fast-expanding subscription
services. The number of users paying to
subscribe to a music service leapt by 65% in
2011 to 13.4 million worldwide. (IFPI).
Impact of the Digital
Economy
• The other area of growth has been in
the distribution of music on mobile
phones with the most popular format
being master or real tones. It is
estimated that the mobile phone
market will become the largest
distribution channel for music with a
shift in consumer preferences from the
use of clips to the use of phones as a
main form of receiving music.
Size of the Digital
Economy
• According to PWC an estimated 1.8
billion of the world population now
uses the internet, and that number will
grow to almost 2.8 billion by 2015.
• J.P. Morgan expects business-toconsumer e-commerce (excluding
travel) to increase from $572 billion in
2010 to over $1 trillion by 2014.
Size of the Digital
Economy
Research firm IDC estimates total
global e-commerce will be
approximately $16 trillion in 2013.
When added to the global market for
digital products and services the total
size of digital economy is estimated at
$20.4 trillion, equivalent to roughly
13.8% of all sales flowing through the
world economy.
Role of IP in Digital
Economy
• Intellectual Property (patents, trademarks,
copyright, trade secrets, design etc) is the
legal system which underlies creativity.
• IP grants the rights-owner a temporary
monopoly which serves to encourage
creativity by:
• Allowing the rights-owner to earn a return on
investment
• Providing legal protection
Role of IP in Digital
Economy
IP can also act as a barrier to
innovation and creativity if not
properly managed where it is too
expensive to access knowledge,
where it is too complicated to use
– a complaint of the music
industry or where it is goes too far
in obstructing market entry.
Role of IP in Digital
Economy
The challenge is to develop a
system which is flexible to
technology, consumer demand
and particularly for developing
countries allows for affordable
access and development which
meets the needs of country.
Impact on Specific Forms
of IP
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Copyright:
Need for efficient licensing systems
Addressing orphan works
Exceptions and limitations in the digital
environment
Territoriality
Patents:
Strong growth in patents: Use of patent trolls
& thickets: Impact on ability to access
needed technology
Cross Reaching Issues
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Valuation and Financing
Use of IP as collateral and financing
instrument
Recognition of IP on financial
statements
Licensing
Global trade in IP licences worth more
than £600 billion a year or five per
cent of world trade and rising.
Cross Reaching Issues
Piracy/Counterfeit Goods
• The internet offers a number of
advantages to copyright and
trademark infringers including
anonymity, flexibility, a huge market
and market reach and the ability to
deceive consumers about the
products they are purchasing.
Cross Reaching Issues
Piracy remains an enormous barrier to
sustainable growth in digital music.
Globally, one in four internet users
(28%) regularly access unlicensed
services, according to IFPI/Nielsen
Impact on Developing
Countries
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Legislative Framework
Implementation of WIPO Internet and other
relevant treaties
Addressing local priorities
Access to knowledge, medicine, technology
Resource Requirements
Ability to handle large quantities of work
effectively (IPOs)
Effective Collective Management
Organisations (CMOs)
Impact on Developing
Countries
Education: In order to fully engage in the
digital economy and to reap the benefits
thereof our educational system must
promote innovation, creativity and the
exploitation of IP.
Infrastructure: The relevant support
systems need to be in place to enable:
• the enforcement of rights
• a telecommunications systems that is
responsive to changes in technology
Impact on Developing
Countries
• Identity & Culture
• Importantly, with changing
technologies and the widespread
dissemination of cultural goods and
services, there is the possibility of
cultural homogenisation and
marginalisation.
Impact on Developing
Countries
• All of the above must also address the
challenges of the emergence of a
digital divide (inequalities in the
population between those with access
to technology and those without)
which impacts access to knowledge
and information and the ability to fully
participate economically.
Intellectual Property in
the Digital Economy
PRESENTER: Erica K. Smith
JIPO/WIPO Training for Trainers
Kingston, Jamaica
JUNE 4-6, 2012