GIPC IP Index 2017 Report
GIPC IP Index 2017 Report
OF INNOVATION
U.S. Chamber International IP Index | Fifth Edition | February 2017
R&D
expenditure Access to
advanced
technologies
Access to
Access to licensed music
venture outlets
capital
Cutting-edge Increase in
clinical high-value
research jobs
IP
U.S. Chamber International IP Index | Fifth Edition
1. Foreword
Welcome to the fifth edition of the U.S. Chamber International IP Index, “The
Roots of Innovation.” This year’s index recognizes the indispensable role of
intellectual property (IP), in facilitating innovative and creative activity on a
socially transformative scale.
Each economy in the Index presents a unique IP profile. As this Index has
grown from 11 economies in its first edition to 45 in the current publication,
it has become exceedingly clear that just as elections matter, so do IP policy
choices. These choices are not simply a matter of East versus West, developed
versus less-developed, or rich versus poor. Rather, the Index represents a
broad spectrum of sovereign policy choices. Those choices have important
consequences for each economy’s innovative and creative success, and for the
collective welfare of all the world’s citizens.
In many ways, 2016 was a challenging year for global IP policy. New data revealed that the problem of global
counterfeiting has more than doubled since 2008, amounting to $461 billion annually. A strengthened global
benchmark for IP standards was delayed by political opposition to the Trans-Pacific Partnership Agreement.
Countries all around the globe—from the most established markets to fledgling new governments—grappled
with the question of whether to move forward, innovating and evolving in a new era of globalization.
Nevertheless, the record of five editions of the Index clearly shows that countries of every region, size, and income
level are increasingly investing in IP infrastructure as a tool for development, a stimulus for jobs and economic
growth, and a catalyst for domestic innovation and creativity.
The roots are well-established—let seven billion flowers of innovation and creativity bloom.
David Hirschmann
President and CEO
Global Intellectual Property Center
U.S. Chamber of Commerce
[ www.uschamber.com/ipindex I ]
THE ROOTS OF INNOVATION
35
30
25
20
15.22 15.24
14.83 15.14
15 14.34
13.95 14.06 14.18
13.23
12.70
11.78
10.97
10.34 10.59
10.05
9.53 9.64
10 9.34 9.38
8.75
8.37
6.88
0
Venezuela
Pakistan
India
Algeria
Egypt
Thailand
Indonesia
Argentina
Vietnam
Ecuador
Nigeria
Philippines
South Africa
Brazil
Kenya
Ukraine
Brunei
Peru
China
Chile
Colombia
UAE
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U.S. Chamber International IP Index | Fifth Edition
32.39 32.62
31.92
31.29
30.87 30.99
29.86
28.31 28.62
27.48 27.73
27.07
25.39
24.05
23.00
22.27
21.44
20.59
17.19
16.87
15.80 15.98
15.53
Russia
Turkey
Saudi Arabia
Mexico
Malaysia
Taiwan
Canada
Israel
Poland
New Zealand
Hungary
Australia
Spain
Italy
South Korea
Singapore
Switzerland
France
Sweden
Japan
Germany
UK
U.S.
[ www.uschamber.com/ipindex III ]
THE ROOTS OF INNOVATION
2. Executive Summary
The world’s leading economies view intellectual Over the past five years, the U.S. Chamber’s
property (IP) standards as essential to the success of International IP Index has provided a valuable tool by
any 21st century economy. IP provides the living and which to gauge the global IP environment. Now, the
growing roots that stimulate innovation and bolster fifth edition of the Chamber’s Index, “The Roots of
growth. And those with the strongest IP systems stand Innovation,” offers a roadmap for policymakers and
to reap the greatest economic rewards. thought leaders to enhance their competitiveness
through stronger IP. It is a playbook for those looking
to attract the world’s best and brightest.
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U.S. Chamber International IP Index | Fifth Edition
Economies are scored against 6 categories of IP •. A number of countries, ranging from China and
protection: patents, copyrights, trademarks, trade Pakistan to the UAE and Sweden, introduced
secrets and market access, enforcement, and new enforcement mechanisms and specialized IP
ratification of international treaties. The 2017 Index courts to better combat counterfeiting and piracy.
includes 5 new indicators to better capture an
economy’s overall IP environment in a continuously •. Free trade agreements (FTAs), including the
evolving digital age. Additionally, the fifth edition TPP and the Comprehensive Economic Trade
includes an analysis of the standards included in Agreement (CETA), were signed in 2016, as
the Trade-Related Aspects of Intellectual Property well as a number of bilateral FTAs that helped
Rights (TRIPS) agreement and the final text of raise the bar for protection of life sciences IP,
the Trans-Pacific Partnership (TPP) against the copyrighted content online, and enforcement
benchmarks included in the Index. This analysis against IP theft.
illustrates the ways that trade agreements have
progressively raised the bar for IP standards around •. Multiple governments undertook a review of
the world in a 21st century global marketplace. their IP laws, recognizing that such laws must
keep pace with the emerging challenges IP
Key Findings owners face. In South Korea, amendments to
the Patent Law helped streamline and expedite
The 2017 Index reveals a number of IP trends that the patent examination process. Likewise, the
emerged over the past year. In a difficult global government of Taiwan began a review of its
environment, countries continue to make a conscious IP laws, in an effort to better comply with the
policy decision to invest in stronger IP. Even countries standards included in the TPP.
that have historically viewed IP negatively are
implementing nuanced changes to their IP systems. •. Economies recognized the value of leveraging
This illustrates the continued importance of IP international partnerships through Patent
investment for countries across all regions and levels Prosecution Highways (PPH). Countries that
of economic development. Positive IP developments signed PPH agreements in 2016 include
highlighted in the Index include the following: Argentina, Chile, Colombia, Mexico, Peru, the
Philippines, and Vietnam.
•. A pack of global IP leaders emerged among
the 2017 Index rankings, with the U.S., UK, Despite these positive developments, some countries
Japan, and European Union (EU) economies took steps to restrict IP rights in 2016:
ranked more closely together than ever. Notably,
Japan’s score increased by 10% since 2016 due •. Ecuador, Russia, and South Africa introduced
to the ratification of TPP and accession to the new requirements for local production,
treaties covered in the Index. procurement, and manufacturing.
[ www.uschamber.com/ipindex V ]
THE ROOTS OF INNOVATION
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U.S. Chamber International IP Index | Fifth Edition
Contents
1. Foreword........................................................................................................................ I
2. Executive Summary....................................................................................................IV
7. Economy Overviews..................................................................................................25
Algeria..........................................................................................................................26
Argentina......................................................................................................................28
Australia........................................................................................................................30
Brazil.............................................................................................................................32
Brunei............................................................................................................................34
Canada.........................................................................................................................36
Chile..............................................................................................................................38
China.............................................................................................................................40
Colombia......................................................................................................................43
Ecuador........................................................................................................................45
Egypt.............................................................................................................................47
France...........................................................................................................................49
Germany.......................................................................................................................51
Hungary........................................................................................................................53
India..............................................................................................................................55
Indonesia......................................................................................................................57
Israel..............................................................................................................................59
Italy................................................................................................................................61
Japan............................................................................................................................63
Kenya............................................................................................................................65
Malaysia........................................................................................................................67
Mexico..........................................................................................................................69
New Zealand................................................................................................................71
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THE ROOTS OF INNOVATION
Nigeria..........................................................................................................................73
Pakistan.........................................................................................................................75
Peru...............................................................................................................................77
Philippines....................................................................................................................79
Poland...........................................................................................................................81
Russia............................................................................................................................83
Saudi Arabia.................................................................................................................85
Singapore.....................................................................................................................87
South Africa..................................................................................................................89
South Korea..................................................................................................................91
Spain.............................................................................................................................93
Sweden.........................................................................................................................95
Switzerland...................................................................................................................97
Taiwan...........................................................................................................................99
Thailand......................................................................................................................101
Turkey..........................................................................................................................103
Ukraine........................................................................................................................105
United Arab Emirates................................................................................................107
United Kingdom........................................................................................................109
United States..............................................................................................................111
Venezuela...................................................................................................................113
Vietnam.......................................................................................................................115
Endnotes...........................................................................................................................135
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U.S. Chamber International IP Index | Fifth Edition
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THE ROOTS OF INNOVATION
In addition to geographic diversity, the Index also an overview of all 45 economies sampled in the fifth
contains economies from a broad spectrum of income edition of the Index according to income group as
groups as defined by the World Bank. Table 2 provides defined by the World Bank.
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U.S. Chamber International IP Index | Fifth Edition
Five new indicators These indicators include new areas of IP, such as
design rights, as well as growing areas of concern
A significant new feature of the fifth edition of the to rights-holders including patent opposition
Index is the addition of five new indicators bringing proceedings and barriers to licensing agreements.
the total number of indicators included in the Index to Below Table 3 provides an overview of the five new
35. Consequently, the maximum possible score on the indicators and the Index categories to which they have
Index has also increased from 30 to 35. been added.
Category 4: Trade Secrets & Regulatory and administrative barriers to the commercialization
Market Access of IP assets
The new indicators are defined and described in full The second and third new indicators are from a new
in the Methodology section included in the Annex at area of IP covered in the Index: industrial design
the back of this report. Below is a summary overview of rights. These indicators measure the maximum term
each new indicator and what they seek to measure. of protection being offered (including renewable
periods) for design rights and the extent to which
The first indicator added relates to patent opposition economies have in place and apply laws and
proceedings. Specifically, the indicator measures the procedures that provide necessary exclusive rights
availability of mechanisms for opposing patents in (including making, marketing, trading, and use of an
a manner that does not delay the granting of a industrial design), respectively.
patent (in contrast to a right of opposition before the
patent is granted) and ensures fair and transparent
opposition proceedings.
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THE ROOTS OF INNOVATION
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U.S. Chamber International IP Index | Fifth Edition
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THE ROOTS OF INNOVATION
For example, IP rights display a strong relationship development that support these sectors. In fact, the
with the growth of knowledge-intensive jobs (0.72) correlations shows that IP plays a role in facilitating
and the development of competitive local high-tech many of the necessary “inputs” to the knowledge-
sectors (0.80). But the correlations also reveal that based economy. On this basis the correlations are
IP drives the research, partnerships, and technology divided into four themes or phases of the innovation
and creativity life-cycle (as illustrated in Figure 1):
Resources
dedicated to
innovation
Access to
technologies and
creative content
1). Resources dedicated to innovation: The market), human capital (like researchers and
correlations in this theme show that IP protection technicians), and technological infrastructure.
is a key enabling factor of R&D, working in Economies that provide a robust IP environment
tandem with other factors such as financing are also more likely to embrace policies that
(including spending directed to R&D and create a complete innovation “ecosystem” by
a vibrant venture capital and private equity investing in other key building blocks.
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U.S. Chamber International IP Index | Fifth Edition
2). R&D and creative activities: The correlations create high-value jobs, and raise income and
in this theme indicate that IP rights are productivity. Here, as in the other themes,
linked to actual innovation—to discovery, IP is strongly related to measures of foreign
development, and production of new direct investment (FDI), business and industrial
technologies and creative works. Economies growth, jobs, and gross domestic product
that exhibit a steady buzz of innovation and (GDP), ultimately providing the basis for
creativity are, with few exceptions, those that re-investment of resources as the virtuous
have put in place strong IP environments— cycle begins anew.
both generally and for specific high-tech
sectors. The opposite is also true: on the . The correlations within each theme examine
whole, those economies with relatively weaker the impact of IP on the overall economy
IP environments do not tend to experience as well as for specific IP-related sectors,
the levels of R&D and release of new content including the biomedical, information and
that economies with more secure and stable IP communications technology (ICT), and
environments do. creative content sectors. This not only allows
for a clear picture of the wider socioeconomic
3). Access to technologies and creative benefits of a supportive IP environment
content: Economies with strong IP protection overall but also illustrates the advantages for
are also those that tend to successfully key high-tech sectors when specific rights
commercialize R&D and enable distribution important for a given sector are provided.
and sale of resulting products and services.
The correlations in this theme suggest that IP . Table 4 presents the main findings of the
protection displays a strong relationship with analysis in this Annex.
greater access to end products and services
that make novel technologies and content
available to consumers. The correlations
support the economic notion that IP is an
important platform driving and enabling
innovative entities to actually develop new
technologies into valuable and useful products
and make them broadly available to an
economy’s customers.
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THE ROOTS OF INNOVATION
R&D expenditure 0.70 Over 40% more likely to secure private investment in R&D
Access to venture capital (VC) 0.77 45% more likely to attract VC and private equity (PE) funds
Online creativity 0.85 More than 4 times the amount of online creativity
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U.S. Chamber International IP Index | Fifth Edition
Wider and more convenient More than double the level of advanced and
0.61
access to video content easy-access home entertainment
Overall business environment 0.80 68% more likely to have a supportive business climate
Foreign direct
0.78 Nearly 50% more attractive to foreign investors
investment-attractiveness
Biomedical foreign direct
0.67 15 times more investment in the life sciences
investment
Nearly double the workforce concentrated in
Increase in high-value jobs 0.72
knowledge-intensive sectors
Added value of properly licensed As much as 10 times greater positive impact on GDP of
0.85
software strong ICT-related IP
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THE ROOTS OF INNOVATION
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U.S. Chamber International IP Index | Fifth Edition
To generate an Index approximation for TRIPS, copyright infringement online, TRIPS Articles 9 and 14
imagine that the TRIPS Agreement is the IP law in provide for basic exclusive rights for copyright holders
force in a given economy and that the economy has such as right of reproduction and public performance;
implemented the principles and rules in TRIPS in they do not specifically address the digital sphere and
line with current standards of interpretation in place so cannot be equated to a full point on the Index.
in the most established IP jurisdictions worldwide.
In that light, all of the provisions in TRIPS that may Translating TRIPS provisions into scores for the
be considered equivalent to the 35 indicators in the remaining relevant Index indicators, the TRIPS
Index may be isolated and translated into scores. Agreement ultimately receives an overall Index score
However, as mentioned, certain indicators from the of 16.63.vi This score represents less than 50% of the
Index are inherently not applicable or possible to total Index benchmark and, even when removing
examine. These include numerical indicators such as nonapplicable indicators, just about 50% of the
rates of physical counterfeiting and piracy as well as Index standard. It is striking that despite establishing
membership in treaties that were introduced after the an important level of IP protection globally, TRIPS
TRIPS Agreement entered into force. standards still represent a rather low bar of national
IP protection worldwide, especially when considering
Leaving these indicators aside, it is possible to the technological developments and economic
compare the remaining 29 Index indicators to TRIPS realities faced today, 20 years since its introduction.
provisions. In doing so, it is clear that some provisions To compete today, economies need to look beyond
in TRIPS are fully equivalent to the Index indicators, TRIPS to higher IP standards as roadmaps for
whereas others only partially address the Index criteria. enhancing innovation and economic growth.
For example, the term of industrial design protection
(indicator 20) outlined in Article 26 of TRIPS is “at
least 10 years”; in light of the Index’s benchmark of
25 years (based on the maximum term of protection
afforded in the EU), the score for TRIPS for this
indicator would be 0.4 out of a possible score of 1.
Looking at a more substantive indicator—for example,
indicator 2 on patentability criteria—sets forth three
substantive criteria: novelty, inventiveness, and
industrial applicability. Assuming prevailing standards
of interpretation of this article in the biggest and
most established patent offices in the world—such
as the European Patent Office (EPO), Japan Patent
Office (JPO), and U.S. Patent and Trademark Office
(USPTO)—TRIPS receives a full point for indicator 2. In
contrast, in relation to indicator 10 on legal measures
providing necessary exclusive rights to prevent
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THE ROOTS OF INNOVATION
35.0
35
30
25
20
16.63
15
10
0
TRIPS Index
5.3 TPP from the perspective of the Index Breaking down the TPP
In similar fashion, it is instructive to assess the Index Similar to the exercise carried out in the preceding
against a more recent standard, the TPP agreement, subsection on TRIPS, the first step in comparing
which was signed just under 22 years after the the Index to the TPP is to compare the individual
TRIPS agreement. Innovation-driven and intimately components of the TPP (the articles) with the 35
interlinked, the economic relationships between indicators that together constitute the Index. Through
nation-states today are fundamentally different than this comparison, it is possible to isolate specific articles
they were in the mid-1990s. Dramatic changes in as points of comparison to Index indicators.
technology and the structure of the global economy
mean that future trade agreements should be As with the TRIPS treaty, a number of indicators from
more comprehensive and detailed than preceding the Index are simply not applicable and are therefore
multilateral trade agreements. A great deal of not used within this comparison. These indicators
opportunity continues to exist in the IP space and with include, for example, rates of physical counterfeiting
regards to the IP standards established in the TPP. and estimated rates of software piracy, which are not
part of the remit of the TPP and thus cannot form a
point of comparison.
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U.S. Chamber International IP Index | Fifth Edition
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THE ROOTS OF INNOVATION
with regard to the placement of localization and Figure 3 compares the TRIPS, TPP, and Index.
licensing barriers. These barriers are not addressed at
all in the IP chapter of the TPP, and localization as such Looking at the three standards side by side, it is clear
is only tangentially addressed in the TPP’s Trade and that international standards for the protection of IP
Services section (chapter 10) and Technical Barriers to remain a work in progress. TRIPS provided an essential
Trade (chapter 8). foundation for global IP rules. The TPP built upon
those standards, but opportunities remain to further
35.0
35
30
25.39
25
20
16.63
15
10
0
TRIPS TPP Index
improve the IP provisions in future trade agreements. of the Index, barring Canada and New Zealand, all
Judging by the top performers in this year’s Index— exceed the total TPP score—the most innovative and
the U.S., the vast majority of EU member states, and competitive economies in the world have IP standards
developed economies included in the fifth edition that substantially exceed even that of the TPP.
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U.S. Chamber International IP Index | Fifth Edition
Trade Multilateralism
From a purely IP policy perspective, the biggest Questions like these have been posed for all major
developments and pendulum swing from near forms of IP rights, but perhaps they have been
certainty to uncertainty occurred in the area of trade, most pronounced recently in the area of access to
where two potentially groundbreaking treaties were medicines. Specifically, in September 2016, the UN
finally signed after years of negotiations: the Trans- High-Level Panel on Access to Medicines released
Pacific Partnership and the EU-Canada Comprehensive its final report and recommendations, based on a
Economic and Trade Agreement. premise that IP rights are inimical to human rights.
Unfortunately, the panel’s mandate and thus the
The CETA agreement provides the promise of finally resulting report had a narrow, misguided focus on
bringing much of Canada’s national IP environment perceived inconsistencies between IP rights and
into the modern era and aligned with international best access to medicines as opposed to the wider political,
practices and other developed OECD economies. Yet health infrastructure, and socioeconomic factors that
here too uncertainty exists over the future of the treaty. are the true access barriers to medicines. The panel
Only last-minute renegotiations and concessions to also failed to fundamentally recognize how long-term
the small Belgian province of Wallonia allowed for the medical and biopharmaceutical innovation depends
signing of the agreement in October 2016. on the existence of IP rights. In the words of a World
Intellectual Property Organization representative
Anxiety over globalization and free trade deals are who intervened at a hearing for the High-Level Panel,
not new; in fact, it has affected most major modern “without productive innovation, there is nothing to
trade negotiations. Similarly, debates dating back have access to.”x
to the 1800s over the role of IP rights and social
tradeoff between the exclusive rights of an inventor Indeed, one of the major trends that stands out
or creator and the good of society at large were from this year’s edition of the Index is how despite
reignited in 2016: efforts like the TPP and CETA, many economies are
embracing policies that challenge or curtail IP rights.
-. Is the granting of IP rights a social good? From the intensification of localization policies; to
curtailing patentability; to actively encouraging the
-. In a 21st-century society where information flows use of compulsory licenses, parallel importation, and
freely do these ancient notions of property rights the overriding of registered IP rights as a basis for
actually stimulate innovation and creativity? budgetary policy and cost containment; to restricting
renewable periods for registered trademarks—many
-. Is there not a better way? economies are embarking on policy reforms that
severely restrict the ability of rights holders to protect
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THE ROOTS OF INNOVATION
and profit from their work and creations. Not all of the 1% of the available score. More broadly it is clear that
45 economies included in the Index are embracing many EU economies and Japan are closer to the U.S.
these policies. And, in many cases, economies may than ever before.
in one policy area embrace restrictions while other
arms of government may engage fully in multilateral One reason for this shrinking gap is the continued
efforts to better exploit IP as an asset. Nevertheless, refinement of the Index as an assessment tool. The
it is notable that the share of economies launching UK, Japan, and many EU economies perform better
negative policies is growing. than the U.S. does on the 5 new indicators introduced
in this year’s edition of the Index. For example,
Yet in so doing, these economies are ignoring what with regard to patent opposition proceedings, the
is perhaps the most important lesson from not only American framework is simply not as effective as that
the research presented in this edition of the Index used by the EPO and other European economies. The
and the accompanying Statistical Annex, but the two mechanisms introduced by the 2011 American
cumulative knowledge from all five editions of the Invents Act have by and large not met rights holders’
Index and related work: the world’s most competitive expectations. Despite the intention of the new
and most innovative economies are also those in which opposition mechanisms to curb bad faith actors,
the protection of IP is not viewed as a necessary evil the ease of challenging patents during the post-
but, instead, as a fundamental building block for a grant period, particularly via the inter partes review
prosperous, modern, knowledge-driven economy. mechanism, has led to a high rate of trials and of
rejections (between 40% and 65% depending on type
of technology), with challenges considered by some
6.1 Overall results experts to be disproportionately funded by bad faith
actors and with steeply increasing defense costs for
What is perhaps most striking about the overall results patent holders. More broadly, although the USPTO
of the fifth edition of the Index is the extensive— continues to issue guidance on biotechnology and
and often substantial—movement of economies up software patenting, the patenting environment in the
and down the overall standings and within the six U.S. has continued to be plagued by uncertainty. In
categories of the Index. Figure 15 shows the overall fact, digging a bit deeper into the Index results and
results and economy scores. looking at the results for Category 1: Patents, Related
Rights, and Limitations, the U.S. falls from 1st to 10th
behind most European economies included in the
The view from the top – the U.S. is not alone Index as well as Singapore and Japan.
What immediately stands out is how the top of the On the other hand, a number of developed, high-
Index is tightening. In previous editions, there was still income economies that had been underperforming
a clear, albeit constantly shrinking, gap between the in previous editions have substantially increased their
U.S. and other economies. This year, the U.S. is ahead scores this year. Japan, for instance, has seen its score
of the UK by less than a quarter of a point, or less than increase by over 10%—from under 80% of the maximum
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U.S. Chamber International IP Index | Fifth Edition
U.S. 32.62
UK 32.39
Germany 31.92
Japan 31.29
Sweden 30.99
France 30.87
Switzerland 29.86
Singapore 28.62
South Korea 28.31
Italy 27.73
Spain 27.48
Australia 27.07
Hungary 25.39
New Zealand 24.05
Poland 23.00
Israel 22.27
Canada 21.44
Taiwan 20.59
Malaysia 17.19
Mexico 16.87
Saudi Arabia 15.98
Turkey 15.80
Russia 15.53
UAE 15.24
Colombia 15.22
Chile 15.14
China 14.83
Peru 14.34
Brunei 14.18
Ukraine 14.06
Kenya 13.95
Brazil 13.23
South Africa 12.70
Philippines 11.78
Nigeria 10.97
Ecuador 10.59
Vietnam 10.34
Argentina 10.05
Indonesia 9.64
Thailand 9.53
Egypt 9.38
Algeria 9.34
India 8.75
Pakistan 8.37
Venezuela 6.88
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THE ROOTS OF INNOVATION
available score in the fourth edition to close to 90% this For example, Saudi Arabia (a new addition this year)
year. In large measure, this is due to the swift ratification stands out for its relatively strong performance overall
of the TPP treaty including accession to all required and in particular for achieving the highest score of
international IP treaties, such as the Patent Law Treaty all emerging markets in Category 1: Patents, Related
and the Singapore Treaty on the Law of Trademarks. Rights, and Limitations, only 0.5 points behind
Japan’s national IP environment is also very strong New Zealand.
with regards to all of the new indicators included in
the Index. Similarly, China’s overall score has increased
marginally from the fourth to the fifth edition—as
Among other high-income OECD economies, it has in each consecutive edition of the Index.
Australia’s score dropped from the last edition of the This present improvement in score mainly results
Index. In large measure, this is due to weaknesses on from enhanced damage calculations that support
the newly included indicators, in particular relating to adequate compensation for patent holders provided
patent opposition proceedings. Australia (together with for in a 2016 Judicial Interpretation on patent
New Zealand and Israel) is one of the few developed infringement. Additionally, China scores well on the
OECD economies that provides a pre-grant form of level of transparency and public reporting by customs
patent opposition. The system is considered to extend authorities on trade-related IP infringement, a new
the patent review process significantly, delaying the indicator this year. However, crucial gaps in the
granting of patents and reducing the available term of areas of industrial design protection and barriers to
protection afforded to patent holders. For example, commercialization of IP assets hold China back from a
a 2012 academic study published in the University of further rise in score on the other new indicators.
New South Wales Law Journal found that Australian
opposition filings typically delayed the granting of a India and Brazil have both seen a slight improvement
patent by close to 2 years (the mean delay found was in their scores overall. However, this increase is largely
2.4 years versus the median of 1.8 years). because of a relatively strong performance on the
five new indicators included in the Index and not
As in years past, Canada and New Zealand continue from any actual improvements to their national IP
to stand out as examples of developed high-income environments. On the contrary, in India, for instance,
economies closer to the score of middle-income a number of developments have had a pronounced
economies than that of the U.S. and EU. Indeed, negative impact. Of note is the High Court of Delhi
Canada is just over 4 points ahead of Mexico and judgment in the long-running case between some of
Malaysia (the best-performing middle-income the world’s leading academic publishers (including
economies) but more than 10 points behind Germany, both Oxford and Cambridge University presses as well
the UK, and the U.S. as Taylor & Francis) and the University of Delhi and a
local photocopy shop. In a significant blow to rights
Developing or regressing? Troubling trends in holders, not only did the court find nothing wrong
emerging economies with the University of Delhi providing a photocopied
master-copy of course texts for students to photocopy
As for emerging markets, this year’s results are even themselves in the university library, but it also did not
more mixed than usual. object to the obvious commercial gain derived from the
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U.S. Chamber International IP Index | Fifth Edition
copy shop for providing this service. Confusingly, while of these localization requirements. The IPAP also,
in December 2016 the case was set to be heard again both more broadly and in the sectoral focus area
in 2017 (following the intervention by a division bench discussions, places a heavy emphasis on the transfer
of the Delhi High Court), no accompanying court order of technologies from international rights holders to
was given to suspend the ongoing and widespread local companies.
infringement of the rights holders’ copyright.
In Latin America, Colombia stands out for the
Russia and South Africa have seen substantial significant regression in its national IP environment.
deterioration in their national IP environments. For Its overall score has fallen substantially from 47% in
both economies, this decline is largely because of the fourth edition to 43% in the fifth edition. Although
the intensification of localization policies. In the Colombia’s score rose in relation to the patentability of
case of Russia, the decline occurs despite a small computer-implemented inventions (with evidence of
increase in its overall score resulting from a relatively higher volumes and speedier patenting of computer-
strong performance on the five new Index indicators. related patents), the drop in overall performance
For example, in late 2015 the Russian government results from challenges around compulsory licensing
adopted Resolution No. 1289 “On Restrictions and and relatively low scores on the new Index indicators,
Conditions of Access of Foreign Essential Medicines particularly in relation to patent opposition and
to State and Municipal Tenders,” which introduces licensing barriers. In 2016, the Ministry of Health
a direct import ban within the procurement system. and the Colombian government actively considered
Access to state purchases of imported medicines (on the basis of a recommendation of an internal
will not be allowed when (at the time supplies are committee) issuing a compulsory license on the
requested) at least two generics produced within oncology drug Glivec on the grounds of high prices.
the Eurasian Economic Union (EEU) are available for At the time of research, the Colombian government
a given product. Foreign manufacturers will only be had issued a “Declaration of Public Interest” via
able to participate in a public tender in cases where Resolution 2475 and committed to unilaterally
fewer than two bids from EEU manufacturers have reducing the price of Glivec by about 45%. Although
been submitted. In addition, Decree 1125/2015 made the government has not moved forward with issuing
the National Immunobiological Holding Company a compulsory license, the above steps can be viewed
(owned by state-owned corporation Rostech) the sole as a manner of abusing the compulsory license
provider of immunobiological products for state needs regime for price considerations, even though no
for the period 2015–17. Similarly, in the 2016 Industrial patient access concerns were cited. On the contrary,
Policy Action Plan 2016-17-2018-19 (IPAP), South Africa competing forms of the medicine were available
outlined new policies that strengthen localization on the market and the price for Glivec was set and
requirements. The IPAP confirms the government’s reduced multiple times by the Colombian government
objective (first outlined in the 2014 five-year plan under the existing price control regime.
Medium Term Strategic Framework) of achieving
a level of 75% local procurement. Specifically, it A few countries toward the bottom of the Index also
strengthens cross-governmental enforcement activities stand out. In 2016, both Ecuador and Indonesia, for
and ensures greater compliance and application example, continued to embark on a path of actively
[ www.uschamber.com/ipindex 21 ]
THE ROOTS OF INNOVATION
restricting IP rights. In October 2016, Ecuador’s expanded. Last, Article 20 of the law mandates that all
National Assembly passed the Código Orgánico de patent rights holders “make” the patented product or
Economía Social del Conocimiento, la Creatividad y la process within Indonesia. Subsection (2) of this article
Innovación (Código Ingenios). The legislation touches states that this production should support Indonesia’s
on all facets of IP rights, R&D, and innovation. While industrial and development policies, specifically the
the law aims to encourage innovation, R&D, and the “transfer of technology, investment absorption and/
development of new technologies, the legislation or employment.” No further details are provided as
includes strong elements of local preferences and to the meaning or legal definition of “make” in this
discrimination against foreign companies in, for context. As discussed in previous editions of the
example, software procurement. More broadly, Index, Indonesia has had in place a number of
the law imposes new limits on patentability and localization requirements that target certain industrial
expands non-patentable subject matter and—in a sectors (most notably the biopharmaceutical sector),
virtually unprecedented move—limits the number but this new requirement seems to broaden this
of renewable periods for trademark registrations. mandatory localization to any and all patented
Similarly, while the aim of Indonesia’s new patent law is technologies in Indonesia.
to strengthen Indonesia’s innovation infrastructure and
encourage more high-tech economic development Rays of light…
through the creation and use of new technologies,
overall the law does not improve what was already Despite the negative trend toward restricting IP
a challenging patenting environment. Article 4 rights, the results of the Index also show how in
inserts a new heightened efficacy requirement that many economies—sometimes paradoxically in some
targets biopharmaceutical products and outlaws of those economies with the most challenging and
second use claims. The new efficacy standard is not restrictive policies in place—IP is increasingly viewed
comprehensively defined with the sole example as an asset worth protecting.
cited being for antibiotics. In a further effort to target
biopharmaceutical innovation, Article 167 of the law Creating an effective and active IP enforcement
allows the parallel importation of follow-on products presence
under patent protection in Indonesia but approved
for consumption in other markets. The law explains Several economies in the Index took important steps
that this importation is to target the cost of medicines in 2016 to strengthen their IP enforcement bodies and
and in particular where prices in Indonesia are judged enhance anticounterfeiting and antipiracy activities.
to be higher than the “international market.” No Different economies bolstered legal tools for deterring
details are provided as to what constitutes a “higher infringement, such as increasing damages available
price” or the “international market.” This law adds and heightening criminal penalties for key areas
significant uncertainty and raises serious questions such as counterfeit medicines. For example, patent
as to the extent basic patent protection is afforded amendments issued by China’s patent office (under
to biopharmaceutical products in Indonesia. Existing review in 2016) would positively increase statutory
compulsory licensing mechanisms—including so- damages significantly from RMB10,000–RMB1 million
called government use licenses—have also been to RMB100,000–RMB5 million (about USD750,000).
[ 22 www.uschamber.com/ipindex ]
U.S. Chamber International IP Index | Fifth Edition
In relation to damages, a 2016 Judicial Interpretation suspected infringers, conducting inspections and
on patent infringement shifts the burden of proof raids, and collecting evidence. In addition, since
to infringers and allows the release of evidence 2008, the Philippines also has had in place an Inter-
from infringers in order to promote a more accurate Agency Committee on IPR Enforcement, which
calculation of damages. Similar measures on burden inter alia dedicates efforts to education campaigns,
of proof and damage assessment entered into capacity building, data sharing, and international
force in 2016 in South Korea. In Pakistan, despite harmonization. Moreover, Civil Procedure Act
criminal penalties being considered inadequate and amendments in South Korea that entered into force
nondeterrent overall, certain provinces have raised in 2016 have centralized jurisdiction of patents,
penalties for infringement; in 2015, Punjab province trademarks, and design rights in five specialized
increased penalties for the production and sale of district courts and appeals to the Patent Court.
counterfeit medicines to a minimum of 5 years (with a The move is expected to make injunctive relief and
maximum of 10 years). damages more clearly available and, as the Patent
Court will rule on appeals to both infringement and
Other economies took steps to bolster capacity invalidity, preclude fragmentation when both types of
and resources for enforcement bodies. Pakistan’s proceedings run concurrently.
Intellectual Property Organisation recently introduced
specialized IP courts, training for judges, and efforts to Building 21st century IP frameworks
reduce red tape. It remains to be seen how effective
these new courts will be in addressing backlogs, A number of economies in the Index have also
but appointed judges reportedly have strong IP introduced IP reforms aimed at updating existing
backgrounds. In the UAE, Ministerial Resolution frameworks and addressing key needs of cutting-
137/2016 created a specialized judicial department to edge technologies and sectors. For instance, in 2016,
deal with federal disputes, such as cancellation acts; Taiwan undertook a review of its main IP laws, with
the first dedicated IP rights (IPR) Court Circuit was set proposed patent amendments to the Patent Act
up in 2016 at the Abu Dhabi Court of First Instance. to further strengthen the already pro-technology
The increased specialization is expected to speed up patenting framework by extending the grace period
the handling of IP litigation before both federal and for filing a patent to 12 months. In addition, although
emirate-level courts and could increase the availability other important gaps must still be addressed,
of effective civil remedies, such as injunctions, which copyright amendments take some steps to extend
are currently difficult to secure. the scope of protection, for instance by criminalizing
circumvention of technological protection measures
Still other economies introduced new enforcement (TPMs) and adding protection for encrypted program-
and education campaigns that target key infringement carrying satellite and cable signals. Among newcomer
strongholds and choke points in their economies. economies in the fifth edition, pockets of IP legislation
The IP office of the Philippines, IPOPHL, engaged provide for up-to-date, sector-specific measures.
in enforcement activities in partnership with rights For example, IP and e-commerce legislation in the
holders, including sending warning notices to Philippines criminalizes the circumvention of TPMs,
including the most modern types of control measures,
as confirmed by a Legal Opinion from the Department
[ www.uschamber.com/ipindex 23 ]
THE ROOTS OF INNOVATION
of Justice in 2015. Kenya’s copyright framework harmonization, and consolidating resources. Some of
in relation to digital rights management (DRM) the most widespread partnerships growing in 2016
legislation is also relatively sophisticated; it targets not were PPHs aimed at streamlining patent examination
only the act of circumvention but also the production and reducing duplicative review. In many economies,
of circumvention devices in its definition of infringing PPH commitments represent important steps toward
acts under the Copyright Act. Also, the use of licensed addressing large backlogs and improving examination
software is required among government agencies standards. Entry into PPHs factored heavily in 2016 in
in the Ministry of ICT’s Policy on Software Licensing many Latin American economies including Argentina,
Regime as well as in several agency-specific policies. Chile, Colombia, Mexico, and Peru. For example, to
These standards are reiterated in a draft policy on tackle persistently long IP office delays, Argentina’s
information security considered in 2016. National Institute of Industrial Property (INPI) is seeking
to significantly speed up application procedures,
Leveraging global partnerships and IP networks to committing to issue a decision within 60 days from
enhance international IP standards receiving a request for accelerated examination for
qualified claims. The Peruvian IP office, INDECOPI,
2016 saw important movement forward on entered into a PPH scheme with Spain in January
international and bilateral treaties involving substantial 2016 and with other Pacific Alliance countries (Mexico,
IP measures. As discussed in the preceding section, Colombia, and Chile) in June 2016. International
the TPP Agreement represents a significant, if IP cooperation is also increasingly visible in Asia.
incomplete, upgrade of existing international The Philippines is a member of the Association of
benchmarks and WTO standards, closer to that of the Southeast Asian Nations (ASEAN) Patent Examination
indicators included in the Index than TRIPS. Beyond Cooperation, with access to regional search and
the TPP, different economies concluded bilateral examination results, and has entered into PPHs with the
agreements that promote global IP best practices. USPTO and JPO. Vietnam’s National Office of IP, NOIP,
The text of the European Union-Vietnam FTA was has entered into a new PPH with Japan in an effort to
agreed to in 2016. The agreement will reportedly improve capacity, accelerate patent examination, and
be signed in 2017 and enter into force in 2018. IP address its growing patent backlog.
provisions in chapter 12 tackle a number of the
major holes in Vietnam’s current IP system, including, Economies that have leveraged international
among other elements, provision of a two-year partnerships are also demonstrating positive results.
patent term extension; automatic RDP protection for In the context of an accelerated examination program
pharmaceuticals; narrower exceptions to copyright and PPHs with the U.S., Japan, and, since 2015, South
and DRM protection; a clear definition of liability Korea, the average patent review time in Taiwan shrank
exemptions for key types of online intermediaries; to less than 24 months in 2016, from over 47 months
revocation of bad faith trademarks; enhanced civil in 2012. The average review time of applications filed
remedies; and ex officio action by customs in relation under its PPHs was just about 135 days in 2016 (as of
to IP infringement. the time of research).
[ 24 www.uschamber.com/ipindex ]
U.S. Chamber International IP Index | Fifth Edition
7. Economy Overviews
Introduction
This section provides an overview and analysis of each in the national IP environment for each individual
individual economy’s score on all 35 indicators. economy. Specific challenges, debates, and issues
relating to the most important recent developments
In addition to the total score and overall rank vis-à- under each category are discussed in more detail in a
vis the other economies included in the Index, each separate subsection titled “Spotlight on the National
economy overview includes two figures. The first figure IP Environment.”
displays each economy’s performance relative to the
top five performers in each category of the Index. The For economies included in previous editions of the
second figure displays each economy’s overall score Index, an additional discussion is included titled “Past
compared with the median overall score and regional Editions versus Current Scores,” in which the economy’s
average for that particular economy. Also included is score in the preceding editions is discussed and
a summary of key areas of strengths and weaknesses contrasted with its current score.
[ www.uschamber.com/ipindex 25 ]
ALGERIA Rank 42/45
Patents
100
90
80 Percentage of Overall Score
Membership and 70
60
Ratification of 35
50
40
Copyrights
International Treaties 30
30
20
10 25
20
15.39
13.73
15
9.34
Enforcement 10
Trademarks
5
0
Algeria Median Regional
Algeria Trade Secrets and Market Access Index Score Average
Top 5 Economies’ Average Score
[ 26 www.uschamber.com/ipindex ]
Spotlight on the National IP Environment
[ www.uschamber.com/ipindex 27 ]
ARGENTINA Rank: 38/45
Patents
100
90
80 Percentage of Overall Score
Membership and 70
60
Ratification of 35
50
40
Copyrights
International Treaties 30
30
20
10 25
20
15.39
15 13.79
10.05
Enforcement 10
Trademarks
5
0
Argentina Median Regional
Argentina Trade Secrets and Market Access Index Score Average
Top 5 Economies’ Average Score
[ 28 www.uschamber.com/ipindex ]
Spotlight on the National IP Environment
[ www.uschamber.com/ipindex 29 ]
AUSTRALIA Rank: 12/45
Patents
100
90
80 Percentage of Overall Score
Membership and 70
60
Ratification of 35
50
40
Copyrights
International Treaties 30
30 27.07
20
10 25
20 17.64
15.39
15
Enforcement 10
Trademarks
5
0
Australia Median Regional
Australia Trade Secrets and Market Access Index Score Average
Top 5 Economies’ Average Score
[ 30 www.uschamber.com/ipindex ]
Spotlight on the National IP Environment
Past Editions versus Current Scores they are considered patentable subject matter as long as they
produce a new and useful physical effect on a computer.
Australia’s overall score dropped from 83% of the total possible
score (with a score of 24.79 out of 30) in the fourth edition of the
8. Patent opposition: Australia has in place a pre-grant
Index to 77% (27.07 out of 35) in the fifth edition. This mainly
opposition system for patents. Under the system, third parties
reflects weak performance in some of the new indicators, notably
may file an objection between the publishing of the application
patent opposition, and a setback in measures against online
and within 3 months after the application is accepted. The
piracy. Though not affecting Australia’s score in the fifth edition,
system is considered to extend the patent review process
the Productivity Commission’s 2016 review and recommendations
significantly, delaying the granting of patents and reducing the
on IP could fundamentally curtail IP rights (in some cases, lowering
available term of protection afforded to patent holders. For
IP standards below those in the TRIPS Agreement), contradict
example, a 2012 academic study published in the University
decades of IP policy in Australia, and severely undermine
of New South Wales Law Journal found that opposition filings
Australia’s knowledge-based economy. Proposed measures
typically delayed the granting of a patent by close to 2 years
include introducing new exclusions to patentability and raising
(the mean delay found was 2.4 years versus the median of
renewal fees to discourage use of the full term of protection. The
1.8 years). The same study found that the highest volume of
proposals also recommend tackling online piracy by reducing
oppositions is directed toward pharmaceutical patents.
access restrictions and decreasing the current 70-year term of
copyright protection significantly. If implemented, these measures
could result in a substantial drop in Australia’s Index score. Copyrights, Related Rights, and Limitations
11. Availability of frameworks that promote cooperative action
Area of Note against online piracy; and 13. Digital rights management
(DRM) legislation: In early 2016, the first two actions under
Australia’s Department of Health is seeking damages from
the web-blocking regime adopted in 2015 (which requires
biopharmaceutical innovators that pursue unsuccessful patent
rights holders to secure a court order to take down infringing
claims. Those damages are designed to compensate Australia’s
websites) were filed at the Federal Court. Judgment in the two
pharmaceutical reimbursement scheme (PBS) for any higher
cases, brought by Foxtel and Roadshow, was not yet issued
price paid for a patented medicine during the period of a
at the time of research, reflecting procedural delays inherent
provisional enforcement measure. The PBS imposes automatic
in a court-ordered notice and takedown system. Meanwhile,
price cuts on medicines as soon as competing versions enter
the industry-developed three-strikes mechanism announced
the market, but the policy entails no corresponding mechanism
in 2015 to block infringing websites was put on hold before it
to compensate innovators for losses if an infringing product is
ever entered into force, following failed negotiations between
launched prematurely. Australia’s market-size damages policy
rights holders and ISPs over who should bear the financial
unfairly tips the scales in commercial patent disputes and
burden of the system. Stakeholders have reportedly asked
creates an inappropriate conflict of interest by permitting the
the government to shelve any new copyright notice scheme
same government that examined and granted a patent to seek
proposal until 2017. As a result, Australia’s score for indicator
damages if that patent is later ruled invalid or not infringed. The
11 falls by 0.25. More generally, piracy remains a problem, as
continued use of market-sized damages will undermine patent
do loopholes in the legal framework, such as the lack of an
protection and the overall innovative environment in Australia and
adequate legal basis for addressing virtual private network use
create greater uncertainty for biopharmaceutical investors.
to circumvent geo-blocking technologies.
Patents, Related Rights, and Limitations Trademarks, Related Rights, and Limitations
2. Patentability requirements: The Australian Patent Office
20. Industrial design term of protection; and 21. Legal
released new guidance on patentability of genetic material
measures available that provide necessary exclusive
in light of the High Court’s 2015 decision in D’Arcy v. Myriad
rights to redress the unauthorized use of industrial design
Genetics. The guidelines maintain that genetic material
rights: An ongoing review of the design system would only
remains patentable, with exceptions for certain claims that
partially bring design protection to international standards.
focus on naturally occurring material. Recent court and
The current legislative framework provides for a 10-year
patent office decisions, such as Cargill Incorporated v. Dow
term of protection, does not recognize unregistered rights,
AgroSciences LLC and Arrowhead Research Corporation
lacks a grace period, and does provide for criminal liability.
(2016) APO 70, confirm that isolated nucleic acids are
These limitations result in relatively low use of design rights,
patentable as long as they have been modified. In addition,
regarded as secondary compared with other IP rights. In
2016 case law, notably Central Ltd v. Commissioner of
response to the former Advisory Council on Intellectual
Patents and Research Affiliates LLC v. Commissioner of
Property’s review of the design system, the government has
Patents, provides further clarity concerning patenting of
committed to introducing a 6-month grace period and is
business methods and software claims: broadly speaking,
considering extending design protection to 15 years.
[ www.uschamber.com/ipindex 31 ]
BRAZIL Rank: 32/45
Patents
100
90
80 Percentage of Overall Score
Membership and 70
60
Ratification of 35
50
40
Copyrights
International Treaties 30
30
20
10 25
20
15.39
15 13.23 13.79
Enforcement 10
Trademarks
5
0
Brazil Median Regional
Brazil Trade Secrets and Market Access Index Score Average
Top 5 Economies’ Average Score
[ 32 www.uschamber.com/ipindex ]
Spotlight on the National IP Environment
Past Editions versus Current Scores Trade Secrets and Market Access
Brazil’s overall score has increased from 35% (10.41 out of 30) 24. Regulatory and administrative barriers to the
in the fourth edition of the Index to 38% (13.23 out of 35) in the commercialization of IP assets: Brazil has a number of
fifth edition. This increase in score mainly reflects a relatively policies and regulations in place to promote the transfer
strong performance in the 5 new indicators added in the fifth of technology and commercialization of IP. For instance,
edition, including transparency and public reporting by a key tenet of the 2004 Innovation Law was to encourage
customs authorities. the transfer and commercialization of technologies through
incubation services for public researchers and greater
encouragement of start-up activities. The law provides
Patents, Related Rights, and Limitations
incentives including royalty guarantees to inventors.
8. Patent opposition: Under Brazil’s Industrial Property Law Special R&D tax incentives are also in place that reward
(Lei 9,279), patent opposition proceedings are formally the commercialization and protection of IP. For example,
post-grant and can be either administrative or judicial. Brazil has R&D tax credits in place under Law No. 11.196.
Articles 50–56 of the law outline proceedings for opposing These credits include a potential 60% deduction on
a patent and nullification. Under both proceedings, these corporation tax liability and social contributions, which can
may be requested or started by either the Brazilian Patent also escalate if there is a year-on-year cumulative increase
and Trademark Office (INPI) or any person with a “legitimate in R&D spending. An additional 20% deduction is also
interest.” In addition to these formalized opposition available once an invention has been patented. However,
proceedings, Brazilian law also provides a mechanism these initiatives are in many respects undermined by an
whereby interested parties can make submissions after administrative and regulatory framework that can be both
publication of the application, but these are not formally burdensome and inefficient. For example, the practical
termed an opposition and are instead called “subsides.” It availability of the additional 20% R&D deduction for
is not clear the extent to which patent examiners rely on any patented inventions is very limited given the 10- to 13-year
such submissions as they are not statutorily obliged to do patent backlog at the INPI. More broadly, regulatory and
so or how they affect the overall patent prosecution. Article formal requirements are in place that limit the attractiveness
31 of the Industrial Property Law does not provide details. of licensing IP assets in Brazil. For example, to become
It merely states: “After publication of the application and effective and binding on third parties, licensing agreements
up to the end of the examination, interested parties may must be published in the INPI’s Official Gazette and
submit documents and data to assist the examination.” In agreements must also be approved by INPI. There are also
light of this lack of clarity of these submissions and with a limitations on fees and payments between the contracting
view of strengthening the ability to oppose patents prior parties. Exclusive licensing agreements are subject to
to their being granted, proposed 2013 amendments to the more onerous publication requirements than nonexclusive
Industrial Property Law (PL5402/2013) would, in addition to licenses, making this process more time-consuming. The
the existing post-grant opposition mechanisms, introduce result is an environment that promotes neither technology
a system of pre-grant opposition. At the time of research, transfer nor the commercialization of new ideas and
no votes had been scheduled for this bill, which is still listed technologies. Indeed, as former president of the INPI
as being under consideration by the Brazilian Congress. Jorge Avila stated in a 2016 interview, the INPI’s role in
Given the long-standing and significant backlogs at the regulating and registering licensing activity is unnecessary
INPI—ranging from 10 to 13 years depending on the field and adds additional costs and bureaucracy to the IP
of technology—it is likely that any introduction of a pre- commercialization process.
grant opposition system would add significant processing
time to an already overburdened examination system. The
experiences of other countries with pre-grant opposition
systems (including, for example, Australia) suggest that
under such a system there is not only an added processing
time due to the pre-grant mechanism, but also a real risk
that certain industries and sectors (including mining and
pharmaceuticals, which is the experience in Australia) where
a delay in patent grant can lead to a significant competitive
advantage may be abused. For example, a 2012 academic
study published in the University of New South Wales Law
Journal found that opposition filings typically delayed the
granting of a patent by close to 2 years (the mean delay
found was 2.4 years versus the median of 1.8 years).
[ www.uschamber.com/ipindex 33 ]
BRUNEI Rank: 29/45
Patents
100
90
80 Percentage of Overall Score
Membership and 70
60
Ratification of 35
50
40
Copyrights
International Treaties 30
30
20
10 25
20 17.64
15.39
14.18
15
Enforcement 10
Trademarks
5
0
Brunei Median Regional
Brunei Trade Secrets and Market Access Index Score Average
Top 5 Economies’ Average Score
[ 34 www.uschamber.com/ipindex ]
Spotlight on the National IP Environment
Past Editions versus Current Scores of IP rights, such as trademarks and patents, was much
lower. The accession by Brunei to the Hague Agreement in
Brunei’s overall score has increased from 38% (11.44 out of 30)
2013 is a positive step and provides a new avenue for the
in the fourth edition of the Index to 41% (14.18 out of 35) in
international registration of design rights.
the fifth edition. This increase in score mainly reflects a
relatively strong performance in the 5 new indicators added
in the fifth edition.
[ www.uschamber.com/ipindex 35 ]
CANADA Rank: 17/45
Patents
100
90
80 Percentage of Overall Score
Membership and 70
60
Ratification of 35
50
40
Copyrights
International Treaties 30
30 27.03
20
10 25 21.44
20
15.39
15
Enforcement 10
Trademarks
5
0
Canada Median Regional
Canada Trade Secrets and Market Access Index Score Average
Top 5 Economies’ Average Score
[ 36 www.uschamber.com/ipindex ]
Spotlight on the National IP Environment
Past Editions versus Current Scores Trademarks, Related Rights, and Limitations
Canada’s overall score has increased marginally from 60.5% 16. Discrimination/restrictions on the use of brands in the
(18.17 out of 30) in the fourth edition to 61.3% (21.44 out of packaging of different products: In its preelection party
35) in the fifth edition. This change in score reflects a relatively platform published in 2015, the Liberal Party of Canada
mixed performance on the 5 new indicators added to the fifth stated that, if elected, it would seek to “introduce plain
edition. At the time of research, the Canadian Parliament was packaging requirements for tobacco products, similar to
still considering legislation to implement the CETA treaty; those in Australia and the United Kingdom.” Following
by December 2016, the bill had been sent to the Standing the party’s electoral victory, the prime minister included a
Committee on International Trade. As noted in previous editions reference to plain packaging in his mandate letter to the
of the Index, Canada’s score would increase considerably with Minister of Health. In May 2016, the Canadian Department
full ratification and implementation of CETA, which would of Health issued the document “Consultation on ‘Plain and
primarily affect scores in life sciences–related indicators and Standardized Packaging’ for Tobacco Products.” At the
international treaties. time of research, the consultation had been closed and
neither the department nor the government of Canada had
issued any further statements. In addition to proposals of
Patents, Related Rights, and Limitations
standardizing tobacco packaging and restricting the use
2. Patentability requirements: As detailed in previous of trademarks, brands, and related IP, the consultation also
editions of the Index, since the mid-2000s, Canadian included proposals for standardizing the appearance, color,
Federal Courts have issued a growing number of decisions and physical size of tobacco products. The introduction
on the basis of patent utility in relation to biopharmaceutical of standardized packaging applied to any industry would
patents. In no fewer than 28 cases, courts have ruled that significantly restrict the use of brands, trademarks, and
biopharmaceutical patents were invalid owing to lack trade dress on retail packaging, undermining the benefits of
of utility, even though these patented medicines were trademarks to businesses and consumers alike and setting
found to be safe and effective by Health Canada and a negative precedent for IP policy. The passage of such
were being used by hundreds of thousands of Canadian legislation would decrease Canada’s score on this indicator
patients. The Canadian standard of utility established from 1 to 0.
through this case law differs from international standards
embodied in TRIPS and the Patent Cooperation Treaty, as
well as from the practices of patent offices in the United
States and EU. Canada’s utility test is accompanied by a
heightened evidentiary burden that requires innovators
to demonstrate the effectiveness of a biopharmaceutical
in light of statements in the patent that the court
subjectively construes as a “promise” of utility. The test
increases uncertainty as to how much information needs
to be disclosed in patent applications and discriminates
against biopharmaceutical patents. In November 2016,
the Supreme Court of Canada heard oral arguments in the
long-running case AstraZeneca Canada Inc. v. Apotex Inc.
AstraZeneca is appealing a 2015 judgment by the Federal
Court of Appeal that in turn upheld a lower court finding
of lack of utility. The Court of Appeal had ruled that the
“promise” of utility made in the original patent “was neither
demonstrated nor soundly predicted at the time the patent
was filed.” A final verdict is expected in early 2017. The
court’s judgment could prove to be a critical turning point in
either entrenching what has become an outlier patentability
requirement or realigning Canada’s requirement with
international standards.
[ www.uschamber.com/ipindex 37 ]
CHILE Rank: 26/45
Patents
100
90
80 Percentage of Overall Score
Membership and 70
60
Ratification of 35
50
40
Copyrights
International Treaties 30
30
20
10 25
20
15.14 15.39
15 13.79
Enforcement 10
Trademarks
5
0
Chile Median Regional
Chile Trade Secrets and Market Access Index Score Average
Top 5 Economies’ Average Score
[ 38 www.uschamber.com/ipindex ]
Spotlight on the National IP Environment
Enforcement
25. Physical counterfeiting rates: Against a background of
increasing availability of fake goods, positive steps taken in
2016 suggest a somewhat greater awareness of the scope
of counterfeiting and piracy in Chile. These steps include
the creation of a public-private platform on illicit trade
(Observatorio del Comercio Ilícito) reportedly aimed at
informing policies and better coordinating actions against
trade-related infringement. They also include various
awareness and information campaigns, notably with regard
to a recent change to the Penal Code that criminalizes
repeat purchasing of counterfeits. However, these efforts
must be coupled with effective prosecution and more
deterrent penalties for infringers (expected to be
partially addressed in the current draft IP bills, should
they be approved).
[ www.uschamber.com/ipindex 39 ]
CHINA Rank: 27/45
Patents
100
90
80 Percentage of Overall Score
Membership and 70
60
Ratification of 35
50
40
Copyrights
International Treaties 30
30
20
10 25
20 17.64
14.83 15.39
15
Enforcement 10
Trademarks
5
0
China Median Regional
China Trade Secrets and Market Access Index Score Average
Top 5 Economies’ Average Score
[ 40 www.uschamber.com/ipindex ]
Spotlight on the National IP Environment
Past Editions versus Current Scores Trademarks, Related Rights, and Limitations
China’s overall score in relation to the total possible score has 17. Ability of trademark owners to protect their trademarks:
remained the same at 42% (with a score of 14.83 out of 35 in the requisites for protection; and 18. Legal measures
fifth edition). China did see a rise in score in relation to available available that provide necessary exclusive rights to
damages for IP infringement as a result of a 2016 Judicial redress unauthorized uses of trademarks: High-profile
Interpretation outlining enhanced damage calculations for decisions in 2016 show interest by China’s highest court to
patent infringement. China also receives points from certain new address key challenges in the registration of trademarks.
indicators added in the fifth edition, particularly for the relatively Most recently, China’s Supreme People’s Court found that
strong level of transparency and public reporting by customs a Chinese sporting goods chain, Qiaodan Sports, filed the
authorities on trade-related IP infringement. However, crucial Chinese-language version of Michael Jordan’s name in bad
gaps in the areas of industrial design protection and barriers to faith. The decision recognized the “high reputation” of
commercialization of IP assets hold China back from a further rise Michael Jordan in China, taking into consideration evidence
in score as a result of the 5 new indicators. previously refused by the lower court. The Supreme People’s
Court also rejected the lower courts’ “definitive association”
General Note standard and replaced it with a broader “stable association”
standard. In cases for global brands Apple and Facebook,
In 2016, the Chinese government issued a wide-ranging action
the Beijing High Court determined that the brands’
plan on IP, the State Council’s Opinions on Accelerating the
well-known status did not apply in relation to opposing
Establishment of a Strong IPR Country. The plan reiterated
registrations of similar marks because the applications for
proposals and ongoing efforts to enhance IP cooperation,
these marks were filed, in the court’s view, before the brands
promote growth of IP-intensive industries, and remove barriers
had achieved notoriety in China. However, in the Facebook
to leveraging IP outside China, as well as improve the availability
case, the court ultimately rejected the opposed mark, given
of remedies for IP infringement and issue further guidance on IP
that the individual attempting to register it displayed signs
and competition.
of bad faith conduct.
Patents, Related Rights, and Limitations 21. Legal measures available that provide necessary
2. Patentability requirements: In 2016, the State Intellectual exclusive rights to redress the unauthorized use of
Property Office (SIPO) issued proposed amendments to its industrial design rights: Chinese patent law provides
patent examination guidelines. The amendments aim to for general exclusive rights for design patent holders.
address existing uncertainty in SIPO guidance and practice However, the standards for determining eligibility for design
around the ability to submit post-filing experimental data protection are considered to be fairly low (the law provides
in order to fulfill sufficiency of disclosure requirements, limited criteria for obtaining design protection and no
particularly in relation to life sciences patents. The guidance substantive review takes place), leading to many low-value
confirms that post-filing data is permitted if it supports a patents and a high rate of invalidations. According to local
technical effect previously disclosed in the application. In legal experts, this trend has also led to a growing incidence
addition, the amendments also clarify that business methods of design patent trolls and additional costs and uncertainty
and computer-implemented inventions involving software for multinational technology companies.
may be considered patentable subject matter as long as
they produce a technical effect and other patentability
criteria are met. Depending on their final form and
implementation, these amendments could help strengthen
the patenting environment in China.
[ www.uschamber.com/ipindex 41 ]
Trade Secrets and Market Access Enforcement
23. Barriers to market access: Revisions to the High and New 27. Civil and procedural remedies; and 28. Preestablished
Technology Enterprise regime issued in 2016 raise the damages and/or mechanisms for determining the
criteria for IP ownership for companies seeking to qualify amount of damages generated by infringement: The
for a reduction in corporate income tax on the basis of R&D draft patent amendments issued by SIPO and under review
conducted in China. Under the revised rules, in order to in 2016 would increase statutory damages significantly from
benefit from a reduced corporate tax rate (15% instead of RMB10,000–RMB1 million to RMB100,000–RMB5 million
25%), companies must locally own, rather than license, IP (about USD750,000). In relation to damages, the Judicial
and the IP must be related to the company’s core products Interpretation on patent infringement shifts the burden of
and services. The heighted requirements for the transfer of proof to infringers and allows the release of evidence from
IP present higher transaction costs and barriers to accessing infringers in order to promote a more accurate calculation
the market, particularly for multinational companies. of damages, resulting in a rise in score of 0.25 for indicator
28. Local statistics generated from court cases since 2014
24. Regulatory and administrative barriers to the indicate that currently, on average, damages awarded
commercialization of IP assets: Technology companies are about RMB80,000, which is considered too low to
face a growing number of regulatory and procedural barriers compensate patent holders adequately. At the same time,
to licensing in China that impede technology flows and the draft patent amendments would expand administrative
R&D cooperation. In general, licensing agreements must enforcement of patents, including extending the authority
receive government approval. In addition, technology afforded to local IP offices (such as the ability to investigate
import/export regulations involve discriminatory conditions and impose patent infringement penalties). Legal experts
for foreign licensors, including indemnification of Chinese raise concerns that this may heighten existing uncertainty
licensees against third-party infringement and transfer of about the respective roles of administrative departments
ownership of future improvements on a licensed technology and courts and undermine effective enforcement.
to the licensee (whereas a Chinese IP owner is able to
negotiate different terms). In the context of standards-
setting, there is also a trend toward greater administrative
involvement in determining patent licensing terms and the
ability to secure relief from infringement. The Anti-Monopoly
Commission is preparing Anti-Monopoly Guidelines on
the Abuse of Intellectual Property Rights, based on input
from the three antimonopoly enforcement agencies. Draft
Guidelines released by the individual enforcement agencies
in 2016 raised serious concerns among industry regarding
provisions that would impose antimonopoly sanctions on
refusals to license and excessive pricing. In addition, draft
patent amendments would allow for automatic licensing of
Standard Essential Patents (SEPs) where a patent was not
disclosed as part of participation in a national standard-
setting process (although royalties would be negotiated
separately). In the meantime, the new Judicial Interpretation
on patent infringement allows a court to not issue
injunctions in cases of infringement where it determines the
patent holder has not followed fair, reasonable, and non-
discriminatory (FRAND) license terms, and inadequate detail
is provided concerning how this would be determined,
leaving greater room for reverse patent hold up.
[ 42 www.uschamber.com/ipindex ]
COLOMBIA Rank: 25/45
Patents
100
90
80 Percentage of Overall Score
Membership and 70
60
Ratification of 35
50
40
Copyrights
International Treaties 30
30
20
10 25
20
15.22 15.39
15 13.79
Enforcement 10
Trademarks
5
0
Colombia Median Regional
Colombia Trade Secrets and Market Access Index Score Average
Top 5 Economies’ Average Score
[ www.uschamber.com/ipindex 43 ]
Spotlight on the National IP Environment
Past Editions versus Current Scores be decided by decree) and would increase copyright protection
to 70 years for works for hire as well as for phonograms and
Colombia’s overall score has fallen substantially from 46% of
broadcasts. However, it falls short of addressing other key gaps
the total possible score in the fourth edition (with a score of
in the online copyright regime, including in relation to ISP
13.77 out of 30) to 43% (15.22 out of 35) in the fifth edition.
liability and assistance in taking down infringing content online.
Although Colombia’s score rose in relation to the patentability
of computer-implemented inventions (with evidence of higher
volumes and speedier patenting of computer-related patents), Trade Secrets and Market Access
the drop in overall performance results from challenges about 24. Regulatory and administrative barriers to the
compulsory licensing and relatively low scores in new indicators, commercialization of IP assets: A number of barriers to
particularly in relation to patent opposition and licensing the licensing of IP assets exist in Colombia. Colombian
barriers. On a positive note, efforts to increase awareness and public sector researchers and university faculty are not
information on IP infringement have intensified over the past allowed a second salaried income, limiting incentives
year and could lead to an improvement in the enforcement for setting up new businesses through spin-offs or start-
category in future editions of the Index. ups. Looking at outputs, relatively few universities derive
significant forms of income from commercialization and
Patents, Related Rights, and Limitations commercial research services. In addition, Colombian law
prohibits any nonprofit organization, including private
5. Legislative criteria and active use of compulsory
universities, from engaging in commercial activities. Andean
licensing of patented products and technologies: In
Community legislation also adds significant restrictions on
2016, the Ministry of Health and Colombian government
agreements with foreign licensors, requiring the registration
actively considered (on the basis of a recommendation
and evaluation of licenses by national authorities on the
of an internal committee) issuing a compulsory license
basis of subjective criteria regarding the so-called value of
on the oncology drug Glivec owing to high prices. At the
imported technologies.
time of research, the Colombian government had issued
a “Declaration of Public Interest” via Resolution 2475 and
committed to unilaterally reducing the price of Glivec
by about 45%. Although not progressing to the actual
issuing of a compulsory license at the time of research,
the above steps can be viewed as a manner of abusing
the international compulsory licensing regime for price
considerations even though no patient access concerns
were cited. On the contrary, competing polymorph forms
of the medicine are available on the Colombian market and
the price for Glivec was set and reduced multiple times by
the Colombian government under the existing price control
regime in Colombia.
[ 44 www.uschamber.com/ipindex ]
ECUADOR Rank: 36/45
Patents
100
90
80 Percentage of Overall Score
Membership and 70
60
Ratification of 35
50
40
Copyrights
International Treaties 30
30
20
10 25
20
15.39
15 13.79
10.59
Enforcement 10
Trademarks
5
0
Ecuador Median Regional
Ecuador Trade Secrets and Market Access Index Score Average
Top 5 Economies’ Average Score
[ www.uschamber.com/ipindex 45 ]
Spotlight on the National IP Environment
Past Editions versus Current Scores patentability or ownership of the invention.” Unlike Decision
486, Ecuador’s Intellectual Property Law does not provide an
Ecuador’s overall score has increased marginally from 29% (8.62
overall maximum time limit on oppositions, whereas Article
out of 30) in the fourth edition to 30% (10.59 out of 35) in the
44 of the Andean Decision provides a six-month maximum
fifth edition. This change in score reflects a relatively mixed
time limit. There is limited evidence on the practical use of
performance on the 5 new indicators added to the fifth edition.
the opposition mechanism in Ecuador and the effect it has
on the swift and effective prosecution of patent applications.
General Comments However, given the long general timelines for patent
In October 2016, Ecuador’s National Assembly passed the prosecution in Ecuador—local legal analysis suggests a
Código Orgánico de Economía Social del Conocimiento, typical patent takes six to eight years from filing to grant—
la Creatividad y la Innovación (Código Ingenios), a law that the current pre-grant opposition format is unlikely to help
touches on all facets of IP rights. The law aims to encourage reduce these timelines.
innovation, R&D, and the development of new technologies
in Ecuador and contains a strong element of local preferences
Enforcement
and discrimination against foreign companies. For example,
Article 148 introduces a requirement and order of prioritization 29. Criminal standards including minimum imprisonment and
for public sector procurement of software. This article stipulates minimum fines: As noted in previous editions of the Index,
that software should be open source and/or contain a significant 2013 amendments to the Intellectual Property Law removed
amount of local Ecuadorean value added in either its production criminal penalties and sanctions for IP rights infringement;
or the provision of services. Foreign suppliers are discriminated as a result, Ecuador’s enforcement environment stood
over domestic producers and suppliers. The legislation also firmly outside international standards. In late 2015,
contains a number of negative provisions relating to existing amendments to the Penal Code (Código Orgánico Integral
patent laws and practices and trademarks. For example, Article Penal) were introduced with new limited sanctions put in
268 increases the number of non-patentable subject matter and place for the commercial infringement of trademarks and
Article 274 eliminates any patentability of second use inventions. copyrights. Specifically, a new Article 208A was inserted to
While the latter is part of Andean Decision 486, this restriction the code that provides minimum and maximum fines for
had nevertheless not been codified previously in Ecuador’s commercial infringement of these IP rights. The new law
existing Intellectual Property Law. With regard to the protection provides statutory fines that, depending on the scale of
of trademarks, the term of protection for trademarks has been commercial infringement, range from a minimum fine of
amended under Article 365 with renewal periods limited to roughly USD20,000 to a maximum fine of over USD100,000.
two renewals. This markedly stands in contrast to TRIPS Article The fines are calculated based on the “salarios básicos
18, which states that “the registration of a trademark shall be unificados del trabajador en general,” which is a standard
renewable indefinitely.” On a positive note, Article 509 contains salary measurement set annually by the Ecuadorean
a defined five-year term of regulatory data protection for government. In 2016, this unit was set at USD366 per
biopharmaceutical test data. As noted in previous editions of the month. Although reimposing criminal sanctions and fines for
Index, the existing Intellectual Property Law contains an article trademark and copyright infringement is a positive step for
on RDP but does not include a defined term of protection. Ecuador, these new sanctions do not include imprisonment
At the time of research, the legislation had not yet officially and the fines are inversely proportioned to the scale of
become law and it remains unclear the extent to which this new the infringement, with small-scale infringement receiving a
legislation will interact with or override the existing Intellectual larger fine in proportion to the value of the infringement.
Property Law. Consequently, Ecuador’s score has not been
affected by this legislation for this edition of the Index.
[ 46 www.uschamber.com/ipindex ]
EGYPT Rank: 41/45
Patents
100
90
80 Percentage of Overall Score
Membership and 70
60
Ratification of 35
50
40
Copyrights
International Treaties 30
30
20
10 25
20
15.39
15 13.73
9.38
Enforcement 10
Trademarks
5
0
Egypt Median Regional
Egypt Trade Secrets and Market Access Index Score Average
Top 5 Economies’ Average Score
[ www.uschamber.com/ipindex 47 ]
Spotlight on the National IP Environment
Patents, Related Rights, and Limitations law does not provide specific remedies or rights within an
online or digital context. For example, the law does not
2. Patentability requirements; and 3. Patentability of
include any notification and takedown system in place for
computer-implemented inventions (CIIs): The 2002 Law 82
online infringement, and Article 181 of the law contains only
“Pertaining to the Protection of Intellectual Property Rights”
rudimentary DRM protection measures and technological
provides definitions and standards for all IP rights including
protection measures with, for instance, distribution not listed
patents and patentability. Article 1 of Book One states that
as an offense.
patents should be granted for inventions that are new,
involve an inventive step, and are industrially applicable.
Local legal analysis suggests that, unlike most patent offices, Enforcement
the Egyptian Patent Office does not allow second use claims 26. Software piracy rates; 27. Civil and procedural remedies;
in Swiss form or otherwise. Looking at the patentability of 28. Preestablished damages and/or mechanisms for
CIIs, some uncertainty about the current situation exists. determining the amount of damages generated by
Egypt promotes a system of software registration and infringement; and 29. Criminal standards including
protection for computer software under copyright, but minimum imprisonment and minimum fines: Rights
the patenting of “programs” is not allowed under Law 82. holders face a challenging environment for enforcing IP
However, practice suggests that CIIs are indeed granted. rights in Egypt. Civil remedies, criminal standards, and
The Information Technology Industry Development Agency mechanisms for determining damages are in place but are
(part of the Ministry of Communications and Information relatively low and not consistently applied or enforced. Basic
Technology) directly supports and sponsors the filing of civil remedies are in place for the infringement of all IP rights
patents for CIIs in Egypt and abroad. And looking at patent including the issuing of injunctions and the seizure of profits
applications in Egypt, WIPO statistics from 2000 to 2014 and infringing goods, but enforcement is difficult because,
show computer technology filings as the third largest as mentioned, Egypt’s court system is overburdened.
category of filing at the Egyptian Patent Office at 7.13% of Criminal sanctions are available under existing copyright
the total. Still, survey evidence from a 2014 study by WIPO and trademark laws, but these sanctions are relatively
of the Egyptian ICT sector shows the use of IP rights to lenient; for example, businesses engaging in infringement
protect new technologies even within the software industry can be ordered closed, but only for a maximum period of
is currently underused. While 95% of participating small and six months. Levels of physical counterfeiting and online
medium-sized enterprises (SMEs) claimed they were creating piracy are high. The Business Software Alliance estimates
IP assets that should be protected, only 25% actually did that Egypt’s software piracy rate is 61%; this has remained
formally protect these assets through the use of IP rights. virtually unchanged since 2009. Estimated rates of physical
counterfeiting are also high; for example, EU customs lists
4. Pharmaceutical-related patent enforcement and Egypt as the top country of origin for counterfeit goods.
resolution mechanism: There is currently no mechanism
that links the market authorization of a follow-on 30. Effective border measures; and 31. Transparency and
biopharmaceutical product with the exclusivity status of public reporting by customs authorities of trade-related
the reference product. Industry reports suggest that, since IP infringement: Ex officio action is not explicitly provided
2013, a number of follow-on products have been granted by Customs Law or the 2005 “Executive Regulation to
market authorization by the health authorities even though Implement Import and Export Law” (No. 770/2005).
the reference product is under patent protection. Given Egyptian customs authorities do not use a centralized
the difficulties in enforcing IP rights through the Egyptian recording system. Existing procedures require rights
court system—Egypt ranked 104 out of 113 countries on holders to notify customs in advance of specific suspected
availability of civil justice and enforcement on the 2016 shipments and provide evidence of infringement of their IP
World Justice Project’s Rule of Index—the lack of a linkage rights. Local legal analysis suggests that border measures do
mechanism means rights holders have a very limited ability not extend to goods in transit; Egyptian IP law relates only
to protect and defend their IP from infringement. to goods intended for the Egyptian market.
[ 48 www.uschamber.com/ipindex ]
FRANCE Rank: 6/45
Patents
100
90
80 Percentage of Overall Score
Membership and 70
60
Ratification of 35
50
40
Copyrights 30.87
International Treaties 30
30 27.61
20
10 25
20
15.39
15
Enforcement 10
Trademarks
5
0
France Median Regional
France Trade Secrets and Market Access Index Score Average
Top 5 Economies’ Average Score
[ www.uschamber.com/ipindex 49 ]
Spotlight on the National IP Environment
Past Editions versus Current Scores Trademarks, Related Rights, and Limitations
France’s overall score has decreased from 90.7% (27.22 out of 16. Discrimination/restrictions on the use of brands in
30) in the fourth edition to 88.2% (30.87 out of 35) in the fifth the packaging of different products: Plain packaging
edition. Although this score reflects a strong performance in the legislation (Law N. 2016-41) was adopted in 2015 and
5 new indicators added in the fifth edition, the introduction of entered into force in 2016. Starting from this date, tobacco
plain packaging for tobacco products has resulted in a reduction products in France are sold in logo-free packages and brand
of France’s score by 1 point. names appear in a small, uniform typeface, as defined by
Decree No. 2016-334 of March 2016. France’s Constitutional
Council upheld the validity of Law N. 2016-41 in January
Copyrights, Related Rights, and Limitations
2016. The introduction of this measure significantly restricts
10. Legal measures that provide necessary exclusive rights the use of brands, trademarks, and trade dress on retail
preventing infringement of copyrights and related rights packaging, undermining the benefits of trademarks to
(including Web hosting, streaming, and linking): As businesses and consumers alike, and sets a negative
discussed in previous editions of the Index, the antipiracy precedent for IP policy. The passage and implementation of
institutional setting came under increased scrutiny when this legislation has decreased France’s score on this indicator
an amendment to dismantle HADOPI (the independent from 1 to 0.
agency charged since 2010 with implementing a three-strike
regime against copyright infringers) was initially adopted
by the French National Assembly but later removed by Enforcement
the Senate. This followed publication by the Senate of a 29. Criminal standards including minimum imprisonment
report on independent administrative authorities that found and minimum fines: Article 44 of Law 731-2016 stiffens
HADOPI’s graduated response mechanism inadequate remedies for organized counterfeit activities. Organized
to curb online piracy. From 2010 to 2015, more than 5.4 counterfeiters can be punished with up to seven years in
million infringement notices had been delivered, with prison and a fine of up to EUR750,000 (instead of five years
504,000 account holders receiving a second notice and and EUR500,000, respectively).
2,900 receiving a third one, and about 400 more serious
cases reported for prosecution. However, many of these
reportedly were archived or resulted in a “reminder of
the law.” The number of cases reported for prosecution
increased considerably from June 2015 to June 2016,
with more than 600 in that 12-month span. The French
Administrative Supreme Court (Conseil d’Etat) ordered the
prime minister to take regulatory measures to indemnify
ISPs and granted one of them EUR900,000 in compensation
for the costs incurred in implementing HADOPI’s system.
No decree had been published at the time of research, but
the agency’s budget has been increased, possibly to cover
these new costs. Dismantling HADOPI was first included in
President Hollande’s electoral campaign agenda in 2012,
together with a reform of the copyright remuneration
system. Acting on this second issue, in June 2016 the
French Parliament adopted a bill on “Freedom of Creation,
Architecture, and Heritage.” The bill remains mostly silent
on the online environment, with the noticeable exception
of demanding search engines to pay royalties for indexing
images online. Last, the bill “For a Numerical Republic”
adopted in October 2016, which introduces into French
law a freedom of panorama exception, did not adopt an
amendment proposing a proactive role by intermediaries
against piracy and counterfeit online; however, the issue
remains under discussion in the framework of the EU
copyright reform.
[ 50 www.uschamber.com/ipindex ]
GERMANY Rank: 3/45
Patents
100
90
80 Percentage of Overall Score
Membership and 70
60
Ratification of 35 31.92
50
40
Copyrights
International Treaties 30
30 27.61
20
10 25
20
15.39
15
Enforcement 10
Trademarks
5
0
Germany Median Regional
Germany Trade Secrets and Market Access Index Score Average
Top 5 Economies’ Average Score
[ www.uschamber.com/ipindex 51 ]
Spotlight on the National IP Environment
[ 52 www.uschamber.com/ipindex ]
HUNGARY Rank: 13/45
Patents
100
90
80 Percentage of Overall Score
Membership and 70
60
Ratification of 35
50
40
Copyrights
International Treaties 30
30 27.61
20 25.39
10 25
20
15.39
15
Enforcement 10
Trademarks
5
0
Hungary Median Regional
Hungary Trade Secrets and Market Access Index Score Average
Top 5 Economies’ Average Score
[ www.uschamber.com/ipindex 53 ]
Spotlight on the National IP Environment
Copyrights, Related Rights, and Limitations 19. Availability of frameworks that promote cooperative
action against the online sale of counterfeit goods:
10. Legal measures that provide necessary exclusive rights
Physical counterfeiting and the availability of counterfeit
preventing infringement of copyrights and related rights
goods is a major challenge in Hungary, particularly the
(including Web hosting, streaming, and linking); 11.
availability of counterfeit medicines. Since January 2015,
Availability of frameworks that promote cooperative
websites that sell fake or prohibited medicines can be taken
action against online piracy; and 13. Digital rights
down for 90 days by order of the National Institute for
management (DRM) legislation: Protecting copyrighted
Quality and Organizational Development in Healthcare and
material—especially from online piracy—has long been a
Medicines, in line with paragraph 20/A of the Hungarian
challenge for rights holders in Hungary. Article 77 of the
Act 95 of 2005 on Medicinal Products for Human Use. The
revised Criminal Code states that criminal material disclosed
website owner has 24 hours to comply; noncompliance
through an electronic communications network shall be
results in a fine. The institute can display the name of the
rendered irreversibly inaccessible. Although this article does
infringing websites for up to 90 days and can report the
apply to cases of IP rights infringement, relatively limited
infringement to the authorities.
case law exists. The Hungarian E-Commerce Act provides
a clear and timely notification and takedown procedure,
whereby ISPs have 12 hours to remove the allegedly Enforcement
infringing content, as well as safe harbor mechanisms for 27. Civil and procedural remedies; 28. Preestablished
ISPs. Although the original formulation refers mostly to damages and/or mechanisms for determining the
copyright infringement, ISP liability was recently under the amount of damages generated by infringement; and 29.
spotlight in Hungary, mainly with regard to defamatory and Criminal standards including minimum imprisonment and
hateful content. Surveys and academic research suggest minimum fines: The protection available to IP rights holders
that Hungary has one of the highest rates of copyright in Hungary is often hindered by gaps in enforcement and
infringement of all EU member states. For example, even availability of key remedies. The Criminal Code provides
though the Copyright Act sanctions all major aspects of for prison terms of up to 10 years for infringements with
TPM circumvention and DRM alteration (Articles 95 and a particularly substantial financial loss, but no fines. Also,
96), academic research of video game piracy suggests that no punitive damages are in place and local legal analysis
Hungary constitutes a disproportionate share of global suggests that high amounts of damages are difficult to
video game piracy. According to a study on Bit Torrent obtain and their calculation highly unpredictable. Indeed,
conducted by academics from Aalborg University, the despite the existence of these relatively strong criminal
University of Waterloo, and Copenhagen Business School, penalties, Hungary continues to suffer from a lack of
Hungary was a top-5 country with the highest video game deterrent sentences. According to the latest edition of a
piracy user rate as a percentage of its population. National Board Against Counterfeiting yearly survey, low
prices and a lack of deterrent effect from penalties continue
Trademarks, Related Rights, and Limitations to fuel consumers’ decision to buy counterfeits. About a
third of young people surveyed admitted having done so
16. Discrimination/restrictions on the use of brands in
at least once in the previous year. The negative impact
the packaging of different products: In 2016, Hungary
on the Hungarian economy is significant. As reported by
amended Government Decree 39/2013 (of 14 February
the European Union Intellectual Property Office (EUIPO)
2013) on the Manufacture, Placement on the Market, and
Observatory, Hungary is, after Romania, the EU economy
Control of Tobacco Products, and from May 2016 has
that lost the most from sales of counterfeit handbags and
introduced plain and brand-neutral packaging for tobacco
luggage (28.5% out of total national sales); the 3rd most
products. The amended decree applies immediately to
for drugs and jewelry (13.1% and 16.9% of total sales,
any new products introduced onto the Hungarian market.
respectively); and the 4th most for toys and games (19% of
Products already on the market have received a reprieve
total sales).
until 2019. The introduction of this measure significantly
restricts the use of brands, trademarks, and trade dress on
retail packaging—undermining the benefits of trademarks
to businesses and consumers alike—and sets a negative
precedent for IP policy. The passage and implementation of
this legislation has resulted in Hungary receiving a score of 0
on this indicator.
[ 54 www.uschamber.com/ipindex ]
INDIA Rank: 43/45
Patents
100
90
80 Percentage of Overall Score
Membership and 70
60
Ratification of 35
50
40
Copyrights
International Treaties 30
30
20
10 25
20 17.64
15.39
15
10 8.75
Enforcement Trademarks
5
0
India Median Regional
India Trade Secrets and Market Access Index Score Average
Top 5 Economies’ Average Score
[ www.uschamber.com/ipindex 55 ]
Spotlight on the National IP Environment
Past Editions versus Current Scores Copyrights, Related Rights, and Limitations
India’s overall score has increased marginally from 24% (7.05 12. Scope of limitations and exceptions to copyrights and
out of 30) in the fourth edition to 25% (8.75 out of 35) in the related rights: On September 16, 2016, the High Court of
fifth edition. This change in score reflects a relatively mixed Delhi issued a final judgment in the long-running court case
performance in the 5 new indicators added in the fifth edition. between some of the world’s leading academic publishers
(including both Oxford and Cambridge University presses
and Taylor & Francis) and the University of Delhi and a
General Comments
local photocopy shop. The case was first launched in 2012
In May 2016, the Ministry of Commerce and Industry and the with the publishers suing both the University of Delhi and
Department of Industrial Policy and Promotion released the the copy shop for infringement and enabling copyright
long-awaited National Intellectual Property Rights Policy. This infringement. The rights holders argued that the university
document outlines the strategic direction and policy goals of the had not only allowed the operation of the copy shop on
Indian government with respect to the protection of IP for the its premises but outsourced the production of university
foreseeable future. Of note is that the Policy addresses a number course materials to it. In so doing, it had gone beyond
of important gaps in India’s national IP environment, including the any reasonable interpretation of educational exceptions to
need for stronger enforcement of existing IP rights by building copyright. The September 2016 judgment dismissed the
new state-level IP cells and investing more resources in existing lawsuit, with the judge stating: “Copyright, especially in
enforcement agencies; strengthening administrative capacities literary works, is thus not an inevitable, divine, or natural
at India’s IP offices including by reducing processing times for right that confers on authors the absolute ownership of
patent and trademark applications; and the need to introduce a their creations. It is designed rather to stimulate activity and
legislative framework for the protection of trade secrets. And while progress in the arts for the intellectual enrichment of the
comprehensive reform and execution in these areas would mark public.” The judgment did not only not find anything wrong
a notable improvement to India’s national IP environment, the with the university providing a photocopied master-copy of
Policy dismissed the need for more extensive legislative reform. course texts for students to photocopy themselves in the
Specifically, it did not address the challenges and uncertainties university library, but it also did not object to the obvious
rights holders face when it comes to protecting their patent rights commercial gain derived from the copy shop by providing
(particularly in the biopharmaceutical sector), modernizing existing this service to university students and staff. The judgment
copyright laws, or introducing international best practices and underlines the challenging environment rights holders and
new sector-specific IP rights such as regulatory data protection for creators face in protecting their IP not only in court but
submitted biopharmaceutical test data. more broadly and across all major forms of content in India.
Only a few days prior to the judgment and in an unrelated
Patents, Related Rights, and Limitations matter, Bollywood actor Rajeev Khandelwal commented
on the impact piracy is having in India and specifically on a
8. Patent opposition: Section 25 of the Patents Act outlines
prerelease leak and pirating of a number of Indian feature
the procedures and requirements for initiating opposition
films. He said: “Piracy means you are killing an industry. …
proceedings. The law provides for both pre- and post-grant
If this continues, filmmakers will fear investing money in a
oppositions. The procedures are similar; the key difference
film, people will start losing jobs, and the industry will
is that pre-grant opposition can be initiated by “any person”
fade away.”
whereas post-grant opposition must be initiated by an
interested party. The pre-grant opposition mechanism in
India has long been criticized for adding significantly to
the already lengthy patent prosecution timelines in India.
In particular, local legal opinion suggests that pre-grant
opposition and the right of the applicant to, for example,
request a hearing, causes undue delays. The most recent
2016 statistics suggest that 98% of patents granted in India
in 2015 were for applications over 5 years old. In one case, it
took 19 years to prosecute and grant a patent.
[ 56 www.uschamber.com/ipindex ]
INDONESIA Rank: 39/45
Patents
100
90
80 Percentage of Overall Score
Membership and 70
60
Ratification of 35
50
40
Copyrights
International Treaties 30
30
20
10 25
20 17.64
15.39
15
9.64
Enforcement 10
Trademarks
5
0
Indonesia Median Regional
Indonesia
Trade Secrets and Market Access Index Score Average
Top 5 Economies’ Average Score
[ www.uschamber.com/ipindex 57 ]
Spotlight on the National IP Environment
Past Editions versus Current Scores Trademarks, Related Rights, and Limitations
Indonesia’s overall score has decreased from 28.6% (8.59 out 17. Ability of trademark owners to protect their trademarks:
of 30) in the fourth edition to 27.5% (9.64 out of 35) in the fifth requisites for protection; and 18. Legal measures
edition. This drop in score reflects a relatively weak performance available that provide necessary exclusive rights to
in the 5 new indicators added in the fifth edition and a redress unauthorized uses of trademarks: 2016 saw a
deterioration of the environment as it relates to Category 1: number of important developments with respect to the
Patents, Related Rights, and Limitations and the new patent law. protection of trademarks in Indonesia. In October 2016, a
new Trademark and Geographic Indications law was passed.
Although it primarily focuses on expanding the realm of
Patents, Related Rights, and Limitations
protection for trademarks to nontraditional trademarks
1. Patent term of protection; 2. Patentability (including sound holograms and 3-D marks) and improving
requirements; and 3. Patentability of computer- the speed and administration of trademark applications, the
implemented inventions (CIIs): In 2016, the Indonesian law also strengthened existing enforcement mechanisms.
Parliament (People’s Representative Council) finally passed Specifically, Article 100 strengthens existing criminal
a new, wide-ranging patent law (Law 13 2016). Although sanctions against trademark infringement. Fines have
it aims to strengthen Indonesia’s innovation infrastructure been increased to a maximum of IDR2–5 billion (about
and to encourage more high-tech economic development USD150,000–380,000) and prison sentences to between 4
through the creation and use of new technologies, and 10 years. The higher fines and sentences are applicable
overall the law does not improve what was already a only in cases in which the infringing goods have led to
challenging patenting environment. First, Article 4 inserts public health issues, death, or environmental damage. This
a new heightened efficacy requirement that targets is a positive development, given the relatively high level of
biopharmaceutical products and outlaws second use claims. counterfeit medicines in Indonesia. Unfortunately, a number
The new efficacy standard is not comprehensively defined, of negative developments increased the already high level
with the sole example cited being for antibiotics. In a of uncertainty about the protection of well-known marks.
further effort to target biopharmaceutical innovation, Article Two decisions by the Supreme Court of Indonesia entrench
167 allows for parallel importation of follow-on products the difficulties that rights holders face in protecting their
under patent protection in Indonesia but approved for registered and well-known marks from rival and potential
consumption in other markets. The law explains that this bad faith registrations and subsequent use. In September
importation is to target the cost of medicines, particularly 2016, the court rejected the claims of designer Pierre Cardin
where prices in Indonesia are judged to be higher than that a local company was infringing its trademark. The local
the “international market.” No details are provided as to company had filed a similar trademark in the late 1970s
what constitutes a “higher price” or the “international incorporating the Pierre Cardin name, whereas the French
market.” This law adds significant uncertainty and raises designer had only registered its trademark in Indonesia
serious questions about the extent basic patent protection in 2009. In a different case, the Supreme Court held that
is afforded to biopharmaceutical products in Indonesia. Swedish furniture giant IKEA’s locally registered trademarks
More broadly, Article 20 of the law mandates that all patent were not valid as they had not been used for a period of 3
rights holders “make” the patented product or process years. The challenge of nonuse came from a local furniture
within Indonesia. Subsection (2) of this article states that company that requested to file its own trademark acronym
this production should support Indonesia’s industrial “IKEA,” which is short for Intan Khatulistiwa Esa Abadi.
and development policies, specifically the “transfer of
technology, investment absorption and/or employment.”
No further details are provided about the meaning or
legal definition of “make” in this context. As discussed in
previous editions of the Index, Indonesia has had in place
a number of localization requirements that target certain
industrial sectors (most notably the biopharmaceutical
sector), but it would seem that this new requirement has
broadened this mandatory localization to any patented
technology. In one notable positive development, the
new patent law does allow a limited form of patenting of
CIIs. The explanation to Article 4(3) seems to suggest that
patents will be allowed when they fulfill a technical effect or
problem-solving requirement.
[ 58 www.uschamber.com/ipindex ]
ISRAEL Rank: 16/45
Patents
100
90
80 Percentage of Overall Score
Membership and 70
60
Ratification of 35
50
40
Copyrights
International Treaties 30
30
20
10 25 22.27
20
15.39
15 13.73
Enforcement 10
Trademarks
5
0
Israel Median Regional
Israel Trade Secrets and Market Access Index Score Average
Top 5 Economies’ Average Score
[ www.uschamber.com/ipindex 59 ]
Spotlight on the National IP Environment
Past Editions versus Current Scores to obtain a court order for restricting access to a website
with pirated content, and to reveal the identity of the
Israel’s overall score has decreased from 66% (20.06 out of 30)
violator. In addition, making pirated works publicly available
in the fourth edition to 64% (22.27 out of 35) in the fifth edition.
with the intention of profit-making activities would be
This drop in score reflects a relatively weak performance in the 5
regarded as a criminal activity. Although not entirely in
new indicators added in the fifth edition including patent-related
line with international best practices—given the millions
opposition proceedings.
of infringements taking place online every day, requiring
a court order for the disabling of access to a website with
Patents, Related Rights, and Limitations pirated content would impose a severe practical restriction
8. Patent opposition: Israeli patent law provides for a pre- on the availability of this mechanism to rights holders—
grant form of opposition to pending patent applications. these legislative developments would nevertheless be
The examination of a patent application’s eligibility for welcome and would increase Israel’s score on this indicator.
registration is conducted by the Israeli Patent Office within
a time frame of 18 months from the filing date, upon which
the application is published online for public scrutiny.
Once published, a period of 3 months is granted during
which third parties are permitted to file an opposition
to the patent application. Upon filing of a notification
of opposition, a period of 13 months is granted to the
opposing party to submit the causes, arguments, and
supporting evidence for the opposition, and for responses
by both parties. Thus, the examination of a patent
application can be extended by an additional 16 months,
not including the process of reexamination and/or judicial
hearings. Regardless of the merits of any opposition filing,
these generous timelines add a significant burden and
delay to the patent prosecution process in Israel. In a
positive move, the Ministry of Justice in fall 2016 published
a public call for comments and suggestions regarding
its intention to review the existing pre-grant system.
This marks a potential shift and recognition by Israeli
policymakers of the costs the pre-grant system imposes on
inventors and Israeli consumers.
[ 60 www.uschamber.com/ipindex ]
ITALY Rank: 10/45
Patents
100
90
80 Percentage of Overall Score
Membership and 70
60
Ratification of 35
50
40
Copyrights
International Treaties 30
30 27.73 27.61
20
10 25
20
15.39
15
Enforcement 10
Trademarks
5
0
Italy Median Regional
Italy Trade Secrets and Market Access Index Score Average
Top 5 Economies’ Average Score
[ www.uschamber.com/ipindex 61 ]
Spotlight on the National IP Environment
Past Editions versus Current Scores Trade Secrets and Market Access
Italy’s overall score has increased from 76% of the total possible 22. Protection of trade secrets: Italy’s Industrial Property
score (with a score of 22.69 out of 30) in the fourth edition to Code grants explicit legal protection for trade secrets in
79% (27.73 out of 35) in the fifth edition. This increase in score Articles 98 and 99, which provide for specific definitions
reflects positive results from the implementation of a new notice and remedies, respectively. Also, criminal law can be
and takedown system captured by indicator 11 and relatively invoked for disclosure of trade secrets in bad faith. The
high scores in the new indicators, particularly due to alignment relatively high standard of protection for trade secrets was
to EU standards and practices in IP. However, weaknesses remain confirmed in 2016 in the Mazar case, in which the Court
in comparison with similar developed economies in key areas, of Milan established the need to strictly comply with trade
such as IP enforcement. secret law during mergers. Protection is further enhanced
under the new EU Trade Secret Directive, resulting in a rise
in score for this indicator by 0.25. In addition to setting
Copyrights, Related Rights, and Limitations
common minimum standards and a common trade secret
11. Availability of frameworks that promote cooperative definition, the directive introduces for the first time in most
action against online piracy: Regulation of the Italian member states, including Italy, secondary liability claims and
Communications Regulatory Authority (AGCOM) on protection of confidentiality during legal procedures.
copyright protection and electronic communication
networks, in force since 2014, empowers AGCOM to receive 24. Regulatory and administrative barriers to the
complaints from rights holders and order ISPs to remove or commercialization of IP assets: In the realm of technology
prevent access to illegally published content. Since 2014, standardization, SEP licensing terms have come under
the new system has seen growing levels of participation increased scrutiny in recent years from both EU courts and
and reinforcement in judicial rulings. As of October 2016, regulators. For several years, European regulators have
AGCOM had received more than 620 complaints, with a engaged in different efforts to coordinate and harmonize
substantial share (about 150) involving voluntary takedown the standardization process, including in relation to setting
by ISPs; that is, in response to AGCOM’s relay of rights licensing terms. Courts have also weighed in; in one recent
holder notice. On this basis, Italy’s score for this indicator landmark case, the European Court of Justice’s opinion
increases by 0.25. Nevertheless, the legislation still does in Huawei v. ZTE detailed procedural aspects of FRAND
not mandate a strictly self-regulated action, with AGCOM negotiations in the EU. According to these guidelines,
intermediation required to enforce ISP liability. SEP holders seeking an injunction should, among other
elements, present the implementer with a written offer on
Trademarks, Related Rights, and Limitations FRAND terms that specifies all relevant terms including the
royalty. The court’s involvement, however, has not extended
18. Legal measures available that provide necessary
to the process for determining royalty rates.
exclusive rights to redress unauthorized uses of
trademarks; and 30. Effective border measures: EU
Regulation 2015/2424 formally extends the scope of
trademark enforcement activities to in-transit custom
actions and preparatory acts such as the production of fake
labels. These measures are particularly relevant for Italy,
whose brands are among the most affected worldwide
by counterfeit trade according to a recent OECD-EUIPO
joint report. Furthermore, in implementing the new EU
framework, Italy’s Patent and Trademark Office will be
required to introduce administrative proceedings for the
invalidation and revocation of trademarks (by 2023), filling in
one important gap in the existing trademark framework.
[ 62 www.uschamber.com/ipindex ]
JAPAN Rank: 4/45
Patents
100
90
80 Percentage of Overall Score
Membership and 70
60
Ratification of 35
50
40
Copyrights 31.29
International Treaties 30 30
20
10 25
20 17.64
15.39
15
Enforcement 10
Trademarks
5
0
Japan Median Regional
Japan Trade Secrets and Market Access Index Score Average
Top 5 Economies’ Average Score
[ www.uschamber.com/ipindex 63 ]
Spotlight on the National IP Environment
Past Editions versus Current Scores monitoring that any proprietary software used should be
licensed software. This is most notable, for example, in the
Japan’s overall score has increased significantly from 78% (23.34
prefecture of Ishikawa, which since the late 2000s has taken
out of 30) in the fourth edition to 89% (31.29 out of 35) in the
a comprehensive approach to the use and monitoring of
fifth edition. This increase in score reflects a strong performance
county government software.
in the 5 new indicators added in the fifth edition as well as the
accession to all international IP treaties included in the Index.
Membership and Ratification of International
Treaties
Copyrights, Related Rights, and Limitations
Since it was first included in the second edition of the Index,
9. Copyright (and related rights) term of protection; 10.
Japan has stood out as one of the few (with Canada) developed
Legal measures that provide necessary exclusive rights
high-income economies that scored low in its participation in
preventing infringement of copyrights and related
and ratification of international treaties. This fundamentally
rights (including Web hosting, streaming, and linking);
changed in 2016 when Japan signed and acceded to both
and 28. Preestablished damages and/or mechanisms
the Patent Law Treaty and the Singapore Treaty on the Law of
for determining the amount of damages generated by
Trademarks. Furthermore, in November 2016 the lower house of
infringement: Reports suggest that, as part of Japan’s
the Japanese Diet voted to ratify the TPP treaty. The accession
commitments under the TPP, the Agency for Cultural Affairs
and ratification, respectively, by Japan to these treaties has
and Japanese Cabinet are considering amending Japanese
resulted in a significant increase in Japan’s score in this category.
copyright law in 3 major areas. First, under the proposals,
the copyright term of protection (currently 50 years for
orphan works) would be increased to 70 years. Second,
the government is considering introducing preestablished
or statutory damages for infringement. In the past, rights
holders have pointed to the relatively low damages
awarded for most forms of IP infringement and especially
for copyright. Last, the agency is also reportedly considering
strengthening existing police enforcement powers. Once
passed and implemented, these reforms would raise Japan’s
already high scores and further strengthen its position as a
leader in the Index.
[ 64 www.uschamber.com/ipindex ]
KENYA Rank: 31/45
Patents
100
90
80 Percentage of Overall Score
Membership and 70
60
Ratification of 35
50
40
Copyrights
International Treaties 30
30
20
10 25
20
15.39
13.95 13.73
15
Enforcement 10
Trademarks
5
0
Kenya Median Regional
Kenya Trade Secrets and Market Access Index Score Average
Top 5 Economies’ Average Score
[ www.uschamber.com/ipindex 65 ]
Spotlight on the National IP Environment
[ 66 www.uschamber.com/ipindex ]
MALAYSIA Rank: 19/45
Patents
100
90
80 Percentage of Overall Score
Membership and 70
60
Ratification of 35
50
40
Copyrights
International Treaties 30
30
20
10 25
20 17.19 17.64
15.39
15
Enforcement 10
Trademarks
5
0
Malaysia Median Regional
Malaysia Trade Secrets and Market Access Index Score Average
Top 5 Economies’ Average Score
[ www.uschamber.com/ipindex 67 ]
Spotlight on the National IP Environment
Past Editions versus Current Scores result of the marketing approval process.” The introduction
of a patent restoration period of 5 years would be in line
Malaysia’s overall score has stayed virtually the same, decreasing
with current international best practices and the benchmark
slightly from 49.2% (14.78 out of 30) in the fourth edition to
used in the Index. As for regulatory data protection,
49.1% (17.19 out of 35) in the fifth edition. This score reflects
since 2011, Malaysia has had in place a 5-year term of
a mixed performance in the 5 new indicators added in the
protection. However, as noted in past editions, the full
fifth edition.
term of protection has not been made available. Instead,
the term of protection has begun whenever a product
Patents, Related Rights, and Limitations was introduced globally. Article 18.5 of the TPP provides
4. Pharmaceutical-related patent enforcement and a 5-year term of RDP for new chemical entities and an
resolution mechanism; 6. Patent term restoration for 8-year term for biologics, with the term of protection to
pharmaceutical products; 7. Regulatory data protection begin from “the date of marketing approval of the new
term; 30. Effective border measures; and 35. At least pharmaceutical product in the territory of the Party.” Annex
one free trade agreement (FTA) with substantive 18C of the agreement defines the beginning of the term of
and/or specific IP provisions such as chapters on IP protection specifically for Malaysia: “For greater certainty,
and separate provisions on IP rights provided it was the periods of protection referred to … shall begin on the
signed after WTO/TRIPS membership: As one of 12 date of marketing approval of the pharmaceutical product in
signatory countries to the TPP Agreement, Malaysia is Malaysia.” Implementing the TPP treaty in full in these areas
currently ratifying the treaty and drafting implementing would significantly strengthen and fill many of the remaining
legislation. The TPP’s IP chapter is comprehensive and gaps in Malaysia’s national IP environment and specifically
touches on all major forms of IP rights. In September as it relates to the life sciences. It would also considerably
2016, Secretary General Datuk J. Jayasiri of the Ministry improve Malaysia’s score on the Index.
of International Trade and Industry commented on the
drafting of implementing TPP legislation. He stated that “18
laws” had been identified by the government as requiring
legislative amendments and that the government was
working on sending a package of legislation to Parliament
for approval. At the time of research, no draft legislation had
been publicly released by the government or was currently
being reviewed by the Parliament of Malaysia. As has been
noted over the past 4 editions of the Index, Malaysia has
significantly strengthened its national IP environment since
2011. In particular, copyright reforms and continued efforts
in the realm of enforcement of IP rights have resulted in a
continuous, year-on-year improvement to Malaysia’s score
on the Index. Malaysia is the highest-ranked middle-income
economy included in the Index. Implementation of the TPP
and corresponding legislative changes to Malaysia’s national
laws would fill many of the remaining gaps in its national
IP environment. This is particularly the case for patents
and biopharmaceutical IP rights. For example, Malaysia
does not currently have in place a pharmaceutical-related
patent enforcement mechanism. Article 18.53 of the TPP
provides the choice between two clear mechanisms of
either premarketing notification and/or linkage between the
market approval of a follow-on biopharmaceutical product
and the exclusivity status of the reference product. Similarly,
due to administrative delays, Malaysia does not currently
allow for patent term restoration for biopharmaceutical
products. Article 18.48 of the TPP states that contracting
parties to the treaty “shall make available an adjustment
of the patent term to compensate the patent owner for
unreasonable curtailment of the effective patent term as a
[ 68 www.uschamber.com/ipindex ]
MEXICO Rank: 20/45
Patents
100
90
80 Percentage of Overall Score
Membership and 70
60
Ratification of 35
50
40
Copyrights
International Treaties 30
30
20
10 25
20 16.87
15.39
15 13.79
Enforcement 10
Trademarks
5
0
Mexico Median Regional
Mexico Trade Secrets and Market Access Index Score Average
Top 5 Economies’ Average Score
[ www.uschamber.com/ipindex 69 ]
Spotlight on the National IP Environment
Past Editions versus Current Scores This new unit employs five prosecutors and focuses on
investigating and prosecuting Internet-related IP crimes.
Mexico’s overall score has increased slightly from 46% of the
total possible score (with a score of 13.83 out of 30) in the fourth
edition to 48% (16.87 out of 35) in the fifth edition. This change Membership and Ratification of International
in score is mainly a result of Mexico’s performance in the 5 new Treaties
indicators added in the fifth edition. In addition, Mexico’s score 35. At least one free trade agreement (FTA) with
for indicator 18 rises by 0.25 due to the introduction of a new substantive and/or specific IP provisions such as
platform for trademark opposition. Mexico also receives 0.5 chapters on IP and separate provisions on IP rights
under indicator 35 as a signatory of the TPP agreement. The provided it was signed after WTO/TRIPS membership:
accession by Mexico to the TPP and adoption of the IP standards The TPP was signed on February 4, 2016, by the 12
enshrined within the agreement would further strengthen contracting members and is expected to create a more level
Mexico’s national IP environment, particularly with regard to the playing field in IP and reflect 21st century realities. Mexico
life sciences and online copyright infringement. has reportedly committed to ratifying the agreement in
2016. TPP obligations will affect various indicators across the
Copyrights, Related Rights, and Limitations Index that are currently unavailable or inadequate in Mexico,
including introducing patent term extension, remedies
10. Legal measures that provide necessary exclusive rights
against circumvention of TPMs, protection for unregistered
preventing infringement of copyrights and related
well-known marks, and enhanced access to damage awards.
rights (including Web hosting, streaming, and linking):
Importantly, the current lack of clarity about the availability
While 2015 amendments that would introduce a notice
of RDP for biologics will conflict with Mexico’s commitments
and takedown system and penalties for online infringement
under the TPP, once ratified. The Federal Committee
were shelved, some steps were taken in 2016 to enhance
for Protection from Sanitary Risks (COFEPRIS) published
prosecution for online piracy. For example, a copyright
guidelines in June 2012 that provide protection against the
amendment closes one existing loophole by adding
use of undisclosed test data by any person for the purpose
the illegal reproduction and distribution of movies and
of marketing approval for a maximum of 5 years, but
audiovisual materials to the list of trade-related copyright
Mexican authorities reportedly indicated that RDP would not
infringements.
be considered as applicable to biologics.
Enforcement
29. Criminal standards including minimum imprisonment and
minimum fines: Under a constitutional reform passed in
2008 and was set to be implemented during 2016, Mexico
committed to overhaul its criminal justice system by moving
from a “mixed inquisitorial” to an “adversarial” model with
open and oral trials, in a bid to address significant court
backlogs and widespread abuse and corruption. At present,
however, implementation has been slow and patchy, notably
at the state level but also with regard to federal crimes
including IP infringement. Other developments aimed at
strengthening IP enforcement include the creation of a new
Digital IP Crime Unit within the Attorney General’s Office.
[ 70 www.uschamber.com/ipindex ]
NEW ZEALAND Rank: 14/45
Patents
100
90
80 Percentage of Overall Score
Membership and 70
60
Ratification of 35
50
40
Copyrights
International Treaties 30
30
20 24.05
10 25
20 17.64
15.39
15
Enforcement 10
Trademarks
5
0
New Median Regional
New Zealand Trade Secrets and Market Access Zealand Index Score Average
Top 5 Economies’ Average Score
[ www.uschamber.com/ipindex 71 ]
Spotlight on the National IP Environment
Past Editions versus Current Scores does not distinguish between different products or provide
New Zealand’s overall score has decreased from 71% (21.38 out varying definitions of delay; the negative impact on a patent
of 30) in the fourth edition to 69% (24.05 out of 35) in the fifth holder’s term of protection of a delay in approval is the
edition. This change in score reflects a mixed performance in the same regardless of the type of product. And given these
5 new indicators added in the fifth edition and the passing of long timelines, it is unlikely that rights holders would ever
plain packaging legislation for tobacco products. On a positive be offered a term of restoration. Last, unlike markets in
note, New Zealand’s score has increased 0.25 on indicator 30. which a mechanism for patent term restoration is in place
Although border officials still do not have comprehensive ex (including the U.S.), New Zealand’s draft legislation would
officio powers (as noted in previous discussions, existing powers apply only to direct delays caused by the national drug
are limited), local evidence and rates of physical counterfeiting regulatory authority Medsafe and not, for example, to time
suggest that New Zealand customs authorities are, in practice, taken to conduct any additional clinical trials requested as a
relatively effective in deterring and detaining suspected precondition for market approval by Medsafe.
counterfeit goods. Moreover, it is expected that once the
New Zealand Parliament passes the Trans-Pacific Partnership Trademarks, Related Rights, and Limitations
Agreement Amendment Bill (which includes a clear mandate for
16. Discrimination/restrictions on the use of brands in the
officials to take ex officio action against suspected goods), New
packaging of different products: On September 8, 2016,
Zealand will receive a full score on this indicator.
the Smoke-Free Environments (Tobacco Standardized
Packaging) Amendment Bill passed its third reading by the
Patents, Related Rights, and Limitations New Zealand Parliament. The bill received Royal Assent
6. Patent term restoration for pharmaceutical products: on September 14, 2016. The government has stated that
New Zealand has up until now been one of a handful of Implementing Regulations are currently being developed
developed OECD economies (including Canada) that following a public consultation, but regardless of the
has not provided restoration for pharmaceutical products final shape that these regulations take, the legislation
for loss of patent term time due to delays caused by outlines very clearly the complete elimination of the use
the marketing approval process. As one of 12 signatory of trademarks, branding, or any type of company logo by
countries to the TPP Agreement, New Zealand is currently rights holders. The introduction of plain packaging in New
ratifying the treaty and drafting implementing legislation. Zealand significantly restricts the use of brands, trademarks,
Article 18.48 of the TPP states that contracting parties to and trade dress on retail packaging of tobacco products
the treaty “shall make available an adjustment of the patent and severely limits the ability of trademark owners to exploit
term to compensate the patent owner for unreasonable their rights. The passage of this legislation decreases New
curtailment of the effective patent term as a result of the Zealand’s score on this indicator from 1 to 0.
marketing approval process.” As in other economies that
currently do not offer a restoration period, the introduction
of this mechanism would significantly strengthen New
Zealand’s national IP environment as it relates to the
life sciences. Draft implementing legislation has been
presented by the New Zealand government to Parliament
and is currently progressing in Parliament. The Trans-Pacific
Partnership Agreement Amendment Bill was in November
2016 reported out of the Foreign Affairs, Defense and
Trade Committee and recommended for passage by the
full Parliament. However, both this draft bill and proposed
regulations put forth by the Ministry of Business, Innovation
and Employment during the summer would effectively
undermine many of the principles contained in the TPP.
To begin with, both documents would limit the term of
restoration offered to a maximum of 2 years. This term
of restoration is significantly lower than the prevailing
international best practice of 5 years (offered in the U.S.
and EU) and the benchmark used in the Index. Furthermore,
the documents define “unreasonable delays” as delays of
between 3 and 5 years depending on the type of product (a
chemical versus a biologic medicine). The TPP agreement
[ 72 www.uschamber.com/ipindex ]
NIGERIA Rank: 35/45
Patents
100
90
80 Percentage of Overall Score
Membership and 70
60
Ratification of 35
50
40
Copyrights
International Treaties 30
30
20
10 25
20
15.39
13.73
15 10.97
Enforcement 10
Trademarks
5
0
Nigeria Median Regional
Nigeria Trade Secrets and Market Access Index Score Average
Top 5 Economies’ Average Score
[ www.uschamber.com/ipindex 73 ]
Spotlight on the National IP Environment
[ 74 www.uschamber.com/ipindex ]
PAKISTAN Rank: 44/45
Patents
100
90
80 Percentage of Overall Score
Membership and 70
60
Ratification of 35
50
40
Copyrights
International Treaties 30
30
20
10 25
20 17.64
15.39
15
Enforcement 10 8.37
Trademarks
5
0
Pakistan Median Regional
Pakistan Trade Secrets and Market Access Index Score Average
Top 5 Economies’ Average Score
[ www.uschamber.com/ipindex 75 ]
Spotlight on the National IP Environment
Patents, Related Rights, and Limitations Bill adopted by the legislature in 2016) could potentially
cover sales of counterfeits online. However, there is no
2. Patentability requirements: Pakistan’s Patent Ordinance
indication that enforcement action is taken on this basis.
provides for the standard patentability criteria of novelty,
Pakistan experiences high rates of counterfeiting, including
inventive step, and industrial application. Significant
via online sales of medicines. By some estimates, 40%–60%
barriers to patenting life sciences inventions exist, including
of drugs are considered to be fake, with up to 10,000 illegal
exclusions for isolated biologic or natural substances, new
distributors and pharmacies.
uses for a known product or process, and modifications that
do not result from a change in chemical formula or process
of manufacture. Moreover, most opposition proceedings Enforcement
in Pakistan (which largely occur pre-grant) target 27. Civil and procedural remedies; and 29. Criminal
pharmaceutical and biotech claims. Second medical use standards including minimum imprisonment and
patents are reportedly granted at times using a Swiss-style minimum fines: Generally speaking, IP laws provide
claim as long as material improvement in a compound’s standard remedies for infringement, although some
properties is present or there is evidence of enhanced significant loopholes are available. In cases where a
efficacy. Pakistan is not a contracting party to Patent defendant can show lack of knowledge, copyright holders
Cooperation Treaty (PCT) and no formal time frame for can only secure injunctions and profits (where relevant), and
examination exists. Patent examination typically takes about liability for copyright infringement is difficult to establish
two to three years. Relatively little jurisprudence exists on where no commercial use exists. Criminal penalties are
the boundaries of patentable subject matter, with litigation inadequate and nondeterrent, lack minimum sentences,
considered to be a costly and long process. In a positive and, for patents, do not distinguish between unconscious
step, the Plant Breeders’ Rights Act under consideration in and willful infringement. Huge delays have existed in the
2016 would allow for the patentability of seed and plant judicial system for some time; one report indicates that
biotechnologies. Electronic access to patent information is over 600,000 cases are pending in civil courts (with cases
also underway. lasting up to 5 years, although many cases never reach
trial). Courts are incentivized to provide very minimal
Copyrights, Related Rights, and Limitations sentences, with imprisonment rarely imposed. However,
some improvements to the system have taken place
10. Legal measures that provide necessary exclusive
in recent years. For instance, certain provinces have
rights preventing infringement of copyrights and
raised the penalties for infringement; in 2015, Punjab
related rights (including Web hosting, streaming, and
province increased penalties for the production and sale
linking); 11. Availability of frameworks that promote
of counterfeit medicines to a minimum of 5 years (with a
cooperative action against online piracy; and 12.
maximum of 10 years). In addition, in 2015, the Intellectual
Scope of limitations and exceptions to copyrights and
Property Organization introduced specialized IP courts,
related rights: Pakistan’s Copyright Ordinance provides
training for judges, and efforts to reduce red tape. It
for general exclusive rights against infringement but does
remains to be seen how effective these new courts will be in
not specifically address piracy in the online sphere. It also
addressing backlogs, but appointed judges reportedly have
outlines a fair dealing framework in relation to copyright,
strong IP backgrounds.
although it contains a major loophole for the government
use of textbooks, allowing for a royalty-free compulsory
license. Digital piracy is rampant in a number of sectors,
including an estimated 90% rate of book piracy at
universities. Music and software piracy is also very high, as
is unauthorized rebroadcasting. No ISP liability in relation
to copyright exists, and media reports in 2016 mentioned
that a number of ISPs in Pakistan run dedicated portals for
pirated content.
[ 76 www.uschamber.com/ipindex ]
PERU Rank: 28/45
Patents
100
90
80 Percentage of Overall Score
Membership and 70
60
Ratification of 35
50
40
Copyrights
International Treaties 30
30
20
10 25
20
14.34 15.39
15 13.79
Enforcement 10
Trademarks
5
0
Peru Median Regional
Peru Trade Secrets and Market Access Index Score Average
Top 5 Economies’ Average Score
[ www.uschamber.com/ipindex 77 ]
Spotlight on the National IP Environment
[ 78 www.uschamber.com/ipindex ]
PHILIPPINES Rank: 34/45
Patents
100
90
80 Percentage of Overall Score
Membership and 70
60
Ratification of 35
50
40
Copyrights
International Treaties 30
30
20
10 25
20 17.64
15.39
15 11.78
Enforcement 10
Trademarks
5
0
Philippines Median Regional
Philippines Trade Secrets and Market Access Index Score Average
Top 5 Economies’ Average Score
[ www.uschamber.com/ipindex 79 ]
Spotlight on the National IP Environment
Patents, Related Rights, and Limitations 13. Digital rights management (DRM) legislation: 2013
amendments to the IP Code define circumvention of
2. Patentability requirements: The Intellectual Property Code
technological measures as infringement and allow for
of the Philippines provides for standard basic criteria for
double damages to be sought. In addition, while the IP
patentability; however, certain exclusions are out of sync
Code is fairly nonspecific (it includes electronic rights
with international standards. In particular, 2008 amendments
management information but does not specify access
introduced a fourth hurdle to patentability in the form of
control TPMs), the E-Commerce Act section 33 provides for
enhanced efficacy requirements explicitly aimed at limiting
criminal penalties for unauthorized access in a computer
the patentability of new forms and uses of pharmaceutical
system or ICT system. Specifically, penalties cover
products. But second medical use patents are available
“unauthorized copying, use and sharing of protected
per the examination guidelines of the IP Office (IPOPHL)
material, electronic signature or ... legally protected
through Swiss-type claims and as long as they fulfill
sound recordings through the internet,” with minimum
other patentability criteria. Similarly, although computer
fines of 100,000 pesos (about USD2,000) and 6 months’
programs are excluded from patentability in the IP Code,
to 3 years’ imprisonment). A 2015 legal opinion from the
its implementing rules permit software claims in relation
Department of Justice indicates that the above section of
to a unique technical operation or effect on a computer.
the E-Commerce Act can be applied to TPM circumvention.
IPOPHL faces significant backlogs: time to grant is three
Still, neither the IP Code nor the E-Commerce Act provide
to four years on average, depending on the type of patent
penalties for sales/trafficking in circumvention devices.
application. To help streamline processes and enhance
transparency, IPOPHL has adopted an electronic filing
system; it is a member of the ASEAN Patent Examination Enforcement
Cooperation with access to regional search and 27. Civil and procedural remedies; and 29. Criminal
examination results; and it has entered into a PPH with standards including minimum imprisonment and
the USPTO and JPO. minimum fines: The Philippines has in place both a
judicial and an administrative litigation system, whereby
7. Regulatory data protection (RDP) term: Section 72.4 IP infringement cases can be decided by courts or
of the IP Code and Administrative Order No. 27A s2001 administrative IP tribunals within IPOPHL. The dual system
protect against unfair commercial use and disclosure of generates some confusion about the validity of similar cases
undisclosed test data; however, no term of protection is before both the IPOPHL and judicial courts, leading to
stated in the law. uncertainty and additional costs. Nevertheless, IPOPHL is
generally considered to be a more streamlined and cost-
8. Patent opposition: The Philippines does not have in effective route compared to judicial proceedings, where
place an explicit patent opposition mechanism. Rather, significant backlog and red tape deters the filing of IP cases.
a third-party observation system (Community Review IPOPHL also engages in other enforcement activities in
Process), introduced recently, allows a select list of third partnership with rights holders, including sending warning
parties (including government, industry, universities, and notices to suspected infringers, conducting inspections and
other key stakeholders) to provide observations during raids, and collecting evidence. The latest data, however,
the examination process, which are taken into account by suggest that enforcement actions were lower in 2015–16
examiners. Given the early phases of the mechanism, there compared with previous years. Since 2008, the Philippines
is mixed evidence concerning its effectiveness and impact also has had in place an Inter-Agency Committee on
on patent office delays. IPR Enforcement, which inter alia dedicates efforts to
education campaigns, capacity building, data sharing, and
Copyrights, Related Rights, and Limitations international harmonization.
[ 80 www.uschamber.com/ipindex ]
POLAND Rank: 15/45
Patents
100
90
80 Percentage of Overall Score
Membership and 70
60
Ratification of 35
50
40
Copyrights
International Treaties 30
30 27.61
20
10 25 23.00
20
15.39
15
Enforcement 10
Trademarks
5
0
Poland Median Regional
Poland Trade Secrets and Market Access Index Score Average
Top 5 Economies’ Average Score
[ www.uschamber.com/ipindex 81 ]
Spotlight on the National IP Environment
Past Editions versus Current Scores Trade Secrets and Market Access
Poland’s overall score has increased from 63% of the total 22. Protection of trade secrets: Trade secrets are protected in
possible score (with a score of 18.75 out of 30) in the fourth Poland through the Unfair Competition Law as well as labor
edition of the Index to 66% (23.00 out of 35) in the fifth edition. law regulations. Remedies for trade secret infringement
This increase in score reflects relatively strong frameworks, include both civil and criminal liability, but court procedures
including at the EU level, in relation to the new indicators added are reportedly long and tend to adjudicate the lowest
in the fifth edition, particularly the areas of patent opposition, penalties available. Also, under Polish law, employers
industrial design protection, and customs transparency and cannot impose nondisclosure clauses to exiting employees.
reporting on trade-related IP infringement. In addition, Poland’s Transposition of the EU Trade Secret Directive (in force since
score for indicator 9 rose slightly due to the extension of the July 2016) into Polish law would introduce a proper trade
term of copyright protection for audiovisual performances to secret definition, second liability claims, and protection of
70 years (up from 50 years). confidentiality during legal procedures.
[ 82 www.uschamber.com/ipindex ]
RUSSIA Rank: 23/45
Patents
100
90
80 Percentage of Overall Score
Membership and 70
60
Ratification of 35
50
40
Copyrights
International Treaties 30
30 27.61
20
10 25
20
15.53 15.39
15
Enforcement 10
Trademarks
5
0
Russia Median Regional
Russia Trade Secrets and Market Access Index Score Average
Top 5 Economies’ Average Score
[ www.uschamber.com/ipindex 83 ]
Spotlight on the National IP Environment
Past Editions versus Current Scores in Russia. Continued uncertainty over the availability of an
effective RDP term in Russia will lead to a reduction in score
Russia’s overall score has increased slightly from 43.5% (13.06
for this indicator to 0.
out of 30) in the fourth edition to 44.4% (15.53 out of 35) in
the fifth edition. This change in score reflects a relatively strong
performance on the 5 new indicators added in the fifth edition. Trade Secrets and Market Access
However, continued deterioration in the localization environment 23. Barriers to market access: As noted in previous editions of
decreased Russia’s score on indicator 23. the Index, the Russian government has targeted innovation
as a main impetus behind diversifying and modernizing its
Patents, Related Rights, and Limitations economy. This includes a number of strategies and initiatives
from Vision 2020 to the latest “National Technology
7. Regulatory data protection (RDP) term: Under its WTO
Initiative” and goals of Russian leadership in innovation
commitments and the 2010 Law of Medicines, Russia has
and high-tech industries by 2035. A uniting theme of
committed to implementing an RDP term of six years. This
these efforts has been a focus on localization. A number of
positive step has significantly strengthened the existing
industries and sectors have been targeted with requirements
framework and protection mechanisms for pharmaceutical
and preferences for local production and manufacturing.
innovation. However, as noted in previous editions of the
As noted in past editions, biopharmaceuticals and medical
Index, a lack of progress remains in implementing this
devices are two high-tech sectors that have been targeted.
commitment and developing a fully functioning form of
In 2010, the government passed Federal Law 61-FZ on
RDP. Specifically, rights holders have faced uncertainty in
the Circulation of Medicines stipulating that clinical trials
the interpretation of the existing legal framework by the
for innovative and generic medicines (bioequivalence
judiciary as well as from legislative changes that took effect
studies) must be conducted in Russia if the product is to
in 2016. A long-running and pivotal court case between
be submitted for registration. These policies intensified
a local generic manufacturer (BioIntegrator) and Novartis
in 2016. For example, in November 2015, the Russian
has added to the uncertainty. Novartis initially lost its case
government adopted Resolution No. 1289 “On Restrictions
of exclusivity infringement in spring 2015. However, this
and Conditions of Access of Foreign Essential Medicines
decision was reversed later in the year by an arbitration
to State and Municipal Tenders,” which introduced a direct
court that held that BioIntegrator did in fact infringe
import ban within the procurement system. Access to state
Novartis’ exclusivity, specifically its submitted clinical
purchases of imported medicines are allowed when (at the
research data as part of its original market authorization
time supplies are requested) at least two generics produced
application. In yet another court decision in December
within the Eurasian Economic Union (EEU) are available
2015, the relatively newly established IP Court in Moscow
for a given product. Foreign manufacturers will be able to
partially revised this judgment. The court upheld the
participate in a public tender in cases only where fewer than
reasoning by the arbitration court that Novartis was
two bids from EEU manufacturers have been submitted.
entitled to protection for its submitted clinical research
In addition, Decree 1125/2015 made the National
data. However, the court also argued that not all data were
Immunobiological Holding Company (owned by state
statutorily protected. Specifically, the court ruled that data
Corporation Rostech) the sole provider of immunobiological
that had been published in specialized journals and were
products for state needs for the period 2015–17. For the
viewed as being in the public domain were not protected.
second consecutive year, this overall deterioration of the
Such an interpretation is inconsistent with established
localization environment in Russia decreased the score for
international principles of data protection and trade secrets.
this indicator.
As such, this judgment creates further uncertainty for
what is already a challenging situation for rights holders
in Russia. Furthermore, legislative amendments to the
Law of Medicines that regulate the time period for the
submission of follow-on product applications took effect
in 2016. These amendments allow follow-on applicants to
submit their applications for market approval four years
after market approval for small-molecule products and
three years for biologic (large-molecule) products. Given
the existing uncertainties in the Russian market with respect
to the approval of follow-on products within a current term
of exclusivity, a clear risk exists that these amendments will
further undermine the practical availability of RDP protection
[ 84 www.uschamber.com/ipindex ]
SAUDI ARABIA Rank: 21/45
Patents
100
90
80 Percentage of Overall Score
Membership and 70
60
Ratification of 35
50
40
Copyrights
International Treaties 30
30
20
10 25
20 15.98 15.39
15 13.73
Enforcement 10
Trademarks
5
0
Saudi Median Regional
Saudi Arabia Trade Secrets and Market Access Arabia Index Score Average
Top 5 Economies’ Average Score
[ www.uschamber.com/ipindex 85 ]
Spotlight on the National IP Environment
Patents, Related Rights, and Limitations public guidelines are in place. Physical and online piracy
remains a significant challenge to rights holders in Saudi
4. Pharmaceutical-related patent enforcement and
Arabia. Industry reports suggest that 90% of music and film
resolution mechanism: Saudi Arabia introduced a patent
content in Saudi Arabia is pirated. And the estimated rate of
linkage system in 2013. Under Circular Letter No. 7448,
software piracy by the Business Software Alliance for 2015
the Saudi Food and Drug Authority requires follow-on
was 49%, a marginal change from the 2009 estimated rate
generic applicants to submit a letter from the Saudi Patent
of 51%.
Office and/or the Gulf Cooperation Council Patent Office
indicating that no registered patent exclusivity is or will be
in place for the relevant reference product at the time of Enforcement
marketing approval. This positive initiative greatly reduces 30. Effective border measures; and 31. Transparency and
the risk that follow-on biopharmaceutical products will be public reporting by customs authorities of trade-related
infringing a reference product’s exclusivity period. IP infringement: Ministerial Decision No. 1277, 2004
provides border measures relating to the infringement of
7. Regulatory data protection (RDP) term: The 2005 Minister IP rights. Article 2 provides customs officers with an ex
of Commerce and Industry’s decision No. 3218 “Regulations officio authority: “The Customs Authorities may suspend
for the Protection of Confidential Commercial Information” the clearance of goods suspected of bearing imitated
provides specific protection for submitted clinical research trademarks upon having prima facie evidence to this effect.”
data as part of a biopharmaceutical market registration It is not clear the extent to which this provision applies to
application. Article 5 of the regulations provides a clear goods in transit. Since 2009, Saudi customs authorities have
and unambiguous protection term of five years from the published annual reports. These reports include statistics
date of approval and states that relevant Saudi authorities on customs seizures of counterfeit goods. They do not,
“shall undertake to protect such information against unfair however, include data on countries of origin.
commercial use, for a minimum period of five years from the
date of obtaining the approval.” The existence of this RDP is
a positive feature of Saudi Arabia’s national IP environment.
Membership and Ratification of International
However, uncertainty exists over the actual availability of this
Treaties
protection as industry reports have suggested that follow-on Saudi Arabia scores low in its participation in and ratification of
products have been approved through the use of “indirect international treaties because it is not a contracting party to any
reliance” on submitted clinical research data. International of the IP treaties included in the Index apart from the Patent Law
standards and best practices for RDP are quite clear on this Treaty, to which it acceded in 2013.
subject: neither direct nor indirect reliance on submitted
clinical test data should be used to approve follow-on
products within the specified and offered term of protection.
Should reports of this practice persist, Saudi Arabia’s score
on this indicator will be reduced to 0.
[ 86 www.uschamber.com/ipindex ]
SINGAPORE Rank: 8/45
Patents
100
90
80 Percentage of Overall Score
Membership and 70
60
Ratification of 35
50
40
Copyrights
International Treaties 30
30 28.62
20
10 25
20 17.64
15.39
15
Enforcement 10
Trademarks
5
0
Singapore Median Regional
Singapore Trade Secrets and Market Access Index Score Average
Top 5 Economies’ Average Score
[ www.uschamber.com/ipindex 87 ]
Spotlight on the National IP Environment
Past Editions versus Current Scores Others aim to simplify and modernize Singapore’s copyright
law. At the time of research, no final proposed legislation
Singapore’s overall score has decreased from 85% (25.63 out
had been presented to the Parliament of Singapore.
of 30) in the fourth edition to 82% (28.62 out of 35) in the
fifth edition. This decrease in score reflects a relatively mixed
performance in the 5 new indicators added in the fifth edition. Trademarks, Related Rights, and Limitations
For example, Singapore customs authorities do not publish 16. Discrimination/restrictions on the use of brands in
annual or systematic statistics on seizures of IP-infringing goods. the packaging of different products: In early 2016, the
Annual enforcement statistics are published only for offenses Parliament of Singapore passed a set of amendments to
and enforcement activities related to cigarettes, alcohol, and the Tobacco (Control of Advertisements and Sale) Act.
fuel gauge noncompliance. Only intermittent press releases on These amendments largely mirror proposals put forth
IP-related enforcement activities are published. in a consultation document by the Ministry of Health in
2015, including enhanced restrictions on point-of-sale
Copyrights, Related Rights, and Limitations advertising and a ban on “emerging tobacco products.”
The amendments are set to come into force in the second
10. Legal measures that provide necessary exclusive rights
half of 2017 and regulations and guidelines are currently
preventing infringement of copyrights and related rights
being finalized by relevant government agencies. Prior
(including Web hosting, streaming, and linking); and 11.
to the public consultation in 2015, the Ministry of Health
Availability of frameworks that promote cooperative
had discussed the possibility of including proposals for
action against online piracy: As noted in previous editions
standardized or plain packaging. The introduction of
of the Index, in 2014 Singapore passed amendments
such packaging for tobacco products in Singapore would
to its Copyright Act that strengthened rights holders’
significantly restrict the use of brands, trademarks, and
recourse mechanisms against online piracy. For many years,
trade dress on the retail packaging of tobacco products
Singapore has faced the challenge of relatively high levels
and severely limit the ability of trademark owners to exploit
of illegal downloading. The amendments to the Copyright
their rights. It would also decrease Singapore’s score on this
Act provide rights holders with an avenue to apply directly
indicator from 1 to 0.
to the High Court for an injunction “requiring the network
service provider to take reasonable steps to disable access
to the flagrantly infringing online location.” In February
2016, the High Court issued its first order under these
amendments, ordering all of Singapore’s major ISPs to block
the piracy website Solarmovie.ph. The application to block
the website was made by the industry association Motion
Picture Association of America and its member companies.
Local legal analysis suggests that the relatively short time
span of two months from application to the High Court to
the actual issuing of the order presents what could be a
practical and workable mechanism to reduce the availability
of pirated content in Singapore.
[ 88 www.uschamber.com/ipindex ]
SOUTH AFRICA Rank: 33/45
Patents
100
90
80 Percentage of Overall Score
Membership and 70
60
Ratification of 35
50
40
Copyrights
International Treaties 30
30
20
10 25
20
15.39
15 12.70 13.73
Enforcement 10
Trademarks
5
0
South Africa Median Regional
South Africa Trade Secrets and Market Access Index Score Average
Top 5 Economies’ Average Score
[ www.uschamber.com/ipindex 89 ]
Spotlight on the National IP Environment
Past Editions versus Current Scores the High Court of South Africa finally made its judgment in
the long-running court case between Moneyweb and Fin24
South Africa’s overall score has decreased from 39% (11.74
(two news websites) in May 2016. Of particular significance,
out of 30) in the fourth edition to 36% (12.70 out of 35) in the
the court’s detailed outline of applicable criteria help define
fifth edition. This decrease in score reflects a relatively mixed
the meaning of fair dealing and relevant exceptions and
performance on the 5 new indicators added in the fifth edition.
limitations contained in the current Copyright Act. Although
For example, South African customs authorities do not publish
this judgment does not represent a sea change in South
annual or systematic statistics on seizures of IP-infringing goods.
Africa’s copyright environment—as detailed in previous
This drop in score is also the result of the increased policy focus
editions of the Index, numerous gaps in copyright law still
on localization and local content requirements.
exist and significant challenges persist with regard to both
digital and physical piracy—it nevertheless provides an
General Comments important clarification to what had, up until now, been an
In July 2016, the Department of Trade and Industry (DTI) released area of copyright in which the case law was very sparse.
the document “Intellectual Property Consultative Framework.”
This is not a legislative document or an overview of proposed
Trade Secrets and Market Access
policy reforms. Rather, the stated purpose of the framework is
“not to prescribe South Africa’s IP policy position, but to put 23. Barriers to market access: As mentioned in previous
forward the perspective of the DTI in a consultative instrument to editions of the Index, the South African government has for
facilitate what will be continuous engagement with governmental many years focused on developing its domestic economy
partners and society at large.” The framework comes on the through a range of localization policies. These policies
back of a long-standing debate in South Africa over IP rights and are both general as well as industry and sector specific.
a number of legislative reform efforts over the past few years For example, South Africa has long-standing local content
including a now withdrawn draft patent bill. It is a positive step requirements for certain sectors including broadcasting.
that the government of South Africa recognizes the need for Within public procurement, significant local content
reform to its national IP environment and the value of consulting requirements have been in place since 2011 for a host
all stakeholders in that process. Unfortunately, this framework of specially designated sectors ranging from automotive
document focuses rather solely on one type of IP right, patents, (buses), set-top boxes, clothing, and furniture. Local
and mainly on one high-tech sector, biopharmaceuticals. Like content requirements range from 10% to 100%, depending
the Ministry of Science and Technology’s 2014 flagship policy on the industry. More generally, the National Industrial
document for the biotechnology sectors, The Bio-Economy Participation Programme (NIP) has been in place since the
Strategy, the framework focuses on ways in which South Africa late 2000s. The NIP requires that foreign suppliers awarded
could better access existing and developed forms of IP including government contracts within a month of signing a contract
through the expanded use of compulsory licenses and parallel with the procuring entity also sign an obligation agreement
importation. There is no equivalent discussion on the manner where they commit to local economic activities. The ultimate
in which IP can be created, be commercialized, and become purpose of the NIP is to build local capacity and partnering
an industrial asset. For economies—emerging and developed between local South African companies and international
alike—the creation of new forms of intangible assets and IP industry leaders. In 2016, the government intensified both
are what will drive innovation, technological advances, and, these public procurement policies and the NIP framework, in
ultimately, economic development and growth. IP rights are a particular its localization requirements. For instance, the DTI
critical component of this. in the 2016 Industrial Policy Action Plan 2016-17-2018-19
outlined new policies that strengthen these requirements.
To begin with, the IPAP confirms the government’s
Copyrights, Related Rights, and Limitations objective (first outlined in the 2014 five-year plan Medium
12. Scope of limitations and exceptions to copyrights and Term Strategic Framework) of achieving a level of 75%
related rights: As mentioned in previous editions of the local procurement. Specifically, the DTI is strengthening
Index, South Africa is currently reforming its copyright law. cross-governmental enforcement activities and ensuring
Draft Copyright Act amendments were published in 2015 greater compliance and application of these localization
and made open to public consultations. These amendments requirements. The IPAP also, both more broadly and in the
contain numerous positive provisions relating to DRMs and sectoral focus-area discussions, places a heavy emphasis on
TPMs corresponding with those already contained in chapter the transfer of technologies from international rights holders
12 of the Electronic Communications and Transactions Act. to local companies. Conditioning market access and access
In addition, the proposed amendments also introduce a to opportunities for public procurement on local partnering
system of “fair use” exceptions to copyright. At the time requirements and the sharing or divulging of proprietary
of research, no final bill had been presented to the South technologies with local partners present significant barriers
African Parliament. However, in a separate development, to trade and impediment to investment.
[ 90 www.uschamber.com/ipindex ]
SOUTH KOREA Rank: 9/45
100
Patents
90
80 Percentage of Overall Score
Membership and 70
60
Ratification of 35
50
40
Copyrights
International Treaties 30
30 28.31
20
10 25
20 17.64
15.39
15
Enforcement 10
Trademarks
5
0
South Korea Median Regional
South Korea Trade Secrets and Market Access Index Score Average
Top 5 Economies’ Average Score
[ www.uschamber.com/ipindex 91 ]
Spotlight on the National IP Environment
Past Editions versus Current Scores the protection of trademarks used in online settings by
explicitly recognizing electronic use as a statutory use
South Korea’s overall score has increased from 78% of the
of trademarks.
total possible score (with a score of 23.32 out of 30) in the
fourth edition of the Index to 81% (28.31 out of 35) in the fifth
edition. This increase in score is partly due to South Korea’s Trade Secrets and Market Access
accession to the Singapore Treaty on the Law of Trademarks and 24. Regulatory and administrative barriers to the
improvements in relation to indicator 2 on the patenting system commercialization of IP assets: In March 2016, the Korean
and indicator 14 on the use of licensed software in government Free Trade Commission issued a revised version of the
agencies. South Korea displays mixed scores in relation to the “Guidelines on the Unfair Exercise of IP Rights.” The previous
new indicators in the fifth edition; for instance, it has a relatively version was criticized for overregulating licensing and unduly
strong industrial design protection but faces gaps in customs limiting patent rights by considering de facto essential
reporting on IP infringement. patents as SEPs without any involvement or consent from
the owner, and for establishing ambiguous requirements
Patents, Related Rights, and Limitations and conditions under which such SEPs must be licensed
to interested parties. The new text provides a narrower
2. Patentability requirements: Patent amendments
definition of SEPs that does not include de facto standards,
that entered into force in 2016 streamlined the patent
which are to be reviewed separately. It also restricts the
application system overall, shortening the time frame for
definition of unfair refusal to license, limited to actions that
filing a request for examination from five to three years,
constitute a clear barrier to manufacturing, supplying, or
which is closer to the time frame in other jurisdictions
selling a given technology and the lack of substitutable
such as the EU. In addition, the Supreme Court upheld
technology. Hence, overall “abuse of licensing” is now
the patentability of second medical use claims in its 2016
viewed as exceptional and is limited significantly.
decision regarding a patent on the drug Lyrica. The case
also clarified patent law in respect to interpreting prior art,
in particular allowing for a more expansive and pragmatic Enforcement
understanding of prior art references and non-obviousness 27. Civil and procedural remedies: Civil Procedure Act
for life sciences inventions, where subject matter is relatively amendments that entered into force in January 2016
less predictable compared to other fields. centralized jurisdiction of IP rights (except for copyright
and trade secrets) both at first instance and at appeal
8. Patent opposition: At present, South Korea does not level. Patent infringement actions can now be filed in five
provide for an explicit patent opposition system; however, specialized district courts and not in any district court, and
inter partes invalidation actions before the IP Tribunal are appeals are addressed in the Patent Court. Consolidation
available following patent registration, with the average of authority in the Patent Court is expected to make
pendency reportedly about 10 months. Patent amendments injunctive relief and damages more clearly available and, as
introduced a new post-grant opposition system in South the Patent Court will rule on appeals to both infringement
Korea that will come into force in 2017 and is expected to and invalidity, preclude fragmentation when both types
help promote high-quality patents, streamline the system of proceedings run concurrently. Patent amendments also
further, and reduce costs and uncertainty. Under the new enhanced the availability of civil relief, shifting the burden
system, any person will be able to request the cancellation of proof in patent infringement litigation and damages
of a patent with the KIPTAB (Korean Intellectual Property assessment to the alleged infringer.
Trial and Appeal Board) within six months from grant of the
patent. Grounds will be restricted to prior art grounds and
an appeal will be available only to the patentee.
[ 92 www.uschamber.com/ipindex ]
SPAIN Rank: 11/45
Patents
100
90
80 Percentage of Overall Score
Membership and 70
60
Ratification of 35
50
40
Copyrights
International Treaties 30
30 27.48 27.61
20
10 25
20
15.39
15
Enforcement 10
Trademarks
5
0
Spain Median Regional
Spain Trade Secrets and Market Access Index Score Average
Top 5 Economies’ Average Score
[ www.uschamber.com/ipindex 93 ]
Spotlight on the National IP Environment
Patents, Related Rights, and Limitations lower rate of response (as low as 10% in 2015). In addition,
extreme delays reportedly exist within the IP Commission,
2. Patentability requirements: Spain’s patent law provides
with notices taking by some estimates over one year to
for standard patentability criteria of novelty, inventive step,
reach resolution.
and industrial application and is considered to be fairly pro-
technology in terms of the ability to patent biotechnology,
life sciences, and computer-related inventions, although Trademarks, Related Rights, and Limitations
some exceptions exist. In relation to life sciences inventions, 18. Legal measures available that provide necessary
patent amendments adopted in 2015 that will enter exclusive rights to redress unauthorized uses of
into force in 2017 fill in legislative gaps concerning the trademarks: Spain provides many standard legal measures
ability to patent new therapeutic applications for already to protect against infringement of trademarks that are
known substances and compositions. More generally, the enforceable through the commercial and criminal courts.
majority of patents in Spain are currently reviewed under Currently, invalidation proceedings are not available before
an abbreviated procedure where substantive examination the Spanish patent office. But under the new EU trademark
is optional, resulting in a relatively large volume of weak directive, Spain is required to put in place by 2023 an
patents and a high rate of invalidations and additional administrative procedure for opposition and invalidity
costs. Recognizing these barriers, under the new patent proceedings. Counterfeiting is a significant problem in
amendments formal substantive examination will be Spain: according to EUIPO data, Spain ranks fifth in the EU
required and a post-grant opposition system for national- for the intentional purchasing of counterfeits and is one of
level filings will be introduced. the top five economies in terms of economic impact from
fake or illicit alcohol, sports items, cosmetics, clothing,
Copyrights, Related Rights, and Limitations and toys.
[ 94 www.uschamber.com/ipindex ]
SWEDEN Rank: 5/45
100
Patents
90
80 Percentage of Overall Score
Membership and 70
60
Ratification of 35
50
40
Copyrights 30.99
International Treaties 30
30 27.61
20
10 25
20
15.39
15
Enforcement 10
Trademarks
5
0
Sweden Median Regional
Sweden Trade Secrets and Market Access Index Score Average
Top 5 Economies’ Average Score
[ www.uschamber.com/ipindex 95 ]
Spotlight on the National IP Environment
Past Editions versus Current Scores that plain packaging would affect the rights provided
under the Swedish Freedom of the Press Regulation. In
Sweden’s overall score has decreased from 90.4% (27.12 out
October 2015, a judge concluded that introducing plain
of 30) in the fourth edition to 88.5% (30.99 out of 35) in the
packaging would require a constitutional change, as
fifth edition. Although this score reflects a strong performance
tobacco packaging is regarded as printed text and, as
in the 5 new indicators added in the fifth edition, the negative
such, is protected by freedom of the press rules. Following
developments in the availability of recourse mechanisms for
these public pronouncements, in September 2016 the
copyright infringement online have decreased Sweden’s score.
Parliamentary Media Constitution Committee did not
table a relevant amendment to the Freedom of the Press
Copyrights, Related Rights, and Limitations Act, believing it lacked the proper mandate to modify the
10. Legal measures that provide necessary exclusive rights Constitution. According to the procedure described by
preventing infringement of copyrights and related the committee, such constitutional change would need to
rights (including Web hosting, streaming, and linking); be approved twice under two different legislative terms,
and 11. Availability of frameworks that promote and could thus be introduced at the earliest in 2019. The
cooperative action against online piracy: Antipiracy introduction of plain or standardized packaging would
efforts have been further weakened in the country following significantly restrict the use of brands, trademarks, and
a landmark court decision establishing that ISPs have trade dress on retail packaging, undermining the benefits
no obligation to block access to pirate websites unless of trademarks to businesses and consumers alike, and
they provide “direct assistance” to the primary infringers. setting a negative precedent for IP policy. The passage
On this basis, the Stockholm District Court refused an of such legislation would decrease Sweden’s score on this
injunction against an ISP (Bredbandbolaget) to block access indicator from 1 to 0.
to two torrent sites. As outlined in previous editions of the
Index, the lawsuit was brought against Bredbandbolaget in Enforcement
2014 by the entertainment industry, seeking a court order
27. Civil and procedural remedies: A welcome development
to force the ISP to block its subscribers from accessing
is the launch of a new IP specialized court—the Patent
the Pirate Bay file sharing website and the Swefilmer
and Market Court—that will grant final decisions on all IP
streaming service (the latter of which was closed down in
litigation (further appeals to the Swedish Supreme Court
July 2015). The court’s decision was based on an evaluation
can be allowed only under exceptional circumstances). The
of Sweden’s implementation of the EU’s InfoSoc Directive
judicial reform is expected to further increase the quality
(Article 8.3) and on the complicity concept within the Penal
and predictability of IP decisions in Sweden as well as
Code (Article 53b). Notably, the court provided for a narrow
shorten the time and costs of proceedings. One of the most
scope of protection for Swedish rights holders under the
awaited decisions the court will have to handle is the appeal
terms of Article 8(3) of the InfoSoc Directive, according to
in the above-mentioned Bredbandbolaget case.
which EU member states shall make available injunctions
against intermediaries used by third parties to infringe IP
rights. The court concluded that, although Swedish law is
phrased in a more restrictive way than the EU Directive, it
still complies with it given that the possibility of injunction
is not illusory. By in effect removing virtually any copyright
infringement responsibility from ISPs, this judgment
severely restricts the means by which copyright holders can
enforce their rights online. As a result, Sweden’s score has
declined on this indicator.
[ 96 www.uschamber.com/ipindex ]
SWITZERLAND Rank: 7/45
Patents
100
90
80 Percentage of Overall Score
Membership and 70
60
Ratification of 35
50
40
Copyrights 29.86
International Treaties 30
30 27.61
20
10 25
20
15.39
15
Enforcement 10
Trademarks
5
0
Switzerland Median Regional
Switzerland Trade Secrets and Market Access Index Score Average
Top 5 Economies’ Average Score
[ www.uschamber.com/ipindex 97 ]
Spotlight on the National IP Environment
Past Editions versus Current Scores not react quickly to limit damages that infringers cause. The
latest draft text also adds additional hurdles. For instance,
Switzerland’s overall score has increased from 83% (24.90 out
in the current text, rights holders should reimburse ISPs
of 30) in the fourth edition to 85% (29.86 out of 35) in the fifth
the cost of their interventions. It also mentions that rights
edition. This increase in score reflects a strong performance in
holders can ask the IP Office to block access to infringing
the 5 new indicators added in the fifth edition.
content, but both ISPs and content owners can suspend
the measures by appealing without having to prove the
Patents, Related Rights, and Limitations content’s legality (Article 66(d)). The draft amendments do
8. Patent opposition: Since 2008, Switzerland has in place not effectively address the issue of private use exceptions
a patent opposition system that, similar to the European (Articles 19 and 43). As a result of its lack of progress on
Patent Office (EPO), is available to any third party for nine providing strong enforcement mechanisms to rights holders,
months after the patent is granted. The Swiss Patent Federal Switzerland was added to the USTR’s 2016 Special 301
Court has streamlined procedures that ensure a relatively Report and listed as a “Priority Watch List” country.
quick and efficient process. Oppositions are allowed on
the basis of non-patentable inventions per Articles 1(a) and
1(b) of the Swiss Patent Statute (the human body and its
elements and sequences of genes), as well as inventions
whose application would be contrary to public morality. The
Patent Office can decide to revoke or uphold the patent
fully or partially.
[ 98 www.uschamber.com/ipindex ]
TAIWAN Rank: 18/45
Patents
100
90
80 Percentage of Overall Score
Membership and 70
60
Ratification of 35
50
40
Copyrights
International Treaties 30
30
20
10 25
20.59
20 17.64
15.39
15
Enforcement 10
Trademarks
5
0
Taiwan Median Regional
Taiwan Trade Secrets and Market Access Index Score Average
Top 5 Economies’ Average Score
[ www.uschamber.com/ipindex 99 ]
Spotlight on the National IP Environment
Past Editions versus Current Scores Copyrights, Related Rights, and Limitations
Taiwan’s overall score has increased from 49% of the total 10. Legal measures that provide necessary exclusive rights
possible score (with a score of 14.79 out of 30) in the fourth preventing infringement of copyrights and related
edition to 59% (20.59 out of 35) in the fifth edition. This increase rights (including Web hosting, streaming, and linking):
reflects enhancements to the patent review system (indicator 2) Although a comprehensive copyright reform is still under
and a fairly strong performance on many of the new indicators review by the government, amendments submitted to the
added in the fifth edition, including ability to commercialize Legislative Yuan in 2016 take some steps to extend the
IP assets and customs transparency. Taiwan’s score also rose scope of copyright protection, for instance by criminalizing
in the fifth edition due to a change in the system for scoring circumvention of TPMs, adding protection for encrypted
Taiwan on its membership in international treaties. Taking into program-carrying satellite and cable signals, and allowing
consideration political hurdles to its becoming a contracting for some crimes to be charged without a complaint.
party to WIPO-administered treaties included in the Index, However, the amendments fall short of tackling other,
Taiwan is now scored based on implementation of core elements fundamental gaps in the online copyright sphere and
of those treaties, a number of which are present in its legislation. of fully aligning with international standards in areas
such as camcording and foreign-hosted sites, among
other elements.
Patents, Related Rights, and Limitations
2. Patentability requirements: In the context of an
accelerated examination program and PPHs with the U.S.,
Japan, and, since 2015, South Korea, average patent review
time shrank to less than 24 months in late 2015/2016,
from over 47 months in 2012. The average review time
of applications filed under the above-mentioned PPHs
was about 135 days in 2016 (as of the time of research).
In addition, in 2016, Taiwan reviewed its main IP laws,
reportedly ahead of a potential TPP accession. Proposed
amendments to the Patent Act under review by the
Legislative Yuan would further strengthen the already pro-
technology patenting framework by extending the grace
period for filing a patent to 12 months.
[ 100 www.uschamber.com/ipindex ]
THAILAND Rank: 40/45
Patents
100
90
80 Percentage of Overall Score
Membership and 70
60
Ratification of 35
50
40
Copyrights
International Treaties 30
30
20
10 25
20 17.64
15.39
15
9.53
Enforcement 10
Trademarks
5
0
Thailand Median Regional
Thailand Trade Secrets and Market Access Index Score Average
Top 5 Economies’ Average Score
[ www.uschamber.com/ipindex 101 ]
Spotlight on the National IP Environment
Past Editions versus Current Scores and trade dress on retail packaging, undermining the
benefits of trademarks to businesses and consumers alike,
Thailand’s overall score has increased from 25% of the total
and setting a negative precedent for IP policy.
possible score in the fourth edition (with a score of 7.40 out
of 30) to 27% (9.53 out of 35) in the fifth edition. This result
18. Legal measures available that provide necessary
reflects some strengths in the new indicators added in the fifth
exclusive rights to redress unauthorized uses of
edition, including indicator 31 on custom transparency, and an
trademarks: In 2016, Thailand enacted amendments to
improvement in indicator 30 on border measures combating
the Trademark Act aimed at bringing its provisions in line
counterfeiting and physical piracy.
with the Madrid Protocol, of which the country is seeking
to become a member. The amendments clarify some
Patents, Related Rights, and Limitations procedural aspects and potentially shorten prosecution
2. Patentability requirements; and 8. Patent opposition: time by reducing the time period for responding to DIP
The Department of Intellectual Property (DIP) continues actions and oppositions. In addition, they broaden the
to face long backlogs, estimated at 38,500 for patents as scope of protection by allowing multiple-class filing and
of mid-2016. It takes on average 5 to 9 years for a patent registration of sound marks, as well as by extending the
to be granted, particularly for life sciences inventions and search of similar and identical trademarks to all classes (at
patents submitted through the PCT route. Against this present, it is limited to the one where the application was
backdrop, proposed patent amendments would replace the filed). Importantly, the amendments also criminalize refilling
pre-grant opposition system with a time-limited post-grant (that is, passing off unauthorized content as legitimate using
system, and would shorten the time to request substantive original, branded packaging).
examination from 5 to 3 years. A Board of Invalidation would
be set up within DIP to manage post-grant opposition Enforcement
procedures. As an additional measure aimed at reducing the
27. Civil and procedural remedies: In 2016, a new Specialized
patent backlog, DIP also unveiled plans to triple the number
Appeals Court was established in Thailand in an effort to
of examiners, currently at only about 40. Nevertheless,
reduce the backlog and strengthen civil proceedings in
the proposed amendments do not address key challenges
lower courts. Nevertheless, other barriers to securing relief
about patentability criteria, notably in relation to life
through the civil system remain unaddressed, such as the
sciences patents.
limited availability of damages, with the result that civil
cases are rarely pursued by IP rights holders.
Copyrights, Related Rights, and Limitations
14. Clear implementation of policies and guidelines requiring 30. Effective border measures: A potential loophole exists in
that any proprietary software used on government ICT relation to in-transit actions introduced in custom legislation
systems should be licensed software: In late 2015, the in 2015 that could limit the inclusion of IP within the remit of
Thai Securities and Exchange Commission was reportedly illegal goods because the transshipment of infringing goods
the first ASEAN public body to implement software asset is not expressly prohibited in IP law (only importation is).
management practices. While positive, this remains an However, positively, available preliminary evidence suggests
isolated example in a context of general high rates of that customs officials are interpreting the new provision to
unlicensed software. include counterfeit goods. On this basis, Thailand’s score for
this indicator increased by 0.25.
[ 102 www.uschamber.com/ipindex ]
TURKEY Rank: 22/45
Patents
100
90
80 Percentage of Overall Score
Membership and 70
60
Ratification of 35
50
40
Copyrights
International Treaties 30
30 27.61
20
10 25
20
15.80 15.39
15
Enforcement 10
Trademarks
5
0
Turkey Median Regional
Turkey Trade Secrets and Market Access Index Score Average
Top 5 Economies’ Average Score
[ www.uschamber.com/ipindex 103 ]
Spotlight on the National IP Environment
Past Editions versus Current Scores Trademarks, Related Rights, and Limitations
Turkey’s overall score has increased from 40% of the total 16. Discrimination/restrictions on the use of brands in the
possible score (with a score of 11.87 out of 30) in the fourth packaging of different products: In 2012, the Turkish
edition of the Index to 45% (15.80 out of 35) in the fifth edition. Parliament approved amendments to the Law on the
This increase in score is mainly a result of a relatively strong Prevention and Control of Hazards of Tobacco Products
performance on some of the new indicators added in the (Law 4207), which banned the use of brands, signs, and
fifth edition, including in relation to the term of industrial other promotional elements on packages and labels on
design protection and customs reporting on trade-related tobacco products. Implementing regulations under the
IP infringement. National Tobacco Control Program Action Plan 2015–18,
which, among other elements, would have introduced
“black packaging” (black cigarette boxes without brands or
Patents, Related Rights, and Limitations
logos), were considered in 2016. However, prior to approval,
2. Patentability requirements: In 2016, draft legislation that the plain packaging measures were removed from the
consolidates all IP Decree-Laws into a unified IP Code was draft regulation, reportedly on the basis that the measures
under consideration in the Turkish Parliament. Overall, the would conflict with trade laws. As a result, Turkey’s score
text seeks to clarify certain elements (such as the defendant increases to 1 for this indicator in the fifth edition of the
bearing the burden of proof in patent proceedings) and to Index. Nevertheless, given that new Health Minister Akdag
harmonize the IP legal framework to international standards, has indicated he may reconsider the introduction of plain
such as the European Patent Convention (EPC) provisions. packaging regulations, developments in this area may affect
However, important divergences from EU standards remain Turkey’s score for indicator 16 in future editions of the Index.
with regard to life sciences inventions, including inadequate
clarity on the ability to patent second medical uses and 18. Legal measures available that provide necessary
biotechnologies, that result in a narrow interpretation by exclusive rights to redress unauthorized uses of
some IP Courts. In 2016, the Istanbul IP Court refused trademarks: The draft IP Code would address some of the
to follow a landmark decision by the Court of Appeal legislative gray areas in trademark protection and increase
upholding the patentability of second use patents. guarantees that confusingly similar trademarks will not be
registered, for instance by explicitly protecting unregistered
8. Patent opposition: The draft IP amendments also seek to well-known marks and providing legal ground for nonuse
align with the EU by introducing a post-grant opposition defense in trademark opposition. It will also extend the
system, replacing the current pre-grant system, but the scope of infringement to include acts such as possessing or
new system does not fully close loopholes and hurdles warehousing counterfeits. However, the reform only partially
in the existing patent adjudication system, leading to tackles the main concerns of rights holders with regard
remaining uncertainty for patent holders. Under Decree to inconsistent and weak judicial enforcement, including
551, patents can be invalidated by courts, a setting where difficulty obtaining warrants, varying standards for evidence
patent holders have little recourse and no way to amend collection, inconsistent remedies, and rare application of
patent applications, even when opposition proceedings criminal charges.
are ongoing at the EPO. Consequently, a high number of
patent invalidations or partial invalidations in Turkey may 20. Industrial design term of protection; and 21. Legal
conflict with EPO decisions. The draft IP Code does not measures available that provide necessary exclusive
fully address the inability to amend claims after grant within rights to redress the unauthorized use of industrial
the new post-grant opposition system, and may thus be design rights: Turkish law currently includes a 25-year total
inadequate to curb the rate of invalidations. The timelines term of design protection, in line with the EU. However,
are tight for amending a claim within the scope of an Turkey is not aligned with the EU in other areas, such as
opposition (six months, compared to nine months before in relation to the protection of unregistered designs. The
the EPO). In addition, national invalidation proceedings will ongoing IP revamp would better align design provisions to
not necessarily be stayed if an ongoing opposition is taking the EU framework by granting a 3-year term of protection
place at the EU level (thus limiting the ability to amend specifically for unregistered designs. In addition, the reform
claims on European patents). redresses a current legal gap and reimposes criminal liability
on design infringers.
[ 104 www.uschamber.com/ipindex ]
UKRAINE Rank: 30/45
Patents
100
90
80 Percentage of Overall Score
Membership and 70
60
Ratification of 35
50
40
Copyrights
International Treaties 30
30 27.61
20
10 25
20
15.39
14.06
15
Enforcement 10
Trademarks
5
0
Ukraine Median Regional
Ukraine Trade Secrets and Market Access Index Score Average
Top 5 Economies’ Average Score
[ www.uschamber.com/ipindex 105 ]
Spotlight on the National IP Environment
Past Editions versus Current Scores shortcomings of judicial and customs measures remain
on hold. The draft law “On Amendments to Certain
Ukraine’s overall score has increased slightly from 39% of the
Legislative Acts of Ukraine Concerning the Strengthening
total possible score in the fourth edition (with a score of 11.55
of the Protection of IP Rights,” developed by the Ministry
out of 30) to 40% (14.06 out of 35) in the fifth edition. This
of Economic Development, would raise fines for criminal
increase in score reflects small but positive improvements
IP infringement from USD17,000 to USD255,000, and
in certain areas, including life sciences patent enforcement,
double them to a maximum of UAH6800 (USD260) for
cooperative action against online piracy, fair and balanced
administrative offenses. The bill, along with other draft
exceptions to copyright, and protection of well-known marks.
measures, could also provide judicial authorities with
greater authority over the confiscation and destruction of
General Note infringing goods and the tools used for their production.
Ukraine adopted proposals for revamping the current IP Apart from legislation, in 2016, the recently created Cyber
administrative structure and introducing a more independent Police Department in a joint operation with U.S. and UK
and better-staffed National Agency for IP to replace the State enforcement shut down the second most popular torrent
IP Service. If implemented, the reform would also involve a website worldwide, which was run in Ukraine. In addition,
reorganization of the collective administration system, aimed at the department took down one of the country’s major pirate
replacing the current 19 collective management organizations movie websites. Also in 2016, the National Police signed a
with a single agency, improving transparency and helping to Memorandum of Understanding with the media community
bring the system in line with EU standards. launching a joint antipiracy initiative based on technical
assistance and information exchange.
Copyrights, Related Rights, and Limitations
11. Availability of frameworks that promote cooperative
action against online piracy; and 12. Scope of limitations
and exceptions to copyrights and related rights:
Copyright amendments were adopted in 2016 within the
Law on State Support for Cinematography, Bill 3081d
(although at the time of research, the bill had not yet been
signed into law). The bill notably introduces a notice and
takedown system whereby a rights holder may send a notice
of infringing content to an ISP, which has 48 hours to block
the content. However, the provisions entail a very in-depth
process requiring complex documentation along with rules
that may render the system difficult to use effectively. The
bill also introduces a liability clause safeguarding ISPs
that take down the designated content within 48 hours
of receipt. In addition, the bill partially closes loopholes
regarding camcording and Internet piracy by adding them
to the list of infringements identified in the Copyright Act.
The bill also amends the Criminal Code to criminalize the
act of camcording.
Enforcement
27. Civil and procedural remedies; and 29. Criminal
standards including minimum imprisonment and
minimum fines: In 2016, Ukraine’s Parliament adopted
legislation establishing IP first instance courts by 2017, a
development that could help raise IP expertise among the
judiciary, streamline proceedings, and improve transparency
and accountability. This reform of the judicial system will
also bring about a separate judgment execution process
with private enforcement officials, which might also enhance
opportunities for securing judgments. However, other
draft bills that would tackle some of the major remaining
[ 106 www.uschamber.com/ipindex ]
UNITED ARAB EMIRATES Rank: 24/45
Patents
100
90
80 Percentage of Overall Score
Membership and 70
60
Ratification of 35
50
40
Copyrights
International Treaties 30
30
20
10 25
20
15.24 15.39
15 13.73
Enforcement 10
Trademarks
5
0
United Arab Median Regional
United Arab Emirates Trade Secrets and Market Access Emirates Index Score Average
Top 5 Economies’ Average Score
[ www.uschamber.com/ipindex 107 ]
Spotlight on the National IP Environment
Past Editions versus Current Scores Trademarks, Related Rights, and Limitations
The UAE’s overall score has increased from 41% of the total 17. Ability of trademark owners to protect their trademarks:
possible score (with a score of 12.43 out of 30) in the fourth requisites for protection: In the context of limited case law
edition to 44% (15.24 out of 35) in the fifth edition. This increase and lack of clarity in legislation, a precedent-setting decision
in score mainly results from some improvements to DRM by the Federal Supreme Court upheld well-known mark
legislation and the protection of well-known marks, as well as protection, including for unregistered marks, and provided
moderate performance on some of the new indicators added in greater clarity on requirements for establishing notoriety. In
the fifth edition of the Index. a blatant bad faith case, in which an individual attempted
to register a well-known restaurant trademark, the court
defined famous brands as those used and registered in at
Patents, Related Rights, and Limitations
least three other countries. It also established that prior use
2. Patentability requirements: Following the introduction should be demonstrated through actual commercial activity
of online trademark registration in 2015, in 2016, the such as marketing and distribution in the UAE, and that bad
Ministry of Economy, with support from the Korean IP faith can be a basis of action (despite not being in law) in
Office, launched a trial digital system for processing patents clear cases of an illegitimate mark.
and designs and discussed the creation of a dedicated
Patent Examination Center. The new application process is
expected to shorten delays for examination, which currently Trade Secrets and Market Access
takes five years on average. 23. Barriers to market access; and 24. Regulatory and
administrative barriers to the commercialization of IP
3. Patentability of computer-implemented inventions (CIIs): assets: A draft investment law currently under consideration
Patenting of CIIs may be pursued today in the UAE as long would remove the 49% foreign equity cap in certain sectors
as such inventions are linked to a hardware and drafted as where further investment and technology are needed.
a technical solution to a technical problem, provided that At present, barriers to foreign ownership and licensing
the other criteria for patentability are satisfied. Enhancing hinder efforts to move toward a more knowledge-intensive
the development of ICTs is a significant focus across economy. For instance, individual licensing authorities exist
several pillars of a recent government initiative to promote for each of the over 30 free zones, which can adopt their
innovation and competitiveness in science and technology. own competition rules, and regulations lack an effective
This initiative includes a dedicated focus on enabling the framework for collecting royalties and licensing fees as well
patenting and commercialization of IP assets, including in as (specifically for the music sector) a collection society for
relation to computer-implemented technologies, through, copyright holders.
for instance, a new fund of over USD500 million (Dh2
billion). According to international patenting statistics, today
Enforcement
a relatively large number (about 7%) of patent applications
in the UAE are in computer technology. 27. Civil and procedural remedies: Ministerial Resolution
137/2016 created a specialized judicial department,
intended not as a full-fledged court but as a group of
Copyrights, Related Rights, and Limitations specialized judges, within the UAE Federal Court system
13. Digital rights management (DRM) legislation: Federal to handle IP disputes. Specialized judges will deal with
Law 12/2016 increased penalties in one area of TPM federal issues, such as cancellation acts, but infringement
protection: use of fraudulent computer network protocol and other IP actions will remain within the remit of emirate-
addresses (including virtual private networks, or VPNs) to level courts. The first dedicated IPR Court Circuit was
bypass copyright protection; for instance, by accessing set up in 2016 at the Abu Dhabi Court of First Instance.
content broadcasted abroad and not licensed for the The increased specialization is expected to speed up the
UAE. Penalties now include imprisonment and fines of handling of litigation before the courts and could increase
AED500,000–2,000,000 (about USD135,000–545,000), up the availability of effective civil remedies such as injunctions,
from AED150,000–500,000. which are currently rarely secured.
[ 108 www.uschamber.com/ipindex ]
UNITED KINGDOM Rank: 2/45
100
Patents
90
80 Percentage of Overall Score
Membership and 70
60
Ratification of 35 32.39
50
40
Copyrights
International Treaties 30
30 27.61
20
10 25
20
15.39
15
Enforcement 10
Trademarks
5
0
United Median Regional
United Kingdom Trade Secrets and Market Access Kingdom Index Score Average
Top 5 Economies’ Average Score
[ www.uschamber.com/ipindex 109 ]
Spotlight on the National IP Environment
Past Editions versus Current Scores Infringement Trackers,” published in June 2016, registered
the lowest rate of illegal access since the study started
The UK’s overall score has increased from 91.8% (27.53 out of
in 2011, with 15% of Internet users illegally accessing
30) in the fourth edition to 92.5% (32.39 out of 35) in the fifth
illegal material. Furthermore, as reported in the annual IP
edition. This increase in score reflects a strong performance on
Crime Report (also published by the IPO), more than 100
the 5 new indicators added to the fifth edition.
million URLs were submitted to ISPs for removal of links to
infringing content between January 2015 and March 2016.
General Comments Moreover, during a similar time period, the City of London’s
Despite the uncertainty raised by the results of the June Police Intellectual Property Crime Unit took down 11,000
2016 referendum to leave the EU, the UK remains one of the sites offering counterfeits. The unit has also expanded
highest-rated economies in the Index with a strong national its enforcement activities and implemented a “follow the
IP environment and particular strengths in the enforcement money” approach by launching the Infringing Website List
category. At the time of research, the UK government had that advertisers, agencies, and other intermediaries can
not triggered Article 50 of the Lisbon Treaty that will launch check before deciding where to place their ads. The aim
negotiations on a withdrawal agreement. EU treaties will cease is to reduce advert placement on illegal websites in order
to apply to the UK two years after notification of Article 50, to disrupt and diminish their advertising revenue. Against
expected to happen in early 2017. While it is not expected that this background of existing strong enforcement activity, the
this will affect the level of protection granted under the current Digital Economy Bill introduced in Parliament in July 2016
British IP system, there is currently not a great deal of detail proposed to increase the maximum sentences for online
regarding the administration and legal frameworks that will copyright infringement from 2 to 10 years, to bring remedies
replace current EU-level regulations in the UK. The unfolding of on par with those applying to physical counterfeiting. These
this process over the upcoming years will be closely monitored initiatives together underline the seriousness with which UK
and tracked in the Index. The UK government did confirm in policymakers are treating the piracy phenomenon and the
November 2016 that the UK would ratify the agreement on the positive steps they are taking in trying to tackle it.
Unified Patent Court. This is an important step in the effective
enforcement of patent rights within contracting states. 12. Scope of limitations and exceptions to copyrights and
related rights: In November 2015, the UK government
Copyrights, Related Rights, and Limitations announced it would scrap the private copy exception
that was introduced in 2014 and renounced to table new
10. Legal measures that provide necessary exclusive rights proposals to legalize private copying. The announcement
preventing infringement of copyrights and related rights followed a decision by the Court of Justice of the European
(including Web hosting, streaming, and linking): In May Union in the case of Hewlett Packard Belgium SPRL v.
2016, the British government unveiled plans to step up IP Reprobel SCRL, in which the court offered guidance on
enforcement efforts in its five-year strategic policy paper how national private copying laws should be drafted. It
IP Enforcement 2020. Specifically, the document targets also comes after the London High Court declared the
the reduction of online piracy as a top priority up to 2020. 2014 scheme unlawful for lacking adequate evidential
The current system requires rights holders to monitor basis that the exception would cause only minimal harm to
P2P networks, capture evidence, and send it through to rights holders, as claimed by the government. In 2016, the
their ISP, which will then send an “alert to the subscriber” ECJ continued to provide guidelines on implementation
via IP address tracking. According to the document, the by member states of the “fair compensation” concept
government is reviewing this system to improve and to copyright holders foreseen by the InfoSoc Directive,
streamline the process and is considering the scope for an notably by establishing that it cannot be funded by a
additional mechanism of notice and trackdown that would general state budget (EGEDA case). In separate news,
enable rights holders to take action directly against the the draft Digital Economy Bill would repeal an outdated
identified infringers. While the exact scope of the initiative copyright provision on cable television (section 73 of the
has not been further detailed, the stated overall objective is Copyright, Patent and Design Act), closing the loophole
to enhance protection for rights holders. The strategy also that providers of Internet-based live streaming services
promises to introduce a code of practice for intermediaries used to profit from retransmitting public service broadcast
and to tackle unauthorized streaming from set-top content over the Internet.
boxes, an issue whose legal status is currently blurred
in most EU countries. Illustrating the already significant
progress that has been made against online piracy, the
Intellectual Property Office’s (IPO’s) study “Online Copyright
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UNITED STATES Rank: 1/45
100
Patents
90
80 Percentage of Overall Score
Membership and 70
60
Ratification of 50
35 32.62
40
Copyrights
International Treaties 30 30 27.03
20
10 25
20
15.39
15
Enforcement 10
Trademarks
5
0
United Median Regional
United States Trade Secrets and Market Access States Index Score Average
Top 5 Economies’ Average Score
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Spotlight on the National IP Environment
Past Editions versus Current Scores EPO. The second and most commonly used mechanism
since the AIA is the inter partes review, available after the
The United States’ overall score has dropped slightly from 95%
above window for a post-grant review; requests that are
(with a score of 28.61 out of 30) to 93% (with a score of 32.62
accepted for an IPR review must be issued within 18 months.
out of 35). This decrease in score is mainly due to challenges,
Both proceedings occur before a specialized Patent Trial
additional cost, and uncertainty in the patent opposition system
and Appeals Board (PTAB) within the USPTO and composed
in place since 2011, compared with other post-grant opposition
of administrative patent judges. Despite the intention of
systems (discussed below in relation to the new indicator on
the new opposition mechanisms, the ease of challenging
patent opposition).
patents during the post-grant period, particularly via inter
partes review, has led to a high rate of trials (particularly for
Patents, Related Rights, and Limitations life sciences claims) and of rejections (between 40% and
2. Patentability requirements: In 2016, as part of its ongoing 65% depending on the type of technology), with challenges
effort to develop guidance on recent key Supreme Court considered by some experts to be disproportionately
decisions in Myriad, Mayo, and Alice, the USPTO issued new funded by bad faith actors. In addition, evidence suggests
guidelines on eligibility for patentable subject matter for that there is a reduced opportunity to amend claims in
naturally occurring substances. Although greater clarity is still opposition proceedings, with USPTO data indicating that
needed, the guidance thus far appears to indicate that certain only about 5% of requests to amend claims are granted by
biologic claims and diagnostic methods are patentable, PTAB, and a lower burden of proof for opposing parties
particularly where they involve something “significantly more” than in district court proceedings. Also, the rate of appeals
than an underlying “law of nature.” A number of court cases to PTAB decisions is beginning to rise, with backlogs
in 2016 appear to mirror this approach. In Rapid Litigation noticeable. As such, the opposition system in the U.S. still
Management Ltd. v. Cellzdirect Inc., a Federal Circuit represents a potential channel for bad faith actors and
decision reversed an earlier decision limiting patentability can involve a great deal of cost and uncertainty for patent
of diagnostic claims, finding that biologic processes and owners compared to other post-grant opposition systems.
diagnostic claims applying laws of nature (beyond merely
observing or identifying such laws) and leading to a “new and Trade Secrets and Market Access
useful” result are patentable. In Vanda Pharmaceuticals Inc. v.
22. Protection of trade secrets: The Defend Trade Secrets
Roxane Labs, Inc., claims on a personalized medicine method
Act was signed into law in 2016. The new law introduces
were upheld on the basis that both diagnostic and treatment
a federal right of action against the misappropriation of
methods included an additional step that went beyond
trade secrets (on top of existing state-level rights of action).
merely depending on the laws of nature. Nevertheless, the
Available remedies include damages for actual losses, with
patenting environment in the U.S. continues to be affected
higher damages for willful infringement, injunctive relief,
by uncertainty as to how to interpret Myriad and other key
and seizures (in extreme situations). Relief is also provided
decisions, and greater clarity, consistency, and closing of
for threatened misappropriation if clear evidence of a threat
gaps with international best practices is crucial to upholding a
exists. The new framework aids in enhancing the protection
supportive innovation environment.
of trade secrets across the U.S.
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VENEZUELA Rank: 45/45
100
Patents
90
80 Percentage of Overall Score
Membership and 70
60
Ratification of 50
35
40
Copyrights
International Treaties 30 30
20
10 25
20
15.39
15 13.79
Enforcement 10 6.88
Trademarks
5
0
Venezuela Median Regional
Venezuela Trade Secrets and Market Access Index Score Average
Top 5 Economies’ Average Score
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Spotlight on the National IP Environment
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VIETNAM Rank: 37/45
Patents
100
90
80 Percentage of Overall Score
Membership and 70
60
Ratification of 35
50
40
Copyrights
International Treaties 30
30
20
10 25
20 17.64
15.39
15
10.34
Enforcement 10
Trademarks
5
0
Vietnam Median Regional
Vietnam Trade Secrets and Market Access Index Score Average
Top 5 Economies’ Average Score
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Spotlight on the National IP Environment
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U.S. Chamber International IP Index | Fifth Edition
UK 7.5
Switzerland 7.5
Sweden 7.5
Germany 7.5
France 7.5
Japan 7.3
Spain 7.25
Singapore 7.25
Italy 7.25
U.S. 7
Hungary 7
South Korea 6.85
Taiwan 6.25
Poland 6
Australia 6
Israel 5.8
Canada 5.05
New Zealand 5
Saudi Arabia 4.5
China 4.35
UAE 4.25
Brunei 4
Turkey 3.6
Russia 3.6
Chile 3.6
Mexico 3.5
Kenya 3.5
Ukraine 3
Colombia 3
Philippines 2.75
Malaysia 2.75
Peru 2.5
Vietnam 2
Nigeria 2
Egypt 1.75
Ecuador 1.75
Brazil 1.75
Thailand 1.5
Pakistan 1.5
Indonesia 1.5
India 1.25
Argentina 1.25
South Africa 1
Algeria 1
Venezuela 0.75
0 1 2 3 4
5 6 7 8
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THE ROOTS OF INNOVATION
U.S. 6.00
UK 5.63
Germany 5.38
Singapore 5.24
South Korea 4.99
France 4.99
New Zealand 4.91
Australia 4.88
Japan 4.53
Sweden 3.85
Malaysia 3.78
Italy 3.66
Hungary 3.38
Spain 3.38
Israel 3.38
Canada 3.38
Switzerland 3.13
South Africa 2.53
Poland 2.41
UAE 2.28
Kenya 2.28
China 2.28
Ukraine 2.08
Mexico 2.04
Taiwan 2.03
Indonesia 2.02
Turkey 1.99
Russia 1.99
Peru 1.99
Brazil 1.88
Colombia 1.84
Thailand 1.78
Philippines 1.78
Saudi Arabia 1.78
Venezuela 1.63
Chile 1.63
Brunei 1.53
Algeria 1.52
Nigeria 1.49
Ecuador 1.48
India 1.47
Egypt 1.38
Pakistan 1.28
Argentina 1.13
Vietnam 1.03
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0 1 2 3 4 5 6 7
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THE ROOTS OF INNOVATION
U.S. 3
Switzerland 3
New Zealand 3
Japan 3
Israel 3
Canada 3
UK 2.75
Sweden 2.75
Singapore 2.75
Italy 2.75
Germany 2.75
Australia 2.75
France 2.5
Taiwan 2.25
Spain 2.25
Hungary 2.25
Brunei 2.25
South Korea 2
Saudi Arabia 2
Poland 2
South Africa 1.75
Malaysia 1.75
Mexico 1.5
Egypt 1.5
Peru 1.25
Kenya 1.25
Brazil 1.25
Vietnam 1
UAE 1
Turkey 1
Nigeria 1
Colombia 1
Chile 1
Argentina 1
Philippines 0.75
Pakistan 0.75
India 0.75
Ukraine 0.5
Russia 0.5
Ecuador 0.5
Algeria 0.5
Venezuela 0.25
Thailand 0.25
Indonesia 0.25
China 0.25
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U.S. Chamber International IP Index | Fifth Edition
Category 5: Enforcement
UK 6.51
Sweden 6.39
France 6.38
Germany 6.29
U.S. 6.27
Japan 6.16
Switzerland 5.73
Australia 5.29
Singapore 5.03
Israel 4.94
South Korea 4.92
Spain 4.85
Italy 4.82
New Zealand 4.79
Hungary 4.76
Poland 4.34
Taiwan 3.58
Mexico 3.48
Colombia 3.23
Canada 3.11
Brazil 3.1
Saudi Arabia 3.05
South Africa 2.92
Chile 2.76
Turkey 2.71
Peru 2.7
Malaysia 2.66
China 2.55
Russia 2.44
Thailand 2.35
UAE 2.31
Ecuador 2.21
Brunei 1.8
Algeria 1.67
Philippines 1.65
Argentina 1.57
Vietnam 1.46
India 1.43
Nigeria 1.38
Kenya 1.32
Indonesia 1.22
Egypt 1.15
Pakistan 1.09
Ukraine 0.88
Venezuela 0.6
0 1 2 3 4 5 6 7
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THE ROOTS OF INNOVATION
U.S. 4
Ukraine 4
UK 4
Switzerland 4
Sweden 4
Spain 4
Japan 4
France 4
Australia 4
Poland 3.5
Italy 3.5
Hungary 3.5
Germany 3.5
South Korea 3
Singapore 3
Russia 3
Turkey 2
Peru 2
Mexico 2
Colombia 2
Chile 2
Canada 2
Taiwan 1.75
Nigeria 1.5
New Zealand 1.5
Malaysia 1.5
Kenya 1.5
China 1.5
Algeria 1.5
UAE 1
Saudi Arabia 1
Philippines 1
Israel 1
Indonesia 1
Ecuador 1
Argentina 1
Vietnam 0.5
Venezuela 0.5
South Africa 0.5
Brunei 0.5
Brazil 0.5
Thailand 0
Pakistan 0
India 0
Egypt 0
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U.S. Chamber International IP Index | Fifth Edition
As in previous editions, these categories are used for ease of organizing the Index and have no statistical impact
on weightings or an economy’s overall score in the Index. Each indicator is explained in more detail below.
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THE ROOTS OF INNOVATION
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U.S. Chamber International IP Index | Fifth Edition
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THE ROOTS OF INNOVATION
IP Rights Baselines
Copyrights 95 U.S.
Trademarks 10 WIPO
Design rights 25 EU
3. Measuring Counterfeiting and Piracy Up until its fourth edition, the Index had relied on two
main sources for measuring piracy and counterfeiting:
Indicators 25 and 26 of the Index measure rates
of physical counterfeiting and software piracy, •. The OECD’s General Trade-Related Index
respectively. Measuring piracy and counterfeiting of Counterfeiting of Economies (GTRIC-e),
presents a number of challenges. which measures the relative rates of physical
counterfeiting (the latest year for which data is
First, illegal activities are inherently difficult to measure available is 2013)xiii; and
and quantify with a high level of accuracy. Estimates
will out of necessity be based on variables such as •. Software piracy rates compiled by the Business
physical seizures and surveys. This is particularly the Software Alliance (BSA) (2016 being the latest
case for online piracy. survey).xiv
Second, studies of rates of piracy and counterfeiting These sources are both robust and internationally
often are either economy-specific (focusing on one or recognized measures. Furthermore, they cover a large
a relatively small sample of economies) or global. The sample of economies, providing a sound basis for both
result is a relative paucity in the number of studies that cross- economy comparisons and long-term use within
measure and compare levels of piracy and counterfeiting, the Index. And both the BSA software piracy rates and
with a sample of economies sufficient enough to make the GTRIC-e Index are numerical measures and can be
large-scale comparisons empirically robust. transposed into two respective scores.
Last, because measures of piracy and counterfeiting Still, there are caveats with the use of these measures,
are inexact, estimates of their economic impact can in particular the GTRIC-e.
vary widely depending on the methodology and data
samples used.xii
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U.S. Chamber International IP Index | Fifth Edition
First, the GTRIC-e Index measures the relative rates of estimates of total global levels of physical
physical counterfeiting and is based on international counterfeiting as a share of world trade, the Global
trade statistics and customs interception data. Measure of Physical Counterfeiting estimates the
Crucially, the GTRIC-e does not take into account or percentage and dollar value of trade-based physical
measure domestically produced products or pirated counterfeiting for each of the 45 economies included
digital products. The practical result is that a number in the Index. To obtain a unique estimate for each of
of economies with relatively low levels of customs the 45 economies, the Global Measure of Physical
interception of counterfeit goods, yet high levels of Counterfeiting uses a proprietary metric that
domestically produced counterfeit goods or high applies 3 equally weighted factors to provide a
levels of online piracy, can rank quite well within holistic take on the propensity for counterfeiting in
the GTRIC-e. These results may not present an the selected economies.
accurate reflection of their overall piracy and
counterfeiting environment. The first factor is the scores for the indicators within
Category 5: Enforcement. These include:
To address this challenge, the fourth edition of
the Index incorporated a new proprietary Global •. The existence of civil and procedural remedies,
Measure of Physical Counterfeiting. The measure was including injunctions, damages for injuries, and
developed by the U.S. Chamber of Commerce and destruction of infringing and counterfeit goods, as
Pugatch Consilium to provide a new global measure of well as their effective application;
physical trade–related counterfeiting. This measure of
physical counterfeiting is also used for this fifth edition •. The existence of preestablished damages and/
of the Index and provides the basis for the score on or mechanisms for determining the amount of
indicator 25. damages generated by infringement;
The measure provides a total and per economy •. Criminal standards (including minimum
estimate of rates of physical trade-related imprisonment and minimum fines) in place and
counterfeiting for each of the 45 economies included their application;
in the Index. The full details of the building of the
model, methodology, and sources used, as well •. Effective border measures (measured by the
as an assessment of the wider threat of physical extent to which goods in transit suspected of
counterfeiting, is provided in the report Measuring infringement may be detained or suspended, as
the Magnitude of Global Physical Counterfeiting, well as the existence of ex officio authority); and
available on the Global Intellectual Property Center
(GIPC) website. •. Transparency and public reporting by customs
authorities of trade-related IP infringement.
In brief, the methodology of the Global Measure of
Physical Counterfeiting builds on that developed The second factor is the OECD’s GTRIC-e benchmark
by the OECD and the GTRIC-e. Using the OECD’s discussed in detail above.
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THE ROOTS OF INNOVATION
The third factor is the rate of corruption within an •. Reports from parliamentary committees and
economy, as measured by Transparency International’s government agencies, including patent or IP
Global Corruption Barometer.xv This measurement is offices as well as enforcement agencies; and
based on the assumption that a strong relationship •. Internal departmental guidelines, policies,
exists between corruption and counterfeiting; that is, assessments, and audits.
authorities in economies that struggle with corruption
tend to also overlook or place less emphasis on Legal
combating criminal activities, including counterfeiting.
Sources from judicial authorities and legal practitioners
include the following:
The final score for indicator 25 is a simple average of
the individual scores each economy receives on these •. Court cases and decisions;
three measures, with each factor weighted an equal •. Legal opinions written by judges; and
one-third of the total indicator score.
•. Legal analysis and opinions written by legal
practitioners.
The BSA survey expresses an economy’s software piracy
rate as a percentage. Within the Index, the reverse of
International Institutions and Third Parties
the BSA software piracy percentage is used as the score
for indicator 26; the higher the BSA software piracy rate These sources include the following:
is in an economy, the lower its score on the Index. For •. Data, studies, and analysis from international
example, if economy X has an estimated software piracy organizations such as the OECD, WTO,
rate of 90% according to the BSA, it receives a score of and WIPO;
0.10 for indicator 26 within the Index.
•. Publicly available reports, studies, and
government submissions by industry
4. Sources organizations; and
Scoring in the Index is based on both qualitative •. Reports from nongovernment and consumer
and quantitative evidence. To provide as complete a organizations.
picture of an economy’s IP environment as possible,
this evidence is drawn from a wide range of sources. Academic
All sources used are publicly available and are free Academic sources include the following:
and accessible to all. The following is an outline of the •. Academic journals; and
different types of sources used.
•. Legal journals.
Government
News
Sources from government branches and agencies
News sources include the following:
include the following:
•.Newspapers;
•. Primary legislation;
•. News websites; and
•. Secondary legislation (regulation) from
executive, legislative, and administrative bodies; •. Trade press.
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In addition to the above listed resources, over 2. . Patentability requirements – The extent to
the course of the past few years, more and more which patentability requirements are in line with
governments and economies have started to make international standards of novelty, inventive
submissions directly to the GIPC and U.S. Chamber step, and industrial applicability.xvi Measured by
of Commerce. These submissions include everything (1) existing de jure patentability guidelines and
from updates on legislative and regulatory initiatives regulations and (2) de facto standards established
to details about various government policies, such as through the application of these guidelines and
antipiracy initiatives as well as data and statistics on regulations through the examination process and
anticounterfeiting and activities to fight online piracy. judicial review. This is a mixed indicator.
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THE ROOTS OF INNOVATION
following criteria: (1) the issuing should exclude Category 2: Copyrights, Related Rights, and
any requirement for domestic manufacturing; Limitations
(2) the issuing should not apply to patented
innovations that have not yet reached the market; The indicators included in this category relate to
(3) in the case of biopharmaceutical products, copyright protection and related rights and limitations.
compulsory licensing under the framework of
TRIPS provisions on public health should not be 9. . Copyright (and related rights) term of
used for commercial purposes, such as for price protection – Measured by the baseline term
negotiations or in support of domestic industries; of protection not referencing the variable of
and (4) adequate and well-defined recourse the length of the author’s life, which is the
mechanisms should be in place for parties term afforded in the U.S. of 95 years. Terms
affected by the issuing of the license. This is a of protection are measured as the minimum
binary indicator. term allowed by copyright law. Where different
minimum terms of protection are used for different
6. . Patent term restoration for pharmaceutical forms of copyright, all terms are added together
products – Measured by the current baseline and divided by 95. This is a numerical indicator.
rate of five years used in the U.S. and EU. This
protection is aimed at restoring the patent term 10. Legal measures that provide necessary exclusive
granted to innovative pharmaceutical products, rights preventing infringement of copyrights and
due to the prolonged research, development, related rights (including Web hosting, streaming,
and regulatory approval periods of such products. and linking) – Measured by the extent to which
This category does not include other forms of economies (1) have in place laws and procedures
patent term restoration that are granted on the that provide necessary exclusive rights; and (2)
basis of prolonged examination periods. This is a apply these laws to prevent, deter, and remedy
numerical indicator. online infringement of copyright and related rights.
This is a mixed indicator.
7. . Regulatory data protection (RDP) term –
Measured by the optimal desired term, which is 11. .Availability of frameworks that promote
the term of exclusivity used by the EU for new cooperative action against online piracy –
biopharmaceutical products containing new active Measured by the existence of clear standards for
ingredients regardless of molecular size and/or the limitation of liability for copyright and related
complexity.xvii This is a numerical indicator. rights infringement by ISPs that expeditiously
remove infringing material upon obtaining
8. . Patent opposition – Measured by the availability knowledge of it, in the context of an overall system
of mechanisms for opposing patents in a manner that does not unduly burden ISPs, promotes
that does not delay the granting of a patent (in cooperation between them and rights holders to
contrast to a right of opposition before the patent address online piracy, and respects and protects
is granted) and ensures fair and transparent users’ rights. This is a mixed indicator.
opposition proceedings. This is a mixed indicator.
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12. Scope of limitations and exceptions to 16. .Discrimination/restrictions on the use of brands
copyrights and related rights – Measured by in the packaging of different products – Measured
the extent to which exceptions and limitations by the extent to which different national laws and
are consistent in text and in application with regulations do not unreasonably limit the rights
the three-step test originating in the Berne holder from using/putting its brand, trademark,
Convention (Berne three-step test).xviii The score or corresponding trade dress on the package of
for this indicator is evenly divided between its products, thereby curtailing its rights under
legislation and application in the court system. trademark protection. This is a binary indicator.
This is a mixed indicator.
17. .Ability of trademark owners to protect
13. .Digital rights management legislation – their trademarks: requisites for protection –
Measured by the extent to which (1) economies Measured by the extent to which existing laws
have passed primary and/or secondary legislation and regulations and/or de facto practices allow
relating to DRM and technological protection for trademark protection through the use of the
measures and (2) this legislation is applied. This is mark, regardless of whether the trademark owner
a mixed indicator. registers the mark. This is a mixed indicator.
14..Clear implementation of policies and guidelines 18. .Legal measures available that provide necessary
requiring that any proprietary software used exclusive rights to redress unauthorized uses of
on government ICT systems should be licensed trademarks – Measured by the extent to which
software – Measured by the extent to which (1) economies (1) have in place laws and procedures
policies and guidelines are in place that stipulate that provide necessary causes of action to
the use of only licensed proprietary software and address violations of a trademark owner’s rights
(2) these policies and guidelines are applied. This (such as infringement of registered trademarks,
is a mixed indicator. unfair competition, false designation of origin,
false advertising, dilution of famous trademarks,
Category 3: Trademarks, Related Rights, and cybersquatting, and violation of rights
Limitations associated with a corresponding trade dress),
which create a likelihood of public confusion
The indicators in this category relate to trademark as to source, sponsorship, or affiliation; and (2)
protection, design rights, and related rights and apply these laws to prevent, deter, and remedy
limitations. infringement of trademarks and related rights.
This is a mixed indicator.
15. .Trademarks term of protection (renewal
periods) – Measured by the renewal term of 19. .Availability of frameworks that promote
protection being offered; the baseline term is 10 action against the online sale of counterfeit
years as provided by the Singapore Treaty on the goods – Measured by the existence of clear rules
Law of Trademarks. This is a numerical indicator. and standards for the expeditious removal of
trademark-infringing material by online service
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providers upon learning of the infringement, in the court or law enforcement system. Economies that
context of an overall system that does not unduly do not have legislation in place but in which trade
burden such providers, promotes cooperation secrets and confidential information are effectively
between them and rights holders to address the protected through other mechanisms can receive
infringement of trademark rights, and respects a maximum score of 0.5. Model legislation is TRIPS
and protects consumers’ rights. This score is (Article 39(1)) & (2)). This is a mixed indicator.
evenly divided between the existence of relevant
primary and/or secondary legislation and its 23. .Barriers to market access – The extent to which
application and enforcement. In the absence of laws and regulations or de facto practices do not
a legal or regulatory framework, a score of up to make access to an economy’s market contingent
0.5 can be allocated based on the existence and on the sharing and/or disclosure of IP and know-
effectiveness of voluntary industry standards and how with a local or domestic entity. This indicator
practices in place. This is a mixed indicator.xix is measured by the extent to which (1) existing
laws and procedures do not make market access
20. .Industrial designs term of protection – Measured contingent on the sharing or disclosure of IP and
by the maximum term of protection being offered know-how; and (2) the application of such laws or,
(including renewable periods); the baseline term in the absence of such laws, the existence of de
is 25 years, which is the maximum term afforded in facto practices and standards that achieve a similar
the European Union. This is a numerical indicator. effect. This is a mixed indicator.
21. .Legal measures available that provide necessary 24..Regulatory and administrative barriers to
exclusive rights to redress the unauthorized the commercialization of IP assets – The
use of industrial design rights – Measured by the extent to which regulatory and/or administrative
extent to which economies (1) have in place laws mechanisms allow IP owners the “freedom to
and procedures that provide necessary exclusive operate” as part of their commercialization
rights (including making, marketing, trading, and and exploitation activities. This would include
use of an industrial design); and (2) apply these the avoidance of barriers or undue burdens on
laws to prevent, deter, and remedy infringement of interacting parties in the following areas:
industrial design rights. This is a mixed indicator. 1.. “Blanket” requirements for forced disclosure
of technologies without the consent of the
Category 4: Trade Secrets and Market Access IP owner;
2.. Governmental preapproval for any licensing
The indicators in this category relate to trade secrets, agreement between parties;
market access, and related rights and limitations. 3.. Predetermined licensing terms, including
FRAND, for proprietary technologies that
22. Protection of trade secrets – Measured by the have not been part of any standard-setting
existence of (1) legislation that offers protection for process (so called market-driven de facto
trade secrets or confidential business information standards, as opposed to de jure, formally
and (2) the application of this legislation in the created standards);
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25. Physical counterfeiting rates – Measured by 31. Transparency and public reporting by customs
estimated rates of general trade-related physical authorities of trade-related IP infringement –
counterfeiting using the U.S. Chamber’s Global The extent to which customs authorities in a given
Measure of Physical Counterfeiting. This is a economy publish statistics and data on trade-
numerical indicator. related IP infringement. This indicator measures
(1) the extent to which data are published on a
26. Software piracy rates – Measured by rates of regular and systematic basis and (2) the level of
software piracy. This is a numerical indicator. detail of these data. This is a mixed indicator.
27. Civil and procedural remedies – Measured by Category 6: Membership and Ratification of
(1) the existence of civil and procedural remedies, International Treaties
including injunctions, damages for injuries, and
destruction of infringing and counterfeit goods; The indicators in this category measure whether an
and (2) their effective application. This indicator economy is (1) a signatory of and (2) has ratified or
also reflects administrative enforcement measures acceded to international treaties on the protection of IP.
where applicable. This is a mixed indicator. Indicators 32–34 are measured using WIPO as a source.
The following treaties each make up one indicator:
28. Preestablished damages and/or mechanisms for
determining the amount of damages generated 32. WIPO Internet Treaties – These consist of
by infringement – This is a mixed indicator. the WIPO Copyright Treaty and the WIPO
Performances and Phonograms Treaty.
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Endnotes
i World Bank (2016), Gross Domestic Product 2015, Ranking Table Updated October 2016.
ii Note that the World Bank’s geographic classifications have been somewhat amalgamated: Middle East and
North Africa has been combined with Sub-Saharan Africa, and East Asia and Pacific has been combined with
South Asia. See World Bank (2016), Country and Lending Groups, http://data.worldbank.org/about/country-
and-lending-groups.
iii Note that the World Bank does not include Taiwan in its classification or its databank. However, based on
current per capita income levels, Taiwan would be classified as a high-income economy. World Bank (2016),
Country and Lending Groups, http://data.worldbank.org/about/country-and-lending-groups.
vi Note that the World Bank does not include Taiwan in its classification or its databank. However, based on
current per capita income levels, Taiwan would be classified as a high-income economy. World Bank (2016),
Country and Lending Groups, http://data.worldbank.org/about/country-and-lending-groups.
v Pugatch, M. P. (2004), The International Political Economy of Intellectual Property Rights, pp. 129, 131; ICTSD,
WHO, UNCTAD (2006), Guidelines for the Examination of Pharmaceutical Patents: Developing a Public Health
Perspective – A Working Paper, p. vii.
vi Broken down by relevant categories, the TRIPS Agreement scores on the Index are:
Category 1: Patents, Related Rights, and Limitations – 6 out of 8
Category 2: Copyrights, Related Rights, and Limitations – 2.03 out of 6
Category 3: Trademarks, Related Rights, and Limitations – 4.6 out of 7
Category 4: Trade Secrets and Market Access – 1.5 out of 3
Category 5: Enforcement – 2.5 out of 5 relevant indicators
viii For greater certainty, that ex officio action does not require a formal complaint from a third party or rights
holder. For the purposes of this article, a party may treat “goods under customs control” as meaning goods
that are subject to a party’s customs procedures. For the purposes of this article, a party may treat goods
“destined for export” as meaning exported. This subparagraph applies to suspect goods that are in transit
from one customs office to another customs office in the party’s territory from which the goods will be
exported. As an alternative to this subparagraph, a party shall instead endeavor to provide, if appropriate
and with a view to eliminating international trade in counterfeit trademark goods or pirated copyright goods,
available information to another party in respect to goods that it has examined without a local consignee and
that are transhipped through its territory and destined for the territory of the other party, to inform that other
party’s efforts to identify suspect goods upon arrival in its territory.
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ix Broken down by relevant categories, the TPP agreement scores on the Index are:
Category 1: Patents, Related Rights, and Limitations – 7.55 out of 8
Category 2: Copyrights, Related Rights, and Limitations – 5.74 out of 6
Category 3: Trademarks, Related Rights, and Limitations – 4.1 out of 7
Category 4: Trade Secrets and Market Access – 1.5 out of 3
Category 5: Enforcement – 4.5 out of 5 relevant indicators
Category 6: Membership and Ratification of International Treaties – 2 out of 3
x Saez, C. (2016),” Special Feature: UN High Level Panel on Access to Medicines—First Reactions, Process
Explained,” IP Watch, February 1, 2016.
xi Many economies have a copyright term that is measured by the life of an author plus an additional number
of years. Given the difficulties in measuring and estimating an average life of an author, and thus an average
term of protection, this indicator uses only minimum terms, which are applied in lieu of the life of the author
plus an additional number of years (i.e., in cases where the rights holder is unknown or has already died).
Accordingly, 95 years is the minimum term applied in U.S. law.
xii These difficulties in measuring piracy are particularly pronounced for online piracy. No comprehensive
studies exist that measure and compare rates of online piracy for a large sample of countries. Consequently,
the indicators measuring piracy and counterfeiting in the Index are primarily based on physical piracy
and counterfeiting, with the data from the BSA being based on both physical and digital software piracy.
Nevertheless, a number of academic and industry-supported studies measure rates of online piracy and
its economic impact either on a global basis or for a few large economies. For example, a 2011 study
commissioned by NBCUniversal and produced by Envisional found that 23% of global Internet traffic was
estimated to be infringing in nature. Similarly, a 2011 report by Frontier Economics estimated the total value
of counterfeit and pirated products in 2008 and forecast for 2015 to be $455–$650 billion and $1,220–$1,770
billion, respectively. Out of this total, digitally pirated products were estimated at $30–75 billion in 2008 and
forecast to be $80–240 billion in 2015. Furthermore, this report found that online piracy in the U.S. made up
a large share of this digital piracy figure. For 2008, the report estimated that $7–$20 billion worth of digitally
pirated recorded music was consumed in the U.S., with an additional $1.4–$2 billion of digitally pirated
movies also consumed. Last, the vast majority of academic papers and economic analyses have found that
online piracy and file sharing has had a negative impact on media sales, including music. For details, see
Envisional (2011), Technical Report: An Estimate of Infringing Use of the Internet (Cambridge 2011), p. 2;
Frontier Economics (2011), Estimating the Global Economic and Social Impacts of Counterfeiting and Piracy
(London 2011), pp. 56–8; and Smith, M. D. & Telang, R. (2012), Assessing the Academic Literature regarding
the Impact of Media Piracy on Sales (Social Science Research Network 2012).
xiii OECD (2016), Trade in Counterfeit and Pirated Goods, pp. 110–1.
xiv Business Software Alliance (BSA) (2016), Seizing Opportunity through License Compliance: BSA Global
Software Survey, May 2016.
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xvi International and best practices are defined here as those principles established in TRIPS Article 27: “Subject
to the provisions of paragraphs 2 and 3, patents shall be available for any inventions, whether products or
processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of
industrial application.”
xvii Half (0.5) of the available score is based on the term available for biologics or large-molecule compounds.
If a country’s relevant legislation/regulation either de jure or de facto does not cover such compounds, then
the maximum score that can be achieved on this indicator is 0.5. The baseline numerical term used is that by
the EU of 10 years (8+2) of marketing exclusivity.
xviii The Berne three-step test generally requires that limitations and exceptions to copyrights should be (1)
confined to special cases; (2) which do not conflict with a normal exploitation of the work; and (3) do not
unreasonably prejudice the legitimate interests of the rights holder (TRIPS Agreement, Article 13).
xix Examples of voluntary and industry-based standards include those standards and policies used in the U.S.
and elsewhere by providers such as eBay. The latter has a system in place—the Verified Rights Owner (VeRO)
Program—which allows rights holders to protect their IP through a process of notification and takedown in
which eBay is notified of the infringement and promptly removes the material from its website. Full details of
the system are available at http://pages.ebay.com/vero/intro/index.html.
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The U.S. Chamber of Commerce’s Global Intellectual Property Center (www.theglobalipcenter.com) is working around the
world to champion intellectual property rights as vital to creating jobs, saving lives, advancing global economic growth, and
generating breakthrough solutions to global challenges.
The U.S. Chamber of Commerce is the world’s largest business federation representing the interests of more than
3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations.
This report was conducted by Pugatch Consilum (www.pugatch-consilium.com) a boutique consultancy that provides
evidence-based research, analysis, and intelligence on the fastest growing sectors of the knowledge economy. Authors of this
report are Meir Pugatch, Rachel Chu, and David Torstensson.
Copyright © 2017 by the U.S. Chamber of Commerce. All rights reserved. No part of this work, covered by the copyrights
herein, may be reproduced or copied in any form or by any means—graphic, electronic, or mechanical, including
photocopying, recording, taping, or information and retrieval systems—without the permission of the Chamber.
Global Intellectual Property Center
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Washington, DC 20062
www.theglobalipcenter.com