IP Finance is very happy to offer our readers this guest post by Nottingham Law School professor Janice Denoncourt summarizing the high points of a Montreal Council on Foreign Relations event featuring Francis Gurry, outgoing Director General of WIPO.
On 15 September 2020 the Montreal Council on Foreign Relations (CORIM) organised a fascinating 30 minute webinar with Francis Gurry, Director General, WIPO. The event is part of CORIM’s Business Series Online accessible for a small fee of CAD $30. “Who will finance Innovation?” is the strapline of WIPO’s Global Innovation Index 2020 https://www.wipo.int/global_innovation_index/en/2020/. Canada currently ranks 17th overall behind Japan and Ireland, retaining its position from last year, but well out of the top 10 where it aspires to be.
From Geneva, Gurry discussed emerging global business and technology challenges with moderator, Lally Rementilla. Lally is well-known in the Canadian intellectual property (IP) backed finance world. In July 2020 she was appointed Managing Partner, IP-Backed-Finance for BDC Capital (www.bdc.ca).
By way of background, the Business Development Bank for Canada (BDC, French: Banque de Développement du Canada) is Canada’s bank for entrepreneurs. It is wholly owned by the Government of Canada. Jérôme Nycz, executive vice president at BDC Capital stated, “Our goal…is to make Canada a leader in the IP space.” BDC Capital, the bank’s investment arm, has created a new CAD $160 million intellectual property (IP) development financing fund to support IP-rich companies who seek to commercialize their IP, increase their competitiveness and expand globally. This BDC’s IP finance initiative is a positive reflection on Canada’s comprehensive 2018 National IP Strategy https://ic.gc.ca/eic/site/108.nsf/eng/home.
The pair discussed several broad topics and set out below are the highlights.
Rementilla asked for Gurry’s perspective on the role of IP rights in the new world order. Gurry noted that a number of tendencies have been accelerated by Covid-19 virus and pandemic, not to mention worrisome trade wars and cyberwarfare, resulting in further complexity in the IP world. Nevertheless, despite the gloom and doom ‘IP is a vector for collaboration’ said Gurry. Indeed, 2.1% of the world’s global gross domestic product (GDP) is tied to research and development. Gurry hopes that despite the decline in foreign direct investment, international collaboration in innovation will continue. He cited the example of innovation hotspot Silicon Valley, where the majority of inventors are foreign.
A key geopolitical change of course is the rise of Asia and in particular the People’s Republic of China (PRC) as a patent powerhouse. Gurry noted that the PRC is buoyed by its national focus on IP leading to it overtaking the United States in filing patents overseas. Indeed, I would add that the PRC announced earlier this year that it is preparing the outline for its second National IP strategy for the 2021-2013 period. According to Gurry, a successful national IP strategy involves a focus ‘from the top’ on science, technology and innovation and further that ‘success comes when there is an awareness at the very top of the importance of protecting a nation’s competition advantage’.
Turning to finance for IP-rich tech start-ups, Gurry surmised that ‘With a start-up you are basically backing an intangible asset’. Further, as author of Intellectual Property, Finance and Corporate Governance (2018) I was delighted to hear that Gurry supports re-thinking the gaps in traditional accounting to better support valuation intangible IP rights. In December 2019, I had the pleasure of attending a meeting with the BDC’s C-suite in Montreal alongside Lally and other IP experts. I shared my views and IP in the boardroom research to raise awareness of the potential of IP-backed financing, which has now come to fruition.
Gurry acknowledges that there are changing perceptions about IP rights. However, he cautioned that the alternative, a scenario where no one uses IP rights, could lead to a lack of transparency. The publication of patent information is ‘the most systematic record of humanity’s technology’, he said.
In response to Professor Isolde Gendreau’s (Université de Montreal, Faculté de Droit) question regarding the potential for supra-national enforcement of IP rights, Gurry recognized that counterfeiting and piracy are now global issues. These behaviors affect both developed and developing countries alike and require a global response. Thus, WIPO’s focus is on ‘building respect for IP rights, rather than putting teenagers in jail’. WIPO will look to ‘build capacity to take action internationally’.
The CORIM webinar, ‘Intellectual property: meeting global business and technology challenges’ may have flown under the radar for many outside Canada. However, it is a timely reminder of Gurry’s wisdom and contribution to the global IP landscape as WIPO’s Director-General since 2008. His term will end this month. Join me in wishing him every success in the future.
Dr Janice Denoncourt
Nottingham Law School
Nottingham Trent University