The Future of the Intellectual Property System in Mauritius
The Intellectual Property Sector is fast developing in Mauritius with a record number of IP Creations being developed, commercialised and their rights being claimed for. The term “Intellectual Property” refers to new ideas, and the rights of the people who had those ideas to exploit them commercially or artistically. The rights cannot apply to the ideas themselves, only to the material or artistic forms that they take. Besides providing and enforcing legal rights, it is widely agreed that the IP system of any country has to function smoothly at many points along a chain, from idea creation and development to commercialisation, manufacturing, licensing and uptake. Traditional IP support measures used by governments primarily focus on improving legislations and guidelines defining IP rights and improving the consequent enforcement of those rights. It is also geared towards the training of IP officials, professionals and others.
However, there has been a change in the IP system’s modus operandi across the world recently. IP rights do not simply benefit creators, but rather society as a whole. In today’s interconnected knowledge-centric society, the economic stakes of an appropriate IP framework are extremely high. IP enables greater investment in products and services to improve society, including life-saving vaccines and medicines, or high-yield, drought-resistant crops that increase the world’s food supply. By balancing the IP system for social and economic growth, society will benefit from a wider base of knowledge, increased investment in research and development, broader support of creative arts, greater access to open markets, better consumer protection and greater accessibility to IP benefits.
Governments have to start contemplating a wide range of tools to promote innovation through IP creation and commercialisation. These measures would directly lead to market expansion, new revenue streams for companies, higher employment and growth for the national economy.
Certain measures, based on research carried out by the World Economic Forum, reinforce the effectiveness of those traditional measures whilst ensuring a drastic shift towards innovative measures. One could say that it would only be to the advantage of Mauritius to implement as least some of them into our very young and experience-lacking IP system, if we want to compete in the arena of well-established Intellectual Property States. Measures, which could be considered, are:
• Increase understanding of the economic impact of IP on commercial transactions
The public’s understanding of IP in Mauritius is still low as many people are still unaware of its necessity and impact. Governments could consider, as Hong Kong reportedly plans to do, soliciting information from publicly listed companies about how IP is used in commercial transactions such as mergers and acquisitions. This information not only provides useful information relating to the transfer of IP titles and assets and their monetary value, but also helps to spread knowledge on IP accounting, as well as valuation models and methods.
• Encourage public-private partnerships
Public-Private Partnerships (PPPs) in Mauritius is a new sector which is slowly but surely progressing. Consequently, it would be a great opportunity for the government to intensify PPPs where the government supports business in developing infant or new technology. PPPs as a policy tool are often discussed, but insufficiently put into practice. More deserves to be done, especially when they have clear economic and social outcomes. The Singaporean government has been working with banks to extend loans to entrepreneurs who use IP as collateral.
• Provide smart financial incentives to generate IP
A number of countries already provide financial incentives for companies to generate new IP that meets or creates market demand. The financial support is generally focused on the prototype and commercialisation stages up to pre-registration, and can be in the form of subsidies, seed money, outright grants, loans or equity participation. Singapore again leads the way in such matters.
• Open up investment and financial markets in IP
In supporting IP transactions, governments can create vibrant technology markets. Some of them are now welcoming and encouraging patent auctions and technology exchanges where IP rights, especially patent rights, can be bought and sold or licensed, whether singly or in bundles.
An example of this is the IPXI, the world’s first financial exchange focused on intellectual property rights based in the United States. This exchange enables efficient technology transfer, facilitates reasonable, market-based pricing and assists IP owners in unlocking the value of their IP assets. Shanghai, People’s Republic of China, is reported to have begun an IP exchange.
• Provide fiscal incentives to generate or utilize IP
Similar to financial incentives to promote the generation of IP, there are other fiscal incentives that can promote the better use of that IP. These may include tax holidays or breaks such as tax write-offs (often on a sliding scale), accelerated depreciation of machinery and equipment, waivers of sales tax or lower employment taxes.
For example, the Australian government has created a 45% refundable research and development tax offset. In Ireland, tax relief is given for profits earned on commercialised IP, whether from patents, designs, trademarks or copyright.
The IP world is rapidly evolving and finding several innovative ways to cater for the new demands of society. The question that remains unanswered is: what will it take for Mauritius to take the necessary steps to catch up with those demands?
* Published in print edition on 30 August 2013