HOME

About CSIS
Intellectual Property and Innovation

IPR’s Relationship to Tech Transfer
The Federal Trade Commission found that firms have different sensitivities to IPR, depending on their business models and the kinds of technologies on which they depend. Firms that make products that are difficult to pirate favor licensing, while firms that face a greater risk of piracy tend to choose foreign direct investment, which can allow for steps that mitigate the risk of IP loss.

As IPRs strengthen in developing and transition economies, firms are more likely to invest in such countries and more likely to license technology. When a developing country strengthens IPR, therefore, it should experience increased FDI from the piracy-sensitive firms, and increase licensing from the less vulnerable firms. Both effects can be economically beneficial to the country.

The goal of the TRIPS agreement was to strengthen IPR which was believe could lead to more innovation and more international technology transfer from the rest of the world through FDI and licensing. TRIPS is only 11 years old, but patent filing has already begun to respond, as Figure 4 below indicates.


Figure Source: Kamal Saggi, “Technology Transfer and the Role of Intellectual Property Rights,” Presentation at the WTO, October 11, 2005.

By increasing their filing in various countries, firms are demonstrating that they have more confidence in the IP legal systems and are becoming more involved in more country markets than in the pre-TRIPS period. By bringing the technology into these countries through their patent offices, greater technology transfer and access may come through licensing and knowledge spillover effects.

 

Center for Strategic and International Studies, 1800 K Street, NW, Washington DC, 20006 | Tel: 202-887-0200 | Fax: 202-775-3199