Invention, using the term most broadly, and imitation are the two legs, so to call them, on which the human race historically has walked” – William James. Society needs the inventors of this world who continually drive us forward with novel ideas and concepts, the innovators who build on others’ inventions to improve on them as well as the producers who turn these ideas or prototypes into products accessible by us.
The common theme that keeps the inventors inventing, the innovators able to build on past inventions and, in turn, innovate and the producers able to produce while rewarding invention and innovation is intellectual property (IP) rights and their protection whether in the form of patents, design rights, trademarks, copyright or even geographical indication.
A recent study conducted by the EU concluded that about 39 per cent of the EU’s GDP and 26 per cent of its employment is attributable to LP intensive industries. The financial news is constantly dominated by the social media, technology and pharmaceutical giants of today.
This begs the question: where does Malta fit in all this and what level of IP-related activity have we managed to attract to our shores?
Maltese governments (present and past) have undertaken various projects to foster the growth of IP-intensive industries, such as Smart City, the Life Sciences Park, initiatives in the film and digital games sectors, among others. But there is so much more to the IP world than meets the eye.
Quite apart from the core activity relating to the creation of the IP assets, which requires human resources, the highest levels of skill, together with a top-notch infrastructure, there exists another area of the IP rights ecosystem that Malta can and should exploit.
Just as EP rights drive creativity and innovation, these same qualities in the hands of legislators and those who advise them have also led to and will continue to lead to advancements. Whether by offering better ways of protecting IP rights or by taming them into assets that can easily be provided as security to finance the next invention, creating ways of commercialising and extracting more value from IP rights not only spurs further invention and innovation but also creates new high value jobs to service IP industry players.
Our experiences in the shipping, aviation, financial services and trusts industries, among others, have taught us that thinking sharp, big and bold has taken Malta places. We owe our successes to a highly-skilled service industry that was capable of sufficient foresight to come up with the necessary legislative and policy proposals and solutions that catered for the needs of the industry players in each of these areas. Prompt decisions by the public administration, embracing the recommendations made by the service industry, enacting solid, yet industry-friendly, legislation, has been equally critical to this success.
To date, our IP legislative thrust has been almost entirely dedicated to the passive implementation of EU laws and international legal obligations that Malta has entered into relating to IP rights. This, although key, should only be a starting point if Malta wants to excel in attracting IP-related commercial activity to its shores. Even in the area of IP protection our laws must strive to be innovative in, among other things, recognising and protecting novel forms of rights, including image/personality rights (the right to commercially exploit the value of one’s image, which right extends to fictitious personalities) and trade secrets. In enforcing IP rights, higbly-specialised courts will help promote Malta’s status as an efficient and effective jurisdiction.
To date, Malta’s major attractiveness to the global IP industry has been limited to cost and tax efficiencies. However, similar and, at times, even more aggressive incentives have been adopted by other Countries that are recognised as the leading IP jurisdictions.
Malta’s legal and administrative set-ups seem to have overlooked the financing and trading aspects of IP, which are at the centre of numerous initiatives being taken globally.
IP holding companies today increasingly attempt to commercialise the value of their IP assets, placing them in security to raise capital for further investment. This does not come without its fair share of problems. Whereas the identity of the proprietors of tangible assets may be ascertained with relative ease and where the value of tangible assets may be calculated rather accurately, the same cannot be said of intangible intellectual property. This is why financiers crave legislation that provides certainty of title and adopts financier-friendly measures and enforcement mechanisms. In turn, IP holding companies will choose those countries its financiers find acceptable.
Our experience the shipping and aviation industries clearly indicates that financier-friendly legislation remains key to a buzzing finance service industry in Malta. We should transpose our successes in these industries to the IP Sector, providing the solutions sought by the IP industry players.
IP holding companies also trade assets forming part of their IP portfolios. The creation of adequate trading platforms and solutions, including the promotion of IP intermediaries is definitely fertile ground for a prospective pitch that Malta could make to the industry.
Certainty of title and validity of the IP assets is a key ingredient to whoever may wish to finance or trade these assets. One major legal and administrative solution in this direction is creating the widest levels of transparency through an electronic register accessible worldwide and which extends to all forms of IP rights.
This is the broad vision and scope of a project proposal made to Economy Minister Chris Cardona, entitled `Making Malta an IP hub’. This initiative recognises the validity of Malta’s service industry and calls upon the highly skilled service providers to, together identify the problems, solutions and opportunities and emerge with solid recommendations for reform that will secure a prominent place for Malta on the global lP map.
This article was published on the 1 December 2014 in the Times of Malta.