The financial crisis has hit developed economies hard this year. Although the Asia-Pacific region has also been affected, the shock has been less severe. In August both Japan and Hong Kong announced a return to growth in the last quarter.
In the same way that the region's role in the global economy is becoming ever-more important, so is its influence in global IP issues. This year, for example, a dozen people from the Asia-Pacific made it into Managing IP's annual list of the 50 most influential people in IP.
In administration, Tian Lipu has maintained his outstanding reputation at the head of China's State Intellectual Property Office and his counterpart in India, PH Kurian, is showing signs of being able to make lasting change at an office that is in dire need of reform. In Geneva two of the region's administrators face more daunting challenges. Margaret Chan has so far remained calm and collected during the swine flu epidemic, but will face more questions about how to balance the need for patent protection with the clamour for affordable vaccines if the situation worsens. Across town, Australia's Francis Gurry, who has the big challenge of reinvigorating WIPO, has had a quiet 2009 so far. Now that he has had the chance to appoint new faces to key positions, it is time to show that he can put this organisation at the forefront of debate on IP harmonisation.
Outside of the bureaucratic offices, an increasing number of in-house from the region are making their voices heard. In Japan Toichi Takenaka is leading debate on reform of the country's IP system, while in South Korea, Jeong Hwan Lee is one of the figures trying to increase the revenue that companies derive from licensing.
China remains the largest contributor of names to the list and this year sees some important new faces, including Wu Handong, the increasingly influential academic and Lv Guoqiang, the respected judge who has now moved into administration in Shanghai.
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Shaping Japan's IP policy
Toichi Takenaka Chairman Japan Intellectual Property Association |
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| Toichi Takenaka's manifesto for Japan's IP system |
| JIPA's priority issues are: (1) employees' invention system; (2) trade secrets; (3) protection of licence contracts; (4) international harmonisation of the intellectual property system; (5) changes in the environment surrounding intellectual property in response to globalisation. |
"At the moment the government and, frankly speaking, our prime minister, is not very interested in IP matters," Katsuya Tamai, IP professor at the University of Tokyo, told Managing IP earlier this year. Little has changed since then as Japanese politicians struggle to deal with the economic crisis.
In the absence of government direction it falls to companies to take the lead in promoting and improving IP protection. The Japan Intellectual Property Association is one of the country's most active IP organisations and its chairman, Toichi Takenaka, is proving a dynamic leader. He told Managing IP what areas of Japan's IP system he would like to see improved (see box). He also wants to expand the training programmes the Association offers while keeping costs low for members.
Takenaka learnt about IP working in the pharmaceutical industry and is now chairman of Astellas Pharma, a global innovator pharmaceutical company created in 2005 following the merger of Yamanouchi Pharmaceutical and Fujisawa Pharmaceutical. He says this merger is the biggest success of his career to date. But if he can carry out JIPA's ambitious action plan for 2009, which includes working with AIPLA, IPO and BusinessEurope to create a one-search system for patent applications that would see search strategies and databases shared, that would be another achievement to be proud of.
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Spearheading Korea's patent royalty drive
Jeong Hwan Lee Executive vice-president Intellectual Property Centre, LG Electronics |
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LG Electronics, an electronics and telecommunications company, is one of Korea's patent pioneers. It is regularly one of the top foreign filers at the USPTO and was the eighth biggest user of the PCT system in 2008, up five places from 2007. As head of the company's IP centre, Jeong Hwan Lee is responsible for driving forward the company's IP policy and for ensuring that it maximises licensing revenue from the R&D it funds. Important deals agreed by the company included a broad patent licensing agreement signed with Microsoft in 2007.
Lee joined LG Electronics from university in 1977. He "really is the living history of the Korean IP profession," says Man-Gi Paik, a partner of Kim & Chang who has known Lee for more than 30 years and has worked both with and against him in IP deals and disputes. Lee headed a series of IP departments in the LG company including teams in LG Semiconductor and LG Philips before moving to his present post in 2005.
LG has increasingly developed a reputation for hard-hitting litigation when it comes to protecting its patents. In the highly competitive plasma TV market, the company is battling Japanese rival Hitachi in several venues. It has won a case in the US against Whirlpool over washing machine patents and ended up in front of the country's Supreme Court last year in a row with Quanta over licensing.
Although Korean companies are filing more patents and being more aggressive about their enforcement, in 2008 Korean companies paid out some $5 billion in patent royalties while receiving just $1.9 billion in royalty income. To help close this gap, Lee helped found the Korea Intellectual Property Association in June last year and is chairman of its board of directors. The Association already has 67 members and aims to help Korean companies develop their IP policies.
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Streamlining China's courts
Kong Xiangjun Deputy chief judge of the IP tribunal of the Supreme People's Court |
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When the Chinese government published its National IP Strategy in June last year, IP practitioners described it as an impressive roadmap. The ambition was clear to make China one of the world's most innovative countries by 2020 but the detail still needed to be fleshed out. This year, Kong Xiangjun of the IP Tribunal at the Supreme People's Court has started to supply that detail.
Much of it was contained in the Guidelines for Implementing the National IP Strategy, which the Court published in March. These set out a plan for establishing unified courts handling civil, criminal and administrative IP cases and promised to study the possibility of a specialist IP appeal court.
Although the Supreme People's Court's Opinion on IP Trials has led some practitioners to be concerned that the courts may reduce protection for IP in turbulent economic times, Kong stressed that China's top court has maintained the principle of equality before the law. He highlighted the 2008 Ferrero Rocher case (over which he presided) in which the European chocolate maker won a passing off case and was able to use evidence from abroad to prove the well-known status of its mark.
Kong's career began in 1986, as China's IP legal system was starting to develop, when he was appointed judge of a local court in Shandong province. In the 1990s he obtained a doctorate in law, followed by two years of postdoctoral research. He is a specialist in competition law and trade mark law.
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China's IP moderniser
Tian Lipu Commissioner SIPO |
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IP practitioners in China had many different suggestions for the Top 50 this year, but all agreed that Tian Lipu must retain his place. No patent office is perfect, but SIPO wins praise for its efficiency and ability to cope with an increasing workload. As an example, the all-important implementing regulations for the third amendment to the Patent Law, which will come into force on October 1, are likely to be ready in plenty of time not an achievement that all Chinese government departments and administrative agencies can boast.
In addition to keeping SIPO running smoothly, Tian is one of the people tasked with implementing the influential National IP Strategy. The strategy was unveiled in June last year but at the time amounted to more of a statement of intent than a definite plan. This year, Tian has been one of those putting words into action. He has been making presentations around the country on the strategy and, after a talk in Hong Kong, spoke with Managing IP about the government's IP plans. At the time, he tried to assuage some of the fears that IP practitioners have about the new amendments to the Patent Law. "I would like to tell pharmaceutical companies that they don't have to worry about [compulsory licensing] at all," he said.
He went on to say that the IP-5 (the EPO and IP offices in Japan, Korea, the US and China) face "a very heavy workload and some challenges, such large backlogs, and issues relating to human resources, search engines and language issues". With the US Congress poised to confirm a new head at the USPTO and a process underway to choose the next president of the EPO, Tian will be one of the most experienced members of the IP-5 in talks between the big IP offices over the next few years. As such, he will play a key role in promoting cooperation to tackle the international IP system's well-documented problems.
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Leading China's patent powerhouse
Song Liuping Chief legal officer Huawei |
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When Chinese telecoms company Huawei made its first venture into the US market in 2003 things did not go according to plan. Cisco Systems, the US computer equipment maker, accused the Chinese company of stealing its source code and infringing its copyright and patents and headed straight to court.
Cisco claimed that Huawei had copied some of the source code for the US company's IOS software; had infringed Cisco's copyright in technical documentation; had copied the Command Line Interface and corresponding screen displays of Cisco's IOS software and had infringed Cisco's patents for routing technology.
The case was eventually settled out of court with Huawei agreeing to change some of its router and switch products, but the dispute was an embarrassing moment for the Shenzhen-based company founded in 1988 by former army general Ren Zhengfei.
From infringer to patent pioneer
Since the US debacle, Huawei has become a lot more IP savvy and much of the credit for the Chinese company's progression from patent pariah to patent pioneer goes to Song Liuping, vice-president, chief legal officer and director of the company's patent committee. He admits that the Cisco lawsuit forced the company to raise its game: "Actually Huawei is always learning from western companies in terms of their operation and management of IP ... before the agreement we signed with Cisco we attached great importance to IP but after that we decided that we would like to put more effort in."
That effort has paid off. Earlier this year WIPO confirmed that Huawei was the leading user of the PCT system in 2008 with 1,737 applications published. The company is also increasing its clout in all-important telecoms standard setting bodies (see box). Song lists these developments as career highlights
Song Liuping joined Huawei in 1996, just one year after the company's IP department was formed, after completing post-doctoral research at the Beijing Institute of Technology in China, where he focused on electronics and communications. The company's IP department has grown rapidly under his supervision and now numbers around 240 people, enough for now, says Song. The economic crisis does not seem to have affected the company's filing goals: finance officers at the USPTO and EPO who are seeing their offices' incomes fall will be pleased to hear that the company wants to apply for more US and European patents.
Huawei's harmonious IP strategy
When Huawei took the top PCT filing spot, many people sat up and noticed China's drive to become more innovative. It coincided with the unveiling of the government's National IP Strategy, which aims to make the country one of the world's most innovative by 2020. Here was evidence that the country really is on the road to innovation. But although Huawei's PCT statistics are impressive, the company still has a long way to go before it approaches the 4,186 patents IBM had granted at the USPTO last year.
More important than how many patents Huawei is filing is what it intends to do with them when they are granted. On this point, Song is clear that Huawei is not (yet) about to start playing the enforcer. "Our patent portfolio is more like a business tool because Huawei is a company that favours peace and we would like to create a harmonious business environment, so we are developing patents to protect ourselves."
A question about plans to develop licensing revenue gets a similar response. "Right now most of our revenue comes from the sale of products. We have not looked into licensing revenue and we don't have a plan yet because Huawei is not an aggressive company in terms of IP. We just want to create a harmonious business environment."
That is not a response you would expect to hear from the chief IP officer of a US company. But behind the clichés about harmony is a company with an aggressive expansion policy that has worried many European and US rivals with its ability to develop and sell low-cost, innovative products.
Five years on from its problematic attempt to crack the US market, Huawei may finally be about to break America. The Wall Street Journal has reported that the company is in negotiations to build the network infrastructure for a mobile phone service that Cox Communications plans to launch in the US later this year and is also a contender to build Clearwire's 4G network.
Huawei's reluctance to enforce its rights may make good business sense for now. But if the company does decide to protect its patents more aggressively in the future, few would bet against Song and his IP team putting up a good fight.
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Seeking compromise over pharmaceutical patents
Margaret Chan Director-general World Health Organisation |
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As the WHO battles to cope with the first global flu pandemic in 40 years and improve access to medicines in developing countries, the organisation is becoming more involved than ever in IP issues. For her role in trying to balance the different views of IP in developed and developing countries, the organisation's director-general Margaret Chan makes her third consecutive appearance in Managing IP's Top 50.
In May this year the World Health Assembly (in a session cut short to allow members to prepare their countries for a possible flu pandemic) finally agreed a plan of action on public health, innovation and intellectual property. This commits the WHO to play "a strategic and central role in the relationship between public health and innovation and intellectual property within its mandates" and lists an ambitious series of aims for how it can help developing countries gain access to medicine and develop cures for third world diseases.
After the Assembly closed the WHO admitted that the resolution had only been passed "after intense debate". This focused on whether the WHO should be a stakeholder in a proposed treaty on R&D for diseases that disproportionately affect developing countries. Developing countries wanted the WHO involved, developed ones did not and rich countries got their way. While the final document is a carefully worded compromise, funding and implementing its conclusions will test Chan's negotiation skills still further.
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Driving the IP process
Wu Handong President Zhongnan University of Economics and Law |
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As an academic who has delivered "nearly 100" speeches on IP to officials in the Ministry of Commerce, the State Intellectual Property Office, the State Copyright Office and other government institutions, Wu Handong has a real influence on the way that the country's IP system develops. He has been president of Zhongnan University of Economics and Law for 13 years, serves as director of its centre for the study of IP rights and is chairman of the Intellectual Property Rights Law Association of the China Law Society.
"He is really driving forward the IP process," says Jack Chang, senior IP counsel, Asia, for GE and chairman of the Quality Brands Protection Committee. Chang described Wu as "open minded". But IP owners hoping that China strengthens its IP regime to a so-called TRIPs-plus standard may be disappointed. In response to questions from Managing IP, Wu said that the goal of IP in a developing country "is to meet the minimum standards provided in the international conventions". He believes instead that China should focus on improving its legal system "to build a strategy of judicial and administrative protection and focus on strengthening the leading role that the judicial protection plays".
Wu joins the ranks of outstanding IP academics who have helped develop China's IP system. Wu highlights the role played by the Zheng Chengsi (who appeared in Managing IP's earlier Top 50 lists but who died in 2006) in his own career, describing him as "one of the outstanding torchbearers of IP culture in China".
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Climate change activist
Martin Khor Director The South Centre |
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"Climate change is an emergency and it can no longer be business as usual," says Martin Khor, director of the Geneva-based South Centre. Just as owners of pharmaceutical patents have come under pressure from patients and activists over the past decade to provide greater access to medicines, now technology companies from those dealing with renewable energy and agriculture to car makers and the construction industry are facing the same challenges to their IP rights.
Martin Khor, an economist, journalist and campaigner, is helping to mount that challenge. He has spoken at UN-sponsored conferences in Bali and Bonn and at the EPO's annual conference on the role of IP in the fight against climate change, telling patent owners and policy makers that they must "think outside the box". To help them do so, Khor has put forward proposals that go beyond advocating a simple expropriation of patent rights. They include measures that would see a UN body manage patent pools covering green technologies so that manufacturers in developing countries could avoid the logistical difficulties involved in contacting and negotiating licences with a series of patent owners and instead have a one-stop-shop that would facilitate the dissemination of important technology where it is needed most. He also advocates the establishment of R&D funds supported by governments and philanthropists to support innovation costs incurred by companies for green technologies that would be excluded from patentability. Khor says that similar schemes are already working in the area of medical research for certain types of malaria.
Demand for these types of measures is already picking up political steam. At the climate change conference in Bonn in June, the Group of 77 countries and China called for climate-friendly technologies to be excluded from patenting and many individual countries demanded a rethink about the use of IP for green technologies.
Says Khor: "I am not saying that patents are the most important factor in tackling climate change, but in critical areas they can become a barrier, and to the extent that they are, that barrier should be removed."
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Pursuing Thailand's counterfeiters
Alongkorn Ponlaboot Deputy commerce minister Thailand |
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Trying to crack down on the sale of counterfeit goods is no easy task especially in developing countries where enforcement resources are spread thinly. This is particularly true in economic downtimes, when the interests of brand owners often take a back seat to politicans' desire to keep people in work. But Alongkorn Ponlaboot has not let economic conerns, or the political turmoil in Thailand, distract him from his mission to fight fakes.
Alongkorn, a member of the Democrat Party and MP since 1992, is vice-chairman of the National Committee on Prevention and Suppression of IP Rights Violations. He was behind a decision to crack down on the sale of counterfeits in Bangkok's Patpong district which led to unrest in the area in May this year. Patpong is one of several markets in Bangkok described by the US Trade Representative's 2009 Special 301 Report as "notorious for openly selling pirated and counterfeit goods". According to local media reports, the raid ended in a scuffle between members of the task force and vendors claiming that legitimate goods were being confiscated along with the counterfeits.
Alongkorn promised to investigate the actions of the task force but did not back down. "We don't want to turn this kingdom into the country which steals from and takes advantage of others," was his response. Part of the reason for the raid was to try and ensure Thailand is upgraded from the US's Priority Watch List to the Watch List next year. Alongkorn also revealed in February that the US and Thailand would resume negotiations over a free trade agreement (the US broke off earlier talks following the September 2006 military coup in Thailand). Negotiations were controversial at the time and will prove so again, with any IP provisions likely to come under close scrutiny from rights owners and activists demanding greater access to medicines in the country.
Alan Adcock of Tilleke & Gibbins in Bangkok said of Alongkorn: "In addition to his public efforts to crack down on the most conspicuous infringers in Bangkok, he's also pushing hard on IP law amendments for personal possession and landlord liabilities. Pretty impressive for an Asian IP officer."
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India's efficiency champion
PH Kurian Controller general of patents, designs and trade marks, India |
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Change comes to India's IP offices
Of all the obstacles to India's economic development, poor infrastructure is the most striking. First-time visitors to the country arrive at chaotic airports and travel on dilapidated roads and slow trains. In the same way, the poor performance of India's IP offices is slowing down the development of the country's IP ecosystem and hindering the rise of India's knowledge economy.
India has a confusing IP infrastructure to work with. The main patent office is in Kolkata, with other offices in Mumbai, Chennai and New Delhi. The main trade mark office is in Mumbai, with branch offices in Kolkata, Chennai, New Delhi and Ahmedabad. While facilities at a number of these offices have now been modernised, the work that goes on inside them is still criticised. Users cite delays, lack of expertise and corruption as the most serious problems. "This has been a much maligned IP office and for good reason," says Shamnad Basheer, a professor of IP law in Kolkata and founder of the Spicy IP blog.
To improve the situation, the Indian government appointed a new controller general of patents and trade marks on January 22 this year. It opted for managerial experience over IP experience by choosing a member of the Indian Administrative Service (IAS), India's elite class of civil servants. Every year between 60 and 90 new members are enrolled (Kurian is part of the 1986 class) from around 300,000 applications.
In the past, the controller general has come from the ranks of the IP office and risen through it to the top job. Many praised the appointment of an IAS man, claiming that it showed the increasing importance of IP issues for the Indian government. According to Basheer, Kurian "has more flexibility to do the reforms he would want than his predecessors".
Increasing efficiency, reducing corruption
He has certainly used that flexibility to the full. In the six months that he has been in the job he has issued regular circulars, memorandums and opinions setting out acceptable practice (see box). Reading them, you can almost see heads being banged together. The "shortage of officers, huge backlog and lack of well established office procedures" are the biggest challenges facing the IP office, Kurian told Managing IP.
He has two clear aims, the first of which is to improve efficiency. In February, an order divided examiners and controllers into four specific subject groups: chemistry and allied sciences; biotechnology and microbiology; mechanical and allied sciences; and electrical, electronic and allied subjects. This aims to prevent the problem of applications landing on the desks of examiners with no expertise in that area, who would then be reluctant to examine a patent they did not understand.
A desire to end so-called unhealthy practices (a euphemism for corruption), forms the second part of Kurian's agenda. Over the past six months he has moved senior staff between different offices. This is ostensibly to ensure that each office has staff covering all areas of expertise, but many suspect that the moves are also designed to end cosy relations between certain examiners and local patent and trade mark agents. Concerns about graft are not unfounded. Last year, for example, anti-corruption officials in India arrested the deputy registrar of the Trade Mark Registry in Chennai on suspicion of accepting a bribe of Rs10,000 ($235).
Putting words into action
This blizzard of circulars and the mass transfers of officials between offices, has been met with a degree of internal resistance. But Kurian is a man with a strong track record of administration in the Indian state of Kerala and he shows no sign of backing down: on June 23 he asked examiners to disclose whether they have relatives who are IP practitioners in a further attempt to reduce corruption.
"I think that right now he is really changing the system and he will have a huge impact," says Pravin Anand, partner of Anand & Anand in Delhi.
Prathiba Singh of Singh & Singh agrees. "As an administrative head he has, within a short span of time brought in immediate changes to bring in greater transparency and efficient working in the IP offices."
One challenge Kurian has yet to address is the lack of manpower at the Office. At present there are only 141 examiners and 33 assistant controllers battling an increasing workload. Part of the problem is that examiners are not paid enough, which has created a high turnover as the examiners move to more lucrative jobs at law firms or IP outsourcing companies. Kurian needs to find some way to raise examiners pay to make it a more attractive profession.
Reforming the notoriously bureaucratic world of Indian officialdom is difficult, but if he does succeed he will set an example for IP office heads in developing countries and will give a huge boost to the innovation economy that India's leaders want to achieve.
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IP coordinator
Lv Guoqiang Deputy director-general Shanghai IP administration |
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Many IP owners in China believe that Shanghai is home to the most sophisticated IP regime and some of the best courts in the country. That belief owes much to the dynamism of Lv Guoqiang. In 1994 he helped set up the IP chamber of the Shanghai Higher People's Court. As a judge he decided a number of high-profile IP cases that were selected by the central government for inclusion in its annual list of the country's top ten IP cases. These include his decision in 2005 that Xingbake's unauthorised use of Starbucks and the Chinese transliteration Xing Ba Ke amounted to trade mark infringement.
In October 2008, Lv helped set up the Shanghai Intellectual Property Arbitration Institution, which is the first of its kind in China. In December he was appointed chief judge of the first venue set up to handle anti-monopoly cases in China, hearing both civil and administrative cases.
Less than six months later he left that post to become deputy director of the Shanghai IP Administration, which oversees patent affairs and IP disputes involving foreign companies in the Shanghai municipality. Lv has been a senior international visiting scholar at Harvard University, the University of British Columbia and the Max Planck Institute for IP. He is tipped by many as a future director-general of the Shanghai IP Administration. "One of his priorities is to actively get involved in coordinating different law enforcement agencies," says Jack Chang, senior IP counsel, Asia, for GE and chairman of the Quality Brands Protection Committee.
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The new face of WIPO
Francis Gurry Director-general WIPO |
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What does the future hold for WIPO? While the Organisation has been efficiently providing global registration services through the PCT, Madrid and Hague systems and has become the leading venue for resolving domain name disputes, many practitioners and policy makers argue that its leadership on harmonisation and promotion of IP has suffered in recent years. Back-biting, vanity projects, lack of firm leadership and divisions between member states have reduced the visibility of the Organisation and led some to question whether it has a role.
Francis Gurry was elected director-general last year and immediately promised to reinvigorate WIPO, with a nine-point plan designed to address the 21st century challenges for intellectual property. The Australian, who has 24 years' experience in Geneva, highlighted the need for international cooperation and addressing IP in relation to global policy issues among his goals. Last month, member states confirmed his seven picks for the roles of assistant and deputy director-generals, so he now has his team in place to deliver change over the next five years. However, Gurry still has to convince those who did not support his candidacy (he won by one vote out of 83 in the final round) that his policies will satisfy the needs of all member states, especially those in developing countries. Moreover, with PCT and Madrid filings likely to fall as a result of the recession, he will probably have to deal with a reduced budget in the coming years. By the time his term ends in 2014, we will know whether WIPO has become a global leader in IP policy and debate or whether it has sunk to irrelevance.