Last week
OHIM, through the EU Observatory on Infringements of
Intellectual Property Rights, and the EPO, launched the first ever study on the contribution of
IPR-intensive industries to the EU economy. As OHIM´s
Chief Economist, my team and I worked closely with our EPO
counterparts to produce the report, so I read James Nurton´s blog post of last
week with interest. He raised some very legitimate
questions, and I´m happy to have the opportunity to
respond to them here.
James posed a twofold question about our definition of "IPR
intensive industries"; first of all, given that we define as
IPR-intensive those industries that use an above-average number
of IP rights per employee, are we not almost destined to end up
with half of all industries being IPR-intensive? The answer is:
not necessarily so, this depends on how skewed the distribution
of IPR intensity is among the industries. If a few industries
are very IPR-intensive and many are not, then the distribution
would be skewed and only a minority of industries would be
above that average. It appears that in the EU, this
distribution is fairly even.
Secondly, if half of all industries are IPR-intensive, James
wondered, then why do they account for only 35% of employment
(26% direct plus 9% indirect)? The answer is that there are a
few very large industries, mainly in the public sector, which
are by definition not IPR-intensive and which employ more than
50 million workers (out of a total of 218 million). If those
industries were kept out of the calculation, then the
employment share of IPR-intensive industries would be close to
half (in the 45% range), and their share of GDP would be more
than half. But we did not want to be accused of deliberately
inflating the contribution of IPR-intensive industries.
James asked how we selected the IP rights for this study
– the short answer is that we had to start somewhere,
and therefore chose to focus on the IP rights managed by OHIM
and EPO, i.e. patents, trade marks and designs, and copyright.
This also ensured comparability with the US study. Geographical
Indicators were added because they are important to certain
countries, regions and industries, and because we could obtain
data from the Agriculture and Rural Development Directorate
General in the European Commission. Other rights mentioned by
James could certainly be of interest, but those rights are
either not used in the same way across the EU or data are
difficult to obtain (eg trade secrets). In the future we hope
to expand the range of IP rights that we study.
In terms of the "quality" of IP rights, James’s
point is that some patents are more valuable than others, and
the same is true for trade marks, and that this fact needs to
be taken into account somehow. In principle we agree. It is
indeed correct that taking the quality of the IPR into account
was outside the scope of the study. It is a valid concern, but
even if it had been possible to deal with it, it would have
introduced additional assumptions and complexity into the
study. It was also important to use a methodology that was
similar to that used in the US study in order to arrive at
results that could be compared.
James asks about our sourcing of data from EPO and OHIM and
not at EU national office level. For this part of the study,
filing data is used simply to select the IPR-intensive
industries. It is a fundamental assumption of the study that
whether or not a particular industry is IPR-intensive is a
basic characteristic of that industry, independently of
geography. Therefore, it is safe to assume that if an industry
is trade mark intensive based on CTM applications, then this
industry would also be trade mark intensive if national trade
marks had been considered as well. Limiting the filings to EPO
and OHIM made the data matching exercise much less complex.
Finally, James’s question of whether the fact
that we counted NICE classes rather than trade marks inflates
the importance of trade marks relative to the other IP rights,
because of OHIM’s "3 for the price of 1" fee
structure. The answer is simple: the fact that we use classes
rather than applications as the measurement unit does not
affect the results because the average to which each industry
is compared is also calculated based on classes. So whether we
count classes or applications, the same industries would have
been identified as trade mark-intensive.
The high contribution of trade mark-intensive industries
simply reflects the widespread use of this IP right and its
broader applicability compared to the other IP rights.