The 4th Annual IP Data & Research Conference: IP & Economic Growth

The 4th Annual IP Data & Research Conference: IP & Economic Growth

On March 11, 2021, I attended the 4th Annual IP Data & Research Conference organized by the Canadian Intellectual Property Office (CIPO) and the Centre for International Governance Innovation (CIGI). Following the opening remarks, keynote and Q&A on the importance of IP ownership in long-term sustainable growth, and a panel on Clean Technologies and IP, the event proceeded with a discussion about IP and Economic Growth. Elias Collette, Director of Business Improvement Services and Chief of Economic Research and Strategic Analysis at the Canadian Intellectual Property Office, introduced the topic. Elias emphasized the importance of economic growth in improving the standard of living for Canadians and introduced this panel’s two distinguished speakers: Robert Embree, Researcher at the University of Toronto, and Alissar Hassan, Deputy Chief Economist at IP Australia.

Robert Embree began his presentation with a brief description of industrial designs (ID) and their role in protecting the distinctive look and feel of an invention. He then highlighted industrial designs’ recent gain in prominence by mentioning the high-profile battle between Apple and Samsung over their design rights. An internal study conducted by CIPO has revealed that Canada is currently lagging behind many developed countries in protecting industrial designs. This finding sparked Robert’s statistical analysis of the effects of holding industrial designs on an average firm’s revenue per employee and net income per employee. The study was conducted using a unique Canadian data set obtained with the help of Professor Michael King of Ivey School of Business at the University of Western Ontario. The study covered 500 Canadian firms operating over the span of 25 years, from 1990 to 2014. It controlled for many factors, most importantly for the effects of obtaining patents on a firm’s revenue. The study found that by acquiring industrial design protections, the average firm’s revenue per employee increased by 19%, net income per employee increased by 23%, and, as a result of the addition of only 10% more industrial designs to the firm’s IP stock, the revenue per employee increased by 1%. The latter finding was particularly significant since the study found that a 10% increase in the number of patents that a firm holds only resulted in a 1.2% increase of revenue per employee. This study’s findings indicate that although patents tend to receive more attention in discussions about economic growth, Canadian firms could experience significant economic benefits by accumulating industrial designs.

After Robert, Alissar Hassan gave an informative presentation about IP rights and business profitability from an Australian perspective. An econometric analysis conducted by IP Australia on the effects of IP rights on market concentration and competition found that the use of IP rights has doubled since the early 2000s. The study also concluded that IP owning businesses tend to gain higher profits compared to their non-IP-owning counterparts, particularly in the manufacturing and wholesale trade sectors. Although the evidence regarding the effects of IP rights on market concentration was inconclusive, the study showed that accumulating different types of IP in the forms of patents, trademarks, and industrial designs tends to positively impact business profitability in Australia. Alissar brought up an interesting point about the effects of the COVID-19 pandemic on trademark filings in Australia. Although the correlation between GDP growth and annual trademark filings tends to be positive, trademark filings with IP Australia soared in 2020 despite the decrease in the country’s GDP as a result of the pandemic. Researchers at IP Australia attribute this interesting trend to the adaptation of businesses to the new circumstances and are looking to further investigate the topic.

The panel concluded with a Q&A session which once again highlighted the positive effects of industrial designs on business revenue. Given the findings by CIPO researchers regarding the work that Canada needs to do in order to catch up with other developed countries in protecting industrial designs, IP rights seem to play a more topical role in our country’s economic prosperity than ever.

Written by Bonnie Hassanzadeh, IPilogue Managing Editor and Clinic Fellow at the IP Innovation Clinic.