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IP Protection

IP Protection

Objective and perceived measurements can diverge considerably

“Intellectual property is the invisible infrastructure of innovation,” writes Michael A. Gollin in Driving Innovation: Intellectual Property Strategies for a Dynamic World (Cambridge University Press, 2008). Nowhere is that statement more accurate than in the field of biosciences. The capital and time invested in a new drug can only be recouped through strong IP Protection. Without that assurance, it is difficult to attract funding or convince ambitious scientists and business founders to take on the risks of pioneering research and development. 

In addition, IP protection can encourage foreign development of medicines for domestic needs. For example, a company may be inclined to abandon a drug lead if it cannot find profit-enabling markets for it. In prior issues of Scientific American Worldview, we have also shown that the strength of a country’s IP protection correlates with its concentration of clinical trials. Accordingly, IP protection can impact whether a nation’s scientists and physicians even play a role in global drug development, and if drugs will be developed for locally pervasive conditions. 

We measure IP protection both objectively and subjectively. “IP strength” is drawn from a study (Park, W.G. Research Policy 37, 761–766 (2008)) that calculates the unweighted sum of five measures: patentable inventions, membership in international treaties, duration of protection, enforcement mechanisms and restrictions (e.g., compulsory licensing). Recognizing that perceptions also influence investment decisions, and that the perception of a country’s IP protection might not match objective measures, we account for subjectivity with Schwab’s “perceived IP protection” metric (Schwab, K. The Global Competitiveness Report, 2014–2015. World Economic Forum (2014)). This index was created using feedback from a global group of business leaders when asked about their perceptions of domestic IP protection.

Although the United States comes in first in the objective measurement, “IP strength,” Finland, Qatar and Japan take the lead when the “perceived IP protection” metric is added to the calculation.

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