Technological expansion highlights the need for intellectual property protection
Author: Ana Pepeljugoska, Chairperson of the AmCham IPR Task Force
*The article in Macedonian language, published by Kapital can be found at the bottom of this page.
Intellectual property is a dynamic domain, continuously faced with the challenges of modern times. New technologies, such as the Internet, user-generated content, streaming platforms, applications, online sales platforms, and artificial intelligence, pose unique challenges to intellectual property rights. These and other innovations not only significantly impact our daily activities but also greatly facilitate nearly every aspect of our lives. Moreover, new technologies accelerate the process of making new discoveries.
In other words, technological advancements generate significant value for individuals, states, and the economy overall. Therefore, it is crucial to develop and implement an appropriate legal framework that addresses current challenges. Concurrently, it is essential to enhance awareness about the value of intellectual property among all stakeholders.
Intellectual property refers to the creations of the human mind and is broadly categorized into two major groups: industrial property (which includes patents, trademarks, designs, geographical indications, and designations of origin) and copyright and related rights.
Authors, creators, and inventors produce works that are protected under intellectual property rights. Thus, it is no coincidence that the significance of individual work and creativity, as well as the legal protection of ownership, are constitutionally guaranteed in nearly all countries worldwide. Individuals are expected to respect, value, and protect the work of others just as they would their own, to ensure the protection of intellectual property rights.
Partner, Pepeljugoski Law Firm
It is important to recognize that the theft of an invention, something into which you might have invested an entire decade of work, is no different from someone stealing your car. If you are the next Tesla, your digital invention could be worth more than your car. However, we must also address the issue of digital piracy, a lucrative market for those who violate intellectual property rights. This is particularly true in the case of IPTV—the delivery of TV channel content over the Internet. Notably, illegal IPTV providers generate approximately €1 billion annually in the EU, causing significant harm to broadcast content creators and legitimate businesses. This represents a significant challenge both globally and in North Macedonia.
The intangible value of global brands
The intangible value of global brands is immense. Today, companies behind the most famous brands not only set global trends but also shape the culture in its broadest sense. According to the World Intellectual Property Organization, the value of the world’s largest 5,000 brands increased from 11 trillion US dollars in 2020 to more than 12 trillion US dollars in 2022, representing a growth of 14 percent. The continuous rise in brand value is also supported by a study from Interbrand, which has been ranking the top 100 brands globally for 35 years. According to its latest report, the most influential brands currently include Apple, Microsoft, Amazon, Google, Samsung, Toyota, Mercedes-Benz, Coca-Cola, Nike, and BMW.
It is important to note that a brand encompasses more than just a trademark; it includes the overall image of a company. For the companies behind the most famous brands, it is significant to acknowledge that between 70% and 80% of their capital is made up of so-called intangible assets, which include intellectual property rights. This is crucial because intellectual property not only serves as a source of income for these companies but also forms the basis for larger transactions, including mergers and acquisitions.
According to a report by the European Patent Office and the European Intellectual Property Office covering the period from 2017 to 2019, industries based on intellectual property were responsible for 29.7% of all jobs in the EU, employing over 61 million people. Additionally, these industries indirectly created another 20 million jobs through their supply chains, collectively accounting for 39.4% of all EU employment. Economically, these sectors generated more than 47% of the EU’s gross domestic product, amounting to €6.4 trillion, and made a significant contribution to the EU’s international trade, achieving a trade surplus of €224 billion.
In the absence of more recent statistics, for the Republic of North Macedonia, the contribution of companies based on intellectual property to the total gross domestic product in 2016 was 36%. This noteworthy figure highlights the growing awareness among domestic companies of the importance of intellectual property.
Citizens’ Perception of Intellectual Property
From the perspective of the citizens, the significance of intellectual property might not be immediately apparent, yet it is multifaceted. The ability to choose from a variety of products from different manufacturers—products that are tested, reliable, and safe to use—is a privilege that, unfortunately, is often underappreciated and overlooked by individuals.
A 2019 study conducted by the International Trademark Association (INTA) surveyed a broad range of respondents, predominantly from Generation Z. The findings revealed that 38% of respondents were uncertain whether the sale and purchase of counterfeit products should be prohibited, while 25% believed it should be allowed. Many respondents viewed counterfeit products as having functional benefits; they are cheaper and more accessible than genuine products, leading a significant portion of Generation Z to prefer saving money by purchasing cheaper products, even if they are counterfeit. This preference stems from the belief that famous brands should be accessible to the public.
It is important to note that the sale of counterfeit products is often linked to serious criminal organizations and illegal activities globally. Consequently, purchasing even seemingly insignificant counterfeit items can contribute to financing terrorist organizations and other illicit activities. Furthermore, the consumption of counterfeit medicines or the use of counterfeit products in areas such as technology, nutritional supplements, and cosmetics can pose deadly risks. A joint study by the European Union Intellectual Property Office and the OECD indicates that counterfeiting accounts for 6.8% of EU imports, equivalent to €121 billion, affecting nearly every sector including cosmetics, toys, wine and beverages, electronics, clothing, and even pesticides.
Educational campaigns to raise awareness
The impact of intellectual property is significant not only for businesses, but also for every individual citizen. This entails the need to raise awareness of the existence and need to protect intellectual property rights in our daily lives and daily activities.
Taking into account the fact that nowadays, with the rapid development of the Internet and artificial intelligence, the possibility of abuse of intellectual property rights is greater and such a process is simpler, continuous trainings, activities and campaigns to raise awareness among consumers and businesses are needed for the protection of intellectual property, but also for the value of intellectual property. In Europe, a campaign on the risks and harmful consequences of intellectual property violations has recently been launched and is expected to raise awareness of the importance of this topic, but this type of campaign is continuously present on the EU and global level. Let’s hope that our country will follow the example of European countries.