Saudi patent system set to fuel economy

The wealth of nations comes from cutting edge research and development (R&D), technology, innovation and knowledge.
In the Saudi system, we desperately need to create university TTOs (Technology Transfer Offices) in every university, to help them exploit their inventions for the common good.
They think the potential to boost the economy is huge, based on examples overseas throughout US, Europe and Japan over the last 20 years.
Currently, inventors lose out as they cannot protect their idea.
Businessmen lose out because they cannot protect their investments and Investors lose out because they cannot always find the technology to fit their needs.
As a result, the economy loses out.
But an economy based on the ideas in patents, best discoveries and innovations, captured by a TTO can transform the wealth of a nation.
Once the ideas are captured by the TTO and patents written by the lawyer, they can be cultivated in a ‘Bank of Ideas’ as valuable assets.
Physically, they are held on computers in the Saudi patent office.
They can help mobilize better business, with scientists writing them, institutions funding them and businesses making money from them.
Patents have several remarkable benefits:
(a) they stimulate the economy
(b) let people own what they create (
(c) allow money making by people, companies, universities and institutions who sell or license their ideas (d) motivates inventors and investors, scientists, entrepreneurs and youths, bringing a universal fruit for all
(e) brings additional foreign investment and revenue from abroad
(f) protects the loss of ideas not recorded on paper
(g) provides an intellectual foundation for the next wave of ideas
(h) condenses quality knowledge of making the product in superior form
(i) captures the work of the imagination
(j) and makes knowledge available for free, for everyone to learn from
(k) The patent system also promotes technological and business competition because patent holders disclose their inventions in exchange for exclusive exploitation rights. As a result, both they and their competitors race to improve those inventions and to use the technology to create new ones.
These advantages were recognized over 500 years ago: The tonic of patents first sprouted from Northern Italy as Venetian Law in 1474 to protect the inventions and rights of individuals. Then industrialization in the 19th century trade and rail investments, new ideals of government gave us modern patents, or intellectual property(IP) as we know it.
More recently, since 1990s, policy makers in US, Europe and Japan used patents to feed research and development, giving birth to new super products.
The growth has been startling, and continues to drive economic development: The benefits can apply to any country: Recently Brazil put a new IP law in place in 1995 to capture some of these benefits and is reaping huge economic rewards.
For example, foreign direct investment (FDI) lept from $ 4.4 billion in 1995 to $32.8 billion in 1996.
This came about because the 1990s saw policy-makers in emerging economic powers recognized the important role of the IP system in encouraging private investment in R&D, especially in industrial and scientific fields.
Many studies suggest a healthy IP system is a key element in encouraging FDI.
It could be argued the Middle East, similar to Brazil, has huge potential to climb up the ladder in todays global economy.
The benefits can also touch any industry — consider these case histories.
In 1896, Sakichi Toyota obtained a patent for a version of a power loom which resembled machines previously used in Europe.
Thirteen years later, Sakichi succeeded in inventing an automatic loom and a number of additional patents were obtained to
complement and fine-tune the invention.
In 1924, the Toyota Type G Automatic Loom reached the market and Kiichiro Toyota, Sakichi’s son, reached an important agreement with Platt Brothers & Co. for its commercialization.
Platt Brothers paid Toyota £ 100,000 (equivalent to $ 25 million today) for the exclusive right to manufacture and sell the automatic loom in any country other than Japan, China and the US.
Toyota decided to use the £ 100,000 as initial capital to set up an automobile company and fund the necessary R&D.
Azithromycin — one of the world’s best-selling antibiotics, from Croatia
Pliva, one of the most profitable companies in Croatia and one of the largest pharmaceutical companies in Central Europe, is widely considered to be Central Europe’s first home-grown multinational.
Once struggling to stay alive, this company witnessed a dramatic turnaround in its fortunes, following its discovery of azithromycin — today, one of the world’’s best-selling antibiotics.
Patented by Pliva in 1980, the drug was subsequently licensed to Pfizer, which markets it as ZithromaxTM. Sales of ZithromaxTM were $ 1.5 billion in 2001.
The phenomenal revenues derived from the licensing agreement have facilitated Pliva’s rapid expansion across Croatia, Poland, and Russia.
Remarkably enough, all this came about because Pfizer’s scientists happened to stumble upon Pliva’s patent in 1981, while searching through patent documents at the US Patent and Trademark Office (USPTO).
Dr. K. Anji Reddy founded a pharmaceutical company in India that has rapidly expanded to provide high-quality, low-cost pharmaceutical products to markets worldwide.
Dr. Reddy’s Research Foundation (DRF) was established in 1993 with the purpose of discovering new drug therapies. It attributes much of its success to patent protection, through which it is able to market and license its new drugs internationally.
The foundation has filed patent applications in several countries for all its inventions, including 31 product patent applications in the US, of which 17 have already been granted.
In India, 110 product and process patent applications have also been filed. Because patent protection is central to its activities, DRF has established an in-house intellectual property management group to oversee all international patent filings and matters relating to patent strategy.
Boobras — Biotech JV and University Research in Brazil
Biobras was a small, independent laboratory within the Federal University of Minas Gerais, Brazil, when it began its activities producing enzymes under a licensing agreement with the US-based New England Enzyme Center.
In 1977, with the assistance of the Brazilian Ministry of Health, Biobras negotiated a joint-venture agreement with patent holders and pharmaceutical multinational Eli Lilly for the production of animal insulin and its commercialization in Brazil. As part of the cooperation agreement, Biobrás personnel were trained by Eli Lilly in various aspects of R&D as well as in administration and marketing. By the time the agreement with Eli Lilly ended, six years later, Biobrás had become an important insulin manufacturer utilizing state-of-the-art technology.
Since then, Biobras has also engaged in research, leading to an important breakthrough in the field.
The company is now one of only four pharmaceutical companies — and the only non-multinational — to have the capacity and the technology to produce human recombinant insulin.
The technology was developed by Biobras in collaboration with the University of Brasilia and was subsequently patented in Brazil, Canada, Europe, and the US.
There are many other examples and I have no doubt they could be a ‘fuel’ for the middle eastern economy too:
But why should we make these changes now in the Middle East? Custodian of the Two Holy Mosques King Abdullah, in his speech, in 2011 went beyond mere technical excellence, and confirmed a quantum change of thinking and culture to a knowledge based economy: This is not more computers and information technology, but a focus on the highest level of human attainment: The creation of knowledge itself as documents and patents. They will emerge from a new generation of universities and technology transfer offices, set up to fuel the nation. In this new world we recognize we cannot live on commodities alone, but need to diversify.
The move to knowledge-based economy makes us sustainable for centuries, for millenia, as a fountain of ideas to emerge from our humanity, from our youth and so on.
We can reveal the changes will not happen overnight but build as a series of small step changes, toward a knowledge-based economy that cultivate patents. Inventors, investors and policy makers need to be prepared move with these changes: For example, there will be more reliance on intangible assets ie “hidden value” based on knowledge, typically absent from the business balance sheet. “Hidden value” is on the increase: it was 38 percent in 1982, rising to 70 percent in 2000. Today, patents are the most valuable commercial asset: For example PricewaterhouseCoopers in 1999 found global IP licensing generated more than $ 100 billion.
The wave will also see the commissioning of a National IP strategy that is integrated with scientific cultural trade economic and education policy, with incentives and awards for inventors and organizations that use patents.
This will stimulate foreign investment, benefiting all our business transactions
How can we be convinced patents work? It turns out the Japanese decided to look for that very important evidence. They commissioned a study in 2007 to look for a correlation between economic growth and patents.
This was a fact-finding survey and analysis of the Asian Region including Japan, China, India, Korea, Malaysia and Vietnam. Was it observable, demonstratable? The answer was a definitive yes. A definite correlation of patents and their policies to economic impact. Intellectually this all makes sense: The power of patents is in the words of a famous economist Paul Romer who said “it is the accumulation of knowledge that drives growth’. And confirmed by one of our greatest scientists, Albert Einstein who said “imagination (ie what patent inventions capture) is more important than knowledge.”
The implications for the Middle East over the next five to 10 years are profound.
If we look at patent count now, Saudi Arabia has a very small percentage 1x% alongside the maximum 100x% managed by other economies.
Hence growth potential is much greater than any other country, thus the opportunity for substantial impact to our economy is breathtaking. Our government has certainly done its homework.
Looking to the coming 21st century, the Middle East will have the infrastructure for patents and a ‘bank’ of ideas, so scientists and engineers are motivated to discover and file patents, while business men secure they own the money making idea fund the projects, so money flows and ‘brakes’ finally come off our economy.
All this is possible by adding more TTOs to our universities and supporting them with the right policies, the right infrastructure and the talent of our nation. Please work with them — support them.
— Hayat Sindi is a Shoura Council member