Intellectual Property Rights Day

Good morning!  I am happy to be here with all of you today to join in commemorating World Intellectual Property Day.  In particular I would like to thank AmCham for organizing and hosting this event today.  I would also like to thank Mr. Popovic from the Ministry of Education and Mr. Djukanovic from the Ministry of Interior and our other speakers for joining us today.

World Intellectual Property Day marks the anniversary of the foundation of the World Intellectual Property Organization 47 years ago.  It is an opportunity to reflect on the value and impact of creativity, ingenuity, and innovation in all of our lives, but also what it takes to protect these virtues for the future.

I know that some, may think IPR is a boring bureaucratic exercise about rules and regulations.  Worse yet, some think it is something that only the rich and large corporations benefit from – a sort of real-life version of that famous Ray Charles song “them that’s got are them that gets, and I ain’t got nothin’ yet.”  And we see the effect in our daily lives.  Our kids here and in the States have become so accustomed to ready access to entertainment and apps via the internet that they don’t even see a moral qualm about downloading a film or song for free.  Otherwise respectable adults I speak with here in Serbia don’t even blanche when talking about the latest films that they “borrowed” on a DVD from a friend or bought at the local flee market for next to nothing – knowing full well it is counterfeit.

My first point for today is that it that IPR theft is just that:  theft.  It isn’t clever.  Or frugal.  It is robbery.

The second point is that it is untrue that protecting IPR only helps the rich and powerful.  In a study published last year, the U.S. Patent Office found that in the United States, IP-intensive industries employed nearly 28 million people in 2014.  That means nearly one of every five workers in the US puts food on their dinner table at night as a result of jobs in industries that depend on their intellectual property to thrive.  And that number is growing every day – at around 250,000 jobs each year in my country.  In addition, IP-intensive industries supported more than 17 million other jobs for people working in their supply chains.  So all told, IP-intensive industries contributed $6.6 trillion – not billion, trillion dollars – to U.S. GDP in 2014, or more than 18 percent of total GDP.

That may be true of the U.S., you might say, but what about here in Serbia?  Yes, it is true the United States may be farther down the road in terms of the importance of IPR in the economy, but Serbia is quickly moving up.  Mr. Vladimir Marić of the Intellectual Property Office of Serbia, who is here with us today, wrote in Politika last week that creative industries already account for 4.6 percent of GDP in Serbia – more than mining, and nearly as much as electricity.  As Serbia continues on its path to the European Union, I am sure that this percentage will continue to rise significantly.

Serbia, of course, has a long and distinguished history of innovation.  From Nikola Tesla to Mihajlo Pupin and Pavle Savić, Serbia has produced many world-renowned scientists and inventors.  The intellectual capital of these innovators and many others like them today, is one of Serbia’s greatest assets, and can be a tremendous force for job creation.  Protecting innovators’ work creates incentives for future innovation – after all, who would want to work hard to develop new ideas and products if others can simply steal them?  Here too, we have only to look at the lives of Tesla and Pupin.  Tesla is widely considered the greater inventor and visionary, yet he failed to protect his work, and died a pauper.  Pupin, on the other hand, scrupulously patented his inventions, and became a wealthy man.

In the United States, our companies learned long ago that innovation was a key to staying competitive in the global market, but investment in innovation is also an expensive proposition.  That is why we place great priority on protecting ideas and allowing those ideas to be transformed into marketable products.   This would be impossible if our companies could not trust the legal system to effectively protect their intellectual property.  And one of the first things many U.S. companies look into when considering a foreign investment is whether their intellectual property will be secure in the countries they are considering.  IP is their most valuable asset, and they are not willing to expose it to an environment where that asset is not protected.  Who can blame them?  This is why IPR protection is also a key element to attracting foreign direct investment, and improving the overall business environment.

A strong intellectual property rights regime is also fundamental if a country is to successfully foster an innovation-based economy.  Today, 70 percent of global economic output is generated by services, many of which depend on new and evolving technologies.  And there is a direct correlation between intellectual property protection and economic growth.  In fact, the World Economic Forum reported that the 20 countries perceived as having the most stringent intellectual property protection were among the top 27 countries in terms of economic growth and competitiveness.  In contrast, the 20 countries perceived as having the weakest intellectual property protection were among the bottom 36 countries.

IP piracy isn’t only a problem on a macro-economic level in a country.  It has a direct impact on individual companies: Piracy reduces revenue for the companies involved.  It affects the number of employees a company can hire, how much they can pay those employees, and how much the companies pay in tax.  In Serbia alone, one study suggested that a one percent reduction in piracy rates could result in 1,200 new Serbian jobs.

The economic rationale for improving the country’s IPR regime speaks for itself.  But there is another very important reason for Serbia to enforce IPR – it protects consumers from dangerous and defective commercial goods.  Some commonly counterfeited and pirated goods include prescription drugs, automobile parts, batteries, extension cords, electrical components, health and beauty products, and food products.  In Serbia and elsewhere, these counterfeit products can pose real risks to health and safety.  We want to be certain that the medicines we take, the food we feed our families, and the new brake pads we put on our cars are genuine products that will safely do the job.

Finally, let us not forget that IPR theft is now a global business for international organized crime networks.  These networks increasingly use counterfeiting and piracy as a low-risk, high-revenue means of financing other illicit activities.  Without strong IPR enforcement, infringers go unpunished and reap huge profits at the expense of public health and safety, as well as legitimate production and trade of goods.  Protecting and enforcing IPR helps eradicate these sources of financial gain for organized crime.

For all of these reasons, strengthening Serbia’s IPR regime is an important goal.  It is also an important part of the country’s European Union accession process.

And that is why I’m glad to be here today, alongside my colleagues from the Serbian government and the Intellectual Property Office of Serbia.  I believe that all of us want to see the Serbian economy continue to grow, the business environment continue to improve, and the Serbian people benefit from increased prosperity.  Protection and enforcement of intellectual property rights is a critical element in achieving these goals.

I look forward to continuing to work with all of you to build a stronger foundation for IPR protection in Serbia.  Thank you.