Globalisation: Outsourcing-Emerging Opportunities for IPR

Interactive Conference on Interactive Conference on Doing LPO Business in IndiaDoing LPO Business in India

2222ndnd April 2007 April 2007Le Meridian, Andheri East, MumbaiLe Meridian, Andheri East, Mumbai

Dr. D. R. AGARWAL (Director)

ITAG Business Solutions Ltd.

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WHAT IS GLOBALISATION?

The first era of globalisation (1850 – 1945) was Pax Britannica under ‘gold standard’ and the second phase (post second World War) is Pax Americana under

‘Bretton Wood System’

GLOBALISATION

FREE MOVEMENT OF SERVICES

FREE MOVEMENT OF GOODS

FREE MOVEMENT

OF TECHNOLOGY

FREE MOVEMENT

OF CAPITAL

Globalisation is an ‘Umbrella’ term defined precisely by IMF as the

growing economic interdependence of countries worldwide through

increasing volume and variety of ‘cross-border’ transactions in goods and services, ‘free international capital flows’ and more rapid and

widespread diffusion of technology.

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WTO AGREEMENTS

ANNEX IA TRADE IN GOODS

GATT 1994+

TWELVE AGREEMENTS

ANNEX IBTRADE INSERVICES

ANNEC ICTRADE IN

INTELLECTUALPROPERTY RIGHTS

AGREEMENTESTABLISHING

WTO

Final Act

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World Population & GDP 2005 (Unequal World)

3433 1.77 78517.131103India

391110.15 45061.99 128Japan

8182 5.02 222920.301307China

11724 30.29134467.15 460EU-25

11190 28.06124554.61 297USA

55167100.044385100.06438World

GNI-$ (PPP)

GDP

(%)

GDP – US$ Bn

Population (in %)

Population in Million

Source: World Development Report 2007,World Bank and World Fact Book, 2005 USA

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Sectoral Analysis Of GDP (2004)

Source: World Development Report 2007

5341687768SERVICES

19 13114AGRICULTURE

2846312228MANUFACTURE

INDIACHINAJAPANUSWORLD

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World Trade In Goods And Services (2005)

100.012535Total

19.32415Trade in Services

80.710120Trade in Goods

PercentageUS$(Million)

Source: World Trade Report 2006

Why Globalisation

New opportunities to developing countries

Greater access to developed country markets

Technology transfer lead to improved productivity

Higher living standard

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Tools of Globalisation

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• Consumers are the king, they drive the business.

• Globalisation is a win-win situation for all countries involved• Comparative advantage is a driver of globalisation

• No country is self-sufficient in a resource• In-house in-capabilities is one of the causes for outsourcing

• Lack of highly skilled domestic engineering and technology labour

Genesis of Outsourcing

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Supplier Presence Other Criteria Mode

Service supplier not present within the territory of the Service Consumer

Service delivered within the territory of the Member from the territory of another Member (e- Commerce,BPO)

MODE 1 - CROSS-BORDERSUPPLY

Service delivered outside the territory of the Member, in the territory of another Member, to a service consumer of the Member

MODE 2 - CONSUMPTION ABROAD

Service supplier present within the territory of the Service Consumer

Service delivered within the territory of the Member, through the commercial presence Branch Office etc.

MODE 3 - COMMERCIAL PRESENCE

Service delivered within the territory of the Member, with supplier present as a natural person on temporary basis

MODE 4 - MOVEMENT OF NATURAL PERSON

Mode of Services under GATS

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Economic Resources

20

16

64

Human ResourceNatural ResourceCapital Resource

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MERITS FOR OUTSOURCER

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MERITS FOR OUTSOURCEE

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India’s position in outsourcing

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Emerging Opportunities for

IPR

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Total Wealth, 2000- $ per capita & percentage shares

Source: World Bank Study

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Various types of IPRsMinimum standards as per TRIPs

Type of IPRs Subject Matter Duration of Protection

Patent (Paris Convention,1883 refers to Stockholm Act of 14.7.1967). Patent Law Treaty & Patent Cooporation Treaty

New, Non-Obvious (Invention) & Industrial Applicability

20 Years from the date of Filing

Copyrights & Related Rights (Berne Convention,1886, Paris Act of 24.7.1971) (Rome Convention recognised on 26.10.1961)

Authorship, Artistic Performance, Phonogram & Broadcasting

Life of the Author plus 50 Years(India 60 yrs)

Trade/Service Marks Signs or Symbols to Identify Goods & Services

7 Years from Initial Recognition & for each Renewal (Indefinite)

Industrial Designs Ornamental, designs for Clothing, Automobiles, Electronics etc

10 Years

Integrated Circuits & Layout Design (Washington Treaty recognised on 26.5.1989)

Original Layout Designs

10 Years

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IPR Services• Mergers & Acquisition – IPR Audit• IPR Valuation• Inventory of the Company’s IPR• Portfolio Analysis• Financial Reporting• Diligence of Investors• IP Watch• Patent Claim Mappings• R & D Taxation Credit Support• Document Writing• Prior Art Search• Patentability• Patent Application Drafting & Filing• Licensing of IPR

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WORLDWIDE PATENT FILINGS

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PATENTS GRANTED WORLDWIDE

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TOP 20 OFFICES OF FILING

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RESIDENT PATENT FILINGS PER MILLION POPULATION

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PATENTS GRANTED BY OFFICE

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Investments in R&D by American Companies as a Percent of GDP, 1953-2000

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Source: Intellectual Property in a Global Economy – Michele Boldrin, David K. Levine

Challenges in

IP IndustryIncreasing market

size & specialisationAttrition

Assuming IP Protection constant

– Increase in rents of IP protected labor

– Decrease in the rate of innovation

Scarcity ofPatent Agents Corruption

Growing protectionism

In outsourcing companies

Lack of Coverage for

liability and risk

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Future is Outsourcing• A new way to leverage skills and markets

• Win-win situation: for DCs and ICs: productivity, competitiveness, higher employment, faster economic growth– every dollar of outsourcing creates $1-45-1-47 of value of which

the US captures $1.12-1.15 while India gets only 33 cents• Outsourcing ‘industry’: to exceed $1 trillion by 2006

• Total savings from global outsourcing:– to grow from $6.7 bn (2003) to $20.9 bn (2008)

Developing countries’ gains: $60 billion in ITES by 2008

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Tomorrow’s slogans

• Tomorrow’s societies will be knowledge societies. • Tomorrow’s markets will be knowledge markets. • Tomorrow’s wars will be fought with the new

thermonuclear weapons called information and knowledge.

Every Indian trying to be a Knowledge worker

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Business Opportunities…

Strong potential….there is need for visibility

Only the tip of the ice berg can be seen …there lies a huge potent mass to be explored

Visibility !!!

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“It is not the strongest of the species who survive, nor the most intelligent, but thosewho are most adaptive to change…”

-Charles Darwin

Darwinism

Who will Survive?Who will Survive?

04/20/23 35THE JOURNEY NEVER ENDS

THANK YOU