- Economy 4.0 refers to a transition from an efficiency-driven to an innovation-driven economy characterized by digital transformation, new technologies, and globalization. Intellectual property plays a key role in driving innovation and economic growth under Economy 4.0. - Trademarks in particular promote innovation by enabling brand recognition and consumer choice, and extending commercial benefits beyond patent expiration. Strong trademark systems facilitate registration, commercialization, and enforcement of trademarks, benefiting businesses and economic performance. Counterfeiting has negative economic impacts by reducing sales and profits of legitimate trademark owners.

1. LAWPLUS 1
Importance and Impacts of
Strong Trademark Protection and Enforcement
on Economy 4.0
Kowit Somwaiya
Managing Partner, LawPlus Ltd.
APAA Interim Meeting on Importance of a Strong Protection of IP System
3 August 2017
Phnom Penh, Cambodia
www.lawplusltd.com
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2. LAWPLUS 2
Presentation Outline
• What Actually is “Economy 4.0”?
• Intellectual Property and Economy 4.0
• Trademark and Development of Economy
• Merits of Trademarks on Business and Economic Performance
• What Makes a Strong Trademark System?
• Negative Impact of Counterfeits
• Summary

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What Actually is “Economy 4.0”?
• No common definition of the term “Economy 4.0” agreed among countries all around the world
• But there are some general concepts of the term “Economy 4.0” as follows:-
1. Efficiency-driven economy to innovation-and-knowledge-driven economy
2. Rapid urbanization
3. Digital transformation and digital economy
4. New and refined material, gene, bio, renewable energy and nano technologies
5. Rapid change in demographics (in developed and emerging countries)
6. Globalization (economic networks, the flow of goods, services, finance, people etc…)
• "Economy 4.0" therefore describes the fact it is not only about “Digital Economy” and that digitization
will not only result in a change in industrial production, but also in all service industries and therefore
affect all areas of life. It also addresses the risks and social challenges in many ways.

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What Actually is “Economy 4.0”?
• The concept of “Economy 4.0” has been named differently among countries, e.g.
– USA: “A Nation of Makers”
– UK: “Design in Innovation”
– China: “Made in China 2025”
– Singapore: “Smart Nation”
– India: “Made in India”
– Republic of Korea: “Creative Economy”
– Thailand: “Thailand 4.0”

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What Actually is “Economy 4.0”?
• Common aimed results from the implementation of “Economy 4.0” strategy
– Higher revenue / higher GDP
– Increase of relative competitiveness of the country
– Expansion of market of goods and services
– More high value services
– Work a little but make big gains.
– “Less for More”
Efficiency-
Driven
Economy
Efficiency-
Driven
Economy
Innovation-
Driven
Economy
Innovation-
Driven
Economy

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Intellectual Property and Economy 4.0
• Intellectual property is an important tool for economy development.
• IP system has enabled the grant of property-like rights over new knowledge and creative
expression of mankind, which has made it possible to harness the commercial value of o
utputs of human inventiveness and creativity.
• IP system plays a significant role in helping business to gain and retain its innovation-
based advantage. The competitive edge that an entrepreneurial business may gain is lik
ely to be longer lasting.
• IP protection encourages creative intellectual endeavor in the public interest.
• IP system promotes fair competition in the market.
• Strong IP protection protects interest of consumers.

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Intellectual Property and Economy 4.0
• Intellectual property is a tool for development.
• “In the age of the knowledge economy, the efficient and creative use of
knowledge is a key determinant of international competitiveness, wealth creation
and improved social welfare.”
• “An effective intellectual property (IP) system embedded within a national
strategy which anchors IP considerations firmly within the policy-making process
will help a nation to promote and protect its intellectual assets, thereby driving ec
onomic growth and wealth creation.”
Kamil Idris
Former WIPO Director General

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Intellectual Property and Economy 4.0
Efficiency-
Driven
Economy
Efficiency-
Driven
Economy
Innovation-
Driven
Economy
Innovation-
Driven
Economy

9. LAWPLUS 9
Intellectual Property and Economy 4.0
• Examples of economic impact and advantages of IPRs on business performance
– In EU, companies that own IPRs have on average 29% higher revenue per employee
than firms that do not. SMEs that own IPRs have almost 32% higher revenue per
employee than SMEs that do not own IPRs at all. In terms of individual IPRs, the avera
ge performance premium experienced by IPR-owning companies is 26 per cent for
patents, 29 per cent for trade marks and 31 per cent for designs. (OHIM (EUIPO),
2015)
– Across Chile, Colombia, Mexico, Panama and Peru, trademark-intensive industries
generated 8% - 26% of total employment; and 10% - 21% of GDP. This is equivalent to
18.5 million jobs and a value added per person of US $2,390 annually. (INTA, 2016)
There is a strong positive relationship between
the ownership of different types of IPR and the business performance.

10. LAWPLUS 10
Intellectual Property and Economy 4.0
Source: INTELLECTUAL PROPERTY RIGHTS AND FIRM PERFORMANCE IN EUROPE, OHIM (EUIPO), 2015

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Intellectual Property and Economy 4.0
• Examples of economic impact and advantages of IPRs on business performance
– Intellectual Property and the U.S. Economy: 2016 Update (USPTO)
• This report identifies 81 industries (from among 313 total) as IP-intensive. These IP-
intensive industries directly accounted for 27.9 million jobs in 2014, up 0.8 million from
2010.
• The value added by IP-intensive industries increased substantially in both total amount
and GDP share between 2010 and 2014. IP-intensive industries accounted for $6.6
trillion in value added in 2014, up more than $1.5 trillion (30 percent) from $5.06 trillion i
n 2010. Accordingly, the share of total U.S. GDP attributable to IP-intensive industries i
ncreased from 34.8 percent in 2010 to 38.2 percent in 2014.
• IP-intensive industries directly and indirectly supported 45.5 million jobs, about
30 percent of all employment.

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Intellectual Property and Economy 4.0
• Examples of economic impact and advantages of IPRs on business performance
– The study of WIPO on the impact of the intellectual property system on economic growth in
Asian countries in 2007 shows as follows:-
• After the reform of the IP system, some economic data such as GDP, R&D
expenditures and FDI greatly increased in many countries (China, India, Japan, Korea,
Malaysia and Vietnam).
• In the fields of chemistry, pharmaceuticals and biotechnology, the introduction of patent
systems for substances has had an effect on the number of patent applications or
certain economic data such as trade in technology and R&D expenditures in some cou
ntries (India, Japan, and Korea).
• The relationship between the IP system and selected data related to IP creation and
economic growth has been quantitatively demonstrated.

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Intellectual Property and Economy 4.0
• Example: China
Source: Impact of the Intellectual Property System on Economic Growth: Fact-Finding Surveys and Analysis in the Asian Region,
Country Report – China, WIPO, 2007

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Intellectual Property and Economy 4.0
• Example: Malaysia
Source: Impact of the Intellectual Property System on Economic Growth: Fact-Finding Surveys and Analysis in the Asian Region,
Country Report – Malaysia, WIPO, 2007

15. LAWPLUS 15
Example: Thailand
20 Years IP Roadmap to Innovation-Driven Economy
2016
Enhancing efficiency
of registration and
protection of IP
Phase 1: 2017 – 2021
Improve Thailand’s IP system
to be more efficient to
facilitate IP owners by
reducing the procedure and
shortening the timeframe for
getting registration of IP
Phase 2: 2022 – 2026
Use innovation and IP assets as
main tools for creating added
value to goods and services and
increase economic
competitiveness of the country
Phase 3: 2027 - 2031
Thailand’s IP goes beyond
boundary to international market.
IPRs of Thai entrepreneurs and
Thai exporters are protected in
the importing countries. Thai
economy is driven by innovation
and IP.
Phase 4: 2032 – 2036
Thai people can create, innovate, own,
and commercialize IPRs with their full
potential so that Thailand can be
considered as “high-income country”
and “developed country” with
stability, prosperity and sustainability.
Thailand is the source of production
of creative goods, IP-based industries
and high technologies.
IP
Enforcement Creation
ProtectionCommercialization
Thailand is a stable,
prosperous, and sust
ainable developed co
untry
Source: The Department of Intellectual Property
Intellectual Property and Economy 4.0

16. LAWPLUS 16
Trademark and Development of Economy
• Is innovation only about invention or patent protection?
• There has been a misunderstanding of the term “innovation” and “invention”.
• In fact, “Innovation” is not only about “invention” or “technology”.
• Generally put, an “innovation” is developing a new idea and putting it into practice.
• The term “innovation” in the Economy 4.0 policy is used to refer to the process of bringing
valuable new products (goods/services) to market, i.e., from the idea/concept formulation st
age to the successful launching of a new or improved product in the market place, or the re
sult of that process, so as to meet the explicit or implied needs of current or potential custo
mers.
• In other words, through innovation an enterprise seeks to provide unique new value to its
customers.

17. LAWPLUS 17
Trademark and Development of Economy

18. LAWPLUS 18
Trademark and Development of Economy
• How trademark system plays role in Economy 4.0 and economic development in general?
– Trademarks play an important role in the marketing process, enabling consumers to
identify a product/services of a particular company and enabling them to distinguish the
products (goods/services) from others.
– Trademarks are a useful tool in launching new products segments or entirely new
products, technologically based or non-technologically based, i.e., through brand extension.
– Trademarks come with a reputation for quality, functionality, reliability and other attributes,
ultimately enabling consumers to exercise choice in their decision-making.
– Equally important, trademarks come with a certain image – whether for luxury, trendiness or
social responsibility which consumers care about, and which in turn influences which goods
and services they purchase. For companies, in turn, brands are valuable strategic assets an
d a source of competitive advantage.

19. LAWPLUS 19
Trademark and Development of Economy
• How trademark system plays role in Economy 4.0 and economic development in general?
– Trademarks can be very effective in penetrating new markets.
• Honda, for example, took advantage of its reputation in motorcycle engineering to
penetrate the US automobile market.
“Companies in all economic sectors – whether small or large, in more developed or less
developed economies – rely on brands when they commercialize their goods and services.
Trademarks – the legal incarnation of brands – are by far the most widely used form of regist
ered intellectual property.”
Francis GURRY, Director General of WIPO

20. LAWPLUS 20
Trademark and Development of Economy
• How trademark system plays role in Economy 4.0 and economic development in general?
– Trademarks are also useful in extending commercial benefits beyond the life of a
patent.
• The case of Aspirin® provides a good example.
– Knowing that patents have a limited duration, the Bayer Company embarked upon
promoting a trademark for its new product.
– When the Aspirin® patent expired, the company continued benefit from the sale
of aspirin through its established trademark Aspirin®.
– The Bayer Company has also used the two-tracked IP strategy, i.e., using a
trademark to protect market share after the expiry of a patent, for its Cipro® produ
ct (ciprofloxacin for treatment of infections, including anthrax).

21. LAWPLUS 21
Trademark and Development of Economy
• Comparing trademarks to other kinds of IPR
– Trademarks are the most widely used form of registered IP throughout the world. In
particular, many low- and middle-income countries see companies intensively filing for trade
marks, even if they make comparatively less use of other IP forms like patent. (WIPO, 2013)
.
– Through branding, companies can increase the demand for their products and enhance the
willingness of consumers to pay for them.
– Strong brand reputation – and at the extreme, outright brand loyalty – makes consumers
willing to accept higher prices, as switching to a competing brand would entail additional sea
rch costs.
– In certain situations companies may find it more profitable to differentiate themselves
through image/branding/trademark rather than through product innovation or invention.

22. LAWPLUS 22
Trademark and Development of Economy
Innovative/Technologically Based Firms
Source: WIPO Economics & Statistics Series: 2013 World Intellectual Property Report on Brands – Reputation and Image in the Global Marketplace

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Trademark and Development of Economy
Non-Innovative/Non-Technologically Based Firms
Source: WIPO Economics & Statistics Series: 2013 World Intellectual Property Report on Brands – Reputation and Image in the Global Marketplace

24. LAWPLUS 24
Trademark and Development of Economy
Source: Intellectual property rights and firm performance in Europe: an Economic Analysis, Firm-Level Analysis Report, OHIM (EUIPO), June 2015

25. LAWPLUS 25
Merits of Trademarks on Business and Economic Performance
• From the study of OHIM among EU countries, the highest revenue-per-employee increases
are linked to trademark-only and combined trademark-and-design owners: 30 per cent and
39 per cent, respectively (OHIM (EUIPO), 2015).
• A 10 per cent increase in the stock of European trademarks of a firm is associated with a 2.8 per
cent increase in revenue per employee, and a 10 per cent increase in the stock of national trade
marks is associated with a 5.2 per cent increase (OHIM (EUIPO), 2015).
• Economic growth, advertising and trademark filings are correlated. US advertising and trademark
filing activity is shown to move cyclically with the business cycle; indeed, in many countries these
two indicators are a leading indicator of economic activity (WIPO, 2013).

26. LAWPLUS 26
Merits of Trademarks on Business and Economic Performance
Source: WIPO based on data in the WIPO Statistics Database, the World Bank, and the WARC AdSpend Database used in Corrado et al (2013)

27. LAWPLUS 27
Merits of Trademarks on Business and Economic Performance
• The underlying relationship is plausible for several reasons, chief among them that, as
countries grow and develop from agrarian to dynamic innovative economies, markets ceas
e to be local. This is the result of improved infrastructure and, in particular, transportation sy
stems, increased economies of scale in production and greater product differentiation – all
within the context of economic development.
• This effect can be seen in the data for the Republic of Korea, for example. As the country’s
economic structure shifted to high-tech manufacturing and related exports from the late 198
0s onwards, branding increased as a share of GDP.

28. LAWPLUS 28
Merits of Trademarks on Business and Economic Performance
The evidence shows that
economic growth as
measured by real GDP per
capita goes hand in hand
with increasing branding
investments.

29. LAWPLUS 29
What Makes a Strong Trademark System?

30. LAWPLUS 30
What Makes a Strong Trademark System?
Creation
Registration
• Facilitate and support creation of trademark
• Create global value chain
• Educate the public of function and value of
trademark
• Use reasonable registration requirements
• Simplify the process
• Save time and costs // cost-effective
• Make it easier to manage registrations
locally and internationally
A strong trademark system should…

31. LAWPLUS 31
What Makes a Strong Trademark System?
A strong trademark system should…
Commercialization
Enforcement
• Make it easier to manage trademark
portfolios
• Increase tradability of trademarks and the
development of markets
• Help protect and exploit trademark assets
• Support trademark licensing and
assignment
• Provide effective and efficient enforcement
system
• Have good co-operation among government
authorities including customs officials
• Raise public awareness

32. LAWPLUS 32
Negative Impact of Counterfeits
• Direct impacts are the IP owners’ loss in sales, loss in good will, reputational damage, and
higher expenditure involved in protecting and enforcing IPRs.
• Indirect impacts include:-
– loss in direct foreign investment and miss out foreign know-how as foreign producers
become reluctant to manufacture their products in countries where counterfeiting is rife
– discouragement of innovation as counterfeits reduce the returns to innovation
– IP erosion and reduction of the range of products and services which, in the longer run,
effects economic growth operating mainly through the links between innovation,
technological progress and productivity (particularly severe in knowledge-driven econo
mies)
– job losses
– loss of tax revenue, especially from luxury goods (since the counterfeits are normally
sold through clandestine channels)
– the consumers of counterfeits paying an excessive price for an inferior product and the
consumers of authentic products paying for unfair competition.

33. LAWPLUS 33
Negative Impact of Counterfeits
• Indirect impacts
– health and safety risk, especially pharmaceutical products, electronics and goods
where the legitimate products are subject to the regulatory standards like food, bevera
ges and cosmetics
– supporting and financing other criminal activities and terrorism
– worker exploitation, child labor and dangerous working environment caused by
unregulated manufacturing
• For example, a large proportion of deaths through alcohol poisoning in Russia (17,302 in
2012) is caused by counterfeit products, which account for 30-40% of alcoholic beverages i
n the country (Kotelnikova, 2014).
• The WHO estimates that in some developing countries counterfeits comprise between
10-30% of the market value of drug sales.

34. LAWPLUS 34
Negative Impact of Counterfeits
“The unchecked growth of counterfeiting and piracy is an enormous drain
on the global economy. This illegal business activity deprives
governments of revenues for vital public services, forces higher burdens
on tax payers, dislocates hundreds of thousands of legitimate jobs,
discourage innovation and exposes consumers to dangerous and
ineffective products.”
ETIENNE SANZ DE ACEDO
CEO, International Trademark Association (INTA)

35. LAWPLUS 35
Negative Impact of Counterfeits
(globally)

36. LAWPLUS 36
Negative Impact of Counterfeits
Source: THE ECONOMIC IMPACTS OF COUNTERFEITING AND PIRACY, Report prepared for BASCAP and INTA (2017)

37. LAWPLUS 37
Trademark and Economy 4.0: Summary
• Intellectual property is a tool for development, especially for Economy 4.0. which is driven
by innovation and knowledge.
• There is a strong positive relationship between the ownership of different types of IPR and
the business performance.
• “Innovation” is not only about “invention” or “technology”. Generally put, an “innovation” is
developing a new idea and putting it into practice.
• Not only patent but also trademark system is important to encourage and protect
innovation.
• Trademarks are the most widely used form of registered IP throughout the world.
Companies in all economic sectors – whether small or large, in more developed or less dev
eloped economies, technologically- or non-technologically based, – rely on branding and tra
demarks when they commercialize their goods and services.

38. LAWPLUS 38
Trademark and Economy 4.0: Summary
• Branding investments affect consumer welfare and, in the long term, can influence the rate
of economic growth.
• Strong trademark system is necessary for Economy 4.0.
• Trademark system must be well-organized and supportive for trademark creation,
registration/protection, commercialization/utilization, and enforcement.
• Inefficient protection and enforcement of trademark will cause huge negative impact on
economy and society, especially when the economy is driven or to be driven by innovation
and knowledge.
• Strong trademark system will support, encourage and facilitate Economy 4.0
achievement and help making the economy grow more and more.

39. LAWPLUS 39
Q&A

40. LAWPLUS 40

41. LAWPLUS 41
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