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“Basis of competitive advantages”, an interview by Alexander Shumilin for Nauka I Innovatsii

“Basis of competitive advantages”, an interview by Alexander Shumilin for Nauka I Innovatsii

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“Basis of competitive advantages”, an interview by Alexander Shumilin for Nauka I Innovatsii

In recent years, many new industries appeared in the domestic economy, the driving force of which is an intellectual property. Accordingly, the unification and harmonization of its legal protection, as well as the improvement of the theory and the law enforcement practice, are required. Alexanderr Shumilin, Chairman of the State Committee on Science and Technology, Doctor of Economic Sciences, tells about what was done in this respect by the national legislator. 

Alexander Shumilin: ‘There is a legislation in the field of intellectual property in our country that meets all international standards, and there are effective mechanisms to promote the protection of industrial property objects. The system has reached a serious level of the development, but the State Committee on Science and Technology, together with the National Center for Intellectual Property, is constantly taking measures aimed at improving the existing legal regulation.  For example, in 2013 Belarus joined four international treaties. National laws “On Patents on Plant Varieties”, “On Trademarks and Service Marks”, “On Patents for Inventions, Utility Models and Industrial Designs” were substantially updated. Normative legal documents were harmonized with the legislation of the member states of the Eurasian Economic Union.

Taking into account such a constant work, the issue of preparing a single legislative act in this area is topical. The codification of the legislation is envisaged as one of the top-priority measures for the nearest period in accordance with the Resolution of the Council of Ministers of March 21, 2018, no. 208 “On Amendments to the Strategy of the Republic of Belarus in the Field of Intellectual Property for 2012-2020”.

Nauka I Innovatsii: ‘The results of the intellectual activity are an important component of the country's wealth and have recently been actively used and sold. Is there an objective valuation of industrial property objects and the necessary legal protection in our country? After all, when R & D products become available to foreign partners, there is a danger of economic damage.’ 

Alexander Shumilin: ‘Until recently, there were no special requirements for legal entities, individuals and individual entrepreneurs involved in the appraisal activity of industrial property objects. There were no single system of normative legal acts, including technical ones. These issues were comprehensively regulated by the provisions of the Presidential Decree no. 615 of October 13, 2006 “On Evaluative Activities in the Republic of Belarus”, according to which an independent assessment of the value of civil rights objects is carried out only by certified appraisers, which are individual entrepreneurs, or employees of an individual entrepreneur, or legal persons. The State Committee on Science and Technology jointly with the NCIP annually holds a training of such specialists and their attestation within the implementation of this document. In particular, last year their number was increased by 18 new employees, and in total 108 people are engaged in this field. 

The Republic established common methods for estimating and calculating the value of civil rights objects. It is envisaged to hold an examination of the reliability of these procedures.

Serious demands are made for the executors of the expertise: only regional and Minsk city territorial funds of state property, relevant local executive and administrative bodies, the National Center for Intellectual Property, as well as a legal entity that implements an evaluative activity for at least six years, can implement it.  At least five full-time employees for whom the organization is the main place of work must be included in the staff of such an entity. The Resolution of the State Property Committee of the Republic of Belarus no. 19 of October 6, 2016 “On Approval of the Rules of Professional Ethics of the Appraiser” was adopted to ensure public confidence in honesty, openness and professionalism of the appraisers and consolidation of their efforts to implement a quality work.’

Nauka I Innovatsii: ‘Which forms and methods are used to stimulate an intellectual activity in our country?’ 

Alexander Shumilin: ‘This process is constantly being improved. It is sufficient to say that the basic document regulating these issues is “Regulations on the Procedure and Conditions for the State Stimulation of the Creation and Use of Industrial Property Objects”, adopted on March 6, 1998, underwent ten editions over a twenty-year period and is now distinguished by a balance of norms that meet the interests of both the patent owner and the author.

New approaches that regulate the peculiarities of encouraging authors of individual objects, authors-managers, calculating the amount of remuneration, and new components of the system with the preservation of the principal provisions were introduced. One of the effective mechanisms motivating authors and business entities to create and commercialize the industrial property objects is the provision of appropriate tax incentives.

A special part of the Tax Code of the Republic of Belarus was adopted in December of 2009. Its regulations exempt from the VAT for the circulation of the implementation of property rights for copyright objects and related rights in our country; inventions, useful models, industrial prototypes, selection achievements, topologies of integrated circuits, secrets of production (know-how); results of scientific-technical achievements, the data on which is included in the State Register, as well as material objects related to these rights, if the implementation of these rights  for industrial property objects is accompanied by the transaction of these objects at the same time. 

According to the Regulations of the Decree of the President of the Republic of Belarus no. 216 of May 26, 2011 “On Measures on the Increase of the Efficiency of the Use of Intellectual Property Objects”, the institutions of science and education are entitled to create unitary enterprises that are able to introduce the results of their activities into circulation or to ensure their commercialization at the expense of their own revenues. When transferring property rights to official works of science, which are the exclusive right to which such organizations belong, authors receive remuneration in the amount of 40% of the funds earned under these agreements in the manner and under the conditions determined by them. The same guaranteed amount of payment is also determined for the authors of inventions, utility models, industrial prototypes, selection achievements, secrets of production (know-how), including ones created at the expense of the national budget. 

Measures to stimulate the introduction of service industrial property objects in the civil service are stipulated by the Resolution of the Council of Ministers no. 1184 of September 5, 2011 “On Some Measures to Implement the Decree of the President of the Republic of Belarus no. 216 of May 26, 2011”. An increase in the minimum amount of remuneration to the author for the commercialization of industrial property objects twice, from 15 to 30 basic units; payments for the creation and use of a patent (certificate) and the possibility of receiving funds for the use of the industrial property objects in the period from the filing of an application to the date of publication of information on the issuance of a patent or registration of an integrated circuit topology; encouragement of persons who promote the development of industrial property  are among them.

In addition, the legislator determined the minimum rates of royalties for the publication of works of science, literature and art, as well as additional incentives for authors of industrial property objects created in the process of implementation of innovation activities. 

Despite the seemingly complete staffing of the normative legal base, the work in this area does not stop. It is expected to further develop a set of financial, moral and other incentive tools that promote the creation and the use of intellectual property objects.

In 2017, the SCST prepared proposals on reducing individual patent duty rates by 30% and on establishing incentives for their payment for organizations accredited as scientific for inclusion in the draft Law of the Republic of Belarus “On Amendments to the Tax Code of the Republic of Belarus”. It was assumed that these institutions will be able to pay patent fees for committing legally significant actions related to granting legal protection to inventions, 25% of the established amount, as of January 1, 2018. Unfortunately, taking into account the decision to prepare a new version of the Tax Code this year, the proposals of the SCST have not yet been implemented, but we are going to re-initiate the inclusion of these proposals in the draft Law of the Republic of Belarus providing for a comprehensive adjustment of the Tax Code.’ 

Nauka I Innovatsii: ‘One of the main tasks of the legal regulation in the field of intellectual property is the involvement of intellectual property in the civil circulation. Which instruments are used for this?’ 

Alexander Shumilin: ‘The most common methods of the commercial development of the intellectual property are the transfer of rights to use it under a license agreement and the assignment of exclusive rights. Depending on the situation and focus of activities, the organization can choose the most optimal option for themselves. For example, the law provides for the possibility of concluding licensing agreements for the granting of an exclusive and non-exclusive license. The first is preferable when the firm is interested in the fact that no one else can use its products, but if this object of intellectual property is necessary for a wide range of producers, the most advantageous option is to conclude a contract for a simple license. In addition, based on its goals and priorities, the company has a right to conclude either a contract of assignment or a license agreement.

Licensing can be very beneficial in case of fixing payments as royalties. In this case, the licensor is guaranteed the possibility of receiving it before the end of the term of the protection document or contract. In case of assignment, the previous owner of the intellectual property object has a one-time fee in the established amount regardless of how successful the use of his product will be. 

It is impossible not to mention such an important electronic platform for the NCIP and interested parties as the Intellectual Property Exchange, where about a thousand promising inventions and commercial proposals are located. There is a necessary information, a methodical support and databases on the state of state registers of the industrial property objects.’ 

Nauka I Innovatsii: ‘What does the statistics of accounting contracts on the transfer of rights to the objects of rights of industrial property in our country indicates to?’ 

Alexander Shumilin: ‘The National Center keeps the State Register of License Agreements, Assignment Agreements and Agreements of Pledge of Rights for the industrial property objects of the Republic of Belarus. In 2017 their total number increased by 2.7% in comparison with 2016. A significant part was contracts on the transfer of rights to industrial property objects, 771, including 428 licensing ones, 258 contracts of assignment of rights to industrial property objects, 85 complex entrepreneurial license franchising) are among them. The share of license contracts in the total volume of the contracts registered last year increased and amounted to 55.5% compared to 2016. The number of license agreements on the transfer of the right to use trademarks increased by 20.4%, the agreements on plant varieties increased by 3.1%, utility models increased by half.It should also be noted that the share of franchising contracts in the total volume of registered contracts last year increased significantly and amounted to 11%. In 2016 it was  8.5%.’ 

Nauka i Innovatsii: ‘The system of intellectual property in the Republic of Belarus cannot be developed in isolation from the world organizations and patent offices of other countries. How is the international scientific and technical cooperation carried out in this area?’ 

Alexander Shumilin: ‘Primarily, it is aimed at the cooperation in the improvement of the legislative base, the development of the infrastructure, the introduction of new information technologies and training and retraining of specialists. Belarus is a party of 17 multilateral international treaties in the field of intellectual property operating under the auspices of WIPO. This organization renders a significant financial and technical assistance to the Republic in the development of the national intellectual property system, which is based on the indefinite Cooperation Program between the Government of the Republic of Belarus and the World Intellectual Property Organization, as well as the Memorandum of Understanding. WIPO and the National Center regularly hold consultations at various levels on a wide range of issues.

The NISC specialists are trained at the workshops organized with the financial support of WIPO and regularly attend sessions of the governing bodies of WIPO and its Standing Committees. There is an exchange of delegations, including at the highest level. Such a cooperation is highly valued by the Director General of WIPO. WIPO facilitates the organization of seminars, conferences, a celebration of innovators and initiatives for the use of industrial property objects of enterprises. The national seminar “Commercialization of the Results of Scientific and Technological Activity: Legal Regulation and Practical Experience” is significant in this regard. It is timed to celebrate the 25th anniversary of the intellectual property system in Belarus.

The WIPO awards were presented to Arkady Turtsevich, the best Belarusian inventor, and to the Institute of Heat and Mass Transfer named after A. Lykov of the National Academy of Sciences of Belarus,  the best domestic organization, as well as the awarding of the United Machine Building Institute of the National Academy of Sciences of Belarus with the gold medal named after V. Blinnikov “For Contribution to the Inventive and Patent Business” by the Eurasian Patent Organization within the event.A national seminar on enforcement of intellectual property rights and fighting counterfeiting and piracy in the digital environment was held with the participation of WIPO last October, which attracted the attention of many specialists and became a platform for discussing possible ways to improve the fight against offenses in the digital environment. 

Representatives of the National Center participate in the meetings of the Assembly of WIPO Member States and main standing committees and working groups of this organization. They actively work in the WIPO Committee by the program and the budget, the Standing Committee on Copyright and Related Rights, the Standing Committee on the Law of Trademarks, Industrial Prototypes and Geographical Indications, the Intergovernmental Committee on Intellectual Property, Genetic Resources, Traditional Knowledge and Folklore, etc. 

We appreciate WIPO's role in modernizing the technical infrastructure of the intellectual property of the National Center. The working procedures were updated and many of the NCIS operations were automated with the assistance of this authoritative organization. As a result, the quality of the rendered services and the professional level of the staff of the center upgraded. A significant contribution to the development of electronic management of IP was made by the introduction of the newest version of IPAS, an Automated System of Industrial Property, and the implementation of corresponding works on its implementation in Belarus. 

The deployment of IPAS will enable the center to reorganize workflows, business decisions and digitization of data. In addition, the Centers for the Support of Technology and Innovation designed to provide innovators with the access to the sources of the world and reliable technical information and other related services were established in our country under the auspices of WIPO.’ 

Nauka I Innovatsii: ‘Which other departments does the National Center for Industrial Property Protection interact with?’ 

Alexander Shumilin: ‘Our country exchanges patent documentation with 28 foreign countries, as well as with WIPO and the European Patent Office. Close contacts were established with the Eurasian Patent Organization. The NCIP staff regularly participates in the meetings of the EAPO Administrative Council, which discusses the prospects for the activities of the national patent offices of the EAPO member states, and the strategy for the development of regional units. A special attention is paid to the issues of training and retraining of specialists and proposals for rendering technical assistance from the EAPO. The employees of the National Center participated in the meeting of the Working Group on the Establishment of the Eurasian System of Legal Protection of Industrial Prototypes, in the training on the introductory course on the implementation of the Joint Patent Classification, and underwent an internship at the Eurasian Patent Office for organizing the electronic filing process.

In addition, a Memorandum of Understanding was signed with the Office of Intellectual Property of the Republic of Serbia in January of this year. It was also signed with the Cuban Industrial Property Office in August and with the Turkish Patent and Trademark Office in December. The last year was marked by the active participation of the staff of the National Center in the Negotiation Process on the line of the Eurasian Economic Commission, in particular on the conclusion of the Agreement on trade and economic cooperation between the Eurasian Economic Union and the People's Republic of China and the Free Trade Agreement between the EAEU and the Republic of Serbia.’ 

Nauka I Innovatsii: ‘What, in your opinion, are the prospects for the development of the international cooperation?’ 

Alexander Shumilin: ‘We are going to deepen the partnership with WIPO in the future, in particular, to create an electronic document management system and to develop intellectual property policies for universities and research institutions and seminars on WIPO's global services, as well as training seminars for TISC staff.  The employees of the National Center are supposed to participate in interregional training seminars and to upgrade their professional skills in other patent offices. In the coming years, the mechanism for exchanging patent documentation with other states, as well as with regional and international organizations, will be improved. The NISC specialists are expected to participate in the events held by the International Confederation of Societies of Authors and Composers. The National Center intends to consistently develop the cooperation with the CIS countries in the field of intellectual property protection on the basis of concluded intergovernmental and interdepartmental agreements. In addition, a number of visits to national patent offices and organizations abroad to exchange experience and strengthen cooperation in the field of intellectual property are in the schedule.’