Originally from Investment Treaty Arbitration and International Law - Volume 11

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I. INTELLECTUAL PROPERTY IS THE NEW CASH

Intellectual property rights (“IPRs”) have long been recognized as catalysts of economic development and innovation.   The aim of intellectual property law is to protect intellectual property and thus to promote development through innovation and creativity.   IPRs are becoming more economically important than ever.   IPRs and other intangible assets often make up most of a company’s value, generate a large part of the profits in international business activities, and represent vital strategic assets.   Evidence from a number of countries suggests faster growth in investment in intangible assets than in tangible assets.   Not surprisingly then, the IPR owners have greater interest than ever in protecting their most important assets.  This includes interests in protecting intellectual property rights in foreign jurisdictions where IPRs represent important investments for IPR holders. 

However, protection and enforcement of intellectual property rights abroad is not an easy task.  IPRs are territorial in nature, and the IPR holders depend on local laws and judicial and regularity systems for creation and establishment of the IPRs in the first place, as well as for their enforcement and protection thereafter.  Thus, for example, a patent would likely depend on approval and registration in a given jurisdiction.  A trademark would normally depend on its commercial use or registration in a jurisdiction.  On local level, the legal framework for establishment, use and protection of IPRs varies across the jurisdictions.  Therefore, the IPR holders face inherent risks in foreign jurisdictions where they attempt to establish IPRs or put IPRs to effective and beneficial use.  Being created by the legal system of a given jurisdiction, IPRs are limited to the territory of that jurisdiction.