The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government's earnings from trademark and patent applications nosedived by 44 percent over past decade as The Bahamas' "loss of competitiveness" on intellectual property safeguards intensified.

A Cabinet presentation on the proposed comprehensive overhaul to The Bahamas' intellectual property (IP) rights regime, dated December 5, 2023, blamed the country's failure to modernise these protections for the country's continued slide against rival jurisdictions despite previous administrations repeatedly pledging to undertake reforms.

The report estimated that "the revenue loss due to the absence of modern legislation is estimated at 200 percent annually", although it did not describe what the 200 percent referred to or give a dollar figure.

"Owing to the limited progress in modernising the legal framework for IP protection, government revenue from the IP sector over the past ten years remained stagnant," the Cabinet presentation confirmed. "The Registrar General's Department analysis showed the largest volume of IP work related to trademark applications and registrations, similar to most developed countries

"Revenues associated with trademarks and patents were estimated at $398,593 in 2012-2013, but by 2021-2022, they steadily declined to $224,049. Revenues associated with copyrights were estimated at $1,324 in 2012-2013, decreasing to $726 in 2021-2022. The non-commercial fee structure regime for licensing of IP, last updated in 2003, further erodes the IP regulator's revenue."

Analysing the wider impact, the Cabinet presentation showed the present IP regulatory regime has left The Bahamas non-compliant with its obligations under the Economic Partnership Agreement (EPA) trade agreement with the European Union (EU) that was signed around 15 years ago.

"The Bahamas joined the CARIFORUM/EU Economic Partnership Agreement (EPA) in October 2008 with the aim of increasing exports to the European market and diversifying the economy. Prior to joining, the legal framework for intellectual property (IP) in The Bahamas was outdated," the report added.

"In 2013, amidst efforts to diversify the Bahamian economy utilising new trade sources, new legislation was drafted to modernise and enhance IP protection. This legislation includes the Copyright Act, Patent Act, Trademarks Act and others. However, the legislation was never enacted." Thus potential export opportunities have also been nullified.

"Lack of modernisation has led to a loss of competitiveness in the IP sector and potential revenues for the Government and businesses," the Cabinet presentation added. "The updated legislative framework for IP was not fully enacted, remaining non-compliant with CARIFORUM-EU EPA and WTO (World Trade Organisation) guidelines.

"The revenue loss due to the absence of modern legislation is estimated at 200 percent annually. Weak domestic IP protection prompts businesses to seek protection in the neighbouring US and other international jurisdictions, further exacerbating the revenue loss."

Outlining the legislative package designed to transform The Bahamas' IP regime, which has been put out for public consultation until March 15, 2024, the Cabinet presentation said the Government's ambitions to unlock the full potential of the creative or 'orange' economy will not be realised without urgent reform.

"The World Bank estimated that the creative economy (orange economy) continues to be a significant source of employment and provided around 30 million jobs in 2020 globally," the report said.

"As outlined in the 2023 Speech From the Throne, a key component of the Government’s legislative agenda includes the enhancement of the creative economy through expansion of IP protection for entrepreneurs operating in the orange economy.

"The Bahamian strategy for improving the creative economy involves incentivisng creatives to protect their work, facilitating negotiation for international distribution. It also includes facilitating the use of IP as collateral for financing, introducing best practices, expanding to adoption and use of IP in The Bahamas by entrepreneurs and creatives, and preventing the abuse and loss of local creative material."

Pointing to the growing importance of IP globally, and as a source of wealth, the Cabinet presentation added: "Intangible assets constitute a crucial part of global value chains and production processes. From 2000-2014, intangible assets were estimated to account for one-third of company market values, double the contribution of tangible capital.

"COVID-19 and related health protocols caused significant challenges to global economies. Despite challenges, there was an innovation surge and increased value of intellectual property, contributing to global economic rebound....

"Global intangible asset value grew from $65.7trn in 2019 to an estimated $74trn in 2021. Recent research conducted by Angus Chu (2021) demonstrates a positive correlation between strong intellectual property (IP) protection and innovation."