During the last few months, we have seen significant steps taken by the Cayman Islands Government to reform Cayman’s Intellectual Property (IP) Laws. These steps are the result of many months of investment, both time and financial, by government.
The main purpose of these reforms is to build on, and cement, the Cayman Islands as a growing hub for the development and commercial exploitation of IP.
What is intellectual property?
The World Intellectual Property Organization (WIPO) defines IP as follows: “Intellectual property refers to creations of the mind: inventions; literary and artistic works; and symbols, names and images used in commerce.”
Intellectual property rights are like any other property right. They allow creators, or owners, of patents, trademarks, design rights or copyrighted works to benefit from their own work or investment in a creation.
WIPO has said that: “An efficient and equitable intellectual property system can help all countries to realize intellectual property’s potential as a catalyst for economic development and social and cultural well-being. The intellectual property system helps strike a balance between the interests of innovators and the public interest, providing an environment in which creativity and invention can flourish, for the benefit of all.”
To consider the use and importance of IP rights globally, it is worth looking at some published statistics:
- According to WIPO, in 2014, there were approximately 33 million trade marks in force globally, and
- According to statistics portal, Statista, in 2013, the revenue from the licensing of IP rights in the U.S. alone amounted to approximately US$37 billion.
- According to the U.S. Patent and Trademark Office, “On April 11, 2012, the U.S. Commerce Department released a comprehensive report, entitled “Intellectual Property and the US Economy: Industries in Focus,” which found that intellectual property (IP)-intensive industries support at least 40 million jobs and contribute more than US$5 trillion dollars to, or 34.8 percent of, U.S. gross domestic product. The report went on to identify 75 industries (from among 313, total) as IP intensive.”
Why is reform important?
Cayman is developing and changing as a jurisdiction at a local level. More and more businesses are being established in Cayman in areas such as medicine, music, innovation and technology.
Cayman has traditionally focused on tourism and finance as pillars of the economy. In order to allow new industries to properly flourish and to increase more and more investment in these areas, a robust IP regime is needed to be able to support the intangible rights that flow from such industries. Consider copyright and brand (trade mark) protection in the context of creating and selling music, or patents in the creation of new medicines or medical methods.
It is only with a robust IP regime that creators of IP, be they brands or music or literary work or inventions, can seek protection of their rights, and then go on to exploit their rights through, for example, licensing.
Consider Cayman Enterprise City which boasts more than 180 tech and knowledge-based companies. Fundamentally, all of these companies will draw from an IP regime in order to be able to exploit their innovations. Consider also the U.S. Commerce Department’s report above which identifies 75 industries as IP intensive out of 313 industries looked at. Cayman opens itself up to all of these industries with a proper IP system.
A robust IP regime is also important in the process of attracting foreign investment and businesses. Cayman is an attractive place to house your business, and live, for lifestyle and tax neutrality, just to name two advantages. However a fundamental requirement for IP-intensive businesses and innovators abroad, that are looking to do business in Cayman, is to know that there is a robust IP system in place.
What are the reforms that are taking place?
The reforms cover all areas of IP in a stage by stage process.
In July, we saw an overhaul of the copyright laws in Cayman. This was by virtue of the Copyright (Cayman Islands) Order 2015 and the Copyright (Cayman Islands) (Amendment) Order, 2016 (collectively, the New Orders) which essentially, with some modifications and exceptions, extended the entire body of U.K. copyright law into Cayman and therefore fully modernized a copyright law that was vintage and insufficient in a technology driven world.
In October, lawmakers approved a series of new draft laws, namely:
- The Patents and Trade Marks (Amendment) Bill, 2016
- The Trade Marks Bill, 2016
- The Design Rights Registration Bill, 2016
In summary, the key changes for each of these rights are (1) for patents, the draft law proposes provisions to prevent the activities of patent trolls (patent assertion entities); (2) for trademarks, the drafts law proposes a new Cayman trademark system that stands on its own feet, and that is not reliant on first owning a U.K. or EU trade mark and then extending into Cayman (otherwise called, an extension system), and (3) a new design right in the Cayman Islands (which will initially operate as an extension system).
Each of these developments is an important step forward in the creation of a desirable hub for the development and commercial exploitation of IP.
The patent trolling provisions prevent the abusive use of patents.
The new stand-alone trade mark system is a significant and important development for Cayman because it will mean that businesses (both local and foreign) whose interests are more centered in the Americas and the Caribbean will be able to protect their brands without having to first consider registration in the U.K. or EU.
Finally, design rights are a new form of IP in Cayman although much used around the world, and accordingly an important addition to the IP regime overall. In terms of design right, WIPO says: “In a legal sense, an industrial design constitutes the ornamental or aesthetic aspect of an article. An industrial design may consist of three dimensional features, such as the shape of an article, or two dimensional features, such as patterns, lines or color.”
On the practical and processing side, the government has established the Cayman lslands Intellectual Property Office with its own dedicated website, filing system, personnel and technology. Separately, we have seen the launch of the Intellectual Property law gazette to stand alongside the normal Cayman gazette.
In conclusion then, as Cayman continues to grow, develop and evolve in an ever more advanced, diversified and technological world, the introduction of a robust IP system to support growth is welcomed and great news for the Island. This system is in keeping with Cayman’s place as a leader in robust regulatory and legal systems.
News Source: Cayman Financial Review