elsewhere, but rather as active participants in an increasingly global economic system that could be driven just as much by emerging markets as established ones. While we recognize the institutional constraints that patent owners may face, and the fact that developing countries are lagging behind the developed world in fostering genuinely domestic innovation, we argue that there are ample opportunities for patent owners in developing markets to leverage their IP to promote economic growth. We suggest that the IP ownership divide may be closing, but that substantial differences persist in the extent of IP commercialization in various countries. Emerging markets that are becoming global leaders in IP ownership seem to lag behind in relation to the financial returns they are able to generate from their innovations. While bilateral licensing remains a valuable mechanism to extract value from IP, we posit that developing countries can capitalize on both market- and policy-driven IP monetization mechanisms in order to promote active technology markets. These include patent securitization, patent exchange platforms, public-private technology transfer initiatives, and public support in patent litigation procedures. A combination of institutional support and the adoption of alternative commercialization processes should help developing nations promote stronger technology markets and generate more financial returns from IP in the future.

The paper is structured as follows. In section 2, IMF licensing statistics are reviewed for a small sample of countries in order to increase understanding of the degree of IP commercialization internationally. Then, statistical evidence from the WIPO database on global patent stocks is used to demonstrate the growing ownership of IP in developing nations. The WIPO data suggests that the IP divide, defined as the gap in IP ownership between developed and developing countries, is gradually narrowing for the more technologically sophisticated developing countries. However, a significant divide persists in terms of IP commercialization. While this may be driven by differences in patent quality around the globe, we focus here on the relevance of IP monetization options in addressing this divide. Section 3 briefly outlines the key concepts of patent monetization and presents multiple case studies in order to identify some of the instruments available to commercialize IP assets. It explores the role of patent securitization, online patent exchanges, technology transfer offices and joint public-private funding, and finally the impact of public litigation support for small innovating firms. A final section concludes.

# **2. The Intellectual Property Commercialization Divide**

## **The Global Distribution of Licensing Revenue**

In order to get a more detailed picture of the global licensing landscape, a set of 22 countries was selected for analysis. The selection process sought to ensure that a variety of income levels and geographic locations were represented in the study.<sup>2</sup> This was done to provide a more differentiated understanding of the global licensing landscape. Accordingly, we included a range of high-income, middle-income and low-income countries in our study. The selection also sought to emphasize large emerging economies that represent significant international markets. Those

> 2 We recognize that the countries compared in this study are highly heterogeneous. This was done explicitly in order to capture the differences in IP monetization between a variety of nations from different income groups. Population, region, extent of economic liberalization, political and legal structure (among others) may influence the variation depicted in licensing balance of payments and patent ownership. However, absent more disaggregated data, we believe this approach still provides valuable insights into national differences across the international IP system.

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