# **1. Introduction**

The TRIPS Agreement, by ensuring stronger intellectual property rights (IPR) regimes around the world, has globalized the IP system and stimulated greater cross-border trade in knowledge assets. Technology transfer, a term still not defined in the WTO framework, has come to be seen as the primary strategy for developing countries to gain access to much needed, but legally protected, knowledge assets owned in developed economies. It is not particularly surprising that the IMF’s Balance of Payment statistics show that most developing countries pay much more in licensing and royalty fees to third parties than they receive. The transfer of technology from the developed to the developing world through licensing arrangements is an important process that merits discussion. The role of technology transfer in development has received considerable attention (Teece 1977; Liu 1995; Bozeman 2000; Hewitt-Dundas 2011; Saggi 2002; Schrank 2004). However, while technology transfer remains a major issue in global economic governance debates, it is equally important to recognize the alternative IP commercialization techniques available to actors in both the developed and developing world. By recognizing these alternatives, developing nations may eventually begin to close the gap that prevails in IP commercialization globally.

As IP ownership grows, it is increasingly significant to identify the various mechanisms available to rights holders in developing countries to commercialize their intellectual property rights (IPRs). This study reviews several IP monetization strategies in order to emphasize the ways that IP can be used to generate domestic innovation and growth within developing nations. Essentially, we are asking: what methods enable developing country innovators to commercialize their technology within their own nation and abroad? In doing so, we explore the variety of IP monetization techniques that exist and assess the extent to which they promote active markets for technology in developing countries. IP defines a wide spectrum of rights including copyright, trademarks, design rights, patents and geographical indicators. Our analysis remains focused on patent monetization strategies. This is to retain analytical clarity and also because patents generate the most economic value globally. However, it is also important to recognize that these other forms of IP can be proactively developed and monetized through mechanisms such as securitization, licensing, and secondary markets.

This report outlines the different commercial tools available to innovators in the developing world in order to monetize patents and foster the diffusion of technology, thus attracting opportunities for joint ventures and other forms of international technological collaboration. This method contrasts with more common approaches that investigate how developing countries can attract Foreign Direct Investment (FDI) from Multinational Corporations (MNCs) through the enforcement mechanisms of a strong IP regime. Since academic research typically evaluates IPRs from an enforcement perspective, the role of IPRs in developing countries is primarily conceived through the prism of the influence of ‘weak’ vs. ‘strong’ IP regimes (Gould and Gruben 1996; James 2001; Lanjouw and Lerner 1997). While the rule of law is certainly a constitutive element of functioning markets, this research does not assess which policy reforms are needed to guarantee ownership over IPRs in developing countries. This question has already been extensively discussed in academic and policy circles (Maskus and Reichman 2004; Helfer 2004; Hassan et al. 2010). Instead, the focus of this paper remains on the mechanisms that promote uptake of patent monetization techniques. Accordingly, patent owners in developing countries are not conceptualized as passive receivers of proprietary innovation developed 2