State Program

Approved by the Decree of the Government of the Kyrgyz Republic 

  September 23, 2011 No 593 

State program for Intellectual Property and Innovation Development in the Kyrgyz Republic for 2012-2016  content

I.  Introduction

– Topicality of the State Program

– Destination of the State Program

II.Analysis of the current situation

– International situation

– Social-economic situation in the Kyrgyz Republic

– Intellectual Property system in the Kyrgyz Republic

III. The main problems to be resolved by the State Program
IV.  The purposes and tasks of the State Program
V. Risks at the State Program realization
VI.  Resource support
VII. The stages of realization
VIII. Monitoring and assessment
IX. Conclusion

 

I.  Introduction

 

            Topicality of the State Program development 

The modern challenges and threats have activated a need of the national economy diversification by means of search and identification of innovative development ways. In conditions of limited resources the Intellectual Property (IP) System and Innovation development is one of the most effective tools for competitiveness rising of the economy.

President of the Kyrgyz Republic repeatedly has underlined a necessity to transfer economy on innovative way of development.

Nowadays the world economy is mainly based on knowledge, i.e. generation, dissemination and use of knowledge are the main drivers of growth, national wealth creation and employment. Traditional methods of macroeconomic policy have not been able to solve tasks of economic growth. Macroeconomic stability is only one element of environment, necessary for innovation. However, there is a wide spectrum of opinions on the extent of public policy penetration out of macroeconomic policy frameworks. There is also a significant gap between theories of economic recommendations and the realities of political practice. It should also take into account that conditions of catching-up technological development are changing rapidly and the past practice today might be unable to work. In view of all these factors it is necessary to critically examine the policies that are considered as promoting competitiveness and especially development of innovation, taking into account national peculiarities.

Nowadays in the Kyrgyz Republic the efforts should be directed to encouraging of intellectual creativity among not only separate companies, but the whole state.

At the present stage the economic development of any state is defined by such important factors as internal resources and integration of the country into the world economic system. The crisis in the field of innovative development is marked by outflow of skilled specialists, reduction of R&D, lack of innovative products and other negative factors. Search of possible ways of the crisis overcoming demands more effective functioning of IP system. Assignment of the IP system effectiveness in the Kyrgyz Republic in context of world-wide trends in this sphere demonstrates insufficient level of the system functioning.

Fruits of intellectual activities are able to provide high profit to holders, but size of this profit depends not only on potential of intellectual property subject matter but also on readiness of developers to exploit them efficiently. Unfortunately many innovative developments today still to be unused or to be realized ineffectively. Successful commercialization and knowledge capitalization are based on market volume, its stability and conditions to product new technologies, goods and services. For the situation amelioration it should realize  programs and projects on introduction of inventions, innovations, researches, informative and communicative technologies etc. In order to make this policy successful, it should have a long-term perspective and wide support of various stakeholders.

The State Program for development of IP system and innovations in the Kyrgyz Republic for nearest years is determined by a necessity to create the effective system of intellectual and innovation activities, which could be able to transform a research potential of the country into one of the main sources of stable economic growth and could provide technological modernization of the economy, arising its competitiveness in the world. 

                          Destination of the State Program 

Formation of the national system of intellectual and innovative activities, based on creation of right market for IP subject matters, is one of conditions to ensure high competitiveness of the country.

The State Program is aimed at establishment of strong economy of our country based on knowledge, encouragement of investments into innovations realization and entrepreneurship.

The State Program is designated to provide the further improvement of legal and normative bases, perfection of procedures for legal protection granting to intellectual property subject matters, level rising of rights protection for IP subject matters, formation of public patent fund, promotion of intellectual creativity and commercialization of IP subject matters.

Another main task that needs to be resolved within a framework of the State Program is suppression of turnover of counterfeit and pirate goods, reduction of “piracy” level on territory of the country, especially regarding counterfeit pharmaceuticals and food productions, which threaten to life and health of population. In the recent Agreement on combat against counterfeit production (“Anti-Counterfeiting Trade Agreement (“ACTA)”)” signed between a several developed countries this global issue of the major importance was approved unanimously.

                       II. Analysis of the current situation

International situation

         Developed economy of such countries as Japan, the USA and European countries ameliorate rapidly their indexes of the IP system and take all necessary measures helping enterprises to realize fully their potentials and perfection of knowledge penetration from R&D environment for create new products and services on the market. The similar policy in this sphere is implementing by such countries as China, India, Brazil, Taiwan and South Korea. In our region among the CIS countries a trend also exists to support innovations by IP use in strategic line. The Kyrgyz Republic adheres these world wide tendencies, too.

International organizations as the World Bank, the International Monetary Fund and the World Trade Organization include applying of IP in their programs as important component of development. 

Social-economic situation in the Kyrgyz Republic

Kyrgyzstan is a landlocked country of limited natural resources and insufficient developed business sector. Limitation of external and internal transport communications, in aggregate with a small internal market put obstacles in the way of development of economic infrastructure.

Economy of Kyrgyzstan does not possess a sufficient capability to smooth over consequences of negative processes on world financial and trade markets. Ability of Kyrgyzstan to respond adequately to increasing external economic challenges is the important condition of economic development. The main problem consists in insufficiently developed competition in different economic sectors. Economy of Kyrgyzstan loses industrial component, it has considerable disproportions, as in branch as in territorial structure. Existing economy structure in oriented basically to agricultural production, extraction of mineral raw, services rendering. It is not innovative, does not suppose to create knowledge and technique oriented branches. Economy has insufficient rate of saving for perfection of basic capital, for potential of structure changes realization in favor to innovative, technological branches of economy. Economy of Kyrgyzstan in every key branch has technological dependence on other countries.

Strengthening of Kyrgyzstan’s position in the world demands the intensive development of priority branches of economy. For functioning of the most important branch as power system, all technological equipment is imported from abroad. Absence of own innovations, stable technological dependence of Kyrgyzstan result not only competitiveness reduction, but also put barrier for higher indexes of social economic development achievement.

Agriculture of the country uses elite seed material, pedigree cattle, agro technologies and equipment developed and manufactured in other countries. The country has partially lost achievements of previous generations on growth of proper high productive pedigree cattle, zoning elite seed of main agricultures.

Existing level of science development and scientific achievements of Kyrgyzstan do not satisfy sufficiently the needs of social economic development of the country. During independence years the country has partially lost accumulated scientific potential. Despite of quantitative growth of officials, concerned in researches and developments, results of such researches do not display a high scientific value of the best world achievements and do not apply in economy of the country. Scientific personnel refreshes slowly by young scientists that leads to succession lost. The outflow from the country is going on of high skilled specialists.

At present time the society does not consider science as the most important factor of economic development and scientific activities as prestigious, deserving a high financial support. Activities of researchers and developers are focused not at universities, but in Academy of Science and now universities should restore their status of researching organizations.

In the near future it is expected that the state will give more consideration to the spheres of construction, public health and transport. Though it is important to draw attention to the long perspective. The future success of the Kyrgyz economy will provide the foundation for stability and a recognized place in the world community and depends on the country exploiting its existing and potential knowledge in the creation and growth of new businesses. This was the message in the Inaugural Speech of President Otunbayeva. It was also the clear focus of her opening address to the High Level Donors Meeting in July 2010 when she spoke of the need for economic competitiveness and the institutional capacity to sustain this. Nowadays the Republic occupies the 44^th place in the World Bank’s rating of business conditions. If we intend to attract investments we should raise this index, including development of innovative economy.

Intellectual Property System 

Reliable system of IP legal protection creates an environment where technical innovations and creative activities would prosper. Undoubtedly, the legislative base, meeting international standards, is necessary for creation of such environment. The great work has been realized in the Republic for this purpose: 14 laws in this field were developed and adopted, as well as corresponding norms of codes – Civil Code, Criminal Code, Customs Code and on administrative liability. According to adopted laws more than 100 subordinate regulatory acts (regulations and rules) were developed and entered into effect, determining relations by every IP subject matter. In whole the legislative base has been developed in accordance with international norms and may be considered as rather progressive.

The first former USSR country Kyrgyzstan signed the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). At entry of the Kyrgyz Republic into the World Trade Organization (WTO), legislation on IP was developed, taking into account standards of volume, use and protection of IP rights, which are based on the TRIPS regulations.  

International cooperation plays the special role at developing of the IP system in Kyrgyzstan. At present time the Republic is a member of the World Intellectual Property Organization (WIPO), International Union on New Plant Varieties (UPOV), Eurasian Patent Organization (EAPO), Interstate Council on the Protection of Industrial Property. Nowadays the KyrgyzRepublic has jointed to 23 multilateral international treaties in the field of IP, as well as a series of bilateral interstate and interdepartmental agreements.

The state self-financing body has been created which realizes the single policy in the field of IP. Financial independence is very important, it permits to the Office to be more efficient and rational. This advantage is acknowledged in many countries and patent offices have already received such independence. The State Service of Intellectual Property and Innovation under the Government of the Kyrgyz Republic (hereinafter referred to as Kyrgyzpatent) has become an interlink between the state, business community, scientific circles, creative unions and other stakeholders; it also realizes the active work to provide the rights protection for IP subject matters.

         III. The main problems to be resolved by the Strategic Program

Realization of the state program “Intellect”, intended for 2010 was the first stage of IP system development in the Kyrgyz Republic. Formation of normative legal base in the field of IP, establishment of the Office and providing of legal protection to IP subject matters resulted from this Program realization.

However there are a series of undecided problems which impede development of IP system and transformation into the effective resource for economy development. Low level of IP subject matters application does not permit to increase financial return for business and investors, preventing technologies transfer from research center to the market.

Reforming and modernization are needed of the whole IP system and its management. It is necessary to create a favorable environment for innovators and inventors, encouraging of commercialization of research and creative activity results, as well as assistance to growth of successful innovative enterprises in the Republic.

The problem of economy modernization by means of effective use of IP subject matters and innovations still remain.

The next problem consists in ineffective application of legislation and wide distribution of counterfeit production from abroad as usually. Foreign and Kyrgyz right holders are often faced with problem of their brands, trademarks counterfeit and copyright infringement. Pirate production is present today in numerous markets of consumer goods – from audiovisual production to medicines and food products.

Norms of the acting legislation regulate certain aspects of combat with counterfeit production; however these norms are not unified for different counterfeit IP subject matters. Legal proceedings and norms of civil-legal, administrative and criminal liabilities have to be agreed; the turnover of counterfeit production does not entail any amenability, the institutional structure for counteraction is not formed.

The special problem consists in absence of systems and mutual coordination of executive bodies, obliged to execute controlling functions and suppress the turnover of counterfeit production. It should be noted an insufficient level of interdepartmental cooperation between the key players in IP system weak qualification of specialists on IP issues and low level of society’s acknowledge about importance of IP. The turnover of counterfeit and pirate production creates a specific environment where corruption and criminality may prosper with no worry threatening to health and welfare of citizens and reducing taxes to the national budget.

One of the weak aspects of the existing IP system is its peopleware and therefore it is necessary to reinforce measures on preparation of specialists in the field of IP, including courts, law machinery, research organizations and other public bodies as well as small and medium enterprises. Not only experts are needed for the country in the field of IP, but also economists, managers and marketing specialists skilled in IP issues.

Despite of indicated problems there is a potential in the country for R&D development, innovative and creative activities realization. Moreover there is a wealth of traditional knowledge as a basis for new technologies creation, promoting the regional progress.

IV. The purposes and tasks of the State Program

The State Program comprises detailed action plans for the following main priority lines:

–      Creation of a favorable environment for innovative activity development and use of IP subject matters;

–      Assistance to economy modernization by means of more active advanced technologies transfer;

–      Raising awareness and understanding in society of the role and significant benefits of IP;

–      Creation of effective system of rights protection for IP subject matters.

 

The main task of the State Program is encouraging of economy development by means of inventive and innovative activities perfection. It determines the main tasks and priorities aimed at conditions creation for transformation of research potential to one of principal resource for stable economic growth and technological modernization.

For put principal goal achievement the following focuses will be stressed:

1. Environment formation for creation and use of IP subject matters.
2. Awareness arising of the society on role and significance of IP.

One of the important tasks is stimulation, support and activation of intellectual creativity, by inventive and innovative activities encouraging, as well as active involving of youth into the sphere of scientific-technical creativity and introduction of the course on IP in educational programs.

It is necessary to resolve tasks of effective realization of IP subject matters, promoting increase of output for business and investors. The State Program will provide a series of measures implementation for technologies transfer from R&D centers to the market, importing of foreign advanced technologies for modernization of domestic economy and provision to consumers new products and services.

The next determined priority task is the perfection of normative legal base, regulating issues of legal protection of IP subject matters. It is necessary to insert some alterations and additions into the Criminal and Civil Codes of the Kyrgyz Republic, the Code of the Kyrgyz Republic “On Administrative Liability”, as well as into the Laws in the field of IP. These alterations should be aimed at level reduction of infringements in IP sphere, including level of counterfeit and pirate production, imported on the territory of the Kyrgyz Republic.

The issues of skill arising in IP sphere among law machinery and court bodies are not the least of the factors, as well as effective interaction providing between public bodies to prevent and suppress infringements in the field of IP.

IP products and innovations development in the Republic regions is also one of the main tasks of the present State Program. For this purpose realization a number of concrete measures shall be provided to create favorable conditions for innovative activity development in the regions, to render assistance to business circles at information and potential business partners searching, including training for representatives of small and medium business to receive economic benefits thanks to innovations use.

It seems to be important to develop informational policy for awareness arising of the society on role and significance of IP and resulting benefits.

The State Program realization is due to promote the following:

–      creation of the country’s image as a constitutional state ensuring protection of IP rights;

–      improving of legislative base in the field of IP according to international norms;

–      organizational and administrative development of procedures of rights granting for IP subject matters;

–      cooperation development between all interested parties;

–      establishing of environment where IP permits to innovators and creators to increase economic profit of their work and the country’s economy as a whole, observing interests of business, researchers, creators and community, securing economic competitiveness;

–      awareness arising of the society on importance and benefit of IP;

–      use widening of IP as financial assets;

–      increase of the Kyrgyz Republic’s influence on the IP system development on regional and global levels. 

V. Risks at the State Program realization 

There are objective and subjective factors, which influence to successful realization of purposes and tasks of the State Program. To minimize risks and condition providing for its successful realization the evaluation is necessary of possible risks and treats. Among these factors are the following:

– insufficient support from the Government;

– nonparticipation in the State Program realization of public bodies and business community;

– absence of financial support at projects realization;

– ineffective application of donors’ and partners’ resources.

It is to be noted that the following actions should be executed to avoid existing treats:

–      implementation of “Round Tables” and public discussions; broad lightening of the State Program and its realization in mass-media;

–      development of stable relations with ministries and offices, public organizations and business community on political and executive levels;

–      involving of donor organizations at every stage of development, application and monitoring of the State Program.

For prevention or removal of above mentioned treats it is supposed to make some actions. Effective system of monitoring and assessment will permit to track difficulties and obstacles at the State Program tasks realization.

VI. Resource support

Realization of the present State Program does not provide a targeted financing from the state budget. Kyrgyzpatent, as a body, responsible for the State Program realization, will attract its own resources, as well as donors’ and partners’ financial means. It is expected a support from international organizations in form of consulting, technical and other assistance.

The following resources are necessary for successful execution of the State Program:

General budget of the State Program  (thousand soms)
Year	Realiza- tion of the State Program	Project “Law School”	Project “Counterfeit Production”	Project “Traditional Knowledge”	Project “New generation of inventors”	Project “SMEs”	Total
2012	13398.1	342.75	921.9	7389.4	3579	397.9	26029.05
2013	11971.1	342.75	921.8	7389.3	3578.9	397.8	24601.65
2014	14359.7		921.8	7389.3	3578.9	397.8	26647.5
2015	4101.6				3578.9		7680.5
2016	3956.5						3956.5
Total	47787,0	685.5	2765.5	22168	14315.7	1193.5	88915.2

 

Realization of the State Program actions demands 88 915200 (eighty eight million nine hundred and fifteen thousand and two hundred soms.

The WIPO, as co-developer of the present State Program, will provide a support in form of methodical and consulting aid. The decision on opportunity a support providing in the field of business, public management and education was made in the course of recent Donors’ meeting on the higher level.

(The Decree of the KR Government of November 11, 2013 No 623)

                   VII. The stages of realization 

In general the State Program will be realized by two stages: the first (2011-2012) and the second (2013-2015).

The first stage (2011-2012) will be connected essentially with realizations of the events of preparatory character. For the State Program successful realization it is assumed to insert alterations and additions into the acting legislation of the Kyrgyz Republic, as well as development of new laws, skill arising of specialists.

The second stage (2013-2015) will be the period of active realization of planned events in the frameworks of the State Program.

        VIII. Monitoring and assessment of the State Program realization

The State Program realization will be implemented by means of Action plans. The system of monitoring and assessment of the State Program was developed, containing the concrete measurable results. Public organizations and independent institutions may be attracted in the process of monitoring. Kyrgyzpatent is the basic body for monitoring.

It is proposed to form the Commission of high level, composed of Kyrgyzpatent officials along with representatives of interested parties for monitoring and assessment of the situation on the base of monthly reports of the State Program realization, which will be posted on the website of Kyrgyzpatent. This Commission will give reports every quarter on the corresponding political level, determined by the Government of the Kyrgyz Republic.

Regular meetings with interested parties, including business community and NGOs will be carried out regularly.

                            IX. Conclusion

The following positive results will be achieved in the end of the State Program realization in the Kyrgyz Republic:

–      formation of the environment for creation, use of intellectual activities results and realization of technologies transfer;

–      increase of inventive activity and application of its results into the economic turnover;

–      growth of students and youth number involved in scientific technical creativity;

–      amelioration of the country’s image as constitutional state, providing protection of IP rights;

–      creation of the system for interaction against counterfeit production turnover, threatening life and health of population;

–      awareness arising of the society on the role and significance of IP;

–      portion increase of innovative goods and services in gross domestic product of the country that will allow to the Kyrgyz Republic being competitive and promoting its national interests on international arena.