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1、MARCH 2024Copyright 2024 International Trademark Association.All rights reserved.No part of this publication may be reproduced,distributed,or transmitted in any form or by any means,including photocopying,recording,or other electronic or mechanical methods,without prior written permission of the cop

2、yright owner,except in the case of brief quotations embodied in critical reviews and certain other noncommercial uses permitted by copyright law.Table of Contentsp.4 Executive Summary p.7 Introduction and Methodology p.10 Project Team p.11 Section 1Identifying a Recession p.26 Section 2Financial Imp

3、act of Recession p.41 Section 3Understanding/Preparing for Potential Impact on Trademark Practitioners p.50 Section 4How Stakeholders use Technology in times of Recessionp.74 Appendix 4IP IN TIMES OF RECESSIONIn compiling the data for this report,we have gained a comprehensive understanding of the 2

4、020 recession,primarily driven by the unprecedented COVID-19 pandemic.The pandemics global economic repercussions were substantial,leading to widespread shutdowns,disruptions in various industries,supply chain issues,and a sharp stock market decline.We have also identified key indicators commonly us

5、ed to recognize a recession,including GDP fluctuations,unemployment rates,consumer spending patterns,business investments,and stock market performance.These indicators can help us gauge economic health and anticipate potential economic headwinds.Internally,INTA has consulted with J.P.Morgan to asses

6、s the current economic climate,with the latest report indicating mild recession-like conditions in early 2023.J.P.Morgans analysis relies on the National Bureau of Economic Analysis six-factor test,considering personal income,employment,spending,wholesale/retail sales,and industrial production.Their

7、 assessment suggests mild recessionary headwinds,distinct from the full-blown recession experienced in early 2020.Furthermore,we have outlined ways to recognize a recession,and the potential impact on intellectual property(IP),which can be distinct from broader economic trends.These include fluctuat

8、ions in IP filings,licensing and litigation activity,changes in IP portfolio management,increased IP theft and infringement,and shifts in IP-related investment across different industries.The data reveals that recessions can take various forms,with the COVID-19 recession serving as a unique example.

9、The response of the IP system during this recession demonstrated its adaptability and resilience,as it played a critical role in overcoming the crisis through public and private investments,trade secrets,patents,and IP licensing.As we move forward,it is essential to remain vigilant and closely monit

10、or changes in IP-related activities,as they can provide early indications of a recessions impact.Different regions and industries may respond differently,as demonstrated by the data,making it crucial for organizations to adapt their IP strategies to navigate the challenges and opportunities presente

11、d by recessions.Better IP reporting and improved IP accounting standards would help companies,including SMEs,gain access to funding,which is generally harder in times of recession,especially for companies that rely on intangible assets.Accounting standards should not require a blanket exclusion of t

12、rademarks and complementary IP that are developed in-house from recognition as assets on corporate balance sheets.Companies are focusing on predictable legal budgets.Therefore,it may be preferable for companies to use fixed-fee deals.Executive Summary5IP IN TIMES OF RECESSIONLaw firms may help gener

13、ate revenue by helping distressed businesses seek creative methods of resolving ongoing debt issues.It is important to recognize the sectors that are affected by recession comparatively more and help them prioritize their legal work.During economic downturns,companies and individuals may consider en

14、forcement of their IP rights as a source of funding that could lead to compensation or licensing deals.Law firms should encourage their clients to partner in IP endeavors.For example,collaboration with other companies or universities could help cut the costs of R&D,overhead,and payroll in return for

15、 a shared revenue.It is advisable for companies to revise their strategies for entering new markets/jurisdictions,if any.Licensing from a local company instead of making an investment during unpredictable times may be more beneficial.Law firms may help distressed companies review their IP registrati

16、ons,identifying the core rights and perhaps abandoning the remainder(or offering them for transfer/license to another company),which would cut annuity costs and thereby cut administrative costs for monitoring.Not all IP rights are aligned with business interests that are relevant in the moment.This

17、may also require the review and sale of businesses that are a liability rather than a benefit.Recessionary times may also be the best time for acquiring IP from companies in need of cash flow.Law firms may help distressed companies review their IP rights and help them to determine whether all their

18、rights are registered,consider whether they need to be registered and,if so,whether they can still be registered in light of grace periods.Because a lot of local companies see IP registration as an unnecessary expenditure,they may be missing an opportunity to gain revenue from their unregistered rig

19、hts.A recession impacts IP in many ways,including the budgets allocated by companies to protect and enforce IP rights,investment in technology relevant to IP assets,staffing of in-house legal teams and within IP departments in law firms,and the sale and purchase of IP assets.The direct impact of a r

20、ecession is that budgets are reduced across businesses,which decreases the funds available to protect,maintain,and enforce IP rights.Companies are likely to focus on core brands and core markets and less likely to oppose third-party marks or file cancellation actions.Budget restrictions are also lik

21、ely to deter business owners from litigating over IP assets.During a recession,law firm teams may invest more in technology to increase work product efficiency.Our research indicates that legal tech spend within in-house departments increases in times of budget crisis.Merger and acquisition activity

22、 tends to decline before a recession.However,companies that have the resources to invest may reap the benefits as our research also shows that companies that make acquisitions during a recession are likely to see better shareholder returns in the long term.Overall,a recession tends to reduce the inv

23、estment in maintaining and protecting IP assets but leads to greater investment in legal tech to gain efficiency in tough times.Executive Summary6IP IN TIMES OF RECESSIONTechnology could be an especially important tool to help the IP community to weather the impact of recession.This seems to be a co

24、nsistent finding in both the external reports and our original research conducted through this Project Teams survey in 2023.Implementation of legal tech solution for in-house use seems to bring the highest result although,sharing of the IP data between the clients and the vendors,as also between mul

25、tiple vendors becomes problematic.Currently,there doesnt seem to be a cost-effective solution to this lack of technology“harmonization.”In-house practitioners lack the time to prioritize this,while law firms find it a technical and resource burden.Online infringement is typically expected to increas

26、e during recessions,and most expect enforcement budget and costs to be a primary concern.A more specific study might be required to investigate the issue more granularly.Recession may also bring financial implications to law firms.The key problem for tech adoption is cost and technical know-how,and

27、these require a longer-term investment to resolve.It is recommended that law firms should prepare for technology adoption well ahead of a potential recession.Executive Summary7IP IN TIMES OF RECESSIONINTAs Recession&IP(“Project Team”)was created to help provide trademark and intellectual property(IP

28、)practitioners and administrators the right tools to manage their valuable IP rights,particularly trademarks,in the most efficient way during a recession.Recessions,in general,have significant effects on economies,businesses,and individuals.Economic recessions also have a significant and long-lastin

29、g impact on the legal sector.The legal sector is not,however,homogeneous,it encompasses various distinct practices and areas.While there are several studies and reports on the impact of recession,including those that have considered its impact on the legal industry,there were none that focused on th

30、e impact of recession on the IP industry.IP practitioners had no resources,be it reports or studies that would help them in dealing with the impact of recession on their trademarks/IP,irrespective of whether they were in-house,in law firms or provided other IP services.The Project Team was tasked wi

31、th creating an efficient method of administering and managing trademark/IP portfolios during an economic crisis,by identifying a recession,assessing the impact on trademark and other IP assets,and researching the measures that can be taken by IP practitioners to minimize exposure,and secure and admi

32、nister their IP during a recession.The Project Team had twelve experts and was led by co-chairs.The experts were divided into four groups to research the following topics:(1)Identifying recession;(2)Understanding its potential financial impact;(3)Understanding/preparing for its potential impact for

33、trademark practitioners;and (4)How stakeholders use technology in times of recession Some members participated in more than one group.Each group then met on several occasions and the group members conducted their own research and presented their content for the relevant section of this Report.All th

34、e sections were reviewed,revised,and finalized by the co-chairs,with additional input from each group.We have relied upon the third-party data and public resources for the first three chapters.For the fourth chapter,we have obtained primary data through a Project Team Survey conducted of INTA member

35、s.Introduction and Methodology 8IP IN TIMES OF RECESSIONIn developing the outline of the paper,the Project Team first needed to clarify what a recession is.Although the term“recession”is defined in various dictionaries,the team quickly learned that there is no consensus among the worlds economists o

36、n a single definition.The International Monetary Fund states that recession“is a sustained period when economic output falls and unemployment rises.”The National Bureau of Economic Researchs(NBER)definition emphasizes that“a recession involves a significant decline in economic activity that is sprea

37、d across the economy and lasts more than a few months.”Further,the NBER states that it“treats the three criteria for identifying a recessiondepth,diffusion,and durationas somewhat interchangeable.That is,while each criterion needs to be met individually to some degree,extreme conditions revealed by

38、one criterion may partially offset weaker indications from another.”The lack of uniformity of the definition of“recession”meant there is also no defined way of identifying a recession.Moreover,it was found that there is usually a lag between when a recession hits and when its impact is felt.These in

39、itial learnings led us to form a group to examine the question of how to identify a recession.While some may argue that the legal sector copes better with recessions in general than other sectors,law firms and legal departments are not immune to the effects of recession and experience various impact

40、s during economic downturns,including a direct impact on spending.The next important step in preparing this Report was to understand the financial impact of“recession”in general,as well as its specific impact on trademark/IP practitioners.We created our second group to look at how one could prepare

41、for an impact caused by a recession.Our Report then outlines ways to recognize a recessions impact on trademarks and IP,which can be distinct from the broader economic trends.In this context,it is also worth mentioning the importance of the financial treatment of IP in the context of the prevalent a

42、ccounting standards.Current international accounting rules do not allow trademarks and complementary intellectual property that are developed in-house to be recognized as assets on corporate balance sheets.An INTA Board Resolution in 2022 supports the position that accounting standards should not re

43、quire a blanket exclusion of trademarks and complementary IP that is developed in-house from recognition as assets on corporate balance sheets.INTA conducted and presented a Report on its 2023 INTA Recession Impact on IP and Technology Survey,which supports and reemphasizes this view.Our third group

44、 was organized to help in understanding the potential impact of a recession on trademarks/IP,including from the lens of the prevailing account standards.9IP IN TIMES OF RECESSIONAs we know,the recession in 2020 was largely caused by the COVID-19 pandemic,which led to widespread economic shutdowns an

45、d disruptions across the world.The stock market experienced a significant decline in early 2020,with the S&P 500 dropping nearly 34 percent between February and March.1 This was due to investor concerns about the impact of the pandemic on the global economy and the potential for a long-term recessio

46、n.It has been observed that those trademark practitioners who adopted certain technology were less negatively impacted by this most recent recession.As such,we created a fourth group to study the impact and role of technology in dealing with recession.This groups focus was two-fold:to assess both ho

47、w technology can be used to deal with recession and how the impact of recession on technology-based IP differs from that on non-technology-based IP.1 S&P 500 dropping 34%in Q1 2020:https:/ 10IP IN TIMES OF RECESSIONCo-ChairsTanya Fickenscher,Major League BaseballMeera Chature Sankhari,Jupiter Law Pa

48、rtnersTeam MembersAndrew Joseph Avsec,Crowell&MoringGuillermo C.Carey,CAREY Soley Coban,Deris IPBarry Cohen,Royer Cooper Cohen Braunfeld LLCDana N.Justus,Sterne,Kessler,Goldstein&Fox P.L.L.C.Alban Kwan,CSC Digital Brand ServicesCourtney Laginess,FISSerena C H Lim,Ant GroupSylvie Martin,IBMMariam Sab

49、et,Al Tamimi&CompanyRany Sader,SADER LegalDonna Short,AddisonsINTA Staff:Jos Luis Londoo Director-External Relations-Policy DevelopmentCarol BowenSr.Coordinator-AccountingFor more about our Project Team and their bios,please view the below link:Project Team Members.Project Team11IP IN TIMES OF RECES

50、SIONTo slow the spread of the COVID-19 virus during the pandemic,many jurisdictions implemented lockdowns and other restrictions on businesses and social gatherings.This had a significant impact on industries such as travel,hospitality,and entertainment,which saw a sharp decline in demand.The pandem

51、ic also disrupted global supply chains,as factories and transportation systems were forced to shut down or reduce operations.This led to shortages of some goods and services,while others saw a glut of supply due to reduced demand.Overall,the COVID-19 pandemic and its associated economic shutdowns an

52、d disruptions were the primary cause of the recession in 2020.There are several ways to identify a recession.We have identified key indicators commonly used to recognize a recession,including GDP fluctuations,unemployment rates,consumer spending patterns,business investments,and stock market perform

53、ance.These indicators help us gauge economic health and anticipate potential economic headwinds.One of the most common ways to identify a recession is through changes in GDP.If the GDP of a country declines for two consecutive quarters or more,it is generally considered to be in a recession.Unemploy

54、ment rate:During a recession,there is usually an increase in the unemployment rate.When people lose their jobs,they tend to spend less money,which can further stall the economy.While an increase in the unemployment rate can be a sign of economic distress and a potential contributor to a recession,th

55、e declaration of a recession is a more complex process that considers multiple indicators,not just a specific period of time or a set number of quarters.Consumer spending:A decrease in consumer spending is also a sign of a recession.When people are worried about their jobs or the state of the econom

56、y,they may cut back on spending,which can lead to a decline in economic activity.Business investment:During a recession,businesses may cut back on investments and expansion plans,which can also contribute to a decline in economic activity.This is further impacted by the financial treatment of IP.The

57、 current accounting standards do not allow in-house-developed brands to be identified/valued on corporate balance sheets.This practice has a huge impact in financial terms and deprives companies of an important way to demonstrate the stabilizing long-term value of brands and their underlying IP,part

58、icularly for SMEs and MSMEs.Stock market:The stock market can also be an indicator of a recession.A sharp decline in stock prices can be a sign that investors are concerned about the state of the economy.SECTION 1 Identifying a Recession12IP IN TIMES OF RECESSIONInternally,INTA consults with our par

59、tner J.P.Morgan to identify and predict potential economic headwinds.In early 2023,J.P.Morgan reported to the INTA Board of Directors that we are currently in(and can likely expect)mild recession-like market conditions for the near future.To make this determination,J.P.Morgan has relied on the Natio

60、nal Bureau of Economic Analysis and their six-factor test of economic indicators.As detailed in the heat map below(Exhibit 1 updated in Q3 of 2023),the Bureau retrospectively examines quarterly economic data to determine the existence of a recession.Factors examined include personal income,employmen

61、t,spending,wholesale/retail sales,and industrial production.The heat map indicates the above-described full-blown recession in early 2020 due to COVID-19(all red indicators),but only mild recessionary activity three years later in early 2023(a mix of green and yellow indicators).Thus,INTA is operati

62、ng under the assumption that we are facing mild recessionary headwinds in 2023,but certainly not a full-blown recession.EXHIBIT 1 Extract from:Guide to the Markets-U.S.Data are as of October 24,20232 Recognizing a recession that may impact intellectual property There are several ways to recognize a

63、recession that may impact intellectual property(IP):Impact on IP filings:A recession could affect the number of patent,trademark,design,and copyright applications filed.This can be an early sign that companies and individuals are cutting back on investments in new technology and creative works,or co

64、nversely,that they are using the IP system as a way to overcome a recession.Impact on IP licensing and litigation:During a recession,companies may be less willing to pay licensing or royalty fees for the use of IP.This can result in decreased revenue for IP holders who rely on these fees as a source

65、 of income.Additionally,companies may become more reluctant to engage in IP litigation due to the associated costs.Economic players may opt to go for a safer or less expensive way to conduct business and choose to proceed through an IP licensing program instead of expanding their own business.2 J.P.

66、Morgan Guide to the Markets https:/ SECTION 1 Identifying a Recession13IP IN TIMES OF RECESSION Changes in IP portfolio management:During a recession,companies may reassess their IP portfolios and divest assets that are not essential to their core business.This can result in a focus on maintaining t

67、he value of their core IP assets,and away from the non-core or less profitable assets in the companys IP portfolio.Increase in IP theft and infringement:In a recession,counterfeiters may be more likely to engage in IP theft or infringement as they look for ways to cut costs and maintain their market

68、 position.Furthermore,consumers who face difficulties affording the lifestyle they want are more likely to buy counterfeit products at lower cost.Impact on IP-related investment:A recession can affect investment in IP-related assets,such as patents and trademarks,depending on the industry.Some indus

69、tries are impacted by recession in a way that may increase their activity(for instance pharmaceutical industries during the COVID-19 recession).Some other industries could conversely see their activity decrease because of a recession.Overall,a recession can have significant impact on intellectual pr

70、operty,including on investments in new technology and creative works,changes in IP portfolio management,and an increase in IP theft and infringement.Monitoring changes in IP filings,licensing and litigation,and investment can help identify early signs of a recessions impact on IP.Takeaway:There may

71、be different types of recessions for different reasons.While most past recessions may have resulted from,economic and financial crises,the latest one was created by the COVID-19 pandemic.The IP system responded differently in the latter,as it was used as a tool to overcome the crisis.During this rec

72、ession,the public and private investments(to develop vaccines)were higher,as was the intensive use of the trade secrets,patents,and IP licensing.The rise of entrepreneurs and the new businesses(start-ups)was also noted;they took advantage of the virtual ecosystem,offering new products and services,l

73、eading to the creation of the new trademarks.Analysis of WIPO IP Statistics as factor in Identifying a recession from the WIPO IP Statistics Data Center3Search 1:Type of Search:Trademarks Year Range:2007-2021 Report type:Total Count by Filing Office Indicator:Class count in total applications(direct

74、 and via Madrid)This search was conducted to assess the volumes of applications by years.The figures show the number of applications the year before a Recession(2007 for the recession in 2008,or 2019 for the recession in 2020)and the following year.It also shows applications by residents and non-res

75、idents,which may help to understand how applicants chose to protect their trademarks nationally and internationally.3 https:/www3.wipo.int/ipstats/key-search/indicatorSECTION 1 Identifying a Recession14IP IN TIMES OF RECESSION Africa The figure shows that non-resident applications declined from 2007

76、 until 2010,when they started to climb until 2019.In 2020 applications went down again(although the total applications in that year were higher than between 2008 and 2010).However,residents behaved differently,as their filings remained flat during 2007 and 2008,and even started increasing a year ear

77、lier than non-resident applications(2009).From 2019 to 2020 the applications slightly decreased,but immediately after,in 2021,went up again.One may conclude that there is a difference in the way resident applicants respond to recessions relative to non-resident applicants,as they increased their tra

78、demark filings soon after COVID-19 hit,while the increase in filings after the 2008 recession had a flatter line.AsiaThe Asian figure shows two dramatically different behaviors on the part of resident and non-resident applicants.While the non-resident line remained relatively flat in response to the

79、 recessions,residents continued to increase their filings.Some years had fewer steep lines,but the number of applications increased year by year.SECTION 1 Identifying a Recession15IP IN TIMES OF RECESSION Europe The European figures are interesting as well,because applicants(both residents and non-r

80、esidents)dramatically increased their trademark filings just as COVID-19 hit.This differed from the previous recession in 2008 where there was a decrease in filings and only non-resident filings climbed back after a new recession came about.Latin America and The Caribbean The LATAM and Caribbean num

81、bers show that residents filed more applications,as if recessions had no impact on them,while non-residents show flatter lines,with a significant increase as of 2020.SECTION 1 Identifying a Recession16IP IN TIMES OF RECESSION North America,including United StatesIn North America,there seems to be pa

82、rallel trademark filing behavior between residents and non-residents.Perhaps the decrease in applications by residents shows a steeper line between 2008 and 2009,and a flatter increase in filings between 2020 and 2021.In turn,non-residents account for a dramatic increase of filings since 2019.Oceani

83、a Oceania shows opposite responses when comparing the 2008 recession and COVID-19.SECTION 1 Identifying a Recession17IP IN TIMES OF RECESSION Search 2 Type of Search:Trademarks Year Range:2007-2021 Report type:Total Count by Filing Office Indicator:Trademarks in force(direct and via Madrid)This sear

84、ch tends to determine the number of trademarks in force,to indirectly determine how brand owners are maintaining their registrations,i.e.,renewal volumes.Contrary to the previous search,WIPO Center does not have numbers by continent,therefore these numbers correspond with IP Offices.In some cases,we

85、 selected some Offices to show a trend in a region,rather than following a specific jurisdiction.African Regional intellectual Property Organization Asia:(China,Japan,Republic of Korea and Singapore,for the lack of Asian Report)SECTION 1 Identifying a Recession18IP IN TIMES OF RECESSION European Uni

86、on Intellectual Property Office Latin American and the Caribbean(Argentina,Brazil,Chile,Mexico)United States of America SECTION 1 Identifying a Recession19IP IN TIMES OF RECESSION Search 3 Type of Search:Trademarks Year range:2007-2021 Report Type:Total count by applicants origin Indicator:Resident

87、Class per count per 100 billion USD GDP(2017 PPP)This search may show how residents behave in a recession,taking GDP as a reference.Brazil ChinaSECTION 1 Identifying a Recession20IP IN TIMES OF RECESSION FranceGermanySECTION 1 Identifying a Recession21IP IN TIMES OF RECESSION India JapanSECTION 1 Id

88、entifying a Recession22IP IN TIMES OF RECESSION Mexico Republic of Korea SECTION 1 Identifying a Recession23IP IN TIMES OF RECESSION Switzerland United Kingdom SECTION 1 Identifying a Recession24IP IN TIMES OF RECESSION United States of America Summary In compiling this data,we have developed a comp

89、rehensive understanding of the 2020 recession,primarily driven by the unprecedented COVID-19 pandemic.The pandemics global economic repercussions were substantial,leading to widespread shutdowns,disruptions in various industries,supply chain issues,and a sharp stock market decline.We have also ident

90、ified key indicators commonly used to recognize a recession,including GDP fluctuations,unemployment rates,consumer spending patterns,business investments,and stock market performance.These indicators help us gauge economic health and anticipate potential economic headwinds.Internally,INTA consulted

91、with J.P.Morgan to assess the economic climate,with the latest Report,as of this writing,indicating that there were mild recession-like conditions in early 2023.J.P.Morgans analysis relies on the six-factor test of the National Bureau of Economic Analysis,which includes personal income,employment,sp

92、ending,wholesale/retail sales,and industrial production.Their assessment suggests mild recessionary headwinds,distinct from the full-blown recession experienced in early 2020.Furthermore,we have outlined ways to recognize a recessions impact on IP,which can be distinct from broader economic trends.T

93、hese include fluctuations in IP filings,licensing and litigation activity,changes in IP portfolio management,increased IP theft and infringement,and shifts in IP-related investment across different industries.SECTION 1 Identifying a Recession25IP IN TIMES OF RECESSION In conclusion,our research reve

94、als that recessions can take various forms,with the COVID-19 recession serving as a unique example.The response of the IP system during this recession demonstrated its adaptability and resilience,as it played a critical role in overcoming the crisis through public and private investments,trade secre

95、ts,patents,and IP licensing.4 As we move forward,it is essential to remain vigilant and closely monitor changes in IP-related activities,as they can provide early indications of a recessions impact.Different regions and industries may respond differently,as demonstrated by the data,making it crucial

96、 for organizations to adapt their IP strategies accordingly to navigate the challenges and opportunities presented by recessions.4 https:/www.wipo.int/web/patent-analytics/exploring-covid-19-vaccine-patents https:/www.wipo.int/publications/en/details.jsp?id=4650&plang=ENSECTION 1 Identifying a Reces

97、sion26IP IN TIMES OF RECESSIONFinancial Impact of RecessionNeither law firms nor corporate legal teams are immune to the effects of recessions.Discussed in greater detail in this section are several IP-related topics that affect both.Mergers and Acquisitions The financial impact on law firms,in-hous

98、e legal departments,and IP offices in relation to mergers and acquisitions(M&A)can be significant during a recession.In a recessionary environment,the number of mergers and acquisitions tends to decline.Uncertainty about the economic outlook,tighter credit conditions,and reduced investor confidence

99、can all lead to a decrease in M&A transactions.Companies may be more cautious in making large-scale acquisitions or investments,leading to smaller deals.This can impact the fees and revenues earned by law firms and legal departments involved in M&A work.During a recession,distressed M&A activity ten

100、ds to rise.Distressed M&A refers to the acquisition or sale of financially troubled companies or assets.Law firms and in-house legal teams may see an increase in work related to insolvency,debt restructuring,and distressed asset transactions.As economic conditions worsen,parties involved in ongoing

101、M&A transactions may seek to renegotiate or reevaluate deal terms.In a recessionary period,companies may face financial constraints and cost-cutting measures,including reducing their spending on legal advisory services.This can put downward pressure on the fees charged by law firms.M&A activities te

102、nd to decline in a recessionary period;the below table provides a simple example.5 5 https:/ SECTION 2 Financial Impact of Recession27IP IN TIMES OF RECESSIONIt is important to note that the specific impact may vary depending on the severity and duration of the recession,the industry sectors involve

103、d,and the geographic region.However,overall,the financial impact of a recession on law firms,in-house legal departments,and IP offices involved in M&A tends to be challenging,with reduced deal activity,smaller transactions,and potential fee pressures.Because of that,it is important to examine each r

104、ecession period and its effects separately.The last three recession periods are discussed below.The 1990 recession:The 1990 recession,triggered by several factors such as tight monetary policy and the oil-price shock caused by the first Gulf War,not only reduced demand for legal services,but also fo

105、rced law firms to face the fact that they were growing too fast.A National Law Journal article noted that nationwide demand for corporate transactional work was declining towards the end of 1987.Hostile takeovers became more difficult as courts and state legislatures permitted companies to implement

106、 strong takeover defenses.After the recession period,the ratio of M&A activities increased in the period between 2005 and 2007.There was a significant increase in debt-financed acquisitions and equity investments in the U.S.from 2005 to 2007.Moreover,investments in high-risk securities to increase p

107、rofit margins made companies riskier.Although the M&A wave was framed as short,it was a period of intense activity.In mid-2007,before the great recession,the wave of mergers and acquisitions came to an end with the subprime mortgage crisis that started in the U.S.and spread across the world.Global Y

108、TD M&A ValuesUS$Millions1998200020022004200620082010201220142016201820202022 SECTION 2 Financial Impact of Recession28IP IN TIMES OF RECESSIONThe 2008 recession(the Great Recession):The 2008 recession,also known as the Global Financial Crisis,was a severe worldwide economic and financial downturn th

109、at began in 2008.It originated in the United States with problems in the housing market,particularly the subprime mortgage sector.Risky lending practices and flawed credit rating practices contributed to a housing bubble that eventually burst,leading to widespread foreclosures and a collapse in hous

110、ing prices.The crisis spread to the global financial system through complex financial instruments known as mortgage-backed securities that contained poorly performing loans.Major financial institutions faced significant losses,liquidity problems,and a loss of confidence,culminating in the bankruptcy

111、 of Lehman Brothers in September 2008.The repercussions of the crisis were felt worldwide,resulting in a severe recession,high unemployment rates,plummeting stock markets,and a contraction in economic activity.Governments and central banks implemented measures such as stimulus packages and monetary

112、easing to stabilize the financial system and stimulate economic recovery.The 2008 recession led to significant regulatory reforms in the financial sector and increased awareness of the risks associated with complex financial instruments and unsustainable lending practices.The recessions impact was l

113、ong-lasting,shaping the global economy for years to come.After the 1990 recession period,companies gradually started to recover and started to turn toward mergers and acquisitions.However,the high number of mergers and acquisitions that took place during this period did not continue in the same way

114、because of the crisis that took place in 2008 and,in fact,there was a significant decrease in the number of mergers and acquisitions in 2009.Based on several reports,we were able to analyze the recession periods and of the number of M&A activities in Turkey6 and Los Angeles(the U.S.).In these recess

115、ion periods,the report observed that these places were financially affected by the recession in 1990 but that at the end of this recession period,companies increased their M&A activities to recover themselves.While mergers and acquisitions generally increased between 2003 and 2007 worldwide,the repo

116、rt observed that the global crisis in 2008 has had a downward impact on mergers and acquisitions and that the M&A activities,which generally increased,decreased with the 2008 recession period.The number of mergers and acquisitions from 1999 to 2010 in Turkey.6 https:/dergipark.org.tr/tr/download/art

117、icle-file/203467 SECTION 2 Financial Impact of Recession29IP IN TIMES OF RECESSION2502001501005001999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009YILLARILEM ADEDI54,543,532,521,510,5045.00040.00035.00030.00025.00020.00015.00010.0005.00002003200420052006200720081,37928.65232.56830.42636.59842.43

118、728.8711,9492,7033,7994,4822,496EyllAnlama DeeriAnlama AdediMergers and Acquisitions in the World during the Period of 2003-2008;Columns indicate M&A value(in million$)Lines indicate M&A number.SECTION 2 Financial Impact of Recession30IP IN TIMES OF RECESSIONThe 2020 recession(COVID-19):Toward the s

119、tart of the pandemic,the Daily Journal reported that“deal flow has softened,transactional work is down,especially in M&A,real estate/finance”but that other practices such as litigation and bankruptcy would likely generate work.Since the emergence of COVID-19 and its subsequent coverage in various me

120、dia outlets,there has been a notable decline in deal activity.According to Marsh McLennans estimation,approximately 25 to 30 percent of active deals in the Pacific region were put on hold due to concerns related to the pandemic.7 In the first half of 2022,M&A work declined 23 percent year over year,

121、while equity markets were down 68 percent,the slowest period since 2005.8 Industry experts are confirming that demand for M&A work was“concerningly weak”in the first half of 2023.9 On the other hand,according to the experts“deal activity shows promising signs of recovery”as we approach the end of 20

122、23 and into 2024.10COVID-19 has further widened any existing valuation gaps between sellers and buyers,particularly when considering the short-term and long-term prospects of the target business.Moreover,it is expected that opportunistic buyers will likely contribute to an increase in deal activity.

123、Distressed asset investors,such as specialized investment funds,are actively evaluating opportunities to acquire undervalued equity or debt packages.Industries facing significant financial strain,such as travel and leisure,are particularly vulnerable in this regard.It is anticipated that even tradit

124、ional investors may pursue transactions involving distressed assets when favorable circumstances arise,and strategic alignment is evident.Our research indicates that this recession period has had a different effect on M&A activities.According to Forbes,11“Moreover,unlike in past crises that have aff

125、ected M&A deals and activity,this time there has also been a sea of change in the manner in which M&A transactions are developed and negotiated.With all of the principal players working remotely,the effective use of new and creative collaborative tools,technologies and techniques have become more cr

126、itical as buyers,sellers,providers of M&A financing,and all of their respective legal and financial advisors adjust to the changed environment.”As seen,each recession period has affected different jurisdictions differently,both during and after the recession.Therefore,it is necessary to examine them

127、 separately.Based on our observations and the above explanations,the recession period that had the greatest impact on merger and acquisition activities was the Great Recession in 2008.Companies have started planning their future strategies,taking into account possible crisis situations.7 https:/ htt

128、ps:/ https:/ https:/ 11 https:/ SECTION 2 Financial Impact of Recession31IP IN TIMES OF RECESSIONThe importance of the financial treatment of IP is also worth mentioning.The current international accounting rules do not allow trademarks and complementary intellectual property that are developed in-h

129、ouse to be recognized as assets on corporate balance sheets.This exclusion of IP rights as financial assets deprives companies of an important way to demonstrate the value of their IP rights and limits management attention to IP,hampering its strategic contribution to the protection of creative and

130、innovative competitiveness and longevity of companies.Better IP reporting and improved IP accounting standards would also help SMEs gain access to funding,which is generally harder in times of recession,especially for companies that rely on intangibles.A 2022 INTA Board Resolution supports the posit

131、ion that accounting standards should not require a blanket exclusion of trademarks and complementary IP that are developed in-house from recognition as assets on corporate balance sheets.12 12 https:/www.inta.org/wp-content/uploads/public-files/advocacy/board-resolutions/20220518_INTA-Board-Resoluti

132、on-on-International-IP-Accounting-Standards.pdf SECTION 2 Financial Impact of Recession32IP IN TIMES OF RECESSIONBUDGET Thomson Reuters Market Insights Survey of legal clients answers important budgetary questions.The survey explains the theory of net spend optimism and the difference between those

133、clients that say their legal spending will increase and those that say it will decrease.As per the survey,net spend optimism has increased with the start of the pandemic in Q2 2020 and still continues.While clients were hesitant to spend at the very beginning of the pandemic due to the uncertainty o

134、f the economy,spend optimism has been steadily increasing since.In Q2 2022,44 percent of clients said they expect to increase their legal spending,while only 17 percent said they plan to decrease.But this trend was not consistent across all sectorscompanies in technology,media,and telecoms(TMT)showe

135、d lower optimism in the first half of 2022.13There are usually delays between when a true recession hits and when the impact is actually felt on a companys legal spending,demonstrating that a major decrease in legal spending may be looming.The 2008 recession spurred changes that remain today.More le

136、gal work shifted from outside legal counsel to in-house.“The ratio of outside legal spend to inside spend averages 60%to 40%,with 60%of the budget spent with law firms and other providers.However,since in-house legal services are essentially purchased wholesale,whereas law firms bill at a retail rat

137、e,the overall volume of the work being done in-house likely exceeds 50%.”14What we learned from the 2008 recession is that partners who lower their hourly rates will be in a better position to gain routine work.Companies are focusing on predictable legal budgets,thus fixed-fee deals will likely incr

138、ease,and companies are less willing to pay Top 25 American law firms to do regular,routine work.13 https:/ sentiment:where is the legal market headed?Total legal spend optimism:quarter-by-quarter view(Percent of buyers planning to increase legal spend versus planning to decrease)Percent planningspen

139、d increasesPercent planningspend increases40%-25%Q3 19Q1 20Plan to IncreaseQ1 21Q1 22Q4Q2Q2Q2Q3Q3Q4Q4-24%-26%-34%-28%-24%-22%-21%-16%-19%-17%-17%41%36%36%36%39%47%42%43%44%30%32%Plan to Decrease14 https:/ SECTION 2 Financial Impact of Recession33IP IN TIMES OF RECESSIONIn-house law departments strug

140、gled to increase their budgets back to where they were prior to the 2008 recession.Law firms are facing a reduction in corporate and deal work,in addition to increased costs,leading to a decrease in profits for many of the largest international law firms.While billable hours declined by only one per

141、cent in the first quarter of 2023,payroll expenses rose almost 11 percent,and overhead rose almost 13 percent.In a recession,some clients feel the need to aggressively pursue litigation that they normally would not pursue as an additional source of funds.But with companies struggling financially and

142、 enduring increased capital costs,and law firms facing a slowdown in work,law firms often offer discounts or alternative fee arrangements.A 2022 half-year analysis of the largest U.S.firms by Citi found that the drop in demand for legal services cut revenue growth by 5 percent,down 14.6 percent from

143、 the year before.In this period,expenses increased by 14.7 percent.15Earlier in the year,there was optimism that 2023 would bring an increase in regulatory activity,litigation,and restructuring work,as clients would seek the help of law firms to attempt to resolve the financial challenges associated

144、 with the recession.It is important to recognize the sectors that are having downturns and help them prioritize their legal work.Law firms can use litigation as a recession hedge by shifting IP and corporate lawyers to help with litigation.Law firms may help generate revenue by helping distressed bu

145、sinesses seek creative methods of resolving ongoing debt issues.LITIGATION-ENFORCEMENT-PROSECUTION Economic recessions have significant and long-lasting impacts on the legal sector.However,the relationship between the legal sector and recessions may differ from that of other industries.Indeed,as sta

146、ted in McKinsey&Companys report titled“COVID-19:Implications for Law Firms”16 in May 2020,law firms tend to withstand downturns better than the overall economy does.That said,the legal sector is not a homogeneous industry;it encompasses distinct practices and areas.And while it is argued that the se

147、ctor,as a whole,copes better with recessions than other sectors,the level of impact of an economic crisis can vary depending on the specific subfield of a law practice.15 https:/ https:/ firms/COVID-19-Implications-for-law-firms-vF.ashx SECTION 2 Financial Impact of Recession34IP IN TIMES OF RECESSI

148、ON17 Sandy Lechtick,How COVID-19 Will Impact the Legal Profession,DAILY.J.(Apr 13,2020)https:/ this context,some have argued that the litigation field is recession-proof.Towards the start of the pandemic,the Daily Journal reported that“deal flow has softened,transactional work is downespecially in M

149、&A,real estate/finance,”but that other practices such as litigation and bankruptcy would likely generate work.17Furthermore,as expressed in McKinsey&Companys report titled“COVID-19:Implications for Law Firms,”in May 2020,dispute and investigation practices are less correlated with the overall econom

150、y compared to transactional practices.The graph below,sourced from Peer Monitor,also demonstrates that while the 20082009 recession had a significant negative effect on transactional demand,demand for litigation remained relatively stable.1050-5-10-15Demand for law-firm services,200710,%(year-over-y

151、ear change)Q4 2007Q4 2008Q4 2009Q4 2010TransactionalLitigationRECESSION SECTION 2 Financial Impact of Recession35IP IN TIMES OF RECESSIONSimilarly,within this framework,according to the“Los Angeles Law Firms Before and After Recessions”publication of the Milken Institute Report in May 202118 which e

152、xamines the situations of law firms in Los Angeles after economic crises,the wave of securities fraud toward the start of the 2000s and ensuing government enforcement created significant work for litigators.Litigation work continued to grow during the period following 2001 as white-collar enforcemen

153、t became more aggressive.In this regard,it is stated that actions during economic downturns lead to an increase in the number of lawsuits after the recession,as they become the subject of litigation.Michael McDonalds article titled“Finance and Law:Recessions and Lawsuits”19 from July 26,2016,suggest

154、s that during economic downturns,companies and individuals facing cash shortages and seeking any available financing may turn to litigation as a source of funding.Particularly,if lawyers may be willing to base a significant portion of their fees on the outcome of the case,this could incentivize the

155、initiation of lawsuits.On the other hand,an alternative viewpoint maintains that during economic downturns,businesses tend to reduce their costs,and litigation expenses are among the costs that would be cut.Companies are cautious about allocating their limited budgets to litigation expenses.For inst

156、ance,even if they have a strong case,it would be quite challenging to collect damages from a failing company on the opposing side if the lawsuit concludes favourably.The high cost of legal proceedings and the uncertainty of the outcome make individuals and organizations hesitant to pursue litigation

157、.This dual situation is also evident in patent litigation.An article20 examining the status of patent litigation during economic downturns,mentions that there is a disagreement among practicing attorneys regarding the impact of economic downturns on the rates of patent litigation.One perspective,sup

158、ported by data from previous recessions,suggests that downturns lead to an increase in litigation as the potential returns from patent litigation become relatively more attractive compared to sales of products and services.In other words,during downturns,litigation serves as a substitute for traditi

159、onal sales.The contrary perspective highlights the decrease in patent litigation during the most recent recession,attributing it to capital constraints that generally lower overall litigation rates during economic downturns.It is difficult to reach a conclusion regarding the relationship between lit

160、igation activities and economic recessions.On one hand,there is an argument that individuals and companies,seeking to reduce expenses,are less willing to initiate lawsuits during such periods.On the other hand,there is a perspective that economic downturns transform litigation into a source of incom

161、e for individuals and companies in search of revenue opportunities.Thus,it is not possible to draw an overarching conclusion about the correlation between economic downturns and litigation processes,as this correlation seems to vary on a case-by-case basis.18 https:/lowellmilkeninstitute.law.ucla.ed

162、u/wp-content/uploads/2021/04/LA-Law-Firms-Before-and-After-Recessions-April-25-2021FINAL.pdf 19 https:/ Marco,Alan C.and Miller,Shawn P.and Sichelman,Ted M.,Do Economic Downturns Dampen Patent Litigation?(August 20,2015).12 Journal of Empirical Legal Studies 481(2015)(Forthcoming).SECTION 2 Financia

163、l Impact of Recession36IP IN TIMES OF RECESSIONSTAFFING AND EMPLOYMENT The pandemic recession has led to a decreased demand for legal services,as companies reduce their budgets and individuals have less disposable income.As a result,law firms have seen a drop in clients and a decrease in revenue.Thi

164、s has forced many law firms to downsize.The effects of the last three recessions on legal employment are discussed below.The 1999 and Early 2000s Recession:When findings related to the recession of the early 2000s are observed,the most important element to note is that the 20012003 recession pushed

165、more female lawyers than male ones out of the workplace.According to an article by the scholar Deborah J.Merritt,21 the recession of the early 2000s impacted female lawyers more profoundly,given that women constituted 29.8 percent of employed lawyers.She also states that:“by 2003,despite more women

166、graduating from law school(and disproportionately male senior lawyers departing the workforce),only 27.6%of employed lawyers were women.”The 20082009 Recession(The Great Recession):While the number of job losses varied by country and region,the blog LawShucks reported that 12,196 people(4,633 lawyer

167、s and 7,563 staffers)were laid off at 138 large law firms in 2009.22In addition,the impact of the recession on law firm employment was particularly difficult for then-recent law school graduates who were entering the job market at a time when jobs were scarce.According to the National Association of

168、 Law Placement(NALP):“in the USA the overall employment rate of 88.3%for Class of 2009 graduates for whom employment status was known represents a 3.6 percentage point drop from the recent historical high of 91.9%for the Class of 2007 and masks a number of weaknesses in the job market faced by this

169、class.For example,separate research from NALP found that between 3,200 and 3,700 graduates who reported jobs in law firms had their start dates deferred beyond December 1,2009.In addition,a far higher percentage of this class reported employment that was temporary,with 41%of public interest jobs rep

170、orted as being temporary,30%of business jobs being reported as temporary,69%of academic jobs being reported as temporary,and even 8%of the private practice jobs being reported as temporary.Overall,nearly 25%of all jobs were reported as temporary,a figure that includes judicial clerkships.”2321 https

171、:/www.lawschoolcafe.org/2013/02/20/unemployed-lawyers/22 https:/ https:/www.nalp.org/09salpressrel SECTION 2 Financial Impact of Recession37IP IN TIMES OF RECESSIONAccording to an article in The Bar Examiner24 in the Winter issue of 20172018,“beginning with the class of 2008,the overall employment r

172、ate for new law school graduates declined for six years in a row,even as the national and legal economies recovered.That rate has only begun to improve over the last three years.The overall employment rate for the class of 2016,the most recent class for which complete employment data is available,wa

173、s up by almost one full percentage point from the previous year to 87.5 percent of graduates for whom employment status was known,compared with 86.7 percent for the class of 2015.”More recent data on U.S.employment rates regarding legal services25 states that“the sector added 5,100 jobs in September

174、 2023,bringing the total to 1,182,700,according to preliminary seasonally adjusted data released by the U.S.Bureau of Labor Statistics.Since hitting an all-time high in July 2022,legal sector job numbers have fluctuated as global M&A activity slows down to levels not seen in years.”24 https:/thebare

175、xaminer.ncbex.org/article/legal-profession/the-entry-level-employment-market-for-new-law-school-graduates-10-years-after-the-great-recession/25 https:/ https:/ or data obtained from the Bar Examiner.The COVID Recession(2020):According to a February 2021 article on the law blog Above the Law,“Biglaw

176、Associate Layoffs In 2020 Were Reminiscent Of 2009 And The Great Recession,”26“Biglaw firms,on average,employed 1.6 percent fewer attorneys in 2020 than at the same point in 2019.”SECTION 2 Financial Impact of RecessionFigure 1:Law graduate employment rate 9/10 months after graduation,19992016Percen

177、t planningspend increasesPercent planningspend increases1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 201690.3%91.5%90.0%89.0%88.9%88.9%89.6%90.7%91.9%89.9%88.3%87.6%85.6%84.7%84.5%86.7%86.7%87.5%38IP IN TIMES OF RECESSIONAnother interesting data set obtained b

178、y the U.S.Bureau of Labor Statistics was illustrated by the American Lawyer27 and can be found below.The data set demonstrates that U.S.legal jobs dropped to their lowest during March 2020 to 1,090,000 and have slowly recovered after October 2021.US LEGAL JOBS SINCE 2020Legal Jobs*Preliminary DataIn

179、formation or data obtained from the American Lawyer.However,the experts are foreseeing another recession wave and Sara Merken has reported for Reuters that law firm layoffs are beginning to spread and has stated the following:“Large law firms are advising on fewer deals,with a smaller combined value

180、,as mergers and acquisitions activity fell to its lowest level in more than a decade in the first quarter of 2023,according to data released.by Refinitiv.”28 Nevertheless,the effects as of this writing are yet to be seen.Recessions have a significant impact on law firm employment,leading to job loss

181、es and increased competition for available positions.However,it is important to note that economic downturns are cyclical and depend on a jurisdictionss and/or regions specific set of conditions.27 https:/ https:/ 2 Financial Impact of Recession39IP IN TIMES OF RECESSIONFINDINGS:MERGERS AND ACQUISIT

182、IONS IN TIMES OF RECESSION Uncertainty about the economic outlook,tighter credit conditions,and reduced investor confidence can lead to a decrease in M&A transactions.The acquisition or sale of financially troubled companies or assets tends to rise.Companies may be more cautious in making large-scal

183、e acquisitions or investments,leading to smaller deals.This can impact the fees and revenues earned by law firms and legal departments involved in M&A work.Financial constraints and cost-cutting measures,including legal advisory services,can put downward pressure on the fees charged by law firms.In

184、the first quarter of 2023,large law firms were advising on fewer deals,with a smaller combined value,as mergers and acquisitions activity fell to their lowest level in more than a decade,since rising interest rates,high inflation,and fears of a recession soured the appetite of companies for dealmaki

185、ng.The current international accounting rules do not allow trademarks and complementary IP that is developed in-house to be recognized as assets on corporate balance sheets.This exclusion of home-grown IP as financial assets deprives companies of an important way to demonstrate the value of their IP

186、 rights,limits management attention to IP,hampering its strategic contribution to the protection of creative and innovative competitiveness and longevity of companies.BUDGET IN TIMES OF RECESSION More legal work shifts from outside legal counsel to in-house.The overall volume of the legal work being

187、 done in-house likely can exceed 50%.Companies focus on predictable legal budgets,thus fixed-fee deals tend to increase.Companies become less willing to pay Tier 1 law firms to do routine work.The reduction in corporate and deal work and the increase in expenses and overhead typically lead to a decr

188、ease in profits.LITIGATION-ENFORCEMENT-PROSECUTION IN TIMES OF RECESSION Law firms tend to withstand downturns better than the overall economy does.But the effects of an economic crisis vary depending on the specific subfield of the law practice.It is not possible to draw a general conclusion about

189、the correlation between economic downturns and litigation tendency.Although there are also counterarguments,some sources assert that the litigation field is recession-proof.It is suggested that during economic downturns,companies and individuals facing cash shortages may turn to litigation as a sour

190、ce of funding.In other words,during downturns,litigation serves as a substitute for traditional sales.According to a contrary viewpoint,the high cost of legal proceedings and the uncertainty of the outcome make individuals and organizations hesitant to pursue litigation.It would also be quite challe

191、nging to collect damages from a failing company or a bankrupt company,even if the lawsuit concludes favorably.SECTION 2 Financial Impact of Recession40IP IN TIMES OF RECESSIONSTAFFING AND EMPLOYMENT IN TIMES OF RECESSION After the recession of 2008,the overall employment rate for new law school grad

192、uates continued to decline for six consecutive years,even though the national and legal economies recovered.The pandemic recession led to a decreased demand for legal services in general,as a result,law firms saw a drop in clients and a decrease in revenue.This forced many law firms to downsize.Many

193、 law firms raced to hire lawyers in 2021 and early 2022 to keep up with booming global dealmaking demand after the pandemic.But the market has shifted amid rising interest rates,high inflation,and recession fears.Lawyers and staff at big law firms are continuing to face layoffs as global deals take

194、a dive and client demand falters.Recommendations and Conclusion Better IP reporting and improved IP accounting standards would help companies,including SMEs,gain access to funding,which is generally harder in times of recession,especially for companies that rely on intangible assets.Accounting stand

195、ards should not require a blanket exclusion of trademarks and complementary IP that are developed in-house from recognition as assets on corporate balance sheets.Companies are focusing on predictable legal budgets.Therefore,they would prefer fixed-fee deals.Law firms may help generate revenue by hel

196、ping distressed businesses seek creative methods of resolving ongoing debt issues.It is important to recognize the sectors that are affected by a recession comparatively more and help them prioritize their legal work.It has been suggested that during economic downturns,companies and individuals may

197、turn to enforcing their IP rights as a source of funding,which could lead to compensation or license deals.Particularly,if lawyers are willing to base a significant portion of their fees on the outcome of the case,this could incentivize the initiation of lawsuits.However,this may not be a viable opt

198、ion in regions where monetary awards are generally low.Law firms should encourage their clients to collaborate with other companies or universities as IP partners.which would help cut R&D costs and payroll,in return for shared revenue.Companies may wish to revise the strategy of entering new markets

199、/jurisdictions,if any.A licensing agreement with a local company instead of making an investment during unpredictable times may be more beneficial.Law firms may help distressed companies review their IP registrations,identify the core rights,and abandon the remaining rights(or offer them for transfe

200、r/license to another company),which would cut administrative costs for monitoring.Not all IP rights will be aligned with business interests or be relevant during a recessionary time.This may also require review of businesses and potentially selling the businesses that are a liability rather than rev

201、enue generators.At the same time,recessionary times might be the best time for acquiring IP from companies in need of cash flow.SECTION 2 Financial Impact of Recession41IP IN TIMES OF RECESSIONA recession impacts the intellectual property(IP)ecosystem in many ways.Some of the major immediate impacts

202、 include:I.Reduced budgets allocated:This forces business owners to focus on their core brands markets and makes them less likely to oppose third-party marks or file cancellation actions and possibly even to delay the launch of new brands and/or products.II.Increased spend on technology:It appears t

203、hat both law firms and the in-house departments increase their spend on technology in times of recession.While law firms tend to do so to increase the efficiency of their work product,the in-house teams appear to do so owing to the budget crisis.III.Changes in staffing:Recessions have an impact on l

204、aw firm employment and there may be job losses or IP practitioners that leave a firm and may not be replaced.IV.Decline in M&A activity before a recession.However,companies that have the resources to invest may reap benefits as the research shows that companies that make acquisitions during a recess

205、ion are likely to see better shareholder returns in the long term.In summary,a recession tends to reduce the investment in maintaining and protecting IP assets but leads to greater investment in legal tech to gain efficiency in tough times.With the help of the following suggestions,trademark and IP

206、practitioners may be better able to cope with the impact of a recession.Management/efficiency measures:Adopt automation/management technologies Adapt processes and implement new technologies Companies:Negotiate fees and timeline for payment Firms:Adopt new fee structures(fixed fees or monthly retain

207、ers).Firms may offer an“all you can eat”retainer for trademark filings for a 12-month period to maintain a trademark filing flow during a recession.The long-term benefit of this fee option is that it may result in more contentious trademark work after the 12-month fixed fee retainer has expired flow

208、ing from the new marks that have been filed.SECTION 3Understanding the Potential Impact of Recession on Trademark Practitioners42IP IN TIMES OF RECESSIONProtection optimization.Prioritize territories/regions where biggest markets are allocated Selectively decide what to protect(word mark v.device,et

209、c.)Be selective in the countries to be covered by an international trade mark application.The client may limit the countries to key target markets during a recession Renegotiate fees or time of payment Develop new fee structure Generate efficiency to maintain enforcementStaffingAs concluded in the p

210、revious section,recessions have a significant impact on law firm employment,leading to job losses and increased competition for available positions.Generally,during a recession,a shift in staffingbe it from layoffs to a greater focus on and demand of paralegal workis seen.Additional staffing factors

211、 to consider:Promote paralegals and replace lawyers prosecution work with paralegals.Promote lawyers to engage in transactional/enforcement IP work creating room for paralegals in basic prosecution work.Firms:Promote flexibility and adaptability for lawyers to support other areas of the firm creatin

212、g space for paralegals.Use foreign attorneys with a favorable fee(less expensive)to process basic prosecution work.Litigation Budget restrictions are likely to affect more IP owners in a way that reduces the number of litigations and only target cases with strong merits.However,given the rise in the

213、 number of litigation funders in recent years,we may see more appetite for litigation,particularly if the prospects for recovery of damages is high,where litigation funders front the costs of litigation with IP owners paying little of the cost upfront.Section 2 of this report provides further in-dep

214、th analysis of the impact of a recession on litigation.Mergers&Acquisitions:This segment will look at the relationship between recession and Merger and Acquisition(M&A)activities.According to the World Bank,29 the world economy has experienced four global recessions over the past seven decades:in 19

215、75,1982,1991,and 2009;some also recognized a recession happen during Dot-com bubble(20002002)and the possible recession from COVID 19 in 2020.We can compare this information with the data by PwC to highlight the impact of M&A activities.30 29 https:/openknowledge.worldbank.org/entities/publication/1

216、946cab9-5b12-5dd9-a86a-9ba6888c546e 30 https:/ SECTION 3Understanding the Potential Impact of Recession on Trademark Practitioners43IP IN TIMES OF RECESSIONThe data from PwC clearly shows that M&A activities tend to reduce before recessions are recognized(grey bar).A possible explanation is that eco

217、nomic downturns create uncertainty over the valuation of companies,and the uncertainty means that the acquisition could be overpriced.As the stock market,and thereby,company valuation calculation during mergers and acquisitions are based on future earnings,M&A activities may fall well before the act

218、ual recession is recognized.31 However,for those who are willing to take the risk and have the cashflow to back it up,they are likely to reap the benefits.According to the PwC study mentioned above,companies that have engaged in M&A activities during a downturn see a 7.01 percent higher median share

219、holder return after 12 months,in comparison to those who did not.Research that appeared in the Harvard Business Review32 also suggests a similar conclusion.The HBR article looks at deal multiples and,after a recession,the deal multiples typically experience a V-shaped recovery.As an example,during t

220、he DotCom crisis,“Deal values plummeted from an average of 10.8x in the three years before the 2008 crisis hit to as low as 6.5x in 2009,before rebounding to the 10-year average of 11.6x by 2019.”A reduction or absence of resources to fund legal work,including for the protection,maintenance,and enfo

221、rcement of IP rights,will impact businesses differently,depending on the specific business concerned.Fast moving consumer goods brands may reduce spending on filing and prosecution,focusing on core markets only and reducing the scope of protection(not including any defensive filings).For enforcement

222、,resources are spent on straightforward cases with strong merits.Brand owners may file fewer opposition proceedings and consider filing cancellations later on when circumstances permit.31 https:/ Past M&A cycles and economic recessionsTotal volume and value of deals by US acquirers declined substain

223、tially during recent downturns,taking years to recover.*Preliminary DataSource:PwC analysis of Refinitiv data,National Bureau of Economic ResearchM&A value($billion)M&A Volume2,0001,5001,00050001990199119921993199419951996199719981999200020012002200320042005200620072008200920102011201220132014201520

224、162017201832 https:/hbr.org/2020/05/the-case-for-ma-in-a-downturn SECTION 3Understanding the Potential Impact of Recession on Trademark PractitionersInformation or data obtained from National Bureau of Economic Research.44IP IN TIMES OF RECESSIONSoftware companies generally spend less on trademark f

225、ilings,unless they roll out products with new brands regularly.Recession may not affect the filing trend in this sector.These companies may spend more on enforcement of their rights,with a view to securing more commercial licenses,therefore increasing revenue during hard times.Similarly,patent heavy

226、 companies,such as those involved in pharmaceutical,cosmetics,or chemical industries might use budgets on research and development and attempt to protect know-how and new innovations as trade secrets,hence reducing filing fees.If the need for patent filings arises,such companies may focus on filing

227、in core markets only.Some may choose to increase enforcement activities with a view to obtaining cross-licenses of patented technology,thereby offsetting the need to pay others for use of their patents and reducing costs to the business.Technology:In this section we examine the impact of recessions

228、on technology,based on external research,while in the next section(Section 4),we assess the impact of recessions on technology based on a comprehensive survey we conducted with the INTA membership.There is no standard definition of“legal tech”and what it entails.For our discussion,we can generally d

229、efine it as any“application of scientific knowledge for practical purposes”used to improve the functions carried out by IP professionals.Based on research from Thomson Reuters Australia in 2022,33“legal tech”can be divided into the following areas:Legal research Know-how and precedent solutions Docu

230、ment automation solutions Reporting and dashboard solutions Document drafting solutions Legal operations management solutions Risk and compliance solutions Business and finance management solutions 33 https:/.au/content/dam/ewp-m/documents/australia/en/pdf/other/tech-and-the-law-2022-report.pdf SECT

231、ION 3Understanding the Potential Impact of Recession on Trademark Practitioners45IP IN TIMES OF RECESSIONOther“legal tech”solutions include the following:34 Case management software Billing and tracking tools Document management software Online payment solutions Password management PDF converters Di

232、ctation tools Secure communication platforms This is hardly a comprehensive list.We have found other sources that mention automation,A.I.,blockchain,cloud-technology,virtual legal assistants(VLAs),and cybersecurity.35Surveying various external research and papers,we can highlight that legal tech has

233、 the following positive and negative impacts on IP during times of recession:Positive impacts:Technology adoption during recession could reduce overall cost structure by automating processes and reducing human costs.We may understand such cost reduction both from law firm and in-house perspectives.F

234、or law firms:Research by a legal tech vendor suggests that“extensive use of well-implemented technology correlates with firm success.”35 The 2021 research finds successful firms(No definition was provided in the research.)are 37 percent more likely to be using online payment solutions,41 percent mor

235、e likely to use client portals,and 46 percent more likely to use client intake and client relationship management(CRM)solutions.The Clio Legal Trent Report 2022 suggested that firms with technology adoption,specifically,a cloud-based Legal Practice Management(LPM)solution,have higher client satisfac

236、tion,employee performance and satisfaction,and revenue.34 https:/ or data obtained from Clio Legal Trend Report 2022.35 https:/www.americanbar.org/groups/business_law/resources/business-law-today/2022-july/top-5-legal-technology-trends https:/ 3Understanding the Potential Impact of Recession on Trad

237、emark PractitionersCloud-based lawyers run better law firms%who say each of the following is good or very goodClient satisfactionEmployee PerformanceEmployee satisfaction*Legal practice management(LPM)RevenueUses cloud-based LPM*software86%60%66%52%63%52%63%47%Does not use cloud-based LPM software46

238、IP IN TIMES OF RECESSIONLaw firms are also facing increasing pressure to adopt technology to enable remote working arrangements.According to research by BigHand,“45%of staff would look for a new job if told they had to attend the office full-time.Almost as many would leave if they had to work at the

239、 office more than three days a week.”36 Technology is necessary to enable a more flexible working environment which helps with retaining valuable talent.For In-house counsel:Deloittes“Technology in the legal department”report37 claims that technology is one component in legal function transformation

240、,and its effectiveness depends on the quality of the legal teams operational strategy.To overcome the“not knowing what they dont know”problem in technology adoption,some organizations have created the Chief Legal Operating Officer(CLOO)role to focus on transforming legal operations,which includes te

241、chnology transformation.Gaining efficiency seems to be one of the most important drivers for technology transformation for in-house teams.Citing survey results in the In-House Legal Technology report,Lawvu reported that“80%of all respondents believe that time spent on manual daily activities takes t

242、ime and effort away from working on larger business goals or affects their ability to deliver services in a timely manner.”The report also suggested that burnout due to workload ranked the highest among in-house legal teams,and this has resulted in lower customer service response time and lower busi

243、ness growth.The lack of integration between technology platforms is said to be f in-house counsels number one reason for their hesitation to implement legal tech;for those who have implemented legal tech,32 percent expressed the lack of integration between platforms as their key concerns.The adoptio

244、n rate of deeper integration and automation will be discussed and assessed further through our survey.36 https:/ https:/ Legal tech budgets are growing amid crisisAverage legal technology budget as a percentage of total legal department budget*Legal practice management(LPM)14702017 2018 2019 2020 20

245、21 2022 2023 2024 20251.5x2.63.23.912.03.0 x2.6 SECTION 3Understanding the Potential Impact of Recession on Trademark PractitionersInformation or data obtained from Gartner.47IP IN TIMES OF RECESSIONIn terms of cost and budget,a BigHand study38 suggests that Legal Tech adoption can lower operational

246、 costs by reducing back-office inefficiencies.Gartner has reported that the investment in legal tech is projected to increase to 12 percent of total legal budget.Both of these figures suggest that legal tech has the potential to reduce pressure for budget reduction during recession.Our survey looks

247、at whether legal counsel consider such an investment to be worthwhile and where it falls short.Negative impacts:External research and data on the negative impacts of legal tech implementation is hard to find,possibly because most research is conducted by vendors or other commercial entities.This sec

248、tion summarizes some potential downsides of technology implementation(further insights of the negative impact or concerns of legal tech implementation can be found in our survey results).For Law firms:Pricing pressure:Technology-enabled cost reduction and automation may lead to increased pricing pre

249、ssure.For example,it is common for law firms to have an hourly pricing model.Technology could reduce the overall time required for certain tasks or,alternatively,the cost savings may be passed directly to the client,leading to reduced revenue.Job security:A.I.development has been flagged as a potent

250、ial threat to legal professionals.While this is not directly related to recessions and it may require a longer time to see the actual impact,the advancement in A.I.technology may create a false impression among the general public that professional services can be replaced.Imbalanced benefits:Technol

251、ogy improvement requires larger upfront investment for longer-term cost savings.Smaller firms may not have the required funding,especially during recessions,to invest in technology.This in turn provides larger law firms with a more competitive advantage.This impression seems to be shared among our r

252、espondents in the INTA survey,however,more research may be needed,as conflicting information is also available.Research by Clio found that mid-sized firms are the ones falling behind,with only 27 percent reported to be using cloud based LPM software compared to 73 percent of smaller firms.They are a

253、lso less likely to use online solutions for video conferencing,electronic payments,e-signatures,and cloud-based data storage.38 https:/ 3Understanding the Potential Impact of Recession on Trademark Practitioners48IP IN TIMES OF RECESSION39 https:/ lead in technology adoption%using each of the follow

254、ingVideo conferenceingCloud-based data storageCloud-based practice managementOnline electronic paymentsE-signaturesWebsite design tools Intake and client relationship management CRMEmail scheduling Non-cloud-based practice management88%86%85%82%75%55%20%3%SolosNon-Solos55%52%52%32%33%24%11%66%61%Inf

255、ormation or data obtained from Clio“Legal Trends for Solo Law Firms”report 2023.For in-house:The biggest threat of legal tech implementation for in-house is probably the issue of Return on Investment(ROI).Technology implementation does not guarantee efficiency gain,and failed technology implementati

256、on is common.According to a McKinsey-Oxford study,39 45 percent of IT projects experience cost overrun,and 56 percent see a shortfall on the overall benefits.In a separate study by BCG in late 2020,it was estimated that 70 percent of digital transformation projects didnt meet desired outcomes.Succes

257、sful technology implementation that drives positive long term efficiency gain requires planning and executive support40 which might be hard to come by if the implementation is driven by fear of recession or a blind faith in the benefits of technology improvements.Only 30%of Digital Transformations a

258、re SuccessfulSuccess score1WoeWorryWin100806040200226443046810Limited value created(,50 of target);no sustainable changeShare of transformations(%)Information or data obtained from BCG.40 https:/ SECTION 3Understanding the Potential Impact of Recession on Trademark Practitioners49IP IN TIMES OF RECE

259、SSIONThis section is the outcome of an analysis of the INTA 2023 Survey of Trademark Practitioners and Technology conducted for this project.The section above,based on our external research,helps in understanding the potential impact of recession on IP,particularly if technology was adopted for mana

260、ging the IP assets.This section evaluates the relationship of legal tech and recession based on the data collected from our survey of INTA members.The goal of the survey was to evaluate the impact of technology in the following areas:How technology impacts process and efficiency The impact of Intern

261、et/online infringements The business impacts of technology adoption While Generative A.I.has been a topic of interest,we did not include it in the survey.We are still at the beginning stages of understanding its practical applications for in-house and law firms.More time will be required to survey i

262、ts actual impact.We had a total of 161 IP professionals respond to the survey,with 60 percent in law firms/service providers and 32 percent in-house.In terms of geographical spread,44 percent of respondents were from the U.S.and 24 percent were from Europe.Only 18 percent were from the Latin America

263、n and Caribbean region,10 percent from Asia Pacific region,and 3 percent from the Middle East and North Africa.We have taken this distribution into account when formulating our conclusions.SECTION 4How Stakeholders use Technology in Times of Recession50IP IN TIMES OF RECESSIONHow does technology imp

264、act processes and efficiency?Without a standard definition of what“legal tech”is,the INTA survey took a more generalist approach to answer three key questions:1.Has technology been able to improve efficiency in a cost-effective way in non-recession environments?2.Is there a potential to improve such

265、 efficiency gain through deeper technological automation and integration?3.Would these improvements help legal professionals to counter the impact of a recession?Has technology been able to improve efficiency in a cost-effective way under non-recession environments?The INTA survey asked the general

266、question“Has your firm/company used technology to gain efficiency in managing IP portfolios locally or internationally(Cloud or locally hosted)?”The question aimed to establish a baseline of the respondents familiarity with technology in this context.About 90 percent of respondents have tried implem

267、enting technology (including the 2 percent categorized as“other,”based on their comments).The remaining 10 percent who have not yet explored technology to improve efficiency are fairly equally spread across all geographical locations.Figure 1:Has your firm/company used technology to gain efficiency

268、in managing IP portfolios locally or internationally(cloud or locally hosted)?SECTION 4How Stakeholders use Technology in Times of Recession51IP IN TIMES OF RECESSIONFigure 2:Does the said software improve your work and cost efficiency?Out of those who have used technology to improve efficiency,only

269、 61 percent find that it brings significant improvement in both work processes and cost-effectiveness.The breakdown between in-house and law firms is similar.The response seems very consistent across North America,Europe,and Asia.SECTION 4How Stakeholders use Technology in Times of Recession52IP IN

270、TIMES OF RECESSIONPractice type Insignificant improvement Moderate improvement Significant improvement In-house 13.33%26.67%60.00%Law firm/Service provider 9.38%32.81%57.81%Grand Total 10.64%30.85%58.51%The idea that technology has been creating positive value is confirmed by the next question,“Was

271、the cost of implementing the solution worthwhile?”After consolidating the answers from the“other”category,where most have not yet adopted technology,on average 65 percent of respondents agreed that the investment in technology implementation was worthwhile.The percentage that reported experiencing a

272、 significant improvement of efficiency through the use of technology is a bit lower,at 58.51 percent.Figure 3:Was the cost of implementing the solution worthwhile?Practice type Not worthwhile Worthwhile In-house 38%63%Law firm/Service provider 32%68%Average 35%65%SECTION 4How Stakeholders use Techno

273、logy in Times of Recession53IP IN TIMES OF RECESSIONHowever,this statistic also reveals that most respondents expect technology to bring significant improvements and even moderate improvements are mostly considered“not worthwhile.”Is there a potential to improve such gain in efficiency through deepe

274、r technological automation and integration?Different law firms and in-house companies often use different IP management software designed to optimize their own internal IP management.IP management is a very data heavy subject with numerous data points such as jurisdictions,classes,and deadlines.The

275、ability to automate data exchange could represent significant overhead savings,which may be very helpful during recession.Integration of systems could also be a highly effective way to retain clients for law firms,as it creates a significantly higher barrier for changing service providers.In general

276、,workflow automation is also a key global trend.According to the“Future of Jobs 2020”report by the World Economic Forum,“just over 80%of business leaders report that they are accelerating the automation of their work processes.”Another report claimed that workflow automation can“reduce repetitive ta

277、sks by 6095%,accelerate approval processes by 34%,improve business processes by 60%,save organizations up to 77%of their time spent on routine tasks,help scale operations for 70%of business owners and increase data accuracy by 88%.”While 60 percent of IP professionals agreed that technology has prov

278、ided efficiency and improvement,the goal of the next section of the survey was to examine whether the legal professional can ride on the general technology trend of integration and automation effectively.Note:In contrast to automating workflow internally,which is already reflected in the above secti

279、on on IP management software usage,the following section focuses on the next step of automation and integration between service providers and their clients.SECTION 4How Stakeholders use Technology in Times of RecessionOn Recession and Cost Effectiveness of Legal TechMost repondents agreed that techn

280、ology adoption brings significant improvement to their work.As such,we can reasonably presume that technology adoption would be an effective tool to mitigate the effects of a recession.54IP IN TIMES OF RECESSIONAdoption rate:Our survey showed that 31 percent of in-house legal teams have already adop

281、ted some level of integration with their service providers to automate IP management processes beyond internal workflow.Notably,100 percent of the respondents that implemented such process integration are from North America and Europe.According to a Gartner report,nearly 90 percent of developers are

282、 using application programming interfaces(APIs),and the number of third-party APIs used in applications is expected to triple by 2025.This may reflect that the ability for integration is already present in the 3rd party management software(unless it is self-developed),but in-house teams have yet to

283、demand or utilize such capability.This is consistent with the result that only 26 percent of law firms have received requests from their clients to have technical integration of workflow with them.As of this writing,there is a preference from in-house teams to ask law firms to use their IP managemen

284、t systems and adopt them into the firms workflow.Since there is no technical integration between the in-house teams and law firms systems,this will most likely result in duplication of workload,thus reducing efficiency overall and rendering it an ineffective tool to counter the impact of recession.F

285、igure 4:(For In-house)Have you adopted automation capability(such as APIs)to enhance integration with your firms/service providers?SECTION 4How Stakeholders use Technology in Times of RecessionVENDORS:There seems to be a good market potential for Legal tech vendors in the Asia Pacific market,conside

286、ring the current adoption rate is low.55IP IN TIMES OF RECESSIONFigure 5:(For law firms/service providers)Has your client asked you to adopt its IP management system into your workflow?Figure 6:Have you been asked to integrate your IP data with your clients system using API(Application Programming I

287、nterface)or other similar automation methodology?Reason for the lack of adoption(in-house):For in-house counsel who have developed or implemented further automation with vendors,the vast majority(91%)experienced improvement in their IP management.However,only 36 percent described the improvement to

288、be significant(in comparison to 61%to the implementation of general technology solution).The percentage of respondents who think the technology is ineffective remains similar at around 10 percent.This means 27 percent more respondents find further technical integration to be moderately effective.Whi

289、le this question was directed at in-house teams,the question on general technology effectiveness was directed at both in-house teams and service providers.Given that the responses from both groups are fairly similar,the comparison here can still apply.SECTION 4How Stakeholders use Technology in Time

290、s of Recession56IP IN TIMES OF RECESSIONFigure 7:How would you describe the benefits of the automation/integration function,in comparison to using IP management software independently?Figure 8:What is the main reason for the lack of further integration?(Note:this question allows multiple answers.)Th

291、e question listed out four common issues for technology adaptation:cost,technical expertise,workload,and priority.Of these,58.3 percent and 45.8 percent of respondents listed priority and workload respectively as the main reason for the lack of further technical integration.These two reasons provide

292、 a similar outlook that respondents are not unwilling to implement further integration,but that it is a matter of timing and resources.Half of the respondents cited cost as the key obstacle.According to CRM Softwares research,US$3.69 trillion were spent on IT worldwide in 2020,and 39 percent was spe

293、nt on software and integration,which is the largest category of spending.41 The seemingly high cost of integration could also be one of the reasons why more respondents find it to be only moderately effective.It is surprising that only 29.2 percent of in-house teams quoted technical expertise as the

294、 key obstacle.A possible explanation could be that in-house teams would have their IT division to support the development,and the technical problem is more of a workload and cost issue in liaising with the IT team.SECTION 4How Stakeholders use Technology in Times of RecessionOBSERVATION:The high“mod

295、erate improvement”feedback from in-house counsel is alarming.In-house counsel find using software to improve internal workflow to be valuable,but problems still exist.Software vendors may need to consider how data between different applications can be combined.The demand is clearly there.41 https:/

296、IN TIMES OF RECESSIONReason for the lack of adoption(law firm and service providers):One of the reasons for data integration is to address the issue that different IP management software is being used by different parties,which creates additional overhead in managing data.The survey first asked whet

297、her law firm clients are asking them to adopt the clients IP management software into the firms workflow.A significant 40 percent of respondents answered yes,reflecting that in-house lawyers are demanding their service providers adopt the use of the in-house teams own software to minimize cost to th

298、e in-house teams.SECTION 4How Stakeholders use Technology in Times of RecessionSample Survey ResponsesThere are several different systems on the market and each client chooses among them so our team has to know them all.And it takes more time than simply reporting.I believe these different tools giv

299、e more order to the client,but for us law firms,is the same.At the end,these tools are for the benefit of the client,more than for the benefit of the law firm.58IP IN TIMES OF RECESSIONThe survey further asked law firms and service providers if this practice improves or reduces their work efficiency

300、.The result is quite negative:66 percent responded with a negative sentiment,within which 21 percent claimed to experience no impact and 45 percent claimed that their work effectiveness was reduced.The comments from the respondents(see Figure 9)confirm our original assumption.This creates a case for

301、 further data integration and automation to reduce overhead.Figure 10:What are the key problems you faced when implementing the integration?(Please select all that apply.)Workload is by far the most important factor with 73.7 percent of respondents claiming it is the key problem.This is interesting,

302、as the reason for integration in the first place is that it is supposed to reduce workload.A possible explanation would be that law firms may not have IT resources,unlike their in-house counterparts.Moreover,a lot of the work for the integration must be done by them personally,including the technica

303、l aspects.This would significantly increase the workload required to even start thinking about integration.This presumption is supported by the fact that technical expertise is listed as the second key problem.SECTION 4How Stakeholders use Technology in Times of Recession59IP IN TIMES OF RECESSIONFi

304、gure 11:What are the key problems you faced when implementing the integration?Comparison Rank 1 Rank 2Rank 3Rank 4In-house Priority Cost Workload Technical expertise Law firms Workload Technical expertise Cost Priority SECTION 4How Stakeholders use Technology in Times of Recession60IP IN TIMES OF RE

305、CESSIONThe impact of the Internet/online infringement SECTION 4How Stakeholders use Technology in Times of RecessionOn Recession and Integration/AutomationWhile most respondents agree that the adoption of technology can improve efficiency and that the associated cost of doing so is worthwhile,the re

306、spondents seem to be more divided when it comes to further technological integration.It seems that the underlying issues of using multiple different software systems can eventually lead to some performance issues.In-house lawyers always have the option to ask service providers to use their software,

307、thereby reducing their management cost.However,they also seem to be more open to the idea of technological integration.The obstacles preventing them from doing so now are more temporary(i.e.,priority),On the other hand,law firms seem to have less appetite for data integration with clients.Overall,us

308、ing more advanced technology applications to mitigate the impact of recession seems to be less effective,considering integration would require a much longer lead time to impleement and the current appetite and adoption are both relatively low.On Recession and Overall Technology AdoptionOverall,a maj

309、ority of 63%of respondents agree that technology is an effective tool during recession,and they would recommend their firm/company invest in technology during such challenging economic periods.Comments for both and against are listed in Appendix 1.Figure 12:Considering your answers to all the above

310、questions,would recommend that your firm/company invest in IP management software to counter the impact of an economic downturn?61IP IN TIMES OF RECESSIONAnother area that is of great concern in relation to“technology”and“IP”is the impact of Internet.According to CyberSmart,42 an initiative by the U

311、K Government,the ongoing economic downturn will result in a significant rise in cyberattacks,including phishing,ransomware,and scam.U.S.Federal Bureau of Investigation(FBI)data also shows that online fraud jumped 87.5 percent in a year during the 2008 global financial crisis.43 IP counsel may be res

312、ponsible for or may assist in resolving these issues.Online issues will also affect IP counsel more directly with the increasing number of fake websites,social media accounts,misuse of trademarks by partners,cybersquatting of domain names,and illicit trade and counterfeiting(referred to here as onli

313、ne infringements).A report by the Economist suggests that during economic downturns individual budgets are squeezed,which inadvertently increases demand for illicit goods,especially through e-commerce channels.44 Our respondents seem to agree with this perspective,with 81 percent of them having expe

314、rienced or anticipating an increase in online infringements during recession.The survey attempts to understand how IP counsel are preparing for or reacting to these increasing threats during recession.The questions can be divided into two parts:1.Preparation Are IP counsel prepared to face increasin

315、g online infringement during recessions?2.Enforcement What are the issues faced by IP counsel when dealing with online infringement?(Note:Online infringement is an area that requires a dedicated larger-scale study;this brief study should only be considered a rough guide).SECTION 4How Stakeholders us

316、e Technology in Times of Recession42 https:/cybersmart.co.uk/blog/why-cybercrime-increases-during-a-recession/43 https:/ 44 https:/ 62IP IN TIMES OF RECESSIONPreparation The survey starts with two questions regarding“digital assets.”Digital assets are a relatively new concept for which the definitio

317、n is still evolving.Here are two aspects:1.Digital assets as representation of online identity:This is the definition used mostly in the Online Brand Protection industry,where digital assets are defined as“the properties that help establish an online presence and identify who each of us are when con

318、necting with others on the internet.”An example of the“digital identifier”kind of digital asset is domain names or social media accounts which a brand can own and that digitally represents what the brand is.Online infringers often target these assets to create confusion,and eventually lead to the fi

319、nancial gain of the infringers.2.Digital assets as representation of digital value:This definition is typically used in the finance sector and has been popularized by the Web3 industry to describe NFTs and Cryptocurrency.Investopedia defines a digital asset as“generally anything that is created and

320、stored digitally,is identifiable and discoverable,and has or provides value.”The survey does not dive into the definition of digital assets,but instead lists some common digital assets under both types of definition(in Question 17).As digital assets are unique identifiers that either provide value o

321、r serve as the digital identity of the brand itself,we can presume that the online infringement issues mentioned above would be one of the key targets for online brand infringements,and we can assess whether IP counsel are prepared to counter increased infringement by looking into how they manage th

322、eir digital assets.Figure 14:Has your organization/client registered or purchased digital assets as part of your“technology roadmap”?SECTION 4How Stakeholders use Technology in Times of Recession63IP IN TIMES OF RECESSIONFigure 15:What type of assets?The survey showed that 72 percent of respondents

323、do not register or purchase digital assets as part of their technology roadmap,but if they do,domain names are by far the most popular asset type that they protect,with 93 percent of respondents who do register or purchase digital assets as part of their technology roadmap having a plan for their do

324、main name portfolio.On the positive side,domain names,as the most basic infrastructure of the Internet,received relatively more attention.On the negative side,the vast majority of respondents seems to be poorly prepared if there is an influx of online infringements due to recession.Respondents do no

325、t appear to hold a different opinion of digital assets and traditional IP assets(such as a trademark portfolio),with 65 percent of respondents saying they would treat them the same as any other IP assets.Only 19 percent of respondents would increase the holding of digital assets to better defend aga

326、inst online issues during recession.SECTION 4How Stakeholders use Technology in Times of RecessionOBSERVATION:Additional discussion among the INTA community on the definition of digital assets and their impact on IP could be beneficial,especially in the area of digital identity.Such discussion may a

327、dvance our understanding of the relationship between IP and the Internet,which is built upon the concept of digital identifiers.64IP IN TIMES OF RECESSIONThis survey did not focus on how IP professionals handle trademark portfolios during recession;however,since the majority of respondents indicated

328、 that they would handle digital assets the same as any other IP assets,it may be worthwhile for us to briefly outline how IP professionals handle IP assets during recession.According to an article published in World Trademark Review45,since 2000 there were two periods where trademark filing experien

329、ced negative growth2001 and 20082009.Another notable period is 20182019 where the data seems to suggest a trough preceding a massive surge in 2020.This timeline corresponds exactly to the recognized pandemic recession timeline,although not all reports recognize that there was a recession.The surge l

330、ikely was triggered in 2020 as trademark applications“flowed from eCommerce businesses thriving during lockdowns.Then,in 2021,the massive popularity of NFTs and the full46-scale launch of NIL name,image,likeness efforts brought brand owners into new arenas of trademark protection.”Figure 16:During a

331、n economic downturn,if you were faced with a significant budget cut,which of the following statements would you agree with:SECTION 4How Stakeholders use Technology in Times of Recession45 https:/ https:/licensinginternational.org/news/trademark-application-surge-leads-to-longer-wait-times/#:text=Thi

332、s%20recent%20surge%20in%20requests,new%20arenas%20of%20trademark%20protection65IP IN TIMES OF RECESSIONFigure 17:USPTO Trademark filing growth by year20002021 SECTION 4How Stakeholders use Technology in Times of RecessionOn Recession and IP Asset ManagementThe trend suggests that IP professionals wi

333、ll reduce trademark holdings at a rate of 8 to 9 percent during recession,while lesser recessions or economic slowdowns will see a trough in filing growth but not enough for IP professionals to reduce their trademark holdings.(This is only based on U.S.data,so more research may be required.)Some research suggests that patent monetization could be a viable strategy for weathering the impact of a re