Country Perspectives: Türkiye's Journey

UnlockingIP-backedFinancing Series CountryPerspectivesTürkiye’sJourney UnlockingIP-backedFinancingSeries CountryPerspectives Türkiye’sJourney Tableofcontents Disclaimer4 Acronyms5 Executivesummary6 Türkiye’sjourney7 Introduction7 Essentialsof“IP-backedfinancing”9 FinancingofTurkishbusinesses9 TheroleofIPvaluationinaccessingfinance11 AccountingofIPassets11 Türkiye’sprocessinestablishinganIPfinancesystem12 TÜRKPATENT14 Government-BackedFunds14 PreparatoryworkforestablishinganIP-backedfinancingsystem16 NegotiationswiththeCreditGuaranteeFund(KGF)16 Conclusion18 Türkiyecasestudies20 Casestudy1:DermisPharmaSağlıkveKozmetikÜrünleriA.Ş.21 Casestudy2:Pelemir(CephalariasyriacaL.)Plant23 Endnotes24 3 Disclaimer TheviewsexpressedinthispublicationarethoseoftheauthorsanddonotnecessarilyrepresentthoseofWIPO. 4 Acronyms CAPCYBERPARK AcceleratorProgram CISOPCompetitivenessandInnovationSectorOperationalProgramme EBİLTEMEgeUniversityScienceand TechnologyApplicationandResearchCenter ECMIEuropeanCapitalMarketsInstitute EUEuropeanUnion GDPGrossdomesticproduct GIIGlobalInnovationIndex IASBInternationalAccountingStandardsBoard IFRSInternationalFinancialReportingStandards IPIntellectualproperty IPRIntellectualpropertyright KGFCreditGuaranteeFund KOSGEBSmallandMediumEnterprises DevelopmentOrganization OECDOrganisationforEconomicCo-operationandDevelopment PCTPatentCooperationTreaty POAPublicOversightAccountingandAuditingStandardsAuthority R&DResearchanddevelopment SMESmallandmedium-sizedenterprise TASTurkishAccountingStandards TEBTürkEkonomiBankası[TurkishEconomyBank] TFRSTurkishFinancialReportingStandards TIMTurkishExportersAssembly TTOTechnologytransferoffice TÜRKPATENTTurkishPatentand TrademarkOffice TÜRKSMDTurkishIPValuation EngineeringandConsultancyServicesInc. TÜBİTAKScientificandTechnological ResearchCouncilofTürkiye WIPOWorldIntellectualPropertyOrganization YTUYıldızTechnicalUniversity 5 Executivesummary Today,weareenteringapromisingstageinharnessingtheadvantagesofinnovation.Thegrowingrecognitionofthefinancialbenefitsofintellectualpropertyhasledtonationalgovernments,aswellasinternationalorganizations,todeveloppoliciesandtakeactiontobuildanenablingenvironmentfor IP-backedfinancing.Türkiye,withitswell-functioningintellectualproperty(IP)systemanditspositionasoneofthetopcountrieswithanincreasingnumberofIPapplications,isfocusingonestablishingarobustIP-backedfinancingmechanism. Theneedtoaccessfinancialcapitalstandsasamajorchallengefortheinnovationecosystem,aswellasthebusinessworld.Moreover,maintaininganddevelopingresearchanddevelopment(R&D)activitieswhilesimultaneouslyinvestinginthecommercializationoftheirexistingintangibleassetsarenoteasyaccomplishmentsforrelativelysmallbusinesses. Besidestheimmenseamountofgovernment-backedfundsandsubsidiesdirectedtoR&Dactivitiesandtheprotectionofintellectualpropertyrights(IPRs),Türkiye’scommitmenttofacilitatethecommercializationofIPassetsisrootedinthehighestlevelofthecountry’spolicies.ItisembeddedinTürkiye’sNationalStrategytoimplementvariousmethodswhichcapitalizeonIPRsthatbothmeettherequirementsofthebankingsectorandaddressfundingproblemsofbusinesses,particularlythoseofsmallandmedium-sizedenterprises(SMEs). EnablingtheuseofIPRsascollateralisoneofthenoveltiesbroughtbythenewTurkishIPlegislationin2017.ThishasbeenanimportantfoundationinTürkiye’sjourneyofputtingIP-backedfinancingintopractice.Furthermore,anotherpivotalmilestonewastheestablishmentofTurkishIPValuationEngineeringandConsultancyServicesInc.(TÜRKSMD)thatprovidesservicesonIPvaluation,venture capitalpartnershipandindustrialpropertyportfolioconsultancy.ItisaffiliatedwiththeTurkishPatentandTrademarkOffice(TÜRKPATENT). TheinabilitytostandardizeandunifyIPvaluationthroughamethodthatwouldenablethebankingsectortoacceptIPRsascollateralhasledTürkiyetosearchforotherwaystoendorseIP-backedfinancing,includingamodelthatoperatesthroughintermediators(personalguarantees).Ifsuccessful,thisinitiativecanpaveanewwayofbridgingthefinancinggapamongenterprises,positionIPRstobeastrongtoolinsecuringcapitalinTürkiyeandcontributesignificantlytotheinnovationecosystemasawhole. 6 Türkiye’sjourney Introduction TürkiyehasundertakenvariousstepstoenableaneffectiveandvibrantIPecosystemandhascontinuedtoimproveitseffortstowardsfurtherdevelopingitsachievements.Actingwiththe“NationalTechnologyMove”vision,strengtheningtheindustrialpropertyportfoliohasbeenoneofitscorefundamentalconcerns. Türkiyehasawell-functioningIPsystemwithitsmodernlegislation,administrativestructure,specializedIPcourts,enforcementagenciesandinstitutionalizedattorneysystem.With this,TürkiyehasthepotentialtopositionitselfasanevenmoreactivecontributortotheimprovementoftheIPsysteminitsregion.Onthisnote,positivedevelopmentshavebeenachievedoverrecentyears.ThecountryhasestablishedspecializedIPcourtsandspecializedpolicedepartmentsforIPinfringementsandhasadoptedanewIPCodewhich,amongothers,updatestheadministrativestructureandcapacityofTÜRKPATENT. ThemainintellectualpropertyrightsinTürkiyecoverpatents,utilitymodels,trademar