Belt and Road Initiative and Its Effects on Intellectual Property: The Case of Italy

October 1, 2019

China launched the ‘Belt and Road Initiative’ (BRI) in October of 2013 designed by Xi Jinping. It covers over 60 percent of the world’s population and a third of the global GDP. Recently, Italy has publicly announced its support and has joined the initiative, causing inner turmoil in the European community and raising questions
regarding its impact on intellectual property rights and the safety of European businesses. The importance that the BRI has on Intellectual Property (IP) is determined mainly by whether there is the establishment of effective intellectual property systems between the engaged community.

With the development and establishment of the initiative, countries have rightly started to question whether the variations in IP systems between the involved countries exposes investors to additional risks; as obtaining and maintaining intellectual property involves more significant risks, difficulties, and more copious amounts of disputes. On the other hand, a properly functioning intellectual property system helps attract foreign direct investment and thus can lead to a greater transfer of technology and knowledge, creation of more jobs, accelerated development of human capital, and the generation of increased tax revenues.

This paper researches the potential effects of the ‘Belt and Road initiative’ on intellectual property rights and trade, with a focus on the Chinese relationship with Italy and the eventual ramifications for the collective European market. It aims also to provide decisionmakers, addressing specifically the Italian Government, with policy recommendations with regards to the next developments of the BRI memorandum with China.

Intellectual property rights, in fact, are a crucial area of interest for Italian businesses and are defining factors in determining competitiveness, especially for the Made in Italy brands and manufacturers. Intellectual Property (IP) helps to secure return on investments with regards to innovation, and profoundly affects small to medium-sized organizations (SME). Italian SMEs represent the core of Made in Italy businesses and could be negatively affected by a policy and regulation breach in protecting IP rights. IP is not only a way to defend innovations from competitors, but also acts as a source of cash through its licensing, sale, and appeal to consumers and investors.

Intellectual Property Rights infringement is a significant concern for businesses as it can lead to a loss of business, revenue reputation, and competitive advantage by providing alternate sources for products that have the possibility of otherwise being identical to the original product. In Italy, much of its revenue is based off brand value and reputation. With increased numbers of counterfeit goods, the Italian economy would suffer greatly, and businesses could be put in jeopardy.