WIPO Financial Situation Strong, Member States to Decide Use of Available Reserves

Geneva, July 24, 2007
PR/2007/503

A combination of strong demand for WIPO’s services to the private sector and strict budgetary discipline means that the financial situation of the World Intellectual Property Organization (WIPO) is strong and has led to a situation where available reserve funds have exceeded a target level established by member states. The Program and Budget Committee (PBC) will make its final recommendation in early September to the annual session of the WIPO Assemblies, which will meet from September 24 to October 3, 2007, on options to use these available reserve funds. Also, work on the construction project for a new administrative building for WIPO is set to begin early 2008. The deadline for the submission of bids for a general contractor was July 23, 2007.

WIPO is a largely self-funding agency, drawing 95% of its income from services to the private sector. These services facilitate the process of obtaining international protection for patents, trademarks and designs. Mrs. Carlotta Graffigna, WIPO Controller, said “thanks to healthy demand for WIPO’s services to the private sector, and continuing implementation of strict financial discipline, the Organization is in a particularly healthy financial situation. As a result, member states are now considering a number of options for the utilization of the reserves that exceed the target level fixed in the year 2000.” 

“At the beginning of 2004 there was an estimated deficit of over 40 million Swiss francs. A strict budgetary policy, coupled with strategic rationalization and cost-saving measures allowed the Organization to close the 2004/05 biennium with a surplus of 11.5 million Swiss francs,” Mrs. Graffigna said. She added “With an estimated surplus of 33 million Swiss francs at the end of the 2006/07 biennium, the level of the Organization’s reserves will rise to an estimated 159.9 million Swiss francs, or 55.5 million Swiss francs above the target level.” 

Member states are considering five options for using reserve funds that are in excess of the target level. These are:

1. Financing of activities relating to the WIPO Development Agenda.
2. Upfront partial payment for the construction of a new administrative building for WIPO (to be financed by a bank loan).
3. Development of an Enterprise Resource Planning (ERP) project for WIPO.
4. Establishment of a new information technology platform for the Madrid System for the International Registration of Marks.
5. Upgrading the security standards of the Organization.

Another way to look at the surplus is eroding reserves through lower income. In this connection, the United States of America has proposed a 15% reduction in the fees paid by users of the Patent Cooperation Treaty (PCT) which would be effective from January 2008. The PCT is a WIPO-administered multilateral treaty that facilitates the process of seeking patent protection in multiple countries. This proposal would result in a proportional reduction of the Organization’s income from 2008.

With respect to the new construction project, member states were informed at a recent meeting of the PBC that all timelines relating to the project’s preparatory work have been met and that construction is expected to begin in February 2008. The deadline for the submission of bids for a general contractor, which will execute the construction of the building work, was July 23, 2007. 

The September meeting of the PBC is also expected to make a recommendation to the WIPO Assemblies regarding the program and budget proposed by the Director General for the 2008/09 biennium. At a recent PBC meeting, member states conducted a first reading of the proposal, which envisages a level of expenditure of 630.2 million Swiss francs, for an estimated income of 646.8 million Swiss francs.