A Global Integration of Technology - Essay Example

?Introduction There has been a global integration of technology at accelerated pace in the recent times and due to this, a new set of rules has evolved which contain both the intellectual property as well as the competition. Intellectual property rights and laws are enacted primarily to deal with the patents, trade marks as well as copyrights in order to protect the technological innovation made. Competition on the other hand however, deals with the removal of any restrictions on the trade in order to ensure that the competition between different players in the market works in healthy and constructive manner. Anti-trust laws are therefore formulated in order to ensure that no one in the free markets can actually dominate the market by creating any kind of barriers or restrictions in order to control the market. As such both the anti-trust laws and intellectual property right laws are at odds with each other due to their potential differences. Though both the legal regimes may seem quite non-relative with each other as intellectual property rights deal with the protection of certain rights over any kind of technological or other advances made whereas the anti-trust laws specifically deal with the competition and how market should be regulated. It is however, argued that both are linked in the sense that government attempt to create so called justified value in the market in a bid to unite the market. This paper will discuss the paradox of what intellectual property rights and anti-trust laws prevent and permit respectively and how this paradox can be solved. Intellectual Property Rights and Anti-trust laws Intellectual property rights are given in order to provide exclusive rights for different intangible assets to the owners of these assets. Most commonly Intellectual Property Rights or IPR are granted by giving or registering patents, trademarks, copyrights as well as industrial design rights. It is however; critical to understand IPRs are becoming increasingly more important not just only in the trade related issues at the national and international level but they are also becoming a matter of daily routine. This aspect of the IPRs therefore makes them critically more important to gain increasingly more significance from the social perspective also. It is argued that there is no uniform definition or explanation of the intellectual property rights at the global level however, different agreements and treaties have actually being made in order to iron out the anomalies and bring in harmony at the national level in the intellectual property rights. World Intellectual Property Organization defines intellectual property rights as “creations of the mind: inventions, literary and artistic works, and symbols, names, images and designs used in commerce”. (WIPO). This definition is relatively different from what has been defined by World Trade Organization. Definition by WTO suggests that intellectual property rights give exclusive rights to the creators of mind’s inventions to use them for certain period of time. The above definitions therefore suggest that intellectual property rights and their legal implications are still to be defined in uniform manner. Anti-trust laws however, are related with the concept of competition which is purely and economic concept and refer to a market based mechanism. Under this mechanism, everyone is allowed to enter and trade in the market freely and without any restrictions and should be given equal treatment and fair chance to pursue one’s own economic interests. Competition however, also requires optimal allocation of resources and is considered only valuable when it is able to optimally allocate the resources in the market. What is also important to note that competition inherently requires that there should not be any barriers or unfair use of market power and use of unfair practices which can provide an unfair advantage to someone? Competition therefore advocates a fairly balanced and just market mechanism under which everyone is free to enter and exit the market without actually influencing the market in any manner. This seemingly simple concept of competition however, may be relatively in conflict with all those efforts and actions which potentially hamper the competition. This also includes providing regulatory or legal barriers to any particular industry or firm in order to protect the same from competition. Anti-trust laws are passed with the purpose of ensuring that no one in the market should be able to use or exploit the market for his or her own purposes and as such ensure that artificially created barriers in the market are removed and no one should be in the position to actually influence the different outcomes in the market and hence result into non-optimal allocation of the resources. The Paradox Anti-trust laws are passed in order to curtail the problem of free riding under which no one is permitted to actually enjoy the benefits of free riding. This concept is based on the assumption that the benefits enjoyed by the free riders are at the cost paid by others therefore the overall issue of free riding should be dealt in a manner which can curtail such behavior in the market. Through both the vertical as well as horizontal constraints, anti-trust laws therefore can help to curtail the benefits enjoyed by the free riders in the market. Anti-trust laws and intellectual property rights therefore at odds with each other owing to the fact that firms, by using intellectual property rights can actually exclude other parties from the market which is exactly against the very spirit of the anti-trust laws. When viewing intellectual property rights from the perspective of the anti-trust laws, it may become obvious that intellectual property rights can actually give rise to the rights under which one party can engage into the so called refusal to deal. It is also pertinent to mention that intellectual property right holders can engage into the practices where they can willfully exclude certain players from granting the licenses under the patents. (Ghosh). The selective refusal or conditional approvals of the licenses for patents therefore can potentially violate what is defined as exclusionary conduct under the Sherman Act in United States of America. This paradox becomes much more interesting due to the fact intellectual property rights are often uncertain and it is relatively difficult to define the overall boundaries under the intellectual property rights. (Williamson). This makes it more difficult to actually sort out the violations of the intellectual property rights and their impact on the competition in the market. The delineating of the intellectual property rights therefore often creates practical problems for the anti-trust authorities to fully implement the laws and improve their incidence on all players in the market to ensure healthy completion. Solution to the Paradox It is argued that this paradox or apparent conflict between the anti-trust laws and the intellectual property rights can be averted by advocating the collaborative R&D. Collaborative R&D can allow different players in the market to collaborate on certain critical issues rather than engaging into any kind of dispute to create or enhance the market power. Empirical studies however, suggested that the collaborative R&D could only be successful when two firms are not direct competitors in the same market. (Sakakibara) It is also important to note that the existing laws also need to be reconciled in order to ensure that the potential conflict between the two laws and resulting anomalies can be overcome. This would allow better enforcement of anti-trust laws and hence would reduce the harmful or anti-competitive effects of the intellectual property rights. Reducing the overall impact therefore can further reduce the potential conflict between two set of laws while at the same time will also reconcile the same. Conclusion Competition at the global level has made it important for the firms and the government to protect the firms and their assets from unwanted or damaging use. Over the period of time, international firms have been able to imitate the technology and were able to offer the products which were much cheaper than the original. Due to this reason, intellectual property rights were introduced in order to ensure that the creations of the mind are properly protected under the laws and shall be given preference. As such intellectual property rights can help create the unnatural barriers to entry into the market which is considered as against the anti-trust laws. Competition laws are enacted to ensure that different firms are not able to exploit their overall position and market power to significantly influence others. As such both the anti-trust laws as well as the intellectual property rights seem to be at odd with each other. Intellectual property right gives the powers of so called discretionary exclusion under which IPR holders can selectively refuse to give or provide license to other firms. Anti-trust laws on the other hand however, suggest that no one should be in such power to influence the market and can result into non-optimal allocation of resources. This paradox however, can be solved by either engaging into the collaborative R&D wherein firms collaborative in their research and development efforts. Government can also iron out the anomalies and points of conflicts from these laws to make them supportive of each other. Bibliography Ghosh, Shubha. "When Exclusionary Conduct Meets the Exclusive Rights of Intellectual Property: Morris v. PGA Tour and the Limits of Free Riding As an Antitrust Business Justification." Loyola University Chicago Law Journal (2006): 723-732. Sakakibara, Mariko. "The diversity of R&D Consortia and Firm Behavior: Evidence from Japanese Data." Indus. Econ (2001): 181-183. Williamson, Dean V. Antitrust, Innovation, and Uncertain Property Rights: Some Practical Considerations. 2010. 03 June 2011 . WIPO. What is Intellectual Property? 2011. 02 June 2011 . Read More