How Important, and How Effective Are Laws Protecting Intellectual Property - Essay Example

How Important, and how Effective are Laws Protecting Intellectual Property? Student’s Name: Course: Tutor’s Name: Date: The question of how important laws protecting intellectual property (IP) are is best answered by considering what the laws safeguard. The Encyclopaedia of Small Business1 defines IP as the intangible asset created by engaging the human mind. The creation is then translated or expressed into a service or product and assigned intellectual property rights. The rights are however applicable when the creation or innovation is copyrighted, patented, trademarked or categorised as an item or service that deserves legal protection from unfair competition. Generally, IP laws give the innovator short-term monopoly over the use of his or her creation. During such a time, the innovator is legally entitled to the exclusive rights of using, manufacturing, reproducing, and promoting his or her innovation. It is worth noting that the combined forces of globalisation, technology advancement, and innovation have made the world an increasingly competitive place. As such, any innovation or idea is jealously guarded in order to ensure that people who did not contribute to its creation do not unjustifiably benefit from it. Such protection not only serves the interests of individual innovators, but their organisations and countries.2 The shift from industrial economies, to knowledge-based economies makes IP laws even more important. As Lester C. Thurow observes, raw materials are bought and transported easily, and their value is liquid.3 Capital on the other hand can be hired, outsourced, or borrowed from anywhere in the world. New knowledge remains the only thing that a person, organisation or company can claim as theirs and hence use it to advance their competitive position.4 Based on this, governments, and individuals understand that laws protecting intellectual property are essential if entities are to determine and protect their innovative knowledge. The importance of laws protecting IP is further emphasised by the fact that easy use of intellectual property by people who did not contribute towards its making would make it difficult for IP owners to generate wealth from it, or develop industries from the same.5 Some of the industries contributing to world development can be categorised as brainpower industries. Such include telecommunications, biotechnology, microelectronics and design-related industries. Innovators in these identified fields (and others) deserve to earn profits from their innovations, just as innovators in the industrial age did. As such, laws protecting intellectual property need to shield them from knockoffs and counterfeit makers. Indirectly, Lester argues that effective IP laws are important since they would indirectly encourage other industries to proper use of innovative practices.6 Using the example of the oil industry, the author notes that new technologies developed through innovative practices has since enabled the industry to shift from the labourers and less certain way of oil exploration typified as luck and brawn, into newer, faster and more accurate methods of exploration and drilling. Without laws protecting innovators from exploiters waiting to pounce on their innovations, less people will be enthusiastic about discovering better and efficient ways of doing things. The importance of laws that protect intellectual property cannot be realised if the IP owners do not the necessary precautions needed to ensure that all their innovations and important discoveries are protected in an appropriate and adequate manner.7 Often, IP owners fail to recognise its importance and hence do not seek legal protection against the infringement of the same. It is for this reason that identifying and classifying intellectual property is essential for individual innovators, the organisations or businesses they represent and their countries as well. John Tanner and Gregory smith identifies intellectual property as “all information that is commercially valuable or that could be competitively harmful to the business if made known to others”.8 Such information may be scientific or technical, development or research-related information, business forecasts or projections, financial information, strategic reports, and competitive analyses among others. Only after identifying such information can the IP owners determine the best legal protection to engage. Usually, IP laws are grouped according to the different categories of innovations or discoveries they are intend to protect. As such, there is copyright law, trade secret law, patent law, and trademark law. 9 Copyright Law The importance of copyright law cannot be understated. The law strives to encourage creativity and promote public interest by issuing exclusive rights for the use of “original works of authorship fixed to any tangible medium of expression.”10 Due to globalisation, copyright owners who would otherwise have sufficient protections under their domestic laws are now increasingly in need of universal laws, which can protect their copyrights both at home and abroad. Copyright laws are a matter of public interest because through their enactment, the public is able to operate in fair environment where no one takes credit for other peoples’ original works. The different copyright laws that exist in different countries make most copyright owners susceptible to international piracy through inadequate protection by foreign laws.11 This occurs in spite of the fact that copyright laws are meant to protect a broader category of original works that include artistic, literary, musical and architectural works. Computer software and some forms of databases are also amongst works that are protected by copyright laws.12 Should one suspect that an infringement of copyright has occurred, he or she is free to file a lawsuit seeking damages for losses incurred. In most countries, one needs to register a copyright for the original work before filing the lawsuit. People whose copyright has been infringed upon are entitled to damages, or/ and profits illegal acquired from the copyrighted resources. In other cases, the court issues an injunction preventing other people from using copyrighted materials.13 When this happens, the original author or creator becomes the sole person with rights to use, sell or distribute the copyrighted work. This encourages creativity especially in the art industry since people are able to some returns from their artistic efforts. Before filing a copyright infringement lawsuit, Ronald Standler states that one needs to know some of concepts in copyright law.14 Such include the fair use concept, where other people (other than the owner of an original work) can make “short quotations for purposes of criticism, comment, news reporting, teaching or scholarship without first obtaining permission of the copyright owner.”15 When determining whether an infringement of copyright has happened, courts consider whether the use was commercial or non-profit, the nature or value of the copyrighted work, the amount of work used in comparison with the entire copyrighted work, and the effect that the use had on real or potential markets of the copyrighted work.16 Patent Law Patent law encourages people to invest in research and development (R&D) for purposes of producing valuable innovations and technological products. Notably, patents are is harder to secure and retain when compared to copyright. Further, patents are meant to serve the interest of the patent owner in a shorter period compared to copyright. Notably however, patents are more robust and therefore more likely to have more benefits for their owners.17 Once a patent has been granted, the patentee’s discovery is partially disclosed to the public. To be valid, a utility patent must be obscure and original, while a design patent should be unmistakably original. In the United States, the patent law protects three types of innovations: utility, plant, and design. Utility and plant patents are granted for 20 years, while the design patent is valid for 14 years. During this time, the patentee has the sole right of “making, using, selling, offering to sell, or importing the patented invention.”18 Shaun Larcom argues that patents are a signalling device used by the small and medium scale enterprises to attract finance, which they use to commercialise or launch their inventions.19 Notably, the importance attached to patent law differs with the size of firms. In the Australian context for example, large firms sought patent for their innovations based on a desire “to protect their freedom to operate”, while small and medium-size firms were found to patent their innovations based on monetary reasons.20 Citing a survey conducted by De Rassenfosse, Shaun Larcom indicates that other reasons why firms apply for patents in the Australian context includes preventing their innovation form imitation, upholding the secrecy of the innovation, protecting the patentee’s freedom to operate, convincing existing and potential investors about the value of an invention, and for licensing purposes.21 If a survey conducted by Walter Park is anything to go by, the adoption of patent laws differs depending on the level of economic development in the surveyed countries22. In the same manner, the survey conducted in 122 developed and developing countries revealed that countries with high economic development had stronger patent laws that those with lower economic growth. This is not to mean that there are no exceptions to this. As Guy Sebban of the International Chamber of Commerce observes, there are countries which cannot wipe out piracy and counterfeiting businesses since they, (the businesses) contribute to the overall revenue earned by the country.23 Trademark Law Trademark law enables businesses to use words, symbols or devices for branding and marketing purposes, hence making it easier for organisations to distinguishing their products or service from their competitors’.24 Besides its role in product branding and marketing, trademark law also plays an essential role in aiding consumer’s choices. To the business people, trademark law is essential to their survival since it creates brand loyalty hence enhancing brand positioning in a given market.25 How effective are the IP laws? Although literature does not contain an exact estimate of how effective the intellectual property laws are, some of the cited cases indicate that the laws are not as effective as many people would like them to be. For example, Peter K.Yu observes that IP international laws are completely ineffective in China, where pirated copies of genuine American products have threatened the existence of American firms. 26 The latter spends huge sums of efforts and resources in researching and developing new products, only for Chinese pirates to make cheap imitations of the same27. As anyone would guess, the Chinese imitators do not invest huge resources in making the cheap duplicates. As such, they manage to sell their knock-offs and counterfeit products cheaply compared to the genuine American manufacturer. Consequently, some American firms fear that if Chinese counterfeiters continue in such practices, most innovators will not realize returns on their initial investments. Even worse is the fact that the consumer market does not often distinguish between the genuine items, the knock offs and the counterfeits. Even where the difference is noticeable, the cheaper priced counterfeits and knock-offs often command a larger appeal in the consumer market than the genuine products do. In an attempt to force China to embrace the international IP laws, the US issued threats to the country that included trade wars and economic sanctions. Further, the US made it clear that it would not renew China’s status as a ‘most-favoured-nation’, and that it would oppose China’s admission into the World Trade Organisation.28 Based on these threats, China conceded to signing IP agreements with the US in the 1990s. The ineffective nature of the IP laws are however evident because despite the signing of the agreements, piracy in China remains the single-largest threat to innovation in the US.29 In fact, it was rather evident to the Chinese that the foreign IP policies issued by the US were not only misguided, but also self-deluging and ineffective. Explaining why IP laws are largely ineffective in the contemporary global environment, Thurow, argues, “Squeezing today’s innovations into yesterday’s systems simply won’t work.”30 Justifying his argument, Thurow asserts that the IP laws in use (at least by 1997), were developed one hundred or more years ago to address the intellectual property rights of the industrial era. The laws were meant to fit the ‘one size-fits-all’ concept, and are therefore inadequate in the modern highly-technological and innovative environment. All four of the identified IP laws face effectiveness challenges. Copyright law for example is not universal since it has different details in the different countries it is enforced. As such, copying that is considered legal in one country may be perceived as illegal in another country.31 Regardless of the global nature of the World Wide Web, countries are yet to reconcile the differences in their respective laws, and this continues to jeopardise the effective implementation of copyright law worldwide. The ineffective implementation of copyright laws often leads to a trade that prosper kin the marketing and selling of counterfeit, often substandard products, which are sold in both the trademark owner’s domestic market and international markets.32 Since patent laws are territorial, their effective implementation depends on whether the patentee filed for patents in the various countries where he or she wants protection.33 In countries where patent is not filed or granted, the patentee can rely on border enforcement to bar the importation and circulation of patented items. As John Masterson notes however, custom officials can only bar the importation of goods when the patentee proves that there are reasonable grounds to believe that importation of patented products may lead to their unfair use.34 Supposing that intellectual laws were effective on both domestic and international fronts, the differences in how countries enforce laws would still make the implementation of such laws challenging. For example, despite China becoming a signatory to the TRIPS agreement, judicial incompetence in the country coupled with the judicial incompetence impeded the enforcement of intellectual property laws. 35 Local protectionism, an inexperienced judiciary or the lack of an autonomous judicial review mechanism are some of the other barriers that may hinder successful implementation of the IP laws on an international scale.36 Yet, China is not the lone country in Asia facing pressure from the international community in order to improve its IP policies. Most developing countries in Asia have apparent limitations in the implementation and upholding of IP laws.37 Despite the positive results that effective implementation of the IP laws would have on the larger world economy, there is some disquiet among some countries that excessive protectionist IP measures would end up giving the US and Europe monopolistic powers over their innovations.38 This, it is feared would make the world a less competitive place, with inventors pricing their innovations at levels, which would be unaffordable for most people in the developing countries. The strict patent laws preventing the manufacture of generic anti-retroviral drugs are just one example of how uncompetitive the effective implementation of such laws would be.39 Previously, and as stated in the 2001 Doha Declaration, World Trade Organisation member countries had explicitly stated that public health status in most developing countries had a higher priority than the status of the ARV patentees. 40 In their arguments, ARV patentees argue that allowing generic manufacturers to replicate their innovations would jeopardise the sustainability of the pharmaceutical industry, since they would not be able to recover costs or incentives invested in research and development that lead to the discovery of the drugs. Health activists however argue that giving a 20-year patent to new drug discoveries would jeopardise public health in countries that cannot afford to invest in their own research and development. Citing the US case, the health activists argue that most drug inventions do not occur in private research centres; rather, they occur in university or government research institution, which are funded using the taxpayers’ money.41 Overall, it still remains a tough undertaking for world governments to reconcile their respective laws that address intellectual property. Countries under the Asia Pacific Cooperation have for instance adopted IP rights enforcement strategies, which require custom officials in each country to vet all imported products to ensure they do not infringe on intellectual property laws. Unfortunately, customs officials in some of the countries like Canada do not have the mandate needed to enforce IP laws.42 The agreement on trade-related aspects of Intellectual Property Rights (TRIPs) was also a step in the right direction as far as trying to enforce IP laws on the international arena is concerned.43 Before the TRIPs agreement was enacted on January 1995, patent laws were virtually non-existent or disregarded in most developing countries.44 The pharmaceutical industry for example lost billions to developing countries like India who were capable of developing cheap generic drugs, which were the marketed and distributed in the international mass market.45 Even after ironing out the differences, countries would also need to ensure that any rulings made on IP-related cases are communicated in the different countries in order to avoid inconsistencies and contradictions. While this is a tough call in itself, there is also the probability that some governments would not want to enforce IP laws to their entirety especially considering that violations hold potential economic gains. Countries that lack an autonomous judicial review mechanism may be unable to implement the IP laws effectively. In a country like China for example, the judicially is still tied to the country’s politics since judges are appointed by government officials. As such, judicial members cannot make decisions that are against government policies. This places the effectiveness of IP laws on an international scale in jeopardy. Bibliography Arachu Castro and Michael Westerhaus, ‘Access to Generic Antiretroviral: Inequality, Intellectual Property Law, And International Trade Agreement,’ [2007] ARTIGO article S86. Arthur Miller and Michael Davis, Intellectual Property: Patents, Trademarks, and Copyright in a Nutshell, (West, 1990) 6. Australian Customs Service, Intellectual property rights (IPR) enforcement strategies, Asia-Pacific Economic Cooperation (September 2006) 4 < http://www.apec.org/en/Groups/Committee-on-Trade-and-Investment/Intellectual-Property-Rights-Experts-Group/~/media/Files/Groups/IP/06_sccp_IPR_Strategies_Inventory.ashx>. Charles Lickson, A Legal Guide For Small Business (Crisp Publications, 1994) 34. Craig Joyce, Marshall Leaffer, Peter Jaszi, and Tyler Ochoa, Copyright Law (LexisNexis, 2003) 2. David Holley, ‘China Warns Of Trade War With US Over Patents, Copyrights; Economic Ties’, LA Times (Los Angeles), 8 January 1992, A6. Encyclopedia of Small Business, Intellectual Property (December 2000) < http://www.enotes.com/small-business-encyclopedia/intellectual-property>. Frank Foster and Robert Shook, Patents, Copyrights and Trademarks (Wiley, 1993) 6. Guy Sebban, Intellectual Property- Source of innovation, creativity, growth and progress, International Chamber of Commerce, (2005) 4, < http://www.iccwbo.org/uploadedFiles/ICC/policy/intellectual_property/Statements/BASCAP_IP_pub.pdf> Harvey J Winter, “The role of the United States Government in Improving International Intellectual Property Protection,’ (1987) 2 Journal of Law &Technology, 325. Hillary Hollingsworth, ‘The Quest for Thought Protection: China’s Intellectual Property Rights Enforcement Regime to Improve with Increased Education to the Public,’ (Spring 2004), 47.1 Business Law Brief, 47. Jeffrey W Berkman, ‘Intellectual Property Rights In the P.R.C.: Impediments to Protection and the Need for the Rule of Law’ (1996) 15.1 UCLA Pac. Basin L.J. 45. John T Masterson, Jr., Overview of Intellectual property rights and the TRIPS agreement, (12 August 2002), < http://www.osec.doc.gov/ogc/occic/ipr.htm>. John Tanner and Gregory Smith, Protecting Your Intellectual Property, (12 December 2008) Fairfield and Woods P.C., < http://www.fwlaw.com/Resources/Articles/tabid/228/default.aspx>. Keith Maskus, ‘Strengthening Intellectual Property rights in Asia: Implications for Australia,’ (1998) 37.3 Australian Economic Papers 346. Kenneth W Dam, ‘The growing Importance of International protection of Intellectual Property,’ (1987) 21 International Law, 628. Law Office of K.D. Long PLLC. The Purpose and importance of Copyright Law, (9 February 2009) Law Office of K.D. Long, < http://klonglaw.com/?p=124>. Lester C Thurow, ‘Needed: A news System of Intellectual Property Rights,’ [1997] Harvard Business Review, 96. Michael L Doane, ‘TRIPs and International Intellectual Property Protection in an Age of Advancing Technology’, (1994) 9.2 AM. U. J. Int’l L. & Pol’y, 466-467. Naomi A Bass, ‘Implications of the TRIPs agreement for developing countries: Pharmaceutical patent laws in Brazil and South Africa in the 21st century,’ (2003) 34 Geo. Wash. Int’l. Rev. 191. Peter K Yu, ‘From Pirates to Partners: Protecting Intellectual Property in China in the Twenty-First Century,’ (2001) 50.34 American University Law, 131. Ronald Standler. Some Observations on Copyright Law, (20 June 2010), < http://www.rbs2.com/copyr.htm>. Shaun Larcom, Review : How SMEs Exploit Their Intellectual Property Assets: Evidence From Survey Data” by Gaetan de Rassenfosse, (06 May 2011) The Fortnightly Review of IP & Media Law . Vivian Hoffman, ‘Cure sought for problem of getting medicine to poor nations’, Boston Globe (Boston, MA), 25 November 1999, A 23. Walter G Park, ‘International Patent Protection: 1960-2005,’ (2008) 37 Research Policy, 761-766. Read More