intellectual property_chap1
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Course Structure and Readings
Two main chapters: Introduction and IPProtection (Fields of IP)
One (tentative) chapter on specific trade-relatedIP issues
Compulsory reading: WIPO, Intellectual PropertyHandbook: Policy, Law and Use, WIPOPublication No. 489 (E), Geneva, 2004.
Optional readings: to be informed
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CHAPTER 1AN INTRODUCTION
TO INTELLECTUAL PROPERTY
Basic questions to be answered:-What is IP/IPR?-What are main categories of IP?- Why promote and protect IPR?- Why businessmen/economists have to learnabout IP?- What is structure of the legal framework forIP?
CHAPTER OUTLINE
The concept of IP, IPRs Main IP categories The Rationale of IP Protection The Evolution of Intellectual Property Rights (IPRs) The Roles of Intellectual Property Rights in
International Business IP law system
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1. What is IP?
Intellectual property refers to creations of the mind:inventions, literary and artistic works, and symbols,names, and images used in commerce.
WIPO-What is Intellectual Property-page 1
Slides by Pham Thi Mai Khanh-FTU
1. What is IP?
Intellectual property, very broadly, means thelegal rights which result from intellectualactivity in the industrial, scientific, literary andartistic fields.
WIPO Intellectual Property Handbook: Policy, Law and Use 2004, p.3
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VIETNAM: IP Law 50/2005/QH11,effective from 1/7/2006
1. Intellectual property rights mean rights oforganizations and individuals to intellectual assets,
including copyright and copyright-related rights,industrial property rights and rights to plant varieties.
Article 4.- Interpretation of terms
Slides by Pham Thi Mai Khanh-FTU
1. IP=IPR
Intellectual property (IP) is a term referring to a number ofdistinct types of creations of the mind for which propertyrights are recognized-and the corresponding fields of law.
wikipedia.org
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Art. 2(viii), The Convention Establishing the WorldIntellectual Property Organization (WIPO) -1967
... intellectual property shall include rights relating to:
- literary, artistic and scientific works,- performances of performing artists, phonograms andbroadcasts,- inventions in all fields of human endeavor,- scientific discoveries,- industrial designs,- trademarks, service marks and commercial names anddesignations,- protection against unfair competition,
and all other rights resulting from intellectual activity in theindustrial, scientific, literary or artistic fields.
Related Rights
Copyright
Related Right
Patent???
1. IPRIndustrial Property Copyright
?Quy?n ??i v?i sng ch? (Patents)?Quy?n ??i v?i ki?u dng (Designs)?Quy?n ??i v?i nhn hi?u (Trademarks)?Quy?n ??i v?i tn v ch? d?n th??ng m?i(Commercial names and designations)?Quy?n ??i v?i b m?t th??ng m?i (Tradesecrets)?Quy?n lin quan ??n Lu?t h?n ch? c?nhtranh khng lnh m?nh (Protection againstUnfair Competition)?Quy?n ??i v?i thi?t k? b? tr m?ch tch??p bn d?n (Layout/designs ofintegrated circuits)
???n quy?n (Copyrights)?Cc quy?n lin quan (Relatedrights)
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1. IPRSui Generis Regimes
?Quy?n ??i v?i gi?ng cy tr?ng(New variety of plants)
??o h????i v?i c? s? d? li?u(Database Protection)
1. IPRRights for the creators Rights upon commercial
signs?Quy?n ??i v?i sng ch?(Patent)
?Quy?n ??i v?i nhn hi?u(Trademark)
?Quy?n ??i v?i ki?u dng(Industrial Design)???n quy?n v quy?n lin quan(Copyrights and related rights)?Quy?n ??i v?i thi?t k? b? tr m?ch tch??p bn d?n (Layout/designs ofintegrated circuits r?ghts)?Quy?n ??i v?i gi?ng cy tr?ng (Newvariety of plants)?Quy?n ??i v?i b m?t th??ng m?i(Trade secrets)
?Quy?n ??i v?i tn th??ng m?i(Commercial name anddesignation)?Quy?n lin quan ??n Lu?t h?n ch???nh tranh khng lnh m?nh(Rights related to the UnfairCompetition Prevention Law)
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2. FIELDS OF IPRCopyright (books, paintings, films)
1. Protects the work of expressions, not the ideas (ie.the form a creator/publisher gives to ideas)=> Limited protection against substitute
2. Protection focuses on copying3. Long but limited protection (life + 50years)4. Covers original work of authorship in a tangible
medium of expression (e.g. book)5. Registration is not necessary and inexpensive=>
easy to obtain
2. FIELDS OF IPRPatents (inventions)
1. Protect the ideas, not just expressions2. Registration is necessary (patent office)3. Requirements: utility, novelty, non-obviousness.
Difficult to obtain4. Short protection periods but greater protection
against infringers (20 years)
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2. FIELDS OF IPRTrademarks (brand names, product logos)
Protect signs, symbols and phrases Registration is not necessary but easy Protection periods vary, perpetual protection is
possible Distinctiveness is required
2. FIELDS OF IPRGeographical Indications (appellations of origin
or indications of source)
Identify a product with a city or region Underlying products possess certain quality or enjoy
reputation associated with their geographical origin
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2. FIELDS OF IPR Trade Secrets (e.g. formula, programme,
technique, method, process)
Derives independent economic value from not beingknown
Registration is not required. Perpetual protection ispossible
1818
Intellectual PropertyIntellectual PropertyToolsTools
ExclusiveTemporaryTerritorial
IndustrialProperty-patents- trademarks- industrialdesigns
- geographicalindications
-Trade secrets
Copyright &Related Rights- literary, artistic,
musical works
- actors, musicdistributors, etc.
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1919
Intellectual PropertyIntellectual Property
IntangibleOriginalTradable
IndustrialProperty-patents- trademarks- industrialdesigns
- geographicalindications
-Trade secrets
Copyright &Related Rights- literary, artistic,
musical works
- actors, musicdistributors, etc.
3. The RATIONALE OFIP Protection
Why promote and protect IP?
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Three distinct philosophiesabout the nature of IP:
? Natural right view (John Locke The TwoTreatises of Gov, 1886)
? Public right view? Utilitarian view
ECONOMIC RATIONALE OF IP
IP= information, knowledge (like public good)Incentives/Return v Access/Social WelfareIPR is legal remedy to balance I/R v A/SW
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INFORMATION (=IP) HAS PUBLICGOOD CHARACTERISTICS:
Non-rivalrous (one person's use of it does notdiminish another's use) (you can use what I use)
Non-excludable (costly to exclude others fromconsuming a good)
INFORMATION (=IP) HAS PUBLICGOOD CHARACTERISTICS:
Non-rivalrous Non optimal rationing problem Effect: Over-consumption of Innovation (+no incentives
for future innovation and competition)
Non-excludable Non-appropriability; Costly to produce but cheaper to copy it Free-Riding Problems (+costly protection of innov.) Effect: Undersupply of Innovation (due to no incentives)
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Central Problem: INCENTIVES v ACCESS
Creating Incentives for Innovation v.Expanding Public Access to Innovations
INCENTIVES: why? (dynamic efficiency) Protection of current innovation to promote future innovation (e.g.
new drug development) Ensure economic returns on investment in innovation
ACCESS: why? (static efficiency)
Encourage future innovation by competitors (build on) Promote greater competition Enhance consumer welfare (e.g. health, lower prices)
INCENTIVES+ACCESS=SOCIETYS WELFARE
BALANCING INCENTIVES v ACCESSIS THE CHALLENGE
Dilemma: Optimal utilization of information available to
all Vs. No incentives for investment increativity and innovation(Arrow, 1962 in NBER)
Incentives to produce information/creativityactivity Vs Expand the use of information andits welfare impact on society
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REMEDIES OR SOLUTIONSTO I/R v A/SW
SOLUTIONS TO PUBLIC GOOD PROBLEMSOF INNOVATION
1. State supply of information2. Public subsidies for private production of
information3. Market competition and Inter-Firm Collaboration4. Trade Secrets Agreements5. Intellectual Property Rights
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Super-simple Economic Theory
A linear demand and marginal revenuefor a product that has been invented andmay be supplied to the market at constantmarginal cost.
In a perfect competition setting
C
Pm
Qm
M
Pc
- consumer benefits = the areaAPcC
no producer has market power,all firms have immediate andperfect access to the sametechnologies
all firms could costlessly imitatethe product and sell a closesubstitute, => no rents to coverthe original cost of R&D
Consequence:There no suchinvestment, theproduct would gounderdeveloped, andthe entire consumerbenefit area woulddisappear.
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Monopoly through an IPR
C
Pm
Qm
M
Pc
- the firm would offer the productat price Pm and quantity Qm,earning monopoly rents of theblue rectangle.These rents, which represent atransfer from consumers toinventors, are the return on theorigninal investment in R&D =>incentive to inventHowever, that incentives makethe economy suffers adeadweight loss of the orangetriangle in comparison with thecompetitive (but unatainable)sollution at point C.
Compared to having noinnovation, however,society achieves a netgain of the remainingconsumer surplus (thered triangle) plusmonopoly profits (theblue rectangle), lessassociated R&D costs
ROLE OF IPR IN BALANCINGINCENTIVES & ACCESS
Public Good characteristic of innovationprovides an important economic rationalefor IPRs
IPR solution: legal control overreproduction creates incentive forinnovation while facilitating limited publicaccess Limited legal exclusion
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ECONOMIC RATIONALE OF IPRRecapping Key ideas
1. IPR are property rights over information, knowledge and ideas2. IPR are exclusive, tradeable and temporary3. IPR differ in the information being protected (copyright,
patent, trade secrets, trademarks)4. IPR protect information that has public good characteristics
(non-excludability and non-rivalry consumption)5. Public good characteristic of IP (information) creates
problems i.e. high cost of creativity and exclusion Vs low costof reproduction/copying..undersupply of IP Vs over-consumption of IP
6. Challenge is to solve these problems so as to both createincentives for innovation and expand access for the benefit ofsociety
7. IPR may solve the public good problems of IP (information)so as to promote innovation and public access
THINK ABOUT IT
Should a developing country awardIPRs to foreign firms?
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IP in an Open Economy
C
Pm
Qm
M
Pc
Further Readings
P. Yu (editor) 2009, The WIPO Journal : Analysis andDebate on Intellectual Property Issues, 2009, Issue 1,http://www.wipo.int/export/sites/www/freepublications/en/intproperty/wipo_journal/wipo_journal_1_1.pdf
P. Yu (editor) 2013, The WIPO Journal: Analysis ofIntellectual Property Issues, Volume 5, Issue 1http://www.wipo.int/export/sites/www/freepublications/en/intproperty/wipo_journal/wipo_journal_5_1.pdf
Lemley 2004, Property, Intellectual Property and FreeRiding,http://papers.ssrn.com/sol3/papers.cfm?abstract_id=582602
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3. The EVOLUTION OF IP
The History of IP
?Intellectual Property is a generic term thatprobably came into regular use during thetwentieth century?This generic label is used to refer to a group
of legal regimes, each of which, to differentdegrees, confers rights of ownership in aparticular subject matter.?The different subject areas of IP originate
in different places and at different times
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Slides by Pham Thi Mai Khanh-FTU
The history of the term IP
?Modern usage of the term intellectual property goes backat least as far as 1888 with the founding in Bern of theSwiss Federal Office for Intellectual Property (theBureau fdral de la proprit intellectuelle).
Slides by Pham Thi Mai Khanh-FTU
The history of the term IP
?When the administrative secretariats established by theParis Convention (1883) and the Berne Convention(1886) merged in 1893, they also located in Berne, andalso adopted the term intellectual property in their newcombined title, the United International Bureaux forthe Protection of Intellectual Property.
?The organisation subsequently relocated to Geneva in1960, and was succeeded in 1967 with theestablishment of the World Intellectual PropertyOrganization (WIPO) by treaty as an agency of theUnited Nations.
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Further readings:
Drahos 1998, The Universality of Intellectual PropertyRights: Origins and Development, www.wipo.int
WIPO, WIPO- A Brief History, http://www.wipo.int/about-wipo/en/history.html
Stallman , Did You Say Intellectual Property? It's aSeductive Mirage, http://www.gnu.org/philosophy/not-ipr.html
Slides by Pham Thi Mai Khanh-FTU
4. The Role of IPRs inInternational Business
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BUSINESS ASSETSTANGIBE ASSETS
land, building,machinery,financial assets, andphysical infrastructure
INTANGIBLE ASSETS
human capital,relationships,know-how,brand, design,patent, copyright,trade secrets, etc.
BUSINESS ASSETS
>Traditionally, tangibleassets were regarded asthe primary assets of valuefor creating and enhancingthe competitiveness of anenterprise.
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