intellectual property_chap1

-16/08/2014

-1

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

Click

to bu

y NOW

!PD

F-XChange

www.docu-track

.com C

lick t

o buy

NOW

!PD

F-XChange

www.docu-track

.com

-16/08/2014

-2

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

Click

to bu

y NOW

!PD

F-XChange

www.docu-track

.com C

lick t

o buy

NOW

!PD

F-XChange

www.docu-track

.com

-16/08/2014

-3

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

Click

to bu

y NOW

!PD

F-XChange

www.docu-track

.com C

lick t

o buy

NOW

!PD

F-XChange

www.docu-track

.com

-16/08/2014

-4

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


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

Click

to bu

y NOW

!PD

F-XChange

www.docu-track

.com C

lick t

o buy

NOW

!PD

F-XChange

www.docu-track

.com

-16/08/2014

-5

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)

Click

to bu

y NOW

!PD

F-XChange

www.docu-track

.com C

lick t

o buy

NOW

!PD

F-XChange

www.docu-track

.com

-16/08/2014

-6

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)

Click

to bu

y NOW

!PD

F-XChange

www.docu-track

.com C

lick t

o buy

NOW

!PD

F-XChange

www.docu-track

.com

-16/08/2014

-7

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)

Click

to bu

y NOW

!PD

F-XChange

www.docu-track

.com C

lick t

o buy

NOW

!PD

F-XChange

www.docu-track

.com

-16/08/2014

-8

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

Click

to bu

y NOW

!PD

F-XChange

www.docu-track

.com C

lick t

o buy

NOW

!PD

F-XChange

www.docu-track

.com

-16/08/2014

-9

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.

Click

to bu

y NOW

!PD

F-XChange

www.docu-track

.com C

lick t

o buy

NOW

!PD

F-XChange

www.docu-track

.com

-16/08/2014

-10

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?

Click

to bu

y NOW

!PD

F-XChange

www.docu-track

.com C

lick t

o buy

NOW

!PD

F-XChange

www.docu-track

.com

-16/08/2014

-11

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

Click

to bu

y NOW

!PD

F-XChange

www.docu-track

.com C

lick t

o buy

NOW

!PD

F-XChange

www.docu-track

.com

-16/08/2014

-12

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)

Click

to bu

y NOW

!PD

F-XChange

www.docu-track

.com C

lick t

o buy

NOW

!PD

F-XChange

www.docu-track

.com

-16/08/2014

-13

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

Click

to bu

y NOW

!PD

F-XChange

www.docu-track

.com C

lick t

o buy

NOW

!PD

F-XChange

www.docu-track

.com

-16/08/2014

-14

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

Click

to bu

y NOW

!PD

F-XChange

www.docu-track

.com C

lick t

o buy

NOW

!PD

F-XChange

www.docu-track

.com

-16/08/2014

-15

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.

Click

to bu

y NOW

!PD

F-XChange

www.docu-track

.com C

lick t

o buy

NOW

!PD

F-XChange

www.docu-track

.com

-16/08/2014

-16

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

Click

to bu

y NOW

!PD

F-XChange

www.docu-track

.com C

lick t

o buy

NOW

!PD

F-XChange

www.docu-track

.com

-16/08/2014

-17

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?

Click

to bu

y NOW

!PD

F-XChange

www.docu-track

.com C

lick t

o buy

NOW

!PD

F-XChange

www.docu-track

.com

-16/08/2014

-18

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

Click

to bu

y NOW

!PD

F-XChange

www.docu-track

.com C

lick t

o buy

NOW

!PD

F-XChange

www.docu-track

.com

-16/08/2014

-19

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

Click

to bu

y NOW

!PD

F-XChange

www.docu-track

.com C

lick t

o buy

NOW

!PD

F-XChange

www.docu-track

.com

-16/08/2014

-20


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).


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.

Click

to bu

y NOW

!PD

F-XChange

www.docu-track

.com C

lick t

o buy

NOW

!PD

F-XChange

www.docu-track

.com

-16/08/2014

-21

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


4. The Role of IPRs inInternational Business

Click

to bu

y NOW

!PD

F-XChange

www.docu-track

.com C

lick t

o buy

NOW

!PD

F-XChange

www.docu-track

.com

-16/08/2014

-22

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.

intellectual property_chap1

Documents