Intellectual Property Rights - An Overview

The Author, CA. Harsh Ramniwas Rathi, is a practicing CA based at Ahmedabad. He is also a visiting faculty at various Management Schools.

INTELLECTUAL PROPERTY RIGHTS (IPR)-AN OVERVIEW!

: Compiled By:

CA. HARSH RAMNIWAS RATHI

M. No. 126391

AHMEDABAD.

I.                    Introduction:

Anything made by human intervention requires intellectual efforts and all human made things are a result of intellectual creations.  However, individual persons do not own most of these creations or organizations but human race as a whole is the collective owner of these creations.  Some specific creations made by individuals/organizations are owned by them subject to the conditions laid down by certain laws for recognizing and rewarding the intellectual activity of the creator.  Intellectual property refers to such creations.  These include inventions, symbols, names, images, literary and artistic work.

Intellectual property rights are the rights given to persons over the creations of their minds.  They usually give the creator an exclusive right over the use of his/her creation for a certain period of time to inventions, literary and artistic works, and symbols, names, images, and designs used in commerce.

Intellectual Property is divided into two categories: Industrial Property, which includes inventions (patents), trademarks, industrial designs, and geographic indications of source, and copyrights, which include literary and artistic work such as novels, poems and plays, films, musical works, artistic works such as drawings, paintings, photographs and sculptures, and architectural designs.  Rights related to copyrights include those of performing artists in their performances, producers of phonograms in their recordings, and those of broadcasters in their radio and television programs.  For an introduction to IP (Intellectual Property) for non-specialists, see:

Intellectual Property broadly divided into two categories:

II.                 The two branches of Intellectual Property:

IP is usually divided into two branches, namely Industrial Property & Copyright.

III.               Copyright:

Copyright relates to artistic creations, such as poems, novels, music, paintings, and cinematographic works.  In most European languages, other than English, copyright is known as author’s rights.  The expression copyright refers to the main act which, in respect of literary and artistic creations, may be made only by the author or with his authorization.  That act is the making of copies of the literary work or artistic work, such as a book, a painting, a sculpture, a photograph, or a motion picture.  The second expression author’s rights refers to the person who is the creator of the artistic work, its author, thus underlining the fact, recognized in most laws, that the author has certain specific rights in his creation, such as the right to prevent a distorted reproduction, which only he can exercise, whereas other rights, such as the right to make copies, can be exercised by other persons.  For example: a publisher who has obtained a license to this effect from the author.

IV.              Patents:

A Patent is an exclusive monopoly granted by the Government to an inventor over his invention for limited period of time.  Patents protect inventions and improvements to existing inventions. Copyrights cover literary, artistic, and musical works.  Trademarks are brand names and/or designs, which are applied to products or used in connection with services. 

An inventor or any other person/company assigned by the inventor can obtain the patent over his invention.  A patent is obtained by the inventor or his assignee by filing an application with the patent office in the stipulated forms as required by the Patent Act of that country.  A patent is granted only on that invention, which is new, non-obvious, and has industrial applicability.

Industrial Applicability/Utility: The invention must be of practical use capable of some kind of industrial application.

Novelty: It must show some new characteristic that is not known in the body of existing knowledge (referred to as prior art) in its technical field.

Inventive step (non-obviousness): It must show an inventive step that could not be deduced by a person with average knowledge of the technical field.

A patent can expire in the following ways:

The patent has lived its full term i.e. the term specified by the patent act of the country.  Generally it is 20 years from the date of filing.

The patentee has failed to pay the renewal fee.  A patent once granted by the Government has to be maintained by paying annual renewal fee.

The validity of the patent has been successfully challenged by an opponent by filing an opposition either with the patent office or with the courts.

While not as widespread as patents, utility models are also used to protect inventions.

Utility Models are found in the laws of more than 30 countries, as well as in the regional agreements of the African Regional Industrial Property Organization (ARIPO) and the Organization Africaine de la Propriete Intellectuelle (OAPI).  In addition, some countries, such as Australia and Malaysia, provide for titles of protection called innovation patents or utility innovations, which are similar to utility models  Other countries, like Hong Kong, Ireland and Slovenia, have a short term patent that is equivalent to the utility model.

In conclusion, there is no international or global patent.  An inventor has to file an application in each country, where he seeks to protect his invention.  There are regional and/or international treaties to facilitate the procedure to seek protection like Patent Co-operation Treaty (PCT) or European Patent Convention (EPC).

V.                 Industrial Designs:

An industrial design, in general terms, is the ornamental or aesthetic aspect of a useful article.  This aspect may depend on the shape, pattern or colour of the article.  The design must have visual appeal and perform its intended function efficiently.  Moreover, it must be able to be reproduced by industrial means; this is the essential purpose of the design, and is why the design is called industrial.  In a legal sense, industrial design refers to the right granted in many countries, pursuant to a registration system, to protect the original, ornamental and non functional features of a product that result from design activity.

Visual appeal is one of the main factors which influence consumers in their preference for one product over another.  When the technical performance of the product offered by different manufacturers is relatively equal, consumers will make their choice based on price and aesthetic appeal.  So in registering their industrial designs, manufacturers protect one of the distinctive elements that determine market success.

By rewarding creators for their effort in producing new industrial designs, this legal protection also serves as an incentive to invest resources in design activities.

One of the basic aims of industrial design protection is to stimulate the design element of production.  This is why industrial design laws usually only protect designs that can be used in industry or that can be produced on a large scale.

This condition of utility is a notable difference between the industrial design protection and copyright, since the latter is only concerned with aesthetic creations.  Industrial designs can generally by protected if they are new or original.

Designs may not be considered new or original if they do not significantly differ from known designs or their combinations.

In most industrial design laws, designs that are dictated solely by the article’s function are excluded from protection.  If the design for an article produced by many manufacturers, such as a screw, is dictated purely by the function that the screw is intended to perform, then protection for that design would have the effect of excluding all other manufacturers from producing items intended to perform the same function. Such exclusion is not warranted, unless the design is sufficiently novel and inventive to qualify for patent protection.

In other words, the legal protection offered by industrial designs concerns only the design that is applied to, or embodied in, articles or products.  This protection does not prevent other manufacturers from producing or dealing in similar articles or products, as long as these do not embody or reproduce the protected design.  Industrial design registration protects against unauthorized exploitation of the design in industrial articles.  It grants the owner of the design the exclusive right to make, import, sell, hire or offer for sale articles to which the design is applied or in which the design is embodied.

The term for an industrial design right varies from country to country.  The usual maximum term is from 10 to 25 years, often divided into terms requiring the proprietor to renew the registration in order to obtain an extension of the term.  The relatively short period of protection, may be related to the association of designs with more general styles of fashions, which tend to enjoy somewhat transient acceptance or success, particularly in highly fashion conscious areas, such as clothing or footwear.

VI. Trademarks:

A trademark is a sign or a combination of signs, which distinguishes the goods or services of one enterprise from those of another.

Such signs may use words, letters, numerals, pictures, shapes and colours, as well as any combination of the above.  An increasing number of countries also allow for the registration of less traditional forms of trademark, such as three-dimensional signs (like the Coca-Cola bottle or the Toblerone Chocolate bar), audible signs (sounds, such as the roar of the lion that precedes films produced by MGM), or olfactory signs (smells, such as perfumes).  But many countries have set limits as to what may be registered as a trademark, generally allowing only signs that are visually perceptible or can be represented graphically.

A trademark is a sign used on goods or in connection with the marketing of goods.  The trademark may appear not only on goods themselves, but also on the container or wrapper in which the goods are sold.  When used in the connection with the marketing of the goods the sign may appear in advertisements, for example, in newspapers or on television, or in the windows of the shops where the goods are sold.

In addition to the trademarks identifying the commercial source of goods or services, several other categories of marks exist.  Collective marks are owned by an association, such as an association representing accountants or engineers, whose members use the mark to identify themselves with a level of quality and other requirements set by the association.  Certification marks, such as the Woolmark, are given for compliance with defined standards, but are not confined to any membership.  A trademark used in connection with services is called a Service mark.  Service marks are used for example by hotels, restaurants, airlines, tourist agencies, car rental agencies, laundries and cleaners.  All that has been said about the trademarks applies to the service marks equally.

Broadly speaking, a trademark performs the following four main functions.  These relate to the distinguishing of marked goods or services, their commercial origin, their quality and their promotion in the market place.

To distinguish the products or services of one enterprise from those of other enterprises.  Trademarks facilitate the choice to be made by the consumer when buying certain products or using certain services.  The trademark helps the consumer to identify a product or service which was already known to him or which was advertised.  The distinctive character of a mark has to be evaluated in relation to the goods or services to which the mark is applied.   For example, the word “apple” or the image of an apple cannot distinguish apples, but it is a distinctive mark for computers.  Trademarks do not only distinguish products and services as such, they distinguish them in their relationship to an enterprise from which the products or services originate.

To refer to a particular enterprise, not necessarily known to the consumer, which offers the products or services in the market.  Thus trademarks distinguish products or services from one source, from identical or similar products or services from other sources.   This function is important in defining the scope of protection of trademarks.

To refer to a particular quality of the product or service for which it is used, so that consumers can rely on the consistent quality of the goods offered under a mark.  This function is commonly referred to as the guarantee function of trademarks.   A trademark is not always used by only one enterprise, since the trademark owner may grant licenses to use the trademark to other enterprises.  It is accordingly essential that licensees respect the quality standards of the trademark owner.  Moreover, trading enterprises often use trademarks for products that they acquire from various sources.  In such cases, the trademark owner is not responsible for producing the products but rather (and this may be equally important) for selecting those that meet his quality standards and requirements.  This argument is supported by the fact that even where the trademark owner is the manufacturer of a particular product, he may frequently use parts which have not been produced by him, but which have been selected by him.

To promote the marketing and selling of products, and the marketing and rendering of services.  Trademarks are not only used to distinguish or to refer to a particular enterprise or a particular quality, but also to stimulate sales.   A trademark that is to fulfill that function must be carefully selected.  It must appeal to the consumer, create interest and inspire a feeling of confidence.  That is why this function is sometimes called the appeal function.

The owner of a registered trademark has an exclusive right in respect of his mark.  It gives him the right to use the mark and to prevent unauthorized third parties from using the mark, or a confusingly similar mark, so as to prevent consumers and the public in general from being misled.  The period of protection varies, but a trademark can be renewed indefinitely on payment of corresponding fees.  Trademark protection is enforced by courts, which in most systems have the authority to block trademark infringement.

Trade Names:

Another category of industrial property covers commercial names and designations.  A commercial or trade name is the name or designation that identifies an enterprise.  In most countries, trade names may be registered with a government authority.  However, under Article 8 of the Paris Convention for the protection of Industrial Property, a trade name must be protected without the obligation of filing or registration, whether or not it forms part of a trademark. Protection generally means that the trade name of one enterprise may not be used by another enterprise, either as trade name or as a trade or service mark; and that a name or designation similar to trade name, if likely to mislead the public may not be used by another enterprise.

VII.            Geographical Indications:

A geographical indication is a sign used on goods that have a specific geographical origin and possess qualities or a reputation that are due to that place of origin.  Agricultural products typically have qualities that derive from their place of production and are influenced by specific local factors, such as climate and soil.

Whether a sign functions as an indication is a matter of national law and consumer perception.  Geographical indications may be used for a wide variety of agricultural products, such as “Tuscany” for olive oil produced in a specific area of Italy, or “Roquefort” for cheese produced in a certain region of France.  The use of geographical indications is not limited to agricultural products.

They may also highlight particular qualities of a product, which are due to human factors found in the place of origin of the products, such as specific manufacturing skills and traditions.  That place of origin may be a village or town, a region or a country.  An example for the latter is Switzerland or Swiss, which is widely perceived as a geographical indication for products that are made in Switzerland, in particular for watches.

An appellation of origin is a special kind of geographical indication, used on products that have a specific quality that is exclusively or essentially due to the geographical environment in which the products are produced.  The concept of geographical indication encompasses appellations of origin.  Examples of appellations of origin which are protected in states party to the Lisbon Agreement for the Protection of Appellations of Origin and their International Registration include “Habana” for tobacco grown in the Havana region of Cuba, or “Tequilla” for spirits produced in particular areas of Mexico.

Geographical indications are protected in accordance with national laws under a wide range of concepts, such as laws against unfair competition, consumer protection laws, laws for the protection of certification marks or special laws for the protection of geographical indications or appellations of origin.  In essence, unauthorized parties may not use geographical indications if such use is likely to mislead the public as to the true origin of the product.

Applicable sanctions range from court injunctions preventing the unauthorized use, to the payment of damage and fines or, in serious cases, imprisonment.

VIII.         Importance of IPR in today’s world!!

Creativity and innovation are the new drivers of the world economy.  Our global society is increasingly dependent on new technologies.  One of the consequences of this is the growing recognition of the importance of intangible assets relating to these technologies, known as IPRs.  The increasing importance of these IPRs is being recognized at all levels – political, societal and economic.  IPRs move and travel freely across borders, whether via the internet or accompanying individuals in their travels.  Yet, these same IPRs are governed by national laws, which vary in scope and effect as soon as they pass through one country’s border to the next, or depending on the country in which the IPR has been created or is to be applied.

Within knowledge based, innovation driven economies, the intellectual property system is a dynamic tool for wealth creation, providing an incentive for enterprises and individuals to create and innovate; a fertile setting for the development of, and trade in, intellectual assets, and a stable environment for domestic and foreign investment.

In the era of knowledge age or information age, the fundamental unit of most products and services is information-in one or another form.  Have you seen that

N-number of websites, virtual enterprises and virtual products?  All these rest upon the cornerstone of “information”: in digital or non-digital form.  These have become the top IPR issues; this Internet shall bring several new IPR issues to the fore.  In several cases such information is of proprietary nature, hence, the investment in that information product, knowledge product or the virtual product must be protected to encourage other similar initiatives.  With increasing worldwide access to electronic distribution, the damage caused by piracy to content providers may completely destroy the value built in their intellectual property.

The same context is valid in the case of companies who have earned consumer recognition for their brand names and trade marks.  A recognized brand name or trade mark represents the goodwill that has been built into the product or the service.  Consumers tend to associate the recognized brand name or trade mark with certain characteristics that are specific to that name or mark.  Therefore, companies should manage, protect and safeguard the investment in the related IPRs.  Not only this, they should be vigilant if anyone else is misusing or causing infringement of this intellectual property.

That is the crux of IPRs: to give credit where, and when, it is due.  With the emergence of the knowledge society and virtual products, the issue of safeguarding the investment in the information based products has certainly gained high importance.  We, as consumers or producers in the information chain, cannot afford to be ignorant about the IPRs!! Thus protection of IPR has definite (tangible) benefits, such as to propagate innovative culture, profitability, market leadership and helps creation of wealth for the individual and the nation.  India falling one among the developing countries have miles to go, as she has a vulnerable collection of traditional, oral, folklore, customary, agricultural, traditional, and medicinal like Ayurveda

 Etc. and besides not having much wealth and infrastructure, lack of awareness of IPRs among all strata of people, is a major set back to a developing country like India.

The influence of IPRs, however, is not limited to the private sector. In both developed and developing countries, there is a growing debate as to whether public or nationally funded research and resources should be published or protected by patents or other IPRs.  Governments are beginning to assert rights in their national heritages (e.g. bio-diversity), and to motivate universities to create technology transfer offices to create and manage IPRs.  The recent emphasis on the societal and the economic impacts of IPRs (e.g. job and wealth creation, as well as improved products or services) is also causing these issues  to be newly debated (and disputed ) in several international diplomatic forums, such as the WHO, WTO and the WIPO.