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International Intellectual Property Regime and Developmental Aspects


Intellectual property, very broadly, means the legal rights which result from intellectual activity in the industrial, scientific, literary and artistic fields. Countries have laws to protect intellectual property for two main reasons:
  • One is to give statutory expression to the moral and economic rights of creators in their creations and the rights of the public in access to those creations.
  • The second is to promote, as a deliberate act of Government policy, creativity and the dissemination and application of its results and to encourage fair trading which would contribute to economic and social development.
Generally speaking, intellectual property law aims at safeguarding creators and other producers of intellectual goods and services by granting them certain time-limited rights to control the use made of those productions. Those rights do not apply to the physical object in which the creation may be embodied but instead to the intellectual creation as such. Intellectual property is traditionally divided into two branches, industrial property and copyright. [1]

The Convention Establishing the World Intellectual Property Organization (WIPO), concluded in Stockholm on July 14, 1967 (Article 2(viii)) provides that “intellectual property shall include rights relating to: - literary, artistic and scientific works, - performances of performing artists, phonograms and broadcasts, - inventions in all fields of human endeavour, - scientific discoveries, - industrial designs, - trademarks, service marks and commercial names and designations, - protection against unfair competition, and all other rights resulting from intellectual activity in the industrial, scientific, literary or artistic fields.”[2]

Nature of Intellectual Property Rights

IPR are largely territorial rights, except copyright, which is global in nature in the sense that it is immediately available in all the members of the Berne Convention. These rights are awarded by the State and are monopoly rights, implying that no one can use these rights without the consent of the right holder. It is important to know that these rights have to be renewed from time to time for keeping them in force, except in case of copyright and trade secrets.

IPR have a fixed term, except trademark and geographical indications, which can have an indefinite life provided that these are renewed after a stipulated time specified in the law by paying official fees. Trade secrets also have an infinite life but they do not have to be renewed. IPR can be assigned, gifted, sold and licensed like any other property. Unlike other moveable and immoveable properties, these rights can be simultaneously held in many countries at the same time. IPR can be held only by legal entities, i.e. those who have the right to sell and purchase property.

In other words, an institution that is not autonomous may not be in a position to own an intellectual property. These rights, especially patents, copyrights, industrial designs, IC layout design and trade secrets, are associated with something new or original and, therefore, what is known in public domain cannot be protected through the rights mentioned above. Improvements and modifications made over known things can be protected. It would, however, be possible to use geographical indications for protecting some agriculture and traditional products.[3]

International Regime Of Intellectual Property Laws

Main Supranational and European Treaty and Convention Systems Relevant IP Rights Administered by Summary
Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) Copyright, Trademarks, Geographical indications, Industrial designs, Patents, Undisclosed information World Trade Organization (WTO) TRIPS establishes minimum levels of protection that each government has to give to the IP of fellow WTO members, based on these issues: how basic principles of the trading system and other international IP agreements should be applied; how to give adequate protection to IP rights; how Countries should enforce those rights adequately in their own territories; and how to settle IP disputes between WTO members.
Patent Cooperation Treaty (PCT) Patents World Intellectual Property Organization (WIPO) Allows applicant to file one single application for patent registration in any number of PCT countries designated.
Madrid System Trademarks WIPO Allows applicant to file one single application for trademark registration in any number of Madrid Agreement or Madrid Protocol designated countries. An international registration produces the same effects in each of the designated countries as if the trademark had been registered there directly unless protection is refused by that country.
Hague System Industrial Designs WIPO Allows applicant to file one single application for design registration in any number of designated countries that are signatories to the Hague Agreement. An international registration produces the same effects in each of the designated countries as if the design had been registered there directly unless protection is refused by that country.
International Classification of Goods and Services for Trademarks: Nice Agreement (currently 9th edition) Trademarks WIPO Internationally recognized classification of goods and services into the 45 classes (classes 1–34 goods; 35–45 services) used in the registration of trademarks.
European Patent Convention (EPC) Patents European Patent Office (PTO) Allows applicant to file one single application for patent registration in any number of EPC designated countries. An international registration produces the same effects in each of the designated countries as if the patent had been registered there directly unless protection is refused by that country.
Community Trade Mark Trademarks Office for Harmonization in the Internal Market (OHIM) Allows applicant to file one single application for trademark registration that covers all of the European Union member states.
Community Registered Design Designs OHIM Allows applicant to file one single application for registration of unlimited number of multiple designs. Registration covers all of the European Union member states.

Developmental Aspects

The Growth of Innovation and Intellectual Property

Intellectual property plays a key role in driving innovation and economic growth. Everywhere we go, we are surrounded by intellectual property. Trademarks signal the origin of products to consumers. Designs specify how products look. Copyrights enable artistic creations, such as books, music, paintings, photos, and films. Patents protect technical inventions in all fields of technology. Intellectual property’s role has evolved into a force that influences a wide swath of demand and sectors, making it an increasingly influential framework condition that affects not only innovation, but also trade, competition, taxes, and other areas. [4]The reality is intellectual property is mainstream and pervasive. In today’s economy, the generation and management of knowledge plays a predominant role in wealth creation, particularly when compared with traditional factors of production such as land, labour, and capital.[5]

Intellectual Property Underpins Innovation and Growth

Intellectual property rights arrangements are well recognized, going back to the Middle Ages, as enabling innovators to earn the returns necessary to continue to innovate and promote the availability of leading-edge technologies. Nobel laureate economist Douglas North, one of the foremost scholars of economic history, argues that the introduction of intellectual property rights had one of the most profound impacts on spurring economic growth in human history.

North points out that average global economic growth rates for about one and a half millennia prior to the Industrial Revolution were essentially zero. Eighteenth-century elites in England had practically the same per capita income as their counterparts in third-century Rome. North has shown that the inflection point toward greater economic growth was the widespread development of patent systems in the 19th century.[6] Gregory Clark, in his seminal book, Farewell to Alms: A Brief Economic History of the World, reached a similar conclusion that the introduction of IPRs was catalytic to turbo-charging global economic growth.[7]

Robust intellectual property rights spur innovative activity by increasing the appropriability of the returns to innovation, enabling innovators to capture enough of the benefits of their own innovative activity to justify taking considerable risks. By raising the private rate of return closer to the social rate of return, intellectual property rights address the knowledge-asset incentive problem, allowing inventors to realize economic gain from their inventions, thereby catalysing investment in knowledge creation. If innovators know that most of the benefits from their innovations would go to others without compensation, they would be much less likely and capable of engaging in future innovations. In addition, as they capture a larger portion of the benefits of their innovative activity, innovating companies obtain the resources to pursue the next generation of innovative activities. IP thus produces a number of positive benefits, including:
  1. creating powerful incentives for domestic innovation;
  2. inducing knowledge spill overs that help others to innovate;
  3. ensuring a country’s companies can focus on operating productively and innovating, instead of having to devote an undue amount of their time and resources to protecting their IP in an environment where it’s at risk;
  4. promoting the international diffusion of technology, innovation, and knowhow; and
  5. boosting a country’s levels of research and development, inbound foreign direct investment (FDI), and exports of goods and services.
     
The evidence shows that strong intellectual property rights protections are vitally important for both developed and developing countries alike. As the definitive 2010 OECD review of the effects of intellectual property rights protections on developing countries, “Policy Complements to the Strengthening of IPRs in Developing Countries” found, “The results point to a tendency for IPR reform to deliver positive economic results.”

The OECD study found that developing-country IPR reforms concerning patent protection have tended to deliver the most substantial results, although the results for copyright reform and trademark reform are also positive and significant. But to have the greatest impact on economic growth, IPR reforms must occur concomitantly with other positive complements, particularly ones regarding inputs for innovative and productive processes and the ability to conduct business. These include policies that influence the macro-environment for firms as well as the availability of resources (e.g., related to education), a country’s legal and institutional conditions, and fiscal incentives.

IPRs Strengthen Exports and Industry Growth

Academic research has also found that stronger IPR protections support exports from developing countries and faster growth rates of certain industries. Yang and Kuo argue that stronger IPR protection improves the export performance of firms benefitting from technology transfer. And in their research, Cavazos Cepeda et al. found that trademark protection has a statistically significant association in relation to the export turnover, sales, and total assets of firms studied. They also found a significant association between copyrights and export turnover. Moreover, they found “a positive influence of patent right protection on export turnover (e.g., sales) under certain specifications with respect to complementary policies.”[8]

In cross-country studies, researchers have found that stronger patent rights are associated with faster company growth in IP-intensive industries such as pharmaceuticals. In fact, during the early 1990s, a one-standard-deviation increase in patent rights was associated with an increase in firm growth of 0.69 percent (an advantage amounting to nearly one-fifth of the average industry growth rate of 3.7 percent).[9]
Consequences of Countries Not Enacting Robust IPR Protections and Enforcement

Nations that have not implemented—or do not enforce—robust intellectual property rights protections end up harming their economic development in at least three principle ways. First, they deter future innovative activity. Second, they discourage trade and foreign direct investment, which only hurts their own consumers and businesses, by both limiting their choices and inhibiting their enterprises’ ability to access best-of-breed technologies that are vital to boosting domestic productivity. Third, in countries with weak IP protections, firms are forced to invest undue amounts of resources in protection rather than invention.

Ironically, developing countries’ own economic development opportunities and intellectual property development potential are inhibited by their own weak intellectual property protections. For instance, the lack of effective protection for intellectual property rights in China has limited the introduction of advanced technology and innovation investments by foreign companies, thereby reducing potential benefits to local innovation capacity. [10]As Cavazos Cepeda et al. found in a case study of IPR protections in that economy, “China has made progress in strengthening the protection of intellectual property over the past two decades, as attested to by indicators such as the Patent Rights Index. However, uncertainty around the protection of intellectual property [remains] an important deterrent for foreign as well as domestic firms engaging in R&D-related activities.”

Indian IP Law Developments In Consonance With The International Regime

Indian Patent Act, 1856

The first Indian patent laws were promulgated in 1856. These were modified from time to time. New patent laws were made after the independence in the form of the Indian Patent Act 1970. The Act has now been radically amended to become fully compliant with the provisions of the TRIPS. The most recent amendment was made in 2005, which was preceded by the amendments in 2000 and 2003. While the process of bringing out amendments was ongoing, India became a member of the Paris Convention, Patent Cooperation Treaty and Budapest Treaty.[11]

Indian Trademarks Act,1999

The Indian trademarks act specifies that any mark which is distinctive i.e. capable of distinguishing goods and services of one undertaking from another and capable of being represented graphically can be trademarks. Since trademarks do not grant exclusive right that could be exploited, there is no need to limit their validity. But without time limit, trademark validity would lead to unnecessary number of registered trademarks without any applicability. In India, the initial term of trademark registration is for 10 years and thereafter it has to be renewed from time to time.[12]

Indian Copyright Act, 1957

The registration of copyright is carried out under the Indian Copyright Act, 1957. Recently the act was amended in 2012 known as The Copyright (amendment) Act, 2012. As per rule, author gets copy rights just after creating its work without any formality but work can be registered at Register of copyrights maintained in the Copyright office of Department of Education as prima- facie evidence.

In India copyrights exist for 60 years for literary, dramatic, musical and artistic works after the death of creator. In case of photograph, film, sound recording copyright term is 60 years from the beginning of calendar year next following year in which it is published or released. Besides these, author also gets moral rights for its creations.

Geographical Indications of Goods (Registration and Protection) Act, 1999 and the Geographical Indication of Goods (Regulation and Protection) Rules, 2002.

In India, the GIs regime is regulated by the Geographical Indications of Goods (Registration and Protection) Act, 1999 and the Geographical Indication of Goods (Regulation and Protection) Rules, 2002.[13] However, registering of the GI is not compulsory in the India as the owner of the unregistered GI can also enforce the actions with the help of passing off against the infringer, but it is recommendable to register the GI as the registration certificate acts as the prima facie evidence in the court at the time of arising of any dispute, and no additional evidence is required to prove the validity. Examples of some of the popular GIs are – Basmati Rice, Kanjeepuram sarees and Darjeeling tea.

In the Indian act, GI is used for identifying goods from a particular geographical location and its origin. It encircles the agriculture goods and natural goods and is extended up to the manufactured goods also. In order to register the GI, the goods should possess unique characteristics and reputation with other qualities attributed to its geographical origin, e.g. climate, quality of soil, processing methods, etc.[14]

Conclusion And Suggestions
In knowledge-based economy, intellectual property rights are very much essential for progressive societal development. The IPR is basic necessity to be a part of local as well as global competitive trade as without dissemination of IPR knowledge and implementation, creating the innovative environment is really impossible. It is essential for policy makers to include IPR in basic educational system and promote IPR registration by encouraging the innovators and creators. India is having all the resources in terms of available raw material, cheap labour, innovative and creative dedicated manpower. No doubt that India and other developing countries will definitely harness its proportionate share in global trade by exploration in Intellectual Property Rights.[15]

Moreover, in my personal opinion, absolute rigidity in the granting and functioning of IPR can lead to greater harm than good. For example, when the world is observing a global pandemic and a particular pharmacy comes up with a vaccine, flexible licensing procedures must be employed to ensure proper distribution of the vaccine, for public welfare.

End-Notes:
  1. World Intellectual Property Organisation, WIPO Intellectual Property Handbook, No. 489 (E) WIPO 2004
  2. Convention Establishing the World Intellectual Property Organization, June 1st,1984 (TRT/CONVENTION/002)
  3. R. Tiwari, G. Tiwari, A. K. Rai, and Birendra Srivastawa, Management of intellectual property rights in India: An updated review, J Nat Sci Biol Med (2001)
  4. Organisation for Economic Cooperation and Development (OECD), Enquiry into Intellectual Property’s Economic Impact (Paris: OECD, 2015), available at http://www.oecd.org/sti/ieconomy/KBC2-IP.Final.pdf.
  5. World Intellectual Property Organization (WIPO), “Intellectual Property Rights and Innovation in Small and Medium-Sized Enterprises” (Paris: WIPO, 2015), available at http://www.wipo.int/export/sites/www/sme/en/documents/pdf/iprs_innovation.pdf.
  6. Douglass C. North, Institutions, Institutional Change, and Economic Performance (Cambridge: Cambridge University Press, 1990).
  7. Gregory Clark, Farewell to Alms: A Brief Economic History of the World (Princeton, N.J.: Princeton University Press, 2007)
  8. Cavazos Cepeda, Lippoldt, and Senft, Policy Complements
  9. Stephen Ezell and Nigel Cory, The way forward for Intellectual Property Internationally, Information Technology and Innovation Foundation, available at https://itif.org/publications/2019/04/25/way-forward-intellectual-property-internationally
  10. Xiolan Fu, “Foreign Direct Investment, Absorptive Capacity and Regional Innovation Capabilities: Evidence from China,” Oxford Development Studies 36, no. 1 (2008): 89-110.
  11. R. Tiwari, G. Tiwari, A. K. Rai, and Birendra Srivastawa, Management of intellectual property rights in India: An updated review, J Nat Sci Biol Med (2001)
  12. Lalit Jajpura, Bhupinder Singha and Raj Kishore Nayak, An Introduction to Intellectual Property Rights and their Importance in Indian Context, Journal of Intellectual Property Rights, Vol 22, January 2017, pp 32-41
  13. Ginarte, Juan C, Walter GP. Determinants of patent rights: A cross-national Study. Res Policy. 2009;2:283–301
  14. Hall EA. The impact of a weakened patent policy on development incentives. Quart Rev Econ Business. 1999; 31:79–88.
  15. Lalit Jajpura, Bhupinder Singha and Raj Kishore Nayak, An Introduction to Intellectual Property Rights and their Importance in Indian Context, Journal of Intellectual Property Rights, Vol 22, January 2017, pp 32-41

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