Introduction

Economic value of IP

 In the modern day IP has taken on a role comparable to oil

 This is because economic value is now rooted in human intellect & creativity rather
than on physical resources
 It powers the knowledge economy
 It enhances a party’s bargaining power since it commands value in commercial
transactions
 It’s referred to as “invisible gold” because it yields returns despite having a physical
form
 These are often the most protected & strategically leveraged components of a
business (ie – pharmaceuticals, technology)
 Functions as a global currency (ie – facilitates global trade & investment)

IP as a Form of Property

 IP is an intangible asset
 However, the law treats it similar to physical property
 It can be:
i. Owned
ii. Licensed
iii. Transferred
iv. Monetized
 The rights also allow creators to:
i. Control reproduction
ii. Translate/ adapt their work
iii. Distribute/ publish their work online
 Recognizes the output of creative/innovative work as a proprietary right
 However, IP’s influence becomes tangible when embodied in products or services
(ie – branded merchandise, patented innovations etc.)
 These assets drive business value & competitive differentiation in ways physical
resources cannot

The 4th Industrial Revolution (4IR) & the Ascendance of IP

 4IR signals a fundamental transformation of how societies operate
 It’s characterized by technologies such as mobile supercomputing, artificial
intelligence & autonomous vehicles
 The foundational input in these economies is intellectual capital
 Therefore, the central figures of wealth creation in such economies are knowledge
workers (those who generate/manage/ exploit intellectual assets)

Types of IP

 IP is traditionally divided into 2 types:

IP

Industrial Copyrights &

Property Related Rights

Patents

Trademarks

Industrial
Designs

Geographical
Indications

Trade Secrets

1. Copyrights
- Protection of rights over original literary, artistic & scientific works

2. Trademarks
- Protection of marks that distinguish goods or services of an enterprise

3. Patents
- Protection of a novel invention of a product or process that provides a new
solution to a technical problem
 - Important:
 In exchange for this exclusivity the patent owner has to make the
technical information behind the innovation available to the public after
the exclusivity period
 Before distributing/selling an innovation inventors have to make sure that
they have the Freedom to Operate (meaning that their operation would
not infringe existing patent rights)

4. Trade secrets
- Protection of confidential business information that provides a competitive
edge

5. Industrial designs
- Protection of the appearance & visual appeal of a product which makes it
distinguishable
- Applies to both 2-dimensional & 3-dimensional features

6. Geographical indications
- Protection of signs used on products whose qualities are attributable to a
specific geographical location, to signify its origin from that location

Type of IP Subject Matter Duration of Exclusive Rights

Copyrights Original literary, artistic orAuthor’s lifetime from the
scientific works date of creation + 70 years
afterwards
Patents Products or processes which 20 years from the date of
provide new solutions to registration (non-
technical problems renewable)
Trademarks Signs that uniquely 10 years from the date of
distinguish goods or services registration (infinitely
of an enterprise renewable)
Industrial designs Appearance/visual appeal 10-15 years based on the
distinguishing a product jurisdiction
Geographical indications Signs that indicate origin Indefinite – contingent on
from a certain location the link w/ the place of
origin
Trade secrets Confidential business Until publicly disclosed or
information that gives a reverse engineered
competitive advantage (meaning someone looks at
a product & works their way
back to the trade secret)
 Unfair Competition
 Dishonest business practices that undermine fair trade (ie – misleading marketing,
imitation)

IP Framework

 Stems from the Western notion of private property, which confers ownership to the
creator of a good, provided that the work is,
i. New
ii. Original
iii. Unique
iv. Innovative
 This is assessed in the relevant geographical or temporal (period in time) context

Purpose of IP Rights

1. Protects creations from unauthorised use

2. Enhances product visibility, market appeal & valuation
3. Creates market differentiation
4. Provides access to valuable technical & commercial knowledge
5. Prevents accidental infringement or loss of proprietary assets

Case Law Concerning Debates Related to IP

1. Delhi University Photocopy Shop Case

- A small photocopy shop in the Delhi University has been compiling
photocopied excerpts from copyrighted books for students’ use
- Publishers sued for infringement
- Held: Reproducing under 10% of a book is fair use (referencing
Cambridge University Press v Becker)
- Highlights the debate between access & protection

2. Sarachchandra v Sannasgala
- D published & sold “Malagiya Eththo” by Ediriweera Sarachchandra w/out
securing permission from its legal rights holder (his wife)
- P sued for infringement under S.6 & S.178 of the IPA
- S.178 was used to treat the action as a criminal offence
 3. Bandu Samarasinghe v Bindu Botalegama & Ors (Bandu v Bindu)
- P filed a criminal case against D for imitating his acting style
- Held: Acquitted D since there wasn’t sufficient evidence to prove the
charges

Key Terminology in the IP Landscape

1. Globalization –
 Facilitates transnational access to IP
 Requires harmonization across jurisdictions
2. Knowledge economy –
 An economy primarily driven by intellectual capital & intangible assets
3. TRIPS –
 Stands for Trade-Related Aspects of Intellectual Property Rights
 Is a WTO Agreement
 Establishes minimum standards for IP protection
4. Intangible assets –
 Non-physical assets that carry economic value
5. Public goods –
 Non-rivalrous & non-excludable goods
6. Technology & innovation –
 Core outputs of IP-intensive industries
 Requires strategic protection to maintain competitive advantage
7. Know-how & R&D –
 Operation expertise & research process that often forms the basis of
patentable inventions & trade secrets
8. Incentives –
 IP law aims to reward creators by granting exclusive rights over their
creations
 This encourages further innovation
9. Exclusive rights & monopoly –
 Rights granted to IP owners often create a temporary monopoly for the
owner to exploit their creation commercially

Theoretical Justifications of IP Rights

  Justifications provided by Fritz Machlup (economist):
1. Reward-by-monopoly Theory
 Rests on the utilitarian theory introduced by Jeromy Bentham, which
posits that overall social welfare would be increased when creators are
incentivized to create
 This is because the homo economicus (rational, self-interested actor)
responds to incentives
 Creators should be rewarded in proportion to the utility of their
inventions
Incentive
theory 2. Monopoly-profit-incentive Theory
(the dominant
 Rests on the utilitarian theory introduced by Jeromy Bentham
theory)
 Creators are incentive by the prospect of enjoying profits through future
monopolies

3. Exchange-for-secrets Theory
 This too rests on the utilitarian theory
 Here, the society offers to protect the innovation for a set period in
exchange of disclosure of the inventions to the public

4. Natural Law Theory

 Individuals have a natural right to the fruits of their labour
 Therefore, creators should have a right to IPs which result from their
effort, innovation & skill
 First introduced by John Locke

 Other theories:

5. Prospect Theory (the latest theory)

 Protection of IP rights serves not just as the origin of creations but as a
platform to scale & distribute innovation

6. Personality Theory (Georg Hegel)

 Intellectual creations are personal expressions of the creator’s identity
 Therefore, protecting IPs,
i. Allows individuals to control how their personality is expressed
ii. Ensures respect for their personal autonomy & moral rights as a
result

7. Tragedy of the Commons

  Excessive use of intellectual creations w/out regulation can lead to
exploitation & decline of innovation

8. Tragedy of the Anti-Commons

 Ownership of different aspects of intellectual property by multiple
individuals might lead to under-use & slow progress

Philosophies Related to Origin of IP

 Adam Smith in “Wealth of Nations” – Division of labour is what has enabled the
discovery of IP

Multilateral IP Treaties
1. Paris Convention
 Protects industrial property across member states

2. Berne Convention
 Protects copyrights & related rights

3. Rome Convention
 Protects performances, sound recording & broadcasts

4. TRIPS Agreement
 Integration of IP rules into international trade law (ITL) under the WTO
framework
 Binds member states to enforce minimum standards