This article is written by Niharika Chavan, pursuing a Diploma in Intellectual Property, Media, and Entertainment Laws from Lawsikho.com.
In the modern era, the tremendous increase in IP applications witnessed in recent years reflects the growing importance of technology and innovation in the global economy and our daily lives. From waking up on a Sleepwell mattress, having a cup of Nestle milk and Britannia bread for breakfast while watching a Sony T.V, having a bath using Lux soap, wearing Peter England clothes, Bata shoes and a Titan watch, driving a BMW car to the office, ordering lunch from Zomato, working on a Lenovo laptop and having a Nescafe coffee in the evening, a person is engulfed with intellectual properties from dawn to dusk.
A person has been bestowed with imagination and creativity with which one has been producing various ideas, inventions and products. Intellectual property can be defined as a group of intangible assets that are owned by any individual person or an institution. The World Intellectual Property Organisation (WIPO) defines Intellectual Property Rights as “creations of the mind; inventions; literary and artistic works and symbols, names and images used in commerce”. In ancient times, a person’s intellectual property was a common property that was unprotected. Anybody could copy and use the intellectual properties of a person. Even, in today’s web-based environment, there is a very high risk of creative ideas getting stolen without the consent of the author. To protect, provide security and enhance the intrinsic value of such intangible properties, intellectual property rights (IPR) laws were enacted.
Let’s have a quick look at the kinds of intellectual properties:
What is known as a patent?
A patent is an exclusive right granted to an inventor for his/her invention, which may be a product or a process that provides a new way of doing something, or offers a new technical solution to a problem. A few of the benefits of filing a patent are that a patent holder has a monopoly right over his patent, it helps in refraining others from making, selling or using the patented invention for a specific period and helps keep competitors at bay.
A patent can be commercially exploited by way of assignment or license. Assignment of Patents, to put it in simple words, means the sale of a patent. It is the whole and complete transfer of ownership from the patent owner to any other party based on an assignment agreement. Whereas, a patent license allows the other party to use the patent in a controlled manner and helps the patent owner to earn revenue while keeping the ownership rights of the patent safe with himself.
In India, the term of protection for a Patent is 20 years from the date of filing of the application and is primarily governed by the Patent Act of 1970. The primary office for patents in India is the Indian Intellectual Property Office (IPO).
A wonderful example of a Patent is the “C-Pen” which was invented by Christer Fahraeus. It is a pen-scanner with a machine as small as a pen which helps to transfer text from paper directly into a computer.
What is a trademark?
A trademark is a sign, symbol, word, or words that are legally registered or established by use as representing a company or product that is capable of distinguishing the goods or services of one enterprise from those of other enterprises. The benefits of registering a trademark include the owner being the sole and exclusive owner of the trademark, builds goodwill for the enterprise and trust among customers, helps customers to differentiate and recognize the quality of the product, protects the trademark from getting infringed and ultimately helps the owner to earn revenue.
Revenue can be earned by commercially exploiting the trademark in the form of assignment, license, franchising or merchandising. In a trademark assignment complete transfer of ownership from the owner to the other party takes place. In the case of a trademark license, partial ownership is transferred to the other party while the owner enjoys ownership rights along with revenue. Franchising is when a party who is the owner, gives another party the right to market a product or service using the trademark and logo of their business. Examples of Franchising are Burger King and McDonald’s. Trademark Merchandising is when a well-known trademark is allowed to be printed or used on goods that are different from its primary identification, for example, t-shirts with coca-cola print on them.
In India, the term of protection for a trademark is 10 years from the date of application, renewable every 10 years on payment of the requisite fee and is primarily governed by the Trademarks Act, 1999. The primary office for trademarks in India is the Indian Intellectual Property Office (IPO).
The brand name “McDonald’s” and its slogan “I’m lovin’ it” are excellent examples of a trademark.
Understanding industrial design
A design simply means the features of shape, pattern, ornament, configuration, the composition of lines or colours applied to a particular article whether it is in a two-dimensional or three-dimensional form or both, by any industrial process or means, whether it may be mechanical, chemical, manual, separate or combined, which in its finished article appeal to and are judged only by the eye.
Producing, importing, selling or distributing products that have an identical appearance, fraudulent or obvious imitations by rivals can be avoided by registering the industrial design. Industrial designs can be assigned or licensed just like trademarks or patents but in the case of design license, the licensee shall not own the copyright of the design.
In India, the term of protection of design is 10 years from the date of the application and can be extended for a further five years on payment of an extension fee and is governed by the Designs Act, 2000. The Indian Intellectual Property Office (IPO) is the primary office for designs in India. “iPhone” is one of the best examples of industrial design.
What is copyright?
Copyright is also known as the author’s right. It is a legal term used to describe the rights that creators have over their own literary and artistic works. Works like books, music, paintings, sculptures, films, computer programs, databases, advertisements, maps and technical drawings are all covered under copyright.
When an artist intentionally uses a copyrighted work of another artist and creates something new and unique by changing, building, or modifying it, it is known as appropriation art. It is considered as fair use which is an exception to copyright. The best example of appropriation art is news reporting, in which part of the original work is repeated.
In India, the term of protection in the case of original literary, dramatic, musical and artistic works is the lifetime of the Author plus 60 years period is counted from the year following the death of the author and is governed by the Copyright Act, 1957.
It is a name or sign used on certain products which correspond to the geographic location or origin of the product. The use of geographical location may act as a certification that the product possesses certain qualities as per the traditional method.
Geographical indications could help rural producers in developing countries to enter national markets on a larger scale and also enter international markets via export thereby increasing their income, local jobs along with preserving the diversity and contributing to rural development. Darjeeling tea and Agra Petha are common examples of geographical indications.
Strong IP Laws stand to make a tremendous contribution to the national as well as the international economy of every nation. However, many businesses still fail to realize the value of Intellectual Property (IP) and the risks associated with it. Thus, gross ignorance in implementing IP protection could result in harmful to the overall growth of the business.
Benefits of intellectual property rights
The benefits of IP Rights in the modern era are as follows:
To protect the unique ideas and creation
People will try to replicate a unique idea or the creation of others for their own commercial gains. Hence, before any third party illegally infringes it, it is very important to secure the IP assets. A person can take IP protection irrespective of the kind and size of the business. So, after evaluating the business needs and circumstances, appropriate action for IP protection must be taken. It is crucial to note that it is the complete responsibility of the proprietor to protect his intellectual property from infringement by any person or party.
In the case of Reverie Language Technologies, Delhi High Court restrained a Chinese Tech Company from using Reverie’s proprietary font library software because Reverie had a copyright of the software which in return resulted in a favourable verdict for Reverie. Hence, it is imperative to note that the protection of IP is crucial and shall always prove to be favourable for the IP holder.
Accelerates business growth
There are huge chances that unprotected creative ideas can be used by rivals to take away market share and slow down business growth. Hence small and medium-sized businesses need to shield their exclusive goods or services. In the initial stage of a business, it can be very hazardous to lose a market share as it will result in harming the business health in the long term.
Enhance the market value of your business
Having registered and protected IP assets can raise the goodwill of your business. Goodwill is an intangible asset and adds to the overall value of the business. A company’s brand name value, strong customer base and relations, patents and solid employee relations are few examples of goodwill.
Goodwill will prove very profitable in case of sale, merger or acquisition as, if the company’s goodwill is high then the purchase price of the business will exceed its book value. The registration of IP will result in a constant stream of fees via licensing, sale or commercialization of protected IP goods or services and in return increase the income that will boost your market share and raise your profits.
IP creates and supports high paying jobs
Currently, hundreds of millions of people in the world are employed in industries that are IP-intensive. The Government of India announced the “National IPR Policy”, a vision document on 12th May 2016, with its tagline as ‘Creative India; Innovative India’. It is a strategy towards a stronger economic future and expediting ease of doing business in India.
Jobs in IP sector industries are expected to grow faster in the upcoming next decade than ever before. India moved up to 66th place from 81st in 2015 in the Global Innovation Index (GII). GII also reports that India has all the ingredients needed to become a global driver of innovation including strong market potential, an excellent talent pool, and an underlying culture of frugal innovation.
Convert innovative ideas into profit-making assets
IPR encourages innovation and rewards entrepreneurs. Generally, ideas possess very little value of their own. In the modern era, IPR has great untapped potential to convert innovative ideas into a profit-yielding machine. IP registrations can help you to turn ideas into commercially successful products and services. Licensing IP’s can lead to additional income and a steady stream of royalties that can boost the business.
For example, Amazon has recently acquired the patent for a modular super drone which is said to be the future of online deliveries. It will help Amazon to deliver products to their customers through the way of drones. Such innovative ideas if adopted by businesses can lead to huge profits and goodwill of the business.
Tackle global challenges by breakthrough solutions
Almost all of the 300 products which are crucial to saving or improving people’s lives that are listed on the WHO’s Essential Drug List are a result of the R&D intensive pharmaceutical industry that depends on patent protections. New products are being created by innovative agricultural companies to help farmers produce the best products for the world’s hunger while reducing the environmental impact of agriculture. Energy security and climate change can be improvised with the help of IP related discoveries in alternative energy and green technologies.
For example, Walmart recently filed a patent for its pollination drones. They include cameras that would allow the robotic bees to identify crops and then allow them to pollinate the same way as real bees do. Robotic bees like these could be a huge advantage to the industry of agriculture across the globe considering the declining population of bees worldwide. Breakthrough solutions like these could result in tackling global challenges.
Easing the marketing process
IP is a crucial tool in creating an identity for your business. IP can help you differentiate your products and services in the market from those of other seller’s and promote them to reach the targeted customers.
Raise finance for your business
IP assets can be monetised and commercialized via sale, licensing or using them as collateral for debt financing. Moreover, IP can be used as an advantage when applying for public or government funding, grants, subsidies or loans.
For example, the National IPR Policy allows businesses to keep their IP assets as collateral when they require finance. Hence, Protected IP can help a business raise finance.
Strong IP protects consumers and families
Strong IP helps the consumers to make the best choice about the reliability, safety and effectiveness of their product purchases. Enforced IP rights ensure the products authenticity and high quality that consumers expect from the producers. Ease of mind and confidence that consumers demand and markets rely on, can be promoted with the help of IP rights.
Enhance export business opportunities
The level of productivity and competitiveness in export markets can be accelerated by IP. An IPR holder may use brands and designs to market goods and services abroad, seek franchising agreements with overseas corporations, or export their patented proprietary products.
For example, McDonald’s and Burger King earlier had franchises only in the U.S but now they have franchises worldwide, they enhanced their business by taking advantage of Franchising.
IP is increasingly global and vital and hence all individuals and businesses should register their IP’s which will help them in earning additional income and can also save others from stealing their ideas and innovation. But, the challenge is that IP systems remain largely national or regionally based. Another major challenge faced by IP is that those rights which are granted in one jurisdiction may not be applicable elsewhere. This raises the need for all the countries to have poignant laws for protecting IP.
The government needs to formulate proper IP laws for the individuals as well as for the companies, which should neither be too strict nor too lenient. The overall structure also needs to be improved by the government for forging a long-term social and economic development of a country. Hence, it can be deduced that IP protection is extremely significant in the modern era.
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