This article is written by Poonam Nahar, pursuing a Diploma in Intellectual Property, Media and Entertainment Laws, from LawSikho.
Table of Contents
Introduction
Let me introduce Intellectual Property (IP) in a very unique way. Let’s take an example of your daily routine in your life. You wake up from your ‘Sleepwell’ mattress, brush your teeth using ‘Sensodyne’ toothpaste, you bath under ‘Jaquar’ shower with a ‘Lux’ soap and ‘Lakme’ face wash then wear ‘Zara’ clothes, eat ‘Red Banana’ fruit in breakfast while reading ‘The Hindu’ newspaper and finally drive a ‘Kia’ car to your office.
This sounds crazy right but this is IP, where there’s not even a single moment you are not using anything or any brand products. The products that you use have Intellectual Property in them. From the mattress you sleep on to the car you drive everything has Intellectual Property in it. Now, you might be wondering what IP is.
Every product we see, we use is made intellectually first and then takes its physical form.
Intellectual property is concerned with “Protecting the Work of the Human Intellect” and the rights permitted on it allows its owner to benefit from the creation of the intellectual endeavor by creating a monopoly over it. Such a benefit is not always a natural right but requires recognition by a statute. Hence, IP plays an important role in the modern era as it plays a key role in every sector.
In this article we will further learn about the meaning of Intellectual Property (IP) and Intellectual Property Rights (IPR), ownership in comparison of tangible and intangible property and its benefits with examples, how IPR helps in monetizing IP with examples and conclusion.
Meaning of Intellectual Property
Intellectual property (IP) refers to ‘Creations of the Mind’, such as works of art, designs, logos, inventions, Computer programs, database, literary works, recordings, brands etc.
IP plays an important role in cultural as well as in economic life as it covers a wide range of activities. The importance of IP is recognized by various laws which protect intellectual property rights. IP is protected in law by various Acts such as Copyright Act, Patents Act, and Trademarks Act, Industrial Designs Act etc. which allow people to earn recognition, financial benefit from what they invent or create and get monopoly over the creation. By striking the right balance between the needs of the innovators and its interests and the vast public interest, the Intellectual property system aims to encourage the development of an environment in which creativity and innovation can flourish.
From the above mentioned example of daily life routine mentioned in the introduction part, let us recognize the kinds of IP ~ You identify the brands because of the Trademarks, therefore when you are using a Sleepwell mattress or Sensodyne toothpaste, or a Lux soap, or lakme face wash, or Zara clothes etc. you are using it because it has created a brand value. Hence it is an instance of Trademark. You choose to purchase a shower of a particular shape which is a result of Industrial Designs and of a particular technology which is being used widely because of its Patent. You eat red banana which indicates the Geographical indications, you read newspapers which is a result of Copyright and so on because they have something unique in them. The car which you ride to the office indicates Industrial designs. Hence, all of these are Intellectual Property.
Meaning of Intellectual Rights
Intellectual Property Rights are very essential to develop innovations and creations as artists, inventors, scientists and businesses put a lot of time, money, and energy to make their creation significant. In order to encourage them to create such innovations, is by giving them rights to protect their intellectual property. Hence, this allows them to make a fair return on their investment. IPR’s are also safeguarded under Article 27 of the Universal Declaration of Human Rights.
Intellectual Property Rights are generally granted or protected under the law to create a sustainable eco-system which promotes innovation and such rights are given to owners of IP or creators over the creations of their mind, which would also act as a catalyst for further creation of IP that would also act as a catalyst for further creation of IP that would ultimately benefit the economy.
It is an exclusive right over the use of his/her creation for a certain period of time and some depending on payment for maintaining the IP right, after which they fall in the public domain to be used for further creative endeavors. Hence, owners or creators get benefits as well as control over the exploitation of their creation.
Ownership: Tangible property and Intangible property
In today’s world, business succeeds and flourish when both tangible assets and intangible assets play a substantial role.
- Tangible assets are also known as Physical assets which includes capital, equipment, securities, machinery, infrastructure like land and building and other commercial assets.
- Intangible assets which include ideas, knowledge, creative innovations, designs, patents, copyrights, brand equity and hence collectively it forms intellectual capital of the company.
Benefits of ownership with examples
The main reason that differentiate tangible property from intangible property i.e. ‘intellectual property’ is its intangibility. Intellectual property rights allow creators or owners to benefit from their works when they are used economically. The owner of an IPR is the person entitled to commercially exploit it, hence it is important to establish ownership in order to avoid disputes.
- IP increases competition in export markets by seeking franchise agreements with overseas businesses, or export patented products.
- IP assets can be monetized by sale, licensing or using them as collateral for debt financing, commercialization of products that increase profit and market share of the business.
- IP creates an image of business which gets converted into a brand as differentiation of goods and services can easily be done in the market.
- IP turns creative ideas into profit-oriented assets where royalties as an additional income can be earned.
- IP promotes economic development which improves the quality of life.
- IP right being a negative right prevents individuals, organizations or any other third parties from copying or exploiting the original work of the owner or inventor or creator of such work.
- IP right is an exclusive right to produce the work, make copies of the work, market work, etc.
- The IP owner has the right to sue if anyone infringes its intellectual property.
For instance, if the owner registered its brand under ‘Trademark’ then registration of such IP gives protection to an enterprise and discourages counterfeiting. Hence, customers can buy the goods or avail services with full confidence.
A film which gives pleasure to millions of people world-wide must be registered under ‘Copyright’ for his/her film, recordings, music, songs, screen plays, etc. in order to avoid any sought of infringements and protect the owner’s right.
How does IPR help in monetizing the IP with examples?
Through branding strategies, IPR helps businesses to get established with their own identity. As the competition is increasing in this global market, creative ideas, Knowledge, innovations and its economic use has turned up to be crucial and significant assets for any business to accomplish and succeed which brings economic value by innovation, invention and creativity. It is important to note that from a creative and innovative idea to an invention, at every stage of the chain IP amplifies the value of the company.
An enterprise invests a lot of money, time, and efforts to make a creative idea into a property and then to register their IP, in return the owner or creator of works find ways to earn money from this registered IP. Here is when monetizing IP comes into picture. Monetization of IP is an act to generate revenues from IP development. In simple terms, IP monetization means a process to convert a non-tangible and non-revenue generating product into royalties, revenues, and money.
For instance, exploitation of work. In order to exploit the registered IP, an owner of a music can upload his music online on various music apps, YouTube etc. he gains several revenues like ad revenues etc. but if he gives his music license to some other party in order to use his music in lieu he gains royalties from licensing his music.
In monetization of IP campaigns, the first step should be to clearly identify the goals. Basically, there are two paths you can take:
- Deriving value by spinning off new businesses that are focused on improving the market infrastructure for products based on the IP.
- Approaching global businesses or partners to offer licensing opportunities in certain fields where the IP can be implemented.
Examples of IP or intangible assets which can be monetize using IPR:
- Trademarks aim to distinguish a product from one entity to another in a similar business line. Trademarks such as symbols, logos etc. ensures that no other business entity can use such or similar trademark to carry out trading in that industry or segment. Protecting a trademark gives exclusive rights over that mark to the owner that further enables them to attach the company’s goodwill and reputation to that mark.
Case law: International Society for Krishna Consciousness (ISKCON) vs. Iskcon Apparel Pvt. Ltd & Ors.
In this case, a suit was filed before the Bombay High Court for alleged trademark infringement and passing off. The Plaintiff contended that the Defendant was infringing their trademark by selling garments under the name of ‘Iskcon’, and attempting to pass off his brand as being associated with the Plaintiff. The Plaintiff also sought to get their mark declared as a well-known trademark.
In the present scenario, the Court declared that a clear case of infringement of trademark had been established, and hence ordered the Defendants to refrain from using the Plaintiff’s mark. It was also concluded that the Plaintiff’s mark satisfied all the statutory requirements of a well-known trademark, and thus the Court declared it as such.
- Patents aim to encourage economic and technological developments by rewarding new solutions resulting from intellectual creativity. It is an exclusive right granted to an invention either for a product or a process of such invention. Patent right which restricts or prevents any unauthorized third party from using or creating such patented product or process, indirectly, providing the company a monopoly over the patented work.
Case law: Novartis vs. Cipla, 2015
In this case, Plaintiff i.e. Novartis sued Defendant i.e. Cipla for infringing patents covering an Indacaterol-drug Onbrez. Plaintiff filed a case before Delhi High court claiming patent infringement and damages.
The Delhi HC observed that Plaintiff had a strong prima facie case and the HC observed that the Defendant failed to provide any proof or figures for such claims. As the validity of the patent was not seriously questioned, HC granted an injunction.
- Copyright aims to protect literary and artistic works such as sculptures, newspapers, computer programs, music, pamphlets etc. copyright restricts any third party to exploit his works and if third party exploits, then the owner can take strict legal actions against the third party.
Case law: Star India Pvt. Ltd. vs. Moviestrunk.com & Ors.
In this case, Plaintiff was a film production and distribution company, whereas the Defendants operated several online streaming websites. A suit was filed against the illegal streaming of one of the Plaintiff’s films on the Defendants websites, which amounted to copyright infringement. Hence the plaintiff seeks relief against the infringement.
The Court recognized the right of the Plaintiff granted by the Copyright Act, 1957 over the exclusive exploitation and distribution of their copyrighted content. Hence, there was an infringement and the Court granted an injunction and also awarded suitable damages.
- Geographical designs (GI) aims to collectively protect the rights of the association of industries or handicraft makers. GI enables association (owners) of a specific geographical region to use these marks, preventing any other organization from using the same or similar marks for similar products.
Case law: Scotch whisky Association v. Golden Bottling Limited
In this case, the Scotch Whisky Association (SWA) filed a suit against Golden Bottling Limited for geographical indications infringement. The defendant was manufacturing “Red Scot” which was allegedly misleading for the consumers.
The definition of “Scotch Whisky” under UK Scotch Whisky Act, 1988 and the Scotch Whisky Order, 1990 accorded the status of a geographical indication to the product. But, since the same was not accorded the status of GI in India, the court could not go by that definition. Section 20(1) of the GI Act protects unregistered GIs against any suit instituted. So action was available only in the form of the tort of passing off.
The case was settled outside of the courts. Later, in 2015, the government recognized Scotch whisky as per the definition under Section 2(e) of the GI Act.
- Industrial designs aim to protect the appearance of articles which include ornamentation, design, shape of any product or an article. It also prevents third parties from using the design of any product or an article.
Case law: Disney Enterprises Inc. v. Prime Housewares Ltd.
In this case, the international registration of industrial designs became a matter of conflict in India. A Mumbai based company Prime Housewares used to manufacture characters like Mickey Mouse, Donald Duck, etc. a suit was filed by the Disney enterprises for the infringement of their international registered designs.
The court held that the plaintiff’s trademark is protected but not the designs under the Indian law. An order was passed by the court for the infringement of the trademark of the enterprises. The Indian company was asked to deliver all the infringing material to the enterprises so that it could not be used further.
Conclusion
With significant developments and changes in standard living of people, IP has rapidly gained a huge marketplace. Although IP rights protection may seem to provide a minimum amount of protection, when they are utilized wisely, they can maximize the benefit and value of a creation and enable world-changing technology to be developed, protected, and monetized. At global markets, monetization of IP gains a greater opportunity and complexity as it becomes a vital part of many IP monetization programs. One must ensure that he/she owns ownership rights and commercial rights before registering its article or product as an intellectual property in order to avoid legal complications.
But sometimes, the interface between IP and competition policy can arise from the following sets of issues such as:
- Too much IP: When IP is unduly extended so as to grant exclusivity over non-differentiating features, it is anti-competitive.
For instance: Patents for technical features that do not qualify as inventions and trademarks for common, non-distinctive words.
- Too little IP: When efficient enforcement means are not available or when genuinely differentiating features cannot be protected, imitation follows.
- Neither too little nor too much i.e. IP in dosage: This happens when IP rights are abused, or used in a way contrary to the objectives of the Law. It may also happen that IP in the right dosage can be associated with certain circumstances that make it difficult, impossible or inconvenient for competitors to seek alternative ways of attracting consumers.
For instance; when patented technologies become industrial standards, or when the obtaining of test data implies the risk to the health and well-being of humans and animals. In the first case, it is impossible for competitors to create alternative, different technologies. In the second case, duplicating tests to obtain the same data causes unnecessary and socially unjustified harm.
Thus, a balanced approach is required to harmoniously construct both the statute and to clarify much upon that different jurisdictional opinion has to be taken into consideration. This issue must be reconciled in such a way that both laws will prevail which in results promotes innovation and consumer welfare.
References
- https://www.wipo.int/
- https://www.mondaq.com/india/trademark/810462/intellectual-property-a-business-asset
- https://www.upcounsel.com/ip-monetization
- https://www.wipo.int/ip-competition/en/
- https://indiankanoon.org/
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