Intellectual property

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Intellectual property (IP) are legal property rights over creations of the mind, both artistic and commercial, and the corresponding fields of law.[1] Under intellectual property law, owners are granted certain exclusive rights to a variety of intangible assets, such as musical, literary, and artistic works; ideas, discoveries and inventions; and words, phrases, symbols, and designs. Common types of intellectual property include copyrights, trademarks, patents, industrial design rights and trade secrets.

The majority of intellectual property rights provide creators of original works economic incentive to develop and share ideas through a form of temporary monopoly.

Although many of the legal principles governing intellectual property have evolved over centuries, it was not until the late 20th century that the term intellectual property began to be used as a unifying concept. [2]


[edit] Overview

Intellectual property rights are a bundle of exclusive rights over creations of the mind, both artistic and commercial. The former is covered by copyright laws, which protect creative works, such as books, movies, music, paintings, photographs, and software, and gives the copyright holder exclusive right to control reproduction or adaptation of such works for a certain period of time.[3]

The second category is collectively known as "industrial properties", as they are typically created and used for industrial or commercial purposes. A patent may be granted for a new, useful, and non-obvious invention and gives the patent holder a right to prevent others from practicing the invention without a license from the inventor for a certain period of time. A trademark is a distinctive sign which is used to prevent confusion among products in the marketplace.

An industrial design right protects the form of appearance, style or design of an industrial object from infringement. A trade secret is an item of non-public information concerning the commercial practices or proprietary knowledge of a business. Public disclosure of trade secrets may sometimes be illegal.

The term intellectual property denotes the specific legal rights described above, and not the intellectual work itself.

[edit] Objectives

[edit] Financial incentive

Intellectual property rights grant exclusive rights to intellectual creations; they grant ownership over creations of the mind. These exclusive rights allow owners of intellectual property to reap monopoly profits. These monopoly profits provide a financial incentive for the creation of intellectual property, and pay associated research and development costs.[citation needed] Some commentators, such as David Levine and Michele Boldrin, dispute this justification.[4]

[edit] Technology diffusion

Technology diffusion occurs if intellectual property is licensed or sold, conversely technology can equally be prevented from being shared, should the owner wish not to sell or license.

[edit] Economic growth

The legal monopoly granted by IP laws are credited with significant contributions toward economic growth. Economists estimate that two-thirds of the value of large businesses in the U.S. can be traced to intangible assets. Likewise, industries which rely on IP protections are estimated to produce 72 percent more value per added employee than non-IP industries.[5] Additionally, a joint research project of the WIPO and the United Nations University measuring the impact of IP systems on six Asian countries found "a positive correlation between the strengthening of the IP system and subsequent economic growth." [6]

However, correlation does not necessarily mean causation: given that the patent holders can freely relocate, the Nash equilibrium predicts they will obviously prefer operating in countries with strong IP laws. In some of the cases, the economic growth that comes with a stronger IP system is due to increase in stock capital from direct foreign investment, as was shown[7] for Taiwan after the 1986 reform.

[edit] Economics

Intellectual property rights are considered by economists to be a form of temporary monopoly enforced by the state (or enforced using the legal mechanisms for redress supported by the state).

Intellectual property rights are usually limited to non-rival goods, that is, goods which can be used or enjoyed by many people simultaneously—the use by one person does not exclude use by another. This is compared to rival goods, such as clothing, which may only be used by one person at a time. For example, any number of people may make use of a mathematical formula simultaneously. Some objections to the term intellectual property are based on the argument that property can only properly be applied to rival goods (or that one cannot "own" property of this sort).

Since a non-rival good may be used (copied, for example) by many simultaneously (produced with minimal marginal cost), producers would need incentives other than money to create such works. Monopolies, by contrast, also have inefficiencies (producers will charge more and produce less than would be socially desirable).

The establishment of intellectual property rights, therefore, represents a trade-off, to balance the interest of society in the creation of non-rival goods (by encouraging their production) with the problems of monopoly power. Since the trade-off and the relevant benefits and costs to society will depend on many factors that may be specific to each product and society, the optimum period of time during which the temporary monopoly rights exist is unclear.[8]

[edit] History

Modern usage of the term intellectual property began with the 1967 establishment of the World Intellectual Property Organization (WIPO). [2] It did not enter popular usage however until passage of the Bayh-Dole Act in 1980.[9]

The concept appears to have made its first appearance after the French revolution. In an 1818 collection of his writings, the French liberal theorist, Benjamin Constant, argued against the recently-introduced idea of "property which has been called intellectual." [10] The term intellectual property can be found used in an October 1845 Massachusetts Circuit Court ruling in the patent case Davoll et al. v. Brown., in which Justice Charles L. Woodbury wrote that "only in this way can we protect intellectual property, the labors of the mind, productions and interests are as much a man's the wheat he cultivates, or the flocks he rears." (1 Woodb. & M. 53, 3 West.L.J. 151, 7 F.Cas. 197, No. 3662, 2 Robb.Pat.Cas. 303, Merw.Pat.Inv. 414). The statement that "discoveries" goes back earlier. Section 1 of the French law of 1791 stated, "All new discoveries are the property of the author; to assure the inventor the property and temporary enjoyment of his discovery, there shall be delivered to him a patent for five, ten or fifteen years."[11] In Europe, French author A. Nion mentioned propriété intellectuelle in his Droits civils des auteurs, artistes et inventeurs, published in 1846.

The concept's origins can potentially be traced back further. Jewish law includes several considerations whose effects are similar to those of modern intellectual property laws, though the notion of intellectual creations as property does not seem to exist – notably the principle of Hasagat Ge'vul (unfair encroachment) was used to justify limited-term publisher (but not author) copyright in the 16th century.[12] The Talmud contains the prohibitions against certain mental crimes (further elaborated in the Shulchan Aruch), notably Geneivat da'at (גניבת דעת, literally "mind theft"), which some have interpreted[13] as prohibiting theft of ideas, though the doctrine is principally concerned with fraud and deception, not property.

[edit] Criticism

Some critics of intellectual property, such as those in the free culture movement, characterize it as intellectual protectionism or intellectual monopoly and argue that the public interest is harmed by protectionist legislation such as copyright extension, software patents and business method patents. Although the term is in wide use, some critics reject the term intellectual property altogether. Richard Stallman argues that it "systematically distorts and confuses these issues, and its use was and is promoted by those who gain from this confusion." He claims that the term "operates as a catch-all to lump together disparate laws [which] originated separately, evolved differently, cover different activities, have different rules, and raise different public policy issues."[14] These critics advocate referring to copyrights, patents and trademarks in the singular and warn against abstracting disparate laws into a collective term.

Other criticism of intellectual property law concerns the tendency of the protections of intellectual property to expand, both in duration and in scope. The trend has been toward longer copyright protection[15] (raising fears that it may some day be eternal[16]). In addition, the developers and controllers of items of intellectual property have sought to bring more items under the protection. Patents have been granted for living organisms,[17] and colors have been trademarked[18].

[edit] Defense

Defenders of strong intellectual property (IP) rights insist that legal protections are required to supply necessary incentive for the specific kind of innovation that supports economic development. Among such defenders are Pat Choate, former 1996 Reform Party Vice Presidential candidate, the running-mate of H. Ross Perot.

Weakening intellectual property rights -- as the Federal Trade Commission (FTC) did in the mid 1970s with its consent decree against Xerox Corporation -- can compromise national competitiveness. The rapid rise of Japanese competitiveness, and failing competitiveness of US companies, can be linked to the compulsory licenses granted as a result of FTC actions against many of the United States' largest corporations.[who?] Foreign competitors gained virtually free access to the inventions of American companies, and the lack of legal protections for IP owners acted as a financial disincentive to invest in intellectual assets, which in turn led to a steady decline in American innovation and competitiveness. Between 1950 and 1980 Japanese companies consummated more than 35,000 foreign licensing agreements, mostly with U.S. companies, for free or low-cost licenses made possible by the FTC and U.S. Department of Justice. The competitive disadvantage for U.S. companies persisted until the 1980s, when the FTC and DOJ reversed their activist stance.

Strong intellectual property protections can be shown quantitatively to boost a nation's balance of trade and terms of trade.[who?] Conversely, failure to protect a nation's competitive IP position in the global marketplace can result in domestic economic decline.[who?] As a result most industrialized, and many emerging economies have established aggressive policies surrounding the development and protection of domestic IP resources -- most notably China: the chief scientist for China’s Academy of Sciences, Niu Wenyuan, said in 2007: “[Intellectual Property Rights] are the Number One strategic reserve in the 21st century and its significance is not inferior to any other strategic reserve, be it food or energy.”[19]

In 2008, Commerce Secretary Carlos Gutierrez noted: "Intellectual property is central to promoting the ingenuity, innovation, and creativity that drive our economy."[20]

[edit] See also

[edit] References

  1. ^ Intellectual Property Licensing: Forms and Analysis, by Richard Raysman, Edward A. Pisacreta and Kenneth A. Adler. Law Journal Press, 1999-2008. ISBN 973-58852-086-9[verification needed]
  2. ^ a b "The modern use of the term intellectual property as a common descriptor of the field probably traces to the foundation of the World Intellectual Property Organization (WIPO) by the United Nations." in Mark A. Lemley, Property, Intellectual Property, and Free Riding, Texas Law Review, 2005, Vol. 83:1031, page 1033, footnote 4.
  3. ^ What is Intellectual Property?, World Intellectual Property Organization.
  4. ^ Levine, David; Michele Boldrin (2008-09-07). Against intellectual monopoly. Cambridge University Press. ISBN 978-0521879286. 
  5. ^ Economic Effects of Intellectual Property-Intensive Manufacturing in the United States, Robert Shapiro and Nam Pham, July 2007.
  6. ^ Measuring the Economic Impact of IP Systems, WIPO, 2007.
  7. ^ Lo, S-T. (2004). "Strenghtening Intellectual Property Rights: Experience from the 1986 Taiwanese Patent Reforms". UCLA, Dept. of Economics.. 
  8. ^ Padraig Dixon and Christine Greenhalgh, The Economics of Intellectual Property: A Review to Identify Themes for Future Research, Oxford Intellectual Property Research Centre, Oxford, United Kingdom, November 2002.
  9. ^ Mark A. Lemley, "Property, Intellectual Property, and Free Riding" (Abstract); see Table 1: 4-5.
  10. ^ (French) Benjamin de Constant de Rebecque, Collection complète des ouvrages publiés sur le gouvernement représentatif et la constitution actuelle de la France: formant une espèce de cours de politique constitutionnelle, P. Plancher, 1818, p. 296.
  11. ^ A Brief History of the Patent Law of the United States
  12. ^ Jewish Law and Copyright
  13. ^ The New York Sun Fighting for Intellectual Property Rights.
  14. ^ Richard M. Stallman. "Did You Say “Intellectual Property”? It's a Seductive Mirage" (HTML). Free Software Foundation, Inc. Retrieved on 2008-03-28. 
  15. ^ E.g., the U.S. Copyright Term Extension Act, Pub.L. 105-298.
  16. ^ Mark Helprin, Op-ed: A Great Idea Lives Forever. Shouldn’t Its Copyright? The New York Times, May 20, 2007.
  17. ^ Council for Responsible Genetics, DNA Patents Create Monopolies on Living Organisms. Accessed 2008.12.18.
  18. ^ For example, AstraZeneca holds a registered trademark to the color purple, as used in pill capsules. AstraZeneca, Nexium: Legal. Accessed 2008.12.18.
  19. ^
  20. ^

[edit] Further reading

  • Arai, Hisamitsu. "Intellectual Property Policies for the Twenty-First Century: The Japanese Experience in Wealth Creation", WIPO Publication Number 834 (E). 2000. [1]
  • Boldrin, Michele and David K. Levine. "Against Intellectual Monopoly", 2008. [2]
  • Hahn, Robert W. Intellectual Property Rights in Frontier Industries: Software and Biotechnology, AEI Press, March 2005.
  • Branstetter, Lee, Raymond Fishman and C. Fritz Foley. "Do Stronger Intellectual Property Rights Increase International Technology Transfer? Empirical Evidence from US Firm-Level Data". NBER Working Paper 11516. July 2005. [3]
  • Connell, Shaun. "Intellectual Ownership". October 2007. [4]
  • Gowers, Andrew. "Gowers Review of Intellectual Property". Her Majesty's Treasury, December 2006. [5] ISBN-13: 9-780118-4083-9.
  • Kinsella, Stephan. "Against Intellectual Property". Journal of Libertarian Studies 15.2 (Spring 2001): 1-53. [6]
  • Lai, Edwin. "The Economics of Intellectual Property Protection in the Global Economy". Princeton University. April 2001. [7]
  • Lee, Richmond. Scope and Interplay of IP Rights ACCRALAW offices.
  • Lessig, Lawrence. "Free Culture: How Big Media Uses Technology and the Law to Lock Down Culture and Control Creativity". New York: Penguin Press, 2004. [8].
  • Lindberg, Van. Intellectual Property and Open Source: A Practical Guide to Protecting Code. O'Reilly Books, 2008. ISBN 10: 0-596-51796-3 | ISBN 13: 9780596517960
  • Maskus, Keith E. "Intellectual Property Rights and Economic Development". Case Western Reserve Journal of International Law, Vol. 32, 471. journals/jil/32-3/maskusarticle.pdf
  • Mazzone, Jason. "Copyfraud". Brooklyn Law School, Legal Studies Paper No. 40. New York University Law Review 81 (2006): 1026. (Abstract.)
  • Miller, Arthur Raphael, and Michael H. Davis. Intellectual Property: Patents, Trademarks, and Copyright. 3rd ed. New York: West/Wadsworth, 2000. ISBN 0-314-23519-1.
  • Rozanski, Felix. "Developing Countries and Pharmaceutical Intellectual Property Rights: Myths and Reality" [9]
  • Schechter, Roger E., and John R. Thomas. Intellectual Property: The Law of Copyrights, Patents and Trademarks. New York: West/Wadsworth, 2003, ISBN 0-314-06599-7.
  • Schneider, Patricia H. "International Trade, Economic Growth and Intellectual Property Rights: A Panel Data Study of Developed and Developing Countries". July 2004. [10]
  • Shapiro, Robert and Nam Pham. "Economic Effects of Intellectual Property-Intensive Manufacturing in the United States". July 2007. [11]
  • Vaidhyanathan, Siva. The Anarchist in the Library: How the Clash Between Freedom and Control Is Hacking the Real World and Crashing the System. New York: Basic Books, 2004.
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