Intellectual Property:

A tool to build sustainable economic growth

Tissa Jayaweera- Chairman, International Chamber of Commerce

Intellectual Property (IP) continues to be a dynamic and constantly evolving field, closely tied to technological, economic, political and social changes. The changing geo-economic landscape has led to a growing interest in how IP can be used as a tool to build sustainable economic growth, both in emerging economies looking to build up their economic base, as well as in more mature economies wanting to maintain their competitive edge in the global market. Business can play an important role in helping governments understand the type of IP infrastructure necessary to stimulate the growth of innovative and creative industries and to encourage technology transactions. The accelerating pace of developments in information technology is also having a major impact on how IP is used, licensed and protected.

The emergence of social media, the increasing prevalence of mobile devices and applications, ever-increasing bandwidth and changing consumer behaviour are making IP owners reconsider the strategies and models for distributing, commercializing and controlling their IP in the electronic environment. The increased ease of communications and travel has also led to more cross-border business and IP transactions and exchange. This brings with it the need for a level playing field and coherent rules worldwide.

ICC Intellectual Property Roadmap

Current and emerging issues for business and policy-makers highlights several developments over the past couple of years arising from these changes. These include the decision to open up the generic Top Level Domain name space, measures to control copyright and trademark infringement on the Internet, and efforts to address the high costs and lengthy proceedings necessary to obtain patents in multiple jurisdictions (such as more intensive cooperation between patent offices, further steps in the EU initiative to create a unitary patent and patent litigation system, and reform bringing the US patent system one step closer to other patent systems worldwide).

Other developments, with implications for the life sciences, include the conclusion of the Nagoya Protocol on Access and Benefit Sharing in relation to genetic resources, and the protection of biosimilar drugs in the EU and the US.

The ICC 2012 IP Roadmap continues to follow the same structure as in previous editions. An introductory chapter describing developments with an impact on IP protection is followed by sections on issues relating to specific IP rights, on issues common to various IP rights, and on the interaction between IP and other policy areas. Each section describes new developments as well as business and government positions and actions on specific issues. Most sections have been extensively updated for this new edition, including sections on data exclusivity, plant variety rights, geographical indications, designs, data bases, valuation and arbitration and mediation of IP disputes.

This 2012 edition of ICC's flagship intellectual property publication, ICC IP Roadmap continues to be a useful reference tool for all those who work in or need to understand intellectual property policy.

What is intellectual property?

Intellectual property is a creation of the intellect that is owned by an individual or an organization which can then choose to share it freely or to control its use in certain ways. Intellectual property is found almost everywhere, in creative works like books, films, records, music, art, software, and in everyday objects like cars, computers, drugs and varieties of plants, all of which has been developed thanks to advances in science and technology. The distinctive features that help us choose the products we buy, like brand names and designs, can fall within the scope of intellectual property. Even the place of origin of a product can have rights attached to it, as is the case with Champagne and Gorgonzola.

Much of what we see and use on the Internet, be it a web page or a domain name, also includes or represents some form of intellectual property.

Why is intellectual property protected and who benefits?

Through a system of intellectual property rights, it is possible not only to ensure that an innovation or creation is attributed to its creator or producer, but also to secure ‘ownership’ of it and benefit commercially as a result. By protecting intellectual property, society acknowledges the benefits it contributes and provides an incentive for people to invest time and resources to foster innovation and expand knowledge. The intellectual property system is designed to benefit society as a whole, striking a delicate balance to ensure that the needs of both the creator and the user are satisfied. Intellectual property rights usually allow the rights holder to exercise rights over the use of his or her work for a limited period of time. In return for granting such rights, society benefits in a number of ways.

The intellectual property system contributes to society by: Enriching the pool of public knowledge and culture; Maintaining fair competition and encouraging the production of a wide range of quality goods and services; Underpinning economic growth and employment; Sustaining innovation and creation; Promoting technological and cultural advances and expression.

Where suitable or sufficient intellectual property rights are not available, or are difficult to enforce, innovators and innovative enterprises may need to rely to a greater extent on other means to protect themselves from unfair competition, such as through trade secrets, contractual agreements, or technical means of preventing copying. Such means can be less effective in promoting the goals set out above.

How is intellectual property protected?

In general, intellectual property is protected by giving the creator of a work or an inventor exclusive rights to commercially exploit his creation or invention for a limited period of time. These rights can also be sold, licensed or otherwise disposed of by the rights holder. Intellectual property rights are granted under the national laws of each country or region. In addition, various international agreements on intellectual property rights harmonize laws and procedures, or allow intellectual property rights to be registered at the same time in several countries.

Different types of intellectual property, literary and artistic creations, inventions, brand names, and designs, to name a few are protected in different ways: Creations in the fields of literature and the arts, such as books, paintings, music, films and records as well as software, are generally protected through copyright or so-called related rights; Technological inventions are typically protected by patents; Distinctive features such as words, symbols, smells, sounds, colours and shapes that distinguish one product or service from another, can be protected by trademark rights; The specific external appearance given to objects, such as furniture, car body parts, tableware or jewellery, may enjoy design protection; Geographical indications and trade secrets are also considered to be types of intellectual property and most countries provide some form of legal protection for them; Rules to prevent unfair competition in the commercial world also help protect trade secrets and other types of intellectual property; Plant varieties are protected mainly by a specific IP protection regime called plant variety rights, and may also be protected by patents or by a combination of the two systems; Specific legal protection is provided in some countries for integrated circuits and databases.

The same product can also be simultaneously protected by more than one type of intellectual property right in different countries.

Copyright

Copyright exists to encourage the production of original artistic, literary and musical creations from books and paintings to movies, recordings and software. The copyright system rewards artistic expression by allowing the creator to benefit commercially from his work. In addition to granting economic rights, copyright also bestows ‘moral’ rights which allow the creator to claim authorship and prevent mutilation or deformation of his work that might harm his reputation. To qualify for copyright protection, the work has to be an original creation and expressed in a certain fixed form. Copyright is automatically vested in the author once the work is created, though a few countries maintain registration systems which provide additional benefits. It can then be licensed or assigned, often to a publisher or a producer. Copyright protection gives an author exclusive rights of a certain duration, generally from the time of creation of the work until fifty or seventy years after the author's death.

Most countries provide similar protection for phonogram producers, performers and broadcasters. In some countries, performers, producers and broadcasters of copyrighted works are protected by copyright just like authors; in other countries, they are instead protected by neighbouring or related rights. Copyright has become increasingly important with the development of digital technology and the Internet, where it is a major form of intellectual property protection for content distributed online, and where it faces difficult enforcement issues.

Patents

A patent gives the inventor the right, for a specified period of time, to prevent others from using, making, selling, offering for sale, or importing his invention without his authorization. In return, the inventor must disclose the details of his invention in a patent document that is made publicly available. In this way, patents represent a social contract between society as a whole and inventors. An innovation which the inventor prefers to keep secret is known as know-how or a trade secret. These are protected under different rules. In most countries, patent protection lasts for 20 years counted from the filing date and is issued by national or regional government patent offices, to which the inventor has to submit an application. In order to be granted the patent, the invention must fulfil three conditions: It must be new: it should never have been published or publicly used before; It should be capable of industrial application: It must be something that can be industrially manufactured or used; It must be ‘non-obvious': it should not be an invention that would have occurred to any skilled person in the relevant field.

Patent systems have been adopted by many countries over the years because: They encourage the disclosure of information to the public, increasing the public's access to technical and scientific knowledge. Without the assurance of a patent, an individual or corporate inventor may choose to keep the details of an invention secret; They provide an incentive and reward for innovation and investment in R&D and future inventions; The limited duration of a patent encourages the rapid commercialization of inventions, so that the public receives a tangible benefit from the invention sooner rather than later; By encouraging the publication of details of inventions, patents help avoid duplication of research and stimulate further research, innovation and competition; Patents are perceived as a sound intellectual property title, granted in most territories after a rigorous examination process.

Trademarks

Trademarks allow consumers and businesses to differentiate between goods and services from different producers, and to select products by manufacturers whose reputation they trust. For manufacturers or service providers who have invested the time, effort and money to build up a good brand image, trademarks are a way to prevent others from unfairly taking advantage of their reputation. This ensures fair competition between competitors in the marketplace and encourages producers to invest in the quality and reputation of their products or services.

Trademark protection can apply to brands, names, signs, symbols, and even colours, smells, sounds and shapes. In short, almost any distinctive feature attached to a product or service which distinguishes it from another can be protected as a trademark. In most countries, a trademark has to be registered in a national or regional government trademark office for use with specific goods or services to be protected. A trademark holder can prevent others from using his trademark or a similar mark for the same or similar goods or services, if doing so is likely to cause confusion in the minds of the public. In many countries, famous or well-known trademarks also enjoy protection against uses that are considered to disparage, dilute or take unfair advantage of the reputation of the famous mark.

Almost all businesses, large and small, rely on trademarks.

Trademark protection is used more than any other form of intellectual property, and in developing as well as developed economies. Trademarks serve to guarantee origin to local consumers, and readily searchable trademark registers allow businesses to avoid selecting new marks which could be confused with existing ones. Several international agreements on trademark protection exist.

For substantive issues, the most important are the Paris Convention for the Protection of Industrial Property (1883), the Trademark Law Treaty (1994), and the TRIPS agreement (1994). The Singapore Treaty on the Law of Trademarks was adopted on March 28, 2006. For procedural issues, the main treaties are the Madrid Agreement concerning the International Registration of Marks (1891) and its Protocol (1989), using French, English and Spanish as official languages, and the Nice Agreement concerning the International Classification of Goods and Services for the Purpose of Registration of Marks (1957).

In Europe, Regulation no 207/09 of February 26, 2009 which codifies the previous regulation 40/94 on the Community Trade Mark CTM allows a trademark holder to obtain a single trademark registration covering the 27 European Union Member States. The link made on October 1, 2004 between the CTM and the Madrid Protocol provides trademark owners with greater flexibility for obtaining international trademark protection. Further to the study carried in 2010 on the overall trademark system in the EU, it is likely that amendments will be proposed to the current CTM Regulation.

Designs

Design rights protect new and original visual aspects of a product or its packaging. Requirements for protection typically borrow concepts from both patent law (novelty) and copyright law (originality). The design eligible for protection must display aesthetic features and must not be predated by a known overall identical or similar design. Designs can be expressed in two-dimensional (drawing) or three dimensional (model) formats. Designs contribute significantly to the marketability of goods and are crucial assets in several industries, for instance textiles, fashion, mobile consumer devices, computer software (interfaces), automobiles and furnishing and decoration.

The regime for design protection differs from one country to another, although harmonization has been achieved within the European Union, with Regulation No 6/2002 providing a Community design right effective in all 27 EU Member States. In most countries, design protection is subject to registration, although there is a trend to extend protection for a short term to unregistered designs, e.g. for 3 years in the EU. Registered designs can generally benefit from protection for 25 years. The owner of a protected design may prohibit the making, selling, importing or exporting of products incorporating or applying the design. Depending on the countries, the owner may concurrently avail himself of the protection of copyright, trademark, and patent law. Design protection is an area which has benefited lately from significant and promising harmonization.

Trade secrets

Trade secrets encompass various types of business information, whether technical, commercial or financial, which is not known or readily ascertainable by the relevant public and which gives a business a competitive edge (for instance, manufacturing processes, techniques and know-how, customers’ lists and profiles, distribution methods, financial information, ingredients, etc.). In general, information is eligible for trade secret protection if it is identified, substantial and secret, as reflected in Article 39 of TRIPS.

Trade secret protection is afforded without registration and can last without limitation in time, generally so long as confidentiality is maintained. When the trade secret is patentable know-how, the scope of legal protection respectively granted by patent law and trade secret status has to be carefully compared before deciding whether to patent the invention or to keep it secret. This decision will also depend on the kind of know-how involved, its contemplated use, the term of the expected competitive lead and the capability to ensure secrecy in the long run.

A distinctive feature of a trade secret is the impossibility of erasing or overriding the effective transfer of knowledge once disclosed. This is why, when transferring a trade secret, its holder usually pays great attention to confidentiality provisions and to the efficiency of interim court injunctions that can be obtained locally to prevent unauthorized dissemination. Businesses, having become more aware of the value of trade secrets, confidentiality and nondisclosure agreements, and non-compete agreements in employment contracts, now use them widely in the course of business dealings as well as in the context of employment relationships in an attempt to limit unwanted leaks and uses of valuable business information.

However, trade secret protection remains weak in many countries, due partly to the lack of specific protective legislation and partly to the lack of awareness by the judiciary and other administrative bodies. Sanctions against procurement, use or disclosure of a trade secret, through application of the laws on unfair competition or practices a branch of tort law are also provided by Article 39 of TRIPS. Violation of a confidentiality undertaking can also be treated as a breach of contract. In limited cases, misappropriation of trade secrets can be a criminal offence such as theft or business espionage. Communication of know-how as such, or as part of mixed patent and know-how licence agreements, is a well-known way of exploiting trade secrets of a technical nature, which are now less hindered by national restrictions affecting cross-border transfer of know-how.

Domain names

An Internet domain name is a unique Internet address in a simplified form, designed to enable users to localize and visit a website on the Internet in an easy manner or use e-mail. Each computer (‘server’) has a fixed or dynamic Internet Protocol address (‘IP Address’), which enables it to communicate with Internet resources during a specific session. A domain name is nothing else than the easy to remember translation of such an IP address. For example, the Internet domain name iccwbo.org contains ‘iccwbo’ as the ‘second level domain’ before the dot and ‘org’ as the ‘Top Level Domain’ after the dot. There are generic TLDs (org, com, edu, etc.) and country code TLDs.

Internet Corporation for Assigned Names and Numbers ICANN is the global entity that is responsible for the coordination and management of the Domain Name System. With the explosive growth of the Internet, domain names have become valuable assets to businesses serving as business identifiers that may conflict with already existing business identifiers (e.g. trademarks, geographical indications, trade names, etc.). Through domain names, businesses can establish Internet presence and attract Internet users worldwide. When building upon strong trademarks, businesses seek to register and use the domain names identical to or incorporating their trademarks under Top Level Domains relevant to their businesses. Problems may occur when domain names incorporating trademarks or variations thereto are registered by others, including by cyber squatters.