Introduction to Intellectual Property

Introduction to Intellectual Property

In this lesson, you’re expected to:
– gain an overview of intellectual property rights
– understand how these rights can be protected and transferred
– learn about licensing, franchising and the international standard of intellectual property

Intellectual Property (“IP”) rights are legal rights that result from intellectual activity (creations of the mind) in the industrial, scientific, literary and artistic fields.

It can consist of patents, copyrights, trademarks, industrial design rights, and, in some jurisdictions, trade secrets.

NOTE: For the purpose of the following lessons, the explanations about certain concepts will be done from the American Law perspective.
There are two categories of IP: 

1) Industrial Property: includes patents for inventions, trademarks, industrial designs, and geographical indications.

2) Copyright: covers literary works (such as novels, poems and plays), films, music, artistic works (e.g. drawings, paintings, photographs and sculptures), and architectural design.

Protection of Intellectual Property Rights

After being registered with the competent national office, IP usually gives the creator an exclusive right over the use of his/her creation for a certain period of time.

Violation of IP rights by a third-party is called “infringement” for patents, copyright, and trademarks, and “misappropriation” for trade secrets. It may correspond to a breach of civil law or criminal law, depending on the type of IP involved, jurisdiction, and the nature of the action.

At the end of the period of protection, the intellectual creations protected by IP rights return to the “public domain” which means that it can be used by others to produce new intellectual capital without restrictions.

The Territoriality Principle of Intellectual Property Rights

It is said that intellectual property rights are territorial by nature. A patent granted in one country, for example, has no effect beyond the territorial boundary of that country and cannot be infringed upon in other countries.

Such territorially limited rights are independent of each other and they may be granted at the same time for the same innovative work in more than one country.

The rapid expansion and globalization of international trade and digitalization in recent years, most notably reflected by the non-territorial Internet, has questioned the IP rights arising out of a given territory.

International means of overcoming the limitations of the territoriality principle include efforts to harmonize national law as well as the establishment of international registration systems.

The Evolution of Intellectual Property Rights

IP law has evolved over centuries, however only in the 19th century has it become commonplace in the majority of the world.

The first patent for an invention was granted as early as 1585, registered trademarks were only brought into existence in 1875, and design right was only introduced as late 1988.

However, each of these areas of IP has been shaped in response to the changing economic and social conditions and became stretched over time to include, for example, sound recordings, cable programs, and electronic databases, whose production may involve no intellectual activity.

[Optional] Intellectual Property Law
Check out this research guide about Intellectual Property Law from Duke University School of Law:
Why Protect Intellectual Property Rights? 

IP can be costly and time-consuming to produce, and may require a considerable degree of inventiveness and originality. Because of this, the main social purpose of the legal protection of new creations is to encourage and reward creative work.

Without IP rights, creative minds would be deterred from making the necessary initial investment to produce intellectual creations, and hence the market would be impoverished. In the long term, the public domain would inevitably be depleted.

The IP system helps strike a balance between the interests of creators and the rights of the public to access those creations, providing an environment in which creativity and invention can flourish, for the benefit of all.

An efficient and equitable IP system can help all countries to realize IP’s potential as a catalyst for economic, social, and cultural development.

Example: a pharmaceuticals company invests several years and many millions of dollars in developing a chemical compound. In order to prevent competitors from misappropriating its invention, the creating company must patent its invention.

Intellectual property rights can be transferred

IP can be bought, sold or licensed.

By granting a license, the owner of the IP rights (licensor) can authorize third parties (licensee) to use such rights in exchange for an agreed payment (fee or royalty).

Some of the benefits of granting a license are:

1) Share costs and risk: the licensor receives revenues from the licensing but does not take the risk of manufacturing, promoting and selling those products. The licensee has the right to use the IP without the expense and risk of the research and the costs of developing the product.

2) Increase market penetration: the licensee can use the licensed IP rights to access countries where the licensor cannot cover.

3) Reduce costs: a business may ‘buy-in’ innovation to reduce its research and development costs.

4) Save time: the licensee may get its products or services to market more quickly by acquiring a license to use existing IP, instead of creating it from the beginning.

5) Obtain competitive advantage: by acquiring a license to use IP, a business will probably obtain an advantage over its competitors.

6) Collaboration: by taking or granting a license of any category of IP, both licensor and licensee may want to work together to develop new products and services.

NOTE: In the international context, a formal and effective licensing agreement is possible only if the IP right wished to be licensed is also protected in other country(ies) of the licensee’s interest.
[Optional] Should I license or franchise my Intellectual Property?
Watch this 1-minute video about licensing:
Intellectual property is present in our daily life

We can notice the increasing importance of IP. Governments, big companies, small companies, social organizations, individuals etc. – everybody is doing things related to IP law.

Mainly from the 18th century in the industrial age until today in the information age, intellectual inventions, creativity, brands, and innovations are being created more and more in the global modern economy, including sometimes in new areas of the economy.

[Optional] Intellectual Property
Watch this 5-minute video about ‪Intellectual Property from Durham University:
Global cooperation and international standard of intellectual property

The principle of territoriality of intellectual property rights creates complex situations with relation to the protection and infringement of intellectual property rights worldwide.

As a consequence, international agreements have been signed between countries and international organizations relating to IP have been created in the last few decades.

World Intellectual Property Organization (WIPO)

The World Intellectual Property Organization (WIPO) is a United Nations agency responsible for administering international treaties in the area of IP, such as the “Paris Convention on Industrial Property” and the “Berne Convention on Copyright”.

Its broader objective is to promote IP protection throughout the world through cooperation among states. It is responsible to administer international registration systems such as:
(i) the Madrid Trademark System;
(ii) the Hague Industrial Designs; and
(iii) the Patent Cooperation Treaty (PCT).

[Optional] International Intellectual Property Filings 2016
Watch this 2-minute video in which WIPO shares its key takeaways from international intellectual property filings in 2016:
Jim Rohn Sứ mệnh khởi nghiệp