Posts Tagged: "intellectual property rights"

It is already a criminal act in the United States to intercept and/or decode an encrypted satellite signal. See 18 U.S.C. §2511. Many in the United States may not realize that similar provisions criminalizing interception of an encrypted program-carrying satellite signal are included in Free Trade Agreements already concluded by the U.S., including the North American Free Trade Agreement. With Article QQ.H.9, one might be tempted to read Paragraph 1 as permitting the possession and use of a device which can receive and de-crypt a program-carrying satellite signal (without authorization of the signal’s lawful distributor), although any of the nefarious activities enumerated in Paragraph 1(a) would be criminal. However, Footnote 153 makes clear that receipt and use, or receipt and decoding of the signal are also distinct, criminal activities.

The ownership of ideas and creations are among the most valuable assets to any company. Businesses invest in these ideas and rights and use the value they create to help promote and grow business for years to come. Printer manufacturers, for example, invest heavily in new ink and toner technologies and realize a return over the life of the device through the sale of supplies and consumables. When third-party supplies manufacturers, particularly manufacturers of new build ‘cloned products’, violate IP rights and take products to market, they are effectively stealing from the original equipment manufacturer (OEM) – reducing the ability of the OEM to realize the full potential of their investment and, through their sale, securing financial benefit from the OEM who receives no compensation for this lost revenue. These organizations effectively take a ‘free ride’.

The controversy swirling around the Trans-Pacific Partnership (TPP) Trade Agreement sheds light on two critically important but divisive issues: international trade and intellectual property protection for pharmaceuticals. One of the most significant sticking points in the negotiations is the issue of intellectual property protection for pharmaceuticals, specifically data exclusivity. Data exclusivity is a means of correcting a free-riding market failure, providing the innovative firms with a limited period of time in which data from clinical trials and other required testing cannot be used by competing firms to secure market access.

I recently received an inquiry from an IPWatchDog reader, posing several questions about the links between intellectual property protections, innovation and job creation. (Thank you, Marcus!) The interrelated nature of IP, innovation and jobs is essential to economic prosperity and important enough to explore again. Marcus:   I’m curious about two positions that are taken in your writing. First, you state…

To listen to the critics, one would believe that the Trans-Pacific Partnership (TPP) Trade Agreement marks the end of the world for global health, especially for the poor. They are, in a word, wrong. Admittedly, the TPP Agreement is extremely contentious, but the TPP Agreement contains important provisions regarding intellectual property (IP) rights, especially the standards of protection for pharmaceuticals. If the global community is to truly benefit from the promise of medical progress, we must stop the attack on the IP protections that incentivize innovation and turn our attention to the issues that genuinely inhibit access to medicines.

The vast majority of the assets developed and owned by technology companies are intangible assets, i.e. they reside in their internal information and employees’ brain (Intellectual Capital or “IC”) and the output thereof (Intellectual Property or “IP”). It is estimated that in excess of 85% of the valuation of the NASDAQ Index companies (and of the new global wealth being created) lies in intangible assets. With smaller technology companies, this percentage is sometimes close to 100%. Nowadays, most technology based companies eventually fail or succeed in large part because of the way they handle their intellectual capital assets and convert those into strategic intellectual property assets.

Fundamentally, patents facilitate access to VC financing, market entry and job creation. Without patents and an effective IP environment, the process stalls and, in some cases, firms may never emerge. Without adequate IP protection, innovators are unable to attract investments, business creation is slowed and jobs lost. Evidence suggests that this same story plays out, albeit with differing dynamics, across all sorts of firms and all nations. Economic prosperity relies on job growth, and it is clear that strong, effective IP rights have a role to play in creating both.

While all job creation is valuable to continued economic growth and development, high-skilled, well-paying jobs are the most impactful for sustained economic progress. Evidence suggests that intellectual property (IP) intensive industries are critical to economic growth and vital to national well-being and global competitiveness. Pham (2010) analyzes the role of innovation and the impact of intellectual property rights on U.S. productivity, competitiveness, jobs, wages and exports. His results clearly point to the importance of IP-intensive industries to economic prosperity.

Claiming to be the ”Pharmacy to the Developing World”, India argues that their lax intellectual property rights regime is critical to their ability to provide low-cost, quality generic drugs. They are wrong on two counts. First, India needs to honor IP rights, because without effective intellectual property rights, new pharmaceuticals will not be developed and the “Pharmacy to the Developing World” won’t have anything to provide to the developing world, or to anyone. Second, given the quality crisis in the Indian pharmaceutical industry, they shouldn’t be the pharmacy to anyone.

The challenges to the global IP system, however, go much, much deeper than mere debates over so-called patent trolls or patent quality. The very premises of our intellectual property laws — the economic value of the intellectual property system itself — are now in deep dispute, not only in the U.S. but worldwide. Indeed, global anti-IP sentiment seems to be at its highest level since the late 1860s, when opponents of intellectual property rights succeeded — for a time, at least — in abolishing or weakening the patent systems of several nations around the world.

Generally speaking, “intellectual property” is probably best thought of (at least form a conceptual standpoint) as creations of the mind that are given the legal rights often associated with real or personal property. The rights that are obtained by the creator are a function of statutory law (i.e., law created by the legislature). These statutes may be federal or state laws, or in some instance both federal and state law govern various aspect of a single type of intellectual property. The term intellectual property itself is now commonly used to refer to the bundle of rights conferred by each of the following fields of law: (1) patent law; (2) copyright law; (3) trade secret law; (4) the right of publicity; and (5) trademark and unfair competition law.