Protecting intellectual property: the good, the bad and the ugly

24/03/2017

Protecting intellectual property

Protecting intellectual propertyIntellectual-property rights have become a challenging issue in international trade. For some, the theft of these rights amounts to significant commercial losses that must be minimized. For others, the aggressive assertion of these rights in domains that impact basic human rights is creating vulnerabilities in the poorest nations that are unacceptable.

It’s not always easy to protect intellectual property

Failure to consider intellectual property (IP) issues can result in large or fatal losses when pursuing international markets. The consequences of being unprepared should not be underestimated—setting up joint ventures, distribution networks and other strategic alliances represents a significant undertaking when protecting one’s IP.

Yet protection from potential partners and in-country representatives provides no safeguard from the entire realm of pirates, counterfeiters and other dubious characters that have made it their business to profit at someone else’s expense.

It is a phenomenon that goes far beyond losses for right-owners or individual companies but extends to the well-being and survival of entire sectors and national economies.

Much is said about pirated music, TV shows and movies, but the problem of counterfeiting and piracy extends to, for instance, aircraft parts, fashion, food, pesticides and medicines, just to mention a few.

The information technology sector is particularly vulnerable to this problem. Indeed, according to the Business Software Alliance, more than half of the world’s personal computer users—57 percent—admit they pirate software (which includes 31 percent who say they do it “all of the time” or “most of the time”). These findings are from a survey of approximately 15,000 computer users in 33 countries which make up 82 percent of the global PC market.

Global traders need to invest time and resources into protecting intellectual property. One option is to seek protection in individual countries separately by applying directly to national industrial/intellectual property offices. Each application may have to be translated into a prescribed language, which is usually the national language.

National applications fees need to be paid, and it may be necessary to engage an IP agent or lawyer to ensure the application meets national requirements. Some countries have established regional agreements for obtaining IP protection for an entire region with a single application.

Examples of regional IP offices include the European Patent Office, the Office for Harmonization in the International Market and the Eurasian Patent Office.

For more information on protection of intellectual property, refer to the World Intellectual Property Organization (WIPO).

When protecting intellectual property extends too far

Although the theft of intellectual property represents a real problem in some sectors (e.g. music, motion pictures, software, etc.), the extension of protecting intellectual property rights into other important sectors, such as food and medicine, has become a highly controversial issue.

The WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) negotiated in the 1986–94 Uruguay Round, introduced intellectual property rules into the multilateral trading system for the first time that require member nations to respect intellectual property rules. While it may sound straightforward, this rule set is quickly creating ethical challenges that are threatening too many less developed nations.

For example, it is argued that some countries, such as the United States, issue patents too quickly without much research on whether or not the invention is truly novel (i.e. if it is really the first instance of this idea).

In effect, if a patent that has been issued is challenged, it is left to the courts to decide whether or not the patent should have been issued in the first place.

This led to a bizarre situation a few years ago where the United States Patent and Trademark Office (USPTO) granted a Texas-based company a series of patents on Basmati rice (i.e. strains of rice that have been grown in India and Pakistan for centuries). Eventually, after a lengthy series of challenges, most often these patents were revoked, but the implications of a system that focuses on protecting intellectual property rights on food are considered too ominous for many.

Indeed, as higher yielding cereal crops are being created through genetic modifications, intellectual property claims are being made on the very foundations of sustenance in many countries. Lower-yielding strains of plant are effectively rendered uncompetitive, and small farmers are being pushed out of business or are forced to adopt crop strains that are regulated by the monopolistic structures inherent to patented products.

Farmers are then unable to save seed from one year to the next (an age-old practice), leading to extreme vulnerability from a food-security standpoint (i.e. in hard times, farmers may not be able to afford seed).

Medicine another area of concern in IP cases

Similarly, in the area of medicine, multinational companies have been aggressively identifying the active ingredients in indigenous species of plants worldwide (in particular, those known for their healing potential) and filing patent claims on the chemical structures (or analogues of their chemical structures) in these plants to secure monopolistic rights for the resulting medicines. It has been argued that this is a form of unwarranted bio-piracy that capitalizes on public knowledge and the lack of technical sophistication in many countries.

For example, a patent claim was granted a few years ago to the University of Mississippi Medical Center for the use of turmeric, an Indian spice, for wound healing (U.S. Patent Number 5,401,504). This was extraordinary because turmeric has been commonly used for this purpose in India for centuries.

However, under U.S. law, it is necessary to find adequate evidence (i.e. printed or published information) that can establish precedence before a patent can be revoked. Fortunately, in this case, an adequate number of references were found, and when challenged, the USPTO revoked the patent.

However, in many countries where literacy rates are low, such evidence could be difficult to locate. And again, the rights are first asserted, and then those who are potentially harmed by those rights must fight to nullify the claim. Given the costs and complexity of litigation and the time involved in undertaking such a challenge, the uniform application of these rights across national boundaries creates a situation that leaves the most impoverished nations at an extreme disadvantage.

Accordingly, those engaged in international trade need to understand the nuances of these situations to ensure that corporate claims on intellectual property are not impinging on well-established rights.

This content is an excerpt from the FITTskills Global Business Environment textbook. Enhance your knowledge and credibility with the leading international trade training and certification experts.

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About the author

Ewan Roy

Author: Ewan Roy

I'm a Content Marketing Specialist for the Forum for International Trade Training (FITT). My background is in writing and research, and I am passionate about communicating new ideas and telling stories that matter to you.

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