What Are Intellectual Property Rights?

Intellectual property rights are exclusive rights given to persons over the use of their creation for a given period of time. Such rights are customarily divided into various areas, as detailed in the following material.

1. Patents

A patent is a proprietary right granted by the government to inventors (and other persons de­riving their rights from the inventor) for a fixed period of years to exclude other persons from manufacturing, using, or selling a patented product or from utilizing a patented method or process. At the expiration of the time for which the privilege is granted, the patented inven­tion is available to the general public or falls into public domain.

Patents may be granted for new and useful products as well as for processes for the manu­facture (or methods of use) of new or existing products. The basis for patent protection is promotion of innovative activity, dissemination of technical knowledge, and facilitation of transfer of technology. Even though patents are granted as a recognition of the concept of a natural right in inventions, they provide an incentive for the encouragement of inventions and the promotion of economic development. With the monopoly grant, the patent owner can divulge the invention to the public and still retain exclusive use of it for the period of the patent. At the end of the monopoly period, the patent becomes available for the unrestricted use of the public. Patent protection also encourages transfer of technology through direct in­vestment or licensing. In the United States, patents are valid for a period of twenty years from the filing date. Patent violations are generally referred to as patent infringement or piracy.

2. Trademarks

A trademark is a word, name, symbol, or device or any combination of these used by a manu­facturer or seller of goods to identify and distinguish the particular manufacturer’s/seller’s goods from goods made or sold by others (Ladas, 1975). In general, trademarks perform three functions:

  1. Identify one seller’s goods and distinguish them from goods sold by others
  2. Signify that all goods bearing the trademark come from a single source and are of equal quality
  3. Serve as a primary instrument in advertising and selling the goods.

An important part of the advertising effort is to develop goodwill. Trademark rights can be acquired by registration or use (reputation). Registered marks are renewable. Once a trader acquires a reputation in respect of a mark, that is, an unregistered mark, it becomes part of that trader’s goodwill and is protectable as a registered mark. Violation of trademarks consists of counterfeiting and other forms of infringement, such as advertising, sales, or distribution of goods bearing a mark similar to that of the owner that results in deception or confusion. Counterfeiting is the unauthorized use of a mark. In the United States, trade­marks are valid for ten years from the date of registration.

3. Trade Secrets

A trade secret involves a formula, method, or technique that derives independent economic value from not being generally known or available to other persons who can obtain eco­nomic value from its disclosure or use (Kinter and Lahr, 1983). The historical roots of trade secrets protection can be traced to ancient China, where death by torture was prescribed for revealing the secret of silkmaking to outsiders, and to ancient Rome, where enticing a com­petitor’s servant to disclose business secrets was a punishable offense. In England, the move­ment of artisans to other countries was prohibited by a series of statutes aimed at preventing knowledge of British processes from reaching possible competitors in Europe and America, and employers sued would-be emigrants and those who tried to seduce them (Ashton, 1988). Violation of trade secrets includes acquisition of a trade secret by improper means or disclo­sure without the consent of the owner.

In most developed nations, however, protection is afforded through laws pertaining to contracts, criminal law, or torts, such as breach of confidence (Hannah, 2006; Seyoum, 1993). Protection of trade secrets does not expire after a set period of time, as do other intellectual property rights. The owner, in effect, has perpetual monopoly on the innovation. A large part of the technology being developed now, perhaps with the exceptions of pharmaceuticals and specialty chemicals, does not get patented. Many high-technology innovations, such as aircraft and automobiles, and most low-technology innovations, such as detergents or food products, are not patented (Williams, 1983). In some countries, a formula might be patent­able, while methods of production based on personal skills might not be. Patent protection also ends at some point, even if one is able to obtain and keep the patent. Thus, companies prefer to maintain new innovations as trade secrets and protect their technology by contract rather than by patent.

4. Copyrights

A copyright is a form of protection granted to authors of original works, including literary, dramatic, musical, artistic, and certain other intellectual works. The owner of the copyright has the exclusive right to reproduce, distribute, sell, or transfer the copyrighted work to other persons. In the United States, copyrights are protected for a minimum period of fifty years after the death of the author. The core copyright industries (i.e., business and entertainment software) are second only to motor vehicles and automotive parts in terms of estimated sales and exports ($134 billion of exports in 2010) and also have grown twice as fast as the rest of the U.S. economy

Source: Seyoum Belay (2014), Export-import theory, practices, and procedures, Routledge; 3rd edition.

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