DR. PANKAJ MEHTA
Intellectual property (IP) encompasses the properties that are the creations of the human mind, labour, capital and intellect. Intellectual property is divided into two categories: Industrial property, which includes inventions (patents), trade marks, industrial designs, trade secrets and geographic indications of source; and Copyright, which includes literary and artistic works such as novels, poems, plays, films, musical works, drawings, paintings, photographs, sculptures, and architectural designs. The most noticeable difference between intellectual property and other forms of property is that Intellectual Property is intangible, meaning it cannot be defined or identified by its own physical parameters there is a need to express it in some distinct way to make it protectable. With the establishment of the World Trade Organization (WTO), the importance and role of the intellectual property protection has been crystallized in the Trade -Related Intellectual Property Systems (TRIPS) Agreement. The TRIPS Agreement, which came into effect on 1 January 1995, is to date the most comprehensive multilateral agreement on intellectual property. The areas of intellectual property that it covers are:
(i) Copyright and related rights (i.e. the rights of performers, producers of sound recordings and broadcasting organisations); (ii) Trade Marks including Service Marks; (iii) Geographical indications including appellations of origin; (iv) Industrial designs; (v) Patents including protection of new varieties of plants; (vi) The Lay-Out Designs (topographies) of Integrated Circuits; (vii) The Undisclosed information including Trade Secrets and Test Data.
After India became a signatory to the TRIPS agreement, the Patents Act, 1970 has been amended in the year 1995, 1999, 2002 and 2005 to meet its obligations under the TRIPS Agreement. The law of trademarks is also now modernized under the Trademarks Act of 1999. Copyright Act, 1957 has been amended several times to keep pace with the changing times. The most notable amendment was introduced in 1984 including “computer programmes” within the definition of “literary work”. India did not have a specific law governing geographical indications of goods which could adequately protect the interest of producers of such goods. which resulted into controversial cases like turmeric, neem and basmati, to cover up such situations it became necessary to have a comprehensive legislation for registration and providing adequate protection for geographical indications and accordingly the Parliament has passed a legislation, namely, the Geographical indication of Goods (Registration and Protection) Act, 1999.
Intellectual Property System in India
In India Patent Act was introduced in the year 1856 which remained in force for over 50 years, which was subsequently modified and amended and was called “The Indian Patents and Designs Act, 1911”. After Independence a comprehensive bill on patent rights was enacted in the year 1970 and was called “The Patents Act, 1970”, Till recently only four forms were protected which are in the form of grant of copyrights, patents, designs and trademarks. In India, copyrights were regulated under the Copyright Act, 1957; patents under Patents Act, 1970; trade marks under Trade and Merchandise Marks Act 1958; and designs under Designs Act, 1911. Over the past fifteen years, intellectual property rights have grown to a stature from where it plays a major role in the development of global economy with the establishment of WTO and India being signatory to the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). The various modifications and amendments to earlier Intellectual Property Laws are an indication of India’s move towards new IPR regime so as to prepare ourselves for the global trade competition. Following India’s ratification of the Convention on Biological Diversity (CBD) at international level, the Biological Diversity Act, 2002 was adopted. The Biological Diversity Act aims at conservation of biological resources and associated knowledge as well as facilitating access to them in a sustainable manner.
Strong Intellectual Property Rights help consumers make an educated choice about the safety, reliability, and effectiveness of their purchases. Enforced Intellectual Property Rights (IPR) ensure that products are authentic, and of the high-quality that consumers recognize and expect. IP rights foster the confidence and ease of mind that consumers demand and markets rely on. There are number of International Treaties/Conventions which deal with the various aspects of Intellectual Property and Industrial Property. These Conventions are administered by World Intellectual Property Organisation, popularly known as WIPO which is a specialized agency of the United Nations established by the WIPO Convention in 1967. It is dedicated to developing a balanced and accessible international intellectual property (IP) system, which rewards creativity, stimulates innovation and contributes to economic development while safeguarding the public interest.
International Trade & Protection of Trade Secrets
A trade secret is any kind of information that is secret or not generally known in the relevant industry giving the owner an advantage over competitors. Unlike patent, a trade secret does not have to pass the test of novelty; nevertheless the idea should be somewhat new, unfamiliar to many people including many in the same trade. In technology transfer a trade secret may be far more valuable than a patent. If a company cannot ensure protection of its trade secrets in a foreign country, it will not do business in that country. Every company should therefore, take some important measures to protect its trade secrets. The TRIPS Agreement provides protection to trade secrets in the form of “undisclosed information” providing a uniform mechanism for the international protection of trade secrets. Trade secrets are by definition not disclosed to the world at large. So long as trade secret remains a secret, it is valuable for the company. As for instance formula for Coca-Cola which is considered to be one of the best well protected trade secrets. Once the information enters the public domain, it is lost forever. If a trade secret is well protected, there is no term of protection. Trade secret protection can, in principle, extend indefinitely and in this respect offers an advantage over patent protection, which lasts only for a specified period (i.e. 20 years).
Management and Valuation of Intellectual Property (IP)
In an increasingly knowledge-driven economy, Intellectual Property (IP) is an important key consideration in day-to-day business decisions. Generally, the micro, small and medium companies in India either do not understand the value of their intellectual property assets or are not aware of the intellectual property systm or the protection they can provide for their inventions, brands, and designs. The effective management of intellectual property requires implementation of a comprehensive management plan. In this process one of the most important step is to review the existing intellectual property assets, so as to identify and locate the organiation key intellectual property assets. Once the intellectual property assets are identified, it becomes important to determine the scope of the organization in intellectual property assets, which may range from ownership to a license including contingent rights in intellectual property to be developed in future.
Effective intellectual property management requires an organization to commercialize its inventions and effectively monitor and enforce its intellectual property rights. Although intellectual capital is the foundation for the market dominance, the role of intellectual property rights and intangible assets in business is insufficiently understood. One of the key factors affecting an organization success or failure is the degree to which it effectively exploits intellectual capital and values risk. Acceptable methods for the valuation of identifiable intangible assets and intellectual property fall into three broad categories which are market based, cost based, or based on estimates of past and future economic benefits. When undertaking an IPR valuation, the context is all-important, and the valuer will need to take it into consideration to assign a realistic value to the asset.
(The author is Assistant Professor
with Central University of Jammu)