This article has been written by Ms. Samriddhi Vishen, a 2nd year LL.B. student of Shri Jai Narain Misra PG College (KKC), Lucknow.
Intellectual property rights (IPRs)—the copyrights, patents, trademarks, and similar rights on which the company’s share of innovative goods and services is based—play a critical role in boosting the economies of both developed and developing nations worldwide, encouraging innovation, providing both large and small businesses with a variety of tools to help them succeed, and fostering a culture of innovation and competition that benefits both consumers and society. This article explores and explains the economic importance of intellectual property rights in helping to achieve these important goals.
What is an IPR?
When we talk about property rights through licenses, copyrights, and trademarks, we’re talking about intellectual property rights. These property rights allow their holder to have a monopoly on the use of the thing for a specific amount of time.
Article 2 of the World Intellectual Property Organization (WIPO), the Central Organization for the protection of Intellectual Property (IP) enactments states that “intellectual property shall include the rights relating to:
- literary, artistic and scientific works,
- performances of performing artists, phonograms, and broadcasts,
- inventions in all fields of human endeavour,
- scientific discoveries,
- industrial designs,
- trademarks, service marks, and commercial names and designations,
- protection against unfair competition,
and all other rights resulting from intellectual activity in the industrial, scientific, literary or artistic fields.”
Economic Importance of Intellectual Property Rights?
Today, many businesses get 80% or more of their market value from their intellectual property. For some small enterprises, the only thing that counts is the intellectual property they have in an innovation they have created. For businesses and entrepreneurs in developing nations, patents are becoming increasingly crucial. The patent system is seen as useful for safeguarding and monetizing discoveries by individuals and small and medium-sized businesses in developing countries.
The competitiveness of the markets in which an IPRs regime operates is the key factor in determining the regime’s success. Improving product quality, which is often a requirement for entering export markets, is one of the IPRs’ most important objectives. IPRs can support marketing initiatives that raise product demand and enable emerging economies to expand their manufacturing capacities.
The subject of how intellectual property rights affect financial development and improvement processes is astounding and depends on various elements. In theory, more robust mechanisms for the insurance of licenced innovation could enhance or impede economic growth. In the end, there is growing evidence that, if arranged in a way that promotes compelling and dynamic problems, more grounded and progressively certain licenced innovation law could very well create economic development and cultivate favourable change, improving formative opportunities.
Trade-Related Aspects of Intellectual Property Rights have strengthened the global assurance system, raising a number of concerns regarding the potential impact on economic growth. It is impossible to confidently state that the new system will increase monetary development and enhance the advancement process for a variety of factors. In the economy, intellectual property plays a variety of roles:
- Innovative ideas are a way of making money: Ideas themselves are essentially worthless. IP offers a lot of untapped potential for making innovations into marketable products and services. Copyright and patent registration will produce a steady stream of fees and higher income, which will improve the market’s overall performance.
- Opportunities for Export Business: Intellectual property also enhances a company’s productivity in the export market. An owner of an IP property may use these trademarks or designs to market goods and services abroad, as well as to export their own products or enter into a franchise agreement with an international company.
- Encourage the ideas by protecting them: There will always be those who try to copy an original concept, idea, or development in order to profit financially. Therefore, it is essential to safeguard IP properties against unauthorized third-party infringement. IP security can be established for businesses of all forms and sizes. Therefore, a person should decide which Intellectual Property Rights (trademark, copyright, or patent registration) should be utilized to cover various aspects of its IP after examining the market needs and scenarios.
- Growth of the Business: Protecting their unique products or services from competitors who could steal their market share is crucial for businesses, especially small ones, in order to ensure growth and profitability. Long-term risks to an enterprise’s health might result from losing market share during the early stages of the business cycle. Securing IPs helps in this regard.
Emergence Of IPR In Developing & Developed Countries?
The advent of new technologies has led to the ongoing evolution of IPR protection regulations in both developing and developed countries. The protection of intellectual property and the innovative and creative industries it supports have been shown to have positive economic effects on both developed and developing nations in terms of GDP, employment, and other factors. IPR systems in underdeveloped countries frequently emphasize information transmission using inexpensive copies of modern goods and technology.
For instance, industries associated with a copyright can contribute to the economy of developing countries in a manner similar to that of industrialized nations. Domestic businesses in developing countries frequently and extensively use trademark and patent systems, both domestically and internationally. Furthermore, efficient intellectual property registration and protection are intimately related to international investment and technological transfers in developing countries.
Domestic businesses in developing nations heavily rely on trademark protection to safeguard their trademarks both domestically and internationally. Similar to how patents are growing in popularity, trademarks are as well. Even when compared to industrialized nations, emerging nations have a high rate of trademark utilization relative to GDP, with domestic businesses making up a sizable share of those that use them.
The potential for increased R&D to meet the unique needs of developing nations is another advantage of better intellectual property protection. Innovative businesses in industrialized countries tend to concentrate their research efforts on products and technologies that they predict will have a sizable global market and can be protected by IPRs. Economically speaking, weak IPRs have a negative dynamic externality. They neglect to address the concerns associated with competitive appropriation and R&D uncertainty that are present in private information marketplaces.
One of the world’s most rapidly rising economies, India, must concentrate on increasing market productivity. India has always been renowned for providing the rest of the globe with excellent services. Productivity can be raised through developing methods and technologies. Investments are necessary for innovation, and while they are costly, they play a significant part in investing. We may observe and take notes from industrialized nations like the USA and Japan, where the rate of development grew five times once intellectual property rules were put in place.
Trips In Economic Development
Because they anticipated an adverse impact on their economies, developing nations initially objected to the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement being drafted. Finally, as part of a package deal that also included a commitment by industrialized countries to halt agricultural export subsidies, the developing countries approved the TRIPS Agreement. Higher IPR protection standards were promoted as being in developing countries’ best interests. If developing countries adopted high levels of IPRs, their industries were to be highly invented. If high levels of IPRs were not implemented, scientists and other inventors would depart since they would not be appropriately compensated for their work. Because of this, developing countries granted high levels of IPR protection in an effort to spur economic growth.
The new, integrated World Trade Organization (WTO) system’s TRIPS agreement is thus a component of the global system for the protection of intellectual property rights. According to the agreement, all WTO members are expected to adopt high standards of intellectual property rights protection and to enact these high standards of protection.
One of the key multilateral trade agreements of the WTO, the TRIPS Agreement, has a new and crucial role to play in the growth of the global economy. The World Intellectual Property Organization (WIPO), which promoted Economic Cooperation and Development (OECD), managed intellectual property globally before the enactment of the Agreement and the TRIPS meant to end it.
IPR and TRIPS are strongly supported by the US, along with many other industrialized nations, due to the agreement’s potential to foster long-term economic growth and development. Increased commerce, foreign direct investment (FDI), technology development and diffusion, and technology generation and diffusion help industrialized countries also. In order to promote and encourage technology transfer to least developed country members and help them establish a strong and viable technological foundation that fosters economic development, developed country members of the TRIPS Agreement are required to offer incentives to businesses and institutions on their territories. TRIPS, therefore benefit all its participants.
Case Laws
Some instances where IPRs have helped companies secure their product and services globally include:
- Star India Pvt. Ltd. vs. Moviestrunk.com & Ors.- The Court recognised the Plaintiff’s claim to the exclusive exploitation and dissemination of their copyrighted content, as given by the Copyright Act of 1957. The defendants had made the movie available to the public without the plaintiff’s knowledge or agreement, therefore there was a blatant case of infringement against them. As a result, the Court issued an injunction and also decided on appropriate damages.
- International Society for Krishna Consciousness (ISKCON) vs. Iskcon Apparel Pvt. Ltd & Ors.- The Court ordered the Defendants to stop using the Plaintiff’s mark after finding that there was a clear case of trademark infringement in the given situation. Additionally, it was determined that the Plaintiff’s mark met all statutory requirements of a well-known trademark, and the Court thus deemed it to be one.
- Marico Limited vs. Abhijeet Bhansali-
By clearly interpreting Section 29 of the Trademarks Act, 1999, the Court held that Defendant had violated Plaintiff’s trademark by utilizing it in his film without the Plaintiff’s prior consent. As a result, a temporary restraining order was issued against the defendant along with a directive to take down the in question video.
Conclusion
Especially given the current circumstances in the world, development has taken on a central role for every organization attempting to carve out a niche for itself. Development paves the way for the protection of intellectual property and securing IPRs to protect IP gives one’s company a significant competitive advantage and significantly boosts its success.
References
https://articles.manupatra.com/article-details/Role-of-IPR-in-Economic-Growth
https://www.sciencedirect.com/science/article/abs/pii/0304387895000399
https://documents1.worldbank.org/curated/en/724371467980542334/pdf/multi-page.pdf
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