From Wikipedia, the free encyclopedia
Intellectual property (
IP) is a category of
property that includes intangible creations of the human intellect, and primarily encompasses
copyrights,
patents, and
trademarks.
[1] It also includes other types of rights, such as
trade secrets,
publicity rights, moral rights, and rights against unfair competition.
Artistic works like music and literature, as well as some discoveries,
inventions, words, phrases, symbols, and designs, can all be protected
as intellectual property.
[2][3]
It was not until the 19th century that the term "intellectual property"
began to be used, and not until the late 20th century that it became
commonplace in the majority of the world.
[4]
The main purpose of intellectual property law is to encourage the
creation of a large variety of intellectual goods. To achieve this, the
law gives people and businesses property rights to the information and
intellectual goods they create, usually for a limited period of time.
Because they can earn profit from them, this gives economic incentive
for their creation.
These economic incentives are expected to stimulate innovation and
contribute to the technological progress of countries, which depends on
the extent of protection granted to innovators.
[6]
The intangible nature of intellectual property presents difficulties
when compared with traditional property like land or goods. Unlike
traditional property, intellectual property is "indivisible" – an
unlimited number of people can "consume" an intellectual good without it
being depleted.
Additionally, investments in intellectual goods suffer
from problems of appropriation – a landowner can surround their land
with a robust fence and hire armed guards to protect it, but a producer
of information or an intellectual good can usually do very little to
stop their first buyer from replicating it and selling it at a lower
price. Balancing rights so that they are strong enough to encourage the
creation of intellectual goods but not so strong that they prevent the
goods' wide use is the primary focus of modern intellectual property
law.
History
The
Statute of Monopolies (1624) and the British
Statute of Anne (1710) are seen as the origins of
patent law and
copyright respectively,
[8] firmly establishing the concept of intellectual property.
The first known use of the term
intellectual property dates to 1769, when a piece published in the
Monthly Review used the phrase.
[9]
The first clear example of modern usage goes back as early as 1808,
when it was used as a heading title in a collection of essays.
[10]
The German equivalent was used with the founding of the
North German Confederation whose
constitution granted legislative power over the protection of intellectual property (
Schutz des geistigen Eigentums) to the confederation.
[11] When the administrative secretariats established by the
Paris Convention (1883) and the
Berne Convention (1886) merged in 1893, they located in Berne, and also adopted the term intellectual property in their new combined title, the
United International Bureaux for the Protection of Intellectual Property.
The organization subsequently relocated to Geneva in 1960, and was succeeded in 1967 with the establishment of the
World Intellectual Property Organization (WIPO) by
treaty as an agency of the
United Nations.
According to Lemley, it was only at this point that the term really
began to be used in the United States (which had not been a party to the
Berne Convention),
[4] and it did not enter popular usage there until passage of the
Bayh-Dole Act in 1980.
[12]
"The history of patents does not begin with inventions, but rather with royal grants by Queen Elizabeth I
(1558–1603) for monopoly privileges... Approximately 200 years after
the end of Elizabeth's reign, however, a patent represents a legal right
obtained by an inventor providing for exclusive control over the
production and sale of his mechanical or scientific invention...
[demonstrating] the evolution of patents from royal prerogative to
common-law doctrine."[13]
The term can be found used in an October 1845
Massachusetts Circuit Court ruling in the patent case
Davoll et al. v. Brown.,
in which Justice Charles L. Woodbury wrote that "only in this way can
we protect intellectual property, the labors of the mind, productions
and interests are as much a man's own...as the wheat he cultivates, or
the flocks he rears."
[14] The statement that "discoveries are..property" goes back earlier. Section 1 of the
French law of 1791
stated, "All new discoveries are the property of the author; to assure
the inventor the property and temporary enjoyment of his discovery,
there shall be delivered to him a patent for five, ten or fifteen
years."
[15] In Europe,
French author A. Nion mentioned
propriété intellectuelle in his
Droits civils des auteurs, artistes et inventeurs, published in 1846.
Until recently, the purpose of intellectual property law was to give
as little protection as possible in order to encourage innovation.
Historically, therefore, they were granted only when they were necessary
to encourage invention, limited in time and scope.
[16]
This is mainly as a result of knowledge being traditionally viewed as a
public good, in order to allow its extensive dissemination and
improvement thereof.
[17]
The concept's origins can potentially be traced back further.
Jewish law
includes several considerations whose effects are similar to those of
modern intellectual property laws, though the notion of intellectual
creations as property does not seem to exist – notably the principle of
Hasagat Ge'vul (unfair encroachment) was used to justify limited-term
publisher (but not author) copyright in the 16th century.
[18] In 500 BCE, the government of the Greek state of
Sybaris offered one year's patent "to all who should discover any new refinement in luxury".
[19][20]
According to Morin, "the global intellectual property regime is currently in the midst of a paradigm shift".
[21]
Indeed, up until the early 2000s the global IP regime used to be
dominated by high standards of protection characteristic of IP laws from
Europe or the United States, with a vision that uniform application of
these standards over every country and to several fields with little
consideration over social, cultural or environmental values or of the
national level of economic development. Morin argues that "the emerging
discourse of the global IP regime advocates for greater policy
flexibility and greater access to knowledge, especially for developing
countries." Indeed, with the Development Agenda adopted by WIPO in 2007,
a set of 45 recommendations to adjust WIPO’s activities to the specific
needs of developing countries and aim to reduce distortions especially
on issues such as patients’ access to medicines, Internet users’ access
to information, farmers’ access to seeds, programmers’ access to source
codes or students’ access to scientific articles.
[22] However, this paradigm shift has not yet manifested itself in concrete legal reforms at the international level.
[23]
Similarly, it is based on these background that the Trade-Related
Aspects of Intellectual Property Rights (TRIPS) agreement requires
members of the WTO to set minimum standards of legal protection, but its
objective to have a “one-fits-all” protection law on Intellectual
Property has been viewed with controversies regarding differences in the
development level of countries. Despite the controversy, the agreement
has extensively incorporated intellectual property rights into the
global trading system for the first time in 1995, and has prevailed as
the most comprehensive agreement reached by the world.
[24]
Intellectual property rights
Intellectual property rights include
patents,
copyright,
industrial design rights,
trademarks,
plant variety rights,
trade dress,
geographical indications,
[25] and in some jurisdictions
trade secrets. There are also more specialized or derived varieties of
sui generis exclusive rights, such as circuit design rights (called
mask work rights in the US) and
supplementary protection certificates for pharmaceutical products (after expiry of a patent protecting them) and
database rights (in
European law).
Patents
A
patent
is a form of right granted by the government to an inventor, giving the
owner the right to exclude others from making, using, selling, offering
to sell, and importing an
invention
for a limited period of time, in exchange for the public disclosure of
the invention. An invention is a solution to a specific technological
problem, which may be a product or a process and generally has to
fulfill three main requirements: it has to be new, not obvious and there
needs to be an industrial applicability.
To enrich the body of knowledge and stimulate innovation, it is an
obligation for patent owners to disclose valuable information about
their inventions to the public.
[27]
Copyright
A
copyright gives the creator of an original work
exclusive rights
to it, usually for a limited time. Copyright may apply to a wide range
of creative, intellectual, or artistic forms, or "works".
[28][29] Copyright does not cover ideas and information themselves, only the form or manner in which they are expressed.
[30]
Industrial design rights
An
industrial design right (sometimes called "design right" or
design patent)
protects the visual design of objects that are not purely utilitarian.
An industrial design consists of the creation of a shape, configuration
or composition of pattern or color, or combination of pattern and color
in three-dimensional form containing aesthetic value. An industrial
design can be a two- or three-dimensional pattern used to produce a
product, industrial commodity or handicraft. Generally speaking, it is
what makes a product look appealing, and as such, it increases the
commercial value of goods.
[27]
Plant varieties
Plant breeders' rights
or plant variety rights are the rights to commercially use a new
variety of a plant. The variety must amongst others be novel and
distinct and for registration the evaluation of propagating material of
the variety is considered.
Trademarks
A
trademark is a recognizable
sign,
design or
expression which distinguishes
products or
services of a particular trader from the similar products or services of other traders.
Trade dress
Trade dress
is a legal term of art that generally refers to characteristics of the
visual and aesthetic appearance of a product or its packaging (or even
the design of a building) that signify the source of the product to
consumers.
[34]
Trade secrets
A
trade secret is a
formula, practice, process,
design, instrument,
pattern, or compilation of
information which is not generally known or reasonably ascertainable, by which a
business
can obtain an economic advantage over competitors and customers. There
is no formal government protection granted; each business must take
measures to guard its own trade secrets (e.g., Formula of its soft
drinks is a trade secret for Coca-Cola.)
Object of intellectual property law
The
main purpose of intellectual property law is to encourage the creation
of a wide variety of intellectual goods for consumers.
To achieve this, the law gives people and businesses property rights to
the information and intellectual goods they create, usually for a
limited period of time. Because they can then profit from them, this
gives economic incentive for their creation.
The intangible nature of intellectual property presents difficulties
when compared with traditional property like land or goods. Unlike
traditional property, intellectual property is indivisible – an
unlimited number of people can "consume" an intellectual good without it
being depleted. Additionally, investments in intellectual goods suffer
from problems of appropriation – while a landowner can surround their
land with a robust fence and hire armed guards to protect it, a producer
of information or an intellectual good can usually do very little to
stop their first buyer from replicating it and selling it at a lower
price. Balancing rights so that they are strong enough to encourage the
creation of information and intellectual goods but not so strong that
they prevent their wide use is the primary focus of modern intellectual
property law.
By exchanging limited exclusive rights for disclosure of inventions
and creative works, society and the patentee/copyright owner mutually
benefit, and an incentive is created for inventors and authors to create
and disclose their work. Some commentators have noted that the
objective of intellectual property legislators and those who support its
implementation appears to be "absolute protection". "If some
intellectual property is desirable because it encourages innovation,
they reason, more is better. The thinking is that creators will not have
sufficient incentive to invent unless they are legally entitled to
capture the full social value of their inventions".
[16]
This absolute protection or full value view treats intellectual
property as another type of "real" property, typically adopting its law
and rhetoric. Other recent developments in intellectual property law,
such as the
America Invents Act,
stress international harmonization. Recently there has also been much
debate over the desirability of using intellectual property rights to
protect cultural heritage, including intangible ones, as well as over
risks of
commodification derived from this possibility.
[35] The issue still remains open in legal scholarship.
Financial incentive
These
exclusive rights allow owners of intellectual property to benefit from
the property they have created, providing a financial incentive for the
creation of an investment in intellectual property, and, in case of
patents, pay associated
research and development costs.
[36]
In the United States Article I Section 8 Clause 8 of the Constitution,
commonly called the Patent and Copyright Clause, reads; "[The Congress
shall have power] 'To promote the progress of science and useful arts,
by securing for limited times to authors and inventors the exclusive
right to their respective writings and discoveries.'"
[37] ”Some commentators, such as
David Levine and
Michele Boldrin, dispute this justification.
[38]
In 2013 the United States Patent & Trademark Office approximated
that the worth of intellectual property to the U.S. economy is more than
US $5 trillion and creates employment for an estimated 18 million
American people. The value of intellectual property is considered
similarly high in other developed nations, such as those in the European
Union.
[39] In the UK, IP has become a recognised asset class for use in
pension-led funding
and other types of business finance. However, in 2013, the UK
Intellectual Property Office stated: "There are millions of intangible
business assets whose value is either not being leveraged at all, or
only being leveraged inadvertently".
[40]
Economic growth
The
WIPO treaty and several related international agreements underline that
the protection of intellectual property rights is essential to
maintaining economic growth. The
WIPO Intellectual Property Handbook gives two reasons for intellectual property laws:
One is to give statutory expression to the moral and economic rights
of creators in their creations and the rights of the public in access to
those creations. The second is to promote, as a deliberate act of
Government policy, creativity and the dissemination and application of
its results and to encourage fair trading which would contribute to
economic and social development.[41]
The
Anti-Counterfeiting Trade Agreement
(ACTA) states that "effective enforcement of intellectual property
rights is critical to sustaining economic growth across all industries
and globally".
[42]
Economists estimate that two-thirds of the value of large businesses in the United States can be traced to intangible assets.
[43] "IP-intensive industries" are estimated to generate 72 percent more
value added (price minus material cost) per employee than "non-IP-intensive industries".
A joint research project of the
WIPO and the
United Nations University
measuring the impact of IP systems on six Asian countries found "a
positive correlation between the strengthening of the IP system and
subsequent economic growth."
[45]
Morality
According to Article 27 of the
Universal Declaration of Human Rights,
"everyone has the right to the protection of the moral and material
interests resulting from any scientific, literary or artistic production
of which he is the author".
[46] Although the relationship between intellectual property and
human rights is a complex one,
[47] there are moral arguments for intellectual property.
The arguments that justify intellectual property fall into three
major categories. Personality theorists believe intellectual property is
an extension of an individual. Utilitarians believe that intellectual
property stimulates social progress and pushes people to further
innovation. Lockeans argue that intellectual property is justified based
on deservedness and hard work.
[48]
Various moral justifications for private property can be used to
argue in favor of the morality of intellectual property, such as:
- Natural Rights/Justice Argument: this argument is based on
Locke's idea that a person has a natural right over the labour and/or
products which is produced by his/her body. Appropriating these products
is viewed as unjust. Although Locke had never explicitly stated that
natural right applied to products of the mind,[49]
it is possible to apply his argument to intellectual property rights,
in which it would be unjust for people to misuse another's ideas.[50]
Locke's argument for intellectual property is based upon the idea that
laborers have the right to control that which they create. They argue
that we own our bodies which are the laborers, this right of ownership
extends to what we create. Thus, intellectual property ensures this
right when it comes to production.
- Utilitarian-Pragmatic Argument: according to this rationale, a
society that protects private property is more effective and prosperous
than societies that do not. Innovation and invention in 19th century
America has been attributed to the development of the patent system.[51]
By providing innovators with "durable and tangible return on their
investment of time, labor, and other resources", intellectual property
rights seek to maximize social utility.[52]
The presumption is that they promote public welfare by encouraging the
"creation, production, and distribution of intellectual works".[52]
Utilitarians argue that without intellectual property there would be a
lack of incentive to produce new ideas. Systems of protection such as
Intellectual property optimize social utility.
- "Personality" Argument: this argument is based on a quote from Hegel:
"Every man has the right to turn his will upon a thing or make the
thing an object of his will, that is to say, to set aside the mere thing
and recreate it as his own".[53] European intellectual property law is shaped by this notion that ideas are an "extension of oneself and of one's personality".[54]
Personality theorists argue that by being a creator of something one is
inherently at risk and vulnerable for having their ideas and designs
stolen and/or altered. Intellectual property protects these moral claims
that have to do with personality.
Lysander Spooner
(1855) argues "that a man has a natural and absolute right—and if a
natural and absolute, then necessarily a perpetual, right—of property,
in the ideas, of which he is the discoverer or creator; that his right
of property, in ideas, is intrinsically the same as, and stands on
identically the same grounds with, his right of property in material
things; that no distinction, of principle, exists between the two
cases".
[55]
Writer
Ayn Rand argued in her book
Capitalism: The Unknown Ideal
that the protection of intellectual property is essentially a moral
issue. The belief is that the human mind itself is the source of wealth
and survival and that all property at its base is intellectual property.
To violate intellectual property is therefore no different morally than
violating other property rights which compromises the very processes of
survival and therefore constitutes an immoral act.
[56]
Infringement, misappropriation, and enforcement
Violation of intellectual property rights, called "infringement" with
respect to patents, copyright, and trademarks, and "misappropriation"
with respect to trade secrets, may be a breach of civil law or criminal
law, depending on the type of intellectual property involved,
jurisdiction, and the nature of the action.
As of 2011 trade in counterfeit copyrighted and trademarked works was
a $600 billion industry worldwide and accounted for 5–7% of global
trade.
[57]
Patent infringement
Patent infringement typically is caused by using or selling a
patented invention without permission from the patent holder. The scope
of the patented invention or the extent of protection
[58] is defined in the
claims of the granted patent. There is
safe harbor
in many jurisdictions to use a patented invention for research. This
safe harbor does not exist in the US unless the research is done for
purely philosophical purposes, or in order to gather data in order to
prepare an application for regulatory approval of a drug.
[59]
In general, patent infringement cases are handled under civil law
(e.g., in the United States) but several jurisdictions incorporate
infringement in criminal law also (for example, Argentina, China,
France, Japan, Russia, South Korea).
[60]
Copyright infringement
Copyright infringement is reproducing, distributing, displaying or performing a
work, or to make
derivative works,
without permission from the copyright holder, which is typically a
publisher or other business representing or assigned by the work's
creator. It is often called "piracy".
[61]
While copyright is created the instant a work is fixed, generally the
copyright holder can only get money damages if the owner registers the
copyright.
[citation needed] Enforcement of copyright is generally the responsibility of the copyright holder.
[62] The
ACTA trade agreement,
signed in May 2011 by the United States, Japan, Switzerland, and the
EU, and which has not entered into force, requires that its parties add
criminal penalties, including incarceration and fines, for copyright and
trademark infringement, and obligated the parties to active police for
infringement.
[57][63] There are
limitations and exceptions to copyright, allowing limited use of copyrighted works, which does not constitute infringement. Examples of such doctrines are the
fair use and
fair dealing doctrine.
Trademark infringement
Trademark infringement occurs when one party uses a trademark that is identical or
confusingly similar
to a trademark owned by another party, in relation to products or
services which are identical or similar to the products or services of
the other party. In many countries, a trademark receives protection
without registration, but registering a trademark provides legal
advantages for enforcement. Infringement can be addressed by civil
litigation and, in several jurisdictions, under criminal law.
[57][63]
Trade secret misappropriation
Trade secret misappropriation is different from violations of other
intellectual property laws, since by definition trade secrets are
secret, while patents and registered copyrights and trademarks are
publicly available. In the United States, trade secrets are protected
under state law, and states have nearly universally adopted the
Uniform Trade Secrets Act. The United States also has federal law in the form of the
Economic Espionage Act of 1996 (
18 U.S.C. §§ 1831–
1839),
which makes the theft or misappropriation of a trade secret a federal
crime. This law contains two provisions criminalizing two sorts of
activity. The first,
18 U.S.C. § 1831(a), criminalizes the theft of trade secrets to benefit foreign powers. The second,
18 U.S.C. § 1832,
criminalizes their theft for commercial or economic purposes. (The
statutory penalties are different for the two offenses.) In
Commonwealth common law jurisdictions, confidentiality and trade secrets are regarded as an
equitable right rather than a
property right but penalties for theft are roughly the same as in the United States.
[citation needed]
Criticisms
The term "intellectual property"
Criticism of the term
intellectual property ranges from discussing its vagueness and abstract overreach to direct contention to the semantic validity of using words like
property and
rights
in fashions that contradict practice and law. Many detractors think
this term specially serves the doctrinal agenda of parties opposing
reform in the public interest or otherwise abusing related legislations;
and that it disallows intelligent discussion about specific and often
unrelated aspects of copyright, patents, trademarks, etc.
[64]
Free Software Foundation founder
Richard Stallman argues that, although the term
intellectual property
is in wide use, it should be rejected altogether, because it
"systematically distorts and confuses these issues, and its use was and
is promoted by those who gain from this confusion". He claims that the
term "operates as a catch-all to lump together disparate laws [which]
originated separately, evolved differently, cover different activities,
have different rules, and raise different public policy issues" and that
it creates a "bias" by confusing these monopolies with ownership of
limited physical things, likening them to "property rights".
[65]
Stallman advocates referring to copyrights, patents and trademarks in
the singular and warns against abstracting disparate laws into a
collective term. He argues that "to avoid spreading unnecessary bias and
confusion, it is best to adopt a firm policy not to speak or even think
in terms of 'intellectual property'."
[66]
Similarly, economists
Boldrin and
Levine
prefer to use the term "intellectual monopoly" as a more appropriate
and clear definition of the concept, which they argue, is very
dissimilar from property rights.
[67]
They further argued that “stronger patents do little or nothing to
encourage innovation”, mainly explained by its tendency to create market
monopolies, thereby restricting further innovations and technology
transfer.
[68]
On the assumption that intellectual property rights are actual
rights, Stallman says that this claim does not live to the historical
intentions behind these laws, which in the case of copyright served as a
censorship system, and later on, a regulatory model for the printing
press that may have benefited authors incidentally, but never interfered
with the freedom of average readers.
[69] Still referring to copyright, he cites legal literature such as the United States Constitution and
case law
to demonstrate that the law is meant to be an optional and experimental
bargain to temporarily trade property rights and free speech for
public, not private, benefits in the form of increased artistic
production and knowledge. He mentions that "if copyright were a natural
right nothing could justify terminating this right after a certain
period of time".
[70]
Law professor, writer and political activist
Lawrence Lessig, along with many other
copyleft
and free software activists, has criticized the implied analogy with
physical property (like land or an automobile). They argue such an
analogy fails because physical property is generally rivalrous while
intellectual works are non-rivalrous (that is, if one makes a copy of a
work, the enjoyment of the copy does not prevent enjoyment of the
original).
[71][72] Other arguments along these lines claim that unlike the situation with tangible property, there is
no natural scarcity
of a particular idea or information: once it exists at all, it can be
re-used and duplicated indefinitely without such re-use diminishing the
original.
Stephan Kinsella has objected to
intellectual property on the grounds that the word "property" implies scarcity, which may not be applicable to ideas.
[73]
Entrepreneur and politician
Rickard Falkvinge and
hacker Alexandre Oliva have independently compared George Orwell's fictional dialect
Newspeak
to the terminology used by intellectual property supporters as a
linguistic weapon to shape public opinion regarding copyright debate and
DRM.
[74][75]
Alternative terms
In
civil law jurisdictions, intellectual property has often been referred to as
intellectual rights, traditionally a somewhat broader concept that has included
moral rights and other personal protections that cannot be bought or sold. Use of the term
intellectual rights has declined since the early 1980s, as use of the term
intellectual property has increased.
Alternative terms
monopolies on information and
intellectual monopoly have emerged among those who argue against the "property" or "intellect" or "rights" assumptions, notably
Richard Stallman. The
backronyms intellectual protectionism and
intellectual poverty,
[76] whose initials are also
IP, have found supporters as well, especially among those who have used the backronym
digital restrictions management.
[77][78]
The argument that an intellectual property right should (in the
interests of better balancing of relevant private and public interests)
be termed an
intellectual monopoly privilege (IMP) has been advanced by several academics including Birgitte Andersen
[79] and
Thomas Alured Faunce.
[80]
Objections to overbroad intellectual property laws
Some critics of intellectual property, such as those in the
free culture movement, point at intellectual monopolies as harming health (in the case of
pharmaceutical patents), preventing progress, and benefiting concentrated interests to the detriment of the masses,
[81][82][83][84] and argue that the public interest is harmed by ever-expansive monopolies in the form of
copyright extensions,
software patents, and
business method patents. More recently scientists and engineers are expressing concern that
patent thickets are undermining technological development even in high-tech fields like
nanotechnology.
[85][86]
Petra Moser has asserted that historical analysis suggests that intellectual property laws may harm innovation:
Overall, the weight of the existing historical evidence suggests that
patent policies, which grant strong intellectual property rights to
early generations of inventors, may discourage innovation. On the
contrary, policies that encourage the diffusion of ideas and modify
patent laws to facilitate entry and encourage competition may be an
effective mechanism to encourage innovation.[87]
In support of that argument,
Jörg Baten, Nicola Bianchi and Petra Moser
[88]
find historical evidence that especially compulsory licensing – which
allows governments to license patents without the consent of
patent-owners – encouraged invention in Germany in the early 20th
century by increasing the threat of competition in fields with low
pre-existing levels of competition.
Peter Drahos
notes, "Property rights confer authority over resources. When authority
is granted to the few over resources on which many depend, the few gain
power over the goals of the many. This has consequences for both
political and economic freedoms with in a society."
[89]:13
The
World Intellectual Property Organization
(WIPO) recognizes that conflicts may exist between the respect for and
implementation of current intellectual property systems and other human
rights.
[90] In 2001 the UN
Committee on Economic, Social and Cultural Rights
issued a document called "Human rights and intellectual property" that
argued that intellectual property tends to be governed by economic goals
when it should be viewed primarily as a social product; in order to
serve human well-being, intellectual property systems must respect and
conform to human rights laws. According to the Committee, when systems
fail to do so they risk infringing upon the human right to food and
health, and to cultural participation and scientific benefits.
[91][92] In 2004 the General Assembly of WIPO adopted
The Geneva Declaration on the Future of the World Intellectual Property Organization
which argues that WIPO should "focus more on the needs of developing
countries, and to view IP as one of many tools for development—not as an
end in itself".
[93]
Further along these lines, The ethical problems brought up by IP
rights are most pertinent when it is socially valuable goods like
life-saving medicines are given IP protection. While the application of
IP rights can allow companies to charge higher than the marginal cost of
production in order to recoup the costs of research and development,
the price may exclude from the market anyone who cannot afford the cost
of the product, in this case a life-saving drug.
[94]
"An IPR driven regime is therefore not a regime that is conductive to
the investment of R&D of products that are socially valuable to
predominately poor populations".
[94]:1108–9
Some
libertarian critics of intellectual property have argued that allowing property rights in ideas and information creates
artificial scarcity and infringes on the right to own tangible property.
Stephan Kinsella uses the following scenario to argue this point:
[I]magine the time when men lived in caves. One bright guy—let's call
him Galt-Magnon—decides to build a log cabin on an open field, near his
crops. To be sure, this is a good idea, and others notice it. They
naturally imitate Galt-Magnon, and they start building their own cabins.
But the first man to invent a house, according to IP advocates, would
have a right to prevent others from building houses on their own land,
with their own logs, or to charge them a fee if they do build houses. It
is plain that the innovator in these examples becomes a partial owner
of the tangible property (e.g., land and logs) of others, due not to
first occupation and use of that property (for it is already owned), but
due to his coming up with an idea. Clearly, this rule flies in the face
of the first-user homesteading rule, arbitrarily and groundlessly
overriding the very homesteading rule that is at the foundation of all
property rights.[95]
Thomas Jefferson once said in a letter to Isaac McPherson on August 13, 1813:
"If nature has made any one thing less susceptible than all others of
exclusive property, it is the action of the thinking power called an
idea, which an individual may exclusively possess as long as he keeps it
to himself; but the moment it is divulged, it forces itself into the
possession of every one, and the receiver cannot dispossess himself of
it. Its peculiar character, too, is that no one possesses the less,
because every other possesses the whole of it. He who receives an idea
from me, receives instruction himself without lessening mine; as he who
lights his taper at mine, receives light without darkening me."[96]
In 2005 the
RSA launched the
Adelphi Charter, aimed at creating an international policy statement to frame how governments should make balanced intellectual property law.
[97]
Another aspect of current U.S. Intellectual Property legislation is
its focus on individual and joint works; thus, copyright protection can
only be obtained in 'original' works of authorship.
[98]
Expansion in nature and scope of intellectual property laws
Expansion of U.S. copyright law (Assuming authors create their works by age 35 and live for seventy years)
Other criticism of intellectual property law concerns the expansion of intellectual property, both in duration and in scope.
In addition, as scientific knowledge has expanded and allowed new
industries to arise in fields such as biotechnology and nanotechnology,
originators of technology have sought IP protection for the new
technologies. Patents have been granted for living organisms,
[99] (and in the United States,
certain living organisms have been patentable for over a century).
[100]
The increase in terms of protection is particularly seen in relation
to copyright, which has recently been the subject of serial extensions
in the United States and
in Europe. With no need for registration or copyright notices, this is thought to have led to an increase in
orphan works
(copyrighted works for which the copyright owner cannot be contacted), a
problem that has been noticed and addressed by governmental bodies
around the world.
[105]
Also with respect to copyright, the American film industry helped to
change the social construct of intellectual property via its trade
organization, the
Motion Picture Association of America.
In amicus briefs in important cases, in lobbying before Congress, and
in its statements to the public, the MPAA has advocated strong
protection of intellectual-property rights. In framing its
presentations, the association has claimed that people are entitled to
the property that is produced by their labor. Additionally Congress's
awareness of the position of the United States as the world's largest
producer of films has made it convenient to expand the conception of
intellectual property.
[106] These doctrinal reforms have further strengthened the industry, lending the MPAA even more power and authority.
[107]
RIAA representative
Hilary Rosen testifies before the Senate Judiciary Committee on the future of digital music (July 11, 2000)
The growth of the
Internet, and particularly distributed search engines like
Kazaa and
Gnutella, have represented a challenge for copyright policy. The
Recording Industry Association of America, in particular, has been on the front lines of the fight against
copyright infringement,
which the industry calls "piracy". The industry has had victories
against some services, including a highly publicized case against the
file-sharing company
Napster,
and some people have been prosecuted for sharing files in violation of
copyright. The electronic age has seen an increase in the attempt to use
software-based
digital rights management tools to restrict the copying and use of digitally based works. Laws such as the
Digital Millennium Copyright Act
have been enacted that use criminal law to prevent any circumvention of
software used to enforce digital rights management systems. Equivalent
provisions, to prevent circumvention of copyright protection have
existed in EU for some time, and are being expanded in, for example,
Article 6 and 7 the
Copyright Directive. Other examples are Article 7 of the Software Directive of 1991 (91/250/EEC), and the
Conditional Access Directive of 1998 (98/84/EEC). This can hinder legal uses, affecting
public domain works,
limitations and exceptions to copyright, or uses allowed by the copyright holder. Some
copyleft licenses, like
GNU GPL 3, are designed to counter that.
[108]
Laws may permit circumvention under specific conditions like when it is
necessary to achieve interoperability with the circumventor's program,
or for
accessibility reasons; however, distribution of circumvention tools or instructions may be illegal.
In the context of trademarks, this expansion has been driven by
international efforts to harmonise the definition of "trademark", as
exemplified by the
Agreement on Trade-Related Aspects of Intellectual Property Rights
ratified in 1994, which formalized regulations for IP rights that had
been handled by common law, or not at all, in member states. Pursuant to
TRIPs, any
sign
which is "capable of distinguishing" the products or services of one
business from the products or services of another business is capable of
constituting a trademark.
[109]
Use in corporate tax avoidance
Intellectual property has become a core tool in corporate tax planning and tax avoidance. IP is a key component of the leading multinational tax avoidance
base erosion and profit shifting (BEPS) tools,
[115][116] which the OECD estimates costs $100-240 billion in lost annual tax revenues,
[117] and includes:
In 2017-2018, both the U.S. and the EU Commission simultaneously decided to depart from the
OECD BEPS Project timetable, which was set up in 2013 to combat IP BEPS tax tools like the above,
[117] and launch their own anti-IP BEPS tax regimes:
- U.S. Tax Cuts and Jobs Act of 2017, which has several anti-IP BEPS abuse tax regimes, including GILTI tax and the BEAT tax regimes.[124][125][126]
- EU Commission 2018 Digital Services Tax, which is less advanced than
the U.S. TCJA, but does seek to override IP BEPS tools via a quasi-VAT.[127][128][129]
The departure of the U.S. and EU Commission from the OECD BEPS
Project process, is attributed to frustrations with the rise in IP as a
key BEPS tax tool, creating intangible assets, which are then turned
into royalty payment BEPS schemes (double Irish), and/or
capital allowance
BEPS schemes (capital allowances for intangibles). In contrast, the
OECD has spent years developing and advocating intellectual property as a
legal and a GAAP accounting concept.
[130]
The EU Commission's
€13 billion fine of Apple's pre 2015 double Irish IP BEPS tax scheme, is the largest corporate tax fine in history.
[131]
.JPG)
