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Introduction to intellectual property

Did you know?
In 2012, Samsung was required to pay USD 1 billion to Apple for patent infringement claims.
Ericsson does not make cellphones anymore, but it has a very profitable revenue stream merely from licensing of cellular technology patents to cellphone manufacturers.
Zomato was initially started as Foodiebay but changed its name due to its similarity with eBay.

With the advent of newer technology, processes and automation tools, businesses are becoming heavily dependent on technology and knowledge. These processes and innovation take a lot of effort to develop – once developed, others can also benefit from them. It is quite crucial for innovators, technology or process creators and businesses to prevent others from deriving any benefits from unjust exploitation of these innovations, and to be rewarded for this effort.
This is where intellectual property (IP) protection (granted largely to works created or generated through application of mind, inventions, know-how and original skills – see below for details) comes into play. From the IP creator’s perspective, an understanding of intellectual property and mechanisms for its protection is useful for the following purposes:
  • To enable customers to identify the product and its creator, and thus capture any goodwill associated with the product,
  • Identification of ways to monetize the output of intellectual effort and be rewarded for one’s efforts,
  • To prevent employees, suppliers and consultants from stealing or unfairly benefiting from creations which are not their own.
There are multiple ways to achieve each of the above goals, which are dealt with in this course later. First, let us learn about the types of intellectual property and how to identify intellectual property in a particular product. 

Identification of intellectual property
Intellectual property can include all innovations, inventions, scientific discoveries, industrial designs, trademarks, logos, business processes, literary and artistic works and know-how which result from application of the creator’s intellect.
There can be significant innovation in every little product that we use - consider an electronic toothbrush. There can be multiple elements of intellectual property involved in it - the shape of the brush can be a protected as an industrial design, the name of the brand inscribed can be protected as trademark, and the motor configuration inside the brush can be protected as a patent.
Intellectual property rights (IPR) are generally granted or protected under the law to create a sustainable eco-system which promotes innovation by giving certain exclusive rights to the creator of the innovation, which would also act as a catalyst for further creation of intellectual property that would ultimately benefit the economy. IP protection also helps in creating a balance between the needs of the innovators and public interest. Let us understand different types of intellectual properties and their legal framework in India.

Types of intellectual property and their legal framework
Intellectual property is generally divided into copyrights, industrial properties and traditional rights.

1. Copyright –The Indian Copyright Act, 1957 grants copyright protection to five types of works, including literary works (e.g., Brochures, manuals, blog posts and articles, content of a website and any other marketing material, software, databases, etc. ), artistic works (Paintings, drawings and photographs), musical works, sound recordings, cinematograph films, dramatic works (dance arrangement, skit, drama, etc.)

2. Industrial properties – Industrial properties can be subdivided into trademarks, patents, industrial designs and geographical indicators.

a. Trademarks - Names, logos, images, shapes, taglines, slogans, mascots and anything that can be written or graphically (or pictorially) represented are eligible for trademark protection. In some countries even colour and smell have been successfully registered as trademarks. Trademark is protected under Trademarks Act, 1999.

b. Patents – A patent grants the exclusive right to exploit an invention economically for a limited period. Generally a patent is granted for a product or process that involves a technological process and solves a particular problem. The products and process that can be patented may vary from one jurisdiction to another. Patent is granted under Patents Act, 1970.

c. Industrial designs – The Designs Act, 2000 protects visual designs which are applied on products or articles through an industrial process.

d. Geographical Indications (GI) - Geographical Indications of Goods (Registration & Protection) Act, 1999 prevent unauthorised use of a geographical indication (a good having certain repute which indicates its place of origination). For example, Darjeeling tea for tea produced in certain tea gardens of Darjeeling district in West Bengal. No other producers from those specified tea gardens in Darjeeling can use the name Darjeeling tea for tea.

3. Traditional rights – In recent times, certain other traditional or indigenous knowhow are protected under law, for example the Protection of Plant Variety and Farmers Right Act, 2001 (protects plant varieties grown and developed by farmers) and Biological Diversity Act, 2000 (provides mechanism for equitable sharing of benefits arising out use of traditional biological resources and knowledge) are examples of traditional rights which are protected under law.

Importance of IP for businesses
An understanding of intellectual property law is a necessity for any business today, including small and medium size businesses (SMEs) and startuos. It is relevant for every business, be it small or huge, if it has its own website, or a blog, software, unique user interfaces, product manuals, sales pages, sales pitch, catalogue or any other marketing material. Basically, if your company is generating images, code, videos and text for various activities of the company, it is likely that you need to protect the same from pirates and competitors. Intellectual property law is an effective tool to prevent others from copying your work in certain circumstances. All businesses should obtain a trademark around their brand name, which helps in identifying the products originating out of your business. Moreover, certain SMEs might even invent newer manufacturing processes or products, which may be capable of patent protection. Intellectual property is often so crucial to the business model of a company, that ability to effectively protect it often accounts for making or breaking the business. Intellectual property should be protected by businesses for the following reasons:
  1. Gives you exclusive rights to exploit your own IP and gives you protection from other competitors who may use your IP.
  2. Busineses can license or franchise their IPs to other users if they do not have the capacity to scale up their production or market them and generate an alternative source of income.
  3. A catchy and distinctive trademark can help the customers to understand and recognise your product from the competitor’s product.
  4. IP can form an essential part of the branding and marketing strategy of your company.
  5. IP can be used as collateral for obtaining a loan, since it has a market value (IP valuation is a unique skill). Kingfisher had used its brand name and pledged its IP to obtain an INR 6000 crore loan from a set of banks led by State Bank of India.
  6. Registration IP can increase the valuation of the company and may help in raising investment for your business or while you are selling or transferring your business, as it is easier to identify the IP ‘portfolio’ of the business.
Use of intellectual property-related expertise in your own business and career opportunities
Understanding of intellectual property can be useful in the following ways in one’s professional career:
  • As an entrepreneur or business owner: Be in complete control of the IP portfolio of your business.
  • As a manager: Advise senior management on ways to monetize and protect IP and provide strategic inputs, improve your career prospects
  • As a consultant: Advise businesses on improving IP strategy, IP monetization techniques, IP documentation and IP acquisitions. 

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