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Intellectual property (IP) is a legal concept which refers to creations of the mind for which exclusive rights are recognized. Under intellectual property law, owners are granted certain exclusive rights to a variety of intangible assets, such as musical, literary, and artistic works; discoveries and inventions; and words, phrases, symbols, and designs. Common types of intellectual property rights include copyright, trademarks, patents, industrial design rights, trade dress, and in some jurisdictions trade secrets.
Although many of the legal principles governing intellectual property rights have evolved over centuries, 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. The British Statute of Anne (1710) and the Statute of Monopolies (1624) are now seen as the origins of copyright and patent law respectively.
Modern usage of the term intellectual property goes back at least as far as 1867 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. 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 organisation 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), and it did not enter popular usage until passage of the Bayh-Dole Act in 1980.
"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."
In an 1818 collection of his writings, the French liberal theorist, Benjamin Constant, argued against the recently introduced idea of "property which has been called intellectual." The term intellectual property 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." 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." 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 possible in order to encourage innovation. Historically, therefore, they were granted only when they were necessary to encourage invention, limited in time and scope.
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. 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".
Common types of intellectual property rights include patents, copyright, industrial design rights, trademarks, trade dress, and in some jurisdictions trade secrets. There are also more specialized varieties of sui generis exclusive rights, such as circuit design rights (called mask work rights in U.S. law, protected under the Integrated Circuit Topography Act in Canadian law, and in European Union law by Directive 87/54/EEC of 16 December 1986 on the legal protection of topographies of semiconductor products), plant breeders' rights, plant variety rights, industrial design rights, supplementary protection certificates for pharmaceutical products and database rights (in European law).
A patent grants an inventor exclusive rights to make, use, sell, and import 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.:17
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". Copyright does not cover ideas and information themselves, only the form or manner in which they are expressed.
An industrial design right 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.
Trade dress is a legal term of art that generally refers to characteristics of the visual appearance of a product or its packaging (or even the design of a building) that signify the source of the product to consumers.
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 or customers. In the United States, trade secret law is primarily handled at the state level under the Uniform Trade Secrets Act, which most states have adopted, and a federal law, 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, , 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.) Trade secret law varies from country to country.:150–153
The stated objective of most intellectual property law (with the exception of trademarks) is to "Promote progress." 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". 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.
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. Some commentators, such as David Levine and Michele Boldrin, dispute this justification.
In 2013 the United States Patent & Trademark Office claimed 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. 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”.
The WIPO treaty and several related international agreements are premised on the notion 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.
Economists estimate that two-thirds of the value of large businesses in the United States can be traced to intangible assets. "IP-intensive industries" are estimated to generate 72 percent more value added (price minus material cost) per employee than "non-IP-intensive industries".[dubious ]
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."
Economists have also shown that IP can be a disincentive to innovation when that innovation is drastic. IP makes excludable non-rival intellectual products that were previously non-excludable. This creates economic inefficiency as long as the monopoly is held. A disincentive to direct resources toward innovation can occur when monopoly profits are less than the overall welfare improvement to society. This situation can be seen as a market failure, and an issue of appropriability.
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". Although the relationship between intellectual property and human rights is a complex one, 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.
Various moral justifications for private property can be used to argue in favor of the morality of intellectual property, such as:
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".
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.
Unauthorized use 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, jurisdiction, and the nature of the action.
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 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. 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).
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". While copyright is created the instance a work is fixed, generally the copyright holder can only get money damages if the owner registers the copyright. Enforcement of copyright is generally the responsibility of the copyright holder. The ACTA trade agreement, signed in May 2011 by the United States, Japan, Switzerland, and the EU, 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. There is a safe harbor to use copyrighted works under the fair use doctrine.
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. As with copyright, there are common law rights protecting a trademark, but registering a trademark provides legal advantages for enforcement. Infringement can be addressed by civil litigation and, in several jurisdictions, under criminal law. In the United States, the Trademark Counterfeiting Act of 1984 criminalized the intentional trade in counterfeit goods and services and ACTA amplified the penalties.
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, , 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 the United States.
As of 2011 trade in counterfeit copyrighted and trademarked works was a $600 billion industry worldwide and accounted for 5–7% of global trade.
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". Stallman advocates referring to copyrights, patents and trademarks in the singular and warns against abstracting disparate laws into a collective term. Similarly, Boldrin and Levine prefer to use the term "intellectual monopoly" as a more appropriate and clear definition of the concept.
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). 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.
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, whose initials are also IP, have found supporters as well, especially among those who have used the backronym digital restrictions management.
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 and Thomas Alured Faunce.
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, 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.
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"
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.":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. 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. 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".
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. "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".: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.
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."
Another limitation 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. This definition excludes any works that are the result of community creativity, for example Native American songs and stories; current legislation does not recognize the uniqueness of indigenous cultural "property" and its ever-changing nature. Simply asking native cultures to 'write down' their cultural artifacts on tangible mediums ignores their necessary orality and enforces a Western bias of the written form as more authoritative.
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, (and in the United States, certain living organisms have been patentable for over a century)
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.
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. These doctrinal reforms have further strengthened the industry, lending the MPAA even more power and authority.
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. 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.
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