Post on 01-Apr-2015
Nature and role of intellectual property
Lecture outline: •Introduction to the topic•Why are Intellectual Property Rights awarded? •Main types of intellectual property
• Patents• Trade marks• Designs and utility models• Copyright
•Alternatives to IPRs•Questions for discussion
Introduction
• Range of issues can be discussed, including– Historical development – Recent controversies (see Chapter 11 and/or)
• http://www.scienceprogress.org/2009/01/patent-reform-101/• http://www.law.duke.edu/boylesite/ip.htm• http://en.wikipedia.org/wiki/File_sharing• http://www.wto.org/english/tratop_E/TRIPS_e/trips_e.htm
Why are patents awarded?• Incentive to invest in innovation
– Note: invention may occur without monetary incentives (due to human curiosity), but an innovation requires investment
• Patents balance the need to provide incentives with the introduction of market failure (i.e. high prices of non-rival good)– Have patent protection for up to 20 years, then
knowledge/innovation can be exploited by all
Illustrating the role of patents• Figure 2.1 shows a drastic process innovation
– Patent owner now has monopoly (sets high price compared to marginal cost, and restricts quantity)
– BUT, price is lower than previous price (pre-innovation), hence society wants innovation.
– Society would also like lower prices (P=MC), and this happens when patent protection expires (normally after 20 years)
• Note: the above logic applies for all product and process innovation, but easy to illustrate with drastic process innovation
Figure 2.1 A drastic process innovation
Q1
Price (p)Costs
quantity (Q)Q*
P1
P2
D
a b
c d
e f g MC2=AC2
MC1=AC1
MR
P3
Q2
Patents• What can be patented?• How to get a patent?• Dimensions of patent• Markets for patent rights• Who uses patents most?(Above are sub-headings in Chapter 2 and summary of
material can be found there)May also want to illustrate some famous patents and/or
specifics of own country (see below for sources)
Top patentees at US Patent Office and European Patent Office
US Patents (grants) 2006 EPO (grants) 2006
IBM 3,621 Phillips 4,425
Samsung 2,451 Samsung 2,355
Canon 2,366 Siemens 2,319
Matsushita 2,229 Matsushita 1,529
Hewlett-Packard 2,099 BASF 1,459
Intel 1,959 LG Electronics 1,214
Sony 1,771 Robert Bosch 1,093
Hitachi 1,732 Sony 1,088
Toshiba 1,672 Nokia 882
Micron 1,610 General Electric 768
Further information on patents
• US: http://www.uspto.gov– http://www.uspto.gov/web/offices/ac/ahrpa/opa/kids/kidevents_press.html
• UK: http://www.ipo.gov.uk– http://www.ipo.gov.uk/types/patent/p-about/p-funandgames/p-map.htm
• European Patent Office: http://www.epo.org/– http://www.epo.org/topics/ip-webguide.html
• World IP Office: http://www.wipo.int• Patent scoreboards (national offices and also
http://bwnt.businessweek.com/interactive_reports/most_innovative/
• There are many on-line resources, including free patent searches (e.g. http://www.patents.com/)
Trademarks• What can be registered?• How is a trademark obtained?• Length, breath and geographical coverage• Markets for trademarks• Who uses trademarks most?(Above are sub-headings in Chapter 2)Further information can be found at national IP office web-
sites. Note also that ‘brands’ are worlds most successful trademarks (see : http://www.interbrand.com/best_global_brands.aspx or
BrandFinance)
Top trademarkers in the US and Europe
Mattel 639 Glaxo 154
Deutsche Telekom 429 L’Oreal 138
Novartis 134 Novartis 135
American Int’l AIG) 126 El Corte Ingles 127
Disney Enterprises 120 Barilla G. e R. Fratelli Società per Azioni
115
Proctor and Gamble 117 Bristol-Myers Squibb 106
Mars 101 Proctor and Gamble 105
IGT 96 Viacom International 104
Beautybank 93 Lidl Siftung 87
US Trademarks (registered)
2006 EC trademarks(registered)
2006
Nedboy, Robin 90 Sony 76
Proportion of firms applying for IPRs by sector (large firms in UK,1996-2000)
Sector No. firms in sample
U.K. Trademarks
CommunityTrademarks
U.K. Patents EPO Patents
1 Agriculture/Mining 67 0.19 0.12 0.21 0.12
2 Manufacturing 640 0.67 0.55 0.40 0.35
3 Utilities 26 0.85 0.62 0.50 0.42
4 Construction 89 0.39 0.22 0.22 0.09
5 Finance 191 0.52 0.26 0.05 0.06
6 Real Estate 112 0.22 0.12 0.03 0.01
7 Wholesale 181 0.52 0.33 0.12 0.07
8 Retail 132 0.75 0.40 0.08 0.05
9 Hotel/Catering 54 0.65 0.35 0.06 0.00
10 Transport/Comm. 115 0.57 0.43 0.10 0.05
11 Bus. Services 259 0.57 0.43 0.08 0.06
12 Other Services 188 0.56 0.37 0.10 0.12
Other IPRs
• Designs and utility models - Section 2.5 discusses these - Next table illustrates use of designs
• Copyright (see section 2.6)– Copyright, and specifically the file sharing issue,
may be a key issue for students– Hence, could be that copyright issues is developed
in separate lecture and/or as an assignment (some readings for students at end of lecture outline)
UK Top Ten IPR Scoreboard 2003UK PATENTS UK TRADEMARKS UK DESIGNS
NEC
209 GLAXO GROUP 118 ORIENTAL WEAVERS
90
HEWLETT PACKARD 196 UNILEVER 104 TY INC 90
SAMSUNG
177 NATIONAL LOTTERY
87 MAINETTI 72
SCHLUMBERGER
172 BRITISH TELECOMS
82 KEEL TOYS 47
IBM
171 ICI 80 NIKE 44
BAKER HUGHES
120 WESTWOOD CONSULTING
59 WITHIT 38
ERICSSON 115 EMBRAER AERONAUTICA
58 MAYFAIR BRASSWARE
34
MOTOROLA 113 BOOTS 46 BLACK AND DECKER
33
VISTEON GLOBAL TECH.
112 GLAXOSMITH- KLINE BIO.
42 NOKIA CORP 33
FORD 100 AVON PRODUCTS 40 DEVONSHIRE STATUARY
30
Further questions about IPRs• Is patenting always the best route to protection?
– Secrecy vs. disclosure. Trade secrecy law
• Optimal patent length– Box 2.1 uses some formal analysis. This can be
extended and/or used for maths-based problem. See references in box.
• Alternatives to IPRs?– This is only briefly covered in Ch. 2, but extended in
Ch. 11. Should alert students to this issue. Could use as on-going assignment through course.
Questions for discussion
1. How does intellectual property differ from tangible property, such as a house or a car?
2. Do patents provide socially optimal incentives?3. Why do firms use trademarks?4. Should copyright be made shorter or longer than at
present?5. Why do different industries make use of different
types of rights?6. What factors influence the optimal length of an
intellectual property right?
ReferencesGeneral:Landes, W. M. and R. A. Posner (2003), The economic structure of intellectual property
law, Boston: Belknap/Harvard University Press.HM Treasury (2006), Gowers Review of Intellectual Property, Norwich: The Stationery
Office.Lerner, J. (2002). "150 Years of Patent Protection." American Economic Review 92(2):
221-25.Hall, B. (2007). "Patents and Patent Policy." Oxford Review of Economic Policy 23(4):
568-587.Copyright:Corrigan, R. and Rogers, M. (2005), ‘The economics of copyright’, World Economics:
The Journal of Current Economic Analysis and Policy, 6(3), 53-174.Lessig, L. (2004). Free Culture: How Big Media Uses Technology and the Law to Lock
Down Culture and Control Creativity. London, Penguin Press.Boyle, J. (2003). "The Second Enclosure Movement and the Construction of the Public
Domain " Law and Contemporary Problems 66(Winter-Spring): 33-74.