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Intellectual Property Rights (PREVIOUS EXAM QUESTIONS #, ANSWERING…
Intellectual Property Rights
PREVIOUS EXAM QUESTIONS
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ANSWERING QUESTIONS
Within the question (IPR), you should address the following:
Explain what intellectual property is
Explain how IP can be protected
Explain why a business should protect IP? What are the benefits of this?
How can we protect IP?
Formal methods: patents, copyright, trademark, non-disclosure agreements
Informal methods: complexity/modularity, secrecy, lead time/time to market
Benefits of protecting IP...
If business do not protect IP:
Legal concerns, cannot develop the idea freely
Loss in revenue/market share (Microsoft said that in 2014, pirated software cost business $491 billion in losses)
Loss in competitive advantage
Entire business may fail if the idea gets copied during early stages
Additional benefits:
Royalties can be earned by licensing patents
Money can be made by selling patents/designs
Patents enhance a business' market reputation as an innovator in the case of SMEs and start-ups
Patents help SMEs/start-ups gain funding/investment
Patents can be used as a performance indicator
Trademarks are symbols of quality and safety
Within the question (patent databases), you should address the following:
What are the different patent databases?
What are the different ways in which a patent database can be exploited?
Some of the patent databases
: United States Patent and Trademark Office (USPTO), European Patent Office (EPO), Japan Patent Office (JPO)
Use of patent databases:
To file for patents
To make sure you are not violating others' registered IP
"Patent landscaping" - analyse the database to see what your competitors are doing
"Copying the innovation" - patents can contain specific information regarding the innovation, enough to recreate the invention using the given information if you're smart enough
Finding potential partners - find individuals/organisations (e.g. universities) who are specialised in the area you're interested in
Finding potential patents that could be licensed/bought
Patents as a performance indicator
IPRs are legally enforceable rights over the expression or use of ideas (not the ideas themselves)
Exclusive rights: rights to exclude others from their use
Usually of limited duration (except trademarks etc.)
They can provide a 'temporary monopoly' over the use of a new idea
Civil legal rights, enforceable within jurisdiction, but with many international agreements
Types of IP: patents, copyrights, trademarks, performance rights, confidential information/trade secrets, registered designs, design rights, other
sui generis
(unique) rights e.g. plant and seed varieties
The economic and social purpose of intellectual property rights is to encourage creative activity, which benefits all of society: inventions, books, music, films, designs etc.
Though they may give an undesirable degree of market power to a firm (monopoly power), they allow creators to appropriate the results of their work, so give inventors the incentive to invest resources in creative activities which would not otherwise take place:
Economists consider that they correct the market failure of 'non-appropriability'
They are a trade-off between rights of creators and rights of the community
Sometimes these compromises are contested in court e.g. competition law vs IPR (Microsoft vs. US Dept of Justice)
IPRs have become controversial:
Disagreement over their impact on innovation (patent trolls)
Moral and ethical implications (pharmaceuticals, genetic patenting)
Use as a weapon of international trade (WIPO)
Why are IPRs important for business - they may bring competitive advantage...they may:
Allow you to appropriate the results of your innovative/creative activities
Enable you to prevent competitors from using your ideas, so can reduce competition
Allow you to have control over a market (price setting power = higher prices?)
Give some market power
Identify your company (give customers confidence in quality and design)
Become very valuable intangible assets in themselves
Justify spending and resources on R&D or other investments
Be valuable in negotiating collaboration
Attract venture funding
BUT they may enable other companies to restrict your activities and cost your company significant sums in infringement awards
In order to be patentable, an invention must fulfil 3 conditions:
Novel
- the invention must be new, must never have been made public in any way, anywhere in the world before the date on which an application for a patent is filed
Non-obvious
(involve an inventive step) - when compared with what is already known, it would not be obvious to someone with a good knowledge and experience of the subject ('state of the art' in the USA)
Capable of industrial application
- the invention mush take the practical form of an apparatus or device (a product such as some new material or substance, or an industrial process or method of operation
Overlap of IPRs (in law):
A confusing aspect of IPRs is the extent to which they can overlap e.g. software can in certain circumstances (and jurisdictions) be patented, but is usually protected by copyright in most jurisdictions
Multiple IPRs - a product may be protected by a complex set of IPRs, they are not mutually exclusive
What is the business justification for patenting an invention:
To appropriate benefits accruing from the invention/repay investment costs
To prevent others from using the invention
To prevent any use of an invention (but remember non-use limitations)
To surround a competitor's patent for competitive reasons (patent flooding)
To intimidate competitors
To assist in attracting investment funds/venture capital
To achieve bargaining power in the industry
Internal company targets
"In today's knowledge economy, intellectual property rights are essential". Using examples, explain why you agree or disagree with this statement. (2014)
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Why have intellectual property rights become a prominent issue for company strategy. Discuss this, using suitable examples. (2015)
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Intellectual property rights are now an essential component of business strategy. Explain why this is the case, and illustrate using examples. (2016)
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How can businesses use patent databases to help manage their activities? (2016)
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Intellectual property rights are an essential component of business strategy in many product markets. Explain why this is the case, and illustrate using examples (2017)
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How can patent databases inform managers about their strategies? Discuss this using examples. (2017)
Business patenting decisions: should you patent an invention?
Most patents are never utilised - an estimated 95-99% of patents do not recover their costs (writing the application, application fees (where applicable), renewal fees, litigation, insurance etc.)
Arguments for patents
A definite period of exclusivity
Establish ownership
Protection against reverse engineering
Prevent others filing first
May be valuable in negotiations
Clarify collaboration agreements
Motivate inventors/a sign of achievement
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Arguments against patents
Expensive to obtain
May offer weak protection
Expensive to maintain, monitor and enforce (litigation)
Limited life (secrets can be kept indefinitely)
Timing of disclosure cannot be controlled