7. Intellectual Property Rights

Question 1

What distinguishes intellectual property from other types of property,such as land, buildings and inventory?

8 marks

2011

Answer 1

Intellectual property is Intangible whereas physical assets are tangible

Costs of creation and reproduction.

Physical property is expensive to create and to reproduce; for example, houses, automobiles, diamonds.

Most physical property can be copied without legal repercussions, although industrial design applies to say automobiles.

Intellectual property may take a lot of effort to create (e.g., a book) but is easy to reproduce at minimal cost.

IP may not, generally be freely copied. IP is protected.

Three examples are: patents in the case of biotechnology, automatic copyright in the case of literature and registered trademarks in the case of logos

**Multi-use - **With physical property, it can only be used by one firm at a time, whereas with IP many firms could use it simultaneously.

Depreciation. Physical assets will depreciate over time (although property tends to appreciate), whereas there is no wearing out of IP. It may simply become less useful over time if new technologies overtake an existing patent.

Question 2

Registered IPRs are…

Answer 2

Trademarks - logos, smells, sounds,

Patents - inventions

Design rights - product shapes and configurations

Question 3

“He [Hawkins] believed that game publishers could get squeezed if they didn’t own the intellectual property (“IP”) behind the game”. (p.2)

a) Why would Digital Chocolate get squeezed?
b) What IPRs are important for gaming industry companies and why?

(4 and 8) 2011

Question 4

Unregistered IPRs…

Answer 4

Know-how (trade secrets)

e.g. coca-cola formula

Copyright - software, literary, research notes

Design rights - product shape and configuration

Question 5

Is a patent the strongest barrier to entry that exists?

[8 Marks]

2010

Question 6

a) How can intellectual property be protected for a social
networking business, like Facebook?

b) Is intellectual property protection important for a social
networking site?

[4 and 8 marks]

Answer 6

a)

• Invention of site protected by patent, lasting for 20 years
• Anyone producing similar sites can be brought to court by facebook and the company can recieve damages
• Facebook logo protected by trademark

b)

• Yes
• It protects the site’s competitive advantage
• Attracts investors as idea is unique + protected
• The site may also want to take measures to protect its user’s intellectual property as social networking is all about sharing information.

Question 7

What are patents?

Answer 7

Definition:

A patent is an exclusive legal right
granted for an invention that is:
 New
 Involves and inventive step (non-obvious)
 Is capable of industrial application

Duration: 20 years from filing date

Patent market is estimated to be worth $100bn annually

A strong set of patents can discourage competitiors and attract investors

Different types of patents:

Design - new, original, nonobvious designs for articles of manufacure

Utility - new, useful, nonobvious manufacturing processes and machines

Business method - utility e.g. amazon

Licensing:

The author may authorise others to use the invention through granting a license and recieving royalties

At IBM, patents and licenses represent 15% of revenues

Misuse:

If anyone uses the patented IP without a license, the patent holder can bring the case to court

But it is the responsibility of the patent-holder to protect their patent so must have a strategy to monitor its use and label the patent

Question 8

What is a patent pool?

Answer 8

an arrangement among multiple patent holders to
aggregate their patents

Question 9

Examples of patents

Answer 9

1902 - Gillette disposible razor

1974 - Stanley Cohen and Herbert Boyer gene splicing technology has earned over $250m

Dell computers has 77 patents protecting its built-to-order business method

Amazon has patent for one-click buying method patent (controversial)

Question 10

What is copyrighting used for?

Answer 10

= the right of an author to prevent others from printing, copying or publishing any of his/her original work

The life of a copyright is the life of the author + 70 years

Relates to the form of expression and not the subject matter (i.e. the ideas may be used elsewhere)

books, music, plays, art

Must be:
 Original
 Skill involved
 Permanent form (not just an idea)
 Author qualifies for protection
Unregistered right
Arises automatically

Question 11

What are trademarks?

Answer 11

Any distictive word, name, symbol, slogan, shape, sound or logo that identifies the source of a product or service.

Once a trademark it registered, the owner can bring legal action to any infringement use and recieve damages

Duration: 10 years and can be renewed indefinitely

Question 12

Registered and unregistered designs

Answer 12

Protects the appearance of the whole product or its part, in particular contours, shape and texture

In Europe registration (£60) might last up to 25 years, subject to renewal every 5 years (£130-£450)

Question 13

Advantages and disadvantages of patents

Answer 13

+

• A firm can maintain is competitive advantage
• Encourages R+D
• Attracts investment
• Licenses can be sold to generate revenue

-

• Expensive to monitor/regulate/maintain
• The cost of the patent may out-weigh the financial advantages of the invention.
• Inventors may choose to capitalise on inventions that could benefit the wider public, such as a new low carbon emitting energy source, rather than allowing the inventions to be used widely.