Law Intellectual Property
The primary objective of the intellectual property regime is to reward and protect the innovation and grant the owners of the intellectual property rights (IPRs) control over their inventions / works. This includes the right to prevent the unauthorised use and entitlement to financial remuneration for the grant of a right to use.
Does this regime meet the needs of the modern society? What are these needs and where in the hierarchy of essential needs of the modern society are IPRs ranked? In answering the question, I will attempt to analyse the role IPRs play in:-
- the promotion of economic growth and well-being of the society and its members;
- encouragement of the scientific innovation;
- protection of the most valuable freedoms, such as the freedom of speech, and safeguarding the moral and public policies of the society; and
- protection of the consumers.
Whilst in some areas, such as scientific innovation IPRs are presumed to play a major role, other relationships may be more subtle and dubious, such as a naked statement that IPRs promote economic growth or protect consumers.
The main conclusion I arrived at in analysing this topic is that intellectual property law serves a number of needs and has a bundle of interlinked qualities some of which may promote the achievement of important society goals, but some of which are equally detrimental. What I also realised, is that despite the common perception that IPRs are paramount, indefeasible norms of law ranking on top of every legal systems in the developed world, the reality does not support this view. Nowadays, with an advent of important and oftentimes conflicting society policies, such as free movement of goods, fair competition and public health, intellectual property law is not a 'sacred cow' but merely a means of achieving 'a particular set of ends.'
It is also undoubtedly true that IPRs can be utilised in such a way as to erode the main advantages of their grant, such as in a case when a pharmaceutical company refuses to grant licences to its product or when the patent protection is raised to inhibit trade inside the European Union. Phillips and Firth further observe “whether one takes this assertion seriously or not (and intellectual property rights are characteristically circumscribed by rules relating to the protection of the public interest), it does indicate that intellectual property rights - in common with all other legal rights - are capable of abuse or, more accurately, of use in a manner which may be regarded as prejudicial either to competing private interests or to the public interest.”
The conclusion I arrived at is that IPRs only partially meet the needs of the society. They do hinder achievement of some important goals, especially in the economic and public health areas and the system is in need of some goal-oriented reform that would tailor the need to protect the authorship and innovation to the more important public and economic goals.
Property Law and Economic Considerations
The IPRs stem from the same body and principles of law as property law. Some of the IPRs are expressly defined as 'property'. For example, Patents Act (PA) 1977 expressly states that patents are property. This presupposes that patents can be assigned, sold, inherited or even mortgaged. Obviously, due to the terminal existence of the patent, no more than 20 years, these rights cannot be granted for a longer period but the underlying principles are the same. Similar principles apply in the context of trade marks and even copyrights, the most transient of IPRs, are defined in Copyright, Designs and Patents Act (CDPA) 1988, as a 'property right'. This is very important in understanding the roots and objectives of intellectual property law, as a lot of people perceive that IP law has much higher, almost divine, origins.
Protection of intellectual property serves a number of purposes. First, it motivates people to innovate with a view of later deriving material benefits from their work, and it guarantees these benefits will be protected under the law. Second, on a much broader scale it encourages business investment and research. It is hard to find any big world pharmaceutical or computer technology company without a dedicated R&D unit. Property and ownership rights provide firm foundation for innovation and security to have control over invented properties.
The IP law does have its distinctive features, however. In property law, the rights of full control are much stronger than in IP law - this is because intellectual property has a much wider span than plots of land and houses and is essential for the functioning of the society. Therefore, IPRs are much more susceptible to compulsory sharing such as in a case of compulsory licensing of essential pharmaceutical products or certain industry-vital computer technologies. Such orders are designed to remove the effects of anticompetitive behaviour or force the reluctant proprietor to share its technology which is vital for economic or public purposes. Another difference between IP and property law is that the latter is not subjected to the scrutiny on moral and public grounds. A sale of land cannot be immoral, a grant of patent, however, may be refused on morality grounds, as we shall see below.
The general premise is that IPRs increase the economic growth and maximise the wealth of the society. Proprietors receive material rewards (royalty payments and licence fees) for the innovations they came up with and the society benefits in the form of increased tax contributions, higher employment, investment etc.
There is not a lot of empirical evidence to take these statements for granted. Yes, it seems logical to assume that, when a technology is protected by an IPR this should serve as an increased incentive to invest in it. The facts seem to indicate, however, that IPRs are not the primary reason for investment or, if they are, it is only in a few cases that such investments turn out to be successful. In addition, considering the costs and complications of running the IP regime, there is a school of thought in favour of direct state investment as a better way to promote inventiveness.
There are also arguments that IPRs contribute to the redistribution of wealth, achievement of social justice, protection of vulnerable inventors from corporate sharks or from the pirates. The reality, however, is much more prosaic: majority of inventors are employed and it is their employers who are getting the 'wealth' of the invention. Protection of vulnerable still has some relevance in the context of copyright and artistic works although even in this area it has rather limited success as the market forces and strength still largely dictate the outcomes. Cornish and Llewelyn observe that Anglo-American tradition casts some doubt over the idea of affording special protection to authors: “[t]he attitude is part of a wider reluctance to subject the bargainings of the marketplace to higher dictates of good faith, propriety and fairness.”
A good illustration of how intellectual property rights are (rightly so) adjusted to the superior needs of the modern society is provided in the context of the European Union law. The paramount objective the EU was created to achieve is establishment of the common markets and ensuring maximum mobility within the Union borders of goods and persons. IPRs, however, by providing exclusivity and national protection to the owners are partitioning and inhibiting, rather than uniting and promoting, the Member State trade and therefore are a direct threat to the achievement of the EU objectives.
The European Court of Justice ('ECJ') realised these threats at the outset of EC jurisprudence and unequivocally gave superiority to the rules of free movement of goods and fair competition and significantly limited the unrestricted exercise of IPRs, recognising and affording Community protection to the 'specific subject matter' of the IPRs, which is a very limited concept. The ECJ drew distinction between the existence and exercise of the IPRs. Existence - a very narrowly defined concept - of IPRs is protected under the EC law. The exercise of IPRs, however, is subject to the Court's scrutiny and if it inhibits free movement of goods or distorts competition, such exercise will infringe Community law.
Although some of the elements of this approach policy can be open to criticism, the overall approach adopted by the ECJ seems to adequately resemble the weight of the underlying policies in question and correctly gives preference to the issues vital to the achievement of the key Community policies.
There are also some interesting developments in the context of standardisation process and IPRs. As such standardisation in various industries, such as electronic devices and mobile telephony, enhances inter-operability of various technologies, improves the quality of products and reduces the costs to the consumers. The way this process operates is by adopting as standards some of the (patented) technologies of the organisation's members to be incorporated in the products produced by all industry players. It is also the case, however, adoption of the technology as a standard further enhances the exclusivity of the owner, which may already be protected by a patent. This creates a powerful dominance for the owner of the standard and therefore the standard setting organisations provide for specific safeguards such as obligation to grant licences to all interested parties on fair, reasonable and non-discriminatory terms. Again, IPRs are subordinated to the achievement of an important society goal.
Advancement of Science
One objective that immediately springs to mind and which is considered to be the very raison d‘être of IPRs is that of an advancement of science. The legal protection and the rewards systems at the core of IPR should be providing an incentive for intellectuals to engage in research and innovation.
What appears to be a clear-cut assumption, however, may not be necessarily supported by the empirical studies. Some authors observe that there is not much evidence that, for example, patents, considered to be the most powerful of IPRs, provide an incentive “which leads an otherwise uninventive person to perform acts of invention.” It is also correctly observed that not every human is in a position to make scientific contribution to solving the intellectual puzzle. To this can be added that with the advent of patent system and other IPRs, the society did not see a great increase in the number of inventions compared to the times when no such regime existed. It seems that there are other motivators, such as zest for knowledge, inquisitive mind and necessity.
Another interesting observation Phillips and Firth make is that even those capable of making inventions are arguably driven to innovate by the IPR rewards - in estimated 90% of granted patents, the inventor is employed and therefore 'has' to invent.
On the other hand, the IPRs can be easily utilised in a way that will inhibit scientific research and/or misdirect the emphasis of the research into the areas offering better material rewards rather than scientific advancement. Professor Weeramantry lists “intellectual property in scientific knowledge' as a source of possible denigration of the right to share in scientific advancement and its benefit." It is also a common practice whereby industry players dedicate whole R&D units to build a stronger patent portfolio around the industry standard to reap greater licence fees completely abandoning efforts to come up with new and advanced versions of products. Another example of misdirection of efforts is presented by Napp18 where the pharmaceutical company engaged substantive efforts and preserving its monopoly and stifling competitors rather than directing its efforts on improving the products concerned.
Various Freedoms and Moral Obligations
As stated above copyrights, trade marks and patents are subject to moral and public policies. For example, important public policy of education allows deviations from the ban to copy or broadcast the copyrighted material - 'fair dealing' with a copyrighted work is allowed for educational purposes. Another allowed use of copyright is under the public right to be informed foreseen by Section 30 of the CDPA 1988. The events must be current and there must be 'sufficient acknowledgment of the source'.
Furthermore, in Service Corpn International a requested injunction claiming copyright infringement was denied because granting it would violate European Convention on Human Rights and freedom of speech.
Immoral publications are not only not protected by copyright, but also may be subject to criminal persecution under Obscene Publications Act 1959. Interestingly, the determination of what is moral and what is not develops with the society. For example, in 1916 copyright was denied on Elinor Glyn's Three Weeks (about adultery) which reads like an innocent home cooking book compared to some of contemporary literary works.
The IP law recognises the privacy rights. For example, in the context of copyrights, section 85(1) of CDPA 1988 provides that “a person who for private and domestic purposes commissions the taking of a photograph or the making of a film has” the right not to have copies of the work issued or shown to the public.
In the area of patents demands of the society necessitate that not all types of inventions should be patentable. PA 1977 provides that a patent for an invention may be granted if the invention is new, involves an inventive step is capable of industrial application, and is not 'prior art'. PA 1977 provides in section 1(3) that inventions are not patentable if their commercial exploitation would be contrary to public policy or public morality or the invention includes any variety of animal or plant, or any essentially biological process for the production of animals or plants, not being a microbiological process or the product of such a process. This incorporates Article 53 of the European Patent Convention.
Phillips and Firth observe that “so far as inventions which are contrary to public policy or morality are concerned, it is likely that any invention which causes substantial annoyance, inconvenience or danger to the physical or moral welfare of the public will be included.” They provide examples of such cases: inventions to be used in torture, inventions for causing electricity meters to under-record consumption and chemicals which have an aphrodisiac impact upon the person into whose drink they are secretly imparted.
In Harvard / Onco-mouse a number of questions arose as to what is to be regarded moral and acceptable to the society. Harvard University scientists designed a mouse, genetically pre-programmed to develop cancer. This creature was to be used in the carcinogenic research. The Examining Division of the European Patent Office found that the grant of patent is not precluded on the moral grounds, the decision that forced an outcry from a number of interest groups arguing that the patent regime is not the appropriate forum to deal with the moral, environmental and even religious issues.
These concerns are further resembled in the EC Directive on Biotechnological Inventions which extends a list of non-patentable inventions. Most importantly, this includes cloning of humans and use of human embryos for industrial and commercial purposes. Schedule A2 to the PA 1977 implements these provisions into the UK law.
Furthermore, section 4(2) of the PA 1977 provides that “method of treating the human or animal body by surgery or therapy or of diagnosis practices on the human or animal body” is not patentable. “This rule gives formal expression to a public policy favouring the dissemination of new medical techniques”. Indeed, “[t]he spectre of a single doctor reserving the performance of the most satisfactory, possibly life-saving, operation to his or her own team and extracting therefrom monopoly profits on the scale of a successful pop star seemed to put the matter beyond argument.” The same argument, however can easily be extended to pharmaceuticals, at least to those with life-saving qualities. For example, in Napp, the company held exclusive patent for the production of sustained release anaesthetic for 20 years. Yet, patent protection is granted for pharmaceutical products. This is a very problematic area, outside the scope of this work, which would require perhaps a separate discussion of lobbying and whole range of public health issues. Suffice it to say that again IPRs only partially meet the demands of the society.
Protection of Consumers
The last, but not the least area where IPRs meet the demands of the society is the protection of consumers. This is where rules of passing off, trade marks and certifications of origin predominantly come into play.
Phillips and Firth define ‘passing off' to take place “wherever one person so emulates the appearance, name, get-up or other features of another's business or trade products as to confuse the public and to lead the public to believe that his goods or business are those of the other person.”
'Passing off' protects the goodwill associated with the work and is closely related and complements as an equitable remedy the area of trade marks. These IP rights “are protected as symbols needed by consumers to distinguish between competing products and services in a market economy.” Section 10 of the Trade Marks Act 1994 prohibits to use in the course of trade, a sign identical to the trade mark or a similar mark if it creates the likelihood of confusion on the part of consumer. For example, the Viagra owner Pfizer relied on section 10 to stop the use of a sign “Viagrene” on the ‘aphrodisiac' drink that had no relationship to the drug.
Therefore, this class of IPRs serves a very important consumer protection function. “Marks deserve protection because they symbolise qualities associated by consumers with certain goods or services and guarantee that the goods or services measure up to expectations.”
Conclusion
The answer to the question must be that IPRs only partially meet the demands of the modern society. In the process of globalisation, economy arguments rank very high and IPRs, unfortunately can provide serious and oftentimes unjustified barriers to free trade and competition. Examples shown in the context of the EU exemplified the particular problems IPRs may present and the way the ECJ resolved these problems in favour of free trade and competition. Numerous problems exist in the context of public health and pharmaceuticals industries. One area where it can be said IPRs were successful is protection of consumers. This is too little however to call IPRs a success and numerous reforms need to be instituted to adjust the IP law to the needs of the modern society.
