Intellectual Property (Module #6)

Limitations

restrictions

Author suggests that a recent (2015) paper showed that the costs to develop and commercialize Solvadi, the hepatitis C treatment that costs about $1,000/pill or $84,000 for a full 12-week treatment can in fact be justified when you include the costs to develop the drug.

False - the study referenced in the article did not include Solvaldi which has been a blockbuster drugs that brought in more than $10 billion in sales in its 1st year - more than the R&D costs.

Protection

protection

Originality

the ability to come up with unusual and novel ideas

Incentives

a positive or negative environmental stimulus that motivates behavior

Ever heard of Open Education Resources(OER) or Creative Commons (CC)?

"Open Educational Resources are teaching, learning, and research resources that reside in the public domain or have been released under an intellectual property license that permits their free use and repurposing by others. - William and Flora Hewlett Foundation CC licenses are copyright licenses and are legal tools that creators and other rights holders can use to offer certain usage rights to the public, while reserving other rights (instead of "all Rights reserved").

Monopoly

A market in which there are many buyers but only one seller.

Patent Thicket

A patent thicket is "a dense web of overlapping intellectual property rights that a (UTC) company must hack its way through in order to actually commercialize new technology."

Trademarks (what does it protect and for how long?)

A trademark is a type of intellectual property consisting of a recognizable sign, design, or expression which identifies products or services of a particular source from those of others, although trademarks used to identify services are usually called service marks. -> 10 years

Trade-offs

Alternatives that must be given up when one is chosen rather than another

Trade-offs of IP

Copyright Ownership Doesn't Own Up. One of the most appealing aspects of obtaining copyright ownership rights from the Library of Congress is that the process is easy and inexpensive, and there is no formal review process. ... Missing the Mark with Trademarks. ... Problems with Patents.

IP - The Creative Process

Creative Process •Production of something novel ->"Originality" - reproducing past work is not novel • •Production of something that is valuable in some way to the community ->Utility, merit, importance, uniqueness, or desirability of a product, service, process, or idea

IP and innovation - impacts of "weak or strong" IP protection

IF Strong IP Rights •May raise market value of a company •May raise cost of innovating •May benefit large firms •Firms with IP rights may threaten other inventors with litigation (i.e. patent trolling) •May result in "patent thickets" (i.e. a smartphone may be covered by 250,000 patents) •If protection too broad, increases likelihood of litigation IF Weak IP Rights: •May lower market value of a company •Not enough incentive to innovate •Reduces incentive to invest in R&D •More expensive to protect inventions •Easier for all to see and copy work and lower cost to innovate

Characteristics that warrant Classification as IP

Intellectual property: •Products of the mind or intellect that a society decides can be owned •Infinitely shareable ->If I have an idea, I can give it away and still have it •Someone can borrow, take or steal my idea and I still have it •Builds on prior knowledge ->We absorb ideas, build on them and then pass them on ->Cannot make complete claim to ideas •Fundamentally social ->Most useful when shared

WTO and TRIPS

The Agreement on Trade-Related Aspects of Intellectual Property Rights is an international legal agreement between all the member nations of the World Trade Organization.

Trade secrets (what does it protect, how, and for how long?)

Trade secrets are a type of intellectual property that comprise formulas, practices, processes, designs, instruments, patterns, or compilations of information that have inherent economic value because they are not generally known or readily ascertainable by others, and which the owner takes reasonable measures to keep secret. In some jurisdictions, such secrets are referred to as confidential information. -> 20 years

IP (1)

What is intellectual property (IP)? • Creations of the mind protected by law How does it relate to trade and competition?What is a patent? •an exclusive right granted for an invention •provides the patent owner with the right to decide how - or whether - the invention can be used by others. •In exchange for this right, the patent owner makes information about the invention publicly available

Ownership

right to hold the title, possess, use, enjoy, profit from, waste, and even destroy.

An Introduction to the Law and Economics of Intellectual

see pwp

Does IP protection incentivize or hinder innovation?

see pwp

Weak & Strong IP

see pwp

Enforcement

the act of urging or carrying out by force

Freedom

the power or right to act, speak, or think as one wants without hindrance or restraint.

Globalization

the process by which businesses or other organizations develop international influence or start operating on an international scale.

Competition

the struggle among producers for the dollars of consumers

Penalties for copyright infringement

•Fines - actual damages and penalties •Injunction to stop infringing acts •Impounding of illegal works •Jail

Copyright (what does it protect and for how long?)

•Form of protection •Granted by law •Covers original works of authorship •Works must be fixed in a tangible form •Do not need to register BUT must register if you want to claim infringement •Covers published and unpublished works •A copyright is based on original creation rather than whether the work is unique •Two authors may own copyright on two substantially identical works, if it is determined that the duplication was coincidental, and neither was copied from the other. -> 70 years

Regulation

government intervention in a market that affects the production of a good

The Economics of Video Piracy

"To understand effects of illegal streaming and downloading on society, need to fully comprehend why people pirate, who is pirating and the economics of piracy." Illegal downloading is a victimless crime.

Unique

(adj.) one of a kind; unequaled; unusual; found only in a given class, place, or situation

Benefits of IP - To inventor? To society?

-There are no fees associated with IP. -Ability to have a competitive edge over other similar businesses. -IP enhances your company's value. -IP helps you market your company's products and services. -You can more easily obtain financing for your business. -Greater export opportunities.

Patents (what does it protect and for how long?)

-licenses that give an inventor the exclusive right to make, use, or sell an invention for a set period of time -a government authority or license conferring a right or title for a set period, especially the sole right to exclude others from making, using, or selling an invention. -> 20 years

Drug controls, used in many different countries, can have which of the following results

A.Benefit to new drugs on the market B.Short-term savings C.Incentivizing creation of new treatments B is correct But over time If government officials make something artificially cheap, they will eventually have less of it. Demand will outstrip supply......

Innovation

An improvement of an existing technological product, system, or method of doing something.

The main point of this reading was that the high cost of obtaining a patent has only been partially offset by revenues from the sale of drugs

False: Short article reporting that in general the drugs companies are taking much higher amounts of revenue than they are investing in R&D

Ethical considerations for and against IP protection

For: -Fairness •Natural right of the individuals to own the fruits of their labor •Those who spend time and/or money in developing a product or the expression of an idea deserve a chance to receive recompense •Provided the result they achieve is useful and beneficial to users •A period of time to recoup their investment and make a profit -Societal Benefit •Society desires to encourage the creation of products, services, processes and ideas •The best way to encourage creativity and innovation is by making it possible for those who create and innovate to benefit financially from their creativity Against: -An "inventor's" thought process was shaped by the cumulative insights of his or her predecessors •A person who relies on human intellectual history and makes a small modification to produce something of great value should not be entitled to receive what the market will bear -The FDA disclosed that in recent years almost 80% of the applications were considered similar to existing products instead of representing a significant degree of novelty •Patents covering only incremental innovations are often approved by the U.S. Patent and Trademark Office •Pharmaceutical manufacturers are often rewarded for drugs that they have contributed little to develop or made only incremental change.

IP and impact of globalization

Increasing trade between countries that have very different attitudes and regulations about intellectual property •i.e China and India World Trade Organization (WTO) - rules for international commerce •Rules negotiated and signed by bulk of world's trading nations •Helps to settle disputes •1994 negotiated the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) ->First IP laws in the international trading system and still in effect today ->Countries are required to ratify TRIPS to become a member of WTO

Morality and Legality

Morality is a set of norms that a culture maintains as important for individuals to follow. In a state, legality is determined by the rulers of society, the ones who decide law. ... In other words, law is at best the legitimate consensus of the morality of the rulers of society in so far as they can govern each other.

Illegal streaming is dominating online piracy - 2016

New Report Says Music Piracy On The Rise With 17 Million Stream Rippers In 2018 •Top 30% are copying 112 files on average - equivalent to 10 full music albums •Main reason is ability to load files on devices for access to songs offline and not pay individually •Easy to find stream-ripping apps •Stream-rippers tend to be better educated and from higher income households •Recording industry estimates 40% of internet users access unlicensed music content

Pharmaceutical patents and trade

Philosophy: WTO's Trade-Related Aspects of Intellectual Property Rights (TRIPS) attempts to strike a balance The WTO attempts to strike a balance between the long-term social objective of providing incentives for future inventions and creation, and the short-term objective of allowing people to use existing inventions and creations. TRIPS provides flexibility for governments to fine tune the protection granted in order to meet social goals. For pharmaceutical patents, it allows governments to make exceptions to patent holders' rights if the right-holder does not supply the invention ( or a drug). TRIPS enables countries that cannot make medicines themselves, to import pharmaceuticals made under compulsory license.

IP - Different Kinds of Property

Property •Implies ownership and rights •Different kinds of property ->Real - ownership of land and the structures built on land ->Tangible - all those things one can touch ->Intangible - financial capital claims, e.g., stocks, bonds, money, patents, IP Property rights for IP •US Constitution grants power to Congress •State Laws

Patent Thickets

a dense web of overlapping patents that can make it difficult for firms to compete or innovate

Patent Trolls

a firm or individual that produces no products or services and owns patents only to obtain licensing fees from other firms A patent troll is an entity that acquires the patents for various technologies for the sole purpose of litigation or threatening litigation.

Is downloading really stealing? The ethics of digital piracy.

•Fundamentalist libertarians •All ideas and artistic creation should be held in common and freely accessible to all •Patents and copyrights unfairly restrict access to ideas and expression •Fundamentalist protectors •Downloading is equivalent to common theft •Owners deserve protection and financial rewards •Provides incentive for progress •Do we need new rules for new kinds of property? New business models? Do we already have new business models?

IP - Basic Definitions, Concepts and Origins

•IP protection is a means by which the law seeks to motivate and regulate human creativity •Congress enacted patent and copyright law in an effort to spur technological and artistic innovation ->Focus is on the progress of science and the arts, a benefit to the common good ->Enacted a system of rules ->Protection for a limited amount of time Different types of IP are protected in different ways: •Product, services and technological inventions are protected by patents •Creations in the fields of literature and the arts are protected through copyright •Distinctive features that distinguish one product or service from another are protected by trademark rights •Trade secrets are also considered to be types of intellectual property

Day #1 Takeaways

•Property rights - tangible property ->Real - ownership of land and the structures built on land (immoveable) ->Personal - moveable property ( i.e. cars, jewelry, equipment, inventory...) ->Titles, deeds etc. •Intellectual property (IP) - intangible property - product of the mind ->Human creativity - inventions, creations, designs..... ->Protected by: -->Patents - Technological inventions - novelty -->Copyrights - Creations in the fields of literature and the arts - originality -->Trademarks - Features that distinguish one product or service from another - distinctiveness -->Trade secrets - Information not generally known or reasonably ascertainable by others

IP (2)

•The objective of IP protection is to maximize incentive to create IP while minimizing costs of protection •The patent right is the most powerful (strongest protection) in the intellectual property system ->Enables the patent holder (patentee) to exclude all others from making, selling, or using the subject matter of a valid patent for a term of 14-20 years. •Copyrights have the most powerful remedies in case of infringement ->For copyright, it is only necessary that the work originated with the claiming author; therefore, unlike patents, more than one valid copyright can be held on identical works. ->Remedies granted the copyright owner are more powerful than those provided under any other regime of intellectual property protection - including criminal penalties.