Intellectual Property by shuifanglj


									  The management and legal aspects of
Intellectual Property: Area 1 Introduction
      Ideas, innovation and their importance to the
      progression of business: Developing products

Products need to be continually progressed, or competitors may
   improve the concept and get a better product to market.
Not all progressions of a product can be easily
protected: A Hoover or vacuum with a bigger
bag cannot be patented, however a new
method of dust collection may qualify for
patent protection.
A new method of dust collection was patented
by Dyson who utilised cyclonic particle removal

negate the need for the traditional bag.
It is essential for managers and indeed all
employees to have a grasp of innovation and
the subsequent protection that is available.
However all innovation begins with an idea.
Innovation arises from ideas and these ideas

must be progressed to the market place.
Innovation in any sector is vital as a competitive
weapon, it is on rare occasion that a company
can maintain its market position without the
continued focused progression of its products.
If the product is not improved competitors can
develop new products, protect them and
subsequently begin to impinge on key markets
essential for a business to make a profit.
Innovation arises from ideas and
these ideas must be progressed
to the market place. This is not a
simple task as many factors
influence the progression and it
is rare that even a closely related
innovation will take the same
path to market. Innovation can
arise from

individual or group input and
arise in relation to all aspects of
a company.
Ideas can arise from many
different sources, ranging from
an employee idea that has
nothing to do with his key area
of work to an idea that has
arisen from many years of
expensive research and
A key management issue at this point is to
ensure the business owns the resulting
innovation rather than the employee
leaving and taking his idea with him (or

  Employer                       Employee
        Developing products (3)
The process of guiding an idea to an innovation
can be managed in many different ways
according to the specifics of the company set
up. Thoughtful and flexible management of all
aspects of the process can aid a product to

Managers have to harness this sweat equity

Innovation does not depend on a standard
uniform process; it is inherently dynamic and
Area 2 Protecting Innovation
Innovation and its protection: A introduction to intellectual property

Information, the founding basis of intangible market
drivers, is usually

expensive to create, but cheap to copy,

as competitors can copy the information and
appropriate the value of the property at a price lower
than the costs incurred by the original producers.
          Protecting innovation an
This allows the second producer to take

economic free ride,

thus removing value from the product and
impinging on the primary producer’s ability to
recoup initial expenditure costs incurred by
research and development or the “sweat
equity” incurred during testing and subsequent
  Protection innovation: must be made
                       in to property so it can be sold.

   Innovation:           With certain products value
Why is it important?    attaches to the knowledge not
                             the actual property
                            e.g. a CD music album.

                       Intangibles comprise competitive
                       differentiation in many industries.

                       Very important in global markets.
Inherent rivalry or not?
          With physical goods there is inherent
          rivalry between potential consumers

             With intangibles use does not
           physically degrade the information,
               and multiple use is enabled
                          Intellectual property
                        enables the protection of

                             intangible goods.
  Innovation:         Intellectual property rights are
How is it enabled?    distinct and separate from the
                           property rights vested
                           within tangible goods.

                     Tangible: Things that are physical
                     in nature. Intangible: Things that
                         are not physical but are
                         capable of being owned.
Area 3 The Intellectual       The IP family (1)  CONFIDE-

                                    PASSING                      DOMAIN
   property family

                                      OFF                        NAMES

                          UNREGISTERED          INTELLECTUAL
                             DESIGN               PROPERTY

                                                               TRADE MARKS

                      Oxford v Moss (1979)

      I will put it back after
        I have my evil way

Is information property?
In Oxford v. Moss, the Divisional Court had to decide whether confidential
information was "intangible property" for the purposes of the Theft Act

After considering a number of civil authorities dealing with the subject of
confidential information, Smith J. wrote (at pp. 185-86):
“we have to consider whether there is property in the information which is
capable of being the subject of a charge of theft. In my judgment, it is clear
that the answer to that question must be no.”
         What is tangible Real Property (1)
Physical property – land, money, houses,
clothes, food.
Real or tangible property is concerned with the
ownership of physical objects; the concept is
well understood in Western society, as it is
among the oldest institutions of human
According to classical theory there are two
principle elements involved in the Western

societal definition of property
           What is tangible Real Property (2)
The first concerns the attribute that it can be

purchased or sold.

The second element of property concerns the right to
exclude others. This right to exclude has a two-
principle application. It may operate against third
parties who have no rights over the property.
It may also be applicable against those who do have a
claim to the property, but one that is inferior to the
primary owners.
Physical property is expensive to create and to
reproduce; for example, houses, automobiles,
                       What is intangible property?
Intellectual property – ideas (expressed as designs, music, art, writing, dance, software).

Intellectual property is intangible.

A legal distinction is made between intangible property e.g. information contained within a
book and tangible property e.g. the book itself

Intellectual property may take a lot of effort to create (e.g. a book) but is easy to
reproduce at minimal cost.
          Intellectual verses physical (1)
Characteristics            Intellectual property          Physical commodities

                           Inherently difficult, due to   Inherently easy, as physical
Recognition of trading
                           the intangible nature of       commodities can be seen
                           the property                   and quantified

Disclosure of attributes   Relatively difficult           Relatively easy

                           Limited (patents, trade        Broad
Property rights
                           secrets, copyright, etc)

                           Often fuzzy, it is often    Generally sharp, parties
Property boundaries        difficult to precisely      usually know what physical
                           identify precise boundaries goods belong to them
          Intellectual verses physical (2)
Characteristics        Intellectual property      Physical commodities

Item of sale           In a digital format        Measurable units, e.g. 20
                       information used           books can be ordered and
                       repeatedly under license   subsequently used

Variety                Heterogeneous              Homogeneous

Unit of consumption    Often unclear              Weight, volume, etc

Inherent tradability   Low                        High
          Intellectual verses physical (3)
Characteristics    Intellectual property          Physical commodities

                   Does not wear out, but         Wears out, suffers variable
Depreciation       usually depreciates rapidly,   depreciation according to
                   due to dissemination           the type of goods

                   Hard to calibrate, data is
                   relatively easy to transfer,
                   however know how may
                                                 Easy to calibrate (depends
                   be difficult to transfer from
Transfer costs                                   on transport and related
                   one party to another
                   (transfer costs increase
                   with tacit portion e.g.
                   human interaction)
          Intellectual verses physical (4)
Characteristics          Intellectual property          Physical commodities

                         Relatively difficult,
                         enforcement varies             Relatively easy, theft is
Enforcements of rights   depending on the nature        enforced by societal
                         of the right. The burden of    controls such as the police
                         policing and prosecuting is
                         placed entirely on the
                         owner of the copyright

                         Evidence of widespread
                         social disrespect in certain   One of the oldest human
Social history
                         areas. Relatively recently     institutions
 Area 4 Copyright, Designs and Patents Act
Main legislation concerning copyright, which is the right to copy
(simple but important)

Gives details of what can be protected



It is a fairly large and complicated piece of legislation and has
over 300 sections

The Copyright Acts of 1911 and 1956 are of limited effect, but
are referred to in certain specific instances set out in the CDPA
1988.                                                               25
    What Does Copyright Protect?

Pursuant to section 1(1) of the Copyright,
Designs and Patents Act 1988, copyright subsists
original literary work
original dramatic work
original musical work
original artistic work
sound recordings


Regulates the creation and use of various
cultural goods.
What does copyright protect?
Creative media such as:

Books, Songs, Computer programs.

These are large important industries.

 Where is the   How much is this
infringement?       worth?

                               How much will
                               it cost to stop?

                                   Can I protect
                                    my work?

                          What is protected if I
                          buy the intellectual
Copyright does not exist in
       a pure idea

It must be fixed in some material form by the
author or fixed in some material form

Green v Broadcasting Corp of New Zealand

The idea/expression dichotomy
         The Copyright Act itself
             does not define

In University of London Press, Peterson J.
famously stated: “… there remains the rough
practical test that what is worth copying is …
worth protecting.”
                    Exceptions to copyright use
Fair Dealing

Non-commercial research

Criticism, review or news reporting

Drawing, taking a photograph or making a film of buildings or sculptures in a
public place

            Area 5: What are patents?
A patent is a national monopoly right which is
granted in return for the publication of the

It is the right to prevent others from using the

The right duration is usually 20 years, however it

can be extended in certain sectors.
Patents are the

most basic,                         BASIC
the most valuable,

and, to competitors, potentially

the most dangerous,

of all intellectual property, the
category which demands to be
studied above all others.
What goes into a patent?

                         Defines scope of
                         protection for invention

       Describes invention in enough
       Detail to be reproducible
       Block diagrams
              Products and processes

       Process                               Product
How to make the product                  The product itself

                      Both can be patented
    Basic Requirements for Patentability





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