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Nature and role of intellectual property Lecture outline: Introduction to the topic Why are Intellectual Property Rights awarded? Main types of intellectual.

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Presentation on theme: "Nature and role of intellectual property Lecture outline: Introduction to the topic Why are Intellectual Property Rights awarded? Main types of intellectual."— Presentation transcript:

1 Nature and role of intellectual property Lecture outline: Introduction to the topic Why are Intellectual Property Rights awarded? Main types of intellectual property Patents Trade marks Designs and utility models Copyright Alternatives to IPRs Questions for discussion

2 Introduction Range of issues can be discussed, including – Historical development – Recent controversies (see Chapter 11 and/or)

3 Why are patents awarded? Incentive to invest in innovation – Note: invention may occur without monetary incentives (due to human curiosity), but an innovation requires investment Patents balance the need to provide incentives with the introduction of market failure (i.e. high prices of non-rival good) – Have patent protection for up to 20 years, then knowledge/innovation can be exploited by all

4 Illustrating the role of patents Figure 2.1 shows a drastic process innovation – Patent owner now has monopoly (sets high price compared to marginal cost, and restricts quantity) – BUT, price is lower than previous price (pre- innovation), hence society wants innovation. – Society would also like lower prices (P=MC), and this happens when patent protection expires (normally after 20 years) Note: the above logic applies for all product and process innovation, but easy to illustrate with drastic process innovation

5 Figure 2.1 A drastic process innovation

6 Patents What can be patented? How to get a patent? Dimensions of patent Markets for patent rights Who uses patents most? (Above are sub-headings in Chapter 2 and summary of material can be found there) May also want to illustrate some famous patents and/or specifics of own country (see below for sources)

7 Top patentees at US Patent Office and European Patent Office US Patents (grants)2006 EPO (grants)2006 IBM3,621 Phillips4,425 Samsung2,451 Samsung2,355 Canon2,366 Siemens2,319 Matsushita2,229 Matsushita1,529 Hewlett-Packard2,099 BASF1,459 Intel1,959 LG Electronics1,214 Sony1,771 Robert Bosch1,093 Hitachi1,732 Sony1,088 Toshiba1,672 Nokia882 Micron1,610 General Electric768

8 Further information on patents US: – UK: – European Patent Office: – World IP Office: Patent scoreboards (national offices and also There are many on-line resources, including free patent searches (e.g. )

9 Trademarks What can be registered? How is a trademark obtained? Length, breath and geographical coverage Markets for trademarks Who uses trademarks most? (Above are sub-headings in Chapter 2) Further information can be found at national IP office web-sites. Note also that ‘brands’ are worlds most successful trademarks (see : or BrandFinance)

10 Top trademarkers in the US and Europe Mattel 639 Glaxo 154 Deutsche Telekom 429 L’Oreal 138 Novartis 134 Novartis 135 American Int’l AIG) 126 El Corte Ingles 127 Disney Enterprises 120 Barilla G. e R. Fratelli Società per Azioni 115 Proctor and Gamble 117 Bristol-Myers Squibb 106 Mars 101 Proctor and Gamble 105 IGT 96 Viacom International 104 Beautybank 93 Lidl Siftung 87 US Trademarks (registered) 2006 EC trademarks (registered) 2006 Nedboy, Robin 90 Sony76

11 Proportion of firms applying for IPRs by sector (large firms in UK, ) Sector No. firms in sample U.K. Trademarks Community Trademarks U.K. PatentsEPO Patents 1 Agriculture/Mining Manufacturing Utilities Construction Finance Real Estate Wholesale Retail Hotel/Catering Transport/Comm Bus. Services Other Services

12 Other IPRs Designs and utility models - Section 2.5 discusses these - Next table illustrates use of designs Copyright (see section 2.6) – Copyright, and specifically the file sharing issue, may be a key issue for students – Hence, could be that copyright issues is developed in separate lecture and/or as an assignment (some readings for students at end of lecture outline)

13 UK Top Ten IPR Scoreboard 2003 UK PATENTSUK TRADEMARKS UK DESIGNS NEC 209GLAXO GROUP118 ORIENTAL WEAVERS 90 HEWLETT PACKARD 196UNILEVER104TY INC90 SAMSUNG 177 NATIONAL LOTTERY 87MAINETTI72 SCHLUMBERGER 172 BRITISH TELECOMS 82KEEL TOYS47 IBM 171ICI80NIKE44 BAKER HUGHES 120 WESTWOOD CONSULTING 59WITHIT38 ERICSSON115 EMBRAER AERONAUTICA 58 MAYFAIR BRASSWARE 34 MOTOROLA113BOOTS46 BLACK AND DECKER 33 VISTEON GLOBAL TECH. 112 GLAXOSMITH- KLINE BIO. 42NOKIA CORP33 FORD100 AVON PRODUCTS 40 DEVONSHIRE STATUARY 30

14 Further questions about IPRs Is patenting always the best route to protection? – Secrecy vs. disclosure. Trade secrecy law Optimal patent length – Box 2.1 uses some formal analysis. This can be extended and/or used for maths-based problem. See references in box. Alternatives to IPRs? – This is only briefly covered in Ch. 2, but extended in Ch. 11. Should alert students to this issue. Could use as on-going assignment through course.

15 Questions for discussion 1.How does intellectual property differ from tangible property, such as a house or a car? 2.Do patents provide socially optimal incentives? 3.Why do firms use trademarks? 4.Should copyright be made shorter or longer than at present? 5.Why do different industries make use of different types of rights? 6.What factors influence the optimal length of an intellectual property right?

16 References General: Landes, W. M. and R. A. Posner (2003), The economic structure of intellectual property law, Boston: Belknap/Harvard University Press. HM Treasury (2006), Gowers Review of Intellectual Property, Norwich: The Stationery Office. Lerner, J. (2002). "150 Years of Patent Protection." American Economic Review 92(2): Hall, B. (2007). "Patents and Patent Policy." Oxford Review of Economic Policy 23(4): Copyright: Corrigan, R. and Rogers, M. (2005), ‘The economics of copyright’, World Economics: The Journal of Current Economic Analysis and Policy, 6(3), Lessig, L. (2004). Free Culture: How Big Media Uses Technology and the Law to Lock Down Culture and Control Creativity. London, Penguin Press. Boyle, J. (2003). "The Second Enclosure Movement and the Construction of the Public Domain " Law and Contemporary Problems 66(Winter-Spring):


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