The deepest transformations to be ever faced by the world economy by far, has been during the last two decades. These changes have lead to an increase in the world’s commercial flow, in rhythm as well as magnitude. The substantial advancements made in the field of computing, telecommunications, biotechnology, chemistry for uses such as pharmaceutical uses among others. This has changed the productive structures of various economies, thereby leading an increase in inclination towards Intellectual Property (hereinafter referred to as IP) and its protection thereof.
From a global perspective, due to the establishment of free-trade zones, international economic and trade relations have been rapidly growing. This has resulted in increased awareness in protection of rights that come along with ones IP. According to the World Intellectual Property Organization, IP refers to creations of the mind: inventions, literary and artistic works, and symbols, names, images, and designs used in commerce. Laws governing IP form a formal mechanism by which property is established in intellectual assets.
PROTECTION OF INTELLECTUAL PROPERTY
Exclusive legal rights to use a copyright, trademark, patent or industrial design for a specified time that are a grant from the government to an individual or a firm are intellectual property rights (hereinafter referred to as IPR). The international exploitation of IP is crucial for trade, foreign direct investment (FDI) and technology licensing across borders. There has been a severe demand for a systematic change arising out of friction between the increasing need for international exploitation of intellectual assets and the territorial restraint over IPR. Countries across the globe have tried having bilateral and multilateral negotiations on IPR, which has solidified minimum required standards till an extent. The most important achievement is the introduction of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), an initiative by World Trade Organisation. (hereinafter referred to as WTO).
In an international market of any product or service, it is highly important to protect one’s patent. In certain fields, there has been development of various concepts of protections. One such protection is granted to trade secrets. Companies develop valuable industrial processes and strategies that are not patentable and maybe are not even worth patenting expenses but are more advantageous to a company if they are no revealed through the patenting process. These strategies and processes are called trade secrets. They are protected by legal liability rules against unfair expropriation. However, IP is a matter of national law and IPR that are granted in one nation are not legally recognized and enforceable in another, unless the owner takes intends to protect his IPR in a particular country.
TRADE-RELATED ASPECTS OF THE INTELLECTUAL PROPERTY RIGHTS
Trade-Related Aspects of the Intellectual Property Rights (hereinafter referred to as TRIPS), as an initiative of WTO, was a result of efforts on the part certain governments and private sector organisations to establish adequate and effective levels of protection of IPR. TRIPS also specifies mechanisms for dispute settlement, enforcement measures and transitional arrangements for WTO member countries lacking a developed intellectual property regime.The need to remove international inconsistencies is becoming more important in a bid to promote free trade and certainty. Business practice in the world today relies severely on mutuality and interdependence within the global market. However, Article 45 displays grave lack of international consistency because of its discretionary nature. Therefore, domestic laws shall be counter-balanced with this long-term strategy in place.
ECONOMIC INDICATORS OF INTELLECTUAL PROPERTY ISSUES
The economic growth of a country is likely to be directly affected by IPR by encouraging innovations is several sectors that in turn improves productivity. As previously mentioned, IPR can affect the inflows of FDI, technology transfers and trade that may intrude on growth. Studies have found the relationship between IPR protection and the level of development to a non-linear. This suggests that patent protection tends to decline in strength as economies move beyond the poorest stage into a middle-income stage in which they have greater abilities to imitate new technologies.
There exist certain economic indicators that conclusively quantify trade-related intellectual property. A national or sector trade balance is one of many indicators employed at times by the media, politicians and multiple business groups. This measure is often contradicted and agreed upon on the grounds that it is purely an accounting phenomenon and is not apt for policy purposes. While trying to measure the success of intellectual property by comparing the number of patent filings or copyright registrations in one country with others is often considered inaccurate as well.
The analysis of impact of copyright on an economy is not very clear. The position as to whether lowered or increased copyright provisions lead to the publications of more or fewer books, creation of more or less films and movies, better development of websites or pro or anti-competitive business practices will be released. It can be contended that there is at least some economic impact arising from copyright protection if we were to look at the extent to which income distribution can be considered a matter of economic policy and not an issue of social policy.
In the renowned case of First Flight Associates v. Professional Golf Co., Inc., Professional Golf manufactured and sold golf equipment under a highly recognized brand name “First Flight”. In the year 1961, Professional Golf entered into an agreement with Robert Wynn, who was to act as a foreign sales representative in Japan with no formal agency or distribution agreement. Post this, Robert Wynn incorporated First Flight Associates, Inc. (hereinafter referred as “FFA”) law to carry on the activities as per what was agreed with Pro Golf in Japan. The said parties later executed a trademark agreement that entitled FFA to use trademark “First Flight” that was ideally Pro Golf’s on golf soft goods in exchange of royalty in the year 1967.
FFA tried sublicensing the trademark, for a royalty much larger than what it was paying to Pro Golf, to another Japanese company called ‘Teito’. But when Pro Golf attempted to terminate its Japanese sales agency relationship with FFA, FFA brought a lawsuit for breach of contract against it. Under the trademark law in U.S.A, sales agency contracts are terminable at will; however, Pro Golf was not allowed to be entitled to royalties that was earned by FFA on soft goods bearing “First Flight” trademark. The reason being Pro Golf had failed to protect its rights to the use of that trademark under Japanese Law. Due to such lack of protection specially under Japanese law, their trademark was not recognized.
In India, it has been established that if a brand has not been marketed in India, its trademark that has acquired trans-border reputation. will still be granted protection in India. The jurisprudence for this being that a goodwill is not limited to a particular country. In the landmark decision delivered by the Bombay High Court, Kamal Trading Co., v. Gillette, UK Ltd., the Court duly noted that goodwill of a brand is not limited to a particular country because trade is international leading to goods being transported from one country to another. Goods are not limited to a country because their marketing strategies are often targeted globally. In NR Dongre v Whirlpool Corporation, a suit of passing off was brought by Whirlpool Corporation in order to restrain the appellants from manufacturing, advertising and selling products using the trademark “Whirlpool”. The claim of Whirlpool was based on prior user of the mark and a trans-border reputation indicating that any goods marketed with the use of the mark gave the impression of it being a good marketed by it. The Court found that the trademark “Whirlpool”, for the longest period of time had been associated with the respondents and for the same, its trans-border reputation extended to India.
It is evident that IP rights constitute one of the most significant intangible assets for businesses around the world. As aforementioned, their benefits are tangible and material; however, there are also constraints like limitation of time and space. The protection of intellectual property is essential in fostering international trade. Businesses of all countries are now operating in an increasingly competitive global marketplace. Having strong domestic and international protection of intellectual property is crucial to the relevant country’s success in that marketplace. The world has advanced; it will not shift backwards and so, IPR will remain part of mostly all international trade agreements, but varying standards when added to less discriminatory enforcements will characterize future global activity in IPR. The transformation in approach to trade-related IPR stands evidence of evolution of social, cultural and political scenarios. This means that we are moving towards a finely tuned understanding of the associations between creation, innovation and wider, more efficient, dissemination of IP.
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Submitted by Purnima Mathur