International Intellectual Property – Fall 2013
Introduction
1. Scope and Approach p. 1-15
a. Intellectual Property Rights
i. Exclusive rights in creations of the mind
ii. Territorial in nature, emanating from national law and typically apply only to conduct within that nation à If you have a US patent, you would still need to file for patents in other countries to get protection there
iii. Treaties and agreements establish minimum standards
1. Includes national treatment, under which countries are obligated to extend to foreigners IP rights that are no less favorable than those granted to a country’s own nationals
b. International Intellectual Property: System of international treaties and legal institutions that both facilitate the acquisition and recognition of such rights and that establish uniform obligations on the part of nations to follow minimum standards in the area of IP
i. Two types of law:
1. National law
2. International and Multilateral Treaties
ii. WTO à TRIPS
iii. Also have to look at national IP laws of countries that seek, as members of international IP treaties, to create ways for the international protection of IP
iv. IIP necessary due to 7-fold increase in international trade resulting from factors such as ease of travel, advances in communication, and ability to ship goods
2. Philosophy behind Intellectual Property
a. Theories
i. Lockean Labor Theory – I put my labor into this, I should get something back
ii. Utilitarian Theory – All boats rise together
iii. Economic Theories – Countries do better if they have IP laws
1. China has blown this idea out of the water as they’ve thrived without IP laws, but as people in China begin innovating, they will want IPRs
iv. These theories are balanced against public health, societal welfare, and the dignity of people
b. Incentive-based Rationales
i. Incentive to invent
ii. Incentive to disclose (disseminate knowledge because you got reward)
iii. Incentive to innovate (commercial invention leads to downstream products)
3. Why has Intellectual Property gone “International”?
a. Globalization, International Trade, and Multi-National Enterprises
i. Impetus for many of the first international IP treaties was to ensure IP protection abroad and open up foreign markets
ii. Underlying lying reason IP plays such a big role in private international business and commercial transactions is globalization
1. Globalization: Relatively free movement of people, goods, money, services, and technology around the world
2. Several important factors drive the process of globalization:
a. Political and legal reform
i. World divided between free market capitalism and socialism
ii. During this period, free trade occurred principally within Western developed countries
iii. Fall of Soviet Union resulted in trade barriers collapsing
iv. Free market capitalism has emerged as the dominant economic model in the world today
b. International trade and multinational enterprises (MNEs)
i. Four principal channels of international trade:
1. Trade in goods
2. Trade in services
3. Knowledge and technology transfer
4. Foreign direct investment (FDI)
ii. Multi-lateral world trading system has grown with implementation of GATT and WTO
iii. Technology transfer: Process by which an owner of technology protected by some form of IP will authorize use of those rights to another
1. Such a transfer can be absolute (complete assignment) or limited (license)
iv. FDI: Acquisition by an entity resident in one nation of a permanent or lasting interest in an entity resident in another nation
v. IPRs play significant role in facilitation of all channels of international trade
1. Sellers of goods are more likely to sell to a nation that has strong regime protecting IPRs
2. Owner of technology is more likely to transfer technology where the recipient nation has a strong legal regime protecting IPRs
vi. Largest MNEs are larger than many countries
vii. MNEs dominate in the transfer of knowledge and technology on a worldwide basis and drive the world’s innovation process as they have the resources to engage in research and development critical for innovation
c. Technological advances
i. Advances in technology facilitate globalization which in turn fuel pressure to secure IP protection internationally
ii. Ex: advances in transportation, travel, communication
b. Intellectual Property, Developing Countries, and Economic Development
i. Bulk of world’s intellectual property comes from developed countries, home to most of the world’s MNEs
ii. Different attitudes toward IP exist among developed and developing nations
1. Developed nations are interested in deriving full economic benefits from their innovation, knowledge, and technology while protecting their interests through strong IP laws
a. Strong IP laws protect the investment of significant resources in developing their products
b. IP protection makes a developing country attractive place to do business
i. Global competitiveness in all of the four major channels of trade is tied directly to the level of technology involved
ii. Rate of export is significant indicator of competitiveness
iii. The more competitive the nation, the more its exports will be attractive to buyers from other nations around the world
iv. Every nation is interested in increasing the level of its technology to boost its exports and become or remain competitive
2. Developing countries, by comparison, tend to favor weaker IP protection
a. Developing nations argue that they need access to advanced technology and knowledge, which are necessary tools for industrial development, modernization, and competitiveness in the modern world economy
b. IP laws are used by MNEs and developed nations either to deny access altogether to advanced technology or to limit access by imposing burdensome royalties and licensing fees
4. Brief Overview of US Intellectual Property Laws p. 77-83
a. Copyright
i. Bundle of exclusive rights granted to authors for their creative expression
ii. Basic source of federal copyright law is Copyright Act of 1976
1. Section 102: copyrights granted to all original works fixed in a tangible medium of expression
2. Available for literary works; musical works, including accompanying words; dramatic works, including any accompanying music; pantomimes and choreographic works; pictorial, graphic and sculptural works; motion pictures and other audiovisual works; sound recordings; and architectural works
iii. Originality is most fundamental requirement
1. Not a statutory requirement, but a constitutional requirement under the Copyright and Patent Clause
2. Art. I, Sec. 8, Cl. 8 grants Congress authority “[t]o promote the Progress of Science and useful Arts by securing for limited Times to Authors and Inventors the exclusive Rig
“use in commerce” application or “intent to use” application
iv. Registration also allows TM owner to seek federal remedies for TM infringement or dilution
ii. Unfair competition may mean different things in different countries, but in common law countries (US/UK), unfair competition originated from the cause of action for “passing off” of another’s trademark – thus making consumer confusion with respect to trademarks the principal worry of unfair competition
d. Trade Secrets
i. Company must take steps to protect; has economic value
ii. Provide an alternative to patents in a way that is almost opposite to patents
1. Can last indefinitely, but require the nondisclosure or secrecy of the underlying know how
2. Predicated, therefore, on the trade secret holder undertaking reasonable secrecy measures, such as requiring nondisclosure or confidentiality agreements
iii. Until recently, governed solely by state law, but more than 40 states have adopted the definition of trade secret under Uniform Trade Secrets Act:
1. “Trade Secret” means information, including a formula, pattern, compilation, program, device, method, technique, or process that (i) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy
iv. Can invoke protection of trade secret law without any formality or application
v. Two general ways someone can breach a trade secret:
1. A breach of a duty of confidentiality, an issue that arises frequently with departing employees; and
2. Engaging in improper means to steal the trade secret, such as theft, espionage, or other forms of skullduggery
vi. Does not protect from others trying to independently devise the trade secret on their own or reverse engineer the trade secret
5. International Legal Institutions p. 49-66
a. The World Trade Organization
i. History and Evolution of the WTO from GATT
1. Created in 1994 and is the most important international body for IP today
2. Administers three principle agreements:
a. The General Agreement on Tariffs and Trade of 1994 (GATT 1994 vs GATT 1947)
b. The General Agreement on Trade in Services (GATS)
c. TRIPS
3. Administers the Dispute Settlement Understanding (DSU) which provides, for the first time, an effective dispute settlement process for international trade disputes
4. Developing nations feared that including IPRs within WTO framework would favor developed nations, but not them
a. Wanted to keep IP within jurisdiction of the WIPO because they felt it would be more receptive to needs of developing countries as a specialized agency of the United Nations
b. Three reasons developing nations favor WIPO:
i. GATT was viewed as “rich nations’ club”
ii. GATT was organization that concerned trade and commerce whereas WIPO was solely dedicated to IP
iii. WIPO could not enforce much and developing countries didn’t have to worry about complying with IP treaties
