Session 17 - Intellectual Property Rights

Student Handouts Prof.
Henry, ISG
International Business Law and Its

Environment, 10e
Chapter 17
Protection and Licensing of
Intellectual Property
© 2018 Cengage. All Rights Reserved. 1
Introduction
• Companies build intellectual property

portfolios to build a better bottom line
• Google buys Motorola with 17000 patents
• A patent gives company monopoly rights
• Kodak sells patent portfolio for $525M
• Litigation for infringement can end up
invalidating a patent
Intellectual Property 1
Student Handouts Prof. Henry, ISG
Litigation
• See Apple Inc v Samsung Electronics

Co. Ltd (2013) case
• Jury award of $1 billion challenged by both
parties
• Judge reduces award and urges Parties to
appeal
• Judge orders new trial on half of damage
awards
Reasons for Intellectual Property

Transfer Agreements
• Grant a license (royalty) for intellectual

property right (IPR); limited permission
• U.S. provide IPRs to foreign manufacturer
which then reexports to U.S.
• Transfer technology for sharing in joint
venture
Intellectual Property Rights:

Transfer Arrangements
• Right to Use and Conditions of Use

• Geographical restriction: within a nation is
common. Field of Use restriction: limits use
and applications. Output Restrictions
• Competitive Circumstances
• Licensee may demand exclusive rights in
exchange for investment
• Confidentiality and Improvements
International Protection (Slide 1 of 8)
• Paris Convention (1883)

• First international intellectual property
treaty
• National treatment for foreign
applications (TRIPS agreement now
provides enforcement mechanism)
• Patents
• 1970 Patent Cooperation Treaty-
streamline application procedure, files
international claim with WIPO
• Scope of Patentable Subject Matter: See
the Diamond v. Chakrabarty (1980) case
in which the Supreme Court allowed
patent for living organisms
• Trademarks
• Since 1996, EU Community Trademark
Regulation
• Madrid Protocol: centralized filing for
trademarks, WIPO enforced, U.S. has not
signed
• European Union Intellectual Trademark Office
(EUTM)
• Domain Names
• ICANN adopted Uniform Domain Name
Dispute Resolution Policy
• Complaints submitted electronically to WIPO
• See the Mobile Communications Service v.
WebReg, RN (2006) case; respondent
registered domain name in bad faith
10
• Copyrights: Berne Convention

• National treatment but does require
MINIMUM substantive laws
• Copyright symbol and date provides
protection all over the world
• WIPO Copyright Treaty: (2002): computer
programs are protected as literary work
11
• Copyrights: Berne Convention (cont’d)

• See the TVBO Production Limited v.
Australia Sky Net Pty Limited (Australia,
2009) case; defendants were guilty of
copyright infringement by retransmission
12
• TRIPS (effective Jan. 1, 2000)

• Requires every member of WTO to abide
by Paris and Berne conventions
• Seeks to remedy some of the weaknesses
of the Berne and Paris conventions:
• Sets minimum standards of protection from
member nations
• Enact provisions consistent with TRIPS 
13
• TRIPS (cont’d)
• 20 year patent- all fields of technology, new,
involving an inventive step (non-obvious) and
are capable of industrial application
• Problems: escape clause- to protect order,
public morality, human or animal or plant life
or to avoid serious prejudice to the
environment
14
Doha Declaration on TRIPS

and Public Health (Slide 1 of 4)
• The Declaration provides for the
extension of the transition period until
January 1, 2016 during which least
developed countries would be exempt
from providing patent and trade secret
protection for pharmaceuticals 
15

• 2003 TRIPS council allowed any WTO
member country to export
pharmaceuticals made under
compulsory licenses; Many problems!
• War of “Geographical Indications”
• A “mark” in one nation may be a generic
in another 
16

• War of “Geographical Indications”
(cont’d)
• Standardization is slow, and requires factual
analysis and context
• See the New Zealand-Comite Interprofessionel
due Vin de Champagne v. Wineworths Group,
Ltd. (1991) case; prohibited use of word
“champagne” in New Zealand
17

• Geographical Indications under the
Doha Development Agenda:
• (a) Create a multi-register for wines and
spirits
• (b) Extend the higher or enhanced level
of protection accorded to wines and
spirits under TRIPS to other products
18
Nonenforcement of IPR Laws
• TRIPS mandates what each member’s

laws must say
• But it is one thing to enact laws, but
another to enforce them
• Non-enforcement of TRIPS was a problem,
resulting in restricted technology transfer. So
countries ultimately signed TRIPS
19
Mechanics of IPR Transfer Regulations
• Prior Approval Schemes

• Notification-Registration Schemes
• Risks?
20
The Gray Market
• Licensor sells to licensee who sells to

buyer who re-imports to compete with
original licensor
• Stimulated by international currency fluctuations
• See the A. Bourjois & Co. v. Katzel (1923) case.
U.S. Supreme Court granted injunction to protect
the trademark and stop importing similar French
products
21
Franchising: Licensing Outside

the Technological Context
• Observations
• (1) Exclusive rights, marketing quotas,
franchisors balancing interests
• (2) Trademark Protection
• (3) Competition Laws
• (4) Repatriating Profits
• (5) Franchise Tax Laws
• (6) Language Politics
22
Antitrust Considerations
• See the CSU et al. v. Xerox Corporation (2000)

case
• Xerox refused to sell patented parts and license software
• Antitrust laws do not exclude patentees rights to exclude
others
• Defendant must either prove the patent was obtained
through fraud OR demonstrate the infringement suit is on
a sham to cover interference with a business relationship
with a competitor
23
Conclusion
• Licensing permits a firm with IPR to

increase revenues
• But local legislation my supersede the
“law” of the franchise contract
• TRIPS should greatly standardize and
improve inconsistencies among
members
24

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Student Handouts Prof.

International Business Law and Its

© 2018 Cengage. All Rights Reserved. 1

© 2018 Cengage. All Rights Reserved. 2

• Companies build intellectual property

© 2018 Cengage. All Rights Reserved. 3

• See Apple Inc v Samsung Electronics

Reasons for Intellectual Property

• Grant a license (royalty) for intellectual

© 2018 Cengage. All Rights Reserved. 5

Intellectual Property Rights:

• Right to Use and Conditions of Use

International Protection (Slide 1 of 8)

• Paris Convention (1883)

© 2018 Cengage. All Rights Reserved. 7

International Protection (Slide 2 of 8)

International Protection (Slide 3 of 8)

International Protection (Slide 4 of 8)

© 2018 Cengage. All Rights Reserved. 10

International Protection (Slide 5 of 8)

• Copyrights: Berne Convention

International Protection (Slide 6 of 8)

• Copyrights: Berne Convention (cont’d)

© 2018 Cengage. All Rights Reserved. 12

International Protection (Slide 7 of 8)

• TRIPS (effective Jan. 1, 2000)

International Protection (Slide 8 of 8)

© 2018 Cengage. All Rights Reserved. 14

Doha Declaration on TRIPS

© 2018 Cengage. All Rights Reserved. 15

Doha Declaration on TRIPS

Doha Declaration on TRIPS

© 2018 Cengage. All Rights Reserved. 17

Doha Declaration on TRIPS

© 2018 Cengage. All Rights Reserved. 18

Nonenforcement of IPR Laws

• TRIPS mandates what each member’s

© 2018 Cengage. All Rights Reserved. 19

Mechanics of IPR Transfer Regulations

• Prior Approval Schemes

© 2018 Cengage. All Rights Reserved. 20

The Gray Market

• Licensor sells to licensee who sells to

Franchising: Licensing Outside

• See the CSU et al. v. Xerox Corporation (2000)

© 2018 Cengage. All Rights Reserved. 23

• Licensing permits a firm with IPR to

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