INTELLECTUAL PROPERTY RIGHTS AND

INNOVATION

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 Basics of different types of IPRs
 Patents
 Industrial designs
 Trademarks
 Geographical Indications
THE  Copyrights

ORGANIZATION History of IPRs (Special Focus on India)

The Role of IPRs in Innovation Systems
 Economic rationale behind providing these rights
 Empirical findings
 The relevance

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Intellectual Property refers to creations of the mind:
Inventions, literary and artistic works, and symbols, names,
images and designs used in commerce.

IPRs: These cover bundle of legal instruments each of these

are different in scope, duration and with different purpose CONCEPT OF
and different effects.
IPRS
Common Element: These instruments delineate exclusive rights
to innovators over the use of his or her creation for a certain
period. Thus, IPRs owner can disclose their creation without the
fear of loss of control over their use and thus help in the
dissemination of new creations.

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 IPRs

Industrial Property Copyrights and Related

Rights

Patents Industrial Designs Trademarks Geographical Indications

Statutory IPRs Territorial Nature of IPRs

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 PATENTS
Patent is an exclusive right granted for an invention, which is a
product or a process that provides a new way of doing
something, or offers a new technical solution to a problem. In
order to be patentable, the invention must be:
New
Involve an Inventive Step
Industrial Application

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 PATENTS IN INDIA
Novelty
An invention is considered as new if it is not anticipated by prior publication,
prior use or prior public knowledge in India or elsewhere. Claimed before in
any specification in India.
Non-obviousness or Inventive step
Non obviousness predominantly used in United States patent law where as
inventive step is used in Europe. Involves technical advance as compared to the
existing knowledge or have economic significance or both and makes the
invention not obvious to a person skilled in the art.
Industrial Capability
"Invention" means a new product or process involving an inventive step and
capable of industrial application.

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PATENTS CONT…
Patent protection means that the invention cannot be commercially made, used, distributed
or sold without the patent owner's consent.
Rights of Patent Holder:
A patent owner has the right to decide who may - or may not - use the patented invention.
The patent owner may give permission to, or license, other parties to use the invention
on mutually agreed terms.
The owner may also sell the right to the invention to someone.
Once a patent expires, the protection ends, and an invention enters the public domain.
Protection is provided for 20 years.

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Patent is a statutory right to the inventor or the applicant by the government for his invention
which is either a new process or product
Limited period
Need for sufficient disclosure to the patent offices
Territorial right
Negative right

PATENTS IN INDIA
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 PATENTS IN INDIA

Inventions Not Patentable (Few Examples)

Frivolous or anything obviously contrary to well established natural law
Contrary public order or morality serious prejudice to human, animal or plant life or health or to the environment
Discovery of a scientific principle or the formulation of an abstract theory or discovery of any living thing or non-
living substances occurring in nature
A method of agriculture or horticulture
The mere arrangement or re-arrangement or duplication of known devices each functioning independently of one
another in a known way
Any process for the medicinal, surgical, curative, prophylactic, diagnostic, therapeutic or other treatment of animals
to render them free of disease or to increase their economic value or that of their products.
A mathematical or business method or a computer programme per se or algorithms

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 A patent has lived its full term

CESSATION
OR EXPIRY The patentee has failed to pay the
OF THE renewal fee

PATENT The validity of the patent has been

successfully challenged by an opponent
by filling an opposition either with the
patent office or with the courts

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File an application for In 19th month, the
patent: With one of the Examiner check the Application is kept application is published
patent offices based on formal requirements secret for a period of in the official journal –
territorial jurisdiction, before accepting the 18 month from the date this journal is made
place of office of the application and the fee of filling available on website
applicant weekly
• Pay the required fees)

Whether the claimed

Examiner undertakes invention is not Whether the invention
examination prohibited for grant of meets the criterion of
patent patentability

STEPS OF FILLING AND GRANT OF

PATENT (WWW.IPINDIA.NIC.IN)
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First examination report containing list
of objections is issued with in 6 months
from the date of filing of request

Applicants gets 12 months time to meet

the objections CONT…

If objection are met, patent is issued by

the controller- within a period of one
moth and published in official journal

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 Filling of application
Publication of Application

Request for examination

Examination issue of FER

Grant of Patent
All objection to
opposition be completed
with in 12
Decision of controller month

Appeal
Revocation/
Appellate Board Amendment
s
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 FEE
Different rates for e-filling and physical filling
Vary from Natural person, Startup, Others
Amount vary from 1600-8000
For each sheet of specification (beyond 30) and claims (beyond 10)
Fee payments at different stages; request for examination, early
examination, publication, withdrawal etc.
http://www.ipindia.nic.in/writereaddata/Portal/IPOFormUpload/1_11_1
/Fees.pdf
Renewal Fee
To be paid with in 3+6 month from date of recording in the register No
fee in the first and 2nd year
Patent lapses if renewal fee is not paid within the prescribed period

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 PATENTS IN INDIA
Provision of Compulsory License
Compulsory licensing to ensure availability of drugs at reasonable prices
Provision to deal with public health emergency
Revocation of patent in public interest and also on security consideration
A compulsory license was issued in 2012 over Bayer’s patented anticancer drug
Sorefanib Tosylate (sold as “Nexavar”) on the ground that it was exorbitantly
priced at Rs 2.8 lakhs (about USD 4500 a month) and hardly available to 2% of the
patient population. The license was issued in favour of Natco, an Indian generic
company, which then sold the drug (as “Sorafenat”) at Rs 8,800 (about USD 150) a
month.

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 TYPES OF PATENTS
GRANTED IN INDIA
An ordinary patent
oAn application for patent filed in the Patent Office without any reference to any
other application under process in the office is called an ordinary application.
A patent of addition
oImprovement or modification of the invention
A patent of convention
oConvention application refers to a patent application filed in accordance with the
terms of an international patent treaty like the Patent Cooperation Treaty.

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 Filling of application
Publication of Application

Request for examination

Third Party
Examination issue of FER
representation

Grant of Patent
All objection to be
opposition completed with in
12 month
Decision of controller

Appeal

Appellate Board Revocation/Amendmen

ts

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 INDUSTRIAL DESIGNS

An industrial design is the ornamental or aesthetic aspect

of an article. The design may consist of three-dimensional
features, such as the shape or surface of an article, or of
two-dimensional features, such as patterns, lines or color.
Industrial designs are applied to a wide variety of products
of industry and handicraft: These include:
Technical and Medical Instruments; Watches
Jewelry; Luxury Items
Housewares and Electrical Appliances; Vehicles
Architectural Structures; Textile Designs

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 An industrial design is primarily of an aesthetic nature and does
not protect any technical features of the article to which it is
applied.

Purely artistic design that cannot be applied to any utilitarian

objects are excluded.
INDUSTRIAL
DESIGNS
An industrial design must be new or original to get protection.
Generally, "new" means that no identical or very similar design is
known to have existed before.
CONT…
The duration of protection available is 10 years.

Owner of an industrial design - the person or entity that has

registered the design - is assured an exclusive right against
unauthorized copying or imitation of the design by third parties.

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 Any sign, or any combination of signs, capable of
distinguishing the goods or services of one
undertaking from those of other undertakings
constitutes a trademark.

TRADEMARKS
Such signs includes letters, numerals, figurative
elements and combinations of colours. They may
consist of drawings, symbols, three- dimensional signs
such as the shape and packaging of goods, audible
signs such as music or vocal sounds, fragrances, or
colors used as distinguishing features.

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TRADEMARKS CONT…

Certificate Marks: These

are given for compliance
with defined standard,
Collective Marks: These but are not confined to
are owned by an any membership. They
Association, whose may be granted to
Trademarks: Identifies Members use them to anyone who can certify
the commercial source of identify themselves with that the products
goods or services. a level of quality and involved meet certain
other requirements set established standards.
by the association e.g. a The internationally
Nursing Association. accepted “ISO 9000”
quality standards are an
example of such widely
recognized certification.

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 It is a sign used on goods that have a specific
geographical origin and possess qualities or a
reputation that are due to that place of origin.
These specific qualities of a product are due to:
Specific local geographical factors such as climate and
GEOGRAPHICAL soil.
INDICATIONS Human factors present at the place of origin of the
products such as certain manufacturing techniques or a
traditional production method.
Most commonly, a geographical indication
consists of the name of the place of origin of
the goods.

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 Geographical indications are used for a wide variety of
products. For example:
Tuscany for olive oil produced in a specific area of Italy.
Roquefort for cheese produced in France.
Swiss Watches
Darjeeling Tea
GEOGRAPHICAL
Nilgiri Tea
INDICATIONS
CONT… Champagne

Motivation: Geographical indications are understood by

consumer to denote the origin and the quality of products.
Many of them have acquired valuable reputation over a
period of time. If not adequately protected, these products can
be misrepresented by dishonest commercial operators.

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Action Geographical Indication Trademark
It helps consumer to… ...identify that a product is produced ..distinguish products
in a certain place and has certain of one commercial undertaking from
characteristics that are due to that that of another commercial
place of production. undertaking.

It can be used by… ..all producers who make their ..a single producer (who owns that
products in the place designated by a trademark).
geographical indication and whose
products share typical qualities.

GEOGRAPHICAL INDICATIONS
CONT…
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COPYRIGHT AND
RELATED RIGHTS
Copyright is a legal term describing rights given to creators for their
literary and artistic works.
Copyright protection extends only to expressions, and not to ideas,
procedures, methods of operation or mathematical concepts as such.
The kinds of works covered by copyright include:
Literary Works Such as Novels, Poems, Plays, Reference Works,
Newspapers and Computer Programs
Databases
Films, Musical Compositions, and Choreography
Artistic Works such as Paintings, Drawings, Photographs and Sculpture
Architecture
Advertisements, Maps and Technical Drawings

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COPYRIGHT AND RELATED
RIGHTS CONT…
Economic Rights
The original creators of works hold the exclusive right to use
or authorize others to use the work on agreed terms. The
creator of a work can prohibit or authorize:
its reproduction in various forms, such as printed publication or sound
recording;
its public performance, as in a play or musical work;
recordings of it, for example, in the form of compact discs, cassettes or
videotapes;
its broadcasting, by radio, cable or satellite;
its translation into other languages, or its adaptation, such as a novel into
a screenplay.

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COPYRIGHT AND RELATED
RIGHTS CONT…
Many creative works protected by copyright require mass
distribution, communication and financial investment for their
dissemination (for example, publications, sound recordings and
films). Thus, creators often sell the rights to their works to
individuals or companies best able to market the works in return for
payment. These payments are often made dependent on the actual
use of the work, and are then referred to as royalties.
Moral Rights
Copyright protection also includes moral rights, which involve the
right to claim authorship of a work, and the right to oppose changes
to it that could harm the creator's reputation.

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COPYRIGHT AND RELATED
RIGHTS CONT…
RightsRelated to Copyright are rights grew up around
copyrighted works, and provide similar, although often more
limited and of shorter duration, rights to:
Performing artists (such as actors and musicians) in their performances;
Producers of sound recordings (for example, cassette recordings and
compact discs) in their recordings;
Broadcasting organizations in their radio and television programs.

Copyright itself does not depend on official procedures. A

created work is considered protected by copyright as soon as
it exists.

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 INSIDE THIS REFRIGERATOR IS A WORLD OF INTELLECTUAL PROPERTY

The aesthetics elements- design of the drawers, the shelves, the style
and appearance of the temperature control- are protected as
industrial designs.
The branded food products each carry a trademark or geographical
indication, assuring the consumer of a particular quality.
Their special packaging (canned, vacuum-packed, key - opened
container) can be both patented as well as in many cases examples of
industrial designs.
The mechanical elements of the refrigerator- the part and process
that keep food cold- are patented inventions.
Even the refrigerator’s operating manual as an original written text is
protected by copyrights.
Source: WIPO (2007)
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 ERAS IN THE HISTORY OF PATENTS AND IP

Era Characteristics
1 Non-patent era Emergence of science separated from technology; Emergence of cultural and
Ancient cultures industrial arts; Secrecy and symbols emerging as recognized IP; No patent-like
rights or institutions for technical inventions

2 Pre-patent era Emergence of universities; Secrecy, copyright and symbols

(artisan/trademarks/names) as dominant IP, also collectively organized; Emerging
schemes to grant privileges and remunerate disclosure; Extensions of mining laws
to inventions

3 National patent era Breakthrough of natural sciences; Local codifications of patent laws (Venice 1474,
Late 15th - late England 1623, etc.); Regulation of privileges; Conscious stimulation of technical
18th century progress at national level, linked to economic policies (e.g., mercantilistic)

GRANSTRAND (2009) CLASSIFICATION

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 ERAS IN THE HISTORY OF PATENTS AND IP CONT…

Era Characteristics
4 Multinational patent Emergence of modern nation-states; Industrialization; Continued international
era (Late 18th - diffusion of the patent system; Local anti-patent movements; Emerging
late 19th century) international patent relations (e.g., disputes); Case of Switzerland and Germany

5 International patent Emerging industrial and military R&D; International coordination of the patent
era (Late 19th - system (Paris Convention 1883, WIPO, PCT, EPO etc.)
late 20th century) Separate IP regimes in socialist countries and LDCs; TRIPS agreement
6 The pro-patent/pro Intellectual Capital surpasses physical capital for many entities; Intensified
IP era (Late 20th international competition; Global activism for IP from industrialized countries,
century onward) especiallyfrom the US; Almost worldwide adoption of the patent system
Increased international patenting

GRANSTRAND (2009) CLASSIFICATION

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 INTERNATIONALIZATION OF IPRS

The need for international protection of IP became evident

when foreign exhibitors refused to attend the International
Exhibition of Inventions in Vienna in 1873 because they were
afraid that their ideas would be stolen and exploited
commercially in other countries.
1883 marked the birth of the Paris Convention for the Protection of Industrial
Property.
1886 Berne Convention for the Protection of Literary and Artistic Works came
into force.

National Treatment

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 Changes in the 20th Century
 International Trade
Increase in the Trade of Knowledge Goods.
Share of knowledge-intensive or high technology products in
total world goods trade has doubled between 1980 and 1994
from 12 to 24 percent ( Braga et al., 2000).

INTERNATIONALIZATION Increase in the Trade of Counterfeited Good.

OF IPRS Trade in counterfeit goods is now worth more than 5 per
cent of world trade (OECD,1998). This increase is due to:
• Advances in Technology
• Increased International Trade
• Emerging Markets
• Emerging Products that are attractive to copy such as
Branded clothing and Software
 Strategic Development of NIC’s

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 National Treatment
Minimum Standard of Protection
Definitions
TRIPS Scope/Coverage
AGREEMENT Duration
Exclusions
Other Provisions
Enforcement Issues

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TRADE RELATED TRIPs Covers 7 types of IPs

INTELLECTUAL Copyrights
Trademarks
PROPERTY Patents
Geographical Indications
RIGHTS Industrial Design

AGREEMENT Integrated Circuits

Trade Secrets
(TRIPS) Enforcement Issues

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WORLD INTELLECTUAL PROPERTY RIGHTS ORGANIZATION
(WIPO)

IPRs became part of international WIPO became a specialized agency

agreements with Paris Convention of United Nations (UN) in 1974 to
(1883) for industrial property and administer IPRs related matters
Berne Convention (1886) that recognized by member states of UN.
protects literary and artistic works.

1967 Currently

1883 1974

WIPO was preceded by the International WIPO is the global forum for IP
Bureau to carry out administrative work for services policy, information and
Paris and Berne. WIPO came into existence cooperation and have 193
after 1967 Stockholm WIPO Convention. member states.

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 A policy forum to shape balanced international
IP rules for a changing world
Global services to protect IP across borders and
to resolve disputes

WHAT
Technical infrastructure to connect IP systems
and share knowledge

WIPO Cooperation and capacity-building programs to

enable all countries to use IP for economic,
DOES? social and cultural development
A world reference source for IP information

Source: WIPO (2015)

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HISTORY OF PATENT ACT
IN INDIA
In the year 1856 India got the Act for protection of invention based on British
law of1852
1872: Patents and Design Act: An authority call Controller General of Patent
appointed
1959 justice Ayyangar’s report came
1967 Patent Act bill introduced in parliament Indian Patent Act was passed by
the parliament in the year 1970 and came into force on April 20, 1972
 First amendment happened in 1994 to include Exclusive Marketing Rights
(EMR’s) ; In 1999 amendment passed by the parliament; 2002 amendment.
Amendment enforced from 1-1-2005 where product patent were introduced in
pharmaceutical sector

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Patent Act 1970 amended in 1999, 2002 and 2005
Trade Marks Act (1958 original) 1999
The Copyright Act 1957
The Design Act 2000
Geographical Indication of Goods (Registration and
Protection) Act 1999
Plant Variety and Farmers Right Protection Act 2001.

IPRS LAWS IN INDIA

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WHY PATENT RIGHTS?
Machlup (1958), the four reasons to advocate
patent rights include:
1. Natural-law thesis
2. Reward-by-monopoly thesis
3. Monopoly-profit-incentive thesis
4. Exchange-for-secrets thesis.

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 Arrow (1963)- Underinvestment in
R&D
• The opposing view on overinvestment

Length of patent rights

WHY PATENT
RIGHTS? • Static inefficiency vs dynamic gains
• Nature of competition, price elasticity,
R&D elasticity of process cost reduction

Breadth of patent rights

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WHY AND COST
Why
 Reward by monopoly
 Natural law thesis
 Monopoly-profit-incentive thesis
 Exchange for secret

Costs (Bryan and Williams 2021)

High pricing
Patent race
Limited diffusion
Distortion of the direction of inventions

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EVIDENCE ON THE IMPACT OF PATENT RIGHTS: INNOVATION AND
TECHNOLOGY TRANSFER
Alternative mechanisms

• Secrecy
• Lead time
• Production cost reduction
• Superior Marketing
• Country wide variations

Sector Specificity

• Pharmaceutical and chemical

• Low imitation to innovation cost ratio
• Specific patenting strategies of firms
• Critique of one size fit all approach

Conditioned on level of economic development

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EVIDENCE ON THE IMPACT OF PATENT
RIGHTS
Sector Specificity
Firms use patents for strategic defensive purposes including “patent
blocking”.
Patents play multifaceted role among firms including “regulatory capture”
(Kortum and Lerner 1998), and “strategic response” (Hall and Ziedonis
2001).
Kortum and Lerner (1998) confirmed the “regulatory capital” hypothesis
that is firms do aggressive patenting to improve their negotiating position
with larger owners of the IPRs.
“Strategic response” hypothesis proposed by Hall and Ziedonis (2001)
implies that firms with large sunk costs expand patent portfolio to trade.

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DEBATE
Pre- patent to Anti-patent
Lerner (2002) examined 177 events of patent reform over a period of 150 years in 51 countries.
Patent reforms in sample countries included enactment of patent law, changes in the duration of
rights, fees, and inclusion of provisions like revocation and compulsory licensing that weakens
rights of the right-holder. This study found that patent reform did not affect patent filings by
residents in a benchmark foreign country (Great Britain).
The relationship between patenting policies and firms' innovation activities is not straightforward
and depends on the nature of patent policies (Moser, 2013). Using historical evidence, Moser
(2013) suggests that policies that grant patents to early innovations discourage overall
innovations in the industry. However, patent policies that encourage diffusion of technology and
competition in the market may stimulate innovation in the industry.
Boldrin and Levine (2013) dismiss the role played by patent rights to increase innovation and
productivity arguing that mature industries with diminished growth potential use patents to
become concentrated. And there is no evidence to suggest that patent protection supported the
initial innovations in new industries like radio, television, and computers.

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