Wednesday, May 29, 2013

Copyright and patent infringement and their effect on business

Copyright and patent infringement and their effect on business Important business information disclosed to the public can be protected against infringement through patent and copyright law. The copyright law gives exclusive rights to businesses and individuals on any original work that they create including music, books, movies, sound recordings, pantomimes and dramatic creations (Correa & Li, 2009). On the other hand, patent law gives businesses and individuals the right to prevent others from making, selling or using inventions, such as, manufacturing processes electrical equipment, mechanical devices and chemical formulas (Johns, 2009). These exclusive rights are granted by the government with a condition that there should be a full disclosure of original invention or work. The author or inventor is complete protection for her efforts and the public is also given valuable information to make their life healthier, cheaper and easier. The law of patent and copyright provides protection to businesses and individuals who have invested significant resources to create something valuable or useful and wish to commercially exploit that investment (Ghafele, 2008). Any party that uses the protected work without permission from the holder is said to have infringed into the patent or copyright rights of the holder. The patents and copyrights are normally protected for a specified period of time as provided by the copyright Act and the patent Act. This essay describes copyright and patent infringement and their effect on business. Copyright infringement refers to the unauthorized use of somebody`s work which interferes with the holder`s exclusive rights (Panethiere, 2005). It is the act of copying intellectual property without a written permission from the holder. The copyright holder may be the publisher or any other business that is assigned by the creator of a particular peace of work. It is the responsibility of the copyright holder to enforce the copyright. The law provides protection of the intellectual property right to allow companies to use their innovations effectively. Article 50 of the Agreement on Trade-Related Aspects, under the Intellectual Property Rights, requires signatory countries to enable their courts to remedy infringement of copyrights through injunctions, awarding damages and destruction of infringing products (Johns, 2009). The copyright holders are demanding states to defend their rights and enforce the copyright law by providing active policies for copyright infringement. States are also required to provide criminal sanctions to all forms of copyright infringement and pursue them through administrative procedures instead of judicial procedures. Cases of copyright infringement are sometimes dealt with through lawsuits in civil courts against either the alleged infringers or the service providers that supported infringement. Article 61 of the Agreement on Trade-Related Aspects of Intellectual Property rights (TRIPs) compels signatory countries to establish criminal procedures and penalties for copyright infringement (Kim, 2002). Criminal sanctions have also been demanded by copyright holders against all types of copyright infringement. The motion picture industry adopted a new distribution style which involves reducing the time of releasing their movies. Different formats of movies are released at the same time to reduce the chances of copyright infringement. The movie industry also holds the position that it will combine worldwide legal agreements as a result of increased internet use across the world. Patent infringement refers to the commission of an act that is prohibited with respect to patent invention without permission from the patent holder (Kesan and Ball, 2005). It is the selling of patented invention for commercial purposes. Permission for patent invention is normally granted in form of a license. The scope and extent of protection for patent rights is defined in the claims that are granted patent. This informs the public about what is prohibited without permission. Patents are normally territorial hence infringement can only take place in a country where that patent is in force (Johns, 2009). This means that when a patent is filed in one country and other people prohibited from selling, using, importing or making the patented product, people from other countries are free to make and sell the patented product in their respective countries. It is difficult to enforce a particular patent world wide due to variations from one country to the other. The scope of protection varies because patents are examined by patent offices in each country or region. A person or company is said to have infringed into the patent if he manufactures, uses, imports, offers for sale or sells patented technology without permission from the patent holder during the time of a patent within the country that issued the patent (Kesan and Ball, 2005). The infringing party`s product must fall within the claims of the patent. If a single element is found missing from the technology, it does not constitute an infringement. Indirect infringement can take place when a device is claimed in a patent and the third party supplies another product which can only be used to make the claimed device. This amounts to infringement as the product supplied will enable the production of a patented device. Patent pirates are parties who infringe a patent without acknowledging the priority of the inventor. Some of the pirates take advantage of the high cost involved in enforcing a patent to infringe into a patent knowing that the patent holder will not have the required financial resources to enforce patent rights (Correa & Li, 2009). Invention costs are normally very high and they require long-term investment in research and development. Most of the businesses cannot afford the high costs involved in the process of inventing a new product or technology. However due to increased competition in the current world, businesses are forced to adapt to changes in their in their environments. There are rapid changes in technology and business processes hence a firm that do not adapt to the new changes cannot compete in the modern world. This has led to increased cases in copyright and patent infringement when firms struggle to cope with the changes (Ghafele, 2008). Businesses are forced to use others` work or technology to gain the same privileges enjoyed by the inventor. They copy what successful businesses are doing and implement the same in an effort to compete favorably without considering the intellectual property rights. This leads conflicts among various companies which end up filing law suits against each other. A business that has invested its resources in research and invented a new product has the right to fully exploit the new invention commercially (Kim, 2002). The process of inventing a new product or technology is very costly as it requires long-term investment in research to identify the market needs and develop something that will be acceptable. Due to the high costs involved in the process of invention, it is important that such businesses are protected against unfair competition that arises from copying the new invention. Some businesses avoid incurring the full cost of researching and developing new products and processes by imitating what successful businesses are doing. The copyright and patent rights provides protection for innovative businesses and allows them enjoy the benefits of their innovation. Infringement into the intellectual property rights is a criminal act that is punishable by law in all countries across the world. However despite the legal protection provided to innovative companies in most countries, infringement continues to take place as a result of globalization. The internet has led to increased communication and sharing of information across borders in real-time. Information can easily be transmitted from one nation to the other including new technologies and business processes. There is also an increase in the number of multinational companies and foreign labor force that can easily transfer information from one country to the other. Patent rights are territorial in nature and they cannot therefore provide sufficient protection to businesses internationally (Kesan and Ball, 2005). The patent rights are only enforceable within the country in which they have been filed. These rights are granted by a nation within which the invention took place and they vary from country to country making it difficult to be enforced internationally. A company in a foreign nation can still use the technology or produce the product that is protected in the other country. This leads to deprivation of the innovative privileges from the company that invented a technology or product. The new technology can easily be transferred across the world via the advanced technology or increased travel and interaction between people from different backgrounds. Infringement into the property rights leads to loss of sales, license, royal fees and profits for the aggrieved company. The business that invented a product cannot recover the expenses incurred in developing the new invention because of pirates imitation which competes with the original innovation (Kim, 2002). Pirates can copy and even make improvements on the new invention at a lesser cost thus denying the inventor benefits from the new product or technology. Patent and copyright infringement also leads to the damage of the brand name and product reputation. The pirates can produce a product of inferior quality and distributes it to the market alongside the original invention. Unsuspecting customers end up buying the inferior imitation without noticing the difference and they blame the original producer for poor quality. This damages both product and company reputation which causes a negative impact on the brand name. The company can loose a lot of business as a result of copyright and patent infringement. This discourages most companies from investing a lot of resources in research and innovation for fear of loosing its benefits to pirates. Members of the public are also affected by the copyright and patent infringement. Intellectual property pirates imitate valuable products that are selling well in the market. They produce similar products and distribute to members of the public who are deceived into buying fake products without noticing the difference (Ghafele, 2008). Buyers end up purchasing inferior goods at high prizes due to their similarity with the original products thus wasting money. It is difficult for the customers to differentiate the original product from the fake one due to advanced technology used by pirates to produce their products. It import for various governments to protect their citizens from being deceived by banning the sale of fake goods in the country. Infringement into the intellectual property rights has become a common problem in most parts of the world. The situation has been worsened by globalization which has led to technological advancement and facilitated communication across borders (James, 1998). Companies have established oversea businesses and the internet has been adopted for commercial purposes. This has made the available laws insufficient to deal with the problem at an international level. The patent rights, for instance, are territorial and they are determined by the host country. This makes it difficult to enforce these laws as they differ from one country to the other. The law on patent and copyrights should be harmonized across all nations to effectively deal with intellectual property infringement globally. There should be equal remedies for infringement in all nations and enforcement should be able to take place in any country regardless of the place in which innovation took place. Governments should also inspect all goods and services to determine fake products. Strict laws should be legislated to ban the sale of fake products and important features of original products should be disclosed to the public to enable the customers differentiate them from fake goods. This will promote fair completion among manufacturers and save the customers from being deceived into buying inferior products. The penalty for infringement should also be stiffened to scare pirates from attempting to imitate other people`s innovations. The cost of claiming copyright and patent rights should be low to allow all complainants pursue justice in courts of law. There should be fair trial on lawsuits that involve intellectual property infringement across all nations in the world. References Correa, Carlos Maria; Li, Xuan (2009). Intellectual property enforcement: international perspectives. Edward Elgar Publishing. pp. 208. ISBN 978-1-84844-663-2. Ghafele, Roya ( 2008). "Perceptions of Intellectual Property: A Review". London: Intellectual Property Institute. Retrieved 2009-11-05. James W. Cortada, 1998. "Rise of the knowledge worker, Volume 8 of Resources for the knowledge-based economy", Knowledge Reader Series, Butterworth-Heinemann, p. 141, Johns, Adrian, 2009. Piracy. The Intellectual Property Wars from Gutenberg to Gates. The University of Chicago Press Kesan, Jay P. and Ball, Gwendolyn G., (2005) How Are Patent Cases Resolved? An Empirical Examination of the Adjudication and Settlement of Patent Disputes. University of Illinois Law & Economics Research Paper Kim, Linsui (2002). "Technology Transfer and Intellectual Property Rights: Lessons from Korea's Experience". UNCTAD/ICTSD. UNCTAD/ICTSD Working Paper. Panethiere, Darrell (2005). "The Persistence of Piracy: The Consequences for Creativity, for Culture, and for Sustainable Development". UNESO e-Copyright Bulletin. pp. 14.