Intellectual property

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Intellectual Property

Intellectual property (IP) is an intangible creation of the human mind, usually expressed or translated into a tangible form, that is assigned certain rights of property. Examples of intellectual property include an author's copyright on a book or article, a distinctive logo design representing a soft drink company and its products, unique design elements of a web site, or a patent on a particular process to, for example, manufacture chewing gum. Intellectual property law covers the protection of copyrights, patents, trademarks, and trade secrets, as well as other legal areas, such as unfair competition. In effect, intellectual property laws give the creator of a new and unique product or idea a temporary monopoly on its use. The value of intellectual property to an individual or company is not based on physical properties, such as size and structure. Instead, intellectual property is valuable because it represents ownership and an exclusive right to use, manufacture, reproduce, or promote a unique creation or idea. In this way, it has the potential to be one of the most valuable assets a person or small business can own.

In an era of globalization, IP rights must be protected and regulated at an international level. The U.S. Department of State explains why countries protect inventions; literary and artistic works; and symbols, images, names, and designs used in commerce on a Web site it dedicates to this subject. Countries protect IP "because they know safeguarding these property rights fosters economic growth, provides incentives for technological innovation, and attracts investment that will create new jobs and opportunities for all their citizens. In the United States alone, for example, studies in the past decade have estimated that over 50 percent of U.S. exports now depend on some form of intellectual property protection, compared to less then 10 percent 50 years ago."


The laws protecting intellectual property in the United States exist at both the state and federal levels. State laws cover a broad spectrum of intellectual property fields, from trade secrets to the right of publicity. The laws differ somewhat from state to state. At the federal level, the Constitution and legislation authorized under the Constitution deal exclusively with patents and copyrights, and partially with trademarks and related areas of unfair competition.

Intellectual property protection first became an important issue at an international level during trade and tariff negotiations in the nineteenth century, and has remained so ever since. One of the first international treaties relating to intellectual property in the broadest sense was the International Convention for the Protection of Industrial Property, or the Paris Convention. Written in 1883, the treaty created under the Paris Convention provided protection for such properties as patents, industrial models and designs, trademarks, and trade names. Over 100 countries have signed the Paris Convention treaty, and it has been modified several times. Two of the most important provisions of the treaty relate to the rights of national treatment and priority.

The right of national treatment ensures that those individuals seeking a patent or trademark in a foreign country will not be discriminated against and will receive the same rights as a citizen of that country. The right of priority provides an inventor one year from the date of filing a patent application in his or her home country (six months for a trademark or design application) to file an application in a foreign country. The legal, effective date of application in the foreign country is then retroactively the legal, effective filing date in the home country, provided the application is made within the protection period. If the invention is made public prior to filing the home country application, however, the right of priority in a foreign country is no longer applicable.

Enforcement and protection of IP at the international level has historically been extremely complex. Laws have varied significantly from country to country, and the political climate within each country has influenced the extent of protection available. Separate legislation and treaties specifically addressed relevant procedures, conventions, and standards for each area within the scope of intellectual property, such as copyright or trade secrets.

Many U.S. and international laws relating to intellectual property were significantly altered with the 1994 passage of the General Agreement on Tariffs and Trade (GATT). In fact, the member nations that signed the GATT committed themselves to a higher degree of intellectual property protection than had been provided under any earlier multinational treaties. Under the guidance of the World Trade Organization (WTO), all member nations were required to adopt specific provisions for the enforcement of rights and settlement of disputes relating to intellectual property. Under these provisions, trademark counterfeiting and commercial copyright piracy are subject to criminal penalties.

Today, the strong protections of intellectual property are recognized as one of the cornerstones of the formation and growth of small businesses in the United States, especially since the advent of the Internet and other new technologies have placed a premium on new ideas and innovations. Intellectual property allows individuals who come up with a new idea to enjoy the exclusive use of that idea for a certain period of time, which can be a significant monetary incentive for entrepreneurs. But intellectual property law is extraordinarily complex, so small business owners interested in IP issues should consult a legal expert in order to protect themselves to the full extent of the law. "The law on intellectual property is everywhere both comparatively new and in flux," observed The Economist (US). The rapid and worldwide spread of access to the Internet as well as the ease with which electronic data may be copied and manipulated pose new challenges to the existing network of IP regulations. Laws surrounding IP rights will likely see many changes in the coming years as we adjust them to the new demands created by the information age.

see also Inventions and Patents; Work for Hire


Epstein, Eve. "What Is Intellectual Property?" InfoWorld. 19 June 2000.

Foster, Frank H., and Robert L. Shook. Patents, Copyrights & Trademarks. Wiley, 1993.

Gartman, John, and Kevin McNeely. "A Summary Checklist for Dealing with Intellectual Property." Providence Business News. 26 June 2000.

Lickson, Charles P. A Legal Guide for Small Business. Crisp Publications, 1994.

"Markets for Ideas: Rights in Intellectual Property." The Economist (US). 14 April 2001.

Prencipe, Loretta W. "Intellectual Property Due Diligence." InfoWorld. 30 October 2000.

"Protecting Intellectual Property: An Introductory Guide for U.S. Businesses on Protecting Intellectual Property Abroad." Business America. July 1991.

Spinello, Richar A., and Herman T. Tavani. Intellectual Property Rights in a Networked World. Idea Group, Inc. (IGI), 2004.

Tabalujan, Benny. "Keeping the Fruits of Your Intellectual Pursuit to Yourself." Business Times. July 1993.

U.S. Department of State. International Information Programs. Field, Thomas G. Jr. "What is Intellectual Property." Available from January 2006.

World Trade Commission. "Intellectual Property: Protection and Enforcement." Available from Retrieved on 16 March 2006.

                                Hillstrom, Northern Lights

                                  updated by Magee, ECDI

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Intangible rights protecting the products of human intelligence and creation, such as copyrightable works, patented inventions, trademarks, and trade secrets. Although largely governed by federal law, state law also governs some aspects of intellectual property.

Intellectual property describes a wide variety of property created by musicians, authors, artists, and inventors. The law of intellectual property typically encompasses the areas of copyright, patents, and trademark law. It is intended largely to encourage the development of art, science, and information by granting certain property rights to all artists, which include inventors in the arts and the sciences. These rights allow artists to protect themselves from infringement, or the unauthorized use and misuse of their creations. Trademarks and service marks protect distinguishing features (such as names or package designs) that are associated with particular products or services and that indicate commercial source.

Copyright laws have roots in eighteenth-century english law. Comprehensive patent laws can be traced to seventeenth-century England, and they have been a part of U.S. law since the colonial period. The copyright and patent concepts were both included in the U.S. Constitution. Under Article I, Section 8, Clause 8, of the Constitution, "The Congress shall have Power … To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." The first trademark laws were passed by Congress in the late nineteenth century, and they derive their constitutional authority from the commerce clause.

The bulk of intellectual property law is contained in federal statutes. Copyrights are protected by the Copyright Act (17 U.S.C.A. §§ 101 et seq. [1994]); patents are covered in the Patent Act (35 U.S.C.A. §§ 101 et seq. [1994]), and trademark protection is provided by the lanham act (also known as the Trademark Act) (15 U.S.C.A. §§ 1501 et seq. [1994]).

Napster and Intellectual Property

In early 1999, Shawn Fanning, who was only 18 at the time, began to develop an idea as he talked with friends about the difficulties of finding the kind of MP3 files they were interested in. He thought that there should be a way to create a program that combined three key functions into one. These functions included a search engine, file sharing (the ability to trade MP3 files directly, without having to use a centralized server for storage), and an Internet Relay Chat (IRC), which was a means of finding and chatting with other MP3 users while online. Fanning spent several months writing the code that would become the utility later known world-wide as Napster. Napster became a nonprofit on-line music-trading program which became especially popular among college students who typically have access to high-speed Internet connections.

In April 2000 the heavy metal rock group Metallica sued the on-line music-trading Website Napster for copyright infringement. Several universities were also named in this suit. Metallica claimed that these universities violated Metallica's music copyrights by permitting their students to access Napster and illegally trade songs using university servers. A number of universities had banned Napster prior to April 2000 because of concerns about potential copyright infringement and/or because traffic on the Internet was slowing down university servers. Yale University, which was named in the suit, immediately blocked student access to Napster.

Metallica argued that Napster facilitated illegal use of digital audio devices, which the group alleged was a violation of the Racketeering Influenced and Corrupt Organizations (RICO) act, 18 U.S.C. § 1961. Napster responded that the Fair Use Act allows owners of compact discs to use them as they wish. Therefore if an owner of the disc decides to copy it into a computer file, he or she should be allowed to do so. If this file happens to be accessible on the Internet, then others can also access or download it without being guilty of a crime. Napster further claimed that since it made no profit off the trades, it owed no money in royalties. The Ninth Circuit held that Napster's operation constituted copyright infringement.

further readings

Alderman, John. 2001. Sonic Boom: Napster, P2P, and the Battle for the Future of Music. New York: Perseus.

Merriden, Trevor. 2001. Irresistible Forces: The Business Legacy of Napster and the Growth of the Underground Internet. New York: John Wiley and Sons.


Art Law.

Intellectual property laws give owners the exclusive right to profit from a work for a particular limited period. For copyrighted material, the exclusive right lasts for 70 years beyond the death of the author. The length of the right can vary for patents, but in most cases it lasts for 20 years. Trademark rights are exclusive for ten years and can be continually renewed for subsequent ten-year periods.

Intellectual property laws do not fall in the category of criminal law, per se. Some copyright laws authorize criminal penalties, but by and large, the body of intellectual property law is concerned with prevention and compensation, both of which are civil matters. This means that the owner, not the government, is responsible for enforcement.

Intellectual property laws provide owners with the power to enforce their property rights in civil court. They provide for damages when unauthorized use or misuse has occurred. They also provide for injunctions, or court orders, to prevent unauthorized use or misuse.

The property protected by copyright laws must be fixed in a tangible form. For example, a musician may not claim copyright protection for a melody unless it has been written down or somehow actualized and affixed with a recognizable notation or recorded. A formula or device may not receive patent protection unless it has been presented in whole to the U.S. patent and trademark office; even then, it must satisfy several tests in order to qualify. A symbol may not receive trademark protection unless it has been placed on goods or used in connection with services.


Copyright laws grant to authors, artists, composers, and publishers the exclusive right to produce and distribute expressive and original work. Only expressive pieces, or writings, may receive copyright protection. A writing need not be words on paper: In copyright law, it could be a painting, sculpture, or other work of art. The writing element merely requires that a work of art, before receiving copyright protection, must be reduced to some tangible form. This may be on paper, on film, on audiotape, or on any other tangible medium that can be reproduced (i.e., copied).

The writing requirement ensures that copyrighted material is capable of being reproduced. Without this requirement, artists could not be expected to know whether they were infringing on the original work of another. The writing requirement also enforces the copyright rule that ideas cannot be copyrighted: Only the individualized expression of ideas can be protected.

Copyrighted material must be original. This means that there must be something sufficiently new about the work that sets it apart from previous similar works. If the variation is more than trivial, the work will merit copyright protection.

Functionality can be a factor in copyright law. The copyrights to architectural design, for example, are generally reserved for architectural works that are not functional. If the only purpose or function of a particular design is utilitarian, the work cannot be copyrighted. For instance, a person may not copyright a simple design for a water spigot. However, if a person creates a fancy water spigot, the design is more likely to be copyrightable.

Copyrighted material can receive varying degrees of protection. The scope of protection is generally limited to the original work that is in the writing. For example, assume that an artist has created a sculpture of the moon. The sculptor may not prevent others from making sculptures of the moon. However, the sculptor may prevent others from making sculptures of the moon that are exact replicas of his own sculpture.

Copyright protection gives the copyright holder the exclusive right to (1) reproduce the copyrighted work; (2) create derivative works from the work; (3) distribute copies of the work; (4) perform the work publicly; and (5) display the work. The first two rights are infringed whether they are violated in public or in private. The last three rights are infringed only if they are violated in public. Public showing is defined under the Copyright Act of 1976 as a performance or display to a "substantial number of persons" outside of friends and family (17 U.S.C.A. § 101).

Infringement of copyright occurs whenever someone exercises the exclusive rights of the copyright owner without the owner's permission. The infringement need not be intentional. Copyright owners usually prove infringement in court by showing that copying occurred and that the copying amounted to impermissible appropriation. These showings require an analysis and comparison of the copyrighted work and the disputed work. Many general rules also relate to infringement of certain works. For example, a character created in a particular copyrighted work may not receive copyright protection unless he or she is developed in great detail and a character in the disputed work closely resembles that character.

The most important exception to the exclusive rights of the copyright holder is the "fair use" doctrine. This doctrine allows the general public to use copyrighted material without permission in certain situations. To varying extents, these situations include some educational activities, some literary and social criticism, some parody, and news reporting. Whether a particular use is fair depends on a number of factors, including whether the use is for profit; what proportion of the copyrighted material is used; whether the work is fictional in nature; and what economic effect the use has on the copyright owner.

The rise in electronic publication in the late twentieth century, particularly the widespread use of the internet since the mid 1990s, caused new concerns in the area of copyright. A web site called Napster, which provided a file-sharing system whereby users could trade electronic music files, became one of the most popular sites on the Internet. The company had an estimated 16.9 million worldwide users, and the system accommodated about 65 million downloads. The Recording Industry Association of America sued Napster, eventually causing Napster to close down.

During the late 1990s, Congress enacted a series of laws that had significant impacts on the law of copyright. In 1998, Congress enacted the Sonny Bono Copyright Term Extension Act, Pub. L. No. 105-298, 112 Stat. 2827 (17 U.S.C.A. §§ 101 et seq.), which extended the terms of existing and new copyrights by 20 years, against the protests of several lobbying groups. Also in 1998, Congress approved the Digital Millennium Copyright Act (DMCA), Pub. L. No. 105-304, 112 Stat. 2860 (17 U.S.C.A. §§ 101 et seq.), a broad-based piece of legislation that was designed to bring copyright law into the digital age.


Patent laws encourage private investment in new technologies by granting to artists the right to forbid all others to produce and distribute technological information that is new, useful, and non-obvious. The statutory requirements for patent protection are more stringent than those for copyright protection. Furthermore, because patent protection for commercial products or processes can give a tremendous market advantage to businesses, those seeking patents often find opposition to their applications. Patent protection can be obtained only through the U.S. Patent and Trademark Office.

The novelty requirement focuses on events that occur prior to the invention. Under Section

102 of the Patent Act, an invention is not novel if it is publicly used, sold, or patented by another inventor within 12 months of the patent application. This definition implements the public policy that favors quick disclosure of technological progress.

Often, two inventors apply for a patent for the same product or process within the same 12-month period. Three factors determine who wins the patent: the date and time that the product or process was conceived; the date and time that the product or process was reduced to practice; and the diligence that was used to pursue patent protection and to perfect the discovery. Generally, the first inventor to conceive the product or process has priority in the application process. However, if the second inventor is the first to reduce the product or process to practice, and the first inventor does not use diligence to obtain patent protection, the second inventor is given priority in the application process.

The utility requirement ensures that the product or process receiving patent protection will have some beneficial use. The inventor must specify in the application a specific utility for the invention. If the application is for a patent on a process, the process must be useful with respect to a product. A process that is new and non-obvious, yet useless, does not increase knowledge or confer any benefit on society.

Non-obviousness is not the same as novelty. Not everything that is novel is non-obvious. Anything that is non-obvious is novel, however, unless it already has been patented. The nonobviousness requirement focuses on existing technology, or "prior art." In determining whether an invention is non-obvious, the U.S. Patent and Trademark Office analyzes the prior art, examines the differences between the invention and the prior art, and determines the level of ordinary skill in the art. Generally, if an invention is obvious to a person of ordinary skill in the relevant art, it is not patentable.

When an inventor claims that his or her patent has been infringed, the court generally engages in a two-step process. First, it analyzes all of the relevant patent documents. It then reads the patent documents and compares them with the device or process that is accused of infringement. If each element of the accused device or process substantially duplicates an element in the patented device or process, the court may declare that the patent has been infringed. Infringement can occur only if another person uses, makes, or sells the patented device or process without the permission of the person who has received the patent.

When a patented device or process is infringed, the patent holder, or patentee, may recover in damages an amount equal to a reasonable royalty. If the infringement was willful, the infringing party may be forced to pay three times the reasonable royalty. If successful in court, the patent holder also may recover court costs and attorneys' fees. If the patent holder anticipates infringement, he or she may apply for an injunction, which would prohibit a certain party from infringing the patent. An injunction may also issue after a finding of infringement, to prevent repeat infringement.


Trademark laws allow businesses to protect the symbolic information that relates to their goods and services, by preventing the use of such features by competitors. To receive trademark protection, a mark usually must be distinctive. Distinctiveness generally applies to any coined or fanciful word or term that does not closely resemble an existing mark. A mark generally will not receive trademark protection if it is a common or descriptive term used in the marketplace.

To receive trademark protection, a mark must be used in commerce. If two or more marketers claim ownership of a certain mark, the first user of the mark will usually receive the protection. When the mark is known to consumers only in a limited geographic area, though, it may not receive protection in areas where it is unknown.

Infringement occurs if a mark is likely to cause confusion among consumers. In determining whether confusion is likely, the court examines a number of factors, including the similarity between the two marks in appearance, sound, connotation, and impression; the similarity of the goods or services that the respective marks represent; the similarity of the markets; whether the sale of the goods or services is inspired by impulse or only after careful consideration by the buyer; the level of public awareness of the mark; whether shoppers are actually confused; the number and nature of similar marks on similar goods or services; the length of time of concurrent use without actual confusion on the part of shoppers; and the variety of goods or services that the mark represents (In re E. I. du Pont de Nemours & Co., 476 F.2d 1357, 177 U.S.P.Q. 563 [1973]).

Defenses to infringement include fair use and collateral use. Fair use occurs when the second user, or repossessor, uses a protected mark in a non-conspicuous way to identify a component of a good or service. For example, a restaurant may use a protected mark to advertise that it serves a particular brand of soft drink, without infringing the mark. However, the restaurant may not identify itself by the mark without infringing the mark.

Collateral use is use of the same mark in a different market. For example, assume that a tree surgeon has received trademark protection for the mark Tree Huggers. This protection might or might not prevent a business that sells logging boots from using the same mark. However, if the mark for the boots is written or otherwise appears with the same defining characteristics as the mark for the tree surgeon, it risks being denied trademark protection, depending on whether it can be confused by consumers.

Remedies for infringement of a protected trademark consist of damages for the profits lost owing to the infringement; recovery of the profits realized by the infringer owing to the infringement; and attorneys' fees. A trademark holder also may obtain injunctive relief to prevent infringement.

Other Forms of Intellectual Property

The body of intellectual property law also includes laws relating to trade secrets, unfair competition, and the right of publicity. trade secret laws protect any formula, pattern, device, or compilation of information that provides a business advantage over competitors who do not use or know of it. A strategy to increase worker productivity, for example, is a trade secret. Trade secrets do not receive patent protection because they are not inventive. Trade secret laws are included in intellectual property laws because, like other intellectual property laws, they prevent the unauthorized use of certain intangible subject matter.

The right of publicity is the right of a person to control the commercial value and exploitation of his or her name, voice, or likeness. Because right-of-publicity laws promote artistic and commercial pursuits, they are included among intellectual property law. These laws are usually reserved for celebrities and other public figures whose name and image are important to their career. By allowing celebrities the right to control the commercial use of their name, voice, and image, right-of-publicity laws protect the commercial potential of entertainers.


Artists face problems protecting their property in other countries because not all countries subscribe to international agreements regarding intellectual property. This has led to widespread unauthorized copying. In the 1990s, China and Mexico were identified as especially serious offenders. In both countries, music and films are copied and sold openly without compensation to the creators. The United States threatened to impose trade sanctions against China if it did not observe international copyright treaties. Such threats illustrate that the United States places a high priority on protecting the right of artists to profit from their work.

further readings

Burgunder, Lee B. 2002. "Reflections on Napster: The Ninth Circuit Takes a Walk on the Wild Side." American Business Law Journal 39 (summer): 683–707.

Byrne, John G. 1995."Changes on the Frontier of Intellectual Property Law: An Overview of the Changes Required by GATT." Duquesne Law Review 34 (fall): 121–37.

Goldstein, Paul. 2002. Copyright, Patent, Trademark, and Related State Doctrines: Cases and Materials on the Law of Intellectual Property. 5th ed. New York: Foundation Press.

Gray, Megan E., and Will Thomas DeVries. 2003. "The Legal Fallout from Digital Rights Management Technology." Computer and Internet Lawyer 20 (April): 20–35.

Letterman, G. Gregory. 2001. Basics of International Intellectual Property Law. Ardsley, N.Y.: Transnational Publishers.

McJohn, Stephen M., and Roger S. Haydock. 2003. Intellectual Property: Examples and Explanations. New York: Aspen.

Vaidhyanathan, Siva. 2001. Copyrights and Copywrongs: The Rise of Intellectual Property and How It Threatens Creativity. New York: New York Univ. Press.


Art Law; Copyright, International; Entertainment Law; Literary Property; Music Publishing; Trade Dress; Trade Name.

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Intellectual property law, once thought of as an arcane and unpopular area of law, came to the fore-front of legal disciplines in the 1990s, in large part due to the increased use of computers and the commercialization of the World Wide Web. Because of the widespread use of technology and computers to conduct research and teach, intellectual property law greatly impacts the educational enterprise in the early twenty-first century. The use of computer networks and the Web to create classrooms in cyber-space, communicate with students and faculty, write and publish scholarly material, and conduct research is considered the norm for many educational institutions. And each of these activities involves the use of copyrighted information. As a consequence educators and administrators need to have a basic understanding of copyright in order to avoid misusing copyrighted material.

Copyright Framework and Exclusive Rights

Intellectual property in the United States is a property right created by the law in intangible property. Specifically, copyright is a subset of intellectual property, which protects creative works such as literature and art. Other types of intellectual property are patents, which protect inventions and processes, and trademarks, which protect names and logos.

Copyrights and patent rights originate from the Patent and Copyright Clause of the United States Constitution, which states "The Congress shall have power topromote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries" (Art. 1, sec. 8, clause 8). The policy behind the copyright framework, embodied in this clause, is that economic incentive, in the form of monopoly rights in an author's work, is needed to generate new creative works in society and thus promote "the progress of science and useful arts."

The monopoly rights that authors possess are outlined in section 106 of the Copyright Act of 1976 (the Act). These rights include the right to make copies, create derivative works, and distribute, display, and perform works publicly. The copyright owner is entitled to exercise and authorize these rights, and prevent others from exercising these rights. Unless a use is exempted or considered fair, users must seek the permission of copyright owner and/or pay license fees to use a copyrighted work.

The digital environment implicates the exclusive rights of authors quite easily. For example, every time a person saves a work to a disk, the right to make copies is invoked. Scanning, digitizing, uploading, downloading, and file transfer all involve the right to make copies. A work is publicly displayed each time someone posts copyrighted information on a bulletin board, website, or online class. When a display or performance is done through a digital network transmission, temporary RAM copies are made in computers through which the material passes.

Copyright Protection and the Public Domain

In order to qualify for copyright protection, a work must meet the statutory requirements set out in section 102 (s) of the Act. The work must be an original work of authorship fixed in a tangible medium of expression. Copyright protection exists from the moment of fixation in a tangible medium. The protection is automatic and notice is not required; however, registration carries certain benefits and is required to bring a lawsuit. Section 102 of the Copyright Act of 1976 includes eight categories of subject matter that fall under copyright protection: literary works; musical works; dramatic works; pantomimes and choreographic works; pictorial, graphic, and sculptural works; motion pictures and audiovisual works; sound recordings; and architectural works. Examples of copyrighted expression also include computer programming, animations, video footage, java applets, web pages, and photographs.

An important aspect of the copyright framework is that facts, ideas, and government works are not protected. Those items are generally considered within the public domain and freely available for use without permission or payment of license fees. The logic behind this is clear. If facts and ideas in particular were considered copyrighted information, then the process of innovation, research, and scholarship would be considerably slowed due to the increased time and monetary costs of getting permission and paying fees. Moreover, the possibility of great constraint of academic freedom would be quite high under those circumstances because those who exercised control over controversial facts or ideas might be hesitant to grant access to those materials. Facts, ideas, government information, and items with expired terms of copyright are also within the public domain. To determine whether a copyright term has expired, one should consult Chapter 3 of the Copyright Act. Another helpful resource is a chart developed by Laura N. Gasaway of the University of North Carolina School of Law that helps determine when works pass into the public domain. The chart can be found online at <>.

Copyright Ownership

The exclusive rights in copyright are initially given to the owner of the copyrighted work. Although the author may transfer the copyright to someone else, any analysis of copyright ownership should begin with the principle that the author is the owner. Section 201 of the Act provides four types or categories for ownership: (1) author; (2) joint ownership; (3) collective works; and (4) works made for hire.

The primary exception to the author is owner approach is the work-for-hire category. When a work is made for hire, the employer, not an employee, is considered the owner/author of a work. Section 101 of the Act outlines two ways a work is made for hire:(1) the employee creates the work within the scope of his or her employment; or (2) the work meets the statutory criteria of being an independently contracted work made for hire.

The work-for-hire doctrine has always played a role in academic production. Many institutions have asserted ownership over research and other scholarly works by claiming the work is made for hire. However, an exception to this rule was developed in the common law for things such as syllabi, lectures, textbooks, and articles that professors write. There is no such explicit exception in the Copyright Act of 1976.

The factors to be considered in determining whether or not a person is an employee were outlined in the Supreme Court's decision in Community for Creative Non-Violence (CCNV) v. Reid (1989).

The CCNV factors applied by the U.S. Court of Appeals for the Second Circuit in Aymes v. Bonelli include: the right of the hiring party to control the manner and means of creation; employee benefits provided by the hiring party; whether the hiring party has the right to assign more projects to the hired party; tax treatment of the hired party; and skill required to complete the project.

If a creator is not an employee, but is hired to create something, and both parties sign a written contract before the work begins that states the work is a work made for hire, and if the work fits into one of the statutory categories, it will be considered a work made for hire and the hiring party will own the work. The statutory categories are: contribution to a collective work; part of a movie or other audiovisual work; a translation; a supplementary work; a compilation; an instructional text; a test; answer material for a test; an atlas.

The controversy over the availability of the academic exception under the 1976 act has been exacerbated by the onset of digital distance education. Many educators claim that distance-education courses delivered online are nothing less than lecture notes, and that these items have historically been the property of faculty. Institutions counter that online courses are not developed in isolation, but that various persons help to develop them, and the institution therefore has an ownership interest in such courses. Because of the lack of clarity in this area, it is very important that colleges and universities develop copyright policies. University copyright policies can affect the application of copyright law by designating certain activities as being outside the scope of employment and/or incorporating the traditional academic exception.

Copyright Limitations and Exemptions

Although copyright owners have exclusive rights in their creations, these exclusive rights are limited by certain statutory exemptions and defenses. The most used and notable of these for the education community are: fair use, library copying, first sale, and the educational performance and display exemptions. The primary limitation in copyright on the exclusive rights of copyright owners is fair use. The fair use privilege allows for the reasonable use of a copyrighted work without permission or payment of license fees if the use is fair pursuant to statutory factors. Section 107 of the Act includes four factors that must be weighed to determine whether or not a use is fair: (1) the purpose and character of the use;(2) nature of the copyrighted work; (3) the amount and substantiality of the portion used; and (4) the effect of the use on the potential market for, or value of, the copyrighted work. All four factors are weighed or balanced, and no one factor ensures a finding of fair use. Fair use is critical to the teaching and research that takes place in educational institutions. If fair use did not exist, then the research process would be greatly frustrated, since many small and relatively inconsequential research uses copyrighted material that could be considered unlawful reproductions such as photocopying a page from a journal in order to write a research paper.

Exemptions that are directly applicable to the classroom and to distance education are located in Section 110 of the Copyright Act. The classroom exemption, 110 (1), allows for the performance and display rights to be used in the course of "face to face" teaching at a nonprofit educational institution. The use must be within a "classroom or similar place devoted to instruction." The right to public display may occur whenever a picture, graphic, text, or chart is shown directly or by means of a projecting mechanism. A performance may occur when a work is recited or acted, or when an audiovisual work, such as a videotape, is played. Thus, in the course of teaching students in the classroom one can read text out loud, sing a song, or play a movie.

The types of activities permitted in the course of face-to-face instruction under the act, as of May 2002, may not be permitted in an online class, pursuant to the distance education exemption. The distance education exemption, 110 (2), allows for the performance only of nondramatic literary or musical works or the display of a work if: (1) the use is part of "systematic instructional activities" of a nonprofit educational institution or governmental body; (2) the use is "directly related and of material assistance to the teaching content of the transmission;" and (3) the transmission must be "primarily" for "reception in classrooms or similar places normally devoted to instruction," or for persons whose disabilities or other special circumstances prevent their coming to classrooms.

The distance education provision was created in the 1970s and does not address the issues involved in transmitting content in the online classroom. This exemption does not provide for the use of audiovisual works such as educational videos, theatrical films, and film clips. The U.S. Copyright Office documented some of the limitations in 110 (2) in a report given in 1999. The copyright owner and user communities have attempted to negotiate an amendment to Copyright Act, known as the Technology Education and Copyright Harmonization Act (TEACH Act). As of May 2002, the TEACH Act had yet to be adopted by Congress.

Infringement and Liability

Use of a copyrighted work without permission, unless it is covered under an exemption, infringes on the exclusive rights of the author outlined in Section 106 of the Copyright Act. Infringement can be direct, vicarious, or contributory. Direct infringement occurs when someone violates any of the exclusive rights of the copyright owner. Vicarious infringement occurs when one has the right to control the infringement of another or profits from infringement. This type of liability is based on the relationship with the direct infringer. Contributory infringement occurs when a person has knowledge of infringing activity and/or induces, causes, or contributes to infringing conduct. Educational institutions and faculty may be liable under all three types of liability.

Digital Millennium Copyright Act

Educational institutions that are heavily networked with high student and faculty use of computers need to become well versed in the liability limits in the Digital Millennium Copyright Act (DMCA), a 1998 amendment to the Copyright Act. Specifically, the DMCA limits liability for Internet Service Providers (ISPs) and provides safe harbors from liability for conduit activities, system caching, hyperlinks, directories, and location tools and stored material on an ISP system. There are specific requirements that must be met in order to get statutory protection, however. Service providers qualifying for these limits in subsections (a)(d) are shielded from damage awards. Section 512 (j) limits the availability of injunctive relief.

The DMCA has a specific provision for nonattribution of infringing conduct by graduate students and faculty of nonprofit educational institutions. This provision, 512 (e), applies to the conduct of graduate students and faculty involved in teaching and research if: (1) the activities do not involve online access to instructional materials that are required or recommended for a course taught at the institution within the preceding three-year period;(2) within that same three-year period, the institution received two or fewer DMCA notifications that a particular faculty member or graduate student engaged in infringement and no actionable misrepresentations were made in connection with such notifications; and (3) the institution provides information on copyright compliance.


The DMCA also adds sections 12011205 to the Copyright Act, implementing the World Intellectual Property Organization treaty provisions prohibiting the circumvention of technological copyright protection measures and protecting the integrity of copyright management information. Section 1201 defines circumvention of technological measures and prohibits circumvention of technological measures that restrict access to a copyrighted work and trafficking in the means to circumvent protective measures restricting access to a copyrighted work. A technological measure that controls access is defined as one in which the authorized access to a copyrighted work requires either application of information (such as a password) or a process or treatmentwith the authority of the copyright owner. Circumvention occurs whenever such technological measures are avoided, bypassed, deactivated, or impaired without the authority of the copyright owner.

Section 1201 (d) exempts nonprofit libraries, archives, or educational institutions that circumvent technological measures controlling access to a protected work that is not reasonably available in another form. Such conduct must be for the sole purpose of making a good faith determination of whether to acquire that work. This exemption does not apply to acts that fall under section 1201 (a)(2) or 1201 (b)(1), which prohibit trafficking in a product or service that is intended to circumvent technological copyright protection measures.

There is also a narrowly limited reverse-engineering exception, found in section 1201 (f), for circumvention of technological measures controlling access to a computer program. The exception exists for the sole purpose of identifying and analyzing those elements of a copyrighted work necessary to achieve interoperability with other independently created programs. Interoperability is defined as the ability of computer programs to exchange and share information. This section does not exempt acts of reverse engineering, but merely the circumvention of measures controlling access.

Computer Software

The issue of reverse engineering as copyright infringement was litigated before the Court of Appeals for the Ninth Circuit in Sega Enterprises Ltd. v. Accolade (1992). The court observed that "intermediate copying of computer object code may infringe the exclusive rights granted to the copyright owner in section 106 of the Copyright Act regardless of whether the end product of the copying also infringes those rights." The court held, however, that disassembly of copyrighted object code was a fair use, since it was a necessary step in the examination of unprotected ideas and functional concepts. The court recognized that there is no "settled standard" for identifying protected expression and unprotected ideas involved in determining copyright infringement of computer software.

See also: Faculty as Entrepreneurs; Faculty Consulting; Faculty Performance of Research and Scholarship; University-Industrial Research Collaboration.


Abernathy v. Hutchinson, 3 L.J. 209, 214215 (1825).

American Geophysical Union v. Texaco Inc., 37 F.2d 881 (2d Cir. 1994).

Amyes v. Bonelli, 980 F.2d 857, 862 (2d Cir. 1992).

Campbell v. Acuff-Rose Music, Inc., 114 S.Ct. 1164 (1994).

Community for Creative Non-Violence v. Reid, 490 U.S. 730 (1989).

Gershwin Pub'g Corp. v. Columbia Artists Management, 443 F.2d 1159 (2d Cir. 1971).

Harper & Row Publishers, Inc. v. Nation Enterp., 471 U.S. 539 (1985).

Hays v. Sony Corp. of Am., 847 F.2d 412 (7th Cir. 1998).

Sega Enterprises v. Accolade, Inc., 977 F.2d 1510, 1519 (9th Cir. 1992).

Universal City Studios, Inc., 464 U.S. 417 (1984).

Weinstein v. University of Illinois, 811 F.2d 1091 (1987).

internet resources

American Library Association Washington Office. 2002. Distance Education: Technology Education and Copyright Harmonization Act (The TEACH Act). <>.

Center for Intellectual Property at UMUC. 2002. (c) Primer. <>.

Copyright Management Center at IndianaUniversity. 2001. Fair Use Checklist. <>.

Crews, Kenneth D. 1999. Summary of U.S. Copyright Office Report on Distance Education. <>.

Gasaway, Laura N. 2002. "When Works Pass into the Public Domain." <>.

United States Copyright Office. 1999a. Copyright Office Study on Distance Education. <>.

United States Copyright Office. 1999b. Factsheet <>.

United States Copyright Office. 2000. Copyright Law of the United States. Circular 92, April. <>.

United States Copyright Office. 2002. Background and Testimony Related to the Copyright Office Study on Distance Education. <>.

Kimberly M. Bonner

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The concept of property is as old as civilization. As people acquired possessions or inhabited land or shelters, they sought to secure these items for personal or collective use. Customs and rules evolved to define ownership and specify the rights and responsibilities that attached to ownership. In conjunction especially with developments in science and technology, property has taken on intellectual forms that embody ethical stances and have policy implications.

From Property to Intellectual Property

The definition of property evolved as society invented or identified new things that can be owned. Property rights began with the physical or concrete, such as land, and eventually expanded to include more intangible or abstract phenomena (Horwitz 1992). Interference with such rights shifted from a physical invasion to interference with a proprietary right or a decrease in market value.

Property rights are a series of formal and informal rules governing what owners are allowed to do with their property and the degree to which they can exclude others from its use. Such rights describe relations "not between an owner and a thing, but between the owner and other individuals in reference to things. Property rights reflect societal values of how wealth should be distributed and protected.

Intellectual property is abstract and refers to the products of human intellect such as inventions, literary works, music, and art. Many societies historically have not recognized ownership in intellectual property. Others have associated names with achievements but have not provided serious protection. As societies industrialized, they found a need to protect intellectual property, especially the valuable products of science and technology. Intellectual property rights (IPRs) describe a bundle of rights or privileges that, like other property rights, allow the owner to use, derive income from, and transfer the ownership of the property.

Intellectual Property Rights

IPRs define the rights and privileges attached to ownership of intellectual property. Such rights allow owners to exercise a temporary monopoly over the use of their creations; they have exclusive rights, for a limited time, to decide who may use a product or work and under what conditions. Such rights define ownership and specify the degree to which inventors and creators may profit from their work, the access others may have to the works themselves or to information about them, and how others may use or improve upon existing works.

IPRs involve issues of wealth distribution, incentives for innovation and creativity, access to information, and basic human rights. Ethical issues attach to questions of what should be publicly or privately owned, how ownership is established, how much and how long the owner can control the property, and whether public policy should create exceptions to intellectual property rules to serve social interests.

IPRs encourage innovation by protecting new work from appropriation by others and allows people and institutions to profit from their work. Such rights promote the communication of information; as long as the right is in place, information can be published without fear of loss. IPRs also define public rights by indicating when private protections expire.

Rationales for IPRs fall into two categories, "instrumental rationales, which view intellectual property in terms of its benefits to society as a whole, and natural rights which stresses the inherent authority of innovators to control works they have created" (Schecter and Thomas 2003, p. 7). Instrumental rationales focus on the need for protection to promote societal goals, such as economic growth or technological innovation. Natural rights arguments, grounded in the philosophy of John Locke, assert that people are entitled to protection for the products of their minds, regardless of whether the protections serve other societal goals. The two rationales may lead to different policy decisions about the appropriate type and level of intellectual property protection.

Intellectual property protection is regarded as a basic human right. According to Article 27 of the Universal Declaration of Human Rights (1948), "Everyone has the right to the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he is the author." The reach of the right differs across nations, with industrial nations generally providing higher levels of protection than developing nations.

Constructing an IPRs system requires the balancing of often conflicting societal values and needs, such as the need to promote innovation; concerns for equitable distributions of wealth, information, and other benefits; and the desire to allow authors or inventors to profit from the fruits of their labor and imagination. Increasing protection in one area often detracts from another.

Types of Intellectual Property Law

The international system recognizes two types of intellectual property: industrial property, including but not limited to inventions, trade secrets, and trademarks; and copyright. Systems of IPRs laws differ across nations but often include the following.

Copyrights protect works of creativity and authorship such as literary, musical, and visual art, as well as audio recordings, choreography, and computer software. Laws specifying such protection must consider issues such as fair balance between private and public use, the need for public access to information, when protection should begin and how it can be triggered, and how to enforce protections.

Patents protect innovative products and processes by allowing the patent holder to control use of the invention for a limited period of time. In exchange for patent protection, inventors generally must agree to disclose information about their inventions to the public. Patents are generally restricted to inventions, including both products and processes, although the restrictions on patents have narrowed in recent years. Products of nature have generally not been patentable but improvements in biotechnology have challenged definitions of what is natural.

Trademarks identify the origin of products or services and are used to promote them. Trademark protection prevents others from using a trademark to promote a product or service of a different origin. Such protection prevents the appropriation of the competitive advantage trademarks are intended to provide.

Trade secret law protects proprietary business information from misappropriation. Some information, such as an industrial process, might be eligible for protection either under patent law or trade secret law but not both. Trade secrets must be protected from disclosure, while the patent process generally requires making information public.

Science, Technology, and Intellectual Property

Science and technology provide many societal benefits, such as the enhancement of economic growth or quality of life. They also can produce negative, unintended consequences. Most societies promote science and technology, but this can be costly. Establishment of IPRs that protect new works and give innovators the right to profit from their creations provides incentives for expensive innovation without the need for direct government subsidies (Posner 2004). At the same time, IPRs may maintain or aggravate wealth inequities.

Rights have little meaning unless they can be enforced and modern technology has made IPRs enforcement increasingly difficult. Photocopiers make it possible for anyone with access to a machine to reproduce works entitled to copyright protection and the Internet allows anyone to make literary or musical works available to the world.

Science and technology challenge intellectual property systems, particularly patent laws. New fields such as information technology and genetic engineering force courts to decide how to apply laws made before such technologies were contemplated. As knowledge itself becomes more valuable, people and institutions seek additional protection for control of the knowledge and its profits. At the same time, society has an increasing need for access to some kinds of knowledge and protection from the use of others.

Abstract ideas cannot be patented but their applications can qualify for patent protection. For example, "Einstein could not patent his celebrated law that E MC2; nor could Newton have patented the law of gravity. Such discoveries are 'manifestations of Nature, free to all men and reserved exclusively to none."' (Diamond v. Chakrabarty, p. 309, quoting Funk Brothers Seed Co. v. Kalo Inoculant Co., 333 U.S. 127, 130, 1948). General ideas remain in the public domain but their applications may be privatized through the patenting process.

Biotechnology, perhaps more than any other field, has challenged courts and lawmakers to reconsider intellectual property laws. In 1972 Ananda Chakrabarty, a microbiologist, sought a U.S. patent for a genetically engineered bacterium. The U.S. Patent Office denied the application because bacteria are products of nature, and living things cannot be patented under U.S. law. The case was appealed and eventually reached the U.S. Supreme Court. The Court restated the principle that natural phenomena cannot be patented, but found that Chakrabarty's bacterium was "a product of human ingenuity," and therefore was patentable under U.S. law.

So many biotechnology patents have been issued for such small innovations that some fear the creation of a tragedy of the anti-commons in which new innovations involve so many existing patents that innovation is discouraged. At least one study has found the anti-commons is not yet a significant deterrent to innovation, but that the situation should be monitored.

IPRs can be attached to writings or products regarded as dangerous or immoral, and IPRs tend to legitimize such works by implying social approval. Societies must decide whether to provide protection for harmful or otherwise objectionable work. New technologies, particularly those that create or replicate life, often trigger debate over whether the work should be done at all, much less be protected by law. IPRs also establish ownership of particular innovations, which may help to determine liability if a product causes harm. This raises questions of whether innovators should be held responsible for their products, particularly when the products are used in unintended ways.

Public funding for science and technology further complicate intellectual property issues. Who should benefit from works developed under public funding, the creator or the public? What balance of public/private benefits best serves societal goals?

Academics build their reputations by producing intellectual works. They seek recognition for their accomplishments, control over any economic benefits, and protection against plagiarism. IPRs promote release of information to the public by assuring the author of protection for the work, even after it is made public. IPRs protect authors from possible appropriation of ideas by others, including peer reviewers, before the work has actually been published.

Ownership can be a major IPRs issue. Who owns the product of collaborative work? At what point does a contribution by a supervisor, graduate student, or coworker deserve coauthorship? When the creator works for a corporation or a university, does ownership lie with the creator or the institution? What about funding agencies? In many cases, ownership or authorship is established by disciplinary customs or by agreements among the parties (Kennedy 1997).

Plagiarism is professionally unacceptable and sometimes illegal, but timing is critical to determining whether plagiarism has occurred. According to Donald Kennedy, "To take someone else's idea and use it before it has been placed in the public domain is a form of theft … [t]o make further use of someone else's idea after it has been published is scholarship" (1997, p. 212). Of course attribution is critical even, or especially, in scholarship, whether or not a work is protected.

International Intellectual Property Rights

The absence of an international sovereign makes a global IPRs system problematic. Every nation has different intellectual property laws, making cooperation difficult, although many international IPRs agreements have been developed. Which nation's standards should apply? Most international agreements take a national approach in which a country agrees to provide foreign innovators with the same protection provided to its domestic citizens. Creators of intellectual property generally must seek protection separately in each jurisdiction, a cumbersome process.

The United Nations World Intellectual Property Organisation (WIPO) provides support for the international intellectual property system. Its mission is "to promote through international cooperation the creation, dissemination, use and protection of works of the human mind for the economic, cultural and social progress of all mankind."

Globalization has increased the need for more international IPRs coordination. Multinational organizations seek consistent laws across borders and inventors want universal protection for their inventions. The World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) attempts to provide a more standard IPRs system and sets minimum protection that must be provided by all member states.

Ethical issues become particularly important at the international level (Rischard 2002). Some fear that increasing IPRs protection will increase inequities between the developed and the developing world. Others are concerned that IPRs deny access to products desperately needed by the poor or powerless. Still others believe adequate IPRs standards are critical to promoting technology transfer and foreign investment.

IPRs can deny access to essential products and information to those who need them most, particularly in developing countries. Drug research and development is extremely expensive, and pharmaceutical countries price drugs to recoup expenses and make a profit. No one else is allowed to manufacture drugs protected under patents. Those who need the drugs often have little money. Is it fair to allow people to die because they cannot afford drugs that could prolong their lives?

The TRIPS Agreement allows for compulsory licenses, an exception to IPRs in special cases such as emergencies, that give developing countries access to essential drugs for major health problems such as HIV/AIDS or malaria. Such policies may have a boomerang effect; pharmaceutical companies may be less likely to invest in research to develop drugs for conditions found primarily in poor countries if there is no profit to be made. The answer to the drug access problem may be better addressed by turning to solutions unrelated to intellectual property rights, such as foreign aid. Some pharmaceutical companies have made drugs available at drastically reduced rates to those who cannot afford them.

Inspiration for new products often comes from local or traditional knowledge. Who should benefit when a drug company develops a new drug based on knowledge about the properties of a plant gained from an indigenous tribe in a remote region? Is the company that developed a commercial drug entitled to all the profits or should it share revenues with the people who supplied the information or with the country from which the plants are harvested?


Consensus exists over the need for IPRs but not over the content of such rights. Countries that produce more science and technology and other intellectual property support more protection than other nations. Globalization requires more consistency in IPRs than has traditionally been available. IPRs help to promote innovation and the communication of information, but questions remain about the appropriate balance between public and private rights, the nature of ownership, and the equitable provision of access to products and information. Debates continue over the types of intellectual property that should be protected by law. New technologies intensify such debates, particularly technologies that create new or duplicate old life forms.


SEE ALSO Human Rights; International Relations; Property; Science, Technology, and Law.


Horwitz, Morton J. (1992). The Transformation of American Law: 1870–1960. Oxford: Oxford University Press. General property rights are addressed throughout this treatment of the development of American law over a ninety-year period. IPRs are not specifically treated.

Kennedy, Donald. (1997). Academic Duty. Cambridge, MA: Harvard University Press.

North, Douglass C. (1990). Institution, Institutional Change and Economic Performance. Cambridge, England: Cambridge University Press. This book discusses how formal rules develop, including property rights; it does not specifically discuss IPRs.

Posner, Richard A. (2004). Catastrophe: Risk and Response. Oxford: Oxford University Press.

Rischard, Jean-François. (2002). High Noon: 20 Global Problems, 20 Years to Solve Them. New York: Basic Books.

Schechter, Roger E., and John R Thomas. (2003). Intellectual Property: The Law of Copyrights, Patents and Trademarks. St. Paul: West. This comprehensive reference covers American intellectual property law in great detail, including the history of, rationales for, and elements of each right.

Walsh, John P.; Ashish Arora; and Wesley M. Cohen. (2003). "Effects of Research Tool Patents and Licensing on Biomedical Innovation." In Patents in the Knowledge-based Economy, ed. Wesley M. Cohen and Stephen A. Merrill. Washington, DC: National Academies Press.


World Intellectual Property Organization. (2005). WIPO Intellectual Property Handbook: Policy, Law and Use. Available from General organization site can be found at This site provides a wealth of materials on intellectual property rights.

World Trade Organization. TRIPS Material on the WTO Website. Available from

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Intellectual Property Rights

Intellectual property is a term used to cover goods and services protected under the laws governing patents, trademarks, copyrights, and trade secrets. Although the legal rights concerning different kinds of intellectual property are similar in a general sense, they differ specifically in what they protect and in how the particular rights are established. Patents protect an inventor's right to exclude others from making, manufacturing, using, or selling an inventor's invention. Trademarks protect words, phrases, symbols, and designs. Copyrights protect original artistic, musical, and literary works, including software. Intellectual property rights can also encompass state trade secrets laws, which protect a company's proprietary and confidential information, such as methods of manufacturing, customer lists, supplier information, and the materials used during the manufacturing process.


A patent is a grant of a property right by the United States government, through the Patent and Trademark Office (PTO), to the inventor of an invention. In 1995 U.S. patent law was changed so that it would conform to the World Trade Organization's Agreement on Trade-Related Aspects of International Property Rights as decided in the Uruguay Round. Applications filed on or before June 8, 1995 have a term of twenty years from the earliest filing date. Applications pending on June 8, 1995 and patents that were in force on this date have the longer term of either seventeen years from the issue date or twenty years from the earliest filing date. Design patents, as opposed to utility patents, have fourteen-year terms. Some patents require the payment of patent fees. A patent is not a grant of the right to make, manufacture, use, or sell the invention, but rather the right to exclude others from making, manufacturing, using, or selling the invention.

The power to grant rights in patents arises from Article I, section 8 of the U.S. Constitution. The first patent law was passed in 1790, and the current law governing patents took effect in 1953. Since the first statute, over 6.5 million patents have been granted. The current statute set forth the subject matters for which patents may be granted and the conditions under which a patent will be issued. It also established the Patent and Trademark Office (PTO).

Under the law, anyone who invents or discovers any new and useful process, machine, manufacture or composition of matter, or any new and useful improvements thereof, may obtain a patent. Courts have interpreted this language to include nearly anything that could be fabricated. One cannot, however, patent literary works, compilations of data, compositions of music, legal documents, or forms of energy. An invention must meet the test of being new under the standards in the law before a patent will be granted. The subject matter of an invention must be sufficiently different from what has been described before in a printed publication of some sort anywhere in the world, or on sale in the United States before the date of the application for the patent. In addition, the invention must not be obvious to a person who has ordinary skill in the relevant technical or scientific area at the time the inventor applies for the patent. Finally, an invention must be determined useful before obtaining a patent, although this requirement is interpreted very broadly.

The legal status of business method patents varies from country to country. It is difficult to obtain a patent for methods of doing business in China, India, Mexico, Israel and most of Europe. Under U.S. patent law, business methods are judged according to the same requirements as any other application. Before the 1980s and 1990s, the PTO stated that business methods were not patentable, but it became difficult to differentiate between technological inventions and business methods when judging applications for computer-implemented methods of doing business. Therefore, the PTO decided that business methods were patentable if they used the technological arts, but this position was overturned in 2005. Currently, the PTO requires that a process produce a useful and concrete result to be eligible for a patent.

Only the inventor may apply for a patent, unless he has died or has been declared insane. An inventor applies for a patent by sending to the Commissioner of Patents and Trademarks a written specification, which is a description of the invention and of the process by which the

invention is made and how it is used. The specification must contain one or more claims about the subject matter that the applicant believes pertains to the invention, and include necessary drawings. The specification must be accompanied by a sworn oath or declaration by the inventor that he or she is the original and first inventor of the subject matter of the application, and the necessary filing fees.


A trademark is a word, name, phrase, symbol, or design, or a combination of these elements, which identifies and distinguishes the source of goods or services. The term trademark also encompasses service marks, which identify and distinguish the source of a service rather than a product. Trademark rights are used to prevent others from making, promoting, or selling goods or services which have a name, symbol, or design that is confusingly similar to that of an established trademark. It does not, however, prevent others from making or selling the same goods or services, as long as it is under a different, non-confusing mark.

There are two distinct types of rights in a trademark or service mark: the right to use the mark and the right to register the mark. These rights arise from either using the mark in actual commerce, or filing an application for registration of the mark with the PTO.

The Trademark Act of 1946, 15 U.S.C. Section 1051 et seq.; the Trademark Rules, 37 C.F.R. Part 2; and the Trademark Manual of Examining Procedure (2nd ed. 1993) control the registration of marks. The first party who either uses a mark in the course of commerce or business or files an application for registration with the PTO usually has the right to register that mark. A party can use a mark, or establish rights in it, without filing an application for registration. The registration, however, creates a presumption that the party who has registered the mark is the owner of the mark for the goods and services set forth in the registration application, and therefore has the right to use the mark anywhere in the country. This presumption can become important when two parties unintentionally begin using similar marks and become involved in a lawsuit over who has the right solely to use the mark. This is not determined by the PTO, but by a federal court, which has the power to issue an injunction to stop a party from using a mark, and to award damages for a party's improper use of another's mark.

Similarly, the owner of a mark may use the trademark () or service mark (SM) designation with the mark to make it clear that the owner is claiming rights in the product or service so designated. The trademark or service mark designation may be used without the owner having registered the mark with the Patent and Trademark Office. If it is registered, however, the owner may use the registration symbol (®) with the mark.

Rights in a trademark, unlike rights in a copyright or a patent, can last for an indefinite period if the owner of the mark continuously uses the mark for its products or services. Federal registrations last for ten years, but between the fifth and sixth year after the date of the initial registration, the person who registered the mark must file an affidavit with information about the mark and ownership. If the registrant does not file this affidavit, the registration is cancelled. After the initial registration period, the mark can be renewed for successive ten-year terms. Registration of a mark with the PTO provides protection from others using the mark in the United States and its territories, but does not extend to its use in other countries.


A copyright gives an owner of original works of authorship the exclusive right to reproduce the work; prepare derivative works based on the copyrighted work; and distribute, perform, or display the work. Copyrights are registered with the Library of Congress Copyright Office. The first Copyright Act was passed in 1790, and it has been revised many times, most recently in 1976. This act sets forth eight categories of works that can be copyrighted. These are as follows:

  1. Literary works
  2. Musical works, including lyrics
  3. Dramatic works, including music
  4. Pantomimes and choreographic works
  5. Pictorial, graphic, and sculptural works
  6. Motion pictures and other audiovisual works
  7. Sound recordings
  8. Architectural works

These categories are interpreted broadly, so that, for example, software is considered copyrightable as a literary work. However, the act does not protect an idea, procedure, process, system, method of operation, concept, principal or discovery regardless of the form in which it is described, explained, illustrated or embodied in such work.

The term of a copyright is for the period of the life of the owner, plus fifty years. An entity or person can become the owner of a copyright in two ways, either by creating the work personally, or through owning a work for hire. Works for hire cover situations where an employee creates a work at the request of an employer (and the employer thereby owns the copyright), or where someone commissions the creation of a work, and the party commissioning the work and the creator have agreed in writing that the commissioning party shall be the owner and that the work shall be a work for hire.

In 1988, the United States became a signatory to the Berne Convention, by enacting the Berne Convention Implementation Act. The Berne Convention provides copyright protection for a copyright owner simultaneously in most countries in the world. To become a signatory country, the United States had to amend the Copyright Act to create a copyright in a work automatically upon completion of the creation. Now, as soon as a composer finishes a work or an author writes the last words of an article, there exists a copyright. However, if an owner wishes to sue for copyright infringement, the owner must register the copyright with the United States Copyright Office by completing an application, and sending it with two copies of the best edition of the work and the filing fee.


Efforts to protect intellectual property became vastly more complicated with the growth of Internet technology in the late 1990s and early 2000s. The global computer network gave people greater access to all kinds of creative works, and in many cases enabled them to copy such works without regard to legal protection. Virtually all creative content can be digitized, even if it was not initially created on a computer, and the Internet has become the primary distribution channel for every kind of digital material, Jonathan Cohen explained in his article Copyright and Intellectual Property in the Age of the Internet.

Since the Internet has an international reach, the digital age has also brought to light discrepancies in intellectual property laws between nations. Several attempts have been made to bring the protection granted by developed and developing nations in line. In 2002, for example, the World Intellectual Property Organization Copyright Treaty (WCT) was ratified by the United States, Japan, and the European Union. The WCT updated the Berne Convention to apply to the Internet age, setting international standards for the protection of literary and artistic works in digital form.

Simultaneously, major content providers have taken steps to protect their own intellectual property from unauthorized reproduction through digital rights management (DRM) technology. DRM systems involve anti-piracy measures that are built into software, video, and music files sold over the Internet to ensure that the owners of intellectual property are compensated for its use. DRM has proved cumbersome to consumers, however, because different content providers have established their own, usually incompatible, DRM systemsmaking it difficult for users to access content packaged and distributed with one DRM technology using a device that supports a different technology.

Some legal experts have also expressed concern that content providers will use DRM technology to erode the rights previously granted to the public under the fair use doctrine of copyright law. Whether a specific use of copyrighted material is determined to be fair depends on four factors: the purpose and character of the use; the nature of the work; the portion of the work used; and the effect of the use on the market for the work. Fair use protects such activities as videotaping a television program for later viewing, posting a newspaper cartoon on an office bulletin board, and quoting from a book in a report. In view of the rapidly evolving nature of intellectual property protection in the Internet age, business managers should seek legal advice in order to protect their own creative works as well as to avoid infringing on the rights of others.


Cohen, Jonathan. Copyright and Intellectual Property in the Age of the Internet. Jonathan Cohen and Associates. Available from:

Dutfield, Graham. Does One Size Fit All? The International Patent Regime. Harvard International Review Summer 2004.

.Guarding Intellectual Property on the Internet. PC World 7 December 2001.

Noble, Steve. The Internet and Digital Copyright Issues. Photo Marketing January 2005.

.Tide Turns in DRM Wars with Creation of Coral Consortium. Online Reporter 9 October 2004.

.U.S. Code Collection.35 U.S.C. 154.

USPTO white paper. Automated Financial or Management Data Processing Methods. Available from:

Von Lohmann, Fred. Fair Use and Digital Rights Management. Electronic Frontier Foundation. Available from:

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Few fields of law faced more rapid transformation from the effects of Internet and e-commerce than the realm of intellectual property. Intellectual property (IP) is considered to be the intangible result of intellectual work, such as inventions, literary and artistic works, and commercial symbols, names, images, and designs. Advances in communication and information technology have dramatically affected intellectual property rights.

Intellectual property laws concern the rights and protections pertaining to copyright, patents, trademarks, and trade secrets. Copyright and patent law debates often bring society's desire for free access to information into conflict with creators' and inventors' wishes to profit from and protect their creations. Businesses have intellectual property interests in safeguarding their identities and competitiveness through trademark and trade-secret protections.

The resolution of intellectual property questions was generating large-scale transformations in many Internet-related industries, as well as in fundamental legal issues such as privacy and freedom of information and expression. Since many online transactions transcend national borders, some observers predict that the challenges created by the Internet will result in the wholesale revision of both U.S. and international intellectual property laws.


Copyright protects a creator's or copyright owner's rights to control the publication, performance, duplication, and profitability of created works. Such works include literature, musical compositions, choreography, graphic and fine arts, motion pictures, and sound recordings. U.S. copyright protects the expression of ideas, rather than ideas themselves; it arises automatically when a creative work is expressed (or "fixed") in a tangible medium. Though registration for copyright is optional, creators cannot file suit for infringement without having registered. Copyright owners can sue for damages and courts can issue injunctions to prevent further infringement.

Limitations on copyright protection include the unauthorized "fair use" of a work by others for noncommercial purposes such as criticism, comment, news reporting, teaching, or research. Under the "first sale doctrine," libraries and archives may generate one copy of a work for archival conservation and the owner of a copy of a work may sell, lend, or dispose of that copy. Finally, all works in the public domain may be freely duplicated, performed, and distributed.

U.S. copyright laws must maintain the difficult balance between protecting creators' rights to control and derive compensation for their works and society's right to free access and spread of information. That the Internet enables users anywhere to produce essentially identical copies of any digital content and disseminate them throughout the world at virtually no cost has significantly raised the stakes of copyright protection.

The Copyright Clause of the U.S. Constitution provides that: "Congress shall have power to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries." Even unintentional or accidental violation of these rights may be prosecuted.

The basic provisions of American copyright law are set forth in the Copyright Act of 1976. In addition to traditionally recognized creative works, the Act also protects online text, image, and sound files. Copyright holders may bring civil suits or the federal government may prosecute the intentional infringement of copyright committed for commercial advantage or financial gain. Besides direct infringement, contributory infringement and vicarious liability, through which one person aids another in carrying out copyright infringement, can constitute criminal liability.

Several subsequent copyright laws affect copyright in cyberspace. In 1992, the Copyright Felony Act targeted computer software piracy; earlier, only unauthorized copying of sound recordings, motion pictures, or audiovisual works constituted federal copyright felonies. The Digital Performance Right Act of 1996 required that anyone wishing to use non-original music for public digital performance on a Web site obtain license from the copyright owner.

In 1997, the No Electronic Theft (NET) Act abandoned the requirement that intentional infringement be committed for financial gain in order to be prosecutable. This criminalized even infringement carried out simply to harm another. Some commentators suggested that henceforth, since online browsing involves copying in the statutory sense, anyone who browses copyrighted content without permission could be guilty of actionable copyright infringement.

Congress enacted the Digital Millennium Copyright Act (DMCA) of 1998 to further amend U.S. copyright law in light of Internet-related concerns. The Act aligned U.S. legislation more closely with international copyright legislation as embodied in the World Intellectual Property Organization's (WIPO) Copyright Treaty. In addition, it prohibited anyone from circumventing technology intended to block unauthorized access to copyrighted material on the Web, such as decrypting protected content. The DMCA does permit authorized institutions to make up to three digital copies for preservation and to electronically "loan" those copies to other institutions.

At the state level, the Uniform Computer Information Transactions Act (UCITA) has been under consideration by state legislatures since 1999. It limits fair use rights of copyrighted digital materials, and classifies software and software-related products as "licensed information." UCITA faced stiff opposition from many state Attorneys General, the American Intellectual Property Association, and advocacy groups representing consumers, publishers, newspapers, libraries, retail, and law professors, who warn that UCITA's insistence on widespread digital-content licensing could severely erode legitimate fair use exceptions of online content, since licenses can contain clauses regulating the manner and time period for which the content can be accessed, and limit who can use it.

Still, the law on the Internet and copyright remains unclear. Several areas of particular confusion are:

  • Whether a specific online work is original enough to merit copyright protectionarticles, essays, and many graphic or sound works usually are, but factual content and databases may not be.
  • Which specific Internet-related activities constitute copyright violations. Does uploading hard copies to the Internet, forwarding online content to a listserv, or linking to another Web site constitute infringement or fair use?
  • Does an author's consent to having his or her creation put onto the Web imply tacit agreement to users browsing, downloading, and forwarding copies of their work?
  • What is the liability of internet service providers (ISPs) and bulletin board operators for possible copyright infringements committed by their subscribers? Can they be sued for unintentional, vicarious liability?

Intellectual property rights in higher education was an area of particular concern, raising questions about who owns rights to online course content, lectures, and e-publications. In cyberspace, traditional fair-use exceptions regarding copyrighted materials may not protect free access to online materials for academic purposes. Libraries may not enjoy the right of "first sale"which traditionally permits them to purchase works and then lend them to borrowerswhen it comes to e-materials.

The Clinton administration's Information Infrastructure Task Force Working Group on Intellectual Property Rights encapsulated a series of sweeping policy recommendations in a 1995 report, "Intellectual Property and the National Information Infrastructure." The report detailed emerging trends and proved highly influential in shaping U.S. domestic and foreign intellectual property initiatives. Among its conclusions, the report argued that browsing and distributing content without the creator's explicit permission violates the Copyright Act. It also called for the creation of copyright holders' exclusive rights to control the transmission of their copyrighted digital content. The report spurred controversy, with opponents claiming that these copyright extensions harmed the public interest in the free flow of information. Proponents, however, noted that creators and copyright holders have much more precarious control over their works in cyberspace than they do in the real world.


A trademark protects a company's name and logos and distinguishes them from competing products or services sold by others. Registering trademarks permits the owner to enjoy exclusive use of the trademarks in the U.S. or a state, and to sue others for infringement in federal or state court. Registration is not granted if the mark is identical to an existing mark or resembles one closely enough to cause "confusion" or "to deceive."

Trademark law affects Internet-related issues in two particular areas. Domain names can function almost like trademarks and help to identify a business online. Trademarks and domain names have become the targets of cyber-squatters, who illegally register them in the hopes of later reselling them to the original owner for a profit. A particularly noted form of domain-name dispute involved Hollywood celebrities who pursued arbitration via WIPO's Uniform Dispute Resolution Policy channels to combat cyber-squatters for "bad faith" registration of domain names similar to their own. The other major problem concerns how trademark law is implicated in the use of URLs in hyperlinks.


The federal Patent and Trademark Office (PTO) can issue patents to anyone who invents or discovers a process, machine, or method of manufacture that is "novel," "useful," and "nonobvious." The patent grants exclusive rights to control the production, use, and sale of the invention within all U.S. jurisdictions. The patent holder can sue even for inadvertent infringement.

A trade secret is any information used in the operation of a business that provides the business an advantage, including scientific, technical, or commercial information, and even customer lists. The owner must protect the trade secret from becoming widely known. Wrongful disclosure or use of a trade secret may be enforced in court against anyone who has a duty to maintain secrecy.

Among recent legislation was the Economic Espionage Act (EEA) of 1996, which made the theft of trade secrets a federal crime. It broadened the definition of property to include the phrase, "tangible or intangible, and whether or how stored," which facilitates prosecution for trade secrets taken in electronic form.


Economic globalization and international e-commerce have had profound effects on the status of intellectual property in the global arena. Complications are acute for copyright, and encompass problems of legal jurisdiction, difficulties of enforcement, and countries with widely divergent levels of intellectual property protection. The most widely reported international IP infringement was piracy. Many observers remark that globalization will force the increasing standardization and convergence of intellectual property laws internationally.

Numerous bilateral and multilateral treaties govern international copyright. The fundamental treaty for copyright protection remains the Berne Convention for the Protection of Literary and Artistic Works. Dating from 1886, the Convention grants authors exclusive rights to control the reproduction, public performance, broadcast, and adaptation of their works. The U.S. did not join the Berne Convention until 1988.

Many European countries extend stronger copyright protection than does the U.S. These include the recognition of authors' "moral rights" in a work, which are separate from economic rights. Moral rights include the rights to be recognized as a work's creator, to shield a work from distortion, to retract or amend content, and to decide whether a work should be published at all.

The leading international authority on intellectual property law is the World Intellectual Property Organization (WIPO), which administers relevant international treaties and helps settle international disputes. WIPO unveiled two major intellectual property treaties in 1996: the Performances and Phonograms Treaty and, more importantly, the Copyright Treaty. The latter extended Berne Convention protection to digital works, classifying computer programs as literary works. It expanded the basic notion of copyright to embrace the "right of communication," including online transmission. It also contained the earliest regulations prohibiting the circumvention of measures designed to protect copyrighted works, such as encryption and digital-rights management systems.

The most wide-ranging international legislation was the 1994 Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) Agreement. It sets forth comprehensive, minimum standards of international intellectual property protection that largely favor protection over the free flow of information. TRIPs contains mandatory enforcement procedures and sanctions for the failure to implement them. TRIPs prohibits preferential measures for developing countries, which were held to full compliance after a five-year transitional period. Critics argue that such provisions will place developing countries, which often lack even rudimentary intellectual property protection regimes, at an even greater disadvantage in the global e-commerce arena.


"Digital Rights and Wrongs." Economist, July 17, 1999.

Dinwoodie, Graeme. "A New Copyright Order: Why National Courts Should Create Global Norms." University of Pennsylvania Law Review, December, 2000.

Ellis, Davis. "Cyberlaw and Computer Technology: A Primer on the Law of Intellectual Property Protection." Florida Bar Journal, January, 1998.

Gladney, Henry. "Digital Intellectual Property: Controversial and International Aspects." Columbia-VLA Journal of Law & the Arts, Fall, 2000.

Hsieh, Lilli, McCarthy, Jennifer, and Elizabeth Monkus. "Intellectual Property Crimes." American Criminal Law Review, Spring 1998.

Mutchler, John. &lquo;Will the Digital Millennium Copyright Act Stunt Global Electronic Commerce?" Intellectual Property Today, October, 2000.

Panchak, Patricia. "Old Rules for the New Economy." Industry Week, March 5, 2001.

Reichman, J.H. "The TRIPs Agreement Comes of Age: Conflict or Cooperation with the Developing Countries?" Case Western Reserve Journal of International Law, Summer, 2000.

Samuelson, Pamela. "The Digital Rights War." Wilson Quarterly, Autumn, 1998.

Tennant, Roy. "Copyright and Intellectual Property Rights." Library Journal, August, 1999.

SEE ALSO: Cybersquatting; Higher Education and the Internet; Intellectual Capital; Legal Issues; World Intellectual Property Organization (WIPO)

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INTELLECTUAL PROPERTY RIGHTS Intellectual property (IP) awareness in India has recently experienced a sharp increase. From 1972 to the 1990s, research and development expenditure in the country grew more than fifty times, but patent filing remained static at 3,500–4,000 applications per year. Though new inventions were being made, they were not being protected, due to a general distrust of the system, coupled with a lack of awareness.

This situation has now changed. As of 2005, India's Council for Scientific and Industrial Research was the third-largest applicant from developing countries under the Patent Cooperation Treaty. The number of patent applications being filed annually has more than doubled, to over 10,000, as people are recognizing the potential of their creative skills and channeling them into productive resources.

The Indian courts have also started granting substantial damages in IP cases. Initially, the courts were reluctant to grant damages, being more sympathetic to a defendant whose business was restrained through an injunction. There has, however, been a radical change in the approach of the courts.


Since 1999 Indian law relating to IP rights has doubled in volume as a result of the requirements of the World Trade Organization agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). New IP laws have been enacted, including: the Geographical Indications of Goods (Registration and Protection) Act, 1999; the Protection of Plant Variety and Farmers' Act, 2001; the Information Technology Act, 2000; the Semi-Conductor Integrated Circuits Layout Design Act, 2000; and the Bio Diversity Act, 2002.

The Patents (Amendments) Act of 2002 was enacted, taking effect on 20 May 2003, in line with India's phased compliance with its TRIPS obligations. The act established a patent term of twenty years; exclusive marketing rights; patentability of microorganisms; expansion of the list of nonpatentable inventions; and patentability of software-related inventions. The time period for the grant of most patents was reduced from over five years to about two years.

On 26 December 2004 the government of India also promulgated the Patents (Amendment) Ordinance of 2004 to make Indian patents law compliant with TRIPS, ( January 2005). This ordinance ushers in a product patent regime for all fields of technology and is of particular relevance to drugs, pharmaceuticals, and chemicals. The ordinance clarifies the Indian position on the patentability of software inventions by stating that embedded software as well as software/hardware combinations would qualify for patents. However, the provisions relating to exclusive marketing rights have been deleted. The Indian Parliament on 23 March 2005 passed the Patents (Amendment) Bill of 2005, to replace the Patents (Amendment) Ordinance of 2004.

Intellectual Property Litigation

While the Indian courts continue to deal with traditional IP matters pertaining to "passing off" and counterfeiting, an attempt is being made by rightful owners as well as the courts to take IP litigation to the next level. The courts have adopted an innovative and experimental approach, rather than remaining rule-bound. This was achieved by expanding and developing well-established principles and by exploring new legal avenues.

In the first case of its kind, the Delhi High Court in Emergent Genetics India Pvt. Ltd v. Shailendra Shivam in 2004 applied principles of the law of confidentiality in giving protection to hybrid cotton seeds that are genotypically identical to those of the plaintiff, and principles of copyright law, to protect unique sequencing information locked inside genes of hybrid varieties of the plaintiff.

The courts have started to grant compensatory damages in IP litigation and have also begun to grant punitive and exemplary damages. The case that set the benchmark was Time Incorporated v. Lokesh Srivastava & Anr, in which the High Court of Delhi granted 500,000 rupees as damages to the plaintiff on account of loss of reputation, and punitive and other damages of an additional amount, for a total of 1.6 million rupees. The court held that the defendant's magazine, which used the Hindi transliteration of the word "time" with the word sanskaran and a distinctive red border, to be a slavish imitation of the plaintiff's trademark and held the defendant liable for infringement.

This trend was followed in numerous cases, including:

In the case of Amarnath Sehgal v. Union of India (1992), the High Court of Delhi ordered the government of India to pay 500,000 rupees of damages to the plaintiff, a world-famous sculptor, for the violation of his moral rights by their act of distortion, damage, and mutilation of his bronze mural, which had been sold to the government, and also directed a return of the mural itself to the sculptor.

In the case of Buffalo Networks Pvt. Ltd. & Others v.Manish Jain & Others (2000), the Delhi High Court protected the domain name rights of the plaintiffs, a media and advertising company, by restraining the defendant from using the domain name "" or the word "tehelka" on the Internet or otherwise, awarding a sum of 100,000 rupees as damages against the past misuse of the same by the defendants.

In Tata Sons Limited v. Fashion ID (2005), the Delhi High Court directed the transfer of the domain name "" to Tata Infotech Education from a Chinese registrant, and awarded an amount of 100,000 rupees as costs to Tata Infotech.

In Microsoft Corporation v. Yogesh Popat (2003), the Delhi High Court awarded a sum of 1.98 million rupees as damages to Microsoft Corporation, with 9 percent interest, for the infringement of its IP rights in its software programs.

Pharmaceutical Patents

The Patents (Amendments) Act of 2002 had had some far-reaching implications for the pharmaceutical sector with the introduction of requirements envisaged by the Doha Declaration of 2001 by the World Trade Organization in the form of a provision for the grant of a license to manufacture generic drugs on notification of the central government in a national health emergency, thus overriding international pharmaceutical patents. The emergency circumstances include "public health crisis relating to Acquired Immuno Deficiency Syndrome (AIDS), Human Immunodeficiency Virus (HIV), Tuberculosis (TB), malaria or other epidemics."

On 26 December 2004 the government of India enacted the Patents (Amendment) Ordinance of 2004, introducing product patents for all fields of technology, including drugs and pharmaceuticals. That ordinance has now been replaced by the Patents (Amendment) Bill of 2005.

Amendments brought about by the new legislation have raised concerns in the pharmaceutical industry that the prices of drugs might increase tremendously. Given the advent of a faster and more effective patent protection regime, the vibrant Indian pharmaceutical industry is gearing up to face challenges. The highly fragmented Indian pharmaceutical sector, with approximately 22,000 registered units employing around 460,000 people, is led by about 250 companies that control 70 percent of the market share. Besides being one of the top five bulk drug manufacturers in the world, India is also among the top twenty pharmaceutical exporters in the world.

India has also become an attractive destination for clinical trials. India anticipates the gain of a large share of the multi-billion-dollar global business of clinical trials in drugs. In India the clinical research industry is projected to bring in over U.S.$100 million in 2005, and potentially over $1 billion by 2010.

Protection of Small Farmers

Over 200 million Indian farmers and farm workers have been the backbone of India's agriculture. Despite having achieved national food security, the well-being of the farming community continues to be a matter of grave concern for the country. The establishment of an agrarian economy, which ensures food and nutrition for India's billion people, raw materials for its expanding industrial base and surpluses for exports, and an equitable reward system for the farming community for the services it provides to society, will be the mainstay of reforms in the agriculture sector. These concerns led to passage of the Protection of Plant Varieties and Farmers' Rights Act in 2001. The act provides for the establishment of an effective system for the protection of plant varieties, the rights of farmers and plant breeders, and the development of new varieties of plants.

The government of India introduced the Seeds Bill in 2004, in place of the existing Seeds Act of 1966. Although the main purpose of the 2004 Seeds Bill was to address farmers' concerns regarding sowing, use, exchange, and sale of seed, the bill has in turn made it more difficult and cumbersome for a farmer to sell seeds or exchange or reproduce seeds. The bill makes it compulsory for a seed of any kind or variety to be registered if it is sold for the purpose of sowing or planting. Even for bartering of seeds, the person doing so must obtain a registration certificate as a dealer in seeds from the state government.

The bill has obviously made the sale, import, export, and bartering of seeds more transparent by laying down various procedures. However, government intervention has increased. Compensation to farmers in cases where the seed fails to provide the expected performance has been provided for. However, the farmer can claim this from the producer, dealer, distributor, or vendor under the Consumer Protection Act of 1986. Therefore, although there are provisions providing benefits to the farmers, they are cumbersome.

India also has a unique position in the world insofar as it accounts for 7 to 8 percent of Earth's total biodiversity. India is also one of eighteen "mega-diverse" countries, which together possess 60 to 70 percent of the world's biodiversity. For the conservation of its biodiversity, important steps taken by India include enactment of the Biological Diversity Act of 2002 to protect India's rich biodiversity and associated knowledge against their use by foreign individuals and organizations without sharing the benefits arising from such use.

Pravin AnandSagar Chandra Anand

See alsoInformation and Other Technology Development ; World Trade Organization (WTO), Relations with


"India Can Earn $1B from Clinical Trials." Times of India, (New Delhi), 29 March 2005.

Sahai, S. "India's Plant Variety Protection and Farmers' Rights Act, 2001." Current Science 84, no. 3 (February 2003).

South Asia Watch on Trade, Economics and Environment. "Protecting Mountain Farmers' Rights in India." Policy brief available at <>

Watal, Jayashree. Intellectual Property Rights in the WTO andDeveloping Countries. The Hague and Boston: Kluwer Law International, 2001.

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Property Rights, Intellectual


Intellectual property rights (IPR, or IPRs) are the rights of artists and inventors to get legal protection against unauthorized copying of their work. There are three main subtypes of IPRs: copyrights, trademarks, and patents. Copyrights apply to literary and artistic works, such as books, music, and computer programs; trademarks cover brand names, such as Coca-Cola®; and patents are awarded for new and useful inventions, such as the active ingredient of the molecule of a new antihypertension drug. In advanced industrial countries, IPRs account for an increasingly larger proportion of gross domestic product (GDP). In less developed countries, however, very little indigenous copyright-, trademark-, and patent-protected goods are produced.

Genuine IPR goods are often prohibitively expensive for citizens of the developing world. For example, in many countries in Asia and Africa, the cost of a computer software program is equal to the average per capita income. Thus, global income inequalities have given rise to a situation in which developing countries produce and consume illegitimate copies of IPR-protected goods. Usually, these goods are referred to as either pirated goods (for copyright-protected goods, such as software, books, and music) or counterfeit goods (for trademark- and patent-protected goods). The severity of piracy and counterfeiting varies, depending on the type of goods, the historical period, and the geographical location of goods. For example, the United States was notorious for not protecting foreign copyrights well into the twentieth century. Similarly, many African and Asian countries do not provide patent protection for pharmaceuticals. At the turn of the twenty-first century, software piracy and trademark counterfeiting are the best-known examples. According to estimates of the Business Software Alliance (BSA), in 2005 alone, $34 billion worth of business software was pirated worldwide. While copyright piracy poses no threat to consumers, some trademark and patent counterfeiting can have harmful effects on consumer health and safety. For example, fake (counterfeit) foods and medicines can lead to human death, while fake automobile parts have been linked to traffic deaths (Phillips 2005). One example of a counterfeit food is the Sars candy bar appearing in 2003, which is a counterfeit of the Mars candy bar.

How can IPR counterfeiting be eliminated? IPRs are protected both by national legislation and by various types of international treaties. In the United States, the 1976 Copyright Act, the 1946 Trademark Act (Lanham Act), and the 1985 Patent Act provide guarantees for the holders of IPRs. Most countries around the world have national laws protecting at least some types of IPRs. In addition, there are several dozen international IPR treaties. The main IPR treaties are the 1886 Berne Convention for the Protection of Literary and Artistic Works (for copyrights) and the 1883 Paris Convention for the Protection of Industrial Property (for trademarks and patents). The World Intellectual Property Organization (WIPO) in Geneva administers the Berne and Paris Convention, in addition to twenty-two other treaties covering the entire panoply of IPRs. Currently, WIPO has 183 member countries. Separately from WIPO, the World Trade Organization (WTO) administers the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which has been ratified by 149 countries. Despite the wealth of international agreements, however, there have not been radical improvements in the protection of IPRs in individual countries, and piracy and counterfeiting continue to exist around the world. This situation exists because international agreements are not self-enforcing and cannot be implemented without the will of individual national governments.

There are two mechanisms through which developed countries can compel developing countries to enforce international IPR agreements. The first one is the threat of trade sanctions. In the United States, the Omnibus Trade and Competitiveness Act of 1988 allows the U.S. Trade Representative to impose trade sanctions against countries that do not provide adequate IPR protection. Although virtually never imposed, the threat of trade sanctions can help sensitize some countries about the need to enforce IPR laws. This is a particularly powerful instrument against small states (e.g., Thailand) that are heavily dependent on trade with the United States. For bigger states, however, the threat of trade sanctions is not an effective mechanism for bringing about meaningful improvements in IPR enforcement. In such countries, the threat of withdrawing foreign direct investment (FDI) has proven to be a more successful strategy. For example, in China, the Quality Brands Protection Council (QBPC), representing more than 100 foreign companies with over $20 billion of investment in China, has been remarkably successful in lobbying the Chinese government to enhance IPR enforcement (Dimitrov 2004). Developing countries that invest in IPR, especially the development of indigenous patented technology, can be more competitive in the global economy.

In conclusion, IPRs protect valuable, yet often pirated products. Although multiple international IPR treaties exist, good enforcement depends on the will of domestic governments to implement them. When properly applied, foreign pressure can help sensitize the governments of developing countries to the benefits of providing stronger IPR protection.

SEE ALSO European Union; World Trade Organization


Business Software Alliance. 2006. Third Annual BSA and IDC Global Software Piracy Study.

Dimitrov, Martin. 2004. Administrative Decentralization, Legal Fragmentation, and the Rule of Law in Transitional Economies: The Enforcement of Intellectual Property Rights Laws in China, Russia, Taiwan, and the Czech Republic. PhD diss., Stanford University.

Phillips, Tim. 2005. Knockoff: The Deadly Trade in Counterfeit Goods: The True Story of the Worlds Fastest Growing Crime Wave. London: Kogan Page.

Sell, Susan. 2003. Private Power, Public Law: The Globalization of Intellectual Property Rights. New York: Cambridge University Press.

Martin Dimitrov

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Intellectual Property

What It Means

In most developed countries legal protections exist to ensure that people cannot use other people’ ideas for personal profit. For instance, it is illegal to burn and sell DVD copies of a movie made by someone else; to duplicate another person’s soap-dispenser design and start manufacturing dispensers to sell to fast-food chains; and to open a new clothing store named the Gap when a successful international chain is already using that name. The ideas behind the movie, the soap dispenser, and the brand name of the clothing chain have value once they have been made into real products (once the movie has been filmed, the soap dispenser constructed, and the store built and named). The people who came up with those ideas have the legal right to make sure that no one else can make money from their ideas without permission. These abstract products of the creative mind are known as intellectual property, and they are protected by their own specialized laws, which vary from country to country.

In the United States there are three main forms of legal protection for intellectual property: copyrights, patents, and trademarks. Copyrights apply to the works of artists, writers, composers, and other people who make original contributions to culture. Patents apply to new inventions and technologies. Trademarks apply to names, words, symbols, or other elements used to identify a particular brand or organization.

While intellectual property rights seem designed to reward the creators of valuable ideas for their labor, the primary purpose of these laws is actually to benefit society as a whole. It is in society’s interest that people write books, make music, invent new technologies, and start companies that provide goods and services that people need or want. Legal protections for intellectual property are meant to stimulate creativity for the public benefit. The financial benefits to individual creators are a by-product of the laws.

When Did It Begin

The notion of intellectual property first became important after the invention of the printing press in the 1400s. Prior to this time books were both written and copied (in very limited supplies) by hand. There were few opportunities to exploit a writer’s ideas for profit, so there was little need for the originator of a creative work to be concerned about questions of ownership regarding that work.

Once numerous copies of a book could be printed quickly, people completely unconnected with the writer’s labor could make a profit: a popular book could be reprinted and sold by anyone with a printing press. When this happened, the author of the work, the editor, and the publisher saw their own chances to profit from that work diminish. With no guarantee that they could make a living from their work, there was little reason for them to undertake such work in the future.

In the fifteenth century European rulers responded to this threat to creative work by offering early forms of copyright protections, usually on a case-by-case basis (which enabled these rulers to not only to support writers and publishers but also to suppress certain kinds of work). For instance, popes and rulers of some Italian city-states granted the privilege of printing certain works to individual printers, hoping to encourage the production of books considered vital to the community. In sixteenth-century England, Queen Elizabeth granted monopoly rights (the legal right to be the exclusive seller of a certain product or group of products) to individual printers. The first true copyright law offering broad protection to the creative work of a wide range of individuals was the Statute of Anne, enacted by the British Parliament in 1710. U.S. copyright and patent laws were passed in 1790, soon after the nation’s birth.

More Detailed Information

Each of the forms of intellectual property law (copyrights, patents, and trademarks) has its own areas of application and characteristics. Copyrights give writers and artists the sole right to reproduce, distribute, display, perform, or otherwise circulate their work; they also have the right to prepare works derived from or based on that original work. Some of the types of creative work protected by copyrights in the United States are novels, poems, nonfiction writing of all kinds, musical compositions, musical recordings, movies, TV programs, paintings, architectural works, toys, maps, and computer programs. To be copyrighted, the intellectual property must appear in some fixed form. In other words, your idea for the plot of the Great American Novel cannot be copyrighted. Someone who hears your idea and then writes the novel is not in violation of the law. You must actually put the words on paper in order to claim copyright protection. It is not necessary to request copyright protection from the government; once the original work is fixed in some physical form, the copyright automatically exists. For optimal protection, however, it is advisable to register original work. Copyrights generally last until 70 years after the creator’s death. After this time, the work enters the public domain, which means that anyone is entitled to use it for his or her own purposes.

Inventions are protected by the U.S. government through patents. A patent is a document issued by the government. It gives the inventor (or other entity holding the patent, such as a business or corporation) the right to prevent other people from reproducing, distributing, or otherwise using that invention in the United States. The U.S. definition of the word invention includes machines, manufactured products, processes (for instance, a new way of manufacturing doorknobs), and compositions of matter (a new clothing fiber, for example). An invention can be entirely original or it can be an improvement or variation on an already existing invention. In any case it must have some useful purpose to qualify for a patent. Patents are valid for 17 years from the date the government issues them to an inventor.

A trademark protects any word, symbol, logo, design, name, picture, sound, device, or combination of any of these things used to distinguish one organization from all others. Some trademarks are considered stronger than others and are therefore accorded a greater degree of protection under the law. Strong trademarks are those that have no other recognizable meaning. For instance, the photography company Kodak has a strong trademark on its name, because the name has no other meaning in the English language. Weak trademarks are those that use a common word or description of a product, rather than a truly unique name or other identifier. For example, a brand of soft drink called Fizzy Cola would not receive the same degree of protection as the more strongly protected Pepsi Cola. A business or other organization can claim trademark protections as soon as it begins using a trademark, but the degree of protection provided by the law is strengthened, as with copyrights, if an organization registers its trademark with the government. Unlike copyrights and patents, trademarks never expire.

Recent Trends

The popularity of the Internet and advances in high-speed computer technology have introduced new issues and debates in the field of intellectual property law. For example, existing copyright laws had to be expanded when MP3 file-sharing technologies were invented. Because songs can be so easily copied and exchanged using technology, they can be extremely difficult to protect. MP3s have changed the way the music industry attempts to profit from the intellectual property of musicians. Intellectual property law is thus being transformed. Once considered a relatively unexciting, specialized niche in the legal world, it is now an issue of vital interest to both lawyers and ordinary citizens.

There is considerable debate about the future of intellectual property. On one side people assert that relaxing or even eliminating copyright, patent, and trademark protections would increase the exchange of knowledge and technology. On the other side of the debate, people cite the same argument as the early proponents of copyright laws: that creative work is encouraged when creative people can be assured they will be able to profit from their ideas.

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INTELLECTUAL PROPERTY describes the interests protected by the laws of patents, copyrights, trademarks, and trade secrets. It is a phrase of convenience rather than a term of art; its precise boundaries are not agreed upon, or crucial. Patents, copyrights, and trademarks all predate the term "intellectual property," which, though known in the nineteenth century, was not widely used until the 1960s. Historically, property was divided into two classes, real and personal. Real property consisted of interests in land; personal property consisted of everything else. Personal property included not only tangibles, such as goods, but intangibles such as shares of stock, rights to receive payment, and copyrights and patents. It was understood by the eighteenth century that patents and copyrights were socially desirable because potential inventors and authors, unless rewarded, would underinvest in inventing and writing. Patents and copyrights provide rewards proportional to the value of the work. By exploiting monopolies over patentable and copyrightable subject matter, creators can charge amounts sufficient to recapture their capital investment plus make a profit; this is comparable to granting farmers the exclusive rights to harvest crops that have required labor to plant and tend.

Patents are granted after examination by the Patent Office and confer twenty (previously seventeen) years of monopoly rights in works that have the characteristics of utility, novelty, and nonobviousness. Copyrights arise upon embodiment of works of authorship in a tangible medium and now last for much longer than previously; today, in most cases, they endure for the life of the author plus seventy years. Registration, though desirable, is not essential.

Trademarks are usually counted as intellectual property but have quite a different rationale and arise differently from either patents or copyrights. The reason for protecting trademarks is not to promote investment in their creation but to protect consumers from being deceived as to the origin of goods bearing them. Trademark rights develop as consumers associate the marks on the goods with a single source. Courts have often said trademark rights are not property rights but are part of tort law (though recent developments arguably render trademarks more property like).Whatever the theory, the practice persists of calling trademarks a species of intellectual property, if only because the same lawyers who do patent and copyright work also advise on trademark questions.

Trade secret law confers on those who manage to keep valuable information to themselves the competitive advantage of exclusive access to that information. It is arguably tort law, rather than property law, but since the subject matter of the secret is often identical to the subject matter of the patent or copyright, its designation as intellectual property is not surprising.


Chisum, Donald S., and Michael A. Jacobs. Understanding Intellectual Property Law. New York: Matthew Bender, 1992.

Halpern, Sheldon W., Craig Allen Nard, and Kenneth L. Port. Fundamentals of United States Intellectual Property Law: Copyright, Patent, and Trademark. The Hague, Netherlands: Kluwer Law International, 1999.

John A.Kidwell

See alsoCopyright ; Patents and U.S. Patent Office ; Trademarks .