Tuesday, 15 May 2012



 

Intellectual Property Rights
(A Report for IP Dome)
-Anusha Ramesh, Intern at IP Dome

 
“An idea that is developed and put into action is more important than an idea that exists only as an idea.”- Buddha

DEFINITIONS:

The World Trade organization defines Intellectual Property Rights as “the rights given to people over the creations of their minds. They usually give the creator an exclusive right over the use of his/her creations for a certain period of time.”
It further goes on to add, “Intellectual property rights are traditionally divided into two main categories:
  • Copyright and rights related to copyright: i.e. rights granted to authors of literary and artistic works, and the rights of performers, producers of phonograms and broadcasting organizations. The main purpose of protection of copyright and related rights is to encourage and reward creative work.
  • Industrial property: This includes-
      • (1) the protection of distinctive signs such as trademarks and geographical indications, and
      • (2) Industrial property protected primarily to stimulate innovation, design and the creation of technology. In this category fall inventions (protected by patents), industrial designs and trade secrets.”

The World Intellectual Property Organization (WIPO) describes that IPR “allows creators, or owners, of patents, trademarks or copyrighted works to benefit from their own work or investment in a creation. These rights are outlined in Article 27 of the Universal Declaration of Human Rights, which provides for the right to benefit from the protection of moral and material interests resulting from authorship of scientific, literary or artistic productions.”

HISTORY ABOUT INDUSTRIAL PROPERTY RIGHTS

The use of the term Intellectual Property dates back to the 18th century. The administrative secretariats of the Paris Convention (1883) and the Berne Convention (1886) merged in 1893 and formed the United International Bureaux for the Protection of Intellectual Property. This later became the World Intellectual Property Organization.
An agreement on cooperation between WIPO and the WTO came into force on 1 January 1996. The agreement provides cooperation in three main areas:

  • notification of, access to and translation of national laws and regulations
  • implementation of procedures for the protection of national emblems
  • and technical cooperation.

IMPORTANCE OF INTELLECTUAL PROPERTY RIGHTS

There are several compelling reasons why IPRs are necessary. First, the progress and well-being of humanity rest on its capacity to create and invent new works in the areas of technology and culture.
 Second, the legal protection of new creations encourages the commitment of additional resources for further innovation.
Third, the promotion and protection of intellectual property spurs economic growth, creates new jobs and industries, and enhances the quality and enjoyment of life. An efficient and equitable intellectual property system can help all countries to realize intellectual property’s potential as a catalyst for economic development and social and cultural well-being. The intellectual property system helps strike a balance between the interests of innovators and the public interest, providing an environment in which creativity and invention can flourish, for the benefit of all.
To quote the Global Intellectual Property Centre “The current global economic crisis is focusing renewed attention on the urgent need to incentivize and protect innovation to both solve the world’s most challenging problems and to generate jobs and economic growth.”
It further goes on to add that the role of IPRs is five-fold:
·         To create and supports high paying jobs
·         To drive economic growth and competitiveness
·         To protect consumer at household levels
·         To generate breakthrough solutions to global challenges
·         To encourage innovations and reward entrepreneurs

TYPES OF IPRs:

                                                                                                                                                             INDUSTRIAL PROPERTY:
o   PATENTS:
A patent is an exclusive right granted for an invention –a product or process that provides a new way of doing something, or that offers a new technical solution to a problem.
A patent provides patent owners with protection for their inventions. Protection is granted for a limited period, generally 20 years. Patents provide incentives to individuals by recognizing their creativity and offering the possibility of material reward for their marketable inventions. These incentives encourage innovation, which in turn enhances the quality of human life.
Patent protection means an invention cannot be commercially made, used, distributed or sold without the patent owner’s consent. Patent rights are usually
enforced in courts that, in most systems, hold the authority to stop patent infringement. Conversely, a court can also declare a patent invalid upon a successful challenge by a third party.
A patent owner has the right to decide who may – or may not –use the patented invention for the period during which it is protected. Patent owners may give permission to, or license, other parties to use their inventions on mutually agreed terms. Owners may also sell their invention rights to someone else, who then becomes the new owner of the patent. Once a patent expires, protection ends and the invention enters the public domain. This is also known as becoming off patent, meaning the owner no longer holds exclusive rights to the invention, and it becomes available for commercial exploitation by others.
Patented inventions have pervaded every aspect of human life, from electric lighting (patents held byEdison and Swan) and sewing machines (patents held by Howeand Singer), to magnetic resonance imaging (MRI) (patents held by Damadian) and the iPhone (patents held by Apple).
In return for patent protection, all patent owners are obliged to publicly disclose information on their inventions in order to enrich the total body of technical knowledge in the world. This everincreasing body of public knowledge promotes further creativity and innovation. Patents therefore provide not only protection for their owners but also valuable information and inspiration for future generations of researchers and inventors.
TRADE MARK:
A trademark is a distinctive sign that identifies certain goods or services produced or provided by an individual or a company. Its origin dates back to ancient times when craftsmen reproduced their signatures, or “marks”, on their artistic works or products of a functional or practical nature. Over the years, these marks have evolved into today’s system of trademark registration and protection. The system helps consumers to identify and purchase a product or service based on whether its specific characteristics and quality – as indicated by its unique trademark– meet their needs.
Trademark protection ensures that the owners of marks have the exclusive right to use them to identify goods or services, or to authorize others to use them in return for payment. The period of protection varies, but a trademark can be renewed indefinitely upon payment of the corresponding fees. Trademark protection is legally enforced by courts that, in most systems, have the authority to stop trademark infringement.

INDUSTRIAL DESIGN:
An industrial design refers to the ornamental or aesthetic aspects of an article. A design may consist of three-dimensional features, such as the shape or surface of an article, or two-dimensional features, such as patterns, lines or color. Industrial designs are applied to a wide variety of industrial products and handicrafts: from technical and medical instruments to watches, jewelry and other luxury items; from house wares and electrical appliances to vehicles and architectural structures; from textile designs to leisure goods.
To be protected under most national laws, an industrial design must be new or original and nonfunctional. This means that an industrial design is primarily of an aesthetic nature, and any technical features of the article to which it is applied are not protected by the design registration. However, those features could be protected by a patent.

GEOGRAPHICAL INDICATION:
A geographical indication is a sign used on goods that have a specific geographical origin and possess qualities or a reputation due to that place of origin. Most commonly, a geographical indication consists of the name of the place of origin of the goods. Agricultural products typically have qualities that derive from their place of production and are influenced by specific local geographical factors, such as climate and soil. Whether a sign functions as a geographical indication is a matter of national law and consumer perception.
Geographical indications may be used for a wide variety of agricultural products, such as, for example, “Tuscany” for olive oil produced in a specific area of Italy, or “Roquefort” for cheese produced in that region of France.

COPY RIGHTS:
Copyright laws grant authors, artists and other creators protection for their literary and artistic creations, generally referred to as “works”. A closely associated field is “related rights” or rights related to copyright that encompass rights similar or identical to those of copyright, although sometimes more limited and of shorter duration.
The beneficiaries of related rights are performers (such as actors and musicians) in their performances; producers of phonograms (for example, compact discs) in their sound recordings; and broadcasting organizations in their radio and television programs.
Works covered by copyright include, but are not limited to:
novels, poems, plays, reference works, newspapers, advertisements, computer programs, databases, films, musical compositions, choreography, paintings, drawings, photographs, sculpture, architecture, maps and technical drawings.

CRITICISMS OF IPRs

1.      The basic public policy rationale for intellectual property laws is that they, in some way, protect the rights of the inventor, author, or creator. The rationale for patent law is that is grants the right to exclude others from making. Using, offering for sale, selling, or importing the invention in(to) the country where it was patented. The public policy rationale for trademark rights are that they may be used to prevent others from using a confusingly similar mark, but not to prevent others form making the same goods or from selling the same goods or services under a clearly different mark. The public policy rationale for copyright law is that it is a form of protection provided to the authors of “original works of authorship: including literary, musical, artistic, and certain other intellectual works, both published and unpublished.
2. Many people believe that intellectual property provides a temporary monopoly that protects the use or exploitation  of that good, supported by legal enforcement mechanism In fact, intellectual property protection cannot properly be thought f as providing an economic monopoly, at least in part, because a monopoly can only exist in the presence of a market and the ability of an actor to manipulate the market to a point where higher than competitive prices are able to be maintained, which is something that is rarely achievable by an  owner of intellectual property.
3. In this A contrary view is that the deprivation of possession occurs at the outset – when an inventor, author, composer, etc has a new idea, he or she has the choice of keeping that idea private and using it solely for personal benefit or sharing that idea with the public in the form of a new invention, book, song. Etc context, the grant of limited rights is a “bargain” that the public uses to induce the creator to give up possession at the time the rights are granted, and in this sense, there is a voluntary and irretrievable surrender of possession of the property of the creator. The unauthorized use of intellectual property is then seen as a violation of the fundamental bargain.
4. The global harmonization of intellectual p r o p e r t y   l e g i s l a t i o n   u n d e r   t h e   Wo r l d   Tr a d e Organization (WTO) has also been criticized, for example by the alter globalization movement. The exclusive rights granted by intellectual property laws are generally negative in nature and therefore only grant the holder of IP the ability to exclude third parties from infringing on their monopoly. For example, the owner of a registered trademark has an exclusive right to use their mark in relation to certain products or services, and can exclude others from using that mark in relation to those products or services (sometimes marks which are recognized as “famous” or “well known” are deemed to have developed sufficient goodwill and reputation to be protected across unrelated classes of products and services.)
5. Copyright licenses grant permission to do something. A patent license is a declaration not to do some things. Exclusive rights policies in certain countries provide for certain activities which do not require any license, such as reproduction of small amounts of texts, sometimes termed fair use. Intellectual property rights in India-India’s general argument was that is does acknowledge in principle the case for strict IPR protection, but this can be done only in phases suited by its own ground reality. The reality is that absence of international IPR protection for some decades has spawned employment for millions, so an overnight clampdown on IPR violators would foment social unrest. India’s general argument was that is does acknowledge in principle the case for strict IPR protection, but this can be done only in phases suited by its own ground reality. The reality is that absence of international IPR protection for some decades has spawned employment for millions, so an overnight clampdown on IPR violators would foment social unrest. The Indian government has formed an advisory committee to recommend changes in the 1970 Indian Patents Act. A temporary ordinance for patent protection implementing the “mailbox” provisions of the WTO TRIPS agreement and providing for exclusive marketing rights was issued in December 1994.

INTELLECTUAL PROPERTY RIGHTS IN THE NEWS:


·   The US government has recently put India, China and Pakistan along with 10 other countries on the "intellectual property watch list" for failing to prevent the theft of copyrighted property.Other nations on the watch list are Canada, Argentina, Algeria, Chile, Indonesia, Israel, Russia, Thailand, Ukraine and Venezuela.
·         Infosys has increased its patent filings by 50 per cent over FY11. During the 2012 fiscal, the company, in a filing to the Securities and Exchange Commission (SEC), said it has filed 143 unique patent applications in the United States Patent and Trademark Office (USPTO) and the Indian Patent Office. These patents were filed through Infosys Labs.
CONCLUSION AND MY LEARNING:

When I initially started working on the report, lots of questions baffled me. How can Intellectual property be of any value? After all, knowledge is something abstract, intangible and often ambiguous. How do know if your idea is original? How do you OWN an idea? Weren’t we all taught to share information? Will there be animosity because of trying to own knowledge?
However as I started doing the report, I realized something. Intellectual property is as substantial and real as any other tangible asset. It is the preamble to tangibility. After all without an idea, there is no creation, no production, no marketing and no economics.
I have come to realize that Intellectual Property lies at the heart of economic advancement, sustainable development and social equity.
In this competitive world, ideas are vociferous tools. To quote Joseph Stalin “Ideas are more powerful than guns. We would not let our enemies have guns, why should we let them have ideas?”  While I do not completely agree with the quote, I think it is up to us as individuals to innovate responsibly and claim ownership. After all, ideas can be rewarding as well as dangerous.

www.ipdome.in











World IP Day





World Intellectual Property Day
(Report on IP Day Celebrations 26th April, 2012)
-Jagathis, IP Dome



S.A. Engineering College celebrates World IP Day

This April 26th, IP Dome went to S.A.Engineeringcollege, Thiruverkadu, to celebrate World Intellectual Property Day with students of M.Sc. Computer Science, and M.E.Biotechnology.
The Principal of the College and the Head of Department of Management Studies of the college addressed the students in the inaugural session.
 
The theme of this year’s celebration was ‘Visionary Innovators’. To introduce the topic we invited Mr.Shiyaam Sundar, individual Business Consultant who in 40 minutes established the difference between incremental innovation and visionary innovation through informal interaction and jovial bi-lingual (English and Tamil) discussion. Mr.Shiyaam Sundar released our IP Day poster which created enthusiasm among the students to create posters for the next world IP Day. 

Swapna Sundar, CEO, IP Dome, used an innovative slide presentation to introduce the engineering students to different forms of IP. Using well-known paintings, technologies and case studies, she took the students through the creation, protection and monetisation of IP. 

Watch the IP Day Celebrations video at 

http://www.youtube.com/user/ipdome1

www.ipdome.in


Wednesday, 11 April 2012




Transfer Pricing & Intellectual Property
(Post Budget 2012-13 Review)
-Gowthami Reddy, IP Dome

 
Introduction

The Budget 2012 has extended the applicability of TP Regulations to specified domestic transactions, in excess of Rupee Fifty Million with effect from Financial Year 2012-13.  This will have a different effect on sharing of IP between affiliated companies.

In accordance with budget 2012 provisions, the following domestic transactions would be under   the Purview of the Indian TP Regulations:

·        Taxpayers operating in Special Economic Zones (U/S 10AA of ITA);

·         Taxpayers having domestic transactions with certain related parties (U/S 40A(2) of ITA);  and

·        Taxpayers claiming deductions for undertaking specified business activities (U/S 80A, 80-IA of  ITA)

  Prior Budget 2012, two affiliated companies need not pay a transfer price at a arm’s length royalty rate for use of the intellectual property and can be internally managed from the parent to the subsidiary. Extension op TP rules curbs false invoicing and will improve transparency.

Transfer Pricing and M&A
M&A is a constant activity by enterprises to expand their business. M&A alters inter- company transactions which have a dramatic effect on transfer of assets between affiliates including transfer of IP.  Companies should bear in mind, among other things the difference between the legal and economic ownership of IP. There may be legal, accounting, tax, and other formal constraints on moving IP from one place to another. TP analysis can allow the new business to integrate TP into its business plans and anticipate adversities. Very importantly, the early documentation of TP policy is an essential basis for effective TP risk management. TP risks can be managed effectively through strict compliance of concerned laws, timely TP documentation, clear intercompany agreements, APAs (Advance Pricing Agreements).  It is further advisable for the companies to follow consistent TP policies.

Accounting Standards

There are three standards in IFRS that play a significant role in valuation of IP for the purpose of TP. They are IFRS -3(relating to business combinations), IAS -38 (relating to intangibles) and IAS 24 (related party transactions).  The standards require all listed companies to report the value of their acquired intellectual property on their balance sheet.  The standards state that any identifiable and measurable intangible asset acquired as part of a business combination after the company's transition date after 31 March 2004, needs to be recognized on the balance sheet from 2005. With a more common accounting standard the amount of revenue generated by subsidiaries will be more comparable. IFRS will also help highlight which intangible assets are generating most revenue and from which subsidiary.  Having the value of the intangibles already on the balance sheet in mergers or acquisitions makes it lot simpler for valuing tp.
                                   
Valuation of IP

Valuing of IP identifies the value it contributes to the business which is very important to determine the TP to be paid in accordance with the arms length principle.  Exact IP valuation is the key to determine the accurate IP owned
Transfer Pricing - It is the practice by which the price or fee for use of  an asset is established for transfer from one affiliated company to another.( asset includes IP).
Arm’s Length Price - It’s the price, which is applied in a transaction between persons other than related party in uncontrolled conditions. 
The new domestic TP provisions would have significant anti abuse effects to redress any non-arm's length pricing of domestic transactions.
The arm’s length price shall be determined by any of the following methods having regard to the nature of transaction namely :-(1) Comparable Uncontrolled Price Method(2) Resale Price Method (3) Cost Plus Method (4) Profit Split Method (5) Transactional Net Margin Method.

Fair Market Value –

These the three universal approaches used in valuation of IP;

(1)The Cost method (2) Income method (3) Market method.

Cost Approach

The Cost Approach is based on the presumption that a willing buyer would pay no more for an intangible asset than the cost to produce such asset. Rather on the other hand while considering market conditions, time and value of money, it may be wiser to purchase the asset.  In the long run the long run the cost to develop it may prove higher than the purchase price. This approach also helps to know how much it would take to “re-create” the asset, thereby giving an indication of the value.

Market Approach
The Second approach to valuing intangibles is the market approach. It  is based on examination of similar intangible assets that have been transacted in the Marketplace.  This method depends heavily on the availability and comparability of data. In TP  analysis companies are often required to justify intercompany royalty payments for the use of intellectual property. A market approach could incorporate an analysis of functionally similar licensing agreements for the use of the intellectual property.

Income Approach
The most relied approach in valuing intangible assets is the Income Approach. This approach determines the value of IP by examining the future or expected income the IP will generate. There are two main types of income approaches, the yield capitalization approach and direct capitalization approach. Both are closely based on four steps: (1) the determination of an appropriate income measure, (2) the estimation of a time period, (3) the projection of the income, and (4) the appropriate determination of a capitalization rate.
In addition to these two income approaches there are various other approaches that can be referred  to as “Income “or “Market” approaches; they are incremental income approaches, the profit split method, and royalty analyses.

The Incremental Income approach is based on examination of the additional income accrued by the existence of the IP.

The Profit Split method splits the income between the IP and other tangible and intangible assets associated with it. Finally,

The Royalty Analyses examines the payment a licensee pays a licensor for use of a discrete intangible asset.
Each method has its pros and cons, given the often subjective and data-intensive nature of valuation.
           
Points to remember:

§        When a IP is transferred from I affiliate to other affiliate company;

§         The relevant IP to be transferred to be identified.

§          IP to be valued using one or more of the methods to determine its value.

§         Evaluate the transfer price based on arms length standard using any one of the above methods to determine the Arms Length Price.

§          Transfer it to the subsidiary at the price arrived at.

§          Relevant entry to be made in the balance sheets

§         These are some documents which have to be maintained:-

Certification of Related Party Transactions:- A report on the compliance of the    transfer pricing guidelines in respect of transactions with  related parties shall be obtained from an Chartered Accountant.
Statement of Policy:-

For each related party, a statement shall be recorded disclosing the basis/methodology for various transactions and shall form the basis on which transactions are entered into.

The Union Budget 2012 is has introduced a dispute-resolution mechanism called the APA (advance pricing agreements). It is an agreement that sets transfer price of the covered transactions prospectively between the taxpayer and tax authorities. APAs are generally entered into with a five-year lock-in period. Any TP issue is possibly capable of being covered by an APA.  The companies and tax authorities can mutually agree on the TP method to be applied and its application for a certain period of time. Further, bilateral APAs are likely to be introduced. The forseeing nature of APAs would lessen the burden of compliance by giving taxpayers greater certainty regarding their transfer-pricing methods and promote decent resolution of issues.

www.ipdome.in





பதிப்புரிமை
-Jagathis.S

  

பதிப்புரிமை (Copyright) என்பது ஒரு எழுத்தாளருக்கோ, கலைஞருக்கோ தமது அசலான படைப்புகளைப் பாதுகாக்க சட்டத்தினால் அவருக்கு அளிக்கப்பட்ட தனிப்பட்ட உரிமையாகும்.இவ்வுரிமையானது அப்படைப்புகளை நகலெடுத்தல், பரப்புதல், தழுவுதல் ஆகிய செயல்களைக் கட்டுப்படுத்துதலையும் உள்ளடக்கியதாகும். இவ்வுரிமை ஒருவரின் ஆக்கத்திறமையைப் பாராட்டவும், பிறரின் ஆக்கத்தை ஊக்குவிப்பிதற்காகவும் தரப்படுகிறது. சிற்சில தவிர்ப்புச்சூழல்கள் தவிர இப்படைப்புகளைப் பயன்படுத்த உரிமையாளரின் அனுமதி பெறுவது அவசியம்.இவ்வனுமதி தற்காலிகமானதாகவோ, நிரந்தரமானதாகவோ இருக்கலாம்.

காப்புரிமை பாதுகாப்பது ஒருவரின் எண்ணத்தின் வெளிபாடுகளை; எண்ணங்களை அல்ல. எடுத்துக்காட்டாக, ஒருவர் காப்புரிமை பெற அவர் மனதில் அழகிய கதைக்கரு உருவாவது மட்டும் போதாது. அக்கரு ஒரு கதையாகவோ, ஒவியமாகவோ அல்லது எதாவது ஒரு வடிவமாக வெளிப்பட வேண்டும். காப்புரிமை பெற வெளிப்பாடே போதுமானது. பல நாடுகளில் பதிவு செய்ய வேண்டிய அவசியமில்லை.

முந்திய காலங்களில் பதிப்புரிமை சட்டம் புத்தகங்கள் நகலெடுப்பதற்கு எதிராக மட்டுமே பயன்பட்டது.காலம் செல்லச்செல்ல மொழிப்பெயர்ப்பு மற்றும் பிற சார்ந்த ஆக்கங்களிலும் இச்சட்டம் இப்போது பயன்படுத்தப்படுகிறது.தற்போது நிலப்படம், இசை, நாடகம், புகைப்படம், ஒலிப்பதிவு, திரைப்படம், கணினி நிரல் ஆகியவையும் இதில் அடக்கம்.

பதிப்புரிமையுன்அமைப்பு


உரிமையளர்களீன் பங்கு

உரிமையாளர்கள் தேர்ந்துஎடுக்கும் பதிப்பு உரிமம் இதற்கு முன்பு யாராலும் பயன் படுத்த படாதவையாகவும்,பொதுவான உபயோகத்தில் இல்லாதவையாகவும் இறுக்க வேண்டும்.     

பதிப்புரிமையுன் விதி 

பதிபுரிமைக்கு ஒரு சில வழிமுறைகளும், விதிகளும் கையாளபடுகின்றன. 

பதிப்பு உரிமத்தின் விதிகள் அனைத்தும் தனி உரிமைகள் சம்பந்தமான மற்றும் கிரிமினல்   சட்டத்தை மீறிய பிரிவுகளை சார்ந்தே அமையும்.

(i) பொதுவாக  பதிப்பு உரிமத்தின் ஆயுள்காலம்  60 வரை நிர்ணைககப்பட்டுள்ளது

(ii) பதிப்பு உரிமையுன் விதிக்கு உட்டபட்ட பதிப்பு படைப்பாளியுன் ஆயுள் காலம் வரை நீடிக்க்கும்.

(iii)படைப்பாளின்  ஆயுள் காலத்திற்கு பிறகு  உரிமையாளர் பெயரில் பதிப்பு உரிமையை மாற்றிக்கொள்ள முடியும் 
  
பதிப்புரிமையுன் பயன்பாடுகள்

(i)            பதிப்புரிமை   ஒருதனித்துவத்தை உண்டாக்கும்  
(ii)          வளர்ச்சியை பாதுகாக்க வல்லது.
(iii)        பதிப்புரிமை என்பது தனி அங்கிகாரத்தை கொடுக்கும்.
(iv)        படைப்பின் தரத்தை   பாதுக்காக சிறந்த யுத்தி .
(v)         சட்ட பூர்வமான  அங்கிகாரத்தை  அடைந்ததற்கான சான்று.


அடிப்படையாக வழங்கப்படும் பதிப்புரிமைகள் :
அறிவுப்பூர்வமான, உணர்வுபுர்வமான அதாவது பட்டு , கட்டுரை, படம் ,நடனம்,இசை,ஒலி,ஒளிபதிவுகள்,ஓவியம்,புகைப்படம்,நிழற்படம்,மென்பொருள்,தொலைகாட்சி,மற்றும் வரைகலை போன்ற அணைத்து வகையான படைப்புகளுக்கு பதிப்புரிமை வழங்கப்படும்.

பதிப்புரிமையுன் நலன்களை அறிவோம்  அறிவுபூர்வமாக,
நமது உணர்வுபூர்வமான படைப்பின் தரத்தை உணர்த்துவோம் சட்டரீதியாக 

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