The IP System: Rights, Organisations and Treaties
Legal Aspects of Technology Management - NIT Northern Institute of Technology Management, Hamburg · part of my Technology Management MBA · study notes for revision.
Up to here the course has been about relationships you can see: a state facing a citizen, two companies facing each other across a contract, a controller facing the person whose data it holds. Intellectual property is stranger, because the thing being fought over cannot be picked up. A conveyor motor can be locked in a warehouse. The idea of how to build it cannot, and once it is out it can be copied a thousand times at almost no cost. The IP system is the legal machinery invented to deal with exactly that problem.
Two sessions of the course approach it from opposite ends. One comes at it from the law: what the concept behind the system is, which organisations run it, and which international agreements hold the national systems together. The other is run with a practising IP manager from industry, who comes at the same material from the side of a company that owns roughly 800 patents and utility models, more than 100 patent families and more than 200 trademark registrations covering 20 trademarks. Between them the picture is complete: the treaties on one side, the portfolio on the other.
This chapter is deliberately the wide-angle shot. It sets out what the rights are as a family, who administers them, and which treaties bind them together, and it introduces each individual right in a sentence or two only. The close-up work comes next: patents in the following chapter, then trademarks, designs and copyright in the one after that.
1 · The concept behind the IP system
Section titled “1 · The concept behind the IP system”The session opens with four short statements, and they are worth learning verbatim in substance because everything else follows from them.
The third statement deserves a pause. Most people arrive assuming that having the idea is the achievement and that the law rewards it. It does not. A conversation over coffee about how a machine could be improved creates no right in anybody. The right attaches to the worked-out version, and the price of getting it is that you describe your solution in public. That trade, disclosure in exchange for a limited monopoly, is the bargain the whole system rests on, and the practitioner deck states it plainly when it summarises a patent as an exclusive right of use granted to the owner as a reward for publishing the idea, because access to information is a social concern and creative ideas should be accessible to everybody.
A small terminology note from the practitioner session, because the abbreviation is used in two senses. IPR there stands for Industrial Property Right, while IP, intellectual property, is the wider umbrella that also takes in copyright.
2 · The benefits the sessions claim for IP
Section titled “2 · The benefits the sessions claim for IP”The claims come at two levels, and it is worth keeping them apart. One set is about countries, the other about the individual company.
- IP plays an important and prominent role for the development of the global economy
- It is the driving force for and the institutional guarantee of a country’s scientific, technological, economic, social and cultural development
- It bears witness to a country’s competitiveness and overall strength
- It provides exclusive rights
- It shows the inventiveness of a company
- It increases company visibility, reputation and value
- It helps to increase sales and margin
- It attracts potential customers and employees
The practitioner deck then adds two items marked as mandatory rather than optional, and they are practical rather than legal: competitor monitoring has to be established, and trade fairs have to be visited regularly. The reasoning is not spelled out, but it is easy to reconstruct. A right nobody polices is a right nobody respects, and the two cheapest places to discover that a competitor is using your technology are the competitor’s own publications and the exhibition hall.
3 · The two organisations that run the system
Section titled “3 · The two organisations that run the system”Two bodies sit at the top of the picture, and they are not variations of the same thing. One is a trade organisation that happens to have an IP agreement inside it. The other is a specialised IP agency of the United Nations.
- In existence since 1 January 1995
- Liberalising trade
- Operating a system of trade rules
- Acting as a forum for governments to negotiate trade agreements, that is the WTO’s trade rules
- Settling trade disputes
- Established in 1967
- A self-funding agency of the United Nations, with 193 member states
- A global forum for IP services, policy, information and cooperation
- Responsible for the development of an international IP system
Below them sit the offices you actually deal with, and the course hands out their addresses as working tools rather than as trivia. Germany has the DPMA, the German Patent and Trade Mark Office. Europe has the EPO, the European Patent Office, for patents, and the EUIPO, the European Union Intellectual Property Office, for EU trade marks and Community designs. Outside Europe the course names the offices of the USA, China and Japan. WIPO itself also runs registers and search tools. Personal monitoring accounts at DPMA and EPO are free of charge, patent searching is free of charge at the patent offices, and commercial search tools such as Questel, PatBase and Thomson Innovation exist alongside them. For trade marks the course points at TMview and the EUIPO and WIPO brand databases.
4 · The main international agreements
Section titled “4 · The main international agreements”This is the part to memorise as a list, because in an exam the treaties are what distinguishes an answer that knows the system from one that only knows the rights.
One slide draws all of this as a single picture titled TRIPS and the IP universe. It arranges national laws, regional legislation such as the EU, OAPI and ARIPO, bilateral or regional free trade agreements, TRIPS itself, and the WIPO treaties, with Paris, Berne, Rome and IPIC named among them.
5 · The right of priority
Section titled “5 · The right of priority”This is the single most useful mechanism in the whole treaty layer for anyone running a young company, and it comes from the Paris Convention.
The deck states the window as 6 to 12 months. The Paris Convention text the course supplies is more specific about which figure applies where: the periods of priority are twelve months for patents and utility models and six months for industrial designs and trademarks. So the range in the slide is not vague, it is the two ends of a rule that depends on which right you are claiming.
Why it matters commercially is easy to state. On the day you file at home, you usually do not know which countries will turn out to be worth the cost of protection, and you cannot afford to file everywhere at once. Priority lets you fix your date cheaply and decide later. The practitioner deck describes exactly that as the typical approach: start with a first national filing, possibly with an examination request straight away, then claim the priority of that first filing and start an international application when you need more time to decide. The international route is the PCT process at WIPO, where an International Search Authority is designated and the process ends with the publication of the application. That timeline, and the roughly 30 months to nationalisation, belong to the patent chapter.
6 · The family of IP rights
Section titled “6 · The family of IP rights”Here is the whole family in one place. Each entry gets a sentence, because the detail is the business of the next two chapters.
The practitioner session draws a wider map of the same territory, under the heading of intellectual property rights broadly defined, and it is a useful cross-check because it includes things that are not registration rights at all.
- Patent acts
- Utility model acts
- Species protection acts
- Semiconductor protection acts
- Design acts
- Grouped in the deck together with the patent rights, as the non-technical half of that pair
- Rights of names
- Trademark act
- Rights against unfair competition
- Antitrust acts
- Copyright acts
7 · What owning a right actually gives you
Section titled “7 · What owning a right actually gives you”The characteristics of an IP right are the same whichever right you hold, and the course states them as a short list.
- There is an IP owner, also called the right holder.
- Exclusivity over the IP. Registered or non-registered, the right grants the holder an absolute right of protection, meaning the holder can monopolise the IP and exclude others from using it.
- Without the right holder’s permission, or without a legal cause, nobody may use the right holder’s IP.
- No two or more identical rights are allowed to exist side by side.
If someone infringes, national laws give the holder a set of remedies, and the course lists them as actions against infringers.
One more slide is a triangle rather than a list, and it is the ethical counterweight to everything above: the system balances the interests of the right holder, the competitor and the consumer. A monopoly is granted, but it is granted for a limited period and against publication, and those two limits are what keep the other two corners of the triangle in the picture.
The practitioner session adds the strategic complement to all of this. There is a difference between a wall of separate protected solutions, where a competitor can simply walk round the outside on the path of a workaround, and the bottleneck approach, where the way to the customer’s benefit leads through a single point that you have protected. And there is a whole class of know-how that should never be filed at all: if the use of a patented method is not demonstrable in the finished product, you cannot prove infringement anyway, so it is better not to disclose it and to keep it as a company secret, covered by a development contract with development partners and by an NDA with suppliers.
8 · Comparison: protection, registration and duration
Section titled “8 · Comparison: protection, registration and duration”This is the table to reproduce from memory. The durations come from the practitioner session’s comparison slide.
| Right | What it protects | Registration | Roughly how long |
|---|---|---|---|
| Patent | Technical inventions in all fields of technology | Registered, by application and examination | Max. 20 years, with a possible plus 5 or 5.5 years for pharmaceutical patents |
| Utility model | Technical inventions, as a small-scale patent, in countries that provide for it such as Germany and China | Registered | Max. 10 years, including 3 prolongations |
| Design | The appearance of a product, new or original and non-functional | Registered | 5 years plus prolongation, max. 25 years |
| Trade mark | Signs used in trade to identify goods and services and their origin | In most countries granted only by registration, which gives the best protection; protection without registration usually requires long use plus notorious awareness of more than 75% or 95% of the public | 10 years plus prolongation, and effectively everlasting if the fees are paid |
| Copyright | Literary and artistic works, including computer programs and databases under the WCT | Not stated in these sessions, and set as a group-work research question | 70 years after the death of the author or authors, plus 25 years if a public domain work is reused |
A last framing from the practitioner session that makes the table easier to hold on to. Compare a material good such as a car, which you can sell, rent out or scrap, with an intangible asset such as a patent, which you can sell, license, or abandon. Licensing is the option that has no equivalent in the physical world, and it is the reason IP behaves like a financial asset rather than like a machine.
Worked example
Section titled “Worked example”Take a single plausible product: a motorised conveyor module for airport baggage handling, sold under its own brand, with a drum motor inside it, a moulded housing, control software and a printed manual. One box off a production line, and almost every right in the family is in it somewhere.
| The part of the product | The right that fits | Register? | Roughly how long | If you rely on nothing |
|---|---|---|---|---|
| The drum motor mechanism, a genuine technical invention | Patent | Yes, by application and examination | Max. 20 years | A competitor is free to copy the mechanism outright, and if they file first you may end up locked out of your own technology |
| A smaller mechanical improvement to the roller bracket, useful but modest | Utility model where the country provides for it, for example Germany or China | Yes | Max. 10 years, including 3 prolongations | The improvement is unprotected everywhere, and in Switzerland or the USA there is no utility model to fall back on in any case |
| The shape of the housing and the look of the control panel | Design | Yes | 5 years plus prolongation, max. 25 years | A visually identical lookalike can be sold beside yours, and the patent will not help because a design protects appearance, not function |
| The product name and the logo on the housing | Trade mark | Yes in most countries, and registration gives the best protection | 10 years plus prolongation, indefinitely renewable while fees are paid | You are left arguing long use plus notorious awareness, which is a high bar, and a competitor may register your own name against you |
| The control software, the manual and the marketing film | Copyright, with the WCT covering computer programs and databases | The sessions do not state this point | 70 years after the death of the author or authors | Reuse of your material is harder to challenge, and for commissioned work such as a training film you also need a written buy-out of the rights of use |
| The process know-how that leaves no trace in the finished module | Company secret, not a filed right | No, and deliberately so | For as long as it stays secret | Once it is published in an application you have disclosed it, and if its use is not demonstrable in the product you cannot prove infringement anyway |
What the table is really showing. The rights are not alternatives, they are layers over one object, and each covers a different face of it. Function, appearance, name and expression are four separate questions, and answering one does not answer the others. The last row is the deliberate exception: the course is explicit that some know-how is better kept out of the system entirely, protected by a development contract with partners and an NDA with suppliers rather than by a filing.
And the priority thread runs through all of it. File the patent at home first, and you have twelve months to decide which countries the module will actually sell in before you spend money there. File the design and the trade mark at home first, and the equivalent window is six months. Miss those windows and every foreign filing has to stand on its own date, competing with whatever the rest of the world published in the meantime.
Apply it to your project
Section titled “Apply it to your project”-
List what your venture has actually created, in physical terms. Walk through the product and the company as if you were the worked example: mechanisms, appearance, names and logos, written and recorded material, and undocumented know-how. At this stage do not name any right.
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Ask of each item whether it is still only a thought. Mere thoughts and ideas are protected by nothing. If an item is not yet worked out well enough to be described in writing, the honest answer is that it is not protectable yet, and the task is to develop it, not to file it.
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Match each item to the right that fits its face of the product. Function goes to patents, or to a utility model where the country offers one. Appearance goes to designs. Names and signs go to trade marks. Written, recorded and coded material goes to copyright.
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Separate out what should never be filed. If the use of a method cannot be demonstrated in the finished product, filing it publishes it for nothing. Mark those items as company secrets and make sure a development contract covers your partners and an NDA covers your suppliers.
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Decide where the bottleneck is. Protecting every solution separately invites competitors to walk round the outside on a workaround path. Ask instead which single point the customer’s benefit has to pass through, and put your strongest protection there.
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Fix your priority date before you fix your markets. File first in one Contracting State, then use the window the Paris Convention gives you, twelve months for patents and utility models, six months for designs and trade marks, to decide which other countries are worth paying for.
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Search before you file, especially for names. The course insists on identity and similarity searches in the public registers of the DPMA, the EUIPO and WIPO before a trade mark application, and searching at the patent offices is free of charge.
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Write down the duration and the renewal dates for everything you own. A trade mark lasts effectively forever if the fees are paid and dies quietly if they are not. Deadline monitoring is administration, but it is the administration that decides whether the asset still exists in ten years.
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Set up monitoring, and treat it as mandatory. Competitor monitoring and regular trade fair visits are how you find out that a right is being infringed. Free personal accounts at the DPMA and EPO cost nothing but attention.
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Know what you would demand if you found an infringement. Cease and desist, information about the use made including supplier and customer relations with full accounting, and damages calculated either as lost royalties or as the infringer’s entire profit. Knowing the menu in advance changes how you negotiate.
Key terms
Section titled “Key terms”| Term | What it means in plain words |
|---|---|
| Intellectual property, IP | Creations of the mind: inventions, literary and artistic works, designs, and the symbols, names and images used in commerce |
| IPR | Industrial property right, the narrower family of registered rights, used in the practitioner session alongside the wider term IP |
| Creation of the mind | The worked-out result, as opposed to the mere thought or idea, which the system does not protect |
| Right holder | The owner of an IP right, the person or company entitled to exclude everybody else |
| Exclusivity | The absolute right of protection an IP right grants: monopolise the IP, and exclude others from using it without permission or legal cause |
| WTO | The World Trade Organization, since 1 January 1995: liberalising trade, operating trade rules, hosting negotiations and settling trade disputes |
| WIPO | The World Intellectual Property Organization, established 1967, a self-funding UN agency with 193 member states and the global forum for IP services, policy, information and cooperation |
| TRIPS | The WTO agreement from the Uruguay Round setting minimum standards for the regulation of the different forms of IP by national governments, applied to nationals of other WTO member nations |
| Paris Convention | The 1883 convention for the protection of industrial property: same protection in each Contracting State, the right of priority, and common rules for patents, trade marks and unfair competition |
| Right of priority | Having filed first in one Contracting State, the applicant may within 6 to 12 months apply for protection in any of the others, twelve months for patents and utility models, six months for designs and trade marks |
| Berne Convention | The 1886 convention protecting works and the rights of their authors, giving creators control over how their works are used, by whom and on what terms |
| WIPO Copyright Treaty, WCT | A special agreement under Berne, extending protection of works and authors’ rights into the digital environment, for example computer programs and databases |
| Trademark Law Treaty, TLT | The WIPO treaty standardising and streamlining national and regional trademark registration procedures |
| Nice Classification | The international classification of goods and services used when registering a trade mark |
| Utility model | A small-scale patent available under the laws of some countries such as Germany and China, and not existing in Switzerland or the USA |
| Company secret | Know-how deliberately kept unpublished, protected by development contracts and NDAs rather than by a filed right |
| Bottleneck approach | Protecting the single point the customer’s benefit has to pass through, instead of scattering protection across solutions a competitor can work around |
| Royalty damages | One of the two damages measures named: the royalty payments lost, as an alternative to claiming the infringer’s entire profits |
Test yourself
Section titled “Test yourself”- State the four propositions the course uses to define the concept behind the IP system, and say which of them rules out protecting an idea you have not yet worked out.
- What does the course claim IP does for a country, and separately what does it claim IP does for a company?
- Distinguish the WTO from WIPO: when was each established, and what is each one for?
- What is TRIPS, where does it come from, what does it set, and to whom is it applied?
- Explain the right of priority: which treaty it comes from, what triggers it, how long the window is, and why the course gives a range rather than a single figure.
- Name the five categories of protected right the course works with, and for each say roughly how long protection can last.
Revision summary
Section titled “Revision summary”Next: Patents → - the strongest right, and the hardest to get.