Types of Intellectual Properties and their

Description

Originally, only patent, trademarks, and industrial designs

were protected as ‘Industrial Property’, but now the term
‘Intellectual Property’ has a much wider meaning. IPR
enhances technology advancement in the following ways:[1–
4]
 (a)
it provides a mechanism of handling infringement,
piracy, and unauthorized use
 (b)
it provides a pool of information to the general public
since all forms of IP are published except in case of trade
secrets.

IP protection can be sought for a variety of intellectual efforts

including
 (i)
Patents
 (ii)
Industrial designs relates to features of any shape,
configuration, surface pattern, composition of lines and
colors applied to an article whether 2-D, e.g., textile, or
3-D, e.g., toothbrush[5]
 (iii)
 Trademarks relate to any mark, name, or logo under
which trade is conducted for any product or service and
by which the manufacturer or the service provider is
identified. Trademarks can be bought, sold, and licensed.
Trademark has no existence apart from the goodwill of
the product or service it symbolizes[6]
 (iv)
Copyright relates to expression of ideas in material form
and includes literary, musical, dramatic, artistic,
cinematography work, audio tapes, and computer
software[7]
 (v)
Geographical indications are indications, which identify
as good as originating in the territory of a country or a
region or locality in that territory where a given quality,
reputation, or other characteristic of the goods is
essentially attributable to its geographical origin[8]

A patent is awarded for an invention, which satisfies the

criteria of global novelty, non-obviousness, and industrial or
commercial application. Patents can be granted for products
and processes. As per the Indian Patent Act 1970, the term of
a patent was 14 years from the date of filing except for
processes for preparing drugs and food items for which the
term was 7 years from the date of the filing or 5 years from
the date of the patent, whichever is earlier. No product patents
were granted for drugs and food items.[9] A copyright
generated in a member country of the Berne Convention is
automatically protected in all the member countries, without
any need for registration. India is a signatory to the Berne
Convention and has a very good copyright legislation
comparable to that of any country. However, the copyright
will not be automatically available in countries that are not the
members of the Berne Convention. Therefore, copyright may
not be considered a territorial right in the strict sense. Like
any other property IPR can be transferred, sold, or gifted.[7]
Role of Undisclosed Information in Intellectual
Property

Protection of undisclosed information is least known to

players of IPR and also least talked about, although it is
perhaps the most important form of protection for industries,
R&D institutions and other agencies dealing with IPR.
Undisclosed information, generally known as trade secret or
confidential information, includes formula, pattern,
compilation, programme, device, method, technique, or
process. Protection of undisclosed information or trade secret
is not really new to humanity; at every stage of development
people have evolved methods to keep important information
secret, commonly by restricting the knowledge to their family
members. Laws relating to all forms of IPR are at different
stages of implementation in India, but there is no separate and
exclusive law for protecting undisclosed information/trade
secret or confidential information.[10]

Pressures of globalisation or internationalisation were not

intense during 1950s to 1980s, and many countries, including
India, were able to manage without practising a strong system
of IPR. Globalization driven by chemical, pharmaceutical,
electronic, and IT industries has resulted into large investment
in R&D. This process is characterized by shortening of
product cycle, time and high risk of reverse engineering by
competitors. Industries came to realize that trade secrets were
not adequate to guard a technology. It was difficult to reap the
benefits of innovations unless uniform laws and rules of
patents, trademarks, copyright, etc. existed. That is how IPR
became an important constituent of the World Trade
Organization (WTO).[11]
Rationale of Patent

Patent is recognition to the form of IP manifested in

invention. Patents are granted for patentable inventions, which
satisfy the requirements of novelty and utility under the
stringent examination and opposition procedures prescribed in
the Indian Patents Act, 1970, but there is not even a prima-
facie presumption as to the validity of the patent granted.[9]

Most countries have established national regimes to provide

protection to the IPR within its jurisdiction. Except in the case
of copyrights, the protection granted to the inventor/creator in
a country (such as India) or a region (such as European
Union) is restricted to that territory where protection is sought
and is not valid in other countries or regions.[1] For example,
a patent granted in India is valid only for India and not in the
USA. The basic reason for patenting an invention is to make
money through exclusivity, i.e., the inventor or his assignee
would have a monopoly if,
 (a)
the inventor has made an important invention after taking
into account the modifications that the customer, and
 (b)
if the patent agent has described and claimed the
invention correctly in the patent specification drafted,
 then the resultant patent would give the patent owner an
exclusive market.

The patentee can exercise his exclusivity either by marketing

the patented invention himself or by licensing it to a third
party.

The following would not qualify as patents:

 (i)
An invention, which is frivolous or which claims
anything obvious or contrary to the well established
natural law. An invention, the primary or intended use of
which would be contrary to law or morality or injurious
to public health
 (ii)
A discovery, scientific theory, or mathematical method
 (iii)
A mere discovery of any new property or new use for a
known substance or of the mere use of a known process,
machine, or apparatus unless such known process results
in a new product or employs at least one new reactant
 (iv)
A substance obtained by a mere admixture resulting only
in the aggregation of the properties of the components
thereof or a process for producing such substance
 (v)
 A mere arrangement or re-arrangement or duplication of
a known device each functioning independently of one
another in its own way
 (vi)
A method of agriculture or horticulture
 (vii)
Any process for the medicinal, surgical, curative,
prophylactic diagnostic, therapeutic or other treatment of
human beings or any process for a similar treatment of
animals to render them free of disease or to increase their
economic value or that of their products
 (viii)
An invention relating to atomic energy
 (ix)
An invention, which is in effect, is traditional knowledge
Rationale of License

A license is a contract by which the licensor authorizes the

licensee to perform certain activities, which would otherwise
have been unlawful. For example, in a patent license, the
patentee (licensor) authorizes the licensee to exercise defined
rights over the patent. The effect is to give to the licensee a
right to do what he/she would otherwise be prohibited from
doing, i.e., a license makes lawful what otherwise would be
unlawful.[12]

The licensor may also license ‘know-how’ pertaining to the

execution of the licensed patent right such as information,
process, or device occurring or utilized in a business activity
can also be included along with the patent right in a license
agreement. Some examples of know-how are:
 (i)
technical information such as formulae, techniques, and
operating procedures and
 (ii)
commercial information such as customer lists and sales
data, marketing, professional and management
procedures.

Indeed, any technical, trade, commercial, or other

information, may be capable of being the subject of
protection.[13]

Benefits to the licensor:

 (i)
Opens new markets
 (ii)
Creates new areas for revenue generation
 (iii)
Helps overcome the challenge of establishing the
technology in different markets especially in foreign
countries – lower costs and risk and savings on
distribution and marketing expenses
Benefits to the licensee are:
 (i)
Savings on R&D and elimination of risks associated with
R&D
 (ii)
Quick exploitation of market requirements before the
market interest wanes
 (iii)
Ensures that products are the latest
The Role of Patent Cooperation Treaty

The patent cooperation treaty (PCT) is a multilateral treaty

entered into force in 1978. Through PCT, an inventor of a
member country contracting state of PCT can simultaneously
obtain priority for his/her invention in all or any of the
member countries, without having to file a separate
application in the countries of interest, by designating them in
the PCT application. All activities related to PCT are
coordinated by the world intellectual property organization
(WIPO) situated in Geneva.[14]

In order to protect invention in other countries, it is required

to file an independent patent application in each country of
interest; in some cases, within a stipulated time to obtain
priority in these countries. This would entail a large
investment, within a short time, to meet costs towards filing
fees, translation, attorney charges, etc. In addition, it is
assumed that due to the short time available for making the
decision on whether to file a patent application in a country or
not, may not be well founded.[15]

Inventors of contracting states of PCT on the other hand can

simultaneously obtain priority for their inventions without
having to file separate application in the countries of interest;
thus, saving the initial investments towards filing fees,
translation, etc. In addition, the system provides much longer
time for filing patent application in the member countries.
[15,16]

The time available under Paris convention for securing

priority in other countries is 12 months from the date of initial
filing. Under the PCT, the time available could be as much as
minimum 20 and maximum 31 months. Further, an inventor is
also benefited by the search report prepared under the PCT
system to be sure that the claimed invention is novel. The
inventor could also opt for preliminary examination before
filing in other countries to be doubly sure about the
patentability of the invention.[16]
Management of Intellectual Property in
Pharmaceutical Industries

More than any other technological area, drugs and

pharmaceuticals match the description of globalization and
need to have a strong IP system most closely. Knowing that
the cost of introducing a new drug into the market may cost a
company anywhere between $ 300 million to $1000 million
along with all the associated risks at the developmental stage,
no company will like to risk its IP becoming a public property
without adequate returns. Creating, obtaining, protecting, and
managing IP must become a corporate activity in the same
manner as the raising of resources and funds. The knowledge
revolution, which we are sure to witness, will demand a
special pedestal for IP and treatment in the overall decision-
making process.[17]

Competition in the global pharmaceutical industry is driven

by scientific knowledge rather than manufacturing know-how
and a company's success will be largely dependent on its
R&D efforts. Therefore, investments in R&D in the drug
industry are very high as a percentage of total sales; reports
suggest that it could be as much as 15% of the sale. One of the
key issues in this industry is the management of innovative
risks while one strives to gain a competitive advantage over
rival organizations. There is high cost attached to the risk of
failure in pharmaceutical R&D with the development of
potential medicines that are unable to meet the stringent safety
standards, being terminated, sometimes after many years of
investment. For those medicines that do clear development
hurdles, it takes about 8-10 years from the date when the
compound was first synthesized. As product patents emerge
as the main tools for protecting IP, the drug companies will
have to shift their focus of R&D from development of new
processes for producing known drugs towards development of
a new drug molecule and new chemical entity (NCE). During
the 1980s, after a period of successfully treating many
diseases of short-term duration, the R&D focus shifted to long
duration (chronic) diseases. While looking for the global
market, one has to ensure that requirements different
regulatory authorities must be satisfied.[18]

It is understood that the documents to be submitted to

regulatory authorities have almost tripled in the last ten years.
In addition, regulatory authorities now take much longer to
approve a new drug. Consequently, the period of patent
protection is reduced, resulting in the need of putting in extra
efforts to earn enough profits. The situation may be more
severe in the case of drugs developed through the
biotechnology route especially those involving utilization of
genes. It is likely that the industrialized world would soon
start canvassing for longer protection for drugs. It is also
possible that many governments would exercise more and
more price control to meet public goals. This would on one
hand emphasize the need for reduced cost of drug
development, production, and marketing, and on the other
hand, necessitate planning for lower profit margins so as to
recover costs over a longer period. It is thus obvious that the
drug industry has to wade through many conflicting
requirements. Many different strategies have been evolved
during the last 10 to 15 years for cost containment and trade
advantage. Some of these are out sourcing of R&D activity,
forming R&D partnerships and establishing strategic
alliances.[19]
Nature of Pharmaceutical Industry

The race to unlock the secrets of human genome has produced

an explosion of scientific knowledge and spurred the
development of new technologies that are altering the
economics of drug development. Biopharmaceuticals are
likely to enjoy a special place and the ultimate goal will be to
have personalized medicines, as everyone will have their own
genome mapped and stored in a chip. Doctors will look at the
information in the chip(s) and prescribe accordingly. The
important IP issue associated would be the protection of such
databases of personal information. Biotechnologically
developed drugs will find more and more entry into the
market. The protection procedure for such drug will be a little
different from those conventional drugs, which are not
biotechnologically developed. Microbial strains used for
developing a drug or vaccine needs to be specified in the
patent document. If the strain is already known and reported
in the literature usually consulted by scientists, then the
situation is simple. However, many new strains are discovered
and developed continuously and these are deposited with
International depository authorities under the Budapest
Treaty. While doing a novelty search, the databases of these
depositories should also be consulted. Companies do not
usually go for publishing their work, but it is good to make it
a practice not to disclose the invention through publications or
seminars until a patent application has been filed.[20]

While dealing with microbiological inventions, it is essential

to deposit the strain in one of the recognized depositories who
would give a registration number to the strain which should be
quoted in the patent specification. This obviates the need of
describing a life form on paper. Depositing a strain also costs
money, but this is not much if one is not dealing with, for
example cell lines. Further, for inventions involving genes,
gene expression, DNA, and RNA, the sequences also have to
be described in the patent specification as has been seen in the
past. The alliances could be for many different objectives such
as for sharing R&D expertise and facilities, utilizing
marketing networks and sharing production facilities. While
entering into an R&D alliance, it is always advisable to enter
into a formal agreement covering issues like ownership of IP
in different countries, sharing of costs of obtaining and
maintaining IP and revenue accruing from it, methods of
keeping trade secrets, accounting for IP of each company
before the alliance and IP created during the project but not
addressed in the plan, dispute settlements. It must be
remembered that an alliance would be favorable if the IP
portfolio is stronger than that of concerned partner. There
could be many other elements of this agreement. Many drug
companies will soon use the services of academic institutions,
private R&D agencies, R&D institutions under government in
India and abroad by way of contract research. All the above
aspects mentioned above will be useful. Special attention will
have to be paid towards maintaining confidentiality of
research.[1–18]

The current state of the pharmaceutical industry indicates that

IPR are being unjustifiably strengthened and abused at the
expense of competition and consumer welfare. The lack of
risk and innovation on the part of the drug industry
underscores the inequity that is occurring at the expense of
public good. It is an unfairness that cannot be cured by
legislative reform alone. While congressional efforts to close
loopholes in current statutes, along with new legislation to
curtail additionally unfavorable business practices of the
pharmaceutical industry, may provide some mitigation,
antitrust law must appropriately step in.[21] While antitrust
laws have appropriately scrutinized certain business practices
employed by the pharmaceutical industry, such as mergers
and acquisitions and agreements not to compete, there are
several other practices that need to be addressed. The grant of
patents on minor elements of an old drug, reformulations of
old drugs to secure new patents, and the use of advertising and
brand name development to increase the barriers for generic
market entrants are all areas in which antitrust law can help
stabilize the balance between rewarding innovation and
preserving competition.[20]

Traditional medicine dealing with natural botanical products

is an important part of human health care in many developing
countries and also in developed countries, increasing their
commercial value. The world market for such medicines has
reached US $ 60 billion, with annual growth rates of between
5% and 15%. Although purely traditional knowledge based
medicines do not qualify for patent, people often claim so.
Researchers or companies may also claim IPR over biological
resources and/or traditional knowledge, after slightly
modifying them. The fast growth of patent applications
related to herbal medicine shows this trend clearly. The patent
applications in the field of natural products, traditional herbal
medicine and herbal medicinal products are dealt with own
IPR policies of each country as food, pharmaceutical and
cosmetics purview, whichever appropriate. Medicinal plants
and related plant products are important targets of patent
claims since they have become of great interest to the global
organized herbal drug and cosmetic industries.[22]
Some Special Aspects of Drug Patent
Specification

Writing patent specification is a highly professional skill,

which is acquired over a period of time and needs a good
combination of scientific, technological, and legal knowledge.
Claims in any patent specification constitute the soul of the
patent over which legal proprietary is sought. Discovery of a
new property in a known material is not patentable. If one can
put the property to a practical use one has made an invention
which may be patentable. A discovery that a known substance
is able to withstand mechanical shock would not be patentable
but a railway sleeper made from the material could well be
patented. A substance may not be new but has been found to
have a new property. It may be possible to patent it in
combination with some other known substances if in
combination they exhibit some new result. The reason is that
no one has earlier used that combination for producing an
insecticide or fertilizer or drug. It is quite possible that an
inventor has created a new molecule but its precise structure is
not known. In such a case, description of the substance along
with its properties and the method of producing the same will
play an important role.[23]

Combination of known substances into useful products may

be a subject matter of a patent if the substances have some
working relationship when combined together. In this case, no
chemical reaction takes place. It confers only a limited
protection. Any use by others of individual parts of the
combination is beyond the scope of the patent. For example, a
patent on aqua regia will not prohibit any one from mixing
the two acids in different proportions and obtaining new
patents. Methods of treatment for humans and animals are not
patentable in most of the countries (one exception is USA) as
they are not considered capable of industrial application. In
case of new pharmaceutical use of a known substance, one
should be careful in writing claims as the claim should not
give an impression of a method of treatment. Most of the
applications relate to drugs and pharmaceuticals including
herbal drugs. A limited number of applications relate to
engineering, electronics, and chemicals. About 62% of the
applications are related to drugs and pharmaceuticals.[1–24]
CONCLUSIONS

It is obvious that management of IP and IPR is a

multidimensional task and calls for many different actions and
strategies which need to be aligned with national laws and
international treaties and practices. It is no longer driven
purely by a national perspective. IP and its associated rights
are seriously influenced by the market needs, market
response, cost involved in translating IP into commercial
venture and so on. In other words, trade and commerce
considerations are important in the management of IPR.
Different forms of IPR demand different treatment, handling,
planning, and strategies and engagement of persons with
different domain knowledge such as science, engineering,
medicines, law, finance, marketing, and economics. Each
industry should evolve its own IP policies, management style,
strategies, etc. depending on its area of specialty.
Pharmaceutical industry currently has an evolving IP strategy.
Since there exists the increased possibility that some IPR are
invalid, antitrust law, therefore, needs to step in to ensure that
invalid rights are not being unlawfully asserted to establish
and maintain illegitimate, albeit limited, monopolies within
the pharmaceutical industry. Still many things remain to be
resolved in this context.
Footnotes