Intellectual property

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Citation: 3 Sri Lanka J. Int'l L. 51 1991
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THE PROTECTION OF INTELLECTUAL
PROPERTY - OF METAPHYSICS,
MOTIVATION, AND MONOPOLY
by Jay Erstling*
Intellectual property, the legal field that encompasses patents, trade
marks, and copyright was once described by an American judge as the
"metaphysics of the law".1 It was the judge's view that intellectual property is
abstract, amorphous, almost evanescent, and perhaps even undefinable. Despite
that damning characterization, this paper will attempt to give some meaning to
intellectual property by examining what it is, what it does, and why it is protected
in almost every country, including Sri Lanka, which has enacted a modem and
effective intellectual property code.2 In addition, the paper will survey two
recent developments that have challenged traditional notions of intellectual
property protection.
Creations of the Human Intellect
The judge's comparison of intellectual property and metaphysics was
particularly apt since intellectualproperty concerns creations of the human
intellect, such as inventions, literature, music, drama, and even advertising
slogans. The confusion in. understanding intellectual property comes from the
fact that although the creations are real - i.e., they exist and have value - they
are the result of ideas that are intangible. Intellectual property relates not to the
tangible creations, but rather to the intangible ideas that are the basis of those
creations and that give those creations their meaning and scope.
For example, if we think of a work of literature, such as a novel, the
intellectual property does not consist of the book itself, which can be picked up,
examined, and read. The intellectual property consists of the expression of the
author's ideas that are embodied in the book - the words that the author uses to
give the characters meaning and to develop the plot. If someone were to steal a
Professor of Law University of St Thomas, St Paul, Minnesota; Fulbrdght Wsing
Professor, Faculty of Law, University of Colombo (1988- 1989).
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copy of the book, that person would be committing theft, but he or she would
not have violated the author's intellectual property rights. If, however, the
person were to steal the author's words and use them elsewhere as his or her
own, the author's intellectual property rights would be infringed and the author
would be entitled to judicial relief.
By affording protection to intellectual property, we grant recognition to
the value of the creations of our minds. But do those creations merit special
protection? In this author's view, there are at least two reasons why they do.
Firstly, there is a compelling moral argument in favor of intellectual property
protection. Since we, as members of civilized society, condemn the
misappropriation of tangible property, we must likewise condemn the
misappropriation of intellectual property, for the products that we create with
our minds demand at least the same respect as the products that we purchase.3
Secondly, there is a cogent motivational argument in support of
intellectual property protection. The assumption underlying intellectual
property law is that to reward creators by granting them intellectual property
rights in their creations is the most effective way to motivate society to continue
creating. All intellectual property systems rest on the premise that granting
protection will result in greater innovation, increased inventiveness, and
heightened literary and artistic creativity. Therefore, we all benefit from
intellectual property protection since it enables us to live in a richer world.
Recent studies, particularly in the area of patent law (i.e., the law dealing
with the protection of inventions), have underscored the interrelationship
between intellectual property protection and technological progress and
growth4 The studies, which were carried out in the Federal Republic of
Germany, the United States, and Japan, indicate that the protective function of
intellectual property serves as a major incentive to research and development
activity. It does so by promising an ample retum of profits from the costs of
innovation and inventiveness by affording protection against imitators and
misappropriators.5 An increase in productive and innovative research and
development should, according to the studies, lead to greater economic growth,
development, and prosperity.
Monopoly Power and the Exclusive Right
The protection to which intellectual property is entitled is based on the
concept of monopoly: the owner of intellectual property is given monopoly
power over the use of his or her creative idea. This type of monopoly is known
as an exclusive right because it bestows upon the creator the right to exclude
others from using the protected property without his or her authorization. The
The Protection of Intellectual Property
grant of an exclusive right empowers the intellectual property owner to seek an
injunction, damages, or other judicial relief to prevent unauthorized persons
from copying his or her words, or misappropriating the idea that is the
foundation of his or her invention. Obtaining the creator's authorization often
entails the payment of a fee or royalty, which constitutes a source of income as
well as a source of continued inspiration for the creator. Without the grant of an
exclusive right, access to intellectual property would be free to everyone, but
the motivation to create would be greatly reduced.
The rationale for the grant of an exclusive right is not to restrict access
to intellectual property, but rather to encourage the widespread dissemination
of creators' ideas. Once ideas have been made public, they may be copied with
impunity by anyone. Creators, therefore, will not be willing to make their ideas
public unless they are provided with a secure legal framework that permits them
to control and obtain remuneration from the use of their creations. It is only by
granting creators the right to control use, and to prevent unauthorized use, that
they will be willing to reveal their ideas and add them to the body of public
knowledge, rather than merely keeping them secret.
The importance of an exclusive right in intellectual property is perhaps
best illustrated by comparing the sale of tangible and intellectual property. The
seller of a car, which is tangible property, would normally not hesitate to let a
prospective purchaser inspect and even test-drive the car. If the buyer chose not
to undertake the purchase, he or she would hand back possession to the seller,
who would be neither better nor worse off than before showing the car to the
prospective purchaser.
But if the sale concerned intellectual property--an invention, for
instance-the result would be very different. If the creator of an invention not
protected by an exclusive right revealed the invention to a prospective
purchaser, and disclosed to the purchaser the central idea around which the
invention was based, the purchaser would be free to appropriate the idea and
reproduce the invention without paying any compensation to the inventor. Thus
the inventor would have no choice but to keep his or her invention secret. By
having the right to exclude unauthorized use of the idea, however, the inventor
can disclose the invention to the public without fear that it will be
misappropriated. With every disclosure of an inventive idea,the world's
storehouse of knowledge is increased.
Limitations on the Exclusive Right
Despite its advantages as a motivator of creativity, the exclusive right
that is granted to the owner of intellectual property is not absolute. Most societies
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view monopolies with suspicion and therefore put limits on their scope and
effect. With respect to intellectual property, the grant of monopoly power is
balanced by placing limitations on the duration and potential abuses of the
exclusive right.
For example, to make certain that intellectual property protection serves
as a generator of knowledge, the grant of a patent, which is the exclusive right
to use an invention, is conditioned upon the inventor fully disclosing his or her
idea in the patent application. In that way, other inventors and researchers may
use the idea, not to copy the invention, but as an effective research tool in
creating newer and better inventions. Moreover, to limit excessive
profit-making, a patent does not last indefinitely. In Sri Lanka, the exclusive
right has a fifteen-year duration, after which the invention falls into the public
domain and may be used freely by anyone.6
Similar limitations exist with respect to trade marks and copyright. If a
trade mark, which is a visible sign that serves to distinguish the goods or services
of one enterprise from those of otherenterprises7, is not used by its owner within
five years after its grant, the right to protection ceases.8 The purpose of a trade
mark is to aid in the marketing of a product or service, and not merely to permit
the monopolization of names, words, or other visible signs. Consequently, if a
trade mark is not being used appropriately, the only just solution is to deny the
owner the right to prevent others from making use of it.
The grant of a monopoly in copyright - which is the protection afforded
to authors of original literary, artistic, and scientific works - is limited
particularly by the concept of fair use.9 According to this concept, there-are
certain interests of society that override the rights of creators, including access
to news reporting, editorial criticism, scholarship, or teaching. A journalist, for
example, must be free to quote from a literary or scientific work (provided that
appropriate attribution is given) in order to keep the public informed about
newsworthy events. Wherever fair use dictates, copyright enforcement may be
denied.
A Balancing of Interests
The core of intellectual property protection consists, therefore, of
achieving a balance between granting an exclusive monopoly right and setting
limits on that right. In order for an intellectual property system to attain its goals
of fostering creativity and serving as a conduit for economic growth, the balance
struck must both ensure an adequate reward for creators and guarantee public
access to creative ideas. Creators, in other words, must be allowed to reap the
fruits of their labor, but not at the unjust expense of the rest of the population,
The Protection of Intellectual Property
who must also be permitted to enjoy the benefits that the creators have brought
about.
It is up to each nation to determine, according to its own needs, the
appropriate balance that must be struck between granting an unfettered
exclusive right on the one hand and placing constraints on that right on the other.
In developing countries; where the need to foster domestic growth is crucial,
greater control over the monopoly right might be justified to make certain that
intellectual property protection is exploited in the national interest.
The Sri Lankan legislation, for example, prevents copyright owners from
abusing their exclusive right by unreasonably prohibiting the publication of
Sinhala or Tamil translations of works originally published in otherlanguages. 10
According to the Code of Intellectual Property Act, when a copyrighted work
has not been published in Sinhala or Tamil within ten years of its original
publication, the exclusive right to prevent translations comes to a halt.1I Since
anyone may then publish a Sinhala or Tamil version of the work without the
author's authorization or payment of a fee, the possibility that copyright could
impede the dissemination of works in the nation's languages is effectively
eliminated.
To succeed as a catalyst for growth and development, an intellectual
property system must therefore reflect and respond to national needs and
priorities. Because a nation's interest may change over time, the intellectual
property system should also be reassessed periodically to make sure that it
remains in harmony with national goals.
Technological Challenges to Intellectual Property
In recent years, the need for nations to undertake periodic reassessments
has become particularly important as technological advances have created
challenges to traditional notions of intellectual property. The advance of
photocopying and the enormous strides In blotechnology, for example, are
forcing us to rethink longstanding principles of copyright and patent protection.
Photocopying and Copyright Protection
A basic rule of copyright law Is that the owner of copyright Ina work of
literature or art has the right to exclude others from reproducing that work.
Photocopying, however, revolutionized the concept of making reproductions,
and brought with It Immense benefits for educational, library, and research
Institutions. The need to reconcile the educational and societal advantages of
photocopying with the exclusive right of the copyright owner to prevent
reproductions has thus become a matter of urgency. In weighing the conflicting
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interests, the scales have usually tipped in favor of the right of limited
photocopying.
In the United Kingdom, the government recognized that photocopying
for fair use purposes (i.e., for teaching and research) was of great value and
therefore deserved to be encouraged. In a White Paper entitled Intellectual
Property and Innovation, which analyzed the legal problems created by the
"ubiquitous photocopier", the government proposed to resolve conflicting
interests by promoting the adoption of agreements known as "blanket
licences".1 Under such agreements, schools, libraries, universities, and other
institutions where extensive photocopying occurs agree to pay a set fee to a
copyright licensing agency that, in turn, distributes the fees collected among
authors and publishers. Blanket licences maintain respect for the rights of
authors and permit relatively unhindered photocopying, but they are a difficult
burden to administer. Nevertheless, the system of blanket licences has also
found favor in the Federal Republic of Germany and the countries of
Scandinavia.
The United States has adopted a more free-wheeling approach. The
United States Copyright Act provides that photocopying constitutes a partial
exception to the exclusive right but does not fully define the scope of permissible
copying. 13 To give substance to the provisions of the statute, an agreement was
adopted by publishers, authors, and educational institutions that allows limited
copying of portions of works when used for scholarly purposes.14 The
agreement, which has since been endorsed by the United States Congress,
permits photocopying provided that it is characterized by "brevity and
spontaneity". In other words, photocopying is allowed if it constitutes less than
wholesale reproduction of entire works, and multiple copies may be made if no
alternative is possible due to time constraints. The agreement emphasizes,
however, that photocopying is not permitted if the work is readily available for
purchase.
Those two solutions make a great deal of sense for countries like the
United Kingdom or the United States, where textbooks and other teaching and
research materials are plentiful, and students and institutions can afford to
purchase them. But would such solutions be appropriate in many developing
countries where textbooks are not available and even if they were, would be
prohibitively expensive for most of the population? In balancing the interests
of copyright owners and the right to make photocopies, the principle of fair use
would require developing countries to establish more permissive photocopying
solutions.
Such is the case in Sri Lanka where the Code of Intellectual Property Act
The Protectiono f IntellectualP roperty
gives libraries, educational establishments, and scientific institutions the right
to reproduce literary, scientific, and artistic works provided that two criteria are
met.15 Firstly, the work must have been lawfully made available to the public
so that the authors's copyright is respected. Secondly, the photocopying has to
be reasonable, meaning that the number of copies made has to be limited to the
need in question, the photocopying must not conflict with the normal
exploitation of the work, and it must not unreasonably prejudice the interests of
the author. The Code's provisions strike a fair and appropriate balance by
responding to both the educational needs of the country and the rights of
copyright owners.
Biotechnological Inventions and Patent Protection
An even more crucial challenge to traditional notions of intellectual
property concerns the science of biotechnology and the patenting of
biotechnological inventions. Biotechnology concerns the study and
manipulation of living and non-living biological matter, such as plants, animals,
micro-organisms, seeds, cells, and enzymes. With the development of genetic
engineering, scientists have acquired the capacity to artificially modify genes
and genetic structures. Genetic engineering has given scientists the power to
invent new life forms and new food strains, and the impact of that power on the
future of medicine, nutrition, energy, and environmental protection will no
doubt be unprecedented. The challenge that faces us is whether or not to allow
these new types of biotechnological inventions to be patented.
Traditionally, biological inventions, such as methods of fermenting wine
or beer, or plant or animal breeding, were excluded from the scope of patent
protection. To be patentable, an invention must be industrially applicable,16
which requires the invention to be both describable and totally controllable so
that the products resulting therefrom do not suffer from unwanted variation. In
the field of biology, both those requirements had been considered unattainable,
but now the situation has changed, at least in principle. As a result of genetic
engineering and other biotechnological advances, it is possible to create
modified micro-organisms and other life forms, and to describe (or provide
samples of) the new structures that are created, as well as to ensure that those
structures will not be subject to random hereditary change. Consequently, must
we now open the door to patenting new breeds of micro-organisms, apimals, or
plants, or new processes for altering or creating life forms?
The United States, with its characteristic sense of abandon, seems to have
given an unqualified go-ahead. the United States Supreme Court stated in a
decision sanctioning the patentability of an oil-eating, man-made
micro-organism that "anything is patentable under the sun".1 Based on that
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decision, patents have been granted for a process that creates artificial insulin
and, more recently, for a new breed of laboratory rat. In the United States,
therefore, the boundaries of patentable subject matter appear to be limitless.
Other countries are less eager to embrace such an expansive position.
Because biotechnology represents unforeseen potential for the future, countries
like the United Kingdom and the Member States of the European Communities
have urged more caution. In the United Kingdom, the White Paper on
IntellectualP roperty and Innovation 8 stated that the widespread patenting of
biotechnologically engineered genes could have far-reaching consequences if
the rights given to the gene breeders were to become too extensive. For instance,
the White Paper mentions a situation that could easily arise in which the
combination of two desirable traits in a species of food crop would be prevented
because the patents c6vering the relevant genes were held by rival breeders. The
United Kingdom does not rule out tipping the balance in favor of patentability,
but feels that the potential ramifications are too great to make a conclusive
decision right now.
Those ramifications are even greater for developing countries, where it
is imperative that access to new food crops, pharmaceutical, or other genetically
engineered innovations should be guaranteed in the interests of ending hunger
and improving health. Although granting patents would help defray the
exorbitant cost of genetic research and would enable researchers to recoup
expenses, humanitarian considerations might dictate the adoption of alternative
methods to encourage genetic research. Among the alternatives that would need
to be examined are the desirability of establishing tax holidays or providing
direct grants or subsidies. If one thing is clear, however, it is that the question
of the patentability of blotechnological inventions will loom very large In the
future, and developing countries will have to play a significant role in appraising
the responses that intellectual property law makes possible.
Conclusion
Intellectual property may well be the metaphysics of the law, but It Is
also a subject of growing importance in our legal systems. Intellectual property
touches upon major social issues that demand our attention and our thought. In
finding solutions to those issues, we must never lose sight of the underlying
balance of interests that is the foundation of intellectual property. By
maintaining that balance in an appropriate and equitable manner, we can ensure
that Intellectual property law will constitute a tool for the social good.
NOTES
1. Folsomv. Marsh, 9 Fed. Cases 342, 344 (1841) (Story, J.).
The Protection of IntellectualP roperty
2. Code of Intellectual Property Act, No. 52 of 1979, as amended by Code of Intellectual
Property (Amendment) Act, No. 2 of 1983.
3. See, in this respect, a brief article by Registrar of Patents and Trade Marks, K.
Jayasinghe, entitled "New Intellectual Property Law," in DailyNews, 8 November 1988.
4. See G. RAHN, "Industrial Property as an Element of National Industrial Strategy," in
Proceedings of the WIPO Symposium on Industrial Property and Economic and
Technological Development, Hong Kong, March 2-4, 1988, Geneva, World Intellectual
Property Organization, 1989, at p. 29.
5. According to a German survey, 21% of patented inventions would never have been
made had there been no patent protection. A U.S. study revealed that 52.4% of small
enterprises, and 33.3% of large enterprises, would engage in less research and
development activity if patent protection did not exist. And a Japanese survey indicated
that 30% of all responding enterprises felt that the existence of the patent system was
the most powerful incentive for innovation. RAHN, ibid.
6. Section 80 (1), Code of Intellectual Property Act. The average duration of patent
protection in other countries is from 15 to 20 years.
7. Section 97, Code of Intellectual Property Act.
3. Section 132 (1) (a), Code of Intellectual Property Act.
9. Section 13, Code of Intellectual Property Act. The concept of "fair use" is also frequently
referred to as "fair dealing".
10. Section 15, Code of Intellectual Property Act.
11. Although ten years may seem like an unduly long time to have to wait for a Slnhala or
Tamil translation, it should be noted that copyright protection normally lasts for the life
of the author plus 50 years after the author's death. Section 19, Code of Intellectual
Property Act.
12. United Kingdom Department of Trade and Industry, Intellectual Propery and
Innovaton, London, 1986, at pp. 46-47.
13 Section 108, United States Copyright Act of 1976, 17 U. S. C. 108.
14. Agreement on Guidelines for Classroom Copying In Not-for-Profit Educational
Institutions.
15. Section 13 (e), Code of Intellectual Property Act.
16. Section 60, Code of Intellectual Property Act.
17. Diamond v. Chakrabarty, 100 S. Ct. 2204 (1980) (Burger, C. J.). Ironically, the
micro-organism, an artificially created bacterium, proved not to be industrially
marketable because once unleashed, it would have been Irretrievable and could have
potentially gobbled up the world's oil supply.
18. See note 12, supra,a t pp. 31-32