Md. Joynal Abdin
The Financial Express on June 25, 2010
There is a misconception among us (businessmen, academicians and professionals) in Bangladesh that IPR means an extra burden to pay royalties to the licensors (means a foreign company). But most of us never tried to learn it from a neutral perspective. We never try to go to its details whether it is good or bad for our industries. Before going to discuss advantages and disadvantages of IPR, let’s try to give a quick look into the current scenario of international business environment from a transformation vie.
There are two types of assets in our GDP. These are tangible assets or goods and intangible assets or services, goodwill and other forms of intellectual properties. In 1942 there were 62 per cent tangible assets and 38 per cent intangible assets in total global business arena. In 1992 the scenario came into complete opposite look that is tangible assets cost 38 per cent and intangible assets cost 62 per cent of global business. Intangible assets are increasing so rapidly that it rose to 87 per cent of global assets whereas tangible assets cost only 13 per cent in 2002.
From the above discussion it is clear that intangible assets are becoming more important than tangible ones. Questions may arise as to what are the intangible assets costing 87 per cent of global GDP? If we find 5,000 HS Code for goods, 25,000 intangible assets can be shown around us. Large numbers of intangible but payable assets are there in one heading of services like those of doctors, nurses, teachers, lawyers and banking services, insurance services, guide services, consultancy services, different types of counsellings and many more.
Tangible assets are assigned to an owner by registration and preserved under locker or security and penalty is there for violating ownership of tangible assets. Civil and criminal courts are dealing with tangible assets related cases. But what about intangible assets? Why should intangible assets or intellectual property be protected? What are the justifications of protecting IPR?
At first let’s try to know what IPR is – its classification and justification/uses of it in the context of Bangladesh. IPR is the legal right of an innovator/creator to exclude others in replicating his/her innovation for industrial production which results from intellectual activity in the industrial, scientific, literary and artistic fields. To make it easier we can say that IPR is the right of the innovator to get some monopoly power over his creation for industrial production for a specific period of time.
Now question may arise as to why does the innovator need monopoly over his creation? This is because an invention is a result of continuous research and development work. It needs money and rigorous hard work. Suppose that it takes several years for a group of people and investment of millions of dollars to invent a design interface computer. But what is the cost of a single piece of computer. It is not more than a thousand dollars. So what about the rest million dollars if any one can produce computer by copying a single piece? How the innovator will get back his invested money and reward for continuous R and D? Who will invent something for betterment of the society to upgrade our standard of living if we don’t ensure his money back with reasonable reward?
From the above discussion it is clear that it is our moral duty to ensure innovator’s invested money back to his pocket with a reasonable reward for the same. To ensure it we must give him monopoly to produce his goods without copying by others so that he can get back his investment behind the innovation for R and D purpose. Finally we can state that there is a justification of IPR protection.
Now come to the point. How many types of IPR can generally be found in daily business arena? In broad category, there are four types of IP rights. These are:
03. Industrial design
Trademark is words, letters, numbers, drawings, pictures, shapes, colors, logotypes or advertising slogans used to identify a company and its products for distinguishing from competing companies’ products. Questions may arise as to why trademark is required to be registered? A trademark is used to distinguish a company’s products from those of its competitors. It creates brand and helps to establish loyal customers for its other products by using company’s goodwill. But if the trademark is not registered duly, then others can produce similar products with the same trademark and original company has to lose market share and profit. So it is for the company’s own interest to register trademark to protect its brand image for proper utilisation of promotional expenses. Trademark may be classified into different classes based on its uses like trademark, service mark, collective mark, certification mark and well-known mark etc.
Patent is the right of an inventor granted by the government to exclude others to industrially produce his invented product or service for a limited period of time. Question may be asked as to why does an investor need to get patent registration? The answer is very simple that patent registrations provide monopoly to the inventor for industrial production of his invented goods and service for a limited period of time so that he can get back the money used in R and D purpose to invent the product. Patent increases company’s competitiveness against its competitors. Patent can ensure additional income by licensing its production process to others. Patent requires elaborate disclosure of invention but the company can get another alternative protection of its invention by maintaining trade secrecy of his invention but it must be registered under trade secret protection system of the state.
Now another broad debate may be in place that how does patent can ensure social welfare? But the answer is that patent provides protection and profit to the inventor which may encourage further invention. We must remember that any innovation is a technical solution to a problem. This will enhance standard of living. It means welfare of the society. Another special consideration may be granted that patent right may be relaxed for education and healthcare purpose. Thus social welfare may be ensured.
Industrial design is the ornamental or aesthetic aspect of a product with its unique shape and size. Registering ornamentation and shape of product is important to protect creativity and ensure distinctiveness of a company’s product for better utilisation of the product’s popularity. It is necessary to protect industrial design so that none can copy the product’s shape and ornamentation.
Copyright covers a wide variety of creative output of an individual or a company like prose and poetry, computer programme and software, website content, materials published in newspaper or journal, product catalogue, instruction sheet, operating manual for machine or consumer product, label, packaging, advertising, billboard and speech or performance of artistes. Copyright is slightly different from the above three from two different aspects i.e. it provides protection and ensures royalties for comparatively long period than those of the earlier three. Patent covers maximum 15 to 25 years but copyright protects throughout the writer’s/artiste’s life tenure and 50 to 60 years after his death. Scope of copyright is also larger than other IP rights. Its scope covers literary works, music, drama, artistic drawings, cartoons, photographs, computer programmes, database, maps, charts, cinema, multimedia products and research or technical publications. Secondly, other IP rights are territorial whereas copyright is global. Because all WIPO member states are committed to respect others’ copyright.
Now come to the point. What are the negative aspects of implementing IPR in least developed countries? Generally IP protected products are comparatively costly because of monopoly production against universal demand from the market. In majority of cases poor people cannot afford IP protected products. On the other hand maximum IP protected products are invented by western MNCs. Paying dollars as royalty is tougher in part of the least developed countries. Paying royalty is an extra burden that decreases competitiveness of a company’s products. It impacts negatively on the balance of payment of a poor country. Complex formalities of getting licence from the investors are also discouraging smaller companies to get licence. As a result least developed governments are not willing or unable to implement IPR. At the same time implementing IPR requires IP infrastructure in every field which is out of reach for the poor countries. For example, one copy of windows XP costs USD 100; it is equal to BDT 7000. It is impossible for average Bangladeshi computer user to spend BDT 7000 for windows and another BDT 7000 for office software equal to a low configured computer’s cost in Bangladesh.
Another scenario can be analysed. A single copy of an original book for business, medicine or engineering faculty costs BDT 2,500 to 4,500. If one requires seven to eight books for a semester and has to buy original copies, then only book purchasing cost will be BDT 21,000 which is more than one year’s and in some cases four years’ tuition fees of a Bangladeshi undergraduate level student. And it is quite impossible for 90 per cent of the guardians to bear the expenses. In case of medicine to the poor patients, baby food, and other nutritious cereals the case is the same. So it is impossible to implement IPR in poor countries. This situation makes negative aspects in our mind about IPR. As a result we are reluctant to study IPR and a predetermined mindset influences us to think negatively about IPR. But there are so many positive opportunities in IPR for us which we are not aware of.
Now let’s try to have a look at what opportunities IPR can offer us. Firstly, IPR can protect our invention and ensure royalty against our innovative outputs. It can create brand image of our products abroad. Today there is a revolution of branding Bangladesh. Branding Bangladesh is impossible without proper trademark and design registration and implementing related laws duly at home and abroad.
Patent literatures are the largest stock of world’s most recent innovative ideas that are not protected in every country especially in the least developed countries like Bangladesh. For this reason patent literatures are the source of new business for us. Exploiting patent literature to know the current trend of international business and get new ideas of production may be major substitute of R and D for poor nations.
For example, one machine or process of manufacturing a product has been invented by a US scientist and it gets patent registration in the USA. If it is not registered in Bangladesh, then anyone is welcome to produce and market that product in Bangladesh without any restriction. Patent literature describes each production process of the product elaborately and any qualified engineer or professional can produce the product by reading its patent literature. It also includes pictures, diagrams, and figures. So the poor nations like us can easily get a new invention without spending a single penny from the patent literature and produce those goods commercially for native market. Thus patent can be an opportunity for us rather than a threat. To exploit thousands of such opportunities we should be qualified in IP education and go through patent databases around the world. Bangladesh government can draft an IP policy and initiate IP education at different academic levels to exploit its opportunities without implementing the negative aspects of it.