International Intellectual Property: Issues and Its Essential Value in Twenty-First Century Business

• Author: David A. Steiger
• Pages: 193-237

It is only to be expected that as commerce becomes increasingly global in

scope, not only the nominal but also the practical value of intellectual prop-

erty (IP) would grow exponentially. The reasons for this are straightforward

enough. First, the development of a truly global marketplace has caused

an explosion of competitive forces that have led to a paradigmatic shift of

economic activity toward developing nations.1 Second, widespread use of

computer technology, particularly in lower cost nations, has been driving a

commoditization of goods and services via digitized design, manufacturing,

and distribution.

2

This in turn causes competitive advantage in the current

landscape to be decided by a rm’s capacity to manage, harness, and pro-

tect key data, and its ability to safeguard unique and innovative business

models. As restated by Jaime Stapleton, Associate Research Fellow at the

University of London,

the necessity to protect the value-added components in consumer prod-

ucts, together with the general value of intellectual property licences,

1. Siemens 2010 Annual Report, Section I, at 29, http:// www .siemens .com /investor /pool /en

/investor _relations /siemens _ar _2010 .pdf.

2. See Langdon Morris, The Driving Force of Change, I M (Aug.

26, 2011), http:// www .innovationmanagement .se /2013 /07 /18 /the -driving -forces -of -change.

193

Chapter 8

International Intellectual Property:

Issues and Its Essential Value in

Twenty-First Century Business

Steiger_TransBorders_20140625_09-05_FinalPass.indd 193 6/26/14 9:21 AM

has pushed intellectual property to the top of foreign policy agendas

in the developed world.3

In a knowledge-based business climate where protecting such assets is so

critical, it is little wonder that informed observers describe an emerging

“global IP battleeld” where literally billions of dollars are spent in acquiring

cutting-edge patent portfolios.4 The number of global patent applications

has exploded, from 800,000 in the early 1980s to 1.8 million in 2009.5

Similarly, the volume of trademark applications worldwide has increased

from 1 million per year in the mid-1980s to 3.3 million in 2009, while

industrial design applications globally have more than doubled over the

period from 2000 to 2009.6 And there is little sign of this trend slowing.

Despite an overall decline in litigation spending, IP litigation is expected

to grow by 2.8 percent, to hit approximately $3 billion, according to BTI

Consulting Group’s Litigation Outlook report for 2014.7

Whether one discusses the largest and most advanced high-tech con-

glomerates or a more humble small to medium-sized enterprise (SME)

taking its rst steps into international operations, the fundamental benets

of building and protecting IP assets are largely the same. Understanding

these benets—and the challenges you face in trying to secure them in a

cross-border context—is a crucial part of planning and executing prot-

able overseas ventures. Ownership of IP rights can constitute, for instance,

a key component of your marketing and branding strategy, allowing you

to meaningfully differentiate your company from your competitors’.8 It

can also be used strategically. It can be used on one end of the spectrum to

3. Jaime Stapleton, Art, Intellectual Property and the Knowledge Economy, Doctoral the-

sis, Ch. 5 at 218, University of London (2002), http:// www .jaimestapleton .net /aipkeve .pdf.

4. Steven Andersen, The Global IP Battleeld, I C, 2 (Jan. 1, 2012), http:// www

.insidecounsel .com /2012 /01 /01 /extended -version -the -global -ip -battleeld.

5. 2011 World Intellectual Property Report, W I P O-

 8, http:// www .wipo .int /export /sites /www /econ _stat /en /economics /wipr /pdf /wipr _2011

_intro .pdf.

6. Id. at 9.

7. High-Stakes IP Work Continues Its Steady Climb, GCs Say, BTI C G

(Sept. 13, 2013), http:// www .bticonsulting .com /press /2013 /9 /12 /high -stakes -ip -work -continues

-its -steady -climb -gcs -say .html.

8. Intellectual Property Rights and Marketing, World Intellectual Property Organization,

http:// www .wipo .int /sme /en /ip _business /marketing /ip _rights .htm.

CHAPTER 8194

Steiger_TransBorders_20140625_09-05_FinalPass.indd 194 6/26/14 9:21 AM

stop rivals from making, using, or selling items incorporating the protected

property,9 while on the other, to collaborate to produce jointly owned IP

or to utilize “patent pools” to ease the burden of negotiating with a frag-

mented group of rights holders.10

Additionally, however, IP assets can often be monetized. They can be

sold, licensed, or used as collateral or security for debt nance.

11

This is par-

ticularly important for start-up companies for whom intellectual property

may be the only signicant asset of value that they have.12 Intermediaries

such as IP clearinghouses, exchanges, auctions, and brokerages have slowly

begun to establish themselves in the business of bringing together buyers

and sellers of intangibles.13

Types of IP: The Four Traditional Categories and Beyond

The following is a listing of the four classically recognized classes of intel-

lectual property:

1.

Patents: Patents cover tangible things and confer the legal right to

exclude others from manufacturing or marketing the subject items.

Patents can also be registered in foreign countries as part of a global

IP protection strategy. Even when patented, though, others can gen-

erally apply to license your product.

2.

Trademarks: Generally, trademarks constitute a name, phrase, sound,

or symbol exclusively associated with the holder’s services or products.

3.

Copyrights: Copyrights are protections for written or artistic expres-

sions of ideas (but not ideas themselves) xed in a tangible medium,

9. J.D. Harriman, Patent Enforcement Best Practices, The Implications of Intellectual Prop-

erty Protection, in P E B P (2007).

10. 2011 World Intellectual Property Report, supra note 5, at 12–13.

11. S.K. Verma, Financing of Intellectual Property: Developing Countries’ Context (Janu-

ary 2006), http:// nopr .niscair .res .in /bitstream /123456789 /3550 /1 /JIPR %2011 %281 %29

%2022 -32 .pdf.

12. Jon M. Garin, Start-Ups 101: Intellectual Property: Reecting Value in Intangible Assets,

C, C  G (May 2008), http:// www .gcglaw .com /resources /business

/intangible _assets .html.

13. 2011 World Intellectual Property Report, supra note 5, at 9.

195INTERNATIONAL INTELLECTUAL PROPERTY

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