Role of IPRIn Creativity AndKnowledge EconomySubmitted by: Submitted to:Vinay Prajapati & Kathiravan R. Ms. Amisha MehtaM.F.Tech, Sem-I, Asst. ProfessorNIFT, Gandhinagar NIFT, GandhinagarDate of Submission: 13-09-2010
What is an intellectual property?Intellectual property is unique, as it is the fruit of personal creation and inventiveness. It isnothing but inventing some new products and introducing it to the society and having therights to that product by the creator, in order to protect the creation from infringement.For e.g.: PICASSO painting, a MANI RATNAM film, a R.K.NARAYAN’S novel, a new method ofirrigation for farmers in arid regions, the invention of the light bulb, a computer chip or amicroprocessor.What is creativity?Creativity is an act of turning new and imaginative ideas into reality. Creativity involves twoprocesses: thinking, then producing.What is knowledge economy?The knowledge economy is a term that refers either to an economy of knowledge focusedon the production and management of knowledge in the frame of economic constraints. Ina knowledge economy, knowledge is a product.Knowledge economy is an economy which is “directly based on the production, distributionand use of knowledge and information”. In a knowledge based economy, knowledge is atool.As we have seen about what is intellectual property rights, creativity and also aboutknowledge economy. Let us discuss about how does an intellectual property rights relateswith creativity and knowledge economy.How intellectual property rights relate creativity?One purpose of the intellectual property rights system is to provide incentives to creators toproduce new inventions and creations.
Intellectual property rights provide people to benefit from their innovations and creativework, and to prevent others from copying or unfairly gaining from the inventor’s creativityand investment.According to these rights, society provides an incentive for people and organizations toinvest time, resources and original thinking to develop innovative products and technologiesand expand knowledge and culture. This encourages the production of a wide range ofquality goods and services, and helps maintaining competition.Any innovation which involves design of products requires large investments in terms oftime and resources. Therefore, these innovations are more likely to take place in largebusiness house or in academic institutions due to the ease of availability of resources insuch places.Innovation is based on making the user experience better or more pleasurable. Theseinnovations may be to enhance the appeal of the product or service according to emotional,cultural or social sensibilities or convenience of use. There are many examples ofinnovations in India which have catered to Indian market conditions and sensibilities. Belowis a list of some successful innovation strategies in India in recent times.In the 1980’s, CavinKare revolutionized the sale of shampoo by launching 8 mlSachets of shampoo. While conventionally economy packs were larger packages ofthe same product, CavinKare launched single use packages of these products. Bydoing this they targeted the customer who does not have enough disposable income toSpend on large packs of shampoo. This customer would earlier have opted for othercheaper substitutes, but with the sachet option would become a customer.Another similar innovation is pre-paid mobile services. While mobile telephone wasbecoming more and more affordable, the post-paid services involved monthly feeapart from usage charges. The innovation of pre-paid services involved a smallupfront amount as connection charges and then the user had the freedom to pay forthe usage as and when it occurs and also had the flexibility to decide how much they
would pay. Thus brought in a large number of mobile users who operate on limited budgetsand thus earlier could not afford the monthly usage charges.This example explains the role of IPR in creativity.Now a day, many film makers are taking inspiration from various novels and makingmovies by changing in their own form without concern of the author of those novels. Asthe novel is the intellectual property of its author, no one is permitted to make changes init and using in it any form without the knowledge of its author because all copyrightsbelongs to the author. The movie “3 IDIOTS” is the best example.How intellectual property rights relate knowledge economy?IPR can play an important role in the knowledge economy, as they can encouragetechnology trade, and related patterns of specialization and increasing returns in technologydevelopment at the industry level, leading to greater diffusion of technology, and reducingthe transaction costs in technology trading. While innovation may occur without IPprotection, its pace and depth may be adversely affected without such protection.Continuously evolving technologies bring about the ease of sharing information, developingnew protocols and procedures and finding equivalence bringing about the need forprotection of knowledge. IPR registration offer protection that is essential in the globalmarket for knowledge and innovation where ability to create and sustain global networks isa key driver in successful organisations.One of the best examples we can take from PHILIPS:Now a days, due to competition in the markets for a product, even the manufacturers aredoing outsource of raw materials in low wage countries and even they are opening the firmin that particular countries in order reduce the cost of product in the market. Thus themanufacturing process has changed from production based to knowledge based.
The importance of IP and its protection is amplified using a case study on the Philipsexperience. Before 1985, Philips business model was based on investments on R&D, theresultant R&D outputs were converted to products that were manufactured, marketed andsold resulting in return on investments.Globalisation changes in the last 20 years both in marketing and manufacturing such asmore companies, more competition, lower margins, shorter product life cycles, increasedprice erosion, cost of R&D increasing made the return on R&D investments more difficult forPhilips. This is the best example for knowledge economy.Philips is doing business for more than 100 years and has patents for medical X-raytube(1918), neon tube(1922), audio cassettes(1963), VCR (1971), Audio CD (1983), GSMspeech (de-) coder (1985), DVD (1996), CD-R, CD-RW (1997), Blue-ray disc (2002). By the year1993, Philips had 877 patents; it has increased to 3144 in the year 2002.Philips’s current IPR portfolio boasts of about 95,000 patents based on 19,000 inventions withapproximately 3000 new filings per year. Philips also owns more than 2,000 domain names inaddition to the 22,000 trademarks and 6000 designs. Philips’s successful transition from themanufacturing era to the knowledge based era was a result of its recognition of importance ofIP and its protection.How intellectual property rights works in fashions industry?In fashion industry, the purpose of producers is not to improve but to create. They introducecreativity and are specifically based on creative heritage always moving and adapting itselfto demand. But their creations remain unique and, as non-cumulative knowledge, escapefrom the incremental character of technical progress. Thus creative products have a strongcultural and economic value and raise the problem of the value management throughintellectual property rights (IPR).
Here we are considering French fashion industry. It is an interesting industry because itsproduction is strictly linked to creativity and heritage as the main inputs. So, themanagement of IPR is, there, a key point. Moreover the fashion industry is now movingfrom an Old model, the Haute Couture system based on Maisons owned by the greatcreators (Chanel, Dior, Balenciaga, etc.) to a new system, with industrial, financial andcreative groups as LVMH (B. Arnault) and PPR (F.Pinault). A new model of managementthrough IPR is there emerging.Conclusion:IPR protects the creativity and knowledge economy of the products for its designer/developer. Also helps to provide incentives to designer/developer for further research anddevelopment in same area or other.