Meaning of both the termsIPR (Intellectual Property Rights)
IPR consists of Patents, designs, copyrights,trade secrets and geographical indicationswhich provide the foundation for building andextending markets for new technologies
What comes under IPR Patent : is a monopoly right to the exclusive use of invention, granted to inventor or his assignee. This right is granted only for a limited period i.e. called the term of patent. Trademarks : is a visual symbol in the form of word, device, character attached to the goods for indicating their trade origin. Geographical indications: Qualities & characteristics of certain goods attributable to some geographical locations and reputable to as producer of certain items come under GI. (Oranges & Tea)
Legislations on IPR in INDIA The Patents Act, 1970 (2005) The Designs Act, 2000 The Trade Marks Act, 1999 The Geographical Indications of Goods Act, 1999 The Copyright Act, 1957 (2000)
Economic Development Economic development is the increase in the standard of living in a nations population with sustained growth from a simple, low-income economy to a modern, high-income economy.
IPR could well increase economic growth and fosterbeneficial technical change, thereby improvingdevelopment prospects, if they are structured in amanner that promotes effective and dynamiccompetition .
How IPR helps in EconomicDevelopment Intellectual property rights could play a significant role in encouraging innovation, product development, and technical change to help in development of the economy through low-cost imitation of foreign products and technologies. However, inadequate IPR could stifle technical change even at low levels of economic development because much invention and product innovation are aimed at local markets and could benefit from domestic protection of patents, utility models, and trade secrets.
Example Japanese patent system (JPS) affected postwar Japanese technical progress, as measured by increases in total factor productivity (TFP). The JPS in place over the estimation period 1960-1993 evidently was designed to encourage incremental and adaptive innovation and diffusion of technical knowledge into the economy. That is they created new technology (in the form of IPR) that helped the Japanese economy to cover the post war losses.
Scenario for Poor Nations Recent studies suggest that innovation throughproduct development and entry of new firms ismotivated in part by trademark protection, even inpoor nations that helps their economy to grow. Aspoor nations does not have the required resourcesand infrastructure to support and do innovationswhich are treated as IPR.
It is widely recognized by economists that imports of goods andservices could transfer and diffuse technology. Imports ofcapital goods and technical inputs could directly reduceproduction costs and raise productivity for the developedcountries by outsourcing the required services from low incomecountries. this benefit would depend on the technologicalcontent of imports, suggesting that close trade linkages withinnovative developed economies could engender considerableproductivity gains through trade flows.
There are two types of countries: a developed, innovating" North” and a developing, imitating“South”, then the impact of stronger IPR protection benefitsthe innovating North, but its impact in the South whereinnovation is limited or non-existent is ambiguous, dependingon the channels through which technology is transferred.Research indicates that stronger IPR protection is only foundto benefit the South when R&D is highly productive, thusresulting in significant cost reductions, and when the Southcomprises a large share of the overall market of the product.
Ways through which IPR helps inEconomic DevelopmentTrade channel When technology is transferred through trade, then successful southern imitation results in shifting the competitive advantage for the production of imitated products from the North to the South.
Foreign direct investment channel When foreign direct investment (FDI) is considered as a source of technology transfer, northern innovators may shift production to the South, reducing competition for resources in the North .Licensing channel If technology is transferred through licensing, stronger IPR protection in the South results in greater innovation in the North, and increased licensing to the South. Licensing has the advantage to northern firms of higher profits due to lower production costs in the South, but involves other costs in terms of contract negotiations, transferring the necessary technology and in the rents that the innovator must give to the licensee to discourage imitation.
ConclusionStrong IPR protection will hinder rather than facilitatetechnology transfer and indigenous learning activities in theearly stages of industrialization, when learning takes placethrough reverse engineering and duplicative imitation ofmature foreign products. It is only after countries haveaccumulated sufficient indigenous capabilities and anextensive science and technology infrastructure capable ofundertaking creative imitation that IPR protection becomes animportant element in technology transfer and industrialactivities. Similarly, the development experience of Indiaindicates the importance of weak IPR protection in building uplocal capabilities, even when countries are at very low levelsof development.