Part B: The Role of Intellectual Property Rights in the Innovation


In the twenty first century, the functionality and operations of the various industries around the world are changing rapidly. This process of change began right in the mid twentieth century when the industries began to evolve mainly on the innovation and design processes. With the advent of computers, new ways of information flow began to be adopted. Computers and information technology helped rapid advancement in different fields. Increasing scope of making better designs, adopting newer business methods and invention of modern technologies increased the bulk of intellectual properties immensely. Threat of piracy, plagiarism and theft of intellectual material in different forms also increased. Therefore, the international community is trying to find out and synchronise effective ways of protecting intellectual property rights worldwide. Since 1995, the World Trade Organisation (WTO) has obtained jurisdiction over intellectual property rights on a global scale (Matthews, 2002). This has expanded the role of intellectual property rights in the innovation and design processes manifold. These rights are supposed to facilitate the protection of intellectual material like blueprints, films, designs and processes involving business, technology, literature, science, etc. In the twenty first century, the realm of intellectual property rights emerges as a relatively new and rapidly developing area of practice (Heath & Sanders, 2009). The global framework of intellectual property rights is quite controversial although, it is still immensely helpful in deciding the course of innovation and design processes. Intellectual property rights mechanisms are being rapidly deployed and consistently monitored to ensure the integrity and security of the intellectual properties.

Literature Review

Role of intellectual property rights is multifaceted. Modern industries cannot exist without continuous innovation and development of various design processes. Provisions of intellectual property rights framework are intended to provide an international platform for the management and regulation of the intellectual properties. Such framework would promote free and fair competition and protection of the emerging technologies, methods, processes and designs internationally.

Mainstream thinking and analytical frameworks dominate the course of the theoretical literature on intellectual property rights. The various fields that are being dealt with are law, economics, management, politics and regulation theories (Andersen, 2006). Intellectual property rights are becoming crucial in regulating the managerial and technical processes involving modern design and innovation. For example, intellectual property rights mechanisms have affected biodiversity as far as the issues of seeds and plant varieties are concerned (Middletton, 1999). Framework for intellectual property rights cover the innovation and designs entailed in agriculture and biotechnology. Thus, it decides the course of agricultural industries as well (Erisch & Meredia, 2004). Another example is the pharmaceutical industries, where the intellectual property rights are guiding the ways and methods of manufacture, design and distribution of several pharmaceutical products in Europe, USA, India and China (Pugatch, 2004).

Thus, mechanisms of international intellectual property rights are playing a crucial role in the management and dispute resolution regarding the various research, design and development processes worldwide.

However, the evolution of the intellectual property rights has taken place in different countries as per the country specific needs. The governments and the people were concerned about the protection of their intellectual properties like innovative products and designs. Patent, copyrights and trademarks were the various systems designed to protect the intellectual property rights until the first half of twentieth century. Although there was almost no unified mechanism available internationally in those days, individual countries took initiatives to protect the intellectual properties like literary works, artworks, designs, technologies, methods, etc. But this is never achieved solely by physical assets. Intellectual property rights mechanism could develop on the accumulation of technological capabilities and the development of the necessary institutional infrastructure (Odagini et al, 2010). Traditionally, intellectual property rights have been matters of national concern. Individual nation states have developed intellectual property rights regimes reflecting their national needs and priorities (Ilias & Fergussen, 2008). Finally, in 1995, the enforcement of Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs agreement) could be achieved through the WTO (Matthews, 2002).

Before the beginning of a unified global process of intellectual property rights protection through the WTO, these rights existed in various forms. Patents, copyrights and trademarks ensured protection of the intellectual properties. But with the lapse of time, the need to unify the intellectual property rights mechanisms all over the world was strongly felt. Otherwise, different countries would use largely different parameters and definitions to decide the nature and enforcement of these rights. The present intellectual property rights mechanism, which is still in a process of evolution, thus serves several purposes for the protection and integrity of the modern innovation and design processes.

Finally, this realm of practice becomes a way of law enforcement in the industries. The aim is to provide ample protection to the different human endeavours in the different fields against piracy, theft, plagiarism, manipulation, etc. (Vaver, 2006)

Analysis of the Role of Intellectual Property Rights

It has been mentioned earlier that the evolution of intellectual property rights was different in different countries. In absence of a unified and well defined intellectual property rights mechanism, it would be difficult to avoid corporate warfare and adoption of unfair means in business rivalry. Prevention of bitter corporate struggle has been a key issue as far as the role of intellectual property rights. Besides promoting fair competition, these rights would be pivotal to solve conflicts of patents between countries and corporations. These rights also play a key role in preventing imitation, plagiarism, piracy, etc.

1. Intellectual property rights and competitive advantage: Business firms try to protect their business secrets to the best. Preserving business secrets is a key issue in corporate rivalry. Protection of the intellectual properties would provide a roadmap to the companies to sustain their respective and unique business innovation and design processes. In the presence of a global regulation, the multinational companies and similar other parties would be helped to preserve their business secrets and protect their achievements in the innovation and design processes. If theft of technological know how is prevented, the urge to find out alternative and newer technologies would be developed.

Intellectual property rights are particularly important in the context of software, computer chips, optoelectronics and biotechnology. Patents, copyrights and trade secrets have been instrumental to obtain competitive advantage through out the industrial history and this is supported by the economic theory as well (Wallerstein et al, 1993). Business method patents also provide an important way to obtain competitive advantage (Vaver, 2006). The role of inter-firm rivalry in fostering innovation and technological diffusion is rather decisive. Intellectual property rights furnish a framework to exploit such rivalry and achieve a fair competitive advantage. Thus, the economics of intellectual property decides the dynamics of competition interface (Anderson & Gallini, 1998).

2. Cost involved in the intellectual property rights mechanism: Although intellectual property rights have been recognised in natural law, historically, governments have granted such rights to achieve a variety of policy goals. Thus, the cost of intellectual property rights enforcement has involved a wide variety of economic parameters in both the government and private sectors (National Technical Information Service, 1986).

The value of intellectual property rights is directly related to the cost of intellectual property litigation. Infringers recognise that the enforcement of intellectual property rights carries a cost to the owner of the rights (Ross, 2000). Hence the cost of the intellectual property depends on the market value and the potential benefits of the innovation. Also, the firms may have to bear the additional costs of obtaining intellectual property rights consultation and allied legal assistance. Determination of the issue of cost is to be done on global parameters as well. Steps like unifying the international law of business method and software patents thus become important in deciding the cost of protecting the intellectual property rights (Bird & Jain, 2008).

3. Risk involved in intellectual property rights mechanism: Conservation of intellectual property rights may lead to monopoly. The technologically advanced countries have developed a huge pool of technical know how. Protection of intellectual property rights may lead to complete monopoly of these countries over the modern technologies. Unavailability of modern and emerging techniques may lead to developmental imbalance. Firms with inadequate resources to take advantage from technology transfers would face serious setback in business. Huge sums of money would be paid as royalties to the parties those have obtained the patents of futuristic innovations and designs.

Moreover, vulnerability of middle developed countries to changes in foreign direct investment arising from intellectual property appropriation may lead to serious concerns (Bird & Jain, 2008). Too much protection of intellectual property rights may create hindrance in the development of ample amount of available knowledge in the future (Pugatch, 2004). The risk of monopoly over innovation and design processes by rich countries and powerful corporations pose a threat to humanity as a whole.

4. Benefits and limitations: A pure economic approach does not provide a sufficient and satisfactory explanation for the creation of intellectual property rights. For example, economists cannot conclude whether patents confer a net benefit or entail a net loss to society. This controversy is a major limitation of intellectual property rights (Pugatch, 2004). In such circumstances, it appears as if the system is repressing widespread and free utilisation of available knowledge.

However, intellectual property rights help the companies and other entities to protect their respective brands, marks, copyrights, patents, designs, and related rights all over the world. Synchronisation of the various parameters in regards of these rights at the international level helps the different organisations to maintain their uniqueness, protect their respective achievements and prevent the crimes like piracy (Shippey, 2002). So, there are both benefits and limitations with regards to the intellectual property rights system.

5. Comparison with alternative methods: Worldwide intellectual property rights protection took a concrete form only in the 1990s. Much before, there have been other methods to provide similar protections. For example, the method of copyrights evolved through the five hundred years old history of printing technology (Steinberg & Trevitt, 1996). Patents, copyrights and trademarks were the first intellectual property rights to be recognised in law. These rights thus have a longer tradition (Shippey, 2002). If the modern mechanism of the intellectual property rights is compared to the pre-existing system of patents, copyrights, trademarks, etc., then it can be said that that the modern mechanism provides more legal, technical and international level synchronisation. The pre-existing framework of rights was decentralised, complicated and varying from country to country. However, the modern uniform intellectual property system makes sense for the world because it aims at providing a uniform code of legal conduct (Bird & Jain, 2008). The framework is less costly and complicated since it brings varieties of intellectual property under one system. Unification of the various aspects of intellectual property protection is a major benefit of the present system as compared to the pre-existing ones.


It is an important issue that how can theft of intellectual property be protected. A decentralised, variable system is not suggestible in this context. Rather, the developments of the 1990s have provided a strong legal framework. Consequently the role of intellectual property rights in the innovation and design processes have become coherent and cannot be ignored. International management and regulation of these rights play a crucial role in settling international disputes regarding intellectual property. Since the modern industrial sphere largely depends on the innovation and design processes, intellectual property rights protection can decide the very course of the modern industrial development. Particularly in the fields of programming, engineering, electronic media, business and industrial management, etc. intellectual property rights mechanism provides reliable ways to ensure integrity of technical information about various innovations and achievements. In this way, monetary loss due to the crimes like piracy can be prevented. Also, enforcement of these rights would further develop an urge to research and innovate among the powerful corporations and government organisations. Thus, the innovation and design process would be sophisticated and a competitive market would ensure more technical, managerial and other intellectual discoveries. The role of intellectual property rights thus appears to be rather beneficial to the sphere of human endeavour.