TIM Lecture 6

Question 1

Why we care about Intellectual Property Rights (IPRs)

Answer 1

– IPRs can increase incentives to innovate

– IPRs can help to appropriate profits from innovation

– The IPRs of others (competitors, suppliers, customers, …) can make
a firm’s life and innovative activity difficult

– The IPRs of others contains valuable information

Question 2

Most important formal protection mechanisms

Answer 2

– Patents (for new, inventive, and industrially applicable inventions, usually 20 years lifetime)
– Registered designs (“Geschmacksmuster”, only applied to products, just 5 years protection, difficult to enforce)
– Registered trademarks (Relate to brand, reputation, not individual advances)
– Copyright
(Automatic, lasts for 70-years after author’s death, mainly for artistic works, but also software)

Question 3

Patents

Answer 3

– A patent is a right of ownership over an invention, granted to an
inventor by a government for a specified period of time. A patent
allows the patent owner, or patentee, to prevent others from making,
using or selling the invention.

– The owner may sell or license a patent

– Patents are territorial rights; so a German patent relates only to Germany.

– Patents have limited lifetime.

– Patents cover inventions of products or processes that possess or contain new functional or technical aspects (i.e., the functional aspects of tangible technologies: how things work, what they do,
how they do it, what they are made of)

Question 4

What is patentable?

Answer 4

The invention must:
– be new
– contain inventive step
– Be capable of industrial application

Question 5

What can not be patented?

Answer 5

– A ‘scientific’ discovery – without an industrial application
– A scientific method or mathematical method
– An aesthetic creation (e.g., literature, art, music, etc.)
– A device contrary to the accepted physical laws
(e.g., a perpetual motion machines, or a time machine)

Question 6

Benefits of patenting

Answer 6

 Profits from 
     – use in own production
         without risk that a
         competitor receives the
         patent
      – Licensing against cash
      – Licensing in exchange for
          other patents (cross-
          licensing)
 Creates costs for rivals (for 
invent-around) and potentially 
entry barriers
 Image, signaling (esp. for 
young firms seeking venture 
capital)

Question 7

Registered Designs

Answer 7

“is the two-dimensional or three-dimensional appearance of the whole or a part of a product. The design of a flat surface - for example, a textile or wallpaper - or the appearance of a three
dimensional object is protected
by a registered design.” (German Patent office)
Registered Design are only available for product innovations (not process).

To qualify a design must:

• be new
• AND have individual character

Question 8

Trademarks

Answer 8

A trade mark is any sign which can distinguish the goods and
services of one trader from those of another. A sign includes, for example, words, logos, pictures, or a combination of these

Question 9

Copyright

Answer 9

An unregistered right, arises automatically (!)
– May be indicated by © – but even that is not necessary
– For this reason, good basis for licensing of open source software

• Like other forms of IP protection, copyright is self-policed
• Infringements, other than exact copies, are difficult to prove
• Public attitude makes widespread enforcement difficult

So what is copyright?
– Is a right against copying – protects expression of ideas, not the idea
• Opposite to, e.g. a patent, one can rewrite and avoid copyright

– Copyrights are “free”, & long lasting