Social Issues Of Intellectual Property Rights
The basic justification for Intellectual Property Rights is that they give people an incentive to produce socially desirable new innovations. The object to be protected is the expression of ideas, not the ideas themselves. The innovative knowledge or design also called non-rival products, Intellectual Property Rights ensure creators could appropriate returns from their innovation. Though it may seem like an abstract concept to some, Intellectual Property plays an essential role in our society, for example, driving innovation, protecting consumers, and supporting everything from music, cinema, and sports to health, tech, trade, and more.
Intellectual Property is critical to public safety and consumer confidence. Strong IP protections and enforcement are important to preventing dangerous products — such as counterfeit medicines or toys — from getting into consumers’ hands. Trademarks give customers confidence that they are buying genuine, high-quality products from brands they trust. Along with the intellectual property rights, there is also the recognition of brand independence by people and society. Because the brand belongs to a part of the intellectual property rights, people believe that the brand with its products, the more famous the brand, the more profit the company can get from the brand. On the contrary, if the brand’s reputation is disreputable, then the brand and the company will be resisted.
However, they introduce inefficiencies during the existence of rights because intellectual property makes non-competitive rights exclusive, which could also cause problems such as malicious registration, industry monopoly, and piracy, etc. Indeed, the action of people values and protect intellectual property gives the creator a monopoly right over which commodity prices are higher than their production marginal cost.
1Malicious Registration
According to BBC news released in 2012, Shenzhen Proview Technology filed a trademark infringement case against Apple in a Shenzhen court. Shenzhen is located in Guangdong Province in southeastern China, and the case ended up in provincial court. Proview Technology (Shenzhen) claims it has rights to the iPad name in the Chinese market since they registered in 2000. Apple had insisted that they set up the IP Application Development Company to acquire the global rights to the iPad name in 2009. The judgment was held that Shenzhen Proview is the rightful owner of the iPad trademark, though the courts rejected the move that Proview filed a ban on the sales of the product in Shanghai. Apple agreed to pay $60 million into a court-approved bank account for the legal rights to use the iPad trademark in China. Some critics accused Proview of trying to take advantage of the success of Apple, Proview claimed that Apple founded a special company in Roydon in Essex County to get the iPad name in the US.
While everyone is trying to benefit from his or her own designs and products, some companies and individuals are using intellectual property to get legitimate, unethical benefits from other large companies, this social phenomenon is one of the results of intellectual property protection, which is also called a business stealing effect. McGahan and Silverman (2006) compared ‘market stealing’ and ‘spillover’, where competitors' patents put them in a good position to harm focus companies, and ‘spillover effects’ where competitors’ breakthroughs trigger greater technological opportunities and provide information that focuses companies can build on. In other words, neither harm nor benefit is one-way.
Once the trademark has been registries, the owner has full control of the domain and can use it or sell it to a third party. Trademarks are valuable business property, and it protects a brand in relation to specific goods or services. For small company and individual creators, if their idea was stolen and registered maliciously, they can only stop the in developing project because of ‘intellectual property protection’. As the world's leading IT technology company, Apple must protect its intellectual property by paying a large amount of money to acquire the trademark, also to achieve higher market share. With the development of IT industry, every brand now has it official website and email support. IT combine with Intellectual Property protection, malicious domain registrations fraud are a step up in that introduces to us a new, more disturbing, and even criminal element into the entire marketplace.
The first ‘phishing’ and ‘spoofing’ appear in a 2005 case, CareerBuilder prosecuted Stephen Baker for ‘disputed domain name is being used as part of a phishing attack’, in simple words, this man created a similar domain website to the real company, and used it to get access to customer’s info such as password, credit card, and social security numbers. As more victims visit the site in the short term, the number of requests for malicious domain names that have recently registered and participated in scams will suddenly increase. Respondents are not just looking for visitors and customers, they are targeting brands for victims. They gain profit from others trademarks, patents, copyrights and registered designs. Furthermore, people overconfidence in Intellectual Property protection is also reflected in the difficulties of distinguish fake official websites and fake E-mail addresses, their trust in the brand led them to fill in their private information to those websites.
Possible Solutions
Malicious registration can be seen as an outrageous behavior further than abusive behavior, and it is reserved for more since we could never stop protecting our Intellectual Property. This kind of social behavior threatens not only the trademark owner but also consumers. In this essay, we believe that this is an increasingly common type of misconduct which including those who have no recourse against cybersquatting, and the cost is only minor penalties. The feasible way to reduce malicious registration is to use their legal rights to protect their trademark, meanwhile, it is the trademark owners’ responsibility to not only protect the integrity of trademarks but also protect visitors to fake websites by shutting down contagious domain names. Overall, Intellectual Property protection makes people realize what kind of society they want to live, they prefer to admit that IP has value in every aspect, they tend to protect what they have created to the society.
Industry monopoly
The definition of "monopoly" is a market structure characterized by a single seller that sells a unique product on the market. In the monopoly market, the seller is not competing because he is the only seller and there is no proximity. He has the right to price the goods and rejects other infringement products sales on the market.
Apple has achieved an industrial monopoly by buying global iPad trademarks and patents, there is no denying that Apple has a monopoly on the pricing of its products, and it's hard to argue that it's a bargain. Shavell and Van Ypersele (2001) pointed out that monopolists restrict output to boost the price because the loose of consumers, therefore, monopoly sales have been lost. In another case posted by The New York Times, Microsoft is illegally using its monopoly on Windows, allowing most consumers to use their browser, which is about to connect the machines to the Internet, not Netscape. Microsoft decided to integrate its browser and Windows and prohibit manufacturer instead of anyone else in the browser, the aim is not to let the consumer benefit, but to make Windows away from competitive challenges. Microsoft's strategy makes Windows overpriced and suppresses operating system innovation. Nordhaus (1969) analyzed the balance between encouraging innovation to benefit society and tolerating the consequences of temporary monopolies. Due to a temporary monopoly profits is lower than the overall interests of the society, another negative
impact is emerging closely related to people's healthy life. In the medical industry, some part of medicines are overpriced and monopolized. One of the famous Oscar-winning movie, Dallas Buyers Club, it is happening around us in every country, every minute. Mr. Lu, a cancer patient who is suffered from Chronic Myeloid Leukemia (CML). The patient couldn't afford exorbitant licensed drug produced by Swiss pharmaceutical giant Novartis, so he went to other country India to smuggle a cheaper, yet more effective drug called Veenat, and sold it to other CML cancer sufferer. Although Veenat is almost equivalent to Glivec in terms of dosage, strength and quality, Lu was charged with promoting counterfeit drugs in 2014.
The industrial monopoly created by Intellectual Property has inhibited the development of other similar products. The solution that can be found is to provide justice through a lawsuit to against suppressing innovation in other industries, however, in medical industry people cannot afford the exorbitantly-priced drug, or even get treated. In this research, the Intellectual Property protection failed to reach the goal of a completely positive effect on the society and people’s life. The Intellectual monopoly have become profitable systems to the company, Michele & David (2008) shows that without a knowledge monopoly, creativity and competition can flourish.
Possible Solutions
Michele & David (2008) assert that Intellectual Property laws need to strike a balance between the freedom to use existing ideas and the motivation to create them. The use of the patent and copyright systems could be seen as a means of suppressing competition, in effect, the monopoly over useful inventions creates intellectual inefficiency because it also blocks the development of other potentially useful inventions. The double-edged sword created by copyrights and patent, with the greater reward for innovators and creators, at the same time, the cost of creation and innovation become higher. In spite of this, Michele & David (2008) find it to be an unnecessary negative because the cost cannot outweigh the entire social benefit.
Piracy
The definition of piracy is distribution, theft, duplication, reproduction, performance, storage, sale or other use of intellectual property protected by copyright law without authorized. This is a form of copyright infringement.
Recent years, there has been considerable debate over the role of copyright protection to the society. In IT industry, software and game piracy is a global issue. In the process of software development requires a large financial investment, the company or project groups rely on profits to continue enhancing and building and fixing software. Illegal activities such as illegally copied, downloaded and/or installed, a pirate commits an act of theft. An entity engaged in piracy or piracy is called a pirate. Those activities are included in pirates engage: illegally using, distributing or copying software to upload or download online music to establish an online business based on theft to encourage others to illegally make counterfeit CDS, sell them in retail stores, flea markets, exchange meetings or street corners.
In 2014 summer, a movie with Sylvester Stallone was stolen and leaked to pirates 3 weeks before its release, roughly 70 million views on the internet and lost about $100 million dollars due to piracy. The part of the problems is that many consumers of illegal content have not realized the potential negative consequences for the industry. In fact, losses like piracy would slowly be passed on to other stuff, for example, directors, actors, IT project leaders, programmers, and any employees involved in these projects, they missed out on royalties that could have been earned from legal consumption. It also hurts the pensions, benefits and benefits of hundreds of behind workers. Piracy generates are particularly problematic for new and independent creators, designers, programmers and small films.
Copyright has significant private value, as is clear from various legal cases of copyright and industry complaints about an increasing number of "pirated" complaints. Based on Piracy Report 2006, the International Federation of the Phonographic Industry estimates that unauthorized CD sales around 14% of entire worldwide sales. Nevertheless, it may not represent legal sales lost, while Oberholzer and Strumpf (2014) described that illegal downloads of music has ‘no effect’ impacts on its sales, Blackburn (2004) claimed the ‘substantial effect’ to legal sales. A positive case about piracy is that the Nintendo Company against pirated game download website’s operator for damages, another defendant Mathias provides old Nintendo NES games via virtual console service. Nintendo claims the lawsuit can reach $150, 000 for each pirated game, and up to $2 million for the infringement of each Nintendo trademark used in the websites' advertising.
Possible Solutions
Innovation provides a competitive environment with high profits and low investment, and high competition reduces technological changes in industry innovation, this kind of U shape was found in Scherer’s research (1992).
This kind of social phenomenon is inconceivable, but not to deny that the economic damage of not protecting intellectual property is enormous. The most possible solution is to improve relevant laws and solve the problem of piracy through legal ways, although the existence of the Internet makes it difficult to achieve the anti-piracy actions, especially in multinational cases. Because of the differences between local law and the law of the company's country, and the trial time of the case is unpredictable, the path to protecting intellectual property is not as easy as we though. A more detailed outcome plan will be discussed and analyzed in the following legal issues.
