The Important Role Of Intellectual Property : Global Trade And Competition Aspect

The global economy has become interconnected and with this there has been an emergence to Intellectual Property as an important factor shaping the dynamics of the international trade along with the competitive edge the market provides for. It is of prime importance for the nation and the businesses for economic supremacy the protection, management and the strategic utilisation of the Intellectual Property. There needs to be balance provision between the protection of the creator’s rights along with fostering the global development.

The Background of Intellectual Property in Global Trade

Intellectual property refers to creations of the mind, such as inventions, literary and artistic works, designs, symbols, names, and images used in commerce. Intellectual Property are the intangible assets which have gained access recognition adding the value in the knowledge-based economy of the 21^st century.

Some of the major forms of Intellectual Property are patents, copyrights, trademarks, and trade secrets.

The integration of Intellectual Property into global trade frameworks began in earnest with the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) in 1995, administered by the World Trade Organization (WTO).

TRIPS agreement set minimum standards for protection of the Intellectual Property Rights of the creators and enforcement among WTO member countries, marking a significant revolution for recognising the prime role of Intellectual Property in the trade and commerce internationally.

Economic Growth and Innovation

The base arguments for the robust protection to be provided to the Intellectual Property in global trade and commerce is the role of IP in stimulating the innovations. By granting inventors and creators exclusive rights to their work for a limited period, IP systems incentivize research and development (R&D) investments. The protection provided duly to the innovators will allow such innovators to recoup their innovation costs utilised and eventually will earn profit from their own creations which would further encourage and motivate the innovations.

Forwarding with an example, the pharmaceutical industry does rely heavily on the protection of the patent in order to justify the invest in the new upcoming treatments and cures would be significantly diminished potentially resulting into the medical advancements that would benefit the health of all across the world.

Adding to it, the more the strong Intellectual Property regimes can attract Foreign Direct Investments (FDI) for the protection of the innovations and for the technology transfer. Countries having reliable Intellectual Property protection are more likely to see establishments with multinational corporations providing for research facilities or for manufacturing plants, providing the required knowledge, skills and the economic opportunities.

The Competitive Advantage

Intellectual Property has become a provider for competitive edge giving competitive advantage in the global marketplace. Multi-national companies leverage their own Intellectual Property portfolios in order to secure a market share in the competitive market, entering new markets and earning a competitive edge on their competitors.

Taking an example of patents, patents can provide a temporary monopoly to the inventors on their invention of new technologies, allowing the firms with such patent right to establish their respective firms as market leaders in global market.

When it comes to trademarks and brands, it has an important place in the global competition between the companies as it helps building a strong consumer trust and earn their loyalty across the diverse markets present. The various brands present in the global market such as Apple, Google or for instance Coca-Cola demonstrating how an IP in the form of trademarks can become one of the most valuable assets of the established company.

Coca-Cola possessing a formula as trade secrets or a Google’s search algorithm, representing another form of Intellectual Property that the companies fiercely protect in order to maintain their competitive edge in the global market on their competitors present.

The Intellectual Property Rights provide the ability to keep certain information of the companies and their products as confidential providing a crucial advantage as a significant first-mover advantage.

Challenges and Controversies

Although IP protection is generally seen as a beneficial for the innovation and trade but this benefit is absent without the controversies and challenges the IP provides. The most prevailing issue in hand is the striking balance making between the protection of the IP right and at the same time ensuring access to the essential goods and technologies innovated (especially in developing countries).

The challenges and controversies are seen to be most arising in the pharmaceutical sector. Although patent protection benefits and incentivises the development of new drugs, it sometimes does lead to rising the prices that make life-saving medications inaccessible to the poorer nations. The crisis of HIV/AIDS in Africa which brought the issue in light, lead to heating debates about the Intellectual Property Rights versus the needs for the public health.

The varying levels of IP protection and its enforcement across different countries is another prevailing challenge. Although international agreements like TRIPS have established the minimum standards still the significant disparities remain to exist. Some of the developing countries argue that the strict IP regimes primarily benefit advanced economies which can hinder their own development and access to the technology.

Nowadays there is challenge of counterfeiting and piracy. This just not only affects the bottom line of legitimate businesses but can also pose a safety risks to the consumers and fund certain criminal enterprises.

The Digital Age of IP

This new emergence force of digital revolution has given a new dimension to the role of IP in the global trade and competition. The ease which digital world provides of copying and distributing the digital content has given rise to challenge posing threat to traditional copyright models leading to new approaches like Creative Commons licenses and the prevailing debates about the fair use in the digital world.

As seen the rise of data used by every individual as a valuable asset in the digital economy has brought the new IP considerations. While data itself is generally not protected by IP laws, the methods of collecting, organizing, and analysing data can be. Companies are increasingly seeking ways to protect their data assets and the insights derived from them providing a source for competitive edge.

The Future of IP

Following can be considered as upcoming trend for guiding the IP in global market and competition:

1. IP involvement in trade agreements: Future trade deals are likely to include more comprehensive IP provisions, reflecting its growing importance in international commerce.
2. Evolving IP models: New approaches to IP protection and management may emerge, particularly in response to technological changes and the needs of developing economies.
3. Focussing on greater enforcement of IP: As IP becomes increasingly valuable, we can expect more resources to be devoted to combating infringement and ensuring effective enforcement across borders.
4. Integration of IP and competition law: The intersection of IP rights and competition law is likely to receive more attention, as policymakers seek to balance innovation incentives with market competition.
5. Adaptation to emerging technologies: IP systems will need to evolve to address the challenges posed by AI, biotechnology, and other cutting-edge fields.

Conclusion

IP has become an integral part of the global trade market and competition. The role of IP in driving the innovation, shaping competitive advantage and influencing the economic development is undeniable. Although the global IP system along with the advantages also faces significant challenges, from balancing the interests of developed nations and developing nations to rapid technological change adaptation.

As we endure this dynamic market, finding the right balance between the protection of IP rights along with fostering of global innovation and access will become of prime importance. And this would require ongoing dialogue, cooperation and flexibility from all the stakeholders (government, international organisations, businesses and innovators).

The shaping of global trade and competition will entirely depend on how we manage and leverage the intellectual property. By addressing the need to look upon the challenges prevailing and embracing the opportunities presented by IP, we can work towards a more innovative, equitable and prosperous global economy.

Author: Sanjana Thasal, in case of any queries please contact/write back to us via email to [email protected] or at IIPRD.