Intellectual Property

 

What is intellectual property?

Intellectual property is unique, as it is the fruit of personal creation and inventiveness. It might be a poem that you write, the name your hairdresser thinks up to sell his or her services, or a mother’s invention for a non-spill cup for babies. In the future, intellectual property creators aim to deliver more abundant food resources, clean energy and cures for illnesses from cancer to the common cold. In virtually every instance, intellectual property stimulates progress, transforming society and adding value to our lives.

Why does intellectual property need protection?

Society provides legal rights over intellectual property to encourage the production of inventions and creative works that benefit society and to help innovators and creators make a living from their work. These rights, which can belong to individuals or organizations, are recognized by governments and courts. The system is designed to benefit society as a whole, in both developed and developing countries, striking a delicate balance to ensure that the needs of both the creator and the user are satisfied. This balance is maintained through checks within the intellectual property system itself and in the larger regulatory framework, to ensure that the system is sustainable and beneficial to all stakeholders.

How is intellectual property protected?

Different types of intellectual property – literary and artistic creations, inventions, brand names, and designs, to name a few – are protected in different ways:

•  Creations in the fields of literature and the arts, such as books, paintings, music, films as well as software, are generally protected through copyright or so-called neighboring rights;
• Technological inventions are typically protected by patents;
•  Distinctive features – such as words, symbols, smells, sounds, colors and shapes – that distinguish one product or service from another, can be protected by trademark rights;
•  The specific external appearance given to objects, such as furniture, car body parts, tableware, clothing or jewellery, may enjoy design protection;
•  Geographical indications (e.g. Parma ham) and trade secrets are also considered to be types of intellectual property and most countries provide some form of legal protection for them;
•  Legal protection for safety and efficacy studies data for certain regulated products (e.g. plant science products and pharmaceuticals) is increasingly provided in many parts of the world.

In the future, intellectual property creators aim to deliver more abundant food resources, clean energy and cures for diseases from cancer to the common cold. Intellectual property stimulates progress, transforming society and adding value to our lives.
This wide array of tools can be used by people and businesses at all levels. Almost all businesses in all countries – the vast majority of which are small enterprises – use trademarks for marketing their goods and services. Copyrights are even more easily available. The moment someone writes a text, composes some music or draws an image, he or she will have copyright to the result.
Intellectual property law limits what can be protected and for how long. Intellectual property rights do not protect ideas. They protect only expressions of ideas, in the case of copyrights, and inventions fulfilling certain strict and well-established criteria in the case of patents. These limitations and conditions are built-in mechanisms to balance the rights of intellectual property owners with the interests of society.
Intellectual property rights allow innovators and creators to choose the terms on which they distribute their work. They can choose, for example, to license and sell their works or inventions, to make them available for free, or to allow their use subject to certain conditions.
In the patent area, patented technologies are shared on certain terms as common technical standards to improve the interoperability of different systems, thus simplifying the lives of consumers.
Looking forward, as economies develop, the use and value of intellectual capital will gradually replace the value of raw materials as a percentage of capital input toward economic growth. As such, intellectual property is an increasingly important asset that must be continually nurtured, protected and stimulated to grow.

How do intellectual property rights encourage innovation and creativity?

One purpose of the intellectual property rights system is to provide incentives to innovators to produce new inventions and creations. This in turn provides society with a steady stream of innovations that fuel economic, cultural and social progress, help to alleviate poverty and disease, and enrich our cultural heritage.
Intellectual property rights enable people to benefit from their innovations and creative work, and to prevent others from copying or unfairly gaining from the inventor’s creativity and investment. By according these rights, society provides an incentive for people and organizations to invest time, resources and original thinking to develop innovative products and technologies and expand knowledge and culture. This encourages the production of a wide range of quality goods and services, and helps maintain fair competition.
New creations and inventions benefit everyone
Technologies and creations that have touched and changed millions of lives would probably not exist today without the incentives provided by intellectual property rights. Patent protection has spurred the development of key technologies (e.g. the transistor, telephone communication and electricity), lifesaving drugs (e.g. betablockers for heart disease, the anti-cancer drug taxol), plant science products and other inventions that have helped improve lives in different parts of the world.
Copyright has stimulated the development of vibrant local cultures, and encouraged their dissemination worldwide. Witness, for example, the international popularity of reggae, salsa, and different forms of World Music, whose growth, distribution and commercial success have been encouraged by the
copyright system.
Financing innovation and creation through the market
Innovation and creation have to be financed; like everyone else, the people innovating and creating have to make a living. Large amounts of time and money can be spent on researching and developing new technologies and products without any guarantee that these will be rewarded, as there is always a risk that a product will not be successful. Intellectual property rights are a mechanism that allows innovators, creators and producers to finance their work through the market place. Other models of financing exist, such as government funding or private patronage, but intellectual property rights (IPRs) remain the basis most frequently used by individuals and organizations to fund and disseminate their work. Intellectual property rights allow creative freedom and encourage innovators and creators to be responsive to consumer needs.

Software and Business Risk

Software is one of the most valuable assets a business has; recent research from the Business Software Alliance revealed that 94% of businesses across Europe cite IT as being essential to the successful operation of their company. Specialist software enables firms such as architects, engineers, scientists, financial organizations, and designers to compete and innovate. But even in day to day business practices almost every company relies on spreadsheets for managing financial activities, databases to hold vital information, email to communicate (with colleagues, customers and suppliers), and desktop publishing packages to create presentations and marketing collateral.
So it may come as a surprise to hear that 36% of software in businesses in the European Union is used without a valid license.
Ignorance of the status of software licenses within a company offers no defence, so it is vital that organizations are fully aware of both the risks of software piracy to their business, and the steps they can take to avoid those risks and ensure that they are acting legitimately.
Just as a business has to manage its employees appropriately and within certain legislative requirements, the same is true of the software that it uses. While most businesses are aware of – and have processes in place to address – financial regulations and HR directives, they also have a responsibility to themselves and any stakeholders to carefully manage their software assets and foster an appropriate level of awareness within their company.
This can seem challenging at first, especially if the organization is growing quickly or there are substantial changes to the company structure. However, along with considering how best to work and communicate with stakeholders and employees, examining potential changes to financial status and reviewing contracts with suppliers and customers, time must be invested into managing software requirements. This will prove to be time well spent in the long term.
Well-implemented software management is not just about avoiding the risks to your business that unlicensed software use can cause, it can also deliver efficiency gains and significant cost savings; not only in terms of direct expenditure on software, but also in related process and infrastructure costs.
The benefits of effective software management are extensive: it can put you in a better position when negotiating with software providers and ensures you have the information you need to feel confident in your software purchasing arrangements.
It enables more strategic planning and prevents under and over-licensing, while reducing the IT administrative and support burden and its associated costs. Your IT department or support services are better able to control what software employees have access to, including their ability to introduce unauthorized software on to your network.

The economic impact

Software piracy doesn’t just have a negative impact on the business environment – there are far wider-reaching implications for the economy as a whole. Piracy drains revenues that software providers would otherwise invest in research and development, as well as jobs. Because software plays such a pivotal role in the information economy, this creates a ripple effect and impacts on other parts of the IT sector and the economy overall.
Not only does the IT industry employ hundreds of thousands of people and make a significant contribution towards GDP, it also drives productivity across most businesses. It is therefore vital that businesses recognize the value of software and ensure every piece is legal and properly licensed.

Unlicensed software: what are the risks?

1. Operational and Technical Risks
a. Loss of & damage to data
b. Loss of functionality
c. Lack of technical support
d. Damage to reputation
2. Financial and Legal Risks
a. Legal Penalties
b. Costs of being caught
c. Fines
d. Costs of rectifying the problem

How to reduce the risks?
1. Regular Audits and Effective Usage Policies
2. Software Asset Management

Eight Steps to Implementing Software Asset Management:
1. Get company-wide support
Implementing SAM means a significant cultural change – it is vital to ensure that both senior management and end users support the project and understand the need for SAM.
2. Appoint a software asset manager
Unless you have one person overseeing software throughout a company, it is very difficult to keep track of software assets. This does not have to be someone in the IT department but, depending on the size of your organization, the person who is responsible for IT administration (and therefore has involvement in software purchasing) is best. If you only have one person with responsibility for IT – often the case in smaller firms – make it a clear and defined part of their job description.
3. Audit current software and license usage
You will need to take an inventory of your current software assets in order to know exactly what software is running in your company and the licenses required for this software. Only by knowing what software is installed, how many computers your organization has, and whether there are any copies of programs that may have been installed by employees, are you in a position to identify potential risks or issues and take measures to counteract them.
4. Create a software asset management database
Having a good database to store all information regarding your software is vital to the success of your SAM strategy. You could use a spreadsheet or invest in something designed for the task – either way it will prove invaluable.
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5. Centralize the purchase and distribution of your software
If there is no single view of software spending or purchase responsibilities, it will be nearly impossible to realize the full benefits of SAM.
6. Set policies and procedures
Controlling how software gets into your company is one of the best preventative measures you can take. A clear and enforced employee policy statement covering what is and isn’t allowed will help keep the situation under control.
Ensuring that staff fully understands and buy into your software asset management strategies will mean that you are one step closer to controlling the environment in which software is introduced into your organization.
7. Monitor Regularly
Be aware that SAM is a continual process and will require monitoring through regular audits in order to function smoothly and efficiently.
8. Use an impartial advisor for help
To help businesses wanting to avoid the risk of unlicensed software, the Business Software Alliance has created an online resource on its website (www.bsa.org), which provides advice and Software Management tools. Just visit the Tools and Resources site to find out more.

 

[Courtesy: Saudi Arabian General Investment Authority - SAGIA]