As noted here, Intellectual Property (IP) is a key aspect of any digital transformation project. IP rights allow creators to benefit from their own scientific, technological, literary, or artistic work, and owners to benefit from their investment in a creation. Intellectual property law plays a very important role, not just in protecting companies from the misuse of their know-how, but in promoting originality, creativity and innovation within our society.
While advanced and disruptive technologies offer exciting possibilities for the creation of new works, ironically they also facilitate the infringement of IP rights. In the sharing economy, it is often difficult to protect content from being shared or to prove when an infringement has taken place.
Awareness of intellectual property rights and how to protect and commercialize them has become essential in today’s digital environment. So any digital transformation project needs to take into consideration how to protect your own IP rights, while also making sure that you do not infringe on the rights of others.
Categories of intellectual property rights
When planning your digital transformation, you will need to keep in mind the five categories of intellectual property rights, as defined by the World Intellectual Property Organization (WIPO):
Copyright and related rights: Copyright laws grant authors, artists and other creators protection for their literary and artistic creations, in particular for the form of expression.
Patents: A patent is an exclusive right granted by a patent office for an invention – a product or process that provides a new way of doing something, or that offers a new technical solution to a problem. It provides owners with protection for their inventions for a limited period of time, generally 20 years.
Trademarks: A trademark is a distinctive sign that identifies certain goods or services produced or provided by an individual or a company. It may be one or a combination of words, letters and numerals. It may also consist of drawings, symbols or three-dimensional signs, such as the shape and packaging of goods.
Industrial design: An industrial design refers to the ornamental or aesthetic aspects of an article and is applied to a wide variety of industrial products and handcrafts including fashion items.
Geographical indication: A geographical indication is a sign used on goods that have a specific geographical origin and possess qualities or a reputation due to that place of origin. Most commonly, a geographical indication consists of the name of the place of origin of the goods. It is widely used for agricultural products, but can also be used to protect products that unique due to specific local skills and traditions.
Although not mentioned in that WIPO enumeration, trade secrets play an increasingly critical role in innovation and the digital and data economy. In the absence of specific rights protecting the ownership of data which is not part of a database protected by copyright, trade secrets protection is often the only way to retain and commercialize the value of data. An area where the importance of trade secrets is obvious is encryption technology.
What are the IP challenges in a digital world?
As noted above, advancements in technology can facilitate piracy, counterfeiting and other IP infringements. At the same time, as digital consumers, we are faced with the phenomena of user-created content online, mashups and access to digital culture. So how can we be best prepared to respond to the challenges of digital transformation from an IP perspective?
Firstly let’s look at the challenges of piracy and the emergence of disruptive technologies. Infringements of IP rights occur when someone manufactures, sells or distributes protected items without the right holder’s authorization. In addition to this measurable loss, intellectual property rights infringements have more severe impacts on the economy in the long run. These include adverse social and economic effects such as loss of jobs and reduced incentives for creativity and innovation.
In the digital age, the issue of piracy and counterfeiting is particularly important. Unauthorized data sharing, integration, utilization and public disclosure are the biggest areas of concern. The continuing development of technology and the global expansion of the Internet have made it easier to obtain information about products, including high-tech goods, like pharmaceuticals, computer chips, software etc.
What’s more, new manufacturing technologies such as 3D-printing make the production of pirated goods easier than ever. These recent trends come on top of “classic” counterfeiting and product piracy practices which have not lost relevance, and which, according to Europol, make up to five percent or €85 billion of all imports into the EU.
The internet’s anonymity and lack of borders create an ideal environment for IP infringement. This is particularly true of the Darknet, a network that can be accessed through special software or communication protocols, which has become a hotbed for shady activity. Worryingly, more and more infringements are committed by cross-border criminal groups, which use the internet for organization, distribution, customer care and online payment, thus making it extraordinarily difficult for rights owners to enforce their rights by turning to courts of law and initiating civil proceedings against infringers.
While trade has become more international, and regional economic integration has led to the dismantling of borders in order to ease trade flow, efforts to combat piracy and counterfeiting have been lagging behind.
The digital environment also presents legislative challenges in terms of IP enforcement, which have not yet been tackled in any global agreements. Infringements carried out over the internet pose very specific obstacles to effective enforcement such as the identification of the infringer, liability of service providers, enforcement of IP rights, the treatment of online rights protected abroad, and the question of court jurisdiction.
How do we respond to protect our IP?
No single actor – be it the government, business or consumer – and certainly no party acting only at a national level can win the fight against IP infringements on their own. In a globalized business environment, international cooperation is the key to protecting IP rights, with official players taking a vital role in the battle against piracy and counterfeiting including Europol, WIPO and BASCAP. In addition to these “official” players, many IP rights holders are approaching online marketplaces – which could be (unintentionally) used to sell pirated goods – to raise awareness of IP infringements and seek their collaboration in fighting IP crime. Many companies are developing security strategies that employ a suite of technologies and capabilities to combat intellectual property infringements:
- Watermarking: The biggest benefit of watermarking is its potential for deterring unauthorized uses of content. It is a piece of information added to content that establishes the identity and ownership of an individual piece of content.
- Fingerprinting: A digital fingerprint is an exclusive pattern of ones and zeros that identifies content.
- Digital rights management (DRM) technologies: Digital rights management technologies protect copyrights by identifying content, controlling access, protecting the integrity of the work and ensuring payment for access. Another way to protect digital content is through Technical Protection Measures (TPM).
Access to digital content
Despite IP challenges, digital disruption also has a positive impact by offering ever growing access to digital culture and user created content online.
The EU Commission recently announced initiatives to strike a better balance between rewarding the creator’s investment and promoting the widest possible access to goods and services protected by IP rights.
For example, it is introducing legislation to allow the digitization and online availability of orphan works, for which the copyright holders are not known or cannot be located to obtain copyright permissions. It is also seeking to simplify the collective management of copyright in the EU, and create a European copyright code and “unitary” copyright title. The EU is also continuing to fight to reduce the sale of counterfeit goods over the internet.
The way forward
In today’s digital world, the dizzying number of opportunities to distribute goods provides new and ever increasing challenges. The international IP legal framework provides consistent and flexible protection for owners of both traditional products and digital content. However, neither legal frameworks nor regulatory intervention will ever keep pace with the speed of technological advancement or with the pirates who seek to circumvent that technology.
When planning your digital transformation, it is important to bear in mind that IP protection is essential to encourage innovation and to preserve the diversity of creation, and to build such protective measures into your strategy. However, since the very concept of protecting intellectual property has come under attack in the sharing economy, policymakers and industry players alike should also think about new and innovative ways of remunerating creators in a way that discourages the infringement of rights.