Patent law

The intellectual property protection

In the current society of knowledge, the capability of producing innovation constitutes the most effective drive of the economic development.
In the current society of knowledge, the capability of producing innovation constitutes the most effective drive of the economic development.

In today’s society of knowledge, determining factor for the international competition, the intellectual property protection constitutes an inalienable right for advanced industrial enterprises and a powerful social boost for the innovation development. 

Roberto Papeschi

With the progressive dematerialization of the factors that contribute in the economic development, today the production of industrial innovation is the element that more characterizes the developed Countries and distinguishes them from the underdeveloped ones, to the extent that the number of patents achieved every year, together with the investments lavished in research and development, constitutes an effective index of the competitive capability of each nation. The evaluation itself of the business capital includes today the economic value of the company’s intellectual property. This value is calculated starting from the innovative aspects of products and processes, which are considered an “intangible industrial asset”, that’s to say a heritage comparable, and in same cases superior by importance, to the physical and financial capital of the enterprise itself. It is then clear that, since the first forms of industrial organization, enterprises have tried to protect this capital against competitors’ imitation, which if not effectively contrasted, would have produced a market distortion, favouring those that, instead of producing innovation on their own, tried to embezzle the knowledge and the results obtained by others. In the absence of an effective protection of the intellectual property of enterprises, the investments in research would have been discouraged, with negative consequences on the economic development. On the other hand the new technologies, together with the easy communication, the knowledge diffusion and the market globalization increase the counterfeiting risk with more and more sophisticated methods and in the international ambit. In the common opinion, this phenomenon took on special significance in the last decade as far as the products manufactured in China are concerned, where enterprises have often been accused of violating the rules of the intellectual protection. More recently, however, after joining the World Trade Organization, China has made significant progress both from the point of view of the normative regulation and concerning the juridical protection of the rights acquired through the registration of trademarks and patents. Concerning this, it is worth reminding that, according to the data provided by the World Intellectual Property Organization, which also China joined, in 2009 in China a good 818,633 applications for registration of trademarks were submitted, 249,701 applications for the registration of industrial design patents and 240,340 demands for the registration of invention patents with a rise, compared to 1999, respectively by 86%, by 85.5% and by 89%.

Historic hints
The intellectual property is subdivided into the two categories of the industrial property and of copyright. The industrial property, which from the point of view of its use for economic purposes more concerns enterprises, is protected by patents and by the registration of trademarks and designs in the ambit of specific juridical regulations. These, despite the efforts made for their standardization, are still different in the various Countries and this, owing to the growing market globalization, constitutes a trouble for innovative enterprises and a hindrance to the free circulation of knowledge. Even if some forms of intellectual property protection can be found even in the III century b.C., it is in Europe and in particular in Italy that 500 years ago patents were conceived and assumed juridical form, already at that time devised as a form of industrial innovation protection. In 1474, in fact, the Republic of Venice enacted a law aimed at limiting the diffusion of the knowledge concerning the glass processing. This activity, which had its competence centre in the Murano Isle, constituted an important source of income for the Serenissima and for this reason the workers in the glass processing enjoyed particular benefits, while severe penalties were foreseen for those who abandoned the territory of the Republic. There is even the rumour that, when a master glassmaker abandoned Venice to transfer his business to Paris, the Doge sent some hired assassins to France with the task of killing him. With less bloody modalities, in the 500 following years the intellectual property protection went on evolving, extending to a bigger and bigger number of Countries starting from Saxony, which, some centuries after Venice and with an approach fully resembling the Serenissima’s, intended to protect the originality of the porcelain working techniques. These techniques, after being developed with original modalities in Dresden, were afterwards concentrated in Meissen, a small town where the movements of workers were more easily controllable.

Today the intellectual property protection finds its most extended form in patents, regulated by precise juridical regulations. (Credit Fotolia)

From the industrial secret to the current juridical forms
If the first forms of intellectual protection of innovation had taken the prevailing form of the trade secret, in more recent age the more modern regulations governing the grant of patents and the registration of trademarks and designs have been consolidated. Patents, in particular, have on one hand the goal of protecting the producer of innovation for a certain number of years, in order to grant him the time of exploiting industrially the results of his investments in research but at the same time, since the patent registration is public and must be accompanied by a complete and exhaustive documentation, in compliance with defined rules, they allow the knowledge diffusion, at first with the inventor’s consent or afterwards at the expiry of the patent deprivation period. Europe has mainly contributed in the definition of regulations for the intellectual property protection in the various forms of industrial patents, trademarks and designs as, with the Union Convention of Paris on March 2oth 1883, it laid the bases, afterwards used also by other Countries, for the diffusion and the legislative perfecting of this matter, establishing also the rules for the indication of the provenience and the prevention of unfair competition. In their turn, in more recent times the United States have provided for defining adequate legislative instruments, including in 1980 the Bayh-Dole Act, from the name of the two senators promoting the law. An important step for the simplification of procedures and the standardization of the regulations in force in the various Community Countries had already been taken in Europe on October 5th 1973, with the Convention of Monaco of Bavaria, after which it became possible, with a single registration of European patent, to obtain successively a number of national patents acknowledged in the Countries joining the Convention. After this treaty in 1975, with the successive Convention of Luxembourg, it was established the European Office of Patents that should issue the Community Patent valid for all Union Countries. The approval procedures for the definition of this regulation, however, are still in course, owing to the numerous bureaucratic problems, the hindrances connected with the existence of different languages and the necessary costs for the extension of a single patent to all Community Countries.  The definitive agreement among the European economic ministers about the Community Patent, with the overcoming of the last obstacles to its adoption, was finally reached on 3rd March 2003, but the relative implementation regulation is still in the discussion phase at intergovernmental level. On a world scale, on the contrary, the various forms of intellectual property are regulated by TRIPS- Trade Related Intellectual Property Rights agreements, signed on April 15th 1994. The acceptance of the contents of such agreement constitutes a prerequisite for the entry of a Country into the WTO – World Trade Organization, the international organization created with the aim of regulating the international agreements among member Countries and of permitting a freer circulation of goods worldwide. On August 24th 2012, 157 Countries joined WTO, with the addition of other thirty observer Countries. The whole of all these nations represents about 97% of the world trade of goods and services. Concerning the number of registrations regarding the various economic areas, we can notice that today they are still concentrated in the three offices of the United States (USPTO), of the European Community (EPO) and of Japan (JPO).

The first example of a directive for the intellectual property protection dates back to 1474, when the Republic of Venice arranged to enact a law that limited the diffusion of knowledge concerning the glass processing.

It is in fact in these Countries that by tradition the biggest production of innovation on a world scale takes place, even if in the last years we can see a notable growth of patents registered in China. With the cooperation treaty concerning patents, the Patent Cooperation Treaty (PCT), signed in Washington in 1970 and then revised in 1984 and in 2001, it was anyway made possible the unified deposit of the valid patent applications in one or more Countries taking part in the treaty itself, which is managed by the World Organization for the Intellectual Property (OMPI) headquartered in Geneva.

The China case
China’s adhesion in 2001 to the World Trade Organization, due to the Country’s sizes and the particular conditions of management of its own economy, has strongly influenced the regulations of the competitive challenges among the various Countries. Approaching the market as “the world manufacturing factory” for the production of a wide range of goods produced until that time in Europe, United States and Japan, China has actually altered the world trade, operating in a way that has been often judged unscrupulous. The extended phenomenon of the imitation of original products and of the counterfeiting of foreign trademarks, coupled with a low production cost, has strongly damaged the producers of the most developed Countries, in particular owing to the absence in that Country of a valid directive concerning the intellectual property protection and, besides, to the linguistic problems that arise when you have to face a legal dispute locally. The big Asian Country, constituted by a whole of regions with different economic development, had not in fact developed a specific patent legislation until when, with the opening of its economy to the world trade, it was compelled to issue various laws to satisfy the provisions that the World Trade Organization posed as prerequisite to become its members. For this reason, in 1982, it was approved the Trademark Law of P.R. China, followed in 1984 by the Patent Law of P.R. China and in 1990 by the Copyright Law of P.R. China, an then by the implementation regulations intended for the institutes entrusted with the management of the operational aspects provided for by law.

Credit Fotolia

Concerning the administrative aspects, the granting of patents and utility models is empowered to the State Intellectual Property Office (SIPO), while about trademarks is competent the Trademark Office (TMO), which operates with the control of SAIC – State Administration for Industry and Commerce. Administrative procedures are generally rapid and have low cost. Finally, regarding the legal instruments for the defence of one’s own rights, it is possible to turn to competent authorities both for civil and penal matters. Concerning this, it is worth reminding that in China the violation of rights concerning trademarks and patents has penal relevance, but the contrasting actions of violations are, generally, scarcely effective. Administrative provisions, in fact, do not allow carrying out in-depth investigations and conducting searches, while for the other legal actions in case of counterfeiting, the translation into the local language of the whole documentation submitted to support one’s own rights is requested. The Chinese legislative system, not easy to consult, is organized on more levels and provides for a national legislation of general character, to which are added numerous secondary regulations issued both by the Central Government and by local Authorities. Regarding instead legal actions, the Chinese system is structured on a double track, with administrative as well as with judicial bodies. Besides, they can also rely on a protection form exercised by customs structures. In January 2001, in fact, various customs provisions were introduced in China, mirroring those already existing for a long time in Europe and United States. Those provisions, reserved to the only subjects registered by the Chinese Customs Authority GAC – General Administration of Customs, establish that, following a complaint, the seizure of counterfeited goods is executed, with the obligation, for the holder of the right, of submitting the documentation of the occurred violation within three days from the attachment request.

With the Convention of Strasbourg, in 1975, it was established the European patent Office, with the aim of permitting the registration of a Community Patent, valid for all Union Countries.

Advantages and disadvantages of the regulatory protection
The reasons for which innovative enterprises are induced to protect themselves against counterfeits by means of the patent registration are numerous. In addition to the most common reasons, which are to avoid the copy of their own products and to block similar patents by competitors, there are the improvement of their own reputation, the promotion of the negotiation possibility on the market, the achievement of profits from the cession of licences and the avoidance of legal actions. Nevertheless, even if it is true that the patent is deemed one of the main instruments to protect the intellectual property, enterprises do not only consider turning to this form of protection advantageous, especially in Italy where small and medium enterprises prevail, because of the competences needed for a correct patent definition, the complexity of procedures and the costs to be borne for the registration of patents on a world scale. A recent survey carried out by the IRS-ENEA Institute, in fact, has highlighted that, rather than the patent registration, lots of enterprises prefer the fast marketing of new products on the market and the implementation of effective marketing policies. The situation concerning the innovation of industrial processes is not different. In this case, the protection to which they mostly turn is represented by the trade secret. This is due to the fact that the counterfeits of products are more easily surveyed, this is not so true for industrial processes, to which the access is not always permitted. On the contrary it is easier to keep the secret just about industrial processes, also because their development and their realization are generally managed autonomously by the same proprietary enterprises of innovation, or at least they are entrusted to trust companies. In this case the registration of a patent, which by law must be accompanied by a complete and exhaustive description, it would even favour counterfeiting, instead of preventing it.

Credit Fotolia