Achieving operational clarity with aspects of Islamic – Sharia law…pertaining to intellectual property and other intangible assets constitutes prudent foresight for any professional services firm.

I do possess a very genuine desire to learn key practicalities and cultural aspects of Islamic (and Sharia) law…insofar as it relates to engaging in and/or endeavoring to conduct (business) transactions in which intellectual property and other intangible assets are in play, which I presume they are in predominantly Islamic countries as else where.

After reading and studying numerous, primarily academic, papers about… what I respectfully refer to as an emerging business necessity, if not (fiduciary) responsibility.  I defer to an excellent paper authored by Silvia Beltrametti, (The Legality of Intellectual Property Rights Under Islamic Law, The Prague Yearbook of Comparative Law 2009. Mach, T. et al. (Eds). Prague, 2010. pp. 55-94).

While I did find many answers to the practical questions I was seeking…numerous questions remain insofar as the actual application of Islamic law to IP (intangible asset) what I initially believed to be western conventions.

Ms. Beltrametti (a JD from the University of Chicago with an emphasis/specialty in IP) states that intellectual property rights, per se…are not regulated by Islamic law and its jurisprudence.

Rather, the question or issue, she posits, is…whether the principles of Islamic law can be construed in a manner that actually provides for or supports intellectual property rights protections in a western, conventional, WIPO (World Intellectual Property Organization), context?

Beltrametti’s paper further discusses the extent to which Islamic law…affects the protection of intellectual property (rights).  She does this initially by presenting Sharia’s main sources; the Qur’an, the Sunna, Ijma and Qiyas.  I should note that the term Sharia, as applied throughout Beltametti’s paper, is synonymous with Islamic law.

Appropriately, Beltrametti points out, tensions and challenges…remain between (a.) the predominantly Western, and (b.) Islamic perspectives regarding intellectual property rights, as well as (c.) the role economics plays within Islamic law and society.

To that, Ms. Beltrametti offers an intriguing perspective…in which she describes Sharia based (legal, intellectual property rights) system, as being flexible and adaptable.  Such flexibility, she suggests, can be used to address current economic facts/realities, for example…

• 80+% of most company’s value, sources of revenue, and ‘building blocks’ for growth, profitability, and sustainability today reside in or evolve directly from intangible, often IP-based assets.

Another equally informative paper, titled… ‘Can TRIPS Live in Harmony with Islamic Law: An Investigation of the Relationship between Intellectual Property and Islamic Law?’ authored by Chad M. Cullen (Baker Botts) provides much needed additional insights.

Both authors/researchers, in their respective style…

• agree that intellectual property (rights), per se, are not particularly new concepts to Islamic rule of law.
• some IPR’s are actually strengthened by Islamic rule, while others were never explicitly formulated (as law), instead, they evolved as accepted social norms.
• point out that since the advent of Islam, the concept of intellectual property (rights) has expanded to include trademarks, patents, and certain forms of copyright…
  • by granting limited exclusive rights to works, in exchange for the commercialization of original creations that benefit society, while also allow the owner (presumably the originator) to stop overt – unauthorized use, e.g., presumably acts such as counterfeiting, piracy, infringement, misappropriation, etc.
• agree that Sharia does not refer to Islamic legal rules only, rather, Sharia encompasses a timeless concept of justice and fairness that may be best understood as constituting a higher rule of law with a divine connection.

After reviewing numerous (other) sources, I concluded, correctly and reasonably I trust, that…

• there are varying degrees of latitude insofar as interpreting and applying IP and intangible asset matters under Islamic (Sharia) law, however,
• such laws are not being aggressively enforced, at least at the present time.
• in other words, infringement and misappropriation, etc., in predominantly Islamic countries contributes to substantial losses of revenue for companies and/or individual business persons who rely – are dependent on intellectual property rights, and/or
  • whose businesses are intangible asset intensive and dependent.

It’s important to recognize that such transgressions pose significant problems globally…not just in countries which practice Islamic law.

Both Cullen and Beltrametti note however…that an Islamic World Trade Organization member state, is obligated to uphold the requirements of TRIPS…

• under Shari’a, this has led many Islamic states to enact intellectual property laws meeting the minimum standards of TRIPS. i.e., The Agreement on Trade Related Aspects of Intellectual Property Rights 
• thus, being a signatory to TRIPS essentially operationalizes the belief that intellectual property rights are compatible with Shari’a and related Islamic legal concepts and practices.

The Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) is an international agreement administered by the World Trade Organization (WTO) that sets down minimum standards for many forms of intellectual property (IP) regulation as applied to nationals of other WTO Members.^[2] It was negotiated at the end of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) in 1994.

As stated here previously…intellectual property rights, be they TRIP’s initiated or otherwise, have not been particularly well-received in some Islamic states.

On the other hand…numerous Islamic states have stringent intellectual property laws and regulations in place.  However some, not unlike other non-Islam countries, remain ineffective or experience particular challenges related to actual enforcement of intellectual property rights.

One question to pursue further on this matter…is whether ‘selective IP enforcement’ is a government influenced choice or mandate, or an enforcement resource issue?

Taking this perspective steps further…some assume that forcing WTO membership and TRIPS upon Islamic states through threats of import – export restrictions and high tariffs underlie a perception that intellectual property law, with provisions for the enforcement of intellectual property rights, constitutes another facet or form of Western oppression.

This perspective has gained support in some sectors of the Islamic community…in other words, infringement and/or misappropriation of intellectual property (rights) may not characterized so much as a legal wrong per se, rather a means for seeking revenge against the West.

So, how should these developments – circumstances be interpreted by businesses…wishing to engage in transactions in countries practicing Islamic law where in most instances, there is significant intellectual property and other intangible assets integral to a transaction and its outcome?

I argue, as in any transaction…intellectual property and other forms of proprietary – valuable intangible assets will play increasingly significant roles. Businesses engaging in such transactions, will find numerous posts made at this blog relevant to that and other questions – issues, ala intangible asset due diligence and risk assessments.

I am very grateful for the work/research produced by Silvia Beltrametti and Chad Cullen in the development and writing of this blog post and I encourage readers to read their respective papers.

Michael D. Moberly January 24, 2014  St. Louis  [email protected] – the ‘Business Intangible Asset Blog’, since May 2006, 600+ posts, ‘where attention span, intangible assets, challenges, and solutions converge’. 

Readers are invited to explore position papers, video, books, and blog posts at https://kpstrat.com/blog