Archive for 'Intellectual Property Rights'

Islamic – Sharia Intellectual Property Law Professional Service Firms (part 2)

June 15th, 2017. Published under Intellectual Property Rights, Islamic IP. No Comments.

Michael D. Moberly June 15, 2017 ‘The business IP and intangible asset blog where attention span really matters!’ (m.moberly@kpstrat.com)

Introductory Note: This post represents the second in a series of posts intended to encourage, through explanation, professional service (business, law) firms to acquire operational familiarity with Islamic intellectual property and Sharia interpretations as preludes to attracting – engaging clients and negotiating and executing relevant transactions. Readers can be assured throughout these posts, the sovereignty of Islam is respected.

The proposition here is to challenge arguments that Islamic law and (conventional, western) intellectual property law and practice cannot coexist. That is not to suggest one will be superior – subordinate to the other. Instead, it simply implies there are strategies to respectfully ameliorate both.

So, another 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 (Fall, 2010 SMU Science & Technology Law Review 14 SMU Sci. & Tech. L. Rev. 45) also provides relevant insights to the Islamic faith especially insofar as pointing out that…

• intellectual property (rights) are not new concepts to Islamic rule
of law. In fact, some IPR’s are strengthened by Islamic law, while
others were never explicitly formulated (as law), instead, they
evolved as accepted social-business norms.

• the concept of intellectual property (rights) in Islam has expanded
to include trademarks, patents, and certain forms of copyright.

• granting limited exclusive rights to commercialize such works to
benefit society collectively.

• originators-holders have remedies to stop overt – unauthorized use
of their ‘product of the mind’, presumably acts such as
counterfeiting, infringement, and misappropriation, etc.

• Sharia does not refer to Islamic legal rules only, rather Sharia
serves as an enduring and timeless concept to reflect justice and
fairness, and constitutes a rule of law with a divine connection.

It’s reasonable to conclude from Cullen’s work regarding the relationship between intellectual property and Islamic Law that there is various latitudes exist insofar as how IP and intangible asset matters (under Islamic – Sharia law) can be interpreted and applied. For example, by many accounts, laws intended to deter, prevent, stop, and/or mitigate theft, misappropriation, and infringement of registered IP and/or proprietary intangible assets, i.e., intellectual, relationship, and structural capital in particular, are not consistently or aggressively enforced.

One reason IP laws and safeguards enacted by Arab countries are variously unenforced is due, at least in part, to inherent complexities embedded in the collective nature and community values of Arab culture which presents various challenges insofar as introducing (conventional) IP concepts of propriety, individual ownership, control, and remuneration emanating as products of one’s mind. These important concepts, rooted in religious belief and societal culture, variously affect government or individual inclinations to safeguard IP in Arab countries. In part, that’s because some still hold to the belief that ‘property’, be it spiritual or temporal, is communal, and therefore owned by Allah. However,sharing same is generally not considered to be a violation because some Sharia schools of law permit one to gain profit from their individual efforts. For example, an author or inventor can be entitled to recoup their initial investment and beyond, as-long-as that amount is deemed fair and balanced with the time and effort exerted. Paradoxically, some followers of the Muslim faith draw attention to the fact that intellectual property safeguards are traceable to concepts found in Sharia and are not exclusively a Western phenomenon. (Bashar H. Malkawi)

The Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) is an international agreement administered by the World Trade Organization (WTO). The TRIPS agreement introduced intellectual property law into the international trading system for the first time and arguably is the most comprehensive international agreements on intellectual property matters and safeguards to date. TRIPS was negotiated at the end of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) in 1994.

Both Cullen and Beltrametti, in their respective research, note that every Islamic nation signatory to TRIPS, is obliged to adhere to – uphold the provisions of the TRIPS agreement. Presumably TRIPS influenced some Islam dominant nations to enact their own IP laws to, at least, reflect TRIPS minimums. In that context, it’s reasonable to assume that countries that are principally guided by the Islamic faith and are also signatories to TRIPS, believe that intellectual property rights are – can be compatible with Sharia principles, interpretations, and practices.

But, in 2001, groups of developing countries (signatories to TRIPS) expressed concern that developed countries were asserting a particularly narrow interpretation of TRIPS regarding ‘promoting access to medicines for all’. Public airing this concern resulted in what is referred to as the Doha Declaration which is a WTO pronouncement that clarifies the scope of TRIPS.

In actual practice, however, passage of intellectual property rights (laws) in predominantly Islamic faith countries, whether sparked by TRIP’s, or other factors, such as WTO requisites, have not been particularly well-received. That is, a percentage of nations – communities with substantial adherence to the Islamic faith, support for conventional IP has not been widespread, in part due to the belief – reality that large percentages of innovation that emerge from IP and proprietary intangible assets, i.e., advanced technologies, etc., originate predominantly in the West, and not from Islamic (religious) sources.

However one may elect to interpret this perspective, it does variously produce reluctance – hesitancy to fully adopt (accept) broader recognition of conventional intellectual property rights in some sectors of Islam

Comments and questions regarding this post are welcome and may be directed to m.moberly@kpstrat.com.

Intangible Assets Not Renewable Resources

June 2nd, 2014. Published under Fiduciary Responsibility, Intangible asset protection, Intellectual Property Rights, Organizational resilience and business continuity/conti. No Comments.

Michael D. Moberly   June 2, 2014   ‘A long form blog where attention span really matters’.

Pat Choate, in his 2005 book titled ‘Hot Property: The Stealing of Ideas in an Age of Globalization’ (p. 218)points out that an ‘idea, by definition, exists solely in one’s mind, where it remains happily and comfortably secure, but not terribly useful’. So, in order for an idea to potentially produce commercial and/or contributory value to its holder at some point, it must be expressed. Even though Choate (2005) says ‘protecting one’s ideas represents a basic social contract between society, its government, and the individual(s) who created the idea’, the act of openly expressing ideas, with increasing frequency, serves as a starting point for asset vulnerabilities and potential challenges and disputes to emerge for the originators (holders – owners) of the ideas.

Fundamentally, products of the mind are a type of intangible asset and manifest as intellectual, structural, and relationship capital including intellectual property (IP) and some other forms of proprietary information. Risks, to these intangibles materialize with some regularity and certainty, often in the form of purposeful or inadvertent events, acts, or behaviors that can adversely affect or jeopardize (asset) ownership, control, use, and value. A significant percentage of materialized intangible asset risks are of a nature to adversely affect a company’s reputation and its competitive advantages with equal rapidity, for example…

  • stifle competitive – economic momentum of a company project, new venture, or product launch.
  • undermine a business transaction or strategic business plan.
  • erode an assets’ value as a source of potential value and projected profitability.

Business continuity – contingency planning pre-Internet era…

In the pre-Internet era, when intangible asset were barely a twinkle in economists’ eyes, misappropriation, infringement, and/or counterfeiting was characterized as being relevant almost exclusively to IP, i.e., patents, trademarks, copyrights, and trade secrets. Too, at the time, a relatively common risk mitigation strategy (to a company’s assets) was business continuity – contingency planning, not organizational resilience, and was generally designed – intended to be a mechanism to contain the risk(s) and mitigate their impact, i.e., the damages or extent of the losses as well as additional adverse impacts to company reputation, image, and goodwill, etc.

Today however, in the current knowledge based (intangible asset) era of going fast, going hard, and going global, even the most well-intentioned and wishful thinking efforts to contain the multitude of risks that can materialize is more fitting, in my view, to tangible (physical) assets than intangible (non-physical) assets.

For example, in the world of physical (tangible) assets, so-called firewalls erected between apartment buildings are designed – intended to contain or reduce, for a certain period of time, the probability that a fire in one building will spread to adjacent buildings and/or structures.

Such conventional firewalls however are less relevant or practical insofar as safeguarding or mitigating risks to knowledge-based intangible (non-physical) assets which again include intellectual, structural, and relationship capital, IP and proprietary information. In most instances, in today’s increasingly sophisticated risk laden R&D and business transaction environments, anyone of these types of intangible assets, absent effective asset monitoring and safeguards, will be at risk. Unfortunately, the sophisticated methodologies applied by the expanding number of global economic and/or competitive advantage adversaries, allow value laden intangible assets to be quickly discerned and instantaneously disseminated to a growing and often organized and sophisticated labyrinth of information brokers, business intelligence operations.

Don’t Overlook Intangible Asset Safeguards

Significantly, once an intangible asset has been compromised or succumbed to the growing array of sophisticated and asymmetric risks and threats, a company mitigation practice based primarily on the principles of containment, in my view, is neither a realistic or viable (standalone) strategy, certainly not something which a company’s management team, c-suite, board should feel comfortable insofar as their fiduciary responsibilities are concerned, i.e., see Stone v. Ritter.

Thus, while conventional intellectual property enforcement mechanisms (i.e., patents, trademarks, copyrights, trade secrets) remain a global (WTO) requisites for conveying ownership and standing to address the inevitable disputes, challenges, risks, and threats, the deterrence features associated with each have been minimized and are routinely disregarded and circumvented by adversaries. Thus conventional IP enforcements assume a more reactive vs. proactive posture, one that requires formidable and consistent self-policing and monitoring

In today’s increasingly aggressive, predatorial, and ‘winner take all’ global R&D and business transaction environment, this leaves, in my view, conventional forms of intellectual property (enforcement) certainly less relevant, perhaps even approaching some manner of obsolescence insofar as effectively combating the ultra-sophisticated risks and threats which are now routine.

Conventional IP enforcements carry little, if any, deterrent features today…

While I am not suggesting conventional IP enforcements should not be used, the harsh reality is, the once respected rights and protections afforded to innovators and entrepreneurs for their products on the mind, through patents, trademarks, and copyrights, etc., are now being routinely outpaced, circumvented, and utterly disregarded by adversaries globally. Any entrepreneur or company who assumes the mere issuance of a patent, standing alone, will be sufficient to sustain full control, use, and ownership rights for the duration of their patent, for example, is simply no longer credible.

The notion that conventional IP enforcements will ensure indeterminate control, use, and receipt of economic/competitive advantage benefits from an individual’s or company’s hard earned and often very expensive know how, i.e., the intellectual, structural, and relationship capital is unfortunately a business risk that should not be assumed is the exclusive bastion of legal (IP) counsel.

It would not be too challenging to argue conventional intellectual property enforcements carry less benefit to a single holder or a company, aside from providing legal standing in the increasing likelihood of having to engage in litigation over disputes and challenges. It’s most prudent then for business decision makers to ensure best practice intangible asset safeguards are in place from the outset of idea materialization. This includes consistent asset monitoring and defense, not merely directed to the conventional intellectual property rights, but also to sustaining control, use, ownership, and monitoring value and risks to those assets!

Sustaining a successful launch – commercialization of a new idea…

There are many different views about what is actually required to sustain a successful launch – commercialization of a new idea or project.

Obviously, having a very commercializable product and a sufficiently capitalized business plan and marketing strategy represent three time honored ingredients necessary for most successful launches. But, an often overlooked, underestimated, and misunderstood ingredient to a successful business – idea launch is recognizing that…

80+% of the value, sources of revenue, and future wealth creation of the launch will likely evolve from intertwined combinations of (a.) intangible assets and IP,i.e., intellectual capital, and (b.) specialized proprietary know how, i.e., structural capital, and (c.) attractive and distinctive competitive advantages, and brand integrity, i.e., relationship capital. (Moberly, 2011)

So, unlike conventional forms of IP enforcements, i.e., patents, trademarks, and copyrights, no government will issue a comparable certificate that says, these are your contributory value intangible assets, proprietary know how, trade secrets, competitive advantages, and brand integrity which an individual or company should safeguard and monitor their value and risk for the duration of their respective value and functionality cycle.

The responsibility for (a.) recognizing how the intangible assets evolved, (b.) the context which they now exist and are being applied, and (c.) unraveling them (individually – collectively) to assess their contributory value and potential conversion to sources of revenue and competitive advantage lie solely with the launching companies’ decision makers, i.e., originators, holders, and/or owners of those assets.

Admittedly, today’s hyper-competitive global business (transaction) environment, is influencing more companies to recognize the necessity for more than cursory intangible asset identification, assessment, safeguards, and monitoring of value and risk is much more than a time or resource permitting responsibility. These responsibilities are now instrumental in the initial success of product launches. Business decision makers who carelessly or unwittingly hedge their intangible assets’ essential maintenance, e.g., protection and preservation, will with greater frequency, if not certainty, cause risk-threat probabilities to become inevitabilities in which complete or partial (asset) value erosion and/or dilution are likely to occur which can also inadvertently create parameters and/or boundaries to a company’s economic – competitive position capabilities and potential.

What can companies do if – when their intangible asset ‘genies get out of their bottle prematurely…

The genie for profitable and sustainable launches of a new company, product, or idea is embedded in the business decision makers’ recognition that…

Getting out of the bottle is a metaphor of course, for situations in which business decision makers overlook or underestimate the role, contribution, and/or value intangible assets make to the overall sustainability of successful business launches and equally important, the risks-threats to those assets.

The initial requisite to commencing asset recovery action is recognizing delays in (a.) discovering the materialization of asset risk, and (b.) securing experienced guidance about what action to take and when, will most certainly complicate and weaken a company’s (legal) position insofar as the possibility of achieving a favorable (possibly full) economic – competitive advantage outcome.

A responsive and thorough ‘intangible asset – competitive advantage assessment’ is a prudent first step. A specialized (asset) assessment of this nature will aid a company and its decision makers to be better positioned to deliberate on two important points:

  1. prioritize options relative to trying to (re-) establish ownership control and use of the no doubt already hemorrhaging intangibles.
  2. strategies to try to stop and/or mitigate additional economic – competitive advantage hemorrhaging (of the assets), i.e., devaluation, undermining, infringement, misappropriation, reputation risk, etc.

Bottom line; risks-threats to a company’s intangible assets, intellectual property, proprietary know how and competitive advantages and brand integrity should not be dismissed and/or characterized as merely just another risk of doing business!

Unfortunately, far too many companies lose, inadvertently relinquish, and/or become entangled in extraordinarily costly and time consuming legal disputes and challenges over the ownership, control, use, and value of their intangible assets, competitive advantages, proprietary know how, reputation, and brand integrity. One of the most frequent reasons is dismissing the real, persistent and stealthy risks-threats to those assets and their contributory value to strategic sustainability.

International Law Inhibits Economic Espionage Prosecutions!

March 11th, 2014. Published under Economic Espionage, Intangible Asset Value, Intellectual Property Rights, Trade secrecy.. No Comments.

Michael D. Moberly     March 11, 2014    ‘A blog where attention span matters’.

Mandiant’s Report…

On February 19, 2013, Mandiant, a U.S.-based cyber-security firm released a report purporting to have evidence linking a specific unit of the (Chinese) People’s Liberation Army in Shanghai to a global cyber espionage campaign against companies in twenty economic sectors.  The campaign was designed to misappropriate valuable intellectual property and other forms of intangible assets, i.e., intellectual, structural, and relationship capital.  And why is this relevant? It’s because steadily rising percentages, i.e., 80+% of most company’s value, sources of revenue, profitability, and sustainability lie in – emerge directly from intangible assets!

As would be expected, Mandiant’s report received substantial media coverage, prompted no doubt in part by its immediate and categorical rejection by Chinese government officials.  Of note, the following day (February 20, 2013) the Obama administration release a newly tweaked strategy to combat theft of intellectual property and other intangible assets from U.S. companies based on the argument that trade secret theft threatens U.S. national (economic) security, with five strategic actions noted…

  • Focus diplomatic efforts to protect trade secrets overseas.
  • Promote voluntary best practices by private industry to protect trade secrets.
  • Enhance domestic law enforcement operations.
  • Improve domestic legislation, and
  • Public awareness and stakeholder outreach.

Economic Espionage Equates With National Security…

Economic espionage involves government and/or otherwise state sponsored initiatives to clandestinely acquire information assets from another (foreign) government or company that are in a safeguarded state.  That is, the information assets

  • are owned by a company.
  • distinguished as being proprietary, or
  • meet the requisites of trade secrecy.
  • enforced,  protected by intellectual property law, or,
  • categorized as being classified by a government entity.

Frequently though, economic espionage is referred to as corporate or industrial espionage.

The U.S., and I assume other countries as well, are correctly inclined, in my view, particularly in a 21st century context, to equate or elevate the aggressive, increasingly sophisticated and predatorial targeting capabilities of economic espionage to national and economic security status, as expressed by former FBI Director Sessions in the mid-1990’s. Or, in more recent contexts, numerous U.S. private sector and government leaders point to economic (cyber) espionage as metastasizing to the point of being a (the) primary contributor to the “greatest transfer of wealth in history’.  While this characterization may have originated with intent to dramatize the significance of this adverse phenomena, it’s hardly arguable.

An agenda…

I suspect, but have no direct evidence to support such a claim, there is an agenda, correctly or not, to modify the context of economic espionage, away from its 1996 roots with the passage of the Economic Espionage Act,  by consistently describing it as cyber-espionage vs. the more straightforward term of economic espionage.

To be sure, well before the advent of sophisticated cyber technologies, economic espionage was just as stealthy and successful as it presumably is today. The difference being, both protectors and adversaries apparently hold the view that all valuable information assets now exist primarily in electronic ‘bits and byte’ contexts.

However, be assured, that does not suggest economic and competitive advantage adversaries overlook or dismiss the extraordinary value embedded in human (intellectual, structural, and relationship) capital. Readers of this blog recognize, economic (cyber) espionage has manifested itself in multiple forms in the past quarter century.

International Law and Economic (Cyber) Espionage…

Countries’ desire and need to engage in more consistently potent legal prosecutions and other countermeasures to combat economic (cyber) espionage are challenged somewhat by existing international law on espionage, says David P. Fidler, Professor of Law at the Indiana University and a Fellow at I.U.s Center for Applied Cyber-security Research and member of the American Society of International Law.

In his fine article titled ‘Economic Cyber Espionage and International Law: Controversies Involving Government Acquisition of Trade Secrets through Cyber Technologies’ (ASIL, March 20, 2013, Volume 17, Issue 10), Fidler points out that while a victim country, and presumably company as well, could assert that spying violates the principles of sovereignty and non-intervention, state practice has, probably unfortunately in my view, has accepted state-sponsored espionage to the extent that such appeals may not be regarded as serious or sufficient claims, standing alone.

Although cyber espionage is sometimes described as “cyber attacks” and “cyber-war,” Fidler identifies no government that regards cyber espionage as constituting a prohibited use of force. Other bodies of international law under which espionage issues arise, such as rules on armed conflict and/or with respect to diplomatic relations in periods absent a declaration of war, do not prohibit or necessarily constrain espionage, or economic espionage in particular.

Many Countries Obviously Prohibit Economic Espionage…

Many countries prohibit economic espionage under (their own) national law. However, enforcement of such laws may present challenges because the specific elements of economic espionage include foreign government participation. Using extradition or mutual legal assistance treaties proves ineffective also, especially says Fidler, when the requested state is accused of sponsoring criminal acts, i.e., economic espionage.

Is there a possible role for TRIPS…

The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) of the World Trade Organization (WTO) requires each WTO member to protect, within its territorial boundaries, certain types of intellectual property rights, including trade secrets.

Some have argued that the U.S. should use protections enunciated in international trade law regarding intellectual property against countries engaged in economic (cyber) espionage. As readers already know, private sector enterprises engaged in trade and investment agreements and/or transactions have used international law to safeguard their intellectual property rights.

However, WTO members have, to date, shown little or no interest, according to Professor Fidler, in addressing economic espionage within the constructs of WTO, despite mounting concerns.  One reason is that WTO members have not used WTO-based strategies, the reason, Fidler says, lies in the difficulty of successfully formulating a claim that economic espionage actually violates WTO agreements.

WTO rules impose obligations on WTO members to fulfill within their territorial boundaries. That is, WTO members that engage in economic espionage, i.e., covertly (illegally) obtaining intellectual property and other forms of intangible assets of other WTO members which operate companies within that countries’ territorial boundaries could be in violation of those WTO obligations.  No prudent business person should exhibit naiveté  about such obligations.

Even if a WTO member could construct what may become a successful claim that economic (cyber) espionage violates a WTO rule, it would have to establish that another WTO member’s government is responsible for the act. Usually, Professor Fidler argues, establishing governmental responsibility for challenged acts is not difficult, but WTO cases have generally not involved accusations regarding state-sponsored economic (cyber) espionage. It is not clear, Fidler suggests, whether a WTO (nation, government) member could successfully satisfy such a burden by relying solely on evidence provided by the private sector victim, e.g., Mandiant’s report without revealing any existing counter-intelligence tradecraft that may be in place.

Far too much time focused on naming the culprits…

Far too much time, in my view, has been focused on identifying and naming who the (economic espionage) culprit countries are, with far too little attention and resources from private sector companies on designing, incorporating, and executing effective strategies to combat it.  Let’s say, for instance, we accept Mandiant’s report in full, along with the annual report by the Office of the National Counterintelligence Executive, and various other reports citing China as the single most aggressive economic (cyber) espionage adversary.

I am quite confident readers of this blog are pragmatists.  That is to say, we would be very surprised to learn of a company that would elect to cease operations and/or business transactions in a country with 1.2 billion+ potential consumers!  Just don’t see that happening!

(A special thanks to David P. Fidler, Professor of Law at the Indiana University and a Fellow at I.U.s Center for Applied Cyber-security Research and member of the American Society of International Law for his fine article titled ‘Economic Cyber Espionage and International Law: Controversies Involving Government Acquisition of Trade Secrets through Cyber Technologies’ (ASIL, March 20, 2013, Volume 17, Issue 10) that inspired this post.)

Islamic Law and Intellectual Property

January 24th, 2014. Published under Intellectual Property Rights, Islamic IP. 2 Comments.

Michael D. Moberly    January 24, 2014    ‘A blog where attention span really matters.’

Admittedly, I am not an expert in Islamic law, particularly those aspects which pertain to intellectual property and other intangible assets.  I do however, possess a very genuine desire to learn key practicalities 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 Islam as they are in non-Islamic  sectors.

After reading and studying numerous, primarily academic, papers on what I respectfully refer to as an emerging business necessity, much of this post, 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, I concluded however, numerous questions remain insofar as the actual application of Islamic law to IP (intangible asset) 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 conventional context.

Beltrametti’s paper further discusses the extent to which Islamic law has an impact on 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.

Very 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 suggestion in which a Sharia based (legal, intellectual property rights) system, is 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 additional insight and is certainly worthy of one’s time to read and study.

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, but
  • such laws are not being aggressively enforced, at least at the present time.  In other words, infringement and misappropriation, etc., in the Middle East, contributes to substantial losses of revenue for companies and/or individual business persons who rely – are dependent on intellectual property rights.

Obviously, it’s important and necessary to point out 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.  Thus, being a signatory to TRIPS essentially verifies (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.

The TRIPS agreement introduced intellectual property law into the international trading system for the first time and remains the most comprehensive international agreement on intellectual property to date. In 2001, developing countries, concerned that developed countries were insisting on an overly narrow reading of TRIPS, initiated a round of talks that resulted in the Doha Declaration. The Doha declaration is a WTO statement that clarifies the scope of TRIPS, stating for example that TRIPS can and should be interpreted in light of the goal “to promote access to medicines for all.”

Specifically, TRIPS requires WTO members to provide copyright rights, covering content producers including performers, producers of sound recordings and broadcasting organizations; geographical indications, including appellations of origin; industrial designs; integrated circuit layout-designs; patents; new plant varieties; trademarks; trade dress; and undisclosed or confidential information. TRIPS also specifies enforcement procedures, remedies, and dispute resolution procedures. Protection and enforcement of all intellectual property rights shall meet the objectives to contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations.  (Wikipedia)

In practice, however, intellectual property rights, be they TRIP’s initiated or otherwise, have respectfully, not been particularly well-received in some Islamic states.  That is, a percentage of the Islamic community believe the concept of intellectual property and the associated rights and responsibilities, particularly intellectual property-based innovations associated with advanced technologies, etc., originate predominantly in the West, and not from (their) religious sources.  This perspective. many agree, serves to elevate reluctance for a broader acceptance of intellectual property rights.

That said, 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.

Appropriately then, one question to pursue further is whether this is a government influenced choice or mandate, or an enforcement resource issue?  Taking this perspective several 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 perception has gained varying levels of strength within 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 all of this 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.  Admittedly, having not engaged in or consulted with companies engaging in business (transactions) is Islamic countries, I presume, as in any transaction occurring elsewhere, intellectual property and other forms of intangible assets will play a significant role.  Perhaps readers who are engaging in such transactions, they will find various other posts made at this blog to be relevant particularly those that address 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.

Islamic Law and Intellectual Property

August 17th, 2012. Published under Intellectual Property Rights, Islamic IP. No Comments.

Michael D. Moberly    January 24, 2014    ‘A blog where attention span really matters.’

Admittedly, I am not an expert in Islamic law, particularly those aspects which pertain to intellectual property and other intangible assets.  I do however, possess a very genuine desire to learn key practicalities 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 Islam as they are in non-Islamic  sectors.

After reading and studying numerous, primarily academic, papers on what I respectfully refer to as an emerging business necessity, much of this post, 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, I concluded however, numerous questions remain insofar as the actual application of Islamic law to IP (intangible asset) 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 conventional context.

Beltrametti’s paper further discusses the extent to which Islamic law has an impact on 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.

Very 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 suggestion in which a Sharia based (legal, intellectual property rights) system, is 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 additional insight and is certainly worthy of one’s time to read and study.

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, but
  • such laws are not being aggressively enforced, at least at the present time.  In other words, infringement and misappropriation, etc., in the Middle East, contributes to substantial losses of revenue for companies and/or individual business persons who rely – are dependent on intellectual property rights.

Obviously, it’s important and necessary to point out 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.  Thus, being a signatory to TRIPS essentially verifies (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.

The TRIPS agreement introduced intellectual property law into the international trading system for the first time and remains the most comprehensive international agreement on intellectual property to date. In 2001, developing countries, concerned that developed countries were insisting on an overly narrow reading of TRIPS, initiated a round of talks that resulted in the Doha Declaration. The Doha declaration is a WTO statement that clarifies the scope of TRIPS, stating for example that TRIPS can and should be interpreted in light of the goal “to promote access to medicines for all.”

Specifically, TRIPS requires WTO members to provide copyright rights, covering content producers including performers, producers of sound recordings and broadcasting organizations; geographical indications, including appellations of origin; industrial designs; integrated circuit layout-designs; patents; new plant varieties; trademarks; trade dress; and undisclosed or confidential information. TRIPS also specifies enforcement procedures, remedies, and dispute resolution procedures. Protection and enforcement of all intellectual property rights shall meet the objectives to contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations.  (Wikipedia)

In practice, however, intellectual property rights, be they TRIP’s initiated or otherwise, have respectfully, not been particularly well-received in some Islamic states.  That is, a percentage of the Islamic community believe the concept of intellectual property and the associated rights and responsibilities, particularly intellectual property-based innovations associated with advanced technologies, etc., originate predominantly in the West, and not from (their) religious sources.  This perspective. many agree, serves to elevate reluctance for a broader acceptance of intellectual property rights.

That said, 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.

Appropriately then, one question to pursue further is whether this is a government influenced choice or mandate, or an enforcement resource issue?  Taking this perspective several 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 perception has gained varying levels of strength within 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 all of this 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.  Admittedly, having not engaged in or consulted with companies engaging in business (transactions) is Islamic countries, I presume, as in any transaction occurring elsewhere, intellectual property and other forms of intangible assets will play a significant role.  Perhaps readers who are engaging in such transactions, they will find various other posts made at this blog to be relevant particularly those that address 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.

ACTA’s Rejection By European Parliment…Not The Presumptive No-Brainer…

July 23rd, 2012. Published under Intellectual Property Rights, Personal Privacy, Product counterfeiting.. No Comments.

Michael D. Moberly   July 23, 2012

Admittedly, I took somewhat of a passive approach to the passage of the Anti-Counterfeiting Trade Agreement (ACTA) by the European Union’s Parliament, earlier in July, because I believed it to be a ‘no brainer’.   Was I ever wrong!  In hindsight, I did not give the groundswell opposition the attention or credence it deserved and ultimately misjudged the influence such sustained, diverse, and intensive lobbying efforts would come to have on the EU Parliament.

Today, the ‘nanosecond communication environment’ contributes to fewer and fewer legislative ‘no brainers’ whether it is proposed legislation in the US or EU.  Subsequently, less can, and probably should, be assumed or taken for granted.

Certainly, there’s no argument that global product counterfeiting poses substantial adverse economic impacts to every industry sector, not just the music side.  Aside from the largely subjective, but nevertheless, increasing guesstimates of economic losses attributed to infringement, counterfeiting, and product piracy, it’s quite correct to portray each as now being an entrenched and extraordinarily lucrative  global industry that comprises substantial (and rising) percentages of many countries GDP, sources of employment and personal income, and manufacturing base.

So, every business today, whether it’s based in the EU or the US, is well advised to conclude that IP infringement, counterfeiting, and product piracy have moved well beyond merely being annoying probabilities to increasingly costly inevitabilities if left unchecked by either practice or laws.  (For additional perspective please see July 8th blog post titled ‘Intangible Assets and Counterfeit High-End Apparel).

But, that doesn’t appear to be the primary rationale behind the opposition that ultimately led to the rejection of ACTA.  Instead, opposition to ACTA, according to Chris Brogan, Managing Director, Security International, who has an extraordinarily experienced track record in such matters, points out that ACTA’s demise was largely due to it being framed as both a privacy and human rights issue.

Brogan says, no one should get the opinion that the European Parliament is not supportive of international efforts to curb piracy.  However, in large part due to the vagueness and breadth of ACTA’s intended coverage, privacy and human rights lobbyists felt that individuals and small businesses, as well as large commercial concerns, would be laid open to draconian legal measures of enforcement.

The privacy – human rights based opposition, Brogan says, evolve around three key issues…

  1. respect for privacy, i.e., many individuals share their choice in music, but not for commercial gain.
  2. freedom of expression which has to be balanced against any harm to another individual/organization, and interestingly,
  3. the right to a fair trial which opponents argued ACTA provided too much legal power to organizations to enforce their proprietary rights.

Brogan adds, as an experienced participant in privacy legal issues for 25+ years, “I understand the difficulty that non-Europeans have with Europe’s strong advocacy for strengthening the privacy laws, and presumably any legislation, which on its face, appears to limit or otherwise modify expectations of privacy”.  Brogan also points out that Europe’s previous experience with Facist and Communist states that purposefully curtailed citizen freedoms through (draconian) legislation and law enforcement remains an impetus to oppose legislation that contains language that could be interpreted as curtailing human rights and personal privacy.

Similarly, an official of a European institution stated that ACTA had been rejected due to the presence of a strong movement of concerned citizens who feared that their civil rights were in jeopardy.  In addition, this source described unprecedented lobbying by thousands of EU citizens in the form of street demonstrations, e-mails and calls to MEP’s and a petition, signed by 2.8 million citizen’s worldwide, urging ACTA’s rejection.  Even some, the source said, characterized ACTA as a new form of dictatorship in which authorities and companies would have too much control over the Internet and the possible restriction of access to generic medicines, if it were to be passed.

The European institution source goes on to suggest there is a growing and influential anti-EU movement in Europe today, one claim of which is that ‘Brussels is ruling everything’.  Both the European institution source and Mr. Brogan agree that ACTA’s language appeared vague, and thus susceptible to being misinterpreted.

Thus, in an environment where such strong sentiments exist regarding privacy and human rights, and having been confronted with a strong and like-minded public lobby, the EU Parliament overwhelmingly voted against ACTA. Proponents of ACTA suggest the MP’s vote was not based on facts, rather one on sentiment.

Still, Mr. Brogan and the European institution source agree a strong need remains to find alternative ways to protect intellectual property. And, in today’s increasingly irreversible knowledge-based global economy in which 65+% of most company’s value, sources of revenue, and ‘building blocks’ for growth and sustainability evolve directly from intangible (IP) assets, finding common ground whereby those assets are respected and accordingly safeguarded is critical!

China’s IP Transition and Explosive Growth In Innovation…How Much Of It Has Really Been Indigenous…?

May 16th, 2012. Published under Analysis and commentary, Business Transactions, Economic Espionage, Intellectual Property Rights. 2 Comments.

Michael D. Moberly    May 16, 2012

I recently read a National Bureau of Asian Research report titled, ‘China’s IP Transition: Rethinking Intellectual Property Rights in a Rising China’ and found it to be an insightful strategic window into China’s national intellectual property (innovation agenda) policy.

The reports’ executive summary and main argument reads as follows…

China’s drive to promote indigenous innovation has given IP its creation, utilization, management, and protection a prominent position in the nation’s policy agenda.

In conjunction with its ambitious policies to support indigenous innovation, China launched a major IP strategy in 2008 to support the creation, utilization, management, and protection of IP.

While I do not wish to dispute the thoroughness of the research which the reports’ authors obviously conducted and articulated so well, I do find the word indigenous disconcerting in the context of applying it as a broad descriptor of how China has achieved and intends to sustain its innovation strategy – policy agenda.

I was in China (Shanghai) in 2008 when that policy ‘went public’.  It was the lead story on (English language) CCTV for several days with extended segments devoted to showcasing various, presumably government sponsored, gatherings to convey awareness for this ‘transition to intellectual property’.  Most of the events appeared to be held in Beijing.  Interesting to me, in several of the CCTV stories, large scale education initiatives about intellectual property were being planned.

As most anyone knows who has visited China in this decade, one does not have to walk far in a city to see evidence of entrepreneurism and entrepreneurial thinking which could understandably be characterized as – assumed to be indigenous. However, my work, research, and writing on information asset protection and economic espionage issues for 25+ years influences me to suggest that the term predatorial is also a relevant and objective descriptor of – contributor to China’s innovation policy agenda.

It is not my intent that the term predatorial, as I have chosen to apply it here, be interpreted as anti-China!  Rather, I am merely suggesting the term predatorial should also be applied because of its indigenously embedded nature over a 3000 – 5000 year span of developing a (business) culture.  At minimum, the word predatorial serves as, at least, a partial explanation for China’s phenomenal and rapid business – economic – innovation growth which some western researchers – writers describe as the world’s largest and most rapid transfer of wealth.

After all, we do live and work in an increasingly knowledge (intangible) asset based global economy wherein 65+% of most company’s value, sources of revenue, and ‘building blocks’ for growth, wealth creation, and sustainability evolve directly from intangible assets, of which IP is just one.

I assume ‘indigenous innovation’ is a phrase Chinese policy makers carefully selected and cultivate.   But, I believe the term predatorial used to describe how countries supplant – achieve rapid growth in innovation is applicable to numerous global actors, not just China.

China, in my view, is now immersed in what I respectfully call the ‘third quarter of a generation that recognizes]/ private property, let alone intellectual property’.  But, in China, as in numerous other countries with communist – socialist legacies, there is virtually no intellectual property legacy to follow.  And, China, like many other countries, has countless ‘legacy free players’, a phrase I first saw applied in Thomas Friedman’s books.  While I am certainly not positioning myself to be an arbiter of Friedman’s work, I have consistently used this phrase in a context of describing various countries’ and actors who have yet to fully embrace and consistently practice what I  refer to as an ‘intellectual property rights protection and respect ethic’.

China is no doubt, moving in the right direction, with respect to intellectual property rights. But, it has a ways to go yet for me to broadly use the term indigenous to describe the paths and strategies they have taken to achieve the intent and spirit of the language found in their national innovation agenda.

I encourage all those interested to read the report and draw their own conclusions at…

www.nbr.org/publications/element.aspx?id=520.

IP (Intangible) Asset Theft-Loss: Sobering Business Realities!

April 11th, 2012. Published under Economic Espionage, Intangible asset protection, Intellectual Property Rights, Trade secrecy.. 2 Comments.

Michael D. Moberly    April 11, 2012

Let’s be clear, I am not advocating a protectionist view here.  I am however, a strong proponent of Article I, Section 8 of the U.S. Constitution that states (paraphrased), ‘if one invents a new product and/or technology, etc., and has been issued a patent, trademark, or copyright by the U.S. Patent and Trademark Office (USPTO) they, and only they, should reap the economic benefits from their efforts’.

Once IP has been issued, the holder essentially has the sole responsibility for sustaining the much coveted exclusivity and executing the necessary protections, which frankly, are dependent on numerous factors, but primarily whether the IP holder:

  • consistently engages in best practices to effectively safeguard their IP, and
  • has the resources to consistently monitor  and aggressively (legally) pursue any attempts to misappropriate, infringe, or steal their IP.

A very relevant business reality for IP holders to consider is that not all cultures, countries, or individuals embrace or interpret the largely western dominated view regarding IP exclusivity.

For example, in McAfee’s (2009) report titled ‘Unsecured Economies: Protecting Vital Information’, the subject matter experts who responded to the survey agreed (not surprisingly) that if an enterprise (country, company, organization, etc.) can (illegally) appropriate R&D for example, at minimal cost compared to legitimate competitors and then go on to produce a comparable product (albeit it a product developed from infringed IP) at a far lower cost, basic economics dictate that the manufacturer of the (infringed) product will, in fact, win space in the marketplace.

Thus, the global incentives for state sponsored, companies, or individuals to engage in industrial – economic espionage, i.e., appropriate others’ intellectual property, remains high, particularly in markets (countries) where:

  • there are few, if any, well established brands and corresponding consumer (brand) loyalty, and
  • there is an abundance of ‘legacy free players’ (Thomas Friedman) in which private property ownership remains a relatively new concept as does the ownership of intellectual property..
  • the business transaction environment is ultra-aggressive, competitive, predatorial, and winner-take-all.

While the realities conveyed above are well understood within the information asset protection community, there remain a significant number of companies that express an attitude of dismissiveness, not only about IP risk, but developing effective policies, procedures, and practices to mitigate this global and costly reality.

Too, many companies still do not have an integrated (enterprise-wide) approach to address the persistent challenges associated with IP theft, infringement, and/or misappropriation, which minimally requires…

converging the expertise of information asset protection, HR, IP counsel, IT security, risk management, marketing, and R&D as a starting point to address c-suite fiduciary responsibilities for ensuring control, use, ownership, and value of a company’s intangible (IP) assets are sustained for the duration of their respective value and functionality cycle.

 Of course, to achieve this on any semblance of consistency, it’s absolutely essential today that:

  • there is an on-going dialogue among a company’s various professional disciplines regarding risk to IP assets
  • each disciplines’ perception of (IP) risk will be recognize
  • consensus is reached on what actions (policies, procedures, practices, etc.) are necessary to prevent, deter, and/or mitigate the risk.

While visiting  my blog, you are respectfully encouraged to browse other topics/subjects (left column, below photograph) .  Should you find particular topics of interest or relevant to your circumstance,  I would welcome your inquiry at  314-440-3593 or m.moberly@kpstrat.com

Faculty Inventors: Transferring Valuable Intangible Assets and IP To Countries With Weak Intellectual Rights

December 6th, 2011. Published under Enterprise risk management., Fiduciary Responsibility, Intangible asset protection, Intellectual Property Rights. No Comments.

Michael D. Moberly   December 6, 2011

In the current intangible asset – IP dominated (knowledge-based) global economy and business transaction environment, there is, unfortunately, little insight about how or whether those assets can be adequately safeguarded when filing patents and the subsequent invention exposure (public disclosure) in countries with weak and/or non-existent enforcement of intellectual property rights (laws).

This subject is rapidly becoming routine action items on c-suites and boardroom agendas globally as a fiduciary responsibility, not just for mega-multinationals, but very much relevant to small, medium-sized enterprises, start-ups, and university-based spin-offs as well.  

The subject is often presented as if most asset exposures/vulnerabilities are already known and the probability that a company (asset owner/holder) will incur a significant and irreversible loss, i.e., in the form of value, market share, competitive advantages, etc., due to infringement, theft, and/or counterfeiting is merely a risk of doing business.  I don’t subscribe to this view!

One key question every technology transfer manager, entrepreneur, start-up company, and university spin-off management team should ask is at what point (timing) will the risks and potential for disputes and challenges (i.e. vulnerabilities) to a company’s intellectual properties and intangibles, if left unchecked in the globally predatorial and winner-take-all R&D and business transaction environment, become inevitabilities? 

Other key questions to consider (factor) include:

  • what is each parties tolerance for risk and/or loss to their IP and intangible assets?
  • if IP – intangible asset losses and/or compromises occur, how quickly will the adverse effects be felt, i.e., asset value, market share, competitive advantages, and revenue streams, etc.

In other words, if a country’s IP rights protections and enforcement is so weak or non-existent to the point inventions – technologies cannot be satisfactorily safeguarded throughout their life-value cycle; how should those issues be factored into the invest – don’t invest equation? 

This argument of course presumes that the value, sustainability, defensibility, and projected returns of IP and intangibles developed and/or brought into a country with weak IPR’s, will experience lower projected returns.

There are a growing number of instances, in which companies have actually elected to withdraw operations and their intellectual property from country’s found to be especially weak in intellectual property rights enforcement.  It’s difficult to ascertain whether those firms action to  exit a country to protect its IP were exercising and overly risk averse strategy or whether the decision was influenced by a single (significant) loss or compromise of their IP?

That said, a 2004, University of Minnesota study/survey of U.S. headquartered companies titled ‘Doing R&D In Country’s With Weak IPR Protection: Can Corporate Management Substitute For Legal Institutions?’ reasoned that:

  • technologies developed in weak IPR countries will be used more for internal purposes
  • companies conducting R&D in weak IPR countries will likely have tighter IP-asset protection measures in place to compensate

Transferring faculty generated research (technologies, intellectual property, intangible assets) to countries with weak intellectual property rights protections is an important consideration, not to be taken lightly by faculty researchers-inventors and university technology transfer managers. Substantive questions to consider are:

  • if the decision is made to conduct IP bearing R&D and/or bring IP into a country in which a significant percentage of that country’s GDP is linked to – dependent on the production, distribution, and sale of infringed or pirated (IP) products, it’s likely the newly introduced IP will experience the same or similar fate?
  • the presumption that any faculty researcher can invent and produce intellectual property faster than economic and competitive advantage adversaries can steal or infringe it or be dismissive or nonchalant when it does occur because of its presumed the technology/IP will incur rapid obsolescence and therefore hold little, if any, market value, why devote resources to its protection and preservation, beyond the minimum?.
While visiting/reading my blog, you are encouraged to browse other topics/subjects (left column, below photograph) .  Should you find particular topics of interest or relevant to your circumstance,  I would welcome your inquiry at  314-440-3593 or m.moberly@kpstrat.com

University – Corporate Research Consortiums: Are More Safeguards Necessary…

November 21st, 2011. Published under Corporate - University Research, Intellectual Property Rights, University R&D. No Comments.

Michael D. Moberly    November 21, 2011

Within the university research community, there remain spirited and polarizing debates about the openness in which research is conducted, that is, the freedom and ability of faculty researchers to disseminate, communicate, collaborate, and publish at will, which incidentally, have long been recognized as the hallmarks of university-based research.

On one side of that debate stand those who favor retaining the long legitimated hallmarks of academic freedom. On the other side of the debate stand those who encourage safeguards be put in place to limit, set parameters for, if not prohibit some of the at will or discretionary freedoms conveyed in the former view.

There’s nothing particularly new about these opposing views. They have been espoused in essentially the same context since the 16th century. Experience suggests there is little middle ground on which to frame a consensus, bar one. That is, to dispassionately factor into the university-corporate research protection equation the realities embedded in today’s hyper-competitive, predatorial, and winner-take-all global R&D environment.

This can be particularly interesting in instances in which faculty generated research and/or an inventions produce special insights and findings that lead to valuable (business) competitive advantages that may extend not just to the primary corporate (research) sponsor, but eventually to other companies in that industry sector.

So, a key question for corporate – university research collaborations are the above realities sufficiently persuasive to ensure the inclusion of information asset safeguards to mitigate university generated data/research be overly vulnerable to theft, infringement, or compromise stemming primarily from sophisticated state sponsored global business intelligence collection operations.

These are acts which, if even reasonably successful will most certainly dilute if not irrevocably impair the research’ strategic value to the inventor and research sponsor. It can also allow competitors (globally) to gain substantial advance insights to permit them to achieve economic, competitive, and market entry advantages.

Walk me through-a-day-in-the-life of university research…An analogy may be useful as a potential starting point to advance this principled tug-of-war. For example, when company representatives go before a venture capital firm to seek funding, one of the series of questions (scenarios) a venture capitalist (VC) will invariably pose to obtain a better sense of the usefulness and viability of the product or service being pitched. Routinely, they will ask a company representative to ’walk them through’ a-day-in-the-life of a (target market) company in which the product or service being pitched is not currently in use.

The VC’s follow-up questions will then be framed as:
• is there a noticeable difference?
• will the company be better off?
• if so, what and how will those differences manifest and are they exploitable insofar as delivering economic and/or competitive advantages to benefit the company?, i.e., to become more profitable?, gain/retain customers?, create efficiencies?, improve morale?, etc.

It’s conceivable that a comparable, but objective and dispassionate ’walk me through a day in the life’ approach would be useful to advance the time honored academic freedom debate about faculty generated research and inventions.

Key (objective) questions that could be posed then to a faculty researcher such as:
• consider their ability to sustain unchallenged control, use, ownership, and value of their invention throughout its value-life cycle
• what does the researcher, research sponsor, and the university consider to be minimum foundation(s) for retaining viable options for (future) licensing and/or technology transfer?