Protection of IPR---Only Enforcement

Li ’23 [Yon; 2023; lawyer at Henan Shilin law firm; Science of Law Journal, “Analysis of the Status Quo of Intellectual Property Protection in China in the Era of Big Data,” Vol 2, No. 5]

In order to implement the specific work of intellectual property protection, the state and government must put forward the corresponding protection mechanism, which fully reflects the importance attached to intellectual property protection. Therefore, the government and judicial departments should update and improve the relevant laws in light of the actual situation. For example, from the perspective of patent law, works law, etc., the protection of intellectual property rights is clearly defined. Count the related infringements, and formulate corresponding punishment measures for these infringements, and further improve the judicial supervision system, so that the owners and beneficiaries of intellectual property rights can be protected by law [4]. In addition, to improve the relevant professional protection system, we need to mobilize various forces. These forces mainly reflect the state's emphasis on intellectual property protection. As long as the government and the state take corresponding measures, people's awareness of safeguarding rights can be raised. This fundamentally ensures that the owners of intellectual property rights can constantly innovate in the process of practice and actively research and develop technology projects that are beneficial to national development. Thus, the support and protection of the law is the basis for promoting the progress of science and technology, and it is also an authoritative means. As a researcher in the new era, we should not only pay attention to the research and development of technology, but also learn to protect our legitimate rights and interests by legal means. Only in this way can we build a good technology research and development system and play an important role in intellectual property protection. In addition, the state and the government should combine with individuals to fully raise the awareness of individual rights protection, so that people can have no worries in innovation and ensure the smooth progress of all work in China.

Most attempts to define ‘IPR protections’ define them as formal, legislative rules.

Papageorgiadis ’19 [Nikolaos and Frank McDonald; 2019; Professor (Chair) of International Business, University of Liverpool; Journal of International Management, “Defining and Measuring the Institutional Context of National Intellectual Property Systems in a post-TRIPS world," Elsevier, Vol. 25(1)]

1. Introduction

In this paper we identify and review forty IP indices used in empirical studies to approximate for the effects of the quality of national IP systems.1 We demonstrate why the transformed IP contextual landscape that emerged after the implementation of the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement requires clearer and more focused theoretical and empirical approaches in the use of these indices to measure the effects of IP Law on the books and IP Law in practice.2 As we illustrate in Section 2, we identify and highlight two new types of IP systems that emerged after the implementation of the TRIPS agreement (FT, 2015; USTR, 2015). The first new category relates to countries offering IP systems with high quality Law on the books but low quality Law in practice. The second includes countries which have poor quality Law on the books but high quality Law in practice. The existence and effects of these two new categories of the post-TRIPS international context of IP systems on international management have not been theoretically and empirically identified and tested in studies to date. This is mainly due to path dependency based on pre-TRIPS studies (researchers relying on the use of an IP index that previous international management authors in the literature also used to study the pre-TRIPS context) and the inadequate consideration of the distinct characteristics and exact qualities of the existing IP indices available. Therefore, existing studies in the international management literature use IP indices in a way that does not actually provide a relevant or appropriate proxy for studying the post-TRIPS context of international IP systems (Arora, 2009; Maskus, 2000). A large number of studies, for example, use the index of patent systems strength by Park (2008) to proxy for the overall effect of the quality of protection of Intellectual Property Rights (IPR). This index focuses however purely on the availability of patent Law on the books and does not account for the effectiveness of patent Law in practice in a country (Brander et al., 2017; Maskus, 2004).

This paper makes two contributions to the literature, which can help international management researchers consider the effects of the post-TRIPS landscape of IP systems and select the most appropriate indices to capture their effect. First, using the concepts of Law on the books and Law in practice, we identify and explain how two new contextual categories of IP systems evolved in the post-TRIPS landscape. This contribution enables researchers to consider these new contextual types of IP systems and tailor their theoretical frameworks and empirical approaches to explore how the two existing and the two newly identified categories of IP systems affect international management. Second, we review and analyze forty indices that measure the quality of different aspects of IP systems. We analyze the key characteristics of the IP indices and provide clear recommendations to researchers on how to select the most suitable indices to capture more accurately the exact categories of IP systems used in their theoretical models. This contribution can help researchers to avoid unintended empirical problems such as omitted variable bias when using IP indices that do not appropriately proxy for the actual post-TRIPS context of IP systems. An example of the usefulness of these two contributions is a researcher seeking to examine the major risks to the IPR of Multinational Enterprises (MNE) from the international transfer of knowledge. This requires assessment of the institutional distance in terms of the qualities of Law on the books and Law in practice in host countries. This needs: a) the development of an appropriate theoretical framework that accurately reflects the post-TRIPS institutional context of countries and b) the selection of suitable indices that provide appropriate proxies for Law on the books and Law in practice in host countries. The contributions of this paper therefore help to improve understanding of the key factors that need to be considered when researchers theorize and empirically study the potential effects of different categories of IP systems on the IPR of MNEs. The paper also provides help in selecting appropriate indices to proxy for the quality of IP systems.

Section 2 of the paper discusses the contemporary context of IP systems and identifies four categories of IP systems that emerged after the implementation of TRIPS. Section 3 reviews the existing literature that developed indices measuring the quality of IP systems and provides recommendations on how to best utilize the existing indices in empirical studies. Finally, Section 4 discusses the theoretical and empirical implications of this study and recommends future research directions.

2. The evolution of the context of IP systems after the TRIPS agreement

The evolution of the quality of national IP systems over the last 20 years was strongly influenced by the World Trade Organization (WTO) and the TRIPS agreement reached during the 1986–1994 Uruguay round of negotiations. The aim of the TRIPS agreement was to introduce minimum standards of IP law and thereby reduce the obstacles to protecting IPR in cross-country economic transactions. The TRIPS agreement set out clear obligations on WTO members to provide clear and appropriate IP law. The TRIPS agreement did not however set obligations regarding the effectiveness with which IP law should be applied in practice.3 Together with the international co-operation efforts of the World Intellectual Property Organization (WIPO), the TRIPS agreement requires and supports countries to develop more balanced and effective IP systems. This has led to the strengthening of IP systems across most countries (Taubman et al., 2012).

The signing of the TRIPS agreement in 1995, and its implementation by all developed and most developing countries by the year 2000, significantly changed the characteristics of national IP systems (Taubman et al., 2012). Legal systems that impact cross-border transactions have two distinctive components: a) Law on the books and b) Law in practice (Halliday and Carruthers, 2007). The availability of IP law conferring property rights and formal legal process for enforcement as these appear in the statutes of a national jurisdiction is IP Law on the books, whereas the effectiveness with which third party governmental institutional actors in a country enforce allocated property rights is IP Law in practice. In most countries, TRIPS changed the context of these two institutional underpinnings of IP systems.

The breadth and scope of law on IP has expanded over the last two decades across most countries (Park, 2008) leading to a narrowing of differences in the qualities of national IP systems in terms of Law on the books. Significant variations in the Law in practice however still exist because of the way that IP laws are enforced by third party governmental institutional actors (Khoury et al., 2014). This is because the breadth and depth of law on the books in a country does not necessarily lead to the effective enforcement of the Law in practice (Keupp et al., 2012; Khoury et al., 2014; Yang and Sonmez, 2013). Countries that signed the TRIPS agreement agreed to introduce new IP related laws in order to provide a harmonized minimum level of formal legal protection for IPR. Expanding and strengthening Law on the books can be achieved by legislative reforms; however, the effective enforcement of the new Laws in practice is more difficult to achieve. Indeed, while changing formal institutional systems can normally be achieved relatively quickly, changing informal institutions is a slow process (Khoury et al., 2014; North, 1990, North, 2005). Informal institutions are embedded in the norms of behavior and the social protocols used by governmental institutional actors that enforce IP laws. If these informal institutions (Law in practice) do not legitimize and support changes to formal institutions (Law on the books), problems with effectively protecting IPR can emerge. It is therefore possible that the formal and informal institutions comprising the IP system of a country can be incongruent. In some societies, informal institutions dominate the rules of the game, leading to outcomes from human transactions that are largely determined by the norms of behavior and social protocols used by economic actors (Helmke and Levitsky, 2004; Ostrom, 1990). In some countries the new IP laws introduced after TRIPS are therefore often not aligned with suitable norms of behavior and social protocols of institutional agents engaged in the enforcement of IPR (Dunning and Kim, 2007; Yang and Sonmez, 2013). In other words, the implementation of TRIPS resulted in minimum requirements for Law on the books, but did not guarantee appropriate Law in practice that ensures effective enforcement.

The effectiveness of the enforcement of Law in practice depends on the norms of behavior and social protocols used in public and private agencies including the judicial system, police, customs and excise agencies that are involved in the actual enforcement of IP (Keupp et al., 2010; Yang et al., 2008). The evolution of new norms of behavior by key actors is a slow process and may not be conducive to efficient economic transactions (North, 1990). In such cases, Law in practice can exert adverse influence on the capacity of a firm to enforce its IPR (Hillman and Keim, 1995; Yang and Sonmez, 2013). Many emerging economies such as China have recently expanded the availability and scope of Law on the books, but the enforcement of the Law in practice remains problematic because most governmental institutional actors: a) do not consider IP violations to be a priority problem, b) lack suitable underpinning by norms of behavior, and c) follow enforcement procedures which operate under social protocols that are closed or hard to access by foreign firms. These behavioral factors increase the costs and risks associated with protecting IPR (Li and Zhang, 2007; OECD, 2009; USTR, 2015).

Even if that’s not ideal, it’s the most common and predictable method of definition.

Papageorgiadis ’19 [Nikolaos and Frank McDonald; 2019; Professor (Chair) of International Business, University of Liverpool; Journal of International Management, “Defining and Measuring the Institutional Context of National Intellectual Property Systems in a post-TRIPS world," Elsevier, Vol. 25(1)]

The importance of norms of behavior and social protocols used by governmental institutional actors related to enforcement is highlighted by Erick Robinson, chief patent counsel for Rouse, an international law firm specialising in IP. According to Mr. Robinson (FT, 2015), “The Chinese government's new specialised IP courts now provide companies with an enforcement mechanism comparable to, if not better than, those in Europe and the US (…) but not all patent owners should rejoice (…) first, companies must have friends in China. In a country where everything is based on relationships, every company must have multiple levels of relationships with both government officials and influential Chinese industry leaders…”. This quote illustrates the importance of how effective protection of IPR in some locations depends not only on clear and extensive Law on the books, but also on understanding norms of behavior connected to Laws in practice. This requires an understanding of the norms of behavior of agents involved in enforcement and being embedded in complex social protocols that influence how Law in practice works. Effective protection of IPR therefore requires Law on the books and Law in practice to work in a complementary way and be available to all IP right holders regardless of their country of origin. In this context, liability of foreignness connected to IPR arises from misunderstanding behavioral aspects of key agents that enforce the Law in practice (Khoury et al., 2014; Orr and Scott, 2008).

The review found twenty-one indices with the potential for use as proxies for the measurement of the quality of Law on the books (see Table 1). Most of the measures focused on capturing the availability and scope of Law on the books provisions for different types of IP such as patents (e.g. Bosworth, 1980; Evenson, 1990; Ginarte and Park, 1997) copyright and trademarks (Reynolds, 2004), trade secrets (Lippoldt and Schultz, 2014), plant varieties (Campi and Nuvolari, 2015), and TRIPS (Hamdan-Livramento, 2009). In addition, some studies developed measures that capture the availability of Law on the books provisions related to specific industries such as the pharmaceutical industry (Liu and La Croix, 2015; Pugatch, 2006). Two studies focused specifically on measuring the availability of Law on the books provisions related to the administration process of patent applications as carried out by national patent offices (de Saint-Georges and de la Potterie, 2013; Yang and Sonmez (2013).

The methodology followed to quantify and calculate the IP index scores is almost identical for all twenty-one studies, that is, by counting the availability (or not) of certain Law on the books provisions using dichotomous variables. Once a specific IP law is introduced in a country, it is documented in the book-law provisions and becomes available to the public, allowing researchers to collect longitudinal information about the availability (or not) of a particular law. Existing studies therefore measure the availability (1) or not (0) of Law on the books provisions, the sum of which constitutes the overall score of each index. Given that data on Law on the books is extensively available in the legal literature, indices measuring IP Law on the books are able to cover extended time periods and develop scores for a large number of countries.

There is a possible internal validity problem with many of the existing studies because of conflating the availability/scope of laws with the measurement of the quality of law on the books. Current indices focus on the measurement of the extent of availability of IP law provisions in a given country. An inherent assumption in these approaches is that higher numbers of legal provisions related to the IP regulatory system of a country indicate a system with good quality Law on the books. The number of IP related legal provisions however does not necessarily reflect good quality Law on the books. First, using the example of software patentability that was incorporated in the latest update of the Park (2008) index, IP systems that do not provide patent rights to software inventions are not necessarily deficient or lower quality to the ones that do. This is because according to WIPO (2015) “In many countries, computer programs, whether in source or object code, are protected under copyright. The major advantage of copyright protection lies in its simplicity. Copyright protection does not depend on any formalities…”, “…international copyright protection is automatic - it begins as soon as a work is created. Also, a copyright owner enjoys a relatively long period of protection, which lasts, in general, for the life of the author plus 50 or, in certain countries, 70 years after the author's death…”. This suggests that while certain legal provisions (that comprise the indices in the literature) may not be present in a country, the legislative system of the country may in fact assign and protect IP rights with alternative legal provisions. Second, the availability of a high number of legal provisions in a country that are (potentially) unclearly specified, could lead to a dysfunctional IP law statute that IP owners may find difficult to navigate and operate in. In contrast, a country that has a low number of IP laws which are clear and useful may be preferred by owners compared to the system of a country that incorporates a high number of Law on the book which are however of questionable usefulness. This is because the characteristics of relevant laws determine the quality of Law on the book in a country. Measuring the quality of Law on the books in terms of the characteristics such as clarity and ease of use of law would therefore provide a more accurate approximation of the quality of these laws. These problems can lead to attributing a high or low quality classification to the Law on the books without due reflection on whether the number and types of laws accurately capture the quality of the regulatory framework.