"Can anybody tell me the" Role of Human Resource Development in creating a culture for Innovation and Protecting Intellectual Property".As we all know that the Intellectual property is an intangible asset of a company. In order to protect this intangible asset what HRD initiatives or the proactive measure are to be taken , rather than resorting to legal methods. Although legal remedies are available, but they are time consuming and the damage might have been done by the time legal process is completed"
In this article, I will write about what is Intellectual property? And then go into ways of protecting intellectual property. As the question was to know if there are any process/procedures to protect one’s IP without resorting to legal means, I will concentrate on that first, and then deal with legal means. Since the subject is so vast, I cannot cover all the aspects of protecting an IP in this article, Instead I will just go over the main points only. There are several books that have been published on protecting IP - I have listed my favorite set of books in this topic. This article does not go into depths of IP protection laws. IP protection laws vary from country to country and different IP’s are governed by different IP laws.
What is Intellectual Property?
Intellectual property is a general term which applies to all the creative ideas generated by any individual. This includes invention, discovery, writings, paintings, music, films, garments, drama/plays etc.. Intellectual property also applies discovery of new items: life forms, materials, laws of physics, chemistry, mathematics etc..
WTO defines it as: "Intellectual property rights are the rights given to persons over the creations of their minds. They usually give the creator an exclusive right over the use of his/her creation for a certain period of time."
In short intellectual property includes all original ideas. However, the basic public policy has distinguished intellectual property into three parts:
- Protected IP
- Public domain IP
- Private IP
Public Domain IP
Human civilization has always advanced by sharing knowledge. Thus the fundamental philosophy towards intellectual property is to make it a public knowledge which can be shared openly and freely with all citizens. For example, works of Shakespeare or Kalidasa or as simple works such as this blog are public domain IP. This means that others can copy, modify and use these works in anyway possible.
Protected IP
However, to encourage innovation and to incentivize creative individuals - the concept of protected IP came into being. The rationale for the protection of intellectual property is to facilitate and encourage the pursuit and disclosure of innovation into the public domain for the common benefit, by granting authors and inventors exclusive rights to exploit their works and invention for a limited period. Once the period of protection lapses, the IP becomes a public domain IP. Almost all countries have formulated various laws to protect IP, and these laws have to be according to WTO rules. However, IP protection laws vary from country to country and the implementation of IP protection laws vary greatly between nations.
WTO classifies IP into different categories:
- Copyright
- Geographical indication
- Industrial design rights
- IP cores used in electronic design
- Moral rights
- Patent
- Personality rights
- Plant breeders' rights
- Plant variety protection
- Trade dress
- Trademark
- Trade secret
- Traditional knowledge
- Domain Name
I will describe the types of IP and its implications in the future articles.
Private IP
Private intellectual property refers to all IP which is not publicly disclosed nor are these protected by the existing IP laws of any nation. Private IP refers to intellectual property which is developed but it is kept out of public knowledge. Military secrets - such as designs for a fighter plane, a battle tank etc.. are all examples of private IP.
Private IP is probably the oldest and the best form of protection offered to any intellectual property. Even today, a vast portion of IP is in the private domain - owned by governments, individuals and corporations. The best example of private IP owned by a corporation is Coca Cola - the recipe of Coca-Cola is a company secret. It is an private IP owned by Coca-Cola corp.
In the past - for several centuries, people, societies were very reluctant to share any IP. Medical science was one such profession where knowledge was shared only among a select few and this enabled these individuals to exert high levels of influence and power over the society. Similarly, few communities protected their knowledge in weaving, metallurgy, engineering etc..
The biggest disadvantage of private IP is that it can be stolen or copied or reinvented by others. Once others have copied it or independently developed it, the original owner cannot claim any exclusive rights or protection for his IP. History is full of such examples where one managed to steal the secrets or copy other’s ideas. For example - during the cold war, Soviet Union and United States engaged in spying over other’s research and development efforts. They copied off each other designs or re-engineered other’s innovation etc.. Soviets designed their version of space shuttle ‘Buran’ by seeing the American Version. See the familiarity in the picture.
Protecting Private IP
The oldest means of protecting any IP is to make it private. By making it a trade secret, a company can protect its IP. Coca Cola, Pepsi Cola, Fruto Lays, etc.., have made their products a company secret. Thus others cannot copy it. ( at least in theory)
Steel manufactures, chemical manufacturers etc. have developed their own unique processes to improve productivity - but these are made as company secrets and are not shared with public.
However, the modern technologies and trade rules makes it difficult to keep a company secret for long. Competitors can reverse engineer any product and know the material constituents and the process of creating it.
Industrial espionage - the act of stealing industrial/corporate secrets can cause huge losses to the original owner of the IP. However, the owner of a private IP cannot claim any legal protection against industrial espionage because these IP’s are not publicly disclosed. For example, the development of the Tupolev Tu-144 supersonic aircraft, with its rapid design and similarity to Concorde, was one of the most prominent examples of industrial espionage in the 20th century
The only protection offered to private IP is that the pirate can be held liable for breach of various laws other than IP theft - like trespassing, breaking-in etc.. The recent HP spying case makes a good example of protection against industrial espionage.
Stealing company secrets or confidential information is illegal in most countries. For example in India, stealing company secrets or confidential information is a crime punishable with a 5 year prison sentence.
However, in most country laws, the burden of proof lies with the accuser - i.e., the company or the organization must prove that the individual or organization in question has indeed stolen its IP. This implies that the company seeking protection to its IP’s must prove that the IP in question was indeed a company secret and it has taken serious efforts to protect its secrets and the accused had indeed stolen that information. The challenge in these cases is that the company must disclose more of its IP in the court to prove that the IP in question was indeed its own secret. The possibility of disclosing more of company secrets makes it unattractive to pursue a legal solution to protect its private IP.
The original question was basically on how one can protect an IP without resorting to legal means. The best way to do that is to make that IP private - or at least make most of the IP private. Private IP allows for exclusive rights for an infinite time.
Culture and Innovation Protection
Just like innovation is greatly dependent on the culture: National culture, Corporate culture, and Individual culture. Protection of IP is also highly dependent on culture.
Before advent modern intellectual property rights, there were only socially-enforced systems for protecting intellectual works. Society considered it a taboo to copy other’s works. Plagiarism was strongly criticized and condoned.
If a culture encourages innovation, then that society knows the dangers of plagiarism. An example in wikipedia shows the link between culture and IP protection: "..customary code of non-infringement used by clowns to recognize each performer's exclusive right to their unique style of makeup, costume and persona. The universality of "The Code" supports the belief amongst clowns that this traditional protection is more effective than that provided by trademark and copyright law."
I have worked in Silicon Valley companies and these are highly innovation oriented companies. Here, the general culture is to innovate and protect that innovation. In the similar vein, IP protection is also ingrained into the work culture at these companies. The common practices are:
All employees are trained in company’s security policies. These training programs are repeated at regular intervals to reinforce and change the employee culture.
- Employees are trained in IP protection laws: patents, copyrights etc..
- Employees are encouraged not to violate patents/IP of other companies
- All internal documents are marked ‘confidential’ or ‘secret’ or ‘top secret’.
- Employees are encouraged not to talk about their projects with others outside the company
- Employees are encouraged to file as many patents as possible
- All confidential documents are stored and managed in a central server
- Employees are encouraged not to carry a copy of these documents in their laptops, instead all employees are given remote access to the corporate network via VPN
- Paper shredders are placed in all work places to encourage destruction of confidential papers & printouts
- Documents are classified into different categories of secrecy: Top Secret, Secret, Confidential etc.. The access to these documents are controlled - and copying/printing of these documents are prevented. In some companies, the top secret documents are printed only by a central document administration office and is sent to employees who are requesting it. These documents come with a color coded binders which indicate the level of secrecy. These documents are tracked closely so that any loss of documents is noted immediately.
- A random & a routine data protection audit is carried out to check how the employees are protecting the company data.
- Meetings are held behind closed doors and casual meetings in corridors are strongly discouraged.
- Breachs/Violations in company secrecy policy or data protection policy are dealt with immediately and adequately. A severe loss or breach of information may result in dismissal of an employee.
These IP protection policies are uniform all over the organization irrespective of the countries - this reinforces the company culture.
Companies have to build a culture of IP protection via series of policies, training programs and leadership demonstrations. Practices mentioned above are done on daily basis by all employees - this reinforces a culture of IP protection within an organization.
Other Means to Protect IP
Protecting IP also means preventing piracy. Controlling the technology used to copy or develop a product prevents piracy. For example, in the days of LP records - the poly vinyl records were the means of distributing music. Since these records could be manufactured by a select few firms, piracy was restricted. But with the advent of compact cassettes, small fly-by-night operators began to sell pirated music cassettes. In India, thousands of small time operators sprung up in 1980’s who were selling pirated music. With the advent of CD recorders, copying music CDs became very easy - even individuals could copy CDs in their home PCs. Later with the advent of Internet, Peer-to-peer networks, and MP3 formats piracy became a global menace.
Currency notes is another example of controlling the piracy via control of manufacturing equipment. Machines used to print currency notes are highly regulated and controlled. This enables governments to control the use of counterfeit currency.
Difficulty in copying & distributing counterfeit products is a proven method to protect an IP. For example, semiconductor chips and cars cannot be counterfeited. But individual patents which are used in developing the product can be violated. If patents or trademarks or copy rights are violated, then one has to resort to legal measures to protect their IP.
WTO & IP protection
The most comprehensive agreement on IP protection was developed by World Trade Organization (WTO) in 1994. During Uruguay round of negotiations, a comprehensive & binding agreement was drawn upon all members states.
Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) is an international treaty administered by the WTO which sets down the minimum standards for most forms of intellectual property regulation for all member countries of the World Trade Organization.
Specifically, TRIPs deals with: Patents, Copyright and associated rights, such as rights of performers, producers of sound recordings and broadcasting organisations; geographical indications, including appellations of origin; industrial designs; integrated circuit layout-designs; patents, including the protection of new varieties of plants; trademarks; trade dress; and undisclosed or confidential information, including trade secrets and test data.
TRIPs also specifies enforcement procedures, remedies, and dispute resolution procedures. However the variances in the local implementations of IP protection laws creates challenges in protecting an IP globally.
The idea under TRIPs was to apply IP rules equally to all member states, however developing countries were allowed extra time to implement the applicable changes to their national laws. Two tiers of transition was agreed on depending on their level of development. Developing countries such as India, Brazil, Russia, China etc. had to transition to a common standard by 2005. The transition period for least developed countries was extended to 2016, and could be extended beyond that.
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.
Closing Thoughts
IP protection is a complex subject. Though there are several legal means to protect one’s IP, the legal procedures are complex & expensive. Often small & medium firms in developing firms are unaware of these laws & rules. Most small & medium firms cannot afford expensive lawyers to register their IP with the concerned agencies, let alone protect their IP. So in this article, I have written mostly about how to protect their IP internally - through organizational culture and through the use of private IP.
Probably in the coming months, I will write about legal means to an protect their IP globally and discuss the various protection clauses for different types of IP.
Books on IP:
I recommend the following books on IP & IP protection. There are lots of books on IP - but these are what I consider as the most essential.
- Intellectual Property Rights, the WTO and Developing Countries: The TRIPS Agreement and Policy Options by Carlos M. Correa
- Poor People's Knowledge: Promoting Intellectual Property in Developing Countries (World Bank Trade and Development Series) by J. Michael Finger and Philip Schuler
- Intellectual Property in the New Technological Age by Robert P. Merges, Peter S. Menell, and Mark A. Lemley
- Intellectual Property: The Law of Copyrights, Patents and Trademarks by Roger E. Schechter and John R. Thomas
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