This reader presents an introduction on the use of know-how and
intellectual
properties
(IP) and its
benefits for students in science, engineering, medical and business
courses. The basic concepts and definitions of
IP will be
treated and also their use and purpose will be described.
The different topics of IP are explained with an example relevant to
your background.
Those interested will find additional information in the appendix links by following the
links.
1.2 Every day IP
Chances are that you are using products or services appropriated by a
variety of
intellectual
property rights
(IPR) on
a daily basis, eg. brands, designs, patents, copyrights.
Many of the products that you will buy or use daily are from a
certain brand. Such a brand makes you recognize the product and the
manufacturer. For example the brand Coca-Cola for cola. On the other
hand manufacturers and organisations use their brands to market their
products and services.
Next to brands, organisations have their tradenames registered at the
Chamber of Commerce.
The book you are reading or the music you are listening to are works
made by an author or musician. These makers would like to be rewarded
for the efforts put into the making of their work. You are therefore not
allowed to copy this work without their permission since it is
copyrighted.
In the development and production of bicycles and cars there are many
proprietary technologies. Manufacturers of these product would like to
earn back their investments in research and development by using
patents.
When you are already developing products yourself now or in the
future and when involved as entrepreneur or manager you will have to
work with different kinds of IP. As a student it is therefore useful to
acquire sufficient knowledge of IP for your future career. Even during
studies you it can be worthwhile to use them for many reasons, for
example for design assignments.
1.3 Why do
IP rights
exist?
Several hundred years ago the use of intellectual property rights was
hardly known. At the beginning of the book printing technology it became
possible to copy and disseminate works of literature far more easily.
From that moment authors and publishers started to feel the need to
appropriate the rights for the production and distribution of these
works. With new technologies during the Industrial Revolution mass
production in large quantities became feasible for products and devices.
This gave rise to a growing interest by manufacturing companies to
appropriate trademarks, logos and patents for their products and
inventions.
The
modern patent in Venice
During the fifteenth century, Venice was a rich and flourishing city.
One of the reasons for this prosperity was the stained glass produced on
the island of Murano.
This was a rare and expensive product that became an important
economical asset for the city.
However, the formula for making coloured glass was known only to a
few people: the glassmakers of Murano.
The Senate of Venice began to worry about the possibility that the
glassmakers might die or flee to other countries, thus losing this
precious secret.
To avoid such hypothesis, Venice offered the glassmakers to train
some apprentices sent by the city. However, the glassmakers refused
because accepting the offer would have meant that they loose their
monopoly and create potential competitors.
Understanding Murano’s concern, Venice offered, in exchange for the
secret, an exclusive right for a limited time to guarantee the
glassmakers monopoly. The document granting this right was called a
“patent”, from the Latin verb “patere”, meaning to make known.
Thanks to this, the craftsmen accepted the offer and Venice managed
to keep the secret, so that we can still enjoy the beautiful coloured
glass of Murano today.
In 1474, Venice published the first patent statue in history, to
regulate the matter. See figure 1.
Figure 1: The Venetian Patent Statute,
enacted by the Senate of Venice in 1474, is widely accepted to be the
basis for the earliest patent system in the world.
The general concept behind the use of intellectual property rights is
that the creator or manufacturer can apply for a temporary exclusive
right hence appropriating their (often intangible) assets and stopping
competitors. By doing so the IP owner acquires the possibility to
exploit the production of these assets which are otherwise easily copied
or manufactured by competitors. So, on the one hand intellectual
property rights incentivize persons and innovators who invested both
time and money to develop a new product. While on the other hand
competitors cannot copy the product and sell it at a cheaper prices
without making such investments.
Consumers of those products which have been appropriated with
intellectual property rights may have to pay a higher price. Without
these intellectual property rights competitors would have been able to
sell the products at a lower price. For society at large the
introduction of
IPR is
not only to have all products available at the lowest prices, but to
have access to new products and innovations. While using
IPR
innovative companies are temporarily in a position to charge higher
prices thus enabling a return on (earlier made) investments. This is
shown in figure 2.
Figure 2: Use for business and
society
1.4 Well known
IP
Companies, entrepreneurs, authors, engineers, developers, scientists
and inventors can use a variety of
IPRs
like copyrights, trademarks, patents, trade names, logos, designs,
databases, plant breeders, integrated circuit layout and trade
secrets.
Some of the well known IP rights are:
Copyright
Will give the creator (author) at the end of the creation
automatically global protection for original works like text, music and
images. Copyrights limit free distribution of the work.
Trademarks
After registration, the trademark owner receives the exclusive right
to use the trademark for certain goods and services. A trademark right
can be used to take action against competitors who want to exploit the
same or similar trademark in the same market.
Patents
After the application, registration and examination of a
patent,
others can be excluded from the commercial exploitation of the patented
invention.
Tradenames
Trade and company names are used to make a company known to customers
in the market and ensure a reputation and thus customer loyalty. Another
company may not cause confusion with its trade name by using a trade
name that is too similar to a previously registered trade name.
Designs
After registration, the design holder receives the exclusive right to
use the design. A design right can be used to take legal action against
competitors who wish to exploit a similar design.
1.5 Frequently used IP for
innovations
This document will not describe the legal aspects of IP. See the
links to several articles of different laws in Parts of Patent law. We will
describe how to use IP, and more specifically for innovations. An
overview of the importance of the different IP rights for innovations
can be seen in the following table.
Effectiveness of appropriability mechanisms for product
innovations; % product innovations for which deemed effective.
Source: Cohen, Nelson,
and Walsh (2000), table 1. Note: Each number is a
mean response, representing the percentage of product innovations in the
row category for which the type of protection in the column is deemed
“effective”. The response categories are <10%, 10%–40%, 41%–60%,
61%–90%, >90%.
In general we can see that secrecy (including what we call know-how)
is one of the most frequently used appropriability mechanisms. At the
same time patents are important in the sectors drugs and medical
equipment.
Other IPRs (for example trademarks or designs) are less frequently
used for innovations, but are of course very important for sales and
marketing.
1.6 An example using patents and IP
rights for technology transfer
In this section we introduce the example which will be elaborated in
next chapters, which elaborates the commercial use of an
academic
patent in one of the Dutch topsectors of industry. Research took
place at the University of Technology at Delft in the Netherlands by
professor Mark van Loosdrecht and dr. Merle de Kreuk in the mid
nineties.
Based upon their research a novel methodolology for sewage water
treatment using more efficient sludge granules was developed. This
methodology has been patented by the university. These granules show a
better performance in waste water treatment plants due to improved
settling properties while at the same time removing nitrogen and
phosphorous. Therefore this technology enables a fast, simple and
compact treatment with less energy consumption. In the end the water
quality of the effluent is better leading to less pollution problems for
the environment.
The subsequent steps of developing and piloting this technology on
site has been executed by engineering company Royal Haskoning DHV
together with the university. Funding for this work in research and
development and scaling has been provided by several organisations eg.
the Netherlands Entreprise Agency (RVO). After piloting at the waste
water treatment plants Veluwe, Rijn and Ijssel and Rijnland, the
technology has been implemented by contractors in other plants
worldwide. In 2020 the Nereda technology has been a nominated as a
breakthrough
technology in this sector. As such the case of Nereda shows an
excellent example of research commercialisation enabled in a public
private partnership.
See for more information about the Nereda technology
Nereda case.
Figure 3: Nereda process
cycle
The priority patent for this technology entitled ‘Method of the
treatment of waste water’ can be found in NL1021466C2. During the
priority year the application has been continued as WO2004/024638A1 and
subsequently as EP1542932B1. The first patent is owned by the University
of Technology Delft and in 2005 the patent has been assigned to
engineering company DHV (later Royal Haskoning DHV, or RHDHV). Meanwhile
the title has changed into ‘Method of the treatment of waste water with
sludge granules’. These patent application procedures will be elaborated
and used as example in this case on academic patents (see Strategy Nereda).
This patent application is used as the example for the explanation of
patents. The application can be seen in
WO 2004/024638 A
Cohen, Wesley M, Richard R Nelson, and John P Walsh. 2000.
“Protecting Their Intellectual Assets: Appropriability Conditions
and Why u.s. Manufacturing Firms Patent (or Not).” Working Paper
7552. Working Paper Series. National Bureau of Economic Research. https://doi.org/10.3386/w7552.
