Foundations of Intellectual Property

Legitimacy. Most countries legally protect intellectual property, mainly for four substantive reasons :
  • the legitimate right, on both moral and economic grounds, of the creators and entrepreneurs over the fruit of their work, of their own risk-taking and of the expression of their personality (the creator/initiator of an innovative project generally puts his (her) whole heart into it),
  • the well understood interest of the community to enjoy the benefits of this creative work and to disseminate and capitalize on the knowledge of such work,
  • the promotion of creativity and loyalty in business which strengthens the economic efficiency: in an economy where ideas have primacy, where it’s the innovation that creates value, it is only normal that the players seek to protect these ideas or, at the very least, the economic profit they can make from them; the intellectual property must, therefore, allow to guarantee the availability of the temporary income that a company can draw from an innovation ;
  • the establishment of legal tools to facilitate technology transfers in the form of direct investments, joint ventures, licences, etc.

Legal foundation. In Europe, the principle on protection of intellectual property is enshrined in Article 77 of the Charter of Fundamental Rights of the European Union :

“1. Everyone has the right to own, use, dispose of and bequeath his or her lawfully acquired possessions. No one may be deprived of his or her possessions, except in the public interest and in the cases and under the conditions provided for by law, subject to fair compensation being paid in good time for their loss. The use of property may be regulated by law in so far as is necessary for the general interest. 2. Intellectual property shall be protected.”

In the United States, the recognition of the industrial property rights of the designer over his or her creation is enshrined in Article 1, Section 8 of the Constitution: “The Congress shall have power (…) to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.”

In China, the amendment of the Constitution of 2004 guarantees henceforth the protection of private property, which includes the intellectual property.

General operating principle. The intellectual property rights hinder the rule of free competition
  • by conferring monopolies,
  • by providing means to hinder the rivals,
  • by allowing to organize competition and partnerships.
The monopoly is conferred
  • in return for a sharing of the invention with the public where patents are concerned,
  • in order to guarantee the origin of goods where trademarks are concerned,
  • for confirming a copyright or simply protecting the investments on aesthetic creations where the designs are concerned.
The intellectual property rights confer a right to prohibit, which consists in
  • the freedom of choice with respect to the persons authorized to operate,
  • the possibility of distorting competition within certain limits,
  • The possibility of selling or leasing of monopoly.
In the event of dispute, the holder of the rights or its licensees is (are) entitled to claim through the courts
  • the legal prohibition, subject to daily fine for delay in performance, of operation (manufacture, marketing, use, import) of goods or services to which the intellectual property right is applied,
  • The compensation for the damage suffered due to an exploitation not authorized by the rights holder.
In the course of trade, the intellectual property portfolio of a company or of one of its business segments provides
  • backup to facilitate the establishment of agreements with partners, for example, cooperation agreements and licences, which then constitute a direct source of income through royalties,
  • a guarantee and an advantage of obtaining funding,
  • a precise definition of the know-how of a company at a given date.