The Role of Intellectual Property Rights in Economic Development

INTRODUCTION

Intellectual Property refers to the creations of the human mind and intellect. Nowadays, the rights associated with intellectual property are becoming increasingly significant and valuable. In India, the government has established well-organized administrative services and judicial frameworks for IP rights. These rights play a crucial role in the growth of a country. The laws governing intellectual property differ from country to country. In many developed countries, the successful planning and strict enforcement of IP rights has contributed to their economic growth. IPR promotes innovation, which leads to economic growth. Nowadays, innovation has become the primary activity of every business. Countries are promoting their businesses by giving importance to IP laws. IP confers a limited right on the creator/producer or their administrator to use their creation for a limited time frame. Therefore, for a country's development, Intellectual Property Rights are critical.

Intellectual Property Rights

Intellectual property refers to any creation that is beneficial for society and economically valuable for its creator. The rights granted to creators to safeguard their intellectual property are known as intellectual property rights. These rights are provided by legal processes within each country, subject to certain time periods and conditions. There are different types of intellectual property rights such as patents, trademarks, copyrights, and trade secrets.

·         Copyrights: Copyright rights are granted to creators for their works in the fields of literature, art, and education. These works may include books, movies, musical compositions, and more. In India, these rights last for the entire lifespan of the creator and for an additional 60 years after their death. During this time, their work cannot be used without their permission. Once this period ends, the rights become public. It's important to note that copyright only protects the expression of an intellectual creation, not the ideas or methods presented in the work. This applies to literary, artistic, and scientific works.

·         Trademark: A trademark is the name, logo, or slogan of a service organization or product that is protected by law to maintain its distinct identity. For instance, any product or name of a company is safeguarded under trademark laws, and cannot be used by any other individual or organization.

·         Trade Secret: During the production of a product, certain properties may be developed that are crucial for its success. If these properties are a result of mixing a substance in a specific way, then the substance and production process are considered trade secrets. Additionally, industrial design protects the appearance and composition of a product, such as its size and colour. For instance, Apple's iPhone home button design is protected by this right, which means that no other smartphone company can use the same design.

·         Patent: A patent is a right granted for an industrially significant invention that is given in any country with a fixed time limit and conditions. The creator of the invention has exclusive rights to its use for the duration of the patent, and no one else can use it without their permission. In India, the term of a patent is typically 20 years, after which the invention becomes public. To be eligible for patent protection, inventions must be new, non-obvious, and have commercial potential. The patent system is one of the oldest forms of intellectual property rights protection.

·         Geographical Indication: Geographical indication is given to natural or man-made products that hold significance due to a specific geographical location or traditional process. This tag protects and increases the economic importance of the product. In India, the Indian Geographical Indications of Goods Act, of 1999 governs this system. Some examples of products with this tag are Darjeeling tea, black rice from Manipur, chooli oil from Himachal Pradesh, and black cumin and Kashmiri saffron.

Scope and Need of Intellectual Property

 Intellectual property rights are crucial for a country's overall growth and vary across nations. Successful planning and strict enforcement of intellectual property laws contribute significantly to the economic growth of many developed countries. Intellectual property rights promote innovation which leads to economic growth. Protecting people's rights fosters innovation, which is directly linked to a country's development and growth. Developing economies like India must focus on raising productivity in their markets. Innovation requires significant investment, but it plays a crucial role in investment. Developed countries such as the USA, Japan, and China have experienced a five-fold increase in development rates after implementing intellectual property laws.

Role of Intellectual Property Rights in Economic Development

Intellectual Property Rights (IPR) have a significant impact on the process of monetary improvement, and their development is entangled with various factors. The primary objective of IPR is to encourage right holders to bring their innovations and ideas to the market, thereby promoting the widespread circulation of the latest technology for the betterment of the economy. The effectiveness of IPR on economic development in different countries depends on various stages of development, such as GDP growth, human capital development, imitative activities, technological development, and so on.

In general, innovations are mostly produced in high-income countries due to different R&D activities, and the protection of IPR further encourages innovations by enabling inventors to earn handsome returns from their inventions. In all middle-income countries, property rights positively affect economic development, but this effect is less than that of high-income countries, as the level of protection of IPR in these countries is relatively poor. Furthermore, each middle-income country is unique in terms of its economic structure, with divergent IPR. Therefore, middle-income countries can be divided into two categories, i.e., upper-middle-income countries and lower-middle-income countries.

In upper-middle-income countries, IPRs are presumed to have a positive impact on economic development. On the other hand, in lower-middle-income countries, IPRs have only a moderate effect on economic growth due to poor protection of property rights. In low-income countries, this effect further weakens, and the level of protection of IPR is even worse.

Relation between IPRs and the Economy

It is important to use new innovations and ideas to keep the cost of a product low. Updating technology and innovation is vital. Strict IPR laws that protect the interest of the people are necessary as they discourage others from exploiting the same. However, it is not enough to just have a good law. The enforcement of that law is equally important. If there are loopholes or weak laws, they can be exploited and result in less innovation.

IPR provides exclusive rights to the owner or creator of the property, which includes the right to decide on a fair value and sell them to anyone. A healthy return to developers will encourage them to create new innovations and promote innovation. However, the owner can also exploit this right and charge more than the monetary value, creating a monopoly in the market.

Positive Impact of Property Rights in the Economy

India possesses an immense potential to become a global leader in innovation and productivity. However, to reach this pinnacle, it is of utmost importance to invest in intellectual property laws that safeguard the rights of producers and consumers alike. India's adoption of the Trade-Related Intellectual Property Rights (TRIPS) agreement has led to a significant upsurge in patent filings, which has resulted in increased innovation and private-sector investment in research and development. This favourable trend presents a remarkable opportunity for India to continue to flourish and make significant contributions to the worldwide economy.

CONCLUSION

Intellectual Property Rights (IPR) play a significant role in economic development by fostering an environment that incentivizes creators and innovators to bring their ideas to the market. IPR protection, including patents, trademarks, copyrights, and trade secrets, encourages investment in research and development, leading to economic growth through the introduction of new technologies, products, and services. Developing countries like India can benefit from a strategic emphasis on IPR laws that can unlock innovation and productivity opportunities. However, it's essential to strike a balance in IPR laws that provide adequate protection and prevent the abuse of exclusive rights that may lead to monopolies. Effective enforcement mechanisms are crucial to maintaining the integrity of the IPR system. Ultimately, IPR stands as a pillars supporting creativity, entrepreneurship, and sustainable development, benefiting societies and economies alike.