Page 43 - Intangible value

INTELLECTUAL PROPERTY RIGHTS (IPR) AND HOW THEY ARE USED
MINISTERIAL ADVISER MIKKO HUUSKONEN, DOCENT / MINISTRY OF EMPLOYMENT AND THE ECONOMY
When discussing intangible value, intangi- ble investments and intangible capital we are talking about phenomena which, from a legal standpoint, is often protected with intellectual property rights (IPR) legislation. Intellectual property rights are a means of value creation – it has sometimes been said that intellectual property rights transform in- novation into an economic tool.
SOME TERMS
The abbreviations IP and IPR are often used. IP refers to ‘intellectual property’, for which the terms intangible property or intangible as- sets are also used in English. The International Accounting Standard IAS 38 discusses the accounting norms with regard to intangible as- sets and determines a clearer picture of what is referred to by intangible assets in accounting. The World Intellectual Property Organization in Geneva administers the international system of conventions for intellectual property rights.
This article focuses on the concept IPR, i.e., in- tellectual property rights. IP or intellectual prop- erty is an umbrella term. When the R is inserted at the end, what is referred to, is IP rights, i.e., intellectual property rights. In this context as well, numerous terms are used: in the Nordic countries/Sweden they are referred to by using the concept ‘immateriella rättigheter’. – The de nition ‘intangible’ in the Anglo-American terminology is easy to understand concretely with regard to matters that cannot be touched (intangibles) as opposed to things that can be touched (tangibles).
COPYRIGHT AND INDUSTRIAL PROPERTY RIGHTS
Intellectual property rights are divided into two categories: the terms used are copy- rights and industrial property rights. Industri- al property rights are registration rights that are applied for from the registration author-
ity. The most important registrable rights are patents, trademarks, protection of patterns and designs, utility patents and plant breed- er's rights. Additionally, there are some less important forms of protection.
In Finland, patents are applied for from the Finnish Patent and Registration Of ce (PRH), in Europe from the EPO (European Patent Of ce) in Munich. Global patents are administrated in the PCT system at WIPO in Geneva. Trademarks are also applied for from PRH. The OHIM agency in Alicante, Spain administrates the trademark system of the European Union.
The right to register has a time limit. The au- thority keeps a register, which lists the owner of the right and the type of right. There are often also registers that facilitate the collat- eral practice by providing these rights with an ‘of cial stamp’ and public reliability so that they can be used as collateral in differ- ent arrangements and nancing situations.
Before the registration of a patent, the au- thority will investigate the preconditions for patenting and the possible obstacles for patenting (whether the same patent been published somewhere else). A patent is in force for 20 years from the date of issue. The preconditions for registering a trademark are investigated in the same way. A trademark is valid for 10 years from the date of issue, but it can be registered again without limit. However, it is also possible to be granted a trademark right if the trademark has long been used without any legal demands, i.e., by establishing it.
The legal position of copyright is different, as copyright is not applied for or registered, but rather arises if someone produces a literary or artistic piece of work that ful ls the criteria of copyright and copyright law. In that case the author automatically has the copyright
for the work without a need to register it.
The easy way in which a copyright arises has, in some respects, made it an emerging form of protection and this is speci cally why copyright was chosen as the form of protec- tion for computer programs at the end of the 1980s. The need for protection had arisen as the international software business had grown and become more common. A fast protection that would not require registration and that would not need to be investigated by an authority was needed for computer pro- grams. Another special feature of copyright is its long validity: a copyright is in force for 70 years after the death of the copyright owner.
There is still another difference between the right forms. Industrial property rights arise – as the name also suggests – from the needs of the business world, from protective mechanisms needed in companies, to sup- port collateral practices, etc. The background of copyright, on the other hand, is related to publishing and also includes features for the protection of the author's person. It is probably very rare to come across a compa- ny that would not use any trademarks, either through registration or establishment.
It can be said that at the moment this cat- egorisation is challenged to a certain extent as, along with digitalisation, both the protec- tion of computer programs and different dig- ital content production have led to a broader use of intellectual property rights, and espe- cially a change in the role of copyright.
HOW ARE THE RIGHTS USED IN BUSINESS OPERATION
The basic case is, of course, that a company uses these rights to protect its own inven- tions or computer programs, or content pro- duction in the eld of media. The company bases its competitive advantage on the ex-
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