Page 44 - Intangible value

clusive right to take advantage of the rights in its own production.
It must be noted that the right barely has a value in itself – the inventor may have a patent even when nothing nancially relevant has as yet taken place. It is only when the inventor or a company to which he or she has granted a licence starts to take advantage of the patent in one way or another that nancial value will be created. The same applies to copyright.
Intellectual property rights only start to live when they are used to do something, when they take part in economic and productive practices, so to say. Licensing mechanisms are what starts the process of using the rights.
However, companies' need to protect their own rights is currently only a part of use of intellectual property rights. Intellectual prop- erty rights are currently used in a large variety of ways in external business activities: rights can be licensed to other companies, from which licensing revenue is received for the use of the rights. Rights can also be used in, for example, company arrangements in which dealing with intangible assets may have an important role in collaboration be- tween companies. The use of intellectual property rights is so extensive and diverse that ‘open innovation’ is talked about in which the principle is not so much protect- ing the rights for the company's use, but also protecting them for other licensing activity and collaboration between companies.
Patents can be licensed – there are patent li- censes. Larger companies talk about ‘patent portfolios’, which can be licensed to others and also cross-licensed between compa- nies. Copyright as business activity is almost solely based on different licensing practices, whether we are talking about licensing a lit- erary or artistic work (content production) or a license for computer software. Trademark licensing is called ‘franchising’ and is used to create operation in business chains – the same ‘look and feel’ has been created in the companies, whatever the city or country in which the customer walks into the shop. Franchising is a usual business practice in organising, for example, fast food, clothes or other shop or service chains.
Rights can be transferred in several ways. The basic method is selling the rights, i.e., everything, ’all rights’ are sold. For example, the company may estimate that it does not have any use for a speci c patent right now. It does not see any production or product line in its strategy in which the patent could be used right now. However, the invention may be so good that someone might be prepared to pay something for it. Today there are different online marketplaces related to selling and brokering available for compa- nies to sell, buy and exchange surplus pat- ents amongst themselves.
However, it is more common to transfer the right with a more limited signi cance – with a limit in time, extent or geographical use. The broadest form of licensing is an exclu- sive right, in which the licensee can freely take advantage of the right without anyone else being able to do it, including the licensor. Sometimes a parallel right may be transferred, in which case the licensor reserves the right for himself or herself to use of the patent (a so-called ’sole right’).
THE SIGNIFICANCE OF CONTRACTS
The general language of IPR contracts is English. Contract law develops particularly through international practices, in which the language of contracts is English. With their actions, global service providers develop con- tract standards which often create practices from which it may be dif cult to deviate. Of course there are contracts in which the lan- guage is Finnish, for example, the licences of copyright organisations in national use.
Especially with regard to Internet services, the most successful service providers have highly polished their contract practices to be able to use them to cover the company's contractual needs in the most comprehensive way pos- sible while operating within dozens or even over one hundred states and legislations.
ON CRITICISM OF INTELLECTUAL PROPERTY RIGHTS
A lot of criticism is directed at intellectual property rights. For example, it has been pre-
sumed that patents may slow down making use of innovations because a patent gives the inventor an exclusive right to commer- cialise the invention. Intellectual property rights and often particularly copyright has been regarded as a reason or a means to pre- vent the spread of information for commer- cial purposes. Patent practices in medicine have particularly been criticised in connec- tion with sudden outbreaks of epidemics, when medicines would urgently be needed in the prevention of global epidemics.
Without taking a stand in this debate, there are two things that should be taken into account. No IPR legislation protects the in- formation itself but, for example, as regards patents, the information related to the inven- tion is public. It is kind of an agreement be- tween society and the inventor: the inventor receives the exclusive right to commercial- ise the invention in exchange for making its content public.
Another signi cant point of view in terms of practice is the fact that the international IPR system changes very slowly – even if we now decided to change the IPR system fun- damentally, the process would probably take decades. It is thus not worthwhile for individ- ual companies to base their business plans on the possibility that there might be a radi- cal change in IPR legislation and practices in the foreseeable future.
44