A new form of production has emerged in all the world’s major economies. The knowledge economy is the most straightforward and informative of the several terms used to describe it. We can call it the experimental economy to emphasize its most distinctive approach to its labour. It has the potential to change some of economic life’s most embedded and universal regularities in our favour, as well as dramatically increase production and growth. Intellectual property rights (IPR) were developed as economic mechanisms to encourage continued innovation by granting inventors a temporary monopoly in exchange for the disclosure of technical knowledge. Intangible, non-excludable, and non-rivalrous goods are knowledge-based goods. As a result, it’s difficult for their creators to maintain control over their distribution and use. And thus, in a knowledge-based economy to promote growth and innovation, IPR protection is essential. Different forms of IPRs operate in different fields. These are Patents, Trademarks, and copyrights. In a knowledge-based economy, the dissemination and protection of information become all the more essential, and thus it’s protection. Patents the type of IPR provides for the right to protect against the unauthorized making, selling, or using of a product or technology which provides a safeguard for the information and innovation technology in the knowledge-based economy. But the patents right in the current regime seem to pose certain hindrances in a few sectors, which is discussed in the context of how it is a setback to the knowledge economy.
KNOWLEDGE-BASED ECONOMY & IPR
The idea of a knowledge-based economy was first introduced by Peter Drucker, a businessman consultant, in his book “The Effective Executive” in 1966. He later emphasized the same in his other book “The Age of Discontinuity” in 1969. He was way ahead of his time to recognize the importance of knowledge in the economy in the times to come. The modern economy is now transitioning towards what is known as a knowledge-based economy. In no time there has been a massive shift from the primary sector which is agriculture to the tertiary sector which is industrial to the now post-industrial economy or the information economy. To quote Ben Franklin, “An investment in knowledge pays the best interest goes very well to the idea of a knowledge-based economy”, whereas the name itself suggests the emphasis is laid upon knowledge. The knowledge-based economy is a massive shift from the agrarian economy and the industrial economy. The most valuable asset in a knowledge-based economy is intangible assets like patents, copyrights, proprietary software, or process, unlike lands and manufacturing plants and equipment being the most valuable assets in the agrarian and industrial economies respectively.
Knowledge-based economy requires investment in education, research, and development and initiatives by the private sectors to promote innovation by incentivizing the inventors. People in a knowledge-based economy need to be highly skilled in computer technology, data processing, and Artificial intelligence. Knowledge-based economy not only provides support but is fuelled by innovation, research and development, and rapid advancement in the field of technology. STEM jobs that are jobs in the field of science, technology, engineering, and mathematics are driven by a knowledge-based economy. A recent paper by Asian Development Bank traces the transition of the Republic of Korea and Singapore transition to a knowledge-based economy. With the advent of a knowledge-based economy, the skill sets acquired by the people either act as a productive assets to employees or as products for businesses to market and sell. Also, such an economy creates a “cluster” of industries that are located in a particular geographical area, for example, the “Silicon Valley” in the USA. It has made a large investment in healthcare sectors as well, and reliance on automation has increased as a result.
In a knowledge-based economy where information or data is the solution to all problems, it is here that the roles of IPR come into effect. In the modern digital era, it has become very easy for one to disseminate information. With the right click of the mouse any data, products, or services can be accessed without any impediment. Protection of such information thus becomes all the more necessary in a knowledge-driven economy. Intellectual property rights are a method to control and authorize such use of information. It facilitates ongoing innovation by granting investors a temporary monopoly in return for the disclosure of technology know-how. But IPR limits the protection in two folds, one by being overprotective which could limit the dissemination of information of high social value by others by being protective were too weak an IPR regime fails to provide an adequate return on investment.
KNOWLEDGE ECONOMY VIS-À-VIS PATENT RIGHTS
Patents play an increasingly important role in innovation and economic growth. A patent is the most important legal instrument for protecting intellectual property rights, in which it provides a right to prevent for 20 years the use or making of any product or innovation. For products or innovations to be recognized, they must demonstrate novelty and industrial utility. Technology markets are becoming increasingly crucial for the spread of information. Patents are essential to the advancement of technology exchanges. Encouraging public research organizations (PROs) to patent their ideas has resulted in increased commercialization of inventions produced from publicly supported research, resulting in higher societal benefits. The option of gaining patent protection, which attracted the funding needed in biotechnology, aided the boom in the invention, particularly by start-ups. However, it has been contested that the intellectual property rights protection system in the current regime might impede innovation while reforms in it may increase the pace of innovation. The protection of innovation and knowledge under the patent regime to has been facing a setback. As pointed out by Johanna Blakely in her TEDx Talk, Lessons from Fashion’s Free Culture, fashion has done well and even flourished without such protections. Some argue that the patent system is either broken or is simply not capable of coping with the development of a knowledge economy.
Patent protection may stifle innovation by restricting access to critical information. The fundamental disadvantage of patents has long been recognized as their harmful impact on dissemination and competition. Because the patent holder has the ability to establish a market price that is higher than the competitive price, this might have a detrimental influence on competition because higher costs may discourage others from investing in such an innovation. Furthermore, many governments, in order to limit competition, do not publish patented information or make it difficult to get, resulting in monopolies that do not stimulate innovation. Hellen and Eisenberg believe that in the field of genetics, patenting has been extended to such fine-grained inventions that IP covering any new drug or therapy may now be so complex and dispersed that heterogeneous patent owners may be unable to agree on the licencing terms required to bring a product to market. Entrants are a vehicle for innovation, and if their entry is hampered, technological progress may suffer.
COPYRIGHTS AND TRADEMARKS IN A KNOWLEDGE-BASED ECONOMY
Trademarks safeguard the rights to promote products and services using distinctive names and symbols. To aid identification, their names must be distinct from those of others. This is done to ensure that the brand name and quality of the items remain intact, and that imitation is difficult for others to pull off, and if it does, it is easily identifiable. Copyrights safeguard literary works as well as creative ones. Exclusive rights to copy and sell certain manifestations of ideas after they have been fixed in some media are granted for a certain length of time. The most important aspect is the fair-use doctrine, which states that it is permissible to produce a limited number of copies for research and educational purposes. Copyrights, like patents, are limited in scope for a variety of public policy reasons. However, these safeguards do not apply to some current technologies, but they do give some motivation for maintaining the uniqueness and quality of ideas and goods throughout time.
The global economy is experiencing a structural transformation, with knowledge-based businesses accounting for a growing share of economic growth. Countries that thrive in product design, research and development, commercial acumen, marketing, and branding will be future economic leaders. Those depending on the industry, agriculture, and commodity exports will struggle to develop high-value employment and growth. Intellectual property protection is intimately linked to economic growth, hence the relationship between IPRs and development is bidirectional. Indeed, as their country grows wealthier, the government strengthens its IPR system and contributes to large-scale innovation. However, the reverse is even more controversial because of the fast-evolving IPR system, which its techniques are unable to keep up with. IP is the foundation upon which your competitive advantage will be built, but due to shifting conditions, it may be both an asset and a liability under the present climate. It is open to reformation, but even this change can be made less relevant by the optimal and fast change in the knowledge economy.
Author(s) Name: Kritika Kumari “(Maharashtra National Law University, Aurangabad)