IP LW 556 (2000-2001) Abstract Coca-cola, Microsoft, McDonalds and vacuum cleaners. All are protected by Intellectual Property rights, a topic which is becoming increasingly important in the commercial world. Intellectual Property rights are essentially exclusionary, hence the owner has the right to use, sell, deal with and exploit the right in question. In addition, this ‘exclusive’ right theoretically enables the owner to restrain or prohibit, any other third party from using his/her right. However, it will be argued in this essay, that this is a natural misconception of society’s ‘common sense’ of the law. Unfortunately (or fortunately as the case may be for a few), there is a hegemonic nature inherent in Intellectual Property Law, re-infoced by sociεties capitalist tendencies. As Rosemary J. Coombes asserts, ‘The signs of the economically powerful, will always be pervasive, regardless of how closely they are monitored…’1 Intellectual property has, from its inception has been concerned primarily with publishers and other powerful firms, as much as it has been about creative individuals. Nonetheless, the latter often findng their interests poorly protected , despite the exclusive nature of intellectual property rights.
Thus, it is my intention to purport the underlying reality of the Intellectual Property legal regime, as a reality based on power relations. This reality demonstrates how individual inventors, or small companies, are enveloped by the forceful tactics of large corporations. This will demonstrate that the laws impact is felt where it is least evident and those affected, too often, have few resources to recognise or pursue their rights in institutional forums. Introduction Intellectual Rights Or Property Wrongs?
“My reaction was, what would I be entitled to as the inventor of the discovery…the answer to that, was that I would not be entitled to anything…”2. Peter Taborsky, a final year student at the University of South Florida, was sued for stealing an idea…his own idea. Taborsky helped out at the University’s chemical engineer lab as a mere assistant, where he was working on (or assisting for purposes of research), a project funded by Progressive Technologies Corporation. Nevertheless, the project was not achieving desired results. Taborsky, therefore, endeavored into his own experiments and came up with an interesting discovery – namely, making it easier to reuse cat litter over and over! When he realised the potential value of his discovery in the market, he quickly filed for a patent, in the honest belief this would protect the invention, and his right to use it. To his surprise, however the US Patent Office declared that, while it was true that Taborsky could be recognised as the inventor of the discovery, ownership of the idea did not vest in him. Ownership of his idea would vest in Progressive Technologies, the Company that sponsored the research. Thus, it was the Corporation who would gain exclusive access to the student’s idea, despite the absence of a contract between Taborsky and the Corporation3. The result?. A student lab assistant being prosecuted by a University on behalf of a Company. The problem?. The extent to which Corporate interests can jeopardize the individual inventor via methods of exploitation, intimidation, coercion and control.
The protection of intellectual property has become a leading concern in the corporate world. The degree of expenditure involved in Research and Development, Marketing, Production and Management, imposes the need for large firms to ensure their Intellectual Property is protected, not only from potential piracy but from those whom attempt to “free ride”on the reputation of internationally recognised Companies. By aggressively expanding on their patent portfolios4 or establishing a Registered Trademark, large corporations are in a position to ensure two essential factors. Firstly, a secure place in the market, and secondly, to become the leaders in the battle against infringement. While the former has raised concern of market monopolies5, the latter has amounted to severe disparities between economically powerful entities (which can “afford” political power, hence influencing the non-neutral rule of law) and those approaching the battlefield of rights. Thus, corporations are using Intellectual Property rights, as a potent weapon against potential infringers. In the words of Ulysses,
“The act of war is simple enough. Find out where your enemy is. Get at him as soon as you can. Strike at him as hard as you can and as often as you can, and keep moving on.”6 In the context of our modern capitalist society, where profit is a driving force, large corporations will identify with, and be specialists in, “the act of war”.Those who stand in their way, no matter how insignificant, will be struck out The case of Peter Taborsky – a student being pinned down by a powerful entity – is a perfect example of this.
In this ostentation of ideas, I will attempt to illustrate the ever widening gap between “potential” rights and “real” rights, and how these rights are fundamentally under the control of the “Haves” at the expense of the “Have not’s”7. In other words, this paper will demonstrate how, in the absence of a legal framework, which takes into account the hierarchical structure of society, those at the bottom essentially lose out. One need only consider this fact in the light of the context in which Intellectual Property emerged, to appreciate this truism. In medieval times, patents were granted in order to raise funds and secure controls over industries which were considered to be of political importance. Copyright, on the other hand, served to ensure government control over the printing press, in a time of great religious and political dissent8. The interests of inventors and other intellectual workers, historically, seemed not to have been an important concern. Rather, the emphasis was on state power, leaving the rights of, for example, the author at a secondary level. Thus, I will expose how these notions of power over property still persist today at the heart of intellectual property. By giving a brief indication of three main Intellectual Property rights, I will go on to consider, on a more theoretical level, a discourse on rights, and how these rights are essentially corrupted by capitalist interests. Finally, using examples and factual evidence, I will argue and agree with Marc Galanter, that “the “haves” come out ahead”. Coming to terms with Intellectual Property. The elusive concept of intellectual property and the ownership of ideas, can be concretised with a simple example. People own property in the tangible sense, namely clothes, land, houses. Tangible property, along with intellectual property, is for the exclusive use of the owner, unless otherwise is authorised by the exclusive owner. However, while tangible property is generally used by one person at one time (only one person can wear a pair of shoes at the time), ideas can be used over and over at the same time. What's more, the person holding the original idea, will still have full use of it! Thus, it will be wise to appreciate the difficulty of maintaining exclusive use of intellectual property as it is possible for many people to physically hold it at the same time, and the owner may not even be aware of it. Especially when the exploitation of such property connotes rewarding returns. The three main types of Intellectual Property dealt with in this essay are namely Copyright, Patents and Trademarks. Copyright protects ideas such as those covered in literary works, artistic works, music and broadcasting. Patents are concerned with inventions, such as designs for industrial processes, and contrary to Copyright, require registration, which is subject to certain strict conditions9. Trademarks are signs or symbols which allow a consumer to associate with a product, service or a company. Other intellectual property rights exist, for example Designs or Trade secrets, but will be of little relevance to this essay.
“A Discourse Of Rights”
Theoretically, intellectual property is responsible for vesting “rights” in the owner, and therefore, the owner has control and power over those rights, against the whole world. That is, once he can assert ownership.
However, can the notion of “rights” really be so straightforward in an age of market capitalism, economic interest and political bias? The notion of “rights” in the context of intellectual property is in fact tainted with partiality. Before analysing the situations in which intellectual property may be seen as an authoritative system of rules, benefiting the interests of those in power, it is important to consider a critical perspective of rights. This will demonstrate that “rights”, as appreciated in a common sense context, may prove to be more deceiving than protective, to those whom ignorantly rely on them, or fail to comprehend that others will have the power to lobby obtaining these rights. A critique of rights was developed by scholars, participating in the Conference on Critical Legal Studies. These critical legal theorists identified five basic elements that enhance the deteriorating assumption that rights really confer rights!
The first view is that rights are less useful in securing progressive social change. While it is true that a legal victory may hold ideological importance, it does not obviate the need for political mobilisation. That is, where the legal victory lies at the hands of a small institution. On the other hand, a judicial loss on a claim of rights, will often give rise to significant negative consequences in relatively powerless groups, for example, inventors, young musicians and small firms in a competitive market. The most destructive loss is obviously financial. What this leads to is not only a sense of uncertainty to those wishing to protect their rights10, but also lead those relying on intellectual property rights to think that their claims have no value, due to a lack of credibility. Especially when it is the large corporations that tend to successfully protect their rights, and are supported by the political jargon inherent in rights. Robert Gordon has recognised, that even where a noted legal victory does ensue amongst the powerless, the inherent hegemonic structure remains11. Thus, he contends that,
“[T]he powerful can always assert counterrights…to the rights of the disadvantaged. “Rights” conflict – and the conflict can not be resolved with an appeal to rights”12. As will be seen below, Marc Galanter emphasises this point.
Secondly, rights are indeterminate and incoherent. That is, even though you have your rights, for example, the right to use and exploit a patent, which has been registered by following all the required formalities, in practice, these rights are not definitive. This is because they are cast at high levels of abstraction and do not accommodate contextual problems or circumstances. Furthermore, it can be argued that judges often attempt to resolve conflicts by attempting to “balance” individual rights against relevant “social interests”13. However, this balancing process will strongly be influenced by “individual judicial sensibilities and political pressures [rather] than the specific reach of specific rights”14. Therefore, rights in themselves are internally incoherent15.
Thirdly, “legal rights stunt people’s imagination and mystify about how the law really works”. The very language of “intellectual property rights” is in fact clouded by numerous misconceptions16, which manipulates peoples’ perception of the true nature of law. While a “right” connotes individuality and absolutism, the underlying reality reveals a social order, a system of rights, which conceals the elemental functional roles (the inventor, the corporation) which constitute it. These functional roles within the system enhance the degree of economic and political power that is held by a small proportion of society, and, contrary to what is generally perceived, this may lead to a suppression of creativity. This argument was followed by Jewkes, Sawers and Stillerman17. They argued that traditionally, it could be said that functional roles were more manifest. Thus, in the nineteenth century the role of the individual inventor was encouraged to provoke desirable inventions and the musician was to create new pieces of music, in the interest of society. However, this perspective took a sharp turn in the twentieth century, where emphasis was no longer on the individual inventor and his ideas. The focus was on institutions, be it governmental institutions or private corporations. The importance behind this was control and market power – not individuals and their rights to increase the sphere of creativity. Hence nowadays, the general intention is to concentrate technical knowledge for the purpose of increasing profit. By concentrating this technical knowledge within large corporations, ideas are directed towards a particular objective, and therefore limited. The trend towards institutionalising the process of discovery and invention, in fact acts as a deterrent to the individual inventor to pursue his interests alone. While the institution may be,
“a powerful force in accumulating, preserving…[information]…it will normally be weak in its power to originate, and will, therefore, carry within itself the seeds of stagnation unless the powers and opportunities of individuals to compete with, resist, challenge, defy, and, if necessary, overtopple the institutions, can be preserved”. The mystification of rights, therefore, is paradoxical in nature. While the idea behind a patent is that the fundamentals of invention are made public, and the pool of creation is enlarged, companies may take out a patent or use someone else’s patent in order to inhibit this expansion, and control what is within their reach. Take for instance the US Company AT&T, which since the beginning of its own patent in 1875, collected patents in order to ensure it maintained its monopoly on telephones. Similarly, General Electrics used control of patents to retard the introduction of fluorescent rights, which were a threat to its market of incandescent lights. The argument behind this is that the over-concentration of power leads to an authoritative mishandling of knowledge, and distorts the common sense perspective of rights. Thus the individual inventor is faced with a battle which he is pre-determined to lose18.
The fourth point which was considered in the Conference on Legal Studies, was that, “conventional rights discourse reflects and produces isolated individualism and hinders social solidarity…”. In the context of intellectual property law, individualism reinforces the notion that striving to seek one’s own interests is legitimate, and thus, attaining ownership of your own ideas is the most fundamental factor. Hence, large corporations rely on their arbitrary discretion to pursue their own ends without regarding the impact of their actions on others. What results, is the market disproportionately rewarding those who successfully claim property rights for a discovery19, which will most likely not be the real creator, but the employer, Publisher or Collecting Society. Nonetheless, although Martin indicates that potential financial returns on intellectual property are said to provide an incentive for individuals to create, this is a myth. Seldom do the actual creators gain benefit from intellectual property. This is because, intellectual property is primarily of value to those who are already powerful and wealthy. This creates a single entity unconcerned with the rights of the weaker entities around them. Thus, although those with power rarely contribute much labour to the creation of new ideas, they act as a central individual force in which solidarity is of no importance. What is of importance is their own benefit, which leads to an aggravating inequality, and the notion of rights loses significance. In this sense, rather than promoting ideas and innovation, intellectual property rights nourish individual competitiveness amongst the dominating corporations, creating an artificial scarcity which only rewards a few.
The final point to be made on this critical discourse on the notion of rights, is namely, that rights may in fact impede genuine democracy or justice. Rights evoke passivity as they are generally taken for granted. There is no alternative to the rights that exist. Thus, when a legal victory by an inventor or designer finally ensues, the victory will be accepted with ease, but will not provoke social change. The result of this is an enhanced interest of capitalism at the expense of democracy, justice and rights. The Truth About Those Who “Have”.
On the surface therefore, the notion of “rights”, seems straightforward. Intellectual property permits and grants the ownership of ideas, and consequent entitlement, as a matter of right, to exclude others from the use of that idea. Moreover, the creator, in principle, is entitled to the financial rewards attached to the idea. This is the common sense notion of rights. Underlying this neutrality, is a sense tainted with prejudice and based on political connotations. The question which must now be considered, is how these “rights” function, and how they are affected by the litigation process. Therefore, I will now focus on the parties as opposed to the rights they pursue.
Mark Galanter clearly establishes the view that the enforceability of rights for those lower down the “power” scale, is severely restricted20. Theoretically, all are equal before the law and the law provides protection to those whom are entitled, as of right. Nonetheless, the law is subject to the forces of society, and therefore is far from neutral. Weber has suggested that there is a tendency for formal equality to be compatible with the notion of domination, hence,
“The more the rich and the poor are dealt with according to the same legal propositions, the more the advantage of the rich is increased”21 The litigation process22 itself reveals how the nature of the parties is a decisive factor on how claims are decided in court. Galanter categorises parties involved in the litigation process into two distinct groups. Firstly, there are the One-Shotters23. This category typifies the individual, or powerless group (for example holders of performing rights), which rarely engage in court litigation, or more specifically, have little experience in that respect. The second group or category is the Repeat Player24, which Galanter considers to be the “ideal type” in the litigation process25, for example, large corporations or even collecting societies. OS’s are generally of small size, with limited knowledge in the sphere of intellectual property (both legal and practical) and limited economic resources. Hence, they stand at a considerable disadvantage to the RP. The latter, contrary to the OS, holds a powerful position in the market and either holds, or has facilitated access to, both knowledge and finance. Therefore, while the OS aims to pursue one specific right, the RP will generally aim pursue an interest in the long-term. A recent incident, and an example of the impending discussion, is namely the giant Network “Fox”, attempting to shut down a science website, created by the University of Wisconsin-Madison. Attorneys for Fox accuse the University of infringing their trademarked television show “The X-Files”, by naming their website “The Why-Files”. The website is popular amongst teachers and students as an educational resource, and features information about earthquakes, oil and natural gas ad snow. Indeed, how a consumer can confuse this with an alien encounter (or why an “X-Files” fan would relate the two)is rather obscure. Nevertheless, Fox Network sent the University a series of letters stating that the website “clearly uses a play on words to trade off on the good will of our clients trademark”, and demanded that the stop using that name. Paradoxically (or logically, in profit-based society), Fox is willing to license the name to the University under “appropriate conditions”. Consequently, the stakes for the University are unfortunately high in comparison to the risk faced by Fox.
It is here where the fundamental notion of rights comes into practice and, where what I term “the burden of power”, is manifested. By considering the inherent beneficial status of the RP with respect to intellectual property, one can appreciate how the indefensive OS tends to resign his “right” to the RP, as the costs of enforcing those rights out-run any promise of benefit to the OS.
Galanter proposes numerous factors placing the RP in an authoritative and advantageous position with respect to the OS. Firstly, Galanter recognises the fact that, as the name suggests, RP’s are experienced in the art of litigation, keeping competitors out of their proprietary technology26. They have been through the process in various occasions, allowing them to build a profile for future challenges. Thus, by analysing previous errors, the RP has what Galanter refers to as “advance intelligence” in the area. What is meant by this, is that the RP is more aware of the actions which must and must not be taken. This must be contrasted with the lack of experience held by an individual or small group, which may be unaware of the scale costs can reach and the power which is held by its opponent. Where a OS attempts to resort to litigation in the belief that his rights override political power, the lack of resources and experience, in effect give a gratuitous advantage to their opponent. This creates a shift in the ground of battle, where the latter (the opponent RP) is stronger. In the example of patents, large corporations strive to gain huge patent portfolios, and actively use them to build up “high barriers to entry” for potential competitors. Large corporations can extend these high barriers by “aggressively expanding their patent portfolios”27, by employing large-scale Research and Development programs. This places them in a position to license technology for royalty revenues, as well as establish cross-license agreements with other corporations. Thus, the small OS is forced to either accept the terms of the RP and the proportion of royalties to be paid, or stay clear from the market. Consider, for example, the case of George Clinton, a sixty year old American funk music singer, who filed a lawsuit to keep his rights in music he wrote in the late 1970’s and 80’s, work worth more than $ 100 million in profits. US District Judge Robert Hinkle held that the music written by George Clinton, belonged to Bridgeport Music, a Michigan based publishing company to which Clinton had signed away his rights in a 1983 contract. Clinton also claimed that he lost money from rap music artists using samples of his old songs, but not paying fees28. Inevitably, OS’s are restricted before they even sign a contract or apply for a patent29. Moreover, the pool of financial resources held by dominating firms, permits access to specialists, a privilege a OS will only have if he or she is wealthy enough to obtain professional help.
Having issues dealt with by specialists is an advantage that can not be ignored. However, specialists are not available for free. As Markus Krummenaker indicates30, successfully filing a patent is only the first step of a long process of policing that patent, in order to ensure there are no infringers. The policing process as such, will incur normal legal costs. It is when a potential infringer is discovered that the problems arise, especially if an individual or an SME is up against a RP, for there is not much a OS can do. For example, the case of David Welton. He sent a message to the “Linux Users’ Group mailing list” proposing that there be published a “For Dummies” book, detailing how to use the complicated send-mail. The people at IDG, the mega corporation that runs Linux World31 and publisher of the well known “For Dummies” series of reference books, found out that Welton had used the title, “SMART_HOST for Dummies” in the subject line of the e-mail. Apparently, IDG was not impressed with this, and sent him a “cease and desist” note which stated,
“It has come to my attention that you are using the sub-title in a chat room on your website. While we wish you every success in the work, we must raise certain issues with repeat to your use of IDG Books, federally registered trademark…Because of the efforts that IDG has undertaken to promote and protect its trademark, we trust that you appreciate our concerns…we request that you change Smart_Host for Dummies to a non infringing title.” In such circumstances, an individual, such as Welton, really has no choice but to follow instructions, or face a disastrous penalty. The interest of the RP is to protect the investment already made in research. And, in order to get a return on this investment, it will be necessary to “recklessly pursue potential infringers”32. This is vitally important in the sphere of patents, especially if the issue reaches litigation stage. For this will mean tying up many key researchers in court rooms (and assistance to file the patent applications in the first place), either to challenge the validity of the OS’s patent, or alternatively, to give evidence of the validity of their own patented product. Not only is time required33, a privilege which a OS probably does not have, but also a significant expenditure of legal fees. This evident bias can also be identified in Statute. One example lies in the requirements of a patent. Art 14(3) of the Patents Act 1977 states that “the specification34 of an application shall disclose the invention in a manner which is clear enough and complete enough for the invention to be performed by a person skilled in the art”. This is only one of the various obstacles an independent inventor must overcome. While, as suggested, the RP will have specialists or professionals to create a clear and concise specification for the application of a patent, the OS may not have such an advantage due to the costs attached to specialists. Thus, when the court looks at the claims, under s. 14(5) Patent Act 197735 to determine whether there has been infringement, a failure by the patentee to indicate fully all the features of the inventions, or, an overstatement of the abilities of the invention, will either avoid an action for infringement36, or will invalidate the patent37.
Again, the RP will receive preferential treatment to the OS when approaching insurance companies or financial institutions. That is, the RP has opportunities to develop facilitative informal relations with institutional incumbents. For example, the individual creator will be convinced about the validity of his patent, and will therefore pursue an action against a large firm if he believes the latter has infringed his patent. Thus, in order to do so, and pay the consequent costs, the creator may require financial assistance. However, the likelihood that a financial institution will award the creator a loan, is minimal38. Creditors are more likely to either impose unfavourable terms to such an agreement, for example, high interest rates, or simply refuse to facilitate the sum. Thus it may be said,
“this is the age of the large monopolistic or oligopolistic firm, it is also the great age of technical invention…Big firms go to great pains to bring to the public notice of the part they have played in technical advance…It is symptomatic that in these days no firm ever boasts about its high profits, which are the real tests of its achievement”39. Although this extract dates back to 1969, its application to the current state of affairs, can not be understated. Large firms strive to obtain a secure position in the market at the expense of small competitors, whom simply lack resources and force to even enter the market. Thus, as the quote suggests, intellectual property is not so much about innovation, and intellectual contributions to society. The interest for protecting intellectual property rights, is profit to those whom may not deserve the reward.
The bargaining itself, when confronted with litigation, demonstrates an imbalance. While the RP has not only a reputation, but also recognition in the market, the litigation process will be directed at protecting these. That is, the RP is committed to a bargaining reputation, which enhances its credibility as a contestant. On the contrary, the OS lacks credibility as his or her bargaining position has, in general, no support or little recognition in the market. This is best illustrated with an example. Take for instance, the great multi-national company, McDonalds, which in 1996 warned the bar owner of “McMunchies”, to “remove her sign or face legal action”40. What McDonalds was contesting, was, that as the registered users of the “Mc” pre-fix, McMunchies was infringing their Trademark. Considering the nature of the bargaining position of McDonalds with respect to McMunchies, a small sandwich bar in Scotland, it is unlikely litigation would commence in the first place, as the odds that the latter would win the battle, would be minimal. Nonetheless, “McMunchies would probably lack financial resources to go to court. Nonetheless, the fact that there was a threat of legal action, demonstrates a commitment by McDonalds to its bargaining reputation, deterring other McMunchies from possibly arising. More importantly, the multi-national was making a statement – don’t mess with us!
The use of litigation gives an advantage to firms that are financially stronger over those that are weak. Therefore, no firm will give up such an advantage willingly. Instances such as the one described involve explicit threats, but this need not always be the case. A weaker party, such as the owners of “McMunchies” will generally avoid litigation due to their awarenes of financial discrepancy. Thus, the victory will be left to the stronger party no matter how unjust the circumstances41. There is even evidence of weaker US firms, working in the field of biotechnology which will avoid investing Research and Development. This is because they anticipate that in certain areas, the genuine market leaders – with greater resources to litigate - are likely to involve them in infringement actions42. Another example in the American software industry is that of Edata. Arnold Friedlich, the President of Edata, explained that ,
“Part of our marketing strategy was to sue everybody and get noticed…we went ahead and sued, and everyone now knows we are very serious about defending our claims”.
Although the RP is likely to win the litigation game, there may be circumstances where the balance tips in the other direction. However, in this hypothetical situation, the stakes will be relatively low for the RP. The effects of one loss will generally be insignificant. The case is most likely to be part of a devised strategy (either by specialised lawyers or other professionals) to maximise gain over a long series of cases, even though there may be a loss at stake. The OS however, will be more likely to adopt what Galanter terms, a “minimax” strategy, namely, minimise the probability of maximum loss. An example of market access seems appropriate. A patents market power will be valued according to the speed in which it accesses the market. Therefore, the strategy of an infringing large firm will be to postpone a final court decision, making it strenuous on the small firm to exploit the market. Time, again, is a crucial factor. Although, as stated above Polaroid’s challenge against Kodak resulted in huge damages to the former, this was overridden by the amount they lost, as they were unable to exploit the market on their own during the decade of litigation43. Hence, with an advantage of time and resources to establish strategies to avoid a large loss, large firms are able to protect their intellectual property interests.
Large corporations, as is being argued, have a great deal of power in the market due to their facilitated access to resources. This enables the RP to influence the outcome of particular cases, which will enhance their favourable position for future cases. As opposed to the OS, the RP will not be primarily concerned with the outcome of one case. The RP will be fundamentally interested in achieving a result or decision, which will place him at an advantage for future cases. That is, the RP, by adopting strategies in the litigating process, will be able to influence the outcome of future cases by producing favourable rules. For the independent inventor, the vital issue will be to secure his invention by obtaining a validly registered patent44, or other intellectual property right. The main or only interest will be to protect his exclusive intellectual property right. In order to do this effectively, and because of the importance of the particular outcome, the OS may invest a great effort and a large sum of money, to ensure ownership is asserted in his/her favour. As the costs incurred are likely to be of the individual, in contrast to the financial pool of large corporations, the risk involved will be very high. Consider the case of Dr. Singer whom was sued by Dr. Pallin for using and teaching Dr. Pallin’s patented medical treatment, namely incision for cataract surgery. Although Dr. Singger was assisted by the Clinic in which he worked, the victory came ata high price. Over half a million dollars were incurred in legal fees and Dr. Singer lost three years of performing research and treatment on patients for being tied up in litigation45 Therefore, the most important factor is the issue itself, not the rules that govern the issue. RP’s theoretically could be said to have more control over the situation, are able to manipulate the final outcome, depending on whether the latter is favourable or not. For example, if an unfavourable outcome is expected, an RP may generally be able to prevent an issue going to court and try to accord a settlement instead. Albies Foods, Inc., of Gaylord, Michigan, a small firm of no more than one hundred employees, actually filed a suit against its larger rival J.M. Smucker Co. The latter wrote to Albies Foods, informing them that they were infringing their patent of a “sealed crustless sandwich”, by selling a crust-less peanut butter and jelly sandwich. In this case, the small firm was confident and therefore decided to take on the challenge. However, aware of the possibility of a negative outcome, J.M. Smucker, the larger, more prepared company, subsequently admitted that the “two sides are in discussion”, and that “nothing is going to court….we are still just trying to discuss the issue in private”46. Therefore, in order to avoid the public sphere, or an unfavourable outcome, the RP, whom will most likely litigate in a future case, can manipulate how the issue is dealt with, either to its own advantage or to satisfy its own interests.
Nonetheless, where the outcome is more likely to be favourable, the RP has the resources to pursue the issue until the interested outcome is achieved. That is, the RP will have the capacity to select adjudication or even appeal a case, to ensure their rights are respected. As Galanter notes, the RP has a superior opportunity to “trigger promising cases and prevent the triggering of unpromising ones”47. Its ability to do so is due to the passive nature of the courts, which are receptive to the process when it is stimulated by the parties. The OS on the other hand will seek to achieve a specific result, whether it be adequate compensation or an exclusive right in intellectual property, but not to “adapt” the rules for their own future interests.
The notion of court passivity is taken further. The court, as Galanter recognises, must be mobilised by the parties. Thus, it is the parties who will actively put their case across to the passive “receiving” court. If the court believes that an infringer, no matter how small, caused a patent owner, no matter how large, to lower its price or forgo a price increase to meet the competitive situation, the infringer can be held liable for the lost profit48. It can be argued therefore, that the court will be most receptive to the party that has, not only the most information, but best organisation, communication skills and presentation of facts and evidence. This will undoubtedly be the RP. One need only consider the cases discussed above, that is, the McDonalds, Fox’s, Kodak’s and Microsofts of the world. Especially, as mentioned above, in cases involving patent issues, facts become very technical. Therefore, a RP may have a greater ability to proceed with the case. Despite the fact that the legal system treats both parties as if they were equally equipped with economic resources, investigative opportunities, and legal skills, the RP is more prepared than the OS. This, coupled with the fact that legal institutions suffer from a general overload of cases, the party with the best presentation will be favoured. These two factors may lead to inevitable out of court settlements. Although a settlement compensates a creator, artist or musician economically, their rights are nonetheless, unjustly withheld. The pressure to settle will be stimulated by the rising costs of litigation49, and discouraging adjudication in favour of bargaining. One need only see the figures in the case of AEI Rediffusion Music Ltd v Phonographic Performance Ltd50, where as much as 1,200.000 Pounds Sterling fell to be decided by the applicable rules51.
A OS would not even attempt to fight such a battle.
Nonetheless, the OS is not totally out of the game. While probably the most advisable arrangement for the OS is either to step back and avoid the burdensome consequences of the power held by their opponent, or agree to a settlement, some small firms have successfully gained respect from the giants. Singleton refers to a case, where the smaller firm, “David”, devised a way to confront the powerful team of the larger firm, “Goliath”. David, “scaled a mountain of documents produced during discovery by working smarter, not harder, through the use of a few savvy people with PC’s, document scanners and litigation software to sift through the mass of material”52. This enabled him to find the key documents with the necessary information needed to prove the patent infringement issue. However, the reality is there are few “Davids” in this society. Thus, by taking out an insurance policy, the small firm may have the capacity to defend themselves from potential litigation. Insurance coverage may be found for patents, trademarks and copyright. By taking strategic action combined with a protective insurance policy, may be a sufficient safeguard.
The law operates hegemonically and shapes social worlds of meaning. Thus the laws impact may be felt where it is least evident and where those affected may have few resources to recognise or pursue their rights in institutional forums. These institutional forums in themselves hinder an individuals access to law and justice, no matter how creative the latter is. Nonetheless, the crushing interest of power, lures legal institutions to adopt certain interpretations of particular circumstances, allowing the victory of a few, and denying justice to others.
Thus, intellectual property, which has become a hot subject in modern society, is driven by a power, namely a “license to litigate”53 to enforce their rights. Intellectual property rights have become an essential corporate asset, maximising profits. Success and power are the authoritative notions, and the words of Mark Twain adjust to this,
“The man with a new idea is a Crank, until the idea succeeds”
Josh Lerner, “Patenting in the Shadows of Competitors” (1995) Journal of Law and Economics 46
Jewkes, Stawera and Stillerman, “The Sources of Invention”, (1969), 2nd Ed. Part V, “The virtues of Ecclecticism.
Jojo Moyes , “BigMac chews out little Mrs McMunchie”, The Independent, 24 September 1996
Daniel F. Perez, “Exploitation and Enforcement of Intellectual Property Rights”, Computer Lawyer, August 1993.
Saturday 3 Feb.2001; htttp://www.atomicdawg.com/funk.html
“Are Intellectual Property Rights Justified?”, http://www.n-a-n-o.com/ipr/extro2/extro2mk.html 1996 PR Newswire Association Inc. October 1 1996, Tuesday, “President Signs Medical Patent Bill; Physicians freed From Threat of New Medical Procedure Patent Lawsuits”, The American Society of Cataractand refractive Surgery.
Brenda Dempsey,Corporate Communications Manager, January 25, 2001, Washington (reuters).
The Cultural Life of Intellectual Property, “Authorship, Appropriation and the Law” Rosemary J Coombe.
National Public Radio, NPR Show, Morning Edition September 30, 1996, “Disputes Rise Over Intellectual Property Rights”
Neil Weinstock Netanel, “Market Hierarchy and Copyright in Our System of Free Expression” Vand. L. Rev. 1879, November 2000
“Exploitation and Enforcement of Intellectual Property Rights”, Computer Lawyer, August 1993, by Daniel F. Perez.
“Why the “Haves” Come Out Ahead: Speculations on The Limits of Legal Change”, 9 Law and Society Review, Fall 1970.
Markus Krummenaker, “Are Intellectual Property Rights Justified?”,http:www.n-a-n-o.com/ipr/extra2extra2ml.html
Robert Gordon, “Some Critical Theories of Law and Their Critics,” in The Politics of Law, 647, 3rd Ed., Basic Books: New York, 1998.
Critical Perspective on Rights, “The Critique of Rights”. http://lawschool.lexis.com/bridge/index.html
International Federation of Library Associations and Institutions – http://www.ifla.org/documents/infopol/copyright/ipmyths.htm
Brian Martin, Department of Science and Technology, University of Wolongong, “Against Intellectual Property”. 3rd February 1995
William Kingston, “The Case For Compulsory Arbitration: Empirial Evidence”, This is an expanded version of a paper read at the Patinnova Conference.
“Intellectual Property Law” Hart and fazzani, 2nd Ed. Plagrave Law Master.
Statutes on Intellectual Property Law, Blackstones 4th Ed.
1 The Cultural Life of Intellectual Property, Rosemary J Coombe.
2 National Public Radio, NPR Show, Morning Edition September 30, 1996, “Disputes Rise Over Intellectual Property Rights”
3 The contract existed between the University and the Corporation.
4 Consider the number of patents some firms receive annually;
5 The argument on the existence of a monopoly, created by intellectual property has been contrasted to the clasical notion of monopoly. While the latter excludes others from a specific market, the former only excludes others from a discreet product or process.
Neil Weinstock Netanel, “Market Hierarchy and Copyright in Our System of Free Expression” Vand. L. Rev. 1879, November 2000
6 In “Exploitation and Enforcement of Intellectual Property Rights”, Computer Lawyer, August 1993, by Daniel F. Perez.
7 Mark Galanter described the great multi-nationals of today, (McDonalds, Microsoft,Coca-cola etc), as “Haves”. Namely, companies with wealth and power in society. Conversely, the “Have not’s”, are the Joe Bloggs, the individual inventor, the exploited employee. “Why the “Haves” Come Out Ahead: Speculations on The Limits of Legal Change”, 9 Law and Society Review, Fall 1970.
8 Markus Krummenaker, “Are Intellectual Property Rights Justified?”,http:www.n-a-n-o.com/ipr/extra2extra2ml.html
9 The requrement for an invention to be patentable, the invention must satisfy all the following requirements; It must be new, involve an inventive step, capable of industrial application and that it is not within one of the excluded categories, s1 (a) – (d) Patent Act 1977, respectively.
10 As will be seen below, this arises out of many factors. Intimidation and threats from large firms or difficulty of enforcement of rights due to lack of financial resources are but a few of these factors..
11 Robert Gordon, “Some Critical Theories of Law and Their Critics,” in The Politics of Law, 647, 3rd Ed., Basic Books: New York, 1998.
12 Ibid. at 657-658
13 It is my opinion that these “social interests” are based on corporate philosophies….profit within the market.
14 Critical Perspective on Rights, “The Critique of Rights”, point 2.
15 Consider the power given to the government, enabling the latter not only to decide which agreements to enforce, but also, what actually counts as an agreement. Moreover, it is for the courts to put these notions into effect. Hence, to what extent it can be said an employee of a large Research and Development Company is equally free to his employer to enter an agreement is a matter of concern and reveals the incoherance of rights.
16 International Federation of Library Associations and Institutions – http://www.ifla.org/documents/infopol/copyright/ipmyths.htm
17 “The Sources of Invention” (1969), 2nd Ed. p. 177- 191
18 See Mark Galanter’s view below, on the practical sides of this argument.
19 Brian Martin, Department of Science and Technology, University of Wolongong, “Against Intellectual Property”. 3rd February 1995
20“ Why the “Haves” Come Out Ahead: Speculations on the Limits of Legal Change”, 9 Law and Society Journal, 1974, at 95.
21 Weber (1954) 188-191
22 Namely, the presentation of claims to the court. Ibid. at 95.
23 Hereafter OS’s
24 Hereafter RP’s
25 Ibid at No. 9, p 98
26 For example, Polaroid was able to virtually force Kodak out of the market, and obtain nearly $1 billion in damages by defending its instant photography business, Polaroid Corporation v Eastman Kodak Co. 17 U.S.P.Q. 2d. 1711 (Fed. Cir. 1985).
27 Daniel F. Perez, “Exploitation and Enforcement of Intellectual Property Rights”, Computer Lawyer, August 1993.
29 Small companies will usually have to start by licensing patents, which is cumbersome in the first place.
30 “Are Intellectual Property Rights Justified?”, http://www.n-a-n-o.com/ipr/extro2/extro2mk.html
31 The website
32 Ibid. “Individual Companies”
33 The RP can hire extra staff
34 A specification will include a precise description of the invention and the best method of performing it.
35 The claim shall-
Define the matterfor which the applicant seeks protection
Be clear and concise
Be supported by the description; and
Relate to one invention or to a group of inventions which are so linked so as to form a single inventive step.
36 If the specification fails to indicate all the features of the invention, the defendant will be able to contend that its activities fall outside the claim of a valid patent.
37 For overstating its abilities.
38 James Dyson may be an exception as he borrowed 600.000 Pounds to set up his own company, using his Georgian house near Bath as security. The Independent, 4th of October, 2000
39 Jewkes, Stawera and Stillerman, “The Sources of Invention”, (1969), 2nd Ed. Part V, “The virtues of Ecclecticism.
40 Jojo Moyes , “BigMac chews out little Mrs McMunchie”, The Independent, 24 September 1996
41 William Kingston, “The Case For Compulsory Arbitration: Empirial Evidence”, This is an expanded version of a paper read at the Patinnova Conference.
42 Josh Lerner, “Patenting in the Shadows of Competitors” (1995) Journal of Law and Economics 463-495.
43 Ibid at 29
44 Ss. 1-5 and 14, 15 Patent Act 1977
45 1996 PR Newswire Association Inc. October 1 1996, Tuesday, “President Signs Medical Patent Bill; Physicians freed From Threat of New Medical Procedure Patent Lawsuits”, The American Society of Cataract and refractive Surgery. Although in the US a medical practitioner was able to patent a medical procedure and obtain royalties from others in the profession using that procedure, this is no longer possible. A Bill was passed by the Senate and signed by President Clinton, prohibiting enforcement against physicians of all medical procedure patents.
46 Brenda Dempsey,Corporate Communications Manager, January 25, 2001, Washington (reuters).
47 Galanter at 103
48 Steven M. Bauer, “Assets and Liabilities in an intellectual property audit”, , Column, May 1995, at p.17
49 A survey conducted by the American Intellectual Property Law Association (AIPLA) indicated that the average company spends up to $ 1 million defending a patent litigation, ibid at p.12.
50 (1999) 2 All ER 299 (CA)
51 This case raised the issue of costs awarded, but also considered the monopoly position held by Collecting Societies, such as the Defendants in this case.
52 Skip Singleton Junior, “Justice For All: Innovative Techniques for Intellectual Property Litigation”, PTC Research Foundation of the Franklin Pierce Law Center, at 616
53 William Kingston “The Case For Compulsory Arbitration: Empirical Evidence”, 2000 Sweet and Maxwell Limited and Contributors.