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Letters and Comment

November 2006

WIPO Magazine welcomes letters commenting on issues raised in our articles, or on other developments in intellectual property. Letters should be marked "for publication in the WIPO Magazine" and addressed to The Editor at WipoMagazine@wipo.int or to the postal/fax address on the back cover of the Magazine. Please include your postal address. We regret that it is not possible to publish all the letters we receive. The editor reserves the right to edit or shorten letters. (The author will be consulted if substantial editing is required.)

Universities and technology transfer

Commercialization may not be the answer

I write to take issue with the basic premise underlying your recent articles on the use of intellectual property by universities. (Technology Transfer and Development; Putting Policies in Place. Issue no. 2006/5)

The fundamental question for a public university’s IP policy should not be: ‘How can the commercial potential of the property be maximized?’ but: ‘How can the transfer of new ideas be maximized?’ Commercializing IP is only one, and often the worst way to transfer new ideas. Concentrating on commercializing IP encourages universities to over-value their property leading to protracted negotiations through lawyers and other intermediaries which frustrates rather than facilitates the free flow of ideas necessary for research and innovation to flourish.

Revenue from licensing IP in fields other than biotechnology is a trivial proportion of university revenue. And of course, licensing revenue isn’t all surplus or ‘profit’ – commercialization units are very expensive with their business development managers, IP lawyers and accountants. They also impose heavy indirect costs on researchers in explaining their research and its implications to intermediaries. Joshua B. Powers reported in The Chronicle of Higher Education (September 22, 2006) that more than half of U.S. universities consistently lose money on technology transfer.

As the Australian policy and management consultant John Howard observes, researchers and research organizations will, except in very rare situations, earn more from being paid for their work input in contracts and consultancies than from licenses and royalties flowing from IP or from income earned in spin-out companies.

I therefore suggest that – with the exception of biotechnology – public universities simply give away most IP as a contribution to the general good. This could be subject to universities including in their intellectual property licensing agreements a standard ‘blockbuster’ or ‘jackpot’ clause that provides that should their intellectual property contribute to ‘blockbuster’ revenues of, say, $50 million over 10 years, there would be a sharing of revenue determined by a nominated commercial arbitrator.

From Gavin Moodie, Principal Policy Advisor, Griffith University, Australia.

…but technology transfer is about more than revenue generation

As a Vice President of AUTM (the Association of University Technology Managers), I would stress that most university technology transfer offices do not have a primary goal of revenue generation. Professor Ogada (IP in Universities: Putting Policies in Place - WIPO Magazine Issue no. 5/2006) captures the goals of technology transfer well, including: promoting the dissemination of knowledge, and assuring stakeholders that risks, benefits and credit are distributed equitably.

AUTM does not tend to use revenue generation as an indicator of benefit. Rather, we use information about how the university distributes revenue received under licenses to benefit the university community; how products which are brought to market benefit everyone; and how innovative university-led licensing programs can push an industry or technology forward (among other measures).

A blanket "give it away" approach, on the other hand, usually benefits large companies, who are able to create and patent improvements to the "free" IP more rapidly than other organizations or individuals. For developing economies, or early-stage technology of all kinds, "free" can come with a heavy cost. Free still can achieve the best outcomes for everyone, but strategy is best determined on a case-by-case basis. Without resources to sustain a "free" commons, often only those with resources can benefit from what was released.

Over 500 new products became available last year as a result of licenses from U.S. and Canadian academic technology transfer efforts. More intangibly, universities benefit from the interaction with companies, to see how academic thinking and solutions can be applied to commercial problems. Ironically, universities also benefit from our academic community's greater awareness of IP, as we live in a world where IP plays a greater role, and companies, in their interactions with universities, demand greater accountability.

Ultimately, universities are increasingly being asked to demonstrate to their community the benefit they provide in the knowledge economy. U.S. and Canadian universities have over 28,000 active licenses at this time, which are all relationships that academic R&D centers have with organizations who have committed to using a given technology for the public benefit. Many are also members of PIPRA (Public Intellectual Property Resources for Agriculture), which encourages licensing with terms that allow agricultural technologies to be made more easily available for development and distribution of subsistence crops for humanitarian purposes in the developing world and specialty crops in the developed world.

From Dana Bostrom, Associate Director, Industry Alliances Office, University of California, Berkeley

Starting out

I read with interest the articles on university IP policies and technology transfer in the September-October edition of WIPO Magazine. At the Universidad Nacional de Mar del Plata in Argentina, we are currently taking the first steps along this road after creating an IP Office within the Technology Transfer secretariat.

Our Governing Council has recently approved a regulation which defines the scope, players, and procedures regarding the protection of any intellectual creation resulting from scientific or cultural research carried out within the University and/or with third parties. We have adopted an active IP awareness policy to reach those involved in this process, from the researchers, teaching staff and students, to members of the decision-making bodies. We are running conferences in the different academic units in order to explain the objectives, implications and advantages of IP protection, as well as of technology transfer between the university and external social/commercial milieux. We have also applied to join the WIPO University Initiative in order to appoint a coordinator and benefit from relevant IP reference materials.

So we are in the early phase of what will be a lengthy process, but one which, it is already clear, will bring economic, scientific and developmental benefits, not only to our University, but also to our broader society.

From: Dr. Bernardo Marcos Diez, Secretariat for Technology Transfer (New Technologies Research Group), Faculty of Law, Universidad Nacional de Mar del Plata, Argentina.

The perfume debate

Is copyright the right route?

The article Copyright in the Courts: Perfume as Artistic Expression? (Issue 5/2006) raises the uncertain prospect, from a legal perspective, that any industrial product could be converted into a work eligible for protection under copyright legislation.

In this respect, we are left with the sense that the interpreters of the law are diverting the purpose of copyright. While the list of what may be considered works according to international copyright law is merely declaratory, that does not necessarily imply that everything is subject to protection. There are existing requirements which define the object of copyright.

In the specific case of perfumes, it should be stressed that what could potentially be protected is the chemical formula of which the fragrance consists, rather than the smell itself, since the consumer often cannot perceive slight differences in smell. This is similar to the case of culinary recipes, whereby the recipe – not the taste – is protected.

Finally, from a business point of view, copyright protection is not the most profitable option for parfumeurs, since once the term of protection for the creator expires, the "work" enters the public domain, after which it is impossible to take action against unlawful use.

In Colombia it is possible to register smell marks in accordance with the requirements of Decision 344 of the Commission of the Cartagena Agreement (Article 81). This may be a more effective option, allowing firms such as Lancôme greater scope commercially and in the long term.

From Catalina Castro Gaitán, Palacio, Arenas & Vanegas, Legal Corporate Consultants, Bogotá D.C., Colombia

What the French courts found


In his account of the Dutch ruling on copyrighting perfume, Professor Koelman refers briefly to a French Supreme Court decision published just three days before the Dutch case. The French decision in fact shook up previous French case law in this area. The background is as follows.

The eligibility of perfumes for copyright protection was first introduced into French practice through a decision of the Paris first-degree court dated September 24, 1999.

The issue resurfaced five years later in a case involving L’Oréal and several other perfume companies which sued the cosmetics firm Bellure NV for copyright infringement, claiming that Bellure had reproduced their fragrances under different brands. The Paris first-degree court regarded perfumes as artistic works, comparing them to musical compositions. But the claim was rejected because it lacked consistency. Extensive evidence of infringement was subsequently presented in the context of the appeal, including chemical analysis identifying 50 elements common to the two scents, olfactory tests on members of the public, an expert report by a professional "nose," and gas chromatography.

In its ruling on January 25, 2006, the Court of Appeal clearly held that perfumes were eligible to copyright protection, considering that (i) they are identified through their smell "architecture" and (ii) the unusual and very specific combinations of essences show the creative work of their author.

But then came the latest decision of the French High Court on June 13, 2006, in which the judges retained that the creator of a perfume was not covered by copyright law. As this decision was issued by the High Court, the question is settled in France as far as perfume creators are concerned. The question of counterfeiting, however, remains open as this was not included in the legal case submitted to the French High Court.

The extension of copyright grounds to perfumes would avoid the difficulties inherent in obtaining trademark registration for "smell-marks." But it could also have negative effects, inasmuch as it increases the scope for infringement. Either way, any perfume considered insufficiently original to merit protection under copyright law would certainly risk seeing multiple copies emerge.

From Franck Soutoul and Jean-Philippe Bresson, European Trademark Attorneys, Inlex Conseil, Paris, France, and reporters for the IP Talk legal newsletter.

Football scores high

Each World Cup brings with it new IP issues and ever higher returns from IP assets. Your article IP-related revenues and on the patented technologies used in the recent 2006 World Cup (Issue no. 4/2006) was of particular interest. Learning how much FIFA profited from clever exploitation of trademark and broadcasting rights was astonishing.

The value of IP rights increases by leaps and bounds as technology advances and IP owners become more aware of the existence of IP in every aspect of their product or service. The level of IP awareness by the average layperson in Malaysia is lower than in the U.S. and Europe. However, the Malaysian Ministry of Domestic Trade and Consumer Affairs has been active in holding events to provide more knowledge to the public about the importance of IP. Your FIFA article helps in raising public awareness, by aptly portraying how IP has an impact in many aspects of our lives, including sports.

The fact that there were 2,500 violations by counterfeiters in the 2006 World Cup even before the first match began is worrying. With the Asian Games 2006 and the Asian Cup 2007 around the corner, it seems that efforts to enforce IP rights should be at the forefront of the organizing strategy.

From P. Kandiah, Patent and Trademark Agent, KASS International Sdn Bhd, Kuala Lumpur, Malaysia


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