INTERFACE OF E-COMMERCE WITH INTELLECTUAL PROPERTY RIGHTS Authored By - Apoorva B N
Interface Of E-Commerce With Intellectual Property Rights
Authored
By - Apoorva
B N
LLM
Candidate- Intellectual Property and Trade Law,
School
of Law, CHRIST (Deemed to be) University,
Bangalore.
Abstract
The internet has
developed into a breakthrough technology in today's economy of global
innovation, and it is well known for empowering both consumers and companies
with the benefits of networking at all stages. Intellectual Property (IP) is
arguably the most undervalued element of E-Commerce, although having the
highest value, either because it is less understood or because its significance
in relation to E-Commerce is not readily apparent. Unlike any other platform,
e-commerce frequently involves the sale of products and services that are
dependent on intellectual property and its licensing. Online firms should thus
make earnest efforts to guarantee that their operations are free of IP hazards
that might hinder or even endanger their operations. Having intellectual
property is an asset that is worth more than possessing actual tangible assets.
Additionally, IP plays a role in how e-commerce operates since a variety of
components, including programs, processors, networks, layouts, and routers,
among others, which are all examples of IP that need to be safeguarded for the
Internet to operate. All online and e-commerce enterprises rely on
product licensing to operate. Due to the wide range of technologies
required to produce a product, the majority of online firms either contract out
the creation of some aspects or share technology through licensing agreements.
Businesses that rely on e-commerce generally possess patent portfolios and
trademarks to increase the value of their online operations and view
intellectual property (IP) as their most important asset. The digital economy
and the realm of technology make this the most obvious. This paper therefore
attempts to understand the role of IP in e-commerce and its significance,
specific IP issues arising in e-commerce activities and how they can be
countered.
Keywords: E-
commerce, intellectual property, technology, assets, protection and
enterprises.
Table of Contents
What
are Intellectual Property Rights?
Intellectual property
(IP) is a legal term that has been attributed to industrial property,
copyrights, and other rights in a related industry. It is a process whereby
someone invents something, produces literary or artistic works, generates
designs, symbols, names, or visual representations that are employed in trade.
Intellectual property is an intangible asset that results from intellect,
according to the Oxford Dictionary[1].
There are many different types of intellectual property, but a few important
ones include copyrights, trademarks, and patents. IPR also covers the creation
of new music or song lyrics, a start-up business, and a variety of other
things.
What
is E-commerce?
The term
"ecommerce" refers to businesses and individuals that purchase and
resell goods and services online. E-commerce can be done on computers, tablets,
cellphones, and other smart devices, and it operates in a variety of market
categories. E-commerce transactions make almost every good or service
conceivable accessible, including books, music, airline tickets, and financial
services like stock trading and online banking. The U.S. Department of Commerce
considers online marketplaces, auction sites, transactional websites, and
websites with static content as ecommerce businesses[2].
Interference
of E-commerce with IPR
With the rapid
advancement of technology, human dependency on it has become inevitable in the
modern world. E-commerce has made its way into our daily lives at every pick
and instance. In the e-commerce arena, Intellectual property is a fundamental
aspect that needs to be protected as it a huge value- bearing asset to an
e-commerce entity. Few entrepreneurs have paused to think about who owns the
patent on a business approach or process their site is using because innovation
has proliferated so quickly in recent years. Because of how nimble the Web has
been, many businesspeople have disregarded trademark laws and registered domain
names that could be mistaken for the registered trademarks of other
organizations. In conclusion, the Internet has shown its ability to undermine
established interpretations and applications of intellectual property law that
have been evolved over the past 200 years. The main moral dilemma surrounding
e-commerce and intellectual property is how we (as individuals and as business
professionals) ought to handle other people's property.
From a sociological
perspective, the primary queries are: Does intellectual property protection
still have significance in the era of the Internet? What benefits or
disadvantages does it bring to society for intangible thoughts to be treated as
property? From a political standpoint, we must consider how the Internet and
e-commerce may be governed or regulated to safeguard the concept of
intellectual property while also promoting the expansion of e-commerce and the
Internet.[3]
Trade secrets are protected under intellectual property law from being
revealed, which also means unfair competitors are shielded. Because of this,
owning intellectual property is an asset that is worth more than possessing
actual assets. The digital economy and the realm of technology make this the
most obvious.[4] The hard
work of someone may have been stolen and circulated throughout the world
without incurring any costs for the creator's time spent on the innovation if
there were no intellectual property rules and statutes guiding the operation of
IP laws.
With the basic understanding
of the two concepts, we now proceed to attempt and understand the role of IP in
e-commerce and its significance, specific IP issues arising in e-commerce
activities and how they can be countered.
Research methodology
The methodology adopted in
this work is the doctrinal mode of research. This paper is an attempt to
understand the role of IP in e-commerce, specific IP issues arising in
e-commerce activities and how they can be countered via the existing regulatory
regime.
Need for Protection of IP in e-commerce
IPR in E-commerce is
quite an important aspect. IPR stands for intellectual property rights, which
are the privileges that allow a company to use its invention to outperform
rivals in the market and reap financial rewards. Due to the fact that most
people are unable to comprehend it and because its linkages to e-commerce are
not readily apparent, despite its great worth and significance, it is
frequently disregarded or overlooked. IP and E-commerce are, nevertheless,
completely intertwined. E-commerce often entails the sale of goods or services
based on licensed intellectual property. Music, photos, graphics, software,
content, and so many other sorts of intellectual property can all be
transferred through an e-commerce platform in the realm of digital goods. IPR
is extremely critical in each of these situations since it's important to
safeguard the items' worth. Tools like intellectual property laws and
technology security measures are used to provide the protection. IPR in
e-commerce is particularly important since IP theft can potentially kill an
online firm if it is prevalent.[5]
The two fundamental areas
related to intellectual property that need to be addressed are—
1. Protection of one’s own intellectual
property
One of the most common mistakes made
by intellectual property owners is disclosing their assets before seeking legal
protection for them. Similar to this, in many jurisdictions, disclosing trade
secrets nullifies any protection.[6]
2.
Infringing on another person's intellectual property
E-commerce websites that deal in the
purchasing and selling of goods frequently violate intellectual property rules
by displaying product descriptions and photographs. The following are some
requirements that must be met in order to avoid violating intellectual property
laws—
·
It
needs to be one's own original work.
·
The
author has given his or her consent for use.
·
It
must fall under the public domain's purview.
·
It
is protected by fair usage.[7]
Role of
IPR in E-Commerce
Understanding the
function of intellectual property in e-commerce is more crucial than ever
thanks to ongoing advancements in the internet's technological infrastructure.
IPR can be used in e-commerce in four different ways[8]:
1. Protection of business interests of
an entity
In essence, intellectual property
laws protect a company's and its entities' business interests from unfair
competition. Particularly in this digital economy, the absence of IP practises
and rules can lead to a number of IPR infractions. As a result, everything from
software to design to music could be stolen, copied, and distributed
everywhere, and the creators may not be compensated for their original works.
However, businesses can protect their rights by adhering to IPR regulations in
e-commerce.
2. Protecting important elements
A company's vital digital and
technical assets are protected by intellectual property law in e-commerce.
These could include networks, routers, plans, programmes, semiconductors, and
other things. These elements are all distinct types of intellectual property
that need to be protected in order for the internet to work properly. IPR in
e-commerce also protects crucial elements with this in mind.
3. Safeguarding products and patent
licenses
Patent and product licensing is the
normal foundation for all online and e-commerce firms. The majority of internet
businesses opt to outsource the creation of a few components or share their
technologies through license agreements because it requires numerous distinct
technologies to generate a single product. The agreement is basically a set of
rules and guidelines for IPR protection.
4. Protection of trademarks and IP
Portfolios
The most important asset for a
company operating in the e-commerce industry is intellectual property. A
portfolio of patents and trademarks that they normally possess adds to their
company's worth. Thus, these patents, portfolios, and trademarks are protected
by IPR rules in e-commerce.
Elements
covered by IPR in E-commerce, under various models and laws
IPR in retail and
e-commerce pertains to the purchasing and selling of goods via a physical store
and an online store, respectively. Owners of retail and online businesses must
thus safeguard a variety of intellectual assets. The following are components
of IPR in e-commerce that are protected by various models and regulations[9]—
1. Patents and utility models safeguard
key internet technologies like search engines and e-commerce systems.
2. Websites frequently contain a number
of hidden components that are protected by various trade secret laws, including
secret visuals, object and source codes, algorithms, and programmes, technical
descriptions, logic and data flow charts, user manuals, and the contents of
their databases.
3. An e-commerce website's entire design
is likewise shielded by copyright law.
4. Under the appropriate Industrial
Design law in their jurisdiction, businesses are also allowed to protect their
computer-generated displays, visual signals, websites, and graphical user
interfaces.
5. Depending on the country's IPR rules,
specific software, including the text-based HTML code used by websites, is
protected under the Patent Law or the Copyrights Act.
6. The Copyright Law protects all of the
information on the website, including any written or visual materials, films,
images, or other visuals.
7. Companies can use the Trademark Law
to protect their brand names, product names, logos, domain names, and other
similar identifying indications posted on their websites with reference to both
IPR in retail and e-commerce.
8. Companies can use copyright laws or country-specific
database legislation to protect their databases under e-commerce under IPR.
Important
Intellectual Property Issues Caused
by E-Commerce
1. Liability of ISPs (Internet Service Provider) under
the Copyright law
The effective
transmission of works of intellectual property onto the internet has been made
possible by digitization of technology. An E-Commerce business mainly
relies on online sales, which leverages a substantial database of book,
movie, and music titles and an easy-to-use purchase system to draw customers.[10]
These products are all examples of copyright works. The E-Commerce businesses
run the danger of violating copyright and associated rights as the internet
service providers that offer transit, content access, and hosting services.
2. Patents
With a
valid patent, the owner has the exclusive right to prevent anybody else from
creating, offering for sale, or utilizing the invention within a specific time
frame and geographical area. Because e-commerce is closely related to fields
that have lately seen active patent activity, such as telecommunications,
semiconductors, business techniques and software, etc., patents are
particularly significant for e-commerce businesses. The development of patents
allows E-Commerce companies to expand their markets and create a platform where
licensees can develop and differentiate their products. Additionally, it
enables E-Commerce companies to form strategic alliances with other businesses
through licensing and thereby enhance their portfolios of patents.
3. Trademarks and Domain Names
A trademark, which may be the most
valuable asset a company owns, serves as the "front desk" of a
company from the standpoint of marketing and is used to promote its products.
Since the domain name is a common tool for contact with clients and aids in
identifying the source of goods and services, in the context of ECommerce, it
can be the most distinguishing trademark of a business. However, the growth of
online commerce has also given rise to a new type of trademark infringement
known as "cybersquatting"—the unauthorized use of a domain name. [11]
According to the World Intellectual
Property Organization ("WIPO") report, 109 nations submitted 3036
complaints about cybersquatting to its arbitration center in 2016. In domain
name disputes, trademark owners have filed more than 36,000 lawsuits with WIPO
between 1999 and 2016.[12]
Francis Gurry, the Director General
of the WIPO, has advised trademark owners to maintain their vigilance due to
the rapid rise of e-commerce and the rising number of cybersquatting cases
around the world.[13]
Methods of Countering IP Rights Infringements[14]
Owners of e-commerce
businesses can enforce their intellectual property rights through a variety of
techniques. For instance, they might decide to deploy artificial intelligence
and other techniques to find such infringement. Many of the top e-commerce
corporations in the world are currently engaging in this practice; when such
violations are discovered, the offending products will be removed right once,
and punitive action will be taken.
1.
Intellectual Property Audits
An IP audit is an audit of all the
intellectual property owned by a business. It covers everything that an owner
owns, including trademarks, copyrights, designs, and any other kind of
intangible asset. Trade secrets with commercial significance, such as plans for
development or technical advancement, must be included. All agreements that can
affect currently owned intellectual property should be in writing. Such
contracts include non-disclosure agreements, contracts with design firms, and
agreements with employees.[15]
2. Intellectual Property Rights and
E-Commerce Business Sale/ Investment[16]
Anybody who intends to
sell their online store must make sure their IP rights are completely
safeguarded. Due to the importance of IP rights in the world of e-commerce, a
company that has all of its rights in order will draw in more customers.
Similarly, having one’s IP rights protected will help in attracting investors
for e-commerce businesses. Investors will be slightly demotivated if a
company's intellectual property rights are not sufficiently protected. A
company with protected intellectual property rights will, nevertheless, attract
investors who will provide it with a new source of income.
Conclusion
Therefore, there is an
undisputed interface between E-Commerce and Intellectual Property Rights.
Protecting IP rights in today’s fast-moving world that is highly dependent on
E-commerce entities on a day-to-day basis becomes extremely significant in order
to avoid infringement issues failing which, a massive loss one of the most
valuable assets of any business entity, their Intellectual Property Protection
would occur. With business entities making their ways into the internet world
by way of digitalization and advancement of technology, it becomes even more
critical to safeguard an e-commerce entity’s IP—ranging all the way from
website protection to brands, designs and inventions.
***************
[1] Oxford Dictionary, ‘Intellectual
property’, https://www.oxfordlearnersdictionaries.com/definition/english/intellectual-property#:~:text=%2F%CB%8C%C9%AAnt%C9%99%CB%8Clekt%CA%83u%C9%99l%20%CB%88pr%C9%91%CB%90p%C9%99rti%2F,prevents%20other%20people%20from%20copying
(last visited on Nov. 14, 2022)
[2] International Trade
Administration, Types of eCommerce Websites, "eCommerce Website Types." (last visited on Nov. 14, 2022)
[3] E-Commerce and Intellectual
Property, exy intellectual property, https://www.exyip.com/2021/02/23/e-commerce-and-intellectual-property-rights/
(last visited Nov.14, 2022).
[4] Ajeet Khurana, Intellectual
Property in Ecommerce: Your Greatest Asset, THE BALANCE (28.02.2017), www.balance.com/intellectual-property-in-ecommerce-your-greatest-asset-1141708
." (last visited on Nov. 14, 2022)
[6] Ajeet Khurana, Intellectual
Property in Ecommerce: Your Greatest Asset, THE BALANCE (28.02.2017), www.balance.com/intellectual-property-in-ecommerce-your-greatest-asset-1141708
." (last visited on Nov. 14, 2022)
[7] Ibid.
[8] IPTSE, Exploring the role of IPR
in E-Commerce, https://iptse.com/exploring-the-role-of-ipr-in-e-commerce/#:~:text=IPR%20in%20e%2Dcommerce%20is,market%20leadership%2C%20over%20its%20competitors,
." (last visited on Nov. 14, 2022)
[9] Ibid.
[10] Ke-Xin
YANG And Jing-Jing ZHENG, “Intellectual Property Management of
E-commerce Enterprises—From a Policy Driven Perspective”, Advances in
Economics, Business and Management Research (AEBMR), Vol. 54, file:///C:/Users/LENOVO/Downloads/25897859.pdf
(last visited on Nov. 14, 2022)
[11] The Interpretation of the PRC
Supreme People’s Court Concerning the Application of Laws in the Trial of
Trademark Disputes (2002), Article 1: registering a domain name which is
identical or similar to the registered trademark of another person and engaging
in E-Commerce via this domain name, if possible to cause the confusion of
consumers, it constitutes trademark infringement.
[12] Annexes to WIPO Press Release
PR/2017/805, available at:
http://www.wipo.int/export/sites/www/pressroom/en/documents/pr_2017_805_annexes.pdf
(last visited Nov. 14, 2022).
[13] WIPO Cybersquatting Cases Hit
Record in 2016, Driven by New Top-Level Domain Names, Geneva, March 16, 2017,
PR/2017/805, available at: http://www.wipo.int/pressroom/en/articles/2017/article_0003.html
(last visited Nov.14, 2022).
[14] E-Commerce and Intellectual
Property, exy intellectual property, https://www.exyip.com/2021/02/23/e-commerce-and-intellectual-property-rights/
(last visited Nov.14, 2022).
[15] E-Commerce and Intellectual
Property, exy intellectual property, https://www.exyip.com/2021/02/23/e-commerce-and-intellectual-property-rights/
(last visited Nov.14, 2022).
[16] Ibid.