Intellectual property creations of the mind: inventions, literary and artistic works

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CHAPTER1

INTRDUCTION

Problem Statement

Intellectual property (IP) refers to a creations of the mind: inventions, literary and artistic works, and symbols, names, images, and designs used in commerce. Nowadays, the intellectual property plays an importance role in business worldwide and a current business policy trend change from selling a big volume to decrease production capital to create high quality and unique product.  This policy has advantage over a competitor in term of commercial investment because people who own intellectual property will have an exclusive right to use it and it can increase value in product.

Counterfeit is an imitation, usually one that is made a consumer perceive that the copy one is an genuine. Counterfeit products are usually produced with the intent to take advantage of the superior value of the imitated product. The word counterfeit frequently describes as the imitations of works such as art, clothes, software, pharmaceuticals, watches, electronics and brands. Moreover the TRIPS agreement stated that “counterfeiting and piracy are defined and used in various ways, depending on the country and the context and  in general counterfeiting typically relates to infringements of trademarks, whereas piracy is usually associated with infringementsof copyright or related rights. In addition, both terms are normally used in connection with cases of intentional infringements of intellectual property rights, related to commercial purposes of the infringer, or causing significant economic harm to the right holder” (wipo, 2011)

Now, the intellectual property counterfeiting is a global problem. A article in The Economistinforms that the spread of counterfeiting: Knock-offs catch on, cites an organisation for Economic Co-operation and Development (OECD) statistic that the international trade in counterfeit and pirated goods was worth around $250 billion in 2007. Moreover, the article also quotes the International Anti-Counterfeiting Coalition (IACC), a lobby group, who says the true figure is actually closer to $600 billion, because the OECD's estimate does not include online piracy or counterfeits that are sold in the same country as they are made. Counterfeit goods make up five to seven percent of world trade, according to the IACC.

According to the counterfeit is a global problem, there are many global leader and important person concerned the problem and provided cooperation regarding the stopping counterfeit. Thus, in the Sixth Global Congress on Combating Counterfeiting and Piracy Opens in Parisin 2011, Mr. Kunio Mikuriya, Secretary General of World Custom Organization, states that “to successfully tackle counterfeiting and piracy requires committed international cooperation and coordinated national action and the public-private partnership which underpins the Global Congress is the ideal platform for finding innovative solutions to the threats that counterfeit and pirated goods pose to consumer health and safety”. Mr. Jean-Guy, Secretary of International of Chamber Commerce, stated that “counterfeiting and piracy continue to generate massive economic and employment dislocations at a time when governments are most hard-pressed to maintain economic stability and create job despite more visibility, more programs and more cooperation among various stakeholders, the problem continues to escalate and new research to be reported at the Congress will show that the total impact of this illicit trade in fakes is staggering, with more than US$1-trillion in annual losses to global economies, governments and consumers and potentially more than 2 million jobs at risk. It is essential that all stakeholders renew their commitment to find new and creative solutions” and ICC, through its BASCAP program is doing that, and we will introduce new initiatives at this Congress providing new data, new support for the role of IP in driving innovation and new programs to educate consumers on why they should stop buying fakes. INTA President Gerhard Bauer said that “counterfeiting and piracy cost governments and businesses billions of Euros in revenue each year, and the social and health risks they have on the public are alarming. In today's interconnected world, these risks are no longer isolated to one country, region, demographic or economic class.” This is why the Global Congress on Combating Counterfeiting and Piracy is so important. It allows committed governments and organizations from all over the world to strengthen their coordinated efforts to combat counterfeiting, and to further educate the public on the economic, social and health risks posed by these crimes.

The counterfeit goods can be dangerous for customer because the counterfeiters usually do not comply with health and safety standard. Therefore, counterfeit products can be hazardous to the health and safety of consumers. In addition, it is difficult for consumer to find out if the products comply with the safety regulations. For a number of goods, the risk consists in the products containing substances which have not been approved. These include clothes or toys which contain illegal dyes or hygienic products containing illegal chemical substances. Contact with these products may sometimes lead to allergic reactions.Examples of the CE mark being misused also exist. The CE mark on a product signifies that the product is manufactured to meet the joint European minimum standard of health and safety. Many products cannot be marketed in Europe, unless they got a CE mark. The certification system includes toys, building materials, and electrical and medical products. These days counterfeiting is so professional that the CE mark is copied alongside with products and trademarks. Thus, the CE mark on a counterfeit product is not a guarantee that the product meets the European standard. e.g., counterfeit electronics and machines may pose a safety risk, because they may break down, explode, self ignite, shock, etc. (stoppiraterne, 2010)

Brian Duggan, a director with the Motor & Equipment Manufacturers Association (MEMA), said that “counterfeiting cause economic harm, defrauds consumers, constitutes unfair competition to legitimate business and poses a danger to public health and safety” (Counterfeit Auto Parts: A Growing Industry Epidemic, 2007)

The U.S. Chamber of Commerce revealed that Ford alone is losing about $1 billion annually from counterfeit auto parts. "And that doesn't include the health and safety ramifications of fake or faulty items such as auto glass, brakes, tires, suspension and coupling mechanisms, and even seat belts. Driver safety is simply not quantifiable, (Counterfeit Auto Parts: A Growing Industry Epidemic, 2007)

Residents in North Somerset are being warned of the dangers of buying illicit or counterfeit cigarettes and tobacco from unauthorised outlets. The two local men, both in their 60s, received cautions fromour Trading Standards service after the conclusion of an investigation following a seizure of dangerous cigarettes from a car boot sale in Weston-super-Mare. Trading Standards are so concerned that these dangerous cigarettes are circulating on the local black market that they are asking the public to report the sale of cheap cigarettes or tobacco. The brands seized included Lambert and Butler, Raquel, Palace, Richman Royal, MG Gold, Drum, Golden Virginia and Cutters Choice. Analysis carried out on the seized cigarettes indicated that they all grossly exceeded the permitted levels of both tar and carbon monoxide, yet were considerably deficient in the declared level of nicotine. The worst example exceeded the permitted levels of tar by 86% and carbon monoxide by 82%, yet had some 56% less nicotine content than was indicated on the pack. These results clearly demonstrate that illicit or counterfeit tobacco products, being unregulated and therefore untested, can be both very unsafe and of a very poor quality. (North Somerset council, 2010)

In Thailand, intellectual property consist of patent, petty patent, trademark and copyright, trade secret, traditional knowledge and etc. Thailand faces counterfeit problem in intellectual property as well as other countries. Thailand's economic will turn down due to the counterfeit goods. Moreover, the enterprise can not compete with the counterfeit goods which have lower cost. Third, the government loses tax revenue annually approximate more than hundred million Baht. (The Royal Thai Customs, 2011) At the present, counterfeit goods is not only brand name product but also consumer goods in daily life. In addition, Thailand was perceived as a counterfeit goods producing country.

From table 1, it shows that there are three kinds of intellectual property rights violation; copyright violation, trademark violation, patent violation and controlling the cassette business and television device violation. The table shows that the number of materials seized from suppression from 2006 to 2008 increase continuously even the government tries to suppress.  It means that there are many counterfeit goods in the market. The question is “Why there are still counterfeit goods in market while the government has suppressed continuously” Due to the economics theory, the supplier produce goods because of demand from consumer. So the suppression is the last solution to stop people buying counterfeit goods and the best solution is to provide the public awareness effectively. To study of consumers behavior helps the government can improve strategy to stop buying counterfeit goods and the moral reasoning is one of consumer behavior that we need to know and use the appropriate strategy to stop them buying counterfeit goods.

Table 1: The Statistics on Suppression of Intellectual Property Rights Violation

The result of counterfeit goods affects to consumer, entrepreneur or creator and government. First, the consumer will get danger from counterfeit goods. Moreover, the consumer will waste money to buy cheap product but later they realize that the real values of product bought is below the level of the price paid. Second, the entrepreneur will competes directly with the counterfeit of their product which make them lose a huge in sales because the customer will buy the counterfeit goods due to the lower cost. They spend their money or budget to protect the reproduce their product instead to spend money for development of product. Then the creator will have no motivation to create a new product and stop creating finally. Then there is no innovation goods in market. Third, the government will lose the tax revenue and lose national budget from suppression instead to develop other thing such as intellectual property education. Moreover, the profit from counterfeit goods are used in support other illegal activities and lead to the crimes.

At the present, the Department of Intellectual Property is a core organization to responsible for (1) providing efficient protection of intellectual property (2) safeguarding intellectual property rights in a fair manner (3) promoting creation  and commercial exploitation of intellectual property (4) Strengthening knowledge and understanding related to intellectual property (The Department of Intellectual Property. 2011). In addition, the Department of Intellectual Property has cooperate with other government organization such as the Royal Thai Police, Custom Department, the Department of Special Investigation to suppress the counterfeit goods Currently, the Department of Intellectual Property use methods to stop piracy by doing suppression or establishing penalty and promoting public awareness. However, there is no evidence prove that which method will be the most effective for stopping piracy. So the study of moral reasoning toward buying or not buying counterfeit goods helps us to know the best method to stop piracy accurately.

Human behavior refers to the range of behaviors exhibited by humans and which are influenced by two factors: attitudes towards the behavior; the influence of social environment. (oregonstate.edu, 2011)

At the foundation of our moral thinking is our understanding that some things are worth doing or pursuing for their own sake. It makes sense to act on them even when we expect no further benefit from doing so. When we see the point of performing a friendly act, for example, or when we see the point of someone's studying Shakespeare or the structure of distant galaxies, we understand the intrinsic value of such activities. We grasp the worth of friendship and knowledge not merely as means to other ends but as ends in themselves. Unlike money or insurance coverage, these goods are not valuable only because they facilitate or protect other goods. They are themselves constitutive aspects of our own and others' fulfillment as human persons. Of course, feelings and emotions can and do motivate our actions. But the point here is that certain intrinsically worthwhile ends or purposes appeal not merely to our emotions but also to our understanding (what Aristotle called our "practical reason"). A complete account of human action cannot leave out the motivating role of reasons provided by these ends or purposes, which are sometimes called "basic human goods." (SDC News, 2011)

The psychologist states that every behavior is caused. Human behavior is from reason of body or environment. To analysis human behavior is used for understand the factors which indicate the way of behavior, called motive. Moreover, understanding human behavior is a basic of understand all phenomenon in the society. There are two factors which indicate behavior. First factor is personal characteristic such as believe. It means people think about anything which may be right or wrong and the believe comes from the seeing, reading or value related the human behavior. Second, social influences on human behavior.

Buying or not buying counterfeit goods is one of human behavior and the reason is one motive to express the behavior and there is no consumer's demand, there is no supply suddenly. If the Department of Intellectual Property wants to stop people to buy counterfeit, the Department of Intellectual Property should understand the reason of people regarding buying counterfeit goods. Thus, this study used the theory of Kohlberg on moral development as a framework to study reason of people toward buying or not buying counterfeit goods.

Objectives

  1. To study moral reasoning of people toward buy or not buy counterfeit goods.
  2. To compare moral reasoning toward buy or not buy counterfeit goods among people with different demographic factors

Expected Results

  1. The result of the study will produce benefit for the government organization and education institute to use the result of moral reason toward buying or not buying counterfeit goods
  2. The result of the study will be useful for the government organization and education institute to educate and implicate strategy of stopping buying counterfeit goods.

Scope of Study

  1. The target population:  the people in Bangkok and metropolitan area who buy counterfeit goods or not buy counterfeit goods.
  2. The primary data collect from the self-administrated questionnaire and e-survey during 1 March until 30 March 2011.

Definition

There are several terms which are often use throughout this study as follow:

  1. The moral reasoningdefined as the reasons for against moral belief in an attempt to make decision toward buying or not buying counterfeit goods. There are 6 stages in moral reasoning; obedience and punishment orientation, naively egoistic orientation, good-boy orientation, authority and social order maintaining orientation, contractual legalistic orientation, conscience or principle orientation
  2. Obedience and punishment orientation was defined as people express particular behavior because of avoiding punishment. In this study, people buy or not buy counterfeit goods because of not getting serious penalty or afraid the penalty  such as fine and imprison.
  3. Naively egoistic orientation was defined as people express particular behavior because of getting benefit themselves. In this study, people buy or not buy counterfeit goods because of getting the brand product with low cost or getting low quality product.
  4. Good-boy orientation was defined as people express particular behavior because they don't need closed people feel disappointment. In this study, people buy or not buy counterfeit goods because of  making or not making closed person such as friend and family regret and disappoint.
  5. Authority and social order maintaining orientation was defined as people express particular behavior because they don't want to break the law. In this study, people buy or not buy counterfeit goods because of violating or not violating the law.
  6. Contractual legalistic orientation was definedas people express particular behavior because they don't want to violate other rights. In this study, people buy or not buy counterfeit goods because of violating or not violating other right.
  7. Conscience or principle orientation was defined as people express particular behavior because of moral. In this study, people buy or not buy counterfeit goods because of not breaking the moral or not the right thing.
  8. Intellectual Property refers tocreations of the mind: inventions, literary and artistic works, and symbols, names, images, and designs used in commerce. (wipo, 2011) The intellectual property in this study consists of trademark, copyright and patent.
  9. Infringement refers to the violation of a law or a right. (answer, 2011) This study focus on intellectual property infringements such as: copyright infringement, trademark infringement and patent infringement.
  10. Counterfeit goods refer to an imitation of goods, usually one that is made with the intent of fraudulently passing it off as genuine. Counterfeit products are often produced with the intent to take advantage of the superior value of the imitated product.

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