Intellectual Properly Rights and E
conomics | Economics-I Tutorial | (Rough Copy) |
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Introduction:
The patent system aims to confer Intellectual Property right to an innovator who has created an economic innovation which provides a better way to make something or something better to make. When an innovator comes up with a product which is new in the market, the innovator gains a competitive advantage. This is turn creates extraordinary profits for the innovator which temporarily causes disequilibrium in the market. However, in the long run, this competitive edge which the innovator has is lost, and the profits fall to an ordinary level.
Hence, without any legal intervention and protection of the product, the competition which exists in the market, will destroy the profits. Hence, for this purpose, patent laws have come into place. The Indian Patents Act, 1970 aims to confer an IPR upon the person owning the same which basically gives a social recognition. This recognition will bring economic benefits to the innovator/holder. The reasoning behind IPR laws is to award the person for his labor, cost and efforts. This is often known as the “appropriability problem” ,that is when a firm is not able to recover the costs of invention because the resulting information was available to all.
IPR plays an extremely important role in every sector of the society and is a crucial factor for investment decision by companies, foreign and domestic. In India, the Patent act is in conformity with the international standards and India is a signatory to the TRIPS Agreement which sets down minimum standards for many forms of IP regulations
However, there are various anomalies in the existing IPR laws such as the one pointed out in the Novartis Case which will be discussed in the essay. The researcher will attempt to highlight the issues in the patent laws and its effect on our economy.
Economics of Patents
This section will essentially deal with the objectives of IPR laws in India and the
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Introduction:
The patent system aims to confer Intellectual Property right to an innovator who has created an economic innovation which provides a better way to make something or something better to make. When an innovator comes up with a product which is new in the market, the innovator gains a competitive advantage. This is turn creates extraordinary profits for the innovator which temporarily causes disequilibrium in the market. However, in the long run, this competitive edge which the innovator has is lost, and the profits fall to an ordinary level.
Hence, without any legal intervention and protection of the product, the competition which exists in the market, will destroy the profits. Hence, for this purpose, patent laws have come into place. The Indian Patents Act, 1970 aims to confer an IPR upon the person owning the same which basically gives a social recognition. This recognition will bring economic benefits to the innovator/holder. The reasoning behind IPR laws is to award the person for his labor, cost and efforts. This is often known as the “appropriability problem” ,that is when a firm is not able to recover the costs of invention because the resulting information was available to all.
IPR plays an extremely important role in every sector of the society and is a crucial factor for investment decision by companies, foreign and domestic. In India, the Patent act is in conformity with the international standards and India is a signatory to the TRIPS Agreement which sets down minimum standards for many forms of IP regulations
However, there are various anomalies in the existing IPR laws such as the one pointed out in the Novartis Case which will be discussed in the essay. The researcher will attempt to highlight the issues in the patent laws and its effect on our economy.
Economics of Patents
This section will essentially deal with the objectives of IPR laws in India and the