Role of Intellectual Property Rights in Creativity & Knowledge Economy Documentation

1. Role of IPR
In Creativity And
Knowledge Economy
Submitted by: Submitted to:
Vinay Prajapati & Kathiravan R. Ms. Amisha Mehta
M.F.Tech, Sem-I, Asst. Professor
NIFT, Gandhinagar NIFT, Gandhinagar
Date of Submission: 13-09-2010

2. What is an intellectual property?
Intellectual property is unique, as it is the fruit of personal creation and inventiveness. It is
nothing but inventing some new products and introducing it to the society and having the
rights to that product by the creator, in order to protect the creation from infringement.
For e.g.: PICASSO painting, a MANI RATNAM film, a R.K.NARAYAN’S novel, a new method of
irrigation for farmers in arid regions, the invention of the light bulb, a computer chip or a
microprocessor.
What is creativity?
Creativity is an act of turning new and imaginative ideas into reality. Creativity involves two
processes: thinking, then producing.
What is knowledge economy?
The knowledge economy is a term that refers either to an economy of knowledge focused
on the production and management of knowledge in the frame of economic constraints. In
a knowledge economy, knowledge is a product.
Knowledge economy is an economy which is “directly based on the production, distribution
and use of knowledge and information”. In a knowledge based economy, knowledge is a
tool.
As we have seen about what is intellectual property rights, creativity and also about
knowledge economy. Let us discuss about how does an intellectual property rights relates
with creativity and knowledge economy.
How intellectual property rights relate creativity?
One purpose of the intellectual property rights system is to provide incentives to creators to
produce new inventions and creations.

3. Intellectual property rights provide people to benefit from their innovations and creative
work, and to prevent others from copying or unfairly gaining from the inventor’s creativity
and investment.
According to these rights, society provides an incentive for people and organizations to
invest time, resources and original thinking to develop innovative products and technologies
and expand knowledge and culture. This encourages the production of a wide range of
quality goods and services, and helps maintaining competition.
Any innovation which involves design of products requires large investments in terms of
time and resources. Therefore, these innovations are more likely to take place in large
business house or in academic institutions due to the ease of availability of resources in
such places.
Innovation is based on making the user experience better or more pleasurable. These
innovations may be to enhance the appeal of the product or service according to emotional,
cultural or social sensibilities or convenience of use. There are many examples of
innovations in India which have catered to Indian market conditions and sensibilities. Below
is a list of some successful innovation strategies in India in recent times.
In the 1980’s, CavinKare revolutionized the sale of shampoo by launching 8 ml
Sachets of shampoo. While conventionally economy packs were larger packages of
the same product, CavinKare launched single use packages of these products. By
doing this they targeted the customer who does not have enough disposable income to
Spend on large packs of shampoo. This customer would earlier have opted for other
cheaper substitutes, but with the sachet option would become a customer.
Another similar innovation is pre-paid mobile services. While mobile telephone was
becoming more and more affordable, the post-paid services involved monthly fee
apart from usage charges. The innovation of pre-paid services involved a small
upfront amount as connection charges and then the user had the freedom to pay for
the usage as and when it occurs and also had the flexibility to decide how much they

4. would pay. Thus brought in a large number of mobile users who operate on limited budgets
and thus earlier could not afford the monthly usage charges.
This example explains the role of IPR in creativity.
Now a day, many film makers are taking inspiration from various novels and making
movies by changing in their own form without concern of the author of those novels. As
the novel is the intellectual property of its author, no one is permitted to make changes in
it and using in it any form without the knowledge of its author because all copyrights
belongs to the author. The movie “3 IDIOTS” is the best example.
How intellectual property rights relate knowledge economy?
IPR can play an important role in the knowledge economy, as they can encourage
technology trade, and related patterns of specialization and increasing returns in technology
development at the industry level, leading to greater diffusion of technology, and reducing
the transaction costs in technology trading. While innovation may occur without IP
protection, its pace and depth may be adversely affected without such protection.
Continuously evolving technologies bring about the ease of sharing information, developing
new protocols and procedures and finding equivalence bringing about the need for
protection of knowledge. IPR registration offer protection that is essential in the global
market for knowledge and innovation where ability to create and sustain global networks is
a key driver in successful organisations.
One of the best examples we can take from PHILIPS:
Now a days, due to competition in the markets for a product, even the manufacturers are
doing outsource of raw materials in low wage countries and even they are opening the firm
in that particular countries in order reduce the cost of product in the market. Thus the
manufacturing process has changed from production based to knowledge based.

5. The importance of IP and its protection is amplified using a case study on the Philips
experience. Before 1985, Philips business model was based on investments on R&D, the
resultant R&D outputs were converted to products that were manufactured, marketed and
sold resulting in return on investments.
Globalisation changes in the last 20 years both in marketing and manufacturing such as
more companies, more competition, lower margins, shorter product life cycles, increased
price erosion, cost of R&D increasing made the return on R&D investments more difficult for
Philips. This is the best example for knowledge economy.
Philips is doing business for more than 100 years and has patents for medical X-ray
tube(1918), neon tube(1922), audio cassettes(1963), VCR (1971), Audio CD (1983), GSM
speech (de-) coder (1985), DVD (1996), CD-R, CD-RW (1997), Blue-ray disc (2002). By the year
1993, Philips had 877 patents; it has increased to 3144 in the year 2002.
Philips’s current IPR portfolio boasts of about 95,000 patents based on 19,000 inventions with
approximately 3000 new filings per year. Philips also owns more than 2,000 domain names in
addition to the 22,000 trademarks and 6000 designs. Philips’s successful transition from the
manufacturing era to the knowledge based era was a result of its recognition of importance of
IP and its protection.
How intellectual property rights works in fashions industry?
In fashion industry, the purpose of producers is not to improve but to create. They introduce
creativity and are specifically based on creative heritage always moving and adapting itself
to demand. But their creations remain unique and, as non-cumulative knowledge, escape
from the incremental character of technical progress. Thus creative products have a strong
cultural and economic value and raise the problem of the value management through
intellectual property rights (IPR).

6. Here we are considering French fashion industry. It is an interesting industry because its
production is strictly linked to creativity and heritage as the main inputs. So, the
management of IPR is, there, a key point. Moreover the fashion industry is now moving
from an Old model, the Haute Couture system based on Maisons owned by the great
creators (Chanel, Dior, Balenciaga, etc.) to a new system, with industrial, financial and
creative groups as LVMH (B. Arnault) and PPR (F.Pinault). A new model of management
through IPR is there emerging.
Conclusion:
IPR protects the creativity and knowledge economy of the products for its designer/
developer. Also helps to provide incentives to designer/developer for further research and
development in same area or other.