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Effect of Intellectual Property on the Economy

Global History of Intellectual Property Rights

It is astonishing to see the presence of Intellectual Property Rights even during ancient times. It is interesting to trace the development of Intellectual Property from ancient times to the modern era.

Presence of Intellectual Property can be seen in Ancient Rome. Evidence of the existence of monopolies in the Byzantine Empire has also been found. In 1432, those who made machines for the faster making of silks were given privileges by enacting a statute which was subsequently extended to many other devices. Presence of this demanding field today, has shown its slight presence even during an era where technology had only begun developing.

Modern developments in Intellectual Property happened in England in the 17th and 18th centuries. From a piece published in ‘Monthly Review’ in 1769, the first usage of the term ‘Intellectual Property’ can be seen.

The 20th century saw the popularity of Intellectual Property and its acquired position in most countries. This development of Intellectual Property is a result of various Conventions and Treaties. Globally, Paris Convention for the Protection of Intellectual Property (1883), Berne Convention for Protection of Literary and Artistic Works (1886), Madrid Agreement concerning the International Registration of Industrial Design (1925), Treaty on Intellectual Property in respect of Integrated Circuits (1989), Patent Cooperation Treaty etc., are important Conventions and treaties which played an important role in the development of Intellectual Property.

Indian History of Intellectual Property Rights

In the ancient period, one cannot find the presence of Intellectual Property in India. In the course of development of IPR, the world faced many problems, since implementation was not easy and many developing and underdeveloped countries found it difficult to acknowledge IPR.

Just as Western influence on matters were rapid in India, so was the case with IPR. Development of IPR in the West profoundly influenced India.

Copyright Act of 1957 was enacted to consolidate old laws which prevailed during the Colonial era like Copyright Act 1911, the Imperial Copyright Act of 1911, Indian Copyright Act of 1914. The Copyright Act of 1957, which is the oldest Intellectual Property legislation, was amended many times to cope with the changing developments. It was amended in 2012 to systematize with the WIPO Copyright Treaty (WCT) and WIPO Performances and Phonograms Treaty (WPPT).

The Patent and Design Protection Act was passed in 1872, and the Invention and Design Act in 1888. The Patent and the Design Act 1911 was another such legislation. All these existed in India before Patent Act 1970 was enacted. This was amended in 1999, 2002 and 2005.

Regarding Trademarks, India lacked many legislations before the year 1940. Hence people depended on provisions of Specific Relief Act, 1877 and Indian Penal Code, 1860. Due to the inability of the 1940 Act to satisfy demands, Trade and Merchandise Works Act, 1958 was passed. To harmonize with the TRIPS Agreement, Trademarks Act 1999 was later passed.

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To give protection to designs, in India, Patents and Design Act 1872 was passed. Patent provisions in this act were later repealed with the passing of Patent Act 1970. Consequently, in the year 2000, the Design Act was passed.

For protection of Geographic Indication, Geographical Indication of Goods (Registration and Protection) Act, 1999 was passed.

Increase in agricultural production resulted in the need to protect plant varieties and farmers’ rights. So, Protection of Plant Varieties and Farmers Rights Act, 2001 was enacted.

Another new concept in Intellectual Property was integrated circuits. The increase in the technological advancement resulted in the need to protect Integrated Circuits. Also, to satisfy the TRIPS Agreement obligations, India enacted the Semiconductor Integrated Circuit Layout Design Act, 2000 (Layout Design Act).

Meaning of Intellectual Property Rights

According to the World Trade Organization, Intellectual Property Rights are the rights given to persons over the creations of their minds. They usually give the creator an exclusive right over the use of his or her creation for a certain period of time.

Types of Intellectual Property

The major forms of Intellectual Property are the following:

  1. Copyright – Copyright (or author’s right) is a legal term used to describe the rights that creators have over their literary and artistic works.[1]

Works protected under copyright are as follows:

  • Literary works such as novels, poems, plays, reference works, newspaper articles;
  • Computer programs, databases;
  • Films, musical compositions, and choreography;
  • Artistic works such as paintings, drawings, photographs and sculpture;
  • Architecture and
  • Advertisements, maps and technical drawings.

Copyright protection is not available for ideas, procedures, methods of operation or mathematical concepts. It is available only for expressions. For example, if you have an idea about a new novel but you have not penned it down, you cannot claim copyright protection for that idea. Manifestations of ideas are necessary to get copyright protection.

Copyright protection starts without any registration. A work automatically gets protected under copyright.

  1. Patent

A patent is an exclusive right granted for an invention which is a product or a process that provides, in general, a new way of doing something, or offers a new technical solution to a problem.[2] To get a patent, technical information about the invention must be disclosed to the public in a patent application.

The patent owner has the exclusive right to stop others from commercially exploiting the patented invention. Others cannot use, distribute, make, import or sell patented inventions without the permission of the patent owner.

A Patent is generally granted for 20 years.

An invention is qualified for a patent protection if it is:

  • Novel/ New
  • Industrial applicability/ Useful
  • Non-obvious
  1. Trademark

A trademark can be a word, a slogan, a logo, and a color or a combination of colors, sounds, or even a fragrance. Once a trademark is registered it can be renewed indefinitely, provided, it is still being used in business and commerce.[3]

  1. Industrial design

An Industrial Design provides protection to a visual design of objects. It is not necessary that the object must be of any use. Industrial design consists of a creation of a shape, configuration or composition of pattern or colour, or combination of pattern or colour in 2 or 3- dimensional forms containing aesthetic value.

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Essential elements to get protection for industrial design are novelty and aesthetic value. Functioning features are not considered while deciding protection.

  1. Traditional Knowledge

Traditional knowledge refers to tradition-based innovations and creations resulting from intellectual activities in the industrial, scientific, literary or artistic fields. This knowledge is vast and includes agricultural knowledge, handicrafts, medicinal knowledge etc.[4]

  1. Semiconductor Integrated Circuits Layout Design

Due to the extreme development of technology, a new branch in Intellectual Property flourished, known as Semiconductor Integrated Circuits. Integrated circuits which are commonly known as chips or microchips are the electronic circuits in which all the components (transistors, diodes and resistors) have been assembled in a certain order on the surface of a thin semiconductor material.[5]

What will happen if the Government withdraws Intellectual Property protection?

Let’s divide the effect of withdrawal of protection into 3 heads:

Effect on Economy

Protection of Intellectual Property is of great significance for the economic development of a nation. One of the main reasons for the growth of developed countries is their strong IPR implementation. Protection of Intellectual Property results in increase in innovation which leads to economic prosperity. If Intellectual Property is not protected it will hamper economic growth.

Effect on Inventions

If we are guaranteed that our investments on time and money for new inventions will gradually give us returns and prevent others from copying our invention, we will be encouraged to research and discover new things. If states refuse to give rewards or protection, we will back off from inventing anything. This is human nature. If Intellectual Property is not protected, the result will be terrible.

Effect on Entertainment Industry

Copyright automatically protects the works of authors and artists. Due to this protection they are free to publish their work without fear of getting copied. This is the essence of developments in the entertainment industry. If no protection is granted, the entertainment industry will perish.

Effect on Branding

Branding helps customers in purchase decisions. Trademarks carry goodwill and quality of the products of the company. All these advantages, along with high returns will perish if protection is not granted.

A society without Intellectual Property protection

Benefits arising out of IPR are vast. If protection is withdrawn, companies, customers and creators will suffer. Companies will hesitate to invest in research, customers will face purchasing problems, creators will become reluctant to create more works. The future generation will get discouraged from inventing anything. All these will gradually lead to high unemployment rates and low economic growth.

Remedies against Infringement

  1. Copyright

The remedies provided by the Copyright Act, 1957 against infringement of copyright are:[6]

  • Civil remedies – these provide for injunctions, damages, rendition of accounts, delivery and destruction of infringed copies and damages for conversion;
  • Criminal remedies – these provide for imprisonment, fines, seizure of infringing copies and delivery of infringing copies to the owner;
  • Border enforcement – the Act also provides for prohibition of import and destruction of imported goods that infringe the copyright of a person with the assistance of the customs authorities of India.
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The period of limitation for filing a suit for damages for infringement of copying is 3 years from the date of such infringement.

  • Patent – Remedies available for infringement of a patent:
  • Injunctive Relief – This is the common remedy in which a defendant is stopped by the court from infringing a patent.
  • Damages or account of profits – The owner of a patent may seek compensation in respect of losses caused by infringement or an account of profit. But the owner cannot seek both.
  • Declaratory and other relief – In this remedy court declares the patent valid and has been infringed.
  • Seizure, Destruction of the infringing goods – Court may order the seizure or destruction of the allegedly infringing goods.

 2. Trademarks

Legal remedies for trademark infringement are

  1. Monetary compensation – Injured plaintiffs can seek monetary relief.

2. Injunction – Plaintiffs can request court for an injunction to stop the defendant from further infringing activities.

3. Forfeiture or destruction of infringing goods – Court may order the infringer to destroy or forfeit infringing goods.

4. Attorney’s fees – In some cases, the court may order the infringer to pay attorney’s fees of the plaintiff.


To recapitulate, this article discusses the history, importance, types, utilities and remedies of IPR.  It is clear that investment in Intellectual Property gives returns as well as leads to the development of countries. Protection of IP is necessary for innovations. Innovations can drastically help progress the economy.

[1] Copyright, WIPO,’s%20right)%20is,%2C%20maps%2C%20and%20technical%20drawings.

[2] Patents, WIPO,,public%20in%20a%20patent%20application.

[3] Kamil Idris, Intellectual Property, a power tool for economic growth, WIPO Publication No. 888.1 (June 2003, Second Edition).

[4] Id.

[5] Patent Expert Issues: Layout Designs (Topographies) of Integrated Circuits, WIPO,

[6] Anand and Anand, Copyright infringement and remedies in India, Lexology (July 31, 2019),

Cite this article (The Bluebook 20th ed.)-

Surya Rose Thomas, Effect of Intellectual Property on the Economy, Ex Gratia Law Journal, (September 1, 2020),

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Surya Rose Thomas
Student - Deccan Education Society's Shri Navalmal Firodia Law College