Topic Of The Day:-“Gaming the system”
In an inter-connected and highly globalised world, what goes around comes around quite fast and often with drastic consequences for all. In this case, the crux of the matter lies in how these stronger rules are changing the global corporate landscape. For years now, while patent protection is getting stronger in all sectors in a large number of countries, the conditions for its grant are becoming greatly relaxed. Not only do such lax patenting requirements allow companies to claim patents more broadly — or consecutively, with little show of original effort as in the case of evergreening — but also patents can be claimed on all possible inventions (and discoveries) that are of relevance to the present, and even to the future. A large number of countries have already foregone many degrees of policy freedom by signing up to ‘TRIPSPlus’ standards of protection. This, in conjunction with other trade measures, is disintegrating existing markets and rigging established rules of the game. A superstar firm today is not necessarily one with the greatest technological breakthroughs or the largest research and development labs, but surely is one that has a large IP portfolio, engages in extensive litigation on patent issues, and thrives on licensing revenues. Noting the gravity of the situation, The Economist in 2016 produced two short opinion pieces on how corporate profits and returns on capital are at near record levels in the U.S. and what might be wrong with it. It argued that established companies are “becoming more entrenched” in existing markets worldwide, and made the case that high profits may be a sign of a sickness rather than growth and called for reining in IP rights.
At the global level, these sectors are stratified, with profits neatly split up between large corporations and new kinds of non-innovator firms that simply amass patents speculatively in upcoming, promising technologies for spurious returns. The non-innovator companies are the patriciates of the system: when they hit the technology jackpot, they control the market and have the power to shift wealth and control competition. An example that beautifully captures the situation is Qualcomm Inc., an American company that is the legal patent holder of thousands of patents that are considered critical to build mobile phones with wireless technologies, accounting for a total profit of $5.7 billion through intellectual property licences in 2016 alone.
MEANINGS AND WORDS
1) Crux: The decisive or most important point at issue.
Example: The crux of the matter is that attitudes have changed.
Synonyms: nub, heart
2) Rigging: The act of arranging dishonestly for the result of something, for example an election, to be changed.
Example: Opposition parties have protested over alleged vote rigging in the election.
3) Litigation: The process of taking legal action.
Example: The Company wishes to avoid litigation.
Synonyms: legal action, lawsuit.
4) Entrenched: (of an attitude, habit, or belief) firmly established and difficult or unlikely to change; ingrained.
Example: An entrenched resistance to change.
5) Reining: Keep under control; restrain.
Example: With an effort, she reined back her impatience.
Synonyms: restrain, check
6) Stratified: Form or arrange into strata.
Example: socially stratified cities.
7) Spurious: Not being what it purports to be; false or fake.
Example: Separating authentic and spurious claims.
Synonyms: bogus, fake, not genuine
Antonyms: authentic, genuine
8) Patriciates: A noble order or class.
Example: The Venetian merchants became a great hereditary patriciate.
