Feb 22, 2021

Intellectual Property Protection, Global Enterprises & International Trade Policy



Intellectual Property

Based on the WIPO’s website, intellectual property refers to creations of the mind: such as inventions; literary and artistic works; symbols, names and images used in commerce.

Intellectual property is divided into two categories:

  • Industrial Property includes patents for inventions, trademarks, industrial designs and geographical indications;
  • Copyright covers literary works (such as novels, poems and plays), films, music, artistic works (e.g., drawings, paintings, photographs, and sculptures) and also architectural design. Including rights related to copyright include those of performing artists in their performances, producers of phonograms in their recordings, and broadcasters in their radio and television programs.


Intellectual Property Protection

Meanwhile, Intellectual Property Protection is protection for inventions, literary and artistic works, symbols, names, and images created by the mind.

Intellectual property protection is important to encourage innovation. Without protection of intellectual property, entrepreneurs would not get the full benefits of their inventions and of course this will reduce the enthusiasm of entrepreneurs to continue researching and developing their products or services. 

Likewise, intellectual property system is important to help new enterprises alter their innovation potential and invention into market value and competitiveness.

Intellectual property rights also can be used to protect the technology, brand name, design and also creation. It gives the entrepreneurs sole ownership of their intellectual property, therefore they can control the use of their intellectual property to gain commercial benefit.

Global Enterprises

Global enterprises are the companies that do business internationally. International business that they do covers all commercial activities that take place to promote the transfer of goods, services, resources, people, ideas, and technologies across national boundaries.

International business transpires in many diverse formats, for example:

  • The transfer of goods or services from one country to another (exporting, importing, trade);
  • Legitimate contracts that authorize foreign enterprises to use products, services, and processes from other nations (licensing, franchising); and
  • The forming and functioning of sales, manufacturing, research and development, and sharing amenities in foreign markets.


The Importance of Intellectual Property Protection for Global Enterprises

Intellectual property protection is so important in building international trade. Businesses of all nations now operate in a progressively competitive worldwide marketplace. Strong domestic and international protection of patents and trademarks as examples are crucial to the success of global enterprises/companies that do business internationally.  

In order to compete internationally, many global enterprises are under pressure to innovate. Innovation frequently requires high costs, not only for research and development but also for the subsequent investments necessary to produce and market new products or services. The incentive for and the protection of these investments are provided by an effective system of intellectual property protection.

Strong patent protection, along with the global enterprises’ ability to make effective use of patents to increase exports, to increase licensing of technology, and to increase opportunities for foreign direct investment, will help them exist in international trade in today's highly competitive environment. Meanwhile, strong trademark protection, both domestically and internationally, will help many global enterprises to combat the counterfeiting of their goods or services. In view of the above, we can see that intellectual property protection is so important to increase the global enterprises’ market shares in international trade.

The best example, soon we will see a global enterprise engaged in fast food franchise restaurants that will enter the Indonesian market. In order to increase its market shares and to protect its products and services from counterfeiting and also to be able to compete internationally, this global enterprise has protected its trademarks and servicemarks in various countries in the world, including Indonesia. By doing these things, this global enterprise can continue to exist in the world of international trade which is incredibly competitive.

Intellectual Property Protection and its Relation to International Trade Policy

The protection and enforcement of intellectual property is an important and persistent component of international trade policy. International trade policy also seeks to address new and expanding issues in the intellectual property landscape related to the growing role of arising markets in the global marketplace.

Nowadays, we can see that many global enterprises have used and continue to use their intellectual property to obtain and protect market shares internationally. These efforts could be even more effective if the relationship of intellectual property protection to international trade policy were better understood.