We often observe a dissonance between the intended (ideal-typical) function of an intellectual property right and the use to which a given right is put under the influence of economic and technological factors. As regards the legal implications, such functional change often finds expression in extended legal protection that goes beyond the intended function of the intellectual property right. In this context a main area of research with three characteristics emerges which firstly examines the causes and consequence of various strategies of protection and competition. Secondly, the tensions between the goals of intellectual property protection and the modalities of that protection ought to be examined. Finally, the changing and emerging functions of intellectual property protection need to be contextualized in light of their implications for the scope of protection afforded by the law.
The notion of the “function” has an ambivalent status in intellectual property law. On the one hand, it is the key to understanding the substance and effect of rights. On the other hand, however, the complexity of the issues arising in that context bears a considerable risk of misunderstanding. A distinction has to be made between an “ideal-typical” or “essential” function as the very reason of the protection of a given intellectual property right, on the one hand, and the “legally protected” functions thereof, on the other. The ideal-typical function consists above all in the prohibition of any imitation by unauthorised third parties, and, with increasing importance, in the use of intellectual property rights as business assets. The “legally protected” functions can be distilled from the modalities of the protection afforded by the law. For example, while the ideal-typical function of trade marks consists in the identification of the corporate origin of a given product, the protection afforded by the law, such as in relation to marks with a reputation, may go further. In this sense, other functions of the trade mark are also “legally protected”.
In addition, intellectual property rights may also have economic or factual functions in connection with certain forms of (strategic) use or economic consequences, irrespective of whether or not it may be desirable to protect such forms of use. While ideal-typical functions are essentially a given, economic functions remain highly dynamic. That dynamic influences the legislature and judiciary, and thus concomitantly the nature and extent of legally protected functions. Such legal developments are in part reactions to economic and technological change, and in part economic and technological developments as such influence the behaviour of intellectual property rightholders (as in the context of digitalisation and cooperative or otherwise “open” forms of innovation).
Functional change typically leads to an extension of the subject-matter of protection (such as patents for computer programs or biotechnological innovation; trade mark protection for all sorts of shapes; copyright or data-base protection in the software sector), and of the scope of exclusivity (such as all types of use in trade mark law, and the making available right in copyright law), as well as the independence of the object of protection (such as the free transferability of trade marks, even only for selected classes of goods). The expansionist tendency of such functional change also favours tendencies towards overlaps between different intellectual property rights.
In principle, these phenomena are not new. What is new, however, is the level of refinement of market participants’ prosecution and exploitation strategies, and the vigour with which they are pursued. This can lead to a differentiation of the economic functions and potentially their solidification as legally protected functions.
A main area of research assessing on these developments has three characteristics:
First, the causes and consequences of differentiated strategies of protection and competition must be identified. In the area of patent law, this concerns, for example, the exploitation of inventions through R&D companies or non-practicing entities as a distinct business modell or the patenting behaviour of certain industries (e.g., in the ICT and pahrma sector), where the function of patents to protect innovation against imitation is superseded by strategic objectives. In the area of trade mark protection, a similar situation emerges concerning the new brand strategies of large companies or franchising practices.
Second, tensions between the goals of intellectual property protection, namely, the promotion of innovation, creativity and competition, and the means of realising these objectives, that is to say the grant of exclusive exploitation rights, must be resolved. Construing the scope for action and rights of exclusion afforded by intellectual property law in accordance with the objectives of that protection requires a normative trade-off. The modalities of this trade off will be identified and examined in the main areas of research mentioned under I.1 and 2.
Third, functional change impacts all system levels of intellectual property law, including the conditions and scope of protection, exceptions and limitations thereto, as well as remedies (e.g. injunctive relief or damages). Functional change also affects the law against unfair competition, the flexible sanctioning mechanisms of which often complement protection arising under intellectual property law. In general, we can say that this area is a moving target. The differentiation, and often the rebalancing of the functions of intellectual property protection, is a continuing process, influenced internally by legislative and judicial developments, and externally through economic and technological change. Given that the process involves innovation and creativity, it proceeds at a fast pace. Existing functions are typically not replaced by new ones but rather develop continuously.