Property Laws and Telecoms

Global Intellectual Property Law

Discuss the impact of Global Intellectual Property Law upon the Telecom industry and upon businesses.

One of the most fundamental issues in today's society is intellectual property rights. These are basic trademarks which are used to protect the ideas and innovations of both individuals and firms. In the last several years, technology has made it easier for anyone to steal them with very little repercussions or enforcement. (Denton, 2011)

Evidence of this can been seen with observations from Denton (2011) who said, "Intellectual property rights provide the foundation upon which innovation is shared, creativity encouraged and consumer trust reinforced. But the digital world poses a new challenge -- how to manage the balance when the consumer is the creator, when the marginal cost of copying is zero, when enforcement of existing law is extremely difficult, and when 'free' access to information and content is considered by many to be a right." (Denton, 2011) This is illustrating how shifting attitudes and changes in technology are leading to more people breaking global intellectual property laws.

For the telecommunications industry, these shifts have become more pronounced. This is because they are at the forefront of innovation and must keep up with any transformations in order to remain competitive. As a result, the industry and various businesses are impacted by these changes. To fully understand what is taking place requires examining their effects and if they are leading to positive long-term transformations. Together, these different elements will illustrate how intellectual property rights are influencing the actions of various firms inside the sector.

Global intellectual property law is having an impact on the way various firms are operating and the industry itself. This is occurring with most companies utilizing the standards developed by AT&T in the 1960s. This basically required organizations to use their protocols and software to effectively communicate between different networks. (Gokhale, 2004)

However, shifts in technology have enabled companies to create new platforms that are competing directly against AT&T. In this case, Microsoft created an open source solution which is directly compatible with various networks. It works off the IBM-based SNAs or WANs. While at the same time, Linux has developed similar protocols to help the various systems effectively communicate with each other. (Gokhale, 2004)

These transformations are indicating how global intellectual property law is changing the solutions telecommunications firms are utilizing. This is taking place with them using applications which are similar to the AT&T-based software. However, the differences are that Microsoft and Linux are utilizing a platform that is similar. Yet, it is different based upon the fact that is an open source solution. (Gokhale, 2004)

In this aspect, one could argue that these competing solutions make it difficult for various networks to effectively communicate with each other because of the numerous platforms. To integrate them, the different networks will borrow the source code from each other. The main idea is to ensure that calls, Internet traffic and other factors are effectively flowing in the system. (Gokhale, 2004)

As a result, the impact of global intellectual property laws are leading to shifts in the industry with them having multiple options available. This is designed to ensure that various networks are able to communicate with each other. These changes help to keep costs low and improve the quality of services provided (using the latest applications). (Gokhale, 2004)

However, global intellectual property laws are unequally enforced in many regions of the world. This is impacting the telecommunications industry, as they will establish operations in locations where this is taking place (i.e. India and China). According to Zhao (2006), research and development occurs in these nations with breaches of intellectual property rights taking place regularly. The difference is these firms will use the applications they created for internal functions. This is resulting in them being able to circumvent various regulations in order to achieve these objectives by having a product that is similar. Yet, it is different with engineers completely redesigning the product. (Zhao, 2006)

Evidence of this can be seen with Zhao saying, "Multinational enterprises (MNEs) are increasingly conducting research and development (R&D) in countries such as China and India, where intellectual property rights (IPR) protection is still far from adequate. We found that weak IPR leads to low returns to innovation and underutilization of innovative talents. MNEs that possess alternative mechanisms for protecting their intellectual properties will therefore find it attractive to conduct R&D at those locations. A theoretical framework is developed to capture the interaction between firm strategy and the institutional environment. The empirical analysis on a sample of 1,567 U.S.-headquartered innovating firms finds results consistent with the hypotheses that (i) technologies developed in countries with weak IPR protection are used more internally, and (ii) technologies developed by firms with R&D in weak IPR countries show stronger internal linkages. The results suggest that firms may use internal organizations to substitute for inadequate external institutions. By doing so, they are able to take advantage of the arbitrage opportunities presented by the institutional gap across countries." (Zhao, 2006)

This is showing how differences in the enforcement of property rights, inside developed countries, are contributing to breaches of various laws. These transformations allow telecommunications companies to develop applications that are similar to each other. Yet, they are unique and different. In many cases, these new applications will be used to enhance their ability to connect with customers and maintain their competitive position. (Zhao, 2006)

Does it have a positive impact or none at all?