Intellectual Property Rights - The New Wealth of Knowledge Economy: An Indian Perspective

Intellectual Property, in its literal sense means the things that originate from human brain. This creation of human mind or Intellectual Property is considered to be the most invaluable assets, when compared to movable or immovable property, in knowledge based industries. The industries that have knowledge as its core resource and where the profits are generated mainly through the commercialization of new ideas and innovations are categorized as knowledge industries. The emphasis is not on physical or tangible assets but on intangible knowledge assets. The value of Intellectual Assets determines the rank and competitiveness of the corporate organizations. Wealth generation through creation, production, distribution and consumption of knowledge and knowledge based products are the key characteristics of knowledge economy. The major growth industries such as micro-electronics, biotechnology and telecommunications are 'brain power' industries. These knowledge industries stimulate other industries in turn to become knowledge based. Until recently capital was a scarce commodity. With rapid globalization and easy access to international finance, capital is no longer scarce. It is the Intellectual Assets that are knowledge based, non-replicable, unique and proprietary are increasingly becoming scarce. World Intellectual Property Organization (WIPO) and World Trade Organization (WTO) are the key organizations at international level which sets standards, frames rules and regulations and acts as enforcers of Intellectual Property Rights (IPRs). The role of WTO is distinct from that of WIPO in respect of enforcement. The strong protection system for Intellectual Property Rights advocated by the WTO has enhanced the value of Intellectual Property Assets in the corporate balance sheet, though hidden hitherto. India is a founder member of GATT and therefore enjoys the same status in WTO also. India had necessary legislations to protect the IPRs even before the advent of TRIPS. India is emerging as the hub of 'knowledge economy' in South Asia. India has proved her strength in Information Technology. The Bio-technology and Pharmaceutical industry are considered to be the next avenues of proving the Knowledge Prowess of India. These industries are attempting to quantify their Intellectual Assets - comprising mostly of Intellectual Property, to enhance their performance. Some Information Technology and Pharmaceutical companies have explicitly valued their portfolio of Intellectual Assets, by appending to their financial statements. The Indian Accounting Standards are also being reformed, to accommodate the value of Intellectual Property in the Accounting Statements.