The Increased Importance Of Intellectual Property

The development of new technologies is in high gear. AI, drones and robotics are key areas of innovation attracting enormous investments. Nvidia, the world's first-ever $4 trillion company, is worth more than 97% of the world's economies. Intellectual property rights are essential for protecting the investments in and economic value of such innovations. The Nexperia case in the Netherlands, in which the Dutch government took over control of the Chinese owned Dutch company Nexperia, because of fears essential know-how and intellectual property would be transferred to China shows that intellectual property rights may even have political consequences. The Netherlands with large renowned companies as Heineken, Philip and ASML is at the forefront when it comes to new developments in IP.

Intellectual Property Rights
Intellectual property rights, often referred to as IP, offer protection to all "products of the mind" and include both literary and artistic works and industrial property.

The following types of IP can be distinguished:

• patents
• copyrights
• trademarks
• designs
• trade names
• plant breeders' rights
• databases
• original topographies of semiconductor products (computer chips).

Although not recognized by law as IP, domain names and trade secrets are often also considered (pseudo) IP.

Effective Legal Protection
Most IP-rights are automatically granted to the creator of an innovation or work. If the innovation or work was created by an employee in the context of his or her employment, the rights are in principle granted to the employer. No one else may use your invention without your permission, and you can take legal action against anyone who misuses your IP-rights. However, for the most effective protection of your IP, it is preferable to register your IP as fully as possible. For patents and trademarks registration is required to obtain protection. Most inventions are easy to copy these days. Therefore, a lack of proper protection of your IP endangers the investments you made in inventions, designs or trademarks for your products.

International Protection
IP law is not purely a national matter, nor are national governments free to pursue their own national IP policies. Many IP-rights have a European or even broader international dimension. International legal protection of IP is indispensable for global trade. Important IP treaties are the Berne Convention, other treaties of the World Intellectual Property Organisation (WIPO) and the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights, or TRIPs.

Copyright, trademark law and design rights are almost completely harmonised in Europe. For patents, the Patent Cooperation Treaty (PCT), the UPC Agreement and the European Patent Convention play an important role. Trademark and design rights are no longer governed by Dutch law, but exclusively by the Benelux Convention on Intellectual Property and the European trademark and design regulations. The EU Enforcement Directive has greatly facilitated the enforcement of IP rights within the European Union.

Since inadequate protection of IP constitutes a barrier to international trade, the World Trade Organisation (WTO) requires adequate protection of IP as a condition for the accession of new members, as was the case with China's accession in 2001.

Patents
Under Dutch patent law, technical inventions are eligible for patent protection if they meet the following three criteria: (i) novelty, (ii) inventive step, and (iii) industrial application (product or process).

Patents can be applied for in the following ways:

• a national application with the Netherlands Patent Office;
• a Unitary Patent for the 18 participating EU Member States;
• a European application with the European Patent Office (EPO) designating one or more of the 39 participating European countries; or
• an application with the WIPO under the Patent Cooperation Treaty (PCT), designating one or more of the 158 contracting states.

Additional EU Member States are expected to ratify the UPC Agreement for the Unitary Patent, so that eventually Unitary Patents will provide patent protection in up to 25 EU Member States.

Through the UPC Agreement, a ruling can be obtained from the UPC (Unified Patent Court) regarding the validity or infringement of a Unitary Patent for all participating EU member states. The UPC has headquarters in Munich and Paris, and a local division in each participating EU member state.

Dutch and Unitary Patents are valid for a maximum of 20 years, provided that the annual fees are paid. If certain requirements are met, the term of protection for medicinal and plant protection products can be extended by up to five years through a supplementary protection certificate.

Patent owners can prevent others from unlicensed use of patented technology. In addition, patent owners can demand information, the disclosure of records, the destruction of infringing products and damages.

Trademarks
The Netherlands has three different systems for trademark protection:

• the Benelux Convention on Intellectual Property;
• EU Community Trademark Regulation; and
• the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks (Madrid Protocol).

Trademarks may consist of any signs, particularly words and names, but also logos, colors, the shape or packaging of goods, or sounds, provided that such signs are capable of:

• distinguishing the goods or services of one business from those of other businesses; and
• being represented in the register in a manner that enables the competent authorities and the public to determine the clear and precise subject matter of the protection afforded to its proprietor.

Benelux trademarks, offering protection in Belgium, the Netherlands and Luxembourg, may be applied for at the Benelux Office for Intellectual Property (BOIP). European trademarks, providing protection for all EU member states, must be applied for at the EU Intellectual Property Office (EUIPO).

Benelux and European trademarks are initially protected for ten years. Protection may be extended for an indefinite number of times upon the timely payment of the extension fees.

The unlicensed use of registered trademarks is forbidden, and taking "unfair advantage" of the reputation of trademarks also constitutes an infringement. To enjoy trademarks rights, trademark owners must use the trademarks for the goods or services for which they have been registered within five years of filing. In the event of trademark infringements, trademark owners may claim injunctive relief, rendering of account, damages, product recall, and destruction of the infringing goods.

Designs
Similar to trademarks, the Netherlands has three different systems for the protection of designs:

• the Benelux Convention on Intellectual Property;
• EU Community Designs Regulation; and
• The Hague System for the International Registration of Industrial Designs.

The terms "design" or "drawing or model" relate to the appearance of products or parts of products. To claim a design right, the design must be novel and have an individual character.

Benelux designs offer protection in Belgium, the Netherlands, and Luxembourg, and may be applied for at the BOIP. European designs that provide protection for all EU member states must be applied for at the EUIPO. The Hague System for the International Registration of Industrial Designs allows for the registration of designs in 89 countries by filing one single international application with the WIPO.

Design registrations are initially valid for five years and can be renewed in blocks of five years up to a maximum of 25 years.

Unregistered designs are protected against copying for a period of three years from the date on which the design was first made available to the public within the territory of the EU. After the expiry of these three years, protection cannot be extended.

In the case of design right infringements, the owners can claim injunctive relief, rendering of account, damages, product recall and even destruction of the infringing goods.

Copyright
The Dutch Copyright Act implements the harmonised standards set forth by EU copyright law. Many of the EU directives reflect EU member states' obligations under the Berne Convention and the Rome Convention, as well as the obligations under the WTO "TRIPS" Agreement and the two 1996 WIPO Internet Treaties (the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty). The Copyright Act automatically protects the copyright of works of literature, science or art from the moment the work is created, on the condition that the work in question is an original work. The term "work" embraces many materials, such as books, brochures, films, photographs, musical works, works of visual art, industrial design, and geographical maps. Software is also protected by copyright. A work must be "the author's own intellectual creation" in order to qualify for copyright protection.

Upon the death of the author, the copyright automatically devolves to the heirs. Copyright ends 70 years after the death of the work's creator.

Copyright owners have the exclusive right to publish and copy the copyrighted works, including translations.

The Dutch Copyright Act stipulates that employers own the copyrights in works created by employees in the course of their employment.

An AI tool that creates something independently cannot be regarded as the 'author' and therefore cannot hold copyright. Recent rulings on this matter are clear: no human origin means no copyright.

Copyright owners have the right to take legal action against persons infringing their copyrights. Dutch law provides, among other things, for the possibility of injunctions, damages, the surrender of profits made on the infringement, to be accounted for by the infringing party, the transfer or destruction of infringing products, withdrawal from the market, or the destruction of materials predominantly used for the manufacturing of the infringing products.

In addition to copyright, there are "neighboring rights", which are also known as "related rights" and protect the work of performers, music and film producers, and broadcasting companies.

Plant Breeders' Rights
Under EU Regulation (EC) No 2100/94 of 27 July 1994 on community plant variety rights and the Dutch 2005 Seeds and Planting Materials Act, plant breeders can invoke plant breeders' rights to protect new plant varieties.

Database Rights
Databases consisting of collections of ordered data can be protected by database rights under the Dutch Database Act.

Semiconductor TopographyRights
Semiconductor topography rights protect the design of electronic circuits on computer chips (also known as the topography of semiconductor products). These rights protect circuits designed to perform specific functions.

Trade Names
Trade name law protects the names under which businesses operate. A trade name is automatically acquired as soon as a business publicly starts trading. Trade names are in general registered in the Business Register. Trade name law is of growing importance due to the use of trade names in internet domain names.

Trade Secrets
The Dutch Trade Secrets Act implements the EU Trade Secrets Directive, which sets out rules for the protection of trade secrets. Trade secrets refer to any information that:

• is not generally known or readily accessible to persons in the circles who normally deal with this type of information and is therefore of economic value;
• is subject to appropriate confidentiality measures by the lawful holder; and
• the holder has a legitimate interest in the confidentiality thereof.

In the case of infringements, trade secrets owners can demand the cessation or prohibition of the use or disclosure of the trade secret, and even product recalls regarding the infringing goods and/or their destruction, as well as damages.

Tax Innovation Box
The Dutch government wishes to remain relevant as IP hub and as country with a knowledge based economy. Dutch companies investing in R&D may benefit from a lowered corporate income tax rate. Under the innovation box regime, profits that stem from innovation may be taxed against a corporate income tax rate of 9% instead of 25.8%. In addition, Dutch employers receive a wage tax reduction for R&D-work carried out by their employees in the Netherlands.

Both incentives can be achieved by way of a tax ruling, or upfront approval from the Rijksdienst voor Ondernemend Nederland. With respect to international businesses, it is important to highlight the Dutch tax treaty framework, which results in no withholding tax on (technical) royalties. The R&D-incentives and the absence of royalty withholding tax leads to a robust tax position for R&D-companies in The Netherlands.

This article was written for Tulips.Media magazine, which offers unique insights into the vibrant connections between the Netherlands and Kazakhstan. View the full magazine here: Tulips.Media magazine