Intellectual property rights: planning, enhancement and protection

WHAT IS AN INTELLECTUAL PROPERTY RIGHT?

In the current socio-economic context, the concept of intellectual property includes the protection of new ideas (Patents), distinctive corporate elements (Trademarks) and artistic expressions (Copyrights). The range of action extends to the numerous and diversified manifestations of knowledge, experience and specialization of the individual, holder of the right, organized individually or collectively. Some of these events are able to produce significant economic value, so much so that they are considered distinctive over time and deserve the attention of the legislator to ensure their protection and protection by the holder of the right. In this context, the adoption of adequate organizational forms by the holder of the right and compliance with certain behavioral behaviors by contracted third parties for the economic exploitation of the right becomes fundamental.

This article is to emphasize the planning, enhancement and protection of intellectual property rights, especially in a pandemic context such as the current one, characterized by the lack of financial resources available to individuals and companies. In relation to image rights, we will discuss about the issue of asset management optimization, functional to obtaining the pass for the transition to a "New Normal phase".

It is easy to see that the natural person who owns an intellectual property right does not possess, at least initially, the analytical-managerial accounting tools, typical of the company organization.

Yet, even these micro-entities can generate operating cash flows so significant that they can be compared to those of a medium-sized company. In this regard, even in the current pandemic context, a case in point is that of professional football. As reported in ANSA on 03 February last, the total salaries and commercial income of the footballer Lionel Messi, in first place among the highest paid footballers in the world and slightly precedes his historical rival Cristiano Ronaldo, stopped - so to speak - at 118 million euros. In the same ranking, the less famous players should not be overlooked: in 20th place with 24.8 million euros we find the footballer David de Gea, Manchester United goalkeeper.Non meno rappresentativa  è la classifica dei guadagni connessi ai cantautori e musicisti. La top-10 è guidata dai Rolling Stones con 65 milioni di dollari, seguito da Ariana Grande (44,3 milioni di dollari) ed Elton John (43,3 milioni di dollari). Se si considerassero i soli introiti derivanti dal canale streaming, il primo in classifica (Drake) realizza ricavi per circa 12 milioni di dollari.

Examples in the world of sports and music highlight how the values ​​at stake are so relevant that they need to stimulate urgent reflection for the holders of intellectual property rights, even those of a lower economic volume: the need to adopt adequate systems in order to plan, enhance and monitor the economic-financial trend of the income deriving from the management of someone's rights and therefore think about their protection.

In the world of professional football, we are recently witnessing some battles undertaken for the recognition and enhancement of image rights, not only connected to the televised reproduction of matches, but also to the development of digital contents that contain precise reference to the distinctive traits of the players. In this regard, last December 2020 the footballer Ibrahimovic expressed his disagreement with EA Sports and FIFPro regarding the reproduction of his name and image in the "FIFA21" video game. In particular, the Swedish footballer has specified that he is completely unrelated to the reasons that have allowed his distinctive features to be included in some digital contents, nor that he is aware of any transfer of image rights by FIFPro and / or by his own professional sports club to which they belong. Without wishing to enter into the merits of a story that is still in full evolution, the cases just mentioned are in any case emblematic of how image rights can be significantly exposed to the risk of fraud, both "internal" and "external" to the owner's asset management. examples from the world of sports and music highlight how the values ​​at stake are so relevant that they need to stimulate urgent reflection for the holders of intellectual property rights, even those of a lower economic volume: the need to adopt adequate systems to plan, enhance and monitor the economic-financial trend of the income deriving from the management of one's rights and therefore think about their protection.

 

THE IMPORTANCE OF MONITORING: "INTERNAL" AND "EXTERNAL" FRAUD RISK

From the point of view of the risk of “internal” fraud, the level of knowledge of the individual with respect to the technical content of the signed agreements has a significant impact on the level of performance.

In addition to what is represented above, from the point of view of the risk of "external" fraud, the further need linked to the level of knowledge of the third parties with which the holder of the right comes into contact to favor the commercial exploitation of the right of image .

Within the company organizations, the monitoring activities on the risk of fraud are usually carried out by the "compliance" manager, who is responsible for verifying the correspondence of the contractual agreements with the economic and financial interests of the organization and monitoring the relative performance sales ("internal") as well as the verification of the reputational and financial status of the counterpart ("external").

In the case of the individual, holder of the image right, it is equally necessary to have the knowledge, skills and tools available to adapt one's level of understanding with respect to commercial agreements signed directly or through agency and agency relationships. procurement of business. In fact, the management of the risk of fraud passes through a complete knowledge of the intellectual property right to be protected and valued, which can only be achieved through a proactive, timely and organized collection of all the information included in the agreements for the economic exploitation of rights. of image.

 

A PLAN TO CONTRAST RISKS: WHAT IT SHOULD CONTAIN AND WHAT RISKS IT SHOULD LIMIT

Concearning the two types of risk outlined above, the holder of the right must have a fraud risk management program (FRMP), which makes it possible to identify and therefore prevent fraudulent behaviors carried out by third parties and which negatively affect the maximization of economic results connected to the exploitation of image rights. Fraud risk management passes through the definition of the FRMP, customized to the needs of the right holder and to be divided into the following phases:

  1. Prevention, through the definition of "static" and "dynamic" elements that go with the asset management of the law. In concrete terms, the "static" elements include the definition of indicators on the performance of asset management that do not undergo changes with respect to changes in the reference context - this is the case of indicators related to compliance with contractual clauses, such as the correspondence of the economic consideration established in the contract with the financial amount received in a certain period of time by the holder of the right. The "dynamic" elements highlight the need to adapt asset management to the reference context. Typically, these are elements that do not fall within the management sphere of the right holder, but which in any case must be identified in advance to assess their impact on the expected economic results. This includes, for example, the regulatory changes that are characterizing the current emergency context and that introduce financial and fiscal support measures in favor of each individual and organization. The checks to be carried out take on a "strategic" and "consultative" nature and usually require the intervention of the fraud management expert, in order to be able to define the procedures to be adopted to deal with the "static" and "dynamic" elements identified above.
  2. Detection, by carrying out controls in the events that can generate economic and financial flows associated with the exploitation of the right originate. The verifications to be carried out are of an "investigative" nature and usually require the intervention of the forensic accounting & legal expert. And it is in this context that it is necessary to provide in the contractual agreements with third parties a power of inspection and verification ("right to audit"), which allows to carry out the necessary investigations to evaluate the potential anomalies and the impacts deriving from their manifestation (think of the verification of the use of the image or trademarks associated with the image).
  3. Continous Monitoring, through the introduction of a reporting system that gives the possibility to control the progress of asset management respecting the prevention and detection measures adopted by the owner of the right.
     

PREVENTION, MONITORING OF RISK FACTORS AND THEIR MEASUREMENT RESPECTING THE PREDEFINED PARAMETERS

The power to inspect and verify the accounts of third parties makes it possible to ascertain the correctness of the calculations made at the basis of the recognition of the economic consideration. However, the control over the work of third parties involved in the economic exploitation of intellectual property rights cannot be limited exclusively to the provision of the right to audit within the contracts.

It becomes essential to proceed with the analysis of behavioral behavior, which is the starting point for defining the expected economic result from the agreements signed with third parties for the exploitation of intellectual property rights. Such conduct must be measured with respect to:

  1. the level of the commercial proposal: the higher the qualitative level of the commercial proposal, in terms of knowledge and skills put in place by third parties, the greater the probability of success and achievement of the expected result;

  2. the level of commercial exclusivity: the higher the interdependence between the results of the parties involved, the greater the chances of success and achievement of the expected result;

Although contractual clauses may be envisaged in this regard, the conduct underlying the proposition and commercial exclusivity should be agreed by the parties through an ad hoc document that regulates the behavioral rules to be maintained during the duration of the commercial exploitation contract of the property right. intellectual.

This is a real "code of conduct" for third parties who are entrusted with the commercial exploitation of intellectual property rights.

These "codes of conduct" can meet the protection requirements now widely included, as far as companies are concerned, in the "ethical codes". In the same way, in fact, the latter generally regulate for companies organized collectively all those aspects that cannot always be regulated in individual contracts (such as, for example, compliance with labor and social security legislation, professional fairness parameters or compliance with the legislation envisaged by law 231/2001). It is precisely with the entry into force of Law 231 of 2001, and even more so with the dissemination of the model envisaged by the same, that the use of "ethical codes" has become widespread.

The "codes of ethics" also represent a way to protect the subjects who, not being part of the social contract, do not find in it a source of regulation of their relationship with the company but, despite this, are affected by the activity of the same, in synthesis of all the stakeholders of the company itself. It is in this CSR perspective that the "code of ethics" assumes for a company organized in corporate form, which decides to adopt the same, the value of a sort of Constitutional Charter or social contract between it and its stakeholders, third parties, is reiterated, with respect to the actual contract.

In the same perspective of protection, there is a need to prepare "codes of conduct" that allow individuals who do not have the same structure as the companies organized in a corporate form and consequently the provisions of law 231/2001 which applies exclusively to the latter companies, associations and entities with legal personality, to specifically regulate, beyond the provisions contained in the individual contracts, aspects that otherwise would not be regulated by the parties by negotiation.

Just think about the subject of the person's reputation in seeing their name and their image associated perhaps with economic sectors so-called "Controversial", such as the prostitution or tobacco industry or the issue of honor and the violation of one's own ethical and moral values ​​which for the person can be even more characteristic than what these values ​​can pertain to a society.

It is therefore with the goal to reducing the inter partes regulatory deficit, which can be found in some relationships for the sole reason of having the individual as a contracting party, although these - as can be seen from the examples above - can manage and produce value and volumes from a numerical point of view similar to those found with respect to the activity of companies organized in corporate form, which fits into the idea of ​​the "code of conduct".

 

A cura di Fabrizio Versiero e Marco Carlizzi

 

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