Helena Majdúchová et al.
Proceedings of Scientific Papers
University of Economics in Bratislava
Faculty of Business Management
Department of Business Economy
Foundation Manager
Masaryk University Press
Brno 2022
Helena Majdúchová et al.: “Sustainable Business Development Perspectives 2022”
Proceedings of Scientific Papers
Scientific Committee
|
prof. Ing. Peter Markovič, PhD. DBA |
University of Economics in Bratislava, Slovakia |
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doc. Dr. Michael Zhelyazkov Musov |
University of National and World Economy, Bulgaria |
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doc. Ing. Michaela Krechovská |
University of West Bohemia, Czech Republic |
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Dr hab. Grzegorz Głód, prof. UE |
University of Economics in Katowice, Poland |
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Dr. Ariel Mitev |
Corvinus University of Budapest, Hungary |
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doc. Dr. sc. Ivana Načinović Braje, PhD. |
University of Zagreb, Croatia |
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prof. Mgr. Peter Štarchoň, PhD. |
Comenius University in Bratislava, Slovakia |
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doc. Ing. Mgr. Gabriela Dubcová, PhD. |
University of Economics in Bratislava, Slovakia |
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doc. Ing. Mgr. Jakub Procházka, PhD. |
Masaryk University, Czech Republic |
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doc. Ing. Jindra Peterková, PhD. |
Moravian Business College Olomouc, Czech Republic |
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prof. Ing. Lilia Dvořáková, CSc. |
University of West Bohemia, Czech Republic |
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doc. Ing. et Ing. Renáta Myšková, PhD. |
University of Pardubice, Czech Republic |
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doc. RNDr. Ing. Hana Scholleová, PhD. |
University of Chemistry and Technology, Prague, Czech Republic |
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prof. Ing. Zuzana Dvořáková, CSc. |
University of Chemistry and Technology, Prague, Czech Republic |
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prof. Ing. Jiří Hnilica, PhD. |
University of Economics in Prague, Czech Republic |
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doc. Oleksandr Litvinov, DSc. |
Odesa National Economic University, Ukraine |
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prof. Julie Elston, PhD. MBA |
Oregon State University, USA |
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prof. Yevhen Ivchenko, Dr. Sc |
Volodymyr Dahl East Ukrainian National University, Ukraine |
Helena Majdúchová et al.: “Sustainable Business Development Perspectives 2022”
Proceedings of Scientific Papers
Reviewers:
prof. RNDr. Ing. Ľudomír Šlahor, CSc.
prof. RNDr. Darina Saxunová, PhD.
Editors:
PhDr. Mária Kmety Barteková, PhD.
Ing. Dana Hrušovská, PhD.
Ing. Mária Trúchliková, PhD.
Ing. Monika Raková, PhD.
Papers have not been linguistically and editorially edited. The authors are responsible for the content and level of individual contributions.
Approved by the Pedagogical and Publishing Committee of the University of Economics in Bratislava in the publishing program for 2022 as a peer-reviewed proceedings of scientific works.
Publisher Masaryk University Press, Brno 2022
Pages 318
ISBN 978-80-280-0197-1 (online ; html)
https://doi.org/10.5817/CZ.MUNI.P280-0197-2022
CC BY-NC-ND 4.0
Creative Commons Attribution-NonCommercial-NoDerivatives 4.0
Content
Helena Majdúchová 1 & Peter Štetka 1
1 University of Economics in Bratislava, Faculty of Business Management
https://doi.org/10.5817/CZ.MUNI.P280-0197-2022-15
The aim of this paper is to identify specific problems of intellectual property rights protection in creative industries and to identify the current state of this protection in the Slovak and Czech Republic. The results presented in this paper are based on the official statistics of the Czech and Slovak Statistical Offices, which conduct two-year cycles of surveys of innovative activities of companies. In June 2020 data for 2016-2018 were published. A harmonized Eurostat model questionnaire was used for data collection by all EU countries, thus ensuring comparability of the data gathered. These results are interpreted with the ambition to suggest appropriate solutions. The proposed paper is also reflecting the current state of digitalization and digital transformation currently identified in creative industries and is raising relevant questions, such as: How can intellectual property rights be enforced in the digital environment to prevent infringements of intellectual property rights and to limit the legitimate use of copyright exceptions? How to find a balance between strong IPR protection and the ability of businesses to exploit the creative potential of the knowledge economy? How can consumer and competitor rights be transferred from analogue to digital context? Do we need new categories of intellectual property rights? Can we create a system of rights that ensures that the scope and duration of rights do not create obstacles to the expansion of creativity?
Keywords : intellectual property, innovation activities, creative industry, trade secrets
The creative industry (CI) is located between art and technology and in its whole context it creates the creative economy (Caves, 2002). We associate this concept with human ingenuity, which can be the source of any economic activity. UNCTAD and the United Nations Development Program (UNDP) see it as an evolving concept based on creative activities, encompassing a diverse set of knowledge-based economic activities.
It consists of industries that focus intensively on the creation and use of intellectual property products, such as music, publishing, filmmaking, theatre, photography, video production, but also industries that focus on providing creative services between companies, including advertising, public relations and direct marketing as well as industries that bring added value to the economy in the form of research, development, software, etc. The creative industries are thus at the border between human creativity, ideas, culture, intellectual property, knowledge, and technology (EY, 2015).
The process of creating and implementing innovations in CI is often an interdisciplinary process, in which many entities are involved, while their goals, motives and needs do not have to be identical (Majdúchová & Barteková, 2020). The process of creating innovation in these sectors is often the result of partnerships between many actors because creativity most likely arises because of interactions and exchanges between different social actors (Wolff, 1993; Uzzi and Spiro, 2005; Tchsmuck, 2006). The technological sectors are also actively involved in this process. As an example, the production of a commercial or video game requires the participation of various experts such as engineers, screenwriters, musicians, game designers, actors, psychologists, etc (Cohendet & Simon, 2007).
CI thus becomes a source of innovative ideas and influences and contributes to the innovation potential of the economy and to the creation of new products and services (Lessig, 2001). CI companies offer services and products that can be an input to the innovation activities of other companies, both within and outside the creative industries, and are intensive users of technology, thus stimulating this segment to constant change and innovation impulses. CI companies are cross-cutting entities that influence other industries through their activities. The role of the creative industries for the innovative performance of the economy is twofold. Creative enterprises can develop and implement innovation as part of their business activities and thus directly contribute to the innovative performance of the economy. Such innovations include new products and services offered to customers (product innovations) as well as new management and business practices that increase the efficiency or quality of their outputs (process innovations). While creative companies also support innovation in other companies through creative inputs. These can be downstream i.e., creativity created in a creative enterprise is used by its customers or upstream i.e., creative companies use creative inputs from their suppliers e.g., technology manufacturers.
Intellectual property rights play an important role in the development of the creative economy (DCMS, 2001; DCMS, 2011). They protect creativity and control the commercial use of scientific, technological and cultural products.
Creativity protection through intellectual property rights
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Copyright for authors of original works and related rights for intermediaries who make works available to the public |
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Intellectual property rights that protect creativity through reputation |
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Intellectual property rights that protect creativity in product design |
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It is necessary to realize that the protection of intellectual property rights, as we currently know it in most advanced economies, was originally developed and applied mainly in the field of technological innovation for the analog age. Its aim was to find a balance between the interests of creators, investors, and users. However, the creative economy is increasingly relying on digital technologies. Electronic platforms, file sharing, music streaming have led to new business models. Applying the system of protection of intellectual property rights in the environment of the digital society thus becomes a great challenge. Given the specifics of the activities of IC entities, building creative dynamics requires maintaining a delicate balance between exclusion and openness. The impact of information technology (IT) further complicates maintaining this balance (Shapiro & Varian, 1998). E.g., in the music industry, to maintain the incentives for creators to create new works, it is important to protect new songs through copyright and to prevent them from being copied and downloaded from the Internet as much as possible (Landes & Posner, 1989). Yet, the influence of information technology leads to the rapid and mass distribution of new songs, almost for free, which increases the value of new songs (Benkler, 2006). Thus, it is possible to identify a discrepancy between an approach that favors strong content protection and an open access approach (Lessig, 2004). Due to IT, content usage control has become difficult, and peer-to-peer exchanges have led to the development of a free using culture. Illegal distribution reduces producers' profits and thus the amount of cash they could invest in the development of new works. It is therefore logical that rights holders emphasize the need to legally prevent such phenomena and to limit the illegal exploitation of someone's work and rights through legal regulations. Yet, some actors emphasize the need to simplify the protection of creative content and seek to make copyright-protected content more accessible so that it can be shared. Sharing has an impact on the dissemination of cultural diversity, creative ideas and thoughts. For many businesses, exercising IP rights may not be the only form of protection. Some welcome the possibility of open cooperation, building networks and gaining network effects, and compatibility with complementary products. If the ancillary assets are the sole property of the original creator, the provision of a free original product could increase entrepreneurs' profits from these ancillary assets. In other words, it is possible that artists do not sell their reproductions directly but earn from additional services combined with an open access product (Kabanda, 2014). Valorization of new products may not always require a strategy of exclusion and total appropriation through IP rights.
Violation of IP rights in Ci entities is a very complex problem and a challenge for stakeholders since in the current era of digitization and the advent of artificial intelligence, copying and imitation is very simple. In the current era of the Internet, where most works of art can be digitized and exchanged and shared on the web almost free of charge, IP rights are priorities in rewarding system of creators who have been involved in the creative process and who have invested cash, time, energy, and own know-how. The protection of IP rights is a matter of survival for these entities, as otherwise the motivation for their creators, to have an incentive to operate in the given sectors and to create relevant innovations, is lost. IP rights protection regimes were originally developed for the analog age. Their basic aim was to create an appropriate balance between the interests of creators and users. However, in a digital environment, it is much more difficult to create and maintain this balance.
This raises several questions:
How can intellectual property rights be enforced in the digital environment to prevent infringements of intellectual property rights and to limit the legitimate use of copyright exceptions?
How to find a balance between strong IPR protection and the ability of businesses to exploit the creative potential of the knowledge economy?
How can consumer and competitor rights be transferred from analogue to digital context?
Do we need new categories of intellectual property rights? Can we create a system of rights that ensures that the scope and duration of rights do not create obstacles to the expansion of creativity?
The aim of this paper is to identify specific problems of intellectual property rights protection in the creative industry entities and to identify the current state of this protection in the Slovak and Czech Republic.
The results of the protection of intellectual property rights in the Czech and Slovak Republics are be based on the official statistics of the Czech and Slovak Statistical Offices, which conduct two-year cycles of surveys of innovative activities of companies. In June 2020 data for 2016-2018 were published. A harmonized Eurostat model questionnaire is used for data collection by all the EU countries, thus ensuring comparability of the data gathered.
In the final part of the paper, the results are interpreted with the ambition to suggest appropriate solutions.
Even though innovation is a concept that is conceptualized in many science schools and has a significant impact on the level of the economy, it is also a concept that is difficult to quantify in terms and rates. This is true not only in the technology and manufacturing industries, but even more in creative industries. The situation is also complicated by the fact that most of the research carried out in the field of innovation processes is focused on the science, technology, engineering, and mathematics, which limits its applicability in the service sector or in creative industries. (Jaaniste, 2009). The creative industry itself is perceived as something new and innovative, and the ideas, products, and processes that the creative industry develops affect productivity not only in these sectors but also in other sectors (Cunningham, 2013).
In the following part of the paper, we present the results of creative industry companies in the use of intellectual property rights in the Slovak and Czech Republic for the period of 2016-2018. The selection of creative industries is based on SK NACE and CZ NACE classsification. These classifications were prepared according to the International Statistical Classification of Economic Activities in accordance with Regulation No 1893/2006 of the European Parliament and of the European Council (EC). The classification considers technological developments and structural changes in the economy over the past 15 years and is relevant in relation to economic development and ensures comparability with other international classifications. The industries 58-63 Information and communication; 71 - Architectural and engineering activities; 72- Scientific research and development; and 73-Advertising and market research were selected. This selection is in accordance with the European Commission's classification of the creative industries.
In the Slovak Republic, from the analyzed set of companies with innovation activity, the Information and Communication sector was the most represented, while most companies were in the size category from 10 to 49 employees i.e., small businesses. In terms of the type of innovation, companies did not focus on just one type, but combined product and process innovation. Companies in the sector have focused most on the use of copyright, followed by the use of trade secrets and trademark registration. The use of patents and utility models was relatively modest.
A similar pattern can be seen in the sector of Architectural Services and Advertising. An exception is the Scientific Research sector, in which 9 companies out of 24 companies with innovation activities applied for a patent.
In the Czech Republic, companies in the Information and Communication sector as well as in Scientific and Technical sector preferred a combination of product and process innovation. In the information and communication sector, intellectual property rights were focused on the registration of trademarks, copyrights and keeping the trade secrets. The exceptional position of the Scientific and Technical Activities sector in the field of protection of intellectual property rights has also been confirmed in the Czech Republic. All the kinds of registered intellectual property rights were recorded by this sector.
Based on the above analysis, it can be stated that in the creative industries, companies prefer less formal and more easily accessible forms of protection of intellectual property rights. The use of concluded agreements on the protection of trade secrets proved to be important. Trade secrets are not classic intellectual property rights. Trade secrets may be of a technical nature, such as drawings and designs, prototypes, manufacturing processes, unpatented inventions, know-how, formulas or recipes, genetic materials, and fragrances. Trade secrets can consist of customer and supplier lists, business models and strategies, as well as price information. It is therefore a very wide range of data and information that companies consider to be important and are trying to protect them. They can value them as much as patents or inventions.
The advantage of trade secrets is that it does not need to be registered, thus eliminating the associated costs, it can be used in combination with other types of intellectual property rights, it is not necessary to publish it (unlike the invention), its term of protection is unlimited i.e., it depends on the company's decision and its use is suitable for the initial stages of the innovation process, when the effect of the created and implemented innovation is not known yet. It is also necessary to distinguish the disadvantages of trade secrets, mainly because it is not an intellectual property right and therefore it is not covered by specific protection rights. It requires expenditures on internal corporate control of its protection, especially in relation to employees (the need of contracts that contain explicit non-disclosure and non-compete clauses), which can reduce employee mobility. The application of trade secret laws is also uncertain, and remedies vary across the jurisdiction.
The following table presents the share and the structure of enterprises with innovation activity in the Slovak Republic. It includes the frequency of using either product innovation or process innovation or both innovation activities. This table was created for creative industries only and is presenting the frequency separately for each type of business activities.
Share of enterprises with product or process innovation activities in the Slovak Republic
|
Slovak republic |
Sizeclass
|
|
|
% of all enterprises |
|||||
|
|
% of all enterprises |
with product innovation only |
Enterprises with business process innovation only |
Enterprises with product and business process innovation |
Enterprises with abandoned or ongoing innovation activities or with R&D only |
||||
|
58 - 63 Information and communication |
Between 10 and 49 |
146 |
34,75 |
20 |
17 |
74 |
35 |
275 |
65,25 |
|
Between 50 and 249 |
54 |
49,27 |
8 |
8 |
23 |
14 |
55 |
50,73 |
|
|
250 or more |
20 |
66,67 |
1 |
5 |
13 |
1 |
10 |
33,33 |
|
|
Total |
220 |
39,29 |
29 |
31 |
111 |
50 |
340 |
60,71 |
|
|
58 Publishing activities |
Total |
8 |
16,08 |
4 |
1 |
2 |
1 |
39 |
83,92 |
|
59 - 60 Motion picture, video and television program production, programming and broadcasting activities |
Total |
4 |
23,53 |
0 |
1 |
3 |
0 |
13 |
76,47 |
|
62 Computer programming, consultancy, and related activities |
Total |
162 |
43,47 |
25 |
24 |
74 |
39 |
211 |
56,53 |
|
63 Information service activities |
Total |
27 |
35,73 |
0 |
4 |
17 |
7 |
49 |
64,27 |
|
71 Architectural and engineering activities; technical testing and analysis |
Total |
114 |
34,28 |
6 |
63 |
14 |
31 |
218 |
65,72 |
|
72 Scientific research and development |
Total |
24 |
61,19 |
0 |
13 |
4 |
7 |
15 |
38,81 |
|
73 Advertising and market research |
Total |
67 |
25,80 |
6 |
29 |
32 |
0 |
192 |
74,20 |
The following table presents the share of intellectual property rights in creative industries in the Slovak Republic. It is horizontally structured by the kind of intellectual property rights and vertically by the type of business activities.
Share of intellectual property rights in creative industries in the Slovak Republic
|
Slovak republic |
Total number of enterprises |
|
|
Sizeclass
|
|||||
|
Number of enterprises with innovation |
Applied for a patent |
|
|
|
(copyright)
|
|
|
||
|
58 - 63 Information and communication |
421 |
146 |
0 |
3,42 |
0,00 |
11,87 |
40,93 |
18,44 |
Between 10 and 49 |
|
109 |
54 |
0 |
0,00 |
0,00 |
48,17 |
27,90 |
11,92 |
Between 50 and 249 |
|
|
30 |
20 |
0 |
0,00 |
0,00 |
15,00 |
45,00 |
35,00 |
250 or more |
|
|
560 |
220 |
0 |
2,33 |
0,00 |
21,07 |
38,10 |
18,35 |
Total |
|
|
58 Publishing activities |
47 |
8 |
0 |
0,00 |
0,00 |
37,52 |
94,03 |
1,00 |
Total |
|
59 - 60 Motion picture, video and television program production, programming and broadcasting activities |
17 |
4 |
0 |
0,00 |
0,00 |
50,00 |
50,00 |
1,00 |
Total |
|
62 Computer programming, consultancy, and related activities |
373 |
162 |
0 |
3,17 |
0,00 |
21,27 |
34,00 |
16,09 |
Total |
|
63 Information service activities |
76 |
27 |
0 |
0,00 |
0,00 |
3,70 |
8,57 |
13,94 |
Total |
|
71 Architectural and engineering activities; technical testing and analysis |
331 |
114 |
4 |
7,22 |
3,20 |
4,02 |
13,87 |
19,12 |
Total |
|
72 Scientific research and development |
39 |
24 |
38 |
25,64 |
0,00 |
10,22 |
19,62 |
14,39 |
Total |
|
73 Advertising and market research |
259 |
67 |
0 |
0,00 |
0,00 |
0,00 |
17,26 |
8,87 |
Total |
The following table presents the share of each type of innovation being introduced by entities operating in creative industries in the Czech Republic ( Czech Statistical Office, 2020 ), esp. product or process innovation or both.
Share of types of innovations introduced in creative industries in the Czech Republic
|
Czech Republic |
Total |
Enterprises that successfully introduced innovation in the monitored period |
|||||||||||||
|
Total |
according to the type of innovation introduced |
||||||||||||||
|
Product and process |
Product only |
Process only |
|||||||||||||
|
Number |
% [1] |
% [2] |
Number |
% [1] |
% [2] |
Number |
% [1] |
% [2] |
Number |
% [1] |
% [2] |
Number |
% [1] |
% [2] |
|
|
Information and communication activities – J /58-63/ |
1 045 |
65,2% |
100,0% |
1 012 |
63,2% |
96,9% |
694 |
43,3% |
66,5% |
114 |
7,1% |
10,9% |
203 |
12,7% |
19,5% |
|
Scientific and technical activities – M /71-73/ |
707 |
41,2% |
100,0% |
662 |
38,6% |
93,7% |
315 |
18,3% |
44,5% |
76 |
4,4% |
10,8% |
271 |
15,8% |
38,4% |
The following table presents the share of intellectual property rights in creative industries in the Czech Republic ( Czech Statistical Office, 2020 ), horizontally structured by the kind of intellectual property right and vertically structured by the type of business activities.
Evaluation of resources according to the summary of values of VRIQ criteria and after including the degree of their development
|
Czech Republic |
number of innovating enterprises |
Share of innovative enterprises which |
NACE |
|||||
|
Applied for a patent |
Applied for a Eurtoopean utility model |
Registered an industrial design right |
Registered a trademark |
Claim copyright |
Use trade secrets |
|||
|
58 - 63 Information and communication activities |
1045 |
6
|
4
|
2
|
26
|
24
|
21
|
58 - 63 Information and communication |
|
71-73 Scientific and technical activities |
707 |
16,60 |
13,00 |
6,10 |
16,00 |
13,00 |
17,7 |
72 Scientific research and development |
To maintain their competitiveness in the market, companies invest funds, human and material resources in research, development, and innovation. Companies use formal intellectual property rights such as trademarks, patents, designs, or copyrights. But this is not the only possible approach. There is also the protection of access to knowledge and information that is not generally known, but at the same time very valuable for the company itself. This information and know-how are referred to as the trade secret. It is not only about knowledge and information directly related to the technical components of the business, but also about customers, suppliers, business models and strategic plans.
Companies operating in creative industry use the informal protection of their innovation process more than other businesses. The framework of intellectual property rights thus takes on a very broad dimension, which gives countries considerable flexibility in terms of the creation of the intellectual property rights legislation, especially in the current digital age. We also acknowledge a certain scientific and academic gap in guiding the issues we have raised at the beginning of this paper. We therefore face the challenge of ensuring strong protection for intellectual property rights yet enabling the legal dissemination of knowledge and expertise as much as possible, especially in developing countries. They need to build their capacity to develop and make full use of the intellectual property system to support their creative industries, which are indeed a key driver of economic growth and international competition.
This paper is a result of the solution of VEGA project no. 1/0582/22 (Dimensions of cross-sectoral business of cultural and creative industries in the context of sustainable development), 50% share; and VEGA project no. 1/0646/20 (Diffusion and the consequences of green innovation in imperfect competition markets), 50% share.
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prof. Ing. Helena Majdúchová, CSc.
University of Economics in Bratislava
Faculty of Business Management
Department of Business Economy
Dolnozemská cesta 1/B
852 35 Bratislava
Slovak Republic
helena.majduchova@euba.sk