Corporate control of intellectual property for wealth maximisation: Prospects for stakeholders’ protection within corporate law

• Citation: (2020) IPLJ 13
• Published date: 22 January 2021
• Pages: 13-34
• Author: Amodu, N.
• Date: 22 January 2021

CORPORATE CONTROL OF

INTELLECTUAL PROPERTY

FOR WEALTH MAXIMISATION:

PROSPECTS FOR STAKEHOLDERS’

PROTECTION WITHIN CORPORATE

L AW

 

Postdoctoral Researc h Fellow, University of Cap e Town

ABST RACT

Corporate i nterests have dic tated globalise d protection and e nforcement of intelle ctual

propert y rights (IPRs). Cor porations have not on ly controlled IPRs a s exclusive private

propertie s, gotten IPRs strengthe ned as trade-related in th e World Trade Organisat ion’s

Trade-Related Asp ects of Intellect ual Proper ty Rights ( TRIPS), but have also la id

propert y-based human r ights protection cl aims to IPRs. W hile IPRs contr olled by

businesses have la rgely enhanced shar eholder value, they have also engen dered corporate

abuses with negat ive impacts on comp eting inter ests of other corp orate stakeholde rs,

including the e mployees, contract ors and consumers. This pa per interrog ates the extent

to which such stake holders are (or can be) protecte d within the I P law and corpor ate

         

        

remedies availa ble within the IP law syst em, the paper exam ines not only curre nt possible

safeguards a t corporate law bu t also proposes new a nd complementar y roles corpora te

law may play towards the pr otection of victim stakeholde rs from asocial control of IPRs

using the cor porate form.

KEYWORDS: Cor porate abuse of IPRs; cor porate law amend ments; intellectu al property

rights misu se; stakeholder protection; we alth maximisation

  

Intellectual prope rty (IP) refers to a loose cluster of legal doct rines that

regulate the uses of dif ferent sorts of ideas and insig nia. Copyright law

protects original for ms of expression; patent law protects inventions a nd

discoveries; trade mar k law protects words and symbols; tra de secret law

protects commercial ly valuable information; and the right of publicity protect s

celebrities’ interests in thei r images and identities.1 Patents, tra de marks,

copyrights and t rade secrets have essentially b ecome business tools and IP

law may generally be considered as a legal protec tion of monopolies over legal

 The author ack nowledges the insightful com ments of the anonymous reviewer s on the earlier

draft of thi s article. All re maining er rors are, of cou rse, entirely t he author’s. The author is

available at nojeemlaw@yahoo.com.

1 W Fisher ‘Theorie s of intellectua l property’ i n S Munzer (ed) New Es says in the Legal an d

Political Theo ry of Property ( 2001) 1.

13

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2 s eparating ‘authors’ from ‘owners’ of IP rights (IPRs) towards the

promotion of innovations and creativ ity.

Although IPRs are usu ally described as the rights given to per sons over the

creations of their mind s,3 they have become essentially trade inst ruments; this

might explain why there was advance ment in research and innovation leading

     

dysfunction compared t o later research and cur e for life-threateni ng diseases

like malaria.4 It would appear t hat corporate executives have leveraged their



technology (IT) and t he pharmaceuticals to exclusively ‘propertise’ and cont rol

different insignia , (innovative) ideas and other intangible asset s.5 Health care

products are patented for com mercial gains and with t he aid of trade secret

law, together with effective employment or service contra cts management,

workplace knowledge of skilled employees are protected t owards edging out

competitors.



in corporate execut ives and increases returns on i nvestments, but also attracts

prospective investments i n these industrie s. This is equally good news for

the IP law system as it contr ibutes to the overall objective of fundi ng needed

research towards the st imulation of innovation and creativity. This also, in the

         

However, other than enhancing shareholder value, cor porations are equ ally

expected to manage the com peting interests of per sons who can affect, or are

affected by, the achievement of a company’s purpose or have legitimate claims

         

      

operations.6 These person s are known as ‘stakeholders’ and they include

employees, creditors, end-user s of corporate goods and ser vices, suppliers,

contractors, cust omers, regulators, host s and impacted commu nities, the

media, among others.

There have been growing conce rns about the disregar d for genuine and

legitimate stakeholder inter ests arising from t he abuse of corporate control

of IPRs for shareholders’ wealth maximisation. For inst ance, there have been

perceived tensions over the protection of the other wise ‘general’ know-how of

highly skilled employees, par ticularly salesmen withi n supply chain systems

and engineers worki ng for software licensing cor porations. Professional

employees in such corporations a re sometimes victim ised using trade sec ret

2 R Chesmond ‘When lega l fictions coll ide: the primac y (or otherwise) of the sepa rate entity

principle of cor porate law in intelle ctual propert y cases’ (2006) 11 Deakin L Rev 6 9, 70–2 .

3 Se e generally https://w ww.wto.org/english/trat op_e/trips _e/intel1_e.htm (accessed 9 Se ptember

2020).

4 RL Oste rgard Jr and S E Sweeney ‘I ntellectual P roperty Rights, the R ight to Health, an d the

UDHR: Is Recon ciliation Possible?’ in MA Ba derin and M Ssenyonjo (eds) Internat ional Human

Rights Law – Six D ecades after the UDH R and Beyond (2010) 190.

5 JJ OseiTutu ‘Corporat e human rights to i ntellectual pr operty prote ction’ (2015) 55 Santa Clara L

Rev 1, 32

6 BU I hugba ‘Compulsory Reg ulation of CSR: A Case Stu dy of Nigeria’ (2012) 5 J Pol & L 68, 69.

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