Is Freeing Up Intellectual Property Not In Our Economic Interest?

from the says-who? dept

Andrew Leonard, at Salon.com, has written an article picking up on a few different recent stories concerning how the entertainment industry is still trying to overly protect pieces of intellectual property. One of the stories he picks up on is that documentary we wrote about recently that can't be watched anymore, because the licenses to some of the content in the film have expired. Leonard finishes his piece by saying the reason this isn't getting much of a response is because there's no economic incentive in the industry to free up this content and let it be seen. This, unfortunately, is a misconception about the discussion over intellectual property. Too many people seem to assume that the idea of freeing intellectual property is somehow "anti-capitalist" or bad for the economy, when it's much more likely that the reverse is true. The idea behind the market is to let the market decide the price of a good, and that doesn't change if that value is zero (which it can be if the supply is infinite, as is the case with intellectual property). Intellectual property laws, however, set an artificial barrier, making the market inefficient. So, if anything, it's these intellectual property protections that are causing problems in the market. And, as people are beginning to realize, it is absolutely possible to make money off of content that most think have no economic value. Opening up that "long tail" opens up plenty of new opportunities to make more money, because the market expands. The resources available to make new goods and services becomes much wider, and those raw materials feed into new, valuable offerings that do have economic value. So, while making a documentary available again may not seem to have direct positive economic value, that's short-sighted. Opening up that content makes it possible for someone to figure out a way to add economic value to it.

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  • identicon
    Darren, 5 Jan 2005 @ 8:50am

    What are you arguing?

    I just have no clue what your argument could be here. Intellectual property - patents, content, etc. - needs to be protected in the same way physical property needs to be protected. Theft is theft, whether it be via a home burglary, corporate embezzlement scheme or a file-sharing network. Owners of intellectual property should have the right to say who gets access to their creations and at what terms. You may think that corporations or individuals would be able to better profit from their IP by freely opening it up - a la the open source movement - but that's for them to decide.

    Granted, the methods the government uses to protect this property can be arbirtary and increasingly difficult to enforce in a digital world, but to argue that the need for such protection doesn't exist doesn't wash with me.

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    • identicon
      Anonymous Coward, 5 Jan 2005 @ 9:08am

      Re: What are you arguing?

      "needs to be protected in the same way physical property needs to be protected." exactly.. I see something in someones house that I like? I cant just walk in there and take it, but I can go buy or make one myself.. nothing stopping me there.
      The problem with patents/IP etc is that they try to extend that far and further.

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    • identicon
      Chris, 5 Jan 2005 @ 9:16am

      Re: What are you arguing?

      I think the points being made are:
      1) there's a general misconception (or lack of knowledge) about how money can or can't be made when using non-standard protections
      2) There are alternatives available for protecting IP other than stadard copyrights, patents, etc.
      3) There is a significant amount of IP that has been overly protected, a scenario which arguably leads to consumer backlash
      4) The general public most likely does not understand or care about licensing or other intangibles - they simply want to share experiences and communicate with their peers and will develop methods to do that

      reply to this | link to this | view in chronology ]

    • icon
      Mike (profile), 5 Jan 2005 @ 9:16am

      Re: What are you arguing?

      Theft is theft, whether it be via a home burglary, corporate embezzlement scheme or a file-sharing network.

      Except that this isn't actually true. Even the Supreme Court has ruled that copyright infringement is not theft. Theft involves someone missing something at the end, which is not true in the case of intellectual property.

      You can argue that protections need to be there, but arguing that it's theft is simply wrong.

      You say that owners should have the right to say who gets access to their creations and at what terms, but that's not true of physical goods either once they're sold. The buyer then has the right to do what they want with it. Unfortunately, the way intellectual property laws are applied, that right is taken away.

      And, more oddly, completely unlike physical goods, intellectual property passes into the public domain after a period of time.

      For all these reasons, and more, it's pretty clear that putting up a 1-to-1 analogy saying that intellectual property needs to be treated the same as phsyical property simply doesn't make sense.

      My argument is simply that everyone who is so afraid of this "freeing" of intellectual property are actually hurting themselves, by closing off market opportunities. In other words, they'd be better off embracing this than holding back.

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      • identicon
        Darren, 5 Jan 2005 @ 11:15am

        Re: What are you arguing?

        obviously i was simplifying my argument earlier to make a general point, but let me address your rebuttals. first, you say that theft involves something missing at the end - what if i were to steal $100 from my neighbor, invest the money and return it inconspicuously at a later date, keeping the gains. nothing is missing at the end, but a theft has still occurred.

        you say that sellers of physical goods do not have the right to determine how things get sold by buyers - but in certain cases, there are laws in the books to prevent certain types of resale - scalping football tickets, for one example (though im sure you'd argue that that should be legal as well and you may argue whether the ticket is a physical good at all).

        But overall it's true that with physical goods, most usage rights get transferred to the buyer. however, if i sell you a chair with a proprietary and patented material or design, and you try to copy the design and then mass-produce a replica of the chair, that would be illegal according to US law. and if for some reason, there was a technology you had that allowed you to magically reproduce that chair at little to no extra cost and sell it around the world, I may think twice about what value I assigned to the chair.

        as far as the fact that IP, unlike physical property, passes into the public domain after a certain amount of time, i can't argue that. as i said, the rules governing IP are arbitrary (as are most government rules, for that matter) but the arbitrariness is a direct result of the difficulty of determining what is valid IP and then protecting it.

        frankly, whether copyright infringement is theft or not misses the point, and i apologize for not being specific enough. my main point was just because you can't touch it or smell it or taste it, IP is still property, and thus should have protections, usage rights, etc.

        i am not a lawyer, nor a technologist, so my argument is more of a visceral one than an intellectual one. and i would agree with your assessment that businesses need to be more creative about how to profit from IP and less obsessed with how to protect it.

        But to me, one simple fact remains: technology that is widely available today makes it very easy (and easier still in the future) for any piece of IP that can be put into 1s and 0s to be disseminated and copied, anonymously, repeatedly and without any value assigned to the product, even if there would otherwise be value were the product not freely available. and there need to be laws and rules designed to protect that property.

        i am interested in hearing your reply. you obviously take this issue very seriously and have given it a lot of thought and am curious why we end up on very different sides.

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        • identicon
          Anonymous Coward, 5 Jan 2005 @ 11:34am

          Re: What are you arguing?

          Darren, you have a very valid point however you are missing the other side of the picture. The definition for IP is not very specific, and anything that isn't specific can be abused (and sadly that is the current state of things today) Patents have a very valid and necessary purpose but when you abuse the system then it needs to get changed.

          With technology, everything moves so fast and there are hundreds of people doing the same thing and coming up with the same ideas, it is not like the world 50 years ago. Being a small software company, one of our biggest fears is that one of our 'novel ideas' may infringe on someone’s patents (seeing that almost every single new product is hit with some patent infringement claims) and only those with large wads of cash can get by that 'wall'.

          Stealing a physical item is a very clear issue, IP and patents is an entirely different ball game. What it really all comes down to is "who is abusing who?" patents and IP laws were created to protect those who come up with it, not give them a means for extortion and abuse of the rights provided - that is the problem.

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          • identicon
            Darren, 5 Jan 2005 @ 11:53am

            Re: What are you arguing?

            anonymous, i agree that the current state of protecting IP is in need of reform - that rich companies with deep pockets can abuse the system, by getting and then enforcing silly or, even worse, wrongly issued patents. but im not sure how reform would look - it's much easier to point out abuses and problems - does anyone think tort reform of some sort wouldnt also be welcome. what are the solutions?

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        • icon
          Mike (profile), 5 Jan 2005 @ 11:56am

          Re: What are you arguing?

          But to me, one simple fact remains: technology that is widely available today makes it very easy (and easier still in the future) for any piece of IP that can be put into 1s and 0s to be disseminated and copied, anonymously, repeatedly and without any value assigned to the product, even if there would otherwise be value were the product not freely available. and there need to be laws and rules designed to protect that property.

          That's the crux of the issue. The technology makes it easy, and people are doing it. So far, every attempt to stop it legally has had the reverse effect.

          Sure, it would be great if you *could* stop copying like this. But you can't. And attempts to stop it legally have the reverse effect, while also pissing off the people who want your product.

          From a business standpoint, this is simply pointless. Meanwhile, all historical evidence suggests that coming up with new business models that embrace what the technology allows us to do opens up new business models that offer a much higher ability to profit.

          For an analogy, take the automotive industry. When it first came about, horse and buggy makers freaked out, realizing it would kill their *existing* business. They forced through silly laws like the one where any automobile had to have someone walking in front of it waving red flags.

          That is, instead of admitting that the technology had changed the market and that it was in their best opportunity to embrace it and change, they fought it... and they lost. They will always lose, because consumers determine how the market develops. The problem in that situation is that the buggy makers considered themselves to be in the buggy business and not the transportation business. For that reason, they missed the opportunity to expand into much wider opportunities in automobiles, and instead tried to protect the dying "buggy business."

          With intellectual property we're facing the same thing. Companies misinterpret their business. The recording industry thinks it's in the CD selling business -- not the "entertainment" business. Patent hoarding companies think they're selling licenses -- not innovation.

          The list goes on and on. However, technology has forced the market to change. Consumers realize this and are responding accordingly. It's the legacy businesses that don't recognize it... and are suffering accordingly.

          The simple point is that you can create all the IP protection laws you want, but it doesn't change the fundamental nature of what's happening in the market and what people want. Those fighting the legal battle are losing on every front and making things worse as they go. A strategy that embraces opening up lets them update their business model to match what the market is telling them.

          reply to this | link to this | view in chronology ]

          • identicon
            Darren, 5 Jan 2005 @ 1:05pm

            Re: What are you arguing?

            Sure, it would be great if you *could* stop copying like this. But you can't. And attempts to stop it legally have the reverse effect, while also pissing off the people who want your product.

            not so sure this is true - the strategy the music industry has taken - lawsuits against transgressors combined with baby steps into digital downloads - seems to have a done a decent job at generating revenue (the biz is far from healthy, of course, but unauthorized downloading seems to have at least stabilized and services like itunes and napster have shown some real traction despite imperfect protection schemes - the sales declines in the industry may be more due to blah product than technology)

            i guess i just still don't understand the solution side of the equation - how can a company in the biz of producing IP embrace a technology that threatens to commoditize all content, UNLESS it also simultaneously works to buttress the legal protections such property has always enjoyed. the answer may be that i am not creative enough to see the biz model that can ensure that the technology is used in a way so that content can maintain some semblance of value.

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            • identicon
              Chris, 5 Jan 2005 @ 2:08pm

              Re: What are you arguing?

              I'm pretty sure the legal strategy the RIAA and MPAA have taken has, and will continue to fail (references).
              But you correctly site instances, itunes and napster, where consumers are willing to pay for IP despite their being an easily accessible "free" download elsewhere. This is where the argument, "why would I pay for something if I can get it for free?" breaks down. Because, it seems, inherently people are willing to be fair. People give money to NPR and PRI because they like the service - they feel it is fair. The mozilla Firefox project is another recent example of a large number of individuals willing to give money to a product that was made freely available: $250,000 in ten days. Not bad. And the BBC is undergoing a massive archiving project that will be protected under a Creative Commons License.
              Maybe it's just a matter of perspective. Content can still be protected, but maybe they can be protected differently. And maybe, as a result, more money will be made by more people.

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              • identicon
                Anonymous Coward, 5 Jan 2005 @ 4:38pm

                Re: What are you arguing?

                I honestly thought people give money to NPR and PRI as a political statement. It is not so much that they like the service as they are making a political contribution. NPR and PRI being decidedly liberal in their contenet. And giving to Mozilla for Firefox could also be seen as "political". I have friends that have given to anything "Non-Microsoft" because they hate MS so much. I am willing to bet that a significant fraction of that $250k was "Let's stick it to MS". And I see the success of itunes and napster being attributed more to people wanting to deal with a single TRUSTABLE source for their entertainment and pay a little rather than the alternative. Sure I can get it for free, but how many different P2Ps would I have to deal with and the associated risks and headaches of file sharing. They are paying for ease of use and security. Remove the political factors from your NPR/PRI examples and move things into the commodity realm and the "fairness" theory breaks down. Would people donate to a plain non-political radio station that provides quality content like they donate to NRP? Doubtful, because they can just turn the dial and get it for free. Some of my same freinds that will pay mucho bucks in their anti-MS endeavors happily download copyrighted music for free and then say, "Why should I pay for it? It's free." Oh yeah, they also happen to listen to NPR a lot too.

                reply to this | link to this | view in chronology ]

                • identicon
                  Chris, 5 Jan 2005 @ 7:29pm

                  Re: What are you arguing?

                  It is not so much that they like the service as they are making a political contribution.
                  Political or non-political really makes no difference in my example.
                  I have friends that have given to anything "Non-Microsoft" because they hate MS so much.
                  I have friends that love Arm&Hammer so much they'll always buy their baking soda, toothpaste, and dishwashing soap.
                  Remove the political factors from your NPR/PRI examples and move things into the commodity realm and the "fairness" theory breaks down.
                  Why remove them? People will always pay or not pay for things in a subjective manner, especially IP. Marilyn Manson or Toby Keith, makes no difference.
                  They are paying for ease of use and security.
                  This may be true and probably part of the problem the RIAA doesn't recognize - people are paying for the ease and security of downloading a file rather than for the quality of the product. It's pretty easy and secure to buy or order a CD.
                  Would people donate to a plain non-political radio station that provides quality content like they donate to NRP? Doubtful, because they can just turn the dial and get it for free.
                  Why is it doubtful? People will gravitate towards quality if it delivers something to them. There's plenty of free crap out there, but I don't partake in it simply because it's free. Do you?

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          • identicon
            Yay, 23 Dec 2005 @ 6:58am

            Re: What are you arguing?

            I support Mike's decision based solely on the fact of better grammar.

            Though, if you wanted me to do it on the content, I would back him for that too.

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  • identicon
    Brian Shock, 5 Jan 2005 @ 9:07am

    No Subject Given

    Economic theories are simply tools. The "free market" has some wonderful capabilities and some serious limitations. For a certain period, free markets generate value through innovation and lower prices. Eventually, however, some competitors gain the upper hand and realize that competition -- the mechanism by which the free market generates its value -- is not in their best interest. These former competitors then work to stifle competition through legal or illegal means, often while hypocritically sloganeering about the value of the "free market" (meaning that they should be free from interference, while any potential competitors should be regulated out of business).

    My apologies for the condescending tone of this lecture. It seems necessary, however, since the point never seems to sink in with you corporate lackeys out there.

    reply to this | link to this | view in chronology ]

  • identicon
    Mike, 5 Jan 2005 @ 10:45am

    IP value

    The value of any intellectual property is whatever someone will pay you for it. If no one wants it at any price, its value is zero. The library is full of books, still in copyright, which no one will pay anything for; stock footage houses are full of clips that no one wants. If you knew which ones they were, you could make them available for free and concentrate on the ones that will make some money.

    reply to this | link to this | view in chronology ]

    • identicon
      Darren, 5 Jan 2005 @ 11:21am

      Re: IP value

      This I certainly understand - but technology will make it easy for all books - whether they have value in the physical world or not - to be digitally available for free on file-sharing networks, and as a rational consumer, if i am not burdened by laws nor morals, i will gladly opt for the free version, right?

      reply to this | link to this | view in chronology ]


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