Intellectual Property Rights

In a recent article on stopping IP theft, the author talks about how to protect intellectual property in the manufacturing field. While I don’t think having designs and innovations stolen is a good thing, I wonder if legislation and regulation are effective means to deal with the problem. I will draw comparisons to the music and movie industries to show how intellectual property claims can become exaggerated. I also draw parallels with Open Source software development and show how copying may not be a bad thing.

What is “Intellectual Property”

As Wikipedia puts it, intellectual property is:

a legal concept which refers to creations of the mind for which exclusive rights are recognized.[1] Under intellectual property law, owners are granted certain exclusive rights to a variety of intangible assets, such as musical, literary, and artistic works; discoveries and inventions; and words, phrases, symbols, and designs. Common types of intellectual property rights include copyright, trademarks, patents, industrial design rights, trade dress, and in some jurisdictions trade secrets.

While property rights are an old social construct, dating back thousands of years, treating thoughts, ideas, and concepts as property is a relatively new practice. Unfortunately, the word “property” carries with it some baggage.

When property is a tangible physical object, the theft of that object deprives its owner with the value associated with the object. If you take my bike, I can’t ride it as long as you have it. The problem I see with intellectual property is, the act of copying something like a design doesn’t deprive the owner of the property. If I download a CAD file of a part, that doesn’t prevent the designer of that part from having the file or making the part. Yes, it’s true that I don’t have to rely on that individual to produce the part, which may deprive him of some revenue. However, he’s still able to produce the part for anyone who wants to buy from him.

How the music industry sees intellectual property

Stolen Intellectual Property in Korea
Image from Rex Roof on Flickr

A couple of years ago, the Recording Industry Association of America sued Limewire for $75 trillion. At the time of the lawsuit, the GDP of the United States was about 14 trillion dollars. The entire combined world-wide GDP was about 62 trillion dollars. Somehow, the recording industry felt it was entitled to more money than existed in the world at the time. How was this possible?

Because it is difficult to quantify the value of an idea, the statutes that establish fines for intellectual property violations can be wildly out of touch with reality. In the Limewire case, there were about 11,000 individual files in question. However, each file had been downloaded thousands of times. To the recording industry, this constituted millions of violations worth trillions of dollars. The penalties for infringement are far greater than the potential loss of income. The statute allows for awards of $150,000 per incident. When the average cost of a song on iTunes is $0.99, I have a hard time understanding how downloading that song cost the artist $150,000.

Next week, I’ll continue this topic with parallels to Open Source software and suggest why maybe imitation really is the most sincere form of flattery.