04 Oct 2004  What Do YOU Think?

Does Speed Trump Intellectual Property?

Speed can enhance product development and innovation, but speed can also be used effectively by fast imitators to both save design costs and preempt market share.

 

Summing Up

This month's column, in the eyes of several respondents, represents the struggle of competitive strategies based on process versus product. When seen in this light, the triumph of speed over ideas, which many see as a reality, is not necessarily onerous. And it doesn't, in the opinion of respondents, warrant additional regulatory intervention.

Paula Thornton asks, "Does it [the loss of intellectual property to rapid responders] really matter? ... In many cases IP is overutilized as a crutch (or as nail to those bearing hammers)." David Sherr recalls, "Lester Thurow introduced the idea of IP as not sustainable as a competitive advantage ... . It is knowledge that allows speed to trump IP."

As E. Hassen put it, "Intellectual property is not just about product but process as well. Speed is an integral part of process ... 'I thought of it first' is hardly a compelling argument ... . The bottom line: Speed is good for intellectual property." According to B. V. Krishnamurthy, "Of all the resources available to humankind, there is one which is given in equal measure to everyone ... . That resource is time ... using time better than others represents a capability which is difficult to replicate."

Several did suggest potential problems, however, in using speed to preempt the fruits of intellectual property. John Rudd comments, "The practice mentioned by Fox (television network) appears prima facia to be, at worst, plagiarism, and at best, opportunism." The long-term effects of strategies based solely on such practices appeared to some to be potentially counter-productive for their users. Sharika Kaul typified this view when she asked, "How many times can you copy? ... A copycat company ... is only hurting itself in the end by showing employees that it is okay to cheat."

Sairam Inumella asserts, "New legislation is not a solution to this 'problem' ... . Maybe this copycat competition will help the networks move toward strategies that play to their unique strengths, and maybe in the end this will create more interesting program choices for audiences." Azeem suggests a more appropriate response, saying, "Speed can trump IP, especially in technology industries. In the time it takes to secure a patent, you ought to have rendered your technology redundant."

Judging from the tone of these responses, is the value of intellectual property in all but a few instances or industries vastly overrated? Is the appropriate response to this dilemma to rethink processes to achieve speed as both a defense and an offense against competitors in the race to develop knowledge as opposed to placing too much emphasis on patent protection? Are government regulations protecting intellectual property applied far too broadly these days? Should they be limited to certain industries, products, or processes where they can be judged essential to innovation? What do you think?

Original Article

With the advent of the fall television season, replete with new reality TV shows, producers are presenting us with an interesting case example of speed as a competitive strategy. One specific case in point is that of the Fox Network's recent efforts to rush to market a show called Trading Spouses: Meet Your New Mommy after the announcement by rival network ABC of a similarly-conceived show called Wife Swap. In another example, Fox initiated a boxing-themed program called The Next Great Champ two months before a somewhat similar series on NBC called The Contender, which had been announced by NBC several weeks earlier than Fox announced its program.

It's an example of a phenomenon that has long characterized women's fashion. It's called the knockoff game. See a competitor's product and bring a copy to the market before the competitor can enjoy the fruits of its intellectual property. Just as there appears to be no legal defense against the knockoff game in women's fashion, network TV executives are apparently helpless to defend against it regardless of how much time they spend deploring the practice. One victim of the Fox strategy at rival ABC was quoted as saying, "It's pretty sad that unethical behavior can deny people their intellectual property."

These are the latest examples of the effectiveness of speed as a competitive weapon that was described some years ago by George Stalk and Thomas Hout in their book, Competing Against Time. Their research, stimulated in part by observations of the practices of Japanese manufacturers, concluded that increased speed from product conception to market not only reduced cost but increased quality, variety, and productivity; reduced rework, waiting, and duplicated effort; improved the working environment and morale; and increased sales and margins due to fresher products reflecting customer demand. They found that, among other things, fast competitors froze designs early in the product development process, shared information widely, and managed and executed product development and distribution through small, dedicated, decision-empowered, and experienced teams with limited senior management review and oversight. Fast competitors were often "leaders" of supply chains in which speed was emphasized over cost, information was shared among partner organizations, and duplicated effort and inventories were minimized.

Clearly, speed can be used to enhance product development and innovation, providing faster responses to customer needs. But it can also be used effectively by fast imitators, like Fox, to both save design costs and preempt market share. When used in this fashion, does it pose a threat to intellectual property? Does it discourage innovation by limiting the rewards to such efforts? Should it be discouraged by either new laws or the more diligent application of existing ones? Or does it provide a spur to the development of new products and competitive strategies that are more difficult to emulate, such as those requiring resources that play to the strengths of only one competitor? Can speed be an anti-intellectual property? What do you think?

To read more:

Reference for the quote: Bill Carter, "In Reality TV, Is it Thievery or Flattery?" The New York Times, August 2, 2004, pp. C1 and C8.

George Stalk, Jr., and Thomas M. Hout, Competing Against Time: How Time-Based Competition Is Reshaping Global Markets (New York: The Free Press, 1990).

Comments

    • Sharika Kaul
    • Manager, Business Development

    While speed is great, sustainability of the idea is more important. How many times can you copy? While a copycat company may be able to beat the company it's copying and make short-term profits, it is only hurting itself in the end by showing employees that it is okay to cheat. And if it's okay to cheat for the company, employees will think it okay to cheat their company's competitors. I think the first thing companies need to build is respect. Respect for the work they put out and respect for the way they perform. Isn't that what all great companies are about?

     
     
     
    • Pallavi Marathe
    • Patni Computer Systems Pvt Ltd

    What's the world without speed? I agree that imitators pose a deep threat to the intellectual rights of people and encroach upon their property. However, I believe it is most dependent on the decisions of individuals. It is consumers who ought to decide whose product they will accept and which ones to condemn. Once the imitators see their fate, they will learn from the experience and come up with original ideas!

     
     
     
    • Sairam Inumella

    New legislation is not a solution to this "problem." Speed has always been part of the competitive arsenal, as your examples illustrate. When Japanese companies used their speed to become copy tigers (to improve on the original they copied), other manufacturing companies had to evolve in order to compete. The same applies to the services industry, including entertainment. As someone once said, Pace is the fifth P in the Marketing Mix ("the 4Ps"). If pace rewards efficient, well-organized, smarter companies, it might be in the best interest of consumers. We should not try to regulate it.

    Television networks have to consider this threat as part of their competitive strategy planning just like the fashion houses. Maybe this copycat competition will help the networks move toward strategies that play to their unique strengths, and maybe in the end this will create more interesting program choices for audiences.

     
     
     
    • Anonymous

    Yes, speed can work against intellectual property. Sometimes it can discourage innovation by limiting the rewards and sometimes it serves as a stimulus unto itself, facilitating innovation and providing greater rewards.

    It would be very difficult to create laws or regulations to prevent speedy anti-intellectual property companies. Laws and regulations in this instance don't appear to be the right solution.

     
     
     
    • Lee H. Igel
    • ExerPsych Lifestyle Management

    I will not risk expressing a point in my own words on the subject of speed as a threat to intellectual property, and so will invoke the spirit of "Honest Abe" Lincoln who said something like, "Good things come to those who wait, but only things left behind by those who hustle."

     
     
     
    • David M. Sherr
    • Founder, New Global Enterprises

    To my knowledge, it was in 1993 that Lester Thurow introduced the idea of IP as not sustainable as a competitive advantage. He was the keynote speaker at the InterOp Communications Conference in San Jose. The journey began with natural resources, superseded by capital availability, eclipsed by technology ownership (one form of IP), and ending with knowledge. It is knowledge that allows speed to trump IP. And as we are finding out, the game is infinite and being played at an increasing rate. Knowledge is a commodity. It is also the ultimate reusable and renewable resource, limited only by the experience and mental capabilities of the entire human race.

     
     
     
    • Paula Thornton
    • Interaction Design Strategist, Iknovate

    Does it really matter? That is, is intellectual property a sustainable differentiator upon which to base a business? Does the current evidence bear this out?

    I think the reality we are facing today is actually a good indicator that we are focusing on the wrong things. That's not to say that we shouldn't be innovating ideas and protecting them; it's just that it has to be seen as a minor percentage of a much larger suite of deliverables that makes a particular offering "better" than its competitors.

    I'm not dismissing it in total, but in many cases IP is overutilized as a crutch (or as a nail to those bearing hammers).

     
     
     
    • Fabio De Vincenzi

    In my opinion, the ethical aspect is the main issue, together with market health. I'm writing from Italy, and I have a lot of examples here of what happens when unethical but profitable behavior is not actively fought.

    Competition it is not only adversely affected, but sometimes totally distorted, and the effect is terrible in the long run for competitors in the economic system. More than that, the effect is dangerous for the morale, work dedication, and self-esteem of (honest) people involved.

    In my opinion, in order to avoid the exponential growth of unethical conduct, every time it is clear that unethical conduct is part of a competitive strategy (repetition, as in the Fox example, is good evidence of this), the right strategy for damaged competitors is only one: Fight.

    If it means spending money for a trial, so be it. It is important for the whole market, and not only for the people and companies directly involved. IP protection is only one issue and, in my opinion, not the most important.

     
     
     
    • Amit
    • Consultant, Infosys

    Speed is a globalization challenge of increasingly dynamic, competitive forces on display. It's what I call the phenomenon of the hyper-competitive age. The key is not to try and regulate it, but to tackle it in the right perspective. There is a higher order to the role that strategy and marketing play in the hyper-competitive age. You have to be smart enough to be able to entrench in the critical mind-set of consumers. Also, the ROI has to be more accurate about cash flows over time. A price-skimming strategy versus a penetration strategy can only be decided if you accurately forecast your timeline for your competitor's time to imitate.

     
     
     
    • E. Hassen
    • NHS

    Intellectual property is not just about product but process as well. Speed is an integral part of process. Great ideas abound but implementation is key. "I thought of it first" is hardly a compelling argument. Shakespeare is not noted for his originality of plot, for instance.

    Just as more traffic means more traffic jams—and more efficient transport—so does greater speed portend faster development and more creativity.

    The bottom line: Speed is good for intellectual property.

     
     
     
    • Azeem
    • Managing Director, OxMedia Ltd.

    Speed can trump IP, especially in technology industries. In the time it takes to secure a patent, you ought to have rendered your technology redundant. Many a large firm (such as Newbridge Networks) was built without recourse to patents.

    But while patents are liberally handed out by the USPTO and other patent offices, and so long as they can apply to the slimmest of processes (like software or, heaven forbid, business processes), firms have to resort to patent tactics if only to protect themselves from the onslaught of litigators.

     
     
     
    • B. V. Krishnamurthy
    • Director and Executive Vice-President, Alliance Business Academy, Bangalore, India

    Of all the resources available to humankind, there is one which is given in equal measure to everyone—rich or poor, young or old, irrespective of gender, race, geography, or any other variable. That resource is time. Organizations which can better utilize time often find themselves at a competitive advantage over others.

    The problem with the examples cited in your article is that in the entertainment business, companies try to create hype by announcing their forthcoming ventures before they are anywhere near completion. This can potentially lead competitors to outsmart them. The element of surprise, which is essential for success, is missing here.

    Whether we like it or not, time-based competition is here to stay. Although a resource, using time better than others represents a capability which is difficult to replicate. Therefore, constant innovation or, rather, waves of innovation, in which organizations can come up with better products and services all the time, holds the key to success. Everything could perhaps be successfully imitated, given sufficient time. The trick is to be able to move to a different plane before the imitation happens and thereby checkmate competition.

     
     
     
    • Michael Pettengill
    • Unemployed Engineer and Student

    That these reality TV shows can be cloned so quickly merely indicates their lack of innovation. Other than the wall-to-wall commercials and million-dollar prizes, reality TV shows have been seen for decades on PBS and the BBC. One cannot instantly duplicate true innovation.

    During my nearly four years of unemployment, I've thought a great deal about intellectual property matters. I have concluded that my peers and I have not been helped by changing IP laws, as patents and copyrights are used to fund profits instead of innovation and new product development—making engineers almost unnecessary.

     
     
     
    • John Rudd
    • Supply Team Leader, BHP Billiton

    This is an intriguing dilemma for producers of new programs. The practice mentioned by Fox appears prima facie to be, at worst, plagiarism, and at best, opportunism. Is their product sufficiently different to avoid being plagiarism and therefore infringing on intellectual property (if the IP is identifiable)? Or is their product the outcome of opportunism which is encouraged and enshrined in free markets? If the practice is the former, then it should be prohibited by law and the initial producers of such programs should be able to register their idea and have it copyrighted. Have they become victims of their own rush to market and not taken the time to protect themselves properly from imitators?

    Here's another example. Student B copies an assignment written by student A, but submits it before student A. Who will be brought before the board for plagiarism?

     
     
     
    • Edward Hare
    • retired Director of Strategic Planning, A Fortune 300 manufacturer

    Every self-respecting course I've seen on business or product development always teaches one to consider when and how to protect an idea. If an idea can't be patented, copyrighted, or protected by brand, of course it will be copied, and in some industries faster than others. It doesn't make one's idea bad, just not defensible. It might even be made better or cheaper. Isn't that what the market wants?

     
     
     
    • Jose M. Vicente Gomila
    • Co-Director

    As Lester C. Thurow wrote in the Harvard Business Review in September 1997, the system of intellectual property rights does not properly satisfy all the expressions of creativity that fuel new businesses in the new economy. The patent system looks hard and long for opportunities that last a season or so. New s of property that last less could be useful, not only to entertainment, but also to fashion and all products affected by it: from shoes to house decorations to appliances.

     
     
     
    • Simi Arappoyil
    • Student, National Law School of India University

    In the present era, the motto should be "the faster the idea, the greater the progress." No ideas or knowledge should be delayed from being proposed. Speed can never be an anti-intellectual property because the very objective of intellectual property law is to promote and encourage new ideas and creations. As speed is developed, customers are at a greater advantage because they are open to more developed and improved products.