Who Owns Intellectual Property?
Online forum now closed. Is intellectual property becoming community property? While the impact of change on the valuation of IP is of concern to some respondents, others wonder whether the issues are overblown. HBS professor Jim Heskett sums up responses to this month's column.
Is intellectual property becoming community property? Is a new generation of users and consumers of intellectual property produced by new technologies bringing totally different assumptions and attitudes to bear on its ownership? Has new technology induced us, according to one respondent to this month's column, to "be bad actors with respect to copyright"? Is, as David Albert Newman suggests, " ... pirating intellectual property ... for the good of society ... (if) this is a correction to dysfunctional markets" acceptable? Is, as cantubury suggests, "stewardship ... a more realistic term today (with regard to IP) ... (in contrast to) Ownership ... a term from the days of the 'industrial revolution'"? Do you agree that in his words, "... in the multiverse, the more we give away, the more comes to us"? Or, as David L puts it, "... rights only limit the growth of innovation"?
The "societal view" of intellectual property was taken by Harsh Honmode, who said " ... a lifelong royalty on ideas will only dampen the spirit of another creative being to make it better." As Gustavo Fonseca put it, "Shouldn't we (as common people) be thinking into how to share solutions…?) ... Our ideas, our knowledge, should be public."
Or do you feel, as Gaurav does, that "the creator is the owner! If not, people will not create"? (Of course, one might ask him, "But who's the creator?") Umair Naeem puts much the same sentiment this way: " ... there has to be a defining identity that uniquely defines that idea ... if you do create something, you do own it, until you decide to do otherwise ...." To the degree that customers are becoming both creators and appropriators of intellectual property, it creates questions as to how the original creator and "owner" should act. As Gary King suggests, "Treating customers like thieves is a certain recipe for failure."
The impact of technological, social, and legal change on the valuation of intellectual property was a concern of several respondents. Santhanam Krishnan said, for example, that "assuming even the valuation is possible, it is a moot question as to how many buyers of such companies (unable to afford to defend their IP) would be willing to pay for that." Jon Oakes commented, "Investors should put more emphasis on how brand IP is managed in the environment rather than on the IP asset itself." Paul Jackson adds that "... it's got to be businesses (that defend IP) ... as laws get in the way of doing it right." This raises the question as to whether IP has the most value to those with the resources to defend its ownership, a kind of survival of the fittest philosophy?
Yet another school of thought asks whether these issues are overblown. D. R. Elliott commented that "much of the internet economy has the life span of a mayfly .... These economics will fall below the threshold of legal advocacy for infringement prosecution. The angst ... seems(s) highly overwrought." Gerald Nanninga asks what's new. In his words, "Creative people have been exploited since the beginning of mankind ... the lyrics of the Who apply: 'Meet the new boss (the consumer who rips you off), same as the old boss (the corporation who ripped you off).'"
So many questions, so little time and space. What do you think?
Two Chinese students, entrepreneurs designing a start-up involving software and products linked to an Internet website to be developed and distributed in China, had to come up with a realistic business plan projection a couple of years ago. It required an estimation of the share of potential revenues that would be siphoned off by others appropriating the students' ideas. They decided that 60 percent would be a realistic loss rate—a stark reminder of the perils of owning intellectual property in China at that time.
Turning to the Internet itself, and particularly to content-sharing sites, the matter of ownership is challenged in a different way. Content produced by news media as well as individuals acting as professionals or amateurs is being copied, spliced, and represented essentially as something so new and unique that it is often downloaded by hundreds of thousands of viewers who might not have watched the original material. Who owns the result? Does anyone owe others for the use of the content? If so, how much and for what share? Or has the culture of "free" become so deeply imbedded in the minds of a new generation of users that content developers can only hope for partial, occasional, or eventual financial rewards for their efforts?
This brings to mind some aspects of the way that the Internet facilitates cooperation in the generation of intellectual capital ranging from new product development to research. It helps explain why the Gen Xers we discussed several months ago find it quite natural to work in teams, either in face-to-face contact or online. In some cases, it is producing remarkable results. But whose work is it? Who owns the result?
While pondering these questions, I visited the website of the branding consultancy Wolff Olins, responsible for creating the branding for (RED), which raises money for The Global Fund being promoted by Bono and Bobby Shriver. (RED) is a brand, a piece of intellectual property that was designed purposely to be co-opted by others wishing to incorporate it into their advertising. Organizations such as Apple, Gap, and American Express have promoted their products and services using (RED) while raising money for The Global Fund.
Wolff Olins' homepage presents a provocative redefinition of brands as practical platforms that enable people to do things. In its words, "As brands become less the property of an organisation and more the banner of a movement, ownership will become even looser. Logos will be things other organisations, and individuals, can borrow and adapt." That belief, they maintain, will require that some companies, in their own best interests, relinquish control over brands and "be more generous" with consumers. In other words, they take the risk of transferring ownership and quality control of what used to be called their brand to others. In this case, who owns the intellectual property?
More generally, are views of ownership of intellectual property changing? If so, how will it affect the way intellectual property is valued for financial purposes? Are laws worldwide regarding intellectual property out of date? What do you think?