Purpose – to illustrate the principle based nature of copyright and other intellectual property protections.
Introduction
Lately there has been a lot of interest in reforming the intellectual property (IP) systems in the United States and around the world.
The United States just passed sweeping reform to its music copyrights regime, Jamaica passed an updated Patents and Design Act, and other countries work to implement best practices to protect IP and enforce laws.
But there is still resistance among many different walks to life about IP and copyright in particular, which is seen by some as a barrier to the free flow of information.
While this makes a nice talking point for some who are looking to save themselves a few pennies royalty for their media consumption habits, the fact that IP and copyright have stood so long and have been largely effective provides proof of a need to better understand and apply this power for good in one’s own business and throughout the world.
Let’s explore the engine that is IP and see how a principle based approach to implementing IP is nearly all the enforcement one needs to ensure voluntary, widespread support of laws, guidelines and recommendations for optimal protections.
Principles – Why They Work
United States author Stephen Covey defines a principle as something that is both timeless and self-evident.
He goes on to clarify that by timeless, he means that – past, present, and future, there is no time that would be inappropriate to apply a principle.
A principle is self-evident, because in order to have the principle in effect, both you and I must adhere to it.
For example, I can not insist on fairness and then treat you unfairly.
This would be unfair and proves that to have a fair relationship, both parties must operate with fairness.
It is at this point that cynics would devolve into rhetoric, arguing the virtues of fairness and different applications of cultural interpretation upon concepts like honesty, respect, integrity and the like.
But when it really come right down to it, human beings inherently know what honesty, fairness and respect look like, even across very dissimilar cultures and ethnic groups.
The old Warren Buffett test he applied when dividing the nickels earned in his pinball machine of letting one person divide the coins into two piles, and then allowing the other person to choose first which pile is his, works to illustrate this point.
Knowing that the other person is likely to operate according to self interest, it is in one’s own self-interest to divide fairly.
If both piles are fairly equitable, both will be happy with the result of their interaction, and will likely want to continue their trade relationship in the future.
If, on the other hand, one party operates in self-interest and then uses coercion, trickery, legal wrangling or other leverage of power to guarantee more for itself, while taking from the other party, well, it won’t be long before the self-interest of the oppressed catches on to the unfairness of the situation and seeks correction.
After the past 20 years of transition to a more technologically connected human kind, one can see glaring irregularities in the application of IP standards in nearly every walk of life, and that includes economics.
It is here where the argument of wanting “free information for all” on the internet breaks down into the reality that one must pay for the data to access that “information” and in truth, the “information” is more than that – it is the unique contribution of one human being to the betterment of the group, and as such, it is art, not merely “information.”
Principles work because they are timeless and self-evident, and thus require us, when operating in a principle based way, to treat others as we would have them to treat us.
Notice that feelings are not part of this equation. One is not able to enforce likes and dislikes, but one can easily discern if the behavior that governs a relationship is founded on principles of respect, fairness, honesty and integrity.
A former U.S. Ambassador to Germany once said to me, when I mentioned to him the prospect of implementing a principle based system of IP protection, “We would love to, but how would we know which principles to use?”
Having thought about this, the answer is - - It doesn’t matter which principle you choose.
As long as it is applied by both parties in a principle based way, all roads can lead to the same destination – a more fair, honest, equitable and respectful system of IP rights protections that work equally well for all – creators, distributors and audiences.
IP – Why it’s important
IP is important on many levels.
To the individual who creates the intellectual property, whether it takes the form of a poem or a microchip, the unique demonstration of useful knowledge is the engine that powers that individual small business.
To the community, the services provided by that individual business compel others to trade with others in that same area – directly and individually impacting the well being of not only the individual, but also her family, community and town.
As the individual business owner thrives from trade related to her IP, she pays taxes to local, state and federal agencies, supplies products infused with IP to the buying public, and exports her goods and services abroad.
All of these steps represent what is good and right about intellectual property.
It is only when self-interest is suppressed, and the individual is forced to subsidize failings in other, non-principle based systems, that trouble arises.
Subsidy, as such, in the IP world is always a strain on the individual creator and business, and presents an unnatural propping up of inadequacies of execution or management in other “needy” areas.
Use the analogy of a human body as an example of an ideally working, complex system.
When the body is treated sanely, with adequate attention to basic needs of food, water, shelter, exercise, hygiene and rest, all goes smoothly.
Understanding that the body is intended to function as a unit, it does not occur to the person to behave in a way that jeopardizes parts of the body to accommodate excesses or inadequacies of other parts.
In the instance of an emergency, say a deep cut on the ankle, the hand will not hesitate to hold pressure upon the wound to stop the bleeding.
This is right and necessary as a temporary measure.
However, when the cut is deep and requiring of stitches, the hand should not be compelled to hold pressure indefinitely when a more permanent fix is needed.
If the person were to hold pressure with the hand on the ankle as a subsidy to the proper preventative steps, the whole body would be crippled, forced to stay seated for the duration of healing, or made to walk bent over with one hand clasping an untended wound indefinitely.
This is a ridiculous scenario, and yet, when a working part of a system is compelled to halt proper activity to subsidize the situation of another part, things don’t work as they should.
Efficiency is sacrificed. The system is impaired, and all because the ankle suffered an unforeseen accident it refuses to property treat, imposing its foolishness on the entirety of the body because of its mistake.
The analogy is the situation of individual creators when they are asked to give up their rights without compensation (rather, at compulsory compensation set at less than the common unit of currency) and are further denied voice to express their grievance.
This is the feeling of the artist and creative class of laborers around the world at this time.
The trust among groups of arts entrepreneurs is at an all time low, so much so that if they were offered to choose which pile were presented to them by the other party, they might go rummaging about in it to ensure there were not other tricks being played in subterfuge or other short sighted, ill will tactics.
To use another of Covey’s terms, the world’s creators feel that they have an overdrawn emotional bank account with our unseen overseers.
The intrinsic importance of IP is undeniable. Example after example demonstrates layer upon layer of quantitative and qualitative proof that IP is a vital contributor to the U.S. and world economies.
And this is the real reason why when taken in aggregate, that it is vital to recognize the value of the individual creator alongside her contributions to the group of which she is a vital part.
Here is a brief list demonstrating the importance of IP in the United States alone.
1. Estimated 45 million jobs directly or indirectly rely on IP
2. 38.2% of U.S. GDP is generated by these IP industries
3. 27.8 million workers are employed in IP intensive work
4. IP intensive workers are paid an average of 46% higher than non-IP intensive workers
5. $842 billion U.S. exports come from IP industries
6. 52% of U.S. export goods in 2014 were from IP industries
7. $81 billion in service exports in 2014 were from IP intensive industries[1]
[1] U.S. Trade Representative 301 Report released April 30, 2021.
The Copyright Formula
As simple , principle based solutions go, copyright is based on the economic principle of supply and demand.
It is commonly accepted that supply is priced according to demand.
If there is no demand for a product, it is worth little.
If the demand is high, it is worth more to people, and thus the one who controls the supply can charge more for the good or service.
The market for the product is only so strong, however, and the supplier must take into account the willingness of the buyer to pay asking price.
There are countless treatises elaborating on how to properly price one’s product based on a number of factors, but primarily one must charge more than it costs to provide the good if one intends to stay in business.
What we currently see in the licensing schemes of major media right now reflects a press toward an advertising supported model that leaves the individual consumer completely unaware of any consumption activity whenever they go online.
A carefully curated user experience causes the consumer to seek out the cheapest goods available, leads their shopping activities towards highest bidding mega-advertisers in the marketplace, and frequently denies small business and single creators access to the same tools and services provided to others, ever usurping search traffic intended for small business and preventing their participating in the commerce that they initiated, and rightly have earned.
This happens, for example, when a consumer uses freely provided technology tools to identify a song playing on the radio, and ends up on a streaming platform homepage instead of at the intended song URL.
The consumer does not equate rising carbon emission with his search engine driven browsing, endless streaming of music, movies and news outlets, all of which are fueled by IP and coal burning power plants that provide power to the megalithic data centers.
To quote the title of a popular media book, we are literally, “Amusing Ourselves To Death,” by our own excessive actions.
The copyright formula simplifies the complicated IP regulation systems into one, principle based triad: rights, licensing and royalty.
The creator automatically has exclusive rights over his self initiated creations.
Because these rights are exclusive, whenever someone wants to use them as the basis for another work or copy, the IP must be licensed.
A license is simply an agreement between two parties that spells out the terms and conditions of the use of that exclusive property.
There are certain protocols in place to facilitate licensing between a willing buyer and seller, and these can be improved upon with application of additional principle based measures.
The final piece of the triumvirate is royalty. Royalty is paid by the licensor to the IP owner any time the work is used to generate income – either in advance as a lump sum, or on an ongoing basis as a per unit sold amount, or a combination of both.
When a produce is in high demand, it should expect to earn more for its supply than a product that is less sought after, especially when the product offering is exclusive and unique. By a course of natural, unimpeded market steps, consumers vote with their money and decide the winners and losers of the IP market place.
But does this system actually exist anywhere in the world at this time?
The answer for many creative industries in many places around the world is unfortunately a resounding no.
Due to complexities, misunderstandings, broken promises and short sighted policies, many people just can’t be bothered thinking about IP or its enforcement.
But given the opportunity to experience the joy of contributing to the creation of an artistic or scientific work, every person, from little children to learned adults can immediately comprehend the power that comes from respecting and protecting intellectual property.
Through the education and outreach work conducted these past several years, the world IP markets are robust as ever, and in many developing countries, they represent hope for the future.
With sane and compassionate attention to the needs of these future arts entrepreneurs, the world markets stand to swell with artistic, scientific and technological output unrivaled since the days of the Renaissance.
Indeed as a creative culture, humanity shows signs of readiness to emerge from this, as Canadian artist Neil Young says, “dark ages of recorded music” to a new, enlightened time of artistic flourishing.
In a small way, Arts Envoy IPR Specialist programs like Songlife™ are helping to make a difference in the creative entrepreneurship landscape that will be transversed by generations of artists, students and developers for many years.
Thank you for supporting this important work to foster a culture of respect and prepare the way for a more peaceful tomorrow.
As my colleague at the State Department once said, “IP education is peace education, because robust IP protections pave the way for peaceful relations.”
Perhaps principle based application of IP protections is the key to that next step forward.
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