I always love talking about free markets, and miss daily hallway conversations on that subject from my think tank days. So I was delighted to come across a new publication (PDF) by the Washington Legal Foundation in which the Honorable Dick Thornburgh, now with K & L Gates, discusses the state of intellectual property in today’s free market with Eli Lilly’s Robert Armitage, Viacom’s Michael Fricklas, and Microsoft’s Brad Smith. All are known as informed and reasoned champions of intellectual property.

Fricklas noted that copyright, like any other property right, “helps create free markets,” and that any alternative to copyright — a government or other collective tax system, relying purely on private contracts — is inferior, a point we’ve made here on this blog. He also expressed frustration with opponents of copyright who “deliberately disregard the distinction between ‘idea’ and ‘expression’ that is at the very core of copyright, creating the misimpression that copyright ‘locks up’ culture and ideas.” This is a shibboleth that pops up frequently, and it does get tiring to have to repeatedly point out, as Fricklas does, that copyrighted creations actually bring ideas to the marketplace, where they can be discussed and embraced without any threat to the copyrighted expression of the author.

Thornburgh wondered if young people who had grown up surrounded by free, if unauthorized, copyrighted works truly understood the property aspect of copyright. There was some consensus on this opinion, although Fricklas saw as a bigger problem opportunists who create sites or services that seek to create a veneer of legitimacy that isn’t in fact there. He agreed that “older generations are able to understand that nothing is free for long. Their values are more consistent with the general notion that rules are for the public benefit and that sneaking into a movie or listening to a stolen song are both wrong.” Armitage also was reluctant to point fingers at the nation’s youth, saying that making “appreciation of and respect for intellectual property rights as pervasive and intuitive as it is for conventional forms of property protection remains an unfulfilled challenge.”

Smith saw significant progress being made in the international arena, pointing to a major bust done by the FBI and the People’s Security Bureau of China, aided by Microsoft, that stopped a syndicate selling counterfeit software worth $2 billion to 36 countries on five continents. He said US officials have provided “strong support” and are spreading the word internationally on the harms of piracy and counterfeiting. Fricklas saw an understanding of the piracy threat in the U.K. and France, but expressed concerns with other trading partners such as China, Russia, Spain and Sweden, which he said often cite privacy concerns to cloak piracy from legal action. Here again Fricklas noted that developing countries would cit the “lock up ideas” argument in resisting honoring copyrights of outside creators but sought (reasonably) to protect the rights of their own creators. He argued these nations need to understand that they should protect their own works and others because their growing economies “cannot make a sensible difference between pirating some content and disrespecting the rights of the creators of others.”

Smith and Fricklas both praised last year’s agreement on User Generated Content Principles with Viacom, Disney, NBC Universal, Fox Entertainment, CBS, MySpace, Veoh Networks and Dailymotion, principles that provided some clear agreement on how to address “sharing” of copyrighted works. Fricklas said it removed much of the “legal cloud” surrounding UGC among the participants, and he regretted Google’s YouTube still hasn’t joined. Smith noted that “[w]hen it comes to copyright and the Internet, we are in a very fluid time, where business models, technology and consumer expectations are all changing rapidly.” He is absolutely right, and he was also right when he said that “voluntary agreements can adapt to change more easily than legislation, and allow for experimentation in new rules or modifications to existing rules,” a point we made at the time.

It is a fluid time, but all three noted that market players are responding. Smith discussed the steps Microsoft has taken to embrace open-source, and Fricklas cited examples of new distribution of creative works, such as Colbernation.com, where a fan of the faux conservative can see each and every episode and send high-quality clips to friends or embed them in blogs.

While piracy clearly undermines a free market for creative property, as Fricklas said, it also will continue to adapt and thrive, as Smith said. What will help is more cooperation, as the UGC model shows, and more appreciation for business model changes, as the Colbert site shows. I’m going to end by quoting Fricklas at length, and hope he views this excerpt as fair use:

IP is always about balance. We are all both users and creators of IP, and have an interest in seeing reasonable parameters on protection and in reducing those areas where innovation is chilled because of uncertainty.

The core case for copyright IP is very strong: the U.S. core copyright industries accounted for an estimated $819.06 billion or 6.56% of the U.S. gross domestic product (GDP) in 2005. As a society and
as an economy we need to protect the enormous costs attendant to the creation of compelling, diverse programming by large organizations and the creative efforts and professional livelihoods of hundreds of thousands of authors, filmmakers, photographers, songwriters and performers.

At the same time, in an industry changing as rapidly as ours, debate is inevitable and close calls abound. I don’t think IP is threatened, but I do think we need to meet with our critics and need to continue to make the defense to ensure that the public and policymakers have a balanced and
reasonably nuanced perspective. It is enormously important that we get the answers right.

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This entry was posted on Wednesday, November 12th, 2008 at 3:37 pm by Patrick Ross and is filed under copyright law, copyright opponents, counterfeit, creators, economy, international, market forces, piracy. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.