WASHINGTON — It can be easy to underestimate the importance of another’s intellectual property rights, even when you fiercely protect your own.

There was an interesting exchange today at the U.S. Chamber of Commerce Global IP Center Summit. During Q&A of a panel of copyright and patent industry leaders, an entrepreneur named Friedrick Schweitzer stood up in the audience and painted an interesting scenario to Dan Glickman, CEO of the Motion Picture Association of America. Schweitzer is Founder and President of OR Peer, a company that licenses medical equipment software to hospitals. He saves lives, reducing the number of people who die in operations. That is fantastic.

Schweitzer told Dan that he once streamed an infringing version of the motion picture Iron Man online, and suggested he had done so prior to the theatrical release. He then said that he liked the movie, talked it up with his friends, and as a result about 10-15 people, including him, bought theater tickets. He said the studio and theaters wouldn’t have seen that revenue if he hadn’t previewed the entire movie online first. He then told Dan that the motion picture industry should not try to stop infringing downloads or streams of motion pictures before or during theatrical release, and instead “monetize movies through more product placements, which has been around since E.T.”

It’s worth noting that Hershey’s did not pay the makers of E.T. a dime for the product placement of Reese’s Pieces, although it did agree to spend $1 million promoting the movie; it’s unlikely the audience the movie found was a direct result of that promotion. The winner in that scenario was clearly Hershey’s.

But faithful readers will see a bigger issue here, namely a copyright and trademark owner (of software) saying another copyright and trademark owner (of a motion picture) should embrace piracy as a business model and no longer seek to protect their rights online.

Another panelist, Mark Esper of the Chamber’s GIPC, asked Mr. Schweitzer a question from the stage, namely if Schweitzer allows his software to be used by hospitals on a trial basis before purchasing.

“No,” was the answer. He said it would be too difficult, that hospitals are very bureaucratic and have one way of doing things. Besides, he said: “I want to keep my revenue streams. I am not about to give away my product.”

Good for him.

I approached Mr. Schweitzer after the panel and we had a nice talk. He’s thoughtful, articulate, and seems well-meaning. It was clear, however, that he’s never really made a connection between his own intellectual property rights and those of studios.

First, he admitted that it’s unlikely those 10-15 people who bought Iron Man tickets only did so because he recommended they do so.

He also thought that because he streamed the infringing movie, rather than downloading it, it was possibly legal. (It’s not; there was no legal licensed streaming of Iron Man during its theatrical release.)

He returned to the notion of financing movies through product placements, but quickly said “I’ll confess I don’t know how movies are financed.”

He at first said that his business model was different than a motion picture because developing software involves lots of labor and sunk costs, then seemed to hear himself and admitted that this is true of movie production as well.

He cited lots of examples of video and music online — iTunes, Hulu, Netflix. I agreed those were all great, and noted they were all legal. In each case, the creative works found there are licensed to the service by the rightsowner. That is different from streaming an unauthorized pre-release movie.

I asked him why he doesn’t just put his software out there for free trial, because presumably even the most bureaucratic hospitals might be open to trying that. He said he guessed he could, but he would only do so if he could put protections on it so it wasn’t pirated, for example something that would eventually render it inoperable without a license.

I noted that an infringing copy of Iron Man would have no such protection, so it wasn’t analogous. He agreed.

I then posited a scenario. I asked him to imagine that his software was floating around online without his authorization. I was a hospital administrator, found it, tried it, and liked it so much I contacted him to seek a license. Would he like that?

“Yes,” he said.

I then asked him to imagine that I obtained the infringing version of his software, liked it, decided to use it, but didn’t seek him out for a license. Would he like that?

“No,” he said.

I asked him how he’d feel in that scenario, his software floating around in cyberspace without his authorization and with no concrete way of him monetizing that software.

“I’d want to stop it,” he said.

Exactly.

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This entry was posted on Wednesday, September 30th, 2009 at 1:22 pm by Patrick Ross and is filed under copyright opponents, drm, events, licensing, piracy, property rights. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.