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October 4, 2005
Ideas for sale - part 2
The International Herald Tribune is continuing its stories on intellectual property with U.S. plays it tough on copyright rules. This story describes the tensions created by the US's push to have the world adopt our IPR rules:
In the process of defending the lucrative exporting of American ideas and U.S. rules on who owns what and for how long, Washington seems prepared even to offend its allies.
In Australia, for example, the trade agreement that took effect on Jan. 1 has altered the prices and practices for prescription drugs. Experts say the full effect will take three to 10 years to emerge.
In essence, a country where the state determines the cost of drugs is now more beholden to protect the rights of U.S. pharmaceutical companies to drugs pioneered and patented in America.
Creative works that had passed into the public domain in Australia, like "Gone With the Wind," are now subject to U.S.-style copyright terms. The Music Council of Australia said the agreement seemed to "change Australian law to match United States law, possibly more for the benefit of the U.S. than Australia."
There is some irony in this situation. The US is pushing for a global one-size-fits-all standard. Yet, in the US, patent reform is stalled because it has become clear that the one-size-fits-all system doesn't work. The IPR needs of the bio-tech and pharmaceutical industries are different from that of the electronics and software industries.
The US is caught in some what of a dilemma here, arguably self created. One the one hand, US companies are losing billions in outright piracy and counterfeiting, which fuels the calls for tighter IPR. One the other hand, the US patent and copyright system is in danger of becoming so tight as to stifle creativity (it has been noted that if the existing copyright system were in place back when Walt Disney was getting started, all of the wonderful early Disney movies could not have been made because they would have violated copyrights of people like the Brothers Grimm). Thus, we are in danger of exporting our broken system in what maybe a misguided attempt to cash in on the I-Cubed Economy.
But, it is becoming clearer that the I-Cubed Economy is different from our industrial-age notions of the "royalty and licensing economy." Companies (and countries) are relying more and more on royalty income. But, as was noted in the earlier posting, companies who rely on yesterday's ideas will lose out in the race for the next innovation. Time-to-market of the innovation maybe more important that the downstream royalties.
An IPR system that focuses on downstream royalties to the detriment of time-to-market will not promote prosperity in the I-Cubed Economy; it will hinder the economy, to the disadvantage of all.
Posted by Ken Jarboe at October 4, 2005 9:18 AM
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