IPR Wars - will recession concentrate the mind?

Depending on who you talk to, the government-brokered “memorandum of understanding” between the record and film industries and six leading ISPs, (under which the latter will write to those whose systems are supposedly used to exchange “illegally copied” material), is “a long overdue outbreak of common sense” or “the thin end of the wedge”. Either way, the economic, not just legal, importance of the BERR consultation is profound.       

The European Parliament voted against moves to criminalise those who do not make money out of file-sharing. Those parts of the world with full synchromous broadband are moving from revenue destroying piracy, text gossip and photo exchange to revenue creating, multi-media on-line, role-playing, gaming (MMORG), intertwined with mashing, dealing, design, creativty, video-gossip. And the more it becomes socially inclusive, for all age-groups, the more the benefits drive out the harms.    

The changes appear to be happening fastest in those parts of the world whose IPR was pillaged by our ancestors to create the economic dominance of the West. From printing to porcelain, from gunpowder to ice cream, let alone the designs and active ingredients for our clothing and pharmaceutical industries, we paid China, for example, in opium not royalties.

No wonder Asia is looking at new business models to build on the IPR traditions of the past, theirs as well as ours, to create the next generation of revenue earning products and services -including to dominate our domestic markets as we used to try to dominate theirs.  

Meanwhile the US, whose meteoric economic growth in the century before the last great depression was built largely on IPR piracy, appears to have finally discovered the dangers of software patents that are not tightly coupled to physical effects. The weekly round-up from Outlaw.com (which I commend as a great source of comment that puts news into perspective) carries an article on recent trends in US Patent Cases, including a direct threat to patents which are “merely” business methods enshrined in software that will run on any general purpose computer.

The lawyers among you will say that I am being grossly simplistic – and I am – but the time has come to apply the “laws” (or least the basic principles) of economics to those of IPR.

Charles Dickens railed against the copyright piracy of American publishers, which meant he had to cross the Atlantic and make his money from live performances. The movie industry similarly moved from New York to the Californian Desert to escape the attention of the Edison corporation’s lawyers. 

We now risk a similar emigration to around the Pacific Rim unless we listen to those trying to create the content of the future, including reward models that will convince their investors. We cannot survive by simply extending the life of copyright or rewarding those who patented first, whether or not they could build the desgn, let alone debug it and launc nad support it in the market place..      

The world was transformed during the depression by the widespread adoption of technologies that had been overhyped during the boom and bust of the 1920s. We can expect a similar transformation over the next decade baased on the mass adoption technologies that were the overhyped during the dotcom boom and bust. But it will not happen in the 2010s on the basis of the business models of the late 20th century any more than it did during the 1930s on the basis of the business models of the late 19th century .

We have yet to have the public debate that the Gowers review should have stimulated.  The initial response to the BERR consultation may well be intemperate, But I look forward to a discussion of ways forward that will help kick start the spurt of future domestic (i.e. intra-UK/EU) creativity that is needed to preserve the competitve economic future of the West .