Does the concept of intellectual property as an institutionalised way of formally protecting knowledge creation still have a place in our global world, interwoven with social media? Intellectual property (IP), refers to the output of creative intellectual activity. The underlying assumption is that there may be some commercial value in it. Similar to physical property, it can be bought and sold. It can be leased and licensed. You can make money from it. But dissimilar to physical property, intellectual property tends to be quite easy to copy, particularly digital products such as music or software. Indeed the act of trying to protect it can expose your idea to greater risk of being copied. But if you do have a novel idea, there is a range of formal IP protection mechanisms which you can call on to try to make money from your idea and to protect it.
The first form of IP protection is copyright, which is automatically conferred when you make a physical representation of your idea. So if you take the Harry Potter franchise, for example. The text of the book, the script of the film, the recording of the film, the images on the film posters are all outputs which automatically have copyright applied to them. What may be more difficult in some cases is demonstrating that you have created a physical representation before someone else did.
The second form of IP protection is the trademark, which is any sign or symbol that allows your customers to distinguish you from your competitors. And this can be very useful in helping your customers with their buying decisions for instance. But trademark can also be problematic as organisations expand their operations. For example, Apple the technical firm, and the Beatles’ recording label, Apple, operated in harmony for many years until Apple started to get into music publishing, at which point a trademark battle ensued.
The third form of IP protection is patents, which protect the form and functionality of any invention or innovation and the process by which it is made. However, in contrast with the copyright, patents do not automatically apply; you need to file a patent with the patent office which is a lengthy and costly process. But it is the most defensible form of IP protection. Depending on which country you take out a patent in, you can get up to 20 years legal protection. A famous example of this in the UK was James Dyson, who used patents very effectively to ward off imitators as he captured the full economic value from his innovative Cyclone vacuum cleaner design.
Finally, the fourth form of IP protection is something called design rights, which gives you a monopoly right for the look of a product, protecting both the shape and the pattern or the decoration. A famous example of this is the Coke bottle: we recognise it when we see its shape or its outline. The criteria for this is naturally quite subjective. It should not remind an informed person of an existing design.
Informal types of IP protection
These formal mechanisms are very overt; however, they require you to share details about your intellectual property in order to protect it. There is another very popular method of IP protection, known as trade secret, which requires you minimising the number of people who have knowledge of your IP. A well-known example of this is the secret formula of Coca-Cola, which has been protected for over 100 years by just limiting the number of people who are aware of the secret formula.
Trade secret is the number one informal mechanism of IP protection; the second most frequent approach is to use speed to market as a way of maximising the return from intellectual property. So just getting your idea out there and make money before it can be copied. Many organisations also use what we might call complementary assets. This means designing a way to use your IP so embedded in everything else you have in the organization that it becomes very difficult for others to copy the system. Again, this is context dependent. If you innovate in relation to a jet engine, that whole system is very hard to copy and to imitate, whereas smartphone apps may be extremely easy for your competitors to copy.
Some tricky questions
We can explore some of these nuances by considering an outlier. The Canadian astronaut Chris Hadfield made the news just before Christmas, 2013 with an amazing copy of David Bowie’s ‘Space Oddity’, which he recorded while orbiting the Earth in the International Space Station. Now surely for the 11 million plus YouTube hits (now 35 million plus) and considerable media attention that he gained, he should owe Mr. Bowie some recompense for using his IP (without asking him). But which national jurisdiction does he fall under given his transnational physical location whilst recording this particular song? Of course, this is an extreme example. Does it make it irrelevant? Try to substitute the term ‘astronauts’ with ‘transnational corporations’ and you will start seeing some parallels.
Another dimension of IP that has to be considered is customer experience (and the related competitor activity). For example, we can use copy protection software to protect digitally distributed goods, but these are likely to annoy customers. In addition, they incur costs. And in terms of managing IP, which relates to relationships with customers, perhaps that’s where we should focus our energy and efforts.
The essence of IP protection is that creating novel ideas and intellectual property incurs costs. So if your idea is easy to copy, then you may not gain the benefits from it and someone else will. This is a legitimate worry; however, our outdated conceptualisation of IP seems to be unable to help responding to the challenges of our time. As in the case of Warranty and Reliability, we need to rethink IP.
© University of Strathclyde