Mine! (How the Hidden Rules of Ownership Control Our Lives) 3/7

Michael Heller, James Salzman

Part 2.

3/ I Reap What You Sow

• Authors not always profit from their copyright; some parts of their work can even be trademarked (“I Have a Dream” (R)). Whoever controls the copyright (creative expressions) / patent (useful inventions) / trademark is the biggest beneficiary. Welcome to intellectual property.

• Historically “you reap what you saw”, i.e., you own the fruits of your labour, has been the justification of ownership arising from labour. Ownership went hand in hand with improvement of the asset and/or land (clearing, building, farming, etc.).

• Ownership is a social engineering choice, not a fact. It starts with putting a resource or land to productive use and doing it for a while. Without adding value, the resource couldn’t be claimed as “owned” by someone. But it has all changed in the past 50 years.

• With intellectual property everyone can reap what one has sown, hence it needs more protection. All consumers will be better off not paying for content, but would content producers be willing to create the content everyone gets for free?

• Over time and with extensive lobbying companies have been able to extend their copyrights (Disney is the famous example) for far longer than the copyright law would offer. Now with the 100 years of copyright protection in the US the protection will outlive the author and may benefit only the new owners of the copyrighted materials, but not the public (since no new content is created by a dead author).

• Copyrighted material supposedly gets published or performed much more rarely, so it may become the “lost culture” (it exists but is not accessible). When copyright owners’ heirs start reproducing, the heirs to them may not even know what they own or control, and publishers won’t dare publish anything without the approval of the then-owners. This creates “orphan works”.

• Short-story writers’ works would’ve benefitted from lower copyright restrictions as they would’ve become more accessible to the public via schools, blogs, and magazines. Sadly, many authors will forever be obscure without any remedy due to the lack of their works in the public domain.

• A right of publicity: the exclusive right for a person to control and profit from the commercial value of their personas (names, likeness, voice). In the US it’s not a federal law just yet, but it’s slowly creeping in. The post-death rights survival period varies between states being between 10 and 100 years. Monetising dead celebrities is a huge market (Michael Jackson’s persona alone brings in $60m p/a).

• New ownership concepts emerge, but not as a result of the evolution of law, but rather due to lobbying by corporations.

• Too much existing ownership can make it impossible for people to create new, more valuable things. Ownership gridlock: when too many people own a piece of one thing, cooperation breaks down, wealth disappears, and everyone loses. Content licensing (clearing rights) is a tedious process made harder by the fact that any single individual’s refusal can veto the project as a whole (say, when rights need to be cleared again after the expiration of an initial licence).

• Drug development now has a full-scale ownership gridlock problem. Since 1980s the US patent law has allowed owning the biomed inventions with the idea that this would encourage more investment into basic research. But if one patent encourage innovation and furthers the collective knowledge, multiple patents create an expensive legal minefield – so expensive that any discovery relying on several other patents may end up losing money if all patent owners were compensated.

• There may be drugs curing rare diseases, but the licensing payments for their “building blocks” can be prohibitively expensive, so the diseases remain untreated.

• Owning a patent on something gives the owner an opportunity to bypass the innovator who intended to use the patent as a building block, and introduce their own drug, or fail to do so while limiting access to everyone else (hint: the society loses as a result).

• The old rule “one patent – one product” is no longer valid: a single product now can incorporate multiple patents and bear the corresponding costs. The issue of having many patents is that commercialisation of new inventions becomes much harder, and the question arises – do we need so many patents?

• Negotiating licensing fees is a long and tedious process, so one of the solutions is mandating patent pools where the settlement between owners happens automatically on a pro-rata basis.

Fashion and Open Source

• In fast fashion (Zara, H&M) it’s perfectly legal to “steal” popular designs of major brands and sell them for much less. The reason? Yes, it’s painful to see one’s design being appropriated, but the point of the intellectual property law is to serve consumers’ interests. Moreover, some intellectual property is overvalued by its owners anyway.

• The legal path is not the most suitable one to resolve the issue of ownership. The “piracy paradox” has shown us that such sort of disregard for ownership actually benefits the fashion industry by expanding it and making accessible to everyone. Money does come, albeit later.

• Another example is open-source software: its monetisation is indirect (support), while it allows for value creation further down the road. Most internet services operating today rely heavily on open source.

• The successful alternatives to exploitation of the legal ownership are:

• The first-mover advantage – while others figure out what has happened to them, the product is already successful, or the market share has increased, or the product has already become obsolete, and no further extraction of margins is possible.

• Shame is a particularly powerful behaviour modifier in comedy; stealing from fellow comedians will hurt anyway, even if the content is not protected. The downside of shame is that it can lead to violence.

• Social media can make or break a product. It’s often irrational, immature and very angry, but sometimes it can help a small guy stand up against a corporate Goliath.

• Growing the pie – see the open-source example above. Same worked really well for music piracy and even movie piracy (a pirate becoming a video addict will be a paying customer tomorrow). The worst thing a company can do is suing its customers

• Counterfeit goods are a mixed bag, because if the buyer knows they’re buying a fake – this serves as a marketing mechanism for the brand; passing off the fake as a real deal is immoral. [MK: there’s also a point of view that people wearing fakes are fake people.]

• Disney has discovered a strategy long being used by music artists: tolerate theft, because it drives people to its high-margin products (Disneyland for Disney or music concerts + buying merchandise for music fans).

Do We Own Our Genetic Data?

• Having a genetic test also exposes one’s relatives’ data without them even knowing.

• Genetic data is valuable and expensive – the most logical use is drug development.

• The competitive advantage is in the secrecy (i.e., keeping the data, but allowing access to certain snapshots of it) and scale (more data means better decisions).

• Secrecy seems to be a good countermove against shaming: if the extent of sharing one’s data is not known, shaming isn’t that powerful.

• Arguing with clients may lead to activism, which may lead to legislation, and this will damage the data collection and exploitation opportunities, so genetic labs try to avoid confrontations.

• However, data is impossible to delete, partially because it’s been licensed so many times, and also because of the data keeping requirements mandated by law.

• There’s no personal upside in sharing genetic information other than the possibility of maybe knowing something about oneself, or involuntarily participating in making a new drug. Life insurance companies, however, are allowed to discriminate against people based on their or their relatives’ DNA tests.

• Privacy vs ownership: it doesn’t matter who owns the data, but the source (i.e., the person) has a right to privacy and (in Europe) has the right to have their data and samples destroyed.

• If the ownership design is constructed to include the “opt-in” and “opt-out” options, this may help make the data transfer more visible, but nothing is abuse-proof.

• No-ownership works for standup jokes and open-source, but doesn’t for genetic info, locations, faces and clickstreams. Data becomes more valuable with size.

Part 4.