Devil's Advocate: IT skews IPR

Last week Martin Brampton questioned the whole concept of intellectual property rights. In the second half of his take on IPR he looks at what information technology and the internet mean for rights holders.

Last week, I questioned the widespread assumption that intellectual property rights (IPR) are essential to a healthy, modern society. Now I'll turn to some of the questions that relate specifically to information technology.

One that is immediately striking is whether the internet is a threat or an opportunity. Independently minded people were quick to see it as an opportunity. Media such as television and newspapers are largely in the control of huge corporations, often dominated by strong-willed individuals. While there is much talk of editorial independence, few doubt that ownership affects content.

Even public service broadcasting, notably the BBC, is vulnerable to pressure from government and other powerful interests. Where freedom of information legislation exists, bureaucratic procedures and 'spin' often undermine it. Many saw the internet as a tremendous opportunity to achieve widespread communication at grass roots level without the costs and restrictions associated with traditional media.

That vision is under pressure from those that see the internet as a giant copying machine, lying ready to create millions of illicit copies of other people's 'property'. But this is a paranoid concept that risks destroying the value of the internet. Consider the case of books. We can buy books, sell them, lend them to our friends. We can browse in bookshops, then decide whether to buy. We can borrow books from libraries, include quotations in our own writing and adapt ringing phrases created by other authors. All with little or no reference to any property owner.

Contrast this with the idea that every copy on the internet, however fleeting, involves a transaction with property rights. Even browsing involves bringing a copy of something to our own system. The over-enthusiastic advocates of IPR are promoting an inflexible world that would actually stifle innovation. They are going wrong in at least three ways:

- Too narrow a view of fair use prevents the everyday free exchange of ideas that is essential to a healthy society
- Too general a notion of 'copying' is excessively inflexible
- Strict liability on service providers is onerous and possibly unworkable

What of software? In their advocacy for strict controls and their talk of losing billions of dollars to piracy, large software companies obscure the complexities of the software market. The ability to make digital, that is perfect, copies at virtually no cost is not merely a threat, it is also a shift in market conditions. The situation is radically different from traditional manufactured products. It is essential to take account of factors such as increasing returns on production, network effects and 'tippy' markets - where momentum quickly gathers behind a market leading offering.

Does piracy damage software companies? In many situations, quite the contrary. Take Microsoft Office as an example. It is often alleged that small business and private users are often inclined to use copies of this software without paying. Yet the market strength of Office relies on the fact that its use is so widespread.

Suppose piracy were to be ended at a stroke. A perfectly likely result would be that those who had been using pirate copies would look around for a low cost alternative rather than pay full price for an expensive product. This is one reason so many senior Microsoft executives spend time denigrating the open source movement. As large numbers review the low cost or free alternatives so the feasibility of alternatives would become proven and widely known. The market for Office might very well be undermined. Microsoft might well be worse off.

Operating systems create further problems. As effective gateways to the use of computer facilities, the granting of the state-backed monopoly of IPR can create severe problems. This issue has been at the root of recent litigation between Microsoft and government legal officers.

Of course, this is not to say that software creators have no rights. But nobody simply has rights instead rights are granted by society. We need to be careful not to grant more rights than are in the interests of a healthy society.

** Martin Brampton is a director and founder of Black Sheep Research (http://www.black-sheep-research.co.uk ), an independent consultancy providing research, writing and speaking services on a wide range of business and technology subjects. Martin was previously a director at Bloor Research, and has worked with IT as a user and analyst for over 20 years. He is a frequent contributor to silicon.com's weekly Behind the Headlines TV programme and can be contacted at silicon@black-sheep-research.co.uk.