Respect for IP can be Taught and Nurtured

By Marshall Phelps
February 20, 2017

Businessman lightbulb handsThere is a widening gap in intellectual property knowledge. Most people do not have a clue what patents and other IP rights achieve, and for whom. This includes the general public and many in government and business.

IP rights like patents, copyrights, trademarks and trade secrets are often viewed as impediments or barriers to access, not assets upon which to build. No wonder incentive for taking IP seriously is at an all-time low, and “innocent” pilfering of IP rights is widely acceptable. Our culture seems to be saying: “It’s ok to shoplift intangibles, if it’s not too obvious.” But buying fake goods, copying content, or appropriating someone’s trade secrets are not victimless crimes. They have a dramatic economic impact.

The Department of Commerce reported in 2016 that IP-intensive industries supported 45.5 million jobs and contributed $6.6 trillion in value-add, equivalent to 38.2 percent of U.S. GDP.

In aggregate, IP represents 70%-80% of the value of the modern corporation. There is a lot to lose here. But information speed and access have made copying second nature to anyone who owns a smart phone or PC. Sharing content no longer seems like theft, unless you happen to be the victim. The constant expansion of the limits of acceptable IP behavior is easy to ignore, but more dangerous than we believe.

Disconnect

IP has helped the U.S. to become the richest and the most idea-driven nation, and most socially mobile. However, there is a disconnect when it comes to acknowledging IP rights, including those that protect inventions, brands and content. They all are subject to rampant theft, in large part because audiences do not fully understand the impact of their inter-actions with them.

IP free-riders today come in a multitude of shades. It is difficult to say how they emerged, but ease of access to content and information has had a lot to do with it — so has anger against authority and government, and belief that it is somehow unfair if everybody does not have access to everything all the time. It’s time to step back and take a good look at the widespread acceptance of IP theft. There is no question that laws limiting squatters and shoplifters should be enforced, but IP abusers are often ignored, or, worse still, cheered.

Peel-back the Layers

The Center for Intellectual Property Understanding (CIPU) is a new non-profit that several of colleagues and I have started. CIPU will drill down to identify, understand and address the anger towards IP rights that has become routine. We hope to engage a broad cross-section audiences. Groups like schools, parents and the media need to know more about the benefits of IP rights and the dangers of disrespecting ideas, including the financial, moral and political impacts of failing to.

CIPU is undertaking a range of projects in 2017 to help it achieve IP awareness, including a survey of general and business audiences on attitudes toward IP rights, a proposed conference on innovation with policy with Duke, and a research paper on trends in media coverage of patent disputes. We hope to work with other IP organizations to maximize the impact of existing IP education projects and materials, and to create new ones.

High Cost of Mis-Understanding

Understanding the impact of IP and identifying acceptable behaviors are too important to be left to people to try to figure out by themselves. To many, products like music, books, novel designs, inventions and counterfeit goods appear to be there for the taking – or feel as if they should be.

Uncertainty about what IP rights cover and their appropriate is a global problem. Leadership must come not only from IP owners and the courts, but from lawmakers, educators, businesses and parents who realize that IP theft is no less destructive than other, more obvious, crimes, especially when considering the collective impact.

About CIPU

The Center for Intellectual Property Understanding is an independent, non-profit organization dedicated to increasing awareness of intellectual property rights and their impact on people’s lives. CIPU conducts research, provides information and facilitates education that seeks to improve the reputation of IP rights and deter infringement.

The Center also tracks attitudes toward IP rights, including patents, copyrights and trademarks, and through outreach provides a framework for how the facilitate ideas, promote competition and create jobs. CIPU is granted tax-exempt status by the IRS as a 501(c)(3). For more information visit www.understandingip.org.

The Author

Marshall Phelps

Marshall Phelps is Vice-Chairman of the Center for Intellectual Property Understanding, a non-profit dedicated to increasing IP awareness and improving attitudes. Phelps is a seminal figure in IP history, having established IP as a business unit at IBM in the 1980s, and helping to generate some $2 billion in annual patent and IP revenues. Recruited in 2003 by Bill Gates to build Microsoft’s IP department, he took the company from a handful of licenses to over 600 when he left in 2010 and helped to build one of the most productive patent portfolios in technology. Phelps, who co-founded Intellectual Ventures, was elected in 2006 to the initial class of the IP Hall of Fame. Named one of the “World’s Top 300 Intellectual Property Strategists” by IAM Magazine, Mr. Phelps also writes a regular monthly column for Forbes on the challenges business leaders face in developing and implementing innovation-driven growth strategies.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 11 Comments comments.

  1. angry dude February 20, 2017 8:28 am

    wishful thinking

    They’ve been teaching disrespect for IP and especially patents for a very long time…

    The popular perception of a patent owner enforcing his/her patent is that of a parasite on society … regardless of validity of patent, its impact on technological development and other circumstances like evidence of willful deliberate infringement…

  2. Benny February 21, 2017 8:51 am

    When I was young I used to buy music in little plastic circles called records or CDs. My boy’s generation are growing up with access to “free” music on the net and no one can explain to their satisfaction the benefit of paying for what is available free, gratis and for naught. The general response has been a change of the business model – many musicians understand that their revenue will come primarily from live performance and not from the sale of pre-recorded tracks, and have adapted accordingly. I think that Phelps should heed the advice “don’t be right – be smart”, since a quick reality check will demonstrate that re-educating an entire generation out the current social norms of information exchange isn’t likely to happen as long as pigs can’t fly.

  3. Bruce Berman February 21, 2017 9:06 am

    “Giving-away” recorded music with the hope of making up the lost revenue on performance may benefit some top-line celebrities. It’s not a viable business model for most recording artists. Behaviors can be changed.

  4. angry dude February 21, 2017 9:28 am

    Benny,

    Do you propose that patent holders stage live performances to make a living ?

    Plus, you are mixing two things that should not be mixed together:

    mindless lemming consumers who will stay the same regardless

    AND

    money-making businesses which must follow laws and regulations to the letter

  5. Benny February 21, 2017 9:52 am

    Angry,
    First, you may have missed the fact that the article refers to all forms of IP, and copyright IP is probably the most abused form.
    Second, there is no escaping the fact that the primary source of income for many businesses (including mine) is from “mindless lemming consumers”

  6. Benny February 21, 2017 10:10 am

    Bruce,
    “Behaviours can be changed”.
    How?
    An entire industry sits at your feet, awaiting your words of wisdom to enable them to return to a past time successful business model.
    I’m curious myself, too.
    I have to agree with you on one point, though – no one can expect to make a decent living from rock ‘n roll anymore.

  7. Molly (JD Candidate) February 22, 2017 8:56 am

    This is a very interesting topic, as I am currently studying IP law (emphasizing on patents but a little copyright as well). I can definitely say that I am part of the generation where everything is expected for free. Even what was once paid news and opinion is now free on the internet (like this site). I’m not really sure how to proceed into the future either. The music industry successfully adapted to the changing times and I wonder if the patent industry will as well. We didn’t really study how things will change in my patent law class. We just stuck to the law.

  8. angry dude February 22, 2017 1:09 pm

    Molly (JD Candidate) @7

    Perhaps you should switch from patent law to trade secret law, cause that’s where everything is going…
    The problem with patents is that there is a huge volume of junk patents created by large corps – same corps whining the most about evil patent trolls but at the same time filing thousands upon thousands of bad patents…
    I just don’t see any solution at this point… too late
    “The doc said ‘to the morgue’, to the morgue it is!

  9. Bruce B. February 22, 2017 4:24 pm

    Molly (JD candidate) – The music industry has not “successfully adapted to the changing times.” While streaming revenue is up, it does not compensate for lost revenue in CD and other sales; non-celebrity musicians have a harder time surviving today.

    “Recorded music revenue is down 64% since 1999, per capita spending on music is 47 percent lower than it was in 1973, and the number of professional musicians has fallen 25 percent since 2000.”
    – IP Theft: A Threat to U.S. Workers, Industries, and Our Economy (Department for Professional Employees, AFL-CIO Fact Sheet)

    http://dpeaflcio.org/programs-publications/issue-fact-sheets/intellectual-property-theft-a-threat-to-u-s-workers-industries-and-our-economy/#_edn20

  10. Gene Quinn February 22, 2017 5:05 pm

    Bruce, Molly-

    Authors have an incredibly difficult time surviving as well. Mean income went from $25,000 in 2009 to $17,500 in 2015. Without strong property rights we will soon see few independent creators and a world dominated by large corporate conglomerates. See:

    http://www.ipwatchdog.com/2016/04/26/balanced-ip-system-content-creators/id=68646/

    -Gene

  11. Paula Chavez February 23, 2017 9:56 pm

    I have been reading “Valuation and Dealmaking of Technology-Based Intellectual Property” by Richard Razgaitis, published in 2009, and a point made was how much R&D expenditure went into each patent (excluding that there is value in know-how, trade secrets, and other forms of IP that come out of the R&D). It turns out, in 2008, pharma spent $6M and $74M on R&D per patent, and IBM spent $2M per patent. Things have changed now at least for IBM since its R&D is lower and its patents are higher, $4B on R&D and 8,000 issued patents, so that is now $500,000. Maybe that is because patents are even more important than they were in 2009 when this book was published, but still, that is a lot of R&D money that goes into each of their patents. That surprised me.

Our website uses cookies to provide you with a better experience. Read our privacy policy for more information.Accept and Close