IP and Innovation

Ed Felten points to Tim Wu’s Intellectual Property, Innovation, and Decision Architectures at SSRN


This essay proposes a new way to assess the desirability of intellectual property rights.

Traditionally, intellectual property assignment is assessed based on a incentive/monopoly pricing tradeoff. I suggest they should be further assessed by their effects on the decision architectures surrounding the property right – their effects on how firms make product innovation decisions. The reason is that different decisional structures for product development can be are fundamental to the performance of firms, industries, and even the economy as a whole.

The organizational economics literature can help with this assessment. It makes an important and useful distinction between hierarchical (centralized) and polyarchical (decentralized) decision architectures. The key point of this paper is that government’s decisions with respect to property assignments can steer decision architectures toward a polyarchical or hierarchical architecture, respectively.

Each may be optimal in difference scenarios. In industries where technologies are stable and where the industry is flat or in decline, avoiding mistakes is more important, and uncertainty may be more limited, meaning that a hierarchy supported by strong rights may produce a more profitable outcome. Conversely, strong IP rights may undesirable in fast growing-industries where the technologies in flux, because overly centralized decision-making may block the emergence of the most innovative ideas.

Clinton Regains Ownership of Masters

George Clinton Wins Funkadelic Rights

In a decision issued last week, Judge Manuel L. Real of Federal District Court of Los Angeles returned ownership of the master recordings of four albums Mr. Clinton made in the 1970’s with his band Funkadelic: “One Nation Under a Groove,” “Hardcore Jollies,” “Uncle Jam Wants You” and “The Electric Spanking of War Babies.”

In winning possession of the recordings, Mr. Clinton can now control licensing and distribution of the music and lay claim to millions of dollars in past licensing fees.

[…] The flamboyant Mr. Clinton, who said he was 64, must now decide how hard to press for past money, and whether he still has a chance to win control of song copyrights to his old work. In 2001 he lost a court ruling in a case in which he contended that he still owned the songs. They are now controlled by his onetime music publisher, Bridgeport Music. It is not clear whether the latest ruling would provide for a new claim on that issue.

“I’m still writing the whole history of the thing,” Mr. Clinton said. “I just want my stuff back.”

Presumptive Copyright Maximalism Strikes!

Buffalo is bumped, Bray rebounds [via CoCo] [pdf] — something’s wrong with this article. IANAL, but I cannot believe that a lawyer would take this position. I can’t copyright my dad’s name, even though I am Frank Field, III — and copyrighting the image of a statue that is not yet completed is somehow equally baffling.

On the other hand, this is clearly an example of the perils of presumptive copyright maximalism.

“Spirit of the Plains” was to be displayed at this summer’s Custer Stampede in Custer, S. D., one of 20 in a life-sized herd of commissioned artworks to be sold by auction at summer’s end. The buffalo wears a blanket of hand-tooled leather (Bray’s specialty), intricately adorned with images of a mountain lion, an eagle, an antelope and a big-horned ram on one side; a bear, a bobcat, a pheasant and an elk on the other. Its body is painted with images of Plains Indians, including the famous Chief Crazy Horse, striking a pose that is timeless, classic, and as Bray was to learn, privately owned.

“The name and image of Crazy Horse are both copyrighted,” Bray said. The famous name, he said, has been copyrighted by a grandson of Crazy Horse; the famous image, by the late sculptor -and designer of the yet-to-be-completed Crazy Horse Memor-ial-Korczak Ziolkowski.

[…] One other artist, unwittingly confronted with the same dilemma, had opted to attempt to work out a deal with the copyright holders, an approach that Bray guessed might turn out to be fruitless.

The date was May 15. To be included in the summer display and an accompanying souvenir booklet, he would have to submit his buffalo by June 12.

Bray decided to start over.

Popularity == Pervasiveness?

New Worlds To Censor

A troubling shift is underway in how lawmakers censor media in this country. Sen. Ted Stevens (R-Alaska) and Rep. Joe Barton (R-Tex.), chairmen of the Senate and House commerce committees, as well as Kevin Martin, the new head of the Federal Communications Commission, are proposing to broaden federal broadcast “indecency” regulations to cover cable and satellite television. And a separate measure recently introduced in the Senate would regulate “excessively violent” programming, not just in broadcasting but on cable and satellite service as well.

[…] Some lawmakers seem to believe that once any media technology becomes popular enough, it becomes “pervasive” and therefore some degree of censorship is justified. But the notion that “popularity equals pervasiveness” is frightening, because it contains no limiting principles.

[…] If this “popularity equals pervasiveness” regulatory paradigm becomes law and passes muster in the courts, we will have entered a world in which the public has to pay to escape censorship. Anything Congress or the FCC deemed “indecent” would likely be forced onto a premium or pay-per-view tier, where consumers would spend considerable sums to receive some of their favorite programs. But here’s the really interesting question: If large numbers of viewers still flock to premium or pay-per-view services to get their favorite programming — such as HBO, or Howard Stern’s new show on satellite radio — wouldn’t the “popularity equals pervasiveness” calculus apply to those channels as well? If so, we could look forward to still more laws to protect us from ourselves.

NYTimes Editorial on the Record Industry

Cold White Peas

Today new albums from Coldplay, the Black Eyed Peas and the White Stripes hit the stores. If you needed to be told that, then you are probably not part of the target audiences for these very popular bands. Just how big those audiences are is a matter of some concern in the music industry, which is showing unmistakable signs of languishing. Some sources report a drop of 15 percent of total sales since 2000; others say it is a 7 percent drop over the past year alone.

Record companies and retailers alike are hoping that today’s sales are a blowout for all three albums – Norah Jones times three. That would be good for the weekly figures and the bottom line, but it would really do nothing to change the feeling that something is terribly wrong in the music business. The unease was palpable a month ago when the Warner Music Group went public, to a lukewarm response from Wall Street. Perhaps there was something about seeing Jimmy Page, guitar in hand, in the gallery above the trading floor that made even hardened traders queasy. But it was probably the performance of Warner Music – and the sector as a whole – that gave investors second thoughts.

The music industry loves to blame its problems on digital piracy, a case that has yet to be fully proved. The real problem is an addiction to blockbusters, and that is what today is all about – feeding the monster this industry has become. These days there are more musicians and bands than there have ever been, and there are still plenty of music-buying fans. Together, they are discovering alternative means of connecting with each other.

The big record companies continue to insist that the only route to profitability is blockbuster sales of a few titles, and the result is all too predictable – music that matters more for how it sells than how it sounds.

New Tech, Old Problems

Warning over ‘bullying by mobile’

One in five young people has been bullied by mobile phone or via the internet, a study suggests.

Children’s charity NCH surveyed 770 youngsters and found 14% of 11- to 19-year-olds had been threatened or harassed using text messages.

Bullies had used images taken with mobile phone cameras to intimidate or embarrass one in 10 young people.

This included singling out overweight or spotty youngsters and recording and sharing acts of playground violence.

The findings follow reports of so-called “happy slapping” attacks – where assaults on children and adults are recorded on mobile phones and sent via video messaging.