Making property out of ideas

Essentially, Intellectual Property can be protected by law in three main ways:

•    Patents
•    Copyright
•    Trade Secrecy

These laws are designed to create a property value from particular kinds of creativity thus enabling a market economy to be built on top. These ‘properties’ can be sold and licensed and therefore generate financial value. This cash value functions as a great incentive for creators to continue to create, of this there’s no reasonable doubt.

But there’s an important fourth type of protection/incentive that does not use law as its basis: social based ‘Norms’ which are more likely to found at street level than in the courtroom. Here’s a useful grid Eric Von Hippel made to help define the differences between these systems:

(Click for larger version)

So what the hell do we mean, ‘norms’? Well, think about a social norm relevant to our discussion here : a mum back in the 80s was very unlikely to tell her child that taping a mates’ LPs was a bad thing. (Simon includes his own mother here – and she worked in the record industry!) - yet the music industry were putting enormous efforts in to try to educate their users that what was wrong in law ought to feel wrong for them too.

Another very different 'Norm' noted by Eric von Hippel, Professor and Head of the Innovation and Entrepreneurship Group at the MIT Sloan School of Management in his paper Norms-based intellectual property systems: the case of French chefs.

He found that although the law could potentially protect the creativity of chefs through ‘Trade Secrets’ legislation, none of them used the law or even considered it an option. Instead they established their own norms based system, though not necessarily in a premeditated way.

These are some of the norm based rules he found:

Norm 1: It is not honorable for chefs to exactly copy recipes developed by other chefs.

Norm 2: a chef who asks for and is given proprietary information by a colleague will not pass that information on to others without permission

Norm 3: One has a right to be acknowledged as the author of a recipe one has created.

Whatever you do, don't defy the norms! French chefs who do are well and truly ostracised.

One chef whose former student did – and on TV! - wrote this to the non-attributor:

‘Sir: First, I must tell you that seeing on TV a former employee showing things I have taught him is a real pleasure. Unfortunately this pleasure was brief, as your presentation has revealed a rare ingratitude.  Never did I hear you say what you owe to the master I have been for you. You should admit that presenting recipes that are mine and that I taught you without referring to my name constitutes an unacceptable indelicacy.  ...   I hope that in your future presentations you will repair these errors and shall credit me with what I have taught to you. Only after this honest acknowledgement will I be happy that you receive a share of my notoriety.’

Strong stuff – if elegant. Very French.

And here’s another chef:
‘[If someone were to violate an important norm], ...my esteem for the guy becomes very low. I think the chef has no self-esteem, and does not respect the code of honor.’

(As an aside, have a look though some of the cookery books on your shelves; this kind of acknowledgment is practiced pretty widely, isn’t it?  We’re very keen on Madhur Jaffrey’s interventions. One at random: ‘I got this recipe several years ago from the mother of the Darbar Sahib of Jasdan’, she says of The Rajmata of Jasdan’s Steamed Peanut Diamonds in a Garlic-Onion Sauce.’)

This turning away from the law of the ‘courts’ is apparent in other important creative disciplines. A study by Walsh in 2005 found that only 5% of Biomedical researchers working in universities, governmental or non-profit organisations bothered to check whether their work might be infringing upon existing patents. Their conclusion was that the ‘law on the books’ need not be the same as ‘law in action’ if the law on the books contravenes and community’s norms and values.

So then, it becomes clear that Wendy Cope was very much focussing on the ‘Law’ in her argument about people ripping off her poetry and making the somewhat hopeful jump that the ‘Law’ and ‘Social Norms’ do or should act the same way.

But there is a very strong reason why they don’t… and why these regulatory worlds can act completely in parallel – often without having much to do with each other at all.

Let’s look at some reasons why this is the case.

The first reason why these worlds often exist in parallel universes is that, as we know from our own everyday lives – for most people, and many organisations, the protection of the law is simply out of kilter with the way they live their lives – too costly, too slow, overly complicated and often impenetrable. IP law is governed by Civil Law and requires the injured party to Sue, thereby employing lawyers and potentially spending considerable time and money - much simpler and cheaper to rely on the 'rules' of the street, the honour code of those around you. 

Secondly, and I think more importantly, the reason that the law and the norms can end up so different is because they are there to serve two very different economies. One is the very familiar ‘Market Economy’ where things can be bought and sold thanks to the protections of the law. The other, more exotic perhaps, is the ‘Gift Economy,’ more often regulated by social norms. Both enable ideas, services and products to be exchanged, but there are significant differences.

(Click for larger version.)

Why should the gift economy exist at all – why can’t the market place be the place for all of our exchanges? Well, for one thing it seems there are things we instinctively find it troublesome to sell: sex, perhaps, or babies, or body parts, or votes all lead to ethical dilemnas.

Not only are there some things we’d rather not sell, there are some exchanges which just work better within a ‘gift economy’. A classic example is commercial blood donor systems, which generally produce blood supplies of lower safety, purity and potency than volunteer systems.

Another beneficiary of the gift economy is Alcoholics Anonymous, an organisation that exists solely through members’ contributions (the program itself is free); it’s widely perceived that the charging of fees would cut out the motivating factor of communal gratitude – a major source of AA’s energy.

Although both of these economies have been around as long as humans have needed each other, each new technology has enhanced the capacity, speed and reach and has successively drawn new users in. Most recently the internet has been a massive accelerator of both systems. On the one hand all manner of shops and services have taken advantage of this accelerated global market economy – on the other new human endeavours like the communal creativity of Wikipedia have taken advantage of the souped-up nature of the web based gift economy.

Although these worlds are often parallel cultures – sometimes they can co-exist and be utilised by the same organisation. These hybrids don’t necessarily cancel each other out – the market and the gift economies in some form of opposition – but perhaps counter intuitively, they can often thrive.

Recently we have seen this with GlaxoSmithKline’s radical change of strategy towards the developing world. GSK’s head, Andrew Witty, picked up a huge amount of attention for announcing the slashing of drug prices in poor coutries, but his most radical proposal is to create a ‘patent pool’, allowing the development of IP owned by GSK.

 ‘The move on intellectual property, until now regarded as the sacred cow of the pharmaceutical industry, will be seen as the most radical of [Witty's] proposals. ‘I think it's the first time anybody's really come out and said we're prepared to start talking to people about pooling our patents to try to facilitate innovation in areas where, so far, there hasn't been much progress,’ he said. ‘I can't tell you how many speeches I've heard about – oh, you know – 'I wish we could make progress on TB' or 'Why haven't we got treatments for these things?' We all sit there saying well yes, it's terrible isn't it, instead of actually trying to do something about it. So … what I really hope this does is stimulate people to start engaging with us, and maybe other people to say look, actually, if you did it this way it could really work.

‘Some people might be surprised it's coming from a pharma company. Obviously people see us as very defensive of intellectual property, quite rightly, and we will be, but in this area of neglected diseases we just think this is a place where we can kind of carve out a space and see whether or not we can stimulate a different behaviour.’ He is aware that others in the pharmaceutical industry may accuse him of selling the family silver. Some people, he said, ‘are going to hate this’. But he added: ‘I do think that many CEOs of many companies do worry about this issue and do have it in their minds and who knows, maybe somebody has to move before many people move. Equally I could imagine getting a phone call saying 'What are you doing?'‘

But what place has art in this ‘gift economy’ – it clearly seems also to straddle both worlds – it can be sold and resold, it can be nothing more than an investment, its originality can be protected by law, but I suspect everyone in the room has a sneaking feeling that a large part of it always remains a gift.

Creativity is for many a gift and a privilege – the nascent creator often converted to art by art itself.

Here is a warning from a wonderful New Yorker essay - the Ecstasy of Influence - by Jonathan Lethem:

If we devalue and obscure the gift-economy function of our art practices, we turn our works into nothing more than advertisements for themselves. We may console ourselves that our lust for subsidiary rights in virtual perpetuity is some heroic counter to rapacious corporate interests. But the truth is that with artists pulling on one side and corporations pulling on the other, the loser is the collective public imagination from which we were nourished in the first place, and whose existence as the ultimate repository of our offerings makes the work worth doing in the first place.
Justin

Part 3: Does the Street do your job better than the Court?

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