We must protect digital intellectual property to foster innovation

One of the most difficult issues that we as a society have to resolve is how to encourage new ideas and inventions by protecting the interests of those who create them. Most enlightened CIOs recognize that we’re all ultimately in the business of creating intellectual property.

For many of us, information is our product. Look at the steady shift toward the information economy in the United States as we move the creation of physical goods (manufacturing) to companies with lower labor rates and less restrictive (some would say protective) local laws. As this trend continues, we need to place more emphasis on protecting our intellectual property (which, in the final analysis is a string of bits) as well as we protect our atoms (our tangible products).

Protecting atoms and bits
In the world of atoms, our current legislation works well. If I have an idea that allows me to create something unique, I’m protected by patents and copyrights. Since what I’m making is a tangible item—it’s made of atoms—anyone attempting to duplicate it has to invest in the plant and materials necessary to manufacture it.

Once a duplicate is created, it’s easy for me to see whether the rights granted to me as the copyright or patent holder have been violated. And I can also follow the trail of bread crumbs to find out who originally made the knock-off product, so I have a reasonable chance of enforcing the protections given to me. But we struggle daily with the rights surrounding bits.

Since we can’t reach out and touch bits, the rights afforded to their creators are more difficult not only to define, but also to enforce. Bits can be duplicated and distributed by anyone with a $1,000 PC, a CD burner, and a high-speed Internet connection. The most common example of these products is computer software. But with new technologies that convert products made of atoms (analog) into products made of bits (digital), the problem becomes much broader. Since I can rip songs from a CD or digitize the analog stream coming from my local cable television provider, I can now distribute millions of copies of someone else’s intellectual property with a single mouse click.

Bits are free
Perhaps the most difficult problem to overcome regarding the protection of digital intellectual property is the concept that bits are free. The logic is that since there is no distribution cost and no physical asset required to distribute the bits, they have no value. If you have any doubts about whether this is (or will be) the prevailing attitude, just spend some time with a couple of teenagers. When I was teaching a Junior Achievement class for a local middle school this year, I asked a policeman friend of mine to accompany me to the class. I also asked him to bring a few extra pairs of handcuffs.

During the class, I asked everyone who had a CD burner to stand up. Twenty of the 24 students stood. Then I asked them to sit down if they hadn’t copied music from the Internet or burned a copy of a music CD for their friends. No one sat down. I asked the policeman to come in the room and start handcuffing the standing students. Of course, they were stunned. It took only the click of one set of handcuffs before they started protesting vigorously.

They argued that once they had copied the music to their PC or bought the CD at a local store, they owned the content and could do with it as they pleased. Many of them felt the same way about computer software and didn’t understand why software companies wouldn’t allow them to make as many copies as they pleased once they had bought the software.

We’re doing ourselves a great injustice by standing by while our children—and our employees—are allowed to believe that buying a copy of a software title conveys unlimited rights. By the end of this class, the students understood that they were breaking the law by copying CDs and downloading music and burning it for their friends. But they also knew that there wouldn’t actually be a policeman knocking on their door anytime soon.

Why open source doesn’t help
I think the open source movement does even more damage to the perceived value of bits. By advocating that all software should be basically free and that developers should work in a communal environment for everyone’s benefit, the open source movement greatly denigrates the public’s perception of the value of digital intellectual property.

I was both amused and dismayed at the industry’s reaction to Microsoft’s recent settlement with SCO regarding the use of its intellectual property. The protection of intellectual property is a major focus of Microsoft platforms—not only protecting its own intellectual property (using tools like product activation), but also that of others with products such as Digital Rights Management hooks in Windows Media Audio and Video as well as Office 2003 and the new TrustBridge initiative in future OS products such as Longhorn.

This Microsoft investment was nothing more than recognition that Microsoft may have used some of SCO’s technologies in its UNIX integration products and an admission that SCO should be compensated for the use of the intellectual property. The open source camp saw this as a backhanded way of supporting the SCO license fight against the Linux providers—the first volley being a $1 billion licensing lawsuit against IBM.

I applaud Microsoft for taking the high road and protecting a rival company’s investment in intellectual property. Quite frankly, each of us needs to analyze both our family's and our company’s stance toward protecting everyone’s intellectual property. If we don’t, we'll create a country whose citizens place no value on bits, and the incentive to innovate will disappear.

TechRepublic originally published this article on 17 June 2003