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April 22, 2007

The Value of Intellectual Property

Nearly all discussion of intellectual property is intellectually dishonest without the acknowledgement of the most essential aspect: that "property" means "taken", specifically as in "a portion of"...

An extension of this is the matter of what defines "not taken", which must also mean not withheld. Withholding is a major consideration, as in usual practice, enforcing property gets tricky, but most often winds up focussing on the matter of having the right, even more than the opportunity, to take a part from the whole.

But on whose terms do we get the privilege, in the first place,to take? Or to put it more bluntly, at whose expense or benefit is it done -- by which we justify the act?

The following discussion, along with the illustration below, describes the layers of transformation that partition a supply of ideas into an artifice called intellectual property.

I.

Again, on whose terms do we get the privilege to take? Takers would like to think that the terms in question are both ordinary and appropriate in some obvious way. But what is obvious to some of us will often be obscure to others of us. For example, the "I'm doing this for your own good" school of taking is ethically justified as "beneficial protection". But the only thing that makes it ethical is the special reasoning by which it is considered to be "beneficial"... You know the drill: major museums nab artifacts from third world countries for "preservation", and cities nab private homes and grounds under "emminent domain" for developers. Clearly, the trick here is in who really gets the net benefit, which calls for some yardstick. But in my neighborhood, regardless of the measure, gaining benefit at someone else's expense is generally unethical except in sports, crimestopping, or other mutually declared wars.

Continuing to question the idea of just who's good is at stake, look at withholding. Not just a nuance of taking, "withholding" is commonly accepted in ordinary marketing, where the basic idea is to compete for (and win) control of a supply -- control that effectively makes the supply itself "property". Such withholding -- that control of supply -- finds itself ethical only in the same manner as benefits are accepted in sports -- namely, by convention amongst the players. The beneficiary? In this case, everyone playing who agrees to let everyone else "do it too if you can"...

In that scenario, what's actually most interesting is this: before "property" is established, all the fuss is really over opportunity even more than over rights or actual possessions; thus the game can't actually be played without judges and referees who evaluate the fairness of the fight for opportunity.

And at this "pre-property" stage, there is something even deeper. Unless everyone assumes some limiting factor that creates the need for "defense" of the supply, the agreement that condones taking is unnecessary in the first place. For example, in sports, this limiting factor might be a timer, or a fixed number of allowed attempts, or some other arbitrary boundary on a key enabler -- an enabler which could therefore run out or be hard to come by. Without the limiter, you don't need defense, and thus you don't need property.

Likewise, the first gimmick behind conventionally justifying "intellectual property" is to create an artificial limiter. This limiter might be a purely imaginary one, but marketing teaches us that we can make the perceived virtually real, and that's practically good enough.

Before we investigate the artifice of that limiter needed for intellectual property, consider the starkly contrasting issue of the supply of intellectual capital.

II.

Virtually no one knows how much intellectual capital there really is out there, but there is an accepted industrial practice of estimation. Namely, at any given time, the detectable level of supply is virtually created -- by organizations that measure the level in terms of "products" to be appropriated to one agenda or another. In fact, in common across all particular instances or organizations, the standing agenda is to convert capital into products that represent property. Why? Because property is worth more future capital than the amount of past capital consumed to make it.

For these organizations, it hardly matters to the agenda whether 5/10's or only 1/10 of the "real" supply of capital is available, if in effect both amounts are only capable of the same product. So the organizations don't measure the "real" supply, but instead only measure the effectively available part (i.e., not all the supply that there is to hold, but just what opportunity they have to hold, captive, any of it in a practical way.)

Not to say they are worry-free about the beginning level of capital. They do have to work to get some, from somewhere. Ironically, the organizations with the most ferocious marketing of an agenda to "produce more intellectual capital" inhabit the most painfully costly strata of stakeholders' investment (think public elementary schools and Ivy League universities) even though they also inhabit both the lowest and highest extremes of operational ROI (think public elementary schools and Ivy League universities). For the record, note that they are gone missing in the middle. Oh well.

Whatever: so what drives it all anyway?

Answers vary. In some realms, it is possible to think that intellectual property is bought with intellectual capital. This is neither completely hallucinatory nor broadly true. The mechanism that allows intellectual property to appear to be bought with intellectual capital is... politics! -- or in other words, rhetoric.

This shouldn't be taken lightly at all, because rhetoric is the basis of the construct called 'the marketplace of ideas".

It doesn't matter whether that dynamic is being manifested by Gallup polls; or by the Thomas Kuhnian structures of scientific revolution; or by US Weekly, InTouch, and the rest of the pop porn periodicals that duly say Who's It And How. All these examples have the same thing in common. They all show us that our luckiest experience as consumers of rhetoric is to learn that we can believe anything we hear but we might be wrong -- merely perched, anxiously, on the fence between ideas and products.

III.

Forget "mindshare." Instead, consider the two most basic intellectual products: fiction, and non-fiction.

Often, we intentionally choose to ride "fiction". And often, that's okay. After all, there's no special reason why we should be forced to confuse good fiction with truth or bad fiction with lies. As one friend of ours likes to say, they are orthogonal to each other:

When you keep the picture straight, it's easier to understand that what's at stake, usually, is not the thing that gets told but instead the art of the telling. In the scenario above, we'd love to be in the upper right quadrant, but we'll settle for the upper left when we can get it. As audiences, we're all about having a preference for plausibility, and we simply, and usually, require a better performance over any other matter.

For example, what do we learn from Google, the marketplace of ideas? We learn that for a given idea, 86 people will have had it and taken a shot at packaging it, some of them pretty good. Of those 86, thanks to Google, who do we now care about? Answer: not necessarily the name brands amongst them.

So why should the name brands get paid more, and why shouldn't the others get just as much play? By removing (as Google has) the artifical defense of scarcity, we've left old school promoters facing the equivalent of an absolutely thriving black market suddenly declared legit, like, like... Second Life.

What about non-fiction? Here the magic is actually not "plausibility" but the "service" of delivery. Limited service is much more aggravating than limited information, because if the information supply overloads the service, the orphaned information is still not useful,regardless of what it might be about. Our emotional response to service is key. In non-fiction, it's really about tolerance, and in the range of tolerance we go, worst to best, not from lies to truth, but instead from the inconveniently alien to the conveniently familiar.

IV.

Against the production rhetoric of both fiction and non-fiction, of plausibility and service, we have to bring our skepticism, or else caveat emptor. We'll demand that we get a good performance in either case, but in getting it, we have to be sure that the delivery is neither turning non-fiction into fiction, nor vice versa.

V.

In exposing the nature of these products, it seems that their packaging would make them property at least for their producers. But their prospects for success are in the control of the packaging facility; that is, it's actually the facility that is the property.

At this point, let's imagine that the mind is the facility. Then of course it is not the mind's ideas that are the property, but instead the mind itself.

Is it plausible to extend our identification of that mind by abstracting the distinguishing model of its behavior? After all, we can say that the packaging facility called the mind asserts itself by it's repeatable application to the raw materials that it processes. The essence of "property" here is the way that the mind does it.

This issue of "process" makes it worth pointing out that "taking" should be seen differently when the event is "consuming" versus "holding" however briefly. But more importantly, we have to see that when the mind's process has finally output a product such as an idea, withholding the idea from other minds doesn't make the idea "property"; instead, it simply leaves the idea captive, uncommunicated. The probability is that the idea can be reproduced somewhere else, in another property. And, of legal note, the other property need not be dissimilar in order to be an "other". It only needs to be a different instance.

So logically, we can see that many identical intellectual properties can occur, notably by mechanisms other than "copying" one to another. (And empirically, we already knew this to be true, having seen that some great ideas have occurred at multiple points in time or space with no discernable "live" connection of those points.) Not only does this demonstrate that an idea is intrinsically not captive to only any one mind (property), but also that the active restraint of an idea's reoccurrence is truly artificial.

VI.

That realization puts heavy pressure on the dumber ideas held about intellectual property -- the ones which like to flog the criteria of uniqueness and exclusivity in the face of a much more obvious probability that "my" intellectual property may be practically indistinguishable from someone else's.

The full reality is that my intellectual property is publicly interesting only to the degree that either other people's is unavailable or that mine (my mental behavior pattern) is relatively inventive.

VII.

Now we have the terms to untie a couple of knots in the line of thinking about intellectual property.

For example, what is copyright about? It can't be about the final similarity of products, alone, since (a.) re-production is not actually necessarily "copying", and (b.) the ability to reproduce is more likely to be the property than is the product; and (c.) my property need not be any different from another.

Instead, copyright is fundamentally competitive, a limiter attempting to regulate the presence and use of a like property for a like outcome in a prescribed market. Naturally, unless the market itself actually has a prescription (i.e. definition), then there is no artificial or conventional limiter that necessitates a defense of exclusive opportunity.

Copyright specifically intends to prohibit a "same" opportunity to compete. But in a fair market, the convention normally established is about having an "equivalent" opportunity to compete. And finally, where competition is irrelevant, so is copyright.

Next: just as the purpose of intellectual capital is not to purchase intellectual property, the purpose of intellectual property is not to support copyright. This assertion doesn't keep those components from being used that way, but there are no inherent protections or mandates to do so -- except in the agreed conventions of some agenda that has the need.

VIII.

The last area of consideration is to distinguish, in accounting fashion, intelectual property versus "assets". Intellectual property may or may not be an asset. Proof? Ask any artist who is not independently wealthy, or any person who cannot speak the language of his current domestic or local community. How you know what you do know may simply be mis-fit. What you don't know may not hurt you, but what you do know may not help.

But let's get away from the accountant's schema of things and look at "assets" differently. In real life, property is always an asset, but it may just be worthless until it is given a job to do, which them makes it a functional resource. The importance of the resource is what attributes value to the asset. Naturally, if competition proceeds in a way that makes the resource unimportant, then the relative value of the asset decreases. The question is, to whom does it matter? If you take your assets to a different game, or you don't care what game they are in, it doesn't necessarily change the asset in any important inherent way.

IX.

Finally, then, what is inherently important about intellectual property? Intellectual property is a resource, and here's what it's for: the designation of "intellectual property" brands something as a design benchmark for follow-on invention that can evolve or even revolutionize the conditions of the environment. In management practice, the point would be to use it as a base from which to cultivate 5 new offshoots; then take the one or two best of those five and focus all parties on sprouting five more offshoots from that; then trim and sprout again; etc.

Some will see that as just an argument for innovation. But the impact is more profound, as it equally affects all points of the spectrum ranging from renovation, to remodeling, to reengineering, to innovation.

Posted by Malcolm Ryder at April 22, 2007 7:19 AM

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