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Currency Of Ideas

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A presentation outlining some ideas about the future of ideas.

A presentation outlining some ideas about the future of ideas.

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  • 1. THE CURRENCY OF IDEAS
  • 2. Thomas Jefferson “ He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me.” Thomas Jefferson
  • 3. Outline OWNERSHIP OF IDEAS LEGAL PROTECTION OF IDEAS THE CURRENCY OF IDEAS THE NATURE OF IDEAS CONCLUSIONS
  • 4. Outline OWNERSHIP OF IDEAS LEGAL PROTECTION OF IDEAS THE CURRENCY OF IDEAS THE NATURE OF IDEAS CONCLUSIONS
  • 5. THE NATURE OF REAL PROPERTY
    • PHYSICAL NATURE OF REAL PROPERTY.
      • Real property is physical and therefore tangible.
      • It is determined in the context of spatial determinants.
    • TRANSFER AND OWNERSHIP.
      • Real Property is capable of ownership and absolute transfer.
    • ECONOMIC DETERMINANTS.
      • The sum total of all real assets are finite and their consumption leads to scarcity.
      • Real property values increase with scarcity.
      • To achieve economic growth scarce resources have to be re-allocated among alternate uses.
  • 6. THE NATURE OF IDEAS
    • NON-PHYSICAL NATURE OF IDEAS
      • Ideas are intangible though by themselves they are of little use without physical manifestation.
      • Ideas are defined better in the context of time than space.
    • TRANSFER AND OWNERSHIP
      • Ideas are experienced and therefore incapable of being truly possessed.
      • Ideas are propagated and not distributed.
    • ECONOMIC DETERMINANTS
      • Ideas are limitless and by their nature do not create scarcity.
      • Unlike tangible objects, therefore, ideas do not necessarily increase in value with scarcity.
  • 7. IDEAS IN THE DIGITAL WORLD
    • IMPLICATIONS OF DIGITAL TECHNOLOGY
      • Technology completes the detachment of ideas from the physical, spatial plane.
      • It creates newer and more efficient distribution/ propagation mechanisms.
    • ALTERNATE RESOURCE AVAILABILITY
      • Digital networks open up large reservoirs of ideas for large groups of people.
      • They allow for unique collaboration in the creation of new ideas. ( ThinkCycle, Wikipedia, SETI@Home )
  • 8. Outline OWNERSHIP OF IDEAS THE LEGAL PROTECTION OF IDEAS THE CURRENCY OF IDEAS THE NATURE OF IDEAS CONCLUSIONS
  • 9. Outline OWNERSHIP OF IDEAS LEGAL PROTECTION OF IDEAS THE CURRENCY OF IDEAS THE NATURE OF IDEAS CONCLUSIONS
  • 10. OWNERSHIP
    • ORIGIN AND EVOLUTION OF THE CONCEPT.
      • Pre-Industrial concepts of “ownership” revolved around Real Property.
        • Acquisition of property was originally militaristic.
        • Merchant Societies forced the development of ethical rules for acquisition of Property.
      • In the Industrial Age, the value of ideas began to be felt.
        • Need for protection of ideas was considered.
        • Protection was carefully granted to the physical manifestations of the ideas and not to the ideas themselves.
  • 11. WHY WE WANT TO OWN IDEAS
    • A NATURAL PROGRESSION
      • The Industrial Age was focused on the ownership of property as an indicator of wealth.
      • The Information Age has clung to the same indicators.
    • COMMERCIAL MANDATES
      • Financial investors demanded the application of the best protection mechanisms to secure their investment.
  • 12. OWNERSHIP OF IDEAS
    • CAN IDEAS BE OWNED?
      • Historically ideas never needed to be owned.
        • Sophocles, Dante, Da Vinci, Michaelangelo, Aryabhatta
      • Modern thinkers also manage without ownership.
        • Linus Torvalds, Benoit Mandelbrot
    • TECHNOLOGICAL IMPERATIVES
      • Creators of ideas have always been threatened by technological advances.
      • The economics of information call for greater protection of ideas.
  • 13. Outline OWNERSHIP OF IDEAS LEGAL PROTECTION OF IDEAS THE CURRENCY OF IDEAS THE NATURE OF IDEAS CONCLUSIONS
  • 14. Outline OWNERSHIP OF IDEAS LEGAL PROTECTION OF IDEAS THE CURRENCY OF IDEAS THE NATURE OF IDEAS CONCLUSIONS
  • 15. LEGALISING OWNERSHIP
    • PROTECTION AGAINST TECHNOLOGY
      • The Creator of the works needed incentive to keep creating these works for the public benefit.
      • The ideas themselves were always thought of as being common property of man over which the creator had a limited monopoly of use.
    • CREATION OF AN ECONOMIC MODEL
      • Statutory recognition of royalties and remuneration for use.
  • 16. STRUCTURE OF LEGAL PROTECTION
    • THE GRANT OF OWNERSHIP
      • The owner of the IP is identified and vested with the ownership of the intellectual property
      • Ownership may or may not require to be registered
    • RIGHTS OF OWNERS
      • All owners of IP are entitled to exercise certain rights over the intellectual property they create.
      • These usually take the form of the right to prohibit others from doing certain acts.
    • TERM
      • The ownership is for a limited period of time after which the IP enters the public domain.
  • 17. LEGALLY RECOGNISED IP
    • PATENTS
      • Protection for inventions.
      • Requirements include novelty, non-obviousness and industrial application.
    • COPYRIGHTS
      • Protection for artistic and literary works
      • Strict protection for form and substance only
    • TRADEMARKS
      • Protection for brand names used for identification of goods and services.
  • 18. EVOLUTION OF LEGAL PROTECTION
    • GLOBAL STANDARDISATION
      • International trade obligations have been made increasingly dependant on IP commitments.
    • SYSTEMIC EVOLUTION
      • The scope of the subject matter that is entitled to protection has constantly grown.
    • STATUTORY EVOLUTION
      • The rights available to owners have steadily increased to match evolving technologies.
  • 19. SOME STATUTORY EVOLUTIONS
    • RENTAL RIGHTS
      • Resale of legitimately purchased software.
    • ANTI-CIRCUMVENTION
      • Technological measures of copy protection statutorily recognised.
    • EXTENSION OF TENURE
      • Commercial Interests vs. The Common Property of Man.
  • 20. THE REALITY OF IP PROTECTION
    • LITIGATION
      • Legal protection is only as good as the ability of the owner of the IP to enforce it.
      • Huge costs and time make protection measures based on litigation, the preserve of the elite.
    JUSTIFICATION FOR HOLDING IP Enforcement of IP Rights Deterrence Increasing valuations
    • COMMERCIAL CONDITIONING
      • Peer group dynamics.
      • Increasing commercial pressures on ownership of IP
  • 21. THE REALITY OF IP PROTECTION
    • The ownership of ideas is enforced through stringent laws.
      • However these laws are practically unenforceable and often broken.
      • Scapegoats are singled out.
      • Respect for law diminishes.
    • Technology is faster than law
      • Law cannot protect effectively
      • Nor can it change soon enough
    COST OF PIRACY Middle East/ Africa $137 million Eastern Europe $435 million Latin America $865 million North America $2.0 billion Western Europe $2.7 billion Asia Pacific $4.7 billion Worldwide piracy rate has increased from 37% to 40% Source: BSA, June 2002
  • 22. Outline OWNERSHIP OF IDEAS LEGAL PROTECTION OF IDEAS THE CURRENCY OF IDEAS THE NATURE OF IDEAS CONCLUSIONS
  • 23. Outline OWNERSHIP OF IDEAS LEGAL PROTECTION OF IDEAS THE CURRENCY OF IDEAS THE NATURE OF IDEAS CONCLUSIONS
  • 24. FINANCING IDEAS
    • TRADITIONAL MODEL
      • Patrons of art and science paid for the sustenance of artists and scientists.
      • Knowledge industries today still survive on service based revenue models for the provision of knowledge based services.
    • THE INTELLECTUAL PROPERTY MODEL
      • Monopoly rights ensure that owners of valuable IP are the sole source of a given idea.
      • IP is therefore treated like a scarce commodity and priced accordingly.
  • 25. REVENUE YIELD ON IDEAS
    • ROYALTY REVENUES
      • For the duration of validity of the IP, royalties can be claimed on use.
    • ENFORCEMENT REVENUES
      • Settlement revenues.
      • Court awarded damages.
    • INVESTMENT
      • Valuations based on potential future earnings attract investors.
  • 26. THE IDEA MARKETPLACE
    • THE IDEA SILO
      • Creation of an IP inventory.
      • Consolidation of IP in the hands of the wealthy through acquisition and co-ercion.
      • The extension of validity of expired IP through subtle modification of specifications.
    • THE UNEVEN PLAYING FIELD
      • Barter of IP only takes place between high net worth IP players.
      • These corporations have seats on standards committees to further maximise their IP revenues.
  • 27. CONSEQUENCES OF THE IP MODEL
    • IMPACT ON INNOVATION
      • Monopoly rights compel inventors to maximise returns before innovating further.
    • IMPACT ON COSTS
      • Basic cost of IP products remain high.
      • Cost of IP derived products escalate due to the inclusion of royalty costs in the pricing.
      • Cost of IP products necessarily include the cost of policing ownership of that product.
  • 28. ECONOMIC DILEMMA OF IDEAS
    • THE REWARD DILEMMA
      • In an Idea Economy, it must be economically viable for creators of new ideas to continue to innovate.
      • However the reward must not foster complacency
    • THE INNOVATION DILEMMA
      • Innovation grows out of past invention
      • However overly broad protection of invention can cripple innovation.
  • 29. FLAWS IN THE IP ECONOMY
    • POSSESSION
      • Ideas are incapable of being possessed. Hence protection models based on possession are flawed.
    • DISTRIBUTION
      • Ideas can be transferred without leaving the possession of the owner. Hence models that require excessive policing in order to ensure ownership are flawed.
    • VALUATION
      • The value of ideas is contextual. Hence traditional valuation models are flawed.
  • 30. REACTIONS TO THE IP MODEL
    • COST
      • High cost of drugs, particularly in the context of life saving drugs are being strongly resisted.
    • OWNERSHIP
      • Rampant piracy has forced several software product companies to rethink sales and marketing strategies.
      • Ease of distribution and file compression technologies has forced music companies to consider digital distribution alternatives.
  • 31. THE OTHER IDEA ECONOMIES
    • COLLABORATIVE RESEARCH
      • Distributed computing (SETI@home)
      • Collaborative design (ThinkCycle)
      • Community Publishing (Weblogs)
    • FREE ACCESS TO IP
      • Free Software Foundation
      • OpenCourseWare
      • Creative Commons
  • 32. THE OTHER IDEA ECONOMIES
    • DRAWBACKS
      • Non IP based models necessarily demand a basic level of philanthropy. This is not commercially feasible.
      • Unsecured IP is liable to theft and appropriation. In a property based economy this is untenable.
  • 33. Outline OWNERSHIP OF IDEAS LEGAL PROTECTION OF IDEAS THE CURRENCY OF IDEAS THE NATURE OF IDEAS CONCLUSIONS
  • 34. Outline OWNERSHIP OF IDEAS LEGAL PROTECTION OF IDEAS THE CURRENCY OF IDEAS THE NATURE OF IDEAS CONCLUSIONS
  • 35. THE CONTEXT OF IDEAS
    • Information is fast replacing property as the primary commodity for trade.
    • Information is still being dealt with in the same legal paradigm as property.
    • In order to better structure the economy of the Information Age, it is essential to understand it in the context of the currency of ideas.
  • 36. SOME THOUGHTS
    • IDEAS CANNOT BE OWNED.
      • The Information Economy cannot therefore be based on proprietary concepts of revenue.
      • Thus the Information Economy must evolve rewards for idea generation rather than the ideas themselves .
    • IDEAS ARE LIMITLESS
      • Therefore the generation of wealth through the artificial creation of scarcity will, at best, have short lived success.
      • The Information Economy must evolve rewards that are not based on the existence of a monopoly status.
  • 37. SOME THOUGHTS
    • IDEAS CANNOT BE TRANSFERRED
      • The Information Economy should therefore cease to base economic yields on transfer pricing and royalties.
      • Instead the focus should be to reward expertise in applying ideas to problems.
    • IDEAS EXIST IN TIME NOT SPACE
      • The Information Economy must cease to base revenues on products and versions.
      • Instead the new economy should generate revenues from dynamic and real time transactions.
  • 38. SOME THOUGHTS
    • Ideas should be generated and propagated.
    • The creator of the idea should be rewarded for his creation and for his expertise and knowledge of the idea but not based on any artificial monopoly right.
    • Others skilled in the art should be free to innovate on the idea and enrich the domain with their innovations.
    • In special circumstances where the research costs far exceed engineering costs limited monopoly protection may be offered.