Mining Digital Gold: How Past Frameworks Control Present-Day Value Part I
Why are Disney, Netflix, and Amazon are worth so much while the average creative entrepreneur barely makes a living wage?
Image from creativeconomy.britishcouncil.org
By the 1700s the Transatlantic Slave Trade had brought 1000 enslaved people from the continent of Africa to the shores of Massachusetts. With those enslaved came illnesses borne of inhumane conditions aboard the ships. At the same time, the smallpox epidemic of the 1700s ravaged the New England colonies. Hundreds were dying daily.
As the diseases continued to kill, one minister, Cotton Mather, was told by an enslaved man Mather had named Onesimus, that there was a way to prevent getting full-blown smallpox. Onesimus described a procedure he witnessed, where a healthy person would rub pus collected from someone who has smallpox into an open wound. If the procedure was successful, smallpox would be prevented.
From this recollection, Mather would then work with a physician, Zabdiel Boylston, in 1721 to test the theory. That year, an outbreak of smallpox sickened half of Boston’s population which caused Boylston to use the inoculation on 242 people. Of those who received the treatment, 1 in 40 died instead of the normal death rate of 1 in 7.
By 1796, Edward Jenner would refine the early treatment to develop an effective vaccine from cowpox that would eventually provide smallpox immunity. The beginning of vaccine medicine was born.
Centuries later, in 1980, the World Health Organization would declare that smallpox had been entirely eradicated. All thanks to a man called Onesimus and the knowledge he carried with him to a strange new land.
The story of Onesimus seems incredible. A man who was not seen as a human being by the law, would then fundamentally change the lives of millions of people. Not only that, but neither he nor his descendants would receive any benefit for the good he brought to society. That seems criminal. The story of Onesimus highlights a tension that exists with Intellectual Property law around true authorship, but also around collective vs. individual knowledge and value.
As we continue to grow a global digital economy, innovative and creative people will continue to build marvelous and magical things. Sadly, many of them will do so without ever understanding the true value those creations have, or what they can do with that value. It begs the question of whether Intellectual Property exists within an ethical or moral paradigm and if it doesn’t, should it?
Image from manufacturingchemist.com
Knowledge, Value, and Commerce
For as long as human beings have been around, knowledge has been a powerful tool. Intellectual property law is an example of that kind of knowledge. It is a body of law that operates nationally and globally to protect our right to ownership over the things we create. Intellectual property rights -copyrights, trademarks, trade secrets, and patents - allow the holder to treat those rights like property. This means rights holders can hold onto them and keep them from others, they can sell them, rent (license) them, and exercise a host of other controls over those rights.
When a community has knowledge that has a medicinal purpose, Intellectual Property rights treats it as knowledge that anyone can use, also called the public domain. Once that knowledge is distilled and turned into a pharmaceutical medication, it receives a patent, and the financial benefit goes to the company that formulated the medicine.
In the same way, a beat or rhythm that has traditional meaning in one community can be heard by a foreigner, recorded, and then used in the composition of a new work. The original beat is not protected, but the new composition is.
If we move out of the realm of indigenous people and traditions, how do we engage with movements of underserved communities? Now with the Internet, we have a new vocabulary to contend with different kinds of activities. What was once a pound sign is now called a hashtag, and a hashtag can have power- just look at #metoo and #blacklivesmatter.
What happens if someone wants to make a shirt with one of these hashtags? Does it belong to the movement? Can a movement belong to any one person? The manifestation of an internet community, a tribe of people with certain activities, expectations, and mannerisms - can an individual own that?
We buy and sell domains, will we one day buy and sell social media profiles, hashtags, and communities? How do you sell something that many people feel they own or are part of? Something that feels like a part of their identity?
The commercial and individual nature of Intellectual Property is a vital part of our domestic and global economies. Without the ability to own our creations, we would not have the Walt Disney Company, Japanese anime, Nigerian Afrobeats, or Korean dramas. Creators and innovators use these rights to earn value for the investment they made in using their skills and imaginations to bring incredible artwork and life-changing inventions to life. But the question still remains: is our current paradigm properly addressing not just communities with ancient knowledge, but collective property with commercial power, or social advocacy that uses commerce to fund activism?
To better understand intellectual property, let’s start from the beginning. Where did the idea come from? What was the intention behind this set of rights and how have those ideas evolved over time? Now as we look into an uncertain future with the internet pushing the boundaries of the digital economy, looking back may give us a sense of which direction we want to go. More importantly, it will give us a foundation from which to ask important questions about what it means to create, to innovate, and the impact we want those activities to have on humanity as a whole.
Image: Socrates from History.com
Intellectual property didn’t just spring from the ground one day and hop onto our screens. Nor did it fall fully formed from the sky and land in a white-coated pill. The concept of ideas-as-property is an invention of the human imagination that has existed for a long time.
As a category of property, it is easily the most abstract because it is not tangible, but eventually finds a medium through which it can be expressed. Think of a melody you sing in your head that becomes a song streamed on Spotify or iTunes; a recipe that you immortalize in a cookbook; a story that turns into a movie shown on the big, or little screen.
So in truth, it is not the idea that is protected. Intellectual property law allows a creator to control the physical manifestations or expressions of ideas by assigning and enforcing legal rights to produce and control physical representations of those ideas.
The first recorded reference of Intellectual Property protection dates back to 500BCE in ancient Greece. Chefs were granted year-long monopolies for creating a particular culinary delight. Another example of Intellectual Property enforcement involved Vitruvius (257–180 B.C.E.), who served as a judge at a literary contest. According to the account, he exposed false poets who stole the works of others and passed them off as their own. The individuals were tried, convicted, and disgraced.
While these examples exist, there are no known Roman or Greek Intellectual Property frameworks. There was however some understanding that there is a sense of ownership attached to the creation of a work. The modern concept of ownership and a built-in incentive for invention or creation allegedly arises from a statute of the Venetian Republic from 1474.
From a historical perspective, this statute, which existed 150 years before England’s Statute of Monopolies was quite sophisticated. The Venetian statute took into account the right of inventors, and also included an incentive mechanism to compensate inventors for infringement. There was also a term limit that addressed how long inventors would hold on to that particular right.
For the modern world, the U.S. system of Intellectual Property protection is one that is often looked at as an example for others, but the precursor to that system is actually the above-mentioned Statute of Monopolies from 1624 and the Statute of Anne from 1710.
The Statute of Monopolies granted fourteen-year monopolies to authors and inventors and ended the practice of granting rights to “non-original/new” ideas or works already in the public domain. For literary works, most were largely unprotected until the arrival of Gutenberg’s printing press in the fifteenth century. Even then, there were few true copyrights granted. If literary works were protected, it was done through grants, privileges, and monopolies.
Scholars believe that the first statute of modern copyright began with The Statute of Anne, written in1710. The statute begins:
“Whereas printers, booksellers, and other persons have lately frequently taken the liberty of printing, reprinting, and publishing books without the consent of the authors and proprietors … to their very great detriment, and too often to the ruin of them and their families: for preventing therefore such practices for the future, and for the encouragement of learned men to compose and write use books, be it enacted …” (Great Britain, Statute of Anne, 1710)
Through this instrument, an author would receive a copyright for fourteen-year copyrights, with an option to renew the right again for fourteen years if the author was still alive.
These two statutes sit at the foundation of the modern concepts of intellectual property, patents, copyright, and eventually trademark and trade secrets. The recorded history begins in a Greco-Roman philosophical framework (Vitruvius, and the Venetian Republic Statute), then jumps to an Anglo-Saxon tradition (England’s Statute of Monopolies and the Statute of Anne). From this spring a hierarchical framework built on the separation between the inventor class and the public. The inventor holds and exploits the right. The public benefits from, uses, or purchases the physical manifestation or expression of the creation.
From its inception, Intellectual Property has always had two defining characteristics: first, it is an individually held right, held against others for the primary benefit of the holder. Secondly, it has always had a commercial end or objective. Monopoly power has at the heart of being a holder of intellectual property rights.
Most conversations about monopoly involve a company that has a monopoly on an industry level. For example, Amazon has monopoly power in bookselling because they are a dominant player in the US industry. This also means that any singular action of the monopoly player has a significant impact on other market participants.
In the area of Intellectual Property, monopoly means that the holder of the right is the only person who can make decisions about the present and future commercial use of that idea or creation. For example, only the holder of the McDonald’s trademark can decide how McDonald’s will show up in advertising, in the grocery aisle, and in your shopping cart- no one else. So to say that intellectual property rights have a commercial end is to say that the goal is typically to make money from holding the right.
For these two reasons, individual ownership, and the commercial end, intellectual property has had an increasingly important role in both local and global economies. As a result, this class of rights- copyright, patent, trademark, trade secret- is protected by most countries through domestic legislation. However, because differences in domestic legislation exist, countries realized the need for a global agreement to safeguard right holders outside of their home countries.
Image: WIPO from ip-watch.org
From Berne to WIPO
First, in 1883 the Paris Convention for the Protection of Industrial Property created Intellectual Property protections for inventions, trademarks, and industrial designs amongst 14 member states. Then to extend international protection for copyrights, 1886 gave birth to the Berne Convention. Officially known as the International Convention for the Protection of Literary and Artistic Works, the accord established the minimum requirements for protection for all signatory states. The Berne Convention has been modified several times: in Berlin, Rome, Brussels, Stockholm, and most recently Paris in 1971.
In addition to the Berne Convention, there have been other international agreements that have addressed the relationships between Intellectual Property and trade. One of the most recognizable organizations globally in the realms of Intellectual Property is of course the World Intellectual Property Organization (WIPO).
WIPO was created in 1967 as a result of the Stockholm Berne Convention to protect industrial property (inventions, trademarks, and designs) as well as copyrights (literary, musical, photographic, and other artistic works). In 1974, WIPO became a specialized agency of the United Nations.
At its core, WIPO has a number of objectives. Of these, the two most important ones are to promote the protection of intellectual property rights and administer more than twenty IP treaties. WIPO also supervises various unions- like the Paris and Berne conventions- regarding agreements on trademarks, patents, and the protection of artistic and literary works.
Since the rise of the digital age, in the late 1990s, WIPO’s role has increased to address issues and disputes arising as a result of the Internet and e-commerce. It is around this same time that WIPO and the World Trade Organization (WTO) signed a cooperation agreement that allows the organizations to work together to administer a variety of initiatives.
Steadily and methodically, the effort to ensure minimum protection of intellectual property rights has evolved via the relationships between WIPO and WTO. However, the rapid growth of the internet and the digital economy has, in many ways, outstripped even the most advanced legislative instruments. Since the 1971 Berne Convention held in Paris, the internet has become a fixture in many nations, social media has changed the nature of commerce and creating situations and circumstances that could not have been conceived of decades earlier.
Image from information-age.com
A Brave New World
We have come a long way from a chef’s one-year monopoly on a great recipe. Intellectual property rights come in different, shapes, packages, and formats. Every day, with each new technology and distribution platform, we learn new ways to create, engage, and consume content. As these evolutions continue, the concept of ownership is a discussion had by corporate counsel and distributors. Is it a conversation being had by Instagram creators? Are enough Youtube stars thinking about the life-cycle of their IP rights?
We have put a lot of value on innovation and creativity. The question now is how much value? And where is that value going? As the internet broadens the audience and thins the line between national borders, there are questions we need to answer.
The United States, the location of the largest technology and entertainment companies in the world, has a significant impact on the global ecosystem. Does this impact come with responsibilities?
Do those responsibilities exist within the framework of intellectual property law, or must we look to another global framework? Perhaps, the UN Declaration of Human Rights. Might it tell us whether ethics, morality or human dignity have a place in our current intellectual property framework? Who gets to decide these issues in a global market?
Important discussions need to be had, but who is having them?
To be continued…
The Content Biz Bailout
The Story of Onesimus
Links to The Berne Convention and its primary protections can be found here
The History of WIPO