Business leaders are learning a whole new set of rules to safeguard their intellectual property in the digital age, says Kellogg School of Management technology professor James Conley. But, it is important that they not get carried away.
“The system is out of balance,” says Conley, who also teaches at Northwestern’s McCormick School of Engineering. “The first impression young consumers, like my children, get of law enforcement is on a DVD.” He is referring to the familiar Federal Bureau of Investigation warning that has appeared on digital media since 2004, and on videotapes since the birth of the movie rental industry—the one that threatens would-be pirates with fines up to $250,000 (around Rs1.06 crore) and prison sentences of up to five years.
Illustration by Malay Karmakar / Mint
Conley thinks the warning is a bit hyperbolic. Two hundred and fifty thousand dollars for copying a DVD? he asks. “But what happens when you steal a car?”
According to Conley, much of the controversy surrounding intellectual property is rooted in sensational spin. “It is up to the technology companies to make the case that puts intellectual property in the appropriate perspective,” he says. And, he is prepared to help.
Since 2006, he has been working with the United Nations’ World Intellectual Property Organization (Wipo) to develop online training programs for executives in developed and developing nations. In the coming year, he will travel to Switzerland and throughout Europe to foster program growth.
Wipo executive director Anil Sinha says the organization enlisted Conley—a faculty member of the Kellogg School’s Center for Research in Technology and Innovation—to help develop in-depth courses for senior managers. “He has played a major role in bringing Wipo and Kellogg together,” Sinha says.
Conley says the Wipo programs will teach business leaders about their legal rights but, more importantly, will help show them how to use their intellectual property to realize competitive advantage. With Wipo, Conley says he hopes to “build content that makes this a management issue and not just a legal issue.”
“Intellectual property is a contemporary form of the classical notion of property,” he says. While previous generations of leaders learned “management systems governing stock and flows of tangible goods or physical property”, Conley says 80% of what people pay for in 2008 is intangible—a brand, an idea, an experience, a few gigabytes of information transmitted via the Internet. “The safest way to secure that is through intellectual property.”
“The national economies of the world are moving towards a single, global market,” says Conley, and there is a high correlation between a nation’s wealth and its leaders’ ability to manage intangible assets. The global scope of the UN, he adds, will enable Wipo to bring new knowledge to nations that need it most.
“Few entities can reach developing nations as well as the UN,” he says. “It is an intergovernmental organization, and that means it is driven by diverse government interests.”
The Wipo programs provide a solid foundation in intellectual property management, but they will leave it up to the participants to exercise their rights in the nations where they work.
“The fact that emergent economies are struggling with this is good news,” Conley says. Even in a nation such as China, where the market for copycat goods and pirated entertainment is thriving, business people are starting to ask questions about intellectual property. He gives the example of a Chinese musician who sets out to sell an original album, only to find his songs copied and distributed by a media-pirating neighbour. Suddenly, this musician takes an interest in his rights.
As the tools of entertainment production become more widely available to average citizens and more budding artists and entertainers emerge, Conley says, they too will appreciate the utility of innovation incentives embedded in intellectual property rights: “The only thing that exceeds the speed of the original innovator is the speed of a fast follower.”
Aubrey Henretty is a staff writer at Northwestern University’s Kellogg School of Management.
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