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Hot Property: Digital Rights in a Digital World

The final article in a series on intellectual property issues.

"On one side, traditionalists argue that the Internet does not change anything fundamental, and that the web will eventually be absorbed by the IP system. On the other, web enthusiasts insist that the nature of the web (above all its digital, networked, and global characteristics) makes traditional IP irrelevant, or at least unenforceable."

IP Matters

Mention Napster to a music industry executive, the Amazon.com 1-click patent to an Internet entrepreneur, or northernlights.com to a freelance journalist, and the conversation is almost guaranteed to heat up within seconds. Passions run high on the role of intellectual property (IP) in the Web economy. In the wake of Napster, the distribution and protection of intellectual property in the digital world has arguably become "the most contentious legal debate in recent memory," according to Jim Welte, Business2.0.

Legislation struggles to keep pace: in 1998, the United States passed the Digital Millennium Copyright Act in an effort to keep up with Net developments. But take one look at that date and then make a quick run-through of tech developments since. How legislation can possibly second-guess Web technologies is an issue that poses a major dilemma for lawmakers and copyright holders alike.

Padlock on the Future or Growth Insurance?

Intellectual property rights advocates believe that content must be protected to have value. Digital Rights Management (DRM) is a growing hybrid of technologies developed to provide that protection. DRM can be perceived as today's take on personal bodyguards: you create, we protect. It could be the savior of copyright holders everywhere. It could also be irrelevant given the pace of the Internet, the proliferation of P2P services and the super-bonding of Web wizards and open source activists determined to liberate intellectual property for once and for all.

Don't lose the bodyguards yet though — this is a cutthroat world where the lean line between freedom and piracy is being drawn and erased, defined and challenged, in and out of the courts and the media with every new sensation (or outrage, depending on where you're standing). This is not an optimal modus operandi for any of the players. IP Matters warns, "what seems clear is that a lot more thought is going to have to be given to the issues the web raises for IP, and solutions will need to be arrived at that are seen to be workable, and equitable, by all concerned."

Ditching the Lock

Some argue that progress will come only with a radical shift in perspective away from the concept of copyright enforcement and towards creative and ultimately beneficial ways to control usage. Ron Lachman, Chicago and Silicon Valley-based Internet guru, angel investor and Trendlines' entrepreneur in residence, believes that taking a hundred-year-old law (the U.S. Copyright Law) and making it stick to a series of new transgressions — even when taking into account the update efforts — is almost immaterial in an age where information is an "easily and perfectly reproducible digital medium where everyone has the power of the press and anyone with an e-mail box can be a publisher."

Finding the Key

Ron recommends a pragmatic approach: "The product value isn't in the act of copyrighting. It is in the potential of the product beyond its original function. And value increases with the usage. Therefore it isn't copyright that should be enforced but usage, and what are needed are mechanisms that will control and monitor usage." Ron notes that the enforcement of usage in the form of notification or pay-per-use can be harnessed for some major proactive market research opportunities – and that is the added value.

Opening Windows of Opportunity

While companies could decide on a voluntary or mandatory compliance usage mechanism, Ron comments, "You catch more flies with honey than with vinegar. Rather than locking up your product, look for the benefits in voluntary compliance." And with the right technology, you could track, monitor, anonymize, and restrict usage. "A company can put a song on the Net. The consumer can then choose whether to pay two dollars to download the song, five cents to download the song while anonymously agreeing to share information with the company, or two cents to share information not anonymously. It will be worth the company chipping in the extra three cents to gain such valuable demographics." says Ron. With the right mindset, this could be the "beginning of a beautiful friendship" between consumer and company, with no legal knots to untangle. And DRM technologies can provide the mechanisms necessary to ensure the proverbial happy ending.