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Wednesday, December 21, 2011

The Christmas Season and IP

I stopped by's website on Tuesday night (December 20) to get a feel for the top sellers in various categories. What's unavoidable when taking in all of the top-scoring gifts that are moving this Christmas shopping season is the importance of intellectual property in each case.

The top seller in the book category on Amazon was the recent biography Steve Jobs by Walter Isaacson. Not only does this top tome obviously speak to the importance of copyright in providing incentives for writers to produce works - whether read as a traditional paper book or as an ebook - but the subject of the book speaks to the critical role that IP plays in innovation.

The late Steve Jobs, cofounder of Apple and leading technology innovator, understood the importance of protecting intellectual property. In the biography, Isaacson reported:

"At this point Jobs could have decided simply to indulge piracy. Free music meant more valuable iPods. Yet because he really liked music, and the artists who made it, he was opposed to what he saw as the theft of creative products. As he later told me:

"‘From the earliest days at Apple, I realized that we thrived when we created intellectual property. If people copied or stole our software, we'd be out of business. If it weren't protected, there'd be no incentive for us to make new software or product designs. If protection of intellectual property begins to disappear, creative companies will disappear or never get started. But there's a simpler reason: It's wrong to steal. It hurts other people. And it hurts your character.'

"He knew, however, that the best way to stop piracy - in fact the only way - was to offer an alternative that was more attractive than the brain-dead services that music companies were concocting."

Jobs, of course, was spot on in his assessment. And it not applies to the music industry - which many say Jobs and iTunes saved - but to all industries in the twenty-first century.

Think about other areas on the website. The top-selling video games were "Just Dance 3" created by UBI Soft for the Nintendo Wii, Xbox 360 and PlayStation 3; "Kinect Sports Season Two" by Microsoft for Xbox 360; "Dance Central 2 by Microsoft for Xbox 360; and "Call of Duty: Modern Warfare 3" by Activision Publishing for Xbox 360. What would be the state gaming without IP protections for both the hardware and software? Obviously, stagnant compared to what's available to players today.

As for Movies and TV, the top sellers were a film called "The Help," and the next three were all about Harry Potter - "Harry Potter and the Deathly Hallows, Part 1," "Harry Potter and the Deathly Hallows, Part 2," and "Harry Potter: The Complete 8-Film Collection."

Harry Potter provides another powerful example of what creators are capable of accomplishing under a regime of protecting intellectual property rights. Author J.K Rowlings produces a series of masterful books that appeal to children and adults, and Hollywood then takes those books and does a generally good job of bringing those tales to the big screen. Without solid IP protections, Rowlings might still have written her tales - though that's doubtful when one hears her personal story - but they would have had limited distribution, as no one would have made the investments needed to bring the stories to millions of readers and moviegoers around the globe.

Creativity, innovation, and production, especially in a knowledge-based economy, are all about the foundation of protecting IP. This is especially critical for entrepreneurs and innovators, where the growth of their enterprises and success rests upon a framework and culture that honors IP.


Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His new book is "Chuck" vs. the Business World: Business Tips on TV.

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