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This week, the French government decided to adopt a”three strikes” policy against illegal file sharers on the  Internet. Effectively, it means that if you are caught illegally sharing music, you risk a large fine and a one year Internet ban. The law is soon to be adopted in UK, and there are signs that other European countries will follow with similar laws of their own.

On one hand, government action seems reasonable. Musicians and music companies spend significant time and energy creating and promoting new music. It seems unfair that, after all this hard work, the product of their efforts is subject to a free-for-all with no obvious flow of money back to the producers. There is a parallel here with common theft.  Arguments such as “the record companies make enough money, so a free copy of my own won’t make a difference” are equally applicable in the case of shoplifting, for instance.

On the other hand the Internet is totally unsuitable for a pay-per-copy model. It’s impossible to police without draconian measures that have impacts way beyond the stated intent of preventing piracy. From the viewpoint of the file sharers, it costs the music companies nothing to distribute their songs and the products are infinitely available, so the whole meaning of theft needs to be re-assessed in this new digital environment. There is also the argument that copyright restrictions greatly limit creativity in the digital realm, although this issue applies to many physical products also.

Personally, I don’t file share. I’m happy enough to get what music I want through iTunes without resorting to BitTorrent or Limewire. Call me a traditionalist, but the idea of having thousands of illegally obtained video and music titles clogging up my hard disk space is somewhat distasteful. If I like a piece of music, I’ll buy it, and I don’t have a problem with that.  However I can also understand the argument that, with the Internet, the world has changed. I think the idea of limitations being placed on personal usage of digital products (i.e. Digital Rights Management, or DRM) repulsive. I think there are serious issues with governments and private firms monitoring our Internet usage. I’m inclined to agree that a radical re-assessment of the whole business is necessary.

With the Internet, we seem to be moving into a world of openness, rather than protection. Openness implies sharing, collaboration, continuous improvement and mass-participation. Although it’s obvious that many traditional businesses are suffering in these circumstances, it’s not obvious to me why there would be a whole-scale business implosion over time. Indeed the Internet might well create new ways of generating wealth, through, for instance, extension of brand image and mind-share leading to greater demand for performances, merchandise and premium downloads.  The examples of Radiohead and Trent Reznor certainly point to some interesting ideas in this area.

I’m interested in your thoughts on this. Is file-sharing just a polite word for stealing or is it symptomatic of a changing world order? What are your thoughts about file-sharing and why you think it’s good or bad?

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We live in a world where many people (lawyers, mainly) are gainfully employed in the business of protecting ideas and the distribution of ideas around the world. These protections, mainly trademarks, copyrights and patents, form a huge body of law known as Intellectual Property or IP. The concept is that if you come up with an idea, you can protect it from rivals, thereby giving you a chance to profit from it. Protecting your idea means that you can recoup the (often sizable) investment that you might spend on bringing that idea to fruition. Without IP, the fear is that others would steal your great ideas without putting in the hard work and you would think twice about coming up with an idea ever again. Innovation would be stifled and progress as we know it would come to a grinding halt. 

Such fear is often a load of bollocks.

In fact, there is plenty of evidence to suggest that the contrary argument is in fact the case. IP often does more to strangle innovation than it does to protect it, and in a world where everyone is talking about innovation as the key ingredient of success in the 21st Century, that’s a problem.  

Silicon Valley is probably a case in point: although there are plenty of lawyers making a tidy sum from IP issues around the Bay Area, nevertheless it’s acknowledged that protecting ideas is not that big of a deal. You join another company with my ideas today, I hire you back with their ideas tomorrow . That’s pretty much the way it goes. Things move far too fast to be worrying about court cases. The Valley’s success, it has been argued, is precisely because there is much freer movement of ideas there than elsewhere in the world.

There are now companies that exist purely to buy and hoard patents: this is a complete abuse of patent law and hugely damaging to companies that want to try new things. Patent law is so often the last refuge of the uncompetitive.

Copyright, in the digital world, is a nonsense. Digital products copy themselves easily. That’s their nature. That’s what they do. Attempts to limit this ability piss off customers and positively entice people to pursue alternatives. Even when ideas and products are shared freely it is still possible to make money. Just ask Google.

Even the world “Intellectual Property” is a bit of a misnomer in the digital world. Property implies zero sum: if I have it, you don’t. It implies constrained supply – there’s only so much to go around. But the “problem” with digital (and with ideas, generally) is that it’s unconstrained. It’s infinite. You can have as much of it as you wish, with no fears that it will run out any time soon. I give you one, I still have mine. That’s the beauty of ideas.

Today’s IP situation is a lot like the world before free trade, when countries used to impose stringent tariffs on imports to protect their native industries. Unfortunately, however, such logic hampered trade and kept people poor (because tariffs worked in reverse). It was only when protectionism was eliminated within market blocs that economies began thrive.

Reducing or even eliminating IP in certain areas would have a similar, if not even greater effect on competition and innovation. I foresee a time when IP in its current form will be dead and people will shake their heads at the lunacy and lack of vision in our era. Hopefully I’ll still be around to see it happen.

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