In the UK, a government appointed independent study has reviewed the same problem. It is called the “Digital Copyright Exchange feasibility study”, and you can find the report here.

Below is my first analysis. I will look at three questions: 1) Does the report stay within the boundaries of current copyright, or can it think outside the box? 2) Does it address the real issues? 3) Does it provide useful answers?

Staying within (part of) the box

The report, unfortunately, refuses to question any of the basic premises of the copyright system. It never asks the question if the copyright system is fit for purpose. Rather, the report clearly states it stays within the current boundaries of copyright.

That is a great pity. We know that the current copyright system fails badly in the digital universe. To assume that this is due to the technicality of the digital system only, as the report seems to do, shows that the report sits completely “within the box” of the current system. Nowhere does it ask serious questions, or addresses the totally out-of-time premises of the 150-year old copyright system.

The authors of the report have worked closely together with the current content-distributing industry – and it shows. All kinds of statements as to why people do things are accepted without the slightest criticism.

As a result, the report stays firmly within the box of the old content-distributors; the record companies, the film distributors, etc. Their business models are never questioned, nor the basic question whether copyright law, and the resources of the state, including criminal law, should be used to protect a particular business model, based on a particular understanding of technology.

At the same time, the report turns a massive blind eye to the most relevant developments in areas that are covered by copyright, and where huge new activities online have sprung up, but outside the classical content distributors’ channels.

The report completely ignores the explosion of new content that has become available on the Internet outside classical channels. Music is no longer distributed by record companies, but by artists. Books are self-published. Etc. But nothing in the report seems to think this emerging group of authors need to be involved in any way in either analysis or solutions proposed.

In doing so, the report makes the classic mistake of thinking that the old content distribution business actually represents the creative industry (or is still a significant part thereof). To give but an example: the music industry is much, much more than the record companies. It involves such people like the actual musicians. But the report completely ignores this dichotomy, which, in the marketplace, is becoming ever more relevant.

Also, there’s pretty much nothing on relevant new developments on the crossroads of technology, content, and intellectual property.

Creative Commons is mentioned once, in a small example.

There is no mention at all of User Generated Content – a key trend that is sweeping away traditional understandings of copyright. To think that parents who film their children’s birthday party and want to mash it up online with other content, are interested in purchasing licenses to “happy birthday to you” song or other content, that right holders can then randomly withhold, is simply foolish in the extreme.

To think that “voluntary industry practices” will affect the explosion of users who will want to use, re-use, imitate, copy and apply all other kinds of functionality to content, is, quite simply, 20^th century thinking.

But it’s worse.

Not a word about other key industries that also depend on copyright.

Not a word about software. Not a word about functionality in the Internet. Nothing on Apps. Nothing on Open Source. Nothing on Big Data. Nothing on the Cloud. Nothing on hacking, open standards, the public domain. Where’s the analysis of Pinterest? Where’s the analysis on machine-generated content?

The report is, from this perspective, breathtakingly shortsighted.

It deals with a subset of a subset of issues, and extrapolates those into “digital copyright exchange”.

So, from the beginning, the issue of scope of this report presents a very serious problem to its usefulness or credibility.

What are the real issues of copyright in the digital age?

The report never seriously analyses any of the relevant questions as to why copyright is struggling so much in the digital world. There are some fleeting references as to why people might be “pirating” or why they might want to use peer-to-peer services, but there is no attempt at serious analysis.

Reasons or explanations advanced by the old content distribution industry such as the record companies or film distributors are accepted without even the appearance of critical thought.

The simple observation that business models based on creating artificial scarcity in a world where technical reproduction has become ubiquitous are untenable appears nowhere.

The report blandly accepts that copyright holders must be able to refuse to license their content. Then it goes on to validate the statement from the content industry that the lack of content cannot be a valid reason for piracy.

The consequences for the credibility of the report are, of course, disastrous.

If you don’t make a proper analysis of a problem and its causes, how could you possibly come up with a relevant or credible solution?

Are the answers useful?

And yet. There is one observation in the report that is valuable. It is the observation about the enormous importance of data.

This is a good and valid observation. The problem it points to is simple: who owns what, and how can anyone know who owns what?

As I have explained earlier, a mandatory digital registration system is the only workable solution to this problem.

The report recognizes the question, and does suggest, maybe, some kind of voluntary registration, but does not want to go very far in its solution. It calls effectively upon the old industry to voluntary put its systems on a comparable footing and start swapping data or make them inter-usable between systems.

Unfortunately, here, the report suffers from the same extreme short-sightedness.

Setting up a common database of copyright-held content is actually not difficult or expensive anymore. Technically, it has been possible for more than 15 years – in fact, pretty much since the invention of the Internet itself.

The problem is, of course, the old content industry. They wouldn’t be seen dead doing this – and they have consistently refused to use the technology available, in order to create simple and transparent data about who owns what.

Don’t forget that all new developments in both technology and business models in content (music, films, books,…) over the last twenty years have come from outside the traditional industry. This is true both for the negative impact, where the old business models are being destroyed, as for the positive impact, where new business models arise or new technology develops quickly.

For the report now to call upon that same old, failed, industry to do what they have consistently refused to do over the last two decades, is, it must be said, a very sad result indeed.

Conclusion

The report limits itself to an ever decreasing part of the market. It does not perform any meaningfull analysis of the causes of the problem it wants to resolve. Its solutions are re-hashed statements of intent that  the old content distribution industry has consistently failed to live up to, by that same old content distribution industry.

It is a missed opportunity, and a waste of effort and money.

The follow-up will fail, and its recommendations will not be implemented.

I’ve recently learned what a Zettabyte is. As Wikipedia explains, it’s a unit of information (data), equal to 1,000,000,000,000,000,000,000 bytes.

EMC has calculated that, in the year 2011, humanity and its machines have created 1.8 zettabytes of information. That’s more data than created in the whole of human history until the end of 2009 included (roughly 150,000 years), and more than three times what was estimated to be in the Internet in 2009.

So, we are drowning in the data we are creating. Massive amounts of it. And every year, the amount of data created grows. By 2020, the amount we create will have gone up by a factor 50, and we’ll have to learn what a Yottabyte is (remember, you read it here first – Wikipedia does not even mention the name of 1,000 Yottabytes). This is a huge challenge for businesses – where will they find the people and the tools to deal with them, and how should they behave?

So how will all those data impact Intellectual Property Rights (IPRs)?

IPRs create an artificial scarcity. They give their holders the right to prevent other people from manufacturing or distributing certain products or services.

Classic IP theory states that the increased pricing resulting from this artificial scarcity is necessary in order to promote innovation and creativity, because the free market, with its inherent right to copy, would not allow for sufficient reward to obtain the required level of innovation and creativity.

However, the scarcity created by IP rights is a scarcity that is created by a legal instrument (the IP right). And in order for such IP right to work, that legal instrument needs to be enforceable in a cost-efficient manner.

One of the things that the Napster and Pirate Bay stories are teaching us, is that enforcement of IP rights does not work very well downwards the value chain. Put simply, it’s not cost-efficient to sue your customers, especially if you have a lot of them, to enforce an IP right; it’s only cost-efficient to sue your competitors, and then only if there aren’t too many of those.

So what happens with business models that are based on charging for legally created artificial scarcity, in a world that generates several Zettabytes of data per year?

Will IPRs spread, and cover more and more of those data, or will IPRs become like little atolls in an ever rising ocean of data?

Let’s look at some practical issues that arise out of Big Data and affect IPRs.

First, there’s the issue with patents, patent quality and prior art.

Between 1985 and 2010, the number of patents granted worldwide has risen from slightly less than 400,000 to more than 900,000.

That’s an increase by more than 125% over one generation (25 years).

Data grows that much in about two (2) years.

So let’s be very clear: even if the USPTO, EPO, JPO, SIPO and tutti quanti would increase their budgets significantly, and start hiring every other engineer, it just doesn’t make sense. There is no way the combined forces of patent offices of this world can avoid the evolution that they will become, in terms of the amount of information they treat, quite insignificant.

But that is not their only problem.

Not only is it impossible for them to keep patenting significant, it is also impossible for them to keep patenting useful.

As we have seen repeatedly over the last 15 years (effectively since the number of patents, particularly in the US, has started to grow much more strongly compared to before), is that the quality of patents has gone down.

Some recent court cases have brought additional evidence in this respect – even in patent trigger-happy Texas, the land of the patent troll, courts are rejecting patents that are obviously non-novel or obvious.

This is important, because you can only get a patent on an invention that is novel, and that is non-obvious to someone who knows the technology.

To me, it is clear that patent offices will be increasingly unable to verify whether something is novel and non-obvious, because the amount of information to check is simply too large.

In patent terms: the chance that there is prior art is likely to grow to above 99%.

As a result, it seems unavoidable that the quality of patents will continue to decline. In the end, this will start to seriously affect society’s tolerance for the enforcement of patents. If they protect “inventions” that are not novel or that are pretty obvious, patents will become even more a roadblock to innovation than they already are, and society will start to refuse the draconian remedies and powers currently granted to patent holders.

So, yes, Big Data stands a good chance of killing patents.

Second, there’s copyright.

Copyright has the advantage of arising without registration, so the capacity bottleneck of a registration office does not, in theory, restrict its application.

But let’s have a look at what happened with MegaUpload recently.

The fileshare website was shut down, because it was used also (allegedly mainly) for “piracy”, which is selling content to which the sellers had no exclusive rights or licenses.

But immediately after the FBI shut the site down, a cry arose from all those people who had used MegaUpload in the same way you use Dropbox or another file-sharing site. Some of them are suing the FBI, and class-action lawyers are happy to comply.

In effect, MegaUpload was part of the Cloud. Remember the Cloud? It’s the future of technology and IT.

With the huge generation of data that is occurring at the moment, the percentage of those data that is covered by copyright AND that a distributor wants to control (think of music distributors or Hollywood) will shrink every year vis-à-vis the amount of data that is either outside copyright, or where no-one is interested in harvesting a royalty or enforcing a distribution monopoly. Or does anyone seriously think that all that User Generated Content will be policed on the basis of copyright?

The moment sites that are also offering peer-to-peer are becoming too important because of their Cloud function, the potential to shut them down because they also effectively commit or allow piracy, will disappear.

It’s economics, really. If the value of unprotected data is significantly larger than the value of protected data, the protection becomes largely unenforceable.

So yes, Big Data will probably kill IPRs. And there’s not much patent holders or content distributors can do about it – their scarcity is simply drowning.

Of course, they can try legislation like SOPA or PIPA – but I don’t think it’s a coincidence that this legislation was killed as a result of two conflicting businesses – and it’s clear which one is growing faster. It’s the one that won this time, and will most likely continue to win.

Finally, a short word on Trade Secrets. While technically not an IPR (although some might contest that), it is hard to see how they can remain relevant, when, in that ocean of data, businesses are making more money by disclosing and sharing data, than by keeping them secret. When 80% of innovation is open innovation (and growing), the idea that it is possible to classify all those data, and make sure that the confidential ones are not disclosed, is rather fanciful.

Trademarks will stay, and probably increase their value – but that’s another story for another day.

But there’s more: Content is also struggling, because there is simply too much of it.

The combination of a data flood of biblical proportions with exploding possibility of function, will drown any business model based simply on charging for content.

Business and investors should realize this, and adapt accordingly.

A number of recent events have shown that the conflict between Function (Silicon Valley) and Content (Hollywood) is clearly heating up.

The successful actions against the proposed PIPA and SOPA legislation may well have arisen a new political player in the murky field of lobbying: the social Internet. The political implications are in my view much more important than the issue of copyright – but it is no coincidence that this new phenomenon of not just collecting political funding or votes, but actually determining the political agenda through the Internet and social media, has first arisen around the issues where the Internet and social media cause most havoc: the disruptive effect on 20^th century business models. Expect ACTA to be the next battleground.

At the same time, the US government shuts down the Megaupload site, and manages to convince New Zealand to arrest, in New Zealand, a German national for reasons of copyright infringement in the US. Depending on your political view, the alleged actions are massive theft (Hollywood) or exposing the inefficiency of a distribution monopoly (Silicon Valley). Either way, it remains remarkable that criminal law is used to this extent in order to protect a business model.

More interestingly in the long term, of course, is that within hours, useful alternatives to Megaupload were available. In other words, the policing is obviously failing. My personal view is that this is because criminalizing normal human behavior like sharing what you like just does not work.

Finally, we see that more and more economic studies start to look at empirical evidence, to verify if the basic theory of IP rights, which claims that imposing a monopoly in order to rectify the inefficiency of the market to sufficiently reward innovation and creativity, is actually correct.

How to make sense of it all?

As I wrote earlier, I think the main conflict is between Content (music, film, etc – symbolized by Hollywood) and Function (what we can do with our computers – symbolized by Silicon Valley).

I think Function is most likely set to win, because it evolves faster, and adapts better. Darwinian logic tends to be merciless.

Regardless of mine or your preferences, the observation remains that technology is destroying the possibility to efficiently enforce IP rights, whose function it is to restrict the right to copy. The music industry has still not understood that fighting peer-to-peer copying (and hence piracy) is utterly useless. The argument that this causes economic damage because, as the middleman, they stand out to lose quickly falls apart once you take a good look at it. It is no coincidence that, while the revenue and jobs of the music industry fall, the income and distribution potential of the creators (the musicians) rise.

And Hollywood is obviously next on this slippery slope down the abyss of non-revenue just for Content – neatly illustrated by the fact that Amazon sells 20% of its books at a price of 0.01$, while and still making a small profit, on shipping and availability.

But there is more.

The amount of data produced in our world is exploding. In 2009, more data was created in one year, than in the entire history of humanity until 2008.

And most of that data is still created by humans, not by machines. Expect that to change – the era of data creation has just started, and the speed of data creation will continue to go up.

To put that into perspective: humanity exists for about 150,000 years. In the last two of those, we have produced 9 times as much data as in the whole period before.

Now, under the theory of copyright and other IP rights, all of that data, to the extent there is an expression of human creativity in it, is subject to a distribution monopoly of its creator.

That’s just plain ridiculous. It can never work.

All of those data are creating a biblical flood of massive proportion, drowning out all payable content.

And the turning point is user generated content – which is almost always derivative work. Not only will be it be impossible to stop it, it is actively supported and offered pretty much for free by an ever growing number of technology firms (Silicon Valley).

From an IP perspective, user generated content is a new, hybrid animal.

It typically uses partly automated creation (outside copyright), partly genuinely user generated content (those holiday pictures you took, within copyright, but your own), and partly existing works (that song you put in the background – someone elses copyright). Throw in some user generated functionality, and it becomes clear that most what is created will include elements of copyright and other IP rights, but those IP rights will become utterly unenforceable.

So, not only are IP rights losing the race to keep track with the development of technology, they are also drowning in a sea of newly created content.

How should we react?

Certainly not in the way the old content distribution business is reacting. The idea that distribution monopolies based on copyright will continue to provide a superior return to a business, and allow for margin based on the mere action of distributing, is effectively dead.

Legislating against this phenomenon is as useful as legislating to modify the value of the number pi.

In practice, this means that businesses will have to adapt their business models.

If Content is an important part of the value proposition, it needs a lot more than just the distribution ability in order to become a viable business. Such additional features can be services,  analytics, or intelligence, or indeed technological function.

But selling content, by itself, is probably no longer a viable business proposition.

In other words: Hollywood loses, and Silicon Valley wins. But that is not necessarily bad for the economy as a whole.

This has a profound effect on Business Models based on IP rights.

The SOPA discussion is a good example of the fight between Function and Content – which IP right will win?

 What is Content, what is Function?

Content is the stuff you access and use when you deal with media. A book (the writing, not the physical object) is content.

Other examples of content are music, blogs, film, video, etc. You get the picture (pictures are also content).

Function is what you do with it. Playing a video, copying a song, reading a book, modifying or analyzing data, uploading your photos, etc, etc. are all Functions.

Traditionally, Content and Function are clearly separated. A publishing press produces copies of a book, but the relationship to the content of that book is minimal.

When you scroll through a website reading articles, you don’t perform functions on it that modify or manipulate the content other than storing a copy in the cache memory of your computer, and displaying a view.

So, Content and Function are quite different. You don’t need Content to run e.g. Word or Excel on your computer, but you use their Functions to create such Content.

But that is starting to change. Content and Function are starting to merge – their separation wall is slowly disintegrating.

What does that mean?

Look e.g. at Software as a Service providers. The content they store (the data) is typically only accessible through the functions provided on the website.

If you were able to download the data, and apply the functions on your own computer, that wouldn’t matter. But that is often not the case. You can only get access to the data (the content) through the functions made available in the integrated service.

Any change to either content or data modifies the value of that integrated service to you. If the provider gives you a new analytical tool, the value of your data actually changes, without the data themselves having changed.

And if either the function or the content of the integrated service is unavailable, the other is also useless.

So, the Cloud is breaking down the distinction between Content and Function.

But not only the Cloud. Look at e.g. newspaper Apps on a mobile device. These are software programs, but with functions specifically geared towards specific content. You could not use the Washington Post App to apply functions (e.g. view, post, forward, share) to content from the New York Times website or App.

Content and Function are bundled, they are offered together, and they become the same product or service.

With the rise of User Generated Content, this will massively increase. Look e.g. at www.tabletquiz.com, a website that allows you to easily generate your own App with your own content. In other words, it is User Generated Content and Function (UGCF).

Since it is made in HTML5, it is also platform-neutral, and can run on any environment.

This means that it becomes effectively impossible to apply any kind of Content control system from the outside, because the technology is too open, and too accessible, allowing users to generate not only Content, but also the Function to distribute or reproduce the Content.

So why should I care?

From a business perspective, this has the potential to be quite significant.

This is because Content and Function are typically sold in a very different business model, based on different IP rights.

In a digital world, IP rights are an essential part of the go-to-market strategy. Businesses offer licenses, rights to use, and access to service. These are all based on IP rights.

Content is typically protected by copyright. But Function is not. To the extent function is protected by an IP right, it is protected through the secrecy of software source code (in theory enforceable through copyright, but in practice it is the non-disclosure of the source code that does the trick), or through patents on software.

But what will happen when Content and Function are starting to merge? Which IP right will prevail, and, more importantly, which IP right will the right one for businesses to apply?

In essence, this can go two ways. Function IP rights can prevail, or Content IP rights can prevail.

If Function IP rights prevail, then the merger of Function and Content will lead to looser protection on Content. This has already partly happened as a result of e.g. the fact that technology allows much cheaper copying (Napster and the file-sharing revolution, in other words).  In this scenario, the relative freedom of copying a Function will impact the Content interconnected with the Function, making effective protection of Content very difficult, if not impossible.

Under this scenario, any attempt for a DRM (Digital Rights Management) system is effectively doomed.

If Content IP rights prevail, then the merger of Function and Content will lead to stricter protection on Function. In such a scenario, Content will be used to restrict the function applicable to it.

Currently, I see a movement in favor of Function prevailing over Content. But it clear that anti-piracy initiatives are trying to roll back this tide of free Function liberating Content from its copyright protection. The fact that Content-based industries (“Hollywood”) are having a fight over SOPA with technology-based industries (“Silicon Valley”) is a normal consequence of the merger of Content with Function.

In this battle, of course, Function has one advantage that may well be decisive: it is based on evolving technology, and as we have seen from the continued success of Open Source, technology that is based on openness seems to outcompete closed technology. While this seems inconsistent with the paradigm’s of traditional IP theory, it does seem to indicate that Function may well prevail.

What is certain, in any case, is that this evolution confirms my earlier observations about our current IP rights (especially copyright, but also others) being quite out of date, and not fit for purpose in a digital, connected world, based on collaboration, open innovation and sharing of Content.

The key point I made was that Open Innovation benefits greatly from properly functioning Intellectual Property Rights.

My particular focus was on copyright, which I believe is broken up to the point that it currently prevents or hinders Open Innovation, and is becoming an impediment to creativity and innovation.

The first observation is that the copyright system is quite broken. We have established a system of “thought crime” reminiscent of George Orwell’s “1984” in our failed efforts to prevent copyright infringement.

When I reproduce a copyright-protected picture (say, a drawing of Tintin) with the intent to develop my own business, I’m liable to imprisonment of between 3 months and 3 years, and a fine of up to € 100,000. And if I repeat that thought crime, those numbers can double.

So why are we doing this? Why are we locking away the product of our collective innovation and creativity behind the bars of a thought crime system? Why is it illegal to use someone else’s content, depending on the purpose for which you use it?

The answer is actually quite absurd, specifically when applied to 95% of all copyrighted material (which includes my earlier example of a Tintin drawing): the reason is to promote the creativity of authors. Now, Hergé, the creator of Tintin, unfortunately passed away in 1983. So how does threatening me with a jail sentence of up to six years in 2011 promote Hergé’s creativity?

And it gets more absurd after that, because, while it is clear that the copyright infringement criminalization has no moral or logical justification, it also simply does not work.

The music industry provides a good example: its revenues have dropped of a cliff, and there is no prospect of recovery. The same forces are at work for film, video games and e-books.

So, we have a draconian system of thought crime, that is illogical and unjustified, and does not work in practice.

And that is not a good situation, at many levels, including the principle of respect for the rule of law.

But most importantly for this blog, we need a properly functioning copyright system. It would be of great benefit to systems like Open Innovation – any collaborative system greatly benefits from clear rules about who owns what, who can do what, as well as the general acceptance of such rules. That is currently, patently, not the case for copyright.

So, copyright is broke, and needs fixing.

In order to know how we can fix it, we first need to understand why it is broken.

Is it broken because of piracy? I don’t think so. The “pirates” are the messengers, showing by their behavior that copyright is broken. They didn’t break it, they just show us it’s broken.

Moreover, pointing the finger at other people’s “bad behavior” has very little credibility when it comes to analyzing why something doesn’t work. It’s an intellectually lazy attitude, and almost always misses the key points.

“If only other people would change their behavior…” No, it’s just not sufficient as an explanation.

I think the key elements in understanding why copyright is broken, can be found in its origin.

Copyright, as we still know it today, was created by the Berne Convention on the protection of literary and artistic work. The first signed version of that Convention dates from 1886. That’s 125 years ago.

To give an idea, that’s the year in which a Mr. Benz in Germany was granted his first patent on an automobile car, when the Spanish Empire abolished slavery in its Cuban colony, when Coca-Cola first came onto the market, and when the first linotype printing press was invented, paving the way for cheap mass publication of newspapers.

And that far away origin is, in my view, still responsible for the major flaws we see in today’s copyright system. I will highlight what I think are the five most important ones.

First, copyright assumes that innovation and creativity are individual, singular activities. It’s what the lawyers call “a clean room environment” in which innovation takes place. Unaffected by any other information or influence. Except, of course, it doesn’t exist.

No-one works in a vacuum, no-one invents or creates from scratch. The Beatles, among the greatest song-writers of the 20^th century, always clearly acknowledged they were “stealing”, as they themselves called it. It wasn’t really stealing of course; it was sharing, and acknowledging the truth.

Certainly in an Open Innovation environment, the concept that the default system are single individuals coming up with these brilliant ideas that need individualized protection, is quite simply inappropriate, and unfit for purpose. We need to recognize the inherent multi-layered and composite character of any innovation or creativity. “Standing on the shoulders of giants”, what we see all around us, should be our guiding principle, rather than the lone (mad?) genius, a figment of our collective imagination.

The second flaw is that copyright focuses on the author, and not on the work itself. It’s one of the reasons why its duration is measured in years after the death of the author, rather by reference to the work itself. That simply does not make sense in today’s world. Moreover, it is one of the key reasons why most of the 20^th century’s creative production is locked away behind the bars of what is called “orphan works”. Works we know or suspect are under copyright, but not quite sure for how long, or who could release them. All of this to “promote creativity”, indeed.

The third flaw is that copyright assumes that technology is static and more or less irrelevant. While already challengeable in 1886, when mass media were invented, it is definitely an absurd assumption today.

Without that assumption, Napster would never have had the impact it actually had, and we would not be plagued by the ridiculous situation that, whenever technology changes, content “owners” expect consumers to pay again for something they already purchased. Anyone who still has a collection of vinyl records, or who saw a Blue Ray version of a DVD they already own, knows exactly what I’m talking about.

Not only peer-to-peer networks, but also developments like machine-generated content (e.g. sports articles) or software written by other software, which fall outside copyright, are clearly challenging the static nature of copyright. Technology does affect copyright, and the way it is created. The Berne Convention does not state explicitly that copyright is the result of “human” creativity – but it clearly implies it. At the time, no non-human creativity was envisaged, though.

The fourth and fifth flaws are connected. The Berne convention assumes that copying is expensive and that distribution channels can be controlled. This is clearly no longer the case, as any person working in Digital Rights Management will confirm, and we should abandon these illusionary concepts.

So, what does this all mean? Is there a solution?

The analysis above is not complete, of course, and there are other issues that play.

Moreover, it is unlikely that any solution would be complete, or enable us to have a system that answers to the needs of all involved.

Copyright is at the crossroads of different, sometimes competing and conflicting interests.

As a society, we should try to and choose the option that benefits the most and damages the least, taken as a whole, and without undue consideration of private interests over and above those of society as a whole.

I think there’s one beginning of a solution that would tackle most of the flaws exposed. Moreover, it would also clearly be of benefit to any system of Open Innovation, or any other collaborative activity that involves copyright.

Every solution must be based on the principle that registration becomes a necessary condition for copyright to exist.

Registration is key.

It clearly identifies the work, and the author. It avoids discussions on who owns what. It creates clarity. It allows for unclaimed work to fall in the public domain, where it can be re-used for the benefit of society as a whole.

In today’s world, where we upload all of our virtual personalities into social media, it must be possible to organize a free or very cheap system of registration for any work that claims copyright.

If you don’t register, it means it’s not important enough to attract copyright. But the current system, which automatically confers a worldwide exclusive monopolistic right on anything anyone creates, until 70 years or more after the author’s dead, is clearly passed its sell-by date.

The registration solution addresses each of the flaws mentioned above. Not necessarily comprehensively or completely, but it does provide for a start of a solution to all of them.

Because, if we want IPRs, and copyrights, to support and enable Open Innovation, we should not only ensure that we can trust each other, but also that we can verify who owns what.

“Trust, but verify” – never thought I would quote Ronald Reagan in a blog on IPRs. But I do agree with him on this.

The Court of Appeal of Antwerp, Belgium’s second city, ruled on a request to block access to the Pirate Bay website on 26^th September 2011. Many people have reported this decision and have commented on it.

However, don’t try to find the decision online on any official government or court website. It isn’t available. For those of you who are interested, I’m posting a downloadable copy BAF-TPB-Telenet-Belgacom-Antwerpen-arrest.

When I wanted to obtain a copy to blog about it, I rang the clerk of the court’s office, to request a pdf copy, because I had been unable to locate the decision online.

The woman who picked up the phone informed me, very friendly and efficiently, that no court rulings are made public online, except for some specific ones, selected on a completely random and unpredictable basis by each specific court chamber president.

No emails can be sent or received, because they are “not equipped” to deal with them. Oh, and most people who work in the courts don’t have Internet access.

This is in the country where the capital of the European Union is located, in the second decade of the 21^st century.

You wouldn’t make it up – but this is the sad reality of Belgium’s court system. No use of technology, no transparency, no accountability.

It does make one wonder about the credentials of independence and impartiality of a justice system that does not provide any information to its funder, the taxpaying public.

And of course, the issue goes much further. Court cases decide daily on interpretation of matters such as tax law, commercial law, and other rules of engagement of, among other things, the economy and trade. Not providing this essential information in real time effectively delays and prohibits the value of the court systems’ function to be absorbed by society. It is very obvious that this costs business a lot of money, because information that should be freely available, is now charged at a premium, because of the inefficiency of the public sector.

How did I manage to get a copy? By email, from a lawyer I know, who got it through email as well.

As one would expect, such use of information technology do not bode well for the possibility that this same court system would understand the finer details of technology, downloading, peer-to-peer networks, and their effect on copyright and freedom of speech.

So, as to the decision itself. My appreciation is that the blogs and articles mildly laughing at the decision for seeming technically illiterate (banning the use of “www.thepiratebay.org”, but not the use of “thepiratebay.org”) are not quite correct: the Court seems to know what it’s doing in terms of the technical irrelevance of its decision.

A number of aspects are interesting. The first is that the Court seems to imply that, because the measure it imposes is technically irrelevant and easily circumvented, the measure meets the proportionality requirement. That seems a rather bizarre way of addressing the proportionality requirement.

The second is that the Court seems strangely unconcerned about the fact that the measure would also block the sharing of material that is not under copyright, in the public domain, or under licenses that allow sharing, such as e.g. creative commons. The reasoning used is similarly bizar: users would be able to share those through other means than the Pirate Bay – in other words, because the measure is inefficient in blocking “piracy”, it doesn’t matter very much that it also prohibits (partially) sharing of material under freedom of speech.

The third is that the Court does not address the issue of censorship at all – which is a great pity. The balance between freedom of speech and copyright is a core issue at the heart of this discussion – and the Court refuses to take it into consideration, other than stating that copyright is a fundamental right (which, if confirmed, would be a rather revolutionary statement), and that no other fundamental rights are affected by its decision to – on purpose inefficiently – block access to a website.

It seems here that the Court is having its cake and eating it too. It allows in principle that websites enabling users to swap material, part of which may be copyright-infringing (but without the copyright owner or its assignee having any duty to establish they have such copyright and that there is actual infringement, and not fair use or other allowed use), and part of which may not be copyright-infringing, can be blocked in general. But since such blockage is – on purpose – not made very efficient, it is not really an issue for censorship or free speech.

Again, you wouldn’t make it up.

On the other hand, if appealed, it would make for some interesting debate. It would be a great pity if issues such as whether copyright is promoted from a limited monopoly to a fundamental right are treated as obiter by a rather incompetent Court of Appeal.

But there is more: Facebook has asked trademark owners to register their trademark with Facebook. What does that mean? Can Facebook grant trademark protection? How will Facebook decide between competing claims? Is Facebook creating a new, privatized form of “Facebook-Mark”, the “ⒻⓂ”? Does Facebook recognize geographic boundaries? Many questions are open, and you will not find many answers on the Facebook website. Trust me, I tried.

Similar things happen elsewhere. On the website www.myheureka.com, you are invited to post your ideas, and then they are “protected”.

They are not actually protected, of course, but the site owners would like to put the government office of patent and trademarks out of work.

Interestingly, the site offers to protect “ideas”, which are never protected under existing IPRs.

The creative designers have been at it too: www.creativebarcode.com allows you to register your work, and embeds a digital code, so that the work can be traced to the original creator. Members can buy a digital protection system for their work, before they share it with others.

So what we see before us are attempts at privatizing and spreading IPRs.  I will call such privatized IPRs “Pirate IPRs”.

Is that a good idea, and could it work?

To see if it’s a good idea, we should take a look at the original purpose of IPRs.

All existing formal IPRs have a specific function. An Intellectual Property Right is a government created right to restrict other people’s behavior. An IPR-holder obtains from the government a limited, specific monopoly, subject to specific limitations and conditions.

The features of that monopoly, such as its duration, and which behavior it targets, depend on the trade-off that is created with it.

Each IPR has, or is supposed to have, a trade-off, in that the monopoly, which is generally considered bad economic policy, is accepted in order to obtain a more important benefit for society.

For patents, that benefit is the disclosure of the secrets of the new invention. In theory, you can only obtain a patent if you disclose to others how they can copy your invention. So it’s a trade-off. You publish the secret, and get government protection in return.

But there are limits. It’s only for 20  years, it’s limited to a country, and it only protects the bits that are truly innovative and essential about your invention, the so-called patent claims.

Similar reasoning, but with other trade-offs, exists for other IPRs. As a result, their characteristics and conditions are different. Copyright lasts a lot longer, trademarks need to be used effectively to have protection, etc.

The general trade-off for IPRs as a concept, is that they need to be structured in such a way that they promote and encourage innovation, and cause the economy as a whole to be more innovative, and increase productivity.

So does privatizing a system like this make sense?

In order to answer that question, we have to simply ask: “Where’s the trade-off?”

And here’s the catch: I haven’t found it yet. This privatization of IPRs is based on the concept “I own my ideas”. But that concept is fundamentally wrong.

Ideas are free. They always have been. Freedom of ideas is not only an essential part of the freedom of speech in a democratic society, but the right to copy is also a fundamental principle of the free-market economy. IPRs and exclusive rights to specific expressions of an idea are exceptions to the general rule of freedom of enterprise.

It is also clear that any privatized system of IPR will cause everyone to want to own as much as possible, with a protection as wide as possible. Pirate IPRs would then start to cover anything and everything, and everyone would want to have a monopoly as wide as possible.

So it looks like privatisation of IPRs is actually a pretty crazy idea. It will not promote innovation, it will slow it down. If not properly resisted, it may seriously harm innovation.

Luckily, it can’t work.

“Old” IPRs only exist because governments enforce them. When you download a song without paying for it, you are actually a criminal. You’re in good company, because more than 95% of all downloads is “illegal”. Just as well our law enforcement system doesn’t actually prosecute in this field, or there would be more people in jail than outside.

Already today, we see that enforcing IPRs is difficult and costly. Only deep pocket IPR holders actually go after infringers, and the few court cases we see in the area of illegal copying sometimes look more like advertisements for the Napsters of this world.

And although large companies from time to time have a go at each other on the basis of their patent portfolios, a neutral observer might mistake this for an elaborate mating dance, where each side means to impress the other, before they sit down and get to business.

As the cost of copying continues to drop, the return on investment on IPR litigation also drops.

Moreover, Pirate IPRs will not necessarily be granted the strong legal weapons available to government-created IPRs. Higher costs and lower efficiency may be hurdles too high to cross for Pirate IPRs.

Other phenomena are threatening Pirate IPRs, together with real IPRs. The declining cost of copying is set to spread to hardware production once additive manufacturing has become mainstream. Open source and creative commons approaches are likely to spread to many more elements of society, together with the increased importance of Information Technology. And finally, when the contribution of artificial intelligence overtakes the human component in innovation, and most “ideas” are generated by a Turing machine, it will probably become, in practice, impossible to own ideas.

What certainly seems to be true today, is that the idea of Pirate IPRs, if not a good one or workable one, is, at the moment, not protected or protectable. Ironic, in a way.