The Right To Profit From Your Ideas

Everything is Intellectual Property

All around you it’s there.  Physical objects, systems, organizations, processes, buildings, machines – all manifested from ideas.  And the originators of these ideas are blessed with profits, security, fame, glory, awards and a golden retirement.

That’s the ideal at least.  For those who create things that are less than concrete, it gets tricky.

I was reading this morning’s NY Times and came across this article about inventors and auctions. The main focus of the article was about the difficulties of the little guys to compete with the big guns.  Sounds just like the music business!  There was also brief mention of a new company called Rational Patent Exchange.

“The long-term vision at Rational is to become a marketplace or clearinghouse, perhaps the way ASCAP is for copyrighted music, collecting fees and distributing payments to artists.” says Randy Komisar, a partner at venture capitalist firm Kleiner Perkins Caufield & Byers.

Whoa.  That’s a big idea. The article also talks about how big guns can also buy up competing patents as a defensive mechanism.  This too sounds familiar –  like the Hollywood producers who option a screenplay and  shelve it for years so they can bring out their own pet project that bears an eerily similar plot to yours!

“The goal is to be a place where the patent-holder is fairly compensated [hmm, just like the music biz?] but the corporate users have access to technology with minimal transaction costs.  It has the potential to make innovation more efficient and less risky for both sides.”

I’m all for innovation and friction-less commerce and heartily applaud this idea.  In fact, I would love to see this idea applied elsewhere as well.  How about visual designs?  Logos?  Animations?  But here’s the caveat.   The concentration of power in a new organization may not actually help ALL the “little guys.”

Even though composers/ writers have 3 performing rights organizations in the USA (ASCAP, BMI & SESAC), collecting performance royalties and distributing them to its members – how this done is far from transparent.  In any organization there’s a concentration of power at the top and the “members”  have very little say over how much or how little their royalties should be.  How any clearinghouse organization distributes its funds needs to be transparent.  For example, commercial soundtrack composers, have little or no representation even though our music is used for television commercials, web spots and more.  In my experience as a BMI member, I have to jump through multiple layers of bureaucracy to ensure I get paid for performance royalties on music composed specifically for use in a commercial.  There are many that just give up.  And yet, the clearinghouse organizations go out and routinely collect multi-million dollar fees for blanket usage of ALL the music in their catalogs.  They’re supposedly looking out for their members, but try calling any of these organizations unless you already have a hit record.  At ASCAP, I’ve heard that the pay-rate on underscore is much less than for music with lyrics.  Why would that make sense if the organizations licensing the music pay one blanket rate?

I’m not asking for a government bureaucracy, but some kind of decency/moral standards?  As we continue to move to a society of “knowledge workers” (thanks Peter Drucker)  intellectual property is  increasingly what we ALL do.