Old economy vs new economy – a battle between Canadian business coalitions.

An article by Kathleen Lau for ComputerWorld Canada (29 May 2008) documents that launching of the Canadian Intellectual Property Council (CIPC). The CIPC is made up of 14 Canadian businesses from a variety of industries including Microsoft Canada, Cisco Systems Canada, eBay Canada, and Pfizer Canada. This council was created in part to oppose the Business Coalition for Balanced Copyright (BCBC) which includes organizations like Google, YaHoo Canada, the Retail Council of Canada, the Canadian Association of Internet Providers (as well as a number of phone, cable, and broadcast undertaking companies and associations). The BCBC released their position paper in February and called for a balanced approach to copyright. The CIPC, in contrast, is calling for changes to the law to privilege a very specific subset of businesses using a subset of business models.

The article included a quote from me talking about what roll knowledge plays in the post-industrial economy: “Knowledge either plays the role of machines and therefore it should be cheap and pervasive, or knowledge plays the role of products in which case it should be scarce and expensive.”

This is a variation of what I asked in my first submission to the Canadian Government in 2001 when I asked if we were to have A new economy, or a new product for the old economy? This is a very pervasive problem in this area of policy, and treating knowledge as an industrial-era product can even be seen in younger politicians such as US presidential contender Barack Obama.

The CIPC is promoting the idea that knowledge should be seen as a product, and is pushing laws which would privilege that subset of business models which simply add knowledge to the industrial-era business models. The claim is often that these laws are there to stop “theft” (see: Jefferson Debate), but the actual outcome is to privilege these business models which would otherwise have to compete with more modern business models.

If it isn’t obvious, I’ll state it clearly. I do not believe that “stronger” patent, copyright and trademark laws are a protection for innovation. These laws to innovation are like water to humans: too little and you dehydrate and die, too much and you drown and die. What I believe “stronger” laws do is protect incumbent businesses from innovation. Whether a given change in the law promotes or deters innovation should be a subject of adequate public peer reviewed study, not an ass-u-me.

Some people recognize that business methods can themselves be innovative, but even there we have backward-facing thinking with some businesses promoting patents on business methods. This is not innovative thinking to believe that all innovative thinking should be forced backward into the industrial economy.

I believe the best way to understand this dynamic is to look at one of the themes in the series of book by Clayton M. Christensen that started with “The Innovators Dilemma”. The idea is that incumbent businesses in a given market are the least able to make the large innovative steps. The incumbents don’t want to risk disrupting their existing market, with large innovative steps nearly always disrupting existing markets.

Unfortunately, our politicians seem to have a blind spot about the Innovators Dilemma. They often look to the companies that were most successful in the past to learn about what policies to promote in the future. This means that in their attempt to promote an innovation agenda they are getting advise from the organizations who are least interested in innovation through transformative changes in the marketplace. While governments should be providing the tools to support both the incumbents and the innovators, they instead provide anti-competitive tools to support the incumbents against the innovators.

The Canadian government must recognize that during our transition out of the Industrial economy we will have both Industrial-era thinking companies and new-economy companies. We must move away from this mindset of thinking that knowledge should be forced into the Industrial economy. Otherwise we will quickly become irrelevant in the global economy.

Kathleen Lau and I ended our conversation by talking about the Anti-Counterfeiting Trade Agreement. This agreement, and the controversy around it, has little to do with Counterfeiting at all. We also spoke about the largely secretive Intellectual Property Caucus of the Canadian House of Commons which seems to be a group of sitting Members of Parliament that act as a lobby group for the incumbent business interests.

Counterfeiting and trademark infringement are very different types of problems than copyright and patent infringement. Counterfeiting is an offence against someone acquiring a product or service, with a deception about the origins or nature of what they are acquiring. Trademark law has its origins in similar consumer protection to enable consumers to be able to tell from various marks used in trade as to the origins and nature of what they were acquiring.

Copyright and patent infringement, in contrast, are an offence against the exclusive rights holder. Revisions which “strengthen” these laws can not legitimately be confused with consumer protection, especially since what is all too often promoted (such as the 1996 WIPO treaties) are very anti-consumer in nature.

The merging of anti-counterfeiting, trademark, copyright and patent policy together is a deliberate Orwellian abuse of peoples confusion about these laws. It seeks to leverage the support that consumers (and thus most citizens) have for laws which protect them in order to make changes to different laws which in the end harm them.

P.S. I hope to see people at the GOSLING 6-year anniversary tomorrow.

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