Owning the World of Ideas

Intellectual Property and Global Network Capitalism

Matthew David, Debora Halbert, Author

• Publisher: SAGE Publications Ltd
• Year: 2015
• Print ISBN: 9781473915763
• eBook ISBN: 9781473927568
• Edition: 1
• Topic: Social Sciences
• Subtopic: Media Studies
• Index: Social Sciences

Formally, ownership of ideas is legally impossible, and can never be globally secured. Yet, in very real and significant ways these limits have been undone. In principle, ideas cannot be owned, yet, undoing the distinction between ideas and tangible manifestations, the distinction which underpins the principle, allows the principle to hold even whilst its meaning is hollowed out.

Post-Cold War global network capitalism is premised upon regulatory structures designed to enforce deregulation in global markets and production, but at the same time to enforce global regulation of property and intellectual property in particular. However, this roll-out has not been without resistance and limitations. Globalization, the affordances of digital networks, and contradiction within capitalism itself - between private property and free markets - promote and undo global IP expansion.

In this book David and Halbert map the rise of global IP protectionism, debunk the key justifications given for IPRs, dismiss the arguments put forward for global extension and harmonization; and suggest that roll-back, suspension, and even simply the bi-passing of IP in practice offer better solutions for promoting innovation and meeting human needs.

1 Key Concepts and Why They Matter So Much Today

Intellectual property (IP) has a history bound up with the rise of capitalism. Intellectual property rights (IPRs) extend monopoly control over a range of immaterial things, thereby excluding competition and maintaining or increasing profits for the rights holder. In recent decades neo-liberal policies have deregulated labour markets while strengthening IPRs regulation globally. Physical production costs have fallen while value added from IP has risen. Market forces are used to discipline labour, but monopolies have developed to protect property and in particular IP. By using IPRs to halt competition, prohibitions against ‘legal’ market entry (illegal or pirate market entry may still be available) lead to super-profits (profits in excess of what a competitive market would afford). This situation makes IP infringement increasingly attractive and in some cases the only opportunity for economic participation.

The formation of today’s global network society was not simply the liberation of culture, politics and economics from the ‘dead hand’ of state regulation, whether in the form of western Keynesianism or in the form of the former Soviet Union and its satellites. The post-Cold War construction of today’s global world has involved a very particular combination of regulation and deregulation and is not a ‘natural’ consequence of the end of history or the triumph of the free-market. The establishment of the World Trade Organization (WTO) and its first act, the creation of the Agreement on Trade Related Aspects of Intellectual Property (TRIPS), set up a very particular ratchet that has been neo-liberal globalization’s governing principle ever since – on the one hand, the increased global regulation of IPRs and, on the other, the further global deregulation of labour.

This book seeks to trace this ratchet through the myriad types of IP, the construction of the concept of IP itself and how the global ownership of IP may shape our future lives. We will investigate the role of global IPRs in staking out ownership over the world of ideas. The rise of the global network society, a concept developed by Manuel Castells, has been accompanied by an equal rise in the significance of IPRs as a core set of regulatory principles governing human interaction and inequality in a world where information flows through and beyond traditional boundaries and formal borders. Yet, it would be a mistake to believe that the rise of a network society, where technology makes possible both global connectedness and large-scale automation of what was once the greater part of human labour, inevitably led to the greater economic valuation of ‘ideas’ relative to ‘physical labour’. This has been a path chosen, and yet one that has been challenged and which is not set in stone. In this chapter we lay out the basics of IP, what the concept entails and how the paradoxes of a capitalist IP system shape the global flow of ideas.

Global Network Capitalism and the Triple Paradox of IP

In today’s global network capitalism, IP has become more fundamental than ever for three reasons – the enhanced globalization, digitalization and capitalization of the world – themselves the three key elements in today’s global network capitalism. However, each of these elements is contradictory to the point of being paradoxical – at least in terms of the significance of IP. Through all three of these processes, IP is becoming more significant than ever, yet in all three dimensions IP is more seriously hard to control, and is therefore more vulnerable, than it has ever been before.

The Paradox of Globalization for IP: The Transnational Firm, Outsourcing and Global Supply Networks

The neo-liberal form of today’s global network capitalism promotes what Robert Frank and Philip Cook (1996) call a ‘winner takes all’ economy. Regulation to protect property is combined with deregulation to increase competition between workers. The roll-out of global property protection is particularly focused upon enforcement of IPRs beyond borders. This has fuelled the growth of global IP monopoly holding firms (the world bestriding transnational corporations – TNCs). These companies have ruthlessly outsourced manufacturing across the planet to reduce labour and regulation costs. While production is moved elsewhere to be done by others, TNCs still claim the right to own the finished product and, in the case of IP-protected goods, the right to be the only ones allowed to sell such products. As such, global deregulation of production and regulation of IP offers TNCs the best of both worlds, minimizing costs while at the same time maximizing profits by retaining control and excluding competition. A handbag designed in London, for example, can now be manufactured in and shipped from China at a labour cost only a tiny fraction of the price the trademark-branded object can then command back in London (or even in China itself). The same cost reduction and global distribution works for medicine, auto parts, cigarettes and clothing.

Nonetheless, the creation of global trade and production networks challenges the ability of IP-rich TNCs to fully control that which they claim to own. Outsourcing might reduce cost and legal liability, but it also makes it harder to control the release of unauthorized extra copies being made and circulated outside the control of the commissioning corporation. Reduced border controls on manufactured goods and the containerization of transportation also increase the scope for such overproduction to circulate as widely as authorized products. Foreign direct and indirect investment linked to reducing costs and/or outsourcing production also lead to the transfer of IP-rich technology that is then reverse-engineered and reproduced illicitly around the world. Global flows of technical labour also transfer valuable knowledge beyond IP control.

While IP evasion is most evident in the copyright field, where file-sharing software allows digital copies of content to be freely circulated more efficiently than either IP holders or commercial pirates can match (see next section), global supply networks enable making and purchase of generic drugs, counterfeit branded goods and even seeds, beyond corporate IP holder control.

Thus, IP’s first paradox is that while global trade and production capabilities extend the scope of TNCs to reduce costs and expand markets in ideas, at the same time global supply networks afford alternative global connections that evade IP controls.

The Paradox of Digital Networks for IP: Networks of Control Versus the Empowered Network Individual

What Manuel Castells (2000a) calls the rise of the network society combines a technical mode of development with a continued capitalist mode of production. Cold War arms spending, state welfare expansion, automated manufacturing and international corporate trade expansion (noted above) all fuelled the rise of network computing, but digital networks have themselves come to drive forward change in new directions. As Castells (2009, 86) notes, the creation of a global digital network media architecture, the collapse of the Soviet Union (and the subsequent roll-out of a totalizing capitalist globalization), as well as a new global framework for trade and IP (the WTO and its first-born TRIPS), all came together in the formation of today’s global network capitalism. International trade, itself a prior driver of network development, is also boosted today by the ability not just to coordinate trade globally but to distribute production via digital networks. Digital production, coordination and distribution reduce costs and expand markets. The reduction of costs is at its most extreme in the realm of pure digital goods (software, music, film, television, etc.), but the same market networks for digital goods also intensify the control revolution in the production and distribution of patented, trademarked and other IP-protected goods.

The scale of cost reduction and market expansion afforded by the new digital networks is staggering, but it has an Achilles’ heel for the globalized economic system. Just as the perfect profit storm afforded by global digital networks first hit the music industry in the 1980s with the advent of the CD, so it was the music industry that first felt the full force of free digital online file-sharing in the late 1990s (David 2010, 2013). The challenge to IP posed by small-scale actors right down to the level of networked individual consumers has been enhanced and globalized. The rising threat of individual consumers has led to a shift in law towards the prosecution of individuals for IP infringement. Such individualization is a radical departure. In the past the threat of infringement came from commercial actors capable of making the physical objects required to use IP content, not the fans, consumers and end-users of that content. Today’s IP infringement has been disintermediated. For example, a computer user can copy any amount of copyright-rich content without the need to press records or manufacture video cassettes, etc. The development of 3D printers (see Rifkin 2014) means that the same globalization of individual agency will soon enable internet users to start downloading trademark fashions, patented drugs and industrial design objects just as they already download or stream music, film television and software.

The network mode of development is not reducible to network capitalism. Legal monopolies have been redrafted and bolstered. However, their technical circumvention continues to outmanoeuvre all such attempts to clamp down. What started in music now encompasses the whole cultural sector and beyond. The second paradox of IP is that while digital content is formally protected for sale worldwide, digitization also makes content freely available to everyone everywhere.

The Paradox of Capitalism for IP: Property Versus Markets

The most counterintuitive paradox of IP within today’s global network capitalism is one within the supposed essential character of capitalism itself, its synthesis of private property and free-markets. It may be assumed that property rights and free-markets are essentially compatible bedfellows within capitalism. If one person is to sell another person a loaf of bread, it must be assumed it is the first person’s to sell, and that the second had no right to take it without paying. Property is a necessary condition for market exchange. However, IPRs extend a conception of property (one that will be examined in more detail as this book progresses) beyond any particular object to the right to make copies of that object (and in the case of IPRs – intangible object). This creates monopolies in the provision of those objects protected, prohibiting competition (market entry) and hence enabling higher prices. The extension of property rights over the copying of intangible goods is therefore antithetical to the existence of free-markets, and limits have almost always been placed upon IPRs accordingly. However, in recent years, such limits have been reduced, increasing the significance of the paradox of capitalism in relation to IPRs – strong IP suspends markets in the interests of protecting property.

Colin Crouch (2011, 7) notes the distinction between ‘ordo-liberalism’ (anti-trust regulation of mergers to prevent competition leading to the suspension of markets such as when dominant players buy up smaller ones and hence create monopoly conditions) and ‘neo-liberalism’ (which defends private property even to the extent that unregulated competition allows dominant competitors to buy up and/or drive out weaker rivals and hence suspend real market conditions). Ordo-liberalism requires authorities to break up monopolies to preserve free-markets (such as when the US National Football League introduced the ‘draft’ system to ensure that successful teams in earlier seasons did not monopolize all the good players in the following seasons – perpetuating success but reducing the excitement of the competition). In contrast ‘neo-liberalism’ promotes – and has been promoted by – the growth of powerful TNCs. Neo-liberal policies have allowed for the elimination of competition by TNCs, promoting their monopoly position with powerful extensions of IP to reduce competition further and, as such, prioritizing property over markets for powerful actors even as deregulated labour markets are used to further discipline non-property owners.

Today’s global network capitalism has adopted the neo-liberal pathway. However, there is a catch. IP protection promotes ‘pirate’ markets and anti-capitalist sharing. IP monopolies inflate prices and so encourage a pirate capitalism which functions as a shadow-market providing consumers with access to IP-protected products at more affordable prices. IPRs also encourage forms of ‘anti-capitalist’ sharing, which infringes IPRs not for profit but simply to access use-values without their sublimation under exchange-value. Thus, the third paradox is that while IP is necessary to maintain scarcity and hence a ‘market’ at least in the sense of ideas being sold at all, IP monopolies suspend the free-market itself to defend property rights, but in so doing encourage piracy and sharing alternatives.

The Significance of IP in a Global Network World

Global tensions regarding the protection, sharing and use of those things covered by IP laws abound. Take, for example, recent concerns over patenting genes. While not the first of its kind, Myriad Genetics’ 1994 and 1995 patents on genes linked to breast cancer were a global legal victory that exemplified the extension of IP from protecting inventions of novel, useful and new things to also protecting the ‘discovery’ of natural and already existing processes. While the patents were issued in 1994/5, a 2013 US Supreme Court decision revoked Myriad’s BRCA gene patents (but not the cDNA patents), thus marking a momentary retreat from the extension of IP ownership over the ‘natural’ world (Barraclough 2013). However, even as Myriad lost its battle to own the BRCA gene, multiple other living organisms and genetic sequences remain patented and thus controlled via IP laws (Leong 2014).

A second example concerns copyright. The 1998 US Digital Millennium Copyright Act, which signed into domestic US law the conditions of the WTO’s TRIPS treaty, criminalized the creation and use of any technology that could be used to violate copyright. This anti-circumvention legislation targets those technologies that have the capacity to unlock the digital rights management associated with control of music, open e-books so that blind readers can have access to the text and offer methods for users to more freely use their devices. While the full impact of anti-circumvention laws has been tempered by ‘dual use’, ‘fair use’ and/or ‘fair dealing’ rulings which create ‘safe harbours’ and space for expression, again, IP lobbyists are pressing hard to extend, widen and deepen protections and further contain what they claim to be unauthorized use of culture.

Globally, not all countries have adopted the same attitude towards IP protection. Brazil’s 2014 legalization of ‘generic’ medicines challenges the global expansion of transnational pharmaceutical companies’ IP claims. In the face of resistance, treaties like the highly secretive Transatlantic Trade and Investment Partnership (TTIP) between the US and EU, and Trans-Pacific Partnership (TPP) between the US and East Asia seek to bind states into upholding the IPRs of transnational firms, rights that cover a diversity of products from medicines, seeds, designer goods, music, books, computer programs and much more. Such transnational treaties, negotiated in secret with the interests of industry in clear sight, are designed to bypass resistance to the expansion of IP, even if not always successfully. Resistance to IP efforts to establish monopoly controls via transnational agreements remain globally significant. These resistances in the name of citizen rights and access to such things as affordable health care, education; the right to participate in cultural life and to freedom of expression present a different global approach to development concerns.

These tensions are at the heart of a world in which information as property has become central to the global political economy. The global flow of goods – accompanied by the abstraction of property rights so that IP coverage is increasingly extended as the distinctions between ‘ideas’, ‘tangible expressions’ and ‘physical carriers’ is diminished, and even more importantly the right to reproduce, innovate upon or copy these objects – makes essential a global debate over the scope and limitation of IPRs in a free society and culture.

What are IPR’s?

IP is a social contract, a legal protection extended by society to the holder(s) of such rights. This protection affords the holder certain privileges when it comes to using and/or selling access to use. IP protection, therefore, constitutes a limitation on use by others such that the IPR holder has some degree of monopoly control over that to which the rights pertain. The duration of such monopoly controls varied greatly historically and between different forms of IP. The extent of control has also varied between states. Recent attempts to ‘harmonize’ such differences between national IP regimes have highlighted the significance of IP today as well as the significance of the drivers that have pushed for such a global regime (Halbert...

Table of contents

• Cover
• Half Title
• Publisher Note
• Title Page
• Copyright Page
• Acknowledgements
• Acknowledgements
• Contents
• About the Authors
• Preface
• Acknowledgements
• List of Abbreviations
• Illustration List
• 1 Key Concepts and Why They Matter So Much Today
• 2 Origins, History and Globalization of Intellectual Property
• 3 Copyright Controversies Today
• 4 Patents and Traditional Knowledge
• 5 Trademark, Designs and Identifiers in Question
• 6 Conclusions and Paradoxes
• References
• Index