Categories
Industry World IP Day 2020

“Fall Seven Times and Stand Up Eight”​

As we commemorate World Intellectual Property Day, with a special focus this year on the importance of IP protection for small and medium-sized enterprises (SMEs), I’d like you to imagine you’re watching a movie.

It opens on two such businesses. The first, BackFocus Productions in Little Rock, Arkansas, was created in 2011. It’s a video production company, run by a husband-and-wife team, that makes local and national commercials. The second company is Honest Foods Catering in Chicago. Another small company, created in 1997, it has five employees, and its clients include film and television productions in the area.

Now imagine the camera rising ever higher until – with enhanced graphics – we find ourselves with a bird’s-eye view of the United States. All 50 of those states are covered in dots, over 90,000 in all. Each one represents a business – 87 percent of which are small businesses employing fewer than 10 people – that make up an industry that supports 2 million jobs in all 50 states.

These are high-quality jobs, with wages for direct industry jobs 53 percent higher than the national average. The industry contributes more than $240 billion annually to America’s GDP.

The film, television, and streaming industry is also highly competitive around the world, with $17.3 billion in exports, and $9.6 billion in trade surplus, generating a positive balance of trade in every major market in the world.

Yet for all this collective economic power, these SMEs who constitute most of our industry could not operate without the IP protections that create the market for film and television content. Piracy, particularly digital piracy, threatens their very existence every day.

 

 

For all of my professional career, working in the media sector for more than 20 years, as a former U.S. Ambassador to France, and former Assistant Secretary of State for Economic and Business Affairs, and now as Chairman and CEO of the Motion Picture Association, I have appreciated the economic significance of SMEs. They are the engines of every economy – not just in the United States but around the world. The numbers confirm this. According to the U.S. Small Business Administration, they are responsible for two out of every three new jobs created in the country. And throughout Europe, in the film and audiovisual sector, they are the economy. In 2018, out of approximately 128,000 businesses, 99.8 percent of them were SMEs.

From Boston to Berlin to Bangalore, SMEs operate in very risky and challenging environments. What enables the successful ones to survive are creativity, innovation, and tenacity. I bet that every one of them would embrace the Japanese proverb: “Fall seven times and stand up eight.”

Without IP protections, their already slim chances of success are reduced to virtually nothing. The prospect of having their ideas, or their works, products, or services stolen, and their income enjoyed by someone else, outweighs their willingness and ability to take on risk, and to make the investments and sacrifices and commitments needed.

Given the economic ravages of the pandemic, the need to protect SMEs couldn’t be more critical. The stakes are enormous for my industry and all creative industries that depend on copyright protection, including books, music, motion pictures, radio and TV broadcasting, computer software, newspapers, video games, and periodicals and journals.

The overall contribution of these industries to the U.S. economy alone is $1.5 trillion in value. And a 2019 study conducted by the EU Intellectual Property Office and the European Patent Office found that IPR-intensive industries have been on a steady increase, generating 29.2% of all jobs in the EU between 2014 and 2016, for almost 45% of EU GDP in the same period.

The dangers that piracy poses to SMEs, in large part, motivated the Motion Picture Association to work with partners to create the Alliance for Creativity and Entertainment (ACE) in 2017. As the world’s leading coalition dedicated to reducing piracy and protecting the legal marketplace for creative content, ACE works around the clock with governments and law enforcement agencies to promote and support the creativity and innovation that is absolutely essential to core copyright industries globally.

We also recently supported the USMCA [U.S.-Mexico-Canada] trade agreement, which builds on NAFTA and makes important interim steps toward modernizing copyright protections and enforcement for the digital age. By doing so, USMCA takes us much closer to the kind of robust protection we need in a modern trade treaty, putting our industry in a more competitive position.

Protecting our industry from piracy is not a war that is easily won. But it must be fought – not just for creators, but to foster the confidence and ease of mind that consumers demand, and markets rely on.

When you put the magic that we have been creating on film and TV screens for audiences for generations together with our economic contributions to the global economy, it does not overstate the case to say we are one of the world’s most precious assets. With everyone’s support, including the protections they need, BackFocus Productions, Honest Foods, and everyone working in this resiliently creative industry can enjoy profitable ‘sequels’ into the foreseeable future.

Categories
Copyright World IP Day 2020

SMEs and IP: The Biggest Challenge For Many Small Businesses—Protecting their Intellectual Property

This year the theme for World Intellectual Property (IP)Day, April 26, is “SMEs and IP”. As the World Intellectual Property Organization (WIPO) points out, SMEs (Small and Medium Sized Enterprises) are the backbone of the economy; they constitute 90 percent of the world’s businesses and employ around 50 percent of the global workforce, generating up to 40 percent of national income in many developing economies. Many micro and small businesses depend on their creativity and innovation to establish a niche for themselves in a competitive marketplace. At the same time, they often face major challenges in protecting their unique creations because they generally lack the wherewithal—knowledge, time, money—necessary to protect their IP. This has been demonstrated time and time again and is an important factor that needs to be taken into account when discussing the importance of IP to small businesses. While many national and international IP authorities focus on the lack of capability to access and incorporate IP into product development–or to properly manage IP–as the major challenges faced by SMEs, their limited ability to protect the IP they already have is also an important issue of concern.

But first what is an SME? There are various definitions of an SME; the European Commission defines a Medium Sized Enterprise as a company having less than 250 employees and an annual turnover of 50 million Euros or less (about $60 million USD), a Small Sized Enterprise as having less than 50 employees and a turnover of less than 10 million Euros and a Micro Sized Enterprise as one having less than 10 employees and an annual revenue of less than 2 million Euros. Many of the companies in this sector are micro-enterprises with just one or two people working to generate income, and indeed, the new term of art incorporates micro enterprises into the acronym as MSMEs (Micro, Small and Medium Sized Enterprises). Many micro enterprises, estimated at about one-quarter of the total, are run by women entrepreneurs and are an important vehicle for social and economic development and greater gender equity.

A few years ago I wrote a blog posting about knitting, crocheting, publishing and copyright featuring Joanne Seiff, a Winnipeg-based author and knitwear designer who was, in effect, running her own MSME. Knitting is a hobby and an industry where most of the players are women, and it is an activity that is growing, spurred on in part by the lockdowns of COVID.  The Craft Yarn Council reports that over 50 million people in the US knit or crochet. Knitters are motivated by many things and come from all regions and all age groups. Even young children can be introduced to knitting through use of creative instructional techniques such as setting knitting rhythms to nursery rhymes. While most of the participants in knitting do it a hobby to make items for family, or to raise funds for charity or just to relax, there is a business—an IP related business— behind knitting and writing about knitting. There are some big players but many who earn revenue from knitting-related activities are micro businesses. And this is where protecting IP becomes a challenge.

Knitwear designs are creative works protected by copyright. Creating, editing, distributing and selling new designs is an essential part of the industry, just as important as selling wool, needles and the other accoutrements of the trade. Unfortunately, designs are often copied and distributed, sometimes unthinkingly, as a form of unauthorized “sharing”. When I wrote my first blog on this topic back in 2016, Joanne commented that, in her experience, copyright violation in knitting and crocheting is frequently disparaged as unimportant because it is a predominantly (but not exclusively) female industry. It is seen by some as a “cottage industry” with women earning “pin money” and therefore not taken seriously.

I recently reconnected with Joanne to see how things were going in the era of COVID. She said it is still a challenging business-albeit one that she seems to really enjoy. As with any business, there is upfront investment in the hopes of hitting the jackpot with a design that takes off. She pointed out that it is time intensive to develop and make the sample for each pattern (and have it photographed, written up, tech edited, uploaded online to various sites and then marketed), with each pattern that is downloaded yielding around $5 to $10. A pattern needs to sell a lot of copies over time to break even or make money—but if just one percent of Americans who knit bought a particular pattern once and paid $10 for it, that would amount to…..$5 million! Not too shabby.

While not every micro-business is a success, any more than every multi-national enterprise is successful, there are some encouraging examples. One of these is Kate Davies Designs, a Scottish enterprise founded by Kate Davies in 2010 that has now grown into a successful small business that was named UK Microbusiness of the Year in 2016.  KDD & Co. now encompasses many different aspects of publishing, design, and creative practice related to yarn and knitting. Another is Denise Bayron’s business, Bayron Handmade, in California. Yet another is Sarah Schira, of Imagined Landscapes, in Manitoba.

When it comes theft of IP, the problem is that the more successful a pattern, the more likely it will be infringed. In Joanne’s words, there are sites in Russia and elsewhere that steal the designer’s photos, buy or steal one pattern, perhaps translate it, and then sell it online. Then there are those such as the occasional knitter who feels that if she paid for that “cute bunny knitting pattern” once, she can make dozens of the bunnies and then sell them at craft sales.  This is not technically against the law, but it goes against the intent of the designer who sells the $5 for single use only.  Some people look at the design and reverse engineer it. Human “ingenuity” has no bounds when it comes to trying to get something for “free”.  So how can micro businesses protect the IP that is the stuff and substance of their product offering.

In Joanne’s view, there has to be sufficient capital available to invest in IP protection at the beginning of the process. Shortage of capital is a perennial problem for small businesses, who have to make difficult decisions as to where to allocate scarce funds. Product design, better distribution or legal fees to protect IP? Some small businesses have enough money upfront to protect their product (through patents, copyright, registered designs, etc) and to fund the legal support to fight the battles on the business’ behalf. But unfortunately, most knitting designers (writers, artists, etc.) are never in this category.  For many people who have a very small business, there’s not enough income up front to do anything preventative from the outset.  Further, when something goes wrong, there’s not enough money to follow up properly with legal action.

It is not just pattern designers who face this dilemma. Many writers, graphic artists and musicians, as soon as they start to enjoy some sort of success, face the same challenge of monitoring infringement, chasing it down, sending notices to online sellers and distribution platforms, (usually while trying to avoid incurring legal bills by not engaging a law firm), all while trying to continue to create and produce appealing new content. This is the curse of the small or micro business and the independent artist.

If governments want to help SMEs and empower the small business sector, they need to find ways to allow small businesses to protect their IP without breaking the bank. That is the prime motivation for the passage of the CASE Act in the US (Copyright Alternative in Small-Claims Enforcement Act of 2019), which was enacted in January of this year. Once operative, it will establish an alternate form of settling copyright infringement claims (think, “small claims court” for copyright cases) to allow rights-holders to avoid the costs of litigation in a federal court. Under the CASE Act, a Copyright Claims Board will be established within the US Copyright Office. The process is voluntary (the plaintiff must choose to use the Board and the respondent must agree), statutory damages are limited to $15,000 per work or $30,000 per case and the work in question must be registered with the Copyright Office.

The CASE Act is one example. In the UK there is the Intellectual Property Enterprise Court (IPEC) which has the capacity to perform much the same function. According to IPEC, the small claims track within the court provides “a forum with simpler procedures by which the most straightforward intellectual property claims with a low financial value can be decided:

• without the need for parties to be legally represented

• without substantial pre-hearing preparation

• without the formalities of a traditional trial and

• without the parties putting themselves at risk of anything but very limited costs.”

That is the sort of facility that small businesses need, but a streamlined legal process only works when the perpetrator (or suspected perpetrator) is known. Much infringement takes place online, where perpetrators can hide their true identity. To combat this kind of infringement, both platforms (like Amazon) and governments have a role to play. My brother, a successful indie author who has published several e-books on Kindle through Amazon, discovered that one of his more successful books was being pirated (by definition, only successful books get pirated) and listed on Goodreads (owned by Amazon).   It was also a Kindle edition, with only a slight spelling change in the title. He brought it to Amazon’s attention whose response was to suggest he contact the website (which Amazon owns) and consider applying DRM (digital rights management) to the work. DRM is one solution but is easily stripped off the work. In fact, when I searched “DRM and Kindle”, the first listing on Google was “Remove the DRM from Kindle Books”. If you do decide to list your work on Amazon, the platform has a form you can submit to report infringement. How much is done about it by Amazon is another question.

Given the prevalence of online copyright infringement, any means that helps interrupt the distribution of pirated content is helpful. In this regard, various forms of site-blocking that have been instituted in a number of countries are a useful tool. (My World IP Day blog last year focused on the need to forge a global solution to the problem of global piracy by expanding site blocking). Site blocking in some countries (UK, Australia, Canada—just one case so far) is triggered only through the courts—a process which favours complainants with the means to pursue legal action, normally large companies. However, in some other countries (Portugal, Italy, Korea, for example) there is a relatively simple administrative process in place that allows rights-holders to seek a site blocking order, making it more accessible to SMEs. Site blocking orders require ISPs to block offshore web and streaming sites that promote and distribute infringing pirated content. In Canada a number of content owners tried unsuccessfully to petition for the establishment of an administrative site blocking review entity (the Independent Piracy Review Agency) operating under the oversight of the telecommunications and broadcast regulator, the CRTC, but were unsuccessful when the CRTC determined that establishment of such an agency was beyond its mandate. The problem, however, has not gone away and is now being resolved through the courts.

To come back to SMEs—they face many challenges; underfunding, difficulties in distribution, and issues related to IP, both access to innovation and protection of IP they have developed. For small businesses that require access to patented knowledge, mechanisms and concepts such as open innovation and various technical support programs offered by national governments and WIPO can help. For copyright based small businesses, the biggest IP challenge is fighting piracy with minimal available resources. The more that governments can do to facilitate enforcement action and lighten the burden on rights-holders seeking to protect and enforce their rights, the better.

As Joanne Seiff summed it up, “yes, SMEs can definitely succeed if enabled by good IP protection”. That is a big “if” and a good reminder to all concerned as we mark World IP Day.

This article was originally published in Hugh Stephens Blog.

Categories
Climate Change Interview World IP Day 2020

One Movie Settled the “Debate” About Climate Change

When I saw the theme of this year’s World IP DayInnovate for a Green Future, I will admit that it was hard not to be cynical. In light of the reinvigorated political assault on science—let alone to be thinking about climate change in the middle of a pandemic—it is tempting to believe that the debate about global warming still rages—or has even been lost. But that’s not quite true. The debate was settled a very long time ago. Or to be more precise, there is no such thing as a debate about scientific evidence, there is only understanding, misunderstanding, willful ignorance, or malignant deception.

While it is stultifying to see that a truly vindictive brand of ignorance and deception are the cornerstones of the present administration, there remains one avenue of hope for at least mitigating—because it is almost certainly too late to reverse—the effects of global warming. Oddly enough, that avenue of hope has more to do with market dynamics than environmentalism per se, and I would assert that it was a single documentary film that opened the window to a market-based transformation, which, even now, represents a path forward. I am of course talking about An Inconvenient Truth.

An unlikely movie pitch, the centerpiece of the documentary is former Vice President Al Gore presenting his climate change “slide show,” which he had developed over several years after he was first introduced to the science in college in 1966. Not long after conceding the painfully-contested presidential election in late 2000, Gore devoted himself fully to the climate issue, taking his laptop and talking points on the road, offering free admission to anyone willing to listen to him discuss the fate of the planet.

“The slides were originally black and white,” says the film’s co-producer Lawrence Bender, whom I interviewed for this article. “They weren’t visually appealing, but they were almost scarier, like something you’d see in a science lab, when we first saw Al’s presentation in Los Angeles.” Bender and others who would eventually join the production team were invited by producer Laurie David (now Lennard), who had arranged for Gore to come to L.A. after she found herself captivated by his lecture in New York in May 2004.

“Gore’s show left us with a sense of urgency about the issue,” says Bender. “We knew we had to make what we had seen into a movie, but it was not easy to convince many people in the business that it was a movie. Try telling someone you’ve got former VP Al Gore, who lost the election, doing a slide show about science, and that you need a million dollars.” Enter Jeff Skoll, who founded Participant Media in 2004 with the fortune he had made as eBay’s first employee and first president. “Jeff financed the whole production without blinking an eye,” Bender tells me.

Less than a year after that initial presentation in Los Angeles, An Inconvenient Truth was ready for the screen. It became an international blockbuster (for a doc), earning two Academy awards, one for Best Documentary Feature, the other for Best Song, “I Need to Wake Up” by Melissa Etheridge. And for any cynics, who may be tempted to criticize the movie as a vanity project—Hollywood glamor with little substantive effect—I would direct your attention back to the 1990s and early 2000s.

Waking Up Tens Of Millions

Hurricane Katrina. August 28, 2005. NASA

When the Kyoto Protocol was ratified in 1997, calling for a modest 5% reduction in greenhouse gasses by developed nations, global warming was not an especially bright blip on the public radar screen. General perception, such as it was, loosely divided along the left/right political lines that are usually drawn through environmental issues; but overall, the average citizen (and quite a few politicians in both parties) could be described as somewhere between ambivalent and unsure about the alleged causes or effects of a warming climate.*

It probably did not help that this was the same period when we all first logged onto the internet, which would prove to be a wonderful tool for obtaining information and disinformation at the same time. And to be sure, the extractive industries, and other vested interests bound to fossil fuels, were eager to provide erudite sounding counter-narratives to the mountain of evidence proving that human activity was in fact changing the climate in dangerous ways. Then, on January 24, 2006, An Inconvenient Truth debuted at the Sundance Film Festival.

Directed by Davis Gugenheim, the film’s most effective quality, in my view, was that it reintroduced the purportedly “wooden” politician Al Gore as a relatable, flesh-and blood human being, whose humor and humility rescues the didactic lecture from becoming either dry or a ninety-minute scold. Upgrading Gore’s visual aids to high-resolution slides using Apple Keynote certainly provided enough color and scope to fill the big screen, but the critical element was Gore’s humanity.

“Davis was adamant that the film had to work emotionally,” says Bender. “It’s a deceptively simple movie, but we spent a lot of energy in post-production trying to find the right balance between this man’s personal journey and the science.” By interweaving Gore’s presentation with glimpses into his life story—anecdotes in which he admits his own frailties and errors—the overall result of the film was that it turned carbon dioxide into a kitchen-table issue. And that was the significance of An Inconvenient Truth.

Seemingly overnight, as a direct result of the movie’s success, concepts like “carbon footprint” entered mainstream conversation and classroom curricula across the U.S. and abroad. While the opposition was by no means silenced, the film awakened enough public consciousness that multiple business segments suddenly needed to respond to a new consumer demand to “go green.”

Consumer Change Leads to Corporate Change

To be sure, not all business initiatives were substantive, but by and large, the mandate to promote green led to tangible and lasting changes in corporate culture and governance. Sustainability went from a crunchy, esoteric notion to a board-room best practice, and this, in turn, spawned new investment in the development of alternative and more efficient energy solutions. “Practically every Fortune 500 company has a sustainability officer or sustainability program today, and that was not true fifteen years ago,” says my longtime friend Jeff Turrentine, a writer and editor for On Earth, the publication of the Natural Resources Defense Council.

An Inconvenient Truth was not the first conversation about the economics of sustainability, and Gore was hardly alone in asserting that carbon reduction, aside from being existentially mandatory, is compatible with economic growth. Many environmental experts, technology innovators, and political leaders (even bipartisan ones) had a solid grasp on the two uncontroversial facts about carbon mitigation: 1) that burning less fuel saves money and is, therefore, profitable; and 2) that green innovation represented a whole new sector of untapped economic opportunity.

That conversation was already taking place in various pockets in the both the public and private sectors for at least a decade or more before An Inconvenient Truth was released. But the film gets credit for igniting those latent sensibilities in the minds of the general public and for spawning the aforementioned consumer demand for change. The movie was catalytic in fostering market conditions in which multiple industries and municipalities discovered what many environmentalists had tried to explain for years—that working to reduce greenhouse gas emissions happens to be good for business.

So, while the Trump administration has arrogantly stumbled backwards on environmental policy—evangelizing climate science denialism out of sheer spite—the green investments made by both the private and public sectors over the last decade and a half are unlikely to be reversed—especially when those investments are yielding positive returns. It is still not enough, but it is most likely where the best hope still remains. And perhaps there is no better example of this paradigm than the city of Georgetown, Texas, featured in An Inconvenient Sequel: Truth to Power (2016).

Mayor Dale Ross proudly tells Gore, on camera, that his city is powered by 90% renewable energy (at the time of filming), despite being “the reddest city in the reddest county in Texas.” Why? Because, to paraphrase Ross, it saves his constituents money, and because you don’t need to be a scientist to understand that less pollution in the air is a good thing. This is why I will argue that An Inconvenient Truth went beyond merely “raising awareness.” It directly created a public mandate that led to the kind of common sense approach taken by Ross, who reminds us that there is nothing “conservative” about waste or higher prices.

The countless market effects that can be attributed to a single film—in which the information was neither new nor hard to grasp—remind us that creative expression is essential. In a time when IP deniers argue that copyright functions solely as a barrier to information, the story of An Inconvenient Truth belies the naïve, tech-utopian assumption that access to information alone is sufficient—least of all when utter nonsense gallops across digital platforms like a fifth horse of the apocalypse. Facts alone do not speak meaningfully to people. Invariably, it takes creativity to inspire us, even when it comes to saving our own lives.


*It must be acknowledged that the climate issue had Republican champions in those days, and there is an extent to which Gore, as the most prominent messenger, became a more attractive political target after the 2008 election, when the GOP became more dependent on the fossil fuel industries.

Photos: “Al Gore” Lisbon, 2017. By G Holland.

“Earthrise” Apollo 8, December 24, 1968. NASA.

Featured image courtesy Markus Spiske via Unsplash

This article was originally published in The Illusion Of More.