Pro­tect­ing in­tel­lec­tual prop­erty theft

Enterprise - - World view -

Of all the ma­jor chal­lenges faced by global trade and gov­er­nance, safe­guard­ing in­tel­lec­tual prop­erty rights re­mains the big­gest. For in­stance, an es­ti­mated po­ten­tial ad­van­tage by soft­ware pi­rates is worth bil­lions of dol­lars in yearly rev­enues from il­le­gal copies. Microsoft claims that in­tel­lec­tual prop­erty theft only in China costs it about $25 bil­lion.

More­over, in the wake of Sony’s re­cent largest on­line data breach, the com­pany had to shut down some in­ter­net ser­vices in Canada, Thai­land and In­done­sia af­ter de­tect­ing unau­tho­rized in­tru­sions.

In­trud­ers stole the names and e-mail ad­dresses of about 2,000 cus­tomers at Sony Eric­s­son Mo­bile Com­mu­ni­ca­tions AB’s Cana­dian web­site, while a site in Thai­land may have been mod­i­fied to help send fraud­u­lent e-mails. Sony Corp. also sus­pended a site in In­done­sia be­cause of a sus­pected at­tack and found Web codes for the Ja­panese mu­sic unit stolen. Sony failed to con­tain the sit­u­a­tion as its PlayS­ta­tion Net­work was crip­pled, caus­ing the com­pany a loss of around $171 mil­lion.

The is­sue of in­tel­lec­tual prop­erty theft be­comes crit­i­cal for the cor­po­rate lead­ers of de­vel­oped economies who need to re­dou­ble their ef­forts at go­ing af­ter the rapidly grow­ing op­por­tu­ni­ties in emerg­ing mar­kets of Asia.

Be it Bos­ton, Bei­jing or Ban­ga­lore, coun­ter­feit­ers, pi­rates and IP scofflaws haunt most of the multi­na­tional busi­nesses. Move­ment of peo­ple and ex­change of knowl­edge across or­ga­ni­za­tions is a defin­ing fea­ture of ev­ery vi­brant eco­nomic sys­tem. There­fore, it is be­ing re­garded as in­evitable to avoid in­vol­un­tary IP leak­age. Still, gov­ern­ments and cor­po­ra­tions are try­ing to fig­ure out how to slow down in­vol­un­tary leak­age so that ac­cu­mu­lat­ing new IPs at a faster pace than the loss be­comes pos­si­ble. At­tempts are be­ing made to fo­cus on three goals in this re­gard: curb­ing the mo­ti­va­tion for IP theft, re­duc­ing oth­ers’ abil­ity to steal IPs and min­i­miz­ing resid­ual dam­age from the IP leak­age that does oc­cur.

The e-G8 Sum­mit, hosted by France, de­liv­ered a sim­i­lar com­mit­ment from the world’s lead­ing economies on the pro­tec­tion of in­tel­lec­tual prop­erty rights. The sum­mit ap­peared to be one of the strong­est stances taken against the prob­lem of IP theft.

Un­der the over­ar­ch­ing theme of ‘Ac­cel­er­at­ing Growth,’ the sum­mit car­ried three big themes for the ses­sions and work­shops: the in­ter­net busi­ness in gen­eral and dis­rup­tive tech­nolo­gies in par­tic­u­lar, the in­ter­net and hu­man rights (given what is go­ing on in the Mid­dle East), and in­ter­net and pri­vacy.

Re­port­edly, French Pres­i­dent Sarkozy came up with the sum­mit’s agenda that so­cial net­works are acting as the cul­tural ner­vous sys­tems of the new cen­tury civ­i­liza­tion. The prob­lem is they are be­ing cre­ated and gov­erned by com­mer­cial in­ter­ests, not by their con­stituents. Sarkozy was of the view that if com­mer­cial so­cial net­works truly be­come the fab­ric of the new so­ci­eties, they will be­come pri­va­tized and con­trolled by com­mer­cial in­ter­ests and not by elected gov­ern­ments. Ac­cord­ing to him, the new global re­source of the in­ter­net needs to be pro­tected and reg­u­lated to be of greater ben­e­fit.

How­ever, in­dus­try rep­re­sen­ta­tives en­coun­tered these state­ments with strik­ingly op­pos­ing views over in­ter­net reg­u­la­tion. For in­stance, Mark Zucker­berg, the en­tre­pre­neur and cre­ator of the so­cial net­work Face­book, with nearly 500 mil­lion users around the world, said “Peo­ple tell me on the one hand ‘it is great you played such a big role in the Arab spring, but it is also kind of scary be­cause you en­able all this shar­ing and col­lect in­for­ma­tion on peo­ple’,” adding fur­ther, “But it’s hard to have one with­out the other .... You can­not iso­late some things you like about the In­ter­net and con­trol other things that you do not like.”

Sim­i­larly, Google Inc. Ex­ec­u­tive Chair­man, Eric Sch­midt warned that gov­ern­ment in­ter­ven­tion could slow the in­ter­net’s de­vel­op­ment, “Tech­nol­ogy will move faster than gov­ern­ments, so do not leg­is­late be­fore you un­der­stand the con­se­quences.”

Thus, the out­come high­lighted the dif­fi­culty of find­ing a way to reg­u­late the In­ter­net that is ac­cept­able to both gov­ern­ments and in­dus­try. How­ever, the G8 ap­peared to han­dle the in­tel­lec­tual prop­erty rights is­sue head on, as the dec­la­ra­tions passed by the fol­low-up sum­mit en­sure ef­fec­tive ac­tion against vi­o­la­tions of in­tel­lec­tual prop­erty rights in the dig­i­tal arena. Dec­la­ra­tions also in­clude ac­tions that ad­dress present and fu­ture in­fringe­ments. They also high­light the en­cour­age­ment and pro­tec­tion of in­no­va­tion and the need to have na­tional laws and frame­works for im­proved law en­force­ment.

As the is­sue of in­tel­lec­tual prop­erty rights is in­creas­ingly emerg­ing in the po­lit­i­cal and eco­nomic agenda of global fo­rums, the in­creas­ing ex­change of di­a­logue and col­lab­o­ra­tions will pro­duce work­able so­lu­tions for pro­tect­ing cor­po­ra­tions of the dig­i­tal era

Mark Zucker­berg

Eric Sch­midt

Ni­co­las Sarkozy

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