Trump Administration Releases Annual IP Report to Congress

The White House U.S. Intellectual Property Enforcement Coordinator has released its Annual Intellectual Property Report (Report) to Congress (around 170 pages!).  The Report outlines the Trump Administration’s approach to intellectual property policy and provides information concerning the activity of the various agencies in the U.S. government with duties related to intellectual property.  The bulk of the Report includes appendices which are descriptions of the work of each agency concerning intellectual property over the last year or so. 

The general thrust of the Trump Administration’s approach to intellectual property is stated by a President Trump quote:

“We will safeguard the copyrights, patents, trademarks, trade secrets, and other intellectual property that is so vital to our security and to our prosperity. We will uphold our values, we will defend our workers, and we will protect the innovations, creations, and inventions that power our magnificent country.” 

The Report outlines the Administration’s four-part strategic approach, which includes: 

• engagement with our trading partners; • effective use of all our legal authorities, including our trade tools; • expanded law enforcement action and cooperation, and • engagement and partnership with the private sector and other stakeholders.

Under the first strategic approach, the Report outlines various initiatives and activities across different agencies to engage and educate trading partners, including the USPTO’s Global Intellectual Property Academy.  Under the second strategic approach, the Report notes that the Trump Administration will strengthen the Committee on Foreign Investment in the United States as well as utilize the WTO Dispute Settlement process.  On the third strategic approach, the Report notes:

 At the end of FY 2017, the FBI had 228 pending IPR investigations. The largest number of investigations deal with the theft of trade secrets (79), copyright infringement (79),31 and trademark infringement (64).32 During FY 2017, the FBI initiated 44 new investigations, made 31 arrests, got 23 convictions, and had seizures totaling $750,205, forfeitures totaling $86,949, restitution totaling $53,396,003, and FIRE (Frozen, Indicted, Restrained, Encumbered) totaling $750,000. 

In FY 2017, the number of CBP and HSI IPR seizures increased more than eight percent, to 34,143 (from 31,560 in FY 2016). The total estimated Manufacturer’s Suggested Retail Price (MSRP) of the seized goods, had they been genuine, was $1,206,382,219.

In FY 2017, ICE-HSI initiated 713 intellectual property investigations and had 457 arrests, 288 indictments, and 240 convictions.

In FY 2017, the IPR Center vetted 27,856 investigative leads; of these 16,030 were referred to law enforcement partners. Additionally, the IPR center de-conflicted 4,750 investigative targets for partner agencies and industry. While performing these de-conflictions, the IPR Center identified 321 situations where two or more entities were investigating the same target. Finally, the IPR Center referred 959 leads to private industry for follow-up.  . . .

U.S. law enforcement and Federal agencies participated in Operation Pangea X, which was conducted from August 19, 2017 to September 19, 2017, with the participation of 123 countries, and culminated with a week of action, where participating countries and agencies conducted and/or reported the results of their respective operations. U.S. and Mexican authorities typically participate in Pangea independent of each other. However, in FY 2017, ICE-HSI, CBP, and Mexico collaborated during the U.S. operational phase of this operation. On September 25, 2017, INTERPOL issued a press release highlighting the results of Operation Pangea X, which resulted in 3,584 websites taken off-line, 400 arrests worldwide, and the seizure of 470,000 packages with an estimated value of $51 million in potentially dangerous medicine.

The IPR Center’s Operation Apothecary addresses, analyzes, and attacks potential vulnerabilities in the entry process that might allow for the Internet-facilitated smuggling of commercial quantities of counterfeit, unapproved, and/or adulterated drugs through international mail facilities, express courier hubs, and land borders. During FY 2017, Operation Apothecary resulted in 59 new cases, 38 arrests, 37 indictments, and 41 convictions, as well as 567 seizure incidents of counterfeit items.

On standard setting, the Report notes:

Standards Setting: Many of America’s economic competitors engage strategically in standards setting organizations (SSOs), often to the detriment of American innovators. As the Administration and American industry engage with SSOs, it will be important to ensure that SSOs are being used fairly to promote the adoption of new technologies, rather than impeding the ability for American innovators to continue creating and inventing.  And as SSOs promote the adoption of new technologies, such technologies should be available to industry under fair, reasonable and non-discriminatory terms.

Revisiting the fall of Kodak: are we any smarter about the "what" and "why"?

Four or so years ago, perhaps the most poignant story of a technology leader gone bad was the fall of Kodak. The saga played out on several levels: Kodak versus Fuji, traditional film versus digital technologies, the free-standing camera device versus the embedded camera in a smartphone, and the rise and fall of the value of Kodak's patent portfolio. Much was written about these issues at the time, including by this blogger, but as the several years have passed, the Kodak tale has gradually receded from hi-tech discourse.

Scott Anthony, a frequent contributor to Harvard Business Review on-line, has sought to revisit the Kodak tale in a piece published last month, “Kodak’s Downfall Wasn’t About Technology”. The focus: how did Kodak fail the move from film to digital to cellular? He suggests but rejects the following arguments:

1.The company was so much into the traditional film business that it missed seeing the digital revolution—Anthony says this is wrong, because it was Kodak itself that developed the first prototype of a digital camera, back in 1975.

2. Kodak did not invest in the digital camera business—Anthony claims that not only was the company involved early on in the invention of the digital, but it invested billions to develop digital cameras, albeit with little success.

3. Kodak mismanaged its investment in digital cameras—Yes, Anthony says, the company stumbled a bit at the beginning, but it ultimately developed elegant technologies that enabled one to move from the camera to the computer.

4, Kodak’s big miss was not seeing the move to the smartphone and the role of picture-sharing in social media—Not exactly, says Anthony. In fact, Kodak acquired a photo sharing site—Ofoto—in 2001, but it sought to leverage Ofoto to encourage customers to print more digital images, rather than to focus on file-sharing.

Having raised and shot down all these explanations, how does Anthony explain why Kodak stumbled so badly? He writes:

“The right lessons from Kodak are subtle. Companies often see the disruptive forces affecting their industry. They frequently divert sufficient resources to participate in emerging markets. Their failure is usually an inability to truly embrace the new business models the disruptive change opens up. Kodak created a digital camera, invested in the technology, and even understood that photos would be shared online. Where they failed was in realizing that online photo sharing was the new business, not just a way to expand the printing business.”

This blogger finds Anthony's use of the term “subtle” a bit odd. If Kodak's management failed to perceive that its accumulated technology was pointing towards a new business, not an extension of the current one, such a miscalculation was anything but subtle. Be that as it may-- how did IP fit into this web of corporate myopia? Not for the first time in the corporate world, there was a disconnect between a company's patent prowess, at the technological level, and the utilization of this IP to advance the company’s long-term product goals, at the management level. Add to this the wildly overstated estimates of the company’s patent portfolio in 2011 and early 2012 (amounts up to $2.5 billion or more were earnestly suggested, only to witness the actual sale of the portfolio at slightly over $500 million dollars).

As such, internal management alone was not to blame; the penumbra of supposed expertise brought to bear on understanding the IP value of the company was also heavily flawed. All of this suggests, yet again, that management training still has not figured out how to prepare its students to understand how IP functions within an organization and what is its value and valuation. The fall of Kodak is merely a symptom of the problem, but not the problem itself.

Consumer electronics and IP: it's about management, stupid

It remains the great unknown: to what extent does IP contribute to the success or failure of a

company (or even an entire industry)? In truth, the possible answer to the question will depend upon the circumstances—pharma will certainly yield a different analysis to that of a media company. Even recognizing the diversity of the context, however, this blogger has had the long-felt sense that we are still far away from generalizable analytical structures that will allow us to reach reasonable conclusions across multiple settings. Against this background, I read with great interest an article that recently appeared (July 12th) in The Economist. Entitled “Eclipsed by Apple”, here, the article sought to explain the fall of the Japanese consumer electronics industry. Wherever one turns, decline in this industry is noticeable, whether it be Sony, Hitachi, Panasonic, Sharp, or lesser-known Japanese companies, with the likes of Apple and Samsung taking their place. This fall from commercial grace is particularly puzzling if one considers the various IP assets that these companies appear to possess.

Let’s begin with the power of the strong brand. I remember having lunch with a senior official of a major international IP organization who said categorically, “at the end of the day, it is not about patents or copyright. The only really valuable IP asset is brands and the goodwill that is embodied in one’s marks.” So what about the role of branding in the consumer electronics business? The Economist observes: “A strong brand is no longer enough to justify a sharply higher price” (pointing to Samsung’s recent decline in operating profits). The article attributes this in part to the fact that the consumer electronic business “is an impossible business for nearly everyone.” But that proves too much. In a cut-throat market, one might reason that a strong brand can help one stand out, even if the brand does not have the power to command as premium a price as might be desired. But that does not seem to be the case. As strong a brand as Sony once was (think of the Sony Walkman or Triniton TV), the brand seems to have been (and is) only as formidable as its latest product. A strong brand can perhaps continue to command a premium price for a while, but ultimately it is coming up with new products that matter. (Apple and Samsung, are you listening?)

If a powerful brand does not provide a sure-fire, long-term anchor for success, what about the products themselves? On this, the article had this to say:

“If their chief executives were visionary leaders willing to take risks, Japanese electronics firms could do much to regain their lost lustre, says Roderick Lappin, who heads the Japanese operations of China’s fast-rising Lenovo. Their unrivalled engineering, though often in excess of customers’ needs, is still an advantage, he says. They sit on a trove of intellectual property in the form of patents. Much of this could prove invaluable in the field of “wearable” technology or the much-hyped “‘internet of things’ …“.

It would appear that these companies have great engineering know-how and a lot of patents, particularly in a couple of emerging fields. That sounds like a great double-dose of valuable IP. But the engineering know-how seems to be detached from customer wants. As for the patents, they appear to own a lot of patents for wearables and the internet of things. But we are not really told why this “trove of patents” will make a difference for these companies in these emerging industries. Moreover, to the best of my understanding, some of these companies possessed patent troves for past and present technologies, without these patent portfolios necessarily being translated into oversized commercial success. Why will the current patent trove be any different? Or will the value of these troves be measured only if the companies do not enjoy significant success in the field of wearables and the internet of things? If so, this will be redolent of, e.g., Nortel and Kodak, both of which sold their patent portfolios because they had no other choice.

At the end of the day, perhaps the most encouraging thing said in the article about the industry was in connection with Sony, where its smartphones and tablets are enjoying some success due to “one simple, customer-centered innovation—making them waterproof.” But this does not seem to be the stuff of high-level engineering or massive patenting, but simply a shrewd management decision to give the client what it wants (or needs). If so, neither the woes nor the possible solutions to the crisis of Japanese consumer electronics rest primarily with IP. While IP and what it embodies are not unimportant, ultimately what matters is enlightened management, including, but in no way limited to, the effective creation and utilization of IP. But our understanding of how IP fits into the broader picture of successful management still has a long way to go.

When Successful Innovation and IP Go in a Different Direction from Increased Domestic Employment

Ever since the onset of the Great Recession, the primary concern of most governments has been to accelerate domestic growth in a way that will increase employment. For example, there is no more anticipated economic data point than the US unemployment rate, published on the first Friday of each month. For the general public, the success or failure of many governments is the extent to which they can generate jobs in a sustained and substantial way. The primacy of economic growth, and its by-product —increased employment — threaten to place public discussion about IP in an awkward position. The reason is that there may no clear connection between enhanced innovation and IP activity and improved employment data. Instead, the benefits of cutting-edge IP may well be redounding primarily to the benefit of the few who are able to capitalize on the commercial success of their innovations, with little or no benefit to the overall employment situation. To the extent that this is true, arguments in favour of public support of IP rest on uncertain policy grounds.

Take a country like Israel, which is seen as an example of the use of effective public moneys for innovative research and development. A primary vehicle for this funding is the so-called Office of the Chief Scientist (known as the OCS), which extends financial support for innovative activity by recipient companies, here. The problem is that OCS funding requires that the intangible “Knowledge” for which read IP, very broadly defined) that is generated from such funding may not be transferred out of the country until the grants have been repaid to the OCS from commercialization of the Knowledge, unless a waiver can be obtained. Underlying this prohibition is the view that OCS funding is, at the end of the day, first and foremost intended to enhance local employment, whereby the commercial success of the company, except to the extent that it contributes to local employment, is a secondary consideration. How strongly this underlying policy is viewed can be seen from the fact that, under the strict letter of the Encouragement of Industrial Research and Development Law, the transfer of Knowledge in an unauthorized fashion might theoretically attract criminal penalties (although this blogger is not aware of any instance in which the criminal sanction has actually been brought to bear).

Pushing against this clear nexus between the expenditure of public moneys, the creation of valuable IP/Knowledge, and increased domestic employment, as exemplified by OCS funding, is the exit ethos of the Israel start-up community. While it has become a bit hackneyed, the description of the country as “Start-Up Nation”, here, does capture the esteem in which is held a successful hi-tech exit (meaning that the company has been sold to a foreign purchaser or, less likely these days, has successfully floated its shares on a reputable stock exchange), replete with underlying IP and related innovative technology. However, from the point of view of government employment policy, a successful exit typically has, at best, only a modest effect on overall domestic employment. Even assuming that the company maintains an R&D facility in the country after the exit, the primary benefit of a successful exit are the millions, sometimes hundreds of millions of dollars, that go to the investors and founders. Thus, even if the likes of a Google maintains a local R&D facility as a result of the exit, the employment benefits redound to a select few, with the overall national employment situation being largely unaffected.

Israel is brought as an example because its circumstances so vividly underscore the proposition that the development of IP tends to go to the benefit of capital (read investors and founders) rather than labour. But it is hardly alone. Singapore is engaged in an impressive and aggressive push, supported by public funding, to strengthen the position of that island nation as a Global IP hub in Asia, here. As this blogger understands the initiative, underlying it is a concern for the overall employment position in the country. The experience in Israel should be a cautionary tale for Singapore.

Don’t get this blogger wrong: he is all in favour of IP, innovation and successful commercial exits based on them. To the extent that government funds can assist these developments, it is to be encouraged. However, there is palpable and increasing risk here. In an age where public budgets are increasingly scrutinized, a budget line for the support of innovation and R&D, where the benefit fails to redound to the public in the form of increased employment, carries with it a double risk. First, the decoupling of successful innovation and R&D from improved domestic employment threatens to decrease the amount of continued public funding of such activities. Even more ominously, this decoupling may threaten public support for robust IP protection, thereby throwing out the IP baby with the public funding bathwater in a way that this blogger would prefer not to contemplate.

How Much Does the C-Suite or a Board Really Care About IP?

Let me lay out my cards on the proverbial table. My primary involvement in IP is as an IP lawyer, inclined to dealing principally with non-contentious matters. In so doing, I usually engage with middle level managers, engineers and other technology types. On occasion, I have dealt with the CEO, ranging from small start-ups to publicly-traded companies. I have reported to a number of boards on IP-specific questions, but I have never been physically present a board meeting. I am IP-centric, but hardly IP myopic. I know my way around a balance sheet and a board resolution.

Against this backdrop, my question is simple—just how frequently is IP an agenda item for a company board or a policy matter for the CEO? Stated otherwise, how many CEOs have ever actually been fired because they mishandled their company's IP? I am not talking about the small number of mega-patent portfolio transactions of the last year or so, such as the sale of Motorola Mobility or Kodak patent portfolios. I would assume that when hundreds of millions, even billions of dollars, are at stake, senior management and the company board are involved in the relevant decisions. But while such high profile transactions have grabbed outsized media attention, they are extreme aberrations in the patent firmament. Almost 100% of companies will never deal with a patent transaction of this scope.

Nor am I talking about companies, such Intellectual Ventures, whose primary asset is patent-related rights. If patents are not the central focus of the attention of a company such as this, one would imagine that management and board meetings would be the corporate version of a vow of silence. Nor am I talking about a company that is the recipient of a legal claim for IP infringement (or even the decision to initiate such an action). These are one-off events, sometimes proactive, more typically reactive, but seldom part of a company's broader business strategy. No, my question refers to the overwhelming number of companies, from the publicly traded to the privately held and to the start-up minnows hoping to enjoy the next big exit. We are told and read about how IP (or its conceptual cousins, such as "intellectual capital" or "intangible assets") is more and more "a", and perhaps "the", central part of the activities of many companies. Reading business-oriented magazines and the business section of leading newspapers, I encounter discussions of IP issues almost on a daily basis.

But I also know that IP-related topics form only a minor, usually elective part, of most management education programs. When this occurs, the usual orientation is to treat IP as simply another asset of the company (or, with the increasing involvement of the financial community with IP rights, as an "asset class"). And while most management education programs know, in their heart of hearts, that they are principally instructing present and future middle managers, such programs strive to maintain the persona that they are directed to training the next generation of inhabitants of the C-suite. Based on this ideal, and the relative lack of IP content in the curriculum, the reasonable conclusion is that most managers do not receive systematic training regarding IP issues. And when they do receive attention, the treatment focuses on IP as another form of company asset, incorporeal and imperfectly understood at best.

As such, and circling back to the questions above, inquiry is made once again. Just how much has IP entered the boardroom and the corner office on a regular basis? Unless the answer is--"a great deal", then there is a material disconnect between what goes on in a company as a matter of IP at mid-level and the IP policy issues that guide a company at the senior managerial level. If any readers are aware of publications that discuss this question, or themselves have insights, anecdotal or otherwise, that can shed light on this question, we would be grateful.

Katnote: the documents mentioned by Len Ruggiero (LaMarch Capital) in the comment posted below can be accessed here and here.

The Fight Over Dell: Just How Hidden Is Its IP?

It was just a matter of time. Many of you might be following the recent events surrounding Michael Dell's efforts to lead a consortium to take the eponymous company private, and the two counter-offers submitted this week by investment heavyweights Carl Icahn and the Blackstone group. The underlying motivation for these investments seems to be the sense that only by taking the company private does it have a fighting chance to blunt its decline in the computer world, as the PC continues to give way to other computer hardware devices in the marketplace, while Dell has not come up with any substantial product alternatives.

So what "was just a matter of time"? No, I don't mean the high stakes competition for control of the company. I leave that for the myriad of experts in the M&A world who are way beyond my pay grade. Rather, I mean the attempt to turn IP into a potentially central aspect of the investment interest in the company. Consider the piece that appeared on the March 25th edition of Businessweek Technology Insider. Written by Roben Farzad, a well-regarded writer for the publication, the title says it all—"The Hidden Value of Dell: 3,449 Patents and Other Intellectual Property", here.

In effect, Farzad is summarizing a report that appears to have been published on March 8th by M*CAM, which is described as an IP valuation company located in the postcard-pretty town of Charlottesville, Virginia, here. According to the report, Dell has 3,449 patents and 1,660 patent applications. The report purports to have applied data-mining algorithms that give a commercial fitness measure as well as a measure of the transferability of each patent. The result: "47% of Dell's IP portfolio scored as commercial." The report ascribed a commercial fitness score of greater 50% in four out of 17 technical categories, namely graphics processing, data transfer, networks and switches." Using Farzad's term, the Dell transaction is merely the latest example of "IP wildcatting", following on the heals of the sale of AOL patents, the auctioning of the Nortel patents, the reported interest of Alcatel-Lucent to use Bell Labs IP as collateral and the Kodak patent portfolio

Let me be honest: I am skeptical about this. Consider the statement that "a source close to the deal says its bankers are cognizant of Dell's patent value." I seem to recall that it was the bankers who were flogging the $2.5 billion valuation of the Kodak portfolio in late 2011, only to see it later sold for barely $500 million. Sorry, I don't hold much credence in the bankers with respect to patent valuations. And then there is interest of the IP valuation company. Without suggesting anything untoward in the way that M*CAM has evaluated the IP position of Dell, either in its algorithms, heuristics, or conclusions, it should still be recalled that, since the Kodak valuation debacle, the industry has had a bit of explaining to do.

To be fair, the president of M*CAM states that "[t]he asset class [IP] is often misunderstood and difficult to price." That said, the report asks: "Does Dell truly not know it has strong it has market controls in its new business segments?" Does Dell not see that it could license its network technology to a third party, even a rival, thus generating a payment stream without really affecting its core business segments? Do most investors not really know, as suggested in the report, that IP can generate money for a company? Even a generation after we were told by Kevin Rivette and David Kline about the potential of exploiting IP Rembrandts in the attic, here, can it really be that Dell is still so very clueless about its IP position? Or are there other interests equally at work at playing up the company's IP potential? At the end of the day, is IP really the hidden story of the Dell transaction?

What Should Engineers Know About IP?: A Coda

We yesterday posted our observations here about a recent talk given by Dr Kristina Johnson, a prominent figure in the world of engineering, as part of our continuing interest in the narrative that thought-leaders in the world of innovation employ with respect to the role of IP and in particular the role of patents. A reader was kind enough to share with us several additional links in connection with Dr Johnson and this important subject. We are delighted to bring these links (here, here and here) to the attention of our readers. 

We thank our reader for these links and for contributing to the discussion on this important subject.

IP and Innovation, in the Service of SME's

I was following the various tweets and blogs from the prodigious Duncan Bucknell of the iconic IPThinkTank blog in connection with the recent CIP Forum in Gotenberg, Sweden on the "Future of Innovation". One blogpost, entitled "The Biggest Issue in IP Management", particularly caught my attention. In it, Bucknell discusses the lack of attention given to SMEs (small to medium enterprises) as centres of IP and innovation. I quote his comments in an edited fashion below.

"The biggest pool of patents is not at Samsung, or IBM, or LG or IBM or Microsoft, it is in the SME space. We consistently hear (and at the conference, from the likes of Eli Lilly, Microsoft and Philips) that most innovation is occurring at the SME level. Clearly most IP management is occurring there as well. We have all heard about and constantly deal with IP silos within companies, managing IP as a profit centre (and not a cost centre) and communicating value to the Board. Well, the vast majority of IP management has no silos, no profit centre, no cost centre, indeed no centre at all. The vast majority of IP management is done where there is no IP function.

The challenge then, is to develop a set of principles and practices that are transportable across SMEs to large corporations. Accounting principles apply this way, as do marketing, sales, product development, indeed every other function. Large entities have a great interest in helping SMEs to achieve this. They themselves often say that this is where they look for innovation. If they are to acquire IP from SMEs, then they would much rather that it had been carefully nurtured prior to acquisition. Those of us charged with working in or with large and well resourced entities have an opportunity to make a substantial impact by leading the development of these tools."

And so--here is my question. In Bucknell's call for "the development of tools", are we talking about "transportable principles" regarding IP, innovation or some combination of the two? Law faculties now have centres for innovation, where research is carried out on how legal structures help or hinder innovation; business schools devote entire programmes on how innovation is created and exploited for profit. While we instinctively sense that the two terms are not synonymous, the boundaries between them are blurred. Even Bucknell's most interesting blog comments seem to glide between focusing on IP and on innovation.

This blurring matters, because until it is resolved, it will not be possible even to begin the task of developing the tools that Bucknell has urged. Not all IP is related to innovation, nor is all innovation simply a function of creating better IP rights. While IP and innovation may overlap, they do so only partially. IP management may facilitate the ability of an SME to innovate more effectively in its area of activity, but it might also simply enable the SME to effectively exercise its exclusionary IP rights without necessarily contributing to overall innovation. From the vantage of innovation, IP may or may not be essential to the innovative part of the SME's activities; indeed, the innovation may take place far from the concerns that occupy the IP manager.

All of the foregoing is another way of saying that if we are to go about the "development of tools" correctly called for by Bucknell, we will first need to address the prerequisite question: What is the relationship between IP and innovation? Only after we have created a structured approach to answering that question can we then proceed to the "development of tools." Tolkien enabled us to read the Lord of the Rings trilogy even if one proceeded to read The Hobbit only later, or not at all. Unfortunately, we don't have the same luxury here, if we are to move in the direction that Bucknell has urged.

Will the Long Tail do away with IP Rights?

I may be a bit late getting to the party, but I have just finished reading Chris Anderson's best seller of 2006, The Long Tail (late to the party, but still allowed in, since the 2008 version has one completely new chapter.) Anderson, editor in chief of Wired magazine, is a leading spokesperson for the view that the world of marketing, sale and distribution has been completely changed by the Internet. Anderson terms this tectonic shift (if a term of geological provenance can be used regarding the Internet) "the Long Tail".

In short, in a world where physical limitations on storage, display and performance are largely eliminated, the focus of business on generating a limited number of "hits" (i.e., "the Short Tail") gives way to the vast terrain inhabited by so-called commercial misses, such as the movie or album that does not quite make it in the bricks-and-mortar world, or the speciality retailer who cannot generate enough in-store custom to successfully purvey her fare of Far Eastern buttons.

In the Internet world, such products are not "misses, but "the endlessly long tail of niche products in the demand curve". Some will succeed, others will ultimately fail, but the sheer variety expanding options to the consuming public by virtue of the Long Tail will, in Anderson's words, fundamentally alter the nature of products, sales, and ultimately the fabric of culture itself.

The Long Tail, from top to bottom

From the IP perspective, what is notable in Anderson's book is the absence of any significant concern about IP rights. No wonder, perhaps: from the business vantage, IP protection can be seen as going hand-in-hand with the truncated world of hits at the head of the Short Tail. Once one leaves the head of the Short Tail, the vast number of misses that populate the endless path down the Long Tail carry with them the potential to clog the system because of rights clearance and the threat of IP hold-up. Where the aggregator is central (on the very last page of the book, Anderson identifies "the aggregator" as one of the three central participants in the Long Tail market), IP rights are largely hindrance and seldom an opportunity.

Be that as it may, Anderson represents an important intellectual force whose well-crafted rhetoric contains a tacit but potentially powerful challenge to the current IP regime. Perhaps he can be encouraged to add a chapter in the next edition of the book on the role of IP along the road of the Long Tail.

Will the Aggregator of the Long Tail become the IP Terminator?