By: Peter Groves
By: Peter Groves[1]
“Intellectual property is the oil of the 21st century”, Mark Getty, founder of Getty Images, the world’s largest picture library, told The Economist over 20 years ago.[2] Given that his family had become so rich during the 20th century from oil, it’s a telling remark that explains his move into the picture library business after the family sold their oil business to Texaco.
“Look at the richest men a hundred years ago,” he went on. “[T]hey all made their money extracting natural resources or moving them around. All today's richest men have made their money out of intellectual property.” That might be debatable, because for example Jeff Bezos has made his money largely from selling stuff – although the strength of the trade marks under which his business has done so has a lot to do with its success, and even patented technology (the notorious “one-click” patent, for one) has played a part.
So intellectual property laws continue to do the jobs that they have done since they were written, but get busier all the time. Trade marks continue to attract customers, patents continue to protect technical innovation, and every year there are more trade marks, more patents, more protection, doing what trade marks and patents have always done only more so.
But that’s probably not what Mr Getty was talking about. True, intellectual property rights lubricate business processes, although Sir Robin Jacob has quoted an unnamed senior member of his chambers as saying “we are the grit in the wheels of industry”. Perhaps the way to read that is that adding barristers to the lubricant can cause everything to seize up. Anyway, Mr Getty was surely talking about intellectual property as an asset, as something to exploit; and he was equally surely thinking more about copyright than about what has traditionally been called “industrial property”.
While Amazon makes its profits largely by selling physical goods, a large part of its business – and just about the whole of Getty Images’s business – is devoted to selling intangible rights. The record industry (I abhor the term “music industry”, because music can never be an industrial product, though recordings of it certainly can), notwithstanding the continuing demand for CDs and the renaissance of vinyl, mostly makes its money from selling intangible rights. So too with the film industry; what we used to watch in the cinema or on DVD is now delivered online. It’s a shift that came about as the world embraced digital technology and moved online – a process accelerated, of course, by the pandemic which shut down live music, theatres and cinemas.
Without copyright, none of this would have happened. If you have to buy a physical carrier to enjoy music, the record industry has you in its grasp; the record companies control the manufacture and distribution of CDs. Of course unauthorised copying is not impossible, but immaterial copies in digital form can proliferate almost instantaneously, if unchecked. What checks them is copyright law.
It’s the increasing importance of industrial property rights (patents, trade marks and to a lesser extent designs) and the emergence of a digital economy that depends entirely on copyright that makes intellectual property law so immediate and such a fascinating, dynamic area to study. We engage with intellectual property every day, when we run computer programs, when we use vacuum cleaners, when we make our selection from the supermarket shelves, when we decide to buy something because it looks more attractive than an alternative; that’s not something you can say of any other area of law, not even contract or consumer law. There’s a lot of intellectual property about. And that is not necessarily a Good Thing.
Sir Robin Jacob made the point, over 20 years ago, that it is important to recognise industrial property rights as monopolies.[3] He suggested that if we called them monopolies we would treat them with greater circumspection, because monopolies are in principle bad things. Indeed, the whole of intellectual property law exists in an exception to the prohibition, in common law and by the Statute of Monopolies of 1623, of monopolies.
Monopolies are sometimes justified, and many great minds have sought to explain why the monopolies conferred by the intellectual property system are Good Things. This is not something that the courts have to worry about, but in Dranez Anstalt v Hayek[4]at para 25 Chadwick LJ said:
… The grant or registration of a patent confers a monopoly. The statutory monopoly can be justified on the grounds that it is necessary (for a limited time) in order to encourage inventors, and those who fund them, to apply their skills and resources in developing products and processes from which the public will benefit. But the balance between the benefits which will accrue to the public from permitting monopolies in order to encourage invention and the detriment which may be suffered by the public from monopolistic practices is struck by the patent legislation.
Much the same could be said about copyright, and about design protection. Trade marks demand a different justification, found in the ideas of consumer protection and economic efficiency. Whatever justifications are used, though, it is clear that the intellectual property system has to strike a balance, or perhaps multiple balances, and that if the owner of the monopoly is able to control too much, the justification for granting that monopoly cannot apply to that overreaching.
Students of intellectual property law must remain alert to the problems of extending monopolies – not only because it is important in real life, but because it provides the examiner with scope for testing students’ understanding of the subject. Technology progresses, intellectual property laws struggle to keep up, and monopolies exceed their justifications. Even Pope Benedict XVI, while recognising how economic development, prosperity and economic growth has helped lift many out of poverty, built up nations, and created tremendous opportunities for people, also highlighted “malfunctions and dramatic problems” in the system:
On the part of rich countries there is excessive zeal for protecting knowledge through an unduly rigid assertion of the right to intellectual property, especially in the field of health care.[5]
Mark Getty’s oil analogy comes in useful again. For most of the 20th century oil fuelled the economic development that the Pope mentioned, bringing prosperity to many, reducing poverty and creating opportunities. But at a certain point the balance between the benefits of fossil fuels and the drawbacks tipped, and oil was no longer such a Good Thing. As I write, the Intergovernmental Panel on Climate Change has published its latest report[6] which leaves no doubt about the catastrophic impact on the world of burning fossil fuels. In years to come, perhaps, humankind will recognise the less lethal but still undesirable effects of the new oil.
There are many ways in which the new oil is in danger of harming the very activities that it is supposed to lubricate. You will find them in the course of your studies if you keep your eyes, and your mind, open, and from time to time I will write about examples in greater depth.[7]
Peter Groves[8]
[1] I am adopting the usage of the expression (in the title of this article) found in that great parody, 1066 and All That by Sellar and Yeatman (first published 1930; new edition 2010, Methuen, ISBN 978-0-413-77270-1). [2] 2nd March 2000. https://www.economist.com/business/2000/03/02/blood-and-oil [3] The Stephen Stewart Memorial Lecture 1996: industrial property – industry's enemy? (1997) IPQ 3. [4] [2003] FSR 561 (CA). [5] "Caritas in veritate" (Charity in Truth), 7th July 2009, http://www.vatican.va/holy_father/benedict_xvi/encyclicals/documents/hf_ben-xvi_enc_20090629_caritas-in-veritate_en.html. [6] https://www.ipcc.ch/report/sixth-assessment-report-working-group-i/ [7] I will publish them, along with other articles, at https://ipsojure.substack.com/ and elsewhere. [8] LLB, MA, PhD, solicitor.