The Piracy Paradox

Kal Raustiala: The piracy paradox is a paradox related to fashion design, may be related to other things but mostly related to fashion design. The paradox arises from the following kind of puzzle, which is we usually think of intellectual property protection, copyright for example, as a necessary element for creative production. So writers won’t write if they think their books are just going to be copied, musicians won’t create music if they think their works are just going to be stolen, and so that’s why piracy is such a problem. What’s interesting about fashion design is you see a lot of creativity in the fashion world and yet there’s no protection for fashion designs so a dress appears in the runway, on the Oscars, and the next day, two days later you can buy a cheap version of that from a company like ABS. And so the piracy paradox is- looks at this puzzle and the idea is that unlike other industries in which piracy seems to drive out creativity in fashion it doesn’t drive it out and in fact it seems to accelerate it. And the reason is that copying of- the copying of designs as it spreads out in to the marketplace makes the original buyer, the early adopter of a particular design, want to then move on to something new. All right. So fashion’s always cycling and so one way to think about it is that it accelerates the fashion cycle so it’s paradoxically helpful.

Question:  What are the implications?

Kal Raustiala:  A couple of implications. One is that we probably- that our understanding of what creativity requires, which is a very instrumental one in the U.S. legal system, needs to be a little more nuanced, and so when we think of it as a public policy question to what degree should government provide these monopoly rights, which is what copyrights and patents and trademarks are, we need to think about how different industries--  We need to be a little more industry specific so rather than a blanket set of rules we want to understand how these industries work and what kinds of inducements they need. So right now there’s a bill before Congress to give fashion designers a kind of copyright and that’s probably not necessary, right, so-- and there may be other cases in which it’s not necessary.

Question:Has the American aggressive approach to intellectual property hurt us?

Kal Raustiala: We’re very aggressive about intellectual property in the U.S. We’re quite eager to make sure that other countries protect our intellectual property and I think generally that’s been helpful to us. We are the major producer of movies or a major producer of movies, lots of other entertainment industries, software, etc., so intellectual property is essential to the American economy of the twenty-first century. And so we’ve been understandably aggressive about protecting it and that I think has been good for our economy but it’s not just an economic question, right, so one of the things that we ought to think about when we’re thinking about how much protection should be given is what should be in the public domain, what should be allowed as fair use, how much, how long should the protection be?  And there I think there is a fair question to be asked about whether we have overshot what is reasonable and so it’s very difficult for example for musicians to sample other songs more than tiny, little snippets because the law has made it extremely complex and cumbersome and costly. And so many people argue that we’ve kind of gone well beyond what’s reasonable and made the public domain, the domain of things that we can all use and remix and re-create, really inaccessible in a way that’s probably not optimal.

Question:Can piracy be stopped?

Kal Raustiala: We’ve done a couple of things to get around that. One is in the World Trade Organization, which countries like China are eager to be a part of and they are in fact a member, we have made intellectual property part of that agreement so- a part of that organization so we have a set of IP rules that every member state of the WTO has to accept. And that linkage between trade and IP has been very effective. We do that in our bilateral trade agreements as well. We go and we say, “You want a trade agreement with us, Peru or Colombia or whatever, Australia, great, but you have to accept a set of intellectual property rules and you have to enforce them.”  So we’ve used leverage against these countries and it’s not perfect so China still- you can travel in Asia--  I was in Viet Nam a few years ago and pirated DVDs are everywhere, right, so it’s not perfect but we’ve been cracking down in a way that we hadn’t in the past and I think that has slowly moved these countries closer to our preferred position

Question: How is technology changing piracy?

Kal Raustiala: It’s had an enormous effect on piracy in that anything that’s digital- -it’s music downloading-- anything that’s digital is incredibly easy to copy and therefore the piracy that goes on is rampant. So 25 years ago you wanted a copy of a record; you had a cassette tape; it was complicated. Now it’s a click and you’re done. So technology’s had an enormous effect and that’s what has driven a lot of the concern within the U.S. over increasing IP protection and making sure that other countries in the global marketplace have the same sets of rules. Has technology been effective in fighting it?  I suppose so but I’m not-- I can’t say I can think of an example. I think it’s primarily been something that’s made the piracy problem larger. On the other hand, I think it’s led to certain kinds of innovation in industry so when the VCR came out companies were very concerned it was going to be the end of the television industry. Not the case at all, right, so it ended up creating a whole new industry. iTunes is now this enormous company or enormous enterprise from Apple that didn’t exist. So change brings opportunity in every economic domain and I think IP is no different, and again the question is how much- how do you balance the incumbent industries against these unknown future things that we can’t know or predict?

Question: How Has Technology Changed Your Work?

Kal Raustiala: For a faculty like myself, I think technology has had a huge change in a couple of ways. One is just simple things like e-mail. E-mail has made it possible to have colleagues and connections with people all over the country, all over the world, and when you’re very specialized in a particular area now you have a big community. So it’s something that’s true I think in every area so the internet and the rise of e-mail and web sites has made it possible for people who have weird, quirky tastes to get together and form a community. And that’s been really important for academics ‘cause we are kind of weird and quirky and what we tend to study is often narrow and not of everyone’s interest. So I think it’s changed the dimensions of your intellectual community. There are more mundane things like the ability to search online, to do research. I can do research--  If I want to find a treaty- a particular treaty, in the old days people had to go to the library and find a dusty volume and open--  It took a long time. Now I just put it in to Google and there it is and there is some database out of Yale that’s got every treaty on it. So it’s been an incredible productivity tool so I don’t think of any of this is unique to the academic world but it’s had a profound effect on our ability to think and write and study issues.

Question: Does technology make courts more efficient?

Kal Raustiala:One thing that it’s done is it’s disseminated information in a way. So in the past you had all kinds of legal records that again were in some dusty library and theoretically available to the public. Now they’re all on Lexis or on some other database or whatever so the ability for the average person to discover an important fact about their case or to look up, to do legal research if they’re trying to argue their own position in a dispute, is vastly higher than it was. So I guess it’s empowering to the average person. On the other hand, it’s- there’s a flood and how you negotiate that is hard, but what has made the legal system more efficient I don’t know. I don’t know the answer to that.

Image courtesy of Shutterstock.

How America's obsession with intellectual property could work against us.

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