Yahoo: ‘IP Rules!’

SUNNYVALE, CALIF. -– Can you name one product with which the United States holds a sizable trade surplus over other countries? Try intellectual property (IP), the stuff we (individuals, businesses and academia) think up.

“There’s a strong U.S. trade surplus for IP,” said Joseph Siino, Yahoo’s vice president for intellectual property, in a briefing here at the Internet giant’s headquarters. “America’s top companies are IP-based. Think of Microsoft absent copyright law, or Disney without trademark. They’d be worth a very low percentage of the market cap they are today.”

But there’s trouble brewing in IP-land, with copyright, patents and trademark issues keeping many legal staffs working overtime to keep up, particularly the tech sector. The explosion of user-generated content, for example, has blurred the lines of who owns what, and what constitutes fair use in the digital media age.

“Users have become copyright owners,” said Siino.

While Yahoo has long had straightforward agreements with traditional media companies and other groups, dealing with what millions of users post (including the copyrighted works of others), is a lot trickier. Siino wouldn’t comment on the billion dollar suit Viacom filed against YouTube/Google other than to say Yahoo is trying to develop the right mechanism to respect all IP rights.

“We don’t believe large companies have a monopoly on IP rights or should,” he said.

While YouTube is littered with copyrighted works, Google has argued that fair use laws let some of those works be posted and that the company removes material in violation as soon as it’s notified and can confirm the violation.

Again, without commenting specifically on Google, Siino agreed that there are fair use laws and that copyright holders have some obligation to say how their works may or may not be used.

Siino said he’s a fan of the Creative Commons license model created in 2001 by Stanford Law School professor Lawrence Lessig. Creative Commons offers licenses enabling artists to retain a copyright but restrict distribution, such as whether a work can be used commercially or modified.

Siino noted that patent laws haven’t been significantly revised in years. He said Yahoo and other tech industry players have been pushing for patent reform because the world is a very different place then when patent laws were designed for relatively simple, isolated inventions. Today’s tech industry is saddled by “patent thickets” of hundreds or even thousands of individual patents inside one device like a microprocessor or a Web service. “Any one inventor can shut you down, it’s a mess,” said Siino.

While he welcomes legislative solutions, Siino said they’re moving ahead “incrementally.” Meanwhile, Yahoo has also been working in support of other tech companies in patent disputes, notably its Silicon Valley neighbor eBay.

Technology offers a range of solutions for protecting IP rights. But Siino said he personally doesn’t like Digital Rights Management (DRM) software designed to protect music and other digital works from illegal copying because it can present problems for legitimate consumers and there always seems to be a group of people willing to work tirelessly to crack the protection. “Lawsuits aren’t always the best solution either, so what do you do?”

In the music world, Siino said Apple’s iTunes isn’t perfect but he gives the company credit for “finally creating a vehicle for a functioning marketplace of sorts.”

Piracy of IP-protected work has been a huge problem overseas for years, but there Siino sees progress as these countries develop their own IP and start to realize the benefits of protection can be a two-way street.

In China there has absolutely been interest to infringe IP, but now they’re switching to more protection,” he said. “There have been a number of recent significant verdicts” protecting the rights of intellectual property holders.

And while the U.S. has complained about other countries not enforcing copyright, patent and trademark law, Siino predicts some of the more authoritarian countries will end up prosecuting IP crimes more harshly than they’re treated here as those countries develop their IP portfolios. “There are proposals abroad to criminalize IP with a vengeance,” he said.

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