October 15, 2013

Creativity, Discovery and Intellectual Property

BookTalk, intellectual property, Orly Lobel, Talent Wants to Be Free


by Orly Lobel, Don Weckstein Professor of Labor and Employment Law, University of San Diego School of Law

Under the radar, the monopolization of knowledge has expanded far beyond the bargain struck in Article I, Section 8 of the Constitution.  The enumerated powers of Congress permit the legislature to secure “to Authors and Inventors the exclusive Right to their respective Writings and Discoveries” for a limited time “to promote the Progress of Science and useful Art.” Thomas Jefferson described the act of delineating the appropriate scope of intellectual property rights as “drawing a line between the things which are worth to the public the embarrassment of an exclusive patent, and those which are not.” Talent Wants to Be Free: Why We Should Learn to Love Leaks, Raids, and Free-Riding argues that Jefferson’s embarrassment extends beyond ownership over creations of the mind.  Moreover, it extends beyond the exercise of public authority contemplated by the Constitution, and into private conduct that can exacerbate the tension Jefferson identified. The embarrassment reveals itself in full force when we focus our attention on the ways we regulate human capital – people themselves, their skills and knowledge, the social connections and the creative capacities and inventive potential that flow through the market.

Beyond our intellectual property wars, beyond the heated debates about the proper scope of patents and copyright, we’re confronting a surge in the monopolization of human potential for creativity and invention. The past decade has seen a wild expansion of business practices which attempt to control the mobility of talent and secrets. Companies big and small are using non-compete contracts, trade secret and non-disclosure agreements, prohibitions on poaching and soliciting of customers and co-workers, and the preclusion of employee ownership of patents and copyright. Take for example David Neelman, the founder of JetBlue, who was compelled to sit on imaginative ideas that would revolutionize the airline industry for five years because he had signed a non-compete with former employer Southwest. Or Nobel laureate and former Yale University professor, 87 year old John Fenn, who was sued by Yale over his patent on a method he had invented to evaluate new drugs, including the development of innovative AIDS medication in the mid-1990s. Ironically, these pervasive business practices frequently have a counter-productive effect not only on the public and employees, but also on businesses themselves.

Talent Wants to Be Free looks at how we fight over knowledge and talent in every industry, profession, and region, and considers the right balances of secrecy & sharing, carrots & sticks and freedoms & controls. We have vigorous debates about immigration reform, the patent system, labor unions and health care – all of which bear on how people and organizations innovate – but when we look at our core strategies on human capital, we’re losing out on rich potential, creativity, and drive. When it comes to fighting the war over talent, most of us react emotionally and territorially. But these are exciting times: there is fascinating new evidence from economics, psychology, sociology, management and law that reveal a vision of how to better wage the talent wars. Through interdisciplinary empirical research and insight from the industry leaders, the book reveals that more frequently than we have come to believe, corporations, individuals, industries and regions benefit more when talent is not subject to monopoly control.

In any field in which innovation determines business success, people are a company’s most valuable assets. But unlike other assets, people make decisions about how much to invest in their creative and inventive endeavors. The ways in which we set up our business and employment relationships and contracts have a serious impact on motivation and performance. Abraham Lincoln famously stated that we grant exclusive patent protection to add the “fuel of interest to the fire of genius.” In fact, this is why as a formal matter, corporations cannot author a patent, but corporations can nonetheless become patent owners. Because most inventions today occur in the context of the workplace, corporations, not hired inventors, own the vast majority of them. Talent Wants to Be Free takes seriously the challenges of fuel and fire and examines how each of us becomes more innovative, energized, and motivated throughout our lives. It looks at the psychology and business of innovation in concrete contexts ranging from pharmaceuticals to fashion, from the food industry to the auto industry. The empirics suggest that very frequently we have too much, not too little, protection over human capital and knowledge – too many walls surrounding and entrapping our creative resources.

In the early 2000s, James Boyle warned against the Second Enclosure Movement, the enclosure of the “intangible commons of the mind” through a rapid expansion of intellectual property rights. We are now at the beginning of the Third Enclosure Movement.  Seemingly unnoticed, contractual and regulatory controls over the inputs of knowledge have expanded the ability of companies to monopolize the fruits of creativity and discovery far beyond anything contemplated in the Constitution.  The cognitive property of the mind itself is now subject to corporate ownership – a result that no doubt would have Thomas Jefferson not only embarrassed but genuinely concerned.