My Review of "The Knockoff Economy"

4 out of 5 stars........

The book makes the point that copying in many cases actually increases innovation, contrary to what some think that Intellectual Property (IP) must be protected always or else there will not be enough incentive (money) for people to make important new innovations. Sure, sometimes IP must be protected, but the author tries to show, quite well, that it is overused and in many cases restricts innovation, along with having other negative effects. From the book, I took note of the following.....

1. Fashion is an area with little IP protection and the copying thrives along with innovation and profits in the industry, and actually improves the whole industry. Copying is the way trends develop and the pioneer gains reputation in the process which can translate into even more for the pioneer, than if the original product was protected via copyright. And, really it is impossible to protect most things as just slight changes to a product can always be done defeating a copyright, anyway. Not to mention the costs of lawsuits, etc for the pioneer to try and protect something, in time,and money. Also, the speed of the copying hastens fashion cycles, making more innovation and profits- induced obsolescence..

2. As for morality, unlike stealing a car, stealing an idea still leaves the originator with the idea, plus also since someone else has the idea there is greater chance for innovation, improvement of the idea.....this brings up the term "piracy paradox."

3. Cuisine is another area, with little IP protection, which thrives because of the copying, encouraging many variations/innovations like the Korean taco - LA's Korean Tacos in a Truck - Kogi. The recipe can be copyrighted, but the "built food" can't because it is so easily changed in minute ways. Chefs can't protect food concoctions, but can the look and feel of a restaurant.

4. Comedy, also rife with stealing, but slightly different presentations are what makes comedy thrive even more. An example is Louis C.K and Dane Cook.

5. Football, also.....can't copyright plays, yet football thrives like never before. Plus, the originator still holds an advantage by being the first - even if another team copies the play, the team might not have the kinds of players best to execute it and would take years of drafting, trading players, new coaches, etc to match the originator's team.

6. The financial industry, also. Even with copying the originator, by reputation and lead time can gain advantages which others can never match.

7. The computer database industry, also. Can't copyright data, but the ways it can be organized. e.g. Lexis-Nexis,.Factiva.

8. The VCR actually created new industries, like video rental, also new revenue streams for the maker of films.

9. "Useful articles" is a benchmark in copyright law - a dress is useful, a painting is not therefore can copyright. Though, there are special cases, a dress which is more ornamental than functional might lead to special protection. A printed fabric is protected, but the cut and style aren't. Also "trade dress" is protected, the packaging for instance, but not necessarily the product inside. So, trademarks, brands and logos are protected and can increase the value of its products/services even if they are easily copied, in fact copying actually can increase the values.

10. Positional goods - those which create status, like trademarks, logos.

11. Also, copying can spur innovation, what lawyers call "derivative works," tweaking of the original.

12. Copying can also lower the consumer's knowledge costs, by seeing trends happen right before their eyes - also called "anchoring."

13. Social norms can protect IP better than laws sometimes, like with comedians, chefs, etc.

14. The book also discusses "first mover" advantages and disadvantages.

15. For music, can make exact copies, but can't reproduce the performance, live session/concert, etc, so the performance aspect is thriving even more despite the copying, etc. Also, some restaurants won't allow takeout or home delivery.

17. Open source software is discussed. Wikipedia more successful than Microsoft's Encarta. Linix operating system also has led to a new company, Redhat. Plus, creates competition to put pressure on Microsoft, etc to keep improving their products.

18. Fonts are also discussed, zillions of different ones, lots of copying and tweaking....plus, the usefulness test, can't print w/o them, so only certain ones can be protected, so creativity thrives, creating more and more fonts.

Anyway, the book does give one a better understanding of the effects of copying, which it seems more often than not increases creativity, innovation and overall prosperity. After reading it, I think my understanding of IP and its effects is better.

Nation's Economic Recovery Accelerating!

The recovery did reach, in my opinion, a self-sustaining mode, recently, led by housing which normally leads a recovery. What is new, is that now, it looks like the self-sustaining recovery has entered an acceleration phase, with the news that CA's recovery is now on solid footing, with the budget now forecast by independent sources to possibly have a surplus by 2014, plus recently released unemployment numbers showing the largest percentage decrease in over 25 years. CA has always been boom and bust, with the busts always coming back to all-time high economic highs. Since CA represents about 12% of the nation, it does look like CA will now accelerate the current slow recovery.

I am no fortune teller....I look at facts....and what is currently happening. The only thing I can see stopping this accelerated recovery is some unexpected catastrophic event......not already known risks like the "fiscal cliff, "Greece," "Gaza," etc.