Cultivating the Economic Benefits of Creativity: Finding the Right Balance in IP Laws

• Author: Laura Possessky
• Pages: 12-58

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Published in Landslide® magazine, Volume 12, Number 4, a publication of the ABA Section of Intellectual Property Law (ABA-IPL), ©2020 by the American Bar Association. Reproduced with permission. All rights reserved.

This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.

Finding the Right

Balance in IP Laws

By Laura Possessky

Image: GettyImages

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Published in Landslide® magazine, Volume 12, Number 4, a publication of the ABA Section of Intellectual Property Law (ABA-IPL), ©2020 by the American Bar Association. Reproduced with permission. All rights reserved.

This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.

Laura Possessky is a media law attorney and a board member of

the Center for the Creative Economy in Washington, D.C. She can

be reached at laura@dcbarista.com.

FF

or the past decade, policy makers, govern-

ments, and nonprot organizations have

embarked on a concerted global effort to

harness the economic benets of creativity. As

one of the highest growth sectors in the global

economy, the creative industries are both strong

drivers of economic growth and great disrupters to

economic infrastructure. With patents, trademarks,

copyrights, and other property rights as the princi-

pal assets of creative activities, intellectual property (IP) is

a critical component of the health and growth of the creative

economy. Consequently, optimal growth of creative industries

depends on IP laws balancing owners’ interests and public

access to protected IP. For the U.S., nding the right balance

is a pressing concern because it is essential to ensure U.S. IP

laws and, accordingly, the U.S. itself remain competitive in

the global economy.

The Creative Economy

The creative economy consists of several creative indus-

tries “whose principal orientation is to apply creative ideas.”1

These industries represent an increasing share of the global

economy, generating over $500 billion globally with an aver-

age annual growth rate of 7.5 percent.2 The most prominent

participants in these industries are large multinational con-

glomerates, like Sony, Disney, Google, Amazon, and Apple.

However, businesses in the creative industries are predom-

inantly microenterprises and entrepreneurs, like graphic

designers, writers, Etsy makers, and other independent and

freelance service providers of creative activities.

The concept of the creative economy originated in John

Howkins’s book, The Creative Economy: How People Make

Money from Ideas.3 In the U.S., the creative economy discussion

gained traction from The Rise of the Creative Class by urban

studies theorist Richard Florida.4 In his book, Florida identies

the “creative class”—creative and knowledge-based workers—

as a leading force in economic development because of their

ability to spur growth through innovation.5 Howkins and Florida

were among a cadre of theorists, economists, and public policy

experts at the forefront of a global effort to quantify and measure

the economic impact of creativity and innovation.

The creative economy has many attributes that make it

a viable driver to promote economic growth, development,

and cultural identity. Unsurprisingly, the parameters of how

to dene the sector depend on the policy goals. The United

Nations Conference on Trade and Development (UNCTAD)

describes the “creative economy” as “an evolving concept

based on creative assets . . . [that] foster income genera-

tion, job creation and export earnings while promoting social

inclusion, cultural diversity and human development.”6 Fur-

ther, UNCTAD identies the versatile aspects of the creative

economy that contribute to its successful role in driving eco-

nomic growth:

• It embraces economic, cultural and social aspects interacting

with technology, intellectual property and tourism objectives;

• It is a set of knowledge-based economic activities with

a development dimension and cross-cutting linkages at

macro and micro levels to the overall economy; [and]

• It is a feasible development option calling for innovative mul-

tidisciplinary policy responses and interministerial action.7

Creative industries uniquely intersect with societal benets

like social inclusion and cultural diversity. These noneconomic

attributes, which make the creative economy sector attractive

for public policy solutions, are also more difcult to quantify.

Creative industries constitute the core of the creative econ-

omy but are not always the sole activities included for purposes

of classication. In some contexts, the creative economy is

limited to conventional creative arts industries. The United

Nations Educational, Scientic and Cultural Organization

(UNESCO) denes cultural and creative industries as activities

“whose principal purpose is production or reproduction, pro-

motion, distribution or commercialization of goods, services

and activities of a cultural, artistic or heritage-related nature.”8

While there are several classication models used to identify

creative industries, the industries commonly included are: lit-

erature, music, performing arts, visual arts, lm, museums,

photography, print media, television, radio, computer games,

advertising, architecture, design, and fashion.9

In other contexts, the creative economy sector encom-

passes a much broader scope of activities including science

and technology. UNCTAD denes the creative industries

expansively by enlarging the concept of “creativity” from

activities having a strong artistic component to “any eco-

nomic activity producing symbolic products with a heavy

reliance on intellectual property and for as wide a market as

possible”10 More specically, creative industries:

• are the cycles of creation, production and distribution of

goods and services that use creativity and intellectual capi-

tal as primary inputs;

• constitute a set of knowledge-based activities, focused

on but not limited to arts, potentially generating revenues

from trade and intellectual property rights;

• comprise tangible products and intangible intellectual or

artistic services with creative content, economic value and

market objectives;

• are at the cross-road among the artisan, services and

industrial sectors; and

• constitute a new dynamic sector in world trade.11

For quantifying metrics about the creative economy,

UNCTAD adopts a classication method that cuts across

different industrial sectors with the commonality of being

knowledge-based activities. UNCTAD’s rst report on the

creative economy in 2008 describes the sector’s advantages

for economic development:

It entails a shift from the conventional models towards a

multidisciplinary model dealing with the interface between eco-

nomics, culture and technology and centred on the predominance

Published in Landslide® magazine, Volume 12, Number 4, a publication of the ABA Section of Intellectual Property Law (ABA-IPL), ©2020 by the American Bar Association. Reproduced with permission. All rights reserved.

This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.

In the Industrial Economy Structure (IES), generally speak-

ing, the scientist or the engineer who blew up a blueprint and

handed it over to somebody else saying “this is what I want

you to do,” that’s what he did. On the other hand, in the Cre-

ative Industry Structure (CIS), there is a conversation taking

place between equals. The originator will talk to the pro-

ducer and the producer will talk back to the originator; so

it’s much rather circular. “Distribution” is very important.

I like the word “User” because increasingly the people sit-

ting in the houses under “consumption” are the same people

under “origination.” So whereas the IES was about the linear

development of a product—from “origination” to “consump-

tion”—the CIS is about a collaborative, sharing process.13

Therefore, an effective IP legal system permits creative indus-

tries both to promote the generation of IP and to share that

property for collaboration by creative industry professionals

and consumers, or “users,” of that IP.

While balancing IP stakeholders’ interests remains an

effective legal approach in a creative economy paradigm,

assumptions about how, and which factors to weigh, are

different. The existing legal doctrines are challenged by dis-

ruptive economic factors like the emergence of a sharing

economy, ubiquitous digital copying, and the noneconomic

implications of creative products and services (for example,

establishing cultural identity).

The aspects that make creative industries such vibrant

activities for economic growth also challenge conventional

legal analysis under IP law. Collaborative business mod-

els, common to creative industries, stretch legal concepts of

exclusive rights and use of IP. The collaborative aspects of

creative industries have a benecial economic effect. How-

ever, these aspects also present challenges for enforcement

against unauthorized use of IP. As Howkins points out:

[T]he critical decision is when to share ideas freely and when

to decide to own them. I am working with a successful media

company about their software. Question: should they get pat-

ents and assert copyright or should they allow their staff and

their customers to modify their products? Absolutely critical

question: When to possess; when to give away.14

Fundamentally, in a creative economy system, IP law is

about striking an economic balance for the purpose of pro-

moting creativity and innovation. Even when the business

models for developing IP do not t neatly within dened

legal frameworks for rights protection, it is vital to establish

effective legal solutions to address these new models and to

ensure appropriate exceptions to exclusive rights.

Another disruptive force that challenges established legal

analysis is technological innovation, considered the Fourth

Industrial Revolution “powered by the convergence of numerous

innovations in the physical, biological and digital realms.”15 Dig-

ital technologies have made copying, distributing, and publishing

creative material much easier, cheaper, and faster—tipping the

balance of interests away from copyright owners. The rise of

the creative economy has coincided with a seismic shift in tech-

nological innovation, which has paved the way for creative

of services and creative content. Given its multidisciplinary

structure, the creative economy offers a feasible option as part of

a results-oriented development strategy for developing countries.

It calls for the adoption of effective cross-cutting mechanisms

and innovative interministerial policy action.12

Because the creative industries involve a cross-section

of sectors and disciplines, the creative economy provides a

unique opportunity for cooperation across ministries and for

collaborative solutions.

Balancing Intellectual Property Interests

As creative economy policies have proliferated globally,

questions have arisen about whether existing IP legal systems

adequately support growth in creative industries. Because IP

is integral to the creative economy’s success, laws protecting

rights owners’ interests are essential for creators to benet

economically from their creative pursuits. Equally important

for creative industries growth is a exible legal framework to

accommodate innovative sharing of and public access to these

ideas. Thus, an effective legal framework for sustaining cre-

ative industries ensures mechanisms to balance IP protections

and public access.

Because of the unique attributes of the creative industries,

navigating this balance of interests can be complex. The pro-

cess of frequent interactive and collaborative exchanges is a core

characteristic of the creative economy that distinguishes it from

the industrial economy—under which many IP laws were estab-

lished. John Howkins explains these distinctions more fully:

The creative The creative

economy has economy has

many attributes many attributes

that promote that promote

economic economic

growth, growth,

development, development,

and cultural and cultural

identity.identity.