The internet is fantastic business tool. Particularly in countries such as New Zealand, which are geographically isolated and have small population, the internet presents an opportunity to reach whole new world of potential markets. Even for very niche products, widened market of all internet users offers the potential to support business that would not otherwise be viable within New Zealand.
Although the benefits to business are numerous and far-reaching, the flip side is that the same technology presents some real risks and challenges that cannot be ignored. These include:
• The ease of copying.
• The perfection of the copy.
• The ease of distributing the copies.
• Difficulty in locating copies.
• Difficulty in enforcing your rights in relation to the copies.
• Inadvertent leaking of ideas and information.
Copying
In the past, copying technology resulted in less-than-perfect reproduction (whether it was photocopying, copying pictures or videos, or copying sound recording). But technology has advanced to such an extent that not only is it easier to create copies, but the quality of the copies has reached perfection, making it extremely difficult to discern the original from the copy.
The internet has also offered an incredibly easy tool to distribute these copies anywhere in the world. The original owner has rights to stop this copying – and rights in relation to the copies that are made – but exercising these rights is not that easy.
First the owner has to be aware that the copying has occurred (which is not as easy as it sounds). Then they have to locate the person who has carried out the copying – again not an easy task. And finally they have to get court to enforce their rights in the country where the copier and the copies are – not cheap or quick process.
At the core of the law is the ability to sue and enforce your rights. However you have to consider the risks of this. Different markets have different rules (sometimes large, sometimes quite subtle) applying to intellectual property and how it is protected. On global scale, it could prove very expensive for New Zealand company to sue in another territory. You have to consider whether you can afford to pursue case – and actually, if you have the time and energy to do it.
Unlike physical or tangible assets like car or house, the owner can’t lock up creation or idea, or build fence around it. But, assuming that the owner wants to limit access to the creation, they can do the virtual equivalent of locking it up.
Such protection is effectively limiting someone else’s access to the creation. For example, if you’re selling works over the internet, the owner could:
• Ensure that anything of value is not able to be accessed unless the owner knows or can find the person that is downloading or accessing it. An example would be to show low-resolution or watermarked copies of the photo that you are selling, but have high-resolution versions available only on being paid and with enough information to locate the purchaser. You could keep record of the purchasers of the photo, so that if there are improper copies released you have short-list of those who might have created them.
• Or you could use technology within the work so that it is of no use unless you get another key part not available over the internet, so that you can get payment, know the identity of the person and nullify the value of the copy. For example, you could ensure that any samples of the software you are selling are able to be accessed on ‘try before you buy’ basis and are of limited use with limited functionality. You could embed in the software product technology that requires valid software key issued on an individual basis, so that the key for one version cannot be used in another.
But if you’re planning to restrict access, you need to do cost-risk analysis. Limiting access, having two-step sale process or identity checks may scare away customers.
Ask yourself; do the costs of protecting the work outweigh the benefits of preventing unauthorised copying or your ability to enforce your rights? Even in deciding who accesses it, there are decisions to be made.
The owner needs to think about what degree of verification is appropriate. Will you accept hotmail addresses? Will you require physical addresses, telephone numbers, credit card details? Will you actually check that the numbers are correct? Verification could be costly, but could be worthwhile in the long run.
Obviously, with work where you expect to only sell few, with high margins, you may tend more towards greater protection. However, for works that have mass-market appeal with low margins, it may not be worth the cost of verification, the costs of two-step sale process and the likely lost sales from these.
Having one or two copies without payment is perhaps risk the owner would assume on the basis that it’s not worth pursuing the party or incurring costs for small retail value.
Of course, in addition to locking up the work, the owner can make sure buyers want to purchase from them because of added value (actual or perceived). This might come in the form of increased levels of support, reputation or branding associated with market leadership quality.
You only have to think about any famous brand to see how perception can make the difference in purchaser’s selection. For example, there are any number of colas on the market, but people regularly buy Coke and Pepsi. Why? Taste preference? Possibly – but have they tried the other colas? Brand loyalty can make huge difference. So does the image of serving up Coke or Pepsi versus Simon’s Cola.
Leaks
The internet also means information can easily be inadvertently leaked and the value of an idea can be lost if it is leaked.
The ease and speed of information sharing by email means people don’t stop to think about the information they’re sending. When you hand over physical copies of plans you may pause and wonder if it is good idea, but attaching copy is so simple that the same thought process doesn’t always happen. The problem has only got worse with the rise of social media and networking technology.
As result, it is important for employers, particularly those in the creative industries, to ensure that staff who might have access to information are educated about the risk. Employers should consider developing guidelines on what can and cannot be done using technology and what access staff get to social media websites.
If an employee might post information in the wrong place, the guidelines should be included as part of their employment contract. This will hopefully flag the issue as an important one in the minds of employees and will also give the employer basis for legal action if the rules are breached. Any company that regularly engages contractors, either individuals or companies, should also consider including similar terms in any contractor’s agreements.
The employer also needs to consider whether they exclude access to Facebook or other social networking sites from within the work environment.
Remember, the internet has enhanced opportunities for creating viable, profitable businesses – but it also comes with additional risks.
Internet material is intangible and there are challenges to stopping it being distributed, copied or leaked. An owner has rights, but it may be difficult to enforce these rights if you can’t find the infringer, if it’s too expensive to pursue the infringer, or if it’s difficult because of jurisdiction issues.
Basically, the owners of commercially-sensitive material should take practical steps to lock up their works in the same way that they would lock up their factory, their car, or their home.
They need to consider what level of access they will permit to their idea or work, what level of identification or verification they will have, and what type of person they will allow to have access
