IP Ain't Stupid

I ran across this little nugget o' news via Dean Esmay and Instapundit. Professor Reynolds takes the more reasonable view of this issue, whereas Mr. Esmay just thinks it's stupid and unreasonable. Me? I have no problem with the lawsuits per se. I think someone is setting an unreasonable value on this particular use of the IP, but the lawsuits themselves aren't stupid.

Full disclosure time.: I am a product design engineer. Everything I deal with on a daily basis has some underlying IP. Part of my job is to generate new IP and to scrutinize the competition to figure out ways around their IP. It's a fun job, some days.

My company takes the protection of its intellectual property quite seriously, to the tune this year of just over 100 million dollars. We sue the living shit out of people that copy our designs and technology. We have to sue, because our corporate IP is one of our sustainable competitive advantages. In certain core areas, we have the best technology in the world. If we let people copy our IP, we would go out of business.

The point that Mr. Esmay misses is that you can't let anybody start copying your designs. If you let them copy the look of a particular item, the next thing they'll do is copy the product. I realize a 1/12th scale plastic model is not going to replace a fighter jet any time soon, but there is a slippery slope here. Once somebody starts copying the design in some aspect and you let it slide, you have that much less legal argument when someone else starts copying and you object. If you cede control of your IP in any fashion, it is that much harder to regain control later. The simple answer is to not let anybody do it without payment. This is the reason Disney is so absolutely rabid about the protection of their IP.

Having said that, model licensing is essentially a free revenue stream. If you can cover the marginal costs of the IP agreement, who cares how much money it brings in? Something like this is never going to be a major profit center for a defense contractor. License the IP for a penny a model (or something similar) and move on. This is where the stupidity comes into play. You can't reasonably expect to charge a $40 licensing fee per item on something that sells for $12.99 retail. You're a complete and total moron if you think that will work. However, defense contractors have demonstrated a questionable understanding of real business practices in the past, so maybe I'm expecting too much.

If you think that putting the model companies out of business serves some later long term goal, you're again wrong. The kids that build these models grow up to design, build and maintain vehicles. You're discouraging people from becoming interested in your products and your company. This is a long-term proposal for obsolescence.

This presumes, of course, that the company in question owns the IP to the design. If the vehicle or aircraft is produced under contract to the US government, the government may own the design, in which case all bets are off. I have no earthly idea how that would work.


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