TelstarSat_bLawyers are trained to think about property, including intellectual property, as a “bundle of sticks.”  One stick is the right to possess your property, and another stick is the right to keep others from possessing or using your property.  The right to exclude has long been considered one of the most important sticks in the bundle; the “no trespassing sign” or its equivalent has been one of the definitive elements of property law since the Middle Ages.

In the age of the internet, the right to keep others from using one’s property has been vigorously defended by media companies, whose efforts to prevent piracy of their products have driven a great deal of development in the music and video game industry.  This right has also been reconsidered by software developers, who are finding that loosening the restrictions on the use of their intellectual property is not always a way to lose market power.  Non-profits such as the Apache Software Foundation exist solely to make their intellectual property available to the public free of charge, while major market players like Apple and Google have developed strategies for making their intellectual property available to potential collaborators.

Strategies for allowing the collaborative use of intellectual property fall along a spectrum of restrictiveness.  Apple’s strategy for letting independent developers use its application programming interface (API) falls on the more restrictive end of the spectrum.  Independent developers must work with limited information about the iPhone, and their apps are subject to a review process that ensures their quality and their compatibility with Apple’s vision.  While this  strategy ensures a consistent product and lowers the risk that independent developers will dilute Apple’s market power, it also limits the innovation that independent developers are allowed to bring to the table.

On the other end of the restrictiveness spectrum is the Android platform, an open source platform released by Google under the Apache license.  The “no trespassing” signs have been taken down from this intellectual property; developers are free to use it without a rigorous review process or negotiation with the company that developed it.  This strategy means that low-quality apps will inevitably be developed, and it creates a risk that an independent developer will do something that dilutes Google’s market power.  However, it has also meant that developers designing apps for Google’s Moto X have a much wider range of possibilities for innovation.

In today’s world of fast-paced development, placing less emphasis on the right to exclude others from using one’s intellectual property can be part of a sound business strategy.  Exactly how important the right of exclusion is to a piece of intellectual property depends on where that property fits in with the company’s intellectual property strategy, which in turn depends on how each company organizes its priorities.  Developing a strong strategy for managing intellectual property depends on knowing not only how to guard intellectual property, but also on when to let that guard down.

Garrison Street is committed to helping companies develop innovative strategies that drive their growth; contact us to find out about the solutions we can help develop for your business.