Transcript: Knowledge Governance Calls For Information Balance

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Interview with Leonardo Burlamaqui

For podcast release Monday, September 22, 2014

KENNEALLY: In the 21st century, education and innovation drive economic development and national achievement. Knowledge, likewise, fuels the creative destruction that remakes companies and cultures. Welcome to Copyright Clearance Center’s podcast series. I’m Christopher Kenneally for Beyond the Book.

Around the world, politicians and pundits trumpet the knowledge economy, but few have ever bothered to examine with any rigor the success-to-failure ratio of national and international intellectual property law and regulations.

Arguing that private and public interests are critically out of balance, Leonardo Burlamaqui advocates for a shakeout in the knowledge industries and a new knowledge framework for IP that he calls knowledge governance.

The coeditor of Knowledge Governance, published by Anthem Press, he joins me now from his office in Brazil, where he teaches at the State University of Rio de Janeiro. Leonardo Burlamaqui, welcome to Beyond the Book.

BURLAMAQUI: Hi, Chris. Thank you very much. Thanks for having me here. And hello, everyone.

KENNEALLY: We are looking forward to the conversation because it’s an intriguing notion here about this dividing line between private interests and the public interest – the public domain, if you will. And so I think we ought to help people understand what the issue is as you see it by talking about the current state of the knowledge industries and the knowledge economy as you see it.

BURLAMAQUI: Yeah. Chris, what strikes me – and I think strikes us – every one of us which wrote chapters for that book – is the unbalanced state of precisely what you said in terms of referring to the private sphere or private interests and the public interests and the public sphere because, what we see more and more – but that has been the case for at least the last 30 to 40 years – is a sort of a redesigning the frontier or the boundaries in between public interests – public domain – and private interests – private domain – in a way that private interests are getting more and more power in terms of appropriation of the fruits of knowledge, which means the IP laws – intellectual property laws and regulations – they are getting tougher and tougher, which means that private corporations, private interests – again, they are getting more and more of what they invest in – most of the cases, what really begins with public funding.

Let me just clarify that a little bit – public funding of R&D – of basic R&D. If you take a look at big pharma, if you take a look at the software industries, if you take a look at Silicon Valley, etc., most cases, corporations – the very beginning of research – basic research – which is the one which carries a lot of uncertainty and where the failure rate is quite high – that part of R&D is generally funded by some public entity.

Just to refer you to a very intriguing case in that regard, the U.S., which – well, in terms of conventional wisdom – is the place where you have entrepreneurs and private venture capital funding almost anything. The reality is that now, as we speak, some of the most powerful sources of public funding of R&D are the CIA, the U.S. Army, the Department of Energy, the Department of Defense. And I could go on and on, but let’s just stop here. Right?

KENNEALLY: Well, in fact we might remind people that the very basis for the Internet, which is driving the knowledge economy, was the ARPANET developed by the Department of Defense in the 1960s.

BURLAMAQUI: Exactly – ARPA and then DARPA, and now we have DARPA-E, which is the DARPA for energy, which is located on the Department of Defense. What can we then – what’s the follow-up, logically speaking, from this – is that the state or the government of public funds, if you will – they are in the very beginning of the process.

But what happens at the end of the process? Well, the appropriation of profits are, like I said, more and more guided by a set of rules which are privately written. So the IP rules and regulations – intellectual property rules and regulations – most of them are really written by those big law firms, which are able to obviously twist it or bias those laws in a way that the appropriation goes back to private corporations.

But let’s get back to what we just said – we just discussed. Who funded those things in the very beginning? Answer is, well, public funding. So the question that I think should be asked is, well, if the public money was there in the very beginning, why not have some sort of mechanism that also makes a fair distribution of the returns, the profits? So with that – this is the backbone or the kernel, if you will, of this perspective that we call knowledge governance. It’s in opposition in a way to the whole idea of intellectual property.

And then I’m going to use another slightly different term – intellectual property rights – because this is what comes up very, very often in the literature – is that those would be like natural rights – intellectual property rights. Well, they’re not rights. They are rules and regulations.

And the question is why are those rules and regulations biased so much towards the private interests in a way that – and I’ll finish my first take with that – in a way that very frequently, instead of stimulating innovation, they end up harming dissemination because innovators or whoever began with some product and got a patent becomes so protected that, to disseminate, to try to improve around the innovation or even to license it becomes so difficult that, in the end, let’s say the public interest gets harmed.

So a little bit of protection on innovation obviously works, and we can easily make the case for that. The question that becomes tricky is why so much protection, given the fact that, in a lot of the cases, you have public money in the very beginning of the funding mechanism or the funding process for technology, innovation, etc.?

KENNEALLY: Right. And so the point that you’re making here is that, given this knowledge economy we live in and the way that knowledge and education are really the drivers of economic development, it’s important to look at – as closely as we can and with some real data – knowledge generation and the paths that it takes as it’s spread throughout a system – throughout any kind of economic system. And you’re saying that what we see today is this kind of hyper protection in the legal sphere and a kind of privatization of knowledge.

BURLAMAQUI: Yeah, precisely. And one of the things which is also mind-boggling I would say is, if you look at the intellectual property rights and regulations, what those things are, very briefly stated – they are claims for a state monopoly. Right? It’s the state who gives the corporations a monopoly over 17, 20 or, in copyrights – I don’t know – it goes from to 70 years to 90 years.

This is – let me repeat – a legal monopoly claimed by corporations and private interests to the state. How does one reconcile this claim for legal protection – monopolies again – monopolies – OK – given to them by the state with the idea of a free market economy? A free market economy shouldn’t be one that is completely filled with a ton of pieces or contracts which are really legal monopolies.

It doesn’t really square, right? I don’t if I’m making myself clear. A free market is something that shouldn’t be permeated by monopolies which are given by the state. It should be – I don’t know – the exception. It shouldn’t be the rule.

KENNEALLY: Well, indeed. And the rule that you’re proposing in the book Knowledge Governance – you and your coeditors and co-contributors – is this notion of knowledge governance, which is, if you will, putting the public interest front and center. So tell us how it would work and how you propose to begin to shift this what you call imbalance back towards, if you will, a center state.

BURLAMAQUI: Sure. The book is somewhat complex in a way that it has several contributors and several contributions, so let me just give you a couple of examples of how this would work or how we think things could be improved in terms of policy or institutional restructuring, institutional reform.

The first example – if the government – let’s say DARPA, right – if DARPA had – well, as we know it did – it had a hand in most of the revolutionary softwares that now we call Silicon Valley – right – why not, if they did it in terms of funding the whole thing – why they couldn’t – they – who – the agencies – the public agencies who were in charge of doing that – why they couldn’t claim or establish a sort of golden share in terms of also being able to appropriate a share of the profits generated by all those corporations as, for example, Amazon, Google, Apple, Xerox – you name it – and they were there?

Well, this would be a big chunk of money.

KENNEALLY: It would be a windfall, in fact.

BURLAMAQUI: Perfect – and not only a windfall, because those corporations keep generating huge cash flows, with very handsome profits. So this would be a robust flow of profits that would go where? Well, back to the public. So this is one thing that is not that difficult to do. Well, it’s difficult politically speaking, but it’s not rocket science in terms of how you would be able to establish this. And it would be fair.

The second example is something that is called – well, this is a strategy that a lot of corporations use, which is to patent something but not use the patent. So you patent something either because you don’t want your competitors to use it or you just want to patent to use it as a sort of a financial asset, meaning you’re going to sell or trade or whatever this patent at some time in the future. So it’s something that is – it’s there. It was granted and is not being used.

Our suggestion is – in that regard – is to treat those patents which are earned by not used as some sort of unfertile land in the sense that, if you don’t use it, it will be taxed at a higher and higher rate because it’s simply not being used, so it’s unproductive.

It’s a very clear example of what a few authors would call unproductive entrepreneurship, because you can see that there is entrepreneurship in doing that, but the result is absolutely not productive. It’s unproductive. It could even be claimed that, at some point, it’s some sort of destructive entrepreneurship, because this is knowledge that is being taken by the private sphere and it’s being (inaudible). And whoever gets it is preventing its public use.

Again, knowledge diffusion, which is at the heart of what people call the knowledge economy, is not getting more fluid with this. On the contrary, it’s getting less fluid with that – so two different sort of institutional or policy changes or reforms that would, from a knowledge governance perspective – they would help the dissemination over – let’s say help knowledge dissemination over the right to exclude.

So the right to disseminate should be front and center. The right to exclude should be left – should be left to the margin. It should be a special case.

KENNEALLY: We are speaking today with Leonardo Burlamaqui, who is the coeditor of Knowledge Governance from Anthem Press. And he joins us from his office in Rio de Janeiro, where he teaches at the State University of Rio de Janeiro.

And Leonardo, I wonder if you could tell us about this notion of a balance here. Is it possible to have, in a world of knowledge networks, proprietary and public networks coexist – or are you suggesting that the knowledge networks should be shifted to be entirely public?

BURLAMAQUI: No, I think that the coexistence would be most certainly the best way for going forward, because I’m not advocating here a complete elimination of intellectual property – again – rules – not rights. They’re not natural rights, but rules and regulations.

I think there is a place for them, but not the one that currently is the case – the one that prevails, let’s say, in the TRIPS agreements under the WTO or in other agreements in bilateral trade and investment agreements.

So in that sense, I think that to balance public and private – it’s something that is clearly desirable. But this would require a much more, let’s say, empirically oriented sort of research in terms of understanding the specificities of different sectors and the way the R&D and the way innovation and technical progress is delivered, because different sectors, I would say, would call for different rules. Right?

And one example that right now, I think, is making big progress in terms of that conversation – and not only that conversation, but the sort of the institutional landscape – is the Creative Commons – like Creative Commons regimes, where you can license things in ways that, for example, if I publish a book, I can – if you want to buy the book in a bookstore, then – great – you do it. There are copyrights, etc.

But on the other hand, as the author, we did an agreement with the publisher – I can also make that title available under a Creative Commons license for people who want to get it, let’s say, in PDF. And they could go to a site or to my Web page and do that. So what I’m trying to say is this is a very under-researched area in terms of the kinds of arrangements that could be built in the area.

One book that is a brilliant book by a legal scholar called Yochai Benkler – it’s called The Wealth of Networks. It’s – I don’t know – now it’s probably at least eight years since it was published. It won a few prizes.

It’s brilliant in the sense that it identifies some of those arrangements in place, and it gives us some ideas in terms of how to begin to think about that stuff in a different form. So I would place Yochai’s book precisely within that frame that we’re suggesting in the book – Knowledge Governance – framework.

KENNEALLY: Right. And The Wealth of Networks is an interesting play, of course, on the very famous Wealth of Nations. And I think it makes a point that I found fascinating in your own book, which is a way to look at economics in our current age, in the 21st century, as about not only financial issues and financial concerns, but about non-financial ones – that this importance of intellectual property, of ideas, of intangible assets is increasingly important, and we must take account of it when we think about economic questions.

BURLAMAQUI: Yeah, absolutely. If you want, one of the biggest influences in my thinking about this is Joseph Schumpeter.

And if you go to, let’s say, the most basic model of Schumpeter’s theory of economic development, what do you have? You have, on one side, the credit system. So, like you just mentioned, finance is there since the beginning. You have to have credit. You have to have funding. Funding for what? Funding for investment, especially, in Schumpeter’s case, funding for innovation.

So you have finance and you have knowledge, because innovation streams from what? From new ways of using knowledge or from new knowledge that is created. So those two things – they go together always in Schumpeter’s framework. And I think it’s a very accurate way to think about how can we think about the economy – how can we think about capitalism today? Knowledge is one side of the coin. Finance is the other. So they have to go together.

KENNEALLY: Indeed. And I was going to say that, just for listeners’ sake, of course Schumpeter is the father of creative destruction, something which we hear about so regularly in our own age.

BURLAMAQUI: Yeah, exactly. And if you go follow his model, then you’re going to see that knowledge and finance are very much together, and they need each other. And what I think that we all need is that those things are regulated and governed from a public interest perspective.

And that, I think, we can perfectly apply to finance as much as we’re discussing with knowledge. Finance – what did we have since 2007? It was more or less the same thing private interests and sort of the private sphere appropriated completely and remade all the rules and the regulations, etc. And what did we get? Did we get more prosperity? Did we get sort of markets behaving smoothly, things like that? I don’t think so.

I think we’re still struggling – Europe especially – still struggling – well, here in Brazil, we still have some scars from that financial crisis that began with, I would say, something very similar with what happened in the knowledge field, which was the redesigning of the boundaries or frontiers in a way that we had a contraction of the public sphere and we had a hyper-extension of the field of private interests in a way that they were able to reregulate the way they work and they function.

This happened in finance. This happened in knowledge. And I would say the results are not great.

KENNEALLY: Well, Leonardo Burlamaqui, who is the coeditor of Knowledge Governance from Anthem Press, thank you so much for joining us on Beyond the Book.

BURLAMAQUI: Well, thank you very much. Thanks for having me. And it was a great pleasure talking to you.

KENNEALLY: Beyond the Book is produced by Copyright Clearance Center, a global rights broker for the world’s most sought-after materials, including millions of books and e-books, journals, newspapers, magazines and blogs, as well as images, movies and television shows. You can follow Beyond the Book on Twitter, find us on Facebook and subscribe to the free podcast series on iTunes or at our Website,

Our engineer and co-producer is Jeremy Brieske of Burst Marketing. My name is Christopher Kenneally. For all of us at Copyright Clearance Center, thanks for listening to Beyond the Book.

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