| Three years ago I published a book of
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| | very price sensitive and highly elastic.
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| short stories in Israel. The publishing
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| | Lower prices will be more than
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| house belongs to Israel's leading (and
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| | compensated for by a much higher sales
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| exceedingly wealthy) newspaper. I signed
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| | volume. There is no other way to explain
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| a contract which stated that I am
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| | the pirate industries : evidently, at the
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| entitled to receive 8% of the income from
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| | right price a lot of people are willing
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| the sales of the book after commissions
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| | to buy these products. High prices are an
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| payable to distributors, shops, etc. A
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| | implicit trade-off favouring small,
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| few months later (1997), I won the
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| | elite, select, rich world clientele. This
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| coveted Prize of the Ministry of
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| | raises a moral issue : are the children
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| Education (for short prose). The prize
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| | of Macedonia less worthy of education and
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| money (a few thousand DMs) was snatched
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| | access to the latest in human knowledge
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| by the publishing house on the legal
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| | and creation ?Two developments threaten
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| grounds that all the money generated by
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| | the future of intellectual property
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| the book belongs to them because they own
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| | rights. One is the Internet. Academics,
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| the copyright.In the mythology generated
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| | fed up with the monopolistic practices of
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| by capitalism to pacify the masses, the
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| | professional publications - already
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| myth of intellectual property stands out.
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| | publish on the web in big numbers. I
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| It goes like this : if the rights to
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| | published a few book on the Internet and
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| intellectual property were not defined
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| | they can be freely downloaded by anyone
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| and enforced, commercial entrepreneurs
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| | who has a computer or a modem. The full
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| would not have taken on the risks
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| | text of electronic magazines, trade
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| associated with publishing books,
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| | journals, billboards, professional
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| recording records, and preparing
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| | publications, and thousands of books is
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| multimedia products. As a result,
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| | available online. Hackers even made sites
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| creative people will have suffered
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| | available from which it is possible to
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| because they will have found no way to
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| | download whole software and multimedia
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| make their works accessible to the
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| | products. It is very easy and cheap to
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| public. Ultimately, it is the public
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| | publish on the Internet, the barriers to
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| which pays the price of piracy, goes the
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| | entry are virtually nil. Web pages are
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| refrain.But this is factually untrue. In
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| | hosted free of charge, and authoring and
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| the USA there is a very limited group of
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| | publishing software tools are
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| authors who actually live by their pen.
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| | incorporated in most word processors and
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| Only select musicians eke out a living
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| | browser applications. As the Internet
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| from their noisy vocation (most of them
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| | acquires more impressive sound and video
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| rock stars who own their labels - George
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| | capabilities it will proceed to threaten
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| Michael had to fight Sony to do just
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| | the monopoly of the record companies, the
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| that) and very few actors come close to
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| | movie studios and so on.The second
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| deriving subsistence level income from
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| | development is also technological. The
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| their profession. All these can no longer
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| | oft-vindicated Moore's law predicts the
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| be thought of as mostly creative people.
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| | doubling of computer memory capacity
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| Forced to defend their intellectual
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| | every 18 months. But memory is only one
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| property rights and the interests of Big
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| | aspect of computing power. Another is the
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| Money, Madonna, Michael Jackson,
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| | rapid simultaneous advance on all
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| Schwarzenegger and Grisham are
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| | technological fronts. Miniaturization and
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| businessmen at least as much as they are
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| | concurrent empowerment by software tools
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| artists.Economically and rationally, we
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| | have made it possible for individuals to
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| should expect that the costlier a work of
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| | emulate much larger scale organizations
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| art is to produce and the narrower its
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| | successfully. A single person, sitting at
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| market - the more emphasized its
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| | home with 5000 USD worth of equipment can
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| intellectual property rights.Consider a
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| | fully compete with the best products of
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| publishing house.A book which costs
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| | the best printing houses anywhere.
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| 50,000 DM to produce with a potential
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| | CD-ROMs can be written on, stamped and
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| audience of 1000 purchasers (certain
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| | copied in house. A complete music studio
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| academic texts are like this) - would
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| | with the latest in digital technology has
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| have to be priced at a a minimum of 100
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| | been condensed to the dimensions of a
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| DM to recoup only the direct costs. If
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| | single chip. This will lead to personal
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| illegally copied (thereby shrinking the
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| | publishing, personal music recording, and
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| potential market as some people will
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| | the to the digitization of plastic art.
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| prefer to buy the cheaper illegal copies)
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| | But this is only one side of the
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| - its price would have to go up
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| | story.The relative advantage of the
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| prohibitively to recoup costs, thus
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| | intellectual property corporation does
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| driving out potential buyers. The story
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| | not consist exclusively in its
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| is different if a book costs 10,000 DM to
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| | technological prowess. Rather it lies in
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| produce and is priced at 20 DM a copy
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| | its vast pool of capital, its marketing
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| with a potential readership of 1,000,000
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| | clout, market positioning, sales
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| readers. Piracy (illegal copying) should
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| | organization, and distribution
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| in this case be more readily tolerated as
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| | network.Nowadays, anyone can print a
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| a marginal phenomenon.This is the theory.
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| | visually impressive book, using the
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| But the facts are tellingly different.
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| | above-mentioned cheap equipment. But in
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| The less the cost of production (brought
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| | an age of information glut, it is the
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| down by digital technologies) - the
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| | marketing, the media campaign, the
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| fiercer the battle against piracy. The
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| | distribution, and the sales that
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| bigger the market - the more pressure is
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| | determine the economic outcome.This
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| applied to clamp down on samizdat
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| | advantage, however, is also being
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| entrepreneurs.Governments, from China to
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| | eroded.First, there is a psychological
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| Macedonia, are introducing intellectual
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| | shift, a reaction to the
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| property laws (under pressure from rich
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| | commercialization of intellect and
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| world countries) and enforcing them
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| | spirit. Creative people are repelled by
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| belatedly. But where one factory is
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| | what they regard as an oligarchic
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| closed on shore (as has been the case in
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| | establishment of institutionalized,
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| mainland China) - two sprout off shore
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| | lowest common denominator art and they
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| (as is the case in Hong Kong and in
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| | are fighting back.Secondly, the Internet
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| Bulgaria).But this defies logic : the
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| | is a huge (200 million people), truly
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| market today is global, the costs of
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| | cosmopolitan market, with its own
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| production are lower (with the exception
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| | marketing channels freely available to
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| of the music and film industries), the
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| | all. Even by default, with a minimum
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| marketing channels more numerous (half of
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| | investment, the likelihood of being seen
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| the income of movie studios emanates from
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| | by surprisingly large numbers of
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| video cassette sales), the speedy
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| | consumers is high.I published one book
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| recouping of the investment virtually
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| | the traditional way - and another on the
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| guaranteed. Moreover, piracy thrives in
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| | Internet. In 50 months, I have received
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| very poor markets in which the population
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| | 6500 written responses regarding my
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| would anyhow not have paid the legal
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| | electronic book. Well over 500,000 people
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| price. The illegal product is inferior to
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| | read it (my Link Exchange meter
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| the legal copy (it comes with no
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| | registered c. 2,000,000 impressions since
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| literature, warranties or support). So
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| | November 1998). It is a textbook (in
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| why should the big manufacturers,
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| | psychopathology) - and 500,000 readers is
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| publishing houses, record companies,
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| | a lot for this kind of publication. I am
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| software companies and fashion houses
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| | so satisfied that I am not sure that I
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| worry?The answer lurks in history.
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| | will ever consider a traditional
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| Intellectual property is a relatively new
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| | publisher again. Indeed, my last book was
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| notion. In the near past, no one
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| | published in the very same way.The demise
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| considered knowledge or the fruits of
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| | of intellectual property has lately
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| creativity (art, design) as 'patentable',
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| | become abundantly clear. The old
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| or as someone's 'property'. The artist
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| | intellectual property industries are
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| was but a mere channel through which
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| | fighting tooth and nail to preserve their
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| divine grace flowed. Texts, discoveries,
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| | monopolies (patents, trademarks,
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| inventions, works of art and music,
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| | copyright) and their cost advantages in
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| designs - all belonged to the community
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| | manufacturing and marketing.But they are
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| and could be replicated freely. True, the
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| | faced with three inexorable processes
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| chosen ones, the conduits, were honoured
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| | which are likely to render their efforts
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| but were rarely financially rewarded.
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| | vain:The Newspaper PackagingPrint
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| They were commissioned to produce their
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| | newspapers offer package deals of cheap
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| works of art and were salaried, in most
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| | content subsidized by advertising. In
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| cases. Only with the advent of the
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| | other words, the advertisers pay for
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| Industrial Revolution were the embryonic
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| | content formation and generation and the
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| precursors of intellectual property
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| | reader has no choice but be exposed to
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| introduced but they were still limited to
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| | commercial messages as he or she studies
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| industrial designs and processes, mainly
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| | the content.This model - adopted earlier
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| as embedded in machinery. The patent was
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| | by radio and television - rules the
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| born. The more massive the market, the
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| | internet now and will rule the wireless
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| more sophisticated the sales and
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| | internet in the future. Content will be
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| marketing techniques, the bigger the
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| | made available free of all pecuniary
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| financial stakes - the larger loomed the
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| | charges. The consumer will pay by
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| issue of intellectual property. It spread
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| | providing his personal data (demographic
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| from machinery to designs, processes,
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| | data, consumption patterns and
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| books, newspapers, any printed matter,
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| | preferences and so on) and by being
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| works of art and music, films (which, at
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| | exposed to advertising. Subscription
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| their beginning were not considered art),
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| | based models are bound to fail.Thus,
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| software, software embedded in hardware,
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| | content creators will benefit only by
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| processes, business methods, and even
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| | sharing in the advertising cake. They
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| unto genetic material.Intellectual
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| | will find it increasingly difficult to
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| property rights - despite their noble
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| | implement the old models of royalties
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| title - are less about the intellect and
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| | paid for access or of ownership of
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| more about property. This is Big Money :
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| | intellectual property.DisintermediationA
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| the markets in intellectual property
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| | lot of ink has been spilt regarding this
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| outweigh the total industrial production
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| | important trend. The removal of layers of
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| in the world. The aim is to secure a
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| | brokering and intermediation - mainly on
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| monopoly on a specific work. This is an
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| | the manufacturing and marketing levels -
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| especially grave matter in academic
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| | is a historic development (though the
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| publishing where small- circulation
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| | continuation of a long term
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| magazines do not allow their content to
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| | trend).Consider music for instance.
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| be quoted or published even for
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| | Streaming audio on the internet or
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| non-commercial purposes. The monopolists
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| | downloadable MP3 files will render the CD
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| of knowledge and intellectual products
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| | obsolete. The internet also provides a
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| cannot allow competition anywhere in the
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| | venue for the marketing of niche products
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| world - because theirs is a world market.
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| | and reduces the barriers to entry
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| A pirate in Skopje is in direct
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| | previously imposed by the need to engage
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| competition with Bill Gates. When he
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| | in costly marketing ("branding")
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| sells a pirated Microsoft product - he is
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| | campaigns and manufacturing
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| depriving Microsoft not only of its
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| | activities.This trend is also likely to
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| income, but of a client (=future income),
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| | restore the balance between artist and
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| of its monopolistic status (cheap copies
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| | the commercial exploiters of his product.
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| can be smuggled into other markets), and
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| | The very definition of "artist" will
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| of its competition-deterring image (a
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| | expand to include all creative people.
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| major monopoly preserving asset). This is
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| | One will seek to distinguish oneself, to
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| a threat which Microsoft cannot tolerate.
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| | "brand" oneself and to auction off one's
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| Hence its efforts to eradicate piracy -
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| | services, ideas, products, designs,
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| successful in China and an utter failure
| |
| | experience, etc. This is a return to
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| in legally-relaxed Russia.But what
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| | pre-industrial times when artisans ruled
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| Microsoft fails to understand is that the
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| | the economic scene. Work stability will
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| problem lies with its pricing policy -
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| | vanish and work mobility will increase in
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| not with the pirates. When faced with a
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| | a landscape of shifting allegiances, head
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| global marketplace, a company can adopt
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| | hunting, remote collaboration and similar
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| one of two policies: either to adjust the
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| | labour market trends.Market
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| price of its products to a world average
| |
| | FragmentationIn a fragmented market with
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| of purchasing power - or to use
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| | a myriad of mutually exclusive market
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| discretionary differential pricing (as
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| | niches, consumer preferences and
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| pharmaceutical companies were forced to
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| | marketing and sales channels - economies
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| do in Brazil and South Africa). A
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| | of scale in manufacturing and
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| Macedonian with an average monthly income
| |
| | distribution are meaningless.
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| of 160 USD clearly cannot afford to buy
| |
| | Narrowcasting replaces broadcasting, mass
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| the Encyclopaedia Encarta Deluxe. In
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| | customization replaces mass production, a
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| America, 50 USD is the income generated
| |
| | network of shifting affiliations replaces
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| in 4 hours of an average job. In
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| | the rigid owned-branch system. The
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| Macedonian terms, therefore, the Encarta
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| | decentralized, intrapreneurship-based
|
| is 20 times more expensive. Either the
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| | corporation is a late response to these
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| price should be lowered in the Macedonian
| |
| | trends. The mega-corporation of the
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| market - or an average world price should
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| | future is more likely to act as a
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| be fixed which will reflect an average
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| | collective of start-ups than as a
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| global purchasing power.Something must be
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| | homogeneous, uniform (and, to conspiracy
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| done about it not only from the economic
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| | theorists, sinister) juggernaut it once
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| point of view. Intellectual products are
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| | was.
|
