Friday, September 24, 2010

Is Legal Stuff A Distraction Or A Key Part of Innovation?

There's a tendency to think that innovation is purely about technology.  After more than 15 years in the technology business, I know that isn't true.  Good ideas and great technologies routinely lose out to inferior products.  More enlightened strategies (like IBM's approach to innovation) look at solutions for problems - technology that creates value.

Is the law part of that?  In the past, I would have seen legal issues as impediment to innovation, but not necessarily as a source innovation.  More and more, however, I am seeing that the law itself can not only enable or disable an innovation, it can be a source of innovation., a company in Seattle that is attempting to become a virtual multi-channel distribution system (in other words a cable system with out cable) is engaged in a pitched battle with the major networks and copyright holders over their business model.  IVI is attempting to use the same law that allows cable systems (the ones with actual cables) to retransmit free-to-air broadcast signals.

Is this a loophole or an innovation?  I think it's an innovation.  Having spent the last three months attempting to raise money for my own company, Zediva, I'm tired of hearing about loop-holes.  Property rights and public services are not loopholes, they are essential features of our economy and democracy.  Innovations around how property is handled have been key for our growth.  Joint Stock Companies (public companies with shareholders) were once a legal innovation.  I can just imagine some 17th century VC telling an entrepreneur that selling shares is just a loop-hole for raising money and it won't last.

I've read IVI's complaint in federal court against the major broadcasters.  I have no idea if they will win or lose, but I look forward to the battle. I hope they win - if only because disruption and change bring more innovation.'

A Forest of TV Antennas.  Free to air thanks to taxpayer subsidized spectrum.  Photo CC  D Searls

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