INTELLECTUAL PROPERTY RIGHTS

Intellectual property has played a central role in the advancement of societies, but never more so than today, when technological innovation and ideas reach into every aspect of our lives. Intellectual property accounts for more than $5 trillion in U.S. gross domestic product annually.
But over the past few years the European Commission has been demonstrating its lack of respect for IP. In 2004, the Commission ruled against Microsoft in a lengthy antitrust case, and has been considering cases against other successful U.S. companies including Intel. Apple’s iPod is the subject of restrictive new laws in France.
But the EC’s ruling, upheld on Sept. 17 by Europe’s second highest court, is not just a record fine of nearly $1 billion. It includes demands that amount to forced exposure of some of Microsoft’s most valuable intellectual property, including a requirement that the company redefine its product offering and deliver critical source code to competitors free of charge.
The ruling is part of the pattern in European governments, regulatory bodies, and courts that abuses timetested IP rights. There is a disregard for the innovating progress of one company and rewards for the lack of innovation and sound business principles in others. It is a pattern that historically defeats prosperity and grinds economies to a halt.
The ruling leaves two glaring questions unanswered:
First, what rights do market leaders have to benefit from their own ideas? It would appear that the Commission is insisting that one successful idea must be shared with everyone, free of cost.
Second, at what point does an idea or product become so beneficial and successful that government has the right to strip the originator of the beneficial object and redistribute it among competitors and consumers? Clearly, in the minds of the Commission, Microsoft, Intel, Apple, and other American companies have crossed that line. The court decision has sent shivers down the spine of every CEO who runs a successful business with a large market share.
When intellectual property rights are not respected or protected, wouldbe players in the world of technological invention are sure to get cold feet and lose their drive to produce new products and services. Consumer choice drops to the bottom and customer service quickly follows. As service and quality go down, prices go up.
European legislators, regulators, and judges have a choice: Continue to take the European Union down a path of economic depression and consumer punishment by obstinately violating intellectual property rights, or wake up to the implications of their actions against Microsoft, other U.S. companies, and their own domestic businesses and restore an environment that protects property rights. The court ruling indicates that Europe will be enjoying its anti-IP slumber for years to come.