The Recording Industry Association of America, meanwhile, has won the right to compel Internet service providers to divulge the names of users who share copyrighted music over peer-to-peer networks. And as any Microsoft customer knows, you don’t actually own digitized intellectual properties like music, movies, or software, anyway-you “license” them under explicit terms and conditions. Violating the license can be a crime. And as ever more sophisticated remote-monitoring technologies kick in, Sony or Microsoft’s ability to seek out miscreants and extract legal damages is dramatically improving.
Unsurprisingly, consumers and even businesses are starting to cry “Foul!” Software licensing terms are but one battleground. Fortune 1,000 firms worldwide, for example, are painfully familiar with their software vendors’ abilities to track who’s using what features and functionality. Not only does unauthorized use of the software assure a call from an aggressive lawyer, but the ability to see how many employees are still using version n lets vendors launch a storm of upselling whenever they decide it’s time to “encourage” their corporate clients to upgrade to version n+1. Many CIOs now point to the onerous licensing terms imposed by Microsoft and other vendors as a direct cause of the rise in corporate use of open-source Linux.
As intellectual property increasingly becomes the critical value-added component of competitive innovation, the fear that it may leak or seep away through inappropriate copying is completely understandable. Similarly, wrapping services such as remote monitoring and tracking around the products companies sell may seem like an eminently reasonable way of maintaining ongoing relationships with customers.
But the business consequences of “customer-as-criminal” mindsets are inevitably perverse. For customers, the prospect that vendors are looking over their shoulders to track whether this copy is authorized and that usage is approved creates a powerful disincentive to embrace innovation. Antipiracy, anticopying, pro-monitoring licensing agreements and the invasive technologies used to enforce them make it riskier than ever to be an innovation adopter. The customer may not always be right, but she ain’t always a thief, either. Honest.