In an age of rapidly advancing technological trends and digital capability, there’s an interesting phenomenon that’s worth taking note of, as well as its structural implications in the law.

Ben Hammersley, in his recent influential book about the internet,

[1] observes that worthwhile ideas bide their time until the technology develops to the point of bringing them to fruition.  He cites the examples of digital cameras, mobile phones and the MP3 player:[2] these products were once upon a time ideas that initially suffered for lack of effective technological means to implement them, were prematurely taken to market, but were destined to succeed as soon as the technology caught up.  As Hammersley reminds us, the first digital cameras were dismissed because of poor picture quality, the first mobile phones were too big and too few songs could be stored on an MP3 player.[3]  In short, what’s needed is that a technologically savvy idea coincides with an equivalent technology.

There’s no question that digital technology is constantly on the move and Hammersley appositely refers to the doubling – every two years, on average – of both computing power (Moore’s Law) and data storage capacity (Kryder’s Law), to support his thesis.[4]  There’s an important proviso though.  The ideas we’re focusing on are prepared to wait for the right technologies but all the while maintain their relevance as measured by their actual utility now or their perceived utility for the future.  When all is said and done, the passage of time is littered with examples of ideas that were probably never good enough to begin with or, alternatively, passed their ‘sell by’ date by the time they became (at least) technologically viable.

What does all of this have to do with the law?

We recently came across a contract that conferred certain rights to distribute digital content (Rights). These Rights were granted for a 5-year period with an option to renew for a further 5 years. The contract defined the Rights quite broadly, so that – in today’s terms at least – the modes of distribution they cover is quite vast. While there’s no doubt they’re particularly valuable now, one has to wonder what the implications will be for these Rights, commercially and at law, over the passage of a 10-year time frame.

More specifically, the question to ask yourself is this: with continuous advancement in digital technology, would you be prepared to bet that the Rights grant will be as effective in, say, 5 years, as they are today?  If the Rights cover all forms of electronic distribution today, the inherent risk is twofold: technology may in the future – especially over 10 years – favour one mode of distribution (for example, IPTV) over any other that we know of today.  Alternatively, future technologies might cause such a fundamental shift in modes of distribution that the channels we know of today might be obsolete in the not too distant future.

To address the risk, we recommended that the Rights holder reserve some flexibility to re-negotiate the content of the Rights in order to ensure their adaptability to technological change and to secure their value.

If you own any digital rights and you want to ensure they maintain their relevance and value for the future, let’s have a chat.

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Reference: [1] Ben Hammersley, 64 things you need to know now for then (Hodder & Stoughton, 2012) [2] Hammersley p14 [3] Ibid [4] Ibid, 11-13