California IP

I’ve been spending a fair amount of time lately thinking about the history of California’s “IP industries”, the current state-of-affairs, and where we’re headed as an economy.  All grandiose thoughts to be sure, but for the sake of your attention spans I’ll try to keep this reasonably short.  Intellectual property or “IP” has proven to be a very valuable asset since the original IP laws were created.  If you don’t believe me, just take a look at Intel, Microsoft, Pfizer, Disney or the plethora of other such S&P 500 companies whose businesses are predicated upon the creation, transfer, and protection of IP.  So what is IP and what does it have to do with California?

At it’s most basic levels, IP embodies patents, copyrights, trademarks/servicemarks, and trade secrets and are a set of rights afforded by our legal system to the owners of such “assets” to do certain things with said assets and (often more importantly) prevent others from doing certain things with said assets.  Okay, so what does all of this have to do with California?  Simple.  A very large percentage of California’s GDP comes from companies whose businesses are based on IP.  To put things in perspective, just think about all of California’s tech companies and entertainment companies and you’ll get a very real sense of the magnitude of IP’s importance to our economy.  How many such companies can you name?

Okay, enough of the preamble here.  After thinking through this matter the past couple of weeks, one aspect of this struck me as interesting.  Specifically, how certain “IP companies” make money and how such money gets distributed.  I am referring to “bit media” companies.  Most people are at least aware of the fact that the industry is changing, but most are unaware of just how dramatic the changes have been the past few years or how much more dramatic they will seem in a few years time.  Rather than get into the specifics of these changes right away, I want to let you stew over this for a bit so I will follow up with “part 2″ of this post at a later date.  How’s that for a teaser???