A. Formation and Development
The genesis and growth of intellectual property management organizations are influenced by innovations in technology, market opportunities, and even political and world events. The music industry illustrates how a confluence of circumstances can shape the formation of intellectual property management organizations in a particular sector. ASCAP, the oldest intellectual property management organization in the United States, was founded by a group of songwriters disturbed over their inability to receive compensation for the performance of their works. Until the invention of radio, ASCAP members received their royalties from the sale of sheet music and licenses issued to restaurants, cabarets, hotels, and other public places where music was performed. The escalating popularity of radio broadcasting in the 1920s exponentially widened the market and brought new royalty opportunities for ASCAP members.1 Broadcast Music Inc. (BMI), another intellectual property management organization serving the music industry, emerged as a response to ASCAP’s attempts in the 1930s to increase broadcast stations’ license fees for the use of their members’ works. In protest, broadcasters boycotted ASCAP music and created their own alternative rights agency. SESAC (the Society of European Stage Authors and Composers) was founded in 1930 by a former ASCAP member to manage the rights and usage of European music. World War II made it impossible for the organization to obtain European rights, and SESAC turned its emphasis to country western and gospel works in the United States.2 (Although a misnomer, the organization’s name was never changed, perhaps because its acronym–SESAC–has achieved name recognition status in the industry.)
Grassroots efforts within particular communities are another catalyst in the creation of intellectual property service providers. The Publications Rights Clearinghouse (PRC), for example, formed in 1996 because of concerns by members of its parent organization, the National Writers Union, about unauthorized secondary uses of their works in electronic media.3 Competition from outside a community also plays a formative role. Initiatives such as the Art Museum Image Consortium (AMICO) and the Museum Digital Library Collection (MDLC) are, in part, a response by the cultural heritage community to the increasing number of commercially oriented third-party service providers vying for the visual imagery owned by museums. In addition, many entrepreneurial efforts resulted in the formation of intellectual property management organizations: Corbis Corporation (founded by Microsoft CEO Bill Gates), the Bridgeman Art Library (founded by Harriet Bridgeman), and the plethora of stock photography agencies (founded by various individuals) differ greatly in their philosophy and function, but all were founded by entrepreneurs responding to market demands for visual imagery.
History and Startup Relationships