I would just take a few minutes to expound on the
currently popular subject of Intellectual Property Protection. The
artists who create music and film etc have become more and more active in
trying to protect their products from piracy and people who wish to download
these products from the internet have one view or the other and sometimes just
confusion when asked about the legality or morality of intellectual property
piracy. Each person eventually has to make their own decisions on this
subject and I am not offering any clarification on the legality or morality
issues but would like to take a moment to write about the economic issue, which
is the crux of the subject. I have been a designer for most of my working
life and many times I have licensed my work to others so that they could
produce and sell my designs as products. The incentive for me was usually
a very small percentage of the proceeds from the sale in the form of a royalty
payment. In the majority of cases the companies licensed to manufacture my
designs have apparently abided by our contracts and agreements. Even some
companies who I might otherwise not totally have trusted in may ways to perform
in an ethical way were quite conscientious in accounting and paying royalties
because they saw the value in paying these minute compensations in order to
maintain a working relationship with the designer. If the design had any
problems or if they wanted a new design from the same designer there was a
working relationship in place to facilitate the interaction that was required.
For my part I have always employed a strategy to turn these royalties into new
products by reinvesting the royalties into new designs and prototypes in an
effort to build a portfolio and to perpetuate the design evolution cycle.
In some cases however the company holding the
patterns or tooling to produce these designs do not act in a way that I would
view as ethical or sometimes legal. They refuse to honor the
designer/builder agreements or contracts and default on the payments of
royalties. This is of course a situation that I do not like to see as it
means the funding of my next generation designs is often delayed by simple
economics. It is also though a situation that is undesirable for the
consumer. Since the manufacturer forfeits its support from the designer
it often follows that salesmen must fill the role of designer or
engineer. I have found from hard experience that salesmen often
make very poor designers or engineers and that in almost every case the product
quality and functionality suffers. The system of designer royalties
exists to enable products that the customer will find satisfying and when the
manufacture defaults it is primarily the consumer who suffers by the decline in
quality and functionality that follows. The marketplace is also
left with fewer new and innovative designs. It is most often a case
of simple arrogance and greed that leads to this degradation of the product to
market cycle.
As I am now working on at least 10 new designs I
find that with the world economy I am forced to make difficult decisions as to
where I should invest my capital and which of my designs should receive
priority. If my long-term customers wonder as they often do in emails to
me why a project has not progressed as quickly as they would like the answer is
almost always lack of funding. Over the last 3 years I have been deeply
disappointed by two companies who now possess the tooling and patterns to
produce some of my earlier popular designs but who are refusing to pay the
royalties that essentially support the design to market cycle. One
of these companies is Windrider who possess the tooling to produce the
Windrider 10 trimaran design. The owner bragged to me of how clever he
was in the purchase of the company to, in his view, remove the obligation to
pay royalties. He has also changed the name of the product to Tango
apparently thinking that the obligation was only attached to the name instead
of the actual boat. I attempted through long correspondence to convince the
manufacturer of the need and benefit to them to maintain what I view as their
legal obligation but my arguments fell on deaf ears. The manufacturer
refuses to honor the designer/builder agreement that was intended to follow
this product for its production lifespan. The consumer suffers from this
action in multiple ways. One important way is that the manufacturer loses
support of the designer. In this case I can look at the product on the web
to see that the boat is no longer being constructed or assembled to my original
design specifications and in almost every way is inferior to the original
product. Put simply the boat is not nearly as good as it could
be. Most people would be amazed at the small percentage that the
royalty payment would cost the manufacturer but still they are willing to
degrade the product to save a relatively few dollars per boat. The second
but also important way this affects the consumer is that in inhibits the
development of new designs. There was always intended to be a
second, larger, faster version of the Windrider 10. I was prepared to
offer this design to Windrider if they were honest in their dealings. The
customer looses out on a wonderful and innovative new design through the greed
of a less than ethical manufacturer. For me it removes an income
source that I should receive on good work that I have already done at some
considerable expense and it means the new versions will be delayed or
cancelled.
For over 23 years I, with my partner Sam Carroll,
built a company called Balogh Sail Designs and with much sweat and financial
sacrifice we developed a product line of sail rigs, and outriggers to convert
kayaks and canoes into sailing trimarans. The products were best
known for their innovation, quality and performance. For many and varied
reasons we were forced to sell BSD in 2009. In exchange for a very small
sum, a royalty agreement, and a short non-compete clause I parted with my
creation of sweat and love. I had an agreement that the new owner
would provide 6 months a year of design work for my new design company in
exchange for rights of first refusal of my new work for a period of years. The
owner also agreed to maintain the high quality standards we had
established. For totally incomprehensible reasons the new owner quickly
defaulted on all of his obligations. I of course have not received a
substantial income that was guaranteed to me and the sport of kayak and canoe
sailing has been deprived to the flow of new designs that are the lifeblood of
a sport. By contract, all of the rights for my designs have reverted to
me and I am of course released from my non compete clause so I can again offer
kayak and canoe rig designs but the consumer is left without the high quality
work we produced for all of those years at BSD and will have to wait longer for
new designs to appear.
I make these points not to complain. The
business world is full of dishonest and unethical people and one is bound to
encounter them if one has success in their work as I have. I mention
these situations as a way of explaining to the consumer how their interests are
not served by the piracy of licensed intellectual property. One might
think when they purchase products from companies such as these that it makes no
difference whether the company is dealing ethically or legally with the
designer but this assumption is not true. I can assure anyone who is
interested that none of these products is currently produced at the level of
quality or function that was part of the original designs. The consumer
is not receiving the value for their purchase price that they were when the
manufacturer maintained a healthy relationship with a conscientious designer
who feels that his reputation is best served when the customer can buy a
product designed and manufactured to a high standard. I offer that it is
in the best interest of the consumer to be aware that ultimately it is they
that suffer when manufactures refuse to honor or respect the designer and that the
resulting product is always inferior. In addition the consumer is often
deprived of next generation designs that would enhance their life
experience. The unethical or dishonest manufacturer benefits only himself
to the detriment of the consumer and designer. It may be good to
think about this when you are contemplating your next purchase.
