Greenspan: Innovation Needs Balanced Help
Fri Apr 4, 8:49 AM ET
By JEANNINE AVERSA, Associated Press Writer
WASHINGTON - As the fruits of ever-changing technology play an increasing role in the U.S. economy,
the country must strike the right balance in developing legal protections for innovative ideas or "intellectual
property," Federal Reserve Chairman Alan Greenspan said Friday.
"Are the protections sufficiently broad to encourage innovation but not so broad as to shut down follow-on
innovation?" Greenspan asked in remarks prepared for delivery via a satellite video link to a Federal
Reserve Bank of Atlanta conference in Sea Island, Ga.
"How appropriate is our current system — developed for a world in which physical assets
predominated — for an economy in which value increasingly is embodied in ideas rather than
tangible capital?" Greenspan asked.
A copy of Greenspan's remarks was distributed in Washington.
Among the thorny issues raised by intellectual property rights is how to define precisely what should be
legally protected by a copyright or patent.
The evolution of the Internet into a communications tool that people use at home and at work has raised
intellectual property rights issues concerning musicians, movie makers and others in the new digital world.
"Ownership of physical property is capable of being defended by police, the militia or private
mercenaries," Greenspan said. "Ownership of ideas is far less easily protected."
In his speech, Greenspan did not talk about the current state of the economy or discuss the future course
of interest rate policy.
Greenspan and his Fed colleagues last month decided to hold interest rates at a 41-year low of 1.25
percent, saying they would keep a close eye on economic developments surrounding the war.
Some economists believe the Fed won't hesitate to reduce rates if the economy were to flash danger
signs of sliding into a new recession.
Through the centuries, Greenspan said, predictable and enforceable laws have been a central factor in a
country's economic success.
"Whether we protect intellectual property as an inalienable right or as a privilege vouchsafed by the
sovereign, such protection inevitably entails making some choices that have crucial implications,"
Greenspan said. |
