Information Theory & Intellectual Property

Information: A Very Short Introduction by Luciano Floridi (New York: Oxford University Press, 2010). (TS-3). (MAM-3). Floridi is the Professor of Philosophy and Ethics of Information at Oxford University. This short book explains the emergence of the information society; defines data and the mathematics of information theory; and applies these concepts to a range of domains, from biology to economics. Floridi’s major contribution to information ethics is The Philosophy of Information (New York: Oxford University Press, 2011) (TS-4) (MAM-4).


The Information: A History, A Theory, A Flood by James Gleick (New York: Vintage, 2012). (TS-3). (MAM-3). Gleick (Chaos: Making A New Science) uses Claude Shannon’s information theory to examine the history, cultural impact, and social shaping effects of information. Gleick’s book has some excellent historical sections on pre-computer designer Charles Babbage, programmer Ada Byron, cyberneticist Norbert Wiener, mathematician Alan Turing, and other exemplars of information theory. This book will broaden your awareness of how information choices can shape your creative horizons.


Intellectual Property Strategy by John Palfrey (Boston, MA: MIT Press, 2011). (TS-3). (MAM-3). Intellectual property (IP)—exclusive rights for copyright, patents, trademarks, and trade secrets—is a complex and evolving legal field that relates to the creation, assignment, and use of information. Palfrey’s primer defines what IP is, and how it can be developed, assigned, acquired, and securitised. He identifies alternatives to the “sword and shield” legal approach. For an alternative primer focusing on IP management and opportunity evaluation see Stephen J. Frank’s Intellectual Property for Managers and Investors: A Guide to Evaluating, Protecting, and Exploiting IP (Cambridge: Cambridge University Press, 2006) (TS-3) (MAM-3). For specialist topics on globalisation, biotechnology, entertainment, and information technology see Michael A. Gollin’s Driving Innovation: Intellectual Property Strategies for a Dynamic World (Cambridge: Cambridge University Press, 2008) (TS-4) (MAM-4).

US Accounting Rules & Global Governance

The Securities & Exchange Commission (SEC) in the United States plans to adopt the International Financial Reporting Standards (IFRS) in order to enhance US competition in global markets.  The IFRS would be harmonised with, and may even replace the existing US accounting rules, the Generally Accepted Accounting Principles (GAAP) that the Financial Accounting Standards Board (FASB) oversees.


Critics are concerned the shift from GAAP to IFRS is an ill-fated intervention by US regulators comparable to the administrative burdens of Sarbanes-Oxley (SOX) compliance.  The perceived ‘institutional creep’ taps deep US fears on the potential for global governance institutions like the United Nations to interfere with US legal jurisdictions, Administration policies and national will.


To manage this resistance the SEC released a public roadmap and conducted a roundtable in December 2007.  However the Federal Reserve Chairman Ben Bernanke and US Treasury Secretary Henry Paulson upstaged this initiative in the issues-attention cycle due to their attempts to dampen the fallout in financial markets from the 2007 subprime crisis.  Collectively the SEC, Federal Reserve and US Treasury proposals signal major changes to the US financial system’s regulatory framework.


The SEC’s initiative has (at least) three possible side effects.


The planned harmonisation with IFRS will increase the tension between the SEC and US business leaders and policymakers over gaps in the IFRS, cultural differences, and the compliance mechanisms for regulatory oversight.  The coevolution of the US financial system and global governance will need to be reframed as a systems-level opportunity to overcome partisan interests.


The Australia-US Free Trade Agreement (AUSFTA) may be the ‘test case’ for US implementation of IFRS accounting rules.  AUSFTA establishes a bilateral framework on intellectual property rights and strengthens the positive correlation between the US and Australian financial markets.  If it’s really ‘outsourcing’ the US accounting/taxation regulatory regime as its critics believe the SEC is doing so to a ‘friendly’ nation-state.


Enterprise Resource Planning vendors such as Infosys and SAP could also benefit in the SEC’s shift to IFRS.  ERP systems enable trans-national corporations to be scalable and integrate their subsidiaries’ financial reporting through a centralised database, called master data management.  SAP for instance has business rules that harmonise the taxation reporting of different countries.  If the SEC’s roadmap unfolds then SAP and other ERP vendors will have to update their configurable platforms.  IFRS rules could reinvigorate the ERP market for enterprise application integration which uses systems architectures to integrate different computer systems, software, and data.