Academic Butterflies

'Make the butterflies fly in formation? Management of copyright created by academics in UK universities' by Andreas Rahmatian in (2014) Legal Studies argues that

Universities have increasingly become aware of the fact that the intellectual property (IP) rights that attach to the work of their academics could become significant and valuable assets to the university as an institution and economic organisation. The study involved analysis of the copyright and intellectual property policies of universities in the UK and the interviewing of specialised representatives of universities in relation to the policies of their respective institutions. The principal question of the study was the way in which university policies deal with the issue of ownership of copyright generated by academic staff, which proved to be a sensitive area. University policies presume that, by default, they own all work that academics create as their employees. There seems to be insufficient appreciation of the differentiated legal interpretation of the employees’ copyright rule. At least in relation to core academic work (scholarly books and journal articles in particular), initial copyright ownership by the university, by virtue of the statutory employee- copyright rule, is highly doubtful. As a result of the universities’ principal position with regard to ownership, university IP policies have resorted to complicated and artificial assignment and licencing provisions, with questionable enforceability. 

Rahmatian comments that

In all probability, most universities have issued intellectual property (IP) policies directed particularly at patents and copyright, because these are the most relevant IP rights that arise from the activities of university academics. It is therefore worth looking at university policies on IP rights created by academics, taken from a representative sample of universities in the UK. This study investigates whether universities as employers claim ownership over the IP rights in their policies, how restrictive this claim is with regard to further use, whether this claim complies with the law and whether one can detect a broadly coherent IP policy across different universities. The study is confined to copyright; this is not only to keep the study within manageable proportions, but also because copyright is the most important IP right for a legal conceptualisation of academic output. Copyright, the most far-reaching and almost all-encompassing IP right, concerns every item of academic output, whether in the arts and humanities, the social sciences or the hard sciences, while patents arise only in a science and engineering environment. (Currently, patents are com- mercially more relevant for universities than copyright.) The study also wanted to examine the ways in which a copyright policy is enforced in reality within the university, whether the policy’s intention is reflected in the actual wording and how the role of the policy is perceived by its administrators in the broader context of university management. 

The last point raises an important issue. It seems that the growing concern about IP rights generated within universities has gone hand in hand with the rise of the emergence of university managerialism in the 1990s. The phenomenon of managerialism has been defined as ‘a general ideology or belief system that regards managing and management as being functionally and technically indispensable to the achievement of economic progress, technological development, and social order within any modern political economy’. ‘Management’ can be regarded as an abstracted social practice and design for a comprehensive set of ideas for rationally coordinating and controlling collective action. University managerialism seems to be a type of neoliberal managerialism, which emerged in the late 1990s in particular, when the New Labour government came into power in the UK. This form of managerialism has quickly come to dominate public-sector entities. It characteristically replaces political debate with detailed continuous bureaucratic work control at the micro-level, implemented by accountability and performance processes and technologies. Universities, though formally not subject to central government agencies, have increasingly come under pressure to adopt this regime of ‘new managerialism’ and have moved towards an entrepreneurial and market-driven outlook, with the effect that academics have largely lost their importance in university governance and have been replaced by managers or academics-turned-managers. Several factors have fundamentally contributed to the changing culture in universities over the past 40 years, including, in particular, the growing size of the higher education sector and the incessant reduction of public funding by the state. Today, the state is less the financial provider for the universities but, rather, the regulator of their internal affairs (through the requirement for external auditing of teaching and research standards). In such a climate, the emergence of a market- oriented ‘knowledge economy’ or ‘knowledge society’ ideology, implemented through ‘knowledge management’ practices within the institutional university structure, cannot come as a surprise. This ideology demands that the knowledge creation and output be evaluated, monitored and audited in a seemingly objective/ standardised and near-commercial manner (‘business metrics’). The language of university management reveals this economist’s approach: therefore, it has been suggested that institutional decision making is to be complemented by the ‘principle of externality’, a concept borrowed from economics in the context of market (equilibrium) inefficiencies. All that ties in with the idea that universities are just businesses in the service industry and the students are their most important customers. A management scheme following these parameters will try to measure and improve academic staff performance, and will seek to create wealth for the university as an economic entity. Intellectual property rights, particularly copyright, can be of great assistance in such a scheme. 

The connection between copyright (or copyright ownership) and managerialism has apparently not yet been made explicitly in the academic literature, but the higher education sector is a good example that can demonstrate the workings of this alliance. The intellectual achievements and services (in a broad sense) of an academic become more measurable if they can be translated (or packaged) into IP rights, above all copyright. In this way, the person’s work can be expressed as a sum of proprietary units, detached from the individual and capable of being assessed and priced for the purpose of evaluation and auditing as part of the university’s management framework. Thus copyright can be a legal vehicle for turning the academic’s intellectual creations into alienable products which (a) enable management to conceptualise an individual as a commodified or objectified ‘human asset’, and (b) create capital for the univer- sity as a ‘business’ organisation by virtue of the separable value of the product (or copyright-property). The latter objective benefits particularly from ownership rules that vest copyright from the outset in the university as employer. It goes beyond the scope of this study to provide empirical evidence of the use of copyright in the rise of university managerialism, but some of possible contributing factors to such a development – copyright policies and ownership rules – will be examined.

Ugly

From Behind Closed Doors: Art in the Spanish American Home, 1492–1898, an exhibition at the Brooklyn Museum that is promoted as "the first major exhibition in the United States to explore the private lives and interiors of Spain’s New World elite from 1492 through the nineteenth century, focusing on the house as a principal repository of fine and decorative art".

Doña Mariana Belsunse y Salasar is portrayed in her Lima home dressed in a brilliantly embroidered tobajilla (ankle-length gown). She stands at her dressing table before an arched entry that gives way to a manicured landscape and the grand archway of the Paseo de Aguas leading to the Plaza de Acho, Lima’s famed bullring founded by Doña Mariana and her husband. The sitter became a leading social figure and hostess of a salon frequented by the countess of Monteblanco and Montemar and others of the Creole and peninsular Spanish elite.

Doña Mariana was best known, however, as a central figure in one of Lima’s most notorious social scandals of the day. Her hand was initially promised to Hipólito de Landaburrú, many years her senior and allegedly “uglier than an excommunication.” This proposed marriage, famously unwanted and unconsummated, was avoided when Doña Mariana entered the convent. Reemerging from the cloister in 1755, after her fiancé had died, she married Hipólito’s wealthy nephew, Colonel Agustín de Landaburrú y Rivera, Lima’s alcalde (mayor).

Hicklin

'The Trial of Dorian Gray' by Simon Stern in Richard Kaye ed Dorian Gray in the Twenty-First Century (Oxford University Press) argues that

 Wilde’s three trials in 1895 served, in effect, as an obscenity prosecution of The Picture of Dorian Gray (1890/91). Though the novel was not formally charged with obscenity, Dorian Gray’s first reviewers suggested that it was obscene, and the book remained unavailable in England for nearly two decades after Wilde’s trials. The novel's relation to Wilde's trials thus raises a number of questions about the use of fiction as legal evidence and about the ways in which a criminal prosecution might be taken to reveal the meaning of the defendant's writings. This essay discusses the late Victorian campaign against obscene literature and the victims of that campaign; the reviews of the original version of Dorian Gray (in Lippincott's Magazine, 1890); the oblique manner in which the innuendo about its obscenity functioned during Wilde's three trials (1895); Wilde's own ironic engagement, at several key points in the novel, with the conception of influence at work in the legal test governing the evaluation of obscenity (R. v. Hicklin, 1868); the relation of the painting itself, and of the notorious French novel that Dorian borrows from Lord Henry, to that conception of influence; and Wilde's reenactment of his ironic perspective at the narrative level.

Stern comments

The Picture of Dorian Gray was published at a time when obscenity prosecutions in England were growing in frequency and were increasingly targeting “borderline cases” involving works that had not traditionally been considered obscene. Wilde’s novel abounds in descriptions and scenarios that evoke the concerns fueling the campaign against publications with a “tendency to corrupt,” and although Wilde is more concerned with the workings of this tendency than with its substance, he circles around the subject so intently that it seems surprising— particularly given the recommendations of some commentators—that no charges were laid against the novel. Perhaps it avoided prosecution because Wilde’s trials also served in effect as an obscenity trial. Just as the early reviewers’ objections led one of the major British newsdealers to stop selling the issue of Lippincott’s Magazine that featured the original version of the story, Wilde’s conviction led his publishers to stop selling the book, and nearly twenty years would pass before another British edition appeared. The case against the novel — first in the reviews and then in the courts — took its homoeroticism to be the most damning evidence of its corrupting tendencies, but Wilde’s detractors were also responding to a proclivity that suffuses the novel more generally. As a reviewer for the Pall Mall Gazette explained, “We are conscious of a penetrating poison in the air, yet cannot see clearly whence it proceeds.” Were it not for the implicit censure, Wilde would have appreciated this observation, which succinctly captures the novel’s pervasive concern with the dynamics of the corrupting influence, and which might even have been inspired by Lord Henry’s figuration of influence as a “subtle fluid or a strange perfume,” an almost imperceptible force that can be discerned mainly from its ramifying effects. 

The final decades of the nineteenth century, as Katherine Mullin has noted, marked a rise in obscenity prosecutions in England, and “the ‘artistic merit’ defence against the law, never explicitly established, was increasingly under siege.” In the late 1880s, Henry Vizetelly was tried twice for publishing English translations of Zola’s novels, and there were also prosecutions in the London courts against a peddler who sold photographs of “pictures publicly exhibited in the Paris Salon,” the publishers of the Evening News for featuring “salacious details” of a society divorce case, and a publisher who had excerpted “salacious highlights” from Boccaccio’s Decameron. In 1898, a few years after Wilde’s conviction for “gross indecency” under section 11 (the Labouchere Amendment) of the Criminal Law Amendment Act 1885, the Bedborough trial would result in the suppression of the second volume of Ellis and Symonds’s Studies in the Psychology of Sex—the volume titled Sexual Inversion. When W.T. Stead was tried in 1885, in the wake of his reporting on “The Maiden Tribute of Modern Babylon,” a columnist in the Saturday Review observed that the defense of having “done good service by his publications” could hardly excuse the provocative “rhetorical flourishes” that had garnished Stead’s articles. 

The author concluded that the proceeding, though “in form a trial for abduction,” was correctly “regarded by many as in substance a trial for obscene libel.” 

Wilde’s trials had much the same result for Dorian Gray. The only explicit characterization of the novel as an obscene work, during the three rounds of litigation, appeared at the very outset, in the pretrial pleadings filed in Wilde’s libel suit. Charles Gill, one of the defense counsel, sought to justify Queensberry’s language by calling Dorian Gray an “immoral and indecent work” that described the “passions of certain persons guilty of unnatural practices.” Gill’s allegation, though not repeated in court during the libel trial, would figure as an underlying theme in the defense arguments of Queensberry’s lawyer Edward Carson, which in turn would reappear in Wilde’s first criminal trial when Gill (now acting as prosecution counsel for the Crown) had Carson’s arguments from the libel trial inserted in the court record, only to see the judge strike out the literary evidence when the case was sent to the jury. Gill’s accusation thus migrated from one liminal site to another in the course of Wilde’s trials while nevertheless continuing to play a vital role.

MOOCs and avalanches

'The Merchants of MOOCs', a concise piece by James Grimmelmann in Seton Hall Law Review comments that

A loose network of educators, entrepreneurs, and investors are promoting Massive Open Online Courses as an innovation that will radicaly disrupt higher education. These Merchants of MOOCs see MOOCs' novel features — star professors, flipped classrooms, economies of scale, unbundling, and openness — as the key to dramatically improving higher education while reducing its cost. 

But MOOCs are far from unprecedented. There is very little in them that has not been tried before, from 19th-century correspondence courses to Fathom, Columbia's $25 million dot-com boondoggle. Claims of disruption look rather different when this missing context is restored. This essay examines some common arguments about what gives MOOCs their value, and finds them wanting. There is a sharp division between the features that make MOOCs exciting for education and the features that make them financially appealing to the Merchants of MOOCs.

Grimmelmann begins -

Meet the MOOC.  In 2011, Stanford professors Peter Norvig and Sebastian Thrun filmed the lectures from their artificial intelligence course and put the videos online. They opened registration to anyone, anywhere in the world The response was massive: more than 160,000 students signed up. Only 23,000 completed the course, but that is still roughly 22,800 more students than would have in a normal semester. And of the 248 students who received perfect scores, every single one was online rather than at Stanford. 

The success of the “Stanford AI course” made MOOCs — Massive Open Online Courses — front page news. It also drew the attention of a group I will call the Merchants of MOOCs: a loose network of educational entrepreneurs investing in bringing MOOCs to the masses. Thrun gave up his Stanford tenure to found Udacity, which has raised $20 million in venture capital; two of his Stanford colleagues founded Coursera, which has $65 million to its name; Harvard and MIT jointly funded the nonprofit edX with $60 million. They, and many others, are promoting MOOCs as a transformative innovation for higher education. 

Consider a typical MOOC program. Columbia University is working with a 14-member international consortium including the London School of Economics and the Smithsonian to offer courses in “computer science and technology, the arts, journalism, and physics” featuring “a wealth of free content usually only available on university campuses and at leading museums and libraries.” It centers around “elaborate online courses replicating the Ivy League experience” that combine streaming video, online texts, and discussion groups. A great many are free, but college students seeking course credit can enroll in more formal courses for a fee. 

Wait. What’s that? Oh. I see. 

Excuse me. I’ve just been informed that I’ve been talking about Columbia's previous venture into online learning, Fathom.com, which launched in 2000. Although some 65,000 people created Fathom accounts, very few of them paid for any courses. Fathom closed in 2003 after blowing through $25 million. Fathom, of course, is completely different from Columbia’s current venture into online learning in partnership with Coursera, which offers Ivy League courses in computer science and economics that combine streaming video, online texts, and discussion groups. They’re free to take, but Coursera offers certificates of completion for a fee. As you can see, Fathom and Coursera have utterly nothing in common, nothing at all — or nothing that anyone involved cares to admit. 

As Columbia’s amnesia about Fathom suggests, MOOCs are far from unprecedented. Almost everything in them has been tried before, often repeatedly. In what follows, I will critically examine some common claims about MOOCs in light of this missing context, and suggest that MOOCs are both far less and far more disruptive than the Merchants of MOOCs would have us believe.

Last year's Institute for Public Policy Research An avalanche is coming: Higher education and the revolution ahead [PDF] by Michael Barber, Katelyn Donnelly and Saad Rizvi argues that -

the next 50 years could see a golden age for higher education, but only if all the players in the system, from students to governments, seize the initiative and act ambitiously. If not, an avalanche of change will sweep the system away. Deep, radical and urgent transformation is required in higher education. The biggest risk is that as a result of complacency, caution or anxiety the pace of change is too slow and the nature of change is too incremental. The models of higher education that marched triumphantly across the globe in the second half of the 20th century are broken. 

This report challenges every player in the system to act boldly. 

Citizens need to seize the opportunity to learn and re-learn throughout their lives. They need to be ready to take personal responsibility both for themselves and the world around them. Every citizen is a potential student and a potential creator of employment. 

University leaders need to take control of their own destiny and seize the opportunities open to them through technology – Massive Open Online Courses (MOOCs) for example – to provide broader, deeper and more exciting education. Leaders will need to have a keen eye toward creating value for their students. 

Each university needs to be clear which niches or market segments it wants to serve and how. The traditional multipurpose university with a combination of a range of degrees and a modestly effective research programme has had its day. 

The traditional university is being unbundled. 

Some will need to specialise in teaching alone – and move away from the traditional lecture to the multi-faced teaching possibilities now available:

• the elite university 

• the mass university 

• the niche university 

• the local university 

• the lifelong learning mechanism.

The pressure of competition on universities is greater than ever, not just because of the global competition between them, but also because a range of new players like MOOCs provider Coursera, skill-educator General Assembly and consultancies that develop people and produce cutting edge research, are now stepping up to compete with various specific functions of a traditional university. 

Governments will need to rethink their regulatory regimes which were designed for a new era when university systems were national rather than global. In the new era, governments need to face up to big questions – how can they fund and support part-time students? Should a student who takes courses from a range of providers, including MOOCs, receive funding on the same basis as any other student? How can government incentivise the connection between universities, cities and innovation? In an era of globalisation how do governments ensure that universities in their country continue to thrive? How can meritocracy be ensured? 

There are three fundamental challenges facing systems all round the world:

1. How can universities and new providers ensure education for employability? A great example of the future is the excellent employability centre at Exeter University in the UK which offers all students sustained advice and promotes volunteering as well as academic success. Given the rising cost of degrees, the threat to the market value of degrees and the sheer scale of both economic change and unemployment, this is a vital and immediate challenge. 

2. How can the link between cost and quality be broken? At present, the global rankings of universities in effect equate inputs with output. Only universities which have built up vast research capacity and low student:teacher ratios can come out on top. Yet in the era of modern technology, when students can individually and collectively create knowledge themselves, outstanding quality without high fixed costs is both plausible and desirable. New entrants are effectively barred from entry. A new university ranking is required. 

3. How does the entire learning ecosystem need to change to support alternative providers and the future of work? A new breed of learning providers is emerging that emphasise learning by practice and mentorship. Systematic changes are necessary to embedding these successful companies on a wider scale.

The key messages from the report to every player in the system are that the new student consumer is king and standing still is not an option. Embracing the new opportunities set out here may be the only way to avoid the avalanche that is coming.

TRIPS

IP Australia has announced a quick turnaround consultation regarding draft legislation to amend the Patents Act 1990 (Cth), Trade Marks Act 1995 (Cth), Designs Act 2003 (Cth) and the Plant Breeder's Rights Act 1994 (Cth).

The proposed amendments considered in the consultation paper [PDF]  are to:

•  implement the Protocol amending the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property (TRIPS Protocol), enabling Australian medicine producers to manufacture and export patented pharmaceuticals to countries experiencing health crises, under a compulsory licence from the Federal Court 
• extend the jurisdiction of the former Federal Magistrates Court to the Federal Circuit Court to include plant breeder's rights matters 
• allow for a single trans-Tasman patent attorney regime and single patent application and examination processes for Australia and New Zealand, as part of the broader Single Economic Market (SEM) agenda 
• make minor administrative changes to the Patents, Trade Marks and Designs Acts to repeal unnecessary document retention provisions that are already adequately governed by the Archives Act 1983 (Cth)
• make minor technical amendments to the Patents Act to correct oversights in the drafting of the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (Cth) passed in March 2012.

Regrettably but unsurprisingly IP Australia hasn't unpacked the intellectual property provisions in the upcoming TransPacific Partnership Agreement.

Privacy Seals

The European Commission has released a 290 page report [PDF]  titled EU Privacy seals project: Inventory and analysis of privacy certification schemes, covering 25 online privacy seals.

The report concludes -

 The privacy seals market place is defined by heterogeneity. Whilst we can identify a relatively small number of ways in which seal schemes function, there is a large degree of variation around these core functional models. These variations can have significant implications for the claims that a seal scheme is legitimately able to make. In addition to this, the level of variation amongst seals likely impacts upon the effectiveness of seals. An individual (or organisation) cannot generalise about a seal scheme from their knowledge of other seal schemes (if any). It is a possibility that more niche seals will emerge, which will increase the level of variation further. Privacy seal schemes face a challenge in making legitimate claims about complex behaviours and standards, and making these claims rapidly, transparently, accessibly and communicating these reassuringly.

One of the key results of our study relates to the privacy and data protection elements of analysed schemes; some schemes have extensive privacy and data protection elements, others have none or a bare minimum. The focus of schemes differs. The more legally aligned schemes have a national or regional scope and coverage potentially restricting their universal application. The level of guarantees made to data subjects also varies – some schemes specify these explicitly, while others make no mention of it at all. While most of the analysed schemes seem to follow a typical model, there are highly divergent certification practices. This has implications for seal audiences who may not be able to determine the nature and scope of the certification process or to make informed judgements about a scheme that forms the basis of a seal. To this extent, it will be important to distinguish best practice from common practice in any future privacy seal scheme. A good privacy seal scheme must make specific, concrete certification of privacy and data protection behaviour. Blending these claims with other business practices may diminish the distinctiveness of a privacy seal offering (as evident in some of the analysed schemes).

While the objectives of the analysed schemes cluster around six categories (building confidence or trust, signalling compliance or accordance with a standard, signalling the presence of privacy measures, providing guarantees, increasing market transparency and resolving disputes), and though there is some evidence of schemes achieving a certain measure of success (as in the case of profitable and expanding schemes such as TRUSTe), in actual practice, it is difficult to gauge the actual achievements of most of the objectives.

EU-based schemes display some key differences in comparison to their US-based or global counterparts. Europe has schemes administered by data protection agencies. The analysis also shows that European schemes are more likely to be aligned with legal standards for privacy and data protection, to make guarantees of compliance with such standards and requirements and less likely to have abstract guarantees on data subject rights. Non-EU schemes do not generally meet the legally-binding standards of EU data protection legislation.

In general, compliance with privacy and data protection law is a challenge for organisations. The GDPR imposes a high legal standard for privacy and data protection. Though the analysed EU-based certification schemes tend to approximate as best as possible the proposed GDPR requirements, unless guided effectively on how to concretely incorporate the GDPR requirements as their standards or criteria, they might fall short of what they can actually deliver through their schemes. For the non-EU based schemes, the GDPR criteria may be less relevant (attributable to different industry and regulatory environments within which they operate). Non-EU based schemes could adopt the GDPR criteria as this would give them a good standing and even form the basis for mutual recognition efforts if their subscribers engage with European consumers and data subjects. 

Amongst the EU-based schemes, we find there is a lack of public discussion and preparation in relation to the new GDPR requirements (such as rights of data portability, right to be forgotten, data protection impact assessments, the principle of accountability and the special protection afforded to minors). EU-based schemes are also largely national in scope – while several schemes were identified in certain Member States such as Germany or Spain, no noted attempts for mutual recognition and co-operation are evident. This absence of harmonisation amongst EU-based seals puts them at a disadvantage in comparison to other international schemes that are able to cover a wider audience. EU citizens are exposed to a very wide variety of seal schemes in their use of the Internet; however, only a small sub-set of these schemes signal compliance with EU privacy and data protection law. 

There are various beneficiaries of privacy seals: policy-makers, regulators, other public bodies, scheme operators, subscribers (of all types, large, medium and small), third parties (e.g., independent evaluators, auditors), industry associations, privacy and data protection organisations, consumers and individuals. On a broader front, privacy and data protection schemes benefit society. They encourage and facilitate good privacy and data protection practices and increase the participation of individuals in online commercial and social activities. 

Privacy seal schemes can have various benefits (that are divergently applicable to beneficiaries): generation of privacy and data protection accountability and oversight, provision of privacy assurances, reduction in the regulatory and enforcement burden, enhancement of trust and confidence, reputational, competitive and market advantages, increasing trade and commerce, driving industrial growth, generation of privacy awareness, helping prove fulfilment of privacy and data protection obligations, encouraging the implementation and maintenance of data protection measures, and presenting a quick and accessible means to determine and verify privacy and data protection commitments. These benefits were broadly supported by the stated objectives of many of the analysed seal schemes. These included abstract trust-building (encouraging a general sense of confidence, with trust strongly related to commercial opportunities for the certified entity), compliance signalling (with regard to laws or other standards), signally data protection measures, the provision of binding guarantees, increasing market transparency and providing additional dispute resolution mechanisms. Each of these objectives can be understood as responding to particular problems of exercising trust online.

Privacy certification schemes also have an impact on their beneficiaries. This impact affects the propensity of organisations to subscribe to the scheme. The impact relates to various costs such as design costs, seal costs, seal administration costs, certification costs, certification compliance costs, human resource costs, accreditation costs, regulatory approval costs.

Required success factors for privacy seal schemes

One of the key factors that determine the extent to which a privacy certification scheme benefits individuals and citizens is how easy or difficult it is to break the link between the signifier (the presence of a seal on a website or entry in a register) and the signified (the particular privacy and data protection practices being certified). An effective seal must have a strong link between the two. Several factors identified in this study contribute towards weakening this link. The classical and linked seal models have weaker links between the signifier and signified than the hosted seal. This is because the website hosting the seal can potentially resist its revocation and continue to display a seal to which it is not entitled. Similarly, if a scheme fines a member who is in breach of its programme requirements rather than revokes the seal, then it becomes difficult for an end user to determine whether the seal represents a website in good standing with the programme requirements. The possibility of a negotiated relationship between seal provider and certified entity and too frequent changes to the programme requirements over time also undermine the link between the signifier and the signified, as a seal can signify different things on different websites, at different times. Finally a lack of information on what exactly the seal is supposed to signify is a concern. Too many of the analysed schemes were difficult to find, too abstract or had incomplete information accessible to the public. Given that the role of a seal is to signify something, it should be possible to determine what is being signified in a relatively easy and straightforward manner. 

Transparency and openness of schemes is a necessity for ensuring that privacy seal schemes are not simply a front or means for an organisation to build and develop its profile and other supplementary activities (e.g., consulting). There is a need to eliminate this conflict of interest as it affects the credibility of the scheme. 

Another key factor impacting the success of a privacy and data protection certification scheme is the certifier’s reputation and ability to attract (and retain) subscribers. A certifier must be independent (financially and resources), capable of engendering trust from members and successfully able to implement and enforce the scheme. This may suggest the need for increased involvement from data protection authorities. Universality (ability to offer a more widely applicable seal) of the scheme is another advantageous factor that might contribute to success of a scheme. Further, if SMEs are to gain the most from subscribing to these schemes, then certification schemes must find a way of catering to this beneficiary more effectively.

Art Markets and Investment

From an item by Melanie Gerlis in the Financial Times promoting her Art as an Investment? A Survey of Comparative Assets (Lund Humphries, 2014) -

 art falls short relative to many of the other assets to which it is frequently – and favourably – compared. These include both traditional and alternative investments, whether public and private equity, gold, wine, or residential property. Its lack of correlation to such assets is also questionable. 

The combination of the market’s illiquidity, opacity, lumpy supply and asymmetry of information undermines art’s profile as an asset. This is reinforced by the unique qualities of each work – including its history of ownership, trading and display – which create enormous ranges of pricing and valuation, and preclude sensible data aggregation or comparison. The market’s opacity further opens it up to unchecked manipulation. 

Price transparency is another huge problem facing those who would map art’s returns on to a Bloomberg screen, alongside their other investments. Only 50 per cent of an already relatively small number of art trades are recorded (auction results are made public, dealers’ prices are not). To put this into perspective, Artnet, a database of auction sales, records that 1.8m works of fine art were offered at auction in 2012. By comparison, there were an average 1.5m trades per day through the London Stock Exchange alone in May 2012. Even if the limited, patchy and inconsistent available data on art sales could be put into a hypothetical basket of all segments of art, its financial profile is hardly compelling. Most such theoretical analyses of the art market find that the average compound return for works kept for between five and 10 years is around 4 per cent. 

Relatively speaking, this is already less than for gold, wine and both public and private equity, and also lower than the residential property market – another market of unique goods, but with more trading volume and available data (as well as an actual and economic utility) than the art market. And this is before considering the so-called risk adjusted return (the profits needed to make up for the peculiarities of any market). One investment professional whom I interviewed for my book said that, given the risks in the art market, anyone who is content with less than a 50 per cent return on art “needs a lesson in investment”. 

Meanwhile, art’s supposed lack of correlation with other markets is not entirely convincing. The price levels for art do not reflect its fundamental characteristics, rather the fortunes of its buyers. The art market as a whole crashed soon after the economic downturn began in earnest in 2008. Thereafter, only the top-priced works recovered as the wealthiest few emerged relatively unscathed from the credit crisis and new wealth was created outside the gloom of Europe and the United States. Many experts also agree that the data frequency to support the correlation claim is much too short to be meaningful, given how relatively infrequently art is sold for a known price. What may seem to be a lack of correlation may in fact just be a lack of information.

You could of course buy art or books (if necessarily skipping lunch) for pleasure. Cuddling up with a gold bar or a bearer bond? No. Liquidating the assets by drinking the collectable bottle of wine (particularly after realising that it's a fake)? A transient pleasure with a headache the next day.

Gerlis notes 'On the valuation of psychic returns to art market investments' by Erdal Atukeren and Aylin Seckin in (2007) 26(5) Economics Bulletin 1-12

Investing in art objects yields financial and psychic returns. The psychic returns arise since art has a superior consumption good aspect as well. The question is whether it is possible to measure the psychic returns. One valuation method for estimating the psychic returns to investing in artworks is their rental price. Here, we make use of the prices charged by a Canadian fine art company for its art rental services and calculate the implied psychic returns to be about 28 percent. Next, we review the finance-theoretic approaches to measuring the psychic returns to investing in artworks. We follow Hodgson and Vorkink's (2004, Canadian Journal of Economics) suggestion that the alpha parameter in the CAPM captures the extent of net psychic returns. The evidence on alpha from the art market applications of the CAPM coupled with the transaction cost data from international art auctions also suggests that the psychic returns to investing in artworks might amount to about 28 per cent.

Overall I preferred works such as 'Art Investment and the British Rail Pension Fund' by Peter Cannon-Brookes in (1996) 15(4) Museum Management and Curatorship (1996), 'Art as an Alternative Investment Asset' by Raya Mamabarchi, Marc Day and Giampiero Favato, 'Accounting for Taste: An Analysis of Art Returns Over Three Centuries' by William Goetzman in (1993) 83(5) American Economic Review, 'Reflections on historical series of art prices: Reitlinger's data revisited' by Guido Guerzoni in (1995) 19(3) Journal of Cultural Economics 251, 'Unnatural Value: or Art Investment as a Floating Crap Game' by William Baumol in (1986) 5 American Economic Review, 'On pricing the priceless: Comments on the economics of the visual art market' by Louis-André Gérard-Varet in (1995) 39(3) European Economic Review 509.