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The capitalism of magic

In fashion, it seems, top designers may not want to protect their IP. When their ideas are copied, they become passé. This in turn creates demand for new ideas from the top, and so on—a process known as "induced obsolescence".

Magicians, by contrast, very much want to protect their IP, but not through a disclosure-based legal process. To do this, says Mr Loshin, the "magic community" has developed a "unique set of informal norms and sanctions for violators" that protect IP without resorting to the law. These allow magicians to maximise the amount of sharing of ideas and methods within their community, whilst minimising the exposure of their IP to the outside world of their customers.

True, there have been occasional instances of IP theft within the community, notably Harry Kellar's prolonged campaign of industrial espionage to acquire the secret of the "floating lady" illusion invented by John Nevil Maskelyne. The Fox TV network—owned by that old pantomime villain, Rupert Murdoch—once ran a series that explained some famous tricks, a betrayal one magician likened to "destroying Santa Claus or the Easter Bunny". An attempt to sue Fox for breaching trade secrets failed, demonstrating the unhelpfulness of IP law to magic. As a writer noted in Magic magazine, "the bottom line is that the legal system offers considerable potential for loss, with very little hope for victory."

One trick that magicians have used to protect their IP is to split it into two, a "popular magic" consisting of low value-added knowledge that is made readily available to the public, and more specialist knowledge available only to trusted insiders. Usually, the popular magic satisfies most casual seekers sufficiently to discourage them from costlier search into the more valuable IP.



Trusted insiders, who understand the value of maintaining industry secrets, are further filtered by the creation of membership organisations with tough entry requirements and strong penalties for those who break industry rules, such as the International Brotherhood of Magicians, Hollywood's Magic Castle and London's Magic Circle. To get to some of the most valuable secrets, magicians have to win gruelling competitions such as the FISM Grand Prix, organised by the Federation International des Societes Magiques.

The magic community has also established a tradition whereby knowledge about new tricks is shared with insiders provided that they give credit to the inventor, providing a strong reputational incentive to innovate. And, most important of all, says Mr Loshin, is magic's version of the Hippocratic oath: never expose a secret to a non-magician.

There may be lessons in all this for other industries that struggle to protect their IP, either because the law is unhelpful or simply not enforced. On the other hand, this approach to IP may soon be rendered powerless by a more powerful invisible force even than magic: the internet, in particular, the Wikipedia website, which famously uses an open communitarian approach to generating knowledge. Wikipedia features a growing number of explanations of hitherto secret magic tricks, points out Mr Loshin. What to do? Surely, somewhere, there is an innovative magician who can make web pages disappear.