v. 1.1
available at http://www.n-a-n-o.com/ipr/extro2/extro2mk.html
Markus Krummenacker
First of all, I would like to acknowledge my appreciation for Tom Palmer, who
has written two excellent papers [Pal89] [Pal90] on exactly this topic, which
were kindly brought to my attention by Max More. Thank you. To some extent, I
am wondering why I am undertaking my own effort here, as I essentially agree
with all of Palmer's conclusions. However, I believe the topic is sufficiently
important to warrant much more discussion, and finally, action.
I feared that the topic "Intellectual Property Rights" would have not received
enough discussion at the EXTRO-2 conference, unless I would do something
myself. I also have to admit that one reason for pursuing this presentation is
the increasingly vocal presence of "Intellectual Property Right" lawyers, and
the seeming lack of an audible opposition. The utterances of some of these
lawyers and the direction in which they are trying to push society makes me
very angry, and so in part this is my effort to defend my freedom against the
outrageous demands from a particular sector of the legal community.
What I will do in the following:
I will give a quick outline of what copyrights and patents are, and what their
historical origin is. Then I will proceed to argue why these institutions are
not a good idea, and why humanity should get rid of them again as soon as
possible. I will then try to sketch out a view of an alternative information
economy, flourishing without the burden of copyrights and patents. I will also
quickly mention the League for Programming Freedom (LPF), the only organization
I currently know of, which is openly opposing at least a well-defined subdomain
of these restrictive institutions.
What is currently understood by "Intellectual Property Rights"?
In the USA, close to the end of this millennium, four different flavors of
legal frameworks are commonly lumped together under the term "Intellectual
Property Rights". They are:
< copyright
< patents
< trademarks
< trade secret
Upon closer examination, one will notice that these flavors divide into two
very different categories. Copyright and patents are in one, and they will be
examined in detail in the remainder of this discussion. These are two clearly
non-contractual institutions, enforced against parties who never have given
their consent towards accepting any particular obligations.
In the other category we have trade secret, which in principle is unobtrusive
and based on contract law. Simply put, it involves multiple parties voluntarily
agreeing to keep crucial information in secret, and it is very important in an
industrial context.
The remaining flavor, trademarks, is somewhere in between, in my opinion. It
is a bit of a grey zone, and seems currently in flux. On one hand, it is
desirable for companies and products to bear unique labels to avoid confusion
in the name space. On the other hand, there has been quite some abuse with
over-broad claims, and it is one of the so-called "rights" which can
aggressively interfere with other people's freedom. Elsewhere at this EXTRO-2
conference, Tom Morrow is devoting a presentation to this entire topic. I will
not comment on it further.
Copyright is the means for prohibiting unauthorized production of
literal copies of published works. It is very easy to obtain copyright
protection. The procedure used to be simply filing a form and paying a small
administrative fee. Nowadays, it is even easier. Merely fixing a work in a
tangible form is enough to invoke copyright protection, and it lasts for on the
order of fifty years and more. To balance this extremely long duration and the
ease by which it is obtained, copyright does not cover any abstract ideas or
schemes that may appear in the content of a published work. It is limited to
covering only their specific form of literal expression as the published
work.
Patents, on the other hand, are much more powerful, and can prevent
anybody from using an idea, manufacturing procedure, or invention, unless prior
authorization by the patent holder is obtained. Later independent re-invention
or ignorance regarding the existence of patents are not good excuses under the
current system. The patents can be enforced regardless. These are very powerful
"rights" conferred to a patent holder. To balance the sweeping powers granted,
a much more formal procedure has to be followed to obtain a patent, which
usually costs minimally $10,000, and the patent duration is temporally
restricted to about twenty years. To ensure that such powerful protection
cannot be granted for just about anything, a qualifying patent application
needs to fulfill a number of tests, set up by the patent office. An idea needs
to be novel, useful, and cannot be "obvious ... to a person having ordinary
skill in the art", in order to receive patent protection. Needless to say that
these tests are subject to differing interpretations, and have received
substantial heated debate. The rather weak formulation of the obviousness
criterion has led to flood of trivial and broad patents. Law suits precipitate
regularly by attempts trying to stretch the interpretation as far as it will
go.
It seems that nowadays the romantic notion is very widespread and in-grained
in the general population, that the creators of intellectual products somehow
deserve to be rewarded by society for their special efforts. Furthermore, in
order to ensure that this reward can be collected, it seems to be justifiable
to rely on the machinery of copyright and patent protection, mechanisms which
intrinsically rely on the presence of an all-powerful government, which can
enforce these institutions. Surprisingly, there even seems to be a branch of
libertarianism that seems to strongly promote and favor such "Intellectual
Property Rights". This is quite a puzzle to me, as this is in direct
contradiction to much more basic and fundamental rights, as Tom Palmer has
already argued in detail [Pal90], and which, by the way, is quite obvious, in
my opinion.
However, if this popular romantic notion is analyzed in any historic depth, it
evaporates rather quickly, and the true and unsavory origin of these
institutions surfaces. The U.S. system of copyrights and patents goes back to
the English system, which in turn is rooted in old practices of the kingdom. In
mediaeval times, the English Crown granted patents in order to raise funds and
to secure control over industries that were considered to be of political
importance. Copyright was granted as a measure for ensuring government control
over the printing press, in a time of great religious and political dissent.
The historical root for "Intellectual Property Rights" is monopoly
privilege and censorship.
The grants of monopoly covered a variety of industries, including everyday
items such as production of salt and leather. The processes protected needed
not be novel. Furthermore, there was only a weak differentiation between
production monopolies and import franchises. This shows the purely political
origin of these monopolies. Protecting the interests of inventors and other
intellectual workers seems to not have been an important concern of the
kingdom.
Understandably, the restrictions of this pervasive monopoly system eventually
became so intolerably broad and burdensome that they resulted in widespread
dissatisfaction and unrest in the population. This situation finally led to the
prohibition of the old system, a change formulated in the "Statute of
Monopolies" of 1624. However, there remained notable exceptions, activities
over which the Crown continued to exert control, claiming national security
concerns as an excuse. Among these domains were production of munitions,
gunpowder, saltpeter, glass, alum, and the printing press. It is particularly
noteworthy that the authorities continued to censor religious and political
dissenters.
The current patent system, and more broadly "Intellectual Property Rights" in
general, are remnants of monopoly privilege. Rather than spontaneously evolving
to meet new needs, as real property rights do, they go back to a deliberate
creation of scarcity through heavy-handed state action. Machlup and Penrose
[MacPen50] make the following, illuminating point:
Those who started using the word property in connection with inventions had
a very definite purpose in mind: they wanted to substitute a word with a
respectable connotation, 'property', for a word that had an unpleasant ring,
'privilege'.
Copyright likewise emerged from the exercise of state power, rather
than from a concern for the rights of authors. Barbara Ringer has commented in
the following manner on the confusion about the real origin of copyright
[Rin76]:
The pro-copyright theologians argue that copyright as a natural property
right emerged from the mists of the common law and took definite form as the
result of the invention of the printing press and the increase in potential and
actual piracy after 1450. They dismiss the historical ties between copyright
and the Crown's grants of printing monopolies, its efforts to suppress
heretical or seditious writing, and to exercise censorship control over all
publications. This line of argument tends to infuriate the anti-copyright
scholars who point out that the first copyright statute in history, the Statute
of Anne of 1710, was a direct outgrowth of an elaborate series of monopoly
grants, Star Chamber decrees, licensing acts, and a system involving mandatory
registration of titles with the Stationers' Company.
This was a time of new technologies; the printing press was relatively
new, and it is clear that the powers in place were threatened by the fast
technological change. An additional goal was suppression of Protestantism,
which was furthered by swift transmission of memes through the new medium. In
1637, the Company of Stationers was authorized by a Star Chamber decree to
seize and destroy any unauthorized books and printing presses. However in 1641,
the Star Chamber was finally abolished, and there was a short period of
freedom. Lots of interesting books were probably printed during the temporary
lapse of control. The first official and significant mentioning of rights for
actual authors, as opposed to merely the Crown and obedient printers, came
shortly thereafter, when the Company of Stationers was facing all this
unregulated competition. So they presented a petition to the parliament for
renewal of their monopoly privileges. More weight was now being placed on the
compensation that authors, as well as publishers, should obtain for their
uniquely valuable efforts. Thus as government control faded away somewhat, we
see a shift in the focus for the justification of copyrights. In 1710, the
Statute of Anne was passed, initiating an additional shift of emphasis from the
rights of publishers towards the rights of authors. Publishers saw it as a
tactical advantage to push for authors' rights as well as for their own. It is
from here where the myths emerged that copyright originated to secure authors'
rights. One of the arguments presented, even back in the those days, was that a
copyright system is needed as an incentive to produce something valuable that
otherwise would be a public good, which would thus be supposedly under-produced
on a free market.
In the U.S. there was a similar tendency: copyright, at first, only covered
the rights of publishers, not authors. Publishers, of course, had a vested
interest in copyright and had enough power to lobby for obtaining these rights
and restrictions. It seems like authors were only added later as an
afterthought to make it sound better. In the U.S. constitution, it is made
clear that originators of intellectual products have no natural rights per
se. Article I, Section 8, Clause 8 of the U.S. Constitution states:
"The Congress shall have power ...To promote the progress of science and
useful arts by securing for limited times to authors and inventors the
exclusive right to their respective writings and discoveries;..."
As the granting of such exclusive rights was instantiated for a purely
political purpose, an analysis should be made of whether or not enforcing these
restrictive laws indeed has benefited society over all (not just some special
interest parties), as was intended by the above quote from the U.S. Constitution.
The key problems with these "Intellectual Property Right" concepts have
already been uncovered and examined by Tom Palmer [Pal89][Pal90]. There are at
least three glaring types of problems:
As we have seen, copyrights and patents cannot be considered intrinsic,
"natural" rights which people have possessed from time immemorial. On the
contrary, they are very artificial constructs, erected by powerful governments
for very particular political purposes. However, these artificial "rights"
happen to collide head-on with more fundamental basic rights, namely actual
property rights.
If I have bought a machine, an appliance, a book, or a floppy disk that
contains some piece of software, I now own it, and it has become my property,
because I paid for it. I should have the freedom to do with it whatever I
please, including using it for its intended purpose, storing it untouched in
the cellar, reselling it, giving it to somebody else, throwing it away,
destroying it, making copies if it, modifying it, or breaking it open to
analyze its internal workings. With copyright protection, I am prevented from
doing some of these things. Although I own the object I bought, I am being kept
on a leash, with a remote power restraining my freedom over my justly acquired
property. This situation is similar in absurdity as if a hammer bought in a
hardware store were tied to the restriction that it would only be legal to use
on a particular brand of nails, but illegal for any other brand or purpose.
(That this is not common practice today just demonstrates that the hammer
manufacturing industry was not very sophisticated with regard to lobbying the
legislators !)
With patents, it is even worse. Nobody is forced to buy hammers or books. You
might be able to get along without them, and there is always the possibility of
crafting your own. However, patents restrain supposedly free individuals
precisely at their most important resource: the free use of their brain power.
People are not allowed to harvest the fruits of their own creativity,
intellectual efforts and inventions, if such intellectual products happen to
have been patented previously by somebody else.
Most people who try to solve problems, e.g. in order to design and engineer a
product, do not do so by consulting a patent database, to see if somebody else
might have already found a solution for their problem, which they would only
need to license. Instead, most engineers will sit down, think about the
problem, and develop a workable solution on their own. It is only later, in
retrospect, when they are sued, that they find out that somebody has already
come up with the same solution as well.
If real property rights mean anything at all, then people should especially
have the right to use the very body and brain they own, to solve problems,
create products, and subsequently sell them, unrestrained by monopoly powers
which some other entities are trying to exercise.
Many simultaneously thinking humans exist on this planet. It should come as no
surprise that the same ideas will present themselves to different minds,
sometimes even almost at the same time. That one of these persons can obtain a
license to block all other co-inventors from using their own conclusions, just
by virtue of having gone to the patent office one day earlier, contradicts the
principle "freedom of thought" directly, and is outrageous.
Actual property rights are the means by which scarce resources are being
managed, such that a compromise can be worked out which is as optimal as
possible, given the existing constraints. This applies to things such as usage
of land and to the distribution of tangible goods, which are complicated to
manufacture and thus have a non-zero price, and are not as freely available as
the air that we breath.
However, the current system of so-called "Intellectual Property Rights" tries
to enforce artificial barriers upon the free flow and use of information, thus
creating scarcity where it is most damaging to all of humanity and where a rich
bounty of wealth could exist instead. These barriers can only be upheld by a
rigorous legal system, under application of draconian enforcement measures. We
all know of the difficulty of preventing the free flow of information, and we
all have heard the cries for help from mighty publishing empires, alleging that
"pirates" are supposedly stealing large chunks of their "rightfully deserved"
revenues. The difficulty of enforcing these "rights" shows how unnatural and
artificial they are.
The most obvious argument against upholding such barriers is that transfer of
information can not be called theft, as is often loudly proclaimed. If somebody
copies a piece of information or idea that I hold, then I have not lost it. I
still have it, I am able to derive the same utility from it, and in addition,
somebody else is able to now benefit from it too. As the cost of copying is so
low and still going down, it would be foolish to prohibit the obvious ease of
information transfer. It is essentially suicidal to establish barriers here,
instead of utilizing the great technological capabilities to the fullest
extent. We heard of the requirement that "spoilers" be built into Digital Audio
Tape (DAT) machines. This is just perverse. The cost of copying is so low, that
the dispersal of intellectual products can be considered to be very close to
free, and creating an artificial scarcity here is a very bad idea.
Note that the creation of intellectual products does of course carry a cost,
which is often significant. Ways to recuperate such an investment will be
addressed later. However, once the information has been created, the widest
possible use should be encouraged, not prohibited. Every intellectual product
that reaches only half its potential audience has been half wasted.
As a side remark, one can observe that artificial scarcity has been often
created by vested interest groups before, in other contexts. This does not make
it any better, of course. The business of setting up arbitrary,
inconveniencing, and artificial barriers is an activity that invites many
parasites, and many governments have been rather good at such things. It has
happened more than once in history, that a city-state was founded right at a
strategic bottle-neck, such as a naturally destined river-crossing, and has set
up an enforced system to collect a bridge toll, without which humanity arguably
would have been better off. Control of import and export, and slapping toll on
goods transferred over national borders, is another favorite activity of
governments, no doubt justifiable by various "worthy" political pseudo
reasons.
Something that has not happened yet, but has been proposed occasionally, is
that programmers ought to be licensed to be able to practice their trade. Their
product is of such importance, that it can not possibly be left to the hands of
hobbyists. Just think of the safety implications and the horrible accidents
that could happen due to software malfunctioning in a flight control system or
nuclear power plant! That the possibility of forcibly restricting programming
activities to only a government-licensed elite is not entirely absurd, is
demonstrated by the fact that at least two job categories already require such
licenses, namely the medical and law professions. It might well be possible to
recruit many vocal proponents who will argue how the higher salaries available
for this elite will induce more people to become qualified and licensed
programmers, thus benefiting society enormously. As we see from this (still)
hypothetical and absurd example, by creating artificial scarcity where none
would be necessary, more harm can be done than good.
One key problem is the wide-spread perception that governments should
proactively do "good" and "useful" things, to benefit society. This is very
popular, and politicians try to always cast whatever they happen to be doing in
this light. So it has been argued that governments should pursue policies which
foster the economic strength and competitiveness of their nation. This is
usually accomplished by enacting fairly arbitrary decisions on which activities
to encourage and which to prohibit, instead of just having faith that a free
market economy will flourish on its own, without government control.
Unfortunately, almost all government interventions have undesired
side-effects, which are often difficult to foresee, and often end up being
worse than the "problem" that was supposed to be fixed in the first place.
Regarding "Intellectual Property Rights", the usual justification for
promoting this system is that companies supposedly need a specially protected
time span during which they can recuperate their investment for developing a
new product. Thus, with this system, companies ought to have an incentive to
innovate more than they would otherwise. However, is this really true?
An analysis ought to have been made of the trade-off inherent in such
legislation. As copyrights and patent protection involve such a severe
restriction of public freedom, they are only justifiable if it can be
conclusively proven that instantiating such drastic measures does more good
than harm. Otherwise, even if the effect turns out to be just neutral and not
damaging, one might as well live without all the bureaucracy. The proof that
this legislation is beneficial to the general public has not yet been provided.
It is certainly quite difficult to perform such an analysis, as we have no
experimental control available, i.e. a technology-intense society without any
such restrictions. There have been some studies on this question, e.g. [Man86],
which have found that there is a very mixed reception of patents in the
industry.
There do however exist some vocal companies and their lawyers, which proclaim
that copyrights and patents are absolutely essential for their business.
However, as the government's purpose is not to serve special interest groups,
it ought to evaluate whether all of the public will be better off on the whole,
not just certain industries or companies.
A common claim advanced to promote "Intellectual Property Rights" is the
necessity to encourage creativity. This is also given as the justification in
the constitution of the USA. Quite possibly, once upon a time, this might have
made sense, in a time when technological progress was much slower, and might
have needed stimulation. However nowadays, progress is so rapid that it does
not need further encouragement by such restrictive measures.
On the contrary, now the really negative side-effects are kicking in, with the
effect of slowing down innovation and progress. As modern technologies are so
densely interlocked and mutually co-dependent, it is now often the case that
progress in entire fields can be blocked by crucially important patents. The
duration time of about twenty years is now much too long, because many
technology generations are becoming obsolete within a few years. Many lawsuits
are precipitating leading to a sour and aggressive climate.
Nowhere is this more apparent than in the field of software. Everybody has
heard of the important public key encryption patents that are locked up in a
scandal and several law suits, blocking progress for everybody. These patents
resulted from tax payer funded research performed at universities, and now the
public is not allowed to use what they have paid for. I consider this to be
quite outrageous. Software is an especially rapid-moving field of technology,
and so the clash with something as inadequate as the patent system is
particularly noticeable. Until the early 1980s, software patents essentially
did not exist, and the software industry did just fine in the preceding two
decades, and did not seem to need any encouragement at all. It grew wildly on
its own. This quite possibly is one of the best illustrations of how an
industry could once upon a time get along fine without patents. Now that they
have been introduced, there is a big mess.
There is one organization, the League for Programming Freedom [LPF], which
advocates abolishing software patents and over-broad extension of copyright to
interfaces. These legal developments are endangering the freedom of programmers
to write the best programs they know how, entangling them in weird legal
restrictions instead. I encourage people to join the LPF. Without more
coordinated grass roots activity, programmers will increasingly fall victim to
the lawyers, who are pushing their cause while making a living, whereas most
programmers have to defend their freedom in their spare time.
So what is the job of the government supposed to be? Encouraging specific
outcomes, such as promoting economic strength and thereby installing incentives
to increase creativity through "Intellectual Property Rights" is very prone to
backfiring. Manipulating the economy is especially problematic as nobody has a
clue nor the necessary data to demonstrate clearly what the effects of such
measures will be, and whether they will be beneficial to the public, all things
considered. The issues of fostering a healthy economy are so complex that it is
quite preposterous to claim that such severely freedom-restricting measures as
patents, for example, would be actually increasing wealth. On the contrary,
such measures sound rather absurd and the negative side effects are very
visible.
Instead, the real job of the government should be to merely provide a
minimalist framework of justice, within which the economy can unfold freely.
Nothing more is needed. Technological progress is such a lucrative topic to
pursue, it will develop on its own, unrestricted. Creative new ways to make
money are and will be invented again, every time when entirely new technologies
have changed the landscape, and have displaced old and outdated technologies
and business models. As we have seen, current "Intellectual Property Rights"
are very unjust and unfair, directly interfering with real property rights. If
the government wants to do something beneficial, it should remove this
injustice completely. However, because such a reasonable action cannot be
expected to occur automatically in a government driven by special interest
lobbying by lawyers, this needs the action and broad support of the public, to
bring about the change for a better system.
If there are so many problems with "Intellectual Property Rights", it is
amazing that supposedly free humans have allowed the establishment of such a
system in the first place. Some of the reasons have been given in the
discussion of the historic origins. More important today is the question how
such a system can stay alive. There must be vested interests at work, which
actively maintain such an unjust system. Uncovering these mechanisms is
important if we want to change the system.
I will advance my personal hypothesis here, and I hope it does not sound too
paranoid. I will single out one particular profession, which I believe is
largely responsible for the mess. It may sound as if this profession was
actively conspiring against the rest of us. However, probably a substantial
fraction of this activity is usually not explicitly or consciously articulated.
On the other hand, I have heard reckless and irresponsible statements from some
representatives of this profession, which only confirmed my suspicion. At the
same time, I will try to describe the system-inherent problems with patents
which make them economically unattractive, in addition to being unjust.
As far as I can tell, the only party in this copyright and patent game, which
consistently benefits from the current situation, are the "Intellectual
Property" lawyers. To begin with, such lawyers are actively trying to promote
their "services", strongly encouraging companies to patent as much as they
possibly can, arguing that this is necessary because everybody else is doing
the same thing. This is easily extended to a full scale scare tactic, painting
dark pictures of other companies plastering the landscape with patents,
disabling technology access for the client company, unless the client launches
a pre-emptive strike first. It is also certainly the case that whenever a
company or inventor asks a lawyer whether one of their inventions might be
patentable, the lawyer is of course never going to respond "No, it is not." The
only way lawyers get business and can charge hourly rates is when they accept
the "invention" claims, no matter how dubious and trivial. It is even better
for the lawyer if it is quite difficult to sneak the patent through the patent
office, because as this process drags on, more hours can be charged to the
client. Because the cost for filing a patent is not usually prohibitive, this
first step is often relatively easy to take for a business.
However, once the patent has been successfully filed, the worries are far from
over. On the contrary, then the problems just have started. Brochures of law
firms explain the next steps. Getting a patent only makes sense if the
intention is to block other people from using the invention. This means that
the market needs to be policed for potential infringers, which need to be
reprimanded, and sued if they do not respond favourably. It is necessary to
constantly pursue this policing and to relentlessly enforce the patent, because
otherwise, the validity of the claim could be lost. This policing activity is
also still fairly low cost, if one does not mind regular legal bills.
The big problem arises when an alleged infringer does not agree to stop using
a technology, and is not willing to enter a licensing agreement. It is then
necessary to sue the infringer. This situation is almost certainly reached
automatically at some point. Littering the landscape with patents has as a
necessary consequence the precipitation of many law suits. After the lawyers
have carefully prepared the ground with landmines, they can relish a rich
harvest. Needless to say that getting sucked into such an ordeal is extremely
expensive, for both sides of the law suit. But again, the only party here that
will consistently and always be paid fat fees are the lawyers. Everybody else
pays their bills.
Duane Northcutt has remarked [personal communication, 1995] that "... a unique
situation makes this possible -- the fact that lawyers are the only group that
provide both supply and demand for a service. To my way of thinking, this
allows this positive-feedback effect to take place, where the very presence of
lawyers demands additional lawyers to be there, and so on, without any
counterbalancing force to limit it." On top of that, one can observe that they
shape the law too. No wonder is the legal scene totally out of control.
Does the current scheme make much sense for companies, and for the economy as a
whole ?
In technology companies, management has a number of options available to build
a healthy position in the market place. Given limitations in the resources,
trade-off decisions have to be made regarding allocation of money, so that the
best results are yielded, in terms of earnings. An important investment is in
research and development, to develop new technologies and products. Constant
innovation is a necessity in high tech companies.
When that effort has successfully yielded valuable results, the question
arises whether it is worthwhile to patent them, in order to exclude other
people from using or reinventing the same techniques. This is commonly called
"protecting the investment in research", to gain an unfair advantage over the
competition. An alternative option would be to not bother with all this legal
stuff, and to ensure by other means that the product can obtain a large market
share. This would involve a combination of rapid product development to ensure
being first to market, creating a really well-done and superior product, and
using well-thought out marketing strategies to satisfy the needs of a large
potential customer base.
Which of these two approaches makes more sense ?
The legalese way would be to try to corner the field by filing as many patents
as one possibly can, carpet-bombing with claims as broad as one can get away
with. This requires a substantial expenditure of legal fees. Afterwards, to get
a return on this "investment" in patents, it will be necessary to recklessly
pursue potential infringers. This will tie up many key researchers in court
rooms (and in helping to write patent applications in the first place), instead
of letting them pursue what they are best at, namely research and development.
Companies should stop wasting precious money on patent attorneys, and instead
use the resources to make a technically superior product and to build a
stronger presence in the market. To stake out a firm position early in the
market, it is not necessary to have patents; on the contrary, that is a drain
of valuable resources better invested in a more fruit-bearing fashion.
Innovate, don't litigate ! To protect your original ideas as prior art, the
best way is to openly publish them in research journals. This additionally is
terrific advertisement, if you can point out that your company and products are
at the forefront of innovative research, as opposed to being backed mainly by a
lot of legal restrictions that hinder the users in every conceivable fashion.
Note that a few key technical innovations are not going to be the only or even
major part of your product. So much work is necessary to get all the little
details right, to make the product intuitive and easy to use, to have good
customer service, etc. Publishing the main key innovations in no way "gives
away" your advantage if you give care to all the other implementation and
business issues, which are necessary anyway for a successful product.
If the patent system were abolished, in the long term, the following
beneficial effect would occur. Interested parties will pay individuals or teams
to solve particular problems, because they need the solution for a product or
the like. Because of the increased accessibility and fluidity of information
that the lifting of the restrictions would imply, this would mean essentially
to solve the problem once and for all, and not only for funder's own (monetary)
benefit, but for all of humanity. This makes much more efficient use of the
capital of brains that we have available on this planet. There are too many
important problems that are in desperate need of good solutions that it is
utterly wasteful to dabble around aimlessly by repeating the same, already
solved work. This repetition is mandated if one has to work around patents in
order not to infringe upon them.
This scenario will possibly provoke a response similar in flavor to the
exclamations and fears of workers in manufacturing, that their jobs become
useless and get replaced by automated machinery, which would lead to
wide-spread unemployment. Yet nowadays, in the age of fully automated
mass-production, many more jobs have been created in other fields under
healthier working conditions. It is certainly true that many software providers
may get laid off if their useless service of reinventing the wheel over and
over is no longer needed. But it will free their minds to be put to use for
working on yet unsolved problems. And the overall benefit to humanity will more
than outweigh the temporary friction.
Today's protectionist situation feels like over-grazing the same old
grasslands to squeeze out that last little juice-droplet while innovating as
little as possible. This mindset is rather counter-productive and results in a
stagnation of progress, despite pressing global problems. What is needed more
are incentives to discover new grass-lands, to search for pathways where whole
new and fertile territories open up, that contain a lot of exciting
possibilities. These opportunities are constantly present in front of our
noses, just waiting to be discovered, if we are actually on the lookout. There
is a long way to go until we have reached the final, ultimate, and
non-improvable limits to complexity (which would render us all terminally
jobless :-).
For a number of reasons, patents benefit mainly large companies with huge
patent portfolios. These corporations actively use them to build up "high
barriers to entry" for potential competitors. This affects small companies much
more negatively than larger companies. Small companies are almost certain to
require licensing somebody else's patents, which adds complications to the
tricky business of starting a new company in the first place. This reduces
significant and revolutionary innovation substantially, which usually happens
at small start-up companies. This is one of the reasons why the government's
patent system does not achieve its intended goal of truly increasing
innovation.
So, in conclusion, whatever resources are drained off by the "Intellectual
Property" system, which could have been put to better use for research,
development, and marketing, do not produce useful results and products, and are
lost and wasted, not contributing constructively to the wealth of humanity.
How is the current system being reinforced ? The only party that really
benefits from the current situation has a strong incentive to maintain it. And
so lawyers are vocally promoting their views. For everybody else, the issue is
a nuisance, and vocally defending freedom takes away precious time from real
work, just to fend off something unpleasant. If one takes a look at who writes
the legal columns in computer magazines, it is always lawyers, for whom this is
good advertisement opportunity, and they never question the validity of the
current "Intellectual Property" system.
One of the main, deeply disconcerting features of the current system are the
broad restrictions placed on third parties (besides producers and customers),
which have never directly entered into any sort of an agreement with the
primary producer. This is both unfair and is preventing a free economy to work
in its most efficient and innovative mode.
The solution thus is to get rid of the sweeping "Intellectual Property Rights"
in current use, and to revert to a more traditional way of doing business,
relying more on contracts between mutually consenting parties. This can take a
variety of different forms, from a system of intellectual product distribution
very similar in appearance to the one we have today, all the way to very
different and unconventional models. This change will also open up
experimentation with possibly much more attractive business models, which have
not yet been thought of.
Much of what will follow will take software distribution as an example,
because its relative importance in the economy will only grow in the future, as
we progress to a world where general purpose agile manufacturing is becoming
more wide-spread, and where progress in product design and design capabilities
will make the real difference. I will consider manufacturing recipes for
products to be software in the widest sense.
Currently, most software is distributed to end customers in shrink-wrapped
boxes, with associated shrink-wrap licenses. I believe they have not yet been
tested in court, but quite likely such licenses would not be enforceable
anyway, and they are a farce. One party, the customer, never signs a contract,
and so a valid contract is never established. Instead, and because these
shrink-wrap licenses are not particularly binding, software publishers today
are using the usual scare tactics by demanding draconian enforcement measures,
as is embodied by the Software Publisher's Association (SPA), which has
launched witch hunts to eradicate "illicit copying". Instead of bashing the
principle of making copies, and making people feel guilty when they do copy,
one should encourage making free copies of anything that can be copied. One
should never cripple technological capabilities. On the contrary, one should
make use of them to the fullest extent.
Software publishers that would like to retain the current system of selling
boxed software, would need to adapt and make the software licenses more
directly enforceable, if copyright restrictions were dropped. This means
essentially that producers and customers both would need to sign a binding
contract to transfer a software license. This is a bit more cumbersome, but
then at least all parties are made explicitly aware of what is going on and
what is at stake, instead of the murky implicit assumptions for which there is
no real legal handle for enforcement, thus encouraging a guerrilla warfare
against users and other bystanders. In such a contract, it could be specified
that the user will obtain the benefit of using the software, if they are
responsible for making sure that no copies are passed on. Any other kinds of
restrictions might also be specified in such contracts, but both parties need
to agree. When a customer violates a contract by passing on a copy, then the
producer really does have a handle to enforce their agreed-to rights
relentlessly. Presumably, the software sold under such contracts will have
unique signatures, making copies traceable to whoever leaked them. However, any
other people out there, who have never signed such a contract, should be free
to copy whatever they can get their hands on. Even if they get a piece of
software for which other people have entered a contract agreement, they as a
third parties should be able to freely copy it, without getting prosecuted.
Only the person bound by contract, who originally leaked a copy, should be
prosecutable, but in that case even more so. Quite possibly, this kind of a
system would mainly be used to distribute very expensive high-end software,
where the cost is more of a dominant factor than the legal overhead.
Different variations of this still very classical distribution scheme can be
implemented. A significant variation is distribution of information products
over the Internet. With strong end-to-end encryption, monetary transactions and
delivery of software modules are becoming possible. This system seems to be
best suited for selling many small modules that are priced low, so that the
damage done by somebody distributing the software to non-paying persons is
relatively small. Part of the electronic transaction could include a simple
"contract" that disallows such further distribution, and if a customer violates
the agreement, the producer can cut off that customer from obtaining future
products.
For a producer, an important part of the overall strategy will become building
up the image of a technology leader, as opposed to some entity that is trailing
behind by making cheap copies of other companies' products, without adding
anything interesting new. Many customers like to support the innovators, if the
price is not too unreasonably high. An additional service that producers are
selling along with their software is the right for paying customers to receive
technical support, patches for bug fixes, and frequent updates.
Another more radical option would be an Agorics [MilDre88] approach.
Instead of selling a program, an agoric system would charge for usage of a
program as a service. This would allow a much more fine grained assessment of
what actual value and utility was obtained by the customer while using the
software for a given task, without having to pay for the bundle deal that is
common nowadays. Many of the features in bundled software might not be needed
by many customers, and yet they have to pay for them currently. Agoric systems
would resemble more a consulting service. In order to solve a problem, a piece
of software could be rented or "hired" for some amount of time. Specialized
compute servers could even run compute-intensive jobs, and the price could be
calculated by also taking into account how many CPU cycles, and other resources
such as memory, were consumed. This could give rise to an exciting new
information-economy. Initially, human service providers could write the
software that customers use, and as time goes on, evolving agoric systems could
be blended smoothly with intelligent machinery that increasingly will be able
to provide solutions to design problems without much human assistance.
An important type of intellectual product is the timely delivery of
information, such as news, weather reports, and stock trading information. One
of the key values of this type of product, or rather service, is speed. Such
information decays relatively rapidly with time, so that there is often not
much of a point of copyrighting it. In order to make money with this type of
service, it is important for a provider to build up a stable and large base of
subscribing customers, who would like to use the service on a regular basis.
The argument can be brought forward that certain information, like accurate
descriptions in an encyclopedium, are timeless and of continued value, thus
rendering them not very protectable through a time-depreciation mechanism. It
seems from the physics of information distribution, that there just are areas
of activity which do not lend themselves for doing business in the usual sense,
and which are only really the domain of charity. It is unreasonable to enforce
by draconian measures sufficient barriers in an area that does not lend itself
easily to such a treatment, only to be able to put up business transactions
which benefit merely a small minority and impede with the freedom and
convenience of the majority of the public. On these grounds, one could easily
propose other non-sensical measures, such as declaring that the charitable
donation of used clothing to the needy should be forbidden, because it is
"anti-business". After all, every piece of clothing donated, instead of thrown
away, "robs" companies the sale of an additional new piece.
Of increasing importance are very different schemes for making money with
intellectual products. It is becoming common practice nowadays to launch new
software products by providing free copies of the program, possibly in an early
beta test version. Often, full-fledged versions are available as well. In this
case, the freely offered product usually serves as an attention getter for
additional services that a producer would like to sell, such as consulting, or
additional, more complex software systems. Free software can serve excellently
as advertising for the company producing it. Many more interesting and new ways
of making money with intellectual products are possible, without needing
restrictive copyrights and patents.
It is important that we remedy this dreadful legal situation as quickly as
possible, because modern life is becoming information to an ever larger extent,
which is a great opportunity for personal empowerment and enrichment of our
lives. But we can loose all the advantage if we do not watch out and let the
corporate lawyers and other vested interest groups take our freedom away.
Emerging technologies such as molecular nanotechnology, which will have a
dominant impact on our lives starting early in the next millennium, is based on
information to an even larger extent than any of today's technologies. It is
essentially guaranteed that the development of nanotechnology will be retarded
by one order of magnitude, if we continue to let the legal situation spin out
of control to the current degree. I personally do not want to live in a world
that is so thoroughly screwed up with restrictive legalese that it robs from
individuals the personal incentive to do wonderful and creative things. Do you
?
Let us stand on each other's shoulders, instead of each other's feet !
"Eternal vigilance is the price of freedom."
[LPF] see http://www.lpf.org/
[MacPen50] F. Machlup and E. Penrose: "The Patent Controversy in the Nineteenth
Century." J. Econ. Hist. 10 (1950), p.1, 16 ???
[Man86] E. Mansfield: "Patents and innovation: An Empirical Study." Management
Science 32 (1986), p.173-181
[MilDre88] M. S. Miller and K. E. Drexler: "Markets and Computation: Agoric
Open Systems." The Ecology of Computation (1988), ed. by Bernardo Huberman,
Elsevier Science Publishers/North-Holland
[Pal89] T. G. Palmer: "Intellectual Property: A Non-Posnerian Law and Economics
Approach." Hamline Law Review 12 (1989), p.261-304
[Pal90] T. G. Palmer: "Are Patents and Copyrights Morally Justified ? The
Philosophy of Property Rights and Ideal Objects." Harvard Journal of Law &
Public Policy 13 (1990), p.817-865
[Rin76] B. Ringer: "The Demonology of Copyright." in "Perspectives on
Publishing" edited by P. Altbach and S. McVey (1976), p.38 ???
Bureaucratic formalities
This article is (c) copyrighted 1995, which means that you are
explicitly in possession of the right to make as many copies of it as
you like, in any medium you desire, provided you copy it in its
entirety, including this notice. Quoting from the article is also allowed
if it is not mis-represented out of context, and if proper attribution
and detailed information concerning the source is included, which
will easily enable the retrieval of this full text.
If you believe that the issue of retaining personal freedom and
straightening out the current "Intellectual Property Right" situation is
important, I urge you to distribute this article to as many other
human beings as possible, and to consider sending a donation of any
kind, size, or smallness, to enable the writing of additional articles
and further action. All of this work has been done in the little spare
time I have been able to scratch together. Donations can be sent to:
Markus Krummenacker
P.O. Box 1073
Los Altos CA 94023-1073
USA
I will also happily accept donations of any size through PayPal, at the eddress below.
Comments, corrections, and other suggestions are welcome and can
be directed to kr@n-a-n-o.com.