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## Reason on IP Protection and Creativity284

rnturn writes "A long but interesting article over at Reasononline discusses a paper written by a pair of economists and published by the Federal Reserve Bank of Minneapolis (!) and the reactions to it of several other economists. A snippet from the article: 'Moreover, U.S. court decisions in the 1980s that strengthened patent protection for software led to less innovation. "Far from unleashing a flurry of new innovative activity," Maskin and Bessen write, "these stronger property rights ushered in a period of stagnant, if not declining, R&D among those industries and firms that patented most."' Not exactly news to most readers but it appears that their paper is making waves in economic circles."
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## Reason on IP Protection and Creativity

• #### IP Protection (Score:3, Funny)

by Anonymous Coward on Saturday February 22, 2003 @03:08PM (#5361485)
Indeed, we need more IP Address protection... er... wait-a-minute...
• #### Patent not anything new idea's. (Score:3, Funny)

on Saturday February 22, 2003 @03:11PM (#5361499) Homepage Journal
We're not claiming to have invented anything new, really," says Boldrin. "We're recognizing something that we think has been around ever since there has been innovation. ..."

Wow. They should patent that "not anything new" idea, just like everybody else, nowadays ;-).

--sex [slashdot.org]

• #### General Patents Information (Score:5, Informative)

on Saturday February 22, 2003 @03:15PM (#5361515)
If you're looking for a broad range of information concerning patents--what they cost, trade secrets, legal matters, USPTO information, etc.-- a good place to start is Patents.com [patents.com]. Or you can always go to CrazyPatents [crazypatents.com] to see some of the more ridiculous patents out there.

GameTab [gametab.com] - Game Reviews Database

• #### Re: Urinal Fly! (Score:2, Informative)

by Anonymous Coward
That Crazypatents site is a gold mine of hilarity.

http://www.crazypatents.com/images/Large/4044405-1 .gif [crazypatents.com]

Here is something [weblogs.com] just like that idea actually, but it's implemented in a truly ingenious way. They have an image of a fly in the urinal which looks real and so people will automatically aim for it.

Oh, and I actually came across GameTab [gametab.com] the other day. Great site, I've found it very useful. I'm looking forward to Freelancer right now, but think I'm going to wait until the reviews [gametab.com] start coming in.
• #### Length = boring? (Score:4, Funny)

on Saturday February 22, 2003 @03:16PM (#5361525) Homepage
"A long but interesting article"

Ah, the true readership culture of Slashdot shows itself. ;)
• #### Re:Length = boring? (Score:2)

Yes long articles are boring. If your article gets boring then you need a better editor that wont let that shit pass. If you cant even edit your own content well enough maybe you shouldn't be writing. I dont want to sonud like a troll here but a good writer can say the same thing in less words which means it will be understood better. If you write and article that is too lengthy, too roundabout in the way you make your point your readers will quit paying attention. Personally i dont have time to read anything that is longer than it has to be.
• #### Re:Length = boring? (Score:2)

That is our way of saying "i got lost half way through it".
• #### Eye Opener (Score:5, Interesting)

on Saturday February 22, 2003 @03:17PM (#5361528) Journal
Reactions to the paper have been mixed. Robert Solow, the MIT economist who won a Nobel Prize in 1987 for his work on growth theory, wrote Boldrin and Levine a letter calling the paper "an eye-opener" and making suggestions for further refinements.

It is amazing, /. has been saying this for years, but some one with a Nobel Prize calls it an eye opener?
• #### Re:Eye Opener (Score:5, Funny)

on Saturday February 22, 2003 @03:38PM (#5361638) Journal
some one with a Nobel Prize calls it an eye opener?

See, I told you they would listen to Reason.
• #### Re:Eye Opener (Score:3, Funny)

It is amazing, /. has been saying this for years, but some one with a Nobel Prize calls it an eye opener?

This supprises you? It should be pretty obvious that slashdot posts aren't exactly written by Nobel prize winners. Heck, half the time I wonder if they've even been awarded highschool diplomas. :D

-
• #### Re:Eye Opener (Score:5, Insightful)

on Saturday February 22, 2003 @04:26PM (#5361882)
Hmmm... well people on /. have been saying all sorts of stuff for years. The difference between wild speculation (i.e. what happens on /. most of the time) and rigorous accademic inquiry (like the papers produced by Boldrin and Levine) is that the later produces theories which can be tested against the facts, refined, put into use, etc.

Anyone can say "intellectual property is BS". Few can give a rigorous proof of why intellectual property is BS.
• #### Re:Eye Opener (Score:4, Insightful)

on Saturday February 22, 2003 @04:39PM (#5361953) Journal
Excellent point and perhaps the quote was taken out of context in the article or I just read too much into it. However, it seemed to have an air of, "well, gee I didn't think of that".

Also, while not a scientific study, I have seen some pretty good arguements before this paper with data to back it up. I have seen companies get crushed and reamed over IP. So, at the same time, it isn't as if there weren't good arguements against it. Personally, I am for some kind of IP, but I think it has been taken way, way too far and last too long.
• #### Re:Eye Opener (Score:5, Insightful)

on Saturday February 22, 2003 @05:23PM (#5362119)
However, it seemed to have an air of, "well, gee I didn't think of that".

I think the surprising part for economists was the extent to which the predictions of earlier models depended on certain simplifying assumptions. Economic models always contain assumptions that are unrealistic, and usually this is fine as long as the predictions obtained from a model remain approximately accurate even when its assumptions are relaxed a bit. In this case economists had assumed that intellectual goods are entirely non-rival and that copying costs nothing at all. At first glance these look like pretty reasonable assumptions because they are actually pretty close to the truth - economists often use assumptions that are far more unrealistic. What is surprising here is that even very slight changes to these assumptions - a small degree of rivalry and a small copying cost - make a big difference to the predicted results. Some economists were surprised to see just how big that difference can be.
• #### Re:Eye Opener (Score:5, Insightful)

on Saturday February 22, 2003 @06:02PM (#5362322) Homepage
What is surprising here is that even very slight changes to these assumptions [...] make a big difference to the predicted results.

And that's what is significant and eye-opening. When a system or relationship previously assumed to be linear is shown to be non-linear, that throws off everything -- all analyses and assumptions based on that have to be re-evaluated. It also raises the question: what other relationships have we assumed to be linear but aren't? (IOW, how much of what we thought we knew is wrong?)
• #### Re:Eye Opener (Score:4, Insightful)

<ninjadroid&gazuga,net> on Saturday February 22, 2003 @05:52PM (#5362271) Homepage

The difference between wild speculation (i.e. what happens on /. most of the time) and rigorous accademic inquiry (like the papers produced by Boldrin and Levine) is that the later produces theories which can be tested against the facts, refined, put into use, etc.

Not all slashdot posts are pointless speculative drivel, and many "rigorous academic inquiries" are pompous, pedantic, and obfuscated. The medium through which a thing is said does not inherently render it good or bad. Granted, you didn't say that, but I feel the need to point it out regardless.

Anyone can say "intellectual property is BS". Few can give a rigorous proof of why intellectual property is BS.

AFAICS, formally educated economists have done nothing but support conventional wisdom for the past few decades. If they have done anything great, I haven't heard of it, probably because I'm not an economist and "those in the know" do not feel obligated to explain to the public (in words we can understand) why their theories should govern us.

Anyone can support intellectual property by reiterating conventional wisdom. Frankly, I'm not comfortable with a system that isn't constantly being challenged. If the academics aren't gonna do it, I'm more than happy to have the slashdot trolls fill the void.

I believe the real reason why Boldrin and Levine are getting an audience is because economists don't care to listen to people who aren't of their ilk. Although I suppose I'll have to make a "rigorous academic inquiry" into that hypothesis before anybody listens.

• #### Re:Eye Opener (Score:4, Insightful)

on Saturday February 22, 2003 @07:14PM (#5362630)
AFAICS, formally educated economists have done nothing but support conventional wisdom for the past few decades.

I am not an economist either, but I do have to read a fair bit of economics in my line of work. To me it looks like economists have done some very useful work in recent decades. Some of that work has been surprising, and has been turned to good use. Take for example the work of Arrow (and many others) in comming up with the (now) old model of the production of intellectual goods. One of their predictions was that intellectual goods were being under-produced. In turn this led to a massive expansion of public and private R&D expenditure in the US. All the evidence suggests that this increased spending has produced a large part of the growth that the US economy has seen over the last decade or two. Sure it now looks like they were too enthusiastic about strengthening intellectual property law, but in other ways their predictions have turned out to be accurate.
• #### Re:Eye Opener (Score:3, Interesting)

Hey,

Not all slashdot posts are pointless speculative drivel, and many "rigorous academic inquiries" are pompous, pedantic, and obfuscated. The medium through which a thing is said does not inherently render it good or bad.

Yes, but a Slashdsot post is typically constructed in a few minutes, and usually uses only anecdotal evidence, if any at all. And they frequently have poor spelling and grammer, like my last sentance.

They also tend to suggest radical solutions, such as 'The entire IP system should be abandoned', which betray a lack of knowledge about other industries and sectors which rely on IP so survive.

AFAICS, formally educated economists have done nothing but support conventional wisdom for the past few decades.

There are a lot of discussions going on in economics. You just don't hear about them, just like you don't hear about things going on in English Literature.

And it could be that the conventional wisdom is, well, right.

Just my $0.02, Michael • #### Re:Eye Opener (Score:4, Informative) on Saturday February 22, 2003 @05:46PM (#5362236) Homepage /. has not been saying this for years. I rarely see cogent slashdot posts on economics, much less posts that include a mathematical model. Slashdotters usually limit themselves to the type of comments you just provided, "See!! We're right! Woo!!" But, we mustn't confuse instinct with academic analysis. Moreover, we ought not confuse the article, originally posted here [minneapolisfed.org], with the actual paper. The staff research report by Boldrin and Levine here [minneapolisfed.org] is 40 pages of economic theory. The summary is mostly fluff and sound bytes. Yeah, its appealing to think it may be correct, but the arguments on both sides [harvard.edu] are very strong. more FWIW, you can find more of Levin's work [repec.org] at various places. Prof. Danny Quah also has some thoughts [lse.ac.uk] on the subject. • #### Re:Eye Opener (Score:2) Bah, it's easy to be down on this stuff because we're looking at it from the inside. Of course it seems stupid to us that supposedly smart people are WAY after the fact catching on to the fact that something is wrong. Look at it the other way around: it's about time someone outside the industry has seen what's wrong and published a work with actual academic credibility. It may not change anything but it is a big step in the right direction, and lends a bit more credibility to our points. • #### Orignal Paper (Score:5, Informative) on Saturday February 22, 2003 @03:17PM (#5361530) Journal Boldrin and Levine's original paper is available here (pdf) [dklevine.com]. • #### Practice abstinence not protection (Score:4, Funny) on Saturday February 22, 2003 @03:19PM (#5361539) Journal IP protection does NOT work, abstinence is the solution. Be cool, Don't do it! [nytimes.com] • #### Now you may hate them. (Score:5, Funny) on Saturday February 22, 2003 @03:29PM (#5361591) Journal Now you may hate the entire country of France, but they have a saying, "Der er biler paa striben i aften" which could be transferred to the Simpson quote "Take an existing product and put a clock in it". Of course innovation requires that you won't get ripped of when you come up with a great idea, but at the same time what good is it if no one can use it. Would the WWW have accelerated so fast if you were to pay license fees for every application using HTML codes? I think not. It's a fine balance that you have to maintain. To little and too much protection is evil. • #### Re:Now you may hate them. (Score:2, Informative) That's closer to Danish (or maybe Norwegian) than French... Or is there some hidden sect in France that uses Danish as a secret language? • #### Spot on (Score:5, Interesting) on Saturday February 22, 2003 @03:36PM (#5361619) Homepage Journal The consequences of the simple fact that copies of information can be made at no cost or loss to the original are profound. Unfortunately, current mainstream thinking is totally misguided by applying conventional ideas of property to thoughts and ideas. The recent trends in DRM etc are actually consequences of this. If you haven't yet, go read Stallman's A right to read [gnu.org]. He anticipated DRM 9 years ago. The point is that there are certain things as unenforceable digital restrictions, such as sending a copy of a file on a machine you own to another machine you own through a channel you own. The media companies are seeking to prevent exactly this. To succeed, they will have to own all computing. From this point, I think we are on a path of no return. Either we will end up in a big-brother like situation, or there will be a major social revolution and rebellion, an overthrow of the existing order, and major reevaluation of the thinking on intellectual property issues. From the article: Central to Romer's theory is the idea of nonrivalry, a property he considers inherent to invention, designs, and other forms of intellectual creation. "A purely nonrival good," he wrote, "has the property that its use by one firm or person in no way limits its use by another." A formula, for example, can be used simultaneously and equally by 100 people, whereas a wrench cannot. This guy "gets it". What needs to be done is to raise awareness on a large scale so that we can meet the threats head on. • #### Re:Spot on (Score:2, Interesting) If there were no IP laws, DRM and technologies like DVD encryption would be far more widespread, as they would be the only method for content creators / publishers to protect their work. Open formats like the CD would never be deployed - instead, creators would try to limit playback to their own propriety devices .. Would that really be an improvement? • #### Re:Spot on (Score:5, Interesting) on Saturday February 22, 2003 @05:10PM (#5362072) (I don't think the parent post was really proposing elimiation of IP laws, but let's proceed from there anyhow) Well, "If there were no IP laws", then there would be IP laws. This natural pattern occurs accross human societies. (Even without technology to build DRM machines) If a law or regulating principle is useful (or seems useful to enough people), then it will be created, with or without the government's help. The government might be able to implement the law in more efficient or fair manner than the private sector could, but someone will create it. For a fantasy example, take murder. If murder were governmentally legalized, soon enough murder would be illegal again- but the enforcers would be private contractors. Since murder is legal, revenge-killing of a murderer is also legal. When you sign up for life-insurance, you'd allocate a portion of the award to go towards hiring avengers (if you were murdered). Of course, the insurance company wouldn't pay if you had yourself been killed for venegance, so they'd create arbitration panels to determine culpability to see if a particular killing violated "policy" or not. Eventually, a near duplication of the existing criminal investigation/enforcement arms of a normal government would be created. Likewise, if copyright law was abolished, then trade organizations of publishers, authors, and distributors would implement their own form of copyright law. Before Barnes&Noble allowed you to buy a book, you'd need to show your "Authorship Protection Association Membership Card". To get this card, you'd have to read and sign a big contract, wherein you promise to never duplicate (or maybe even re-sell) any APA works you might acquire. Violate this, and you've agreed to pay a big fine. (Don't pay, and they take the card and continue billing you). So then, if the private sector can create necessary laws without government help, why should the government bother to have any laws? 2 reasons: • Government enforcement may be inherently more efficient and less-wasteful than private enforcement would be. (Some may laugh at the "government efficiency" oxymoron, but it can happen in some cases) • Because the government version of the laws will be more fair or permissive then what private companies would create. The second point is the big one for copyright. As US copyright was established in 1777, a short period of enforcement was created (14-28 years). This was long enough to give publishers some peace of mind, but short enough to make ideas free within a single human lifetime. A much shorter period (so short that it truely reduced the profitability of publishers) would've been an incentive to create a "private sector copyright law" out of an interlocking set of contracts imposed on every customer (EULAs, you might call them). And chances are, those contracts would last far longer than any governmental copyright would. To prevent a private group from drafting a "virtual law", we need to offer some kind of copy-protection from the government. But this is a compromise- they should get only enough coverage so that building an alternative enforcement mechanism is more expensive than it's worth- and no more than that. As you may know, lobbyists have already pushed us far past that point [techlawjournal.com]. • #### Re:Spot on (Score:2) - Eventually, a near duplication of the existing - criminal investigation/enforcement arms of a - normal government would be created. The difference is such a society would not be passing laws against consensual behavior such as anal sex and victimless crimes like smoking pot... Because if they did, they'd get killed... Oh, wait, we call that revolution, don't we? Maybe that's a solution... Naah, never happen... • #### Re:Spot on (Score:3, Insightful) The sad fact is that the majority of humans feel that an offense to their sensibilties (Where did he stick it? Disgusting!! or She ate what? Sick and depraved!!!) is sufficient grounds for the commission of a crime. Ah well. • #### copyright lords (Score:2) IMHO, DRM is about the copyright lords trying to fense off their own territory as society moves into the information age. Of course noone is going to respect that fense, so with trillions at stake all hell will certainly break loose. It is analogous to the plantation masters trying to get back controll over slavery as society moved into the industrial age. In a desperate attempt, they broke off from the union. Of course, noone respected that boundary either. • #### My opinion on the subject. (Score:5, Interesting) on Saturday February 22, 2003 @03:36PM (#5361626) Homepage Journal I like IP rights. I think they're good; people should have the right to make a few bucks with something they invented, without the worry of competition for a little while. This is a good thing, because it gives motivation to innovate -- why create something if your competitors are free to copy it immediately and glut the market? However, I agree that IP rights are out of control. Copyrights are being extended indefinitely, patents are granted with broad wording that allows for devious undermining of previous IP. The cause is very obvious: corporations. They have the money and power to lobby for extentions and special rights on their legal monopolies. The solution is simple: eliminate corporate right of ownership of IP, and return it to the hands of the inventors and authors. Obviously even with such a change, there would be openings for abuse, but they would be greatly limited by also eliminating the right to sell or transfer IP rights. Anyway, that's my opinion on the subject. Feel free to pick it apart. • #### Re:My opinion on the subject. (Score:4, Insightful) on Saturday February 22, 2003 @04:20PM (#5361850) Homepage Journal why create something if your competitors are free to copy it immediately and glut the market? This is something I noticed in the article. Especially when they talked about pharmaceuticals. One company develops a drug, and it costs tons of money. Then another company copies the drug and sells it for much much less money. This causes the developing company to lose. The first thing that came to mind, that they didn't address, was why doesn't the developing company glut the market? I mean nowadays the generic drugs are cheap and the brand name drugs cost a fortune. The brand name supposedly is the inventor of the drug, and thus should know how to make more of it faster and cheaper. I mean they invented it after all. If bigdrugco makes a cure for eldiseaso, they should make a shitload of it and sell it for less than anyone else. Pure old capitalistic price competition. The result will be that other companies wont profit if they undercut bigdrugco's prices. If a vaccine for eldiseaso comes along, the company developed that will become profitable and bigdrugco better have something new, unless of course they made the vaccine themselves. If someone comes along who can manufacture the drug cheaper than biddrugco, then bigdrugco loses. The company which can produce the drug in the greatest ratio of quantity/quality/price will win in the end. The advantage of developing a drug is that you have the first and best opportunity to be that company. • #### Re:My opinion on the subject. (Score:3, Informative) The first thing that came to mind, that they didn't address, was why doesn't the developing company glut the market? The traditional pro-patent argument goes like this: • Inventors are solitary geniuses who toil in garage laboratories to create helpful new machines. They can eventually sell these and make a well-deserved fortune, but only if no large company can sneak a look at the idea first. Large companies have a pre-existing advtange in capacity for production, distribution, and marketing. They could glut the market far quicker than the original owner ever could, so he needs legal protection against them. Whether or not you accept this argument for patents as having been valid one or two centuries ago (check out this series of books [gutenberg.org] for a flawed dramatization of those benefits circa 1900), today additional problems with that argument have become clear. The one which most interests me is that there is an additional pre-existing advantage a large company will have over a "lone inventor": an advantage in capacity for lawyers. That means they can file patents more quickly and more frequently than any individual can. Well in advance of knowing if a particular idea is workable or not, they can patent it- so, just in case someone figures out how to make it run, they can snatch it back from him. Organizations like IBM and Kodak have mixed teams of lawyers and quasi-engineers registering 1000s of patents per year. There's a fair chance that if you come up with a clever idea to use in your next project, somewhere there's a mass-produced corporate patent out there, waiting to squash you if you ever attract the company's attention. • #### Re:My opinion on the subject. (Score:2) It could be a problem if (1) Research cost is very high, and (2) Production cost is very low. In that case, it may be profitable for a third party to produce it and sell it at just above production cost... but if the developing company adopts that strategy, it still loses because it may not be able to recoup research cost (including research cost for dead ends). This might especially be a problem for products with a strictly limited market, e.g. a cure for sleeping sickness isn't going to find many affluent customers. • #### Re:My opinion on the subject. (Score:4, Interesting) on Saturday February 22, 2003 @04:29PM (#5361899) That's no simple solution. You're suggesting that an entire category of behavior be outlawed. A huge amount of laws would be required to effect it. There's two ways a legistative action like that could succeed: a) work "technically", but have no real effect b) usher in a totaltarian enforcement mechanism to ensure compliance (much less likely) So supposing copyright was non-transferable. Publishers will start offering authors long-term contracts to "rent" those rights. (This happens sometimes in Japan. Authors there are much more likely to technically retain copyrights, but as they have long-term agreements with publishing houses, the overall effect is about the same) You can try outlawing that too, and they'll come up with another way to work around the law, and another and another. If the lawbooks eventually expand to plug all the holes, then you're left with authors who are unable to delegate the publications of their works to any others. A woman will write one book, and as long as it's successful go through a daily administrative grind of authorizing every printing or sale. Only when sales slow to a trickle is there time left in the day to start writing again. (Any ability to hire others to help control your copyrights opens a door to enter a long-term contract with them, creating a loophole in the proposal. So assistants would have to be banned) If I can't sell or transfer, or perform virtually equivalent acts, then it shouldn't be called IP (intellectual property) at all, because transferability of ownership is an essential feature of "property". A more modest, and reasonable, start to a solution would be to eliminate corporate ownership of IP. Does that sound the same as what you proposed? It's not. I don't mean that transfer of copyrights should be banned- but that corporate IP holders should be treated the same as everyone else. That means no "Author's Life + 70 years, vs 90 years for a corporation"- all copyrights should last the same time (X years from date of publication), regardless of who holds it (or how long he lives). • #### Re:My opinion on the subject. (Score:2) more modest, and reasonable, start to a solution would be to eliminate corporate ownership of IP. Does that sound the same as what you proposed? It's not. I don't mean that transfer of copyrights should be banned- but that corporate IP holders should be treated the same as everyone else. That means no "Author's Life + 70 years, vs 90 years for a corporation"- all copyrights should last the same time (X years from date of publication), regardless of who holds it (or how long he lives). Corporate owners of patents are treated the same as individual owners as far as term goes. I think a lot of people believe that an individual owner of copyright only has 70 years total, while corporations have 95. That is wrong. Individuals have 70 years in addition to the rest of their lives . As for copyright, the difference between author's life + 70 and 95 is minimal. Sometimes, 95 years from creation is longer than the life of the author +70, sometimes it is not. It evens out in the end. For example, photographer Ansel Adams died in 1984. Works that he owned individually expire 70 years after 1984, the end of 2054. 95 years before 2054 is 1959. Basically, any work he created after 1959 has a shorter copyright duration than it would if it were owned by a corporation, but works he created before 1959 (the majority of his famous works) have longer lives. For a music example, take Paul McCartney. His first famous works were created 40 years ago. A lot longer than the 25 year difference between life + 70 and 95. • #### Re:My opinion on the subject. (Score:2) Individuals have 70 years in addition to the rest of their lives Yep, that is exactly what I said. As for copyright, the difference between author's life + 70 and 95 is minimal. Except if the "author" is somehow immortal- such as corporations are. That's why the law dictates a different length of copyright for corporations, since their "life" may never end. Thus, if my proposal (that corporations be made to hold copyright in the same manner that an individual does) is to make any sense, all mention of "Author's Lifetime" must be removed from copyright duration. (Basing a copyright on an author's life is a bad law, and unfair for several reasons, even aside from corporations) • #### Re:My opinion on the subject. (Score:2) Thus, if my proposal (that corporations be made to hold copyright in the same manner that an individual does) is to make any sense, all mention of "Author's Lifetime" must be removed from copyright duration. There really would be no point in doing this. First of all, there is already a presumption that a work expires in 95 years, unless the author's estate filed a certificate with the LOC. Second of all, most famous works are already owned by a corporation. The copyrights to most famous movies, music, TV, are all owned by corporations. Third, what would such a scheme accomplish. The problems with IP aren't caused by the mere fact that a corporation owns IP. • #### Re:My opinion on the subject. (Score:2) The problems with IP aren't caused by the mere fact that a corporation owns IP. If you've read the start of this thread [slashdot.org], that is exactly what the original poster claimed: The cause is very obvious: corporations. He suggested an unreasonable solution, I made a more compromising counter-suggestion. If you think he's wrong, you could reply up there. • #### Re:My opinion on the subject. (Score:2, Interesting) Obviously even with such a change, there would be openings for abuse, but they would be greatly limited by also eliminating the right to sell or transfer IP rights. The disturbing thing to me is that no one looks at the obvious - creators don't generally own the rights to what they create. Companies bitch and whine about how copyrights and patents are required. They need the ability to own their creations to make innovation worthwhile. Wait a sec, here - there's a glaring problem with this: Michael Eisner didn't create Mickey Mouse. Neither did the entity we call Disney. Some schmoe cartoonist working for Disney created Mickey Mouse. Let's assume for a second that the current common premise about copyright and patent is correct. Let's say that monopoly power over innovations are required to drive further innovation. Why do programmers write programs? Why to researchers in pharmaceutical companies do any research? Why do musicians make music? If I were to write some ground-breaking code while employed for a corporation, I sure as hell wouldn't get rich. I'd get paid my normal wage, and I might get a promotion for doing good work. Where's my incentive to create? I can get the same paycheck by mindlessly doing what I'm told, and I can get the same promotion by brown-nosing well enough. I suppose the main point I'm making is: Corporations, and particularly CEOs of corporations, don't create anything. Individuals or groups of individuals, perhaps employed by corporatoins, do. By their own assumptions, corporations that own IP instead of the individuals that created the IP destroy the drive to innovate. • #### Re:My opinion on the subject. (Score:2) If I were to write some ground-breaking code while employed for a corporation, I sure as hell wouldn't get rich. I'd get paid my normal wage, and I might get a promotion for doing good work. Where's my incentive to create? I can get the same paycheck by mindlessly doing what I'm told, and I can get the same promotion by brown-nosing well enough. I suppose the main point I'm making is: Corporations, and particularly CEOs of corporations, don't create anything. Individuals or groups of individuals, perhaps employed by corporatoins, do. By their own assumptions, corporations that own IP instead of the individuals that created the IP destroy the drive to innovate. Corporations own a large number of patents. Eliminating that would be difficult to accomplish (because of corporations ties to Congress) and stupid. A company like Intel or IBM pays people to invent things. People don't just develop new ways of making semiconductors on their own. They are paid to do that. Moreover, most corporations provide incentives for inventing products. You invent a new transistor, the corporation will give you a bonus. • #### Re:My opinion on the subject. (Score:2) The cause is very obvious: corporations. They have the money and power to lobby for extentions and special rights on their legal monopolies. The solution is simple: eliminate corporate right of ownership of IP, and return it to the hands of the inventors and authors. They also have the money to fund the experimentation that leads to innovation. If an inventor needs some motivation or reimbursement for their creation, why would a corporation not need the same to fund larger projects which could not be handled by an individual? Eliminating the transfer of IP rights might be interesting, as long as the rights were properly assigned in the first place. • #### Good! (Score:2) This is a Good Thing(tm). This isn't some long haired hippie hackers. This is the fscking Federal Reserve! CongressCritters actually listen to them! Of course, the Fed doesn't throw suitcases full of money at them, but still... • #### READ your employment agreements! (Score:5, Interesting) on Saturday February 22, 2003 @03:44PM (#5361661) I just had to leave my place of employment, as the new management wanted us to sign new contracts. Part of the contract stated that any idea, document, illustration, patent, trademark, (and the list goes on and on) that I may come up with, on or off the clock, or on or off the job site, at any time during my employment, was then the property soley and exclusively of the company. Most "innovation" and invention has traditionally been done by a person in their garage or basement, working on the proverbial better mouse trap. Corporations are trying to cash in on this, saying stuff like, well, you wouldn't have gotten that idea if you didn't work for me, so it is now mine. No wonder there's been a lessening of "innovation", invention, progress, etc. What I do on my time is mine. I may work for a corporation, but I refuse to be owned by one. • #### Time to put an end to the "monopoly" myth (Score:4, Insightful) by Anonymous Coward on Saturday February 22, 2003 @03:44PM (#5361662) The basic idea of civil society, as articulated by the great enlightenment social contract philosophers, is this: You give up your "natural rights", that is, the right to take by force whatever you have the power to take, to the state, and in return, you are granted "civil rights", such as the right to your own property, the right to freely enter into contracts, freedom of speech, and so on. Now, most copyright and patent infringement advocates don't have a problem with private ownership of material property, even though this is also an artificial construct which takes away their "right" to steal whatever they like and gives whoever acquires ownership of property through lawful market transactions a "monopoly" over its use. So why do they claim that intellectual property is any different? Usually the answer is a hodgepodge of weak analogies, claiming it is similar to such things as oxygen and water, unsubstantiated slogans like "information wants to be free", and of course the favorite retort of totalitarian zealots, "its inevitable". But the most insidious of them all is the recent pronouncement that copyright, and intellectual property laws in general, create "monopolies", and so in fact are in opposition to the principles of free market economics. This is a gross perversion of the term monopoly, as it usually applies to monolithic, stifling state-supported enterprises. You might consider the case of the Coca-Cola corporation: They sell a popular soft drink which you may be familiar with. The secret to its popularity is great taste, and this is because of a time-tested, proprietary formula. In order to produce this beverage, naturally, operators of bottling plants have to enter into agreements with the Coca-Cola corporation, and pay royalties. If one is to follow the analogy favored by piracy advocates, Coca-Cola has "monopoly" on this drink, and it is unfair that only they are allowed to sell it, and it impedes the operation of free markets. But just ask their competitors: This idea is ridiculous. Just because they can't sell beverages made according to the exact Coca-Cola formula doesn't mean that they are prevented from selling soft drinks. It just means that in order to compete, you are forced to innovate yourself, and this results in the diversity that a market economy should provide: Pepsi, RC Cola, Jolt, and many other unique varieties of cola are available, and they are all able to profit because of their distinctive taste and branding. Why should they not be rewarded for their investment in research and development? And why should someone who rights software, books, or music not also be rewarded? Of course an individual or corporation ought to have rights to the unique result of their own creative work, and they should also have the right to transfer these rights to anyone they please if it is in their own interest. Exclusive rights over something like the text of a particular, source code to a particular program, or a particular performance of a popular song, do not translate into a "monopoly" in the general case: It only forces competitors to produce their own original products, which produces diversity that we as consumers should value anyway. It isn't like Oxygen or water: Every O2 or H2O molecule is the same, but Microsoft Windows XP is the result of billions of dollars of research and development money invested over 20 years. And maybe it wants to be free, but perhaps so does your car: That doesn't mean that someone who tries to steal if from shouldn't be thrown in jail. We accept these abrogations of "natural law" because the result is more prosperity and more fairness for everybody. • #### Re:Time to put an end to the "monopoly" myth (Score:2) Of course an individual or corporation ought to have rights to the unique result of their own creative work, and they should also have the right to transfer these rights to anyone they please if it is in their own interest. Exclusive rights over something like the text of a particular, source code to a particular program, or a particular performance of a popular song, do not translate into a "monopoly" in the general case: It only forces competitors to produce their own original products, which produces diversity that we as consumers should value anyway. The point of the new economic theory is that by creating something new - something that would today be called copyrightable or patentable - the inventor already has a form of monopoly rights. He has the unique widget he has invented. He can sell this invention to the highest bidder. The highest bidder can then be first to market. The system works if "being first to market" has a substantial advantage. Substantial means they can afford to pay the inventor for his time. So, if the inventor spent$40,000 inventing his widget, the advantage of being first to market needs to allow a bidder to pay the inventor that $40,000. Then, the system functions. This would definitely result in a dramatic decrease in value of invention, but could result in a dramatic increase in innovation. There are still problems, though. The theory depends critically on the ratio in cost between creation and "value of being first to market". Reverse engineering something doesn't happen overnight, but it could happen really fast if a big corporation saw your idea, and put a large number of good people on it (I guess, then, their argument would say the right of being first to market must be substantial if someone will allot so many resources to duplication - therefore the inventor must have been well paid). I guess I sorta see them arguing that 1-2 years of monopoly protection will be conveyed by being first to market, and that would be enough. They may be right. • #### Re:Time to put an end to the "monopoly" myth (Score:2) You are evil. Some poor guy spends$40 000 on inventing an idea for you, and you just cover his expenses?

That's just plain mean.

You are evil. Some poor guy spends $40 000 on inventing an idea for you, and you just cover his expenses? Quite the contrary. First of all, it is not my idea, and you are a flippin idjit for thinking I was doing anything more than explaining the point of the economic theory. Second of all, the amount an inventor would be paid would reflect the advantage his invention could give to the purchaser. The system only works if this amount is equal or greater than the inventor's costs. It can be much more. Instead of an invention having a value associated with a 17 or 20 year monopoly, it has a value associated with the value of being first to market. This value is MUCH less (obviously), but may be perfectly adequate to support innovation. They suggest a dramatic reduction in IP protection, and argue it will increase innovation. I am quite sure they are right in some markets, and unsure about all markets. • #### Re:Time to put an end to the "monopoly" myth (Score:2) I was making a joke about what I assumed to be a typo, but now it seems you were serious. The inventor comes up with the idea, and you buy it off him for the same as his expenses. Which is, for him, a loss, as not only did he R&D the thing which you give him back, but he also didn't work elsewhere, so him and his family go hungry because he hasn't benefited from his invention - that's like having someone work for you for free but pay their mileage and give them a uniform. A wage is what's needed. I'm not saying he needs to be paid muchos moolas, the original point was a joke. The 'evil' comment should have alerted you to this but apparently not. I don't give a shit about economic theory. That's why I am making jokes about your up until now quite rational and reasonable comments. So explaining it again will not benefit either of us... • #### Re:Time to put an end to the "monopoly" myth (Score:2) The inventor doesn't get paid a wage. He gets paid the value of "being first to market" for his invention. The system breaks down if this value is less than what would be a reasonable wage for the inventor's time. The inventor can, of course, make substantially more than that, depending on the value of being first to market. If the inventor makes something easily, and it is REALLY tough to reverse engineer, then he makes a lot of money. As he should - he did something easily that others cannot do. The system does not, however, have much reward for inventors that do things that others can do quickly and easily, just for being first. A kind of penalty for making obvious inventions that does not exist now. • #### Re:Time to put an end to the "monopoly" myth (Score:2) But then his costs are the same as any so-called pirate's - i.e., production and marketing. Being the original producer of the product, he should be able to improve on that product and maintain his "first mover" advantage (provided he handles all the other aspects such as marketing properly). So being paid back your development costs immediately is valuable. That is, after all, why people think IP is needed - to enable recoupment of R&D costs. What they forget is that there are other ways to pay for those costs, such as bootstrapping (paying for the R&D with part of the profits you made on previous economic activities). The point is there are many influences on these matters, and the notion that it all reduces to the necessity of "protecting" (i.e., forcing everyone else to not compete with) an inventor's concept is nonsense. • #### Re:Time to put an end to the "monopoly" myth (Score:5, Interesting) on Saturday February 22, 2003 @04:09PM (#5361791) Homepage So why do they claim that intellectual property is any different? As a prelude I'd like to point out that writings or inventions simply aren't property. IP -- which is a very misleading term -- actually refers to the copyrights, patents, etc., and not the subject matter they exist in reference to. It's a subtle, but important distinction. At any rate, two differences present themselves. Firstly, there is frequently a greater public necessity to use writings and inventions that other people have developed as opposed to a need to use other people's real or personal property. Secondly, that that writings and inventions are nonrivalrous. That is, if you have an invention, and I use that invention, I do not preclude your use of it. Whereas if you had a car, and I took the car, you could not use that car at all while I had it. This is a gross perversion of the term monopoly, as it usually applies to monolithic, stifling state-supported enterprises. Copyrights and patents are granted by the state, exclusively to particular parties. One needn't be ATT to have a monopoly, and at any rate, the assertion that patents, copyrights, etc. are monopolistic dates back at least over two hundred years (Jefferson was suspicious of permitting them, because they'd create monopolies), and likely even farther back. Why should they not be rewarded for their investment in research and development? And why should someone who rights software, books, or music not also be rewarded? Who shall reward them? If you want to reward them, that's fine. But why should I be forced to do so? To compel me to reward them amounts to a gross imposition on my own liberties. Remember the civil society you mentioned? It is fundementally a quid pro quo. People enter into the social contract because they feel they're going to personally benefit more from doing so than they would if they did not. Thus, while I don't mind necessarily, rewarding authors or inventors, I see no reason to do so unless I benefit more from doing so than I would if I abstained. Certainly the mere assertion that creation 'earns' the ability to curtail my rights is nonsense. Someone could spend millions upon millions of dollars inventing the best buggy-whip in the world, but I won't feel beholden to use it, and a patent with no economic value hurts the inventor just as much, as they still receive no reward or compensation. Patents, copyrights, marks, and trade secrets all have their place. And I have no problem in respecting them within reason, because it is in my best interests to do so. However, when they become oppressive; that is, more of a burden than a benefit, then they need to be reduced to a more managable level, or abolished outright. Exclusive rights over something like the text of a particular, source code to a particular program, or a particular performance of a popular song, do not translate into a "monopoly" in the general case: It only forces competitors to produce their own original products, which produces diversity that we as consumers should value anyway. This is not always true. For example, someone might discover the demonstrably best possible method of doing something. Perhaps the ONLY method of doing something. There will be no substitute of like value. Permitting rights in such a case would harm the public measurably. At any rate, you're looking at this one-sidedly. Remember, what's going on is fundementally a bargain between creators and the rest of the world (including all the other creators). Prosperity and fairness are fine if both sides get them, but a system that prefers creators is unacceptable to the people being asked to submit to the demands of the creators. Thus, it won't stand. It just isn't worth it. • #### Re:Time to put an end to the "monopoly" myth (Score:3, Insightful) Who shall reward them? If you want to reward them, that's fine. But why should I be forced to do so? To compel me to reward them amounts to a gross imposition on my own liberties. While I agree with most of your post, I think you are making a serious mistake here. While it is certainly a "gross imposition on your own liberties" if the government were to, say, force everyone to pay Microsoft, this is not the issue. The problem here isn't with rights, as it is ridiculous to claim that your rights are being violated; rather, it is an efficiency issue. The issue is that you are profiting by the inventor's labor, while you are giving him nothing in return. Why shouldn't he be able to require that you must pay him something in order to profit by his labor? Let$foo be a consumer good (eg books). Suppose it were legal to take a $foo right out of the store without paying for it. Of course, you still could pay for it, but most people wouldn't. There wouldn't be any rights violated, but nobody would make$foos anymore, because they wouldn't get anything for it.

Suppose now that you have to pay for the $foo before leaving the store. Your rights haven't been violated; if you don't think the$foo is worth the price, don't buy it. It is, after all, a consumer good. You don't need it to survive, and are not forced in any way to buy it; if you do buy it, you do so because you think it is worth price($foo). Therefore, you gain on the whole. The question then becomes, is this system the most efficient one? It is certainly quite efficient for physical ("rivalrous") goods, but it is not very efficient for intellectual or "non-rivalrous" goods, because everyone's utility could be increased at a cost of \epsilon simply by copying the$foo around to them. The current economic models deal very poorly with intellectual property, and therefore need to be modified or replaced! But what can they be replaced with? I don't know. In fact, I would say that nobody knows. Nonetheless, it is clear that not everyone can be allowed to copy the goods for free, as the lack of rewards for the inventor would stifle innovation even more than patents do today.

All you open source zealots out there, remember that the cost of programming is relatively small compared to other R&D. It may be one thing to copyleft some program that you wrote in your spare time (and I have done this myself), but it is quite another to copyleft pharmaceutical research which took years to develop in a multi-billion-dollar facility, plus several more years of expensive tests to get FDA approval. And these costs don't even take into account the failure rate of such research, ie the number of promising leads which turn out to be dead ends.
• #### No, rights do not cease to governments (Score:2, Insightful)

Government is not about sacrificing rights for common unity and security, but rather about people having natural law rights who organize to secure those rights. Property rights are a natural law right, copyrights and patents are not. (accept that if you invent something you always have the right to keep it secret, and you have the right to be acknowledged as the first creator because someone else who claimed to would be acting fradulently)

The right to copy things is a natural law right that exists outside of government. It is like freedom of speech, freedom of religion, freedom of the press, and the right to bear arms. These rights exist outside of government, or anywhere in the world even if local governments refuse to acknowledge them. Unlike other property rights that derive from the fact that not every body can use something at the same time. With information and ideas they can - copyrights and patents are an artificial construct that has artificialy harmfull consequences.
• #### Re:No, rights do not cease to governments (Score:2)

I disagree. Property rights were developed long before there was serious consideration into the whys and wherefores of them, thus they appear to be natural rights. However, I think that the same utilitarian model that explicitly serves to justify copyrights and patents works just as well for real and personal property.

I encourage you to consider that analysis, particularly with regards to common property (wherein any owning party may take any action) or jointly (wherein all owning parties must agree to take any action).
• #### Re:Time to put an end to the "monopoly" myth (Score:4, Insightful)

on Saturday February 22, 2003 @04:33PM (#5361919) Homepage Journal
But the most insidious of them all is the recent pronouncement that copyright, and intellectual property laws in general, create "monopolies", and so in fact are in opposition to the principles of free market economics. This is a gross perversion of the term monopoly, as it usually applies to monolithic, stifling state-supported enterprises.

nah - 'state monopolies' are a different animal (and a different discussion - I think you're trying to get off-topic by arguing the meaning of the words) - in fact there's a strong body of law in the US for dealing with private monopolies, it's been around for about 100 years so the idea of regulating private monopolies is certainly not a new one.

The US govt has has had various types of success in this area (railroads, oil companies, AT&T [the bells are slowly merging back together], IBM, and even Microsoft's recent conviction).

Copyrights do form a type of monopoly restricting competition ... why can't I go down to the record store and choose between competing versions of the latest Rolling Stones album? it's because only one company has the right to publish them ... if there were 3 chances are CDs would cost more like $5 each than$15+

• #### Re:Time to put an end to the "monopoly" myth (Score:2, Interesting)

> Now, most copyright and patent infringement advocates don't have a problem with private ownership of material property, even though this is also an artificial construct which takes away their "right" to steal whatever they like and gives whoever acquires ownership of property through lawful market transactions a "monopoly" over its use. So why do they claim that intellectual property is any different? Usually the answer is a hodgepodge of weak analogies, claiming it is similar to such things as oxygen and water, unsubstantiated slogans like information wants to be free", and of course the favorite retort of totalitarian zealots, "its inevitable".

Patent law deprives me of the right to use the fruit of my own labour, if I independently invent something that has already been patented. Given the patent office's tendency to patent obvious ideas, this is a real problem.

If I independently invent something, why should I be prevented from using it just because someone else invented it too?

In concert with this, companies like microsoft use patent law to prevent interoperation. They embed some patent in a protocol, and presto! you can't write an interoperating program without infringing.

Tim Josling

Congress: the best government money can buy.
• #### Re:Time to put an end to the "monopoly" myth (Score:3, Interesting)

- The basic idea of civil society, as articulated
- is this: You give up your "natural rights", that
= is, the right to take by force whatever you have
- the power to take, to the state, and in return,
- you are granted "civil rights"...

I haven't read the "great social philosophers" you refer to, but this is nonsense. It sounds more like propaganda than the reality.

The reality is this: The state says, "You give us everything you have (including your life if we say so) and do exactly what we tell you to do, and we will protect you from the bad people outside and inside our borders - and if there aren't any bad people, we'll make some - by simply telling you they're bad."

This is the historical reality of government - it is a protection racket, pure and simple.

And no one has a "natural right" to steal. First, because there is no such as a "natural right". Second, because coercion as an economic activity is nonproductive for the species as a whole.

The idea of the state being defined as a "monopoly on the use of the coercion" is basically from Ayn Rand, and is refuted by her own acceptance of the Austrian School identification of the fact all monopolies must be basically coercive to exist. The same problem exists for a monopoly on coercion as exists for any monopoly - namely, investment to try to achieve monopoly profit. If coercion is profitable, more and more people will try to invest in it, resulting in competition and the eventual collapse of the monopoly. The only way to maintain a monopoly on coercion is to be imperialistic as well as coercive - basically you have to rule the world, which brings you into conflict with the whole world, which becomes the very unproductive general spread of coercion that you intended to avoid by having a monopoly on coercion.

And if everyone agrees you should have the monopoly on coercion, then why bother? Everyone already agrees not to coerce in that case.

No, the state is a protection racket, and there are absolutely no rational arguments to justify its existence.

You are also misconstruing the nature of monopoly. In a sense, everything is a "monopoly of one". That is irrelevant. A monopoly can only exist if it is enforced by coercion. Otherwise, you have the situation you describe with Coca Cola (which, BTW, I suspect, relies on trade secret IP, and therefore, yes, is a monopoly in that sense.) The reason Coke can sign agreements with bottling plants to produce their product is because they own the trade secret of Coke and anyone who obtains that trade secret will be prevented by the state from producing that product. This is state-supported monopoly, exactly as you describe.

The fact that other companies can produce competing soft drinks merely proves the basic problem with monopolies - there is more than one way to do something and a product which is the result of a "natural monopoly" (i.e., the proprietary Coke formula) can be competed against by some other way of doing the same thing (unless of course it runs afoul of overly broad patents, which is another IP problem). The only way to achieve a true monopoly is via coercion.

IP laws create a monopoly for a given product, not an industry. You are conflating an industry monopoly with a product monopoly. But the same economic effects apply. Some one is granted a monopoly profit and everyone else is prohibited from investing in this profit at the point of a gun (i.e., state law). The result is a distortion of investment, higher prices for goods to everyone else, and as Bodrin and Levine point out, lack of reason of innovate on the part of the monopolist.

Someone was complaining recently about Beethoven having to put out a lot of product to compete with guys down the street, since he didn't have IP laws to protect him. This seems to fly in the face of the notion that a creator is only motivated to produce when he has protection. It is clear that if you are producing to survive, you will produce more, not less, if you have to compete. And without IP, you have to compete more, not just in creation, but in production, marketing, etc. And if you cannot compete, then by definition your product is not as valuable to the rest of the world as those of your competitors.

The notion that IP has some sort of "objective value", and that the producer has to be compensated commensurately, is nonsense. The basis of human economics is subjective value. You value something to the degree that you will give up something you have for it. If you don't actually do that, your actual valuation of that product is much less than your stated valuation. IOW, everybody gets exactly what they deserve...unless of course they can use coercion to get it...

So the idea of IP boils down to some people wanting to get more of your money for their product than you are willing to pay for it, and they are willing to use a gun (IP law) to get it by preventing other people from producing the same or similar product at lower cost.

The supposed positive effect of this behavior as increasing the net amount of useful concepts in the world has never been established, and is probably dwarfed by the many other reasons and methods for producing useful concepts.

The fact of the matter is, most people produce a useful concept, go into business, sell it, make a living, and never have to sue anybody for "infringement". Only those people who suddenly find themselves unable to compete (due to changes in the market and/or changes in technology) suddenly feel a need to invoke "intellectual property".

• #### Re:Time to put an end to the "monopoly" myth (Score:2)

I don't think that word means what you think it means. Let me see if I can clarify:

But the most insidious of them all is the recent pronouncement that copyright, and intellectual property laws in general, create "monopolies"

Yes, they do, and this is neither a new idea, nor unintentional. The idea of intellectual property is to grant creators a limited monopoly for a period of time so that they can make money from their creation. Statesmen and philosophers from 300 years ago would find that statement reasonable.

and so in fact are in opposition to the principles of free market economics

You seem to assume that monopolies are bad, but monopolies aren't -- necessarily -- bad. Monopolies that stifle competition are bad. As you pointed out, monopolies like the copyright on a novel encourage competition; since people aren't allowed to make money off of my work, they have to make their own, and all of it will eventually fall in the public domain (maybe :-/), enriching society as a whole. Monopolistic companies aren't even illegal, either, unless they're anti-competitive monopolies. If Microsoft held a monopoly on PC operating systems by virtue of the sheer quality of their offerings, didn't engage in any price fixing or market manipulation to prevent OEMs from selling other operating systems and didn't leverage that monopoly to artificially acquire other monopolies, then the DOJ would never have had any beef with them, and they would indeed be a shining example of American entrepreneurship.

The things we need to keep in mind are:

1. There is no natural "right" to ownership of ideas, unlike physical property, because ideas can be duplicated infinitely, unlike physical goods. If I take your idea, we both have it. If I take your car, you have to walk to work.
2. Our goal is to maximize creativity and grow knowledge, not profits, or fulfill some idealistic vision of how people "ought" to benefit from their own good ideas. People benefitting from their ideas is a good thing, sure, but society's goal is to get them to do it, regardless of how.
3. Taken together, points 1 and 2 mean: Intellectual Property is a means, not an end

Now, profits are a good incentive, the entrepreneurial spirit drives a huge amount of innovation -- and it should be abundantly clear that people can't create on an empty stomach, so creators need some way of getting paid. But what these economists are wondering is if, in the specific case of patents, maybe, just maybe, our current approach to encouraging creativity is actually backfiring and slowing us down. There is evidence to suggest that this is the case.

There are also arguments about whether the end justifies the means, but we're looking at a more fundamental breakdown -- if you discover that your means push you away from your desired end, then you'd be a fool to leave the system as it is.

• #### Good sign, I hope it makes a difference (Score:3, Informative)

<slashdot&rzbx,org> on Saturday February 22, 2003 @03:51PM (#5361696) Homepage
"...it appears that their paper is making waves in economic circles."

I'm extremely happy to hear this. You can't imagine how upset the issue about patents makes me when I keep hearing about more protection, stronger laws, another lawsuit against infringement, another idiotic patent issued, and more power to the large coporations that in reality due some of the least amount of innovation, especially considering their size, power, and wealth. Good to see the issue finally coming out besides just in court suppressing the little guy. I read most of the paper a few days ago, well said, and its good to see such a long article discussing the issue on Reason.com. I must say that the issue scares a lot of people. It is because the elimination of such strong laws giving an individual or corporation ownership of an idea would in effect help bridge the gap between rich and poor. Scary isn't it? The idea would also cause a major shift in economic structure in various industries that have relied on using intellectual property as a means of profit or part of their business. Like on the front of "Programming Perl" says, "There is more than one way to do it." Yes, the current system works, but how well? Does the constant threat of piracy and increase in spending to fight it a sign of an efficient system. I sure don't think so.
• #### Re:Good sign, I hope it makes a difference (Score:3, Insightful)

It is because the elimination of such strong laws giving an individual or corporation ownership of an idea would in effect help bridge the gap between rich and poor.

Do you really think so? What would publishing houses pay authors for their work if there were no copyright laws? $0.00 is what. And what chance would a small biotech firm have against Merkh after they brought their drug to market? The history is there - read it. The problem with advocation of disassembly of the patent and copyright system is that nobody has got a proposal accounts for the issue of trade secrets. Prior to patents companies just kept thier innovations secret or tied them up in very onerous license agreements. The big win for patents is that they force disclosure in return for the monopoly right. Also, since we have the rather amazing correlation between the advent of the patent system and the onset of the industrial revolution any claim that the patent system harms innovation has got to explain how techology and quality of life have advanced far more in the 300 years since the development of IP rights than it did in the 5000 years between the invention of agriculture and the development of the concept of the patent. • #### Of Course! IP is not free market (Score:4, Insightful) on Saturday February 22, 2003 @03:58PM (#5361732) It is such a relief to hear this. Intellectual property is not free market, or even a valid form of property. People just take it on faith that just because the government calls something a property, that it is - and has all the advantages of free market property ownership. In fact if you don't believe in it, you are even called socialist. Identifying myself as libertarian, this irks me even more. They just don't get it, IP is not about property at all - it is about controll. • #### Perhaps... (Score:2, Informative) It would be best to look at the constitution and see if we haven't strayed from the original intent. The purpose is stated for patents and copyrights that they be allowed in order to promote "the progress of science and useful arts." In their infinite wisdom, the courts and legislators have taken to protecting even newspaper articles(!!). The judges back in the 1800's would scoff at the notion and you can open any newspaper and see how well it has served them. The remarks of Mr. Justice Thompson in the Circuit Court in Clayton v. Stone & Hall (2 Paine, 392), in which copyright was claimed in a daily price-current, are opposite and instructive. He says: 'In determining the true construction to be given to the act of Congress, it is proper to look at the Constitution of the United States, to aid us in ascertaining the nature of the property intended to be protected. '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 writings and discoveries.' The act in question was passed in execution of the power here given, and the object, therefore, was the promotion of science; and it would certainly be a pretty extraordinary view of the sciences to consider a daily or weekly publication of the state of the market as falling within any class of them. They are of a more fixed, permanent, and durable character. The term 'science' cannot, with any propriety, by applied to a work of so fluctuating and fugitive a form as that of a newspaper or price-current, the subject-matter of which is daily changing, and is of mere temporary use.' BAKER v. SELDEN, 101 U.S. 99 (1879) That view stands our current view on its ear but I find it hard to justify a claim that software is truly promoting the usefull arts and sciences. Maybe we need to get a little more stingy with our patents and copyrights and see if it doesn't make a difference. • #### Re:Perhaps... (Score:2) The position that software is useful is defensible. People "use" software for important tasks all the time. (Patents, too, are all for something that might be useful) However, the majority of things claiming copyright aren't software, or instructional books- they are items of entertaining fiction. Romance novels and action movies. There's no way those things can be called useful, except by a definition of "useful" so expansive that it loses all meaning. A really constructionist court, therefore, would find that the US copyright law is broader than the Constitution allows, and should be repealed so a suitable version can be passed in it's place. However, this will never happen. In the Eldred case, the Supreme Court demonstrated that they will value 100 years of unquestioned Congressional precedent over the text of the Constitution. ("Don't rock the boat") Maybe we need to get a little more stingy with our patents and copyrights I'd love to see the USPTO's annual output cut to 5% of what it is today. Then patents which get approved might actually mean something. • #### Get the entire paper (Score:3, Informative) on Saturday February 22, 2003 @04:07PM (#5361782) Here [minneapolisfed.org] It's actually from march 2002. It's a 30-page academic paper with differential equations and other nice stuff, for the impatient I have reproduced the abstract: ABSTRACT: We construct a competitive model of innovation and growth under constant returns to scale. Previous models of growth under constant returns cannot model technological innovation. Current models of endogenous innovation rely on the interplay between increasing returns and monopolistic markets. In fact, established wisdom claims monopoly power to be instrumental for innovation and sees the nonrivalrous nature of ideas as a natural conduit to increasing returns. The results here challenge the positive description of previous models and the normative conclusion that monopoly through copyright and patent is socially beneficial. • #### On the rent-seaking behavior and cost of patents (Score:4, Insightful) on Saturday February 22, 2003 @04:16PM (#5361825) Homepage This is such a refreshing article which finally attempts to put good economic theory to work rather than the extremes on both sides: artists will dies f starvation, or IP will make it illegal to think. I particularly found interesting the concept of rent-seeking bahvior, "...producers are likely to engage in what economists call " rent-seeking behavior" -- efforts to protect or expand turf (and profits) by fighting for government-granted monopoly protection -- and that behavior is likely to stifle innovation. Expensive patent races, defensive patenting ..., and costly infringement battles are common functions of corporate law departments." I sure would like to have seen a deeper exploration of that theory, as I feel that is where the most problems lie with the whole IP issue. Consider for instance the cost of the patent itself. The article does a good job of analyzing the cost of R&D; the initial investment in technology. But it doesn't talk about patents in their own as an object of value. How many IP-hoarding companies exist soley to accumulate patents, and have never made any investment into research or innovation? The patent has an inherent value separate from that of the technology that it may describe. I would also like to see more thought about the issue of the interaction of patents with each other. The article seems to concentrate solely on one idea at a time...that each patent or IP instrument exists in isolation of all others. It does not deal with the deadlock of interdependent patents. When company A has a patent on idea X and company B has a patent on idea Y, it becomes an impediment to invent idea Z which is created from both. And in the real world, this deadlocking of ideas is out of control. And finally, the article does not consider fully the costs imposed by the patent or IP system itself. Especially since patents are written in such a manner as to be maximally ambiguous and stealthy it becomes an extreme economic burden on any inventor to know if the ideas being developed have already been claimed. Thus why we are seeing such strange imbalances; you know, 10 lawyers for every engineer. • #### Re:On the rent-seaking behavior and cost of patent (Score:3, Interesting) Just a question here... if I remember correctly, patents *only* apply to commercial use for sale. They do not apply to making a thing for yourself and using it. Is this correct? Because if it is, then an obvious defensive position presents itself: the homestead. You have enough money to set up your own self-sufficient, cash-free homestead, and stick it in a state that is free from land taxes (such as W Va, or California -- whoops, scratch California: that was a joke). Then you can invent and use what you want and need, to your heart's content. Of course, a self sufficient homestead doesn't run on the power of just one family, so part of this will be that you allow others to live there if the contribute and fit in. But still, all cash free. Now, this ends up being unprofitable for those who live and help out, but unprofitable does not equate to a loss, when real losses are occuring elsewhere. In other words, if that's the best deal they can get, then they will come. My train of thought isn't to advocate anything -- but simply to note that if things are really progressing in this direction, it would seem a form of feudalism with petty kings will be next. • #### Re:On the rent-seaking behavior and cost of patent (Score:2) if I remember correctly, patents *only* apply to commercial use for sale. They do not apply to making a thing for yourself and using it. Is this correct? By law [patents.com], a patent owner can " exclude members of the public from making, using, or selling the claimed invention". It's very hard to claim damages from noncommercial use, and traditionally lawsuits from that were rare. However, pre-internet, commercialization was just about the only way someone could spread an invention widely. So today, it's possible that a project like Debian [debian.org] may be claimed as damaging a company by infringing it's patents [sourceforge.net] and distributing the results. What a patent holder cannot do is stop someone from discussing or analyzing the invention. Even it they use full duplicates of the patent text to do so. (Patents are unlike copyrights in that way). But the age of the internet has muddled this point as well. Now that patents are handed out for software, what happens to the kind of person (and they do exist) that can execute source code in his head? (or just on paper?) it would seem a form of feudalism with petty kings will be next. The end result of a "free market" process will always be feudalism or totaltarianism, unless some force outside the market acts to maintain the "freedom". • #### Damn right it's big news that Reason gets it. (Score:5, Interesting) on Saturday February 22, 2003 @04:18PM (#5361835) Homepage First of all, Reason is the one major publication other than a Linux rag or The Nation, that would get it right off the bat. The Reason Foundation does what its conservative counterparts screech about doing, but never get around to: rolling back government involvement in ours lives. They can claim credit to saving Indianapolis taxpayers around$600M because they put together a plan to privatize all non-essential government services.

This is very bad news for the content cartels. While many people may not know about Reason, most Libertarians do and a lot of Libertarians who actually sided with the cartels will probably be swayed over against them. My father is frequently amazed (he's a staunch conservative) at how many times he's been forced to agree with a position taken by Reason Online because it just "makes sense" more than anything from the National Review. I've long said that Libertarians and Classical Liberals better represent the conservative platform than Conservatives themselves.

I read this in their print magazine. This is not a turning point against the cartels, but it is certainly a major blow. There are two types of the Right: those that believe individual rights are an essential ingredient to morality and those that believe that individual rights are expendable in order to maintain public "morality." Reason in my experience wins over the former quite easily on most issues because its arguments are realistic and it proposes how we can balance morality and individual rights in its articles related to vice and stuff like that.

One of the things that IIRC I've seen argued in Reason articles on drug prohibition is that stripping drug users of free medical care even if they are veterans would do 10x more to stop drug usage than jail terms. They frame such issues in terms that the Right can appreciate and make it very clear that such programs are nothing more than government subsidizing licensious behavior.

Invariably Reason ends up kicking its conservative competitors' asses on a regular basis. It indirectly exposes them for the statist hypocrites that they are such as ol' Goldberg over at NRO who thinks that those who are complaining of slippery slopes in regard to the PATRIOT Act and DeptHS are whiny paranoid nuts. This is an article that every /.'er in the US should keep bookmarked in case they need it against a cartel shill.
• #### Re:Damn right it's big news that Reason gets it. (Score:3, Interesting)

First, I have to say that I am a libertarian who never sided with IP. So that's where I'm coming from. But I'm also a conservative (religious/libertarian conservative, not Military/Industrial conservative). That puts me in the Right.

However, I've got a question for you: you said that there are two kinds of Right: those that believe individual rights are an essential ingredient to morality and those that believe that individual rights are expendable in order to maintain public "morality."

Did you never stop to consider a third possibility? Those who believe that morality is an essential ingredient to individual rights?

Because that's where I am. I really and truly believe that we are losing our rights because we lost our morality -- and Clinton's cigar wasn't just about sex. It was rather a telltale sign of the lost morality that results in our lost rights.

I guess I'm just kindof surprised that that one didn't occur to you, because I'd tend to think that most biblical conservatives would fall into the same classification as I do. I tend to think it would only be fake biblical conservatives (there for the votes), who would say "rights are an essential ingredient to morality."

Anyhow, if you'd like to debate the issue from that point of view, I'd be happy to entertain your thoughts.

----
You might think this is a sig,
but it isn't. I type this by
hand every time, of course.
• #### Re:Damn right it's big news that Reason gets it. (Score:2)

Did you every stop to consider a fourth possibility?

That rights are fictions, and that morality is irrelevant to proper (read: long-term effective) behavior?

There is "moral" behavior and there is "correct" behavior. The latter depends on doing what works, both in the short term and the long run. And that depends on knowing what works, which depends on science and rationality.

So-called "moral" behavior is primarily motivated by the desire to be "one-up" on everyone else by defining one's own behavior to be "moral" and everyone else's "immoral". And humans have thousands of years of experience doing just that.

"Correct" behavior depends on an objective analysis based on facts. This behavior has this effect (economic or physical), that behavior has that effect. The relevance of the effects depends on the purpose of human behavior. If you don't know what your nature as a human is, and what your purpose as a living entity is, you can't judge behavior as "correct or incorrect", let alone "right or wrong". There is no "right or wrong" except in the sense of "correct or incorrect".

Morality and rights are utterly irrelevant and until humans give up these mystical notions, the human race will continue to flounder in the mud.

• #### Monopoly is the wrong analogy (Score:3, Insightful)

on Saturday February 22, 2003 @04:40PM (#5361955) Homepage

I had long held the same opinion of the paper, that patents are fundamentally just government sanctioned monopolies. But the theory the article presented made me rethink; there is one huge and important difference between a capitalistic monopoly and these artificial monopolies. With patents it is possible to obtain a monopoly with 0% market share!

Essentially patents allow you to get a monopoly on not producing something. You can't do that in the real market-driven world where monopolies must be gained by capturing near 100% of the market. This is also one of the main differences between copyright and patent: I can't copyright something before I write it, but I sure can patent something without ever having to produce anything.

Patents used legitimately as a means to allow an inventor to safely outlay a large initial economic investment are somewhat defensible, but patents which exist soley to prevent anybody from ever acting upon some idea are just evil. And that's what seems to be happening so much today, especially in the area of software patents.

• #### The article quotes Arrow's paper... (Score:4, Insightful)

on Saturday February 22, 2003 @05:16PM (#5362093) Homepage
... where he states that risk is a major reason that a society would under-invest in research and innovative technologies. When we look at the current IP monopoly regime, the reason for decreased innovation during times of high IP protection and litigation becomes clear: The risk of using an invention that might subject the inventor to IP rights violations overwhelms the protection from monetary risk that IP rights monolopies provide.

And to quote the article: Much of Arrow's article examines economic means of dealing with uncertainty, none of them completely successful.

So it seems that the granting of monopolies for innovators is also not completely successful. So it goes...

• #### The solution seems clear to me. (Score:4, Interesting)

on Saturday February 22, 2003 @05:28PM (#5362141) Homepage
he finds it works well if he tweaks assumptions about the consumption and production of the intellectual assets, but it falters if he changes time constraints.

Everything works greate as long as there is a delay before people copy you. You just need to make sure the time contraint doesn't get too close to zero. You just need to artificially maintain the lower limit.

Patents and copyrights are an artificial time constraint. They preform a useful function. They give innovators a motivation - an opportunity to profit from innovating. The necessary "monopoly profits" can be captured very quickly. This does not require DECADES, this can be accomplished in MONTHS.

The current durations of copyright and patent protection do not encourage innovation, hey stifle it. Strong protections are fine as long as they are SHORT. Hell, even idiotic software patents and business method patents would be harmless as long as they expired rapidly. No one will bother to file for "defensive" and "frivolous" patents if they expire rapidly.

It would also be easy to immunize yourself against ALL patent and copyright attacks. You just need to prove that you first created/aquired your product a year or two before you actually started delivering it to customers. All copyrights/patents that predate your prototype have expired and your prototype is "prior art" for any that have not expired. It usually takes about that long to go from "prototype" to shipped product anyway.

-
• #### Re:The solution seems clear to me. (Score:2)

Everything works greate as long as there is a delay before people copy you. You just need to make sure the time contraint doesn't get too close to zero.

There's 2 views a person can take on this, which suggest different ways our laws should be.

• 1. In the past, technological restrictions (time to print and ship books) provided a delay factor that reduced the damage of copying. The original author had a head start to the presses, so he had a persistent advantage over copiers.

However, as technology advanced, that delay period shortened to where one man can email a book to thousands in a second. Thus, copyrights should last longer to make up for delay that technology has removed.

That argument is simple, elegant, and wrong. Nonetheless, it formed the core motivation for the dual copyright extension laws the US has passed (even if proponents never stated it explicitly, it's an undercurrent). That view is wrong because it assumes that the "total time needed to make copies" is what should be held constant in the face of changing technology.

A better interpretation:

• 2. Try to hold the "author's opportunity to profit" at a constant. Recognize that once, it tooks 18 months to edit a book, 6 months to assemble presses, and additional 6 month periods to move it into different international markets. As time passed, all those times decreased, so today's authors can collect a majority of their total revenue in a much shorter period. ("Burn bright, die young").

Thus, copyright laws beyond that reduced time to collect are unnecessary to ensure profit, and furthermore create a "no-man's land". They produce a period of time where the publisher has little incentive to print a book (no longer very profitable), but the public is still forbidden from publishing it.

I fear that many works will sink into the No Man's Land, and never emerge. (This has already happened to many of the "pulp fiction" works from 1930-1950, whose paper expired before their copyrights)

One problem I don't see addressed, though, is social stagnation in addition to economic. When a movie can be rereleased to the public 20 years after it debuted and pull in millions of dollars (E.T. anyone?), it's not because people are dying to see what happens, it's because it's become part of our culture. In this day and age, twenty years is a long time for something like that, and if the courts considered that a little more, they might realize that we as a people have a constitutional right not to pay $8.50 to relive our childhood memories. The writing has been done, the money has been made, it's time to stop milking it and put it in the public domain, where it belongs. I'm guessing that when ET was written, they were considering the immediate incentive of a theatrical release, as opposed to the incentive of re-releasing it twenty years later. • #### Very Weak Argument (Score:2) This article makes the serious error of attributing an effect (decline of software innovation in the 80's) to the advent of the software patent when in fact such a correlation does not at all indicate cause and effect. For example, the rise of Microsoft in the 80's had a tremendously profound affect on innovation in the software industry that may well be far greater than the advent of the software patent. Even worse, the article fails completely to deal with the fact that the 90's and the advent of the internet has been a period of tremendous software innovation, and the fact is that software patenting has be far greater in the 90's than it was ever in the 80's. Nor did software patenting first arise in the '80s. Software patents existed in the 70's - there is a patent on regexp's and another on the suid bit that date back to the Not only does this article fail on basic facts, it runs into a serious issue when describing the 'right of first sale' as proposed by Boldrin and Levine. Does anyone seriously believe this has any kind of chance? Who is going to pay the inventor "the net discounted value of the future revenue stream" for his work when the buyer in fact has no way of actually collecting this value because there are no restrictions on copying? Finally, as of course the slashdot introduction fails to mention, there are many severe criticisms of the underlying theories that promted this article. For example: "Klein writes that Boldrin and Levine's model works only under the "arbitrary demand assumption" that demand for copies is elastic, so that as price falls over time output increases more than proportionately and profit rises. In the case of Napster and the music industry, this "clearly conflicts with record company pricing. That is, if Boldrin and Levine were correct, why are record companies not pricing CDs as low as possible?"" "First of all, the first-sale rights Boldrin and Levine would assign to innovators "would truly be an empty promise." In their model, if a pharmaceutical firm discovers a new compound, it can sell the first pills but not restrict their downstream use. A generic drug manufacturer could then buy one pill, analyze it, and start stamping out copies." Worse yet we have this alarming argument from the theory's authors: "As for pharmaceutical research and development, Boldrin and Levine contend that their critics are misrepresenting the industry's economics. Much of the high cost of pharmaceutical R&D, Boldrin argues, is due to the inflated values placed on drug researchers' time because they are employed by monopolists. Researchers are paid far less in the more competitive European drug industry." The obvious problem with this is that we should want drug researchers to be very well paid indeed - they are the actual inventors that are developing the means to ease human suffering and improve our quality of life. The authors are fairly admitting the the current patent system is resulting in great incentivization of creativity in one of the most critical R&D endeavors there is, and that their methods would destroy that incentive. • #### Authorship without Copyright Protection (Score:4, Insightful) on Saturday February 22, 2003 @05:42PM (#5362216) The assumption is that the first copy is valued at the total of all subsequent sales. If only one copy is made and sold to a single distributor, the price would be what the distributor believes it can make selling a single run of the document. If the author is known, the size of the first run can be estimated by previous sales, pre-orders, etc. Once the document ships, the value will decrease quickly as copying takes place. Only those people who want a first generation copy will pay first generation prices. Everyone else will acquire copies as the price reaches their bid value. With people standing in line at midnight waiting for Harry Potter books, I think the model would survive. Lesser known authors would do well too since the copying of their texts will occur less frequently, the value depleting at a slower rate, and it is advantageous when copying occurs since it helps promote the author's future works. In this way, major fans pay for the initial production, but total distribution has the potential to be extensive. If the book is successful, there will be more new fans for the next book. Freeloaders will always exist, but do not directly impact the system. If the book is not published until the author's asking price is reached either the fans will pay more or the author will lower the price. This is a different model than before, although I believe that Steven King tried something similar. The result was unsatisfactory; however, I think he implemented it incorrectly. Consider for the moment that your favorite artist or author annouces his future work on his website. His asking price is$15,000 per song. The current bid price is $5000, the sum of all the (micro-)payments made by fans thus far, but in escrow. If after a month, the author decides that$5000 is the best he's going to get he can accept the bid or he can advertise the song and hope that more exposure will increase the price. This could include samples of the song, lower-quality releases of the song, or reviews. Ultimately, the song will be released to the buyers, or the escrowed payments will be returned.

Consider again that the artists need not do this themselves. They could instead sell the product to a single distributor who would in turn do the release as described above.

All this applies to GPL'd software as well, so as a model, it could be potentially interesting/profitable to programmers in the future. This would also include improvements on original GPL'd software.

The most important aspect of this model is that under these rules, I believe that more material would be produced, but in smaller portions. To maximize the return on investment, you must maximize the number of copies that can be sold in the first release. It is not sufficient to maximize the number of releases because the asking price must necessarily be reduced accordingly. I believe the number of releases will increase because it improves cash-flow and increases the author's awareness of the market conditions.

Another interesting side-effect is that storylines could be forked, just like in software. Music too, for that matter. Most fans will stick with the original, but if someone is really unhappy with it, they may deviate the story. If it's not profitable to do so, then it won't acquire a large following of its own. Japanese comics and cartoons already have this model in the form of dojinshi and fan-authored fiction.

On the world stage, plagiarism would be easily detectable, and authors who rip-off others would probably lose their fan-base as a result.

-Hope

As a followup, when people pay for the work before it is completed, they are effectively promoting the artist. The return on investment is the artist's work, not a portion of the first sale. Their contribution is a portion of the first sale which is paid to the artist.

The issue of feasibility of payments in escrow is not all that serious, although the infrastructure does not exist precisely. Escrow exists when the two parties do not entirely trust the other to deliver. If the artist spends the money without producing the work, it'll be the last album they ever produce. Gambling \$20 on the next album of your favorite artist is not such a big deal if you know that you might not get your money back, but there will be no more albums either. Escrow is simply fraud protection, and defrauding your fans is simply bad business.

-Hope
• #### Do some of these assumptions really stand up? (Score:3, Interesting)

<terr@t e r r a logic.net> on Saturday February 22, 2003 @07:11PM (#5362619)
I have not read the original paper so perhaps something was lost in the translation.... The point I want to address is the idea that without IP laws, the original creators will be paid because the "first copy" must be obtained in order to make the "second copy" and so forth and therefore the "First copy" will command a price that includes some of the profits made from subsequent copies.

Lets look at this idea.

If there is a significant amount of time and money required to make these copies or if the distribution of these copies incurs a sufficient delay and cost, then yes, I would agree the ideas would have some merit.

However, if the distribution channel is virtually perfect as in the case of P2P systems.... then no. The reason for this is that once the first copy has been sold to a consummer, and placed into the P2P system, at this point ALL consumers have it. Therefore the first consummer likely will stay out of the market hoping someone else will step forth and this will cause a significant downward pressure in the market value of the IP until it reaches the point where the price resistance becomes virtually zero.

It is very clear that if a distributor can make no money from the distribution of a good, that the goods will have no market value to him.

So IMHO the conclusions are wrong because the premise is not valid.

That being said, the problem with patent law in part is that it is used to PREVENT the inventor from using his own inventions.

This is all about power. If an individual invents something of great value and Sony for instance wants it, then they will walk all over the patents and use it anyway. On the other hand if Sony obtains an invalid patent on a perfectly obvious technique, then the small guy can be sued to death. This literally happened to Philo Farnsworth, the inventor of TV. RCA ignored his patents and litigated him into bankruptcy. He eventually died penyless... as an alcoholic. You can read a little about this abuse of the patent system and the legal system here [pbs.org]. [I used Sony as an example here but I am not accusing them of any wrongful activity.]

Current USA IP laws have matured to the point where for instance if a person places any information on the internet then that person loses the right to distribute it even though he still retains the "copy"right. This is in the DMCA. In Canada, the copyright act section#80 states that anyone can legally duplicate any recorded music without any regard to "copy"right holders. You can read about it here [cb-cda.gc.ca].

There is value in intellectual property, but this value is controlled by the distribution channel. If an artist for instance were to place her music on a webserver for all to download, I expect that all things being equal, most people would forgo the P2P system and pull it from the artists website.

The problem the artist runs into is that the profits from the distribution of content originating from webservers has been taken away from the owners of the webserver and transfered to the distribution channel. This is in section 202 (para "b" - its called "system caching") of the DMCA which you can find [loc.gov]
here

Lets look at this from an ISP's standpoint. An end user pays an ISP because there is access to "content" which for instance may include music. The ISP in turn pays the uplink for access to this "content" so we see the flow of content heading toward the end user and the flow of money heading toward the source of this content. Were it feaible, an ISP would gladly pay to have the web servers located "locally" because this would mean that they would save on upstream bandwidth. AKAMAI does this in fact. AKAMAI actually makes money by making internet content available to ISP's. However all web servers make content available to ISP's and usually they don't get paid.

This puts an artist in the position that the MOMENT she places any content on the net, she loses all opportunity to participate in the profits from the distribution, and if she attempts to charge for access to her content then she is faced with severe logistics problems and her music will be flipped into the P2P systems. .

You can find a good summary of the IP landscape [fenwick.com]
here.
• #### What is their definition of Innovation? (Score:2)

My definition of innovation is effort to find new ways of doing things, and new things to do.

Theirs seems to be spending money on reinventing or stealing things that have already been patented.

Many old computing and software patents have expired or are due to expire in the very near future. It's then that we'll be able to build beyond the old patents without having to pay royalties. But nothing was stopping us from curcumventing those patents and maybe finding better ways before. Except maybe our desire to whine about the fact that someone beat us to it.
• #### Hrmmm.... (Score:3, Insightful)

on Sunday February 23, 2003 @04:07AM (#5363938) Homepage

That's odd, I know a great many people that have great inventions that they cannot develop becasue patents and copyright aren't strong enough, so noone will fund their development.

It goes both ways, but clearly we are headed way too far in the direction that large corps can protect their work far too well, while small inventors cannot protect their work at all without a staff of 50 lawyers.

Maybe the economists should look at the lopsides enforcement of the law, not the laws.

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