Copyrights and Innovation - III

There is a tension between public interest and private interest as far as copyrights are concerned. When creative works are widely, commonly and freely available, the cultural space of a society expands. It leaves behind a richer legacy for future generations. Existing creators often use the work of previous generations. For example a book like Pride and Prejudice and Zombies takes and extends the original work in an entirely new way. Such a book would simply not be possible if the original was still strongly protected by copyrights. The fantasy elements in the Harry Potter series were first articulated and defined in earlier works. This series takes those elements and mixes them in entirely new ways. As a result we have a new set of books that has not only delighted old and young alike but also resulted in spin offs like movies, fan fiction, parodies etc. Our cultural space has been expanded and enriched and the stage has been set for possible future creations.

Copyrights however act as a toll gate in this process. They do not allow the free mixing of ideas that results in important new works. Instead they force one vision onto society. Interesting combinations are not allowed to occur. Furthermore, only approved creators are allowed through the toll gate and only after the payment of proper entry fee. Again the cultural expansion that occurs from the free mixing of ideas is stymied.

As mentioned previously, copyright issues also affect economic development. However they do more than that. They also affect scientific development. In order to be taken seriously, research papers need to be published in a peer reviewed journal. While this process raises its own set of issues, my concern here is with the resultant effects of copyrights. Scientific journals are the academic equivalent of gatekeepers in the commercial world. By locking up knowledge of new developments, they actually hamper advances in science. Unless they can pay the fees demanded, other scientists - specially in the developing world - are unable to access the new knowledge. Science, more than any other field, builds on previous work. Every single scientist today, every single Nobel laureate has built upon and extended the work of previous generations. When today's developments are locked up tightly under copyrights, we actually slow down the scientific advances that will enhance and enrich our living standards tomorrow. Who knows if an article in a journal leads to an idea that ends up in a cure for cancer or that results in a viable form of space travel. If the bright spark is not allowed access, such important developments can get delayed maybe indefinitely.

In recent times, copyrights have been extended onto new creative forms. This first started off with movies and songs. Thus Disney was able to get copyright protection for Mickey Mouse, a character that created a new cultural reference. Interestingly, Mickey debuted in a film called Steamboat Willie which was a parody of another film called Steamboat Willie Jr. Thus we see that the earlier film created the cultural space for the introduction of an iconic new character. Later this protection got extended to the new medium of television and later still this was extended to computer software.

The emergence of personal computers, associated software and networking has vastly boosted the importance of copyrights. Before computers, copying a work was a tedious, difficult and costly procedure. Afterwards, it became simple and virtually cost free. The business models that had worked well in a pre personal computer age failed spectacularly post personal computers. Another development of the computer age has been that algorithms - the set of instructions that a computer can follow without human intervention - have become very important and copyrightable. So now, we have companies fighting over copyright issues that may seem arcane but which affect all of us now and will do so in the future. The decisions made today will affect how the culture of the future will develop. Unfortunately, these decisions are being made by entities whose primary interest is in locking down as much knowledge as they can for as long as they can. They do this because the immediate rewards are so great even though in the long run all of us will be impoverished.

Are copyrights needed? Yes and no. Individual creators need some form of protection for a period of time in order to possibly benefit from their creations. They may choose to give it away for free as some record labels do in order to create awareness but that should be their choice. The critical element is that of time. How long should individual creators be allowed to benefit from their creations. Here there is no single solution. What if the individual has a single hit in his or her lifetime? Should copyright protection expire early? In such a case, I think it should not. What about creators who have multiple hits? In their case, copyright protection can be dropped at an earlier stage. Ongoing works like blogs would certainly need to be protected for the life of the creator (or atleast a reasonable estimate of the same). Indeed after a specified period of inactivity, ongoing works can be released into the public domain.

In the case of corporations, copyright protection has to be limited. Companies are not reliant on any single hit. They have a steady ongoing stream of revenue. After having benefited for a period of time, why should they be allowed to enjoy what will essentially be rental income. Forcing earlier works into the public domain will not only allow other people to take the original into new directions, it will also force the company to innovate aggressively. In the end, our society and our culture will be better off.

Related articles

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• What Everyone Should Know about Copyright Laws: Internet Tips & Guides (brighthub.com)
• Copyrights--Can the Right Come to its Senses? (chariotofreaction.blogspot.com)
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Copyrights and Innovation - II

Copyrights create monopolies. Only one party is allowed to dictate how the copyrighted item is to be used. In a digital environment, copyrights serve as a powerful tool for extracting rental revenue, for control and for maintaining existing business models. Copyrights were not so important in an earlier age when copying things was difficult and expensive. Now computers and digital devices allow for an infinite number of perfect reproductions at a minimal cost. This threatens existing business models in several industries specially the creative ones. As a result, the importance of copyrights has suddenly exploded as companies and many artists use this as a mechanism to protect themselves from a massively unsettling change.

Earlier I argued that copyrights do not enhance innovation. The argument that they do so is based on a misunderstanding of the reasons why people innovate. The other argument passed in favor of copyrights and their strong enforcement is based on the right of the innovator to benefit from his/her innovation. This is a stronger albeit still flawed argument. Copyright law came into existence at a time when individuals were the main source of innovations. The argument that they should benefit from their work had validity then. To make that argument today is to ignore the nature of the copyrights that are now being granted. The majority of copyrighted material today is possessed by corporations. Most of the most iconic symbols of our age are under the copyright and this protection is being enjoyed largely by companies and not by individuals.

Companies are supposed to grow by bringing innovating new products and services. Instead what is happening today? By copyrighting material and preventing others from using it, companies are able to enjoy extraordinary profits which is a violation of economic efficiency which is a foundation of the capitalist system. A more insidious effect is that we have ceded the evolution of our culture to entities whose sole raison d'etre is to make money for a privileged group of individuals (their investors). Take Mickey Mouse as an example. This is an iconic symbol of our childhood - indeed of children around the world. Yet there is only one way in which Mickey Mouse can be presented to the world and that is the Disney way. Alternate expressions using the Mouse are prevented because of copyrights. The result is that our culture is impoverished. What we bequeath to our children and grandchildren will be a vision that has been dictated by a company for purely commercial considerations.

Copyrights also hamper economic development. This is an something that is often not appreciated. Look at the history of development of developed countries. Each and every one of them ignored copyright issues when they were developing. The reason is that ideas are extremely important at all stages of development. Developing countries need access to the latest ideas and techniques in various industries in order to implement them properly and thus grow their economies. The problem is that copyrights raise the cost of ideas and developing countries usually lack resources. For example, access to the latest scientific, management and trade journals is very expensive. If there is strong enforcement of copyrights, then most countries would not be able to access these ideas and as a result will steadily fall behind other countries in developing and growing their economies. It should be kept in mind that this is not just a problem for developing countries. Poor people will move around in search of economic opportunities as they always have. There will be (and has been) an upsurge in economic migrations driven by lack of domestic opportunities which in turn is caused by harsh copyright laws.

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Copyrights and Innovation

Copyrights evolved as an incentive program. Give people a temporary monopoly in the form of a copyright and they will have an incentive to innovate. This begs the question what motivates innovation? The basic premise behind copyright is that innovation springs from commercial considerations. Somebody will innovate only if he or she can see some sort of eventual payoff. However, innovation comes from need and not from purely commercial considerations. Even in the absence of copyrights, innovation will still take place because the need to do so will be there. In the entire debate on copyright law and copyright issues, this point is usually overlooked.

So the question is does the presence of copyrights enhance innovation, has no effect on it or dilute it? And how does innovation happen in the first place? There is a lot of confusion on this latter point. The general impression is that innovations spring full blown springing seemingly out of nowhere. This is not and never has been the case. All innovations are additive in the sense that they rely and build on previous work. The ability to do so freely is a critical factor in spurring innovation. Where a monopoly is granted that prevents such additive work, innovation comes to a screeching halt.

Do copyrights enhance innovation. The short answer is no, they do not. The reason for this is the nature of protection that copyrights give. Granting a copyright to a product or a service or a process or whatever means giving a monopoly to a private party. All monopolists behave in the same fashion: they become rent seekers. The desire and ability of a monopolist to innovate declines in proportion to the length of the monopoly. This is true in all cases of a monopoly including market based ones. To illustrate this point consider the browser wars of the 1990s between Netscape and Microsoft. During the tussle itself, there was great innovation in browsers. When the latter won out, there was a resultant market based monopoly. The end result was that all innovation in browsers came to a halt. This situation remained until Firefox came along and eventually broke Microsoft's monopoly. In the case of a government granted monopoly (in the form of a copyright), there is no such happy ending as long as the monopoly remains. The copyright holder has very strong incentives to extract maximum revenue by charging high prices and at the same time has no incentive to improve upon the product (except perhaps incrementally) whatsoever - a classic case of rent seeking. Copyrights at best freeze the innovation process and at worst dilute it.

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Copyright Issues

Copyrights, patents, trademarks have become contentious issues in a modern, increasingly digitized world. Copyright first became an issue with the invention of the movable type printing press. Previously, it was a non-issue because of the slow speed of manually copying a book and the lack of literacy amongst the general population. The printing press changed the equation by drastically reducing the cost of and time taken to copy a book. It also resulted in a gradual increase in literacy as people started seeing the advantages of being able to read. A good history of copyright can be found at the Copyright History website and also at Wikipedia.

Copyrights were originally seen as an incentive for creative artists. The idea was that they would have a limited time in which they could exploit their created work for commercial gain after which the work would be available in the public domain for anyone to do with it as they please. Copyrights and patents thus served a dual purpose. They were an incentive for creative people to be creative and to create new works and products. The second purpose was that once the work went out of copyright or patent protection into the public domain, the nation's cultural heritage would be enriched and succeeding generations would have a richer, more diverse heritage to build upon. Many of the cultural icons in most societies, specially Western ones, are as such because the original work either went out of copyright or the copyright holder did not strictly enforce his rights. Not just the local culture, but also the global culture is thus richer as a result.

The situation today is different. The value of enforcing copyrights and patents has increased dramatically. Not only that, but copyrights are increasingly being held by organizations and not by individuals. What is good for the organization is not necessarily good for the culture as a whole. What makes the matter worse is that copyright (and patent) enforcement frequently results in increased charges to the end consumer. When payments are tried to be collected globally, the product usually goes out of the reach of most consumers in developing countries who do not have the financial power of consumers in the developed countries. Sometimes, these attempts at rent collection results in consumers being left physically worse than before.

I'll give an example here. The example is the patents held by Western pharmaceutical companies on existing AIDS medication. While these medicines do not cure the disease, they do enable AIDS sufferers to lead relatively long, productive lives. These medicines are also priced at a level that Western consumers can (barely) pay. As a result, nearly the entire developing world cannot afford to buy them. Even governments in developing countries cannot afford to these medications due to their high cost. Millions of people are thus left to suffer a significantly lower quality of life. When developing world governments in desperation turned towards generic medicines, the Western pharmaceutical companies tried to prevent them from doing so backed by the full might of their national government (specifically the US). It was only a global and specially Western public backlash that forced these companies to back down. Their counter-offer was to reduce the price of these drugs by 90%. Unfortunately, the price was still significantly higher than the price being offered by generic manufacturers. What galls people in the developing world is that when the developed nations have what they perceive as a crisis, they suspend the rules for themselves that they impose on less powerful nations. When the US was faced with the possibility of the Swine Flu spreading dramatically, they threatened to break the patent of the manufacturer of the only drug, Tamiflu, that was effective against this disease. Previously, when a developing country had threatened to break the AIDS patent, the US government had weighed in on the issue in support of the patent holder. The life of a person in the developing world is not worth the same as the life of a person in the developed world. This is seen as rank hypocrisy in the rest of the world. One rule for the developed nations and another for the rest of the world.

Today the original intention of copyrights and patents has been hijacked. This has been done due to their increasingly lucrative nature. Since organizations hold most copyrights and patents, they have an incentive to have the time under protection extended to the maximum possible extent. That is why in the US, the period of copyright protection has increased over time till now it is over 100 years. The question is why should any organization or person be allowed to enjoy this protection for so long.

A case for extended copyright protection can be made for individuals - specially in cases where one work or a small number of works account for the bulk of an individual's creative output. If a songwriter has a single hit in his/her lifetime, then there is a strong case that he/she should enjoy copyright protection for the duration of his/her life. However, should this protection be enjoyed by the children? Why? Ofcourse a case for this also can be made. After all, children do inherit property and enjoy the benefits thereof even though they may have done nothing personally to obtain the property. But then the question in this case becomes should copyrights and patents be treated in the same fashion as say land is? If yes, then no creative work will come into the public domain and cultural heritage will be significantly poorer as a result. So a strong argument can be made that copyrights should be limited in time to the life of an individual.

What about organizations? Unlike a person, the potential lifespan of an organization is unlimited. Should a copyright or patent held by an organization then be under protection for the lifespan of the organization? Effectively this is what organizations are aiming for when they push for extensions of copyright and patent protection. In some cases, the costs to society are viewed as being so great that this effort is resisted. Thus patent protection for medicines is allowed to expire after a set period of time because this is seen as a net benefit to society as a whole. In other cases, the issue is not so clear cut. Take the case of the operating system OS/2 which is owned by IBM. The company has stopped selling this software and seemingly has no plans to re-introduce it. This is seen by their efforts to move existing customers of OS/2 to other operating system. In such a case, should IBM be forced to move OS/2 into the public domain? If OS/2 is moved into the public domain (and in this case moving into the public domain means putting the source code into the public domain), then either other people will start tinkering with it or they will ignore it. However, this will be a choice exercised by society. In the current scenario, this choice cannot be exercised because IBM refuses to allow other people to tinker with OS/2 thereby behaving rather like the proverbial dog in the manger. If other people are allowed to tinker with it, then who knows, they may produce something superior to current offerings. This did happen in the browser market. After Netscape collapsed, some enthusiasts got together and started developing Firefox based on Netscape. In the process, they re-ignited developments in the browser market which had stagnated as a result of the virtual monopoly exercised by Internet Explorer.

On the whole, I feel that there is a strong societal benefit having strictly temporary copyright and patent protections. The term should be long enough to give the original owner reasonable time to enjoy the benefits of his/her creation. Afterwords, the work should be moved into the public domain. The term of protection shoudl vary with the industry. To give examples, pharmaceutical companies need a relatively long time frame because of a long testing phase and an almost equally long regulatory process. Creative works like books, songs, articles etc. should enjoy protection for the lifetime of the original creator but no longer. The benefit to society outweighs the benefits that would accrue to the children. For software, protection should be afforded for a fairly limited period like say 10 years or as long as the product is commercially available whichever is shorter. Generally, a piece of software is no longer commercially available within 5 years of its introduction. Even if the software is made available, its undergoes frequent revisions and later versions bear next to no resemblance to the original version. The point is that a reasonable balance needs to be struck between private interests and societal interests.