Phase in online networks … phase out intellectual property

February 26th, 2007

The patent system emerged to motivate business to organise people to develop new technology. It was believed that without providing an exclusive opportunity for profit, business would not assemble the structure and people necessary to create new technology. Technology means ways of doing things. This includes information technology, biotechnology and healthcare. However, if the global objective is the creation of new technology, then there is another way to organise.

The current approach - patents

This article discusses patents. This article does not apply to copyright or trademarks.

We are each a beneficiary of all the knowledge that has come before us. Our parents, friends and the people we meet in our travels all teach us something. Our universities teach us something. Our business careers teach us something. Reading books provides us with conversations with authors. Our minds grow with knowledge from our environments. Much of that environment shares its knowledge without a profit motivation. Knowledge is universally free, except for patents.

According to Wikipedia:

A patent is a set of exclusive rights granted by a state to a patentee (the inventor or assignee) for a fixed period of time in exchange for the regulated, public disclosure of certain details of a device, method, process or composition of matter (substance) (known as an invention) which is new, inventive, and useful or industrially applicable.

The notion that knowledge can be owned is morally absurd. However, it was probably a necessity of the past. It may have been necessary to encourage innovation and to encourage organisations to assemble talented people and communication networks. In an era of online networks empowered by the internet, we no longer need the ownership of knowledge to encourage the vast majority of innovation.

An original idea is a true revelation. It is something that fundamentally advances a specific intellectual area, or changes the world. There are very few people in history that have had them. Most ideas are incremental. Our patent system assumes that original ideas are an everyday event. I believe there is one every decade. Many of these contributions were delivered for free. To permit ownership of an incremental advance in knowledge, also delivers ownership of all prior contributions. The granting of patents captures knowledge and reserves it for an exclusive period to a specific individual. Prior contributors intended their unique contribution to be free or they would have patented it themselves.

Patent systems are being restructured to redefine what is “new, inventive and useful or industrially applicable”. They are also being restructured to overcome poor implementation of legislation which allowed the ownership of knowledge which was incremental and not an original idea. Knowledge is a community resource. If we are to have a patent system, a narrow definition of “new” should be adopted and patents based on inventive, useful or industrially applicable should be discarded. Online networks and an Open source business models will be the core part of the next phase of global economic development. Regulators should establish frameworks that support future economic development, rather than hold onto systems which have become redundant. Advances in technology provide a new means to deliver innovation and advance economic development.

Phase in online networks
An online social network created the Linux operating system and tens of thousands of other pieces of software. This project is one of the most complex projects in history. Thousands of people are highly motivated to make their contribution. They must understand the significant benefits conveyed by their small and collective efforts in an information age. The development of linux is one of the largest industrial undertakings and it occurs without a profit motivation. It proves that groups can be organise for large, complex undertakings without motivation for profit. The internet is essential to allow the group to communicate and free software makes an online network accessible to all with a web browser. If the energy, commitment and talent of the Linux community could be reproduced in other online social, political and industry networks, the world could evolve to the next stage of its development.

It is important to understand one fact about Linux. Only one third of Linux is contributed by volunteers, more than two thirds is contributed by programmers working for companies. This can detract from an argument that online networks do not have a profit motive. Linux is an online network of volunteers and companies. The start of open source software was the individual. It was started by volunteers. Linux was started by Linus Torvalds. It remained a community of volunteers for many years. However, at a certain tipping point the innovation and quality engineering available from the community became a compelling proposition for companies motivated by profit. There was no need to reinvent software, the open source community had already done it. They could only use open source software, add new code or combine free software for a new purpose. However, they could only do this if they shared their changes with the community and made it available for free as required by the GPL. In short, the software could not be owned and they needed to make profit from services. The primary driver of the free and open source communities is not profit. However, the value of the collective knowledge created by the community is a compelling propoisition for companies motivated by profit. The contribution of these companies now exceeds the contribution of the volunteers. All online networks are likely to be started by volunteers and if they create something valuable, are likely to receive contributions from corporates applying new business models based on services rather than prorietary ownership of information.

To deliver innovation, an online network needs the following:

• the technology that coordinates the contribution of knowledge, identifies the quality contributions and assembles them for global use. The technology is available for free and can be implemented by one individual.
• a critical mass of knowledge: a “tipping point” needs to be achieved where use of the collective innovation becomes more compelling than developing proprietary information. ng another version of the same knowledges and, potentially, for profit companies.
• every individual should volunteer their time to their primary interest and make a contribution to an online social, industry or political network. Online networks need to attract the best minds.

It is time to question two fundamental assumptions underlying the patent system and proprietary information networks. That only companies can deliver innovation or that a profit motivation is required to encourage innovation. If no new patents were granted from tomorrow, online networks could and would be established before the current patents expire. The Linux community will deliver significant benefits to the global community. These benefits are only starting to be realised. The potential of other online networks beyond information technology should be explored. There may also be significant commercial and community benefits to be derived from innovation based on open source communities, rather than patents and proprietary information.

The Creative Commons is a new approach to copyright. It is a series of licenses that provide standard copyright and legal licenses. Its terms service individuals making a contribution to community intellectual property and knowledge sharing and online networks. The key provisions allow sharing of material. The “copyright owner” agrees to share the “work” on a non-commercial basis provided derivative works are for non-commercial purposes. Depending on which license you pick, the copy right owner may also want acknowledgement from others.

Online networks and collective innovation based on this approach would usher in the next stage of economic development.

Phasing out … intellectual property
The United States has a significant interest in maintaining the status quo. It dominates key industries that rely on intellectual property. More than 80% of global software sales are for US companies. The movie and music industries are centred in the United States. The US needs these industries to earn revenue to finance its economy. Advances in technology provide new opportunities to structure for global benefit. The replacement of many industries by online networks is inevitable and the benefits are clear. However, intellectual property is not being phased out, it is being extended beyond US borders.
The United States is seeking to extend US laws of intellectual property to other countries. I have extracted a few comments from the Electronic Frontier Foundation web site that provides an additional insight.

The World Intellectual Property Organization (WIPO) is the UN agency responsible for treaties involving copyright, patent, and trademark laws. WIPO can be a force for progressive change, helping the world take into account public interest and development needs. But all too often, governments are using international treaties negotiated through WIPO as well as other bilateral trade agreements to ratchet up IP rights at the behest of copyright holders. EFF defends your rights at WIPO, acting as a watchdog at its proceedings and advising member countries. Here’s a look at some current issues we’re focusing on:

Importing and exporting bad law
Most recently, WIPO has begun considering a treaty that would give broadcasters, cablecasters, and potentially webcasters, broad new 50-year rights to control transmissions over the Internet, irrespective of the copyright status of the transmitted material. It also requires countries to provide legal protection for broadcaster technological protection measures that will require Broadcast Flag-like technology mandates, undermining innovation, competition, and legitimate uses. … [more]

Towards better IP policy
Though WIPO has historically worked to create treaties that expand IP rights no matter the consequences to its developing country members, that has started to change. For instance, Brazil and Argentina, leading a group of 15 countries, have asked WIPO to adopt a “Development Agenda,” under which new treaties and all of WIPO’s work must consider the impact on international development. For the first time, WIPO member states are now discussing the importance of a rich public domain and the dangers of overbroad DRM laws. EFF is part of an international NGO coalition working at WIPO to ensure that intellectual property laws protect human rights like access to knowledge and access to medicine, even as some developed countries try to obstruct the Development Agenda at every turn. [more]

FTAA & Bilateral FTA Resources
The U.S. government is employing a new strategy to effect the global entrenchment of overly restrictive copyright law: incorporating DMCA-like copyright provisions in its free trade agreements. Having failed to persuade nations worldwide to adopt U.S.-style copyright regulations via the WIPO Copyright and WIPO Performances and Phonograms Treaties, the government has included anti-circumvention obligations in its bilateral Free Trade Agreements (FTAs) with Jordan (Article 4(13)), Singapore (Article 16.4(7)), Chile (Article 17.7(5)), Morocco (Article 15.5(8)), Australia (Article 17.4(7)), CAFTA (Article 15.5(7)), Bahrain (Article 14.4(7)) and Oman (Article 15.4(7)). It now seeks to include similar provisions in its current multilateral free trade negotiations with 33 countries in the Americas. [more]

The United States is in a precarious position. It dominates key industries that rely upon intellectual property. It needs the export revenue to finance its economy. Other countries can see the opportunity for new ways to deliver significant economic benefits. The battle to maintain the system of intellectual property or adopt new structures is being played out before us. The potential of collective innovation and open source to reshape our world needs to be demonstrated . We can see the benefit. We will have the resolve to resist the intellectual property laws of one country, and adopt the spirit of creative commons laws for the benefit of the global community.

Entry Filed under: Online networks vs. industries, Free software and Open source, Economic development, Community knowledge vs. Intellectual property