Part 20 (1/2)

The invention needs to be novel and have utility, or usefulness; I cannot get a patent over something that would have been an obvious idea to an insider in the relevant field of technology, a ”person having ordinary skill in the art,” or PHOSITA, in the jargon of patent lawyers. But once I get my patent, it gives me a very strong power to exclude others from the invention--even if they came up with it independently. The right lasts for twenty years. Follow-on innovators who improve on my idea can get a patent on that improvement. They can block me from using the improvement. I can block them from using the original invention.

Thus we have an incentive to negotiate if either of us wants to bring the improved innovation to market.

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So where did software fit? Was it copyrightable writing or patentable invention? There are two issues here. The first is whether there should be any intellectual property rights over software at all. The basic case for that proposition is simple, a cla.s.sic example of the public goods problem described in the first chapter. Software costs money to create, but is cheap to copy. When a youthful Bill Gates wrote his 1976 letter to the wonderfully named Dr. Dobb's Journal of Computer Calisthenics & Orthodontia, he put the point clearly.

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Who can afford to do professional work for nothing? What hobbyist can put 3-man years into programming, finding all the bugs, doc.u.menting his product and distribute it for free? The fact is, no one besides us has invested a lot of money into hobby software. We have written 6800 BASIC, and are writing 8080 APL and 6800 APL, but there is very little incentive to make this software available to hobbyists. Most directly, the thing you do is theft.4 14

He signed the letter ”Bill Gates, General Partner, Micro-Soft.”

The hyphen would disappear in time. The philosophy stuck around.

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Though there are quibbles about the facts in Gates's letter--critics claim he himself did a lot of free riding on public domain code and government-funded computer time--his basic point is that software needs to be protected by (enforceable) property rights if we expect it to be effectively and sustainably produced. Some software developers disagree. But a.s.suming one concedes the point for the sake of argument, there is a second question: should software be covered by copyright or patent, or some unidentified third option?

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In practice, software ended up being covered by both schemes, partly because of actions by Congress, which included several references to software in the Copyright Act, and partly as a result of decisions by the Copyright Office, the Patent and Trademark Office, and judges. One could copyright one's code and also gain a patent over the ”non.o.bvious,” novel, and useful innovations inside the software.

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At first, it was the use of copyright that stirred the most concern. As I explained in the last chapter, copyright seems to be built around an a.s.sumption of diverging innovation--the fountain or explosion of expressive activity. Different people in different situations who sit down to write a sonnet or a love story, it is presumed, will produce very different creations rather than being drawn to a single result. Thus strong rights over the resulting work are not supposed to inhibit future progress. I can find my own muse, my own path to immortality.

Creative expression is presumed to be largely independent of the work of prior authors. Raw material is not needed. ”Copyright is about sustaining the conditions of creativity that enable an individual to craft out of thin air an Appalachian Spring, a Sun Also Rises, a Citizen Kane.”5 18

There are lots of reasons to doubt that this vision of ”creation out of nothing” works very well even in the arts, the traditional domain of copyright law. The story of Ray Charles's ”I Got a Woman” bears ample witness to those doubts. But whatever its merits or defects in the realm of the arts, the vision seems completely wrongheaded when it comes to software.

Software solutions to practical problems do converge, and programmers definitely draw upon prior lines of code. Worse still, as I pointed out earlier, software tends to exhibit ”network effects.” Unlike my choice of novel, my choice of word processing program is very strongly influenced, perhaps dominated, by the question of what program other people have chosen to buy. That means that even if a programmer could find a completely different way to write a word processing program, he has to be able to make it read the dominant program's files, and mimic its features, if he is to attract any customers at all.

That hardly sounds like completely divergent creation.

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Seeing that software failed to fit the Procrustean bed of copyright, many scholars presumed the process of forcing it into place would be catastrophic. They believed that, lacking patent's high standards, copyright's monopolies would proliferate widely. Copyright's treatment of follow-on or ”derivative” works would impede innovation, it was thought. The force of network effects would allow the copyright holder of whatever software became ”the standard” to extract huge monopoly rents and prevent competing innovation for many years longer than the patent term. Users of programs would be locked in, unable to s.h.i.+ft their doc.u.ments, data, or acquired skills to a competing program. Doom and gloom abounded among copyright scholars, including many who shared Mr. Gates's basic premise--that software should be covered by property rights. They simply believed that these were the wrong property rights to use.

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Copyright did indeed cause problems for software developers, though it is hard to judge whether those problems outweighed the economic benefits of encouraging software innovation, production, and distribution. But the negative effects of copyright were minimized by a remarkably prescient set of actions by courts and, to a much lesser extent, Congress, so that the worst scenarios did not come to pa.s.s. Courts interpreted the copyright over software very narrowly, so that it covered little beyond literal infringement. (Remember Jefferson's point about the importance of being careful about the scope of a right.) They developed a complicated test to work out whether one program infringed the details of another. The details give law students headaches every year, but the effects were simple. If your software was similar to mine merely because it was performing the same function, or because I had picked the most efficient way to perform some task, or even because there was market demand for doing it that way, then none of those similarities counted for the purposes of infringement. Nor did material that was taken from the public domain. The result was that while someone who made literal copies of Windows Vista was clearly infringing copyright, the person who made a competing program generally would not be.

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In addition, courts interpreted the fair use doctrine to cover ”decompilation”--which is basically taking apart someone else's program so that you can understand it and compete with it. As part of the process, the decompiler had to make a copy of the program. If the law were read literally, decompilation would hardly seem to be a fair use. The decompiler makes a whole copy, for a commercial purpose, of a copyrighted work, precisely in order to cause harm to its market by offering a subst.i.tute good.

But the courts took a broader view. The copy was a necessary part of the process of producing a competing product, rather than a piratical attempt to sell a copy of the same product.

This limitation on copyright provided by fair use was needed in order to foster the innovation that copyright is supposed to encourage. This is a nice variation of the Sony Axiom from Chapter 4.

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These rulings and others like them meant that software was protected by copyright, as Mr. Gates wanted, but that the copyright did not give its owner the right to prevent functional imitation and compet.i.tion. Is that enough? Clearly the network effects are real. Most of us use Windows and most of us use Microsoft Word, and one very big reason is because everyone else does. Optimists believe the lure of capturing this huge market will keep potential compet.i.tors hungry and monopolists scared.

The lumbering dominant players will not become complacent about innovation or try to grab every morsel of monopoly rent, goes the argument. They still have to fear their raptor-like compet.i.tors lurking in the shadows. Perhaps. Or perhaps it also takes the consistent threat of ant.i.trust enforcement. In any event, whether or not we hit the optimal point in protecting software with intellectual property rights, those rights certainly did not destroy the industry. It appeared that, even with convergent creativity and network effects, software could be crammed into the Procrustean bed of copyright without killing it off in the process. Indeed, to some, it seemed to fare very well. They would claim that the easy legal protection provided by copyright gave a nascent industry just enough protection to encourage the investment of time, talent, and dollars, while not prohibiting the next generation of companies from building on the innovations of the past.

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In addition, the interaction between copyright and software has produced some surprising results. There is a strong argument that it is the fact that software is copyrightable that has enabled the ”commons-based creativity” of free and open source software. What does commons-based creativity mean? Basically, it is creativity that builds on an open resource available to all.

An additional component of some definitions is that the results of the creativity must be fed back into the commons for all to use. Think of English. You can use English without license or fee, and you can innovate by producing new words, slang, or phrases without clearance from some Academie Anglaise. After you coin your term, it is in turn available to me to build upon or to use in my own sentences, novels, or jokes. And so the cycle continues. As the last chapter showed, for the entire history of musical creativity until the last forty years or so, the same had been true of at least a low level of musical borrowing. At the basic level of musical phrases, themes, s.n.a.t.c.hes of melody, even chord structures, music was commons-based creativity.

Property rights did not reach down into the atomic structure of music. They stayed at a higher level--prohibiting reproduction of complete works or copying of substantial and important chunks.

So in some areas of both music and language, we had commons- based creativity because there were no property rights over the relevant level. The software commons is different.

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The creators of free and open source software were able to use the fact that software is copyrighted, and that the right attaches automatically upon creation and fixation, to set up new, distributed methods of innovation. For example, free and open source software under the General Public License--such as Linux--is a ”commons” to which all are granted access. Anyone may use the software without any restrictions. They are guaranteed access to the human-readable ”source code,” rather than just the inscrutable ”machine code,” so that they can understand, tinker, and modify. Modifications can be distributed so long as the new creation is licensed under the open terms of the original. This creates a virtuous cycle: each addition builds on the commons and is returned to it. The copyright over the software was the ”hook” that allowed software engineers to create a license that gave free access and the right to modify and required future programmers to keep offering those freedoms. Without the copyright, those features of the license would not have been enforceable. For example, someone could have modified the open program and released it without the source code--denying future users the right to understand and modify easily. To use an a.n.a.logy beloved of free software enthusiasts, the hood of the car would be welded shut. Home repair, tinkering, customization, and redesign become practically impossible.

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