Copyright, 1999-2002 1 Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow, Dept of Computer Science, ANU http://www.anu.edu.au/people/Roger.Clarke /... .../II/NOIE020709.ppt National Office for the Information Economy Canberra, 9 July 2002
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Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,
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Copyright,1999-2002
1
Internet-Induced Constraints on Freedoms:
The Implications for Innovation
Roger Clarke, Xamax Consultancy, CanberraVisiting Fellow, Dept of Computer Science, ANU
The Innovative OrganisationArtefactsCodifiedKnowledgere Artefacts
and Their Use
‘PriorArt’
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Info Flows Within the Innovative Sector
TheInnovative
Organisation
CompetitorsSuppliersAdoptingOrganisationsArtefact and
CodifiedKnowledgere Artefact and Its Use
CodifiedKnowledge
re Component
Componentand FeedbackFeedbackPlus Consultants, Educational Institutions, Labour Mobility
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Big-Bang Innovationcf. Cumulative Innovation
• Genuine ‘breakthroughs’ do occur• But most Innovation is progressive:
• Dependent on Interaction with others, and often on Contributions of others, including Users, Suppliers and Competitors
• Process Innovation is often needed, in order to support Product Innovation
• Step-wise Refinement results in Incremental Emergence or Conversion
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Alternative Economics of Innovation
Conventional Economics• Information is an Output• Info is highly appropriable• Imitators contribute little,
and are ‘free riders’
• There are few natural protections for innovators
• Innovators need a monopoly• Imitators must be punished
Information Economics• Information is also an Input• In many circumstances, not so• Many imitators add value, and
hence contribute to cumulative innovation
• There are many natural protections for innovators
• Monopoly hinders innovation• Mere imitators must be
punished, but investigation, enhancement and extension must be encouraged
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Who Does Digital Media Threaten?
• To those who do well under the old regime:• very few originators (authors, musicians)• mainly the major publishing houses
(of books, journals, music, films)• Control Mechanisms wielded by publishers:
• re I.P., ownership of vast catalogues of it• re originators, through terms of contract,
and promotional budgets• re infringers, through nastygrams, lawsuits
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Manoeuvres by the Major Publishing Houses
• Technological Protections for Digital Objects• Expansion of Copyright Scope, de facto• Embedment in Marketspace Mechanisms
of Existing, Expanded and Imagined Rights• Lobbying for, and Enactment of, Laws:
• Expansion of Copyright Scope, de juré• Criminalisation of hitherto civil law breaches• Enlistment of Law Enforcement Agencies• Transfer of Enforcement Costs to the public
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Technological Protections for I.P. Objects
Passive Technologies – 1 of 2• object-protection, at various stages:
• under the owner's control• in transit• under the licensee’s control
• by means of:• encryption• device-specific encoding / crippling
e.g. DVDs are region-specific, and film-publishers have state-enabled means of controlling sales of media and media-players
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Technological Protections for I.P. Objects
Passive Technologies – 2 of 2
• means of tracing rogue copies:• 'watermarking' technology
(to uniquely identify the publication)• 'fingerprinting' technology
(to uniquely identify the particular copy)
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Technological Protections for I.P. Objects
Active Technologies – 1 of 2• notification to the licensee of their rights
at the time that the object is accessed• licensee:
• identification• identity authentication
• disablement / destruction of the data object:• in the event of licence expiry or breach• if played on a ‘non-approved’ device
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Technological Protections for I.P. Objects
Active Technologies – 2 of 2• enforcement mechanisms, client-side
• prevention, e.g. preclude actions that breach permissions for rendering
• recording of:• actions that exercise permissions• (attempts to) breach the licence, e.g. making copies
beyond the permitted limit• reporting of (attempts to) breach the licence
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Technological Protections for I.P. Objects
Information Infrastructure
• siphoning off of Internet bandwidth for VPNs• enhanced server controls over clients• enhanced identification of:
• devices • individuals
• a new protocol suite, controlled bygovernments and large corporations
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Copyright Expansion
• Accidental Need for a Consumer to Have a Licence
• Shift From Copyright to Contract
• Threats to Fair Use, e.g. for research and study• Threats to Statutory Licensing • Threats to Equitable Public Access • Threats to Anonymous and Pseudonymous
Access
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Copyright ExpansionismWhat Major Publishing Houses Are
Seeking
• Existing Exclusive Rights of a Copyright-Owner:• to reproduce/copy, to re-publish, to adapt
• The Broader Rights being sought include:• control of use through rendering, incl.
display, print, play, ‘read’/render as speech• control of transport, incl. transfer, lend• control of derivative rights, incl. extract,
embed• control of ‘time-shifting’ and even backup
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Embedment in Marketspace MechanismsElectronic Copyright Management Systems
Civil Liberties Abusesin the Service of Publishing
Houses• criminalisation of many mainstream activities (DMCA)• lawyers’ ‘nastygrams’ threatening prosecution (Felten)• gaoling for lengthy periods, without bail, with delayed
charges, and with charges withdrawn once the chilling effect has been achieved (Skylarov, Johansen)
• additional proposals (in an Aust Parltry report!!):• reversal of the onus of proof• increased civil seizure powers• withdrawal of self-incrimination privileges
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Patent Issues
• von Clausewitz Revisited:I.P. as a Weapon of National Strategy
• Patentability of ‘Business Methods’• Greatly Lowered Threshhold of
Novelty• Collaborative Standards undermined
by Patent-Based, Proprietary Monopolies
• Anti-Innovation Uses of Patents
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Patent Law as a Weaponof U.S. National Strategy
• US Government Policy since Carter• Dictated by the interests of very large
corporations that acquire and use patents as part of their business model
• US Government Pressure through WIPO• Craven Weakness of some Governments• Naiveté of yet more Governments, which
have failed to recognise and participate in the game of international strategy
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U.S. Software Patents, andBusiness Methods Patents
with Some Blind Followers
• Explosion from c. 1990• USPTO’s extraordinarily liberal
approvals, following a change in US Government policy designed to advantage US corporations
• 2000 filings in the US in 1999, of which 1350 re Internet, and 500 re e-commerce
• 1500 filings in Australia in 2001
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Instances of Ridiculous Patents
• Multimedia (Compton)• One-Click Shopping (Amazon)• Affiliate Program Linking (Amazon)• Reverse Auction (Priceline)• Display of Text and Images (Pangea)• Automated Credit-Checking (Pangea)• Consumer Payment for Clicking (CyberGold) • Method of Swinging on a Swing
day [included] hypertext, object addressing and dynamic file linking”http://sloan.stanford.edu/MouseSite/1968Demo.html
• But there are even more patents!!http://www.cptech.org/ip/business/hyperlink.html
• IBM – 6,195,707• Lockheed Martin – 6,154,752• IBM – 5,924,104
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Method of Swinging on a SwingUS Patent 6,387,227 issued 9
April 2002Steven Olsen, St Paul MN
55104“The method comprises the steps of:(a) positioning a user on the seat; and(b) having the user pull alternately on one
chain to induce movement of the user and the swing toward one side, and then on the other chain to induce movement of the user and the swing toward the other side, to create side-to-side motion”.
http://news.com.com/2100-1023-885552.html
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Miniature Patents
• ‘Petty Patent’ • Australian 'Innovation Patent’
• nominally: to lower costs for SMEs• in practice: to make SMEs a more
attractive takeover target, by offering the purchaser cheap I.P.
• Window of Opportunity for Super-Profits• Too-High Licence Fees• Prolonged Negotiations on Terms• Denial of Licences• Threats of Litigation
• Defence of Litigation through Threat of Counter-Suit Based on Own Patents
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The Views of the NASDAQ-listed Australian company Catuity Inc.
• When sued, $1 million needed, just to play• Utter uncertainty about the ratio decidendi• 3/3 legal opinions negated by the court • The judge imputed counter-intuitive, non-
standard meanings to ‘receipt’ and coupon’• Eventually the parties called it quits
anyway• “Patents are a worthless must-have”
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Origins of the Problem• Aggressive U.S. Strategy, Naive Multilateral Adoption• Patent Examination
• “a coarse sieve, not a fine filter”• Reflects Prior Art Base, but not Domain Expertise
• Patent Contesting Process• Abject Failure
• Patent Cases before the Courts• Very low threshholds of originality, inventiveness• Absence of technical expertise, assistance or advice• Plenty of excuses to ignore expert evidence
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The (Information) Economics Assessment
• Progress depends on Cumulative InnovationPeople stand on the shoulders of ....
... lots of busy elves• Evolution is rapid, and 16-20 years is
eternity• Many breakthroughs involve low investment
• In the eBusiness Context, Barriers to Innovation?• The Absence of Patent Protection is seldom• The Presence of Patent Protection is
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Conclusion: TheNew Dark Ages
The Internet promised information accessibility, but may lead to a decrease in information accessibility:
• by citizens, which undermines democracy• by originators, which undermines creativity• by consumers, which undermines consumer choice, but
also denies cumulative creativity• by knowledge workers within corporations, which
undermines innovation
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References Generally http://www.anu.edu.au/people/Roger.Clarke/...
Electronic Commerce: EC/index.htmlEC/AnnBibl.html
Information Infrastructure: II/index.htmlII/AnnBibl.html
Dataveillance: DV/index.htmlDV/AnnBibl.html
Waltzing Matilda: WM/index.html
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References – The Internethttp://www.anu.edu.au/people/Roger.Clarke/...
Clarke R. (1994) 'Information Infrastructure for The Networked Nation' November 1994, at .../II/NetNation.html (100 pp.)
Clarke R. (1998) ‘The Internet as a Postal Service: A Fairy Story’, February 1998 at, .../II/InternetPS.html
Clarke R., Dempsey G., Ooi C.N. & O'Connor R.F. (1998) ‘A Primer on Internet Technology', February 1998, at .../II/IPrimer.html
Clarke R. (1998-2001) 'A Brief History of the Internet in Australia', at .../II/OzIHist.html
Clarke R. (1998) 'Information Privacy On the Internet: Cyberspace Invades Personal Space' Telecomms J Aust (May/Jun 1998), at .../DV/IPrivacy.html
Clarke R. (1995) ‘Netethiquette: Mini Case Studies of Dysfunctional Human Behaviour on the Net’, April 1995, at .../II/Netethiquettecases.html
Clarke R. (1997) , ‘The Neighbourhood’, March 1997, at .../II/Neighbourhood.html
Clarke R. (1997) 'Encouraging Cyberculture', Proc. CAUSE in Australasia '97, Melbourne, March 1997, at .../II/EncoCyberCulture.html
Clarke R. (1997) 'Public Interests on the Electronic Frontier', Proc. IT Security '97, August 1997, at .../II/IIRSecy97.html
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References – The Internet and Ethics
http://www.anu.edu.au/people/Roger.Clarke/...
Clarke R. (1988) 'Economic, Legal and Social Implications of Information Technology' MIS Qtly 12,4 (December 1988) 517-9 , at .../DV/ELSIC.html
Clarke R. (1993) 'Asimov's Laws of Robotics: Implications for Information Technology' IEEE Computer 26,12 (December 1993) pp.53-61 and 27,1 (January 1994), pp.57-66, at .../SOS/Asimov.html
Clarke R. (1999) ‘Ethics and the Internet: The Cyberspace Behaviour of People, Communities and Organisations' Bus. & Prof'l Ethics J. 18, 3&4 (1999) 153-167, at .../II/IEthics99.html
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References – FoI / The New Dark Ages
1 of 2 http://www.anu.edu.au/people/Roger.Clarke/...
Clarke R. (1994) 'The Information Age As Threat' National Scholarly Communications Forum, Canberra, 13 Oct 1994, at .../II/PaperNSCF.html
Clarke R. (1999) 'Internet Issues', at .../II/Issues99.html
Clarke R. (1999) ‘Information Wants to be Free’, August 1999, at .../II/IWtbF.html
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References – FoI / The New Dark Ages
2 of 2 http://www.anu.edu.au/people/Roger.Clarke/...
Clarke R. (1999) ‘Freedom of Information? The Internet as Harbinger of the New Dark Ages’, First Monday 4, 11 (November 1999), at .../II/DarkAges.html
Clarke R. (2001) 'Paradise Gained, Paradise Re-lost: How the Internet is being Changed from a Means of Liberation to a Tool of Authoritarianism', Mots Pluriel, .../II/PGPR01.html
Clarke R. (2001) ‘Defamation on the Web’ March 2001, at .../II/DefWeb01.html
Clarke R. (2002) ‘Defamation on the Web: Gutnick v. Dow Jones’ June 2002, at .../II/Gutnick.html
Clarke R. (1994) 'Human Identification in Information Systems: Management Challenges and Public Policy Issues' Info. Technology & People 7,4 (December 1994), at .../DV/HumanID.html
Clarke R. (1999) 'Anonymous, Pseudonymous and Identified Transactions: The Spectrum of Choice', Proc. IFIP User Identification & Privacy Protection Conference, Stockholm, June 1999, at .../DV/UIPP99.html
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References – Dataveillance and Privacy
http://www.anu.edu.au/people/Roger.Clarke/...
‘Information Technology and Dataveillance’, Commun. ACM 31,5 (May 1988) 498-512, at .../DV/CACM88.html
'Information Privacy On the Internet: Cyberspace Invades Personal Space' Telecommunication Journal of Australia 48, 2 (May/June 1998), at .../DV/IPrivacy.html
‘Privacy and Dataveillance, and Organisational Strategy‘, Proc. EDPAC'96, May 1996, at .../DV/PStrat.html
‘Privacy Impact Assessments‘, February 1998, at .../DV/PIA.html‘Internet Privacy Concerns Confirm the Case for Intervention‘,
Commun. ACM 42, 2 (February 1999) 60-67, at .../DV/CACM99.html
Clarke R. (1994) 'Human Identification in Information Systems: Management Challenges and Public Policy Issues' Information Technology & People 7, 4 (December 1994), at .../DV/HumanID.html
Clarke R. (1999, 2001) 'Person-Location and Person-Tracking: Technologies, Risks and Policy Implications' Information Technology & People 14, 2 (Summer 2001) 206-231 , at .../DV/PLT.html
Clarke R. (2002) 'Biometrics Inadequacies & Threats& Privacy-Protective Architecture', at .../DV/NotesCFP02.html#BiomRC and BiomHKU.ppt
Dempsey G.C. (1998) ‘Knowledge and Innovation in Intellectual Property: The Case of Computer Program Copyright' PhD Thesis, Aust. Nat'l Uni., 1998, in particular Chapter 4 (pp.55-83)
Dempsey G.C. (1999) ‘Revisiting Intellectual Property Policy: Information Economics for the Information Age’ Prometheus 17, 1 (March 1999) 33-40, at .../II/DempseyProm.html
Clarke R, (2002) ‘eBusiness and eInnovation’ PowerPoint slide-set for European Patents Office, June 2002, athttp://www.xamax.com.au/EC/EPO/eInnovation.ppt
Clarke R. & Dempsey G. (1999) 'Electronic Trading in Copyright Objects and Its Implications for Universities', at .../EC/ETCU.html
Clarke R. & Nees S. (1999) 'Technological Protections for Digital Copyright Objects', at .../II/TPDCO.html
Clarke R., Higgs P.L. & Dempsey G. (2000) 'Key Design Issues in Marketspaces for Intellectual Property Rights', at .../EC/Bled2K.html
Clarke R, (2000) ‘File-Discovery and File-Sharing Technologies (aka Peer-to-Peer or P2P): MP3, Napster and Friends’, at .../EC/FDST.html
Clarke R, (2002) ‘eBusiness and Copyright’ PowerPoint slide-set for European Patents Office, June 2002, athttp://www.xamax.com.au/EC/EPO/eCopyright.ppt
Dempsey G.C. (1998) ‘Knowledge and Innovation in Intellectual Property: The Case of Computer Program Copyright' PhD Thesis, Aust. Nat'l Uni., 1998, in particular Chapter 4 (pp.55-83)
Dempsey G.C. (1999) ‘Revisiting Intellectual Property Policy: Information Economics for the Information Age’ Prometheus 17, 1 (March 1999) 33-40, at .../II/DempseyProm.html
Clarke R, (2002) ‘eBusiness and Patents’ PowerPoint slide-set for European Patents Office, June 2002, athttp://www.xamax.com.au/EC/EPO/Patent.ppt
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References – 1 of 4
Barlow J.P. (1994) 'The Economy of Ideas: A Framework for patents and copyrights in the Digital Age', Wired 2.03 (March 1994), at http://www.wired.com/wired/archive/2.03/economy.ideas_pr.html
Barlow J.P. (2000) 'The Next Economy Of Ideas: Will copyright survive the Napster bomb? Nope, but creativity will' Wired 8.10 (October 2000), at http://www.wired.com/wired/archive/8.10/download_pr.html
Benner J. (2002) 'Public money, private code' Salon Jan. 4, 2002, at http://salon.com/tech/feature/2002/01/04/university_open_source/print.html
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References – 2 of 4
Dyson E. (1995) 'Intellectual Value' Wired 3.07 (July 1995), at http://www.wired.com/wired/archive/3.07/dyson_pr.html
Greenleaf G.W. (1998) 'An Endnote on Regulating Cyberspace: Architecture vs Law?' UN.S.W. L. J. 21, 2 (November 1998), at http://www.austlii.edu.au/au/other/unswlj/thematic/1998/vol21no2/greenleaf.html
Kelly K. (1997) 'New Rules for the New Economy' Wired 5.09 (September 1997), at http://www.wired.com/wired/archive/5.09/newrules_pr.html
Lessig L. (1999) 'Code and Other Laws of Cyberspace' Basic Books, 1999
Lessig L. (2001) 'The Internet Under Siege' Foreign Policy (Nov-Dec 2001), at http://www.foreignpolicy.com/issue_novdec_2001/lessig.html
Lessig L. (2001) 'The Future of Ideas: The Fate of the Commons in a Connected World' Random House, 2001
Negroponte N. (1995) 'Being Digital' Hodder & Stoughton
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References – 4 of 4
Samuelson P. (1996) 'The Copyright Grab' Wired 4.01 (January 1996), at http://www.wired.com/wired/archive/4.01/white.paper_pr.html
Samuelson P. (1999) 'Intellectual Property And The Digital Economy: Why The Anti-Circumvention Regulations Need To Be Revised' 14 Berkeley Tech. L. J. 519 (1999), at http://www.sims.berkeley.edu/~pam/papers/Samuelson_IP_dig_eco_htm.htm
Shapiro C. & Varian H.R. (1999) 'Information Rules: A Strategic Guide to the Network Economy' Harvard Business School Press, 1999