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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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Page 1: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

Copyright,1999-2002

1

Internet-Induced Constraints on Freedoms:

The Implications for Innovation

Roger Clarke, Xamax Consultancy, CanberraVisiting 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

Page 2: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

Copyright,1999-2002

2

Internet-Induced Constraints on Freedoms:

The Implications for Innovation

Agenda• The Digital Era• Its Impacts

• Freedom of Access to Information• The New Dark Ages

• The Process of Innovation• Constraints on Innovation

• Access to Information• Copyright• Patent

Page 3: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

Copyright,1999-2002

3

Information Objects ‘Then’ (early 1990s)

• Tangible things (books, journal issues, photos, vinyl LPs, audio-tapes, microfilm, video-tapes, cassettes, diskettes, CD-ROMs, games-cartridges)

• A person bought, rented, borrowed or visited a tangible thing, or gained admission to a location where it was reproduced, performed or played

• The person had no need for a copyright licence• Replication was expensive, required infrastructure• Copies were accessible by one person at a time

Page 4: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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4

Information Objects in the Digital Era

• convenient and inexpensive Creationdesktop publishing packages, PC-based graphic design tools, animation, digital music generators

• Conversion of existing materialsscanners, OCR, digital cameras, digital audio-recording

• near-costless Replicationdisk-to-disk copying, screen-grabbers, CD-burners as a consumer appliance

Page 5: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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Information Objects in the Digital Era

• very rapid Transmission, unmeasurably low costsmodem-to-modem transmission, CD-ROMs in the mail, emailed attachments, FTP-download, web-download

• inexpensive and widespread AccessPCs, PDAs, mobile phones, public kiosks, web-enabled TV in the workplace, the home, public kiosks, Internet cafes

• computer-based Analysis of datadata-matching, profiling, data-mining, pattern-recognition software

• convenient Manipulation of data-objectsword-processors, sound and image processing tools

Page 6: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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6

Defining Aphorisms

of Cyberspac

e

The New Yorker

5 July 1993

Page 7: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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Defining Aphorisms of Cyberspace

• On the net, nobody knows you're a dog• There's no 'there' there• The Net treats censorship as damage and

routes around it• National borders are just roadbumps on

the information superhighway• National borders are not even roadbumps

on the information superhighway• The street finds its own uses for things

Page 8: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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Defining Aphorisms of Cyberspace

‘Information Wants To Be Free’

‘Information Wants To Be Free To Go Anywhere’

“Information wants to be freebecause it has become so cheap

to distribute, copy, and recombine”

“Information wants to be expensivebecause it can be immeasurably valuable to the recipient”

“That tension will not go away”

Page 9: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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Cyberculture Ethos• Inter-Personal Communications• Internationalism• Egalitarianness• Openness• Participation• Mutual Service• Community• Freedoms• Gratis Services

Page 10: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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Cyberculture Economics

• 'barn-raising' - Rheingoldas distinct from 'horse-trading'

• a 'cooking pot' - Ghosh"keeps boiling because people keep putting in things as they themselves, and others, take things out"

• a ‘honey-pot’ - Clarkea culture of appropriationplagiarism as good not evil

A culture of mutuality needsan economics of indirect and/or deferred exchange

Page 11: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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Alternative Economicsof Scarcity and of Abundance

• Conventional, Neo-Classical Economics• The basis of value is Relative Scarcity• More Supply = More Competition = Lower Prices

OR• Information Economics, Economics of Networks• The basis of value is Critical Mass• The more there are, the greater the value of each

Iron Ore cf. Fax MachinesVinyl carrying Analogue Music cf. Digital Music

Page 12: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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The Open Source Movement

• Shareware (1983-)• Free Software Foundation

(1985-)• CopyLeft• Gnu Public Licence (GPL)• Open Source Institute (1998-)

• Unix• BSD Unix• Gnu• Linux• SSLeay• OpenPGP• Mozilla• Apache• Open Office• Mailman

Page 13: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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The Open Content Movement• Xanadu ‘Transclusion’ (1965)

• quote w/- copying, & with µpayments• Ted Nelson’s ‘Transcopyright’ (1997)

• have a statutory right to re-publish by pointing, and pay (cents) for it

• Open Content• Project Gutenberg• Open Directory Project - http://dmoz.org• opencontent.org• Public Licences

Page 14: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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Peer-to-Peer (P2P)e-Sharing / e-Trading

• MP3

• Napster

• Gnutella, KaZaA, et al.

• CD-quality digital soundin files sized 1 MB/minute

• a central catalogue of a distributed database, to facilitate sharing of MP3 files

• a distributed catalogue of a distributed database, to facilitate sharing of (MP3?) files

Page 15: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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The Digital RevolutionImpacts on Publishing

• Increased Appropriation• Reduction in Payment Morality

• Disintermediation• Collapse of Publishing

• New Business Models• Re-Intermediation

Page 16: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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Disruptions in e-Publishing

• Publisher-to-Consumer Sale and Distribution(dis-intermediation of wholesalers and retailers)

• Originator-to-Consumer Sale and Distribution(dis-intermediation of publishers as well)

• Consumer-to-Consumer Sale and Distribution(reduction in revenue flow to originators)

Page 17: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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Encyclopædia Britannica

• in 1991, EB sold 400,000 printed copies @ $1,500 each

• in 1993, CD-ROM competitors emergedesp. MS Encarta (Funk & Wagnall’s)

• in 1997, EB sold 10,000 printed copies• since late 1997, EB has tried:

• mailed optical disks @ $200, then $100• a web-site supported by advertising• a subscription-based web-site, with different

terms for the B2C and B2B markets

Page 18: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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Alternative E-Publishing Business Models

(‘Who pays what to whom, and why?)

• revenue from the content-accessor / 'user-pays': • subscription fee for access for a period of time • fee for access ('pay-per-view')• shareware

• revenue from a third party: • advertisers• sponsors

• revenue from the copyright owner: • fee for publication ('vanity press')• fee for storage or access

• revenue from a complementary activity

Page 19: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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Information Protectionism• censorship, esp. extreme pornography,

incitement to violence, instruction in violence, neo-Nazi organisation, holocaust denial, racial vilification, sedition, activism

• library intrusions, esp. compulsory filtering, access to borrowing records

• reduction in FoI, esp. post-12 September• defamation, reputation-friendly and hostile to

freedom of access to information, dramatically more threatening since the Internet

Page 20: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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Defamation on the Web• Mining magnate / football club owner / religio-cultural-

philanthropy identity• Footprints in Melbourne, NY, Tel Aviv• Article prepared in Manhattan NY, published in Barron’s

Digest (Dow Jones / WSJ), and made available on a web-server in NJ

• Defamation suit in Victoria

• Where did publication occur? Everywhere?!• Don’t criticise Mahathir or Goh Chok Tong, because their

reach has been extended ...

Page 21: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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Invention

The conception of a new idea

Expression of a new idea in a prototype apparatus

Innovation

The application of knowledge to the manufacture and deployment a new kind

of artefact

The articulation of an invention

The adoption of a new product or process

Page 22: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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‘Tacit Knowledge’informal and intangible

exists only in the mind of a particular person‘knowing that’ cf. ‘knowing how to’not readily communicated to others

‘Codified Knowledge’expressed and recorded, in a more or less formal language

(text, formulae, blueprints, procedure descriptions)disembodied from individuals

communicable information

Page 23: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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Codified KnowledgeAn omelette recipe

A combination of structured and unstructured text

Tacit KnowledgeThe expertise to interpret the recipe,

to apply known techniques and tools to the activity,to recognise omissions and exceptions,to deliver a superb omelette every time,

to sense which variants will work and which won't,and to deliver with style

Page 24: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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Technology• A combination of:

• codified knowledge about artefacts, artefact manufacture, and artefact usage

• tacit knowledge of many individuals• business processes within multiple organisations,

into which are integrated codified and tacit knowledge

• artefacts designed, manufactured and used by means of that codified and tacit knowledge

• educational materials relating to artefacts, artefact design, production, use, maintenance

Page 25: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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Info Flows Within the Innovative Organisation

ArticulationTacitKnowledge

CodifiedKnowledgere Artefact

and Process

ArtefactCodifiedKnowledgere Artefact and Its Use

Manufacturingand

DocumentationProcesses

The Innovative OrganisationArtefactsCodifiedKnowledgere Artefacts

and Their Use

‘PriorArt’

Page 26: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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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

Page 27: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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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

Page 28: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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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

Page 29: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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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

Page 30: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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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

Page 31: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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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

Page 32: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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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)

Page 33: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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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

Page 34: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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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

Page 35: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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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

Page 36: 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 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

Page 37: 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 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

Page 38: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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Embedment in Marketspace MechanismsElectronic Copyright Management Systems

(ECMS)Digital Rights Management Languages (DRML)

• Proprietary (Xerox et al.)• Industry-Standard

• Owner-Oriented• Corporate-Consumer-Oriented

• Balanced Standards (ODRL)• Originator• Owner• Corporate Consumer• Individual Consumer

Page 39: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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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

Page 40: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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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

Page 41: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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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

Page 42: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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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

Page 43: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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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

US Patent 6,387,227 issued 9 April 2002

Page 44: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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Web-Linking – British Telecom, 4,873,662 of 1989

• Vannevar Bush, Atlantic Monthly, 1945• Ted Nelson’s Xanadu, 1960-65• Engelbart, 1968 – “innovations demonstrated that

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

Page 45: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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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

Page 46: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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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.

Page 47: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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The Uses of Patents• Revenue

• Licensing Fees• Extortion (Settlement << Legal Costs)

• 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

Page 48: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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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”

Page 49: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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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

Page 50: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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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

Page 51: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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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

Page 54: Copyright, 1999-2002 1 Internet-Induced Constraints on Freedoms: The Implications for Innovation Roger Clarke, Xamax Consultancy, Canberra Visiting Fellow,

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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

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References – CyberCulturehttp://www.anu.edu.au/people/Roger.Clarke/...

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

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References Identification, Anonymity,

Pseudonymityhttp://www.anu.edu.au/people/Roger.Clarke/...

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

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References – Biometricshttp://www.anu.edu.au/people/Roger.Clarke/...

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

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References – Innovation http://www.anu.edu.au/people/Roger.Clarke/...

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

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References – Copyrighthttp://www.anu.edu.au/people/Roger.Clarke/...

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

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References – Patents http://www.anu.edu.au/people/Roger.Clarke/...

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

Greenleaf G.W. (1999) '"IP, phone home" - ECMS, ©-tech, and protecting privacy against surveillance by digital works' Proc. 21st Int'l Conf. Privacy and Personal Date Protection, 13-15 September 1999, Hong Kong SAR, China. at http://www2.austlii.edu.au/~graham/publications/ip_privacy/

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References – 3 of 4

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