White House: What's Blocking Innovation in America? My Answer: IP Laws

http://www.groklaw.net/article.php?story=2011021108493059

by wiks • 15 years ago

259 176 15 years ago

tptacek9• 15 years ago

Yes, this is true, if you want the President of the United States to advocate for a Total War in the legislature --- one, by the way, which he will lose --- solely for the sake of clearing the way for entertainment content startups.

marshray19• 15 years ago

I think current IP laws are killing innovation and it has nothing to do with "entertainment content".

It used to be that I could sit down at a computer and innovate-up a useful program and no one could say I couldn't. Maybe even try to make a business out of it. Now it's all-but impossible to do that without incurring this large and unknown risk of litigation from holders of patents of wildly varying degrees of novelty.

The system is broken. It needs to be thrown out.

I doubt Obama is the one to do it, he seems to have his head in the status quo as much as any lawyer.

jeromec9• 15 years ago

It used to be that I could sit down at a computer and innovate-up a useful program and no one could say I couldn't. Maybe even try to make a business out of it.

Well hold on now. Don't be too quick to lump things in together. You can still sit down at a computer, innovate a program and make money from it. I do agree that serious help is needed in reforming software patents (as evidenced by Amazon's famous 1-click checkout patent), but IP law is what ensures someone can't hack into your files, steal your proprietary "innovative" programming and re-sell copies of it as their own to the customers you were planning to.

Incidentally, that's why I side with the Sony and the law as referenced in this article. You get to say how your own code is or isn't used. If Sony wants the PS3 opensourced they can go that route, but it's not up to anyone else to take it upon themselves to make that decision for them. If programmers don't like Sony's verdict they can build their own player games. That's how a capitalist free market works.

tptacek9• 15 years ago

You're commenting on NEWS.YCOMBINATOR.COM. Perhaps someone here knows how many YC companies --- there are lots of them now --- have been litigated against by patent holders.

steveklabnik5• 15 years ago

IP is more about entertainment startups. It's a battle over our right to preserve our own culture.

With that said, he'll never go for this and neither would the legislature, so... not getting my hopes up.

Alex39174• 15 years ago

"solely for the sake of clearing the way for entertainment content startups."

Do you consider Google Books, JSTOR, Wikipedia, etc. to be entertainment content startups?

bugsy10• 15 years ago

Your mention of Wikipedia is a red herring since the idea there is the content is user generated and donated by the creator with a CC license. Things that are found to have been copy-pasted are removed.

JSTOR sells content so that's also a red herring.

Google Books is relevant. Their business model is based on not only stealing, but selling without permission content they don't own. This is criminal and unethical.

edit: downvoters please state your case. Is it that you agree that corporations should be able to steal content from those of us who actually create things, as Google is doing with Google Books?

nostrademons5• 15 years ago

I think this is a symptom of a larger problem with American governance, namely that lobbyists for entrenched interests have too much power and the general population (innovators included) has too little.

I'd rather attack the root cause with a constitutional amendment that states "All legislators must live full-time in their home districts", and have them conduct official government business through email and videoconference. That makes lobbying impractical: a company that wanted to lobby Congress would need to station lobbyists in all 435 congressional districts, and the lobbyists would have no more pull than an ordinary citizen that the representative happened to be friends with. The reason big companies have the sort of clout that they do in American politics is that there are economies of scale to political power, and once you have scale, you can buy more of it.

MoreMoschops2• 15 years ago

It's crippling innovation before people even begin. I was chatting about encryption with some young chap, and I suggested a good way for him to learn about the practicalities of it would be to just sit down and code. He was astonished; he genuinely thought that the principles behind common encryption tools were in some way exclusive property of various companies and that he was legally forbidden from coding up his own implementation.

This is a true story and it's a belief that is on the streets right now; some people believe even mathematics is legally owned by someone and they can't use it. If people won't experiment, they can't innovate.

Note that the countries that don't give a damn about so-called IP happily copy everything they can get their hands on. It will not take them long to start innovating on top of what already exists.

Vivtek4• 15 years ago

I'd be willing to bet that this attitude in young people is greatly influenced by the constant hammering of media produced for young people on the point that IP violation is a crime that will get you put in prison.

Disney makes a lot of the entertainment for young people in America. They harp a lot on piracy being a crime that gets you arrested immediately, regardless of the truth - I don't watch a lot of Disney, but I can think of two instances right off the top of my head, one being an episode of iCarly, and the other being Minute Men, a made-for-TV movie my kids and I watched last night on Netflix.

marshray19• 15 years ago

Yeah it's pretty sick, isn't it?

Still they're not convincing anyone and are just making themselves look sleazy in the process. They ought to remember that in just a few years these kids are going to be: A. downloading stuff, B. very cynical about authority, and C. spending lots of money.

Nick and Disney are increasingly uncool in our house. Youtube and anime are taking up all the screen time these days.

bugsy10• 15 years ago

The answer is not quite correct. Corporate protectionism is what destroys innovation. Abuse of the patent and copyright systems is part of corporate protectionism.

Patent and copyright are great things to protect the little innovator guy that starts a new business from being sodomized by the big corporations that lobby congress for laws that benefit only themselves.

Reform is necessary. Right now, companies are patenting things that were invented by other people. Right now, little people with patents are getting their IP stolen from big corporations with lawyers who file legal action solely for the purpose of bankrupting the little guy and taking his property.

These things are not a problem with the concept of protecting innovations through IP law. They are a problem with corporate abuse of the system and a corrupt government.

zipdog2• 15 years ago

Except that software patents don't even function for the little guy, because even if it was only 'little guys' using software patents, it would cost too much to check your code against every other existing patent

bugsy10• 15 years ago

Well the system doesn't work at all for the little guy. I was talking patent/copyright in general. As far as software patents, my own opinion is software is obviously copyrightable but not patentable. However, that is not the current viewpoint legally, and this serves the interests of big entities not small ones.

I support IP rights. But the current system is seriously broken. Let's say I invent something totally new and innovative (which I have done many times). And I choose not to patent it. So my competitor reverse engineers my product and then patents it and sues me. What now? I can tell you because this is exact thing has happened to me. I get sued and the court case will take 5 years and require calling costly expert witnesses and the jury won't understand a word of the testimony and will flip a coin in the end. Regardless of what their decision is, I am bankrupt and the big company only spent 0.01% of revenue, and in return they got to buy what IP assets I had in bankruptcy court. Wow, that is messed up.

So let's rewind. Not getting a patent was a big mistake clearly. So let's say I got a patent. Or not just say, since I have done this one too. Now the next company says "we want to license it". I agree to this and they then hire me to create an implementation of the licensed patent which will work with their product. Then, after this is done and working and they have sold it to clients at a huge profit, they fire me and tell me I have to transfer ownership of the patent to them if I want my job back. When I refuse they start creating legal problems for me that costs tens of thousands of dollars to deal with and take me out of the employment pool for a year, and after all that their company goes bankrupt, their IP is sold to a bigger company in bankruptcy court, and then THAT company (Fortune 100) re-patents the things I have already patented and serves me with a cease and desist.

So if I get a patent or don't get a patent, me, the guy inventing awesome new things that benefit humanity, is damned either way because of corporate abuse of the system.

The only answer is to stop innovating or to become a corporate parasite that steals things.

The problem in all this is not with the concept of patents or copyright but that the way it works in practice is to enable the powerful to squash small innovators who are actually doing useful stuff.

marshray19• 15 years ago

Patent and copyright are great things to protect the little innovator guy that starts a new business

I think you read that in a book somewhere. I bet you don't personally know a single "little innovator guy" who has successfully been protected by a patent.

pyre2• 15 years ago

True enough. If someone violates the patent, the Feds don't come in and bust them. The 'little guy' then has to take the violator to court and win before they can get any kind of justice. If it isn't a slam dunk (even with a patent), then the 'little guy' probably can't justify the risk of losing and ending up with the lawyer/court fees.

rick888• 15 years ago

"I bet you don't personally know a single "little innovator guy" who has successfully been protected by a patent."

I know plenty. My last boss being one of them. His product was copied by a competitor (the entire design) and sold under a different name.

It got so bad that people were calling up think we were this company and it hurt sales overall. He sued them in court, won, and actually got the entire company as a settlement (in addition to around $500,000.

His product was simple enough to copy and without legal protections, a much larger company would could easily steal his entire market share.

zipdog2• 15 years ago

One of the foundations of America's success in the earlier years (up to the beginning of the 20th C) was its general disregard for IP laws. British manufactures were constantly complaining about American's using their designs, manuscripts, etc without payment, as well as state to state infringement (Hollywood started in CA to get away for legal oversight).

The article is spot on: legal protection is protection from innovation.

MoreMoschops2• 15 years ago

Bingo. Cory Doctorow's take on it is informative, even if you don't agree with his conclusions, as he covers a lot of this; it heavily features our old friends, the music publishers (who became a viable business themselves, back in the day, only by taking the music that already existed and selling it on without permission).

Well worth reading, and comes under a creative commons licence.

http://craphound.com/content/download/

Natsu4• 15 years ago

Hollywood itself exists because of piracy. Movie makers went out there to escape the enforcement of Thomas Edison's patents.

wybo2• 15 years ago

Another example is Philips, the Dutch electronics company. Which basically was built on the fact that the Netherlands did not have a patent-system at that time.

travisp4• 15 years ago

There was not necessarily disregard of intellectual property at least when Americans were the owners. Many things like the creation of the commercial sewing machine in the mid 1800s were strongly encouraged by patent and intellectual property protection, despite the fact that patent thickets arose -- i.e. many competing individuals held patents covering individual components necessary to a good sewing machine. How these issues were resolved actually has great relevance for so-called modern issues of "patent trolls," since they existed back then too.

Source: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1354849

nostrademons5• 15 years ago

Think earlier, around the turn of the 1800s. The power loom and the steam engine were both British technologies protected by patent in Britain, but their patents weren't recognized or enforceable in America. And so we got the American mills at Lowell, Mississippi river and Great Lakes steamers, and the transcontinental railroad.

The steamboat is probably a good example of this effect at work. In Britain, Boulton and Watt's patent allowed them to block development of high-pressure steam engines, because Watt thought they were dangerous. In the US, his patent didn't apply, and so Fitch and Fulton were allowed to experiment freely with increasing the boiler pressure, and eventually managed to produce a design capable of powering boats. That opened up a whole new area of commerce.

billmcneale6• 15 years ago

> One of the foundations of America's success in the earlier years (up to the beginning of the 20th C) was its general disregard for IP laws.

Uh, you should really read up on America's early economic development. Its success has very little to do with IP laws.

And to counter your claim: look at China, which has no IP laws. How much software innovation do you see coming from there?

Yup, zero.

nostrademons5• 15 years ago

China is actually a very good example, you're just looking at the wrong industry.

Both America and China industrialized by misappropriating trade secrets from the reigning technical powers of the time (Britain and America, respectively) and then bringing that knowledge home where it could be employed by workers who were willing to work for less. The birthplace of the American industrial revolution are the textile mills at Waltham and later Lowell, MA. Francis Cabot Lowell spent 2 years memorizing how British power mills worked, and then came back to America with all that knowledge in his head. He then copied the design of that mill on the banks of the Charles River, and American industry was born.

China's manufacturing similarly depends upon transfer of knowledge from developed to developing nations, though in this case the transfer is largely voluntary, with American firms setting up factories in China. However, people then leave those factories and set up their own firms, using the trade secrets they gained while working at foreign multinationals. Software is the wrong industry to look at - think in terms of textiles or cars.

danenania3• 15 years ago

Their economy is growing much faster than America's though, and there are a few other factors, like, oh I don't know, an authoritarian state and walled off internet that might just be slowing down software innovation independent of the IP situation.

nhamann• 15 years ago

Please correct me if I'm misreading you here, but it appears that your "counter" is incorrect. The GP claims that (IP laws implies lack of innovation). You present a single example of (No IP laws & no innovation). However, the GP did not claim that a lack of IP laws is sufficient for innovation, only that it is necessary.

jellicle• 15 years ago

> How much software innovation do you see coming from there? > > Yup, zero.

http://en.wikipedia.org/wiki/Software_industry_in_China

"China's software industry grew at a compound annual growth rate of more than 39% over the period from 2001 to 2007 to reach RMB 506 billion and is further anticipated to grow at a CAGR of nearly 22% through 2012."

tbrownaw8• 15 years ago

look at China, which has no IP laws. How much software innovation do you see coming from there?

Yup, zero.

The IP laws here mean they wouldn't be able to sell me anything that resulted from their lack of IP laws, and the language barrier means I wouldn't likely see anything they weren't trying to sell me. So why would my not seeing anything have any meaning?

Kilimanjaro3• 15 years ago

Somebody invented the knife you use to eat, the pants you're wearing, the mattress you sleep on, and you are not paying a dime in royalties. You are standing on the shoulders of giants and you pretend those who come after you to pay you for your invention, even if many unlucky people invented the same thing but were just seconds late to the patent office? I have a word for you, damn parasite, fuck you.

marshray19• 15 years ago

seconds late to the patent office

More often than not, the other independent inventors didn't feel the idea was worth patenting, didn't have the money to spend building a meaningful patent portfolio, or didn't want to feel like human scum.

patrickaljord• 15 years ago

"Let's take Android. It's something new and the world is loving it. So what happened once it became a hit? Patent and copyright infringement lawsuits up the kazoo. Is that going to encourage innovation? And it's not just Android. It's any successful technical product. They all have to spend millions in litigation. And it's a drain on the economy too, because when the plaintiffs win, that money isn't a win for innovation, not when the law allows patents to be owned and litigated by entities that make nothing at all but litigation.

See what I mean? When the law overprotects, it kills innovation. That's what protection means. It means protection from innovation. Let's call a spade a spade."

Amen.

ZeroGravitas7• 15 years ago

Apparently the most sued company for patents is Apple, which seems to back up this thesis.

billmcneale6• 15 years ago

First, you'd have to show that innovation is being blocked in America, considering that most software innovations come from there.

While in need of some tuning, IP laws seem to be working as advertised: you can't release a product that copies 90% of another product, you actually have to innovate.

Look at Android: they had to navigate around dozens of Apple patents and they still did fine and they have come up with an impressive set of innovations.

When plagiarizing is outlawed, you have no choice but innovate.

jerf2• 15 years ago

"First, you'd have to show that innovation is being blocked in America, considering that most software innovations come from there."

I disagree. The relevant question is whether the benefit to society is greater or lesser than it could be from other laws. If someone is sued for a few million dollars from a patent troll who does nothing else for society with that patent, net loss. When something is brought to market that wouldn't have been without protection, net gain.

Patent laws at least in the software arena are very plausibly a net loss. The best thing about this metric is that you don't have to sit there and argue about whether "software innovation" is being blocked, which is something that will just involve people defining "blocked" in whatever way it takes to win their point. (Boring!) It's about net loss or gain.

jamesaguilar• 15 years ago

Personally I think what you quoted is thoroughly self-contradictory.

> Let's take Android

An innovation that occurred in America.

> So what happened once it became a hit? Patent and copyright infringement lawsuits up the kazoo.

Which have not been resolved, and even when they are will not cause Android to cease to exist.

> And it's a drain on the economy too, because when the plaintiffs win, that money isn't a win for innovation

The antecedent does not prove the consequent. "Losses" (smaller profits) for innovation are not inherently a drain on the economy.

> That's what protection means. It means protection from innovation.

It means protection from copying. And I don't see any evidence that the US is failing to innovate technologically.

dpatru• 15 years ago

IP disputes are drain on innovation in the sense of opportunity cost. When Google spends money on lawyers, it can't spend that money on engineers. Also, patent attorneys are smart people who, instead of being employed to create new technology, are employed to argue about existing technology.

>> I don't see any evidence that the US is failing to innovate . . . We're discussing how innovation can happen more efficiently.

ChuckMcM2• 15 years ago

So I have been known to make the claim that the next great re-flowering of tech will begin in 2015 and grow solidly through 2020. I base that claim on the observation that patent silliness really ramped up in 1995 and grew exponentially to 2000, those patents expire between 2015 and 2020. And while technology overwhelmed the ability of patent examiners to credibly evaluate its novelty or newness, that doesn't matter once the patent is now public domain.

marshray19• 15 years ago

You're saying that American tech innovation will blossom when we finally become free to use our ideas from 20 years ago? That infringement lawsuits (and the expense of defending against them) will begin to decrease in 2015?

Keep in mind that China can turn out a new model of cell phone in a few weeks at this point.

ChuckMcM2• 15 years ago

I'm saying that tech got ahead of the patent office in the 90's, and that combined with a zeal to 'own the road' as a business model had companies patenting anything and everything. That of course then spawned a huge patent trolling industry which has had a significant chilling effect on companies.

A very real consequence of this was "datasheets." Prior to the great patent rush semiconductor companies published datasheets which described their chips in great detail. This allowed engineers to write software to use the chip and build systems with them. By the late 90's the "datasheet" for the interesting chips in a system (sound chips, video processor, GPU, etc) had devolved into a description of electrical signals, pinouts, thermal data, and just enough information to verify the chip was functioning. Detailed information about programming was only available under NDA and sometimes only with a binding purchase agreement in place.

Being particularly frustrated by this when writing a driver for a video chip, I used every ounce of influence I had to talk to the guy at the company where the chip was made who "owned" that decision (which is to say he could have said, 'let anyone have the data sheet' and it would have happened). His response was that they didn't release the data sheet because while they didn't believe they violated anyone's patent in their designs, it was impossible to prove that they didn't (you can't prove a negative and all that) and so they took the expedient route of restricting the number of people who "knew" how their chip did what it did to reduce the attack surface for patent trolls. This has been, apparently, the standard operating procedure for over a decade now.

The combination of the 20 year window (which means even if someone patented something its expired by now) and an improvement in the ability of patent examiners to deal with "tech" (we've now got examiners who were in high school in 1995 so they understand at a much better level novelty when it comes to tech). Means tech companies can engage with individuals with less risk, and that using techniques "everyone knows" or uses is much less likely to come bite you back.

No idea how big a damper it will turn out to have been, but I'm watching for the signs ...

fleitz• 15 years ago

Lawyers and Bureaucrats. Pretty much every single branch of gov't save for the DOD and DOJ stifle innovation (DOJ in the grand scheme of things stifles innovation by enforcing the laws for other branches). Start by letting parents send their children to a school of their choice. Continue by making it easy for those children (when they reach adulthood) to start businesses, and continue by making the burdens of running that business as few as possible. It might be a little burdensome to file a tax return for the company you buy a computer from. (Medicare tax code changes)

Continue by allowing the free flow of information and creating transparent gov't so that the private sector may also innovate gov't.

If Obama went back to his election night speech and started governing like that I'm sure he'd find the answers quite quickly. However, a rhetorician as skilled as President Obama knows that the point is not to find the answers but to be seen asking the question.

danenania3• 15 years ago

The DOD also stifles innovation through the taxes and inflation required to keep it going, and by encouraging crony capitalism and corruption through awarding contracts to politically connected companies. Also by propping up dictators and bombing/kidnapping/torturing people and generally interfering with the democratic rule of law. Definitely wouldn't leave them out.

neutronicus• 15 years ago

Potentially interesting read:

http://levine.sscnet.ucla.edu/general/intellectual/againstne...

steveklabnik5• 15 years ago

+1. This book is written by dudes at Cambridge, has tons of historical examples, and is generally just really interesting.

mryall• 15 years ago

This is a great article full of examples about why IP law has hampered innovation. But it fails to answer a very important question: what should be done by the government to remedy it?

The first and simplest part of lobbying is identifying the problem. The much more challenging part is following up with useful recommendations on what should be done to fix it.

In terms of software patents, should the executive branch propose a bill to forbid them? What would the outcome of that be? How should copyright law be reined in? These are the questions that the next generation of policymakers need to solve and the recommendations we need to be sending to our respective governments.

marshray19• 15 years ago

what should be done by the government to remedy it?

A. Eliminate patents for everything except FDA-regulated drugs.

B. Eliminate the DMCA's anti-circumvention provisions and strengthen protections for reverse engineering and development of compatible products.

dctoedt• 15 years ago

> Eliminate patents for everything except FDA-regulated drugs.

I agree the patent system has its problems, but I'm curious: Why that one exception, but no others? What about, say, medical devices? And then where do you draw the line -- and why there and not somewhere else? (These are issues that legislators, lawyers, and judges have to deal with all the time.)

Kilimanjaro3• 15 years ago

Eliminate patents for everything. Period. If bigPharma discovered that amazonian aborigines by eating a rare fruit have lasting erections, they can't claim a patent for that, moreover, let other bigPharmas develop that drug too (on the shoulders of giants) so everybody (we the people) benefits from innovation, not just the first one who got there. We may give them a year to profit from their discovery so they build a brand but that's it. I rather go to the drugstore and find 10 cures for cancer than none because somebody got a patent and has a monopoly for that drug.

adsr• 15 years ago

The answer is probably not to get rid of all protection of IP though. I think a change to the law to prevent obvious patent trolls would be beneficial on the other hand.

Tycho• 15 years ago

Or maybe a sort of AI enhanced service that automated the 'legal hacking' involved in navigating the world of patents. Like as well as writing unit tests for your code, you write 'patent tests' which allow the search tool to determine if you're code/product is infringing any patents and if so how to avoid infringement.

pgroves2• 15 years ago

Does anyone know which places with relatively developed economies have the weakest IP laws? I would guess Hong Kong, Singapore, or China but I don't really know.

I've been working on a rather ambitious piece of software and I'm definitely worried that I'll get sued into oblivion over some minor user interface feature before I ever really make any money off it. I've lived all my life in the U.S. but would entertain the idea of leaving.

In fact if I'm going to leave my home town I feel like I might as well go someplace more exotic than Silicon Valley or New York. IP laws and other business concerns would definitely be an important criteria if I got serious about it.

marshray19• 15 years ago

Oh don't leave. For one thing, you won't be able to sell in to the US regardless of where you live. Patents allow them to block imports as well as sue your customers directly. Secondly, you're not likely to find a particularly level playing field if you, as a Westerner, are trying to compete in Asia.

daniel_reetz• 15 years ago

Great points, but I'd like to hear a second opinion. Anyone tried this? Some of the most innovative stuff is happening in some of the most lawless places almost by definition. I've had the inclination to try some of my personal projects outside the country on several occasions.

kenjackson2• 15 years ago

If its a minor UI feature, you can just change it. And if you haven't made any money off of it then they will not get much in damages.

The big worry is if you'd made tons of money off of it or if it is a big part of your program.

And the way patent litigation typically works in the US it will be small companies suing large companies. So you can sue Google or MS for using your great idea. Rarely will they sue you. You generally need to be on their radar for this to happen, which usually means being a threat to one of their businesses.

At this point, moving anywhere over this is crazy premature.

pgroves2• 15 years ago

I disagree that it's only big companies you need to worry about. There was recently a thread here on HN[1] about an open source flight plan project shutting down after being threatened by legal action from a small company that provided a similar service (and had some patents around it).

But regardless of the specific probabilities of any one startup getting sued, I still have a problem with a system where the government will harass you into bankruptcy on behalf of an incumbent corporation if that corporation decides they want you out of the way.

It's like a landmine in the middle of a football field. I probably won't be the one who loses a leg but it's enough of a threat to think about seeing if there's a better field to play on.

[1]http://news.ycombinator.com/item?id=2007899

grellas• 15 years ago

IP laws are flawed today in their implementation but it is a serious mistake to say that they are what is blocking innovation in America.

It is easy to pick some extremes of flawed implementation of IP laws and to ridicule their effects. Software patents have been seriously abused to block innovation, with the prototypical troll being, in effect, the equivalent of some lawyer sitting in a back room endlessly "conceiving" ideas from which extortion-style demands can be exacted. So too with things like the RIAA-led lawsuits demanding millions in damages for the downloading of 20 songs or the Disney-inspired extensions of copyright terms to ridiculous lengths having nothing to do with protection of any conceivable right of an author. Such items can readily and rightly be mocked and cast as the absurd anti-innovative creatures that they are. Nor does it help that the beneficiaries of such legal aberrations are often large and powerful companies, lawyers and lobbyists, and others who might be characterized as the antithesis of innovation in any productive society.

That said, IP laws do not in any sense categorically block innovation and, indeed, remain essential to it.

To understand the true importance of IP laws, we need to look at fundamentals. Property is both tangible and intangible. You can touch the former and physically transfer it to someone else. It is a thing that is possessed by someone and such possession excludes or limits possession by others because it is a finite resource that can only be shared so much. In the modern age, in contrast, intangible property is capable of almost infinite replication with few, if any, incremental costs. The temptation exists, then, to say that all such property should be commonly shared because it can be so shared and because people will use it to make advancements for the betterment of themselves and society. In other words, there presumably is no cost to making all information free, legally unprotected, and infinitely shareable. Or so the thinking goes.

But this assumption is not sound.

IP laws are designed to protect all forms of intangible property having commercial value. This means patents (which protect inventions), copyrights (which protect any tangible embodiment of an original work of authorship), trademarks (which protect the distinctiveness of the origin of goods or services), and trade secrets (which protect any form of valuable confidential and proprietary information).

These laws are so built into the fabric of the startup world that we normally just take them for granted.

For example, no startup could hope to survive without laws protecting trade secrets. Without such laws, whatever information or knowledge base you have in your startup that is unique and valuable could be lifted at will by any passing person: an employee who passes through and copies such information wholesale to give it to a competitor; the janitor who comes in at night who decides to publish it on the internet; someone who breaks into your network, copies it all, and then shares it with the world or, worse, if it is a competitor, who uses it to compete against you. If you once take the legal position that all information is free and freely shareable, then all protections for your confidential business plans, for your technical innovations, for your execution strategy, for your database of key customers, personnel, marketing data, etc. evaporate and you can no longer derive any competitive advantage from any of this as long as anyone gets his hands on it and makes it public.

Founder groups would have the same problem in pre-formation situations. Say, four founders build something that they have worked on for a full year and are prepared to launch. One of them defects and says to the group, "I am going to take everything that we have worked on and take it for myself." Of course, that is outrageous. Buy why? Because laws exist that declare it illegal for someone to misappropriate what the founders have been working on. Those are IP laws. They protect the interests in intangible property. Without them, every founder would be vulnerable to such defections, without any form of legal recourse.

Copyright serves a similar function. Whenever a startup relies on proprietary code, it is copyright (along with trade secret laws) that ensures that the work product of the company can't simply be lifted at will and used in any way that the person taking the code desires.

Open source is no exception. It relies heavily on rules of copyright law and on licensing to make its system work. If everything were freely shareable without any form of restriction, one does not have open source - one has freeware.

I could go on with this but, having already noted the potential for serious abuse when such laws are ill-formed, I think I have said enough to show that IP laws lie at the foundation of the startup world and are not in themselves the enemy. There are philosophical arguments to be made that all information should be freely shareable but any society based on that premise would be radically different from the one in which startups thrive today.

Startups depend heavily on IP laws. Such laws have great value in today's startup culture and ought to be recognized for that contribution. Reform them, absolutely; abolish them, don't even think about it (unless you are ready to embrace a philosophically extreme position about all forms of intangible property ownership). I don't believe most people are prepared to embrace the extreme position and, hence, one ought to be careful about castigating that which is good while condemning that which we can agree is bad.

Bottom line: IP laws do not kill innovation and, on the contrary, are vital to it. Flawed IP laws stink and need to be reformed.

cturner3• 15 years ago

    These laws are so built into the fabric of the startup
    world that we normally just take them for granted.

You're trying to defend something without considering the opportunity cost of it. I can understand why - you don't know what the opportunity cost is. None of us do. But that doesn't make your defence valid.

If the government gave people privilege for howling at the moon, there would be a startup scene around it. That's not a defence of the policy.

    For example, no startup could hope to survive without
    laws protecting trade secrets

That blanket statements is false. Even if it were true, there are mechanisms that predate conceptions of IP that can be used to defend trade secrets, particularly contract.

    Startups depend heavily on IP laws.

Only some do. And then there are a raft of startups that can't and don't exist as a result of IP laws.

tptacek9• 15 years ago

Here is an absolutely excellent cross section of the startup world, consisting primarily of early-stage companies, a subset of a larger population of companies that vied against each other to gain a position on the list:

http://yclist.com/

Of the companies on this list, make an argument as to the percentage of them that would be viable in a world where copyright on source code wasn't enforceable, where there was no trade secret law and publication of company secrets was thus protected under the First Amendment, and where any element of content on any web page reachable on the Internet could be freely lifted and used by any other company.

alexqgb3• 15 years ago

"IP laws are designed to protect all forms of intangible property having commercial value. "

Wrong.

IP laws are designed to ENDOW intangible goods with commercial value by creating artificial scarcities via sanctioned monopolies.

I'm not saying that's good or bad. I'm just pointing out that you're a practicing lawyer lecturing others about "fundamentals" of law that you - fundamentally - don't understand.

travisp4• 15 years ago

Wrong.

What you claim isn't the only view. Here is a paper in the University of Pennsylvania Law Review which argues against this (see pages 2026-2028):

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1457848

"it does seem at first blush that it is only a court’s decision to protect a trademark as “property” that makes the trademarked term economically valuable...Trade secrets and patented inventions, however, reveal the initial cracks in Cohen’s critique...The reason is that inventions, regardless of how they are legally protected, would be valuable even if there were no legal system that protected them..."

"Modern patent theory, as informed by law and economics, understands and embraces this fact. The economic analysis of patent law assumes as one of its basic foundational premises that an invention’s value preexists its legal classification as property in the patent system."

tbrownaw8• 15 years ago

For example, no startup could hope to survive without laws protecting trade secrets.

The assumptions here are that your secrets give you an advantage by being secret, that they're easier to steal than to rediscover, and that that advantage is necessary to success. These assumptions are not universally correct, and I suspect that their degree of correctness is rather strongly overestimated.

That doesn't sound like any of the standard copyright/patent/trademark/trade-secret categories, it sounds like it has something to do with (probably implied) contracts.

So then Postgres, SQLite, the BSDs, clang, etc are freeware instead of open source?

I don't think that's a sound argument, we've done just fine abolishing other practices that businesses seemed to depend on. What is observed to happen when/where such laws don't exist or are generally ignored?

tptacek9• 15 years ago

When the startup lawyer says that the protections for parties in startups from defection and unfair competition are derived from IP laws, I tend to believe him. You seem to retort, "but that's contract law!". But those are contracts protecting intellectual property.

Postgres, sqlite, BSD, and clang are BSD-licensed open source. But many more projects are GPL-licensed, and thus depend entirely on IP law, than those that aren't. Without IP law protections, those GPL projects compete on an unlevel playing field with companies that would otherwise be free to capitalize on all their work without contributing anything back.

Finally, of the list of YC companies here: http://yclist.com/, how many take no advantage of IP laws? How many are entirely BSD-licensed open source? How many have no trade secrets?

pbhjpbhj9• 15 years ago

>That doesn't sound like any of the standard copyright/patent/trademark/trade-secret categories, it sounds like it has something to do with (probably implied) contracts.

If they copy code it's copyright infringement (often even if they wrote it!, depends on the contracts). If they copy model details it can be copyright, design rights and sometimes trademark and even patents. If they copy technical working features that were patented then they would be in violation unless they were the sole rights holder. If they exploit secrets they learnt in the course of working in the company they would be breaching trade-secret laws.

And yes, most likely they'd be breaching contractual agreements in addition. But the GP's description sounds exactly like the sort of thing protected by IP law.

IANA(Patent)L but have worked previously for several years in IP.

>>one does not have open source - one has freeware.

This is actually wrong, one then has PD. Freeware is still protected by copyright law and unless an additional license is given can't normally be commercially exploited, nor could I claim authorship, etc..

>What is observed to happen when/where such laws don't exist or are generally ignored?

It's hard to tell, there are barely a handful of countries that do not have IP law. For example the Paris Convention (patents) has 173 countries signed up, the Berne Convention (copyright) has 164 (Wikipedia figures; out of 190ish countries).

I'm with the GP I find IP law vital but in desperate need of reform.

kiba3• 15 years ago

I have not seen any empirical evidence to suggest that IP laws are necessary other than what people said.

Nonetheless, I am experimenting to see if it is true. It's only one sample. So far, I am not suffering any ill effects.

pbhjpbhj9• 15 years ago

>I have not seen any empirical evidence to suggest that IP laws are necessary other than what people said.

Suppose I take http://libregamewiki.org and copy it completely (logos, attributions and all) and put it up on the .com address. Remove the license and puts some ads on there.

You'd just say "oh well, fairplay"??

Your LibertyGaming blog pages too use CC-BY, that only works because you have control via copyright law, without copyright law I can use your content without any attribution or say by you.

baddox3• 15 years ago

> For example, no startup could hope to survive without laws protecting trade secrets.

Existing theft and trespassing laws already outlaw unauthorized physical access to your property. As for disgruntled or opportunistic employees, you can utilize existing contract law to ensure their doing so is illegal. What exactly do trade secret laws cover that aren't covered by more reasonable and fundamental laws?

> Open source is no exception. It relies heavily on rules of copyright law and on licensing to make its system work. If everything were freely shareable without any form of restriction, one does not have open source - one has freeware.

That's why I have strong feelings that the free software movement, or at least the GPL, is insanely contradictory. Their claim is that there shouldn't be liberty restrictions placed on software, but what they really mean is there should be different liberty restrictions placed on software, specifically the ones they happen to like more. In my opinion, software isn't really free unless it's in the public domain (or, nearly equivalently, if there were no longer any intellectual property protection for software).

Most of your points are simply that removing the various forms of intellectual property protection would harm some people. The validity of your specific examples are variously debatable, but even if you're right, I don't think that's a good enough argument for keeping the laws around. I can't conceive of any legal modification that wouldn't harm someone. In my opinion, even if something might harm startups (and I'm certainly not convinced that IP laws are vital to startups), that's not a sufficient argument.

pbhjpbhj9• 15 years ago

>As for disgruntled or opportunistic employees, you can utilize existing contract law to ensure their doing so is illegal.

The current laws include some protections for the individual inventor/creator which would be wiped out by this sort of thing. For example (in Europe at least) fair compensation for an inventor even when their work is covered as "work for hire".

tptacek9• 15 years ago

If I break into your office, steal your secret source code, and give a copy to my brother, what part of "existing theft and trespassing laws" prevent him from selling that copy to the highest bidder?

jberryman2• 15 years ago

> Their claim is that there shouldn't be liberty restrictions placed on software, but what they really mean is there should be different liberty restrictions placed on software, specifically the ones they happen to like more.

Of course there are different takes on this issue, but you make it sound as thought the GPL is a conspiracy by Stallman. The FOSS ecosystem encompasses a wide array of types of and takes on "freedom" and there is a place for all the different licenses developers can choose from to open source their code.

jberryman2• 15 years ago

Property is both tangible and intangible.

Peititio principii. Many argue that even the phrase "intellectual property" is disingenuous; a term invented by the entrenched stakeholders to gain support for the laws they would like passed by creating a false analogy between physical property and knowledge.

travisp4• 15 years ago

While I'm not sure where the phrase itself came about, John Locke back in the 1600s endorsed copyright in "Liberty of the Press" as the "property" of the authors and proposed an amendment to British Parliament in 1695 to "secure the author's property in his copy, or his to whom he has transferred it." (See "Lockean Property Theory and Intellectual Property" in http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1457848)

This implies that the idea of intangible property has existed since at least the 1600s and was supported by one of the most important property theorists of history. I don't think you can dismiss it so easily as a simple "false analogy" or that calling patents and copyrights "property" is some sort of modern rhetorical invention.

wybo2• 15 years ago

(GPL-style) Open Source only relies on copyright because of how guarantees of reciprocal freedom are currently tacked on top of it (it is a hack).

It should not be too hard to imagine 'implementing' it in a different way.

Such as through a specific law that required giving users access to the source code (and other freedoms, possibly extending to derivative works) if a certain piece of software were marked as Open Source (or for all software, as Stallman would probably prefer it).

(yes this might make Open Source software a less attractive alternative, as it would be competing against free as in a free lunch, but as the market-landscape would be changed in favor of FOSS production models as well, by this, and FOSS has certain benefits even if produced for a fee (ability to hire competing firms for implementing fixes and modifications), there are good reasons to assume FOSS would still flourish)

It keeps surprising me how otherwise intelligent/educated people don't see this option...

nitrogen2• 15 years ago

Even if one disagrees with the notion of abolishing all intellectual property laws[1], there is value to Groklaw's argument against them. An extreme point of view can serve to anchor the discussion closer to what one might consider ideal (e.g. a hypothetical "founders' copyright," with 14/28 year terms, or n-year patent terms where n is << today).

[1] I have to admit I am intensely curious what the world would look like if suddenly all IP laws were abolished. I imagine there would be a brief frenzy of copying and exploiting, but eventually a new equilibrium would be achieved and innovation would continue but under some other motivation.

stretchwithme• 15 years ago

Patents are one way people can make deals with innovators that can make some innovation more likely, but its not the only way this could be done.

I think the coercive element, the idea that someone can be sued for doing something they have an inherent right to do is the problem.

It is one thing when people agree that they need something and offer to buy it exclusively from whoever creates the first viable product. It is quite another to coerce everyone to do so.

That said, we should not hand out monopolies that are not in the interest of most citizens. And what is in our interest is determined rather badly with winner-take-all elections and the power they give to lobbyists.

DanielBMarkham• 15 years ago

I kind of groaned when I saw this title on HN.

Problem? The title told me it was going to be a highly-emotional appeal to an audience already primed to agree with it. And the vote score only confirmed that assumption. Time to put on the old critical thinking hat.

What a great article! It was a wonderfully-put-together rant about what is wrong with IP law. I agree with every point -- including the outrage the author felt.

The only thing I didn't agree with? The premise -- that IP laws are blocking innovation.

Yes, as the examples show, there is a great amount of innovation that is being stifled by IP laws, and something is desperately needed to fix it. But let's not get caught up in all that emotional outrage at how screwed up things are. Instead, ask a simple question: to what degree is all innovation stifled by IP laws? Because that's the claim: that every kind of innovation is being stifled by the current crappy state of IP laws.

Clearly that's not the case at all. The newspaper boy who invents a new newspaper folder isn't being stifled. The restaurant owner who comes up with a way to wait more tables with less staff isn't being stifled. The media creator who packages his product in a way to increase stickiness isn't being stifled. It's just a bunch of examples that members of this audience already know and are sympathetic with.

I could go on. And on and on. So yes, in this one area in which we are all pretty damn angry to begin with, IP laws are totally destroying innovation. But in the other thousand or so areas from which most of us have little experience, they are not.

I loved the rant. And I love a great title and this article had one. A little hyperbole is good for the soul. So while I have no faults with the article, I'd just recommend a little bit of common sense when dealing with a premise so over the top. People have a tendency to take whatever they're really angry about -- and then apply it to whatever problems the world is facing. IP law is not stifling all innovation. It isn't even coming close. But it's definitely horribly broken and needs to be fixed.

beagle3• 15 years ago

It's relatively easy to downsize IP laws with a single change: If they are property, tax them as property.

e.g.

Every year, a patent/copyright/trademark owner has to state the value of their "property", and pay 1% tax on its value. That entitles them to sue each defendant for said value (maybe 3 for wilful infringement, but that's it). You can make it easier by declaring the value of the "property" at any point in time during the year until 15-apr the following* year, so you can evaluate in retrospect.

Now, all of a sudden, it doesn't make sense to hoard patents or copyrights as much - If you value each song at $100K, then it costs $1K/year to maintain that copyright.

I'm sure Intel/Microsoft/Apple would actually evaluate what does and doesn't need patent protection when they have to pay millions of dollars per year to maintain it.

Furthermore, it's only reasonable - paying tax for having the state enforce your "property" rights.

White House: What's Blocking Innovation in America? My Answer: IP Laws

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