The Internet & The Battle Over Innovation

The public policy battle that defined the 19th century pitted labor against capital.  While that battle has not completely ended, the battle that may define this century is about “intellectual property” – who owns it, what others can do with it, and indeed whether ideas and innovations can or should be treated as property in the same way that land or a car is property.


To go back to original principles, copyrights (and patents) were made part of the US Constitution to primarily encourage innovation by granting monopoly control over an idea for a limited time.  It wasn’t there primarily to protect the value of that monopoly.  That was just the tool the authors of the Constitution used to provide incentives for innovation by any inventive genius then living in the hinterlands.

Of course, a lot has changed since then.  We realize much better now that it is rare for a lone genius to come up with an idea or even a creative work, without having been influenced, perhaps even collaborating in a way, with many others.  So the importance of that monopoly incentive for all the people who play a role in creating something new is not as clear today.  Nor are the current owners of copyrights and patents necessarily the original creators.

The battle was started more than ten years ago by the development of the Internet.  Then, in 2004, the famed intellectual property law professor, Lawrence Lessig, wrote “Free Culture”.  He explained: “Free Cultures are cultures that leave a great deal open for others to build upon. Ours was a free culture. It is becoming less so.”

He argued that ever since the Constitution set out a limited term for copyrights, Congress has continually extended that term and added other limitations on the use of copyrighted material until now that there is almost no public domain left.  His concern is that few works remain – and no new ones added – that are free to be used and help contribute to our common knowledge without restrictions.  

As he wrote: “At the start of this book, I distinguished between commercial and noncommercial culture. In the course of this chapter, I have distinguished between copying a work and transforming it. We can now combine these two distinctions and draw a clear map of the changes that copyright law has undergone.” 

He then proceeded to show that in 1790 only works that were published commercially were covered by copyrights.  In this century “the law now regulates the full range of creativity — commercial or not, transformative or not—with the same rules designed to regulate commercial publishers.”  Moreover, these copyrights extend for a much longer period of time.

Lessig worries that this imbalance and overuse of copyrights is diminishing the vibrancy of our culture and ultimately reducing innovation.


By the way, I opened this post with a reference to how your car is considered to be a very traditional kind of property.  But nothing really escapes the digital age, so it’s fascinating to see the lawyers for John Deere and General Motors recently claiming that you don’t really own their vehicles completely.  Yes, you own the mechanical parts, but they claim they retain ownership of the software that is now a critical component of those vehicles – so, no, you don’t really own that car after all.  Yet another example of the extremism that Lessig criticizes.

This past year, the science-fiction author and activist, Cory Doctorow, wrote his update to the debate in “Information Doesn’t Want to Be Free: Laws for the Internet Age”.  

But bringing some wisdom and historical perspective to the debate at hand, he adds a delightful chapter about the principle he calls “Every Pirate Wants to Be an Admiral”

It’s not as though this is the first time we’ve had to rethink what copyright is, what it should do, and whom it should serve…

When piano rolls were invented, the composers, whose income came from sheet music, were aghast. They couldn’t believe that player-piano companies had the audacity to record and sell performances of their work. They tried—unsuccessfully—to have such recordings classified as copyright violations.

Then (thanks in part to the institution of a compulsory license) the piano-roll pirates and their compatriots in the wax-cylinder business got legit, and became the record industry.

Then the radio came along, and broadcasters had the audacity to argue that they should be able to play records over the air. The record industry was furious, and tried (unsuccessfully) to block radio broadcasts without explicit permission from recording artists. Their argument was “When we used technology to appropriate and further commercialize the works of composers, that was progress. When these upstart broadcasters do it to our records, that’s piracy.”

A few decades later, with the dust settled around radio transmission, along came cable TV, which appropriated broadcasts sent over the air and retransmitted them over cables. The broadcasters argued (unsuccessfully) that this was a form of piracy, and that the law should put an immediate halt to it. Their argument? The familiar one: “When we did it, it was progress. When they do it to us, that’s piracy.”

Then came the VCR, which instigated a landmark lawsuit by the cable operators and the studios, a legal battle that was waged for eight years, finishing up in the 1984 Supreme Court “Betamax” ruling. You can look up the briefs if you’d like, but fundamentally, they went like this: “When we took the broadcasts without permission, that was progress.  Now that someone’s recording our cable signals without permission, that’s piracy.”

Sony won, and fifteen years later it was one of the first companies to get in line to sue Internet companies that were making it easier to copy music and videos online…

The purpose of copyright shouldn’t be to ensure that whoever got lucky with last year’s business model gets to stay on top forever. Live music is great, but what a rotten thing it would have been if the winners of the live-music lottery in 1908 had been allowed to strangle recorded music to protect their turf.”

Doctorow noted that the public has found ways around the ever increasing copyright restrictions, albeit with questionable legality.  At its conclusion, the book is intended to help the creative artists and innovators of our day – if not the corporate owners of intellectual property – understand how they might still make a living.  

Chris Anderson also offered ideas along these lines in his 2009 book, “Free: The Future of a Radical Price”, but more in response to the fact that the cost of products, including creative products, has gone down dramatically.  But that is also a factor in the intellectual property debate.  

A couple of years ago, I participated in the annual innovation summit that the Wharton School of the University of Pennsylvania runs.  I remember a generational divide in the room among the people who made a living in biotech and pharmaceuticals.  The younger executives told the older ones that they could no longer expect the kind of monopoly returns on their patented drugs that they use to have because new ideas and inventions were so much easier to generate now.  

And, getting back to basics, wasn’t the original point to encourage innovation?
As befitting a battle of the century, there’s lots more to say about this controversy, but I’ll say that later.  This post is long enough for an opening round.

And, without irony ;-), while on Tumblr, take note © 2015 Norman Jacknis


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