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Will the internet kill copyright? Here’s hoping …

IDEAS AND OWNERSHIP: The concept of protecting ideas and innovation by legal means dates back to antiquity. But many of our existing laws are under strain, their suitability and ultimate purpose called…

Debates about online copyright protection have been particularly heated of late. marfis75

IDEAS AND OWNERSHIP: The concept of protecting ideas and innovation by legal means dates back to antiquity. But many of our existing laws are under strain, their suitability and ultimate purpose called into question.

Here, Philip Soos considers the faults that plague existing copyright laws and suggests that, in an increasingly online world, we need to find more realistic options.

In the past few months, there’s been substantial media interest in the Stop Online Piracy Act (SOPA) bill in the US, introduced ostensibly as an attempt to crack down on intellectual property rights (IPR) violations.

If adopted, this bill would give the US government even more power to deal with those found infringing IPRs than currently exists under the existing legislation – the Digital Millennium Copyright Act (DMCA).

SOPA has spawned a great deal of debate over the merits and demerits of further expanding protection for IPRs. Some claim SOPA would help protect jobs and profit – hence innovation; while many argue SOPA would impinge upon citizens’ right to privacy.

Opposition to SOPA prompted many websites, including Wikipedia, to close down temporarily in protest.

But this debate leaves much to be desired. It consists of arguing IPR protection should be strengthened, weakened or left alone. Few, if any, are critical of the reigning assumption that IPR is a necessary intervention in the economy.

The question that needs to be asked is: why is a 16th century medieval government monopoly being used to spur innovation and creative art in the technologically-advanced 21st century?

The usual story trotted out is that markets will produce a less than optimal level of research and development and creative works without some form of government intervention. We are told that without such intervention, many of the technologies and modes of entertainment we enjoy today would simply not exist.

Thus the need for copyrights to provide the stimulus for firms to invest to meet consumer wants and needs.

The state-driven tech revolution of the late 1990s has seen an explosion of IPR-protected content being shared over the internet. Evolving technology (such as peer-to-peer networking) has made it easy for almost anyone with a decent internet connection to continuously download and upload files, whether that’s video games, music, books, magazines, comics, TV episodes, films, documentaries, or programs.

Anything that can be converted into electronic data and stored on a computer can be shared. It has been estimated that the sharing of content through the BitTorrent file-sharing protocol accounts for one-third of internet traffic today.

Given authorities across the world have often had to catch up to the evolving uses of the internet via legislation, it is difficult for individuals and firms to simultaneously enforce their state-granted rights in many countries, all with differing laws in regards to IPRs.

(That said, the World Trade Organization has attempted to standardise international and national law through its Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS).)

Industry and governments have certainly tried hard in this respect. Every iteration of copyright protection law appears to be more draconian than the last. It is unsurprising that the US is in the lead of protecting IPR, as its industries are the largest and often most profitable (as in the case of pharmaceuticals and biotech).

The TRIPS and DMCA legislation have clearly done little to prevent file sharing, which appears to be ever-increasing in magnitude. Draconian laws have done little to deter users from violating copyrights and other forms of IPRs.

Gideon Burton

Online content is really no different to drugs that are currently illegal: people who want them will always get them, with entrepreneurs and cartels operating within the black market to meet demand. The sane course of action is to carefully legalise and regulate the supply of drugs/ content, not impose wildly invasive, expensive and equally ineffective government intervention against producers and consumers.

Ever more draconian legislation has not and will not prevent people from file-sharing and violating IPRs. Industry will claim IPRs, as private property, must be respected. But to claim IPR, as information, should be covered by private property rights is as nonsensical as if the government were to assign a property right to an autoworker’s job, allowing the employee the right to hold it or sell to another.

Ownership under copyright is twisted to the point where consumers do not own the software they purchase; rather, they are merely extended a license to use the software that the company owns.

The problems with copyright (and other forms of IPRs) are extensive. The most obvious flaw is the monopolistic pricing inherent to this form of intervention. Any introductory economic textbook tells us the efficiency is met when outputs are produced and sold at marginal cost – what it costs to produce the next good or service.

In the information age, electronic data or informational goods can be copied for free. Accordingly, this is what goods should be priced at: zero, instead of monopoly pricing.

Ironically, pirates are acting as conventional economists claim people should – that is, they are rational agents seeking to maximise their utility (happiness) by obtaining copies of informational goods at marginal cost.

Other costs include those associated with the court system and patents offices, which have effectively become a joke. People and firms are endlessly suing each other over potential and real copyright infringements, with these legal expenses essentially acting as a tax on innovation that is passed on to consumers.

Bureaucrats at the patent office are under a difficult burden to ensure that software patents are truly innovative and do not violate previously-granted patents.

Under SOPA, citizens’ online activities would be watched and recorded in ever-greater detail, in a futile attempt to crack down on piracy. What industry is calling for is an ever-stronger police state to ensure legislative compliance, despite what the evidence may say about the loss of sales pertaining to piracy.

It should be obvious by now that a new form of funding research, development and creative works needs to be implemented. The cornerstone of any new system should ensure goods are sold at the cost of production: either free on the internet or a few dollars for the physical product. Creative Commons and free software licenses should become the new mode.

The extremes of wealth also need to be avoided: there is no natural law that says Bill Gates should become a billionaire via government monopoly while many creative artists just scrape by.

It is imperative that the wastes and inefficiencies of the IPR system be eliminated and not reproduced under alternative systems.

It is time for some creative thinking on the part of the public (industry isn’t going to help) to design alternate models of financing. Otherwise, the nanny state that operates on behalf of the rich is going to become ever more authoritarian.

This is part five of Ideas and Ownership. To read the other instalments, click on the links below:

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8 Comments sorted by

  1. Nicholas Sheppard
    Nicholas Sheppard is a Friend of The Conversation.

    Computer Scientist & Teacher

    It seems to me that there is an enormous wealth of people with complaints about intellectual property law, but precious few with any constructive ideas on how to improve it.

    The cost of production of intellectual property isn't zero (did you mean "reproduction"?); it ranges from a small investment in time for amateur blogs, videos, etc. to many millions of dollars for blockbuster films and computer software.

    Now, there are numerous ways in which one might recoup such an investment, including…

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    1. Philip Soos

      Deakin University

      In reply to Nicholas Sheppard

      Perhaps one of the problems with reformation of the system is that much of it comprises entertainment goods. If someone can't afford a movie or music CD, so what; it's a luxury. They have the option of pirating it instead.

      Monopoly-priced entertainment goods aren't as problematic as pharmaceuticals, which does create life or death situations.

  2. Anthony Peterson

    logged in via Twitter

    There's a little problem with your argument, my friend. All the movies you'd like to 'buy' (at a marginal cost of zero dollars) have to recoup their fixed costs. Name me one movie you'd like to steal that cost zero dollars to make. The silence is deafening.

    1. Philip Soos

      Deakin University

      In reply to Anthony Peterson

      That informational goods require a markup above marginal cost for firms to recoup fixed costs under the IPR system is so obvious that I didn't mention it.

      Any rational policy requires public funding to ensure producers and distributors can make a profit whilst pricing goods at marginal cost for consumers, avoiding the enormous wastes, inefficiencies and inequalities of the current IPR system.

  3. John Harland

    bicycle technician

    Another long argument, I predict, between those who recognise the real faults with the present systems and those who fall back on idealised visions of copyright and patenting to defend what falls, in reality, far from those ideals.

    Patenting and copyright began in times when protection allowed a small producer time to get a head start on their rivals. Patenting, particularly, relies on imperfect communication and leaky human memory to work. Once everyone has computer systems and software that…

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  4. John Harland

    bicycle technician

    Imagine if Dunlop had remembered that he had seen pneumatic tyres before - on Thompson's carriage in Edinburgh when Dunlop was studying there (not certain, but a very high level of probability)?

    Would Dunlop not have produced pneumatic tyres if he couldn't have patented them? Would the world not have pneumatic tyres as a result?

    I doubt it.

    Apart from making Dunlop very rich through patenting an idea at least one other person had trialled and patented before, of what value was that patent…

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  5. alexander j watt

    logged in via Twitter

    There needs to be a new model. All this fear that people will stop innovating, being creative etc. without copyright/patents is baseless. The only thing that is for certain is that a lot of middle men who are not innovators, but who are benefiting from the system, would lose their income without copyright.

    What has happened to the music industry is telling as an example. It has changed - perhaps the day of the supergroup is over - but there is more new music, more innovation, than ever. It is…

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    1. Nicholas Sheppard
      Nicholas Sheppard is a Friend of The Conversation.

      Computer Scientist & Teacher

      In reply to alexander j watt

      As I understand the traditional justification for patent and copyright law, giving the inventor/creator a "head start" in the market is exactly what they are supposed to do, by granting a temporary monopoly on the use of the invention or creation.

      Many people (including me) doubt that they need a head start of the life of the creator plus seventy years, but I think the principle is there even if the quantity is debatable.