Intellectual Property on the Net

John Michael Makoto Dykes

Paper for MIT 6.805/STS085: Ethics and Law on the Electronic Frontier, Fall 1995

"The issue isn't that intellectual property laws should (or will) disappear; rather, they will simply become less important in the scheme of things." Esther Dyson, "Intellectual Property on the Net"

The digital age has brought with it a great deal of uncertainty with respect to the nature of intellectual property, indeed the idea of property itself. The question of who owns and controls digital information cuts straight to the heart of controversial issues--from patents and copyrights to policing Web pages. In order to determine if property should enjoy any validity at all on the net, this paper examines the historical development of the concept of property, explaining the theoretical underpinnings of property through the words of John Locke. Based upon this philosophical treatment of property, I will show that property, specifically intellectual property, exhibits inconsistency vis-à-vis the net, effectively invalidating the concept in the context of the digital medium.

Property as a legal construct has existed since Roman times. In fact, Roman law is the basis of modern Anglo-American property law, since Roman law was well-developed and recorded, delineating all of the "sum of rights, privileges, and powers a legal person could have in a thing."[1] Property under the Roman scheme, however, was limited to what one could touch, tying the idea of property irrevocably to the physical realm. Intellectual property was generally not recognized; storytellers freely borrowed and interpreted from others with each retelling of a story. Even many written works were simply one person's reinterpretation and re-collection of the stories of others. As John Perry Barlow writes in "The Economy of Ideas":

"From the Neolithic to Gutenberg (monks aside), information was passed on, mouth to ear, changing with every retelling (or resinging). The stories which once shaped our sense of the world didn't have authoritative versions. They adapted to each culture in which they found themselves being told. Because there was never a moment when the story was frozen in print, the so-called "moral" right of storytellers to own the tale was neither protected nor recognized. The story simply passed through each of them on its way to the next, where it would assume a different form."[2]
Hence, basic property law was tied intrinsically to tangible objects--in particular, real estate. Barlow notes that the defense of this property for a great deal of history was based almost exclusively upon the military might of the property owner.

At this point, we shall step back. Tangible forms of property are easily defined and understood, since they are, by definition, contained in realspace. However, on the net, it is the intangible forms of property that confuse everyone. Examining property from a philosophical perspective gives us some insight into where the two concepts diverge--a divergence, which is critical to showing that property is irrelevant on the net.

John Locke, a seventeenth century English philosopher, played a crucial role in defining Anglo-American thought with respect to property. According to Locke, the most basic "property" is the most personal: "every man has a 'property' in his own 'person.'"[3] Locke binds the right of self- preservation to this property, making it intrinsically wrong to deprive others of this right, as this would trespass upon the property of others' lives. Locke then explains the development of tangible forms of property based upon the need for survival. The basic premise is that nature is owned commonly by all people. One then acquires property by mixing one's labor with commonly-owned nature, taking only so much as one needed to live; thereby, not trespassing on the right of others to survive, since nature contained enough resources for all. Locke illustrates:

"He that is nourished by the acorns he picked up under an oak, or the apples he gathered from the trees in the wood, has certainly appropriated them to himself. Nobody can deny but the nourishment is his. I ask, then, when did they begin to be his? when he digested? or when he ate? or when he boiled? or when he brought them home? or when he picked them up? And it is plain, if the first gathering made them not his, nothing else could. That labour put a distinction between them and common. That added something to them more than Nature, the common mother of all, had done, and so they became his private right."[4]
However, Locke stresses that people were only allowed to take so much as they needed to survive; thereby, not trespassing on the right of others to survive, saying "one may engross [property] as much as. . . . one can make use of to any advantage of life before it spoils, so much he may by his labour fix a property in. Whatever is beyond this is more than his share, and belongs to others."[5] Let us use the acorn example above to make Locke's words clearer. If one person were to gather all of the acorns from the tree, you could argue that, by Locke's reasoning, that person should then own all of the acorns. However, while the harvest of the acorns may give the person property rights, his inability to consume all of the acorns before they spoil negates those rights on the portion of acorns, which do spoil. The spoiled acorns are inedible, meaning that they cannot be used by another to further his/her own survival, implying that the acorn-gatherer trespassed upon the property of others.

Locke's definition of original property sounds surprisingly like communism. Originally, communism was "a system of society in which property was owned by the community and all citizens shared in the enjoyment of the common wealth, more or less according to their need."[6] Indeed, it is important to note this similarity, since Locke's next discussion is the introduction of money, which forever altered property, and doomed pure communism.

As explained above, the impermanent nature of physical property used for survival bounded the amount of property any one person could have. It was the universal agreement by society to endow certain shiny pieces of metal with value, id est, one could trade acorns for coins, that removed the bound on property:

"thus came in the use of money; some lasting thing that men might keep without spoiling, and that, by mutual consent, men would take in exchange for the truly useful but perishable supports of life. And as different degrees of industry were apt to give men possessions in different proportions, so this invention of money gave them the opportunity to continue and enlarge them."[7]
In other words, money allowed man the capability to horde wealth, and thus, the enlargement of personal property also became possible. One can collect all of the acorns, eat what he/she can, and then trade the rest for money--that is, "sell." The fundamental question with respect to property changed from "How long can this keep me alive?" to "How many <insert currency name here> is this worth?". In other words, property became intricately intertwined with the concept of money, since money became the unit of measure of property.

It is at this point that intellectual property joins the fray. Intellectual property is, after all, the most intangible form of property that we know of. It cannot be touched, removing it from the realm of old property laws; however, it can nevertheless be owned, since it has monetary value. In short, the introduction of money opened the way for intellectual property. The late entrance of this form of property is reflected in what Barlow calls the "central economic distinction"[8] between intellectual property and physical property, namely, the theft of physical property deprives the owner of the stolen good, while the "theft" of intellectual property merely deprives the creator of the pecuniary benefits of the idea.

Continuing with the historical development of property law, it is easy to see the emergence of the new monetary standard. Copyrights and patents clearly protect not intellectual value, rather what Esther Dyson calls the "market value", or "what people are willing to pay for intellectual value."[9] For instance, the first copyrights were granted not to protect the rights of authors, but to raise revenue and to give the government control over publication[10]; the Statute of Anne permanently made authors the (monetary) beneficiaries of their written works. The first patent, granted in 1421 in Florence, gave Filippo Brunelleschi a three year monopoly on his invention, ensuring his monetary income. Jumping to modern times, case after case illustrates the basic truth that market value is protected by intellectual property law: spurious patents give companies intellectual property rights, which ignore the basic tendency of software programmers to borrow and share good ideas, e.g. Cadtrak's exclusive-or cursor writing, natural-order recalc in spreadsheets, backbuffering, and so on.[11] Copyrights have similarly led to long trials like the "look and feel" lawsuits of Lotus, Apple, and others, further illustrating the market protection copyrights afford.

Having shown the monetary base of intangible property, we are now in a position to explore whether this definition of property can be upheld on the net. Barlow notes that when he asks audiences how many can honestly say that they do not have unauthorized software on their hard disk, he never sees "more than 10 percent of the hands go up."[12] Indeed, software "piracy" is widely condemned, but also condoned, David LaMacchia notwithstanding. Some even say that the most financially successful software programs, also happen to be the programs which are pirated most often, leading to the hypothesis that piracy develops popularity, which results in increased market share. The electronic ether of the net, where infinite, costless, easy replication is possible, makes controlling replication unmanageable, futile, and inane.

We can examine this particular issue of intellectual property law from two sides, both of which lead to the same conclusion: that intellectual property is irrelevant. Let us first begin with the scenario of a software company tolerating the use of its pirated software; this is the situation that most companies find themselves in, at this time. That users are violating the copyright on this software is fairly well- established. However, inaction on the part of the property owner chips away at the owner's very right to this intellectual property. We turn once more to Locke, who writes, "For I have truly no property in that which another can by right take from me when he pleases against my consent."[13] Locke was arguing against the notion of government seizure of property, but by the same token, it implies that there is no notion of "property" when that property can be freely taken without fear of reprisal. In fact, the nullification of ownership through inaction is a basic precept of property law, even in the physical realm:

"If person A leaves the tract of land that he owns in the woods, person B may enter into possession of it. That second possession is wrongful as to person A, but person A must act to recover his possession from person B within the period set down in the statute of limitations. . . . One may ask who then owns the land. In most Anglo-American jurisdictions the peaceable possessor of land has the right to possess that land against all except those who can show a better right to possession. But if person A's right to possession is barred by the statute of limitations, then his claim is not better than that of the peaceable possessor."[14]
Hence, it is the responsibility of a property "owner" to actively pursue violations of that ownership, or ownership can be nullified.

Now let us turn to the case of the software company who refuses to condone this behavior. The pool of software users who have pirated software may be estimated at about 90% of all users, if Barlow's informal polls are any indication. The software company may not leave anyone out of the dragnet, otherwise it will fall into the property nullification problem illustrated above. Going after every user of pirated software will quickly become very expensive, in terms of legal costs, manpower, and time. This will cut deeply into whatever profit margins the company may be making from its software. Recalling that intellectual property is associated not with its intellectual value but with its market value, profit reductions mean, by extension, that the intellectual property is also falling in value. Second, it is safe to assume that the software company will also decline in popularity among software buyers, who could feel targeted by the company--further reducing profits and the value of that intellectual property.

Having examined a specific example, i.e., software copyright and software piracy, we see that whether a company chooses to pursue software piracy or not, the end result is the same: intellectual property becomes irrelevant--either its market value is zero, or the property right is nullified. This is also true in the general case. That is, generalizing to all forms of intellectual property on the net, including both copyrights and patents of all sorts, we can reach similar conclusions. Inaction on the part of the owner leads to the nullification of that property right. Meanwhile, pursuit of trespasses upon the property right accomplish little but further cuts in profits. Imagine how much money Lotus and Borland have spent on their back-and-forth cases about a spreadsheet. The resulting cuts in profits means that the intellectual property involved is worth less and less, not in terms of its intellectual value, but in monetary value--which is all that really matters.

Many people have been working diligently on producing new ideas about property on the net. For instance, Randall Davis, Pamela Samuelson, and others espouse a sort of copyright-patent hybrid for use on the net. Specifically, they propose four mechanisms: "Traditional copyright protection for literal code. Protection against behavior clones for a market-preserving period. Registration of innovation to promote disclosure and dissemination. A menu of off-the-shelf liability principles and standard licenses."[15] However, developing new forms of intellectual property to replace or augment the old forms seems to lead to the same conclusion. For instance, let the market-preserving period be six months. As fast as technology and software change, six months is already fairly long. The question arises, how many people will rush out to buy the new software if they know that they will be able to get it much cheaper within a year? In other words, will I buy the $450.00 Lotus 1-2-3 now, or the $99.00 Paperback version in six months? (Ignoring the possibility of free pirated copies on the net.) If a majority of software buyers wait until the "generic" version comes out, the profit margin of the "namebrand" company will be low. This reduces the value of the intellectual property, as before.

Meanwhile, protecting intellectual property becomes even more difficult. A company will have to remain ever vigilant for abuses of copyright protection, behavior cloning before the end of the six months, uncompensated use of innovations, and the company must still learn a whole new set of rules about the new form of intellectual property, all at the same time. In other words, this just leads to the same legal minefield as before, id est, endless litigation, endless filing of paperwork, wasted time checking the work of others for violations, and so forth. In short, profit margins will continue to fall in relation to rising legal costs, leading to the conclusion again, that the intellectual property in question becomes worthless.

Perhaps the most lucid writer on the subject is Esther Dyson. Her essay about intellectual property on the net brings up many of the points of this paper without the philosophical backing. For instance, she states "the price of most packaged software is tending towards (although not yet reaching) zero."[16] This is a specific instance of my general claim that intellectual property is worthless on the net. Dyson attributes this rightly to the easy reproducibility of intellectual property on the net, since "intellectual property that can be copied easily probably will be copied, destroying premium pricing in the middle of the curve."[17] Dyson suggests that companies should give up on the hope of profiting from intellectual property on the net, and instead choose alternate forms of profit like exploiting the client-support markets and other markets which are more personal, i.e., markets dependent upon the one-to-one personal interaction that the net alone cannot provide. In other words, "distribute intellectual property free in order to sell services and relationships."[18] Dyson's solution is the only one which addresses the fundamental incongruity of intellectual property with the net head-on.

In conclusion, information has become the most important commodity the world has to offer. It is bought and sold, traded and stolen, just like any other commodity. However, each of these actions is rooted in the implication that information can be owned, i.e., information is a form of property. However, in the "meta-bottle" of "complex and highly liquid patterns of ones and zeroes"[19] that we call cyberspace, intellectual property becomes irrelevant and worthless because of the ease of reproducibility of information on the net. This paper illustrated this by drawing a distinction between physical property and intellectual property, noting that the latter developed as a result of the introduction of currency, resulting in the inseparable union of the value of intellectual property with its monetary value. Observing that the monetary value of intellectual property on the net falls precipitously with every uncontrollable copy made, every lawsuit initiated, every man-hour spent searching for intellectual property violations, we see that as the monetary value of intellectual property tends towards zero, so does the very concept of intellectual property then tend towards irrelevance, at best--nullity, at worst. Introducing new forms of intellectual property or even continuing the use of prior forms becomes entirely pointless. The way of the future lies not in trying to restrict or control the propagation of information, rather in trying to pick through the sea of information to find what is truly important and necessary. As John Perry Barlow writes:

"Understanding is a critical element increasingly overlooked in the effort to turn information into a commodity. Data may be any set of facts, useful or not, intelligible or inscrutable, germane or irrelevant. Computers can crank out new data all night long without human help, and the results may be offered for sale as information. They may or may not actually be so. Only a human being can recognize the meaning that separates information from data. In fact, information, in the economic sense of the word, consists of data which have been passed through a particular human mind and found meaningful within that mental context. One fella's information is all just data to someone else."[20]

Works Cited

"Against Software Patents." The League for Programming Freedom. February 1991.

Barlow, John Perry. "The Economy of Ideas." Wired. March 1994.

"Communism." Encyclopaedia Brittanica Online (For Subscribers only). Version 1.3, September 1995.

Davis, Randall et al. "Intellectual Propety and Software: A New View."

Dyson, Esther. "Intellectual Property on the Net." Release 1.0. December 1994.

"Property." Encyclopaedia Brittanica Online (For Subscribers only). Version 1.3, September 1995.

Locke, John. "Concerning Civil Government, Second Essay."