Intellectual property (IP) rights like copyrights, patents and trademarks are given to scientists and authors to reward them for their contributions to the arts and sciences. These exclusive rights allow them to monetize their work. But piracy and the sale of goods that infringe IP rights are steadily increasing. From 2000 to 2007, trade in counterfeit and pirated products increased 7.6% among all globally-traded commodities – and this number excludes all electronic piracy.[1] In the European Union alone, customs agents intercepted almost 40 million infringing articles trying to be imported into the member states in 2012.[2] Yet, despite the profit loss that undoubtedly comes with infringement, scientists and artists continue to create signalling that (1) economic incentives are not the only driving force behind innovation, and (2) laws outside IP are supporting this innovation.
On Sunday, March 30th, the Information Society Project (ISP) [4] at Yale Law School hosted the Innovation Law Beyond IP conference to explore these issues. The event brought together some of the most reputable scholars in IP to discuss how the law can be used to promote innovation outside the context of private IP rights. The discussion centered around the trends of innovation already occurring without IP protection and looked to develop areas of law that can play a positive role in supporting innovation beyond the domain of IP law. Wikimedia Legal Fellow Manprit Brar followed this discussion to think about what lessons can be learned for Wikimedia’s legal work.
Yale Law School Professor Amy Kapczynski opened the conference by framing the discussion of innovation law as having no one focus. She discussed the many alternative areas of law to IP that are used to help sustain and encourage innovation, including:
- Procurement law – where governments can directly fund innovative work;
- Tax law – that can provide tax incentives to creative industries;
- Human capital law – where employment law and antitrust can be used to maximize innovation through the propertization of the “the inputs of innovation – people, their skills, experience, knowledge, professional relationships, creative and entrepreneurial energies, and the potential for innovating;”[5]
- Regulatory law – using regulatory mandates to force innovation (e.g. by requiring car manufacturers to develop technology that meet certain fuel efficiency standards);
- Tort law – imposing liability for failing to innovate (e.g. developing testing procedures to ensure products are safe);
- Contracts law – where parties can contract for innovate work instead of waiting for the future private IP rewards for the final product.
Current IP practices are quickly becoming outdated as the world changes in response to massive technological developments. It is now more important than ever to look to these alternate areas of law to encourage innovation.
Stanford Law Professor Mark Lemley discussed how technology like the Internet is eating away at the artificial scarcity created by IP law. The advent of the Internet significantly reduced the cost of distributing content and expanded the bounds of distribution worldwide to anyone with an Internet connection. The Internet dissolved the separation between the creation of content and the distribution of it by allowing you to do it yourself, rather than forcing you to engage a middle person for distribution. As a result, people are creating and distributing their content at incredible rates – and they are doing this outside of the marketplace and without extensive IP protection. Attempts to maintain this artificial scarcity are prevalent in our society as our legal systems go after file sharers, our schools began to teach kids not to download from the Internet, and our politicians propose legislation to give IP owners greater power over the internet (think SOPA). But, in the end, these efforts are somewhat futile.
So, what motivates people to create content and share it with the world without ensuring their IP rights in the content? What incentives are currently available to encourage people to do this? These are the types of questions that scholars are now considering and applying to determine how the law can be used to support innovation without traditional IP protections. Throughout the conference, one thing was very clear: the role of IP is smaller than once thought compared to other existing infrastructure that allows creators to produce and distribute their work.
Cultural production without using IP as the primary incentive
One of the first panel discussions delved into contributions to culture and the related IP concerns, which is something that doesn’t often factor into the discussion of IP in the US. IP law is not often seen as important to enrich our culture as much as it is seen as a commercial tool to maximize profit. However, an overarching theme found in the research of Sean Pager and Jessica Silbey is that reputational incentives like attribution and integrity are very important to creators. Additionally, it appears copyright is more important at the distribution stage and not during creation. Authors and scientists don’t create with the intention of using IP to make money for themselves, but they will use it afterwards to protect their work.
Michigan State College of Law Professor Sean Pager discussed alternative modes of encouragement within the context of indie films and looked at how these could be used to encourage greater cultural diversity in the film industry. Familiar models used to encourage creation in the indie film industry include copyright, but direct state funding, tax incentives and certain infrastructure support for creating the films are also available. However, all the current models of support involve the use of gatekeepers, which means there are a narrow set of decision makers that all hold their own biases, which may not be the same as those held by society. As a result, the content produced is not as diverse as the society it is meant to serve. Pager suggests the use of distributed models of encouragement dissemination to bypass gatekeepers, which will ultimately result in more diverse content production.
To further explore the motivations behind innovation, Jessica Silbey presented a chapter of her book “Real Accounts from Creators and Innovators: Making Do with an IP Misfit”. For her book, she conducted a study using face to face interviews to determine if current US IP laws actually function “to promote the progress of science and useful arts, by securing for limited times to authors and Inventors the exclusive right to their respective writings and discoveries.”[6] Silbey interviewed authors, scientists, engineers, IP lawyers and business executives working in the field to determine what role IP law actually plays in their work. Her results showed a misalignment between the motivations for innovation and the current laws that exist to promote that innovation. Creators of content and inventors are largely concerned with their reputation among their peers and are focused on having their hard work and time valued, which is not a concept protected by IP laws. You won’t get a patent on your new invention just because you worked hard on it. The interviews did confirm that creators want to be able to convert the value of their work into tangible things that can be protected. Future scholarship should look to how IP can support production rather than focusing solely on using it to incentivize creation.
Privacy and innovation: Forever in conflict?
The next round table discussion focused on the link between privacy and innovation. The general thinking surrounding these concepts are that they are in indirect conflict with each other. One perspective is that privacy restrictions should be loosened to provide greater access to information in order to have the freedom to innovate. If personal information is the fuel for the information economy, privacy laws can be seen as barriers to the flow of this information, which hinders innovation. Participants noted the correlation between stronger privacy laws and weaker innovation in the European Union in comparison with the US. The participants were careful to note that this correlation does not necessarily prove a causative relationship between the two.
Participants also discussed how privacy is needed to encourage innovation. Privacy is required to generate trust in online ecosystems and through that trust, innovation can be generated. The round-table discussion touched on issues of commercialized surveillance by information businesses like Google and Facebook that use consumer information to maximize advertising profits. In their discussion, participants noted a possible need for privacy rules to enhance competition and thus innovation. The discussion generally reflected many of the issues recently raised by Wikimedia community members in the debate around the new Wikimedia privacy policy.
Using prizes and grants to stimulate innovation instead of IP
Grants and prizes are now being looked to as alternative methods to IP rights in promoting innovation. Michael Burstein and Fiona Murray explored the governance challenges faced by prize competitions where innovation is being encouraged through direct rewards. The prizes currently awarded to the winners are not seen as substitutes to IP but complement existing IP rights. The researchers focused on the Progressive Insurance Automotive X Prize (PIAXP) in their study. They found the participants had many motivations aside from the prize money for competing, which included IP rights, but also the reputational benefits from winning as well as the simple desire to compete in a research challenge. Additionally, although the rules of the competition kept changing throughout, participants accepted these changes because they were perceived as legitimate and fair responses to how the competition was progressing. When thinking of ways that prizes can be used by the government to encourage innovation on a wider scale, the government is in a better position to value the innovation needed to ensure the prize is of a sufficient amount. The government has this advantage because they have an informational advantage in sectors such as public health, where innovation is most useful.
As a complement to the discussion of prizes, Bhaven Sampat held an intriguing talk about his paper “The Unexpected Political Economy of Serendipity,” which looks at the innovation that originates from grants. More specifically, his paper focuses on how research under National Institutes of Health (NIH) grants for specific areas leads to advances in other seemingly unrelated fields. His research consisted of connecting NIH grants with medical publications and then connecting those publications with patents and FDA-approved drugs using the Orange Book. Through these connections, Sampat was able to find the link between NIH grants and the commercially available pharmaceuticals created as a result of those grants. Sampat’s findings show that at least 30% of new pharmaceutical drugs seem to result from so-called “serendipitous discoveries.”
This research on medical grants and existing rule regimes governing them can be used to develop regulations to govern prize competitions. Burstein’s and Murray’s research that developing a perfect set of rules is unnecessary suggests it may be more effective to just provide any set of fair rules to garner the participation of innovators but not unnecessarily restrict the outcome of their research to allow for serendipitous discoveries.
Wikimedia Projects as a model of innovation beyond IP
Previously, the dominant theory in IP was that IP rights were needed to promote innovation and that without the protections afforded by IP law, the incentives to create would disappear. In reality, the reverse has happened. There are more books, videos, songs and content in general being produced than ever before. We can just take a look at the growth of projects like Wikipedia and Wikimedia Commons to see that. People enjoy creating and sharing their content online and because of the Internet, it is now possible for anyone with at least some talent to make a song or video at minimal cost. The Internet has ultimately unlocked the gatekeepers of creation. Before, if someone wanted to create music that people would hear, they needed a major record label to produce and distribute that music. But now, you can simply use your webcam to record your music and upload a video onto a site like YouTube and potentially reach millions of viewers. That is after all how artists like Justin Bieber, Bo Burnham, and Greyson Chance got their start! In sum, people create because they can, because they want to, because they are interested in it and not because IP laws will allow them to collect royalties 70 years after their death.
The Wikimedia projects can also be said to have unlocked the gatekeepers of creation as they allow anyone to become a volunteer and contribute to the writing of articles and contributing other content. Through the projects, individuals can choose to contribute as much or as little as they wish without having to get approval from a publisher or other middle person in order to distribute that content to the world. The underlying assumption of IP law is that we need to allow people to control what they create or else they won’t create. However, with the existence of things like Creative Commons (CC) licensing, this assumption does not hold. Editors on Wikipedia, for example, contribute original content to the sites under CC BY-SA licensing, which allows anyone to come and adapt their contributions (provided they give appropriate attribution). Essentially, editors relinquish control over their content upon creation – and they are okay with that because they support the mission of the project. The English-language Wikipedia alone has upwards of 4.4 million articles[7] and the encyclopedia is still growing every day.
Many of the conclusions drawn throughout the conference of how innovation occurs without IP can be seen through the way Wikimedia projects function. Creating under a CC license is consistent with the emerging literature that a significant motivator behind innovation is not the idea of holding exclusive IP rights over the product of that innovation. Instead, it is the recognition that comes with innovation that drives creators. All Wikimedia web pages that allow users to edit have a page history that clearly displays all the edits made to the page and the user who made the edit (should they choose to identify themselves).
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Through CC licensing, the requirement of attribution satisfies the need for recognition and thus encourages people to contribute their content for free for the benefit of others and the expansion of free knowledge for the world. The Wikimedia movement has also already started using prizes and grants to encourage innovation and expand content across several Wikimedia projects. For example, the Wiki Loves Monuments contests encourage the uploading of high resolution photographs of some of the worlds most beautiful monuments. The outcome of projects like this are beautiful images like those selected in the Commons Photos of the Year competition, being freely licensed to the world. The dedicated Wikimedia community is a prime example of how valuable innovation occurs outside of the IP context, proving that IP is not integral to innovation.
IP Law’s future role in innovation
Wikimedia projects function contrary to the economic IP theory that exclusive private rights to IP are needed to encourage creation, showing that current trends of innovation cannot be explained by existing economic models that underlie IP law. Efforts to simplify the motivations for innovation will consistently fail so regulation needs to continuously adapt to the dynamic nature of human innovation. As the scholarship surrounding innovation advances, it will be interesting to see what regimes are developed to encourage further innovation.
Manprit Brar, Legal Fellow
Yana Welinder, Legal Counsel
- ↑ http://www.jec.senate.gov/public/index.cfm?a=Files.Serve&File_id=aa0183d4-8ad9-488f-9e38-7150a3bb62be
- ↑ http://ec.europa.eu/taxation_customs/customs/customs_controls/counterfeit_piracy/statistics/index_en.htm
- ↑ The ISP is dedicated to developing the scholarship surrounding the impact of “the Internet and new information technologies for law and society, guided by the values of democracy, development and civil liberties.” http://www.yaleisp.org/about/history
- ↑ http://balkin.blogspot.com/2014/03/human-capital-law.html
- ↑ https://en.wikipedia.org/wiki/Wikipedia:Size_of_Wikipedia
- Article I, Section 8, Clause 8 of the United States Constitution, https://en.wikipedia.org/wiki/Copyright_Clause
- ↑ Similarly, technologies like the 3D printer have removed the separation between the act of design and the act of manufacturing a product so that you can design and manufacture products yourself.
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