September 14, 2002  ·  Lessig

Ted Shelton has a careful and fair critique of my response to his original critique of my proposal for reducing state support for oblique creativity. We are completely agreed about one important point: That the ultimate question here is which system provides the best incentives to create and spread knowledge.

As I read Ted’s response, the only dispute is about whether my condition upon getting copyright protection (that you escrow source code which, when the copyright expires, is free) would be too much of a penalty for software authors that they would instead choose private protection (secrecy) over public. That’s a fair question to explore — as an empirical question — and I can agree my proposal makes no sense if we have sufficient reason to believe it would have that effect.

The part in Ted’s response I don’t get is this:

[a]Thus the inventor of oblique IP would be compelled to divulge the “secret sauce” of his invention and would never be accorded the same choice between some value offered by the state (a “limited time” monopoly in the case of patents) vs. the ability to do business without such a monopoly (a “trade secret” with the possibility that the secret sauce would be reverse engineered). [b] Furthermore, as software is infinitely duplicable for nominal cost, the inventor would have all value in his invention stripped from him by the State at the end of the “limited time” of protection, as the State would become the distributor of his invention. The corollary with a physical product would be for the State to give everyone a free cotton gin when Eli Whitney’s patent ran out.

I don’t get [a] because, again, I think I am offering exactly the same choice. If you want the “limited time” monopoly offered by the state, then you must escrow code; if you don’t, then go wild with secrets and protecting against reverse engineering. The structure of the offer is no different; only the terms.

I don’t get [b] because from an economic perspective, for a competitor, there’s no real difference between giving the world all the information needed to build a cotton gin and giving the world all the information needed to write 123!. Whatever the cost of production (zero or lots), from a competitive perspective, everyone faces the same information cost (zero). Secrecy keeps the information costs high (only I know how to make X, you would have to pay lots to figure it out); patents (properly administered) reduces the information costs significantly, but substitutes a state backed monopoly (anyone can figure out how to make a cotton gin, but only X is allowed); after the expiration of the patent, everyone has access to the same information, and because the monopolies are removed, everyone can compete equally.

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