September 6, 2005  ·  Lessig

Joseph Stiglitz, Nobel laureate in economics, on TRIPS:

“Intellectual property is important, but the appropriate intellectual-property regime for a developing country is different from that for an advanced industrial country. The TRIP’s scheme failed to recognize this. In fact, intellectual property should never have been included in a trade agreement in the first place, at least partly because its regulation is demonstrably beyond the competency of trade negotiators.”

(Thanks, Ren)

  • http://gnuosphere.blogspot.com Peter Rock

    Welcome back Larry. Will you be replying to any messages within the threads or will you simply stay in lecture mode and only create top-level posts? ;)

    Hmm….TRIPS….

    Well, it sure is a great way to gather more “Intellectual Property” believers and, on the surface, appear really generous.

    I hope Michael Moore covers this incident in his next film.

  • three blind mice

    first, welcome back from vacation professor! spending a month with your family away from work is the sort of “family value” that all of us would do well to emulate.

    this is a poorly written article. for an economist it is very a poorly written article. for a nobel prize winner, it borders on negligent.

    The economic rationale for intellectual property is that faster innovation offsets the enormous costs of such inefficiencies. But it has become increasingly clear that excessively strong or badly formulated intellectual property rights may actually impede innovation and not just by increasing the price of research. Monopolists may have much less incentive to innovate than they would if they had to compete. Modern research has shown that the great economist Joseph Schumpeter was wrong in thinking that competition in innovation leads to a succession of firms. In fact, a monopolist, once established, may be hard to dislodge, as Microsoft has so amply demonstrated.

    what on earth is he talking about? whilst it may be true that microsoft’s market hegemony gives redmond less incentive to innovate this, of course, has little or nothing to do with intellectual property. microsoft’s market dominance is the result of other well-known historical factors. patents played absolutely no role in microsoft’s rise to hegemony. if anything, microsoft’s copyrights may have reduced their market presence. if windows could be freely copied and distributed, it is likely even more PCs would be windows based and few people would bother with alternatives.

    Stiglitz also overlooks an important fact when he says:

    Indeed, once established, a monopoly can use its market power to squelch competitors, as Microsoft so amply demonstrated in the case of the Netscape Web browser. Such abuses of market power discourage innovation.

    what? *all three mice rub eyes in disbelief*

    the nobel laurate is confusing the monopoly of market dominance with the monopoly rights conferred by a patent. microsoft’s unfettered ability to copy netscape’s navigator (which itself was a copy of mozilla) combined with their market dominance is what buried netscape.

    netscape is an example of what happens when you do NOT have strong intellectual property rights; the market leader breaks your levees, floods your business, and leaves you with nothing but a bad smell.

    the fact of the matter is that if netscape had been able to patent key aspects of their browser technology and thus prevented internet explorer from achieving the same level of performance (their copyright was obviously useless) the browser market (and the software industry) might look very different today. at the very least, netscape would not be an object for disaster relief and pity.

    finally, ecomonists dissing schumpeter is sort of like hipsters not liking coldplay: it shows how cool you are, but not how much you know. schumpeter’s assumptions regarding innovation may have been overestimated, but his observation about the word “monopoly” still seems quite relevant. as schumpeter wrote in capitalism, socialism, and democracy (1942):

    “why then all this talk about monopoly?…economists, government agents, journalists, and politicians in this country obviously love the word because it…is sure to rouse the public’s hostility.”

    it seems stigler is, rather than engaging in a thoughtful analysis of this problem, simply trying to rouse hostility.

  • Peter Mogensen

    microsoft’s market dominance is the result of other well-known historical factors.

    Yes… and the enormous networks effect which governs the software market.

    patents played absolutely no role in microsoft’s rise to hegemony.

    … and yet Microsoft insists that software patents are essential for small companies in order to compete in a Microsoft dominated market and argu that because of this we should widen patent protection for software. ….Hmm… something smells fishy.

  • rodander

    The gist of the Stiglitz article seems to be that the best IP regime uses patent rights to incent investment in research and development, so that important products are innovated and produced, and then yanks away that protection, like a matador’s cape, so that “the ability to use others’ ideas” is not slowed down.

    I’m afraid we can’t have it both ways. At least after the first time that IP rights are yanked away (fool me once, shame on you — fool me twice, shame on me). When incentive for R&D investment disappears, there will be far fewer ideas that others can “use”.

    The Stiglitz rationale might work so long as all new drugs are based on herbs well-known for medicinal properties, so long as all computational technology is based on fundamental math concepts, and so long as all electronics inventions start from Maxwell’s Equations. Not so realistic, I think.

    BTW, don’t mistake me for someone who favors TRIPS. I see exactly no valid rationale for global harmonization of IP law. Each nation should derive its own IP laws in its own best interests, based on its own public policy. Developing countries should be able to derive their IP laws to foster their own rapid development, while the developed world may follow a different model. That’s what sovereignty is all about.

  • http://gnuosphere.blogspot.com Peter Rock

    Rodander:

    When incentive for R&D investment disappears, there will be far fewer ideas that others can “use”.

    ?!

  • http://gnuosphere.blogspot.com Peter Rock

    rodander:

    Each nation should derive its own IP laws in its own best interests, based on its own public policy. Developing countries should be able to derive their IP laws to foster their own rapid development, while the developed world may follow a different model. That’s what sovereignty is all about.

    ?!

  • Peter Mogensen

    netscape is an example of what happens when you do NOT have strong intellectual property rights

    You have utterly misunderstood software.
    Sure, If Netscape had a patent, MS could not have developed a browser. But that’s about as far as the truth in you claim reaches.
    If Netscape had a patent, who says the WWW would ever have gotten the support it got? Who says innovation in browsers would have been the was only one browser and no competition on features?

    What killed Netscape was not lack of a patent, but lack of open standard compliance and abuse of a dominant position by MS.

    Anyway… Patents are not meant to enable one company (like Netscape) to control an entire infrastructure and get rich without competition. The patent system is in place for the long term benefit of the society. This is actually a good example of that society got the most out of NO patents on software. The Mozilla product is far from dead and is one of the most innovative browsers in recent years and competition is actually returning to the market after focus on standard compliance has been increased.

  • http://commonsrights.blogspot.com/ poptones

    microsoft’s unfettered ability to copy netscape’s navigator (which itself was a copy of mozilla) combined with their market dominance is what buried netscape.

    Netscape’s Navigator wasn’t a “copy” of Mozilla, it was Mozilla. Netscape bought the talent and there really wasn’t any force given to the notion of “open source” of the GPL fashion at the time.

    But Internet Explorer had nothing to do with Mozilla save for it being an internet web browser. IE, when it originally appeared, was pretty much built entirely upon Mosaic. Mosaic was free software of the BSD type – it was software given to the world so that anyone could use it in any way they like. Microsoft, in order to speed to market a solution to a problem it did not even believe existed for many months, lifted this free Mosaic core and wrapped their operating system around it (just as they did with BSD when they later needed a network stack).

    Netscape, believing itself to tbe the 800lb gorilla on the block, refused to participate in the W3C standard process, which made it an enemy of a lot of people who wanted to see the internet evolve along open standards. Microsoft, ir order to ally itself to a marketplace it had for too long ignored, publicly embraced the W3C and even offered some of its technology for free adoption.

    The inability of Netscape to replace its bloated and buggy v 3.0 browser core – ie to innovate – along with its arrogance made Netscape a tire toy to the real 800 lb gorilla. Microsoft, ironically, really did innovate in this market place for a while. Not just with a web browser but with a whole suite of tools including a (now dead) chat browser that still has no equal in the world, free or otherwise.

    This Dave Siegel essay, written as it was happening a decade ago now, is still one of the best chronicles of the demise of Netscape. (I would suggest all the regulars in these discussions read it, as it seems clear some of you do not even know the history that brought us to this place from only a decade ago.)

    Note that’s Netscape – not Mozilla. the fact Mozilla still is competetive is a testament to open source development, not to Netscape’s getting religion. Indeed, Netscape’s interpretation of Mozilla was and is still junk. The number one Mozilla browser on the market today is built on a rewrite of the open source rewrite, a stripped down expression that is the antithesis of the designed-by-commerce-committee offered by Netscape itself.

  • http://commonsrights.blogspot.com/ poptones

    My Bad…

    I thought the roots of IE were in a commercial web browser, but I also knew it was based on Mosaic (“Mozilla” was obviously meant as a name competitor to this browser – “it eats Mosaic”) so I hit up google for an answer. Turns out Spyglass Mosaic wasn’t free Mosaic.

    So, IE’s roots have always been proprietary – but as I said, IE was never based on Mozilla, clone or otherwise.

  • ACS

    To Three Blind Mice

    Once again I have to agree with you. Microsoft is not the bad guy because of Intellectual Property Rights. Most of its nefarious behaviour stems from attempting to exercise a monopoly where it has no right to do so. Competition law cases (Anti-trust for the Americans) are just an example of its many misuses of market power.

    Of course, the radical notion of intellectual property rights that distinguishes it from almost every other commerical right is that they are a monopoly right as opposed to an individual and/ or proprietary right attched to a certain physical object or person. The mere definition of these rights may be puzzling and lead to confusion about thier effect on the free capitalist market, however, we can rest assured that there is strong policy consideration supporting thier implementation.

    On the other hand, I have to agree with Peter Morgansen – the concept of software patents is a little odd to those outside the States. A patent is so much wider than copyright that gratning a patent monopoly over software could easily stiffle an industry and innovation.

    Generally “down under” a software patent is only available if it radically alters how the computer is used – eg a program that converted english characters into chinese CCOM v Jiejing or allowed a computer to display graphics in 3 dimensions IBM v Registrar of Patents. The Australian policy has allowed development of a relatively strong software industry that shares many of our home grown innovations.

    Of course, as most new technology comes form the US, with whom we now have an FTA, the party has been ruined. We either take up a loose definition of patent and protect our home grown industry or we continue to have an intellectual property deficit.

    The international deficit in Intellectual Property doesnt just occur in relation to Microsoft it also occurs in relation to smaller companies that take up Software Patents in the US.

    I think this is the point of Mr Stiglitz; where a market is producing intellectual property in competition with a larger more advanced market and has weaker monopolies over that intellectual property, the weaker market will suffer economically and technologically.

    Australia may suffer a little but third world countries wont even get a start under the current regime.

  • Peter Mogensen

    Generally “down under” a software patent is only available if it radically alters how the computer is used.

    Is that the official definition? It seems very easily abused.
    The European Patent Office operates with something called “technical contribution”, which have been abused to allow all sorts of software and businessmethod patents. “radically alters how the computer is used” seems at least equally abusable.

    – eg a program that converted english characters into chinese CCOM v Jiejing

    You mean translation? I agree that such a patent probably in it self wouldn’t give many problems, since it would not influence interoperability. But still… it could be infringed upon with a pure software product. How do you define the limit of patentability?

    or allowed a computer to display graphics in 3 dimensions IBM v Registrar of Patents.

    Do you mean some kind of hardware 3D display, or a software implementation of 3D graphics, like OpenGL? I’m not sure how this could be an example of a “good” software patent.

  • ACS

    TO Peter Morgansen

    which have been abused to allow all sorts of software and businessmethod patents. “radically alters how the computer is used” seems at least equally abusable.

    Its probably not the best explanation but – as you are aware – a patent is awarded if an invention is found to be new and contain an inventive step and be of some general utility. The policy behind ‘radically alter how the computer is used’ is the novelty or inventive step in the technology.

    This means that an applicant has to show that the intangible invention – being the software – contains an inventive step in how it makes the computer perform a function and contains novelty in what it makes the computer capable of doing.

    It is a very difficult burden if you consider that merely programming in an accepted language is unlikely to result in the necesary leap from the accepted technology.

    Anyway – the standard is still harder than the US – trust me on that.

    You mean translation? I agree that such a patent probably in it self wouldn’t give many problems, since it would not influence interoperability. But still… it could be infringed upon with a pure software product. How do you define the limit of patentability?

    THe limit of patentability of software is the same as the limit of patentability of any invention. THe law does not change becuase the invention becomes an intangible. There remains a single sandard. This is not to say that the interpretation of the law or its effect is viewed through the same eyes. Intangibility is of course taken into account.

    Do you mean some kind of hardware 3D display, or a software implementation of 3D graphics, like OpenGL? I’m not sure how this could be an example of a “good” software patent.

    Sorry about that but the case is from the mid eighties when hardware/ software for 3d imaging was still new. I think the patent was in terms of displaying three dimensional maps in visual format.

    I dont think we should abandon our learning of patentability generally when we look at software, the same rules apply, albeit to a different environment

  • Peter Mogensen

    To ACS:

    I dont think we should abandon our learning of patentability generally when we look at software, the same rules apply, albeit to a different environment

    Let me quote the European patent convention:
    (1) European patents shall be granted for any inventions which are susceptible of industrial application, which are new and which involve an inventive step.
    (2) The following in particular shall not be regarded as inventions within the meaning of paragraph 1:
    1. discoveries, scientific theories and mathematical methods;
    2. aesthetic creations;
    3. schemes, rules and methods for performing mental acts, playing games or doing business, and programs for computers;
    4. presentations of information.

    So we’re not talking about abandoning. There’s just some ideas which are not patentable, because they are not regarded as inventions in patent law. Often the expression of those ideas are instead protected by copyright. This includes litteracy, music, architecture … and software.

    There are good reasons not to allow patents on products which fall under copyright.
    Would you like patents on ideas for music too, if they just were “radically” different?

  • Rob Myers

    whilst it may be true that microsoft?s market hegemony gives redmond less incentive to innovate this, of course, has little or nothing to do with intellectual property

    It has everything to do with intellectual property.

    Microsoft have never innovated. Anyone invoking Microsoft when discussing innovation is simply confusing consolidation with creativity.

    However, there was a time when Microsoft were expanding. At that time they were less concerned about intellectual property, as it could have been used to prevent their expansion by competitors (as you yourselves argue regarding Netscape).

    Now Microsoft are a monopoly (according to the US courts), they are concerned about intellectual property. They wish to use it defensively, to create a territory that excludes competitors (whether hippies or suits). Incidentally, this idea of territory is important, as it shows how regressive “intellectual property” is in terms of economics.

    This is why intellectual property’s limited monopoly and Microsoft’s illegal monopoly are a natural fit: the latter can now use the former anti-competitively. Smaller companies cannot get more than a few patents a year Microsoft can get more than a few thousand.

    Why create actual products when you can patent entire classes of products and just sue anyone who accidentally creates them for real?

    The only people who can afford to produce are then large companies who can afford to cross-license patents. Patent cross-licensing becomes a potlatch economy of insanely expensive and pointless mutual gifts.

    (BTW: Mozilla was the copy of Netscape. And both Netscape and IE were copies of the Free Software programme Mosaic. Oh, the evils of the commons! :-) )

  • http://www.tekstadventure.nl/branko/blog/ Branko Collin

    In fact, intellectual property should never have been included in a trade agreement in the first place, at least partly because its regulation is demonstrably beyond the competency of trade negotiators.

    I was unaware that the competency of trade negotiators should be a determining factor in what tradable goods should be part of these negotiations. Wouldn’t it be handier to select negotiators based on the subject of the negotiations, rather than setting those subjects based on the skills of the negotiators? Next time Joseph Stiglitz is going to argue that the police should not negotiate with hostage takers or with folks that want to jump off a ledge.

    BTW, your blog is still broken, in that it doesn’t carry over the captcha to the preview screen; and in that it doesn’t remember my name, even though I tell it to do so.

  • http://commonsrights.blogspot.com/ poptones

    BTW: Mozilla was the copy of Netscape. And both Netscape and IE were copies of the Free Software programme Mosaic. Oh, the evils of the commons!

    Mosaic was “free” only for non profits – it was not “Free Software” at all. It was spawn of the NCSA, and the NCSA signed over commerical rights to Spyglass, who then sold the commercial version of Mosaic to Microsoft and about 100 other companies.

    Mosaic was never Free Software. I thought I made this point clear in “My bad” but I guess it still wasn’t – so now I try again. It wasn’t “of the BSD type” because NCSA prohibited many uses or resuses of the software except under license.

  • http://commonsrights.blogspot.com/ poptones

    By the way…

    Microsoft have never innovated. Anyone invoking Microsoft when discussing innovation is simply confusing consolidation with creativity

    This is stupid and I now am taking an oath to henceforth flame into the ground anyone I see repeating this nonsense. If Microsoft has never “innovated” then neither has Apple nor any of the geek horde behind linux – for it’s all the same stuff – and linux potentially even moreso. KDE and kparts are little different than Explorer and Microsoft’s build tools. and until only recently when the Gnome UG began discouraging the use of nautilus and “folder views” as a generic shell wrapper for any and all file system i/o, Gnome was also in that camp. Ironically, that same desktop (Gnome) is now increasingly under pressure by certain forces to adopt mono – a derivative of Microsoft’s .NET programming environment – as its “standard desktop language!”

    What would you consider “innovative?” PHP scripts that colorize others people’s images? An operating system built on BSD? A rap remix of We Are the Champions?

    I do not use any Microsoft software in my home right now. My router runs IPcop, my laptop runs ubuntu and so does my desktop, and it’s been this way for quite some time. I’m definitely no Microsoft fanboi, but to say “Microsoft has never innovated” diminishes not just Microsoft, but myself and everyone else who also contributes to the open source community. If you want to demean yourself, feel free – but don’t try to drag the rest of us down with you in your pursuit of a rather dull point.

  • ACS

    To Pete Morgensen

    I see that despite your recitation on European Patents that patents are still awarded for the innovative and novel internal logic of computer programs where it moves radically from the prior art base. IE a risc or similar program used on a tertiary processor instead of the good old binary would qualify. I think also there is the integration of outside technology to software which is also protected.

    The statement “ There’s just some ideas which are not patentable, because they are not regarded as inventions in patent law.” with respect to patent law is absolutely flawed. An invention, whether tangible or intangible, is patentable if it fufills the relevant definition.

    The European state as I understand it is merely a guideline which does not prohibit an invention in the form of a computer program rather it prevents programs being patentable because of the results or operations that they can achieve.

    This was a policy concern from the beginning because a computer program by its nature within the artificial world can change or manipulate that world by its very function as opposed to physical objects that must do ‘something’ to change its world. The policy is not because software is protected by copyright – give me a break.

    As a side point I note that there are currently 567 awarded patents in Europe including software.

    In particular I note the various inventions used for ‘switching’ mobile phone networks and automatically and remotely updating software.

    Check out these beauties

    SOFTWARE APPLICATION, SOFTWARE ARCHITECTURE AND METHOD FOR THE CONSTRUCTION OF SOFTWARE APPLICATIONS, ESPECIALLY FOR MEASURING SYSTEMS
    EP1516250 – 2005-03-23 IPC: G06F9/46

    MOBILE COMMUNICATION TERMINAL, APPLICATION SOFTWARE INITIATING APPARATUS, APPLICATION SOFTWARE INITIATING SYSTEM, APPLICATION SOFTWARE INITIATING METHOD, AND APPLICATION SOFTWARE INITIATING PROGRAM
    Publication info: EP1452961 – 2004-09-01 IPC: G06F9/06 ; G06F9/445

    And my personal favourite.

    SOFTWARE PROTECTION BY MEANS OF SOFTWARE MODIFICATION
    Publication info: EP1386210 – 2004-02-04 IPC: G06F1/00

    The code of this software has been provided with the patent description, however, the patent is not made up of the software. That is just one step. Despite this the software remains patentable when considered in the larger steps taken to carry out the invention.