Mgoren Thought Paper 2

Regulation constrains the range of plausible behaviors available to individuals and groups. This is true whether the regulation is enacted through law, code, or other means. Strong legal and technical protection of intellectual property¹ gives IP holders an increased degree of control over not only access to, but also uses of scientific and cultural content. Weak protection lowers constraints on those who wish to enjoy or build on science and culture. Zittrain asks the million-dollar normative question. “What is the scope of proprietary rights that ought to be created and enforced by the government in the service of innovation?”² To begin answering this, we must ask how different degrees of IP control affect innovation.

I suggest the following statements as pertinent givens. Strong IP protection provides financial incentive for incumbents and presumably for some startups. There are other financial incentives for innovation besides IP protection – first mover advantage, for example – but the length and type of protection are different. Patents encourage firms to share rather than hoard their innovations as trade secrets. The non-rivalrous nature of IP means that without IP protection anyone could build on existing IP. Innovation is often interactive, involving the contributions of many different parties, and sequential, standing on the shoulders of giants. Disruptive innovation generally comes from outsiders. Outsider innovation – by both individuals (by themselves or in cooperation with others) and startups – is fostered through access to knowledge in the form of scientific and cultural commons. Consequently, strong IP protection negatively affects outsider innovation in this way. Furthermore, motivations behind outsider innovation are varied.

Given the above information, it is apparent that IP protection, by limiting access to inputs, discourages innovation by individuals and groups that innovate for reasons other than financial incentive. IP protection presumably encourages innovation by well-funded and well-connected corporations, because they can fund research and development with the intention of securing a return on investment through control and royalties. IP protection both encourages and discourages innovation by startups. It encourages innovation through financial incentive, but it discourages innovation by protecting incumbents and limiting access to inputs. An essential question that requires field research is what level of IP protection maximizes innovation by startups.

This discussion raises a couple of ancillary questions. Regardless of its effect on innovation, should the increasingly important role of IP – and incumbents protected by IP – to the economy and the U.S. GDP be considered when making normative judgments about the proper degree of legal and technical IP protection? Secondly, how can a society enforce IP restrictions in a networked world without becoming a totalitarian state? Government security interests would like to redesign the infrastructure of the Internet and of personal computers to enable perfect accountability. Will powerful corporations assist governments in redesigning the infrastructure in order to enable more perfect IP control?

¹ Intellectual property in this essay refers to copyright and patent, not trademark.
² Zittrain, J. “Normative Principles for Evaluating Free and Proprietary Software,” 14

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p.s. If anyone knows of research on these issues, I’d love pointers. I know of Eric von Hippel’s work, but he doesn’t focus on the IP component.