Dan Paluska

The World Question Center and Intellectual Property
January 7, 2009, 1:18 pm
Filed under: art, information, opensource | Tags: , , , , , , , , ,

The world question center is an annual event where edge.org asks most of its authors and affiliate scientists and artists to answer a “big” question. This year’s question is “What will change everything?” and specifically, “What scientific discovery will change everything?”

All the answers are short (1000 word cap) and free of hyperlinks. I decided to take the question and the format to heart. Here is my personal take on the matter. (Thanks to eva, jeff and eric for feedback.)

Is Intellectual Property a Market Inefficiency?

Someday we’ll prove it. Intellectual property is a market inefficiency and it slows us down. We continue to treat information like a physical resource that has limits. It’s not. So can we get over information ownership? No patents. No copyrights. No non-compete contracts. No licensing. No infringement. No legal wrangling over information of any sort. The cost for anyone to replicate and distribute information is essentially zero. No value is lost. It’s not land. It’s not gold. You can’t eat it. Squatting over information is rude. Squatting protected by our governments is even worse. Wikipedia, Linux and plenty of other online projects are flourishing without hoarding of information. Can the rest of businesses in the service, media, and physical product world follow suit? Absolutely.

What would happen if the music and software industries took all their IP protection energy, money, and creativity and used it to better serve customers? Could they give away all their intellectual property and stay profitable?

Many are well on their way already. Small businesses, hackers, artists, makers, scientists, and innovative teachers have been sharing for a long time. When all follow, the benefits to education, the economy, the environment, food, and healthcare will all be significant. Elimination of IP creates a long term and local mindset. Ideas will cease to be king and we’ll openly admit what we already know, “the current best thing is going to be replaced by something better.”

No intellectual property means a better database of our successes and failures, a better feedback loop for learning. Every customer adds input, every company makes refinements. All the information is public. The current focus on ideas, patents, copyrights and “final” products distorts the true goals of problem solving. Companies spend their time “selling” objects and ideas to customers rather than collaborating with them. We will reward companies on their ability to process information rather than their ability to horde it.

In theory, a flatter world is better and we appreciate the steps the web has taken us in that direction. But so many of our long cherished views about ownership run counter to this goal. Old models are flawed. Currently customers and businesses worship the product but we want both to take part in the process of improvement.

Let’s think about what might happen if we get there. Physical resources will always cost money and making great products will always take time. Those who deliver value through goods and services will still be compensated. We already do so in long standing industries where patents and copyrights aren’t as important: guitars, bikes, cars, and restaurants for example. In these and other fields, good products bubble to the top without IP protection. For the more IP heavy research or culture based industries, we would likely see a division between research and production. Large research efforts would be taken on by a collaboration between local independent and academic labs, like the current science and arts establishment. Local and international fabrication companies will use this research and the demands of their markets to create products. The process of improvement will become as important as the products. The focus of the economy will shift from product to process.

With no IP, there will be less reason to have a big company to hold all the secrets. Local production and service companies are likely to become more important than the global multinationals. Small businesses will tap into the wealth of knowledge from others around the globe engaged in similar activities. A loose network will replace the massive monoliths that so frequently fail us in spectacular fashion (after their many years of dominance.)

Is this crazy? If you can’t control your branding and you can’t prevent copies, will the truly good products bubble to the top? Will no-name ripoffs take the place of our cherished brands? If there is no chance of a patent, copyright, or a get rich quick market hit, will the innovators continue to innovate? Where will the research money for drug discovery come from? Can the removal of intellectual property lead to a sane market that is less prone to abusive behavior or will it make it worse?

Let’s step back for a moment. In parallel to the development of the free information distribution miracle that is the web, we’ve also come to better understand the inherent randomness and preferential attachment that is a fundamental part of our highly complex and networked society. We know that success in both scientific discoveries and cultural phenomena is largely random. Once you achieve a certain level of proficiency, being in the right place at the right time makes all the difference. Those who rise to the top are certainly talented and hard working but they also have luck. And once they get to the top, the system usually allows them to stay there for no cost until the crash comes and wipes them away. So everyone is working like crazy to get the hit, and then they can have the good life. We glorify the ones who make it and forget about the many many more who don’t. But when it is as random as we now know, couldn’t there be a better way to structure the rewards? Could we think more about the general process of improvement rather than products? Could alternate incentives lead to less consolidation of wealth and more overall innovation and human satisfaction? Talented and hard working individuals will still rise above, but not as far and it won’t be so capricious. Great products will still reach the market but they will be more flexible and sustainable.

Information is now free and it’s not going back. The sooner we quantify the advantages, the better off we will be. With no intellectual property we can stop focusing on the output (the product) and start directing our attention to the feedback loop (the process). We can remake the economy into a flexible, evolving, collaborative entity.

3 Comments so far
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i love this perspective. the question may boil down to figuring out how to objectively define value outside 2 parties setting price in a classic supply/demand market system. we know that information is valuable (whoah, this is a long subject). but in our current financial structure, infinite supply brings your price down the demand curve, until price is zero.

anyhow, creative commons and open source efforts try to embolden this collective commons final product, and these processes are examples of what you’re talking bout. other mechanisms may be to allow for copyrights, but limit the defense of “intellectual property” to something more sane like what the patent system does.

and if you can figure out how to put a price on things in the collective commons, then you can reward more broadly those that participate in the process of increasing it’s value.

but how to build a financial system on the economics of plenty, rather than the economics of scarcity?


Comment by ken from california

[…] opensource People often react to the story of “free information” or “no intellectual property” as something akin to communism or socialism. It’s true that with no intellectual […]

Pingback by Free Information. Is this where the right meets the left? « Plainfront.com/Dan Paluska

Nice post…I loved it.
It is throwing light on some points of Intellectual property very effectively. Good. You can check out other related question regarding Intellectual property and patents. just open this link http://inventiontopatents.com/

Comment by katreena

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