CTRL + C: How can ideas find freedom in a digital world?

I propose a debate! The place: The NOL podcast. The people: anyone with fresh takes on copyright and patent in software (and who contacts me). The question: what are actions that businesses can take to carry out a vision of open collaboration via IP strategy?

As a former law student and current software company CEO, I have become frustrated with how abstract and academic IP discussions are. I know enough to be dangerous, and actually want to center in on: how can people like me use IP strategy to make our projects more open to collaboration, without making them exposed?

I’d love to get strategic advice in a debate environment. I’d also like to lay out below the IP landscape as I understand it to exist, and recall to some of the great IP visionaries of the early internet days, especially the Grateful Dead lyricist-turned-IP scholar, John Perry Barlow. Enjoy, and I will update this post once Brandon lets me set a date!

Copyrighting Code: Function masquerading as form

When I was taught about intellectual property, I learned about Google vs. Oracle, a case where the US Supreme Court considered the question, “Are API’s functional?” This may seem a strange question (when I ask computer scientists this question they always laugh helplessly), but the background is: According to US Copyright Law, “In no case does copyright protection . . . extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work.” This means that code may be copyrighted if descriptive but not if a functional, ‘useful article‘–and so, the esteemed Court needed to decide, effectively, is the Application Program Interface (API) code that allows softwares to request or send data purely decorative?

Until the Supreme Court, thank god, ruled that copying API code was in fact a “fair use” of API’s, the lower court’s ruling had actually held that: (1) API’s are creative, nonfunctional, and copyrightable, and (2) Google owed Oracle money for their impudent CTRL + C of API code. I’m relieved Google won, but I was totally shocked that the Supreme Court reversed only part two of the lower court decision, leaving part one unaddressed. I actually was speechless, because if they recognized it was a fair copying (in the case that API’s were useful), how could they still allow Oracle to claim copyright over them in the first place?

This is just one of the ways in which law school showed me that IP law had a reckoning, from the 1990’s to today, on how it should live on in a field that has undermined its very purposes for existing. By that I mean, if intellectual property keeps people from copying inventors and thus reducing their benefit (compared against patent-granted artificial monopolies) or raising their cost (from the cost of printing, one of the key justifications of copyright), how will it live on in the world where printing is free and inventions benefit more from CTRL + C than they suffer?

Patenting Code: Calling Dibs on How Everything Works

While my copyright classes mostly shocked me by showing me how much we lie and pretend useful things are ‘creative’, patent classes astounded me in the ways companies would assert that they invented general practices. Patents are only supposed to be eligible if they are novel, useful, and non-obvious, and they cannot cover nature, abstractions, or mathematical formulas. Or, rather, that is what the rules say; the actuality is that patents constantly used to monopolize basic processes like “one click” buying or “rounding the edges of a square.” However, rather than pick on low-hanging fruit, I’ll note that the current leading case in software process patents is Alice v. CLS, which like Google v. Oracle, struck down IP for a very limited reason that betrays the nonsense that patents are in a digital world.

Alice Corp. had patented a software method for financial trading systems to reduce ‘settlement risk,’ the risk that one party does what they are supposed to do and the other does not. This sounds fancy, but if you read the early opinions, even the district court judge noticed that the patent basically covered the idea “of employing an intermediary to facilitate simultaneous exchange of obligations in order to minimize risk.”

This made it all the way to the Supreme Court, and thank god, they decided that Alice failed the following test of patentability of methods related to abstract ideas: (1) does the software method contain an abstract idea? (2) If yes, did the patenter add an “inventive concept” that gives the idea “something extra.”

In case you were wondering, yes, they literally said “something extra.”

Thus ended a multi-year lawsuit over whether Alice could stop other companies from minimizing risk. As if we need any more proof that judges and lawyers simply cannot understand how coding works, or how invention works, or how natural law works, one appellate judge recommended extremely broad patentability of general principles, abusing the Einstein quote of “even gravity is not a natural law” to imply that, maybe, Einstein could have patented general relativity?

These sorts of vague precedents that leave the door open to patenting basic processes. Outside of software, there are a Myriad of cases (pun intended, about a case where the Supreme Court ruled that excised DNA was patentable because Myriad figured out how to slice it) where judges let companies patent things that stretch credulity. It makes me wonder, especially given that research on the history of patents in the physical world shows that patents often hamper and harm innovators that make me question what we restrict in the name of rewarding innovators. In DNA, patents have overreached in an attempt to control a growing, organic, copying engine. In software, they often do the same, leaving developers in fear of the power of CTRL + C.

The shared vision: Wine without Bottles:

In setting up this debate, I am stealing the creative work of IP pioneer and Grateful Dead lyricist, John Perry Barlow, who posed the following riddle:

If our property can be infinitely reproduced and instantaneously distributed all over the planet without cost, without our knowledge, without its even leaving our possession, how can we protect it? How are we going to get paid for the work we do with our minds? And, if we can’t get paid, what will assure the continued creation and distribution of such work?

Barlow’s central question cuts to the very core of IP. If the goal of restricting CTRL + C was to reward innovators for generating copies of their work, what is the point of these restrictions when generating copies is free? If we no longer must pay to produce bottles to hold our wine, and it flows forth as a bounty from the springs of invention, should we force this flood to be contained at all?

The riddle has but one answer, and I cannot say it better than Barlow; anyone who is interested should read his whole treatise on Wine without Bottles here. I will add only that, as an inventor, I know that his vision of bottlers minding their own business has not come to pass fully, but that the growth of open-source projects shows that bottling code does not, in fact, age it like fine wine. In fact, if you follow the money, “Smart developers like to hang out with smart code. When you open-source useful code, you attract talent.” This gives me hope, and I want to build on that hope with ways to make his vision a reality.

Let’s debate the best way to enact a vision, rather than the vision

As an inventor considering how to build a successful software company meaning that I literally face the question of how to engage with the IP system, this question is one in which I am deeply interested. I’d like to hear fresh takes on how entrepreneurs can realistically act when deciding, should we bottle our wine? Should we allow other people to bottle and sell it? If my goal is to bring wine to those who are thirsty, how can I think about bottles?

I’m looking forward to what I hear, and as a bonus, I’ll give you my most inspiring Barlow quote, from his Declaration of the Independence of Cyberspace:

Cyberspace consists of transactions, relationships, and thought itself, arrayed like a standing wave in the web of our communications. Ours is a world that is both everywhere and nowhere, but it is not where bodies live.

We are creating a world that all may enter without privilege or prejudice accorded by race, economic power, military force, or station of birth.

We are creating a world where anyone, anywhere may express his or her beliefs, no matter how singular, without fear of being coerced into silence or conformity.

Your legal concepts of property, expression, identity, movement, and context do not apply to us. They are all based on matter, and there is no matter here

. . . .

You [world governments] are terrified of your own children, since they are natives in a world where you will always be immigrants. Because you fear them, you entrust your bureaucracies with the parental responsibilities you are too cowardly to confront yourselves. In our world, all the sentiments and expressions of humanity, from the debasing to the angelic, are parts of a seamless whole, the global conversation of bits. We cannot separate the air that chokes from the air upon which wings beat.

Abstract Ideas Don’t Deserve Patents [NY Times]

In preparation for something special that I will finally complete this week (Rothbard willing) lets talk about this editorial from the New York Times.

 

The article starts accurately enough explaining the US government’s monopoly power of ideas saying:

The Constitution gives Congress the power to grant inventors a temporary monopoly over their creations to “promote the progress of science and useful arts.”

 

I am actually shocked at the strong language used here, the four letter word “monopoly” is rarely used in reference to any government service.  At least in polite company.  I would also like to point out the subjective language quoted from the constitution.  “Useful arts”.  Useful to whom?  To the inventor?  To consumers?  To the government?  To humanity?  Like most state activities the ability to decide what is “useful” is left to bureaucrats in service to the government rather than in the free market where useful services will generate profits and those that generate disuse (or disutility) are met with losses.  Back to the article though:

“But in recent years, the government has too often given patent protection to inventions that do not represent real scientific advances.”

 

No argument there.  The “copyright troll” phenomenon is more than enough to make this libertarian squeamish.  Where is this editorial going I wonder?

  “The issue in this case, Alice Corporation Pty. v. CLS Bank International, is whether using a computer to implement a well-established economic concept can be patented. The court should rule that such ideas are not eligible for patent protection.

 

Alice Corporation obtained four American patents that cover a method of settling trades between investors in currency and other financial markets. The approach depends on a neutral middleman to make sure traders complete the transactions they have agreed to. The corporation, which is based in Australia, has accused CLS Bank, a London-based company that settles foreign exchange trades for investors around the world, of infringing its patents.”  

To make a long story short the US patent office granted the Alice Corporation a copyright on a form of interaction between a buyer, a middleman and a seller.  An absurd concept to be sure.  Now the question is what does the editorial suggest?

“The Supreme Court should make clear that nobody should be allowed to claim a monopoly over an abstract idea simply by tying it to a computer.”

I agree; but why stop there?  Why the artificial endpoint of “abstract ideas tied to a computer”?  If we shouldn’t allow patents on abstract ideas what would the author suggest if we proved that all ideas are necessarily abstract and therefore not able to be owned, sold, or monopolized?  Would he follow his logic to the conclusion that perhaps all patents are invalid?