Working as I do in the internet industry, I am vitally interested in these issues. Here are some real-world examples from my work on which I would be interested in hearing your views.

1. A company has developed a code-base (we call it a framework) that can be leveraged to facilitate the creation of desktop, mobile or Web applications. The company licenses this framework to third-party programmers. Part of the licensing terms require that the third-party programmers not distribute the framework to others.

Scratch the idea of a license and replace it with a contract.

However keep in mind that if the code did get leaked to the public then other people are not going to be covered by the contract. You can’t expect people to abide by a agreement they never agreed to.

2. A company publishes a downloadable software program. It is freely available and fully functional. But as a condition of downloading, the downloader must agree not to use the software past a certain trial period without paying the publisher.

You have to get them to agree to the restrictions before you allow them to download it. If they leak it then your only recourse is to go after them to recoup your damages.

3. Another downloadable software program, this one programmed to disable itself after certain trial period if a special code is not entered. The publisher sells these codes. Purchasers are prohibited by contract from sharing the codes with others.

Same situation as 1 and 2, slightly different details. This one you can deal with by giving people unique keys, and signing your software with the appropriate cryptographic techniques. Not that it is going to make much of a difference.

4. The case of the iPhone: The program downloaded is completely unrestricted. However, restrictions built into the operating system of the device that runs the program prevent users from downloading these unrestricted programs unless they have paid a fee. Further the device user must agree not to tamper with the OS restrictions that protect the downloadable programs.

If you can get them to sign a agreement and agree to the restrictions prior to you selling them it is the only real moral and ethical way to do it. You can just put the restrictions on it and sell it to them, but there are plenty of other businesses that would be happy to provide services to break your restrictions for a small fee.

Can all these situations be managed by private contract, similar to a standard non-disclosure agreement (which is very common in our industry)? Can the publisher seek injunctive relief in the case of breach? Are “click-to-agree” user license agreements valid and enforceable?

You can do whatever you want under a contract if you can get the other party to formally agree to it prior to usage. The problem you face is how you are going to enforce the contract and recoup damages if the other party breaks it.

One way it could possibly work is that you require insurance for the purchaser prior to signing the contract. That is if the other party fails to live up to it’s agreed upon responsibility then you will get your damages recovered by their insurance company. That way you let the insurance company deal with the details of monitoring and compliance checking.

Obviously this approach is a lost cause for consumer goods and software. No insurance company would in their right mind would risk so much money on something so risky and doomed to failure without huge premiums. For larger professional institutions then remaining in good standing with the business community is much more critical. Between businesses such agreements can be very practical and lucrative. You don’t have to give a shit on who is a safe bet or not… that is the insurance company’s problem. You just have to worry about whether or not the insurance company is creditable.

If the company your dealing with has a insurance company backing them up that you approve of then it’s safe to do business with them, no questions asked.

Also, you say that confidentiality can only be enforced against the original party to the contract, and that once the secret is divulged, it can no longer be protected. But could a software publisher require a user to enter into a new confidentiality agreement, something like situation 2 above, before being permitted to open the copied software?

Contracts can only cover the actions of people that agree to them. Anything else is immoral.

And finally, do you have an opinion about the morality or advisability of these admittedly convoluted attempts to make a scarce good out of a non-scarce good? I know you will suggest the open-source model, but we have never found that to be viable. My philosophy has always been that in order to make money, it really helps to have a price. The products we create are technically non-scarce, because reproducible, but they require so much work, and sell for so little money, that we have to restrict access to them in order to make any money off them. And if we don’t make money, they will become truly scarce, as in nonexistent, because we won’t be able to make them any more.

There are a lot of ways to make money here.

I know how the internet works. There are literally new web and application frameworks falling out of company’s asses on a daily basis. How many does the world really need?

Also keep in mind that although (morally and practically) you can force the world to conform and make a untenable business model work for you by all agreeing to ignore the fact that software is infinitely reproducible… You yourself is not restricted by any copyright either.

If somebody approaches you and wants to have some application backend or library or whatever built for their in-house purposes? Just pluck one off the web or from IBM or whoever and modify it to suit their purposes. Without copyright you will lose all these big proprietary silos of code that all do just about the same things in similar ways… and you just end up with the world programmers sharing code based on business need. When it is useful to share resources to reduce costs.. you can do so. When it is not then you do not. You can take whatever binaries and code or whatever else you need and use it for the task at hand… just like anybody else can.

Programming then becomes a trade or a service.

Do you think that building a skyscraper is expensive and difficult? Do you think that the painters, plumbers, electricians, and all the hundreds different companies figure the best way to get compensated for their work is to sit out side and demand payments for every person that uses a service they built or put together? Does a doctor that replaces a heart valve charge monthly licensing fees for it? Was it not expensive, extremely difficult, and time consuming to make the artificial heart and cultivate the skills necessary to do the work?

Business needs don’t go away because all of a sudden copyright is abolished. They still need their software, their web frameworks, their database software, etc. etc. They will still have to pay people to write it, customize, and build it. Programmers will be paid to code and they will be compensated for their work one way or another. If it was possible to have one company write a generic piece of super software that filled all business needs and could be copied around the world and put all programmers out of business then they would of already done that. No… the reality is that well over 90% of all the coding that goes on is done for customizing existing software to fit specific business purposes. It does not matter if it is proprietary or not. The vast majority of resources the world devotes to programming goes into taking existing software and making it work for a unique business need.

The copyright has created huge market distortions and artificial markets. Yeah sure it is extremely lucrative system for a certain portion of the market and when it goes away it will hurt those people financially.. but it will also save a whole lot of money and time for a much larger audience all of which will be devoted to more productive endeavors.

Seems to me many anti-IP folks are more concerned with ends than means. Like guilt free song downloading and an open source society. Isn’t that a bit like the right to housing or a poverty free society?

And surely if breach of contract only applies to the thieving party, and not the millions of recipients of such theft, there is a strong incentive to fund a “fall guy” to make a program, song file, or tv show available to all. The authors might not think this is a problem, but then we return to the issues raised in this comment about the scarcity of creative effort.

True, he can use it himself — but (oversimplifying for the sake of clear argument) he can realize only little personal benefit, unless he can sell the idea — and if the idea cannot be sold (since it is universally free), only the most-trivial ideas will be explored. The incentive for invention, then, will limit invention’s effort to the personal benefit one can derive from such invention. “Big” (hard to do) inventions, then, will not be “worth” the trouble.

Breaking into someone’s factory and producing a physical good using that factory’s tooling and blueprints (assuming the trespassers damaged nothing and brought their own stock, paid for the electricity, etc.) would be analogous — the factory owner would “lose nothing.” It’s obvious to see that this action would be unacceptable — but it’s the same thing as duplicating someone’s song or book.

Look at the supply side of the equation: Why write a symphony or a novel? Why do research? Though I agree that “effort” is not a basis for compensation (only “results” are), when great effort is required to achieve an intellectual result, and when that result cannot be shared for profit, where does the inventor get motivation?

Just because I work for something does not make my product worth anything.

So why I am having trouble with the novelist and not the other two? In a world without IP would there have to be a complete restructuring of how novelist or writers make money? Maybe they would work contractually for a publishing company? Probably there wouldn’t be as much of an incentive to write long novels, and perhaps writers would have to do shorter works or have longer works broken into a series of magazines that one would have to purchase month or week.

Clearly a world without IP may change the actual mediums of how artist produce work.

I think they should be decided by the market as opposed to governments, and I realize this might go against me but I don’t think it’ll look anything like what we call IP now. Whatever we do get I think will be significantly closer to individual communities ‘ desires.

Certainly if people take something verbatim and attempt to sell it as their own or if they paraphrase without changing anything that people agree makes their version valid that people will probably not purchase from that individual. Provided enough of the market believes this attempt is theft, I think DROs would resolve disputes on these matters accordingly.

This is not like the current form IP takes. IP is not market driven but instead driven by government mandated monopoly and licensing. My problem with IP is not that I believe no one should be able to restrict copying in any way, shape, or form. I’m fine with the idea of having contracts telling users not to copy for example, although that only goes as far as the person with which they have an agreement.

My problem with IP as it exists now is that I believe it destroys individual freedom to attempt to restrict copying via invasive means and pervasive laws governing private behavior.

It is implemented via the monopoly on force (government), and therefore investigation of IP incidents is a matter where ISPs and other 3rd parties are required to supply evidence that could not be required of them in a free market system. They might provide it willingly, but I think many of these agents would be operating under contracts that they not disclose the activities of their users.

If you move on to patents, I don’t imagine a free market system condemning someone who independently came up with the same idea as another for some quaint invention. I could be wrong, but I don’t think that’s a norm most people would hold. I think you could well see market forces via DROs seeking compensation for that which requires expensive research and development.

But, again, this is always with the balance of individual consumer autonomy and choice. If people don’t like what these DROs are doing, the DRO itself may not get the business necessary to validate these kinds of decisions.

I agree 100% with this statement. My problem is that this seems to be inconsistent with your request earlier:

“What is the “IP” that we are talking about? Lets just stick to literature. Are you talking about the word, sentence, paragraph, book or the plot/concept? What does it take for a specific piece of literature to be IP, and why is less than that not IP? If you can start by defining IP in this one area and then move on towards attempting to prove that we get more value by having IP in literature at that point maybe there is something that you can at least sell from your pareto-improving criteria.”

Why can we leave the exact definition of property to “market and circumstance” but not leave the exact definition of IP in literature to “market and circumstance”, as you seem to be suggesting?

That is, if I write a book about a child wizard who, say, becomes a football player and wins the world cup, well the idea to use a child wizard may or may not have been stolen but I think that “market and circumstance” will deem this “ok” reagrdless.

However, if I publish a book that contains the identical words to Harry Potter in the identical order except for a difference of one full stop, we can safely say that I needed a copy of the original to write it and “market and circumstance”, if the people want this, can say this is a “theft” of some kind. I’m not saying they should or they shouldn’t – but if the law evolves such that the most popular free market arbitration bodies deem the latter case to be a theft of some kind, despite the fact that you can’t frame all this with abstract reasoning and define a priori an exact threshold, who are you to say you know better than the market?