Chapter 10

Studies 1

Over the last forty years, much has changed in the way that scientific research and technological development are organized, funded, and institutionally arranged. Much has also changed in the type of scientific and technical material that is covered by intellectual property rights, the ways that material is covered, the parties who hold the rights, and the state of research and development at which rights claims are made. Many academics who study both science's organizational structure and the intellectual property claims that surround it are concerned about the results. To say this is not to conjure up a tragically lost world of pure research science, untainted by property claims or profit motives. That world never existed and it is probably a good thing too. Intellectual property rights, and the profit motive more generally, have a vital and beneficial role in moving innovations from lab bench to bedside, from computer simulation to actual flight. The question is not whether intellectual property rights are useful as part of scientific and technological development. The question is what type of rights they should be, where in the research process those rights are best deployed, how they should coexist with state funded basic scientific and technological research, how broad they should be, how they should deal with new technologies, how long they should last, how they should treat follow-on innovations. 2

I cannot hope here to answer all those questions, though some fascinating research has begun the process. Instead, as with the music chapter, I will offer a case study--actually two case studies--that try to illuminate the process I am describing, to illustrate its pitfalls and its strange and unintended consequences. 3

The two defining technologies of the last thirty years are biotechnology and the networked computer. Each is both product and platform. Innovations themselves, they are also constitutive technologies that enable still more innovations. But at several historical moments in the development of each we came perilously close to breaking technology with law.1 Some would say that it was not just a close shave: we actually have hampered or limited the full potential of technology, slowing down its dynamism with a host of overbroad software patents, gene patents, and materials transfer agreements. Others are more optimistic. They think that a series of rapid improvisations by courts, scientists, programmers, and businesspeople has largely mitigated any problems caused by the process of legal expansion.2 But if mistakes were made, it is important to know what they were lest we continue or repeat them. If there were "fixes," it is important to know if they can be replicated. 4

So were there mistakes? If so, have they been fixed, and how? Drawing on an article I co-wrote with my brilliant colleague Arti Rai,3 this chapter suggests some answers to those questions by sketching out some details of the legal history of those technologies, concluding with a discussion of a single promising new technology that shares aspects of both--synthetic biology. The answers are important. Behind the abstract words "innovation" or "technological development" there are lives saved or lost, communicative freedoms expanded or contracted, communities enabled or stunted, wealth generated or not. The subject would benefit from informed, sophisticated, democratic attention. It is not something you want to leave a host of lawyers and lobbyists to decide among themselves. 5

A MACHINE THAT CONTAINS ALL OTHER MACHINES 6

Imagine a person staring at an infinite roll of paper tape. On the paper are symbols in some alphabet or number system. The reader carries out simple, operable instructions on the basis of that data. "Add together the next two digits you are presented with and write down the answer. If the answer is odd, go to step 2. If the answer is even, go to step 3." Now replace the person with a mechanical head that can "read" the instructions, carry out the desired operations, and write the answer down. The British mathematician Alan Turing imagined something like this--a little more complicated, perhaps, but fairly similar. What is it? We have the reading head, the set of instructions, the data on which the instructions are to be performed, the record of the result, and some kind of "state table" that tells the machine where it is in the process. These are the component parts of Turing machines--or as we know them better, computers. More accurately, Turing machines are a method of simulating the operation of computers, a metaphor that enables us to imitate their logical processes. In the words of Wikipedia, "despite their simplicity--[they] can be adapted to simulate the logic of any computer that could possibly be constructed." And to give lawyers fits. But that is getting ahead of ourselves. 7

In Greek mythology, Procrustes had a bed to which he fitted its prospective occupants, whether they liked it or not. The tall were trimmed down. The short stretched on the rack. Intellectual property lawyers have many similarities to Procrustes. The technologies that are brought before them are made to fit the conceptual boxes the law provides, boxes with names such as "copyright" and "patent." Occasionally, new conceptual boxes are made, but--for very good reasons--most of the time we stick with the boxes we have. As with Procrustes, things do not always fit and the process can be distressing for its subjects. 8

It is important to realize that the process of trimming and stretching can be done well or badly. If it is done really badly, the technology is stunted, deformed, even destroyed. If it is done well, the law aids the development of the technology in exactly the happy way described in Chapter 1. What did our Procrustean legal system do with computers and computer science? 9

I will focus on software--the set of instructions the machine is to perform. How should we think of it? Software is written down by programmers. It is recorded first in a form readable to humans, or at least geeks. Then, through a series of transformations, it is turned into the machine code, the ones and zeros that will operate the computer. But at its root it can be understood through the metaphor of the simple list of instructions to be carried out in order, just as with the Turing machine and its infinite tape. 10

How should we fit software into the categories of intellectual property? We have "writing," fixation in some medium of symbols that can be read by others--both machine and human. Writing is normally the domain of copyright. Are computer programs copyrightable? All kinds of problems present themselves. At least in the United States, copyright covers expression. As I pointed out in a previous book, at its base is the conception of the romantic author impressing her uniqueness of spirit on the work at the moment of writing. It is that expressive choice, not the facts or ideas on which the work is based, that copyright covers. And it is only original expression that copyright covers. It does not cover purely functional objects, systems, processes, or methods of operation. One cannot copyright the coat hanger, the mousetrap, or long division. One cannot even copyright a "sculpture" if the main function of its design is to serve as a bicycle rack. Admittedly, one can copyright some expressive works that serve a practical purpose. A book about how to do double-entry bookkeeping is copyrightable. Yet copyright covers only the expressive choices used in selecting the words to explain the method, and the images to represent it, not the methods it describes or the facts or ideas it contains. Can copyright cover computer programs? Should we see them as copyrightable how-to books or as uncopyrightable machines made of words? 11

Machines and other functional innovations are normally the domain of patent rights. One can patent the mousetrap, and then one gets an exclusive right to the actual mechanically enabled method of catching mice, not just the artistic flourishes on the blueprint. Patents have more demanding criteria than copyrights. The invention needs to be novel and have utility, or usefulness; I cannot get a patent over something that would have been an obvious idea to an insider in the relevant field of technology, a "person having ordinary skill in the art," or PHOSITA, in the jargon of patent lawyers. But once I get my patent, it gives me a very strong power to exclude others from the invention--even if they came up with it independently. The right lasts for twenty years. Follow-on innovators who improve on my idea can get a patent on that improvement. They can block me from using the improvement. I can block them from using the original invention. Thus we have an incentive to negotiate if either of us wants to bring the improved innovation to market. 12

So where did software fit? Was it copyrightable writing or patentable invention? There are two issues here. The first is whether there should be any intellectual property rights over software at all. The basic case for that proposition is simple, a classic example of the public goods problem described in the first chapter. Software costs money to create, but is cheap to copy. When a youthful Bill Gates wrote his 1976 letter to the wonderfully named Dr. Dobb's Journal of Computer Calisthenics & Orthodontia, he put the point clearly. 13

Who can afford to do professional work for nothing? What hobbyist can put 3-man years into programming, finding all the bugs, documenting his product and distribute it for free? The fact is, no one besides us has invested a lot of money into hobby software. We have written 6800 BASIC, and are writing 8080 APL and 6800 APL, but there is very little incentive to make this software available to hobbyists. Most directly, the thing you do is theft.4 14

He signed the letter "Bill Gates, General Partner, Micro-Soft." The hyphen would disappear in time. The philosophy stuck around. 15

Though there are quibbles about the facts in Gates's letter--critics claim he himself did a lot of free riding on public domain code and government-funded computer time--his basic point is that software needs to be protected by (enforceable) property rights if we expect it to be effectively and sustainably produced. Some software developers disagree. But assuming one concedes the point for the sake of argument, there is a second question: should software be covered by copyright or patent, or some unidentified third option? 16

In practice, software ended up being covered by both schemes, partly because of actions by Congress, which included several references to software in the Copyright Act, and partly as a result of decisions by the Copyright Office, the Patent and Trademark Office, and judges. One could copyright one's code and also gain a patent over the "nonobvious," novel, and useful innovations inside the software. 17

At first, it was the use of copyright that stirred the most concern. As I explained in the last chapter, copyright seems to be built around an assumption of diverging innovation--the fountain or explosion of expressive activity. Different people in different situations who sit down to write a sonnet or a love story, it is presumed, will produce very different creations rather than being drawn to a single result. Thus strong rights over the resulting work are not supposed to inhibit future progress. I can find my own muse, my own path to immortality. Creative expression is presumed to be largely independent of the work of prior authors. Raw material is not needed. "Copyright is about sustaining the conditions of creativity that enable an individual to craft out of thin air an Appalachian Spring, a Sun Also Rises, a Citizen Kane."5 18

There are lots of reasons to doubt that this vision of "creation out of nothing" works very well even in the arts, the traditional domain of copyright law. The story of Ray Charles's "I Got a Woman" bears ample witness to those doubts. But whatever its merits or defects in the realm of the arts, the vision seems completely wrongheaded when it comes to software. Software solutions to practical problems do converge, and programmers definitely draw upon prior lines of code. Worse still, as I pointed out earlier, software tends to exhibit "network effects." Unlike my choice of novel, my choice of word processing program is very strongly influenced, perhaps dominated, by the question of what program other people have chosen to buy. That means that even if a programmer could find a completely different way to write a word processing program, he has to be able to make it read the dominant program's files, and mimic its features, if he is to attract any customers at all. That hardly sounds like completely divergent creation. 19

Seeing that software failed to fit the Procrustean bed of copyright, many scholars presumed the process of forcing it into place would be catastrophic. They believed that, lacking patent's high standards, copyright's monopolies would proliferate widely. Copyright's treatment of follow-on or "derivative" works would impede innovation, it was thought. The force of network effects would allow the copyright holder of whatever software became "the standard" to extract huge monopoly rents and prevent competing innovation for many years longer than the patent term. Users of programs would be locked in, unable to shift their documents, data, or acquired skills to a competing program. Doom and gloom abounded among copyright scholars, including many who shared Mr. Gates's basic premise--that software should be covered by property rights. They simply believed that these were the wrong property rights to use. 20

Copyright did indeed cause problems for software developers, though it is hard to judge whether those problems outweighed the economic benefits of encouraging software innovation, production, and distribution. But the negative effects of copyright were minimized by a remarkably prescient set of actions by courts and, to a much lesser extent, Congress, so that the worst scenarios did not come to pass. Courts interpreted the copyright over software very narrowly, so that it covered little beyond literal infringement. (Remember Jefferson's point about the importance of being careful about the scope of a right.) They developed a complicated test to work out whether one program infringed the details of another. The details give law students headaches every year, but the effects were simple. If your software was similar to mine merely because it was performing the same function, or because I had picked the most efficient way to perform some task, or even because there was market demand for doing it that way, then none of those similarities counted for the purposes of infringement. Nor did material that was taken from the public domain. The result was that while someone who made literal copies of Windows Vista was clearly infringing copyright, the person who made a competing program generally would not be. 21

In addition, courts interpreted the fair use doctrine to cover "decompilation"--which is basically taking apart someone else's program so that you can understand it and compete with it. As part of the process, the decompiler had to make a copy of the program. If the law were read literally, decompilation would hardly seem to be a fair use. The decompiler makes a whole copy, for a commercial purpose, of a copyrighted work, precisely in order to cause harm to its market by offering a substitute good. But the courts took a broader view. The copy was a necessary part of the process of producing a competing product, rather than a piratical attempt to sell a copy of the same product. This limitation on copyright provided by fair use was needed in order to foster the innovation that copyright is supposed to encourage. This is a nice variation of the Sony Axiom from