Law in the Internet Society

More Bang for Our Buck

-- By DavidRatnoff - 22 Oct 2021 (rev. 9 Jan 2022)

Time to Narrow Monopoly Protections

Imagine a hospital suing a person for performing CPR in its parking lot to save a person’s life, rather than bringing that patient inside the ER for care. The hypothetical hospital is a proprietary software company. Proprietary, closed systems of information don’t care about good ideas. They care about ownership. They seek to punish thieves, confuse rivals, and silence dissidents. Life-saving treatment shouldn’t be taken from the dying patient, merely because the hospital isn’t getting paid for it. But, under restrictive licensing, well-intentioned users cannot improve closed systems on their own. Worse, they can be pursued and punished for stepping into the shoes of an authorized developer.

Why should the state, with its sovereignty, tip the scales for the hospital and not for the dying patient? But that’s what it does under copyright and patent law by granting temporary monopolies for scientific inventions. State-granted monopolies in exchange for public disclosure and deposit of new ideas makes sense for certain novelties. Simply put, the state should “pay” for a private monopoly when it receives an invention helpful to the public in return. Public priorities frequently change, but climate justice and physical health are essential and enduring. So, the state should grant monopolies for technologies that can combat climate change (e.g., decarbonization, battery technology, electricity generation, etc.) and reduce health maladies (e.g., cancer therapies, diabetes treatments, etc.). At the same time, the state should not invest in its premature demise through climate disaster. Yet the granting of monopolies to proprietary software firms does just that, because proprietary tech kills the environment. Proprietary software is not benign, but rather the lifeblood of surveillance capitalism.

Monopoly protections in exchange for public deposit are premised on the public gaining something from this new knowledge. In proprietary systems that prohibit third-party modification of lines of code, the public does not benefit from new, closed technologies. The only beneficiary is the proprietary software company, which has copyright-protected license to iterate a new version and collect monopoly protections again, for itself. The cycle repeats endlessly.

Of course, even when the state grants monopolies for items that the public needs, the results are not perfect. Greed gets in the way. After the initial boost from the state, pharmaceutical companies use their market position to extend their monopolies on successful “blockbuster” drugs long after initial patents expires. This practice, called product hopping, disincentivizes generic manufacturers from producing prior formulations of the drug (lest they run afoul of new iterations of the patent) and raises prices for patients who continue to be prescribed these gold-standard drugs.

Turning the Corner?

One alternative is permissive licensing. The GNU GPL’s copyleft approach, which asserts a copyright on the software and offers a license that permits copying, distribution, and modification, subverts copyright law by expressly blessing users who seek to modify software. This approach makes sense for software: we can trust skilled users, who are diffusely distributed across the globe, to make useful changes to source code and publish explanations of their modifications on Github, for example. This approach makes less sense for health innovations. If any pharmacist were freely permitted to tinker with drug formulations, then package and market them to patients, patient safety could be jeopardized and pharmaceutical researchers may grow concerned with how their drugs are marketed to distinguish them from amateur spin-offs. Widespread lack of confidence in drug safety could undermine many of the advances of modern medicine in the last century.

Even for pharmaceuticals, a more permissive licensing model is possible. Adaptive licensing models conceptualize fast-track FDA approval followed by heightened surveillance and monitoring of patients after a drug is brought to market. While these models seem to place surveillance responsibility with drug manufacturers, they are a step toward public access to novel innovation. Another approach is for the FDA to grant the public access to proprietary data it has collected.

Briefcraft or Spycraft? Why Bother?

Litigation brought against a former employee for trade secret theft is common in the proprietary tech industry. Last March, Apple sued Simon Lancaster, a former product designer, for leaking his knowledge of Apple’s materials and prototypes of future products. Yet, to allege a trade secret violation, a plaintiff in such a case must disclose to the court which trade secret has been leaked. To preserve the competitive edge offered by trade secret law, parties in such cases submit to protective orders and other measures that restrict who can read proprietary materials and learn the details of a company’s trade secrets. Plaintiffs who are concerned about the disclosure of their secrets, and defendants who rely on this caginess to avoid liability, are both trapped in a bad system. Full public disclosure of scientific and technical knowledge would steer clear of such disputes, which waste resources that could otherwise be devoted to innovation itself. If all “proprietary” data were made public, or otherwise issued through permissive licensing, disputes about who stole what might give way to breakthrough technologies that synergize the work of many diffuse developers.

Neither Collapse, Nor Revolution

Free software is not a cure-all. When the state uses its considerable power to grant private monopolies that are protected in our courts, it should be to the benefit of society, not corporations. Products do not help people tackle new challenges; ideas do. Free software and its permissive licensing requirements encourage users to develop solutions to problems as they arise, without fear of retribution. By narrowing the granting of monopolies to technologies that thwart climate change and improve physical health, we might arrest the pernicious effects of proprietary software, which only leads to more surveillance and less control. To those who worry about distorting the profit motive, my 1L contracts professor’s quip comes to mind: umbrella sellers know how to find you when it is raining. Free software won’t kill proprietary firms, but it might push them to innovate in the public interest, rather than against it.

There are several interesting ideas here, but they are jumbled together incongruently, out of scale. One is not Arthur Quiller-Couch: the old bore is a darling you should kill. The metaphor adds nothing to the issue whether ownership of ideas is deadweight loss, necessary incentive, or something less simplistic in between.

A general attack on trade secrecy is incompatible with the strong form of the belief that it's unnecessary: if secrets don't convey advantage than requiring disclosure would be unnecessary in the face of robust free competition. Obviously one of those propositions must give way. It would instead be useful to inquire both (a) what industries find it valuable to gain state-granted monopoly protection in return for disclosure of inventions, which do not, and why; and (b) how the proprietary software industry gains both trade secret protection and a copyright supposedly dependent on public disclosure and deposit. Making these two inquiries thoroughly would equip the next draft to unify some themes and gain real analytic heft by doing so, at the expense of some lost rhetorical decoration.

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r3 - 10 Jan 2022 - 05:14:54 - DavidRatnoff
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