I'm not a big proponent of IP in general. However, I feel comparing a creation which can be converted to a digital form to one which cannot doesn't make much sense.
In the industries with top 3 sales showed in the video (Food, Auto and fashion), the product cannot be transfered to another person without losing your won possession. Even if you copy a design you still must manufacture the apparel. Even if you copy the design of a car you still must manufacture it.
However, that's not the case with software, music or movie transferred over the internet. You don't have to re-write a software to share a verbatim copy. You don't have to direct and shoot the whole movie again to make a copy of it.
Thingiverse community + Makerbot Inc. versus The Lone Inventor with a patent?
I'll root for thingiverse people anytime. Nothing ruin the party more than a jackass telling people not to invent, design, and engineer, and make a living.
1. Yes, the "products" of the three industries (Films, Books, Music) with low(er) sales are transferable. But that has only become the case in the last 10-15 years. Prior to that it was harder (with movies and music: both being distributed on different media) or even impossible (books: being distributed on paper only; not counting audio-books) to separate content and media. Yet, over decades these industries have done everything to protect themselves.
2. If you try to copy the way some software works (by re-writing it) you can get sued. Damocles sword is always hanging above your head.
I've often wondered about Chefs in this respect, too.
While it seems really unfair that the guy who 'invented' Bannoffee Pie never made his fortune from it it has generally been of benefit to society as:
a) we can all eat Bannoffe pie as anyone can make it
and
b) it doesn't appear to stifle the creation of new recipes.
Plus if there had been IP protection for the creation of Bannoffee pie I seem fairly sure that the Chef would never have seen any benefit - just the owner of the restaurant and whichever chain store or supermarket he eventually sold the IP to.
Plus with cooking it can be possible to hide a secret ingredient/cooking technique with trade secret protection. Look how far Coca Cola has come without ever giving up their exact formula. We have many varieties of "cola" to choose from, but still only one Coke.
I was taken by the idea that when anyone can broadly copy anyone else, the details become more important.
Without copy-protection companies would take the time to get the details right rather than protect their IP and sit on their laurels.
We would get fewer big leaps but a lot more iteration. Drug companies would be constantly trying to release products that are 1 or 2% better than the last one.
I suspect that this would work in society's favour.
It is my opinion that people won't start copying until you become profitable, or at least popular.
People can't just copy whatever people come up with, because lot of these ideas will fail. So they will try to copy successful models/products. The only problem is, if they wait too long, they will lose most of the potential profits.
That's called the first mover advantage and I believe it to be sufficient incentives.(Because ya simply got there first, before anybody else, therefore you get looot of money!)
Sometime people also just never got around to copying you. This is especially true in my experience. My website once got a huge traffic spike from digg one time. Despite the overwhelming traffic, nobody ever forked my site despite its liberal copyright policies.
Heck, the first mover advantages apply to the American publishing industry centuries ago, when there is no recognition of foreign copyright. In some cases, the British authors actually earn more from their sale of manuscript to American publisher(so they can be first), than they do from royalties in their own country.
> (Because ya simply got there first, before anybody else, therefore you get looot of money!)
It's a sufficient advantage in slow moving industries, or ones where the cost of innovation is very low. In a world where an exact duplicate of a product can be made in very little time, it's very little advantage at all.
Your website is a prime example of something where the cost of innovation is extremely low (and further, the popularity is short term). If you consider the cost of designing and producing a new car, say, compared with the cost of copying the design and reproducing it, the economics look a little different.
As far as I know, the first mover advantage pretty much applies everywhere, even in a world where everything can be duplicated in very little time. Heck, Redhat is a prime example of the first mover advantage.
As far as I know, industries as wide as steam engines, movies, sheet musics, software, fashions, agriculture, books, newspaper etc have no problem thriving without intellectual monopolies.(ERrr..actually Hollywood moved to California to escape the Edison patent regime. Patents delayed the evolution of steam engines quite a bit and divert inventor resource from R&D and production to lawyering.)
Either your theory is wrong, or there's more to it than just first mover advantage.
First a note: I'm certainly of the opinion that the system as it stands is excessively in favour of intellectual monopolies - particularly when it comes to software patents. I just don't hold the opinion that taking the other extreme is productive.
There's the obvious prime example: drugs manufacture. The cost to research drugs and then test them is astronomical, while the cost of producing them is often very low. Much of the cost of the drug then, pays for the original research. It takes quite some time for the drugs to pay back the research cost.
What, then, is the solution to making money in this sector without intellectual monopolies? Personally, I'm in favour of no intellectual monopolies in areas where the cost of creation is high. Where the cost is lower (new, fast moving industries, for example), IP terms would be reduced or eliminated.
The cost of creation is alway high relative to manufacture. It may not be measured in dollars, but it can be measured in time. The cost of writing books, the cost of fact-checking, and the cost of marketing, all add up. Think about the plant growers who must breed generations and generations of plant? Take my website for example, the opportunity cost in creating the content is enormous. Duplicating only takes a few hundred dollars and maybe 3 hours. RedHat almost certainly spend millions of dollars investing developer man hours in their distro and the linux kernel.
The pharmaceutical industry costs' is surely higher than usual. However, the original drugs can sell for very high price, even when generic versions introduce market pressure.
The high cost of creation is not unique, and not limited to pharmaceutical industry. It is only relatively speaking that pharmaceutical industry's creation cost is much higher.(Don't forget that some of the cost are certainly inflated by an overly risk averse regulatory agency.)
In any case, introducing intellectual monopolies is a dicey game. Not only you must balance the incentives, you must also manage the bureaucracy, take into account wasted cost opportunity that could have went into research and marketing. If somebody exploit a loophole, it would take forever to change the law because congress is slow, or because of huge opposition pressure. People can be brought to favor certain corporations.
So you want to support a system of intellectual monopoly? Good luck balancing all the incentives, disincentives, and things that come up that you didn't know about. To underestimate the difficulty of managing a regulatory system is to fall prey to the planning fallacy.
I agree that the cost of writing books is high, which is why we have copyright. Your website is a poor example: you wrote something which was popular for maybe a few days/weeks. Your investment was (I assume) repaid over that time. To any viewer of your site, there is no cost to visiting you over visiting any other site, so there is no incentive to find/use an alternative source. I completely agree that, in such a scenario, being the first to market is a sufficient benefit, and that such content doesn't need much in the way of protection.
Some drugs are expensive to manufacture, yes. A great many aren't, too. Regardless of that, the company that doesn't have to invest in researching the drug will always be able to turn out a cheaper product, and thus reap the large majority of the profit: there being an incentive in this case for consumers to find cheaper companies. There is no reasonable likelihood of the company doing the research covering its costs in this scenario. If drugs had a life span of a few months, this wouldn't be the case, but they are used for much longer periods of time.
I don't underestimate the difficulty of running a regulatory agency: so much is plain from the mess that the US' system is currently in. I just think that the alternative of making research in many industries a waste of time is even worse. While I favour a more radical overhaul, a few simple changes, such as eliminating software patents, would make the US system much more reasonable.
I agree that the cost of writing books is high, which is why we have copyright. Your website is a poor example: you wrote something which was popular for maybe a few days/weeks. Your investment was (I assume) repaid over that time. To any viewer of your site, there is no cost to visiting you over visiting any other site, so there is no incentive to find/use an alternative source. I completely agree that, in such a scenario, being the first to market is a sufficient benefit, and that such content doesn't need much in the way of protection.
Now, are you simply just glossing over what I have told you about books and British authors? Do I have to point to you to an example of a public domain video game that actually made money? Since when my website stop being visible to the world after digg has made it through? I still get thousands of visitors each month.
such as eliminating software patents, would make the US system much more reasonable.
Do you have any sense of history whatsoever? When is at any point in history that the US patent system actually function the way it supposed to?
I can points to you horror stories about patents gone bad in the 19th century and the music sheet wars as well various submarine patents.
It's not some problem that suddenly pop up in some modern time that only impact the last 30 years or so. It's a problem that exists throughout economic history.
I did see what you wrote about British authors, I just didn't really consider it relevant:
> Heck, the first mover advantages apply to the American publishing industry centuries ago, when there is no recognition of foreign copyright. In some cases, the British authors actually earn more from their sale of manuscript to American publisher(so they can be first), than they do from royalties in their own country.
I read this as "Way back, when distribution was substantially slower, so copying was much harder, some people's books were much more popular in the US than in Britain."
Seriously. In the modern world, all that you need is for one person to pay, and make a copy. All other copies can then be made for free. The advantage to being first in this situation is microscopic.
> Do I have to point to you to an example of a public domain video game that actually made money?
More per developer-hour than a decent commercial game? I'd certainly be interested if more than a tiny handful had pulled this off, yes.
> Since when my website stop being visible to the world after digg has made it through? I still get thousands of visitors each month.
Thousands of visits per month is hardly going to be of interest to someone looking to make real money. The initial digg spike would be, but I covered that earlier.
> Do you have any sense of history whatsoever? When is at any point in history that the US patent system actually function the way it supposed to?
Of course you can point at problems. I said that the system would be made much more reasonable, not that it would be fixed. You seem to be thinking I'm coming at this from an idealistic 'I love IP' angle, rather than a pragmatic point of view. I do get that the system causes issues - I just think your alternative is much worse.
"I suspect that this would work in society's favour."
maybe, but it would most likely take the profitability out of most good ideas for small companies. As soon as a good idea is seen as profitable, a bigger company with more resources (connections, time, money, employees) could come along and run with it.
Once companies got to a certain level, they could just sit there on their laurels and poach ideas from others. Over time, this would result in less and less innovation and we would probably have a few big companies in each industry.
Umm, we're already there. Chinese knockoffs? There are entire industries that attempt to replicate original. The originals still stand and are more profitable than the knockoffs.
People in first-world countries fail to realize that for most third-world economies with very little IP enforcement, the era of cheap replication and no IP has been around for decades, yet none of the nightmarish worst-case scenarios have appeared.
This isn't a benefit to the chef himself, just his employer. And with IP restrictions limiting the spread of the product, it may not become very popular and the money made by the restaurant and its partners may be very small relative to the benefit to society without those restrictions.
Though I don't know much about fashion, I can't help but think that the investment required to think up of a new fashion design must pale in comparison to the investment required for innovation in other industries. Perhaps years to write a book, millions to shoot a movie, millions to design a chip.
That probably makes all the difference in terms whether or not IP is a socially beneficial system.
You don't buy cars only for their designs. The engine which really is part of what makes the difference (the other one being manufacture material) is patented.
And the GPS system (eg. your Navigator), electronic/computer board, and all this things that make you buy a Mercedes instead of a Hyundai, are patented or at least protected by IP.
Again she is comparing the "appearance" of the utilitarian market, not the engineering part of it. (You can patent and reinforce a new material for t-shirts which is unbreakable).
Oh I disagree. I think designs matter a lot more to a large fraction of people than you might think.
I think luxury cars have much in common with fashion, in the sense that people who would buy a Mercedes would never buy a Hyundai even if it had all those identical IP in it. Once you get above midrange (ie Toyota), a car is much more about status symbols and conspicuous consumption than features. Just like fashion.
The early car industry had lots of patents and patent fights.
The guy who invented working intermittent wipers was an independent. The big three refused to pay but used it.
There's currently a case involving a safety device for saws. Home Depot installed it and their injury costs went down by $1M/year. They refuse to pay royalties.
The claim that open source doesn't have copyrights tends to cast her other claims into doubt. But in principle it would be great if there were no copyrights or patents in software. It would mean fewer things to worry about, and a whole category of grief would disappear.
Fashion is not exactly analogous to software though, because in fashion there are physical atoms which are difficult to copy and move around.
Maybe the causality works the other way around. The collective pie is so much smaller in the high-IP industries, people try to hold on to their share of it with much more ferocity (i.e. more lawyers).
Hmmm. I would have thought automobiles was very high IP. No reference, but don't VW or Audi hold more patents than any other company in the world or something? Or take consumer goods. Unilver, Sony etc submit 100s of 1000s of patents every year.
Anyway, that aside, even if this chart is correct, a correlation does not imply any kind of causation. There many be any number of reasons why Food has more money spent on it (perhaps because we need food to survive and music consumption is purely discretionary?)
36 comments
[ 2.5 ms ] story [ 89.4 ms ] threadIn the industries with top 3 sales showed in the video (Food, Auto and fashion), the product cannot be transfered to another person without losing your won possession. Even if you copy a design you still must manufacture the apparel. Even if you copy the design of a car you still must manufacture it.
However, that's not the case with software, music or movie transferred over the internet. You don't have to re-write a software to share a verbatim copy. You don't have to direct and shoot the whole movie again to make a copy of it.
I'll root for thingiverse people anytime. Nothing ruin the party more than a jackass telling people not to invent, design, and engineer, and make a living.
1. Yes, the "products" of the three industries (Films, Books, Music) with low(er) sales are transferable. But that has only become the case in the last 10-15 years. Prior to that it was harder (with movies and music: both being distributed on different media) or even impossible (books: being distributed on paper only; not counting audio-books) to separate content and media. Yet, over decades these industries have done everything to protect themselves.
2. If you try to copy the way some software works (by re-writing it) you can get sued. Damocles sword is always hanging above your head.
While it seems really unfair that the guy who 'invented' Bannoffee Pie never made his fortune from it it has generally been of benefit to society as:
a) we can all eat Bannoffe pie as anyone can make it and b) it doesn't appear to stifle the creation of new recipes.
Plus if there had been IP protection for the creation of Bannoffee pie I seem fairly sure that the Chef would never have seen any benefit - just the owner of the restaurant and whichever chain store or supermarket he eventually sold the IP to.
Without copy-protection companies would take the time to get the details right rather than protect their IP and sit on their laurels.
We would get fewer big leaps but a lot more iteration. Drug companies would be constantly trying to release products that are 1 or 2% better than the last one.
I suspect that this would work in society's favour.
People can't just copy whatever people come up with, because lot of these ideas will fail. So they will try to copy successful models/products. The only problem is, if they wait too long, they will lose most of the potential profits.
That's called the first mover advantage and I believe it to be sufficient incentives.(Because ya simply got there first, before anybody else, therefore you get looot of money!)
Sometime people also just never got around to copying you. This is especially true in my experience. My website once got a huge traffic spike from digg one time. Despite the overwhelming traffic, nobody ever forked my site despite its liberal copyright policies.
Heck, the first mover advantages apply to the American publishing industry centuries ago, when there is no recognition of foreign copyright. In some cases, the British authors actually earn more from their sale of manuscript to American publisher(so they can be first), than they do from royalties in their own country.
It's a sufficient advantage in slow moving industries, or ones where the cost of innovation is very low. In a world where an exact duplicate of a product can be made in very little time, it's very little advantage at all.
Your website is a prime example of something where the cost of innovation is extremely low (and further, the popularity is short term). If you consider the cost of designing and producing a new car, say, compared with the cost of copying the design and reproducing it, the economics look a little different.
As far as I know, industries as wide as steam engines, movies, sheet musics, software, fashions, agriculture, books, newspaper etc have no problem thriving without intellectual monopolies.(ERrr..actually Hollywood moved to California to escape the Edison patent regime. Patents delayed the evolution of steam engines quite a bit and divert inventor resource from R&D and production to lawyering.)
Either your theory is wrong, or there's more to it than just first mover advantage.
There's the obvious prime example: drugs manufacture. The cost to research drugs and then test them is astronomical, while the cost of producing them is often very low. Much of the cost of the drug then, pays for the original research. It takes quite some time for the drugs to pay back the research cost.
What, then, is the solution to making money in this sector without intellectual monopolies? Personally, I'm in favour of no intellectual monopolies in areas where the cost of creation is high. Where the cost is lower (new, fast moving industries, for example), IP terms would be reduced or eliminated.
The pharmaceutical industry costs' is surely higher than usual. However, the original drugs can sell for very high price, even when generic versions introduce market pressure.
The high cost of creation is not unique, and not limited to pharmaceutical industry. It is only relatively speaking that pharmaceutical industry's creation cost is much higher.(Don't forget that some of the cost are certainly inflated by an overly risk averse regulatory agency.)
In any case, introducing intellectual monopolies is a dicey game. Not only you must balance the incentives, you must also manage the bureaucracy, take into account wasted cost opportunity that could have went into research and marketing. If somebody exploit a loophole, it would take forever to change the law because congress is slow, or because of huge opposition pressure. People can be brought to favor certain corporations.
So you want to support a system of intellectual monopoly? Good luck balancing all the incentives, disincentives, and things that come up that you didn't know about. To underestimate the difficulty of managing a regulatory system is to fall prey to the planning fallacy.
Some drugs are expensive to manufacture, yes. A great many aren't, too. Regardless of that, the company that doesn't have to invest in researching the drug will always be able to turn out a cheaper product, and thus reap the large majority of the profit: there being an incentive in this case for consumers to find cheaper companies. There is no reasonable likelihood of the company doing the research covering its costs in this scenario. If drugs had a life span of a few months, this wouldn't be the case, but they are used for much longer periods of time.
I don't underestimate the difficulty of running a regulatory agency: so much is plain from the mess that the US' system is currently in. I just think that the alternative of making research in many industries a waste of time is even worse. While I favour a more radical overhaul, a few simple changes, such as eliminating software patents, would make the US system much more reasonable.
Now, are you simply just glossing over what I have told you about books and British authors? Do I have to point to you to an example of a public domain video game that actually made money? Since when my website stop being visible to the world after digg has made it through? I still get thousands of visitors each month.
such as eliminating software patents, would make the US system much more reasonable.
Do you have any sense of history whatsoever? When is at any point in history that the US patent system actually function the way it supposed to?
I can points to you horror stories about patents gone bad in the 19th century and the music sheet wars as well various submarine patents.
It's not some problem that suddenly pop up in some modern time that only impact the last 30 years or so. It's a problem that exists throughout economic history.
> Heck, the first mover advantages apply to the American publishing industry centuries ago, when there is no recognition of foreign copyright. In some cases, the British authors actually earn more from their sale of manuscript to American publisher(so they can be first), than they do from royalties in their own country.
I read this as "Way back, when distribution was substantially slower, so copying was much harder, some people's books were much more popular in the US than in Britain."
Seriously. In the modern world, all that you need is for one person to pay, and make a copy. All other copies can then be made for free. The advantage to being first in this situation is microscopic.
> Do I have to point to you to an example of a public domain video game that actually made money?
More per developer-hour than a decent commercial game? I'd certainly be interested if more than a tiny handful had pulled this off, yes.
> Since when my website stop being visible to the world after digg has made it through? I still get thousands of visitors each month.
Thousands of visits per month is hardly going to be of interest to someone looking to make real money. The initial digg spike would be, but I covered that earlier.
> Do you have any sense of history whatsoever? When is at any point in history that the US patent system actually function the way it supposed to?
Of course you can point at problems. I said that the system would be made much more reasonable, not that it would be fixed. You seem to be thinking I'm coming at this from an idealistic 'I love IP' angle, rather than a pragmatic point of view. I do get that the system causes issues - I just think your alternative is much worse.
maybe, but it would most likely take the profitability out of most good ideas for small companies. As soon as a good idea is seen as profitable, a bigger company with more resources (connections, time, money, employees) could come along and run with it.
Once companies got to a certain level, they could just sit there on their laurels and poach ideas from others. Over time, this would result in less and less innovation and we would probably have a few big companies in each industry.
People in first-world countries fail to realize that for most third-world economies with very little IP enforcement, the era of cheap replication and no IP has been around for decades, yet none of the nightmarish worst-case scenarios have appeared.
This sounds like substantial benefit?
That probably makes all the difference in terms whether or not IP is a socially beneficial system.
And the GPS system (eg. your Navigator), electronic/computer board, and all this things that make you buy a Mercedes instead of a Hyundai, are patented or at least protected by IP.
Again she is comparing the "appearance" of the utilitarian market, not the engineering part of it. (You can patent and reinforce a new material for t-shirts which is unbreakable).
Oh I disagree. I think designs matter a lot more to a large fraction of people than you might think.
I think luxury cars have much in common with fashion, in the sense that people who would buy a Mercedes would never buy a Hyundai even if it had all those identical IP in it. Once you get above midrange (ie Toyota), a car is much more about status symbols and conspicuous consumption than features. Just like fashion.
The guy who invented working intermittent wipers was an independent. The big three refused to pay but used it.
There's currently a case involving a safety device for saws. Home Depot installed it and their injury costs went down by $1M/year. They refuse to pay royalties.
Fashion is not exactly analogous to software though, because in fashion there are physical atoms which are difficult to copy and move around.
Anyway, that aside, even if this chart is correct, a correlation does not imply any kind of causation. There many be any number of reasons why Food has more money spent on it (perhaps because we need food to survive and music consumption is purely discretionary?)