The most common justification for intellectual property protection is that it provides an incentive for future creation or innovation. There are many cases where this rationale is highly implausible, as with copyrights that extend long after the death of the original author. But even where IP does spur innovation, the question arises: innovation of what kind?
I’ve written before about things like patent and copyright trolling, where the IP regime incentivizes innovations that have no value at all, because they amount to figuring out ways to leverage the law in order to make money without doing any work or producing anything. But there’s another category of what might be called “pseudo-innovation.” This involves genuine creativity and cleverness, and the end result is something with real social utility. But the creativity and cleverness involved pertains only to circumventing intellectual property restrictions, without which it would be possible to produce a better output in a simpler way. A couple of examples of this have recently come to mind.
The first is the movie Selma, Ava DuVernay’s dramatization of the 1965 Selma to Montgomery voting rights marches led by Martin Luther King, Jr. Like most dramatizations of historical events, the movie takes liberties with the historical record in order to compress events into a coherent and compelling narrative. But one of these liberties is particularly unusual: in scenes recreating actual King speeches, none of the words we hear from actor David Oyelowo’s mouth are King’s; rather they are broad paraphrases of the original words.
As it turns out, this was not a decision made for any artistic reason, but for a legal one: King’s speeches are still the property of his descendants, who make large amounts of money by zealously guarding their copyrights. DuVernay was apparently barred from using the speeches because the film rights to King had already been licensed to Stephen Spielberg; meanwhile, the King family has had no problem lending his memory out to commercials for luxury cars and phone companies. DuVernay does an elegant job of giving the content and the feel of King’s oratory without using his actual words, and one could perhaps even argue that some unique value arises from this technique. But for the most part it’s pseudo-innovation, a second best solution mandated by copyright.
Another example comes from a very different field, computer hardware manufacturing. Here we turn to the early 1980’s and the development of the “PC clone.” Today, the personal computer is a generic technology—the machines that run Windows or Linux or other operating systems can be bought from many manufacturers or even, like the machine I’m using to write this post, assembled by the end user from individually sourced components. But in 1981, the PC was the IBM PC, and if you wanted to run PC software you needed to buy a machine from IBM..
Soon after the PC was introduced, rival companies began trying to produce cheaper knockoffs of the IBM product–the efforts of one leader, Compaq, are dramatized in the AMC series “Halt and Catch Fire”. Building the machines themselves was trivial, because the necessary hardware was all publicly available and didn’t require any propriety IBM technology. But problems arose in the attempt to make them truly “IBM-compatible”—that is, able to run all the same software that you could run on an IBM. This required copying the BIOS (Basic Input/Output System), a bit of software built into the PC that programs use to interface with the hardware.
That BIOS was proprietary to IBM. So in order to copy it, Compaq was forced into a bizarre development system described by Compaq founder Rod Canlon as follows:
What our lawyers told us was that, not only can you not use it [the copyrighted code] anybody that’s even looked at it—glanced at it—could taint the whole project. (…) We had two software people. One guy read the code and generated the functional specifications. So, it was like, reading hieroglyphics. Figuring out what it does, then writing the specification for what it does. Then, once he’s got that specification completed, he sort of hands it through a doorway or a window to another person who’s never seen IBM’s code, and he takes that spec and starts from scratch and writes our own code to be able to do the exact same function.
Through this convoluted process, Compaq managed to make a knockoff BIOS within 9 months. Just as Ava DuVernay came up with paraphrases of King, they had essentially paraphrased the IBM BIOS. And the result was something genuinely useful: a cheaper version of the IBM PC, which expanded access to computing. But the truly inventive and interesting things Compaq came up with—the things that make the story worth fictionalizing on TV—are pure pseudo-innovation.
Looked at this way, the world of IP pseudo-innovation looks kind of like high finance. In both cases, you have people making money and even having fun figuring out the best ways to game and counter-game the system, but in none of the complicated trading algorithms or software development strategies add anything to social wealth.