Copyright

[Steve]

x-no-archive: yes

=========================

Copyright Protection Is for Dinosaurs

by Stewart Alsop (excerpts)


Why do we need to protect intellectual property? Seriously, I'm
beginning to wonder if we really need government protection of
intellectual property in our new cyberworld. 

Copyrights. Trademarks. Patents. The basic idea behind these three
concepts is to provide a kind of legal monopoly that safeguards the
results of creative effort as an incentive for people to engage in
that effort. The theory, at least in most Western nations, is that
people will not be motivated to produce such effort if the results
can be copied freely. I'm going to deal with copyright, as it's the
principle nearest to my heart-- I've spent most of my career as a
journalist and editor profiting from my own or my employers'
copyrights.

Copyright protection evolves from a world in which copying can be
prevented. No one would have even considered this slightly screwy
idea--let's prevent people from copying other people's work--if it
had never been possible to prevent copying. 

But now we live in a new world where copying is next to impossible to
stop. Indeed, copying is so easy that perhaps a government-enforced
monopoly on creative efforts doesn't make sense anymore.

There was a time, from about 1980 to 1986 or so, when PC software
companies were concerned about users copying programs from one floppy
disk to another. These companies resorted to "disk protection"
schemes, which were programming that made it impossible to copy
software unless you were a proficient hacker. But this protection
also made the software more difficult to use, and customers
complained. After a few years the companies figured out that they
could remove the disk-protection schemes without harm. They
discovered that they could still get customers to pay for manuals,
customer service, and other benefits, and still make lots of money. 

For eight years, from 1985 to 1993, I produced a newsletter called
P.C. Letter. I printed copies on paper and mailed them in envelopes
to subscribers. My subscribers, of course, could easily photocopy the
material and send it to colleagues. That mattered to me, since I was
charging $500 a year for subscriptions. Indeed, many newsletter
publishers still consider photocopying a big legal issue. But the
truth is that photocopying was a great sales tool, because prospects
were more likely to subscribe if they had read an issue or two and
knew that a colleague was not only reading the newsletter but also
getting it first since he'd paid for a subscription. So I never made
a big deal out of photocopying. Instead, I sold subscriptions as
aggressively as I could, in part by emphasizing the benefits of
having your own copy. 

No one has paid any attention whatsoever to my proposed remedy for
dealing with Microsoft's allegedly anticompetitive behavior. I
proposed that if we believe that we citizens of the U.S. can't
control or regulate Microsoft's behavior as a monopoly, then let's
withdraw government protection of the intellectual property making
that monopoly possible. In other words, take away copyright and
trademark protection for Microsoft products deemed to be
monopolies--Microsoft Windows 98, for instance, and perhaps Microsoft
Office, but not Windows NT or Windows CE. This would probably spur
competition. Other software makers have been reluctant to create an
alternate version of Windows primarily because of the threat of
having Microsoft sue them. Smart people: Microsoft would have an
excellent case if anyone tried to copy Windows or Office. 

Remove the government-approved monopoly, however, and you'd still
have some pretty phenomenal obstacles that would, in effect, protect
Microsoft. First, there's the technical challenge of reproducing the
Windows programming interface so successfully that Sun Windows, for
instance, would run all the programs that run on Microsoft Windows.
Then there's the sheer speed of change- -as soon as a competitor had
managed to reproduce Windows 98, say, Microsoft would be out with a
new version. Most important, although Microsoft is considered a Darth
Vader because of its business practices, the truth is that users
wouldn't trust anyone else to make Windows work. Trust is so
significant in technical matters that it means more than it ever used
to, and is now a true barrier to entry for competitors. 

Meanwhile, whole industries are arising around unprotected content
and ideas. Linux is an operating system that isn't owned by anyone
and so can be freely copied and revised. A bunch of companies,
including Red Hat Software of Research Triangle Park, N.C., and
LinuxCare of San Francisco, are building businesses that charge not
for the product but for service in support of the product. 

Most recently, you might have heard about this thing called MP3. It's
a new way to store music in digital form. Just like Linux, music in
MP3 format can be freely copied. Nothing in the format protects the
rights of the artist or music company. Needless to say, the
recorded-music business is in an uproar. How can you make any money,
it asks, if people can just make copies of the songs they want,
attach them to an e-mail message, and send them to 50 or 500 friends?
How indeed? Well, I've seen business plans for at least three
companies that are planning to answer that question by building
businesses around unprotected music. I can't get into details because
these plans are still floating around, but one thing's for sure--the
same thing will happen to film once hard disks and network
connections get big enough to handle digital video as easily as
current equipment handles digital music. 

So here we are, at the dawn of virtual reality, electronic commerce,
and digital information. Doesn't it begin to feel as if we should go
back and reexamine our assumptions about whether creative effort
should be protected by the government?

Stewart Alsop is a partner with New Enterprise Associates, a venture
capital firm. 





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