The rise and fall of intellectual property

Introduction
In January 2007, there was a news that many Estonians living in Brussels use their satellite-TV equipment to watch Estonian TV. The sad point is that the equipment, while fully legal in Estonia, becomes illegal when used in Belgium. The reasons are not technical but purely legal - the powerful lobby of multinational corporations has succeeded in pushing legal acts which limit the legal use of equipment with national borders. The case is a good illustration on the growing ambiguity of the technology-related legal space.

The whole subject of IP will probably reach even stronger focus in near future. The 'soap opera' about establishing software patents in Europe (which has currently stalled), the hyperbolic copyright cases in the US, BSA campaigns, the Microsoft-Novell deal - these may seem far away. But we can find colourful cases from Estonia as well.

An interesting reading is the Information Liberation Information Liberation by Brian Martin, an associate professor of Wollongong University, Australia. Published in 1998, it has predicted some of the today's heated issues with remarkable exactness. While somewhat radical in approach and definitely leftist in the political scale, it is a welcome counterbalance to the mainstream sources which until very recently only promoted the proprietary models.

Prehistory
The moral rights of the creator (similar to the current Continental European droit d'auteur) have existed probably throughout the human history, likewise the property rights on a copy (e.g. a book owned by someone). Also censorship (which is not directly related to author but can still remarkably influence the distribution) is very old. But the whole issue was quite modest up to the age of printing press - illegal copying and distribution were just not enough profitable to be practiced (books were copied by hand by literate slaves or later by scribes and monks - an expensive and slow process regardless of property rights).

During the Middle Ages, books were written and copied almost entirely by monks as the trade became one of the main activities of monasteries. With a relatively small 'market' (literate population) and further restrictions (due to the slowness of copying, access to the manuscripts was often restricted; sometimes also the decisions what to copy were prescribed by superiors), even the earlier attempts of regulation fell largely into oblivion.

The authors of these times were largely working not on unit basis (paid to write a certain manuscript) but rather employed as full-time creative persons (court poets, musicians and entertainers) - the practice which was prevalent in earlier times and is still much more prolific than suggested by some hardcore IP spokespeople. This applies to the authors of some of the most hallowed creative works in human history - William Shakespeare was a professional playwright employed by the court (Lord Chamberlain Hunsdon and later King James); Johann Sebastian Bach was a court musician in Weimar; Georg Friedrich Handel was a conductor and the director of the Royal Academy of Music in London; Wolfgang Amadeus Mozart was employed in Salzburg, Vienna and Prague (a side remark: one of the early exceptions working as a freelance composer - and thus likely having to deal with copyright issues - was Ludwig van Beethoven). Similar examples can be found in abundance up to our days.

The age of printing arrives
The exact chronology of Gutenberg Bible is still disputed, but it is mostly suggested that the printing of the first mass-printed book, a copy of a 1300-page Latin Bible, was started by Johann Gutenberg, the inventor of the movable type, in Mainz, Germany in around 1455. The invention made copying radically easier and shifted the publishing benefits from authors to printers/publishers - the situation which has survived until our days (although the widespread use of Internet in fact started a reverse process!). Quite characteristic to the issue, Gutenberg lost his rights to a rich banker who initially had financed his work, dying as an unknown man. Only after a century, he started to be considered the inventor of typography in the West (as similar technology was used by the Chinese much earlier).

16th-century Germany: Luther vs publishers
Swedish writer Karl-Erik Tallmo has brought up a problem which has surfaced in various times and places, including Germany in Martin Luther's time. Luther being a popular writer, his works were often 'pirated' by publishers. While Luther did see the economical problem, his main concern was the changed content (to the point where sometimes he did not recognize the writing attributed to him).

While Tallmo uses the example to justify (albeit in a moderate manner) the traditional model, this example can well be used to show the adequacy of free licenses - all free licenses protect authorship in cases like these, while not resorting to questionable measures.

The Statute of Anne
In 1710, the British Parliament passed a remarkable statute that for the first time protected the rights of authors rather than publishers of books. It was entitled "An Act for the Encouragement of Learning, by Vesting the Copies of Printed Books in the Authors or Purchasers of such Copies, during the Times therein mentioned." (the quotes used here are taken from Edward Samuels' The Illustrated Story of Copyright). The Statute of Anne, which is widely considered to be the first Copyright Act in the world, introduced two new concepts - an author being the owner of copyright and the principle of a fixed term of protection for published works (not more than 28 years). In addition, the authors had to publicly register their claims of authorship, in order to protect the "many Persons" who "through Ignorance" might otherwise "offend against this Act." The Act also brought about the depositing of nine copies of a book to certain libraries throughout the country - "for the Use of the Royal Library, the Libraries of the Universities of Oxford and Cambridge, the Libraries of the four Universities in Scotland, the Library of Sion College in London, and the Library commonly called the Library belonging to the Faculty of Advocates at Edinburgh.". Not doing so could result in a forfeiture of the value of the printed copies of the books, plus £5 for every copy not so delivered. All in all, the act was a remarkable piece of legislation of its time.

The United States Copyright Act, 1790
Set the initial copyright period to 14 years, extendable to another 14 (nowadays, the Creative Commons is trying to revive the system as the Founders' Copyright). The law had clear similarities to the English Statute of Anne, including the requirement that one copy of the work be deposited with the clerk of the local district court, and one copy be delivered to the secretary of state - at the time, Thomas Jefferson - "to be preserved in his office." (Samuels ironically remarks that "What a way to build a library! Jefferson must have loved it.").

However, as described by Gantz and Rochester, the century following the Act was marked by rampant disregard of copyrights (called "100 years of American piracy" by G. and R.). First, the Act only covered American authors, and the US being remarkably poorer in terms of culture at that time, all British works were 'bootlegged' with no limits (for sure, consumers loved it - as the price of the locally printed copy was just a fraction of that of the imported original). In turn, works of the US writers were sold to Canada and Britain - again with absolutely no compensation to authors. From 1790 to 1874, American publishers had an informal agreement - the market was divided so that only one publisher copied any given British author. In 1874 however, a new publisher in Chicago found a new business strategy - to offer a full 'library' of affordable 10-cent classics for American homes... Finally an all-out publishing war followed, with some publishers (who had established formal contacts with British authors) starting to finally consider international copyrights.

The International Copyright Act 1886 and the Berne Convention
In 1875 the British Royal Commission suggested that the present Acts should be improved and codified and strongly advised the Government to enter into a bilateral copyright agreement with America to provide reciprocal protection of British and US authors. After preparatory work had been carried out for the forthcoming Conference of Powers (resulting in the framing of the Berne Convention for the Protection of Literary and Artistic Works), the International Copyright Act of 1886 was passed - but the US finally backed off from signing the Convention. The 1886 Act abolished the requirement to register foreign works and introduced an exclusive right to import or produce translations. British copyright law was extended to works produced in British possessions. The UK ratified the Berne Convention with effect from 5th December 1887.

Interestingly enough, the US did not sign the Berne Convention for a long time, doing it finally in 1988. For a quite long period, the 28-year period set by the founders of the US was deemed appropriate. Yet it started to lengthen during the 2nd half of the 20th century, gradually leading to the international copyright system where the copyright can be as long as 70 years after the death of the author. Exceptions are photographs and f ilms - for photography the Berne Convention sets a minimum of 25 years protection from the year the photograph was created, and for cinematography the minimum is 50 years after first showing, or 50 years after creation if it hasn't been shown within 50 years after the creation.

The system seemed to work relatively well even through the age of considerable technical inventions and discoveries - until the days of Internet arrived.

The current model of 'intellectual property'
The main categories are


 * Copyright may subsist in creative and artistic works (e.g. books, movies, music, paintings, photographs, and software) and give a copyright holder the exclusive right to control reproduction or adaptation of such works for a certain period of time. In addition to the copyright itself, the concept of related or neighbour rights has obtained an increasingly central role in IP (being also a major source of criticism and controversy). These include the rights of performers, phonogram makers, mass media etc.
 * A patent may be granted for a new, useful, and non-obvious invention, and gives the patent holder an exclusive right to commercially exploit the invention for a certain period of time (typically 20 years from the filing date of a patent application). Many countries also protect utility models which have lower inventive step requirements but also shorter protection (in Estonia also known as "small patents"). Note that all the other components of the 'IP' are relatively recent developments - for example, the first patent in the US was issued only in 1836.
 * A trademark (or trade mark) is a distinctive sign which is used to distinguish the products or services of different businesses.
 * An industrial design right protects the form of appearance, style or design of an industrial object (e.g. spare parts, furniture, or textiles).
 * A trade secret (which is sometimes either equated with, or a subset of, "confidential information") is secret, non-public information concerning the commercial practices or proprietary knowledge of a business, public disclosure of which may sometimes be illegal.

Patents, trademarks, and designs rights are sometimes collectively known as industrial property, as they are typically created and used for industrial or commercial purposes.

What went wrong?
The original purpose of intellectual property (as defined by the first copyright law in England in 1709/10 as well as by the founders of the U.S.A) was all good - by granting special privileges, to motivate an author not to keep his/her work secret (as was customary during the Middle Ages) but to encourage spreading the creation in society and promote further creativity. However, questions arose already during these early days - a good example is given by Wynants and Cornelis (2005) by quoting one of the most prolific creators of human history, Leonardo da Vinci: "Do not teach your knowledge, and you alone will excel." Are we sure we are on the right road?

José Luís Malaquias, a Portuguese engineer, has written a thought-provoking essay titled A New Economic System for the Information Era. He uses a humorous but thoughtful example in a comedy movie The Gods Must Be Crazy, where a chain of messy events is sparked by a Coke bottle fallen from a plane amidst the local natives. Until then, the Bushmen had been sharing their scarce resources, but here was a new and desirable object (looked nice, could be used to crush grain or bring water) which was impossible to duplicate. Thus, only one person was able to use it at a time, resulting in plenty of trouble. The initial gift of the Gods turned out to be the Pandora's Box.

But in a sense, the emergence of digital world and the Internet Age has brought along a situation which is inverse to the movie. Malaquias insists that the mankind's constant struggle for scarce resources throughout the history has planted the meme of resource scarcity so deep into our brains that even if the reality has started to gradually change, it still rules our way of thinking.

A resource may be rare in one context and plentiful in another (e.g. water, which was something usual and unimportant for Nordic people and a top resource for, say, Arabs). The difference of paradigm is perhaps the most clearly visible in a new kind of resource - information -, which has gradually risen to be one of the central resources. Information in its pure form differs from earlier resources: it can only be copied, not moved (in the sense that it cannot be exhausted - Benkler in his The Wealth Of Networks also refers to it as a "non-rival good"). Therefore, the legal measures which were suitable for physical resources are increasingly obvious to be unsuitable for information.

We might argue that information in itself is not anything new. But only the advent of Internet and digital media made storage and distribution of information so easy and inexpensive that the value of the information itself, not the medium (e.g. the heavy, hand-written and chained books of old) became central.

The problems with the traditional approach
It is not so rare to see people from humanities and those from sciences scoff at each other. The engineers seem to lack imagination, style and expression, while the humanities people may look like hopelessly naive and impractical dreamers who don't really have enough brains to do the "real thing".

In fact, also law is very different from engineering and science. Scientific methods prescribe experiment, impartial observing and logic to obtain maximum degree of objectivity. Law, on the other hand, is subjective to the bone - it is based on cases, precedents, often also on consensus and conflict management. To make things worse, different places and people may have developed radically different legal systems. And as such, it is doomed to be reactive - always playing catch-up with the reality. So the problems start already with the inevitable - law and technology are thoroughly different in nature.

The time factor has totally different roles in legislation and digital world. A good law is the one which will not change monthly (having a different rate of VAT every month or different penalties for crimes every year would hardly be desirable. In some cases, legislation has power over people's life and death - thus it cannot afford hastily released 'beta versions'. Perhaps an example can be given by the controversial Patriot Act of the US which was passed at the Congress only about five weeks after the September 11, 2001 - one of the main arguments of its critics is that the process was far too hasty for such an important issue, resulting in an immature and imbalanced law (both supporters and critics are extensively quoted in the article referred above; see the sources).

The digital world of today, on the other hand, develops with great speed. Moreover, practically everyone can be a creator or contributor (the Wikipedia quoted above being one of the prime examples). The five weeks which was an incredibly short period for the Patriot Act is plenty of time in the digital, networked world. Another example - according to the World International Property Organization, computer programs are still protected as works of literature, as one of the central international treaties in the field, the Berne Convention for the Protection of Literary and Artistic Works, has the most recent amendments from 1979, before even the birth of IBM PC (rather, it was complemented in 1996 with the equally controversial http://en.wikipedia.org/wiki/World_Intellectual_Property_Organization_Copyright_Treaty WCT]. So here is the hoary, grey-headed Old Man Paragraph trying to keep pace with the sometimes hyperactive Internet Kid - and having increasing troubles with that. The two are just too different.

Another quite serious field of problems are ethical questions. Leonardo da Vinci used fine mirror writing to secure his secrets - but we can wonder if some of today's IP extremes make a creation as useless to the rest of society as did Leonardo's secrecy. And more questions arise.


 * How much is enough? How long-lasting and extensive privileges should be enough to motivate authors? Human greed can be endless if left untreated - a good example is an infamous in Internet 'professional epigrammatist', who coins short sentences and sues their 'unauthorised' users.
 * Should IP allow for criminal passiveness - e.g. when a large pharmaceutical corporation discovers a vaccine to AIDS, but keeps it under hard 'protection', maximising its profits but leaving thousands of people to die without cure? Or to apply 'trade secrets' to cover up potentially harmful effects of some drugs - one of the best known examples is the case of Thalidomide, which was a sedative brought to market in 1950s by faked tests and resulted in serious birth defects in children.
 * Is it acceptable to effectively block the development in a whole field of technology? Martin (1998) has given two examples: the telephone patents of Bell blocked the use of radio communication for 20 years, the same happened to the General Electric patents on incandescent lamps which delayed the emergence of fluorescent lamps for 20 years.

Another telling example is given by Lessig (2004) about the FM radio which was invented by E.H. Armstrong in the US. The radio giant RCA which controlled the market with its AM radio at first hoped to get additional benefits for their business - however, when it was clear that Armstrong had invented a potential competitor (and per se a superior technology!), the corporation used all kinds of legal steps to corner the inventor, who finally went into bankrupt and committed suicide

As we have already learned, Robert Theobald has introduced the "mindquake", meaning the situation where previously valid knowledge loses its validity and meaning. An example of mindquake is the experiences of various specialists in the former Eastern Bloc who were initially trained to operate under the conditions of Marxist planned economy. When these societies entered the transition into market economies, many of these people lost their ground. Right now, it seems more and more probable that the current system of intellectual property (and property legislation in general) has been hit by a similar phenomenon.

Lessig also describes a tragicomic case of the Causby brothers, a couple of chicken farmers in the US in the middle of the 20th century. The farm was located near a military airbase and the low-flying planes terrified their chickens. The brothers finally sued the US Air Force - based on the property laws of the day. Namely, the landowner was considered to also own all the resources underground (to the centre of the Earth) and the air above the land up to unspecified height. Based on this, the Causbys sued for property violation, but were harshly dismissed by the standing judge, who simply stated: "Common sense revolts at the idea." In the largely case-based American legislation, this was enough to radically change the understanding of the whole concept.

The third large circle of problems is related to overextending. An Oriental saying goes: "Those who know do not talk, those who talk do not know" - in many cases, patent officials are not able (or willing) to fully grasp the details of an application, using 'better more than less'-approach instead. The telephone and lamp examples by Martin show this quite well - the problem was not so much even in the patent per se, but in its unreasonable reach. However, it would probably be far too optimistic to assume that patent officials will be able to handle the growing diversity of digital world better in the future.

One of today's famous speakers for free software is a hacker turned into lawyer, Eben Moglen. With similar insight to Brian Martin quoted above and about at the same time, he published his paper Anarchism Triumphant - Free Software and the Death of Copyright in a network magazine, First Monday, in 1999. In his sharp and witty style, Moglen uses a diverse set of examples from numbers to Isaiah Berlin's fox and hedgehog (the fox knows many things, the hedgehog knows only one, but the one is big...). He also concludes that the hedgehog has a couple of relatives:


 * the IPdroid - knows perfectly the IP legislation, everything else is "no data" (i.e. the droid is dumb as brick concerning everything outside IP)
 * the Econodwarf - is obsessed with economical motives, sees them (and only them) everywhere. These are extremely plentiful.

Thus Moglen sees the ample representation of these two creatures in the copyright and IP circles as a major reason to its imminent downfall.

The problem is especially well seen in the field of software - even assuming that the expert is qualified (which is often not the case - individuals who are equally competent in the details of property law and the technical nuances of programming technology are not so common), software is simply a too complicated phenomenon to allow adequate estimate of novelty factor. The result of all this can be seen at The FFII Webshop. To quote Lessig: "What the law demands today is increasingly as silly as a sheriff arresting an airplane for trespass. But the consequences of this silliness will be much more profound."

Sir Timothy Berners-Lee, the inventor of World Wide Web, decided to release his creation into public domain, which led to founding a whole class of new media. One could speculate what had happened if he had decided to keep it proprietary. Maybe he had a bit more money today (although as the creator of the Web, he has an enviable authority and a position in history, which definitely also mirrors in his welfare), but our society would almost surely have no web media, no online journalism, wikis and blogs, no online banking - not until 2011 when his 20-year patent would have expired.

The same man has said in 2002: "The reason people invest their lives and careers (working on new technology) is that they don't expect some company to come into take it away from them. Just the rumor of patents and royalties will put a two years stop in development -- we can't afford that. /.../ If we don't get this intellectual property issue right, there is a danger that the next Internet revolution won't happen. It could mean that the Semantic Web doesn't really happen." . The Semantic Web, or the next-generation Web is by definition dependent on interoperability and unrestrained interchange of information - things which seem to be increasingly burdened by IP regulations.

Finally, in June 2006, years after the invention of the Web, he writes: "When I invented the Web, I didn't have to ask anyone's permission. Now, hundreds of millions of people are using it freely. I am worried that that is going end in the USA." .

The digital dilemma
Borrowing a book from a library is a trivial thing. At the same time, the so simple process includes elements from law (you need to admit that the book belongs to the library), social norms (you will not plan stealing it), economy (you need to purchase a library pass) and technology (the borrowing process). And when they finally got it working with physical books, the digital environment (or new media) turns a lot of things upside down again.

The simplest example: a printed book can physically be used by one, maybe two people (at the same location) at a time. An electronic document has no such limits - one needs a phone line (for modem), a LAN cable (for wired network) or just a suitable location (with wireless networks).

It may sound like a happy message to both consumers and the whole society - all content of libraries will be accessible 24/7 in your home computer and is never closed or used up. It should also make publishers' life easier and give them new possibilities. Yet most of those are haunted by an old fear - what if the first purchased copy will be also the last one? They will just "pirate" the rest! And to repel the haunt, they will release their own onto the consumers - a mess of technical and legal measures which ultimately hampers the whole society's access to their own intellectual and cultural heritage. So all the new technology has largely been a double-edged sword for the traditional IP circles - more quantity, quality and access, but with seemingly threatening the very economic base of the system.

Thorough changes
During the recent times, the IP has been subject to the following changes:


 * 1) Digital media has radically simplified copying. The costs are negligible for both legal owner or licensee and an illegal user. A digital copy is a perfect twin which can be copied further. So one of the historical main obstacles to illegal copying - high copying costs and the lower quality of copies - is almost gone.
 * 2) Networks have radically changed distribution. At today's networks speeds, moving large chunks of data over the network is inexpensive and simple. So an author can easily distribute his/her work - and others can copy it as easily. Therefore, to keep business going we need to either kill off all "piracy" (not really possible) or to find a new business model.
 * 3) The Web has radically changed publication. Almost everyone can be a publisher with international reach. In many cases, publishing information will bring up IP-related problems. And given the reactive nature of law (as described above), in most cases the law is still trying to catch up. This leads to a major problem in today's IP field (especially seen in the case-based US legal system): the law is not enough, being able to interpret it suitably to a party is vital. So the weight will shift from the objective (who is right according to the law) to subjective (who can afford better lawyers).

Things get complicated
Among things that complicate the situation is the mess of different parties and interests what is directly affected by the constant development of technology (e.g. the easy publication over the web may suit both to author and reader, but will threaten the profit margins of publishers). Until recently, selling someone's creation implied monopoly rights on it - nowadays we see an increasing number of different approaches (especially in the IT field):


 * giving up some rights/profits hoping to win more in another market segment - the freeware/demo model
 * developing the consumer community and building second-tier services - perhaps the most used model on free software

Especially the latter one has spread widely - not only in software, but other creative arts as well. Some aspects of it (especially user communities) have also been adopted to proprietary models.

Another problem is the territorial nature of IP. Different countries have got different laws, yet the Internet is global. Perhaps the best example is The Pirate Bay - the worldwide collection of Bittorrent trackers, many of which offer illegally copied proprietary software or other content (music, movies). So the hosts rely on the fact that they comply with Swedish laws and tell all the US lawyers to get lost (using a creative arsenal of diverse heavy insults). Note that even the recent legal vendetta against them has actually failed to change anything, much less so for the rest of the host of alike sites (Mininova etc).

Another example of the legal diversity is Linux. Due to excessive copyrights and patents in the US, American variants (distributions) do not include some software packages which can be legally contested (a well-known example is MP3 playback). At the same time, many European distributions include them.

A copyright reform?
Most recently, two Swedish Pirate Party activists - its founder Rick Falkvinge and a member of European Parliament Christian Engström - published a proposal titled The Case for Copyright Reform. The six-point agenda is rather convincing:
 * Moral Rights Unchanged
 * Free Non-Commercial Sharing
 * 20 Years Of Commercial Monopoly
 * Registration After 5 Years
 * Free Sampling
 * A Ban on DRM

Conclusions
As seen from above, the phenomenon currently known as IP is actually a diverse subject which has recently been increasingly contested by both the rapid development of technology and its internal shortcomings (especially its reactive nature). It is quite clear that the age of Internet and new media cannot be regulated by laws dating back to the steam engine - but the question is which one of several options would be the most feasible?