Welcome and Introductions (Mark McKenna)
Barton Beebe (NYU School of Law)
The KE raises fundamental questions about what we mean by “innovation” and about what kind of innovation industries without intellectual property are able to produce. Dave Fagundes’ work on roller derby naming, Aaron Perzanowski’s work on tattoo artists fit into the book’s framework.
Many of the industries in the book aren’t technological but appeal to taste/aesthetics: cooking, standup comedy, fashion, fonts—may be high tech but still based on aesthetic choice. Football strategies, financial instruments, open source/database—separate from his comments.
Can one’s thinking be directed by the divide between the aesthetic and the technological? If so, what do we mean by aesthetic innovation? The Constitution apparently instructs us to seek aesthetic progress. Slippage in the book between innovation and creativity: do you really want to talk about innovation in standup comedy? Case studies: innovation seems to mean “more,” diversity, quantitative definition rather than qualitative. More stuff out there as a result of sharing communities that allow copying or regulate it via internal norms. Some of the more might be better, but that’s not the focus.
Maybe that’s no problem but in fact all we can ask for. Let me push against that: excellence should be part of our definition of innovation. Something that is new and that has value.
Fashion: troubled by the basic argument that copying allows the churning of fashion and thus demonstrates innovation. The core example of the book is the fashion industry, but Beebe sees an industry of renovation, not innovation. Oprah to Ralph Lauren: How do you keep reinventing? He’s not a pioneer. He’s a tweaker, but not even a tweaker of fashion. Vintage-inspired women’s clothing: another example from the book. Ralph Lauren is a great innovator in branding and the sale of distinction, but not in fashion. How many pioneers have there been in fashion, or is it just infinite tweaking? Susan Scafidi would reel off names of true innovators, but he’s not sure he’d call that apparel fashion; at some point it becomes art.
Book recognizes this problem; discusses how design patents don’t work because so many designs are reworking. Fashion houses don’t claim this season’s offerings are “better” than last season’s, just that they’re different. If this is the core example of innovation, Beebe considers the thesis not proven. Creativity, yes; innovation, no.
If there were more copying, would there be more innovation?
Innovation seems to be in branding/commodifiable forms of rarity. Normatively: Is this the kind of innovation we want? Standup comedy or better food, sure, but he wonders in fashion whether we should be concerned about it. [I note there’s a gender piece here in what kinds of variety Beebe appreciates.]
Renee Gosline (MIT Sloan School of Management):
The “Real” Value of “Fakes”: Resilience in the Face of Brand Imitations
Power dynamics reflected in the way we signal identity, membership, status, Anglophilia, etc. Counterfeits are democratizing on the surface, but a lot of the walls are resilient to this process. Brooklyn Museum discovered that some of its antiquities were fake: decided to display them along with the originals. It showed people how to value the real thing by juxtaposing it with the fake.
Her research is on the consumer side. Regulation works with norms and cognitive processes; until those work with the regulation, you don’t truly have an institution.
Does counterfeiting result in contamination for consumers of authentic brands? Are consumers substituting counterfeits for authentic products? Her study asked people to figure out whether a product was real or fake—they often had a hard time at least via pictures. In the real world, you often can’t inspect the lining of another woman’s purse. When you don’t have social cues, confidence in ability to discern real/fake goes down, and willingness to pay thus goes down.
When you show the product in context, people are more confident in determining whether or not a product is real or fake. Authenticity is a product of the social context; who seems inauthentic to the product. Willingness to pay also is affected by social context.
FB group: “Darling, I can tell by the rest of your outfit that your Louis Vuitton is fake.” Social shaming: mock imitators. In the absence of successful regulation, norms still protect the brand.
Consumer interviews: response to raids in Chinatown: consumers say “This is a waste of time for everyone.” Bostonian said: buying fakes doesn’t put you into the rarefied air of rich people. People on the ground decide what authenticity is and penalize those who try to step into the “wrong” place. Having the receipt from the store isn’t enough. [That famous Pretty Woman scene?]
Many times, counterfeits don’t impact willingness to pay. If there’s no social context, though, there’s a significant impact on willingness to pay. If the product is counterfeit but the user is high-status, then people do change willingness to pay. Fertile area for investigation: those are the people who others want to imitate.
What about consumers of counterfeits? 2.5 years of ethnography on a street market (82 transactions, 32 interviews); social network (Tupperware party with counterfeits instead; upper middle-class): 112 consumers at 14 events, 43 interviews. Finding: Counterfeits aren’t substitutes. People who use the fake start to realize how far away from the real they really are; the brand becomes more salient, people pay more attention to it, and people experience cognitive dissonance. They start to think: if my possessions are fake, what am I? 46% dumped the fake and converted to the real, even though they started off thinking they were too clever to pay that much money. You can come to love the real through the fake; see people with the fake and love your real more.
Pam Samuelson told a story about a trip to Hanoi with grads, when the richest people on the bus wanted to know where the counterfeits were—she was fascinated with their fascination. One woman who was among the most adamant was a senior partner at an LA law firm who’d bought a pirate Bridge Over the River Kwai DVD and it ended before the movie did! Why was it so important: because it was so exciting!
Gosline: Yes, it’s the high going low (and the low going high) that provides the thrill.
Linda Przybyszewski (Notre Dame Department of History)
Ralph Lauren is not an innovator! “Designer” is the term used in fashion for true innovators; giant conglomerates travel the world for boutiques looking for reference items to copy. Hungering for the fashion study equivalent of French chef study. The garment industry is so segmented, enormous, and complicated; many young designers celebrated as innovators get eaten up. One reason is that they don’t know much about finance, but another reason is copying.
Elizabeth Hawes: American dress designer, active from the 20s; she was first sent to Paris to copy, but was then kicked out for the copying, and then started to do her own designs. In the Depression, she found it impossible to survive on her own, so she started contracting with wholesalers. Some would give her royalties. Other designers were destroyed by wholesalers who didn’t keep their promises of royalties. She found the “churn” of fashion soul-destroying: didn’t have time to design/innovate. The cry for something new dulls the senses and stops the imagination. Ended up writing books, some bestsellers—appreciated the copyright rights she got! Complained: French designers were financed, protected, and publicized by the gov’t and the fabric industry; not so in America. So do we have a way to measure/compare French v. American innovation? Hawes ends up advising would-be designers to give up the idea.
What is the alternative? In industries in which copying is rampant, there’s no point in taking entrepreneurial risk, and at least some people will know that and write books instead.
Rebecca Tushnet (Georgetown Law Center) Norms no less than laws are products of power, and in studying nonlegal regimes for defining and defending creativity we should also be attentive to the power relations expressed, challenged, and reinforced in various fields of "IP without IP."
Innovation in sports as example: innovation in football v. basketball, where preference for the current system has apparently been strong enough to prevent the success of the full-court press even though weaker teams can use it to beat more skilled ones. Compare Pierson v. Post, which I just taught: Post’s problem with someone swooping in to deprive him of the benefits of the hunt could be solved by gearing up the way fishermen gear up, which is to say by innovating (perhaps adding sniper rifles to the hunt), but that would’ve changed the meaning of the hunt in ways inconsistent with its signification of aristocracy. So what innovations are considered within bounds depends on the operations of power, and the question is regularly whose preferences about the meaning and scope of a particular field will be put into practice, even in the absence of a formal monopoly like AT&T.
Malcolm Gladwell suggests that “When underdogs choose not to play by Goliath’s rules, they win.” So one question is why they ever decide to play by the rules! Gladwell talks about the effort of breaking the rules, but there’s also social disapproval/norms. In Beebe’s terms: someone gets to judge excellence, and sometimes their rules are different from those of the creators. Sometimes the creators are really bad judges (my 5-year-old does great work … for a 5-year-old giving stuff to her mom), but I am attracted to the benefits of quality neutrality from a regime perspective.
Another important point in the book is that people who the authors call “tweakers”—not the drug addicts, the other kind--are often directly responsible for refining a leap by a pioneer and making it much more productive/valuable, and this both incentivizes tweakers and leads to big debates over credit allocation. Copyright and patent don’t favor tweaking because of the control they give patentees and copyright owners over follow-on innovation/derivative works. Compare this with how fan creators in noncommercial spaces solve the problem: they don’t generally make formal IP claims or contest ownership of the core products—though they sometimes do label themselves better custodians of the spirit and meaning of a franchise, like Star Wars, than the formal copyright owners. But they do follow robust norms of attribution and often even permission within their own communities, thus trying to manage disputes in a space where only law’s shadow reaches. Fan authors are recognized by other fans as entitled to credit for their particular contributions, though these norms are often contested and changing as new fans come in and new technologies change the means by which fan productions are disseminated.
One regularly encounters attempts to formalize norms in some way—in the softer sense through best practices statements such as those put out by AU’s Center for Social Media, and in a harder sense through proposals to recognize certain sorts of norms in the law. Having just reviewed Demsetz for my property class, I kept thinking of the ways in which the formation of explicit property allocations through law can be slowed, or perhaps more importantly changed, by struggles between different groups based on their beliefs about proper allocations, in other words, based on their expressed norms. Special rights for session musicians in the new digital sound recording performance right is an example of encoding norms about fair compensation into law.
But when only certain groups show up to the formal lawmaking process, of course, their interests are unlikely to be represented. The case studies the book illuminate how poorly copyright law’s standard incentive theory describes a large number of creative endeavors. Why is that? One key insight is that, in Madhavi Sunder’s words, identity politics interact with intellectual property concepts: intellectual creations regularly have as much to do with the first kind of “IP” as they do with the second. Put differently, authors understand their works to express and form an identity that is both unique to themselves and part of a larger culture. This cultural context both incentivizes creativity even in the absence of conventional IP ownership and shapes the content of what gets created.
Intellectual property, like property generally, allows some claims to power and authority and deauthorizes others. I’m going to talk here about comedians: modern comics think of their jokes as being intrinsically tied to their own identities, often invoking specifics of race, gender, sexuality, and class. Oliar and Sprigman, in an argument adapted by the authors here, argue that comics have achieved a sort of self-help propertization of their jokes by moving to identity-specific routines that are not as easy to appropriate. But not only are the enforcement mechanisms tribal and more effective for men willing to threaten physical violence, but this definition of comedy depends on valuing certain kinds of comedy and preventing certain kinds of copying—as with chefs, comics don’t seem to mind if individuals retell jokes to each other, like my husband retelling a certain hilarious Louis C.K. line. Norms tend to be directed at other group members and uninterested in the behavior of nonmembers, not just because of the inability to control nonmembers but because a nonmember’s activity doesn’t implicate the same kind of issues of respect and acknowledgement.
Even where norms govern instead of law, there is always a question of whose claims count and whose claims, though an alien might think them similar, are not even recognized as such. The norm comedians articulate is that it’s not permissible to deliver material that isn’t theirs. But that’s not, in point of fact, true. (I’m not questioning their research nor the sincerity of their sources: the point is that their sources believed something that was self-evidently untrue. This is always a signal that something very interesting—usually something about status—is going on.) In fact, comedians often provide material for other comedians.
The authors give us two common situations of this type. First, comedians may help others create jokes. There is no joint authorship norm. People who provide parts of jokes to comics have given a gift. And as Carol Rose and Lewis Hyde among others have noted, a gift can also be a burden, because it creates an obligation for the recipient. The anxiety generated by a gift can be managed by reciprocal norms: the contributor will perhaps someday receive assistance in creating his own jokes, and also be able to claim complete ownership of those jokes. The contributor’s creativity and labor when she helps out, however, are not her own. They disappear into the primary comedian’s joke.
Second, comedians may use jokes created by other people, who submit them and get paid if their jokes are used. Like the singer/songwriter model in music, the stand-up character can be as constructed as any boy band. Now, the authors maintain that the practice of using writers is much less common than it used to be for comedians, and relatedly that comedians today invest relatively less in performative aspects (costume, movement, props) and relatively more in individualized schtick. One reason comedians invest more in writing their own jokes is, they suggest, that it is naturally harder to write for another person with a unique persona than it is to write generic jokes. This extra difficulty can be expected to raise the relative price of buying modern, identity-specific jokes.
Yet buying jokes is apparently a perfectly legitimate means of becoming their exclusive owner even among stand-up comedians. Writers can’t claim the jokes they wrote even in seeking to prove their comic credentials. Some creative work counts in producing property claims; other creative work doesn’t. It’s about power.
There’s more: all this depended on a particular definition of “comedian.” There’s actually a gap between what The Knockoff Economy calls “rival creators” and the group known as “consumers.” Expand the frame, and a property norm may only apply to a subset of broadly similar activities—a truly local ownership norm. This matters, among other things, because copying may work very differently in the other subsets, most obviously in advertising where becoming a political slogan (“Where’s the Beef?”) can be confirmation of fame and value. Sitcoms have extensive writing staffs devoted to producing jokes for hire, as do The Daily Show and The Colbert Report, customized to their public personae. I therefore have doubts about the proposition that writing for another specific person is more difficult than writing generic jokes, and thus relatively more expensive. Even accepting that this is harder to do than to write for oneself, the supply of aspiring writers outstrips demand so greatly that it seems unlikely that writers can demand much of a premium for writing in a different voice. Indeed, the assumption that writing for a specific character is especially difficult may itself be an effect of the ideology of romantic authorship in which genius is individual, unique and nontransferable.
I greatly enjoyed the book and its examples; my comments are designed to point out that when we look at creative situations, it never hurts to keep in mind Lenin’s question about the meaning of history, translated as “who does what to whom?”
Fagundes: maybe slowing the fashion cycle would get us better clothes. Scorecasting: football has it all wrong, and there’s a better strategy to be adopted. But people haven’t done it because if you tried this and lost even once you’d be fired: fear/other forces constrain and affect innovation. The team that did the most innovating in pro football was the worst, the Cincinnati Bengals—being bad forced them to innovate.
Nicole Stelle Garnett: is this innovation or churning? As a land use person, her question was whether we were getting more or better? Not just laws that prevent copying but those that require certain aesthetic taste—not uncommon in real property, where codes often require old-looking houses because architects have decided that there was a certain perfect point in time. Having nice houses will make us better people! Miami, Denver, El Paso have adopted these New Urbanist codes focused on aesthetic choices, freezing things in time. In art, they favor crazy/new aesthetics, but in land use they may require copying!
McKenna: we will always get innovation; the inescapable question is what kind. The legal rules can shape/force a path. There’s no such thing as neutrality in the legal rule, and it’s better to make that choice on the surface. This also matters to rights v. utilitarianism. We are picking winners: downloading has been bad for some players in the music industry and good for others; we have to decide what matters.
Sprigman: Defense of more v. better: deepest fountainhead of innovation is natural selection. Just doesn’t know what beauty might look like in 20 years.
Przybyszewski: Technological fabric innovations: Gore-tex etc.—these are clearly better than what preceded them within their segment, not just different.
Yi Qian: Theory: competitors lead innovators to innovate more in searchable qualities—surface materials of shoes, workmanship; experiential/functional attributes that take more time to discover would get less innovation—durability—even if quality of those attributes would stay the same. Confirmed by Chinese data. Pharma: see innovation more on shape and color. Music: innovation on packaging. Welfare implications may differ by industry. In fashion, where people derive benefit from appearance, this may be all good, but maybe not so much in pharma.
Samuelson: agrees with Beebe about the slippage between creativity and innovation. Is there also slippage between innovation and improvement? Is innovation just newness? Patent = novelty. But new and inventive may not be better; patent is agnostic about improvement. Though we expect that people won’t take the time to patent things that aren’t improvement, if you actually look at patents that’s not true at all. Improvement innovation can be measured on the tech side only sometimes. Rube Goldberg patents. Copyright side: we can judge whether a movie is good, but it’s just much harder.
Sprigman: patents may be improvements or not depending on the circumstances: a water pump good for an undeveloped area might be a terrible idea for South Bend. Fashion: some years are good and some aren’t; he thinks we tend to undervalue change.
Raustiala: some people push back on fashion churn: isn’t it bad for social/environmental reasons? He thinks it is kind of bad. Book takes a catholic view of saying that we don’t know what counts as good; we aren’t social planners so we said more is better and elided innovation and creativity.
Michael Heller: the dichotomy real/fake also has a spectrum—there’s a world of fake Rolex connoisseurs. What’s the implication of the specturm of fakes? Reinforces Gosline’s work.
Also, thinks Przybyszewski was too pessimistic about Hawes’ message. Her reputation allowed her to make money. And most of us don’t make money on our books! They’re collateral effects of other things we do.
Beebe: Evolution as a model of innovation is provocative. Darwinian view: there was no progress in evolution—that’s what was so shocking about it! If we’re just meandering along, what’s the point?
Lea Shaver: acting and music are like fashion: just as hard to make it there even with copyright protection! (I wonder what the relevance of the “cost disease” is here.) As for Gosline: are these insights only applicable to showoff goods? Recounts her experience of starting with cheap smartphone and converting up to the iPhone after learning more about smartphones/getting sold on the features.
Innovation: can we say a field has advanced in 20 years? Easy to say in computing. Can we say that comedy is improved from 20 years ago? Football seems to have improved in sophistication. What about fashion? [What about teaching?] If you looked quantitatively and qualitatively in people’s clients, they can afford more of what they like—a big part of innovation is making stuff cheaper. Thus inclined to the “more” is better thesis.
Gosline: “gateway drug” thesis has come up before as a phrase people use to describe their experiences. More likely in the case of signalling goods because the social reaction helps to make the comparative aspect more fertile. Even with nonsymbolic, functional goods, it can still occur if your experience with the cheap version is suboptimal. Even things that aren’t seen can make people feel a certain way about themselves—buy Tide to show they care about their families.
In terms of what’s real or fake, the binary is problematic, which is why her research looks at that—but she emphasizes that people who’ve paid for the real thing also get called fakes. Some of the judgments on the FB page were wrong; people were deemed fakes even if they owned the real thing.
Christopher Buccafusco: Surprised at willingness to accept anything goes, given that preferences are (Sprigman has argued!) shaped. Systems are embedded in systems. Football: internally, wins and losses are equal/zero-sum in football so it’s tough to talk about progress. Individually, progress is possible. Externally, you can expand the size of football’s pie. In baseball, steroid use expanded the audience for baseball, which was good for baseball! Within and across fields there will be different kinds of welfare.
Sprigman: true, taking preferences as given here. Consistency is overrated (unlike change). His experiments look at preferences structured by law; preferences structured by nonlaw sources may be resilient. Not terribly interested in debiasing here though confident that their preferences are not exogenous.
David Opderbeck: we’re all circling around teleology/progress. Darwin upset the watchmaker universe and showed that evolution produces waste. Using that metaphor might be helpful.
Avishalom Tor: in competition, we don’t question that consumer demand drives it all. If we give up that idea, our structures of analysis become unstable (which might be the right result).