Sociology and Psychology of IP, Session 3: What can we learn from IP-free zones?

Discussion leaders: Kate Darling: attribution as something that people want rather than money in “negative spaces.” They know they can monetize their reputations.  Systems of self-governance often differ from those of formal law. 

Attribution preference is not just about fairness/ego. We also see in comparatively rational actor commercial setting that attribution has a lot of value.  It’s not just social norms; market mechanisms/responses as in fashion, cocktails, Nollywood, porn.  In porn specifically, my work indicates that companies create info goods, but create a secondary market they can profit from. They link the two through branding.  Similar to other ways of monetizing reputation.

Flexibility of self-regulation: Norm systems get criticized a bunch, but beautifully efficient at adapting.  Fagundes’ follow-up to study on roller derby names—social norms changed over four years since the original study.  You interpreted this as a breakdown, but I’m not sure this was a market failure from an IP perspective. People were surprisingly willing to just completely overhaul the social norms of what’s fair in a very short time period.  Very powerful illustration of adaptability of norm systems to what’s best for the community.

Dave Fagundes: (1) IP unavailable: recipies.  (2) Apparatus of enforcing IP may be available in theory but not in practice.  (3) May be practically available but unused b/c it doesn’t give people what they want.  (1) and (3) sound different but arise for the same reasons/desires.

Hard to disentangle social norms (altruism) from market norms (complete self-interest). Leave a restaurant w/o paying = arrested.  Leave a dinner party w/ paying = rude!  Which of these dominates in IP free zones?  Usually we think it’s noneconomic social norms—tattoo artists, chefs, etc. find people using creative production w/o permission, act as if honor is offended. But that’s not to him obviously the answer b/c in many instances their creative production is tied up w/livelihood: defending professional turf of comedy, fashion, etc.

These systems track poorly onto the term “IP.”  Most of the systems he considered are closer to TM/brand management.  In many of these settings, including magic tricks, the systems are motivated by a desire to protect creative work and to preserve a brand, intersecting TM/©.  Thinks it’s puzzling that invention seems absent—domain of patent doesn’t seem represented in the IP-free systems he’s looked at.  [Eric von Hippel’s work?]  IP systems are very hostile to formal legal enforcement. If you threaten legal action, you lose the sympathy you usually get when you are copied.  True in Order w/o Law, too.  In some of these subcultures, people claim coolness and lawyers are not cool; you should take care of things w/in community.  Or people think the stakes are too low: disproportionality. But that’s only true where it’s a real extracurricular.

Norms are difficult to scale.  Law scales by using the state; IP-free systems scale in 2 ways: (1) keeping things really simple, like “don’t copy w/o attribution” or “don’t copy.”  Or (2) norm entrepreneur or norm yeoman, doing hard work of administration that manages a registry. Derby is his only example. These are fragile. The second somebody decides they don’t want to do this for free, it can fall apart.

Not really in the shadow of law. They operate largely independently of law. You can TM a derby name, but this is ignored. Consistent w/Ellickson’s thesis that legal centralism is wrong. But most people think they’re consistent w/law. People in derby would tell him “of course my [derby] name is copyrighted,” and he’d sometimes suggest they were wrong and they’d reply, “I think I know about my own name.” 

These systems are driven largely by moral intuitions.  First in time = first in right; don’t steal my stuff; give attribution.  The factors they use in determining similarity in derby names look a lot like Polaroid factors, even though no conscious attempt to imitate law.  

W/exception of central organizing structure, how do we know they’re systems at all? If driven by moral intuitions, why isn’t it just similar behavior cropping up in similar circumstances. Variation: maybe this is the development of a system that reinforces behavior consistent w/our moral intuitions.

[Now I really want to think about norm violators v. norm entrepreneurs.]

Commentators: Andrew Torrance: overgrazing leads to ostracization—there’s a dark side to IP-free zones. At least IP has defined penalties; in the Wild West you’re not sure what they will be. Anything that can be done in secret is potentially IP-free: people and companies do a lot in secret.  Especially processes that lead to information.  Things done in other countries.  Law has been lurching to freeing up vast areas of IP (patent)—methods, diagnoses, software.  Industry recognizes there’s more freedom now to do stuff w/o worrying about being prosecuted. 

Biotech: certain things ought to be patentable that aren’t, such as products of human physiology.  PTO will give you a patent on that, but they almost never win—doesn’t know of a single case where the patent has been enforced when the process takes place in the human body. There’s no doctrinal reason, but repugnance might explain it. Human embryonic stem cells, same thing.  Section 33 of AIA: formalizes Weldon Amendment, don’t allow patenting of anything connected to the human body: no claim may be directed to or encompassing a human organism. People hadn’t been patenting in that area typically; maybe that wasn’t commercially valuable or it was repugnant, but now it’s formally an IP free zone. It’s a natural experiment. 

Jim Bessen: Software: rewriting code—you don’t pay attention to IP where you’re starting from the position of not knowing ultimate value, at least in a context where software is trade secret in fact, not shared on discs. Most software is not prepackaged; most either contract programming or self-development by companies. Great deal of need for tailored, customized software responding to idiosyncratic needs. That’s a problem for/reason why IP is practically not important for a programmer in active development.  FOSS: not entirely IP-free, in that it relies on © and contracts, but there’s a large literature on why people do it. Sometimes it’s reputational, learning, job-seeking.  But also needs: modular software/APIs.  Non-IP activities taking place even though there are also areas where IP is critical. Law needs to incorporate policies to balance these issues.

Aaron Perzanowski: Did we need a unifying theory of case studies for our book on IP-negative spaces, or do we need to provide policy implications? We didn’t think our work needed that at this stage.  We have 20-25 different case studies to point to in this space, and there are certainly trends that emerge, such as attribution.  But so far what he sees is communities that have more differences than similarities.  What kind of creativity does a community value? What does a community care about in addition to/instead of creativity? Who counts as a creator? What counts as creativity?  [What about the possibility of “family resemblances” in the category theory/Wittgensteinian sense?]  What are their histories, how do they change over time, and in response to what?  When you see the range, there’s value in doing more of this work, in part because maybe it builds to some bigger theory and maybe some policy recommendations, but these projects also have value in themselves.  We need people to do more of this work.

Where do otherwise stable norm systems break down? Where are there points of tension? Sometimes it’s commercial/noncommercial. Sometimes it’s insiders/outsiders.  We’ve seen some relatively high profile litigation in the graffiti world and the tattoo world. These are really rare, but when they happen, they get attention. Has concerns about what happens when law enters the picture for groups that have been blissfully unaware of/uninterested in the law. Law creates categories/changes the way people think. 

Abishek Nagaraj: Good job of studying IP free zones v. struggles.  IP free zones are not only for weirdos.  150 years ago, the globe was an IP free zone. Petra Moser has studied actual physical inventions as outcomes, not patents.  She shows that levels of innovation weren’t affected that much, but the direction of innovation was. Tech itself may allow for secrecy—chemicals that are hard to reverse engineer v. machines that are easy.  IP-free zones lead to tech that encodes secrecy. 

Another promising area: open source, digital innovation.  Mostly b/c of the way that computers work.  Get to track over time how activities are happening.  Free inbuilt measurement and logging devices of great help to researchers.

Having said that, there are lots of contexts where it is really hard. Chefs, tattoo artists.  Harder when we don’t have IP-full and IP-free subzones, so we can’t compare easily; also the cultural products aren’t centrally organized—hard to figure out what’s going on without painstaking interview/ethnographic work.

Lemley: It is interesting to think about the fact that these cultures do seem to have been put in a marginalized category. Which comes first?  Is this not IP b/c we think it’s not important, or not important b/c it’s not an IP space?  Depending on how we think about this, there are a bunch of things that fit in here that we don’t think of as insular communities—an atom that’s mostly empty space, as Andrew Torrance says. One key issue is whether we include trade secrets in the category “IP,” b/c a lot of valuable economic activity thrives in part b/c of secrecy.  It may well be that it’s really a social norm doing most of the work, with a legal backstop the same way there’s a legal backstop for tattoo artists. Financial industry, until quite recently, fit into this model, and even then, everyone in the financial industry hates patents.

Ways in which we create IP free zones by backing off the scope of patentable subject matter. Suggests possibilities for research that don’t raise Nagaraj’s problems. We can observe an exogenous legal shock to the system and see what happens to market structure, investment, creativity to the extent that it can be measured by something other than patents (which we should be doing anyway).

Sprigman: Label we’re applying: No-IP zones isn’t right for most of them. They fall into a variety of categories.  We called it negative space b/c we didn’t want to lay down a rule about how much IP ought to be present.  Fashion is not no-IP, but rather one potentially very important form of IP—©—wasn’t there, though TM was. This is often true. It’s important to understanding what the scholarship’s about, b/c though we can’t give you an answer about what the optimal level is (though neither can neoclassical economics), it’s very good at giving an answer about what legal, institutional, and social arrangements lead to innovation. Europe: incredibly broad sweep of IP rights in fashion.  US: design patents can cover some things at the margins, but practical difficulties are great for most firms w/o long-lasting things like iconic handbags. Look at their performance: big growth in NY, eclipsed Paris; but Milan is doing very well. None of this is about no-IP zone, but it’s higher versus lower.  What types of innovation are going on in each place? Are they sensitive to the differences in IP?

Financial services has a whole branch of innovation in new financial instruments, where patents and trade secrets are written out b/c you have to disclose and you have to make a market, which often requires many firms. Market power takes over from IP, which isn’t a lovely story either.  An atomized financial sector might need more IP to get new financial instruments, which is not a normative claim.  People give it a normative cast b/c these are communities that innovate w/o IP.  In these settings, relatively low levels of IP have led to innovation, and the Q is in what direction.  What you like in terms of your comedy = what you like in terms of your regulation. It’s entirely normative.

Buccafusco: We can open up understanding of who’s in the communities who might matter. It’s not just creators.  Who counts as a consumer and understands themself as part of the community?  Consumers objected to recipe copying; chefs didn’t want public discussion of the matter.

Rob MacCoun: Illegal drug markets—this is an interesting moment b/c there’s a lot of innovation in marijuana, not just in brands and strains but other things. Prohibition made it impossible to protect IP; now we’re seeing the choices they make once law is a (partial) option.  Change in players, not just a change in law. Old hippies who dominated the market are being run out by young MBAs.

Dan Burk: Distinction between common governance spaces and IP-low/negative spaces. These are two different phenomena which sometimes occur together.  If you’re looking for variations, make sure to distinguish.  Consider tax advantage patents—prior to State Street they were covered by state secrets; IRS had a rule that if you had a confidentiality rule in your tax shelter they’d audit it; then tax patents disappeared when excluded by AIA. Might be another place to look for exogenous shocks.

Lisa Ouellette: Another distinction: encouragement to innovators can be through tax credits, grants, etc. not just IP. Benefits of these studies help us understand how different kinds of economic incentives interact w/noneconomic incentives.

RT: Norm entrepreneurs v. norm violators: agree w/Aaron Perzanowski that we need more study of the latter in different contexts, and not just of P2P filesharers but people who want to push the boundaries of commercialization—Axanar Star Trek fan film creators who collected a lot of money in crowdfunding, for example, or people who set up a Patreon to support their fan art or an Etsy store to sell their Doctor Who related soap or scarves.  Ongoing norm shifts in terms of “pulling to publish” in largely female fan communities, or other ways of moving in between fan and professional publishing, where languages of feminism are often employed in favor of and against various forms of commercialization. 

Institutions in IP free zones: Fagundes talks about derby and fragility of norm-based governance; can do things to institutionalize certain norms and engage w/formal law, sometimes to preserve territory: American Library Association; Electronic Frontier Foundation. Organization for Transformative Works.  OTW: Among other things, we are an ISP hosting 2 million noncommercial fanworks, over 770,000 registered users and receives over 115 million page views per week. Can’t stop rogue librarians or rogue fans, whatever that might mean, but can promote norms, self-understanding (e.g., spread of the language of “transformative work” in fandom). 

Non-IP effects of having an IP-low space.  Interesting things happening in fandom around tagging that intersect w/discourses about feminism, racism, trigger warnings, and categorization theory/folksonomies.  Terms of service and interface design, for example, contribute to that: the “Choose Not To Warn” option on a fanwork, which was deliberately designed in, makes a difference in how people approach warnings.  This isn’t directly related to IP, but the freedom to experiment in content (genre, length, format) produced by fandom’s emphasis on noncommerciality and fair use may have made us more attentive to the responsibility of telling people what they’ll get if they read a particular fanwork.  Wonder what non-IP effects exist of being low-IP in other spaces.  [This seems similar to Sprigman’s point that comedy will be different under different regimes, but it’s not even exactly about the content that gets produced but about how the content fits into its social context.]

Peter Lee: Innovation w/o IP, exclusivity w/o IP—those two things aren’t the same in all cases. Sometimes people aren’t interested in exclusivity and maybe want attribution.  The potential rub: we think of the public domain as the opposite of excludability, but some non-IP things are tacit knowledge and inherently excludable.

Pedraza-Farina: longitudinal studies as really useful. Social norms as innovation promotion: most case studies have a flavor of “norms are sufficient, we don’t need IP.” One thing we may be forgetting is the dark side of social norms.  Can be anti-innovative.

McKenna: Some of this is formal law v. norms, but some is about directness. Fashion example: there’s tons of TM in the industry. Absence of © has pushed courts in the direction of creating post-sale confusion.  Some other circumstances, it’s not TM directly but TM/brands serving as adequate economic protection even though not directly applying to the subject matter.

Silbey: Order w/o Law: the “order” part was really important.  Societies function through norms. The critical distinction is when you want the features of a legal system that a norm based system can’t provide: transparency, equal access, accountability. If we studied the destruction of a system through an entrepreneur/violator—if the way it’s going is looking more like the virtuous features of a rule of law system, we might start thinking that certain legal mechanisms are better at this point than they were before.  These norm-based communities are often very homogeneous.  Studies suggest that when they become large & heterogeneous, the norms break down and the need for accountability, transparency, and equal access comes in.

Mark Suchman: we tend to call this the study of deviance. Competence enhancing innovation reinforces the structure—existing customer bases, distribution channels, etc.; competence destroying innovation makes some of the things that leading firms are good at no longer relevant. Can imagine similar things in norm based communities.  Interesting to see what they resist as competence destroying.

Fagundes: one question is why would people create in the absence of IP; another is why they’d be motivated to create an extra system of rules when IP already exists. Sometimes it’s when there’s chaos; sometimes when it’s too expensive; sometimes law doesn’t give them what they want, like attribution; sometimes law doesn’t cover the subject matter, but he thinks that’s rare.

Are social norms the ex ante reason people opt in?  People are motivated to create; law doesn’t protect them; they therefore create norms. 

These systems don’t have fair use, copyrightability limits [speak for yourself!]—I’m ultimately agnostic about whether these formal systems are good.  Bottom-up doesn’t mean best or better.

Sprigman: sometimes tell students that his job is to raise up a crop of people to protect the strong against the weak.  Law has lawyers built into it, which creates all kinds of access problems.  Debate in fashion: one side observes that there’s no copyright and that means that young and new designers are disadvantaged by freedom to copy. Other side says that the industry is open to young and new in part b/c cost of entry doesn’t include hiring a lawyer. Yes, the weak will sometimes be preyed upon by the strong, but in a more concentrated industry the weak aren’t going to be there to be preyed on. 

Holbrook: In formal IP we always worry about public notice and linedrawing; we should think about this here as well. There’s also concern about enforcement mechanisms, which can be pernicious and harmful. Structure of community itself screams for concerns about exclusion on grounds we’d find troubling—think of GamerGate. Norms can be normatively bad.

Bessen: Don’t assume these are small communities; FOSS is very big. Sophisticated means of managing communities exist. 

Lemley: Jennifer Rothman has done interesting work on risks of custom. We could get a lot by studying what IP regimes people opt out of, b/c that may tell us if there is too little—or too much—IP in their area.

Paul Goldstein: A world w/o IP would be a world w/alternative forms of protection, such as contract, trade secret (a contractual version in some manifestations).  IP might be a default, but Linux/CC uses a space to create w/very limited protections.  Patents used to forestall the patenting of others.  Realms w/in IP such as fair use, private use, where there is an unpoliced use. Intrusion of law gets the same kind of attention such as tattoo artists’ suits, as when ASCAP sues the Girl Scouts for singing songs around the campfire.  Has the US fashion industry taken advantage of absence of protection here to poach French and German design?  Cross-border traffic may tell us a lot about creativity inside and outside.

Sunder: think about childhood as an IP-free space; educational spaces. How do we police overstepping of IP into sacred spaces of childhood, family?  No community/culture is hermetically sealed; we allow normative policing inside, but when someone outside the community appropriates we tend to lawyer up.  Native American tribes are turning to TM, copyright, even design patent.  IP as currency of “modernity.” 

Buccafusco: Some people thought that these spaces couldn’t teach us anything about music, film, the art that “matters.”  Can we change minds?  How?  What are the next generation of projects to convince the unconvinced?

Sprigman: Food and fashion are important forms of creativity.  Serious point: germs of more work are there. Kate Darling writes about online adult entertainment industry, making the point that response to uncontrolled piracy was to change the product mix to something that was experience based and more difficult to pirate: rise of camgirls. Music industry: the rebirth of the live show. Movie industry has reinvested in theater industry as a consumption good.  Music industry also reinvigorated the singles market, which turns out to be how consumers want to buy music; subscription model is rising in music and movies. Enormous diversification of consumption opportunities that was provoked by piracy, resulting in more people w/different willingness to pay being served. There’s more to say about that, but these low IP industries did it and high IP industries can do that too?

Silbey: pushing back on data that’s being created by consumption patterns that’s not accessible to us: Amazon, Netflix, Spotify—that could help us understand what’s being created, why and how.

Fagundes: 10-15 years, skepticism has emerged about core innovation quid pro quo story. This is a huge piece of that skepticism: if there are 7 different places where there’s innovation w/o IP, that’s part of showing that the canonical story has huge holes.  [“I refute it thus!”]

Goldstein: “Copyright industries” will respond by calling these all marginal activities.  What they have less success brushing off is the observation about the changes in mainstream industries—music, film, publishing to a lesser extent.  They don’t want to talk about that.  Kastenmeier said: going forward, when anyone comes to this subcommittee and asks for an extension in IP, they have to do something equivalent to an environmental impact statement saying that the industry needs the right given to continue producing/produce at a higher level. First hearings after that—semiconductor proposal—was strained effort to explain need for incentives. Not a single hearing after that addressed the issue. You can’t do business in DC in those terms w/IP, b/c the basic premise that you need exclusive rights to generate creativity was an unmanageable task. So we have interesting studies about “marginal” creative activities; huge shifts in mainstream media; fascinating to see attempt to map current trends onto what copyright law specifies as conditions for protection. There will be increasing mismatch b/t what law needs to do and what industry is going off to do on its own.  [DRM?]  Taking “marginal” methodologies and applying them to the mainstream would provide interesting results.

Lemley: Thank god for semiconductor protection! Imagine what the industry would have looked like w/o that act.

Goldstein: only 2 cases b/c the law is working so well [everyone laughs]

Silbey: Major industries don’t give us access.  It was a major enterprise to get embedded in Hollywood. Pharmacos are notoriously secretive. Music is easier, but many of us would love to do that if we could.  Confidential interviews—but that’s subject to criticism for lack of transparency. 

RT: The industries do talk about this: they talk about the “value gap.”

Sprigman: The studies say that we have equilibria, not an optimum, and these equilibria, even if fragile, seem to be consistent w/lots of innovation. There’s tons of stuff produced in fashion. That’s correlated w/ a rights-free environment (at the core).  Protection’s not as complete as it was in music either—the question is what’s the set of protections necessary to have a robust, innovative community.  If that’s the question, the industry has to explain why what we see represents underinvestment. [But they say it represents underreward.]  We have high quality and high output in music; need to explain why this “Silver Age” looks bad.