I’m currently reading Virginia Postrel’s excellent The Future and Its Enemies. Chapter four gives an excellent exposition of tacit knowledge. It occurs to me that the insights of the chapter bear directly on patent policy:

As Polanyi suggested, much of our most important knowledge is tacit—difficult to articulate, even to ourselves. Contrary to Sale’s imaginings, such knowledge is expensive to share, assuming it can be transferred at all. It is “sticky,” in management scholar Eric von Hippel’s term: “costly to acquire, transfer, and use in a new locus.” Von Hippel notes, for instance, the difficulty of duplicating a scientific apparatus. Subtle information about the lab environment, or procedures that people at the original site take for granted, can make the difference between success and failure. “It’s very difficult to make a carbon copy,” say s a researchers quoted by von Hippel. “You can make a near one, but if it turns out that what’s critical is the way he glued his transducers, and he forgets to tell you that the technician always puts a copy of Physical Review on top of them for weight, well, it could make all the difference.

As a result of this stickiness, tacit knowledge often travels only through apprenticeship, the trial-and-error process of learning from a master. (A form of “apprenticeship” is essentially how as children we learn such complex basic skills as speech. Writing in the 1950s, Polanyi argued that the art of scientific research, as opposed to the scientific information that can be taught in a classroom, had still not passed much beyond the European centers where it had originated centuries earlier: without the opportunity offered to young scientists to serve an apprenticeship in Europe, and without the migration of European scientists to new countries, research centres overseas could hardly have made much headway.”

The application to patent debates should be pretty obvious. Some patent proponents blithely assume that you can copy an invention as easily as you can copy a song or a piece of paper. It’s pretty often, for example, to see an argument that without patent protection, a small software company wouldn’t be able to negotiate on an equal footing with a large one, because the large one will simply listen to the smaller company’s pitch, take careful notes, and then steal the company’s idea without paying a penny.

The problem with this story is that it completely ignores the role of tacit knowledge in duplicating technology. If it’s difficult to duplicate a scientific expermient when the technical details of that experiment are publicly available, how much more difficult is it to duplicate a new technology based on the fragmentary information you get from a technology demo? A company seeking to duplicate a competitor’s technology will typically be forced to go through virtually the same trial-and-error process the original company went through. Which means that in many cases, licensing the smaller company’s technology will be the faster and cheaper than trying to re-invent the wheel.

Obviously, the force of this argument will vary with the degree to which products embody tacit knowledge. For example, it seems like pharmaceutical products would be easier to copy than others because they can be characterized by their chemical formulas. Software seems to be at the opposite extreme—especially if copyright law prevents the verbatim copying of source code. There’s a tremendous amount of tacit knowledge embedded in any software product of non-trivial complexity, so the idea that software companies can duplicate their competitor’s products quickly and easily is unrealistic.

DeLong leaves PFF

by on June 1, 2007 · 0 comments

I’ve been thinking about the best way to respond to the news of Jim DeLong’s apparent semi-retirement from the public policy world. For the last decade, DeLong has been the most prolific, and perhaps the most influential, libertarian thinker on patent and copyright issues. He has probably done more than any other person in the libertarian think tank world to promote the view that patents and copyrights are no different than any other kind of property right, and that libertarians should therefore almost always come down in favor of broadening the scope and duration of copyright and patent rights, for stiffening the penalties for violating these laws, and for enacting new regulations of third parties to make it easier for copyright holders to enforce their rights.

I’ve criticized DeLong’swritings repeatedly on this blog, so I won’t re-hash those arguments. But I am disappointed that (with one exception I can recall) DeLong never engaged any of my criticisms. Perhaps he was offended by the derisive tone some of my posts took. Maybe my work just never made it onto his radar screen. In any event, I think it’s sad that a significant opportunity for substantive engagement on these issues was missed. DeLong often seemed to be arguing with caricatures of his ideological opponents, ignoring the more nuanced substantive work he could have found if he’d looked for it. I was particularly disappointed that he never took the time to offer a substantive critique of my DMCA paper, one work of mine that I know he did read. I doubt he would have been able to change my mind (or vice versa), but I bet I would have learned a few things from his criticisms.

One place I do have to give DeLong credit is his amicus brief (with TLF contributor Solveig Singleton) in the Teleflex case. This was probably the most important patent case in the last quarter-century, and in my view he came down on the right side of it, recognizing that the patent system becomes an obstacle to progress if patents are granted too liberally.

In the latest installment of TechKnowledge, I critique Tim Wu’s recent article on “wireless Carterfone”:

True, a government-designed standard is not impossible, but “not impossible” is a long way from a good idea. Indeed, Wu seems to be implicitly conceding that it is far from the “simple requirement” he touts in his Forbes article. He seems to be proposing that the FCC dictate to wireless carriers what network services they must offer, who may access them, on what terms, and at what price.

History suggests that such efforts often end badly. Even when a government-created monopoly situation makes public utility regulation unavoidable, as in the Carterfone case, it can take a decade or longer for the dust to settle. The Clinton-era FCC attempted to create competition in the telephone and DSL markets by requiring Baby Bells to “unbundled” their local phone lines and lease them at FCC-determined prices to competitors. The Bells ultimately killed the plan using a combination of lobbying, litigation, and foot-dragging. But for the nine years between the passage of the Telecom Act in 1996 and the Supreme Court’s Brand X decision in 2005, telecommunications firms spent tens of millions of dollars on lawyers and lobbyists to seek advantage in the regulatory arena.

Continue reading →

Horacio Gutierrez, vice president of intellectual property and licensing at Microsoft, says that interoperability requires licensing agreements like the Novell-Microsoft deal:

“In fact, one makes the other possible, especially at a time like this, when interoperability is so important. Microsoft recognizes the importance of interoperability, which is why we are doing the things we are in our products, why we created the Interoperability Executive Customer Council, and why we are listening to customers,” said Horacio Gutierrez, Microsoft’s vice president of intellectual property and licensing.

Customers did not want to have to solve this problem themselves, they wanted industry leaders, their vendors, to solve the interoperability problem for them, he said.

“The only way that’s possible is for companies to really be open to licensing arrangements and building these bridges that people thought were impossible before, among different providers and among different software development models,” he said…

He felt it “unfortunate that while Microsoft is trying to build bridges wherever possible between the commercial and open-source software industries, some seem intent on tearing down those bridges. We are in the bridge building business, not in the bridge burning business.”

This is, as Luis points out, complete and utter nonsense:

Continue reading →

With the release last month of its report on Violent Television Programming and Its Impact on Children, the FCC teed up the issue of regulating televised violence and tossed it over to Congress with a recommendation that lawmakers go ahead and swing for the fences. And Congress appears ready to oblige, although not necessarily in the way some at the FCC had originally envisioned.

You will recall that FCC Chairman Kevin Martin used the FCC’s violence report as another opportunity to engage in his monomaniacal, Moby Dick-like quest to impose a la carte regulation on cable and satellite operators. Martin argued that “Requiring cable and satellite television providers to offer programming in a more a la carte manner would be a more content neutral means for Congress to regulate violent programming and therefore would raise fewer constitutional issues.” But it doesn’t appear that the chairman is going to get his whale this time around.

Continue reading →


Tech Policy Weekly from the Technology Liberation Front is a weekly podcast about technology policy from TLF’s learned band of contributors. The shows’s panelists this week are Tim Lee of the Cato Institute, Braden Cox of the Association for Competitive Technology, Prof. Randy Picker of the University of Chicago Law School, and Eric Bangeman of Ars Technica. Topics include,

  • Technological progress drives change in copyright law,
  • Major League Baseball criticizes Slingbox over its place-shifting technology, and
  • states consider new regulations of social networking sites.

There are several ways to listen to the TLF Podcast. You can press play on the player below to listen right now, or download the MP3 file. You can also subscribe to the podcast by clicking on the button for your preferred service. And do us a favor, Digg this podcast!

Continue reading →

I’m reading Janet Abbate’s Inventing the Internet, an excellent history of the Internet starting with its origins as the ARPANET in the 1960s. The most interesting things I’ve learned about so far is the heated battled between the TCP/IP protocol, which was favored primarily by the computer science research community, and the competing X.25 protocol, which was favored by the telecom industry. Embarrassingly, I didn’t know anything about this argument before I picked up Abbate’s book. What’s striking about it is how similar it sounds to arguments today. From page 161:

The operators of public data networks argued that ARPA’s TCP/IP failed to provide adequate control over network operations. For instance, a Telenet spokesman noted that, whereas X.25 was capable of controlling the flow of packets from each individual connection, TCP could only act on an entire host’s output at once. If one of the network connections from a host malfunctioned and flooded a TCP/IP network with packets, the network’s only defense would be to cut off the entire host, thus unfairly penalizing the others users on that host. Users of the research network might accept the inconvenience with resignation, but paying customers of a public data network would certainly protest. With regard to the business of running a network, the [Post, Telephone, and Telegraph Authorities] pointed out that IP had not been designed to allow networks to exchange the type of information that would be required for access control or cost accounting… TCP/IP had not been designed for a network serving as a public utility, with service guarantees and access charges. X.25 had been.

Continue reading →

In recent years there has been a trend toward the use of trade agreements as a means of bullying smaller nations into adopting copyright and patent policies favored by domestic special interest groups in the United States. Over at the EFF blog, Gwen Hinze has the goods:

In exchange for the promise of increased access to U.S. agricultural and textile markets, , U.S. trading partners are being required to rewrite their IP laws. For instance, the last nine U.S. free trade agreements signed since 2002 have required trading partners to adopt the U.S./ EU copyright term of life of the creator plus 70 years, create laws banning the circumvention of DRM (or technological protection measures) modeled very precisely on the controversial DMCA, and to treat temporary reproductions of copyrighted works (such as in computer memory) as copyright infringement. The FTAs also require trading partners to broaden their patent laws. The Central American Free Trade Agreement also required extended protection of test data, seemingly directed at precluding registration of generic pharmaceuticals.

I agree with James Surowiecki that there’s a symmetry between the “intellectual property standards” in these recent trade agreements and the “labor and environmental standards” that left-wing groups have long demanded be appended to trade deals. Free traders have always argued, correctly, that labor and environmental laws have nothing to do with trade, and that decisions about such laws should be decided by the ordinary political process in each country, not by international pressure.

Precisely the same argument applies to copyright and patent issues. I think there are good policy arguments to oppose longer copyright terms and anti-circumvention rules on their merits. But even if you think those are good policy, they certainly don’t belong in trade negotiations. Trade negotiations should be focusing on trade barriers. Failing to protect the copyright on Mickey Mouse until 2019, or permitting the sale of DVD players that will fast forward through commercials, is not a trade barrier.

We free traders should be just as outraged about these demands as we would be if a Democratic administration demanded changes to other countries’ labor or environmental laws in exchange for a trade agreement. The president and the USTR have only so much political capital in these negotiations. Had they not included the copyright and patent provisions among their demands, they most likely would have been able to obtain larger reductions in genuine trade barriers.

“Cyber War”

by on May 30, 2007 · 2 comments

Via Yglesias, Robert Farley thinks that we’re not giving enough attention to economic “cyber war”:

Lots of work has been done on “cyber war”, the promise and vulnerability of networked military organizations. Less attention has been paid to the economic prospects of cyber warfare, and to the ability of states to exert power and coercion through a new set of tools. When Russia tries to coerce its neigbors through threatening to destroy their economic and governmental activity, it becomes a problem for NATO and consequently the United States.

Frankly, I think this is silly. Most of the IT infrastructure that’s really critical for the functioning of a modern economy—power plants, ATM networks, air traffic control, etc—is physically separated from the public Internet. Even semi-critical infrastructure like stock exchanges and supply chain systems tend to be over-engineered for fault tolerance.

And indeed, this is confirmed by the news coverage of the incident. The opening bullets report that “parliament, ministries, banks, media targeted.” But when you get further down the story, you learn that the websites of these institutions were targetted. Now maybe the Estonia is different, but I doubt most people would even notice if Congress’s website were brought down for a few days by a DDOS attack.

I suppose it would be a bit of a pain if I wasn’t able to check CNN or my bank account balance. But that’s not “cyber war.” It’s petty vandalism. It deserves the attention of network security experts at the companies whose websites were targetted, of course, but it’s ridiculous to get NATO involved or to act as though Russia engaging in this kind of “cyber warfare” is even remotely on par with Russia launching cruise missiles against Estonian targets.

This site tracks the value of some “black market” goods from pirated movies to body parts and human trafficking. Missing: Murder for Hire, though Kidnapping is represented.

One ought to distinguish at least two types of markets represented here; a) those in which the goods being sold do indeed “belong” to the seller who wishes them to “belong” to the buyer. Markets for illegal drugs for example. “Belong” is in quotes because from a legal standpoint there are no “property rights,” rather, the rights are those that would exist at law just as with any other planted produce or chemical stew if it were not for regulatory bans. Then there is b) the rights in question have been wrested away unlawfully from a third person and appropriated by the seller, who then transfers them to the buyer. Human trafficking, for example, and piracy.

Continue reading →