Month / August 1999

by Clay Shirky

Why Stricter Software Patents End Up Benefitting Open Source

Why commercial software controls will backfire.

First published in FEED, 8/18/1999.

As the software industry cracks down on its customers, the software itself is opening up. Open Source software, the freely available alternative to commercial software, is making inroads in the corporate world because of its superior flexibility, adaptability, and cost. Despite this competition, the commercial software industry has decided that now’s the time to make licensed software less flexible, less adaptable, and above all, more expensive. A proposed new law, called the Uniform Computer Information Transactions Act (UCITA) would give software manufacturers enormous new powers to raise prices and to control their software even after it is in the hands of their customers. By giving the software industry additional leverage over its customers, UCITA will have two principal effects: first, it will turn software from a product you buy to a service you pay for again and again. Second, its restrictions will greatly accelerate the corporate adoption of Open Source software.

All trade groups aspire to become like OPEC, the cartel that jacks up oil prices by controlling supply. The UCITA working group is no exception: UCITA is designed to allow software companies relief from competition (companies could forbid publishing the results of software comparisons), and to artificially limit supply (any company which was acquired by a larger company could be forced to re-license all its software). The most startling part of UCITA, though, is the smugly named “self-help” clause, which would allow a software company to remotely disable software at the customer’s site, even after it has been sold. This clause could be invoked with only 15 days notice if a software developer felt its licensing terms were being violated, making the customer guilty until proven innocent. UCITA’s proponents disingenuously suggest that the use of “self-help” would be rare, as it would make customers unhappy — what they are not as quick to point out is that the presence of “self-help” as a credible threat would give software companies permanent leverage over their customers in negotiating all future contracts.

Unfortunately for cartel-minded software firms, the OPEC scenario is elusive because software isn’t like oil. Software has no physical scarcity, and the people who know how to create good software can’t be isolated or controlled the way oil wells can. Where UCITA sets out to make software a controlled substance, the Open Source movement sets out to take advantage of software’s innate flexibility of distribution. By making software freely available and freely modifiable, Open Source takes advantage of everything UCITA would limit — Open Source software is easy to get, easy to modify, and easy to share. If UCITA becomes law, the difference between Open Source and commercial software will become even more stark. Expect Open Source to do very well in these circumstances.

Economics 101 tells us that people make economic decisions “on the margin” — a calculation not of total worth to total cost, but of additional worth for additional cost. For someone who wants a watch for telling time but not for status, for example, the choice between a $20 Timex and a $20,000 Rolex is clear — the $19,980 marginal cost of the Rolex knocks it out of the running. In the case of Open Source vs. commercial software, the differences in cost can be equally vast — in many cases (such as the Apache web server) the Open Source solution is both cheaper and better. Cartels only work if there is no competition, a fact the UCITA group seems not to have grasped. If UCITA becomes law — that could happen as soon as December — the commercial software industry will be sending its customers scrambling for Linux, Apache, and the other Open Source products faster than they already are.

by Clay Shirky

The Internet and the Size of Government

Challenges to governmental control.

First published in FEED, 8/11/99.

Fritz Hollings, Senator of South Carolina, and Zhu Rongji, Premier of China, have the same problem — the internet has made their governments too small. In Mr. Hollings’ case, ecommerce is threatening to damage South Carolina’s local tax base, while Mr. Zhu is facing threats to the Chinese Communist Party from dissident web sites in other
countries. They have both decided to extend the reach of their governments past their current geographical boundaries to attack these problems. The final thing the senator and the Premier share is that their proposed solutions will accelerate the changes they are meant to postpone — you can’t fight the effects of the internet without
embracing it, and you cannot embrace it without being changed by it.

Fritz Hollings’ problem is simple — states can collect taxes on local sales but not on ecommerce, because ecommerce has no respect for locality. His proposed solution is equally simple: a 5% national ecommerce tax (the “Sales Tax Safety Net and Teacher Funding Act”) to collect money at the Federal level and funnel it into state “subsidies” for teachers salaries. Unfortunately for him, “No Taxation Without Representation” cuts both ways — education policy is one of a state’s most important functions, and a Federal education tax opens the door for a Federal education policy
as well. If Hollings is worried about loss of state power, extending the states’ reach to the level of national taxation is a good short-term solution, but in the long run it will worsen the problem — states who defend their autonomy will watch the internet erode their revenue base, but states who defend their revenues will watch the internet erode their autonomy.

Zhu Rongji’s dilemma is more complicated, but no less stark — China’s communist party is vulnerable to international dissent because political web sites have no respect for national borders. Shortly after the Chinese government banned the Falun Gong sect for “jeopardising social stability,” China’s Internet Monitoring Bureau attacked Falun Gong web servers in the US and UK. The People’s Liberation Army newspaper called this action a “struggle in the realm of thought,” indicating that China now respects no national borders in its attacks on dissent. During the Kosovo crisis, China argued loudly for non-intervention in the affairs of other countries, but these attacks on foreign web servers tell a different story — non-interference in a connected world is incompatible with a determination to stifle dissent. The Falun Gong attacks will help
protect the Communist Party in the short term, but by demonstrating to future dissidents how afraid the Party is of the web it makes them more vulnerable to the winds of change in the long haul.

Governments, like companies, are being forced to respond to the increasingly borderless movement of money and ideas, but unlike companies they have no graceful way of going out of business when they are no longer viable. In place of mergers and bankruptcy, governments have wars and violent overthrows — governments will do anything to avoid closing up shop, even if that would be better for the people they are meant to serve. This makes governments more successful than businesses in fighting change in the short term, but in the long run, governments are more brittle and therefore more at risk. Zhu Rongji and Fritz Hollings have both adopted old men’s strategies — preserve the
present at all costs — but postponing change will heighten its force when it does come. In another five years, when the internet has become truly global, the damage it will do to things like South Carolina’s tax base and the Chinese Communist Party will make it clear that Messr’s Hollings and Zhu are trying to put out fire with gasoline.

by Clay Shirky

Time to Open Source the Human Genome

Patent law and human genetics.

9/8/1999

The news this week that a researcher has bred a genetically smarter mouse is another precursor to a new era of genetic manipulation. The experiment, performed by Dr. Joe Tsien of Princeton, stimulated a gene called NR2B, producing mice with greatly heightened intelligence and memory. The story has generated a great deal of interest, especially as human brains may have a similar genetic mechanism, but there is a behind- the-scenes story which better illuminates the likely shape of 21st century medicine. Almost from the moment that the experiment was publicized, a dispute broke out about ownership of NR2B itself, which is already patented by another lab. Like an information age land-grab, whole sections of genetic information are being locked behind pharmaceutical patents as fast as they are being identified. If the current system of private ownership of genes continues, the majority of human genes could be owned in less than two years. The only thing that could save us from this fate would be an open- source movement in genetics — a movement to open the DNA source code for the human genome as a vast public trust.

Fighting over mouse brains may seem picayune, but the larger issue is ownership of the genetic recipe for life. The case of the smarter mouse, patent pending, is not an
isolated one: among the patents granted for human genes are blindness (Axys
Pharmaceuticals), epilepsy (Progenitor), and Alzheimer’s (Glaxo Wellcome). Rights to the gene which controls arthritis will be worth millions, breast cancer, billions, and
the company that patents the genes that control weight loss can write their own ticket. As the genome code becomes an essential part of industries from bio-computing and cybernetic interfaces to cosmetics and nutrition, the social and economic changes it instigates are going to make the effects of the Internet seem inconsequential. Unfortunately for us, though, the Internet’s intellectual property is mostly in the public domain, while the genome is largely — and increasingly — private.

It didn’t have to be this way. Patents exist to encourage investment by guaranteeing a
discoverer time to recoup their investment before facing any competition, but patent
law has become increasingly permissive in what constitutes a patentable discovery. There are obviously patents to be had in methods of sequencing genes and for methods of using those sequences to cure disease or enhance capability. But to allow a gene itself to be patented makes a mockery of “prior art,” the term which covers unpatented but widely dispersed discoveries. It is prior art which keeps anyone from patenting fire, or the wheel, and in the case of genetic information, life itself is the prior art. It is a travesty of patent law that someone can have the gene for Alzheimer’s in every cell of their body, but that the patent for that gene is owned by Glaxo Wellcome.

The real action, of course, is not in mouse brains but in the human genome. Two teams, one public and one private, are working feverishly to sequence all of the 100,000 or so genes which lie within the 23 pairs of human chromosomes. The public consortium aims to release the sequence into the public domain, while the private group aims to patent much of the genome, especially the valuable list of mutations that cause genetic disease. The competition between these two groups has vastly accelerated the pace of the work — moving it from scheduled completion in 2005 to next year — but the irony is that this accelerated timetable won’t give the public time to grasp the enormous changes the project portends. By this time next year, the fate of the source code for life on earth — open or closed — will be largely finished, long before most people have even begun to understand what is at stake.