Christopher Sprigman

As copying becomes easier, fast and cheap copies are going to appear in more domains. Although copyright is important, the assumptions that it was built upon are becoming outdated. In this book, the authors looked at several industries that are thriving despite little to no copyright protections. The goal of the authors is to not argue that copyright should be removed, but rather to provide data points that might be useful in reconsidering copyright laws in the modern era.

In industries such as fashion, comedy, food, sports, and finance, copying is common. Although these industries may have some intellectual property protection, in practice, copying is easy and widespread. Yet all of these industries show significant innovation and output. Why? And can those lessons be applied in other domains, such as music, that have traditionally relied on traditional copyright laws.

Each of these industries is different. There is no set of key principles that "fix" copyright. However, the diversity contains a lesson in its own right. Innovation is different in different industries. The lifetime of a new creation, the expense of creation, and how it is consumed all contribute to how innovation works in that field. One-size-fits-all copyright law is unlikely to make sense in the future.

Diversity isn't the only lesson. The authors identify six themes that, while not universal, are intriguing. Note that for this discussion, copying may include point-for-point copies but also includes derivative copies.

Industries that are driven by trends and fads, such as food and fashion, are highly innovative even without intellectual property protection. Innovation does not just happen despite copying; you can argue that innovation happens because of copying. The life cycle of a trend requires copying because if something is never copied, it will never become trendy. Point-for-point copies serve to make something more popular, as do derivative copies. Derivative copies have the further benefit of pushing a trend (or a technical innovation) to its limit. Once that limit has been hit, the next innovation appears and the cycle starts again.

Social norms can provide incentive against copying within a creative community when it is close knit enough. The authors give the examples of comedians who have strong social norms around copying. These norms go beyond what is protected by copyright law to the point of protecting a particular idea. Although they have their limits, norms can provide protections with a subtlety that law is unlikely to ever match.

Another way innovation thrives despite copying is when innovators turn what they are selling from a product into a performance. The food served at a nice restaurant isn't just about a particular dish. It's also about the experience of eating at that restaurant: the atmosphere, the quality, even the price you pay all add to your perception of the quality of the experience. Performances are much harder to copy (and copies of the product can even drive demand for the authentic version and everything it entails).

Open-source methods, eponymously used in software but also practiced to some degree in areas such as cooking and football where practitioners commonly train each other, can turn copyright on its head by explicitly allowing copying to promote further innovation.

The harm of copying can also be balanced by a first-mover advantage. For example, in football, plays are not covered by copyright, but the first team to develop and effectively play with a new technique will have a significant advantage, and once that technique stops being effective, then it will be time for something new.

Finally, copying can be advantageous because copies can serve as advertisements for brands. This happens most often when the original version of a copied item is still seen as somehow superior, whether because of a true quality difference or just a difference in perception. Although some people will by the inferior copies instead of the original, other people will buy the original because the copies increase awareness of the original.

The book had a lot of other good points -- my list of notes is quite long, but I want to highlight just a few more.

One limitation of our current copyright laws is that they disproportionately give advantage to what Raustiala and Sprigman call Pioneers and ignore what they call Tweakers. Pioneers are the people who come up with some brilliant new idea. Tweakers are the people who take existing ideas and change them, ultimately making those ideas better and pushing them to the limit. In any field Tweakers play a huge role in making progress. Innovations generally come when the previous innovation has been tweaked to the limit (there is even some argument as to whether or not Pioneers really exist, or if they are really just the people who make a tweak that happens to be game changing; either way, Tweakers add value in their own right).

Another key observation the authors emphasize is that the true purpose of copyright law is to foster innovation. Preventing copying is just one approach for doing that, but since copying can itself be innovative, preventing copying has costs as well as benefits, and those costs and benefits must be balanced.

One facet of this that they discuss at length is that while preventing copying increases the expected return on a creation, reducing the cost of innovation also increases the expected return. Thus, as technology has reduced the barriers to entry in a diversity of fields, they have exploded with innovation, even when there isn't copyright protection. One example of this that the authors give is fonts. Creating fonts use to be something that required many highly specialized skills. Now, fonts can be created with easily obtainable software, and the number of fonts has exploded as a result. Music is another area where there the traditional centralized model is suffering, but the relative ease of creating and distributing high quality music has led to a huge amount of musical creativity.

This is an important book for anyone interested in copyright and innovation.… (more)

In school, students are taught of the historic importance of copyright and intellectual property as ways of assuring the rights of the creator and ensuring first-mover advantage. In THE KNOCKOFF ECONOMY, however, the authors take a look at innovations that cannot be copyrighted, including football plays, jokes,recipes, and music. In the digital era, how does non-protection (or lack of punishment for imitation) impact and, in some cases, spur innovation and profits? How does giving one's music away on Myspace or Facebook lead to future financial gain?

Rather than dismissing the power of copyright, the authors -- both bloggers for the Freakonomics blog -- tell compelling, well-researched stories that coax us all into thinking differently about the potential opportunities that arise from knockoffs, mimicry, and prolific sharing.

While this book has obvious appeal for professionals interested in issues of intellectual property (such as attorneys, inventors, CEOs, and librarians), the seductive arguments will have general audience appeal.

Highly recommended.

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Uncompensated and uncontrolled copying is all around us, and it’s not destroying creators’ willingness to create. The core case studies of the book are: (1) Fashion, where norms don’t stop copying, but instead, the authors argue, the inherent desire of fashion consumers for the new and trendy and distaste for the old means that innovation continues even with a lot of copying, though copying may well add a bit of speed to the cycle. Of course, fashion is often despised for this changeability, where we celebrate innovation in many other cases; both fashion’s lack of intellectual property protection and its general lesser status compared to other arts are gendered. (2) Recipes created by chefs, where norms do govern and restrain copying in many circumstances; chefs generally seek credit for innovation but share information readily. Also gendered in its lack of intellectual property protection and rise into higher status; cooking became art when men (“chefs”) started to do it. (3) Stand-up comedy, where there has been a noticeable decrease in acceptance of copying over time, which the authors connect to changes in the technological context—comedians can now reach millions and thus copying a joke is more noticeable and may really occupy the field in a way that vaudevillians stealing from each other didn’t—and relatedly changes in the social meaning of comedy—a shift to identity-based rather than single-joke comedy that is likely to make many kinds of copying more difficult/less funny to the audiences. Louis C.K. can’t tell a Sarah Silverman joke without substantially revising it to make it his own. Comedians reportedly have strong anticopying norms backed not just by gossip but by the threat of violence (again, gendered), and the norms cover far more than copyright would, protecting the premise or idea of a joke that is, under copyright’s terms, free for anyone to appropriate. Based on these three, the authors suggest that “Social norms about creativity probably work best, and are most likely to take root, in contexts that are most social—that is, where individuals are the key actors and where they rub up against each other frequently.” (Interestingly, it would be relatively easy to secure copyright for jokes, but comedians just don’t use the copyright system to protect against copying, almost without exception.)

The book also discusses magicians, who prize secrecy from the public over anticopying; financial products, where innovation is not necessarily a good thing; football moves; fonts; and databases. An epilogue discusses music; the authors suggest that music is transforming, not dying, with money shifting to touring and other forms of production that don’t rely on large-scale record sales. (For football, the discussion of the mixed, often negative reaction to the West Coast Defense, the No-Huddle Offense, and the Spread Offense, all adopted by weaker teams to offset the advantages of the existing leaders, reminded me of Malcolm Gladwell on underdogs in basketball. Whereas the football innovations were all eventually adopted by other teams, Gladwell’s story makes the point that innovations are regularly resisted by people doing well under the current system; in fact they can be crushed if you convince enough people that doing the thing “right” requires avoiding innovation.)

A coding challenge where submissions to a contest are all public and can be borrowed as the contest continues helps illustrate that what the authors call “tweakers” are often directly responsible for refining a leap by a pioneer, and this both incentivizes tweakers and leads to big debates over credit allocation. Copyright and patent don’t favor tweaking, though; and this leads to an unfortunate aside about how it’s maybe a good thing that we all can’t rewrite Star Trek episodes to “explore the romantic possibilities between Commander William Riker and Counselor Deanna Troi,” along with an equally unfortunate footnote noting that, in fact, plenty of people do just this but deeming “almost all” fan fiction to be infringing, neglecting fair use.

One overarching lesson of the book’s case studies is that regimes that don’t rely on intellectual property to incentivize creativity and innovation are everywhere; copyright and patent are more exceptional than we often assume. Things that are relevant to the kinds of copying and innovation that occur include: fads, norms, the ability to sell a different underlying product or experience/performance along with a creative work, first-mover advantages, and branding success (we pay more for Coke than for generic grocery store cola).… (more)