E-books and e-publishing by Samuel Vaknin (essential reading .TXT) 📕

the US Patent Office in granting his company the patent. In an

open letter to Amazon’s customers, he called for a rethinking

of the whole system of protection of intellectual property in

the Internet age.

In a recently published discourse of innovation and property

rights, titled “The Free-Market Innovation Machine”, William

Baumol of Princeton University claims that only capitalism

guarantees growth through a steady flow of innovation.

According to popular lore, capitalism makes sure that

innovators are rewarded for their time and skills since

property rights are enshrined in enforceable contracts.

Reality is different, as Baumol himself notes. Innovators tend

to maximize their returns by sharing their technology and

licensing it to more efficient and profitable manufacturers.

This rational division of labor is hampered by the

increasingly more stringent and expansive intellectual

property laws that afflict many rich countries nowadays. These

statutes tend to protect the interests of middlemen -

manufacturers, distributors, marketers - rather than the

claims of inventors and innovators.

Moreover, the very nature of “intellectual property” is in

flux. Business processes and methods, plants, genetic

material, strains of animals, minor changes to existing

technologies - are all patentable. Trademarks and copyright

now cover contents, brand names, and modes of expression and

presentation. Nothing is safe from these encroaching juridical

initiatives. Intellectual property rights have been

transformed into a myriad pernicious monopolies which threaten

to stifle innovation and competition.

Intellectual property - patents, content libraries,

copyrighted material, trademarks, rights of all kinds - are

sometimes the sole assets - and the only hope for survival -

of cash-strapped and otherwise dysfunctional or bankrupt

firms. Both managers and court-appointed receivers strive to

monetize these properties and patent-portfolios by either

selling them or enforcing the rights against infringing third

parties.

Fighting a patent battle in court is prohibitively expensive

and the outcome uncertain. Potential defendants succumb to

extortionate demands rather than endure the Kafkaesque

process. The costs are passed on to the consumer. Sony, for

instance already paid Forgent an undisclosed amount in May.

According to Forgent’s 10-Q form, filed on June 17, 2002, yet

another, unidentified “prestigious international” company,

parted with $15 million in April.

In commentaries written in 1999-2000 by Harvard law professor,

Lawrence Lessig, for “The Industry Standard”, he observed:

“There is growing skepticism among academics about whether

such state-imposed monopolies help a rapidly evolving market

such as the Internet. What is “novel,” “nonobvious” or

“useful” is hard enough to know in a relatively stable field.

In a transforming market, it’s nearly impossible…”

The very concept of intellectual property is being radically

transformed by the onslaught of new technologies.

The myth of intellectual property postulates that

entrepreneurs assume the risks associated with publishing

books, recording records, and inventing only because - and

where - the rights to intellectual property are well defined

and enforced. In the absence of such rights, creative people

are unlikely to make their works accessible to the public.

Ultimately, it is the public which pays the price of piracy

and other violations of intellectual property rights, goes the

refrain.

This is untrue. In the USA only few authors actually live by

their pen. Even fewer musicians, not to mention actors, eke

out subsistence level income from their craft. Those who do

can no longer be considered merely creative people. Madonna,

Michael Jackson, Schwarzenegger and Grisham are businessmen at

least as much as they are artists.

Intellectual property is a relatively new notion. In the near

past, no one considered knowledge or the fruits of creativity

(artwork, designs) as ‘patentable’, or as someone’s

‘property’. The artist was but a mere channel through which

divine grace flowed. Texts, discoveries, inventions, works of

art and music, designs - all belonged to the community and

could be replicated freely. True, the chosen ones, the

conduits, were revered. But they were rarely financially

rewarded.

Well into the 19th century, artists and innovators were

commissioned - and salaried - to produce their works of art

and contrivances. The advent of the Industrial Revolution -

and the imagery of the romantic lone inventor toiling on his

brainchild in a basement or, later, a garage - gave rise to

the patent. The more massive the markets became, the more

sophisticated the sales and marketing techniques, the bigger

the financial stakes - the larger loomed the issue of

intellectual property.

Intellectual property rights are less about the intellect and

more about property. In every single year of the last decade,

the global turnover in intellectual property has outweighed

the total industrial production of the world. These markets

being global, the monopolists of intellectual products fight

unfair competition globally. A pirate in Skopje is in direct

rivalry with Bill Gates, depriving Microsoft of present and

future revenue, challenging its monopolistic status as well as

jeopardizing its competition-deterring image.

The Open Source Movement weakens the classic model of property

rights by presenting an alternative, viable, vibrant, model

which does not involve over-pricing and anticompetitive

predatory practices. The current model of property rights

encourages monopolistic behavior, non-collaborative,

exclusionary innovation (as opposed, for instance, to Linux),

and litigiousness. The Open Source movement exposes the myths

underlying current property rights philosophy and is thus

subversive.

But the inane expansion of intellectual property rights may

merely be a final spasm, threatened by the ubiquity of the

Internet as they are. Free scholarly online publications

nibble at the heels of their pricey and anticompetitive

offline counterparts. Electronic publishing poses a threat -

however distant - to print publishing. Napster-like peer to

peer networks undermine the foundations of the music and film

industries. Open source software is encroaching on the turf of

proprietary applications. It is very easy and cheap to publish

and distribute content on the Internet, the barriers to entry

are virtually nil.

As processors grow speedier, storage larger, applications

multi-featured, broadband access all-pervasive, and the

Internet goes wireless - individuals are increasingly able to

emulate much larger scale organizations successfully. A single

person, working from home, with less than $2000 worth of

equipment - can publish a Webzine, author software, write

music, shoot digital films, design products, or communicate

with millions and his work will be indistinguishable from the

offerings of the most endowed corporations and institutions.

Obviously, no individual can yet match the capital assets, the

marketing clout, the market positioning, the global branding,

the sales organization, and the distribution network of the

likes of Sony, or Microsoft. In an age of information glut, it

is still the marketing, the media campaign, the distribution,

and the sales that determine the economic outcome.

This advantage, however, is also being eroded, albeit

glacially.

The Internet is essentially a free marketing and - in the case

of digital goods - distribution channel. It directly reaches

200 million people all over the world. Even with a minimum

investment, the likelihood of being seen by surprisingly large

numbers of consumers is high. Various business models are

emerging or reasserting themselves - from ad sponsored content

to packaged open source software.

Many creative people - artists, authors, innovators - are

repelled by the commercialization of their intellect and muse.

They seek - and find - alternatives to the behemoths of

manufacturing, marketing and distribution that today control

the bulk of intellectual property. Many of them go freelance.

Indie music labels, independent cinema, print on demand

publishing - are omens of things to come.

This inexorably leads to disintermediation - the removal of

middlemen between producer or creator and consumer. The

Internet enables niche marketing and restores the balance

between the creative genius and the commercial exploiters of

his product. This is a return to pre-industrial times when

artisans ruled the economic scene.

Work mobility increases in this landscape of shifting

allegiances, head hunting, remote collaboration, contract and

agency work, and similar labour market trends. Intellectual

property is likely to become as atomized as labor and to

revert to its true owners - the inspired folks. They, in turn,

will negotiate licensing deals directly with their end users

and customers.

Capital, design, engineering, and labor intensive goods -

computer chips, cruise missiles, and passenger cars - will

still necessitate the coordination of a massive workforce in

multiple locations. But even here, in the old industrial

landscape, the intellectual contribution to the collective

effort will likely be outsourced to roving freelancers who

will maintain an ownership stake in their designs or

inventions.

This intimate relationship between creative person and

consumer is the way it has always been. We may yet look back

on the 20th century and note with amazement the transient and

aberrant phase of intermediation - the Sony’s, Microsoft’s,

and Forgent’s of this world.

THE INTERNET AND THE DIGITAL DIVIDE

The Internet - A Medium or a Message?

By: Sam Vaknin

The State of the Net

An Interim Report about the Future of the Internet

Who are the participants who constitute the Internet?

* Users - connected to the net and interacting with it

* The communications lines and the communications equipment

* The intermediaries (e.g. the suppliers of on-line

information or access providers).

* Hardware manufacturers

* Software authors and manufacturers (browsers, site

development tools, specific applications, smart agents,

search engines and others).

* The “Hitchhikers” (search engines, smart agents,

Artificial Intelligence - AI - tools and more)

* Content producers and providers

* Suppliers of financial wherewithal (currently - corporate

and institutional cash gradually being replaced by

advertising money)

The fate of each of these components - separately and in

solidarity - will determine the fate of the Internet.

The first phase of the Internet’s history was dominated by

computer wizards. Thus, any attempt at predicting its future

dealt mainly with its hardware and software components.

Media experts, sociologists, psychologists, advertising and

marketing executives were left out of the collective effort to

determine the future face of the Internet.

As far as content is concerned, the Internet cannot be

currently defined as a medium. It does not function as one -

rather it is a very disordered library, mostly incorporating

the writings of non-distinguished megalomaniacs. It is the

ultimate Narcissistic experience. The forceful entry of

publishing houses and content aggregators is changing this

dismal landscape, though.

Ever since the invention of television there hasn’t been

anything as begging to become a medium as the Internet.

Three analogies spring to mind when contemplating the Internet

in its current state:

* A chaotic library

* A neural network or the latter day equivalent of previous

networks (telegraph, telephony, railways)

* A new continent

These metaphors prove to be very useful (even business-wise).

They permit us to define the commercial opportunities embedded

in the Internet.

Yet, they fail to assist us in predicting its future in its

transformation into a medium.

How does an invention become a medium? What happens to it when

it does become one? What is the thin line separating the

initial functioning of the invention from its transformation

into a new medium? In other words: when can we tell that some

technological advance gave birth to a new medium?

This work also deals with the image of the Internet once

transformed into a medium.

The Internet has the most unusual attributes in the history of

media.

It has no central structure or organization. It is hardware

and software independent. It (almost) cannot be subjected to

legislation or to regulation. Consider the example of

downloading music from the internet - is it tantamount to an

act of recording music (a violation of copyright laws)? This

has been the crux of the legal battle between Diamond

Multimedia (the manufacturers of the Rio MP3 device), MP3.com

and Napster and the recording industry in America.

The Internet’s data transfer channels are not linear - they

are random. Most of its “broadcast” cannot be “received” at

all. It allows for the narrowest of narrowcasting through the

use of e-mail mailing lists, discussion groups, message

boards, private radio stations, and chats. And this is but a

small portion of an impressive list of oddities. These

idiosyncrasies will also shape the nature of the Internet as a

medium. Growing out