Against Intellectual Monopoly

protection. Not only that, had all these bits and pieces
of computer programs been patented, as they certainly would have in the
current regime, far from being enhanced, progress in the software industry
would never have taken place. According to Bill Gates - hardly your radical
communist or utopist - "if people had understood how patents would
be granted when most of today's ideas were invented, and had taken out
patents, the industry would be at a complete standstill today." 2
    Not only did patents play no role in software innovation, but also copyrights played only a limited role. Although computer programs were often
copyrighted, in the early years of the PC industry, copyright was seldom respected or enforced. Consumers would purchase programs and use them
on a variety of computers in violation of license agreements. People bought
and sold computer programs and created new ones by using bits and pieces,
modules and ideas, from existing programs. Although copyright may have
limited the widespread copying of software by other publishers, it was not
enforced in the draconian way that it is today.

    The software industry is a leading illustration of one of the subthemes of
this book. Intellectual monopoly is not a cause of innovation, but rather an
unwelcome consequence of it. In a young, dynamic industry full of ideas and
creativity, intellectual monopoly does not play a useful role. It is when ideas
run out and new competitors come in with fresher ideas that those bereft
of them turn to government intervention - and intellectual "property" - to
protect their lucrative old ways of doing business.
    Ifwe examine the efforts of Microsoft to prevent "piracy" of their software,
we find that it made little effort, either legal or technical, to protect its
"intellectual property" in their early creative days. It is now, in the twentyfirst century, that it invests its time and energy in the prevention of copying.
However, if we compare releases of Microsoft operating systems or word
processors over the past five or even ten years, it would be difficult to
detect much innovation. What is Microsoft's greatest innovation since 1994?
No doubt, the Web browser Internet Explorer. But who invented the Web
browser? Not Microsoft, but a small group of creative competitors from
whom, later on, Microsoft took the idea and then acquired most of the basic
code: the first popular version of a browser, NCSA Mosaic, appeared in
March 1993, but it was only in August 1995 that Microsoft released Internet
Explorer 1.0.3
    Try to imagine how the economic and social history of the past fifteen
years would have to be rewritten if the creators of Mosaic had Microsoft's
deep pockets and, in anticipation of Amazon patenting the one-click concept, had managed to patent the idea of the Web browser. Would we all have
been better served by such an application of the doctrine of "intellectual
property"?
Open-Source Software
    The best evidence that copyright and patents are not needed and that competition leads to thriving innovation in the software industry is the fact that
there is a thriving and innovative portion of the industry that has voluntarily relinquished its intellectual monopoly - both copyright and patent.
This striking example of creation under competition is the open-source
software movement. Often this software is released under a license that is the opposite of copyright - in many cases forcing those who wish to sell it to
allow their competitors to copy it. This "copyleft" agreement is a voluntary
commitment by software producers to avoid intellectual monopoly and to
operate under conditions of free competition.4

    It is an amazing testament to the benefits of competition that firms and
individuals choose to voluntarily subject themselves to it. How, you ask,
can it be in the economic self-interest of a firm or individual to voluntarily
relinquish a monopoly? The answer is that it provides an important assurance to purchasers. For example, a new entry into the software market may
find its market limited by the fact that potential customers are concerned
about the long-term viability of the firm. Purchasers do not wish to become
locked into proprietary software, only to see the sole legal supplier disappear. For obvious reasons, firms and individuals also have a preference for
purchasing software where they expect to benefit from future competition.
In some cases, the income from being