The Chilling Effects On Innovation Caused By Bad Copyright Law

from the it's-feeling-frosty-in-here dept

We’ve talked a few times about how attacks on new innovations in the name of protecting copyright can create massive chilling effects. For example, the increasingly questionable arguments against Megaupload have created a real chill for online cloud storage providers. That was likely manifest last week in the news that Dropbox was killing off its “public folders” feature in deference to its link feature, basically making the product less useful.

Matt Schruers, from CCIA has an interesting blog post up which ties actions like those done by Dropbox here with a new study showing how the chilling effects of bad copyright law can impact innovation. The full study (pdf) is actually something of a follow up to an earlier study we wrote about, which showed how good judicial rulings on copyright which allowed for greater innovation (such as the Cablevision ruling, which allowed cloud-based DVRs to exist) contributed directly to greater funding of innovation.

This new study, also by Harvard professor Josh Lerner, highlights the unfortunate opposite impact: the chilling effects on investment in innovation that comes as a result of anti-innovation judicial rulings. In this case, Lerner looked at specific rulings in the EU:

We analyze the effects of a court ruling in France and several court rulings in Germany on VC investment in cloud computing firms in these countries. These court rulings were seen as negatively affecting the development of cloud computing, and our findings confirm this view by showing that these rulings regarding the scope of copyrights had significant, negative impacts on investment. Specifically, we find that VC investment in cloud computing firms declined in Germany and France, relative to the rest of the EU, after the French and German rulings. Our results suggest that these rulings led to an average reduction in VC investment in French and German cloud computing firms of $4.6 and $2.8 million per quarter, respectively. This implies a total decrease in French and German VC investment of $87 million over an approximately three year period. When paired with the findings of the enhanced effects of VC investment relative to corporate investment, this may be the equivalent of $269.7 million in traditional R&D investment.

Combine these two studies and you can see how these chilling effects can be quite massive in terms of investment in innovation. Of course, investment alone is not the sole determinant of the pace or success of innovation, but it is a key factor. And scaring investors away from innovations can have a major impact on the public and the economy.

Filed Under: , ,
Companies: cablevision, dropbox

Rate this comment as insightful
Rate this comment as funny
You have rated this comment as insightful
You have rated this comment as funny
Flag this comment as abusive/trolling/spam
You have flagged this comment
The first word has already been claimed
The last word has already been claimed
Insightful Lightbulb icon Funny Laughing icon Abusive/trolling/spam Flag icon Insightful badge Lightbulb icon Funny badge Laughing icon Comments icon

Comments on “The Chilling Effects On Innovation Caused By Bad Copyright Law”

Subscribe: RSS Leave a comment
34 Comments
Anonymous Coward says:

convincing governments that innovation is of more importance than protecting companies that produce little plastic discs is where the difficulty lies. it’s very hard to ‘encourage’ politicians to look to the future and support a business that hasn’t yet thrived when pitted against one that is already established, even though it is well out of date. but then, living in the dark ages is where so many politicians prefer to be, given their own ages

average_joe (profile) says:

We’ve talked a few times about how attacks on new innovations in the name of protecting copyright can create massive chilling effects. For example, the increasingly questionable arguments against Megaupload have created a real chill for online cloud storage providers. That was likely manifest last week in the news that Dropbox was killing off its “public folders” feature in deference to its link feature, basically making the product less useful.

Yeah, it’s terrible if tech companies have to think about other people’s rights when choosing what features they provide. Not.

Anonymous Coward says:

Re: Re:

What about my right to use Dropbox to help distribute things that I’ve made?

Why does the possible thought that someone, someday might use this feature for something that other people dislike more important than my ability to use this feature right now for legitimate reasons?

Why do they win? Because they have more scary lawyers?

Are you also pro gun-control because someone might do bad things with them? What about banning bleach and ammonia because you can do bad things with that combination? What about banning soft drinks because people might get fat? Where is the line where the possible bad use outweighs the possible good use?

We have DMCA takedowns when actual bad use is discovered. They weren’t using it. That’s not my fault. But now I can’t use Dropbox for legitimate purposes.

average_joe (profile) says:

Re: Re: Re:

There will always be services for sharing legitimate files, and the ones that do it best will be rewarded by the market. The law will always have a pull on technology. Less money being poured into questionable services isn’t really a bad thing, IMO. That means the system is working. Sorry, but not all innovation is good innovation. Innovators need to take the law into account.

Anonymous Coward says:

Re: Re: Re: Re:

What exactly is a “questionable service?” Who gets to define what a “questionable service” is? How is the public folder feature of Drop Box (or equivalent features of other online storage systems) in some way “questionable?” Is a storage location accessible by anyone on the internet somehow “questionable?” If so, we’d better shut down the internet.

Anonymous Coward says:

Re: Re: Re: Re:

Just like those pesky ‘colonists’ took English law into account when they were ‘innovating’ a new country….

Oh snap… they totally ignored the laws that they did not agree with as free thinking individuals and attempted to create a more free, open, and honest society (and look how well that turned out…)

Sorry, but not all laws are good laws. Laws need to take the will of the people into account. (FTFY)

Anonymous Coward says:

Re: Re: Re:

if you are referring to megaupload – they were using DMCA takedowns, and are claiming they were within the law on that aspect. in fact a major issue of the case is about links vs files, which in my view is a drummed-up bogus argument by the DoJ trying to turn a technical issue into proof of criminal intent. In this sense – even worse. Things were done according to the law, and this is precisely because other cyberlockers are now falling over themselves to avoid the same fate – all pretty arbitrary.

Anonymous Coward says:

Re: Re: Re:2 Re:

Well scrapping IP completely from one day to the next will probably cost like 2-5 % of the western countrys jobs. That is a pretty steep cost for something like scrapping IP. Might as well illegalise import and gathering of oil.

While the intentions are good, it is just a catastrophy economically! The right way to do it is to keep laws reasonable(that is close to status quo or slightly laxed), have judges be pragmatic and tell the industry to live or let die…

Applesauce says:

Stopping Innovation is the intention.

The legacy players WANT innovation prevented. For them, this is a feature, not a bug. Disruption is the biggest threat to their rice bowl.

A naive observer might wonder why the legacy players don’t try to innovate themselves, but that would require work, thought, and foresight. Much easier to simply shut down any competition.

bob (profile) says:

Astroturfing from Big Search...

What do you expect?

I can tell you that copyright law also increases innovation and investment. If there’s no return on making a movie, book, album, etc., no one is going to pay for it.

Here’s an experiment for you: go to investors and ask for money to make something and release it into the public domain. Then go to a control group and promise to copyright it and sell it. You’ll get a much more positive response from the second group. That’s the kind of innovation that real copyright supports.

Big Search just wants to make sure that its source of free content keeps flowing because they can’t make their billions selling ads if they actually have to share with the content creators. (That’s one kind of sharing that Big Search doesn’t believe in supporting.)

Anonymous Coward says:

Re: Astroturfing from Big Search...

“Here’s an experiment for you: go to investors and ask for money to make something and release it into the public domain. Then go to a control group and promise to copyright it and sell it. You’ll get a much more positive response from the second group. That’s the kind of innovation that real copyright supports.

That almost sounds like a challenge for an interested individual and Kickstarter to take on at some point.

Richard (profile) says:

Re: Astroturfing from Big Search...

Here’s an experiment for you: go to investors and ask for money to make something and release it into the public domain. Then go to a control group and promise to copyright it and sell it. You’ll get a much more positive response from the second group. That’s the kind of innovation that real copyright supports.

Funny thing is that when that experiment has actually been done (eg on Kickstarter) the result has been the exact opposite of what you claim!

Anonymous Coward says:

Re: Astroturfing from Big Search...

I can tell you that copyright law also increases innovation and investment. If there’s no return on making a movie, book, album, etc., no one is going to pay for it.

“Is the copyright on this piece of entertainment still enforced? If not, I’m simply not going to partake in it!”

Anonymous Coward says:

Sure we may be killing maybe $1 billion dollars of investment in the economy with our strict IP enforcement, but it’s well worth the cost considering we’re saving $1 million dollars a year for legacy industries.

Oh wait, our deterrence isn’t saving ANY money for legacy industries? Well then we’ll have to pass even more draconian laws that cost us $10 billion a year in investments, and if that doesn’t work then even more draconian laws will be needed!

zippy says:

“BUT, BUT… COPYRIGHT MUST BE PROTECTED AT ALL COSTS!!! EVEN IF WE HAVE TO DESTROY ALL OF CIVILIZATION TO DO IT! OLD GUARD LEGACY MEDIA INDUSTRIES MUST NOT BE FORCED TO CHANGE, EVER!! THEY MUST ALWAYS BE ALLOWED TO SWINDLE?ER, EARN?AS MUCH MONEY FROM THE PUBLIC AS THEY HAVE ALWAYS MADE, REGARDLESS OF THE ADVANCE OF TECHNOLOGY! TECHNOLOGY MUST BE DESTROYED, EVEN THOUGH THE MODERN RECORDING AND FILM INDUSTRIES WOULDN’T EXIST WITHOUT IT!!! YOU CANNOT MAKE US CHANGE!! NEVER!!! PIRACY!! PIRACY!! PIRACY!! RANDOM CATCHWORD #62497581!! MAXIMALISM!! MAXIMALISM!! MONEY!! MONEY!! MONEY!! WAAAAAAAAHHHHHHH!!!!!”

/sarc

Anonymous Coward says:

Re: Re:

This time period is going to be referred to as the “Second Dark Ages” by historians a few hundred years from now. Because by then I bet a lot of the stuff that survives from this period will be locked down in DRM and/or proprietary formats from companies that have long since gone out of business and taken all their precious imaginary property into the same black hole that they and their massive arrogance collapsed into.

That said, given the success rate of DRM in the present time, odds are that cracking through the digital handcuffs and releasing the culture of the past probably won’t be that difficult for the historians of whatever enlightened era follows this one after our present civilization is dragged halfway back to the stone age in the name of copyright and monopoly protection.

Richard (profile) says:

Dropbox public folders

As a committed dropbox user I have to say that – whatever the merits of this story in general terms – I can’t agree with the comment about dropbox public folders. The link feature is actually a better way of achieving the same thing. You can post a link to any dropbox folder – which then becomes effectively a public folder. It made no sense to have two ways of doing it. If I was running dropbox I would have done the same. This has nothing whatever to do with chilling effects, it is just a sensible technical rationalisation.

Add Your Comment

Your email address will not be published.

Have a Techdirt Account? Sign in now. Want one? Register here

Comment Options:

Make this the or (get credits or sign in to see balance) what's this?

What's this?

Techdirt community members with Techdirt Credits can spotlight a comment as either the "First Word" or "Last Word" on a particular comment thread. Credits can be purchased at the Techdirt Insider Shop »

Follow Techdirt

Techdirt Daily Newsletter

Techdirt Deals
Techdirt Insider Discord
The latest chatter on the Techdirt Insider Discord channel...
Loading...
Older Stuff
09:00 Awesome Stuff: Monitor Everything (5)
09:00 Awesome Stuff: Cool Components (1)
12:42 Tech Companies Ask European Commission Not To Wreck The Internet -- And You Can Too (4)
09:00 Awesome Stuff: Play & Listen (1)
09:00 Awesome Stuff: Beyond Chiptunes (12)
09:00 Awesome Stuff: Updated Classics (3)
09:00 Awesome Stuff: Celebrating Cities (1)
09:00 Awesome Stuff: Crafts Of All Kinds (5)
09:00 Awesome Stuff: One Great Knob (13)
09:00 Awesome Stuff: Simple Geeky Toys (2)
09:00 Awesome Stuff: Gadgets For The New Year (18)
09:00 Awesome Stuff: A Post-Holiday Grab Bag (0)
13:34 How Private-Sector Innovation Can Help Those Most In Need (21)
09:00 Awesome Stuff: Towards The Future Of Drones (17)
09:00 Awesome Stuff: Artisanal Handheld Games (5)
09:00 Awesome Stuff: A New Approach To Smartphone VR (5)
09:00 Awesome Stuff: Let's Bore The Censors (37)
09:00 Awesome Stuff: Open Source For Your Brain (2)
09:00 Awesome Stuff: The Final Piece Of The VR Puzzle? (6)
09:00 Awesome Stuff: The Internet... Who Needs It? (15)
09:00 Awesome Stuff: The Light Non-Switch (18)
09:00 Awesome Stuff: 3D Printing And Way, Way More (7)
13:00 Techdirt Reading List: Learning By Doing (5)
12:43 The Stagnation Of eBooks Due To Closed Platforms And DRM (89)
09:00 Awesome Stuff: A Modular Phone For Makers (5)
09:00 Awesome Stuff: Everything On One Display (4)
09:00 Awesome Stuff: Everything Is Still A Remix (13)
09:00 Awesome Stuff: Great Desk Toy, Or Greatest Desk Toy? (6)
09:00 Awesome Stuff: Sleep Hacking (12)
09:00 Awesome Stuff: A Voice-Operated Household Assistant (19)
More arrow