Innovation Asymmetry: Why The Copyright Industry Always Freaks Out About New Technologies

from the copyright-and-innovation dept

A few weeks ago, I was in Washington DC to moderate a panel concerning the intersection of innovation and copyright. One of the panelists, law professor Michael Carrier whose work we’ve mentioned before, talked about an interesting concept to explain why many people in the “copyright industries” freaked out about new innovations, rather than recognizing their opportunities. He referred to it as “innovation asymmetry” and he’s now expanded on the idea over at the Disruptive Competition Project’s blog.

I define the innovation asymmetry as an overemphasis on a technology’s infringing uses and insufficient appreciation of its noninfringing uses. Why is there such an asymmetry? Because infringing uses are immediately apparent, quantifiable, and advanced by motivated, well-financed copyright holders. Noninfringing uses, in contrast, are less tangible and less apparent at the onset of a technology.

The costs of infringing uses can be quantified. They roll off copyright owners’ tongues: $250 billion in losses to the U.S. economy each year from IP infringement. 750,000 jobs lost annually from infringement. It doesn’t matter if the figures are correct. For even if they are completely disproved, the mere articulation of numbers promises a precision that is difficult to dislodge from the audience’s consciousness.

On the flip side, the power of potential innovation is much harder to quantify.

In contrast, noninfringing uses are less tangible, less obvious at the onset of a technology, and not advanced by an army of motivated advocates. First, they are less tangible. Noninfringing uses are difficult to quantify. How do we put a dollar figure on the benefits of enhanced communication and interaction? Estimates of future noninfringing uses will be less powerful than the actual, hard-dollar figures presented by copyright owners.

Second, they are more fully developed over time. When a new technology is introduced, no one, including the inventor, knows all of the beneficial uses to which it will eventually be put. The path of history is replete with inventions for which nobody foresaw the eventual popular and revolutionary use.

He then lists out a whole series of inventions where the inventor was completely wrong in how their invention would be used. In some ways, this is a modified form of loss aversion. People often strongly prefer avoiding losses to acquiring gains. But it goes a bit further than that, because Carrier correctly notes that you can look at what’s around and try to “quantify” those losses, making them feel more “real” even if they’re not. But the opportunities and advancements that these innovations almost always enable are things that are less obvious, even to the inventors, even if they always show up eventually.

So you have a classic form of “information asymmetry” in that you can believe you have real information about the potential losses, but not have the information on the very large gains, leading many to simply focus on the losses rather than the gains. That leads to misguided attacks on the technology, moral panics and the like. Carrier hopes that by explaining this concept, more will begin to actually be aware of it, rather than automatically be swayed by the fear mongering.

When policymakers and courts consider copyright law, they must take into account the innovation asymmetry. For if they do not, innovation will suffer. And we will not even know what we have lost.

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Comments on “Innovation Asymmetry: Why The Copyright Industry Always Freaks Out About New Technologies”

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out_of_the_blue says:

Because THIEVES always use it as easier way to steal!

Asymmetry is between those who produce and those who steal. As I’ve written many times before, no matter how odius are the producers nor how vile is the CRAP that they produce, when forced to choose between them and Piratey Fanboy Kids who are addicted to that CRAP, I choose the producers.

And copyright is simple as “I made it, therefore I own it”. Some don’t seem to grasp that all statute must be aligned with common, that statute is just clarifying and codifying that common law. “I made it, YOU DID NOT” is an irreducible primary claim to the rewards of who did create a work, and denial of the benefits of even consuming it for free to those who did not create it.

And no amount of gadgetry overcomes the rights of a person.

You’re not on the leading edge of new production models, Mike, just advocating plain old-fashioned theft with new gadgets. (190 of 192)


jameshogg says:

Re: Because THIEVES always use it as easier way to steal!

Subway workers make sandwiches, too, but that doesn’t mean they own them. Don’t make the same mistake as the strict socialists.

And by the way, your philosophy is totally unprepared for the advances of technology in the future. 3D printer? No chance. Google Fiber? Dead philosophy walking. Tor exapansion? Luddite tantrums are calling.

I, however, do not suffer from such needless destabilisation and multiplication of unnecessary constants. Assurance contracts are the only moral solution. Crowdfunding is where the real revolution lies – not in Netflix or Spotify, or even Google.

And oh yeah, the derivative artists get their rights with my way, too. Long live deviantArt!

Bpat says:

Re: Because THIEVES always use it as easier way to steal!

Why do you always forget copyright is about more than duplicating movies, music and books.

Many old musics and books were inspired by other works from the time, to extents that would not be allowed under today’s copyright laws. How can new forms of music flourish if each new beat is copyrighted for 50+ years?

Annonimus says:

Re: Because THIEVES always use it as easier way to steal!

Lets go with your logic of I made it therefore I own it: if I take a book out of a library and copy it at my home with my own resources for my own personal use am I stealing from the writer of the work by manufacturing my own copy for personal use without paying the copyright on the work? Or do I own that copy of the book now?

Also you are aware that just because you made it no one has to buy it from you? In fact in order to sell something to people you have to meet their demand for a service or a product. The people you are trying to sell to do not have to meet your supply with their money.

Anonymous Coward says:

innovation asymmetry !!!

That’s an odd term, I wonder what it means?

>”I define the innovation asymmetry as an overemphasis on a >technology?s infringing uses and insufficient appreciation >of its noninfringing uses.”

Oh right, now its perfectly clear!

>” Because infringing uses are immediately apparent, >quantifiable, and advanced by motivated, well-financed >copyright holders.”

Are they? like what ?

“In contrast, noninfringing uses are less tangible, less obvious at the onset of a technology, and not advanced by an army of motivated advocates.”

its funny usually the innovation is very tangible, and is the primary driver of the technology, for example the innovation of the CCD chip as used in digital cameras for taking photo’s is somehow a LESS tangible use that say using it to record a movie at the theatres?

>”Noninfringing uses are difficult to quantify.”

Really ???? just saying it again does not make it so, so the argument is “noninfringing innovation is hard to quantify? No wonder there is no real world examples provided to back up this argument.

Professor or not, he does not make a compelling argument.

>”The costs of infringing uses can be quantified. They roll >off copyright owners? tongues: $250 billion in losses to >the U.S. economy each year from IP infringement. 750,000 >jobs lost annually from infringement.”

TD has always told me it cannot be quantified, how do you then justify this statement?

“Alexander Graham Bell thought the telephone would be used primarily to broadcast the daily news.”

He though the invention of the telephone would enable people to communicate by voice over wires, voice over wires has many uses, but they are still ‘voice over wires’

“Thomas Edison thought the phonograph would be used ?to record the wishes of old men on their death beds.?

Thomas Edison thought he would be able to record sounds on a media, and play it back, one application might be for ‘death bed wishes’ but it was invented FOR death bed wishes, it was invented to record sound.

“Railroads were originally considered to be feeders to canals.”
So ?? (nor is that actually true), railroads were originally consider for the purposes of TRANSPORT.

“IBM envisioned only 10 to 15 orders for the computer in 1949.”

I have no idea why these would be presented as innovation asymmetry.

The telephone did not have “obvious infringing’ uses, or the other way around.

Professor or not, he fails to provide anything like a compelling argument,

Anonymous Coward says:

Re: Remember this quote?

“”The past, in general, is over-represented in Washington. The future has no lobbyists.” “

short, sweet and totally WRONG, so if ACLU lobbied the US Government to have NSA stop data collection, it would ONLY BE FOR PAST COLLECTION?

and they would NEVER lobby for the NSA to stop data collection IN THE FUTURE??? (I wonder who wrote that stupid quote in the first place?)

John Fenderson (profile) says:

Re: Re: Remember this quote?

Someone lobbying to stop domestic spying is lobbying about the past — the lobbying is over something that has already been happening. That the behavior being lobbied about also extends into the future doesn’t relate to what the quote is talking about. The quote is about the lack of lobbying for things that haven’t happened at all yet.

Anonymous Coward says:

‘we will not even know what we have lost.’

quite right but as in the majority of cases, it’s sections of or all of the entertainment industries who claim foul and throw the ridiculous numbers about and it’s ‘encouraged’ politicians who aid the industries whenever and as much as possible to retain what THEY want, losing what we didn’t get to use, doesn’t even matter to them!!

Just Sayin' says:

Sort of hard to quantify the story

however… one thing caught my eye:

“the power of potential innovation is much harder to quantify.”

The problem here is very complex, because it is NOT uni-dimensional. That is to say that the gains from “innovation” are not just a gain, but they also have the potential to detract in other ways. One thing we don’t have is a simple way to see the effects such disregard for patents (as an example) would have on the overall larger advancements. Would it discourage investment from research, or redirect that money towards marginal improvements rather than larger gains?

Those who try to push this sort of change point to countries like India or China as examples of “low” patent economies that are booming, but fail to point to places like Japan, which has gone completely through the cycle and out the other side. They are now very protectionist, as once they caught up (by mostly ignoring rights from other countries), they realized they had more to lose and less to gain.

The gains of these bomming economies come at the expense of others, as an example Japan which took took a huge slice of the worldwide automotive market. More recently, the cheap labor, lack of enviromental laws, and lax patent laws have allowed China to grow by leaps and bounds – but did so by pretty much decimating the manufacturing sector in most of the western world. With a burgeoning middle class, China is suddenly finding themselves undercut by other, even more lax and underpaying environments like India, Indonesia, and Pakistan.

Yet for all of it, we really aren’t much further ahead. Taken in a vacuum, China has advanced. However, taken as a whole, the world hasn’t perhaps advanced as much. If all of that energy had been put into true innovation and not replication, where would we be today? Remember, China is still working on the concept of landing a man on the moon… yes, they are enjoying their 1960s, complete with a sexual revolution.

So we are left with the simple problem that there is no empirical data to show that changing the patent system would be a long term benefit to mankind, beyond the potential for a very short term burst of using current patent processes without risk. The entire concept ends up pretty much being faith based rather than fact based. The moribund economy of Japan perhaps shows that the benefits are small compared to the costs.

Ninja (profile) says:

Because infringing uses are immediately apparent, quantifiable, and advanced by motivated, well-financed copyright holders.

It’s amusing how diplomatic he’s being.

advanced by motivated, well-financed copyright holders

I think this actually says all. If the MAFIAA wasn’t exactly that, a mafia, we would have much saner copyright laws, less numbers pulled from their collective asses and less anti-competitive practices. You know, the problem is not that copyright freaks out with new technology, it’s just a few rotten human beings that happen to haold the financial power.

Digger says:

Start using real numbers - the *AAs are not losing anything...

Hard dollar figures?


There hasn’t been a single proven case where any hard dollar figure claimed by anyone in the copyright industry was even remotely (Within 10,000x) close to actual damages.

10,000 downloads of a $1.00 song – they claim 10 million, actual damages, less than 3000.00 dollars to online music sales and 7000 max to recording industry. (out of the 1 dollar to buy a song on amazon or itunes, the recording industry only gets 70 cents, while the seller makes 30 cents (actual contracts may vary, but not by much)

so if a song is downloaded once, instead of 150,000, the actual damages are limited to a dollar, and only 70 cents to the recording industry.

150,000 in *lost revenue* vs 70 cents…


Sorry, but actual revenue loss to the industries due to file sharing and such is nil, zip, zilch.

Every new technology that the dinosaur industries spew vitriolic hate messages about only improves their bottom line, sales increase as their product sees more exposure.

Let’s use real numbers, where the improved bottom line is shown, rather than continuing to repeat the lies of the industry.

The only reason for job loss in those industries is because of automation. ie The RIAA/MPAA are firing people to raise profit margins. Period. There are NO losses due to technology and the masses.

Caveat: Yes, there are real pirates out there, making and selling copies of media, and the people that buy those feel they’ve paid for their copy. That’s the only real damage and it’s negligible.

The remainder of copying and sharing only improves the industry profit margins.

The other reported losses are their wild lawsuits that they never intend to collect on. They win millions, never collect, use that *loss* of income to write off other earnings so that they don’t have to pay the artists.

It’s all a scam perpetrated by the biggest crooks in the US. The RIAA/MPAA are economic terrorists and should be ripped apart, gutted and the rights they own given back to the artists that created them.

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