Knowledge and innovation in intellectual property : the case of computer program copyright




Dempsey, Gillian

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Information economics 1s used to develop a model of technological innovation which is applied to the case of computer program copyright. A critical outline of the neo-classical economic perspective of innovation and Arrow's concerns regarding appropriability of information is provided. This perspective justifies intellectual property institutions as a correction of market failure and as a "reward for invention". The same literature marginalises countervailing arguments including monopoly distortions, alternative sources of innovator reward and the potential for anti-competitive strategies. Information economics provides a distinct and preferred perspective in the analysis of technological development and in the role of intellectual property in the promotion of innovat~on. The conception of information as a resource, rather than as a commodity, implies that information is part of a shared technological capital, whose indivisibilities should be exploited for social benefit. The information perspective conceives innovation as a messy, evolutionary and interactive process involving many participants, and a cycle of innovation characterised by incremental improvements, imitation and learning strategies, and technological trajectories influenced by bounded rationality. These environments will also generate powerful network externalities. A model of innovation based on these assumptions is developed which incorporates two major distinctions. One is between tacit and codified knowledge; the other is between technology and technological artefacts. This knowledge-artefact distinction is defined in the innovation model by the concept of an information technology artefact, characterised as a physical product whose underlying means of creation is not communicated by mere possession of that product. This innovation model is reconciled to the intellectual property regimes of confidential information, patent and copyright, demonstrating the use of legal doctrines to encourage the diffusion of tacit knowledge through society. Applying the innovation model to the question of computer programs, it is argued that programs in their executable of machine code forms correspond to the concept of an IT artefact, in that possession of machine code does not imply access to the underlying source code. The process of software development and the utility of decompilation are discussed in this context, particularly the lack of isomorphic correspondence between machine code and third or higher generation source code languages. The close analogy between the software development model and the scenario of confidential information suggests a limited role for copyright of computer programs beyond a prohibition of literal copying or piracy. Arguments favouring broader protection of non-literal elements of computer programs are critically reviewed and prescriptions for proprietary protocols, user interfaces and standards in the literature are rejected as inconsistent with the realisation of network externalities by the software industry. An information economics perspective instead recommends the encouragement of reverse engineering and imitative competition provided that developers implement their own source code solutions to invest in the diffusion of tacit programming knowledge. Decompilation should be permitted to provide a limited degree of access to internal interfaces and communications protocols. Elements of a user interface should not be protected. Copyright regimes in the United States, Europe and Australia are assessed against the policy prescriptions generated by the application of the innovation model to computer programs. The influence of political actors and international pressures such as TRIPS are noted. It is hoped that the infusion of an information economics approach might trigger the switch in perspective needed in policy debates to preserve the integrity of the intellectual commons.






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