Intellectual Property Rights of Software and Open Source

Date October 25, 2002
Speaker Bradford L. SMITH(Senior Vice President and General Counsel, Microsoft)Lawrence LESSIG(Professor, Stanford Law School)
Moderator IKEDA Nobuo(Senior Fellow, RIETI)
Materials

Summary

Bradford L. Smith

This presentation will would focus on the diversity of software development models that together have created a healthy and vibrant software marketplace.

While it is difficult to be optimistic about the economic outlook for the short-term, for the long-term it is difficult to be pessimistic. Technological developments and the ability to move data and content will positively contribute to the digital economy in the future.

In the 1960s and 1970s, computing was vertically integrated while today there are a number of horizontal layers in the digital economy, featuring companies that specialize in well-defined areas such as hardware, software and services. The emergence of new technological companies like Microsoft over the last two decades was made possible by the U.S. government's intellectual protection policies that promoted the growth of technological creativity.

Over the last couple of years there has been increased discussion about the diversity of software development models. Open source software has an important role to play and offers benefits such as transparency, accessibility and building a sense of community. Commercial software has a number of roles and benefits such as being a mass market commodity that is affordable and easy to deploy on a range of platforms.

More recently there has been a "movement toward the middle" in regard to combining elements of open source and commercial proprietary software. Microsoft's Shared Source Initiative provides for the sharing of source code with communities while protecting intellectual property and is available to government, developers and IT professionals.

Innovation and growth of the software market depends on a healthy ecosystem with a coexistence of different software models, more consumer choice, a healthy intellectual commons and commercial industry, and government funding for basic research and development that promotes the interaction and not separation of software development models.

Lawrence Lessig

Broadly speaking, software is either licensed or freely available in the public domain. Within the digital ecosystem, software can be conditioned and unconditioned. Conditioned software includes proprietary software, GPL(GNU General Public License), and in limited circumstances certain open source software. Unconditioned software includes software in the public domain and most open source software.

With all things begin equal, open source software is better than closed or proprietary software. However, there are necessary evils built into this truth since closed software is necessary to achieve meaningful commercial development.

The main disagreement that has developed between Microsoft and open source software supporters is over GPL software. This is software that is free to obtain but licensed under the GPL. GPL software has a condition that any new software based on it must also be made available to the public for anyone else to use and improve upon if they wish.

Much debate has ensued over the government's role in regard to GPL. Microsoft feels the government should not offer any funding to the development of GPL code. In my view, I do not think the government should be in the business of picking business models when dispensing public funds and providing support. Instead, it should promote the digital ecosystem by supporting only those projects with the potential to enhance the development of the ecosystem.

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Following the presentation, Mr. Smith responded to Prof. Lessig's contention that proprietary software equaled closed source code by saying there was more to being open or closed software than whether one could see the source code. With regard to the GPL, Mr. Smith noted that by using the code in product development, one would largely be prevented from selling the new product since it would become applicable to the GPL.

Mr. Smith also stated that the GPL only supported a business model in which a product was given away in the hope of selling something else. This practice, he noted, was at the heart of the dot.com boom and subsequent dot.bomb debacle.

Prof. Lessig pointed out that proprietary software's requirement that one must pay money to use it is a condition not unlike the conditions GPL software imposed on users. He said, however, it was unclear which condition was more restrictive.

Questions and Answers

Mr. Kenji Naemura from Keio University asked the panelists for their views on the lesser GPL.

Mr. Smith said the lesser GPL was designed for certain library functions. He also noted that the free BSD license makes source code available but does not have the restrictiveness of GPL.

Prof. Lessig cautioned that the free BSD license could in the future be "forked" and that the new version of the software could then become the dominant version.

Mr. Murakami from METI's Information Bureau commented that there was an open source discussion within the Japanese government and that procurement was in line with market trends.

Mr. Smith said Microsoft's position was that government procurement officers should make informed decisions based on a wide range of factors, including the total cost of ownership (product price, maintenance, service costs, security, etc.).

Mr. Kitamura said that the issues of openness and transparency were interesting topics within the presentations and he also asked for comments on software protected by copyright as opposed to patents.

Prof. Lessig said protecting software by patents made it hard for innovation to proceed since patents created uncertainty. Copyrights, he noted, were different in that it would be easier to determine when one was copying software.

Mr. Smith said Microsoft was still in the process of looking at how to make software more transparent, such as sharing source code and providing technological support to academia.

An audience member noted that it was reasonable to accept the GPL model along with other models, and that in certain business areas there may be opportunities to use the GPL to make businesses viable.

Prof. Lessig responded that the patent system was a terrible system for delivering intellectual property protection. He also noted that the current U.S. patent system imposed large costs on businesses.

Mr. Smith stated that the patent system should be reworked every 20 to 40 years and that this review should be grounded in a cost-benefit analysis. Also, he noted that a big challenge facing future progress was a legal system that advanced the objectives of innovation, transparency and fair use policies.

Prof. Lessig said there was opportunity for progress in the patent issue but less so for copyrights. He pointed out that in the U.S., there were no way to distribute content unless the large concentrated interests agreed to do so.

An audience member asked whether GPL conditions could be enforced more easily because of the copyright scheme.

Prof. Lessig said that without copyright law, the GPL would be ineffective.

Mr. Okuma, an open source consultant said that "Shared Source" is fragile becaue it shows the code but does not permit its fix.

Mr. Smith said there were pros and cons with both open and closed source code and that Microsoft's view was that one source is not superior to the other in terms of security.

On that final comment, Mr. Ikeda thanked the panelists for their presentations and comments and closed the seminar.

*This summary was compiled by RIETI Editorial staff.