8 ms·

“We conclude that piracy and similar competitive shocks push firms to innovate to stay ahead of imitator products, and that this effect is moderated by their ex

“We conclude that piracy and similar competitive shocks push firms to innovate to stay ahead of imitator products, and that this effect is moderated by their existing patent portfolios.” I guess it’s good to study that this is the case, but isn’t this exactly why companies fight piracy and attempt to patent and then enforce those patents? That is to reduce competition and make it easier to extract value from what they’ve produced? Basically, isn’t the premise that if privacy was rampant and patents didn’t exist then more people and companies would be able to innovate on the technology without fear of a lawsuit? I think of how stagnant the Eink space is, and how much broader usage might that technology get if it wasn’t encumbered by patents (just one example)? I guess I just don’t find this surprising.

danShumway 5y ago
I think you might be slightly out of touch with mainstream attitudes/beliefs about what the effects of software piracy are. Personally, it is extremely common for me to find people who argue that piracy reduces innovation and discourages businesses from building new things. I don't have survey data on this, I'm just speaking anecdotally, but I suspect that's the prevailing view among most Americans. I'm not sure if that attitude is as prevalent in other countries. There is a certain group of people where this will basically just confirm some of their priors and it won't be surprising at all. But there is another group of people who (I think sincerely) believe the opposite, and (keeping in mind that this is only one study) I do think it pushes back against their priors in a potentially interesting way.
- pishpash 5y ago
  It may do both, increase small, incremental innovations and decrease large, R&D-heavy innovations.
- bluejekyll 5y ago
  Maybe I am out of touch. There is a different question and that’s if piracy is good. That’s a little harder to answer. Piracy is potentially good for the overall market (free innovation, etc). Piracy is probably bad for the company/person who produced the good (ie they lose revenue and have to innovate themselves more to stay ahead of free). The second has been debated at length, and I know I honestly don’t know the answer. I used to see a lot of arguments that piracy can be used as a means to get access to free training and lock-in with a specific product, but then when they go legitimate, they then acquire real licenses. But the producing company has to make it clear that if people don’t go legit, then they will get sued. It’s kinda like the SaaS freemium -> enterprise license models some providers use.
  - dogleash 5y ago
    I don't think it's an argument that "piracy is good", but instead piracy serves as a sort of test case to explore the extent to which current boundaries of intellectual property law is "promot[ing] the Progress of Science and useful Arts."
    - bluejekyll 5y ago
      Right, and that seems to be the ultimate question. Which side of the scale should society fall on some of these questions. Is it better for the majority to progress more quickly without those intellectual property laws, or do we need the profit motive for companies to innovate and therefor be rewarded for that innovation. It doesn’t feel like an either or, but more of a how far in either direction should the laws be. As a question, would software patents be more acceptable to people if they were limited to 2-5 years rather than the 15 (I think) they are now?
  - silisili 5y ago
    I agree with the premise of the second. The big money comes from pros and corporate concracts, who generally (but not always) avoid pirated software. I feel if MS and Adobe weren't so lenient on piracy, they wouldn't have captured/held the worldwide market in their segments at such an astounding rate. For a smaller, non-monopoly, it may be a very different case though.
    - 0xcde4c3db 5y ago
      At one point, Bill Gates openly admitted that this was part of Microsoft's China strategy [1]: > Although about 3 million computers get sold every year in China, people don't pay for the software. Someday they will, though. And as long as they're going to steal it, we want them to steal ours. They'll get sort of addicted, and then we'll somehow figure out how to collect sometime in the next decade. [1] https://www.latimes.com/archives/la-xpm-2006-apr-09-fi-micropiracy9-story.html https://www.latimes.com/archives/la-xpm-2006-apr-09-fi-micro...
      - 5y ago
- 0xfaded 5y ago
  Economists use number of patents as a measure of innovation, and my reading of the abstract was basically "piracy increases innovation where innovation = patents". I think a more interesting study would compare software innovation in China vs the West. Anyone who remembers computer vision pre ~2013 will fondly remember that simple things like image descriptors and occupancy grids are patented. "Patent encumbered technology" was jargon. Thankfully a lot of the more egregious patents from the dotcom era are now expiring.
  - belval 5y ago
    Eh this approach still exists at FANG companies, it seems like we stockpile patents to ensure that if we get sued by another FANG-level company it's mutually assured destruction. The legal department at a startup I used to work at was pretty open about it.
    - rhino369 5y ago
      It can also be lucrative if business wanes. Companies with near monopoly power already printing money regardless so they don't bother. But a lot of once-great companies turn to monetizing patents. Some of the most successful patent trolls buy portfolios from companies that were actually engaged in the field at the time.
    - webmaven 5y ago
      > Eh this approach still exists at FANG companies, it seems like we stockpile patents to ensure that if we get sued by another FANG-level company it's mutually assured destruction. > The legal department at a startup I used to work at was pretty open about it. They also can be (and have been) used as a cudgel against smaller companies to force them to make a deal or even sell out to the patent holder: > The blue suits did not even confer among themselves. They just sat there, stonelike. Finally, the chief suit responded. "OK," he said, "maybe you don't infringe these seven patents. But we have 10,000 U.S. patents. Do you really want us to go back to Armonk [IBM headquarters in New York] and find seven patents you do infringe? Or do you want to make this easy and just pay us $20 million?" https://www.forbes.com/asap/2002/0624/044_print.html https://www.forbes.com/asap/2002/0624/044_print.html
- matheusmoreira 5y ago
  > piracy reduces innovation and discourages businesses from building new things The power of intellectual property holder propaganda really is something to behold. That's not just false, the opposite is true. Infringement helps create new industries and more competition. Check out this thread for historical examples: https://news.ycombinator.com/item?id=28330810 https://news.ycombinator.com/item?id=28330810 Also, look at China. Intellectual property infringement is a huge part of the reason why it's so prosperous now. Wish my own country had the balls to do this.
kenjackson 5y ago
"We conclude that piracy and similar competitive shocks push firms to innovate to stay ahead of imitator products," In the case of piracy, this seems like an odd statement. If I can pirate your software and make it widely available then you're innovating to stay ahead of yourself -- which I'll just immediately pirate when you release it. How does me innovating quickly, help me stay ahead of people simply copying my product? Unless the innovation is around how to monetize my product, even in the face of piracy (e.g., ads, support, SaaS) -- in which case those things don't really imply that I need to innovate on the actual product itself.
- PaulHoule 5y ago
  Specifically that article says that firms vulnerable to piracy file patents, copyright registrations and trademarks. All of those are tracers for innovation because they're not supposed to give you any of those for something that isn't new, but they are really weapons one would use against pirates, imitators, competitors, etc.
- 13415 5y ago
  I don't know what their explanation is, but one explanation would be that people frequently use piracy to try out and compare products. Later, once they have decided on the best product, some of them go legit. That's certainly how I used piracy in the past. So the customers are way better informed with piracy, which forces companies to innovate more quickly to stay ahead. They can no longer rely on deceptive marketing practices and market dominance.
  - paulryanrogers 5y ago
    Free demos can fill this gap. Though IME it can feel overwhelming trying many at once so you don't have to pay before being fully informed. Professional reviews can help too, assuming ones needs aren't too niche. All that said I can imagine some folks feel justified pirating them to reduce that trial expiration anxiety. Just beware that pirated copies or cracks can also contain Trojans.
- azalemeth 5y ago
lutorm 5y ago
It doesn't mean that innovation is to the benefit of the user, though, does it? Maybe all the innovation is in anti-piracy technology?
deeviant 5y ago
> Basically, isn’t the premise that if *privacy* was rampant... God could you imagine such a world, one which privacy was rampant, I can't but I wish I could. Sorry couldn't help chuckle at your typo.
- bluejekyll 5y ago
  ha, I didn't even notice that and even reread it a couple times. can't change it now ;)
zepto 5y ago
> isn’t the premise that if privacy was rampant and patents didn’t exist then more people and companies would be able to innovate on the technology No, because innovating on technology costs money and if you can’t get a return on that, the incentive to invest is eliminated. The eInk situation is indeed dysfunctional, but the fact that one patent holder is bad at business doesn’t mean much more than that.
- reificator 5y ago
  > The eInk situation is indeed dysfunctional, but the fact that one patent holder is bad at business doesn’t mean much more than that. Whether they're bad at business or not, it's certainly not a situation that makes me feel like the patent system is in my best interest.
  - zepto 5y ago
    Sure, but the point is that no system is going to be perfect, so just this one example doesn’t tell us much.
- foxpurple 5y ago
  It’s not just eink. So many technologies are blocked by patents. It’s said that 3D printing only just exploded because the patents required had expired.
matheusmoreira 5y ago
> isn’t the premise that if piracy was rampant and patents didn’t exist then more people and companies would be able to innovate on the technology without fear of a lawsuit? This isn't just a premise. It is fact with historical precedent. Check out this thread for numerous examples: https://news.ycombinator.com/item?id=28330810 https://news.ycombinator.com/item?id=28330810 Patents, copyrights, intellectual property in general... Nothing but state-granted monopolies with the explicit aim of preventing others from competing with the established players. Society is better served by ignoring such bullshit.
- danielheath 5y ago
  I don’t have a problem with the concept that - having done the expensive work of testing things out until you find one that works - you should be rewarded via protectionism. What’s absolutely crazy to me is how long the terms are. In most fields, 2 years is plenty of time to make bank; in a few, 5 may be appropriate, and in a few very rare cases (pharma?) you may need longer to make up the cost of experimenting in a highly regulated space. There’s no justification for the expansive terms available now.
  - matheusmoreira 5y ago
    > What’s absolutely crazy to me is how long the terms are. Yes. Intellectual property is imaginary property, based on the lie of artificial scarcity. We could easily tolerate this arrangement though if the terms were reasonable enough. After a while, the works would enter the public domain and things would be as they should be. Seems like a small sacrifice in order to ensure creators can be rewarded via the familiar product sales model. Unfortunately, these intellectual property holders turned out to be rent seekers. They create successful works, make their money. When it's our turn to reap the public domain benefits? They refuse to allow it. They lobby the governments for extensions. Copyright durations are functionally infinite. They want to extract value out of their imaginary property forever. Can't remember the last time a movie I watched entered the public domain. Don't think I'm ever going to see it within my lifetime. They don't respect our public domain rights. Why should we respect their imaginary property? Let's stop pretending their products are artificially scarce because they aren't. Everything is public domain.
robinsoh 5y ago
> I think of how stagnant the Eink space is, and how much broader usage might that technology get if it wasn’t encumbered by patents (just one example)? I work in the display industry and I have no idea what you're talking about. I see this again and again in HN. Look at my comment history. There's reasonable amount of innovation and competition in electrophoretics. But it is a niche technology and the actual physics of rheology are what limits innovation in this space. If you feel I'm mistaken, please say exactly what you mean is being limited in a technical sense. I perceive your type of comment as equivalent to a display engineer posting on a software forum claiming that patents are limiting progress in operating systems and that's why Microsoft Windows is the only non-innovative product available. I hope the analogy is clear.

danShumway 5y ago

I think you might be slightly out of touch with mainstream attitudes/beliefs about what the effects of software piracy are. Personally, it is extremely common for me to find people who argue that piracy reduces innovation and discourages businesses from building new things. I don't have survey data on this, I'm just speaking anecdotally, but I suspect that's the prevailing view among most Americans. I'm not sure if that attitude is as prevalent in other countries. There is a certain group of people where this will basically just confirm some of their priors and it won't be surprising at all. But there is another group of people who (I think sincerely) believe the opposite, and (keeping in mind that this is only one study) I do think it pushes back against their priors in a potentially interesting way.

pishpash 5y ago
It may do both, increase small, incremental innovations and decrease large, R&D-heavy innovations.
bluejekyll 5y ago
Maybe I am out of touch. There is a different question and that’s if piracy is good. That’s a little harder to answer. Piracy is potentially good for the overall market (free innovation, etc). Piracy is probably bad for the company/person who produced the good (ie they lose revenue and have to innovate themselves more to stay ahead of free). The second has been debated at length, and I know I honestly don’t know the answer. I used to see a lot of arguments that piracy can be used as a means to get access to free training and lock-in with a specific product, but then when they go legitimate, they then acquire real licenses. But the producing company has to make it clear that if people don’t go legit, then they will get sued. It’s kinda like the SaaS freemium -> enterprise license models some providers use.
- dogleash 5y ago
  I don't think it's an argument that "piracy is good", but instead piracy serves as a sort of test case to explore the extent to which current boundaries of intellectual property law is "promot[ing] the Progress of Science and useful Arts."
  - bluejekyll 5y ago
    Right, and that seems to be the ultimate question. Which side of the scale should society fall on some of these questions. Is it better for the majority to progress more quickly without those intellectual property laws, or do we need the profit motive for companies to innovate and therefor be rewarded for that innovation. It doesn’t feel like an either or, but more of a how far in either direction should the laws be. As a question, would software patents be more acceptable to people if they were limited to 2-5 years rather than the 15 (I think) they are now?
- silisili 5y ago
  I agree with the premise of the second. The big money comes from pros and corporate concracts, who generally (but not always) avoid pirated software. I feel if MS and Adobe weren't so lenient on piracy, they wouldn't have captured/held the worldwide market in their segments at such an astounding rate. For a smaller, non-monopoly, it may be a very different case though.
  - 0xcde4c3db 5y ago
    At one point, Bill Gates openly admitted that this was part of Microsoft's China strategy [1]: > Although about 3 million computers get sold every year in China, people don't pay for the software. Someday they will, though. And as long as they're going to steal it, we want them to steal ours. They'll get sort of addicted, and then we'll somehow figure out how to collect sometime in the next decade. [1] https://www.latimes.com/archives/la-xpm-2006-apr-09-fi-micropiracy9-story.html https://www.latimes.com/archives/la-xpm-2006-apr-09-fi-micro...
    - 5y ago
0xfaded 5y ago
Economists use number of patents as a measure of innovation, and my reading of the abstract was basically "piracy increases innovation where innovation = patents". I think a more interesting study would compare software innovation in China vs the West. Anyone who remembers computer vision pre ~2013 will fondly remember that simple things like image descriptors and occupancy grids are patented. "Patent encumbered technology" was jargon. Thankfully a lot of the more egregious patents from the dotcom era are now expiring.
- belval 5y ago
  Eh this approach still exists at FANG companies, it seems like we stockpile patents to ensure that if we get sued by another FANG-level company it's mutually assured destruction. The legal department at a startup I used to work at was pretty open about it.
  - rhino369 5y ago
    It can also be lucrative if business wanes. Companies with near monopoly power already printing money regardless so they don't bother. But a lot of once-great companies turn to monetizing patents. Some of the most successful patent trolls buy portfolios from companies that were actually engaged in the field at the time.
  - webmaven 5y ago
    > Eh this approach still exists at FANG companies, it seems like we stockpile patents to ensure that if we get sued by another FANG-level company it's mutually assured destruction. > The legal department at a startup I used to work at was pretty open about it. They also can be (and have been) used as a cudgel against smaller companies to force them to make a deal or even sell out to the patent holder: > The blue suits did not even confer among themselves. They just sat there, stonelike. Finally, the chief suit responded. "OK," he said, "maybe you don't infringe these seven patents. But we have 10,000 U.S. patents. Do you really want us to go back to Armonk [IBM headquarters in New York] and find seven patents you do infringe? Or do you want to make this easy and just pay us $20 million?" https://www.forbes.com/asap/2002/0624/044_print.html https://www.forbes.com/asap/2002/0624/044_print.html
matheusmoreira 5y ago
> piracy reduces innovation and discourages businesses from building new things The power of intellectual property holder propaganda really is something to behold. That's not just false, the opposite is true. Infringement helps create new industries and more competition. Check out this thread for historical examples: https://news.ycombinator.com/item?id=28330810 https://news.ycombinator.com/item?id=28330810 Also, look at China. Intellectual property infringement is a huge part of the reason why it's so prosperous now. Wish my own country had the balls to do this.

kenjackson 5y ago

"We conclude that piracy and similar competitive shocks push firms to innovate to stay ahead of imitator products," In the case of piracy, this seems like an odd statement. If I can pirate your software and make it widely available then you're innovating to stay ahead of yourself -- which I'll just immediately pirate when you release it. How does me innovating quickly, help me stay ahead of people simply copying my product? Unless the innovation is around how to monetize my product, even in the face of piracy (e.g., ads, support, SaaS) -- in which case those things don't really imply that I need to innovate on the actual product itself.

PaulHoule 5y ago
Specifically that article says that firms vulnerable to piracy file patents, copyright registrations and trademarks. All of those are tracers for innovation because they're not supposed to give you any of those for something that isn't new, but they are really weapons one would use against pirates, imitators, competitors, etc.
13415 5y ago
I don't know what their explanation is, but one explanation would be that people frequently use piracy to try out and compare products. Later, once they have decided on the best product, some of them go legit. That's certainly how I used piracy in the past. So the customers are way better informed with piracy, which forces companies to innovate more quickly to stay ahead. They can no longer rely on deceptive marketing practices and market dominance.
- paulryanrogers 5y ago
  Free demos can fill this gap. Though IME it can feel overwhelming trying many at once so you don't have to pay before being fully informed. Professional reviews can help too, assuming ones needs aren't too niche. All that said I can imagine some folks feel justified pirating them to reduce that trial expiration anxiety. Just beware that pirated copies or cracks can also contain Trojans.
azalemeth 5y ago

lutorm 5y ago

It doesn't mean that innovation is to the benefit of the user, though, does it? Maybe all the innovation is in anti-piracy technology?

deeviant 5y ago

> Basically, isn’t the premise that if *privacy* was rampant... God could you imagine such a world, one which privacy was rampant, I can't but I wish I could. Sorry couldn't help chuckle at your typo.

bluejekyll 5y ago
ha, I didn't even notice that and even reread it a couple times. can't change it now ;)

zepto 5y ago

> isn’t the premise that if privacy was rampant and patents didn’t exist then more people and companies would be able to innovate on the technology No, because innovating on technology costs money and if you can’t get a return on that, the incentive to invest is eliminated. The eInk situation is indeed dysfunctional, but the fact that one patent holder is bad at business doesn’t mean much more than that.

reificator 5y ago
> The eInk situation is indeed dysfunctional, but the fact that one patent holder is bad at business doesn’t mean much more than that. Whether they're bad at business or not, it's certainly not a situation that makes me feel like the patent system is in my best interest.
- zepto 5y ago
  Sure, but the point is that no system is going to be perfect, so just this one example doesn’t tell us much.
foxpurple 5y ago
It’s not just eink. So many technologies are blocked by patents. It’s said that 3D printing only just exploded because the patents required had expired.

matheusmoreira 5y ago

> isn’t the premise that if piracy was rampant and patents didn’t exist then more people and companies would be able to innovate on the technology without fear of a lawsuit? This isn't just a premise. It is fact with historical precedent. Check out this thread for numerous examples: https://news.ycombinator.com/item?id=28330810 https://news.ycombinator.com/item?id=28330810 Patents, copyrights, intellectual property in general... Nothing but state-granted monopolies with the explicit aim of preventing others from competing with the established players. Society is better served by ignoring such bullshit.

danielheath 5y ago
I don’t have a problem with the concept that - having done the expensive work of testing things out until you find one that works - you should be rewarded via protectionism. What’s absolutely crazy to me is how long the terms are. In most fields, 2 years is plenty of time to make bank; in a few, 5 may be appropriate, and in a few very rare cases (pharma?) you may need longer to make up the cost of experimenting in a highly regulated space. There’s no justification for the expansive terms available now.
- matheusmoreira 5y ago
  > What’s absolutely crazy to me is how long the terms are. Yes. Intellectual property is imaginary property, based on the lie of artificial scarcity. We could easily tolerate this arrangement though if the terms were reasonable enough. After a while, the works would enter the public domain and things would be as they should be. Seems like a small sacrifice in order to ensure creators can be rewarded via the familiar product sales model. Unfortunately, these intellectual property holders turned out to be rent seekers. They create successful works, make their money. When it's our turn to reap the public domain benefits? They refuse to allow it. They lobby the governments for extensions. Copyright durations are functionally infinite. They want to extract value out of their imaginary property forever. Can't remember the last time a movie I watched entered the public domain. Don't think I'm ever going to see it within my lifetime. They don't respect our public domain rights. Why should we respect their imaginary property? Let's stop pretending their products are artificially scarce because they aren't. Everything is public domain.

robinsoh 5y ago

> I think of how stagnant the Eink space is, and how much broader usage might that technology get if it wasn’t encumbered by patents (just one example)? I work in the display industry and I have no idea what you're talking about. I see this again and again in HN. Look at my comment history. There's reasonable amount of innovation and competition in electrophoretics. But it is a niche technology and the actual physics of rheology are what limits innovation in this space. If you feel I'm mistaken, please say exactly what you mean is being limited in a technical sense. I perceive your type of comment as equivalent to a display engineer posting on a software forum claiming that patents are limiting progress in operating systems and that's why Microsoft Windows is the only non-innovative product available. I hope the analogy is clear.