does. Optimists believe that the lure of capturing this huge market will keep potential competitors hungry and monopolists scared. The lumbering dominant players, goes the argument, will not become complacent about innovation or try to grab every morsel of monopoly rent. They still have to fear their raptor-like competitors lurking in the shadows. Perhaps. Or perhaps it also takes the consistent threat of antitrust enforcement. In any event, whether or not we hit the optimal point in protecting software with intellectual property rights, these rights certainly did not destroy the industry. It appeared that, even with convergent creativity and network effects, software could be crammed into the Procrustean bed of copyright without killing it off in the process. Indeed, to some, it seemed to fare quite well. They would claim that the easy legal protection provided by copyright gave a nascent industry just enough protection to encourage the investment of time, talent, and dollars, while not prohibiting the next generation of companies from building on the innovations of the past.

In addition, the interaction between copyright and software has produced some surprising results. There is a strong argument that it is the fact that software is copyrightable that has enabled the “commons-based creativity” of free and open source software. 3 What is commons-based creativity? Basically it is creativity that builds on an open resource available to all. An additional component of some definitions is that the results of the creativity must be fed back into the commons for all to use. Think of English. You use it without license or fee, and you innovate by producing new words, slang, or phrases without clearance from some Academie Anglaise. After you coin your term, it is in turn available to me to build upon or use in my own sentences, novels, or jokes. And so the cycle continues. But with words we have commons-based creativity because there were no property rights over the relevant material. The software commons is different.

The creators of free and open source software were able to use the fact that software is copyrighted and that the right attaches automatically on creation and fixation to set up new distributed methods of innovation. For ex-

ample, free and open source software under the General Public License (such as Linux) is a “commons” to which all are granted access. Anyone may use the software without restriction. All are guaranteed access to the human-read-able source code, rather than just the inscrutable machine code, so they can understand, tinker, and modify. Modifications can be distributed so long as the new creation is licensed under the open terms of the original. This creates a virtuous cycle whereby each addition builds on the commons and is returned to it. The copyright over the software is

 

the “hook” that allowed software engineers to create a license that gave free access and the right to modify, and required future programmers to keep offering these freedoms. Without the copyright, those features of the license would not have been enforceable. For example, someone could have modified the open program, releasing it without the source code, thus denying future users the right to understand and modify easily. To use an analogy beloved of free-software enthusiasts, the hood of the car would be welded shut. Home repair, tinkering, customization, and redesign become practically impossible.

If there were no copyright over software at all, software engineers would

have other freedoms, even if not legally guaranteed open access to source code. Still, it is difficult to deny that the extension of the property regime had— bizarrely, at first sight—actually enabled the creation of a continuing open commons. The tempting real-estate analogy would be environmentalists using strong property rights over land to guarantee conservation and open access to a green space, whereas without property rights, the space could be despoiled by all.

So much for copyright. What about patents? U.S. patent law had customar-

 

ily drawn a firm line between patentable invention and unpatentable idea, formula, or algorithm. The mousetrap could be patented, but not the formula used to calculate the speed at which it snaps shut. Ideas, algorithms, and formulae were in the public domain, as were “business methods.” Or so we thought.

The line between idea or algorithm on the one hand and patentable machine on the other looks nice and easy. But put that algorithm into a computer and things begin to look more complex. Say, for example, the algorithm was the process for converting miles into kilometers and vice versa. In the abstract, this is classic public-domain