Category: Innovation


Introducing the Talent Wants To Be Free Symposium

Talent Wants to be FreeThis week Concurring Opinions is hosting a symposium on Professor Orly Lobel’s book, Talent Wants to be Free: Why We Should Learn to Love Leaks, Raids, and Free Riding. In simplest terms, Professor Lobel takes on some thorny problems in innovation policy debates including whether to lock down talent and ideas or to embrace the movement of people and knowledge. Though these tensions seem easy to understand, the natural desire to keep what one has means arguments to tie up whatever seems to be giving one an advantage creates larger debates about optimal control and outcomes. Professor Lobel’s work tangles with these core ideas and more.

Professor Lobel is leading thinker on the intersection of employment law, intellectual property law, regulatory and administrative law, torts, behavioral economics, health policy, consumer law and trade secrets as they relate to innovation. She is the Don Weckstein Professor of Labor and Employment Law at University of San Diego School of Law and holds an SJD and LLM fro Harvard as well as an LLB from Tel Aviv University. She is a member of the American Law Institute and the recipient of research grants from the Robert Wood Johnson Foundation, the American Bar Association litigation Fund, the Searle-Kauffman Fellowship, the Southern California Innovation Project, and Netspar, University of Tilburg. We are honored to have her join us for the symposium as our great list of guest authors engage with her book.

Our line-up of authors include Matt Bodie, Anupam Chander, Danielle Citron, Catherine Fisk, Vic Fleischer, Brett Frischmann, Shubha Ghosh, Ron Gilson, Peter Lee, and Frank Pasquale. We look forward to everyone’s contributions.


Fight the Power?

Orly’s book is terrific. Let’s just get that straight. The book is filled with the kind of creative energy that Orly’s reform proposals seek to release. But the emerging (or worse, entrenched) fud in me had to react to the celebration of freedom that the book exhorts. Throughout the past several centuries of human history, perhaps through all of human history, appeals to freedom have interrupted periods of dominance, control, and centralization.  “Talent Wants to be Free” is another example of the pendulum swinging away from centralized control. Whether that is a rightward or leftward swing, I will leave for others to sort out.  While Orly does not extol “stealing this book,” the arguments against over regulation by government (in the form of strong intellectual property laws) and against overly bureaucraticized mega-corporations have a Hoffmanesque quality. Of course, nothing wrong with that, but the skeptic in me wonders if unalloyed freedom is unquestionably a good thing.

Orly appeals to competition as an engine of innovation, and she points to many examples that limit the liberating force of competition. The proposition that competition fuels innovation is hard for anyone, in my mind, to contest.  Harder still is understanding what competition is.  Spencerian  renditions of Darwin as applied to social dynamics has been a recipe for disaster and elitism, leading to the very concentration that Orly decries. If competition is meant to guide innovation, it cannot be hard core laissez-faire. Is competition then the nicely diagrammed exposition of Econ 101, channeling Alfred Marshall into prices being driven to MC and minimum AC, profits dissipated, surpluses maximized, or perhaps the more elaborate auctioneering process Pareto optimally? Although an elegant formulation, the technical rendition of the dirty world of markets ignores the details of transactions and transacting, the role of legal rules and of technicians like corporate attorneys, accountants, and bankers. Perhaps  Coase has the right take on competition as a form of endless bargaining and negotiation as social costs and benefits are readily transformed, transaction costs willing, into private ones. I have no doubt that competition drives innovation, but the hard question is what kind of competition.  It is easy, however, to translate competition into unfettered freedom. That translation in my mind does not wholly work.

What is lost in translation by rendering competition as “freedom” is recognizing the need for organization to help free individuals reach their potential. Organization writ large here includes the family, the school, the business entity, and, yes, the state. Freedom without organization is anarchy and anarchy leads to either dissipation of energy into entropy (and yes that is a nod to the ideas of Thomas Pynchon, especially Gravity’s Rainbow in which flights of freedom give way Icarus-like to crashing and destruction) or to dominance and concentration by the powerful (another nod).  Neither is conducive to innovation.

Although Orly makes somes reference to Coase, I felt that there was not appreciation of his “A Theory of the Firm,” which  demonstrated that organization within an entity might be preferable to the freedom of exchange that is a hallmark of competition.  But Coase’s notion of the firm was not supplanting competition, Instead, by internalizing exchange, competition of sorts is brought into the organization as individuals vie for position within the hierarchy.  In this way, Coase is not justifying the Soviet state or centralized planning, both of which are ineffective and in opposition to innovation. Instead, consistent with Orly’s vision of freedom, the Coasean firm internalizes competition but also must confront competition that occurs through exit or dissent in order to avoid the exact forms of concentration that Orly correctly finds as antithetical to innovation.

My point here is that freedom is worthless without some form of organization that provides soil for freedom’s fruit. One example of this is the concern over D2P, a new acronym  a colleague recently assaulted on my overly taxed brain.  It stands for “Distribution to Product” and refers to the difficulty of going from labs to markets. Freedom within the university certainly leads to the creation of all sorts of inventions and new works.  The problem is the lack of institutions for facilitating the movement from the creative stage to the commercialization stage.  That movement is not dependent solely on the freedom of inventor, financier, marketer, and corporate attorney.  Instead such movement is impeded by too much freedom and not enough organization. Perhaps I am just raising dull questions about practical details.  But my point is that extolling freedom without organization may be as big a problem as extolling centralized control over freedom,

I will end with an advertisement for myself.  I have been working on a piece on nonprice competition and intellectual property, and I plan to write it after I finish my articles on the Federal Circuit’s contract law jurisprudence and Holmes’ intellectual property jurisprudence at the Mass and US Supreme Courts. The nonprice competition piece draws on Hirshcman’s theory of nonprice competition from his “Exit, Voice, and Loyalty.” Before I expand that piece into 50+ pages, let me try to distill that article-to-be into a few sentences.

Exit and voice serve as ways to promote competition through signals other than price.  Orly’s book provides a vivid and forceful exposition of exit and voice as examples of freedom.  But loyalty is necessary since organizations often act as the incubator for freedom. The problem is that loyalty can quash freedom through acts of provincialism, xenophobia, and blind faith. The difficult balance requires structuring loyalty so as not to supplant exit and voice but to channel those two freedoms into creating dynamic, evolving organizations that promote innovation.  In short, organization without freedom is tyranny, but freedom, without organization, is anarchy, with all its attendant costs.


Heads Up 3D Printing and more: The Georgetown Law Journal Volume 102 Symposium: “Law in an Age of Disruptive Technology”


As you know Gerard and I have been working up our paper Patents, Meet Napster: 3D Printing and the Digitization of Things . It will be part of The Georgetown Law Journal Volume 102 Symposium: “Law in an Age of Disruptive Technology” which will take place on Friday November 8, 2013. There will be panels about driverless cars and mass surveillance as well. We hope to see many of you there. (RSVP at this link).

It is a great honor to be part of this lineup:

Keynote Address by Professor Neal Katyal

3-D Printing
Chaired by Professors Deven Desai and Gerard Magliocca

Driverless Cars & Tort Liability
Chaired by Professor Bryant Walker Smith

Mass Surveillance Technology
Chaired by Professor Christopher Slobogin


Upcoming Online Symposium on Professor Anupam Chander’s The Electronic Silk Road

Silk Road coverDanielle and I are happy to announce that next week, Concurring Opinions will host an online symposium on Professor Anupam Chander’s The Electronic Silk Road: How the Web Binds the World Together in Commerce. Professor Chander is a professor at U.C. Davis’s King Hall School of Law. Senators, academics, trade representatives, and pundits laud the book for its clarity and the argument Professor Chander makes. He examines how the law can facilitate commerce by reducing trade barriers but argues that consumer interests need not be sacrificed:

On the ancient Silk Road, treasure-laden caravans made their arduous way through deserts and mountain passes, establishing trade between Asia and the civilizations of Europe and the Mediterranean. Today’s electronic Silk Roads ferry information across continents, enabling individuals and corporations anywhere to provide or receive services without obtaining a visa. But the legal infrastructure for such trade is yet rudimentary and uncertain. If an event in cyberspace occurs at once everywhere and nowhere, what law applies? How can consumers be protected when engaging with companies across the world?

But will the book hold up under our panel’s scrutiny? I think so but only after some probing and dialogue.

Our Panelists include Professor Chander as well as:

Paul Berman

Miriam Cherry

Graeme Dinwoodie

Nicklas Lundblad

Frank Pasquale

Pierluigi Perri

Adam Thierer

Haochen Sun

Fred Tung

And of course

Danielle Citron and I will be there too.


What Are the Limits to What Hackers Produce?

I’m writing this from an airplane somewhere over the US-Canadian border. I forgot my copy of Coding Freedom at home, and was cursing my ineptitude. But then it occurred to me that, given the subject, I could probably find a copy online. Sure enough, I downloaded a pdf via the airport wifi. (For free! – those Canadians…).

This, in the most mundane of ways, is a simple reenactment of what Gabriella Coleman writes of so compellingly in her new book. Gabriella, inspired no doubt in part by her years of exposure to hacking culture, struck a deal with her publishers. The resulting CC license gives all of us who might want to read the book more freedom to do what we want with it – read it on any device, search it, and even pull it up in an airport so we can file a nearly-too-late contribution to a terrific online discussion. Gabriella didn’t know I’d forget my book at home when she decided to negotiate the license. But she did have the sense – I assume – that she needed something more than copyright law to help her achieve what she wanted from her book. Which was in part to give to the rest of us more freedom than standard copyright law would allow.

But how far does that freedom go? This is surely one of the most important and interesting questions about this new form of making software, and the new legal forms that attend it. So that’s what I want to focus on here. One of the book’s great strengths is the spectacularly detailed and clear-eyed account that it provides of hacker culture, or at least a certain hacker culture. As it points out, this is a culture that is built upon a deep commitment to the pleasures of technology (like Ed Felten, I loved the bit on hacker humor), a ferocious conception of self-help and meritocratic ordering, and also to an overt aversion to things “political.”

As a few others have in the course of this discussion, I wonder too about the limits of a form of practical revolution that starts here. How far can this new mode of production take us, if it is characterized by technoelitism, an aversion to politics, and by a subject position that is decidedly fairly privileged and high-skilled? After all, you can’t be part of this crowd and lack access to a computer and internet connection, or be bereft of free time.


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What Drives Innovation? The State

Magazines like The Economist mock industrial policy while piling praise on the private sector. But the more one knows about the intertwining of state and market in health care, defense, telecommunications, energy, and banking, the less realistic any strict divide between “public” and “private” appears. Moreover, even the internet sector, that last bastion of venture capital and risk-taking, is more a creature of state intervention than market forces. As Mariana Mazzucato argues:

Whether an innovation will be a success is uncertain, and it can take longer than traditional banks or venture capitalists are willing to wait. In countries such as the United States, China, Singapore, and Denmark, the state has provided the kind of patient and long-term finance new technologies need to get off the ground.

Apple is a perfect example. In its early stages, the company received government cash support via a $500,000 small-business investment company grant. And every technology that makes the iPhone a smartphone owes its vision and funding to the state: the Internet, GPS, touch-screen displays, and even the voice-activated smartphone assistant Siri all received state cash. The U.S. Defense Advanced Research Projects Agency bankrolled the Internet, and the CIA and the military funded GPS. So, although the United States is sold to us as the model example of progress through private enterprise, innovation there has benefited from a very interventionist state.

VC’s and other financiers exaggerated their role in promoting innovation in order to get capital gains tax breaks. And while they retreat ever further from taking risks on game-changing advances in productivity, the tax breaks endure, starving the state of the revenues it needs to continue subsidizing innovation. The California Ideology gradually undoes its own material foundations, but its adherents are unfazed. They are content to reap the benefits of past decades of government investment. From Silicon Valley to Wall Street, seed corn is the tax-cutters’ favorite meal.

X-Posted: Madisonian.

The “Markets” for Top “Talent”

IncomeGrowthThe stories we tell ourselves about inequality matter. As incomes of the top 0.1% and top 0.01% grow ever more stratospheric, “low wage workers are paid less now than they were from the 1950s-1970s.” Is this just, as Steve Schwartzman suggests, the natural consequence of globalization? Tim Harford suggested as much in the FT last week:

The uncomfortable truth is that market forces – that is, the result of freely agreed contracts – are probably behind much of the rise in inequality. Globalisation and technological change favour the highly skilled. . . . [A]t the very top, winner-take-all markets are emerging, where the best or luckiest entrepreneurs, fund managers, authors or athletes hoover up most of the gains.

The most important word in that paragraph is “luckiest.” What deserves comment is Harford’s argument that “freely agreed contracts” are deciding who is “hoovering up” the most. He elaborates a bit later:
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Tumblr, Porn, and Internet Intermediaries

In the hubbub surrounding this week’s acquisition of the blogging platform Tumblr by born-again internet hub Yahoo!, I thought one of the most interesting observations concerned the regulation of pornography. It led, by a winding path, to a topic near and dear to the Concurring Opinions gang: Section 230 of the Communications Decency Act, which generally immunizes online intermediaries from liability for the contents of user-generated content. (Just a few examples of many ConOp discussions of Section 230: this old post by Dan Solove and a January 2013 series of posts by Danielle Citron on Section 230 and revenge porn here, here, and here.)

Apparently Tumblr has a very large amount of NSFW material compared to other sites with user-generated content. By one estimate, over 11% of the site’s 200,000 most popular blogs are “adult.” By my math that’s well over 20,000 of the site’s power users.

Predictably, much of the ensuing discussion focused on the implications of all that smut for business and branding. But Peter Kafka explains on All Things D that the structure of Tumblr prevents advertisements for family-friendly brands from showing up next to pornographic content. His reassuring tone almost let you hear the “whew” from Yahoo! investors (as if harm to brands is the only relevant consideration about porn — which, for many tech journalists and entrepreneurs, it is).

There is another potential porn problem besides bad PR, and it is legal. Lux Alptraum, writing in Fast Company, addressed it.  (The author is, according to her bio, “a writer, sex educator, and CEO of Fleshbot, the web’s foremost blog about sexuality and adult entertainment.”) She somewhat conflates two different issues — understandably, since they are related — but that’s part of what I think is interesting. A lot of that user-posted porn is violating copyright law, or regulations meant to protect minors from exploitation, or both. To what extent might Tumblr be on the hook for those violations?

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Cardozo Law Review, China Re-Rising

Symposium on China’s Transition from Manufacturing to Innovation Economy Hosted by Cardozo Law Review’s Online Journal

NEW YORK, NY, April 29, 2013 — All eyes are on China in the twenty-first century, as it emerges as one of the fastest growing economies in the world. At the same time, losses in various industries are attributed to piracy—a substantial amount of which is alleged to occur within China’s borders—and the Chinese government is routinely criticized for its weak enforcement measures against counterfeiting activities and intellectual property infringement on its soil.Cardozo Law Review de•novo’s online symposium, “China Re-Rising?: Innovation and Collaboration for a Successful Twenty-First Century” focuses  on China’s overall transition from a manufacturing to an innovation economy and how this transition affects IP policies and industries around the world.

The online symposium – located at – features articles from practitioners, industry corporate counsel, professors, and Chinese IP law specialists. Esteemed participants include Chen Wang, the Deputy Chief IP Counsel of E.I. du Pont de Nemours Company; Jonathan Sallet, a Partner at O’Melveny & Myers LLP; and Professor Peter Yu, the Kern Family Chair in Intellectual Property Law and Director of the Intellectual Property Law Center at Drake University Law School.

About the Articles:

Professor Yu discusses the slowly-begun change in discourse around China’s intellectual property system, particularly in the field of patents. He presents the reader with five key questions on the state of Chinese intellectual property law and policy. His answers suggest that the future of China’s intellectual property system is dualistic and dynamic—while massive piracy and counterfeiting does continue, this ongoing issue is balanced by China’s rise as a patent power.

Professors Murphy and Orcutt discuss China’s patent subsidy program—an aspect of China’s national innovation strategy that aims to increase domestic patents and innovation through government subsidies to pay for domestic inventors’ legal costs associated with obtaining patents. Noting that the program has been criticized for failing to fund truly valuable or innovative patents, the Authors propose a unique two-stage, three-dimensional relative value technique for the Chinese government to implement in evaluating whether to fund a given patent application through the subsidy program.

Ms. Wang and Mr. Sallet in turn criticize the Chinese government’s metric-based approach to innovation. They posit that China’s emphasis on numerical goals to domestic patenting actually hampers Chinese innovation by directing resources away from research and the development of truly valuable inventions. The Authors further discuss how China’s metric-based approach frustrates the ability of multi-national corporations to collaborate effectively with Chinese companies. They conclude by identifying steps the Chinese government can take to increase local innovation through effective international collaboration.

Professor Shao calls for a holistic perspective of the Chinese innovation economy, law, and policies. His Article offers a historical and cultural perspective that aims to make a holistic approach possible for Western scholars and practitioners, who lack the knowledge of Chinese history and culture necessary to understand the context of China’s current policies. He concludes by proposing that innovation still can, and should, be the bridge to China’s successful economic transition.

Professors Murphree and Breznitz discuss China’s innovation strategy through the lens of its failed attempts to develop globally successful technology standards. The Authors attribute these failures to fragmented production and structured uncertainty implicit in the Chinese domestic market. Despite these failures, the Authors acknowledge that Chinese companies’ participation in even failed attempts does produce tangible benefits, like receiving lower royalty rates on goods they produced.

View the online symposium at


STEM education and some more on 3D printing as general purpose tech

3D printing and its related technology is general purpose technology that can train kids for the future. I saw an example of that yesterday when I was able to visit La Jolla Country Day School where sixth to eighth grade kids on spring break were learning basic 3D Modeling and Design. Last week they worked on How to Make Musical Electronics. In the 3D modeling program, Ann Worth, an MIT School of Architecture graduate, guided the youngsters as they manipulated files of their heads so that at the end of the program they could print them. I also watched a video of two girls who had been shown how to make an amplifier and oscillator for their iPhones. Brendan Bernhardt Gaffney, UCSD was their instructor. The kids talked about trial and error, vectors and faces, and circuit boards with energy and joy. How often does that happen? If Katie Rast and her co-visionaries at FabLab San Diego have their way, much more often.

Despite some nerds are cool ideas, we still hear that kids are turned off by math and science and that there is a lack of good Science Technology Engineering Math (STEM) education. New programs may change all that. By taking an old idea like shop and updating it, a FabLab (short for Fabrication Lab) offers the chance to make learning about programing, engineering, geometry, and the jot of creation. Kids are willing to engage with formulas; start, fail, and restart projects; and work rather hard at their projects, because there is fun and an outcome for them. The spring break program I visited is called Science Technology Engineering Arts and Math, or STEAM. The University of California, San Diego and FabLab SD worked together to offer the classes (which to me is a tech transfer moment that is quite important).

In the 3D modeling program, the kids started with a series of photos, which were uploaded to 123D (a suite of 3D modeling apps by Autodesk). That service knits the images together into a file that the kids then download. In many cases there are holes in the images. As they made models of their heads, they laughed at the holes in their heads. They then used a program called Blender to learn about filling the gaps. That meant some kids were telling me about vectors, others about textures, and all showed off as they pulled, stretched, and edited files to create the proper rendering of their heads. After that, they grabbed files for the bodies. A range of animal bodies will be virtually sliced up to make the new creature upon which the heads will attach. When asked what they might do next, these folks talked about how metals, glass, and other materials would be awesome so they could make really functional items. Some talked about being able to have a home printer that could make solar cells to power other printers. When told that these ideas were already being pursued, eyes popped out of their heads, and then grins covered their faces at thoughts of what’s next (and I think a little pride at predicting where the technology could go).

The skills learned in these programs will persist even as the machines and software are superseded. Who knows? If I had access to this sort of tech training combined with math and science education, I might have stuck with that path. Even if I didn’t, I’d have a greater ability to play with and understand the technology that surrounds us. In short, congratulations to La Jolla Country Day School, UCSD, FabLab SD, Ann Worth, Brendan Bernhardt Gaffney, and Katie Rast for pursuing ways to make STEM fun and for kids. The ideas here remind me of Julie Cohen’s work about play and its importance in her book, Configuring the Networked Self: Law, Code, and the Play of Everyday Practice. As Rast said on a panel at SxSW, computer labs were often seen as saviors for education especially in low income areas, but they often gathered dust. The key is to have maker spaces that work for the group’s context. A lab need not have the latest technology. If the technology is connected to people in meaningful ways, then the magic can happen. I agree. The magic of playing with technology, understanding what you can do with it, and seeing new possibilities will fire the desire to learn and create. As Neil Gershenfeld (a leader in the Maker and Fab movement) put it, this is a liberal, as in liberating, art. But don’t take my word for it. As one kid told me at lunch, adults’ brains are not as good at learning as kids’ brains, and kids like showing what they can do. Now that is education.