Category: Innovation

6

The Correct Word is Desource, Not Outsource.

Everyone thinks jobs are being outsourced; they are, in fact, being desourced. When Mitt Romney claims he will create jobs, when Barak Obama claims the same, when Google, Apple, or Amazon assert they build out the economy, they all overstate. Worse, they ignore the reality that both manufacturing and service jobs are dying. Robots, artificial intelligence, and the new information-at-scale industries all but assure that outcome. The ability to build and sell without humans is already here. I am not saying that these shifts are inherently bad. They may even be inevitable. What we do next is the question. To answer that question, we need to understand the ways humans will be eliminated from manufacturing and service jobs. We need to understand what I call desourcing.

Focus on manufacturing is a distraction, a sideshow; so too is faith in service jobs. A recent New York Times article about Apple, noted that manufacturing accounts for only about eight percent of the U.S. labor force. And, The Atlantic’s Making It in America piece shows how manufacturing is being changed by robots and other automation. According to some, the real engine is service labor “and any recovery with real legs, labor experts say, will be powered and sustained by this segment of the economy.” That is where desourcing comes in. Many talk about the non-career path of service sector jobs. A future of jobs that have low pay and little room to rise is scary and a problem. Amazon explains why that world might be heaven.

The world of low wage, high stress service work is being replaced by automation. Amazon gave up its fight against state taxes, because it is moving to a model of local distribution centers so that it can deliver same-day delivery of goods. According to Slate, Amazon will spend more than $1 billion to build centers all over the U.S. and hire thousands of people for those centers. The real story is that like any company Amazon wants to reduce operation costs; it must automate or perish as Technology Review put it. It will do that, in part, by using robots to handle the goods. Self-driving cars and autonomous stocking clerks are the logical steps after ATMs and self-serve kiosks at movie theaters and grocery stores. I am always amazed at the folks who line up at movie theater ticket windows rather than use the kiosks. A friend said to me that we should walk up to the window to keep those jobs. It is a nice idea, but I think untenable. We all want to move faster and pay less. Welcome to desourcing.

Desourcing means reducing or eliminating humans from the production or service equation. Humans are friction points. More and more we can reduce those points of contact. We no longer need to send work to other humans.

There are many economic questions that are beyond what can be addressed in a short piece. But here are some ideas on which to chew. The returns from this approach are tremendous for the companies that desource. For example, by one account, Apple makes $473,000 per employee; yet “About 30,000 of the 43,000 Apple employees in this country work in Apple Stores, as members of the service economy, and many of them earn about $25,000 a year.” So we may satisfy our need for instant gratification as companies reduce their costs, but that money will go to corporate bottom lines. Whether it will really reach the rest of the economy is not so clear precisely because a smart company will invest in desourcing. I suppose at some point companies will have to realize that they need masses who can buy stuff. Yet I think some studies indicate that serving the upper end of the economy works better than serving the masses. In theory, a company may offer goods at lower prices but to do that, it will need lower production costs. And less workers means lower costs.

I am not saying I know what will solve this riddle. I offer desourcing, because I have not seen a satisfying answer to the issue. There may not be one; for we may be stil sorting what to do as the digital age takes full hold. As the computer science folks say in early training, “Hello world.”

2

My Brand Journey, Part I

Right out of law school, brands were on my mind. I began at Quinn, Emanuel and learned trademark law practice there. I picked up on the way companies such as Mattel, the Academy of Motion Picture Arts and Sciences (think Oscar Awards), Lockheed Martin, and others thought about trademarks. They called them brands. My paper with Sandy Rierson, Confronting the Genericism Conundrum started my work on the topic. We looked at the core value of a brand and started to poke at the blended functions of a brand with which trademark law struggled. We argued that information costs have dropped and that courts looked to uses that did not matter as they determined the status of a mark (at 1834). We also showed in relying on dubious evidence and not paying attention to the broader linguistic aspects of trademarks, courts set up incentives for policing that not only made little sense but are wasteful, not to mention fostering unnecessary clashes between expression and trademark interests (1835-1842). At that point we argued that looking at how consumers encounter the mark in a market setting may help parse the issue. As we put it,

Consider that a person with a cold can walk into a colleague’s office, ask for a “kleenex” and be handed a tissue but not a Kleenex®-brand tissue. At that moment the person with the runny nose is likely to accept the tissue offered without complaining or caring about the brand. When that same person is in a supermarket, however, he may certainly care whether he buys Kleenex® versus Puffs® brand facial tissue, due to his experience with the brands’ relative softness or thickness.

After that piece, I read more and thought about whether trademark law and the search costs approach mapped to branding practices. They don’t. More on that in the next part.

The image is of a coaster available here.

0

On Information Justice

Like the other commenters on From Goods to a Good Life, I also enjoyed the book and applaud Professor Sunder’s initiative in engaging more explicitly in the values conversation than has been conventionally done in IP scholarship. I also agree with most of what the other commenters have said.  I want to offer plaudits, a few challenges, and some suggestions about future directions for this conversation.

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2

For whom does IP work?

One of the major questions Professor Sunder’s book asks is whether IP works for the people who make it. This is a question that US law does not grapple directly with, but assumes and then glosses over. It is an important question. As Molly Van Houweling mentions, drawing on Julie Cohen’s fantastic article on IP as corporate property, IP certainly works for some companies some of the time. Insofar as companies are intermediaries (distributors of IP protected goods) and the licensees of the creators of those goods (either through work for hire or assignment), firms can and do make some of their money from IP revenues, which IP is generated by individuals working alone or in groups.

The story of Solomon Linda is an example of what can go wrong from the initial creation to the widespread distribution of creative expression that has commercial value. Firms will say that without intellectual property, they cannot harness or nourish the creativity to reproduce, commercialize and distribute it, that the conditions of their productive and distributive business require exclusive rights in the intangible goods. (I think this in part right, but it is largely overstated in light of the the many other ways in which companies make money, such as first to market, complementary products, contracting for services, reputation. And the extent to which the company depends on IP is industry specific.) Individuals will say that the best environment for their creative work is a situation in which autonomy and collaboration are optimized. Individuals want time and space to do their work, and they need some funding to pursue it, but that funding may come from a day or night job that does or does not directly relate to their creative or innovative activity. Ideally, the way the individuals earn a living derives from the creative or innovative work they do, and if that is the case, they still seek autonomy and collaboration, which are often at odds with corporate structure and IP exclusivity. Sunder’s book points out many of these conflicts between individual welfare and corporate welfare. My puzzle, these days, is why there must be such inconsistency. How (when and why) does the corporate interest so greatly diverge from the individual’s interest and what, if anything, can be done about it to maximize IP’s functionality in our global system of creative and innovative production? Sunder’s book goes a long way to putting these issues front and center.

1

Super-Sizing IP Values

In a 2006 Stanford Law Review article, Madhavi Sunder despaired that “there are no ‘giant-sized’ intellectual property theories capable of accommodating the full range of human values implicit in intellectual production.”  But, she argued, there should be. From Goods to a Good Life is her full response to her own challenge, pushing intellectual property scholars to conceive of IP rights not through the narrow lens of incentives to create and distribute, but as tools to promote human flourishing broadly understood.

I am quite sympathetic to Sunder’s goals here, and we share an affinity for the capabilities approach most prominently associated with Amartya Sen and Martha Nussbaum. Indeed, Brett Frischmann and I have also suggested (only in much broader and tentative terms than Sunder) that IP theory needs to open up to a broader range of goals. Yet in spite of the ambition of Sunder’s project, I was struck by how traditional her project ultimately seemed. For notwithstanding her avowedly liberal goals, Sunder embraces property as much as she rejects it, and many of the tools on which she would rely to promote development depend heavily on the very market mechanisms she criticizes for having led to the exploitation and inequality she wants to address.

To be sure, Sunder has different ideas about the scope of IP entitlements – particularly when those entitlements run up against concerns about access to medicines or other cultural products. But fundamentally what she wants is a principle of equal recognition that operates in practice and not just in theory. She wants poor people’s inventive/creative contributions to be recognized, both in the sense of attribution and in the sense that those contributions deserve the status of property that can be traded to improve material conditions. Hers is a freedom-promoting conception of property that, as Jedediah Purdy has written, traces to the “Enlightenment period of the mid-to-late eighteenth century, when it was exemplified in the thought of the Scottish jurist, moral philosopher, and proto-economist Adam Smith.” This notion that the ability to own property can enable individual creators to make a life for themselves is prominent in certain threads of IP literature. But notably, most proponents of that view (Rob Merges comes to mind most significantly here) favor more IP protection than do the cultural critics of IP on whose work Sunder draws when she argues, persuasively in my view, for greater recognition of the need to engage with, and even to subvert, creative works.

This is not to say that Sunder would come to the same conclusions as these scholars about how a freedom-promoting conception of IP should play out in practice – clearly Sunder would balance the competing interests of creators and users differently, at least in some cases – only that I am struck by how resonant her approach is with those understandings of property, and indeed by how much actualizing her views would depend on property as an institution. Thus, I had the feeling reading the book that Sunder is deeply conflicted about the role of the market as the mechanism for promoting human flourishing.

Sunder, for example, suggests many times throughout the book that people in the developing world might rely on geographical indications (or some variant thereof) as means of gaining recognition for their creative accomplishments and as a lever for economic development. But GI’s, as Sunder notes, are brands – they work only to the extent they are valued by consumers because they denote (or reify) some characteristic consumers care about.  And getting consumers to notice and care about a new GI won’t be easy, because they are swimming in GI’s already. There are well over 100 American Viticultural Areas in California alone; the names of thousands of counties in the US are protected appellations of origin; hundreds of wine-related indications are protected just in France; and thousands more GI’s (counting the several varieties) are protected in Europe.

To succeed with a GI in this marketplace, you need a megaphone. That will be even truer for indications that refer to places in the developing world, since as Sunder ably demonstrates, we in the developed world have a skewed sense of the sources of creativity. And of course those who will need the biggest megaphones have the least access to the marketing machinery they will need to compete.

Lea Shaver wrote in her review that “MAD MEN is the perfect antonym for the better world that Professor Sunder’s work envisions. Marketing executives, practically dripping in 1960’s-era white male privilege, strive to endow branded commodities with hegemonic symbolism. The protagonists of this drama view their fellow Americans not as citizens to be democratically engaged or individuals creating their own lives, but as minds to be manipulated. To achieve that goal, they fund the creation of one-way cultural media, which offers its audience no opportunity to challenge the message that the most important way of making meaning in the world is through passive consumption.” The irony of Sunder’s book is that, having shown so well the problems with one-way cultural media, some (many?) of her solutions would rely on the very same mechanisms of one-way cultural media.

1

From Madhavi to Mad Men

As Zahr Said points out, Madhavi Sunder is by no means the first to critique intellectual property from the perspectives of distributive justice or liberty. Indeed, the author of From Goods to a Good Life: Intellectual Property and Global Justice not only gives due credit to the IP scholars who have written in this vein before her, but provides a compelling intellectual history of the field. What is striking about this particular book project is not so much its break with past approaches, but its breathtaking ambition in positioning the future of the field.

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0

What Is IP Good For? Madhavi Sunder Has an Answer: The Good Life

Why bother to have intellectual property rights? That question is the question for IP. Madhavi Sunder has answers. Some excellent work on the subject has looked at whether economics has new answers about IP rights and their structure. Others have taken a hard look at whether any economic argument works. Like books by James Boyle, Brett Frischmann, and Julie Cohen, Sunder’s book runs right at intellectual property law and tackles the hard question. Sunder proposes that we have left off asking what is the good; not just the good produced but the good for all of us. In the tradition of critique she asks about power dynamics and whether free culture is also fair culture. She forces us to consider the realities of exchange culture and rules that bind our ability to engage and thus limit our freedom to author ourselves. In my work on trademarks, brands, and culture, I looked at specific ways we have moved from one-way mass market systems to two-way interactive ones as I questioned whether trademark rules make sense and improve society. I love this book because Sunder takes this point and drills into local, national, and global levels. She challenges current narratives about how and why we create with concrete examples of overflowing creation, unfair results, and troubling societal outcomes all of which abound despite claims about incentives and social welfare creation in IP law. Still, she believes the law has the foundations for “plural values at stake in cultural production.” Her prescription is that we should be “ripping, mixing, and burning” law to get to the world where we have not only goods, but a good life. I recommend the book and look forward to our discussion here at Concurring Opinions.

7

Symposium on Madhavi Sunder’s From Goods to a Good Life, September 11-13

This week Concurring Opinions is hosting a symposium on Madhavi Sunder’s From Goods to a Good Life (Amazon) published by Yale Press which offers a preview. Madhavi’s work has pushed how many colleagues and I think about intellectual property. I am honored to organize this discussion.

I have more to say about the book, but to whet your appetites, I offer this quote:

The full cultural and economic consequences of intellectual property policies are hidden. We focus instead on the fruits of innovation—more iPods, more bestsellers, more blockbuster drugs—without concern for what is being produced, by whom, and for whose benefit. But make no mistake: intellectual property laws have profound effects on human capabilities…

The symposium will include contributions from Mike Carroll, Laura DeNardis, Brett Frischmann, Mike Madison, Mark McKenna, Frank Pasquale, Zahr Said, Lea Bishop Shaver, Jessica Silbey, and Molly Van Houweling.

0

SOPA, PIPA and some truth about activism

As folks start to claim they saved the Internet and rally for alleged ways to keep the Internet open for all, I want to call out something Rep. Issa said at Stanford in April. Step one, and to me the but-for moment, in stopping SOPA and PIPA was the security and CS community speaking (which was rare) about just how dangerous (“A potpourri of dumb things” – Issa at around 8:15) the bills were. Without that the activism probably could never have gotten in place. Furthermore, as I noted elsewhere, science can shift. Science is, by definition, amoral. If you build it, it will work. So expect the copyright industry to demand new things. Expect them to hire and fund studies about how to get what they want without going using “A potpourri of dumb things.” And note that Google’s recent shift in approach regarding links and alleged pirate sites shows that things change.

This is not an apolitical moment. It is deeply political, but pretends that it is not about a power shift. When Internet and tech companies swear they are there for you, be skeptical. In some senses they are. Many folks I know at Google really are interested in serving users. Many are also scientists who will pursue, as they should, the truth of what is possible. The current bus-stop tour by Reddit’s co-founder, Alexis Ohanian is political. Per the Washington Post, for him, “[T]he key issue is getting Internet openness on the minds and into the talking points of politicians in this election.”

What does openness mean? What are the politics of openness? Why do Facebook, Google, Reddit want openness? South by Southwest looks like it may have panel on disrupting DC. The description reads like an evangelic rally (a good tip that thought is replaced by faith). But to its big credit (except for saying the questions will be answered), the panel looks at some decent issues:

1. The Industrial Revolution brought about a political realignment that created the existing party system. Can the Internet do the same?
2. Beyond “openness,” what are the essential characteristics that define the Internet’s political identity? Market oriented or socially conscious? Libertarian or progressive? (Or all of the above?)
3. Politically, does the Internet most resemble an interest group (like big business or labor unions), a movement, or something we haven’t seen before?
4. Is Internet culture weakening partisanship — or making it worse?
5. Technology drives growth, but some say it also kills jobs. How do we make sure that the benefits of the Internet are widespread? Is there a consistent political viewpoint here among Internet activists, or does this break down along typical political lines?

I doubt one panel can tackle all these questions. Much will depend on the panelists and whether the panel is really open in that it has voices other than those who all agree. Nonetheless, one thing that is missing is a deeper look at the power structures and history that inform the issue. For example, the idea of realigning parties still relies on parties. And, there is an essentialism to Internet identity that is ironic at best and willfully blind and lacking irony at worst.

Have I abandoned my Google brothers and sisters? Oh perhaps, but I don’t think so. These questions were ones I raised while there. Some disliked them. Some took them seriously. The people I respected and loved the most pushed me to dig into these points. Like society, Google has many people with many views and agendas. That’s the point. With all companies and all people asserting truth, administer several grains of salt, reflect, (maybe add some lime and tequila first). For those wishing a good book on the problems with saying we know where we are going, check Professor Wendy Brown’s work, especially Politics Out of History.

1

Adam Thierer on Classical Liberalism on the Net

As the political season is in full swing and folks claim to understand SOPA, PIPA, etc., I thought I should point people to Adam Theirer’s post Mueller’s Networks and States = Classical Liberalism for the Information Age. I knew Adam a little before my stint at Google. I came to know him more while there. I do not agree with everything Adam says. Rather, he reminds me of folks I knew in law school. I disagreed with many people there, but respected the way they argued. Their points made me rethink mine and perhaps improve them. The distinction between cyber-libertarianism and Internet exceptionalism that Berin Szoka and Adam try to make is important. I am not sure it succeeds but as Adam says

They are not identical. Rather, as Berin and I argued, they are close cousins. Properly defined, cyber-libertarianism is essentially the application of traditional libertarian thinking — which is more properly defined as classically “liberal” — to Internet policy issues. Berin and I define “cyber-libertarianism” as “the belief that individuals — acting in whatever capacity they choose (as citizens, consumers, companies, or collectives) — should be at liberty to pursue their own tastes and interests online.” Internet exceptionalism, by contrast, is the belief that the Internet has changed culture and history profoundly and is deserving of special care before governments intervene. But that does not necessarily tell us what sort of philosophy or core tenants ultimately animate exceptionalism going forward. (emphasis added by me)

This last point is the reason I call out the piece. So far I have not seen anything that addresses the point in a satisfactory way. Adam and Berin face this gap and try to fill it. Agree. Disagree. That is your choice. But read the whole thing and see where you end up. One final note, I think classical liberalism as Adam defines it may be more empty than it seems. For now I cannot explain why. For that I apologize to those of that camp, but I am working on that. Oh which reminds me, Julie Cohen’s book, Configuring the Networked Self: Law, Code, and the Play of Everyday Practice, takes on this issue.