Economics, Politics

A proposal to replace software copyright

Two of the most commonly stated purposes of commercial copyright are:
  1. Being beneficial to society as a whole by providing an incentive for the production of copyrighted goods, and
  2. Giving creators of copyrighted goods fair compensation for their work
It has been questioned if copyright law really satisfies these two purposes, and if society is perhaps better off without copyright, or with a significantly shortened term of duration. In the case of computer software, the case against copyright is especially strong, since a huge amount of software is already produced without direct compensation to the authors, so called Free and Open Source Software (FOSS).

In this post I’ll make a proposal which attempts to capture the best aspects of FOSS, increase competition in the software industry, and still provide for those businesses that feel they need software copyright in order to make a profit:

Traditional copyright on software is abolished, but the author of software is granted an exclusive right to copy and distribute it for three years, provided they make its source code available to the public.

Under this system, an author who sells software to the mass market would be strongly encouraged to release their source code, or they would have no protection against copying and unauthorised use.
The authors would have three years to recoup their R&D efforts, but once the three years were up, anyone could modify their software, add their own features and start competing in the same market segment.
This would lower the barrier of entry to the market, and give software companies a strong incentive to continue to innovate once they’ve reached a dominant position.

On the other hand, authors who don’t sell their software to the mass market, would not be forced to reveal their source code, since they could rely on contracts and non-disclosure agreements instead of copyright to prevent unauthorised copying and use. The system would be self-regulating in the sense that the authors would themselves decide if the legal protection was important enough for them to release their source code.

The software industry as a whole would benefit from being able to take advantage of the work of competitors (positive externalities), while retaining the financial incentive to produce and sell software.

But there would also be advantages that are due to the peculiarities of the software industry. Proprietary software often creates lock-in effects, that is, prevents its users to switch to competing software and retain interoperatbility with their other software and computer systems. The interoperability problems would be alleviated if competitors could base their own software on the three-year-old source code of the market leaders.

Perhaps the most important feature of the proposal is its simplicity. There would be no need to register software or its source code, no need to use force against software authors, and no need to go to court to mandate the release of source code. The only burden placed on the courts would be to decide if the source code had been properly released to the public before ruling in favour of an author claiming infringement.

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