CopyBot

Great article by Jennifer Granick, on the issues facing Linden labs, the creators of Second life, due to the bursting on the scene of CopyBot. For those not familiar with the havoc a new program called CopyBot, is causing to the economy of second life, below is the summary of the issue from the article:

Businesses in Second Life are in an uproar over a rogue software program that duplicates “in world” items. They should be. But the havoc sewn by Copybot promises to transform the virtual word into a bold experiment in protecting creative work without the blunt instrument of copyright law.

Second Life, operated by Linden Labs, has developed differently from other virtual worlds because it allows custom content and encourages in-world enterprise. It’s a hospitable place for creators to sell virtual goods like clothing, furniture and hairstyles.

As in any economy, the value of those goods depends on their scarcity: people will pay more for a fantastic hairdo that no one else has. If Copybot can indiscriminately duplicate these items, no one has to pay the creator for them. Copying is a value killer.

As a result, Second Life merchants are understandably up in arms over the software, reportedly closing their stores until the problem is resolved.

In the short term, Linden lab is looking to allow copyright holders to sue folks using CopyBot for infringement in courts. This is unlikely to solve the problem as most people don’t have the time or the money to pursue such a case. The other longer term approach Linden Labs is looking at is building a system of norms, kinda like a reputation system, I guess, to incentivize copyright compliance without getting legal about it.

The idea that innovation can flourish in the absence of copyright enforcement is not as heretical as it might seem.

Take the fashion industry. As law professors Chris Sprigman and Kal Raustiala write in their paper on the subject, neither copyright nor patent law prohibit copying fashion designs. There is some protection for the brand associated with the apparel, but no law prohibits a knock-off Chanel suit, peasant skirt or narrow lapel. And yet fashion is highly innovative, with new styles several times a year, despite low IP protection.

Similarly, professors Emmanuelle Fauchart and Eric von Hippel write that haute French cuisine (.pdf) is another area with low IP protection, yet high levels of innovation and creativity. No law prevents copying recipes. Instead, French chefs have developed social norms, much like those Linden Labs seeks to empower, against exact copying, dissemination of tricks of the trade and adopting significant innovations without crediting the chef responsible.

Failure to follow these norms results in reputation harm, including ostracism.

Such a norms-based (rather than law-based) system might work in Second Life. Norms-based systems are context-sensitive and highly responsive to the concerns of the relevant community. They are also cheaper and quicker than litigation. But norms-based systems can only work if the people in the community value the rewards the community can bestow or withhold.

The issue is how can Linden labs expose enough information on individuals without compromising their privacy, such that the community is able to make a judgement about the individual’s compliance of established norms. This will require Linden labs to strike an interesting balance between privacy and transparency.

Another issue is the one pointed out in the article. How will Linden labs make sure that the norms in the community discourage copyright violations? In some real-world communities like some places in China and India etc., it is acceptable and even considered wise, to buy a fake Gucci purse instead of the real thing despite a difference in quality. In the virtual world, the quality of the copied products would be identical to the original products and so the downside of buying copied products will be much less. Would such communities develop in the virtual world of second life?

How would CopyBot effect the pricing power of the creator of the original goods? What is to prevent other vendors from ripping off the original goods and selling them at a lower price? This kind of arrangement will also provide a “plausible deniability” to end users and make the norm-based enforcement almost impossible.

I have no idea how these things will evolve. One thing is for sure…This is going to be interesting to watch.

Some other takes on this issue:

CopyBot, Community and Controversy

Second Guessing Property Value in Second Life

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