Selling Wine Without Bottles
The Economy of Mind on the Global Net
by John Perry Barlow



If nature has made any one thing less susceptible than all others of
exclusive property, it is the action of the thinking power called an idea,
which an individual may exclusively possess as long as he keeps it to
himself; but the moment it is divulged, it forces itself into the
possession of everyone, and the receiver cannot dispossess himself of it.
Its peculiar character, too, is that no one possesses the less, because
every other possesses the whole of it. He who receives an idea from me,
receives instruction himself without lessening mine; as he who lights his
taper at mine, receives light without darkening me. That ideas should
freely spread from one to another over the globe, for the moral and mutual
instruction of man, and improvement of his condition, seems to have been
peculiarly and benevolently designed by nature, when she made them, like
fire, expansible over all space, without lessening their density at any
point, and like the air in which we breathe, move, and have our physical
being, incapable of confinement or exclusive appropriation. Inventions then
cannot, in nature, be a subject of property.

--Thomas Jefferson


Throughout the time I've been groping around Cyberspace, there has remained
unsolved an immense conundrum which seems to be at the root of nearly every
legal, ethical, governmental, and social vexation to be found in the
Virtual World. I refer to the problem of digitized property. 

The riddle is this: if our property can be infinitely reproduced and
instantaneously distributed all over the planet without cost, without our
knowledge, without its even leaving our possession, how can we protect it?
How are we going to get paid for the work we do with our minds? And, if we
can't get paid, what will assure the continued creation and distribution of
such work?

Since we don't have a solution to what is a profoundly new kind of
challenge, and are apparently unable to delay the galloping digitization of
everything not obstinately physical, we are sailing into the future on a
sinking ship. 

This vessel, the accumulated canon of copyright and patent law, was
developed to convey forms and methods of expression entirely different from
the vaporous cargo it is now being asked to carry. It is leaking as much
from within as without. 

Legal efforts to keep the old boat floating are taking three forms: a
frenzy of deck chair rearrangement, stern warnings to the passengers that
if she goes down, they will face harsh criminal penalties, and serene,
glassy-eyed denial.

Intellectual property law cannot be patched, retrofitted, or expanded to
contain the gasses of digitized expression any more than real estate law
might be revised to cover the allocation of broadcasting spectrum. (Which,
in fact, rather resembles what is being attempted here.) We will need to
develop an entirely new set of methods as befits this entirely new set of
circumstances. 

Most of the people who actually create soft property--the programmers,
hackers, and Net surfers--already know this. Unfortunately, neither the
companies they work for nor the lawyers these companies hire have enough
direct experience with immaterial goods to understand why they are so
problematic. They are proceeding as though the old laws can somehow be made
to work, either by grotesque expansion or by force. They are wrong.

The source of this conundrum is as simple as its solution is complex.
Digital technology is detaching information from the physical plane, where
property law of all sorts has always found definition. 

Throughout the history of copyrights and patents, the proprietary
assertions of thinkers have been focused not on their ideas but on the
expression of those ideas. The ideas themselves, as well as facts about the
phenomena of the world, were considered to be the collective property of
humanity. One could claim franchise, in the case of copyright, on the
precise turn of phrase used to convey a particular idea or the order in
which facts were presented. 

The point at which this franchise was imposed was that moment when the
"word became flesh" by departing the mind of its originator and entering
some physical object, whether book or widget. The subsequent arrival of
other commercial media besides books didn't alter the legal importance of
this moment. Law protected expression and, with few (and recent)
exceptions, to express was to make physical.  

Protecting physical expression had the force of convenience on its side.
Copyright worked well because, Gutenberg notwithstanding, it was hard to
make a book.  Furthermore, books froze their contents into a condition
which was as challenging to alter as it was to reproduce. Counterfeiting or
distributing counterfeit volumes were obvious and visible activities, easy
enough to catch somebody in the act of doing. Finally, unlike unbounded
words or images, books had material surfaces to which one could attach
copyright notices, publisher's marques, and price tags.

Mental to physical conversion was even more central to patent. A patent,
until recently, was either a description of the form into which materials
were to be rendered in the service of some purpose or a description of the
process by which rendition occurred. In either case, the conceptual heart
of patent was the material result. If no purposeful object could be
rendered due to some material limitation, the patent was rejected. Neither
a Klein bottle nor a shovel made of silk could be patented. It had to be a
thing and the thing had to work.

Thus the rights of invention and authorship adhered to activities in the
physical world. One didn't get paid for ideas but for the ability to
deliver them into reality.  For all practical purposes, the value was in
the conveyance and not the thought conveyed. 

In other words, the bottle was protected, not the wine.

Now, as information enters Cyberspace, the native home of Mind, these
bottles are vanishing. With the advent of digitization, it is now possible
to replace all previous information storage forms with one meta-bottle:
complex--and highly liquid--patterns of ones and zeros. 

Even the physical/digital bottles to which we've become accustomed, floppy
disks, CD-ROM's, and other discrete, shrink-wrappable bit-packages, will
disappear as all computers jack in to the global Net. While the Internet
may never include every single CPU on the planet, it is more than doubling
every year and can be expected to become the principal medium of
information conveyance if, eventually, the only one.

Once that has happened, all the goods of the Information Age--all of the
expressions once contained in books or film strips or records or
newsletters--will exist either as pure thought or something very much like
thought: voltage conditions darting around the Net at the speed of light,
in conditions which one might behold in effect, as glowing pixels or
transmitted sounds, but never touch or claim to "own" in the old sense of
the word. 

Some might argue that information will still require some physical
manifestation, such as its magnetic existence on the titanic hard disks of
distant servers, but these are bottles which have no macroscopically
discrete or personally meaningful form. 

Some will also argue that we have been dealing with unbottled expression
since the advent of radio, and they would be right. But for most of the
history of broadcast, there was no convenient way to capture soft goods
from the electromagnetic ether and reproduce them in anything like the
quality available in commercial packages. Only recently has this changed
and little has been done legally or technically to address the change. 

Generally, the issue of consumer payment for broadcast products was
irrelevant. The consumers themselves were the product.  Broadcast media
were supported either by selling the attention of their audience to
advertisers, using government to assess payment through taxes, or the
whining mendicancy of annual donor drives.  

All of the broadcast support models are flawed. Support either by
advertisers or government has almost invariably tainted the purity of the
goods delivered. Besides, direct marketing is gradually killing the
advertiser support model anyway.

Broadcast media gave us a another payment method for a virtual product in
the royalties which broadcasters pay songwriters through such organizations
as ASCAP and BMI. But, as a member of ASCAP, I can assure you this is not a
model which we should emulate. The monitoring methods are wildly
approximate. There is no parallel system of accounting in the revenue
stream. It doesn't really work. Honest. 

In any case, without our old methods of physically defining the expression
of ideas, and in the absence of successful new models for non-physical
transaction, we simply don't know how to assure reliable payment for mental
works. To make matters worse, this comes at a time when the human mind is
replacing sunlight and mineral deposits as the principal source of new
wealth.  

Furthermore, the increasing difficulty of enforcing existing copyright and
patent laws is already placing in peril the ultimate source of intellectual
property, the free exchange of ideas. 

That is, when the primary articles of commerce in a society look so much
like speech as to be indistinguishable from it, and when the traditional
methods of protecting their ownership have become ineffectual, attempting
to fix the problem with broader and more vigorous enforcement will
inevitably threaten freedom of speech. 

The greatest constraint on your future liberties may come not from
government but from corporate legal departments laboring to protect by
force what can no longer be protected by practical efficiency or general
social consent.

Furthermore, when Jefferson and his fellow creatures of The Enlightenment
designed the system which became American copyright law, their primary
objective was assuring the widespread distribution of thought, not profit.
Profit was the fuel which would carry ideas into the libraries and minds of
their new republic. Libraries would purchase books, thus rewarding the
authors for their work in assembling ideas, which otherwise "incapable of
confinement" would then become freely available to the public. But what is
the role of libraries in the absense of books? How does society now pay for
the distribution of ideas if not by charging for the ideas themselves? 

Additionally complicating the matter is the fact that along with the
physical bottles in which intellectual property protection has resided,
digital technology is also erasing the legal jurisdictions of the physical
world, and replacing them with the unbounded and perhaps permanently
lawless seas of Cyberspace. 

In Cyberspace, there are not only no national or local boundaries to
contain the scene of a crime and determine the method of its prosecution,
there are no clear cultural agreements on what a crime might be. Unresolved
and basic differences between European and Asian cultural assumptions about
intellectual property can only be exacerbated in a region where many
transactions are taking place in both hemispheres and yet, somehow, in
neither.

Even in the most local of digital conditions, jurisdiction and
responsibility are hard to assess. A group of music publishers filed suit
against Compuserve this fall for it having allowed its users to upload
musical compositions into areas where other users might get them. But since
Compuserve cannot practically exercise much control over the flood of bits
which pass between its subscribers, it probably shouldn't be held
responsible for unlawfully "publishing" these works.

Notions of property, value, ownership, and the nature of wealth itself are
changing more fundamentally than at any time since the Sumerians first
poked cuneiform into wet clay and called it stored grain. Only a very few
people are aware of the enormity of this shift and fewer of them are
lawyers or public officials.

Those who do see these changes must prepare responses for the legal and
social confusion which will erupt as efforts to protect new forms of
property with old methods become more obviously futile, and, as a
consequence, more adamant.

					

>From Swords to Writs to Bits

Humanity now seems bent on creating a world economy primarily based on
goods which take no material form.  In doing so, we may be eliminating any
predictable connection between creators and a fair reward for the utility
or pleasure others may find in their works. 

Without that connection, and without a fundamental change in consciousness
to accommodate its loss, we are building our future on furor, litigation,
and institutionalized evasion of payment except in response to raw force.
We may return to the Bad Old Days of property.

Throughout the darker parts of human history, the possession and
distribution of property was a largely military matter. "Ownership" was
assured those with the nastiest tools, whether fists or armies, and the
most resolute will to use them. Property was the divine right of thugs. 

By the turn of the First Millennium A.D., the emergence of merchant classes
and landed gentry forced the development of ethical understandings for the
resolution of property disputes. In the late Middle Ages, enlightened
rulers like England's Henry II began to codify this unwritten "common law"
into recorded canons. These laws were local, but this didn't matter much as
they were primarily directed at real estate, a form of property which is
local by definition. And which, as the name implied, was very real. 

This continued to be the case as long as the origin of wealth was
agricultural, but with dawning of the Industrial Revolution, humanity began
to focus as much on means as ends. Tools acquired a new social value and,
thanks to their own development, it became possible to duplicate and
distribute them in quantity. 

To encourage their invention, copyright and patent law were developed in
most western countries. These laws were devoted to the delicate task of
getting mental creations into the world where they could be used--and enter
the minds of others--while assuring their inventors compensation for the
value of their use.  And, as previously stated, the systems of both law and
practice which grew up around that task were based on physical expression.

Since it is now possible to convey ideas from one mind to another without
ever making them physical, we are now claiming to own ideas themselves and
not merely their expression. And since it is likewise now possible to
create useful tools which never take physical form. we have taken to
patenting abstractions, sequences of virtual events, and mathematical
formulae--the most un-real estate imaginable. 

In certain areas, this leaves rights of ownership in such an ambiguous
condition that once again property adheres to those who can muster the
largest armies. The only difference is that this time the armies consist of
lawyers. 

Threatening their opponents with the endless Purgatory of litigation, over
which some might prefer death itself, they assert claim to any thought
which might have entered another cranium within the collective body of the
corporations they serve. They act as though these ideas appeared in
splendid detachment from all previous human thought. And they pretend that
thinking about a product is somehow as good as manufacturing, distributing,
and selling it.

What was previously considered a common human resource, distributed among
the minds and libraries of the world, as well as the phenomena of nature
herself, is now being fenced and deeded. It is as though a new class of
enterprise had arisen which claimed to own air and water. 

What is to be done? While there is a certain grim fun to be had in it,
dancing on the grave of copyright and patent will solve little, especially
when so few are willing to admit that the occupant of this grave is even
deceased and are trying to up by force what can no longer be upheld by
popular consent.

The legalists, desperate over their slipping grip, are vigorously trying to
extend it. Indeed, the United States and other proponants of GATT are
making are making adherance to to our moribund systems of intellectual
property protection a condition of membership in the marketplace of
nations. For example, China will be denied Most Favored nation trading
status unless they agree to uphold a set of cuturally alien principles
which are no longer even sensibly applicable in their country of origin.

In a more perfect world, we'd be wise to declare a moratorium on
litigation, legislation, and international treaties in this area until we
had a clearer sense of the terms and conditions of enterprise in
Cyberspace. Ideally, laws ratify already developed social consensus. They
are less the Social Contract itself than a series of memoranda expressing a
collective intent which has emerged out of many millions of human
interactions. 

Humans have not inhabited Cyberspace long enough or in sufficient diversity
to have developed a Social Contract which conforms to the strange new
conditions of that world. Laws developed prior to consensus usually serve
the already established few who can get them passed and not society as a
whole. 

To the extent that either law or established social practice exists in this
area, they are already in dangerous disagreement. The laws regarding
unlicensed reproduction of commercial software are clear and stern...and
rarely observed. Software piracy laws are so practically unenforceable and
breaking them has become so socially acceptable that only a thin minority
appears compelled, either by fear or conscience, to obey them. 

I sometimes give speeches on this subject, and I always ask how many people
in the audience can honestly claim to have no unauthorized software on
their hard disks. I've never seen more than ten percent of the hands go up.


Whenever there is such profound divergence between the law and social
practice, it is not society that adapts. And, against the swift tide of
custom, the Software Publishers' current practice of hanging a few visible
scapegoats is so obviously capricious as to only further diminish respect
for the law. 

Part of the widespread popular disregard for commercial software copyrights
stems from a legislative failure to understand the conditions into which it
was inserted. To assume that systems of law based in the physical world
will serve in an environment which is as fundamentally different as
Cyberspace is a folly for which everyone doing business in the future will
pay. 

As I will discuss in the next segment, unbounded intellectual property is
very different from physical property and can no longer be protected as
though these differences did not exist. For example, if we continue to
assume that value is based on scarcity, as it is with regard to physical
objects, we will create laws which are precisely contrary to the nature of
information, which may, in many cases, increase in value with distribution.


The large, legally risk-averse institutions most likely to play by the old
rules will suffer for their compliance. The more lawyers, guns, and money
they invest in either protecting their rights or subverting those of their
opponents, the more commercial competition will resemble the Kwakiutl
Potlatch Ceremony, in which adversaries competed by destroying their own
possessions. Their ability to produce new technology will simply grind to a
halt as every move they make drives them deeper into a tar pit of courtroom
warfare. 

Faith in law will not be an effective strategy for high tech companies. Law
adapts by continuous increments and at a pace second only to geology in its
stateliness. Technology advances in the lunging jerks, like the punctuation
of biological evolution grotesquely accelerated. Real world conditions will
continue to change at a blinding pace, and the law will get further behind,
more profoundly confused. This mismatch is permanent.

Promising economies based on purely digital products will either be born in
a state of paralysis, as appears to be the case with multimedia, or
continue in a brave and willful refusal by their owners to play the
ownership game at all. 

In the United States one can already see a parallel economy developing,
mostly among small fast moving enterprises who protect their ideas by gettin
g into the marketplace quicker then their larger competitors who base their
protection on fear and litigation. 

Perhaps those who are part of the problem will simply quarantine themselves
in court while those who are part of the solution will create a new society
based, at first, on piracy and freebooting. It may well be that when the
current system of intellectual property law has collapsed, as seems
inevitable, that no new legal structure will arise in its place. 

But something will happen. After all, people do business. When a currency
becomes meaningless, business is done in barter. When societies develop
outside the law, they develop their own unwritten codes, practices, and
ethical systems. While technology may undo law, technology offers methods
for restoring creative rights.


					
A Taxonomy of Information

It seems to me that the most productive thing to do now is to look hard
into the true nature of what we're trying to protect.  How much do we
really know about information and its natural behaviors? 

What are the essential characteristics of unbounded creation? How does it
differ from previous forms of property? How many of our assumptions about
it have actually been about its containers rather than their mysterious
contents? What are its different species and how does each of them lend
itself to control? What technologies will be useful in creating new virtual
bottles to replace the old physical ones? 

Of course, information is, by its nature, intangible and hard to define.
Like other such deep phenomena as light or matter, it is a natural host to
paradox. And as it is most helpful to understand light as being both a
particle and a wave, an understanding of information may emerge in the
abstract congruence of its several different properties which might be
described by the following three statements:

�	Information is an activity.

�	Information is a life form.

�	Information is a relationship. 

In the following section, I will examine each of these.


I. INFORMATION IS AN ACTIVITY

Information Is a Verb, Not a Noun. 

Freed of its containers, information is obviously not a thing. In fact, it
is something which happens in the field of interaction between minds or
objects or other pieces of information. 

Gregory Bateson, expanding on the information theory of Claude Shannon,
said, "Information is a difference which makes a difference." Thus,
information only really exists in the � [delta]. The making of that
difference is an activity within a relationship. Information is an action
which occupies time rather than a state of being which occupies physical
space, as is the case with hard goods. It is the pitch, not the baseball,
the dance, not the dancer. 


Information Is Experienced, Not Possessed 

Even when it has been encapsulated in some static form like a book or a
hard disk, information is still something which happens to you as you
mentally decompress it from its storage code. But, whether it's running at
gigabits per second or words per minute, the actual decoding is a process
which must be performed by and upon a mind, a process which must take place
in time. 

There was a cartoon in the Bulletin of Atomic Scientists a few years ago
which illustrated this point beautifully. In the drawing, a holdup man
trains his gun on the sort of bespectacled fellow you'd figure might have a
lot of information stored in his head. "Quick," orders the bandit, "Give me
all your ideas."


Information Has To Move

Sharks are said to die of suffocation if they stop swimming, and the same
is nearly true of information. Information which isn't moving ceases to
exist as anything but potential...at least until it is allowed to move
again. For this reason, the practice of information hoarding, common in
bureaucracies, is an especially wrong-headed artifact of physically-based
value systems.  


Information is Conveyed by Propagation, Not Distribution

The way in which information spreads is also very different from the
distribution of physical goods. It moves more like something from nature
than from a factory. It can concatenate like falling dominos or grow in the
usual fractal lattice, like frost spreading on a window, but it cannot be
shipped around like widgets, except to the extent that it can be contained
in them. It doesn't simply move on. It leaves a trail of itself everywhere
it's been. 

The central economic distinction between information and physical property
is the ability of information to be transferred without leaving the
possession of the original owner. If I sell you my horse, I can't ride him
after that. If I sell you what I know, we both know it. 


II. INFORMATION IS A LIFE FORM

Information wants to be free.

Stewart Brand is generally credited with this elegant statement of the
obvious, recognizing both the natural desire of secrets to be told and the
fact that they might be capable of possessing something like a "desire" in
the first place. 

English Biologist and Philosopher Richard Dawkins proposed the idea of
"memes," self-replicating, patterns of information which propagate
themselves across the ecologies of mind, saying they were like life forms. 

I believe they are life forms in every respect but a basis in the carbon
atom. They self-reproduce, they interact with their surroundings and adapt
to them, they mutate, they persist. Like any other life form they evolve to
fill the possibility spaces of their local environments, which are, in this
case the surrounding belief systems and cultures of their hosts, namely,
us. 

Indeed, the sociobiologists like Dawkins make a plausible case that
carbon-based life forms are information as well, that, as the chicken is an
egg's way of making another egg, the entire biological spectacle is just
the DNA molecule's means of copying out more information strings exactly
like itself.  


Information Replicates into the Cracks of Possibility

Like DNA helices, ideas are relentless expansionists, always seeking new
opportunities for lebensraum. And, as in carbon-based nature, the more
robust organisms are extremely adept at finding new places to live. Thus,
just as the common housefly has insinuated itself into practically every
ecosystem on the planet, so has the meme of "life after death" found a
niche in most minds, or psycho-ecologies. 

The more universally resonant an idea or image or song , the more minds it
will enter and remain within. Trying to stop the spread of a really robust
piece of information is about as easy as keeping killer bees South of the
Border.  The stuff just leaks.


Information Wants To Change

If ideas and other interactive patterns of information are indeed life
forms, they can be expected to evolve constantly into forms which will be
more perfectly adapted to their surroundings. And, as we see, they are
doing this all the time. 

But for a long time, our static media, whether carvings in stone, ink on
paper, or dye on celluloid, have strongly resisted the evolutionary
impulse, exalting as a consequence the author's ability to determine the
finished product.  But, as in an oral tradition, digitized information has
no "final cut."

Digital information, unconstrained by packaging, is a continuing process
more like the metamorphosing tales of prehistory than anything which will
fit in shrink wrap. From the Neolithic to Gutenberg, information was passed
on, mouth to ear, changing with every re-telling (or re-singing). The
stories which once shaped our sense of the world didn't have authoritative
versions. They adapted to each culture in which they found themselves being
told. 

Because there was never a moment when the story was frozen in print, the
so-called "moral" right of storytellers to keep the tale their own was
neither protected nor recognized. The story simply passed through each of
them on its way to the next, where it would assume a different form. As we
return to continuous information, we can expect the importance of
authorship to diminish. Creative people may have to renew their
acquaintance with humility.

But our system of copyright makes no accomodation whatever for expressions
which don't at some point become "fixed" nor for cultural expressions which
lack a specific author or inventor. 

Jazz improvizations, standup comedy routines, mime performances, developing
monologues, and unrecorded broadcast transmissions all lack the
Constitutional requirement of fixation as a "writing". Without being fixed
by a point of publicatoin the liquid works of the future will all look more
like these continuously adapting and changing forms and will therefore
exist beyond the reach of copyright. 

Copyright expert Pamela Samuelson tells of having attended a conference
last year convened around the fact that Western countries may legally
appropriate the music, designs, and biomedical lore of aboriginal people
without compensation to their tribe of origin since that tribe is not an
"author" or "inventor." 

But soon most information will be generated collaboratively by the
cyber-tribal hunter-gatherers of Cyberspace. Our arrogant legal dismissal
of the rights of "primitives" will be back to haunt us soon.



Information is Perishable

With the exception of the rare classic, most information is like farm
produce. Its quality degrades rapidly both over time and in distance from
the source of production. But even here, value is highly subjective and
conditional. Yesterday's papers are quite valuable to the historian. In
fact, the older they are, the more valuable they become. On the other hand,
a commodities broker might consider news of an event which is more than an
hour old to have lost any relevance. 

 

III. INFORMATION IS A RELATIONSHIP

Meaning Has Value and Is Unique to Each Case

In most cases, we assign value to information based on its meaningfulness.
The place where information dwells, the holy moment where transmission
becomes reception, is a region which has many shifting characteristics and
flavors depending on the relationship of sender and receiver, the depth of
their interactivity. 

Each such relationship is unique. Even in cases where the sender is a
broadcast medium, and no response is returned, the receiver is hardly
passive. Receiving information is often as creative an act as generating
it. 

The value of what is sent depends entirely on the extent to which each
individual receiver has the receptors...shared terminology, attention,
interest, language, paradigm...necessary to render what is received
meaningful. 

Understanding is a critical element increasingly overlooked in the effort
to turn information into a commodity. Data may be any set of facts, useful
or not, intelligible or inscrutable, germane or irrelevant. Computers can
crank out new data all night long without human help, and the results may
be offered for sale as information. They may or may not actually be so.
Only a human being can recognize the meaning which separates information
from data. 

In fact, information, in the economic sense of the word, consists of data
which have been passed through a particular human mind and found meaningful
within that mental context. One fella's information is all just data to
someone else. If you're an anthropologist, my detailed charts of Tasaday
kinship patterns might be critical information to you. If you're a banker
from Hong Kong, they might barely seem to be data. 


Familiarity Has More Value Than Scarcity, 

With physical goods, there is a direct correlation between scarcity and
value. Gold is more valuable than wheat, even though you can't eat it.
While this is not always the case, the situation with information is
usually precisely the reverse. Most soft goods increase in value as they
become more common. Familiarity is an important asset in the world of
information. It may often be the case that the best thing you can do to
raise the demand for your product is to give it away.

While this has not always worked with shareware, it could be argued that
there is a connection between the extent to which commercial software is
pirated and the amount which gets sold. Broadly pirated software, such as
Lotus 1-2-3 or WordPerfect, becomes a standard and benefits from Law of
Increasing Returns based on familiarity. 

In regard to my own soft product, rock and roll songs, there is no question
that the band I write them for, the Grateful Dead, has increased its
popularity enormously by giving them away. We have been letting people tape
our concerts since the early seventies, but instead of reducing the demand
for our product, we are now the largest concert draw in America, a fact
which is at least in part attributable to the popularity generated by those
tapes. 

True, I don't get any royalties on the millions of copies of my songs which
have been extracted from concerts, but I see no reason to complain. The
fact is, no one but the Grateful Dead can perform a Grateful Dead song, so
if you want the experience and not its thin projection, you have to buy a
ticket from us. In other words, our intellectual property protection
derives from our being the only real-time source of it. 


Exclusivity Has Value

The problem with a model which turns the physical scarcity/value ratio on
its head is that sometimes the value of information is very much based on
its scarcity. Exclusive possession of certain facts makes them more useful.
If everyone knows about conditions which might drive a stock price up, the
information is valueless. 

But again, the critical factor is usually time. It doesn't matter if this
kind of information eventually becomes ubiquitous. What matters is being
among the first who possess it and act on it. While potent secrets usually
don't stay secret, they may remain so long enough to advance the cause of
their original holders.


Point of View and Authority Have Value 

In a world of floating realities and contradictory maps, rewards will
accrue to those commentators whose maps seem to fit their territory snugly,
based on their ability to yield predictable results for those who use them.
 

In aesthetic information, whether poetry or rock 'n' roll, people are
willing to buy the new product of an artist, sight-unseen, based on their
having been delivered a pleasurable experience by previous work. 

Reality is an edit. People are willing to pay for the authority of those
editors whose filtering point of view seems to fit best. And again, point
of view is an asset which cannot be stolen or duplicated. No one but Esther
Dyson sees the world as she does and the handsome fee she charges for her
newsletter is actually for the privilege of looking at the world through
her unique eyes. 


Time Replaces Space

In the physical world, value depends heavily on possession, or proximity in
space. One owns that material which falls inside certain dimensional
boundaries and the ability to act directly, exclusively, and as one wishes
upon what falls inside those boundaries is the principal right of
ownership. And of course there is the relationship between value and
scarcity, a limitation in space. 

In the virtual world, proximity in time is a value determinant. An
informational product is generally more valuable the closer the purchaser
can place himself to the moment of its expression, a limitation in time.
Many kinds of information degrade rapidly with either time or reproduction.
Relevance fades as the territory they map changes. Noise is introduced and
bandwidth lost with passage away from the point where the information is
first produced.
  
Thus, listening to a Grateful Dead tape is hardly the same experience as
attending a Grateful Dead concert. The closer one can get to the headwaters
of an informational stream, the better his changes of finding an accurate
picture of reality in it.  In an era of easy reproduction, the
informational abstractions of popular experiences will propagate out from
their source moments to reach anyone who's interested. But it's easy enough
to restrict the real experience of the desirable event, whether knock-out
punch or guitar lick, to those willing to pay for being there. 


The Protection of Execution

In the hick town I come from, they don't give you much credit for just
having ideas. You are judged by what you can make of them. As things
continue to speed up, I think we see that execution is the best protection
for those designs which become physical products. Or, as Steve Jobs once
put it, "Real artists ship." The big winner is usually the one who gets to
the market first (and with enough organizational force to keep the lead). 

But, as we become fixated upon information commerce, many of us seem to
think that originality alone is sufficient to convey value, deserving, with
the right legal assurances, of a steady wage. In fact, the best way to
protect intellectual property is to act on it. It's not enough to invent
and patent, one has to innovate as well. Someone claims to have patented
the microprocessor before Intel. Maybe so. If he'd actually started
shipping microprocessors before Intel, his claim would seem far less
spurious. 


Information as Its Own Reward

It is now a commonplace to say that money is information. With the
exception of Krugerands, crumpled cab-fare, and the contents of those
suit-cases which drug lords are reputed to carry, most of the money in the
informatized world is in ones and zeros. The global money supply sloshes
around the Net, as fluid as weather. It is also obvious, as I have
discussed, that information has become as fundamental to the creation of
modern wealth as land and sunlight once were.

What is less obvious is the extent to which information is acquiring
intrinsic value, not as a means to acquisition but as the object to be
acquired. I suppose this has always been less explicitly the case. In
politics and academia, potency and information have always been closely
related. 

However, as we increasingly buy information with money, we begin to see
that buying information with other information is simple economic exchange
without the necessity of converting the product into and out of currency.
This is somewhat challenging for those who like clean accounting, since,
information theory aside, informational exchange rates are too squishy to
quantify to the decimal point. 

Nevertheless, most of what a middle class American purchases has little to
do with survival. We buy beauty, prestige, experience, education, and all
the obscure pleasures of owning. Many of these things can not only be
expressed in non-material terms, they can be acquired by non-material
means. 

And then there are the inexplicable pleasures of information itself, the
joys of learning, knowing, and teaching. The strange good feeling of
information coming into and out of oneself. Playing with ideas is a
recreation which people must be willing to pay a lot for, given the market
for books and elective seminars. We'd likely spend even more money for such
pleasures if there weren't so many opportunities to pay for ideas with
other ideas. 

This explains much of the collective "volunteer" work which fills the
archives, newsgroups, and databases of the Internet. Its denizens are not
working for 'nothing," as is widely believed. Rather they are getting paid
in something besides money. It is an economy which consists almost entirely
of information. 

This may become the dominant form of human trade, and if we persist in
modeling economics on a strictly monetary basis, we may be gravely misled. 



Getting Paid in Cyberspace

How all the foregoing relates to solutions to the crisis in intellectual
property is something I've barely started to wrap my mind around. It's
fairly paradigm-warping to look at information through fresh eyes--to see
how very little it is like pig iron or pork bellies, to imagine the
tottering travesties of  case law we will stack up if we go on treating it
legally as though it were. 

As I've said, I believe these towers of outmoded boilerplate will be a
smoking heap sometime in the next decade and we mind miners will have no
choice but to cast our lot with new systems that work.

I'm not really so gloomy about our prospects as readers of this jeremiad so
far might conclude.  Solutions will emerge. Nature abhors a vacuum and so
does commerce. 

Indeed, one of the aspects of the electronic frontier which I have always
found most appealing--and the reason Mitch Kapor and I used that phrase in
naming our foundation--is the degree to which it resembles the 19th Century
American West in its natural preference for social devices which emerge
from it conditions rather than those which are imposed from the outside. 

Until the west was fully settled and "civilized" in this century, order was
established according to an unwritten Code of the West which had the
fluidity of etiquette rather than the rigidity of law. Ethics were more
important than rules. Understandings were preferred over laws, which were,
in any event, largely unenforceable. 

I believe that law, as we understand it, was developed to protect the
interests which arose in the two economic "waves" which Alvin Toffler
accurately identified in The Third Wave. The First Wave was agriculturally
based and required law to order ownership of the principal source of
production, land. In the Second Wave, manufacturing became the economic
mainspring, and the structure of modern law grew around the centralized
institutions which needed protection for their reserves of capital,
manpower, and hardware. 

Both of these economic systems required stability. Their laws were designed
to resist change and to assure some equability of distribution within a
fairly static social framework. The possibility spaces had to be
constrained to preserve the predictability necessary to either land
stewardship or capital formation. 

In the Third Wave we have now entered, information to a large extent
replaces land, capital, and hardware, and as I have detailed in the
preceding section, information is most at home in a much more fluid and
adaptable environment. The Third Wave is likely to bring a fundamental
shift in the purposes and methods of law which will affect far more than
simply those statutes which govern intellectual property. 

The "terrain" itself--the architecture of the Net--may come to serve many
of the purposes which could only be maintained in the past by legal
imposition. For example, it may be unnecessary to constitutionally assure
freedom of expression in an environment which, in the words of my fellow
EFF co-founder John Gilmore, "treats censorship as a malfunction" and
re-routes proscribed ideas around it. 

Similar natural balancing mechanisms may arise to smooth over the social
discontinuities which previously required legal intercession to set right.
On the Net, these differences are more likely to be spanned by a continuous
spectrum which connects as much as it separates. 

And, despite their fierce grip on the old legal structure, companies which
trade in information are likely to find that in their increasing inability
to deal sensibly with technological issues, the courts will not produce
results which are predictable enough to be supportive of long-term
enterprise. Every litigation becomes like a game of Russian roulette,
depending on the depth the presiding judge's clue-impairment. 

Uncodified or adaptive "law," while as "fast, loose, and out of control" as
other emergent forms, is probably more likely to yield something like
justice at this point. In fact, one can already see in development new
practices to suit the conditions of virtual commerce. The life forms of
information are evolving methods to protect their continued reproduction.

For example, while all the tiny print on a commercial diskette envelope
punctiliously requires much of those who would open it, there are, as I
say, few who read those provisos, let alone follow them to the letter. And
yet, the software business remains a very healthy sector of the American
economy. 

Why is this? Because people seem to eventually buy the software they really
use. Once a program becomes central to your work, you want the latest
version of it, the best support, the actual manuals, all privileges which
are attached to ownership. Such practical considerations will, in the
absence of working law, become more and more important in important in
getting paid for what might easily be obtained for nothing. 

I do think that some software is being purchased in the service of ethics
or the abstract awareness that the failure to buy it will result in its not
being produced any longer, but I'm going to leave those motivators aside.
While I believe that the failure of law will almost certainly result in a
compensating re-emergence of ethics as the ordering template of society,
this is a belief I don't have room to support here.

Instead, I think that, as in the case cited above, compensation for soft
products will be driven primarily by practical considerations, all of them
consistent with the true properties of digital information, where the value
lies in it, and how it can be both manipulated and protected by technology.
 

While the conundrum remains a conundrum, I can begin to see the directions
from which solutions may emerge, based in part on broadening those
practical solutions which are already in practice. 


Relationship and Its Tools

I believe one idea is central to understanding liquid commerce: Information
economics, in the absence of objects, will be based more on relationship
than possession. 

One existing model for the future conveyance of intellectual property is
real time performance, a medium currently used only in theater, music,
lectures, stand-up comedy and pedagogy.  I believe the concept of
performance will expand to include most of the information economy from
multi-casted soap operas to stock analysis. In these instances, commercial
exchange will be more like ticket sales to a continuous show than the
purchase of discrete bundles of that which is being shown.

The other model, of course, is service. The entire professional
class--doctors, lawyers, consultants, architects, etc.--are already being
paid directly for their intellectual property. Who needs copyright when
you're on a retainer?  

In fact, this model was applied to much of what is now copyrighted until
the late 18th Century. Before the industrialization of creation, writers,
composers, artists, and the like produced their products in the private
service of patrons. Without objects to distribute in a mass market,
creative people will return to a condition somewhat like this, except that
they will serve many patrons, rather than one. 

We can already see the emergence of companies which base their existence on
supporting and enhancing the soft property they create rather than selling
it by the shrink-wrapped piece or embedding it in widgets. 

Trip Hawkins' new company for creating and licensing multimedia tools, 3DO,
is an example of what I'm talking about. 3DO doesn't intend to produce any
commercial software or consumer devices. Instead, they will act as a kind
of private standards setting body, mediating among software and device
creators who will be their licensees. They will provide a point of
commonalty for relationships between a broad spectrum of entities. 

In any case, whether you think of yourself as a service provider or a
performer, the future protection of your intellectual property will depend
on your ability to control your relationship to the market--a relationship
which will most likely live and grow over a period of time. 

The value of that relationship will reside in the quality of performance,
the uniqueness of your point of view, the validity of your expertise, its
relevance to your market, and, underlying everything, the ability of that
market to access your creative services swiftly, conveniently, and
interactively. 


Interaction and Protection

Direct interaction will provide a lot of intellectual property protection
in the future, and, indeed, it already has. No one knows how many software
pirates have bought legitimate copies of a program after calling its
publisher for technical support and being asked for some proof of purchase,
but I would guess the number is very high. 

The same kind of controls will be applicable to "question and answer"
relationships between authorities (or artists) and those who seek their
expertise. Newsletters, magazines, and books will be supplemented by the
ability of their subscribers to ask direct questions of authors.  

Interactivity will be a billable commodity even in the absence of
authorship. As people move into the Net and increasingly get their
information directly from its point of production, unfiltered by
centralized media, they will attempt to develop the same interactive
ability to probe reality which only experience has provided them in the
past. Live access to these distant "eyes and ears" will be much easier to
cordon than access to static bundles of stored but easily reproducible
information. 

In most cases, control will be based on restricting access to the freshest,
highest bandwidth information. It will be a matter of defining the ticket,
the venue, the performer, and the identity of the ticket holder,
definitions which I believe will take their forms from technology, not law.


In most cases, the defining technology will be cryptography. 


Crypto Bottling

Cryptography, as I've said perhaps too many times, is the "material" from
which the walls, boundaries--and bottles--of Cyberspace will be fashioned. 

Of course there are problems with cryptography or any other purely
technical method of property protection. It has always appeared to me that
the more security you hide your goods behind, the more likely you are to
turn your sanctuary into a target. Having come from a place where people
leave their keys in their cars and don't even have keys to their houses, I
remain convinced that the best obstacle to crime is a society with its
ethics intact. 

While I admit that this is not the kind of society most of us live in, I
also believe that a social over-reliance on protection by barricades rather
than conscience will eventually wither the latter by turning intrusion and
theft into a sport, rather than a crime. This is already occurring in the
digital domain as is evident in the activities of computer crackers.  

Furthermore, I would argue that initial efforts to protect digital
copyright by copy protection contributed to the current condition in which
most otherwise ethical computer users seem morally untroubled by their
possession of pirated software. 

Instead of cultivating among the newly computerized a sense of respect for
the work of their fellows, early reliance on copy protection led to the
subliminal notion that cracking into a software package somehow "earned"
one the right to use it. Limited not by conscience but by technical skill,
many soon felt free to do whatever they could get away with. This will
continue to be a potential liability of the encryption of digitized
commerce.  

Furthermore, it's cautionary to remember that copy protection was rejected
by the market in most areas. Many of the upcoming efforts to use
cryptography-based protection schemes will probably suffer the same fate.
People are not going to tolerate much which makes computers harder to use
than they already are without any benefit to the user.

Nevertheless, encryption has already demonstrated a certain blunt utility.
New subscriptions to various commercial satellite TV services sky-rocketed
recently after their deployment of more robust encryption of their feeds.
This, despite a booming backwoods trade in black decoder chips conducted by
folks who'd look more at home running moonshine than cracking code. 

Another obvious problem with encryption as a global solution is that once
something has been unscrambled by a legitimate licensee, it may be openly
available to massive reproduction. 

In some instances, reproduction following decryption may not be a problem.
Many soft products degrade sharply in value with time. It may be that the
only real interest in some such products will be among those who have
purchased the keys to immediacy.

Furthermore, as software becomes more modular and distribution moves
online, it will begin to metamorphose in direct interaction with its user
base. Discontinuous upgrades will smooth into a constant process of
incremental improvement and adaptation, some of it man-made and some of it
arising through genetic algorithms. Pirated copies of software may become
too static to have much value to anyone. 

Even in cases such as images, where the information is expected to remain
fixed, the unencrypted file could still  be interwoven with code which
could continue to protect it by a wide variety of means. 

In most of the schemes I can project, the file would be "alive" with
permanently embedded software which could "sense" the surrounding
conditions and interact with them, For example, it might contain code which
could detect the process of duplication and cause it to self-destruct. 

Other methods might give the file the ability to "phone home" through the
Net to its original owner. The continued integrity of some files might
require periodic "feeding" with digital cash from their host, which they
would then relay back to their authors.  

Of course files which possess the independent ability to communicate
upstream sound uncomfortably like the Morris Internet Worm. "Live" files do
have a certain viral quality. And serious privacy issues would arise if
everyone's computer were packed with digital spies. 

The point is that cryptography will enable a lot of protection technologies
which will develop rapidly in the obsessive competition which has always
existed between lock-makers and lock-breakers. 

But cryptography will not be used simply for making locks. It is also at
the heart of both digital signatures and the afore-mentioned digital cash,
both of which I believe will be central to the future protection of
intellectual property.   

I believe that the generally acknowledged failure of the shareware model in
software had less to do with dishonesty than with the simple inconvenience
of paying for shareware. If the payment process can be automated, as
digital cash and signature will make possible, I believe that soft product
creators will reap a much higher return from the bread they cast upon the
waters of Cyberspace.  

Moreover, they will be spared much of the overhead which presently adheres
to the marketing, manufacture, sales, and distribution of information
products, whether those products are computer programs, books, CD's, or
motion pictures. This will reduce prices and further increase the
likelihood of non-compulsory payment.

But of course there is a fundamental problem with a system which requires,
through technology, payment for every access to a particular expression. It
defeats the original Jeffersonian purpose of seeing that ideas were
available to everyone regardless of their economic station. I am not
comfortable with a model which will restrict inquiry to the wealthy.  


An Economy of Verbs

The future forms and protections of intellectual property are densely
obscured from the entrance to the Virtual Age. Nevertheless, I can make (or
reiterate) a few flat statements which I earnestly believe won't look too
silly in fifty years. 

�	In the absence of the old containers, almost everything we think we know
about intellectual property is wrong. We are going to have to unlearn it.
We are going to have to look at information as though we'd never seen the
stuff before.

�	The protections which we will develop will rely far more on ethics and
technology than on law.	

�	Encryption will be the technical basis for most intellectual property
protection. (And should, for this and other reasons, be made more widely
available.)

�	The economy of the future will be based on relationship rather than
possession. It will be continuous rather than sequential. 

And finally, in the years to come, most human exchange will be virtual
rather than physical, consisting not of stuff but the stuff of which dreams
are made. Our future business will be conducted in a world made more of
verbs than nouns. 


Ojo Caliente, New Mexico, October 1, 1992
New York, New York, November 6, 1992
Brookline, Massachusetts, November 8, 1992
New York, New York, November 15, 1993
San Francisco, California, November 20, 1993
Pinedale, Wyoming, November 24-30, 1993
New York, New York, December 13-14, 1993


This expression has lived and grown to this point over the time period and
in the places detailed above. Despite its print publication here, I expect
it will continue to evolve in liquid form, possibly for years. 

The thoughts in it have not been "mine" alone but have assembled themselves
in a field of interaction which has existed between myself and numerous
others, to whom I am grateful. They particularly include: Pamela Samuelson,
Kevin Kelly, Mitch Kapor, Mike Godwin, Stewart Brand, Mike Holderness,
Miram Barlow, Danny Hillis, Trip Hawkins, and Alvin Toffler. 

However, I should note in honesty that when Wired sends me a check for
having temporarily "fixed" it on their pages, I alone will cash it...