This fundamental paper in law proposes a radically new approach to treating the intellectual property for innovation in information platforms for the internet. Highlighting benefits and disadvantages with the commons model and the proprietary control models, this work proposes a balanced competitive platforms model that allows IP protection to incentivize innovation in the early stages of the development of a platform but allowing reverse engineering more freely once a platform has become the standard to prevent monopolistic dominance.

1. THE INTERNET,
INNOVATION &
INTELLECTUAL
PROPERTY
Krishna RajendrenENNEC 560

2. Overview
1. Internet and Intellectual Property
2. Current IP Laws and Reverse Engineering
3. Commons vs Proprietary Control
4. Competitive Platforms Model
5. Legality of Reverse Engineering

3. The Internet and Intellectual
Property
1. Internet: The Layers Principle
1. Content Layer: Website content created using HTML, CSS … : Front-end.
2. Application Layer: Programs supporting content and activities using JavaScript … :
Back-end.
3. Logical Layer (standards TCP./IP.): Antitrust. & Telecommunications Regulation.
4. Physical Layer (wires & cables)
2. Information Platforms
1. IT Inventions at the Application and Logical Layers
3. Reverse Engineering
1. Translating Object Code to Source Code
2. Real Networks Case
4. Intellectual Property Law
5. Platform Standards

4. Reverse Engineering
1. Legal Status.
1. Legal Underpinnings
1. Congress: Computer Programs Copyright Protection
2. Supreme Court: Software Patenting
3. Information Commons in IP Law
1. Copyright Law: Fair use Doctrine – Equitable rule of reason Analysis
1. Evolution to commercial actors using protected works in transformative ways
2. Patent Law: Misuse Doctrine
1. Arising from Patent law’s limited term protection
2. Policy to prevent suppression of competition
2. Practice
1. Horizontal: Rival Platforms e.g. Microsoft & AOL. Very poor co-operation.
2. Vertical: Complementary Product e.g. AOL and Reminder App. Generally well received.
2. The Debate
1. IP Law should condone access to product specifications for compatibility Product
Interface
Landmark events in
history
Video Game
Industry.
Focus.

5. Commons Model vs Proprietary
Control
The Commons Model: Information wants to be Free
1. Open Source: GNU-Linux (GPL License) WWW &
E-mail
2. World Wide Web (W3C) Consortium: Endorses
Web Standards
concluded “…patented technologies would not be
permitted in the groups official standards.”
3. Path Dependence: QWERTY vs Dvorak

6. Commons Model vs Proprietary
Control
Failings of the Commons Theory
1. Non-proprietary Standards: Exceptions not the Norm
2. IETF and others have tolerated patented
technologies
3. When Markets might not Tip
1. Network effect declines after a critical mass
2. Possible disruptions of existing network
3. Critical mass small enough to accommodate multiple

7. Commons Model vs Proprietary
Control
The Proprietary Control Model: Schumpeterian
Justification
1. Focus & Speed: Centralized team of developers
2. Creative Destruction: Market dominance is temporary
3. Kitch’s Prospective Theory: Patents can ensure that
a firm
1. Appropriates gains from technology
2. Coordinates Innovation by reinvestmentIncentivizing Internet Innovation & making sure its Maintained and put to Best

8. Commons Model vs Proprietary
Control
Failings of the Proprietary Control Theory
Scherer & Ross:
“Technological progress thrives best in an environment that
nurtures a diversity of sizes &, perhaps, especially, that keeps
barriers to entry by technologically innovative newcomers
low.”
Information Industry: Intellectual Capital > Physical
Capital
Cisco: Outsources R&D by purchasing Start-ups
VC funded Start-ups: Produced significant number of

9. Competitive Platforms Model
1. Rival Platform Standards vs LCD Standard
1. Europe: GSM vs US: GSM CDMA & TDMA
2. Quality Service: Microsoft, Nintendo and Sony
3. Open access to Platforms for Complementary
Products
2. Competition within a Standard: Reverse
Engineering
3. Role of Standard-setting bodies & Government

10. Legal Status
Despite the arguments made by a number of
prominent commentators for a sui generis regime to
regulate the software industry, Congress has
declined to take up any such suggestion…
Congress generally has allowed the judiciary to craft
judge-made docrines…
As a result, “the heart of copyright doctrine has been
developed by the courts through experience with
individual cases.”

11. Sony PlayStation vs Connectix
VGS
Connectix used reverse engineering to develop
Virtual Game Station (VGS). VGS cost
Connectix ~ $150,000 whereas Sony spent >
$600 Million on developing the PlayStation and
building up the brand loyalty…
The Ninth Circuit. ruled in favor of Connectix as
the reverse engineering was modestly
transformative.

12. Focus of Competitive Platforms
Model
Resolve the unsettled issue of how intellectual
property law should regulate rival systems.
Allowing reverse engineering in all cases,
Commons Model, would allow firms to “clone”
inventions at very low costs, undermining
investment incentives. Refusing reverse
engineering totally, Proprietary Model, would
stifle competition.

13. Focus of Competitive Platforms
Model
Resolve the unsettled issue of how intellectual
property law should regulate rival systems.
Allowing reverse engineering in all cases,
Commons Model, would allow firms to “clone”
inventions at very low costs, undermining
investment incentives. Refusing reverse
engineering totally, Proprietary Model, would
stifle competition.

14. Path Dependence: QWERTY vs
Dvorak
Though Dvorak provided users with the ability to
type more quickly it lost out to the established
QWERTY because the latter came first. Path
Dependence Theory claims that markets
characterized by strong network effects i.e.,
where “the utility a user derives increases with
the number of other users” one standard will
achieve dominance: Tipping.
Durable Monopolies: Google. facebook.

15. Sun Microsystems: Open Java
Standard
…relies on a “community source license” that is
somewhat similar to the open source model.
“For all its hype and popularity, Java has made
more money in direct software sales for
competitors than for the company that invented it.”

16. References
1. The Internet, Innovation, and the Intellectual
Property Policy – Philip. J Weiser - Columbia Law
Review - Apr 2003
2. The Layers Principle Internet Architecture and Law –
Lawrence. B Solum and Min Chung - Notre Dame
Law Review - Apr 2004
3. Collaborating to Create: The Internet as a Platform
for Customer Engagement in Product Innovation –
Sawhney et al. - Journal of Interactive Marketing -