[unrev-II] A Brief Note on Open Source Communities and Intellectual Capital Appreciation Licenses by Dr. Spohrer

From: John J. Deneen (JJDeneen@ricochet.net)
Date: Tue May 09 2000 - 12:43:16 PDT

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    The basic ICA (Intellectual Capital Appreciation License) framework is
    as follows:

                Purpose: Allows free reuse (sharing) and modifications
    (improvements) and commercialization
                (compensation) with registration (attribution, tracking).
                Terms:
                      Sharing: Materials must be registered and archived for
    broad access, escrow allowed.
                      Attribution and Improvement: Reuse and modifications
    for redistribution require that the
                      non-separable part of the material be placed under
    this license with attribution to the
                      original material(s).
                      Compensation: Commercialization requires compensation
    per the registration.
                      Indemnification: No warranty except that specified per
    the registration.
                Required Infrastructure:
                      Intellectual Capital Title Service/Company
    (registration)
                      Intellectual Capital Bank Service/Company (archive)
                      Intellectual Capital Escrow Service/Company (escrow)
                      Intellectual Capital Metering Service/Company
    (compensation)
                      Intellectual Capital Insurance Service/Company
    (indemnification)
                Registration:
                      What & Who: date, id, creators {name, org, email},
    steward, person-completing-registration
                      Kind of Registration: originator, unmodified reuse,
    modified reuse, suggested improvement
                      Commercialization: ask/bid buy-out price/royalty
                           single event use: .01 cent per event
                           personal use right: .1 cent per person
                           escrow factor: (10 ** years) (1 year = * 10, 2
    years * 100)
                      Warranty: originality, non-infringement, quality,
    safety

    Hopefully this makes it clear how people can make money with open source
    materials, as well as why open source is quite different from public
    domain. The challenge is to create the attribution servers and the
    organizational infrastructure to make the ICA license enforceable. By
    making something open source, a programmer increases the chances that it
    will get incorporated into someone elses work, and thus increasing the
    chances of making money. The goal is to put things out that people will
    build on, modify, and incorporate into products. The easier it is to
    reuse the work and build on it, the more money the originator stands to
    make. Openness and sharing can lead to greater returns. A genetics
    analogy is to try to create a little bit of value that gets replicated
    and incorporated into new organisms over and over for years.

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    EOE | Papers | A Brief Note on Open Source Communities and Intellectual Capital Appreciation Licenses
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    A Brief Note on Open Source Communities and Intellectual Capital Appreciation Licenses
    By Jim Spohrer


    Abstract: This note briefly describes the importance of open source communities for promoting software reuse. Some ideas about intellectual property licenses are also described.


    Open Source Communities and Intellectual Capital Appreciation Licenses

    This is a rough draft of some ideas, and comments are invited.

    Introduction: Reinvent or Reuse?

    The educational software community often seems to prefer to reinvent the "digital" wheel, rather than reuse someone elses software. For example, some programmers ask, "Why should I use someone elses software for graphing a mathematical function when I can write it from scratch?"

    The reasons for this bias towards reinvention rather than reuse are numerous. One of the key obstacles to reuse is that often the software must be modified to fit a new situation, but the source code for the software may not be available.

    To encourage the reuse of educational software, the EOE promotes open source communities and intellectual capital appreciation licenses that encourage (rather than discourage) reuse. About twenty five percent of the educational Java applets in the EOE are open source. However, the number of different (or missing) licenses is still a barrier to promoting softwate reuse.

    Examples of successful open source communities and licenses can be found in the EOE Resources section, under the topic licenses. These examples include: Apache, Linux, Perle, SK8, Squeak, to name a few.

    The notion of open source communities and intellectual capital appreciation licenses raise many questions. In this short note, some of these questions are briefly addresses from an EOE open source community perspective.

    Questions

    Question: who in the end owns (if anybody) the open source software? Who makes money with this approach and how? In this context, what is the difference between "public domain" and "open source"?

    Here is the view we are evolving in the EOE (this is not fully implemented, but planned)...

    Ownership can be transfered, but the owner of the original work remains the owner of the original work. The "value adders" remain the owners of the pieces that they add, as well as the pieces they modify. After many modifications the derivative work may have many owners. All of these rights are maintained in something that is called an "Attribution Server."

    Ownership/attribution simply records intellectual heritage/process. This is similar to references in academic journal articles (see Prof. Alan McAdams' University Model in the EOE People list).

    What is important is who has rights to do what. Anyone has the right to commercialize any portion of the work as long as they abide by the terms of an Intellectual Capital Appreciation license (see below). The terms are straightforward, commercial or non-commercial reuse is allowed as long as (1) registration is done and attribution is given, (2) any modifications are shared back to the community under similar terms, and (3) commercialization terms are met. Commercialization terms are specified in the registration. All users must register before they can access and gain any rights to the work.

    While all modifications must be shared back with the community, they do not necessarily have to be shared back immediately. Modified works can be placed in escrow, to be released at a prespecified future time. This allows the "enhancer" to extract more value from their innovation for a limited time (similar to patents, but typically a much shorter duration, and the modifications are treated as registered, escrowed trade-secrets). Typically the originator of the work will require higher royalty payments if the material is put in escrow, and not shared back immediately.

    Overall the royalty payments for use must be 4-5 orders of magnitude less than typically software. This allows hundreds of value adders to be compensated with micropayments for their (perhaps small) contributions. The value adder sets the royalty price. The commercializer can decide that a royalty price is too high, and exclude that particular enhancement from the work that they are doing, or put out a bid for the same functionality.

    What makes the plan work is that the market size for the resulting work can be 4-5 orders of magnitude larger than for typical software. This is in part due to the Internet increasing market sizes for software.

    For example, let's say a programmer creates some software in one day of programming, and then puts it into the OSC/EOE for reuse and requires $0.001 if it is repackaged and sold to anyone as part of another software package. If this piece is sold to 1 million users in a year, then the programmer gets $1,000 that year. Now, the programmer can produce 100 to 300 such artifacts per year, since the artifact took only a day to produce. The programmer can then earn about $100,000-$300,000 per year, if they are successful in producting things that can attract one million users each per year.

    The basic ICA (Intellectual Capital Appreciation License) framework is as follows:

    Hopefully this makes it clear how people can make money with open source materials, as well as why open source is quite different from public domain. The challenge is to create the attribution servers and the organizational infrastructure to make the ICA license enforceable. By making something open source, a programmer increases the chances that it will get incorporated into someone elses work, and thus increasing the chances of making money. The goal is to put things out that people will build on, modify, and incorporate into products. The easier it is to reuse the work and build on it, the more money the originator stands to make. Openness and sharing can lead to greater returns. A genetics analogy is to try to create a little bit of value that gets replicated and incorporated into new organisms over and over for years.

    Question: If everybody can add value (program additional lines) to the source code, who administers the "master copy"? Who makes the decision on which new lines to include in the application and on what basis?

    This is determined by the market. Think of it like an intellectual captial bank, similar to a bank where you borrow cash and payback interest. When you put money in a bank, you do not care how the bank loans out your money as long as you get interest and have access to the cash when you want it. Similarly for an intellectual capital bank. You put in intellectual capital and are repaid, both with intellectual capital appreciation and with compensation per your original registration of the material.

    In some cases, people will want to incorporate improvements back into a master. For example, the Apache HTTP server has a committee which sifts through recommended changes and fixes and incorporates them back into the master.

    Add a Review Add Pedagogy Add a Technical Comment add IMS Metadata

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