July 8, 2012

Seeking Upside: Why I Care About Intellectual Property (and a Recent Court Decision)

Filed under: Business, Consumer, Economics, Information Politics, Politics, Software Blog — marcstober @ 9:54 am

I’ve long been a fan of open-source software. First of all, because you don’t have to pay for it, and who isn’t a fan of free? Second, even compared to closed-source free software, I prefer open, because I can rely on it. I might never look at the source code, but knowing that one can gives me some assurance that there isn’t anything bad (spyware, viruses) hiding and that I can continue using the software even if the original author stops providing upgrades or takes his business in a different direction.

Like a lot of other people in the technology industry, I aslo tend to see free software as something more than that, as a moral good, and intellectual property (IP) rights like a dangerous weapon that needs to be controlled. (With apologies to the NRA: “Patents and copyrights don’t kill innovation, patent and copyright holders do.”)

And after a lot of reflection on the matter, I’ve figured out why I feel this way: I have no personal upside. I don’t make money from IP rights. And on the downside, and I can lose money when others decide to exercise their IP rights. That doesn’t seem fair.

Here’s a thought experiment: If, like a songwriter represented by ASCAP, I got regular royalty checks for each line of code still in production that I’d written at some job years ago, would I feel differently? Or if I was guaranteed an on-screen credit and chance at an Oscar like a union technician in a Hollywood movie?

But I’m not complaining. I have a good job and make a decent living. If I stop working for my current employer, they own that work I’ve done, and that seems fair; I was reasonably paid for providing a service. But, while I’m not making money from licensing IP, I still have the downside of costs and risk of licensing it from others.

And writing software is, in my opinion, providing a service. Software has a pretty short half-life, and whether you hire developers to write software to use or to sell, you need to keep developers on the payroll to be valued as a software shop. No one is making money selling two-year-old software, at least not without ongoing investment in upgrades and support.

Judge Richard Posner of the 7th U.S. Circuit Court of Appeals in Chicago came to basically the same conclusion recently:

Advances in software and other industries cost much less, he said, and the companies benefit tremendously from being first in the market with gadgets — a benefit they would still get if there were no software patents. “It’s not clear that we really need patents in most industries,” he said. “Also, devices like smartphones have thousands of component features, and they all receive legal protection. You just have this proliferation of patents,” Posner said. “It’s a problem.”

via Judge Posner: U.S. patent system out of sync – chicagotribune.com.

It was wonderful to see our legal system take this view, which I’d usually associate with underdog advocates who can’t actually afford a day in court.

I’m not against all forms of intellectual property or its strict enforcement. I don’t support piracy or counterfeiting; that’s legally and morally wrong and I think it’s unfortunate that the cause of online freedom sometimes gets mixed up in defending it. Nevertheless, I see IP as a modern policy construct, not in the same category as the biblical “thou shalt not steal.” A purpose of IP is to encourage investment in innovation by providing investors with a better return, and laws should be calibrated so they’re fair to all.

Perhaps I need to find a way to own some IP that can generate some returns. Then again, perhaps creating IP, not owning it, is more fun.

Creative Commons License
This post is licensed under a Creative Commons Attribution-ShareAlike 3.0 Unported License.

October 7, 2011

Why Occupy Wall Street Will Fail

Filed under: Economics, Politics, Social Justice — marcstober @ 5:01 am

It’s a mistake to conflate size with evilness and blame everything on “corporations.”

When people complain that mandated health care is bad for small business, no one points out that what they’re really saying is “I’d rather keep my profits than give my employees health care like a larger business would.” No one is complaining about small independent mortgage brokers who pushed through bad deals while flying under the radar of any attempt at corporate responsibility. No one complains about nonprofits who think their good works are an excuse for exploiting employees and cheating vendors.

Not that all (or even most) people and organizations in the above categories are to blame. But the ones that are, are certainly happy to see you blame “corporations.”

I think the problem is the way things like government debt or “socialized medicine” get talked about public debate now as if they’re axiomatically bad, instead of inherently bad things like intolerance, sickness, or war, that government policy is after all a tool to prevent.

In a nation of 300 million people, you can’t simply blame the fact that there are institutions large enough to feed, employ, and serve lots of us. It is going to take some really big farms, and really big banks. Something is wrong with the state of the social contract, if we ever had one, I’ll admit: you should be able to go to school, play by the rules, and not get tossed aside. But while some big organizations and their leaders are part of the problem, we also shouldn’t toss aside people and organizations that can be part of the solution. And we need big solutions.

October 17, 2010

The real cost of free | Cory Doctorow | Technology | guardian.co.uk

Filed under: Business, Economics, Information Politics, Software Blog — marcstober @ 10:38 am

I tend to buy this argument…

What should other artists do? Well, I’m not really bothered. The sad truth is that almost everything almost every artist tries to earn money will fail. This has nothing to do with the internet, of course. Consider the remarkable statement from Alanis Morissette’s attorney at the Future of Music Conference: 97% of the artists signed to a major label before Napster earned $600 or less a year from it. And these were the lucky lotto winners, the tiny fraction of 1% who made it to a record deal. Almost every artist who sets out to earn a living from art won’t get there (for me, it took 19 years before I could afford to quit my day job), whether or not they give away their work, sign to a label, or stick it through every letterbox

via The real cost of free | Cory Doctorow | Technology | guardian.co.uk.

June 23, 2010

How Becoming a Chevrolet Owner is Changing My Design Ethic

Filed under: Business, Cars, Consumer, Design, Economics — marcstober @ 7:50 am

I feel there is a very different design ethic now that I have the GM car.

I saw that Chevrolet is doing a program to sponsor training for first responders to learn how to extricate people from their upcoming electric car with the Jaws of Life, etc.

There are two ways to look at it. Toyota finds ways to be Lean about everything, and it makes a lot of money, and makes GM look old and stupid.

On the other hand, GM over-engineers things. And so the Volt comes out years behind the Prius, for maybe more money. But for all that extra time they will actually have a car that is a lot more efficient. They are probably losing money because they do things like training for rescue personnel that might not contribute to the bottom line (but if you’re the one in a wreck, it’s good they did)!

Similarly, with our car, the way the radio is all integrated with everything from the driver’s side door to the OnStar system, it’s like – this is not the simplest, leanest way to do it. It has to be more complex and require exponentially more engineering to get right. But the end result is a car that might successfully argue against the “KISS” (keep it simple, stupid) principle. Which is really interesting to me, since I engineer complicated things professionally.

June 21, 2010

Biscuit making / from a working library

Filed under: Economics, Personal Blog — marcstober @ 9:10 pm

So, take an activity—say, cooking, which may be one of the most natural, human things we can do for one another—and break it up into a thousand pieces and you’ll find yourself with a dreary workforce and inferior biscuits. That we ever got to this point, when it is so clearly a source of despair, is astonishing.

via Biscuit making / from a working library, via Ned Batchelder: Fragmented biscuit making.

October 25, 2009

Slate Discusses the Economics of Apple Picking

Filed under: Business, Economics, Elsewhere, Food — marcstober @ 8:31 pm

Especially now that I am allergic to apples it feels very much like going to a low-budget amusement park. The horticulture is better at Disney World or Storyland anyway:

Apple picking is a cherished rite of fall, a wholesome and fun family outing, a throwback to a simpler time when people weren't so disconnected from the production of their sustenance. I look forward to it every year. It's also a wasteful scam.

via What pick-your-own-apple orchards teach about the American economy. – By Daniel Gross – Slate Magazine.

December 31, 2008

Madoff, Evidence, and Confidence

Filed under: Business, Economics, Judaism — marcstober @ 8:31 am

If we’re going to learn from the Bernie Madoff scandal it needs to be this: Some people suspected him all along. So why did people keep giving him money?

He was a true con man, because he had investors’ confidence. There are two ways to make decisions: either you have evidence to make a rational, scientific decision; or you rely on instinct and trust. The hard part is that you rarely can gather enough evidence to make a scientific decision on your own; especially in complicated, important decisions. Gadflies abound who tell us any successful corporation, drug, zoning change, or other powerful person will ruin our economy/enviroment/health, so what’s to say Madoff’s critics weren’t just jealous competitors?

Maybe we need look at how so many Jewish investors were defrauded. Being Jewish doesn’t give you any special power with money. Let me repeat this: Being Jewish doesn’t give you any special power with money. Nefarious stereotypes aside, I suspect these investors simply placed their confidence in a fellow Jew. Even more likely, they placed their confidence not just in Madoff, but in the fact that investors like themselves (in certain Jewish social circles) trusted him. People misplace trust like this constantly–how many people believe that asking a friend, neighbor or co-worker is the best way to find a plumber or a dentist? I think this is confusing general trustworthiness with whom to trust for a specific decision. You might give someone the key to your house, but should you trust them over your doctor for medical advice?

I’m not sure what would have helped Madoff’s investors, but the rest of us should remember to trust what we hear but also get the facts.

November 21, 2008

Family Financial Memo

Filed under: Economics — marcstober @ 1:22 am

It think we’ve all been getting these sorts of memos at work lately, and I recently got one from my alma mater. So, I decided to write one of my own. I figure someone’s going to leak it to the blogosphere anyway, so I’ll just post it here in the first place. 🙂


TO: Stober Family Members, Newton Highlands Branch

FROM: Marc Stober, Chief Operating Officer

DATE: November 21, 2008

SUBJECT: The Financial Crisis

With the recent news on Wall Street, I have been hearing many concerns about our organization’s situation and wanted to take this opportunity to detail what we are doing from the top.

First, there will be no layoffs.

As you know, we are operating at a deficit this year, due to extraordinary child care and preschool expenses. It is important to note that this is unrelated to the general financial crisis, and these expenses are fully funded through school year 2008-9.

In terms of recurring revenue, our employers have indicated that they are committed to continuing at present levels on a monthly basis. However, they are also facing pressure, and, based on our discussions with them, we are budgeting for a significantly smaller increase in revenue compared to what we have seen in recent years.

At present, our greatest exposure is highly leveraged real estate debt used to purchase our primary residence. While related debt service is our largest recurring expense, the good news is that this is a fixed expense that will not increase until at least 2013. We believe our investment is fundamentally sound, and will achieve long-term growth while continuing to provide immediate benefits through use of the underlying assets, regardless of the current market.

Our extended family’s long history of continuous operation through difficult times–including the Great Depression–gives us the strength to navigate in the present climate. However, in light of the global financial situation, there are some measures we are taking to cut back expenses. We feel these measures are prudent to preserve cash flow in the face of uncertain growth and unfavorable credit prospects.

The most difficult budget issue is transportation, and we have not made any final decisions. As you know, our second car was scheduled for replacement at the end of this school year, and we may decide to extend its service life. The reason we have not made a final decision is that repair costs required for this course of action are yet unknown. While this is potentially disappointing, keep in mind that our primary car still serves over 80% or our non-transit transportation needs. We committed to meeting those needs, and through a program of regular maintenance (that has not been cut), we have not had any unplanned downtime for a primary car in over 4 years. Additionally, thanks to successful strategic planning undertaken by the Board, we are uniquely situated for a suburban family to be able to utilize the MBTA as a safe, cost-effective option.

In the Travel and Entertainment category, you will find that fewer requests to eat in restaurants will be approved, and requests for desserts in restaurants, particularly, will not be approved (unless they are included in the cost of a kid’s meal). In the case of Cabot’s or The Cheesecake Factory, where ice cream or cheesecake, respectively, is kind of the point, sharing is strongly encouraged. An additional benefit of this will be improved health. Netflix has been put on hold for 90 days, and we will reconsider that offering then; unopened red envelopes left on top of the TV indicate a lack of demand at present. Newspaper and magazine subscriptions are subject to elimination as well. Executives, including myself, are being asked to purchase regular coffee in place of more expensive coffee drinks while traveling, and to utilize meals from our on-site food service provider whenever possible.

Charitable giving will continue, primarily to organizations to which we have supported on a regular annual basis, and new requests will be considered individually.

All major vacations, home improvements, and furniture purchases are temporarily put on hold, unless essential. Pre-approved food and clothing purchases can continue as needed and may be subject to increased budget scrutiny.

Lastly, note that we have no plans to add human resources. Requests for non-human resources (i.e., pets) may be considered in a future fiscal year.

The bottom line is that while the coming years may not be everything we want, we will stay together and have great stories to tell the grandkids.

Happy Thanksgiving.

If only my memo-writing skills could get me a job as a real CEO….