Prizes instead of patents?

Recently I read Jüri Saar's master thesis titled "Prizes: The Neglected Innovation Incentive" (also available online in PDF format). The thesis looks at the patent system and proposes a possible alternative based on prizes. An interesting concept which is especially compelling in light of the digital revolution and the Internet. The whole system of patents and intellectual property laws has created a complex maze of legislation which requires dedicated lawyers for navigation. The original system was never intended for the fast-paced development of the software industry.

Alternatively prizes could be used instead of patents to stimulate innovation and provide compensation for the efforts put into research & development. There are numerous real-life examples of how prizes have effectively been used to solve problems. Several such cases have been outlined in Jüri's paper such as the Longitude Act in the 18th century all the way up to modern day with the Ansari X-Prize and the open-source prize onmac.net.

Instead of hiring a small dedicated team of researches to work on solving a problem you can have the entire community do the research and only pay for the (best) solution once it's found.
A company called InnoCentive has been set up specifically for the purpose of bringing together the people with a problem and the people with a soution using prizes as the incentive. The service offered by InnoCentive helps to solve problems quickly and effectively but it does not solve the issue of intellectual property laws. The problem is that InnoCentive does not publish the solution and the IP rights are handed over to the seeker (prize offerer). This business model has also become known under the name crowdsourcing. A comprehensive article about this model can also be read here.

But crowdsourcing is not the most beneficial way of innovation from the community's perspective as the new owner of the solution still holds a monopoly over the marketing rights. This might be somewhat acceptable in industries where the research costs are incredibly high (e.g. pharmaceutical manufacturing) but it just doesn't fit for software development.

This is where open-source software prizes seem to offer the best solution. The onmac.net prize is a good example of this. Colin Nederkoorn wanted to use Windows XP on his Intel-based mac (before official possibilities were announced i.e. Boot Camp or Parallels) and offered a prize of $100 to anybody who could make it happen. However the solution would have to be open-source and therefore free for everybody. He also included the possibility for others to increase the prize money with donations. In the end the total cash prize was $13,854 and the solution was found in less than 2 months.

I believe there is a lot of potential for open-source prizes which are beneficial for both the developers and the community. The Internet is perfect for this kind of innovation and makes it relatively easy to coordinate and handle the administrative issues. There are also several examples of the emergence of this trend. The prize model has been adopted by an open-source mobile company called Funambol. They have a program called Funambol Community Code Sniper which lists a number of prizes for developing connectors and plug-ins for their software. Prizes range from $1000 to $3000 and the solutions will be made open-source.

Likewise Computer Associates announced prizes for developing open-source database migration applications. The commercial benefit for the company was clear - get people to switch database software. The largest prize was $400 000 and it was won by a team of software developers from India. All the solutions are now available for use under public licenses like the BSD Open Source License.

The notion of using prizes for future software development has a lot of potential. For further information on this subject I recommend reading Jüri's master thesis and also checking his blog Vabalog where he keeps track of more interesting developments in this field (blog is only in Estonian, use the search term "auhinnad" to find blog posts on this subject).

A Little About Hacker Culture

In this essay written for the History & Visions of New Media course I will try to give a little insight into the hacker culture – it’s origins, ideology and the way it has evolved over time. The hacker mentality was the driving force behind the computer revolution and could possible be the key to the future of the whole computer industry.

The term hacker has several definitions in the English language and can be used in several ways including the description of someone who is bad at golf. In a more wider meaning the term hacker can be applied to any technical field where a person is skilled and motivated to go beyond the expected limits and push the envelope – an expert or enthusiast of any kind.

Today the term hacker is mostly associated with 2 contradicting meanings. From the historical point of view the true definition of a hackers is a person who likes to explore and play with computer systems and is exceptionally talented in understanding and manipulating the inner workings of computer hardware and/or software. This hacker culture originated in the early sixties with the first “true hackers” or “academic hackers” at MIT’s Artificial Intelligence Lab who essentially discovered the spirit and soul of computing. Steven Levy’s book “Hackers” gives a deep insight into the hacker culture established by the likes of Richard Greenblatt, Bill Gosper, Richard Stallman, Lee Felsenstein, John Harris and many others (Levy 1994).

Actually the word “hack” was used at MIT even before computer culture became an integral part of the university. MIT hacks were pranks or practical jokes undertaken by students at the MIT campus. A tradition that is still alive and practiced among new MIT recruits.

The second widely used definition of hackers was adopted by the news media in the early 1980s. Unlike the “romantic” definition of hackers outlined above this one has a negative undertone because it refers to a person who uses his computer skills to break security measures in order to gain access to secured networks and information with malicious intent. Richard Stallman founder of the Free Software Foundation and considered by Levy and many others as “the last true hacker” (Levy 1994, 435) points out in an article about hacking that although some hackers do occasionally break security measures it is not the main intent of hackers. He describes hacking as “playful cleverness” where security measures are occasionally breached in order to learn and explore. However the mass media ignored all the other attributes to hacking and for the most part associated it only with security breaking. In order to help correct the misunderstanding Stallman recommends using the term “cracking” for security breaking which has already been adopted by many. However Eric Gordon Corely (a.k.a. Emmanuel Goldstein) founder of the hacker magazine “2600: The Hacker Quarterly” suggested in an interview given to CNN not to use labels at all because the term “cracker” might also be misleading.

The controversy and discussion surrounding the definition of “hacker” is a long one and it will not be described further in this essay. Instead, I shall delve more deeply into exploring the hacker culture and how it has shaped over time.

As already mentioned above the roots of hacker culture stem from MIT’s AI lab during the early sixties. In his book, Levy divides hackers into 3 generations: the true hackers from the 50’s and 60’s, hardware hackers of the 70’s and game hackers of the 80’s (Levy 1994). As the book was originally published in 1984 it fails to address the later generations and present day.

The 50s and 60s was a time when computers where large bulky machines taking up rooms full of space and requiring a fleet of air conditioners to keep them operational. The first computer at the MIT AI lab that ignited the hacker culture was the experimental TX-0. After that the PDP-1 and several other incarnations became the shrines for hackers at MIT and other universities in the USA. During this era of “academic hackers” the hacker ethics first came to light and the principles were written down by Levy as follows (Levy 1994, 40):

• Access to computers — and anything which might teach you something about the way the world works — should be unlimited and total. Always yield to the Hands-on Imperative!
• All information should be free.
• Mistrust authority — promote decentralization.
• Hackers should be judged by their hacking, not bogus criteria such as degrees, age, race, or position.
• You can create art and beauty on a computer.
• Computers can change your life for the better.

The hacker ethic is not something written in stone – it’s a way of thinking, an ideology if you will. The “The Conscience of a Hacker” written by a hacker called The Mentor gives some insight into the mind of hackers and their culture which has sparked the creative minds of computer programmers around the world.

The hacker ethic is an fundamental part of the hacker culture but not the only aspect of it. There is a whole subculture around hacking and “The New Hacker’s Dictionary” is the guide to this strange world of passionate enthusiasts. Among others it outlines the characteristics of hackers, their speech style, jargon and even sexual habits.

After first originating at MIT the hacker culture quickly spread into other universities and during the 70s the so-called hardware hackers emerged who started making their own personal computers and the culture spread even further. Those who fiddled with computers during the first half of the seventies were mostly hackers because computer technology was still too complex for the average person to use but not for long. Many of these hardware hackers were soon-to-be millionaires as the personal computer industry began taking shape.

During the 1980s the personal computer revolution was ignited by companies like Apple, Atari, Microsoft and IBM who brought computers to the masses. From a hacker culture point of view there was a large shift during this time – computers became big business. This commercialization of software and hardware gave a blow to the hacker ethic because all the information (software source code) was no longer free. According to Levy the 80s generation of game hackers, who wrote software for computers like Atari, the hacker ethic was no longer strictly followed. In some ways this is understandable because there was a lot of money to be made from writing software. Information that used to be free to the original true hackers became proprietary and copyright lawyers made sure that the hacker ethic would not prevail over state laws (Levy 1994).

Richard Stallman was one of the most voiced protestors of this trend and in 1985 established the Free Software Foundation which is dedicated to promoting computer users' rights to use, study, copy, modify, and redistribute computer programs. In essence the free software movement was born to carry on the ideals of hacker ethic in a world of business and lawyers. In 1998 another strand of this movement emerged under the name open source which essentially bares the same values but without such strong ideological overtones. In one of his essays Stallman emphasizes that open source should not be considered a synonym for free software as the first can be combined with proprietary software.

With the computer industry becoming one of the driving economic forces of the western world and the Internet evolving into a mass medium it was clear that the original hacker ethics needed renewing. In the beginning of the 90s it was obvious that the last two points of the original hacker ethics were now common knowledge. It no longer surprised anybody that computers can change lives for the better and they can also be used for artistic purposes. Subsequently the focus of hacker culture shifted more on the first ethical points regarding information freedom and decentralization.

Eric Raymond, one of the founders of the open source movement has formulated his own view of the hacker ethic as "the belief that information-sharing is a powerful positive good, and that it is an ethical duty of hackers to share their expertise by writing open-source code and facilitating access to information and to computing resources wherever possible". Raymond believes that security breaching is ethically acceptable if it is only done for exploration and as long as no theft, vandalism or breach of confidentiality is committed.

Steve Mizrach research paper titled “Is there a hacker ethic for the 90s hackers?” also concludes that sharing and communication with peers is among the most important ethical principals for the new generation of hackers along with fighting cyber-tyranny. Mizrach also notes that the new hacker ethic honors the protection of privacy and “Above all else, do no harm” but at the same time it shares Raymond’s views regarding security breaking in the name of exploration.

In his book titled “Rebel Code” Glyn Moody writes about the free software and open source revolution and gives a more general view of the development of hacker values at the end of the 20th century (Moody 2001). Sharing and community freedom are key concepts in the new hacker ethic as information should be free and benefit the whole of mankind. Moody expresses the view that the success of Linus Torvalds’ open-source operating system GNU/Linux is in many ways credited to hackers and the open-source community (Moody 2001, 56).

Eric Raymond reaffirms this view in his book “Open Sources” by stating that during the end of the 20th century the central activities of hackers became GNU/Linux development and Internet mainstreaming. Raymond believes that along with the spread of the Internet the hacker culture will gain more momentum in the mainstream and possibly even enter political ideology.

To some extent we are already seeing this happening in Sweden with the formation of a political party called the “Pirate Party”. The party wants to reform intellectual property laws in order to give people free access to information as required by the hacker ethic. During their short period of existence (less than 2 years) the political party has gained strong support in Sweden (over 9600 members and 34,918 voters in 2006 Swedish general elections – Wiki source) and the idea has spread around the world with similar parties cropping up in over 10 other countries as well.

It’s clear that the hacker culture is here to stay and is gaining more momentum with every new computer that is connected to the Internet. In his paper titled “Democratizing software” Brent Jesiek analyzes the impact of hacker culture in software development and compares them with the ideas of Andrew Feenberg, a philosopher of technology who tends to promote socialist ideals over capitalism and individualism. Jesiek believes that the wider acceptance of the hacker culture combined with Freenberg’s commitment to democratization could be the future of software development and possibly one of the key values for future communities (Jesiek 2003).

Book references:

1. Levy, S. (1994) Hackers: Heroes of the Computer Revolution. Delta Books
2. Moody, G. (2001) Rebel Code: Linux and the Open Source Revolution, Perseus Books
3. Jesiek, B., (2003). "Democratizing software: Open source, the hacker ethic, and beyond" First First Monday, volume 8, number 10 (October)