Does a seeming lack of strong protection for IP discourage innovation?

Question

The Patent system works on the premise that the community benefits from the information shared, and rewards the innovators by granting them a period to capitalize on it without others grabbing a free ride.

Most of the FLOSS and FSF licenses preclude many of the most lucrative ways to monetize a creative idea. So, although the strong copyright protections remain, you effectively grant very broad rights to use your product. This includes the right for others to make money from it.

Does the open-source/free-software approach to sharing ideas and creations impede innovation by removing much of the financial incentive?

Answer 1

I don't believe that either the free or the open source approach to software or to anything else has any detrimental effect on innovation.

Some people innovate motivated by financial gain. Other people innovate with motives other than financial. The patent system and the copyright system provide the financial gain for those people who are motivated by it, leading to innovation. Free and open source projects provide a way for people who are not financially motivated to innovate collaboratively and hence more than they could individually. The copyright system provides the legal protection for free and open source licences.

At present, strong intellectual property protection is supporting both types of innovation (financially motivated and non-financially motivated).

Grey areas

Of course, the situation is not this simple, and many people work on proprietary projects for reasons other than financial, and many people working in free and open source projects have at least some financial incentive (whether direct or indirect). However, the point stands - both types of innovation and all the grey areas in between are protected by intellectual property law.

This doesn't necessarily mean that current intellectual property law is the best way of doing things, or that it provides the most innovative environment, but until it is improved it does provide strong motivation for innovation, for both types of motive.

Answer 2

There is a wrong premise in your question: That open-source cannot offer monetary incentives. If you do it right, money can be made. That's the reason why a lot of companies are making money with or around open source projects: RedHat, Canonical, Google, IBM or Sun (now Oracle).

Another premise is unproved: That monetary incentives even benefit innovation. I have no data in either direction.

Track record:

But we can take a look at how much innovation comes from Open Source. Many basic functions of Internet or modern Operating Systems came from BSD. The X-Window-System was a MIT-project. The UMN Mapserver shaping modern GIS-systems is and was open source. The Apache Webserver was involved creating the modern internet. OpenSSH was an important driver of modern security standards.

So overall I would say that Open Source is not less innovative than proprietary development.

Answer 3

The open source approach does discourage some kinds of innovation but at the same time, it encourages other kinds of innovation.

The pure commercial approach is to work on something by yourself, or in a group of people that you pay. You then sell what you created to your customers, but you try to make sure others can't duplicate your process. (In the case of software, that means closed source, patents and proprietary formats.)

The pure open approach is to collaborate on something with a large group of other people (of varying degrees of engagement) and to make sure anyone can help in whatever way they wish. (In the case of software this means open source, open development and open standards.)

This means that the pure commercial approach is highly centralized, while the pure open approach is highly decentralized. Both lead to innovation, but that innovation is achieved in different ways and for different reasons.

There is also a lot of ground between the two extremes. For example, a mostly commercial-focused company can base their products on open standards. And a mostly open company can keep some of their code closed, or they may not be open to outside contributions.