[ExI] Copyrights and patents in charities

Bryan Bishop kanzure at gmail.com
Sat Mar 12 01:43:34 UTC 2011


An Open Letter to All Grantmakers and Donors On Copyright And Patent Policy
In a Post-Scarcity Society *Contents*
* executive summary<http://www.pdfernhout.net/open-letter-to-grantmakers-and-donors-on-copyright-policy.html#executive_summary>
* introduction to the
* post-scarcity information economics and
* how copyright ownership corrupts the non-profit
* is it "self-dealing" to exchange public property for
* how new alternatives can
* why "new" alternatives need to
* examples of fine-grained cooperation in
* how things go wrong with current
* the tragedy of the New Alchemy
* proprietary vs. free content producer
* digital public works are not physical public
* patents, blueprints, and journal articles are "leftovers"
* the cycle of failure<http://www.pdfernhout.net/open-letter-to-grantmakers-and-donors-on-copyright-policy.html#the_cycle_of_failure>
* encouraging successful
* what about special case like drug
* please keep charitable content free; ask peers to do

 An Open Letter to All Grantmakers and Donors On Copyright And Patent Policy
In a Post-Scarcity Society

executive summary

Foundations, other grantmaking agencies handling public tax-exempt dollars,
and charitable donors need to consider the implications for their
grantmaking or donation policies if they use a now obsolete charitable model
of subsidizing proprietary publishing and proprietary research. In order to
improve the effectiveness and collaborativeness of the non-profit sector
overall, it is suggested these grantmaking organizations and donors move to
requiring grantees to make any resulting copyrighted digital materials
freely available on the internet, including free licenses granting the right
for others to make and redistribute new derivative works without further
permission. It is also suggested patents resulting from charitably
subsidized research research also be made freely available for general use.
The alternative of allowing charitable dollars to result in proprietary
copyrights and proprietary patents is corrupting the non-profit sector as it
results in a conflict of interest between a non-profit's primary mission of
helping humanity through freely sharing knowledge (made possible at little
cost by the internet) and a desire to maximize short term revenues through
charging licensing fees for access to patents and copyrights. In essence,
with the change of publishing and communication economics made possible by
the wide spread use of the internet, tax-exempt non-profits have become,
perhaps unwittingly, caught up in a new form of "self-dealing", and it is up
to donors and grantmakers (and eventually lawmakers) to prevent this by
requiring free licensing of results as a condition of their grants and

introduction to the problem

Consider this license fragment from a foundation supported (PRI) project
from 1993: "You will not modify, publish, distribute, transmit, participate
in the transfer or sale, create derivative works, or in any way exploit, any
of the content, in whole or in part, found on the Service."

The non-profit collaborative communications ecosystem is polluted with
endless anti-collaborative restrictive terms of use for charitably funded
materials (both content and software) produced by a wide range of public
organizations. These restrictions are in effect acting like
"no trespassing -- toxic waste -- keep out -- this means you" signs by
prohibiting making new derived works directly from pre-existing digital
public works. The justification is usually that tight control of copyright
and restricting communications of those materials will produce income for
the non-profit, and while this is sometimes true, the cost to society in the
internet age in terms of limiting cooperation is high, and in fact, I would
argue, too high.

Unfortunately, the situation is even worse than that, because even without a
copyright notice or license, the default under the law
is now that all works are copyrighted upon creation. So basically everything
on the internet put up by non-profits without an explicit license granting
permission to use, communicate, and/or make derivative works also has an
invisible implicit "no trespassing" sign on it as well.

Perhaps allowing content producing 501(c)3 non-profits to tightly control
their copyrights made sense in the past. Driven by cuts in much non-profit
funding in the 1980s and early 1990s, many non-profits moved to funding
models requiring more entrepreneurship. For many non-profits, that has meant
selling copyrighted materials, and they effectively became no different than
commercial publishers -- except for receiving a charitable subsidy that
perhaps allows break-even cost production for smaller audiences otherwise
underserved by the the mainstream for-profit press. Acting as subsidized
presses has been an important mission for non-profits, and both my wife and
I have helped with it. We assisted NOFA-NJ in producing two versions of the
New Jersey Organic Market Directory -- which was subsidized by among others
the Geraldine R. Dodge Foundation.

But, I would argue, it no longer makes sense to enable non-profits to
function mainly as subsidized publishers operating in an otherwise
conventional for-profit way through selling copyrighted material. Assuming
subsidized publishing made sense at some point, what has changed recently?
Widespread internet use is one obvious thing. In general, the bigger picture
is that a more cooperative "post-scarcity"
economy is emerging.
This post-scarcity economy is made possible by such things as:
* the exponential growth of technological capacity (including the
* increasingly widespread knowledge, and
* new ways of collaborating pioneered by free software and open source

post-scarcity information economics and non-profits

Even in a "post-scarcity" or "gift" economy, some things remain scarce, like
human attention or trust. This new economy is driven in part by peer status,
which does have indirect physical, economic, and other benefits.
James P. Hogan wrote a novel "Voyage from Yesteryear" around 1982 on a
similar premise describing a gift economy governed by status:

Nowhere is a post-scarcity economy more visible today than with content on
the internet. However, does the funding plan for most digital public works
made by non-profits incorporate a post-scarcity perspective?

There are a lot of non-profit projects being funded out there (especially
educational and digital library ones) which have a component of attempting
to charge for access to the results of charitably funded work as part of
their business plan. Some completely restrict access (and redistribution) to
a local paying community. In fact, most government funding agencies and
foundations encourage such restrictions, on the (often flawed) assumption
that such restrictions will make the project self-sustaining financially.
Rather than single out another example, let me point as a contrast to a
and an organization it funds:
that are both doing a great job at enlarging the public domain as opposed to
shrinking it.

An outdated scarcity perspective in the non-profit community is still
manifesting itself, however. There remains a continued emphasis on
charitable projects which include plans for restricting access to the
resulting publicly funded digital works now, in the hopes of creating
revenue streams later. The funded organization usually proposes continuing
to improve the work itself under its solitary control using money derived
from selling licenses to the work. Contrast this with, for example, the
post-scarcity development of the GNU/Linux operating system, made by
thousands of volunteers contributing improvements to an initial base
contributed by Linus Torvalds and the Free Software Foundation (FSF) GNU

The old scarcity criterion towards selecting what makes a viable project
(based on a recurring royalty stream for static content) is completely at
odds with the new post-scarcity model (based more on streams of attention,
status, service, and customization). The new collaborative development
process made possible by the internet (resulting in a work made by sharing
licenses to copyrights made by a distributed network of authors funded
indirectly by other means) is fundamentally different than the old process
(resulting in a work made by centralized copyright ownership with a
development process funded by selling licenses to the result).

how copyright ownership corrupts the non-profit mission

One problem with the current approach is that non-profits who are paid to
create proprietary content and then sell access to it are unfairly competing
with for-profit companies who do the same thing. While there may always be
an issue with how contributions to the public domain affect other peoples
proprietary profit-making plans, conflicts between for-profit and non-profit
work might be greatly lessened if all non-profit content development work
was put in the public domain or under some sort of free license (copylefted
or not),
so everyone, for-profit and non-profit alike, could build on it in some way.
This would mean there would be no situation where a non-profit, having
developed some copyrighted or patented system, could use it to gain unfair
advantage over a for-profit entity, because the for-profit company could
always build on and extend the non-profit's work. Such policies might help
foster a related worldwide culture of benevolence, cooperation, and sharing
in non-profits might also improve things among an increasingly competitive
non-profit culture shift, because free access to each others copyrights and
patents might in turn do more to promote an attitude of friendly competition
in non-profit staff instead of combat over what might seem at first to be
finite resources.

This is more than anything a plea to think about how the tightly controlled
ownership of copyrights can be corrupting people and organizations in the
non-profit world -- because we have seen that first hand to our dismay.
Please think deeply about the difference between
"free" content and "subsidized" content. There is a world of difference in
terms of making derived works, since free content can be given away with
permission to make derived works, whereas subsidized content can't.

Similarly, the common notion of "matching funds" breaks down when applied to
whether a product is free (as in the French "libre" sense [think free
speech], not necessarily "gratuit" sense [think free beer])
Since half the match needs to come from selling licenses to the work, this
means derived works can't be easily allowed. Problems also arise when a
developer matches free funds with a free license to a proprietary underlying
platform, because the combination can then never be free in the sense of
allowing derived works.

In both cases, the "free" funds from charity are contaminated by the
"proprietary" contribution and the result is essentially proprietary (even
when the price of the result is $0). It might be much better to have half as
many truly free projects as opposed to twice as many proprietary ones,
because everyone could potentially benefit from building on the free
projects, so their value each might be (arbitrarily) ten to one hundred
times that of proprietary ones.

is it "self-dealing" to exchange public property for salary?

Consider this way of looking at the situation. A 501(c)3 non-profit creates
a digital work which is potentially of great value to the public and of
great value to others who would build on that product. They could put it on
the internet at basically zero cost and let everyone have it effectively for
free. Or instead, they could restrict access to that work to create an
artificial scarcity by requiring people to pay for licenses before accessing
the content or making derived works.

If they do the latter and require money for access, the non-profit can
perhaps create revenue to pay the employees of the non-profit. But since the
staff probably participate in the decision making about such licensing
(granted, under a board who may be all volunteer), isn't that latter choice
still in a way really a form of "self-dealing" -- taking public property
(the content) and using it for private gain? From that point of view,
perhaps restricting access is not even legal?

Self-dealing might be clearer if the non-profit just got a grant, made the
product, and then directly sold the work for a million dollars to Microsoft
and put the money directly in the staff's pockets (who are also sometimes
board members). Certainly if it was a piece of land being sold such a
transaction might put people in jail. But because the content or software
sales are small and generally to their mission's audience they are somehow
deemed OK. To be clear, I am not concerned that the developers get paid well
for their work and based on technical accomplishments. What I am concerned
about is the way that the proprietary process happens such that the public
(including me) never gets full access to the results of the publicly funded
work (other than perhaps a few publications without substantial source).

I've restricted this to talking about copyrights, but patents only make this
situation worse. Right now, a patent on MP3 technology held by a non-profit
(the Fraunhofer-Gesellschaft, commissioned and funded by the Federal and
L�nder governments)
is causing distress to free software developers, and their response is to
invent a new audio encoding system.
(My response to similar distress could be seen as this effort to reinvent
the non-profit sector entirely. :-)

This example is from Germany, but one could find similar examples in the
United States. Likewise, Germany has many outstanding developers of free and
open software,
    "Germany Leads In Open-Source Development"
so this situation reflects internal conflicts in German society as well.

I admit this self-dealing analogy may sound at first far fetched, but
perhaps that is another sign of how bad the situation has become as old
economic models of paper-based content distribution break down in the
internet age.

Note: this is not to argue non-profits should not be able to assert
"moral rights" or "privacy rights" over various types of content they
produce as the situation applies. For example an artist collective might not
want their digital paintings modified (even if they can be freely
redistributed), or clients at a clinic might not want their digital records
made publicly available. Both are digital works, but in one case
"moral rights" may apply, and in the other "privacy rights" may apply. There
will undoubtedly be gray areas as works fall between categories (e.g. a work
of art telling how to do something).

how new alternatives can work

Assuming people need to make a living, how can people who deal in public
domain works get paid? One may object that such a "new" scheme of sharing
non-proprietary knowledge created by charitable means can never work
economically. However, there are perfectly capitalistic examples where it
has worked already.

The "new" model of making money with public domain content is actually an
old one related to guilds. Doctors and lawyers both make excellent livings
working with a large body of public domain knowledge, interpreting it,
customizing it, and applying it to client's specific situations. Both
doctors and lawyers create new knowledge that is effectively put into the
public domain in the form of medical journal articles or court proceedings.
While the average person can be their own doctor or lawyer to an extent,
there is so much to know including certain ways of reasoning that in
practice one is usually better off getting some assistance from a
professional (as well as getting some self-education to work well with that
professional) than trying to go it alone.

Many times grants help researchers create more information for the medical
or legal public domain. But those grants don't corrupt the process, because
the results are essentially available to all practitioners on an equal

There are some medical grants that produce drug or plant patents that
probably are corrupting, but that is another issue. Patents are an example
when science (which thrives on reference chains of journal articles) crosses
over into technology (which thrives on incrementally improved artifacts --
and artifacts can be copyrighted or patented to prevent others from using
them for a time).

To help a lawyer to understand free or open source software for example,
just ask her or him to think about it in terms of the law itself -- from
court proceedings to legislative records. While lawyers may pay for a
service like Westlaw for convenience or practical necessity,
they are not paying to use the law itself, say when they make an argument in

Surely nobody would suggest the world was better off in the days of
18th-century England when a medical student had to crawl on top of a roof
and look in from a skylight to find out the proprietary technique used by
one group of secretive obstetricians to have a lower rate of infant and
maternal mortality than their competitors:

Yet, in some ways, are drug patents or other medical technology patents
really that much different than simply hiding the information to those with
no choice about needing the drug and can't afford it (such as in developing
nations with AIDS epidemics)? And if the answer is that they are different
things, still, should charitable or tax dollars be subsidizing proprietary
techniques, even for limited times? And as a deeper issue, as copyrights are
effectively extended indefinitely, and as technology moves increasingly
faster and faster, rendering even twenty years and eternity of many
generations of technical development, any sense of a public bargain that
copyrights and patents someday become public domain in a *useful* way, is
starting to break down. Granted, that is an issue that goes beyond the one
of purely charitably funded works, but it still is an issue charitable
donors should consider.

This guild-like process has already started with public software such as
GNU/Linux. Competent GNU/Linux system configuration experts are now in high
demand and can get good wages for dealing in purely free software. One of
the things that helps prove competence in this "guild" is having contributed
to the GNU/Linux kernel.

[Note that historically guilds often kept their methods secret from
outsiders; I'm not advocating that here.]

why "new" alternatives need to work

How different is the basic issue in the secretive obstetricians example
above from when publicly funded non-profits put "no trespassing" signs
around their copyrighted works, preventing anyone else from improving on
them, or benefiting from them without paying a toll to the non-profit

Toll collecting imposes other external costs. Once I heard a collision
happen between a few cars two lanes over while driving at the Whitestone
bridge's toll plaza -- another hidden cost of tolls. People could have died,
say if an airbag killed a child improperly secured in a front seat.
Likewise, I had my license plate scanned and checked as I paid a toll
leaving an airport parking field (according to the automated display),
resulting in an extra "privacy" toll not recorded on the receipt.

The tolls imposed by non-profits for licensing their copyrights can have
similar negative external costs. Such tolls can contribute to causing people
in developing nations to die because of lack of access to how-to information
on agriculture. Such tolls can also contribute to creating a closed
bureaucratic Orwellian society without privacy where every viewing of
information is monitored so it can be billed (consider Acrobat Reader 5
which includes technology to scan your computer and communicate the results
across the internet -- pick "Edit | DocBox | Preferences" to see the
InterTrust warning and license). As mentioned earlier, such restrictions can
also (through temptation) create criminals where none might have existed.

Frankly, if the non-profit world of copyright creation cannot provide a
model by slowly moving to a post-scarcity economic structure, when such
creation is already funded in large part by charity, how can the for-profit
world survive the transition without complete and painful chaos?

Naturally, many non-profits like soup kitchens or Habitat for Humanity are
already working on a service basis, and if they collect fees for services
rendered, I'm not against that. I'm talking specifically about copyright and
patent work here.

examples of fine-grained cooperation in action

How could post-scarcity economics be reflected in new ways of doing things
by the non-profit sector?

The current growth level of the internet makes possible fine-grained
voluntary collaboration on an unprecedented scale to cooperatively develop
enormous creative works, exemplified by these three collaboratively
developed sites:

In a sense, these sites are promoting a concept which in biology is called
"stigmergy". An example is how African termites build large mounds -- by
getting excited at the partial structures other termites have made and
adding to them, which gets even more termites excited in new ways.
Essentially, these web sites are "artifact coordinated cooperation". Without
some form of a free license, this form of advanced cooperation can not take
place among peer, because there is neither free access to the artifact or
legal permission to change it in any way to make a new derived work.

Post-scarcity collaboration has also long been shown by many of the internet
newsgroups, which include discussions and information on most topics of
human interest, somewhat archived and indexed here:
At this point, I rely on these newsgroups to do a good job as a software
developer when starting a new project with new technology. My technical
questions are almost always asked and answered already.

In short, non-profits could work together to create in total a continually
improving distributed library of free digital public works covering all
human needs. This would be a very different side of the internet than the
one full of tolls and restrictions that many for-profit interests are
working towards.

For a hint of what this might someday become, read Theodore Sturgeon's short
story written in the 1950s entitled "The Skills of Xanadu". That story
helped inspire our (hibernating) OSCOMAK project:
and a related "moral license" concept:

how things go wrong with current practice

However, most non-profit organizations dealing with "know-what",
"know-how", or "know-why" content (i.e. science, technology, and
art/philosophy) still follow the common practice of supporting their
continued existence as they transition to the internet age by attempting to
make money directly selling digital public works funded by grants, the same
way they used to sell text books, blueprints, or art prints.

This model of fund raising has some serious negative consequences. The main
one revolves around preventing collaboration by preventing easily making
derived works. There are more subtle moral and ethical implications as well,
which Richard Stallman points out, as the age old civic duty of sharing with
a neighbor is made immoral and illegal (and repositioned linguistically as
Naturally, promoting sharing still needs to balance both "moral rights"
of authors getting credit for their works or controlling some aspects of the
presentation or alteration of aesthetic or opinion works (as opposed to
functional ones), and "privacy rights" related to personal information. For
more on these distinctions, see for example:

Given the ease of free content distribution on the internet, to make money
from content, organizations must create an artificial scarcity of their
content (including text and software). This entails using copyright to
impose restrictions preventing anyone from making copies of their content,
so people will pay for licenses to use their content. Since derived works
are also copies in a way, organizations must also prevent others from making
derived works.

This derived-works restriction in turns prevents cooperation through others
easily building on the works. In theory, money changing hands will let
things continue to happen, and sublicensing of content for derived works
does happen to an extent in the commercial world. However, even if a
non-profit organization is willing to license their works to others for a
fee for making derived works, this entails royalty payments, carefully
evaluating complex binding legal contracts, and other arrangements whose
initial cost to set up and operate generally exceed any expected revenue of
most subsequent charitable projects, and, further, force all derived works
to be handled as commercial, not gift, transactions.

Essentially, instead of having permanent lasting benefits, the initial
charitable investment made by some foundation or government agency into
supporting a non-profit organization's content creation process just
devalues over time as the content becomes obsolete or is forgotten by the
very organization that created it -- since no one else with an interest in
the work can maintain it.

The ironic thing is that most non-profits will probably fail to make enough
money from selling their content to even justify the expenses of doing so,
so the loss to humanity is for nothing more than a funding fantasy.

the tragedy of the New Alchemy Institute

Yet, there are millions of individuals on the internet who might continue to
improve content developed initially by non-profits, if these individuals
only had the right to do so (rights that can only be granted by the
copyright holder).

For example, I have a large selection of publications created by the New
Alchemy Institute on things like compost pile management, indoor fish
farming, and geodesic dome greenhouse construction. I paid for those copies
both for the information and to help support the institute. The New Alchemy
Institute is now defunct. I have no right under copyright law to put these
materials on a web site or to improve them , as much as I would like to do
so (until about 100 years from now). Quite possibly obtaining such rights
might cost more in time and money than creating such materials from scratch
or completely rewriting them. Even if I got permission from someone
previously affiliated with the New Alchemy Institute or its successors to do
something with the materials, how could I be sure their information was
accurate and their permission meaningful and legally binding? Sadly, decades
of innovative and alternative non-profit R&D work done by dedicated and
hardworking people at NAI is effectively lost as far as the internet
audience is concerned. And that means, that R&D work is effectively lost to
everyone in the world as the internet continues to supplant other forms of
content distribution and use (like using inter-library loan).

In the past, when most information was sold on paper and was difficult to
modify, perhaps it made sense for non-profits to raise funds by selling
documents (as when I purchased the New Alchemy Institute materials). But
now, this old habit based on an out-dated paradigm is preventing cooperation
and collaboration to create the informational underpinnings of a
post-scarcity society demonstrating knowledge democratization.

For me, the deepest tragedy of the New Alchemy Institute is somewhat
personal. I visited NAI around 1989 and later gave an invited talk there to
some interns, while a graduate student at Princeton. I wanted to make a
library on sustainable technology and related simulations, and NAI had an
extensive library on such topics and an interested member base and even some
Macintosh computers. But we never connected -- in part because I was too shy
and couldn't think of something coherent and fair to propose as a way out of
my boxes of being a PhD graduate student and thinking in terms of a
for-profit company selling proprietary software requiring a substantial
investment, and out of their boxes of being mainly an agricultural
technology R&D facility, selling products and papers via their catalogue,
and giving interns room and board for doing manual labor. I was very
saddened by the newsletter announcing their demise around 1991, because I
felt that working together on a digital library of alternative technology we
might have prevented that. [And ironically Richard Stallman with his Free
Software vision in Cambridge was only about seventy-five miles away from

For reference, all the NAI publications themselves are supposedly available
through inter-library loan at the American Archives of Agriculture (AAA),
located at Iowa State University. The library itself became part of a "Green
Center" at the same location, but I am not sure if that is still in
operation, and in any case NAI would have no way to grant permissions for
putting any works but its own on-line. Such works would ultimately have to
be rewritten from multiple sources to be put on-line, a project probably
worth doing, but something that would take far more effort than putting
on-line what exists.

proprietary vs. free content producer example

How can we prevent such tragedies from happening again and again, even for
internet-connected non-profits? One possibility is simply for non-profits
from the start to put their creative works under licenses allowing
redistribution and the making of derived works. As a corollary, they must
then obtain their funding from ways other than selling licenses to use
copyrighted works. They can still sell permission to access an archive, as
long as the works including the entire archive are freely redistributable
once accessed.

Contrast, for example, this proprietary work of hundreds of appropriate
technology publications sold as micro-fiche or CD-ROM which is still pretty
much as it was ten years ago:
    "The Appropriate Technology Library"
with this blossoming free library to aid developing nations which is
available directly over the web:
    "The Humanity Libraries Project"
Which one has more of a future given the internet? Which one could continue
be improved if the supporting organization were to suddenly become defunct?
Which organization and development process is then really the lower risk
"investment" for a foundation grant?

The Humanity Libraries Project is the exception to the rule. The
difficulties they face and the solutions they see to them (for example,
starting a petition just to get the UN to freely license its content so
people who need it can get it) just show how bad the situation has gotten
and how ingrained the old habits are. Their petition idea helped inspire
this essay on enlarging the issue to being about the copyrights of all
non-profits, no just the UN and directly related NGOs.

Copyright for most government funded work goes to the for-profit contractor,
who usually just sits on the work because it is more expensive and risky to
market a copyright than to get another government contract. Copyright for
most foundation supported work goes to the non-profit, who also usually just
sits on the work or makes only token efforts at marketing because it is more
expensive and risky to market a copyright than to get another foundation
grant. Perhaps an occasional exception is museums who show in-house created
digital works until they become obsolete in a restricted setting (generally
entered only after the patron pays a general admission fee).

In some ways, the state of non-profit copyright ownership and licensing is
so bad we don't even notice the issue anymore.

digital public works are not physical public works

The fundamentally flawed concept is that digital public works are like
physical public works. When one creates a physical public work like a
bridge, it may make sense to charge a toll to pay for its construction or
upkeep -- although even that is questionable, see for example:

This physical public works paradigm is unfortunately then applied to
thinking about most digital public works, and there is a major flaw in the
analogy. A bridge does not require much marketing. It's highly visible by
the nature of what it is and how it is built. Things are different in the
content and software realm. Marketing costs for any commercially successful
software product are typically ten times that of creation costs. Many well
funded marketing efforts fail. So, almost all projects funded by foundations
with an intent to be marketed later using other funds will fail because the
funds won't materialize. Likewise, because the costs of production are small
relative to marketing, there is usually little value in other's licensing
the works (at typically inflated fees) as opposed to just making new ones
since the marketing costs are the dominating factor.

Word-of-mouth marketing strategies can lower marketing costs, but it may
increase support costs, and it also often takes years. This is far beyond
the funding horizon of most non-profits with paid staff. Freely distributed
collaborative efforts like GNU/Linux may survive long enough for
word-of-mouth to help them -- but that requires a different approach to

patents, blueprints, and journal articles are "leftovers" today===

Plenty of public money is being spent -- it just is not connecting to the
community as digital public works. This failure to connect is also in part
because of another notion -- that patents and scientific journal articles as
funding "leftovers" are sufficient detail to support a free technological

For an example of why this doesn't work, researchers at NASA just discovered
NASA doesn't have the rights to the 3D CAD models of the International Space
Station or the Space Shuttle. They had wanted to make a virtual reality
model of those for further research and development of ergonomic design.
Such plans are now on hold until new arrangements can be worked out with the

Funding organizations need to break out of the mindset that the organization
doing the work to create something (in this case a NASA contractor) should
necessarily be the one to shepherd that work in the future, and that in
order to shepherd the work, their exclusive ownership of most of the aspects
of the work is justified. Both these premises are flawed in the internet
age. One group can create something under a free license and another group
can extend it if they have the interest. A group who initially creates
something under a free license can shepherd a process involving members of
the public contributing under similar free licenses.

There is a real question here of how our society will proceed -- mainly
closed or mainly open. It is reflected in everything the non-profit world
does -- including the myths it lives by. The choice of myth can be made in
part by the funding policies set by foundations and government agencies. The
myth that funders may be living by is the scarcity economics myth. How does
that myth effect the digital public works funding cycle?

the cycle of failure

Essentially, most digital public works funded by the government or
foundations follow this process:
* public money is paid to some organization to develop some seemingly
useful digital work either as a "prototype" or as a "product",
* the contractor argues it is important to create an artificial scarcity
for the work through copyright to ensure future support of new versions of
the work by the contractor without the need for future grants,
* without marketing, which is almost always more expensive than expected
(everyone hopes word-of-mouth will be enough for an overnight success), the
work fails to attract enough interest to justify continued distribution and
minimal support costs,
* the work is quickly outdated given limited original investment in it
and rapidly changing platforms and needs, plus the PI wants to move onto
other things, and so,
* the cycle repeats, since an organization that has learned how to get
one grant probably knows better than anything else how to get another.

Very rarely, the project is a "success" in the sense of being able to become
self sustaining economically after generally a large number of funding
cycles. At that point, the idea is "commercialized" often by the private
sector and often someone makes a lot of money. Essentially, a lottery ticket
has paid off -- for one group out of hundreds or thousands.

To an extent, the logic behind all this is similar to when the US Forest
service puts in $100 of logging roads for $1 in logging fees, because
supposedly cheap access to timber will promote the US economy and welfare of
US citizens (even if the timber gets sold to Japan).

In the forest example, it is the public wilderness and those who would enjoy
it spiritually or physically who suffer. In the non-profit example, it is
the public domain of copyright that suffers, and likely also public privacy
and public safety. However, the same logic could be applied to the results
of creating a directory of organic food suppliers or a book about how to
achieve world peace. Restricting access to all of them is a result of the
same scarcity mythology, and the exponential growth of technology requires a
new funding mythos.

encouraging successful collaboration

To break that cycle, what needs to be done?

The mythology of funding needs to shift to fostering the creation of free
works of public value. There needs to be a faith that such works if they are
of value will eventually attract further support (from public or private

How can that new mythology be implemented on a practical basis? Here are
some ideas: 1. Support free content creation processes more than specific
products. 2. Support people and organizations participating in those
processes, either those making free content or those shepherding free
processes. 3. Don't encourage organizations to become self supporting by
selling licenses for copyrights or patents. Suggest instead they sell
services, customization, or memberships if they want to become
self-supporting -- but such things are hard to do so don't insist on them.
4. Reward with more grants people and organizations who actually make
important free content (however that is judged).

It is very hard to make effective grants, no matter how knowledgeable,
hardworking, and dedicated the foundation staff and board is. Michael
Phillips talks about this in the book "The Seven Laws of Money" based on his
experience on the board of the Point Foundation. So obviously, this is all
easier said than done. Actually, Michael Phillips argues in practice it is
impossible to give successful external grants, but perhaps this new funding
mythology of supporting free content may change the granting landscape
enough that some external grants will produce good things, since at some
point grant applicants could be judged on a portfolio of previously
developed free content in addition to perceived public value for proposed
new efforts.

what about special case like drug research?

One can make a point on the issue of exclusive rights as far as attracting
additional investment to get something so it is generally acceptable for
widespread use. In the case of new drugs, it may take hundreds of millions
of dollars in investment in clinical studies beyond a drugs initial
invention. Still, would it really ever be the case that if all drug research
was done in the public domain our society could never under any circumstance
find a way to put into production new drugs, even if it meant making some
changes to how drugs are tested or produced? The private sector should IMHO
provide value added to the public domain, and if it can't, the situation
needs to be rethought. Clearly with trillions of dollars a year spent on
health care, there is a huge incentive for insurance companies and the
government (Medicare/Medicaid) to fund the creation of effective drugs to
reduce other long term care costs, even at half a billion a drug.

>From what little I understand of the drug industry, most drug research by
drug companies is actually to make "me too" clones of existing drugs (with
the original novel drugs typically derived from government funded research
and studies and signed over cheaply to drug companies), so drug companies
are one of the worst examples of dysfunctional public/private sector
investment patterns. Additionally, drug companies generally don't invest in
research on drugs of great value to large numbers of people (e.g. river
blindness or malaria) if they don't see as much profit in it as the next
version of something already popular (and not really needed as much if at

One approach is to disconnect drug manufacturing and sales from drug
research and drug testing. Why should the two go together? Certainly after a
drug patent expires, I can still buy Aspirin or other generic drugs, and
drug vendors can compete on price, availability, packaging, and quality. So
if research and studies were done purely using public funds then there
wouldn't be this issue. Granted, if FDA approval is excessively costly for
novel drugs, ways should be considered to streamline it without compromising
safety excessively. In general, the future prospect is for "designer drugs"
targeted to individuals' biochemistries in the future (perhaps based on
genetic and other individual based testing), so this whole expensive drug
approval process is going to have to be rethought anyway.

please keep charitable content free; ask peers to do likewise

In conclusion, please, please look seriously at the copyright policies of
individuals and organizations you do fund. Please insist all the creative
work you fund is communicated to the public under free or open licenses or
returned to the public domain.
And please encourage other peers in foundations and government agencies to
do likewise. That way, at least others can build on top of the efforts of
people you do fund. That would at least be a big improvement over the
current situation.

--Paul Fernhout

Copyright 2001-2004 Paul D. Fernhout License: Verbatim copying and
distribution of this entire email is permitted in any medium, provided this
notice is preserved. Note: I believe "fair use" of this work includes
copying of sections with attribution for the purpose of discussion.
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