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792 SIEGEL & SUCHENEK

Monopoly as a method of economic incentive, and by someone else; at the same time, other people can
also a means to provide a nurturing period of oper- have copyrights on their recordings of the same song.
ation without competition, has long existed in the So, if information and knowledge (not just an expres-
English legal system. English sovereigns have long sion thereof) can be traded, then there seems to be no
granted patents that gave exclusive right to a sin- good reason why software could not. In the existing
gle English company to trade with a specific foreign legal system, a patent is the only practical means of
country; the English East India Company is proba- protection that allows for trading the information and
bly the most famous example. knowledge carried by computer software. As much as
There is also a long history of people finding eco- it may lag behind the needs of the Information Age,
nomic value in information, whether in the form of patent law attempts to minimize the difficulty of cre-
military secrets, in the form of industrial trade secrets ating a market for software. The emergence of patent
(the Chinese worked very hard for hundreds of years law is likely to boost the supply of high-quality soft-
to keep their methods for the production of both silk ware and, thereby, provides a benefit to society.
and porcelain unknown to their buyers), and in other So, from the perspective of information theory,
forms. Merchants have for centuries voted with their it does not make much economic sense to end soft-
pocketbooks that information has true value. ware patents.
Some economists (for instance, Kenneth Arrow The economic perspective provides a means to
(12)) argue that information has become a com- counter some arguments articulated against soft-
modity that should be traded on a free market. They ware patents. A common argument in this category
tend to see patents as market instruments that make asserts that the inventor or creator of the software in
such trading practically possible and, therefore, have question is not deprived of its use or other benefits
a positive benefit to society. In order to sell a com- just because other people are using it. But such an
modity (say, for instance, a barrel of crude oil), the assertion is based on a fallacy that ignores the fact
seller has to have a monopoly (the exclusive right, if that the value of information depends not only on its
you will) on a particular instance of that commod- contents but also on a lack of knowledge of it by oth-
ity, for otherwise the prospective buyer will not have ers, including prospective buyers (in economics, this
a reason to pay him for it. With information, the subjective dependence is referred to as asymmetry).
trading becomes tricky: Unlike in the case of crude Let’s consider as an example a game of poker.
oil, once the seller has disclosed the information to Imagine yourself as a player. When you look at your
the prospective buyer, he loses the monopoly on it, poker hand, the information and the knowledge that
and, therefore, the potential buyer has no incentive you acquire this way has a very real monetary value
to pay for it. Moreover, the buyer may pass it for free to you. For instance, if you have a strong hand, you
to other prospective buyers, thus depriving the seller may bet high; if, however, your hand is weak, you
from the proceeds of future sales of the information may consider folding, thus avoiding almost certain
in question. financial loss. You could not make a rational choice
Despite this difficulty, we believe that this view of between the two actions if you did not know what
information as a commodity sheds light on the soft- your poker hand contained.
ware patenting controversy. Now, suppose one of players wants to see your
The code of computer software certainly car- hand for his obvious benefit. He can call, a move
ries information (some would say knowledge): which requires him to risk money that may end up
what decisions and what actions and in what order in your pocket (if it turns out that you have the stron-
those decisions and actions must be made in order gest hand). It is as if he offered you a patent (copyright
to accomplish the desired computational result. would not accomplish the same thing, as a simple
Copyright protects a particular expression of that rearrangement of cards in your hand would become
information but not necessarily its contents or the a different expression of the same information) for
underlying knowledge, One can use a copyright to your poker hand. You may consider whether the
protect your recording of a song that was composed value that he offers you this way is enough to show