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Software Piracy and IP Management: Strategic Responses to Imitation (ssrn.com)
376 points by azalemeth 52 days ago | hide | past | favorite | 122 comments



“We conclude that piracy and similar competitive shocks push firms to innovate to stay ahead of imitator products, and that this effect is moderated by their existing patent portfolios.”

I guess it’s good to study that this is the case, but isn’t this exactly why companies fight piracy and attempt to patent and then enforce those patents? That is to reduce competition and make it easier to extract value from what they’ve produced?

Basically, isn’t the premise that if privacy was rampant and patents didn’t exist then more people and companies would be able to innovate on the technology without fear of a lawsuit? I think of how stagnant the Eink space is, and how much broader usage might that technology get if it wasn’t encumbered by patents (just one example)?

I guess I just don’t find this surprising.


"We conclude that piracy and similar competitive shocks push firms to innovate to stay ahead of imitator products,"

In the case of piracy, this seems like an odd statement. If I can pirate your software and make it widely available then you're innovating to stay ahead of yourself -- which I'll just immediately pirate when you release it.

How does me innovating quickly, help me stay ahead of people simply copying my product? Unless the innovation is around how to monetize my product, even in the face of piracy (e.g., ads, support, SaaS) -- in which case those things don't really imply that I need to innovate on the actual product itself.


I think a lot of it depends on the rate of piracy -- and also the circumstances under which it is done. I've met people in Denmark who genuinely pay attention to, and don't skip, youtube ads because they want their content creators to get more financial support. At the same time, at least one of these people has told me that they pirate software to try it, before buying it. They tend not to like DRM but will happily "give things a go".

It's not hard to imagine that a small percentage of piracy actively helps spread a product, and if you get 1000%-fold growth and your piracy rate goes from say, 1.5% to 5%, you've still massively won overall. If you're a person like my Danish friend, it's not hard to imagine that if anything the "try before you buy" piracy then means that products are evaluated more on their features, if anything increasing competition to innovate between market leaders in their segment.

The company only goes bankrupt if literally everyone pirates everything -- or, more likely, transitions into a FOSS-style support+ business model. (Which, IMO, is far more preferable than software-as-service)


I probably spent multiple thousand Euros on software that I had previously used dubious copies of.

My reasons:

- I could now afford it

- I earned money with it

- The new version of the software had some great feature that the old pirated version didn't have


Businesses and self employed people will usually pay for software. They can deduct it from their taxes anyway. Also it doesn't look very professional when you're using a cracked version of Photoshop at your presentation.


Also if individuals pirate your software and learn that then that’s the preferred let’s say image/video editing software when they work the company more the likely buy legal licenses for them


Specifically that article says that firms vulnerable to piracy file patents, copyright registrations and trademarks.

All of those are tracers for innovation because they're not supposed to give you any of those for something that isn't new, but they are really weapons one would use against pirates, imitators, competitors, etc.


I don't know what their explanation is, but one explanation would be that people frequently use piracy to try out and compare products. Later, once they have decided on the best product, some of them go legit. That's certainly how I used piracy in the past.

So the customers are way better informed with piracy, which forces companies to innovate more quickly to stay ahead. They can no longer rely on deceptive marketing practices and market dominance.


Free demos can fill this gap. Though IME it can feel overwhelming trying many at once so you don't have to pay before being fully informed. Professional reviews can help too, assuming ones needs aren't too niche.

All that said I can imagine some folks feel justified pirating them to reduce that trial expiration anxiety. Just beware that pirated copies or cracks can also contain Trojans.


You're trying to sell artificially scarce copies of something that is infinitely abundant. Change your business model. You're supposed to be getting paid before you create the data, not after.


I think you might be slightly out of touch with mainstream attitudes/beliefs about what the effects of software piracy are.

Personally, it is extremely common for me to find people who argue that piracy reduces innovation and discourages businesses from building new things. I don't have survey data on this, I'm just speaking anecdotally, but I suspect that's the prevailing view among most Americans. I'm not sure if that attitude is as prevalent in other countries.

There is a certain group of people where this will basically just confirm some of their priors and it won't be surprising at all. But there is another group of people who (I think sincerely) believe the opposite, and (keeping in mind that this is only one study) I do think it pushes back against their priors in a potentially interesting way.


Economists use number of patents as a measure of innovation, and my reading of the abstract was basically "piracy increases innovation where innovation = patents".

I think a more interesting study would compare software innovation in China vs the West. Anyone who remembers computer vision pre ~2013 will fondly remember that simple things like image descriptors and occupancy grids are patented. "Patent encumbered technology" was jargon. Thankfully a lot of the more egregious patents from the dotcom era are now expiring.


>image descriptors and occupancy grids

What can actually qualify for a patent in Software seems so unclear and variable. Did someone invent the concept of "Infinite Scroll" and just not file for IP protection so it gets used everywhere? Or is it copywrite of the actual code that delivers one Infinite Scroll embodiment in JavaScript_Flavor_1? Pirating software as in cracking a keygen of some whole branded Application is very different from launching a relabeled product clone with some reverse engineered feature parity. By some interpretations you literally can't implement a text box without infringing on IP. And I don't see a way, in advance, to figure out what patents overlap with your proposed innovation... you just appear to cross your fingers, file, wait for the examiner to pick a few citations out of a hat, and if you get past that rejection, then you launch said feature (if you haven't already) and review the take down notices case by case. The discovery process can definitely be improved but a lot of innovation takes place in spite of the as-is patent system; not as a result.


Eh this approach still exists at FANG companies, it seems like we stockpile patents to ensure that if we get sued by another FANG-level company it's mutually assured destruction.

The legal department at a startup I used to work at was pretty open about it.


> Eh this approach still exists at FANG companies, it seems like we stockpile patents to ensure that if we get sued by another FANG-level company it's mutually assured destruction.

> The legal department at a startup I used to work at was pretty open about it.

They also can be (and have been) used as a cudgel against smaller companies to force them to make a deal or even sell out to the patent holder:

> The blue suits did not even confer among themselves. They just sat there, stonelike. Finally, the chief suit responded. "OK," he said, "maybe you don't infringe these seven patents. But we have 10,000 U.S. patents. Do you really want us to go back to Armonk [IBM headquarters in New York] and find seven patents you do infringe? Or do you want to make this easy and just pay us $20 million?"

https://www.forbes.com/asap/2002/0624/044_print.html


It can also be lucrative if business wanes. Companies with near monopoly power already printing money regardless so they don't bother. But a lot of once-great companies turn to monetizing patents.

Some of the most successful patent trolls buy portfolios from companies that were actually engaged in the field at the time.


> piracy reduces innovation and discourages businesses from building new things

The power of intellectual property holder propaganda really is something to behold.

That's not just false, the opposite is true. Infringement helps create new industries and more competition. Check out this thread for historical examples:

https://news.ycombinator.com/item?id=28330810

Also, look at China. Intellectual property infringement is a huge part of the reason why it's so prosperous now. Wish my own country had the balls to do this.


Maybe I am out of touch. There is a different question and that’s if piracy is good. That’s a little harder to answer.

Piracy is potentially good for the overall market (free innovation, etc). Piracy is probably bad for the company/person who produced the good (ie they lose revenue and have to innovate themselves more to stay ahead of free).

The second has been debated at length, and I know I honestly don’t know the answer. I used to see a lot of arguments that piracy can be used as a means to get access to free training and lock-in with a specific product, but then when they go legitimate, they then acquire real licenses. But the producing company has to make it clear that if people don’t go legit, then they will get sued.

It’s kinda like the SaaS freemium -> enterprise license models some providers use.


As a complete remorseless pirate (as in, I download stuff but I never uploaded anything I purchase) and as someone whose software was pirated (causing me to go out of business, for that specific venture), I think piracy is bad purely because someone is infringing on a contract.

If customer A buys my software and accepts a contract which say not to redistribute, he can't go and break that contract unpunished. I should be able to legally persecute customer A, if I can prove a breach of contract happened. If someone is re-sharing that content or if they're downloading it, they never had a contract with me and they should be able to do what they please.

Sure, that's bad for me, but that's part of doing business. Eventually the price of things will go up to account for people pirating.

Also, if I'm selling so much of my software that I can't possibly trace and persecute all the users leaking my software, I think we should accept a certain amount of piracy and loss of revenue. Call it, a natural tax on my software being so successful.

Still, the government shouldn't be able to intrude on customer A privacy, internet providers shouldn't be compelled to release data on customer A. DMCA is absolute cancer and the proof that the government is not doing the people's interest but the interest of big media corporations.


This is a strange argument that I've heard repeated often: "repeal copyright and just treat it as an NDA". I personally would consider that worse than the status quo.

NDA-based copyright-like ownership has three different problems:

- If the group of people with the software is large - like most mass-market works - enforcing the NDA will be absolutely impossible. Someone will leak, and that someone will not have the financial means to remunerate you for your subsequent loss of exclusive ownership. Making an example of them will not work. Once leaked, people will be able to legally republish without repercussion, so such NDAs are far weaker than even the weakest copyright.

- If the group of people with the software is small - like most specialized software - enforcing the NDA will be so successful that the software will effectively never enter the public domain (in both the intelligence and copyright lawyer sense of the word). Archival of old works will be impossible purely because the NDA did it's job too well. Such NDAs would be far stronger than even today's life+70 monster terms.

- In either case, traditional exceptions to copyright such as fair use, first sale, the merger doctrine, scene a faire, and so on will not apply. The NDA will prevent disclosure of even things that would not be considered copyrightable. Want to benchmark the software? Sorry, you can't, it's all under NDA - just take our performance claims as gospel.

The underlying problem is that copyright is supposed to be a bargain: the public agrees to respect a limited monopoly over publication of the work in exchange for creating a market that encourages more works to be made, as well as unlimited access to the work once the monopoly expires. In a sense, this bargain has been broken. Copyright owners lobbied for hilariously long ownership terms, right around the same time that individuals got access to commercial-grade publication tools that made piracy easy and interesting to do. "Just NDA everything" proposes abandoning the bargain entirely in favor of extremely authoritarian yet difficult to enforce controls on all works; something that we should not accept if we want to continue to have a market for works of mass culture.


Copyright should return to its original term length, or if anything a single extension (so some combination of 14 and 28 years between original filing and renewal). If "you" as a business can't make enough money from a work in 56 years then fuck off, based on copyright you owe us the work. Their rent-seeking behavior enrages me.


You're not wrong, but you're talking about something different from what I'm responding to. I fully support term length reductions, as the current copyright system is poorly bargained for.

What I'm responding to is the idea of using NDAs as a copyright substitute, which would enable all sorts of new rent-seeking behavior that copyright currently prohibits.


I agree with the premise of the second. The big money comes from pros and corporate concracts, who generally (but not always) avoid pirated software.

I feel if MS and Adobe weren't so lenient on piracy, they wouldn't have captured/held the worldwide market in their segments at such an astounding rate.

For a smaller, non-monopoly, it may be a very different case though.


At one point, Bill Gates openly admitted that this was part of Microsoft's China strategy [1]:

> Although about 3 million computers get sold every year in China, people don't pay for the software. Someday they will, though. And as long as they're going to steal it, we want them to steal ours. They'll get sort of addicted, and then we'll somehow figure out how to collect sometime in the next decade.

[1] https://www.latimes.com/archives/la-xpm-2006-apr-09-fi-micro...


Don't know about China, but that worked really well in Eastern Europe.

After things stabilized and the west "brought law and order", a lot of companies started paying MS licensing fees. Because everyone grew up on Windows and Office.

Same for Adobe.

Then there's this bullshit: https://www.inputmag.com/culture/peak-design-accuses-amazon-...


> Then there's this bullshit: https://www.inputmag.com/culture/peak-design-accuses-amazon-...

I don't see how someone could confuse those two bags. Is the brand company claiming that no one else can make a sling type bag?


I don't think it's an argument that "piracy is good", but instead piracy serves as a sort of test case to explore the extent to which current boundaries of intellectual property law is "promot[ing] the Progress of Science and useful Arts."


Right, and that seems to be the ultimate question. Which side of the scale should society fall on some of these questions. Is it better for the majority to progress more quickly without those intellectual property laws, or do we need the profit motive for companies to innovate and therefor be rewarded for that innovation.

It doesn’t feel like an either or, but more of a how far in either direction should the laws be.

As a question, would software patents be more acceptable to people if they were limited to 2-5 years rather than the 15 (I think) they are now?


> Piracy is potentially good for the overall market (free innovation, etc)

I haven’t seen any innovation done by software pirates other than what’s necessary to circumvent protections.


Are you kidding? Certain pirate sites have been compared to the library of Alexandria due to their massive collections and organization. No copyright holder ever managed to even come close, some streaming services can't even manage to list episodes in order. Pirates often care more about quality than the companies that release the product they're pirating. You'll see pirates using hacked PS3s to rip SACDs for the best possible audio. You'll see pirates sourcing multiple Blu-Rays in order to create the perfect encode.

These people work their butts off. It's honestly embarrassing that billion dollar companies can't compete.


Ok, so no innovation other than the piracy itself.


You don't consider better software, better service, better results, better everything to be innovation? I wish these billion dollar corporations were as innovative as pirates. They pretty much invented digital content distribution years if not decades before the legitimate industry managed to understand what was going on. They reached worldwide audiences at mere fractions of the costs associated with legitimate services.


> You don't consider better software, better service, better results, better everything to be innovation?

That’s just not accurate. I agree that for a while it was true in the days of Napster, audio galaxy etc, but it isn’t anymore.

But you are missing my point. Other than in improving ways to do piracy itself, piracy doesn’t lead to innovation.


My point is piracy itself is the biggest innovation of the 21st century. We're actually going backwards because of these copyright holders. Things would be so much better if not for them.

> I agree that for a while it was true in the days of Napster, audio galaxy etc, but it isn’t anymore.

You gotta be kidding me. Pirate sites offer more content at much higher quality. Netflix streams "high definition" shows so thoroughly compressed even black frames have artifacts. My satellite TV streams content with so much compression it gives me motion sickness.

The main difference is piracy doesn't happen out in the open anymore. You need to be invited.


> Pirate sites offer more content at much higher quality.

True.

> Netflix streams "high definition" shows so thoroughly compressed even black frames have artifacts. My satellite TV streams content with so much compression it gives me motion sickness.

Ok, but that high quality pirate content can’t actually be delivered to a large customer base over low bandwidth links like satellite. It’s a meaningless comparison since they are solving different problems.

> The main difference is piracy doesn't happen out in the open anymore. You need to be invited.

Ah - so it’s objectively worse than simply paying for content because it is only accessible to a small clique. Whereas with commercial services, anyone can just buy what they want.

What you are describing is the exact opposite of making things more freely available.

It’s a small group stealing content for their own exclusive use, and giving nothing back to society.


> What you are describing is the exact opposite of making things more freely available.

I know. That's what I meant when I said we're going backwards. Copyright enforcement drove piracy underground. It's not supposed to be like this.


It wouldn’t be piracy if there was no copyright enforcement. What you are saying is that piracy is simply failing to innovate.


Innovation doesn't have to be done by the software pirates, merely nudge it along:

1. Circumventing anti software piracy measures and learning that performance is gained instead of lost when the DRM is bypassed. -1 for DRM, net gain for users.

2. Pushing for new features alongside the updated DRM, a net gain for users.

3. Finding holes in the initial DRM and plugging them. A net gain for developers/publishers.

It's a win/win any way one looks at it.


As I said, the only innovation I am aware of that piracy has produced is circumvention.

You seem to be confirming that.


If that was the conclusion you drew, I suggest you read what I wrote again.


Pirate Party (various countries), Napster, exe trojans, BitTorrent, game mods, after 1 minute of thought. Are you trolling? You get lots of downvotes, especially when you respond to others that answer your own comments.


> Pirate Party (various countries), Napster, exe trojans, BitTorrent, game mods, after 1 minute of thought.

Ok - so innovation in piracy itself, not innovation in anything else.

> You get lots of downvotes, especially when you respond to others that answer your own comments.


> not innovation in anything else

You have much absolute opinion, and little supporting fact. Try reading:

https://www.zdnet.com/article/bittorrent-we-represent-innova...

https://www.google.com/search?q=%22innovation%22+%22pirate+p... which represents political innovation that is not about supporting piracy, but is about modifying the legal encumbrances (which often prevent benefits to society accruing from the products of that society.)

https://www.google.com/search?q=%22innovation%22+%22napster%...

https://www.google.com/search?q=%22game+mod%22+user-innovati... - much of this is innovation is not piracy but just removing locks so that you can modify games one has paid for. Piracy enables the innovation in games, but the user innovation in gameplay is not actually about piracy.


BitTorrent is innovative, but isn’t a result of piracy. The piece you linked actually says that.


Sometimes that circumvention itself has the side effect of QoL improvements. Like that Resident Evil 8 crack that significantly reduced framerate stuttering when the DRM calls were patched out.


Just one bug fix that multiple people are mentioning is hardly evidence of innovation.


I think the typical argument is that piracy makes things accessible to everyone, and the market as a whole benefits from that greater audience. Think of how many photographers got started with a pirated copy of Photoshop or reverse engineers with Ida.


Sure, which is only true if the maker actually gains from the greater market share indirectly.

This is almost certainly only going to be true in a tiny number of cases - e.g. photoshop, where commercial users generally don’t use pirate copies, and do get sued if they are found to.


It may do both, increase small, incremental innovations and decrease large, R&D-heavy innovations.


> isn’t the premise that if piracy was rampant and patents didn’t exist then more people and companies would be able to innovate on the technology without fear of a lawsuit?

This isn't just a premise. It is fact with historical precedent. Check out this thread for numerous examples:

https://news.ycombinator.com/item?id=28330810

Patents, copyrights, intellectual property in general... Nothing but state-granted monopolies with the explicit aim of preventing others from competing with the established players. Society is better served by ignoring such bullshit.


I don’t have a problem with the concept that - having done the expensive work of testing things out until you find one that works - you should be rewarded via protectionism.

What’s absolutely crazy to me is how long the terms are. In most fields, 2 years is plenty of time to make bank; in a few, 5 may be appropriate, and in a few very rare cases (pharma?) you may need longer to make up the cost of experimenting in a highly regulated space.

There’s no justification for the expansive terms available now.


> What’s absolutely crazy to me is how long the terms are.

Yes. Intellectual property is imaginary property, based on the lie of artificial scarcity. We could easily tolerate this arrangement though if the terms were reasonable enough. After a while, the works would enter the public domain and things would be as they should be. Seems like a small sacrifice in order to ensure creators can be rewarded via the familiar product sales model.

Unfortunately, these intellectual property holders turned out to be rent seekers. They create successful works, make their money. When it's our turn to reap the public domain benefits? They refuse to allow it. They lobby the governments for extensions. Copyright durations are functionally infinite. They want to extract value out of their imaginary property forever.

Can't remember the last time a movie I watched entered the public domain. Don't think I'm ever going to see it within my lifetime. They don't respect our public domain rights. Why should we respect their imaginary property? Let's stop pretending their products are artificially scarce because they aren't. Everything is public domain.


> I think of how stagnant the Eink space is, and how much broader usage might that technology get if it wasn’t encumbered by patents (just one example)?

I work in the display industry and I have no idea what you're talking about. I see this again and again in HN. Look at my comment history. There's reasonable amount of innovation and competition in electrophoretics. But it is a niche technology and the actual physics of rheology are what limits innovation in this space. If you feel I'm mistaken, please say exactly what you mean is being limited in a technical sense. I perceive your type of comment as equivalent to a display engineer posting on a software forum claiming that patents are limiting progress in operating systems and that's why Microsoft Windows is the only non-innovative product available. I hope the analogy is clear.


> Basically, isn’t the premise that if *privacy* was rampant...

God could you imagine such a world, one which privacy was rampant, I can't but I wish I could.

Sorry couldn't help chuckle at your typo.


ha, I didn't even notice that and even reread it a couple times.

can't change it now ;)


It doesn't mean that innovation is to the benefit of the user, though, does it? Maybe all the innovation is in anti-piracy technology?


> isn’t the premise that if privacy was rampant and patents didn’t exist then more people and companies would be able to innovate on the technology

No, because innovating on technology costs money and if you can’t get a return on that, the incentive to invest is eliminated.

The eInk situation is indeed dysfunctional, but the fact that one patent holder is bad at business doesn’t mean much more than that.


> The eInk situation is indeed dysfunctional, but the fact that one patent holder is bad at business doesn’t mean much more than that.

Whether they're bad at business or not, it's certainly not a situation that makes me feel like the patent system is in my best interest.


Sure, but the point is that no system is going to be perfect, so just this one example doesn’t tell us much.


It’s not just eink. So many technologies are blocked by patents. It’s said that 3D printing only just exploded because the patents required had expired.


"Second, we build a dataset that matches the financial information of publicly traded software firms with (1) R&D expenditures and patent, copyright, and trademark counts, and (2) a unique dataset of pirated software."

That's fine, but they're measuring what can be measured easily and calling it "innovation" (at least in the headline), rather than anything meaningful. Having more patent filings doesn't mean you're "innovating" more. Nor does spending more on "R&D" which is mostly just an accounting convention.

At two companies, I worked on getting more patent filings, because that was seen by management as The Thing To Do. In both cases, we would ask the engineers "what have you done lately?" and then decide if any of that might be patentable. Usually this involved paying a bounty to the "inventor" if a patent application was filed, and another if the patent actually issued (4-8 years later).

In one case for awhile (Google Maps), they were actually paying people a bounty for submitting an idea for a patent, even if no application was filed! I was on the committee that decided if the idea was (1) great, file for sure, (2) pretty good, maybe file, (3) OK but don't file, or (4) so bad you don't even get the idea bounty.

  (*Full disclosure: I'm pretty sure this system isn't in effect anymore.*)
I've written elsewhere [1] about the dubiousness of software patents, so I don't need to explain how they have nothing to do with "innovation."

[1] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2399580


> I've written elsewhere about the dubiousness of software patents, so I don't need to explain how they have nothing to do with "innovation."

Nothing to do with innovation? I'm not convinced. If filing more patents and spending more on R&D is not a sign of (at least a desire for) innovation, what is?

I think the biggest challenge with studying this is that how to innovate is going to be wildly different from one firm to the next. Did this study use the best general measures they could? I would say so.


> "the best general measures they could"

If you can't put a number on a phenomenon that actually means anything, then saying "well, this is the best we have" is pretty weak.

You also said "at least a desire for" which may be your out.

I can give other metrics that have been studied, but I think the onus is on you now to justify your claim, or maybe admit that one can't define "innovation."


S. Korea gaming industry once suffered a lot from piracy in 90s. This was a main driver of their rapid transition toward online gaming. In fact, one of the earliest graphical MMORPG was invented by Nexon (a year before UO). Coincidentally, Nexon is also the inventor of loot box which becomes their dominant business model. And I think not many people prefer this over old fashioned game packages.

So yeah, piracy could corner industry to "innovate" their product and business model in order to survive. But it's not guaranteed to be in a societally beneficial way.


Online gaming is a societally beneficial innovation imho.


I agree with that statement.

MMOs and lootboxes are a societal harm however.



We've changed the URL to the paper from https://www.uspto.gov/ip-policy/economic-research/publicatio..., which is a list of papers that this one currently happens to be at the head of.

We've also changed the title above from "US Patent Office Report concludes software piracy increases innovation", which broke the site guidelines against editorializing: "Please use the original title, unless it is misleading or linkbait; don't editorialize." (https://news.ycombinator.com/newsguidelines.html)


My apologies Dang – consider me educated for next time.


Appreciated!


Avoidance of link rot should probably be done with the paper's DOI number - https://dx.doi.org/10.2139/ssrn.3912074


Piracy would be much easier to enforce laws for if copyright law didn't protect nearly a century's worth of works.

If copyright law was something more reasonable, say five years, then the MPAA/RIAA could viciously protect everything within those five years and consumers would more likely stay away from those materials given the negativity of the consequences.

The way things are now, you literally have to pirate some games like No One Lives Forever because the copyright law around them is so convoluted that no one knows who can legally sell it anymore. Even worse if you're looking for something like The John Larroquette Show which can't be found anywhere outside of piracy due to a lack of interest by distributors.


Yup. The truth is these copyright holders are nothing but rent seekers. They've created successful works, made their money. When it's our turn to reap the benefits via public domain? They won't accept it. They change the rules of the game instead. They move the goalposts. They lobby the government until copyright duration is functionally infinite because god forbid mickey mouse enters the public domain.

Why respect their rights when they don't respect ours? Copyright only works because we pretend their works are artificially scarce. Let's stop pretending.


What if the result is everything is a rental / SaaS?

For the record I really don't mind SaaS products, they work great in many situations.

I just am not sure the innovation is the innovation we want.


What if the result is everything is a rental / SaaS?

That's the paper's conclusion. They see the beginning of the piracy-friendly period as the release of BitTorrent in 2001, and the beginning of the end in 2013 when Microsoft Office 365 came out.

Now everything is tied to central control, who can turn off your service any time they want to.


That's fine. SaaS is just a fancy way of saying the software is running on someone else's computers. They can do whatever they want with their machines, including charging money for access.

People will eventually get fed up with it and make free software that runs locally. It will take time but I have no doubt it will happen. I find this is a much more reasonable proposition than waiting the 100+ years it takes for copyright to be invalidated.


Once we get tired of SaaS, the market will create standalone expensive software.

Even if I have to say that the subscription model is pretty good for B2B: fixed expense per month, someone to bother if things don't work, instead of spending my own employees time keeping infra up and debugging bugs.

I don't like SaaS for my personal use, I prefer to pay once, keep forever and fix on my own (for similar reasons to why I like cooking my own food instead of ordering take out all the time).


>the market will create standalone expensive software.

Maybe even hardware, like a Pi server that serves up the app even...


They suck for two reasons: primarily now I need an account for everything I use with separate billing charges. It becomes annoying to manage. The other reason the egregious costs these companies charge. For a compiled version of software back in the day, I could get something that worked for $30-$100 and it would last years if not a decade. Now, some of these places are charging like $3-$20/month! Software value has not increased that much. If I gotta start paying for TODO apps and calendar managers, I'm just gonna move to Org Mode. The majority of what software provides is a nice gui environment to manage text. No clue how this crap can be worth as much as it is aside from supporting multiple platforms and enabling web based usage.


We need a SaaS that manages all of these SaaS subscriptions and accounts! That's something I'd pay $10 a month for


I think it's because software has finally reached a point where everybody is adequate at using computers that new problems have developed compared to the ones that existed 10-20 years ago. So now the people who have no idea how to use a computer (or are willing to learn) they just pay for a SaaS.


The big guys are trying to get this in their store models so that they can pull their 30% cut.


I wish more companies would follow the way of open source, self-hosted free version and paid version hosted in the cloud. Win - win.


Unless they get crushed by one of the major cloud providers offering a rival managed service powered by the original codebase.


From the summary at https://torrentfreak.com/software-piracy-triggers-innovation...:

> The research doesn’t look into specific types of innovation. However, it mentions that in more recent years the subscription model has been embraced by an increasing number of software companies.

If the "innovation" is concentrated in anti-piracy technology/practices, then the real implications may be quite different from first glance.


The biggest issue with "piracy" overall is that it describes a phenomenon where users of an existing platform are sticking to the agreed upon way of using that platform as designed despite corporate lawyers' best attempts at changing terms to try and invent a scarcity where there is none.

They tried to invent jaywalking for the web, and it went... poorly. At least outside of corporate-lawyer-heavy circles.


They're trying to use a system created in the 1700s in the 21st century. They're out of touch.

Back then, if you wanted to copy a book, you'd have to do it by hand. You'd need to literally write the words into a new book. Copyright infringement at scale required industrial hardware like printing presses. Distribution required physically moving stuff around.

It's the 21st century now. Computers exist and nearly everyone has one. Copying data is a fundamental operation. It's as easy as copy and paste. We can easily create millions of copies of any data in seconds, filling up entire hard drives if we want. We can transmit these copies over the network to any number of computers at negligible costs.

These copyright people are so out of touch with reality it hurts. The level of tyranny required to stop this would give any free society pause.


It's an interesting topic. I agree with you but let's remember that paper-based information still exists. New books are being written and printed as we speak, and the cost is greater than neglible ($20/book single print). Computer-based information is a very new thing and could potentially vanish overnight to some unexpected space weather. Society hasn't transitioned completely from one to the other. As long as cash exists beside banks' computers, paper information exists and must be given the serious consideration it deserves.

The printing press was invented some 600 years ago. Computers have existed for like 50. It's very much "in touch" to not dismiss print.


Paper exists in the physical world. It makes sense to apply old copyright laws to them. They're physical things, naturally scarce.

My argument is that they make no sense in the virtual world. Once information makes its way there, it can be copied and distributed worldwide at negligible costs and with zero limitations. Pretending otherwise means living in denial of reality.


Yea but it's not like all of our laws, institutions, and processes can just pivot instantly. There's organizational inertia to keep doing things the old way, regardless of whether it makes sense.


Then it's our responsibility to shock and disrupt them until they wake up to the new reality. The alternative is they're going to retrofit the old systems and apply them to computing and the internet, destroying their potential in the process.

Enforcing copyright in the 21st century means ending computing freedom. They must make it so computers only run approved software. I would rather see copyright abolished.


I wrote "Hacking Healthcare" for O'Reilly, which is still in print after 10 years, amongst others. My intention in writing it was never pecuniary but to hopefully encourage smart technology people to enter healthcare. It has sold more copies than many popular authors I read who seem much more "bestselling", which always surprises me.

It is my opinion that piracy has helped that book much more than it has hurt it. It is very widely pirated in torrents in non-us countries from what I can tell from google searches and a longstanding history of emails to the effect "hey your book is being pirated [here]". I sincerely doubt that the overwhelming majority of people who pirate that work did so instead of purchasing it.


N = 1 here, but as someone from a third world country this is definitely true for my experience. Like, 90% of students here can't really pay US-prices for textbooks at all, so they resort to either piracy or buying imported used books (which are significantly cheaper somehow, but sometimes badly worn or old editions), or even buying printed pirated books.

My university department even had someone who would pirate textbooks and print them and sell them to the students at cost (what it cost to print them), he was very popular and people to this day still remember him very fondly as he was arguably doing a major service... the students wouldn't have read the books otherwise.

It may be legally wrong in the West, but morally? The author doesn't lose (like I said, the books wouldn't have been bought) and the students get access to knowledge they wouldn't have been able to access otherwise.


> It is my opinion that piracy has helped that book much more than it has hurt it. It is very widely pirated in torrents in non-us countries from what I can tell from google searches and a longstanding history of emails to the effect "hey your book is being pirated [here]". I sincerely doubt that the overwhelming majority of people who pirate that work did so instead of purchasing it.

Tim O'Reilly agrees with you:

https://www.oreilly.com/content/piracy-is-progressive-taxati...


> We find that rising piracy increases subsequent R&D spending, copyrights, trademarks, and patents for large, incumbent software firms. Furthermore, copyright and trademark filings precede those of patents, and firms with large patent portfolios disproportionately increase copyrights and trademarks following the shock. We conclude that piracy and similar competitive shocks push firms to innovate to stay ahead of imitator products, and that this effect is moderated by their existing patent portfolios.

Is it pushing firms to claim more intellectual property?


So there's a tweet I've seen where some anti-vaxxer is asking if anyone else has noticed why all these unvaccinated people are suddenly getting Covid like there's some sort of conspiracy. Sadly it'll probably be taken as "confirmation" of nanobots or something. Of course, this all just misses the point entirely.

I have the same feeling about this. It's not that piracy increases innovation. It's that overly restrictive limits stifle innovation and this includes the ridiculous software patent fiasco.

It's not really surprising that the Patent Office didn't discover that patents in general and software patents in particular are in fact the problem.

There's tons of evidence of this too. The Wright brothers' original patent on flight control completely stifled the aviation industry such that when the US entered World War One they were unable to build planes and they had to buy them other nations. This particular event is why there's a patent pool for aviation now.

A smartphone is literally covered by thousands of software patents for completely obvious "innovations".

Commercial software tends to have a lot of restrictions such that only paying customers can (legally) use it. Sellers would rather not have someone use it and view them as a potential future sale than risk giving it away for a low or zero price. Many of those people using that software would probably lead to innovation.

The lesson here should be that overly restrictive IP enforcement in general is the problem.


I'm pretty confident that Adobe came to this conclusion a long time ago.


And yet, they’ve made it much more difficult to pirate their suite now…

I disagree with anyone who thinks Adobe, Microsoft, or any other software vendor made pirating easy bec it would boost long term sales.

100% of executives are focused on this quarter and nothing else.

Bad licensing enforcement was just a by-product of focus, and resources. As we see pirating O365 is impossible, pirating the offline Office suite is doable but much harder than it once was and usually requires buying a volume key instead of downloading a crack. I know pirating Adobe is technically possible but from what I’ve seen requires a lot more work and isn’t foolproof like it once was (download Adobe, click crack on crack software).

In general good software licensing frameworks have been commoditized and it’s pretty easy to add to your product. Idk anyone who would look at that and think rolling their own broken solution is better bec it could lead to better long term sales.


I think because of their stranglehold and egregious fees, it's opening up other companies to compete reliably now. Although businesses just don't want to get away from the "Photoshop" or "Premier" name so they just shell out for it when they can easily get by without for way cheaper.


Right but that would be an argument away from pirating, ie straight competition encourages innovation bec ppl don’t want to pay the egregious fees for software that they don’t fully utilize.


>And yet, they’ve made it much more difficult to pirate their suite now…

Nobody said you get the innovation you want. :(


As in pirating encouraged innovation in licensing? Fair. But it’s not really the argument that most people understand the headline to mean.


I want to expand on measuring "innovation":

Rather than summarily declaring that "filing for IP protection" IS "innovation," the empirical thing to do would be:

1) Collect "ground truth": assemble teams of "experts" in various disciplines, and give them all lists of companies. The teams could be as small as one. They score each company as "innovative" or "not innovative" in some given period of time.

If they cannot agree, then you can stop right there. If the teams do not agree with each other, then you can stop.

But let's say you do get lists of companies that are agreed as "innovative" or "not innovative."

2) Try out your metric of innovativeness, be it "patents" or "copyrights" or whatever. What is your AUC?

Until you do that, you can't say you have a metric of innovativeness.


As anecdotal and loosely related point, in the ethereum community we think that the unprecedented rapid pace of innovation is largely attributable to the need for smart contracts (and often their UIs) to be open source or users won't trust them.


I only read the abstract, but why do they conflate "product-market imitation" with software piracy?

Doesn't imitation mean creating new software with similar functionality? That would be relevant for patents, but not copyright.


Adobe had 3 generations of designers, etc hooked on their products because of ease of piracy much like drug dealers giving out samples of crack in early 80s to build their customer base. A large part of "their" patents came from companies they acquired and integrated versus innovating on their own. So I don't think patent portfolios are a good measure. Disclaimer: "May not apply in all situations. Use at your own discretion".


And now, the zeitgeist is if anything in the opposite direction: Capture One Pro, Raw Therapee, and Darktable have got a hell of a a lot better compared to Lightroom and C1P in particular proudly offers a lifetime license, not a subscription. Similarly, DaVinci Resolve has a free (if not FOSS) business model, designed explicitly to compete with Premiere, and, again, lifetime licenses. Affinity Designer/Photo/Publisher are cheap, software that you "buy" and increasingly "good enough" for pro use, to the extent that many post about moving away from the CC treadmill to them.

Adobe arguably won this decade on the basis of the three generations you mentioned. I am not confident that they will win the next ones – the last time I printed an actual book, the publisher used CS6 ± Quark XPress internally (I wrote it in LaTeX; they had some tricks for printing it on SRA4 paper and wanted to use those tools to get the bleeds & trims right). The SaaS model was explicitly mentioned as a reason for sticking with the old software.


They’re using the release of BitTorrent as a natural experiment here, seeing what happened before and after with a combination of a few techniques (matching, DID, and IV). I’m not convinced that this will say anything more than “after the 90s and early 2000s, firms started doing XYZ.” The causal statement here is plausible, but the methods are unconvincing.


If you consider SAAS and locked-down subscription models to be innovative, then this is definitely true.


How is piracy defined here


Steve Jobs always quoted Picasso

"Good artists copy, great artists steal"


Hm. I'm sure it can. However, in my line of work, pirated software leads to furtherance of proprietary and unexportable/hard-to-export file formats that further push others to piracy.

Switching to FLOSS systems and open data formats sidesteps this whole issue. With open formats, open specs, and FLOSS implementations means that data is now portable and easier to write translators for. And data is not a roach-motel model, where proprietary software uses that model as a form of lock-in.

Tl;dr. Starting off makes sense to pirate. Longterm, FLOSS makes more sense for your data and content.

(And, software piracy online feels like the equivalent of jaywalking in terms of "criminality". But this is just a personal feel.)


Best of both worlds, pirate FLOSS :)

Which makes sense, given that FLOSS is a legal response to overbearing copyright, and piracy is the practice of ignoring it.


The title of this post was changed from a good summary to the pretty much nonsense businessspeak title of the article.


Ah, now to see if we have to decide between:

- Software patents are not a sign of innovation

- Software piracy is good for innovation

I have this here in meme form https://i.imgflip.com/5lspw4.jpg


Piracy, according to the United Nations Convention on the Law of the Sea (UNCLOS) of 1982, consists of any criminal acts of violence, detention, or depredation committed for private ends by the crew or the passengers of a private ship that is directed on the high seas against another ship, ...


If you read the article you’ll find that this is exactly what it’s talking about. Ships of yore developed techniques to fend off pirates which eventually led to faster, more reliable shipping.


Software piracy might not be as bad as actual piracy of the "attacking ships on the high seas" variety, but it's still pretty unethical, and promotes the spread of proprietary software that does not furher the best interest of its users. Please use fully-FLOSS alternatives instead whenever reasonable.


There is a long standing debate on the ethics. High seas piracy is bad because when the pirate steals, they deprive someone else of their property. But in the digital realm, no one is deprived of anything when someone else steals it, because in almost every case, the person was not willing to pay for it anyway, so there is no loss of revenue.

Honestly, there isn't a whole lot of difference between something like open core software or open source with commercial support and commercial software that is easy to pirate. In both cases, the people who are willing to pay will pay and the rest don't.


Is it true that no one is deprived of anything in digital piracy? There is surely a group who would not pay anyway, but isn't there another group who would begrudgingly pay but pirates if possible? Does this not deprive the software makers of a bit of sales? Is this a marginal bit or a huge amount of the sales? And does the piracy potentially lead to popularization and more sales?

It sounds very tricky to measure these phenomena in software.

In music, I think the majority of musicians themselves live off of their fans coming to shows or a small percentage buying the albums, and side-gigs haha. There are probably only dozens lucky enough to get huge payoffs from digital sales.


> Does this not deprive the software makers of a bit of sales?

I'd welcome a more neutral phrasing for this though. Yes, it may change people's behavior. But depriving someone of something sounds like something they had is taken away from them; but these are not sales or property they had, rather it's something they perhaps would have had if the world were different. Now, a lot of things can "deprive" me of things that I'd like to have but never did..

As you say, it's very difficult to measure. Actually, it's not something that can be measured, because it's a world of hypotheticals. It's like measuring how tall you would be if you had lived in the 1500s. You don't measure that.

If piracy isn't a choice, then I might look for an alternative.. and if I find an alternative that pleases me, then I'm less likely to deal with the author of the original un-pirateable software, thus "depriving" them of something they perhaps could have had if they had first gained me as a user somehow.


In some cases it may even increase revenue. There's been multiple times I've pirated a game, only to buy it later to get easy access to updates. Of course a good demo system would help with this, and Steam's refund policy is somewhat a step in the right direction.




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