Re: Where we went astray-- Antitrust and Microsoft

On 11/02/97, John H. Lederer <johnl[_at_]ibm.net> wrote:
>
> Thomas Dunn <tdunn[_at_]slaw.neu.edu> wrote:
> >
> > John H. Lederer <johnl[_at_]ibm.net> wrote ...
> > >
> > > Software is an exception. The product is intellectual property and
> > > the marginal cost is often near 0. What is the cost to Microsft of
> > > the hundred millionth copy of Win95? The cost of printing a
> > > certificate -- Microsft has offloaded the other costs (maintenance,
> > > repordcution, etc.) to its buyers. Moreover its sales model is
> > > incredibly lean-- because despite the misconception Micorsft does
> > > not market to the end consumer -- Microsft sells to computer OEM's
> > > -- a market in which 90% of the business is probably held by 20
> > > firms.
> > >
> > > Software is an exception in another way. At one level there is no
> > > competition by statute. Windows95 is a monopoly, no one else can
> > > make it, because Congress, in its undoubted campaign financed
> > > wisdom, has extended copyright and patent law to embrace software.
> > > You go to jail if you make Windows95 without Microsoft's consent.
> >
> > I recently completed a course in Antitrust and am astonished at how
> > much I like it. Couple of thoughts. First, it is true that the
> > marginal cost to MS of the hundred millionth copy of Win95 is near
> > 0, but, given that any developer's marginal cost to produce the
> > millionth or hundred millionth copy is nearly 0, can this explain
> > the MS monopoly? Second, I agree wholeheartedly that it is a major
> > policy gaff to extend patent protection to software; but would you
> > really not extend copyright protection? I'm interested in knowing
> > what you and others see as the answer to the marginal cost dilemma
> > in software, as well as what protections, if any, would ameliorate
> > antitrust concerns.
>
> Actually every developer's marginal cost is not near $0, because most
> developers have significant support costs per copy of their software.
> Microsft has had the market clout to shift the suppor costs to the OEM's
> who load their operating system--a very high percentage of MS' total
> operating system sales. Similarly most developers have significant sales
> costs -- Microsft. becauser the bulk of its sales are made through OEM's
> has very small sales costs, which is why its general advertising for
> OS's tends to be 'image" advertising.
>
> I have considered two modifications of software copyrighting:
>
> (1) require disclosures of the source code. much as we effectively or
> particularly require disclosure of other copyrighted material. This
> might have a very salutary effect. For instance, IBM abandoned
> supporting Win32 programs in OS/2 as they had Win16 programs because of
> the conviction that Microsft would make chnages in the Win32 API's that
> would be hard to keep up with. I think, that with disclosure of the
> source code, it would be much easier to make functionally equivalent
> OS's.
>
> (2) change the term of copyright for software

I like the idea of full disclosure (in electronic format) of the source code to allow reverse engineering, but wouldn't an alternative operating system be a (an unlicensed) derivative work?

I like a copyright term of say 20 years, but the heirs of song writers of the 20's are pushing for longer terms, see the Oct. 30, 1997, Wall Street Journal, page B1.

How about a special term for software copyrights?

Regards,
David F. Crosby
dcrosby[_at_]lappinkusmer.com
dfcrosby[_at_]earthlink.net Received on Tue Nov 04 1997 - 13:35:24 GMT