Project outline

Final report

Press coverage

related research




Research Questions proposed to the "Workshop Advancing the Re-search Agenda on Free/Open Source Software"
Knut Blind, Frauenhofer Institute, Germany

1. The Development of an Appropriate IPR Regime for Open Source and the Software Sector as a Whole

The step-by-step introduction of software patents in Europe, following the US prac-tice, may hinder or even threaten the further development of the Open Source movement. Among the participants of Open Source, the GPL/GNU licensing scheme seems adequate for a sustainable development of Open Source with only low transaction costs occurring. Since the main motivation for contributing to Open Source are not the generation of proprietary software, but building up reputation in the labour market for software developers, which means the appropriation of tacit knowledge respective skills.

Besides this among "insiders" of the Open Source movement consistent incentive scheme, "outsiders" like software companies run other business models and have consequently other incentives regarding the protection and appropriation of their software developments. They are – in general – not able to appropriate revenues from their reputation as a kind of intangible asset. Only in case of larger companies having applied large – and at least partly protected – installed bases because of their reputation, it may possible to recoup investments in software development. Conse-quently, conflicts between "insiders" and "outsiders" of the Open Source movement occur respective the protection and the exclusive use of software inventions.

Two kinds of conflicts may arise which are similar to the general tension between IPR and standardisation.[1] First insiders of the Open Source movement may have incentives to try to get exclusive protection for their highly valuable contribution to Open Source and appropriate the returns not only indirectly via increased reputation in the labour market, but also directly by supplying commercial software products. A solution for this conflict is the consequent implementation of the GPL/GNU scheme.

The second conflict arises between "insiders" and "outsiders" of the Open Source movement in cases where parallel developments inside Open Source and in tradi-tional software companies occur. Due to the idiosyncrasies of the software devel-opment process, like short development cycles, inputs from various external sources and sequential development, the likelihood of this kind of conflict increases. In or-der to find a balance between the interests of the "insiders" and the "outsiders" one has to consider an IPR regime which maximises the sum of the economic value of the Open Source developments and the private IPR-induced software developments of software companies. Besides the "simple" intertemporal maximisation problem the IPR regime has to be taken into account the transaction costs caused by the re-gime.

So far no – from all involved stakeholders accepted – solutions have be found to this problem recognising all aspects of the problem.[2] Research has to be undertaken in order to identify first all relevant aspects of the problem. Second, empirical re-search has to be undertaken to check the effectiveness of the current appropriation respective IPR regime on the micro- but also macro level. Since we have still slightly different IPR regimes in the US and Europe, a comparative analysis may provide the necessary insights.


2. Open Source as Standardisation Process: Lessons to be learned for Standards Development Organisations

The Open Source movement can be interpreted not only as a dynamic software de-velopment, but also standardisation process. The most interesting characteristics of Open Source regarding standardisation are its high dynamic and the voluntary input of numerous software developers. Regarding traditional standardisation processes it is often complained that they take to much time and are not able to follow ade-quately the fast technological change. Finally, the output of these processes lag be-hind the current state of the technology. Pre-normative standardisation or standardi-sation accompanying development processes are solutions for this severe problem. A major second interrelated problem is caused by the dilemma of the underprovi-sion of public goods due to limited incentives and the free-rider phenomenon. The consequence is that companies with strong R&D incentives are less likely to join standardisation processes. Besides this inter-company adverse selection inside com-panies an adverse selection can be observed, because there is a tendency to send older and less skilled employees to standardisation processes, since the younger staff is the bottleneck regarding R&D activities.

The research directed to the solution of the described two errors of the traditional standardisation system has at first to identify relevant mechanism of Open Source regarding standardisation and secondly ask under which conditions and for what technologies the mechanisms of Open Source can be transferred to the standardisa-tion processes organised by standardisation development organisations.

[1] Blind, K./ Bierhals, R./Thumm, N./Hossein, K./ Sillwood, J./Iversen E./van Reekum, R.: Study on the Interaction between Standardisation and Intellectual Property Rights, Unpublished FinalReport for DG Research of the European Commission, Karlsruhe 2002.

[2] Blind, K./Edler, J./Nack, R., Straus, J.: Mikro- und makroökonomische Implikationen der Paten-tierbarkeit von Softwareinnovationen: Geistige Eigentumsrechte in der Informationstechnologie im Spannungsfeld von Wettbewerb und Innovation, Report for the Federal Ministry for Economic Affairs and Technology, Karlsruhe 2001, (Softwarepatentstudie.pdf).