1. Industrial Management and Economics, Chalmers © Ove Granstrand 1 Creativity and IP in Arts and Sciences – Some economic puzzles and paradoxes Prof. Ove Granstrand Industrial Management and Economics Chalmers University of Technology SE-412 96 Göteborg, Sweden Tel: +46 (0)31-772 1209 ovegra@chalmers.se Presentation at the International DIME Conference “The Creative Industries and Intellectual Property” London, 22–23 May, 2008

2. Industrial Management and Economics, Chalmers © Ove Granstrand 2 1)those who can count and 2)those who cannot There are 3 sorts of people in the world:

3. Industrial Management and Economics, Chalmers © Ove Granstrand 3 Novel to the audience Non-obvious Then it is an invention – even a medical invention since… A good joke should be:

4. Industrial Management and Economics, Chalmers © Ove Granstrand 4 … a good laugh prolongs life!

5. Industrial Management and Economics, Chalmers © Ove Granstrand 5 Do you want a royalty-free license on this invention?

6. Industrial Management and Economics, Chalmers © Ove Granstrand 6 with a compulsory royalty-free grant-back license! OK, (Cf. open source GPL licensing with implicit contracting)

7. Industrial Management and Economics, Chalmers © Ove Granstrand 7 Creative Industries Most IPRs require a minimum level of originality (inventive step, deviation from prior art, novelty degree, distinctive uniqueness, etc.) Thus most IPRs require creativity Most industries are using IPRs Thus most industries are “creative industries” thriving on useful creations, i.e. innovations

8. Industrial Management and Economics, Chalmers © Ove Granstrand 8 The Boredomia IP and Welfare Investigation Summary ”Lack of technical character should not be a valid ground for exempting inventions from patentable subject matter… New, non-obvious and useful therapeutic, surgical and diagnostic methods should also be regarded as inventions.” Article 1, Chapter 1, Boredomia Proposed New Basic Law on Intellectual Property. (In provisional translation as of 2007)

9. Industrial Management and Economics, Chalmers © Ove Granstrand 9 The Boredomia Initiative (Supported by Entertainment Industry Association, General Joke Co., Start-up Comedians of Boringgrad among others) Some proposals: Jokes should be considered medical inventions prolonging expected life times and increasing quality of life, therefore contributing to welfare Not only jokes about engineers (thus having “technical character”) but jokes in general should be patentable subject matter. Jokes in general should be patentable subject matter, subjected to the standard test of novelty, non-obviousness and usefulness. Training of BPTO joke examiners should start a.s.a.p. in consultation with Dept. of Health.

10. Industrial Management and Economics, Chalmers © Ove Granstrand 10 Economic Valuation of Jokes (Source: Ove Rallfun 2007) FLforeign licensing net income (discounted) JPloss (discounted) from IP piracy  V(J) =   V i (J,  i ) + FL – JP, i Є Pop В [2007, 2027] Where  V i = ∫∫ π i (t, J)e -rit dt dF Li LiLi L i +  i

11. Industrial Management and Economics, Chalmers © Ove Granstrand 11 Opposition Against the Boredomia Initiative (Supported by the Open Joke Movement, The Anti-Bore NGO, Humour Rights Association among others) Some arguments against: “Humour is a human moral right” Jokes are public goods High transaction costs outweigh welfare gains Little or no investment character with little entrepreneurial risktaking requires no extra private incentives Joint production and consumption provides sufficient reward structure Positive production and consumption externalities (cf. contagious laughter)

12. Table of contents Abstract1 1.Background3 2.Purpose5 3.Concepts and typologies6 4.Methodology7 5.Cases8 5.1Jokes – No IPRs8 5.2Cumulative and sequential innovation9 5.3Sound and music. The Jankó case10 5.4Improvisation – The case of avant-garde jazz12 5.5Recipes13 6.Discussion16 6.1Creative cumulation vs. creative destruction in arts, technology and sciences16 6.2Increasing returns and technological lock-up18 6.3The repugnancy paradox in arts18 6.4Interactive creation19 7.Summary and Conclusions21 Literature References22 Appendix 123 Summary of the Boredomia Initiative23 Economic Valuation of Jokes24 Opposition Against the Boredomia Initiative24 Appendix 2 The mathematical beauty industry25 Appendix 3 The Janko’s keyboard (tbc)26 Industrial Management and Economics, Chalmers © Ove Granstrand 12

13. Background IP views on universe creation Views on the creative universe Industrial Management and Economics, Chalmers © Ove Granstrand 13

14. Purpose Explore puzzles and paradoxes, based on “diagonal” (extreme) sampling in the creative space, for: 1.Furthering economic analysis 2.Finding unifying IPR legal and economic principles 3.Improving the creative process Industrial Management and Economics, Chalmers © Ove Granstrand 14

15. Chronological overview of early major events in IPR development Year(s)Event 3,200 BCPotter marks found on fired clay pots, including jars buried in tombs of the First Dynasty Egyptian kings, providing a precursor to trademark protection. Stone seals or cylinder seals bearing such marks were used from about this time onward in both the Near East and Greece. 700-500 BCChefs in Sybaris, a Greek colony in southern Italy known for luxurious living, were granted one-year monopolies on the preparation of an unusual or outstanding dish. This right applied to no other art or science. Ca 350 BCOne of the first recorded unauthorized copying events occurred when Hermodorus copied Plato´s speeches and without passing them off as his own, he took them abroad to sell for his own profit. An early “bootleg” incident. 330 BCA law is introduced by the Athenian statesman Lycurgus, requiring that a transcript of the works of the great poets should be deposited and read to the actors by the city secretary in order to have them keep to the original text. Thus there was concern over not only plagiarism but also distortion, i.e. the creation and the creator were jointly recognized and protected as a basic IPR bundle. 100 BCTrademarks used in Rome on an everyday basis to mark products such as cloth, lamps, glass vessels, cheese, and medicine. 40 – 100 AD the roman poet Marcus Valerius Martialis were so upset when others used his poems without reciting his name that he equalled it to kidnapping for which in latin is the word “plagium” (plagiarism). Ca 100 ADAn acknowledgement of intellectual work and effort in the Roman empire is visible in the legal institute of specificatio. Specificatio was a method of acquiring ownership by the creation of a new thing out of someone else’s materials. If someone created a marble statue out of someone else´s marble the statue could be considered a “nova species” (a new thing) whereby the statue came to belong to the creator. 337 ADRoman emperor Constantine decrees that artisans of certain critical trades are exempt from all civil duties. Chariot makers, engineers, and locksmiths are especially favoured. Industrial Management and Economics, Chalmers © Ove Granstrand 15

16. Mathematical proofs and formulas – ultimate case of cumulative invention Industrial Management and Economics, Chalmers © Ove Granstrand 16 Euler’s formula: e ix = cos(x) + isin(x) Einstein’s formula:E = mc 2

17. Jankó keyboard – a case of lock-in and un-lock(?) Industrial Management and Economics, Chalmers © Ove Granstrand 17

18. The Chromatone CT-312 keyboard and synthesizer with hundreds of individual, unlabeled keys Industrial Management and Economics, Chalmers © Ove Granstrand 18

19. IP and improvisation – case of music, jazz and free-form Industrial Management and Economics, Chalmers © Ove Granstrand 19

20. IP and recipes – the Benedictine scheme Info setAgent PA 1 A 2 I 1 110 I 2 101 Industrial Management and Economics, Chalmers © Ove Granstrand 20

21. Discussion themes Creative cumulation vs. creative destruction in arts, technology and sciences Increasing returns and technological lock-up The repugnancy paradox in arts Interactive creation Industrial Management and Economics, Chalmers © Ove Granstrand 21