Dog Bites Man - Software Edition

Last year, I complained about the Cablevision case (see Href=http://www.cioinsight.com/c/a/Past-Opinions/IP-Law-Versus-Moores-Law/>”IP Law vs Moore’s Law”), a decision I’m pleased to see was recently reversed on appeal. Cablevision was trying to replace set-top DVRs with a centrally-managed system, a common trend in computing these days as hardware and communications improvements make hosted applications (the new term is “cloud” computing) more attractive from a cost, management, and environmental standpoint. The move ran afoul of copyright, however, and the Second Circuit struggled mightily to find a way to make the law fit common sense.

I’ve written two articles recently that deal with what is essentially the same problem—the slow nature of law to adapt to new technologies, especially technologies that are deploying quickly and still evolving as they do. The first, ”When Software isn’t a Product”, deals with the shift of software from product to service, and the consequent and not entirely intentional shift of the body of law that governs such transactions from the law of sales to the law of licenses. The second, Href=http://www.cioinsight.com/c/a/Web-20/eBay-and-the-Legal-Problems-with-On...>”eBay and the Legal Problems with Online Marketplaces”, briefly reviews two recent eBay cases involving the company’s liability for counterfeit and gray market goods sold through its marketplace. Courts in the U.S. (Tiffany’s) and France (LVMH) reached opposite conclusions on nearly identical facts.

There’s really no solution to this growing problem. Law is designed to change slowly, either through the common law tradition of judges applying old precedents to new facts, or through the legislative process, which is intended to be deliberative in an effort to curb human passions and overreaction. This system works well during times of incremental social, political and economic change—what Thomas Kuhn, in another context, called “normal science.”

But during times of dramatic change (“paradigm shift” is Kuhn’s much misused term for it), law regularly fails, and throughout history the introduction of breakthrough technologies invariably lead to these failures which, in legal terms, are called “revolutions.” Feudalism came about in response to the introduction of the stirrup (and with it a mounted cavalry, who needed an indirect means of supporting themselves), and the U.S. Civil War was driven by early industrialization, particularly the cotton gin.

There’s no doubt we’re experiencing paradigm shift now, and perhaps one reason the term has become hackneyed is that the basic technology—the semiconductor—driving much of the change has continued to get faster, cheaper and smaller for much of its existence. Revolutionary change is actually accelerating, and as it does, so do the incidents of conflict with the old legal system.

Revolution is inevitable, but it needn’t be violent. History has plenty of examples there, too.