A proposal to micro-monetize and create an income for shared open designs

Excerpted from Adam B. Levine:

A proposal for “Compensated Open Source Innovation for All“:

“If you have a new, profitable idea and you patent it under the current system, that’s great! But how do you make money with it? You could sell it (if someone wants to buy it, ideas are cheap). If you want to bring it to market yourself, you’ll have to find a manufacturer, financing, packaging, marketing, distribution, and on and on. Most patents are improvements to existing products, so what happens if someone improves your patented idea and patents it themselves? Not only is your old system obsolete, but if you want to upgrade to the newly developed “state of the art” there are very expensive licensing fees or redundant development costs while you re-invent their re-invention of your technology. Talk about wasting time and effort.

Instead, we should take advantage of our digital world – combine the concept of the Creative Commons’ Attribution-ShareAlike 3.0 licensing scheme mixed with an open value transfer services like Bitcoin, while using Ricardian contracts to automate the whole thing.

The trick would be to design the system in such a way so you can have a single object purchased provide value to everyone along the path of its creation. Initially these relationships will be simple, but as the virtuous cycle kicks in things get complicated.

There would be a small submission fee to make sure people bring in designs that are at least a little thought through, say $10. If someone wants to examine your design in detail, it might cost $.50, if they want to print, modify, or use it: $1. Prices need to be low to encourage experimentation and use of existing designs.

The concept at its core becomes the worlds biggest modular “Lego” kit, where any piece of every design can be registered, tagged, and stored by its creator to be used by creators who follow. The fee isn’t a license for use, so much as it is a compensation for the time the new creator now does not have to spend designing the already-existing component, whether for use in a new creation, to produce commercially or just to print once for personal use.

In that $1 for a use fee, at least 50percent should always go to the current creator with payments scaling down to earlier creators, but never ceasing to exist entirely.

With Bitcoin and a project called OpenTransactions, you can transfer values as low as .00000001 bitcoin quickly to anyone else with virtually no transaction fees, automatically, with execution based on the fulfilment of pre-determined conditions.

Put simply, if I invent a innovative new doorstopper and upload it to this service, and then you came along and wanted to print it, you would take the other side of that contract, and in exchange for $1, have it sent to an automatically-generated bitcoin address. You would be sent the file and granted a license to print or modify under the condition that you make any improvements available under the same type of licensing conditions.

As the content creator, I only make and sign this contract once and then just put it out there for as many people to take me up on it as like my product. This remains just as true if my doorstopper is the 5th generation of novel improvement on that doorstopper, except there the $1 sent to the generated bitcoin address would be split up and distributed to all the contributors, based on a diminishing returns algorithm. The more time that passes and the more ubiquitous your innovation becomes, the less you naturally earn per use.

Instead of focusing your time and energy on protecting your ideas and technology, it is suddenly in your best interest to make sure as many people see your innovation as possible, and if someone wants to improve it, that’s great! Not only do you have a monetary interest, but you can cheaply use their improved version and then build your own improvements on top.

For manufacturing, this means instead of having a contract with a content owner to create 100,000 of their product every six months, they could become “local manufacturing centers” that can make anything with designs acquirable through this system, paying $1 for each time they print a design and charging the customer the difference between the licensing and material costs, based on the prevailing market rate. For an additional premium, customers could work with a designer to customize the product to their tastes.

For the creator, everything you build goes into the library, and if you tag your part correctly it will come up over and over as future innovators look for components to derive from, or consumers decide that they want your product created at a hub. This gives you control over what requires your time – your designs all have long tails, so you can stay focused on improving new ideas rather than protecting the ones you’ve already created.

This is a big problem; please tell me where I’m wrong and explain to me the things I just don’t understand. Until then, I think this could be a better way for a more productive and open future. It could quickly create a library of quality, constantly-improving designs that could be cheaply licensed and thus competitively manufactured in all localities while still providing value to the minds behind the design.

People want to create, and do it despite the hostile and confusing IP environment we find ourselves in. We might have continued along without having this conversation if it weren’t for all those hobbyists trying to make their dreams real, but that just isn’t the way things are headed.”

1 Comment A proposal to micro-monetize and create an income for shared open designs

  1. AvatarNick Taylor

    I think that’s an absolutely terrible idea – it creates innovative drag at every new point.

    We shouldn’t be trying to dream up new ways of allowing people to get “work once and get paid forever” in the shape of monopoly rents on information, we should be freeing information from monopoly rents completely.

    This is The Past trying to extract rent from The Future.

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