Scrabulous scandal

Start with first principles.

Intellectual property right (IPR) laws exist to increase the stock of knowledge in the public domain. Giving innovators a time-bound monopoly hurts the public interest in the short term. But it helps the public interest in the long term, by increasing the rewards on innovation.

Notice that the argument works only if the knowledge created actually filters into the public domain. The argument might work in pharmaceuticals. Patented drugs do become generics in fifteen years.

This is totally not working in media/ entertainment. Private businesses seem to have a lock on media/ entertainment properties pretty much in perpetuity, to a point where I simply can't believe that the public interest is being served.

Take the latest absurd scandal . A company called Hasbro claims to own rights to Scrabble. They therefore claim that the boys who developed the Scrabulous application are violating Hasbro's copyright.

Let's even assume that the corporate lawyers have their papers in order. Where is the moral case here? Scrabble was invented in 1931. Why is this game not in the public domain 77 years after it was invented?

To make this situation even more absurd, Scrabulous is not a knock-off. It is a real value added innovation.

There are any number of small businesses which will print and sell the old off-line Scrabble without paying Hasbro royalties. Seems reasonable that they shouldn't have the right to print and market zero-royalty copies for 15 years. Feels like even the argument breaks down somewhere between 15.01 and 77, but there is an argument.

But with a true innovation - one that delivers massive amounts of additional value to at least some end users - isn't that what IPR laws are meant to be enabling? And these same IPR laws are now being used to prevent such innovation? This is a system that has been perverted to the point of absurdity.

Separately, the business executive in me can't help spotting mutual interest.

I suspect the Agarwala brothers would not be averse to an appropriately valued buy-out. Nothing at all wrong with a buyout. Reminds me of a pitch-your-business-idea-to-venture-capital competition when I was at B-school. Six out of eight teams' exit strategy was to sell out to Microsoft. All that may be going on here is legal posturing by Hasbro to scare the developers into accepting a lower price.

It's just a shame that laws that were initially written to serve the public interest can be used to create the opposite of what was intended.