User Innovation

Overview

Wednesday, 2:30-3:30pm
Format: Introductory Remarks followed by Lecture and Discussion
Leads: Eric von Hippel, with William Fisher
Potential Commentators: Charlie Nesson, Yochai Benkler, Chris Bavitz, and others

This case study build upon the IP session and will explore the creation of unique works, free and fair use, and other related issues through the prism of user innovation. Eric von Hippel will begin the discussion with an overview of new forms of user creativity and production in the online space, facilitated by the proliferation of freely available information online, the ease with which people can communicate digitally, and advances in innovating technology. This overview will segue into a discussion moderated by William Fisher, which will engage von Hippel and others in exploring models that exemplify the benefits of cheap and easy production while also examining the challenges such as copyright issues surrounding the reappropriation and alteration of original sources that may inhibit users’ capacity to innovate.

Required Readings

• Eric Von Hippel, Democratizing Innovation, (Cambridge:MIT Press) 2005. Please read Chapter 1 for an overview.

Recommended Readings

• William W. Fisher, The Implications for Law of User Innovation Minnesota Law Review, Vol. 94, No. 5, (May 6, 2010).
• Karim R. Lakhani and Jill A. Panetta, "The Principles of Distributed Innovation", Innovations: Technology, Governance, Globalization Summer, Vol. 2, No. 3, 2007; The Berkman Center for Internet and Society Research Paper No. 2007-7.
• Eric von Hippel, The Sources of Innovation, (Oxford: Oxford University Press) 1988.

Related Cases and Examples

• Bug Von Hippel

Student Reflections

Andrew Pearson
Lowell Battles
Pooja Patel

In his session, Professor Eric von Hippel of the MIT Sloan School of Management presented an overview of user creativity and production, and how it has taken new forms in the online space. The traditional producer-centered model of innovation, or the “Linear” Innovation Paradigm, contrasts with a newer user-centric innovation model. While the idea of manufacturers identifying user needs and creating products was always assumed in the field of economics, it was never fully explored. After one of these explorations, a three-tiered model arises wherein i) users would innovate; ii) other users would replicate and improve the product, while once the market signal was fully developed; and iii) producers would finally enter and understand the need for a certain product.

Professor von Hippel notes that Professor Fisher’s earlier welfare argument begins to unravel where innovations actually come from and what the motivations of those innovators are. John Heysham Gibbon -- the inventor of the heart-lung machine -- serves as an example for the fact that the “functional” source of innovation depends upon the functional relationship between innovator and innovation. In other words, when the developer of an innovation expects to benefit by using it rather than selling it, it is a user innovation and not a manufacturer innovation. To manufacturers, these user innovations do not appear to be polished “products” -- manufacturers thus undervalue the role that users play in this process. The users demonstrate that a particular modification or innovation has both value, a use, and a function, where manufacturers enter the market years later to make a polished and sale-ready product.

The data show a high level of consumer and user innovation in the consumer goods arena, which the creator nearly always shared for free and was not motivated by profit from sales. This new model is facilitated by the ease with which people can communicate and share a wealth of available information online, as well as advances in innovating technology. Similar to Professor Benkler’s commons-based peer production, this data shows this new form of sharing user-created innovations. This new model also shows users self-incentivizing – they rely on their private benefit to reward themselves for what they create. In contrast to the traditional model with patents incentivizing the creator of a work, with this new model, new policy tools may be relevant – users may be willing to give away their product for free, but not willing to work hard to induce others to adopt.

While these models can exemplify the many benefits of cheap production, they may also be used to research problems such as copyright issues concerning alteration of original sources that may inhibit the ability of users to innovate. As an example, although the DMCA has been developed to prevent piracy, the problem is that it also catches user innovations in the net – we must develop new models where we can separate out curtailing piracy without stifling a place where new innovations can grow. Finally, this new understanding of the process of innovation can act as a critique of the current apparatus of patent law. Should the problems of the extreme cases of patent law – such as in the pharmaceuticals industry – be incorporated in a revised and more sophisticated model or be a more fundamental critique on the monolithic structure that is the modern patent system?

A few open questions resulting from this discussion remain:

1. How can we harness the creative power of users who come up with innovative ideas, yet may lack the technical expertise and/or sufficient resources to execute their ideas?
2. How is the SCOTUS's recent Global Tech decision on inducing infringement going to affect user innovation, particularly in the software development realm?
3. Could the observation of the phenomenon of user innovation be used to help industrial R&D? (Should industrial R&D focus on basic research because applied will come from users?)
4. User innovators' motives are largely for personal need. Do you agree that this is very much the same for large corporations who are part of the open source community? Think of the biggest contributors to the Linux kernel.