Abstract
This chapter explores how large technology firms and intellectual property (IP)-skeptical advocacy groups formed an “accidental alliance” to weaken IP protections. Tech companies, seeking lower costs and reduced legal barriers, align with ideological movements favoring open-source models and free access to information. The “accidental alliance” is made up of three groups: Tech firms, thought leaders, and end-users. Together, they form a powerful coalition that promotes weaker IP protections by aligning economic and ideological interests. This alliance provides tech firms with intellectual and public support, making it difficult for IP-reliant businesses to advocate for stronger protection. This development has led to the commoditization of IP assets, exemplified by Microsoft’s Internet Explorer strategy, Google’s Android and Maps, and broader industry lobbying efforts. While consumers might benefit from free products, weaker IP protections may undermine innovation by favoring dominant firms. It is highlighted how legal, economic, and ideological forces shape modern IP policy.
Chapters in the Book:
- Part I – Concepts and Background
- Chapter 2 – The Accidental Alliance (p. 29-58)
Summary
2. The Accidental Alliance
Large tech firms have lobbied for weaker IP rights, using public interest arguments to lower costs and reduce legal complexities. Likewise, scholars and advocacy groups with ideologies that disfavor property rights support these views, influencing policymakers. This alignment has driven the legal commoditization of IP assets over the last three decades. The “accidental” alliance is rooted in the convergence of business interests of large technology platforms in weaker IP and the ideological preferences of policy advocates. However, weaker IP rights may harm innovation by limiting diverse business models, benefiting dominant tech firms at the expense of broader economic growth.
2.1. The Commoditization Logic
An example of the logic of commoditization through patent law in the U.S. innovation economy can be seen in the 1994 Netscape case. Here, Netscape launched Navigator, the first widely accessible internet browser. Microsoft, Netscape’s competitor, saw it as a threat to its own business. It feared developers would prioritize Navigator over Windows. In response, Microsoft invested heavily in Internet Explorer and bundled it for free with Windows, undermining Netscape’s paid model. As a result, Navigator’s market share decreased from 90% in 1995 to near extinction by 2008. Then, Netscape cut its price to zero and released its source code but was eventually acquired by America Online.
In summary, while Microsoft’s strategy benefited users with free browsers, it raised concerns about competitive fairness and market power. On one side, in the short term, users benefited from free browsers and integrated functionality. On the other hand, in the long term, competition suffered as, without direct browser revenue, new entrants faced higher barriers. Today, browsers remain free, generating profits through traffic-driven services. Microsoft’s approach was not unusual but a common business tactic in tech markets, where firms with diverse product lines use commoditization to force out single-product competitors.
2.1.1. Android Operating System
Google has similarly leveraged this strategy in various markets, such as in the case of its Android Operating System. It developed Android using the open-source Linux kernel and licensed it for free. As a result, Android was rapidly overtaking Nokia’s Symbian Operating System (OS). By 2013, Android held over 80% of the global market, leaving Apple’s iOS as its main competitor. This dominance allowed Google to profit by driving traffic to its advertising services. Like Microsoft’s browser strategy, Android’s commoditization had mixed effects: consumers benefited from lower costs, but competition in the OS market was disrupted as rivals struggled to monetize their OS. Nonetheless, the zero-cost model of Android lowered entry barriers for handset manufacturers. However, its dominance may have reduced long-term competition by making it difficult for standalone mobile OS providers to enter the market. This is because future entrants must now develop both, an OS and a complementary revenue-generating product. In conclusion, while Android increased ecosystem integration and user convenience, it also raised entry costs in key parts of the smartphone market.
2.1.2. Google Maps
Another example is Google Maps, launched in 2005 and made free for smartphones in 2009. The free GPS-enabled navigation service it provided disrupted standalone GPS device makers like Garmin, causing their market shares to collapse. Consumers benefited from a high-quality navigation service on their smartphones at zero cost, but competition in the segment weakened. New entrants must now offer a complementary revenue-generating asset or be acquired by a larger platform, as seen with Waze’s 2013 sale to Google. Under a more secure IP environment, Waze might have remained independent and licensed its technology broadly, which could have fostered greater competition in digital mapping services.
2.2. A Commoditization Shortcut
Commoditization strategies (like those used by Microsoft and Google) can secure companies market dominance. Yet, they bring significant risks and limitations. First, commoditization is costly and uncertain. Microsoft invested over $100 million annually in Internet Explorer, with no guarantee of success. If America Online had leveraged Netscape Navigator effectively, Microsoft’s strategy might have failed. Second, there is a risk that legal and technological constraints prevent commoditization. Microsoft succeeded because Netscape lacked strong IP protection. In fact, Microsoft was only able to develop Internet Explorer because it licensed the Mosaic browser technology from Spyglass (a smaller firm in the browser market). If Netscape had held key patents, Microsoft might have been unable to replicate its browser’s functionalities. The result would have been that Microsoft’s Internet Explorer would not have been able to compete with Netscape Navigator. If Netscape had strong patent protections, Microsoft had three main options. It could acquire Netscape (which would have been likely blocked by antitrust laws), license Netscape’s technology (which Netscape rejected), or launch a potentially infringing browser and fight the resulting legal battles. A fourth, more effective and lower-cost strategy would have been to lobby for legal changes that weakened Netscape’s IP protections. By aligning with public interest groups and advocating against browser patents, Microsoft could have devalued Netscape’s competitive advantage, making imitation cheaper. Policymakers, favoring consumer access to free software, would likely have supported such efforts, making Netscape’s counter-advocacy difficult.
2.3. Commoditization by Law
A firm can commoditize a competitor’s IP through business or legal strategies. A business strategy for example develops a comparable product, gives it away free-of-charge, and profits from complementary goods. On the other hand, a legal strategy persuades policymakers to weaken a competitor’s IP, enabling legal imitation or neutralizing legal threats. Success of such strategies depends on matching with policymakers’ policy preferences.
A legal strategy thrives by alignment among three groups: First, tech firms, whose businesses monetize R&D internally, use IP giveaways, or rely on IP assets. The second group are thought leaders. They consist of influential academics and advocates that are skeptical of strong IP protections. Finally, the third group are end-users. They make up a large, disorganized group, who benefit from free, IP-based goods. This coalition grants tech firms intellectual and public support and makes resistance difficult for IP-reliant firms advocating for stronger protections. Thus, tech firms, thought leaders, and end-users form a powerful coalition that influences policymakers to favor weaker IP protections. Consequently, IP-dependent firms struggle to gain support since their policies oppose the public preference for free access. In addition, policymakers tend to coordinate with this coalition to maintain goodwill and political survival.
2.4. Software Utopians: The Curious Origins of the Accidental Alliance
The weakening of IP protections by large tech firms was not based on a long-term vision by these companies. Rather, it was based on an ideological shift within early software communities. This shift predated the launch of the personal computer and the commercialization of the internet that opposed strong property rights. It was here, where the “information wants to be free”-belief is rooted in. This phrase stems from the idea that informational goods can be infinitely copied without depletion. Crucially, it was this perspective that influenced IP policy and fueled the open-source movement, which promotes free distribution and modification of software. Open-source licenses often include “viral” clauses, requiring derivative works to be shared under the same terms. Today, we see the open-source model often cited as proof that innovation can thrive without strong IP protection. Advocates of this idea argue that we can ignore production costs in these markets and that meaningful innovation occurs without exclusive legal rights. However, most successful IP-free innovations, like cuisine and fashion, involve low-cost creative efforts.
2.4.1. Linux OS Project: Origins and Development
A closer examination of open-source software challenges the assumption that high-value innovation can rely solely on volunteer contributions. As an example, one can look at the Linux OS Project. The Linux OS is generally described as the most widely used open-source application and therefore might appear to illustrate the feasibility of a non-proprietary model of intellectual production. However, its success depended on major corporate sponsorship. IBM invested over $1 billion and provided engineers to the project, while other tech firms contributed most of the code. By 2008–2009, over 80% of Linux’s development came from paid contributors. This challenges the claim that volunteer-driven models alone can sustain large-scale software projects. This is not to say that the altruistic and ideological motivations behind the Linux project are immaterial. Rather, the ideological motivations behind the Linux project were crucial for its initial success, because they attracted contributors who believed in sharing-based software production. However, concerns about the potential commercialization of the project exist, such as restricting access or transferring control to profit-driven entities. It is most likely that the success of Linux relied on both ideological and profit-driven motivations. This interplay helped Linux thrive and gain widespread adoption.
2.4.2. Linux OS Project: Rationals and Implications
It is understandable that the Linux OS project was attractive to programmers driven by the ideology of a voluntary IP-free model of software. However, the profit motivation behind corporate sponsorship of this project is less clear. Yet Linux is attractive for companies like Red Hat that provide services like support and customization for the program. Some firms use Linux code in hardware or software products, reducing input costs. Others, like IBM, commoditized the OS to shift value toward their competitive strengths, like server hardware, while challenging rivals like Microsoft in the server market. To some extent, this strategy mirrors Microsoft’s tactics against Netscape in the browser market. Furthermore, the Linux-IBM alliance shows how ideological “information wants to be free” supporters and profit-driven firms align through IP giveaway strategies for complementary value extraction.
Expanding this idea to politics requires convincing policymakers that weaker IP laws align with public interests, gaining political goodwill. As open-source software zero-price model benefits users, policymakers may favor weaker IP protections, driven by both ideological and economic motives. Here, too, the Linux-IBM alliance provides a template for the commoditization of informational assets through the political process. The Linux Foundation’s governance structure, with independent leadership and diffused authority, allowed corporate sponsors to support the project while maintaining its “commons ideology.” This approach enabled Linux to secure broad market adoption despite significant corporate involvement.
2.5. Putting the Accidental Alliance into Action
The IP-skeptical alliance, driven by both ideological resistance and economic interests, has successfully weakened IP rights through advocacy and scholarly support. Technology firms, aided by these efforts, secured legal changes that benefit their business models. In addition, advocacy groups and scholarly commentary played key roles in this success. The converging efforts made by the two members of this “accidental alliance” (and the less successful efforts made by parties with opposing policy preferences) can be observed in data on amicus briefs, lobbying, and other forms of influence investments concerning IP policy.
2.5.1. Lobbying
One component of the alliance is lobbying, which represents the extent to which firms value IP policy. Data is available showing that registered lobbyists must submit quarterly reports detailing their activities. These reports specify the firm represented and the policy matters involved. The number of reports filed annually mentioning patents, copyrights, or trademarks surged from 2008 onward. This increase indicates the rising importance of IP policy for businesses, particularly during key legislative discussions on patent and copyright laws.
Furthermore, there is available data showing the percentage of lobbying reports submitted by registered lobbyists for the five largest technology firms from 2005 to 2018 (Amazon, Apple, Facebook, Google and Microsoft). These reports are related to copyright or patents. Among the five companies listed, Google and Apple accounted for the highest percentages of submitted reports. This suggests that these two firms viewed these policy areas as being of special importance.
Another possibility is to look at the lobbying expenditures surrounding the America Invents Act of 2011. These expenditures highlight industry priorities regarding patent protection. Evidence, detailing spending by various sectors, shows a total of $483 million was spent on lobbying across House and Senate bills. Industries favoring weaker patent protections, such as financial services and digital platforms, significantly outspent patent-dependent sectors like biopharmaceuticals and medical devices. This funding disparity helps explain why the final legislation aligned with the preferences of industries advocating for weaker patent rights.
2.5.2. Amicus Briefs
Additionally, there is data on amicus briefs filed in patent-related litigation before the Supreme Court and copyright-related litigation before the Supreme Court, Second Circuit, and Ninth Circuit during 2006-2016. This data further illustrates the coordination of technology firms, advocacy organizations, and academics in favor of weaker IP protections. Telecommunications, search, and platform companies consistently supported alleged infringers, while semiconductor and software firms exhibited more varied positions. Advocacy organizations overwhelmingly favored weak IP rights, supporting alleged infringers in 81% of patent cases and 67% of copyright cases. Similarly, consumer organizations and library associations frequently opposed IP holders, favoring alleged infringers in up to 88% of cases. Notably, no information communications technology (ICT) firms or their trade associations, such as Computer & Communications Industry Association (CCIA) and Software & Information Industry Association (SIIA), filed briefs in support of patent owners during this period, reinforcing the industry’s broad opposition to strong IP enforcement.
The alignment between technology firms, advocacy groups, and individual end-users likely signaled to policymakers that weakening IP rights would generate political goodwill. Many individual users, whether motivated by ideological commitments to free information or a desire to minimize consumption costs, favor weaker IP protections. In contrast, biopharmaceutical and entertainment firms, which supported stronger patent and copyright protections, took positions that would increase costs for consumers. The natural compatibility between tech firms’ IP skepticism and user preferences was exemplified by the mass protests against the Stop Online Piracy Act (SOPA) and Protect IP Act (PIPA) in 2011-2012. Encouraged by major internet companies, these protests demonstrated to legislators that strengthening copyright protection would be unpopular, leading to the withdrawal of both bills.
2.5.3. Advocacy Organizations
It is widely known that large corporations fund think tanks, industry associations, or other organizations that engage in various forms of (IP) policy advocacy. However, major tech platforms and ICT firms that benefit from weaker IP protections tend to have greater resources, compared to technology innovators and content creators that advocating for stronger rights. Data from 2010 to 2022 illustrates where Alphabet/Google, Amazon, Apple, and Meta/Facebook funded multiple advocacy groups and trade associations involved in IP policy. These organizations typically push for weaker IP protections across Congress, the Supreme Court, or federal regulatory agencies. Among these organizations, Public Knowledge and the Electronic Frontier Foundation have been among the most consistent advocates for weakening IP protections, regarding both patent and copyright laws.
2.5.4. Coup at the Copyright Office?
The effects of this IP policy advocacy can be seen in Maria Pallante’s removal as Register of Copyrights in 2016. This was an unprecedented event, drawing protest from her predecessors and raising concerns about the influence of pro-weak-copyright advocacy on policy. Her views on strengthening copyright protections for individual artists likely clashed with the interests of the “accidental alliance” of technology platforms, advocacy organizations, and academic commentators. Pallante wanted stronger protection for creators, emphasizing their challenges within the existing copyright system. Notably, she advocated for a “small-claims adjudication process” that aims to help individual artists enforce their rights without costly litigation. This idea was later enacted as the Copyright Alternative in Small-Claims Enforcement Act of 2020. Her statements on marginalized creators may have been unpopular with tech and policy groups favoring a more relaxed copyright framework, ultimately contributing to her removal.
Maria Pallante’s opposition to the Federal Communications Commission’s (FCC) “AllVid” proposal in 2016 added to the controversy surrounding her removal as Register of Copyrights. In her letter to the FCC, she warned that the proposal could facilitate piracy and disrupt existing licensing agreements between content providers and pay-TV distributors. Supporters framed AllVid as a way to increase consumer choice by allowing third-party manufacturers to supply set-top boxes. On the other hand, critics argued that it would unfairly shift economic value away from content creators and toward tech companies. By granting outside manufacturers access to pay-TV providers’ digital transmissions, the proposal would have allowed them to index content and offer search functions. Also, it would have enabled them to collect user data for targeted advertising without contributing to the content’s production or licensing costs.
Maria Pallante’s 2016 removal as Register of Copyrights highlights the influence of tech-backed advocacy groups in shaping copyright policy. Public Knowledge, funded by Google and Facebook, accused the Copyright Office of favoring content creators, overlooking the role of strong copyright protections in incentivizing creativity. Pallante opposed Google-supported policies like the AllVid proposal, which would have benefited tech platforms at the expense of content producers. Her sudden reassignment and Public Knowledge’s celebratory response suggested her removal aligned with efforts to weaken copyright protections. Ultimately, this reflects the growing power of a tech-driven coalition advocating for a more permissive IP regime.
2.6. Closing Thoughts
In conclusion, one can say that technology firms have heavily invested in reshaping IP law to favor their business models, which thrive in a weak IP environment. Beyond competing within existing rules, these firms work to change the rules to secure long-term advantages. Their success stems from an alliance between economic interests and ideological opposition to strong IP protections, which policymakers have largely embraced. This “association” has led to significant legal shifts that devalue IP rights and disadvantage innovation models reliant on robust protections.
