The Knockoff Economy (2 page)

The argument that copying stifles creativity is intuitively appealing. Who is going to create if others are free to take? Proponents of this view tend to assume that it is self-evident that strong patent and copyright laws are essential to keep creative juices flowing, and that more protection is better than less.

This is one reason that the term of protection under American copyright law has increased from 28 years in 1790 to over a century today. It is also one reason the scope of patents has expanded from things like cotton gins and chemicals to cover a wide, some would say absurd, range of ways of doing business—such as the patent on “one-click” purchasing awarded to online retailer Amazon. (Only the naïve would ignore another reason for this expansion: there is a lot of money at stake in controlling innovations, and those who possess the relevant rights have every incentive to push to make them as strong as they can.)
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The justification for the expansion of monopoly rights is simple: more intellectual property yields more protection, which in turn produces more creativity. Or so the story goes.

This book challenges the conventional wisdom about innovation and imitation. And it does so in a new way. Most of the debate on these issues has revolved around existing industries that are major proponents of strict rules against copying, such as the music business (copyright) or the pharmaceutical industry (patent). We instead explore a variety of industries and arts, like fashion, databases, and comedy,
in which copyright and patent do not apply, or are not used.
In other words, we ask, What happens when restrictions on copying are not part of the picture?

What we find is that even though others can freely copy in these industries, creativity remains surprisingly vibrant. In the pages that follow we will explore a clutch of industries in which copying does not necessarily kill or even impair creativity. In some, copying actually spurs innovation—an effect we call the “piracy paradox.” In others, social norms protect the interests of originators and keep innovation humming. Imitation may also force innovators to structure their creativity in ways that make it less vulnerable to copying. The details vary, yet in all of these instances copying tends to lead to transformation rather than decimation.

Our main message is an optimistic one: surprisingly, creativity can often co-exist with copying. And under certain circumstances, copying can even be
good
for creativity.

This has vital implications in a world in which rapid technological advances have made copying easier and easier. Some believe we are entering an era of cultural and economic decay in which unrestrained copying by “digital parasites” destroys first one, then another, creative art.
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Others foresee an impending utopia of the mind in which creativity and information are set free and available to all. We think the truth is more complex, but also more interesting, than either of these views. Copying can harm creativity and some rules are necessary; we are not IP-abolitionists.
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But the effects of copying on creativity are not nearly as simple as the monopoly theory suggests. The industries we explore tell us that creativity is more resilient than commonly believed; that copying has unappreciated virtues; and that the rise of free and easy copying may, in the end, prove to be far less apocalyptic than many believe.

The industries we look at in this book are often surprisingly big and interesting. Understanding how they work, and
why
they work, is fascinating. We also want to draw out lessons for other industries, such as music and film, which increasingly struggle in the face of rampant, and rising, copying. These IP-dependent industries are certainly different from the industries we profile in the pages to follow.
¹⁰
Yet there are still useful lessons about how and when prohibitions on copying are necessary. This is especially true since copying appears increasingly difficult to stop, even as innovation becomes ever more central to our economy. In this new world, a close look at those industries that
already
survive and even thrive in the face of pervasive copying can help us judge whether the future of creativity is bleak or bright. For reasons this book will explain, we think the future is brighter than many realize.

Here are a few examples of the industries, and the stories, we examine in the chapters that follow.

Walking home one night in Los Angeles with his sister-in law, Mark Manguera had an epiphany. Mexican and Korean were two of L.A.’s street food mainstays. Could the tastes be combined? Maybe he could pull off the culinary version of a mash-up. What if he stuffed a tortilla with… Korean BBQ’d short ribs?

This was the birth of the now-famous “Korean taco”: a concept that fused two of L.A.’s favorite cuisines—both associated with cold beer and good
times—into one delicious combination. Within a month Manguera had teamed up with a friend and highly accomplished chef, Roy Choi. Choi took the idea and made it work. Together, they launched a business to sell Korean tacos out of a truck. They called it Kogi, a play on the Korean word for meat.

In L.A., food trucks are a common sight. But for decades trucks were limited to basic Mexican fare aimed at construction workers and residents of immigrant neighborhoods. Kogi’s insight was to take the concept of a taco truck and tweak it. It was a flash of gastronomic inspiration to combine Korean BBQ with tacos, but it was also a flash of marketing inspiration to offer a more upscale and lively truck experience, one that would appeal to an entirely new demographic.

Still, Kogi’s culinary mash-up was not an immediate hit. The truck parked in a busy part of West Hollywood, yet at first the team couldn’t give their tacos away. But Manguera and Choi weren’t deterred, and they tried some innovative strategies to get the attention of jaded Angelenos. The truck would park near offices by day, residential areas in the evening, and clubs and bars at night. Manguera would hand out free samples to the club bouncers, who loved the food and spread the word to those waiting at the rope lines. Manguera also reached out to L.A.-area food bloggers, and they reciprocated with glowing reviews. And Kogi benefited from the tech savvy of Manguera’s sister-in-law, Alice Shin, who made extensive use of Twitter to help followers to know where the truck was at all times. But the overwhelming reason for their success was the creativity of the Kogi team, who cleverly combined two great tastes that had existed cheek-by-jowl in L.A. for decades, and, moreover, chose to “upscale” the plebian food truck rather than start a traditional brick-and-mortar restaurant.

The rest is food history. In 2010, Roy Choi was listed as one of
Food & Wine
magazine’s 10 best new chefs, and today there are hundreds of gourmet food trucks in L.A. and nearly every other major city in the nation, offering everything from banana pudding to sushi. Inevitably, there are also many knockoffs of the Kogi taco. Even Baja Fresh, the fast-food Mexican chain, began offering one.

From an innovation perspective, cuisine is a lot like fashion. Recipes are unprotected by copyright, so anyone can copy another’s recipe. Actual dishes—the “built food” you order in a restaurant—can also be copied freely. As anyone who has eaten a molten chocolate cake or spicy tuna on crispy rice knows, popular and innovative dishes do seem to migrate from
restaurant to restaurant. The bottom line is that almost anything a chef does that is creative—short of the descriptions of the food in the menu, which are at least thinly protected by copyright law—can be copied by another chef.

Copyright’s purpose is to promote creativity by stopping copying; if everyone could imitate, no one would innovate. By this logic, we ought to be consigned to uninspired and traditional food choices, since in the food world, it is easy and legal to copy. In short, the Korean taco should not exist.

But the real world does not follow this logic. In fact, we live in a Golden Age of cuisine. Thousands of new dishes are created every year in the nation’s restaurants. The quality and variety of American cuisine today is very high, and much higher than it ever has been before. The so-called molecular gastronomy or modernist cuisine movement has innovated in myriad (and often bizarre) ways that have filtered down to more modest restaurants all over the world. But so too have the ideas of many “farm to table” chefs working in cities across America. Television shows such as
Top Chef
and
Iron Chef
challenge contestants to mix and match improbable combinations of ingredients with little warning or time. Our contemporary food culture, in short, not only offers creativity, it increasingly
worships
creativity—and many of us worship it right back. So how are chefs so creative when they know others can copy their recipes?

Louis C.K. is a “comic’s comic,” which is one way of saying that while his fellow stand-up comedians esteem him, he is not exactly a household name. That has begun to change in the last couple of years, however, not least because of his new television show,
Louie.
The show has received adoring reviews, and viewers are beginning to notice.

Dane Cook, on the other hand, is a stand-up comedy superstar. He has recorded five best-selling comedy albums, has a burgeoning film career, and has hosted
Saturday Night Live
twice. In 2007, Cook sold out two shows at Madison Square Garden in the same night. Dane Cook is the biggest thing that the world of stand-up comedy has produced in a very long time. He is, however, not well liked by some rival stand-ups. Some of the bad feeling may just be jealousy. But some is about Cook’s credibility as a comedian. Cook has a reputation for stealing jokes. And the most persistent allegations revolve around three jokes that appear on Cook’s 2005 album
Retaliation,
but which are remarkably similar to jokes on Louis C.K.’s 2001 album
Live in Houston.
^*

Louis C.K. has never said anything publicly about the allegations against Cook. But other comedians and comedy fans certainly have. For the last six years or so, Cook’s penchant for copying, and the specific allegations regarding Louis C.K., were detailed on comedy blogs and in a 2007 article in
Radar
magazine. And then there are the videos on YouTube, posted mostly anonymously, accusing Cook of imitating the routines of a number of other comedians. The allegations clearly have upset Cook. In a 2010 interview with comedian Marc Maron, an agonized Cook insisted that he “didn’t steal anything from Louis C.K.” “How can I really convey to people so that they understand?” Cook added. “I’ve never stolen anything in my life…. I’m not a thief.”

And then, a couple of months after the Marc Maron interview, the Louis C.K./Dane Cook dispute took a fascinating turn: Cook appeared as himself in an episode of
Louie.
In the show, Louie wants to take his daughter to a Lady Gaga concert for her birthday. He approaches Cook, who shares a promoter with Gaga, for help in scoring tickets. The comedians meet in Cook’s dressing room for a face-to-face discussion.

At first Cook is surprised and offended that Louie would ask him for a favor. But Cook agrees to get the tickets for Louie—on one condition: “All you have to do,” Cook says, “is go on YouTube, and tell everybody that I did not steal your material.”

Louie does not respond directly; instead, he denies ever accusing Cook of theft. Cook shoots back that what Louie has done is just as bad: he’s allowed other people to make the accusations, without stepping in to deny them. And then Cook lays out how badly he’s been hurt:

You know what?—I’m excited that you’re in this room right now, because I’ve waited four years to tell you this….

The year 2006 was the greatest year in my entire life. I had a double-platinum comedy album—first one ever to exist. I had a massive HBO special…. 2006—that should have been like my triumph. And I enjoyed it, Louie, for maybe two months. Two months before it started to
suck.
Because everything I started to read about me was about how I stole jokes from you. Which I didn’t.

“I kind of think you did,” Louie shoots back. And then he tells what he thinks happened:

I don’t think that you saw me do those jokes and said “I’m going to tell those jokes too.” I don’t think there’s a world where you’re that stupid, or that bad a guy…. I think you saw me do them—I know you saw me do them—and I think they just went in your brain; I don’t think you meant to do it, but I don’t think you stopped yourself either. And that’s why I never felt the need to help you not be hated by a lot of people.

An exasperated Cook asks Louie again for a public statement of absolution. Louie responds by asking whether Cook would be willing to admit that he did appropriate the jokes, even if inadvertently. Finally, Cook breaks down and says he’ll get Louie the tickets. Nothing has really been settled, but each comic has had the chance to say his piece.

On one level, Louis C.K. and Dane Cook are simply actors playing parts in a TV show. But the dispute they’re spatting over is real, and the on-screen confrontation also says something important about how comics behave out in the real world. When a comedian believes that a rival has used one of his jokes, he doesn’t file a copyright lawsuit. Copyright law technically covers jokes. But because copyright protects the specific expression of a joke, rather than the underlying funny idea, it is very easy to sidestep the legal rule and simply tell the joke in a slightly different way. In practice, this means copyright just does not protect the work of comedians.

But that does not mean comedians stop creating new jokes: in fact, a big part of being a successful stand-up comic is churning out fresh material, not rehashing your greatest hits. The fact that copyright is essentially unavailable to comedians has not led to a decline in the invention of new jokes and routines. Instead, comedy is more pervasive than ever, with a flourishing world of comedy clubs and bars and even Comedy Central on cable television, featuring many stand-up acts. How is it that comedians have managed, without using the law, to reconcile creativity with copying?