Suppose you went to Target to buy a toaster, and on the self you saw two ToastMan® brand Toastsers for sale: A BasicToast system for $19.99, and a ToastDeluxe system for $49.95. Interestingly enough, both toasters are identical – with one exception. The BasicToast system comes with a switch on the back that is set to “BasicToast” which means that, everytime you use it, there’s a 20% chance that your toast will be burned. The BasicToast system comes in shrinkwrap with a license agreement on the front, saying that you agree to not touch that switch on the back if you buy the BasicToast system.
Which one would you buy? It seems to me that you’d have to be pretty foolish to buy the DeluxeToast system because you could just buy the BasicToast system and ignore the license agreement, flip the switch on the back and enjoy your toast burn-free. I have a hard time imagining myself feeling like I was doing anything ‘wrong’ in this case. However, if the ToastMan Company found out that I flipped that switch and sued me, I don’t see how I could possibly win the case.
On the one hand, I understand the buisness model a company would have for making such a decision – it’s basically not too different from offering coupons. Companies offer coupons as a way of snaring customers who wouldn’t normally buy a product because it costs too much. They’re hoping they can reduce the price only for those unwilling to pay the regular price they charge – by making those customers do something inconvenient like saving a scrap of paper and handing it to the cashier. I know if you’re flying Delta out of Cincinnati, it is frequently cheaper to buy a ticket from a flight that leaves from Dayton and stops in Cincinnati. They won’t let you get on the flight in Cincinnati, though, becuase they want to make you “earn that priviledge” by paying more for a ticket – even though it would be cheaper (if only slightly) for them to let you skip the flight out of Dayton.
On the other hand, where do you draw the line? What if NetFlix offered you a discount on renting movies, so long as you agreed to not really enjoy any of the movies you rented? That’s just assinine. I’m a strong believer in enforcing private contracts, but it seems ludicrous to me to prosecute someone for fixing the broken toaster they bought, regardless of whether or not they agreed not to fix it when they bought it. The real issue is why people are intentionally making faulty toasters – what sort of economic system do we have that encourages people to intentionally introduce faults into their products?
If you haven’t figured it out by now, I’m talking about the software industry. I don’t think there’s any way to look at user license restrictions as anything other than flaws. When you buy a computer program and 5 licesnses for the program, and then reverse engineer the code to allow more than 5 users to use the program, you’re doing nothing fundamentally different than buying a BasicToast system and flipping the switch on the back so your toast doesn’t get burned.
I started a discussion (argument) about IP law today at lunch, causing our lunch to go long. My argument was that, althoguh we need IP law to incentivize development of ideas, I don’t think the current system is very reasoble because it encourages people to intentionally break their products, duplicate intellectual efforts, and withold information from others.