File Sharing and Legal Highs Johan Söderberg

6. Comparing two cases of outlaw innovation: file sharing and legal highs Johan Söderberg

6.1 INTRODUCTION

The opening up of innovation processes to users attracts a lot of interest, notably from policy makers and corporate actors. For a long time, studies of innovation scholars treated users and firms as mutually benefiting parties in a collective innovation process. Recently, however, this consensual bias has come under scrutiny. In numerous case studies, scholars have investigated user innovations unfolding on the ‘wrong’ side of the law. The term ‘outlaw innovation’ has been coined to describe those cases. Interest in outlaw innovation among studies of innovation scholars coincides with the recognition that firms can profit from innovations irrespective of the legal status of users’ practices (Flowers, 2008). This observation is highly suggestive and invites us to ask more in-depth research questions about outlaw innovation. To do so, I draw on a sociologically informed reinterpretation of innovation, here understood as a form of (normative) social action. It follows that innovation processes are inseparable from norms, value conflicts and contested claims about norm-breaking, or, put differently, deviance (Hellström, 2004). The advantage of such a theoretical vantage point is clear when discussing outlaw innovation, where innovation is framed by conflictual relations. Indeed, conflict is the driver of the innovation process. Although this is evident in the special case of ‘outlaw innovation’, the same claim can be made for innovation tout court. This argument is advanced by a comparison of the empirical field the ‘outlaw innovation’ literature has centred on until now – computer hacking and file sharing – with a field where outlaw innovation is flour- ishing but which has not been considered in those terms, the creation of Novel Psychoactive Substances (NPS). The differences between these two empirical fields outweigh their similarities. Differences include the type of control measures and enforcement regimes that are applicable, public

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perception of transgressions in one compared to legality in the other, and variations in market structures, for instance, the pharmaceutical industry is more dependent on public regulations than the computer industry. What they have in common is the presence of a minority of devoted users of the respective industry’s products who do not confer the right to companies to define approved uses, and, furthermore, by defying this right, come up against the law. The confrontation with law enforcement is what compels these users to innovate. Hackers design file sharing protocols and other software tools in order to render intellectual property law enforecement ineffective. This is analogous to how controlled drugs and substance laws are made obsolete through the creation of new, hence unclassified, psychoactive substances. The street name for NPS is ‘legal highs’. The rate of innovation of, respectively, file sharing protocols and NPS substances is faster than legislators can cope with. The contribution of studies of innovation scholars is to demonstrate that, at least as far as the computer industry is concerned, unlawful uses of that industry’s products (that is, hacking, file sharing) can be harnessed by legitimate businesses. In this chapter I argue that the same reasoning holds for the pharmaceutical industry. Of course, the innovation process looks different in the drug market compared to the software market. However, the pharmaceutical industry just like the computer industry tries to involve the users (that is, patients) in the process of drug discovery. It is in this light that one should see the strategic importance of users who experiment with the industry’s products without regard for approved uses and controlled substance laws. With this comparison I seek to substantiate a general claim: industries across the board are structurally dependent on the legal grey zone as an incubator for innovation. By making this claim, I depart from the focus on individual firm strategies that is dominant in studies of innovation literature. The case with legal highs serves my argument because, as often described in relation to drug markets and altered states of consciousness, it throws new light on white markets and normal states of being (Smith and Land, 2013). From such a vantage point, we are invited to ask different research questions about outlaw innovation. For instance: what changes in law are acceptable or necessary if we are to maintain existing levels of regulation and control over innovations and markets stemming from heterogeneous, non-firm actors? I do not aspire to give an answer to this question here. For my purpose it suffices to demonstrate that such questions cannot even be raised if the inquiry starts from a hypothetical firm looking for investment opportunities, that is, the default starting point of most studies of innovation research. The chapter focuses on outlaw innovation to call for more sociologically grounded research on innovation

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that, because attuned to social conflict, do a better job at grasping conflict- driven innovation processes.

6.2 THEORIES ON OPEN AND OUTLAW INNOVATION

As interest in innovation soars, the meaning of the word has become narrower. Originally understood to designate organizational change in a sociological and anthropological sense, it has become associated with technological and commercial improvements (Godin, 2012a). This is not surprising, given that the study of innovation is concentrated to engineering and economic departments. Studies of innovation arose in opposition to neoclassical theory, in which technological change was treated as a residual factor of market exchanges. In its place, studies of innovation scholars build on the heritage of Schumpeter’s evolution- ary economics. Emphasis shifted from markets to institutional change, corporate research and development (R&D) policy and national innovation systems (Fagerberg and Verspagen, 2009). No less than neoclassical economists, however, are studies of innovation scholars geared to the commercial applicability of their findings. The institutional and social aspects of innovation are often treated as residuals, studied solely for their contribution to the innovative performance of firms (Godin, 2012b, p. 412). Over the years, studies of innovation have branched into many niched research communities suh as user involvement in open innovation processes. The key terms, ‘open innovation’ and ‘user innovation’, were coined by Henry Chesbrough (2003) and Eric von Hippel (2005), respectively. In this chapter I use the two concepts interchangeably. The meaning of ‘the user’ differs from case to case. Indeed, the heterogeneity of the actors involved in open innovation processes is the key message of this literature. This point is often asserted against the orthodox innovation studies tra- dition and its preoccupation with states and corporations as sources of innovation (but see Trott et al., 2013). The stress put on the opening up of the innovation process to heterogeneous actors is portrayed as subversive, even emancipatory. It gives this niche area of innovation studies an activist air, at least when compared to the main body of literature of the field. Although said to be subversive, this trend is also supposed to benefit everyone: users, firms and society at large. Chesbrough emphasises how firms can profit from a diversification of innovation processes and a lowering of in-house incumbents. Eric von Hippel foregrounds how users are empowered to invent products that better approximate their consumer

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needs. Both scholars assume, however, that the relation between users and firms is mutually beneficial. The consensual bias has come under scrutiny from within the field (West and Lakhani, 2008). Cases where users and firms are indifferent or even hostile to each other are being investigated. The new direction in research coincides with the recognition that a trustful relation between the firm and its customers/users is not a precondition for the former to extract market- able ideas from the latter (Dahlander and Magnusson, 2005; Schulz and Wagner, 2008). This point has been made most strongly by a group of researchers studying ‘outlaw innovation’. The term was coined by Stephen Flowers. It designates a subset of innovations stemming from unlawful practices by users. Characteristic of such users is, firstly, their hostility towards the supplier’s constraints on the approved methods of product use, and, secondly, that this brings them in conflict with the law (Flowers, 2008). The inspiration to investigate such cases comes from debates among economists about the unintended economic side effects of file sharing. Contra the claims of the media content industry, many economists have argued that unauthorized copying of information can generate revenues for rights holders. For instance, increased exposure of a work of art due to piracy has been shown to increase revenues from secondary markets, such as product placement, advertising and licensing (Montgomery and Fitzgerald, 2006). If firms anticipate piracy in their business models from the outset, secondary markets can be made into more important sources of revenue than the intended market (Bekir et al., 2010). With the term ‘outlaw innovation’, scholars apply this insight to the diffusion of technical and commercial innovations generally. File sharing practices have given birth to numerous technical functionalities and buisenss models in the computer industry. A case in point is the launch of iTunes in April 2003, a download service integrated with Apple’s iPod music player. It was closely modelled after Napster, the first file sharing service in the world. Another example is a protocol for distributed data retrieval launched by Microsoft under the name Avalanche. This time the inspiration came from BitTorrent, a file sharing protocol that, although not considered as illegal in itself, provided the backbone of what used to be one of the largest and certainly most (in)famous file sharing sites, The Pirate Bay. BitTorrent introduced a new way of parsing large files and distributing them over the network, technically superior to older, centralized models for storing and sharing files (Flowers, 2008). Likewise, the subculture dedicated to cracking computer systems has been identified as a source of innovation for the security industry (Mollick, 2005). The video game industry derives many of its ideas from ‘modders’, a subculture of gamers that develops new features in games. These modders circumvent

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technical controls in video consoles, whereby they violate intellectual property law (Schulz and Wagner, 2008). Almost all of the case studies of outlaw innovation have been done in the computer industry. There is no reason, however, to assume that the conclusion drawn from those cases is limited to this sector. The notion of ‘user’ is as context-independent as that of the ‘consumer’ or ‘market agent’, and scholars studying innovation have found evidence of ‘user innovation’ in nearly every sector of the economy. One merit of the notion ‘outlaw innovation’ is that it seeks to describe interdependencies between two adversaries who deny in public that any such relation exists. At least implicitly, studies of innovation scholars acknowledge that firms simul- taneously appropriate ideas from users while combating them with law enforcement powers. Scholars studying outlaw innovation seek to optimize firm strategies for ‘harnessing the hacker’ (Flowers, 2008). Their adopted vantage point is that of a hypothetical firm looking for investment opportunities. It is for this reason that they have not attended to the conflicts over the legislation process that predates the outlawing of the users. The consensual bias persists despite recent interest in studying cases where users and firms are adversaries. Interest in outlaw innovation does not signal a change in theoretical focus of the scholarly community, but rather a change in the business models of the computer industry. The scholars are following the actors rather than putting theory development in the lead. My contention is that this trend in the computer industry offers a starting point for reassessing theories about innovation from the ground up. A proper understanding of outlaw innovation requires a theory where conflict is seen as the driver of the innovation process. Such a theory has been sketched by Thomas Hellström. He interprets innovation as a subsection of social action. With this formulation he draws on some of the classics in sociological theory, notably Max Weber, Karl Marx and Talcott Parsons. Starting with Max Weber, he asserts that an innovation presupposes an actor, be it an individual or a group, that acts intentionally and purposefully to bring about a transformation of some kind. But the conceptualization and execution of such an act presupposes value judgements. This tends to be missed when innovation is studied in a narrow, economic sense, that is, as a new technical or commercial product. The economist’s toolbox has actors, means and goals, but it lacks an idea of social norms that give these meaning. It leaves wanting a reason to act- cum-innovate in the first place. In making this point, Hellström reinstates a well-known functionalist objection to utilitarist thinking (see Joas et al., 2009). He adds, pace Talcott Parsons, that norms in themselves do not suffice to explain innovation. Conformity with pre-existing norms con- tributes to system maintenance and stability. A social system is unlikely to

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promote roles and norms that induce a break with that system. In order to have innovation in a larger social system, the innovating group or person needs to have been ‘incubated’ in a social subsystem where diverging role expectations and norm-driven actions are fostered. Turning to Karl Marx, Hellström concludes that it is in dialectical tension between system and subsystem that innovation takes place (Hellström, 2004). This quick sketch provides a base for reflecting on innovation as social action driven by contradiction and value conflicts. More detail on how those conflicts generate innovation can be found in Robert Merton’s classic typology of deviances. Hellström does not mention it, but the argument above resonates with Merton’s thinking. It was for the same reason that Merton placed deviance at the heart of his reflections on social and cultural change (see Badham et al., 2003). Non-conformity with particular social institutions may represent the beginning of a new institution, with its own distinctive claims to moral validity (Merton, 1968, p. 177). If the goals of the dominant society are replaced with new goals, then it is ‘rebellion’ in Merton’s typology. But if the individual only rejects the prescribed means for attaining goals that have been defined by the dominant society, Merton called it ‘innovation’. The reference case he gave was the poor in a society where success and wealth are held in high esteem but the means for acquiring those goods are not equally distributed. Blocked from regular and legally recognized means for attaining the goal in question, the poor must innovate. This is the case that is typically mobilized to illustrate Merton’s famous ‘strain theory’. He stressed that the theoretical concept should be interpreted more broadly than the example of juvenile dilinquence. I offer file sharing as an example of users who have internalized the ends promoted by the content industry, a desire to watch Hollywood blockbusters and listen to greatest hits, without subscribing to the institutionally prescribed means for doing so. Merton chose the word ‘innovation’ over ‘delinquency’. The words meant the same thing to him but the former was less loaded with negative connotations (Merton, 1968, p. 236). To us, his terminology sounds odd. But it is consistent with how the word ‘innovation’ has been understood throughout most of history. To be innovative used to mean to be a troublemaker, a revisionist or a heretic (Godin, 2012a). Considering the official acceptance of innovation today, it is appropriate to raise the discussion about innovation to a higher, structural level. We can do so with a reference to ‘anomie’. Émile Durkheim employed this term to describe a state of relative normlessness in a society or a group. Merton drew on it to develop his typology of deviances. Anomie creates a disposition for change in a society, but at the price of an attenuation of mutual trust (Featherstone and Deflem, 2003; Johnson and Duberley, 2011).

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The theoretical approach to innovation described above contrasts with a narrow definition of ‘innovation’ as a new technical or commercial product. The latter outlook puts a consensual spin on the word. The shortcomings of such an approach become manifest in the case of outlaw innovation. This is because anyone who says ‘outlaw’ says ‘law’ at the same time. With the coining of the term ‘outlaw innovation’, the historical meaning of the word ‘innovation’, that is, as delinquency, is unearthed. This in turn warrants a reinterpretation of innovation as a form of (normative) social action. Accordingly, innovation is driven by a conflict between, on the one hand, a system of laws and norms and, on the other hand, deviating role expectations and norm-driven actions in a subsystem. Using insight from the studies of innovation literature, firms can tailor business models around this conflict and turn adversaries into sources of innovation and revenue. The concept of anomie shifts our attention from individual firm strategies to society as a whole. Such an elevated vantage point allows us to pose different questions, for instance, how the computer industry has become structurally dependent on practices that concurrently are declared illegal by the state, and, indeed, vilified by the firms themselves (Gøtzsche, 2012). When laws and policy discourses are tailored to the needs of commercial actors who depend on this legal greyzone, paradoxically, anomi becomes part of the normative order. Anomi is the beating heart of a society predisposed for perpetual creative destruction.

6.3 INTELLECTUAL PROPERTY LAW AND OUTLAW INNOVATION IN THE COMPUTER SECTOR

In this section I give a brief overview of outlaw innovations in the computer sector. As the topic has been extensively covered elsewhere, I do not describe hacker and pirate subcultures (Johns, 2010; Fredriksson and Arvanitakis, 2014; Schwartz, 2014). My discussion is limited to demon- strating the co-evolution of technological development and intellectual property law. The story begins with Napster in 1999. It opened up a vast pool of music to users by allowing them to access the files stored on each other’s computers. Napster was shut down by court order in 2001, but this decision only hastened the migration of users to a second generation of file sharing system, where the functionalities of the network were distributed to the users in such a way that no gatekeeper could be identified and held liable (Menn, 2003). By reorganising the network traffic, the act of infringe- ment was placed under the fair use clause in US copyright legislation, which exempts private, non-commercial uses. The record labels responded

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by suing individual file sharers (Leeds, 2007). In spite of heavy fines, deterrence remained low because of the improbability of being caught. The mass of infringements overloaded a juridical system based on the principle that each defendant is tried individually in court. Consequently, the content industry lobbied for cost-effective routines whereby defend- ants could be identified and sanctioned without requiring the intervention of juridical authorities. Such semi-automatic routines were put in place with a law first introduced in France in 2009. Users were threatened with having their Internet access closed down on suspicion of repeated copyright infringements. Although the law was modified after heavy criticism, it triggered a sharp increase in the use of streaming services. The attraction of streaming was that files were no longer stored on the hard drive, and, consequently, the file sharer could not be prosecuted for illegal possession of copyrighted works (Dejean et al., 2010). For a while, and in some jurisdictions, prosecutors lacked support in law as no one could be held responsible for storing files. Another example is how increased legal pressure on file sharing networks has accelerated the transition from public file sharing networks, exemplified by Napster and Gnutella, to private and walled-off networks, such as GNUnet, Freenet and Entropy. More generally, there has been a strong impetus for the development of anonymity-enhancing techniques (Larsson and Svensson, 2010). As this brief overview shows, user innovation of file sharing protocols and development of encryption tools have evolved in tandem with changes in intellectual property law. In order for copyright law to remain relevant for any period of time, legislators must anticipate the hostile responses from hackers. A token of such anticipation is the extension of intellectual property law to safeguard the identification and protection schemes established by rights holders. In the USA, such provisions were enacted with the Digital Millennium Copyright Act in 1998. Corresponding clauses were introduced in the European Union (EU) Copyright Directive in 2001. Anti-circumvention provisions grant copyright owners a cause of action against individuals who either circumvent the technological measures that protect copyrighted works or help others do so with ‘circumvention devices’ (Fallenböck, 2003; Brown, 2006). The so-called “device” is always on the verge of dissolving into the highly generalizable skill of writing software code.. This makes it hard to delimit the sphere of police control, testified to by an excep- tion inserted in the anti-circumvention provision. Both in the US Digitial Millenium Copyright Act and EU Copyright Directive, exceptions are explicitly made for research into advanced mathematics and cryptography. The professional and institutional affiliations of the researcher are used to differentiate cryptographic research from unlawful research into circumvention methods. Professional status becomes a shorthand for the

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intentions behind the research. Otherwise, the device/code offers little ground by which a circumvention device may be demarcated from cryptography, or, indeed, from computer programming in general. Finally, I would like to bring attention to the structural dependency of the computer industry on the legal greyzone. This conclusion follows from studies of outlaw innovation when those studies are set in a larger, societal perspective. As stated above, anti-circumvention provisions target the programming skills disseminated among computer users. Dissemination of such skills is a precondition for open innovation in the computer industry to start with. Innovation flows when those programming skills are mobilized during tension between an imputed desire for consuming the media content industry’s products and a refusal to comply with the institutionally prescribed and legally enforced means for doing so (that is, paying and/or accepting the user licence agreement). Widespread non-compliance with intellectual property law testifies to a lack of legitimacy of this legislation among broad sections of the population (Larsson et al., 2013). Far from being something regrettable, lack of legitimacy is itself a precondition for the outlaw innovation model to work, because otherwise would the users have complied with the law and stopped innovating.

6.4 OUTLAW INNOVATION IN THE PSYCHONAUT SUBCULTURE AND BEYOND

The term ‘legal highs’ first referred to the psychoactive plants and mushrooms that users began taking as replacements for MDMA, better known as Ecstasy. Other terms used include ‘research chemicals’, ‘designer drugs’ and ‘novel psychedelic substances’. I use ‘legal highs’ here because it puts emphasis on the relation between the substance (or innovation) and legislation. This is crucial because the novelty of this phenomenon is not the substances as such. In many cases the chemical has been known for 50 or even 100 years. The novelty is located in the relation between the substance, on the one hand, and the law, on the other, that is, the innovation is not chemical but juridical (King, 2013). It does not consist of any number of novel substances but in the discovery that novelty constitutes a loophole in controlled substance laws. This is the key contribution of the users belonging to the psychonaut subculture. It is true that this discovery has since been instrumentalized by firm-like organizations involved in multiple forms of criminality. That does not diminish the significance of users, but only confirms a common insight in studies of innovation literature: firms are late adopters of discoveries first made by lead users. At this point in the discussion, I need to put more flesh on the

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context-independent bones of the ‘user’. From now on I am specifically talking about users of drugs who identify with the psychonaut subculture. The direct lineage of this subculture goes back to the 1960s counterculture with the discovery that drug control can be undermined through innovation. Although there are earlier examples of this (more on that later), the psychonauts created a collective identity and community around this practice. The founding moment was the banning of Lysergic Acid Diethylamide, or LSD, the emblematic drug of the counterculture. LSD was first synthesized by Albert Hofmann in 1938 on behalf of his employer, Sandoz Laboratories (Hofmann, 2013). For a time, self-experimentation with LSD was kept within closed circles of friends and associates, until Timothy Leary began to disseminate it widely (Schou, 2010). At the time it was banned, the drug had gained cultural acceptance within a large subsection of the population. The law was therefore interpreted as part of the ideological contestation between, on the one side, representatives of law and order (and war) and, on the other side, the counterculture. Differences over values and politics cemented different opinions on the scientific- medical risks and benefits of LSD. The substance was first outlawed in California in 1966, a decision codified in federal US law in 1970, and, a year later, consolidated internationally in a United Nations (UN) conven- tion. It would not make much sense to speak about ‘legal highs’ before the enactment of these legislations and treaties as psychotropic substances then fell entirely outside the register of ‘legal’ or ‘illegal’. After LSD, together with some other popular substances such as psilocybin and DMT (N,N-Dimethyltryptamine), had been declared illegal, the circumvention of legal definitions took on major importance in the nascent, psychedelic subculture. A formative moment was the trial against the hippie-smuggler gang Brotherhood of Eternal Love in 1972, and, in particular, against its legendary chemist, Nick Sand. Charged with the manufacturing of LSD and sentenced to 15 years in prison, Sand’s defence appealed on the grounds that the chemist had not made LSD but ALD-52. The latter compound was closely related to LSD and had the same psychotropic properties, but it had not been listed as a controlled substance at the time of the trial. The defence succeeded in having Sand released on bail, who fled to Canada (Nocenti et al., 2004). Following the ban of LSD, several legal replacements were explored, of which the most popular was MDMA. The molecule was synthesized for the first time by the pharmaceutical company Merck in 1912. Merck did so in search of an alternative precursor that would allow the company to circumvent a patent held by a competitor (Karch, 2011). This shows how central the aspect of circum- venting the letter of the law is to innovation processes at large. The innovation of legal highs is not unique in this regard: ‘How does a competing

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company break into a highly successful monopoly? It tells its research chemists to go into the laboratory and design a new molecule that will get around the letter of the patent law’ (Shulgin and Shulgin, 1997, p. 339). The words are Alexander Shulgin’s, the legendary chemist who rediscov- ered MDMA in 1965, just in time to get around the ban on LSD. MDMA was initially used by psychoanalysts in clinical settings, and the practice was discursively framed as therapeutic or spiritual. The drug caught public attention after more entrepreneurially minded chemists began to manufacture the drug for recreational purposes and for an emerging mass market. The compound was listed in the USA in 1985. A closely related compound that had also been synthesized in Shulgin’s laboratory was adopted as a replacement for MDMA, called MDA (Shulgin and Shulgin, 1991, p. 730). Shulgin’s key contribution to the psychonaut subculture was the publica- tion of Pihkal. The book contains the synthesizing process of 200 novel compounds that Shulgin had discovered while working at home under a licence from the US Drug Enforcement Agency. Instructions for how to manufacture the compounds were provided together with details about dosing and subjective reports on their mind-altering effects. Shulgin’s book, together with Sigma-Aldrich and Merck mailorder catalogues of chemicals, became standard references in the psychonaut subculture and among clandestine chemists. For instance, when MDMA was controlled in the Netherlands in 1988, entrepreneurially minded users started to go through the long list of substituted phenethylamines in the 2CB family documented in Pihkal that were unregulated at the time. Because many of these entrepreneurs lacked the chemistry skills and/or laboratory conditions required to do the job themselves, they arranged to have the compounds custom-made in Chinese laboratories (Interview O, 16 November 2013). Shulgin’s decision to publish the chemical formulas had set an example emulated by his admirers. As important as the laboratory notes was the ethos that he installed in the nascent subculture. This ethos pre- scribes a curiosity towards exploring novel substances, an open invitation to share information among like-minded people, and the imperative of testing a novel substance on oneself before making it available to others (Interview G, 26 May 2013). The psychonauts distinguish themselves from the average, recreational user of psychedelic drugs. Concurrently, they act as lead users and gatekeepers of new substances in relation to that larger, recreational market. Legal highs remained the pastime of a small, esoteric subculture until mounting legal pressure on the precursors and distribution channels of MDMA made the brand-name drug hard to come by. After a seizure by drug enforcement agencies of sassafras oil, a key precursor of MDMA, in Cambodia in 2008, the street price of MDMA rose sharply and purity

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dropped. A drug that became popular in its place was Mephedrone, a synthetic cathinone (Power, 2013). When Mephedrone was subsequently banned in 2010, it was replaced with derivatives from the same family, most notably Naphyrone (Vardakou et al., 2012; Wood et al., 2012). The Mephedrone case is noteworthy also because it demonstrates continued involvement of users in the development of legal highs products. Mephedrone was first sold in 2007 by an Israeli firm. The content of the substance was unknown and the firm, wary about not letting competitors in on the market, refused to reveal the formula to customers. Users on the drug-related discussion forum Blue-light started a collaborative research project with the aim of reverse-engineering the compound. It turned out that the same substance had been created four years earlier by a user without commercial intent. He had made it public on another discussion forum together with the chemical formula and the synthesis process. It seems likely that the firm had acquired the compound from the web forum (Power, 2013). The market in legal highs was created by users, entrepreneurs and start-ups, and they are still contributing to its development through product innovations, something that is acknowledged even in EU policy rapports (EMCDDA, 2012, p. 95). However, testimonies from clandestine chemists and seizures by law enforcement point to a trend where firm-like organizations consolidate control over the legal highs market, while turning the means at their disposal into the innovation process (Europol, 2012; Morris, 2012). In 2012 alone, 73 new substances were identified on the European market, up from 48 the year before (EMCDDA, 2013). The picture is confirmed on a global level in the UN World Drug Report 2013, which noted that the number of new psychoactive substances (251) exceeds the number of substances controlled by the original, international drug conventions (234) (UN, 2013). Novelty is a loophole in sovereign law. More precisely, the checks and balances built into the legislation process are taken advantage of by entrepreneurs and organizations. Those checks are particularly rigid in controlled substance law due to the severe penalties and investigative powers it authorises. Consequently, in many jurisdictions, legislators are responding to the challenge of legal highs by making the legal definitions of controlled substance less specific and more elastic (Kau, 2008; Reuter, 2012). In this response, we can see the same problem that legislators are facing in the domain of intellectual property law: how to anticipate in legal text innovations by heterogeneous, non-firm actors? Legal definitions can be circumvented and rendered obsolete at a pace that legislators, at least if they abide by the checks and balances laid down by the rule of law, cannot keep up with.

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6.5 INDUSTRY RESPONSES TO OUTLAW INNOVATION IN THE COMPUTER AND PHARMACEUTICAL SECTORS

The computer and pharmaceutical sectors have in common the presence of a minority of users, in the first case hackers and file sharers, in the second case psychonauts, who are strongly attached to the products of the respective industry without conferring to that industry the right to define approved uses of its products. In defying the socially prescribed and legally enforced means for accessing the products in question, this minority of users are compelled to innovate around, in the first case, intellectual property laws and, in the second case, controlled substance laws. Computer firms and pharmaceutical firms face similar risks in this regard, either directly from averse users or indirectly from legislators extending control measures indiscriminately to control those users. Because any legal definition must fall short of delineating an innovative practice that, by definition, cannot be fully anticipated at the time of legislation, lawful activities run the risk of ending up being subject to same control measures as illicit ones. An example is the anti-circumvention provisions discussed above. Academic conferences and books on cryptography have been cancelled or delayed out of fear of lawsuits under these provisions (Lohmann, 2010). The same can be said about generic and analogue systems of drug control. Recalling that all the brand-name drugs, heroin, amphetamine, ecstasy, LSD, originated in pharmaceutical laboratories, it is evident that the legal status and therapeutic merits of a compound cannot be derived from the molecular structure alone. For example, diprenorphine is only marginally different from buprenorphine in structure, but with diametrically opposed pharmaceutical effects. The latter molecule binds to opiate receptors in the brain and can be used for heroin substitution or for recreation; the former blocks those receptors, lacks addictive properties and is used as a tracing agent for brain scanning. Under a generic system, both end up in the same legal grey zone (King et al., 2012; Nutt et al., 2013; van Amsterdam et al., 2013).1 My argument hinges on the question of whether this comparison holds not only in regard to the risks but also concerning the advantages the respective industry may derive from outlaw innovation. Before answering this question, I must point to some of the circum- stances that condition the research of drugs differently from the development of software. The computer industry has pioneered the trend towards an open innovation process, inspired by the success of GNU/Linux and similar free/open source software projects. In contrast, the pharmaceutical industry has only taken the first steps towards including contributions from its users (patients) in the drug discovery process. Those efforts come

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up against strict regulations of pharmaceutical markets, warranted by the risk of adverse drug action. Another difference relevant to my argument here is the gatekeeper function of the phycisian, located in between the pharmaceutical industry and the user of prescription drugs. Hence, the transition from a linear, firm-centred innovation model to an open innovation model meanders through regulatory changes, industry lobbying, and phycisian associations. Pivotal here is the regulation of off-label uses of drugs, that is, other uses than those that have been specified in advance and authorized for prescription sales. Opponents to such regulation champion the autonomy of the physicians’ profession. Accordingly, the physician should be given autonomy to authorize, and then report back on, discoveries from off-label experiments with prescription medicine conducted by their patients. A number of therapies have been discovered in this way, underwriting the case against the remaining restrictions on off-label sales (Gelijns et al., 1998; Marks, 2012, p. 121). In particular, there are two major drug discoveries that have demonstrated the merits of an open innovation model, Viagra and Rogain. Both were developed with predefined, therapeutic uses in mind. During the clinical tests, it turned out that Viagra and Rogain had unexpected properties, one counteracting impotency, the other baldness. From this came new diagnoses and much larger markets than originally foreseen (Conrad, 2007, p. 36). Closely entwined with the restrictions on off-label sales is the requirement that a medicine must have proven to be safe and effective in treating a predefined condition. This presupposes a top-down, deductive model of drug development where the use of the drug has been specified in advance. The industry strives to lower the requirement for pre-market, clinical tests of novel compounds, replacing it with a system of post-market surveillance. However, the lesson from Viagra and Rogain is that unexpected side effects can sometimes be experienced as positive by patients- cum-consumers, and, thus, become the starting point of drug discovery. Although the argument for post-market surveillance is framed in terms of risk management, critics have described it as a new innovation regime. Instead of the old, linear and deductive model centred on the laboratory, we get an inductive approach to procuring innovation from users/patients (Langlitz, 2009; Cooper, 2012). The regulatory reforms in the USA that opened the way for post-market surveillance were predated by gay and AIDS patient activism in the 1980s. The activists made the compelling argument that urgency required that medicines were brought to market before all the scientific results had been verified (Epstein, 1995; Messner, 2012). Melinda Cooper adds an intriguing remark to this well-known story. The willingness of this patient group to try untested, experimental medicines on themselves might be explained by the gay subculture having

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already acquired a high cultural acceptance of the risks of consuming controlled substances (Cooper, 2012). To conclude my argument, I must show that besides medical patients and physicians, illicit users of controlled substances can also contribute to the opened-up drug discovery process. This point is most easily established in the area of substitution treatment, where the border line between therapeutic (lawful) and recreational (illegal) use is particularly porous. Subsequently, know-how about a substance gained through recreational use often informs substitution treatment (Jauffret, 2009). An example is buprenorphine. It was approved in France for the treatment of withdrawal symptoms in 1996, several decades after the drug had begun to circulate among heroin addicts using it for self-medication purposes. Awareness about it was passed on to phycisians who informally continued the practice for another decade. Some of the know-how thus acquired, for instance, as regards dosing, was taken up in the official recommendations for pre- scribing buprenorphine (Lovell, 2006, p. 148). Furthermore, treatments of medical conditions that are unrelated to substance use have been discovered thanks to information collected from drug users. An example is a con- taminated heroin-like drug that induced brain damage in some drug users, and furnished the scientists with important clues about Parkinson’s disease (Langston and Palfreman, 1996). Another example is MDMA. Clinical tests have suggested its efficacy in treating post-traumatic stress disorder. The first step has thus been taken towards authorizing this popular drug as a medicine and for regular market circulation (Mithoefer et al., 2011). Likewise, psilocybin-containing magic mushrooms have been found to alle- viate a medical condition known as cluster headache (Sewell, 2008). In both cases, a novel therapeutic use corresponding to a recognized, pre-existing diagnosis was discovered on the back of massive, recreational use of the substances in question. In contrast, the market in cognitive enhancement products is unrelated to anything previously understood to be a medical condition. Students paved the way for this market by diverting medicine initially meant to treat Alzheimer’s disease (Donepezil) or Attention Defecit Disorder (ADHD) (Ritalin) in order to boost their scholarly performance (Greely et al., 2008). The key information on how to use derived medicine for enhancement purposes, as concerns effective doses, delivery routes, duration, adverse side effects and so on, are gathered on a trial-by- error basis and communicated on drug forums and dedicated webportals. That these databases contain information of some scientific and medical relevance is suggested by neuroscientists who now doing meta-data analysis of the anecdotal, subjective reports gathered on one of the psychonauts’ webportals, Erowid vaults. The many inconsistencies in the material accumulated in this way can be compensated for using a sufficiently large

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database and by cross-referencing results with in vitro experiments (Coyle et al., 2012). This information could have broader medical importance because the psychonauts experiment with substances that have other neu- rological properties than just being psychodelic. An example mentioned above are substances suitable as trace materials for brain-imaging (Leth- Petersen et al., 2014). The possibility of indirectly enrolling human test subjects through meta-data analysis is all the more enticing to scientists since the conventional route for researching these substances is blocked by ethical committees and special licences on controlled substances. By impli- cation, however, the self-organized, user-generated databases on controlled substances and derived medicines are put on equal footing with platforms like Patients-like-me, where subjective reports from patients are collected and mined for research purposes. Unauthorized diversion of prescription medicine for ‘recreational’ or ‘enhancement’-purposes and off-label uses of the same products for presumably ‘therapeutic’ purposes blend into one and the same innovation process, generating consumer patterns and shaping market demand for pharmaceutical products. In one sentence: just as hackers and file sharers furnish the computer industry with innovations, the psychonauts have been enrolled as a heterogeneous, non-firm actor in the open innovation model of the pharmaceutical industry.

6.6 CONCLUSION

Taking a foothold in the literature on the ‘opening up’ of innovation processes to users, a group of researchers studying innovation have com- pellingly argued that such users can be found on both sides of the law. The argument is substantiated by abundant examples in the computer industry where innovations stemming from hackers and file sharers have ended up benefiting recognized businesses. Unfortunately, inquiries into outlaw innovation have until now been delimited by the vantage point of individual firm strategies. Consequently, the illegal status of the users is being taken as a given. None of the scholars in question have given any consideration to the fact that the practices filed as ‘outlaw innovation’ were perfectly legal until recently. As concerns hacking and file sharing, the legal status changed with a series of draconian extentions of intellectual property law in the 1990s and 2000s, notably the provisions on anti-circumvention. Furthermore, these provisions were lobbied for by the same computer industry that is now benefiting from outlaw innovation. This suggests that the conflictual relation between user and firm does not begin with a particular unsolicited use of a company’s product or with that company filing a cease and desist complaint. The conflict extends

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backwards in time to encompass the legislation process that rendered some practices illegal in the first place. Conversely, the influence that was excercised by the computer industry over the legislation process has lended hackers and pirates the pretext for not complying with intellectual property laws. Those laws are deemed void of democratic legitimacy (Larsson et al., 2013). These remarks illustrate the centrality of value conflicts and contested claims about norm-breaking and deviance. The sustained failure to reflect on this aspect of outlaw innovation attests to a lacuna in literature on innovation more generally. The shortcomings of a narrow, technical and economic understanding of ‘innovation’ become manifest when this term is applied to cases permeated by conflicts over law and legislation. Drawing on Thomas Hellström and Robert Merton, I have proposed a theoretical reinterpretation of innovation as a form of normative, social action. Accordingly, innovation emerges from the tension between a subsystem where the system’s ends have been internalized but not the institutionally prescribed and legally enforced means for acquiring those ends. It is only from such a theoretical vantage point that we are able to make sense of innovations framed by conflictual relations, indeed, where conflict is the driver of the innovation process. And this observation is not limited to ‘outlaw innovation’. It has a bearing on innovation in general. Merton knew what he was doing when he replaced ‘dilenquency’ with ‘innovation’ in his typology of deviances. Either of those terms can describe a state of lawlessness. To innovate is to be outside-the-law. The examples with hackers and psychonauts exploiting novetly as a loophole in the law are not substantially different from corporations innovating around legal definitions, be it patent law or environmental regulations. The possibility of procuring innovations from adverse hackers and psychonauts becomes a means for corporations to work around society’s regulation of markets. For instance, with the enrollment of self-organized, user-generated databases operated by psychonauts, the pharmaceutical industry can circumvent restrictions on the drug discovery process, such as ethical boards, legal responsibilities and pre-market, clinical tests. The importance of outlaw innovation goes beyond individual firm strategies or the specifics of the computer industry (that until now has been the focus of studies of outlaw innovation). The same trend is detectable in the pharmaceutical industry. When drug discovery is opened up to contributions from users/patients, psychonauts acquire a strategic importance similar to hackers and file sharers in the open innovation model of the computer industry. As firms learn to take advantage of outlawed users, following the advice of researchers of innovation, whole industries grow structurally dependent on the legal grey zone as an incubator for innovation. This urges us to ask more pressing questions about outlaw innovation, for instance,

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what laws are acceptable and necessary if we are to maintain existing levels of regulation and control over markets, given that many of the innovations stem from heterogeneous, non-firm actors?

NOTE

1. Further exacerbating this dilemma, recreational users of controlled substances tend to gravitate towards drugs and precursors that have industrial uses, precisely because those compounds are harder to take out of market circulation. For instance, Gammahydroxybutyric acid (GHB, street name liquid ecstasy) was initially developed as an anaesthetic medicine, but soon became popular among bodybuilders and night- clubbers. GHB has been implicated in fatal emergencies and gained a particularly bad reputation as a rape drug. GHB was consequently banned in the UK in June 2003. The ban can easily be circumvented, however, simply by ingesting a precursor called gamma- butyrolactone (GBL). It is transformed into GHB by the body’s metabolism. In spite of unabated and adverse health effects, GBL was only regulated six years later in the UK, and possession of it remains legal as long as it is not intended for human consumption. Stricter control of GBL would have interfered with its numerous industrial uses, as a paint remover and braking fluid, among other things (Moore and Measham, 2012).

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INTERVIEWS

The chapter is part of a research project about psychonauts, a subculture dedicated to the exploration of novel psychoactive substances and altered states of consciousness. Empirical material was gathered at four psychonaut gatherings in Milano, Amsterdam, Berlin and London, between 2011 and 2013. Qualitative interviews were held with 15 people identifying themselves with the psychonaut subculture as well as with people working for drug monitoring agencies in four European countries.

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Interview A – extracted DMT from phalaris grass, Brussels, 13 December 2012 Interview B – extracted DMT from mimosis, London, 13 July 2013 Interview C – extracted DMT from mimosis, London, 15 July 2013 Interview E – extracted DMT from mimosis using egg white, London, 8 September 2013 Interview F – harm reduction activist (Enlighten & Pillrapports), Australia (skype), 8 September 2013 Interview G – synthesized MDMA on a license, Berlin, 26 May 2013 Interview H – harm reduction activist in organization Daath (Hungary), London, 14 July 2013 Interview I – harm reduction activist in organization Rave & Eve, Berlin, 27 May 2013 Interview J – working with the monitoring of new psychoactive substances in Paris, 5 December 2012 Interview K – working with the monitoring of new psychoactive substances in Belgium, 12 December 2012 Interview L – working with food and health regulation in Tilburg, the Netherlands, 8 May 2013 Interview M – working with drug monitoring in Amsterdam, 14 November 2013 Interview N – initiator of harm reduction and pill testing, Amsterdam, 15 November 2013 Interview O – self-described psychonaut, working in a coffeshop, Amsterdam, 16 November 2013 Interview M – harm reduction activist (Techno+), Paris, 21 January 2013

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