The Knockoff Economy

by Kal Raustiala

  The initial reaction to Leach’s spread offense was, as with Walsh’s West Coast Offense, contempt. The second reaction, just as inevitably, was imitation. Teams on both the college and pro levels adopted various forms of the spread—Rich Rodriguez developed a “spread-option” offense at West Virginia and Michigan, and in 2007 the New England Patriots used the spread and compiled a perfect 16–0 regular season.

  There are many other variations and plays we could recount. But we think the basic point is clear: football is a very innovative sport. And rules about copying have played almost no role in shaping that innovation. It is not as if the NFL is unaware of intellectual property. The league and team owners employ some very expensive lawyers, and they are highly attuned to the value of things like trademarks. But to our knowledge no football play or formation has ever been patented, or successfully claimed to be copyrighted.

  And this is not because there is an insuperable legal barrier. Crazy as it seems, a football formation might be copyrighted as a sort of dance. In fact, that is exactly what James R. Smith tried with his I-bone (though his effort apparently failed). Choreographic works are specifically mentioned in the US copyright statute as protectable. And formations and plays are, broadly, a way to choreograph the movements of a group of athletes. If an innovative coach or player could successfully copyright a formation as a piece of choreography, rival teams could not copy it.* But no such claim has ever been upheld or even seriously attempted, to our knowledge. It is also possible that patent law might protect these innovations. Patent protection extends to new and useful “systems,” and a formation or play might be characterized this way. It might also be characterized as a “method of doing business,” which is also patentable, with some restrictions, under American law. (Football is nothing if not a business.) In sum, IP law might conceivably protect gridiron innovations. But it never has.

  Why then do football coaches continue to innovate, even when they know their rivals will study their innovations, copy them, and even use these innovations against them? We think there are several reasons.

  First, as the previous stories suggest, innovations in football often involve coaches who are struggling to find a way to win with players of inferior talent. An effective innovation may be the only way to level the playing field, at least temporarily. So competition spurs teams to innovate, even if in the long run these innovations will be adopted by opponents. This dynamic of innovation by competitive underdogs is by no means limited to sports, of course. But football, with its intensive rivalries and big money riding on winning seasons, highlights how important competition can be to spurring innovation.

  Second, and related, all football coaches are short-term thinkers. The rewards of winning a game can be immense—one Super Bowl victory makes a career—and this means that they are focused on winning now, and less deterred by the prospect of losing their edge over the long term. An innovation that gives any advantage—even a temporary one—is worth pursuing no matter what will happen next week, or next season.

  Third—and perhaps most important—even though there are no protections against copying a successful play in the long term, there are practical barriers that prevent immediate copying. These barriers ensure a brief window during which the innovator can’t effectively be imitated. Innovative offenses and defenses must be understood to be copied. The first time a formation or play is used, it can create a big element of surprise that really favors the innovating team. Once the innovation is deployed on the field, however, reverse engineering is relatively quick. More difficult—or at least, more time-consuming—is the process of rebuilding a team to take full advantage of the innovation once it is understood. Employing any complex offense or defense requires players to be retrained in that system. It also may require a different type of player—for example, the spread offense favors smaller, speedier, and more highly conditioned offensive players and places less emphasis on enormous offensive linemen.

  Economists refer to this brief window as first-mover advantage—the period of de facto exclusivity that innovators often enjoy, even in the absence of any legal protection for their innovations, due to the practical difficulties of copying. If the first-mover advantage is substantial enough, it might offer a sufficient incentive to engage in innovation even if copying is inevitable. In football, where the potential rewards of a successful innovation are large, the time until the reward short, and the period required for successful imitation not inconsiderable, first-mover advantage may be enough to incentivize innovations.

  Pioneers versus Tweakers

  Football highlights another important facet of innovation that deserves more attention. Innovators, like innovations, come in different varieties. Consider one major distinction among innovators. Some innovators come up with something radically different from anything that has been done before. These people—the Thomas Edisons of the world—are the kind that we’re likely to call to mind when we think about innovation.* We will call them “Pioneers.” But the Pioneers aren’t alone. There are many innovators who improve ideas and products by refining or reconceptualizing what others have done. This type of innovator adds something new to a familiar way of doing things, improving and refining it. We will call these people “Tweakers.”4

  Tweakers do not get nearly the attention that Pioneers do. In particular, legal rules about copying are generally focused on the interests of Pioneers. As many observers have noted, IP law often reflects a romantic notion of the lonely Pioneer, toiling away in obscurity while creating a new and great invention. Tweakers, on the other hand, are mostly an afterthought. Yet as football illustrates, Tweakers can be very important to the development of successful, effective innovations.

  Consider one of many examples from the offensive side of football. Traditionally, football offenses were run out of “power” formations like the wishbone. In this formation, the quarterback took the snap directly behind the center, a fullback was behind him, and offset from behind the fullback were two halfbacks. The positions of the backs formed an extended V, in the shape of a wishbone, as shown in the following diagram.

  The wishbone was adapted for a game that focused on running, and it became progressively less effective as the pass became the dominant offensive weapon. The game’s shift toward passing prompted a major rethinking of offensive philosophy, one outcome of which was the spread offense.

  Mike Leach of Texas Tech, as we noted earlier, is typically thought of as the Pioneer who brought us the spread. But perhaps Leach was really a Tweaker. The deep origins of the spread are disputed, but a lot of fans think that the principal Pioneer was Darrel “Mouse” Davis*, who, during the 1970s, ran an early version of the spread called the “run-and-shoot” as head coach of the Portland State Vikings.5 Leach tweaked the run-and-shoot by moving the quarterback from behind the center to the shotgun position (about 7 yards behind the center), moving the running back from behind the quarterback to beside him, and spreading the offensive linemen and receivers farther apart across the field. By doing this, Leach oriented the spread further toward aerial attack—his spread was built around a corps of great wide receivers and threw on virtually every down. The result was an offense that led the NCAA in passing yardage for four consecutive years.

  Leach also tweaked the spread by speeding it up. An ordinary offense runs about 70 plays per game. Working often without a huddle, the Red Raiders averaged nearly 90—and the rapidity of the game plus the speed of Leach’s receivers caused defensive backs to tire and make more mistakes. Perhaps most important, Leach tweaked the spread by spacing out not just receivers but also offensive linemen, leaving gaps as large as a yard or two just in front of the quarterback. A Leach offensive formation often looked like the next diagram.

  Leach’s approach was on one level deeply counterintuitive—the quarterback looks unprotected and communication at the line of scrimmage is more difficult over the greater distance, which makes last-minute reactions to unexpected defensive alignments more difficult. Bu
t it worked, mostly by forcing the defensive ends to start very far from the quarterback. That gave the quarterback an instant longer to read the field or to let a play develop, and it also created more passing lanes.

  How are the run-and-shoot and the spread different from the power formations that preceded them? The wide spacing creates multiple openings to exploit, as the defense is forced to spread itself thinly across the field to cover everyone. In the years since Mouse Davis introduced the run-and-shoot, and Mike Leached tweaked it into the spread, various forms of spread offense have proliferated at every level of football, from high school to the NFL.

  And it has been repeatedly tweaked. One important tweaker was Rich Rodriquez, formerly head coach at West Virginia and later at Michigan. Rodriguez took the spread and moved it back toward a more balanced attack, mixing more runs with passing. And he did this by mashing up the spread with an older offense, the triple option, to create his signature “spread-option.” Like the spread, Rodriguez’s spread-option starts out as a shotgun. Rodriguez also used receivers spaced wide, scattering the defense thinly over the field. Unlike the pure spread, however, Rodriguez used two halfbacks, one on each side of the quarterback. Each of these backs could run the ball or catch passes, and the quarterback often ran as well—see the following diagram.

  Rodriguez’s spread-option was successful at West Virginia, but much less so against Michigan’s powerful Big 10 rivals. Part of this may be due to something we mentioned earlier—it takes time to adapt a team to fit a new offensive (or defensive) system. Rodriguez’s stint as the Wolverines’ head coach started in the 2008 season, and he was out by the end of 2010. When Rodriguez started at Michigan, the players he inherited were not recruited with the requirements of the spread-option in mind. Perhaps Rodriguez set out to change that but simply ran out of time. In any event, systems similar to Rodriguez’s are run by Urban Meyer, formerly at the University of Florida, and by many other coaches in both college and pro football.

  Inevitably, however, the tweaking continues. For example, University of Nevada head coach Chris Ault further tweaked the spread-option by moving the quarterback from the shotgun position to the “pistol”—a position about half as far back from center as the shotgun—with the twin halfbacks slightly farther back (see the next diagram).

  This tweak produced excellent results for Ault’s previously unheralded Wolf Pack in the 2009 season. The pistol puts the ball into the quarterback’s hands a split-second earlier than before, allowing him to lift his eyes sooner and see the play start developing. Additionally, because the halfbacks are slightly behind the quarterback, they can run both outside routes (as with the shotgun) and straight ahead (more difficult from the shotgun). Ault noted this advantage in an interview: “I came up with the name because a pistol fires straight ahead; it’s one bullet straight ahead,” he said. “We still want to run the ball north-south.”6

  Football reminds us that when it comes to innovation, Tweakers can be as important as Pioneers—maybe more so. Pioneers provide big insights that improve the game, but they may be untested or unfocused. Tweakers diversify and improve upon what the Pioneers create, refining the underlying idea into an often-more effective version. And the Tweakers are an important part of football’s continuous creative renewal. By pushing foundational innovations to their limits, Tweakers open up the next round of creativity. What comes after the spread? We’ll know once the Tweakers have finished exploring the spread’s strengths and exposing its weaknesses.

  Tweakonomics

  We want to stay on this point about Pioneers and Tweakers for a moment because Tweakers play an important role in many forms of creative work other than football. We can see this if we take a quick side trip to examine something about as different from football as can be imagined—that longtime fixture of geek culture, the computer programming contest.

  MathWorks, a Natick, Massachusetts, firm that produces software for engineers and scientists, has sponsored a series of online programming contests to promote their MATLAB programming language. In these contests, contestants try to write a program that solves a single difficult math problem in the least amount of time. An example is the classic traveling salesman problem, in which contestants compete to find the shortest possible round trip a salesman can make through a given list of cities. Contestants write computer code to calculate the shortest trip, and then submit the code to the Math-Works contest Web site. Their code is graded not only for how closely it approaches the optimal route but also for how quickly it produces the answer.*

  Contestants can submit as many entries via the MathWorks Web site as they like over a period of several days. Each is scored and the rankings made continually visible to all. At the end of the contest, the winner receives a MathWorks T-shirt and public acknowledgment of his or her victory. That’s it. And for this, quite a few highly skilled people will spend a lot of time—sometimes more than a hundred hours—writing code. A chance at glory within the programming community means a lot.

  Yet here’s an even more surprising twist: after a short initial period of “darkness,” where the submitted code is hidden from other participants, the contest is played out in “daylight”—all of the contestants get to see each others’ code. And they not only get to see—they are allowed, indeed encouraged, to take and tweak what they see.

  These rules lead to an innovation environment similar to what we see in football. Some contestants are Pioneers—they work out a fundamental insight that helps address the problem and submit code embodying it. Others are Tweakers: they take code from their Pioneer rivals, improve it, and resubmit it.

  As more and more Tweakers wring the flaws out of a Pioneer’s code, the solutions to the problem get better and better. More subtly, as the Tweakers push any particular Pioneer’s solution toward its best implementation, the limitations of the Pioneer’s original insight become apparent. In this way, the Tweakers help to prepare the ground for the next Pioneer—someone who comes in with radically different code that avoids the bottleneck that limited the performance of the previous best solution.

  OK, you say, so the Tweakers create some value. But doesn’t any set of rules that promotes tweaking crush the incentive to be a Pioneer? Why would anyone want to work out a pioneering approach to a math contest problem if a Tweaker can simply take it, fiddle with it a bit, and leap ahead in the contest?

  Ned Gulley, the MathWorks guru in charge of the contests, has suggested an answer:

  We find that tweaking is the thing our contestants most often complain about, and at the same time it is the feature that keeps them coming back for more. Our discussion boards swirl with questions like this:

  • Who deserves the most credit for this code?

  • Who is a big contributor and who is “just a tweaker”?

  • What is the difference between a significant change and a tweak?

  These kinds of questions bedevil real-world software projects. There seems to be a cultural predisposition to find and glorify the (often mythical) breakthroughs of a lone genius. Since this model doesn’t always match reality, these questions don’t have satisfying answers. Happily, the contest framework acts as a solvent that minimizes this kind of I-did-more-than-you-did bickering and maximizes fruitful collaboration among many parties…. Part of this successful formula is the fact that we don’t offer valuable prizes to the winners of our contest. The primary reward is social. [B]y way of analogy, suppose Wikipedia contributors were paid large sums of money based on how many of their words persisted in the articles they touched. You can imagine the noise that would result. An enterprise held together by reputation is easily damaged by cash.

  The MathWorks experience shows that there is nothing inherently incentive-destroying about tweaking. Instead, it suggests that people view imitation differently in different contexts, depending on their expectations and the norms of that particular world. Although participants in the Mathworks contests may complain about tweaking, they by and large accept it when t
hey know in advance that it is part of the rules.

  Ned Gulley believes that part of the reason Tweakers are accepted in the MathWorks contests is because no real money is at stake. But in football, where big money rides on every game, we also see lots of tweaking. And we also see a surprising amount of information sharing that leads to tweaking. Rich Rodriguez, for example, for many years ran summer camps where coaches came to learn his spread-option. And as the New York Times described in 2010, New York Jets head coach Rex Ryan’s off-season training camps have become a Mecca for coaches seeking inspiration:

  This is all why, throughout this off-season, springing up like gladiolus along the sidelines of Florham Park, [New Jersey—the Jets’ practice facility], were dozens of coaches in polo shirts and twill slacks, with return airline tickets to Indiana or Hawaii on their hotel bureaus. One week, Jon Gruden, the broadcaster and former Raiders coach, came up from Florida to take the Ryan cure. Then it was Nick Saban of the University of Alabama, college football’s defending national champion, reviewing blitzes. “We’re all copycats,” Saban says. “I haven’t invented anything in this business. I’ve always watched what Rex does.”7

  Coaches are free to copy in football. Many do, and copying is considered neither illegal nor immoral. As a consequence, we see hardly any handwringing about it, because it is part of the background culture and people expect great ideas to get imitated. In this way, we see that sometimes the rules don’t follow morality, but rather that morality follows the rules. What is normal becomes moral.

  There is another example of tweaking so commonplace that we hardly notice it, yet it is central to one of our most vibrant art forms. American copyright law normally forbids the tweaking of creative works unless the creator gives permission. For the last century, however, there has been a different rule for songs—actually, to be precise, for musical compositions, as opposed to recordings of those compositions. This special rule for musical compositions gave birth to what today we know as the cover song. The cover artist must pay something to the original songwriter if she sells recordings of the song. But she doesn’t have to ask permission to cover the song and reinterpret, and tweak it, as she sees fit.