Crafting a +1 long sword is a pretty straightforward process. The crafter – a mage/blacksmith – takes an order from some rich adventurer. She reaches out to Dwarven suppliers somewhere in the Black Hills about twenty miles away. She negotiates the purchase of the magical base material of choice (mithril, adamantium, etc.) in some known lot quantity. She’s a steady customer who does good business with the Dwarves, so they’re incentivized to keep their prices low and fair. It’s better for the Dwarves to sell at consistent price where they make a small profit over a long time than one big profit off one sale. Relationships matter in the magical crafting business.

Then, the mage/blacksmith goes about making a thing. It’s more art than magic. Many laborious hours later, and after an apprentice lights himself on fire, she finishes the sword. She sells it to the adventurer who initiated the order for some price (material + labor + margin). Then, if she’s smart, and she is, she feeds the margin back into her business and forwards some of the proceeds back to her Guild.

She begins work on the next order.

When the wizard crafter hands the sword over to the adventurer, she has no fear of intellectual property theft. It’s a sword. The only way the adventurer gets her magic sword is if he pays for it. If the adventurer could also make that sword, he wouldn’t be an adventurer. He’d be a wizard crafter in the wizard crafter Guild. It’s a safe profession with a more predictable profit curve than wandering dungeons, killing trolls, and rolling them for pocket change and minor healing potions.

But what about the wizard who sells spells for a living?

Spells have a special problem: they’re information. Spells are knowledge which, when learned, perform a specified effect. When a fellow magic user purchases a magic missile scroll and learns magic missile, they can, theoretically, cast magic missile or something acceptably analogous to magic missile at will.

Information in an external market has special properties. A potential purchaser needs to understand the spell in sufficient detail to know whether to buy it. The wizard purchasing the spell in the open market must verify the facts to assess if the information is worth the posted price. And to do that, the buying wizard must learn and cast the seller’s spell. It’s the only way to have 100% information about the product.

And then, on learning and casting the spell, the buyer can walk away without compensating the seller. Because now, the buyer possesses the information for free.

Assume, for example, Matthius’s Super Special Cloud of Death Needles (10” radius) is a new spell for sale. No one knows about this spell – it’s brand new. The buyer must understand the spell in enough depth to agree the spell will actually cast something that creates a Super Special Cloud of Death Needles (10” radius). In effect, the buyer must learn the spell, cast it, and verify that it has the effect (and side effects) that it says on the tin.

The buyer and seller have a few options to sidestep the information transfer:

The buyer can 100% trust the seller and buy the spell uncast and assume it will actually cast Matthius’s Super Special Cloud of Death Needles (10” radius). This requires perfect trust in a world of Neutral Evil alignments. The seller may lie, and claim the spell is Matthius’s Super Special Cloud of Death Needles (10” radius). The buyer, who trusted the seller, will discover the truth on the first time casting the spell. It might cast Matthius’s Super Special Cloud of Death Needles (10” radius). It might cast Matthius’s Super Special Cloud of Cucumber Slices (lightly pickled). The wizard does not know until he casts the spell. And, that first cast is most likely in the heat of battle against a raging, stinking otyugh. Fun! Some unknown unknown comes between the buyer and seller. Both may be honest, but the spell may have some unknown consequences that wasn’t documented. The spell may produce death needles, but it’s needles of disease and death occurs over an agonizing 5 year span. The spell produces a death cloud of nettles, not needles. It’s Schrodinger’s Spell until cast. Or, the seller produces some sort of contract that proves validity backed by legal force that the spell does exactly what it says. Fireballs fireball. Magic missiles missile. Sending sends.

In fact, provability is a problem with any spell, not simply a new spell on the market. Without some sort of enforceable contract, the buying wizard, without already knowing the spell, has no method to validate the spell on the scroll casts the effect the seller claims. Without an enforceable document of validity, the buying wizard must learn all spells for free before buying and then test cast.

And thus, wizards, in a world of perfect information, drops the worth of all spells to 0gp.

Wizards like money. Wizard shop tenders like money. So let’s make a contract!

The Wizard Patent Office

For buyer and seller to enforce a contract ensuring the spell works as documented, the two require a third, neutral party: the Wizard Patent Office. The Wizard Patent Office is part of the federal government and the Crown. It’s staffed by wizards tasked with proving new spells are valid and enforcing the rigid requirements of current spells.

As such, a patent is also Crown power manifested. Both Crown Courts and Crown force, both police and martial, back the Wizard Patent Office. Patents exist in a complex body of law designed to keep spell market prices from dropping to 0gp.

A patent is:

A set of exclusive rights granted by a sovereign state to an inventor or assignee for a limited time in exchange for public disclosure of an invention. An invention must be novel, useful, and non-obvious. These exclusive rights granted to a patentee is the right to prevent others from commercially making, using, selling, importing or distributing a patented invention without permission.

For example, should a buyer purchase a spell called Melf’s Acid Arrow, and should Melf’s Acid Arrow carry a patent in the patent office, the buyer knows:

This copy of this spell called Melf’s Acid Arrow will cast a spell;

The spell was invented by Melf; (editor’s note: for purposes of this article, assume a generic Melf, and not a specific Melf)

That spell will be acid;

An arrow is involved;

The spell won’t cast flying carrots or cloud of marshmallows or any other weird side-effects.

Since the buyer and seller agree on this contract – the patent – the seller can negotiate a price with the buyer without the buyer learning the spell before purchase to validate the product. No one else can make an Acid Arrow since Melf holds the patent on this particular Acid Arrow technology. The spells is Melf’s Acid Arrow, not Dude on the Corner’s Acid Arrow.

The buyer purchases Melf’s Acid Arrow for a fair price and transcribes it into his spell book.

As such, since Melf holds the exclusive patent on Melf’s Acid Arrow, Melf can do all kinds of fun things. He can slap a usage license on the spell enforceable by Crown Courts. He can demand additional licensing requirements on the usage of his spell. He can:

Demand wizards only cast the spell under certain conditions under the usage license;

Layer on a “licensing fee” at the point of purchase to extend to the purchasing wizard an up-front fee;

Enforce a payment for licensing fee on every casting.

The third is attractive to wizards running expensive R&D shops. They can demand fees on casting over the life of the patent. And, as this is all about wizards, they love it. They can make money without stepping outside.

They’ve even set up helpful automated systems with Sending-based billing. The Transmuter Bankers provide (at cost) a legal team and a magic system which allows for automatic transference of payments into a patent holding wizard’s bank account on the casting of any spell under a patent license with an identified casting fee.

As thus, spells with a patent in the Wizard Patent Office now come with four different kinds of component requirements: verbal, somatic, material, and legal.

Another example!

Say, Melf sets a casting price. Every casting of Melf’s Acid Arrow costs a mere 2gp. Pretty cheap. A 3rd level wizard, super excited to cast 2nd level wizard spells from her magic book, purchases a copy of Melf’s from the local scroll store for 150gp and signs the End User License Agreement to exercise the patented spell. Built into the fabric of the spell is a “magic casting fee processing unit.” Whenever the 3rd level wizard casts Melf’s Acid Arrow in the heat of battle, the EULA activates. An automatic 2gp transfers from her gold pouch around her waist to Melf’s account managed by the Transmuter Bankers (less transfer, magic and processing fees to the Transmuter Bankers). Should the 3rd level wizard run out of cash, the spell won’t activate. She’ll need to kill more monsters and roll them for cash to pay the future fee.

This is much simpler if the 3rd level wizard also banks with the Transmuter Bankers. Then, they can set up automatic spell-casting direct debit to cover the spell licensing costs.

Patent Trolls, Scabs, Open Source Spells

The patents on the spells are ultimately more valuable than the actual spells. Holding patents is a quick and clear way to a steady incoming cash stream with little to no future maintenance work. These patent fees feed into the financial bottom line of the various wizard R&D guilds. Those guilds use patent licensing fees to feed the expensive maw of constant magic research. And from there, they craft new spells with new patents to add to their portfolio. Sometimes, larger wizarding shops acquire smaller wizard R&D shops (mergers) to gain the small but insanely lucrative portfolio of popular and highly profitable spells.

But, after a while, some wizards quit creating new spells because legal costs are low and licensing fees are high. They make more money squatting on an extensive portfolio of patents with associated licensing fees than crafting new spells. For them, it’s more lucrative to simply go after wizards and wizard shops making “near” spells close to those in their magic patent portfolio than making new art. As an attack maneuver, the wizards squatting on huge patent portfolios pull the smaller shops into expensive and distracting legal suits before the Crown – who enforces all patents in the name of the King – hoping to drown them in legal language and high court fees.

Some say Leomund (again, a generic Leomund, not a specific Leomund you might be familiar with –ed), the wizard of tiny magical residence fame, never actually created any of those tiny hut/tiny house/tiny mansion spells. Instead, he simply bought up the patents from smaller, nimbler wizard R&D shops and slapped his name on the spells. He now sues anyone who makes anything that even looks like a tiny hut-like spell in Court and then collects fees.

And, the life of the patent is typically tied back to the life of the portfolio holder. Once the wizard holding the patent portfolio dies, the patent reverts to the public domain. Anyone can then write a scroll and sell the spell with a free but useful contract. This is why Leomund, holder of the tiny hut empire of patents, is now, secretly, a lich.

To get around the climbing fees, the license agreements, and the legal entanglements, some of the more Chaotic bent are happy to produce and sell knock-off and insanely illegal second-hand spells. Information is still information, learning is still learning, and no one says that names and licenses cannot be filed off and then resold under a less legal name.

Down in the black market areas where the Thieves’ Guild reigns supreme, someone is always trying to pawn off scab and generic spells as the real thing. Instead of Melf’s Acid Arrow, it’s Meef’s Acid Arrow. Instead of Tasha’s Uncontrollable Hideous Laughter, it’s merely Hideous Laughter. Some of these spells are simply copies of spells that have passed out of patent and are now public domain. Others are clear knock-offs. Scabs. They might do what they say on the label. They might not. But they certainly are cheaper: no licenses, no license fees, no legal entanglements, no requirement for legal advice before scribing a spell into a spellbook. And the smiling Deep Elf with the huge basket of scrolls may or may not be particularly trustworthy. But these are cheap. Super cheap. Buy one. No, buy two! Two for the price of one!

And scab spells are super illegal, which is why Crown Patent task forces constantly shut scabs spell sellers down. but hey, money goes where money goes. Even after a huge crackdown on the docks, two days later, the scabs are back, with their popups, selling three spells (three!) for the price of one.

The wizard R&D shops claim this is all putting a real chill on future magic development. Between the big shops with their portfolios, the buy outs, the scabs, and once great wizards turning into litigious bastards, magic development has slowed. But, it still manages to lurch forward and young wizards get creative with their new and stranger magic creations.

And how they’ve gotten particularly creative is with a new movement of Open Source Spells. To solve the knowledge paradox – needing perfect knowledge of the information before purchasing the information – they simply give their knowledge away for free. After all, the wizard would walk away after learning new knowledge and pay 0gp anyway. Anyone can take this knowledge, if they can find it. And anyone can use it. Cast the spell as is! Use it to remix new spells! Set knowledge free!

This has worked to some positive effect: new magic and new ideas have entered the market without fee entanglement. There are new, creative licenses applied to the Open Source Spells otherwise not applied to the more corporate magic. Even though the spells are open for anyone to find and use, they may not work, they may not cast in battle, and they may no longer be supported. They are all cast at your own peril.

In some areas of the market, OSS has been effective for moving forward magic R&D and technology. New, nimbler ideas have entered the market: Fireball that no longer requires bat guano, Lightning Bolts that don’t hit team members, illusion spells that are harder to disbelieve. And this led to a wizard punk movement, where wizards only use OSS spells and eschew the normal, expensive, corporate spells. The OSS spells, they claim, are better than the pay-for spells and don’t require paying fees. Besides, wizard punks like to find bugs in the OSS spells and send patches via their own hacked together Sending spells to the originator (where the change might or might not be accepted.)

Of course, all the wizards working on OSS, if they’re particularly smart and nimble, gain attention. They get followings. They gain a seat at the Guild table. And eventually, they get bought out with entire dragon horde’s of gold pieces by one of the big wizard R&D shops. Their OSS disappears from the market of ideas entirely into patents. Where the spells are sold at standard wizard spell stalls with the standard EULAs.

So it goes.

Image Credit: Art by Jaydot Sloane of Vanity Games – http://www.patreon.com/VanityGames