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The first thing I'll ask you to understand is that public domain is the natural state for information and ideas to be in; things are said to 'fall into' the public domain, which certainly does make it sound like a default state.  In the interim between an idea's or work's conception and its becoming truly 'free,' legal restrictions can be placed on its distribution and use.
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One important thing to note about these restrictions is that they are temporary.  <em>There is no such thing as permanent intellectual property</em>.  Both copyrights and patents expire after a set span of years.  This changed with the passing of the <a href="http://www.loc.gov/copyright/legislation/s505.pdf">Sonny Bono Copyright Term Extension Act</a>, a piece of legislation bought and paid for in campaign donations from Disney.  <a target="_blank" href="http://writ.news.findlaw.com/commentary/20020305_sprigman.html">Here's a good article</a> on the subject by Chris Sprigman of Findlaw.<br />

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Perhaps the most important thing everyone involved needs to recognize is the purpose of copyright is advancement itself.  This point is well made by Justice Sandra Day O'Connor, so I'll borrow her words:
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<em>"The primary objective of copyright is not to reward the labor of authors, but ‘[t]o promote the Progress of Science and useful Arts.'  To this end, copyright assures authors the right to their original expression, but encourages others to build freely upon the ideas and information conveyed by a work. This result is neither unfair nor unfortunate. It is the means by which copyright advances the progress of science and art."

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<em>Justice Sandra Day O'Connor<br />

Feist Publications, Inc. v. Rural Telephone Service Co.<br />

499 US 340, 349(1991)</em>
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 The law ultimately places the public good over the compensation of the individual.  <a target="_blank" href="http://cyber.law.harvard.edu/eldredvreno/complaint.html">A challenge to the CTEA</a> made the argument that the statute infringed on the First Amendment because it "placed a limitation on free speech without advancing any important governmental interest." (Sprigman)  <br />

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Further reading: 
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<ul><li> A lot of these points draw from Sprigman's <a target="_blank" href="http://writ.news.findlaw.com/commentary/20020305_sprigman.html">article from Findlaw</a>, which is certainly better written than this post.</li><li>Paul Graham's interesting <a href="http://www.paulgraham.com/softwarepatents.html">entry on software patents</a>, a phrase that is synonymous with litigious nonsense to the Slashdot crowd. </li></ul>