IP law II: LAW AND ECONOMICS OF COPYRIGHTS Flashcards
THE ROLE OF PROPERTY
The protection of property is a “foundational element of liberty and an indispensable component of a just society.”
The enforcement of property rights links with tort and criminal remedies (e.g. nuisance and theft, respectively).
But assigning property rights raises questions:
* nature of that right;
* content of that right;
* scope of exclusivity inherent in that right.
Pareto improvement
Satisfying the preferences of one person without negatively affecting the preferences of others.
Coase Theorem
Under ideal economic conditions, parties’ bargain over resources will reflect the optimal result, no matter where these resources were initially assigned.
Rationality
- Aims towards individual utility maximization
- Rational choice theory aids economists in making predictions over future behaviour that they can then test empirically.
- Rationality assumes:
- cost-benefit analysis
- monotonicity (more is always better)
- irrelevance of sunk costs
- risk-neutrality
- ethics-free
Coase and property (Læs og forstå)
INNOVATION AND THE ECONOMY
From a perspective of law and economics the question is whether authors would create an optimal amount of works without state intervention.
Access to information has changed significantly with technological advances, but intervention in regulating technology can have unwanted spill-over effects.
CREATIONS AS CUMULATIVE EFFORTS
Copyrights systems should protect creators without overly restricting access to artistic creations.
COASE AND COPYRIGHTS
Coase would suggest that the law should (re)construct a bargain between the original and the new creator because that would mirror the optimal outcome.
THE ECONOMIC RATIONALE
Creations are time-consuming, expensive, and risky to produce, but easily copied. If third parties could easily appropriate creations, no one would create.
BUT
Are artistic creations really driven by monetary expectations?
* Ulterior motives;
* Promotion;
* Inherent value of originals.
EXTENDING SCOPE OF PROTECTION
On the one end the type of use against which protection is provided, i.e. copying, performing, distributing, presenting, was incrementally extended.
On the other end, over time a wealth of copyright-eligible material, i.e. books, music, film, computer programmes is now protected.
Economic incentives in copyrights vary with the industry that creates and enforces copyright-eligible material.
LIMITATIONS: ‘FAIR USE’-DOCTRINE
- Legal intervention should focus on the strong protection of individual bargaining (i.e. licensing)
- But legal intervention throuch compulsory license of fair use might lead to efficiency if:
- Maximizatin of collective welfare? Could subsequent work rekindle interest in the original work?
- Purpose of use? Commercial, private, educational?
LIMITATIONS: ‘FAIR USE’-DOCTRINE (Se Slide)
OTHER REASONS FOR LEGAL INTERVENTION (Se slide)
KEY TAKE-AWAYS
1) Law and economics treats copyrights like property rights, applying principles of rationality and efficiency and the Coase theorem.
2) Copyrights are alineable. Coase assumes that the social optimum is achieved if a bargaining between the original and subsequent creators is assumed in the absence of transaction costs.
3) Yet, all assumptions of rationality and efficiency aren’t easily applied. Access to orginial work is essential for creation of subsequent work, much of which is created without strong economic incentives about wealth maximization.
4) Copyright systems nowadays strike a balance that still at times appears too restrictive.
