Copyright in the Digital Era Building Evidence for Policy (2013) / Chapter Skim
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2 Copyright Law and Economics in the Digital Era
2 Copyright Law and Economics in the Digital Era
Pages 15-34
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From page 15... ...
. Recognizing that progress in creativity depends critically on the freedom to build upon the ideas and expressions of others and that exclusive rights can at times impinge upon freedom of expression, the evolution of copyright law has required tailoring and balancing to ensure access, facilitate subsequent creativity and innovation, and promote knowledge, democracy, and social discourse.
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From page 16... ...
Availability of microprocessors, the low fidelity of computer peripherals, and limitations of memory storage capacity prevented content from being stored, perceived, and reproduced efficiently on computer devices until the mid-1990s. The rollout of the World Wide Web, with its unprecedented ability to distribute digital content instantly and broadly and at no additional or
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From page 17... ...
As a result, copyright owners have sought to prevent infringing distribution higher up the distribution chain. This has brought into play the online service provider safe harbors that Congress introduced into copyright law in the Digital Millennium Copyright Act of 1998.
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From page 18... ...
he more artistic protection is favored, the more technological innovation may be discouraged; the administration of copyright law is an exercise in managing the trade-off." The Court concluded that imposing inducement liability maintains a proper balance, while emphasizing that "mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability. Nor would ordinary acts incident to product distribution, such as offering customers technical support or product updates, support liability in themselves.
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From page 19... ...
Nor do they tell us what the creative economy would look like under different copyright rules. The committee considered another approach to measuring the economic impact of copyright protection -- the value of the capital stock of copyrighted works themselves in relation to other so-called intangible or intellectual capital assets such as research and development, workforce skills, organizational competence of business enterprises, and other components.
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From page 20... ...
For these and other reasons, it would be unwise to conclude that all of the value of the works counted by the BEA can be attributed to copyright protection. It is nevertheless the case that changes in the value of copyrighted works might reflect changes in the effectiveness of copyright law more directly than would total industry revenues, employment, or other factors captured in the IIPA and CCIA studies described above.
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From page 21... ...
Firms would be and are coming up with other means of protecting their investment in creative activities. THE IMPACT OF DIGITAL TECHNOLOGIES ON CONTENT CREATION, DISTRIBUTION, AND USE IN SELECTED INDUSTRIES1 The relatively recent onset of the digital piracy threat can be attributed to the sheer informational magnitude of music and film and the inability, until about two decades ago, to bring to market affordable, high resolution means for listening to and viewing digital content.
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From page 22... ...
Authors can more easily create and distribute works of authorship using digital technology and networks, yet they and their distributors have substantially lost the ability to prevent or pursue infringing distribution of copyrighted works. The magnitude of these effects on different creative sectors are difficult to quantify, but disruptive changes in traditional supply chains and the destruction of some older business models and enablement of new ones are easy to identify.
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From page 23... ...
Finally, the continuing wide availability of infringing music on the Internet has forced legitimate Internet music services to expand other services -- playback on mobile devices, library management, and navigation -- to make it more attractive for consumers to listen to legally obtained sound recordings than illegal substitutes. New business models in music include: • Digital music stores, such as iTunes and Amazon, selling online the works of musicians and record companies, but competing with file-sharing and other unauthorized versions of the same music; • Ad-supported Internet radio services, such as Pandora, enabled by statutory compulsory licenses of the underlying copyrighted content; • Paid music subscription services, such as Spotify, that do not con vey the full rights of music ownership and provide greater rev enue to copyright owners than ad-supported streaming services; • Music video plays on YouTube providing the copyright owner a portion of advertising collected on each video view; • Social networks enabling major label recording artists and unsigned bands to organize fans to purchase downloads, watch videos, and attend concerts;
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From page 24... ...
For example, paid subscription services limit copying music and prevent access after the subscription period ends. Profits from record companies' incumbent business models have been a disincentive to embrace disruptive innovation.
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From page 25... ...
Consumers now have the choice to download or stream from dozens of online services using subscription, rental, sell-through or advertiser-based business models. Content now available through third party applications is available across many platforms including Android, iOS, and Windows.
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From page 26... ...
Although copyright law and other remedies under the DMCA remain an effective tool against infringing services located in the United States, most, if not all illegal services have moved off shore to territories that lack effective enforcement mechanisms making it nearly impossible to slow the proliferation of infringing download and streaming services. While the motion picture industry has embraced more distribution channels than ever before, the greatest threat facing the industry is the illegal distribution of movies while still in theaters.
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From page 27... ...
The role of copyright law in this growing digital infrastructure is contested, and it is unclear whether the existing framework is sufficiently aligned to enable maximization of these opportunities to enhance and facilitate new directions for scientific research. The role of copyright in the dissemination of scientific information is also debated in the wake of digital publishing and associated disruptions of the classic publishing model that has dominated the sciences since the 17th century when scientific journals emerged to perform the important functions of establishing scientific priority, certifying quality through peer review, communicating results, and providing archival records.
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From page 28... ...
The Public Library of Science (PLoS) , founded in 2001, is the best known online scientific publishing platform based entirely upon the open access business model.
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From page 29... ...
Software represents a growing share of the intangible assets that account for the wide gap between the book value and the market value of many public corporations. Although patent protection for computer software has gained salience during the past decade, copyright has long been the principal form of protection for computer software products.
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From page 30... ...
Consumers lose choice but gain convenience and, arguably, security. Enterprise packaged software is also vulnerable to infringing copying but is more dependent on specialized skills, installation and maintenance.
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From page 31... ...
Here we summarize only the key findings. The Effects of Infringing Copying The effects of Internet-enabled infringing use have received considerable attention from empirically-oriented economists, most of them addressing the phenomenon in specific content industries, mainly computer software and recorded music and more recently film.
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From page 32... ...
Determinants of Infringing Copying To determine the desirable scope and intensity of copyright protection it would be useful to know what factors influence the extent of infringing copying. Again, with only a few exceptions, the studies have focused on single industry -- software, music, or films.
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From page 33... ...
There is inconclusive evidence of how infringing copying and distribution affects social welfare or what kind of copyright regime would redress the problem without excessive unintended consequences. In addition to the characteristics of the literature noted above, the following gaps and limitations, many of them the result of or exacerbated by data limitations, are particularly pronounced:
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From page 34... ...
• Little consideration has been given to the relative costs and effec tiveness of legal remedies (injunctions, civil damages, notice and take down, and criminal penalties) vis-à-vis technical protections (digital rights management and filtering)
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