The Society for Economic Research on Copyright Issues
Aims & Scope
Review of Economic Research on Copyright Issues, Vol. 4, No. 1, 15-25, 2007
This paper analyses the impacts of the recent discussion to extend patentability to computer-implemented inventions, i.e. to allow software patents, in Europe. Based on two surveys among the German software sector referring to the use and importance of IPR in the year 2000 and 2004, the analysis finds that the share of companies using patents in the software sector remains constant, but the relevance of this instrument increased significantly for the active users of patents. Based on a set of hypotheses on the determinants for the use of patents, we also find changes. The size bias of patent use increased, whereas there is a dichotomy between using patents and following the open source model in the software sector and not a convergence, as has been suggested by the anecdotal evidence of some large multinationals. These changes in the software sector generate several new challenges for policy makers responsible for the IPR regime relevant for software in addition to the still unsolved question of extending patentability to software in Europe.Click to read more.
Review of Economic Research on Copyright Issues, Vol. 5, No. 2, 45-70, 2008
The quest for interoperability of interactive TV has been a major concern of the EU Institutions. Its policy foundations were built on the enabling role of open standards, whose peculiar standardization process should guarantee affordable and widespread intellectual property rights. After having received considerable public support and financial funds, the interactive TV roll-out appears disappointing, and the diffusion of the main concerned standard, the multimedia home platform, stagnates. We conduct a comprehensive analysis of the main market facts and passages of interactive TV policy, to derive a multifaceted assessment of its technological, economic and institutional drivers. Several important issues stand out. Besides the inner complexity of the policy, a few normative inconsistencies and conflicting aims adversely impacted its feasibility. Several logical ambiguities also dampened the correct choice of instruments. In particular, the existing literature clarifies two main points: open standards cannot be uncritically assimilated to open source software, and the role of open standards along the broadcasting value chain is largely unexplored. Consequently, their effects here might differ from those experienced in traditional information and communication technologies markets. Finally, a certain evidence of regulatory capture of the EU policy-maker emerges.Click to read more.
Review of Economic Research on Copyright Issues, Vol. 9, No. 1, 3-46, 2012
The Canadian Copyright Act (R.S.C., 1985, c. C-42) includes several exceptions to the exclusive right of copyright holders. Among the most important are the provisions concerning "fair dealing", which state that the use of a copyright protected literary or artistic work for the purposes of private study, research, criticism or review, or news reporting does not constitute a violation of copyright. Our objective in this paper is to characterize the role and nature of this exception from the standpoint of contemporary economic theory and analysis and in the light of the recent Supreme Court of Canada decision on this subject (CCH Canadian Ltd. v. Law Society of Upper Canada,  1 S.C.R. 339, 2004 SCC 13). We propose in the conclusion a market based approach to maximize the dissemination of works while avoiding unnecessary recourse to the fair dealing exception.Click to read more.
Review of Economic Research on Copyright Issues, Vol. 3, No.1, 43-60, 2006
Alan E. Woodfield
This paper generalizes the two-period model of Watt (2000) who demonstrates the possibility of optimal accommodation of a pirate when the royalty rate applying to a creation is uniform and second-period Cournot competition applies. Admitting nonlinear contracts with period-specific royalty rates that leave total payments unchanged, simulation analysis shows that a producer of originals does better to increase the royalty rate in period 1 and decrease the rate to a negative level in period 2, thereby more than offsetting the usual cost advantage available to a pirate. Watt's illustrative examples regarding piracy accommodation (but not piracy exclusion) are overturned when a nonlinear contract is chosen optimally, although accommodation remains optimal in some other cases. Further, where exclusion is impossible under uniform royalties, cases exist where exclusion is feasible under nonlinear royalties. Even so, accommodation may be a preferable strategy.Click to read more.
Review of Economic Research on Copyright Issues, Vol. 2, No. 2, 69-82, 2005
Fabrice Rochelandet and Fabrice Le Guel
The paper investigates empirically the behavior of copiers over P2P networks based on an ordered Logit model of intensity using a dataset collected from more than 2,500 French households. In accordance with the prediction of the Beckerian framework, copying behavior is negatively correlated with the willingness to pay for an original when a copy is available. But individuals also make their decisions according to their social neighborhood and to the degree to which they have learned about copying. Furthermore, we find that copiers are motivated by the search for diversified contents, and they are also very concerned about the interests of artists. We then consider the efficiency of anti-copying policies on the copying of music and movies.Click to read more.
Review of Economic Research on Copyright Issues, Vol. 1, No. 1, 27-40, 2004
Robert Picard and Timo Toivonen
This article explores methods and issues in measuring the contributions of copyright industries to national economies. It reveals the importance of copyright value creation, identifies copyright industries and activities that make economic contributions, discusses problems of measurement, compares methods used and reveals difficulties in comparability of existing research, and provides suggestions for improving and undertaking future research.Click to read more.
Review of Economic Research on Copyright Issues, 2018, 15(1), 38-64
Promoting Intellectual Property Rights (IPRs) is of particular importance to nations engaging in significant innovation. The existing literature relating to software piracy research is typified by the use qualitative methods to analyse the impact of IPRs on software piracy. Most concern themselves with a handful of important macroeconomic factors in an effort to identify whether they possess any explanatory power, employing qualitative frameworks for analysis. More contemporary research has given greater attention to the role of key regulatory variables on software piracy using econometric methods. In this paper, the relationship between foreign political pressure, IPR regulatory reforms and software piracy is considered. We estimate a model of software piracy as a function of bi-lateral pressure and investment (where US 301 reporting is the proxy for bilateral pressure, and capital investment the proxy for bi-lateral investment), Scientific investment, trade dependence and government effectiveness. The models are estimated using data from 80 countries over nine years. The study responds to the dearth of research employing dynamic panel estimations in estimating the impact of IPR reforms on software piracy. The findings suggest out of cycle review and US 301 reporting are pertinent factors potentially moderating software piracy.Click to read more.
Review of Economic Research on Copyright Issues, Vol. 1, No. 2, 55-69, 2004
Digital technology makes sophisticated means available to the general public for copying works with an equal level of quality to the originals and at increasingly lower prices. Unrestricted copying deprives producers and creators of a share of their potential earnings on the sale of originals. The whole of the traditional system for financing cultural creation could be at risk. There are three mainstays to the conventional financing system: the production of private goods, direct appropriability of revenues, temporary monopoly of exclusive rights. Each one has been called into question by P2P. Content has properties that are growing ever more similar to public goods, raising the question of whether public financing might be possible. Direct appropriability in customary markets is becoming ever more difficult, raising the question of whether new forms of appropriability might be possible, both direct and indirect. Exclusive rights are becoming increasingly ever harder to enforce, raising the question of other possible institutional solutions. To date, the solutions geared to tackling these issues have been largely defensive, and aimed at maintaining the old system's core characteristics (direct appropriability and exclusive rights) through DRM. However, a brief foray into economics literature can reveal some original alternatives solutions even if each one has its advantages and its drawbacks.Click to read more.
Review of Economic Research on Copyright Issues, 2018, 15(2), 23-56
Christian W. Handke, João Quintais and Balázs Bodó
This paper discusses copyright compensation systems (CCS) -- that provide licenses for downloading and non-commercial use of copyright works in return for a fee -- in the light of welfare economics and transaction cost economics. Recent empirical studies suggest that CCS could improve social welfare at least for recorded music. The general theme of the theoretical discussion in this paper is a simplicity-flexibility trade-off. On the one hand, CCS seek to reduce the costs of administering and trading copyrights online. On the other hand, standard copyright licenses distort the market mechanism. This paper discusses the costs and benefits of various CCS proposals compared to alternative ways of managing copyright online.Click to read more.
Review of Economic Research on Copyright Issues, Vol. 5, No. 1, 23-53, 2008
Paul A. David and Jared Rubin
One manifestation of the trend towards the strengthening of copyright protection that has been noticeable during the past two decades is the secular extension of the potential duration during which access to copyrightable materials remains legally restricted. Those restrictions carry clear implications for the current and prospective costs to readers seeking "on-line" availability of the affected content in digital form, via the Internet. This paper undertakes to quantify one aspect of these developments by providing readily understandable measures of the restrictive consequences of the successive modifications that were made in U.S. copyright laws during the second half of the twentieth century. Specifically, we present estimates of the past, present and future number of copyrighted books belonging to different publication-date "cohorts" whose entry into the public domain (and consequent accessibility in scanned on-line form) will thereby have been postponed. In some instances these deferrals of access due to legislative extensions of the duration of copyright protection are found to reach surprisingly far into the future, and to arise from the effects of interactions among the successive changes in the law that generally have gone unnoticed.Click to read more.
Review of Economic Research on Copyright Issues, 12(1/2), 16-25, 2015
T. Randolph Beard, George S. Ford and Michael L. Stern
In the regulatory setting of rates for statutory-licensed music services, the question of value-based versus cost-based rate setting for the component-rights of a musical performance arises. In this article, we have demonstrated this value-or-cost question is a distinction without a difference. Starting with the value-based concept of second-best (or Ramsey) prices, we end with a result prescribing that cost differences should be fully reflected in compensation across the inputs to the music recording. Each price is set so that the costs are covered, no more and no less.Click to read more.
Review of Economic Research on Copyright Issues, Vol. 8, No. 2, 3-34, 2011
This paper analyzes and compares two types of cooperative agreements that combine Intellectual Property (IP): patent pools and copyright collectives. I evaluate antitrust policy in three environments in which owners of the intellectual property (IP): (1) are vertically integrated into the downstream (product) market; (2) face competition in the upstream (input) market and (3) own downstream products that do not require a license on the pooled IP but compete with products that do. Although patent pools and copyright collectives differ in purpose, membership size and market conditions, their efficiency implications are qualitatively similar in each of the three situations. Therefore, a uniform rather than IP-specific competition policy is appropriate for pools and collectives, thus lending economic support for the approach followed by antitrust authorities toward IP-related cooperative agreements.Click to read more.
Review of Economic Research on Copyright Issues, Vol. 7, No. 1, 67-81, 2010
I examine the effect that radio airplay has on the sale of digital music in New Zealand. This effect is also likely to influence the behavior of various music industry participants, including the record companies, radio industry and listeners. I find that on an industry level, radio airplay has no significant effect on the sale of digital music. However, on average, an increase in radio airplay of a given song is predicted to increase sales of that song, which is the so-called exposure effect. The discrepancy between the aggregate and individual effects is explained by the existence of the fallacy of composition: An increase in the airplay of a particular song usually happens at the expense of another song's airplay, and so if more airplay does give greater sales of a given song, so less airplay will reduce the sales of competing songs, leading to ambiguous aggregate effects. It is also true that while individual songs compete with other songs for airplay, the radio industry competes with other activities and products consumed by listeners. Increases in the total airplay may not increase total sales, as the listener's decision regarding digital single purchase is now made with consideration of their non-music consumption goods, and budget and time constraints.Click to read more.
Review of Economic Research on Copyright Issues, Vol. 1, No. 2, 11-27, 2004
Many countries are revisiting their Copyright law in the light of new communication and information technologies, which make possible the generalized digitization of copyrighted material and in so doing hallenge the protection and enforcement of copyrights. As the laws are modified to adapt to this new environment, the foundations of copyright have been questioned. I claim here that the affirmation and protection of a strong and transparent copyright framework is a second best efficient institutional arrangement to foster cultural development and diversity and promote the emergence of new market-like institutions reducing the costs of transactions between creators and users.Click to read more.
Review of Economic Research on Copyright Issues, 2019, vol. 16(1/2), pp. 40-67
Frank Mathewson, E. Jane Murdoch and Gerry Wall
This paper discusses the connection between rate regulation and bargaining out- comes. We consider the case of licensing musical works for radio broadcasting. Our model illustrates the impact when music broadcasters can switch to a talk format. Using a generalized Nash bargaining setting, we interpret the revenue sharing rules established within the regulatory regimes in the US and Canada. In any negotiations over a sharing rule with the collectives that own the musical works rights, the ability of broadcasters to switch from a music to a talk format constitutes the threat point for the broadcasters. Using US and Canadian data for 2014 and 2015, we derive the bargaining weights that would generate the same revenue flows for broadcast- ers and collectives as those produced under the shadow of a copyright regulatory regime. These numerical examples show a higher weight to collectives than appears from the stated tariff rates.Click to read more.