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Review of Economic Research on Copyright Issues (RERCI)

RERCI Articles

When Should the Bell Toll? The Economics of New Zealand's Debate on Indirect Liability for Internet Copyright Infringement

Review of Economic Research on Copyright Issues, Vol. 1, No. 1, 119-149, 2004

Alan E. Woodfield

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Abstract

This article evaluates proposed changes to New Zealand's copyright legislation in respect of potential secondary liability for copyright infringement by Internet service providers. Minor changes were envisaged in order to align the legislation with new international standards, with limitation of ISP liability along the lines of the UK Electronic Commerce Regulations 2002 recommended. Both zero liability and strict liability for web-hosting ISPs are correctly rejected, but the proposed uniform regulatory approach provides limited incentives for ISP monitoring effort and while proposed knowledge-based standards should largely prevent excessive permanent removal of legitimate material, the constructive knowledge test may be insufficient to encourage the removal of many infringing items. The counter-notification procedure may not prevent liability-conscious ISPs from removing excessive legitimate material on a temporary basis, and more radical solutions involving ISP purchase of their subscribers' posted material or compulsory ISP purchase of copyrights did not feature. The design of optimal copyright law is fraught with difficulties, however, and the Ministry's consultative processes and careful deliberations have done much to maintain a reasonable balance between the conflicting interests concerned.

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Open Standards and Interoperability in EU Digital TV: Economics and Policy Issues

Review of Economic Research on Copyright Issues, Vol. 5, No. 2, 45-70, 2008

Nicola Matteucci

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Abstract

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.

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The 'Competitive' Value of Music to Commercial Radio Stations

Review of Economic Research on Copyright Issues, Vol. 4, No. 2, 29-50, 2007

Paul Audley and Marcel Boyer

Downloads:  141


Abstract

Our objective in this paper is to develop a methodology to infer from the behaviour and choices of broadcasters the "competitive" value they attach to the use of music, more precisely sound recordings, and to derive from such an inferred value the proper "competitive" copyright payments to be made to authors, composers, performers, and makers of sound recordings. We illustrate the methodology by applying it to Canadian data. The background is provided by the statement of case and supporting proof presented in the 2004 proceedings before the Copyright Board of Canada on the commercial radio tariff. The results called for a significant increase in copyright payments by Canada's commercial radio industry: the proper competitive copyright payments should be substantially more than double what the industry was paying at the time of the hearings.

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Copyright & Endogenous Market Structure: A Glimpse from the Journal Publishing Market

Review of Economic Research on Copyright Issues, Vol. 7, No. 1, 7-29, 2010

Giovanni Battista Ramello

Downloads:  140


Abstract

This article explores the journal publishing industry in order to shed light on the overall economic consequences of copyright in markets. Since the rationale for copyright is among others to promise some market power to the holder of the successful copyrighted item, it also provides incentives to preserve and extend market power. A regular trait of copyright industries is high concentration and the creation of large catalogues of copyrights in the hands of incumbents. This outcome can be observed as the aggregation of rights and is one of the pivotal strategies for obtaining or extending market power, consistently with findings in other cases. Journal publishing is no different in this respect from other copyright industries, and in the last decade has experienced a similar trajectory, leading to a highly concentrated industry in which a handful of large firms increasingly control a substantial part of the market.
It also provides a clear example of the effect of copyright dynamics on market structure, suggesting that a different attitude should be taken in lawmaking and law enforcement.

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Restricting Access to Books on the Internet: Some Unanticipated Effects of US Copyright Legislation

Review of Economic Research on Copyright Issues, Vol. 5, No. 1, 23-53, 2008

Paul A. David and Jared Rubin

Downloads:  138


Abstract

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.

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Considering the Risk Dimension in the Administration of Copyright

Review of Economic Research on Copyright Issues, Vol. 5, No. 1, 75-87, 2008

Ana Maria Tetrel

Downloads:  136


Abstract

In the law and economics literature of copyright, the economic function of collecting societies has been principally treated as a way to diminish transaction costs. However, another possible function, the transfer of risk as a function of collective administration has been, relatively, ignored. Through risk analysis, an author will be able to determine which method of administration of protected rights is most beneficial to him. Due to information asymmetries, authors and users bear a number of risks. These risks can be transferred to a collecting society which is in a better position to bear them more efficiently and to better administer the protected rights.

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Creative Pricing in Markets for Intellectual Property

Review of Economic Research on Copyright Issues, Vol. 2, No. 1, 39-44, 2005

William R Johnson

Downloads:  135


Abstract

Technological changes over the past two decades have made it easier to distribute and to copy intellectual property. Creators and owners of intellectual property have responded to these changes with a variety of creative pricing strategies. The paper reviews some of these pricing innovations. Two broad categories of innovations are explored: those that facilitate price discrimination and those that exploit complementarities between different types of creative works.

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The WIPO Guide on Surveying the Economic Contribution of the Copyright Industries

Review of Economic Research on Copyright Issues, Vol. 1, No. 1, 5-15, 2004

Dimiter Gantchev

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Abstract

In July of 2002, the World Intellectual Property Organisation organised a working group of economists to study the methodologies that are appropriate when attempts are made to measure the economic contribution of copyright to a national economy, with the final objective being to produce a guide-book that will enable future studies to be made, all within a common methodological framework. Dimiter Gantchev, a consultant with WIPO, was encharged with the task of writing the resulting Guide-book.

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Enforcement Sharing and Commercial Piracy

Review of Economic Research on Copyright Issues, Vol. 3, No.1, 83-97, 2006

Dyuti S. Banerjee

Downloads:  126


Abstract

This paper uses a strategic entry-deterrence framework to analyze the effects of enforcement sharing between the government and the monopolist in dealing with commercial copyright piracy. The monopolist is the incumbent firm and is responsible for monitoring the illegal operations of a commercial pirate, the possible entrant, who illegally reproduces and sells unauthorized copies of the monopolist's product. The monopolist bears the monitoring cost and the government is responsible for setting a penalty. We show that even when enforcement is shared the socially optimal penalty may result in no piracy in equilibrium only if the government is sensitive to piracy.

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Visual Artists' Resale Royalty: An Application of the Principal and Agent Model

Review of Economic Research on Copyright Issues, Vol. 5, No. 2, 37-43, 2008

Maryam Dilmaghani

Downloads:  121


Abstract

The visual artist's resale royalty right entitles an artist to a percentage of the price received by subsequent owners when her works are resold. Adopted by the integrity of EU countries in 2006, the question of the Federal recognition of this right in the US is currently discussed. Economic analysis of this right mostly concluded its inefficiency. In this paper we examine the issue from the stand point of incentives provided by each legal framework, with and without this right, for the artists. We argue that an optimal mechanism designed to implement a maximum level artistic effort in the society coincides with the adoption of this right.

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The Limits of Indirect Appropriability in Markets for Copiable Goods

Review of Economic Research on Copyright Issues, Vol. 2, No. 1, 19-37, 2005

Justin P. Johnson and Michael Waldman

Downloads:  118


Abstract

An extensive literature has developed that argues that in many settings the social welfare costs of copying or piracy are limited because of the presence of indirect appropriability. Indirect appropriability is the idea that original good producers can appropriate some of the value derived by the consumers of copies because of the return that buyers of original units receive from allowing copies to be made. In this paper we discuss the limitations of indirect appropriability, where the two we focus on are the "flooding" of the copy market and substitutability between new units and copies. We also discuss the ramifications of our analysis for real world markets.

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Intellectual Property: How the Right to Keep it to Yourself Can Facilitate Dissemination

Review of Economic Research on Copyright Issues, Vol. 2, No. 2, 17-23, 2005

William J. Baumol

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Abstract

The fundamental conflict in the goals of intellectual property (IP) policy is the apparent incompatibility of protection of the creator and ease of dissemination. Copyrights and patents seem to favor the first goal and conflict with the second, but patents have actually helped to resolve the conflict by transforming the IP into a tradable commodity. As a result, many patent proprietors actively promote use of their IP by others, even direct competitors. Patent licensing is a major revenue source for many firms. Patent pools institutionalize remunerative sharing of IP. Even from their medieval beginnings, patents were used to encourage dissemination and they continue to serve that purpose directly via disclosure requirements. So, perhaps with some redesign and innovative usage, copyrights can help to reconcile the two apparently conflicting goals - provision of incentives for both creative activity and widespread use of its products.

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The Socially Desirable Size of Copyright Fees

Review of Economic Research on Copyright Issues, Vol. 1, No. 1, 83-92, 2004

William J. Baumol

Downloads:  115


Abstract

Licensing of copyrighted material can contribute to welfare. But what fee is socially desirable fee? The owner's marginal cost of licensing is often near zero, but P = MC = 0 is arguably neither equitable nor an efficient incentive for further creative activity. Here two fee-setting approaches are described, assuming copyright rules are pre-established and determine the holder's earnings, absent licensing. One approach is Ramsey pricing, theoretically second best and able to preserve the copyholder's earnings. The second is 'parity pricing', as derived in the price-regulation literature, which can ensure effective free entry into commercial use of the licensed material.

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The Efficiencies of Aggregation: An Economic Theory Perspective on Collective Management of Copyright

Review of Economic Research on Copyright Issues, 12(1/2), 26-45, 2015

Richard Watt

Downloads:  115


Abstract

The existing economic theory of copyright collectives, or copyright management organizations (CMOs) is strongly focused on the benefits of sharing of transaction costs. Here, we appeal to the contractual environment of CMOs to offer a different perspective. Copyright collectives form contracts at two principle points along the supply chain. First, there are the contracts between the collective's members themselves (the copyright holders) for distribution of the collective's income. And second there are the licensing contracts that the collective signs with users of the repertory. Using standard economic theory, the paper argues that there are significant efficiency benefits from having copyrights managed as an aggregate repertory, rather than individually, based on risk-pooling and risk-sharing through the contracts between the members themselves. Similarly, there are also aggregation benefits (at least in terms of the profit of the CMO) of licensing only the entire repertory, rather than smaller sub-sets. Both of these theses are defended by appealing to existing economic theory literature in related fields. Interestingly, there is a link between these two theories of the efficiency of aggregation which lies at the heart of the theory of syndicates, and the characteristics that imply that the group (or syndicate as a whole) can be considered as a valid "representative", sharing the same preferences as each individual syndicate member.

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Introduction: Copyright and the Publishing of Scientific Works

Review of Economic Research on Copyright Issues, Vol. 7, No. 1, 1-6, 2010

Richard Watt

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Abstract

This paper is the introduction to the symposium "Copyright in Academic Publishing".

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