auYesterday, American University’s Program on Information Justice and Intellectual Property held an even the Law and Economics of Copyright Users’ Rights.  The event was the launch of an interdisciplinary project to conduct empirical research on the effects of flexibility in copyright law, including both the effects on consumer welfare and on innovation in the technology and creative industries. The project involves both law professors and econmics professors from AU, and like much of our other work, will be done with partners from institutions around the world.

The webcast and speaker presentations from yesterday’s event are online here.  A very brief description of the first panel is below, and a description of the second panel will be posted on the blog shortly.

Christian Handke from Erasmus University Rotterdam gave a presentation that drew from a review of the existing empirical literature that he conducted for the recent U.S. National Academies of Sciences report on copyright in the digital environment (link).  His review showed that the great majority of empirical work on the costs and benefits of the copyright system focused on the short run benefits to rightholders.  Very little work addressed the costs to users at all, and none provide evidence that digital copying has diminished the supply of new creative works.

Joost Poort gave a talk that drew from a report commissioned by the Dutch government on the potential effects of introducing flexibility to copyright law in the Netherlands (link). The central policy question ought to be how the value of flexibility for users compares to the value of copyright’s incentives for the production and distribution of works.  The benefits to consumers include the arrival of new uses and technologies; reductions of transactions costs; and the reduction of risks due to legal uncertainty. There is a shortage of data and empirical work addressing this question, and social welfare effects are hard to measure.

Piotr  Stryszowski from the OECD discussed problems with methodology and data collection for those studying copyright infringement. The methodology for tangible products is fairly traditional because infringers face marginal costs of production, they sell physical goods through commercial transactions, and there is legal certainty that their activities are illegal. Online infringement, however, involves no marginal cost of replication, a global market and often transactions that are outside the monetary environment.  There can be legal uncertainty in the digital realm because limitations and exceptions differ between countries. Scholars studying both types of infringement face difficulties gathering data including the lack of firm level data.

Rokiah Alavi from the International Islamic University Malaysia spoke about copyright flexibilities in from a developing country perspective.  Malaysia currently fails to utilize the limitations and exceptions available to it. For instance, parallel imports are not allowed and the country has never utilized compulsory license for translation. This has a strong impact on the tertiary education sector, which depends heavily on imported books, journals, databases, and software and other educational materials – the sectors most affected by narrow flexibilities. It limits access to knowledge, curtails creativity and productivity and slows down economic growth. There is a lack of awareness of copyright user rights among the public and policy makers, and there has been no economic analysis on their effect on Malaysians.

During the question and answer period, the first questions focused on enforcement of copyrights and the strength of protection they provide. One topic that came up was the term of copyright protection.  Poort said that no economic research has shown that further extending the length of copyright duration has an effect on the creators’ incentives to produce more work.  Handke noted that the duration of the term of protection is a contentious issue, but there are two approaches people are considering 1) perpetual copyright protection with the obligation to continually renew, and 2) significantly shortening the term of protection.