On Thursday September 26, 2013, American University Program on Information Justice and Intellectual Property (PIJIP) hosted The Law and Economics of Copyright Users’ Rights. The event featured discussions by economists and attorneys on the role of empirical evidence in copyright debates, and a keynote address by Sunil Abraham from Centre for Internet and Society in India. A webcast of the event is here, and a separate blog about the economist panel is here.
PIJIP director Michael Carroll chaired the roundtable discussion, which comprised of seven lawyers from around the globe. These speakers are experts involved in copyright reform efforts in their respective countries. Prof. Carroll asked the speakers to address the ways in which empirical evidence is used in the legislative debate, and suggestions on how this practice could be improved.
Canada: Jeremy De Beer from the University of Ottawa said that Canadian reform has involved a complex and nonlinear relationship between court decisions, advocacy, and academia. In 2012 the Copyright Modernization Act emphasized the principle of balance, which had already been entrenched in practice due to a series of Supreme Court cases. Cases in the early 2000s had stated that limitations and exceptions were an integral part of copyright, not just loopholes, and that it would be as inefficient to overcompensate rightholders as it would be to undercompensate them. More recent rulings on fair dealing have heavily relied on economic evidence or the absence of it. Regarding textbooks, the Court said declining text sales did not support assertions that fair dealing was bad. A positive next step for an empirical research agenda would be to demonstrate the beneficial impact that user rights may have. It would be helpful for courts to start accepting this perspective.
Australia: Rebecca Giblin from Monash University discussed the copyright reform process in Australia, where the country is debating whether or not to introduce a flexible, fair use style copyright exception. The Law Reform Commission has indicated it is inclined to introduce such an exception, but this indication has generated a lot of pushback, some of which include arguments that: fair use leads to uncertainty; it is inconsistent with the three-step test; and, it will lead to the creation of fewer works. There has been very little economic evidence introduced to the debate, so other anecdotal evidence is suggested, often examples of absurd practices necessary to comply with the law as it stands. No evidence has been presented clearly showing that flexible limitations and exceptions will lead to the creation of more works. However, the study by Lateral Economics that estimated introducing fair use could lead to $600 million in productivity gains was helpful.
South Africa: Caroline Ncube from the University of Cape Town said that South Africa has no case history at all on copyright limitations and exceptions. The country just published its first draft IP policy which seems like a decent start for enhancing the protection of user rights, but it is not supported by empirical evidence. The document cites to one paper on limitations and exceptions, but currently it is not public. There is a report titled “The Economics of Intellectual Property in South Africa”; however, it does not address copyright at all.
European Union: Martin Senftleben from SCHOOL said that several EU countries are debating flexible limitations and exceptions to copyright law. There have been some European reform processes that have concluded empirical evidence in the debate is lacking, such as the UK’s Hargreaves report. The Irish copyright review committee tasked with evaluating fair use concluded that there was no sufficient evidence to support either side of the debate. In the Netherlands there is an effort to broaden quotation limitation to cover user generated content. The Dutch government commissioned a report, but it is merely a first step and it is also predominantly anecdotal without any substantive empirical information. Senftleben suggested that an empirical study dealing with the effects of limitations and exceptions at an abstract level might be more useful than one that examines more specific L&Es.
Chile: Alberto Cerda from the University of Chile said that Latin American countries often do not take advantage of limitations and exceptions to copyright available to them. As a result, books are very expensive. For example, in Chile, a paperback may cost the equivalent of a full day’s wages, contrary to the circumstance in the U.S., where the same book would cost about one hour of wages for Americans. Recent Chilean legislation to implement the copyright obligations of the US-Chile FTA incorporated more copyright flexibilities, including exceptions for digitizing, translating, and use by libraries. Domestic publishers supported the new law, and it marked good process for Chilean society.
United States: Jenifer Urban from UC Berkeley School of Law noted that there has a lot of activity in the U.S. Congress and in the executive branch about copyright reform, but it hasn’t directly considered user rights. The greater emphasis has been placed on enforcement, which forces advocates for user rights to use evidence in defensive manner. There have been a lot of court rulings that have had a reforming effect on copyright law in practice, such as HathiTrust, Oracle, Cablevision, and Kirtsaeng. Academic scholarship can be very relevant in these forums. It would be helpful for future scholarship examine how new content propagates through society, and how new works are used. A good way forward would be a natural experiment of a policy change. One could also study the use of open resources by comparing the use of content subject to flexibilities to content that is not subject to flexibilities.
Brazil: Allan Rocha from the Federal University of Brazil said that the discourse over copyright reform in his country has been mostly social and political, not economic. However, cultural studies of access to movies, books, and other works have produced information useful to an economic debate. The studies found high concentration of goods in the richest areas, little or no access in the rest of the country, and later releases of new content in cities other than Rio. There is additional data that is held by the industry and has not been made public, but new laws will oblige collecting societies to begin reporting data next year, which would provide price and quantity data from the music industry. Brazil will begin a new debate on limitations and exceptions next year, and it would be good to have data on how much the creation of new works depends on access to existing works.
Michael Carroll began the Q&A session by stressing that it is important to show that users’ rights are enabling provisions. They do not just enable access, but also the creation of new works, which is something to invest in. Prof. Carroll asked the panel to describe where economic analysis could be used to show the positive effect (rather than lack of negative effect) of users’ rights. Urban said that a natural experiment could show the value of legal certainty for libraries and archives. One could look at countries where the law for these intuitions has changed. Senftleben stated that researchers could look at the difference in investment decisions by newcomer firms between countries where there is fair use and civil law countries where there is no fair use.
De Beer said that Section 29 of Canada’s Copyright Modernization Act grants a new exception for user generated content (the only explicit UGC exception in the world) which makes little difference for users, but a big difference for IPS. It would be good to study this exception to see its impact. Ncube said that in the South, empirical research needs should prioritize Southern heritage. The governments do not prioritize policymaking about filesharing, but if you talk about access to materials, that appeals to policymakers.
When the discussion was opened up to the audience, Elliot Maxwell described a series of studies that provide empirical evidence of the benefit of opening access to publicly funded research, including its effect on further research and commercialization. Jonathan Band said that debunking the existing poor research on the effect of IP on the U.S. economy would be as beneficial to current debates as the creation of new research on flexibilities. He further advised not to overlook the importance of anecdotal evidence – success stories such as the Google carry its clout in conversations with policymakers.