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A Conceptual Basis for Justifying the Grant of an Exclusive Right

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A Copyright Gambit

Part of the book series: Munich Studies on Innovation and Competition ((MSIC,volume 11))

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Abstract

Is it possible to identify a conceptual basis that would support the granting of an exclusive right over digitised versions within the EU legal framework? This chapter proceeds to argue that the utilitarian doctrine of intellectual property law (and the incentive theory in particular), provides a conceptual basis that can justify the granting of exclusive rights over digitised versions. The discussion will focus upon the incentive theory as it has been developed in relation to copyright law. This is because copyright law provides the closest analogy for an exclusive right over a digitised version of a rare document, in the sense that both concern themselves with the protection of cultural content and informational goods. The discussion also explores the ability of the social planning theory of copyright law, to be a normative influence in the formulation of the proposed exclusive right.

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Notes

  1. 1.

    Paul Belleflamme, ‘The Economics of Digital Goods: A Progress Report’ (2016) 13 Review of Economic Research on Copyright 1, 1.

  2. 2.

    ibid. see also Jonathan Foster, ‘Valorising the Cultural Content of the Commodity: On Immaterial Labour and New Forms of Informational Work’ in Angela Lin, Jonathan Foster and Paul Scifleet (eds), Consumer Information Systems and Relationship Management: Design, Implementation and Use. (IGI Global 2013) 190.

  3. 3.

    Thierry Rayna, ‘Understanding the Challenges of the Digital Economy: The Nature of Digital Goods’ (2008) 71 Communications & Strategies 13, 18–19.

  4. 4.

    Belleflamme (n 1).

  5. 5.

    For a general discussion of the theory of personhood see Margaret Jane Radin, ‘Property and Personhood’ (1982) 34 Stanford Law Review 957.

  6. 6.

    Immanuel Kant, The Philosophy of Law (W Hastie tr, Clarke 1887).

  7. 7.

    GWF Hegel, The Philosophy of Right (SW Dyde tr, G Bell 1896).

  8. 8.

    William Fisher, ‘Theories of Intellectual Property’, in Stephen R Munzer (ed), New Essays in the Legal and Political Theory of Property, (Cambridge, 2001) 168, 171 and Justin Hughes, ‘The Philosophy of Intellectual Property’ (1988) 77 The Georgetown Law Journal 287, 330.

  9. 9.

    Fisher (n 8) 9.

  10. 10.

    Radin (n 5) 1014 note 3.

  11. 11.

    See John Locke, ‘Second Treatise of Government’, The Works of John Locke (Rev ed, Thomas Tegg 1823) <http://socserv2.socsci.mcmaster.ca/econ/ugcm/3ll3/locke/government.pdf> accessed 31 January 2019.

  12. 12.

    Lawrence C Becker, ‘Deserving to Own Intellectual Property’ (1993) 68 Chicago-Kent Law Review 609.

  13. 13.

    Wendy J Gordon, ‘A Property Right in Self-Expression: Equality and Individualism in the Natural Law of Intellectual Property’ (1993) 102 Yale Law Journal 1533. Wendy J Gordon, ‘On Owning Information: Intellectual Property and the Restitutionary Impulse’ (1992) 78 Virginia Law Review 149.

  14. 14.

    Hughes (n 8) 296–330.

  15. 15.

    “When there is some land that has the status of a common—being held in common by the community by agreement among them—taking any part of what is common and removing it from the state nature leaves it in creates ownership (…).” Locke (n 11) chapter 5 s. 28. In the context of our discussion, the common property would be the rare documents and the public domain content recorded upon them.

  16. 16.

    ibid chap 5 s 27.

  17. 17.

    Gordon (1993) (n 13) 1560–1561. Robert Nozick, Anarchy, State and Utopia (Basic Books 1974) 178–182.

  18. 18.

    Fisher (n 8) 170.

  19. 19.

    Hughes (n 8) 305–310.

  20. 20.

    ibid. See also Nozick (n 17) 175, who interprets Locke’s theory to mean that labouring on something improves it and makes it more valuable and the person who has laboured is entitled to own a thing, the value of which has been created by him.

  21. 21.

    This in accordance with Gordon’s interpretation of the ‘no-harm’ proviso to mean that, ‘creators should have property in their original works, only provided that such grant of property does no harm to other persons’ equal abilities to create or to draw upon the pre-existing cultural matrix and scientific heritage.’ Gordon (1993) (n 13) 1563–1564.

  22. 22.

    Gordon attempts to interpret the ‘no-harm’ proviso to mean that exclusive rights granted over the intellectual creations (such as a patents or copyrighted works) should be limited to allow the public to benefit from new creations and cultural tools. Although interesting, this interpretation does not offer a coherent conceptual basis for the achievement of a balance between user and producer interests in relation to digitised versions. ibid 1572–1605.

  23. 23.

    Fisher (n 8) 169; Maxime Lambrecht, ‘Droit d’auteur et Ouverture de l’environnement Numérique : Responsabilité Sociale Contre Législation ?’ (Université catholique de Louvain 2015) 85. <https://dial.uclouvain.be/pr/boreal/fr/object/boreal%3A157582> accessed 31 January 2019.

  24. 24.

    William Dibble, ‘Justifying Intellectual Property’ (1994) 59 UCL Jurisprudence Review 74, 81.

  25. 25.

    Jules Dupuit, ‘Du Principe de Propriété: Le Juste-l’utile’ (1861) 30 Journal des Economistes 28, “Le principe de l’utilité publique donne seul la solution de tous les problèmes si nombreux de la question de la propriété de la richesses et de beaucoup d’autres questions économiques.” [Only the principle of public utility offers the solution for all the numerous problems relating to property of wealth and many other economic question] translated by the author. ibid 52–53.

  26. 26.

    Léon Walras, ‘De La Propriété Intellectuelle’ 24 Journal des économistes 392 (1859) cited in Jérôme Lallement, ‘La Propriété Intellectuelle Selon Walras : Entre Monautopole et Majorat Littéraire’ (2011) 1 Oeconomia 393. <https://journals.openedition.org/oeconomia/1527> accessed 31 January 2019.

  27. 27.

    Lambrecht (n 23) 87.

  28. 28.

    According to Netanel, the incentive approach seeks to explicate copyright’s traditional incentive rationale in economic terms. Neil Weinstock Netanel, ‘Copyright and a Democratic Civil Society’ (1996) 106 Yale Law Journal 283.

  29. 29.

    Netanel defines the neo-classicist approach as being based on a blend of neoclassical and new institutional economic property theory, and as corresponding to the ‘property rights theory’ in economic literature. ibid 306–307, 313.

  30. 30.

    Maxime Lambrecht, ‘The Time Limit on Copyright: An Unlikely Tragedy of the Intellectual Commons’ (2017) 43 European Journal of Law and Economics 475, 478–479.

  31. 31.

    Netanel (n 28) 309.

  32. 32.

    Lambrecht (n 23) 87.

  33. 33.

    Netanel (n 28) 309.

  34. 34.

    William M Landes and Richard A Posner, The Economic Structure of Intellectual Property Law (Harvard University Press 2003) 11. Merges notes that the economic justification for copyright has progressed beyond the point where a crude “incentive” story passes for analysis in every case. Robert P Merges, ‘Are You Making Fun of Me? Notes on Market Failure and the Parody Defense in Copyright.’ (1993) 21 AIPLA QJ 305, 306.

  35. 35.

    Stewart E Sterk, ‘Rhetoric and Reality in Copyright Law’ (1996) 94 Michigan Law Review 1197, 1207.

  36. 36.

    Glynn S Lunney Jr, ‘Reexamining Copyright’s Incentives-Access Paradigm’ (1996) 49 Vanderbilt Law Review 483.

  37. 37.

    Paul Goldstein, Copyright’s Highway: From Gutenberg to the Celestial Jukebox (Rev ed, Stanford University Press 2003) 17; Netanel (n 28) 315.

  38. 38.

    MA Lemley, ‘Ex Ante versus Ex Post Justifications for Intellectual Property’ (2004) 71 The University of Chicago Law Review 129.

  39. 39.

    Brett M Frischmann, ‘Evaluating the Demsetzian Trend in Copyright Law’ (2007) 3 Review of Law and Economics 649.

  40. 40.

    Fisher (n 8) 173.

  41. 41.

    ibid 172. ‘Copyright is in essence a state measure that uses market institutions to enhance the democratic character of civil society.’ Netanel (n 28) 288.

  42. 42.

    William Fisher, ‘Reconstructing the Fair Use Doctrine’ (1988) 101 Harvard Law Review 1744.

  43. 43.

    Fisher (n 8) 192–193.

  44. 44.

    Netanel (n 28).

  45. 45.

    Fisher (n 8); (n 42).

  46. 46.

    Niva Elkin-Koren, ‘Copyright and Social Dialogue on the Information Super Highway: The Case Against Copyright Liability of Bulletin Board Operators’ (1995) 13 Cardozo Arts & Entertainment Law Journal 346.

  47. 47.

    Madow criticises a purely economic analysis of publicity rights on the grounds that it takes people’s existing preferences as given and does not question or evaluate them from a normative perspective. Michael Madow, ‘Private Ownership of Public Image: Popular Culture and Publicity Rights’ (1993) 81 California Law Review 125, 225.

  48. 48.

    Rosemary J Coombe, ‘Objects of Property and Subjects of Politics: Intellectual Property Laws and Democratic Dialogue.’ (1991) 69 Texas Law Review 1853.

  49. 49.

    Netanel (n 28) 292.

    Copyright protection is necessary because, in its absence, unbridled competition from free riders who are able to copy and distribute without paying copyright royalties would drive the price for user access near-zero marginal cost. This free rider problem, in turn, would greatly impair author and publisher ability to recover their fixed production costs. In a world without copyright, only authors unconcerned with monetary remuneration would produce creative expression and only publishers with no need for financial return would invest in selecting, packaging, marketing, and making such expression available to the public. Without copyright, creative expression would likely be both underproduced, and, no less importantly, underdisseminated. (emphasis added).

  50. 50.

    ibid 288.

  51. 51.

    Fisher (n 8) 172.

  52. 52.

    “[Copyright] must be designed to underwrite a vital and independent expressive sector without unduly hampering access and the free exchange of ideas.” Netanel (n 28) 365.

  53. 53.

    Fisher (n 42).

  54. 54.

    Madow (n 47) 240.

  55. 55.

    Lee Bollinger, ‘Book Review: Protect This Work of Expression: Clarifying the Unique Economics of Intellectual Property Rights’ (2004) 44 Santa Clara Law Review 1287, 1291.

  56. 56.

    Netanel (n 28) 292, Landes and Posner (n 34) 11, Kenneth J Arrow, ‘Economic Welfare and the Allocation of Resources for Invention’ in Universities-National Bureau Committee for Economic Research, Committee on Economic Growth of the Social Science Research Council (ed), The Rate and Direction of Inventive Activity: Economic and Social Factors (Princeton University Press 1962) 609, 617.

  57. 57.

    Landes and Posner (n 34) 11.

  58. 58.

    Gillian K Hadfield, ‘The Economics of Copyright: An Historical Perspective’ (1988) 38 Copyright Law Symposium 1, 5.

  59. 59.

    See Shyamkrishna Balganesh, ‘Debunking Blackstonian Copyright (Reviewing Neil Weinstock Netanel, Copyright’s Paradox (2008))’ (2009) 118 Yale Law Journal 1126, 1137.

  60. 60.

    Jeremy Bentham, ‘The Works of Jeremy Bentham’, in John Bowring (ed), The Works of Jeremy Bentham, vol 3 (William Tait 1838), 71.

  61. 61.

    Ruth Towse, Christian Handke and Paul Stepan, ‘The Economics of Copyright Law: A Stocktake of the Literature’ (2008) 5 Review of Economic Research on Copyright Issues 1, 11. Hadfield explains market failure as the failure of the market to supply such quantities of a good as are socially justified by cost. Hadfield (n 58) 33–34.

  62. 62.

    Thus, the argument that production of creative content will continue to flourish in the absence of exclusive rights because of the intrinsic motivations of the creator who obtains satisfaction from the mere fact of creative expression cannot be maintained in the context of digitised versions.

  63. 63.

    Michael Abramowicz, ‘Privatizing the Public Domain’, in F. Scott Kieff, Troy A. Paredes (eds), Perspectives on Commercializing Innovation (Cambridge, 2012) 146.

  64. 64.

    Richard A Posner and William M Landes, ‘Indefinitely Renewable Copyright’ (2003) 70 University of Chicago Law Review 471, 488–489.

  65. 65.

    ibid 491.

  66. 66.

    Edward B Rappaport, ‘Copyright Term Extension: Estimating the Economic Values’ (Congressional Research Service 11 May 1998) 4.

  67. 67.

    It is possible that within a more gradual process of digitisation purely financed by public funds, a rare document would be digitised at some indeterminate point in the future, but it can be argued that without the impetus provided by the channelling of private sector investment, a particular rare document may not be available to the public in digital form at the present time.

  68. 68.

    See Peter Drahos, A Philosophy of Intellectual Property Law (Australian National University eText 2016) 144 <www.researchgate.net/publication/304514536_A_Philosophy_of_Intellectual_Property> accessed 31 January 2019.

  69. 69.

    Balganesh (n 59) 1138; see also Lunney (n 36) 498.

  70. 70.

    Balganesh (n 59) 1138.

  71. 71.

    To be discussed further in Chap. 9 outlining the proposed model for an exclusive right over digitised versions.

  72. 72.

    Fisher (n 8) 192.

  73. 73.

    ibid 192–193.

  74. 74.

    ibid.

  75. 75.

    See Coombe (n 48) 1861–1866.

  76. 76.

    Netanel (n 28) 288.

  77. 77.

    ibid. “Absent massive government or private subsidy, some measure of copyright protection is necessary to support a viable sector of authors and publishers engaged in the creation and dissemination of original expression.”

  78. 78.

    ibid.

  79. 79.

    ibid 347.

  80. 80.

    ibid 339.

  81. 81.

    ibid 335–336. This is especially relevant in the case of digitised versions as the potential market demand for the digitised version of a rare document (or a collection of rare documents) may be difficult to accurately predict in advance. Thus, an element of risk taking is involved in investing in the creation of digitised versions of rare documents, and the proposed exclusive right should provide adequate incentives for such risk-taking by investors.

  82. 82.

    Fisher identifies transformative use as a particularly important and socially valuable way of interacting with cultural content. Fisher (n 42) 1768. See also Netanel (n 28) 301–305; 376–382 and Coombe (n 48) 1879.

  83. 83.

    Netanel (n 28) 345; Fisher (n 42) 1754, 1770.

  84. 84.

    Netanel (n 28) 349; Coombe’s concept of dialogic interaction (n 48); Elkin-Koren (n 46) 399–401.

  85. 85.

    Fisher (n 8) 193.

  86. 86.

    Netanel (n 28) 366–371.

  87. 87.

    ibid 384–385.

  88. 88.

    Elkin-Koren (n 46) 369–371. See also Fisher (n 42) 1781.

  89. 89.

    Netanel (n 28) 378.

  90. 90.

    See Madow (n 47) 240. “[W]e need to consider carefully whether there are measures short of abolition (a compulsory licensing scheme, or a generous ‘fair use’ privilege to protect social criticism and satire, for example) that can reduce the impact of the right of publicity on popular cultural practices.”

  91. 91.

    Netanel (n 28) 345; Fisher (n 42) 1754, 1770.

  92. 92.

    Elkin-Koren (n 46) 383–384.

  93. 93.

    Netanel (n 28) 299–300. As Ginsburg points out, much copying in cyberspace will be private as intermediaries such as traditional booksellers and publishers who reproduce, package and distribute copies to end-users will no longer be necessary and as a consequence the market for the work will by and large be the private copying market. Jane C Ginsburg, ‘Putting Cars on the “Information Superhighway”: Authors, Exploiters and Copyright in Cyberspace’ 95 Columbia Law Review 1466, 1477–1478.

  94. 94.

    Fisher (n 8) 193.

  95. 95.

    ibid.

  96. 96.

    Fisher (n 8) 197.

  97. 97.

    Netanel (n 28) 293.

  98. 98.

    Netanel (n 28) 368–369.

  99. 99.

    ibid 369.

  100. 100.

    ibid 370–371.

  101. 101.

    “The democratic paradigm (…) would affirmatively disallow attempts to use standard contracts to expand copyright owner or content provider control over works that are made available to the public.” ibid 385.

  102. 102.

    Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society [2001] OJ L167/10 (InfoSoc Directive).

  103. 103.

    The exceptions and limitations specified by Article 6(4) of the InfoSoc Directive include reproductions on paper or similar medium effected by the use of any photographic technique [Art 5(2)(a)], specific acts of reproduction made by publicly accessible libraries, educational establishments, museums or archives that is not for direct or indirect economic or commercial advantage [Art 5(2)(c)], use for the sole purpose of illustration for teaching or scientific research [Art 5(3)(a)], uses for benefit of people with a disability which are directly related to the disability and of a non-commercial nature to the extent required by the disability [Art 5(3)(e)].

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    Sunimal Mendis

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Mendis, S. (2019). A Conceptual Basis for Justifying the Grant of an Exclusive Right. In: A Copyright Gambit. Munich Studies on Innovation and Competition, vol 11. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-59454-4_5

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