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The Levitation of Copyright: An Economic View of Digital Home Copying, Levies and DRM

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Abstract

Many European countries introduced a levy scheme in order to compensate rightholders for the losses suffered through home copying. The Copyright Directive of 2001, however, appears to require them to abolish levy schemes as regards private copying that can technologically be controlled by way of DRM systems. This contribution assesses the merits of this approach, mainly from an economic point of view. Is direct control over private copying preferable to a levy scheme? It is concluded that economic theory cannot provide a clear-cut answer to this question. Arguments can be made both in favor and against maintaining the levy system.

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... The application of DRM Koelman (2005) points out that DRM technology increases the opportunities copyright holders have to appropriate the additional utility derived from private copying. This is in line with remarks in the Copyright Directive on the 'application or non-application of technological measures' and Vitorino's (2013) recommendation that licenced copies do not require additional remuneration by a levy. ...
... A third argument understands levies as a 'tax' used to support the supply of content, which has characteristics of a public good. Like any tax, however, levies reduce demand for copies and related goods and services by increasing their price (Lunney, 2001;Fisher III, 2004;Koelman, 2005;Towse, 2008). It may even reduce the incentives to introduce new copying technologies somewhat (Lunney, 2001). ...
... Likewise, the distribution of levy revenues to creators will be 'rough', which implies creators receive imperfect price signals about the market valuation of works (Towse, 2008). In addition, the administrative costs of levy systems are stressed by some (Koelman, 2005). ...
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... Let us assume that the church aims to spread its message in either form, i.e. by delivering the message either directly, or indirectly through the competitor's product. Its utility 12 Ref., among others, to Kamien and Tauman, 1986,Wang, 1998and Sen, 2005 See, e.g., Tam, 1991. 14 See, e.g., Myles, 1996 andHamilton, 1999. ...
... For a critical discussion on balancing private bene…ts and social cost ref. among others toKoelman, 2005. ...
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Since 2005, all of the teachings of the Roman Catholic Pope have been copyrighted. Given that it is a tenet of the church to spread the faith and teach all people, this would seem at odds with any restrictions on access. Yet the Catholic Church is by no means an exception, and other religions have likewise resorted to copyright. This paper presents a simple model to attempt to rationalize the exercise of copyright by a religious organization. The analysis also provides more general insights concerning the workings of copyright, which appears to function more like a right to levy a tax than like a right to set a monopoly price, as currently believed.
... In theory, TPMs increase the opportunity for rights holders to price discriminate and appropriate the additional utility derived from private copying, therefore reducing the case for levies. 115 In that context, the decision not to apply TPMs could in fact translate into additional utility for consumers and should be taken into consideration in the determination of fair compensation. 116 To that effect, it has been argued that levies be phased out in function not of actual use, but market availability of TPMs. ...
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Private copying is one of the most contested areas of EU copyright law. This paper surveys that nebulous area and examines the issue of copies made from unlawful sources in light of the ECJ’s ACI Adam decision. After describing the legal background of copyright levies and the facts of the litigation, the paper scrutinizes the Advocate General’s Opinion and the Court’s decision. The latter is analyzed against the history of copyright levies, the ECJ’s extensive case law on the private copying limitation and Member States’ regulation of unlawful sources. This paper further reflects on the decision’s implications for end-users, rights holders, collective management organizations and manufacturers/importers of levied goods. It concludes that, from a legal and economic standpoint, the decision not only fails to be properly justified, but its consequences will likely diverge from those anticipated by the Court. Most worrisome is the Court’s stance on the three-step test, which it views as a restrictive, rather than enabling, clause. In its interpretation of the test, the decision fails to strike the necessary balance between competing rights and interests. This is due to multiple factors: overreliance on the principle of strict interpretation; failure to consider the fundamental right of privacy; lack of justification of the normative and empirical elements of the test’s second condition; and a disregard for the remuneration element in connection with the test’s third condition. To the contrary, it is argued that a flexible construction of the three-step test is more suited to the InfoSoc Directive’s balancing aims.
... This can result in a great damage to the rights' real owner, since images or songs in a digital format are valued on the basis of their origin, which is a proof of quality, source, and content integrity. For this reason, different approaches have been developed in order to prove the origin and IP information of digital contents 110 . On the other hand, digital technologies, which make it extremely easy to copy and mass distribute protected materials, also enable technological protection of such works. ...
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Congress is currently considering the first major revision of the Copyright Act of 1909. Professor Breyer examines the moral and economic rationale for copyright in books. He goes on to consider proposals that would lengthen the term of protection and increase its scope in relation to photocopies and computer programs. On the basis of existing evidence he is unable to conclude that copyright should be abolished, but he argues that its extension is unnecessary and would be harmful.
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It has become commonplace to say that we have entered the age of information. The words conjure up images of a reader's paradise ~ an era of limitless access to information resources and unlimited interpersonal communication. In truth, however, the new information age is turning out to be as much an age of information about readers as an age of information for readers. The same technologies that have made vast amounts of information accessible in digital form are enabling information providers to amass an unprecedented wealth of data about who their customers are and what they like to read. In the new age of digitally transmitted information, the simple, formerly anonymous acts of reading, listening, and viewing ~ scanning an advertisement or a short news item, browsing through an online novel or a collection of video clips ~ can be made to speak volumes, including, quite possibly, information that the reader would prefer not to share. This Article focuses specifically on digital monitoring of individual reading habits for purposes of so-called "copyright management" in cyberspace, and evaluates the import of this monitoring for traditional notions of freedom of thought and expression.
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This paper compares reward systems to intellectual property rights (patents and copyrights). Under a reward system, innovators are paid for innovations directly by the government (possibly on the basis of sales), and innovations pass immediately into the public domain. Thus, reward systems engender incentives to innovate without creating the monopoly power of intellectual property rights. But a principal difficulty with rewards is the information required for their determination. We conclude in our model that intellectual property rights do not possess a fundamental social advantage over reward systems and that an optional reward system--under which innovators choose between rewards and intellectual property rights--is superior to intellectual property rights. Copyright 2001 by the University of Chicago.
Who Decides the Extent of Rights in Intellectual Property? The Economics of Information and Human Capital
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Who Decides the Extent of Rights in Intellectual Property?
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