Indirect Liability for Copyright Infringement: An Economic Perspective

Indirect Liability for Copyright Infringement: An Economic Perspective

Landes, William M. and Lichtman, Douglas Gary, "Indirect Liability for Copyright Infringement: An Economic Perspective" (February 2003). U Chicago Law & Economics, Olin Working Paper No. 179.

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    When individuals infringe copyright, they often use tools, services, and venues provided by other parties. An enduring legal question asks to what extent those other parties should be held liable for the resulting infringement. For example, should a firm that produces photocopiers be required to compensate authors for any unauthorized copies made on that firm's machines? What about firms that manufacture personal computers or offer Internet access; should they be liable, at least in part, for online music piracy? Modern copyright law addresses these issues through a variety of common law doctrines and statutory provisions. In this essay, we introduce those rules and evaluate them from an economic perspective. In the process, we emphasize that every mechanism for rewarding authors inevitably introduces some form of inefficiency, and thus the only way to determine the proper scope for indirect liability is to weigh its costs and benefits against those associated with other plausible mechanisms for rewarding authors.

Facts on copyright

  • Some countries may have parallel importation restrictions that allow the copyright holder of their licensee to control the aftermarket. This may mean for example that a copy of a book that does not infringe copyright in the country where it was printed does infringe copyright in a country into which it is imported for retailing.
  • Different countries impose different tests, although generally the requirements are low. In the United Kingdom there has to be some 'skill, originality and work' which has gone into it. However, even fairly trivial amounts of these qualities are sufficient for determining whether a particular act of copying constitutes an infringement of the author's original expression.
  • The right to adapt a work means to transform the way in which the work is expressed. Examples include developing a stage play or film script from a novel translating a short story and making an arrangement of a musical work. Limits and exceptions to copyright Main article: Limitations and exceptions to copyright. Idea-expression dichotomy and the merger doctrine Main article: Idea-expression divide A copyright covers the expression of an idea, not the idea itself --- this is called the idea/expression or fact/expression dichotomy. For example, if a book is written describing a new way to organize books in a library, a copyright does not prohibit a reader from freely using and describing that concept to others. It is only the particular expression of that process as originally described that is covered by copyright.

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