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Abstract:
The paper examines the legal strategy of Creative Commons and analyzes its potential for enhancing the sharing, distribution and reuse of creative works. The paper focuses on Creative Commons's strategic choice to rely on property rights and on viral contracts to promote free culture. While I share Creative Commons's concern with copyright fundamentalism, I am more skeptical of its strategy. The legal strategy which empowers owners to govern their creative works facilitates a far-reaching coalition among libertarians and anarchists, anti-market activists and free-market advocates. While such an ideological diversity might serve the political goals of a social movement, it may compromise the long term goal of making creative works more accessible. The lack of a core perception of 'freedom in information', may lead to ideological fuzziness that would weaken the prospects for constructing a workable and sustainable alternative to copyright. Furthermore, absent a commitment to a comprehensive standard of 'freedom in information', Creative Commons's defining principles are reduced to empowering authors to govern their own work. The paper predicts that this strategy may strengthen the proprietary regime in information.

creative commons, copyright, property, contracts, licensing, information policy, freedom in information, access to knowledge

Abstract:
Creative Commons is a non-profit U.S. based organization that operates a licensing platform to promote free use of creative works. The idea is to facilitate the release of creative works under generous license terms that would make works available for sharing and reuse. Creative Commons advocates the use of copyrights in a rather subversive way that would ultimately change their meaning.

The paper expresses a skeptical view of this worthy pursuit. While I share Creative Commons' concern with copyright fundamentalism, which inevitably leads to the propertization of everything of value, I am more skeptical of its strategy. The paper explores the legal strategy of Creative Commons and analyzes its potential for enhancing the sharing, distribution and (re)use of creative works.

Creative Commons as a social movement creates a platform for a wide range of ideologies that share an interest in enhancing access to works. This turns out to be a great advantage for a social movement that is seeking to gain a wider public support. Creative Commons' legal strategy reflects the lowest common denominator: empowering owners to govern their creative works. At the same time, however, Creative Commons lacks a comprehensive vision of the information society and a shared definition of the prerequisites for open access to creative works. The end result is ideological fuzziness.

The paper examines the strategic choice of Creative Commons to rely on property rights in its effort to subvert the meaning of copyright. The analysis shows that reliance on property rights, in the absence of a shared sense of free access, may simply strengthen the proprietary regime in creative works. It may reinforce the property discourse as a conceptual framework and as a regulatory scheme for governing the use of information.

The fuzziness of ideology may further lead to the proliferation of contracts. Creative Commons' strategy presupposes that minimizing external information costs is critical for enhancing access to creative works. The lack of standardization increases, however, the cost of accessing creative works, and may further enhance the chilling effect of copyright law.

The paper argues that creating an alternative to copyright may require standardization. To become successful, Creative Commons would have to trade the sovereignty of owners for the reduction of transaction cost that would enhance access to creative works.

Creative commons, contracts, private ordering, intellectual property, copyright

Abstract:
The liability of Internet Service Providers (ISPs) for infringing materials posted by their subscribers was highly controversial during the early days of the Internet. The cost of enforcing copyrights increased immensely as mass copying and distribution means became widespread and the volume of infringing materials increased. Copyright holders sought to actively engage ISPs in their efforts to enforce copyright, by making them liable for any infringing material residing on their system. ISPs opted for neutral policies and refused to undertake the role of gatekeepers. The safe harbor regime established by the Digital Millennium Copyright Act (DMCA) in the late 1990's, provided ISPs with a shield that mostly kept them out of copyright wars. The introduction of peer-to-peer networks destabilized the equilibrium achieved under the DMCA and copyright owners are now trying to draw ISPs back into the legal scene, seeking to engage them in addressing peer-to-peer piracy.

When the DMCA was adopted, the growing Internet industry sought to establish itself as a common carrier, withstanding attempts to hold ISPs directly liable for copyright infringements committed by their users. ISPs' stance helped to preserve the decentralized nature of Internet architecture, which was a key to its success in facilitating innovation, business and political deliberation. Yet, peer-to-peer design brings the interests of ISPs and those of copyright holders closely together. Peer-to-peer technology confronted ISPs with a dilemma: it boosted their business, increasing the demand for broadband and upgraded services, but at the same time created a growing burden of limitless bandwidth consumption. No single ISP can entirely eliminate peer-to-peer without risking its market share. Consequently central management of peer-to-peer traffic becomes an attractive option.

The risk involved in central management of online exchanges was one the reasons for exempting ISPs from liability. It was assumed that liability for injurious materials would induce ISPs to monitor online traffic for the purpose of minimizing their legal exposure. Consequently, liability may come at the cost of losing out on the economic and political benefits generated by peer-to-peer networks. Central management of peer-to-peer systems would turn these distributed networks into giant broadcast systems provided by ISPs, and centrally managed through their gates. Potential liability may also boost the emergence of new managing technologies and shape the design of peer-to-peer networks. Thus, liability of ISPs for peer-to-peer infringing traffic could carry long-term consequences for network architecture. The paper explores the ramifications of liability rules for design choices, focusing on the implications of ISP liability for network architecture.

DMCA, ISP, Internet Service Providers, P2P, Peer-to-Peer, Liability, Copyright, Infringement

Abstract:
The article examines shifts in the role of the State in the information environment, and focuses on the recent, innovative, cooperation between the State and private parties. We argue that while assuming the role of a regulator, the State allowed private nodes of control to emerge and develop in the information environment. We describe how the regulatory regime of the 1990s facilitated this process. When the State now seeks to seize control in the information environment it utilizes these private nodes of control to combat terror. The invisible hand turned out to be very useful for the State, and it is now replaced with a handshake between the State and the private sector. It too, is invisible. The article seeks to make the invisible handshake visible, identifying the legislation that enables the State to seize control in the decentralized borderless information environment. The article traces this intriguing process of recruiting private parties for governing tasks, and analyzes its ramifications for the Internet.

Internet, surveillance, Privacy, September 11, state action, theory of the state, ISP liability

Abstract:
This Article seeks to articulate the interests of information consumers in the era of Digital Rights Management Systems ("DRMs"). The impetus for this inquiry is the growing threat to the interests of information consumers in the digital age. Digital copies protected by DRMs enable rightholders to exercise unparalleled control over the use of copies after purchase by consumers. Recent years have seen a growing number of instances where DRMs were used in ways that threaten consumer rights, such as invading privacy, disabling interoperability, causing security breaches, and limiting the ability of users to annotate or use copies in the time and space of their choice.

While many concerns raised by the use of DRMs - such as price and consumer friendliness - are relevant to all types of commodities, other concerns are closely connected to information policy. The ability to exercise physical control over the use of copyrighted works may threaten intellectual freedom and fundamental liberties. It is precisely this dimension, of consuming cultural goods, on which this Article focuses.

I offer a view of information consumers that is based on the theoretical framework of copyright law. Developing a notion of consumer protection in cultural markets involves expanding the focus on economic-consumers (consumers-as-shoppers) to incorporate an understanding of consumers as citizens and participants in creative processes. To make room for consumers under copyright law it is necessary to re-conceptualize the notion of 'information consumer' and acknowledge the participatory role of consumers under copyright theory. The perception of consumer-as-participant adds a new dimension to standard copyright analysis, which is particularly significant in the environment of user-generated content.

The inspiration for incorporating consumer discourse within copyright analysis originated from two U.S. decisions, Lexmark and Chamberlain, which addressed the interests of consumers in tangible articles of commerce (a printer cartridge and a garage door opener). The Court of Appeals in those cases concluded that consumer rights call for a narrow construction of the DMCA. I argue that the same rationale that convinced the courts to limit the scope of the anti-circumvention rules in Lexmark and Chamberlain should be applied in other contexts involving more conventional copyrighted works such as video games, music, video clips, and artistic images.

DRM, DMCA, Consumer, Lexmark, Chamberlain, Copyright, Information, Participation

Abstract:
Does law matter in the information environment? What can we learn from the experience of applying a particular legal regime to the online environment? Informational privacy (or, in European terms, data protection) provides an excellent illustration of the challenges faced by regulators who seek to secure rights and shape the behavior of online players.

A comprehensive study of Israeli websites' compliance with information privacy regulation during 2003 and 2006 provides insight into some of these challenges. The study examined the Information Privacy Practices of 1386 active Israeli websites, i.e. the extent to which these sites comply with applicable legal requirements related to information privacy, and their other privacy-related practices. Information Practices were explored on three levels: first, we examined the legal requirements which apply to each Information Practice under current Israeli law (legal analysis); second, we analyzed the declared privacy policies posted on each website were analyzed; and third, we studied the actual Information Practices executed by each website as to data security.

The findings show that Israeli websites perform poorly and have a low level of compliance with the legal requirements. Most websites do not provide privacy protection to users at the level required by the law. Websites routinely collect personal data from users, although the practice of collecting data is slightly lower among commercial and organizational websites than in other categories. Among public and private sector websites compliance was relatively low, from 16% to 22% of the websites that collect personal data gave users some sort of notice. The popular and sensitive websites, commercially owned by large corporations, had substantially better levels of compliance, while the most popular websites had the lowest number of violations.

The overall picture that emerges from the findings is one in which the law seems to have only a relatively minor role in shaping users' 'privacy experience' online, with other forces and factors clearly at play. The findings may further suggest that information privacy regulation is most effective with commercial enterprises, which are better able to acquire legal advice and respond to potential legal liability. It is less effective with small enterprises and/or individual users who operate websites, because they usually cannot afford the somewhat sophisticated legal counsel that is required for establishing and maintaining a data protection policy. This is a troublesome conclusion, given the increasing threats to the privacy of users, in the Web 2.0 environment. Subsequently, the research findings' suggest that data protection regulation may not create one legal measure that fits all. Regulating the online behavior of various players may require different regulatory measures.

privacy, data protection, information, informational privacy, user generated content, israel

Abstract:
The book as a whole analyzes the effects of Cyberspace on the Economic Analysis of Law and argues that the networked information environment should exert a crucial influence on economic thinking, on the perception of law, and, by derivation, on the economic analysis of law. Information technologies have dramatically altered many aspects of our everyday life. They change the way we communicate with one another, the way we purchase, entertain, interact, learn, research, deliberate, do business, and indeed, think. During the past two decades the Internet has been revolutionizing economic, communal and political life. This Cyber-revolution is the most significant transformation in the information environment since the invention of printing.

Cyberspace has become an integral part of people's everyday life, and the online information environment constitutes the human condition of our time. People spend a large portion of their time using the Internet for entertainment, business, social relationships and political activities. The increasing human activity in Cyberspace is transforming social and cultural norms, creating a web of new communities, with diverse characteristics - linguistically, culturally and economically. It is beginning to blur some old boundaries across classes and social hierarchies, while at the same time drawing new borders of the digital divide, between the haves and the have nots, between those who are in command of the technology, and the technologically illiterate. The new information environment further introduces new players and novel market and non-market behaviors that cannot be easily explained by standard sociological, political or economic concepts. Cyberspace can even be thought of as affecting the definition of the self.

The concluding chapter of the book (chapter 10) focuses on political theory and offers a normative analysis of the state and its government, examining collective action, rule-making processes and the organization of the public sphere. We explore whether the new technological frontiers opened by Cyberspace bear upon the liberal theory of the state (and on the economic theory of the state). We conclude that Cyberspace shakes the paradigm of Liberal Democracy and calls for re-examination of its basic foundations: representative democracy governed by checked and controlled majority decision-making.

A by-product of this argument is an attempt to incorporate Republican theories of the state into economic analysis. The focus here is on the presupposition regarding individual preferences - whether they are exogenous, given or internal to the collective decision-making process.

Abstract:
The book as a whole analyzes the effects of Cyberspace on the Economic Analysis of Law and argues that the networked information environment should exert a crucial influence on economic thinking, on the perception of law, and, by derivation, on the economic analysis of law.

One can describe the Law and Economics Movement as comprising three generations, which can be perceived as separate paradigms of sorts: the traditional Chicago School, Transaction Cost Analysis and Neo-Institutional Economic Analysis of Law and Legal Institutions. The book systematically examines each of the paradigms in light of the information revolution. Chapter 8 focuses on Transaction Cost Law and Economics, and concludes that cyberspace seriously undermines its underlying assumptions.

Traditional transaction costs analysis treats the state of technological development as exogenous. Under this analysis, the efficient outcome at any given circumstances would depend on the availability of technologies and their costs. Parties may make use of technologies that could increase the value of resources or lower the cost inflicted by harmful uses. The availability of technologies and their cost, would affect the cost of bargaining. Indeed, cyberspace reduces significantly traditional transaction costs, such as negotiating and contracting. This has ramifications for various branches of law, such as contracts and torts. At the same time, however, digital technologies introduce new types of transaction costs that call for special consideration.

In treating technology as exogenous, transaction cost analysis fails to recognize the interdependency between technologies and legal rules. It does not give adequate consideration to technological progress, and moreover to the way technology changes in response to economic conditions and legal regimes. This multi-layered relationship between law and technology is a key factor for understanding technological innovation in the information environment. Our discussion suggests that technologies cannot be regarded as independent outcome of scientific progress, but contingent upon various socio-economic factors, of which law is one. That is particularly crucial in the context of information technologies that are characterized by high pace of technological change. We therefore conclude that technology should become endogenous to the analysis, and the economic discourse should be expanded to address it.

Abstract:
This paper analyzes the rise of private ordering as a dominant strategy for governing creative works in the digital environment. It explores the changing nature of private ordering in the Web 2.0 environment, where it is used for governing User-Generated Content (UGC). Private ordering is playing an ever greater role in governing the terms of access to creative works. Rightholders often use End-User License Agreements (EULA) to expand the scope of protection provided under copyright law, by limiting the rights of users under legal doctrines such as 'fair use' and 'first sale'. At the same time, private ordering has also been employed in recent years by Open Access initiatives, to promote access to creative works and facilitate interaction, exchange and sharing of creative materials.

Governing access to (UGC) by private ordering raises a whole set of issues related to licensing through platforms, the interdependency of users and platforms, and the licensing by many to many. The changing creative landscape of the Web 2.0 expands the ethos of creativity, supplanting the proprietary exclusivity-based discourse with a new set of values: sharing, participation, and collaboration. Still, some private ordering strategies may reinforce proprietary notions, even unintentionally.

Part I describes the rise of private ordering in the digital environment. Part II scrutinizes the arguments of proponents and opponents of private ordering for governing access to creative works. Part III describes the use of private ordering to govern access to UGC, analyzing the different nature of private ordering in this environment and the special consideration it raises. Part IV examines whether the ascendancy of UGC gives rise to different considerations related to private ordering.

UGC, User-Generated Content, EULA, Private Ordering, Copyright, Access, Creative Works, License

Abstract:
In various legal systems unjust enrichment is an important pillar of private law. However, it does not enjoy the same level of internal coherency and comprehensivness typical of other legal categories such as contract law and tort law. The doctrine of unjust enrichment is a rather general principle that encompasses a whole set of disconnected rules sharing a common rationale.

Economic analysis can play a central role in establishing a more systematic understanding of this area of law. Confusion regarding unjust enrichment is partly attributed to a failure to distinguish between two different levels in which this doctrine function. Using the Calabresi & Melamed distinction between entitlements and remedies we show that unjust enrichment can serve as a source for the allocation of legal entitlements, and as a remedy to protect legal entitlements, and that there is no analytical correlation between the two.

Subsequently, we try to show that while economic analysis of law should find it difficult to endorse the allocation of entitlements based on unjust enrichment sources, it, nevertheless, in many cases, ought to endorse the remedy of unjust enrichment to protect allocation of entitlements. The paper examines the ramifications of this remedy in circumstances that were not often addressed by the literature, where the beneficiary, who created a benefit, is required to transfer it to the alleged benefactor on the bases of unjust enrichment. In such circumstances, an incentive analysis should focus on the effects of a restitutive remedy on the behavior of the beneficiary. We show that unjust enrichment remedy, measuring actual profits, may carry different consequences then a liability rule or a property rule. This analysis demonstrates the virtue of unjust enrichment as an independent remedy, worthy of study in such cases as breach of contract or the protection of intellectual property.

Abstract:
The growing entity of Cyberspace exerts a crucial influence on the perception of the state, markets and the law, and, by derivation, on the economic analysis of law. The paper is intended to provide a preliminary and tentative look at the challenges posed by Cyberspace to the project of the economic analysis of law.

We begin by applying the Chicago model of law and economics to cyberspace, examining the characteristics of the market in Cyberspace, analyzing possible market failures in comparison to market failures in the non-virtual world. This analysis is followed by an application of transaction cost economic analysis to Cyberspace, focusing on the Calabresi-Melamed model of private law. We find that the traditional analysis of competition, market failures, and the role of central intervention have to be significantly modified in order to remain useful in Cyberspace. Cyberspace is predicted to eliminate or at least notably diminish some of the common market failures, such as some of the traditional public goods (i.e., information) or monopolies, and some of the non-virtual market problems of lack of information, externalities, and transaction costs. On the other hand, Cyberspace creates some market deficiencies that are less notable in the traditional markets. The technological race between enforcement measures by the code and counter measures is the most significant example. Costs involved in verifying information is another.

The last part of the paper provides a discussion on the role of "law", and offers several general thoughts about the "state" or our public sphere in light of the Neoinstitutional school of law and economics. Some general descriptive and prescriptive insights are drawn. Our major conclusion from the analysis relates to the challenges Cyberspace poses to the whole project of economic analysis of law. The emergence of Cyberspace requires some fresh conceptual thinking by the Law and Economics movement, towards which we provide just an outset.