Governing Copyright in Cyberspace: The Penalty Default Problem with State-Centric Sovereignty

Abstract:     
This Article examines the consequences for Internet governance of observing traditional, state-centric sovereignty in multilateral cyberspace regulation by analyzing the World Intellectual Property Organization's Copyright Treaty. Three layers of protection for state sovereignty in the Treaty interact to produce a possible nonenforcement default of its protections for digitally transmitted materials in contracting states that profit more from sidestepping than securing copyright protections.

This nonenforcement default operates like a "penalty default" because it gives copyright-profiting states incentive to further bargain to avoid the default. This penalty default is not consciously set, but results from observing state sovereignty in regulating a supranational common resource against the backdrop of a cleavage in state interests over regulation. States with high economic interest in copyrighted material might respond with out-of-treaty bargaining to induce other states to enact regulations avoiding the default. Copyright-profiting states and certain private actors also will have increased incentive to erect electronic security fences and deploy other technologies that chill information flow. The resulting deliberation-deficient and undemocratic process for achieving regulation and nontransparent restrictions on information access may act as a hidden penalty default against piracy-profiting states and all concerned about information access and cyberspace governance, if not ameliorated by a multilaterally agreed mandatory fair use rule and establishment of a strong central dispute settlement body to enforce the treaty's terms.

Keywords: World Intellectual Property Organization (WIPO) Copyright Treaty, penalty default, sovereignty, fair use, central dispute settlement body, Internet governance, multilateral cyberspace regulation

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