The Copyright-Innovation Trade-Off: Property Rules, Liability Rules, and Intentional Infliction of Harm

Abstract:     
Should the law secure to copyright owners control over new technological uses of their works? Or should the law leave technological innovators free to explore and exploit such uses? The greater control afforded to copyright owners, the greater the incentive to produce content, but also the greater the disincentive to produce better technologies to enjoy it. This Article studies the degree to which protecting copyright owners or technological innovators by property rules or liability rules over new technological uses of content would drive members of each group to invest desirably in their respective creations and in reducing the interference between their activities.

The Article offers three major contributions: (1) it assesses the degree to which different entitlements promote authorship and innovation as well as investments to minimize the interference between them, (2) it shows that a property rule in technological innovators might drive them to harm copyright owners intentionally, and (3) it suggests a way of modifying legal entitlements that can improve copyright owners and innovators’ incentives to invest.

Number of Pages in PDF File: 71

Keywords: intellectual property, property rules, liability rules, modifiable entitlements, indirect liability, holdup, intentional harm

JEL Classification: K11, K23, K49

Accepted Paper Series