Table of Contents

Digitization, Copyright, and the Welfare Effects of Music Trade

Luis Aguiar, European Union - Institute for Prospective Technological Studies (IPTS)
Joel Waldfogel, University of Minnesota - Twin Cities - Carlson School of Management, National Bureau of Economic Research (NBER), University of Minnesota - Twin Cities - Department of Economics

The Impact of Copyright Permissions Culture on the U.S. Visual Arts Community: The Consequences of Fear of Fair Use

Patricia Aufderheide, American University - School of Communication
Tijana Milosevic, American University - School of Communication
Bryan Bello, American University - School of Communication

Is Crowdfunding Bad for Investors?

Anita I. Anand, University of Toronto - Faculty of Law

What Administrative Law Can Teach the Trademark System

Melissa F. Wasserman, University of Illinois College of Law

Freedom to Tinker

Pamela Samuelson, University of California, Berkeley - School of Law

Editorial Notes

ERPN is sponsored by the Ewing Marion Kauffman Foundation and provides an online community for entrepreneurship research from all academic disciplines and the users of that information. SSRN is very pleased to work with the Kauffman Foundation in this important and growing area of scholarship.

Sponsored by the Kauffman Foundation

"Digitization, Copyright, and the Welfare Effects of Music Trade" Free Download

LUIS AGUIAR, European Union - Institute for Prospective Technological Studies (IPTS)
JOEL WALDFOGEL, University of Minnesota - Twin Cities - Carlson School of Management, National Bureau of Economic Research (NBER), University of Minnesota - Twin Cities - Department of Economics

Since the launch of the iTunes Music Store in the US in 2003 and in much of Europe in the following years, music trade has shifted rapidly from physical to digital products, raising the availability of products in different countries. Despite substantial growth in availability, choice sets have not converged across countries; and observers point to copyright-related transaction costs as an obstacle to greater availability. Policy makers are now contemplating various copyright reforms that could reduce these trade costs. The possibility of these changes raises the question of how much benefit they would create for consumers and producers around the world. We address these questions with a structural model of supply and demand for music in 17 countries, which we employ to counterfactually simulate the effect of a European digital single market (the equivalent of a pan-European copyright regime) on the welfare of consumers and producers. We also simulate autarky and worldwide frictionless trade - in which all products are available in all countries - allowing us to quantify both the conventional gains from status quo trade as well as the maximum possible gains available to free trade. Existing and additional trade have different patterns of benefit to consumers and producers. Status quo trade benefits consumers everywhere, but European consumers have benefited more than North Americans. Existing trade has had large benefits to American producers but on balance small benefits to European producers. Additional trade would continue the pattern of consumers benefits with larger gains to European consumers but would reverse the pattern for producers. Greater availability of products resulting from easing of copyright restrictions would raise per capita gains to producers in Europe more than in North America. Finally, we find that a European single market would bring most of the benefits of worldwide frictionless trade to both consumers and producers alike.

"The Impact of Copyright Permissions Culture on the U.S. Visual Arts Community: The Consequences of Fear of Fair Use" Free Download
New Media & Society, Online First, March 10, 2015

PATRICIA AUFDERHEIDE, American University - School of Communication
TIJANA MILOSEVIC, American University - School of Communication
BRYAN BELLO, American University - School of Communication

As digital opportunities emerge in the visual arts — to produce multimedia art and digital scholarship, publish online, hold online museum exhibitions — old copyright frustrations have worsened in a field where getting permissions is routine. A national survey of 2,828 visual arts professionals, combined with 100 in-depth interviews of visual arts practitioners throughout the U.S., explored how visual arts professionals use the U.S. copyright doctrine of fair use. Results showed widespread lack of confidence and misconceptions about fair use; resulting exaggerated risk assessment; personal and social relations within the community that deter reliance on fair use; and consequent delays, deformations and failure to execute mission. The 2015 creation of a fair use code of best practices may alleviate the deformations found in this survey.

"Is Crowdfunding Bad for Investors?" 
(2014) 55 Canadian Business Law Journal 215-229

ANITA I. ANAND, University of Toronto - Faculty of Law

With the passing of the Jumpstart Our Business Startups (JOBS) Act, U.S. companies and their investors will soon be able to participate in "equity crowdfunding" (ECF), a process that allows individuals to buy equity securities in a company over the Internet. After assessing arguments both for and against ECF, this article concludes that the benefits of ECF, on the whole, outweigh its disadvantages. ECF provides small and mid-size companies with an economical system for raising capital, decreases costs incurred to invest in these companies, offers investment opportunities to a greater population, and pairs companies with interested investors. The article makes some proposals for the regulation of ECF, such as requiring the distribution of securities to occur through portals that are registered with the securities regulator and it briefly addresses the Ontario Securities Commission's recently proposed crowdfunding prospectus exemption.

"What Administrative Law Can Teach the Trademark System" Free Download
Washington University Law Review, Vol. 93, 2016, Forthcoming
University of Illinois College of Law Legal Studies Research Paper No. 15-25

MELISSA F. WASSERMAN, University of Illinois College of Law

In 2014, the Patent and Trademark Office (Trademark Office or Agency) made national headlines when it cancelled the Washington Redskins’ trademark registration. The Washington Redskins, a National Football League team, is valued at a staggering 1.7 billion dollars, of which substantial portion of this value is attributed to the Washington Redskins brand. Whether the Trademark Office’s cancellation of the mark REDSKINS will be upheld in federal court will depend intimately upon the application of administrative law to the Agency’s decision. Yet the trademark community has tended to pay little attention to administrative jurisprudence and concomitantly the proper standard of review that should be afforded the Trademark Office’s actions. This Article begins to rectify this deficiency by starting to explore, in a comprehensive manner, the intersection of trademark and administrative law

In doing so, it makes two primary contributions. First, this Article argues that the deference jurisprudence of the United States Court of Appeals for the Federal Circuit (Federal Circuit), which hears the majority of Trademark Office appeals, is wrong as a matter of doctrine. More specifically, it contends that the Federal Circuit fails to afford the Agency sufficient deference with respect to both the Trademark Office’s legal and factual determinations. Second, this Article posits that the proper application of administrative law principles to the Trademark Office’s decisions results in a normatively desirable outcome. Affording the Trademark Office’s decisions more deference, and hence elevating the role of the Agency in trademark disputes, ushers the trademark system into the modern administrative era, which has long recognized the deficiencies associated with judge-driven policy.

"Freedom to Tinker" Free Download
Theoretical Inquiries in Law, Forthcoming

PAMELA SAMUELSON, University of California, Berkeley - School of Law

People tinker with technologies and other human-made artifacts for a variety of reasons: to have fun, to be playful, to learn how things work, to discern their flaws or vulnerabilities, to build their skills, to become more actualized, to tailor the artifacts to serve one’s specific needs or functions, to repair or make improvements to the artifacts, to adapt them to new purposes, and occasionally, to be destructive. This article aims to explain why the law should protect a zone of freedom to tinker because of the many benefits that tend to arise from tinkering.

I conceptualize freedom to tinker as having several dimensions: it entails, first, an intellectual freedom to imagine what one might do with existing artifacts to learn more about them; second, an intellectual privacy and autonomy interest in investigating and exploring those artifacts in which one has a property or other legitimate interest, especially when the investigation is done in one’s own premises; third, a right to build one’s skills by testing, analyzing, and interacting with existing artifacts; fourth, a liberty interest to become more actualized as a person through tinkering; fifth, a right to distill what one has learned from tinkering and disseminate the results of one’s research to others; sixth, a right to repair that which is broken and make other uses of artifacts as long as one is not harming the interests of others; seventh, a right to innovate based on what one has learned through tinkering; and eighth, a right to share innovations that result from tinkering with others if one chooses to do so and build a community around the innovation.

Freedom to tinker has existed for millennia. Yet it has existed largely without a formally recognized legal identity. It has simply been an unregulated zone within which people were at liberty to act unobstructed by others (so long as they did not harm others). The main reason why it now seems necessary to articulate what freedom to tinker is and why it needs to be preserved and legally protected is because freedom to tinker is being challenged by several recent legal developments.

Part I observes that users have considerable freedom to tinker with artifacts that are not encumbered by IP rights and are thus in the public domain. Trade secrecy, patent, and trademark laws have doctrines that generally provide user-innovators with considerable freedom to tinker. Although copyright law permits a modest degree of tinkering with existing products, it restricts freedom to tinker more than other IP laws. Part II explains the substantial limits that copyright law and sometimes contract law place on user rights to tinker with and modify computer programs. These constraints are of particular concern to tinkerers because computer programs are embedded in such a wide range of technologies these days. Part II also discusses the constraints that anti-circumvention rules place on freedom to tinker. These rules outlaw most reverse engineering (“circumvention?) of technically protected copyrighted works and the making or offering of tools to enable such reverse engineering. Part III concludes that because tinkering with existing artifacts generally “promote[s] the progress of science and useful arts,? as well as other fundamental values, IP rules should be interpreted, or if necessary, adapted, to permit user tinkering that achieves this constitutional goal.


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