Change in Copyright Law as a Market Intervention to Realize the Welfare Potential of Text Mining in Scientific Research

92 Pages Posted: 29 Jan 2014 Last revised: 2 Feb 2014

See all articles by Frank Hellwig

Frank Hellwig

Leipzig University of Applied Sciences

Date Written: October 1, 2013


With text mining technologies advancing it becomes easier to analyse and search through an ever-growing amount of literature and to semantically integrate literary works within large corpora of literature as well as with the emerging global web of linked data. It becomes possible to use and reuse literary works in more efficient and productive ways. With these new conditions and possibilities the existing justification of copyright law is questioned and a reassessment of the law’s efficiency is required.

Copyright law is justified by the economic rationale of a dynamic incentive for production of knowledge by means of temporary property rights and monopoly rents for rights holders. The objective of this paper is to examine the current welfare economics-based justification of copyright law with regard to text mining technology uses in scientific research. The paper proposes possible changes to copyright law to address the conflict between the current copyright law and the opportunity of increased productivity. The paper combines micro-economic argumentation of the “Economic analysis of law” with growth theory and seeks to illustrate a public welfare analysis for the specific constellation of literary works information goods markets, researchers and research organisations as productive users of works and research text mining services.

After introducing public welfare analysis and its application to questions of market failure and information externalities the paper describes the technical possibilities, benefits and conditions of text mining as well as relevant market players. The economics of copyright law are explained and how copyright currently applies to text mining uses. The economic methodology is then applied to the legal situation and the possibilities to realize the potential of text mining in scientific research. The paper also takes copyright’s competition objective and the coupling/tying of literary works markets and text mining services into account, considers network externalities and international trade and it draws analogies to other markets with similar challenges.

The findings of the paper are presented mainly for national-level public welfare analysis, but can be applied to regional level. Applied to the economic region of the European Union (EU) the conclusion of this article is:

A mandatory copyright limitation exempting all research/scientific-purpose text mining uses including uses with commercial purpose from copyright, combined with the requirements that anti-circumvention law and contract law must not prevent executing such a limitation and that “legal access” defined as technical access to literary works is a sufficient condition to exercise this limitation, should be implemented in EU copyright law, because this is the best way to maximise the public welfare in the EU.

----------- NB: A public consultation on the review of the EU copyright law also addressing text mining is currently underway (extended deadline for submissions: 5 March 2014).

Keywords: copyright law, copyright exception, copyright limitation, social welfare analysis, text mining, text analytics, non-expressive use, non-consumptive use, non-display use, text and data mining, information externalities, knowledge spillovers, intellectual property, innovation, endogenous growth, TFP

Suggested Citation

Hellwig, Frank, Change in Copyright Law as a Market Intervention to Realize the Welfare Potential of Text Mining in Scientific Research (October 1, 2013). Available at SSRN: or

Frank Hellwig (Contact Author)

Leipzig University of Applied Sciences ( email )

Karl-Liebknecht-Straße 132
Leipzig, 04277

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