Copyright Law & Economics in the Copyright Directive: Is the Droit D'Auteur Passe?

Abstract

In continental Europe, copyright law is traditionally viewed as a so-called 'natural' right - briefly put: it is simply right for the author to enjoy the fruits of his labor. However, socio-economic considerations are becoming more in important in European copyright doctrine. One reason for this tendency is that more and more copyright matters are regulated at the EU level and that the European regulator explicitly adheres to the economic rationale for copyright law.

In this contribution, it is investigated what the apparent economic policy goals are of the EU Copyright Directive of 2001 - which is by far the most ambitious piece of EU legislation in the area of copyright to date. The purpose of this article is not to set-out new, cutting-edge economic theories on copyright law, but merely to analyze what the explicit and implicit aim of the Directive is and to explore what, according to standard, mainstream and widely known economic theory, will be the likely result of the new regulations on copyright law. Will the Copyright Directive succeed in achieving its apparent goals? What does economic theory predict about its impact?

The emphasis is on the most important and controversial changes that the Copyright Directive brings about. These are the introduction of a right of temporary reproduction, the limiting of the exhaustion of copyright, the abolishing of remuneration rights and, last but certainly not least, the broad protection of technological measures - i.e. DRM systems. The article concludes that the Directive appears to be based on a great belief in the beneficial effects of granting property rights in information products and in the ability of the market mechanism to achieve an optimal result. However, it may well be argued that apparent faith in the 'invisible hand' of the market is unjustified. Particularly, the public good character of information products is not taken into account. Moreover, the provisions of the Directive may hinder competition to a further extent than copyright traditionally did, which could have an undesirable result as well. Additionally, the apparent reliance on market forces to match the demand for uses with the offered technological usage restrictions may be unsubstantiated. There may be valid arguments for limiting the freedom of contract and the freedom to block any information usage technologically.