Donna Wentworth on Copyfight and Cory Doctorow on Boing Boing blogged yesterday about an article written yesterday by James Boyle, “A natural experiment” on Financial Times. The article compares how IP law that is made drastically and detrimentally different from, or as Doctorow says “the crazy way that IP policy gets made -- without any evidence, without any followup” the FDA allowing a new drug to go on the market. This article fits in nicely with the discussion we are having in class about how legislation is made. Boyle presents the following question:
So how do we decide the ground-rules of the information age? Representatives of interested industries come to regulators and ask for another heaping slice of monopoly rent in the form of an intellectual property right. They have doom-laden predictions, they have anecdotes, carefully selected to pluck the heartstrings of legislators, they have celebrities who testify - often incoherently, but with palpable charisma - and they have very, very simple economic models. The basic economic model here is “If you give me a larger right, I will have a larger incentive to innovate. Thus the bigger the rights, the more innovation we will get. Right?” Well, not exactly. Even without data, the models are obviously flawed - copyrighting the alphabet will not produce more books, patenting E=MC2 will not yield more scientific innovation. Intellectual property creates barriers to, as well as incentives towards, innovation. Clearly the “more is better” argument has limits. Extensions of rights can help or hurt, but without economic evidence beforehand and review afterwards, we will never know. In the absence of evidence on either side, the presumption should obviously still be against creating a new legalised monopoly, but still the empirical emptiness of the debates is frustrating.
Boyle makes some very interesting points. One being that we increase rights to intellectual property because all of the proponents say it is necessary to continue incentives for innovation. But the truth is, that the extension of IP rights both hinders and increases innovation. There is a fine balance. One that I don't think current legislation has not found. In fact it was impossible for the two main players (Lobbyists) to decide how to stabilize this balance when the Content industry and the Consumer electronic industry tried to negotiate a bill for the INDUCE Act.
I don’t think that Boyle’s main concern lies with a committee that has listened to both sides of the story and has almost put the issue to rest because neither party will concede a huge loss. This type of committee at least had two sides of the issue (although there may be more sides), which as proven by our country’s history is what is required to make a fair decision. I think Boyle’s main concern, is that legislation is being made by hearing only one side present the issue. Furthermore, and more importantly, legislation is being made with by no evidence to support lobbyist reasoning, and no review is being made to determine if the legislation is balancing one way or the other.
Extensions of rights can help or hurt, but without economic evidence beforehand and review afterwards, we will never know. In the absence of evidence on either side, the presumption should obviously still be against creating a new legalised monopoly, but still the empirical emptiness of the debates is frustrating.
Boyle analyzes the example of copyrighting databases. The question of database copyright-ability was presented to the Supreme Court in 1991, and they found that databases should not be copyrighted. Supposedly this came as big surprise to many in the database industry. Boyle chooses this area as an example because it is easily compared to another market, Europe, that chose allow databases to be copyrighted. There were strong proponents of the copyright law for database who claimed that without this law granting a copyright there will be no incentive to create databases. Boyle asserts that if copyright law for databases was the way to go, then:
1. The European database community would have flourished since 1996 while the US market has languished.
2. In light of the new law, European creators of databases were creating databases they wouldn't have necessarily created without the right.
3. The right is promoting innovation and competition rather than stifling it.
As far as analyzing these issues, Boyle points out that one of the major problems with the current situation is that Europe has not conducted a review of the effects of granting the right, it is three years late, so all of the evidence may not be in. However, Boyle’s has done some preliminary research and has found support suggesting the negative to the three issues he proposes should be examined.
First rule of thumb for regulators: when someone with a profit margin over 20% asks you for additional monopoly protection, pause before agreeing.
Boyle's research states that major Database producers such as Lexis and Westlaw have been yeilding over 20% in the last few years, hardly languishing. AS for Europe:
But database growth rates have gone back to pre-Directive levels, while the anti-competitive costs of database protection are now a permanent fixture of the European landscape. The US, by contrast, gets a nice steady growth rate in databases without paying the monopoly cost. (Second rule of thumb for regulators: Do no harm! Do not create rights without strong evidence that the incentive effect is worth the anti-competitive cost.)
Finally, Boyle points out that innovation has not flourished, although he also points out that it is hard to judge what "wasn't" invented:
In fact, academic scientific bodies have been among the strongest critics of database protection. But negative evidence, by its nature, is hard to produce; “show me the science that did not get done!” Certainly, both US science and commerce have benefited extraordinarily from the openness of US data policy.
Boyle advocates that a true review of the effects of the copyright law on databases be conducted as soon as possible, so that a true outlook be determined.
I found this article to be very interesting. Whether or not these same types of comparisons can be done for other types of copyrights will take some more time for us to find out. For instance we could do a similar study of works in Australia where the copyright limit was not extended as far as ours in the US. But it may take some time to actually see the effects of time limits on copyrights as it is just recently that popular classical works are starting to enter the public domain.
Boyle’s arguments on creating IP legislation and suggestions on procedures that can work across the board for developing legislation, and deciding which regulations to implement are very persuasive. When looking at the law that was argued by Hollywood to have copyrights extended to 120 years, it has been difficult to see the benefit or any change at all in encouraging people to create new works. I think it would be beneficial for society to spend some time looking at the results and effects of the copyright extension law. So when the studies show that the law has not encouraged more people to be innovative, and perhaps has hindered more than helped, we can then use this solid evidence to prove copyright limits should be reduced.
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