My #IPSC slides – Copyright & Compulsory Licenses

IPSC 2013 (Matthew Sag)

Recent proposals to address library digitization through variations of compulsory licensing raise some important questions about the justification for compulsory licenses, the institutional design considerations that should go into any compulsory license regime and the relationship between fair use and compulsory licensing. For the most part, compulsory licenses are no substitute for fair use. Although fair use can be explained in terms of ‘market failure’ in the most abstract sense, in practice most fair uses are not simply the result of high cost of transacting, or if they are, these are not the kinds of transaction costs that can be resolved by a one-size-fits-all compulsory license. Compulsory licenses can be socially beneficial in theory, but they can be extremely problematic to administer in practice. A good compulsory license system may be an effective complement to fair use, but the case for crowding out fair use with compulsory licenses is weak.

In this presentation I explain six important institutional design considerations that must be addressed before anyone can seriously advocate establishing a copyright collective by legislative fiat.

Institutional Design Issues

  • Rate-Setting {who decides? what decision standard? how does the decision-maker get reliable information?}
  • Monopoly Pricing
  • Principal-Agent Problems
  • Mission Creep
  • Stifling Innovation
  • Overshadowing other policy imperatives