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Gallagher, Thomas --- "Copyright compulsory licensing and incentives" [2002] ELECD 51; in Towse, Ruth (ed), "Copyright in the Cultural Industries" (Edward Elgar Publishing, 2002)

Book Title: Copyright in the Cultural Industries

Editor(s): Towse, Ruth

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781840646610

Section: Chapter 6

Section Title: Copyright compulsory licensing and incentives

Author(s): Gallagher, Thomas

Number of pages: 14

Extract:

6. Copyright compulsory licensing and
incentives
Thomas Gallagher

6.1 INTRODUCTION

Consequentialist approaches to copyright law rely on economic analysis to
explain existing law and to evaluate proposed changes to copyright law.
Economic analysis of copyright law is pursued from two distinct perspectives.
It is equally acceptable to explain copyright either as an incentive or in the
context of transaction costs.1 The incentive argument for copyright focuses on
the under-production/under-utilization paradox that provides the central
problem in the economics of information.2 Seen in copyright terms, exclusive
property rights provide incentives to produce copyright works and inevitably
restrict access for secondary users and consumers.3 Acceptance of the premise
that copyright law must strike the correct incentives/access balance provides a
framework for understanding more complex areas of the law, such as the
compulsory licensing of copyright works.
The economic consequences of compulsory licensing of copyright works
are also usefully explained from either the `incentives/access' or `transaction
costs' perspective. This chapter solely focuses on the relationship between
compulsory licensing and copyright's incentive function. This approach
differs from existing scholarship in the United States, where compulsory
licensing is discussed purely in terms of its impact upon transaction costs in
copyright markets.4 The incentive argument for compulsory licensing focuses
on incentives/access imbalances in copyright: the under-production of works
in new technological environments lacking copyright protection and the
under-utilization resulting from copyright protection in the presence of market
power. Once compulsory licensing is ...