IP: A natural experiment

From: sinister (sinister_at_nospam.invalid)
Date: 11/26/04 

Date: Fri, 26 Nov 2004 19:00:11 GMT

Link: http://news.ft.com/cms/s/4cd4941e-3cab-11d9-bb7b-00000e2511c8.html
Author: James Boyle
Title: "A natural experiment"
In _Financial Times_, 2004-11-22

Excerpts:
"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."

"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."

"What we really need is a test case where one country adopts the proposed
new intellectual property right and another does not, and we can assess how
they are both doing after a number of years."

"There is such a case. It is the 'database right.' Europe adopted a Database
Directive in 1996 which both gave a high level of copyright protection to
databases, and conferred a new "sui generis" database right even on
unoriginal compilations of facts. In the United States, by contrast, in a
1991 case called Feist, the Supreme Court made it clear that unoriginal
compilations of facts are not copyrightable."

"Bottom line? Europe's industry did get a one-time boost, and some of those
firms have stayed in the market; that is a benefit, though a costly one. 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.)"

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