Does copyright law work?

New and ongoing empirical research suggests: not always

As Congress starts thinking about renewing and, maybe, reforming copyright law, already there’s a debate brewing. One on side of this debate are content industry groups who think that, in the digital age, copyright law should give intellectual property more protection in order to give artists a financial incentive to create. On the other side are internet companies and digital advocates who think copyright law is already too strong and is stifling innovation. 

Interest groups in Washington DC are not known for their strict adherence to facts. But in this particular debate, ideas and intuitions hold unusual sway. Not only does real-world evidence not matter much, it often doesn’t exist. As a report from the National Academies put it back in May, “This debate is poorly informed by independent empirical research.” 

It’s strange that this is the case: Intellectual property is a legal idea rooted in economic assumptions that can be tested. But lawyers—even legal academics—have, as rule, based their work on the analysis of legal cases, rather than the analysis of data. Increasingly, though, legal scholars are testing the basic economic assumptions of copyright law against empirical results—and finding that they don’t hold up.

Copyright law is based on a simple idea: If a person produces a creative or innovative work, they should be able to control what happens to that work—who has access to it, how it’s sold, who can copy it—for at least some period of time, so that they can benefit, financially or otherwise, from their intellectual production. The idea is that protection will spur innovation—just like you’re not going to build a house if someone can just move into it when you’re done, you’re not going to write a book if someone can just copy it and sell it as their own. With copyright protections, creators can confidently produce new work, with the knowledge that they’ll be able to sell it for whatever it’s worth on the market. 

A couple years back, for instance, Christopher Buccafusco, now a professor at the Illinois Institute of Technology Chicago-Kent College of Law, began thinking about behavioral economics and how its insights might apply to markets for creative production. Like economics, he points out, “IP is based on the same sort of rational-choice assumptions on how brains and minds work”—assumptions that indicate that markets in intellectual property will function well, that sellers and buyers will be able to agree on a reasonable price for a piece of work.

But Buccafusco wondered, for instance, if there was a corollary to the endowment effect—a well-documented insight in behavioral economics, that people irrationally value objects more once they own them—in creative industries. He and Christopher Sprigman, a law professor now at NYU, set up a series of experiments that they thought could help them understand how creators value their work. In one experiment, they had one group of subjects write three-line haikus, to be entered in a contest with a prize of $50. These authors had the option of selling their poems (and the chance to win $50) to another group, the bidders. Both the authors and the bidders were asked to value how much a particular haiku was worth. 

It turned out that, perhaps not surprisingly, the creators of these tiny works of art valued them more than the people who were thinking of buying them. “Our data revealed that Authors valued their work more than twice as high as Bidders ($20.05 versus $9.21),” Buccafusco and Sprigman wrote. Another experiment involved having painters, owners, and potential buyers of artworks value paintings up for a $100 prize. On average, the painters valued their work at $74.53, the owners at $40.67, and the buyers at $17.88.

The takeaway, for Buccafusco and Sprigman, is that markets for creative work are not nearly as efficient as IP law assumes—and that the argument that more protection is needed to ensure innovation might not be quite right. “The work I do with Chris suggests that we don’t know as much about IP as we think we do,” says Sprigman. “It’s been a faith-based policy for a long time. A lot of people in my field are trying to uncover what IP laws actually do and what they don’t.”

Buccafusco, for instance, is involved with opening up a new Center for Empirical Studies of Intellectual Property at Chicago-Kent, which next month will hold the first workshop for scholars, from all sorts of fields, working to apply empirical methods to IP. At Columbia, a new project called piracy.lab is working on quantitative approaches to understanding “illicit knowledge” and is looking for funds. There’s also a growing literature on “low IP” sectors—creative industries like fashion, high cuisine, tattoo artistry, stage magic, and stand-up comedy—and how they function in the absence of copyright protection.There’s been a steady stream of papers that test questions like how well copyright enforcement works as a deterrent to infringement, how creators actually use IP law, and what happens when work falls into the public domain.  

Paul Heald, who teaches at the University of Illinois and is a leader in empirical research of copyright, has been studying the public domain for years, and much of his work has looked at what happens when copyrights expire. His interest in this type of research began after the Supreme Court decided, in 2002, that the Copyright Term Extension Act—the one named after Sonny Bono, that extended copyright term for an extra 20 years—was constitutional. The decision “relies on assertions made by copyright industry that…bad things happens when works fall in the public domain,” Heald says. “It just occurred to me that you could actually test some of these assertions and maybe it would be helpful when this questions come around again.”

This summer he published a paper that showed, as The Atlantic put it, that “copyright protection makes books vanish.” One argument for extending copyright is that it ensures the availability of creative works by giving copyright owners the financial incentives to keep them in circulation. By this logic, work under copyright should be widely available, while works in the public domain should be harder to find. But Heald’s research, which samples new books available on Amazon, showed the exact opposite: Although copyrighted books published the past decade or so are available, books published in the middle of the 20th century and still under copyright are much harder to find—there’s few new copies of them being made. Amazon has more books for sale from the 1910s and 20s—books that had fallen out of copyright and were being made available as public domain works. 

The point here isn’t that copyright law should be done away with altogether, just that it might be helpful, as the National Academies suggested in its report, to better understand how these laws affect people in practice. “If we’re in a world without copyright, you find researchers and academics and copyright holders holding hands a lot more—everyone agrees that copyright is helpful,” says Heald. “Once you push the copyright terms from 14 years, to 28 years, to 56 years, to life of the author plus 50, to life of the author plus 70—once you get in the realms of the extreme protection, you start getting these divergence.”

Empirical research doesn’t always go against industry assertions. Independent empirical research has shown, for instance, that the pharmaceutical industry really does need patents to keep churning out new drugs. And the best empirical work out there has confirmed the recording industry’s worry that illegal downloading has hurt music sales—even if the drop is maybe not quite as dramatic as industry advocates sometimes make it out to be. 

Part of what empirical research can show is how finer-tuned laws might work better. Not all creative industries work the same way—making a major motion picture requires more up-front investment than writing a poem; computer software might have a shorter shelf-life than a bestselling book. A few people doing this work floated the idea that copyright law should regulate creative industries more like the EPA regulates pollutants or the FDA regulates drugs—case-by-case, with research backing up policy decisions. “Regulatory agencies are capable of looking at products on the market and individual industries and creating regulation that fits them better than a one-size-fits-all law,” says Heald. “We can categorize copyright works into a dozen or so and get a more fine-grained treatment that would benefit everyone.”

But that’s hoping for a lot. First of all, as these researchers acknowledge, their work is in its early stages. They’re showing that not all the assumptions that IP policy has leaned on are necessarily correct, but that doesn’t mean they’ve determined what the actual rules that govern these markets are. “The things we do in our lab are pretty abstract from the real world,” says Buccafusco. “The painters we have from the Art Institute are not identically situated to the people making decisions for MGM.” 

Mostly, they’re hoping that, in the next round of copyright lawmaking, they’ll have some evidence to present lawmakers to help them better understand how the laws they’re making work—that the debate will be informed, just a little bit, by empirical, independent research. 

Disclosure: CJR has received funding from the Motion Picture Association of America (MPAA) to cover intellectual-property issues, but the organization has no influence on the content.

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Sarah Laskow is a writer and editor in New York City. Her work has appeared in print and online in Grist, Good, The American Prospect, Salon, The New Republic, and other publications. Tags: