Graduated response: a least cost solution to reducing online copyright infringement

April 26th, 2010 by Barry Sookman Leave a reply »

A new article, Three strikes law: a least cost solution to rampant online piracy, published  by Charn Wing Wan, argues that graduated response systems can be justified on economic grounds as a way of reducing transaction costs associated with enforcing online copyright infringement.

The abstract of the article states the following:

“Legal context: The prohibitively high cost of civil litigation is inefficient against millions of online infringers; it is virtually impossible to stop online infringement. The establishment and maintenance of a social norm which makes people willing to conform to pro-copyright norms independent of any consideration of legal incentives is indispensable in the fight against online infringers. It requires a credible enforcement mechanism to tell people that online infringement will not be socially acceptable and to increase copyright compliance; but the efficiency of such an enforcement mechanism is a function of transaction costs of copyright enforcement. The debate on the three strikes law should be viewed from its potential impact on our social and economic well being. I suggest that the infringing subscribers, not copyright owners or OSPs, should bear the cost of enforcement. Reducing transaction costs of enforcement is the key factor in designing any three strikes law if there is any reasonable chance that it will work.

Key points: To find a least cost solution to online infringement requires a good understanding of the relationship between the principles of externality and of ‘least cost avoider’. The concept borrows from Tort Law.

Practical significance: The reduction of transaction costs of copyright enforcement in the networked environment increases the credibility of the copyright system, if any design of copyright rule such as three strikes law takes the transaction costs of enforcing copyright in the networked environment and the principle of least cost avoider into consideration, it will change the way we formulate copyright policy.”

The article is one of several recent ones to argue that graduated response systems can be justified on economic as well as other grounds. Other articles include: Prof. Bomsel Decreasing Copyright Enforcement Costs: The Scope of a Graduated Response, Prof. Bridy, Graduated Response and the Turn to Private Ordering in Online Copyright Enforcement, Prof. Strowel, Internet Piracy as a Wake-up Call for Copyright Law Makers—Is the ‘‘Graduated Response’’ a Good Reply?, Barry Sookman and Dan Glover Graduated response and copyright: an idea that is right for the times.

For more information about the Copyright Modernization Act or Bill C-11 or copyright reform, see Change and the Copyright Modernization Act.

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