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Broad Fair Use Exceptions Could Discourage Innovation Worldwide PDF Print E-mail

Today, the International Center for Law & Economics released a white paper, co-authored by Executive Director Geoffrey Manne and Senior Fellow Julian Morris, entitled Dangerous Exception: The detrimental effects of including “fair use” copyright exceptions in free trade agreements.

Dangerous Exception explores the relationship between copyright, creativity and economic development in a networked global marketplace. In particular, it examines the evidence for and against mandating a U.S.-style fair use exception to copyright via free trade agreements like the Trans-Pacific Partnership (TPP), and through “fast-track” trade promotion authority (TPA).

In the context of these ongoing trade negotiations, some organizations have been advocating for the inclusion of dramatically expanded copyright exceptions in place of more limited language requiring that such exceptions conform to the “three-step test” implemented by the 1994 TRIPs Agreement.

The paper argues that if broad fair use exceptions are infused into trade agreements they could increase piracy and discourage artistic creation and innovation — especially in nations without a strong legal tradition implementing such provisions.

The expansion of digital networks across borders, combined with historically weak copyright enforcement in many nations, poses a major challenge to a broadened fair use exception. The modern digital economy calls for appropriate, but limited, copyright exceptions — not their expansion.

The white paper is available here. For some of our previous work on related issues, see:

Academics Urge FTC to Endorse Case-by-Case Approach on Net Neutrality Concerns PDF Print E-mail

The FCC is considering a new Open Internet Order that could harm consumers by invoking Title II and banning paid prioritization. While the vast majority of  business arrangements between Internet and edge providers are pro-consumer, it is possible that a few harmful agreements may arise. But these cases should be judged on their merits. Instead, the FCC stands ready to adopt a proposal that would ban paid priority altogether, even though many such agreements would benefit consumers.

Today, 32 academics and scholars with expertise in law, business, economics, and public policy sent a letter to the Federal Trade Commission (FTC) — the nation’s chief agency for competition advocacy — urging it to caution the FCC against Title II and a blanket ban on paid prioritization.

“It’s sadly ironic that those advocating rigid net neutrality rules talk about permissionless innovation, yet want to ban paid prioritization — a type of commercial agreement that essentially doesn’t even exist yet,”  said Geoffrey Manne, Executive Director of the International Center for Law & Economics, which organized the letter. “What has really kept the Internet ‘free’ and ‘open’ has been focusing government on demonstrated problems, while remaining humble enough to admit that regulators don’t know what the future might, or should, look like. Net neutrality concerns over paid prioritization arrangements should be addressed if and when such deals actually occur—and only if they result in actual harm. The FTC should urge the FCC to adopt a case-by-case approach (like antitrust’s rule of reason) guided by economics, not hysterics and political pressure.”

The letter calls on the FTC to endorse such an approach and to urge the FCC to adopt it in any Open Internet rules the Commission may issue. The FTC regularly files comments with other government bodies as part of its competition advocacy program, and we believe this contentious issue begs for its expert guidance.

Read the full letter here.

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