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Intermediary Liability and Trade in Follow-on Innovation

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  • Alexander Cuntz
  • Matthias Sahli

Abstract

Liability rules affect the incentives of intermediaries to disseminate and curate creative works, in particular when works build on the work of predecessors and they are potentially infringing copyright. In an application to the visual arts, we show that appropriation artists borrow images from different sources and incorporate them into new, derivative works of art. By doing so, they risk infringing copyright but also put commercial trade and availability of the work at litigation risk as liability can extend to intermediaries in markets (auction houses) or in public exhibitions (museums). Using a differences-in-differences model and unique data on the level of the individual art work, we empirically investigate the impact of the prominent 2013 Cariou v. Prince U.S. court decision on trade and availability in Appropriation Art.

Suggested Citation

  • Alexander Cuntz & Matthias Sahli, 2021. "Intermediary Liability and Trade in Follow-on Innovation," IRENE Working Papers 21-11, IRENE Institute of Economic Research.
  • Handle: RePEc:irn:wpaper:21-11
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    References listed on IDEAS

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    More about this item

    Keywords

    Copyright; Intermediary Liability; Reuse; Appropriation Art; Auctions;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • Z11 - Other Special Topics - - Cultural Economics - - - Economics of the Arts and Literature

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