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An Economic Model of Fair Use

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  • Thomas J. Miceli

    (University of Connecticut)

  • Richard P. Adelstein

    (Wesleyan University)

Abstract

The doctrine of fair use allows unauthorized copying of original works of art, music, and literature for limited purposes like criticism, research, and education, based on the rationale that copyright holders would consent to such uses if bargaining were possible. This paper develops the first formal analysis of fair use in an effort to derive the efficient legal standard for applying the doctrine. The model interprets copies and originals as differentiated products and defines fair use as a threshold separating permissible copying from infringement. Application of the analysis to several key cases (including the recent Napster case) shows that this interpretation is consistent with actual legal reasoning. The analysis also underscores the role of technology in shaping the efficient scope of fair use.

Suggested Citation

  • Thomas J. Miceli & Richard P. Adelstein, 2003. "An Economic Model of Fair Use," Working papers 2003-38, University of Connecticut, Department of Economics.
  • Handle: RePEc:uct:uconnp:2003-38
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    References listed on IDEAS

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    1. Benjamin Klein & Andres V. Lerner & Kevin M. Murphy, 2002. "The Economics of Copyright "Fair Use" in a Networked World," American Economic Review, American Economic Association, vol. 92(2), pages 205-208, May.
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    6. Cooter, Robert D & Rubinfeld, Daniel L, 1989. "Economic Analysis of Legal Disputes and Their Resolution," Journal of Economic Literature, American Economic Association, vol. 27(3), pages 1067-1097, September.
    7. Novos, Ian E & Waldman, Michael, 1984. "The Effects of Increased Copyright Protection: An Analytic Approach," Journal of Political Economy, University of Chicago Press, vol. 92(2), pages 236-246, April.
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    9. Adelstein, Richard P. & Peretz, Steven I., 1985. "The competition of technologies in markets for ideas: Copyright and fair use in evolutionary perspective," International Review of Law and Economics, Elsevier, vol. 5(2), pages 209-238, December.
    10. Posner, Richard A, 1992. "When Is Parody Fair Use?," The Journal of Legal Studies, University of Chicago Press, vol. 21(1), pages 67-78, January.
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    Cited by:

    1. Gans, Joshua S., 2015. "Remix rights and negotiations over the use of copy-protected works," International Journal of Industrial Organization, Elsevier, vol. 41(C), pages 76-83.
    2. T. Randolph Beard & George S. Ford & Gilad Sorek & Lawrence J. Spiwak, 2018. "Piracy, Imitation, and Optimal Copyright Policy," Southern Economic Journal, John Wiley & Sons, vol. 84(3), pages 815-830, January.
    3. Yoon, Kiho, 2008. "An economic model of fair use: Comment," Information Economics and Policy, Elsevier, vol. 20(1), pages 67-74, March.
    4. Baker, Matthew J & Cunningham, Brendan M, 2006. "Court Decisions and Equity Markets: Estimating the Value of Copyright Protection," Journal of Law and Economics, University of Chicago Press, vol. 49(2), pages 567-596, October.
    5. Wendy J. Gordon, 2014. "The fair use doctrine: markets, market failure and rights of use," Chapters, in: Richard Watt (ed.), Handbook on the Economics of Copyright, chapter 4, pages 77-92, Edward Elgar Publishing.

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    More about this item

    JEL classification:

    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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