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CONTACT: David Fish
May 6 , 2004
(202) 289-8928
Liebowitz Critiques Alternatives to Copyright
IPCentral Review Article Identifies Problems With Compulsory License Schemes

WASHINGTON D.C. - IPCentral Review, the new e-journal focusing on intellectual property, has posted: "Alternative Copyright Systems: The Problems With A Compulsory License," by Professor Stanley J. Liebowitz of the University of Texas. It assesses potential alternatives to the current copyright system -- such as taxes on hardware combined with compulsory licenses -- and concludes that "it is unlikely that a compulsory license would meet even the modest goals of [having] a net positive impact, to say nothing of the claims of virtual perfection that have been attributed to it."

Noting the dispute over the "zealous attempt" by copyright owners to "shut down and limit" P2P file sharing, Liebowitz says that many analysts and academics support the idea of a compulsory license as a "supplement" or even "complete replacement of traditional copyright, at least for recorded music." But despite "theoretical advantages," he maintains "the defects of such a system have not been sufficiently examined." The article is an attempt to remedy that gap.

The Texas economist is troubled by the "command and control" nature of compulsory license: It "throws out the markers, the lighthouses if you will, that can help guide the prices in these markets," he writes. "A compulsory licenses regime requires that prices and revenues be set in some arbitrary manner," which is highly inefficient. Instead, Liebowitz urges consideration of other approaches, including digital rights management, though "we should not be so quick to abandon the current market." His reason: "It is not yet clear how onerous enhanced enforcement of current copyright laws will turn out to be, or whether such enforcement can feasibly protect the industry."

A product of The Progress & Freedom Foundation's Center for the Study of Digital Property, the Review plans to feature a major article each month, and often supplements this with additional work that critiques the main article or expands on some of its ideas. In this month's installment, Prof. Michael K. Abramowicz of George Mason University School of Law and Katherine A. Lawrence of the University of Michigan Business School comment on Professor Liebowitz' work.

The Progress & Freedom Foundation is a market-oriented think tank that studies the digital revolution and its implications for public policy. It is a 501(c)(3) research & educational organization.



The Progress & Freedom Foundation