chapter  6
40 Pages

Intellectual property in the digital era: economic analysis and governance by technology

The introduction of digital technology in the second half of the 20th century dramatically changed the economic setting of information markets. On the one hand, it became extremely easy to copy copyrighted materials in a digital format and to make it available through digital networks. At the same time, however, digital technology enables powerful mechanisms of self-help to control the use of information works, from limiting access to authorized users only, to long-term ongoing control over the use of copyrighted or patented materials long after they were purchased by authorized users. These developments call for a re-examination of economic analysis of IP laws, particularly, but not exclusively, in the fi eld of copyright law. This chapter explores the implications of the rise of digital locks vis-à-vis the justifi cations for central intervention in the market for informational goods. It focuses on the economic analysis of technological protection measures (TPM) or as often called digital rights management (DRM) systems and on the major tool of central intervention that has been employed in this context so far – anti-circumvention legislation.