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Contribution to Collected Edition

Regulatory Innovation and the Institutional Design of the TRIPS Agreement


Podszun,  Rupprecht
MPI for Innovation and Competition, Max Planck Society;

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Podszun, R., & Franz, B. (2016). Regulatory Innovation and the Institutional Design of the TRIPS Agreement. In H. Ullrich, R. M. Hilty, M. Lamping, & J. Drexl (Eds.), TRIPS plus 20 - From Trade Rules to Market Principles (pp. 279-311). Heidelberg; Berlin: Springer.

Cite as: http://hdl.handle.net/11858/00-001M-0000-0029-798B-9
Twenty years after the initial wave of national and international activity outlining the role of copyright within the world’s first digital communications policy, the contours of a few fundamental policy principles at the intersection of copyright law and Internet regulation have begun to take shape. This paper focusses its attention on the continuing development of one such principle: The premise that legislatively mandated limitations on internet intermediary liability with regard to third party acts of copyright infringement (so-called safe harbors) are required to promote investment and innovation in Internet-related infrastructure and technology in order to achieve the goal of a robust public information environment. In the early days of the Internet, internet intermediaries argued that without certain limitations on their liability, little-to-no investment in the nascent information infrastructure would occur, i.e. there would be no market creation. Rightholders consistently countered this contention by arguing that, in the absence of adequate protection, they would not place their works online, i.e. there would be no goods on the market. Safe harbors were seen as a mechanism for ensuring right holder safety in the online environment without discouraging rapid market creation or hindering the democratic potential of the Internet. For the initial phase of the digital era, this compromise worked rather well. This paper demonstrates that, while consensus may be found regarding the basic premise of this precept and perhaps even with regard to specific aspects of its implementation, there is certainly nothing approaching universal understanding on how to best effectuate the policy goal. The reasons for this disagreement are manifold and rather comprehensible. The rapidly evolving technological landscape, the differing national and regional approaches to the regulation of the Internet, and the diverse legal and cultural environments all combine to make arrival at a globally appropriate safe harbor regime very challenging. Recognizing the obstacles to harmonization in this field is particularly relevant considering the ongoing attempts of the US to convince its trade partners to adopt a safe harbor framework largely equivalent to, and in certain respects likely narrower than, that which is laid out in the Digital Millennium Copyright Act (DMCA-plus). This paper argues that while harmonization may seem attractive given the international nature and overall importance of the Internet, standardization based upon an intricate and outdated internet safe harbor regime originally tailored to fit the needs of US industry is suboptimally configured for the digital communications policy requirements of the entire world.