Friday, August 11, 2006

IP Scholars conference, information overload externalities

Frank Pasquale, The Law and Economics of Information Overload Externalities. Pasquale wants to intervene in the Google Print debate as a justification for Google’s use. He recommends changes for fair use, specifically a factor-one privilege for categorizers and an expansion of misuse. He also wants to participate in debates over the nature of law and economics in IP. If information overloads are externalities, this has broader implications for IP, health care, and other fields.

Maybe we should consider different treatment of public and private actors – e.g., the NIH versus Google, with the former having a broader scope of fair use.

Buena Vista v. Video Pipeline is a major anti-snippeting case, giving Disney the right to license trailers only to people who won’t criticize Disney. Do the content owners get to control all convenient reference sources? Parts of Ty v. Publications Int’l suggest this is misuse. (Given my IP database, I realize that the snippeting debate concerns me greatly. Is a nonprofit a public actor in Pasquale’s sense?)

Bottom line: Google Library generates many positive externalities, especially in the developing world. Equality of acces, a right to know what’s out there, isn’t taken into account in the current fair use doctrine.

Trademark protections focus on reducing consumers’ search costs, and substantially similar mars can occlude the signal of mark owners. Categorization serves a similar function to TMs by generating metadata structures to help us navigate vast amounts of data. Both are probabilistic harms – one man’s trash is another man’s treasure; 60% of people might not be fooled, but if 40% are that’s infringement.

A privilege for categorizers: An initial problem in evaluation is the question of whether the “search results” are the accused work, or are particular entries the work? Cf. Hughes on microworks (see previous post).

We’ve got great scholarship on the positive externalities of categorizers. What does “cultural environmentalism” gain from adding in negative externalities? Even though we think a work may be valuable for any particular person, lack of coordination can render the overall landscape less valuable.

Mental harm is as real as physical harm, so data pollution is important. Why not Pigouvian taxation? Because of the probabilistic nature of the harm, First Amendment concerns, and lessons from environmentalism. But we can use externalities as a bridge concept to move between methodological individualism and overall social good. There are irreducibly social goods, and we need to understand how individualized transactions affect society as a whole while still being able to cash that out into the economic language of policy science.

What qualifies as a “categorizer”? Can Harry Potter fans create the “Harry Potter Search Engine”? Authors’ Guild’s professed nightmare is 10,000 wannabe Googles. Pasquale thinks the common law can work this out.

Why doesn’t Google settle? They’ve got billions of dollars. Amazon bargained, licensed, bullied a bit. That bargaining approach is the worst result, according to Pasquale. It would create insurmountable barriers to entry in the search engine market. You’d get all sorts of anti-criticism restrictions as in Ty and Buena Vista.

Question: What about a collective licensing solution? Answer: Deserves thought.

Trotter Hardy: There are always barriers to entry. So why is licensing a problem? People can borrow money to create a competing startup. Answer: Oblique answer with reference to net neutrality – why are people worried? It’s not that they think that they won’t be able to borrow money, but they fear being systematically disadvantaged, especially in a market that’s already nearly an oligopoly.

Mark Lemley: A universal library categorization might be effectively a natural monopoly. Duplicating it would be too expensive. Maybe if we don’t treat it as a private good, we’ll get entry that will be socially beneficial.

Search engines collapse cultural, economic, and social spaces, so you get different kinds of results when you put in “plastic christmas trees.” It would be good to have Christian search engines and liberal search engines etc.

Question: Should Google also archive paintings, sound recordings, photographs, newspapers, magazines, and everything else, providing snippets of them all without licensing? Answer: The problem is that licensing concentrates power too much; the problem you fear is one of concentration in Google’s hands, but there are other risks of concentration. There’s no difference between books and other types of texts, so go ahead with the snippets!

Question: Can Google create a market by giving royalties to authors then compete with Yahoo! on price? Answer: Maybe, but comprehensiveness also matters – so you’d want a metasearch engine that could look at both.

What about a government provision of this? Or of insurance against a major data breach? Some people are concerned about government control of information (or failure of government control, for that matter).

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