KDI: Economic, Legal, and Technical Dimensions of Rights Management

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A variety of long-standing and remarkably stable legal and business institutions have supported and sustained the creation and dissemination of knowledge. Recent advances in digital technology have created the potential for much broader and deeper access to knowledge but, at the same time, raised significant challenges for these long-standing institutions. So far, efforts to apply the law of copyright and traditional business practices to the emerging digital environment have not been particularly successful, and there have been many proposals for alternative approaches. One such approach is rights management technology. While rights management technologies have so far mainly been deployed in entertainment products, the same sorts of technology may be used to manage the dissemination of scientific research or educational materials. This project investigates some of the intellectual property, privacy and security issues raised by rights management technologies. It conducts case studies of current and previous attempts to manage rights. Examples are copy protected software in the 1980s, copy management in Digital Audio Tape, and various current systems used in the entertainment industry. The project studies the limits imposed by technology and existing law, which inherently involves economic analysis about how owners and consumers of content will respond to the new possibilities offered by the rights management technology. On the technical side, the project investigates the theory of distributed rights management systems in order to understand what is possible and not possible for such systems. The project determines the terms and conditions that profit-seeking owners will choose to specify. Specifying liberal terms and conditions will make the content more valuable to users, but also will reduce sales, and the tradeoff between these two effects is subject to analysis.The fundamental problem in intellectual property law is to provide appropriate incentives to produce and disseminate valuable content. Intellectual property law that is too liberal risks the problem of inadequate incentives to create content; law that is too conservative risks the problem of inadequate dissemination of content. An optimal policy balances out these two effects. There has been substantial economic analysis of incentive effects in patent law, but very little of such work in copyright law. The project builds a numeric model of the tradeoff between the incentives to create and to distribute content that is suitable for benefit-cost analysis. This model incorporates several effects previously noted in the literature and will be useful for evaluation of proposals for new forms of intellectual property.Liability problems that arise in computer security are examined. One of the basic principles of tort law is that the party best able to reduce risk of an accident should bear most of the liability should the accident occur; this same principle can be applied to computer security. However, the nature of security accidents is different from standard torts, and several new effects arise.