Justifications for Copyright: The Economic Justification

• Date: 16 August 2019
• Pages: 13-41
• Citation: (2014) IPLJ 13
• Author: Sadulla Karjiker
• Published date: 16 August 2019

JUSTIFICATIONS FOR COPYRIGHT:

THE ECONOMIC J USTIFICATION*

 

Senior Lecture r, Faculty of Law, Stelle nbosch University

 

         

protection, namely, the labour-based theories (natu ral rights theory and t he

reward theory) and the pers onality theory, were considered.1 As demonstrated

        

  

       

the economic theory, both of which will now be considere d. The basis of

copyright law in the United St ates of America (US) and the United Kingdom

is more economic or utilitar ian, rather than being ba sed on author’s rights,

 2

           

       



to the analysis of law is simply a form of utilitar ianism, and, therefore, subject

to the same criticisms. It is subm itted that the economic and util itarian



      

that while some social inst itutions, such as copyright protect ion, cannot be

             

economic reasons for their exis tence.

After an int roduction to the economic analysis of law, an argument

             

* This art icle is based on part of my docto ral dissertatio n at Stellenbosch University. I would li ke

to thank my su pervisor, Prof Owen De an, for his valuable guid ance during my re search.

  

1 S Karjike r ‘Justifications for copy right: The moral jus tifications‘ (2013) 1 IPLJ 42.

   

law‘ (2009) 27 Cardozo Art s & Ent LJ  

modern world: Is it t ime for change?’ (2012) 7 JIPLP 565 at 566.

13

SAIPL 2014 (1).indb 13 2014/11/11 11:02 AM

(2014) IPLJ 13

© Juta and Company (Pty) Ltd

maximisation),3 which is advocated by economic a nalysts, and why it is

considered to be a superior nor m for legal theory tha n utilitarianism.

  

        

other two being the labour-based t heories and the personality t heory – and is

   4

     

in the evolution of copyright protection in A nglo-American systems of

intellectual prope rty, and is said to form the basis of copyright law in the US,

having been enshr ined in the constitutiona l foundations of US intellectual

pr oper ty law.5

A utilitaria n approach to matters advocates that a n act or institution is

preferred if it is likely to maxi mise social happiness or utility, namely, the

extent by which pleasure exceeds pain.6 T he appropriate course of action

      

states that ‘[i]n its absolute form, the doctr ine that an individual has ce rtain

inalienable rights is inc ompatible with utilitarianism, ie with t he doctrine that

the right acts are t hose that do most to promote the general happiness’.7 There

are, therefore, no inalienable, or a prior i, rights; whether a right or institution

is recognised is simply a fu nction of its outcome. A particular cou rse of

action is correct be cause of the result achieved, rather than be cause of any

           

 

          

              

           

          

          

              

3 When referr ing to efficiency in t his work, we will be conce rned with allocative ef ficiency – the

aggregate of the c osts and benefits of a par ticular situat ion. In other words, we are in terested in

how society can get t he most out of particular re sources. The accepted st andard for efficiency

in economics is t he pursuit of Kaldor-Hicks ef ficiency, aggregate, n ot individual, wealt h

maximisa tion. A given situ ation is Kaldor-Hick s efficient provid ed aggregate we alth is increa sed,

and those who have be nefitted can, in t heory, compensate t hose who have lost. JL Har rison Law

and Economic s in a Nutshell 1 ed (1995) 27–35; and AM Polinsky An Introd uction to Law and

Economics 3 ed (2003) 7–11.

4 SE Trosow ‘The illu sive search for justific atory theories: Co pyright, commod ification and

capital’ (2003) 16 Can J L & Juris 217 at 226.

5 SP Caland rillo ‘An economic analysi s of intellectual p roperty rig hts: Justificat ions and problems

of exclusive rights, in centives to generate i nformation, and t he alternative of a govern ment-

run reward s ystem’ (1998) 9 Fordham Intell Prop Media & Ent LJ 3 01 at 310; EC Hettinger

‘Justifying i ntellectual p roperty’ (1989) 18 Philosophy and Publi c Affairs 31 at 47; and AD Moore

‘A Lockean theory of intel lectual proper ty’ (1997) 21 Hamline L Rev 65.

6 RA Posner ‘Utilit arianism, econom ics, and legal theory’ (1979) 8 The Journ al of Legal Studies

103 a t 111.

7 B Russell Histor y of Western Philosophy 1 ed (200 5) 572.

14 South African Intellectual Property Law Journal (2014) 2

SAIPL 2014 (1).indb 14 2014/11/11 11:02 AM

© Juta and Company (Pty) Ltd