Discussion paper
DP18237 The blurred lines of copyright infringement
This paper studies the creative process in a model where the level and direction of artistic effort are affected by judicial copyright enforcement. The analysis compares the performance of common sanctioning rules employed by U.S. courts in infringement cases and provides an economic micro-foundation for the independent creation defense in copyright law. Using a mechanism design approach, the paper highlights the benefits of complementing copyright litigation with a system of compulsory licensing. A calibration of the model to fit a leading music infringement case suggests that the damages awarded by courts may stifle creativity, as they substantially exceed those required to deter excessive entry and copying.
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