Sunday, January 22, 2012

Swiss Senate: NO to Strict Intellectual Property Law

Senate Report: Leave Swiss Copyright Laws Alone

A 2011 Swiss Senate study on the effect of downloading and file-sharing recommends maintaining current Swiss intellectual property laws. Under the current law, downloading is legal.  The study, undertaken by the Swiss Federal Department of Justice and Police, concluded that the overall effect of downloading on consumer behavior is to change consumption patterns away from albums and DVD purchases 

The Underlying Economics
The study finds no negative impact on cultural and intellectual creation. In fact, a 2009 study carried out in the UK found the effects of file-sharing to be that of an increase of revenues to creators of art and intellectual property, as well as a reduction of revenue to the record labels. 

According Swedish MEP Christian Engström, this should come as no surprise. While the core economic function of the artists is to create artistic, that of record labels is to distribute said content. Because file-sharing is a more efficient distribution method for artistic content, it should come as no surprise that the distribution industry would begin to decline, along Shumpeterian lines. This is a concept which many economists feel simply cannot be effectively legislated against, certainly not without doing more harm than good.  

SOPA and the Role of Intellectual property
The concept of intellectual property rights can be seen as an umbrella concept for several different rights. On one hand, there is the right to take credit for creation of the intellectual work or product. Then, there is the right to claim a commercial monopoly on duplication of the product or work, for profit.

Lastly and most controversial, there is the right a monopoly on performance or expression of the intellectual product. -and to prevent others from doing so- The last one has proven controversial because it essentially means that the dissemination and the viral spread of culture and research must be slowed down, in order that financial profit accumulates to the party holding the monopoly right. 

All else aside, intellectual property rights are monopoly rights and their debate should be treated as such. They exist ostensibly on a temporary basis and meant to serve as an incentive for intellectual creativity. While many economists are deeply suspicious of any argument for a monopoly, most are willing to put up with a limited amount of necessary evil of distortion of the market-place in order to incentivize R&D. What most economists are suspicious of is the expansion of such distortion, where it already exists.  

SOPA is a highly controversial bill which entered the the House of Representatives in February 2012. The bill ostensibly sought to defend the intellectual property rights for holders of copyrighted material, at the expense of individual freedom of communication on the internet. No surprisingly, the bill was mostly backed by the distribution industry, who at present time makes the majority of the revenue from the copyrighted content. Their stake is under threat from efficient competition. Their defense is to use hostile language about theft and piracy as a shallow attempt to frame the debate as anything but a debate about monopoly power or a competition between distribution systems. 

This debate should be seen for what it is. This is an attempt by special interests to seek the artificial creation and expansion of a monopoly, at the expense of both freedom and creative output. The public doesn't need this and the artists don't need it either. The word "piracy" is mere smoke screen.

The Senate Study
The Senate report report provides an overview of the current situation. Up to one third of those over 15 years in Switzerland downloading free music, movies and games. Nevertheless, the share of disposable income spent by consumers and consumers in this area remains stable. Thus, users and users sharing sites continue to spend on the entertainment industry. The overall effect of downloading is that expenditures on CD and DVDs are being displace by increased expenditures on merchandise, movie tickets, and concert tickets. Total entertainment expenditure has remained roughly the same according to the report. (FR) (DE)
The Swiss Conseil Fédéral is the upper chamber of the Swiss Legislature. It serves as both the main federal body and the Swiss Head of State. It has seven members, each representing one canton and heading one of the seven federal executive departments.   

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