Just Add Coase

Following up on yesterday's post on the ongoing discussion of the CleanFlix court case, I just wanted to add one more point on the failure of IP law as it currently stands.

First, per Coase, I posit that in the absence of transactions costs, the initial allocation of property rights doesn't especially matter, as things will find, through the market, their highest-value use. However, one completely predictable effect of a byzantine system of copywrites, patents and trademarks as practiced in the U.S. is to geometrically increase the transactions costs concerning these rights - it's difficult enough to even find who might 'own' the property. And then we get fiascos where an obviously original work of art is stymied, and the creativity shown is punished rather than lauded.

Further, as I said before, one of the reasons I have little problem with CleanFlix is that they pay for their 'raw materials' (the original film) - in no way am I suggesting that 'fair use' should equal 'free use'. If The Grey Album was ever sold commercially, damn right that Jay-Z and whoever owns the publishing rigths to The White Album (EMI, it turns out. Feh...) should get a cut. But just as the lumber yard shouldn't have veto power over the design of my house...

Obviously, it's also important for authorship to remain clear and distinct - (which test CleanFlix also passes) - an adulterated version of a film or song should not be ascribed to the original artist - but these are practical concerns of a better system than the current one, a system more responsive to both the technology available and the interactivity and personalization demanded by present-day consumers. I'm not arguing that the court's decision was wrong, I'm suggesting that the laws themselves should be rewritten, and, more importantly, re-imagined.