Copyrights and Trademarks in Cyberspace: A Legal and Economic Analysis

Chicago-Kent Journal of Intellectual Property, Sep 2016

By Georgios I. Zekos, Published on 01/01/16

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Copyrights and Trademarks in Cyberspace: A Legal and Economic Analysis

Chicago-Kent Journal of Intellectual Property Copyrights and Trademarks in Cyberspace: A Legal and Economic Analysis Georgios I. Zekos Follow this and additional works at: https://scholarship.kentlaw.iit.edu/ckjip Part of the Intellectual Property Law Commons Recommended Citation Georgios I. Zekos, Copyrights and Trademarks in Cyberspace: A Legal and Economic Analysis, 15 Chi. -Kent J. Intell. Prop. 313 (2016). Available at: https://scholarship.kentlaw.iit.edu/ckjip/vol15/iss1/10 GEORGIOS I. ZEKOS* I. INTRODUCTION Intellectual property is at the center of the “new economy.” New economy products are characterized by declining average costs over a range of outputs, high rates of innovation, and network effects.1 Classically, intellectual property is one element among many in a production process adding to the value of a firm via licensing for competent exploitation of IP rights, cost reductions, R&D investment, and new products.2 Cumulative innovation proceeds as innovators build on each other’s discoveries. A vital target of IP law is to reward innovation and creation, by granting exclusive rights to use a new invention, information or a cultural good. The legal system induces the economic system, and legal norms must be assessed in ways that lead to the best outcome.3 The return from intellectual property rights is directly correlated to the duration and scope of those rights. Copyright offers authors a legal instrument that reimburses them for their creative works. Copyrights are not absolute, and a copyright holder never has complete control over all probable uses of his work. A copyright is the right given to creators for their literary or artistic works, encompassing mediums such as books and e-books, plays, newspapers, computer programs, databases, films, musical compositions, paintings, photographs, sculpture, architecture, advertisements and maps. Copyright does not embrace ideas, processes or procedures, mathematical concepts or methods of operation. Similarly, IP rights make digital goods legally exclusive as well. The protection obtainable by copyright is only for the expression of the work. * Advocate and Economist. BSc (Econ) Aristotle University, JD Democritus University, LLM, PhD (Law) University of Hull, PhD (Econ) University of Peloponnese. The author may be contacted by email at or . 1. GEORGIOS I. ZEKOS, MNE’S IN 21ST CENTURY (2016); GEORGIOS. I. ZEKOS, LAW AND ECONOMICS OF IPRS (2016); Richard A. Posner, Antitrust in the New Economy, 68 ANTITRUST L.J. 925, 926 (2001). 2. Julie E. Cohen, Copyright as Property in the Post-Industrial Economy: A Research Agenda, 2011 WIS. L. REV. 141, 1 43 (2011 ) (“[T]he purpose of copyright is to enable the provision of capital and organization so that creative work may be exploited.”) 3. R. H. Coase, The Institutional Structure of Production, 82 AM. ECON. REV. 713, 715 (1992). 314 The goal of copyright law is to preclude the unlawful use or piracy of any literary or artistic work by a third party. Works that are not protected by copyright law therefore belong to the public. Trademark law allows consumers, in the marketplace, to swiftly identify a product they liked or disliked in the past. Therefore, trademarks allow companies and consumers to distinguish among the different competing manufacturers of a given product. No one is entitled to sell or deliver commodities under the appearance that the commodities derive from someone else. The importance of consumer protection cannot be overemphasized, and the average consumer standard should remain the central point of the inquiry, even for domain name litigation. Trademark protection promotes three main policies: (1) protection of the trademark holder’s goodwill, (2) protection of the consumer, and (3) economic efficiency. Goodwill should be protected to the extent needed to prevent the unjust enrichment of a competitor. When there is no confusion at the time the user clicks on the advertisement or web-link, it does not lead to unjust enrichment. Fair use is a defense to trademark infringement, and one example of fair use is comparative advertising. Trademark protection, while constituting a vital instrument to make certain markets transparent, must be reconciled with other principal values including free expression, by enhancing consumer information and consumer preference, and free competition, averting needless barriers of entry in the market.4 The TRIPS Agreement includes a set of minimum principles for IP rights protection and calls for all member countries to use the most-favorednation principle in IP protection. Nevertheless, IP rights protection is currently not close to harmonization across nations, and the TRIPS Agreement failed to harmonize standards of protection among intellectual property systems. The TRIPS Agreement does, however, include Article 10,5 which describes computer programs and compilations of data, as well as Article 11,6 which tackles the rights of authors and their s (...truncated)


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Georgios I. Zekos. Copyrights and Trademarks in Cyberspace: A Legal and Economic Analysis, Chicago-Kent Journal of Intellectual Property, 2016, pp. 313, Volume 15, Issue 1,