The economic impact of consumer copyright exceptions: a literature review

Advances in the technology available to consumers have fundamentally altered the relationship between authors, rights-holders and consumers with regard to copyrighted creative works. The copyright system in the UK is undergoing a gradual process of reform to reflect this new reality. In 2006, Andrew Gowers, a former editor of the Financial Times, presented a report into the state of intellectual property in the U.K. Among his policy recommendations were three proposed changes to the copyright exceptions system which alter the way in which consumers can interact with copyrighted works. Gowers proposed introducing copyright exceptions for: - Format shifting, for instance the transfer of a piece of music from a CD to an mp3 player. - Parody, caricature and pastiche. - Creative, transformative or derivative works. In our context, this definition includes user-generated content. Our review examines the existing literature on the possible economic effects of these proposed changes to the copyright exceptions system, specifically whether the introduction of these proposed changes would cause economic damage to rights-holders. Whilst the economic issues surrounding copyright infringement via file-sharing and commercial "mash-ups" are interesting and important, our review is focused solely on copyright