Steve R.: I’m just trying to figure out how copyright works, right now. I won’t pretend that I’m not predisposed to favor certain outcomes–my advocacy of “intellectual privilege” should show that much–but you shouldn’t read too much into the present post.

David: I’m worried about the over-extension of copyright, too. Hence my effort in trying to get a firm grip on how to evaluate it as a matter of policy.

Steve R. (again): The price of the first sale should include the value of the future uses–including resales. For an excellent explanation of that idea, see Easterbrook’s opinion in Lee v. A.R.T. Co., 125 F.3d 580 (7th Cir. 1997).

Of course, the sale of goods in the secondary market is still an economic benefit and can still provide subsequent revenue to the original producer through ancillary sales.

First (to address the question of explaining the distance between lines AR and D in Figure 2) the distance between these lines is created by the availability of “free” content (legal and illegal).

To explain, as you correctly note, the demand line is an “aggregate” line. As an aggregate line it is the sum of alternate, substitute, and similar demand. Furthermore, demand is not necessarily for a discrete physical product. For example, buying a book is not the “demand” of line D. The demand of line D is more appropriately “three hours of recreational time” since the book buyer could have gone fishing (alternate), could have bought a DVD (substitute), or could have bought a book of a different title (similar).

Now if you consider the time spent on the TLF as recreational (in competition with buying a book), this “free” non-monetized time pushes line AR to the left away from line D. We could also say that going to the library and checking the book out would have the same effect of pushing line AR away from line D.

Second, the implicit assumption that IP owners are somehow being victimized needs to be questioned and tested. My viewpoint is that we are dealing in shades of gray. Tim in “Good Fences Make Good Neighbors” (TLF, 8/24/200) reiterates that we need clear property lines to establish ownership. Artistic content, in many cases, lacks clear property lines because of its subjective nature.

Furthermore, many content producers are now asserting so-called rights, that I believe they do not possess, to take away the rights of the consumer. In a sense, we can say that the content producers, in some cases, are “stealing” from the consumer. So when I read statements such as “Some such uses happen through infringement, such as street corner sales of pirated DVDs. my red-herring detector goes bonkers.

You raised the issue of “government services”. Again I wonder if this is a precursor for somehow concluding that the government should not be involved in the free market system. My belief is that the government services have a right to participate and if private industry can’t compete too bad. Private industry has no intrinsic right to a profit.