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74 Fordham L. Rev. 537 (2005-2006)
Legal and Technical Standards in Digital Rights Management Technology

handle is hein.journals/flr74 and id is 553 raw text is: PANEL IV: MARKET REGULATION AND INNOVATION LEGAL AND TECHNICAL STANDARDS IN DIGITAL RIGHTS MANAGEMENT TECHNOLOGY Dan L. Burk* INTRODUCTION Copyright and similar exclusive rights regimes have long been mainstays of innovation policy, purporting to provide the incentive necessary to generate creative and innovative products for the benefit of the public. The received economic wisdom holds that a period of legal exclusivity allows the developer of a new creation to recoup the investment made in development, either by selling the product at higher than marginal cost or by licensing the work to others who will sell it at higher than marginal cost.I The supranormal profits generated by excluding the creation or its close substitutes from the marketplace provide the incentive for the initial investment in what we term intellectual property. To be sure, the promise of a return on investment is important for the development of all kinds of goods, not merely those we term intellectual property. However, many products of human endeavor require little or no developmental encouragement by way of legal exclusion, as these goods naturally carry the attributes of exclusivity in their form or design. While tangible goods generally benefit from some legal protection against theft, there is already a considerable cost to misappropriation of such goods, and the cost is often substantial enough both to deter pilferage of these products and ensure a return on the investment needed to create them. Absent a radical departure from the usual laws of physics, it is difficult to walk away with a building,2 or to feed a multitude with five loaves and two fish.3 * Oppenheimer, Wolff & Donnelly Professor of Law, University of Minnesota. Copyright 2004 by Dan L. Burk. 1. See William M. Landes & Richard E. Posner, An Economic Analysis of Copyright Law, 18 J. Legal Stud. 325, 326-27 (1985). 2. See Lawrence Lessig, Constitution and Code, 27 Cumb. L. Rev. 1, 1 (1997). 3. See Matthew 15:32-38, 16:21; cf Exodus 16:4. One of the common themes of mythologies around the world is that, terrestrial scarcity notwithstanding, the gods miraculously provide private goods as if they were public goods. See Hugh Nibley, Work We Must, but the Lunch Is Free in Approaching Zion 202, 217 (Don E. Norton, ed. 1989).

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