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Israeli Copyright Law: A Positive Economic Perspective
Published online by Cambridge University Press: 04 July 2014
Abstract
The purpose of this Article is to critically analyze and examine positive Israeli copyright law under the paradigm of law and economics. The Article reviews several central and influential decisions of Israeli Supreme Court in the area of copyright law. It then analyzes these decisions in a manner that critically evaluates the reflections and impacts of the law and economics school on positive Israeli copyright law. Within this framework, the Article focuses on a selected number of cases and topics, including the Israeli Supreme Court's interpretation and application of the originality requirement and the fair use exemption. As the discussion in the Article indicates, several important decisions of the Israeli Supreme Court have indeed applied, either explicitly or implicitly, utilitarian considerations while implementing economic analysis as a focal of Israeli copyright law. One interesting observation that arises from our survey is that at least in some cases, there is no correlation between a declaratory judicial implementation of economic considerations and the desirability of the court's decision in terms of its efficiency. In several cases, while the Supreme Court applied economic considerations as its proclaimed normative compass, the outcomes of the court's decisions seem inefficient; whereas in other cases in which courts applied non-economic theories as their corner stone (while neglecting emphasis on economic considerations) the results were found to be economically efficient.
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- Research Article
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- Copyright © Cambridge University Press and The Faculty of Law, The Hebrew University of Jerusalem 2006
Footnotes
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Lecturer, the Faculty of Law, the Hebrew University of Jerusalem. I am grateful to Barak Medina and Shiri Granot for their excellent remarks on a previous draft. Additional thanks are due to Shiri Granot for her help in creating this final version.
References
1 For a detailed survey, see Part I. The literature on economic analysis of copyright law is too vast to be fully surveyed in this Article. Among many important sources, a comprehensive and critical discussion of the economic approach to copyright law, can be found in Lunney, Gillian L., Reexamining Copyright Incentives—Access Paradigm, 49 Vand. L. Rev. 483 (1996)Google Scholar; Sterk, Stewart E., Rhetoric and Reality in Copyright Law, 94 Mich. L. Rev. 1197 (1996)CrossRefGoogle Scholar; Netanel, Neil W., Copyright and a Democratic Civil Society, 106 Yale L.J. 283 (1996)CrossRefGoogle Scholar; Landes, William M. & Posner, Richard A., An Economic Analysis of Copyright Law, 18 J. Legal Stud. 325 (1989)CrossRefGoogle Scholar.
2 See specifically the Supreme Court's decision in CA 513/89 Interlego A/S v. Exin-Lines Bros. SA [1994] IsrSC 48(4) 133.
3 See, e.g., Gordon, Wendy J., A Property Right in Self-Expression: Equality and Individualism in the Natural Law of Intellectual Property, 102 Yale L.J. 1533 (1993)CrossRefGoogle Scholar (analyzing John Lock's labor theory both as a source for justifying authors' proprietary rights and as a source for justifying the public's rights to access and use copyrighted works); Becker, Lawrence C., Deserving to Own Intellectual Property, 68 Chi.-Kent. L. Rev 609 (1993)Google Scholar (emphasizing the role of copyright in providing a just and fair compensation for the efforts, resources and creativity invested by authors and creators in the process of producing socially valued creative works).
4 See Gordon, Wendy J., On Owing Information: Intellectual Property and the Restitutionary Impulse, 78 Va. L. Rev. 149 (1992)CrossRefGoogle Scholar; Gordon, Wendy J., Of Harms and Benefits: Torts, Restitution and Intellectual Property, 21 J. Legal Stud. 449 (1992)CrossRefGoogle Scholar.
5 For a detailed survey and analysis, see Netanel, Neil W., Copyright Alienability Restrictions and the Enhancement of Author Autonomy: A Normative Evaluation, Rutgers L.J 347 (1993)Google Scholar.
6 See, e.g., Fisher, William, Theories of Intellectual Property, in New Essays in the Legal and Political Theory of Property 168, 172–173 (Munzer, Stephen R. ed., 2001)Google Scholar, as well as the writings of researchers, including Yochai Benkler, Neil Netanel and Niva Elkin-Koren that Fisher cites and refers to therein.
7 See Netanel, Neil W., Locating Copyright within The First Amendment Skein, 54 Stan. L. Rev. 1 (2001)CrossRefGoogle Scholar; Netanel, supra note 1; Benkler, Yochai, Free as Air to Common Use: First Amendment Constraints on Enclosure of the Public Domain, 74 N.Y.U.L. Rev. 354 (1999)Google Scholar; Elkin-Koren, Niva, Cyberlaw and Social Change: A Democratic Approach to Copyright Law in Cyberspace, 14 Cardozo Arts & Ent. L.J. 215 (1996)Google Scholar.
8 Indeed, even within an economic analysis of copyright law, the “costs” and “benefits,” which are measured and taken into account, could include values and rights that are not purely quantitative. However, let alone the practical and empirical difficulties of such attempts, according to some rights theories, the mere idea of measuring the “quantity” of constitutional rights and values, contradicts its main essence as values which embody a preferential legal status. See also Dworkin, Ronald, Rights as Trumps, in Theories of Rights 153 (Waldron, Jeremy ed., 1984)Google Scholar.
9 In this context, two caveats are required. Firstly, this Article will not fully cover the various positive legal aspects both in Israeli law and in other comparative legal systems regarding the topics discussed. Secondly, nor will it provide a full and comprehensive analysis of the various economic principles mentioned and examined within the Article.
10 The initial work in this context was by Plant ( Plant, Arnold, The Economic Aspects of Copyright in Books, 1 Economica 1 (1934))CrossRefGoogle Scholar, and also by Hurt & Schuchman ( Hurt, Robert M. & Schuchman, N., The Economic Rationale of Copyright, Am. Eco. Rev. 56 (1966))Google Scholar. In a later period, Landes's and Posner's article ( Landes, William M. & Posner, Richard A., An Economic Analysis of Copyright Law, 8 J. Legal Stud. 325 (1989))CrossRefGoogle Scholar is regarded as the first comprehensive economic analysis of copyright law.
11 See also Gordon, Wendy J., Asymmetric Market Failure and Prisoner's Dilemma in Intellectual Property, 17 U. Dayton L. Rev. 853 (1994)Google Scholar (analyzing the nature of copyrighted works as public goods from a prisoner's dilemma perspective in which players simultaneously choose between creating a work of their own and copying a work of another. As Gordon shows, for a plausible payoff structure, copying strictly dominates creation and the result is the Pareto-dominated equilibrium associated with prisoner's dilemma games—in this case, both players choose to copy and nothing is created).
12 In addition, can a reward system of liability rules, which only compensates creators ex-post, be more efficient than a system of exclusive ex-ante property rights. See Shavell, Steven & Van Ypersele, Tanguy, Rewards versus Intellectual Property Rights, 44 J.L. & Econ. 525 (2001)CrossRefGoogle Scholar (claiming that an intellectual property rights system does not enjoy any fundamental advantage over a reward systems, that does not suffer from the monopoly pricing power that an intellectual property systems might suffer from. Yet the authors are not denying the principle difficulty in the ability of governments to obtain the information for calculating rewards).
13 Recent variations, developments and challenges to the traditional incentive focus on product differentiation and rent dissipation theories. According to Yoo's model, copyright law should focus on a dynamic process of facilitating entry between competitive creative products by both preventing the production of homogenous creative works, and concurrently; permit the entry of differentiated products that can mitigate the deadweight lose that is derived from previous similar works (see Yoo, Christopher S., Copyright and Product Differentiation, 79 N.Y.U.L. Rev 212 (2004))Google Scholar. Michael Abramowicz also presented a similar approach. According to Abramowitz, copyright protection serves as a mechanism to prevent entry of additional creative products that have considerable effects of rent-dissipation with the welfare loses that are derived from such an entry (see Abramowicz, Michael, An Industrial Organization Approach to Copyright Law, 46 Wm. & Mary L. Rev. 33 (2004))Google Scholar.
14 Contractual arrangements are, however, weak instruments, because contractual obligations have no binding force toward third parties and could be very costly to enforce.
15 In recent years, some self-help technological measures have received partial legal protection within statutory instruments that outlaw the circumvention of such measures (see, e.g., The Digital Millennium Copyright Act (17 U.S.C. §§ 1201)). Such circumvention prohibitions are conditioned upon a statutory prerequisite, a condition for which the relevant technological protection measure are applied to copyright materials. Hence, it would be inaccurate to describe such self-help technologies measures as a legal regime that is independent from copyright law. In addition, from an economic perspective, effective self-help technological fencing measures tend to impose a social cost not to be ignored. These measures can prevent access and uses in circumstances that are permitted freely under copyright law's traditional scheme. Defacto, such measures tend to exceed the scope of proprietary protection way beyond what is required to provide sufficient incentive to creators and producers. The advantage of statutory copyright, over such measures, refers, therefore, to copyright's ability in setting legal limits to the excluding power of copyright owners and thus internalizing the social costs of exclusivity with regard to creative works.
16 The landmark work in this context is by Stephen Breyer ( Breyer, Stephen, The Uneasy Case for Copyright: A Study of Copyright in Books, Photocopies, and Computer Programs, 84 Harv. L. Rev. 281 (1970))CrossRefGoogle Scholar. Recently, Yochai Benkler has shown how in digital realms and by using commons-based peer production mechanisms, the role of direct financial incentives—and therefore, of copyright protection—is significantly decreasing, at least with regard to some categories of media products and creative works. See Benkler, Yochai, Coase's Penguin, or, Linux and the Nature of the Firm, 112 Yale L.J. 369 (2002)CrossRefGoogle Scholar.
17 Even Breyer, id. has clarified that he did not claim that copyright should be totally abolished but rather that it should be narrowly constructed. See Tyerman, Barry W., The Economic Rationale for Copyright Protection for Published Books: A Reply to Professor Breyer, 18 UCLA L. Rev. 1100 (1971)Google Scholar; Breyer, Stephen, Copyright: A Rejoinder, 20 UCLA L. Rev. 75 (1972)Google Scholar.
18 See Demsetz, Harold, Toward a Theory of Property Rights, 57 Am. Econ. Rev., Proceedings and Papers 347 (1967)Google Scholar; Barzel, Yoram, Economic Analysis of Property Rights (1989)Google Scholar.
19 Brett M. Frischmann has recently criticized the application of the Demsetzian argument regarding the internalization of externalities in the context of copyright law. Frischmann claims that intellectual intangible resources present a unique category because of the positive spillovers that such resources tend to generate and therefore, the fact that in many cases, social demand for individuals' access and use of copyright protected work often exceeds private demand though market mechanisms. Externalities therefore do not always distort incentives and thus might not require a proprietary regime for their utilization, especially given the social cost that such a regime might involve (see Frischmann, Brett M., Evaluating the Demsetzian Trend in Copyright Law, Rev. L. & Econ. (forthcoming 2006)Google Scholar.
20 For a survey and a critical analysis of the central literature, see Netanel, supra note 1, at 308-324. The market facilitation argument was articulated by Paul Goldstein, who identified a property-oriented market mechanism as the best way to ensure cultural diversity by efficiently allocating resources according to people signals (see Goldstein, Paul, Copyright's Highway: From Gutenberg to the Celestial Jukebox (1994) 232–236 Google Scholar. The market-facilitation argument has been criticized for ignoring the fact that broad copyright protection tend to fail in providing an outcome of diversified outputs (see Benkler, Yochai, Free as the Air to Common Use: First Amendment Constraints on Enclosure of the Public Domain, 74 N.Y.U. L. Rev. 354, 397-398, 400, 412 (1999))Google Scholar. Another critique focused on the costs and harms of copyright monopoly that the market-facilitation argument ignores (See also Netanel, supra note 1, at 332). However, this critique departs from a pure utilitarian approach and adopts a democratic stand point of view regarding both copyright's goals and costs.
21 Well-known is Chafee's remark that: “The World goes ahead because each of us builds on the world of our predecessors. ‘A dwarf standing on the shoulders of a giant can see farther than the giant himself,’” Chafee, Zechariah, Reflections on the Law of Copyright, 45 Colum. L. Rev. 503, 511 (1945)Google Scholar.
22 Landes, William M. & Posner, Richard A., An Economic Analysis of Copyright Law, 18 J. Legal Stud. 325, 332–341 (1989)CrossRefGoogle Scholar.
23 Nevertheless, from an ex-ante perspective, given the non-rival character of intangible goods, such a pricing system is conceived as a “necessary evil” in order to avoid the above-mentioned market failure. Price discrimination is one mechanism that can reduce and mitigate such a loss (see generally Meurer, Michael J., Copyright Law and Price Discrimination, 23 Cardozo L. Rev. 55 (2001))Google Scholar.
24 Another inefficiency that is associated with copyright, refers to the fact that the monopoly profits from broad copyright protection induces rent-seeking, which encourages too many people to invest duplicative efforts and resources in the production of copyrighted works. This in turn, leads to a socially inefficient allocation of resources (see Lunney, Gillian L., Reexamining Copyright Incentives-Access Paradigm, 49 Vand. L. Rev. 483 (1996))Google Scholar.
25 See, e.g., Landes, William M. & Posner, Richard A., The Economic Structure of Intellectual Property Law 91–108 (2003)Google Scholar. There are several considerations which support this basic principle of copyright law, including: (1) an attempt to avoid the generation of excessive monopolization costs regarding specific facts that have no substitute; (2) the cost of creating works that rely on existing “copyrighted” facts and the resulting anticipated reduction in the number and diversity of such works; (3) transaction and administrative costs for obtaining permission and enforcing rights in facts; (4) the fear of excessive rent seeking in producing worthless factual works just in order to gain exclusivity over the use of such facts; (5) the reasonable presumption that many people are likely to produce similar factual representations even without the copyrighting of facts; (6) and lastly, the assumption that limited copyright protection only with regard to fixated expressions would suffice in order to provide sufficient incentive for the production of creative works, thus, without bearing the significant costs of copyrighting isolated facts.
26 For a detailed comparative survey and critical analysis of this issue see Pessach, Guy, The Legacy of Feist Revisited—A Critical Analysis of the Creativity Requirement, 36 Isr. L. Rev. 19–102 (2002)CrossRefGoogle Scholar.
27 See Interlego A/S v. Exin-Lines Bros. SA, supra note 2.
28 Such an approach was adopted in CA 448/60 Lev v. Hamashbir Hamerkazi [1962] IsrSC 16(4) 2688, 2696-2697; CA 23/81 Hershko v. Aurbach [1988] IsrSC 42(3) 749,757,759; CA 360/83 Strusky Ltd. v. Glidat Vitman Ltd. [1985] IsrSC 40(3) 340; CA 136/71 State of Israel v. Akhiman [1972] IsrSC 26(2) 259,261; PLA 2687/92 Geva v. Walt Disney Co. [ 1993] IsrSC 48(1)251, 258.
29 See, e.g., Geva v. Walt Disney Co., id., which also classified copyright as part of the constitutional right to private property according to Article 3 According to Article 3 of Basic Law: Human Dignity and Liberty, 5752-1992, S.H. 1391. The Israeli Basic Law: Human Dignity and Liberty. As opposed to a “property right-based” approach, the Interlego decision followed the utilitarian paths of American Copyright Law that interpret copyright legislation according to Article 1 of the American Constitution—an Article that establishes copyright legislation only on public welfare grounds while rejecting the concept of authors' natural rights (See H. Report No. 2222, 60th Cong., 2d Sess). See also the decision in Feist Pubs. Inc v. Rural Tele. Serv. Co., 499 U.S. 340, 349-350 (1991).
30 See Interlego A/S v. Exin-Lines Bros. SA, supra note 2, at 160-167.
31 Feist Pubs. Inc v. Rural Tele. Serv. Co supra note 29. Hence, our critique on the Interlego decision is parallel, as well as derived from, the critique on the Feist decision.
32 See Interlego A/S v. Exin-Lines Bros. SA, supra note 2, at 154, 164-167, 170, 173.
33 Indeed, the Feist Pubs. Inc v. Rural Tele. Serv Co., decision, supra note 29, is considered a decision that changed American law's scope of copyright protection regarding factual compilations; especially when it comes to electronic databases in which the raw materials are located within a digital media, and are not organized in any manner at all. In most cases, a separate component of retrieving software is responsible for the searching facilities. Vague as the distinction between raw facts and their specific manner of expression is, one should bear in mind the fact that copyright protection for a specific form of expression, which accumulates and organizes factual materials, does not mean protection also for the raw facts. In European countries, factual compilations that are not protected through copyright law are protected by The Directive on the Legal Protection of Databases, which aims to protect the taking of a substantial part of the row materials. (See the European Community Council Directive On the Legal Protection of Databases (no 96/ 9/EC of March 1996.)) For an analysis of the difficulties that the protection of factual works and databases imposes on American copyright law after the Feist decision, see Green, Michael, Copyrighting Facts, 78 Ind. L.J., 919 (2003)Google Scholar; Lipton, Jacqueline, Balancing Private Rights and Public Policies: Reconceptualizing Property in Databases, 18 Berkeley Tech. L.J. 773 (2003)Google Scholar.
34 It is worth mentioning that the common approach, applied by American copyright law, had been a liberal and flexible approach. Practically, all visual and audio-visual works, which were not a mere slavish reproduction of a prior work, were regarded and treated as original works. (See Nimmer, M.B., Nimmer, D., Nimmer On Copyrioht, Volume 1, § 2.08[E][1] (2001)Google Scholar. There are also court decisions, which hint that such an approach would continue to be applied after the creativity requirement as implemented in the Feist Pubs. Inc v. Rural Tele. Serv, Co., supra note 29 (see, e.g., Los Angeles News Services v. Tullo 973 F.2d 791, 793-795 ( 9th Cir, 1992)).
35 See Ginsburg, Jane C., No ‘Sweat’? Copyright and Other Protection of Works of Information after Feist V. Rural Telephone, 92 Colum. L. Rev. 338, 344–353 (1992)CrossRefGoogle Scholar; Ginsburg, Jane C., Creation and Commercial Value: Copyright Protection of Works of Information, 90 Colum. L. Rev. 1865, 1869, 1899, 1907–1908, 1919–1922 (1990)Google Scholar; Dreyfuss, Rochelle C., A Wiseguy's Approach to Information Products: Muscling Copyright and Patent into A Unitary Theory of Intellectual Property, Sup. Ct. Rev. 195, 208-211, 216–218 (1992)Google Scholar; VerSteeg, Russ, Rethinking Originality, 34 Wm. & Mary L. Rev. 801 (1993)Google Scholar; Heald, Paul J., The Vices of Originality, Sup. Ct. Rev. 144, 158 (1991)Google Scholar; Yen, Alfred C., The Legacy of Feist: Consequences of the Weak Connection Between Copyright and the Economics of Public Goods, 52 Ohio St. L.J. 1343, 1374, 1378 (1991)Google Scholar.
36 See also Gordon, Wendy J., Asymmetric Market Failure and Prisoner's Dilemma in Intellectual Property, 17 U. Dayton L. Rev. 853 (1992)Google Scholar.
37 See supra note 25 and the accompanying text.
38 See Landes & Posner, supra note 25, at 104 and at 97-102 (for an economic analysis of the merger doctrine). The guiding precedent in the United States is Baker v. Selden, 101 U.S. 99 (1879). In Israel, the merger doctrine was mentioned by the Supreme Court in Geva v. Walt Disney Co., supra note 28, although the court did not find it applicable in the context of that case.
39 See Interlego A/S v. Exin-Lines Bros. SA, supra note 2, at 170, 173.
40 For a similar argument, see Landes & Posner, supra note 25, at 262.
41 See also Landes & Posner, id. at 262-263: Landes and Posner give as an example the case of Alfred Bell & Co. v. Catalda Fine Arts, 191 F.2d 99 (2d Cir. 1951). In that case, the defendant reproduced and sold copies of the plaintiff's mezzotint engravings of 18th and 19th century paintings in the public domain. The plaintiff's engravings were realistic reproductions requiring great skill and judgment. The defendant had argued that since the engravings were merely copies of works in the public domain, they failed the originality requirement. In short, the defendant claimed that he was doing nothing more than he was entitled to do—copying a public domain image, albeit by copying from a copy. The defendant lost the case. Landes and Posner support the result while stating that in that case, the originality component had laid in the art of copying, which required significant expenditures of time, effort, and skill. Hence, free riding by the defendant would undermine the plaintiff's incentives to produce high-quality copies of public domain works; especially when copyright protection does not prevent the defendant from hiring engravers and making copies of the same paintings or from licensing the right to make copies from the plaintiff. Copyright merely protects the plaintiff's investment in copying from the public domain without cutting off the defendant's access to the original paintings.
42 See CA 2173/94 Tele-Event Ltd. v. Arutzey Zahav [2001] IsrSC 55(5) 529, 546. See also OM (District Court, Tel-Aviv) 601/96 Mugrabi v. Broadcasting Authority [1996] (unpublished); CC (Magistrate, Rishon Letzion) 5327/01 Gad Hafakot Ltd., v. Ha'aretz Ltd. [September 11, 2002] (unpublished) (admitting copyright protection of a compilation of academic institutions, classified alphabetically according to the subjects taught by them, with telephone numbers of each department within the institutions).
43 CA 2811/93 Shanks v. Qimron [1997] IsrSC 54(3) 817, English translation in (2001) European Copyright and Design Reports 73. Unofficial English translation is available at http://lawatch.haifa.ac.il/heb/month/dead_sea.htm (last visited October 31, 2006) [hereinafter the Dead Sea Scrolls case].
44 See id, at 829-830.
45 See also Birnhack, Michael D., The Dead Sea Scrolls Case: Who is an Author, E.I.P.R, 128, 132 (2001)Google Scholar.
46 See the Dead Sea Scrolls case, supra note 43, at 830.
47 See id. at 830-834.
48 See also Part II. A infra.
49 See the Dead Sea Scrolls case, supra note 43, at 834-835.
50 See Nimmer, David, Copyright in the Dead Sea Scrolls: Authorship and Originality, 138 Hous. L. Rev. 1 (2001)Google Scholar; but for a different view see also Oakes, James L., Commentary of the Dead Sea Scrolls: A Live Copyright Controversy, 138 Hous. L. Rev. 219 (2001)Google Scholar (supporting the Supreme Court's opinion that the reconstruction of the fragments should be regarded as an original work).
51 See Elkin-Koren, Niva, Of Scientific Claims and Proprietary Rights: Lessons from the Dead Sea Scrolls Case, 38 Hous. L. Rev. 441 (2001)Google Scholar.
52 See the Dead Sea Scrolls case, supra note 43, at 834.
53 See Landes & Posner, supra note 25, at 356, and see also Oakes, supra note 50, at 225-226 (presenting an argument that with regard to copyright protection, the reconstruction of the scrolls originality is no different than the argument associated with the translation of an ancient manuscript).
54 By stating the above-mentioned, I do not ignore the fact that at least implicitly considerations such as academic prestige and professional status tend to be translated into economic value for their subjects. Yet, this is an economic value, which does not rely on copyright law for its accomplishment.
55 For a similar argument in the context of the Numerus Clausus principle, see Merrill, Thomas W. & Smith, Henry E., Optimal Standardization in the Law of Property: The Numerus Clausus Principle, 110 Yale L.J. 1 (2000)CrossRefGoogle Scholar.
56 For a similar discussion, see Trosow, Samuel E., Copyright Protection for Federally Funded Research: Necessary Incentive or Double Subsidy?, 22 Cardozo Arts & Ent. L.J. 613 (2004)Google Scholar. It is worth adding, however, that there still might be circumstances in which academic research would rely on the economic rewards that an intellectual property regime grants, for example, basic scientific research that requires considerable financial resources. Yet, in this context also, it is questionable whether the right economic structure should be public funding or the grant of proprietary rights.
57 See supra note 35 and the accompanying text.
58 See Part II supra.
59 In general, patent law usually protects functional elements and are subordinated to the conditions of being a novel and useful invention that involve an inventive step (see Section 3 of the Patent and Designs Ordinance of 1924). While copyright law advances the production of creative-expressive works that are socially valued, patent law concentrates on inducing the advancement of innovation.
60 See Interlego A/S v. Exin-Lines Bros. SA, supra note 2, at 155-160, 173-183.
61 See id. at 179-182.
62 See id. at 177.
63 See Section 101 of the Federal Copyright Act (17 U.S.C. § 101) that states: “…the design of a useful article, shall be considered [as subject to copyright protection], only if such can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the article.” In this context, there are conflicting views between the various circuits and within them. For an analysis of the various court decisions regarding this article and the different and conflicting opinions that were expressed by courts, see Nimmer, M.B., Nimmer, D., Nimmer On Copyright-Volume 1, § 2.08[B][3] (2004)Google Scholar.
64 Although not stated so by the court, the rule according to copyright protection should be avoided whenever the expressive form embodies a basic building block that is essential for the provision of a functional product, is a test that has much in common with the general merger doctrine. In both cases, there is an implicit notion that copyright should step aside whenever it has an unavoidable spillover effect of expending the scope of exclusivity beyond the expressive form itself and includes components that in a cost-benefit analysis should remain unprotected.
65 For a similar proposal, see Polakovic, Raymond M., Should the Bauhaus be in the Copyright Doghouse? Rethinking Conceptual Separability, 64 U. Colo. L. Rev. 871, 893–894 (1993)Google Scholar.
66 Some statutes and legal systems, including Israel, use the term “fair dealing,” instead of “fair use.” The common term in the theoretical literature is, however, “fair use.” Therefore, we shall use this term also when referring to the Israeli legal system.
67 See Fisher, William F., Reconstructing the Fair Use Doctrine, 101 Harv. L. Rev, 1532 (1988)Google Scholar. Indeed, as Gideon Parchomovsky has critically observed, the central weakness of Fisher's test is its broadness and therefore its limited ability to provide useful practical guiding lines for implementing the fair use exemption. See Parchomovsky, Gideon, Fair Use, Efficiency, and Corrective Justice, 3 Legal Theory 347 (1997)CrossRefGoogle Scholar.
68 See Gordon, Wendy J., Fair Use as Market Failure: A Structural and Economic Analysis of the Betamax Case and Its Predecessor, 82 Colum. L. Rev 1600 (1982)CrossRefGoogle Scholar. Since the publication of the original article, in some of the issues, Professor Gordon has altered her views regarding the fair use exemption. See Gordon, Wendy J., Excuse and Justification in the Law of Fair Use: Commodification and Market Perspectives, in The Commodification of Information: Social, Political, and Cultural Ramifications 149, 183–184 (Netanel, Neil & Elkin-Koren, Niva eds., 2002)Google Scholar.
69 See, e.g., Landes & Posner, supra note 25, at 357-359. The limits of justifying a fair use exemption based on circumstances of high transaction costs has become highly acute in digital environments where technology and various kinds of digital rights managements systems can overcome various types of transactions costs such as search costs and negotiations that characterize the “physical world.” For further discussion regarding this context see Part III(C) and its discussion on the role collecting societies have in overcoming market failures of high transaction costs.
70 See Lunney, Glynn S., Fair Use and Market Failure: Sony Revisited, 82 B.U. L. Rev. 975 (2002)Google Scholar.
71 In practice, many cases of anti-dissemination motives of copyright owners are also characterized by significant positive externalities that are not internalized either by copyright owners or by users of the copyrighted work and their potential audience. Parodies and Satires, discussed infra are one example for such circumstances.
72 See Depoorter, Ben & Parisi, Francesco, Fair Use and Copyright Protection: A Price Theory Explanation, 21 Int'l Rev. L. & Econ. 453 (2002)CrossRefGoogle Scholar.
73 This structure of an exemption that is limited to a close list of purposes differs from the American fair use exemption, which is an open ample “standard-typed” exemption (See section 107 of the American federal Copyright Act (17 U.S.C. § 101).
74 Geva v. Walt Disney Co., supra note 28.
75 See Landes & Posner, supra note 25, at 149-159; Yen, Alfred C., When Authors Won't Sell: Parody, Fair Use, and Efficiency in Copyright Law, 62 U. Colo. L. Rev. 79 (1991)Google Scholar; Posner, Richard C., When Parody is Fair Use?, 21 J. Legal Stud. 67 (1992)CrossRefGoogle Scholar; Winslow, Anastasia P., Rapping on a Revolving Dorr: An Economic Analysis of Parody and Campbell v. Acuff-Rose Music, Inc, 69 S. Cal. L. Rev. 767 (1996)Google Scholar; Merges, Robert P., Are You Making Fun of Me?: Notes on Market Failure and the Parody Defense in Copyright Law, 21 AIPLA Q.J. 305 (1993)Google Scholar; Gordon, supra note 68, at 1632-1635.
76 A presumption that still requires some empirical support.
77 For a discussion regarding the distinction between parodies and satires, see the following section.
78 The Endowment Effect refers to the fact that people value an entitlement they already possess more, and usually much more, than a similar entitlement they have an opportunity to acquire. Specifically, individuals demand a significantly higher price to give up an already-owned entitlement than they would be willing to pay in order to purchase the same entitlement. Therefore, contrary to the prediction of the Coase theorem, the initial allocation of legal entitlements may very well affect the outcome of bargaining, even when transaction costs are low and wealth effects are insignificant. See generally, Kahneman, Daniel et al. , Experimental Tests of the Endowment Effect and the Coase Theorem, 98 J. Pol. Econ. 1325, 1339–1341 (1990)CrossRefGoogle Scholar; Kelman, Mark, Consumption Theory, Production Theory, and Ideology in the Coase Theorem, 52 S. Cal. L. Rev. 669, 678–695 (1979)Google Scholar; Zamir, Eyal, The Inverted Hierarchy of Contract Interpretation and Supplementation, 97 Colum. L. Rev. 1710, 1760–1762 (1997)CrossRefGoogle Scholar.
79 Another case in which the Israeli Supreme Court has had a chance to interpret and apply the fair use exemption is CA 8393/96 Mifal Hapayis v. The Roy Export Company Establishment Bubbles Inc. S.A. [2000] IsrSC 54(1) 577. In this case, the court's discussion of the fair use exemption was very partial (see specifically page 598 of the decision), even though the decision does include one principle determination that might be challenged. The court stated that for two reasons, the use of copyrighted materials within commercial advertisements cannot be classified as fair use: First, because it does not constitute an element of criticism and second, because a profit-motivated advertisement should not be considered as fulfilling the requirement of “fairness.” From an economic standpoint of view, these determinations are doubtful; mostly, because advertisements could potentially generate the usual market failures that fair use intends to overcome. Likewise, advertisements could potentially produce the same positive externalities that tend to support the recognition of a fair use exemption. Thus, for example, there is no basic prevention that an advertisement—like other types of commercial speech—would deliver both a commercial message and socially valued critical elements. In this regard, the court's sweeping determination that advertisements cannot shelter under the fair use exemption does not follow the general economic parameters that should guide the application of the fair use exemption. Nevertheless, as already mentioned, the court's reference to the fair use defense was very partial and therefore it might be too harsh to generalize conclusions from the court's few statements in this context.
80 See id., at 275 and 285. For the distinction between parodie and satiric use, see also the text of the following paragraphs.
81 The Supreme Court's decision in Geva v. Walt Disney Co., supra note 28, includes several additional principle determinations regarding the fair use exemption that were not applied on the facts of the pending case. Our analysis concentrates only on three components that had derived the outcome of the case and that are central in order to examine the efficiency of the court's approach toward parodies and satires.
82 See Geva v. Walt Disney Co., id. at 279 & 282 of the Supreme Court's decision.
83 See id. at 284.
84 See Posner, supra note 75.
85 Campbell v. Acuff-Rose Music, Inc. 114 S. Ct. 1164, 1177-1178 (1994). In that case, the majority opinion did not totally preclude the possibility that a satire would also shelter under the fair use exemption. However, it noted that in such cases it would be much harder to classify the use as falling under the purpose of “criticism” while in addition, the defendant would have the burden of proving that the four parameters of the fair use exemption support such a use.
86 See Posner, supra note 75, at 72-71.
87 See also Winslow, supra note 75, at 803-806.
88 See Merges, supra note 75, at 311.
89 Additionally one might challenge the court's implicit assumption that parodies and satires usually do not undermine the potential market for the copyrighted work. At least in some circumstances, a secondary parodie or satiric work would provide at least a partial substitute to the originating copyrighted work. This last point that was ignored by the court in the Geva v. Walt Disney case had been central to the American Supreme Court ruling in the Campbell decision (supra note 85).
90 AH 326/00 Holon Municipality v. N.M.C Music LTD. [2000] IsrSC 57(3) 658 [hereinafter the Holon Municipality case].
91 Since both the actions of “rental” and “lending” are subordinated to the limitation of “for commercial purposes,” the question arises: what is the distinction between the meaning of “renting,” on the one hand, and “lending,” on the other hand, as these terms appear in Section 3F. This issue was not discussed in the Supreme Court's decision, and therefore we shall not discuss it in this Article as well.
92 In this unique context, the exclusive right of copyright owners refers to tangible lawfully made copies of the protected work rather than to the intangible abstracted form of the copyrighted work. This is an exception to the general rule according to which once a lawful copy of a copyrighted work is produced and distributed, copyright owners no longer have any control over it.
93 The music CDs were lent by the library for a subsidized subscription rate. A four months subscription cost the same as purchasing one CD. The library's subscribers were also obliged to deposit collateral that was returned at the end of the subscription period as well as to sign a commitment not to copy the music CDs that they had borrowed.
94 Judge Kling had further mentioned one additional related argument that supported his broad interpretation of the term “commercial” and therefore a narrow construction of the exemption for “non-commercial” lending. This argument had referred to the fact that at least to some extent, public libraries' lending activity tends to decrease the demand for purchased copies of recordings and consequently deprive copyright owners from potential revues. In Judge Kling's reasoning, this fact supports the conclusion that if interpreted too broadly, the “non-commercial lending” exemption in itself could amount in an abridgment of copyright owners' constitutional right to private property according to Section 3 of the Human Dignity and Liberty Basic Law. As we shall see in the following paragraphs, this argument was also referred to and discussed by the Supreme Court.
95 In these countries, copyright owners' rental and lending rights are based on the European Council Directive 92/100/EEC (of November 19, 1992) on Rental Right and Lending Right and on Certain Rights Related to copyright in the Field of Intellectual Property. The Directive and national legislation that follow it acknowledge rental and lending rights with regard to phonograms, audiovisual works and software. Such protection is not granted to literary works.
96 But see also the text accompanying note 106 infra.
97 See the Holon Municipality case, supra note 90, at 671. The issue of compulsory licensing schemes in the context of private copying was mentioned only briefly by the court without being fully elaborated. For an analysis of the subject see Calandrillo, S. P., An Economic Analysis of Intellectual Property Rights: Justifications and Problems of Exclusive Rights, Incentives to Generate Information, and the Alternative of a Governmental-Run Reward System, 9 Fordham Intell. Prop. Media & Ent. L.J. 301 (1998)Google Scholar. See also Netanel, Neil W., Impose A Noncommercial Use Levy to Allow Free Peer-to-Peer File-Sharing, 17 Harv. J.L. & Tech. 1 (2003)Google Scholar.
98 The seminal article in this context is Michelman, Frank I, Property, Utility, and Fairness: Comments on the Ethical Foundations of Just Compensation Law, 80 Harv. L.R. 1165 (1967)CrossRefGoogle Scholar, and many other articles that have followed it For a critical analysis of Michelman's approach, see Lewinsohn-Zamir, Daphna, Compensation for Injuries to Land Caused by Planning Authorities: Towards a Comprehensive Theory, 46 U. Toronto L.J. 47 (1996)CrossRefGoogle Scholar.
99 For a similar economic argumentation see the decision of the United States Court of Appeals in the A & M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (9th Cir. 2001).
100 Basically there are two alternatives to describe the structure of Article 3F and the “for commercial purposes” limitation. One alternative, which was taken by the Supreme Court, is imposing the requirement of “commercial purposes” as a precondition for acknowledging copyright owners' rental and lending right. The second alternative, which was taken by the district court, is to describe Article 3F's limitation as a requirement that acknowledges an exemption for “non-commercial” activities of lending and renting recordings. Although these two alternatives are seemingly two sides of the same coin, the choice between them is in itself a decision that tends to influence the interpretation and scope of Article 3F. While the first alternative begins with a presumption that it is the copyright owner who has to support his argument for a broad interpretation of the term “commercial purposes,” the second alternative shifts the burden to users who wish to shelter under the “non-commercial” rental exemption.
101 According to Article 3 of Basic Law: Human Dignity and Liberty.
102 Recall that the district court had analyzed the “for commercial purposes” limitation under the prism of what seemed to be a “taking” of an existing property right—a compelled transfer of a property entitlement from copyright owners to the public in general. On the contrary, the Supreme Court's approach perceived Article 3F as determining the initial allocation of an entitlement, and more specifically, determining “how much” copyright protection owners of recordings should have when it comes to rental and lending of their materials.
103 See, e.g., the American Federal Copyright Act (17 U.S.C. 109(a) (1995)) which states: “Notwithstanding the provisions of section 106(3), the owner of a particular copy or phonorecord lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord.” For a survey of the first sale doctrine, see Reese, Anthony R., The First Sale Doctrine on the Era of Digital Networks, 44 B.C. L. Rev. 577 (2003)Google Scholar.
104 In some manners, the First Sale Doctrine has parallels with the general Numerus Clausus Principle in Property Law according to which property rights are usually limited to specified, standardized types prescribed by the law. Individuals are not free to create new types of property rights. For further discussion regarding this context, see Merrill, Thomas W. & Smith, Henry E., Optimal Standardization in the Law of Property: The Numerus Clausus Principle, 110 Yale L.J. 1 (2000)CrossRefGoogle Scholar.
105 See Lemely, Mark A., Property, Intellectual Property, and Free Riding, 82 Tex. L. Rev. 1031 (2005)Google Scholar.
106 See also Gordon, Wendy J., Intellectual Property as Price Discrimination: Implications for Copyright, 73 Chi.-Kent. L. Rev. 1367, 1372-1375, 1388–1389 (1998)Google Scholar. It should be noted, however, that when it comes to transactions in digital copies of copyrighted works, copyright owners have better and broader possibilities to implement price discrimination techniques in initial markets by offering different prices to different categories of buyers. These methods are difficult to implement in a physical environment where hard copies of copyrighted works are being sold to individual customers based on a relatively fixed price.
107 FH 6407/01 Tele-Event Ltd. v. Arutzey Zahav [2004] IsrSC 58(6) 6 [hereinafter the Tele-Event Case].
108 See Section 1 (2) of the Israeli Copyright Act, 1911.
109 My presumption in the following analysis is that the cable companies were authorized by the originating foreign channels to retransmit their broadcasts. This was also the court's implicit assumption both by the majority and minority opinions. In a somewhat contradicting manner, the minority opinion also ruled that a simultaneous re-broadcast should not be classified as “public performance” either with regard to the rights of the various copyright owners, whose material was included within the broadcasts, or with regard to the rights of the originating television channel.
110 Since 1996, the Performers' and Broadcasters' Rights Law of 1984 includes a chapter that acknowledges a “neighboring right” of broadcasters with regard to authorized radio and television broadcasts. This right is additional and independent to the copyrights in the works that are incorporated within broadcasts, and it is based on the International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations (Rome Convention, October 26, 1961). The facts of the Tele-Event case took place before the amendment of 1996, which recognized, for the first time, broadcasters' rights as part of Israel's intellectual property law regime. In any case, the issue that was at stake in the Tele-Event case was rather the issue of copyright infringement with regard to the specific televised broadcast of the tournament as it was produced by the plaintiffs and then its broadcast and public performance rights were sold to various television channels.
111 See Section 1(2) of the Israeli Copyright Act, 1911.
112 Justice Cheshin's opinion was supported both by Justice Or and by Justice Beinisch who also wrote a concurring opinion the Justice Cheshin's opinion.
113 In most cases, television broadcasts incorporate copyrighted materials from various sources and owners who license the broadcasting of these materials. In this sense, practically, there are hardly situations in which all or even most of the materials, are either produced “in-house” or owned by the television channel.
114 See Sections 42-43 of Justice Cheshin's opinion.
115 See Sections 57-59 of Justice Cheshin's opinion. As mentioned by Justice Cheshin, recently, the Israeli Ministry of Justice has proposed such a scheme as part of a memorandum for a new Israeli Copyright Act that would replace current legislation. Section 18 of the Memorandum (dated 16 November 2003) proposes a liability rule of “just and fair royalties” with regard to simultaneous secondary transmissions of broadcasts.
116 See Section 47 of Justice Cheshin's opinion. Nevertheless, one could question the validity of such an overstated conclusion; especially, when taking into account the general judicial discretion that courts have in choosing between a remedy of injunction and a remedy of only a monetary reward (see also Article 75 of the Israeli Courts Act [integrated version], 1984). See also Campbell v. Acuff-Rose Music Inc., (127 L. Ed 500, note 10 (1994)) in which the U.S. Supreme Court has explicitly stated that in appropriate cases a copyright owner's interest may be adequately protected by an award of damages instead of an injunction.
117 See Sections 46 and 60 of Justice Cheshin's opinion. This argumentation seems to rely on the assumption that the secondary retransmission itself would still require authorization from the originating broadcaster (see Sections 46, 48, 52 and 59 of Justice Cheshin's opinion). Otherwise, the originating broadcaster himself would have no exclusionary power over secondary transmissions and therefore would not be in a position to receive any royalties for secondary transmissions. In such circumstances, absent of any “intermediary gatekeeper” that copyright owners could contractually bind in order to protect their interests, Justice Cheshin's approach would not be applicable.
118 At this point, Justice Chesin's opinion could be described under Ronald Coase's counter-intuitive bilateral causation concept: a property rule typed entitlement could be granted either to the copyright owners or to the cable companies (regarding their interest as secondary broadcasters). The central question is who should be granted with the initial entitlement. Coase's famous theorem is that absent of transaction costs, the initial allocation of an entitlement would be rendered obsolete since the parties will anyway bargain for the most efficient result, and that when transaction costs are high, the initial allocation of a resource should be based on efficiency considerations, such as which party would utilize the resource more efficiently (See Coase, Ronald H., The Problem of Social Cost, 3 J. Law & Econ. 1 (1960))CrossRefGoogle Scholar.
119 See Section 10 of Justice Rivlin's opinion and sections 3-6 of Justice Naor's opinion.
120 See Section 4 of Justice Noar's opinion.
121 See Calabresi, Guido & Melamed, A. Douglas, Property Rules, Liability Rules, and Inalienability: One View of the Cathedral, 85 Harv. L. Rev. 1089 (1972)CrossRefGoogle Scholar. For further developments and challenges to Calabresi's and Melamed's seminal article, see Kaplow, Louis & Shavell, Steven, Property Rules Versus Liability Rules: An Economic Analysis, 109 Harv. L. Rev. 713, 715, 719, 736, 759-764, 771–773 (1996)CrossRefGoogle Scholar; Ayres, Ian & Talley, Eric, Solomonic Bargaining: Dividing a Legal Entitlement To Facilitate Coasean Trade, 104 Yale L.J. 1027 (1995)CrossRefGoogle Scholar; Kaplow, Louis & Shavell, Steven, Do Liability Rules Facilitate Bargaining? A Reply to Ayres and Talley, 105 Yale L.J. 221 (1995)CrossRefGoogle Scholar; Lewinson-Zamir, Daphna, The Choice between Property Rules and Liability Rules Revisited: Critical Observations from Behavioral Studies, 80 Tex. L. Rev. 219 (2001)Google Scholar; Bell, Abraham & Parchomovsky, Gideon, Pliability Rules, 101 Mich. L. Rev. 1 (2002)CrossRefGoogle Scholar.
122 See Merges, Robert P, Contracting into Liability Rules: Intellectual Property Rights and Collective Rights Organization, 84 Cal. L. Rev. 1293 (1996)CrossRefGoogle Scholar.
123 See id., at 1303.
124 For the detailed argument see id., at 1307-1327.
125 See also Besen, Stanley M., Manning, Willard G. Jr.. & Mitchell, Bridger M., Copyright Liability for Cable Television: Compulsory Licensing and the Coase Theorem, 32 J. Law & Econ 67 (1978)CrossRefGoogle Scholar.
126 Other examples that are mentioned are patent pools in automobile and aircraft manufacturing.
127 See the Israeli Government Bill no. 122 (dated July 26 2004). This legislative bill proposes a compulsory licensing scheme for simultaneous re-broadcasts, and is explicitly intended to overrule the Tele-Event decision.
l28 Hypothetically, a secondary broadcaster could identify programs with copyrighted materials not licensed for secondary transmissions and thus avoid transmitting them. Nevertheless, the administration costs that would be required for such an operation might outweigh the benefits of re-broadcasting only some television programs (see also Section 43 of Justice Cheshin's opinion in the Tele-Event case).
129 See generally, Cohen, L., Holdouts and Free Riders, 20 J. Legal Stud. 351 (1991)CrossRefGoogle Scholar.
130 See Heller, Michael A., The Tragedy of the Anticommons: Property in the Transition from Marx to Markets, 111 Har. L. Rev. 621 (1998)CrossRefGoogle Scholar. Heller's general theory was applied and exemplified by several scholars, also in the context of intellectual property. See Elkin-Koren, Niva, Copyrights in Cyberspace—Rights without Laws? 73 Chi.-Kent. L. Rev. 1155, 1192–1197 (1998)Google Scholar; Depoorter, Ben & Parisi, Francesco, Fair Use and Copyright Protection: A Price Theory Explanation, 21 Int'l Rev. L. & Econ. 453, 458–59 (2002)CrossRefGoogle Scholar; Depoorter, Ben & Paris, Francesco, The Market for Intellectual Property: The Case of Complementary Oligopoly, in The Economics of Copyright: Development in Research and Analysis (Gordon, Wendy J. & Watts, Richard eds., 2003)Google Scholar; Parisi, Francesco & Sevcenko, Catherine, Lessons from the Anticommons: The Economics of New York Times Co. v. Tasini, 90 Ky. L.J. 295 (2001/2002)Google Scholar. The metaphor of “the tragedy of the anti-commons” is based, of course, on Hardin's, Garret famous article, The Tragedy of the Common, Science 1243–1248 (1968)Google Scholar, which describes a situation in which multiple individuals are privileged to use a resource without a cost effective way to monitor and constrain each other's use, making the resource vulnerable to overuse.
131 See Parisi & Sevcenko, id. at 303.
132 Anti-commons losses result from the imposition of property-type remedies (i.e., injunctions), but if copyright owners are given only a monetary remedy for the infringement of copyright, there would be no opportunity for strategic pricing and thus no anti-commons deadweight loss. Under a liability rule, the prospective buyer of a copyright license would not pay more than the cost of his expected liability for copyright infringement. In contrast, in the case of property-type (i.e., injunction) protection, a copyright license can only be obtained at the price that the copyright owner demands. Under such a regime, strategic pricing of multiple complementary copyrights could lead to substantial dissipation of value. Alongside, liability rules are also subject to some disadvantages such as administration, litigation, and valuation costs that come along with the operation of such a scheme. Moreover, as outlined in the following paragraphs, liability rule schemes also tend to ignore circumstances in which copyright owners might have a legitimate—efficient—reason either to refuse sub-licensing of their materials for simultaneous re-broadcasting or insist on a certain level of royalties.
133 New York Times Co. v. Tasini, 533 U.S. 483, 519 (2001) based on Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 578 n.10 (1994). See also Section 14 to Justice Naor's opinion in the Tele-Event case.
134 For a general analysis of price discrimination in copyright law see Meurer, Michael J., Copyright Law and Price Discrimination, 23 Cardozo L. Rev. 55 (2001)Google Scholar. However, as several scholars have elaborated, using methods of price discrimination with regard to access and uses of copyrighted works also tend to generate social costs that might question its desirability. For example, the fact that price discrimination mechanisms tend to enclose copyrighted works from users who value the work above their optimal demand price of zero, but still bellow the minimal supply price which is equal to the cost of implementing price discrimination mechanisms. (See Benkler, Yochai, An Unhurried View of Private Ordering in Information Transactions, 53 Vand. L. Rev. 2063 (2000)Google Scholar; Netanel, Neil W., Market Hierarchy and Copyright in Our System of Free Expression, 53 Vand. L. Rev. 1879 (2000)Google Scholar. Likewise, given the general social costs that are associated with copyright (see supra, section part I), from the point that copyright owners have recouped their initial investment, the social cost of continuing to enforce copyright will tend to overreach copyright's benefits. These arguments indeed emphasize the fact that there is a tipping point from which the social costs of acknowledging a property right in simultaneous secondary broadcasts would overreach the benefits of such a right. Nevertheless, this is still the same general social cost that derives from a copyright regime.
135 See supra note 127.
136 In a manner, this government bill applies what Bell & Parchomovsky, supra note 121, describe as “Pliability Rules.” That is, a protection of an entitlement that varies from a property rule to liability rule and vice versa according to the implications of changing circumstances and their welfare implications. The governmental bill reflects such an approach by enabling the Minister of Communication to set limits to the liability rule typed compulsory licensing scheme whenever such a legal regime would reach outcomes that are not efficient and socially undesired.
137 This indeed was the minority opinion's presumption (see supra note 109). Economically, such a presumption goes hand in hand with the minority's opinion reasoning, because circumstances of high transaction costs in obtaining licenses from a large number of copyright owners do not exist in the context of one originating broadcaster from whom the secondary broadcasters should obtain authorization. Moreover, as mentioned in supra note 110, today, broadcasters could also rely on their neighboring right of “broadcasters right” that was adopted in 1996 as part of the Israeli Performers' and Broadcasters' Rights Law of 1984. It should be mentioned, however, that at the formal level, there still remains a question mark how to justify Justice Chesin's opinion: while originating broadcasts should be classified as “public performance,” secondary broadcasts should not. Such as distinction becomes even harder if one takes into account the fact that concurrently, regarding the rights of the originating broadcaster himself, Justice Chesin's opinion was that the same activity of retransmission should be subordinated to copyright law and be classified as “public performance.”
138 Supra note 27 and supra Part III(B)(1).
139 Supra note 107 and supra Part IV(C).
140 Supra note 90 and supra Part IV(B).
141 Supra note 43, and supra Part III(A)(2).
142 Supra note 74, and supra Part III(A)(2)(ii).