This chapter describes the basic operational outlines of copyright law, and distinguishes copyright from other intellectual property systems—patents, trademarks, unfair competition, trade secrets, and right of publicity. The chapter considers the nature of entertainment and information as public goods, a quality that has sparked competing views of the desired scope of copyright protection, between the copyright optimists, who believe that copyright should be extended to all economically valuable uses of entertainment and information, and the copyright pessimists, who believe that the promise of copyright should be no greater than is needed to provide an incentive to produce creative work.

This chapter traces the history of copyright: the invention of the printing press and its alteration of the balance of moral and economic claims to works of authorship; the protection of these works in England under the combined influence of the Stationers' Company and the Licensing Acts; the passage of the world's first copyright act, the Statute of Anne, in 1710; the major cases, first in England and then in the United States, testing whether copyright is a utilitarian right of limited term or a natural right of perpetual duration; the law's evolution in the United States over the nineteenth and twentieth centuries, through expansion of subject matter and rights to accommodate new technologies; and the introduction of copyright collecting societies in the form of the American Society of Composers, Authors, and Publishers.

This chapter provides a detailed narrative account of a much-discussed copyright infringement lawsuit filed in 1968 by Williams & Wilkins, a medical journal publisher, against the National Library of Medicine for its massive, unauthorized photocopying of journal articles for distribution to medical researchers. The case, which ultimately came before the U.S. Supreme Court, located the central philosophical question of copyright—is it an author's right or a user's right—in the context of the increasingly important issue of how to account for the transaction costs of negotiating licenses for technologically dispersed uses of copyrighted works.

This chapter describes the legal responses to copyright's growing problem of transaction costs over the latter part of the twentieth century, taking as central examples the U.S. Congress's response to library photocopying for interlibrary loans in the deliberations leading to passage of the 1976 Copyright Act; the judicial response, ultimately by the U.S. Supreme Court, to the problem of home videotaping of copyrighted works transmitted over television in the Betamax case; and the question of digital home audio recording addressed in 1992 by the Audio Home Recording Act.

This chapter contrasts the two great traditions of protection for literary and artistic works—the copyright tradition of the common law world (the United States, United Kingdom, and Commonwealth countries) and the author's right tradition of the civil law countries of continental Europe and the rest of the world—and discusses the international treaties, principally the 1886 Berne Convention for the Protection of Literary and Artistic Works, which bridge the two traditions and provides the structure for one country to protect works coming from another country. The chapter also traces the history of economic thought about copyright and author's right, from Adam Smith to the present.

This chapter explores the legal and technological strategies introduced toward the end of the twentieth century to adjust copyright precepts to the challenging realities of digital media, particularly the challenges posed by internet distribution of copyrighted works. Statutory and judicial responses to the problem of peer-to-peer file sharing is considered in the context of the Napster litigation, as are technological fixes, such as the record industry's Secure Digital Music Initiative, and legal fixes, such as the Digital Millennium Copyright Act, aimed at buttressing industry's technological fixes.

Copyright at the end of the twentieth century faced digital challenges on two fronts: whether copyright should admit digital products into the realm of protected subject matter, and whether copyright was capable of extending the reach of its enforceable rights against the new and often ephemeral uses of copyrighted works on the internet. On the first front, the chapter describes the legislative and judicial battles over the question of copyright for computer programs. On the second front, the chapter considers the role of ASCAP-like collecting societies in the digital age, focusing on the creation of the Copyright Clearance Center to collect reproduction royalties; the creation of safe harbors to insulate internet service providers; and the counterproductive extension of copyright terms by twenty years.

This chapter begins with an analysis of the legislative stalemate that stymied copyright reform following the 1998 passage of the DMCA and term extension in the United States and describes the most salient change in copyright markets that will confront legislators once the stalemate lifts: more than ever before, copyright business models will need to compete with free goods—and not only pirated goods, but goods that are free because their copyright owners choose to make them available for free (e.g., Wikipedia, open-source licenses for computer operating systems, and Creative Commons licenses).