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Michael W. Carroll

This chapter addresses the law that limits Internet service providers’ liability for copyright infringement arising from their own conduct and that of their users. Enacted as part of the Digital Millennium Copyright Act of 1998, this policy shields providers from monetary liability when they provide four types of service: (1) network transmission; (2) website caching; (3) storage of content at the direction of a user and (4) links to online locations at which infringing material can be found. Each of these safe harbors is subject to a set of conditions. After describing the policy and legal background concerning service provider liability and the enactment of the safe harbor provision, this chapter explains the statutory text and its reception in the courts. Finally, this chapter identifies issues that are particularly salient for providers and users of social media.

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Michael W. Carroll

By design, copyright and patent law provide largely one-size-fits-all exclusive rights to inventors and authors. This policy creates the problem of uniformity cost, defined as the social cost attributable to the misalignment between the general level of exclusion provided by uniform rights and the specific level of exclusion that would be optimal with respect to any given author or inventor to both create and to commercialize their work. This chapter provides an explanation for the uniformity policy and the existing means of reducing uniformity cost through real options, flexible standards, and private ordering. It then discusses the conditions that would make tailoring intellectual property rights superior to uniform rights. It identifies the categories of economic evidence that would support specific tailoring interventions, which can be done through legislation, judicial interpretation, or administrative rules depending upon context.