Further research project
Innovation and Entrepreneurship Research

Copyright and Innovation in Digital Markets

Digitalization is a key driver for innovations and the emergence of new business models. Internet-based value-creation processes are increasingly changing the basic conditions for creativity while at the same time opening up new ways to disseminate and use many different types of content. Accordingly, copyright as a legal instrument to promote innovation and creativity is also confronted with new challenges. Its role in this context must be determined not only from a legal, but also from an economic perspective. Basic groundwork for this task includes charting and analyzing those technological and economic changes that digitalization and interconnectedness entail. Trends regarding technological developments and value-creation models are particularly visible in the kinds of young enterprises that are currently introducing innovative, internet-based business models. If there is a connection between their business models and copyright law, this connection can enable us to draw conclusions as to which basic legal conditions might influence innovation in digital markets in a positive or a negative way.

In this study „Urheberrecht und Innovation in digitalen Märkten“, 40 startups with internet-based business models were surveyed. For the purposes of the study, startups were defined as enterprises under ten years old implementing an innovative business model or innovative technology and striving for significant growth. The goal of the interviews with the startups was to determine which parameters of copyright law the entrepreneurs saw as containing a potential for conflict with their own business model. For this purpose, it was first determined which role copyright-protected content plays for the creation of value, and who the authors of this content are. From this starting point, it was then ascertained what copyright-related questions, insecurities or risks arose for the startups with regard to this content. Finally, entrepreneurs were asked how they responded to these challenges in their day-to-day business. The study was commissioned by the German Federal Ministry of Justice and Consumer Protection and carried out jointly by the Max Planck Institute for Innovation and Competition and the Center for Digital Technology and Management (CDTM) as a multidisciplinary analysis taking technical, economic and legal aspects into account. On 25 April 2016, the study was officially presented to the Federal Ministry of Justice and Consumer Protection.

The analyses of the present study show many of the challenges faced by German copyright law with respect to innovation in digital markets. This work thus provides an empirical basis for preparing proposals for a reform of German copyright law.

Fields of Research

Intellectual property law and competition law between the marketplace and regulation