Page 148 - A Study on the Role of UGC Platforms in Copyright Law：An Intermediary-oriented Approach

A Study on the Role of UGC Platforms in Copyright Law: Chapter 5 Formulating a Non-commercial UGC Creation Levy Scheme
An Intermediary-oriented Approach

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from being user-distributors to facilitator-distributors. Nevertheless, even though the
facilitator-distributors did not directly use the copyrighted works, they were still attached to
copyright liability because enforcing copyright against a massive number of end users was
116
inefficient. Moreover, the end users’ use was mostly for personal purposes and had only a
modest impact on the market for the copyrighted works. This made it difficult to calculate
the amount of royalties. It is more efficient and reasonable to collect fees from professional
distributors who profit from facilitating users’ reproduction of copyrighted works than from
dispersed individual users. Therefore, levy schemes emerged.
Analogue technology such as photocopying and recording contributed to decentralising
the ability to reproduce works, and thus the pre-Internet facilitator-distributors such as
the manufacturers of photocopiers and recorders were subject to private copying levies.
117
However, the UGC age has led to the democratisation of not only the capacity to reproduce
copyrighted works, but also the capacity to re-create copyrighted works. As Section 5.3.3
illustrated, in the pre-Internet age, or what Lawrence Lessig called the ‘read/only (RO) age’,
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end users could only re-create text-based works, such as quotations. The re-creative use
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of works conveyed through other media could only be conducted by professional users.
In the UGC age, or what Lessig called the ‘read/write (RW) age’, with the advancement in
the tools for amateurs’ (re-)creation, ‘quoting’ sounds, videos and images has become much
120
easier. Further, due to the peer-to-peer online distribution mode, the UGC age has also
brought about the decentralisation of the capacity to make copyrighted works existing in the
form of UGCs available to the public. Therefore, the levy scheme in the UGC age should be
extended to cover users’ re-creation of content and making the content publicly available.

5.4.2 Without conflicting with the normal exploitation of copyrighted works

Compared to previous levy proposals that considered levy as the default rule (Glynn
Lunney, Jessica Litman), extended levy to commercial use (William Fisher), or applied levy
to P2P sharing (Neil Netanel), this dissertation cautiously restricts the scope of levy scheme
to UGCs that do not conflict with the normal exploitation of the pre-existing copyrighted
works (called as ‘non-commercial UGC’ in this thesis). The restrictive scope of the levy
scheme comports with the law and economic theory that liability rule should only apply
when transaction costs are high, and makes the proposed UGC levy schemes more
121
acceptable for the copyright industry. The scope of the levy scheme is delineated according

115 Ibid.
116 Ibid.
117 Ibid.
118 Lessig, Remix (n 73) 28.
119 Ibid 36, 53.
120 Ibid 69.
121 See supra notes 79-91.

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