Page 168 - 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 6 UGC Platforms’ Entitlement to UGCs
An Intermediary-oriented Approach

5.6 Conclusions

Although UGCs are available to the public through the peer-to-peer network, the
majority of UGCs do not conflict with the normal exploitation of copyrighted works. These
UGCs should not be subject to the realm of proprietary copyright. To prevent the chilling
effect of copyright from stifling UGC creation, this chapter proposed a levy scheme under
which users can use copyrighted works to engage in non-commercial UGC creation.
Copyright owners cannot sue non-commercial UGC creators covered by the levy scheme,
but can obtain a third-party determined amount of remuneration from UGC platforms and
other devices and services whose value has been substantially enhanced by facilitating UGC
creation. By highlighting the role of various types of intermediaries such as UGC platforms,
MCNs and copyright CMOs, in paying, collecting and distributing levies, this proposed
levy scheme promises freedom to a large number of users without unreasonably prejudicing
the legal interests of copyright owners, and without placing unreasonable burden on UGC
platforms. This is consistent with the intermediary-oriented approach throughout copyright
history in coping with large-scale unauthorised use of copyrighted works. The development
of content identification technology, and effectively-supervised CMOs with economies of
scale, can ensure the feasibility of the levy scheme.
The proposed non-commercial UGC creation levy system, as well as the proposed non-
commercial UGC access levy system in Chapter 4, also have inherent inefficiency, such as
cross-subsidisation and administrative costs incurred by CMOs. However, no solution can
achieve perfection across all dimensions in the real world that is constructed of transaction
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costs, bounded rationality and opportunism. By enlarging the scope of leviable devices
and services, strengthening the supervision of CMOs, enhancing CMOs’ technical capacity
and clarifying their legal obligations, the inefficiencies of the levy schemes can be alleviated.
Levy is at least a ‘second-best’ solution compared with the current proprietary regime and
other alternatives.

246 Oliver E. Williamson, The Economic Institutions of Capitalism (Free Press 1998) xii, 32, 45, 47. Bounded rationality is ‘a
semistrong form of rationality in which economic actors are assumed to be “intendedly rational, but only limitedly so”’.
Bounded rationality signifies that all planning by human is necessarily incomplete. Opportunism refers to ‘the incomplete
or distorted disclosure of information, especially to calculated efforts to mislead, distort, disguise, obfuscate, or otherwise
confuse’. Opportunism is ‘a condition of self-interest seeking with guile’. Because of opportunism, promise will be
predictably broken down.

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