My thanks for helpful comments on earlier drafts to Jagdeep S. Bhandari, Mark Lemley, and Donald Lively. Thanks to Beverly Chapman and Stuart Kauffman for their invaluable editing. Microeconomics defines a properly working market as one where independent decisions of consumers and suppliers lead to a spontaneous creation of efficient production and allocation. If the winners in a Kaldor-Hicks efficient transaction compensate the losers, the transaction will also be Pareto efficient. L. Rev. 41, 51-52 at nn.
Intellectual property is usually a public good, i.e. consumption is non-rival.
Public goods are prone to market failure. Underproduction occurs when inability to extract economic returns leads potential suppliers to supply less of a good than the public would be willing to buy. The Collections of Information Antipiracy Act was title V of the Digital Millennium Copyright Act passed as it the House in August 1998. In October, when the Digital Millennium Copyright Act was signed into law. See Digital Millennium Copyright Act, Pub.