Study Documents Public Domain’s Importance To Innovation And Creativity

An academic research project on the value of the public domain has documented its importance to innovation and creativity. In one empirical study in the project, it was shown that use of the public domain boosts crowd-funding efforts by innovators. The study was recently discussed at the World Intellectual Property Organization.

The value that is generated from the public domain was the focus of a research report presented at the WIPO Seminar Series on The Economics of Intellectual Property held on 16 June.

The research report, “Copyright and the Value of the Public Domain: An empirical assessment,” was presented by Kristofer Erickson, research fellow, School of Law, University of Glasgow, Scotland, one of the report investigators. The research was commissioned by the UK Intellectual Property Office and published in a report in March.

The research was “a work of collaboration,” Erickson said. The principal investigators of the research included Erickson and Prof. Martin Kretschmer of the University of Glasgow. Co-investigators were Paul Heald (University of Illinois), Fabian Homberg (Business School at Bournemouth University), and Dinusha Mendis (School of Law at Bournemouth University).

Balance to Be Struck

“In the intellectual property system, there is an inherent balance that policymakers try to strike,” WIPO Chief Economist Carsten Fink said in his introduction to the event. On one hand, they give “incentives towards creative and inventive activity,” and on the other hand, they recognise that “creative works and inventions have public good characteristics and should be disseminated as widely as possible.”

For this reason, intellectual property rights are “usually time bound,” leaving aside trademarks, and “once exclusive rights expire,” they “move into the public domain and are free for everyone to use.”

For economists, that trade-off goes back to the “foundations of the intellectual property system,” Fink said. However, it has always been difficult to quantify the importance of the public domain, and how it is “used by creators and by society at large.”

In the seminar, Erickson discussed the report and the three empirical studies contained in the report, which the report said examine “different aspects of uptake and re-use of works from the public domain.”

Main Findings

Erickson discussed the overall findings of the three studies. He said “the public domain and its presence is important to innovation and creativity,” adding that there is a lot of “potential for innovation.”

Previous accounting for the economic size of, for example, the copyright industries, is “missing the important contribution made by the public domain and other alternative inputs to creative production,” he argued.

Additionally, if sides are going to engage in discussions of the overall value of the “inputs and outputs” for the economy, it is necessary to consider not only the work that is copyrighted and excludable, but also the “non excludable inputs and outputs.”

The findings suggest that “there is a lack of knowledge among some users and practitioners” and that there could be “policy implications” in terms of improving information systems (archives, searchability, metadata), he said.

Erickson said he has argued elsewhere that the “public domain is constituted by use.” This means that the law can, in theory, be changed to allow new works to enter the public domain.

However, he said that “unless the businesses and actual users can locate and make use of that work,” while it may be theoretically in the public domain, it is not really in the public domain, unless it can be used in innovation.

Public Domain Boosts Crowd-Funding

Meanwhile, one of the empirical studies showed that the use of the public domain boosts crowd-funding efforts by innovators.

Study 2: Performance of Public Domain Inspired Works on Kickstarter

This study looked at the crowd-funding platform Kickstarter, and analysed Kickstarter pitches that incorporated public domain inputs.

The research question to be answered in Study 2 was: to what extent does the IP status of a Kickstarter media project influence its chance of success?

The conclusions of the findings of this study as outlined were that the “use of both public domain and third party licensed material were significantly associated with higher likelihood of project success.”

Additionally, the public domain status influence on the success rate was more noticeable in comics and theatres as compared with publishing and video games. This suggests, according to the presentation, that the role of public domain will differ “across mediums”.

Another conclusion of Study 2 as outlined in Erickson’s presentation was that “explicitly obtaining copyright permission to use a third party work in a Kickstarter pitch was significantly associated with higher funding levels achieved.”

Uptake of Public Domain Materials, and Value of Images on Wikipedia

Erickson also discussed two other studies from the report: Study 1 dealing with the uptake and exploitation of public domain materials by UK firms, and Study 3 assessing the value of public domain images on Wikipedia.

Study 1: Uptake and Exploitation of Public Domain Materials by UK Firms

This study relates to small and medium-sized creative businesses (SMEs) in the UK that have “used public domain works successfully in a commercial setting,” according to Erickson.

The research identified a number of incentives as to why SMEs take up and use work in the public domain. One incentive, he said, is when the public domain work already has a pre-existing audience. Another incentive is that working with public domain materials doesn’t carry the transaction costs associated with tracking down the rights holder and asking for permission to use the work.

Interviews were carried out with 23 of these firms, and their managerial decision-making was examined around uptake and use of public domain works.

The two research questions asked in Study 1 as outlined in the presentation were: what factors prompt decisions by creative managers to use public domain materials in a commercial context, and what strategies have commercial users of public domain materials adopted in response to specific challenges of working with public domain content?

Study 3: Assessing the Value of Public Domain Images on Wikipedia

Study 3 identified and collected data on 362 authors who had New York Times year-end bestselling novels from 1895 to 1965 in the United States. It looked at the “copyright status of images about the authors included on the Wikipedia page, as well as the legal justification given for use of the image, such as the public domain.”

Erickson’s presentation explains that the public domain effect means “older authors (counter-intuitively) have more images.”  This is because although camera technology became more widespread in the 20th century, many of those images remain in copyright.

He said that 79 percent of author images used were in the public domain, while the remaining 21 percent were in copyright. The justification for the usage of Wiki images includes: fair use (13%), copyright permission obtained (7%), dedicated to the public domain (12%), expired copyright (54%) and other reasons (13%).

Erickson’s presentation outlined how the public domain increases the number of photos that are used on Wiki web pages. This adds value but how much, the study asked. The presentation showed that “value might be measured in costs saved to page builders,” as well as “in terms of increased traffic to web sites with images.”

Study 3 also examined cost saving, popularity and traffic.

The report states that there is a “net increase of between 17% and 22% in visitorship to biographical pages containing images.”

Further, the report states that based on an “analysis of digital licence costs on equivalent commercial platforms,” it can be estimated that the “equivalent market value of public domain images” on Wikipedia (English-language) is in excess of USD $208 million (GBP £138 million) per year, when “taking into account costs saved to Wikipedia page builders.”

Additionally, the study offers an “alternative method of valuation based on increased visitorship” which calculates the “increased traffic associated with the inclusion of public domain images” as representing USD $33,896,638 (GBP £22,613,633) “in advertising revenue for an equivalent commercial website.”

Background to Report

WIPO welcomed the study, which originated in efforts by the UKIPO to “improve the evidence base” upon which UK policymakers can make decisions, Fink said, adding that the study has implications and interest beyond the UK.

The report examines “how value is generated from the public domain,” and “documents the results of a two year-long knowledge exchange initiative undertaken between the Intellectual Property Office, researchers at the University of Glasgow CREATe Centre, and more than two dozen UK businesses and innovators.”

Erickson told the event that the approach to the study was to select “three very specific markets and domains of activity” and try to get a handle on “how the public domain contributed value in those particular areas.”

The stated overall purpose of the project was “to map the size of the public domain and frequency of its use; analyse the role of public domain works in value creation for UK businesses; assist creators and entrepreneurs to identify business models that benefit from the public domain.”

Additionally, the report seeks to “arrive at a sufficiently precise definition of the public domain that would permit measurement of its value, and secondly, to critically appraise theories of creativity and innovation that explain how value might be generated from non-exclusive use of ideas and works available to all.”

Erickson stated that the first challenge was to “define what we mean by public domain.” He stated that the study was interested in the copyright public domain. These are works, ideas and information that are “free for uptake by all.” But the study built on literature in order to define what is meant by copyright public domain, and tried to ascertain where its boundaries may be.

Erickson’s presentation also outlined some types of works to be included (or not included) in a proposed definition of public domain for the study. The report includes a table outlining this analysis.