1. End-user Agreements: Competition Law, Innovation Policy and Individual Autonomy The Intellectual Property Bargain: Consumer Perspectives in a Global Economy Osgoode Hall Law School, Sept. 18, 2009 Ariel Katz Associate Professor Director, Centre for Innovation Law and Policy Faculty of Law University of Toronto

2. The Phenomenon

3. The Question: Should restrictive license terms be enforced? Does a breach of those terms constitute infringement? Should circumventing such restrictions be unlawful?

4. 2 simple unsatisfactory answers No: – Parliament granted some rights to users; – Decreed that certain subject matter is in the public domain – Therefore that’s were they belong.

5. Example: Dear esteemed critic, I’m an aspiring poet, considering whether I should pursue my passion. Your opinion is very important to me. Please read the enclosed poems and tell me what you think about them. By reading them, however, you agree not to criticize them publicly. Yours, Poeticus

6. Example: Terms of Use of Website I’m an aspiring poet, considering whether I should pursue my passion. Your opinion is very important to me. Please read the poems and tell me what you think about them. By downloading them, however, you agree not to criticize them publicly.  Disagree  Agree

7. 2 simple unsatisfactory answers Yes: – IP law creates only a default allocation of rights; – Contracts ≠ property (in personam vs. in rem); – License terms = product features; – Courts don’t design product features; – Competition between sellers is the best protector of consumers’ interests.

8. Can competition law help? Not really. Designed to deal with exceptional cases, not micromanagement of the economy; Requires substantial lessening of competition Elaborate markets and effects analysis; Standing requirements; Limited in dealing with effects on future innovation.

9. There’s no place for the state in the bedrooms of the nation

10. There’s no place for copyright law in the living-rooms of the nation (sort of). Theberge (2002)

11. “Insofar as is possible, this Court should adopt an interpretation... that respects end users’ privacy interests, and should eschew an interpretation that would encourage the monitoring or collection of personal data gleaned from Internet-related activity within the home.” SOCAN v. CAIP (2004)

12. There’s no place for the state in the bedrooms of the nation

13. The exercise of state power to limit individual liberties should be justified (sort of).

14. intrusiveness Private performance Time shifting Reverse engineering Commercial piracy Public performance

15. incentive Private performance Time shifting Reverse engineering Commercial piracy Public performance

16. intrusiveness incentive Private performance Time shifting Reverse engineering Commercial piracy Public performance

17. Selective non-enforceability Based on: 1.How important is the restriction for incentives to create; 2.How intrusive the restriction is; 3.How widespread the restriction is.

18. Sources of innovation Manufacture centric MFR user User innovation MFR user

19. The Question: Should restrictive license terms be enforced? Does a breach of those terms constitute infringement? Should circumventing such restrictions be unlawful?

20. The answer No categorical answer A nuanced answer depends on: 1.How important is the restriction for the incentives to create; 2.Vs. how important user freedom is for user- innovation; 3.How intrusive the restriction is upon users’ liberties; 4.How widespread the restriction is.