Copyright law provides a unique way to tackle the challenges of AI and their effects on the creative arts

Intellectual Property (IP) rights are fundamental to how economies organize innovation and steer the diffusion of knowledge. Yet, while research in economics and management of innovation has largely focused on patents (Awaworyi Churchill et al., 2022; Hall & Harhoff, 2012), other IP rights, and copyright, in particular, have received considerably less attention. Copyright law has continuously developed in response to emerging technologies and their challenges and opportunities not only for creators but also for intermediaries and consumers (Bently et al., 2010). For most of copyright history, storage and distribution technology for written works, sound recordings, photographs, and films were analog. With a broad scope and long protection terms, copyrights have played an essential but relatively passive role in the development of content industries, creating significant value for rightsholders but also a deadweight loss for society. Digital technologies, perhaps starting with the introduction of the microchip and personal computers and much accelerated by the internet, have immensely challenged the copyright system (Greenstein et al., 2013). First, this led some jurisdictions to extend copyright law to new subject matters, for example, by adding protection for software and databases. Second, technology exacerbated the enforcement of demand-side copyright infringement through peer-to-peer file-sharing and unlicensed content platforms. Third, by substantially lowering the cost of creating, distributing, and promoting works, we have seen market entry at an unprecedented scale (Aguiar et al., 2023; Waldfogel, 2017; Wu & Zhu, 2022). However, not all new works are original, but some represent the re-use of existing works which may be potentially infringing—in the following marked as supply-side copyright infringement. In this paper, we provide a synthesis of the empirical literature on the law and economics of copyright in the digital age. First, we review important institutional cornerstones of copyright, focusing on the European Union (EU) and the United States, and also introduce the key developments in copyright law in the digital age. Second, we review the available empirical evidence, with particular attention to the economic impact of digital technologies and the varied interests of stakeholders in the digital economy. We structure our review around the issues of copyright infringement, enforcement, and digital business models and licensing. Third, having established what is known in the field, we continue to develop a research agenda. In particular, we highlight open questions about the heterogeneity and diversity of works and actors in the current copyright system. For example, evidence is limited on economically significant application areas of copyright, such as software code, and with respect to the diverse socio-demographic backgrounds of creators. Further, as licensing technology continues to evolve, we argue that it becomes ever more critical to understand its effects on the involved stakeholders and overall welfare. We argue that copyright law plays a pivotal role in the next wave of technological innovation, acting as a gatekeeper concerning data and Artificial Intelligence (AI). For example, it will be important to study how (the absence of) copyright exceptions for training data affect AI innovation. As governments continue to regulate the digital world, copyright increasingly intersects with competition policy and privacy protection. Finally, we describe how digitization has brought researchers new tools and datasets that can help to answer important questions