Copyright as Protecting a Business Model

Deven Desai

Deven Desai is an associate professor of law and ethics at the Scheller College of Business, Georgia Institute of Technology. He was also the first, and to date, only Academic Research Counsel at Google, Inc., and a Visiting Fellow at Princeton University’s Center for Information Technology Policy. He is a graduate of U.C. Berkeley and the Yale Law School. Professor Desai’s scholarship examines how business interests, new technology, and economic theories shape privacy and intellectual property law and where those arguments explain productivity or where they fail to capture society’s interest in the free flow of information and development. His work has appeared in leading law reviews and journals including the Georgetown Law Journal, Minnesota Law Review, Notre Dame Law Review, Wisconsin Law Review, and U.C. Davis Law Review.

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6 Responses

  1. jerome says:

    this sounds exactly like a techdirt article published a couple of days ago.

  2. mmm says:

    What the brief summary leaves out is that these are phones offered at steep discounts from the COST to Tracphone (not the market price). Ordinarily, those losses are recouped by customers paying for and using the service. What some of the customers are doing is essentially purchasing the phones, removing the little thing that forces the phones to be used witht he Tracphone service, and reselling them at less than market value for use on any service.

    It may be “protecting a business model” but it might also be “enabling a business model.”

    The first sale probably bar much in the way of Tracphone’s ability to limit by contract the end users “use” of the phone. Moreover, since there isn’t really a required “service” like in the ordinary mobile phone sense, there’s really little to stop them from doing this.

  3. Bruce Boyden says:

    I’m not sure the fact that a given law is being used to protect a business model tells us very much. Lawsuits for breach of contract are attempts to protect business models, namely, business models that rely on the enforceability of contracts. That’s not a very strong argument for the abolition of all contract law.

    Tracfone seems to have developed a business model, or at least a pricing plan, that depends on its ability to prevent free riders. It may or may not be able to do that given the legal tools available. But there doesn’t seem to be anything nefarious about the attempt.

  4. Deven Desai says:

    Hmm. Techdirt. Did not know about that site but I see what you mean. Thanks for the heads up. Looks like there is more to read.

    The point that there is a deep discount is a good one. As for Bruce’s idea, no one (except perhaps Bruce) is saying abolish contract. Sure if one wants to sell below cost and then require a service plan, one can try to do so. As mmm points out that may be hard to do. But that contract issue is not the same as the public ordering that is involved in copyright law which is now being used for the private contract matter.

  5. Bruce Boyden says:

    Hi Deven. I picked contract law out of a hat. I think you run into the same issue even with laws that don’t enforce private ordering. E.g., the fact that businesses bring antitrust suits to protect their business models (business models that depend on the lack of unreasonable restraints of trade) doesn’t tell us much about the value of antitrust law. The fact that businesses bring tort claims to protect business models that depend on the absence of tortious behavior doesn’t tell us much about whether tort law is a good thing. Etc.

    It seems that in order to get there, you need to make an argument something like: “The Tracfone suit demonstrates that the anticircumvention rules are bad law because they can be used to protect a BAD business model, and do not have other benefits that outweigh the costs.” For one thing, it’s not clear that the first part is true — it’s not clear that there is anything wrong with Tracfone’s business model. And the second part depends on demonstrating that protection of copyrighted works is unnecessary or harmful. But of course, if you could do THAT, I don’t think you’d really need the business model argument.

  6. Critics of today’s copyright laws often contend that instead of trying to control the use of their works through copyright, “old industries” must adopt “new business models” that would address the public’s desire to have unlimited access to content and impracticality of copyright enforcement in the context of the Internet. Usually adoption of such new business models is offered as a remedy for the growing number of copyright infringements.

    In my new article, Failed Business Models of the Past, Eh?, at (, I explain why adoption of new business models has nothing to do with abandonment of the underlying principle that the owner of copyright should be allowed to decide how its content is used. If a business decides to use their property in an inefficient manner, it is perfectly OK to let such a business fail. We should not “save” this business by stealing from it the property that we think it uses inefficiently.