Abstract
The trend has been reversed. With the advance of digital rights management technology, and the pass of Digital Millennium Copyright Act, legal scholars, instead of worrying about the rampant piracy on the Internet will kill the copyright industry, refocus there attention on the desirability of digital rights management system especially from the perspective of the first amendment of U.S Constitution. Among the literature, there are basically two kinds of viewpoints: public domain view and freedom of contract view. In the camp of public domain view, Professor Yochai Benkler argues against digital rights management system, claiming it will lead to consolidation and homogenization in copyright industry. From the perspective of knowledge utilization, this paper disagrees. Mandatory copyright law or unmandatory copyright law is a choice between benefits from more fully utilizing knowledge dispersed in the society and the cost of third parties externality resulting from free contracting. This paper extends Jensen and Meckling’s model in deciding optimal decision right allocation in an organization to the copyright issue. Finally, I refute Professor Yochai Benkler’s argument with the support of management control systems literature, and conclude digital rights management system will lead to more works at a lower price.