The Impact of Copyright Policy Changes on Venture Capital Investment in Cloud Computing Companies By Josh Lerner (Harvard University) 1. Introduction This paper examines the effect of copyright policy changes on venture capital (VC) investment in cloud computing companies. To do this, we analyze the effect on venture investment in cloud computing firms of the U.S. Second Circuit Court of Appeals' August 2008 decision in The Cartoon Network, et al. v. Cablevision, which was widely seen as easing certain ambiguities surrounding the intellectual property standing of these firms in the U.S. Our findings suggest that decisions around the scope of copyrights can have significant impacts on investment and innovation. We find that VC investment in cloud computing firms increased significantly in the U.S. relative to the EU after the Cablevision decision. Our results suggest that the Cablevision decision led to additional incremental investment in U.S. cloud computing firms that ranged from $728 million to approximately $1.3 billion over the two-and-a-half years after the decision. When paired with the findings of the enhanced effects of VC investment relative to corporate investment, this may be the equivalent of $2 to $5 billion in traditional R&D investment. Full paper qui: http://www.ccianet.org/CCIA/files/ccLibraryFiles/Filename/000000000559/Cable...