function of 'would' in the sentence

English as a Second Language English Vocabulary, Grammar and Idioms
1

Please, could you explain the function of ‘would’ in the following sentence:

‘For example, copyright protects a novelist’s rights over her novel, while an exception recognising parody would allow another writer to create a new work of parody based on the original.’

Does it express possibility? or subjunctive mood?

Thanks in advance!

2

…an exception recognising parody would allow another writer to create a new work [if the other writer wanted to do that].