A System Out of Balance: A Critical Analysis of PhilosophicalJustifications for Copyright Law Through the Lenz of Users’Rights
*Dr. Mitchell Longan is a Lecturer in Intellectual Property Law at Birmingham City University.
Ultimately, this Article has three goals. The first is to offer an analysis of users’ rights under copyright law from four commonly used theoretical perspectives. These are labor, personality, economic and utilitarian theories. In doing so, this Article will demonstrate that the philosophies that underpin modern copyright law support a broad and liberal set of rights for derivative creativity. It will argue that current treatment of derivative works is unnecessarily conservative from a theoretical perspective. Second, this Article will demonstrate how, in spite of theory that supports a healthy community of derivative creativity, those who practice it have been further disenfranchised by the law. It will argue term limit extensions, increased protectionist treatment of secondary works online, and the functional lack of access to proper licensing mechanisms have rendered users’ rights impotent. Finally, in conclusion, this Article will offer a solution to the apparent imbalance of power in the form of replacing property-based derivative rights with liability rules. The conclusion, in many ways, merits its own paper and is meant as merely a suggestion of direction rather than a formulated solution.
With the internet and various other new technologies have come a new generation of creators. The internet is ideally suited for the propagation of amateur creativity, and consumer technology has made it easy for the average user to access the necessary tools to make creativity possible. Moreover, the lines between amateur and professional creativity are far more blurred than they were thirty years ago. Although the content industry is no longer composed solely of a few large corporations, the rules are still built for such a system. Instead, millions of would-be creators online lack the resources to take advantage of the current system in the same way that their corporate counterparts can. As it stands, copyright law creates a barrier to amateur creativity and a steep paywall to professional creativity. Copyright reform over the last century has led to a dilution—and sometimes disintegration—of both the public domain and the rights offered under exceptions to infringement. This increasingly protectionist approach to the law coupled with the fact that licensing opportunities are often not realistically achievable for average creators has created an environment that shuns derivative creativity. This form of creativity, however, is culturally valuable and should be, to a degree, fostered by the law.
Ultimately, copyright law will forever be a delicate balance between the rights of content owners and the rights of users. Historically, this balance has been struck via absolute ownership tempered by various “safety valves,” which take the form of exceptions to said ownership or control over a work.1Samuel E. Trosow, The Illusive Search For Justificatory Theories: Copyright, Commodification and Capital, 16 Can. J.L. & Juris. 217, 220 (2003) (arguing that “these safety valves are the fair use/fair dealing doctrine, the idea/expression dichotomy, the originality requirement, the limitation on the duration of copyrights, and the concept of the public domain.”). Yet throughout the last few decades, we have seen gross expansion of power for copyright owners coupled with synchronous diminution of safety valve provisions that benefit users. While proponents of these changes will argue that they have been necessary to incrementally update an out-of-date system for the digital era, the result has been a tangible shift in the balance of power between owners and users.
This Article looks to address the theory that underlies these issues. There is much research concerning the philosophical foundations for copyright law.2See, e.g., Sara K. Stadler, Forging A Truly Utilitarian Copyright, 91 Iowa L. Rev. 609 (2006); Jon M. Garon, Normative Copyright: A Conceptual Framework for Copyright Philosophy and Ethics, 88 Cornell L. Rev. 1278 (2003); Martin Kretschmer & Friedemann Kawohl, The History and Philosophy of Copyright, in Music And Copyright 36 (Simon Frith & Lee Marshall eds., 2004); Tze Ping Lim, Beyond Copyright: Applying A Radical Idea-Expression Dichotomy to the Ownership of Fictional Characters, 21 Vand. J. Ent. & Tech. L. 95 (2018); Alexander D. Northover, ”Enough and as Good” in the Intellectual Commons: A Lockean Theory of Copyright and the Merger Doctrine, 65 Emory L.J. 1363 (2016); Lior Zemer, The Making of A New Copyright Lockean, 29 Harv. J.L. & Pub. Pol’y 891 (2006). However, the bulk of this research is generally focused on analyzing this relationship from the perspective of authorial rights. This Article has three goals. First, it will analyze what exactly users’ rights should be. It will do so through analysis of three major philosophical justifications of copyright law within the scope of users’ rights. These theories are appropriation, economic, and utilitarian. Second, in doing so, it will make the case that users have been disenfranchised by the current legal system. There is an imbalance of power characterized by extensions of term limits for copyrighted works, increasingly protectionist philosophy for treatment of secondary uses, and a functional lack of access to proper licensing mechanisms for average users. Third, it will argue that a rebalancing must occur to restore users’ legal standing but also that the historical property model of copyright law is unsuitable for such a rebalancing and should be restructured accordingly.
Copyright law is justified and explained by various philosophical theories. This section will analyze three primary philosophical justifications for copyright law within the scope of users’ rights, which are appropriation, economic, and utilitarian theories. Ultimately, this analysis will show that each theory supports a far more liberal interpretation of users’ rights than is currently granted by the law today, particularly with respect to the creation of derivatives. None of these theories support an absolute right to make derivatives, but each theory supports strong copyright protection for the right of reproduction.
B. Appropriation Theories
Appropriation theories for copyright law are best described through a quote from Lysander Spooner: “he who does discover or first takes possession of, an idea, thereby becomes its lawful and rightful proprietor; on the same principle that he, who first takes possession of any material production of nature, thereby makes himself its rightful owner.”3Tom G. Palmer, Are Patents and Copyrights Morally Justified? The Philosophy of Copyrights and Ideal Objects, 13 Harv. J.L. & Pub. Pol’y 817, 823 (1990). Thus, these theoretical perspectives are centered on the authorial contributions of a creator as a justification for ownership rights in the creation. This section will analyze two of the more prevalent appropriative theories of copyright law: Lockean and Hegelian philosophies. Both theories are creator-centric, using notions of labor or self-actualization of the individual creator to justify protection of her creations. Finding the intersection of users’ rights within these theories of legal justification relies on analyzing the impact of derivative uses on concepts of original labor and self-actualization.
From the Lockean perspective, many secondary uses do not violate the original creator’s justified exploitation of the fruits of their labor. Moreover, users are entitled to their own right to appropriate from works of intellectual creation that can be considered part of the commons- even where those works are not legally part of the public domain. From the Hegelian perspective, some but not all secondary uses may impact the creator’s sense of self-actualization through her work. However, I find that Hegelian personhood is unaffected in situations where derivative uses of a work are attributed to the secondary creator (not the original creator) and, more importantly, when those uses are paid for. Ultimately, both the Lockean and Hegelian perspectives offer far more space for users’ rights and derivative creativity than is currently offered by the law.
1. Labor Theory: Locke
Philosopher John Locke is likely the father of modern copyright law4Zemer, supra note 2, at 904 (drawing a comparison between Locke’s recommendations for authorial rights to substitute the Licensing of the Press Act). and is still regularly cited in modern court opinions.5See Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1002–03 (1984) (citing Locke in finding that the “general perception of trade secrets as property is consonant with a notion of ‘property’ that extends beyond land and tangible goods and includes the products of an individual’s ‘labor and invention’”); see also CCH Can. Ltd. v. Law Soc’y of Upper Can.,  1 S.C.R. 339, ¶ 15 (Can.) (noting the “competing views on the meaning of ‘original’ in copyright law,” including an “approach consistent with the ‘sweat of the brow’ or ‘industriousness’ standard of originality, which is premised on a natural rights or Lockean theory of ‘just desserts [sic]’”). Application of his theories to copyright law often rely on transposition of his remarks on property rights found in Chapter V, “Of Property,” from the Second Treatise of Government, to intellectual property concepts.6 John Locke, Two Treatises of Government, Second treatise §§ 24 –50 (Peter Laslett ed., Cambridge Univ. Press 1988) (1690). However, his book Liberty of the Press,7 John Locke, Liberty of the Press 329 (Mark Goldie ed., Cambridge Univ. Press 1997) (1695). which specifically addresses intellectual property issues, is of particular value as well. Lockean theory of property is also referred to as “labor theory” and is founded on the notion that an individual has a property right in the fruits of their own labor. Lior Zemer summarizes this perspective as follows:
By mixing his labor with a commonly owned object, the laborer becomes the owner of the object. He has annexed something to it ‘more than Nature, the common Mother of all, had done.’ Labor justifies the integration of a physical object into the laborer’s realm, the suum, and the result is ownership.8Zemer, supra note 2, at 915 n.124 (quoting Locke, supra note 6, at § 45 and § 28). The “suum” means “what belongs to a person is what is one’s own.” See Karl Olivecrona, Appropriation in the State of Nature: Locke on the Origin of Property, 35 J. Hist. Ideas 211, 214 (1974); see also Stephen Buckle, Natural Law and the Theory of Property: Grotius to Hume 169–74 (1993).
Locke adamantly advocated that any violation of an individual’s property right was an unacceptable and unlawful intrusion.9Zemer, supra note 2, at 917–18. However, while labor theory is often seen as a creator-centric philosophy with respect to copyright law, Locke also placed similar emphasis on protection for the collective.10 Locke, supra note 6, at § 26 (“For this ‘labour’ being the unquestionable property of the labourer, no man but he can have a right to what that is once joined to, at least where there is enough, and as good left in common for others.”). Therefore, “any violation of the collective right by virtue of disproportionate enclosures of cultural and social portions of the public domain violates the public’s property right in its labor.”11Zemer, supra note 2, at 917–18. In fact, Lockean justifications for copyright law must establish a delicate balance between the rights of the creator and those of users—or what Locke describes as the “commons.”12 Locke, supra note 7, § 28. Moreover, analyses of Locke’s theories indicate that he placed higher interest on the community’s well-being than that of the individual.13Marcella Favale, Death and Resurrection of Copyright Between Law and Technology, 23 Info. & Commc’n. Tech. L. 117, 120 (2014).
With respect to the balance between individual property rights and those of the common, Locke invoked his principle of “no harm.”14Zemer, supra note 2, at 918. Lockean philosophy dictates that when a property right is created, the unauthorized use or taking of that property by third parties harms the laborer and should be unlawful.15Id. at 918–19. The no-harm proviso tempers the rights of a Lockean property owner based on how that ownership affects the collective. The “no harm” proviso also carries with it three conditions. First, the laborer may appropriate only the amount that she is able to use, also known as the “no-spoliation proviso.”16“Nothing was made by God for Man to spoil or destroy.” Locke, supra note 6, at §30;
Zemer, supra note 2, at 919. Second, one may appropriate from the commons only where there is “enough, and as good left in common for others.”17 Locke, supra note 6, at § 26. Third, Locke indicates a charity proviso whereby, in extreme circumstances, commoners may take and consume the private resources of others.18Zemer, supra note 2, at 919.
However, when applying Lockean notions—particularly conditions one and two—to intellectual property instead of tangible property, problems occur. As Hughes observes:
Physical property can be used at any one time by only one person or one coordinated group of people. Ideas can be used simultaneously by everyone. Furthermore, people cannot be excluded from ideas in the way that they can be excluded from physical property. You may prevent someone from publicly using an idea, but preventing the private use of ideas may not be possible. These two basic differences between ideas and physical goods. . . suggest that ideas fit Locke’s notion of a ‘common’ better than does physical property. . .. With physical goods, the inexhaustibility condition requires a huge supply. With ideas, the inexhaustibility condition is easily satisfied; each idea can be used by an unlimited number of individuals.19Justin Hughes, The Philosophy of Intellectual Property, 77 Geo. L.J. 287, 315 (1988).
When we look at users as not usurpers of property but rather secondary creators with valid appropriation rights of their own, the Lockean perspective becomes clear and best applied to users’ rights in two points. First, copyrighted works are works of ownership, but that ownership shall be tempered where communal use is necessary. In a sense, aspects of copyright protection should be communally owned. Second, accepting that copyrighted works represent commonly owned goods within a Lockean understanding, then the addition of labor to copyrighted works is not only permissible but creates separate ownership in the secondary work to be vested in the secondary author. This argument is, in some senses, supported by modern legal frameworks as it underpins modern notions of fair use and its relevant counterparts elsewhere in the world- especially those that address works of transformation.20In the United States, works considered to be a fair use by transformation are permitted under fair use and given their own copyright protections. See Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994). However, these assertions must be parsed and boundaries articulated. Otherwise, the smallest changes to a copyrighted work could be interpreted to create new authorship. Yet the current law does not support enough freedoms for users to appropriate works protected by copyright by adding their own labor.
Copyrighted works, while valid pieces of property, remain at least partially in the commons. Some scholars have criticized Locke’s philosophy for being too individualistic in nature. They claim that copyrighted works should be collectively owned. Zemer provides an excellent outline of these criticisms in his paper, The Making of a New Copyright Lockean:
For example, Tom Palmer once noted that if rights are to be recognized in works of art and authorship anywhere, “they should be in the audience, and not in the artist, for it is on the audience that the art work depends for its continued existence, and not on the artist.”21Palmer, supra note 3, at 848. Rosemary Coombe argues that the creation of cultural commodities is an essential process that involves the collective as much as it involves the individual author.22Rosemary J. Coombe, Objects of Property and Subjects of Politics: Intellectual Property Laws and Democratic Dialogue, 69 Tex. L. Rev. 1853, 1863 (1991). Margaret Chon claims that “the production of a ‘work’ that is subject to protection by copyright is an activity undertaken by both author and audience.”23Margaret Chon, New Wine Bursting from Old Bottles: Collaborative Internet, Art, Joint Works, and Entrepreneurship, 75 Or. L. Rev. 257, 264 (1996). Carys Craig observes that because “the interdependent nature of human culture means that intellectual works are necessarily the products of collective labour” they “ought to be owned collectively.”24Carys J. Craig, Locke, Labor and Limiting the Author’s Right: A Warning Against a Lockean Approach to Copyright Law, 28 Queen’s L.J 1, 36 (2002). Susan Scafidi remarks that as members of a cultural unit we “already share the same culture and jointly ‘own’ its cultural products.”25Susan Scafidi, Intellectual Property and Cultural Products, 81 B.U. L. Rev. 793, 810 (2001). . . . In other words, these scholars argue that the public’s contribution to the creative process amounts to labor.26Zemer, supra note 2, at 912–13.
Consumers, audiences, and users play a distinct role in the creation of value in creative works. Without them, in fact, a work has no value to exploit. The role of cultural consumers, however, may not amount to labor, which would justify a property right under Lockean philosophy. Locke vigorously disapproved of the misappropriation of another’s labor27See Locke, supra note 6, at 119 § 33 (“. . . he desired the benefit of another’s pains, which he had no right to. . . .”). and it is hard to frame the act of appreciating the results of another’s labor as a laborious contribution that justifies a property right. Regardless, creative works that become particularly important to certain communities become pieces of their cultural heritage.
William Fisher describes seven distinct categories of raw materials to which a Lockean laborer may add his labor, specifically naming cultural heritage:
a. the universe of “facts”; b. languages-the vocabularies and grammars we use to communicate and from which we fashion novel intellectual products; c. our cultural heritage – the set of artifacts (novels, paintings, musical compositions, movies, etc.) that we “share” and that gives our culture meaning and coherence; d. the set of ideas currently apprehended by at least one person but not owned by anyone; e. the set of ideas currently apprehended by at least one person; f. the set of all “reachable” ideas –that is, all ideas that lie within the grasp of people today; [and] g. the set of all “possible ideas” – that is, all ideas that someone might think of.28 William Fisher, Theories of Intellectual Property, in New Essays in the Legal and Political Theory of Property 168, 186 (Stephen R. Munzer ed., 2001).
The ability to use existing culture as a starting point for the creation of new works is necessary for a functioning social dialogue through creation. However, copyright law currently impedes this dialogue and interaction with culture by gatekeeping cultural heritage. Where ideas are a limitless resource, it cannot be said that copyright law fails to leave enough, in the Lockean sense, for the public to make use of. Yet within the paradigm of cultural heritage, some ideas and expressions of those ideas are more important than others.
Placing legal fences around a society’s most important pieces of cultural identity is a violation of the “as good” portion of the no harm proviso, regardless of the labor involved in creating them. For example, the Star Wars stories are socially relevant and distinct pieces of modern cultural heritage. While there is limitless potential for the creation of stories based in outer space, the ability to build on and use those stories is potentially of far more importance to a creator than the ability to create a new story for the purposes of cultural interaction and dialogue. Legally restricting derivative authors from building on these stories impedes their ability to add labor to a foundational raw material of creation- cultural heritage. However, this behavior is easily confused with the notion of “free-riding” whereby an author creates a derivative with the sole purpose of profiting off of the established popularity and goodwill of the existing work. Lockean philosophy does not support free-riding and neither should the law.
However, a balance can be struck between enabling access and preventing free-riding by using liability rules instead of property rules. A liability rule is where an entitlement may be destroyed by payment of an objectively determined value.29Guido Calabresi & A. Douglas Melamed, Property Rules, Liability Rules, and Inalienability: One View of the Cathedral, 85 Harv. L. Rev. 1089, 1092 (1972). Robert Merges expands on this definition, arguing that liability rules “are best described as ‘take now, pay later.’ They allow non-owners to use the entitlement without permission of the owner, so long as they adequately compensate the owner later.” Robert P. Merges, Contracting into Liability Rules: Intellectual Property Rights and Collective Rights Organizations, 84 Calif. L. Rev. 1293, 1302 (1996). On the other hand, property rules state that an entitlement may only be destroyed if it is purchased in a voluntary transaction where the price is set by the owner.30Calabresi & Melamed, supra note 29, at 1092. In the case of copyright, employing a liability rule would mean that a primary creator’s right to make derivatives of their own work, or their derivative rights, could be destroyed by payment of an objective sum.
The monopolization of cultural heritage is theoretically balanced in the law by the public domain, a realm of absolute commons that all creative works eventually fall into. However, cultural dialogue takes place in the present, not the past; it would be extremely rare for anyone to live to see a work created during their lifetime enter the public domain.31For example, in the United States, copyright protection generally lasts for 70 years after the death of the work’s author. For corporate works, protection will last for 95 years from publication or 120 years from creation-whichever is shorter. 17 U.S.C. § 302. The lengthy time limits placed on copyright protection ensure this. Therefore, while the public domain does provide a commons of culture, it is not the culture relevant for a social dialogue because it is often generations old. It is therefore an inadequate substitute for a functioning commons of culture.
A Lockean creator has the right to claim a property right in the products of her creative labor. However, she may not do so at the expense of the commons. Creative works remain parts of the commons both by virtue of consumer contribution and their designations as cultural heritage. As a result, users should be able to add their own labor to existing creative works as they represent raw materials for the creative process. This philosophy in no way supports direct copying but should limit the power of copyright law to oppose unauthorized derivatives. Wendy Gordon argues that, in terms of Lockean philosophy, attributing an absolute property right to creators is conceptually wrong.32Wendy J. Gordon, A Property Right in Self-Expression: Equality and Individualism in the Natural Law of Intellectual Property, 102 Yale L.J. 1533, 1540 (1993). Such a right unfairly compresses the entitlement of the public.33Favale, supra note 13, at 121. I agree with both Gordon and Favale in their conclusion that a liability right,34Liability rights will be discussed at length in section III of this article. not enforceable by injunction, is the most appropriate solution as it would protect the fruits of a creator’s labor while allowing access for secondary creativity and thus safeguarding users’ rights to the commons.35Id.
2. Personality Theory: Hegel
The second of the appropriative philosophies is Hegel’s Personality theory. The Hegelian perspective is founded on the idea that “property provides a unique and especially suitable mechanism for self-actualization, for personal expression, and for dignity and recognition as an individual person.”36Hughes, supra note 19, at 330. Once the ideas are appropriated, the creator’s sense of self and well-being are intrinsically tied to the fate of the creation. Thereby comes the rationale for providing individual protection to those creations.37Lawrence C. Becker, Deserving to Own Intellectual Property, 68 Chi.-Kent L. Rev. 609, 626–29 (1993). While many common law countries such as the United States and the United Kingdom apply mixtures of economic and Lockean justifications for their copyright laws, much of continental Europe applies a more Hegelian, individual-centric justification to their copyright laws.38For a detailed comparison between the copyright laws of the US and various European nations as well as the philosophies that underpin them, see J. Carolina Chavez, Copyright’s “Elephant in the Room”: A Realistic Look at the Role of Moral Rights in Modern American Copyright, 36 AIPLA Q. J. 125, 127–34 (2008). As such, Hegelian philosophy supports stronger protections for the integrity of a work and its author, known as moral rights, that are found in European law but noticeably absent from that of the United States.39The United States has very narrow moral rights protections which are limited only to some forms of visual art. See 17 U.S.C. § 106A. Despite seeming like a philosophy focused on strongly protecting both authors and their works, Hegelian philosophy supports a liberal system of users’ rights under certain circumstances. These circumstances are where the integrity or reputation of an author is not harmed by virtue of secondary uses of her works and when those secondary uses are paid for, thereby recognizing the property rights of the first author and, by extension, her personhood.
Hegelian philosophy supports secondary uses of creative works where the integrity or reputation of an author is not harmed. Because Hegelian philosophy is based on the intrinsic relationship between an author’s personhood and her work, these rights are typically expressed as the right to paternity—or the right to claim authorship and be identified as the author of a work—and the right of integrity—or the right to object to any distortion, modification, or derogatory treatment of one’s work that would lead to harm of the author’s reputation.40Berne Convention for the Protection of Literary and Artistic Works, art. 6bis, Sept. 9, 1886, S. Treaty Doc. No. 27, 99th Cong., 2d Sess. 41 (1986). However, the appropriation of another’s work rarely results in reputation harm for the original author. For such harm to occur, two factors must be present. First, the secondary use must be distorted or modified in such a derogatory way that the author should feel an attack on her personhood by the use. Second, the secondary use must also present itself as or be reasonably confused to be the work of, or at least condoned by, the original author.
The first factor is subjective and difficult to measure. For instance, J.K. Rowling has stated publicly that she supports fan fiction based on her books except in cases where her characters are used in sexually explicit stories.41Darren Waters, Rowling Backs Potter Fan Fiction, BBC News (May 27, 2004), http://news.bbc.co.uk/1/hi/entertainment/3753001.stm [https://perma.cc/ZYM6-X4AT]. However, author S.L. Armstrong describes her feelings towards all types of fan fiction as such: “My knee-jerk reaction is I wouldn’t like it and would want it to go away because those characters would never BE in those situations and I feel it detracts from what my purpose with them is.”42S. L. Armstrong, Fanfiction and Copyright (May 8, 2010) https://slarmstrong.wordpress.com/2010/05/08/fanfiction-and-copyright/ [https://perma.cc/Z2HF-9UNG]. Moreover, some degrees of harm to a creator’s reputation are already accepted today. For example, most jurisdictions allow for some uses of a work without permission for the purposes of criticism and review.43In the U.S., this would be protected by fair use. 17 U.S.C. §107. Other international examples are: Copyrights Designs and Patents Act, 1988, Section 30 (U.K.) (specifically defining uses of a copyrighted work that are for the purpose of criticism comment and review as an exception to infringement); Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society, Article 5(3)(d), E.U. (providing that member states may create an exception to infringement for criticism, comment, and review). Not all criticisms and reviews will be positive, and it is reasonable to believe that the negative ones will adversely impact the reputation of the author. Defining what constitutes an attack on one’s personhood is, at least, difficult and, more likely, impossible. The standard of what an acceptable distortion is will invariably differ from author to author, and any legal standard outside of absolute rigidity will leave some authors craving more protection. Yet such a rigid standard is unnecessary under Hegelian philosophy because even if the standard were adequately defined, most secondary uses still cannot be said to violate an author’s personhood.
The second factor is most important to users’ rights because the secondary use must also present itself as, be reasonably confused to be the work of, or be perceived as condoned by the original author. Only secondary uses that are falsely presented as the work of the original author or easily confused as such, may cause harm to that author’s reputation and thus her Hegelian personhood. Secondary uses, like original works, represent a form of Hegelian self-actualization for the secondary author with the same sense of personhood attached to the secondary works as original works hold for original authors. Hegel argued “everyone has the right to make his will a thing or to make the thing his will, or, in other words, to supersede the thing and transform it into his own . . .” indicating that the property right is created by personal attachment- an attachment that may be superseded by another.44 G.W.F. Hegel, Elements of the Philosophy of Right § 44, at 76 (Allen W. Wood ed., Cambridge University Press 8th ed., 2003) (1821). This line of reasoning appears to be disqualified by Hegel’s own statement “a second party cannot take possession of what is already the property of someone else.”45Id. § 50, at 81. However, Hegel speaks apparently in reference exclusively to concrete objects (“[t]aking possession of a thing  makes its matter my property”46Id. § 52, at 82.). Moreover, secondary creativity results in the creation of an entirely new work, one whose existence is the result of the secondary author’s personality. Therefore, she does not seek to take possession of an otherwise owned work, but rather the newly created work, which may be viewed as otherwise ownerless. Just as one may take ownership in logs split in a day’s work of felling trees and another may take ownership in a house they have built from the same logs, artistic creations may serve as building blocks for future creations. Moreover, when the secondary creator presents the secondary work as her own, there can be no harm to the reputation of the creator of the original work because the original creator has no attachment to the new work outside of supplying creative raw materials. The crux of this process of transfer and re-appropriation is, however, payment.
Hegelian philosophy supports secondary uses of intellectual property when they are paid for because payment represents a recognition of artistic personhood. Payment to use a work serves as an acknowledgement of an individual’s claim over the intellectual property, and through such acknowledgement, the content owner is recognized as a person.47Id. § 71, at 103 (“Contract presupposes that the contracting parties recognize each other as persons and owners of property . . . .” ) (internal citation omitted); see also Hughes, supra note 19, at 349. Hughes cites this notion of “recognition” as an important factor in the self-actualizing nature of creative property and argues it must not be mere “lip service.”48Hughes, supra note 19, at 349. Recognition is manifested through actions, via the treatment of one’s property, not by any statement or verbal acknowledgement.49Id. Thus, to acknowledge the creator of a work as such but then go on to use her work without permission or payment is insufficient for Hegelian recognition. However, the act of payment can serve as such recognition and “purchasers of a copyrighted work or licensees of a patent form a circle of people recognising the creator as a person.”50Id. Moreover, this income promotes further self-actualization because it may facilitate further expression and likewise maximise personality.51Id. Thus, personality theory will support users’ rights to appropriate works when those uses are paid for.
C. Economic Theory
Copyright law is often justified not only by philosophical theories but by economic theory as well. This section will first define economic theory and describe how it is used to support copyright law. Next, it will analyze how this theory may be applied to secondary creativity or derivative rights. In examining this interaction, this section ultimately argues that economic theory supports strong rights of reproduction but fails to offer a similar justification for strong derivative rights.
Theoretically, copyright law is used as a tool to correct market imperfections inherent to the economics of creative industries. There are two characteristics of intellectual property, specifically copyrighted works, that create market imperfections not typically seen with tangible property. First, copyrighted works are non-rivalrous because a creative work may be enjoyed an infinite amount of times by an infinite number of people without depleting the further enjoyment of others.52Favale, supra note 13, at 125. This non-rivalrous characteristic affects the competitive nature of intellectual creations because there is little direct competition between works, even in the same medium or genre, as the sales of one will not necessarily deplete the need for another similar work. Second, intellectual creations are non-excludable because it is not always possible to prevent people who have not purchased or paid for the works from accessing and enjoying them.53Id. The non-excludable character of expressive works has become exacerbated in the digital environment. This unique characteristic of expressive works not found in physical property or goods facilitates free-riding behaviors- or the use and benefitting from the work without paying for its consumption.54Id. The inability to prevent consumers from accessing creative content without paying for it is considered a market failure as it will result in a decrease in the desire to create marketable expressive works due to the difficulty to recuperate investments and profit from those works.
Copyright law is designed to correct the market failures generated by the non-rivalrous and non-excludable nature of creative works by offering creators a bundle of exclusive rights intended to facilitate compensation and thereby promote creativity.55See U.S. Const. art. I, § 8, cl. 8. This notion of promotion of creativity and the value it pays back to society is derived from classical economics, dating back to Adam Smith.56Favale, supra note 13, at 125. However, the prevailing neoclassical economic theory of modern times differs. Its application to copyright law can be summarized as such: “copyright protection corrects the public-good characteristics of expressive works, by turning them into vendible commodities.”57Id. Yet while copyright law has been able to adequately correct these stated market failures inherent to expressive works for the last three centuries, the age of the internet and digital technologies has rendered the law less capable of doing so.
While economic theory undeniably supports a strong right of reproduction in copyright law, the evolution of strong derivative rights has come to undermine the notion of encouragement that underpins economic theory and copyright, which is that copyright law encourages the creation of new creative works by protecting them in a way that makes them economically viable. When analyzing the rights of users, strong derivative rights for the original creator serve as the greatest barrier to users’ rights of secondary creativity. While an economic theory of copyright justifies strong protections for the author’s rights of reproduction, it cannot be said to justify similar protections for derivative rights because derivatives are typically non-substituting for the original works, often have a net-zero or net-positive effect on revenue for the works on which they were based,58See Emily Harper, Music Mashups: Testing the Limits of Copyright Law as Remix Culture Takes Society by Storm, 39 Hofstra L. Rev. 405, 434 (2010); see also Eliot van Buskirk, Confirmed: Radiohead Landed On Charts Because Of Remix Track, Wired (Apr. 11, 2008), https://www.wired.com/2008/04/confirmed-radio/ [https://perma.cc/X69E-Y255] (showing how Radiohead made the top 100 because of remixes); Allegra Frank, “Old Town Road” Just Became Billboard’s Longest-Running No. 1 Ever, Vox (July 29, 2019), https://www.vox.com/culture/2019/7/29/8937934/lil-nas-x-old-town-road-billboard-charts-record-breaking-single [https://perma.cc/CB99-VDL8] (explaining how remixes of old town road kept interest piqued); Matt Knight, The World of Fan Fiction: Where Creative Expression and Copyright Collide, Indep. Book Publishers Ass’n (Sept. 2017), https://articles.ibpa-online.org/article/the-world-of-fan-fiction-where-creative-expression-and-copyright-collide/ [https://perma.cc/J225-ZCG4 ] (telling authors to encourage their fans to write and publish fan fiction based on their works because it can boost sales.). and represent new additions to the creative economy which overall increase public welfare. Moreover, a system of strong protection for the original author’s derivative rights arguably supports underproduction of creative works.
Economic theory supports expansion of users’ rights to make derivatives because derivatives are non-substituting and typically have positive or no economic effect on their original counterparts. From an economic perspective, creative works are inherently non-substituting for one another.59Favale, supra note 13, at 125. However, this is premised by the notion that any two creative works are at least different enough from each other to provide unique enjoyment to the same audience. As a result, pirated works and other facsimiles are obviously substitutive as they offer the same experience to the same audience. Derivatives, however, appeal to similar or the same audiences as the original works, which they build upon without siphoning revenue from them. In terms of economic effects on the original works they build upon, derivatives typically bolster sales of the works they adapt by raising or reawakening public awareness and interest in them.60See supra note 58. For example, Hennig-Thurau et al. found that movie sequels are complimentary rather than competing products with their parent films.61Thorsten Hennig-Thurau, Mark B. Houston & Torsten Heitjans, Conceptualizing and Measuring the Monetary Value of Brand Extensions: The Case of Motion Pictures, 73 J. Mktg. 167, 178 (2009) (finding, based on abnormal DVD sales of a parent film after the release of a sequel, that sequels are complementary products that boost attention rather than compete for it with respect to their parent films). Further, there is evidence in the music industry that supports an assumption that a similar relationship exists between remixes and the parent track.62See, e.g., Buskirk, supra note 58 (showing how Radiohead made the top 100 because of remixes); see also Frank, supra note 58 (explaining how remixes of Old Town Road kept interest piqued). These examples refer to authorized derivatives. However, unauthorized derivatives would likely have similar effects.
The economic justification for copyright can also be described as an encouragement theory because it is designed to encourage the production of creative works through economic incentives. The economic justification for copyright law is based on four premises.63See generally Brian L. Frye, Plagiarism Is Not a Crime, 54 Duq. L. Rev. 133, 149–50 (2016); Brian L. Frye, Against Creativity, 11 N.Y.U J.L. & Liberty 426, 429–31 (2017); Roger Van den Bergh, The Role and Social Justification of Copyright: A “Law and Economics” Approach, 17 I.P.Q. 1, 17–34 (1998). First, a growing body of creative works are necessary for social wealth. Second, without protection, the cost of creative works would diminish to a value marginally higher than the cost of making a copy of those works and in the digital world, this value is often functionally zero. Third, without the ability to profit from their creative works, creators will stop creating altogether—or at least at a rate that would significantly diminish the output of creative works and likewise social wealth. Fourth, copyright protection counteracts this market failure of non-excludability of creative works by ensuring financial exploitation of creative works for a period of time and thereby incentivizes production of new works. Premise one is easy enough to accept and a philosophical discussion about the value of art in society is outside the scope of this Article. Premise two is also easy to accept as it is factually true.64See Favale, supra note 13, at 127. However, premises three and four are less certain.
First, can we be certain that without copyright protections we would see such a significant decrease in creative output? Are financial motivations significant enough in the creative process for this to be true? The answer will vary depending on the creative sector. There are many musicians across the country playing gigs for tiny audiences and recording albums that may only be heard by a handful of people. It is hard to believe that these creators, who are more than likely losing money by making their music, would stop creating if there were no laws protecting the financial integrity of their creations. However, it is also equally hard to believe that Disney would have invested the $356 million it took to make the most recent Avengers film65See Production Costs and Global Box Office Revenue of Selected Marvel Comics Movies from 2002 to 2021, Statista, https://www.statista.com/statistics/323886/marvel-comics-films-production-costs-box-office-revenue/ [https://perma.cc/Y3N7-5PK5]. without the ensured protections offered by copyright law. It is therefore likely that, without any sort of copyright protections, the creative industry would not die altogether but would look vastly different than it does currently.
However, the fourth premise—that copyright incentivizes production of new works—is most important for understanding economic theory and the rights of users. Does copyright law actually incentivize production of new works? A look at the creative landscape of popular culture today indicates that perhaps it does not. Instead of seeing an incentive to create new works, we are seeing creative industries using existing copyright to release the same creative content over and over until it is no longer economically viable.66See Terry Hart, License to Remix, 23 Geo. Mason L. Rev. 837, 863 (2016) (“But sequels have arguably become more prevalent than ever.”); see also Matt Patches, Why Exactly is There a ‘Jarhead 2’? Hollywood’s Secret-Sequel Economy, Grantland (Aug. 19, 2014), http://grantland.com/hollywood-prospectus/why-exactly-is-there-a-jarhead-2-hollywoods-secret-sequel-economy/ [https://perma.cc/S6BZ-P92T]; Sarah Whitten, Disney’s Remakes Have Made More Than Billion Globally Since 2010, CNBC (July 27, 2019, 10:30 AM), https://www.cnbc.com/2019/07/26/disneys-remakes-have-made-more-than-7-billion-globally-since-2010.html [https://perma.cc/U6NE-PJV6]. We are living in the age of the sequel and reboot. For example, in the last twenty years, we have seen the release of three separate Spiderman film series including two reboots.67See Travis Clark, Spider-Man’s Movie Adventures Have Been a Headache for Sony for over a Decade, but the Character Is too Valuable to Compromise on, Bus. Insider (Aug. 21 2019, 1:54 PM), https://www.businessinsider.com/sonys-spider-man-deal-with-disney-and-marvel-studios-explained-2019-8?r=US&IR=T [https://perma.cc/BQ42-PMHM]. Under the current copyright system, we do not have a healthy economy of creative works. Instead, we have an oligopoly of content owners selling us new or slightly different iterations of the same stories over and over again. The potentially enormous value of a copyright coupled with its finite time period does not incentivize the creation of new works but rather the exploitation of existing popular ones.
This problem is reminiscent of the “chicken and egg” paradox. On one side, the power of a valuable copyright incentivizes content owners to reinvest in existing works until they are no longer economically valuable, a deterrent to new creation. However, theoretically this power likewise promotes the creation of new works by virtue of their potential economic value in the future and for years to come. In this way, the incentive theory functions much like a lottery ticket. The potential for massive wealth encourages people to buy a ticket. However, it is hard to imagine someone continuing to purchase new lottery tickets after winning a life-changing jackpot. This analogy admittedly does not accommodate for the idea that there are millions of creators who create out of passion, not the potential for wealth. However, the fact that popular culture is dominated by creative corporations is likewise inarguable.68See Ashely Lutz, These 6 Corporations Control 90% of the Media in America, Bus. Insider (June 14, 2012, 9:49 AM) https://www.businessinsider.com/these-6-corporations-control-90-of-the-media-in-america-2012-6?IR=T [https://perma.cc/AS7Z-2LD7]. Disney built a creative empire on the back of a handful of great stories. But since 2010, Disney has made over $7 billion from live action remakes of old animated films.69Economic data shows that Disney has made over billion by remaking their old animated films into live action movies since 2010. See Disney Remakes Have Made Over Billion Since 2010, The Indep. (July 31, 2019, 8:50 AM) https://www.independent.co.uk/arts-entertainment/films/news/disney-remake-box-office-gross-total-lion-king-a9028641.html [https://perma.cc/H9S3-9BEC]. Now, Disney seems more interested in milking those stories dry while their copyrights are still valid than investing in new ones.70Id.
Limiting derivative rights for the original creator in a way that opens access for third parties to easily make derivative works would transfer the majority of the economic value of a copyright into the right of reproduction, or copying the actual work itself. This shift is not necessarily a bad thing. While derivatives are a viable revenue stream for a copyright, they are far from the only possible revenue and may be outside the scope of copyright protection. While copyright law explicitly does not protect ideas, derivative rights functionally do. They protect an infinite number of yet-to-be-expressed ideas with respect to an existing expression. For example, the copyright for Harry Potter and the Sorcerer’s Stone, book one in the series, not only protected the author, J.K. Rowling, from unauthorized reproductions of the novel, but also gave her the sole power to write or authorize the writing of the six ensuing sequels, the theatrical play, and the two Crimes of Grindlewald spin-off films.71The exclusive right to reproduce a work is stated in 17 U.S.C. § 106(a). The sequels, theatrical play, and film spin-offs are all considered derivative works which the copyright holder also has the sole right to create under 17 U.S.C. § 106(b). In the United States, these works would be considered derivatives of the original Harry Potter books and thereby classed as infringements if published without consent of the copyright holder.72See 17 U.S.C. § 106 (the derivative right is a legal construct unique to the United States but elsewhere these works would implicate the right of reproduction as they make use of copyright protected elements such as characters). These creative works were protected by virtue of derivative rights before they were ever conceived.
Ultimately, economic theory supports strong rights of reproduction for authors because these rights are necessary to correct the market failures inherent to creative works. However, such market failures are not nearly as present with derivatives. The derivative right may be tempered under economic theory as long as free-riding is prevented, which can easily be achieved in a multitude of ways. For example, compulsory licenses are a statutorily mandated license scheme where a license to create a derivative work must be granted to those who apply for one and pay a pre-determined rate. 73Such a scheme already exists in U.S. copyright law for the recording of cover songs. See 17 U.S.C. § 115. Compulsory licenses can limit the derivative right protects against free-riding because uses, while no longer requiring permission, will still require payment. Moreover, the right to exclude others from making derivatives may be allowed only in cases lacking an established standard of additional creativity. Finally, the law governing a compulsory license in this area could be tailored so narrowly as to limit the scope of allowed derivations significantly, such as by continuing to treat sufficiently delineated characters as protected by the right of reproduction. Under such a regime, the story of the life of Obi-Wan Kenobi would be protected for Disney alone to exploit, but original stories taking place in the Star Wars universe, even those potentially making use of obscure characters, would be allowed.74See Paramount Pictures Corp. v. Axanar Prod. Inc., No. 15-cv-09938, 2017 WL 83506 (C.D. Cal. Jan. 3, 2017) (Axanar raised money to produce an original story based on an obscure character from Star Trek that took place in the Star Trek universe. The case was settled with the public terms of the agreement reflecting CBS’s fan films policy which drastically altered the course of the proposed film). Ultimately, there are options for altering the derivative rights inherent in copyright law- even from an economic theory perspective.
D. Utilitarian Theory
Conceptualized by philosopher, Jeremy Bentham, utilitarian philosophy is a formulaic approach to ethical questions that analyzes the perceived effect of an action in terms of the happiness or pleasure it will create for a given number of people compared against the suffering it would reciprocally create for a given number of people. Bentham defines utility as:
that principle which approves or disapproves of every action whatsoever, according to the tendency it appears to have to augment or diminish the happiness of the party whose interest is in question: or, what is the same thing in other words, to promote or to oppose that happiness.75 Jeremy Bentham, An Introduction to the Principals of Morals and Legislation 6–7 (Oxford Clarendon Press 1907) (1823).
Under Benthamian Utilitarianism, all people are equal, and happiness and pain are measured on quantitative not qualitative scales; the happiness or suffering of one individual bears the same weight as that of another.76Id. at 22–23; see also Olgierd Górecki, Utilitarianism: Doctrinal Analysis Evolution of Thought, 20 Annales. Ethics in Econ. Life 141, 143 (2017). Therefore, the appropriate solution to any moral or ethical dilemma is whichever option leads to the least amount of suffering for the least amount of individuals or conversely, the greatest pleasure for the greatest number of individuals.77See Bentham, supra note 75, at 22-23.
While early copyright laws were largely utilitarian constructs,78Sara K. Stadler, Forging a Truly Utilitarian Copyright, 91 Iowa L. Rev. 609, 611 (2006). centuries of legal evolution influenced by individualism has led to a system of laws that no longer reflect utilitarian values. In reference to American copyright law, Sara Stadler writes:
As a nation, we began with Bentham; but we have ended up with John Locke, and as a result, we find ourselves strangled by the very monopolies about which the Framers repeatedly warned in their public writings.79Id.
A truly utilitarian copyright law would likely serve to promote social welfare by advancement of arts, sciences, and thereby learning. However, it would also reject the strong monopoly protections that often benefit individuals over society that have come to define the modern legal framework. Utilitarian philosophy supports liberal users’ rights that must be carefully balanced against the minimum individualist protections necessary to promote creation.
Applying the utilitarian formula to the question of copyright law protection perhaps leads to an answer inappropriately skewed in favor of users. Here, there are multiple forms of happiness that factor into the equation. First, there is the intrinsic happiness of creators—their right to create without restriction.80 Bentham, supra note 75, § V.3 at 24. A secondary aspect of this happiness is the right to preserve the integrity of their creations.81Id. § VII.5, 60-61. Second, there is the happiness of users and consumers, which encompasses both their ability to access creative works82Id. § XV.13, 26. and utilize them in the creation of secondary works.83Id. § V.3, 24. Although the lines between user-creators and consumers have become more blurred, there are surely still far more consumers of creative works than there are creators. Therefore, a purely utilitarian construct would favor the overall happiness of this larger group of individuals and would open access to works for creative consumption. At first glance, this balance in favor of the consumer seems to indicate that the most utilitarian copyright law would be no copyright law. However, with no protections in place at all, the output and quality of creative works would surely decrease and thereby diminish the happiness of the larger body of creative consumers. Moreover, later utilitarian philosophers noted that rigid application of the formula can lead to a tyrannical majority that imposes its will despite violating the rights of the minority individuals.84Górecki, supra note 76, at 147. Thus, a balance must be struck where the minimum amount of protections are offered to ensure the maximum output and quality of creative works and protect intrinsic rights of first creators, but still allow easy access to both consume and adapt those works for users and consumers. The logical response to this statement is something along the lines of: “is that not what we have now?” This Article previously discussed how the current law supports underproduction of creative works and the continued pervasiveness of piracy and various forms of unauthorized remixes85This refers to remix in its broadest sense, encompassing traditional remixes of musical compositions and sound recordings, as well as fan fiction, memes, video and musical mash ups, modded video games, machinima, etc. indicate that the larger body of users and consumers are both unhappy with their ability to access and re-use creative works. The law we have now is not the utilitarian answer to copyright protection.
A more appropriate utilitarian answer for what copyright should look like is absolute protection for the right of reproduction (defense against unauthorized copies, fakes, and forgeries) coupled with a system of derivative rights governed by liability rules. The strict right of reproduction ensures commercial viability and ethical preservation of a copyrighted work and thus promotes creation. It protects the rights of the creative minority to ensure their happiness and stimulate creation. As consumer access will remain the same, piracy will surely continue but may be economically offset in other ways such as levies.86For example, Article 5(b)(2) of the Information Society Directive of the European Union 2001 established that member states may provide limitations to the right of reproduction for private use as long as they receive fair compensation related to the exception. As a result, 22 EU member states have incorporated levy systems on technological hardware associated with private copying such as USB flash drives, hard disks, printers, Mp3 players etc., with the proceeds paid to rightsholders. See Martin Kretschmer, U.K. Intell. Prop. Off, Private Copying and Fair Compensation: An Empirical Study of Copyright Levies in Europe 10 (2012), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2063809 [https://perma.cc/X7J5-FQYQ]. As a prime example of a liability rule, compulsory licenses are statutorily created licenses that allow third parties to use a copyright work without permission from the copyright owner in exchange for a predetermined royalty.87Compulsory License, Black’s Law Dictionary (11th ed. 2019). They create revenue streams for the content owner without unduly burdening the derivative creator with upfront payments for access. Using a compulsory license to govern derivative works appeases both the user’s desire for access to creative raw materials in the form of existing works and the content owner’s desire to profit from her works. For users, compulsory licenses would equalize the price of creating a derivative work, so a user would pay the same price to create a derivation of Spiderman or an unknown novel, which is the current pricing scheme to cover a song in the music industry. While such action would serve to diminish the overall economic value of a copyright by virtue of standardizing the value of a derivative right—which for some works may be valued in the billions in the current economic market88In 2012, Disney announced its purchase of Lucasfilm for .05 billion. While the sale included all aspects of the Lucasfilm business, a large portion of the valuation came from the derivative rights to the Star Wars and Indiana Jones stories and characters. Press Release, The Walt Disney Co., Disney to Acquire Lucasfilm Ltd., (Oct. 30, 2012), https://thewaltdisneycompany.com/disney-to-acquire-lucasfilm-ltd/.—this decrease in the individual value of some works is offset by both the economic and social value of new creations able to enter the market. Moreover, the use of a compulsory license to govern derivative rights solves the dilemma discussed earlier of an overprotecting copyright system that encourages creative underproduction once a creator owns a popular copyright. In reducing the derivative value of copyrights, this system encourages the continued production of entirely new works as they would have the strongest protections and therefore the highest potential economic value. This system looks first to the wants and needs of the majority population, but not in a way that tramples the rights of the minority. It is the ideal utilitarian compromise that offers something to everyone.
Up to this point, this Article has explored the main theories underpinning modern copyright law. However, upon close inspection, these justifications do not actually justify the imbalanced system of rights we have in place today. Philosophical ethics have been pushed to the wayside in favor of corporate lobbying and capitalist individualism. The balance of rights between users and creators under the current system inarguably favors creators by a gross margin. Yet each of the theories discussed up to this point that have been in some way used to justify the modern system we have support a liberal balance of rights between the two groups. We have allowed the law’s evolution to be dictated by corporate lobbyists and, as such, we are left with a legal regime that systematically favors the increasingly fewer corporations that control the vast majority of the most valuable copyrights.89For a description of the consolidation of the entertainment industry, see Cory Doctorow, In Serving Big Company Interests, Copyright is in Crisis, Elec. Frontier Found. (Jan. 21, 2020), https://www.eff.org/deeplinks/2020/01/serving-big-company-interests-copyright-crisis [https://perma.cc/Z37J-K3AG]. However, this Article does not advocate for the abolition of copyright law. There should be protections in place for creative works and, in some respects, those protections should be strong. However, the fundamental purpose of copyright law should always be the promotion of creative works. In its current state, it is no longer doing so. The paradigm of competing creators, users, and consumers has shifted, and the rules designed for this trichotomy in the 18th, 19th, and even 20th centuries can no longer be applied.
The law has become something that not only fails to function adequately but also represents a system we should not want even if it did. Copyright law is blind to the wants and needs of common people at the behest of corporate giants. The facilitation of a healthy creative economy relies on addressing the needs of all parties, not just those with the highest profits. There is an imbalance in the current standards of protection that grossly favors content owners. This imbalance is characterized by the extensions of copyright terms over the course of the last century coupled with increased protectionist treatment of secondary uses online and the functional lack of access to proper licensing mechanisms for average users.
A. Extension of copyright terms
The public domain is the legal realm that creative works fall into when their copyright expires. Anyone is free to use a public domain work in any way they please.90Definitions, U.S. Copyright Off., https://www.copyright.gov/help/faq-definitions.html (last visited Aug. 8, 2022) [perma.cc/W7QQ-C98S]. Disney provides probably the best example of how to make commercial use of public domain works. At least fifty Disney films are based on public domain works ranging from loosely inspired films like The Lion King, which is a retelling of Shakespeare’s Hamlet, to outright remakes like Alice in Wonderland or Pinocchio.91Derek Khanna, 50 Disney Movies Based on the Public Domain, Forbes (Feb. 3, 2014), https://www.forbes.com/sites/derekkhanna/2014/02/03/50-disney-movies-based-on-the-public-domain/?sh=304fa8dc329c [perma.cc/E87U-QPXT]. Disney’s The Jungle Book was released just one year after the copyright for Rudyard Kipling’s collection of stories expired.92Id. While Disney only needed to wait seventy-two years for The Jungle Book’s copyright to expire, this would be an uncharacteristically short term of protection now. The public domain is commonly associated with very old works because since copyright’s inception, the terms granted by copyright law have undergone multiple extensions that, at some stages, were designed by corporate content owners to perpetuate protection of modern works. The last of these extensions was largely the product of a miniature trade battle between the European Union and the United States, coupled with the double-edged sword of American legislative susceptibility to corporate influence and its global economic power to influence other nations. This section will chart the evolution of copyright term extensions in American law as well as the ensuing international accommodations.
The first copyright law in the United States was passed by Congress in 1790 and provided a fourteen-year term of protection for maps, charts, and books that could be renewed once to provide an additional fourteen years of protection.93Act of May 31, 1790, Pub. L. No. 1–15, 1 Stat. 124 (repealed 1831). Since the initial law, Congress extended the term of protection four times. In 1831, the initial fourteen-year term of protection was extended to twenty-eight years but Congress kept the renewal term at the original fourteen years.94Act of Feb. 3, 1831, Pub. L. No. 21-16, 4 Stat. 436 (repealed 1870). In 1909, the renewal term was also extended to twenty-eight years.95Act of Mar. 4, 1909, Pub. L. No. 60–349, 35 Stat. 1075 (repealed 1976). In 1976, Congress extended the term of protection to seventy-five years (an addition of nineteen years).96Copyright Act of 1976, Pub. L. No. 94-553, 90 Stat. 2541 (codified as amended at 17 U.S.C. § 101). This act did not apply retroactively.97Id. Therefore, all works published in 1923 or later received the benefits of this extension but those published prior to 1923 remained in the public domain. The oldest of these works, those published in 1923, were slated to enter the public domain in 1998 under this new law. However, in 1998 Congress passed the Sonny Bono Copyright Term Extension Act (CTEA), which added an additional twenty years of copyright protection to all existing works under protection.98Sonny Bono Copyright Term Extension Act, Pub. L. No. 105-298, 112 Stat. 2827 (1998) (codified at 17 U.S.C. §§ 108, 203, 301–304). The CTEA stated that works created between 1923 and 1978 would now receive protection for a total of ninety-five years, and any work created after 1978 would receive a term of the life of its author plus seventy years.9917 U.S.C. §§ 302–304 (2011). Anonymous, pseudonymous, and works for hire would also receive a ninety-five year term of protection.100Id.
For example, at its publication, H.P. Lovecrafts’s The Lurking Fear would have been slated to enter the public domain in 1989 because it was first published in 1923101 Peter Straub, H.P. Lovecraft: Tales 823 (2005). This short story was first published in the January-April editions of Home Brew, an American horror fiction pulp magazine. and subject to the 1909 Act, granting fifty-six total years of protection. However, its copyright’s term was extended in 1976 and the new law meant that the novel would not enter the public domain until 1998. Its release to the public domain was then again blocked by the CTEA in 1998, which extended its term of protection to 2018—thirty-nine years after it was originally intended to enter the public domain.
Among these amendments to the legal term of a copyright, the CTEA has received the most criticism from legal scholars for both its blatant pandering to corporate lobbyists and its lack of constitutional justification.102See, e.g., Yemi Adeyanju, The Sonny Bono Copyright Term Extension Act: A Violation of Progress and Promotion of the Arts, 2003 Syracuse L. & Tech. J. 3 (2003); Kelly Slavitt, The Copyright Term Extension Act: We May Know the Words, but Can We Find the Harmony?, 11 MSU-DCL J. Int’l L. 457 (2002); Caren L. Stanley, A Dangerous Step Toward the over Protection of Intellectual Property: Rethinking Eldred v. Ashcroft, 26 Hamline L. Rev. 679, 680 (2003). In actuality, the CTEA was largely a response to the European Union’s copyright directive designed to harmonize its copyright laws in 1993.103Council Directive 93/98/EEC, 1993 O.J. (L 290) Art. 7.
The EU Directive achieved two goals. First, it harmonized the length of copyright terms among its member states, requiring each member state to adopt a term of life plus seventy years by 1995.104Id. at L 290/10. Second, it set out to increase European economic leverage in global creative markets by requiring member states to adopt the Rule of the Shorter Term when dealing with foreign works.105Id. art. 7. The Rule of the Shorter Term is a provision set out in the Berne Convention106Berne Convention, supra note 40, at VII. that dictates when there is a disparity in term of copyright protection between two nations, the nation with the longer term may choose to shorten its term of protection to match that of the nation where the work originated.107Id. at VII(8). For example, if France offers a term of life plus seventy years and the United States offers a term of life plus fifty years, France may choose to apply the shorter life plus fifty term to American works in France instead of its own more generous life plus seventy. This shorter term is seen as justified because French works in the United States will only receive the life plus fifty term of protection, and the EU Directive is designed to allow nations to match the economic imbalance. Under the Berne Convention, the rule of the shorter term is permissive.108Id. However, under the EU Directive, it became compulsory for EU member states.109Council Directive 93/98/EEC, 1993 O.J. (L 290) at art. 7 This change was a calculated move to increase Europe’s trade leverage against the United States regarding creative works. In the debate over its response to the European Law, the United States estimated that the disparity in protection would cost its film industry alone as much as $200 million a year by the year 2020.110Shauna C. Bryce, Life Plus Seventy: The Extension of Copyright Terms in the European Union and Proposed Legislation in the United States, 37 Harv Int’l L. J. 525, 527–528 (1996) (citing Hearings Before the House of Reps. Subcomm. on Cts. and Intellectual Prop. of the Comm. on the Judiciary, 104th Cong., 1st Sess. 1 (1995) (statement of Ambassador Charlene Barshefsky, Deputy U.S. Trade Rep.). Thus, Europe’s move sparked the debate in the United States Congress to extend its own terms so that it would be able to maintain its favorable trade imbalance in creative works with Europe.
However, regardless of the perceived necessity to maintain competitive viability of United States’ copyright works abroad, the CTEA was also the product of intense lobbying from the creative industries.111See Keith Pocaro, Private Ordering and Orphan Works: Our Least Worst Hope?, 15 Duke L. & Tech. Rev. 1, 15 (2010) (“The current state of copyright law, with wildly longer term limits and automatic protection, is a result of continuous content-industry lobbying to protect their valuable, ageing intellectual property.”). Disney, who was slated to lose protection for its iconic cash cow Mickey Mouse,112See Derek Chipman, Copyright Term, Disney, and “Steamboat Willie,” Authors All. (May 25, 2022), https://www.authorsalliance.org/2022/05/25/copyright-term-disney-and-steamboat-willie/ (last accessed 19 July, 2022) [https://perma.cc/7SC5-VN3P]. Mickey Mouse first appeared in the animated short, “Steamboat Willie,” which was released in 1928. Copyright in the film would have expired in 1984 under the prevailing laws at the time of its creation. However, the 1976 Copyright Act extension pushed the term until 2003 and the CTEA in 1998 extended the term of protection again until 2024. See Martin Adams, Copyright Term, Disney, and ‘Steamboat Willie,’ Authors
All. (May 2, 2022), https://www.authorsalliance.org/2022/05/25/copyright-term-disney-and-steamboat-willie/ [https://perma.cc/7SNJ-6FLZ]. was particularly involved in the legislative process for the CTEA. Eighteen of the twenty-five sponsors for the bill received campaign money from Disney, including Senate Majority Leader Trent Lott on the very day he signed up as a co-sponsor.113See Christopher Buccafusco & Paul J. Heald, Do Bad Things Happen When Works Enter the Public Domain?: Empirical Tests of Copyright Term Extension, 28 Berkeley Tech. L. J. 1, 8 (2013) (citing William M. Landes & Richard A. Posner, The Political Economy of Intellectual Property Law 16 (AEI-Brookings Joint Ctr. for Regulatory Stud., 2004) (noting that the Center for Responsive Politics showed that in 1996 media interests donated .5 million to six of the sponsors of the Copyright Term Extension Act); see also John Solomon., Rhapsody in Green, Boston Globe, Jan. 3, 1999, at E2. John Solomon wrote:
“Behind the scenes, however, [Disney] has been active. Congressional Quarterly reported that Disney chairman Michael Eisner personally lobbied Senate Majority Leader Trent Lott, a Republican from Mississippi. That day, according to the Center for Responsive Politics, Disney gave Lott a ,000 contribution, following up two weeks later with a ,000 donation to the National Republican Senatorial Committee.” Congress’s failure to address potential issues of the new law, such as the fact that term extensions were arguably a hidden tax on consumers or its conflict with the constitutional mandate that copyright laws should “promote the Progress of Science,”114 U.S. Const. art I, § 8, cl. 8. The CTEA was later challenged on the grounds that extending the terms of existing works failed to promote the creation of new ones as per this mandate in Eldred v. Ashcroft, 537 U.S. 186 (2003). suggest that the CTEA’s swift passage through congress was a reflection of the power of corporate money in the American legislative process.
Ultimately, life plus seventy has become nearly a global standard with over eighty nations offering protection of at least this term, and the vast majority of the remaining nations offering at least life plus fifty years.115List Of Countries’ Copyright Lengths, Wikipedia https://en.wikipedia.org/wiki/List_of_countries%27_copyright_lengths [https://perma.cc/93GH-XSJ3] (last visited Mar. 5, 2023). However, just over 100 years ago when the United States was considering its second copyright term extension, Congress rejected the term of life plus fifty years because it believed that such a length was too “a radical departure from what was then the scope of copyright law.”116Bryce, supra note 110, at 530 (citing Hearings Before the House of Reps. Subcomm. on Cts. and Intellectual Prop. of the Comm. on the Judiciary, 104th Cong., 1st Sess. (1995) (statement of Marybeth Peters). Yet many of the nations with lengthy copyright terms of protection, including Australia,117See Matthew Rimmer, Robbery Under Arms: Copyright Law and the Australia-United States Free Trade Agreement, First Monday (Mar. 3, 2006) http://firstmonday.org/htbin/cgiwrap/bin/ojs/index.php/fm/article/view/1316/1236 [https://perma.cc/9NQP-FXP3] (“In the trade negotiations, [the U.S. Trade Representative] demanded that Australia ratify the World Intellectual Property Organization (WIPO) Copyright Treaty and Performances and Phonograms Treaty. He supported an extension of the copyright term, so that Australia adopted the standards set by the Sonny Bono Copyright Term Extension Act.”) (emphasis removed); see also Maree Sainsbury, Governance and the Process of Law Reform: The Copyright Term Extension in Australia, 9 Canberra L. Rev. 1 (2006) (detailing lobbying effort in Australia to ratify the Free Trade Agreement). Jamaica,118See Mike Masnick, M, Jamaica Latest to Embrace Retroactive Copyright Term Extension and Screw the Public Domain, Techdirt (Oct. 21, 2011, 4:59 AM), https://www.techdirt.com/2011/10/21/jamaica-latest-to-embrace-retroactive-copyright-term-extension-screw-public-domain/ [https://perma.cc/2Y65-6WLX]. South Africa,119See Andrew Rens & Lawrence Lessig, Forever Minus A Day: A Consideration of Copyright Term Extension in South Africa, 7 S. Afr. J. of Info. & Commc’n. 22 (2006). were directly influenced by the United States.
The extension of copyright terms across the globe has directly contributed to the imbalance of rights between users and content owners. Copyright law is designed to create temporary monopoly rights to incentivize creation. However, those monopoly rights are supposed to be balanced by various safety valves, among which is the public domain. Yet the last century has been marked by so many extensions to copyright terms that one may wonder if legislators will ever allow modern works to enter into the public domain. Even if we truly have reached a place where lawmakers are content with the terms set, we have still gone too far, considering the time extensions have not been met with equivalent expansions for users’ rights. If anything, in the aftermath of term extensions the last decade might be described as a period of legal attack on users’ rights, constricting them even more and thus furthering the imbalance. The following sections analyze how these constrictions of users’ rights have taken shape, namely through increased protectionist treatment regarding secondary uses and a lack of access to proper licensing mechanisms.
B. Increased protectionist treatment of secondary uses
Alongside the seemingly perpetual extensions of copyright terms in the modern world, the enforcement issues associated with the internet have brought about new standards in copyright protection which serve to undermine users’ rights. The notice and takedown system, technical protection measures (TPMs), and content filtering software are the primary means of enforcing copyrights in the digital environment, and each serve to whittle away at users’ rights for secondary creation. Generally, the notice and takedown system, TPMs, and filtering software are all used online to prevent or remove infringing content at the expense of often removing legitimate secondary uses and even licensed uses with little recourse granted to the legitimate secondary authors.120Mitchell Longan, Big Brother is Watching but He Doesn’t Understand: Why Forced Filtering Technology Isn’t the Solution to the Modern Copyright Dilemma, Script’ed (Aug. 17, 2018), https://script-ed.org/blog/big-brother-is-watching-but-he-doesnt-understand-why-forced-filtering-technology-on-the-internet-isnt-the-solution-to-the-modern-copyright-dilemma/ [https://perma.cc/5KXR-KNNQ]. The nets designed to catch infringements are cast widely with little care for the rights of authors whose legitimate works are caught in them. These legal mechanisms are also subject to various abuses and used as tools of censorship121Melanie Ehrenkranz, Producers of Nazi Romance Movie Appear to Be Using DMCA Takedowns to Silence Critics, Gizmodo (Jan. 7, 2019) https://gizmodo.com/producers-of-nazi-romance-movie-appear-to-be-using-dmca-1831555053 [https://perma.cc/Y9SL-PFE5] (where producers of a Nazi romance film used the notice and takedown system to silence critics); see also Video Game Developer Says He Won’t Send a Takedown of a Bad Review, Does So Anyway, Elec. Frontier Found. (Feb. 22, 2019) https://www.eff.org/takedowns/video-game-developer-says-he-wont-send-takedown-bad-review-does-so-anyway [https://perma.cc/DSZ6-GGSV] (where a video game developer uses notice and takedown to remove bad reviews.). and extortion122James Hale, Here’s How A Scammer Abused YouTube’s Copyright Infringement System In An Attempt To Extort Money From Users, Tubefilter (Feb. 7, 2019) https://www.tubefilter.com/2019/02/07/youtube-content-id-copyright-infringement-scam/ [https://perma.cc/2YZP-22HF]. with few repercussions. The use of technology and automation to enforce copyright more efficiently in the digital space has resulted in an inadvertent shrinking of users’ rights in a time where we should be looking to expand them to balance the concurrent expansions of owners’ rights seen through term limit expansions.
1. Notice and Takedown
The Digital Millennium Copyright Act (DMCA) was designed to bring copyright law into the age of the internet. It was passed in part to incorporate the World Intellectual Property Organization’s Copyright Treaty of 1996 into U.S. law.123Jeffrey Cobia, The Digital Millennium Copyright Act Takedown Notice Procedure: Misuses, Abuses, and Shortcomings of the Process, 10 Minn. J.L. Sci. & Tech. 387, 388 (2008). Among other things, the Act had the goal of creating a more efficient system of copyright enforcement on the internet. The primary mechanism used to achieve this goal is the now widely used system of notice and takedown. Notice and takedown is a process whereby rights holders may work with online service providers or entities who host websites that allow their users to post material autonomously to remove infringing material posted by their users. A similar system was also passed in the European Union’s Electronic Commerce Directive of 2000.124See Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on Certain Legal Aspects of Information Society Services, in Particular Electronic Commerce, in the Internal Market (‘Directive on Electronic Commerce’) 2000 OJ (L 178) 17.7.
The notice and takedown process allows rights holders to request that infringing material be removed when posted to one of these sites, while granting immunity to the online service providers (OSPs) from claims of secondary infringement (a form of vicarious liability for infringements made by an OSP’s users) as long as they adhere to the rules of the process.12517 U.S.C. § 512 (2010). Without this safe-harbor provision, sites like YouTube, Google, Facebook, and Reddit could never exist. In the United States, the system works as such: upon discovery of infringing material online, a copyright holder, their affiliate, or a member of the public must send a notice to the service provider hosting the content requesting that the infringing material is removed.126Id. § 512(c). The service provider then expeditiously removes the relevant material and must notify the user who originally posted it that it has been removed.127Id. § 512(c), (g)(2)(a). If the user objects to the removal, they may file a counter-notice requesting its reinstatement.128Id. § 512(g)(3). Upon receipt of a counter-notice, the service provider must promptly alert the party who originally filed the takedown notice that it has been disputed by the end user.129Id. § 512(g)(2)(B). From that point, the service provider must replace the removed material within ten to fourteen business days unless it receives notice from the party that filed the original takedown request that it has filed an action seeking a court order to restrain the user from engaging in infringing activity related to the content originally flagged for removal.130Id. § 512(g)(2)(C). The notice and takedown system attempts to balance users’ rights against those of copyright holders, while simultaneously granting private entities the right to self-police in hopes of easing the burden on the courts. However, the system has issues in practice.
The inefficacy of the notice and takedown system has been tracked through a multitude of empirical studies over the last two decades. In 2004, the Liberty Project compared reactions of a U.S.-based Internet Service Provider (ISP) to those of a U.K. (E.U.) based ISP to takedown requests sent for obviously out-of-copyright (in the public domain) content.131 Christian Ahlert, Chris Marsden & Chester Yung, U. Oxford, How ‘Liberty’ Disappeared from Cyberspace: The Mystery Shopper Tests Internet Content Self-Regulation 3 (2004) http://pcmlp.socleg.ox.ac.uk/research/archived-projects/liberty/ [https://perma.cc/QK3E-VM6R]. The group found that the U.S. ISP refused to remove the allegedly infringing material without the complaint specifically adhering to requirements set out by the DMCA, compared to the European ISP, which immediately removed the harmless material without any further vetting of its validity.132Id. at 19–26. This study highlights a preference by ISPs to simply comply with the request without any inspection into its validity.
In 2006, Urban and Quilter analyzed 876 takedown notices, the vast majority of which were issued to Google (734).133Jennifer M. Urban & Laura Quilter, Efficient Process or “Chilling Effects”? Takedown Notices under Section 512 of the Digital Millennium Copyright Act, 22 Santa Clara Comput. & High Tech. L.J. 621 (2006) [hereinafter “Urban-Quilter study”]. In analyzing Urban and Quilter’s findings, Mostert and Schwimmer claimed that nine percent of the notices were defective, thirty percent presented questions that should have been determined by a court of law, and fifty-seven percent of the notices were filed against competitors.134Frederick W. Mostert & Martin B. Schwimmer, Notice and Takedown for Trademarks, 101 The Trademark Rep. 249, 259–60 (2011). These results raise both concerns about why and how the notice and takedown system is being used—with a majority of complaints filed against competitors—and whether it is a suitable alternative to litigation, with nearly a third of requests containing complex legal questions better suited for the courts.
In 2014, the Multatuli project conducted an investigation similar to the Liberty Project with ten Dutch ISPs.135Sjoera Nas, Bits of Freedom, Lecture at SANE: The Multatuli Project ISP Notice & Take Down (Oct. 27, 2004) https://www-old.bof.nl/docs/researchpaperSANE.pdf [perma.cc/D4E6-XSFJ] [hereinafter “Multatuli project”]. The project again dealt with posting of obviously out-of-copyright material on websites hosted by these ISPs, calling for its removal, and analyzing the ISP’s reactions.136Id. Of the ten tested, seven ISPs removed the harmless material without questioning the complaint’s validity, one completely ignored the complaint, and two refused to remove the content because the complainant’s identity could not be verified.137Id. (beginning at “The Results”). The researchers concluded “[i]t only takes a Hotmail account to bring a website down, and freedom of speech stands no chance in front of the cowboy-style private ISP justice.”138Id.
In 2017, Urban and Schofield published findings resulting from three empirical studies of the notice and takedown system.139Jennifer M. Urban, Joe Karagainis & Brianna Schofield., Notice and Takedown in Everyday Practice (UC Berkeley Public Law Research Paper No. 2755628, 2017), https://ssrn.com/abstract=2755628 [https://perma.cc/59B6-RLK9]. One of the studies quantitatively analyzed a sample of 1800 takedown requests out of 108 million provided by Lumen from a six month period in 2013.140Id. at 77–79. Key findings were: 98.9% of the takedown requests were automated;141Id. at 82. in 4% of the requests the allegedly infringing work described did not match the allegedly infringing material;142Id. at 90. in 13.3% of requests it was difficult to find the allegedly infringing material;143Id. at 94. 6.6% of requests were flagged with characteristics that weighed favorably towards fair use;144Id. at 95. and overall, nearly 33% of the requests presented serious questions about their validity.145Id. at 88. This study reinforces questions about the legitimacy of the notice and takedown system.
The notice and takedown system is the first of many copyright enforcement mechanisms that have sought to delegate copyright adjudication to the private sector in hopes of an increase in legal efficiency. As with other areas of copyright law where we see the private sector allowed to self-regulate, the practice of copyright adjudication under the notice and takedown system has become an unbalanced system that favors rights holders at the expense of users’ rights. This imbalance takes shape through various abuses of the system that are unpreventable by nature and coupled with an insufficient system of counter-notices.
C. Abuse of the Notice and Takedown System
The premier flaw of the notice and takedown system is its lack of functional legal oversight. While the notice and takedown system is a legal mechanism of copyright law enforcement, the vast majority of its processes take place without supervision by any governmental body.146See Eldar Haber, Privatization of the Judiciary, 40 Seattle U. L. Rev. 115, 133–34 (2016) (describing the notice and takedown system as a quasi-judicial process performed by private entities like Google, typically by automated processes). The system was designed this way in order to alleviate the burden placed on the courts by allowing the private sector to self-police in a more efficient way. However, this lack of oversight has led to abuse of the system because there are virtually no repercussions for abusing it. Moreover, the requirement that service providers expeditiously remove infringing content once they are given notice has led to a “shoot first, ask questions later approach” with these providers erring on the side of removal instead of performing an in-depth analysis of the legitimacy of each claim received.147See Ahlert, Marsden & Yung, supra note 131, at 9–11. The consequences for failure to remove an actual infringement are steep—the potential loss of safe harbor protections and assumption of secondary liability for the infringement.148See 17 U.S.C. § 512(c). However, there is no penalty for removing legitimate content. Therefore, the very design of the system lends itself to be open for abuse by content owners and those posing as content owners. There are three ways in which this abuse has manifested.
First, takedown notices can be sent by those who are not actually the legal owner of the rights for the copyrighted material in question. This includes anticompetitive takedown notices filed to remove competing businesses links from Google search results,149See Matt Binder, Fraudsters are Abusing Google with Fake Copyright Complaints, and It’s Getting Worse, Mashable (Aug. 6, 2018), https://mashable.com/article/google-fake-dmca-takedown-requests/?europe=true [https://perma.cc/3FW9-RJ4B]. online thieves using the system to essentially hold users’ YouTube accounts hostage,150See Hale, supra note 122. and notices filed by trolls simply looking to cause mayhem.151See, e.g., Timothy Geigner, SoundCloud Troll Getting DMCA Takedowns Shows the Weakness of Notice and Takedown Systems, Techdirt, (Nov. 20, 2018, 3:37 PM), https://www.techdirt.com/articles/20181116/09175541064/soundcloud-troll-getting-dmca-takedowns-shows-weakness-notice-takedown-systems.shtml [https://perma.cc/8ELM-CJCC]. In the first example, online piracy sites masqueraded as legitimate businesses like Netflix or Disney, sending takedown notices on their behalf to have competing piracy sites removed from Google search results.152Ernesto Van der Sar, “Imposters” Manipulate Google with Fake Takedown Requests, Torrentfreak (Aug. 5, 2018), https://torrentfreak.com/impostors-manipulate-google-fake-takedown-request-180805/ [https://perma.cc/42GB-A7RL]. Google is aware of the problem and able to flag some fake notices that it receives. However, even still, there are “potentially millions of URLs removed” by imposters who do not actually own the content in question.153Id. Timothy Geigner, writing for Techdirt, aptly observed that “good internet policy is not that which can be easily subverted by impersonating another person, because that happens all the time on the internet.”154Geigner, supra note 151. Moreover, if theoretically anyone can assert rights of control over a copyrighted work, then it is not actually being controlled or protected. The simplicity of the notice and takedown system is supposed to be its strength. However, it must provide some way of verifying the legitimacy of those filing takedown requests and/or a system of recourse against those who file false claims. Otherwise, it will continue to be abused at the expense of legitimate users.
Second, the process may be used for the purpose of intentionally censoring free speech. Examples of this sort of abuse of the system are: a major American television network silencing a news article about leaked shows along with subsequent social media posts referring to this censorship,155Mike Masnick, Another Week, Another Hollywood Company Files A Takedown Against Torrentfreak, Techdirt (Apr. 23 2019, 3:27 PM), https://www.techdirt.com/articles/20190421/22512742056/another-week-another-hollywood-company-files-takedown-against-torrentfreak.shtml [https://perma.cc/J4YW-GZZJ]. a video game developer using a takedown notice to block a bad review of his game, 156Video Game Developer Says He Won’t Send a Takedown of a Bad Review, Does So Anyway, supra note 121. and the producers of a Nazi romance movie using takedown notices to silence critics.157Ehrenkranz, supra note 121 (where the producers used DMCA takedowns to remove tweets containing short clips alongside criticisms of the film despite such action being textbook fair use). This last example involved the film Where Hands Touch, a heavily criticized love story between a biracial teen and a member of the Hitler Youth in Nazi Germany.158Id. The producers used DMCA takedown notices to remove tweets containing short clips from the film accompanied by criticism (a textbook fair use).159Id. The problem here lies in the automatic handling of DMCA requests coupled with the powerlessness of the subjects of those requests to assert their legitimacy. The DMCA does have a counter notice system whereby the subject of a takedown request may dispute the claim.16017 U.S.C. § 512(g)(3). Following this, the entity who filed the original takedown notice has two weeks to file a lawsuit or the content will be reinstated.161Id. § 512(g)(2)(c). However, many average users are unaware of this process and in some online situations—particularly those involving the silencing of free speech—two weeks can be enough time to do a significant amount of damage. This damage may come in the form of lost revenue from the removed content, challenges to the poster’s credibility, or the suppression of legitimate speech.
Third, takedown procedures ignore fundamental aspects of copyright law such as exceptions to infringement like fair use and are used to chill legitimate creativity. Fair use in the United States and its legal counterparts elsewhere protect a variety of ways in which one may use the work of another without permission.162See 17 U.S.C. § 107. Technically fair use in the U.S. is determined by a four-factor test and theoretically any use of a copyrighted work could be found to be a fair use. However, it is generally for things like criticism, commentary, news reporting, teaching, research, private uses, and uses which transform the original work into something new. See U.S. Copyright Office Fair Use Index: About Fair Use, U.S. Copyright Off., https://www.copyright.gov/fair-use/ (last visited Mar. 2, 2023) [perma.cc/SN4T-U4HC]. However, this body of law is completely subverted by the notice and takedown system, which requires, at best, merely a feeble attempt to consider exceptions to infringement before takedowns are administered. In the United States, Lenz v. Universal Music Corp. established that fair use must be considered before a takedown request is sent.163Lenz v. Universal Music Corp., 801 F.3d 1126, 1129 (9th Cir. 2015). However, the once-believed pivotal holding has proven relatively impotent as there is no standard by which to measure what constitutes sufficient consideration by rights holders. For example, in trying to determine whether an issuer of a takedown notice has considered fair use, “a copyright holder need only a subjective good faith belief that a use is not authorized”164Id. at 1134 (citing Rossi v. Motion Picture Ass’n of Am. Inc., 391 F.3d 1000, 1004 (9th Cir. 2004)). and “[c]ourts are in no position to dispute the copyright holder’s belief even if [they] would have reached the opposite conclusion.”165Id. at 1135. However, a court “need not blindly accept a copyright holder’s claim of good faith belief when there is evidence to the contrary.”166Alper Auto., Inc. v. Day to Day Imports, Inc., No. 18-81753-CIV, 2021 WL 5893161, at *14 (S.D. Fla. Nov. 3, 2021). Yet, where fair use analyses are complex and largely unpredictable in court, the burden of demonstrating that a copyright holder simply has not considered such an analysis at all is lofty. Moreover, the cost of asserting such a claim is likely to be a deterrent to most victims of notice and takedown abuse. While section 512(f)(1) allows for damages in the form of costs and attorney’s fees as a result of the misrepresentation, courts’ application of these damages have not been particularly generous for winning plaintiffs.167See, e.g., id. at *18 (awarding damages of 6.95, including calculations at minimum wage for the time spent trying to reinstate a removed Amazon listing).
Regardless of remedies available under section 512 for misrepresentation, users are always left to assert their rights through the notice and takedown system after their works have been removed. This essentially equates to a system of preliminary injunctions. Preliminary injunctions are occasionally awarded in copyright cases, but the threshold for justifying one is high and reserved only for exceptional cases.168See Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20 (2008) (“A plaintiff seeking a preliminary injunction must establish that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest.”). In the notice and takedown system, though, these injunctions are the standard practice. For example, Google alone has reported over six billion takedown requests received to date.169Content Delistings Due to Copyright, Google https://transparencyreport.google.com/copyright/overview (last visited May 9, 2023) [https://perma.cc/4VC3-SGKX]. Thus, we see another example of a compromise in users’ rights under the law for the sake of efficient enforcement measures for content owners.
Any abuse of the notice and takedown system should theoretically be balanced out by the system of counter notices. Under the DMCA, counter notices allow users to formally contest the removal of allegedly infringing material. Once a counter notice has been filed, the original complainant has fourteen days to seek a court order retraining the user from engaging in the infringing activity or the material will be automatically reinstated.17017 U.S.C. § 512(g)(2). However, research suggests that this aspect of the system may also be subject to failures. For example, Urban, Karaganis, and Schofield write:
As a procedural matter, material that is targeted by a takedown request is often removed before the target is given the opportunity to respond; this was confirmed in interviews with OSPs and rightsholders. Yet all available evidence suggests that counter notices are simply not used. It is indicative of the problem that the most memorable uses of counter notices for our rightsholder respondents were a few bad-faith, bogus counter notices from overseas pirates. Given the high numbers of apparently unchallenged takedown mistakes that showed up in our quantitative studies, we would expect to see higher numbers of appropriate, good- faith counter notices if the process were working as intended.171Urban et al., supra note 139.
The notice and takedown system was designed to efficiently replicate copyright adjudication for infringements online thereby relieving pressure from the courts to carry this burden. However, in doing so, many of the compromises made to achieve efficiency have come at the expense of users’ rights.
1. Technical Protection Measures
Modern technology has given rise to digital tools that enable the controlled use of copyrighted works. These tools are commonly known as digital rights management (DRM). A subset of DRM is technological protection measures (TPMs), or bits of code used to safeguard digital copyrighted works from infringement. Peter Yu noted the importance of distinguishing DRM from TMPs, defining the two as such:
While the latter focuses narrowly on mechanisms used to protect copyrighted contents, such as passwords, encryption, digital watermarking, and other protection techniques, the former includes a larger set of technological tools that not only protect the content, but also monitor consumer behavior and facilitate payment for content usage.172Peter K. Yu, Anticircumvention and Anti-Anticircumvention, 84 Denv. U. L. Rev. 13, 61 (2006).
While TPMs may take many forms, the overarching goal they share is generally to prevent unauthorized copying. Common examples of TPMs are the bits of code stored on a DVD or a video game disc that prevent users from uploading the video to their computer or making copies of the stored file to blank DVDs or other media. These are industry tools and not legislative acts, though the technology often has legislative backing in the form of rules preventing the circumvention of TPMs.173It is illegal to bypass TPM technology in many jurisdictions. Internationally, Articles 11 and 12 of the WIPO Copyright Treaty obligate member states to provide adequate protection for DRM and TPMs used by authors to safeguard their copyrighted works. Articles 18 and 19 of the WIPO Performances and Phonograms Treaty create a similar obligation to protect DRM and TPMs used to protect performances and phonograms. In the United States, rules regarding the circumvention of TPMs are found in 17 U.S.C. § 1201. These protection measures represent content owners using the very technological advancements that made infringement so easy as a tool to help them reassert the necessary control over their digital creative assets for the current property system to continue functioning. However, the use of such technology as an enforcement mechanism for copyright law has presented two fatal issues. First, the technology ignores fundamental aspects of copyright law, namely fair use and exceptions to infringement, in order to serve its prescribed purpose of preventing unauthorized copying. Second, despite sacrificing users’ rights, the technology is not generally effective at preventing actual infringements.
TPMs seek to serve one purpose- preventing unauthorized copying of copyrighted materials. In doing so, TPMs serve to undermine other important aspects of copyright law- namely users’ rights in the forms of exceptions to infringement. For example, the phonographic industry uses DRM to “fight digital piracy,” yet compliance with copyright exceptions to infringement is not one of their stated goals.174See e.g., What We Do, Int’l Fed. of the Phonographic Indus., https://www.ifpi.org/about-us/what-we-do/ (last visited Apr. 3 2023) [https://perma.cc/UQK5-W6CV]. The use of technical protection measures to enable control over a digital copyrighted work typically ignore the rights of users in two ways. First, TPMs will block a legitimate user of a copyrighted work from format and/or time shifting that work. Second, TPMs will prevent the work from being copied not only in circumstances of infringement but also for legitimate reproductions, where the use would qualify as fair (or a similar exception to infringement in other jurisdictions).
Format and time shifting are largely legitimized practices in modern copyright law. In the United States, the practice of time shifting, or recording a piece of lawfully accessed copyrighted material for the purpose of accessing it later in time, was ruled to be a fair use in the infamous “Betamax” case.175Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 (1984). While this case addressed time shifting—or the recording of a broadcast to be watched/listened to at another time—there is no legal holding with regards to format shifting, or the transferring of content from one type of media to another (i.e. uploading the video file on a DVD to one’s computer to be stored and watched there), and fair use in America. Moreover, the anti-circumvention laws in the DMCA make it illegal to bypass any DRM technology imbedded in a copyrighted work even for the legitimate purpose of time shifting.17617 U.S.C. § 1201 (a)(1)(A). Furthermore, the legislation backing DRM/TPM technology shifts the legal focus away from the actual goals of the software—to prevent piracy—to a more restrictive place. The question for courts dealing with infringement cases concerning DRM/TPM technology is not whether an actual infringement occurred, but rather simply was the technology circumvented in some way?177Ali Matin, Digital Rights Management (DRM) in Online Music Stores: DRM-Encumbered Music Downloads’ Inevitable Demise as a Result of the Negative Effects of Heavy-Handed Copyright Law, 28 Loy. L.A. Ent. L. Rev. 265, 271–72 (2007). The actual purpose of copyright law and the means by which digital locks may be used to further that purpose is all but lost in this process. Instead, we are left with a legally-backed enforcement mechanism that encourages anti-competitive behavior and ignores fundamental rights of users under the same law it seeks to enforce.
Ignoring users’ rights is likely seen as the necessary cost of protecting works from large scale piracy. Diminishing users’ rights could be a forgivable trade off if the technology actually worked. However, as it stands, it does not. While TPMs are typically sophisticated enough to prevent average users from accessing the digital information necessary to make unauthorized copies of the works in which they are imbedded, they fail to provide absolute protection. TPMs offer no protection against savvier users and professional infringers. An article in 2002 stated plainly that “to this day, every DRM system with economic significance has been ‘cracked.’”178Ville Oksanen & Mikko Välimäki, Transnational Advocacy Network Opposing DRM ‐ A Technical and Legal Challenge to Media Companies, 4 Int’l J. on Media Mgmt. 156, 156–64 (2007). In the United States, Congress enacted the “anti-circumvention” provisions of the DMCA for this very reason.179See 17 U.S.C. § 1201; see 144 Cong. Rec. H7093-95 (1998); S. Rep. No. 105-90 at 29 (1998); H.R. Rep. No. 105-551, pt. 1, at 17–18 (1998); H.R. Rep. No. 105-551, pt. 2, at 38 (1998). It was responding to concerns voiced by content owners that their works would be pirated despite any digital protection measures they implemented.180See Jessica Litman, Digital Copyright: Protecting Intellectual Property On The Internet 89–150 (2d ed. 2006). Moreover, once the DRM is bypassed, the unlocked version can be uploaded to the internet to be accessed by anyone who wishes to do so- particularly the class of casual pirates that DRM is designed to obstruct. Once an unlocked version of a copyrighted work enters this space, it falls into the realm of notice and takedown protection and there is virtually nothing that can be done to completely remove it from the internet. Therefore, anything but absolute protection is functionally the same as no protection at all.
The use of code to safeguard digital works from unauthorized reproductions in the modern world makes sense in theory. Rapid technological growth over the last thirty years has caused the wave of mass infringements that have plagued copyright owners.181See, e.g., Steven Seidenberg, Copyright in the Age of YouTube, 95 A.B.A. J. 46, 47 (describing the number of online infringements as “skyrocketing”). Using the very technological advancements that made copyright enforcement so difficult for content owners as a shield to re-establish the sense of inaccessibility that made pre-internet copyright law so easy to enforce feels elegant. However, the costs of such a solution must not be ignored. Copyright law is not designed as a one-sided protection for creators and content owners. It is a nuanced balancing act constantly seeking to resolve the rights of those who own content and those who engage with it. Any enforcement mechanism that ignores the rights of those represented by half of this equation is unacceptable, especially one that is otherwise ineffective.
2. Content Filtering Software
Gatekeeping software is the newest iteration of the content industry’s attempts to assert control over copyrighted works online. It is the logical extension of the enforcement mechanisms discussed up to this point and essentially uses technology to automate the notice and takedown process. As such, it suffers from many of the same weaknesses as notice and takedown.182I have discussed these weaknesses thoroughly in a previous essay written at a time where the European Union was considering mandatory copyright filtering technology for certain online content sharing service providers. See Longan, supra note 120. Generally, content filtering technology is a tool of protection and enforcement that ignores users’ rights in the same vein as the two preceding enforcement mechanisms.
While the technology that powers existing content identification software is undeniably complex and sophisticated, the resulting capabilities of that technology are simple. Content identification software systems rely on compiling massive databases of content and using fingerprinting technology to mark that content and determine whether a piece of uploaded content matches in whole or in part any piece of content in their database.183See How Content ID Works, YouTube, https://support.google.com/youtube/answer/2797370?hl=en%20 [https://perma.cc/CF8S-5KBS] (last visited May 9, 2023). This process is performed simply under a match or no-match condition. In other words, the sole objective and only capability of the tech is to determine whether the scanned content matches a piece of content from the database.
The software can detect reproductions of audio and video digital files with a high, but questionable, degree of accuracy.184Tim Ingham, YouTube’s Content ID Fails to Spot 20%-40% of Music Recordings, Music Bus. Worldwide (July 13, 2016), https://www.musicbusinessworldwide.com/youtubes-content-id-fails-spot-20-40/ [https://perma.cc/M35N-JGQ5] (arguing that YouTube’s content ID still fails to detect 20-40% of music recordings). However, copyright law is both complex and, at times, indefinite. The first step of an infringement analysis will invariably involve a determination of similarity and access—regardless of jurisdiction.185See, e.g., Apple Comput., Inc. v. Microsoft Corp., 35 F.3d 1435, 1442 (9th Cir. 1994) (“Copying may be shown by circumstantial evidence of access and substantial similarity of both the general ideas and expression between the copyrighted work and the allegedly infringing work.”). In theory, content identification software will correctly identify direct copying which would satisfy the required analysis for both of these factors.186See, e.g., Dr. Seuss Enterprises, L.P. v. ComicMix LLC, 553 F. Supp. 3d 803, 812 (S.D. Cal. 2021) (citing Corbello v. Valli, 974 F.3d 965, 973 (9th Cir. 2020)) (to establish copying, the plaintiff can rely on direct evidence of copying or can show either: “(1) the two works in question are substantially similar and the defendant had access to the subject work; or (2) that the works are strikingly similar”). However, to reduce the process of analyzing infringement solely to these two steps is an unfair and simplistic application of the law, because an infringement analysis requires more consideration than simply access and similarity. The simple match/no-match process of content identification software fails completely to address the more complex aspect of copyright law regarding fair use (or an exception to infringement outside of the United States) and works that should be treated as such are regularly flagged as infringements.187See Tim Cushing, YouTube Kills Livestream of Convention When Audience Starts Singing ‘Happy Birthday’, TechDirt (Oct. 15, 2013, 10:57 AM), https://www.techdirt.com/2013/10/15/youtube-kills-livestream-convention-when-audience-starts-singing-happy-birthday/ [https://perma.cc/AAD6-8RCK]; see also Paul Resnikoff, Sony Music Says a Harvard Copyright Lecture Violates Its Copyrights, Digit. Music News (Apr. 25, 2017) https://www.digitalmusicnews.com/2016/02/17/sony-music-takes-down-a-youtube-lecture-about-copyright-issues/ [https://perma.cc/6BQE-8S8D] (reporting that a Harvard law school copyright lecture was taken down for including parts of Hendrix’s “Little Wing” despite being a textbook example of fair use); Gita Jackson, Nintendo Flags YouTuber For Using Switch Sound, Kotaku Austl. (Mar. 8, 2017), https://www.kotaku.com.au/2017/03/nintendo-flags-youtuber-for-using-switch-sound/ [https://perma.cc/R564-BZ26] (reporting that a Content ID claim was made for a “Ready. . .Fire!” sound effect from the Nintendo Switch).
Finally, claims are even issued via filtering software by those who are not the rightful owners of a copyright. Examples include a claim made for a song in the public domain,193Adam J. Manley, YouTube’s Content ID System Brings Humbug to the Holidays, Adam the Alien Prods. (Jan. 7, 2014), http://adamthealien.com/2013/12/23/youtubes-content-id-system-brings-humbug-to-the-holidays/#.W1b2Vy_My1s [https://perma.cc/T2JZ-YWDW]. a magazine claiming ownership of a screenshot from a video game because it was published in one of their editions,194Totilo, supra note 192. and Universal Music Group licensing a song from an indie artist to use as a backing track in an audiobook and then using that audiobook as a proxy to claim ownership for the original sound recording of the song.195Tim Cushing, UMG Licenses Indie Artist’s Track, Then Uses Content ID To Claim Ownership Of It, Techdirt (Mar. 18, 2015, 8:19 AM), https://www.techdirt.com/articles/20150317/10513630347/umg-licenses-indie-artists-track-then-uses-content-id-to-claim-ownership-it.shtml [https://perma.cc/U6RW-4YMV].
These failings to distinguish between the intricacies of copyright law become especially unacceptable when considering that the current leading filtering software still fails to simply identify 20-40% of music recordings within its database.196Ingham, supra note 184. Content filtering software is yet another copyright enforcement mechanism that effectively weakens users’ rights in the digital environment.
D. Lack of access to proper licensing mechanisms
While facing unnecessarily long terms of copyright protection and enforcement mechanisms that prevent legal secondary uses of works, the process of actually obtaining a license to make a derivative is often nearly impossible for the average secondary creator. Licenses are functionally unavailable to the average secondary creator because licenses can be difficult to obtain in the first place and, when available, often come with exorbitant price tags.197See Josh Norek, Comment, “You Can’t Sing Without the Bling”: The Toll of Excessive Sample License Fees on Creativity in Hip-Hop Music and the Need for a Compulsory Sound Recording Sample License System, 11 UCLA Ent. L. Rev. 83, 90–91 (2004). The system of using property rules to govern licenses for derivatives has become prejudiced against average creators in favor of wealthier, more established professionals and organizations. The argument for the status quo is that access is and will always be available for all but must be negotiated privately and individually with the copyright holder in the spirit of a free market. These negotiations will inevitably be guided by relevant economic and non-economic factors alike— i.e., the perceived value of the work, the current demand for licenses, the perceived economic and intangible effects of granting the license on the commercial value of the work, etc. This free-market system functionally serves to deny access to the most socially-relevant works for all but the wealthiest of secondary creators.198See id. (arguing that the high cost of licensing samples for remixes prevents new music from being developed and unfairly favors established, wealthy artists). Second, the non-economic factors associated with determining the price for a license often include unreasonable emotional attachments by authors to their works which can lead to outright denial of licenses or inflated prices beyond actual market value.199See id. Finally, the system of upfront payments coupled with the often high prices of obtaining a license discourage secondary creativity in general—not just for amateur or pseudo-professionals—because of the steep investment costs that must be paid before the secondary creator has any idea what the commercial success of her work may be.
The cost of a license to make a derivative is often exorbitant and out of the range of access for most secondary creators.200See, e.g., Reuven Ashtar, Theft, Transformation, and the Need of the Immaterial: A Proposal for a Fair Use Digital Sampling Regime, 19 Alb. L. J. of Sci. & Tech. 261, 273 (2009) (“Flat fees are generally made available, with prices set between one and five thousand dollars”). Economic theories claim this cost is justified. The use of a copyright, like that of any other good, is worth whatever price the seller can charge in a free market. However, copyrights are not governed by a free market. There is no competition because each individual work is unique and subject to temporary limited monopoly rights. While these monopoly rights are designed to ensure the commercial viability of creative works and thereby promote their creation, extending these monopoly rights to derivatives overshoots this purpose. Moreover, the use of free-market economics to govern a market that is not free allows for secondary and irrelevant factors to artificially inflate the price of a copyright. For example, authors often allow emotional attachments to their creations to affect their prices or even willingness to consider a licensing offer.201Alfred C. Yen, When Authors Won’t Sell: Parody, Fair Use, and Efficiency in Copyright Law, 62 U. Colo L. Rev. 79, 84 (1991). This is especially true when the proposed license would have a perceived negative effect on the author’s reputation.202Id. at 90, 103. Studies done on libel claimants suggest that no amount of money will make ridicule worthwhile.203Robert J. Morrison, Deriver’s Licenses: An Argument for Establishing a Statutory License for Derivative Works, 6 Chi.-Kent J. Intell. Prop. 87, 103 (2006). Allowing the market for copyright derivatives to operate freely has fostered an environment that chills secondary creativity for amateur and pseudo-professional creation.
However, the property rule system for derivatives also chills secondary creativity from professional sources. While it is true that inflated prices have created a paywall blocking entry for less established or wealthy creators, the same system could also serve to deter secondary creativity from even the wealthiest creators. While high price thresholds may be surmountable for the larger content companies, the high investment cost will limit their willingness to make secondary creations but for the most financially safe investments. As a result, the most popular creative franchises like Harry Potter, Star Wars, and Marvel will find investment money for derivatives despite the high price tags, but less proven works will not.
We have allowed the law to develop in such a way that creativity, particularly secondary creativity, has become at best a privilege unique to the wealthy and at worst, is deterred for all but the original creator of a work. Copyright terms have been extended to such a degree that no person will likely live long enough to see a work created during her lifetime enter the public domain. Works made using exceptions to infringement and laws of fair use are being treated as infringements online without repercussions. Licensing is a tool of the law that finds utility in only a small percentage of the creative community and serves more often as a barrier to new creation. Changes must be made to the law in order to redirect some creative power into the hands of users and non-corporate creators.
Copyright law is a philosophical and economics-based legal construct that sets out to protect perceived rights of creators—both moral and economic—as a means to incentivize production of new creative works for the benefit of society. This Article began by examining the underlying philosophies that serve as the basis for copyright law within the scope of users’ rights and secondary creativity. The right of reproduction is excluded from this review because there is already literature204See, e.g., Christina Mulligan, Copyright Without Copying, 27 Cornell J.L. & Pub. Pol’y 469 (2017); Haochen Sun, Reconstructing Reproduction Right Protection in China, 53 J. Copyright Soc’y U.S.A. 223 (2005); Kenneth M. Alfano, Copyright in Exile: Restoring the Original Parameters of Exclusive Reproduction, 11 J. Tech. L. & Pol’y 215 (2006). on the subject and this Author has no desire to contest its utility in the modern world, this Article finds that none of the philosophies analyzed offer any justification for the strong derivative rights the law offers the original creators. Moreover, each theory seems to advocate for a strong balance of power between primary and secondary creators. Today, the law offers far less balance. The safety valves in place designed to promote secondary creativity and protect the rights of secondary creators such as the public domain, exceptions to infringement, and licensing mechanisms, have become distorted over the course of time and legal evolution to the point that they no longer function as such. They have become impotent tools and empty promises. The extension of copyright term lengths has led to a public domain that only includes works created multiple generations ago. Moreover, the systems devised to aid protection of copyrighted works in the digital environment—namely notice and takedown, DRM/TPM, and content filtering software—all have the effect of making legitimate secondary uses of a protected work more difficult for users. Finally, the derivative license market often financially shuts average users out of conventional negotiation. All of these systems serve to hinder the production of potentially new and valuable creative works. Moreover, when compared alongside the common theoretical justifications for copyright law presented in the first half of this paper, it is clear that we have strayed far from the principles that once guided copyright law. The Lockean commons has been fenced in with DRM, and we attribute virtually no importance to the Hegelian personhood of a derivative creator. We have created a system which best serves the wants and needs of a small number of content-owning corporations in lieu of a massive population of amateur and pseudo-amateur secondary creators, and it is underproducing many potentially valuable and marketable works because of the restrictive laws and practices presenting them.
The solution to this imbalance in the legal dichotomy is a shift in the nature of copyright law itself- in at least some facets- from that of a property right to a liability right. In the 1990s, Robert Merges wrote a paper urging American legislators against the use of liability rules to solve intellectual property rights issues in new media.205Robert P. Merges, Contracting into Liability Rules: Intellectual Property Rights and Collective Rights Organizations, 84 Cal. L. Rev. 1293 (1996). Merges premised his argument on the value of collective rights organizations and claimed that “[s]ociety and the industry will be better off if Congress exercises restraint, creating an environment in which private organizations can flourish.”206Id. at 1300. Merges analyzed the Calabresi-Melamed Framework,207Id. at 1302. which subdivides all legal entitlements into either those governed by “property rules,” “liability rules,” or “inalienable entitlements.”208Calabresi & Melamed, supra note 29, at 1092. These two types of rules govern the way entitlements are treated. Calabresi and Melamed define an entitlement as the legally prevailing interest when two or more opposing interests conflict.209Id. at 1090. Property rules are rooted in control and require permission from, and often payment to, the owner of the entitlement.210Id. at 1092. An example of this sort of entitlement in the intellectual property context is traditional licensing negotiation for use of a work. The owner of a copyright is granted power under the law to license it at her discretion and therefore permission is required up front for any potential licensor to make use of the work. However, liability rules allow for the destruction of an original entitlement in cases where an objectively determined price is paid to do so.211Id. Merges claimed these rules “are best described as ‘take now, pay later.’”212Merges, supra note 205, at 1302. These sets of rules allow the use of an entitlement by anyone who wishes to do so as long as adequate compensation is paid later.213Id. Merges describes the concept of eminent domain as the quintessential liability rule, but in the IP context, compulsory licenses—where users pay a standardized amount to make derivative works—fall distinctly into this category of rules.
Merges criticized the use of liability rules to govern IP licensing for a number of reasons. First, compulsory licenses create standardized and inflexible valuations for a diverse body of goods.214See id. at 1311. Second, standardized valuation creates a price ceiling that results in top-down bargaining outside the compulsory scheme.215Id. at 1305. Third, compulsory license valuations are a legislated mechanism and are subject to pitfalls of the current legislative system including disproportionate influence from lobbyists and difficulty of revision leading to system obsolescence.216See id. at 1313.
While these are valid points, these obstacles are not insurmountable. Moreover, there would be vast benefits to society associated with the introduction of liability rules to govern certain aspects of copyright protection. Such a move, if applied narrowly, would redistribute power to make derivative creations by removing the upfront financial and permissive barriers to do so while still ensuring a healthy pecuniary interest in derivatives for copyright holders. Liability rules would serve to immediately shift the balance of power in copyright derivative licensing in two ways. First, they open access by dissolving the system that allows for the absolute refusal of licenses or functional refusal via overvaluing a work. Second, they remove the upfront barriers to secondary creation brought about by steep investment costs associated with derivative licenses by offering a take-now-pay-later system. The result will obviously diminish the value of derivative rights. However, a narrow focus when establishing the law will limit this reduction in value for content owners while simultaneously spurring new creative production and thereby creating new revenue streams for both owners and secondary creators. The value will not dissipate but will be redistributed. Discussion of how such a system may be designed or implemented is beyond the scope of this Article. However, ultimately transitioning to such a system would not only benefit society but would also serve to realign copyright law with the philosophical principles discussed in the first section of this Article.