Fair Use as Market Failure: A Structural and Economic Analysis of the Betamax Case and Its Predecessors
1982; RELX Group (Netherlands); Linguagem: Inglês
ISSN
1556-5068
Autores Tópico(s)Intellectual Property Law
ResumoWhy Post Now: Fair Use in the time of Coronavirus Copyright’s “fair use” doctrine has drifted in a direction unfortunate for some of the online activities that occupy many of us during this time of lock-down. Recall that in 1981, the Ninth Circuit had ruled that the fair use doctrine was aimed at sheltering “productive” second authors (like parodists), and accordingly was not available for home copiers of on-air entertainments who were making ordinary or “intrinsic” use of the copyrighted material. The Supreme Court then reversed. Sony Corp. v. Universal City Studios, 464 U.S. 417 (1984). The Supreme Court in Sony held, among other things, that people at home did not violate copyright when they copied broadcast entertainment shows for intrinsic purposes such as viewing the shows at convenient times. This was the first case to award “fair use” for making exact duplicates of video material. We have ample reasons to remind ourselves of Sony during this period when a Coronavirus public-health initiative tells us to stay put in our separate homes. Consider three intersecting phenomena: the influence of Judge Leval’s transformativeness criterion; the need for building electronic bridges among members of a locked-down populace; and a drastic drop in income for millions of people. 1. The fair use doctrine over the last three decades has fallen increasingly under the sway of Judge Leval’s “transformativeness” approach. This emphasis on “transformative use” dangerously harkens back to the Ninth Circuit insistence that courts ordinarily should give fair use treatment only to “productive” uses. Admittedly, many judges have interpreted the Leval approach more flexibly than the Ninth Circuit did its rule on productive use. Nevertheless, a transformativeness criterion disfavors the making of exact copies unless the copy has a shift in purpose or message. This bodes poorly for life under siege. 2. During the Coronavirus lock-down, the use of copyrighted material has become increasingly important to daily life. An isolated populace has increased drastically its electronic copying, online public performance, and distribution of copyrighted material. This activity often makes the same “intrinsic” use of the material as was intended by its owners. 3. Efforts to contain the virus has eliminated millions of jobs. This leaves multitudes of people both isolated and unable to afford license fees for the sometimes-copyrighted material needed to assuage loneliness and restore a sense of connection. I am posting my Fair Use as Market Failure from 1982 in part to remind us that non-transformative uses can be fair uses. The article does not address the current situation directly, of course. Both facts and law have changed. Free television broadcast is no longer the dominant source of material being copied, provider-to-consumer licensing is much easier now than it was at the time of the Sony dispute, and the DMCA has limited the impact of secondary liability. Nevertheless, the Sony controversy reminds us that noncreative copying can be fair use, and the article offers the following argument I think important for addressing our current predicament: Copyright law works by harnessing market forces. Markets can only seek to maximize economic value as measured by ability and willingness to pay. When non-monetizable values are at stake, the market fails and “fair use” can be an appropriate response. For anyone intrigued by such an approach, I suggest looking particularly at pages 1630-32 of Fair Use as Market Failure (the subsection labeled “Externalities, Nonmonetizable Interest, and Noncommercial Activities”); also see, e.g., Lydia Loren, Redefining the Market Failure Approach to Fair Use in an Era of Copyright Permission Systems, 5 JOURNAL OF INTELLECTUAL PROPERTY LAW 1 (1997), and my Excuse and Justification in the Law of Fair Use: Transaction Costs Have Always Been Only Part of the Story, 13 J. Copyright Soc’y 149-197. Discussion is welcome at wgordon@bu.edu
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