Feb/10

6

Conflating IP Doctrines and Copyright Incentives

As Viva Moffat notes, there is an interesting debate going on in the blogosphere over the conceptions of intellectual property law generally, copyright specifically, and copyright with regard to the music industry even more specifically.  There are a number of interesting arguments being made, but I will focus on two: (1) that conflating the different IP doctrines indicates a lack of understanding of IP law, and (2) that the purpose of copyright law is either to protect the work of artists or to benefit consumers.

First, based on personal experience, I think there is a lot of merit to drawing comparisons between the intellectual property disciplines.  This includes not just copyright, trademark and patent law, but also trade secrets, rights of publicity and privacy, and unfair competition.  The purposes behind them and the way that they achieve those purposes can be instructive on a policy level in trying to change and to adapt each discipline to world changes.

The problem comes from a lack of understanding about fundamental differences between the disciplines, which can lead to odd feedback loops among cases in different disciplines.  For example, in Sony the Supreme Court looked to patent law to determine how to cope with contributory infringement in copyright.  They then expounded on that doctrine in Grokster.  Following that decision, patent cases, seeing the explication on contributory infringement, began citing Grokster in interpreting the Patent Act.  Generally, patent plaintiffs (other than trolls) are fairly balanced when it comes to expounding on patent law generally, because they know that although they are plaintiffs today, they may be defendants tomorrow.  In copyright law, however, plaintiffs generally remain plaintiffs and defendant generally remain defendants, which means that when there is an unsympathetic party, like the defendant in Grokster, the law can be distorted in one direction.  Applying copyright principles to patent cases then can lead to decisions that wouldn’t happen otherwise.

As to the second set of claims, both arguments are probably wrong.  Copyright law began in England by using the theory of the romantic author to provide monopolies to the printers of their works.  In the United States, there probably were real romantic authors benefiting from the copyright laws, but then the romantic author concept was used by publishers to increase protections after they had begun to be granted title to copyrights on a work-made-for-hire type theory by the courts (they didn’t call it that then though).  Generally, we discuss copyrights as a means of incentivizing authors to write in an effort to provide works to readers (the public).  However, in practice, copyrights find their way into the hands of corporations, who provide either the funding or the motivation for the creation of those copyrighted works.

The argument that copies of works should be sold at marginal cost ($0) is absolutely ridiculous.  True, most copies of copyrighted works are zero marginal cost goods, but there are fixed costs associated with these works.  In some cases, quite high fixed costs.  So it really doesn’t make sense to move to a system where the creators of those works must simply give them away.  On the other hand, once fixed costs are covered and a modest profit granted, perhaps the monopoly is no longer necessary.  The question, however, is how to determine how much money should be granted to those that put out the money to get copyrighted works to the public.

In the music industry example, the fixed costs really depend on the work.  One artist playing an acoustic guitar and singing in their bathroom with copies only distributed digitally might be relatively cheap to produce.  Full symphonic recordings of operas with multiple singers recorded in high-quality but expensive New York recording studios and distributed on compact discs will likely be more expensive.  As indicated by the chart below, record company profits remain in the billions.  It is these profits that cause problems for copyright law, because they are far off the chart of what is necessary to produce the recordings.  However, copyright abolitionists take a similarly off the chart position that would essentially restrict music production to the kind of music that can be produced with volunteer efforts and donations.  Surely, there must be some room in the middle where we should focus our efforts.

RIAA Profits in Billions

Catwoman or the Kingpin: Potential Reasons Comic Book Publishers Do Not Enforce Their Copyrights Against Comic Book Infringers, 33 Colum. J.L. & Arts 267, 290 (2010) available at SSRN

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