Source: https://www.mediainstitute.org/2015/11/24/copyright-no-longer-a-property-right/
Timestamp: 2019-04-24 08:44:29+00:00

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Home>Intellectual Property Issues>Copyright: No Longer a Property Right?
Copyright: No Longer a Property Right?
In this time of prospective copyright reform, some have called for revising copyright law to make a showing of commercial harm an obligatory element of the plaintiff’s infringement case.1 The result: Even were an author’s work copied or communicated to the public, she would have no claim were she unable to prove that the unauthorized exploitation harmed an actual or potential market for her work. Unauthorized exploitation would not itself suffice to establish infringement. Making a showing of harm part of the author’s case in chief would seem radically to change the nature of copyright as a “property right.” For most property rights, the violation consists of a trespass on the owner’s dominion and control over the object of property. If you, without my permission, picnic on my front lawn, I do not have to show that your unauthorized presence on my land caused me specific or prospective economic loss; your unwanted incursion violates my right to keep you off my land. If you “borrow” my toaster during a time that I am not using it, and return it undamaged before I next would want to make toast, you have infringed my chattel rights, even though your temporary appropriation did not inconvenience me. My property right in the toaster allows me to exclude you even when sharing the enjoyment of my goods would benefit you without harming me.
Of course, copyright has never been an “ordinary” property right. While most property rights endure forever (or for as long as the object of the right exists), the Constitution commands that copyright last only for “limited times.” Moreover, the subject matter of copyright does not extend to some objects of commercial value, such as ideas or information, contained within a work of authorship, and many exceptions and limitations, most notably fair use, confine copyright’s scope. Nonetheless, as the Constitution establishes, and the current Copyright Act reiterates, the rights that comprise copyright are “exclusive”; they give authors and right holders the power to exclude third-party uses that come within the statutorily articulated exclusive rights. That exclusivity, even substantially qualified, keeps copyright in the property right fold.
Recent caselaw, however, suggests that copyright revisionists who deplore the control that exclusive rights vest in the author, i.e., who lament authors’ rights to exclude third-party uses, need not look to Congress to take the property out of creators’ rights; the federal courts may already be accomplishing that task. While an accretion of recent fair use decisions has brought us to this pass, the story starts with Congress and its codification of fair use in Section 107 of the 1976 Copyright Act. Factor 4 directs courts to consider the potential impact of the use on the market for the plaintiff’s work. The Supreme Court has emphasized that potential impact includes the effect of the use “if it should become widespread,”2 but it is not clear that courts lately have heeded that directive. Since fair use has long been considered an affirmative defense, it would have been up to the defendant to demonstrate that its use did not substitute for an actual or potential market. Section 107 also states that the fair use of a copyrighted work is “not an infringement”;3 if the defendant successfully bears the burden of persuasion on the overall assessment of the statutory and other factors that judges might add to the inquiry, then no infringement has occurred (and therefore there would be no statutory basis for a compromise legally authorizing the use, but providing compensation to the author4). Economic harm entered the analysis as part of the defendant’s rebuttal of the plaintiff’s prima facie showing of infringement; but if the defendant failed to rebut, the plaintiff did not have to show harm to prevail.
Of course, if a defendant credibly argued lack of economic harm, the plaintiff would have been led to make its own showing of actual or potential deleterious economic impact, so proof of harm would enter the litigation in any event. So long as fair use defenses were not systematically advanced or entertained, courts would not have had to assess economic harm until the damages phase, but infringement would already have been established. The growth of fair use, however, particularly but not solely through the “transformative use” doctrine and its accommodation of verbatim integral copying of works even for commercial purposes, leads to the systematic injection of a harm criterion in infringement litigation.
Arguably, the defendant still bears the burden of persuasion on this issue, but a review of the caselaw suggests that courts have in fact placed the burden on the plaintiff. For example, in Cambridge University Press v. Patton, the Eleventh Circuit, albeit finding the use (electronic “course reserves” consisting of excerpts from plaintiffs’ books) not “transformative,” ruled that the plaintiff’s failure to demonstrate that the use substituted for an actual licensing market would weight the assessment of fair use in the defendant’s favor.5 Denominating the purpose of the use “transformative” trips the burden shift because, as the Second Circuit has told us, a “transformative” use by its nature targets a market different from the plaintiff’s.6 If the plaintiff cannot persuade the court that the use invades or at least threatens an actual or imminent (not merely “prospective”) market, then the purpose’s “transformative” character will result in a ruling of non-infringement.
For example, in Perfect 10 v. Amazon,7 a controversy involving a search engine’s “highly transformative” indexing of photographs and display of thumbnail images, the court held that the plaintiff had not borne its burden of showing that the evolving market for paid downloads of thumbnail images onto cellphones, with which the defendant’s free thumbnails allegedly competed, was more than “hypothetical” (“Perfect 10 has not introduced evidence that Google’s thumbnails would harm Perfect 10’s existing or potential market for full-size images…. Weighing [Google’s] significant transformative use against the unproven use of Google’s thumbnails for cell phone downloads, and considering the other fair use factors, all in light of the purpose of copyright, we conclude that Google’s use of Perfect 10’s thumbnails is a fair use.”) Apparently reminded that fair use is an affirmative defense, and therefore that the defendant bears the burden with respect to market harm, the court reissued its opinion, acknowledging the placement of the burden,8 and deleting the phrase “Perfect 10 has not introduced evidence that Google’s thumbnails would harm Perfect 10’s existing or potential market for full-size images,”9 but leaving its fair use analysis (including the reference to “the unproven use of Google’s thumbnails for cell phone downloads”) unchanged.
The more “transformative” the appropriation, the less likely the plaintiff can prevail without proving harm, but the more “transformative” the appropriation, the more futile endeavors to show harm may prove.
New technological uses create new markets, so courts should not brush aside as “hypothetical” copyright owner contentions that the challenged use competes with an emerging market. Similarly, the tendency to dismiss claims of future lost licensing opportunities as “circular,” when the copyright owner has not yet developed the market,12 ignores the premise that markets generated from copying the work or communicating it to the public are copyright markets; there should be no “first entrant” exception allocating to the technological entrepreneur, or other user availing itself of that technology, the fruits of the uses the copyright-dependent technology made possible.
Equally importantly, non-economic concerns require full consideration. An author’s vision of her work may lead her to decline to enter certain markets, for example for sequels, or for audiovisual versions of literary works, or indeed to withhold the work from publication altogether. It does not follow that she incurs no “harm” if others enter a market she is unwilling to exploit.13 If she has chosen not to authorize certain exploitations, she may rank retaining control over the integrity of her creation more highly than the income foregone from undesired derivative exploitations. The Second Circuit has in the past acknowledged that “the copyright law must respect that creative and economic choice. ‘It would … not serve the ends of the Copyright Act – i.e., to advance the arts – if artists were denied their monopoly over derivative versions of their creative works merely because they made the artistic decision not to saturate those markets with variations of their original.’”14 Thus, the court has understood that the “harm” the author (and, ultimately, society at large) would incur were the law to override rather than to support her artistic choices belittles her authorship and discourages its undertaking. While some reformers assert that “the underlying purpose of the copyright grant is to reserve to the owner the right to earn money from commercial exploitation of the work,”15 copyright is about far more than economic gain and the commercial sphere.
The fundamental purpose of copyright is to foster an environment of respect – both material and moral – for authorship conducive to creative endeavors. Recognizing authors’ property rights in their creations favors the development and persistence of a culture of authorship. Subjecting authors’ rights to a proof-of-harm requirement clashes both philosophically and rhetorically with a property rights conception of copyright, and thus devalues authorship. Even were one to interpolate a harm criterion to qualify the property right, too cramped an understanding of the nature of the harm risks endangering the creative environment.
The framers of the Constitution were men to whom the right to hold property was enormously important. They were not far removed from Locke. His ideas pervaded their debates and decision. Property was seen not as opposed to liberty, but indispensable to it; for men with property would be independent of the power of the State, in that rough and tumble roiling of opinion and power which marks freedom….
By limiting potential rewards in the copyright market .. by … curtailing them in any way under arguments of “harm[,]” the entrepreneurial calculus which precedes risk taking in authorship and publishing is shifted in the direction of not taking a chance, i.e., not writing or publishing a “risky” work, whether ideologically or economically risky. Every limitation on copyright is a kind of rate setting. And however high minded, every person who thus sets rates applies a value judgment: how much the author or publisher should receive. Whoever makes this judgment regulates – i.e., controls – how successful a class of authors, works, or publishers shall be. This control of idea laden copyrighted works is more wisely left with the people than vested in … even a sincere judge searching a record for undefined harm….
While Ladd focused on the economic consequences of a “harm” predicate, the artistic and dignitary interests comprised within the “exclusive Right”17 prescribed by the framers also diminish if forced within a concept of “harm” and its concomitant prizing of market over non-material objectives.
* Many thanks to Lionel Bently, Herchel Smith Professor of Intellectual Property Law, University of Cambridge, and to June Besek, Executive Director, Kernochan Center for Law, Media & the Arts, Columbia Law School.
1. See, e.g., Pamela Samuelson and members of the Copyright Principles Project, “The Copyright Principles Project: Directions for Reform,” 25 Berkeley Tech. L. J. 1, 13 (2010) (recommending “that copyright owners be required to prove commercial harm when they make claims of infringement other than those involving exact or near-exact copies that operate in the same market as the allegedly infringed work”).
2. See, e.g., Harper & Row, Publrs. v. Nation Enters., 471 U.S. 539, 568 (1985) (“if the challenged use ‘should become widespread, it would adversely affect the potential market for the copyrighted work.’”).
3. A point recently underscored in Lenz v. Universal Music Corp., 801 F.3d 1126 (9th Cir. 2015).
4. For details of such a compromise, see Jane C. Ginsburg, “Fair Use: For Free or ‘Permitted But Paid’?”, 29 Berkeley Tech. L. J. 1383 (2014).
5.769 F.3d 1232 (11th Cir. 2014).
6. See, e.g., Cariou v. Prince, 714 F.3d 694 (2d Cir. 2013).
7. Perfect 10 v. Amazon, Inc., 508 F3d 1146, 1158 (9th Cir 2007; filed May 16, 2007, amended Dec. 3, 2007).
8. Compare original opinion (“Because Perfect 10 has the burden of showing a likelihood of success on the merits, the district court held that Perfect 10 also had the burden of demonstrating a likelihood of overcoming Google’s fair use defense under 17 U.S.C. § 107. [Citation omitted.] We have not previously ruled on this issue, [citation omitted], and we now agree with the district court’s ruling. In order to demonstrate its likely success on the merits, the moving party must necessarily demonstrate it will overcome defenses raised by the non-moving party.”) with amended opinion (“Because Perfect 10 has the burden of showing a likelihood of success on the merits, the district court held that Perfect 10 also had the burden of demonstrating a likelihood of overcoming Google’s fair use defense under 17 U.S.C. § 107. [Citation omitted.] This ruling was erroneous. At trial, the defendant in an infringement action bears the burden of proving fair use.”).
9. Compare original opinion (“Google’s use of thumbnails for search engine purposes is highly transformative. Because market harm cannot be presumed, and because Perfect 10 has not introduced evidence that Google’s thumbnails would harm Perfect 10’s existing or potential market for full-size images, we reject this argument.”) with amended opinion (“As previously discussed, Google’s use of thumbnails for search engine purposes is highly transformative, and so market harm cannot be presumed.”).
To similar effect, see, e.g., Authors Guild, Inc. v. HathiTrust, 755 F.3d 87, 99 (2d Cir. 2014) (“The Libraries contend that the full-text-search use poses no harm to any existing or potential traditional market and point to the fact that, in discovery, the Authors admitted that they were unable to identify ‘any specific, quantifiable past harm, or any documents relating to any such past harm,’ resulting from any of the Libraries’ uses of their works (including full-text search). [Citation omitted.] The district court agreed with this contention, as do we.”).
10. In addition to fair use, a showing of harm might be making its way to plaintiff’s case in chief through the eBay doctrine, in which the Supreme Court ruled that permanent injunctions should not automatically issue in cases of patent infringement, and therefore required a showing of irreparable harm. See eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006). The Second Circuit has held that issuance of a preliminary injunction in copyright cases also requires a showing of irreparable harm, see Salinger v. Colting, 607 F.3d 68 (2d Cir. 2010). A recent study of post-eBay copyright cases, however, indicates that, at least for now, eBay has not changed copyright courts’ readiness to enter preliminary or permanent injunctions (but that study does not detail the basis on which plaintiffs succeeded on the merits of the infringement claim, or demonstrated likelihood of success). See Jairui Liu, “Copyright Injunctions after eBay: An Empirical Study,” 16 Lewis & Clark L. Rev. 215 (2015).
11. While the Second Circuit in Authors Guild v. HathiTrust, supra, stated “the Factor Four analysis is concerned with only one type of economic injury to a copyright holder: the harm that results because the secondary use serves as a substitute for the original work.” 755 F.3d at 99, the court was distinguishing market-substitutional harm from market-“destroying” harm, such as might result from a devastating book review. The case did not raise the question of non-economic, or dignitary, harm to authors.
12. See, e.g., Cambridge University Press v. Patton, supra.
13. See, e.g., Castle Rock Entm’t, Inc. v. Carol Publ’g Grp., Inc., 150 F.3d 132 (2d Cir. 1998) (Jerry Seinfeld’s refusal to license a trivia quiz book did not make defendant’s unauthorized entry into that market a fair use).
14. Castle Rock, supra, 150 F.3d at 146, quoting the district court’s opinion (per then-Judge Sotomayor).
15. Copyright Principles Project, supra, at 37.
16. David Ladd, “The Harm of the Concept of Harm in Copyright,” 30 Journal of the Copyright Society 421 (1983).
17. U.S. Const. Art I, Sec. 8, Cl. 8.
By Jane C. Ginsburg|2018-07-03T17:17:57-04:00November 24th, 2015|Intellectual Property Issues|Comments Off on Copyright: No Longer a Property Right?

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