Saturday, January 28, 2006

A new justification for the derivative works right

Michael Abramowicz has written A Theory of Copyright's Derivative Right and Related Doctrines, 90 Minn. L. Rev. 317 (2005), offering a new justification for the derivative right: not that it offers a tiny increase in the incentive to create over and above the reproduction right, but that it serves to force product differentiation in the derivative markets. I was amused by "[without the derivative right,] it is certain that there would be many written adaptations of Harry Potter, as amateur authors presumably would create a large number of unauthorized sequels and adaptations to other cultural contexts." Because that surely doesn't happen now.

More generally, though Abramowicz's work is typically thorough, I'm not yet convinced that competition in the derivative markets is a bad thing. As Mark Lemley has pointed out, when people copy each other in the market for (unpatented) products like office supplies, we call it the free market; we don't think that forcing product differentiation so that only one producer can make paper clips is efficient, even if the result of the free-for-all is that lots of producers rush into the market and drive the product down to its marginal cost. In fact, that's kind of the point.

The product differentiation theory says works are worth more to consumers when they lack close substitutes, so the production of many similar derivative could be less valuable to consumers than the production of a variety of highly differentiated works. The empirics of this are unclear and my intuitions are that the derivative right does not add social value, in that I see network effects in fandom so that the production of hundreds of stories about one TV show creates more value (including the value of having a fan community in which enthusiasms are shared) than one story about each of a hundred shows, and I also think there's a special pleasure in fetishizing small differences, comparing different treatments of the same basic story - or collecting vegetarian cookbooks, to take one of Abramowicz's examples. Nonetheless, as Abramowicz acknowledges, even assuming that creative works benefit from not being clumped together, and that a derivative works right increases the average space between works, consumers might be better off if free competition drove the price of derivatives down.

My description of the theory suggests that, at least with respect to the highly creative works that tend to spark fan derivative works, the model needs to be modified to take into account fans who enter the "market" and distribute their works freely, as in the Harry Potter novel archive linked above. We can add in non-monetary prices, but I suspect it makes the whole thing much more complicated, especially since sellers of authorized derivative works want to be paid with money. Perhaps there's some work on open source versus proprietary source software that might provide some insights.

There's no such thing as a controlled experiment in copyright, but it might also be worthwhile to look at the spate of unauthorized derivatives of Uncle Tom's Cabin, Tom Sawyer and the like. Those derivatives didn't crowd out other, nonderivative works as far as I'm aware, nor do modern versions of Shakespeare dominate the Blockbuster shelves, suggesting that the product space for copyrighted works is broad enough to give us variety without needing an extra derivative right.

Maybe the real problem I have is with the idea that, if we can propose a detailed enough economic model, we'll know something useful about copyright scope - the difficulty, as with the difficulty in Judge Posner's detailed equation in Sex and Reason that purports to show whether or not abortion should be banned, is that we have no idea what the values of the variables are and no real hope of determining those values. Thus, as Abramowicz acknowledges, his theory shows that a derivative right might be a good idea and might not be. Perhaps the models are helpful if they get us to think about considerations that otherwise might just be unintended consequences - Abramowicz uses his model to argue that we should think about the reproduction right and derivative right separately, and even assign them different scopes, to take into account the difference between reproduction's plain incentive justification and the derivative right's more complex product differentiation justification.

I have of course given only the merest outline of Abramowicz's argument. Interested readers should definitely check it out. Unfortunately, it does not seem to be available at the journal's site or on SSRN.

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