IPSC session 8

Invention/ Teaching
Eric E. Johnson, University of North Dakota School of Law, Intellectual Property and the Incentive Fallacy

IP is nonexcludable and nonrival. Presumption that people need incentives. Rejected by controlled experiments, empirical historical research, etc. There is inherent motivation to engage in creative and innovative activity and share that without the necessity of external incentives. The theory behind the public goods idea of “promoting the progress” needs to be replaced with post-classical economics. We know more about physics than we did in the 18th century; likewise economics.

Note that history of copyright is not one of promotion, rather of aid of censorship; letters patent were designed to provide monopolies (and promote tech transfer from other countries). The d’etre came before the raison. Copyright and patent theory formed from what was left after destroying royal monopoly/censorship.

Research: reward effects in experiments show that tangible rewards (IP, government awards) have a substantially negative effect on instrumental motivation. People lose excitement and vitality. Wasn’t talking about IP specifically, but is a psychological truth. Compensation doesn’t solve a problem in this account, it is a problem. People want to engage in activities because they are interesting and evolving. Art Institute of Chicago: extrinsic motivation was negatively correlated with career success 20 years down the line.

Kind cite to my piece on noneconomic motivations. Public goods problem is not the general condition. Large capital investments are no longer needed to publish. Stock photo market has changed: prices have collapsed, and now you can get a stock photo for $.14, and photographers get only a portion of this—cannot be explained by classical theory. Many are intrinsically motivated to create. One guy received $30 for having his photo appear on the cover of Time.

Exceptions to the classical rule now swallow the rule. Innovation and creative production will generally flourish without external incentives, though there are exceptions.

Big problem: the problem of the firm—large organizations working together to create creative products. Even there, except for a few industries, IP doesn’t have much effect.

Prescriptions for scholarship: A general appeal to the public goods problem commits a fallacy. We cannot expect that more rights means more stuff. For policy: copyright and patent should be sunsetted to the extent they’re based on incentive theory. We should look at industries/situations case by case.

Q: how do people create and earn enough to live on through creating, as opposed to during their free time? He grew the most as a musician when he was doing it professionally, when he could invest. Well-meaning amateurs aren’t enough.

A: that ought to be the default. It may be that industries need incentive effects.

Grimmelman: noncommercial systems can flourish without copyright, but how do we get animation studios? Voluntary creativity is easier in a world with copyright than vice versa.

A: copyright and patent create losses as well. Individual opt-out is not enough.

Grimmelman: then individual content will just outcompete the paid stuff—the amateurs undercut the professional photographers.

A: putting aside whether competition covers the losses incurred by copyright/patent, there is a crowding out effect. Compensating people can decrease their motivation to engage. (I thought there was some evidence that the kind of compensation matters, which has serious implications for patronage v. copyright.)

Q: lots of people engage in amateur sports but they’re better at it if they get paid. I pay to run in the Boston Marathon, but we should still seek to compensate people at the high quality end.

A: he agrees, and he can’t say we’d get all we wanted without copyright. But the belief that creative works require external incentives is just false. Yes, people need to eat, but a lot of people who create art for free do eat. (Look at me!)

Q: some things can be done in spare time, and some can’t.

A: agrees, and his point is that we’ve regarded the public goods problem as the central truth, but it’s not.

Q: lost first mover advantage in the digital environment.

A: yet amateur digital content is exploding.

IP Clause and 1st Amendment

David Ardia, University of North Carolina - Chapel Hill School of Law, Speech Unjoined

Libel plaintiffs have long been allowed only monetary remedies, not injunctions. Injunctions are presumptively unconstitutional as prior restraints. Is this true/good doctrine today? Recent decisions by lower courts have approved injunctions, and this is particularly important for online defamation. Concludes that limited injunctive relief may be appropriate for fully adjudicated matters of private concern found to be defamatory—challenges in structuring a remedy that would be effective.

Prior restraint: prior to what? Consensus appears to be that the doctrine is primarily implicated when the restriction is imposed prior to public dissemination. Some scholars say you have to distinguish between prior and subsequent sanctions, others say the First Amendment is just as concerned with subsequent punishments. Subsequent punishments can dissuade speech as well. But it feels different. A free society prefers to punish the few who abuse the liberty rather than throttle people generally.

Not retracing ground excellently covered by Lemley & Volokh in their article on preliminary injunctions; he wants to think about permanent injunctions. How the doctrine should function: partially litigated prior restraints (preliminary injunctions) never allowed in defamation cases. Fully litigated prior restraints presumptively unconstitutional—Near v. Minnesota said something like troop movements would be an exception. Partially litigated post-publication restraints are likely unconstitutional, though there’s little precedent. But fully litigated post-publication restraints are where the questions are; the Supreme Court has never weighed in.

Problems of overbreadth or underinclusiveness. Even if drafted well, there’s leakage—other blogs might pick up the statement. Time and context also affect whether something is defamatory. Procedural protections for criminal/civil sanctions are less—an enjoined party is collaterally barred from challenging the underlying law, so they can’t defend the statement, only deny saying it.

California SCt held that a narrowly tailored injunction against particular continuing course of speech was acceptable (woman making claims about a bar across the street from her, that it served minors and hosted prostitutes).

Pretty good argument that speech online is irreparable. Echoes of defamation persist. Many defendants are judgment-proof, at least that’s what people believe, though it’s not clear what the empirics are. Old case: plaintiff’s argument that it should get an injunction because the defendant was destitute was rejected.

Liability is disaggregated online, both through publisher/distributor liability and through §230. All of this makes it difficult to think about effective remedies.

Solution: Injunctive relief should be permitted in some cases after final judgment. Relates to matter of private concern (wouldn’t apply to public figures); narrowly tailored; injunction is reparative; no collateral bar rule in enforcement proceedings; no injunctions directed at future speech like “obey the law” or directed at broad subject matter.

Should it be applicable to third parties? Without that, it might not be effective. But with that, it creates significant problems. RipoffReport won’t take down your content even if you ask/even if it’s been found defamatory.

Heymann: How would narrow tailoring work? Isn’t that just a game of whack-a-mole? Is there a substantial similarity analysis?

A: this is often an issue; courts do put an injunction in “similar” terms, but his proposal wouldn’t cover that. Injunction can only require removal, not bar repetition.

Felix Wu: with such a narrow remedy, what’s the harm in applying it to third parties? If we’re worried about speech interests of public at large, then it’s not really going to matter who you apply this injunction to.

A: that’s more or less where he comes down. But implementation is a challenge. Often p sues and d defaults. P goes to online host with default judgment. His §230 study suggests that most hosts take that material down. But what do you do if the host won’t? If the incentive for the p is to sue in a remote jurisdiction, do we allow default judgments to count here? His tentative answer is no.

Ramsey: Third parties should never have monitoring duties. Put the burden on plaintiff to notify third party.

A: General knowledge, already taken care of by §230. Notice of a judgment can be very important for an intermediary, though: onus on plaintiff to notify as to the exact words; this allows d to evade.

My q: why exclude public figures/substantially similar statements? Why would either of those things be entailed by the considerations you focus on? Why not be willing to put liability on the individual (including for saying substantially similar things) and then not put duties on the intermediary? If you say the intermediary could be liable for failing to remove content, you are either saying that (1) the circumstances described satisfy the malice requirement as to the intermediary; perhaps notice of the judgment means the intermediary satisfies the malice standard, which is a possibility, or (2) malice is no longer required.

A: That is the key issue.

Marc H. Greenberg, Golden Gate University School of Law, Comics, Courts and Controversy: A Case Study of the Comic Book Legal Defense Fund

The project is under revision; will look at copyright termination and derivative works issues, including Roy Lichtenstein’s appropriation of romance comics from the 1950s and later deal-cutting with the copyright owners.

Definitional: calling the material comics. A vast majority of the material isn’t funny. First comic books in the US were bound versions of Sunday funnies. This is important because it set a concept/tone in public perception that these are literary works for kids, meaning we should scrutinize them to make sure they’re not bad for kids.

Better term: sequential art. Telling stories through visual/sequential medium. Error in definition led us to suppressing horror comics. Appealing to audience of 10-year-old boys (do we know this from any reliable empirics? People make those claims about anime/manga in the US, ignoring all the women/girl fans). Error in attributing juvenile delinquency to comics because delinquents, like all other kids, read comics.

Comics Code suppressed horror, other things. 1960s gave rise to underground comix, with a lot of explicit sex. Art Crumb, Art Spiegelman, etc. Were prosecuted as obscene works. This led to the foundation of the Comic Book Legal Defense Fund. Cases brought against comic book dealers threatening them with hard time. Christopher Handley case: described as traditional geek who lives in mom’s basement; his hobbies are church and reading manga. He read hentai (explicit sexual comics with young girls). He ordered some. Despite Stanley v. Georgia, saying you have the right to have obscene materials in your own home, it’s not lawful to transport the obscenity to your home. You have to create your own obscenity!

Postal inspector was tipped off, opened the package, and Handley was arrested under the PROTECT Act. This came after the Ashcroft case invalidating the virtual child porn offenses (not featuring real children). Congress passed a new law saying that if you have a obscene graphic depiction that appears to be children engaged in sex, you can get 5 years for a first offense. Handley argued Stanley v. Georgia, but the court said he was transporting it. How do you know the children are under 18? They are a drawing, not an 18-year-old dressed to look 15. It’s a drawing. Unsuccessful on a motion to dismiss. Handley plea bargained to 6 months in prison, 1200 manga seized (7 were the subject of prosecution). CBLDF is concerned about First Amendment implications.

Obscene materials are not protected under the First Amendment, so prosecution argues that all it needs is some justification for going forward. But is obscenity really outside the First Amendment? If we can’t define it with certainty, we can’t say it’s outside the First Amendment. Also, the causal link to harm simply isn’t there. Study after study concluded that, if anything is harmful, it’s violence. But the SCt says that violence is okay. Should back off from prosecuting when there is no person involved.

Ramsey: gateway drug—if people like graphic depictions, they might go to actual child porn. Can’t the government decide to ban the gateway?

A: The counter is the catharsis effect—presence of this material, particularly when you don’t exploit any humans, provides a way to prevent actual conduct. In Japan, which has a high concentration of violent explicit sexual material in cartoons, has one of the lowest rape rates in the developed world. State by state comparisons in the US also find no correlation—no evidence of causation from the presence of this material.

Hughes: Why not download it?

A: you can do that. CBLDF is now defending a case where a guy had material on his laptop and was crossing the border.

Q: politics—this is a way of scoring easy points. What’s the political economy?

A: right, we don’t have an effective lobby of producers of graphic sexual material. Courts are the only recourse. If what we’re really talking about is something we find socially disturbing, we fine it/put the seller out of business. The penalties are so disproportionate, especially in graphic cases not involving photographs.

Hughes: why doesn’t the CBLDF advise comic book artists to establish a character log with an age given? Equivalent to the filed ID in porn.

A: difficulty in contrast to live models is that ID proves something with live models. With graphics it becomes a jury question. This came up in one of the cases: jury was instructed to use its own perception.

Hughes: courts should give weight to authorial intent.

Rosenblatt: one of the cases—the images depicted were of a well-known character who’s 3000 years old.

A: but the reaction of the prosecutors has been “it looks like a child.”

And that’s it. Thanks to the organizers for another great event!