Google Glasses: came with restrictions on use/resale.
Digital cameras have done this for years with ToS for the software embedded in
the cameras. You couldn’t have a use restriction on an analog camera, but the
restrictions seem to run with software embedded goods. Odd to have such a
difference v. chattels in general.
Why are servitudes disfavored? Chattels are smaller, mobile,
hard to distinguish/fungible. We can
glean how these differences, which are differences on balance rather than
differences in kind from land, change information costs. (1) Absolute cost of determining restrictions
on mug v. determining restrictions on use of land—you have to figure out if it’s
the same mug because placement isn’t certain. (2) Relative cost of determining
restrictions, given lower cost of many chattels. (3) Aggregate cost: we buy and use many more
chattels than pieces of land, and figuring it all out could take more bandwidth
than we have. Could have rules
distinguishing cars from other chattels, since we deal with fewer cars than
chattels generally. (But that piles on quickly.)
What should this say about software-embedded goods? We should
be suspicious especially as we move to the internet of things about unexpected
use restrictions.
Creepy and Orwellian world if all the things you own keep
track of where they are, which is what you’d need to change the difficulty of
identifying each object and making sure it’s the same.
Commentator: Miriam Bitton
Paper mentions decreasing information costs: chattel
registries for cars, registration for insurance purposes. (Nature of obligation: ownership interest is
the usual thing a registry has and the real property regime is pretty hostile
to use restrictions even when recorded.
And try to register a use restriction when you register the title of
your car; it won’t go well!) Other legal
systems don’t necessarily use the same land registry, which means that the
information cost theory has to be more attentive to differences (history, path
dependency?).
My reaction: note the literature on failures of notice in
consumer protection/nudging contexts—may further justify restrictions on what
kinds of limits can be written into the ToS.
Paul Heald: common-law cases finding nonpossessory security
interests in personal property are fraudulent.
The language of these cases is vitriolic. It’s fraud for the potential that the person granting the interest will sell off the
article, even if the person does nothing more.
Q: in practice, registries are replete with bad
recordkeeping, fraud, etc.; acknowledge that it’s a way to handle the
information problem but it doesn’t lower cost substantially especially as
contextual uses of objects change.
Q: another thing to look at is costs to judicial system:
were the servitudes really imposed or not. That may offer a difference between
built in and contractual restrictions.
Interesting discussion; I had to leave to ensure I was on
time for the next panel!
Wendy Gordon, Dissemination Must Serve Authors: How the US
Supreme Court Erred
Commentator: Rebecca Tushnet
In Eldred and then Golan, the Supreme Court accepted the
proposition that copyright expansion retrospectively extending the term and
clawing back certain works from the public domain could be justified not as
incentivizing authors, but rather as incentivizing certain distributors to
invest in distributing the newly repropertized works. Professor Gordon suggests that this conflicts
with a proper understanding of copyright’s author focus, not to mention with Feist’s insistence that creativity and
its support is the only appropriate justification for copyright rights.
If copyright is for authors, what led the Court and various
commentators into error? Gordon offers
three kinds of explanations grounded in economics, history (which I would call
politics), and law. Properly understood,
the assumptions of these arguments don’t justify a stand-alone embrace of
disseminator interests.
Economics starts with the idea that copyright makes
dissemination easier and more profitable, and you don’t get “progress” without
dissemination. I’ll return to this in a
bit because I think it’s the most important part of the argument, but let me
quickly sketch her other explanations.
The second explanation, history, is that publishers and other
distributors profit from copyright and therefore engage in extensive and
successful interest group politics to ensure that the law favors them. The third explanation is legal; Gordon argues
that it’s easy to mistake the form of copyright—distribution rights and a
special focus on publication, both of which make dissemination look
independently important—with copyright’s substance, which remains
author-focused. Both publication rules,
pre-1978, and the distribution right exist only in furtherance of the first, economic
objective: publication and distribution are key points at which legal support
may seem necessary to keep too much value from leaking out of the chain from
author to authorized publisher; without a distribution right, a reproduction
right would be toothless since third parties could make the reproductions and
then disappear.
Since the second, historical/political explanation for
publishers’ rights can have limited moral or conceptual force, and the third
legal explanation dovetails neatly with the first, economic explanation, I want
to return to the economic argument.
Gordon argues that authors of copyrightable works face a version of
Arrow’s information paradox. Unlike
inventors who might be able to keep processes and machines secret and still
derive value from them, authors generally can’t use their ideas and expression
without disclosing them. Because
disclosure is the only option, legal protections that substitute for other barriers
to copying encourage publishers to take the risk of paying authors for
permission. Gordon is skeptical that as
much encouragement is needed as it once was, but the point is that the
protections for publishers are dependent on the idea that we want authors to
get paid. Dissemination in itself is not
valuable—disseminating books and disseminating widgets both need to get done
for the economy to work, but that doesn’t mean that special legal protections
for book disseminators are justified, and indeed they have no special claim
compared to the claims of widget distributors.
Investment in advertising, selecting which products to offer, helping
consumers choose among their options, and distribution infrastructure are
required in all markets, and Gordon argues that special subsidies for these
common costs of doing business need justification beyond the idea of incentives
for creation.
Gordon engages in particular with Professor Jonathan
Barnett’s work, also presented here, that publishers make a unique and costly contribution
by evaluating and choosing which works to publish, and by using losers to
subsidize winners, “increasing the chances that the next, latent bestseller
will get the exposure it needs to take off.” If copiers can cherry-pick
winners, this strategy doesn’t work. As
Gordon points out, this argument is not expression-specific; indeed, it can be
recognized in INS v. AP and Doris Silk v. Cheney Bros. Gordon’s conceptual
point is that Barnett’s argument is at base still all about authors: all the
arguments about finding the next great American novel et cetera hinge on the
role of the individual creator awaiting discovery and subsidy.
She also has a related point about competition, prefigured
above: all businesses must search and sort.
And all businesses disclose, in some ways, the results of their
searching and sorting, at the very least through price signals—any business that has discovered a
profitable niche can be seen and competition is likely to enter to drive down
prices, unless the law prevents that. Non-authorial
contributions of distributors may well be extremely capital intensive. But Gordon points out that this proves little
without comparison to other industries, and other ways that capital needs might
be met.
One fruitful question for further discussion, it seems to
me, is whether competition is really the default, though, or whether we in fact
live in a world with barriers to entry that make competition a phenomenon on
the margins. Consider Amazon’s price
comparison app, which—quite relevant to Gordon’s argument—allowed consumers to
compare prices on books, lawn mowers, or anything else in a physical store also
sold through Amazon. Retailers complained that this harmed them by forcing them
to bear inventory and other costs that Amazon avoided, allowing Amazon to
compete on price only by free riding on these other stores. Is this any different from the free riding
publishers fear? And if it’s not, does
that prove that copyright is special pleading or that retailers need more
protection from internet free riders?
Yesterday, Barnett emphasized that are other possible
mechanisms to capture revenue, like lead time, but from an efficiency
perspective we shouldn’t just be trying to get a reasonable level of output; we
should get an optimal level of output, and for that, we don’t know whether lead
time advantage is sufficient. Without copyright, intermediaries have to choose
mechanisms like lead time. As I
understand Gordon’s point, it’s that if you’re serious about optimality, that
requires an assessment of the alternatives for capital investment, and if
copyright provides a method of capturing value that is unavailable to investors
in other industries, then you’ll see overinvestment in copyright
works/overproduction compared to the optimal result.
Gordon also makes a side point worth further discussion: the
“invest in the next big hit” justification needs some more refinement given
that big hits generally make almost all their money in a few months or a
year. Why copyright should persist
longer than that to subsidize publishers is less clear, certainly on a blanket
basis not requiring any renewal and allowing expansive rights over derivative
works.
Gordon concludes that “Only a comparative institutional
analysis can show whether disseminator industries need help that is more or
different than other industries need, and whether, if such help is needed,
copyright and its roughly 95 years of lead-time-advantage is really an
appropriate tool.” Again, I’d ask
whether this comparison is as dangerous to copyright-for-publishers as she
suggests: it’s not clear to me that there any low-IP mass industries left; our
examples of low-IP phenomena like tattoos and stand-up comedy are centered
around craft production—perhaps ironically, where the physical performance of a
particular authorial individual is important to the otuput. But these are the questions we need to be
asking: do disseminators of expressive works need anything special that
copyright provides, compared to disseminators of other things? Are there non-copyright ways—grounded perhaps
in competition policy—of providing what they might need? What are the costs of favoring disseminators,
especially in cases where there doesn’t seem to be a need to pay authors who
are creating things anyway?
Gordon’s own comments: paper has various things to say,
including explaining what common-law copyright was for (like trade secret) and
why it didn’t need to persist after the 1976 Act. Distribution right is a kind of specialized
secondary liability. Dissemination is a legitimate part of copyright policy,
but not disseminators. (Sounds to me like
the standard line about antitrust: the law protects competition, not
competitors.)
Publishers count, according to Golan, because they disseminate; she fears the next step that their
interests justify anything expansive. Holding makes disseminators’
self-interest hide under cloak of progress. Gordon believes dissemination must
aid authors to be constitutionally relevant.
Adam Mossoff argues that even if professors don’t need
copyright royalties, our publishers need them.
Her question is: does this mean that giving copyright to professors
serves publisher interests per se? The answer is clearly no. If copyright is needed for scholarly
publishers, and if professors need journals to gain reputation/flourish, then
copyright is only conditionally justified: it still has to be tied to
authors. Thought experiment: what if
journals perished? If there were other ways to get the job done, sorting for
quality, we shouldn’t care if journals died. If there aren’t other efficient
means, copyright should care: but that shows we only care about the incentives
of authors.
Balganesh: you’re arguing from purpose and structure. What
about copyright-like structures to further disseminators’ interests, such as
the Broadcast Treaty, with rights independent of right in the content of the
broadcast.
A: Jeanne Fromer explains Golan as the SCt’s desire to avoid the question of whether treaties
can bypass constitutional commands about progress. This reminds her of that. SCt is always using copyright this way—it’s a
garbage can. Given the presence of the
IP clause, there’s a tension—she thinks it would be improper to make IP-like
rights without limited times/creatorship or inventorship.
Q: how do you deal with Lady Gaga, who released Born this Way on video free to view
before she released the album—does she care about copyright?
A: sounds like advertising.
Q: celebrities may be able to ignore copyright/use network
effects. If this happens a lot, why
worry about intermediaries?
A: But advertising is consistent with the copyright
incentives for authors model. She does
think that incentives are overstated as justification for authors, given the
nonmonetary incentives.
Justin Hughes: Congress should be held to furthering
progress by means of authorial rights—do you mean that, or do you mean “when it
grants exclusive rights, they have to be to authors”? What happens when you subsidize authors with
NEH grants—would that be ok to further progress?
A: yes, of course—she’ll tweak the statement.
Q: what about the public?
Can we consider the benefits of preservation of works to the public?
A: what she fears isn’t so much that Congress will enact
things that aid dissemination, but that without the limitation she recommends
that Congress can do whatever it wants at the behest of disseminators, without
considering public interest. If we could get over the epistemic problems of
proof, and courts could see that parts of the argument were selfish and parts
in aid of distribution to the public, she’d be more sanguine.
Q: how does the progress clause do this work? This seems like a rational basis
problem. Congress says it’s trying to
help authors, even if academics disagree/don’t need copyright.
A: she’s undermining the stance she took in Fair Use as Market Failure, where she
proposed that any social benefit mattered.
She’s not sure how to square that with the idea that disseminator
interests of publishers shouldn’t matter, if dissemination interests of copiers
do matter (even if they’re just making pure copies).
Q: Arrow’s information paradox doesn’t engage directly with
copyright; why not point to Landes & Posner’s discussion instead?
A: They’re brilliant, but they’re completely unpersuasive
arguing that centralization is good for progress.
Ann Bartow: are there differences between Wikipedia and
Encyclopedia Britannica as disseminators; the latter edit/quality control.
A: to the extent they’re editing, they’re doing copyright
work, even though editors politely don’t claim copyright. Lots of intermediaries do creative things—colorization
of film, even. Treat them as authors
when they’re doing that sort of work.
Posts
No comments:
Post a Comment