Copyright and A Democratic Civil Society, by Neil Weinstock

Re: Copyright and A Democratic Civil Society, by Neil Weinst

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Part 4 of 4

[333] By the end of the eighteenth century, the audience for print appears to have comprised the majority of U.S. citizens. See WARNER, supra note 318, at 14. The question of the size of the early print public has preoccupied numerous historians and remains a matter of some controversy. See DAVIDSON, supra note 55, at 55-61; THOMPSON, supra note 280, at 59; WARNER, supra note 318, at 14. Although some such studies are based on evidence of book ownership or writing skills, other historians point out that many persons in the eighteenth century could read, but not write, and that many who could not read, regularly listened as printed materials were read out loud in family, church, and social gatherings. See THOMPSON, supra note 280, at 60; see also KEANE, supra note 282, at 28 n.23 (depicting collective reading groups as "seedbed of revolutionary ideas and democratic forms of life" in eighteenth-century Germany and France). While most persons could not afford to purchase more than a book or two until well into the nineteenth century, libraries were a common and heavily used means of book circulation in the early years of the American republic. See DAVIDSON, supra note 55, at 27-28. Moreover, most eighteenth-century white Americans had ready access to newspapers, broadsides, and other print material. Not surprisingly, the reading public in late eighteenth-century America generally excluded black slaves (for whom it was illegal to read or write) and Native Americans. See id. at 56; WARNER, supra note 318, at 11.

[334] Schudson, supra note 332, at 151 (quoting Thomas Paine, quoted in ERIC FONER, TOM PAINE AND REVOLUTIONARY AMERICA 83 (1976)). Not surprisingly, Paine was an outspoken advocate for according statutory copyright protection to authors. See TEBBEL, supra note 325, at 138.

[335] ZIFF, supra note 323, at 52 (quoting SAMUEL MILLER, A BRIEF RETROSPECT OF THE EIGHTEENTH CENTURY (New York, T. & J. Swords 1803)); see also JAMES RALPH, THE CASE OF AUTHORS BY PROFESSION OR TRADE (facsimile 1966) (1758) (defending professional authors against charges of venality, but conceding that much commercial literature is of low quality).

[336] See WARNER, supra note 318, at 124-25. Typical of this widely held view was the paean to the power of print in the inaugural issue of the New-York Magazine, published in 1790, the same year that Congress enacted the first federal copyright statute: Those institutions are the most effectual guards to public liberty which diffuse the rudiments of literature among a people . . . . A few incautious expressions in our constitution, or a few salaries of office too great for the contracted feelings of those who do not know the worth of merit and integrity, can never injure the United States, while literature is generally diffused, and the plain citizen and planter reads and judges for himself. WARNER, supra note 318, at 125 (quoting On the Means of Preserving Public Liberty, NEW-YORK MAG., Jan. 1790). The view of print, literacy, and the diffusion of knowledge as a pillar of democratic governance was shared by federalist and antifederalist, political elite and artisan, alike. See id. at 122-32.

[337] See WARNER, supra note 318, at 71, 122-32.

[338] Copyright was not the only mechanism by which the Framers sought to achieve a national market for authors' writings. The new federal government also heavily subsidized newspaper deliveries by imposing preferential postal rates, levying postal charges on subscribers rather than printers, intermittently collecting subscribers' postal charges, providing free newspaper delivery among printers, and maintaining postal roads for both post office and printers' private use. See Kielbowicz, supra note 325, at 257-59, 266, 275. The importance of transportation networks for the diffusion of knowledge (as well, of course, for other national political and economic objectives) also received expression in the Copyright Act of 1790, which accorded protection not only to books, but also to maps and navigational charts. See Act of May 31, 1790, ch. 15, § 1, 1 Stat. 124, 124.

[339] UNITED STATES COPYRIGHT OFFICE, COPYRIGHT IN CONGRESS 1789-1904, COPYRIGHT OFFICE BULLETIN NO. 8, 115-16 (T. Solverg ed., 1905) (quoting U.S. Senate Journal, 1st Cong. 102-04).

[340] See DAVIDSON, supra note 55, at 16-30 (describing emerging, but uneven market economy of book publishing in early national period); LUCAS A. POWE, JR., THE FOURTH ESTATE AND THE CONSTITUTION: FREEDOM OF THE PRESS IN AMERICA 28-29 (1991) (depicting transformation of eighteenth-century press); WARNER, supra note 318, at 67-70 (discussing manner in which printers, whose economic viability was threatened by Stamp Tax, successfully galvanized public opinion against Tax by emphasizing that it was affront to liberty of press). Government contract did not cease to become a major source of business for early national printers. But it represented only a portion of that business, and the struggling new government was just as reliant on printers for the printing of money, laws, tracts, and official proclamations as were printers on government revenues. See DAVIDSON, supra note 55, at 21; POWE, supra, at 28-29.

[341] See infra note 346.

[342] See DAVIDSON, supra note 55, at 40-42 (describing Framers' censure of fiction); CASS R. SUNSTEIN, THE PARTIAL CONSTITUTION 20-24 (1993) (discussing Framers' efforts to contain factions).

[343] See, e.g., BAKER, supra note 295; Fiss, supra note 295, at 787-88.

[344] JEFFREY A. SMITH, PRINTERS AND PRESS FREEDOM: THE IDEOLOGY OF EARLY AMERICAN JOURNALISM 50 (1988).

[345] Democratic governments regularly provide direct and indirect subsidies for various forms of cultural expression, ranging from individual grants to the funding of public broadcasting. See Throsby, supra note 241, at 20-22. They also commonly impose selective restrictions on cultural industry structure and expressive content, including limitations on ownership concentration and requirements for a minimum amount of public affairs programming and domestic production. See generally ERIC BARENDT, BROADCASTING LAW: A COMPARATIVE STUDY (1993) (surveying broadcast regulation in Great Britain, France, Germany, Italy, and United States). On the benefits for a democratic society of government subsidization of speech, see Martin H. Redish & Daryl I. Kessler, Government Subsidies and Free Expression, 80 MINN. L. REV. 543, 560-62 (1996); see also SUNSTEIN, supra note 312, at 17-51 (calling for "New Deal for Speech," involving selective regulation and subsidy, to promote greater media coverage of public issues and greater public exposure to diverse views).

[346] See Redish & Kessler, supra note 345, at 562-63; see also LUCAS A. POWE, AMERICAN BROADCASTING AND THE FIRST AMENDMENT 108-61 (1987) (detailing repeated political favoritism in FCC regulation of broadcast media).

[347] For an intriguing "public service model" of communications, centered in the development of pluralist, nonstate, but not fully market-based communications systems, see KEANE, supra note 282, at 150-62.

[348] See, e.g., CRANE, supra note 244, at 151-52 (canvassing studies); ROSANNE MARTORELLA, CORPORATE ART 67-91, 98-102, 179-83 (1990); Victoria D. Alexander, Pictures at an Exhibition: Conflicting Pressures in Museums and the Display of Art, 101 AM. J. SOC. 797, 801-02, 822 (1996) (discussing conflicting pressures placed on museums to display various kinds of art by different social groups).

[349] See Hamilton, supra note 306, at 115.

[350] See supra text accompanying notes 243-44.

[351] See CRANE, supra note 244, at 57, 59-60 (discussing continued contribution of independent recording and film companies in face of increased concentration and domination of major studios); DiMaggio, supra note 244, at 440 (discussing role of independent media firms in producing innovative products).

[352] See Elkin-Koren, supra note 40, at 256-58; Volokh, supra note 21, at 1836-38.

[353] See, e.g., Barlow, supra note 21, at 128-29; Dyson, supra note 21, at 137-38. For what, to my mind, is an overly sanguine view of this possible development, see Jessica Litman, Revising Copyright Law for the Information Age, 75 OR. L. REV. 19, 29 (1996) (questioning necessity of copyright incentive given content provider ability to find different ways of charging for value, including advertising and complementary services); Tom Palmer, Intellectual Property: A Non-Posnerian Law and Economics Approach, 12 HAMLINE L. REV. 261, 289-91 (1989) (same).

[354] For examples and discussion, see BAKER, supra note 295, at 62-69; MICHAEL SCHUDSON, ADVERTISING, THE UNEASY PERSUASION 209-18 (1984); Les Brown, Sponsors and Documentaries, in THE COMMERCIAL CONNECTION: ADVERTISING AND THE AMERICAN MASS MEDIA 265 (1979).

[355] See TODD GITLIN, INSIDE PRIME TIME 208 (1983) (noting that advertising agencies began focussing on audience composition in early 1970s); OWEN & WILDMAN, supra note 243, at 3-4 (discussing creation of target audiences by broadcasters).

[356] See OWEN & WILDMAN, supra note 243, at 101-50 (noting that content providers' congenital bias against minority tastes and in favor of large audiences' tastes is exacerbated in media characterized by firm concentration and in media supported by advertising).

[357] Cf. Margaret Jane Radin, Property Evolving in Cyberspace, 15 J.L. & COM. 509, 521-22 (1996) (labelling as "dystopic commodified vision" replacement of copyright with digital fusion of content and advertising).

[358] See supra Section I.A.

[359] See, e.g., Doreen Carvajal, What Is a Book Publisher to Do When a Parody Hits Home?, N.Y. TIMES, Feb. 12, 1996, at D1 (reporting that Crown Publishers cancelled contract to publish book that spoofed works of another, more popular author, also published by Crown); see also Campbell v. Acuff-Rose Music, Inc., 114 S. Ct. 1164 (1994) (confronting action by music publisher to enjoin rap parody of song in its repertoire after refusing to license parody); Walt Disney Prods. v. Air Pirates, 581 F.2d 751 (9th Cir. 1978) (confronting action brought by Disney to enjoin parody of Disney characters in counterculture comic book).

[360] See supra note 42.

[361] See Walt Disney, 581 F.2d 751; Rosemary J. Coombe, Objects of Property and Subjects of Politics: Intellectual Property Laws and Democratic Dialogue, 69 TEX. L. REV. 1853, 1865 (1991) (discussing Black Bart Simpson phenomenon).

[362] See supra note 240.

[363] On the importance of maintaining a vibrant public domain, see generally Litman, supra note 9.

[364] See infra Section V.D.

[365] See Ginsburg, supra note 3, at 1466-69 (discussing potential uses of digital networks and need for new understanding of copyright); Volokh, supra note 21, at 1808-31 (discussing changes in various media resulting from digital technology).

[366] See Elkin-Koren, supra note 3, at 401-04 (noting that digital networks may weaken or transform intermediaries who previously controlled information).

[367] See, e.g., id.; Howard Frederick, Computer Networks and the Emergence of Global Civil Society, in GLOBAL NETWORKS: COMPUTERS AND INTERNATIONAL COMMUNICATION 283, 283-95 (Linda M. Harasim ed., 1993) (discussing growth of nongovernmental organizations, peace movements, human rights groups, and environmental preservation societies resulting from computer networking).

[368] See Frederick, supra note 367, at 294 (stating that purpose of new allied computer networks is to circumvent information monopolies).

[369] See Elkin-Koren, supra note 40, at 236-67 (discussing ways in which digital networks may decentralize meaning-making process and enhance ability of individuals to participate effectively in social dialogue). See generally Volokh, supra note 21 (predicting that digital distribution will usher in era of "cheap speech," which will liberate authors and audiences from mass media content selection and, largely as consequence, will undermine arguments for government regulation of speech).

[370] See, e.g., Barlow, supra note 21, at 85-86, 89-90 (arguing that copyright law was developed to convey forms and methods of expression entirely different from digitized medium and favoring system that puts fewer constraints on circulation and modification of expression in digital network environments); Lange, supra note 9, at 140-47 (discussing role of premodern origins of copyright in restricting dissent and new technological challenges to copyright and ideas of authorship); see also Elkin-Koren, supra note 40, at 268 (arguing that employing copyright in its present form may diminish Internet's capacity to decentralize social dialogue).

[371] See supra Part I.

[372] See supra Section I.A.

[373] See Act of May 31, 1790, ch. 15, § 1, 1 Stat. 124, 124.

[374] See Act of Mar. 4, 1909, ch. 320, § 24, 35 Stat. 1075, 1080-81. A Copyright Office study of the copyright renewal, completed in 1960, found that only about 15% of subsisting copyrights were being renewed. See Barbara A. Ringer, Renewal of Copyright, in 1 COPYRIGHT SOCIETY OF THE UNITED STATES, STUDIES ON COPYRIGHT 503, 617 (Fisher Mem. ed. 1963).

[375] Copyright Act of 1976, 17 U.S.C. § 302(a) (1994). Different terms apply to works created but not published or copyrighted before January 1, 1978, the effective date of the 1976 Act, and to works in which copyright already subsisted on that date. Id. §§ 303-04. In addition, in 1992 Congress effectively lengthened the copyright term for many works created before 1978 by making copyright renewal automatic. The Copyright Renewal Act of 1992, Pub. L. No. 102-307, tit. I, § 102(a), (d), 106 Stat. 264, 266 (codified as amended at 17 U.S.C. § 304(a), (c) (1994)).

[376] See H.R. 989, 104th Cong. (1995); S. 483, 104th Cong. (1995).

[377] The 1976 copyright revision was designed in part to pave the way for accession to the Berne Convention, which provides for a general term of protection of the life of the author plus 50 years. See Berne Convention for the Protection of Literary and Artistic Works (Paris Act, 1971), Art. 7(1) [hereinafter Berne Convention]. The Berne term was nonmandatory until the Brussels Revision of the Berne Convention in 1948. See Sam Ricketson, The Copyright Term, 23 INT'L REV. INDUS. PROP. & COPYRIGHT L. 753, 778, 783 (1992). More recently, the Agreement on Trade Related Aspects of Intellectual Property Rights, TRIPs, supra note 63, finalized in 1994 as part of the agreement amending the General Agreement on Tariffs and Trade (GATT), requires all members of the World Trade Organization (WTO) to comply with the minimum terms of protection set out in the Berne Convention, whether or not such countries are signatories of Berne. See id. art. 9, at 415. In addition, under the so-called "Rule of the Shorter Term," in effect in many countries and encouraged by Article 7(8) of the Berne Convention, copyright protection is extended to foreign works only for the shorter of the term accorded in the country of origin or the term accorded to domestic works in the country applying the Rule. Under the Rule, American works enjoyed protection in most European countries for only 56 years, while domestic works were protected for the life of the author, plus 50 years, or, in the case of Germany, beginning in 1965, for the life of the author, plus 70 years. More recently, in order to achieve greater harmony among the copyright regimes of its member states, the European Union has directed its member states to enact copyright terms equivalent to that of Germany, the life of the author plus 70 years, and to apply the Rule of the Shorter Term to non-Union works. See Council Directive 93/98, arts. 1, 7, 1993 O.J. (L 290) 9, reprinted in SWEET & MAXWELL'S E.C. INTELLECTUAL PROPERTY MATERIALS 29-34 (Anna Booy & Audrey Horton eds., 1994). The directive has, in turn, sparked moves in Congress to increase the length of protection in the United States as well. See Copyright Term Extension Act of 1995: Hearings on H.R. 989 Before the Subcomm. on Courts and Intellectual Property, 104th Cong. (1995) (statement of Rep. Moorhead).

[378] See SAM RICKETSON, THE BERNE CONVENTION FOR THE PROTECTION OF LITERARY AND ARTISTIC WORKS: 1886-1986, at 323 (1987).

[379] The European authors' rights tradition distinguishes between those works that emanate from individual creativity and those that are seen as less creative or more corporate endeavors, with the latter often being protected under noncopyright "neighboring right" regimes. Reflecting this distinction, the Berne Convention and the Rome Convention (which governs certain neighboring rights) set the minimum terms of protection for photographers, film producers, creators of applied art, television broadcasters, sound recording producers, and performers at periods ranging from 20 to 50 years from publication, creation or fixation, as the case may be. See Berne Convention, supra note 377, art. 7; International Convention for the Protection of Performers, Producers of Phonograms, and Broadcasting Organizations at Rome, Italy, Oct. 26, 1961, 496 U.N.T.S. 43, art. 14 [hereinafter Rome Convention]. The EU Directive similarly provides for a 50-year term for performers, sound recording producers, film producers, and broadcasters and confers a 70-year term upon collective and corporate works. These periods are all shorter than the life-plus-50 and 75-from-publication or 100-from-creation terms conferred under the U.S. Copyright Act, as are the periods of protection for such works required under the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPs), which came into force in 1994. See TRIPs, supra note 63, art. 99 (incorporating minimum terms of Berne Convention with respect to most works of individual authors); id. art. 12, at 415-16 (providing for minimum 50-year term for works of authorship, other than photographs or applied art, term of which is calculated other than by reference to life of natural person); id. art. 14(5), at 415 (providing for 50-year minimum term of protection for performers and sound recording producers and 20-year minimum term of protection for broadcasters). Moreover, the proposed Copyright Term Extension Act, with its 95-year term for works made for hire, would heighten this disparity.

[380] Section 1101 was added to the Copyright Act on December 8, 1994, pursuant to the requirement set forth in Article 14(1) of TRIPs that performers be accorded exclusive rights of fixation, reproduction and transmission of their performances. See TRIPs, supra note 63, art. 14(1).

[381] See, e.g., Landes & Posner, supra note 144, at 361-62 (suggesting that, aside from positive tracing costs, which need not pose any serious problem, there is no reason in principle to limit copyright term); cf. Easterbrook, supra note 8, at 111 n.7 (justifying copyright's long term on principle that intellectual property should be treated just like physical property absent strategic bargaining and tracing problems that might arise from exclusive right to ideas); Meiners & Staaf, supra note 117, at 924 (suggesting, on basis of neoclassicist property theory, that duration of patent rights should be perpetual like duration of title to land).

[382] Accordingly, a neoclassicist would see no more reason to withdraw protection from such works than to require that the property right in a dime store pen be automatically extinguished when the pen has run out of ink.

[383] See Landes & Posner, supra note 144, at 361-62 (citing positive tracing costs as possible justification for limiting copyright term).

[384] Computerized systems are already in place in some contexts. For example, the Copyright Office has initiated a project to enhance its online database of copyright registrations to include information about obtaining licenses and to provide for an online clearance procedure that would make it possible for users to ascertain the status and ownership of a work, to obtain permission to use the work, and to pay for the use. See U.S. Copyright Office, Copyright Office Electronic Registration, Recordation & Deposit System (visited Aug. 31, 1996). Likewise, the Copyright Clearance Center and a number of technology companies, digital content providers, and computer network service providers have formed the "Electronic Rights Management Group" with the intent to promote widescale electronic clearance, per-use billing, encryption, and tracking for content that is available over digital networks. See Copyright Clearance Ctr., Inc., Press Release, Information Industry Leaders Form Electronic Rights Management Group to Foster Commerce on the Internet, Oct. 31, 1995 (on file with author).

[385] See Nimmer, supra note 47, at 1416; Ricketson, supra note , at 783-84.

[386] While it might be desirable, in theory, to amend the Copyright Act to shorten the basic copyright term, such a step would be exceedingly difficult to achieve in practice, since, in addition to having to overcome domestic copyright industry opposition, it would run afoul of the current term of protection requirements of TRIPs and the Berne Convention. See supra note 379.

[387] The United Kingdom accords publishers of new editions a 25-year right to prevent unauthorized facsimile copies of the typographical arrangement of said editions. See Copyright, Designs and Patents Act 1988, §§ 1(c), 15, 17(5) (Eng.).

[388] Given the considerable expense of converting hard copy works to digital format, it is unlikely, at least in the near term, that more than a small percentage of hard copy collections will be so converted. See CRAWFORD & GORMAN, supra note 21, at 90-96 (discussing high cost of digital conversion and dispelling notion that all or substantial portion of hard copy collections will be converted to "virtual library"). Nevertheless, the Library of Congress recently initiated a five-year program to digitize five million items from its collection, at a projected cost of $60 million, or an average of $12 per item. See Terry Pristin, Selling History, Reel to Reel, to Today's Media, N.Y. TIMES, Oct. 9, 1995, at D1.

[389] See CRAWFORD & GORMAN, supra note 21, at 29-30 (noting cost savings from electronic distribution of up to 30% for a hardbound book, but questioning whether that represents sufficient portion of hard copy publishing and distribution costs to represent "major savings").

[390] To the extent they recognize the need for copyright at all, minimalists tend to favor a short term of protection. James Boyle, for example, proposes that copyright should last for only 20 years. See BOYLE, supra note 97, at 172. On the other hand, Professor Boyle expresses support for sui generis intellectual property regimes for information products. See id. at 170-72. This might lead him to consider favorably my proposal for a short-term digital publisher's right.

[391] The Copyright Act, 17 U.S.C. § 106 (1994), accords copyright owners with a specified bundle of exclusive rights, including the rights to reproduce the work, to prepare derivative works, to distribute copies or phonorecords to the public, to perform the work publicly, and to display the work publicly. Uses like reading a book, listening to the radio, or singing a song in the shower, that do not fall within the scope of any of these rights, are not infringements. Other uses, like hand copying portions of a copyrighted article or loudly playing a portable cassette player in the park, do run afoul of the owner's rights but are generally deemed to constitute de minimis or fair use. See 2 NIMMER ON COPYRIGHT, supra note 56, § 8.01[G], at 8-25.

[392] See MAI Sys. Corp. v. Peak Computer, Inc., 991 F.2d 511, 519 (9th Cir. 1993) (holding that loading of computer software into RAM creates "a copy").

[393] See NII WHITE PAPER, supra note 6, at 64-66.

[394] See supra note 65.

[395] See supra note 64. Similarly, making a copyrighted film or song available for serial online viewing or listening would likely fall within the copyright owner's exclusive right of public performance. See Columbia Pictures Indus. v. Redd Horne, Inc., 749 F.2d 154 (3d Cir. 1984) (holding that video store operator infringed public performance right when he rented motion picture tapes to customers and provided semi-private rooms where tapes could be viewed); On Command Video Corp. v. Columbia Pictures Indus., 777 F. Supp. 787 (N.D. Cal. 1991) (holding that hotel movie viewing system that allowed guests to view movies in their rooms by selecting tapes to be played on remote-controlled console in hotel basement infringed public performance right).

[396] See, e.g., Hardy, supra note 3, manuscript at 27-35. Hardy would allow fair use only for uses that are "either trivial, or undertaken for unusually worthy purposes." Id. manuscript at 33.

[397] Applying this approach, the NII White Paper suggests that universities and libraries should have to pay full market price for expressive material, just as they must pay for tangible supplies. See NII WHITE PAPER, supra note 6, at 84 n.266, 88; see also GOLDSTEIN, supra note 21, at 202 (asserting that "as new technological uses of copyrighted works emerge, lawmakers should be quick to extend copyright to encompass them, even if the uses are construed as private"); Easterbrook, supra note 8, at 110-11 (favoring like treatment of intellectual property to physical property and arguing that "quasi-rents . . . are common in every industry with specialized assets").

[398] GOLDSTEIN, supra note 21, at 200.

[399] See, e.g., Elkin-Koren, supra note 40, at 273, 277 (opposing extension of copyright to digital "borrowing" and asserting that users of expression disseminated over digital networks must be allowed "to do the same things they are able to do in a non-digitized environment"); Hamilton, supra note 12, at 623 (coining the term "free use zone"); id. at 632 (summarizing application of free use zone on Global Information Infrastructure); Litman, supra note 3, at 40 (advocating user's "right to read" and suggesting that Copyright Act should be amended to clarify that "an individual's ordinary reading, viewing, or listening to an authorized copy of a work does not invade the copyright owner's rights"); see also Samuelson, supra note 3, at 137-38, 189, 191 (arguing against extension of copyright to such uses, or their digital equivalents, at least until such time, if any, that it becomes apparent that some such protection is required in digital markets).

[400] See NII Copyright Protection Act of 1995: Hearings on H.R. 2441 Before the Subcomm. on Courts and Intellectual Property of the House Comm. on the Judiciary, 104th Cong. (1996) (statement of Consumer Product on Technology) (maintaining that legislation implementing White Paper recommendations would have far-reaching negative consequences regarding personal privacy); Barlow, supra note 21, at 86 (asserting that broader and more rigorous enforcement of intellectual property in cyberspace will "inevitably threaten freedom of speech").

[401] See, e.g., Hamilton, supra note 12, at 631-32; see also AMERICAN ASS'N OF RESEARCH LIBRARIES, STATEMENT ON LAWFUL USES OF COPYRIGHTED WORKS (1995) (asserting that "[w]ithout infringing copyright, the public has a right to expect . . . to read, to listen, or view publicly marketed copyrighted material privately, on site or remotely").

[402] See Ginsburg, supra note 3, at 1477-78; supra note 21.

[403] See Volokh, supra note 21, at 1823-25. But see CRAWFORD & GORMAN, supra note 21, at 17-22 (doubting whether computer and display technology will ever equal advantages of reading books and lengthy texts on printed page).

[404] The up-front payment could take one or more of several types of fees. It might be: (1) a license fee for permitting a library to make digital reproductions of certain hard copy works in its collection; (2) a license fee for downloading and storing in the library's computer permanent copies of new works that are created in digital format; or (3) a blanket license fee for unlimited digital display of the works to the library's remote access patrons. To some extent, publishers already engage in similar price discrimination, charging libraries and other institutional subscribers of certain journals a significantly higher subscription fee than that charged to individual subscribers. See American Geophysical Union v. Texaco, Inc., 60 F.3d 913, 936 (2d Cir. 1994) (Jacobs, J., dissenting) (noting that plaintiff journal publisher charged institutional subscribers double normal subscription rate in expectation that employees would copy articles for personal use). At the same time, newspaper and journal publishers often charge teachers and students a lower rate than other users.

[405] Much the same benefit could be achieved by calculating the library's blanket license fee in accordance with a system that yields statistical samples of patron uses, such as that in employed by ASCAP, the Copyright Clearance Center, and other collective licensing organizations. See DAVID SINACORE-GUINN, COLLECTIVE ADMINISTRATION OF COPYRIGHTS AND NEIGHBORING RIGHTS: INTERNATIONAL PRACTICES, PROCEDURES, AND ORGANIZATIONS 383-91 (1993) (discussing various forms of collective blanket licensing). Given bounded rationality distortions, patron per use charges would yield only imperfect information about audience receptivity to author's works and, partly as a result, should not serve as a basis for expanding copyright's scope. See supra text accompanying note 241. But everything else being equal, given a choice between a flat fee that takes no account of patron interest and a charge per use system that does, the latter might be preferable.

[406] See supra text accompanying note 272.

[407] The White Paper would extend copyright over online browsing for both reasons. See supra note 66. For a further, cogent critique of this formalist approach, see Litman, supra note 353, at 37.

[408] In assessing the financial burden that such charges might impose on users, however, one must take into account the vastly reduced price for digital, as opposed to hard copy, distribution, and the savings in time and money in being able to view a work from home rather than having to go to a bookstore, library, or newsstand. See Volokh, supra note 21, at 1809, 1825 (discussing inexpensive electronic distribution of music and text). Moreover, charges for such digital uses might be considerably less intrusive and onerous than some minimalist critics fear. Charges could take place automatically and mechanically, much like toll charges on a phone bill or, more likely, as a lump sum license fee, added to the user's monthly Internet access provider bill, that would cover all instances of browsing or downloading.

[409] See, e.g., GOLDSTEIN, supra note 21, at 218-23 (discussing ASCAP and Copyright Clearance Center); Merges, supra note 168; Merges, supra note 164, at 2669-70 (maintaining that "the history of collective rights organizations such as ASCAP supports the main theoretical point . . . that a property rule for [intellectual property rights] can be transformed into a voluntary liability rule, in the form of an effective institution to carry out [intellectual property rights] transactions").

[410] See SINACORE-GUINN, supra note 405, at 383-90.

[411] Robert Merges's recent paean to collective licensing takes this neoclassicist embrace to new heights. Merges lauds collective licensing organizations as paradigmatic institutions of private ordering, remarkably shunting to the side the extensive government regulation of such organizations in both the United States and abroad. Compare Merges, supra note 168, manuscript at 45 ("antitrust enforcement . . . has appeared to constrain [ASCAP] somewhat"), with Stanley M. Besen et al., An Economic Analysis of Copyright Collectives, 78 VA. L. REV. 383, 387-88, 395 (1992) (stating that "collectives [such as ASCAP] have been subject to detailed regulation" governing types of licenses that collectives may offer and administer, levels and distribution of license fees, collective membership restrictions, collective obligations to nonmembers, and appropriate damages for infringement). In particular, Merges concludes, relying on the relative infrequency of fee-setting litigation, that ASCAP fees continue to be "established by negotiation," just as "in the past," before its 1950 antitrust consent decree. See Merges, supra note 168, manuscript at 46. Here Merges neglects the "New Institutionalism" literature (on which he otherwise heavily relies) showing that economic agents will often transact against the backdrop of state entitlements and institutions without actually resorting to them. See id. at 23-26 (canvassing New Institutionalism literature). It seems highly likely that users' automatic right to an ASCAP license upon application, coupled with their right to petition the court for determination of a "reasonable fee" in the absence of agreement and the underlying threat of private antitrust action, heavily color ASCAP license negotiations, even if few users have actually filed a petition for judicial determination of fees. See infra note 413.

[412] Collective licensing organizations pool the copyrights of their members, thus enhancing their power in negotiating with users. ASCAP and BMI operate pursuant to the terms of consent decrees issued in connection with an antitrust action brought by the Department of Justice. See Broadcast Music, Inc. v. CBS, Inc., 441 U.S. 1, 10-12 (1979) (describing ASCAP and BMI consent decrees). They have also been the subject of numerous private antitrust actions. See generally Simon H. Rifkind, Music Copyrights and Antitrust: A Turbulent Courtship, 4 CARDOZO ARTS & ENT. L.J. 1 (1985) (discussing antitrust challenges to ASCAP to illustrate evolving relationship between copyright and antitrust laws).

[413] See SINACORE-GUINN, supra note 405, at 604-07. Under its Consent Decree, ASCAP may not institute or commence suit against motion picture exhibitors and may license synchronization rights and motion picture theater performing rights only in limited circumstances. See United States v. ASCAP, 1950-1 Trade Cas. (CCH) ¶ 62,595, at 63,752-53 (§§ IV(F)(1), V(C)(1)-(5)) (S.D.N.Y. 1950) (Amended Final Judgment). In addition, any user automatically acquires an ASCAP license merely by applying to ASCAP for the license. See id. at 63,753 (§ IV). If the user is unable to negotiate a license fee, it may petition a judge of the Southern District of New York to fix a "reasonable fee." See id. at 63,754 (§ IX(A)). In any such proceeding ASCAP bears the burden of establishing the reasonableness of its proposed fee. See id. at 63,754 (§ IX(A)).

[414] State regulation would not be needed if each author or publisher were free to negotiate his or her own user charges since this practice would not pose the problem of monopoly power that is endemic to collective licensing. The Copyright Office has begun a project to allow such individualized licensing online. See supra note 384.

[415] So-called "multimedia" works are works that combine text, music, still images, graphics, and full-motion video in digital format. See Jennifer D. Choe, Interactive Multimedia: A New Technology Tests the Limits of Copyright, 46 RUTGERS L. REV. 929, 931 (1994). As the NII White Paper points out, the term "multimedia" is a misnomer; such creations actually involve the fixation of works of various categories in a single medium. See NII WHITE PAPER, supra note 6, at 41-42. However, since "multimedia" is the term that is commonly used, I will use it here as well.

[416] See supra text accompanying notes 71-76. Even a broad reproduction right is not entirely coterminous with the derivative right. The reproduction right may only be infringed by an unauthorized fixation in copies or phonorecords, whereas the derivative right may be infringed by a nonfixed performance. See H.R. REP. NO. 94-1476, at 62 (1976), reprinted in 1976 U.S.C.C.A.N. 5659, 5665. Nimmer asserts, however, that the derivative right is "completely superfluous" since any infringement of that right would also infringe the reproduction right or the performance right. See 2 NIMMER ON COPYRIGHT, supra note 56, § 8.09[A], at 8-123. Professor Goldstein has cogently argued that in order to be a derivative work, as opposed to merely a substantially similar reproduction, the work should involve a "contribution of independent expression to an existing work [that] effectively creates a new work for a different market." GOLDSTEIN, supra note 18, § 5.3.1, at 5:82.

[417] See supra note 144.

[418] See supra note 145.

[419] See, e.g., Jaszi, supra note 9, at 304-05 (denouncing derivative right and total-concept-and-feel test for reproduction right infringement as outmoded vestiges of Romantic view of authorship); Lunney, supra note 30, at 650 (maintaining that derivative right should be limited to "those instances where an individual has exactly or near exactly reproduced a copyrighted work in a new language or medium of distribution"); Sterk, supra note 30, at 1217 (concluding that derivative right is "generally inconsistent with the incentive justification for copyright" and doubting whether its abolition would "increase overall litigation rather than just shift boundary lines").

[420] See Hamilton, supra note 97, at 120-22 (1994) (citing sources).

[421] See supra notes 33-42 and accompanying text.

[422] See supra notes 241-46 and accompanying text. In addition, although copyright's democratic paradigm admittedly does not generally distinguish between works of political speech and works of entertainment, a rule that encourages studios to produce and invest in those films and television programs that can best be used to sell coffee mugs, T-shirts, keychains, and other consumer items bearing character likenesses hardly serves the objective of robust democratic discourse. See GREGORY J. BATTERSBY & CHARLES W. GRIMES, THE LAW OF MERCHANDISE AND CHARACTER LICENSING, § 2.03[1], at 2-9 to 2-12 (1995) (describing how desire to maximize potential for product merchandising and promotional tie-ins drive motion picture company decisions regarding film selection, characters, images, plot, and implements used in film).

[423] The same would be true of two-dimensional drawings of three-dimensional sculptures, dolls and toys, and vice versa. For that reason the holder of a copyright in a three-dimensional graphic work may prevent an unauthorized two-dimensional representation of the work, and the holder of a copyright in a two-dimensional drawing may prevent an unauthorized three-dimensional representation of the drawing. See, e.g., Fleischer Studios, Inc. v. Ralph A. Fruendlich, Inc., 73 F.2d 276, 278 (2d Cir. 1934); King Features Syndicate v. Fleischer, 299 F. 533, 535 (2d Cir. 1924). This rule does not apply with regard to utilitarian aspects of a three-dimensional useful article, whether embodied in the article or depicted in a two-dimensional design. See 1 NIMMER ON COPYRIGHT, supra note 56, § 2.08[H], at 2-149; id. § 8.07, at 8-104.

[424] See, e.g., WGN Continental Broad. Co. v. United Video, Inc., 693 F.2d 622, 625 (7th Cir. 1982) (holding work that deleted parts of new program constituted infringing derivative work); Gilliam v. ABC, 538 F.2d 14, 21 (2d Cir. 1976) (holding that unauthorized editing of work, if proven, would constitute infringing derivative work, going beyond scope of license to make copies of work).

[425] A multiple taker problem exists when an owner who lacks the right to exclude will not pay a prospective taker to prevent a taking because the owner would subsequently have to pay another prospective taker not to take, and then another and another. See Kaplow & Shavell, Property Rules, supra note 247, at 765-66 (identifying multiple taker problem as limitation of liability rule regimes in some circumstances).

[426] See Bernard Weinraub, Two Films, One Subject. Uh-Oh. In Hollywood, the Race is On, N.Y. TIMES, June 23, 1994, at C11 (reporting as highly unusual contemporaneous development by two major studios of motion pictures based on same story about threatened escape of deadly virus from medical lab).

[427] See AL KOHN & BOB KOHN, KOHN ON MUSIC LICENSING 656-60 (2d ed. 1996).

[428] The compulsory license is available only when a recording of the song has been previously distributed in the United States with the copyright owner's permission. See 17 U.S.C. § 115(a)(2) (1994). Section 115 also requires that notice be given to the copyright owner and that the cover artist refrain from changing the "basic melody or fundamental character of the work." Id. The statutory fee is dependent on when the original phonorecord was produced and currently varies from 4.0 cents to 6.6 cents per song per copy, or .75 cents to 1.25 cents per minute of playing time, rounded up to the next minute, whichever is larger. See 37 C.F.R. § 255 (1995).

[429] A cover recording does not constitute an independently copyrightable derivative work, "except with the express consent of the copyright owner." 17 U.S.C. § 115(a)(2).

[430] As of November 1995, for example, the Beatles songs "Yesterday" and "Eleanor Rigby" had been the subject of 72 and 51 cover recordings, respectively. See Beatles Still Under Cover: A Look at Statistics That Shape Our Lives, USA TODAY, Nov. 22, 1995, available in 1995 WL 12679375.

[431] Telephone Interview with Charles Sanders, In-House Counsel for the Harry Fox Agency (Nov. 16, 1995). The agency acts as the agent for a large number of musical work copyright owners in granting cover recording and other mechanical recording licenses. According to Mr. Sanders, only about 40% to 50% of the approximately 150,000 cover recording licenses that the Agency issues each year are at the statutory rate, and this figure does not include the many below rate in-house licensing transactions between record companies and their affiliates. The primary reason for the issuance of cover licenses below the statutory rate, he explains, is that recording contracts typically include a control composition clause, which requires the songwriter/artist to provide the record company with a rate on that person's songs that is three-quarters of the statutory rate. Other typical instances of below statutory rate licenses include packaged recordings of older artists and record club releases. See KOHN & KOHN, supra note 427, at 659-60.

[432] See David Sanjek, "Don't Have to DJ No More": Sampling and the "Autonomous" Creator, 10 CARDOZO ARTS & ENT. L.J. 607, 612 (1992) (describing use of Musical Instrument Digital Interface synthesizers, which take audio signals and convert them into string of computer digits that can be held in random access memory, retrieved, scrambled, and introduced into given recording).

[433] This would not be so where the entire original work is only a couple of phrases or sounds, as in the case of the short, original samples that are created for compilation in sound recordings, known as "samplers," which are sold to musicians who wish to incorporate samples in their own works. See Anita M. Samuels, Freeze-Dried Music: Just Add Artists, N.Y. TIMES, Sept. 4, 1995, at A2 (reporting increasingly widespread use of samplers). In this case, however, while the entire sampler would generally be protected as a compilation against the literal or near-literal copying of its selection and arrangement of samples, it is questionable whether the individual samples, each taken separately, would be sufficiently original to qualify for copyright protection. See 1 NIMMER ON COPYRIGHT, supra note 56, § 2.01[B], at 2-17 to 2-18 (stating that short phrases do not generally qualify for copyright protection unless they exhibit sufficient creativity). But see Tin Pan Apple Inc. v. Miller Brewing Co., 30 U.S.P.Q.2d (BNA) 1791 (S.D.N.Y. 1994) (declining to hold, as matter of law, that defendant's digital sampling of words "Hugga-Hugga" and "Brr" from plaintiff's song constituted noninfringing copying of noncopyrightable material).

[434] Among the possible types of compulsory licenses are state determined across-the-board fees, individualized judicial damage awards, and voluntary negotiations under the shadow of binding arbitration in the event of negotiation failure. For a brief discussion of these alternatives and their possible ramifications for efficient bargaining, see supra note 248.

[435] See OFFICE OF TECHNOLOGY ASSESSMENT, 102D CONG., FINDING A BALANCE: COMPUTER SOFTWARE, INTELLECTUAL PROPERTY AND THE CHALLENGE OF TECHNOLOGICAL CHANGE 173 (1992); Choe, supra note 415, at 948-49. There are two principal sources of legal uncertainty regarding the use of sampled material. First, it is unclear whether any given instance of digital sampling constitutes a noninfringing de minimis or fair use. See supra note 75. Second, given that much content was created and licensed prior to the advent of multimedia technology, it is often unclear whether licensees have the right to sublicense multimedia uses. See Jane C. Ginsburg, Domestic and International Copyright Issues Implicated in the Compilation of a Multimedia Product, 25 SETON HALL L. REV. 1397, 1409-11 (1995).

[436] See Kevin J. Harrang, Licensing Issues in Creating and Publishing Multimedia Software Products, in PRACTISING LAW INSTITUTE, DRAFTING LICENSING AGREEMENTS 289 (1995); Choe, supra note 415, at 948-49, 980-82 (noting absence of collective licensing institutions designed specifically for multimedia uses as obstacle to multimedia development).

[437] See, e.g., Krier & Schwab, supra note 123, at 464; Merges, supra note 164, at 2662-64.

[438] See supra notes 247-48 and accompanying text.

[439] See supra note 248.

[440] See Kaplow & Shavell, Property Rules, supra note 247, at 771 (noting that "[u]nder property rule protection, when owners sell things, they tend to receive more than the value they place on them; they are generally able to extract some of the buyers' surplus," whereas under "the liability rule, owners' valuation is all that they are in principle awarded").

[441] Commentators generally agree that whatever may be their benefits for efficient resource allocation, liability rules have a socially inefficient tendency to reduce owners' ex ante incentives to invest in productive activity and development concerning the asset that is subject to the rule. See, e.g., Ayres & Talley, Solomonic Bargaining, supra note 247, at 1083; Kaplow & Shavell, Property Rules, supra note 247, at 722. In the case of sampling, however, the transformative use would act as a market substitute neither for the original work nor for traditional adaptations, such as translations, motion picture versions, or dramatizations. A liability rule for sampling would thus not be expected to dampen owner incentives with regard to the creation and development of these works. A liability rule for sampling would, in theory, dampen owner incentives to invest in works that can easily be broken down into easily sampled components, but since, with digital technology, all works can be easily broken down in that manner, that theoretical incentive distortion would have little real consequence.

[442] See Campbell v. Acuff-Rose Music, Inc., 114 S. Ct. 1164, 1171 (1994) (emphasizing that "the creation of transformative works" serves copyright's fundamental objectives and thus lies at "the heart of the fair use doctrine's guarantee of breathing space").

[443] Neoclassicists sometimes argue that income tax and direct subsidies are superior to legal rules as a means of meeting distributional goals. See, e.g., GOLDSTEIN, supra note 21, at 225 (raising possibility of direct cash subsidies to users as alternative to limiting copyright holder entitlements); Kaplow & Shavell, Property Rules, supra note 247, at 771. However, government subsidies for transformative uses of protected expression would have the same deleterious effect on author autonomy as would government subsidies for the creators of such protected expression. Even if the neoclassicist preference for income tax and direct subsidy holds in other areas, it makes no sense in this area of copyright.

[444] See supra text accompanying notes 87-93.

[445] See supra text accompanying notes 179-81.

[446] See, e.g., Easterbrook, supra note 8, at 113-14; cf. Palmer, supra note 353, at 280 (asserting that intellectual property rights "are creatures of the state" and not, as neoclassicists claim, "the product of an evolutionary process of interaction among interested parties that is later ratified through legal sanctions").

[447] Easterbrook, supra note 8, at 114.

[448] 86 F.3d 1447 (7th Cir. 1996).

[449] Id. at 1454-55.

[450] For a discussion of the White Paper's support for shrinkwrap licensing and online licensing, see supra text accompanying notes 88-93.

[451] 499 U.S. 340 (1991). In Feist, the Court held that compilations that lack even a modicum of creativity in their selection or arrangement are, as a matter of constitutional mandate, ineligible for copyright protection. See id. at 363-64.

[452] Section 301(a) of the Copyright Act preempts any legal or equitable rights [under state law] that are equivalent to any of the exclusive rights within the general scope of copyright as specified by section 106 in works of authorship that are fixed in a tangible medium of expression and come within the subject matter of copyright as specified by sections 102 and 103. 17 U.S.C. § 301(a) (1976). The ProCD Court agreed that the plaintiff's database met the "subject matter of copyright" requirement even though, under Feist, unoriginal databases are not protected by copyright. See ProCD, 86 F.3d at 1453. It held, however, that state enforcement of the shrinkwrap license did not meet the equivalent right requirement and thus that section 301 preemption did not apply. See id. at 1455. Judge Easterbrook simply ignored another possible, independent ground for federal preemption, the Supremacy Clause of the U.S. Constitution, which has been held to preempt state law that contravenes federal intent to place certain types of creations in the public domain. See Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 162 (1989) (striking down Florida patent statute as disruptive to national uniformity mandated by Patent and Copyright Clause of Constitution).

[453] ProCD, 86 F.3d at 1455.

[454] Id. at 1454.

[455] Judge Easterbrook also argued that contractual limitations on copyright user rights are commonplace and elicited a number of inapt examples in purported support of that contention. These include trade secrets contracts (which are truly customized, bilateral transactions), home video rental contracts (because copyright does not extend to video rentals, these contracts are based on the video store's property right in the tape), and contracts for the provision of data searching services (which concern the provision of personal services, not copyright). See id.

[456] Id. at 1455 (citation omitted).

[457] On the other hand, the notion that state institutions will necessarily intervene in the broad public interest is no less naive. Congress has exhibited a marked tendency to delegate the policy choices regarding copyright policy to industries that have a direct stake in proposed legislation. See generally Jessica Litman, Copyright Legislation and Technological Change, 68 OR. L. REV. 275 (1989); Thomas P. Olson, The Iron Law of Consensus: Congressional Responses to Proposed Copyright Reforms Since the 1909 Act, 36 J. COPYRIGHT SOC'Y 109 (1989). The proper response to that tendency, however, is not public choice nihilism, but a renewed effort to bring the public interest to bear in legislative and administrative decisionmaking. See, e.g., Litman, supra note 3, at 53-54 (insisting that Copyright Office act more decisively and aggressively to represent public before Congress); see also RADIN, supra note 23, at 214-23 (presenting cogent critique, from Deweyan perspective, of public choice theory's reductive description of democracy as marketplace of self-interested profit maximizers). A prime example of such effort has been the work of the Digital Future Coalition, composed of 27 organizations representing creators, consumers, and distributors of information and formed in the fall of 1995 "to work towards a thorough, broad and balanced Congressional debate of U.S. copyright law and policy." See What is the DFC?, DIGITAL FUTURE COALITION HOME PAGE (visited Oct. 12, 1996).

[458] Zimmerman, supra note 3, at 411-12; see also Barlow, supra note 21, at 128 (calling for content protection based on encryption rather than intellectual property law); Palmer, supra note 353, at 284-99 (arguing, on libertarian and market efficiency grounds, that private ordering through technological fences, product bundling, and contractual arrangements are superior to state-defined intellectual property rights). But see Litman, supra note 353, at 45 (noting that, assuming availability of technological controls and adhesion contracts, "[e]ven if the copyright grant is narrowed in scope, the public will need some of its rights made explicit").

[459] I do not mean to imply here that Congress should be unable, under the Commerce Clause, to accord protection against unauthorized uses of unoriginal compilations of data and other works that are ineligible for copyright. In so doing, however, Congress should, as with copyright, seek to obtain a balance between incentive and access that best serves the public interest in expressive diversity and the diffusion of information.

[460] The term "private legislation" was coined by Friedrich Kessler to connote contracts of adhesion that were standard throughout an industry, thus representing the danger of private concentration of power. See generally Friedrich Kessler, Contracts of Adhesion-Some Thoughts About Freedom of Contract, 43 COLUM. L. REV. 629 (1943). Neoclassicist Robert Merges concurs that such private legislation that effects the "wholesale subversion of an important federal policy" should be preempted, no less than would state legislation with the same effect. See Merges, supra note 22, at 1613. But Merges would be considerably more solicitous of contractual prerogatives than would the democratic paradigm as I have crafted it. He would impose a caveat on preemption, limiting preemption to a nebulous category of circumstances in which the offending licensing provision has become "totally pervasive." Id. I would argue that state enforcement of online access contracts should be subject to possible preemption under current law, although any detailed consideration of that admittedly difficult question is beyond the scope of this Article. Once an expressive work is made available to all members of the public who are willing to agree to a standard contract governing the terms of access and use, state enforcement of that contract does, it seems to me, meet both the subject matter and equivalent rights requirements for statutory preemption under section 301(a). In addition, and this would be the grounds for preemption most in line with the democratic paradigm, state enforcement of online access contracts that seek systematically to avoid fair use, idea/expression dichotomy, or durational limitations on owner control over publicly disseminated works would "`stand as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress'" reflected in the Copyright Act and of the fundamental purposes of the Copyright Clause, and thus should be preempted under the Supremacy Clause of the United States Constitution. See Goldstein v. California, 412 U.S. 546, 561 (1973) (quoting Hines v. Davidowitz, 312 U.S. 52, 67 (1941)).

[461] THE FEDERALIST NO. 43, at 272 (James Madison) (Clinton Rossiter ed., 1961).

[462] The Copyright Clause empowers Congress "[t]o promote the progress of science . . . , by securing, for limited times, to authors . . . the exclusive right to their respective writings." U.S. CONST., art. I, § 8, cl. 8. The title of the first federal copyright statute was: "An Act for the encouragement of learning, by securing the copies of maps, charts, and books, to the authors and proprietors of such copies, during the times therein mentioned." Act of May 31, 1790, ch. 15, § 1, 1 Stat. 124, 124.

[463] GOLDSTEIN, supra note 21, at 197-236, 251 (using metaphor, but disclaiming credit for its creation).

[464] See supra text accompanying notes 263-68.
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