• Selected
• Entire List

Abstract:
Antitrust and intellectual property law both seek to improve economic welfare by facilitating competition and investment in innovation. At various times both antitrust and IP law have wandered off this course and have become more driven by special interests. Today, antitrust and IP are on very different roads to reform. Antitrust reform began in the late 1970s with a series of Supreme Court decisions that linked the plaintiff’s harm and right to obtain a remedy to the competition-furthering goals of antitrust policy. Today, patent law has begun its own reform journey, but it is in a much earlier stage. The outlook for copyright law is much bleaker.

The main component in these reforms has been the development of a concept of harm that is related to the underlying goal of legal policy. In its 1977 Brunswick decision the Supreme Court largely ignored the language of an expansive antitrust damages provision that gives private plaintiffs treble damages for every injury caused by an antitrust violation. Rather, the Court said, the type of harm must be sufficiently related to the goals of the antitrust laws, which is to make markets more competitive. We propose a concept of “IP injury” that limits IP remedies to situations in which the IP holder has suffered actual harm sufficiently linked to the purpose of IP law, which is to incentivize innovation. An infringement that benefits the infringer and does no cognizable harm to the IP right holder or anyone else is a pure Pareto improvement – something that can be said of few involuntary transactions. The trick for legal policy is to determine when the IP holder has not suffered any cognizable harm. This analysis requires a re-examination of IP externalities, or spillovers, where IP should follow the antitrust lead in permitting the market to correct for them, intervening only where the inability to recover for an external benefit has a material impact on ex ante incentives to innovate. It also requires a re-examination of patent holdup and remedies. We propose rules that reward the relevant actors for either giving or obtaining timely notice. As in the case of antitrust, reformation of IP’s theory of harm must likely come from the judiciary and not from Congress.

Antitrust, Monopoly, Patents, Regulation, Copyright, Intellectual Property

Abstract:
Copyright law is a glaring and unjustified exception to the rule that the government may not prohibit speech without a showing that it causes harm. While the First Amendment sometimes protects even harmful speech, it virtually never allows the prohibition of harmless speech. Yet, while other speech-burdening laws, such as defamation and right of publicity laws, require demonstrable evidence that the defendant’s speech causes actual harm, copyright law does not make harm a requirement of infringement. Although copyright law considers harm to the market for the copyrighted work as a factor in fair use analysis, harm is not always required and is so poorly defined that the concept has become circular. Moreover, the defendant ordinarily bears the burden of proof to show the absence of harm. As a result, courts often find liability for infringement (and therefore burden speech) where harm is nonexistent or purely speculative.

Potential explanations for copyright’s anomalous treatment are unpersuasive. Copying involves speech as well as conduct, and the fact that copyrights are in some sense property does not come close to justifying its aberrant treatment. Moreover, copyright’s role in encouraging creative expression does not obviate First Amendment concerns. Rather, it provides a way to reconcile copyright law and free speech. Drawing substantially from First Amendment cases holding that speech restrictions must be justified by an important or a compelling governmental interest, this article argues that the First Amendment requires real proof of harm to the copyright holder’s incentives in order to impose liability for copyright infringement. It also explores the types of harm that might arise in copyright infringement cases and considers whether the First Amendment permits recognition of these types of harm. The article concludes that demonstrable market harm is cognizable under First Amendment principles, but that, except in cases involving the use of unpublished works, recognition of harm to the reputation of copyrighted works, the author’s right not to speak or associate, or the copyright holder’s privacy interests is generally not compatible with the First Amendment.

Copyright, harm, fair use, first amendment, speech

Abstract:
In Eldred v. Ashcroft, the Supreme Court upheld the constitutionality of the 1998 Copyright Term Extension Act (CTEA), which extended the copyright term of both new and existing works by twenty years, despite the lack of incentive that retroactive term extension provided for the creation of new works. While the CTEA is perhaps the most notorious example of special-interest rent-seeking in copyright law to date, a majority of the Court dismissed the petitioners' constitutional challenges without any mention of special-interest influence.

The Court's decision was disappointing but hardly surprising. Because the CTEA's language extending the copyright term was unambiguous, there was no issue of statutory construction. The issue was strictly constitutional, and the Court rarely strikes down economic laws like intellectual property statutes. Indeed, to do otherwise would thwart well-established constitutional principles including Congress's lawmaking power under Article I as well as separation of powers inherent in the structure of the Constitution.

In this paper, Professor Bohannan argues that whether or not the Eldred Court was correct in ignoring special-interest influences in its constitutional analysis of the CTEA, courts should not ignore those influences when engaging in statutory construction of the Copyright Act. Special-interest influence over the Copyright Act has been pervasive over the past few decades, and the general trend in copyright law has been an expansion of the rights of copyright owners at the expense of public access to copyrighted works. This tension between private and public interests in copyright law often presents itself in copyright infringement cases as a statutory ambiguity between private-and public-regarding provisions in the Copyright Act.

Professor Bohannan argues that, where possible, such statutory ambiguities in the interpretation of the Copyright Act should be resolved by rules of statutory construction that take into account the private- or public-interest nature of the ambiguous provisions. The paper identifies ambiguities between private-interest provisions, such as the derivative works right and the DMCA's prohibitions, and public-interest provisions, such as the idea/expression dichotomy and the fair use doctrine. She then offers a set of rules of statutory construction designed to resolve these ambiguities by cabining the scope of private-interest provisions while broadening the reach of provisions that are in the public interest.

copyright, fair use, derivative works, DMCA, public choice, statutory interpretation

Abstract:
For more than ten years, a debate has been raging in copyright law over the enforceability of contractual license agreements that alter the delicate balance of rights that the Copyright Act strikes between owners and users of works of authorship. Courts and scholars are intensely divided on whether the Copyright Act should preempt such contracts. Recent cases show that courts virtually never preempt these contracts, no matter how much the terms of the contract conflict with the Act's provisions. Meanwhile, scholars are equally categorical in their opposing view, reasoning that contract claims can impede the objectives of federal law just as other state law claims can. Although courts and scholars disagree over preemption, they agree that copyright law needs a remedy for contractual overreaching. Unfortunately, preemption doctrine is under-utilized because no coherent model of preemption exists that accommodates both the interest in enforcing contracts as well as the interest in enforcing copyright policy.

This article argues that both courts and scholars are wrong in their categorical approaches to preemption of contracts under the Copyright Act, and it proposes an intermediate approach that recognizes the importance of both contract rights and federal policy in preemption analysis. It argues that the reason this issue has been analyzed incorrectly is that preemption law seems ill-suited to contract claims. Contract preemption cases are not concerned with whether a state regulatory scheme is likely to supplant a federal scheme. Instead, the issue is really whether individuals should be able to contract away rights granted by the federal Copyright Act. Thus, the article proposes a new model for addressing copyright preemption of contracts based on insights from the law related to contractual waiver of statutory rights.

The proposed waiver model for contract preemption helps courts to distinguish between contracts that interfere with the purpose of copyright and those that do not. As such, it keeps statutory purpose at the forefront of contract preemption analysis and harmonizes the interest in freedom of contract and the interest in federal copyright policy.

Intellectual Property, Copyright, Contract, Preemption, First Sale

Abstract:
Copyright law needs a theory of harm that can give effect to its constitutional purpose. In order to Promote the Progress of Science and the useful Arts, copyrights must strike a balance between owners and users. Historically, copyright law struck this balance by granting limited copyrights, protecting only against copying that was likely to cause the copyright owner to lose sales of the copyrighted work. When the defendant used the work in a less foreseeable way, perhaps changing its meaning or purpose, the fair use doctrine was invoked. If the use was not foreseeable, it could hardly harm a copyright owner's reasonably expected sales. The fair use doctrine's harm requirement encouraged innovation by limiting infringement to uses that would likely affect a copyright owner's decision to create or distribute the work.

Over time, however, the scope of copyright protection has increased dramatically. This expansion leads to circularity in determining when a use is fair, as the copyright owner can nearly always argue that the defendant could have paid a license fee for the challenged use. This Article argues that current approaches to fair use, including the market failure and balancing theories, do not strike the balance necessary to achieve copyright's purpose, and that to do so, fair use must make liability turn on proof of harm.

Further, the Article shows that courts have developed a harm-based approach to fair use. This approach avoids circularity by requiring proof or a meaningful likelihood of lost profits that would be likely to have a material effect on a reasonable copyright owner's ex ante decision to create or distribute the work. Accordingly, it rejects the theory of copyright dilution, under which some courts have found harm where the defendant's use of a copyrighted work impairs the image of a work without causing any provable lost profits. It also argues that courts should allow defendants to mitigate evidence of harm to plaintiffs' sales by showing that their use also increased sales.

Intellectual Property, Copyright, Fair Use, Market Failure, Balancing

Abstract:
It is both curious and deeply troubling that, in an age of intellectual property expansionism, the doctrine most explicitly concerned with limiting IP overreaching has no defensible basis in IP policy. “Misuse” relates to the IP holder’s use of licenses and other arrangements to obtain rights “beyond the scope” of a statutory IP grant, but the doctrine has not established adequate principles for identifying the practices that should be condemned.

The misuse doctrine evolved in patent law and concerned the tying of patented and unpatented goods. Courts held that such tying violated federal patent policy by expanding the statutory monopoly to include a second product not covered by the patent claims. Since then, misuse has expanded to cover many other practices and also into copyright law, reaching to package licensing of related patented or copyrighted goods, restraints on a licensee’s ability to produce competing technologies, and requiring royalty payments beyond the expiration of the patent or copyright term. Much of the case law has embraced an antitrust standard for misuse, which is fairly coherent but is not faithful to core IP values of promoting innovation and protecting access to the public domain. These defects in misuse doctrine are particularly problematic given the nature and severity of the penalty. A finding of misuse renders the IP right unenforceable until the misuse is “purged.” One must therefore question whether the benefits of remedying misuse outweigh the social costs of foregone IP enforcement.

This article argues that misuse doctrine has been shooting at the wrong targets. Many cases applying an antitrust standard for misuse emphasize market power in the primary (typically, patented) product as the key component. These decisions incorporate exaggerated concerns about “leverage” and avoid the issue that should be their focus, which is foreclosure of competing technologies or the public domain. Other decisions emphasize attempts to expand IP rights beyond their statutory scope; however, every license goes beyond literal IP scope, and the decisions provide no calculus for distinguishing permissible from impermissible expansion. This paper argues that if misuse is really to be used as an instrument of IP policy and is to be confined to those practices that are serious enough to warrant its severe remedy, misuse should be focused on foreclosure. That is, misuse should be found where the IP holder engages in a practice that unreasonably forecloses competition, future innovation or access to the public domain.

patent, copyright, intellectual property, misuse, antitrust, tying, package licensing, innovation, competition, foreclosure, leverage

Abstract:
Few judicial decisions in recent years have captured the attention of lawmakers, practitioners, and academics more than the Supreme Court's decisions dealing with state sovereign immunity. Holding that Congress may not abrogate state sovereign immunity from federal statutory claims when acting pursuant to its Article I regulatory powers, those decisions seriously limit an individual's ability to enforce rights against state defendants, creating a gap between right and remedy that arguably impairs the rule of law. While much of the scholarship in this area continues to dwell on abrogation as the primary means of allowing individuals to vindicate rights against the states, the Court clearly favors an approach in which states waive their immunity from suit. In this Article, Professor Christina Bohannan examines three common situations in which a state might be deemed to waive its immunity from suit: first, by failure to raise the immunity as a defense at trial; second, by private agreement; and third, by accepting federal benefits made conditional on waiver of immunity from federal claims. She determines that because the Court's sovereign immunity and Spending Clause jurisprudence has been concerned with ensuring that a state's waiver is voluntary and unequivocal rather than coerced, this case law precludes holding that a state waives its immunity by merely failing to raise it at trial. She concludes, however, that where a state voluntarily and unequivocally waives its immunity in a private contract or in exchange for benefits available exclusively from the federal government, its waiver should be enforced notwithstanding a subsequent attempt to revoke it at or before trial. Thus, a waiver approach to state sovereign immunity could provide a constitutional way for individuals to vindicate their rights against the states in a number of cases, thereby narrowing the right remedy gap created by the Court's abrogation decisions.

Constitutional Law, Intellectual Property, Sovereign Immunity, Eleventh Amendment, Fourteenth Amendment, Tenth Amendment, Federalism, Federal Courts, Contract, Waiver

Abstract:
Constitutional adjudication has proved inadequate to combat the special-interest influence over the Copyright Act, as the Supreme Court's decision in Eldred v. Ashcroft illustrates. The Eldred Court considered a constitutional challenge to the Copyright Term Extension Act (CTEA), a notorious example of rent-seeking in copyright law. For reasons reflecting concerns over separation of powers and institutional competency, the Court upheld the CTEA without any mention of the influence special interests had over its enactment.

In this article, I argue that statutory interpretation is superior to constitutional adjudication for combating the influence of special interests over the Copyright Act. Building on public choice insights into statutory construction, I offer a framework for resolving statutory ambiguities in a way that reclaims copyright for the public interest. I argue that courts should resolve statutory ambiguities in the Copyright Act by construing private-regarding provisions narrowly and public-regarding provisions broadly. Finally, I apply this rule to resolve important copyright issues including the tension between the derivative works right and the fair use doctrine, as well as the conflict between the DMCA and both the fair use doctrine and the idea/expression dichotomy.

Copyright, Statutory interpretation, Public Choice, First Amendment, Eldred, Copyright Term Extension Act, CTEA