Whither Copyright? Transformative Use, Free Speech and an Intermediate Liability Proposal

Abstract:     
Copyrighted works are not just a form of property; they are also the primary means through which individuals exercise their expressive rights. While academics have grown increasingly concerned about the growing breadth of copyright law and the implications of this trend on the freedom of speech, courts have not fully addressed the inherent tension between intellectual property rights and expressive rights. Yet the central obstacle in reconciling this conflict is not the existence of a huge ideological rift between the academy and the judiciary; rather, it is structural. Simply put, the statutory scheme of the present copyright regime forces courts choose between two extreme options - fair use or infringement. If courts find infringement, hefty statutory damages typically result. On the other hand, if courts find fair use, an unauthorized user of a copyrighted work is able to exploit, without permission or payment, the work of another with impunity, thereby free-riding on the creative success of the original author.

This Article advances an intermediate liability option that undermines the harsh, Draconian binary that precludes courts from effecting balancing First Amendment and intellectual property considerations. Under the intermediate liability scheme, transformative uses of copyrighted works would be deemed non-infringing. However, commercial exploitation of transformative works would be subject to an accounting of profits - profits that would, as a default rule, be evenly split between the author of the original work and the transformative user. As I argue, this intermediate liability option serves key First Amendment interests and advances the original, utilitarian vision of the federal copyright system - the maximization of dissemination of creative works to the public so as to advance progress in the arts. Meanwhile, it ensures that copyright owners will continue to receive reasonable payments for the commercial exploitation of their works.

Keywords: copyright, intermediate liability, transformative use, fair use, free speech, infringement

JEL Classifications: O34

Accepted Paper Series