Copyright Harm, Foreseeability, and Fair Use
64 Pages Posted: 5 Jun 2008
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.
Keywords: Intellectual Property, Copyright, Fair Use, Market Failure, Balancing
JEL Classification: K20, K40, O31, O34, O38
Suggested Citation: Suggested Citation