Contracting around Copyright: The Uneasy Case for Unbundling of Rights in Creative Works

23 Pages Posted: 20 Oct 2008 Last revised: 17 Mar 2017

Guy A. Rub

Ohio State University (OSU) - Michael E. Moritz College of Law

Date Written: October 20, 2008

Abstract

The Copyright Act grants authors and users a set of entitlements in copyrightable works. It is questionable whether and to what extent authors and users can reallocate these rights by entering into legally enforceable contracts. The Seventh Circuit’s historic decision in ProCD, Inc v Zeidenberg, which held that contracts are usually not preempted by the Copyright Act, produced an extensive debate in the copyright literature regarding the enforceability and desirability of such contracts. Many participants in this debate, both supporters and critics of the court’s holding, assume that the ProCD rule enhances economic efficiency by allowing authors to unbundle the set of rights prescribed by the Copyright Act.

In this Article, I claim that, from an economic efficiency perspective, it is difficult to defend the ProCD rule. I argue that the prevailing belief that this rule reduces the wasteful deadweight loss associated with copyright is oversimplified and inaccurate. A more persuasive argument is that the ProCD rule increases the incentive to create in the long run. Such an efficient outcome, however, is desirable only when it allows society to mitigate the harm caused by other damaging components of the copyright system, and this was not achieved by the ProCD decision.

Keywords: copyright, intellectual property, contracts, price discrimination, licensing, libraries. pricing, ProCD, fair use, efficiency, deadweight loss, incentives to creation

JEL Classification: K12, K11, L11, L12, L13, D40, D45, O34, O30

Suggested Citation

Rub, Guy A., Contracting around Copyright: The Uneasy Case for Unbundling of Rights in Creative Works (October 20, 2008). University of Chicago Law Review, Vol. 78, No. 257, 2011. Available at SSRN: https://ssrn.com/abstract=1287190

Guy A. Rub (Contact Author)

Ohio State University (OSU) - Michael E. Moritz College of Law ( email )

55 West 12th Avenue
Columbus, OH 43210
United States

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