The Subtle Incentive Theory of Copyright Licensing

62 Pages Posted: 9 Sep 2015

See all articles by Yafit Lev Aretz

Yafit Lev Aretz

City University of New York - Department of Law

Date Written: January 10, 2014


Copyright literature has been long familiar with the lack of licensing choices in various creative markets. In the absence of lawful licensing alternatives, consumers of works as well as secondary creators wishing to use protected elements of preexisting works are often left with no choice but to either infringe on the copyright or refrain from the use. As the dearth of licensing impedes further creation, it greatly conflicts with the utilitarian foundation of copyright and its constitutional goal to promote creative progress. Legal scholarship has submitted various recommendations in response to the licensing failure, but none of them has proved to be effective in alleviating copyright’s licensing shortage. This article contributes to the ongoing discourse by introducing the subtle incentive theory of copyright licensing. The subtle incentive theory encourages rightholders to engage in licensing by considering the lack of licensing alternatives in the market for a particular work as a mitigating factor in the fair use analysis. Specifically, the subtle incentive theory propounds the mirror image of a test that was already mandated in American Geophysical Union v. Texaco in the mid-1990s, but which has since been used exclusively to deny fair use. By so doing, the subtle incentive theory mends a logical error in fair use reasoning and promotes a better creation market by making a zero-cost doctrinal change to ameliorate copyright licensing shortfalls. While the subtle incentive theory avoids aggressive interference in market dynamics and respects rightholders’ proprietorial choices, it does not leave the licensing failure to be repaired exclusively by the market, and adds an important policy statement as to the significance of original and secondary creation alike.

Keywords: Copyright, Licensing, Fair Use

Suggested Citation

Lev Aretz, Yafit, The Subtle Incentive Theory of Copyright Licensing (January 10, 2014). Brooklyn Law Review, Vol. 80, No. 4, 1357, 2015. Available at SSRN:

Yafit Lev Aretz (Contact Author)

City University of New York - Department of Law ( email )

New York, NY
United States
9178891136 (Phone)

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