Columbia Law professor
Tim Wu has posted an article that he intends to publish in a law review on tolerated use of secondary and derivative works that complement (without substituting) for the original. In my opinion, this article has clearly been inspired by the Lexicon trial. In his opening, Wu refers to fan websites as "marketing." that in plain economic terms adds value to the original:
"One reason that many uses of copyrighted works are tolerated is that they cause no harm to, and in fact help, the owner of the original copyrighted work. For example, if I create a film that is obscure, and a fan creates a loving website for the film that uses images from the film, it is probably the case that the fan has infringed. Nonetheless it is also obvious that the web site creates value for the owner of the original work. In fact, many fan websites and other tolerated uses are exactly the kind of thing that content creators pay for when it is called “marketing.”
In economic terms, what the fan has created is called a complement (as opposed to a substitute) - a good that makes another good more valuable. For those unfamiliar with this concept, examples are plentiful. More lenses make my camera more valuable. The sale of screws makes a screwdriver more valuable. My coffeemaker becomes more valuable the more varieties of coffee are available. And so on."
I am finishing my copyright paper on “Tolerated Use.” Since most stuff published in law reviews never shows up in search engines, I’m going to post parts of the article that might be interesting, here. No footnotes, obviously.
Tolerated Use
Tim Wu
Cite as: Tim Wu, Tolerated Use, Columbia Program on Law & Tech Working Paper (2008).
Better Treatment for Complements
One reason that many uses of copyrighted works are tolerated is that they cause no harm to, and in fact help, the owner of the original copyrighted work. For example, if I create a film that is obscure, and a fan creates a loving website for the film that uses images from the film, it is probably the case that the fan has infringed. Nonetheless it is also obvious that the web site creates value for the owner of the original work. In fact, many fan websites and other tolerated uses are exactly the kind of thing that content creators pay for when it is called “marketing.”
In economic terms, what the fan has created is called a complement (as a opposed to a substitute) - a good that makes another good more valuable. For those unfamiliar with this concept, examples are plentiful. More lenses make my camera more valuable. The sale of screws makes a screwdriver more valuable. My coffeemaker becomes more valuable the more varieties of coffee are available. And so on.
Now while is this relevant? I am suggesting that one of the chief problems in the present copyright world and its patterns of mass, tolerated infringement is that the law is not sensitive to complementarity. One way of helping ease the whole problem of massive casual infringement is to make the complementary-nature of the work more explicitly the leading determiner of whether a given secondary work is considered a reproduction or adaptation of the work under §§106(1)-(2), or fair use under §107.
We can begin with the example of a book review. It is sometimes stated that a book review would be infringing if it weren’t protected by the fair use doctrine, particularly if it quotes from the source. But the prior question should be asked: whether a usual book review is an infringement at all, regardless of fair use.
The text of the adaptation right seems to suggest that the answer is to be “no.” The question, based on the definition of “derivative work” is §101 is whether the original work is either listed in the text, or in some way “recast, transformed, or adapted.” It seems a implausible to suggest that a book review is the adaptation or recasting of a book into a new form, in the sense that a novel is recast into a play. Hence the conclusion reached by Judge Richard Posner in the Beanie Baby case, Ty, Inc. v. Publications Int’l, which asks, among other things, whether a collector’s guide to a series of stuff animals is an derivative work. He writes there that “a collectors’ guide to a series of copyrighted works is no more a derivative work than a book review is.”
Unfortunately, courts - in particular the Second Circuit, sometimes act as if anything related to or somehow borrowing from the original has been “recast, transformed, or adapted.” In Twin Peaks Productions v. Publications International, concerning a guide to the Twin Peaks series, the court summarily concluded that the guide was a derivative work by simply saying “the Book contains a substantial amount of material from the teleplays, transformed from one medium into another.” Unlike the Seventh Circuit approach, the Twin Peaks approach, taken with little evident thought, turns almost every secondary work into a derivative work.
The other possibility is that a book review is an infringing reproduction that is “substantially similar” to the original. On first reading, the idea that a book review is a copy of a book seems plainly ridiculous (unless, of course, it were just a disguised abridgement of the book). The question gets a bit harder if we speak of a book review that includes quotations from the book. Nonetheless, while realizing some of the caselaw goes in other directions (discussed below) I don’t see how it makes any sense to think that a book review, even with quotes, satisfies the classic idea of a copy being something that usurps the market for the original, by appealing to and drawing away the same audience. This is the idea of a copy in the Second Circuit’s Arnstein v. Porter, which says that he owner’s “legally protected interest is in … the potential financial returns from his compositions, which derive from the lay public’s approbation of his efforts.” The court decides infringement by deciding, “whether defendant took from plaintiff’s works so much of what is pleasing to the ear of lay listeners, who comprise the audience for whom such popular music is composed, that defendant wrongly appropriated something which belongs to the plaintiff.”
This statement in Arnstein reflects the idea of an illegal copy stealing the market for the original product. That view also anchors the work of Professor Paul Goldstein, whose work on the distinction between derivative and reproduction rights is foundational. In his 1983 paper, Derivative Rights And Derivative Works In Copyright, Goldstein is in search of “the point at which the right ‘to reproduce the copyrighted work in copies’ leaves off and the right ‘to prepare derivative works based upon the copyrighted work’ begins.” It is, he says “that point at which the contribution of independent expression to an existing work effectively creates a new work for a different market.” That means that the “infringer who copies a novel verbatim violates only the right to reproduce, for he has created neither independent expression nor a new market. But the derivative work right is infringed differently: “By contrast, motion pictures, translations and comic strips based on the novel will all infringe the derivative right because they add new expressive elements and serve markets that differ from the market in which the original was first introduced.”
But sometimes we find language that don’t reflect this understanding of what a substantially similar reproduction is - language that seems to focus on brute fact of reproduction of even some small amount of the original work, regardless of whether the result is to create a product that competes with the original. Sometimes, and crucially, this language comes from cases that are not true cases of changing genres: they feature, instead, two competing products, and a contest over the idea-expression dichotomy. That’s why it is dangerous to misuse nuggets such as “no plagiarist can excuse the wrong by showing how much of his work he did not pirate.” That phrase is from Learned Hand’s famous Sheldon opinion - one in which there was no question that the original play at issue in that case (“Dishonored Lady”) would be competition with the defendant’s film (“Letty Lynton”). The quote pertains to the idea-expression dichotomy, not the question of market competition.
But other times courts, especially the Second Circuit, have loosely allowed the reproduction right to expand so as to cover what is really a derivative work. The worst offender is the Second Circuit’s “Seinfeld” case, Castle Rock Entertainment, Inc. v. Carol Publishing Group, Inc., which asks whether a trivia game (the “Seinfeld Aptitude Test”) infringes the copyright in the television show Seinfeld.
In the Seinfeld case, the court managed to find that a trivia game is a copy of a TV show. The absurdity of that result seems to speak for itself. The idea of finding a trivia game to be any kind of substitute for the original show seems laughable. And that something is deeply wrong is obvious from the opinion itself, which struggles painfully with tests designed for two works competing in the same market, like that from Learned Hand’s Peter Pan (where the question is whether “the ordinary observer, unless he set out to detect the disparities, would be disposed to overlook them, and regard [the] aesthetic appeal [of the two works] as the same”). It doesn’t make any sense to compare the market appeal of a trivia game and TV show because they do not compete. Similarly, stumped with how to compare the “concept and feel” of a TV show the court simply declined altogether, saying that works in “different genres and media, must necessarily have a different concept and feel.” What the court should have said is that works in different genres are simply not covered by the reproduction right.
A case like Seinfeld is so confused because, at risk of repeating myself, it is absurd to ask whether products that remotely in the same market or genre are copies of each other. It is like asking whether the Superbowl is a copy of “War and Peace,” or whether the LSAT is a copy of Star Wars - the question is nonsense to begin with. It serves as an example of what Felix Cohen once described as law’s tendency to create “pseudo problems, devoid of meaning.”
But like many such questions, the answers have a consequence. And the consequence of cases like Castle Rock is to create genre-spanning reproduction right that helps create the mass infringement problem we’ve discussed in this paper, by making nearly anything that draws on the original an infringement of either §106(1) or 106(2), unless it is fair use.
The better approach, tracking the Seventh Circuit’s suggestions, is as follows. The question of reproduction should be what Arnstein and Paul Goldstein suggest: a copy is a work that misappropriates the market that the original product reasonably could have expected to capture. An adaptation, meanwhile, is a work that is at least a partial substitute for the original product, in the sense of taking that product and adapting it to a different medium, yet retaining the basic structure and purpose of the original product. And finally, a pure complement, like a book review, or yes, a trivia game, is outside of both the §§106(1) and 106(2) rights altogether.
Some might say that this approach strips the adaptation right of any scope. The approach is certainly in tension with some of the caselaw, though it is supported by some as well. But in defense of the approach, I point out that the right of adaptation between media remains - preserving such things as film rights, translations, photocopies of magazine articles, and book versions of a ballet, all of which substitute in part for the original rather than complement it. What would be excluded from the adaptation right under this reading are works which share some content but do not share the object of the original - like fan sites which report information about a show, but which cannot replace the story-telling aspect of the show itself.
I don’t deny that a broad adaptation right, even one that covers complements, may create incentives for authors or publishers to invest more initially. But a too-broad definition of reproduction or adaptation, that leaves nearly nothing out, creates ridiculous results as well. As we’ve already seen, it has created the right so broad that it is no longer even in the interest of owners to try and enforce it. My suggestion is that this construction of the adaptation doctrine might prove a useful way for reducing the pressure created by great expansion of tolerated use. It would move much valuable secondary usage of copyrighted works into a different category - such works would not be adaptations at all, and hence would not have to be ‘tolerated’. Instead, they would simply be works falling outside the ownership of the initial creator.
Another and to my view messier approach is to more rigorously understand complements as generally falling under the heading of fair use. In brief I am suggesting that judges should straightforwardly declare that uses that do not substitute for the original, and instead make the original more valuable, should be considered fair use, end of story.
Today this conclusion is already occasionally reached using factors one and four of the fair use doctrine. Courts examine the purpose of the use, with particularly interest in whether it is transformative and/or commercial. They also ask whether the use in question will substitute in the market. These questions are a way of getting at the idea that a use of the copyrighted work to create a complementary good should be a fair use.
In the current case law, however, the approach is inconsistent and the results often at odds with what I have suggested. Again the Seinfeld case is a good example of how wrong this can go. The court decided the fair use issue by concluding that the trivia game would substitute, not for the TV show, but for a potential trivia game created by the owner:
“…Our concern is not whether the secondary use suppresses or even destroys the market for the original work or its potential derivatives, but whether the secondary use usurps or substitutes for the market of the original work. … The SAT [the “Seinfeld Aptitude Test,” the trivia game] substitutes for a derivative market that a television program copyright owner such as Castle Rock ‘would in general develop or license others to develop.’”
As we discussed before, the court never figured out whether, in fact, the trivia game was actually a derivative work owned by the owner - and the statutory definition of derivative work actually puts that in doubt. But once it assumes that the trivia game is a derivative work, the court’s method means that any secondary work inescapably must be in competition with the imagined derivative.
It goes nearly without saying that the approach is a classic example of “if value then right,” whose problem is circularity. As Felix Cohen wrote in 1935 on the same problem in trademark, the “vicious circle inherent in this reasoning is plain.” The method “purports to base legal protection upon economic value,” wrote Cohen, “when, as a matter of actual fact, the economic value of a sales device depends upon the extent to which it will be legally protected.”
The objection to my complement-centered approach is already hinted at: that if complements to original works are either protected, the author may lose income. But it is not completely clear that that is true, based on the definition of what a complement is. There are costs incurred by ignoring the economics of complements. By definition, the complement increases the value of the original work, and in a world of high volume and low value complements, licensing of them is difficult. Today, many pure complements are already tolerated; were they clearly made legal, more might be produced.
Wu's suggested approach would have tremendous impact on fansites such as The Leaky Cauldron, Mugglenet and many others. Infringing material would not have to be tolerated and under threat of removal since it would be legally protected. Such cites report on and build enthusiasm for the original work but do not compete with it directly. This would have the additional benefit of protecting the high dollar markets such as licensed movie adaptations for the author. Other copyright experts have expressed a desire to open that market believing that the movie licensed and clearly influenced by the author will likely be the best anyway. Such an approach would allow multiple versions of the Potter movies that would compete with the licensed Warner Brothers version. Personally I think this might be a bit of an extreme change that might harm the author unnecessarily. I will freely admit that I haven't really examined the arguments for such a change very closely, however.
What I like about Wu's approach is that it deals with the concerns raised in the Lexicon case head on. Clearly any author who wants to write a complementary work such as an encyclopedia can claim infringement and effectively destroy the market for a competing entry. Without the benefit of Stanford pro-bono involvement, RDR would be completely at a loss to effectively make their case in court. The copyright owner, in effect, can expand their copyright protection by virtue of deeper pockets rather than the strength of their case.