Cross-posted on the Law Theories blog.

The petitioners have filed their reply brief in the Aereo appeal, and I’m thrilled to see their focus on who supplies the content—a standard for differentiating cloud computing sheep from goats that I’ve been advocating (see here and here).

Right out of the gate, the petitioners note that Aereo supplies the content:

Congress could hardly have been clearer that it did not want technological advances (or, in Aereo’s case, gimmicks) to undermine its basic policy judgment that a third party should not be able to build a business model out of supplying performances of the copyrighted works of others to the public without authorization.1

And the petitioners point out that this makes Aereo different than other cloud computing services:

Nor is there any merit to Aereo’s suggestion that its service is indistinguishable from legitimate cloud computing services. There is an obvious difference between providing storage for content that the end-user independently possesses and making the content itself available to anyone who pays a fee.2

Aereo is not just like any other cloud computing service. Aereo’s subscribers utilize its service to obtain content in the first instance—content that Aereo itself supplies via its tens of thousands of tiny antennae. It doesn’t matter how Aereo supplies the content (uploads, cameras, antennae, etc.). It matters whether Aereo supplies the content. And obviously it does—that’s the very service Aereo provides. Subscribers pay Aereo eight or twelve bucks a month because they want the content Aereo supplies. Without that content, there is no Aereo. In fact, the only content available on Aereo’s service is the content that Aereo itself supplies.

This concept of who the supplies the content is nothing new. If I buy and download a song from iTunes, there is no doubt that iTunes is publicly distributing the content that it supplies. If I use Spotify to stream one of my favorite songs, there is no doubt that Spotify is publicly performing the content that it supplies. And if I look up a law review article on Westlaw, there is no doubt that Westlaw is publicly displaying the content that it supplies. And the fact that I press a button to initiate things doesn’t change the public nature of the distribution, performance, or display.

The difference between all of these services and the kind of passive cloud computing service that Aereo erroneously likens itself to is that these services supply the content in the first instance. Aereo is nothing like, say, Microsoft’s OneDrive, where I have been saving drafts of this post. Aereo instead—like iTunes, Spotify, and Westlaw—supplies the content to members of the public who wish to obtain that content in the first place.

An amicus brief supporting Aereo, filed by a group of thirty-six intellectual property and copyright law professors, argues that Aereo’s service is just like Sony’s VCR:

The Aereo system is the functional equivalent of the Sony Betamax: consumers use it to record television programs for subsequent playback to themselves.3

In their opinion, Aereo lacks the necessary volitional conduct to be held directly liable:

As in Sony, consumers are using a technology to record copyrighted works for their later enjoyment. As in Sony, consumers make every specific decision about how to use the technology. They choose which television programs to record, for how long to record them, when to watch those programs later, for how long to watch them, and when to discard previously stored programs. Consumers call all of the shots. On the present record, if anyone here is a direct infringer, it is the consumers. Aereo lacks the necessary “aspect of volition” to be held directly rather than secondarily liable.

This rule—the “volitional conduct” doctrine—has an impeccable pedigree. Every Court of Appeals to have considered the volitional conduct doctrine has adopted it. In addition, District Courts in another three circuits have endorsed the doctrine.4

I wholeheartedly agree that the volitional conduct test has an “impeccable pedigree” and that it should be applied here to determine whether Aereo is a direct infringer. Properly understood, the volitional conduct test simply looks at the actions taken by the defendant that brought about the particular copying (in the broad sense) at issue. The test, in other words, is causation. And the notion that liability turns on causation is not some special rule applicable only to copyright infringement. It’s foundational to tort law generally.

As with all torts, the question is whether the defendant’s tortious conduct was the legal cause—a term of art—of the violation of the plaintiff’s legal right:

The words “legal cause” . . . denote the fact that the causal sequence by which the actor’s tortious conduct has resulted in an invasion of some legally protected interest of another is such that the law holds the actor responsible for such harm unless there is some defense to liability.5

In order for the defendant’s conduct to be the legal cause of the injury,6 “the act or omission must be a substantial factor in bringing about the harm.”7 “Substantial” denotes “the fact that the defendant’s conduct has such an effect in producing the harm as to lead reasonable men to regard it as a cause.”8 The law is not interested in all conduct that brings about the injury, i.e., the factual causes of the injury. Indeed, such causes could conceivably “stretch back to the dawn of human history.”9 The law instead focuses on proximate causation, which is “shorthand for a concept: Injuries have countless causes, and not all should give rise to legal liability.”10

But where to draw the line between those factual causes that are proximate and those that are not? As with perhaps all line drawing, there’s a certain arbitrariness to it:

What we do mean by the word ‘proximate’ is that, because of convenience, of public policy, of a rough sense of justice, the law arbitrarily declines to trace a series of events beyond a certain point. This is not logic. It is practical politics.11

I take a less cynical view, but I think the arbitrariness is easy to misunderstand. There’s nothing arbitrary about holding a defendant liable for an injury that he factually caused. The arbitrariness comes from not holding a defendant liable for an injury, even though he factually caused it. And the reason proximate causation analysis is somewhat arbitrary in nature is because it has to be:

[T]he infinite variety of claims that may arise make it virtually impossible to announce a black-letter rule that will dictate the result in every case. Instead, previously decided cases identify factors that circumscribe and guide the exercise of judgment in deciding whether the law affords a remedy in specific circumstances.12

Since it’s impossible to create a rule that encompasses every possible way of causing an injury, it’s left to the courts to fashion the contours of the proximate causation analysis. This common law tradition applies in copyright law as it does in all tort law. Copyhype’s ever-brilliant Terry Hart has identified a list of factors that courts have considered while analyzing causation, such as the location of the equipment and who supplies the content. These factors are relevant because they go to whether the defendant is a substantial cause of the copying.

This proximate causation analysis should not be misperceived as a balancing test, such as the one employed when a court determines whether a given use by a defendant is fair. These factors are not relevant because they’ve survived some ad hoc or categorical balancing of the plaintiff’s and defendant’s interests. They are relevant, where applicable, because they represent commonly-occurring conduct by a defendant that goes to whether the defendant caused the copying at issue to occur.

Getting back to the amicus brief submitted by the thirty-six intellectual property and copyright law professors, I think their analogy between Sony’s VCR and Aereo’s service is unpersuasive because the volitional conduct with each is significantly different. Of course, Sony concerned the reproduction right, while Aereo concerns the public performance right. But, more fundamentally, Sony’s liability was ultimately analyzed under the rubric of indirect infringement—and not direct infringement as we have here with Aereo—because Sony’s conduct was sufficiently remote such that it was not directly causing the copying at issue.

While we may tend to think of Sony as a contributory liability case, the fact is that the copyright owner plaintiffs also argued for direct liability in the district court. In support of this claim, the plaintiffs cited Elektra,13 a case that is eerily on point here with Aereo. There, the defendants operated a store where blank tapes, coin-operated tape-duplicating machines, and prerecorded copyrighted works were offered to the public for in-store use. The district court found that the plaintiffs had demonstrated a strong likelihood of success on the merits as to their claim for direct infringement.

But, in analyzing the legality of the VCR, the district court in Sony found Elektra inapposite because the “involvement of the defendants in the infringing activity” there “was much more substantial and direct than that alleged against defendants here.”14 And central to this finding was the fact that Sony did not supply the content:

“Defendants Sony and Sonam manufacture and market the Betamax and blank tapes. They do not, however, loan or otherwise provide the copyrighted work.”15

Thus, even though the defendants in Elektra and Sony both supplied the blank tapes and the copy machines, the cases were distinguishable because, among other things, the defendants in Sony did not also supply the content.

Later in the litigation, this factor was also invoked by the Supreme Court: “Petitioners in the instant case do not supply Betamax consumers with respondents’ works; respondents do.”16 Other factors, such as “the range of [the VCR's] potential use” and the fact that Sony was not “in a position to control the use of copyrighted works by others” played a part in the Court’s analysis as well.17 The Court found it relevant that Sony’s only contact with the users of its VCRs happened at the point of sale. Subsequent to that sale, Sony maintained no direct control over the allegedly infringing activity of those users.

Aereo thus stands in stark contrast to Sony. Like the defendants in Elektra, Aereo does more than simply supply the modern equivalent of blank tapes and copy machines—Aereo supplies the content as well. And unlike Sony’s VCR, Aereo’s service does not have a wide range of potential uses. In fact, the only content that can be reproduced and performed with Aereo’s service is the content that Aereo itself supplies. Moreover, in contrast to Sony, Aereo maintains an ongoing relationship with its subscribers, retaining direct control over its entire service at all times. These differences are significant, and they’re relevant here because they go to causation.

The Aereo petitioners similarly rebut the Sony argument in their reply brief:

Aereo nonetheless attempts to liken itself to a . . . VCR manufacturer, insisting that it is not performing because the user “presses the button to make the recording[]” that Aereo uses to retransmit broadcast television. But Aereo ignores . . . the multiple features that distinguish its examples – including that the . . . VCR manufacturer suppl[ies] only the equipment for copying content, while users supply the content.18

The petitioners point out that a VCR is worthless without access to content, and in contrast to Sony’s VCR, “the whole point of Aereo’s service is to provide access to the content.”19 The petitioners note that Aereo markets itself as providing a means of watching live television, and the only content available with Aereo’s service is the content that Aereo itself supplies. By arguing that it’s just like a VCR—or even a remote DVR for that matter—the petitioners remind us that Aereo “elides the question of where the content being recorded came from.”20

Furthermore, as the petitioners rightly indicate:

[W]ithout the content the antenna receives, Aereo’s DVR functionality would be useless. And where a service like Aereo provides the users with content, it cannot coherently argue that the user is the only one performing that content.21

This is the same rule that applies with services such as iTunes, Spotify, and Westlaw, mentioned above. These services are the ones publicly distributing, performing, or displaying the content because the content made available to the public is supplied by the services themselves. And the same holds true for Aereo:

Because Aereo is offering not just a piece of equipment, but an integrated service that includes access to copyrighted content, its efforts to suggest that it is a mere equipment supplier and only its subscribers perform are doomed.22

This case isn’t about the legality of a DVR or even of the cloud itself. The petitioners are not challenging the notion that time-shifting is fair use or that legally-possessed content can be stored and accessed in the cloud. The petitioners instead are simply arguing that Aereo is a direct infringer because Aereo itself supplies the content to its subscribers. By doing so, Aereo’s conduct is sufficiently proximate such that it has substantially caused the performance to occur. What Aereo does with the content it supplies is no different than what iTunes, Spotify, and Westlaw do—except for the fact that those services have licenses to supply the content, of course.

Follow me on Twitter: @devlinhartline

Footnotes

  1. Reply Brief for Petitioners, American Broadcasting Companies, Inc. v. Aereo, Inc., No. 13-461, 2014 WL 1430768 at *1 (U.S. April 14, 2014). []
  2. Id. at *3. []
  3. Brief of 36 Intellectual Property and Copyright Law Professors as Amici Curiae in Support of Respondent, American Broadcasting Companies, Inc. v. Aereo, Inc., No. 13-461, 2014 WL 1348474 at *1 (U.S. April 2, 2014). []
  4. Id. at *6 (internal citations omitted). []
  5. Restatement (Second) of Torts § 9 (1965). []
  6. An “injury” is simply the “violation of another’s legal right, for which the law provides a remedy.” Black’s Law Dictionary (9th ed. 2009). []
  7. Restatement (Second) of Torts § 9, cmt. a (1965). []
  8. Restatement (First) of Torts § 431 (1934). []
  9. Laborers Local 17 Health & Benefit Fund v. Philip Morris, Inc., 191 F.3d 229, 235 (2d Cir. 1999). []
  10. CSX Transp., Inc. v. McBride, 131 S.Ct. 2630, 2637 (2011). []
  11. Palsgraf v. Long Island R. Co., 248 N.Y. 339, 352 (1928) (Andrews, J., dissenting); but see Laborers Local 17, 191 F.3d at 235 (“Proximate cause is an elusive concept, one always to be determined on the facts of each case upon mixed considerations of logic, common sense, justice, policy and precedent.”) (internal quotations and citations omitted). []
  12. Associated Gen. Contractors of California, Inc. v. California State Council of Carpenters, 459 U.S. 519, 535-37 (1983). []
  13. Elektra Records Co. v. Gem Elec. Distributors, Inc., 360 F.Supp. 821 (E.D.N.Y. 1973). []
  14. Universal City Studios, Inc. v. Sony Corp. of Am., 480 F.Supp. 429, 458 (C.D. Cal. 1979). []
  15. Id. []
  16. Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 436-37 (1984). []
  17. Id. at 437. []
  18. Reply Brief for Petitioners, supra note 1, at *16. []
  19. Id. at *17. []
  20. Id. []
  21. Id. at *18. []
  22. Id. []

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Cross-posted on the Law Theories blog.

With Aereo’s upcoming oral argument before the Supreme Court, I’ve got tens of thousands of tiny antennae on the mind. The novelty—and, of course, the absurdity—of Aereo’s service makes it one of the more interesting copyright puzzles. Most of the issues with Aereo are repetitive of the issues with Cablevision, and debate abounds over whether the number of source copies matters and whether multiple transmissions should be aggregated. I’ve come to view these issues as red herrings. But there’s another red herring that I’d rather discuss here, and that’s whether a decision against Aereo would be the death knell to the cloud. After all, performances are transmitted from Aereo’s service to members of the public just like they are from some cloud computing services. So why shouldn’t we worry?

In my last post about Aereo, I unconcernedly claimed: “This case isn’t about the future of cloud computing companies—those services are protected by the DMCA.” Why we shouldn’t worry about the cloud is certainly in large part answered by the DMCA, but I want to take it a step deeper and show that, even without the DMCA, some cloud computing companies would not incur liability when content is transmitted from their services to members of the public. The key to understanding why such cloud computing companies are not infringers is the key to understanding why Aereo is an infringer, and this turns on application of the volitional conduct test—a test codified in DMCA, but which is applicable in any context where the Transmit Clause is implicated. The volitional conduct test provides us with a way to separate the Aereo-like goats from the cloud computing sheep.

Under the Transmit Clause, it is a public performance to (1) transmit a performance of a work (2) to the public.1 There is no doubt that a performance of a work is being transmitted with Aereo’s service, so (1) is not at issue. The issue is whether this transmission is “to the public,” which is a term of art. Whether a transmission is “to the public” does not depend on the place to which it is sent, and a transmission to a private place can be “to the public” nonetheless. What makes it “to the public” is the relationship between the sender and the receiver, and this relationship, naturally, depends on the identity of each party. When the relationship between the sender and the receiver is a public one, the transmission is a public performance. And when the relationship between the sender and the receiver is a private one, the transmission is a private performance.

In Aereo,2 the Second Circuit focused on the receiver for each transmission, concluding that when there is a one-to-one relationship between the source copy and the receiver, the performance is private—even if we presume that Aereo is the sender. I think this makes no sense. If Aereo is the sender and the subscriber is the receiver, then that relationship is a public one and the transmission is a public performance. The Second Circuit’s reliance on there being a unique source copy for each receiver was misplaced, for the Transmit Clause cares only about who is transmitting to whom. It says nothing about a source copy—and in fact no source copy is even needed to publicly perform via transmission.3 The issue is simply who is directly causing the transmission to occur. Until we know who is transmitting to the receiver, that is, until we identify the sender, we can’t know whether the relationship between the sender and the receiver is a public one such that it’s “to the public.”

Without fair use or the DMCA to fall back on, the Aereo appeal squarely presents the issue of who is directly causing the transmission when a performance of a work is transmitted from Aereo’s service to the subscriber. In other words, the case boils down to who is the direct performer in this scenario. If the subscriber is the direct performer, then the performance is private since the sender and the receiver are the same party and the transmission therefore is not “to the public.” If Aereo is the direct performer, then the performance is public since the relationship between the sender and the receiver is a public one and the transmission therefore is “to the public.” And whether Aereo is the direct performer turns on the volitional conduct test: Is Aereo’s volitional conduct sufficient such that it directly causes the transmission? I think the answer is clearly “yes,” and how I get there is by utilizing the only bright-line rule under the volitional conduct test.

The genesis of the volitional conduct test is the famous Netcom decision,4 penned in 1995 by District Judge Ronald M. Whyte of the Northern District of California. Pre-DMCA, Judge Whyte was faced with deciding the liability of Netcom, an internet service provider, for infringement taking place utilizing its system. Critically, “Netcom was not itself the source of any of the infringing materials on its system,”5 and the issue was whether it could be a direct infringer of the reproduction right nonetheless. Judge Whyte held that it could not: “Although copyright is a strict liability statute, there should still be some element of volition or causation which is lacking where a defendant’s system is merely used to create a copy by a third party.”6 Since “such copies are uploaded by an infringing user,” Judge Whyte continued, Netcom’s actions were not a direct infringement of the reproduction right.7

Judge Whyte acknowledged that copyright infringement is a strict liability tort, meaning that neither knowledge nor intent to infringe need be shown. However, strictly applying that strict liability to reproductions occurring in cyberspace “would hold the entire Internet liable for activities that cannot reasonably be deterred.”8 Grounded in the policy argument that “it does not make sense to adopt a rule that could lead to the liability of countless parties whose role in the infringement is nothing more than setting up and operating a system that is necessary for the functioning of the Internet,” Judge Whyte proposed a dichotomy between a passive conduit, which provides only dumb pipes used by others to copy, and an active participant, which takes affirmative steps to bring about the copying.9 And central to Judge Whyte’s holding that Netcom was a passive conduit was the fact that it was the users who uploaded the content to Netcom’s service in the first place.

The key to understanding Netcom and its progeny is to recognize that the volitional conduct test is not used to determine whether a service provider should be held directly liable in the first place. Instead, a service provider seeks Netcom immunity because, without it, it would otherwise be a direct infringer. The volitional conduct test is perhaps best understood in terms of causation: Even though, because of strict liability, every service provider that is the cause-in-fact of the copying is thereby a direct infringer, certain service providers are nevertheless not directly liable for the copying because their actions are sufficiently remote. Perhaps the leading iteration of the volitional conduct test comes from the Fourth Circuit in CoStar:

[T]o establish direct liability under §§ 501 and 106 of the Act, something more must be shown than mere ownership of a machine used by others to make illegal copies. There must be actual infringing conduct with a nexus sufficiently close and causal to the illegal copying that one could conclude that the machine owner himself trespassed on the exclusive domain of the copyright owner.10

The volitional conduct test has also been adopted by the Second and Ninth Circuits,11 as well as by several district courts.12 In fact, Congress baked Netcom immunity under the volitional conduct test right into the DMCA.13 For example, Section 512(c) grants a qualifying service provider immunity “for infringement of copyright by reason of the storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider.”14 The Second Circuit in YouTube and the Ninth Circuit in Shelter Capital read this language very broadly, finding that even transcoding and indexing user-submitted content to facilitate its public playback was protected by the safe harbor.15 While Section 512(c) protects a service provider for many automated acts that occur after a user uploads content to the service, the one thing it doesn’t provide immunity for is content supplied by the service provider itself.

How the volitional conduct test operates in the cloud is demonstrated in the Hotfile case, where the district court stated:

Thus, the law is clear that Hotfile and [the owner] are not liable for direct copyright infringement because they own and manage internet facilities that allow others to upload and download copyrighted material. . . . [T]he website hotfile.com merely allows users to upload and download copyrighted material without volitional conduct from Hotfile or [the owner]. . . . [N]othing in the complaint alleges that Hotfile or [the owner] took direct, volitional steps to violate the plaintiffs’ infringement. There are no allegations, say, that Hotfile uploaded copyrighted material. Therefore, under the great weight of authority, the plaintiffs have failed to allege direct copyright infringement.16

Because neither Hotfile nor the owner had engaged in sufficient volitional conduct, by, for example, uploading the infringing content at issue, the district court found that they could not be held directly liable for the infringement that occurred. Contrasted with Hotfile is Tasini,17 where the Supreme Court held that a database provider was directly liable for violating the public distribution right for content that it had supplied and made available as part of its publicly-accessible database. Because the database provider had supplied the infringing content at issue, this was a sufficient condition for finding that it was a direct infringer.

The import of all this is that where the service provider itself supplies the infringing content that is publicly distributed, displayed, or performed, that service provider can claim neither Netcom immunity nor DMCA immunity. Supplying the infringing content is sufficient for finding that the service provider has directly caused the infringement to occur—but it’s not necessary for such a finding. In other words, if the service provider itself supplies the infringing content, then it is a direct infringer. But sometimes the service provider can also be a direct infringer even if it did not supply the infringing content. This happens when the service provider engages in other volitional conduct “with a nexus sufficiently close and causal to the illegal copying,” to borrow the Fourth Circuit’s phrase, such that it is not only the factual cause of the copying, but the legal cause as well.

For example, in Megaupload, the district court found that the plaintiff had alleged that Kim Dotcom’s infamous website “serves as more than a passive conduit, and more than a mere ‘file storage’ company.”18 Several facts, including Megaupload’s reward program where it paid users to upload content, meant that Megaupload had possibly crossed the line from being a passive conduit to being an active participant in the infringement. Similarly, in Usenet, the district court found that the bulletin board service was “not merely a ‘passive conduit’ that facilitates the exchange of content between users who upload infringing content and users who download such content.”19 The “active measures” and “active steps” engaged in by the defendants “transformed [them] from passive providers of a space in which infringing activities happened to occur to active participants in the process of copyright infringement.”20

Like all proximate causation analysis, the volitional conduct test involves both art and science, and courts engaging in it typically juggle somewhat-vague concepts of foreseeability and temporality with normative decisions about social justice.21 As Dean William Prosser, author of Prosser on Torts and Reporter for the Restatement (Second) of Torts, put it, proximate causation is “our more or less inadequately expressed ideas of what justice demands.”22 Exactly how much volitional conduct it takes for a service provider to cross the line from passive conduit to active participant, no one can say. The analysis is, necessarily, somewhat arbitrary. The only bright-line criteria that exists under the volitional conduct test is that of who supplies the infringing content. When it’s the service provider itself, the volitional conduct on the part of the service provider is sufficient to find it directly liable.

This past week, District Judge Dale A. Kimball of the District of Utah found that the plaintiffs were likely to succeed on the merits against Aereo because it “provid[es] paying customers with retransmission of copyrighted works.” And this gets to the heart of why Aereo should lose before the Supreme Court. Aereo has crossed the line from being a passive conduit to being an active participant because it supplies the very content that is available using its service. Presumably, this is at least part of the reason why Aereo does not argue that Section 512(c) gives it DMCA immunity. Aereo cannot maintain that the content residing on its service is “by reason of the storage at the direction of a user” because the content comes from Aereo itself. The subscriber doesn’t go to Aereo to upload the content he already has to the cloud; the subscriber goes to Aereo to get the content he wants but doesn’t yet have—content which Aereo itself supplies.

The reason why Aereo, and not the subscriber, is the direct performer is simple. Because of copyright’s strict liability nature, every party that is the cause-in-fact of the copying is a direct infringer unless some other doctrine absolves that party from direct liability. The volitional conduct test uses a proximate causation analysis to determine whether a party’s actions are sufficiently remote such that it should not be held directly liable for the infringement. While the metes and bounds of the volitional conduct test are imprecise, to say the least, there is one bright-line rule: When the service provider itself supplies the very content at issue, that service provider’s actions can never be sufficiently remote to absolve it of direct liability. Because Aereo itself supplies the very content at issue—by implementing and making available its system of tens of thousands of tiny antennae that receive and retransmit performances—Aereo is the identity of the sender. And since the relationship between the sender (Aereo) and the receiver (the subscriber) is a public one, the transmission is a public performance.

The argument that it is Aereo’s subscriber, and not Aereo itself, who is the sender is untenable. The Transmit Clause was enacted to capture any service doing exactly what Aereo does, namely, retransmitting a broadcast to the public by any means possible. The petitioners in Aereo do a great job of traversing the history of the Transmit Clause in their opening brief before the Supreme Court, but the short version is this: The Supreme Court had held in a pair of cases that a community antenna television system or a cable system that captured an over-the-air broadcast and retransmitted it to the public was not engaged in a public performance.23 Congress enacted the Transmit Clause to legislatively overrule these two cases, and the words Congress chose, namely, “any device or process” used to transmit a performance, leave no doubt that its concern was with the function of the device or process utilized to make the transmission—not the underlying technical details of the device or process itself.24

Aereo’s argument boils down to it claiming that, even though the Transmit Clause on its face applies to “any device or process” that transmits a performance to the public, its particular device or process is somehow so special under-the-hood that the Transmit Clause doesn’t reach it. The problem with this argument is that the Transmit Clause means what it says, and it’s no answer to say that Aereo is simply doing for a subscriber what he could do for himself. This was the Supreme Court’s reasoning in the two cases the Transmit Clause was enacted to overrule. And even if we accept the argument that Aereo’s subscribers are really lessees of its equipment, the outcome is the same. The test is volitional conduct, and the conduct that matters is the conduct that Aereo itself has actually engaged in. If Aereo’s own actions are sufficient to find it directly liable absent any lease relationship, then its own actions are necessarily sufficient to find it directly liable even with the lease relationship. Because unless there is also some agency relationship between Aereo and its subscriber—for example, if Aereo were the subscriber’s employee—then Aereo’s own actions are only attributable to itself.

Cloud computing companies need not be worried about the outcome of the Aereo appeal because these service providers will continue to be protected by Netcom immunity under the volitional conduct test or by DMCA immunity. Assuming such service providers are protected by the DMCA, there’s an expansive amount of volitional conduct they can engage in without losing their safe harbor. How much volitional conduct they can engage in without losing Netcom immunity is less clear, but what is clear is that when a service provider itself supplies the very content at issue, there is no immunity under either the volitional conduct test or the DMCA. If Aereo loses before the Supreme Court, as I believe they should, it won’t negatively affect cloud computing companies because there is no reason for the Court to look any further than the fact that Aereo supplies the very content at issue. If anything, the Court’s decision will further cement into place the one bright-line rule that there is with the volitional conduct test, and this clarity in the law will redound to the cloud.

Special thanks to Terry Hart and Jonathan Greenfield for their valuable feedback in drafting this post.

Follow me on Twitter: @devlinhartline

Footnotes

  1. See 17 U.S.C.A. § 101 (West 2014) (“To perform or display a work ‘publicly’ means– (1) to perform or display it at a place open to the public or at any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered; or (2) to transmit or otherwise communicate a performance or display of the work to a place specified by clause (1) or to the public, by means of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times. *** To ‘transmit’ a performance or display is to communicate it by any device or process whereby images or sounds are received beyond the place from which they are sent.”). []
  2. See WNET, Thirteen v. Aereo, Inc., 712 F.3d 676 (2d Cir. 2013). []
  3. For example, live performances and television broadcasts can be captured and transmitted to the public even though the sender possesses no source copy. []
  4. See Religious Tech. Ctr. v. Netcom On-Line Commc’n Servs., Inc., 907 F.Supp. 1361 (N.D. Cal. 1995). []
  5. Id. at 1367. []
  6. Id. at 1370. []
  7. Id. at 1371. []
  8. Id. at 1372. []
  9. Id. []
  10. CoStar Grp., Inc. v. LoopNet, Inc., 373 F.3d 544, 550 (4th Cir. 2004). []
  11. See Cartoon Network LP, LLLP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008); Fox Broad. Co., Inc. v. Dish Network L.L.C., Case No. 12-cv-57048, 2014 WL 260572 (9th Cir. Jan. 24, 2014). []
  12. See, e.g., Field v. Google Inc., 412 F.Supp.2d 1106 (D. Nev. 2006); Playboy Enterprises, Inc. v. Webbworld, Inc., 991 F.Supp. 543 (N.D. Tex. 1997); Playboy Enterprises, Inc. v. Russ Hardenburgh, Inc., 982 F.Supp. 503 (N.D. Ohio 1997); Disney Enterprises, Inc. v. Hotfile Corp., 798 F.Supp.2d 1303 (S.D. Fla. 2011). []
  13. See, e.g., H.R. Rep. 105-551(I), at *11 (“As to direct infringement, liability is ruled out for passive, automatic acts engaged in through a technological process initiated by another. Thus, the bill essentially codifies the result in the leading and most thoughtful judicial decision to date: Religious Technology Center v. Netcom On-line Communications Services, Inc., 907 F. Supp. 1361 (N.D. Cal. 1995).”); ALS Scan, Inc. v. RemarQ Communities, Inc., 239 F.3d 619, 622 (4th Cir. 2001) (“[T]he ultimate conclusion on this point is controlled by Congress’ codification of the Netcom principles in Title II of the DMCA.”). []
  14. 17 U.S.C.A. § 512(c) (West 2014). []
  15. See Viacom Int’l, Inc. v. YouTube, Inc., 676 F.3d 19, 39 (2d Cir. 2012); UMG Recordings, Inc. v. Shelter Capital Partners LLC, 718 F.3d 1006, 1016 (9th Cir. 2013). []
  16. Disney Enterprises, Inc. v. Hotfile Corp., 798 F.Supp.2d 1303, 1308 (S.D. Fla. 2011) (internal citations and paragraph break omitted). []
  17. New York Times Co., Inc. v. Tasini, 533 U.S. 483 (2001). []
  18. Perfect 10, Inc. v. Megaupload Ltd., Case No. 11-cv-0191, 2011 WL 3203117, at *4 (S.D. Cal. July 27, 2011). vacated pursuant to settlement, 2011 WL 10618723 (S.D. Cal. Oct. 11, 2011). []
  19. Arista Records LLC v. Usenet.com, Inc., 633 F.Supp.2d 124, 149 (S.D.N.Y. 2009). []
  20. Id. (internal quotations, citations, and brackets omitted). []
  21. See Mark Bartholomew & Patrick F. McArdle, Causing Infringement, 64 Vand. L. Rev. 675, 703 (2011). []
  22. Id. (internal quotations and footnote omitted). []
  23. See Fortnightly Corp. v. United Artists Television, Inc., 392 U.S. 390 (1968); Teleprompter Corp. v. Columbia Broad. Sys., Inc., 415 U.S. 394 (1974). []
  24. See, e.g., H.R. Rep. No. 94-1476, at *63 (1976) (A performance occurs “either directly or by means of any device or process, including . . . any sort of transmitting apparatus, any type of electronic retrieval system, and any other techniques and systems not yet in use or even invented.”); id. at *64 (“The definition of ‘transmit’ . . . is broad enough to include all conceivable forms and combinations of wires and wireless communications media, including but by no means limited to radio and television broadcasting as we know them. Each and every method by which the images or sounds comprising a performance . . . are picked up and conveyed is a ‘transmission,’ and if the transmission reaches the public in [an]y form, the case comes within the scope of clause[] (4) . . . of section 106.”). []

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Cross-posted on the Law Theories blog.

Now that the Supreme Court has agreed to hear the Aereo appeal, I want to offer a simple explanation of the central legal issue before the Court. Much has been written about Aereo, but surprisingly little of it discusses the actual question the Court will decide. There is no doubt that Aereo is performing works as it retransmits them to its customers—that’s the very service that Aereo provides. The fundamental legal point the Court will determine is whether those performances are public or private. If public, they’re infringing, and if private, they’re not. Don’t let the argle-bargle being tossed out by bloggers and commentators distract you from this simple point.

Lots of arguments being offered by copyright critics are simply wrong. This case isn’t about the future of cloud computing companies—those services are protected by the DMCA. It isn’t about the length of any cord—no matter how long the cord is, the legal question is the same. Nor is it about Aereo simply doing something that a customer could do himself—the fact is that the customer isn’t doing it himself since Aereo is helping him do it. And it certainly isn’t about thwarting the progress of innovation—Aereo’s design is rather ridiculous, and it’s only “innovative” in that it retransmits broadcasts without paying any fees.

The Copyright Act gives copyright owners the exclusive right “to perform the copyrighted work publicly.”1 A work can be performed publicly in one of three ways. The first is by performing the work at a place open to the public or at a place where people outside of one’s family and friends congregate.2 An example of this would be putting on a play at a theater where tickets are available to the general public. The second is by transmitting a performance of the work to a place open to the public or to a place where people outside of one’s family and friends congregate.3 An example of this would be an opera house that transmits a performance to a movie theater where tickets are available to the general public.

The final way a work can be performed publicly is by transmitting a performance of the work to the public, by whatever means, whether the transmission of the performance can be received in one place or in many places and at one time or at many times. An example of this would be a broadcaster that transmits a television show to the general public over the airwaves. This last way of performing a work publicly is the one that’s at issue here with Aereo, and the operable statutory text comes from the last section of what is called the “Transmit Clause” in Section 101 of the Copyright Act. The outcome of the Aereo appeal will turn on how the Supreme Court parses this section of the Transmit Clause, which provides:

To perform . . . a work “publicly” means . . . to transmit or otherwise communicate a performance . . . of the work . . . to the public, by means of any device or process, whether the members of the public capable of receiving the performance . . . receive it in the same place or in separate places and at the same time or at different times.4

Note how this opens up four possibilities, all of which are public performances of a work. The transmission of a performance of a work to the public is a public performance if it is capable of being received: (1) in the same place and at the same time, (2) in separate places and at the same time, (3) in the same place and at different times, and (4) in separate places and at different times. These various possibilities are very important here with Aereo because they show that the same public performance of a work can occur via multiple asynchronous transmissions to the public. An example of this would be a work streamed from YouTube—a distinct transmission occurs whenever a member of the general public initiates playback, and despite the asynchronous transmissions, YouTube is publicly performing the work.

The Transmit Clause tells us that several distinct transmissions of a performance to the public, capable of being received in separate places and at different times, can be aggregated together as constituting one single public performance. The tricky part is figuring out when to aggregate multiple transmissions of a performance. And this gets us to the crux of the arguments in the Aereo appeal. The petitioners argue that Aereo’s distinct transmissions to its customers should be aggregated together as constituting part of the same performance, and this would mean the performance is public. Aereo, on the other hand, argues that its distinct transmissions to its customers should not be aggregated, and this would mean that there are several performances which are all private.

The reason Aereo argues that its distinct transmissions of a performance to its customers should not be aggregated is because they are made from unique copies of the underlying work. If YouTube uses only one source copy of a work to make multiple transmissions of a performance to the public, the case law tells us that those distinct transmissions should be aggregated together as constituting part of the same public performance. But Aereo argues that when each distinct transmission of a performance arises from a unique copy, this one-to-one relationship between the source copy and the customer means that multiple transmissions should not be aggregated. Whether there is any legal difference between using one source copy or multiple source copies for these transmissions of a performance forms the key question to be decided by the Supreme Court.

The notion that the private-public performance divide turns on whether the source of the transmissions comes from one copy or from multiple copies can be traced back to the influential Nimmer on Copyright treatise. In the famous Cablevision case,5 the Second Circuit adopted Nimmer’s view that a one-to-one relationship between the source copy and the customer means that multiple transmissions of a performance to the public should not be aggregated, thus making them separate private performances. According to the Cablevision court, when a unique copy is used to transmit a performance of a work to a customer, the only transmission that counts is that particular transmission—other transmissions made to other customers from other copies of the work are irrelevant.

But, as the petitioners in the Aereo appeal point out, this one source copy theory has no textual basis in the Transmit Clause. The Transmit Clause defines what it means to perform a work publicly, and the fact that the same public performance of a work can be received by the public in separate places and at different times tells us that multiple transmissions of a performance can constitute the same public performance. The Transmit Clause says nothing about the number of source copies used to make these multiple transmissions—the words “copy” or “copies” do not appear in the Transmit Clause. What matters is whether the public is capable of receiving the same performance of a work; the number of source copies used to transmit this performance is irrelevant.

The fault with the Second Circuit’s reasoning in Cablevision, and its subsequent application in Aereo,6 is in how it misinterprets the word “performance” in the following section of the Transmit Clause: “whether the members of the public capable of receiving the performance . . . receive it in the same place or in separate places and at the same time or at different times.” The Second Circuit replaced the word “performance” with the word “transmission,” and under this construction, the focus is on the audience of a particular transmission. But while a transmission of a performance is itself a performance, the words “transmission” and “performance” are not synonymous and interchangeable.

Thus, under the Second Circuit’s reading of the Transmit Clause, what matters is the potential audience of each distinct transmission. But the Transmit Clause tells us that the proper focus is on the audience of a performance, not the audience of any particular transmission of a performance. The problem with focusing on who is capable of receiving a particular transmission of a performance is that it reads the “different times” language out of the Transmit Clause. The Second Circuit realized as much, and that’s why it read into the Transmit Clause a distinction between one source copy and multiple source copies.7

Given the fact that the Transmit Clause makes no reference to the number of source copies used to generate multiple transmissions of a performance, and given the fact that the Transmit Clause by its very terms says to focus on who is capable of receiving a performance of a work—and not any particular transmission of a performance of a work—I think the Supreme Court should reverse the Second Circuit’s misapplication of the Transmit Clause in Aereo—and, by extension, in Cablevision. What matters is the fact that Aereo’s customers are capable of receiving the same performance of a work, despite the fact that this performance is comprised of distinct transmissions made from distinct copies.

Follow me on Twitter: @devlinhartline

Footnotes

  1. 17 U.S.C.A. § 106(4) (West 2014). []
  2. See 17 U.S.C.A. § 101 (West 2014) (“To perform . . . a work ‘publicly’ means . . . to perform . . . it at a place open to the public or at any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered.”). []
  3. See 17 U.S.C.A. § 101 (West 2014) (“To perform . . . a work ‘publicly’ means . . . to transmit or otherwise communicate a performance . . . of the work to a place specified by clause (1),” i.e. “a place open to the public or . . . any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered.”). []
  4. 17 U.S.C.A. § 101 (West 2014). []
  5. See Cartoon Network LP, LLLP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008). []
  6. See WNET, Thirteen v. Aereo, Inc., 712 F.3d 676 (2d Cir. 2013), petition for rehearing en banc denied, WNET, Thirteen v. Aereo, Inc., 722 F.3d 500 (2d Cir. 2013). []
  7. See Aereo, 712 F.3d at 688 n.11 (“The Cablevision court’s focus on the potential audience of each particular transmission would essentially read out the ‘different times’ language, since individuals will not typically receive the same transmission at different times. But Nimmer’s solution—aggregating private transmissions when those transmissions are generated from the same copy—provides a way to reconcile the ‘different times’ language of the Clause.”). []

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Cross-posted on the Law Theories blog.

The making available issue takes center stage today on Capitol Hill as the House Subcommittee on Courts, Intellectual Property, and the Internet holds a hearing on “The Scope of Copyright Protection.” Copyright treatise author Professor David Nimmer argues for the making available right (testimony available here), and Tulane Law Professor Glynn S. Lunney, Jr., who just so happens to be my doctoral advisor, argues against it (testimony available here).

In two previous posts about the making available issue (available here and here), I suggested that the Nimmer treatise had changed its tune on whether merely making a work available constitutes distribution absent actual dissemination. After reading Professor Nimmer’s testimony, as well as reviewing Nimmer1 and the related journal article by Professor Peter S. Menell,2 I realize that I was wrong to say that Nimmer had flip-flopped on the making available question. Professor Nimmer never said that distribution requires evidence of actual dissemination in the first place.

Nimmer used to state: “Infringement of this right [i.e., the distribution right] requires an actual dissemination of either copies or phonorecords.”3 And Nimmer now states: “No consummated act of actual distribution need be demonstrated in order to implicate the copyright owner’s distribution right.”4 On its face, it appears that Nimmer has made a 180 degree turn on whether distribution requires actual dissemination. But the fault with this line of thinking is that, in the first statement, Nimmer was not saying that actual dissemination is an element of a plaintiff’s case-in-chief in proving unlawful distribution. It was instead contrasting distributions with performances.

Section 106(3) gives copyright owners the exclusive right “to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending.”5 Thus, the distribution right only covers “copies or phonorecords,” which are material objects in which works are fixed.6 Performances, by contrast, are ephemeral and unfixed.7 An unauthorized public performance of a work is not a distribution because nothing is fixed in a material object when one performs a work. Distributions involve tangible disseminations, while performances involve disseminations that are intangible.

It should be noted that, despite the “copies or phonorecords” requirement, distributions can occur electronically. This might at first seem strange, since sending someone a file via computer is not the same thing as handing someone a tangible copy. However, the argument that Section 106(3) does not reach electronic distributions is foreclosed by the Supreme Court’s opinion in Tasini.8 Moreover, sending someone a work electronically does involve a tangible copy, because “[w]hat matters . . . is not whether a material object ‘changes hands,’ but whether, when the transaction is completed, the distributee has a material object.”9 The person the file is sent to has a copy fixed in a material object in whatever media he stores the file on, and this fulfills the “copies or phonorecords” requirement under Section 106(3).

Turning back to Professor Nimmer’s testimony, the origin of the earlier statement in Nimmer that infringement of the distribution right “requires an actual dissemination of either copies or phonorecords” stems from the treatise’s account of the Second Circuit’s opinion in Agee.10 In that case, the Second Circuit held that “merely transmitting a sound recording to the public on the airwaves does not constitute a ‘distribution.’”11 In reporting that holding in his treatise, Professor Nimmer stated:

Infringement of this right [i.e., the distribution right] requires an actual dissemination of either copies or phonorecords. A public performance of a work is not a publication and hence, even if unauthorized does not infringe the distribution right. Given that transmissions qualify as public performances, liability for that conduct lies outside the distribution right.12

That first sentence was later quoted out of context by many courts and taken to mean that evidence of actual dissemination is an element of an unlawful distribution claim. But, as Professor Menell explains, that is not the proper interpretation:

That language, written before the emergence of peer-to-peer technology, did not attempt to address its implications for copyright law. It merely contrasted distribution, which requires the dissemination of a copy, with performance, in which no copy need be disseminated. In context, the paragraph simply means that there is no violation of the distribution right when the substance of the copyrighted work has been intangibly dispersed via performance. To violate the distribution right, instead, tangible copies must be at issue. In the peer-to-peer context, uploading followed by downloading results in a “copy” resident on the second peer’s computer, meaning that the tangibility requirement has been met.13

When Nimmer stated that distribution “requires an actual dissemination of either copies or phonorecords,” it was making the point that a distribution involves a work fixed in a material object while a performance does not. That statement had nothing to do with what evidence is necessary to prove an unlawful distribution. Furthermore, the treatise’s current statement that “[n]o consummated act of actual distribution need be demonstrated” is not a reversal from the earlier statement in Nimmer. This newer assertion in the treatise is making an evidentiary point about what proof is needed to establish an unlawful distribution. Thus, Nimmer did not change its tune on the making available issue as I erroneously had stated in my two previous posts.

Follow me on Twitter: @devlinhartline

Footnotes

  1. See 2-8 Nimmer on Copyright § 8.11[C][1][a]-[b] (2013). []
  2. See Peter S. Menell, In Search of Copyright’s Lost Ark: Interpreting the Right to Distribute in the Internet Age, 59 J. Copyright Soc’y U.S.A. 1, 20-21 (2011). []
  3. 2 Nimmer on Copyright § 8.11[A] (1996). []
  4. 2-8 Nimmer on Copyright § 8.11[B][4][d] (2013). []
  5. 17 U.S.C.A. § 106(3) (West 2014). []
  6. See 17 U.S.C.A. § 101 (West 2014) (“‘Copies’ are material objects, other than phonorecords, in which a work is fixed by any method now known or later developed, and from which the work can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device. The term ‘copies’ includes the material object, other than a phonorecord, in which the work is first fixed. *** ‘Phonorecords’ are material objects in which sounds, other than those accompanying a motion picture or other audiovisual work, are fixed by any method now known or later developed, and from which the sounds can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device. The term ‘phonorecords’ includes the material object in which the sounds are first fixed.”). []
  7. See 17 U.S.C.A. § 101 (West 2014) (“To ‘perform’ a work means to recite, render, play, dance, or act it, either directly or by means of any device or process or, in the case of a motion picture or other audiovisual work, to show its images in any sequence or to make the sounds accompanying it audible.”). []
  8. See New York Times Co., Inc. v. Tasini, 533 U.S. 483, 498 (2001) (“LEXIS/NEXIS, by selling copies of the Articles through the NEXIS Database, ‘distribute copies’ of the Articles ‘to the public by sale,’ § 106(3)”); see also Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146, 1162 (9th Cir. 2007) (“The Supreme Court has indicated that in the electronic context, copies may be distributed electronically.”). []
  9. London-Sire Records, Inc. v. Doe 1, 542 F.Supp.2d 153, 174 (D. Mass. 2008). []
  10. Agee v. Paramount Commc’ns, Inc., 59 F.3d 317 (2d Cir. 1995). []
  11. Id. at 325. []
  12. 2 Nimmer on Copyright § 8.11[A] (1996). []
  13. Menell, 59 J. Copyright Soc’y U.S.A. at 21. []

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January 02, 2014 · · Comments Off

Cross-posted on the Law Theories blog.

Representing himself before the U.S. Court of Appeals for the Tenth Circuit, Andrew Diversey has managed to set a very interesting precedent (opinion available here or here). Senior Circuit Judge Terrence L. O’Brien, writing for a unanimous panel, held that when a library adds a work to its collection, indexes it, and makes it available to library patrons, a distribution is deemed to have occurred even if there is no evidence that any patron actually accessed the work.

The underlying brouhaha concerned Diversey’s dissertation as a doctoral candidate at the University of New Mexico. Against his express wishes, two copies of his dissertation had been made available to the public in the school’s libraries. Diversey sued the school and several administrators for violation of his exclusive distribution right under Section 106(3).

Diversey’s opening brief before the Tenth Circuit was remarkably well-researched and well-written for a pro se advocate, and he cited the Nimmer copyright treatise at length in arguing that merely making a work available constitutes distribution. I wrote about the fact that the Nimmer treatise has changed its tune on the making available issue in a previous post, and I predicted that, given how influential Nimmer is in the copyright realm, others would follow.1

And follow they did. Relying on the Fourth Circuit’s holding in Hotaling and the Nimmer treatise, the Court of Appeals reasoned:

As Diversey points out, § 106(3) explicitly protects the copyright owner’s exclusive right to distribute copies by lending. See Hotaling, 118 F.3d at 203 (“When a public library adds a work to its collection, lists the work in its index or catalog system, and makes the work available to the borrowing or browsing public, it has completed all the steps necessary for distribution to the public.”); 2 Melville Nimmer & David Nimmer, Nimmer on Copyright § 8.11[B][4][d] at 8–154.10 (2013) (“No consummated act of actual distribution need be demonstrated … to implicate the copyright owner’s distribution right.”). . . . The essence of distribution in the library lending context is the work’s availability “to the borrowing or browsing public.” See Hotaling, 118 F.3d at 203.2

The Tenth Circuit rejected the appellees’ argument that Diversey had to prove actual dissemination to the public:

The appellees argue [that] merely listing the work in the libraries’ catalog information system does not violate Diversey’s distribution right. They say Diversey must (but has failed to) allege the libraries actually distributed an unauthorized copy to a member of the public. They cite Atlantic Recording Corp. v. Howell, 554 F.Supp.2d 976 (D. Ariz. 2008) to suggest “‘§ 106(3) is not violated unless the defendant has actually distributed an unauthorized copy of the work to a member of the public.’” (Appellee’s Br. 14 (quoting Howell, 554 F.Supp.2d at 883).)

Howell does reflect some dissensus, particularly among district courts, about the applicability of Hotaling’s holding to cases of Internet file-sharing. We need not delve into the file-sharing issue today. Hotaling, like this case, involves a public library making “the work available to the borrowing or browsing public.” Hotaling, 118 F.3d at 203. A patron could “visit the library and use the work.” See id. This is the essence of a violation of the copyright owner’s exclusive right to distribute his work via lending. See 17 U.S.C. § 106(3); Peter S. Menell, In Search of Copyright’s Lost Ark: Interpreting the Right to Distribute in the Internet Age, 59 J. Copyright Soc’y U.S.A. 1, 52–66 (2011) (analyzing the legislative history regarding the distribution right and concluding the requirement of actual distribution of an unauthorized copy is unwarranted).3

The applicability of the Hotaling holding to this case was pretty straightforward since both cases involved libraries lending out works to the general public. In Hotaling, the Fourth Circuit stated that distribution normally requires a showing that the work was actually disseminated to the public, but in the case of a library that keeps no records of public access to its works, it would unfairly prejudice the plaintiff to require any such proof of access.4 Thus, the evidentiary issue was central to the Fourth Circuit’s holding.

Interestingly, for the argument that distribution requires actual dissemination, the Hotaling court cited the Eighth Circuit’s opinion in National Car5 and the Nimmer treatise. National Car, in turn, cited only the Nimmer treatise for that proposition. So the notion in the Fourth and Eighth Circuits that distribution typically requires actual dissemination can be traced back to earlier versions of the Nimmer treatise. As I said in that previous post, it really is hard to exaggerate just how influential Nimmer is in copyright law.

Now we have the Tenth Circuit relying on the Nimmer treatise as well as the journal article by Professor Peter S. Menell, which was the impetus for the about-face on the making available issue in the Nimmer treatise.6 The Tenth Circuit here explicitly declined to discuss the applicability of its holding to the file-sharing context, but I think the answer there is fairly clear. Several district courts have declined to extend the holding of Hotaling to file-sharing cases, citing the general rule that actual dissemination is required and reasoning that the same evidentiary problem found in the library context may not obtain when it’s file-sharing.7

But the Tenth Circuit here has unequivocally adopted Nimmer’s new tune, which states that merely making the work available to the public is sufficient to constitute distribution. And it approvingly cited Professor Menell’s article, which reaches the same conclusion. Moreover, the Tenth Circuit adopted Hotaling’s holding without mentioning the underlying evidentiary rationale applicable in the library context that led other courts to distinguish its holding in the file-sharing context. While the Tenth Circuit did not address whether its holding would apply to file-sharing, it’s really difficult to see how it would not.

Follow me on Twitter: @devlinhartline

Footnotes

  1. For the argument that Nimmer was wrong to change its tune on the making available issue, see Rick Sanders, Will Professor Nimmer’s Change of Heart on File Sharing Matter?, 15 Vand. J. Ent. & Tech. L. 857 (2013). []
  2. Diversey v. Schmidly, 2013 WL 6727517 at *4-5 (10th Cir. Dec. 23, 2013). []
  3. Id. at *4 n.7 (citation omitted). []
  4. See Hotaling v. Church of Jesus Christ of Latter-Day Saints, 118 F.3d 199, 203 (4th Cir. 1997). []
  5. See Nat’l Car Rental Sys., Inc. v. Computer Associates Int’l, Inc., 991 F.2d 426, 433-34 (8th Cir. 1993). []
  6. See Peter S. Menell, In Search of Copyright’s Lost Ark: Interpreting the Right to Distribute in the Internet Age, 59 J. Copyright Soc’y U.S.A. 1 (2011). []
  7. See Atl. Recording Corp. v. Howell, 554 F.Supp.2d 976, 981-85 (D. Ariz. 2008) (gathering cases). []

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Cross-posted on the Law Theories blog.

They say that bad facts make bad law, and that was proven yet again earlier this year with Righthaven’s resounding defeat on the standing issue in the Ninth Circuit.1 I have uploaded a copy of the Ninth Circuit’s opinion to Scribd. I wrote about the Righthaven standing issue this past March, and I explained why it is I think that Righthaven does indeed have standing to sue for past infringements. While the result reached by the Ninth Circuit is probably a surprise to no one, myself included, I am troubled at the court’s dubious reasoning in arriving at its conclusion. To me, the opinion reflects results-oriented jurisprudence rather than an accurate application of existing law.

Lest the point get lost (and I receive more “fan mail”), I should point out that my concern is only with the question of law that the Righthaven standing issue presents. I do not personally care for Righthaven or its methods, and I find the practice of instituting copyright actions for sport to be distasteful. But at the same time, I think it must be conceded that the vast majority of the defendants had likely committed a tort. Righting a wrong is not itself evil, of course, but turning it into a profit-making scheme crosses the line with many people—and rightfully so. My focus solely is on whether the court’s reasoning was a proper application the relevant doctrine. Whether the opinion reaches a result that corresponds to one’s particular normative views does not concern me.

This opinion should be worrisome to copyright owners because it tramples over well-established law in holding: (1) that unless a party has the present ability to exploit a copyright, it has no ownership interest therein, and (2) that an assignment and an exclusive license are the exact same thing such that a licensor has no ownership interest in that which he exclusively licenses. Neither of these holdings has ever been the law, whether copyright, patent, or trademark. There are in fact intellectual property owners who cannot exploit the very exclusive rights that they own, and assignments and exclusive licenses are and have always been two distinct types of ownership interests in all branches of intellectual property law. In this post, I’ll explain why I think the Ninth Circuit got it wrong with these particular two holdings.

Not All Copyright Owners Can Exploit The Copyright

By way of context, the Ninth Circuit’s en banc majority opinion in Silvers v. Sony2 controls the standing analysis. In that case, the question arose whether the plaintiff, who had been granted by the copyright owner only the right to sue for past infringements, had standing to sue for past infringements despite not having any other ownership interest in the copyright. The majority held that “an assignee who holds an accrued claim for copyright infringement, but who has no legal or beneficial interest in the copyright itself,” has no standing to “institute an action for infringement.”3 This “legal or beneficial” language, in turn, derives from Section 501(b) of the Copyright Act, which provides that the “legal or beneficial owner of an exclusive right under a copyright is entitled . . . to institute an action for any infringement . . . .”4

Thus, the rule from Silvers is that the assignee of only the accrued causes of action does not have standing to institute an action for copyright infringement for past infringements unless that assignee is also a legal or beneficial owner of the underlying exclusive right that is alleged to have been infringed. That rule is directly on point here where Righthaven and Stephens Media entered into two complementary agreements, the Copyright Assignment and the Strategic Alliance Agreement (“SAA”). The Copyright Assignment assigned to Righthaven ownership of the copyrights plus the accrued causes of action, and the SAA then granted back to Stephens Media an exclusive license to exploit the copyrights. The issue, then, is whether the combined effect of the Copyright Assignment and the SAA left Righthaven with any legal or beneficial ownership interest in the copyright, in addition to the accrued causes of action, such that it would have standing to sue under Silvers.

The Ninth Circuit held that Righthaven had no other such ownership interest, “for all it was really assigned was a bare right to sue for infringement.”5 The court reasoned that since Righthaven could not exploit the copyrights, it was not a legal or beneficial owner under the Copyright Act:

The SAA provided that Stephens Media automatically received an exclusive license in any copyrighted work it assigned to Righthaven, so that Stephens Media retained “the unfettered and exclusive ability” to exploit the copyrights. . . . The contracts left Righthaven without any ability to reproduce the works, distribute them, or exploit any other exclusive right under the Copyright Act. See 17 U.S.C. § 106. Without any of those rights, Righthaven was left only with the bare right to sue, which is insufficient for standing under the Copyright Act and Silvers.6

Note the sleight of hand. The rule from Silvers is that the assignee of an accrued cause of action must also be a legal or beneficial owner of the copyright—this in turn was based on the language in Section 501(b). The Ninth Circuit here mistakenly transforms that into a rule that the assignee of an accrued cause of action must also be able to exploit the copyright. This is based on the erroneous assumption that legal or beneficial ownership under Section 501(b) necessarily implies the ability to exploit the copyright. But that is not the law, and the doctrine is clear that not all legal or beneficial owners who have standing to sue can actually exploit the copyright. Noticeably, the court did not cite any case law to back up its claim that legal or beneficial owners must necessarily have the ability to exploit the copyright that they hold an ownership interest in.

Ironically, the majority opinion in Silvers, which the court here relies on heavily, cites to the House Report on the 1976 Copyright Act that demonstrates the existence of a party with an ownership interest in a copyright that has standing to sue for its infringement despite not being able to exploit the copyright:

The first sentence of subsection (b) [of Section 501] empowers the “legal or beneficial owner of an exclusive right” to bring suit for “any infringement of that particular right committed while he or she is the owner of it.” A “beneficial owner” for this purpose would include, for example, an author who had parted with legal title to the copyright in exchange for percentage royalties based on sales or license fees.7

Thus, an author who parts with legal title to his copyright while retaining the right to receive royalties from its exploitation by another is a “beneficial owner” under Section 501(b) who has standing to sue for its infringement—even though this royalty recipient cannot himself exploit the copyright and would be an infringer if he did.8 This shows that the test for standing to sue is not, as the Righthaven court seems to think, whether the plaintiff has the present ability to exploit the copyright. To make sense of what the test for standing really is—as well as to make sense of why it is that Righthaven has standing to sue for past infringements despite not having a present ability to exploit the copyright—we have to take a step back to discuss how copyright ownership works generally.

A Primer on Copyright Ownership

Over seventeen decades ago, Justice Joseph Story, riding circuit, famously quipped:

[C]opyrights approach, nearer than any other class of cases belonging to forensic discussions, to what may be called the metaphysics of the law, where the distinctions are, or at least may be, very subtile and refined, and, sometimes, almost evanescent.9

Those words are as true today as they were then, and like many, I find copyright fun and interesting precisely because of its metaphysical nature. Perhaps one of the more metaphysical aspects of copyright law can be found in the various doctrinal crevices of copyright ownership. I’ve been diving into these chasms as part of my dissertation work, and I can tell you honestly that they are, at times, arid and conceptual. But as one of my current professors, the brilliant Stephen Griffin, has been teaching me, the real question is whether it has “cash value.” Theories are fine and dandy, but what makes one useful is whether I can “cash it out.” I think that taking the time to understand copyright ownership at an abstract and theoretical level does indeed have real cash value. In fact, I think the reason we get doctrine-jumbling opinions like Silvers and Righthaven is precisely because many lawyers and judges fail to approach copyright ownership at a more abstract level.

What follows is the way to think about copyright ownership that I find most helpful. My account is in part descriptive, in that it reflects the way the concept of copyright ownership has developed in the case law, especially early on, and it’s in part normative, in that I argue that jurists should be thinking of copyright ownership in this way. The starting point is Professor W.N. Hohfeld, whose fundamental jural relations I discussed in my previous post on why copyright is a right.10 Hohfeld identified eight jural relations that can be used to describe precisely various legal relations: right, privilege, power, immunity, duty, no-right, liability, and disability. As I mentioned in that previous post, these can be paired off into jural correlatives. For example, the correlative of a right is a duty, and if X holds a right against Y, it necessarily follows that Y then owes X a duty. Likewise, the correlative of a privilege is a no-right, and if X holds a privilege against Y, it necessarily follows that Y then has no legally enforceable claim against X should he exercise his privilege.

What I didn’t discuss in that previous post, and what’s important here, is that these jural relations such as rights and duties can operate in two different spheres: contract law and property law. One can have a contractual interest that involves a copyright, and one can have a proprietary interest in the copyright, but these are not the same thing. Contractual interests are different in kind than proprietary interests. Recall from my previous post that a right is a legally enforceable claim against another that he shall do or not do a given act, and the person against whom the right exists has the correlative duty to do or not do the given act. The primary difference between a contractual right and a proprietary right lies in the identity of this correlative dutyholder. With a contractual right, the dutyholder is the other party or parties to the contract, but with a proprietary right, the dutyholders are everyone else. The lawyerly way of saying this is that contractual rights operate in personam, only binding those who are in privity, while proprietary rights operate in rem, thus good against the world.11

As the name suggests, an in rem proprietary right is a right against a thing, i.e., the res, but the reality is that all of Hohfeld’s jural relations apply to persons, whether in personam or in rem. Saying that an in rem proprietary right operates against a given thing is just a shorthand way of saying that it operates against a person with respect to the given thing—the res. In other words, an in rem proprietary right creates a duty in the dutyholder, not because of his relationship with the rightholder, but because of his relationship to the thing. As Hohfeld pointed out, with respect to that res, the rightholder has an in rem proprietary right that is good against the world, i.e., that creates the correlative in rem proprietary duty in everyone else. The concept of a res is easy to grasp when it’s a tangible object, like a screwdriver. If I own a screwdriver, I then have an in rem proprietary right to exclude you and everyone else from possessing it. You and everyone else, in turn, owe me the correlative in rem proprietary duty not to possess my screwdriver.

When nonlawyers think about property, they tend to focus on the thing itself, but lawyers think more abstractly, focusing instead on the various legal relations that exist between persons with respect to that thing. Whether the thing itself is tangible or intangible doesn’t matter; what matters is the intangible bundle of in rem proprietary interests that go with it, consisting of some combination of Hohfeld’s eight fundamental jural relations. Some of these bundles we call “ownership,” and I submit that the sine qua non of ownership is an in rem proprietary right. To “own” property is to have a right in it, and to have a right in it is to have a legally enforceable claim against others vis-à-vis the thing. But owners can and do have other proprietary interests as well. If I own a screwdriver, I have the right to exclude you from using it, the privilege to use it myself, the power to grant you the privilege of using it, and an immunity from you changing my jural relations with respect to it.12 To say that I have all of these proprietary interests in my bundle is to say that I own and hold title to the res. I can divest myself in various ways of these interests, exercising my in rem proprietary power to alter the jural relations with respect to the thing, but so long as this bundle contains an in rem proprietary right, I am an owner.

Contrasted with this, an in personam contractual right, as the name suggests, is a right against a person, i.e., the persona. It is not a right that one person has against another person because of his relationship to a given thing, but rather it’s a right that one person has against another person because of their direct relationship to each other. Contractual rights have to be bargained for between the rightholder and the dutyholder, and this allows the parties to create elaborate schemes of rights and duties between them since only those parties are bound by them. For example, we can enter into a contract where we agree that I’ll scratch your back and you’ll scratch mine. If I scratch your back but you then refuse to scratch mine, you are liable to me for the breach since I have an in personam contractual right against you, that is, a legally enforceable claim against you should you violate your in personam contractual duty to me. My claim is only good against you, and not the world, because you were the only one with the in personam contractual duty to scratch my back.

Contract law can only create in personam contractual interests, and in rem proprietary interests can only be created through property law. An in rem proprietary interest can be the consideration that makes a contract binding, but a contract is not needed to transfer an in rem proprietary interest. Property law allows for such interests to be transferred unilaterally, without the need of a contract or consideration. This distinction isn’t just theoretical. It has real cash value—especially in the context of nonexclusive licenses such as with Creative Commons and the like. In Hohfeldian terms, a nonexclusive licensee holds an in rem proprietary privilege that negates the in rem proprietary duty he would otherwise have not to do the licensed act. This necessarily implies the correlative in rem proprietary no-right on the part of the licensor to hold the nonexclusive licensee liable for doing the licensed act. No contract is needed for the licensor to alter the in rem proprietary interests that others have with respect to the thing. Property law gives him the in rem proprietary power to do so unilaterally.13

Copyright owners have innumerable possible ways they can divvy up their in rem proprietary interests in their copyrights, but only certain combinations are recognized by law. Before the 1976 Copyright Act, copyright ownership was subject to the doctrine of indivisibility, which provided:

With respect to a particular work embodied in concrete form, or separable part of such work, there is, at any one time, in any particular jurisdiction, only a single incorporeal legal title or property known as the copyright, which encompasses all of the authorial rights recognized by the law of the particular jurisdiction with respect thereto.14

Under the indivisibility doctrine, the various in rem proprietary rights held by the copyright owner could not be separated.15 For example, he couldn’t assign his in rem proprietary right to vend to one party while assigning his in rem proprietary right to publish to another. He could assign his ownership of the various in rem proprietary rights to another, but such an assignment had to include his entire bundle of in rem proprietary rights. But the doctrine of indivisibility did not stop copyright owners from granting others exclusive rights, i.e., in rem proprietary rights good against the world.16 This is because copyright rights, like intellectual property rights generally, are capable of being divided into legal interests and equitable interests. The doctrine of indivisibility only prevented the legal in rem proprietary rights from being owned by more than one person; equitable in rem proprietary rights could still be divided up separately.

This notion of dividing up property into legal and equitable interests comes from trust law. A trust is “a fiduciary relationship with respect to property, subjecting the person by whom the title to the property is held to equitable duties to deal with the property for the benefit of another person, which arises as a result of a manifestation of an intention to create it.”17 A trust permits one party, called the trustee, to hold the trust property, called the res, in trust for the benefit of another, called the beneficiary. In a trust relationship, the trust property is divided such that the trustee holds the legal title while the beneficiary holds the equitable title18 This notion of equitable title, as the name suggests, was developed in the courts of equity where the rules were much more flexible than those of the courts of common law. The courts of equity, unshackled to the rigidity of the doctrine of indivisibility, innovated ways to permit those without legal in rem proprietary interests in a copyright to seek judicial relief.

The 1976 Copyright Act explicitly does away with the doctrine of indivisibility. Section 201(d)(2) now permits the various legal in rem proprietary rights in a copyright to be owned separately.19 But, more importantly for our purposes, the Act does not eradicate the availability to copyright owners of the option to divide their in rem proprietary rights into legal and equitable interests using the mechanism of a trust. In fact, Section 501(b) makes clear that either a “legal or beneficial owner of an exclusive right under a copyright is entitled . . . . to institute an action” for its infringement.20 In other words, when in rem proprietary rights are held in trust, both trustees and beneficiaries have standing to sue, regardless of the legal or equitable nature of their particular proprietary interest. Moreover, Section 201(d)(2) provides that a legal or beneficial owner “is entitled . . . to all of the protection and remedies accorded to the copyright owner by this title.” This means that whether the ownership interest is legal or equitable in nature, the owner is permitted to seek both legal and equitable remedies—equitable owners are no longer restricted to seeking only equitable remedies.

The Trust Theory Applied

I call this notion that in rem copyright rights can be held in trust the “trust theory” of copyright ownership, and I submit that many of the most important relationships created by copyright owners with respect to their copyrights are in fact ones of trust. I do not refer to the trust law of any one state, but rather to the body of federal law that has been developed by the courts as to, not only copyrights, but intellectual property law in general. And, despite the long-running application of the trust theory of ownership in all branches of intellectual property law, for some reason modern jurists don’t seem to recognize it or to appreciate it.

Trust law is not foreign to copyright law: “[T]he courts recognize that legal title to a copyright may be in one person and equitable title in another. Thus, one may be a ‘proprietor’ of a copyright if he holds legal title, though equitable title may be in another wither expressly or as trustee ex malificio.”21 For example, under the 1909 Copyright Act, if a coauthor obtained the copyright in his own name only, “the copyright [was] deemed to have been taken out in the name of one as a trustee for all the true owners.”22 In other words, the coauthor who obtained the copyright, thus holding the legal title to the entire copyright, held it in trust for the “true owners,” that is, the other coauthors, who were beneficiaries holding the equitable title. This “owner of the equitable title is not a mere licensee, and he may sue in equity, particularly where the owner of the legal title is an infringer, or one of the infringers, thus occupying a position hostile to the plaintiff.”23 Despite not holding the legal title, courts of equity recognized the in rem proprietary rights of these equitable owners and permitted them to seek equitable remedies.

Another common example of a trust relationship in copyright law is the situation mentioned above where an author parts with legal title while retaining the right to receive royalties. It’s simple to analyze this situation when we have the right conceptual tools. By operation of law, an author is vested with legal title to the entire copyright.24 This title includes the in rem proprietary rights listed in Section 106, as well as various in rem proprietary privileges, powers, and immunities. In addition, the author has other incidental in rem proprietary rights, such as the right to receive royalties from the copyright’s exploitation. Ownership of this in rem proprietary right to receive royalties can be divided such that one party holds legal title to it for the benefit of one holding its equitable title. An author who assigns the legal title to the in rem proprietary right to receive royalties while retaining the equitable title to that right establishes a trust where the author is the beneficiary and the assignee is the trustee.25

It doesn’t matter whether the assignment expressly declares a trust: “It is not necessary to use the magic words of ‘fiduciary relationship’, or to hold that a ‘relationship of trust and confidence’ was created by the contract, or to find that defendant became a ‘trustee’ of the copyright for the benefit of the plaintiffs . . . .”26 Indeed, “[t]he law has outgrown its primitive stage of formalism when the precise word was the sovereign talisman, and every slip was fatal.”27 When there is a special relationship between the author and his assignee, as when the assignee is a publisher, the law treats that relationship as that of a trustee-beneficiary, imposing fiduciary duties on the publisher-assignee.28 And, because there is this trust relationship between the author and the publisher, the author, who holds only the equitable in rem proprietary right to receive royalties, is permitted to bring suit in equity:

It is well settled that a fiduciary who refuses to bring suit against a third party for the benefit of his cestui [i.e., the beneficiary] abuses his trust. In such event the cestui may maintain a bill in equity against the trustee in which the third party may be joined as a defendant. The trustee thus is not permitted by inaction or dereliction to bar his cestui from enforcing his rights in that capacity. . . . The principle is not foreign to copyright law. It has long been held that an exclusive licensee can maintain an action against an infringer if he joins the copyright owner as a party.29

The point being urged here is that the 1976 Copyright Act incorporated the application of trust law to in rem proprietary rights in a copyright when it provided, as mentioned above, that the “legal or beneficial owner” has standing to sue for infringement.30 Congress also accounts for the possibility of others with in rem proprietary interests in the copyright in the notice and joinder provisions of Section 501(b).31 Moreover, one of the quintessential examples of a trust relationship in copyright law is that of an author who assigns his legal title to his publisher while retaining the equitable title to the in rem proprietary right to receive royalties. This author has standing to sue for infringement despite not having the present ability to exploit the copyright. But as the last sentence quoted in the block just above mentions, there’s another common example of a trust relationship recognized in copyright law, that of the licensor-exclusive licensee—and that relationship is important here with Righthaven.

Exclusive Licenses Are Not Assignments

The second way in which the Ninth Circuit reasoned that Righthaven does not have standing to sue for past infringements was to look at the sequence of events with the Copyright Assignment and the SAA. Under the Copyright Assignment, Stephens Media first assigned to Righthaven ownership of the copyright. Then with the SAA, Righthaven granted back to Stephens Media an exclusive license to exploit the copyright. This arrangement, argued Righthaven, demonstrates that it owns the copyright, for only a copyright owner could grant an exclusive license. The Ninth Circuit disagreed:

This argument again emphasizes form over substance. But even analyzing it on its own formalistic terms, the argument still fails because once Righthaven granted Stephens Media an exclusive license, Righthaven was no longer the owner of exclusive rights under the Copyright Act. The Copyright Act does not distinguish between transferring a copyright via an assignment or an exclusive license. Both, unlike an assignment of a non-exclusive license, constitute a “transfer of copyright ownership.” 17 U.S.C. § 101; see also Campbell, 817 F.2d at 504 (relying on this section of the Copyright Act to construe a contract as transferring the ownership of a copyright, even though the contract used the term “exclusive license”).32

Thus, the court is saying that even if Stephens Media assigned its ownership interests in the copyright to Righthaven via the Copyright Assignment, Righthaven subsequently assigned back those very same ownership interests when it granted to Stephens Media an exclusive license. In other words, the court is saying that an assignment and an exclusive license are exactly the same thing. The court bases this conclusion on the text of Section 101 of the Copyright Act, which provides that a “transfer of copyright ownership” includes an “assignment” or an “exclusive license.”33

I submit that this is an overly facile understanding of Section 101, and that it miscomprehends that while an assignment and an exclusive license are indeed transfers of copyright ownership, the type of ownership interest transferred with each conveyance is significantly different. Properly viewed, the relationship of a licensor-exclusive licensee is that of a trustee-beneficiary, with the licensor holding the legal title to the in rem proprietary rights in trust for the benefit of the exclusive licensee, who holds merely the equitable title. This is a relationship of trust. The difference between an assignment and an exclusive license is that an assignment is the transfer of the legal title to an in rem proprietary right to the assignee, while an exclusive license divides title to the in rem proprietary right between the licensor and the exclusive licensee. Both are a “transfer of copyright ownership,” as Section 101, in codifying the preexisting doctrine, so notes, but whether the ownership interest transferred is legal or equitable in nature depends on the nature of the conveyance used to transfer it. Of course, whether legal or equitable in nature, it’s treated the same under Section 501(b) as having standing to sue for both legal and equitable remedies.

The Ninth Circuit’s citation in Righthaven to its earlier opinion in Campbell34 is confused and misplaced. In that case, Campbell had a contract with Stanford wherein the latter promised not transfer its ownership interests in the copyright at issue without the former’s written consent. We can say this in more refined terms as Stanford had an in personam contractual duty not to transfer its in rem proprietary rights to a third party without Campbell’s consent. Without Campbell’s permission, Stanford had granted an exclusive license to CPP, a third-party publisher, and the issue was whether that was a transfer of an ownership interest in the copyright in violation of their contract. The Ninth Circuit held that it was:

Stanford transferred important rights to CPP. Stanford gave CPP an “exclusive license to market, administer, and sell” the [copyrighted work] “throughout the world.” The essence of the property interest created by the Campbell-Stanford contract is a monopoly on the use of the [copyrighted work]. Stanford clearly transferred part of this property interest monopoly to CPP in the form of an exclusive license. *** Section 101 of the Act defines a “transfer of copyright ownership” to include a grant of an exclusive license to any of these enumerated rights, even if the license is limited in time or place of effect.35

Unsure whether the 1976 Copyright Act actually governed the issue, the court then hedged its reasoning in a footnote:

Even if the Copyright Act of 1976 does not apply, the parties to the Campbell-Stanford contract must have contemplated that the exclusive license conveyed some “interest” in the copyright to CPP. Under the prior copyright acts, as well as the current Act, an exclusive licensee has standing to sue for infringement, provided he joins the legal owner as a party.36

Thus, the court in Campbell held that it matters not whether the issue is analyzed under the 1909 Copyright Act or the 1976 Copyright Act, since under either Act, the grant of an exclusive license is a transfer of an ownership interest in a copyright. The Ninth Circuit in Righthaven misses the nuance that the Campbell court explicitly recognized that an exclusive license is a transfer of only a “part of th[e] property interest” held by the licensor. Moreover, in the footnote, the court in Campbell explicitly stated that under both Copyright Acts, the exclusive licensee is not the legal owner of the right that he holds, for how else could he be required to “join[] the legal owner as a party”?

The court in Righthaven cites Campbell for the proposition that an exclusive license is the transfer of the legal title to the exclusive licensee of the in rem proprietary rights so licensed, but a closer reading of Campbell shows that the court there actually treated an exclusive licensee as holding only the equitable title. Since an exclusive license is a transfer of copyright ownership, albeit an equitable one, the Campbell court held, Stanford’s exclusive license to CPP without Campbell’s consent violated the in personam contractual duty Stanford owed Campbell not to transfer any of its in rem proprietary rights without Campbell’s consent. Campbell stands for exactly the opposite proposition than the Righthaven court cites it for. For whatever reason, the Ninth Circuit in Righthaven fails to recognize a principle that is well-established in the various branches of intellectual property law, namely, that an exclusive license is not the same thing as an assignment. This is true now as it was under prior Copyright Acts, and it’s also true in the realms of patent and trademark law.

Patents, Trademarks, and Beyond

In patent law, an assignment and an exclusive license have always been distinct, with the difference being that an assignment transfers legal title while an exclusive license does not.37 The licensor holds the legal title to the in rem proprietary rights so licensed in trust for his exclusive licensee, who has only an equitable ownership interest in the patent.38 The general rule is that damages for patent infringement are only recoverable in an action at law by the party who “held the legal title to the patent during the time of the infringement.”39 This follows from the text of the Patent Act, which provides that the “patentee,” or his “successors in title,” may sue for patent infringement.40 Thus, on its face, the Patent Act would appear to say that only the holder of legal title, i.e., the patentee or one who can trace his legal title back to the patentee, has standing to sue for patent infringement, but the judiciary does not interpret it this way.

Generally, the rule is that the “patentee should be joined, either voluntarily or involuntarily, in any infringement suit brought by an exclusive licensee.”41 Thus, the presence of the patentee, or his successors-in-title who stand in his shoes, is usually needed for the court to have jurisdiction.42 The exclusive licensee can gain the benefit of his licensor’s legal title for standing purposes by either suing in the name of his licensor, or if necessary, by joining his licensor to the action.43 In order to have standing as a coplaintiff, along with the patentee or his successors-in-title, in an action for patent infringement, the “licensee must hold some of the proprietary sticks from the bundle of patent rights, albeit a lesser share of rights in the patent than for an assignment and standing to sue alone.”44 Both parties have in rem proprietary rights in the patent that are enforceable, though the presence of the legal titleholder in the action is needed to obtain legal remedies.45 An exclusive license “makes the licensee a beneficial owner of some identifiable part of the patentee’s bundle of rights to exclude others,” and this exclusive licensee “has a right to bring suit on the patent, albeit in the name of the licensor, whether or not the license so provides and regardless of the patentee’s cooperation.”46 And when the exclusive licensee has all substantial rights in the patent, he is treated as the de facto patentee, despite not being the de jure patentee, who still holds the legal title.47

Trademark law similarly treats exclusive licensees as equitable titleholders. Like copyright and patent law, trademark law distinguishes between assignments and exclusive licenses.48 The Lanham Act provides that the “registrant” or his “successors and assigns” has standing to sue for infringement of a registered mark.49 Thus, like the Patent Act, the Lanham Act appears to provide that only the original registrant who holds legal title, or one who can trace his legal title back to the original registrant, has standing to sue for trademark infringement. An exclusive licensee typically does not have standing to sue in his own name since he is not the registrant or his successor-in-title, and he thus lacks the legal title to the mark.50 However, just as with patents, an exclusive licensee who holds all substantial rights in the mark is treated as the registrant for purposes of standing.51 And as in patent law, such an exclusive licensee is merely a de facto assignee, not a de jure assignee who actually holds legal title, and the exception merely serves to prove the general rule.52

An assignment and license-back of a mark, as Stephens Media and Righthaven have done here with a copyright, has been described by the Federal Circuit as a “well-settled commercial practice.”53 The Ninth Circuit has noted “that a simultaneous assignment and license-back of a mark is valid, where, as in this case, it does not disrupt continuity of the products or services associated with a given mark”54 An opinion earlier this year out of the Northern District of California, penned by District Judge William Alsup of the “Google Shill List” fame, discusses this common practice of assignment and license-back.55 After noting that “the validity of this type of assignment and license-back transaction is well-settled,”56 Judge Alsup explained that an “assignment passes legal and equitable title to the property,” and it “is the transfer of the whole of the interest in the right.”57 A “truly exclusive license,” on the other hand, “that grants all substantial trademark rights, including the ability to exclude the licensor from using the marks, is tantamount to an assignment for standing purposes.”58 In other words, such an exclusive license is “functionally equivalent” to an assignment, but it’s not the same thing.59 Despite the exclusive licensee having significant interests in the mark such that it “controls the exploitation of the intellectual property,” Judge Alsup nevertheless recognized that this did not affect “the legal title retained by the licensor.”60

Turning back to copyright law, the modern confusion about the difference between an assignment and an exclusive license stems in part from Section 101, the definitional section of the 1976 Copyright Act, which provides:

A “transfer of copyright ownership” is an assignment, mortgage, exclusive license, or any other conveyance, alienation, or hypothecation of a copyright or of any of the exclusive rights comprised in a copyright, whether or not it is limited in time or place of effect, but not including a nonexclusive license.61

The phrase “transfer of copyright ownership” appears only in three other sections of Title 17, and these are illuminating as to why Congress defined the phrase in Section 101. The first appearance is in Section 204(a), which provides: “A transfer of copyright ownership . . . is not valid unless an instrument of conveyance . . . is in writing and signed by the owner of the rights conveyed . . . .”62 The phrase occurs twice in Section 205. Section 205(a) provides: “Any transfer of copyright ownership . . . may be recorded in the Copyright Office . . . .”63 And Section 205(e) provides: “A nonexclusive license . . . prevails over a conflicting transfer of copyright ownership if the license is evidenced by a written instrument signed by the owner of the rights licensed . . . .”64 The final occurrence is found in Section 708(a)(4), which merely provides that the fees for recordation under Section 205 shall be paid to the Register of Copyrights.65

Thus, the purpose of lumping together “an assignment, mortgage, exclusive license, or any other conveyance, alienation, or hypothecation of a copyright” in Section 101 was not to suddenly equate these types of conveyances that historically had been disparate things. The purpose of the definition in Section 101 was to list the types of conveyances that: (1) require a signed writing to be effective, (2) may be recorded in the Copyright Office, (3) a nonexclusive license may take priority over, and (4) require recordation fees to be paid to the Register of Copyrights. Just because all of these conveyances are equated for execution, recordation, and prioritization purposes, it does not follow that Congress intended to erase in such a roundabout way almost two centuries of doctrine distinguishing them without any explanation in the congressional record.

Perhaps the best way to see that “transfer of copyright ownership” under Section 101 does not refer to only transfers of legal title is to look at the rest of the text. Section 101 tells us that a “mortgage” is also a transfer of copyright ownership. A mortgage can be a lien against a copyright whereby a creditor secures an obligation owed by the debtor that is extinguished once the obligation is fulfilled.66 In a mortgage, the debtor is called the mortgagor and the creditor is called the mortgagee. In lien-theory states, a mortgage is merely a lien held by the creditor-mortgagee with the debtor-mortgagor retaining legal title to the mortgaged property during the existence of the mortgage. In title-theory states, the creditor-mortgagee holds legal title to the mortgaged property while the mortgage is in force.67 But if the assignment = exclusive license = mortgage theory is correct, and all transactions mentioned as constituting a “transfer of copyright ownership” in Section 101 are transfers of legal title, then the mortgage laws of the states that follow the lien-theory would be preempted by the Copyright Act. There would be no such thing as a lien on a copyright since liens are equitable interests in the mortgaged property. The only way to mortgage a copyright would be to transfer legal title to the mortgagee.

If Congress had intended so drastic a result, it stands to reason that it would have implemented the change in a clearer way than sticking it in the definitional section of the Copyright Act to be implied by jurists. In fact, the House Report reflects instead that Congress did not intend to preempt state law as it applies to mortgages, at least in the context of foreclosures:

Representatives of motion picture producers have argued that foreclosures of copyright mortgages should not be left to varying State laws, and that the statute should establish a Federal foreclosure system. However, the benefits of such a system would be of very limited application, and would not justify the complicated statutory and procedural requirements that would have to be established.68

The way that foreclosures operate in a given state turns on whether it’s a title-theory or a lien-theory state. If Congress did not intend to preempt the various ways in which states deal with foreclosures of copyright mortgages, then it makes little sense to say that it intended to change the way that mortgages are created under state law in the first place—but that’s exactly what is implied by those who think that assignment = exclusive license = mortgage.

The better view of Section 101’s provision that a “mortgage” is a “transfer of copyright ownership” is the one taken by the Ninth Circuit in an opinion discussing whether the Copyright Act preempts state law when it comes to recordation of unregistered copyrights.69 The court noted that the “Copyright Act’s use of the word ‘mortgage’ as one definition of a ‘transfer’ is properly read to include security interests under Article 9 of the Uniform Commercial Code.”70 Those security interests, in turn, include liens—such as the one at issue in the very case the Ninth Circuit was deciding. Moreover, the court stated that a creditor cannot protect his interest by registering the copyright himself “because the secured party isn’t the owner of the copyright.”71 Thus, the Ninth Circuit simply read the inclusion of “mortgage” in Section 101 as indicating that security interests can be created in it, not that it means that all such security interests must involve the transfer of legal title to the creditor.

To underscore the point, Section 101 provides that a “transfer of copyright ownership” includes “any . . . hypothecation of a copyright.” In general, a hypothecation is “a pledge, i.e., an encumbrance rather than a deed translative of title or ownership.”72 In other words, hypothecation refers to a method of creating a security interest in a given piece of property. For example, in my state of Louisiana, a hypothecation can connote either a mortgage, a pledge, or an encumbrance, depending on the context.73 Those who believe that assignment = exclusive license = mortgage = hypothecation must believe that Congress intended to preempt Louisiana law such that only legal interests, as opposed to equitable interests, can be hypothecated—despite no such indication in the congressional record. This view makes little sense. While the Ninth Circuit has held that the Copyright Act preempts state law as far as recordation of security interests in a registered copyright is concerned,74 it did not hold that state law as to the creation of those security interests was preempted. States are free to permit the hypothecation of a copyright even if that hypothecation doesn’t transfer legal title to the copyright.

Conclusion

The Righthaven standing issue is simple to analyze. It’s just an assignment and license-back. Stephens Media, the author and legal titleholder of the copyright, assigned to Righthaven the legal title to the copyright plus the accrued causes of action. Righthaven, in turn, granted back to Stephens Media an exclusive license to exploit the copyright. This grant-back of an exclusive license did not divest Righthaven of the legal title to the copyright that it had been granted because an assignment and an exclusive license are not the same thing. A licensor retains the legal title to the in rem proprietary rights that he exclusively licenses to another. He holds that legal title in trust for his exclusive licensee. And, though many don’t seem to recognize this, the existence of trust relationships in copyright law is and has been commonplace. The question of who has standing to sue, I submit, is simply to ask whether the plaintiff, either personally or through assignment from his predecessors-in-title, whether legal or equitable, held an in rem proprietary right in the copyright at the time the cause of action accrued. Since Righthaven has such an interest, it has standing to sue under the existing doctrine.

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Footnotes

  1. See Righthaven LLC v. Hoehn, 716 F.3d 1166 (9th Cir. 2013). []
  2. See Silvers v. Sony Pictures Entm’t, Inc., 402 F.3d 881 (9th Cir. 2005) (en banc). []
  3. Id. at 883. []
  4. 17 U.S.C.A. § 501(b) (West 2013) (“The legal or beneficial owner of an exclusive right under a copyright is entitled, subject to the requirements of section 411, to institute an action for any infringement of that particular right committed while he or she is the owner of it. The court may require such owner to serve written notice of the action with a copy of the complaint upon any person shown, by the records of the Copyright Office or otherwise, to have or claim an interest in the copyright, and shall require that such notice be served upon any person whose interest is likely to be affected by a decision in the case. The court may require the joinder, and shall permit the intervention, of any person having or claiming an interest in the copyright.”). []
  5. Righthaven, 716 F.3d at 1169. []
  6. Id. at 1170. []
  7. Silvers, 402 F.3d at 886 (quoting H.R.Rep. No. 94-1476, at 159). []
  8. See, e.g., Fantasy, Inc. v. Fogerty, 654 F.Supp. 1129, 1131 (N.D. Cal. 1987) (“Since a beneficial owner has no independent right to use or license the copyright, the beneficial owner can infringe upon the legal owner’s exclusive rights.”). []
  9. Folsom v. Marsh, 9 F.Cas. 342 (C.C.D. Mass. 1841). []
  10. See generally Wesley Newcomb Hohfeld, Some Fundamental Legal Conceptions As Applied in Judicial Reasoning, 23 Yale L.J. 16 (1913); Wesley Newcomb Hohfeld, Fundamental Legal Conceptions as Applied in Judicial Reasoning, 26 Yale L.J. 710 (1917). []
  11. See, e.g., P.S. Atiyah, An Introduction to the Law of Contract 265 (3d ed. 1981) (“It is an elementary principle of English law — known as the doctrine of ‘Privity of Contract’ — that contractual rights and duties only affect the parties to a contract, and this principle is the distinguishing feature between the law of contract and the law of property. True proprietary rights are ‘binding on the world’ in the lawyer’s traditional phrase. Contractual rights, on the other hand, are only binding on, and enforceable by, the immediate parties to the contract. But this distinction, fundamental though it be, wears a little thin at times. On the one hand, there has been a constant tendency for contractual rights to be extended in their scope so as to affect more and more persons who cannot be regarded as parties to the transaction. On the other hand, few proprietary rights are literally ‘binding on the world.’”). []
  12. See, e.g., A. L. C., The Collection of Royalties from the Sub-Assignee of A Copyright, 28 Yale L.J. 259, 262-63 (1919) (“Patents and copyrights are often spoken of as ‘grants’ or ‘franchises’ and are also described as ‘property.’ Analysis shows that they are merely bundles of legal relations between the holder and all other persons; they are innumerable legal relations of right, privilege, power, and immunity. For example, there is a privilege of making and selling, a right that another shall not make or sell, a power to assign or to license others, and immunity from the destruction of these relations by any voluntary act of another. This bundle of relations may properly be described as property, for they are . . . rights in rem. However, they do not necessarily or usually accompany any physical res, and their assignment is not effected, as in the case of chattels or land, by a change in physical possession.”) (footnotes omitted). []
  13. See, e.g., Christopher M. Newman, A License Is Not A “Contract Not to Sue”: Disentangling Property and Contract in the Law of Copyright Licenses, 98 Iowa L. Rev. 1101, 1109 (2013) (“The concept of license . . . belongs fundamentally to property, not contract. Property rights allocate control of resource use to titleholders, while placing all others under in rem duties of noninterference. License is the means by which titleholders relieve selected others of those duties and permit them to participate in (or even delegate to them the power to direct) the use of—and this is the crucial point—resources to which the licensor continues to retain title.”); Niva Elkin-Koren, What Contracts Cannot Do: The Limits of Private Ordering in Facilitating A Creative Commons, 74 Fordham L. Rev. 375, 404-05 (2005) (“A property license is not a contract. It is a unilateral legal action, through which a property owner can exercise her rights, and it defines the boundaries of legitimate use. Its binding force does not derive from exercising autonomous will. The restrictions imposed by the license are enforceable because of property rules, and they do not require voluntary consent.”) (footnote omitted). []
  14. Newman, 98 Iowa L. Rev. at 1144-45 (internal quotations and citations omitted). []
  15. See, e.g., Gardner v. Nike, Inc., 279 F.3d 774, 778 (9th Cir. 2002) (“Under the doctrine of indivisibility, a copyright owner possessed an indivisible bundle of rights, which were incapable of assignment in parts. Thus, an assignment included the totality of rights commanded by copyright. Anything less than an assignment was considered a license.”) (internal quotations and citations omitted); Siegel v. Warner Bros. Entm’t, Inc., 658 F.Supp.2d 1036, 1101 n.14 (C.D. Cal. 2009) (“Absent the complete assignment of rights commanded by the copyright, the transfer was considered to be a license, with the transferor maintaining ownership in all the rights to the copyright in the material.”); M. Witmark & Sons v. Pastime Amusement Co., 298 F. 470, 474 (D.S.C. 1924) (“In relation to the right to sue for an infringement, a copyright is an indivisible thing, and cannot be split up and partially assigned either as to time, place, or particular rights or privileges, less than the sum of all the rights comprehended in the copyright.”); Hirshon v. United Artists Corp., 243 F.2d 640, 643 (D.C. Cir. 1957) (“[T]he copyright proprietor may transfer the legal title to his copyright only in totality; the copyright may not be split up and partially assigned as to the various rights encompassed therein.”) (internal quotations omitted). []
  16. See, e.g., M. Witmark & Sons v. Pastime Amusement Co., 298 F. 470, 475 (D.S.C. 1924) (gathering cases) (“[E]xclusive rights may be granted, limited as to time, place, or extent of privileges which the grantee may enjoy; but the better view is that such limited grants operate merely as licenses, and not as technical assignments, although often spoken of as assignments.”); Black v. Henry G. Allen Co., 42 F. 618, 621 (C.C.S.D.N.Y. 1890) (“[A] license in writing, by instrument duly witnessed, may be given by the proprietor to any other person to the extent described in such license; and there is no restriction upon the power of the proprietor to assign or transfer, in equity, an exclusive right to use the copyrighted book in a particular manner or for particular purposes upon such terms and conditions as may be agreed upon. In such case the legal title remains in the proprietor; and a beneficial interest, to the extent which is agreed upon, vests in the other party, who has acquired an equitable right in the copyright, and who will be properly styled an assignee of an equitable interest.”) (internal quotations omitted); First Financial Marketing Services Group, Inc. v. Field Promotions, Inc., 286 F.Supp. 295, 298 (S.D.N.Y. 1968) (“[L]egal title to copyright may be transferred only in totality. When the rights are split up and partially assigned either as to time, place or particular rights or privileges, the limited grant of exclusive rights operates merely as a license, not an assignment of ownership of a copyright.”). []
  17. Restatement (Second) of Trusts § 2 (1959); see also Restatement (Third) of Trusts § 2 (2003) (“A trust . . . is a fiduciary relationship with respect to property, arising from a manifestation of intention to create that relationship and subjecting the person who holds title to the property to duties to deal with it for the benefit of charity or for one or more persons, at least one of whom is not the sole trustee.”); George Tucker Bispham, The Principles of Equity 37 (11th ed. 1931). (“A trust, in its technical sense, is the right, enforceable solely in equity, to the beneficial enjoyment of property of which the legal title is in another.”). []
  18. See, e.g., Bogert’s Trusts And Trustees § 17 (2013) (“One of the . . . characteristics of a trust is divided ownership of property, the trustee usually having legal title and the beneficiary having equitable title.”). []
  19. See 17 U.S.C.A. § 201(d)(2) (West 2013) (“Any of the exclusive rights comprised in a copyright, including any subdivision of any of the rights specified by section 106, may be transferred as provided by clause (1) and owned separately. The owner of any particular exclusive right is entitled, to the extent of that right, to all of the protection and remedies accorded to the copyright owner by this title.”). []
  20. 17 U.S.C.A. § 501(b) (West 2013). []
  21. Manning v. Miller Music Corp., 174 F.Supp. 192, 195 (S.D.N.Y. 1959) (internal citations omitted). []
  22. Maurel v. Smith, 271 F. 211, 215 (2d Cir. 1921); see also Bisel v. Ladner, 1 F.2d 436 (3d Cir. 1924) (“The legal title to a copyright vests in the person in whose name the copyright is taken out. It may, however, be held by him in trust for the true owner, and the question of true ownership is one of fact, dependent upon the circumstances of the case.”). []
  23. Ted Browne Music Co. v. Fowler, 290 F. 751, 753 (2d Cir. 1923). []
  24. See 17 U.S.C.A. § 201(a) (West 2013) (“Copyright in a work protected under this title vests initially in the author or authors of the work. The authors of a joint work are coowners of copyright in the work.”). []
  25. See, e.g., Cortner v. Israel, 732 F.2d 267, 271 (2d Cir. 1984) (“When a composer assigns copyright title to a publisher in exchange for the payment of royalties, an equitable trust relationship is established between the two parties which gives the composer standing to sue for infringement of that copyright. Otherwise the beneficial owner’s interest in the copyright could be diluted or lessened by a wrongdoer’s infringement.”) (internal citations omitted). []
  26. Schisgall v. Fairchild Publications, 137 N.Y.S.2d 312, 318 (Sup.Ct. 1955). []
  27. Id. []
  28. See, e.g., Manning v. Miller Music Corp., 174 F.Supp. 192, 196 (S.D.N.Y. 1959) (“The law implies a promise on the publisher’s part to endeavor to make the work productive, since that is the very purpose of the assignment of literary rights and the correlative obligation to pay royalties. . . . It is this fiduciary relationship, imposing equitable obligations upon the publisher beyond those ordinarily imposed by law upon those dealing fully at arms’ length which gives the plaintiffs standing to sue here.”) (internal quotations omitted). []
  29. Id. (bracketed text added). []
  30. 17 U.S.C.A. § 501(b) (West 2013). []
  31. See id. (“The court may require such owner to serve written notice of the action with a copy of the complaint upon any person shown, by the records of the Copyright Office or otherwise, to have or claim an interest in the copyright, and shall require that such notice be served upon any person whose interest is likely to be affected by a decision in the case. The court may require the joinder, and shall permit the intervention, of any person having or claiming an interest in the copyright.”). []
  32. Righthaven, 716 F.3d at 1170. []
  33. 17 U.S.C.A. § 101 (West 2013) (“A ‘transfer of copyright ownership’ is an assignment, mortgage, exclusive license, or any other conveyance, alienation, or hypothecation of a copyright or of any of the exclusive rights comprised in a copyright, whether or not it is limited in time or place of effect, but not including a nonexclusive license.”). []
  34. See Campbell v. Bd. of Trustees of Leland Stanford Junior Univ., 817 F.2d 499 (9th Cir. 1987). []
  35. Id. at 504. []
  36. Id. at 504 n.2. []
  37. See, e.g., Waterman v. Mackenzie, 138 U.S. 252, 255 (1891) (“In equity, as at law, when the transfer amounts to a license only, the title remains in the owner of the patent . . . .”); Vaupel Textilmaschinen KG v. Meccanica Euro Italia S.P.A., 944 F.2d 870, 875 (Fed. Cir. 1991) (“[T]he term ‘assignment’ has a particular meaning in patent law, implying formal transfer of title.”); Sicom Sys. v. Agilent Techs., Inc., 427 F.3d 971, 976 (Fed. Cir. 2005) (“An exclusive licensee receives more rights than a nonexclusive licensee, but fewer than an assignee. An example of an exclusive licensee is a licensee who receives the exclusive right to practice an invention but only within a given limited territory.”). []
  38. See, e.g., Independent Wireless Tel. Co. v. Radio Corp. of America, 269 U.S. 459, 469 (1926) ([T]he owner of a patent who grants to another the exclusive right to make, use or vend the invention, which does not constitute a statutory assignment, holds the title to the patent in trust for such a licensee . . . .”). []
  39. Arachnid, Inc. v. Merit Industries, Inc., 939 F.2d 1574, 1579 (Fed. Cir. 1991) (emphasis in original); see also Crown Die & Tool Co. v. Nye Tool & Machine Works, 261 U.S. 24, 40-41 (1923) (“These owners are the patentee, his assignee, his grantee, or his personal representatives; and none but these are able to maintain an action for infringement in a court of law.”). []
  40. See 35 U.S.C.A. § 281 (West 2013) (“A patentee shall have remedy by civil action for infringement of his patent.”); 35 U.S.C.A. § 100(d) (West 2013) (“The word ‘patentee’ includes not only the patentee to whom the patent was issued but also the successors in title to the patentee.”). []
  41. Prima Tek II, L.L.C. v. A-Roo Co., 222 F.3d 1372, 1377 (Fed. Cir. 2000); see also Abbott Labs. v. Diamedix Corp., 47 F.3d 1128, 1131 (Fed. Cir. 1995) (“The right to sue for infringement is ordinarily an incident of legal title to the patent. A licensee may obtain sufficient rights in the patent to be entitled to seek relief from infringement, but to do so, it ordinarily must join the patent owner.”). []
  42. See, e.g., Independent Wireless Tel. Co. v. Radio Corp. of America, 269 U.S. 459, 468 (1926) (“The presence of the owner of the patent as a party is indispensable not only to give jurisdiction under the patent laws but also, in most cases, to enable the alleged infringer to respond in one action to all claims of infringement for his act, and thus either to defeat all claims in the one action, or by satisfying one adverse decree to bar all subsequent actions.”). []
  43. See, e.g., Waterman v. Mackenzie, 138 U.S. 252, 255 (1891) (“Any rights of the licensee must be enforced through or in the name of the owner of the patent, and perhaps, if necessary to protect the rights of all parties, joining the licensee with him as a plaintiff.”); Ortho Pharmaceutical Corp. v. Genetics Inst., 52 F.3d 1026, 1030 (Fed. Cir. 1995) (“Any other party [than one holding all substantial rights] seeking enforcement of the patent can sue, if at all, only with the patentee or in the name of the patentee.”). []
  44. Ortho Pharmaceutical Corp. v. Genetics Inst., 52 F.3d 1026, 1031 (Fed. Cir. 1995). []
  45. See, e.g., Weinar v. Rollform, Inc., 744 F.2d 797, 807 (Fed. Cir. 1984) (“[T]wo parties sharing the property rights represented by a patent may have their respective rights protected by injunction and each, when properly joined in a suit, may be entitled to damages.”). []
  46. Ortho Pharmaceutical Corp. v. Genetics Inst., 52 F.3d 1026, 1032 (Fed. Cir. 1995); see also id. at 1034 (“[A] licensee with sufficient proprietary interest in a patent has standing regardless of whether the licensing agreement so provides.”); Independent Wireless Tel. Co. v. Radio Corp. of America, 269 U.S. 459, 469 (1926) (“[T]he implied obligation of the licensor to allow the use of his name is indispensable to the enjoyment by the licensee of the monopoly which by personal contract the licensor has given.”); Sicom Sys. v. Agilent Techs., Inc., 427 F.3d 971, 976 (Fed. Cir. 2005) (“[I]f the patentee transfers all substantial rights under the patent, it amounts to an assignment and the assignee may be deemed the effective patentee under 35 U.S.C. § 281 for purposes of holding constitutional standing to sue another for patent infringement in its own name. *** While a licensee normally does not have standing to sue without the joinder of the patentee (to prevent multiplicity of litigation), an exclusive license may be treated like an assignment for purposes of creating standing if it conveys to the licensee all substantial rights.”); Textile Prods. v. Mead Corp., 134 F.3d 1481, 1484 (Fed. Cir. 1998) (“A licensee is not entitled to bring suit in its own name as a patentee, unless the licensee holds all substantial rights under the patent.”) (internal quotations omitted); McNeilab, Inc. v. Scandipharm, Inc., 1996 U.S. App. LEXIS 19073, at *3 (Fed. Cir. July 31, 1996) (“Although title to the patent remains in the patentee, the patentee is not a necessary party to suit brought by the exclusive licensee, when the patentee has retained no substantial rights in the licensed subject matter.”) (unpublished opinion). []
  47. See, e.g., McNeilab, Inc. v. Scandipharm, Inc., 95 F.3d 1164, at *5 (Fed. Cir. 1996) (“The courts have recognized that there is no substantive difference between the property interests of the exclusive licensee and the assignee of the patent, and thus have sometimes used the terms interchangeably, subordinating the purity of the distinction to the reality of the legal rights. . . . We agree that there is no substantive difference between the property interests of an assignee and of an exclusive licensee who has been granted all substantial patent rights including the right to exclude the patentee. Although it would be more accurate to preserve the distinction whereby the term “assignment” is reserved for transfers that include nominal title, we agree with precedent that when the transfer includes all substantial patent rights including the right to exclude the transferor, there is no significant difference between the rights transferred by assignment and those transferred by exclusive license.”) (unpublished opinion). []
  48. See, e.g., Prince of Peace Enterprises, Inc. v. Top Quality Food Mkt., LLC, 760 F.Supp.2d 384, 391 (S.D.N.Y. 2011) (“[A]ssignment of a trademark under the Lanham Act requires (1) sale or transfer of all rights in the mark, and (2) assignment as well of the business’s goodwill connected with the mark’s use.”) (internal citations omitted) (emphasis in original); Silverstar Enterprises, Inc. v. Aday, 537 F.Supp. 236, 239 (S.D.N.Y. 1982) (“[A]n assignment of a trademark is a transfer of the entire interest while a license . . . confers only the right to use the trademark.”). []
  49. See 15 U.S.C.A. § 1114(1) (West 2013) (“Any person who shall, without the consent of the registrant . . . use in commerce . . . a registered mark . . . shall be liable in a civil action by the registrant for the remedies hereinafter provided.”); 15 U.S.C.A. § 1127 (West 2013) (“The terms ‘applicant’ and ‘registrant’ embrace the legal representatives, predecessors, successors and assigns of such applicant or registrant.”). []
  50. See, e.g., ICEE Distributors, Inc. v. J&J Snack Foods Corp., 325 F.3d 586, 598-99 (5th Cir. 2003) (holding that exclusive licensee who does not hold all substantial rights in the mark has not standing to sue for trademark infringement). []
  51. See, e.g., Quabaug Rubber Co. v. Fabiano Shoe Co., Inc., 567 F.2d 154, 159 (1st Cir. 1977) (dictum) (gathering cases) (“[C]ourts have followed the approach used in patent infringement cases and permitted trademark infringement suits to be maintained by exclusive distributors and sellers of trademarked goods, i.e., ‘exclusive licensees’ who had a right by agreement with the owner of the trademark to exclude even him from selling in their territory.”); Fin. Inv. Co. (Bermuda) Ltd. v. Geberit AG, 165 F.3d 526, 531-32 (7th Cir. 1998) (“[A] truly exclusive licensee, one who has the right even to exclude his licensor from using the mark is equated with an assignee since no right to use the mark is reserved to the licensor, and the licensee’s standing derives from his presumed status as an assignee.”) (internal citations, brackets, ellipses, and quotations omitted); Calvin Klein Jeanswear Co. v. Tunnel Trading, Case No. 98-cv-05408, 2001 WL 1456577, at *4 (S.D.N.Y. Nov. 16, 2001) (unreported) (gathering cases) (“[S]tanding may exist where the ‘licensing’ agreement grants to an exclusive licensee a property interest in the trademark, or rights that amount to those of an assignee.”); Nestle Prepared Foods Co. v. Pocket Foods Corp., Case No. 04-CV-02533, 2006 WL 2990208, at *6 (D. Colo. Oct. 19, 2006) (“Although this statute does not specifically address the status of a trademark’s exclusive licensee, courts have uniformly concluded that the exclusive licensee of a trademark has the right to enforce the trademark. Courts reach this conclusion when an exclusive licensee is assigned all rights which accompany the trademark.”) (internal citations omitted). []
  52. See, e.g., Nat’l Licensing Ass’n, LLC. v. Inland Joseph Fruit Co., 361 F.Supp.2d 1244, 1254 (E.D. Wash. 2004) (“[T]hose cases finding standing for de facto assignees are the exceptions that prove the rule—namely, that only the registrant of a trademark or its legal representatives, predecessors, successors, and assigns have standing to sue for trademark infringement under § 1114.”); Nova Wines, Inc. v. Adler Fels Winery LLC, 467 F.Supp.2d 965, 974 (N.D. Cal. 2006) (“[A]n exclusive license that amounts to a de facto assignment creates standing in the exclusive licensee.”). []
  53. Visa, U.S.A., Inc. v. Birmingham Trust Nat. Bank, 696 F.2d 1371, 1377 (Fed. Cir. 1982); see also 3 McCarthy on Trademarks and Unfair Competition § 18:9 (4th ed.) (“An assignment and license-back to the assignor is a useful structure to meet certain commercial needs.”). []
  54. E. & J. Gallo Winery v. Gallo Cattle Co., 967 F.2d 1280, 1290 (9th Cir. 1992). []
  55. See Innovation Ventures, LLC v. Pittsburg Wholesale Grocers, Inc., Case No. 12-cv-05523, 2013 WL 1007666 (N.D. Cal. Mar. 13, 2013). []
  56. Id. at *2. []
  57. Id. at *2-3 (internal citations and quotations omitted). []
  58. Id. at *5 (emphasis in original). []
  59. Id. at *4-5. []
  60. Id. at *6. []
  61. 17 U.S.C.A. § 101 (West 2013). []
  62. 17 U.S.C.A. § 204(a) (West 2013) (“A transfer of copyright ownership, other than by operation of law, is not valid unless an instrument of conveyance, or a note or memorandum of the transfer, is in writing and signed by the owner of the rights conveyed or such owner’s duly authorized agent.”). []
  63. 17 U.S.C.A. § 205(a) (West 2013) (“Any transfer of copyright ownership or other document pertaining to a copyright may be recorded in the Copyright Office if the document filed for recordation bears the actual signature of the person who executed it, or if it is accompanied by a sworn or official certification that it is a true copy of the original, signed document. A sworn or official certification may be submitted to the Copyright Office electronically, pursuant to regulations established by the Register of Copyrights.”). []
  64. 17 U.S.C.A. § 205(e) (West 2013) (“A nonexclusive license, whether recorded or not, prevails over a conflicting transfer of copyright ownership if the license is evidenced by a written instrument signed by the owner of the rights licensed or such owner’s duly authorized agent, and if– (1) the license was taken before execution of the transfer; or (2) the license was taken in good faith before recordation of the transfer and without notice of it.”). []
  65. See 17 U.S.C.A. § 708(a)(4) (West 2013) (“Fees shall be paid to the Register of Copyrights– for the recordation, as provided by section 205, of a transfer of copyright ownership or other document.”). []
  66. See generally 5-19A Nimmer on Copyright § 19A.04. []
  67. See, e.g., 59 C.J.S. Mortgages § 239 (“A mortgage of real property is personal property, and in jurisdictions in which a mortgage is regarded as a mere lien, the interest of the mortgagee is a mere chattel interest; where legal title passes to the mortgagee, the mortgagee has legal title only as between the mortgagor and itself and only for the purpose of securing the indebtedness. . . . Thus, in title-theory states a mortgagee holds title to the land from the outset of the loan until the debt has been satisfied, while in lien-theory states, the borrower holds title to the land and the mortgagee has a lien on the property.”); In re SeSide Co., Ltd., 152 B.R. 878, 883 (E.D. Pa. 1993) (“In Pennsylvania, a mortgage does not constitute a transference of title from a mortgagor to a mortgagee. A mortgagee only obtains a lien securing the mortgagor’s indebtedness.”); In re Poe, 477 F.3d 1317, 1323 (11th Cir. 2007) (“Alabama is a title theory state, meaning that mortgaging property actually works a conveyance of legal title to the lender.”); Maglione v. BancBoston Mortgage Corp., 29 Mass.App.Ct. 88, 90 (1990). (“Literally, in Massachusetts, the granting of a mortgage vests title in the mortgagee to the land placed as security for the underlying debt. The mortgage splits the title in two parts: the legal title, which becomes the mortgagee’s, and the equitable title, which the mortgagor retains.”). []
  68. H.R. Rep. 94-1476, 123. []
  69. See Aerocon Eng’g, Inc. v. Silicon Valley Bank, 303 F.3d 1120 (9th Cir. 2002). []
  70. Id. at 1126 (footnotes omitted). []
  71. Id. []
  72. U.S. ex rel. Small Bus. Admin. v. Commercial Tech., Inc., 354 F.3d 378, 384 (5th Cir. 2003). []
  73. See Matter of Hill, 981 F.2d 1474, 1475 (5th Cir. 1993); see also Black’s Law Dictionary (9th ed. 2009) (A “pledge” is “[t[he act of providing something as security for a debt or obligation. A bailment or other deposit of personal property to a creditor as security for a debt or obligation.”). []
  74. See Aerocon Eng’g, Inc. v. Silicon Valley Bank, 303 F.3d 1120, 1125 (9th Cir. 2002). []

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Cross-posted on the Law Theories blog.

In the never-ending copyright debate, one often comes across certain words the usage of which both sides vehemently disagree upon. One such point of contention is the use of the word “theft” to describe copyright infringement. Ars Technica ran an article a few years back where Vice President Joe Biden was quoted as saying that “[p]iracy is flat, unadulterated theft.” Copyhype’s Terry Hart had a post a week later discussing the infringement-as-theft meme, mentioning the fact that even Justice Breyer, a copyright skeptic, had referred to deliberate infringement as “garden-variety theft.”1 The response from the other side of the debate was predictable, with the usual suspects demanding that copyright infringement is not theft—though the skeptics conspicuously neglected to define the word theft or to actually explain why it’s wrong to refer to infringement as theft.

The debate lives on today. Just a couple of weeks ago, Swedish Pirate Party founder Rick Falkvinge had a post on his blog addressing what he called “the most disturbingly false bullshit repeated by pro-copyright-monopoly pundits,” i.e., that “copying is stealing.” He offered several retorts for others to use when this particular issue inevitably arises in future debates. Falkvinge amusingly noted that when it comes to such debates, “it’s not a logic game but a numbers game,” and “[i]t’s about looking like the winning team.” He claimed that anyone referring to infringement as “stealing” is “trying to redefine words in a very dishonest way to frame the debate in a factually incorrect light.” To Falkvinge, stealing is defined as “losing an object,” and anyone who disagrees is “talking of horseless carriages.”

My favorite part of Falkvinge’s post is where he claimed that we “should look in the nearest lawbook” since “in no book of laws on this entire planet are property laws (where stealing is defined) and copyright monopoly laws defined in the same section.” This claim is easily refuted. For example, Section 2319 of the U.S. Code, which defines “Criminal infringement of a copyright,” is found in Chapter 113 of Title 18, which is entitled “Stolen Property.” Section 3931 of the Pennsylvania Crimes Code, which defines “Theft of unpublished dramas and musical compositions,” is found in Chapter 39 of Title 18, which is entitled “Theft and Related Offenses.” And Section 5/16-7 of the Illinois Compiled Statutes, which defines “Unlawful use of recorded sounds or images,” is found in Subdivision 5 of Article 16, which is entitled “General Theft.” It’s trivially easy to find many more examples just like these. Having read many posts by Falkvinge (as well as many law books), I don’t get the impression that he’s actually opened many law books himself.

In this post, I’ll look at the meaning of the word theft, and I’ll explain why it is I think it’s perfectly natural to think of copyright infringement as theft. I think that oftentimes people refer to infringement as theft in the colloquial sense of the word, but it’s the legal meaning of the term that I will focus on. At the outset, I note that theft is a term of art that has many different meanings since each state has its own theft laws that are interpreted differently. For all of the arguments and examples I give below, there certainly are apposite counterarguments and counterexamples. I don’t mean for my view to be taken as the only possible one, nor do I deny that some of what I’m about to say is in fact the minority view. But I’ll leave the opposing arguments for the cynics to make—although it would be nice if they discussed the actual law while making legal arguments for a change.

What is Theft?

Theft did not exist at common law. Instead, theft is an omnibus term of recent origin that subsumes previously distinct property crimes such as larceny, embezzlement, and false pretenses.2 The antecedent to what most people think of as theft is larceny. Larceny can be defined as the “unlawful taking and carrying away of someone else’s personal property with the intent to deprive the possessor of it permanently.”3 Under the common law, larceny required that the thing taken be tangible property.4 This is presumably why the skeptics think it’s wrong to refer to copyright infringement as theft. While copyright is personal property, it’s intangible property that, by its very nature, is nonrivalrous. Thus, if somebody infringes a copyright, they haven’t dispossessed the copyright owner of any tangible property, a necessary element for larceny under the common law.

To the uninitiated, the confusion about why copyright infringement is theft is understandable. But the line of reasoning that focuses on the old, common law definition of larceny neglects to take account of the fact that the modern definition of property for purposes of theft statutes has been broadened to include both tangible and intangible property.5 For example, the paradigmatic Model Penal Code, published first in 1962 by the sages at the American Law Institute, defines property for purposes of theft very broadly: “‘property’ means anything of value, including real estate, tangible and intangible personal property, contract rights, choses-in-action and other interests in or claims to wealth, admission or transportation tickets, captured or domestic animals, food and drink, electric or other power.”6

The Model Penal Code goes on to define theft by unlawful taking or disposition of movable property: “A person is guilty of theft if he unlawfully takes, or exercises unlawful control over, movable property of another with purpose to deprive him thereof.”7 “Property of another” is defined to include “property in which any person other than the actor has an interest which the actor is not privileged to infringe.”8 And “deprive” is defined to mean “to withhold property of another permanently or for so extended a period as to appropriate a major portion of its economic value.”9 Thus, we can break theft of movable property under the Model Penal Code into three elements: (1) unlawful taking or control, (2) of movable property of another, and (3) with intent to deprive. The first two elements comprise the actus reus, while the final element is the mens rea.

Most, if not all, states have theft laws that substantially track the Model Penal Code. For example, in my state of Louisiana, theft is defined broadly as follows:

Theft is the misappropriation or taking of anything of value which belongs to another, either without the consent of the other to the misappropriation or taking, or by means of fraudulent conduct, practices, or representations. An intent to deprive the other permanently of whatever may be the subject of the misappropriation or taking is essential.10

Florida defines theft in similarly broad terms:

A person commits theft if he or she knowingly obtains or uses, or endeavors to obtain or to use, the property of another with intent to, either temporarily or permanently:

(a) Deprive the other person of a right to the property or a benefit from the property.

(b) Appropriate the property to his or her own use or to the use of any person not entitled to the use of the property.11

Copyright opponents such as Falkvinge appear to have a greatly attenuated understanding of what property is and what it means to deprive someone of that property. For example, the Court of Appeals of Kentucky noted seventy years ago that “the word ‘property’ is so all-embracing as to include within its definition every physical object, intangible benefit, and prerogative susceptible of ownership, possession, or disposition.”12 Over a century ago, the Supreme Court of Washington noted that “property . . . consists not in tangible things themselves, but in certain rights in and appurtenant to those things,” and “it follows that when a person is deprived of any of those rights he is to that extent deprived of his property.”13 Or as the Supreme Court of New York, Appellate Division, put it over a century ago, property “is intended to embrace every species of valuable right and interest and whatever tends in any degree, no matter how small, to deprive one of that right, or interest, deprives him of his property.”14

In 1942, the Supreme Court of Iowa explained:

[P]roperty . . . is applied with many different meanings. Sometimes it is taken in the loose and vulgar acceptance to denote not the right of property or dominium, but the subject of such a right; as where a horse or piece of land is called my property. A little reflection, however, will suffice to convince any one that property is not the corporeal thing itself of which it is predicated, but certain rights in or over the thing. . . . These rights are the right of use, the right of exclusion and the right of disposition. . . . The dullest individual among the people knows and understands that his property in anything is a bundle of rights.15

Thus, property is a very broad term that refers not just to the thing itself, as laymen such as Falkvinge seem to think, but also to the rights, benefits, and interests that accompany ownership of the thing. Anyone who exercises dominion over the property of another, interfering with these rights, benefits, or interests, is depriving the property owner of his property. It matters not if the wrongdoer doesn’t prevent the property owner from also exercising dominion over the property. It is the act of doing something with the property that is inconsistent with the property owner’s rights, benefits, or interests that matters. When one understands these broad meanings of these legal terms of art, calling copyright infringement theft doesn’t seem so strange. But to really understand how theft applies to intangibles, I think it’s useful to look at some concrete examples.

Examples of Theft of Intangibles

In Dreiman v. State,16 the defendant had been convicted of burglary, i.e., entering a building with the intent to commit larceny, for breaking into his ex-girlfriend’s house, taking her keys and having copies made, and then returning the keys. At the time, Wyoming’s larceny statute provided: “A person who steals, takes and carries, leads or drives away property of another with intent to deprive the owner or lawful possessor is guilty of larceny.”17 On appeal, the defendant argued that there was no intent to deprive the victim of her keys since he had only borrowed them to make copies. The Supreme Court of Wyoming held that the defendant had deprived the victim of something, though that thing was intangible:

Copying those keys, therefore, was taking something from her and depriving her of her right to have exclusive access to her trailer house and automobile. Unauthorized copies of a person’s keys diminish the value of the original keys—keeping unwanted persons out of the trailer. In other contexts it has been said that property in a thing consists not merely in its ownership and possession, but in the unrestricted right of use, enjoyment, and disposal. Anything which destroys one or more of these elements of property to that extent destroys the property itself. . . . Thus, although the owner may retain possession of the original property, there has been nevertheless a deprivation of property when a copy is made and retained by another. The copies of the car and house keys . . . constituted sufficient evidence from which the jury could infer that appellant had the specific intent to steal when he unlawfully entered [the victim’s] dwelling.18

Thus, it’s theft to borrow someone’s keys and to make copies without their permission. This is so even if the original keys are returned to the owner. What makes it theft, which requires an intentional deprivation of the victim’s property, is the fact that the thief has taken from the owner of the keys the intangible benefits that go with having exclusive control over the set of keys. But this was not all that the defendant had taken. While in his ex-girlfriend’s house, the defendant copied down the victim’s unlisted phone number. The defendant argued that this type of information is not property which can be taken under the applicable larceny statute. The Supreme Court of Wyoming disagreed, finding that information “has been held to be property and a subject of theft in several criminal contexts.”19 Even though the defendant had merely copied down the phone number, he nonetheless had deprived the victim of something—the victim’s property interest in keeping her phone number private.

The same sort of deprivation occurs when someone photocopies or photographs documents that he has no right of access to. For example, in People v. Parker,20 the defendant was convicted of attempting to receive stolen property based on a scheme he had concocted to obtain confidential telephone directory supplements that were not publicly distributed. The defendant arranged to have the supplements delivered to him, which he would then photograph and return about an hour later. The defendant argued that since he was merely photographing the supplements and returning them shortly thereafter, there was no intent to deprive the telephone company of its property. The California Court of Appeal disagreed, and it upheld his conviction: “The supplements herein were property, had value and were the subject of theft within the meaning” of the applicable theft statute.21 Thus, even though the defendant promptly returned the supplements, he had nonetheless intended to deprive the victim of the intangible rights, benefits, and interests associated with the supplements when he photographed them.

In People v. Ellis,22 the defendant had been convicted of burglary for breaking into the home of his estranged wife’s mother for the purpose of locating his wife’s address in the mother’s address book. On appeal, the defendant argued that he could not be convicted of burglary since an address is an intangible thing that is not property that can be stolen. The California Court of Appeal disagreed, noting that “courts have shown no hesitation in broadly defining property in an effort to protect privacy and confidentiality in something that is deserving of being safeguarded from disclosure.”23 The defendant, who had obtained the address without consent, was “in a position to reap the benefits of this information by having unwanted access to the residence,” and it “destroyed” the mother’s “ability to limit those who knew” the wife’s new address.24 Thus, the appellate court held that the address was property that could be stolen by merely copying it down.

Lastly, in People v. Kwok,25 the defendant was convicted of burglary after he broke into his girlfriend’s house, removed the lock from one of her doors, and took it to a locksmith to get a key made. The defendant thereafter returned to her house and replaced the lock. On appeal, the defendant argued that he couldn’t be convicted of burglary since he had not taken the lock with the intent to permanently deprive the victim of it. The defendant claimed that making an unauthorized copy of someone’s house key is not theft, but the California Court of Appeal did not agree:

[P]roperty is something that one has the exclusive right to possess and use. A key to one’s residence is clearly one’s property. . . . [A] homeowner’s or tenant’s property interest in his or her house key is not just the right to maintain possession of a tangible object—the key—but also the right to control the intangible benefit conferred by ownership of the key, i.e., the ability to control access to one’s residence. Courts have said that the word property is all-embracing so as to include every intangible benefit and prerogative susceptible of possession or disposition. . . . Making an unauthorized copy of a “borrowed” key . . . destroys the intangible benefit and prerogative of being able to control access to one’s residence just as thoroughly as outright theft of the key itself.26

The appellate court held that the defendant’s “acquisition of the key was theft” since he had “obtained a key in which he had no legitimate property interest.”27 Moreover, in the court’s opinion, the victim “was the rightful owner of the key, even though the key, as a tangible object, did not exist until appellant had it made.”28

As you may have guessed, I chose the foregoing examples because they involve theft of intangibles based on unauthorized copying by the defendant. Whether the thief returns the original property after copying it is irrelevant since the intangible rights, benefits, and interests in the property nevertheless have been stolen. Copyright opponents such as Falkvinge, however, hold a very narrow view of what it means to steal something. For example, Falkvinge claims that when it comes to copyright infringement, “[n]obody is stealing anything” since “[t]hey are manufacturing their own copies using their own property.” The examples above refute this claim. Not only are the rights, benefits, and interests in a copyright intangibles that can be stolen, but copyright itself is intangible property that consists only in those rights, benefits, and interests—that’s all that can be stolen.

Dowling and Copyright Preemption

The darling of the copyright opponents is Dowling, and no discussion of infringement-as-theft would be complete without discussing this Supreme Court opinion from 1985.29 Dowling was a 6-3 decision that looked at whether the National Stolen Property Act (“NSPA”), as codified at Section 2314 of Title 18, applied to bootleg recordings. The NSPA prohibits the transportation in interstate commerce of “any goods, wares, merchandise, securities or money” that are known “to have been stolen, converted or taken by fraud.”30 Dowling was accused of trafficking in illicit recordings of Elvis Presley for which no license had been obtained nor royalties paid. On appeal, Dowling did not dispute his conviction for copyright infringement, instead challenging whether the bootleg recordings he dealt in were stolen property under the NSPA.

The Supreme Court took the case to address the “apparent conflict among the Circuits concerning the application of the statute to interstate shipments of bootleg and pirated sound recordings and motion pictures whose unauthorized distribution infringed valid copyrights.”31 The Court started its analysis with recognizing that its job, consistent with the rule of lenity, is to interpret criminal statutes narrowly and strictly. Dowling argued that the goods he shipped were not stolen within the meaning of the NSPA since the phonorecords themselves had not been stolen—while the copies shipped were certainly infringing, the physical phonorecords themselves were not stolen property. The Court agreed with Dowling, holding that the phonorecords at issue were not “stolen, converted or taken by fraud” as required by the NSPA.

In the Court’s opinion, prosecutions under the NSPA required that the physical goods shipped be themselves tangible goods that have been stolen: “[T]he provision seems clearly to contemplate a physical identity between the items unlawfully obtained and those eventually transported.”32 This meant, in the Court’s view, that “some prior physical taking of the subject goods” was necessary.33 The Court rejected the government’s view that shipping illicit copies of copyrighted materials would fit the bill if the materials those copies were embodied in had not themselves been stolen:

[T]he Government’s theory here would make theft, conversion, or fraud equivalent to wrongful appropriation of statutorily protected rights in copyright. The copyright owner, however, holds no ordinary chattel. A copyright, like other intellectual property, comprises a series of carefully defined and carefully delimited interests to which the law affords correspondingly exact protections. *** It follows that interference with copyright does not easily equate with theft, conversion, or fraud. ***

There is no dispute in this case that Dowling’s unauthorized inclusion on his bootleg albums of performances of copyrighted compositions constituted infringement of those copyrights. It is less clear, however, that the taking that occurs when an infringer arrogates the use of another’s protected work comfortably fits the terms associated with physical removal employed by § 2314. The infringer invades a statutorily defined province guaranteed to the copyright holder alone. But he does not assume physical control over the copyright; nor does he wholly deprive its owner of its use.34

It’s no wonder that copyright skeptics love this language, coming with the imprimatur of a majority of the Supreme Court, no less. In order to be convicted of transporting stolen goods under the NSPA, the Court held, the defendant had to have in his possession something tangible that was stolen. As the dissent pointed out, citing case law from multiple circuits, this holding was “contrary to the clear weight of authority.”35 You can read the dissent yourself to get other counterarguments, but for better or for worse, the Court read into the NSPA a distinction between tangible and intangible property. Only the former can be physically possessed as is required by the NSPA. A copyright, which is intangible and has no physical substance, simply can’t be carried across state lines.

But this doesn’t mean that copyright infringement is not theft. As the Second Circuit noted just last year, Dowling only stands for “the proposition that the theft and subsequent interstate transmission of purely intangible property is beyond the scope of the NSPA.”36 In other words, intangible property can still be the subject of theft, but the NSPA just doesn’t reach it. The First Circuit has noted that the NSPA simply “does not apply to purely intangible information, the theft of which is punishable under copyright law and other intellectual property statutes.”37 While the NSPA doesn’t apply to intangible property, the Economic Espionage Act still proscribes the “theft of trade secrets” in Section 1832 of Title 18, and the Identity Theft Penalty Enhancement Act still proscribes “aggravated identity theft” in Section 1028A of Title 18. Intangibles can be the subject of theft, there is no doubt; whether the NSPA reaches that theft is beside the point.

Moreover, the Dowling majority’s claim that “interference with copyright does not easily equate with theft” can be easily rebutted by looking at theft statutes that have been preempted by the Copyright Act. Congress made clear in Section 301 that it intended to expressly preempt the entire field of state law where the Copyright Act applies. Generally speaking, a state law is preempted by the Copyright Act if (1) the work at issue comes within the subject matter of copyright as defined by Section 102, and (2) the rights granted under the state law are equivalent to any of the exclusive rights granted by Section 106.38 To survive preemption, the state law must protect rights that are qualitatively different than the rights granted by copyright. In other words, the state law claim must be based on some extra element which changes its nature.39 If “the right defined by state law may be abridged by an act which, in and of itself, would infringe one of the exclusive rights,” then it is preempted.40

There are many examples in the case law of state theft statutes being preempted by the Copyright Act, but I’ll focus on just one—the Eleventh Circuit’s opinion in Crow v. Wainwright.41 Crow was a bootlegger who had been convicted by a Florida state court for violating Section 812.019 of the Florida Statutes Annotated, which prohibits “[d]ealing in stolen property.” The stolen property Crow was convicted of trafficking in was not the underlying copyright or the bootleg eight-track tapes themselves, but rather it was the private contractual rights that a certain performer held to collect royalties from a certain copyright owner. The Florida Court of Appeal and the Supreme Court of Florida upheld Crow’s conviction, finding that the state theft statute at issue was not preempted by the Copyright Act.

Crow then turned to the federal courts for relief. The Eleventh Circuit ran through the Section 301 preemption analysis, finding that the sound recording at issue clearly fell within the subject matter of copyright under Section 102. The state had justified its conviction of Crow “by attempting to characterize the stolen property rights as contract rights not within the exclusive scope of section 106.”42 The Eleventh Circuit rejected this argument, noting that since Crow was not a party to the contract between the performer and the copyright owner, the action could not be maintained under state contract law. Instead, the “stolen property rights sold by Crow,” said the federal appellate court, were the exclusive rights to distribute and to reproduce the work—i.e., rights granted exclusively under Section 106 of the Copyright Act.43 As such, the Eleventh Circuit held that Florida’s theft statute was preempted by the Copyright Act:

Despite the name given the offense, the elements essential to establish a violation of the Florida statute in this case correspond almost exactly to those of the tort of copyright infringement. The state criminal statute differs only in that it requires the prosecution to establish scienter [i.e., intent], which is not an element of an infringement claim, on the part of the defendant. This distinction alone does not render the elements of the crime different in a meaningful way.

Section 506 of the Copyright Act, which sets forth criminal penalties for copyright infringement, also requires the prosecution to prove scienter as an element of the case. The additional element of scienter traditionally necessary to establish a criminal case merely narrows the applicability of the statute. The prohibited act—wrongfully distributing a copyrighted work—remains the same. Section 301 clearly prohibits Florida from prosecuting Crow in this case, and we conclude that Crow’s conviction is null and void.44

Thus, the Eleventh Circuit did not accept the state’s argument that its theft laws could be applied to Crow’s copyright infringement. If anything disproves the statement in Dowling that “interference with copyright does not easily equate with theft,” it’s the fact that courts do easily equate copyright infringement with state theft laws when doing a preemption analysis under Section 301.

Copyright Infringement as Theft

The word “theft” without any qualification usually refers to the criminal variety of theft, but it should be noted that there exists both criminal theft and civil theft. Whereas criminal theft claims are brought by the government, civil theft claims are instituted by private parties. A civil theft proceeding can be initiated by the victim against not only the original taker of his stolen property, but also against any subsequent person having possession of it. The civil theft action typically permits the victim to recover his stolen property and to collect three-times his damages. Colorado’s civil theft statute is representative of such statutes:

All property obtained by theft, robbery, or burglary shall be restored to the owner, and no sale, whether in good faith on the part of the purchaser or not, shall divest the owner of his right to such property. The owner may maintain an action not only against the taker thereof but also against any person in whose possession he finds the property. In any such action, the owner may recover two hundred dollars or three times the amount of the actual damages sustained by him, whichever is greater . . . .45

Like theft, copyright infringement also comes in two varieties: civil infringement and criminal infringement. Civil infringement actions are brought by private parties under Section 501(b) of the Copyright Act, which permits “[t]he legal or beneficial owner of an exclusive right under a copyright . . . to institute an action for any infringement of that particular right committed while he or she is the owner of it.”46 Criminal infringement actions, on the other hand, are instituted by the government under Section 506(a) of the Copyright Act against “[a]ny person who willfully infringes a copyright . . . .”47 It might be tempting to equate civil theft with civil infringement and criminal theft with criminal infringement, but it’s not that simple. A civil theft statute creates a private right of action, but it still requires the property at issue to have been the subject of criminal theft. In other words, to succeed in a civil theft claim, the plaintiff still has to show that his property was stolen under the state’s criminal theft statutes.48

The civil theft analysis thus collapses into an analysis of the criminal theft statutes, and there can be no civil theft unless there is an underlying criminal theft. But the civil and criminal varieties of copyright infringement do not work the same way. All criminal infringements are also civil infringements, but not all civil infringements constitute criminal infringements. The primary difference between civil and criminal infringement lies in the mens rea element. Civil infringement is an intentional tort such that the defendant must have intended to do the copying, but it is also a strict liability tort such that there is no need to prove an intent to infringe in order to establish the defendant’s liability.49 Since civil infringement is a strict liability tort, whether the defendant acted innocently or willfully goes to the issue of damages, not liability. An innocent infringer is just as liable as a willful one, but the latter faces the possibility of being on the hook for more damages than the former.50

Criminal infringement, on the other hand, requires that the defendant must have willfully infringed in order to be guilty, that is, that he not only intended to copy but also that he intended to violate the law by copying.51 In other words, a defendant cannot be found guilty of criminal infringement unless it is proved that he had the specific intent to commit copyright infringement. Thus, this intent to infringe element distinguishes criminal from civil infringement. Besides the necessity of willfulness, criminal infringement also differs from civil infringement by requiring that it be done in one of three ways: (1) “for purposes of commercial advantage or private financial gain,” (2) by reproducing or distributing “during any 180-day period” one or more copies of one of more copyrighted works “which have a total retail value of more than $1,000,” or (3) “by the distribution of a work being prepared for commercial distribution . . . if such person knew or should have known that the work was intended for commercial distribution.”52

Turning back to the Model Penal Code’s definition of theft, “[a] person is guilty of theft if he unlawfully takes, or exercises unlawful control over, movable property of another with purpose to deprive him thereof.”53 I mentioned above that this can be broken down into three elements: (1) unlawful taking or control, (2) of movable property of another, and (3) with intent to deprive. While it may be tempting to compare only criminal infringement with criminal theft since civil infringement doesn’t have a specific intent element, i.e., civil infringement doesn’t require an intent to infringe, we must not forget that there is such thing as willful civil infringement. Section 504(c)(2) provides for increased damages awards when civil infringement is done willfully, that is, when the defendant intends to infringe.54 In other words, just because liability for civil infringement doesn’t require there to be an intent to infringe, that doesn’t preclude the possibility that there was such an intent element present when the defendant infringed.

To see why intentional copyright infringement, whether civil or criminal, is theft, we simply have to run through the Model Penal Code’s elements of theft. The first element, unlawful taking or control, is straightforward. Copyright infringement involves both an unlawful taking and unlawful control. As demonstrated in the examples of theft of intangibles mentioned above, this element doesn’t require the defendant to physically dispossess the victim of something tangible. Rather, the thing taken can be intangible. With copyright infringement, the infringer takes the intangible rights, benefits, and interests that go with copyright ownership, including the right to exclude the infringer from copying. Moreover, if you unlawfully copy my work, you’ve taken from me some part of the economic value of my copyright. And by making that illicit copy, you have exerted unlawful control over my property—you’ve taken it upon yourself to exert dominion over my property in a way that conflicts directly with my exclusive rights.

The second element, that copyright constitutes movable property of another, seems exceedingly obvious to me, but I know that skeptics such as Falkvinge define property so narrowly that intangibles such as copyright aren’t property under their definition. But as noted above, the modern definition of property, especially in the context of theft statutes, is extremely expansive. As the Supreme Court of Nevada has noted, “property is a broad concept encompassing every intangible benefit and prerogative susceptible of possession or disposition.”55 For a more rigorous definition of property, the Ninth Circuit has formulated the following three-part test:

[T]hree criteria must be met before the law will recognize a property right: First, there must be an interest capable of precise definition; second, it must be capable of exclusive possession or control; and third, the putative owner must have established a legitimate claim to exclusivity.56

Copyright easily meets this definition of property. A copyright is capable of precise definition as Section 106 delineates the specific exclusive rights that a copyright owner may do or authorize. Similarly, a copyright is capable of exclusive possession or control since the Copyright Act provides that a copyright owner has certain exclusive controls over his copyrighted work. That the work is not naturally excludable doesn’t take away from the fact that it is de jure excludable. Lastly, a copyright owner’s exclusivity is legitimate as it is specifically granted under the Copyright Act, which Congress enacts pursuant to its enumerated Article I power.

The final element of the Model Penal Code’s formulation of theft looks at whether there is an intent to deprive. As demonstrated in the examples above concerning the theft of intangibles, this element is not as simple as intentionally depriving the victim of his tangible property. Instead, the issue is whether the thief has intended to deprive the victim of any of the rights, benefits, or interests that the victim has an exclusive claim to. When someone intentionally infringes, whether that infringement is civil or criminal, the infringer has purposefully deprived the victim of something—the intangible prerogatives appurtenant to the exclusive ownership of his property. It doesn’t matter that the copyright owner can still exert some control over his copyright. Any act that is inconsistent with the copyright owner’s exclusive rights deprives the owner of his property.

Thus, not only is all criminal infringement the same thing as criminal theft since there is the specific intent to infringe, but all willful civil infringement is criminal theft as well since there is also that same specific intent. This is presumably why Justice Breyer in Grokster said that “deliberate unlawful copying is no less an unlawful taking of property than garden-variety theft.”57 Intentional infringement, whether the civil or the criminal variety, does in fact fulfill the traditional elements of theft. This is so not only because property for purposes of theft statutes is defined broadly so as to include intangibles, but it’s also because intentional infringement involves an unlawful taking or control of another’s personal property with the intent to deprive the victim of his property. In many ways, copyright law has been ahead of its time. Long before the modern notion that theft can be applied to intangibles came into fashion, copyright law had recognized that interference with the rights, benefits, and interests in an intangible was a wrong.

Special thanks to Terry Hart for his valuable feedback in drafting this post.

Follow me on Twitter: @devlinhartline

Footnotes

  1. Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913, 961 (2005) (Breyer, J., concurring). []
  2. See, e.g., Editors’ Notes, Model Penal Code § 223.1 (“The offenses heretofore known as larceny, embezzlement, false pretense, extortion, blackmail, fraudulent conversion, receiving stolen property, and the like, as well as the technical distinctions among them, are thereby replaced with a unitary offense [i.e., theft]”). []
  3. Black’s Law Dictionary (9th ed. 2009). []
  4. See, e.g. Bell v. United States, 462 U.S. 356, 360 (1983) (“[C]ommon-law larceny was limited to thefts of tangible personal property.”); People v. Zakarian, 121 Ill. App. 3d 968, 972 (1984) (“At common law, only tangible personal property could be the subject of larceny.”); People v. Ashworth, 222 N.Y.S. 24, 28-29 (1927) (“That which may be the subject of larceny is well comprehended in the following statement: It ‘should have corporeal existence, that is, be something the physical presence, quantity, or quality of which is detectable or measurable by the senses or by some mechanical contrivance; for a naked right existing merely in contemplation of law, although it may be very valuable to the person who is entitled to exercise it, is not a subject of larceny.’”) (internal citations omitted); 3 Subst. Crim. L. § 19.4 (2d ed.) (“At common law, larceny was limited to misappropriations of goods and chattels—i.e., tangible personal property.”). []
  5. See, e.g., N.Y. Penal Law § 155.00 (McKinney 2013) (“‘Property’ means any money, personal property, real property, computer data, computer program, thing in action, evidence of debt or contract, or any article, substance or thing of value, including any gas, steam, water or electricity, which is provided for a charge or compensation.”) (defining “property” under state larceny law); 3 Subst. Crim. L. § 19.4 (2d ed.) (“Modern statutes in all jurisdictions have broadened the scope of larceny to include such intangible personal property as written instruments embodying choses in action or other intangible rights.”). []
  6. Model Penal Code § 223.0 (emphasis added). []
  7. Id. at § 223.2; “movable” property is another name for personal property. []
  8. Id. at § 223.0. []
  9. Id. []
  10. La. Rev. Stat. Ann. § 14:67(A) (West 2013) (emphasis added); “Anything of value,” in turn, is defined to include “any conceivable thing of the slightest value, movable or immovable, corporeal or incorporeal, public or private.” Id. at § 14:2. []
  11. Fla. Stat. Ann. § 812.014(1) (West 2013); “Obtains or uses” is defined to mean “any manner of . . . [t]aking or exercising control over property” or “[m]aking unauthorized use, disposition, or transfer of property.” Id. at § 812.012(3); “Property,” in turn, is defined to mean “anything of value,” which “includes . . . [t]angible or intangible personal property, including rights, privileges, interests, and claims.” Id. at § 812.012(4). []
  12. Button v. Hikes, 296 Ky. 163, 168 (1943). []
  13. State v. Superior Court of King Cnty., 26 Wash. 278, 287 (1901) (internal quotations and citations omitted). []
  14. People ex rel. Short v. Warden of City Prison, 145 A.D. 861, 863 (1911). []
  15. Liddick v. City of Council Bluffs, 232 Iowa 197, 217 (1942) (internal quotations omitted). []
  16. Dreiman v. State, 825 P.2d 758 (Wyo. 1992). []
  17. Id. at 760 (internal quotations and citations omitted). []
  18. Id. at 761 (internal quotations and brackets omitted). []
  19. Id. []
  20. People v. Parker, 217 Cal. App. 2d 422 (1963). []
  21. Id. at 426. []
  22. People v. Ellis, A099357, 2003 WL 21513612 (Cal. Ct. App. July 3, 2003) (unpublished opinion). []
  23. Id. at *6. []
  24. Id. []
  25. People v. Kwok, 63 Cal. App. 4th 1236 (1998). []
  26. Id. at 1250-51 (internal quotations and citations omitted). []
  27. Id. at 1251. []
  28. Id. []
  29. See Dowling v. United States, 473 U.S. 207 (1985). []
  30. Id. at 208 (internal quotations and citations omitted). []
  31. Id. at 213. []
  32. Id. at 216. []
  33. Id. []
  34. Id. at 216-18 (internal quotations and citations omitted; paragraph breaks altered). []
  35. Id. at 230 (Powell, J., dissenting). []
  36. United States v. Aleynikov, 676 F.3d 71, 77 (2d Cir. 2012) (emphasis added). []
  37. United States v. Martin, 228 F.3d 1, 14 (1st Cir. 2000) (internal quotations omitted; emphasis added). []
  38. See, e.g., United States ex rel. Berge v. Bd. of Trustees of the Univ. of Alabama, 104 F.3d 1453, 1463 (4th Cir. 1997). []
  39. See, e.g., Rosciszewski v. Arete Associates, Inc., 1 F.3d 225, 229 (4th Cir. 1993). []
  40. Id. (internal quotations omitted). []
  41. Crow v. Wainwright, 720 F.2d 1224 (11th Cir. 1983). []
  42. Id. at 1226. []
  43. Id. []
  44. Id. at 1226-27 (internal quotations and footnotes omitted; paragraph breaks altered; bracketed text added). []
  45. Colo. Rev. Stat. Ann. § 18-4-405 (West 2013). []
  46. 17 U.S.C.A. § 501(b) (West 2013). []
  47. 17 U.S.C.A. § 506(a) (West 2013). []
  48. See, e.g., Sullivan v. Delisa, 101 Conn. App. 605, 619-20 (2007); Steward Software Co., LLC v. Kopcho, 275 P.3d 702, 706-07 (Colo. Ct. App. 2010), rev’d on other grounds, 266 P.3d 1085 (Colo. 2011). []
  49. See, e.g., Bucklew v. Hawkins, Ash, Baptie & Co., LLP., 329 F.3d 923, 931 (7th Cir. 2003) (“Copyright infringement . . . is an intentional tort.”); Gnossos Music v. Mitken, Inc., 653 F.2d 117, 120 (4th Cir. 1981); Illustro Sys. Int’l, LLC v. Int’l Bus. Machines Corp., Case No. 06-cv-01969, 2007 WL 1321825 (N.D. Tex. May 4, 2007) (“[C]opyright infringement is an intentional tort.”); Buck v. Jewell-La Salle Realty Co., 283 U.S. 191, 198 (1931) (“Intention to infringe is not essential under the act.”); United States v. Bily, 406 F.Supp. 726, 733 (E.D. Pa. 1975) (“Under the civil law, there is strict liability for infringement.”); Shapiro, Bernstein & Co. v. H. L. Green Co., 316 F.2d 304, 308 (2d Cir. 1963) (“While there have been some complaints concerning the harshness of the principle of strict liability in copyright law, . . . courts have consistently refused to honor the defense of absence of knowledge or intention.”). []
  50. See 17 U.S.C. § 504(c). []
  51. See, e.g., United States v. Wise, 550 F.2d 1180, 1194 (9th Cir. 1977); Bily, 406 F.Supp. at 733 (“One cannot be convicted [of criminal infringement] unless he has willfully infringed.”); United States v. Moran, 757 F.Supp. 1046, 1049 (D. Neb. 1991) (“[U]nder 17 U.S.C. § 506(a) ‘willfully’ means that in order to be criminal the infringement must have been a voluntary, intentional violation of a known legal duty.”) (internal quotations omitted). []
  52. 17 U.S.C.A. § 506(a)(1) (West 2013). []
  53. Model Penal Code § 223.2. []
  54. See, e.g., Moran, 757 F.Supp. at 1050 (collecting cases). []
  55. M.C. Multi-Family Dev., LLC. v. Crestdale Associates, Ltd., 124 Nev. 901, 911 (2008) (internal quotations and citations omitted). []
  56. G.S. Rasmussen & Assoc., Inc. v. Kalitta Flying Service, Inc., 958 F.2d 896, 903 (9th Cir. 1992). []
  57. Grokster, 545 U.S. at 961 (Breyer, J., concurring). []

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Cross-posted on the Law Theories blog.

As a follow-up to my last post about why copyright is a right and fair use is a privilege, I wanted to respond to some of the issues brought up by people on the ‘net about what I had written. Let me start by saying that I understand that, normatively, some are upset by the very notion that copyright is a full-fledged right while fair use is relegated to being merely a privilege. A right sounds so much more important than a privilege, and it makes fair use sound like some second-class citizen to call it the latter. I think some people dismissed my post completely just based on its title—the reasoning didn’t matter since the conclusions weren’t what those people wanted to hear. I think such closed-mindedness is unfortunate and counterproductive, and if we don’t stop to understand what others are saying—even when we don’t like it—we’re doomed forever to talk past each other.

One person brushed off my post as arguing semantics and meaningless labels, but I think that the feedback I got from both sides of the debate shows that labels matter significantly to people. Besides, why would a person bother to reach out and say that my labels are unimportant unless that person thinks that labels are actually important? Labels matter. For example, I don’t think that Mike Masnick refers to copyright as a “monopoly privilege” because he thinks labels don’t matter. I think he specifically chooses both of those words because of the negative connotations associated with each. There’s nothing wrong with caring about labels, of course, though I do fault those such as Masnick who appear to do so opportunistically and only for rhetorical effect. When discussing legal terms of art, I prefer precision over perception. I don’t get the sense that Masnick feels the same way.

This passage from Professor Tom Bell exemplifies such thinking:

Nonetheless, for right or wrong, copyright represents an exception to the general rule that we can freely speak the truth. It thus won’t do to call copyright simply a “property right.” We should at least append the qualifying phrase, “and an anti-property right,” because copyright’s power comes at the expense of our rights in our pens, presses, and throats. Should we also call copyright an anti-person right? It endures only at cost to our liberties, after all. At any rate, copyright hardly deserves the honorable title, “property”; we would do far better to call it “privilege.”1

Deciding whether something is a privilege based on our own subjective view as to whether the thing is “honorable” strikes me as an imprecise and inconsistent way to classify things. What makes more sense is a system that objectively classifies things, such as Hohfeld’s fundamental jural relations. Those who claim that copyright is a privilege and fair use is a right seem to be basing that view on nothing more than their gut feeling about the relative importance of each. The normative view that fair use shouldn’t be called a privilege because it’s just too important, I think, is based on the erroneous supposition that privileges are somehow less important than rights. Legally speaking, that’s not necessarily the case. This is demonstrated by the fact that a fair user’s privilege trumps a copyright owner’s right.

In fact, many of the “rights” that we hold most dear, guaranteed by the Bill of Rights, are not even rights in the Hohfeldian sense. The “Bill of Rights” should more accurately be called the “Bill of Privileges and Immunities.”2 Some faulted me for not mentioning the First Amendment in my post, but the fact that fair use is imbued with constitutional significance doesn’t change the fact that it’s a privilege. Moreover, I think that people are under the common misperception that the First Amendment creates Hohfeldian rights. It doesn’t. The First Amendment tells Congress that it can’t make any laws abridging the freedom of speech. In Hohfeldian terms, this creates in the government a disability and in us an immunity from laws that abridge our freedom of speech.3

One person expressed concern over the last sentence of my post where I said: “A rightholder, or anyone else for that matter, can make the exercise of a would-be fair user’s privilege as easy or as difficult as he likes—even impossible if he so wishes.” I think the point is rather obvious, but I’ll give an example. If I write a novel on my typewriter, I can take that manuscript and lock it up in my safe. Another has the privilege of making fair use of my novel, even if that privilege is somewhat diminished as the novel in unpublished, but that privilege doesn’t arm the privilege-holder with any sort of legally enforceable claim against me that I make the novel available to him so he can exercise his privilege. I can lock it up forever or loan it to everyone else in the world but him without any liability since I am under no duty of noninterference with respect to the would-be fair user.

This is not to say that the constitutional underpinnings of fair use are unimportant. They are. The immunities granted to us by the First Amendment have significant repercussions when it comes to the privileges we have, such as fair use, vis-à-vis the rights granted to copyright owners. As unnatural as it may seem to the uninitiated, an immunity, or even a privilege for that matter, can be a much more powerful weapon than a right. Great rewards await those who can get past the labels to examine the substances beneath, and to that end, in this post I’ll explain how the First Amendment implications of fair use operate doctrinally.

Ad Hoc Balancing vs. Definitional Balancing

The interaction of copyright law and the First Amendment is a favorite subject of mine, and I’d like to take a step back and discuss the Supreme Court’s current approach to the subject. It’s helpful to start with how First Amendment challenges to speech restrictions work generally. The First Amendment provides that “Congress shall make no law . . . abridging the freedom of speech . . . .” Surely that means that all speech is protected, right? The answer, it turns out, is that not all speech is treated the same way, and, despite the minority view held by some absolutists, the First Amendment does not protect all speech. The tricky part is figuring out whether a particular instance of speech is protected or not.

Take, for example, the Sherman Act, which makes illegal agreements in restraint of trade.4 How should a court proceed if a defendant claims that the agreement he made with his codefendant is speech protected by the First Amendment, even if it’s in restraint of trade? The answer, as is so often the case in the law, is that the competing interests have to be balanced; the nonspeech interests have to be weighed against the speech interests. But where to do this balancing? The Supreme Court has identified certain types of speech that require a court to do a balancing of interests based on the particular facts of the case before the court. For other types of speech, the Court has found that no such balancing is necessary since the weighing of interests has already been done when the statute making that speech unlawful was promulgated. The former approach is referred to as ad hoc balancing, while the latter approach is referred to as categorical or definitional balancing.

Staying with the context of antitrust law, take the example of FTC v. SCTLA.5 There, a group of lawyers who represented indigent criminal defendants in Washington, D.C., agreed that they would not accept any new cases unless and until their fees were increased. The lawyers got their fee increase, but the FTC filed a complaint against them alleging that their group boycott was in violation of the antitrust laws. The lawyers argued that their concerted action was expression protected by the First Amendment. The Court of Appeals for the District of Columbia Circuit agreed, finding that such boycotts were significantly expressive such that an ad hoc balancing of the competing interests presented in the particular case was necessary. The Supreme Court reversed, ruling instead that such boycotts were categorically unlawful:

In sum, there is thus nothing unique about the “expressive component” of respondents’ boycott. A rule that requires courts to apply the antitrust laws “prudently and with sensitivity” whenever an economic boycott has an “expressive component” would create a gaping hole in the fabric of those laws. Respondents’ boycott thus has no special characteristics meriting an exemption from the per se rules of antitrust law.6

Thus, the Supreme Court found that the antitrust laws at issue were balanced against countervailing First Amendment values at the definitional level, and this in turn meant that there was no need to do an ad hoc balancing of the competing interests, taking into account the particular defendants’ interests, as the Court of Appeals had done.

When analyzing a content-based restriction, which limits speech because of the idea or viewpoint conveyed, the Supreme Court has developed a two-tiered approach, separating low-value speech from high-value speech. A court first has to determine if the speech in question occupies a subordinate position in the spectrum of First Amendment values such that it is classified as low-value speech. If so, then that speech receives little or no First Amendment protection. As the Court famously noted over seventy years ago:

There are certain well-defined and narrowly limited classes of speech, the prevention and punishment of which have never been thought to raise any Constitutional problem. These include the lewd and obscene, the profane, the libelous, and the insulting or “fighting” words—those which by their very utterance inflict injury or tend to incite an immediate breach of the peace. It has been well observed that such utterances are no essential part of any exposition of ideas, and are of such slight social value as a step to truth that any benefit that may be derived from them is clearly outweighed by the social interest in order and morality.7

Over the years, the Court has added many other types of speech that are classified as low-value, such as express incitement, false statements of fact, commercial advertising, and child pornography. With low-value speech, the Court’s approach is that of definitional balancing where the weighing of competing interests is done at the rulemaking level. Rather than do an ad hoc balancing of a particular defendant’s free speech interests, the Court instead looks at the class of speech at issue as a whole to determine whether it is protected by the First Amendment or not. Take, for example, obscenity, where the Court has established a three-part test for determining whether speech is obscene.8 So long as a law regulating obscenity tracks the Court’s test, a First Amendment challenge of that law will necessarily fail—the First Amendment values have already been balanced by the Court at the definitional level.

The advantage of this definitional balancing is that courts down the road need only to apply the rule without doing any sort of ad hoc balancing based on the facts peculiar to the particular defendant before the court. It’s much easier to apply a general test than it is to consider the free speech interests of any given defendant. If the speech at issue does not fall into any of the classes of low-value speech, then it is high-value speech that receives significant First Amendment protection via an ad hoc balancing of the competing interests. A content-based restriction of high-value speech is analyzed under the rubric of strict scrutiny: The law at issue will be presumed unconstitutional, and it will only be upheld if it is “necessary to serve a compelling state interest and is narrowly drawn to achieve that end.”9

The Supreme Court has also created a framework for analyzing a content-neutral restriction, which regulates speech without reference to its content. The primary example of a content-neutral regulation is a time, place, or manner restriction. For example, a law that regulates the maximum volume of amplified music permissible at a city-owned band shell is content-neutral since, though it regulates speech, it does so without regard to the ideas or viewpoints being expressed. A content-neutral regulation is analyzed under the rubric of intermediate scrutiny: For the law at issue to be upheld, it “must be narrowly tailored to serve the government’s legitimate, content-neutral interests,” though “it need not be the least restrictive or least intrusive means of doing so.”10 This too is an ad hoc balancing of competing interests.

Thus, the Supreme Court’s approach to analyzing the constitutionality of a law that affects speech begins with classifying the law as being either content-neutral or content-based. If it’s content-neutral, then the ad hoc balancing of intermediate scrutiny is applied to it to determine whether the speech is protected by the First Amendment or not. If the speech interests outweigh the nonspeech interests, then it’s protected, and if the nonspeech interests outweigh the speech interests, then it’s not. If the law in question is content-based, the determination has to first be made as to whether the speech is classified as low-value speech or high-value speech. If it’s low-value speech, then the balancing has already been done definitionally at the rulemaking level, and if it’s high-value speech, then the ad hoc balancing of strict scrutiny is applied. I’m greatly simplifying things here, but these are the broad strokes.

Nimmer and the Definitional Balancing of Copyright

So how does copyright law fit into this framework? Professor Melville Nimmer published a seminal journal article in 1970 asking just that question.11 The answer, in Nimmer’s opinion, lay in definitional balancing. Professor Neil Netanel, whose recent law review article I recommended in last week’s Friday’s Endnotes on Copyhype, explains Nimmer’s definitional balancing approach:

Nimmer argued that the tension between copyright and the First Amendment can be satisfactorily resolved, even if it cannot be eliminated. His proffered solution was a method for balancing speech and non-speech interests that he labeled “definitional balancing.” *** As Nimmer described that methodological approach, a court considering whether a given law unconstitutionally abridges speech weighs the non-speech interests that the law aims to serve against the speech interests that the law burdens. Based on that assessment, the court then propounds generally applicable rules governing which types of speech may give rise to liability under the law in question and which must enjoy a First Amendment privilege.12

Nimmer had published a law review article about definitional balancing in 1968,13 focusing on the then-recent Supreme Court opinion in New York Times v. Sullivan where the Court applied definitional balancing to defamation law.14 While we may take the idea of definitional balancing for granted now, at the time Nimmer was writing his articles it was a relatively novel approach to First Amendment jurisprudence. Nimmer’s view that definitional balancing could be applied to copyright law was certainly ahead of its time. Nimmer located the definitional balancing internally to copyright law within the idea/expression dichotomy, the fair use doctrine, and the constitutional fiat that the copyright term be for a limited time. In Nimmer’s view, there was no need to do an ad hoc balancing when analyzing a First Amendment challenge to a copyright law because these internal doctrines already balanced First Amendment values at the definitional level.

Nimmer’s definitional balancing approach to copyright was first adopted by the Supreme Court in its 1985 opinion in Harper & Row.15 The issue there was whether the defendant’s use of a few hundred words from an unpublished manuscript of President Ford’s memoirs was fair use. In the Court’s opinion, the Second Circuit below had correctly noted “that copyright’s idea/expression dichotomy strikes a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an author’s expression. No author may copyright his ideas or the facts he narrates.”16 The Court rejected the defendant’s argument that since the purported fair use involved a matter of great public concern, the traditional fair use test was inappropriate to balance the competing interests:

In view of the First Amendment protections already embodied in the Copyright Act’s distinction between copyrightable expression and uncopyrightable facts and ideas, and the latitude for scholarship and comment traditionally afforded by fair use, we see no warrant for expanding the doctrine of fair use to create what amounts to a public figure exception to copyright. Whether verbatim copying from a public figure’s manuscript in a given case is or is not fair must be judged according to the traditional equities of fair use.17

Thus, the Supreme Court declined the invitation to apply an ad hoc balancing to the facts of the case at hand, instead finding that the Copyright Act and the First Amendment were balanced at the definitional level through the idea/expression dichotomy and the fair use doctrine. The Court thus imbued these two doctrines with constitutional significance, and it created a dividing line between speech that is protected by the First Amendment and speech that is not. Speech that is fair use or that appropriates only facts is protected by the First Amendment, while speech that appropriates expression but which is not fair use is not.

But the Court’s adoption of definitional balancing in Harper & Row did not stop many commentators from felling many trees while suggesting that ad hoc balancing was the better approach to weighing free speech interests against those sought to be promoted by copyright. For example, Professors Mark Lemley and Eugene Volokh argued that copyright is “a form of content-based, government-imposed speech restriction. The mere fact that the restriction is denominated a ‘property right’ should not exempt it from conventional First Amendment scrutiny.”18 Since in their view copyright is a content-based restriction, that scrutiny to be applied would therefore be strict. Similarly, Professor Neil Netanel has argued that “under the category approach that has developed since the Nimmer article was published, copyright law constitutes content-neutral speech regulation that should be subject to heightened, but not strict, scrutiny.”19 Netanel would place copyright “within a subcategory of content-neutral speech restriction that courts have subjected to considerably more rigorous scrutiny.”20

The Supreme Court has declined to follow the suggestion made by commentators that ad hoc balancing is the proper way to approach First Amendment challenges to copyright laws, and it has instead continued down the path of definitional balancing first adopted in Harper & Row. The two most recent opinions where the Court has discussed this are Eldred v. Ashcroft in 2003 and Golan v. Holder in 2012.21 I wrote about the First Amendment implications of these two opinions in a prior post.

In Eldred v. Ashcroft, the Court analyzed a First Amendment challenge of the Copyright Term Extension Act (“CTEA”), which extended by 20 years the copyright terms of future and existing works. The petitioners had argued that the CTEA was a content-neutral regulation warranting the ad hoc balancing of intermediate scrutiny. The Supreme Court disagreed: “We reject petitioners’ plea for imposition of uncommonly strict scrutiny on a copyright scheme that incorporates its own speech-protective purposes and safeguards.”22 The Court reiterated its statement from Harper & Row that the “idea/expression dichotomy strikes a definitional balance between the First Amendment and the Copyright Act,” and it again cited the fair use doctrine as providing “considerable latitude for scholarship and comment.”23 In summation, the Court wholeheartedly adopted Nimmer’s definitional balancing:

The First Amendment securely protects the freedom to make—or decline to make—one’s own speech; it bears less heavily when speakers assert the right to make other people’s speeches. To the extent such assertions raise First Amendment concerns, copyright’s built-in free speech safeguards are generally adequate to address them. We recognize that the D. C. Circuit spoke too broadly when it declared copyrights “categorically immune from challenges under the First Amendment.” But when, as in this case, Congress has not altered the traditional contours of copyright protection, further First Amendment scrutiny is unnecessary.24

I, and others, have dubbed this the “traditional contours” test. The Court is saying that so long as a copyright statute does not disturb the traditional contours, i.e., the idea/expression dichotomy and the fair use doctrine, then that statute will not be subjected to any sort of ad hoc balancing through the mechanism of heightened First Amendment scrutiny. Instead, the statute is already balanced at the definitional level via the internal safeguards of the traditional contours. Despite being a straightforward statement of the law, the traditional contours test was wildly misconstrued in the commentary, and a flurry of scholarly writing came out wondering what was within the traditional contours and what was without. The view was that if something could be identified as being outside of the traditional contours, then that would trigger heightened scrutiny and its concomitant ad hoc balancing.

Such thinking led to a First Amendment challenge to Section 514 of the Uruguay Round Agreements Act in Golan v. Holder. Section 514 granted copyright protection to foreign works that had previously been in the public domain in the United States. Petitioners argued that pulling works out of the public domain transgressed the traditional contours and thus required the application of heightened scrutiny to Section 514. The Supreme Court rejected the argument:

Given the “speech-protective purposes and safeguards” embraced by copyright law, we concluded in Eldred that there was no call for the heightened review petitioners sought in that case. We reach the same conclusion here. Section 514 leaves undisturbed the “idea/expression” distinction and the “fair use” defense.25

The Court made clear in Golan what it thought it had made clear in Eldred, namely, that the traditional contours only include the idea/expression dichotomy and the fair use doctrine. And since these traditional contours balance the First Amendment with the Copyright Act at the definitional level, no ad hoc balancing through the application of heightened scrutiny is necessary. Thus, the Court’s current approach to a First Amendment challenge to a copyright law is to look at whether the law in question has altered the traditional contours of the idea/expression dichotomy and the fair use doctrine. If not, then the law passes constitutional muster without the need to do any ad hoc balancing, and if so, then ad hoc balancing is to be applied.

Netanel and the DMCA Anticircumvention Provisions

Not surprisingly, since the Court reiterated its statement of the traditional contours test in Golan, commentators have started constructing their arguments to work within that framework. One example is in the recent law review article by Professor Neil Netanel that I mentioned above. In the article, Netanel’s reading of the traditional contours test comports with my own:

Golan strongly suggests that it is by virtue of the idea/expression dichotomy and fair use privilege that copyright law not only is immune from First Amendment scrutiny but also comports with First Amendment requirements. Following Golan, Congress may apparently extend and expand copyright law as it wishes, without giving rise to First Amendment scrutiny, so long as it leaves the idea/expression dichotomy and fair use defense “undisturbed.” But if a Copyright Act amendment were to eliminate, eviscerate, or otherwise disturb the idea/expression dichotomy or fair use defense, the amendment should be stricken down as failing to pass First Amendment muster . . . .26

Netanel qualifies this last statement by noting that such a statute, which alters the traditional contours, wouldn’t necessarily be struck down since “Congress might enact some alternative provision that adequately accommodates constitutional protections of free speech” in the same way the traditional contours do.27 But under the traditional contours test, a statute that alters the idea/expression dichotomy or the fair use doctrine would certainly be subjected to ad hoc balancing under the imposition of heightened First Amendment scrutiny.

Netanel identifies the DMCA anticircumvention provisions as altering the traditional contours since courts have interpreted them to “make no exception for circumventing access controls or hybrid technological-protection measures when needed to engage in fair use.”28 Instead, Netanel notes, courts read the DMCA “to preserve fair use only as a defense to a claim for traditional copyright infringement.”29 As an example of this, Netanel cites the Second Circuit opinion in Universal v. Corley where the court of appeals held that there is no fair use defense to a DMCA violation.30 The Second Circuit there had also stated that fair use is not required by the First Amendment, and Netanel faults the court of appeals for this: “After Golan and Eldred, that statement is no longer good law. As those rulings make clear, the availability of the fair use defense is a necessary condition for copyright law to survive a First Amendment challenge.”31

Netanel is overstating the traditional contours test. The test merely states that the existence of the traditional contours is sufficient to avoid the need for ad hoc balancing. If either of the traditional contours is altered, then a court is to engage in ad hoc balancing via the application of heightened scrutiny. But the traditional contours test does not say, as Netanel suggests, that the existence of both traditional contours is necessary to survive this ad hoc balancing. A statute could alter fair use yet still survive the subsequent application of heightened scrutiny. Thus, Netanel’s suggestion that “the availability of the fair use defense is a necessary condition for copyright law to survive a First Amendment challenge” is mistaken.

Netanel also takes issue with the Second Circuit’s statement in Corley that fair use “has never been held to be a guarantee of access to copyrighted material in order to copy it by the fair user’s preferred technique or in the format of the original.”32 “This argument raises a fascinating question,” Netanel posits, that even if “fair use secures a given speaker’s right to copy copyrighted material for a particular use, does that necessarily mean that the speaker is entitled to make a direct digital copy?”33 After stating that the case law offers no satisfactory answer, Netanel claims that “in light of Golan and other cases, the more plausible argument is that there must be a fair use defense to the DMCA anticircumvention prohibition, lest the DMCA run afoul of the First Amendment.”34

In support of this conclusion, Netanel cites a report from the Register of Copyrights which argues that effective fair use may not be possible without perfect digital copies. Moreover, Netanel cites a line of cases where it was held that foreclosing a particular medium of expression burdens free expression and gives rise to heightened First Amendment scrutiny. To this, Netanel argues that anything restrictive of a person’s use of a given technology for the communication of protected speech can give rise to heightened scrutiny as well. Netanel concludes that “the DMCA’s prohibition of the use of circumvention technology needed to engage in effective, constitutionally protected fair use would seem to run afoul of the First Amendment. . . . Under Golan’s definitional balancing approach, fair use copying should enjoy an absolute privilege against liability under the DMCA.”35

I think Netanel’s arguments miss the mark. First of all, the fair use defense codified in Section 107 by its terms applies only to prima facie violations of the rights granted to copyright owners in Section 106: “Notwithstanding the provisions of sections 106 . . . the fair use of a copyrighted work . . . is not an infringement of copyright.”36 The reason courts don’t apply fair use to infringements of other rights, such as the anticircumvention rights granted by the DMCA, is because the violation of those rights is not copyright infringement. Despite fair use not being a defense to a DMCA violation, Netanel is trying to make it one by cleverly sneaking it in the back door. He does this by playing the First Amendment trump card and claiming that the DMCA anticircumvention provisions have altered the traditional contours such that ad hoc balancing is necessary under the test articulated in Eldred and Golan.

The problem with this line of reasoning, I think, is that the DMCA has done no such thing. The traditional contours have not been affected, and fair use is still a perfect defense to a claim of copyright infringement. Part of the problem with Netanel’s approach is that he’s treating fair use as right, as demonstrated by his framing the question he’s trying to answer by presupposing that “fair use secures a given speaker’s right to copy copyrighted material for a particular use.” It does no such thing. As I mentioned at the outset of this post, just because fair use has a constitutional dimension, that doesn’t mean that it’s magically transformed from a privilege into a right in the Hohfeldian sense. It’s still a privilege that negates the duty one would otherwise have not to copy, and it creates in the copyright owner the correlative no-right, that is, the lack of a legally enforceable claim against another should he so copy.

Just because our exercise of the fair use privilege is protected by the First Amendment, that doesn’t mean we can violate the rights of others while making fair use of a given work. For example, think of my manuscript sitting in my locked safe. That the First Amendment protects another’s privilege to make fair use of it doesn’t negate his duty not to break into my safe. Fair use might relieve him of liability for my copyright claim should I sue him for copyright infringement, but it’s certainly not going to excuse him from liability for the tort and crime of breaking into my safe in the first place. The same can be said of the DMCA anticircumvention provisions. Fair use might absolve a person of liability for copyright infringement if he violates my anticircumvention rights and makes fair use of my work, but it’s not going to make his violation of the DMCA anticircumvention provisions disappear. The ends don’t erase the means.

Netanel is absolutely correct to argue that fair use is (or at least can be) speech protected by the First Amendment. The Supreme Court has made that clear in Harper & Row, Eldred, and Golan. I say “can be” because not all fair use is constitutionally protected speech. For example, the Supreme Court’s decision in Sony finding that certain time-shifting was fair use did not turn on application of the First Amendment.37 But just because fair use is speech protected by the First Amendment, it nonetheless remains only a privilege. And as a mere privilege, there is no duty of noninterference in others. A fair user has no legally enforceable claim against those that stand in his way as he attempts to make fair use of a given work. The First Amendment provides the fair user with only a shield, not a sword, and a fair user has but a privilege, not a right.

But this does not mean that a copyright law cannot be or should not be subjected to heightened First Amendment scrutiny, and the funny thing is, I actually agree with Netanel that ad hoc balancing should be applied to the DMCA anticircumvention provisions. I arrive at that conclusion by a different pathway. As I mentioned in my prior post about Eldred and Golan, I think that the Supreme Court has only applied the traditional contours test to statutes, such as the CTEA or Section 514 mentioned above, that define the scope of substantive copyright rights granted by Section 106. This makes sense because the traditional contours, i.e., the idea/expression dichotomy and the fair use doctrine, definitionally balance substantive copyright rights (such as the reproduction right) with countervailing First Amendment values. But when a statute doesn’t define the scope of the substantive copyrights rights—as the DMCA anticircumvention provisions do not—then it makes no sense to say that the statute is definitionally balanced by using reasoning that has been applied only to substantive copyright rights.

Thus, I think Netanel’s intuition that the DMCA anticircumvention provisions need to be subjected to ad hoc balancing is correct. This is so because the definitional balancing applied to substantive copyright rights, such as the reproduction right or the distribution right, tells us nothing about whether other rights, such as the anticircumvention rights, are balanced. Perhaps they are, or perhaps they are not. I also agree with Netanel that some flavor of intermediate scrutiny is appropriate since the DMCA anticircumvention provisions create only content-neutral restrictions. But there’s no need to frame the argument by saying that the DMCA anticircumvention provisions alter the traditional contours for the simple reason that the traditional contours test doesn’t apply to the rights created by the DMCA anticircumvention provisions since those rights are not substantive copyright rights. Like Netanel, I’ll pass for now on doing the actual analysis of whether the DMCA anticircumvention provisions pass the ad hoc balancing of heightened scrutiny, choosing instead to reflect on what the proper test should be for its own sake.

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Footnotes

  1. Tom W. Bell, Intellectual Privilege: A Libertarian View of Copyright 110-11 (2010). []
  2. See, e.g., Jay S. Bybee, Taking Liberties With the First Amendment: Congress, Section 5, and the Religious Freedom Restoration Act, 48 Vand. L. Rev. 1539, 1552 (1995) (“[W]e should observe that the Bill of Rights is not a bill of rights in any Hohfeldian sense, in any sense that people have claims enforceable against the government. Amendments Two through Eight are written as privileges and immunities, while the First Amendment is a disability.”); Scott R. Bauries, State Constitutions and Individual Rights: Conceptual Convergence in School Finance Litigation, 18 Geo. Mason L. Rev. 301, 316 (2011) (“Nearly all of the rules we cling to as ‘rights’ against legislation under the U.S. Constitution are really immunities, and many of the ‘negative duties’ we recognize are actually disabilities, because the legal relationships set up in the U.S. Constitution are overwhelmingly secondary rules.”). []
  3. See, e.g., Bybee, 48 Vand. L. Rev. at 1556 (“The First Amendment is a subject-matter disability . . . . [I]t puts a category of laws beyond the competence of Congress. The disability is so complete that Congress is expressly forbidden to enact . . . laws abridging . . . freedom of speech and press . . . . The First Amendment is a rule about rules.”); Restatement (First) of Property § 4 (1936) (“An immunity, as the word is used in this Restatement, is a freedom on the part of one person against having a given legal relation altered by a given act or omission to act on the part of another person.”). []
  4. See 15 U.S.C.S. § 1 (Lexis 2013) (“Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal.”). []
  5. FTC v. Superior Court Trial Lawyers Ass’n, 493 U.S. 411 (1990). []
  6. Id. at 431-32. []
  7. Chaplinsky v. New Hampshire, 315 U.S. 568, 571-72 (1942). []
  8. See Miller v. California, 413 U.S. 15, 24 (1973). []
  9. Arkansas Writers’ Project, Inc. v. Ragland, 481 U.S. 221, 231 (1987); see also United States v. Playboy Entm’t Group, 529 U.S. 803, 813 (2000) (“If a statute regulates speech based on its content, it must be narrowly tailored to promote a compelling Government interest. . . . If a less restrictive alternative would serve the Government’s purpose, the legislature must use that alternative.”). []
  10. Ward v. Rock Against Racism, 491 U.S. 781, 798-99 (1989). []
  11. See Melville B. Nimmer, Does Copyright Abridge the First Amendment Guarantees of Free Speech and Press?, 17 UCLA L. Rev. 1180 (1970). []
  12. Neil Weinstock Netanel, First Amendment Constraints on Copyright After Golan v. Holder, 60 UCLA L. Rev. 1082 ( 2013) [hereinafter “Netanel”]. []
  13. Melville B. Nimmer, The Right to Speak from Times to Time: First Amendment Theory Applied to Libel and Misapplied to Privacy, 56 Cal. L. Rev. 935 (1968). []
  14. See New York Times Co. v. Sullivan, 376 U.S. 254 (1964). []
  15. See Harper & Row, Publrs. v. Nation Enters., 471 U.S. 539 (1985). []
  16. Id. at 556 (internal quotations and brackets omitted). []
  17. Id at 560. []
  18. Mark A. Lemley and Eugene Volokh, Freedom of Speech and Injunctions in Intellectual Property Cases, 48 Duke L.J. 147, 206 (1998). []
  19. Neil Weinstock Netanel, Locating Copyright Within the First Amendment Skein, 54 Stan. L. Rev. 1, 54 (2001). []
  20. Id. at 55. []
  21. See Eldred v. Ashcroft, 537 U.S. 186 (2003); Golan v. Holder, 132 S.Ct. 873 (2012). []
  22. Id. at 218-19. []
  23. Id. at 219-20 (internal quotations omitted). []
  24. Id. at 221 (internal citations omitted). []
  25. Golan, 132 S.Ct. at 890-91 (internal citations omitted). []
  26. Netanel, 60 UCLA L. Rev. at 1102. []
  27. Id. []
  28. Id. at 1114. []
  29. Id. at 1115. []
  30. See Universal City Studios v. Corley, 273 F.3d 429 (2d Cir. 2001). []
  31. Netanel, 60 UCLA L. Rev. at 1115. []
  32. Corley, 273 F.3d at 459. []
  33. Netanel, 60 UCLA L. Rev. at 1116. []
  34. Id. []
  35. Id. at 1118. []
  36. 17 U.S.C.S. § 107 (Lexis 2013); I leave aside the application of Section 107 to Section 106A. []
  37. See Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 (1984). []

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Terry Hart is on vacation, so I have the great pleasure of presenting this week’s Endnotes.

First Amendment Constraints on Copyright After Golan v. Holder – Professor Neil Netanel has a fascinating look at the intersection of copyright law and the First Amendment in the wake of the Supreme Court’s opinion in Golan v. Holder. Back in 2001, Netanel argued that First Amendment challenges to copyright laws should be analyzed under the content-neutral rubric of intermediate scrutiny. The Supreme Court twice since then has rejected that approach, instead adopting Melville Nimmer’s view that copyright law internally balances First Amendment values. Working within that framework, Netanel now launches a new challenge of the DMCA anti-circumvention provisions and the now-defunct SOPA provisions for intermediary liability. Even if you disagree with Netanel’s conclusions (as I do), it’s a well-argued and thought-provoking article that I think is a must-read for all copyright geeks.

Copyright: The Inverted Human Period – Reflecting on the recent copyright revision hearings, Faza at the Cynical Musician looks into why copyright is important for the entire nation and not just for individual rightholders. Faza starts with the copyright granted to a songwriter and then traces the value stemming therefrom: “What we get in the end is an inverted human pyramid: a vast, tree-like structure of innumerable jobs being created, all resting on the back of our original songwriter and her songs. Take her away and the whole edifice collapses. *** It should be clear that even those who are most vocal against copyrights – tech companies who’d like to be in the content distribution biz without the content acquisition costs and their supporters – would lose out big time if the content were taken away. So whence the blindness?” Kudos to Faza who regularly turns out thoughtful and insightful pieces such as this.

Appeals Court Denies Jack Kirby Estate’s Bid to Overturn Marvel Copyright Ruling – Eriq Gardner at Hollywood, Esq. brings us the latest news in the copyright battle between the heirs of legendary comic book artist Jack Kirby and comic book publisher Marvel Comics. The Second Circuit affirmed in part the district court’s rejection of the heirs’ attempt to terminate under Section 304 certain copyright assignments made by their father. The termination rights turned on whether the works at issue were “works made for hire,” and the opinion is an interesting one as it shows the difficulty courts face in making that determination when the facts cut both ways. Ultimately, the court of appeals held that, even though Kirby was a freelancer with much independence, he nevertheless worked so closely and continuously with Marvel that the latter was the copyright owner ab initio under the work-for-hire doctrine.

Are Implied Licenses Enforceable? – At Forbes, Oliver Herzfeld looks at a district court opinion analyzing the enforceability of implied licenses. The dispute in that case turned on the fact-specific inquiry as to whether a sports arena had been granted an implied license to use a photographer’s photos on its Facebook page. Based on the lessons derived from the opinion, Herzfeld warns that “licensors would be well advised to (i) avoid engaging in casual communications or conduct that may imply a consent to actions or omissions on the part of licensees that exceed or contradict the terms of the parties’ license agreements, (ii) maintain a disciplined license agreement amendment process to document and memorialize all license agreement changes in signed writings, and (iii) include provisions in all license agreements reserving all rights not expressly granted to the licensees therein and explicitly disclaiming that any course of conduct on the licensor’s part will constitute a consent to, or waiver of, any term or provision of the license agreements.”

Comcast Developing Anti-Piracy Alternative to ‘Six Strikes’ (Exclusive) – Andrew Wallenstein at Variety has the news that Comcast is working on a plan to convert illicit file-swappers into paying customers. The system would work in real-time by presenting an infringer with a pop-up providing links to legal sources for the material being infringed. Wallenstein posits that this “reflects an alternate philosophy regarding copyright infringement, one that sees the illegal activity less as a crime that requires punishment and more as lead generation to a consumer whose behavior is borne out of inadequate legitimate digital content options.”

Academic Senate approves open access policy – The University of California has announced that future research articles by its faculty will be made available to the public at no cost: “The policy covers more than 8,000 UC faculty at all 10 campuses of the University of California, and as many as 40,000 publications a year. It follows more than 175 other universities who have adopted similar so-called ‘green’ open access policies. By granting a license to the University of California prior to any contractual arrangement with publishers, faculty members can now make their research widely and publicly available, re-use it for various purposes, or modify it for future research publications.”

Charge of Copyright Infringement in PTO Prior Art Disclosure Suffers Another Blow – Tony Dutra at Bloomberg BNA discusses a setback for the publisher plaintiffs in one of their many ongoing lawsuits against patent law firms that copy technical journal articles as part of the prior art submission process at the USPTO. The magistrate judge, after finding that all four fair use factors weighed in the defendants’ favor, issued a report recommending that the district court side with the patent law firm defendants. In the magistrate judge’s opinion, the defendants’ “use of the Articles facilitates the complete disclosure required in the patent-application process, assisting patent examiners in determining whether applications for patent protection should be granted, and, consequently, fulfilling the very same purpose of promoting science and the arts that the Copyright Act was intended to accomplish.”

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Cross-posted on the Law Theories blog.

One often hears the argument from copyright opponents that copyright is a privilege and not a right. Rick Falkvinge says that copyright is a “government-granted market-distorting privilege” that limits the property rights of others. Stephan Kinsella argues that copyrights are “grants of monopoly privilege by the state” that allow its holder to petition the courts for redress. Mike Masnick claims that it’s “hogwash” not to recognize that copyright is a “monopoly privilege.” Crosbie Fitch believes that copyright grants authors “unethical privileges” over others.

Many claim as well that fair use is a right and not a privilege. Patricia Aufderheide and Peter Jaszi argue that Shepard Fairey had the “fair use right” to make his famous Obama poster. The late Professor L. Ray Patterson claimed that the “statutory right of fair use” is often ignored.1 Professor Lawrence Lessig laments that “[y]ou either pay a lawyer to defend your fair use rights or pay a lawyer to track down permissions so you don’t have to rely upon fair use rights.” The list goes on.

The baseline, so the argument goes, is that we have the right to do whatever we want with our property, including the right to make copies. Copyright changes this by giving authors the privilege to prevent us from copying. Thus, copyright takes away my right to copy by granting an author the privilege to stop me. Moreover, the argument continues, despite the privilege given to authors, we have the right to make fair use of a work. This line of reasoning, to borrow Masnick’s term, is “hogwash.”

In this post, I’ll explain why copyright opponents have it exactly backwards when they claim that copyright is a privilege and fair use is a right. At the outset, I note that these terms can have various, nontechnical meanings that possibly overlap. For example, Black’s Law Dictionary defines “right” to mean, inter alia, a “privilege,” and it defines “privilege” to mean, inter alia, a “right.”2 But copyright opponents are not using these terms interchangeably; they are using them in contradistinction to each other. In other words, they are saying that right and privilege are mutually exclusive terms. It’s this technical usage of these terms that I’ll address.

Bell’s “Intellectual Privilege”

Perhaps the biggest proponent of the copyright-as-privilege claim is Professor Tom Bell. In his book entitled Intellectual Privilege (draft available here), Bell makes the argument that “copyright more closely resembles a privilege—a special statutory benefit—than it does a right, general in nature and grounded in common law, deserving the title of ‘property.’”3 He claims that “calling copyright a ‘privilege’ follows legal and popular usage, past and present.”4 In support of this broad assertion, Bell cites the 6th edition of Black’s Law Dictionary in a footnote. He conspicuously doesn’t quote the actual text from Black’s in that footnote, perhaps because it in fact defines copyright as a “right.” Black’s provides:

Copyright. The right of literary property as recognized and sanctioned by positive law. An intangible, incorporeal right granted by statute to the author or originator of certain literary or artistic productions, whereby he is invested, for a specified period, with the sole and exclusive privilege of multiplying copies of the same and publishing and selling them.5

Black’s isn’t saying that copyright is a privilege in contrast to a right. Instead, the dictionary merely reflects the fact that, as discussed below, a rightholder has the privilege to exercise the right that he holds. What makes it a right is that he has a legally enforceable claim against another who copies without permission. As we’ll see, copyright owners, just like all rightholders, have both rights and privileges.

Bell notes that both courts and commentators “have often described copyright as a legal privilege.”6 In support, he cites Eldred v. Ashcroft where Justice Stevens in dissent refers to “copyright privileges,” Sony v. Universal where Justice Stevens writing for the majority refers to the “copyright privilege,” and Watson v. Buck where Justice Black writing for a unanimous Court refers to “copyright privileges.”7 No doubt there are many other such references in the case law and commentary. But are those references really making the point that copyright is a privilege and not a right? Not at all.

Justice Stevens in Eldred also refers to copyright as granting “exclusive rights” and “federal rights.”8 Similarly, in Sony, Justice Stevens frames the question presented as whether “the rights conferred upon respondents by the Copyright Act” have been violated, and then he goes on to discuss the “exclusive rights” granted by copyright at length.9 And in Watson, Justice Black refers to copyrights as “property rights.”10 Bell’s argument that these Justices considered copyrights to be privileges as opposed to rights is severely undercut by the fact that the very same Justices in the very same opinions also called them rights.

Bell argues that “copyright represents a statutory exception to our common law rights.”11 It is only with the introduction of copyright, he contends, that our “natural and common law rights” to copy are limited.12 Thus, according to Bell, the rule is that we may copy, and the exception is copyright. In this way, he continues, copyright is not a right, but rather it is “an anti-property right” that limits what we can do with our property.13 Bell’s theory is that this copyright exception gives to authors a privilege that relieves them of the duty they would otherwise have to allow others to copy their works.

Bell ponders whether his version of privilege comports with “Wesley Hohfeld’s influential one,”14 referencing the late Professor Hohfeld whose well-known law review article discussing the difference between rights and privileges has been extremely influential in legal thinking since its publication one century ago.15 Erroneously, Bell concludes that he is being “more true to Hohfeld’s project” than those who consider copyright to be a right.16 To understand how Bell is turning Hohfeld on his head and confusing the difference between a right and a privilege in the Hohfeldian sense, we have to take a step back and look at Hohfeld’s fundamental “jural relations.”

Hohfeld’s “Jural Relations”

Laymen typically use the word “property” to refer to a thing with respect to which legal relations between persons exist. Lawyers, on the other hand, generally use the word “property” to refer to the legal relations that exist between persons with respect to a thing. The aforementioned Professor Hohfeld developed an analytical framework for discussing these legal relations—or as he called them, “jural relations.” Hohfeld identified eight fundamental jural relations: right, privilege, power, immunity, duty, no-right, liability, and disability. With these building blocks, we can precisely define the legal relations that exist between persons with respect to a given thing.

Hohfeld’s system of jural relations has been very popular amongst jurists over the last century. For example, the savants at the American Law Institute adopted Hohfeld’s system in the Restatement (First) of Property, first published in 1936. A quick search on Westlaw shows that Hohfeld’s original 1913 paper and his follow-up 1917 paper together have been cited over a thousand times in the case law and commentary.17 For a great explanation of Hohfeld’s system of jural relations, I recommend this primer from the Chicago-Kent College of Law.

Hohfeld arranged the jural relations into different pairs, called “jural correlatives.” Each pair of jural correlatives looks at a given jural relation from opposing points of view. For example, if O and P have a jural relation between them, we can look at that jural relation either from O’s point of view or from P’s point of view. These jural correlatives arise together, meaning that the existence of one necessarily implies the existence of the other. Hohfeld’s jural correlatives for rights and privileges are: rightduty and privilegeno-right. Thus, as between O and P, if O has a right, then P has a duty, and if O has a privilege, then P has a no-right.

A right is “a legally enforceable claim of one person against another, that the other shall do a given act or shall not do a given act.”18 The person against whom the right exists has the correlative duty, which is the legally enforceable obligation on the part of the duty-holder to do or not to do the given act. For example, if O has the right to exclude P from entering his land, then P has the correlative duty not to enter O’s land. If P violates his duty and enters O’s land, O then has a legally enforceable claim against P, and O can summon the power of the state to prevent P from entering his land.

A privilege is “a legal freedom on the part of one person as against another to do a given act or a legal freedom not to do a given act.”19 The person against whom the privilege exists has the correlative no-right, which is the absence of a legally enforceable claim against the privilege-holder to do or not do the given act. For example, if O has the privilege to enter P’s land, then P has the no-right to exclude O from his land. If O exercises this privilege and enter P’s land, P then has no legally enforceable claim against O, and P cannot summon the power of the state to prevent O from entering his land.

It should also be noted that not only can a rightholder prevent another from doing or not doing a given act, but he himself has the privilege of doing or not doing the given act. Thus, a rightholder holds both a right and a privilege. For example, if O has the right to exclude P from entering his land, O then also has the privilege of entering his own land. As Hohfeld explains:

[I]f X has a right against Y that he shall stay off the former’s land, the correlative (and equivalent) is that Y is under a duty toward X to stay off the place. *** [W]hereas X has a right or claim that Y, the other man, should stay off the land, he himself has the privilege of entering on the land; or, in equivalent words, X does not have a duty to stay off.20

While the person against whom a right exists has a duty of noninterference with respect to the rightholder,21 the person against whom a privilege exists does not have such a duty with respect to the privilege-holder. Thus, if O grants to P the privilege of entering his land, O then has no duty of noninterference towards P, and O may interfere with P’s attempts to exercise his privilege of entering O’s land.

Hohfeld colorfully illustrates the point:

A. B. C. and D, being the owners of the salad, might say to X: “Eat the salad, if you can; you have our license to do so, but we don’t agree not to interfere with you.” In such a case the privileges exist, so that if X succeeds in eating the salad, he has violated no rights of any of the parties. But it is equally clear that if A had succeeded in holding so fast to the dish that X couldn’t eat the contents, no right of X would have been violated.22

And as one commentator explains:

If X’s privilege of entering the land, in relation to Y, consists only in X being under no duty to Y not to enter the land, this means solely that X is not in breach of a duty to Y if he enters the land; nothing is implied by this to prevent Y making it impossible to enter the land—by using threats or violence, by building walls, constructing moats filled with piranha fish . . . .23

The takeaway from this is that a right gives the rightholder a legally enforceable claim against another that he shall do or not do a given act, and the person against whom the right exists has the correlative duty to do or not do the given act. A privilege, on the other hand, negates a duty to do or not do a given act that the duty-holder would otherwise have, relieving him of the liability that he would have for doing or not doing the given act but for the privilege. While the person against whom the privilege exists has the correlative no-right, that is, the absence of a legally enforceable claim against the privilege-holder for doing or not doing the given act, there is no duty of noninterference with respect to the privilege-holder, and the no-right-holder may interfere with the privilege-holder’s attempts to exercise his privilege.

Why Copyright is a Right

Professor Bell cleverly frames things to arrive at his conclusion that copyright is a privilege and not a right. The baseline, as Bell correctly notes, is that in the absence of copyright everyone would be able to copy as they please, and it is only with the introduction of copyright that this baseline changes. Bell then erroneously claims that this ability to copy as one pleases in the absence of copyright is a right. Thus, according to Bell, in the absence of copyright, O has the right to copy P’s work, and P has the correlative duty to permit O to copy his work. Copyright changes this, Bell continues, by granting P a privilege which negates his duty to permit O to copy his work.

It’s simple to dispense with Bell’s claim that copyright is a privilege. It is true that, absent copyright, people can freely copy a given work. The fault in Bell’s argument is in equating this ability to copy freely in the absence of copyright with a right. If it were a right, then others would be under the correlative duty to permit the rightholder to copy a given work, and the rightholder would have a legally enforceable claim against those that breach this duty. But clearly no such duty exists. What cause of action would this supposed rightholder have against another who interferes with his attempt to copy a given work? No such cause of action exists since no one has a duty to permit another to copy a given work.

Nor does copyright grant a copyright owner a privilege. If copyright were merely a privilege, then that would relieve the copyright owner of the duty that he otherwise would have to permit another to copy his work—but again, there is no such duty to permit another to copy his work. Moreover, a privilege does not give its holder a legally enforceable claim against another who does or does not do a given act. Whence does Bell think a copyright owner’s claim against another who copies his work arises if the owner has merely a privilege? Without a right to exclude another from copying his work, there is no legally enforceable claim against another who so copies. And if a copyright owner is merely a privilege-holder, whence does Bell think the duty arises in another not to copy the copyright owner’s work? Without a right, there is no such correlative duty. Yet clearly such a duty does exist.

Two examples demonstrate the point. Take, for instance, Professor Hohfeld’s journal article from 1913 that I linked to on the University of Texas (“UT”) server. Being a century old, Hohfeld’s article is in the public domain, and it is therefore not protected by copyright. According to Bell, being that there is no copyright protection for the article, O has the right to copy this article, and others, including UT, have the duty to refrain from interfering with O as he exercises his right. Thus, according to Bell, UT has the duty to permit O to copy the article. If UT were to password-protect access to the article, thereby interfering with O’s exercise of his right to copy it, O would have a legally enforceable claim against UT for breaching its duty of noninterference with respect to O’s right to copy the article. Obviously there is no such duty on UT’s part, and UT can grant access to the article to everyone in the world except for O if it so chooses without facing any liability.

Take another example, but this time with the work in question being under copyright. Say I write an original manuscript by hand on paper. By virtue of the work being fixed in a tangible medium, I am automatically granted a copyright in the work by the Copyright Act. Bell’s view is that this copyright has only granted me a privilege which relieves me of the duty I would otherwise have to respect another’s right to copy my work as he pleases. But what accounts for the fact that I have a legally enforceable claim against another who copies my work? And what accounts for the duty that another has to not copy my work? If copyright merely grants me a privilege, then there would be no such duty on the part of another to not copy my work, and I would have no legally enforceable claim against another that copies my work. Clearly copyright has given me something more than a mere privilege.

Thus, Professor Bell is mistaken to claim that his view of copyright-as-privilege is true to Professor Hohfeld’s explication of the fundamental jural relations. The proper way to view this is see that, as the Constitution and the Copyright Act acknowledge, copyrights are grants of exclusive rights.24 Copyrights are rights because they give the rightholder a legally enforceable claim against another who copies his work, and they create in another the correlative duty to not copy the copyright owner’s work.

Why Fair Use is a Privilege

Along these same lines, it’s clear that fair use is a privilege and not a right. If fair use were a right, then the fair user would have a legally enforceable claim against another that he should do or not do a given act. The other would then owe the fair user the correlative duty to do or not do the given act, and he would have a duty of noninterference with respect to the fair user. But fair users have no such claim and are owed no such duty. Fair use instead is merely a privilege. It permits the fair user to do an act—copying—that but for the privilege would give rise to liability. The privilege negates the duty the fair user would otherwise have with respect to the copyright owner, and the copyright owner has the correlative no-right, that is, the absence of a legally enforceable claim to hold the fair user liable for his copying. That fair use is a privilege accounts for the fact that it operates as an affirmative defense and not as an affirmative right.25

Thus, if O is the author of a work, O has certain exclusive rights in that work which give him a legally enforceable claim against P should P copy the work. P, in turn, owes O the correlative duty to not copy the work, and if P breaches this duty, he can then be held liable by O for the infringement. But not all copying by P infringes O’s exclusive rights. P has the privilege of making fair use of O’s work, and this privilege negates the duty to not copy O’s work that P would otherwise have. This privilege on P’s part creates the correlative no-right on O’s part which negates O’s legally enforceable claim against P. But for P’s privilege, O could hold P liable for the copying, but P’s fair use privilege arms P with a perfect defense to a claim of infringement.

As a mere privilege-holder, a fair user has no legally enforceable claim against another that he should do or not do a given act—only a rightholder has such a claim. Moreover, as a mere privilege-holder, a fair user is owed no duty of noninterference by another as he attempts to exercise his privilege. Thus, others may interfere with the would-be fair user’s attempts to make fair use of a given work. That it is not impermissible for the would-be fair user to make fair use of a given work is not the same as being guaranteed that he may do so. This is demonstrated in the passage from Hohfeld quoted above about the salad—I may grant you a license to eat my salad, which would absolve you of any liability should you do so, but your privilege to eat my salad does not come with any guarantees that I will make the salad available to you. “Not impermissible does not equate to guaranteed.”26

That a fair user has no legally enforceable claim, i.e., a right, to make fair use of a given work is demonstrated in the Second Circuit’s opinion in Universal v. Corley.27 There, the appellants argued that the DMCA anti-circumvention provisions interfered with their alleged constitutional right to make fair use of a DVD. The court of appeals rejected the argument: “We know of no authority for the proposition that fair use, as protected by the Copyright Act, much less the Constitution, guarantees copying by the optimum method or in the identical format of the original. . . . Fair use has never been held to be a guarantee of access to copyrighted material in order to copy it by the fair user’s preferred technique or in the format of the original.”28 I think the answer is much simpler than that. Since fair use is merely a privilege, the fair user is owed no duty of noninterference by others. A rightholder, or anyone else for that matter, can make the exercise of a would-be fair user’s privilege as easy or as difficult as he likes—even impossible if he so wishes.

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Footnotes

  1. L. Ray Patterson, Copyright in the New Millennium: Resolving Conflict between Property Rights and Political Rights, 62 Ohio St. L.J. 703, 704-05 (2001). []
  2. See Black’s Law Dictionary (9th ed. 2009). []
  3. Tom W. Bell, Intellectual Privilege: A Libertarian View of Copyright 108 (2010) [hereinafter “Bell”]. []
  4. Id. []
  5. Black’s Law Dictionary (6th ed. 1990) (emphasis added). []
  6. Bell at 110. []
  7. See Eldred v. Ashcroft, 537 U.S. 186, 233 (2003) (Stevens, J., dissenting); Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 421 (1984); Watson v. Buck, 313 U.S. 387, 404 (1941). []
  8. See Eldred, 537 U.S. at 223, 231-32, and 241 (Stevens, J., dissenting). []
  9. See Sony, 464 U.S. at 420, 433, 436, and 447. []
  10. See Watson, 313 U.S. at 404. []
  11. Bell at 110. []
  12. Id. []
  13. Id. at 110-11 (emphasis in original). []
  14. Id. []
  15. See Wesley Newcomb Hohfeld, Some Fundamental Legal Conceptions As Applied in Judicial Reasoning, 23 Yale L.J. 16 (1913) [hereinafter “Hohfeld”]. []
  16. Bell at 113. []
  17. See Hohfeld; Wesley Newcomb Hohfeld, Fundamental Legal Conceptions as Applied in Judicial Reasoning, 26 Yale L.J. 710 (1917). []
  18. Restatement (First) of Property § 1 (1936); see also Black’s Law Dictionary (9th ed. 2009) (A “right” is a “legally enforceable claim that another will do or will not do a given act; a recognized and protected interest the violation of which is a wrong.”). []
  19. Id. at § 2; see also Black’s Law Dictionary (9th ed. 2009) (“A privilege grants someone the legal freedom to do or not to do a given act. It immunizes conduct that, under ordinary circumstances, would subject the actor to liability.”). []
  20. Hohfeld at 32 (emphasis in original). []
  21. See, e.g., O’Brien v. Leidinger, 452 F.Supp. 720, 726 (E.D. Va. 1978) (“Whenever there exists a right in any person, there also exists a correlative duty in some other person or persons not to abridge or interfere with the exercise of that right.”). []
  22. Hohfeld at 35 []
  23. Andrew Halpin, Rights and Law: Analysis and Theory 35 (1997). []
  24. See, e.g., U.S. Const. art. I, § 8, cl. 8 (West 2013) (Congress has the power “[t]o promote the Progress of Science . . . by securing for limited Times to Authors . . . the exclusive Right to their . . . Writings . . . .”) (emphasis added); 17 U.S.C.A. § 106 (West 2013) (copyright grants “the owner of a copyright . . . the exclusive rights to do and to authorize” certain listed activities such as to make or to distribute copies) (emphasis added); (17 U.S.C.A. § 107 (West 2013) (fair use is one of the “[l]imitations on exclusive rights” of authors.) (emphasis added). []
  25. See, e.g., Harper & Row Publishers, Inc. v. Nation Enterprises, 471 U.S. 539, 561 (1985) (“The drafters resisted pressures from special interest groups to create presumptive categories of fair use, but structured the provision as an affirmative defense requiring a case-by-case analysis.”); H.R. Rep. 102-836, *3 (“Fair use is an affirmative defense, and as such is relevant only after a copyright owner has made out a prima facie case of infringement.”); Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 590 (1994) (“Since fair use is an affirmative defense, its proponent would have difficulty carrying the burden of demonstrating fair use without favorable evidence about relevant markets.”). []
  26. David R. Johnstone, Debunking Fair Use Rights and Copyduty Under U.S. Copyright Law, 52 J. Copyright Soc’y U.S.A. 345, 369-70 (2005) (internal quotations omitted). []
  27. Universal City Studios, Inc. v. Corley, 273 F.3d 429 (2d Cir. 2001). []
  28. Id. at 459. []

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