Although published in 2011, I’ve only recently finished reading Robert Merges’ Justifying Intellectual Property. The book provides an examination of the ethical foundations of intellectual property — primarily copyright and patent — and an explanation of how they fit into a fair and just society. Merges has made a significant contribution to the field of IP while also advancing a positive view of a legal doctrine that has been the subject of increasing skepticism over the past two decades.

It could be said that Justifying Intellectual Property is actually two books in one.

In the first section, Merges explains his theory of the philosophical foundation and justification of intellectual property. He jettisons the utilitarian basis of IP that tends to dominate copyright debates (particularly in the academic arena). Essentially, the utilitarian seeks to maximize net social welfare; IP policy is working if its benefits outweigh its costs. But for Merges, when it comes to IP, this type of calculus is so complex as to be, for all practical purposes, impossible — like, he says, trying to design “a perfect socialist economy.” How do you measure the “optimal number” of copyrighted works? And how do you quantify the quality of works?

Instead, Merges uses property as his starting point, but not some narrow, primitive conception of property that only includes those things we can see or touch. As Merges explains, property is an incredibly adaptable doctrine that has developed a vocabulary that is just as useful for intangibles as it is for tangibles. But most importantly for Merges, property is built around an important core principle, a one-to-one mapping of owner to asset that allows for decentralized ownership and coordination.

Merges obviously doesn’t declare copyright to be property and call it a day. He synthesizes the work of three influential philosophers — John Locke, Immanuel Kant, and John Rawls — to create his normative foundation of IP. As he summarizes near the end of the book:

Locke has a simple but convincing story about initial appropriation, the conditions under which property rights originally arise. Kant understands ownership to be crucial to the development of a person’s full potential, which involves both extensive interaction with objects in the environment and also persistent rights over those objects, so that the individual can place his unique stamp on them. And for Rawls, property fits into the overall scheme of a fair and just society, taking its place alongside other institutions and rights that guarantee an equal chance at self-fulfillment to all citizens.

Locke in particular has fallen somewhat out of favor among academics for the relevance of his labor theory of appropriation to intellectual property. Merges joins several other legal scholars in rehabilitating the Lockean foundations of copyright.1 A big part of this rehabilitation comes from focusing on Locke’s “provisos” — limitations or conditions on property appropriation and ownership. Merges writes that these “provisos” — “sufficiency”, “spoliation”, and “charity” — have not received enough attention by scholars, particularly the “charity” proviso. But these provisos, says Merges, are central to Lockean property theory. If properly applied, they strengthen the justification for intellectual property, especially in ways that are relevant to current policy debates.

In the remaining sections, Merges departs from the normative foundation he established to argue, essentially, that normative foundations are not the most important guiding principles of IP law. That honor instead goes to midlevel principles, the “basic concepts that tie together a number of discrete and detailed doctrines, rules, and practices in a particular legal field.” The primacy of midlevel principles over foundational, or “upper-level principles” is a concept that Merges attributes mostly to John Rawls and his conception of pluralism in a modern state. Merges explains

I believe in the independence of … foundational normative principles from the operational details of the field, as well as from the midlevel principles that arise from and are shaped by those details. By “independence” I mean that there are a number of foundational normative commitments that may serve equally well to anchor the principles and practices of IP law. I offered the ones I did… because those are the ones I believe best justify the structure of IP law. But other foundations might serve as well. As I put it earlier, in my view there is “room at the bottom,” at the foundational level of the field, for various justificatory principles, including perhaps utilitarianism and various alternative ethical theories.

Midlevel principles engage foundational values in a number of ways, but they do not depend on any particular set of values for their validity. They spring from doctrine and detail, from the grain of actual practice. It is at the level of midlevel principles, therefore, that much normative debate in the IP field takes place. From a certain point of view, in fact, this is their role exactly: they enable normative debate — debate above the detailed doctrinal level — without requiring deep agreement about ultimate normative commitments. Because of this, they are the common currency of most debate over IP policy.

Merges identifies four plausible candidates for midlevel principles in IP law, though there are obviously other potential candidates: nonremoval (from the public domain), proportionality, efficiency, and dignity. While all are explored throughout the book, Merges sets aside an entire chapter to discuss proportionality in detail. As he describes it, proportionality is in many ways a corollary to the justification for intellectual property. If we accept that the act of creation or invention entitles one to property rights, then it follows that one is not entitled to anything beyond what one creates or invents. That is, the rights should be proportionate to what a creator deserves.

From this discussion of midlevel principles, Merges turns to contemporary issues in IP policy to show how the principles might be applied in practice. These issues cover a wide spectrum: from corporate ownership of copyrighted works and transaction costs, to property in the digital era (which includes remixes, collaborative creation, and open source licenses), to patents and drugs for the developing world.

Merges concludes his work by reiterating what he considers the basic elements of a workable theory of IP. Intellectual property law should (1) “Propertize creative labor,” (2) “Grant real rights, but not absolute rights”, and (3) “Accommodate the needs of consumers and users by (a) facilitating and encouraging cheap and easy IP permission and licensing mechanisms, together with (b) simple waiver techniques that permit binding dedication of rights to the public.”

At times, I felt that I was not reading specifically about intellectual property, but about property in general. Copyright skeptics often make the mistake that certain aspects of copyright — that it should provide a public benefit, that there are times when competing interests override exclusive rights — distinguish it from other forms of property. Quite the opposite. All property shares these characteristics, and intellectual property, at least how Merges conceives of it, comes the closest to the Platonic ideal of property.

While Justifying Intellectual Property may not be an easy read, it is certainly an accessible read — put another way, it requires mental stamina rather than mental agility. One does not necessarily need a legal or philosophical background to get what’s going on. Merges does not assume much prior knowledge on the part of the reader; concepts are explained fully as they are introduced. This is, in my opinion, one of the strengths of the book. Weak arguments are not disguised behind academic jargon. Instead, the clarity of writing reveals the clarity of thinking.

The other great strength, in my opinion, is that Merges does not take any of his assertions for granted. He moves carefully from point to point to ensure that each conclusion he makes rests on a solid logical foundation. And he anticipates counterarguments, many of which are familiar to those who have followed copyright debates closely over the past decade. So, for example, Merges replies to arguments that IP is not susceptible to being property because it is “nonrivalrous”; or that it is not justified because it creates “artificial scarcity.” He discusses open source licenses and “remix culture”, fan sites and the democratization of publishing (and not, lest one think Merges is a caricature of a “copyright maximalist”, in a negative manner).

Justifying Intellectual Property is a landmark work that provides a solid theoretical foundation to “what may be called the metaphysics of the law.” It should be on the shelf of anyone with a deep interest in intellectual property doctrine and policy.

Footnotes

  1. Others include Adam Mossoff, Saving Locke from Marx: the Labor Theory of Value in Intellectual Property, 29 Social Philosophy and Policy 283 (2012); Justin Hughes, Locke’s 1694 Memorandum (and other Incomplete Historiographies) (2006). []

Laws of Creation: Property Rights in the World of Ideas

Are copyright protections anti-consumer and anti-innovation? And is copyright law currently broken?

No, say legal scholars Ronald A. Cass (Dean Emeritus, Boston University School of Law, and President, Cass & Associates, PC) and Keith N. Hylton (Honorable Paul J. Liacos Professor of Law at Boston University School of Law). And the steady drumbeat of opinions saying otherwise — especially from academia — led the two to offer a defense of intellectual property and its legal framework.

In their new book, Laws of Creation: Property Rights in the World of Ideas, Cass and Hylton provide an overview of the economic foundations of intellectual property. In doing so, they reject the “zero-sum” approach to IP law that has steadily gained acceptance by scholars — where any gain to rights holders is seen as a loss to downstream users and the public. The two instead look at intellectual property in the same way as any other property rights. Generally speaking, these rights “make society better off by increasing incentives to find or create property, to preserve and promote property, and to allocate its uses wisely.”

Their approach is explicitly utilitarian. So long as the dynamic benefits of intellectual property protection outweigh the static costs incurred, such protection is beneficial to society. Cass and Hylton conclude that current IP law succeeds in this regard.

The bulk of the book is a theoretical analysis of these static and dynamic effects of the four major areas of intellectual property law: patent, trade secrets, copyright, and trademark. Two chapters are devoted to examining issues at the intersection of intellectual property regimes and tensions between intellectual property law and antitrust law.

Cass and Hylton conclude with a discussion examing their motivations for writing the book, namely, the “need to regain a more balanced and reasonable perspective on the way our laws treat the world of ideas.” As noted above, the book challenges the “zero sum” view of IP that has increasingly found favor among academics. This has led to a skepticism about IP rights. One need only spend a few minutes online to realize that this skepticism has spilled out of the academy and permeates many discussions of technology and media issues. The authors speculate about some of the possible causes for this view gaining ground in recent decades, but ultimately their book is most useful to counter the erroneous zero sum approach.

Critics might point out that the book has little to say that is negative of intellectual property rights. Surely the authors are looking through rose colored glasses! But Cass and Hylton are careful to point out that their discussion does not imply that each aspect of IP law is unimpeachable. And the book intentionally takes a birds-eye view of policy, meaning that there is little attention devoted to specific issues or concerns. IP, like any other area of the law, can always benefit from tweaking and improvement, but it is not as irredeemably broken as its critics make it out to be. This approach makes the book especially timely as Congress looks to begin a comprehensive review of the Copyright Act.

The book would seem to be most valuable to law students and those looking for an introduction to intellectual property law. Legal practitioners and others with a working knowledge of copyright may not find anything particularly novel between the covers of Laws of Creation; while the book is a straightforward and commonsense look at IP, much of it may be familiar territory. But the fact that its reasonable and rational approach is so contrary to much modern IP scholarship makes it worth a read and a space on any intellectual property wonk’s bookshelf.

Piracy turned my genuine love for music into just another fidgety online addiction. It was an exercise in hyper-consumption: quantity over quality, breadth over depth, entitlement over ownership.

Freeloading: How Our Insatiable Hunger for Free Content Starves Creativity, by Chris Ruen

In Freeloading: How Our Insatiable Hunger for Free Content Starves Creativity, Chris Ruen — who previously offered a two part excerpt on this site — recounts his conversion experience from filesharing. While others writing on the subject have approached it from a legal or business perspective, Ruen takes a moral approach, critically examining the effects that everything for free without consequence has had on creativity and culture. But this should not be confused with moralizing, lest you think the book is 255 pages about how unauthorized downloading “is bad, mmkay.” Instead, Ruen explores the nuances of “freeloading” — his term for unauthorized downloading — in the broader context of an age where our real lives increasingly merge with our online selves in the same vein as media critics like Marshall McLuhan and Jaron Lanier.

In particular, Ruen turns to those most affected by the effects of the digital age — the musicians and those in the music industry themselves. The middle third of Freeloading is devoted to interviews with these individuals, and, in my opinion, is what should put the book on the must-read list of anyone in the copyright sphere. The interviews are presented in the subjects’ own words, unfiltered, unedited, and at length. Ruen presents an impressive lineup: Andy Falkous, frontman for Future of the Left. John Beeler, an employee at Asthmatic Kitty Records. James Bradley, owner of Brooklyn record store Sound Fix Records. Matt Wishnow, founder of indie distributor Insound. Ira Wolf Tuton, bassist for Yeasayer. Chris Swanson, co-founder and head of the Secretly Canadian record label. Joe Gaer, co-owner of the Social Registry record label. Todd Patrick, DIY concert promoter. Craig Finn, lead singer of the Hold Steady. Adam Farrell, VP of marketing at the Beggars Group. Kyp Malone, TV on the Radio.

The anarchic idea that, “Oh you take away the monetary system and everything will be, like, groovy”—it’s just not true! There’s always gonna be a hierarchy, no matter what. Okay, no money for music, no money to artists, painters, sculptors…. The idea that all of a sudden there’d be all this new art? No, there wouldn’t be! People are doing as much as they can already.
Joe Gaer

Ruen begins with a look back at the last ten or so years, dubbing it the “Decade of Dysfunction.” It begins with Metallica taking on Napster in 2000, where drummer Lars Ulrich, though correct, struck the wrong tone to many, resulting in a PR disaster that created the narrative that this was about cool, freedom loving digital natives versus out-of-touch, greedy dinosaurs. This narrative would be solidified a few years later when major record labels began to sue individual filesharers. As Ruen explains, academics like Lawrence Lessig were first to capitalize on this narrative. They were followed by “digital determinists” like Cory Doctorow, who argued, basically, that the internet made morality obsolete. Finally, the web hype-men like Chris Andersen and Mike Masnick came, building on the narrative and promising a new way forward for artists and creators. The “Decade of Dysfunction” culminates, for Ruen, at SOPA. He writes, “Years of haphazard debates, misunderstanding of the issues and demonization of rights holders had left a population of Internet users who were vulnerable to propaganda from a technology industry that was (in the form of search engines and social media) facilitating what felt like their lives.”

The wisdom of copyright is to focus the incentives, like a laser, upon the creative work itself. If our shared interest is the creation of more and better art, then why take away the fundamental legal right that incentivizes it, while setting artists off on a wild goose chase to find the best marketing scheme rather than to write the best song? The only true way of “adding value” to art is to make better art of higher quality.

The latter third of Freeloading is devoted to where we go from here. Unlike some, Ruen is optimistic that the ship can be righted and that it is both worthwhile and necessary to include the ethical and moral implications in any such discussion. And though Ruen argues for the continuing vitality of copyright law, he by no means believes “more copyright is better” (which, based on my experiences, seems more strawman than an actually held view). One of his recommendations toward the end is to limit the term of copyright to fifty years — an idea I personally disagree with on utilitarian and other grounds. But, as with any book like this, the idea is not to aim for one-hundred percent agreement but to provoke thought, and at this, Ruen succeeds.

Highly recommended.

As we approach the meat of this century—so exciting yet equally uncertain—the best chance we have for avoiding the declinist tendencies of Digital Determinism is to hold on, with passionate fury, to the principle that human creativity is valuable and sacred. When we devalue creativity, when we trample upon the rights of artists to distribute their work as they please, we devalue ourselves and trample upon our own right to a better future.

Chicago attorney Kevin Parks was kind enough to send me a copy of his new book, Music & Copyright in America: Toward the Celestial Jukebox.

Copyright in the music business can be a daunting subject for the uninitiated. For starters, you’re typically dealing with two distinct copyrighted works — one for the underlying musical composition and one for the sound recording of that composition. Next, each copyright actually entails a “bundle” of separate rights: reproduction, distribution, public performance, etc. Through industry practice and custom, many of these rights have come to be administered through different entities; the public performance right for musical compositions, for example, is primarily administered through collective licensing societies — ASCAP, BMI, and SESAC in the US. Finally, the US Copyright Act includes a number of compulsory licenses for certain uses of copyrighted works — mechanical reproductions of musical compositions and digital performances of sound recordings for noninteractive webcasters, to name two — which adds to the complexity.

How does one make sense of all of this?

In Music & Copyright in America: Toward the Celestial Jukebox, IP attorney Kevin Parks contributes to a better understanding of this system by exploring how it developed. Beginning in the early 19th century, when music as commerce first began to emerge in the US, he traces the legal and commercial developments of musical copyrights.

Composed of seven major sections, Parks chronicles the birth of the American music industry, the development of sound recording technology, the development of radio and growth of the public performance right, struggles against record piracy, the challenges brought by the internet, and finally today’s changes involving convergence and the shift toward the cloud.

Telling the story of music and copyright in America as Parks did is interesting on several levels.

First, it is somewhat striking how idiosyncratic the development of musical copyright law has been at times. Parks notes that the public performance right for musical compositions resulted from a last minute change to an 1897 amendment aimed primarily at shoring up the public performance right for dramatic compositions. Its appearance is somewhat of a mystery, as songwriters at the time were not pushing for the right, and there is “scant evidence” that the change was the result of lobbying from music publishers or more prominent songwriters. It would not be until the formation of ASCAP and the emergence of radio decades later that composers and publishers would begin to take advantage of the public performance right, which today generates over $1.5 billion a year for songwriters and music publishers.

The creation of the compulsory license for mechanical reproductions is another example. Mechanical reproduction, that is, copying a musical composition onto a mechanical object that plays the sounds like a piano roll or phonograph, was explicitly recognized as part of the exclusive right to reproduction under the Copyright Act of 1909. Prior to that, courts, including the Supreme Court the year before, had held that this type of copying was not within the gambit of a copyright owner’s right to reproduce his work, meaning piano rolls and records of popular songs could be produced without permission of the songwriters.

But at the same time, Congress created a compulsory license in the statute, allowing anyone to mechanically reproduce a song for a set fee without permission of the songwriter. The compulsory license was added because of concerns that a record company might monopolize the market on mechanical reproductions of songs — specifically the Aeolian Company, which had financed the earlier Supreme Court fight. Whether or not these concerns over the potential for monopoly were accurate or just a product of their time, the fact remains that the compulsory license is still with us, long after the Aeolian Company ceased making piano rolls.

Second, the book reinforces the idea that there has never been anything approaching any type of monolithic “music industry.” Throughout the last two centuries, the music industry has been comprised of a number of various stakeholders, whose interests sometimes aligned but often diverged. And neither the stakeholders nor interests remained constant; companies folded or shifted to new industries, technology and society changed. You often hear critics of copyright try to craft some overriding historical narrative of the law — the music industry hates innovation is a popular example. But such narratives oppose history.

Finally, it is easy to pick out parallels between historical challenges in musical copyright and today’s challenges. One common theme is how often emerging players would resist copyright liability by pointing out the “promotional” benefit their use of music provided. Another is how often positive changes only resulted when artists and creators spoke up.

The narrative is breezy and engaging. In just over 200 pages, Parks hits on all the major events of musical copyright in the US over the past 200 years while fleshing out the tale with interesting biographical sketches and historical tidbits. These latter details elevate the book from what could be a perfunctory treatment of an admittedly dry subject into a story equally at home on your bedroom nightstand as it is on a reference desk. And, once read, the book remains a tremendous source of citations to legal documents and secondary sources for delving deeper into the events and topics it addresses.

The book does get weaker the closer it gets to the present. Much of this is unavoidable: first, because any book dealing with current events will be somewhat outdated when it hits the stands because of the lag time between final draft and publishing, and second because it’s more difficult to craft a broader narrative without the benefit of history’s filter. For example, Parks includes a discussion of the Supreme Court’s 2012 decision in Golan v Holder. While the case is certainly as important as any Supreme Court case goes, it is unlikely to have much lasting impact on music and copyright, as it dealt with a relatively obscure and transitional provision in the Uruguay Round Agreements Act.

Finally, I’d be remiss in not pointing out that while the book may be of interest to a general audience, it is priced for the professional legal market.

But overall, the positives of Music & Copyright in America: Toward the Celestial Jukebox far outweigh any negatives. It remains a fascinating look at the development of the American music industry over the past two centuries and a tremendous resource for legal practitioners and scholars.

A conventional narrative has emerged of  the media and creative industries’ response to the internet and digital technology. Beginning around the mid-1990s, this story has been one of old against new: stodgy, corporate executives holding on to the past versus hip digital natives embracing the future. These technologies have rendered copyright law broken according to this story; existing media industries have failed to take advantage of these innovations, relying instead on using the law to prop up their dying business models. They have failed to adapt and sued those who have.

Casting a journalist’s eye on the past decade and a half, Robert Levine debunks this narrative in his new book Free Ride: How Digital Parasites are Destroying the Culture Business, and How the Culture Business Can Fight Back.

For example, in his chapter on the music industry, he notes that contrary to the party line, record labels had privately been in negotiations with Napster prior to their lawsuit against it. Even if the two sides had reached an agreement, it’s unlikely the industry’s fortunes would have changed much: piracy would move to second-generation file-sharing services like Limewire and Kazaa and any revenues generated from a subscription Napster would have been a fraction of what labels were getting from traditional retail channels. As Levine points out, “The labels wasted time they should have spent setting up legal online services, and they made plenty of other mistakes. But why would any company rush to turn $15 transactions into 99-cent sales, let alone ones worth nothing at all?”

The reframing of the narrative goes deeper. In his book Moral Panics and the Copyright Wars, William Patry notes that the history of copyright law has been punctuated by “copyright wars”, one of which we are in the midst of today. Patry implies that the current “copyright war” is different — previous ones had been inter-industry struggles, this one pits the interests of traditional copyright holders with the public at large.1

Levine shows, however, that this is incorrect. The ideology of copyright critics masks nothing more than a simple economic struggle between existing content producers and emerging content distributors. As Levine points out in an interview at last June’s World Copyright Summit, despite all the high-minded academic arguments of the copyleft, no one has so far acted contrary to their economic self-interest. To be fair, even those who have argued against copyright have admitted as much. At this past April’s Rethink Music conference, Lawrence Lessig said, “Ideas have nothing to do with this fight. This is a fight between the people who make money under the old system and the people who might make money in the new system.”

Free Ride is currently available in the UK and hits the shelves in the US October 25th — the companion blog is found at freeridethebook.wordpress.com. The book is a must read for creators, copyright enthusiasts, and anyone else interested in these issues. Levine is a former executive editor for Billboard, former features editor for Wired, has written for Rolling Stone and Vanity Fair, and is an all around good guy. Disclaimer: I assisted Rob with some legal research for the book.

Along with the music industry, Levine devotes chapters to newspapers, books, television, and film. Although each of these industries rely on copyright and each have faced challenges in the digital age, the similarities end there. The business models of each sector have substantial differences, and the reasons for their struggles vary — newspapers, for example, lost significant ad revenues to web sites like Craigslist. The stories of these industries are breezily told but thoroughly researched, peppered with quotes from the many people who played a role in them that Levine interviewed for this book.

But it’s those parts of Free Ride that take a critical look at the role of tech companies in pushing the previously-mentioned narrative — shaping the law, policy, and public discourse at the same time — which seem to be getting the most attention. Google’s role in particular is scrutinized — Levine details the money and people that flows from the search giant to various academic think tanks and public interest groups which push for a version of copyright law more favorable to the googles of the world. As the book points out, there’s nothing wrong with this — every business looks out for its own interests. But this side of the debate often escapes attention.

Free Ride ends with some recommendations for how the culture business can address the challenges of commerce in the face of ubiquitous copying. Levine’s greatest contribution to these challenges, however, is the book itself. By bringing together all the pieces of the post-DMCA story of copyright and reframing the conventional narrative to one closer to reality, Free Ride lends an air of hope to the idea that creative industries can thrive online.

Footnotes

  1. Pp. xix, 1 (Oxford Univ. Press 2009). []