Article | Intellectual Property LawDoes Fair Use Matter? An Empirical Study of Music Casesby Edward Lee* and Andrew […]
The Seventh Circuit’s 2014 opinion in Kienitz v. Sconnie Nation has played an outsized role in the discourse on fair use, an affirmative defense to copyright infringement.1 The opinion is quite short, spanning just over three pages, and it emerged from a circuit that produces relatively few fair use opinions.2 Yet Kienitz is often cited for its rejection of “transformative use,” a relatively new but influential concept that has reshaped fair use doctrine.3 The court in Kienitz warned that transformative use threatens to replace the four-factor test for fair use found in § 107 of the Copyright Act4 and could erode authors’ exclusive rights to produce “derivative works” based on their original works.5 In place of transformative use, Kienitz proposed that courts should simply “stick with the statutory list” of four factors when analyzing fair use.6 The opinion applied this approach by focusing its analysis on factors three and four: the amount of the copyrighted work used and the effect of that use on the market for the copyrighted work.7
Is Kienitz’s approach a viable model for analyzing a fair use defense without relying on transformative use? The answer is no. This Note concludes that Kienitz’s reasoning is fundamentally flawed and suffers from many of the same infirmities it identified in transformative use.8
There are three problems with Kienitz’s reasoning. First, its approach to factor four defines the scope of derivative works in a way that would severely limit authors’ rights.9 Second, it employs a test, known as the “substitute/complement test,” which tends to underestimate market harm.10 Finally, its analysis of factor three implies there was no copyright infringement, which if true, would have made the fair use defense unnecessary.11 If Kienitz’s amputation of transformative use was an attempt to remedy its harmful symptoms, its cure was worse than the disease.12
Although its analysis was flawed, Kienitz’s diagnosis of the problems with transformative use was accurate.13 Transformative use has been applied in a way that has come to dominate the statutory fair use factors and blurs the line between protected derivative works and fair use.14 This Note proposes two ways to restructure fair use analysis to limit the negative effects of transformative use: (1) rearrange the order in which the factors are analyzed and (2) make a finding of transformative purpose a threshold requirement of transformative use.
Part I explains how the scope of fair use has contracted and expanded throughout United States history and how transformative use has driven the current period of expansion. Part II examines the analysis in Kienitz and concludes, for the reasons described above, that it does not provide a viable alternative to transformative use. Part III demonstrates an alternative fair use analysis of the facts in Kienitz to show how the opinion could have benefited from incorporating transformative use into its analysis and by applying this Note’s two proposals for restructuring fair use. In the process, Part III also reveals, and argues against, common issues in other courts’ analyses of each fair use factor, including the widespread underappreciation of factor two15 and Campbell v. Acuff-Rose Music, Inc.’s unprecedented instruction to emphasize findings from factor one in the analysis of factor three.16
From Volume 92, Number 4 (May 2019) Institutional Design in Patent Law: Private Property Rights or Regulatory […]
The Indian Commerce Clause of the United States Constitution grants Congress plenary power to regulate Native American tribes. In the absence of congressional action, a “dual sovereign” structure exists whereby the tribes are allowed—subject to constraints imposed by Congress—to exist and regulate their own affairs independently of the states and the Federal Government. As a benefit of sovereignty, tribes possess sovereign immunity—an immunity similar to the immunity granted to states under the Eleventh Amendment. Sovereign immunity as a doctrine is based in the common law and allows the sovereign to avoid being sued without its consent. Tribal sovereign immunity, unlike state sovereign immunity, is subject to congressional abrogation, meaning Congress can decide the circumstances whereby tribes are subject to suit without their consent.
In September 2017, Allergan Pharmaceuticals (“Allergan”) made news when, in the middle of a challenge to its Restasis patent’s validity in Inter Partes Review (“IPR”), it assigned its patent rights in the drug to upstate New York’s Saint Regis Mohawk Tribe (“Saint Regis”). After receiving the patent rights, Saint Regis quickly licensed the Restasis patent back to Allergan for an immediate payment of $13.75 million, coupled with an additional $15 million per year in royalties. Because the transaction gave Saint Regis ownership of the patent, the tribe became the patent’s defender in the IPR proceeding. The tribe moved to have the IPR terminated, asserting their immunity from suit under the doctrine of tribal sovereign immunity.
On March 10, 2015, the music world was stunned when a jury in Federal District Court in Los Angeles rendered a verdict in favor of the heirs of Marvin Gaye against Pharrell Williams and Robin Thicke, who, along with rapper Clifford Harris, Jr., professionally known as “T.I.,” wrote the 2013 mega-hit song entitled “Blurred Lines.” The eight-member jury unanimously found that Williams and Thicke had infringed the copyright to Marvin Gaye’s “Got To Give It Up.” On appeal, the Ninth Circuit Court of Appeals affirmed the verdict and recently rejected Williams and Thicke’s Petition for Rehearing en banc.
The case is significant for a number of reasons. In typical music copyright cases—at least successful ones—the two works share the same (or at least a similar) sequence of pitches, with the same (or at least similar) rhythms, set to the same chords. The Blurred Lines case was unique, in that the two works at issue did not have similar melodies; the two songs did not even share a single melodic phrase. In fact, the two works did not have a sequence of even two chords played in the same order, for the same duration. They had entirely different song structures (meaning how and where the verse, chorus, etc. are placed in the song) and did not share any lyrics whatsoever.
Over the last decade, a growing consensus has emerged: there are too many patents, and they are causing a host of problems. These problems include patent “trolling,” patent “wars,” and other wasteful societal costs. In explaining this patent overabundance, some scholars have pinpointed the United States Patent Office, the governmental body responsible for issuing patents, as the main culprit. Others have blamed patent holders themselves, identifying a number of incentives these parties have to pursue patents even in cases where doing so makes little economic sense. Overall, these analyses thus typically assume a high and relatively uniform demand for patents among inventive parties—one that the United States Patent Office is only too willing to satisfy.
Yet this focus on excessive patenting obscures the reality that parties likely differ significantly in their demand for patents and other forms of intellectual property. In economic parlance, different inventive parties are likely to exhibit different “elasticities,” or sensitivities, in their demand for patents and other types of intellectual property. This Article uses economic principles to disaggregate intellectual property demand by highlighting a number of factors that may affect a party’s demand for patents and other forms of intellectual property. It argues that resource-constrained parties are more likely to exhibit more elastic demand for patents, meaning they are more sensitive to the costs of patenting, both in general and relative to the costs of other intellectual property forms. As a result, rising costs of patenting are more likely to lead resource-constrained parties to forego patenting and rely on alternative, cheaper forms of intellectual property protection when available. Well-capitalized parties, on the other hand, are more likely to exhibit relatively inelastic, high demand for patents, regardless of the costs of other intellectual property types that may otherwise function as substitutes. Thus, well-capitalized parties tend to patent en masse and complement patenting with additional intellectual property protections when available.
Design—which encompasses everything from shape, color, and packaging to user interface, consumer experience, and brand aura—is the currency of modern consumer culture and increasingly the subject of intellectual property claims. But the law of design is confused and confusing, splintered among various doctrines in copyright, trademark, and patent law. Indeed, while nearly every area of IP law protects design, the law has taken a siloed approach, with separate disciplines developing ad hoc rules and exceptions. To address this lack of coherence, this Article provides the first comprehensive assessment of the regulation of consumers’ aesthetic experiences in copyright, trademark, and patent law—what we call “the law of look and feel.” We canvas the diverse ways that parties have utilized (and stretched) intellectual property law to protect design in a broad range of products and services, from Pac-Man to Louboutin shoes to the iPhone. In so doing, we identify existing doctrines and principles that inform a normatively desirable law of look and feel that courts and Congress should extend throughout IP law’s protection of design. We argue that design law should protect elements of look and feel but remain sensitive to eliminating or mitigating exclusive rights in response to evolving standardization, consumer expectations, and context. Notably, our normative conception of design protection sometimes departs quite starkly from how courts have expansively conceptualized look and feel as protectable subject matter. Going further, we argue that the new enclosure movement of design, if not comprehensively reformed and grounded in theory, can erode innovation, competition, and culture itself.
The patent system uses exclusion to stimulate innovation. But a mounting body of evidence calls into question the assumption that innovation based on excluding others is the only, or even primary, way that the patent system supports innovation today. Nearly 50 percent of manufacturers got the idea for their most important new product from an outside source that shared it with them, 45–59 percent of patentees acquire patents in order to access the technology of others, and over 2,100 companies, including five of the top ten holders of patents, have committed to sharing their patents with others. But because the essence of a patent is the right to exclude, policymakers have paid relatively less attention to ways in which patents can be used to include and to diffuse technology. This paper focuses on the ways that innovators are modifying the patent system’s exclusionary defaults, employing open source approaches, licenses, pledges, contracts, defensive publication and patenting, and related mechanisms to share innovation—including with their rivals. This Article advocates supporting and encouraging, rather than just tolerating these uses of the patent system, for several reasons. First, as innovation takes place in open and closed modes, the patent system can increase its relevance to all types of innovation. Second, weaknesses in voluntary diffusionary arrangements—for example, the lack of enforceability of patent pledges or open source commitments, the use of patents subject to licensing commitments to seek injunctions, and the use of once-defensive patents for patent assertion —suggest that the policy environment for innovation could be improved. Finally, providing ways for patent holders to take voluntary steps to curtail or limit their rights can offer a more flexible and predictable framework for rebalancing the patent system than measures like imposing limits on patentable subject matter or compulsory licensing.
Despite Justice Scalia’s dissent and the claims of Aereo and its amici, this Note will argue that, when viewed on the whole, any potential fears that the Aereo decision could implicate the legality of cloud-based technology or affect copyright infringement analysis with respect to this industry are likely unwarranted. First, there are substantial structural differences between how Aereo operated and how cloud-based services (particularly remote storage systems) continue to run. Second, the Aereo decision is a narrow response particularly attenuated to that company’s practice of functioning like a traditional cable system while failing to pay the fees required by such systems when they rechannel broadcast networks’ signals. Thus, because the case addresses such a specific factual scenario, its holding is unlikely to be extended to other cloud-based services. To illustrate this point, Part I will discuss Aereo’s technology to clarify how the system physically functioned to stream practically live television through the Internet. Part II will analyze the key reasons why the Supreme Court found this particular technology to violate the networks’ rights, while also analyzing Justice Scalia’s concerns about potential fallout from the majority opinion, particularly with respect to the cloud industry. And finally, Part III will contrast Aereo’s technological infrastructure with that of several common cloud-computing service providers and will examine the shortcomings of the argument that Aereo leaves in flux: the legality of cloud-computing services and the copyright infringement analysis with respect to those services.
What happens when an iconic cartoon mouse and an internationally renowned, electronic dance music disc jockey face off? While this may sound like the making of a fictitious scenario, this was actually the underlying context of the 2015 trademark dispute between Walt Disney Company (“Disney”) and Joel Zimmerman —stage name “deadmau5” (pronounced “dead mouse”)—in which Disney challenged the trademark registration of deadmau5’s logo. Though short-lived, and likely best remembered for its attention grabbing headlines, the dispute is instructive as to how U.S. trademark law should adapt to international trademark disputes. While the deadmau5-Disney dispute ended by a settlement between the parties, it is extremely probable that there will be more trademark disputes with common factual underpinnings in the future; thus, the dispute raises more questions than answers.