California Law Review VOL. 80 DECEMBER 1992 No.6 Copyright © 1992 by California Law Review, Inc. A Theory of Law and Information: Copyright, Spleens, Blackmail, and Insider Trading James Boyle TABLE OF CONTENTS Introduction ................................................... 1416 I. Four Puzzles ............................................ 1426 A. Copyright .......................................... 1426 B. Blackmail .......................................... 1428 C. Insider Trading ..................................... 1429 D. Spleens ............................................. 1429 II. Public and Private in the Liberal State ................... 1433 III. Information in the Liberal State ......................... 1437 IV. The Economics of Information .......................... 1443 V. Property in the Liberal State ............................ 1458 VI. Copyright .............................................. , 1461 VII. Blackmail ............................................... 1470 A. Economic Theories ................................. 1471 B. Libertarian Theories ................................ 1477 C. Third Party Theories ............................... 1481 D. Shared Problems ................................... 1483 VIII. Insider Trading ....................................' ..... 1488 A. Economic Analysis of Information Disparities ....... 1494 1. Baseline Errors. .. 1494 2. Ad Hoc Claims About Behavior ................. 1498 3. Ignoring Contradictions in the Theory ........... 1499 B. Insider Trading Law as a Puzzle .................... 1500 IX. Spleens. .. 1508 A. Worrying About Property .......................... 1511 1413 1414 CALIFORNIA LAW REVIEW 1. Limitations on Property . .. .. ... 1511 2. Utilitarian !ustification of Property .............. 1512 3. Characterization as Property .................... 1513 B. Public and Private; Publicity and Privacy ............ 1514 C. The Author and the Source . .. 1518 x. Conclusion .............................................. 1520 A. "Typing" Information Issues. .. 1520 B. The Search for an Author. .. 1525 C. The Future. .. 1534 1. Information Class ............................... 1534 2. Information Overload ........................... 1536 3. Information Politics ............................. 1538 A Theory of Law and Information: Copyright, Spleens, Blackmail, and Insider Trading James Boylet In this Article, Professor Boyle undertakes an analysis of the law's treatment of information across four apparently disparate realms: copy­ right, genetic information, blackmail, and insider trading. He argues that questions of information regulation, commodification, and access are shaped by two neglected processes of interpretive construction. First, such issues are often decided by pigeonholing them into implicitly contradictory stereotypes of "public" or "private" information. These conflicting stereo­ types have their roots in basic assumptions about politics, the market, and privacy in a liberal state. Second, Professor Boyle argues that tension between these stereotypes is often apparently resolved by the use ofa seduc­ tive image: the romantic author whose original, transformative genius jus­ tifies private property and fuels public debate. Thus, conventional wisdom, courts, and even economic analysts are more likely to favor granting prop- t Copyright 1992, James Boyle, Professor of Law, Washington College of Law, The American University. LL.B. 1980, Glasgow University; LL.M. 1981, S.J.D. 1986, Harvard University. This Article was written while I was a Visiting Professor at Boston University Law School and Harvard Law School. The research funds of those schools supplied valuable assistance. As befits a piece that questions the notion of authorship and originality, this one is marked by fundamental intellectual debts. Four articles have been particularly influential: Peter Jaszi, Toward a Theory of Copyright: The Metamorphoses of "Authorship"; Duncan Kennedy, The Structure of Blackstone's Commentaries; Joseph W. Singer, The Legal Rights Debate in Analytical Jurisprudence from Bentham to Bohfeld; and Martha Woodmansee, The Genius and the Copyright: Economic and Legal Conditions of the Emergence of the "Author." I have also been influenced by the work of Rosemary Coombe, and by the prodigious and sophisticated oeuvre of Wendy Gordon. This Article draws on a theory of authorship and its relevance to property, romance, and interpretation that I first laid out in The Search for an Author: Shakespeare and the Framers. Earlier versions of this Article were presented at the 1991 Case-Western Conference on Intellectual Property and the Construction of Authorship, and at faculty colloquia at Harvard Law School and Boston University Law School. I would like to thank all of the participants for helping me to refine my ideas. Colleagues at Harvard Law School, American University, and Boston University were generous with their time. I have benefitted particularly from comments by Frank Michelman, Fred Schauer, Terry Fisher, Howell Jackson, Terry Martin, David Carlson, Mark Hager, Jack Beermann, Joe Singer, Rudy Peritz, Mark Rose, Margreta de Grazia, Steven Shavell, Louis Kaplow, Bob Bone, and David Seipp. William Alford's work on intellectual property in China was also extremely helpful. Anne Hollander, Gerry Moohr, and the rest of the participants in the Modern Legal Theory Seminar also helped me to refine my ideas. Jae Won Kim, Jennifer Ritter, David Dantzic, and Beth Silberman researched expertly. Above and beyond these other debts, however, this piece only exists because of a conversation carried on over the last eight years with my polymath colleague, Peter Jaszi. It is to him that I would like to dedicate it. 1415 1416 CALIFORNIA LAW REVIEW [Vol. 80:1413 erty rights in information when the controller of this information can con­ vincingly be ascribed the qualities of originality, creativity, and individuality, the defining attributes ofromantic authorship. This is possi­ ble in the copyright domain and for manipulators, if not sources, ofgenetic information. Blackmailers and insider traders cannot so readily be fitted into the romantic author mold, and are classified instead as transgressors against, respectively, the "private" and "public" stereotypes of informa­ tion. The Article concludes by assessing the impact of the implicit stereo­ types on the politics of the "information age." Professor Boyle argues that an emphasis upon the ideology of authorship could be as important to an information society as the notions offreedom of contract and wage labor were to an earlier, industrialized society. This ideology ofauthorship, Pro­ fessor Boyle contends, with its tendency to devalue the claims of sources and of audience, has the potential for strong detrimental effects on the political and economic structure of the "information age. " INTRODUCTION It is hard, nowadays, to find a piece of futurology that doesn't say we are entering an information age. Yet there have been few systematic critical studies of the rhetorical, ideological, political, and, ultimately, legal structures through which we deal with information. 1 At the same 1. Among legal scholars, only the economic analysts oflaw have seemed interested in dealing holistically with information, rather than with the doctrinal categories into which law has traditionally divided it. The two most striking examples of the holistic approach are Frank H. Easterbrook, Insider Trading, Secret Agents, Evidentiary Privileges, and the Production of Information, 1981 SUP. Cr. REv. 309, and Edmund W. Kitch, The Law and Economics ofRights in Valuable Information, 9 J. LEGAL STUD. 683 (1980). In a manner reminiscent of legal realist scholarship, these studies suggest that doctrinal divisions may obscure the need for enlightened policymaking. Easterbrook, for example, is concerned that, "[i]fthe Court puts information cases in securities law or evidence law pigeonholes, it may overlook the need to consider the way in which the incentive to produce information and the demands of current use conflict." Easterbrook, supra, at 314. While I agree with the impulse to treat information holistically, my goals are rather different. Later in this Article, I argue that despite its holistic treatment of information, the law and economics literature is beset by a number of conceptual "baseline" and Hohfeldian errors, and that it presents an ideology of "authorial" incentive as ifit were not ideology, but empirical fact. See infra Part IV. Nonlawyers have come close to my concerns here. Kim L. Scheppelle's book Legal Secrets gives a thoughtful contractarian analysis of secrets in cases related mainly to fraud, privacy, and professional requirements of confidentiality. In the process she offers a critique of Chicago-style law and economics and an interesting defense of egalitarian informational ethics. KIM L. SCHEPPELLE, LEGAL SECRETS: EQUALITY AND EFFICIENCY IN THE COMMON LAW (1988). Literary critics have also contributed to the issue. In a recent book, Susan Stewart offers a fascinating analysis of the intersection of law and a range of "crimes of writing"-forgery, literary imposture, pornography, and graffiti-and the relevance of this intersection to notions of SUbjectivity and authenticity. SUSAN STEWART, CRIMES OF WRmNG: PROBLEMS IN THE CONTAINMENT OF REPRESENTATION (1991). Bernard Edelman's Le Droit Saisit par la Photographie (published in English as BERNARD EDELMAN, OWNERSHIP OF THE IMAGE (1979» goes in the other direction, giving an Althusserian