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Contracts, Preemption, and the Structure of Copyright Policymaking

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Contracts, Preemption, and the Structure of Copyright Policymaking Super-Copyright: Contracts, Preemption, and the Structure of Copyright Policymaking Viva R. Moffat* Adhesion contracts, many of them now in clickwrap or browsewrap form, proliferate and govern nearly every commercial transaction and most of the ways in which the modern consumer interacts with the world. Virtually every one of these contracts contains a limitation on copyright’s fair use doctrine. These widespread and non-negotiated restrictions on fair use (“super-copyright” provisions) conflict with and stand as an obstacle to the achievement of federal purposes, but most courts and many commentators have rejected preemption as the appropriate doctrinal tool for addressing challenges to these provisions. This Article argues that enforcement of super-copyright provisions ought to be preempted. Preemption is the doctrine designed to address the interaction between state law and federal policy; other doctrinal approaches, such as state contract defenses and formation doctrines, do not do the work necessary to mediate between federal and state interests. In addition, preemption in this context is a way of acknowledging and emphasizing the proper institutional structure of copyright policymaking. By permitting copyright owners to contract around fair use, courts have improperly abdicated their fair use policymaking role while at the same time arrogating to themselves policymaking regarding contracting around fair use, which is a task that should be placed at Congress’s door. * Assistant Professor of Law, University of Denver Sturm College of Law. A.B. Stanford University; M.A., J.D. University of Virginia. I presented this paper at the Intellectual Property Scholars’ Conference (“IPSC”) 2006 and at the University of Denver’s Works-in-Progress series; I thank participants in both for their helpful comments and encouragement. In particular, Alan Chen, Sam Kamin, Mark Lemley, Paul Ohm, Jennifer Rothman, and Phil Weiser provided thoughtful and extensive comments. Kendra Beckwith, Emily Bright, and Sherri Catalano provided outstanding research assistance. 45 46 University of California, Davis [Vol. 41:045 TABLE OF CONTENTS INTRODUCTION ..................................................................................... 47 I. THE PROLIFERATION OF SUPER-COPYRIGHT PROVISIONS ............ 50 A. Fair Use in the Federal Copyright Scheme........................... 51 B. Super-Copyright Provisions in the Digital Age..................... 55 C. Representative Super-Copyright Provisions.......................... 59 D. The Effects of Super-Copyright Provisions ........................... 65 1. Chilling Fair Use .......................................................... 66 2. Narrowing the Doctrine ............................................... 67 3. Abandoning Fair Use Policymaking............................. 68 4. Creating Rights Against the World .............................. 69 II. THE PREEMPTION DOCTRINES .................................................... 70 A. Express Preemption: § 301 of the Copyright Act ................. 71 B. The Relationship Between Express and Implied Preemption .......................................................................... 78 C. Implied Preemption.............................................................. 80 D. Obstacle Preemption in the Intellectual Property Context..... 82 III. COURTS SHOULD PREEMPT SUPER-COPYRIGHT PROVISIONS BECAUSE THEY INTERFERE WITH THE FEDERAL COPYRIGHT SYSTEM ....................................................................................... 87 A. Fair Use .............................................................................. 87 B. Balance................................................................................ 92 C. Uniformity........................................................................... 95 IV. COURTS SHOULD PREEMPT SUPER-COPYRIGHT PROVISIONS TO PROPERLY ALIGN COPYRIGHT POLICYMAKING .......................... 101 A. Why Courts Have Not Preempted Super-Copyright Provisions.......................................................................... 101 B. Why Preemption Would Correct Structural Problems in Copyright Policymaking .................................................... 104 1. Fair Use Policymaking ............................................... 105 2. Policymaking and Contracting Around the Copyright Act ............................................................. 106 3. Allocating the Burden of Overcoming Legislative Inertia ......................................................................... 107 CONCLUSION....................................................................................... 108 2007] Super-Copyright 47 INTRODUCTION Reports of the demise of fair use and the public domain have been rampant recently. Many commentators have provided accounts of the increasing scope and strength of the rights granted to and taken by copyright owners, and the corresponding reduction in third-party uses.1 There is no doubt that copyright has expanded by statute, by judicial decisions, and by creative business methods. Commentators have described this process as a “one-way ratchet”:2 ever greater rights for copyright owners and lesser third-party rights.3 This one-way ratchet has been achieved through a variety of methods. One method is to layer protection for a work, employing copyright law plus patent law plus state law protections plus technological protection measures plus restrictive contract terms. This Article focuses on the contract layer of protection, specifically the use of adhesion contracts by business entities to restrict third- party uses, particularly fair use.4 Although the efforts to expand copyright entitlements have been frequently noted in the literature, the extent and effects of the effort to restrict fair use through consumer adhesion contracts has not been fully addressed. This Article addresses the issues raised by the ubiquitous inclusion of fair use restrictions in standard form contracts (“super-copyright” 1 See, e.g., Sara K. Stadler, Incentive and Expectation in Copyright, 58 HASTINGS L.J. 433, 435 (2007) (“In defining the rights of creators by asking about their incentives to create, copyright law is creating and satisfying increasing expectations in a cycle that leads inexorably to the creation of more rights.”); see also Michael Carroll, Fixing Fair Use, 85 N.C. L. REV. 1087, 1093 (2007) (“Concerns about the problem of fair use uncertainty have intensified recently because fair use has been called upon in a variety of new situations.”); Rebecca Tushnet, Copy This Essay: How Fair Use Doctrine Harms Free Speech and How Copying Serves It, 114 YALE L.J. 535, 557 (2004) (“Some scholars have persuasively argued that the scope of fair use is shrinking because courts and commentators have adopted the idea that fair use is only relevant for instances of market failure, and copyright proprietors have successfully urged that market failures are generally curable by licensing schemes, which are even easier to apply in digital markets.”). 2 See, e.g., Tushnet, supra note 1, at 543 (“Legally, then, copyright has been a one-way ratchet, covering more works and granting more rights for a longer time.”). 3 See Jason Mazzone, Copyfraud, 81 N.Y.U. L. REV. 1026, 1038 (2006) (“The end result is that copyright law creates an irresistible urge for publishers to claim ownership, however spurious, in everything.”). 4 Fair use, pursuant to the Copyright Act, 17 U.S.C. § 101 (2000), is use that is deemed “fair” or non-actionable even though it otherwise constitutes infringement. Id. § 107 (2000). 48 University of California, Davis [Vol. 41:045 provisions) and concludes that the Copyright Act should preempt such provisions. Super-copyright provisions are nearly universal. If you have surfed the web, bought a computer, done online banking, ordered flowers, purchased a plane ticket, downloaded software, listened to music on iTunes, or watched a video on YouTube, you have entered into a contract and agreed not to make fair use of the material you encountered.5 For example, if you bought a ticket from United.com, you agreed to download only one copy of your itinerary;6 if you watched a video on YouTube, you agreed not to use any material on the website without YouTube’s “prior, express written consent;”7 and if you downloaded software, chances are you agreed not to make any unauthorized copies and agreed not to reverse engineer the program.8 Virtually every online experience and many face-to-face consumer transactions involve contracts that contain restrictions similar to those described above. In this way, business entities systematically convert fair uses into breaches of contract, thereby fundamentally altering the copyright balance. Many courts and commentators have addressed the propriety of contracting around fair use, primarily in the context of software licenses and database agreements. These responses fall roughly into two camps, both of which focus generally on contract law and policy. The “freedom of contract” camp asserts that contracting around copyright is not only acceptable but is affirmatively good.9 Under this freedom of contract ethos, contracting around copyright law allows for 5 According to the copyright owner, at least, you have entered into a contract. See infra Part I.B. “Clickwrap” agreements are those that require the user to click an “I agree” button or box in order to begin using the site, product, or service. “Browsewrap” agreements are less obvious to the user, generally appearing under a “Terms
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