Texas A&M University School of Law Texas A&M Law Scholarship Faculty Scholarship 4-1996 Reexamining Copyright's Incentives--Access Paradigm Glynn S. Lunney Jr Texas A&M University School of Law, [email protected] Follow this and additional works at: https://scholarship.law.tamu.edu/facscholar Part of the Law Commons Recommended Citation Glynn S. Lunney Jr, Reexamining Copyright's Incentives--Access Paradigm, 49 Vand. L. Rev. 483 (1996). Available at: https://scholarship.law.tamu.edu/facscholar/530 This Article is brought to you for free and open access by Texas A&M Law Scholarship. It has been accepted for inclusion in Faculty Scholarship by an authorized administrator of Texas A&M Law Scholarship. For more information, please contact [email protected]. VANDERBILT LAW REVIEW VOLUME 49 APRIL 1996 NUMBER 3 Reexamining Copyright's Incentives- Access Paradigm Glynn S. Lunney, Jr.* I. INTRODUCTION ................................................................... 485 II. THE INCENTIVES-ACCESS PARADIGM INTRODUCED ...........492 III. THE PARADIGM EXPLORED: THE ELEMENTS OF COPYRIGHT 499 A. Defining a Work's Unprotected Aspects ................. 504 1. Elements Left Unprotected to Ensure the Creation of Future Works .......................... 509 2. Aspects Left Unprotected to Avoid Undue M onopolization ........................................... 517 3. Summary: Access, Ideas, and Expression 525 B. Defining the Similarity Necessary to Establish Infringem ent ........................................................... 526 1. The Degree of Similarity Necessary to Establish an Infringement ......................... 526 2. The Type of Similarity Required to Establish an Infringing Appropriation ......533 C. Defining Fair Uses ................................................. 546 D. Summary of the Incentives-Access Paradigm........ 552 IV. AN INTERNAL CRITIQUE OF THE INCENTIVES-ACCESS PARADIGM .......................................................................... 554 A. Paradox: Incentive and Deadweight Loss............. 556 B. "Necessary" Elements ............................................. 561 C. Conclusion.............................................................. 569 * Associate Professor of Law, Tulane University School of Law. B.S., Texas A & M University; J.D., Stanford Law School. I would like to thank my research assistants, Cate Bartholomew, Nichole Parker, and Tom Nachbar, for their assistance, and my colleagues for their willingness to listen. 483 VANDERBILT LAW REVIEW [Vol. 49:483 V. INTERLUDE: JOINT VALUE GOODS ..................................... 571 A. Creatingthe PhysicalProduct ............................... 572 B. Creatingthe Work's Value ..................................... 574 C. Copyright'sRole in Assigning Joint Value ............ 576 VI. COPYRIGHT, JOINT VALUE, AND ALLOCATIVE EFFICIENCY 579 A. Introduction: A Model of Investment Decisions.... 582 B. Applying the Model: Allocative Efficiency and Copyright................................................................ 589 1. Introduction: Ease of Copying and Return on Investment ................................ 589 2. Averaged Price, Social Value, and Allocative Efficiency ................................... 590 3. Allocative Efficiency and the Proper Scope of Copyright Protection .................... 599 C. Applying the Test: Competitive and Noncompetitive Copying ........................................ 601 1. Competitive Uses: Reproduction ............... 602 a. General Considerations.................. 603 b. Empirical Evidence ......................... 606 c. Conclusion....................................... 627 2. Noncompetitive Uses: Derivative Works, Public Performance, and Public Display... 628 a. Introductionto Derivative Rights... 630 b. JustifyingDerivative Rights ........... 635 c. Scope of the Right............................ 646 d. Conclusion....................................... 653 D. Summary: Allocative Efficiency and Copyright's Scope ....................................................................... 653 VII. COPYRIGHT AND ALLOCATIVE EFFICIENCY ........................ 654 1996] COPYRIGHT'S PARADIGM 485 I. INTRODUCTION For the past three centuries, defining the appropriate scope of copyright has entailed an examination of incentives and access.' Broadening the scope of copyright increases the incentive to produce works of authorship and results in a greater variety of such works. Broadening copyright's scope, however, also limits access to such works both generally, by increasing their price, and specifically, by limiting the material that others can use to create additional works. Given these competing considerations, defining copyright's proper scope has become a matter of balancing the benefits of broader protec- tion, in the form of increased incentive to produce such works, against 2 its costs, in the form of lost access to such works. Congress, 3 courts, 4 and commentators 5 have purported to rely on this incentives-access balance in defining some of copyright's most 1. See Feist Pubs.Inc. v. Rural Tele. Serv. Co., 499 U.S. 340, 349-50 (1991) C(The primary objective of copyright is not to reward the labors of authors, but '[t]o promote the Progress of Science and useful Arts.' Art. I, § 8, cl. 8.... To this end, copyright assures authors the right to their original expression, but encourages others to build freely upon the ideas and information conveyed by a work"); Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417, 429 (1984) (This limited grant [that is, copyright] is a means by which an important public purpose may be achieved. It is intended to motivate the creative activity of authors and inventors by the provision of a special reward, and to allow the public access to the products of their genius after the limited period of exclusive control has expired"). See also H.R. Rep. No. 60-2222, 60th Cong., 2d Sess. 7 (1909) ("In enacting a copyright law Congress must consider.., two questions: First, how much will the legislation stimulate the producer and so benefit the public; and, second, how much will the monopoly granted be detrimental to the public?'). 2. Perhaps the most famous expressions of this balance belong to two English Lords. In 1785, Lord Mansfield wrote: [W]e must take care to guard against two extremes equally prejudicial; the one, that men of ability, who have employed their time for the service of the community, may not be deprived of their just merits, and the reward of their ingenuity and labour; the other, that the world may not be deprived of improvements, nor the progress of the arts be retarded. Cary v. Longmen, 1 East 361 n.b, 102 Eng. Rep. 139 n.b (K.B. 1801) (quoting Lord Mansfield, C.J., in Sayre v. Moore (1785)). Nearly sixty years later, Lord Macaulay would repeat these sentiments in a legislative context: It is good that authors should be remunerated; and the least exceptionable way of remu- nerating them is by a monopoly. Yet monopoly is evil. For the sake of the good we must submit to the evil; but the evil ought not last a day longer than is necessary for the pur- pose of securing the good. Thomas Babington Macaulay, Copyright, in 1 The Speeches of Macaulay 235, 240-41 (1900) (speech given Feb. 5, 1841). 3. See, for example, H.R. Rep. No. 94-1476, 94th Cong., 2d Sess. 134 (Sept. 3, 1976) (discussing the incentives-access balance in determining copyright's appropriate term); H.R. Rep. No. 60-2222 at 7 (cited in note 1); Report of the Register of Copyrights on the General Revision of the U.S. Copyright Law 6 (1961). 4. See, for example, Sony, 464 U.S. at 429 (rhis task [of defining the scope of the limited monopoly that should be granted to authors] involves a difficult balance between the interests of VANDERBILT LAW REVIEW [Vol. 49:483 basic parameters, including the prerequisites for copyright protection, the general scope of protection, and specific limitations on protection. Despite its enduring and widespread popularity, however, the incen- tives-access paradigm is fundamentally flawed. Whether evaluated in terms of its own framework of costs and benefits, or more importantly, in terms of the actual costs and benefits that copyright imposes, the paradigm fails to define the appropriate boundaries for copyright protection. On its own terms, applying the paradigm's suggested balance for any given work leads to an internal paradox. As a general proposi- tion, a work's desirability will indicate both the need to ensure the work's creation and the need to secure its widespread distribution. The more desirable a work is, the greater the need to ensure the crea- tion of the work and the greater the need to secure its widespread dis- semination. If the need to ensure a work's creation suggests a broad copyright, while the need to secure its widespread dissemination sug- gests a narrow copyright, then incentive and access will always oppose each other with exactly equal force. As a result, if the incentives-access balance were the sole criterion for determining the proper degree of copyright protection, it would provide an indeterminate answer as to how much protection copyright should provide. authors and inventors in the control and exploitation of their writings and discoveries on the one hand, and society's competing interest in the free flow of ideas, information, and commerce on the other hand"); Wildlife Express Corp. v. Carol Wright Sales, Inc., 18 F.3d 502, 507 (7th Cir. 1994) (balancing the authors' rights to their original expression with the need to