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'Unfair use,' democracy and the Supreme Court

'Unfair use,' democracy and the Supreme Court
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Accidental matches can spark unintended revolutions.

In 1994, the Supreme Court decided Campbell v. Acuff-Rose Musicholding that the fair use exemption shielded commercial forms of creative parody from copyright infringement liability. The Court also suggested that parody was part of a broader category of “transformative uses” that may qualify as fair use so long as they do not significantly harm the copyright owner’s economic interests. This decision might have been read modestly as simply having extended fair use to commercial parody, consistent with the historical origins of the exemption in protecting “fair and reasonable criticism.”

Since Campbell, the Court has not issued another opinion on fair use. But the lower courts have issued many.

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Those courts have cultivated an expanded concept of transformative use that has detached fair use from its historical focus on facilitating public debate, that often omits meaningful inquiry into economic harm, and yields decisions that are arguably irreconcilable with the architecture of the copyright statute. While these judicial innovations have lowered the costs of accessing certain content, it has facilitated free-riding by digital platforms that can deploy the defense to neutralize infringement suits by authors, artists and other copyright owners. The result is a wealth transfer from individuals and entities that produce content to individuals and entities that replicate and distribute it.

On Wednesday, Oct. 7, the Supreme Court will hold oral arguments in the much-discussed case of Google LLC v. Oracle America, Inc. The case involves Google’s infringing use of Oracle’s copyright-protected application programming interfaces (APIs), to which Google naturally claims a fair use exemption even though the APIs were available to be licensed. Oracle claims billions of dollars in infringement damages.

This Silicon Valley showdown provides the Supreme Court with the opportunity to break its silence and revisit the lower courts’ remaking of the fair use exemption.

The court should consider that the expanded fair use exception has laudably expanded access to certain creative works. But the Court should also consider whether conversion of the fair use doctrine from a tailored exception to protect public debate to a broad-brush tool that courts can apply for a wide range of purposes is consistent with the intent of the copyright statute. If that is not the case, then such a significant adjustment to the property-rights underpinnings of creative and software markets is best addressed through a legislative process in which all stakeholders can have a meaningful voice, rather than a handful of litigations determined by a handful of judges on a case-specific basis.

In discussions of copyright policy, it has become virtually heretical to question whether any restraints should be placed on the fair use doctrine. This form of groupthink suffers from two weaknesses.

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First, fair use dogmatism ignores the fact that a large portion of infringing uses currently protected by the exception would still take place under the narrower understanding of the doctrine that had prevailed prior to the transformative use concept. Common objections that it is too costly to execute micro-licensing transactions overlook the sophisticated tracking and payment technologies available in digital markets and the collective licensing services that have long operated in pre-digital markets.

Additionally, copyright owners often have economic or other motivations to provide access at no charge, a form of voluntary fair use illustrated by the abundance of content that is made available under open-source or other relaxed terms of use. Examples include the APIs to the Windows operating system, which Microsoft distributed to developers at no charge, or Google’s open-source Android operating system, which is distributed to carriers and device manufacturers on a zero-price basis.

Second, fair use dogmatism ignores the fact that an important group of “fair users” consists of platform aggregators that generally face few constraints to paying market prices for content that is being copied and transmitted through their sites without payment to copyright owners. In turn, that content attracts millions of users, who deliver data that platforms sell to advertisers on the order of billions of dollars annually. Unwittingly, much of the federal judiciary has delivered a broad fair use exemption that enables ad-supported information platforms to appropriate content for which others have borne both the costs and risks. That does not seem so fair. 

While constraining the fair use exemption would increase platforms’ content acquisition costs from what is now often a price of zero, that is the social bargain behind any property rights system. That bargain supports markets that price intangible assets and, in doing so, delivers revenue streams to the individuals and entities that bear the costs and risks required to finance, produce and distribute content on a mass scale. This market-making effect promotes the historical purposes of the fair use exception. Information markets that lack secure copyright may have lots of “free stuff” but have weak incentives to gather and verify reliable information that supports constructive discussion of matters of public concern.

Unchecked application of the fair use exemption effectively delivers a subsidy to giveaway business models, paid for by individuals and entities that deliver the content inputs without which those models would not remain viable. This devaluation of creative capital is incompatible with a robust information ecosystem that balances the interests of those who produce content against the interests of those who transmit and consume it. In Google v. Oracle, the Court has an opportunity to restore this balance.

Jonathan M. Barnett is the Torrey H. Webb Professor of Law at the Gould School of Law, University of Southern California.