Mar 302015

butler150pxIn a recent white paper, Geoffrey Manne and Julian Morris argue that fair use is a “dangerous exception” that should not be “exported” to our trade partners through trade agreements the way other aspects of US copyright law (such as our lengthy term and protection for digital rights management) have been spread for years. Their salvo, grounded in a “law and economics” framework, is just the latest in what will surely be an ongoing series of attacks on fair use and similar flexible exceptions, a response to the growing appetite for balance in the global IP system. (Indeed, the industry-sponsored advocacy group Copyright Alliance posted its own ambivalent warning about “exporting fair use” just the other day.)

Fair use is an important part of the U.S. copyright system; the Supreme Court has called fair use part of the “traditional contours” of the law, and a vital “first amendment accommodation.” Fair use is one of the most distinctive features of US copyright law (most other basic US IP doctrines are roughly ‘harmonized’ with other countries by a constellation of treaties), and it enables one of this country’s most dynamic and dominant industries (the Internet and technology sectors), so one might think that fair use should be an essential ingredient in any attempt to export US values and facilitate US-style economic success. In any event, if fair use were a truly “dangerous” idea, its pernicious effects would be felt most dramatically here, where it permeates our copyright system. And yet here we are, a model of relative economic success and cultural flourishing.

Manne and Morris deploy a series of stratagems to overcome this natural inference and defend a “fair use for me but not for thee” approach to trade negotiations, but none of them quite work. For example, they argue that fair use might confuse and confound countries without the history of case law we have in the US, a point that has already been ably dispatched by Gwen Hinze, Peter Jaszi, and Matthew Sag. Those points are ancillary, though.

Their principal argument is that fair use in the US is primarily a corrective to failures in the market for licenses due to high transaction costs and other structural shortcomings, and that this corrective tool can only be responsibly deployed by “economically sophisticated” judges. Such wise jurists will know that “the scope of exceptions should be decreasing, not increasing, as technology lowers the costs of contracting.” The real threat, they posit, is that “the introduction of fair use exceptions may deter the development of better alternatives.” And “better alternatives,” in their view, means more licensing, e.g., using online exchanges. But, “[i]n jurisdictions with broad fair use exceptions, the incentive to develop such exchanges will be diminished.” (Indeed, in the US at least one leading government official has suggested that in thinking about ways to encourage “mass digitization,” “If [the Google Books decision, which found digitizing millions of books for a search engine to be fair use] is upheld, licensing-based approaches may be less promising.”)

In reality, market failure of the kind Manne and Morris describe has not been the most important factor in US fair use jurisprudence for nearly two decades. It held sway for a decade or so after Wendy Gordon’s influential article on the subject. However, recent scholarship shows that the hardcore market-centered story simply does not describe the way most judges currently think about fair use. Instead, since the Supreme Court’s decision in Campbell v. Acuff-Rose courts have focused on the “transformative” character of the use (i.e., whether the use is for a different purpose from the original) and ruled alleged market harm and available licensing inapposite in cases involving such new purposes. An online licensing hub wouldn’t have helped Bill Graham Archives, Patrick Cariou, Andrea Blanch, Perfect 10, the Authors Guild, A.V., or the Authors Guild. The difficulty of licensing gets an honorable mention in some of these cases, but transformative use is clearly in the driver’s seat.

In other words, US courts are already applying the fair use doctrine in exactly the way Manne and Morris fret that foreign judges may ‘mis-’apply it: to allow use of copyrighted works without a license even when a licensor is ready and willing to strike a deal. Perhaps it is neither the alleged complexity of the judicial task nor the supposed uncertainty of US precedent that most troubles the critics of “exporting fair use.” Perhaps they fear fair use itself, and the challenge it poses to a radical vision of absolute property rights in culture.