Beyond fair use

Cornell Law Review

Volumn 96, Issue 1, 2010, Pages 91-137

  Parchomovsky, Gideon ^a,b   Weiser, Philip J ^c,d  

^a UNIVERSITY OF PENNSYLVANIA   (United States)

^b BAR ILAN UNIVERSITY   (Israel)

^c US Department of Justice   (United States)

^d UNIVERSITY OF COLORADO   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 78650135483     PISSN: 00108847     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Review

References (278)

1. Iowa State Univ. Research Found., Inc. v. Am. Broad. Cos., 621 F.2d 57, 60 (2d Cir. 1980).
2. See James Gibson, Risk Aversion and Rights Accretion in Intellectual Property Law, 116 YALE L.J. 882, 907 (2007).
3. See Gideon Parchomovsky & Kevin A. Goldman, Fair Use Harbors, 93 VA. L. REV. 1483, 1497-1500 (2007).
4. See, e.g., Wendy J. Gordon, Keynote: Fair Use: Threat or Threatened?, 55 CASE W. RES. L. REV. 903, 906 (2005) (discussing the popular conception "that fair use is dead");
5. see also Robert C. Denicola, Mostly Dead? Copyright Law in the New Millennium, 47 J. COPYRIGHT SOC'Y U.S.A. 193, 193-95 (2000) (discussing the death of copyright in the context of the predicted deaths of other areas of law);
6. Glynn S. Lunney, Jr., The Death of Copyright: Digital Technology, Private Copying, and the Digital Millennium Copyright Act, 87 VA. L. REV. 813, 814 (2001) (arguing that "[c]opyright is dead").
7. Pub. L. No. 105-304, 112 Stat. 2860 (1998) (codified as amended in scattered sections of 17 U.S.C).
8. See 17 U.S.C. § 1201(a) (2006).
9. See id. § 1201(b).
10. See infra note 52 and accompanying text.
11. For an example of how this limitation plays out in practice, consider the impact of Universal City Studios, Inc. v. Corky, 273 F.3d 429 (2d Cir. 2001). In that case, the United States Court of Appeals for the Second Circuit concluded that users must make do with fair uses of analog content where a TPM denies access to any digital fair use opportunities.
12. See id. at 459. Notably, because all content will eventually be available in digital form, the Corley doctrine is unsustainable over the long term and illustrates the potential for the narrowing of the fair use doctrine over time.
13. See Michael W. Carroll, Fixing Fair Use, 85 N.C. L. REV. 1087, 1090-91 (2007).
14. See Jason Mazzone, Administering Fair Use, 51 WM. & MARY L. REV. 395, 415-19 (2009).
15. See, e.g., ELEC. FRONTIER FOUND., UNINTENDED CONSEQUENCES: TEN YEARS UNDER THE DMCA 6-9 (2008), http://www.eff.org/files/DMCAUnintendedlO.pdf
16. [hereinafter EFF REPORT].
17. Julie E. Cohen, Copyright and the Jurisprudence of Self-Help, 13 BERKELEY TECH. L.J. 1089, 1141 (1998).
18. See Julie E. Cohen, Lochner in Cyberspace: The New Economic Orthodoxy of "Rights Management," 97 MICH. L. REV. 462, 531-32 (1998) ("I have argued that the law should not prohibit consumers from circumventing digital CMS to defend privileges traditionally afforded under the public law of copyright, and that federal copyright law and policy instead should be interpreted affirmatively to audiorize such conduct").
19. SeeYochai Benkler, Free as the Air to Common Use: First Amendment Constraints on Endosure of the Public Domain, 74 N.Y.U. L. REV. 354, 354-55, 412 (1999).
20. This requirement would, in effect, operate along the lines of nutrition productlabeling information: content providers would need to specify clearly and notoriously what limits and freedoms they offer to users with respect to fair use opportunities. Notably, rather than specify the precise scope and nature of the access privileges, Congress would leave the nature and extent of such privileges to the discretion of the various content owners or distributors of digital content.
21. "Web 2.0" refers to the development of tools and technologies that enable users to produce content that other users can aggregate and consume. The proliferation of blogs, the popularity of Facebook, and the emergence of Twitter are all examples of the significance of Web 2.0 technology.
22. For the classic definition of the term by the person who coined it, see Tim O'Reilly, What Is Web 2.0: Design Patterns and Business Models for the Next Generation of Software, O'REILLY (Sept. 30, 2005), http://oreilly.com/web2/ archive/what-is-web-20.html.
23. To be fair to Congress and the courts, the fair use doctrine's commitment to a vague standard and case-by-case decision making was intentional and grounded on the theory that clearer rules and principles would emerge over time.
24. See Parchomovsky & Goldman, supra note 3, at 1496.
25. Id.
26. Compare David Kravets, Universal Says DMCA Takedown Notice Can Ignore Fair Use,' WIRED (July 18, 2008, 1:46 PM), http://www.wired.com/direatievel/ 2008/07/universal-says (reporting Universal Music's position in litigation that DMCA permits it to require a website to remove a posting with its copyrighted material regardless of whether the posting was a fair use),
27. with EFF REPORT, supra note 12, at 14 ("As an increasing number of copyright works are wrapped in technological protection measures, it is likely that the DMCA's anti-circumvention provisions will be applied in further unforeseen contexts, hindering the legitimate activities of innovators, researchers, the press, and the public at large.").
28. - 17 U.S.C. § 1201 (2006).
29. Parchomovsky & Goldman, supra note 3, at 1489-90.
30. See, e.g., Gyles v. Wilcox, (1740) 26 Eng. Rep. 489 (Ch.) 490 (introducing the concept of "fair abridgment").
31. See 9 F. Cas. 342 (CCD. Mass. 1841) (No. 4901).
32. Id. at 348.
33. Parchomovsky & Goldman, supra note 3, at 1495;
34. see also Gideon Parchomovsky, Fair Use, Efficiency, and Corrective Justice, 3 LEGAL THEORY 347, 352-53 (1997) (discussing interpretive problems that arise from the text of the statute).
35. Parchomovsky Sc Goldman, supra note 3, at 1495.
36. - 17 U.S.C. § 107 (2006).
37. Parchomovsky & Goldman, supra note 3, at 1496.
38. H.R. Rep. No. 94-1476, at 65 (1976), reprinted in 1976 U.S.CCA.N. 5659, 5679.
39. See, e.g., Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 451 (1984) ("[A]lthough every commercial use of copyrighted material is presumptively an unfair exploitation[,] ... if it is for a noncommercial purpose, the likelihood [for harm] must be demonstrated [to support an infringement claim].").
40. See Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 579-85 (1994);
41. cf. Lotus Dev. Corp. v. Borland Int'l, Inc., 49 F.3d 807, 820 (1st Cir. 1995) (Boudin, J., concurring) (noting that Borland's commercial appeal lay not in its copying of Lotus's computer spreadsheet menu but in Borland's added features).
42. Sony, 464 U.S. at 448.
43. Parchomovsky & Goldman, supra note 3, at 1497-98.
44. Id. at 1498.
45. Id.
46. Id.
47. see also, e.g., R. Polk Wagner, Information Wants to Be Free: Intellectual Property and the Mythologies of Control, 103 COLUM. L. REV. 995, 1016-33 (2003) (explaining why rightsholders cannot fully appropriate copyrighted information and assessing what this fact implies for policymaking).
48. Parchomovsky & Goldman, supra note 3, at 1498.
49. Id.
50. - 17 U.S.C. §503 (2006).
51. Id. § 504(b).
52. Id. § 504(c) (2). If the infringement is not willful, a plaintiff can collect a maximum amount of $ 30,000.
53. Id. § 504(c)(1).
54. Parchomovsky & Goldman, supra note 3, at 1498.
55. See id.
56. Id. at 1499.
57. Id. at 1498-99;
58. see Gibson, supra note 2, at 887-95.
59. See A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1011-12 (9th Cir. 2001) (describing Napster's "peer-to-peer" Internet music file-sharing service).
60. See COMM. ON INTELLECTUAL PROP. RIGHTS & THE EMERGING INFO. INFRASTRUCTURE, NAT'L RESEARCH COUNCIL, THE DIGITAL DILEMMA: INTELLECTUAL PROPERTY IN THE INFORMATION AGE 1-2 (2000), available at http://www.nap.edu/ html/digital-dilemma/exec- summ.html.
61. Parchomovsky & Goldman, supra note 3, at 1521. In some cases, content owners implement extreme security measures to ensure diat individuals cannot copy their materials.
62. See, e.g., Joe Morgenstern, The Screens Have Eyes, WALL ST. J., Dec. 10, 2005, at P3 (describing movie studios' enhanced security efforts to prevent movie critics from pirating films prior to public release).
63. See 17 U.S.C. § 1201(a)(1), (a)(2), (b)(1) (2006).
64. See id. §1201;
65. cf. Sharon R. King, Consumers Still Seem Resistant to Some New High-End Electronics, NY. TIMES, Mar. 8, 1999, at Cl ("[C]opy-protection issues are keeping some studios from offering some of the hottest titles [in DVD format].").
66. Jerome H. Reichman et al., A Reverse Notice and Takedown Regime to Enable Public Interest Uses of Technically Protected Copyrighted Works, 22 BERKELEY TECH. L.J. 981, 1004 (2007) (noting that the lobbying clout of those concerned about DMCA's anticircumvention provisions was limited and that "deployment of TPMs to protect copyrighted works was in its early stages, so concerns about impediments to fair and other privileged uses may have seemed speculative").
67. There was also some hope that the Librarian of Congress's procedure for exceptions might address troublesome uses of TPMs. That hope, however, overlooked the limits of this procedure.
68. See id. at 1006-08.
69. - 273 F.3d 429, 435-37 (2d Cir. 2001).
70. Id. at 437.
71. Id.
72. See Id. at 438-39.
73. Id. at 439.
74. Id. (quotations omitted).
75. - 17 U.S.C § 1201(a)(2) (2006).
76. See Corley, 273 F.3d at 435.
77. See id. at 436.
78. Universal City Studios, Inc. v. Reimerdes, 111 F. Supp. 2d 294, 322 (S.D.N.Y. 2000).
79. To that end, the Second Circuit quoted the district court's reasoning: There was a time when copyright infringement could be dealt with quite adequately by focusing on the infringing act. If someone wished to make and sell high quality but unauthorized copies of a copyrighted book, for example, the infringer needed a printing press. The copyright holder, once aware of the appearance of infringing copies, usually was able to trace the copies up the chain of distribution, find and prosecute the infringer, and shut off the infringement at the source.
80. In principle, the digital world is very different. Once a decryption program like DeCSS is written, it quickly can be sent all over the world. Every recipient is capable not only of decrypting and perfecdy copying plaintiffs' copyrighted DVDs, but also of retransmitting perfect copies of DeCSS and thus enabling every recipient to do the same. They likewise are capable of transmitting perfect copies of the decrypted DVD. The process potentially is exponential rather than linear.
81. Coney, 273 F.3d at 452 (quoting Reimerdes, 111 F. Supp. 2d at 331).
82. Id at 459 (quoting Reimerdes, 111 F. Supp. 2d at 338 n.246).
83. Id.
84. See id.
85. For a discussion of the Ed Feiten case, see Cassandra Imfeld, Playing Fair with Fair Use? The Digital Millennium Copyright Act's Impact on Encryption Researchers and Academicians, 8 COMM. L. & POL'Y 111, 136-43 (2003).
86. See, e.g., 149 CONG. REC. E19-20 (daily ed. Jan. 8, 2003) (statement of Rep. Boucher) ("Given the breadth of the [DMCA] and its application so far, the fair use rights of the public at large clearly are at risk.") ;
87. Neil Weinstock Netanel, Locating Copyright Within the First Amendment Skein, 54 STAN. L. REV. 1, 80-81 (2001) (discussing how the DMCA "is highly vulnerable to facial First Amendment challenge");
88. see also Dan L. Burk & Julie E. Cohen, Fair Use Infrastructure for Rights Management Systems, 15 HARV. J.L. & TECH. 41, 52 (2001) ("In some instances of overreaching via technological controls, the Constitution may even demand a limited self-help right, or 'right to hack'....");
89. cf. Eldred v. Ashcroft, 537 U.S. 186, 219-20 (2003) (referring to the fair use doctrine as providing "built-in First Amendment accommodations").
90. - 149 CONG. REC. E19 (daily ed. Jan. 8, 2003) (statement of Rep. Boucher).
91. H.R. 1201, 109th Cong. (1st Sess. 2005).
92. Id. § 5(b)(1).
93. H.R. 1201, 110th Cong. §2(a) (1st Sess. 2007).
94. See Neil Weinstock Netanel, Temptations of the Walled Garden: Digital Rights Management and Mobile Phone Carriers, 6 J. ON TELECOMM. & HIGH TECH. L. 77, 91-92 (2007) (discussing how "courts have repeatedly found ways to hold that the DMCA does not apply to protect exclusivity in aftermarkets for consumer goods in which manufacturers have embedded computer code").
95. - 381 F.3d 1178 (Fed. Cir. 2004).
96. Id. at 1203-04.
97. Id. at 1197.
98. See id. at 1203-04.
99. Storage Tech. Corp. v. Custom Hardware Eng'g & Consulting, Inc., 421 F.3d 1307, 1318 (Fed. Cir. 2005).
100. See, e.g., Netanel, supra note 69, at 79-81.
101. See, e.g., EFF REPORT, supra note 12, at 1 ("[T]he DMCA grants to copyright owners die power to unilaterally eliminate the public's fair use rights.");
102. Burk & Cohen, supra note 69, at 50-51 (asserting that the DMCA effectively "allow[s] every copyright owner to custom-design its own version of copyright law").
103. See Gordon, supra note 4, at 906, 909 (describing the claim as "common" though ultimately concluding that "[w]hile fair use is in danger from the DMCA and developments in contract law, I am not yet prepared to pronounce fair use to be dead").
104. Cohen, supra note 13;
105. see also Burk & Cohen, supra note 69, at 52 ("In some instances of overreaching via technological controls, the Constitution may even demand a limited self-help right, or 'right to hack' ....").
106. See Storage Tech., 421 F.3d at 1318;
107. Chamberlain Grp., Inc. v. Skylink Techs., Inc., 381 F.3d 1178, 1203-04 (Fed. Cir. 2004);
108. see also Netanel, supra note 74, at 91-94 (summarizing the line of cases).
109. See Chamberlain, 381 F.3d at 1197.
110. See, e.g., Fred von Lohmann, Measuring the Digital Millennium Copyright Act Against the Darknet: Implications for the Regulation of Technological Protection Measures, 24 LOY. L.A. ENT. L. REV. 635, 641 (2004) ("[O]nce a sophisticated user has broken the 'digital lock' and extracted the content, there is no 'speed bump' impeding subsequent unsophisticated users from gaining unauuiorized access.").
111. See Paul Ohm, The Myth of the Superuser: Fear, Risk, and Harm Online, 41 U.C. DAVIS L. REV. 1327,1330 (2008) ("Most Internet users are unsophisticated, exercising limited power and finding themselves restricted by technological constraints ....").
112. See Reichman et al., supra note 52, at 987, 1032-33.
113. See 17 U.S.C. §512 (2006).
114. See Reichman et al., supra note 52, at 1033.
115. See id. at 1037 n.290.
116. See id.
117. See Wendy J. Gordon, Fair Use as Market Failure: A Structural and Economic Analysis of the Betamax Case and Its Predecessors, 82 COLUM. L. REV. 1600, 1618 (1982).
118. We acknowledge that, by the terms of the proposal, negotiation would constitute an additional safeguard and, in theory, leave users no worse off than the status quo ante in terms of their ability to implement fair uses without first seeking permission. But this suggestion ignores the very real-and perhaps likely-possibility that the introduction of such a procedure would spur a concomitant expectation by courts that users avail themselves of this option.
119. See, e.g., Princeton Univ. Press v. Mich. Document Servs., Inc., 99 F.3d 1381, 1384, 1387 (6th Cir. 1996) (finding that the availability of a clearing mechanism for obtaining permission to make photocopies used in course packets was a basis for showing harm under the fair use inquiry);
120. Am. Geophysical Union v. Texaco Inc., 60 F.3d 913, 930-31 (2d Cir. 1994) (reasoning that the existence of a workable market for corporate photocopying centers to pay a licensing fee to copyright holders militates against a finding of fair use).
121. Parchomovsky & Goldman, supra note 3, at 1496;
122. see also Parchomovsky, supra note 26, at 348 n.7 (demonstrating this point by reviewing case law).
123. Alternatively, users would be able to use materials only in cases where the right-sholder fully cooperates with the users' requests and instructs them on how to get around the relevant TPM.
124. See supra note 87 and accompanying text.
125. Carroll, supra note 10, at 1090.
126. See Mazzone, supra note 11.
127. Id. at 415-18.
128. Id. at 419-21.
129. Gene Quinn, USPTO Backlog: Patent Pendency Out of Control, IPWATCHDOG (Apr. 22, 2009, 7:43 PM), http://www.ipwatchdog.com/2009/04/22/uspto-backlog- patent-pendency-out-of-control/id=2848/.
130. Mark Lemley & Bhaven N. Sampat, Examiner Characteristics and the Patent Grant Rate 6 (John M. Olin Program in Law & Econ., Stanford Law Sch., Working Paper No. 369, 2009), available at http://ssrn.com/abstract=1329091.
131. For an argument that fair use should remain vague, see Dan L. Burk, Muddy Rules for Cyberspace, 21 CARDOZO L. REV. 121, 140 (1999) ("[F]air use appears to be employed in situations of high transaction costs, where a muddy entilement may be appropriate ... [because the vague] fair use [standard] allows courts to reallocate what the market cannot.");
132. Jason Scott Johnston, Bargaining Under Rules Versus Standards, 11 J.L. ECON. & ORG. 256, 257 (1995) (noting that, in some cases, "bargaining may be more efficient under a blurry balancing test than under a certain rule").
133. See supra text accompanying notes 54-67 & 74-79.
134. Digital Performance Right in Sound Recordings Act of 1995, Pub. L. No. 104-39, 109 Stat 336 (codified as amended in scattered sections of 17 U.S.C).
135. For a discussion of this battle,
136. see Mark A. Lemley & Philip J. Weiser, Should Property or Liability Rules Govern Information?, 85 TEX. L. REV. 783, 827-29 (2007).
137. see Pierre Lemieux, The Public Choice Revolution, REGULATION, Fall 2004, at 22, 22, 27. In a vivid illustration of how businesses can view government regulation as an aid to their ambitions, and not an impediment, consider what Richard Olney, a former railroad lawyer and Grover Cleveland's Attorney General, told his former clients when they asked him for assistance in killing off the newly created Interstate Commerce Commission: "The Commission ... is, or can be made, of great use to the railroads. It satisfies the popular clamor for a government supervision of the railroads, at the same time that that supervision is almost entirely nominal. Further, the older such a commission gets to be, the more inclined it will be found to take the business and railroad view of tilings. . . . The part of wisdom is not to destroy the Commission, but to utilize it."
138. Thomas Frank, Obama and 'Regulatory Capture,'"WALL ST. J., June 24, 2009, at A13. In this sense, public choice theory suggests a perspective on government regulation more nuanced than the idea of "regulatory capture," which often is presented as the core problem and is remedied by measures to prevent "the revolving door" between industry and government
139. See JESSICA LITMAN, DIGITAL COPYRIGHT 144-45 (2001). As to the DMCA, Litman concluded that its passage constituted "a lot of rent-seeking at the expense of new upstart industries and the public at large."
140. Id.
141. For her earlier study on how public choice pressures shape copyright policy, see generally Jessica D. Litman, Copyright, Compromise, and Legislative History, 72 CORNELL L. REV. 857 (1987).
142. See CARL SHAPIRO & HAL R. VARIAN, INFORMATION RULES: A STRATEGIC GUIDE TO THE NETWORK ECONOMY 85-92 (1999).
143. Tim Wu, Tolerated Use, 31 COLUM. J.L. & ARTS 617, 619 (2008). On Wu's account this form of a "tolerated use" may well be coexistent with "fair use," but "thanks to the inherent vagueness in the concept of fair use and the costs of litigation, the contours of fair use for casual infringement have not been-and may never be-well mapped out."
144. Id. at 620.
145. See, e.g., Mazzone, supra note 11, at 398-401.
146. Obviously, what constitutes reasonably cheap access is open to debate, but our principal focus is on terms of access that would not impede new creations.
147. For a discussion of the difficulty of gaining permission in the context of creating documentary films, see Nancy Ramsey, The Secret Cost of Documentaries, N.Y. TIMES, Oct. 16, 2005, at 13.
148. See, e.g., sources cited supra note 94.
149. Some commentators have deemed this inquiry the "market failure approach to fair use."
150. See, e.g., Glynn S. Lunney, Jr., Fair Use and Market Failure: Sony Revisited, 82 B.U. L. REV. 975, 1020 (2002).
151. See Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 579 (1994).
152. See Sega Enters. Ltd. v. Accolade, Inc., 977 F.2d 1510, 1526-28 (9th Cir. 1992).
153. See Perfect 10, Inc. v. Amazon.com, Inc., 487 F.3d 701, 721 (9th Cir. 2007).
154. One possibility is that some parties will grant access to digital content on reasonable terms and conditions so that others can reuse their creations in new ways that create value for the rightsholder.
155. See supra text accompanying note 110.
156. Another possibility is that the current state of confusion as to the appropriate fair use standard-let alone how it intersects with the DMCA-creates some incentives for parties to reach marketplace solutions.
157. See Robert P. Merges, Contracting into Liability Rules: Intellectual Property Rights and Collective Rights Organizations, 84 CALIF. L. REV. 1293, 1295-96 (1996);
158. see also Burk, supra note 104, at 139-40 (explaining that vague entitlement standards can encourage parties to negotiate a solution).
159. See, e.g., Infinity Broad. Corp. v. Kirkwood, 150 F.3d 104, 109 (2d Cir. 1998).
160. See Steve Jobs, Thoughts on Music, APPLE (Feb. 6, 2007), http://www.apple.com/hot news/thoughtsonmusic/.
161. See About iTunes Store Authorization and Deauthorization, APPLE, http://www.apple. com/support/itunes/store/ (follow "Authorization" link; then follow "Authorize or deauthorize your computer" link; then follow "About iTunes Store authorization and deauthorization" link) (last visited Aug. 28, 2010).
162. See iTunes Store: About Apple ID and Password, APPLE, http://support.apple.com/kb/ ht2204 (last modified Aug. 2, 2010).
163. Dan Moren, A Year After iTunes Plus, Apple Faces Stepped-Up Competition, MACWORLD (May 30, 2008, 2:48 PM), http://www.macworld.com/article/133667/2008/ 05/stateof drm.html.
164. iTunes Store: iTunes Plus Frequently Asked Questions (FAQ), APPLE, http://support.apple.com/kb/ht1711 (last modified June 25, 2010).
165. Greg Sandoval, Sources: Apple to Expand DRM-Free Music, Pricing, CNET NEWS (Jan. 5, 2009, 5:05 PM), http://news.cnet.com/8301-1023-3-10131761-93.html.
166. See Moren, supra note 123.
167. Expression Encoder Pro 4 FAQ, MICROSOFT http://www.microsoft.com/ expression/ products/Encoder-FAQ.aspx (last visited Aug. 28, 2010).
168. Note that Microsoft is phasing out support for the Windows Media Encoder and is replacing Windows Media Encoder with the "Expression Encoder," which provides additional functionality.
169. See Expression Encoder 4 Overview, MICROSOFT, http://www.microsoft.com/ expression/products/EncoderStandard-Overview.aspx (last visited Aug. 28, 2010).
170. See Windows Media DRM FAQ, MICROSOFT, http://www.microsoft.com/ windows/ windowsmedia/forpros/drm/faq.aspx (last updated Oct 2005).
171. Andrea Pruneda, Using Windows Media Encoder to Protect Content, MICROSOFT (Mar. 2003), http://www.microsoft.com/windows/windowsmedia/howto/ardcles/ Protect Content.aspx.
172. See, e.g., EZDRM DIGITAL RIGHTS MANAGEMENT, http://www.ezdrm.com/ (last visited Aug. 28, 2010).
173. See Windows Media DRM FAQ, supra note 128.
174. See id.
175. See generally Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 454-57 (1984) (finding that "time-shifting," or recording media for viewing at a different time than it was made available to the public, is a fair use).
176. About MediaKey, MEDIAKEY, http://www.mediakey.com/company.php (last visited Aug. 28, 2010).
177. Business Scenarios, MEDIAKEY, http://www.mediakey.com/business-scenarios. php (last visited Aug. 28, 2010).
178. See id.
179. Cf. Brief for Defendant at 5, BMG Music v. Gonzalez, 430 F.3d 888 (7th Cir. 2005) (No. 05-1314), (arguing that "sampling" music, or listening to it for evaluation purposes, has no significant, negative economic impact).
180. See generally Adobe Reader 7.0: Frequently Asked Questions for Digital Edition Users, ADOBE, 1 (2005), http://www.adobe.com/products/acrobat/pdfs/ 95003923-eBook-FAQ -UE.pdf.
181. See id. at 2.
182. id. at 5.
183. See Stephen Johnson, Our Ten Most Awaited Games of 2008, G4TV (Dec. 27, 2007), http://www.g4tv.com/thefeed/blog/post/681795/Our-Ten-Most-Awaited-Games- Of2008.htm. Maxis developed Spore, and Electronic Arts produced the video game.
184. See Stephen Kamizuru, EA Loosens Spore DRM Restrictions, DAILYTECH (Sept 22, 2008), http://www.dailytech.com/ EA+Loosens+SporetRM+Restrictions+Promises+Further +Change/article33014.htm.
185. Cf id. (stating that changes made to the DRM policy included "[t]he ability to deauthorize machines and move authorizations to new machines" (italicization omitted)).
186. See Customer Reviews: Spore, AMAZON.COM, http://www.amazon.com/Spore-Mac/ product-reviews/B000FKBCX4 (last visited Aug. 28, 2010).
187. Erich Maria Remarque, Dumbed Down Experience and Draconian DRM, AMAZON.COM (Sept 7, 2008), http://www.amazon.com/review/RK9RKIUMYF757/ (reviewing Spore).
188. This review repeatedly emphasizes Spore's "draconian DRM." As of August 28, 2010, "8,350 of 9,071 people" have found this 1-of-5-star review "helpful."
189. Id.
190. See Kamizuru, supra note 142.
191. Cf. id. ("[Electronic Arts] will continue to offer channels to request additional activations where warranted." (italicization omitted)).
192. See Andy Chalk, Far Cry 2 DRM Confirmed, THE ESCAPIST (Oct. 15, 2008, 3:39 PM), http://www.escapistmagazine.com/news/view/86838-Far-Cry-2-DRM- Confirmed;
193. Jay Watamaniuk, Official Bioware/EA Response to DRM Discussion, BIOWARE -MASS EFFECT 2 (May 9, 2008, 6:44 PM), http://masseffectbioware.com/forums/ viewtopic.html?topic=629 059&forum=125.
194. Ben Kuchera, EA's New Motto: Please Pirate Our Games ... Er, Storefronts, ARS TECHNICA (June 23, 2009, 11:07 PM), http://arstechnica.com/gaming/news/ 2009/06/eas-newmotto-please-pirate-our-games-er-storefronts.ars.
195. See 510 U.S. 569, 579 (1994).
196. See LAWRENCE LESSIG, REMIX: MAKING ART AND COMMERCE THRIVE IN THE HYBRID ECONOMY 68-83, 253-87 (2008).
197. See id. at 254-59.
198. See Dirk Smillie, AP's Curley Has Fightin ' Words for Google, FORBES.COM (Mar. 30, 2009, 6:35 PM), http://www.forbes.com/2009/04/30/associated-press- google-business-mediaapee.html.
199. See The Associated Press Terms and Conditions of Use, THE ASSOCIATED PRESS, http:// www.ap.org/pages/about/terms.html (last visited Aug. 28, 2010).
200. See Smillie, supra note 153.
201. See The Associated Press Terms and Conditions of Use, supra note 154.
202. David Bollier, Associated Press Tramples on Fair Use Rights, ON THE COMMONS (June 18, 2008), http://onthecommons.org/contentphp?id=2006.
203. See 17 U.S.C. §§ 107(3)-(4) (2006) (listing the "amount and substantiality" of what was taken from the work and the "effect of the use upon the potential market" as factors in the fair use analysis).
204. See discussion supra Part II A4.
205. Saul Hansell, The Associated Press to Set Guidelines for Using Its Articles in Blogs, N.Y. TIMES, June 16, 2008, at C7.
206. See id.
207. Michael Arrington, Here's Our New Policy on A.P. Stories: They're Banned, TECHCRUNCH (June 16, 2008), http://www.techcrunch.com/2008/06/16/heres-our-new- policy-on-apstories-theyre-banned/.
208. Hansell, supra note 160.
209. See id.
210. See NINTENDO, SUPER SMASH BROS. BRAWL: INSTRUCTION BOOKLET 25 (2008), available at http://www.nintendo.com/consumer/gameslist/manuals/Wii-Super-Smash- Brawl. pdf.
211. id.
212. E.g., BRAWL SNAPSHOTS, http://www.brawlsnapshots.com (last visited Aug. 28, 2010). Notably, many snapshots on this site are available under the Creative Commons Attribution-Share Alike 3.0 Unported License.
213. See Upload New Screenshots and Stages, BRAWL SNAPSHOTS, http://www.brawlsnapshots.com/upload (last visited Aug. 28, 2010).
214. See Captain Jesus, BRAWL SNAPSHOTS (Sept. 6, 2009, 9:42 AM), http://www.brawlsnap shots.com/snapshots/60779.
215. See LESSIG, supra note 151, at 68-83.
216. See SHAPIRO & VARIAN, supra note 110.
217. For a discussion of the importance of this development, see Robert P. Merges, A New Dynamism in the Public Domain, 71 U. CHI. L. REV. 183, 196-200 (2004).
218. See RightsLink, COPYRIGHT CLEARANCE CENTER, http://www.rightslink.com/ overview/ (last visited on Aug. 28, 2010).
219. Rightslink-Enabled Publishers, COPYRIGHT CLEARANCE CENTER, http://www.copyright. com/viewPage.do?pageCode=rlu5-n (last visited on Aug. 28 2010).
220. For a discussion of ASCAP and its significance, see Merges, supra note 118, at 1329-40 ("ASCAP, the American Society of Composers, Authors, and Publishers, . . . one of the largest performing rights societies[,] . . . acts as a central depository that allows members to control public performances of their works.").
221. See Mike O'Donnell, iCopyright's Advertiser-Supported Free Uses: What They Mean to Users, Publishers, and Advertisers, ICOPYRIGHT (Mar. 15, 2006), http://info.icopyright.com/ icopyrights-advertiser-supported-free-uses-what- they-mean-to-users-publishers-andadvertisers.
222. We do not take our argument that far, but one commentator has argued that this incentive removes the need for any fair use doctrine in the digital world.
223. See Ben Fernandez, Note, Digital Content Protection and Fair Use: What's the Use?, 3 J. ON TELECOMM. & HIGH TECH. L. 425, 451 (2005) ("In sum, 'fair use' in the digital world will mean an artificially created set of rights, whereas the 'fair use' of the analog world arose out of necessity.").
224. See Timothy K. Armstrong, Digital Rights Management and the Process of Fair Use, 20 HARV. J.L. & TECH. 49, 109 (2006) ("Perhaps the single most important precondition for the adoption of fair use-friendly DRM is neither legal nor technological, but cultural. The emergence of a public consensus that DRM should protect fair use, and that a technological lockdown of creative works is no longer acceptable, will do much to spur reform.").
225. Coordinated action to curb competition violates the antitrust laws and therefore runs the risk of heavy penalties when it results from an "agreement"-as opposed to merely conscious parallel conduct.
226. See, e.g., Bell Atl. Corp. v. Twombly, 550 U.S. 544, 553-54 (2007).
227. Compare Yuval Feldman & Janice Nadler, The Law and Norms of File Sharing, 43 SAN DIEGO L. REV. 577 (2006)
228. (discussing how public legal sanctions can affect social norms and deter violations), with Ben Depoorter & Sven Vanneste, Norms and Enforcement: The Case Against Copyright Litigation, 84 OR. L. REV. 1127, 1157-58 (2005) ("[P]ushing hard against the existing norms of [experienced] users backfires and emboldens the preexisting anticopyright norms that enforcement intends to combat").
229. See CREATIVE COMMONS, http://creativecommons.org (last visited Aug. 28, 2010);
230. OPEN SOURCE INITIATIVE, http://www.opensource.org (last visited Aug. 28. 2010).
231. See generally Omri Ben-Shahar & John A.E. Pottow, On The Stickiness of Default Rules, 33 FLA. ST. U. L. REV. 651 (2006).
232. Merges, supra note 171, at 184.
233. See generally RICHARD H. THALER & CASS R. SUNSTEIN, NUDGE: IMPROVING DECISIONS ABOUT HEALTH, WEALTH, AND HAPPINESS (Penguin Books rev. ed. 2009) (2008).
234. This aspect of our proposal resembles a suggestion made by Tim Wu, who called on copyright owners to publicize a list of uses for which they will not bring infringement suits.
235. SeeWu, supra note 111, at 633-34.
236. A principal difference between his proposal and ours, of course, is that our scheme is mandatory and involves a regulatory regime superintended by the FTC
237. The need for such a mandated disclosure regime reflects the fact that a famous theoretical conjecture about product disclosures-that all firms will disclose the quality of their product, even if it is unfavorable in some fashion, because of an "unraveling" effect whereby firms will make such disclosures to avoid being perceived as providing a lower quality product than they really do-does not actually bear out in practice.
238. See Oliver Board, Competition and Disclosure, 57 J. INDUS. ECON. 197, 198 (2009) ("[I]t seems clear that full disclosure is not forthcoming in practice [absent governmental regulation].").
239. See supra Part II.
240. See THALER & SUNSTEIN, supra note 183, at 43-44, 103-17.
241. See Carl Shapiro, Will E-Commerce Erode Liberty?, HARV. BUS. REV., May-June 2000, at 189, 198-99 (reviewing LAWRENCE LESSIG, CODE AND OTHER LAWS OF CYBERSPACE (1999)).
242. See generally Steven Hetcher, The FTC as Internet Privacy Norm Entrepreneur, 53 VAND. L. REV. 2041 (2000).
243. PHILIP J. WEISER, EXPLORING SELF REGULATORY STRATEGIES FOR NETWORK MANAGEMENT: FLATIRONS SUMMIT ON INFORMATION POLICY 23 (2008), available at http://www. silicon-flatirons.org/documents/publications/summits/ WeiserNetworkManagement pdf.
244. See 15 U.S.C. §§ 6801-6809 (2006).
245. As Peter Swire explained, this is the critical value of the Gramm-Leach-Bliley Act's privacy regime.
246. See Peter P. Swire, The Surprising Virtues of the New Financial Privacy Law, 86 MINN. L. REV. 1263, 1264-65 (2002).
247. See, e.g., Timothy J. Muris, The Federal Trade Commission and the Future Development of U.S. Consumer Protection Policy 42-44 (Law & Econ. Research Paper Series, George Mason Univ. Sch. of Law., Paper No. 04-19, 2004), available at http://www.law.gmu.edu/assets/ files/publications/working-papers/04-19.pdf.
248. Louise Story, F.T.C. Takes a Look at Web Marketing, N.Y. TIMES, NOV. 2, 2007, at C8.
249. This model is what the Federal Communications Commission (FCC) used in implementing the "broadcast flag" regime, which requires companies accessing over-the-air digital transmissions to adopt a technology reasonably likely to protect the relevant digital content.
250. See JONATHAN E. NUECHTERLEIN & PHIUP J. WEISER, DIGITAL CROSSROADS: AMERICAN TELECOMMUNICATIONS POLICY IN THE INTERNET AGE 403-05 (2005).
251. The D.C. Circuit later invalidated ths regime on the ground that the FCC lacked authority to mandate this requirement.
252. See Am. Library Ass'n v. FCC, 406 F.3d 689, 704-05 (D.C. Cir. 2005).
253. At present, developers of digital-rights management systems continue to ask different questions with considerable debate on what are the right questions.
254. See, e.g., Fred von Lohmann, Elec. Frontier Found., Reconciling DRM and Fair Use: Preserving Future Fair Uses? 1 (Apr. 2002) (abstract available at http://www.cfp2002.org/fairuse/lohmann.pdf) (arguing that developers should ask not "'tell me what fair use requires, and I'll built it in' but rather 'how can I build something that permits a variety of as-yet unknown uses, so that
255. Nate Anderson, FTC: We'll "Come Calling" About Deceptive DRM, ARS TECHNICA (Mar. 35, 2009, 4:15 PM), http://arstechnica.com/tech-policy/news/ 2009/03/ftc-well-come-calling-about-deceptive-drm.ars (quoting FTC Acting Deputy Director Mary Engle).
256. See id. ("While companies rarely lie about what a particular DRM scheme will do, plenty are willing to bury that information, knowing that consumers won't be happy about the limitations.").
257. See Pamela Samuelson & Jason Schultz, Should Copyright Owners Have to Give Notice of Their Use of Technical Protection Measures?, 6 J. ON TELECOMM. & HIGH TECH. L. 41, 52 (2007).
258. See Agreement Containing Consent Order, In re Sony BMG Music Entm't, File No. 062-3019, at 5-6 (F.T.C Jan. 30, 2007), available at http://www.ftc.gov/os/ caselist/06230 19/070130agreement0623019.pdf.
259. See, e.g., Samuelson & Schultz, supra note 199, at 69-73.
260. Ellen P. Goodman, Stealth Marketing and Editorial Integrity, 85 TEX. L. REV. 83, 139 (2006);
261. iee also ARCHON FUNG ET AL., ASH INST, FOR DEMOCRATIC GOVERNANCE & INNOVATION, HARVARD UNIV., THE POLITICAL ECONOMY OF TRANSPARENCY: WHAT MAKES DISCLOSURE POLICIES EFFECTIVE? 16-17 (2004), http://papers.ssrn.com/sol3/papers. cfm?abstract-id= 766287 (noting diat nutritional labeling requirements "helped [food companies] justify charging higher prices for healthier foods and helped them improve their corporate images").
262. See supra Part II.A.4.
263. See supra text accompanying notes 146-47.
264. For another example of the impact of nutritional labeling, consider the marketing of low fat salad dressings before the passage of the Nutritional Labeling and Education Act (NLEA):
265. Of those firms selling salad dressings with low fat content (6 grams per serving or lower), all voluntarily disclosed fat information on product labels; of those selling salad dressings with high fat content (13 grams per serving or more), only 9% chose to disclose. There can be litde doubt that fat content is a quality characteristic in this market Staff at the Food and Drug Administration and others predicted substantial changes in consumer behavior following the introduction of mandatory disclosure [,] . . . [and studies show] that the sales of high-fat salad dressings did indeed decline after the NLEA was implemented.
266. Board, supra note 185, at 198 (citation omitted).
267. For a discussion of the risks inherent in government standard setting, see NUECHTERLEIN & WEISER, supra note 195, at 239-60, 407-29.
268. This term appears to stem from Cass R. Sunstein, On the Expressive Function of Law, 144 U. PA. L. REV. 2021, 2030-31 (1996).
269. See also Hetcher, supra note 189, at 2046 (applying the term to the FTC in the context of Internet privacy policies).
270. See generally Michael K. Powell, Preserving Internet Freedom: Guiding Principles for the Industry, 3 J. ON TELECOMM. & HIGH TECH. L. 5 (2004).
271. The actual adoption of these principles took a somewhat convoluted path: the FCC originally adopted them as nonbinding principles but later enforced them in an adjudicative context. For a discussion of these events, see Philip J. Weiser, The Future of Internet Regulation, 43 U.C. DAVIS L. REV. 529, 561-69 (2009).
272. The European Union adopted a regime that made this threat explicit In particular, Article 6(4) of its Copyright Directive provided that, if content owners fail to provide for fair use opportunities, member states must take "appropriate measures" to ensure that rights holders enable lawful users of copyright works. Council Directive 01/29, art 6(4), 2001 O.J. (L 167) 10, 17 (EU). For a discussion of the merits of this model, see generally Guy Halfteck, Legislative Threats, 61 STAN. L. REV. 629 (2008).
273. See Walter Werner, The SEC as a Market Regulator, 70 VA. L. REV. 755, 764 (1984) (quotations omitted).
274. IAN AYRES & JOHN BRAITHWAITE, RESPONSIVE REGULATION: TRANSCENDING THE DEREGULATION DEBATE 6 (1992);
275. see also WOLFGANG SCHULZ SC THORSTEN HELD, HANS BREDOW INST, FOR MEDIA RESEARCH, GERMAN FED. COMM'R FOR CULTURAL & MEDIA AFFAIRS, REGULATED SELF-REGULATION AS A FORM OF MODERN GOVERNMENT B-9 (2001), available at http://www.humanrights.coe.int/Media/documents/interim-report-SElf-regulation. pdf ("Even representatives of industry bodies confirmed that self-regulation only works if there is a threat of state intervention, such as in the shape of industry standards in case of failure of a code or sanctions imposed on enterprises that have infringed a rule (the so-called 'heavy stick in the background').").
276. These competing proposals would include those discussed supra Part I.
277. One such possibility would be the imposition of a "penalty default" of an extremely lenient toleration of fair use on those firms that failed to adhere to the FTCs disclosure requirement. For a discussion of the role of penalty defaults in changing conduct for the better and in eliciting socially valuable information, see Ian Ayres & Robert Gertner, Filling Gaps in Incomplete Contracts: An Economic Theory of Default Rules, 99 YALE L.J. 87, 90-95 (1989). Such a response is used in other contexts, such as mineral leases, where owners who fail to file a statement of claim can surrender all preexisting legal rights as a result
278. See Texaco, Inc. v. Short, 454 U.S. 516, 529 (1982).