Articles by Tom W. Bell

Tom W. Bell teaches as a professor at Chapman University School of Law, in Orange County, California. He specializes in intellectual property and high-tech law, topics on which he has written a variety of articles. After earning his J.D. from the University of Chicago School of Law, Prof. Bell practiced law in Silicon Valley and Washington, D.C., served as Director of Telecommunications and Technology Studies at the Cato Institute, and joined the Chapman faculty in 1998. For fun, he surfs, plays guitar, and goofs around with his kids.

While rightly shuddering at specter of copyism, we should also recognize that the unauthorized use of copyrighted works can, if it does not go so far as to undercut authors’ incentives, increase social wealth. Consider, for instance, an impoverished entrepreneur relying on pirated software to start her business. Supposing that she could not afford to buy an authorized copy, and that her unauthorized use would not depress software production, her infringement would generate a welcome consumer surplus. The same would hold true of, say, someone who enjoys an infringing copy of a CD despite being unwilling to pay its retail price. As [the figure below] illustrates, those exceptions to the strict enforcement of copyright law could in theory benefit us all without discouraging the production and distribution of expressive works.

When Unauthorized Uses Increase Consumer Surplus

[The above figure] surely offers too sanguine a view of the effects of copyright infringement, however. Without the limitations imposed by copyright law, some consumers who would otherwise willingly pay for authorized uses might instead opt to save their money by joining the unpaying masses of unauthorized users. The resulting exodus, from respecting copyright to infringing it, would risk decreasing the revenues afforded by copyright, bringing about the policy tragedy portrayed [earlier].

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The Specter of Copyism

by on December 24, 2007 · 0 comments

On the standard economic view of copyrights, as on the economic view of other monopolies, average revenue equals demand. Those two measures trace one and the same line. Why? Because for most products and services, consumption closely matches supply at the market-clearing price. Sales reveal consumer demand and, in the case of copyright and other supposed monopolies, only one seller reaps revenue from those sales. Thus, for instance, might a utility’s sales show the aggregate consumer demand for electric power.

Even a so-called monopolist might face competition, however. The sole authorized seller of hard liquor might fail to capture the entire market of drinkers, for instance, losing some to the resale of stolen goods and others to moonshine. So, too, might an electrical utility suffer theft, competition from home-brewed power, and exit to gas appliances.

The caveats to “monopoly” prove especially strong in the case of copyright, which permits some unauthorized uses of protected works, such as fair uses, and fails to prevent many infringing uses. We might fairly say that the former category of uses, because copyright holders have no statutory power to bar them, do not really cut into the market share for a copyrighted work. Copyright holders cannot lose what never have, on that view. I here thus focus on infringing uses. Still, though, it bears noting that, whether due to permitted or forbidden uses, a copyright holder never commands all of the market for an expressive work.

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Creating a work can cost authors a lot, whereas copying a work costs others very little. Absent copyright, then, authors might find it discouragingly difficult to recoup the costs of creating fixed expressive works. Authors might then underproduce expressive works, and the public consequently suffer.

To avoid that policy tragedy, the Copyright Act empowers authors to control the reuse of their fixed expressive works. By selling those special statutory privileges, authors can offset their production costs. Thus does copyright arguably do what the common law allegedly cannot: ensure that the public enjoys an adequate supply of expressive works.

The benefits of copyright policy come at a price, however. Although it may cost a great deal to make the first copy of a fixed expression, it usually costs very little to make and distribute subsequent copies. Absent copyright protection, those works would constitute public goods. Copyright bars the public from freely enjoying the very goods labeled “public.” Instead, the Act vests copyright holders with the power to charge whatever the market will bear to escape liability for infringement. Though the monopoly rents that copyright holders thereby win allegedly provide a necessary stimulus to creativity, non-holders suffer the opportunity costs of losing cheap access to fixed expressive works. Most commentators thus understand copyright policy to aim at striking a balance between giving authors sufficient incentives to create expressive works and providing the public with adequate access to the works thereby created. [The figure below] illustrates that, the standard economic model of copyright policy.

Standard Economic Model of Copyright

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Locke on Copyright

by on December 20, 2007 · 0 comments

Some commentators have defended copyrights as natural rights under Locke’s labor-desert theory of property. On that view, copyright qualifies as a natural right for the same reason that tangible property does: Because an author mixes herself, through her creative effort, in her expressions. Ayn Rand, Herbert Spencer, and Lysander Spooner represent prominent proponents of that justification of copyright.

That facially plausible extension of Locke’s theory does not, however, withstand close scrutiny. His labor-desert justification of property gives an author clear title only to the particular tangible copy in which she fixes her expression–not to some intangible plat in the noumenal realm of ideas. Locke himself did not try to justify intangible property. He appears, in fact, to have viewed copyright as merely a policy tool for promoting the public good. Modern commentators who would venture so far beyond the boundaries of Locke’s thought and into the abstractions of intellectual property thus ought to leave his name behind.

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I earlier analogized copyright infringement to exceeding the speed limit. On reflection, though, I think that understates the case against infringement, and that it more resembles tax evasion than it does speeding. That far from establishes copyright as a natural right. To the contrary, it establishes it as a welfare right, granted by the State, based on the redistribution of wealth, and enjoyed by authors at our expense. Here is how I put it now, in a revised version of what I posted earlier:

When you infringe a copyright, you can admit to breaking the law without also admitting to violating a natural right. Thus does a good driver on an empty road speed with a clear conscience.

So, too, might a citizen drive dangerously close to the Tax Code’s limits. To misjudge, and blunder into tax evasion, could lead to loss of liberty and property. Citizens thus obey the Tax Code for good reason. Voluntary payment of excess taxes remains very rare, however; most people evidently pay their taxes under compulsion rather than out of joy. In that, the Tax Code resembles the Copyright Act. Both rely on positive legislation; both create regulatory regimes; both redistribute property (money in the one case, rights to throats, pens, and presses in the other). We grudgingly accept that the Tax Code and the Copyright Act create special beneficiaries of State power, the former by way of tax credits, the latter by way of exclusive rights. We might even celebrate it, reasoning that both the poor and authors merit our generosity. But we do not speak of a natural right to welfare. Nor should we speak of a natural right to copyright.

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To say that copyright does not protect any natural right is not to say that it lacks any moral justification. We naturally frown on unauthorized and misattributed copying. A singer who claims authorship of a song written by another commits a sort of fraud on his listeners. Most of the time, that sort of fraud does not rise to the level of materiality, and thus does not justify litigation. We typically do not rely to any substantial detriment on the accuracy of an expressive work’s description, after all. If we like a work, we like it, regardless of its source. Misdescriptions of authorship can trick us into buying the wrong expressions, however. You might, for instance, buy tickets to a Djelimady Tounkara concert only to find another, lesser guitarist on stage. That would naturally rouse your indignation.

We don’t need copyrights to vindicate that sort of wrong, however; common law and various state and federal statutes already afford many remedies for it. Consumers of misleadingly labeled goods or services can plead fraud under tort law and breach or promissory estoppel under contract law. The licensee of a materially misdescribed work would enjoy a strong contract law defense, one voiding any agreement alleged by the licensor publisher. An author who sees her work sold under another’s name would, as a wronged competitor, have standing to sue for unfair competition under state or federal law. The publisher of such an author might likewise enjoy legal and equitable remedies for passing off. The Federal Trade Commission and its many state counterparts can protect consumers and competitors of falsely labeled expressive works, while various federal and state executive officers can fight such wrongs with the criminal sanctions levied against the many guises of fraud.

Those legal tools give us ample ways to discourage materially harmful misdescriptions of expressive works. We don’t need copyright to satisfy our moral intuitions on that front, and most people’s condemnations against unauthorized copying don’t go much beyond harmful lying.

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Why would copyright holders choose to abandon their statutory rights and rely solely on their common law ones? A few “blockheaded” authors might do so non-monetary reasons, of course. Thanks to the combined effect of copyright misuse and § 505 of the Copyright Act, however, even crassly profit-maximizing copyright holders might find abandonment financially attractive.

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Dear Reader,

Hello from 2027! The future has been going great. I really enjoy it, and I think you’ll like it here, too.

Things have improved a lot since 2007. We’ve generally grown more healthy, wealthy, free, and (I daresay) happy. There remain rough spots, of course: Climate regulation, zombie flu, the still-unfinished meteorite prevention belt . . . and the future didn’t work out too well for everyone. Some wonderful people didn’t make it, sad to say, while others remain in suspension. As they say in aircar ads, “your mileage may vary. ” All in all, though, the future remains very bright.

I remember back when I lived in 2007. I looked forward to the future, and foresaw pretty good stuff. That prediction turned out ok, but I have to admit that I missed a lot of details! Who would have guessed the 2015 Constitutional Convention? That one really caught me by surprise.

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Copyright law regulates expression. Through it, copyright holders win the privilege of invoking state power to control how and what we communicate. The Copyright Act limits our freedom to reproduce, rework, publicly distribute, publicly perform, or publicly display protected works of authorship. In many cases, even when the Act does not utterly prohibit an expression, the Copyright Office sets its price. Copyright flows top-down, out of Washington, D.C., in detailed and non-negotiable terms.

Common law operates on very different principles. It grows bottom up, out of the decisions of manifold state courts, without relying on federal lawmakers, statutes, or administrative agencies. It follows a few simple principles, leaving details to particular cases, customary practices, and mutual consent. Common law thus offers a deregulatory alternative to copyright.

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Fair Use vs. Fared Use

by on November 27, 2007 · 2 comments

“Information wants to be free,” claim those who decry the overpowering grasp of copyright law. But they cannot mean what they say. Information wants nothing at all. The epigram speaks not to what information wants, but rather to what people want: people want information for free.

So restated, the catch-phrase still rings true. Who would not prefer to get information–that increasingly vital good–at no cost? But, alas, information never comes for free. We can only account for its costs as fully as possible, try our best to minimize them, and allocate them fairly.

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