Permission, Please: Copyright in the Digital Era

Internet Law Digital Copyright Introduction Legal Theory

The Legal Basis of Copyright

In the United States, the legal basis of copyright is laid out in Article I, Section 8 of the Constitution. It reads:

"[Congress shall have the power to] promote the progress of science and the useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and disoveries." 1

Unlike many of the enumerated powers laid out in this section of the Constitution (such as those granting Congress the power to collect levies, control coinage, declare war, and such), this clause comes with an explicitly stated purpose. It seems clear, therefore, that the Founding Fathers wanted to state the premise of copyright law unambiguously so that it would not be abused in the future.

By stating its purpose, the clause tells Congress how to mediate between the competing interests of copyright and the public domain as expressed in the previous section. Simply put, the Constitution makes it clear that each additional copyright law or restriction should be evaluated solely on whether it helps society by promoting innovation by granting exclusive rights for limited times. The Supreme Court noted this in Fox Films v. Doyal by writing, "The sole interest of the United States and the primary object in conferring the [copyright] monopoly lie in the general benefits derived by the public from the labors of authors." 2

Copyright legislation clearly should not be based on protecting authors' "exclusive rights" to the maximum extent possible, as many media companies would have it. Instead, it calls for a balance between publishers' rights to control works for a limited time versus the public need to utilize such works creatively. As a recent opinion by Judge John M. Walker of the Second Circuit Court of Appeals summarizes:

"The copyright law seeks to establish a delicate equilibrium. On the one hand, it affords protection to authors as an incentive to create, and on the other, it must appropriately limit the extent of that protection so as to avoid the effects of monpolistic stagnation." 3

Thus, one criteria for properly evaluating copyright law is to analyze its net effect on promoting innovation in society.

Fair Use

It is evident that if publishers could truly exercise all the powers granted to them via copyright, free speech on a variety of matters would essentially vanish under the specter of copyright litigation. Since publishers and authors own "exclusive" rights to their works under copyright law, they would be able to prevent the public from criticizing source material by invoking their exclusive right to reproduce material. Thus, the legal notion of "fair use" has been invoked to protect the public's right to "freely use portions of copyrighted material for purposes of commentary and criticism." 4

The legal notion of fair use is subject to interpretation by judges on a case-by-case basis; although such rights are protected under the law in the 1976 Copyright Act, there is no concrete list of all the fair use rights afforded to the public. In evaluating whether the use of source material constitutes fair use in a case, judges utilize a four-factor test:

1.  The purpose and character of the use - whether or not use of the source material "transforms" or adds something new to the quoted material
2. The nature of the copyrighted work - whether the work is an original act of fiction or factual in nature
3. The amount of substantiality of the work taken - how much of the work has been cited
4. The effect of the use on the market - how much use of the content deprives the author of potential revenues 5

Therefore, the notion of fair use is ambiguous. This presents problems since there is no single litmus test that determines whether new copyright legislation preserves fair use rights. On the other hand, the doctrine's ambiguity can be viewed "not as a bug, but as a crucial feature." 6 This is because it affords the public the ability to utilize new technologies in innovative ways until the courts can determine what constitutes fair use. For example, though media companies in the early 1980s claimed that the newly-invented VCR infringed on their copyrights by giving the public the ability to reproduce copyrighted material, the Supreme Court eventually ruled that the public's use of the device to record TV programs and movies constituted a fair use right.

As a result of the ambiguity of the fair use doctrine, a new market in selling and reproducing copyrighted works was created. Without the breathing room afforded by fair use, such a lucrative market would likely not have developed. Thus, another good measure of whether or not a copyright law is beneficial to innovation is whether it helps protect the public's rights to fairly use source material.

What is copyright? | Economic basis of copyright