Introduction

Copyright Theory

Before plunging into the details of copyright law, some users may find it helpful to consider the general theories that underlie the copyright system. What’s the purpose of copyright? How you answer that question may affect, not merely your overall attitude toward this entire body of law, but also your views concerning how individual rules should be interpreted or modified.

Scholars have developed four theories of copyright law. They are not mutually exclusive. Indeed, courts and legislators frequently appeal simultaneously to two or more of the theories. But they grow out of different traditions in philosophy and political theory, and they have different implications for how the law should be shaped. So, at least for analytical purposes, it is helpful to keep them separate.

Fairness

The heart of the first theory is the principle that the creators of literature, art, and other original works deserve either to control their creations or to be rewarded for their efforts. In other words, creators have moral entitlements that the law should recognize and enforce. Put slightly differently, to deny legal protection to creators would be unfair.

There are several variants of this general approach. The most fully developed is the so-called “labor-desert” theory derived from the writings of the British philosopher, John Locke. In Chapter 5 of his Second Treatise of Government, Locke argued that a person who labors upon a plot of land that is owned “in common” acquires a natural right to that land – a right that a government, once it is formed, has a duty to “settle” and respect.

Much of the force of Locke’s argument derives from the intuitive appeal of the story upon which it is based. I come upon a tract of wild, uncultivated land that no one person yet owns. I work hard to remove the stones, trees, or prairie grass. I plow the land and plant seeds. I nurture the plants until they mature. Finally, I harvest the crops and use them to sustain myself and my family. Surely it would be wrong if an interloper, who has done nothing to make the land productive, could now oust me. Locke offered various more formal arguments – some of them grounded in Christian theology – to buttress this moral intuition, but the story itself gives Locke’s theory most of its enduring power.

An important group of scholars argue that Locke’s argument has even greater force when applied to works of the intellect (literature, art, and so forth) than it does when applied to land. The raw material used to generate a novel (paper and a few pencils) has little value; by far the most important input to the value of the finished novel is the novelist’s intellectual labor. The novelist’s moral right to control the novel is thus even stronger than the moral right of the farmer to the land he has cultivated. Moreover, unlike crops, novels do not rot. Thus, we need not worry that, by giving a property right to the novelist, we will cause socially valuable products to go to waste.

To be sure, scholars who find Locke’s argument persuasive encounter some difficulties when applying it to copyright law. For example, exactly what sorts of intellectual “labor” give rise to moral entitlements? Just sitting in front of a desk for hours attempting to write? Only highly “creative” labor? Does the fact that a particular novelist loves her work strengthen or weaken her moral rights? Is it possible that, by awarding an expansive set of legal rights to one novelist (for example, by forbidding others to write novels with closely similar plots) we may reduce the creative opportunities available to other potential novelists? If so, does that impair the moral claims of the first novelist? Scholars have wrestled with these and other complications – and will likely continue to do so in the future. (As we will see, the fairness theory is not unique in this regard. All of the copyright theories run into difficulties and complications.)

Another variant of the fairness approach is sometimes called “equity theory.” It is less elaborate but, according to social psychologists, enjoys even broader appeal. The core of equity theory is the notion that each contributor to a collective enterprise deserves a share of the fruits of that enterprise proportionate to the magnitude of his or her contribution. This has important implications for copyright law. For example, it would suggest that the law should be organized to ensure that each of the many people who help make a movie – from the stars to the “key grips” – get a share of the proceeds proportionate to her or her contribution. As we will see, it is not at all clear that the current law has this effect.

Welfare

The second of the four arguments grows out of the philosophic tradition of utilitarianism. The central principle of that tradition is that the law should be organized to maximize total human welfare. (Many ambiguities lurk in that simple statement, but we will put them to one side.) The way in which that principle is most often applied to copyright law is as follows:

Novels and other intellectual creations fall into a small but important category of products that economists refer to as “public goods.” The defining characteristics of public goods are that they are “nonrivalrous” (meaning that they can be enjoyed by an unlimited number of people) and “nonexcludable” (meaning that once they are made available to one consumer, it is very difficult to prevent other consumers from gaining access to them). These characteristics make public goods socially valuable, but they also create a danger: Potential producers of them will not produce them because they fear that they will be unable to earn any money. For example, a potential novelist may decide not to write a novel, because she anticipates that, once the first copy is sold, other publishers will make millions of additional copies and sell them for pennies, preventing the novelist from earning any money. Confronted with this hazard, the novelist may decide to become a banker, and the world will be forever deprived of the benefits of the novels she might have written. To maximize social welfare, the government must somehow create an incentive for the novelist to write novels. There are many ways that the government might do so, but one technique is to grant the novelist exclusive rights to reproduce and sell her novels. Protected against competition, she can charge enough money for her books to enable her to earn a living – and keep writing. That, in brief, is what copyright law does.

Seen from this perspective, copyright law has important social benefits but also a social cost. The reason is that, by empowering the novelist to raise the price of her books well above the low level that would have been generated through free competition, copyright law prevents readers who cannot afford the higher price from obtaining and reading the novel. The result is to reduce the welfare of those consumers and thus reduce, to some extent, total social welfare. The implication of this insight is that copyright protection should only be extended to types of intellectual products that would not be produced in the absence of the financial incentives that the copyright system provides.

If we applied this guideline conscientiously, which types of works would we include? It’s hard to say, because creators’ motives vary. But roughly speaking, we should be especially willing to extend copyright protection to kinds of products that are costly to produce, easy to copy, and benefit many people other than the immediate consumers. Movies and computer software might be examples. By contrast, we should at least hesitate before granting copyright protection to kinds of products that are inexpensive to produce or whose creators are especially sensitive to nonmonetary incentives (such as the desire for fame or the hope of being awarded tenure in a university) that do not depend on copyright law.

Personhood

The third theory is derived from the writings of Kant and Hegel. It is weaker in so-called “common law” legal systems (such as the United Kingdom, the United States, Canada, and Australia) than it is in so-called “civil law” legal systems (found in the countries of continental Europe and the countries of Africa and Latin America whose legal systems were originally patterned on those of continental Europe).

The central idea of this theory is that intellectual products are manifestations or extensions of the personalities of their creators. A painter or novelist defines herself in and through her art. The legal system, sensitive to this phenomenon, should grant artists the power to control uses or modifications of their creations. Why exactly? Either because injuries to those creations cause corresponding injuries to the creators – which the law should seek to prevent or redress. Or because giving creators this control is necessary to establish a general social environment in which artists can establish and maintain their identities.

This theory provides especially strong support for the aspects of copyright law known as “moral rights.” We will consider moral rights in detail in Module 4. As you will see, moral rights include a right to be given credit for things you have created (and not to be blamed for things you have not created) and a right to prevent the mutilation or destruction of your creations.

Culture

The fourth of the theories is as yet the least influential but seems to be gaining strength. Its key ideas are that human nature causes people to flourish more under some conditions than under others, and that social and political institutions should be organized to facilitate that flourishing.

What, more specifically, are the conditions or “functionings” that enable people to flourish? The lists offered by the philosophers and psychologists working in this tradition vary somewhat, but the following would meet with the approval of most:

Life
Health
Bodily integrity – protection against physical hazards and against physical and sexual assault
Autonomy – in the sense of the ability to choose freely one’s vocations and avocations
Competence – the ability to confront and solve problems
Engagement – active involvement in professional and leisure activity, as opposed to passive consumption of goods and services
Self-expression – the ability to speak one’s mind and express one’s creative impulses
Relationships – participation in freely chosen communities
Privacy – access to zones of intimacy in which relationships can be nurtured and identity developed

Properly shaped, copyright law can help foster a culture that enables most people to live lives of this sort. For example, it can help promote a rich artistic tradition, support a strong educational system open to everyone, encourage people to modify the cultural goods they consume, and (last but not least) increase access to knowledge through a strong and universally accessible library system. Poorly constructed, copyright law can impair all of these values -- curb artistic innovation, frustrate the efforts of teachers to design and deliver pedagogically sound materials, discourage user modifications of cultural goods, and make the operation of libraries more costly and difficult. A great deal thus depends upon how copyright law is formulated and applied.

Additional Resources

The literature on copyright theory is vast, but unfortunately relatively little of it is available online. The following is a reasonably representative set of materials. Many more sources can be found in the footnotes to these articles.

Overviews

William Fisher, "Theories of Intellectual Property," in Stephen Munzer, ed., New Essays in the Legal and Political Theory of Property (Cambridge University Press, 2001) (Chinese translation, by Haifeng Huang, in Chinese Intellectual Property Review 1 (2002): 1.)

Seanna Shiffrin, Intellectual Property, in A Companion to Contemporary Political Philosophy (edited by Robert Goodin, Philip Pettit, and Thomas Pogge, Blackwell, 2007).

Fairness Theory

Robert Merges, "Locke for the Masses: Property Rights and the Products of Collective Creativity (2009)</link>

Alfred C. Yen, "Restoring the Natural Law: Copyright as Labor and Possession," Ohio State Law Journal 51 (1990): 517

Welfare Theory

Peter Menell and Suzanne Scotchmer, "Intellectual Property," chapter in Handbook of Law and Economics, edited by A. Mitchell Polinsky and Steven Shavell (2007) (with S. Scotchmer)

William Landes and Richard Posner, The Economic Structure of Intellectual Property Law (Harvard University Press 2003)

Joseph E. Stiglitz, "Economic Foundations of Intellectual Property Rights" (2003)

Steven Shavell and Tanguy Van Ypersele, "Rewards versus Intellectual Property Rights" (1999)