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This is Lawrence Solum's legal theory weblog. Legal Theory Blog comments and reports on recent scholarship in jurisprudence, law and philosophy, law and economic theory, and theoretical work in substantive areas, such as constitutional law, cyberlaw, procedure, criminal law, intellectual property, torts, contracts, etc.

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Wednesday, March 31, 2004
 
Felten on Mark and Trace Digital Rights Management Check out Ed Felten's post on a supposedly new Mark & Trace DRM scheme. Here is an excerpt:
    Mark-and-trace DRM schemes try to put a unique, indelible mark on each legitimate copy of a work, so that any infringing copies found later can be traced, with the aid of the mark, back to the legitimate copy from which they originated. Such schemes have fallen out of favor recently, because of two problems. First, the mark must really be indelible. If an adversary can remove the mark, the resulting "scrubbed" copy can be redistributed with impunity. Nobody has figured out how to make marks that can't be removed from music or video. Past attempts to create indelible marks have failed miserably. A notable example is the SDMI watermarks that my colleagues and I showed were easily removed. Second, blaming the buyer of an original for all copies (and copies of copies, etc.) made from it just isn't practical. To see why, suppose Alice has a big collection of music on her laptop. Then her laptop is stolen, or somebody breaks into it electronically, and all of her songs end up on millions of computers all over the Net. What then? Do you take all of Alice's earthly possessions to compensate for the millions of infringements that occurred? (And if that's the policy, what sane person will buy music in the first place?) Or do you let Alice off the hook, and allow burglars to defeat your entire DRM scheme? Nobody has a plausible answer to this question; and the Fraunhofer people don't offer one.


 
Domain Name Expansion CNN reported that ICANN's latest round of domain name expansion is underway:
    Ten organizations submitted applications to sponsor new Internet domains, including ".mobi" for mobile services and ".xxx" for adult content, the group that oversees key aspects of the global network said Friday. Each organization paid $45,000 to apply for suffixes that are to be set aside for specific industries and interest groups. The deadline for applications was Tuesday.
We'll see! Don't hold your breath waiting for ICANN to grant new domains for commercial use--although it is possible that Paul Twomhy will provide leadership on this issue. The details are on the ICANN website. Karl Manheim and I have a paper on the expansion of the root, An Economic Analysis of Domain Name Policy, which advocates rapid expansion of the root (i.e. the creation of new Top Level Domains) through an auction mechanism. ICANN has opened a public comment period; details are available here.


 
WTO Action Henry Farrell over at Crooked Timber recently reported:
    The WTO has just handed down a preliminary ruling that Internet policy wonks like myself have been waiting for with considerable impatience. Last June, the Caribbean island state of Antigua and Barbuda took a WTO case against the US for restrictions of trade. The issue: various US laws that have been applied to stamp out Internet gambling, with unpleasant consequences for the Antiguan economy. Antigua has just won in this first stage of the process.
Very interesting!


 
Wednesday Calendar Just one talk today:
    At NYU's legal history series, Harold Forsythe, Professor of History, Fairfield University, presents Red River Blues: From Race War in Grant Parish, Louisiana to the Supreme Court.


 
Legal Theory Bookclub: Free Culture by Lawrence Lessig Part One Two Three Four Five Six Seven Eight
    Introduction On Saturday, Legal Theory Bookworm recommended Larry Lessig's new book Free Culture, which can be downloaded for free from Lessig's site FreeCulture.org (also available in hardcopy from Amazon and Barnes & Noble).
    This is the third of eight posts on Lessig's book--a sort of blogospheric book club. There is still plenty of time to catch up; Lessig's book is a great (and fast) read. You are invited to read along, and to send your comments on the book, my posts, or on the comments of other readers.
    Pirates Chapter Four is called “Pirates.” Lessig expresses the thesis of the chapter as follows:
      If “piracy” means using the creative property of others without their permission—if “if value, then right” is true—then the history of the content industry is a history of piracy. Every important sector of “big media” today—film, records, radio, and cable TV—was born of a kind of piracy so defined. The consistent story is how last generation’s pirates join this generation’s country club—until now.
    He begins with film, telling the story of motion-picture production companies that fled the east coast for California in order to avoid the Edison companies patents. A bit more complicated is the story of the sound-recording industry. Lessig points out that in the early days of the technology, it wasn’t clear whether sound-recordings infringed the copyrights of the owners of the sheet music. And of course, a battle over the content of the law ensued, pitting content proprietors against the purveyors of the new technology:
      The innovators who developed the technology to record other people’s works were “sponging upon the toil, the work, the talent, and genius of American composers,” and the “music publishing industry” was thereby “at the complete mercy of this one pirate.” As John Philip Sousa put it, in as direct a way as possible, “When they make money out of my pieces, I want a share of it.”
      These arguments have familiar echoes in the wars of our day. So, too, do the arguments on the other side. The innovators who developed the player piano argued that “it is perfectly demonstrable that the introduction of automatic music players has not deprived any composer of anything he had before their introduction.” Rather, the machines increased the sales of sheet music. In any case, the innovators argued, the job of Congress was “to consider first the interest of [the public], whom they represent, and whose servants they are.” “All talk about ‘theft,’” the general counsel of the American Graphophone Company wrote, “is the merest claptrap, for there exists no property in ideas musical, literary or artistic, except as defined by statute.”
    We know how the conflict was resolved—the Copyright Act was amended, extending protection to sound recordings—but this protection was limited in a way that is extremely important to Lessig’s argument against a permission-based system of intellectual property:
      But rather than simply granting the composer complete control over the right to make mechanical reproductions, Congress gave recording artists a right to record the music, at a price set by Congress, once the composer allowed it to be recorded once. This is the part of copyright law that makes cover songs possible. Once a composer authorizes a recording of his song, others are free to record the same song, so long as they pay the original composer a fee set by the law.
    And this precedent has been appropriated by a variety of scholars as the basis for proposals to set up a similar scheme for P2P. Neil Netanel, Jessica Litman, Bill Fisher and others have argued that the benefits of P2P can be preserved by establishing a tax on hardware (mp3 players and computers, for example) and then paying out the proceeds to the copyright owners based on their pro rata share of downloads (which would be sampled or monitored).
    Lessig continues his story about piracy, pointing out that in the early days of radio, royalties were not paid to the owners of copyrights in the sound recordings played over the air. Similarly, early cable television providers did not pay for the right to retransmit broadcase signals. Lessig wraps the argument together at the end of the Chapter:
      These separate stories sing a common theme. If “piracy” means using value from someone else’s creative property without permission from that creator—as it is increasingly described today19— then every industry affected by copyright today is the product and beneficiary of a certain kind of piracy. Film, records, radio, cable TV. . . . The list is long and could well be expanded. Every generation welcomes the pirates from the last. Every generation—until now.
    The set of stories in the piracy chapter certainly pumps a set of intuitions. “That’s not fair"—I think in response to the concluding paragraph—if piracy was allowed for film, recorded music, radio, and cable, then it ought to be allowed for P2P. But why? “Two wrongs don’t make a right.” We might use the same stories to pump quite a different intuition. Copyright owners have been wronged before—by the recording industry, the broadcast industry, and the cable television industry—and the time has come to put this pattern of piracy to an end! In a more consequentialist vein, we might ask Lessig the counterfactual question: “What would have happened if copyright had been respected (or extended at an earlier stage) in each of these prior eras of piracy?” I don’t know whether Lessig is claiming that our history of piracy has made us better off, but I am just a bit worried that he is implying this without offering evidence.
    Piracy Chapter Four was “Pirates,” and Chapter Five is “Piracy.” Lessig’s strategy in this chapter is to distinguish two forms of piracy, commercial and noncommercial. Commercial piracy, i.e,, the wholesale illegal duplication and sale of DVDs and CDs, is bad. Noncommercial piracy is a different story. Although Lessig consistently insists that commercial piracy is wrong, he can’t seem to resist dropping the arguments that undermine his own conclusion:
      We could, for example, remind ourselves that for the first one hundred years of the American Republic, America did not honor foreign copyrights.We were born, in this sense, a pirate nation. It might therefore seem hypocritical for us to insist so strongly that other developing nations treat as wrong what we, for the first hundred years of our existence, treated as right.
      That excuse isn’t terribly strong. Technically, our law did not ban the taking of foreign works. It explicitly limited itself to American works. Thus the American publishers who published foreign works without the permission of foreign authors were not violating any rule. The copy shops in Asia, by contrast, are violating Asian law. Asian law does protect foreign copyrights, and the actions of the copy shops violate that law. So the wrong of piracy that they engage in is not just a moral wrong, but a legal wrong, and not just an internationally legal wrong, but a locally legal wrong as well.
    Lessig doesn’t ask the next logical question. Even if foreign commercial copying is legally wrong, is it really morally wrong? LDC’s prohibit copying of U.S. works in large part because of the enormous economic pressure the U.S. can place on them—through the WTO and other mechanisms. The fact that LDCs have formally acquiesced to these pressures doesn’t really answer the double-standards argument—that the U.S. is asking LDCs to meet a standard that the U.S. itself did not meet. Moreover, Lessig’s history of piracy arguments from Chapter Four seem to based on a similar sort of double-standard argument.
    Lessig knocks down a few more arguments made to justify commercial piracy and then turns to P2P:
      Peer-to-peer sharing was made famous by Napster. But the inventors of the Napster technology had not made any major technological innovations. Like every great advance in innovation on the Internet (and, arguably, off the Internet as well), Shawn Fanning and crew had simply put together components that had been developed independently.
      The result was spontaneous combustion. Launched in July 1999, Napster amassed over 10 million users within nine months. After eighteen months, there were close to 80 million registered users of the system. Courts quickly shut Napster down, but other services emerged to take its place. (Kazaa is currently the most popular p2p service. It boasts over 100 million members.) These services’ systems are different architecturally, though not very different in function: Each enables users to make content available to any number of other users.With a p2p system, you can share your favorite songs with your best friend— or your 20,000 best friends.
    Lessig’s next move is to divide the world of P2P users into four categories:
      Type AThere are some who use sharing networks as substitutes for purchasing content.
      Type B There are some who use sharing networks to sample music before purchasing it.
      Type C There are many who use sharing networks to get access to copyrighted content that is no longer sold or that they would not have purchased because the transaction costs off the Net are too high.
      Type D Finally, there are many who use sharing networks to get access to content that is not copyrighted or that the copyright owner wants to give away.
    What struck me immediately about this list was Type C. Lessig lumps together two different groups: (i) There are many who use sharing networks to get access to copyrighted content that is no longer sold or (ii) that they would not have purchased because the transaction costs off the Net are too high. Given Type A—those who use P2P as a substitute for purchasing, Lessig’s categorization implies that Type C(ii) and Type A exhaust the possibilities not covered by Categories B, C(i), and D. But that isn’t the case. This part is tricky, so watch my argument carefully.
    Both Type A and Type C(ii) are defined counterfactually. Type A consists of those who would purchase off the internet, if they could not get the content for free over P2P. Type B consists of those would purchase off the internet, if the off-internet transaction costs were the same as the on-internet transaction costs. But this leaves another logical possibility, Type E (added to Lessig’s A through D) consists of those who would not purchase off or on the Internet even with zero transaction costs, so long as the price includes the royalty charged by the copyright owner. Roughly speaking, Type E consists of those who will not even pay $1 to download from iTunes(or perhaps 50¢, if half of the iTune price is transaction costs).

    Let’s go back to Lessig’s argument:
      From the perspective of economics, only type A sharing is clearly harmful. Type B sharing is illegal but plainly beneficial. Type C sharing is illegal, yet good for society (since more exposure to music is good) and harmless to the artist (since the work is not otherwise available). So how sharing matters on balance is a hard question to answer—and certainly much more difficult than the current rhetoric around the issue suggests.
    This is a very fast argument. Let’s try to upack it—step by step. Notice that in describing Type C in the argument, Lessig says “since the work is not otherwise available.” That statement is accurate for Type C(i), but not for Type C(ii). Type C(ii) works are available, but the P2P user is simply not willing to pay the transaction costs. Type E works (not included in Lessig’s typology) are available, but the P2P users would be unwilling to pay the monopoly rent (royalty), even if transactions costs were zero.
    Now things get really interesting. What should is the optimal policy for P2P users of Type A, Type C(ii), and Type E:
    • Type A consists of P2P users who would pay for the CD if a free copy were not available via P2P. The choice of legal regimes for P2P will not determine whether Type A users will actually get the content (the music). If Type 2 users are not allowed to use P2P, they will buy. Optimally, Type A users will not have
    • Type C(ii) users are those who would purchase but for transaction costs. The choice of legal regimes for P2P will determine whether Type C users actually consume music. If they must choose between paying and going without, they will go without.
    • Type E consists of P2P users who would not pay, even with zero transaction costs, so long as the owner of the copyright charges a profit-maximizing royalty. Like Type C(ii) users, if Type E users must choose between paying and going without, they will go without; unlike Type C(ii) users, Type E users would forgo content even if transaction costs were zero.
    Lessig’s essential point is that there is a dead welfare loss if we allocate the entitlement to the copyright holder as against Type C(ii) and Type E P2P users. Copyright owners do not benefit from holding the entitlement against users of either type, because these users won't pay for CDs. Type C(ii) and Type E users lose (if the entitlement is assigned to the copyright owner), because they forgo consumption of music that they would enjoy.
    So far, so good, but Lessig’s version of the argument is incomplete. I’ve been going along with Lessig and treating Types A, C(ii), E are distinct categories, but this is misleading. A more illuminating story would make it clear that we all are willing to pay different amounts for different content. If I am Type A with respect to a given song (or collection of songs), this means that the price I am willing to pay for the content exceeds the market price of the CD. If I am Type C(ii), then the price I am willing to pay is below the market price of the CD but above the zero transaction cost price. If I am Type E, then the price I am willing to pay is below the zero transaction cost royalty. We might add Type F, those who would only accept the file if they were paid to do so. Any given song (or content file, more generally) will likely have consumers of Type A, C(ii), E, and F.
    Price and Enforcement Discrimination The fact that different consumers are willing to pay different prices for any given good does not create a problem for the allocation of tangible resources. The market establishes a price for the tangible resource, and those who derive the greatest utility from the resource purchase it. (I am setting the problem of wealth effects to the side.) But with information (the pattern of bits that make up the MP3 file), there is no need to get the file to the consumers who will derive the greatest benefit. That’s because consumption of information is nonrivalrous. Everyone can have a copy. So, in the best of all possible worlds, everyone who derives any positive utility form the content would have a copy.
    But we do not live in the best of all possible worlds. Our world has the defect that price and enforcement discrimination on the basis of demand curves is not feasible. Boy, that was a mouthful, what do you mean? In an ideal world, copyright owners would sell copies to each potential buyer at a price the buyer was wiling to pay. If I am willing to pay $50 for a copy of the Furtwangler recording of Bruckner’s Seventh Symphony, I would be charged $50 or less. But if you were only willing to pay $1 for the same recording, your price would be $1 or less. That is, the owner of the copyright in the recording would be able to engage in price discrimination on the basis of our demand curves—our willingness to purchase a different prices.
    In the actual world, however, this kind of price discrimination is difficult or impossible for two reasons. First, the owner of the copyright doesn’t know how much you or I are willing to pay; so the owner doesn’t know to charge you a lower price than she charges mes. Second, even if the owner somehow did know how much we were willing to pay, it would be difficult for her to prevent you from selling your copy to me at a price that was higher than you were charged but lower than the price that I would be charged.
    The same point could be made about enforcement. In a better world, we could enforce the copyright laws against Type A P2P users, but not against Type C(ii) or E users. But the legal system, like the copyright owner, lacks the information as to which users are which. And even if the legal system had this information, it would be difficult to prevent Type E users from selling their free copies to Type A users.
    So the impossibility of price and enforcement discrimination means that we must choose between giving the copyright owner the entitlement (the right to prevent copying) against Types A, C(ii), and E P2P users or giving all P2P users the entitlement to copy.
    Another Wrinkle: What if there were no free P2P? There is one more wrinkle that we need to add to Lessig’s story. If P2P filesharing were effectively eliminated by some legal regime, then the economics of for-pay downloading services would change. Demand would increase, economies of scale would kick in, and hence we would expect the price per download to fall. In other words, some users who are Type C(ii) or E given the availability of free P2P filesharing would become Type A if lower cost for-pay downloading were available. This is not a criticism of Lessig’s argument, but simply a supplement to it.
    Balancing Now that we’ve filled in the gaps, we can see that Lessig’s version of the argument, although highly compressed, was essentially correct. Free P2P filesharing has both costs and benefits. When we ask ourselves how entitlements should be allocated, we need to look at both sides of ledger:
      [T]he question we should be asking about file sharing is how best to preserve its benefits while minimizing (to the extent possible) the wrongful harm it causes artists. The question is one of balance. The law should seek that balance, and that balance will be found only with time.
    Of course, we all know where Lessig will go next. He will argue that the benefits of filesharing exceed the costs. He begins with the argument that filesharing actually stimulates demand for CDs. Type B users sample new songs, and buy more music:
      We start to answer this question by focusing on the net harm, from the standpoint of the industry as a whole, that sharing networks cause. The “net harm” to the industry as a whole is the amount by which type A sharing exceeds type B. If the record companies sold more records through sampling than they lost through substitution, then sharing networks would actually benefit music companies on balance.
    Coincidentally, as I was thinking about this portion of Lessig’s argument, I came across a story in yesterday’s Washington Post:
      Internet music piracy has no negative effect on legitimate music sales, according to a study released today by two university researchers that contradicts the music industry's assertion that the illegal downloading of music online is taking a big bite out of its bottom line.
      Songs that were heavily downloaded showed no measurable drop in sales, the researchers found after tracking sales of 680 albums over the course of 17 weeks in the second half of 2002. Matching that data with activity on the OpenNap file-sharing network, they concluded that file sharing actually increases CD sales for hot albums that sell more than 600,000 copies. For every 150 downloads of a song from those albums, sales increase by a copy, the researchers found.
    Of course, the RIAA disputes this study, but Lessig provides another argument that the RIAA cannot dispute:
      In the same period that the RIAA estimates that 803 million CDs were sold, the RIAA estimates that 2.1 billion CDs were downloaded for free. Thus, although 2.6 times the total number of CDs sold were downloaded for free, sales revenue fell by just 6.7 percent.
    The RIAA does not argue (and could not plausibly argue) that without P2P, sales would have tripled from 1999 to 2001. So it looks like the gain to consumers from free P2P far exceeds lost sales. Of course, we have not yet taken into account the reduced incentive to invest in the production of new music, but the RIAA’s own figures establish a fairly massive welfare gain from illegal P2P copying. The decline in investment would have to be very significant to outweigh that gain.
    Would Out-of-Print Have Become Available Without P2P? Lessig identifies other benefits of P2P. Type C(i) involves P2P filesharing of music that is no longer for sale. Lessig argues that all of category C(i) should be counted as a benefit of P2P. I don’t think Lessig is right about this. Why not? Because in the absence of free P2P filesharing, it is highly likely that for-pay downloading services for out-of-print records and CD’s would have emerged. These services could not get off the ground given that they had to compete with free P2P. (Free is better than cheap.) But cheap for-pay downloads would likely have competed quite effectively with relatively expensive (and increasingly scarce) used copies of out-of-print records and CDs.
    Lessig reinforces his argument that Type C(i) filesharing is a benefit of P2P by asking this rhetorical question:
      Or put differently, if you think that type C sharing should be stopped, do you think that libraries and used book stores should be shut as well?
    This question is partially illuminating and partially misleading. Yes, it is true that Type C(i) filesharing is like the used book and record market in some respects, but there is an important difference. Gearing up record plants or printing presses involved relatively high fixed costs. So, the effective choice was between a used record or book and no copy at all. Gearing up a download site for out-of-print CD’s and records involves very low fixed costs—so low that people are willing to do it for no compensation at all. In the absence of free P2P, used CDs of out of print records would compete with low-cost downloads. So one might well believe that type C sharing should be stopped, but libraries and used book stores should remain open.
    Lessig then turned to Type D filesharing. Type D works are either in the public domain or the owner of the copyright has consented to free copying. In either case, the elimination of Type D copying should count as a cost of the legal prohibition of P2P filesharing.
    Why Not Legalization? When I arrive at this point in Lessig’s argument, I was thinking to myself that Lessig has made an effective case for legalization. Even with all my quibbles and qualifications, it seemed to me that two of Lessig’s arguments (if correct on the facts) were compelling. If P2P actually increases demand for CDs, then there is no reason to restrict P2P—unless it could be shown that the optimal level of investment in music production requires an even greater monopoly rent from music and sound recording copyrights than was afforded by the pre-P2P regimes. (And that seems doubtful.) And independently, if Lessig is correct, that the net welfare gains from free P2P to Type A, C(ii), and E users far exceeds the costs to copyright owners, then it seems highly likely that we should siimply legalize P2P. If both arguments are correct, then the case for legalization is overwhelming.
    But this does not seem to be the direction in which Lessig is heading. After making a compelling case for legalization, Lessig seems to be preparing the way for some sort of compromise solution. He ends the Chapter by noting that we have a “tradition” of compromise between the interests of copyright owners and consumers. When the courts ruled that cable television operators had no obligation to pay for free broadcast signals, Congress created a mandatory license scheme. When courts ruled that the music recording industry had no obligation to pay sheet music copyright owners a royalty, Congress created a mandatory licensing scheme.
    I am puzzled. Why does Lessig seem to back off from the radical implications of his arguments? I will need to read on to answer this question.
    Comments
      David McGowan (University of Minnesota) writes:
        [A] couple of comments on your blog of Larry Lessig's new book. 1. A lot of the dispute concerns why and how nonrivalrous consumption is ethically significant. On a Lockean view, it strengthens the case for strong IPRs by suggesting that the common is not diminished by those who draw on it. If one views property rights as justified only to prevent the harm of deprivation, however, then the fact of nonrivalrous consumption points strongly the other way. Is it yours because you made it, or mine because I do not deprive you of it when I take it? The anecdotal approach of the book makes it hard to analyze this issue as rigorously as one might like. One answer in the book--that US law has traditionally been utilitarian not Lockean--is not very satisfying, especially when you start asking the hard questions of utilitarianism. 2. F/OSS production rests squarely on copyright. Without copyright, there is no copyleft. On some issues, such as whether and when dynamic linking creates a derivative work, the FSF takes a fairly aggressive pro-author position. It is also not clear that large F/OSS projects are less hierarchical than commercial projects. 3. I know you know this, but there are always transaction costs, not just in p2p. The utilitarian question is whether the costs are so high that bargaining is less likely to approximate the optimal outcome than some other approach, such as compulsory licensing. If one believes Congress deals badly with IP issues, then pointing out that there are transaction costs (which are lower than they used to be, which is why F/OSS exists at all), may not make a strong comparative point insofar as institutional analysis is concerned.
      And over at Copyfight, Ernest Miller writes:
        Jeff Jarvis has an excellent idea for another use of Larry's work - the annotated version (Free debate). Those familiar with my writings know that I am a huge fan of annotations, which I also call recipe files or client-side remixes. Jeff asks,
          But wouldn't it be great to take a book and break it open at the spine for some back-and-forth? Why not turn a book into a conversation?
        Why not, indeed? Lessig would certainly favor such a concept, I believe. And if he didn't, too bad, the book is already licensed for such a thing. Poor arguments can be pointed out, but so can additional evidence on behalf of particular arguments. In a way, Solum's work is a step in this direction. Who will be the first to add Solum's book club to an edition of Lessig's book? (I don't see a license on your blog, Solum, is that okay with you?) Wouldn't it be great, also, to append all the reviews, negative and positive, as well as Lessig's promotional interviews to the book for easy future reference.
        I'd better get a license up! For now, I give permission for use of all posts on Lessig's book in any form so long as the original source of the posts is clearly identified.
      Joseph Savirimuthu at Cyberbug has a series of posts up: C.E. Petit (Scriviner's Error) writes:
        I'm getting very irritated at the childish refusal on _both_ sides of the fence to treat differing types of copyrighted material on their own terms, rather than under a monolithic regime that eventually serves nobody very well. As I've mentioned before, I agree that "life plus 70" is too long a term; I don't agree with the various "5" or "14" year proposals. My modest proposal is to essentially trash the WFH concept. One need only look at the actual identity of the parties in copyright infringement suits to see the problem. If we can't get rid of WFH, I instead propose splitting the baby: Allow works controlled by the natural-person creators to have a SUBSTANTIALLY longer period in copyright than those controlled by "investors." The difference between "life + 70" and "flat 95" is statistically insignificant, given the median life expectancy of authors of trade books from the moment of publication. Instead, I propose that the "super short" period be assigned to WFH, leaving the "natural persons" period pretty much alone. This allows continued compliance with international trends, while also allowing the US to have its expansive (and excessive) WFH system--but for only 14 years (or maybe 25 at the outside). In other words, since the IP Clause contemplates economic motivation for creative works, USE economic motivation as the tool to adjust the "kind" of works created to enhance the progress of the sciences and useful arts.
    Tomorrow I will continue tomorrow with Chapters Six, Seven, Eight, and Nine. The full schedule of posts is set out below.
    The Schedule


Tuesday, March 30, 2004
 
Legal Theory Bookclub: Free Culture by Lawrence Lessig Part One Two Three Four Five Six Seven Eight
    Introduction On Saturday, Legal Theory Bookworm recommended Larry Lessig's new book Free Culture, which can be downloaded for free from Lessig's site FreeCulture.org (also available in hardcopy from Amazon and Barnes & Noble).
    This is the second of eight posts on Lessig's book--a sort of blogospheric book club. There is still plenty of time to catch up; Lessig's book is a great (and fast) read. You are invited to read along, and to send your comments on the book, my posts, or on the comments of other readers.
    "Mere Copyists" Chapter Three of Free Culture is called "Mere Copyists," and it begins with a doozy of a story--George Eastman's development of the roll-film camera. Lessig's important point is about the legal environment that was essential for photography to flourish:
      What was required for this technology to flourish? Obviously, Eastman’s genius was an important part. But also important was the legal environment within which Eastman’s invention grew. For early in the history of photography, there was a series of judicial decisions that could well have changed the course of photography substantially. Courts were asked whether the photographer, amateur or professional, required permission before he could capture and print whatever image he wanted. Their answer was no.
    And we can see why this example is important to Lessig's argument against a regime that requires permission for copying in the P2P context. As I was reading this section of Free Culture, Ronald Coase and his famous theorem inevitably came to mind. The Coase Theorem predicts that in an environment of zero transaction costs, the initial allocation of entitlements will not affect how resources are used. In the photography case and in the case of P2P copying of music or video, the zero transaction costs assumption does not hold. And hence the choice of entitlement assigning rules may determine whether the efficient outcomes are reached. Photography is a very clever example for Lessig. Copynorms concerning photography are well established. The photographer may rightfully photograph people, places, and things without obtaining permission from the subject or owner. There are limitations, to be sure, but the basic norm is that copying is o.k., socially and legally.
    The Chapter meanders through a story about a school in San Francisco, but then it turns sharply, to the contrast between the way that 9/11 was covered by television as opposed to the Internet. Here is the key passage:
      Around the same time [as 9/11], a form of communication that has grown dramatically was just beginning to come into public consciousness: the Web-log, or blog. The blog is a kind of public diary, and within some cultures, such as in Japan, it functions very much like a diary. In those cultures, it records private facts in a public way—it’s a kind of electronic Jerry Springer, available anywhere in the world. But in the United States, blogs have taken on a very different character. There are some who use the space simply to talk about their private life. But there are many who use the space to engage in public discourse. Discussing matters of public import, criticizing others who are mistaken in their views, criticizing politicians about the decisions they make, offering solutions to problems we all see: blogs create the sense of a virtual public meeting, but one in which we don’t all hope to be there at the same time and in which conversations are not necessarily linked. The best of the blog entries are relatively short; they point directly to words used by others, criticizing with or adding to them. They are arguably the most important form of unchoreographed public discourse that we have.
    And here I am blogging about Lessig writing about blogging. The next section of the chapter is a riff on the virtues of blogging--familiar stuff, including the famous Trent Lott was brought down by the bloggers story. Lessig then moves on to what I think is the real point of the chapter--the open source software movement:
      FS/OSS is software whose source code is shared. Anyone can download the technology that makes a FS/OSS program run. And anyone eager to learn how a particular bit of FS/OSS technology works can tinker with the code. This opportunity creates a “completely new kind of learning platform,” as Brown describes. “As soon as you start doing that, you . . . unleash a free collage on the community, so that other people can start looking at your code, tinkering with it, trying it out, seeing if they can improve it.” Each effort is a kind of apprenticeship. “Open source becomes a major apprenticeship platform.” In this process, “the concrete things you tinker with are abstract. They are code.” Kids are “shifting to the ability to tinker in the abstract, and this tinkering is no longer an isolated activity that you’re doing in your garage. You are tinkering with a community platform. . . . You are tinkering with other people’s stuff. The more you tinker the more you improve.” The more you improve, the more you learn. This same thing happens with content, too. And it happens in the same collaborative way when that content is part of the Web. As Brown puts it, “the Web [is] the first medium that truly honors multiple forms of intelligence.” Earlier technologies, such as the typewriter or word processors, helped amplify text. But the Web amplifies much more than text. “The Web . . . says if you are musical, if you are artistic, if you are visual, if you are interested in film . . . [then] there is a lot you can start to do on this medium. [It] can now amplify and honor these multiple forms of intelligence.”
    The lesson of chapter two is that copying (and remixing) content can be a powerful engine of creativity. Lessig ends the chapter with a note of pessimism:
      We’re building a technology that takes the magic of Kodak, mixes moving images and sound, and adds a space for commentary and an opportunity to spread that creativity everywhere. But we’re building the law to close down that technology.
    What does Lessig have in mind? The Digital Millenium Copyright Act? I think so, but we will have to wait to find out.
    Catalogs The next chapter is called "Catalogs" and it begins with the compelling story of Jesse Jordan, a student at Rensselaer Polytechnic Institute, who developed a very effective search engine for the files on RPI's network. That search engine listed all the files on the searchable portions of the network--including, of course, mp3 (and other music) files--hundreds of thousands of them. Of course, the catalog of files also included lots of other stuff--about 75% other stuff, but nonetheless the RIAA was not amused and Jesse Jordan received a demand letter and the RIAA wanted all of his savings in exchange for dropping the suit against him.
    A great story! This is an example of the filesharing phenomenon where all of the equities and most of our moral intuitions are on the side of the defendant! Where will Lessig go with this?
    Chapter three was short and sweet. It certainly got my intuitions pumping wildly in favor of P2P users and against the RIAA.
    Comments from Hither and Yon
      Archie Mazmanian writes:
        You don't have to go to Japan. In the 1930s and early 1940s here in the U.S. there were the "Tijuana Bibles" involving parodies of U.S. comic strips in a pornographic manner: Dick Tracy, Moon Mullins, Gasoline Alley, etc, engaging in all sorts of things. Just Google Tijuana Bibles for background. I don't know if any copyright infringement actions were brought. A lot of us teenagers in those days learned alot from these "Bibles".
      Nick Morgan of DeNovo has a nice post. Here's an excerpt:
        I myself was a bit uneasy with these sweeping contrasts between "anarchy" and "control," but I find myself more tolerant of the ambiguity than Solum. The notions of freedom Lessig contrasts are certainly not (yet) rigorous, but I think they adequately pinpoint the basic concerns of the anti-IP movement. The freedom so far articulated is the freedom that makes progress possible--open and flowing speech, expression, self-determination, and invention. There's no need to bring down the barrier that makes this beer mine, and not yours, but Lessig is setting us up to be critical of barriers that we don't, in fact, generally want, and that haven't, in fact, been part of our cultural traditions of creativity. Barriers that his book has so far suggested arise from big money and corrupt politics are apparently barriers that interfere with freedom as we like it.
    Tomorrow I will continue tomorrow with Chapters Four and Five. The full schedule of posts is set out below.
    The Schedule


 
Tuesday Calendar
    At Vanderbilt, Lisa Bressman presents Judicial Review of Agency Inaction.
    At Columbia's IP series, David O. Carson, Esq., General Copyright Office, presents The Anti-Circumvention Provisions in 17 U.S.C. §1201: What is the appropriate balance between technological protection, and copyright exceptions and limitations?


Monday, March 29, 2004
 
Joel Feinberg Christopher Maloney writes:
    Friends, I regret to inform you that Regents Professor of Philosophy and Law (Emeritus) Joel Feinberg died today, March 29, in Tucson following a long illness. Professor Feinberg retired from the University of Arizona Philosophy Department in 1994 after 17 on the faculy. Prior to his appointment at Arizona, Professor Feinberg taught at Brown University, Princeton University, UCLA and Rockefeller University. He held the B.A., M.A. and Ph.D. from the University of Michigan. Professor Feinberg was internationally distinguished for his research in moral, social and legal philosophy. His major four volume work, *The Moral Limits of Criminal Law,* was published between 1984 and 1988. Professor Feinberg held many major fellowships during his career and lectured by invitation at universities around the world. He was an esteemed and highly successful teacher, and many of his students are now prominent scholars and professors at universities across the country. Professor Feinberg is survived by his wife, Betty, daughter, Melissa, and son, Ben. The family is planning a memorial to be held later this week on a date to be determined. Professor Jules Coleman of Yale University is presently composing a proper professional obituary for Professor Feinberg. You are welcomed to forward this message to others.
Feinberg was one of the greats of legal philosophy. His magnificient four-volume The Moral Limits of the Criminal Law is a true classic. I had a only a few chances to meet Feinberg, who was a gracious and quick-witted conversational partner. His work will live on.


 
Weekend Wrap Up On Saturday, the Download of the Week was What's So Bad About Legal Paternalism? (Or What's So Good About Autonomy?) by William Talbott. The Legal Theory Bookworm recommended Free Culture by Lawrence Lessig--and today an eight part session of the Legal Theory Bookclub on Lessig's book begins. Also on Saturday, the regular feature on the top downloads on SSRN. Sunday, the Legal Theory Calendar previewed this week's workshops, talks, and conferences, and the Legal Theory Lexicon entry was on Public and Private Goods.


 
Allen Buchanan's Justice, Legitimacy, and Self-Determination: Moral Foundations for International Law Is Out I recommended this important book by Buchanan months ago. There is a long story about a badly formatted edition being recalled by the publisher, but the real thing is out now. My thanks to Jacob Levy for the news!


 
Legal Theory Bookclub: Free Culture by Lawrence Lessig Part One Two Three Four Five Six Seven Eight
    Introduction On Saturday, Legal Theory Bookworm recommended Larry Lessig's new book Free Culture, which can be downloaded for free from Lessig's site FreeCulture.org (also available in hardcopy from Amazon and Barnes & Noble).
    This is the first of eight posts on Lessig's book--a sort of blogospheric book club. You are invited to read along, and to send your comments on the book, my posts, or on the comments of other readers.
    What Is Free Culture About? So what is Free Culture about? As I begin to read the book, I've got quite a few preconceptions. Lessig's work in the Eldred case, challening the Copyright Term Extension Act which retroactively extended most copyright terms for 20 years, was all about the effect of copyright extensions on the "public domain," works that are outside the protection of copyright. So I'm expecting a book about the value of the public domain. In the Preface, Lessig gives a hint about what is to come:
      [W]e come from a tradition of “free culture”—not“free” as in “free beer” (to borrow a phrase from the founder of the freesoftware movement), but “free” as in “free speech,” “free markets,” “free trade,” “free enterprise,” “free will,” and “free elections.” A free culture supports and protects creators and innovators. It does this directly by granting intellectual property rights. But it does so indirectly by limiting the reach of those rights, to guarantee that follow-on creators and innovators remain as free as possible from the control of the past. A free culture is not a culture without property, just as a free market is not a market in which everything is free. The opposite of a free culture is a “permission culture”—a culture in which creators get to create only with the permission of the powerful, or of creators from the past. (xiv)
    And he clarifies his position:
      [A]n argument for free culture stumbles on a confusion that is hard to avoid, and even harder to understand. A free culture is not a culture without property; it is not a culture in which artists don’t get paid. A culture without property, or in which creators can’t get paid, is anarchy, not freedom.Anarchy is not what I advance here.
      Instead, the free culture that I defend in this book is a balance between anarchy and control. A free culture, like a free market, is filled with property. It is filled with rules of property and contract that get enforced by the state. But just as a free market is perverted if its property becomes feudal, so too can a free culture be queered by extremism in the property rights that define it. That is what I fear about our culture today. It is against that extremism that this book is written.
    If you are a frequent reader of Legal Theory Blog, you know that I have a certain intellectual style. I have a strong affinity for intellectually rigorous, carefully formulated arguments. Lessig is a brilliant guy. I am a great admirer of his work on the relationship between Code and law--but Lessign's style is much looser, more free flowing, and less linear than I usually admire. As I start to read to Free Culture, I begin to get must a bit antsy. I can see where Lessig is going, but I am worried about precision. "Free will" and "free markets" aren't really free in the same sense. "A balance between anarchy and control"--that's a nice phrase, but what does it really mean? Of course, we are very early in the book and patience is a virtue. So I press on.
    The Introduction: "Cujus est solum ejus est usque ad coelum et ad inferos” A maxim of the common law went:
      "Cujus est solum ejus est usque ad coelum et ad inferos"--"To whomsoever the soil belongs, he owns also to the sky and to the depths."
    But this rule gave way in face of the new technology of air travel in U.S. v. Causby (1946), in which Justice Douglas wrote:
      [The] doctrine has no place in the modern world. The air is a public highway, as Congress has declared. Were that not true, every transcontinental flight would subject the operator to countless trespass suits. Common sense revolts at the idea.To recognize such private claims to the airspace would clog these highways, seriously interfere with their control and development in the public interest, and transfer into private ownership that to which only the public has a just claim.
      “Common sense revolts at the idea.”
    Common Sense Revolts at the Idea Lessig is telling stories that are designed to pump certain intuitions--to put us in the right frame of mind for what is to come. I am reading the book as I write these posts, so I am not sure what is coming next, but I have a suspicion. I think that the Internet is going to play a role vis a vis intellectual property law that is similar to the role that air travel played vis a vis traditional property law. "Common sense" is going to tell us that IP must give way to the new reality, if the public interest is to be served.
    Chapter One tells another story--that of Edwin Howard Armstrong--who invented FM radio. Lessig tells us about Armstrong's battle with RCA, which attempted to surpress Armstrong's superior technology in order to protect its market position in AM radio. Another good story, and again Lessig is making vivid a general point about law and technology. Stakeholders in the status quo will use the law--both fairly and unfairly--to protect their interests, even at the expense of progress that is manifestly in the public interest.
    Lessig ties some of these ideas together towards the end of the introduction:
      I have become increasingly amazed by the power of this idea of intellectual property and, more importantly, its power to disable critical thought by policy makers and citizens. There has never been a time in our history when more of our “culture” was as “owned” as it is now. And yet there has never been a time when the concentration of power to control the uses of culture has been as unquestioningly accepted as it is now. The puzzle is,Why? Is it because we have come to understand a truth about the value and importance of absolute property over ideas and culture? Is it because we have discovered that our tradition of rejecting such an absolute claim was wrong? Or is it because the idea of absolute property over ideas and culture benefits the RCAs of our time and fits our own unreflective intuitions?
    Piracy "Free Culture" is divided into Parts, and the first Part is titled "Piracy." In this introductory interlude, Lessig takes aim at the rhetoric of those who campaign against Peer-to-Peer (P2P) in order to protect copyright. Of course, we are familiar with the rhetorical moves. P2P users are thieves and pirates. But Lessig thinks that this rhetorica is built on an implausible assumption:
      Creative work has value; whenever I use, or take, or build upon the creative work of others, I am taking from them something of value.Whenever I take something of value from someone else, I should have their permission. The taking of something of value from someone else without permission is wrong. It is a form of piracy.
    Lessig then makes a crucial move. This move has been made before, but Lessig makes it deftly and clearly. Here it is:
      [There is] a distinction that the law no longer takes care to draw—the distinction between republishing someone’s work on the one hand and building upon or transforming that work on the other. Copyright law at its birth had only publishing as its concern; copyright law today regulates both. Before the technologies of the Internet, this conflation didn’t matter all that much. The technologies of publishing were expensive; that meant the vast majority of publishing was commercial. Commercial entities could bear the burden of the law—even the burden of the Byzantine complexity that copyright law has become. It was just one more expense of doing business. But with the birth of the Internet, this natural limit to the reach of the law has disappeared. The law controls not just the creativity of cotmmercial creators but effectively that of anyone.
    The cassette tape recorder empowered everyone with modest means to create their own new works--compilation tapes. The photocopy machine empower ordinary instructors to produce their own new works--course materials. P2P goes one giant step further--it empowers everyone to publish works in digital form. P2P publishing reaches the whole world, and the copies that are distributed can be recopied and redistributed with almost zero loss of fidelity to the original. This is truly a revoluationary change--one that upsets the basic premises upon which copyright law and copynorms are predicated.
    Creators Chapter One of "Free Culture" is titled "Creators." This chapter tells two, very compelling, stories about the value created by copying. The first story, familiar from Lessig's prior work, is about Walt Disney. Lessig argues that the early history of Disney's creative output was based on derivative works. Early Disney cartoons borrowed form, parodied, and mimiced a variety of works. Some were in the public domain (Snow White, others were relatively new works, still in copyright--(Steamboat Willie ripped Steamboat Bill, Jr., a Buster Keaton film).
    The second story is about doujinshi--a form of Japanese comic book in which a source comic is reworked and tranformed. Japanese copyright law is not so different than the copyright laws of the United States. So, quite naturally, Lessig asks, why don't the owners of the originals sue?
      It may well be that the market as a whole is better off if doujinshi are permitted rather than banned, but that doesn’t explain why individual copyright owners don’t sue nonetheless. If the law has no general exception for doujinshi, and indeed in some cases individual manga artists have sued doujinshi artists, why is there not a more general pattern of blocking this “free taking” by the doujinshi culture? I spent four wonderful months in Japan, and I asked this question as often as I could. Perhaps the best account in the end was offered by a friend from a major Japanese law firm. “We don’t have enough lawyers,” he told me one afternoon. There “just aren’t enough resources to prosecute cases like this.”
    Maybe. But I think that something else is going on. If just some of the producers of doujinshi comic books were sued or prosecuted, this might have a deterrent effect. You don't have to bring a suit against each and every infringer to enforce the law. I suspect that that the doujinshi phenomenon is better explained by copynorms, i.e. by the informal social attitudes that create expecations about what is ok and what is socially unacceptable. Doujinshi are permitted by Japanese copynorms. Because these norms are internalized, the question that Lessig asked, "Why don't you sue?," is not a question that even arises from within the culture.
    Copynorms are the sea we swim in when we think about copyright law. We don't see them, except when they begin to break down or change. Doujinshi are "ok;" they are within the accepted bounds of behavior. P2P filesharing is a bit different though. P2P did not creep up on us, alterning norms as it went. P2P exploded; it was a "big bang" transformation of copybehavior. In one segment of the culture, college dorms and teenage bedrooms, the copynorms went one way. "This is just sharing. It's like sharing compiliation cassette tapes." In the IP industry, the copynorms went another way. "This is just theft. It's like running an pirate CD pressing plant."

    Let's return to Lessig's theme:
      Creators here and everywhere are always and at all times building upon the creativity that went before and that surrounds them now. That building is always and everywhere at least partially done without permission and without compensating the original creator. No society, free or controlled, has ever demanded that every use be paid for or that permission for Walt Disney creativity must always be sought. Instead, every society has left a certain bit of its culture free for the taking—free societies more fully than unfree, perhaps, but all societies to some degree.
      The hard question is therefore not whether a culture is free. All cultures are free to some degree. The hard question instead is “How free is this culture?” How much, and how broadly, is the culture free for others to take and build upon? Is that freedom limited to party members? To members of the royal family? To the top ten corporations on the New York Stock Exchange? Or is that freedom spread broadly? To artists generally, whether affiliated with the Met or not? To musicians generally, whether white or not? To filmmakers generally, whether affiliated with a studio or not?
    So far, Free Culture is a great read and provocative. I still don't know how Lessig will tie this all together, but I am eager to find out.
    Tomorrow I will continue tomorrow with Chapters Two and Three. The full schedule of posts is set out below.
    The Schedule


 
Monday Calendar
    At the University of Chicago's law and philosophy series, Lauren Berlant, University of Chicago English Department, is presenting.
    At New York University, Eleanor Fox presents Taming Unruly Horses: The Laboratory of Global Antitrust. Here is a taste:
      There are now nearly 100 national systems of antitrust. There are many systems clashes. There are many circumstances of unnecessary and overlapping regulation. There are also many cases in which a global vision is more coherent than a nation-centered one.
      The antitrust community is relatively far advanced in grappling with the problems of coherence and sovereignty; yet numerous questions remain. This essay explores four specific antitrust problems of globalization. The first two are case-specific problems of external effects of national decision-making: the Empagran case, now pending before the U.S. Supreme Court, and the Microsoft case, decided by the European Commission on March 24, 2004. The third is less a problem than a description: how the world community is handling the proliferation of pre-merger filing laws; convergence has been championed by the business community and a process is under way. The fourth and final episode describes the plight of developing countries vis-à-vis an emerging world system, and identifies this problem as least amenable to a common understanding, least understood, and least under control.
      The paper draws some conclusions regarding methodologies likely to succeed, circumstances congenial to success, and indeed what is success.


 
Posner & Yoo on International Adjudication Eric A. Posner and John C. Yoo (University of Chicago Law School and University of California at Berkeley School of Law) have posted A Theory of International Adjudication on SSRN. Here is the abstract:
    Some international tribunals, such as the Iran-U.S. claims tribunal and the trade dispute panels set up under GATT, are dependent in the sense that the judges are appointed by the state parties for the purpose of resolving a particular dispute. If the judges do not please the state parties, they will not be used again. Other international tribunals, such as the International Court of Justice, the Inter-American Court of Human Rights, and the new International Criminal Court, are independent in the sense that the judges are appointed in advance of any particular dispute and serve fixed terms. The conventional wisdom, which is based mainly on the European experience, is that independent tribunals are more effective at resolving disputes than dependent tribunals are. We argue that the evidence does not support this view. We also argue that the evidence is more consistent with the contrary thesis: the most successful tribunals are dependent. However, selection effects and other methodological problems render a firm conclusion impossible. We support our argument through an examination of qualitative and quantitative evidence, and we argue that the European Court of Justice is not a good model for international tribunals because it owes its success to the high level of political and economic unification among European states. We conclude with pessimistic predictions about the International Criminal Court, the International Tribunal for the Law of the Sea, and the WTO dispute resolution mechanism, the newest international tribunals.


 
Hoofnagle on FTC Privacy Efforts Chris Jay Hoofnagle (Electronic Privacy Information Center) has posted Privacy Practices Below the Lowest Common Denominator: The Federal Trade Commission's Initial Application of Unfair and Deceptive Trade Practices Authority to Protect Consumer Privacy (1997-2000) on SSRN. Here is the abstract:
    In this paper, the author reviews the first six actions taken by the Federal Trade Commission (FTC) to safeguard consumers' privacy under the agency's authority to prosecute unfair or deceptive trade practices. Six conclusions can be made from these cases: First, the FTC has chosen to take enforcement actions only in cases with strong merits. Second, the protection of children's online activities is a priority of the FTC. Third, deception is the principal theory on which the FTC has relied to enforce violations of the FTCA against online businesses. Fourth, it is possible for the FTC to pursue a privacy claim under an unfairness theory. However, the unfairness theory is more likely to be successful when pursuing violations of children's privacy. Fifth, a strong showing of consumer harm is not required for an action based on unfairness. Merely misrepresenting privacy practices or violating a guarantee of privacy is sufficient to actuate agency action. Under the deception theory, there is no requirement to demonstrate harm. Last, monetary damages have not been assessed in FTC privacy actions against online businesses.


 
Vranas on Doris Peter Vranas (Iowa State, Philosophy) has posted a review of John Doris's Lack of Character. Here is a taste:
    This long-awaited book has already become a standard reference in the small but burgeoning field of “empirically informed ethics”. Doris begins by contrasting two views of human nature: (i) globalism, according to which people possess “robust” character traits (which help their possessors withstand situational pressures) and thus typically behave consistently across situations, and (ii) situationism, according to which people lack robust character traits and thus typically behave inconsistently across situations.1 Doris continues by defending two main empirical theses: (1) that situationism is true (and thus globalism false), and (2) that globalism is nevertheless widely accepted by philosophers and laypeople alike. Doris concludes by examining some ethical implications of his empirical theses, and defends in particular two normative theses: (3) that we should evaluate people not in terms of robust character traits but rather in terms of “local”, situation-specific traits, and (4) that moral education should aim not at inculcating robust virtues but rather at helping people bring about situations propitious to virtuous behavior. I agree with all four of the above theses, but I will argue that some of Doris’s arguments need improvement. I will deal only with arguments in defense of the thesis that situationism is true.
For a different perspective, see my post, Do Humans Have Character Traits?


Sunday, March 28, 2004
 
Legal Theory Calendar
    Monday, March 29
      At the University of Chicago's law and philosophy series, Lauren Berlant, University of Chicago English Department, is presenting.
      At New York University, Eleanor Fox is presenting.
    Tuesday, March 30
      At Vanderbilt, Lisa Bressman presents Judicial Review of Agency Inaction.
      At Columbia's IP series, David O. Carson, Esq., General Copyright Office, presents The Anti-Circumvention Provisions in 17 U.S.C. §1201: What is the appropriate balance between technological protection, and copyright exceptions and limitations?
    Wednesday, March 31
      At NYU's legal history series, Harold Forsythe, Professor of History, Fairfield University, presents Red River Blues: From Race War in Grant Parish, Louisiana to the Supreme Court.
    Thursday, April 1
      At Florida State University, Randy Barnett, Boston University Law School, presents Lawrence v. Texas and Justice Kennedy?s Libertarian Revolution and Chapter 10 of Restoring the Constitution.
      At the University of Texas, Brian Leiter's outstanding law and philosophy program is hosting John Gardner, the Professor of Jurisprudence at Oxford University. Gardner will deliver the Leon Green '15 Lecture in Jurisprudence and participate in the Berman/Sager Colloqium in Constitutional and Legal Theory. Today Gardner presents Backwards and Forwards with Tort Law.
      At UCLA's tax policy series, Steve Sheffrin, UC Davis Economics Department, presents Understanding Public Attitudes Toward Taxation: 1. Are Surveys of Taxpayers' Honesty Honest? 2. Can Brute Deterrence Backfire--Perceptions and Attitudes in Taxpayer Compliance. and 3. Perceptions of fairness in the crucible of tax policy.
      At Michigan's Olin series, Dean Lueck, Arizona, presents Property Law.
      At George Mason, Giuseppe Dari Mattiaci, Nancy 2 University and GMU School of Law, presents Voluntary Slavery.
      At Boston University, John Coffee is presenting.
    Friday, April 2
      At the University of San Diego, Adrian Vermeule presents The Judiciary Is a They, Not An It: Two Fallacies Of Interpretive Theory.
      At the University of San Diego, the Institute for Law and Philosophy is hosting a Roundtable on What Is Legal Interpretation. The participants include Dean Stanley Fish ? University of Illinois at Chicago, Dagfinn F?llesdal ? Stanford University, Department of Philosophy, Elizabeth Garrett, University of Southern California Law School, Jeffrey Goldsworthy, Monash University School of Law, Australia, Kent Greenawalt, Columbia University School of Law, Mark Greenberg, Princeton University Department of Philosophy, Provost Steven Knapp, The Johns Hopkins University, John Manning, Columbia University, School of Law, Matthew McCubbins, University of California, San Diego, Political Science Department, Walter Benn Michaels, University of Illinois, Chicago, Department of English, Michael Moore, University of Illinois College of Law, Dennis Patterson, Rutgers school of Law, Camden, Frederick Schauer, Harvard University, JFK School of Government, Scott Shapiro, Yale Law School, Walter Sinnott-Armstrong, Dartmouth College, Department of Philosophy, Adrian Vermuele, University of Chicago School of Law, Jeremy Waldron. Columbia University School of Law, Barry Weingast, Stanford University, Department of Political Science, and Keith Whittington, Princeton University, Department of Politics. Larry Alexander has outdone himself!
      John Gardner's visit to the University of Texas continues with the Leon Green '15 Lecture in Jurisprudence.


 
Legal Theory Lexicon: Public and Private Goods
    Introduction One of the most powerful ideas that legal theory borrows from economics is the idea of a "public good." Sooner or later law students learn that within the framework of contemporary neoclassical economics, the standard line is that public goods (e.g. national security) should be provided by government whereas private goods (automobiles) ought to be provided by markets. For legal theorists, the line between public and private goods tracks one of the important fault lines in the law--between the private law fields of property, contract, tort, and so forth and public law fields such as environmental law, administrative law, and constitutional law. This post provides a basic introduction to the economic distinction between public and private goods for law students (especially first year law students) with an interest in legal theory.
    It may be helpful to quickly preview the basic idea. So here goes:
    • Public goods have two characteristics--nonrivalrousness and nonexcludability. For example, consumption of national defense is nonrivalrous (my being protected by the U.S. armed forces doesn't diminish your protection). National defense is a nonexcludable good: the Army cannot say to Mexico, "Solum hasn't paid his national defense bill, "Go ahead and attack him."
    • Private goods are rivalrous and excludable. If I own a laptop computer, my use of it diminished your ability to use it; therefore, my consumption of the laptop rivals yours. Moreover, I can exclude you from the use of my laptop (by locking it up when I am not using it).
    We use markets to provide goods like laptops (that excludable and rivalrous), but government provides goods like national defense (that are nonexcludable and nonrivalrous).
    A Note on Terminology: "Public Goods" versus "Public Interest" versus "Public Resources." Before we go any further, let's make sure we agree about how we are using the phrase "public good." This is important because the same phrase is used for different purposes in different contexts. So let's stipulate to the following:
    • The phrase "public good" or "public goods" shall be used to refer to the economists’ idea of good that meets the criteria of nonrivalrousness and nonexcludability.
    • The phrases "public interest" or "common good" shall be used to refer to the idea of goods that benefit the public at large as distinguished from goods or interests that benefit a faction (or "special interest group").
    • The phrase "public resource" shall be used to refer to private goods that are owned by the government or held in trust for the public. National parks are indisputably public resources, but it may not be the case that they are public goods in the economic sense.
    We could use the phrase "public good" to refer to the public interest or to public resources, but for the purposes of this post, let's stipulate that "public good" shall be reserved for the economic sense of the phrase.
    The Criteria for Public Goods There are two criteria by which public goods and distinguished from private goods. A good is public only if it is both nonrivalrous and nonexcludable. A good is private only if it is both rivalrous and excludable. (We will deal with the mixed cases in just a bit.)
    "Rivalrousness" is a property of the consumption of a good. Consumption of a good is rivalrous if consumption by one individual X diminished the opportunity of other individuals, Y, Z, etc., to consume the good. Some goods are rivalrous because they are "used up." If I drink a glass of Heitz Martha's Vineyard, then you cannot drink that same glass of wine. If set off a firecracker, you cannot set off the same firecracker. Other goods are rivalrous because of crowding effects. If I am using the free internet terminal at the student lounge, then you cannot use the same time slice of the terminal--because only one person can sit in front of the screen at the same time.
    "Excludability" is also a property of consumption of a good. It is helpful to distinguish two forms of excludability: (1) excludability through self help, and (2) excludability through law. If I want to exclude you from my land, I can build a fence--the exclusion results from self help. But if I want to exclude you from copying a novel that I've written and I want to make the novel generally available for sale, self help will not work. (It would be ridiculously expensive to hire a guard to monitor each copy or every photocopy machine.) Government, however, can make unauthorized copying a criminal offense or actionable civil wrong, thereby creating exclusion through law.
    Markets and Government The conventional view is that markets should provide private goods and government should provide public goods. The case for market provision of private goods relies on the idea of Pareto efficiency. The weak Pareto Principle is the simple idea that if some action would make at least one person better off and no one worse off, then that action is good. If we have a private good, e.g. a widget, and a willing buyer and seller, then allowing the sale is Pareto efficient: the buyer prefers the widget to the money and the seller prefers the money to the widget. If we assume that the transaction has no external costs (harms to third parties), then allowing the transaction makes buyer and seller better off and hence is required by the weak Pareto principle.
    But when we come to public goods, markets simply don't work. Why not? Most simply, because if a good is nonexcludable, then no one will pay for it. Suppose someone goes into the business of cleaning the air with a pollution removal machine. I won't voluntarily pay for this service, because I will be able to breathe the air even if I don't pay. If a private firm offered to defend me against foreign invaders, I won't voluntarily sign on. My individual payment would have a negligible effect on the size of the armed force. If others pay, I don't need to. If others don't pay, then my payment won't do any good. Of course, you will recognize that I am describing the free rider problem, a form of the Prisoner's Dilemma. Because markets cannot provide public goods, governments should.
    As you might expect, the argument for government provision of public goods and market provision of private goods is controversial. Socialists argue that governments may do a better job of providing private goods, because government planning can create welfare benefits that cannot be realized by markets. Libertarian legal theorists argue that markets can provide most if not all private goods for various reasons, including arguments that nonexcludability can often be overcome by ingenious market solutions. I won't get into either the socialist or the libertarian critique of the argument for market provision of private goods and government provision of public goods, but you should know that these criticisms have been extensively developed.
    The Expanded Typology: Public, Private, Toll, and Common Pool Goods So far, we have been assuming that excludability and rivalrousness go together and hence that there are only two categories, public goods and private goods. In fact, it is possible to have a good that is rivalrous but nonexcludable or one that is nonrivalrous but excludable. So there are four categories, not two:
      1. Public goods are nonrivalrous and nonexcludable.
      2. Private goods are rivalrous and excludable.
      3. Toll goods are nonrivalrous and excludable.
      4. Common pool goods are rivalrous and nonexcludable.
    Table One shows the four categories as a two-by-two matrix:
    Table One: Public, Private, Common Pool, Toll, and Club Goods.
    __________________________Excludable___________Nonexcludable___ _______________________________________________________________ ____________________|____________________|____________________| ____________________|____________________|____________________| ____________________|____________________|____________________| ____________________|_____Pure___________|_____Common_________| __________Rivalrous_|_____Private________|_____Pool___________| ____________________|_____Good___________|_____Good___________| ____________________|____________________|____________________| ____________________|____________________|____________________| _______________________________________________________________ ____________________|____________________|____________________| ____________________|____________________|____________________| ____________________|_____Club Good______|____________________| ____________________|____________________|_____Pure___________| _______Nonrivalrous_|____________________|_____Public_________| ____________________|_____Toll Good______|_____Good___________| ____________________|____________________|____________________| ____________________|____________________|____________________| _______________________________________________________________

    We've covered the first two categories, but we need to consider categories three and four. So let's do that now.
    Toll Goods and Intellectual Property A toll good is characterized by nonrivalrous consumption but excludability. Suppose we have a highway in a rural area, where the capacity of the highway would never be approached even if access were free. Nonetheless, use of the highway can be limited by the installation of toll booths. This means that we can charge for access to the highway. Economists call goods that are nonrivalrous but excludable "toll goods."
    One of the most important applications of the concept of a toll good in legal theory arises in the context of intellectual property. A simplified version of the conventional story goes something like this. Without intellectual property rights created by law, the information (e.g. the invention or composition) would be a pure public good. In a world without intellectual property, for example, the first copy of a new book could be copied by the first purchasers. This copy could then be copied by others. Eventually, the "free" copies would dominate the market. And this would destroy the incentives of authors to write! (More on the question whether this is right towards the end of this post.) Intellectual property law comes to the rescue. By enforcing patents and copyrights through legal sanctions, intellectual property law transforms information from a public good to a toll good. Intellectual property law creates excludability, but not rivalrousness. For more on this, see Water Wells and MP3 Files: The Economics of Intellectual Property.
    Common Pool Goods and the "Tragedy of the Commons" Common pool goods are rivalrous but non excludable. An example might be the fish resource in those portions of the ocean that are outside national waters (the high seas). This resource is rivalrous, because over fishing can result in a reduction of the stock of fish. But excludability is difficult to establish. Self-help would work for a localized fishing area where the fish population does not range over a large area; in theory a patrol boat could establish a virtual fence. But this solution won't work if the fish population ranges over a wide area of the high seas. Unless some international treaty regime can establish enforceable quotas, the result may be a "tragedy of the commons." Each fisher has an incentive to take the most she can, but the result of all fishers doing this is a depletion in the stock of fish that harms everyone. (Once again, we have a version of the Prisoner's Dilemma.)
    Club Goods We are almost done, but we have one or two more ideas to pick up. One is the idea of a "club good." A club good is a good where the utility of each individual's consumption of the good is a function of the number of others who consume the good. Take a golf course. If too many people try to use the course simultaneously, then the utility that each derives from the experience goes down. Golfers have to wait for tee times, the course is crowded, and so forth. In other words, there are "crowding" problems. One solution to such problems is to form a "club," which limits the number of persons with the right to use the golf course.
    Private Goods and the "Tragedy of the Anticommons" And finally, we should note the flip side of the tragedy of the commons, dubbed by Frank Michelman, "the tragedy of the anticommons." This refers to the phenomenon where ownership in a resource has been divided among so many owners that transaction costs and holdout problems prevent Pareto efficient transactions from occurring. For example, when property was "privatized" in the former Soviet Union, a single apartment building might end up with many, many fractional owners, including ownership interests by various government entities and the residents of the building. In theory, every owner must agree before a transaction involving the building could take place. Given the large number of owners, the costs of completing the transaction and paying off the holdouts (those who withhold consent in order to increase their share of the profits) can make the transaction economically unattractive. This is a case where the market is incapable of efficiently allocating a pure private good.
    Conclusions The public/private goods distinction is basic to a variety of topics in legal theory. Whenever you encounter a resource allocation problem, ask yourself, "Is this resource a public, private, toll, or common pool good?" And then ask, "Could a change in the legal rules governing this resource change its status?" Although the terminology may be daunting at first, they are really very simple and straightforward.


Saturday, March 27, 2004
 
APA Pacific Division: Saturday Afternoon Here are some of the programs of particular interest to legal theorists:
    Author Meets Critics: Brian Skyrms, The Stag Hunt and the Evolution of Social Structure
      1:00-4:00 p.m. Chair: Jeffrey Barrett (University of California-Irvine) Critics: James M. Joyce (University of Michigan) Joshua Epstein (Brookings Institution and Santa Fe Institute) J. McKenzie Alexander (London School of Economics) Author: Brian Skyrms (University of California-Irvine)
    Author Meets Critics: Laurie Shrage, Abortion and Social Responsibility: Depolarizing the Debate
      1:00-3:00 p.m. Chair: Ann Garry (California State University-Los Angeles) Critics: Christine Littleton (Law and Women's Studies, University of California-Los Angeles) Meredith Michaels (Smith College) Author: Laurie Shrage (California State Polytechnic University- Pomona)
    Invited Symposium: Aristotle's Nicomachean Ethics
      1:00-3:00 p.m. Chair: Nicholas D. Smith (Lewis & Clark College) Speaker: Paula Gottlieb (University of Wisconsin-Madison) "Aristotle and Moral Dilemmas" Respondents: Susan Sauvé Meyer (University of Pennsylvania) Christopher Rowe (University of Durham)
    Colloquium: Moral Rules
      4:00-5:00 p.m. Chair: Peter Tan (Mount Saint Mary's College) Speaker: Jeffrey C. Brand-Ballard (George Washington University) "Rules That Bend Without Breaking" Commentator: Larry Alexander (University of San Diego) 5:00-6:00 p.m. Chair: Darryl Wright (Harvey Mudd College) Speaker: Betsy C. Postow (University of Tennessee) "Valid Competing Moral Codes" Commentator: Bruce Landesman (University of Utah) 6:00-7:00 p.m. Chair: Laurence Houlgate (California State Polytechnic University-San Luis Obispo) Speaker: Rebecca Stangl (University of Notre Dame) "Dancy's Particularism and the Point of Moral Principles" Commentator: Leonard Kahn (University of California-Irvine and Oxford University)
    Special Session Arranged by the APA Committee on Philosophy and Law and the Society for Philosophy and Public Affairs
      4:00-7:00 p.m. Topic: Women and the U.S. Constitution Chair: Carol Gould (Stevens Institute of Technology and Columbia University) Panelists: Sibyl Schwarzenbach (Graduate Center, City University of New York) Tracy Higgins (Fordham University) Judith DeCew (Clark University) Carol Gould (Stevens Institute of Technology and Columbia University)
    Colloquium: Causation
      4:00-5:00 p.m. Chair: Kyle Stanford (University of California-Irvine) Speaker: Michael Tooley (University of Colorado-Boulder) "Counterfactual Analyses of Causation" Commentator: Anjan Chakravartty (University of Toronto) 5:00-6:00 p.m. Chair: Doug Hill (University of California-Irvine) Speaker: Ana C. Sartorio (University of Wisconsin-Madison) "Disjunctive Causes" Commentator: Brad Armendt (Arizona State University) 6:00-7:00 p.m. Chair: John Stopple (University of California-Irvine) Speaker: Jonathan M. Schaffer (University of Massachusetts-Amherst) "Contrastive Causation" Commentator: Margaret Schabas (University of British Columbia)


 
Mini-Conference on Global Justice A mini-conference on global justice is being held in conjunction with the APA Pacific Division. The program can be found here. Speakers include Charles Beitz, Michael Blake, Ryoa Chung, Daniel Wikler, Soran Reader, Larry May, Elizabeth Ashford, and many others.


 
APA Pacific Division: Saturday Morning Here are some of the programs of particular interest to legal theorists:
    Special Memorial Session on Bernard Williams's Philosophy
      9:00 a.m.-12:00 p.m. Chair: Sarah Buss (University of Iowa) Speakers: Jonathan Lear (University of Chicago) Martha Nussbaum (University of Chicago) Anthony Long (University of California-Berkeley) Richard Moran (Harvard University)
    Symposium: Race and Capital Punishment
      9:00 a.m.-11:00 a.m. Chair: Talia Bettcher (California State University-Los Angeles) Speaker: Michael J. Cholbi (California Polytechnic University- Pomona) "Race, Capital Punishment, and the Cost of Murder" Commentators: Deirdre Golash (American University) Elizabeth A. Linehan (St. Joseph's University)
    Invited Symposium: Moral Psychology in Actual Social Worlds
      9:00 a.m.-12:00 p.m. Chair: Victoria McGeer (Princeton University and Australian National University) Speakers: Peggy DesAutels (University of Dayton) "Moral Mindfulness" James Lindemann Nelson (Michigan State University) "Austen's Emma and Ethical Formation" Catherine Wilson (University of British Columbia) "Evolutionary Psychology and the Preferences of Women" Claudia Card (University of Wisconsin-Madison) "Torture in Ordinary Circumstances"
    Invited Symposium: Encountering Evil
      9:00 a.m.-12:00 p.m. Chair: Pamela Hood (San Francisco State University) Speaker: C. Robert Mesle (Graceland University) Respondents: John Roth (Claremont McKenna College) Stephen Davis (Claremont McKenna College) D. Z. Phillips (Claremont Graduate University) Commentators: Marilyn Adams (Yale Divinity School) Phillip Quinn (University of Notre Dame)
    Invited Symposium: Philosophical Perspectives on Cultural Property
      9:00 a.m.-12:00 p.m. Chair: Julie Van Camp (California State University-Long Beach) Speakers: Elizabeth Coleman (Center for Cross Cultural Research, Australian National University) "Ownership, Property and Rights" Claire Lyons (Getty Research Institute) "The Universal Museum? Antiquities in the National and International Perspective" Geoffrey Scarre (University of Durham) "Human Remains and Cultural Property" Daniel Shapiro (School of Law, Columbia University; and President, International Cultural Property Society) "Philosophy and Cultural Property" James O. Young (University of Victoria) "Cultures and Cultural Property"
    Author Meets Critics: Allen Buchanan, Justice, Legitimacy, and Self-Determination: Moral Foundations for International Law
      9:00 a.m.-12:00 p.m. Chair: Eric Cavallero (University of Arizona) Critics: Brian Barry (Columbia University) David Miller (Oxford University) Author: Allen Buchanan (Duke University)
    Author Meets Critics: Christine Swanton, Virtue Ethics: A Pluralistic View
      9:00 a.m.-12:00 p.m. Chair: Maria Merritt (College of William & Mary) Critics: Julia Driver (Dartmouth University) Robert Solomon (University of Texas) Linda Zagzebski (University of Oklahoma) Author: Christine Swanton (University of Auckland)