Reading list: is efficiency all there is in copyright?

Oren Bracha and Talha Syed, Beyond Efficiency: Consequence-Sensitive Theories of Copyright, 29 Berkeley Tech. L.J. (2014).
The article’s argument is complicated and I would disserve it by trying to summarize, but a core point is that, to the extent that cultural flourishing-type theories of copyright diverge from purely efficiency-based ones, that divergence needs to be explained. Even a cultural flourishing proponent should want to encourage the production of new works that could then be part of a cultural conversation, which means that incentive/access balancing in the efficiency vein will ordinarily produce the same answers as a cultural flourishing account. The authors then try to identify situations in which a proponent of a non-efficiency-based copyright theory would accept deviations from the “efficient” situation, and use fan fiction as one of their examples. (I’m chuffed that fan fiction is now a “familiar” issue in legal analysis, though I don’t think it’s as controversial as they do.) The authors go through the basic incentive arguments and agree that there’s very little reason to see a negative incentive effect of fan fiction, but then suggest that, from the conventional economic perspective
unrestricted production of fan fiction is likely to create high amounts of wasteful duplicative activity. The argument here is not that fan fiction is likely to be a good substitute for the original or for any official follow up. Rather, it is that much of the fan fiction produced constitutes a close substitute for other fan fiction, from the point of view of consumers. To be sure, readers of the genre have their preferences among writers or stories, and different variants are better tailored to some subset of preferences. Nevertheless, in a corpus of thousands of stories in the Star Wars universe there is likely to be a high degree of overlapping demand satisfaction, and thus the real efficiency problem with fan fiction may not be a jeopardizing of incentives as much as the waste of so much effort and cost expended in creating a multitude of works that are mostly close substitutes of one another.
As a result, they contend, cultural flourishing-type theories will accept fan fiction under a broader range of circumstances than efficiency accounts (I say broader range because, when you plug the numbers in, efficiency theories might well also often find fair use). That’s because “the creation of fan fiction is a prime example of meaningful human activity.” They point out that this perspective addresses the product differentiation theory directly: creation isn’t waste. Indeed, I was reminded of a fantastic comment on yet another bad story about fan fiction:
By this rationale [that most fan fiction writers won’t write professionally], it is a waste of time and effort to join your local pub football team and knock a ball around with your mates every weekend, because you’re never going to be headhunted for the Premier League; a waste of time and effort to experiment with delicious new recipes and feed them to your friends and family, because you’re never going to open a restaurant; a waste of time and effort to flirt with a pretty girl if you know you’re probably never going to see her again; a waste of time and effort to run a marathon if you’re not going to win any prize money; a waste of time and effort to take pictures of your child’s first faltering steps if you’re never planning to become a professional photographer; a waste of time and effort to join a choir or play the guitar on the beach if you’re never going to record a number one album; a waste of time and effort to learn how to thoroughly blow somebody’s mind in bed if you don’t plan to become a sex worker.
The point of such pursuits sir, is that, in and of themselves, THEY GIVE YOU JOY. They enrich your life.
From a cultural flourishing perspective, then, a utility calculus shouldn’t be treating the duplicative effort as cost, but rather as benefit. On the reader’s side, it can sometimes be wearying to search through all the different Smallville stories with similar plots—but then again, I really appreciate the ability to get new variations on a theme I already know I love. Perhaps I just have a higher-than-average tolerance for minimal differentiation, but since it’s not copyright law driving the creation of these fanworks, we’re already getting the differentiated works that don’t bear any resemblance to Smallville: everybody wins!
However, as the authors note, this just means the original utilitarian calculus got it wrong; this shift can occur inside efficiency analysis itself. And here’s the part of their argument I just can’t follow: they say that flourishing theory sometimes means valuing certain activities more “those who engage in” fan fiction do, “as revealed through their preferences” (emphasis added), in which case we could support freedom in fan fiction even if efficiency analysis didn’t. But, aside from the well-known problems of preference endogeneity, which they do mention, I don’t see why this is so. Distributionally, adding a marginal incentive for the large corporations whose works are most likely to inspire fan fiction would almost certainly harm the amateurs who presently produce and consume fan fiction more than it helps us by incentivizing additional marginal Marvel movies we can go watch. Valuing our preferences just as much as we do ourselves would suffice to show that this should not be done.

If the authors are just saying that fans don’t have enough money in their pockets to pay the corporations for this tradeoff, then they’ve sub rosa decided not to follow flourishing theory, which values things that people can’t pay for with cash.  One defining feature of cultural theories about copyright, it seems to me, is attention to distributional consequences and a Rawlsian willingness to accept lower total aggregate production for better treatment of those on the bottom.  (In a footnote, they say they bracket the question whether fans are disproportionately likely to be low on financial resources. I don’t think that can be bracketed in a cultural theory, and even if fans were wealthy, the difference between how people behave with free/communal resources and how they behave in markets persists through most situations, though not so much with economists.) Part of the problem is that I’m not sure how we “reveal” our preferences for particular configurations of, or potential changes to, copyright law. (Well, certain campaign donors do, but that’s not most of us.)  We reveal our preferences for particular works, but even a purely rational actor will have a hard time getting from there to overall copyright law’s scope.

The authors then suggest that the difference between efficiency and flourishing theories still matters because of the possibility of expanded licensing of fan fiction, which would allow production of fan fiction with money flowing to copyright owners. But their description of Kindle Worlds as the precursor of broader licensing is descriptively inaccurate (for reasons I detail elsewhere) and also undervalues the profound behavioral differences between free and paid access. A paid, walled garden will not “enable copyright owners to capture the demand for fan fiction at relatively low transaction costs, while still allowing much of this demand (by both producers and consumers) to be satisfied,” because much of the demand comes from fandom’s free and communal nature. Kindle Worlds doesn’t let you play for free. The authors recognize the role of commodification, and state that if my argument is right, then “commodification of fan fiction through copyright protection would defeat rather than serve the purpose of preference satisfaction.” In which case we’re back to the lack of divergence between efficiency properly understood and cultural flourishing.
One strength of the flourishing theories, which the authors mention in passing but don’t spend much time on, is that they enable us to structure law in a way that the utilitarian theories on their own don’t. Those theories fail to tell us what the law should be because we have absolutely no idea what numerical values to put on the variables even if we’re absolutely confident we’ve captured every variable that affects creativity and access. (My favorite example of this problem is Posner’s equation in Sex and Reason that can “determine” whether abortion ought to be banned, whose solution requires you to input v, the value of the fetus.) So utilitarians end up either indeterminate or guessing. Because flourishing theories give us strong defaults, they can say “protect critical uses” and “protect noncommercial uses” and move on.

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