Note: This is the last of five blog posts devoted to Week 4/Module 4 of my business law course (Tiger King edition).
Let’s conclude my observations about Week 4 of my business law survey course with the fair use doctrine. To the point, fair use operates as a common law and statutory defense to copyright infringement, and I teach fair use for two reasons. To begin with, I want to impart an important lesson to my students. In brief, the lesson is this: even exclusive property rights are not absolute. To put it in the most stark and dramatic terms: fair use is not only about “fairness”; it is also about finding the optimal level of piracy or copyright theft, i.e. copyright infringement!
Now, before we proceed any further, you might well be asking: How can an illegal act like theft or piracy ever be optimal? To answer this counter-intuitive question, we must first realize that copyrights are not absolute. Instead, courts use the fair use doctrine to balance the interests of creators and copiers, of innovators and imitators, of intellectual owners and intellectual squatters. In other words, creators, innovators, and intellectual owners are not the only ones who are morally worthy or legally deserving of legal protection; so too are copiers, imitators, and intellectual squatters!
The other reason I teach fair use is to spotlight the idea of flexible standards. (You may recall that I introduced the fundamental distinction between bright-line rules and flexible standards in my Sources of Law Module.) Contrary to popular belief, fair use does not consist of a simple, clear-cut, bright-line rule, e.g. you may use up to 10% of another person’s work. Instead, fair use is a flexible standard consisting of four general guidelines (see also the image below):
- How “transformative” (whatever that means!) is the alleged infringing use?
- Is the alleged infringer stealing or borrowing (depending on your point of view) material from an original work of fiction (like a play or novel) or from an original work of non-fiction (like a biography), and in either case, has that original work been published yet?
- How much material is the alleged infringer stealing or borrowing, as the case may be?
- Does the alleged infringement help to increase or decrease sales of the original work?
What weights should be attached to each factor, i.e. which factor is the most important one? Or, if the factors are to be equally weighted, what happens when two of the factors point in one direction and the other two point in the other direction? Courts refuse to say! So, is this judicial reticence a good or bad thing? Next week, we will review the next-to-last module of my business law survey course, which will be devoted to criminal and civil cases. In the meantime, I will begin reviewing Tyler Cowen’s most recent book on “Big Business.”