INTELLECTUAL PROPERTY IN EXPERIENCE.

Author:Sunder, Madhavi
 
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In today's economy, consumers demand experiences. From Star Wars to Harry Potter, fans do not just want to watch or read about their favorite characters--they want to be them. They don the robes of Gryffindor, flick their wands, and drink the butterbeer. The owners of fantasy properties understand this, expanding their offerings from light sabers to the Galaxy's Edge', the new Disney Star Wars immersive theme park opening in 2019.

Since Star Wars, Congress and the courts have abetted what is now a $262 billion-a-year industry in merchandising, fashioning "merchandising rights" appurtenant to copyrights and trademarks that give fantasy owners exclusive rights to supply our fantasy worlds with everything from goods to a good time. But are there any limits? Do merchandising rights extend to fan activity, from fantasy-themed birthday parties and summer camps to real world Quidditch leagues? This Article challenges the conventional account, arguing that as the economic value of fantasy merchandising increases in the emergent "experience economy," intellectual property owners may prove less keen on tolerating uncompensated uses of their creations. In fact, from Amazon's Kindle Worlds granting licenses for fan fiction, to crackdowns on sales of fan art sold on internet sites like Etsy, to algorithms taking down fan videos from YouTube, the holders of intellectual property in popular fantasies are seeking to create a world requiring licenses to make, do, and play. This Article turns to social and cultural theories of art as experience, learning by doing, tacit knowledge, and performance to demonstrate that fan activity, from discussion sites to live-action role-playing fosters learning, creativity, and sociability. Law must be attentive to the profound effects these laws have on human imagination and knowledge creation. I apply the insights of these theories to limit merchandising rights in imaginative play through fair use, the force in the legal galaxy intended to bring balance to intellectual property law.

TABLE OF CONTENTS INTRODUCTION I. THE RISE OF PAY-TO-PLAY: FROM ACTION FIGURES TO THI GALAXY'S EDGE A. The Force Awakens: The Rise of Merchandising B. A New Hope: The Rise of the Experience Economy II. THE TENUOUS MERCHANDISING RIGHT A. Trademark B. Copyright 1. 106(1): The Reproduction Right 2. 106(2): Derivative Works 3. 106(4): The Public Performance Right C. Battle Royale: Cease and Desist III. THEORIZING EXPERIENCE A. Art as Experience B. Learning by Doing C. Tacit Knowledge D. Performance E. Critiques IV. REFORMING MERCHANDISING RIGHTS IN EXPERIENCE A. Trademark Fair Use B. Copyright Fair Use CONCLUSION INTRODUCTION

"Tell me one last thing,"said Harry. "Is this real? Or has this been happening inside my head?"

....

"Of course it is happening inside your head, Harry, but why on earth should that mean that it is not real?"

--Harry Potter and the Deathly Hallows (1)

Yale psychologist Paul Bloom observes that American adults spend on average four minutes a day on sex and over four hours a day in imaginary worlds. (2) Today, entertainment and play extend well beyond reading and watching, to writing, doing, making, and performing. One does not just read Harry Potter--fans inhabit the virtual world of Harry Potter: Hogwarts Mystery., (3) make handmade Hogwart's uniforms to sell on Etsy, and play Quidditch for their university. There are more than 300 real-world Quidditch teams at high schools and universities worldwide. (4) From the Wizarding World of Harry Potter to interactive gaming (5) to Comic-Con (6) to creating and viewing YouTube fan theories, (7) our lives are spent living in the imaginary worlds we love. (8) Indeed, we celebrate life's most important moments with fantasy-themed parties, including birthdays and even weddings. (9)

As consumer researchers have become sawier about how to package and market the human need for fantasy, play, and imagination, areas of thought and expression once free as the air we breathe are increasingly becoming commodified and metered fare, regulated by licenses and royalties, requiring permission and payment. We are witnessing a shift in the nature of both consumption and entertainment. In today's economy, "[g]oods and services are no longer enough." (10) Today's consumers demand experiences. (11) From Star Wars to Harry Potter, fans do not just want to watch or read their favorite characters. They want to be them. (12) They want to don the robes of Gryffindor, flick their wands, and drink the butterbeer. As The Economist observes, consumers are made happier through " experiences' over commodities, pastimes over knick-knacks, doing over having." (13)

These experiences are increasingly the stuff of intellectual property claims through the emergence of an expansive merchandising right that rests on both copyright and trademark. Until now, intellectual property holders have largely tolerated individuals who seek to bring their fictional worlds to life, on the theory that going after one's fans is not good for business. (14) But the emergence of an experience economy will lead many owners of cultural property to reconsider their laissez-faire attitude toward play. Indeed, we are already seeing the beginning of the commodification of some long-tolerated fan activity. Increasingly, owners of cultural properties are issuing ceaseand-desist demands to third parties and offering their own official pay-toplay options. Amazon.com launched Kindle Worlds, a forum to write and sell fan fiction based on specific licensed media properties. (15) Twentieth Century Fox stopped the sale of handmade knit hats on Etsy inspired by the short-lived Joss Whedon TV series, Firefly, after Fox decided it would exclusively license the hats. (16) YouTube algorithms to protect copyright are wreaking havoc on Game of Thrones fan theory sites, where fans use video clips from the popular HBO series to discuss everything from character development to symbolism in the World of Ice and Fire. (17) The Tolkein estate shut down an unlicensed Lord of the Rings summer camp. (18) Disney ordered bakers to cease and desist making "counterfeit edible cake[s]" featuring protected characters like Luke Skywalker. (19) Paramount Pictures and CBS claim a copyright in Klingon. (20) DC Comics enjoined a custom carmaker from making and selling real-life replicas of the Batmobile. (21) Disney filed a trademark suit against a game maker for creating a mobile version of the fictional card game from the Star Wars universe, "Sabaac," the game in which Han Solo famously won the Millennium Falcon from Lando Calrissian. (22) Netflix sent a cease-and-desist letter to the owners of a pop-up bar in Chicago based on its popular new television series, Stranger Things, with the quip, "We love our fans more than anything, but you should know the Demogorgon is not always as forgiving." (23) The Cartoon Network prevented fans from opening an unauthorized Rick and Morty themed pop-up bar in Washington, DC, claiming the move "wasn't polite and aimed at profiting off of Rick and Morty fans." (24) Fans responded that the bar would have been a labor of love and that the company was denying fans the freedom to "geek out." (25)

This Article examines the phenomenon of living in imaginary worlds that are protected by copyrights and trademarks. Copyright and trademark have expanded from what we read to how we live. (26) While living in fantasy worlds is as old as child's play, "what is newn ... is that experiences represent the basis of economic activity." (27) To take a quotidian example, "[p]eople rarely if ever bought birthday parties ... in previous economic eras; [but] today they do so regularly." (28) As leading scholars have noted, we are seeing the commodification of what had been the public domain as intellectual property marches into ever new corners of our lives. (29) The commodification of experiences, however, goes beyond the enclosure of speech into the enclosure of cultural practices.

The commodification of experience is built upon an ever-expanding legal "merchandising right" grounded in both copyright and trademark. Put simply: Star Wars would not be Star Wars without the Copyright Act of 1976, which expanded considerably from focusing on exact or substantially similar reproductions in the same medium, to ownership of derivatives in a wide range of media, even those far flung from the original work. (30) The derivative work right and Star Wars were born together. Today, the merchandising right is being stretched to cover not just goods, but also the right to give fans a good time.

The assertion of an exclusive merchandising right over fan culture and activity should not be surprising. In today's economy, the value of merchandise, and merchandising experience, far surpasses the value of the underlying intellectual properties themselves. Merchandising is a $262 billion-a-year industry. (31) Exclusive merchandising licenses drive cultural production, underwriting the costs of making films and directing which creative projects get pursued in the first place. The Harry Potter franchise has earned more than $25 billion. (32) When Disney revived the Star Wars franchise with the release of The Force Awakens, the "real moneymaker for ... Disney" was the associated merchandise. (33) Analysts noted that "Star Wars will make its real money in the mall, not the cinema." (34)

Given the economic and cultural importance of the merchandising right, (35) there is a surprising paucity of scholarship on this topic. Stacey Dogan and Mark Lemley chronicle the uneasy doctrinal foundations of the right under trademark law. (36) Irene Calboli defends the merchandising right under trademark law on the ground that it protects against confusion as to sponsorship. (37) Scholars have offered important critiques of the so-called merchandising right, arguing that the law extends copyright and trademark beyond their traditional concerns, is built on...

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