Introduction: boundaries of intellectual property symposium.

• Author: Hardy, Trotter
• Position: Company overview

You have in your hands thirteen papers on intellectual property, (1) written by some of the most outstanding and widely recognized scholars working in the area today. What a collection of probing analyses, on topics ranging from the morality of patents, (2) to the "Goldilocks hypothesis," (3) to the relationship of TOFU to fair use, (4) to the secret gay love affair between Captain Kirk and Dr. Spock! (5) Don't believe me? Read on ...

THE BOUNDARIES OF COPYRIGHT AND TRADEMARK/CONSUMER PROTECTION LAW

Dan L. Burk & Brett H. McDonnell, Trademarks and the Boundaries of the Firm

As long as we are supposing things, let's suppose that Walt Disney had sold the Disney empire during his lifetime and gone on to another venture. Could his previous business really lay claim to the "Disney" name, even in the face of a contractual conveyance of good will? Would Disney himself be justified in associating his name with the new venture--or more precisely, are there limits on truth-telling that the sale of the old business imposes on Disney's ability to so associate himself?

Eponymous problems like this arise quite often in trademark law, when founders (think "Bill Marriott," "Martha Stewart," "Henry Ford," and so on) are closely associated with the success or quality of a firm's products and services. As Dan Burk and Brett McDonnell discuss in Trademarks and the Boundaries of the Firm, the issue has facets that carry well beyond "pure" trademark law. Following their previous investigations of patent and copyright law, the two authors here ask about the effects of trademark rules and doctrine on the size and structure of firms. Does trademark law affect a firm's decision to "make or buy" components, or the entirety, of its products? How does that law relate to franchise operations? Why are some gas stations owned by franchisees and others owned by the franchising company itself?

These sorts of questions have been studied in the economics literature. But Burk and McDonnell place them, rather surprisingly, into the context of trademark law. Take the knotty task of disentangling the good will associated with a business founder like Disney personally and the good will associated with the business and its products apart from the founder. When the issue arises in litigation, ex post, the question is often one of pure trademark law. Yet Burk and McDonnell show how that trademark law also has consequences ex ante, in structuring the firm and playing a consequential role in business decisions like "make or buy."

The whole question gives Burk and McDonnell the occasion for developing a deliciously novel paper probing the intersection of trademark law, business decision making, and economic analysis.

Jason Mazzone, Administering Fair Use

Fair use--ahhh, fair use. What a problem area. Not only is it perpetually vague and unpredictable, as Jason Mazzone reminds us in Administering Fair Use, but frequently these days content providers insist that users waive their rights even to activities that are otherwise routinely acknowledged as being fair. Mazzone quotes from several "click-through" contracts, such as the highly restrictive one from the U.S. News web site prohibiting almost anything but "reading" their college rankings (rankings that, to be sure, might fall on the "fictional" side of the fact-fiction dichotomy in any event) for illustration. The practice is far from confined to web contracts: literary copyright holders can also indulge in attempts at draconian restrictions on use--the James Joyce estate is especially vigilant to ensure that no use--no use--of Joyce's writings is possible without express permission. Music download services like iTunes and Amazon are equally eager to hem in the uses that users can make of copyrighted downloads, and to hem them in far more restrictively than fair use doctrine would require.

We are in danger, suggests Mazzone, of fair use no longer imposing limits on copyright's reach, as it was intended to do, but rather becoming just "one more area that copyright owners control." (6)

Commentators often urge a variety of remedies for the twin problems of vagueness and copyright owner over-reaching, such as the addition of more explicit exceptions in the Copyright Act, or better guidance to courts or the public about the true scope of fair use. Mazzone takes us, however, down another path with his approach to resolving these notorious fair use problems. Why could not we, he suggests, create an independent government agency to administer fair use? He goes on to sketch out two possible models for such an agency, arguing that the administrative approach is both consistent with "the Administrative/Regulatory State" of today's world, but more importantly, a useful way of turning some of the endless malleability and unpredictability of the fair use standards into a publically informed and much more predictable set of fair use rules.

Pamela Samuelson & Tara Wheatland, Statutory Damages in Copyright Law: A Remedy in Need of Reform

One might say that "the rubber meets the road" in copyright litigation when damages are assessed. Copyright professors and practitioners alike are keenly aware that damages come in two forms: actual and statutory. Congress understood, even under the 1909 Act, that in many cases actual damages are hard to prove for copyright infringements; hence the statute, both then and now, has spelled out a range of damage awards that courts could grant successful plaintiffs in the absence of proof of actual damages.

But what a range. Pamela Samuelson and Tara Wheatland, in Statutory Damages in Copyright Law: A Remedy in Need of Reform, point out that the ratio of the largest possible statutory damages to the smallest has greatly increased over time, from 20:1 in 1909, to 200:1 today for the comparable range. Taking into account the low end of the range for "innocent infringement" that was added to the 1976 Act, today's ratio is actually 750:1. (7)

Even more striking, statutory damages today appear to be awarded without any manifest principle for what constitutes an appropriate choice within the range. Samuelson and Wheatland demonstrate how courts occasionally award damages well below what seems appropriate, but more and more today award statutory damages that are astonishingly high in relation to any conceivable harm to the copyright owner. Many readers will know the recent case involving Jamie Thomas, who was found liable for "file sharing" a couple of dozen songs. The copyright plaintiffs' actual damages were assessed by the court at $50; but plaintiffs elected statutory damages, and were awarded over $220,000 (and as very recent news reports describe, on retrial the jury awarded plaintiffs just under two million dollars!).

With the range of maximum to minimum damages as great as it is, with courts seemingly bending over backwards to find "willfulness" in routine infringement cases, with juries ready to award astonishingly large verdicts in relation to harm done, and with the whole process veering away from the fundamental scheme of statutory damages envisioned by Congress, the time is ripe to revisit the statutory damages issue and Samuelson and Wheatland do just that. They not only canvass the cases and persuasively demonstrate that something is seriously amiss; they also lay out a careful, comprehensive, and practical approach that courts can take to bring some principled consistency and fairness to future statutory damage cases. (If, like me, you have tended to short-change the damages issue when teaching a copyright course, Samuelson and Wheatland's article will come as a much needed eye-opener that will change your ways.)

Rebecca Tushnet, Economies of Desire: Fair Use and Marketplace Assumptions

I often teach my...