THE HIDDEN TRANSACTIONAL WISDOM OF MEDIA DISCRIMINATION IN PRE-AWCPA COPYRIGHT.

• Author: Collins, Kevin Emerson

ABSTRACT

Media neutrality in copyright's subject matter means that works of authorship are protected against copying, or not, regardless of the tangible medium in which they are fixed. For example, the same features of a sculptural work are protected regardless of whether they are fixed in a statue or a photograph of a statue. Media neutrality in subject matter is a fundamental and largely unquestioned copyright principle with a firm policy basis under copyright's dominant incentive-to-create theory. Media discrimination in subject matter undermines in arbitrary ways authors ' ability to recoup their creativity costs over the sale of multiple copies.

This Article identifies a situation in which departure from the copyright principle of media neutrality in subject matter is unexpectedly good policy. The rarely discussed transactional theory of copyright holds that copyright's goal is to facilitate the market transactions through which authors refine works and commercialize them into the copies that consumers want. When transactional theory, rather than incentive-to-create theory, is copyright's primary justification, maintaining protection for the medium in which authors develop works and eliminating it for the medium in which the public consumes them preserves copyright's full benefits while reducing its access costs.

To illustrate the argument, this Article looks to architecture as a case study. Copyright for building designs created before the enactment of the Architectural Works Copyright Protection Act (AWCPA) in 1990 employs media discrimination: it protects building designs when fixed in drawings but not when fixed in buildings. As a historical matter, the courts crafted this unusual rule of protected subject matter to accommodate concerns about copyright protection for the functionality of buildings. Yet, for architects who employ the custom design process at the core of the architectural profession, it has a sound transactional justification as well, and it would be good policy even if buildings were not functional artifacts. Copyright's principal role in custom architectural design is to facilitate the architect-client transaction in which architects create building designs in return for fees that cover design costs. Pre-AWCPA copyright can perform this role just as well as full media-neutral copyright because it protects building designs fixed in architecture's development medium (drawings). However, it reduces copyright's access costs because competitor architects can borrow freely from building designs fixed in the consumption medium (buildings).

INTRODUCTION I. THE CONVENTIONAL WISDOM ON MEDIA NEUTRALITY A. Media Neutrality in Subject Matter and Rights B. Media Neutrality and the Market-Buffer Theory II. THE BUILDING/DRAWING DICHOTOMY A. The Doctrine B. A Counter/actual, Media-Neutral Alternative for Drawings C. Common Law Origin and Statutory Codification 1. Copyright and Functionality 2. The Absence of Building Protection 3. The Expansive Scope of Drawing Protection a. Architecture and the Use/Explanation Distinction b. Non-Architectural Useful Articles c. Possible Statutory Codification in the 1976 Act D. The AWCPA III. THE DICHOTOMY'S TRANSACTIONAL VIRTUES A. The Transactional Theory B. Architectural Copyright's Transactional Benefits 1. The Design-Bid-Build Process 2. The Disclosure Dilemmas 3. Copyright Defuses the Dilemmas 4. Alternative Legal Mechanisms for Defusing the Dilemma C. Optimizing Copyright for Its Transactional Justification D. Building Protection and the Incentive to Create E. Stock Architecture and Copyright Tailoring IV. THE TEMPLATE FOR JUSTIFIED MEDIA DISCRIMINATION CONCLUSION INTRODUCTION

The 1976 Copyright Act (the "1976 Act") makes media neutrality a bedrock principle of contemporary copyright law. Section 102(a) codifies the facet of this principle that addresses copyright's protected subject matter: copyright protects "original works of authorship fixed in any tangible medium of expression." (1) Assuming that a sequence of fictitious events is a protected aspect of a literary work, for instance, media neutrality in subject matter means that copying that series of events from a hardcover book or an audio recording is just as unlawful as copying it from an e-book or microfiche. Media discrimination in subject matter--that is, copyright protection for a work fixed in a first medium but not a second medium--is rare. (2)

This rarity is unsurprising because the policy justification for media neutrality in subject matter is intuitive and unchallenged. Copyright's dominant utilitarian justification is what is commonly called the incentive-to-create theory and what this Article terms the market-buffer theory. (3) Works of authorship are public goods, and copyright augments what are often inefficiently low incentives for their production. Copyright allows authors to restrict competition, earn supracompetitive profits in the market for multiple copies, and offset the sunk cost of creating the works. Under the market-buffer theory, media discrimination in subject matter is little better than no copyright protection at all because it does not provide an effective buffer from market competition. It allows competitors to freely copy from the unprotected medium, sapping copyright protection for the protected medium of its economic value and leaving the public goods problem untouched.

This Article demonstrates that reducing copyright's reach by introducing media discrimination in subject matter can preserve copyright's benefits while reducing its costs. The argument involves two primary conceptual moves: the transactional theory sometimes provides copyright's primary justification, and media discrimination in subject matter can optimize copyright for the transactional theory.

The first move gets out of the deep rut in copyright thinking that has been worn by the repeated invocation of the market-buffer theory as copyright's sole utilitarian justification. (4) In some contexts, the transactional theory instead identifies copyright's primary justification. (5)

Under the transactional theory, copyright resolves the information paradox identified by Kenneth Arrow. (6) Absent copyright, authors face disclosure dilemmas when they attempt sell their works as information commodities before their works have been commercialized. Authors hesitate to disclose their works to transactional partners because disclosure puts transactional partners in possession of their works and obviates the need to pay for them. Yet, transactional partners hesitate to pay authors for the works before disclosure occurs because they need the disclosure to determine how much they value the works. (7) Copyright reduces the severity of authors' disclosure dilemmas. Clients often cannot appropriate works without paying authors and, correspondingly, authors are more comfortable providing the disclosure needed for efficiency-enhancing, pre-commercialization transactions to proceed.

The second move recognizes that media discrimination in subject matter can sculpt copyright to fit the transactional theory. For some types of works, authors initially fix works in a development medium to refine and commercialize them and then in a consumption medium to market them in the form that the public demands. For example, authors refine and commercialize movies through specs, screenplays, and storyboards (development media), but audiences' willingness to pay hinges on experiencing them as films or videos (consumption media). For works that have distinct development and consumption media, protection for the development medium but not the consumption medium--that is, a consumption-medium/development-medium dichotomy (8)--transforms copyright into a two-phase right that is economically strong prior to consumption-medium copies being available to the public and weak thereafter. In the first phase, only development-medium copies exist, so copyists must copy from the protected medium if they are to copy at all. In the second phase, copyists can freely copy from consumption-medium copies, diminishing the economic relevance of the drawing-medium protection that persists as a legal matter for copyright's lengthy term. Copyright scope does not shift as a legal matter upon transition from the strong phase to the weak phase, but its economic impact shrinks due to the public availability of the work fixed in a medium from which copies can be lawfully made.

In turn, this two-phase structure optimizes copyright for the transactional theory. In the first phase, protection for only the development medium is strong enough to defuse disclosure dilemmas because only development-medium copies exist and transactional partners must copy from protected development-medium copies if they are to copy at all. (9) In the second phase, copyright's weakness does not undermine any transactional benefits because there are no more disclosure dilemmas once the public has access to consumption-medium copies. (10) Yet, it does reduce copyright's access costs because competitors can freely borrow from works that have been fixed in the consumption medium. A consumption-medium/development-medium dichotomy thus leads to a "win-tie" result under the transactional theory's cost-benefit tradeoff. It slims copyright down to a smaller bundle of sticks that imposes fewer costs (the win) yet still enables copyright to do all of the work that the transactional theory scripts for it (the tie).

To work through this insight in a concrete context, this Article presents a case study on media discrimination in subject matter in architectural copyright. Architecture provides a compelling case study for two reasons. First, building designs are one of the few subject matters in which copyright has actually enforced media discrimination in subject matter. Second, there is a reasonable, although far from airtight, case to be made that media discrimination in subject matter is...