Private Copyright Reform

Abstract

The government is not the only player in copyright reform, and perhaps not even the most important. Left to free market negotiation, risk averse licensors and licensees are contracting around the statutory license for certain types of copyright-protected content, and achieving greater efficiency via private ordering. This emerging phenomenon, herein termed “private copyright reform,” presents both adverse selection and distributive justice concerns: First, circumvention of the statutory license goes against legislative intent by allowing for the reduction, and even elimination, of statutorily mandated royalties owed to non-parties. In addition, when presented without full term disclosure, privately determined royalty rates can lead to industrial and statutory adoption of inaccurate “market” valuations. Finally, private copyright reform can exacerbate market inequalities by leaving smaller, less powerful parties with a weaker, less effective statutory regime. These concerns could be addressed by comprehensive copyright reform, an ambitious and lengthy process at best. The concerns might also be eliminated by making compliance with the statutory license mandatory, thereby eliminating private copyright reform as an option. Recognizing the efficiency-enhancing value of private copyright reform, however, this Article leaves the option to circumvent in place, and instead suggests two modest statutory amendments to alleviate the adverse selection and distributive justice concerns presented. Private copyright reform also challenges traditional intellectual property doctrine; specifically, it questions the efficiency of statutory licenses and collective rights organizations, while also raising questions of fairness around the ability of private parties to make law. While resolution of these doctrinal questions is outside the scope of this Article, the recent proliferation of private copyright reform suggests they are ripe for reconsideration.

Keywords: copyright, law & technology, compulsory licensing, compulsory licenses, collective rights organizations, collective valuation, private law making, statutory amendment, statutory licensing, private ordering, efficiency