Abolishing the Derivative Works Right in Copyright, Or, Why Legalizing “The Grey Album” Makes Economic Sense

I’ve just posted a draft paper to SSRN titled Faulty Math: The Economics of Legalizing “The Grey Album.” The Alabama Law Review has kindly agreed to publish it in Volume 59 this winter. The paper examines the incentive-based justifications (primarily economic) for giving copyright owners control over derivative works – in other words, for allowing J.K. Rowling to control who makes movies, Legos, and even earrings based on her Harry Potter novels. Using available empirical data and relevant theoretical models, the paper argues the economic case for the right is weak at best; given its costs in achieving efficient, diverse, rapid production of cultural goods, the sensible move would be to eliminate the adaptation right from copyright’s bundle of entitlements. The paper examines the necessary legal moves to achieve this end, explores complications and challenges created by overlap among copyright’s grants, and suggests the continued viability of the derivative works right can best be ascribed not to economics, but to other motives: the desire to protect the linkage between an author and her expression, and the sense a creator deserves the benefits that flow from her work. Abstract below the jump.

The abstract for the paper:

From an economic perspective, giving copyright holders the right to control production of derivative works – works that transform their expression, such as the movie version of a novel – is unjustified, even harmful. Current scholarship either defends this entitlement as economically sensible or partially reconfigures it. This article assesses the dominant economic rationales for derivative control, and finds them weak at best. Unlike other copyright scholarship, this piece argues that since the right prevents production of attractive, diverse, cheaper new expression, and blocks the promise of re-mix culture, it should be eliminated. This change would also concentrate attention on the adaptation right’s role as a proxy for other copyright concerns, primarily the risk of derivatives substituting for initial works. The article proposes re-configuring copyright law to unfetter transformative expression while safeguarding copyright’s other entitlements. Finally, it concludes by suggesting that economic arguments cover more deeply held beliefs, based on personality theory or labor-desert conceptions, supporting control over adaptation.

8 Responses to “Abolishing the Derivative Works Right in Copyright, Or, Why Legalizing “The Grey Album” Makes Economic Sense”

  1. [...] A very interesting theory…. I must admit it’s a tempting idea… Here’s the abstract: From an economic perspective, giving copyright holders the right to control production of derivative works – works that transform their expression, such as the movie version of a novel – is unjustified, even harmful. Current scholarship either defends this entitlement as economically sensible or partially reconfigures it. This article assesses the dominant economic rationales for derivative control, and finds them weak at best. Unlike other copyright scholarship, this piece argues that since the right prevents production of attractive, diverse, cheaper new expression, and blocks the promise of re-mix culture, it should be eliminated. This change would also concentrate attention on the adaptation right’s role as a proxy for other copyright concerns, primarily the risk of derivatives substituting for initial works. The article proposes re-configuring copyright law to unfetter transformative expression while safeguarding copyright’s other entitlements. Finally, it concludes by suggesting that economic arguments cover more deeply held beliefs, based on personality theory or labor-desert conceptions, supporting control over adaptation. Posted by md on April 12th, 2007 | Filed in Law, IP, and Standards | [...]

  2. Ah-ha. This will provide me with the ammunition I need to triumph in the policy section of my Principles of IP exam, I’m sure. At least, that is the rationale I will use in reading it instead of studying. ;)

  3. On first sight, for me the right to make a 1 to 1 transformation from book to movie seems extremely different from what the remix-culture embodies. So I am not sure one can compare those two or make an argument justifying the one with the other. but that’s just on first sight and I might have more to say after actually reading the article ;)
    Lastly from a european perspective one also has to think of the moral rights of the author who has a very strong interest in controlling how is work is transformed into another medium (especially movies sometimes slaughter the underlying book).
    Lastly on a policy level one has to ask who would benefit. Most likely (as always) it would not be the poor but creative independent scene but the already big firms having access to relevant markets that now can exploit copyrighted works in another medium and especially can take advantage of the huge merchandise market (which for independents is virutally inaccesible)
    So I am more than sceptic.

  4. Although my gut reaction as a DJ is in favor of the argument (and I look forward to reading it), As a scholar and an activist I think Till has a very good point at the end, (which reminds me of Chander and Sunder’s point regarding the value of public domain in “The Romance of the Public Domain”): Do we care only about total productivity gains (which I would guess, since this appears to be an economic article, is the goal here), or does the distribution matter?

    How would this development in affect the balance of power between the big content industries and individuals, or indeed between the developed nations and less developed ones (where the culture industries may be where they are more immediately competitive)?

    I look forward to seeing if this is addressed!

  5. Thanks for the great comments! I appreciate very much the interest.

    - Luis: Citing this article on an exam might well qualify as malpractice. :) At least by me as a professor… How’s law school life treating you?

    - Till: The hard part of a derivative work is thinking about how much expression the new author has added, versus merely re-using the initial author’s expression. A highly faithful movie version of a novel seems less new, but of course even transforming words into an audio-visual medium is a not-insignificant achievement. Second, authorial moral rights would be a reasonable rationale for the derivative works right, but I’d object to how they are implemented in some EU systems. Most works are derivative in some way; allowing lock-up by an author under moral rights may cede too much ground to a creator who has already benefited from the work of other authors. Finally, the policy issues are tough, but I think the article makes a reasonable case that opening up re-use promotes competition, enables authors to serve niche markets, and enables multiple creative approaches to material: if I think I can make a better movie version of the novel – one that will be attractive to more consumers – I should have that chance.

    - Larisa: I agree that distribution matters. Descriptively, I think that eliminating the derivative works right empowers individual creators, and may well enable niche voices to flourish. These are distributional concerns. As for North-South concerns, those are more difficult, since they bring up the interplay between national and international copyright and trade. Open source software may be a compelling idea here: its (contractual) freedom to adapt the code is very attractive to developing countries, by reducing cost and encouraging experimentation.

  6. [...] I was moved to mention Derek Bambauer’s very interesting article on Abolishing the Derivative Works Right in Copyright after seeing a couple performances by the theater company Elevator Repair Service. They are noted in legal circles for a ridiculous battle with the Fitzgerald estate over their avant-garde performance of every word of The Great Gatsby in “Gatz.” According to an NYT article, [...]

  7. The trick to making mashup culture legal may be a half-step in a different direction: legalize noncommercial creation and copying of derivative works. In some ways this is the opposite of your proposal since this solution has no direct economic consequences one way or the other. This would be a policy choice motivated by everything that shapes our notion of copyright policy *BUT* economics.

    Since everyone keeps jumping up and down about the creative value of mashup culture, this solution would allow that creation. Mashup artists would not be able to directly capitalize on their creations, but they aren’t really supposed to be under current law anyway (although obviously many, like Girl Talk, do).

    This theory basically means modifying fair use so that noncommercial use is automatically fair, while commercial use will still have to be analyzed under our current fair use analysis. And finally, adopting this theory would basically legalize part of what the average non-lawyer considers (wrongly) that fair use is: noncommercial use, pure and simple. Of course the definition of “commercial” would be batted around, but hey, it’s a start, not nearly as radical as your proposal and would have the same creative, if not economic, consequences.

  8. My choral arrangements of songs are clearly derivative works. They do not compete with publishers’ offerings, and they might add some further revenue (via royalties) to the creator/copyright owner of the songs. However, the copyright owner (publisher) has not allowed me to create an arrangement without paying a large fee (my opinion). Even then, I am not allowed to earn any money for my derivative creations — among other restrictions. If a song is recorded and released, anyone else can also release their recording of it by simply paying royalties. Why shouldn’t printed music be handled in the same manner?