Who Pays for the Law?

A couple of posts discussing the Google Print case have mentioned how they see it as an opportunity to get a court decision clarifying the scope of fair use on line. This makes me wonder: is there a public goods problem with respect to fair use law itself?

Fair use is notoriously fuzzy. Judicial opinions reduce the fuzziness somewhat by providing additional data points. These opinions benefit a wide range of parties by providing them with more guidance. Yet the cost of producing a ruling is borne largely by the private parties engaging in the litigation. So, in theory, will the existing system under-produce fair use law?

Perhaps it’s not meaningful to talk about an “optimal” level of legal guidance. But it remains the case that: (a) many potential fair users (particularly small-scale users) operate with insufficient guidance about what constitutes fair use; and (b) these folks are dependent upon large companies like Google being willing to litigate these (or analogous) issues to a decision.

So, if we want more clarity regarding the scope of fair use, how do we best produce it? Should we somehow subsidize fair use litigation (for example, by fee-shifting)? Or should we rely on a regulatory mechanism, like fair use regulations promulgated by the copyright office? (Michael Carroll of Villanova has a very interesting draft, proposing an administrative solution). Or are we comfortable with the existing level of guidance?

I assume this issue is not unique to copyright, and would be interested to find out whether other areas of the law have adopted responses to this.

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1 Response

  1. Bruce says:

    Interesting idea. Now that many consumers are also producers and distributors of content, the complexity of the rules is becoming increasingly problematic. I’m not sure more legal data points will help, however. For one thing, making sense of multiple data points takes lawyers, which most people don’t have access to. And when the authorities are conflicting, or the analysis complex, even lawyers have trouble stating rules succinctly. Often the best they can do is talk about relative risks (just like doctors do, another area where ordinary consumers have trouble). Regulations are often no better — see, for example, the COPPA or GLB regulations in the privacy area. These add detail to the statutes, but in general, regulatory agencies like to have the flexibility afforded by standards just as much as courts do; and often agencies are loathe to wander too far from the text of the statute. However, these effects might be mitigated somewhat where the rule-adopting agency did not itself have enforcement responsibility.

    One area of law where there is a detailed statute, detailed regulations, and loads of administrative and judicial caselaw that affects ordinary consumers is tax law. But it’s not exactly a model of clarity, as evidenced by today’s announcement from the President’s Advisory Panel on Federal Tax Reform.

    If clarification would on balance be helpful, I suspect (but I haven’t thought through this very hard) the best way to do it would be by a Gordian-knot-cutting simple statutory rule, similar to the reform idea behind the advisory panel’s announcement today. Of course, the problem with such simplifying rules in both copyright and tax is that simple rules are a blunt instrument, and wind up hurting deserving parties on both sides of the line. So, some deserving copyright owners will be subjected to “fair uses” that aren’t in fact fair, while some deserving consumers won’t be able to make legitimate uses. Any simple rule or small set of rules that attempts to cut down the middle will have substantial “uniformity costs.” The question is whether the benefits of uniformity would outweigh the costs.