Citation: Peter DiCola & Matthew Sag, An Information-Gathering Approach to Copyright Policy, 34 Cardozo Law Review 173 (2012)
In a nutshell:
In An Information-Gathering Approach to Copyright Policy, Peter DiCola and Matthew Sag argue that the government’s recurring role in disputes between copyright owners and new technology firms is best understood as an informational problem rather than a distributional one, and that policy tools should be matched to each government institution’s capacity to gather reliable information and to prompt private licensing deals.
Summary
The article studies “content-technology disputes”: the industry-scale conflicts that erupt whenever a new technology for distributing copyrighted works threatens the incumbents, from player pianos and radio through VCRs, file sharing, and webcasting. Previous scholarship treated these conflicts either as two-player games between content and technology or as questions about allocating property rights and liability rules. We add the state as a third player and shift the question from who should win to which government institution has, or can obtain, the information needed to assess a new technology’s impact. The article profiles the informational strengths and weaknesses of Congress, the courts, the Copyright Office, the FCC, the antitrust agencies, and the executive branch. Congressional hearings, for example, produce lobbying positions rather than economic evidence, which helps explain failures like the Audio Home Recording Act of 1992; litigation produces discovery and expert testimony but is limited to the parties before the court.
Four case studies apply the framework. The piano roll dispute shows the Supreme Court’s decision in White-Smith v. Apollo and the 1909 Act’s compulsory license emerging from private negotiations that Congress encouraged and monitored. The ASCAP-radio case study shows that blanket licensing, usually celebrated as a spontaneous private ordering solution, was produced under decades of Department of Justice antitrust pressure and remains subject to a consent decree. The Sony litigation over the VCR illustrates the virtues of uncertainty and delay: the feared harm to movie studios never materialized. The webcasting case study, the most detailed in the article, documents how the “agree-or-arbitrate” royalty model set rates in an information vacuum, stifled Internet radio for a decade, and repeatedly dragged Congress back into a conflict it had tried to exit.
The conclusion applies the framework to the rejected Google Books Settlement, which the court declined to approve partly because the class action mechanism could not generate the right kinds of information, and to the SOPA/PIPA controversy, which repeated the century-old mistake of drafting copyright legislation without the technologists at the table.
Why read this article?
The article contains what was, at the time of publication, the only comprehensive account of the government’s role in webcasting royalties, tracing the story from the Digital Performance Right in Sound Recordings Act of 1995 through Webcasting I and II, the Webcaster Settlement Acts of 2008 and 2009, and the PurePlay Settlement that kept Pandora alive. Readers also get chronological timelines of the piano roll, ASCAP-radio, and VCR disputes with institutional detail that standard tellings omit, and a survey of the information-gathering capacities of every federal institution that makes copyright policy. Anyone designing a compulsory license, whether for orphan works or for AI training data, will find the discussion of rate-setting design failures directly useful.
Further Reading
Robert P. Merges, Contracting into Liability Rules: Intellectual Property Rights and Collective Rights Organizations, 84 California Law Review 1293 (1996) – Merges shows how copyright owners holding property-rule entitlements can contract into liability-rule institutions like ASCAP; DiCola and Sag build on this account by documenting the government pressure and supervision behind such arrangements.
Tim Wu, Copyright’s Communications Policy, 103 Michigan Law Review 278 (2004) – Wu argues that copyright law has an under-recognized role in regulating competition between rival disseminators of creative works, a perspective closely aligned with the article’s focus on content-technology disputes.
Jessica Litman, Digital Copyright (Prometheus Books 2001) – Litman’s history of the DMCA’s passage shows how copyright statutes are drafted through negotiation among invited industry insiders, a process the article criticizes on informational grounds.
Arti K. Rai, Engaging Facts and Policy: A Multi-Institutional Approach to Patent System Reform, 103 Columbia Law Review 1035 (2003) – The closest methodological precedent to the article, asking which government institutions are best suited to make patent policy based on their fact-finding capacities.