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Wednesday, March 02, 2011

Are Meritless Claims More Prevalent in Copyright? Part 2 of 3

This is the second of a series of posts considering whether something about copyright's statutory damages remedy is driving an increase in meritless cease-and-desist letters. In Part I I considered the origins of copyright's statutory damages remedy, and concluded that it's not really possible to draw a straight line from movie studio or record label lobbying to the statutory damages we have today. That matters because it means that nothing about statutory damages has recently changed that might explain a recent change in C&D-letter practices. But what about other changes in copyright law? It could be that something else is occurring that, in combination with statutory damages, is producing more strike suits, or at least "strike" cease-and-desist letters, than are seen in other areas of the law. In this post, I'm going to consider copyright's well-known vagueness problem.

2. Copyright's vagueness. Although Raustiala and Sprigman didn't raise it, one possibility is that the vagueness of copyright law, in conjunction with the availability of statutory damages, encourages owners to send meritless cease-and-desist letters that they would not otherwise send if the law were clear. If the law clearly bars liability, then the amount of damages is irrelevant. If I get a letter tomorrow demanding that I cease my habit of drinking coffee because that will make the moon explode, I'm going to ignore it, even though the damages from causing the moon explode would be astronomical, so to speak; and no one has an incentive to send such a letter because they know that no one would respect it.

There's three forms this concern about unpredictability or vagueness might take: 1) copyright contains more claims that are clear to lawyers but counter-intuitive for non-lawyers; 2) copyright contains a greater proportion of claims where liability is more or less clear but the resulting damages are unpredictable; 3) copyright contains more claims where liability is inherently unclear to everyone.

First, one class of vague claims is the set of all claims that are clearly meritless to lawyers--that would be Rule 11 sanctionable if raised in a court filing--but not to non-lawyers. That is, legal rules that do not conform commonly held beliefs. Cease-and-desist letters might exploit this gap by getting putative defendants to stop practices that in fact do not violate anyone's rights. Copyright certainly has its fair share of counterintuitive rules. But it's worth noting that this is a problem more with the substance of copyright law than the precision with which that substance is identified in the doctrine. Clarifying the law therefore won't do much good, because the claims are already legally frivolous by definition. Nor is changing the law to make it more intuitive to laypersons necessarily the right response. Outcomes that are counter-intuitive to laypersons abound in the law generally--indeed, it's probably to a large degree what "thinking like a lawyer" is all about. The phenomenon is driven by the fact that the law has, in many areas, an internal logic that eludes easy synopsis for nonlawyers. As a result, it is possible to bluff one's way to a settlement when dealing with an unrepresented or poorly represented party. But this is not a problem that is particular to copyright law. It might be the case that copyright produces results that are unnecessarily counter-intuitive to laypersons, and therefore unnecessarily creates such opportunities. But it's not at all obvious that this is the case. In fact, my own discussions with non-lawyers shows that, in many cases, their view of the exceptions and defenses to copyright infringement claims are often excessively cramped. Nonlawyers often believe that titles are copyrightable, that attribution is a defense, that fair use has strict percentage-based limits, that digital copies are always infringing. I don't know that we should be altering the law to match those expectations.

A second category of uncertainty is not uncertainty as to liability, but uncertainty as to damages. That is, the argument might be that statutory damages produce such an extreme variance in the amount of damages available, seemingly unconnected to the actual harm produced by wrongdoing, that calculating legal risk is impossible. It is true that statutory damages produce a extremely wide range of awards, particularly when dealing with a defendant infringing on numerous works. But the typical cease-and-desist letter is not sent to a peer-to-peer filesharer, it's sent to someone like Park Life Gallery allegedly making use of a particular work. The range of potential statutory damages against Park Life was from $200 to $150,000.

The problem with this argument is that you don't need a statutory damages provision to get damages awards that are hard to predict. Any punitive damages award is going to have, by its nature, an extremely wide range of variability, although less now that the Supreme Court has placed due process limits on it. Even actual damages can be difficult to predict. Personal injury plaintiffs and defamation plaintiffs often claim huge amounts for pain and suffering or damage to reputation. And there may also be a claim of consequential damages. At the initial stages of a dispute, a plaintiff in any number of areas of law may be claiming huge amounts of damages ultimately far out of proportion to whatever award they ultimately collect. Obviously some have decried this situation; the point here is that it's not immediately obvious that copyright's statutory damages provision--outside of the peer-to-peer context--makes it any worse.

The final class of unpredictability consists of those claims that fall into a neutral zone between violating and not violating the law. Some of those will ultimately win, and some will lose, but the neutral zone represents an area where the outcome is difficult for anyone to predict--parties, lawyers, or even judges. The concern is that some claimants will send letters with respect to claims in the neutral zone that would ultimately lose. If copyright has a wider neutral zone than other laws, then assuming an even distribution of claims, more such claims will fall in that boundary zone.

But while copyright undoubtedly has a wide "neutral zone" between clear liability and clear absence of liability, it's not obvious how the width of that zone by itself could drive more C&D letters. Consider two areas of law:

The law on the left is copyright--it has a small core of certain liability, a thick zone of uncertain liability (becoming progressively less probable the further out you get), and then finally certain lack of liability in the white area. The law on the right is something else--tax, let's say. It has a large zone in the middle of clear liability, a thin zone where liability is difficult to predict, and then passes into clear non-liability. Not that in either case, the amount of potential liability is identical. The only difference is that copyright has fewer claims that yield certain liability. Why would this generate more C&D letters? I don't see how it would. In fact, it seems like it would generate fewer. More claimants would be deterred from bothering with an uncertain claim. The mere width of the zone of uncertainty, by itself, shouldn't generate more threats of litigation.

Of course, it might be that copyright reaches too far--that some of what's in the uncertain zone on the left should be (according to some theory of how copyright should properly function) clearly outside any potential liability. But that's not really an argument about the harm of uncertainty--it's an objection to the current scope of copyright law. The solution there is not to clarify the law, or reduce statutory damages, but change the substance of the law to match the theory.

In Part III I'll consider a third possibility for what might be driving an increase in copyright C&D letters that seem overly aggressive.

Posted by Bruce Boyden on March 2, 2011 at 06:09 PM in Intellectual Property | Permalink


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