Gordon (1982)

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1. Relationship between protection (subject matter/term/scope) and supply/economic development/growth/welfare 2. Relationship between creative process and protection - what motivates creators (e.g. attribution; control; remuneration; time allocation)? 3. Harmony of interest assumption between authors and publishers (creators and producers/investors) 4. Effects of protection on industry structure (e.g. oligopolies; competition; economics of superstars; business models; technology adoption) 5. Understanding consumption/use (e.g. determinants of unlawful behaviour; user-generated content; social media)

A. Nature and Scope of exclusive rights (hyperlinking/browsing; reproduction right) B. Exceptions (distinguish innovation and public policy purposes; open-ended/closed list; commercial/non-commercial distinction) C. Mass digitisation/orphan works (non-use; extended collective licensing) D. Licensing and Business models (collecting societies; meta data; exchanges/hubs; windowing; crossborder availability) E. Fair remuneration (levies; copyright contracts) F. Enforcement (quantifying infringement; criminal sanctions; intermediary liability; graduated response; litigation and court data; commercial/non-commercial distinction; education and awareness)

Source Details

Gordon (1982)
Title: Fair use as market failure: a structural and economic analysis of the" Betamax" case and its predecessors
Author(s): Gordon, WJ
Year: 1982
Citation: Gordon, W. J. (1982). Fair use as market failure: a structural and economic analysis of the" Betamax" case and its predecessors. Columbia Law Review, 82(8), 1600-1657.
Link(s): Definitive , Open Access
Key Related Studies:
Discipline:
Linked by:
About the Data
Data Description: The authors unifies the fair use factors into one economic model by analysing two seminal rulings.
Data Type: Primary and Secondary data
Secondary Data Sources:
Data Collection Methods:
Data Analysis Methods:
Industry(ies):
Country(ies):
Cross Country Study?: No
Comparative Study?: No
Literature review?: No
Government or policy study?: No
Time Period(s) of Collection:
  • Non stated
Funder(s):
  • Western New England College School of Law

Abstract

An economic and structural analysis of the fair use doctrine and its place in the copyright scheme reveals that fair use is ordinarily granted when the market cannot be relied upon to allow socially desirable access to, and use of, copyrighted works. This article presents a three-part test for fair use that reflects this focus on market failure, and traces how this test could be incorporated within the traditional approach to fair use. Moreover, the discussion of the Williams & Wilkins opinion, which most closely applies the three-part test, and of the Betamax case, demonstrated that the test can provide a framework in which the courts can directly face the underlying issues that should govern the application of fair use doctrine to new technologies.

Main Results of the Study

  • Where (1) defendant could not appropriately purchase the desired use through the market; (2) transferring control over the use to defendant would serve the public interest; and (3) the copyright owner's incentives would not be substantially impaired by allowing the user to proceed, courts have in the past considered, and should in the future consider, defendant's use "fair." While other approaches to fair use may legitimately be advanced, much of fair use depends on the resolution of these concerns.
  • Contrary to the Court of Appeals for the Ninth Circuit's view in Universal City Studios, Inc. v. Sony Corp. of America (Betamax) 659 F.2d 963 (9th Cir.1981), the "productive" status of a user is at best merely a secondary indicator that these concerns may be satisfied.
  • The courts and Congress have employed fair use to permit uncompensated transfers that are socially desirable but not capable of effectuation through the market.
  • It is important that a market failure approach to fair use not be expanded into a justification for allowing court intervention whenever the market fails to reach "perfect" results, for no market is ever perfect. What emerges from the case law and the copyright statute is a focus on individual types of transactions, not a concern with restructuring an entire set of markets to reach ideal goals, and an identification of those imperfections that will not be tolerated because of their particular impact on dissemination and the ultimate goals of copyright. That transactional emphasis is the proper one. It allows particularly desirable transfers that are blocked by market failure to go forward outside the market, but also allows the courts to impose liability where widespread use of this bypass would cause substantial injury to the copyright owner.

Policy Implications as Stated By Author

  • The market approach will provide a guide both to ascertaining where the public interest might lie in a given case, and to identifying those occasions on which a court may appropriately substitute its evaluation of the public interest for its usual refusal to second-guess the copyright owner.
  • A market approach can serve as a means for applying fair use to newly emerging uses of copyrighted works made possible by developing technologies
  • By unifying the various traditional fair use factors into one economic model, the article aims to serve as an aid to predicting fair use results and as a guide to future development of the doctrine.

Coverage of Study

Coverage of Fundamental Issues
Issue Included within Study
Relationship between protection (subject matter/term/scope) and supply/economic development/growth/welfare
Green-tick.png
Relationship between creative process and protection - what motivates creators (e.g. attribution; control; remuneration; time allocation)?
Harmony of interest assumption between authors and publishers (creators and producers/investors)
Effects of protection on industry structure (e.g. oligopolies; competition; economics of superstars; business models; technology adoption)
Understanding consumption/use (e.g. determinants of unlawful behaviour; user-generated content; social media)
Green-tick.png
Coverage of Evidence Based Policies
Issue Included within Study
Nature and Scope of exclusive rights (hyperlinking/browsing; reproduction right)
Exceptions (distinguish innovation and public policy purposes; open-ended/closed list; commercial/non-commercial distinction)
Green-tick.png
Mass digitisation/orphan works (non-use; extended collective licensing)
Licensing and Business models (collecting societies; meta data; exchanges/hubs; windowing; crossborder availability)
Fair remuneration (levies; copyright contracts)
Enforcement (quantifying infringement; criminal sanctions; intermediary liability; graduated response; litigation and court data; commercial/non-commercial distinction; education and awareness)
Green-tick.png

Datasets

Sample size: 2
Level of aggregation: Ruling
Period of material under study: Non stated


Sample size: 1
Level of aggregation: Economic model
Period of material under study: Non stated