The Normativity of Copying in Copyright Law

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III. THE BENEFITS OF SUBSTANTIAL SIMILARITY

Having seen how substantial similarity embodies an underappreciated structural dimension of the copyright entitlement and allows utilitarian and rights-based considerations to enter into the infringement analysis, we now move to identifying the benefits that are likely to flow from it. The advantages that are likely to accrue to the copyright system from this process are both formal and substantive. This Part identifies and discusses three such benefits of this analytical process: (i) it is likely to result in courts and judges exhibiting a greater degree of candor and forthrightness about the values that they are seeking to instantiate in the functioning of copyright law; (ii) it enables the bifurcation of copyright law's guidance for upstream and downstream actors; and (iii) it will allow the fair-use doctrine to focus on considerations unique to the defendant's actions, the core of a "defense."

A. Fine Tuning Copyright's Upstream and Downstream Guidance

As an incentive mechanism for creativity, copyright law is concerned with guiding behavior. Its promise of limited market exclusivity is thought to guide behavior by encouraging the very production of new creative works among authors. (276) Yet, this promise represents only one side of the story. As a mechanism of liability, copyright law is also about signaling to potential defendants the range of behavior that will be tolerated before liability is imposed. (277) It thus operates as an incentive not just for independent creativity but also for sequential or derivative creativity, in which defendants use and copy protected work in producing their own works. The distinction between the two incentive effects may usefully be characterized as "upstream" and "downstream," respectively. (278)

Copyright's upstream-guidance function seems to pose few problems in practice. Its promise of some protection for minimal amounts of creativity in expression forms a fairly robust signal to potential creators. On the downstream side, though, copyright's guidance for potential defendants has long been known to be problematic. Despite its being copyright's principal safety valve, the cost-benefit analysis that fair use entails is often largely unpredictable. (279) This in turn contributes to a significant degree of risk aversion, stifling what may be otherwise socially productive forms of using the protected work. (280) A sequenced ordering of copyright's goals through the substantial-similarity inquiry is likely to go some distance in alleviating this concern and in further fine tuning copyright's upstream incentives.

The second part of the substantial-similarity inquiry--the similarity analysis--can be seen as generating a distinct set of relational directives aimed exclusively at potential defendants--or, downstream creators. Unlike simple directives that operate in the nature of abstract prohibitions on certain kinds of conduct, for example, do not speed, relational directives are aimed at specific individuals, in an effort to protect their legal interests, for example, do not injure X. (281) Tort law is said to consist of relational directives that impose relational legal duties on individuals to act or refrain from acting in a certain way. (282)

It is crucial to appreciate the idea of a relational directive and to distinguish it from its simplistic characterization as a liability rule in the Calabresi-Melamed framework. (283) The law's mere imposition of liability for certain actions does not imply that individuals do not view themselves as being under an obligation to obey the law. In other words, individuals are very often motivated to comply with the law because it is the law and it speaks to them as a set of directives. (284) In pioneering work, Professor Dale Nance showed how the simplified understanding of all tort law as liability rules failed to capture this distinction, which he classified as the distinction between "guidance rules" and "enforcement rules. …