15 Transnat'l Law. 187
WHEN IS FAIR USE FAIR?: A COMPARISON OF E.U. AND U.S. INTELLECTUAL PROPERTY LAW
Eric Allen Engle [FNa1]
Copyright © 2002 University of the Pacific, McGeorge School of Law; Eric Allen Engle
Table of Contents
||Introduction: Intellectual Property in National Law...............
||The United States and European Intellectual Property Regimes.....
|| A. The U.S. Regime..................................................
|| 1. Public Domain..................................................
|| 2. Fair Use........................................................
|| a. Epistemological and Methodological Considerations: Is Fair Use Possible? ........................................................................................................
|| b. An Economic Analysis of Copyright and Fair Use: Is Fair Use Desirable?.........................................................................................................
|| i. Justification of the Fair Use Doctrine via Economic Analysis of Law.........................................................................................................
|| ii. The Chicago School's Efficient Capital Market Hypothesis...........................................................................................................
|| iii. Customary Law and Public Domain of Information Published Via Internet........................................................................................................
|| iv. Proposed Standard: Rebuttable Presumption of Public Domain Over Information Published on the Internet..................................................................................................
|| B. European Regime..................................................
|| 1. Points of Convergence in Anglo-American Law vis-à-vis the Continent..........................................................................................................
|| a. Historical Origins..........................................
|| b. The Idea/Expression Dichotomy..............................
|| 2. Points of Divergence in Anglo-American IP Law vis-à-vis the Continent.........................................................................................................
||The International Intellectual Property Regime.....................
|| A. Berne.............................................................
|| B. TRIPs.............................................................
|| 1. TRIPs' Stated Telos...........................................
|| 2. TRIPs' de facto Telos.........................................
|| 3. TRIPs' Methods of Enforcement................................
|| C. Anarchic Polyphony...............................................
||Areas of Conflict in International IP Law...........................
|| A. TRIPs.............................................................
|| 1. Reverse Engineering...........................................
|| 2. Software Patents...............................................
|| 3. Plant and Genetic Data .......................................
|| 4. Place Names....................................................
|| B. Fair Use..........................................................
||Conclusion: Can Fair Use and TRIPs Be Harmonized?..................
I. Introduction: Intellectual Property in National Law
in technology have radically reduced the cost of production and
dissemination of information. The explosion of information technologies
exemplified by photocopy machines, cassette recorders, computers, fax
machines, and Compact Disc Read-Only Memory (CD-ROM) burners present
serious challenges to copyright law [FN1]
both nationally and internationally. [FN2]
These transformations have created a global market in information. The
international system has accordingly created legal structures to govern
that market, notably the World Intellectual Property Organization (WIPO)
and Trade-Related Aspects of Intellectual Property Rights (TRIPs).
However, those structures are not always adequate to govern the new
technological realities because they often depend on legal concepts
which predate the era of instant world wide information, specifically
the Berne system of Conventions. The “new” structures thus merely
incorporate the existing national standards. These facts create the
potential for abuse by the creation of “double standards.”
reliance on national standards cannot create a unitary intellectual
property (IP) regime because the common law and civil law systems are
based on different rationales and presumptions which lead to legal
plurality--and conflict. *189
systemic rationales of IP in the United States (U.S.) and the European
Union (E.U.) are not necessarily contradictory and could be reconciled.
However, TRIPs' stated objectives of open trade and universal IP
standards are also hindered by economic nationalism which results from
competition and leads to the misuse of IP law as a form of veiled
protectionism. Therefore, despite the practical reality of technological
convergence--the blurring of boundaries between telecommunications,
multimedia, cinema, television and internet and the theoretical
possibility of a convergence of common law and civil law--trade tension
and legal conflict are inevitable.
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fact that trade law is abused to achieve protectionist ends, whether
expressed legally as a fraud on the law or abus de droit, stands in
fundamental contradiction to the free trade rationale on which
international IP law is founded. Further, the protectionism that
contradiction presents is bad for the aggregate global economy. As has
been shown, open trade benefits society as a whole but is also
detrimental to certain elements of society, notably inefficient,
uncompetitive, and protected businesses. This is illustrated in the
domestic industries do better under closed trade (“protectionism”),
though society as a whole does better under open trade (“free trade”).
Hence, open trade, while socially beneficial, is resisted. Yet, overt
protectionism is theoretically indefensible, and so it is often masked
either by “cultural,” “environmental,” or even “developmental” claims.
While “environmental” and “ecological” concerns are legitimate in their
own right, they are generally used as facades for trade restrictions in
the name of sub-optimal protectionism--and reduced social wealth. From a
perspective of global wealth, the optimal trading system would be a
generalized regime of free trade with specific exemptions to encourage
third world economic development.
these reasons, the divergent and asymmetrical national rules in IP law
present another instance of veiled protectionism. IP law is one more
tool for consolidating U.S. global hegemony and the dominance of U.S.
businesses in the fields of software, biotechnology, and cinema through
the creation of a global trading system, open in appearance, yet based
on closed proprietary information. To achieve this end, the United
States has adopted a two-pronged strategy of information: freedom in the
United States (the defensive prong of the strategy) and strong
proprietary information overseas (the offensive prong of U.S. strategy).
This two-pronged strategy tends to favor large companies generally, *190
U.S. companies, and disfavors their competitors. This two-pronged
strategy goes too far, however, and will call into question the very
hegemony that the United States seeks to consolidate.
this strategic error of “overreach” can be corrected by a simple
tactical retreat: the United States merely would have to abandon its
domestic defense of information freedom exemplified by the fair use
doctrine. This tactical retreat would mean the end of the United States
as a “data haven,” and the failure of the “defensive” domestic/consumer
arm of the United States' IP strategy. Yet, that tactical defeat would
preserve a U.S. strategic victory: even if higher standards of IP
protection are imposed within “data havens” such as America (or China)
via TRIPs, U.S. companies will still maintain their dominance because of
the stricter global IP regime created by TRIPs. The U.S. strategy to
consolidate its hegemony via open trade will only fail if domestic
populist forces in the United States force the U.S. government to reject
the WTO-TRIPs--for example, following a condemnation of the double
information standard. Such an outcome would of course indicate a
strategic defeat of U.S. efforts to consolidate a global free trade
regime and even the collapse of the WTO--and is thus entirely unlikely.
Therefore the U.S. strategy really cannot lose: even if the United
States is forced to reject the “defensive” free information arm of its
strategy (the U.S. as a data haven), more restrictive IP laws abroad
will remain in force guaranteeing the dominance of the United States' IP
industries. The costs of tactical retreat would thus be borne not by
U.S. transnational companies, but by consumers.
raises a threefold criticism of TRIPs: First, and most problematic, is
the fact that TRIPs will lead to proprietary data monopolies at the
expense of consumers. Second, TRIPs may help to establish a double
standard of information protection which favors U.S. consumers
generally, and large U.S. corporations particularly. Third, TRIPs will
confirm and maintain U.S. dominance in IP markets. This last and
admittedly weakest critique is contingent on the second, and depends on a
price model of monopolistic firms which is outside of the scope of this
author hypothesizes that entry costs and economies of scale indicate
that the natural tendency of capital is to tend towards monopoly. This
author also adopts as a hypothesis that monopoly pricing is determined
by the threat of competition and the desire to have the highest price
possible: monopolies price their product in direct consequence of
competition or lack thereof. In other words, a monopoly or near monopoly
will sell at the highest price possible which will not incite
competition, but in the event of competition will reduce price as needed
to eliminate competition. Through price manipulation and legal double
standards, the U.S. dominance of IP fields in culture and software and
biotechnology will be able to eliminate competition.
these hypotheses do not lead to the self-evident conclusion that
monopoly is inefficient. Monopolies, according to this hypothesis, are
not inevitably inefficient with respect to consumers, but can be
contingently inefficient. Monopolies will only sell at prices favorable
to consumers in the *191
the threat of competition. Without at least the threat of competition,
monopolies will behave as rational economic actors and maximize profits
by increasing prices. This is one of the many reasons to oppose the
monopoly right granted by the state, which is the essence of every IP
claim. The necessity of competition and fairness argue against double
standards, and in favor of a unitary IP standard based on open
To be sure, there is an easy method to defuse this unfair system which imposes monopolistic proprietary information [FN3]
and double standards at the expense of the consumer. As noted
previously, U.S. and continental European perspectives on intellectual
property law are not necessarily nor inevitably in conflict. By
expanding common law conceptions of intellectual property to include the
moral rights of authors it would be possible to transpose the common
law doctrine of “fair use” into the international arena. Such a
transposition would better serve the interests of consumers, and at the
same time eliminate unfair double standards in IP law. A global fair use
regime based on a reinterpretation of the fairness doctrine to include
authors' moral rights would be seen as more legitimate, and thus would
be more likely to successfully consolidate the liberal global trading
regime. In contrast, the current U.S. strategy seeks to impose a double
standard and will necessarily be met with resistance strong enough to
undermine systemic legitimacy. Thus, not only questions of justice, but
also questions of realpolitik lead to the conclusion that the better way
to forward international IP law is to reinterpret the fairness regime
to account for author's droit moral, and to transpose the reinterpreted
regime to the international arena via TRIPs.
II. The United States and European Intellectual Property Regimes
there is some commonality between Anglo-American common law and
continental civil law conceptions of intellectual property, there are
also a number of striking divergences. Differences occur not only at the
level of positive law (object and duration of protection) but also in
theory. However, these theoretical divergences are not irreconcilable.
On the other hand, there are also many common points between the two
legal systems. These common points form the basis of integration of the
global intellectual property regime as implemented under TRIPs.
Certainly, comparing and contrasting the common law and civil law IP
systems will explicate the tensions in the global intellectual property
regime as manifested in TRIPs and the WTO, their causes, and their
A. The U.S. Regime
the common law provided limited protection for authors. Copyright was a
monopoly, limited in time, granted to protect authors in the exclusive
exploitation of their creative works. Thus, at common law, the general
rule was that there was no legal protection, with the exception of works
which were both published and listed a copyright notice. [FN4]
Even then the work had to be creative and original, and the duration of the copyright was limited to fourteen years. [FN5]
By statute in the United States, this presumption is reversed. [FN6]
There is a presumption of protection. Notice of copyright and publication are no longer required. [FN7]
Furthermore, the duration of protection has been extended in time to the life of the author plus seventy years. [FN8]
1. Public Domain
the general rule today, unlike the past, is that creative writings are
automatically protected under copyright without the requirement of
copyright notice or filing, there are, of course, exceptions to the
general rule of protection. First, and most importantly, is information
in “the public domain.” When a copyright on a work expires, the work is
said to enter into public domain. Works in the public domain are not
subject to copyright. U.S. government publications are considered in the
public domain, and as such, can be freely reproduced without cost or
permission by any person. [FN9]
Although copyright of derivative works of works in the public domain is
permitted, the underlying source remains in the public domain.
the public domain seems clear as a concept, there are some ambiguities.
Often this is due to under-litigation--because the public domain is
“free” there are no battles over it. So, the question of whether public
domain is defined as all that which is not subject to copyright (that is
a definition in the negative), [FN10]
or is an emanation of the common law conception of “res nullius” [FN11] *193
and ultimately Roman law appears to be unanswered. [FN12]
Ambiguity also appears in the court's case law doctrine (later
incorporated into the copyright statute) of public domain in that the
term has two different significations: “public domain” can signify
either public lands, or works which are owned by no one and which may be
used by anyone. [FN13]
also leaves unanswered the question whether an author can donate his
work to the public domain. One theory argues that works can be “donated”
to the public--and donation in the common law is irrevocable. Another
theory argues that the copyright is in fact maintained, but that the
author has given an unlimited license to the work. This question is
relevant for derivative works because a public domain donator might
later wish to revoke that donation to prevent derivative works. Under
the former theory, revocation of the donation would be impossible; and
under the latter theory, it might be impossible if, for example, the
license was at the will of the licensor.
2. Fair Use
Another major exception to the presumption of copyright is the “fair use” doctrine. [FN14]
The doctrine of fair use is not a recent development in U.S. law. In
fact, the fair use doctrine in the United States was first elucidated by
Justice Story and definitively traces its roots to British common law. [FN15]
Fair use, like copyright, is predicated upon an economic rationale: [FN16]
fair use exists to remedy market failure; [FN17]
and new technologies make mass copying inexpensive and represent a potential market failure. [FN18]
use doctrine can be expressed most simply in terms of an economic
equilibrium analysis: when the benefit to society of the breach of the
authors' monopoly outweighs the benefit of the author's monopoly, the
information may be used despite the fact that it would otherwise
exclusively belong to the author. [FN19]
This fact normatively describes the position of law and economics and
empirically tends to demonstrate that position--that law is developed as
a function of its tendency to maximize social wealth. [FN20]
other words, the fair use doctrine is both more necessary and more
contentious in the contemporary global market than it was in the past
when markets were still national or regional and copying was costly.
This is because the internet is driving down the cost of copying
information, and the cost of diffusing such information is quickly
approaching zero. Therefore, information can now be diffused instantly
and globally at almost no cost. This is, in fact, common practice. With
the internet, images or sounds are downloaded and uploaded, sometimes
sometimes commented, and sometimes linked back to their source or to
other works. Are such derived works or links permissible? According to
fair use, possibly. Internet authors who “borrow” images without
permission, but then “link” the image back to the source would be more
likely to be considered as “fair users” as would editors or commentators
about images. Perhaps citing or advertising that source can weigh in
favor of finding a use “fair.” [FN22]
fundamental principle, that fair use consists of a balancing of
economic interests, is expressed by the court more precisely. Case law
has developed and defined the four factors which determine whether a use
is fair as follows:
#1: Purpose and character of use. The courts are most likely to find
fair use where the use is for noncommercial purposes, such as a book
#2: Nature of the copyrighted work. The courts are most likely to find
fair use where the copied work is a factual work rather than a creative
Amount and substantiality of the portion used. The courts are most
likely to find fair use where what is used is a tiny amount of the
protected work. If what is used is small in amount but substantial in
terms of importance--the heart of the copied work--a finding of fair use
#4: Effect on the potential market for or value of the protected work.
The courts are most likely to find fair use where the new work is not a
substitute for the copyrighted work. [FN23]
a. Epistemological and Methodological Considerations: Is Fair Use Possible?
fair use guidelines are flexible--if not indeterminate. This
flexibility, while it permits the court to decide cases on their
individual merits, can also be criticized as capricious, unprincipled,
and prone to abuse--a critique which can be leveled at balancing tests
Is that critique valid? In other words, is fair use fair?
answer that question, one must understand the epistemological
foundations of fair use. That will also allow us to determine the
possibilities and limits for fair use as a solution to the problem
facing global IP law via incorporation into TRIPs.
multivariate balancing test is, like many other balancing tests in U.S.
law, founded upon the legal realists' rejection of binary “bright line”
categorical analysis in favor of multivariate balancing tests. Though
the realists' rejection of bright line categorical analyses is not in
fact well founded, fair use is still epistemologically solid. The fact
that the realists' epistemology leads them to a general methodological
rejection of categorical analyses is not equivalent to finding the
methodology proposed by realists, interest balancing tests, to be
necessarily or even generally ill founded. Balancing tests, like
bright-line categorical analyses, are only contingently well founded,
but can be well founded depending on terminological certitude and
legal epistemology incorrectly rejects “bright line” categorical tests
(e.g. “copyright” /” not copyright”) on the following grounds: while
categorical analyses are unambiguous, they are at best teleologically
blind, and at worst, teleologically vicious. When teleologically
vicious, formal manipulations are *196
more or less than the mask of class dominance. When teleologically
blind, formal manipulations ignore whether substantive outcomes are in
fact just, and elevate the procedural form over the substantive result.
The realists' conclusion is a methodological rejection of categorical
bright line analysis, such as “copyright/no copyright,” in favor of
“balancing tests,” such as fair use. Their rejection is, however, ill
analyses require an exact methodology, i.e. terminological and
empirical certitude, and strict application of formal logic. Since the
realist revolution of the 1930s, those methods are criticized and
generally rejected as rigid formalism. However, the realists' rejection
of formal logic is overly-simplistic: the realists ignore that formal
logic and empiricism are perfectly compatible as methodological tools in
the search for truth. If balancing tests, favored by the teleological
interpretation realism prescribes, can be evaluated and determined
according to objective empirical evidence, then so too can “bright line”
categorical analyses. There is no empirical difference between
determining the “weight” to be assigned to a “factor” in a multi-variate
balancing test and determining whether a “bright-line threshold” has
been crossed. At the empirical level, the realist argument that flexible
“balancing tests” are better than “formalist bright-line tests” is
line of reasoning shows why the realist critique is overly-simplistic.
Further study reveals why that critique overstates its premise. The
realists argue that formal logic is at least abused if not misused.
Logic can of course be abused. However, the realists ignore that formal
logic is only contingently, and not necessarily, manipulable. [FN25]
The manipulability of formal logic is contingent upon a combination of
terminological inexactitude--which can exist--and intellectual
dishonesty: it is not inevitable. If all formal logic were merely a
manipulation designed to mask the raw exercise of power, then no logical
argument would be admissible. [FN26]
premise, however, is self-contradictory and leads to a conclusion which
voids most nihilist discourse. It is also empirically untrue: even
tyrannies seek to justify their exercise of power, and in some cases,
the justification is valid. Just as no regime is entirely just, no
regime is entirely unjust.
above described logical contradiction defuses most nihilist discourse
whether such discourse is presented as legal realism or post modernism.
Many post-modernists raise irrationalist arguments similar to the
realists: members of both those schools of thought assert that there is
no truth or that all truth is relative. That position leads, however, to
the conclusion that one must reject logical argument! The antinomy in
either case (legal realism or post modernism) is that it is illogical to
use logic to argue that one cannot or should not use logic. *197
is no truth, or if all truth is relative, then statements such as “there
is no truth” or “all truth is relative” are logically empty of meaning.
The antinomious conclusion is, however, the necessary and inevitable
conclusion which most post modern and realist epistemology leads to, and
must lead to, if we take their assertions of truth nihilism or
relativism seriously--and not as a mere sensationalist foil for a
healthy truth skepticism which they generally are.
the position of realists and post-modernists taken to its logical
conclusion does in fact lead to an impermissible antinomy, a qualified
realism is admissible. The statement “the abuse of formal logic leads to
some injustice” is perfectly admissible--and is in fact empirically
true and possibly even necessarily true. The statement “the use of
formal logic always leads to injustice” is: (1) empirically untrue and
(2) logically antinomious. The first, a qualified realism, is admissible
and does not overstate the realist critique. The second is not: it goes
too far. [FN27]
Truth skeptics and realists have some points--logic can be, and
sometimes is, manipulated. But truth skeptics and realists should be
careful not to take their points too far, lest their nihilism also
annihilate their own discourse via the antinomy described. That
annihilation necessarily occurs whenever realists or post modernists
assert a truth statement purporting to negate the existence of truth
statements. This annihilation happens for example when they attempt to
simultaneously assert that: “all moral values are relative” and “no
truth exists.” Those two statements are in fact logically incompatible.
They cannot be asserted simultaneously in logical discourse. They are
antinomious--the former heterologically the latter autologically.
this leads to the conclusion that the linguistic indeterminacy and
supposed flaws of formalism which led to the replacement of “bright
line” categorical tests by interest balancing tests, such as fair use,
were not as grave as realism proposes. Thus, realism is an imperfect
solution to an ill-defined problem: interest balancing is just as
manipulable as “bright line” categorical hermeneutics.
flaws in the relativists' positions, their arguments are so successful
that contemporary axiology generally limits itself to market values and
ignores “subjective” moral values. Economic analyses are ascendant
because they can claim scientific objectivity and thus legitimacy.
Economic arguments are, or at least appear to be, empirically
quantifiable, and therefore verifiable, and thus objective. Thus, in the
search for substantive justice, legal realism has given judges the
necessary tools to allow the deployment of their subjective
will--without however any moral telos to guide that will. So the realist
critique, which *198
ultimately a critique of formalism's supposedly absent teleology, falls
apart for lack of foundation. The teleological critique of formalism
presented by realism depends upon an objectivist axiology which realism
itself helped to destroy! [FN28]
If all moral values are merely subjective, then only economic values
are scientifically objective, i.e. quantifiable and verifiable. Thus,
the judicial willpower realism unleashes is now exercised to serve the
interests of the wealthy.
is this epistemology relevant to fair use? Contemporary legal
epistemology generally is at least skeptical toward the existence of
truth and rejects the existence or at least the cognizability of
objective moral values. If “no truth exists” or “all values are
relative”--statements which we have shown to be logically void, but
which are nonetheless in vogue because they are shocking and their less
extreme versions are well founded--then economic empiricism is the only
remaining scientific argument, which explains the contemporary
ascendancy of economic analyses. Thus, in anglo-saxon copyright law, the
subjective moral rights of authors have little “weight” in the face of
“objective” economic considerations. Correcting a flawed methodology
would be one step toward harmonizing fair use and droit moral.
than arguing within the presumption that economic value is the only
value or the only objective value, methodological critiques of fair use
would best question the epistemology upon which balancing tests such as
fair use are founded. An epistemological critique of the realists and
post modernists is possible because truth negationist epistemology is
incorrect. True statements do in fact exist. It is true that not all
arguments are verifiable, and that not all arguments are falsifiable. It
is also true, however, that some arguments may be verified, or at least
falsified, and that not all arguments which are falsifiable necessarily
imply a verifiable contrary position. Having established the
objectivity of its epistemological foundations, the best critiques of
fair use will then attack the methodology of balancing tests. First,
they will question the pseudo-empirical foundations of balancing tests
generally. Determining which factors are to be chosen and what weight
they are to be given are ultimately decided by judicial willpower, which
negates the supposed objectivity of “value free” empiricism. Next, the
methodological critique will point out that balancing tests are as vague
and manipulable as categorical analyses--and possibly more so, after
all, there are more terms to play with.
these possible attacks, one nevertheless concludes that fair use is
epistemologically and methodologically speaking well founded. First,
the realists' epistemology can be defended, though only in a qualified
manner. Though truth negationism is inadmissible, truth skepticism is
permissible. Second, the realists' methodology--balancing tests--is no
more (or less) “objective” than categorical *199
analyses. Third, the realists' methodology is not capricious, or at
least no more capricious than categorical analyses, because it is
empirically grounded upon data which are often, though not necessarily,
quantifiable and verifiable.
reasons bring one to conclude that it is possible to transpose the fair
use standard into international law, as it is epistemologically and
methodologically well founded. Whether such a transposition is
necessary, desirable, and consistent with international law is
considered in the remainder of this paper. The next section will
elucidate from an economic analysis that the fair use exception to
copyright maximizes social wealth, and that its transposition into
international law is thus desirable.
b. An Economic Analysis of Copyright and Fair Use: Is Fair Use Desirable?
one might attack the economic foundation of fair use as
pseudo-empiricism, if economic quantifiability, and thus verifiability,
is admissible, then one must conclude that an economic analysis of fair
justifies that doctrine because fair use tends to maximize social wealth.
i. Justification of the Fair Use Doctrine via Economic Analysis of Law
rationale of copyright is that information production and diffusion are
antithetical: measures to encourage information production discourage
information diffusion and vice versa. For example, granting information
monopolies will encourage the production of information--discovery or
creation--but will discourage the reproduction of that
information--copying. On the other hand, allowing free reproduction of
information--encouraging diffusion, would at the same time discourage
the creation of intellectual works through discovery or invention
because there would be less incentive to create.
author disagrees with that classical rationale. Presented herein is a
skeptic's critique that economic analyses are sometimes only
pseudo-empirical due to empirical difficulties of evaluation of worth
and macroeconomic measurement. This author argues that the particular
facts of the internet indicate that economic incentives to produce and
disseminate information are not contradictory, but are mutually
reinforcing due to derived works and synergies. [FN30]
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The relation between the quantity and the quality of information as a “trade-off” is illustrated below:
TABULAR OR GRAPHIC MATERIAL SET FORTH AT THIS POINT IS NOT DISPLAYABLE
graph also demonstrates the empirical limitations of macro-economic
market analysis. Macroeconomic analysis is often limited to estimations
and is not perfectly precise. This chart does illustrate the point that
analyzing the information market is difficult in part due to the fact
that changes in available information have the effect of shifting the
production possibilities frontier. In other words, the information
supply curve is dynamically reactive. Essentially, the internet “shifts”
the information production possibilities frontier dramatically to the
right, allowing for the low cost instant global diffusion of
information. This effect of new information technology on the
information supply curve is shown below:
1 shows the production possibilities prior to technological innovation.
Curve 2 shows the effect of a new technology increasing productivity on
the production possibilities frontier.
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graphs are simplified because of the empirical limitation of economic
models to which we add a further caveat: economic analyses of
information and information technology markets are heterogeneous. We do
not see one uniform *201
“information,” but a range of possible goods “high quality restricted
(i.e. expensive) information” or “lower quality open (low cost or free)
information” in differentiated markets, such as books, television,
movies, cd roms, sound recordings, and video recordings. If one accepts,
nevertheless, that an economic analysis can give at least a rough guide
for public choice--an acceptable range of possible values with definite
maxima and minima--then one may extrapolate the hypothesis that the
aggregate supply and demand curves for information look something like
problem of proprietary information is that granting a property right
over information limits diffusion of that information: although
available information could be distributed more openly, it is not, in
order to encourage the creation of new information. However, much of the
protected and thus restricted information would be produced even if
there were no legal protection at all. This can be shown when one
considers the ready availability of open source software. Operating
systems, word processors, graphic arts applications, games . . .
virtually every application which one could desire is available via the
open source licensing system. Rather than encourage the creation of new
information, restrictions on information such as copyright only
guarantee that the proprietors of that information will be able to
extract rents from those clients who *202
are unaware of the existence of alternative sources of information or information technology, such as GNU.
IP represents a necessary protection for authors, the classical
economic rationale should be rejected in favor of a more modern economic
rationale which recognizes that IP is a monopoly granted by the state
leading to entry costs and transaction costs which reduce aggregate
wealth. If new technologies shift the production possibilities frontier
dramatically to the right, the monopoly which IP law represents pulls it
back to the left--to the detriment of society as a whole.
ii. The Chicago School's Efficient Capital Market Hypothesis
one may disagree with the classical economic dichotomy of information
production versus dissemination, one must nevertheless recognize that
the key contemporary “problem” in IP is that information can be
produced, copied, and distributed globally at little or no cost beyond
production. This fact of low costs in the production and diffusion of
information tends however to support the Chicago school's efficient
capital market hypothesis (ECMH). While many are critical of ECMH, the
fact that free information improves the efficiency of capital markets is
one more argument in favor of free information. However, the critiques
of ECMH are relevant because they show the tensions of IP and its
implications for other fields. We also discuss ECMH because even if the
classical view that information production and dissemination are
dichotomous are true, the freedom of information would still be
desirable, as it leads to more efficient capital markets; and
consumption, according to the neoliberals, leads production. However,
the ECMH is in fact only partially correct because some market
imperfections are inevitable due to the inevitability of cyclicity and
unemployment. The ECMH proposition that free information leads to
greater efficiency is true. Thus, freedom of information is desirable
even if the production and diffusion of information were dichotomous
because that freedom leads to greater capital market efficiency.
The ECMH proposes that information is a perfectly distributed good and that there are no transaction costs in information. [FN32]
However, while information is almost instantly available at very low
costs, finding and using that information is neither instant, nor
costless, nor evenly distributed. Further, the Chicago theory ignores
the existence of false and misleading information, as well as the
inevitability of some transaction costs such as legal formalities and
translations. [FN33] *203
Chicago theory also ignores market entry costs. Although thinly
capitalized start up companies are normal in the English speaking world,
this is not the case in civil law jurisdictions. Moreover, even if a
thinly capitalized company can enter the market with low costs, it is
still limited by material capital requirements for production, such as
machinery, vehicles, and land. So while information costs are dropping
all the time, entry costs and transaction costs have not been
eliminated. Thus capital markets are not perfectly efficient. [FN34]
However, instant global information does tend to improve capital market
efficiency, and for that reason, should be encouraged. While markets
are not as efficient as the Chicago school proposes, they could be
rendered more efficient by reducing the protections of copyright, which
would lower costs of market entry and transactions.
considered the epistemological and empirical problems of the fair use
doctrine, we now turn to the possibilities and problems for legal
transformation via a study of the law and practice of internet
iii. Customary Law and Public Domain of Information Published Via Internet
free information makes good economic sense, then what legal structures
can or could support such a rule? One argument in favor of the free use
and copying of information on the internet is that such copying is
already widespread in practice and thus constitutes customary law. At
its simplest, the argument is that trying to enforce internet copyright
is impossible. A more refined argument is that internet copyright
violation is largely in good faith. The best argument is that there is a
legally binding custom that information published via the internet
shall be presumed to enter thereby into the public domain. This
argument, while very attractive, will be shown to be legally
definition of customary law in the roman law, civil law, and common law
is nearly identical: a usage is a generally accepted practice of a
society adopted and observed over time. If a usage is also believed to
be obligatory in practice, i.e. sufficiently widespread and ancient,
then the usage eventually becomes, as a matter of law, obligatory.
Custom is “a usage which had acquired the force of law.” [FN35]
argument is that because free copying is a practice sufficiently
widespread as to constitute a usage, and believed to be legally
permitted, the practice of internet copying constitutes customary law.
However, custom in the common law is required to have been historically
dated from “time immemorial.” So, there probably is no customary law
here because the relevant time has not *204
Further, custom cannot be asserted in opposition to a contrary
statute--and such a statute does exist. The practice of downloading and
uploading is by definition very recent. Thus, while this author does
observe the practice of wholesale copying and linking on the internet,
more often than not made with the innocent but mistaken belief that such
copying is legal, and thus objectively believed to be the legal
standard, such a usage has not yet ripened into customary law because a
contrary statute exists. Additionally, even if the statutory bar of such
a custom could be avoided through a very broad interpretation of fair
use, a claim of customary public domain still faces the question as to
whether all custom must date from “time immemorial”-- the correct
position, at least under common law--or whether “new” customs can
arise--which is in fact the case of international law. Therefore, the
argument that information should be legally free in theory because it is
in practice, while intriguing, is not valid--at least not yet.
related argument to public domain via customary law would be an
assertion that internet information wrongfully acquired can enter into
the public domain through prescription. However, prescriptive claims
require around twenty years of open, notorious, and adverse possession
to ripen into good title and, traditionally at least, concern only real
iv. Proposed Standard: Rebuttable Presumption of Public Domain Over Information Published on the Internet
the juridical arguments for public domain via custom or prescription
are weak, there are good economic arguments for adopting such standards.
Public domain via custom or prescription would be a practical legal
mechanism to achieve a socially beneficial economic outcome. Rather than
supporting the drastic measure of prescription, one might propose that
there should be a rebuttable presumption that information posted to the
internet enters the public domain, thereby it can at least be further
copied for diffusion via internet, for reasons of economy. Allowing the
free reproduction of information--where such is already technologically
possible--maximizes wealth not only of society but also of individuals
in society. Information which is not distributed is as useless as any
other undistributed good. Even more importantly, information is
different from physical goods in that it is not eliminated by
consumption. True and accurate information actually increases in value
as it is diffused and used.
presumption of transfer to public domain via internet publication can
be supported in that the internet was created by the state. The argument
can also be supported by allowing “owners” of information the
opportunity to rebut the presumption by taking the necessary practical
steps to prevent the copying of “their” information. Technologically
speaking, if a creator wishes, one can keep that information publicly
available for consultation only. This is accomplished through the use of
Common Gateway Interfaces (CGIs) (usually written in Java or Perl,
though CGIs have been written in hyperCard using hyperTalk) and also
essentially is *205
programmed to permit distribution of the information, but to prohibit downloading the information.
a CGI or Applet to guarantee the proprietary nature of information is
no more an undue burden on those who wish to appropriate information
than the cost of building fences, walls, locks, and other methods of
protecting and preserving exclusivity in one's tangible property. While
HTML, the difference is not that great. Thus, when weighing the interest
of the public in having low cost, high quality, accurate information
against the interest of private appropriators in rent seeking to take
advantage of suboptimal conditions created by transaction costs, it
seems rather clear that the burden of elaborating CGIs and Applets
(which could then be sold) rightly belongs on the shoulders of the
appropriator--and that the freedom of information rightly belongs to the
should be free, for only then can it be useful. Unlike other products,
information cannot be consumed--only used--and it increases in value
with diffusion. If information appropriators wish to seek rents, they
can do so quite easily by using closed source methods such as applets
and CGIs. Further protection can be added by creating systems of
passwords, or by authorizing access only to subscribers--such as America
Online, one of the most proprietary, and successful, internet services.
the conflict is between the public interest in the optimum mix of low
cost and high quality information, and individual creators or
appropriators of information who are rent seeking. Favoring the latter
can lead to less than optimal situations of semi-monopoly. Such rent
seeking is best illustrated where each individual injury is de minimis,
yet the sum of these injuries over thousands or millions of individuals
translates into millions of dollars. The transaction costs of litigating
each individual person's interests are far higher than the potential
gains to individuals, whereas the costs to the appropriator to maintain
their monopoly is much less than the benefit which accrues to them
because of that monopoly. Rent seekers thrive off of sub-optimal
economic situations, and proprietary information encourages this. Domain
name squatting, the “anti” virus business, and even piracy-for-profit,
are all examples of where transaction-costs encourage sub-optimal
this brief study of U.S. copyright law, we have seen that: (1) U.S.
copyright law is based ultimately on an economic theory--that copyright
should be defined by the economic effects of that right which should be
to encourage wealth creation and distribution, and (2) U.S. copyright
law is consequently ambiguous because it is based on “balancing tests,”
which weigh different factors, and are manipulable.
a close comparison to the E.U. scheme of IP law will demonstrate that
the U.S. law is somewhat less proprietary than European law in that the
fair use exception can be very wide. It is also notable that the U.S.
regime has lower *206
transaction costs than the European regime [FN36]
because it recognizes only very limited moral rights of authors over the integrity of their work (“droit moral”). [FN37]
B. European Regime
1. Points of Convergence in Anglo-American Law vis-à-vis the Continent
a. Historical Origins
first point of commonality between the two systems is their historical
origin. The origins of copyright, both in common law and civil law, are
found in feudal laws licensing printers to publish books [FN38]
as a derogation from or concession of the royal authority. In that
system, the censorship and prior restraints were presumed to be the
rule. Publication was possible, but first had to be granted approval by
the royal government. This presumption has of course been reversed with
the industrial revolution. Today, the presumption is that publication is
legitimate and any limitations upon publication are exceptions from
that general principle.
change shows that information freedom is a relatively recent concept.
Ironically, the post industrial era of information-based production
retains the principle of freedom of information, but limits it severely
through regimes which permit the appropriation of information. Thus,
information freedom is now threatened not by the state, but by the
the appearance of national law systems and legal codifications marks
the end of medieval feudal law and the beginning of contemporary
national law. It is also the point where the different national regimes
of IP law become more clearly defined and thus diverge. Following is a
discussion of those points in Anglo-American IP law which diverge from
b. The Idea/Expression Dichotomy
mentioned previously, there are both theoretical and practical points
of commonality between the Anglo-American “copyright” and the
continental European “droit de la propriété littéraire/Urheberrecht.” [FN39]
One of these commonalities is *207
the idea/expression dichotomy. [FN40]
Essentially, intellectual property law protects expressions of ideas,
but not ideas themselves. Further, both continental European and U.S.
law protect, albeit to different extents, inventions (patent), writings
(copyright), trademarks, trade secrets, and most recently, designs and
models, using similar legal mechanisms.
however, the idea/expression dichotomy can be criticized. As currently
conceived, IP law is epistemologically unsound, as it adopts incoherent
definitions. First, the idea/expression standard breaks down when
analyzed critically. This can be seen most easily in computer programs.
Any computer program can be shown to be an algorithm, i.e. a
mathematical function--and thus an idea. Any computer scientist will
admit that all computer programs are mathematical functions and that
every mathematical function is an idea. Thus, no mathematical function
would be able to be copyrighted because it necessarily must fail the
“idea/expression” test. Numbers, letters, colors, and mathematical
factors cannot be copyrighted--yet any computer program is a
fact, any expression can be characterized as an idea. The distinction
between “idea” and “expression” rests on a false presumption that a
combination of ideas creates an expression somehow different from those
ideas. How many ideas must be combined before the “idea” becomes an
“expression” ? This question is not answered by copyright--because it is
unanswerable. Copyright meets the same problem of censorship: no one
can define an “original expression,” or the difference between “idea”
and “expression,” but everyone claims to be able to recognize whether a
given statement is an “idea” or “expression.”
requirement that the expression be “original” is also contestable. What
is an original expression? How does one determine the “originality” of
the expression? Can one distinguish an original expression from an idea?
An “original expression” must be somehow “superior and anterior” to
competing expressions of the same idea--yet not so “superior and
anterior” as to be an idea. Where did the superior and/or anterior
expression come from? Why is it superior? Why is it not an idea?
Determining how specific or unique or different an idea must be in order
to be considered an expression of some epistemologically prior idea is a
question with no answer due to the problem of infinite regress.
problematic nature of the “original idea/expression” dichotomy can be
illustrated with a concrete example: one cannot copyright the color
blue, nor the shape of a squares. Thus, a painting of a blue square
would probably lack originality, and a blue square might not be
sufficiently distinct to qualify as a trademark. However, a series of
pictures of a blue square which when seen in rapid succession create the
illusion of motion, would probably be an “original” expression.
brings the discussion back full circle: the theoretical indeterminicity
of the specificity required to enable a judge to determine that an
expression is sufficiently “original,” yet not so original as to be an
“idea” and thus capable of being the subject of a copyright. These
distinctions necessarily break down because (1) every expression is
necessarily also an idea, and (2) no expression can be shown to be
“original” without thereby becoming an “idea.”
facts show that copyright is merely a monopoly right given to a
particular combination of existing ideas which serve a useful or
aesthetic purpose. [FN41]
This underscores the position of legal realism and shows that the real conflict in IP law is terms of trade.
2. Points of Divergence in Anglo-American IP Law vis-à-vis the Continent
U.S. perspective on intellectual property is utilitarian and economic.
Copyright is granted because it encourages authors and inventors by
rewarding them for their acts of creation. According to this rationale,
copyright serves, and should serve, to maximize social wealth. [FN42]
The economic foundations of U.S. copyright law explain why the
protection of authors in the United States is less extensive than in
U.S. copyright law contains only very limited rights of authors to the integrity of their person as expressed in the work. [FN44]
Further, these rights of personality are recent and not as extensive as
their European homologues and are subject to the U.S. copyright act's
§107 fair use exception. [FN45]
So, while there is common ground for legal harmonization, the general
conception of copyright in the United States and other common law
jurisdictions is the economic right of an author to property, as opposed
to an emanation of *209
their right of personality. [FN46]
purely economic perspective is not without strife, even within the
United States. This is not because of the question of moral rights,
which are essentially unrecognized, but because of the question of the
political right to freedom of speech. The first amendment to the U.S.
constitution guarantees the freedom of expression. However, there are
instances abound wherein U.S. copyright law within the United States has
limited radical satirical critiques of American society. [FN47]
From a critical perspective, copyright is thus one more agent of
maintaining state dominance--but through “private” entities. In such
cases, it is clear that property rights take precedence over free speech
despite the fact that the U.S. Supreme Court recognizes that state action can impose a prior restraint on commercial speech. [FN49]
Thus, prohibitions of advertising are legal in the United States. [FN50]
However, the case of private action which limits free speech through
copyright and the contradiction that the assertion of a nearly absolute
right to free of speech under the first amendment, and a copyright which
in practice undercuts that supposed right, is generally unrecognized. [FN51]
In this author's opinion, this “blind-spot” represents both the power
and flexibility of an ideology founded on “private free” enterprise and
the lack of conscious perception of that ideology which mutes critiques
of it--powerful enough to generate apparently compelling propaganda, yet
flexible enough to systematically destroy any countervailing propaganda
through the apparently neutral mechanisms of “the free market.”
above discussion highlights why the U.S. regime of intellectual
property is contradictory: it generally forbids state action which
imposes prior restraints on “speech,” and even limits restraints on
state action after publication. At the same time, however, U.S.
copyright law can and does operate as a de facto (or even de jure) prior
restraint on speech due not only to the force of injunctions and fines,
but also to the chilling affect presented by lawsuits.
paradox of the state claiming little or no power over information, yet
enabling the private sector to control information is less evident in
Europe than in the United States. In Europe, generally, the limits
imposed on the power of the state to restrict speech are not presented
as absolute or fundamental. Thus, there is less incongruence between the
public and private spheres in European law. This systemic coherence may
be due to the different rationales each system *210
While the U.S. views intellectual property from an economic and
utilitarian perspective, continental civil law considers intellectual
property from a perspective of the author's moral rights. [FN52]
Thus, rather than social wealth, the focus in Europe is on the integrity of the person.
one of the problems facing the international intellectual property
regime is that the European perspective of droit moral [FN53]
and the U.S. economic perspective are at times contrary. [FN54]
While these rationales are very different in practice, concerns of each
system--social wealth or integrity of the author and their work--do
eventually surface in the other's legal reasoning. [FN55]
However, these “hidden foreign rationales” can in no way be seen as an
actual integration of two different systems. While such parallels do
present the possibility of rapprochement of the two systems, they are
neither consciously expressed as such, nor sufficiently extensive to be
considered as either a harmonization or integration of these two
different world views. In fact, they demonstrate intra-systemic
inconsistency and the need for inter-systemic harmonization.
III. The International Intellectual Property Regime
to the different protections afforded by different states for authors
and inventors under international law, a universal convention was
established in 1883--the Berne Convention. [FN56]
This convention is the point of departure of any discussion of
international intellectual property law. It is the “keystone” or
“centerpiece” of a number of conventions on intellectual, literary, and
industrial property [FN57]
and has gone through many incarnations. [FN58]
However, the other conventions either complete the Berne convention, extend its application, [FN59]
clarify its meaning, or apply it to new areas, [FN60]
such as computers. They also use *211
mechanisms, mutual recognition, and enforcement via treatment of foreign
authors as if they were national authors with a self-help remedy of
non-recognition in the case of breach. The principle discussion will
thus focus on the Berne convention and its continuing role as the center
of the international intellectual property regime, as implemented via
only is the Berne Convention the keystone of international intellectual
property law, it is also incorporated by reference into TRIPs. Its
enforcement is the object of the World Intellectual Property
Organization (WIPO). [FN61]
The TRIPs/WIPO/Berne regime should be understood as an amalgam of
various legal institutions and Conventions which seek to create and
enforce an international IP system along functionalist lines.
the Berne Convention has existed since 1883, the United States is a
very recent signatory, having acceded to the treaty only in 1989. [FN62]
The Berne Convention establishes only minimum standards of protection. [FN63]
Member states are thus free to establish broader protection--though
with the entry into force of TRIPs, such broader protections must not be
contrary to the free trade goals of the World Trade Organization (WTO).
The Berne Convention does not codify an international law of copyright. [FN64]
Essentially, the Berne agreement can be understood as a form of mutual recognition and enforcement. [FN65]
Each member state agrees to protect the intellectual property of other
member states to the same extent as their national copyright holders.
For example, if East Ruritania and South Ruritania were both member
states of the Berne convention, an East Ruritanian would have the same
rights as a South Ruritanian in South Ruritania, and vice-versa.
recognition is achieved through two mechanisms: (1) foreign nationals
of member states of the Convention are treated equally to nationals of
the member state in question, and (2) each member state agrees to treat
member states' nationals (and residents) at least as favorably as a
non-member state (most favored nation status). [FN66]
A case in point is if Britain accorded special protection to
commonwealth copyright holders, and if it were a member of the
Convention, it would have to extend such special protection to all other
members of the Convention.
grounded upon the presumption of a European law perspective of droit
moral: intellectual property from this perspective protects, inter alia,
the moral right of the creator to the integrity of their work. [FN67]
Protection of the economic rights of the creator is seen from this perspective as a secondary goal.
terms of legal culture and history, the emphasis of droit moral on
authors' rights, rather than the right of contract or of consumers can
be understood as an outgrowth of the feudal origins of IP law. Commerce
in Latin countries was, and sometimes still is, viewed with skepticism
as being “base.” The Latin countries have thus favored artisans and
liberal professions rather than commercial enterprises, as can be seen
in their tax and commercial codes. In contrast, commerce in the common
law countries was always and remains not only honorable, but the raison
d'être of much legislation.
might criticize the continental view as being founded upon
inegalitarian medieval conceptions of social status. That perspective
can be defended, however, as the common law on intellectual property
can, and sometimes does, place people before profits. The economic goals
of the utilitarian view and the moral goals of the continental view are
not necessarily contrary: individual wealth and social responsibility
can be mutually reinforcing and could be reconciled. Creating such a
synthesis of the common law conceptions of copyright founded on economic
rationales and consumer rights with continental law's tendency to favor
the integrity of artists is one of the exciting challenges facing legal
theorists and practitioners in this field. In a world rich in data,
win/win solutions are possible.
adopts and seeks to implement the continental perspective. Because it
is founded on a perspective of droit moral, Berne limits the right of
reproduction to a greater extent than the common law. Translations are
an example of the limitation under Berne of the free diffusion of
information in order to respect the author's rights. Under the Berne
convention, it is the author's exclusive right to authorize any
translation of their work.
illustration of the limits that droit moral imposes on authors can be
criticized. It is not the position taken by the United States. Section
103 of the U.S. Copyright Act would grant a copyright of the translator
in his translation but not in the original work. [FN68]
The position taken under Berne limits the potential for wealth creation
and knowledge diffusion. Moreover, it is not always practical: one
cannot, for example, contact a deceased author to obtain their
permission. Will their estate grant such permission--and if so, at what
cost? If the author has sold the rights to the story, has he also sold
the right to authorize translations? If *213
sold that right, is it a failure to respect his moral person to permit
unauthorized translations? Such are the practical and theoretical
positions for which one might critique Berne's position on translations,
in addition to the fact that limiting translations limits human
knowledge making the humanity that much less intelligent. Knowledge,
unlike other information, is not exhausted through diffusion, and in
fact, only increases in value with diffusion, which is why this author
argues that information freedom should be a general principle of
one takes the normative position of free information or proprietary
information, the positive law is clear: the U.S. domestic law and Berne
on translation are in conflict. Will this be litigated under TRIPs? If
so, the outcome would be an order to the United States to change its
domestic law-- unless the doctrine of fair use be transposed into
well as its restriction on translations and parodies of existing works,
Berne has been criticized on other grounds. While the principle of
Berne, mutual recognition of national laws, enabled the convention to
attract most states, its remedy has been characterized as “anemic” [FN69]
In the event that a member state does not respect the Berne convention,
other member states are free to retaliate by non-recognition of the
non-complying state's intellectual property rights. [FN70]
Although this “self help” goal was attainable, it is not sufficient to
enforce a regime based on global rather than local rules. Despite the
origins of Berne in mutual recognition of national standards, the
tendency in international IP today is toward the establishment of
universal standards. This tendency is best exemplified in TRIPs and
other areas of WTO law. Thus, the critique of the Berne enforcement
mechanisms is not as strong as it used to be because of the TRIPs
Dispute Settlement Body (DSB) procedures.
Berne can be criticized for too severely limiting information freedom,
there are exceptions to the exclusive right of the author to permit
transmission of their work. Berne provides exception to copyright for
and news. [FN72]
Does Berne's news exception permit translations of news? This author
would favor such an interpretation--but the treaty does not facially say
raises the question whether Berne and/or TRIPs could contain fair use
exceptions. Our answer is affirmative, but our analysis must be deferred
in order to expose the international IP system under Berne/TRIPs. This
tension, and the difficult transformation from national reciprocal
standards under Berne to a universal global standard, will be considered
in the following section.
stated, the remedy under Berne was inadequate for creating a global IP
legal standard. Thus, TRIPs seeks to create, through the dispute
settlement mechanism of the WTO, an enforceable standard for global
trade. TRIPs is administered by the WIPO, which is an agency of the
United Nations (UN), [FN73]
and an umbrella organization for the Berne, Paris, and other
multilateral treaties on intellectual, literary, and industrial
In 1999, there were 153 member states in WIPO. [FN75]
From these facts, we can conclude that “TRIPs . . . has become an integral part of the multilateral trading system.” [FN76]
What are the rationales underlying TRIPs? Will they interact to create a
unitary global IP law system? If so, will that system be desirable?
1. TRIPs' Stated Telos
The stated mission of WIPO is to promote creative intellectual activity. [FN77]
Encouraging such “creative activity” is to be achieved by lowering trade barriers. [FN78]
While the first goal, promoting creativity, is defensible--and lowering
trade barriers would do that--the monopoly right of patent or copyright
is itself a trade barrier, and thus, contrary to free market
It therefore is more coherent to state that the objective of WIPO is to
reduce transaction costs involved in maintaining the trade barrier
created by copyright, patent, or other forms of intellectual property.
Even if we presume that such were the actual goal, and that creative
activity is encouraged in any respect through monopoly over
dissemination of the created work, that does not change the fact that
such monopoly is a trade barrier.
is not the only contradictory telos in WIPO. Other goals of WIPO have
been stated to be free, predictable, and competitive trade. [FN80]
Those enumerated goals are contradictory, however: free trade is
necessarily unpredictable. If trade is free, then one cannot predict who
will trade what, where, or when. Similarly, “predictable” trade is
necessarily uncompetitive. This is because predictable trade is
administered by de facto or de jure cartels, which fix prices and
eliminate competition. The contradiction of “predictable competition”
can be explained as *215
reflection of the anti-cartel perspective of U.S. competition theory,
and the pro-planning perspective of European industrial policy. While
those goals may or may not be laudable, they are in fact contradictory.
2. TRIPs' de facto Telos
to the fact that the stated goals of the TRIPs agreement are
contradictory, one seeks to discover what the actual goals might be.
Contradictions inherent in these stated goals imply that the actual goal
of TRIPs is to establish a world proprietary regime in intellectual
property regardless of the effect of such a regime on competition. That
result is, in any event, the functional outcome of TRIPs: presumably,
the actual outcomes are intended outcomes. A unitary world IP regime
would, incidentally, serve U.S. interests in consolidating its global
Both TRIPs and the U.S. Digital Millennium Copyright Act (DMCA) consolidate the United States' IP hegemony. [FN81]
TRIPs consolidates U.S. hegemony by extending the enforceability of U.S. copyright. [FN82]
The DMCA consolidates U.S. hegemony by imposing liability on on-line
service providers (OSPs) for the content they host. That makes OSPs
agents of the state as enforcers of property rights [FN83]
--thus consolidating the global IP regime.
DMCA has been criticized as being an overly broad application of civil
and criminal liability to faultless acts (decompilation for illicit
purposes) or omissions (failure to verify and remove illegal on-line
content). Both TRIPs and DMCA are part of a U.S. global strategy to
favor large businesses within the United States at the expense of
foreign and small businesses. This strategy is essentially to establish
the U.S. as a data haven, where freer recompilation and transmission of
data will permit industrial and commercial development. By the same
logic, strongly enforced IP rights overseas will limit information
freedom to impose on the rest of the standards, which will hinder their
competitively and allow U.S. companies to extract rents from their
monopolistic IP rights. For brevity, this strategy will be referred to
as the “double standard.”
attempt to impose a global “double standard” on freedom of information
may not be realized because of TRIPs. That is, however, irrelevant. The
strategy seeks to favor not only U.S. businesses, but especially large
multinationals. Consequently, even if the double standards are stricken
by TRIPs, the U.S. strategy still prevails. In a worst case scenario,
the United States would no longer be a data haven, but multinational
U.S. companies would still retain their market *216
in computer software, entertainment, and biotechnology--and the property
right to exploit that dominance. From the perspective of U.S. business,
the two-pronged U.S. strategy cannot lose. From the perspective of the
U.S. consumer, the strategy is a gamble and may win or lose. From the
perspective of foreign consumers, however, the strategy is a no-win
proposition. Foreign businesses may appear at first to benefit from
strong IP laws but will not benefit as much as U.S. businesses,
particularly if the two-pronged strategy works to impose double
standards. Thus, foreign businesses are at best only “qualified” and
relative winners--and will more likely than not be crushed rapidly by
companies such as Microsoft and Intel as national monopolies become
3. TRIPs' Methods of Enforcement
The legal mechanisms of the TRIPs agreement at first appear relatively familiar. Like the Berne convention, [FN84]
which it incorporates by reference, TRIPs provides for national treatment [FN85]
and most favored nation status. However, where Berne was based on consensus, TRIPs is based on a quasi judicial system. [FN86]
The TRIPs panel reports are automatically adopted. [FN87]
Thus, there will be less opportunity within TRIPs for the establishment
of dual standards such as: fair use/decompilation within U.S.
boundaries versus neither fair use nor decompilation outside the U.S.;
software patents in the United States but not in Europe; or different
treatment of data banks. Whether TRIPs will help to eliminate existing
double standards by imposing a global regime remains to be seen. But
even if it does, the global IP regime would probably still be dominated
by the United States.
C. Anarchic Polyphony
Berne and TRIPs do not yet provide a universal standard. The law here, as elsewhere in copyright, [FN88]
is characterized by anarchic polyphony. [FN89]
Absence of clear rules in this field is in part a result of the
economic stakes involved. The commanding heights of first world
economies are information driven--computer hardware, software,
biotechnology, and avionics are all leading edge industries and are
information intensive. While entertainment and culture is not a capital
but consumer good, it is nonetheless true that even in consumer markets
of the right to consume or diffuse information is key to the
contemporary economy. Due to the magnitude of the stakes involved, a
consequence of the transition from mutually enforced national standards
to a globally enforced universal standard will be characterized by
conflict. Nonetheless, that conflict will operate within the system, and
will neither threaten nor destroy the TRIPs dispute settlement
IV. Areas of Conflict in International IP Law
balance, the United States and European conceptualizations of IP law
are founded on divergent rationales: economic efficiency versus the
moral rights of authors to the integrity of their person as expressed in
their work. The previous discussion clarifies that the supposed
rationales of the WTO and WIPO are in fact internally contradictory
(partly a reflection of these different rationales), and that the United
States' trade strategy takes advantage of this duplicity in its efforts
to impose a double standard favoring large companies generally, and
large American companies particularly. [FN90]
Given these facts, it is hardly surprising that there are contentious
areas within the world IP system, not only between élites and masses,
but also among élites. Next, this analysis examines these contradictions
in order to better understand their resolution through the development
of an international fair use doctrine.
the mechanisms of TRIPs are generally familiar, one should note that
the TRIPs agreement is the only WTO agreement that requires the members
to automatically and definitively incorporate complex substantive legal
structures into national laws. [FN91]
As such, it represents the stunning yet quiet victory of functionalist
methods to achieve global federalism. Further, unlike other WTO
this surrender of sovereignty to an international administrative
tribunal was not linked to any counterpart in social welfare
such as poverty reduction, environmental protection or guaranties of
social minima--although third world states are given a little more time
than first world states to comply with the orders of the Dispute
Settlement Body of the WTO. Thus, the WTO is one more not so quiet
victory of global capitalism over socialism. Unsurprisingly, these facts
lead to both leftist and populist discontent with the WTO. This general
discontent reinforces inter-élite disputes over the substantive *218
international IP law. The inter-élite disputes are focused upon several
specific points of conflict. Those specific areas of conflict in TRIPs
are in fact driven by national or continental interest. Those conflicts
are discussed thoroughly in the subsequent sections.
1. Reverse Engineering
Most computer programmers work in “high level” languages such as C [FN94]
or Pascal, which resemble English. Some programs are written in “low
level” assembler language, which is mnemonic instruction set readable
only by specialists. In the former case, the program must be compiled
and assembled, while in the latter, it need only be assembled. The final
result in either case is machine language--zeros and ones. However,
while compilation is irreversible, assembly is not. Assembled machine
language can be disassembled into assembler (mnemonic codes) and read by
trained persons. Machine code is virtually impossible for a human to
cases involving reverse engineering generally involve the right to
disassemble assembled machine language code (whether compiled and
assembled-- nearly universally the case--or generated directly from
assembler mnemonics). The U.S., which permits reverse engineering even
under the DMCA, [FN95]
pressured Japan, and as a result, decompilation is illegal in Japan. [FN96] *219
the U.S. pressured the E.U. on reverse engineering. In the E.U.,
decompilation of copyrighted programs is permitted only to permit
interoperability of programs. [FN97]
However, decompilation is permitted [FN98]
without condition under U.S. law. [FN99]
No multilateral treaty exists addressing reverse engineering. [FN100]
Thus, absent a statute such as the European directive, [FN101]
reverse engineering of software can be presumed to be legal under
national law because Berne appears silent on the topic. Reverse
engineering is not a violation of copyright because the idea represented
by the program or schematic diagram is an expression, whereas the idea
it embodies cannot be the object of copyright. [FN102]
For this reason, reverse engineering is permitted under TRIPs. [FN103]
This is, of course, an ideal situation for the United States, as
competitors are relatively or absolutely restrained, presuming they
observe and enforce their domestic law. In other words, the United
States has partially succeeded in its objective of inventing itself as a
data haven--which seems, objectively speaking, unfair.
2. Software Patents
further asymmetry in domestic copyright law working to the advantage of
the United States is the differential treatment of software in national
law. Under TRIPs, software is subject to copyright, [FN104]
although the availability of legal protection for databases--stored and
indexed information--remains contentious. In Germany, databases are
subject to fifteen years of protection from creation. In the United
States, under the 1976 Copyright Act, databases lack “originality” [FN105]
and thus cannot be copyrighted. [FN106]
Non-protection of databases may change under TRIPs, [FN107]
but the DMCA did not enact database protection. [FN108]
Though E.U. member states do not permit software patents, [FN109]
under U.S. law, software may be both copyrighted [FN110]
and patented. [FN111]
TRIPs also permits patenting of software. [FN112]
Once again, the asymmetry provides a competitive advantage for the
United States because its IP has greater potential protection than its
European competition. Again, this policy is subject to criticism for
providing an unfair trade advantage to the United States, and thus,
could be litigated under the WTO's dispute settlement understanding
patents can also be criticized on economic grounds as being an economic
hindrance: Strong patent protection is a barrier to market entry, [FN113]
and thus discourages productivity. Software patents create an
“anticommons.” The anticommons is like Hobbe's state of nature--poor,
nasty, and brutish. The anticommons is also like Babylon--each
proprietor has one piece of useful information, but the transaction
costs created by the patent regime prevent the socially useful
combination of these different pieces. [FN114]
If the commons is obliterated from lack of fences, the anticommons cannot be usefully farmed because of too many fences.
anticommons possibly resulting from this raises another justification
for denying patent protection of software. Suppose an author places his
software in *221
domain--and then a plagiarist decompiles the software and patents parts
it. That would be perfectly legal under U.S. law, but it is socially
undesirable. There is a potential nightmare waiting when some patent
“shark” decides to appropriate public domain software via patent. This
demonstrates again that propertarian systems can generate as many
problems as they purport to solve. All of these problems could be
obviated by creating a fair use exception in patent to cure this problem
of market failure [FN115]
This would not, however, resolve the broader international problems.
Such problems can only be solved through the creation of universal
standards under TRIPs, which should incorporate the U.S. fairness
doctrine, mutatis mutandi to account for authors' moral rights (droit
3. Plant and Genetic Data
provisions on patenting plant species and other genetic data have been
criticized as essentially transferring wealth from the third world to
the first world without compensation. [FN116]
This has been one of the main points of contention in North-South
relations, and is one focal points of leftist and populist opposition to
4. Place Names
has also been criticized by some businesses for extending an IP right
of exclusion to geographic place names. Thus, for example “Champagne”
would only be allowed to be so named if it were produced in the
Champagne region in France, [FN117]
much to the chagrin of U.S. producers of “sparkling wine” . This latest
restriction on information freedom is justifiable, however, from a
consumer protection perspective: it essentially amounts to consumer
protection similar to trademark. This can be problematic, however. For
example, Budweiser beer is brewed in the style of Budweis--thus TRIPs'
place names could deprive the leading U.S. beer of trademark protection
of its IP in that mark. Strangely, however, no one seems to object when
first nations such as the Apache see their nation's name used to
describe a web server; or when other nations such as the Blackhawk,
Iroquois, or Kiowa see their nation's name used to describe U.S.
military helicopters. Do the Navajo or Xuni nations have an IP right to
their distinctive adobe architecture and does a certain software company
infringe thereon? This is one more example of how TRIPs favors élite
conclude from these conflicts and the mechanisms for their supposed
resolution that TRIPs serves the interests of élites and is
anti-democratic. Berne merely establishes minimum national standards
which protect the integrity of the author's work as well as the economic
interests of authors. TRIPs, in contrast, examines intellectual
property from a trade perspective. Though TRIPs proponents may claim
that TRIPs “merely” incorporates and implements a more effective remedy
for Berne violations than was provided under Berne, TRIPs in fact goes
much further. TRIPs serves as the “core” of a global intellectual
property regime which may purport to respect authors' integrity, but
which in fact will be directed to advancing the economic interests of
the élites of the industrialized world. Droit moral is from this
perspective, merely a one more trojan horse for opening trade and
extracting resources from the third world. This alone would be
insufficient to spark populist or leftist rejection of the WTO. However,
in combination with the other criticisms raised, including inter-élite
conflicts, we can understand why the WTO generates vehement opposition.
B. Fair Use
should by now be clear, the common law fair use exception is a serious
point of conflict between common and civil law trading partners. This
section first explores the extent of the problem--whether TRIPs spells
the end of fair use. Then, the discussion considers possible solutions
to the conflict over fair use, namely whether fair use can be found in
the Berne treaty.
The status of fair use under international law is uncertain. [FN118]
Some commentators argue that there is no doctrine of fair use in international law. [FN119]
Others argue that although there is no current conception of fair use under international law, [FN120]
international law should nevertheless develop such a standard. [FN121]
The better reasoned view is that a number of points under both Berne
and TRIPs evince the same considerations that justify the common law
doctrine of fair use. Furthermore, the U.S. domestic law should be
judicially reinterpreted to bring fair use into line with U.S. treaty
obligations, notably the observation of droit moral mandated under
Berne. In addition, the fair use doctrine should be transposed to the
international arena. Such transposition and reinterpretation will best
serve the interests of the public.
previously noted, the U.S. doctrine of fair use, at least as presently
interpreted, is incompatible with TRIPs. This is because fair use, like
all IP law in the common law system, is based not on the perspective of
the moral right of the author to the integrity of their personality as
expressed in their work, but upon an economic analysis of social wealth.
This, it provides less protection for *223
authors and more protection for consumers. [FN122]
the fact that fair use as currently understood is contrary to the Berne
Convention, the doctrine of fair use will not disappear immediately,
but only after much litigation and reinterpretation. One possible
outcome could be to adopt a fair use standard internationally. The
transposition of “fair use” to international law would, however, require
reinterpretation of the doctrine to integrate an author's moral rights
(droit moral). That reinterpretation and transposition will not happen
without pressure from the international community through TRIPs. This is
because of internal U.S. law, discussed below.
some states, such as France, are monist and regard international law as
superior to domestic law, this is not the case in the United States.
The United States has a dualist regime. U.S. Judges must interpret U.S.
law and international law to be consistent with each other. However,
where there are inconsistencies, the U.S. law shall control within the
United States unless the international law is considered self-executing,
i.e. containing a provision for the immediate application of the law
upon its adoption. Though the United States is a signatory to the Berne
convention, Berne has been declared both by Congress and judges not to
be a self-executing treaty. [FN123]
This means that absent enabling national legislation, any conflict
between the international and domestic law will be resolved according to
the U.S. domestic law. [FN124]
This explains why TRIPs implies panel proceedings under the DSU to correct U.S. breaches of its treaty duties.
For this reason, TRIPs clearly does not trump domestic copyright law within U.S. borders. [FN125]
However the TRIPs enforcement mechanism (the DSU--of the WTO) means
that TRIPs will slowly, gradually, and inevitably, force the United
States to incorporate and apply the Berne Convention in its domestic
law--though not without strife.
commentators have argued that TRIPs should give deference to cases of
first amendment “free speech” and permit national judges to make
determinations as to the applicability of TRIPs. [FN126]
Given the scope and intensity of conflict in the domain of IP, such
recommendations are utopian. If such a policy could be implemented,
however, it would serve to help bring about the necessary harmonization
of international IP law through transposing the U.S. common law doctrine
of fair use into the field of international law.
fair use as currently understood and applied is inconsistent with TRIPs,
we will probably see a case before the WTO which would litigate section
107(c) of the U.S. Copyright Act. [FN127]
Given the unfavorable decision before the WTO regarding 110(5) of the
U.S. Copyright Act, it is conceivable that the United States will be
forced to abandon the fairness doctrine. However de facto compliance
with TRIPs via judicial reinterpretation of fair use would be sufficient
to meet U.S. treaty obligations under TRIPs. [FN128]
Such a reinterpretation is a necessary precondition to the
transposition of the fair use doctrine to international law because it
is highly unlikely that U.S. trading partners will accept a double
standard which works to give the United States an unfair competitive
advantage. A fair use exception to TRIPs that considers authors' moral
rights would also be consistent with monist theories of international
law. While the United States is a dualist system, many other states are
monist. Thus, by applying the same standard within and outside of the
U.S.--a fair use doctrine which integrates authors' moral rights--the
United States would be able to more easily transpose the doctrine into
international law to the benefit of consumers everywhere.
V. Conclusion: Can Fair Use and TRIPs Be Harmonized?
If the U.S. doctrine of fair use, at least as presently interpreted, is inconsistent with TRIPs, as asserted by some, [FN129]
what remains of the freedom of information? As noted earlier, Berne
does provide a number of provisions that evince the same concern which
is the foundation of the common law doctrine of fair use, namely freedom
of information. Freedom of information interests are asserted in cases
of teaching [FN130]
and also for current news events. [FN131]
It is even possible to argue that satires and parodies are not
“adaptations.” Ordinarily, Article 12 of the Convention requires
authorization for adaptations--but if parodies and satires are not
adaptations then they would be freely produceable. Because the right of
parody is broader in the United States than elsewhere, [FN132]
if satire and parody are not adaptations, then the permissive U.S.
standard would prevail, though only within the United States. This is
only a potential exception, but it could be found if judges choose to
exercise a broad, creative interpretation.
strongest argument that Berne includes its own fair use exceptions is
Article 9(2), which permits local legislation for reproduction where
such does not interfere with the author's interests. Here we see an
economic interest balancing *225
similar to that used in fair use, but with the interests extended to
include the moral right of the author to the integrity of their work.
Thus, these provisions of Berne could be used to justify a modified
fairness doctrine which would consider not only an author's economic
rights, but also their right to the integrity of their personality
(droit moral) and the work which it expresses.
arguments for the existence of an international law of fair use are
revealed within the TRIPs convention itself. One example is the WTO
panel's allowance of de minimis exceptions to copyright. [FN133]
As to patent, TRIPs recognizes that patents should not impair the
advance of technology; and consequently, that patents should not cover
certain acts. [FN134]
Article 30 of TRIPs also provides limited exceptions to a property holder's rights; [FN135]
and Article 30 parallels Article 13. [FN136]
through a wholistic interpretation of all existing legislation, both at
the national and international level, it would be possible to interpret
and develop an international law of fair use. Such creative
interpretation would obviate the attempts to create a dual standard of
free domestic/corporate information and proprietary foreign/consumer
information. An international fair use law would thereby better serve
the interests of consumers because lower entry costs would encourage
wealth creation and competition rather than merely reallocation of
existing wealth. In other words, the free market goals of competition
and entrepeneurialship and the goal of consumer satisfaction are best
served by policies which discourage monopolies of information--
particularly when held by large monopolistic or monopolistic firms.
Research Associate and teacher at the Universitat Bremen; J.D. St.
Louis, D.E.A. Nanterre, D.E.A. Paris II, L.L.M., Universitat Bremen. Mr.
Engle is currently working on a doctoral thesis, and maintains a
personal website at http://www.geocities.com/engleerica.
conclusion, freedom of information in a variety of fields favors
American IP companies at the expense of their trading partners. Because
of this inconsistency, U.S. IP law violates the spirit, and probably the
letter, of the TRIPs agreement. However, the optimal solution in terms
of consumer welfare is not to extend patent law protection of software
to the laws of APEC members and the E.U., nor to eliminate the fair use
exception. Rather, the best remedy is to deny the legality of patent
protection for software in the United States while simultaneously
extending the fair use doctrine to the international arena. That double
standard unfairly favors U.S. companies and risks thereby the ruin of
the freedom of information currently enjoyed by the U.S. consumer under
the fair use doctrine, and the protections offered by an international
IP scheme. Such a solution will not only encourage production and
diffusion of low-cost, high quality information, it will also eliminate
the unfairness of the double standard currently presented by U.S. law.
[FN1]. See Jayshri Srikantiah, The Response of Copyright to the Enforcement Strain of Unexpected Copying Technology, 71 N.Y.U. L. Rev. 1634, 1647 (1996).
[FN2]. See Harold Reeves, Property in Cyberspace, 63 U. Chi. L. Rev. 761, 799 (1996).
[FN3]. See Richard Posner, Economic Analysis of Law 282 (2d ed. 1977).
See generally Bielfield & Cheeseman, Technology and Copyright Law
42 (1997) (summarizing the history of copyright law in the common law).
[FN5]. See id.
[FN6]. See William Patry, Choice of Law and International Copyright, 48 Am. J. Comp. L. 383, 387 (2000) (noting that U.S. copyright law preempts state law).
[FN7]. See 17 U.S.C.S. § 104(a) (2002).
Prior to 1998, the duration was life of the author plus fifty years.
See id. § 302 (2002); see also Cooter & Ullen, Law and Economics 135
[FN9]. See 17 U.S.C.S. § 105 (2002).
[FN10]. See Keith Aoki, Neocolonialism,
Anticommons Property, and Biopiracy in the (Not-So-Brave) New World
Order of International Intellectual Property Protection, 6 Ind. J.
Global Legal Stud. 11, 36-37 (arguing that “[i]n many ways, our
current conception of the public domain is that nobody affirmatively
owns public domain materials. It is this unowned characterization that
is somewhat at odds with a characterization of the public domain of
intellectual materials as a commons”).
[FN11]. See Geer v. Connecticut, 161 U.S. 519 (1896).
[FN12]. See id.
[FN13]. See Black's Law Dictionary 1106 (5th ed. 1979).
[FN14]. See Bielfield & Cheeseman, supra note 4, at 61 et seq. (devoting several chapters to discussing the concept of fair use).
[FN15]. See generally Folsom v. Marsh, 9 F. Cas. 342 (C.C.D. Mass. 1841); DanThu Thi Phan, Will Fair Use Function on the Internet?, 98 Colum. L. Rev. 169 (1998).
[FN16]. See Srikantiah, supra note1, at 1658.
[FN17]. See Wendy Gordon, Fair
Use As Market Failure: A Structural and Economic Analysis of the
Betamax Case and Its Predecessors, 82 Colum. L. Rev. 1600 (1982).
[FN18]. See Srikantiah, supra note 1, at 1647.
[FN19]. See Donald Johnston, Copyright Handbook 88 (1978).
[FN20]. Mathematically, that position can be expressed as: L = f(P), where L is law and P is productivity.
See generally Jeffrey H. Brown, They Don't Make Music Like They Used
To, 40 ASCAP Copyright L. Symp. 195 (1997) (discussing “sampling” in the
[FN22]. See Mathew Africa, The Misuse
of Licensing Evidence in Fair Use Analysis: New Technologies, New
Markets and the Courts, 88 Cal. L. Rev. 1145, 1160 (2000).
See J. Dianne Brinson & Mark F. Radcliffe, Intellectual Property
Law Primer for Multimedia Developers (1994), at http://
www.timestream.com/stuff/neatstuff/mmlaw.html (last visited Mar. 13,
2002) (copy on file with The Transnational Lawyer). Regarding the fourth
factor of the fair use analysis, see Africa, supra note 22, at 1148,
1154 (commenting that “[t]he market affects analysis of fair use is
criticized as circular; essentially every instance of fair use implies
the existence of a market since the user could have purchased the right
to use. The court can always find a market, namely in the person alleged
to have infringed the copyright”).
[FN24]. See Africa, supra note 22, at 1149.
This argument requires that one understand that contingent truth is
only potentially true depending upon circumstances, whereas necessary
truths are true in all times and places.
A post-modernist paradox: if no truth exists, how can the truth that
there be no truth exist? This alone should demonstrate the flaw of
epistemological nihilism and/or moral relativism.
Though the statement “the abuse of formal logic can lead to injustice”
is probably empirically true, it is not empirically true that “all
formal logic is manipulable indeterminate and its application therefore
leads to injustice.” Statements like “all formal logic is necessarily
manipulable, indeterminate, and therefore its application leads to
injustice” are indeed ambiguous, but that ambiguity is due to the
ambiguity of language and not mathematics. Mathematically, the formula: P
X: X = (M § I)--> ~J is perfectly unambiguous and will evaluate to
~J if either M or I or both are true. In pseudo-code this can be
expressed: if (m=1 or I =1), then L:=0.
These facts help to explain some of the paralysis and cacophony in
contemporary legal theory, especially in contemporary American legal
See Cooter & Ullen, supra note 8, at 128-29, 135-36 (2000)
(thoroughly discussing economics and the law on copyright); see
generally Posner, supra note 3.
[FN30]. See Africa, supra note 22, at 1150 (asserting that the fair use guidelines are not broad enough).
See GNU's Not Unix!, at http://www.gnu.org/ (last visited May 5, 2002)
(copy on file with The Transnational Lawyer) (stating that “GNU is a
recursive acronym for ‘GNU's Not Unix’; it is pronounced ‘guh-NEW”’).
Open source licenses essentially provide end users cost-free software
including the software's source code, usually under the terms of the GNU
General Public License (GPL). Unix is an open source operating system
developed originally by the U.S. Government. It is the core of Linux, a
freeware operating system alternative to Windows or MacOS. The plural is
unices. See Linux Online!, at http://www.linux.org/ (last visited May
5, 2002) (copy on file with The Transnational Lawyer). The fact that
businesses pay for software when cost-free substitutes are available
shows that market actors are either not in fact rational, or that
information is not a perfectly distributed good--and possibly both.
See Investor Home, The Efficient Market Hypothesis & The Random
Walk Theory, at http://www.investorhome.com/emh.htm (last visited Mar.
13, 2002) (copy on file with The Transnational Lawyer) (giving a general
overview of EMH as well as links to EMH articles).
See Worapot Ongkrutaraksa, Efficient Capital Markets: A Review of
Literature, at http://
www.geocities.com/WallStreet/Exchange/3663/Worapot09.html (last visited
Mar. 13, 2002) (copy on file with The Transnational Lawyer).
See Joint Impact, Transaction Cost Economics--A Summary, at http://
members.ozemail.com.au/~>cgold/transaction%costs.htm (last visited
Mar. 13, 2002) (copy on file with The Transnational Lawyer).
See The Electric Law Library, at http:// www.lectlaw.com/def/c161.htm
(last visited Mar. 13, 2002) (copy on file with The Transnational
See generally R.A. Weinknecht, Grundlagen des nationalen und
internationalen Urheberrechts (in German), at http://www.haagen.de/_
themes/copyrights/grundlagen_urheberrecht.htm (last visited Apr. 28,
2002) (copy on file with The Transnational Lawyer).
See generally Carl Settlemeyer, Between Thought and Possession-Artists'
“Moral Rights” and Public Access to Creative Works, 41 ASCAP Copyright
L. Symp. 370 (1997) (discussing an author's moral rights under American
[FN38]. See Ruth Okedji, Towards an International Fair Use Doctrine, 39 Colum. J. Transnat'l L. 75, 94 (2000).
An approximate translation of droit de la propriété littéraire,
intellectuelle et industrielle would be the right of literary,
industrial and intellectual property, which is conceptualized as several
different property rights--with appurtenant moral rights--corresponding
roughly to copyright, patent, trademark, trade secret and designs.
Urheberrecht literally means “the right of priority” and is not,
strictly speaking, conceptualized as a property right which would be
(Eigentum, and here intellectual property, i.e. Geisteseigentum) but
rather as a right of personality. The fact that intellectual property
protects moral as well as economic interests is also true in French
law--as reflected in the term droit moral. French and German law both
offer artists and writers the protection of the moral integrity of their
[FN40]. See Michael Lehmann, TRIPs, The Berne Convention, and Legal Hybrids, 94 Colum. L. Rev. 2621, 2627 (1994).
[FN41]. This is, of course, the general critique of legal realism: law is only the mask of power.
[FN42]. See Okedji, supra note 38, at 172.
[FN43]. See Carlos Correa, Intellectual Property Rights, The WTO and Developing Countries 137 (2000).
The U.S. copyright law provides for limited rights of an author, which
are similar to droit moral. These rights include the obligation of
citation and that his work not be mutilated. However, these rights are
alienable. See 17 U.S.C. §106(A)(a) (2002).
See id. For a brief explanation of the difference, see, e.g., Betsy
Rosenblatt, Moral Rights Basics, at http://
cyber.law.harvard.edu/property/library/moralprimer.html (last visited
May 5, 2002) (copy on file with The Transnational Lawyer). Essentially,
moral rights protect the integrity of the author's work and the right
of the author to associate their name with their work. As such, they
are a personal rather than a property right.
See Christine Chinni, Droit d'auteur Versus the Economics of Copyright,
40 Copyright L. Symp. (ASCAP) 241 (1997) (discussing the economic
rationale of the common law versus the moral rights perspective of
[FN47]. See Wendy Gordon, A Property Right in Self Expression, 102 Yale L. J. 1533, 1535 (1993).
[FN48]. See id. at 1536.
[FN49]. See, e.g., San Francisco Arts & Athletics, Inc. v. United States Olympic Comm., et al., 483 U.S. 522 (1987); see also FW/PBS, Inc., DBA Paris Adult Bookstore II, et al. v. City of Dallas, et al., 493 U.S. 215 (1990).
[FN50]. See Rubin v. Coors Brewing Co., 514 U.S. 476 (1995).
[FN51]. See Gordon, supra note 47, at 1536.
[FN52]. See Okedji, supra note 38, at 172.
See Carolyn McColley, Limitations on Moral Rights in French Droit
d'Auteur, 41 Copyright L. Symp. (ASCAP) 422 (1997) (explicating the
rationale of droit moral).
[FN54]. See Okedji, supra note 38, at 172.
[FN55]. See 17 U.S.C. § 106(a) (2002) (incorporating limited rights of droit moral).
[FN56]. Berne Convention for the Protection of Literary and Artistic Works, Sept. 9, 1886, revised in Paris on July 24, 1971, 828 U.N.T.S. 221 [hereinafter Berne Convention].
For links (in German) to the various treaties, see Juristisches
Internet-Projekt Saarbrücken, Abteilung Urheberrecht, “Normen,”
available at http://www.jura.uni-sb.de/urheberrecht/normen/intver/ (last
visited Apr. 28, 2002) (copy on file with The Transnational Lawyer).
Rome Copyright Convention of 1928, available at http://
visited Apr. 28, 2002) (copy on file with The Transnational Lawyer).
[FN59]. For example, the Paris Convention of 1971 extends the Berne regime to industrial property, such as patents. See Paris
Convention (in English), available at
http://www.wipo.org/eng/iplex/wo_par0_.htm (last visited Apr. 28, 2002)
(copy on file with The Transnational Lawyer). The Paris Convention also
extends the Berne regime to former colonies. See Okedji, supra note 38,
The WIPO Copyright Treaty is also implemented under Berne. See WIPO
Copyright Treaty, Art. 1, available at http://
www.wipo.org/eng/diplconf/distrib/94 dc.htm (last visited Apr. 28, 2002)
(copy on file with The Transnational Lawyer).
WIPO Convention, available at http://
www.wipo.org/members/convention/index.html (last visited Apr. 28, 2002)
(copy on file with The Transnational Lawyer).
[FN62]. See Okedji, supra note 38, at 105.
[FN63]. See id. at 106; see also Tyler Newby, What's Fair Here is Not Fair Elsewhere, 51 Stan. L. Rev.1633, 1645 (1999).
[FN64]. See Okedji, supra note 38, at 104.
See WIPO, International Protection of Copyright and Neighboring Rights,
at http://www.wipo.org/eng/general/copyrght/bern.htm (last visited Apr.
28, 2002) (copy on file with The Transnational Lawyer).
[FN66]. This principle has been carried forward with TRIPs. See id.
For an excellent summary of droit moral, see Karine Arnault, Le Droit
Moral en Droit Communautaire dans la société de l'information, at
(last visited Apr. 28, 2002) (copy on file with The Transnational
See U.S. Copyright Office, Library of Congress, Circular 14: Derivative
(last visited Apr. 28, 2002) (copy on file with The Transnational
[FN69]. See Newby, supra note 63, at 1646.
[FN70]. See id.
[FN71]. See id.
[FN72]. See id. at 1647.
[FN73]. See Abbott, et al., The International Intellectual Property System 591 (1999).
[FN74]. See id. at 303.
[FN75]. See id. at 697.
[FN76]. See id.
[FN77]. See id. at 303.
[FN78]. See id. at 322.
See Aoki, supra note 10, at 13 (arguing “[f]irst, one should note that
there is a deep contradiction between the definition of an ‘intellectual
property right,’ that is, a state-backed monopoly handed out to
individuals or firms, and the popular neoliberal vision that valorizes
“privatization” and free market economics”).
[FN80]. See Abbott et al., supra note 73, at 316.
[FN81]. See generally Jonathan
A. Friedman & Francis M. Buono, Using the Digital Millennium
Copyright Act to Limit Potential Copyright Liability Online, 6 Rich. J.
L. & Tech. 1 (Winter 1999-2000), at http://www.richmond.edu/~
jolt/v6i4/article1.html (last visited Apr. 28, 2002) (copy on file with
The Transnational Lawyer) (focusing on OSP liability under DMCA).
[FN82]. See Abbott et al., supra note 73, at 909, 913.
[FN83]. See id. at 913.
[FN84]. See id. at 317.
[FN85]. See id. at 591.
[FN86]. See id. at 353.
[FN87]. See id. at 353.
See Alex Morrison, Hijack on the road to Xanadu: The Infringement of
Copyright in HTML> Documents via Networked Computers and the
Legitimacy of Browsing Hypermedia, J. Info. L. & Tech. (1999), at
http:// elj.warwick.ac.uk/jilt/99-1/morrison.html (last visited Apr. 28,
2002) (copy on file with The Transnational Lawyer).
[FN89]. See Newby, supra note 63, at 1645.
See Patry, supra note 6, at 485 (noting that the United States attempts
to impose its unilateral will by insisting on the autonomy of its laws,
despite adhesion to the Berne Convention).
[FN91]. See Abbott et al., supra note 73, at 719.
[FN92]. See Okedji, supra note 38, at 83.
[FN93]. See id. at 82.
C is a computer programming language which compiles instructions from a
pseudo-English dialect into machine code. The syntax of C is the core
C++ are derived from C. C is the successor to B and the predecessor to
C++. Ironically, the C vocabulary of Newspeak in George Orwell's “1984”
describes scientific and technical terms (Orwell, 1984: Appendix. The
Principles of Newspeak). Doubleplus is Newspeak for intensification, as
in “doubleplus good”--very good. The successor to C is C++, because ++
is the incremental instruction in C which is, however, pronounced plus
See Jonathan Band, The Digital Millennium Copyright Act, at http://
www.arl.org/info/frn/copy/band.html (last visited March 13, 2002) (copy
on file with The Transnational Lawyer) (citing 1201(f) of the DMCA).
The issue is complex. For a brief general overview, see generally
Cheryl Hill, Software Protection and Japan's Copyright Law, Computing
Japan, June 1995, available at http://
www.cjmag.co.jp/magazine/issues/1995/jun95/06piracy.html (last visited
May 5, 2002) (copy on file with The Transnational Lawyer). Furthermore,
recent United States decisions involving computer software have deviated
from traditional copyright theory in protecting technological ideas and
methodologies. It is too early to predict whether Japanese courts will
follow this protective trend for software. The express statutory
provisions relating to programs are a strong basis for limiting
protection of programs. On the other hand, the Operating System case
seems to indicate a highly protective attitude by the Intellectual
Property Division of the Tokyo District Court. See generally Karjala,
The First Case on Protection of Operating Systems and Reverse
Engineering of Programs in Japan, 10 Eur. Intell. Prop. Rev. 172 (June
In fact, “[t]he only court
judgement in Japan on reverse engineering is a the case of Shuwa Co.
Ltd. vs. Microsoft Corp. The court ruled that the defendant's act of
replacing the plaintiff's object program with hexadecimal code and the
replication of the plaintiff's object program code is an infringement of
the Copyright Law.” Kazuyoshi Nagato, Legal Protection of Software:
Reverse Engineering Under the Japanese Law, at http://
www.naga.to/knagato/summary.html (last visited May 5, 2002) (copy on
file with The Transnational Lawyer). The Shuwa decision is available
on-line in Japanese at
(last visited May 5, 2002) (copy on file with The Transnational Lawyer).
A related case available in English held in a similar vein:
finding that a program infringes the copyright of a program work, it is
necessary that the combinations of instructions in the program work
have portions that can be found creative, and that the combinations of
instructions in the later created program be similar to those in the
program work in the portions that can be found creative. Because the
symbols expressing programs are extremely limited and the relevant
system (grammar) is rigorous, any attempt to make a computer functional
so as to achieve a certain result in a more effective way will
necessarily lead to many similar combinations of instructions.
Therefore, we must be careful in finding infringement of a program
copyright. The ‘processing flow’ in a program, which, being itself an
algorithm, i.e., a 'solution' as provided for in Art. 10 (3) (iii)(1)of
the Copyright Law, is a portion that is not protected as a work and
therefore has no relevance to the creativity of the program.
Yoshida, Creativity and the Scope of Protection of Computer Programs,
at http://www.softic.or.jp/en/cases/yoshida-art.html#chuu1 (last visited
May 5, 2002) (copy on file with The Transnational Lawyer) (quoting the
decision of the Tokyo High Court (Case No. (ra) 327, 1989, Tokyo
District Court Case No. (yo) 2531 at 2551).
[FN97]. See Newby, supra note 63, at 1658.
[FN98]. See Correa, supra note 43, at 136.
[FN99]. See Newby, supra note 63, at 1654.
[FN100]. See id. at 1653.
[FN101]. See Correa, supra note 43, at 133.
[FN102]. See id. at 199.
[FN103]. See id.
[FN104]. See Lehmann, supra note 40, at 2625.
[FN105]. See 17 U.S.C.S. §102 (2002);
see also Patry, supra note 6, at 387 (acknowledging that the U.S.
copyright regime only permits the copyright of “original” works).
See Ralph C. Losey, Practical and Legal Protection of Computer
Databases, at http://FloridaLawFirm.com/article.html#copy (last visited
March 13, 2002) (copy on file with The Transnational Lawyer).
[FN107]. See Lehmann, supra note 40, at 2629.
[FN108]. See Band, supra note 95.
[FN109]. See Lehmann, supra note 40, at 2626.
[FN110]. See Mark A. Lemley, Convergence in the Law of Software Copyright?, 10 Berkeley Tech. L.J. 1,
available at http://
(last visited March 13, 2002) (copy on file with The Transnational
[FN111]. See Lehmann, supra note 40, at 2624.
See Esslinger & Betten, Patentschutz in Internet, 1 Computer und
Recht 18 (2000) (arguing that TRIPs permits software patents while
admitting that the BRD does not).
[FN113]. See generally Maureen O'Rourke, Toward a Doctrine of Fair Use in Patent Law, 100 Colum. L. Rev. 1179 (2000).
[FN114]. See id.
[FN115]. See id. at 1180.
[FN116]. See Abbott et al., supra note 73, at 65.
[FN117]. See Kluwer, The International Intellectual Property System 185, 347 (1999).
[FN118]. See Okedji, supra note 38, at 87.
[FN119]. See id. at 160.
[FN120]. See id. at 89.
[FN121]. See id. at 168-169.
See David Friedman, Standards As Intellectual Property: An Economic
visited Apr. 28, 2002) (copy on file with The Transnational Lawyer); see
generally Friedman, et. al, Some Economics Of Trade Secret Law, 5 J.
Econ. Persp. 61 (1991).
[FN123]. See Okedji, supra note 38, at 138, 140, 145.
[FN124]. See 17 U.S.C. § 104(c) (2002) (expressly denying any rights under the Berne Convention).
[FN125]. See Okedji, supra note 38, at 142.
[FN126]. See Newby, supra note 63, at 1662.
[FN127]. See 17 U.S.C. § 100 et. seq. (2001).
[FN128]. See Okedji, supra note 38, at 131.
[FN129]. See id. at 91.
[FN130]. See Berne Convention, supra note 56, art. 10(2); but see id. art. 11 bis(1).
[FN131]. See id. arts. 2 bis(2), 10bis.
[FN132]. See Okedji, supra note 38, at 134.
[FN133]. See id. at 147.
[FN134]. See O'Rourke, supra note 113, at 1201.
[FN135]. See id.; see also Correa, supra note 43, at 208.
[FN136]. See O'Rourke, supra note 113, at 1202.
15 TRNATLAW 187
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