Prof. Robert P. Merges, Boalt Hall School of Law, UC-Berkeley
Aug. 6, 2009

In the IP world, and in law generally, commonly accepted non-legal social norms have been the focus of intense interest in recent years.  Much of the attention has focused on the interaction between norms and formal law.  Some scholars have been interested in norms that take the place of law, either filling in gaps or completely duplicating law’s social ordering function.  Others concentrate instead on the interrelationship of law and norms, the ways that informal agreements and practices supplement and modify the operation of formal law.

Examples of this sort of scholarship can be found all over.  For instance, Dotan Oliar and Chris Sprigman, in their article “There’s No Free Laugh (Anymore): The Emergence of Intellectual Property Norms and the Transformation of Stand-Up Comedy,” 94 U. Va. L. Rev. 1787 (2008), detail the informal norms that prevent stand-up comics from stealing each others’ material.

A similar phenomenon has been studied among the fans of touring bands whose fans record each concert faithfully.  Sharing of recordings among fans of these “jam-bands” is governed by widely shared norms of reciprocity and solicitude for the bands’ IP rights, as documented by Mark F. Schultz in his piece, “Fear and Norms and Rock & Roll: What Jambands Can Teach Us About Persuading People to Obey Copyright Law,” 21 Berkeley Tech. L. J. 651 (2006).  Oliar and Sprigman’s article on stand-up comedy norms illustrates the vein of scholarship that describes norms in place of law, while Schultz’s article is a good example of how norms can supplement or modify formal legal rights.

Here I want to focus on one set of norms that are of increasing importance in the IP world: those that govern uses of online digital content by casual users.  Two recent working papers describe these norms, one from the perspective of users, and the other from the perspective of IP owners.

The first, user-centric, study is by scholar Peter Lee.  Lee describes what he calls the phenomenon of “warming,” which he defines (in contrast to the traditional notion of “chilling,” familiar from First Amendment scholarship) as the slow creep of de facto user “rights” that accrue from ever-increasing use of posted, online content.  As Lee puts it,

The most significant copyright development of the twenty first century … has come from the unorganized, informal practices of various, unrelated users of copyrighted works, many of whom probably know next to nothing about copyright law.  In order to comprehend this paradox, one must look at what is popularly known as “Web 2.0,” and the growth of user-generated content in blogs, wikis, podcasts, “mashup” videos, and social networking sites like Facebook and MySpace….   [I]nformal copyright practices – i.e., practices that are not authorized by formal copyright licenses, but whose legality falls within a gray area of copyright law … make manifest three significant features of our copyright system that have escaped the attention of legal scholars: (i) our copyright system could not function without informal copyright practices; (ii) collectively, users wield far more power in influencing the shape of copyright law than is commonly perceived; and (iii) uncertainty in formal copyright law can lead to the phenomenon of “warming,” in which – unlike chilling – users are emboldened to make unauthorized uses of copyrighted works based on seeing what appears to be an increasingly accepted practice.1

Warming occurs, according to Lee, when users observe other users appropriating proprietary content without apparent repercussions.  This leads to a mutually reinforcing norm that effectively makes acceptable mashups, fan-site postings, and other uses of content that might well constitute technical infringement of copyrights.

Copyright scholar Timothy Wu has addressed the same set of issues from the content owners’ perspective.  Wu has identified a category of copyright use that is not technically “fair use,” but that content owners have come to live with – what he calls “tolerated use.”1  The decision to tolerate these uses has to do with a weighing of enforcement costs, in light of potential benefits the uses might bring.  And the individual decisions so made contribute to the making of norms, to the “warming” that Lee has discussed.

Two Lessons

I take two lessons from these developments.  One is essentially an observation; the other is more normative – an argument about what these norms should mean for IP law, and what they should not.

First the observation: For the past 10 or 15 years, IP scholars have for the most part shown serious concern about the growing scope and impact of IP rights.  Great cries of concern have gone up, both at the increase in technological capabilities (particularly DRM systems) and at the expanding scope of formal IP law.  The general consensus has been that IP rights have grown so much that they threaten to upset the traditional balance between proprietary protection and the public domain.

My observation is that the evolving norms I have described show that these concerns were at least overblown.  It might be said, in fact, that many scholars had it exactly backward; that despite all the concern, what has in fact occurred is that the widespread availability of digital content has made it very difficult for copyright owners to exert effective control over digital content.  The norms I have described represent the adjustment that IP owners have made to these developments.

The second lesson has to do with the legal system’s response to these new norms.  It would be quite natural for courts to begin to incorporate these norms into the fabric of the formal law.  This is a time-honored course of events, in IP and elsewhere.  Fair use has often incorporated customary elements, for example.  And other areas of IP law operate the same way.

This is the danger in the current digital environment.  As these norms develop, it would be easy for the legal system to fully embrace them, and build them into the formal structure of the law.  In my mind, that would be a mistake.

It’s not that widespread “tolerated use” is a bad thing.  When an IP owner voluntarily waives his rights, that is only his privilege.  The decision to waive a right, after all, is one of the incidents of ownership.  No, the danger is that the evolving norms may come to preclude the individual act of waiver – may in effect make the decision for the owner.

This would be a problem for two reasons.  First, on principle, there is a world of difference between a formal privilege in favor of users and a voluntary and unilateral decision on the part of a rightholder not to enforce the right – to waive it.  This is an important component of what it means for IP to be a true right.

Second, effectively codifying these norms would short-circuit the potential for market formation.  While it is true that a broad-based privilege in favor of users might merely duplicate what many owners would decide, it would also preclude any chance for rights owners to create a market for their works.  The short history of digital content so far has shown that predictions about the viability of market formation in this area have often been wrong.  At least with respect to some content, pay-per-view and subscription models, often written off at the outset, have resurfaced and shown some degree of viability.

The simple point here is that unilateral decisions not to enforce rights, based on a certain state of technology and market infrastructure, ought not to be blown up into legally enforceable rules that might ossify over time.  Even if tolerated use and some degree of “warming” become accepted parts of the IP scene, we ought to hold tight to the distinction between norms in the sense of operational regularities and norms in the sense of nascent legal rules.  There is a lot at stake in the distinction, including the potential viability of markets for digital content

Comments From Our Readers

Fred von Lohmann: While I agree that caution is necessary whenever we displace a market mechanism, it is also the case that copyright is not meant to be a perfect property interest. In other words, we should also ask whether it might be a good idea in some contexts to prevent the formation of markets (as we have, for example, for parody).

For example, the developing norm in favor of noncommercial, expressive video remixes might be embraced as a matter of formal law (thereby preventing the formation of a “market”) without causing substantial harm to existing markets. And other social values (encouraging creative expression, democratic participation, autonomy, etc) would appear to be enhanced if this norm were accepted into formal law.

So I would argue against a blanket “don’t let norms pollute law” prescription. Some current customs and norms should be adopted by courts as a matter of formal law (and that’s one of the important functions of fair use). The challenge (as always) is picking and choosing.