Integrating Law and Economics
Chapter 2: Fair Use and Economic Analysis
2.1 INTRODUCTION This chapter will apply economic reasoning to the judicial principle of fair use that is now often applied in matters involving unauthorized takings of copyrighted works. The four activating principles of fair use, as instituted in 17 U.S.C. § 107, are found to be ambiguous and subjective, and therefore creative of legal uncertainty for producers of secondary transformative works that may add new meaning to a copyrighted work. As ‘the [Constitutional] goal of copyright, to promote science and the arts, is generally furthered by the creation of [such] transformative works’,1 the resulting loss of artistic investments and social criticism here can be considerable. The difficulties of the fair use doctrine are best illustrated in the recent case of SunTrust Bank v. Houghton Mifflin, which involved the publication of an unauthorized sequel to the Civil War classic, Gone with the Wind (GWTW), that was entitled The Wind Done Gone (TWDG). Based on definitions of parody and satire, as well as standard legal considerations of market substitution, excessive borrowing and ‘conjuring up’, the District Court preliminarily enjoined the new book because the author’s stated intent implicated a general criticism of Southern history, and therefore went beyond the proper domain of parody often protected by fair use.2 On appeal, the Circuit Court vacated the resulting preliminary injunction after finding that TWDG was a specific criticism of the depiction of slavery and race relations in GWTW,3 and that the Supreme Court decision of Campbell v. Acuff Rose was ambiguous on what...
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