The Problem Of Apathetic Copyright Owners

One of the big problems in the current regime of copyright, and more generally, intellectual property, is that the economic value of the right to be licensed is often modest relative to the transaction costs that go into locating an order and reaching a licensing agreement. This is a particular problem now, because the information technology revolution, in the patent area, and the Internet, in the content area, has favored innovations and new works that involve very small contributions from very large numbers of protected intellectual properties. The fair use doctrine addresses some of this problematic territory, but is not a comprehensive solution to the "micro-licensing" problem, nor is it a solution to the orphan copyright problem in which the copyright owner cannot be located to conduct negotiations with at an economically practicable price, or the apathetic intellectual property owner problem, in which the copyright owner is simply too distracted or busy to focus on a licensing possibility, even if it would make economic sense.

All of these problems flow from the default assumption in property law that non-responsiveness regarding a use of property means that it is a crime to use that property without express permission. But, since intellectual property can have more than one user at a single time, and is for practical purposes less amenable to locating an owner (e.g. because unlike real property it is often not "possessed" in a tangible sense and is not subject to annual taxation that keeps contact information current), this may not be an appropriate default assumption for intellectual property.

To the extent that intellectual property owners do not have ulterior non-economic motives for their behavior (and further, to the extent that we are not interested in providing strong legal protections to such ulterior motives out of free speech and anti-trust law concerns), it is reasonable to suppose that transaction costs and owner identification difficulties are important barriers that tempt those wishing to use intellectual property to neglect to obtain licensing rights at a market rate for the intellectual property, and that transaction costs are a key reason that intellectual property owners don't bother to make it easy to obtain licensing.

In circumstances where these transaction costs are avoided with a centralized and regularized system, such as the one used by newspapers within the Associated Press, or the one used by radio stations licensed by the major recording studios in omnibus agreements, the volume of individually low value use of intellectual property that would otherwise belong to someone else is very high and economically significant in the aggregate, and no one involved finds the absence of individualized consent to licensed uses from the authors of the works troubling.

One way to prevent copyright from posing the barrier it does to productive intelletual property activity in cases of micro-licenses, orphan works, and apathetic copyright owners would be to change the default rule from one requiring affirmative express consent, to one that would allow a license to be entered into according to some standardized default rate arrangement, similar to the one that exists for artists who wish to do a cover version of a song today without the owners permission, with royalties deposited into an account with the registrar of copyrights or patent office, as the case might be, until claimed by the owner, upon deliver of a notice of intent to use a work that does not receive a response within some reasonable time period, perhaps a month.

Apathetic owners who received a notice and ignored it, would have funds deposited at a standard rate into an account for their benefit that they could claim at any time. Owners who felt that the standard deal with inadequate could respond to the notice and expressly deny permission to use the work within the time period, or for any future new use of the work for which a standard rate contract had been established due to non-response the first time around.

This would be a middle ground between a pure property by analogy regime, and one that reconceptualized intellectual property as something actually more akin to a right to bring suit for unjust enrichment.