Copyright infringement tends to be socially costly because it robs owners of due recompense and depresses incentives for creative production. This Article contends that in order to achieve copyright’s goal of maximizing cultural production, this dominant story of infringement’s costs requires alongside it a counter-story identifying the rare but important instances where copyright infringement enhances social welfare. Part I explains the need for an account of the novel notion of efficient copyright infringement. Other types of unlawful conduct may also be beneficial, but copyright in particular warrants exploration of efficient infringement because maximizing creative production requires some level of unauthorized use, and because copyright’s political economy tilts in favor of expanding owners’ rights. Part II explores efficient copyright infringement’s domain, showing that unauthorized use of protected works of authorship will be prosocial where traditional private ordering is unavailable (or strongly undesirable) to facilitate a given use, and where that use is welfare-enhancing. Part III outlines broadly how a law of efficient copyright infringement might look. It first explains how the Copyright Act has failed to fully account for beneficial unauthorized use. It then discusses how law might reflect efficient copyright infringement in doctrine by deploying a pair of filtering devices, and then by creating a remedial scheme based on ex post compulsory licenses keyed to the value created by users. The Article concludes by situating this argument in the context of a growing literature that explores the counterintuitive proposition that the stability of property systems may depend on the preservation of space for transgression of owners’ rights.
Fagundes, David, Efficient Copyright Infringement (August 20, 2012).