I think that I will split up my comments a bit, doing some
now and some in a subsequent post. For me, I start with wanting to understand
why someone might want to impose a servitude and the kind of restrictions that
are imposed. I don’t know that the paper offers a theory of use restrictions
and those intrigue me.
In prior work, I have discussed two different sets of
use restrictions. Molly discusses one of those, the turn-of-the-century
limitations seen in early phonographs. You buy my phonograph, you have to play
my cylinders on it. These are fairly conventional efforts at price
discrimination in which the manufacturer is trying to sell the playing
equipment for different prices to different customers and where the cylinders
are used to measure intensity of demand. We can’t just assume that this sort of
price discrimination is pernicious, and if we can’t do that, we may need to
allow the use discrimination. (I lay out more of this in my Chicago L Rev
piece, From Edison to the Broadcast Flag:
Mechanisms of Consent and Refusal and the Propertization of Copyright
(preprint version here).)
We can generalize that point, and I have done so in other
work. There is certainly a class of servitude situations involving what we
might call systems competition. Computer printers and toner cartridges are a
good example of this. To the untrained eye, this looks like a pretty
competitive market, and yet we have observed lots of use restrictions over
time. Some of those have been contractual, but given the difficulty of enforcing
those contracts, sellers have turned to technological lock-and-key systems.
Efforts to break those systems have in turn taken us to cases under the Digital
Millennium Copyright Act.
Consumers as a group can be better off if we make possible
this sort of locked systems competition. Absent the lock, manufacturers will be
forced to seek to recover all of their system development costs in the price of
the printer and that can inefficiently discourage purchases of the printer.
Better to recover more of those costs from heavy users and we can do that if we
charge above marginal cost for the toner cartridge. But to do that, the
cartridge needs to be locked to the printer. (I set this out in greater detail
in my paper Copyright and the DMCA:
Market Locks and Technological Contracts (preprint version here)).
In both of these cases, these use restrictions may enhance
welfare. I don’t see how we assess old (or new) servitudes without
understanding the circumstances under which use restrictions may be beneficial.
I think that this is a general challenge for copyright law as it puts in play
what role fair use should play. I will have more to say about that on Friday at
a conference
at Columbia Law.
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