ABSTRACT
The age of digital distribution has presented two unique problems for rights clearances: first, new technologies often aggregate and disseminate large quantities of copyrighted works, which requires obtaining rights from a large number of copyright holders. Second, new technologies lower the cost of content creation, resulting in millions of new, small, individual creators, rather than a discreet set of large industry repeat players. This ‘long tail’ of copyright holders has contributed to rising transaction costs in the digital age.
The potential of class actions in addressing this rising transaction costs problem has gone largely unexplored and underutilized. Whereas class action scholars studying the mechanism more generally have largely theorized it as a regulatory device for deterring misconduct or else a joinder device to ensure litigation efficiency, copyright scholars addressing the acute problem of rising transaction costs have either advocated for a vision of private ordering, via new licensing collectives or contractual arrangements, or else judicial and legislative interventions in the form of fair use reform, specialized rate courts, and tailored legislation.
This Article fills the chasm between two domains that are rarely in conversation with one another. By presenting an in-depth history of copyright class actions, it offers a novel view of the class action device as both an efficient legal coordinating mechanism – as a hybrid public-private licensing scheme – and as having a part to play in making substantive copyright law. Indeed, settlements in these copyright class actions have been used not just as blanket licenses for both past harms and on-going royalties, efficiently capturing all long tail copyright holders in a manner individualized negotiations could never achieve, but they have also been progenitor to landmark copyright legislation that imposed royalties on home recording devices, on digital radio, and on streaming services. And indeed, some settlements have themselves contained non-monetary components that act much like legislation in solving for long-standing problems in the copyright industry. Whereas some courts have been skeptical of the quasi-legislative nature of these agreements, this Article argues for a vision of the class action mechanism as the future and the promise of licensing-and-reform-by-litigation in an age of mass aggregation, far-flung rights, and industry and legislative gridlock.
Tang, Xiyin, The Class Action as Licensing and Reform Device (March 15, 2022). Columbia Law Review, forthcoming.
First posted 2022-04-16 08:00:20
Leave a Reply