The Knockoff Economy

by Kal Raustiala

  Why does American law contain this unusual exception for cover songs? The story concerns an interesting historical accident. In the early days of copyright, the rules about music were straightforward for a simple reason: at the time, there was no way to record music or to mechanically reproduce it. Music existed on paper (in the form of sheet music) and in the air during live performances. Copyright law prevented—at least in theory—the unauthorized copying of sheet music, which was the only copying possible.

  That all changed after the Civil War, with the invention of the player piano. By the 1890s player pianos were widely distributed in the United States. (The phonograph was invented at about the same time and it too was everywhere by early 20th century.) The player piano deeply troubled popular music composers such as John Philip Sousa. Sousa worried that the pianos would kill the public’s demand for sheet music, and sheet music was the source of composers’ copyright royalties. To make matters worse, the player piano companies refused to pay royalties to composers for the songs they put on player piano rolls. These rolls were scrolls of paper with holes punched out in patterns that instructed the piano how to play a particular song. The rolls, argued the player piano companies, did not “copy” the composers’ musical compositions. As a result, they were perfectly legal.

  As Sousa knew, that argument was more than a little disingenuous. Sheet music “copies” a song by rendering it into musical notation—symbols on paper that tell a musician how to reproduce the song. In a similar fashion, a player piano roll “copies” a musical composition by rendering it into a different sort of musical notation—holes punched into paper that tell a machine how to reproduce the song. Sheet music and player piano rolls are essentially the same instructions, just written in different languages. Nonetheless, the Supreme Court, in its 1908 opinion in White-Smith Music Publishing Co. v. Apollo Co.,8 sided with the player piano companies. The Court held that because humans could not read player piano rolls, they were not in fact copies of the musical compositions they encoded.

  The result in White-Smith lasted but a year before it was overturned by Congress. The Copyright Act of 1909 extended the law to cover all “mechanical” reproductions of musical compositions, whether they could be read by human beings or not.* With this action, however, Congress mandated that all musical compositions would be subject to what is called a “compulsory license.” In short, since 1909 the copyright law has allowed musicians to copy others’ songs without asking permission, so long as they paid a specified fee to the original songwriter.*

  Why did Congress create this system of copying? Because they feared the power of the Aeolian Company.

  Who? Aeolian is a long-vanished manufacturer of pianos, player pianos, and organs. (Aeolian declared bankruptcy and disappeared in 1985.) But back in the first decade of the 20th century, when player pianos were the hot new technology, Aeolian was a dominant firm—the Microsoft (or perhaps Google) of its day. Anticipating that Congress was about to overturn White-Smith, Aeolian moved swiftly to buy up song rights from musicians and publishing companies so it could copy them onto player piano rolls. Aeolian’s competitors quickly complained to Congress about Aeolian’s attempt to corner the music market. Congress responded with the invention of the cover song rule.

  The immediate result was that Aeolian’s competitors gained the right to make their own player piano rolls, so long as they paid the fee. That was Congress’s intent: to keep the Aeolian Company from having a monopoly on the then-crucial player piano roll market. The longer term result was much more significant: because of Aeolian’s dominance of a now-defunct technology, we have a musical culture in America in which musicians are free to tweak songs they like—and they do so with great enthusiasm. Bob Dylan wrote “All Along the Watchtower”; Jimi Hendrix tweaked it into something quite different and, arguably, made a great song even greater. Another 1960’s classic, Van Morrison’s “Gloria,” has been covered by performers including Jimi Hendrix, the Doors, David Bowie, Tom Petty, Bruce Springsteen, Rickie Lee Jones, AC/DC, and Patti Smith, in perhaps the song’s most memorable and inventive reinterpretation. “Gloria” is an enduring song in part because so many legendary musicians have tweaked it. Cat Power, John Lennon, Willie Nelson, Paul Anka, and many other famous artists have issued albums of nothing but cover songs. All this (legal) tweaking has made our musical culture immeasurably richer.

  But has the freedom to tweak others’ songs, in exchange for a very low fee that the original songwriter has no power to override, suppressed the incentive to write new songs? There’s no evidence of that. Indeed, every day we see a continual outpouring of new musical compositions. Tweakers and pioneers co-exist comfortably in the world of music. It is sometimes hard to tell them apart, in fact. Think for a moment about jazz greats like Charlie Parker and John Coltrane. On one level, they are tweakers—Coltrane’s version of the Rogers and Hammerstein standard “My Favorite Things” recognizably appropriates that song’s famous melody. But if Coltrane starts there, it’s certainly not where he ends up. By the song’s end more than 13 minutes later, Coltrane has tweaked the original melody and taken it in a much darker, more contemplative direction. At some point in the song, Coltrane crosses the uncertain border that separates Tweakers from Pioneers.

  In sum, tweaking is not just something done by football coaches or software engineers. Tweaking is present in all inventive fields, and in some—like music—is a very prominent part of the creative process. Perhaps the most important point about tweaking is this: tweaking does not appear to suppress pioneering innovation very much. If anything, it may often encourage it. Many of the most significant and enduring innovations rest on tweaking. As Malcolm Gladwell has argued, the late Steve Jobs of Apple—an icon of our innovation economy if there ever was one, and the man behind the iPhone and iPad—“was repeatedly referred to as a large-scale visionary and inventor.” But in fact, “he was much more a tweaker.”

  Steve Jobs, Gladwell goes on to argue, was “the greatest tweaker of his generation.”9 Even the iPad, Jobs’ last great success, was a tweak of an idea out of Microsoft. And Gladwell rightly points out that the significance of tweaking to technological innovation is by no means just a New-Economy thing: economists debating the origins of the industrial revolution have claimed that the key reason Britain, and not France or Germany, was the first home of the industrial age was tweaking. As Gladwell describes their argument, Britain was not necessarily the home of pathbreaking Pioneers who created the foundational building blocks of the industrial revolution. Rather,

  Britain dominated the industrial revolution because it had a far larger population of skilled engineers and artisans than its competitors: resourceful and creative men who took the signature inventions of the industrial age and tweaked them—refined and perfected them, and made them work.10

  The Law of Tweaking

  Let’s turn back now to the actual structure of intellectual property rights; specifically, to patent and copyright, and how they influence tweaking. How good a job does our legal system do at creating an environment where both Pioneers and Tweakers can thrive? The answer, unfortunately, is that both patent and copyright (outside the context of music) come up short.

  Patent law is the better of the two, but it is only ambivalent on the subject of tweaking. On the one hand, it allows Tweakers to gain rights in their improvements to others’ inventions. So if you invent a patentable machine, and we come up with a new and useful tweak, you can get a patent on the machine and we can get one on the tweak. We can’t sell our tweaked version of your machine because doing so would violate your patent rights on the machine. But you can’t use our tweak without violating our patent rights. The patent system expects that we will negotiate a deal to sell the improved, more valuable machine.

  So far so good—patent law gives rights to both Pioneers and Tweakers, and leaves it to private negotiations to sort things out from there. But there’s a catch. A patent holder owns exclusive rights to make, use, and sell her patent
ed technology. Return now to our prior example. If we want to tweak your patented machine, often we’ll have to use it to understand better how it works, or even make an entirely new one. But we don’t have the right to do this, and you may be reluctant to give us those rights if you don’t want us to tweak in the first place—maybe because you think we will become (or already are) competitors in the same market. There used to be a broad exception in patent law for such “experimental use.” That ended in a 2002 case called Madey v. Duke University, and in many instances today Tweakers must get permission from the relevant Pioneer.11

  That said, compared to copyright, patent’s treatment of Tweakers is terrific—not least because even patent’s weaker restrictions on tweaking last only 20 years. Copyright owners have the exclusive right to copy, distribute, and perform their works for a very long time—over a century in many cases. And they (again, except for the case of musical compositions) have the exclusive right to make what lawyers call “derivative works”—what we have referred to here as tweaks. So if you write a novel, we can’t tweak it by transporting the characters into a different time or place. We can’t rewrite an episode of Star Trek, for example, to explore the romantic possibilities between Commander William Riker and Counselor Deanna Troi.*

  There are only two exceptions to this rule: if the Tweaker gets permission first, usually by buying a license, or if the Tweaker successfully can claim that his or her revision is a “fair use” of the original work. In Chapter 2 we mentioned Alice Randall’s creative reworking of Gone With the Wind from the point of view of a slave. After The Wind Done Gone was published, the estate of Margaret Mitchell sued for copyright infringement. Randall escaped, however, on the grounds that she had (supposedly) written a parody of the original book, and so she was covered under the fair use rule.

  The Randall case shows that it is possible to tweak without permission. But it is also the exception that proves the rule: the number of successful fair use cases is small, and regardless, to win one you have to fight the lawsuit. And that is often very expensive. It is much easier to just not tweak a copyrighted work in the first place, or to try to get the Pioneer to license the new, tweaked version.12

  Unfortunately, however, copyright law has made it increasingly difficult to do this. First, the copyright term keeps expanding. Works are now protected for the life of the author plus 70 years—that’s well over a century for most. So Tweakers must obtain permission even to use very old works, and of course as authors die and copyrights pass to heirs, it is often much more difficult to figure out whom to contact for permission. This is particularly true for books that are out of print but technically remain under copyright—a problem known as “orphan works.” One of the purported benefits of the massive (and controversial) “Google Books” book scanning project* is that it would help bring these books back to life—though it would not necessarily make it easier to find the copyright holder to gain permission for a rewrite.

  As this suggests, part of the reason it can be so maddening for a Tweaker to even obtain a license to tweak is that the copyright system provides very little information that Tweakers can use to find rights holders. Unlike in the case of patent, there is no master registry of copyrighted works. In fact, there is not even a need to put the © symbol on your next poem to copyright it—it was covered by copyright from the moment you wrote it down.

  While this approach makes copyright very easy to obtain, it can be a major obstacle for Tweakers. American law has actually gone backward in this respect. For much of history, those who wished to copyright a work had to register with the copyright office, or, later, provide notice of copyright on all published copies of their works (that © symbol). And they had to reregister their copyright periodically. The result was a public record of who owned what and how they could be contacted.

  That system of “formalities” was changed in 1992. Today there is no need to register or renew copyrights or to give notice of copyright claims. Reviving formalities would certainly encourage tweaking. But more fundamentally, if copyright’s rules were more like those in patent, tweaking would be far easier. If you improve this book—say by reworking it into an appealing screenplay*—then you should be able to publish what you’ve done, so long as your changes are substantial. But we should also get paid for what we’ve contributed. In short, we should have a system, as we already do for patents and for cover songs, where tweaking is made easier—and the benefits shared between Tweakers and Pioneers.

  FONTS

  For centuries, books were handwritten affairs, each copy the product of hundreds or even thousands of hours of intensive labor by a scribe. That made books expensive and rare. The invention of the printing press by Johannes Gutenberg in 1440 ushered in the era of much cheaper books. But it also soon brought cheap pirated books.

  It was the threat from cheap but unauthorized copies of books that eventually brought us what we now know as copyright law. By the 1500s English publishers, acting through the guild known as the Stationers’ Company, were granted a monopoly on printing by the English crown. In 1709, that monopoly was replaced by the first modern copyright law, known as the Statute of Anne. The statute granted rights to authors rather than publishers and made those rights temporary, ultimately wiping out the perpetual rights that publishers had claimed under the common law. The United States followed suit in 1790, when the first Congress passed a copyright law based closely on the English model.

  By making books cheap, and pirated copies even cheaper, the invention of the printing press created the economic realities that led to modern copyright law. But Gutenberg’s printing press also brought another important change. Handwriting was inherently variable. The invention of printing was accompanied by the invention of movable type, and that meant that the visual expression of language was increasingly regularized by the use of typefaces—the name given to the letter forms carved into wood or metal blocks that early presses used to imprint ink on paper.

  The technology of typefaces has of course changed dramatically as printing moved from mechanical to electronic. Typefaces now exist mostly as bits of computer code. And in today’s computerized world, most people refer to typefaces as “fonts” (except for typographers and graphic designers, who recognize a technical distinction between the two). We’ll use the more common term.

  The significance of the change in our visual environment and culture from the advent of fonts is not trivial. Fonts enrich language by allowing us to convey subtle messages not carried in the text itself.13 Fonts can be restrained or florid, cool or warm, reassuring or arresting, and they shade the meaning of the text in which they are set. That is one reason so much effort has been poured into font design, and why so much attention is directed to choosing the right font for wedding invitations, corporate logos, and store catalogs. Fonts are valuable because they shape they way we communicate.

  The earliest fonts imitated then-current styles of handwriting.* They had pronounced serifs (flourishes at the end of strokes) and marked differences between thin and thick sections of the letters, a calligraphic style that proceeded naturally from the dominant writing technology of the time, the quill pen. Over time, fonts moved away from mimicry of handwriting. Fonts diversified into many thousands of varieties, some optimized for legibility in reading (such as for books and newspapers), and others for distinctiveness as display type (such as for use in signs).

  By the mid-20th century the reigning aesthetic dictated that fonts have clean lines and no serifs. A very famous font from this period—and probably the only one to be the subject of its own documentary—is Helvetica, a sans-serif type developed in 1957 by Swiss typographer Max Miedlinger.14 Helvetica may be the most widely used font in the world and is emblematic of typographic modernism. It’s no surprise to see a variant of Helvetica—Helvetica Neue Light—in use on Apple’s iPod, for example. The font fits the marketing message that Apple wants to send: clean and cool.

  Helvetica has been widely imitated, perhaps most famou
sly by Microsoft, which knocked off Helvetica to avoid paying licensing fees for its early word processing software. The result, Arial, has become a famous font in its own right. Arial imitates Helvetica very closely. In the following illustration, the black letters show the two fonts superimposed.

  FIGURE 4.1 Helvetica vs. Arial

  As this shows, Helvetica and Arial are not identical. They are certainly alike enough, however, that if the general rules of copyright applied, Arial would almost certainly be judged “substantially similar” to Helvetica—and therefore illegal. But copyright does not apply in the world of fonts. Its absence has allowed the wide proliferation of subtle variations on popular fonts. The ordinary consumer may overlook these variations, but for the graphic designer looking for just the right font for a particular job, they are invaluable.

  Another familiar, yet very different, font is Times New Roman.* Times New Roman was designed to be highly legible using the crude newspaper printing techniques prevalent in the early 20th century, and to take up less space than comparably legible fonts.

  Here is a sentence set in Times New Roman.

  The impression this font gives is entirely different from Helvetica’s. Where Helvetica is clean and modern, Times New Roman is stately and suggests solidity and credibility—exactly the impression that a “newspaper of record” wishes to make. It is not surprising, then, that there are many variations on Times New Roman. A popular example is Georgia, a design commissioned in 1993 by Microsoft. Georgia is adapted from Times New Roman but with wider serifs. Again, Georgia is similar enough that it would almost certainly break the law if copyright law applied to fonts. The absence of copyright, however, allows designers to imitate fonts like Times New Roman and create subtly different, but overall very similar, families of fonts.