The Dual-Grant Theory of Fair Use
Fair use is one of modern law's most fascinating and troubling doctrines. It is amorphous and vague, as well as notoriously difficult to apply. It is, at the same time, vitally important in copyright and perhaps the most frequently raised and litigated issue in the law of intellectual property. This Article synthesizes themes from the rich literature on fair use to fashion a novel theory of fair use that provides both a better understanding of the underlying principles and better tools for applying the doctrine. In contrast to the dominant understanding of fair use in the literature—that fair use addresses market failures—the Article proposes that fair use is a tool that allocates a large bloc of uses directly to the public in order to limit the size of property rights that are granted to authors. The fair use doctrine, we argue, is an integral part of copyright's sorting mechanism for, on the one hand, granting authors intellectual property rights based on their expected incentives for creation and, on the other hand, granting the public privileges based on the expected utility from direct allocation. The Article's theory thus accords with recent Supreme Court cases by conceptualizing fair use not as an exception for costly transactions, but rather as a central feature of the copyright system that ensures productive and allocative efficiency. This theory supports a reconceptualization of the basic structure of copyright law that both broadens fair use and makes the doctrine easier to apply. This Article favors aprima facie finding of fair use whenever the user's category of use is one that produces widespread follow-on utility to nonusers (such as the categories of political speech or what we call "truth seeking"). This prima facie finding can be defeated only by showing that allowing such uses with respect to the particular copyrighted work would eliminate sufficient incentives for its creation.