The digital revolution has compelled us to review, and at times rethink, important parts of our law. From gig workers to social media, artificial intelligence to self-driving cars, technological advancements have resisted the mechanical application of rules developed in the pre-digital age. Copyright law offers one example. As digital aggregation technologies enable the reproduction of millions of copyrighted works, they test law’s capacity to define, address, and compensate for infringements – as a matter of both doctrine and procedure.
Enter the class action device. Although copyright scholars have debated how law should evolve to address new technological uses, Xiyin Tang may be the first to suggest that copyright class actions can achieve by private ordering what has eluded legislators. The Class Action as Licensing and Reform Device argues that copyright class actions have effected advancements in copyright law and will continue to play an increasingly important role in licensing and reform.
Tang analyzes fifty years of copyright class actions to make the point that this form of litigation can efficiently address the millions of copyright right claims involving streaming services, a feat that neither the market, the regulator, specialized courts, nor Congress could achieve on their own. In mounting this argument, Tang makes the provocative claim that these class actions are doing something quite different from typical mass-tort, discrimination, and consumer class actions – compensating for injuries defined by existing law and updating the law by filling the gaps exposed by new technology. Both legal proceduralists and copyright scholars should take note.
Tang begins by discussing how new technologies fail to fit old copyright paradigms. Simply put, it is impossible for digital aggregation technologies, such as Google and Spotify, to obtain permission from the thousands of individual copyright holders to reproduce their works legally. The alternatives fare no better. The Copyright Office, an anachronistic regulatory solution to a modern problem, cannot sustain its work-by-work licensing model in the face of large streaming platforms. Market solutions such as collective rights organizations have created different problems, including anti-trust prosecutions. Specialized copyright courts have been criticized by rightsholders. Individual litigation is costly and does not resolve infringements on an industry-wide basis.
The only large-scale solution for mass infringements is the fair use doctrine – the rule that permits use of copyrighted works for purposes of criticism, comment, news reporting, teaching, or research. It protects the public interest, absolves defendants of liability, and allows courts to avoid sticky problem of quantifying damages for past infringements and ongoing royalties for future use. Applying fair use in the mass aggregation context, however, extends the doctrine beyond the use of copyrighted content in the creation of new work to technologies that merely reproduce copyrighted works wholesale.
According to Tang, the class action device offers an under-researched way forward that avoids the problems of fair use without relying on legislative action and ongoing court supervision. She devotes part two of her article to the history of copyright class actions, describing a five-fold increase in such actions between 1990 and 2000 as compared to the previous five decades combined. Just as mass production of consumer goods and widespread harm led to the need for aggregate litigation in the last century, digital technologies that facilitate the copying of mass quantities of copyrighted works require more than what Judith Resnik calls “the familiar—but insufficient—single-file, laissez-faire, unaided civil justice system.”
Tang surveys the seminal copyright class actions of the 1990s and 2000s that filled statutory and common law gaps in “the lawless internet.” The first copyright class action against an internet service provider for the infringements of its users, Frank Music Corp v. CompuServe, led to a damages award, a licensing agreement for future royalties to the class, and releases for future claims. Subsequent lobbying by CompuServe produced a legislative carve-out for internet service providers who do not participate in the infringing conduct of users. The class action resolved the immediate dispute and led to industry-wide relief. A class action against Spotify similarly resulted in a settlement that compensated for past infringements and future royalties, while fashioning a forward-looking blanket licensing scheme that avoided the bottleneck of the Copyright Office. More importantly, the settling parties agreed to create a database to fill gaps in ownership data for music publishers. Follow-on legislation mirrored the best parts of the settlement, further proof of Tang’s theory that class actions are uniquely capable of acting as a catalyst for legislative change.
Part three offers four reasons the class action vehicle is well-suited to the copyright context. First, objecting class members play an important role in ensuring settlements are substantively fair. The epic Google settlement was rejected based largely on objectors’ arguments. The consideration of opposing views at settlement approval is preferable to a purely private bargain struck by two parties. Second, whereas individual licensing negotiations are not feasible, a class action settlement facilitates large-scale permissions. “Outside of fair use, only a class-wide resolution has the same effect of extinguishing all claims while also, unlike fair use, compensating smaller rights holders.” Third, the non-monetary components of the settlement have provided creative solutions to industry problems, such as the establishment of a publicly available musical works ownership database in the Spotify settlement. Finally, copyright class actions often lead to permanent legislative change because rightsholders have the incentive to seek the legislative corollary to the defendant’s release – legislation that protects them against future tech disruptors.
In refuting potential concerns in the final part of her paper, Tang identifies other advantages to class actions over other means of effecting change. For example, the hybrid public-private class-action settlement process has a better chance of defending the public policy of access to socially useful content than do rightsholders and public interest organizations in the political domain, where tech giants enjoy a distinct economic advantage. None of the usual critiques of regulation through litigation land as neatly in this category of cases because the record for follow-on legislation is strong.
Copyright class actions may not be alone in their ability to spur law reform. In Canada, class action litigation produced payday loans legislation and protection against mandatory arbitration clauses in consumer contracts. But Tang is correct that a small number of copyright class actions has had an outsized impact in this area of law, advancing the law and benefitting countless individual authors and artists. Tang concludes that “[a]ggregate litigation of copyright claims enables creators of all sizes to take advantage of a legal system that had previously been monopolized by the largest copyright holders.” The class action device was meant to serve this precise access-to-justice mission.
