More on Adverse Possession

This is a follow-up to John Hinds's blog on the application of Adverse Possession to IP.

One of the differences between public domain and regular adverse possession is that in the first instance, nobody owns the item, while in the later, the property is owned by someone entirely new.

So Adverse Possession of IP would make more sense if, instead of giving ownership to the adverse possessor [traditional approach], the ownership of IP fell to the public [new approach]. This may help overcome the need for exclusive possession: if fifteen people all "violated" the copyright in an open and notorious way, then after the statutory period, everyone would have the same rights.

Keep in mind, however, that when it comes to chattels, the courts have placed certain additional factors on the adverse possession doctrine. In O'Keeffe v. Snyder (LexisNexis® 83 N.J. 478 subscription required), the court determined that the statue of limitations does not run until the adverse possession is discovered: when you talk about art on a wall, it's hard to say that the possession is open and notorious. The court hinted that as long as a party actively pursues the recovery, then they are not time barred until they discover the violation and then fail to bring action.

The discovery rule provides that, in an appropriate case, a cause of action will not accrue until the injured party discovers, or by exercise of reasonable diligence and intelligence should have discovered, facts which form the basis of a cause of action.

This would make even more sense from the standpoint of IP. As long as a copyright holder takes certain steps to make sure that his copyright is not infringed, then the adverse possession statute does not run against him. In O'Keefe, the court indicated that reporting a missing painting to some registry could fulfill this requirement.

In determining whether O'Keeffe is entitled to the benefit of the discovery rule, the trial court should consider, among others. . . whether registering paintings with the Art Dealers Association of America, Inc. or any other organization would put a reasonably prudent purchaser of art on constructive notice that someone other than the possessor was the true owner.

A clearinghouse of copyright information could easily be created to facilitiate this sort of requirement: register your continuing copyright interest there, regularly update the clearinghouse with contact information (that way people could contact you to get a license), and you are protected from the adverse possession statute. Failing this, the statue runs against the copyright holder and the item falls into the public domain if the copyright is violated and nothing is done to discover the violation.

Of course, adverse possession is controlled by statute; you would need to convince the legislature to pass such a law as it applies to IP. This may be more do-able than changing the copyright law to include a smaller window of ownership given that Disney keeps getting it extended. The adverse possession rule might get around the Disney Factor in that we would all agree that Disney (and other major companies) work in good faith to protect their copyrights from infringement, and their lobby money might not work to defeat of such a proposal.

Comments

[Rolo Timassie]

This is an interesting suggestion, but I'm not sure it will work as intended in practice. It sounds like the suggestion here is to incorporate into copyright law a concept that already exists in trademark law: the need to police the mark. In trademark law, that tends to push trademark owners deciding whether or not to sue (or at least send a cease & desist letter) towards doing so, because the cost of failing to take action is an eventual loss of trademark rights. This may make sense for trademarks, which have no set term and depend for their existence on the amount of effort being expended in the marketplace in associating the mark with a product or service, but I'm not sure it makes sense for copyrights, which have a set term, and depend for their existence only on the creative effort of an author. For one thing, I think pro- and anti-copyright advocates alike can agree that the one thing we do not need is *even more* copyright litigation. Also, it would create perverse incentives for companies with a lot of legal resources to "adversely possess" copyrighted works by authors with few such resources, knowing that a failure to bring suit will eventually result in a loss of the copyright. Finally, there is already the concept of "abandonment" of copyright, which accomplishes roughly the same thing as is being proposed for "adverse possession." Abandonment occurs when a copyright owner intentionally gives up his or her copyright rights. There may be some room for arguing that abandonment occurs when there is open and notorious infringement for a substantial period of time, but I don't believe any court has ever so held (Nimmer has a section on this).

[Aaron Hand]

The idea is to return to the way copyright used to operate. The Sonny Bono Copyright Act (pdf) further extended copyright protection to 70 years after the author's death for most works (and for those Disney fans, works for hire last the lesser of 95 or 120 years from publication or creation, respectively).

As Posner blogged,

the problem for people ... who want to publish old works (works that would have entered the public domain by now were it not for the Act) is transaction costs, not license fees: the costs of locating and negotiating with the current copyright owner. Those costs may well exceed the modest commercial returns from publishing a public domain work (which anyone can copy).

The idea is to try and return to the old system of copyrights, in effect, without the harsh requirement of official extension through the Copyright office.

The beauty of the old (pre-1976) copyright system, with its requirement of renewal beyond a shortish initial term (like 28 years), was that most copyrights, lacking commercial value by the end of their initial term, were not renewed, and so fell into the public domain, and so licensing costs fell to zero.

The plan is not to have more copyright litigation. Instead, it is designed to provide some balance: provide an escape hatch for forgotten works to fall into the public domain, while protecting works that remain commercially viable and active.

[Rolo Timassie]

"The plan is not to have more copyright litigation." Right, I understand, but here's the problem. Say you're a copyright owner and a small-time infringer comes to your attention. Currently, you can simply ignore that person and spare yourself the cost of an infringement action and wait to see if it becomes a bigger problem down the road, without losing any of your rights. (You'll face the 3-year statute of limitations at some point, but if the whole idea is to wait to see if the activity increases in magnitude, as long as you take action within 3 years of the increased magnitude, you'll be OK.) But under an "adverse possession" regime, or as I analogized it, an obligation to "police the copyright," you no longer have this option. Failing to take action against even a small-time or arguable infringer risks losing ALL of your copyright in the work. That's a huge risk, and will impel a larger number of copyright owners to sue in situations where previously it would not have been worth it. Thus there will likely be much more litigation than in the current regime.

[Aaron Hand]

Rolo- It's important to keep in mind that what was discussed was an expansion of an idea, not a carefully drafted statute. In the words of many judges... I'll leave that to the legislature.

There is nothing in the post about what must be done to "police" a copyright.

The original post included the following suggestion (emphasis added):

A clearinghouse of copyright information could easily be created to facilitate this sort of requirement: register your continuing copyright interest there, regularly update the clearinghouse with contact information (that way people could contact you to get a license), and you are protected from the adverse possession statute. Failing this, the statue runs against the copyright holder and the item falls into the public domain if the copyright is violated and nothing is done to discover the violation.

Doing something along these lines takes us a nice step backward, and also addresses Posner's concerns over the cost of trying to locate the copyright owner (parallel to the transaction cost problem discussed in the last class). This problem goes hand in hand with the abandonment of the requirement to renew copyright with the copyright office.

Let's look at this from another angle. We add X years to the copyright law. It becomes harder to determine if there is a copyright in place. It becomes even harder to locate the correct person to get permission (maybe that person is dead). We are actually adding X more years where litigation is possible. In those, say, 100 years, there is a heck of a lot more chance for litigation than you would have during a shorter term of copyright enforcement.

It's certainly possible that adverse possession could decrease actual litigation, particularly in these cases ... especially if you got out of a suit with a summary judgment based on the carefully drafted adverse possession of IP statute. It would also discourage predatory enforcement… lay back and watch the violation get worse and worse. Keep waiting until the defendant builds up a nice nest egg, then swoop in, rather then sending a polite letter asking him to stop.

[Rolo Timassie]

I may have conflated your post with others here on the site. I thought you were proposing "adverse possession" as a novel way to get around the elimination of registration and renewal. This has the advantage of not having to ask Congress to revoke our adoption of the Berne Convention. However, it has the disadvantages I noted. But now I understand that you are proposing adverse possession as an adjunct onto a re-adoption of the registration and renewal requirements of the 1909 Act. You're right that this isn't subject to the problem I noted of creating a need to police copyrights. However, now I think it may be superfluous -- if you're required to register (or renew), and you don't, under the 1909 Act you lost your rights -- no adverse possession necessary. That's how (most of) "It's a Wonderful Life" fell into the public domain.

On your last point, I've worked with copyright owners, and I've never known one to behave the way you describe: waiting calmly for infringement to get worse so that the damages will be higher -- IF they win. In my experience, the motivating emotion for plaintiffs in copyright suits is not greed, it's usually fear, or anger. It's anger until the infringement becomes large enough magnitude or backed by a party with resources, then it becomes fear.