Wu on Tolerated Use

Tim Wu (Columbia University - Columbia Law School) has posted Tolerated Use on SSRN. Here is the abstract:

"Tolerated use" is a term that refers to the contemporary spread of technically infringing, but nonetheless tolerated use of copyrighted works. Such patterns of mass infringement have occurred before in copyright history, though perhaps not on the same scale, and have usually been settled with the use of special laws, called compulsory licensing regimes, more familiar to non-copyright scholars as liability rules. This paper suggests that, in present times, a different and slightly unusual solution to the issue of widespread illegal use is emerging - an "opt-in" system for copyright holders, that is in property terms a rare species of ex post notice right. In addition, this paper proposes a several ways to deal with tolerated use problems, including a complement-driven theory of derivative works, and the "copyright no action policy."

And from the text:

What is the difference between tolerated use and implicitly licensed use? The difference is legal. In the case of an implicit license you could, if brought to court, point to some conduct or writing that creates permission to engage in the activity in question. For example, many newspapers and magazines, such as the New York Times, provide a way for readers to email articles. Such emailing constitutes both a “reproduction” and a “distribution” of the articles under the copyright law.8 However, were someone sued for such emailing would have a defense: that by clearly encouraging readers to email stories, the paper had implicitly created a contract — a non-exclusive license – permitting the reader to email the stories to friends.

By contrast, in a tolerated use scenario, there is no such contract, extant and impliable. Instead, what the defense, if any, is a fair use argument of some kind, an argument that the laches of the copyright owner should bar recovery (equity aids the vigilant),9 or possibly a statute of limitations defense. The main point is that that the liability likely exists, but it is simply a matter of non-enforcement. The difference from an implied contact should be clear.

Highly recommended.