How Litigation Finance Can Help Modernize Music Copyright Law
Some critics of litigation finance complain that providing funding for under-resourced litigants leads to fewer settlements, more trials, and a greater burden on judicial resources. But, in some situations, more trials and more judicial rulings may be a good thing rather than a bad one. Music copyright law offers one example.
The technological revolution in music production has led to great uncertainty in how to apply existing copyright law principles to new issues. For one thing, the sampling of sound recordings has expanded rapidly since the 1980s, but it is not at all clear about the extent to which one artist may sample the work of another without infringing on a copyright. The copyright law concepts of “fair use” and de minimis violation were developed for very different legal contexts, and courts have disagreed about how to apply them to new technological practices like sampling.
But the courts have not been able to resolve their disagreements, even though federal copyright law is designed to create a uniform and harmonious nationwide scheme. The development of case law has been slow, even as technology continues to change much more quickly. All of this compounds the problems of judicial rulings that lag behind new developments.
One factor that restricts the development of copyright law is the high cost of copyright litigation. The cost of litigating a copyright case averages three times the cost of litigating an ordinary civil case. This means that those in the music industry have developed a variety of business practices designed to avoid litigation, including the creation of needless licenses, clearances and permission, which are expensive but cost less than litigation. And when disputes do arise and make their way to court, the parties typically settle quickly, which prevents courts from making rulings that would advance the law.
Of course, this is where litigation financing can come in. Funders can lessen the risk of loss and make it possible for the parties on both sides of a copyright dispute to pursue their rights at trial and on appeal. In this context, more litigation and more judicial decisions will eventually lead to greater economic efficiencies in the music business. Legal uncertainty helps no-one, and litigation finance is one way to make the elimination of legal uncertainty cost effective.
Topics: litigation finance, legal reform, third-party funding, litigation costs, copyright, music sampling
Works Cited: Glenn Chappell, Seeking Rights Not Rent: How Litigation Finance Can Help Break Music Copyright’s Precedent Gridlock, 15 Duke L. & Tech. Rev. 269 (2016).
