Copyhype

In The Big Steal: Ideology, Interest, and the Undoing of Intellectual Property,¹Also available at Amazon. Jonathan Barnett, a law professor at University of Southern California Gould School of Law, explores the dramatic shift in intellectual property law over recent years that has disproportionately benefited big tech companies: online platforms, aggregators, and social media services that rank among the world’s wealthiest and most influential companies. Despite the popular narrative that the balance of power in IP politics favors rights owners, Barnett argues these changes have led to an involuntary transfer of wealth from rights owners to large tech firms that has, at best, gone unnoticed and, at worst, been celebrated.

The Big Steal offers a crucial corrective to this conventional wisdom by taking a fresh look at the politics and economics behind IP law in the digital economy. It shows how weak IP rights favor digital platforms over creators, explores the common forces driving the erosion of IP rights, and challenges the “information wants to be free” chorus from scholars and advocates.

For online platforms, copyright protections impose costs. These companies rely on other people’s content to make money. Lowering those costs is good. Even better is getting rid of them entirely and minimizing any legal risks to accomplish that.

Barnett argues that big tech has achieved this goal by persuading policymakers and judges to take any action that weakens copyright protections or renders them less effective. He highlights two examples: first, the dramatic expansion of fair use through the early 2000’s and second, the “renegotiation” of the Section 512 safe harbor through litigation in a way that “heavily favors Tech at the expense of Content.”

The Big Steal addresses a similar shift in patent law. I sometimes see copyright folks assume that while big tech firms favor weaker copyright protections, they must be in favor of strong patent protections, given their focus on technology and innovation. This assumption is largely incorrect: most large information-technology firms advocate for weaker patent protections because they are either net users of technology inputs that other firms have developed—in which case, patent protections impose costs—or monetize their own R&D investments indirectly through an integrated organizational structure like a platform or network—in which case, patent protections are less relevant to their bottom line. The result is significant overlap among those who advocate for both weaker patent and weaker copyright protections.

Advocates have been incredibly successful in implementing this shift in IP policy. But how were they able to accomplish this?

Barnett explains that, in part, big tech has adopted the rhetoric of the public interest in their efforts to lobby for weaker IP protections by arguing that weaker IP protections benefit consumers because they reduce costs and increase access to creative and technological assets. Tech’s arguments happen to converge with like-minded scholars and advocacy groups that are philosophically skeptical of IP rights. This “accidental” alliance, as Barnett dubs it, promotes a policy package that is inherently attractive to consumers—who doesn’t like free stuff?—and thus an “easy sell” to policymakers and judges.

But it would be a mistake to assume the public interest is equivalent to big tech’s business interests. Barnett ends by underscoring what we lose by weakening IP rules. Weaker IP protections undermine the ability of creators and innovators to directly monetize their work, constrain the range of feasible business models available, and relegate creation and innovation to second-class status (or worse). Barnett argues that weaker IP regimes may paradoxically concentrate market power in a few integrated firms that can control innovation and commercialization internally. In contrast, stronger IP rights not only incentivize innovation but also lower entry barriers and promote competition.

More broadly, I would add, by limiting the ability of companies to organize around and directly commercialize creation and innovation, we risk losing those aspects of their work that are socially and culturally important. How do we ensure rigorous journalism, high-quality educational materials, or emotionally resonant films when creation is commodified into content?

The Big Steal comes at a critical time for copyright policy with the rise of generative AI, which depends on creative works for training. Will policymakers and judges recognize the importance of strong IP rights that will not only protect the ability of rights owners to control how their works are used and share in the value they generate but also lead to greater innovation and competition across the board? Or will we instead witness the further involuntary transfer of wealth from creators to big tech, with profound consequences for the public interest?