JIPEL Vol. 2 – No. 2

Vol. 2 – No. 2 (Spring 2013)

Three-Dimensional Printing and Open Source Hardware

Three-Dimensional Printing and Open Source Hardware
By Eli Greenbaum* A pdf version of this article may be downloaded here.  


Open source hardware, the physical equivalent of open source software, is a movement that advocates the public provision of hardware design documentation. For example, a purchaser of an Arduino open hardware circuit board has access to the full design documentation of the product, as well as the source code of all accompanying software.[1] The ambitions of the open hardware movement have been inspired by the successes of open source software. Open principles of design have been central to the creation of significant pieces of software including, to take only some of the most prominent examples, the Linux and Android operating systems. Indeed, estimates are that more than half the software acquired in the coming years will be open source.[2] While the open hardware movement remains in its infancy, it aspires to harness the open source philosophy for hardware design as successfully as those ideals have been applied in the context of software.[3] One of the factors central to the success of open source software has been effective and enforceable licensing frameworks.[4] On a theoretical level, licenses allow open source organizations to define community norms and the boundaries of acceptable behavior.[5] More practically, legally enforceable licenses provide an effective means of enforcing those community norms and standards on non-cooperative members of the community.[6] Unfortunately, it has proven difficult to construct a license to effectively implement an open hardware arrangement.[7] This Article, however, shows how the rapidly evolving technology of three-dimensional printing can be used to construct a robust open hardware license.[8] Those seeking to develop a sustainable model for open source hardware have struggled with both economic and legal obstacles. On the economic front, open source hardware differs in important ways from open source software. First, software can be compiled from source code and distributed at close to zero cost. In contrast, producing a piece of hardware involves a more involved and costly undertaking to source appropriate materials and structure an often-complex manufacturing process.[9] Similarly, while a work of software can be copied and distributed at zero cost, the manufacturing costs of hardware make the expense of reproduction and distribution not insignificant. Hardware manufacturers may therefore find that restrictive intellectual property protection is necessary to recoup any expenses of production.[10] Moreover, relatively small open source communities may find it difficult to compete with the economies of scale of commercial manufacturers.[11] While collaborators on a software project can easily test modifications proposed by the group, the cost of building and prototyping improvements in physical objects makes this more difficult in the hardware context.[12] Open source hardware must also overcome legal obstacles. Open source software can rely on copyright law to support its legal structure. As copyright automatically protects all original software works, a copyright license is necessary for the lawful reproduction, modification or distribution of software. This copyright license can be made subject to certain conditions such as, for example, the “copyleft” conditions of the most prominent open source software license, the General Public License (“GPL”).[13] The GPL grants licensees broad rights to copy, modify and distribute licensed works, only on the condition, however, that licensees make all works “based on” the licensed code available under the terms of the GPL as well.[14] This mechanism ensures that the GPL’s broad rights are also granted to any improvements to the licensed code.[15] Similar mechanisms are used in other open source software licenses to ensure, for example, the continued attribution of works to their authors.[16] Unfortunately, as discussed in greater detail below, since useful physical objects are generally not protected by copyright, these relatively simple legal devices cannot be used in the open source hardware context. Three-dimensional printing offers the opportunity to overcome these economic and legal hurdles. With regard to the economic obstacles, three-dimensional printing reduces the cost and complexity of obtaining raw materials from a variety of sources, and of constructing assembly lines and manufacturing plants. These efficiencies may allow open source communities to compete with the economies of scale of commercial manufacturers.[17] Three-dimensional printing also offers the possibility of easy and rapid prototyping of physical objects and thereby increases the opportunities for collaboration on open hardware projects. Against the backdrop of this economic potential, this Article describes how the technology of three-dimensional printing can also be employed to surmount the legal challenges in creating an effective open source hardware license. Section I of the Article describes the shortcomings of current open source hardware licenses, especially how such licenses fail to implement regimes to ensure that proper attribution for inventors is provided and that documentation for open source hardware designs is shared with the community. Section II provides some technological and historical background regarding three-dimensional printing, and analyzes the application of copyright law to this technology. Section III details a licensing regime that, applied to three-dimensional printing, can implement an effective and enforceable open hardware license. This section also discusses some of the advantages and disadvantages of the proposed regime. The Appendix includes a first draft of the Three-Dimensional Printing Open License, which implements the proposed open hardware licensing regime.

I. Open Hardware Licenses

To date, several open hardware licenses have been developed. The most prominent of these include the TAPR Open Hardware License and the CERN Open Hardware License.[18] This Section details the practical shortcomings of current open hardware licenses, and then goes on to explain why these shortcomings are the inevitable consequence of the legal foundations of those licenses.

A. The TAPR and CERN Open Hardware Licenses.

The TAPR license was developed under the auspices of the Tucson Amateur Packet Radio association, an international organization which supports research and development in the area of amateur digital communications.[19] The license is intended to emulate the “copyleft” provisions of the GPL in the arena of open hardware – in other words, to ensure that licensed design documentation (and modifications to that documentation) continues to be made available under the terms of the TAPR license itself.[20] The CERN license was created in 2011 by employees of CERN, the European Organization for Nuclear Research, in order to allow groups across organizations to collaborate on hardware projects.[21] The CERN license also includes copyleft provisions.[22] Unfortunately, neither the TAPR nor the CERN license successfully implements open hardware principles, and this failure is rooted in the tenuous legal foundations of the licenses themselves. For example, one of the fundamental goals of an open hardware framework should be the provision of design documentation to recipients of hardware.[23] This provision of design documentation allows recipients to modify and improve the hardware design. While the TAPR and CERN licenses provide that the initial recipient of an open hardware product should be supplied with design documentation, for reasons discussed below they do not provide that such design documentation should be passed on to downstream recipients.[24] Another important aim of open hardware should be the proper provision of attribution to designers of the products.[25] Attribution requirements can provide important incentives for designers, who may be assured that they will receive proper credit for their innovations.[26] Again, neither of the TAPR or CERN licenses provides that downstream recipients of hardware should receive attribution notices.[27] While the TAPR and CERN licenses may prove useful for allowing research collaboration or amateur experimentation, they do not provide an adequate legal framework for the integration of open hardware in manufacturing or distribution networks. Modern large scale manufacturing is characterized by complex supply chain structures, in which the ultimate manufacturer (an “original equipment manufacturer” or “OEM”) purchases components from a network of suppliers.[28] These first tier suppliers themselves integrate parts purchased from an array of second tier suppliers, and this structure continues to cascade in a pyramid form.[29] Such supply chain structures exist, to take a few examples, in the automotive,[30] aerospace,[31] computer[32] and mobile phone industries.[33] In a similar vein, a product (or spare parts for a product) may move through multiple tiers of distributors before reaching the final end user.[34] Given these arrangements, a robust open hardware framework must ensure that obligations of attribution and documentation are easily passed through complex supply chains, and that any such requirements are relatively frictionless and impose minimal transaction costs. The TAPR and CERN licenses, which do not address downstream recipients at all, do not provide an adequate framework for the easy integration of open hardware in these settings.

B. The Unsteady Legal Foundations of Open Hardware Licensing.

These shortcomings of current open hardware licenses reflect their unsteady legal foundations. Unfortunately, open hardware lacks the legal tools which allow the easy implementation of enforceable open source software licenses. Open source software licenses are generally based on copyright law. Since both the source code and compiled executable code of software are protected by copyright, a license is required to copy, modify, and distribute those works. These license permissions can be conditioned on compliance with, for example, copyleft and attribution requirements. In the hardware context, however, no copyright license is required to use design documentation to build or distribute hardware. Open hardware licenses therefore cannot use copyright law to impose such copyleft or attribution conditions. Moreover, as property rights, copyrights can be enforced against any third party – even third parties with which the copyright owner has no direct contractual relationship.[35] Open hardware licenses, however, cannot rely on copyright law to facilitate the enforcement of license conditions. Basing open hardware licenses on patent law also presents challenges.[36] On the one hand, patents are property rights that protect against the unauthorized use and distribution of patented hardware by any third party. As a result, a patent license can require compliance with certain obligations in order to engage in these activities, and these requirements can be enforced against downstream users of the hardware. Patents, however, are expensive to obtain and costly to enforce.[37] Unlike copyrights, patents are not provided for all inventions, but only those that meet relatively high standards of non-obviousness, novelty, and utility. Moreover, the “patent exhaustion” doctrine limits a patentee’s ability to impose requirements on the post-sale activities of a purchaser.[38] Given these constraints, patent law is an unwieldy tool for constructing an open hardware license.[39] Contract law could be another avenue to enforce the conditions of an open source license and does, in fact, form part of the foundations of both the TAPR and CERN licenses.[40] These licenses contractually bind the recipient of design documentation to pass on such documentation to recipients of physical hardware. The formation of a contract, however, generally requires the satisfaction of elements of offer, acceptance and consideration, so contract-based license conditions may not be enforceable against entities not party to the contract.[41] As a result, in order to bind downstream recipients, an open hardware license would need to require recipients to contractually bind all further recipients to the same obligations.[42] This chain of contracting and recontracting imposes transaction costs, which would be significant in industries characterized by long supply chains.[43] One break in this sequence of contracts would result in downstream recipients not being bound by the license terms. This inherent limitation of contract law seems to be the reason that the TAPR and CERN licenses do not pass on requirements to downstream recipients.[44] Contract law may prove inadequate in the open source context for other reasons. Damages for breach of contract are typically measured by the financial injury to the non-breaching party.[45] Such calculations may be impossible in the setting of open source licensing, where the material is provided without charge or for a nominal fee. Federal copyright law, in contrast, provides for remedies that are not measured by the injury to the licensor, such as the disgorgement of the infringer’s profits.[46] Other remedies available under copyright law include preliminary or permanent injunctions to enjoin copyright infringement.[47] Indeed, the Federal Circuit has opined that open source licenses restrictions “might well be rendered meaningless absent the ability to enforce through injunctive relief.”[48] Copyright law also provides for the possibility of attorney’s fees[49] and the destruction of infringing articles,[50] both of which can prove effective weapons in the open source context. The absence or limited availability of these remedies under contract law, however, makes contract law a weak foundation on which to build an open source framework. Efforts have been made towards designing a practical system that would provide downstream users with easy access to design documentation. Under a process proposed by the Open Source Hardware and Design Alliance (OHANDA), each manufactured piece of open hardware could receive a registration key to be engraved or printed on the hardware.[51] Recipients of the hardware would be able to use that registration key to locate and access the specific design documentation at the online OHANDA database. OHANDA, however, only offers a system for providing attribution information and distributing hardware documentation to the initial recipient of an article. Subsequent manufacturing activities with such documentation would presumably be governed by one of the open hardware licenses described above. OHANDA thereby provides a marginally improved open hardware arrangement, but does not address the fundamental legal issues with open hardware licenses themselves. For example, the OHANDA system cannot require the provision of hardware documentation to downstream recipients. Much of the success of open source software can be attributed to the fact that it has succeeded in integrating itself in the commercial software industry, and that open source software licenses provide robust legal structures for dictating and enforcing the terms of such integration. In the same way, a viable framework for open source hardware must be capable of incorporation in global manufacturing, and must be supported by enforceable licensing terms. Current open hardware frameworks, however, cannot easily impose documentation or attribution obligations on downstream users, and cannot enforce their terms with effective legal remedies. Even so, an open hardware license that satisfies these requirements can be built in the technological context of three-dimensional printing. The next Section reviews some technical nuts and bolts of three-dimensional printing, and provides some legal analysis of that background.

II. Three-Dimensional Printing and Copyright

A. Technology of Three-Dimensional Printing

Three-dimensional printers use digital designs to automate the manufacture of physical objects. Three-dimensional printing technologies were independently invented in the mid-1980s in a number of different countries.[52] 3D Systems, founded in 1986, was the first company to commercialize three-dimensional printing technology.[53] Since that time, more than 30 different techniques for three-dimensional printing have been commercialized.[54] The RepRap project, an open source project for the creation of inexpensive three-dimensional printers, was founded in 2006 after some of the initial patents that covered three-dimensional printing processes expired.[55] RepRap makes all of its designs and software publicly available under the terms of the GPL, such that they are available to the public to be used and improved.[56] Makerbot, for example, is a company that provides consumer three-dimensional printing machines based on the RepRap design.[57] The three-dimensional printing process typically begins with a digital design created using computer aided design (CAD) software. This design is transferred to the printer, which breaks down the design file into a series of thin two-dimensional slices. Each slice is used as a blueprint to construct a single layer of the three-dimensional object. The physical object is constructed as each layer is sequentially laid down by the three-dimensional printer. [58] A broad range of technologies is currently employed to lay down the individual layers in a three-dimensional printing process. “Fused Deposition Modeling,” the technique used by the RepRap machines as well as those developed by other companies, involves the controlled deposit of molten plastics or metal.[59] The molten material is deposited to create a single two-dimensional slice of the physical object. This material promptly hardens to form a single layer of the object, and this process is repeated to form successive layers. “Stereolithography,” the original method used by 3D Systems, uses an ultraviolet laser to harden successive layers of light-sensitive fluid.[60] Other prominent technologies use methods similar to standard ink-jet printing to inject powder with a binding material.[61] The common denominator of this diverse range of technologies is that they all involve an “additive” process, in which the final object is constructed from accumulations of raw material, in contrast to standard “subtractive” manufacturing technology, in which raw materials are cut and molded into the desired shape. Current technologies can use a variety of plastics, metals and ceramics to construct three-dimensional objects.[62] The additive nature of three-dimensional printing allows for the manufacture of objects that would be difficult to produce using more traditional methods, such as objects with complex geometries or internal moving parts.[63] Additive manufacturing technology can also be used to construct articles with novel combinations of materials,[64] or even generate materials with novel properties including increased resiliency and strength.[65] Companies and researchers are exploring the possibilities of “printing” electronic circuits or even biological tissues.[66] Current commercial technologies allow the printing of details a fraction of a millimeter large,[67] and some researchers have used advanced technologies to print with a resolution of hundreds of nanometers.[68] As the technology of three-dimensional printing has matured, both free and commercial services have developed to assist consumers in taking advantage of this progress. Thingiverse, for example, provides a free Internet platform for the sharing of digital designs.[69] Users who upload designs can choose to license them under a range of terms, including open source licenses. In addition, online commercial service bureaus provide consumers with printing services.[70] These businesses offer advanced printing technology with a variety of materials. Consumers can upload their designs to the business through the Internet, quickly obtain an automatic price quote of the cost of printing, and have the printed object shipped to their address.

B. CAD and STL Files

As noted, the printing process begins with a digital design of a three-dimensional object, typically created using computer-aided design (CAD) software. The standard CAD file formats, which can be understood and modified by humans, must be translated into a format that can be processed by three-dimensional printers.[71] The STL (STereoLithography) file format is the current de facto standard for three-dimensional printing.[72] An STL file format represents the outside surface of an object with a large number of tiny triangles.[73] The STL file format provides a relatively straightforward means of describing the geometry of a three-dimensional object in a manner that can be used by three-dimensional printers. Nevertheless, the format is not without its problems, and a number of alternative file formats or enhancements to the STL standard have been proposed.[74] Some alternatives to the STL format contain additional information, such as data regarding the color, texture and material of printed objects.[75] The relationship between CAD and STL files can be roughly compared to the distinction between software source code and object code. CAD files and source code are readily intelligible and modifiable by humans, while the STL files and object code designed to be used by computers are not.[76] CAD designs and STL files are not computer programs in the conventional sense of the term. Software is a set of instructions for a computer to generate a specific result. In contrast, CAD and STL files are more akin to engineering or technical drawings in that they contain data that represent the contours of a specific object, but do not provide instructions to a three-dimensional printer regarding how that object is to be constructed.[77]

C. Copyright in Printed Articles and Design Files

Copyright in the physical objects created by a three-dimensional printing process will be limited. In general, copyright law does not grant protection to utilitarian objects. Section 101 of the Copyright Act provides that the design of a useful article will be protected “only if, and only to the extent that, such design incorporates pictorial, graphic, or sculptural features that can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the article.” The aspiration of this statutory provision is relatively clear: to distinguish works of applied art, which should be protectable by copyright, from works of industrial design, which should not.[78] The clarity of the objective, however, has been belied by the practical difficulty of implementing the distinction in concrete situations.[79] To this end, a number of courts and commentators have proposed tests to distinguish between the copyrightable expression and non-copyrightable utilitarian aspects of physical articles.[80] In contrast to the limited and uncertain copyright protection available for physical articles, both CAD and STL files easily qualify for copyright protection. Copyright law protects “pictorial, graphic and sculptural works,” which include: “two-dimensional and three-dimensional works of fine, graphic, and applied art, photographs, prints and art reproductions, maps, globes, charts, diagrams, models, and technical drawings, including architectural plans.”[81] Such files are protected by copyright law regardless of whether they are intelligible by humans or only by computers.[82] Courts have recognized and enforced copyrights in designs, even as they have also generally held that copyright law does not proscribe the use of copyrighted designs to manufacture physical objects.[83] The manufacture of a physical object in an automated three-dimensional printing process, however, will infringe the copyright of the underlying design file. First, copyright law grants the copyright holder the exclusive right to reproduce the copyrighted work.[84] The manufacture of an object in a three-dimensional printing process will infringe this right of reproduction, since the process requires the copying of an STL file into the memory of a three-dimensional printer.[85] Second, copyright law grants the copyright holder the exclusive right to prepare derivative works of the copyrighted work.[86] The printing of a physical article from a design file will also infringe this exclusive right, since the three-dimensional printing process requires the transformation of the CAD or STL file into a series of print-ready two-dimensional slices.[87] In other words, the owner of the copyright in an STL file cannot prevent the use of that file in a general manufacturing process. But three-dimensional printing is not a typical manufacturing process – the use of digital designs and automated manufacturing creates a physical article that corresponds directly to the specifications of the digital design, and which requires the copying and transformation of the original digital file. As such, without a license, the use of the design file in a three-dimensional printing process will infringe the copyright in the design file.

III. An Open Hardware License for Three-Dimensional Printing

Two aspects of three-dimensional printing can provide the foundation for an effective and enforceable open hardware legal framework. First, the printing of a physical object necessarily requires the copying of the digital design used to print that object, in the same way that using software on a computer necessarily involves the creation of a copy of that software product. Second, objects created by three-dimensional printing bear a one-to-one correspondence between the digital file and the object that is actually printed.[88] In these two respects, three-dimensional printing differs from traditional manufacturing methods. The author proposes the “Three-Dimensional Printing Open License” (the “TDPL”), an annotated draft of which is attached as an appendix to this Article. The TDPL draws on the unique characteristics of three-dimensional printing to construct a license that incorporates enforceable documentation, attribution and copyleft provisions. The application of the TDPL is limited to the specific technological setting of three-dimensional printing and, as described in more detail below, may not be appropriate in all circumstances. Nevertheless, as the technology improves and is gradually integrated into a broad swath of industries, the scope of the license’s application will increase. The next section describes the theory and structure of the license, and the section after that presents arguments in favor of and against the proposed framework, and analyzes certain limitations of the license. Matters more directly related to the specific language of the license are addressed in annotations to the draft.

A. Theory and Structure of the License

The TDPL acts as a copyright license for a digital design file and, in this sense, follows the precedent of open source software licenses. The TDPL provides that recipients of the licensed design file are granted rights to copy, modify and distribute the design file, subject to certain conditions.[89] Under this framework, as long as the recipient of the digital design file satisfies the conditions of the license, she will have the right to manufacture the designed object in a three-dimensional printing process. Without the permissions granted by the TDPL, however, the use of a digital design file in an automated printing process would involve the unauthorized copying of the design file and constitute copyright infringement.[90] The TDPL imposes certain minimum conditions on the copying and distribution of the design file itself. These conditions are broadly comparable to similar provisions in open source software and hardware licenses, and are intended to ensure the continued attribution of the file to its author and the continued distribution of the design to downstream recipients under the terms of the TDPL itself. The license thereby generally prohibits the removal of any copyright information or other notices from the design file.[91] Second, in broad outline, the license provides that any recipient who modifies the design file must provide notice of such changes.[92] Third, the license provides that a recipient may only distribute the file (and derivative works of the file) pursuant to the terms and conditions of the TDPL.[93] While these conditions do not materially differ from conditions in other open licenses, they can have consequential effects in the context of three-dimensional printing. For example, a design file may be structured such that certain copyright information or other notices will be imprinted on the printed physical object.[94] As the TDPL prohibits the removal of these notices from the design file, and as the printed article bears a one-to-one correspondence to the design file, the effect of this provision is that the license can require that all articles printed with the design file will incorporate specified notices. Such notices can include attribution information specifying the identity of the initial author of the file. No less importantly, such notices can include information, for example, regarding an Internet site where any recipient of the printed article can obtain the design file.[95] These notices would allow all downstream recipients of the printed, physical article to have access to the digital files needed to manufacture that article. As noted, the TDPL also requires that a recipient who modifies the design file must communicate that fact in notices incorporated in the design. The details of this condition differ somewhat from other open licenses, and are intended to implement a copyleft obligation in the context of three-dimensional printing. The license provides that recipients may modify the design file, provided that the recipient at the same time also inserts in the design file, a notice describing where the modified design file may be accessed.[96] This new notice must also be included on the printed physical object.[97] Again, as a result of the correspondence between the file and the printed object, this provision provides downstream recipients of the printed article with access to the modified design files of the modified object. As the unauthorized use of the design file in a three-dimensional manufacturing process would infringe the copyright in the design file, a recipient of the file will not be legally permitted to use the design file to print objects unless she has complied with the requirements of the license.

B. Advantages and Disadvantages of the Licensing Framework

The TDPL licensing regime presents several advantages. First, the license is designed to allow the easy integration of open hardware into complex supply chains.[98] The license ensures that all recipients of the hardware throughout a distribution chain have access to the original design file, but this accessibility is achieved without imposing complex contracting requirements on supply chain intermediaries. Downstream intermediaries and integrators that make no changes to the design documentation should be able to market and distribute hardware, or incorporate hardware into larger articles, without concern for any legal obligations imposed by the license. In general, the license is intended to be self-executing in that the required notices should be the automated output of the three-dimensional printing process. This absence of contractual obligations, and the concomitant lowering of administrative and transactional costs, should ease the integration of open source hardware into commercial items without sacrificing access to the design.[99] Another advantage of the TDPL regime is that it is straightforward to define the design information that must be made available. Developers of open source hardware licenses have struggled to specify the level of detail that should be provided in design documentation.[100] Arduino, for example, provides schematics and reference designs for its circuit boards, but does not provide the material composition and schematics for each individual component on that circuit board. The Arduino approach makes practical sense; the burden of disclosing the specifications of each and every component quickly becomes unwieldy, and recipients probably do not need that level of resolution in order to construct the Arduino circuit board from the design documentation. On the other hand, an effective licensing regime needs to ensure that recipients are provided with an adequate level of detail, and finding an ex ante definition for the proper level of resolution can prove difficult.[101] The TDPL regime, however, relies on the exact correspondence between the digital design file and the printed object to resolve this difficulty. The license simply provides that the recipient must be given access to the file used to generate the printed article. This file contains all the technical detail necessary for the recipient to print the article herself. The TDPL recognizes that it may be burdensome to require licensees to provide continuous updates of all modifications made to the design file. To address this problem, the TDPL contains a limited exception to the requirement to provide access to modified design files. The license provides that modifications created solely for the internal use of the licensee do not trigger the requirement to include a notice in the design file.[102] The license also provides that the distribution of physical objects printed with the design file to third parties creates a presumption that the modifications were not made solely for the internal use of the licensee.[103] The intent of these provisions is to allow licensees the freedom to experiment and test new designs without the costs of compliance with the TDPL obligations. At the same time, the provisions attempt to ensure that once a licensee begins to distribute physical objects created with the modified design file she will be obligated to make the modified design files available. Of course, the licensing framework of the TDPL also presents theoretical and practical disadvantages. Most importantly, the copyleft provisions of the TDPL to some extent depend on the use of the design document in a manufacturing process in which the design document is itself copied.[104] Otherwise, a recipient of the design would not require a copyright license to manufacture an article based on the design and, in such a situation, the use of the design could not be conditioned on compliance with the license. This suggests that the TDPL may be most appropriate for articles that are difficult or impractical to produce in a traditional manufacturing process, or in areas in which three-dimensional printing has a comparative advantage, such as the production of complex parts, customized articles, or articles incorporating novel materials.[105] As the technology of three-dimensional printing improves and its costs decrease, the TDPL will become appropriate for a growing and diverse number of articles. Second, even traditional manufacturing is increasingly making use of computer aided design.[106] Given this growing reliance on computers in the design process, the use of a design licensed under the TDPL will most likely be in the context of a process that does incorporate CAD, even if the entire process is not automated. Unauthorized use of the licensed design in such a process would also require a license. Third, to the extent this argument is a claim that an open hardware design can be easily reverse engineered and implemented in a separate, non-infringing design, the argument applies no less forcefully to the development of open source software.[107] A second disadvantage of the TDPL is that copyrights in digital design files would be limited to the expressive, non-functional aspects of the file. Black letter law provides that copyrights do not protect ideas or information, but only the specific expression of an idea.[108] Furthermore, the “merger” doctrine provides that copyright law will not protect any expression that must be copied to implement a particular idea.[109] As many physical articles produced with three-dimensional printing will be functional objects, the copyright in the design document that describes those articles may be limited. And, since the enforceability of the TDPL depends on the design file copyright, the license may not be effective for useful or functional designs. Even so, the same contentions would argue against the use of open source licenses for software programs. Software, like a design file, contains both expressive and functional elements.[110] Moreover, software is typically valued for those very functional elements, rather than the expressiveness or creativity of the code.[111] Nevertheless, courts have continued to uphold copyrights for the expressive elements of software files, even as they have held that such copyrights cannot protect the functional elements of a program, or the elements of a program that have been dictated by external standards.[112] Despite this limitation on copyright protection for software, the enforceability of software licenses in general, and of open source software licenses in particular, is generally accepted.[113] The TDPL should be no less enforceable than such software licenses. A third disadvantage of the TDPL is that the license requires recipients who modify a design to maintain an accessible, online repository of the modified design. This may require recipients to bear the costs of maintaining an Internet location where such designs can be accessed, as well as incurring the administrative costs of keeping and posting historical and up-to-date copies of such designs. Even so, this requirement does not significantly differ from similar obligations in open source software licenses. For example, version 3 of the GPL allows distributors to satisfy their copyleft obligations by providing recipients with a written offer to access source code from a network server.[114] In allowing distributors to satisfy their copyleft obligations in this fashion, the Free Software Foundation has noted that the advancement and proliferation of Internet technology should ensure that this option is not too burdensome for either distributors or recipients of source material.[115] The text of the TDPL attempts to preempt another possible complication of the licensing regime. To a large extent, the scope of a licensee’s copyleft obligations under the license is relatively clear: a licensee is only obligated to provide design documentation for the specific printed article. This provision should serve to alleviate concerns that the incorporation of an open hardware article in a larger product would require the disclosure of design documentation not related to the specific printed article.[116] Nevertheless, as the technology of three-dimensional printing advances and becomes more widespread, it is possible that designers would develop “hardware design blocks” – modular designs, representing self-contained hardware pieces, which could be incorporated in a more extensive design for the printing of larger, more complex objects. This would parallel the use of software libraries for the development of complex software products, or the use of intellectual property cores in the development of semiconductor chips.[117] In such event, concerns could be raised regarding the impact of the TDPL’s copyleft obligations on independently designed modules. Similar questions in the arena of open source software licensing have proven to be the source of much debate and confusion.[118] The TDPL attempts to preempt such matters by providing that any design work that may be represented in a separate digital file will not constitute a derivative work of the licensed design.[119] In other words, the incorporation of a TDPL licensed “design block” inside a larger design will not cause the larger design to be subject to the terms of the TDPL. The TDPL also attempts to address a situation where the techniques of three-dimensional printing may also be used to manufacture products on which no label could practically be attached. For example, it has been anticipated that future applications of three-dimensional printing may include the production of chemicals or even biological tissues.[120] The TDPL attempts to address such applications by providing that, in certain limited circumstances, the attribution and licensing notices may be imprinted on packaging ordinarily received by the end user.[121] In sum, the TDPL provides a framework for licensing open hardware designs. The TDPL is enforceable under copyright law, since the use of a design document in a three-dimensional printing process not in compliance with the license will infringe the copyright in the design document. Under this framework, the licensor of a design document can be confident that the TDPL will be enforceable against downstream users of the design document, and that the law will provide effective remedies to enforce the terms of the license. In addition, all downstream users of printed articles will be provided with the attribution and documentation information made available on the printed article itself.


Open hardware proponents have expressed concern that intellectual property laws could be used to stifle the growth of three-dimensional printing. Most obviously, the physical objects created by three-dimensional printing could be the subject of patent protection, and patent law could be applied to prevent the manufacture, use or sale of those articles.[122] Other commentators have noted that copyright law could be used to restrict the use of digital designs. First, digital rights management (“DRM”) and other content access restrictions could be applied to three-dimensional printers in order to ensure that such devices only construct pre-authorized designs, in the same way that such technological restrictions are already applied to other forms of digital content.[123] The Digital Millennium Copyright Act (DMCA) would criminalize the circumvention of those DRM restrictions, even as applied to legitimate uses of digital designs.[124] In addition, Internet sites that allow for the easy sharing of digital designs could be subject to infringement lawsuits unless they found safe harbor under the DMCA “notice and take down” provisions.[125] Intellectual property law can be used to restrain the advance of three-dimensional printing, but it can also be used to ensure broader access to such technology. This Article has shown that the construction of an open hardware license is possible in the technological domain of three-dimensional printing. As with open source software, this license is based on copyright law, and should therefore be relatively easy to apply and enforce. Moreover, and again as with open source software, such a license could be instrumental in creating a “commons” where the free exchange of design information can flourish.

Appendix: The Three-Dimensional Printing Open License

The Three-Dimensional Printing Open License (“License”) has been constructed specifically for situations in which a digital design is used to generate physical articles in an automated manufacturing process, and its application may not be clear in other situations. You may not use a work licensed under this License except in compliance with these terms. You are not obligated to agree to these terms, but nothing else grants you the right to use a work licensed hereunder.[126] 1. Definitions. The following terms, when capitalized in the body of this License, shall have the meanings set forth below.
1.1 “Build Form” means any form of the Work which is provided to any device for the manufacture of a Printed Article in an automated manufacturing process. 1.2 “Copyright” means copyright and any similar right (including any rights of industrial design and any semiconductor topography rights), whether registered or unregistered.[127] 1.3 “Derivative Work” means any work that is a derivative of the Work under applicable law. Notwithstanding the foregoing, a Derivative Work does not include any work that may be separately represented in a digital file that does not include any part of the Work itself. 1.4 “Internal Purposes” means for internal or personal research and development purposes. A distribution of Printed Articles to third parties not under your the sole control or not working solely on your behalf creates a presumption that your modifications are not for Internal Purposes. 1.5 “Licensor” means any individual or entity that creates or has knowingly contributed to the creation of the Work, but does not include an individual or entity that only distributes a Work or Printed Article. 1.6 “Modified Notice” means a notice (a) incorporating the information in a Required Notice, (b) stating that You have modified the Work, and (c) satisfying any other requirements of this License. 1.7 “Printed Article” means a physical article created by using digital files of the Work in an automated manufacturing process. 1.8 “Required Notice” means any element of a Work which provides (a) information regarding the authorship of the Work and stating that the Work is provided under this License, or (b) providing direction to a URL which displays the information listed under clause (a). A Required Notice also includes any element of a Work which causes the imprinting of the foregoing information on a Printed Article. 1.9 “Source Form” means the preferred form for making modifications to the Work. Source Form does not include file formats in which only minor changes (such as repair, resizing or changes of orientation may be made), such as STL file formats. 1.10 “Work” means any work licensed under this License and any work intentionally incorporated into a work licensed under this License. 1.11 “You” means any individual or entity in possession of a Work.
2. Copyright License. Subject to the terms and conditions of this License, each Licensor hereby grants to you a perpetual, worldwide, non-exclusive, royalty-free license under its Copyrights to (a) reproduce, modify, prepare Derivative Works of, publicly display, publicly perform and distribute the Work and such Derivative Works in Source Form or Build Form, and (b) generate Printed Articles using the Work. 3. Conditions. Your exercise of any rights under this License is subject to the following conditions:
3.1 You may not distribute the Source or Build forms of a Work under any terms other than the terms and conditions of this License. 3.2 You may not modify or remove any Required Notice, provided however that you may change the location or size of any Required Notice in the Work, or the location or size of information imprinted by a Required Notice on a Printed Article, so long as (a) the Required Notice remains easily readable by humans in the Source Form of the Work and (b) any imprint or representation of the Required Notice in the Printed Article generated using a Work remains accessible and easily readable by humans or electronic devices.[128] 3.3 If you create a Derivative Work, you must (a) insert a Modified Notice in such Derivative Work and (b) license the Source and Build Forms of such Derivative Work under the terms of this License, provided however that as a limited exception you are not required to insert a Modified Notice in respect of modifications to the Work made only for Internal Purposes. 3.4 If the Required Notice of a Work contains or provides direction to a URL displaying the Source Form of the Work, then the Modified Notice must also contain or provide direction to a URL displaying the Source Form of the Derivative Work. The Source Form available at such URL must be in a format that is easily downloadable and copied, and must be maintained for at least three years from the last time you generated Printed Articles using the Work and as long as you offer spare parts or customer support for the Printed Article.[129] Any attribution or copyright information in the Required Notice may be provided at such URL location rather than in the Modified Notice itself. 3.5 If the Required Notice of a Work causes the imprinting of information onto a Printed Article, the Modified Notice must cause the imprinting of the same type of information on the Printed Article in the same location and format as the imprinting caused by the Required Notice, subject to the exceptions in Section 3.2. 3.6 Notwithstanding anything to the contrary in this License, you may remove a Required Notice if the Modified Notice satisfies the conditions of this License. 3.7 As a limited exception to the requirements of this Section 3, if a Printed Article is a non-solid substance then the Required Notice or Modified Notice may be imprinted on the packaging in which the end user is expected to receive the Printed Article.
4. No Removal of Notices from Printed Articles. You may not remove the imprint of any Required Notice on a Printed Article. If You distribute a Printed Article to a third party, you agree to contractually obligate such third party to (a) observe such prohibition, and (b) contractually obligate any further transferees of the Printed Article to agree to observe the prohibitions of this Section as if such transferee were in your position. 5. Patent License. Subject to the terms and conditions of this License, each Licensor hereby grants to You a perpetual, worldwide, non-exclusive, royalty-free, irrevocable patent license to make, use, offer to sell, sell, and import the Work and any Printed Articles (including the right to exercise such rights through third parties). The license granted by a Licensor under this provision applies only to Printed Articles created in an automated manufacturing process in which a Copyright of the Work is necessarily infringed. This patent license does not apply to any Printed Works created in violation of the terms of this License. In addition, the license granted by a Licensor under this provision applies only to patent claims that are necessarily infringed by (a) elements of the Work that have been intentionally included in the Work by the Licensor or (b) the combination of such elements with the work in which such elements were originally included.[130] 6. No Trademark License. This License does not grant rights to use the trademarks of the Licensor, except for reproducing and describing the content of any Required Notice. 7. Disclaimer of Warranty. To the extent permitted under applicable law, the Work (including all Contributions) are provided on an “As Is” Basis, without warranties or representations of any kind. In addition, no warranty or representation is provided regarding any Printed Article that may be generated through use or application of the Work or any Derivative Work thereof. Licensor and all Contributors disclaims all express, implied or statutory warranties, including, without limitation, any warranties of merchantability, fitness for a particular purposes, title or non-infringement in respect of the Work or any Printed Article that may be generated through use or application of the Work or any Derivative Work thereof. 8. Limitation of Liability. Unless required pursuant to applicable law, no Licensor shall have any liability to You for damages under any cause of action, including any direct, indirect, special, incidental or consequential damages of any kind (including without limitation any commercial damages or damages in respect of loss or profits, loss of data, loss of economic opportunities, loss of goodwill), even if such Licensor has been advised of the possibility of such damages. Your use of the Work and any Printed Article is at your own risk. 9. Additional Warranties. You may choose to offer to third parties support, warranty and indemnity or liability obligations additional to those provided under the terms of this License, provided that such terms are consistent with the terms of this License. You may charge for the provision of the foregoing. In accepting such obligations, You may act only on Your own behalf and must clarify to any recipient of the Work or Printed Article that you are acting only on Your own behalf. 10. Interpretation. If any provision of Sections 7 (Disclaimer of Warranty) or 8 (Limitation of Liability) is unenforceable under applicable law, such provision shall be interpreted as necessary to give maximum effect to such provision as possible under applicable law.
* Attorney, Yigal Arnon & Co., Jerusalem, Israel. J.D., Yale Law School; M.S., Columbia University. The author would like to thank Daniel Green, Andrew Katz, Carlo Piana and Michael Weinberg for their comments on earlier drafts of this Article. All opinions and positions taken in this Article, and any mistakes or inaccuracies are, of course, the author’s own. [1] Arduino is an “open source physical computing platform,” which can be used to create hardware that interacts with the physical world. See Introduction, Arduino, http://www.arduino.cc/en/Guide/Introduction (last updated Dec. 23, 2009). The original design files for the Arduino hardware are available from the Arduino Internet website under the Creative Commons Attribution Share-Alike license, and the software is available under either the GPL or LGPL licenses. See Frequently Asked Questions, Arduino,http://arduino.cc/en/Main/FAQ (last updated Mar. 11, 2011). See also Brian Evans, Beginning Arduino Programming 5 (2011). For background on the Arduino project, see Clive Thompson, Build It. Share It. Profit. Can Open Source Hardware Work? Wired Magazine, Oct. 20, 2008, available online at http://www.wired.com/techbiz/startups/magazine/16-11/ ff_openmanufacturing. [2] Rachel King, Big Companies Open up to Open-Source Software, Wall St. J., Sept. 6, 2012, available online at http://online.wsj.com/article/ SB20000872396390443589304577633733725243996.html. [3] John Ackermann, Toward Open Source Hardware, 34 U. Dayton L. Rev. 183, 184 (2009); Thompson, supra note 1 (comparing the ambitions of Arduino to those of Linux and other successful open source software projects); Chris Anderson, Makers: The New Industrial Revolution 107 (2012). The “hardware” in “open hardware” can potentially refer to a variety of physical articles, from semiconductor chips to mechanical assemblies. This Article does not restrict the discussion to a particular category of article, but instead focuses on the range of objects that may be generated using the technology of three-dimensional printing. [4] As stated by the Debian Group, a prominent distributor of open source software, “[t]o stay free, software must be copyrighted and licensed.” What Does Free Mean? Or What Do You Mean by Free Software?, Debian Group, http://www.debian.org/intro/free (last updated Mar. 19, 2013). See also Margit Osterloh & Sandra Rota, Open Source Software Development – Just Another Case of Collective Invention?, 36 Res. Pol’y 157,164 (2007); Steven Weber, The Success of Open Source 197 (2004) (describing business models that depend on licensing structures). [5] Weber, supra note 4at 179 (describing a license as a “de facto constitution” for an open source organization, which, “[i]n the absence of hierarchical authority, . . . becomes the core statement of the social structure that defines the community of . . . a project”). [6] The “BusyBox” litigation cases provide an example of the enforcement of open source licenses. BusyBox is software that is commonly used in consumer electronic devices. BusyBox is licensed under the GPLv2 open source license. From 2007 through 2009, the Software Freedom Law Center, representing several of the BusyBox copyright holders, filed suit against a number of entities that distributed BusyBox software, asserting that those distributors had breached the license. See Best Buy, Samsung, Westinghouse and Eleven Other Brands Named in SFLC Lawsuit, Software Freedom Law Center (Dec. 14, 2009), http://www.softwarefreedom.org/news/2009/dec/14/busybox-gpl-lawsuit. Many of these suits ended in a settlement in which the defendant agreed to comply with the terms of the license, and information regarding a number of these settlements is available at the Software Freedom Law Center Website. See, e.g., BusyBox Developers and Xterasys Corporation Agree to Settle GPL Lawsuit, Software Freedom Law Center (Dec. 17, 2007), http://www.softwarefreedom.org/news/2007/dec/17/busybox-xterasys-settlement/. [7] Richard Stallman, the founder of the Free Software Foundation and a central figure in the open source software movement, has opined on the difficulty of creating an open hardware legal framework. See Richard Stallman, On “Free Hardware”, Linux Today (June 22, 1999, 4:27 AM), http://www.linuxtoday.com/infrastructure/1999062200505NWLF. See also Andrew Katz, Towards a Functional License for Open Hardware, 4 Int’l Free and Open Source Software L. Rev. 41, 45 (2012); Michael Weinberg, Open Source Hardware and the Law, Public Knowledge (Oct. 10, 2012), http://publicknowledge.org/blog/open-source-hardware-and-law. [8] This Article uses the term “three-dimensional printing” to refer to a range of a computer-aided manufacturing technologies, where a digital design is used to automate the manufacture of an article in an “additive manufacturing” process. Alternative terms may also be used for some of these methods such as, for example, rapid prototyping, desktop manufacturing and CAD oriented manufacturing. See generally C.K. Chua et al., Rapid Prototyping: Principles and Applications 18 (2nd ed. 2004). Additive manufacturing means that physical objects are constructed from the accumulation of a number of layers, rather than resulting from the removal of portions of raw material. See Anderson, supra note 3, at 90. [9] Christina Raasch, Product Development in Open Design Communities: A Process Perspective, 8 Int’l J. Innovation & Tech. Mgmt. 557, 568 (2011) (discussing the difficulty of sourcing parts in open hardware projects). See also Katz, supra note 7, at 51. [10] Raasch, supra note 9, at 567 (noting that open hardware projects may protect certain intellectual property in order to “attract manufacturers willing to produce the design as well as component suppliers”); Thompson, supra note 3 (stating that “nobody is going to risk money inventing and selling hardware unless they can prevent competitors from immediately ripping off their designs”). The recent decision of Makerbot Industries to refrain from distributing some of its hardware designs provides a real world example of these concerns. Makerbot is a prominent producer of three-dimensional printers and, until recently, pursued an open hardware strategy by making all of its device designs publicly available. In September 2012, Makerbot decided to not make available certain designs of its newest printer model. See Rich Brown, Pulling Back from Open Source Hardware, Makerbot Angers Some Adherents, CNET (Sept. 27, 2012, 5:00 AM), http://news.cnet.com/8301-17938_105-57520633-1/pulling-back-from-open-source-hardware-makerbot-angers-some-adherents/. In justifying this decision, Makerbot noted that its open hardware business model resulted in competition from “carbon-copy cloning” of its products and stated that this undermined the company’s “ability to pay people to do development.” Bre Pettis, Let’s Try That Again, Makerbot Blog (Sept. 24, 2012), http://www.makerbot.com/blog/2012/09/24/lets-try-that-again/. [11] Eric von Hippel, Horizontal Innovation Networks – By and For Users, 16 Indus. & Corp. Change 293, 311 (2007) (noting that the economies of scale involved in manufacturing may not allow open source networks to compete with commercial manufacturing); Eric von Hippel & Georg von Krogh, Open Source Software and the “Private-Collective” Innovation Model: Issues for Organization Science, 14 Organization Science 209, 215 (2003). See also Ackermann, supra note 3, at 210-11 (noting such economies of scale as a justification for including restrictions against the commercial use of designs in an open hardware license). [12] See Raasch, supra note 9,at 569 (discussing the relative infrequency of releases in the RepRap on Openmoko open hardware projects). See also Jim Turley, Open-Source Hardware, Embedded (May 31, 2002), http://www.embedded.com/electronics-blogs/significant-bits/4023974/Open-Source-Hardware. [13] The text of version 3.0 of the GPL is available at the Free Software Foundation website. See GNU General Public License, Gnu Operating System, http://www.gnu.org/copyleft/gpl.html (last updated Oct. 6, 2012) [hereinafter, GPLv3]. Unless stated otherwise, references in this Article to the GPL are references to version 3.0 of that license. See Glyn Moody, Rebel Code 312-13 (2001) (stating that the GPL serves as the “de facto constitution for the entire free software movement”). For a summary of United States case law interpreting the GPL, see Eli Greenbaum, Open Source Semiconductor Core Licensing, 25 Harv. J.L. & Tech. 131, 140 (2011). [14] Section 5(c) of the GPL provides that a licensee “may convey a work based on” the licensed software, provided that the entire work must also be licensed under the terms of the GPL. GPLv3, supra note 13, § 5(c). [15] For a brief overview of the GPL copyleft conditions, see What is Copyleft?, Gnu Operating System, http://www.gnu.org/copyleft/ (last updated Oct. 6, 2012). [16] See Lawrence Rosen, Open Source Licensing: Software Freedom and Intellectual Property Law 80 (2005) (describing license conditions of the BSD open source software license). See also Jacobsen v. Katzer, 535 F.3d 1373, 1381-83 (Fed. Cir. 2008) (holding that the limitations found in the Artistic License were “enforceable copyright conditions”). [17] Von Hippel, supra note 11, at 313. [18] For background on the TAPR Open Hardware License, see Ackermann, supra note 3. A copy of the TAPR Open Hardware License is available online. See TAPR Open Hardware License, TAPR (May 25, 2007), http://www.tapr.org/ohl.html [hereinafter TAPR license]. For background on the CERN Open Hardware License, see Myriam Ayass & Javier Serrano, The CERN Open Hardware License, 4 Int’l Free and Open Source Software Law Review 71, 71-73 (2012). A copy of the CERN Open Hardware License is available online. See CERN Open Hardware License, Open Hardware Repository, http://www.ohwr.org/documents/88 (last visited Apr. 4, 2013) [hereinafter CERN license]. A third prominent open hardware license is the Solderpad License, a copy of which is available in Katz, supra note 7, at 56. The Solderpad license does not attempt to impose copyleft obligations on the use of hardware. Rather, the Solderpad license limits itself to granting permissions to use, modify and distribute a design file. Id. Given the limited ambition of the Solderpad license, it is not addressed in this Article. Hardware designs are sometimes licensed under documentation licenses rather than licenses specifically designed for hardware. For example, the Open Compute Project is a project founded by Facebook engineers that shares designs for scalable data center hardware under Creative Commons licenses. See Licensing, Open Compute Project, http://www.opencompute.org/licensing/ (last visited Mar. 30, 2013). As with the Solderpad license, documentation licenses only provide permissions to use, modify and distribute a design file, but do not impose conditions regarding hardware manufactured with that design file. For information regarding the Creative Commons licenses, see About the Licenses, Creative Commons, http://creativecommons.org/licenses/ (last visited Mar. 30, 2013). [19] Ackermann, supra note 3, at 204. [20] Id. at 205. See also About the OHL, TAPR, http://www.tapr.org/ohl.html (last visited Apr. 2, 2013) (“Like the GNU General Public License, the [TAPR license] is designed to guarantee your freedom to share and to create.”). [21] Ayass & Serrano, supra note 18, at 71. [22] Id. at 72. [23] See Ackermann, supra note 3, at 192 (stating that one of the goals of open source hardware should be that the documentation received under an open source hardware license should be “available to all”). Section 1 of the definition of open hardware put forward by the Open Source Hardware Association similarly provides that “hardware must be released with documentation including design files, and must allow modification and distribution of the design files. Where documentation is not furnished with the physical product, there must be a well-publicized means of obtaining this documentation.” Definition, Open Source Hardware Association, http://www.oshwa.org/definition/ (last visited Apr. 2, 2013). The OSHWA Definition is based on the Open Source Definition of the Open Source Initiative, a statement of principles for open source software, and bears substantial similarities to that definition. Id. The Open Source Hardware Foundation was founded in 2012 as an organization to promote open source hardware. Its board includes founders of several open hardware companies as well as prominent open hardware activists. See Board Members, OSHWA, http://www.oshwa.org/about/board-members/ (last visited Apr. 14, 2013). [24] The TAPR Open Source Hardware License generally requires licensees to distribute a copy of the design documentation together with the manufactured article. See TAPR license, supra note 18, § 5.2. However, the provision only applies to licensees that “make or have made” a product, and does not apply to downstream recipients of the articles. See id. Similarly, the CERN license provides that a licensee may distribute products developed with the licensed design documentation, provided that a copy of the design documentation is provided to each recipient of the hardware. See CERN license, supra note 18, § 4.1. This provision only applies to a “Licensee,” which is defined by the license as a person “exercising rights” under the license. Id. at § 1. In the absence of a patent, a downstream recipient does not require a grant of intellectual property rights to distribute products and, as such, does not exercise any rights under the license. [25] See OSHWA Definition, supra note 23, § 6 ( “The [open hardware] license may require . . . attribution to the licensors when distributing design files, manufactured products, and/or derivatives thereof. The license may require that this information be accessible to the end-user using the device normally, but shall not specify a specific format of display”). [26] See Catherine L. Fisk, Credit Where It’s Due: The Law and Norms of Attribution, 95 Geo. L.J. 49, 89-93 (2006) (providing an extensive discussion of the incentives created by attribution in the context of open source software development). See also Klaus M. Schmidt and Monika Schnitzer, Public Subsidies for Open Source? Some Economic Policy Issues of the Software Market, 16 Harv. J.L. & Tech. 473, 482 (2003). Even the most permissive open source software licenses contain attribution requirements that are passed on to downstream recipients of the software. For example, while the permissive BSD license does not include any copyleft obligations, it does require that distributions of the licensed software include a copy of the copyright notice and a copy of the license. See The BSD 2-Clause License, Open Source Initiative, http://opensource.org/ licenses/BSD-2-Clause (last visited Apr. 15, 2013). Similarly, all six Creative Commons licenses include an attribution requirement. See Attribution, Creative Commons, http://wiki.creativecommons.org/Attribution (last updated Jan. 26, 2010). [27] Section 5.1 of the TAPR license provides that manufactured products must retain licensor’s notices, but this requirement does not apply to downstream recipients. See TAPR license, supra note 18, § 5.1. Section 3.1 of the CERN license provides that a licensee must retain all copyright, trademark and other notices. See CERN license, supra note 18, § 3.1. Again, this provision only applies to a “Licensee”, id., which is defined by the license as a person “exercising rights” under the license. Id. at § 1. A downstream recipient does not exercise any rights under the license. [28] See John Mangan et al., Global Logistics and Supply Chain Management 40 (2d. ed. 2012). See also Ronald J. Gilson et al., Contracting for Innovation: Vertical Disintegration and Interfirm Collaboration, 109 Colum. L. Rev. 431, 436 (2009). [29] Mangan, supra note 28, at 40. [30] Gilson, supra note 28, at 438. One estimate of the automobile manufacturing industry has a handful of OEMs purchasing from six hundred to eight hundred first tier suppliers. See Omri Ben-Shahar & James J. White, Boilerplate and Economic Power in Auto Manufacturing Contracts, 104 Mich. L. Rev. 953, 956 (2006). See also Anath Iyer et al., Toyota Supply Chain Management: A Strategic Approach to Toyota’s Renowned System 90-91 (2009). [31] Tim William, Demand Chain Management Theory: Constraints and Development from Global Aerospace Supply Webs, 20 J. Operations Mgmt. 691, 691 (2002). [32] Gilson, supra note 28, at 439.See Jason Dedrick et al., Who Profits from Innovation in Global Value Chains?: A Study of the iPod and Notebook PCs, 19 Indus. & Corp. Change 81, 81 (2009). [33] See Jason Dedrick et al., The Distribution of Value in the Mobile Supply Chain, 35 Telecomm. Pol’y 505, 507 (2011). [34] Julian Dent, Distribution Channels: Understanding & Managing Channels to Market 11-12 (2d. ed. 2011). [35] In the words of one of the original cases that enforced end user license agreements, “A copyright is a right against the world. Contracts, by contrast, generally affect only their parties; strangers may do as they please, so contracts do not create ‘exclusive rights.’” ProCD, Inc. v. Zeidenberg, 86 F.3d 1447, 1454 (7th Cir. 1996). See also MDY Indus. LLC v. Blizzard Entm’t Inc., 629 F.3d 928, 941 n.3 (9th Cir. 2010). [36] Stallman, supra note 7. [37] See generally Ackermann, supra note 3, at 194. [38] See Quanta Computer, Inc. v. LG Elecs., Inc., 553 U.S. 617, 628-31 (2008) (holding that LGE’s post-sale restrictions could not be enforced under patent law); Static Control Components, Inc. v. Lexmark Int’l, Inc., 615 F. Supp. 2d 575, 584 (E.D. Ky. 2009) (holding that Quanta barred the enforcement of post-sale restrictions on printer cartridges). [39] Notwithstanding these difficulties, the Open Innovation Network (OIN) provides an example of using patents to create an open licensing framework. OIN is a company owned by a number of prominent technology companies which freely licenses a patent portfolio to any company or institution that agrees not to assert its patents against the Linux operating system. See About OIN, Open Innovation Network, http://www.openinventionnetwork.com/index.php (last visited Apr. 15, 2013) (providing information regarding OIN). OIN may be a special case that could be difficult to generalize to new open source hardware projects. The OIN was founded by companies in order to protect their prior investments in the Linux operating system from patent infringement suits, rather than to create a new open source project. See id. The OIN patent licenses are not used to increase the enforceability of the Linux software licenses, but simply to protect Linux from patent infringement suits. See id. The copyleft and attribution obligations of the Linux system are imposed by the GPLv2 software license, rather than the OIN patent portfolio licenses. [40] Ackermann, supra note 3, at 205 (explaining how the TAPR license is built around both license and contract concepts); Ayass & Serrano, supra note 18, at 72 (stating that the license to design documentation could “be the basis on which to form a contractual relationship” on which the CERN license is built). See also Static Control Components, 615 F. Supp. 2d at 587 (allowing contract claims to proceed even though patent claims were barred as a result of the patent exhaustion doctrine). [41] See, e.g., Robert P. Merges, A Transactional View of Property Rights, 20 Berkeley Tech. L.J. 1477, 1507 (2005) (discussing the importance of intellectual property rights to a plaintiff where there is no privity of contract). These arguments against relying on contract law in an open hardware license recall similar claims against the enforceability of the GPL. Commentators had argued that the GPL was unenforceable because it was not validly accepted by licensees under the principles of contract law. See Heather Meeker, The Open Source Alternative: Understanding Risks and Leveraging Opportunities 177 (2008). The counterargument of the Free Software Foundation was that the GPL would be enforceable under copyright law, regardless of whether a licensee accepted its terms in accordance with contract law. See GPLv3 Second Discussion Draft Rationale at n.77, Free Software Foundation, Inc. (July 27, 2006), gplv3.fsf.org/gpl3-dd1to2-markup-rationale.pdf (“[The GPL was] intentionally structured . . . as a unilateral grant of copyright permissions, the basic operation of which exists outside of any law of contract. Whether and when a contractual relationship is formed between licensor and licensee under local law do not necessarily matter to the working of the license.”) [hereinafter GPL Second Draft]; Pamela Jones, The GPL is a License, not a Contract, LWN.net (Dec. 3, 2003), http://lwn.net/Articles/61292/. An open hardware license based solely on contract law would not be able to rely on these arguments in favor of the enforceability of the GPL. [42] Katz, supra note 7, at 46. [43] Shahar & White, supra note 30, at 966-70 (discussing how OEMs in the automotive industry erected barriers to negotiations of standard form agreements). [44] It is possible to speculate that downstream recipients may be able to enforce the terms of an open hardware contract as third party beneficiaries. Generally, however, a third party beneficiary may only enforce the terms of a contract if the parties intended to grant the third party such right of enforcement, and neither the TAPR nor CERN licenses evidence such intent. See generally Melvin Aron Eisenberg, Third-Party Beneficiaries, 92 Colum. L. Rev. 1358, 1382 (1992). On a more theoretical level, current open source licenses generally envision enforcement by the copyright holder. See GPL Second Draft, supra note 41, at n.34 (stating that “enforcement of the GPL is always by the copyright holder”). Granting third parties the right to enforce open source obligations would introduce an unfamiliar and perhaps unwelcome dynamic. First, allowing any third party to enforce the license would expose a licensee to claims from a large range of individuals with which the licensee may have no prior or only a minimal relationship. Second, claims regarding open source obligations often depend on technical details regarding the content and use of the licensed material, details that a licensee may not want to publicize to a broad audience. In any event, enforcement by third party beneficiaries would not reach throughout a distribution chain, as the third party’s claims could only be directed at the specific party that should have provided open source material to the beneficiary. Last, third party beneficiaries would likely only advance claims to obtain hardware design or software code, but would be less likely to demand attribution information. [45] According to the Second Restatement of Contracts, “[c]ontract damages are ordinarily based on the injured party’s expectation interest and are intended to give him the benefit of his bargain by awarding him a sum of money that will, to the extent possible, put him in as good a position as he would have been in had the contract been performed.” Restatement (Second) of Contracts, § 347 cmt. a, (1981). See also David McGowan, The Tory Anarchism of F/OSS Licensing, 78 U. Chi. L. Rev. 207, 216 (2011) (discussing how the difference between approaching open source license documents as contracts or license permissions affects the remedies likely to be granted by a court, with expectation damages being the default remedy for breach of contract). [46] 17 U.S.C. § 504(b) (2012) (“The copyright owner is entitled to recover . . . any profits of the infringer that are attributable to the infringement and are not taken into account in computing the actual damages.”). See also MDY Indus. LLC v. Blizzard Entm’t, Inc., 629 F.3d 928, 941 n.3 (9th Cir. 2010) (detailing additional remedies available under copyright law in comparison to a breach of contract claim); Omri Ben-Shahar, Damages for Unlicensed Use, 78 U. Chi. L. Rev. 7, 9 (2011) (discussing remedies available for copyright infringement but not in breach of contract). Plaintiffs in a copyright infringement action may also be entitled to statutory damages pursuant to 17 U.S.C. § 504(c). See Software Freedom Conservancy, Inc. v. Best Buy Co., No. 09 Civ. 10155, 2010 U.S. Dist. LEXIS 75208, at *11(S.D.N.Y July 27, 2010) (granting enhanced statutory damages for copying software in violation of the GPL). Statutory damages are generally limited, however, to a maximum of $150,000 per infringed work and, as such, may not prove a sufficient deterrent. See 17 U.S.C § 504(c)(2) (2012). [47] 17 U.S.C. § 502 (2012). Prior to the decision of the Supreme Court in eBay v. MercExchange, most courts were relatively liberal in granting injunctions to enjoin copyright infringement. See eBay v. MercExchange, 547 U.S. 388 (2006). See also H. Tomas Gomez-Arostegui, What History Teaches Us About Copyright Injunctions and the Inadequate-Remedy-At-Law Requirement, 81. S. Cal. L. Rev. 1197, 1205-06 (2008). In eBay, the Supreme Court held that courts must apply traditional principles of equity in determining whether to issue a permanent injunction against patent infringement, and that the Federal Circuit could not apply a general rule that “a permanent injunction will issue once infringement and validity have been adjudged”. 547 U.S. at 393-94 (internal quotation marks omitted). The practical effect of eBay in the context of copyright litigation is not yet completely clear. Nevertheless, commentators have noted that it remains relatively common to obtain an injunction against copyright infringement. See Jake Phillips, eBay’s Effect on Copyright Injunctions: When Property Rules Give Way to Liability Rules, 24 Berkeley Tech. L.J. 405, 420 (2009); Robert W. Gomulkiewicz, Conditions and Covenants in License Contracts: Tales From a Test of the Artistic License, 17 Tex. Intell. Prop. L.J. 335, 341 (2009) (stating that “injunctive relief is common for copyright infringement but granted rarely for breach of contract”). [48] Jacobsen v. Katzer, 535 F.3d 1373, 1382 (Fed. Cir. 2008). Even so, upon remand from the Federal Circuit, the district court in Jacobsen stated that “there is also evidence in the record attributing a monetary value” for the infringed work. Jacobsen v. Katzer, No. C 06-01905, 2009 U.S. Dist. LEXIS 115204, at *11 (N.D. Cal. Dec. 10, 2009). The district court did not give further details or analysis regarding such evidence. [49] 17 U.S.C. § 503 (2012) (setting forth impounding and disposition of infringing articles as potential remedies for infringement). See also Software Freedom Conservancy, Inc. v. Best Buy Co., No. 09 Civ. 10155, 2010 U.S. Dist. LEXIS 75208, at *15 (S.D.N.Y July 27, 2010) (ordering forfeiture of articles determined to be infringing the GPL). [50] 17 U.S.C. § 505 (2012) (setting forth courts’ ability to assess costs and attorney’s fees). See also Lawrence Rosen, Bad Facts Make Good Law: The Jacobsen Case and Open Source, 1 Int’l Free and Open Source Software L. Rev 27, 29 (2009) (discussing the possibility of obtaining attorney’s fees in open source disputes). [51] See Juergen Neumann et al., OHANDA Label for Open Source Hardware, OHANDA, http://www.ohanda.org/brief (last visited Mar. 29, 2013). [52] Ian Gibson et al., Additive Manufacturing Technologies: Rapid Prototyping to Direct Digital Manufacturing 34 (2009). [53] Id. [54] Chua et al., supra note 8, at 10; Gibson et al., supra note 52, at 4. [55] Michael Wienberg, What Happens When Patent Lawsuits Hit Home 3D Printing, Public Knowledge (Nov. 27, 2012), http://publicknowledge.org/ blog/what-happens-when-patent-lawsuits-hit-home-3d. [56] See Adrian Bowyer, RepRap GPL License: Distributing and Copying RepRap, RepRap (Dec. 14, 2006), http://reprap.org/wiki/ RepRapGPLLicence. [57] Anderson, supra note 3, at 94. [58] Chua et al., supra note 8, at 10. See also Layer by Layer: How 3D Printers Work, The Economist, Apr. 21, 2012, at 16, available at http://www.economist.com/node/21552903 [hereinafter Layer by Layer]. See also Ormco Corp. v. Align Tech., Inc., 609 F. Supp. 2d 1057 (C.D. Cal. 2009) (hearing an action concerned with patent infringement, while also providing a detailed description of a specific proprietary three-dimensional printing process). [59] Chua et al., supra note 8, at 137; Fused Filament Fabrication, RepRap, http://reprap.org/wiki/Fused_filament_fabrication (last visited Apr. 2, 2013) (stating that the RepRap Project uses the terms “fused filament fabrication” rather than “fused deposition modeling,” since the latter term has been trademarked). [60] Chua et al., supra note 8, at 10. See also Solid Print, Making Things with a 3D Printer Changes the Rules of Manufacturing, The Economist, Apr. 21, 2012, at 18, available at http://www.economist.com/node/21552892. [61] Chua et al., supra note 8, at 220. [62] See Layer by Layer, supra note 58. Shapeways, a company that provides three-dimensional printing services over the Internet, provides a variety of materials including plastics, metals and glass. See Materials Comparison Sheet, Shapeways, http://www.shapeways.com/materials/ material-options (last visited Apr. 2, 2013). [63] Gibson, supra note 52, at 290 (describing the capability of using three-dimensional printing to fabricate complex shapes). See also Gibson at 292-93 (describing the capability of using three-dimensional printing to create internal moving parts); The Shape of Things to Come, The Economist, Dec. 10, 2011, at 88, available at http://www.economist.com/node/21541382 (describing the use of three-dimensional printing to create articles with novel geometries). [64] Gibson, supra note 52, at 295 (describing the use of additive manufacturing technology to combine materials). [65] Id. at 291 (describing the use of additive manufacturing technology to create materials with unique internal structures); Id. at 295 (creating “heterogeneous materials with unique properties”); The Shape of Things to Come, supra note 63(describing the use of three-dimensional printing technology to create the “fine, lattice-like internal structure of bone” and “the basic design of a plant stem – a bundle of vertical filaments of different technology.”) [66] Layer by Layer, supra note 58(discussing biological tissues); Print me a Phone, The Economist, Jul. 28, 2012, at 71, available at http://www.economist.com/node/21559593 (discussing electronic circuits). [67] Materials Comparison Sheet, Shapeways, http://www.shapeways.com/materials/material-options (last visited Apr. 2, 2013). [68] Florian Aigner, 3D-Printer with Nano-Precision, Vienna Univ. of Tech. (Mar. 12, 2012), http://www.tuwien.ac.at/en/news/news_detail/article/ 7444/ (reporting that researchers at the Vienna University of Technology have used advanced printing technologies to construct a 285 micrometer racecar and approximately 100 micrometer models of St. Stephen’s Cathedral and London Bridge). [69] Thingiverse, http://www.thingiverse.com (last visited Mar. 28, 2013). [70] Examples of such business include Shapeways and Sculpteo. See Shapeways, http://www.shapeways.com (last visited Apr. 2, 2013); Sculpteo, http://www.sculpteo.com (last visited Apr. 2, 2013). [71] The standard CAD file is represented in the IGES (Initial Graphics Exchange Specifications) format. For technical reasons, however. that format is not well-suited for three-dimensional printing. See Chua et al., supra note 8, at 337. [72] Id. at 301. [73] Id. at 28. Since the development of STL, other possible file formats for representing physical objects have been put forward as attempts to correct deficiencies in the STL format. Id. at 338. [74] Id. at 338. [75] See STL 2.0 May Replace Old, Limited File Format, RapidToday.com, http://www.rapidtoday.com/stl-file-format.html (last visited Mar. 28, 2013). [76] Bre Pettis et al., Getting Started with MakerBot 65 (2012) (describing the limited possibilities available for modifying STL files). [77] See Ormco Corp. v. Align Techs., Inc., 609 F. Supp. 2d 1057, 1071 (C.D. Cal. 2009) (describing a three-dimensional printing design file as “data file” rather than software in the context of an action for patent infringement). [78] See H.R. Rep. No. 94-1476, at 54 (1976), reprinted in 1976 U.S.C.C.A.N. 5659, 5667 (stating that the provision is “an effort to make clearer the distinction between works of applied art protectable under the bill and industrial designs not subject to copyright protection.”) See also Robert C. Denicola, Applied Art and Industrial Design: A Suggested Approach to Copyright in Useful Articles, 67 Minn. L. Rev. 707, 722 (1983) (discussing the rationales for excluding industrial design from copyright protection). [79] See Pivot Point Int’l v. Charlene Prods., 372 F.3d. 913, 921 (7th Cir. 2004). [80] Id. [81] 17 U.S.C. § 101 (2012) (defining pictorial, graphic and sculptural works). See also Victor Stanley, Inc. v. Creative Pipe, Inc., No. MJG-06-2662, 2011 U.S. Dist. Lexis112846, at *7 (D. Md. Sept. 30, 2011) (holding that defendants infringed plaintiff’s copyright in manufacturing CAD files). But see Meshwerks, Inc. v. Toyota Motor Sales U.S.A., Inc., 528 F.3d 1258, 1268 (10th Cir. 2008) (denying copyright protection for 3D models of Toyota cars, since the models were “unadorned images of Toyota’s vehicles, the appearances of which do not owe their origins to Meshwerks.”). The rationale of the decision in Meshwerks seems to show that original 3D design files will generally be accorded copyright protection. The decision was based on the fact that Meshwerks did not add any creative content to the design of the pre-existing Toyota vehicles. Id. As such, the decision implies that 3D design files with original creative content will be accorded copyright protection. [82] 17 U.S.C. § 101 provides that “copies” may be perceived “either directly or with the aid of a machine or device.” 17 U.S.C. § 101 (2012). Cf. Apple Computer, Inc. v. Franklin Computer Corp., 714 F.2d 1240, 1249 (3d Cir. 1983) (affirming that the code of a computer program, embedded in a memory chip, is an appropriate subject for copyright). [83] See Victor Stanley, 2011 U.S. Dist. Lexis 112846, at *9-10 (holding that defendant could not be held liable for copyright infringement for using copied technical drawings to manufacture articles, but could be held liable for the unauthorized download, transmission, creation of derivative works and copying of the copyrighted drawings themselves); Forest River v. Heartland Rec. Vehicles, 753 F. Supp. 2d 753, 760 (N.D. Ind. 2010) (dismissing claims that the use of copyrighted design drawings to manufacture a trailer constitutes copyrighted infringement, but stating that allegations concerning the copying of the design drawing themselves “state a claim for copyright infringement as to the copies (as distinct from the actual trailer)”); Gusler v. Fischer, 580 F. Supp. 2d 309, 315 (S.D.N.Y. 2008) (stating that the plaintiff “holds a copyright in a technical drawing of a useful article, which does not preclude defendants’ manufacturing and marketing of the article itself”). Compare Niemi v. Am. Axle Mfg. & Holding Inc., No. 05-74210, 2006 U.S. Dist. LEXIS 50153, at *10 (E.D. Mich. July 24, 2006) (holding that the manufacture of a machine from a copyrighted technical drawing is not copyright infringement) with Niemi v. Am. Axle Mfg. & Holding Inc., No. 05-74210, 2008 U.S. Dist. Lexis 25995 (E.D. Mich. April 23, 2008) (analyzing claims regarding the copying of the technical drawings themselves, with such claims dismissed for lack of evidence of copying). [84] 17 U.S.C. § 106(1) (2012) (granting an exclusive right of reproduction to the copyright holder). [85] See Mai Sys. v. Peak Computer, 991 F.2d 511 (9th Cir. 1993) (holding that loading a copy of software onto a computer’s memory constitutes copyright infringement); Cartoon Network v. CSC Holdings 536 F.3d 121, 127 (2d Cir. 2008) (affirming the holding in Mai Systems, but interpreting MAI Systems to hold that the copy in the computer’s memory must be more than transitory). A digital design will be resident in the memory of a three-dimensional printer for more than transitory duration, since a printer will generally hold the file (or its derivatives) in memory for the period of time necessary to print the object, which can be several hours. Chua et al., supra note 8, at 31. The holding of Mai Systems applies to any copyrighted work (and not only software) that is loaded into a computer. See Nimmer on Copyright, § 8.08[A][1] (stating that “input of a work into a computer results in the making of a copy, and hence . . . such unauthorized input infringes the copyright owner’s reproduction right”). See also Jedson Eng’g Inc. v. Spirit Constr. Servs., 720 F. Supp. 2d 904, 919 (S.D. Oh. 2010) (copyright infringement resulting from unauthorized access of CAD files and technical drawings through Internet and CD-ROM); Gemel Precision Tool Co. v. Pharma Tool Corp., Civ.-A. No. 94-5305, 1995 U.S. Dist. LEXIS 2093, at *17 (E.D. Pa. Feb. 13, 1995) (holding that the defendant’s creation of CNC machine files infringed plaintiff’s copyright). Cf. Ormco Corp. v. Align Tech., Inc., 609 F. Supp 2d 1057, 1072 n.17 (C.D. Cal. 2009) (in a patent infringement claim, relying on copyright law to show that loading three-dimensional printing data files creates a copy of those files). But see Simon Bradshaw et al., The Intellectual Property Implications of Low-Cost 3D Printing, 7 Scripted 1, 25 (2010), available at http://www.law.ed.ac.uk/ahrc/script-ed/vol7-1/bradshaw.pdf. Bradshaw states that, under the law of the United Kingdom, the copyright in a design document is not infringed by using the design to create an article in a three-dimensional printing process. Id. In reaching this conclusion, Bradshaw does not address or analyze the copying inherent to a computerized manufacturing process. [86] 17 U.S.C. § 106(2) (2012) (setting forth copyright holder’s exclusive right to prepare derivative works). [87] See Victor Stanley, 2011 U.S. Dist. Lexis 112846, at *10 (D. Md. 2011) (finding copyright infringement when defendants created derivative works of CAD manufacturing files). The printer may also manipulate the file in other ways as well, to ensure that “it is the correct size, position and orientation for building.” See Gibson, supra note 52, at 5. In other situations, the printer may be required to segment a single STL file or merge several STL files. See id.at 45. [88] In actual fact, there may not be an exact one-to-one correspondence between the design file and the final printed article. First, a printed article may require some amount of post-processing, such as finishing, polishing, sand-papering or coating. Gibson, supra note 52, at 46. Second, certain printing technologies may require the printing of additional “supports” during the printing process to buttress manufactured articles. Id. at 53. [89] TDPL, § 2. [90] See supra text accompanying notes 83-87. [91] TDPL, § 3.2. [92] TDPL, § 3.3(a). [93] TDPL, §§ 3.1, 3.3(b). [94] See Gibson, supra note 52, at 56 (discussing software that can imprint identification information on printed articles). [95] TDPL, § 1.8 (stating that a Required Notice may provide “direction to a URL which displays” such attribution and licensing information). In situations where the inclusion of extensive attribution and licensing language would prove awkward or require the use of extensive area on a confined physical object, such notices could be composed of other digital means of providing such information. For example, two-dimensional bar codes could be used to provide an efficient means of directing users to the appropriate Internet site. A similar approach has recently been adopted by Thingiverse. See Help with Barcodes, Thingiverse, http://www.thingiverse.com/help/barcodes (last visited Apr. 2, 2013). Similarly, the Linux Foundation has proposed a similar means for tracking open source software components included in software products. See The Linux Foundation Announces New Tool for Tracking Free and Open Source Software Components, The Linux Foundation (May 30, 2012), http://www.linuxfoundation.org/news-media/announcements/2012/05/linux-foundation-announces-new-tool-tracking-free-and-open-source-s. [96] TDPL, § 3.4. An important feature of the TDPL is that it conditions the right to modify the design file on the concomitant insertion of this notice. In order to be enforceable under copyright law, the provisions of the TDPL must constitute conditions to a copyright license rather than additional contractual covenants. See Omri Ben-Shahar, Damages for Unlicensed Use, 78 U. Chi. L. Rev. 7, 11-12 (discussing the differences between license conditions and covenants). In order to constitute a condition to the license, the provision at question must relate to an action that (a) exceeds the license’s scope (b) in a manner that implicates one of the licensor’s exclusive statutory rights. See MDY Indus. LLC v. Blizzard Entm’t Inc., 629 F.3d 928, 940 (9th Cir. 2010). Provisions that condition a software user’s right to create derivative works or modifications are, under this test, considered license conditions rather than contractual covenants. Id. at n.3. As such, the requirement of the TDPL that modifications must be accompanied by an insertion of the modification notice should constitute a condition to the copyright license rather than an additional contractual covenant. The GPL operates in the same way: the copyleft provisions of the GPL are formulated as conditions to the GPL’s grant of distribution rights. In other words, a licensee is not permitted to distribute works under the GPL unless it also provides source code as required by the license. See Heather Meeker, The Gift that Keeps on Giving – Distribution and Copyleft in Open Source Software Licenses, 4 Int’l Free and Open Source Software L. Rev. 29, 29 (2012). The conditions of the TDPL are structured to apply to the modification of the design file rather than the distribution of a physical object since, in contrast to the GPL’s software setting, the distribution of physical articles may not implicate any rights under copyright law. See supra text accompanying notes 78-80. [97] TDPL, § 1.6 [98] Several industries with complex supply chains, such as the automotive and aerospace industries, have already begun to make use of three-dimensional printing. See Neil Hopkinson et al., Rapid Manufacturing: An Industrial Revolution for the Digital Age 13 (2006). See also supra note 30, noting the complex supply chains in these industries. [99] TDPL, § 4 does contain a contractual commitment not to remove any notices from any physical objects printed with the design file and an obligation to pass this commitment onto downstream recipients of the object. Unfortunately, it is unclear whether this prohibition could be achieved without resort to such a contractual commitment. The Digital Millennium Copyright Act does contain a prohibition to “remove or alter any copyright management information.” 17 U.S.C. § 1202(b) (2012). It is unclear whether this prohibition applies to notices printed on a physical object, since the statutory provision only concerns notices “conveyed in connection with copies . . . of a work or performances or displays of a work.” 17 U.S.C. § 1202(c) (2012); see Textile Secrets Int’l, Inc. v. Ya-Ya Brand, Inc., 524 F. Supp. 2d 1184, 1201-03 (C.D. Cal. 2007) (holding that the prohibition does not apply to the removal of a tag attached to fabric). At the same time, however, the Textile Secrets holding was limited to a situation where there was an “absence of any facts demonstrating that a technological process was utilized in connection with . . . applying the copyright information . . . .” Id. at 1201, n.17. [100] Katz, supra note 7, at 49-51. Katz attempts to resolve this problem by providing that an effective open hardware license could require the provision of complete design documentation, where that documentation could consist of components that are readily available with known specifications. This of course requires some judgment concerning which components should be considered “readily available.” In addition, what constitutes “readily available” could change over time. [101] Id. [102] TDPL, § 1.4 [103] TDPL, § 3.3. [104] As noted above, a limited copyright may be applicable to certain physical articles. See supra text accompanying notes 83-87. As such, it may also be possible to use such copyright to enforce the license conditions of the TDPL, and the text of the TDPL recognizes this possibility. See infra note 127. Even so, as the existence and scope of such copyrights can be contentious, the TDPL relies on the copyright in the design document instead. [105] See supra text accompanying notes 63-65(detailing the comparative advantage of three-dimensional printing in producing certain articles and materials). [106] Peter Marsh, The New Industrial Revolution 26-28 (2012) (describing the widespread use of computer aided design in modern manufacturing); Eric Von Hippel, Democratizing Innovation 104 (2005); Victoria Gomelsky, Computerized Machines Aid Human Watchmakers, NY Times (Sept. 4, 2012), http://www.nytimes.com/2012/09/05/fashion/05iht-acaw-hitech05.html?pagewanted=all&_r=0 (describing the “ubiquity of computer-aided design” in the Swiss watch making industry); Anderson, supra note 3, at 76 (stating that “[s]oftware is increasingly driving the design process”). [107] Indeed, in designing the Android platform, Google reverse engineered and reconstructed an equivalent to almost all of the Java programming language. Generally, Java was licensed by Oracle under either the GPL or pursuant to commercial terms. Google carried out this complex and costly process in order to circumvent these licensing terms. See Oracle Am., Inc. v. Google Inc., 872 F. Supp. 974, 978 (N.D. Cal 2012) (stating that “Google wrote or acquired its own source code to implement virtually all the functions of the 37 API packages in question. Significantly, all agree that these implementations — which account for 97 percent of the lines of code in the 37 API packages —are different from the Java implementations.”). The roots of the open source movement itself also grew out of such a feat of reverse engineering, when staff at UC Berkeley rewrote much of the Unix source code that was proprietary to AT&T. See Weber, supra note 4, at 40. The Linux operating system also grew out of a similar attempt to bypass the licensing restrictions imposed on the source code of Unix. See Moody, supra note 13, at 33-43. [108] 17 U.S.C. § 102 provides that “[i]n no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work.” 17 U.S.C. § 102(b) (2012). [109] For a summary of the application of the merger doctrine in the context of software programs, see Lexmark Int’l, Inc. v. Static Control Components, Inc., 387 F.3d 522, 535 (6th Cir. 2004). [110] See Computer Assocs. Int’l, Inc. v. Altai, Inc., 928 F.2d 693, 704 (2nd Cir. 1992) (noting that “[t]he essentially utilitarian nature of a computer program further complicates the task of distilling its idea from its expression”). [111] See, e.g., Pamela Samuelson et al., A Manifesto Concerning the Legal Protection of Computer Programs, 94 Colum. L. Rev. 2308, 2317 (1994) (“Behavior is not a secondary by-product of a program, but rather an essential part of what programs are. To put the point starkly: No one would want to buy a program that did not behave, i.e., that did nothing, no matter how elegant the source code ‘prose’ expressing that nothing.”). [112] See, e.g., Lexmark Int’l Inc. v. Static Control Components, Inc., 387 F.3d 522, 537-42 (6th Cir. 2004) (holding that Lexmark’s “Toner Loading Program” was not copyrightable since the expression of the program was constrained by compatibility requirements). [113] For a discussion of software license agreements in general, see Raymond T. Nimmer, Copyright First Sale and the Over-riding Role of Contract, 51 Santa Clara L. Rev. 1311, 1322 (2011). Nimmer notes that “[i]n the digital era, all of the traditional content industries have moved to a mixed model of distribution and many new industries only use digital distributions subject to license agreements.” Id. With respect to open source licenses, the Software Freedom Law Center, for example, has been successful in enforcing the GPL with respect to “BusyBox” software. See supra note 6. See also Software Freedom Conservancy, Inc. v. Best Buy Co., No. 09 Civ. 10155, 2010 U.S. Dist. LEXIS 75208, at *15 (S.D.N.Y July 27, 2010) (ordering forfeiture of articles determined to be infringing the GPL). [114] Section 6(b) of version 3 of the GPL provides that a licensee that may satisfy its obligations to provide source code by providing written notice regarding “access to copy the Corresponding Source from a network server at no charge.” GPLv3, supra note 13, § 6(b). In addition, Section 6(d) allows licensees to provide source code through a “network server” if object code was provided in the same manner. See id. at § 6(d). [115] See GPL Second Draft, supra note 41, at n. 51. See also OSHWA Definition, supra note 23, at § 1 (stating that download from the Internet is the preferred method for making source documentation available); The Open Source Definition, The Open Source Initiative, http://www.opensource.org/osd (providing that download from the Internet is the preferred method of making source code available). Section 5.2(ii) of the TAPR license also provides that hardware documentation can be distributed by providing a URL where documentation may be downloaded. On the other hand, the Software Freedom Law Center (SFLC) has opined that, for much of the world, downloading source code from the Internet is either not possible or not practical. See Bradley M. Kuhn et al., A Practical Guide to GPL Compliance, Software Freedom Law Center (Aug. 26, 2008), http://www.softwarefreedom.org/resources/2008/compliance-guide.html. The opinion of the SFLC dates from 2008, and as Internet technology advances and become more accessible this well-grounded objection to Internet distribution should become less relevant. While the cost to licensors of establishing and maintaining an Internet website from which users could obtain source material is not negligible, this cost could be substantially lowered through the use of community websites such as Thingiverse, in the same way that software source code is made available on community Internet sites such as Sourceforge. See Sourceforge, http://sourceforge.net (last visited Apr.2, 2013). [116] For example, Katz questions whether bolting a copyleft wheel to a car would require the distribution of design documentation for the entire car. See Katz, supra note 7, at 48. [117] See generally Eli Greenbaum, Open Source Semiconductor Core Licensing, 25 Harv. J.L. & Tech. 131 (2011). [118] See Malcolm Bain, Software Interactions and the GNU General Public License, 2 Int’l Free and Open Source Software L. Rev. 165, 165 (2010) (noting that “[t]he so-called ‘GPL linking’ debate has been raging for the last 18 years, and probably will go on for . . . quite a few more”). [119] TDPL, § 1.3. [120] See 3D printers could create customized drugs on demand, BBC News (Apr. 18, 2012), http://www.bbc.co.uk/news/technology-17760085. Commentators have noted the difficulty of applying open source development principles to biotechnology. See, e.g., David W. Opderbeck, The Penguin’s Genome, or Coase and Open Source Biotechnology, 18 Harv. J.L. & Tech. 167, 198-99 (2004). The TDPL, however, allows the easy application of open source principles to any biotechnology process that uses three-dimensional printing technology. [121] TDPL, § 3.7. [122] Michael Weinberg, It Will be Awesome if They Don’t Screw it Up: 3D Printing, Intellectual Property, and the Fight Over the Next Great Disruptive Technology (2010), Public Knowledge, http://www.publicknowledge.org/files/docs/3DPrintingPaperPublicKnowledge.pdf. [123] Fred Chasen et al., Your Printer is Like iTunes: DRM and the 3D Printing “Revolution,” Information Law and Policy Blog (Oct. 21, 2012), http://blogs.ischool.berkeley.edu/i205f12/2012/10/21/your-printer-is-like-itunes-drm-the-3d-printing-revolution/. Intellectual Ventures, a well-known non-practicing entity, has been issued a patent for the application of DRM technology to three-dimensional printing. See U.S. Patent No. 8,286,236 (issued Oct. 9, 2012). [124] Section 1201 of the Copyright Act prohibits both acts of circumvention as well as trafficking in the tools and technologies of circumvention. 17 U.S.C. § 1201(a)(1)(A) (2012) (providing that “[n]o person shall circumvent a technological means that effectively controls access to a work protected under this title”); 17 U.S.C. § 1201(b)(1)(A) (2012) (providing that “[n]o person shall manufacture, import, offer to the public, provide, or otherwise traffic in any technology . . . primarily designed or produced for the purpose of circumventing protection afforded by a technological measure that effectively protects a right of a copyright owner under this title in a work or a portion thereof”). For a summary of concerns regarding the use of digital rights management, see DRM, Electronic Frontier Foundation, https://www.eff.org/issues/drm. [125] The DMCA safe harbor provisions protect online service providers (“ISPs”) from copyright infringement claims in respect of user activity, so long as the service provider complies with specific conditions. 17 U.S.C. § 512(a)(1-5) (2012). To avoid liability, the ISP must promptly remove or block access to alleged infringing material when they receive notification of an infringement claim from a copyright holder. 17 U.S.C. § 512(c)(1)(C) (2012). Thingiverse has received at least one DMCA takedown notice in respect of a digital design. Bre Prettis, Copyright Policy, Thingiverse Blog (Feb. 18, 2011), http://blog.thingiverse.com/2011/02/18/copyright-and-intellectual-property-policy/. [126] These annotations to the text of the TDPL describe certain drafting decisions made in creating the license. Capitalized terms used in annotations notes have the same meaning given to those terms in the body of the TDPL itself. [127] Certain circumstances might allow for a copyright in a Printed Articles itself. Such copyrights in Physical Articles often raise disputes as to their scope and enforceability. See supra text accompanying notes 78-80. As such, the TDPL does not rely on such copyrights to enforce the conditions of the license. Nevertheless, nothing in the TDPL prevents a licensor from claiming that the unauthorized copying of the Printing Article constitutes copyright infringement of the copyright in the Printed Article itself. [128] The TDPL recognizes that there may be legitimate situations that require a change in the location or size of a notice on a Printed Article, including for aesthetic purposes. At the same time, the TDPL also recognizes the interest of the Licensor in ensuring that such notices remain accessible. As such, the TDPL allows licensees to change the location or size of any notice, so long as it remains reasonably accessible. The reference to “electronic devices” is intended to capture the possibility that a Required Notice will only consist of a bar code that directs a recipient to an internet location. See supra note 95. [129] This requirement to maintain the URL providing the Source Form of the Work for at least three years is based on the three year time frame used in both Section 6(b) of GPLv3 and Section 5.2(ii) of the TAPR Open Hardware License. See GPLv3, supra note 13, at § 6(b). [130] The TDPL contains an express patent license. In this manner, the TDPL follows the precedent of several open source software licenses that also contain express patent licenses, such as version 3 of the GPL and the Mozilla Public License (“MPL”). See GPLv3, supra note 13, at § 11; Mozilla Public License, Mozilla, http://www.mozilla.org/MPL/2.0/ (last visited Apr. 2, 2013), at § 2.1(b). The TAPR and CERN licenses also contain express patent licenses. See TAPR license, supra note 18, at § 2; CERN license, supra note 18, at § 3.4. At the same time, the TDPL gives consideration to legitimate concerns that the scope of this license not be overly broad. First, the license is limited to the use of the licensed design in an automated printing process. As such, the patent license cannot be used a shield for the use of the design in a traditional manufacturing process that does not require the copyright license of the TDPL. In this way, the patent license is tied to the copyleft obligations of the TDPL – only a licensee that is prepared to share derivative works in compliance with the obligations of the TDPL can enjoy the benefit of the patent license. Second, only a “Licensor” grants a patent license under the TDPL. As such, an individual or entity that simply distributes a design or article does not grant any patent license. Third, the license does not apply to works created in violation of the license. As such, an individual that violates the copyright license of the TDPL will also not have the benefit of the express patent license.

Protecting Artistic Vandalism: Graffiti and Copyright Law

Protecting Artistic Vandalism: Graffiti and Copyright Law
By Celia Lerman* A pdf version of this article may be downloaded here.  


Does copyright law protect graffiti? This is a question of growing importance in today’s art scene. Books, CD’s, t-shirts and other items featuring graffiti images are often released without permission from the original graffiti artists. For a recent example, take the graffiti exhibition mounted in a Buenos Aires art gallery by Peruvian artist José Carlos Martinat. Martinat’s exhibition consisted of appropriated pieces of graffiti that he had carefully removed, without permission, from the walls of private properties in Buenos Aires. Martinat also offered these pieces for sale. Local graffiti artists reacted furiously to this exhibition and collectively destroyed all of their graffiti pieces in situ during the gallery’s opening night. Examples like this lead us to wonder if graffiti artists could receive any protection under copyright law.[1] At least some pieces of graffiti are suitable for copyright protection, insofar as they are original works, fixed in a tangible medium of expression. Still, why should we protect expressions created by an illegal act (painting a third party’s property without her permission)? Should the law help graffiti artists to benefit from their transgressions? Moreover, if the primary purpose of copyright is to incentivize the creation of valuable creative works, should we protect and promote illegal art? Following an overview of recent cases concerning graffiti in Section I of this Article, Section II will argue that when graffiti complies with the minimum requirements for copyright protection (an original work, fixed in a tangible medium of expression), it should be protected under copyright law despite its illegality. As will be explained in Section III, this is because copyright should be neutral towards works created by illegal means. Because copyright should only be concerned with the immaterial work, the artist’s material transgressions should not exclude the work from copyright protection. Section III will also show that copyright protection for graffiti may be justified even under the incentive-based scheme of the U.S. Copyright Act. Illegal graffiti pieces are creative works of authorship that can fit into the concept of promoting “the Progress of Science and useful Arts,” as stated in the United States Constitution.[2] Protecting graffiti under copyright law, moreover, may incentivize graffiti artists to create more legal works. Section IV analyzes the challenges that artists face when enforcing their rights in their graffiti under the Copyright Act and the Visual Artists Rights Act (“VARA”). I will claim that VARA can protect graffiti against modification and destruction from third parties, but not from the wall owner, whose property rights were violated when the graffiti was created. I will also argue that graffiti artists can fully claim their rights of attribution under VARA.

I. A Rising Artistic Movement Where Ownership Raises Concerns

Graffiti is one of the fastest growing artistic movements.[3] It has been compared to the cubist revolution,[4] and regarded as the twenty-first century heir to Pop Art.[5] Graffiti pieces can be found in all sorts of spaces with significant public exposure (streets, means of transport, and buildings), chosen carefully by graffiti artists to give high visibility to their work. The term “graffiti” has both a broad and a narrow meaning. The broad meaning refers to an artistic movement that includes several different styles (spray-paint graffiti, street art and stencils), which, in turn, are associated with different socio-cultural groups. The narrow meaning only refers to spray-paint graffiti. In this article, unless otherwise noted, I will use the term “graffiti” only in the broad sense.[6] Moreover, I will primarily focus on illegal graffiti, that is, graffiti that has been fixed to a surface without permission from the surface’s owner. Spray-paint graffiti includes elaborate signatures and tags, along with murals and other graphic pieces created with spray paint.[7] This technique is used not only by graffiti artists, but also by gangs to mark their territory, sports fans to support their teams, and by political groups to advance their causes. Spray-paint graffiti generally has a message that is written by and for the graffiti community: few people–generally those either from the same gang culture, or people from the same artistic community–understand the meaning of such graffiti pieces.
Spray-Paint Graffiti[8]
Spray-Paint Graffiti 1
Spray-Paint Graffiti 2
Spray-Paint Graffiti 3
Spray-Paint Graffiti 4
  By contrast, street art techniques go beyond just spray-cans.[9] They range from traditional painting with brushes, rollers and palettes, to more innovative forms of expression such as stickers, posters, lighting installations and mosaics.[10] Street art, moreover, is often purely artistic: by this I mean that, unlike spray-paint graffiti, street art is an aesthetic work that the general public is able to interpret and with which the public can connect.
Street Art[11]
Street Art 1
Street Art 2
Street Art 3
  Stencil graffiti combines elements from spray-paint graffiti and from street art. Stencil artists carefully prepare stencil blueprints on hand-made sheets, which they then place on a surface and cover with spray paint. Stencil graffiti works are the easiest and quickest pieces to replicate.[12] Like spray-paint graffiti, stencil art is created with spray-paint, and like street art, stencil art is generally artistic.
Stencil 1
Stencil 2
Stencil 3
Graffiti pieces increasingly attract the attention of numerous collectors, gallery owners, publishers, filmmakers, and journalists. Pieces from famous graffiti artists have sold for hundreds of thousands of dollars in the art market.[14] Graffiti pieces have even been given as diplomatic gifts.[15] Galleries are seeing record attendance at exhibitions of graffiti works,[16] and publishers have generated a boom of photographic books on graffiti and street art.[17] As graffiti has grown in popularity, several conflicts have highlighted issues regarding the rights graffiti artists have with respect to their work. The first group of examples involve the unauthorized reproduction of graffiti through other means of expression, such as books, clothing, film, and TV advertisements. For example, photographer and graffiti aficionado Peter Rosenstein published the book, Tattooed Walls,[18] which displays over one hundred pictures of New York City murals. Rosenstein had accumulated these photographs over the course of a decade; he then compiled and published these images without permission from the graffiti artists whose works were featured. Soon after publication, a dozen artists who created some of the book’s murals—including the group Tats Cru—sought a settlement from Rosenstein.[19] Rosenstein explained that he did not ask for permission because “the murals were in public spaces,”[20] and because he thought the publication “was covered under fair use provisions.”[21] However, US copyright law does not support these arguments, as we shall see below.[22] Eventually, a settlement was reached and the book was quickly taken out of the publisher’s catalogue.[23] Another example of a book that reproduced graffiti without permission is Tony Hawk’s Pro Skater 2 Official Strategy Guide, published by Pearson Education a/k/a Brady Publishing. The book features a mural by Chicago’s graffiti artist Hiram Villa, known as “UNONE,” without the artist’s consent. Villa brought copyright infringement and state law claims against the publishers, but the court initially dismissed his case for lack of copyright registration.[24] In its decision, however, the court explained that it “assumed, without deciding, that the work is copyrightable.”[25] Villa then registered his work with the Copyright Office and filed suit again. This time, the publisher moved to dismiss the complaint, and the court rejected the publisher’s motion.[26] Unfortunately for this paper’s analysis, the parties reached an agreement before the court could issue any substantive decision on the case, leaving the question unsettled.[27] Graffiti has also been reproduced on clothing. For example, Urban Outfitters recently printed t-shirts that featured a signature piece by street artist Cali Killa without his permission. Cali Killa and Urban Outfitters settled the dispute, and the clothing company stopped using the artwork.[28]
Cali Killa’s Graffiti and Urban Outfitter’s Clothing[29]
Cali Killa's Graffiti and Urban Outfitter's Clothing
  Another example of graffiti appropriation is the swimsuit worn by the Spanish synchronized swimming team in the 2008 Beijing Olympics. The swimsuit in question reproduced German artist Cantwo’s graffiti artwork without his permission.[30] Complicating the conflict, Spanish nationals performed the infringement of the German work in China.[31] The artist complained publicly, but it is unclear whether he took any legal action against the team.[32]
Cantwo’s Art and Swimsuits[33]
Cantwo 1
Cantwo 2
Cantwo 3
  Films and TV advertisements have also featured unauthorized uses of graffiti. In 2011, a mural painted by the group of artists known as Tats Cru was featured without permission in a Fiat 500 commercial with Jennifer Lopez. The commercial, My World by J.Lo, emphasized the connection between the Lopez and the Bronx, and included the graffiti murals, among other distinctive scenes from her neighborhood. The parties reached an agreement regarding the commercial’s use of the mural.[34]
Stills from JLo’s Fiat Commercial
JLo 1
JLo 2
JLo 3
Along with the unauthorized reproduction of graffiti pieces, there is a second group of conflicts; this group involves disputes over the preservation and ownership of physical graffiti works. One example concerns the 5 Pointz building in Long Island City, New York. The 5 Pointz building is an old, unused warehouse that has been curated by graffiti artist Meres One since 2002.[35] It serves as a center for graffiti artists in New York and is considered a landmark building both by the artists and by many locals.[36] The owner of the building, real estate developer Jerry Wolkoff, initially welcomed artists to the building[37] and currently tolerates the graffiti activity. Wolkoff has since announced, however, his intention to demolish the building in 2013.[38] Graffiti artists and supporters have started an online petition to protest the demolition of the building; the petition has received over 13,000 signatures.[39] It is unclear whether the graffiti works at 5 Pointz are legal. In order to avoid criminal liability for their graffiti, the artists would need to show that they received express consent to paint on the site.[40] However, as this piece will argue, any questions of civil liability remain intrinsically tied to determinations of copyright.[41] Peruvian artist José Carlos Martinat’s exhibition in Buenos Aires illustrates this category of conflicts as well. Martinat mounted an exhibition that consisted of appropriated pieces of graffiti that he had carefully removed without permission, using a special art-removal technique, from the walls of private properties in Buenos Aires.[42] He only removed art that was not signed (but whose authors could be found within the local street art scene, given their characteristic style and strong presence in the local graffiti community) and small sections of larger murals that were signed.
Graffiti Before and After Martinat’s Actions[43]
Martinat 1
Martinat 2
Martinat 3
Martinat 4
  In an act of “vandalism against vandalism,”[44] Martinat offered these removed pieces for sale in an art gallery. Local graffiti artists reacted furiously and collectively destroyed all of their own exhibited graffiti pieces during the gallery’s opening night.[45] Although some graffiti artists liked the conceptual foundations of the exhibition, most were enraged that an outsider had destroyed their artwork, harming not only the artists, but also the owners of the surfaces that had contained the art, as well as the local public who had previously enjoyed the art.[46] For these artists, the story would have been different if other graffiti artists painting over their work on the same walls; this is understood as part of the natural life cycle of graffiti and as part of the artistic dialogue that street art entails. In this case, however, Martinat purposely intended to remove and modify the art for his own benefit–hijacking and ending the dialogue.[47] Martinat responded to the artists’ raid by claiming their intervention was part of his conceptual work: the vandalized vandals were vandalizing back.[48] Due to this incident, subsequent exhibitions in Brazil were cancelled.[49]
Artists’ Reactions: “La Pared No Se Vende” (“The Wall Is Not For Sale”)
Reaction 1
Reaction 2
  Despite its increasing popularity, graffiti is punished severely by many local authorities. Artists may not only suffer fines for damaging property, but they may also be subject to criminal sanctions in many jurisdictions.[50] State and local laws usually punish graffiti production and associated conduct, such as the possession of graffiti instruments[51] and the sale and distribution of broad-tipped markers and spray paint to minors.[52] With these examples of conflicts and sanctions in mind, let us now analyze some central questions regarding the ownership of unauthorized graffiti art.

II. Graffiti as a Visual Work Under Copyright Law

In order to receive protection under copyright, an artistic expression must comply with the following minimum legal requirements: it must be a work of authorship that is original and fixed in any tangible medium of expression.[53] That is, the creative work must have originated with the author,[54] and its embodiment, by or under the authority of the author, must be sufficiently permanent or stable for it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration.[55] These are the necessary and sufficient requirements for protection of artistic expression under copyright. Thus, like any other artistic piece, if a graffiti work complies with these minimum requirements, it can be protected under copyright. Consider, for example, Keith Haring’s famous street art in the New York City subway. These works featured dancing people drawn in Haring’s characteristic style, white chalk on unused black advertising panels in the subway.[56] These drawings were distinct, original, and were fixed on subway panels, which are a form of tangible media. Accordingly, Keith Haring’s art could have been protected under copyright law.
Keith Haring’s Subway Art[57]
Keith Haring 1
  Not all graffiti, however, qualifies for copyright protection. For instance, simple tags, signatures and other spray-paint graffiti may be too small or too simple to be considered artistic “work.” Graffiti that consists of words and short phrases, familiar symbols and designs, or mere variations of typographic ornamentation, lettering or coloring cannot be protected.[58] Nor are graffiti typefaces copyrightable as such, artistic though they might be, because typefaces are not considered protectable works.[59]
Examples of Graffiti That May Not Qualify for Copyright Protection[60]
Non-Qualifying 1
Non-Qualifying 2
  Copyright’s originality requirement could also prevent some works from being copyrightable. For example, take a common phrase, such as “Lucille, I love you,” “Laura was here,” or “Vote for Obama,” painted on a wall with one or two spray paint colors in simple handwriting. Even though this visual expression might constitute a “work of authorship,” it would lack sufficient originality to qualify for copyright protection. Usually, graffiti works are fixed in a tangible medium of expression by being painted on a wall. Since copyright law’s fixation requirement only demands that the work is sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than a transitory duration,[61] we should be able to identify a protectable graffiti work even if its physical embodiment is later destroyed. Copyright law distinguishes between the work and the physical support that embodies it; it only protects the former, not the latter. Most graffiti works are ephemeral because they will be painted over (either by the owner of the wall, the local authorities or other graffiti artists), or they will fade out from weather and lack of maintenance. Nevertheless, this temporary existence should be sufficient to meet copyright’s fixation requirement.[62] Thus, if graffiti artwork is an original work of authorship fixed in a tangible medium of expression, it should be eligible for copyright protection. Moreover, a graffiti piece could be categorized as a work of visual art.[63] This categorization is relevant only for the rights extended to the artist under the Visual Artists Rights Act (VARA), which I will analyze below in Section IV. Such a designation, however, has no bearing on the copyrightability of a work under U.S. copyright law. A piece is considered a work of visual art under VARA if: it is a painting, drawing, or sculpture; it exists in a single copy or in a limited edition of 200 copies or less; and it is signed and consecutively numbered by the author.[64] The piece is excluded from this category, however, if (i) the author did not sign it and there were no other identifying marks of his in the work;[65] (ii) it was reproduced over two hundred times;[66] or (iii) if copyright requirements were not met in the visual aspect of the work.[67] Consider, for example, an original poem painted over a wall in a bar’s bathroom with plain ink. The poet could claim copyright protection over the written text of the poem, but it will be more difficult to claim copyright over the visual manifestation (the conjunction of a text on a wall), unless it is clear that the piece is an original visual artwork. Under the general rules of copyright ownership, notwithstanding other legal concerns about the work’s production, the author of a graffiti work should hold the copyright over it.[68] The wall owner has no claim to the copyright because he did not make any authorial contribution to the graffiti artwork. Owning the physical embodiment of a work does not confer title to the copyright.[69] The tangible and intangible aspects of a work are independent from the physical embodiment, and so are the rights over each aspect. As I will discuss in more detail below, this independence explains why a graffiti artist can validly claim copyright over a piece, even if he did not have permission to affix work to another’s property.

III. How Can We Protect Illegal Expression Like Graffiti Under Copyright?

A. Identifying Illegal Graffiti

For the analysis that follows, I will first identify instances where graffiti is illegal. Graffiti is illegal when it is created without permission from the owner of the surface upon which the graffiti is placed.[70] The graffiti can be illegal even when the graffiti does not harm the property owner; a graffiti painting may actually increase the value of the painted property, for instance, when it is placed on a run-down building, or when a famous graffiti artist creates it.[71] Even in those cases, however, the graffiti would still be considered illegal. Although creating graffiti could provide artists with the opportunity to receive monetary rewards for adding value to another’s property,[72] this potential does not justify the illegal act. If the owner consents to the artwork, no civil sanctions should occur because the act is covered under the owner’s property right (no matter how ugly or anti-aesthetic the graffiti is).[73] Property owners could even consent ex post facto to graffiti that was originally unauthorized. But whether such ex post consent would prevent criminal sanctions depends on the jurisdiction and on prosecutorial discretion. Consent plays an important role in determining the legal status of a graffiti work. For example, Banksy, Keith Haring and Jean-Michel Basquiat have all created graffiti pieces with the consent of the owners of the physical property on which they are embodied. The government of Bristol, United Kingdom decided to keep one of Banksy’s controversial graffiti pieces after an open poll showed that city residents favored preservation of the work.[74] The New York City government accepted the preservation of one of Haring’s murals, entitled “Crack is Wack,” and even renamed a playground after it.[75] Owners of works by Banksy and Jean-Michel Basquiat have offered their originals for sale at considerable prices, revealing the high value they saw in the works.[76] In these cases, property owners have embraced and accepted graffiti works that were embodied on their property, and the artists were never accused of any crimes. This ex post acceptance could provide a reason not to prosecute.[77] This is especially true where a government consents to a graffiti work, as it would be surprising if the same government both criminally prosecuted and rewarded a graffiti artist for his mural. Consent may even ratify the graffiti at 5 Pointz if the artists can show that the owner gave his implied consent.[78] Although the owner’s consent may not serve fully to deflect criminal charges under New York vandalism law, it might still help the artists fight any civil claims from the property owner. Some have argued that graffiti should not be illegal because it is protected under the constitutional right to freedom of speech. This is the view of many graffiti supporters, who maintain that a “real solution lies in a candid application of the First Amendment,” and that “graffiti falls under the realm of symbolic speech and therefore, should be afforded First Amendment protection and be subject to the rights and limitations of freedom-of-speech precedents.”[79] Internationally, political or meaningful graffiti could fall under freedom of speech protection when placed on public property.[80] In the Unites States, however, freedom of speech could protect graffiti in only a limited fashion, since regulations that are content-neutral, and which restrict time, place, and manner of expression, could validly restrict graffiti on public property. Content-neutral regulations are valid under first-amendment doctrine even when the public property in question could qualify as a public forum, such as a street or a park. In Members of City Council v. Taxpayers for Vincent,[81] the U.S. Supreme Court ruled that an ordinance prohibiting the posting of signs on public property did not violate the plaintiff’s freedom of speech, relying on precedent that established the the city’s “interest in avoiding visual clutter . . . was sufficiently substantial to provide an acceptable justification for a content-neutral prohibition against the posting of signs on public property.”[82] Content-neutral regulations that are aimed at a wide range of behaviour and only have an “incidental” effect on speech are permitted.[83] Under freedom of speech jurisprudence, a content-neutral restriction of time, place, and manner is accepted if it is “narrowly tailored to serve a significant governmental interest”[84] and “leaves open ample alternative channels for communication.”[85] For example, in Serra v. United States General Services Administration,[86] artist Richard Serra filed suit to prevent the removal of his Tilted Arc sculpture from public property, on the grounds that removal would violate his free expression rights.[87] Serra is not a graffiti artist, but this case is still illustrative due to its freedom-of-speech analysis. The United States government originally sanctioned and contracted the installation of Tilted Arc, although it later decided to remove the piece and change its location.[88] Serra maintained that Tilted Arc was site-specific, “designed for the Federal Plaza and artistically inseparable from its location,” and that removing the piece to another site would “destroy it,” depriving the work of meaning.[89] The court denied Serra’s complaint, stating that the removal of the sculpture was a permissible time, place and manner restriction.[90] This restriction conformed with the first-amendment requirements of “being narrowly tailored to serve a significant governmental interest”—namely, keeping the plaza clear of obstruction—and of there being “open ample alternative channels for communication of the information”–because there were other available means for Serra to express his artistic and political views that “did not entail obstructing the plaza”.[91] Similar arguments could be made regarding why graffiti may be regulated under the First Amendment. Where graffiti is restricted on a content-neutral basis, it may be difficult to overturn the restriction using freedom of speech jurisprudence.

B. Illegality Is Not a Basis for Denying Copyright Protection

Now that we have identified when a graffiti work is copyrightable and when it is illegal, I will discuss why we should protect graffiti under copyright. Protecting graffiti under copyright feels wrong, intuitively. How could we let graffiti artists benefit from their crimes? Can we reward them with copyright on the one hand, while punishing them criminally on the other? As a general legal principle, no one should benefit from his crimes. This principle is reflected in the Latin maxim ex turpi causa non oritur actio (“from a dishonorable cause, an action does not arise”). Courts have developed this principle as the doctrine of unclean hands: one cannot seek protection under the law if he has acted wrongly with respect to the matter of the complaint.[92] Does this mean that we cannot protect graffiti under copyright? I do not believe so. We should still grant protection to illegal graffiti because the wrongdoing (fixing the work on another’s property without permission) is not relevant to the copyrightability of the work itself. Copyright should be neutral towards works created by illegal means. Indeed, copyright law imposes no negative consequences for illegal acts. Civil sanctions and criminal penalties are sufficient punishment for bad actors; copyright exclusion would be an unnecessary addition.[93] Copyright is essentially a right in an intangible work, which is protected independent from its physical embodiment. Under copyright law, it is irrelevant if there are illegal elements in the tangible embodiment of a work (i.e., applying paint to a wall without the owner’s permission) or if the tangible embodiment of a work belongs to someone other than the author of the work. The rights (and wrongs) related to the work and to its tangible embodiment are independent, and one should not affect the other. Under the Copyright Act, “[o]wnership of a copyright, or of any of the exclusive rights under a copyright, is distinct from ownership of any material object in which the work is embodied. . . .”[94] As long as there is a physical means by which the work is fixed, copyright should not take into account precisely which physical means is used to create or fix the work when deciding whether to grant or deny protection. To illustrate this point, there are several examples outside of graffiti where copyright protects right-infringing works.[95] Copyright still attaches to photographs taken that violate privacy rights: a paparazzi photographer has obtained copyright protection over a picture that he took of a celebrity while violating her rights to privacy,[96] and a camp counsellor obtained copyright over a picture of a minor, taken without her parent’s permission.[97] A journalist has received copyright protection over an article that reveals state secrets.[98] A student may also obtain copyright protection for a painting of a minor killing a policeman, even though the work could constitute an illegal threat under criminal law.[99] Copyright protection is denied to a work only if the work itself violates copyright. If artist A’s work reproduces artist B’s old work without permission, then A’s work will not receive protection under copyright law. As the law establishes, “[P]rotection for a work employing preexisting material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfully.”[100] Copyright law does not extend protection to works (or portions of works) that are created in violation of the exclusive rights of the same type that copyright law protects. If U.S. copyright law included a general “illegality clause,” then copyright would not protect works that offend any other body of law. Such clauses are contained in other copyright and trademark laws around the world.[101] U.S. copyright law does not include such a provision.[102] Presumably, general illegality clauses would not be accepted in an intellectual property system like that of the United States, where copyright’s purpose is to promote, not to discourage, expression. The unclean hands doctrine cannot be used to deny copyright protection to a work, unless the wrongful act alleged relates to the copyrightability of the work. The Fifth Circuit case Mitchell Brothers Film Group v. Cinema Adult Theater is illustrative of this point.[103] Mitchell Bros. Film Group (“Mitchell”) owned the copyright over an adult motion picture that was exhibited, without permission, on the premises of the Cinema Adult Theater (“Cinema”). When Mitchell sued for copyright infringement, Cinema alleged that the work was not copyrightable because its content was obscene. Cinema further responded that Mitchell could not sue, based on the unclean hands doctrine. Cinema’s argument was that if Mitchell’s motion picture was obscene and therefore illegal, then Mitchell would lack the “clean hands” necessary to claim legal protection under copyright law. The court, however, rejected Cinema’s argument and maintained Mitchell’s copyright. It explained “that there is not even a hint in the language of [the copyright act] that the obscene nature of a work renders it any less a copyrightable ‘writing’,” and interpreted this as a conscious decision by the legislature, designed to protect the broadest range of expressions.[104] The court also ruled that the doctrine of unclean hands was not applicable, because it requires that the plaintiff’s unethical behavior be related to the subject matter of the lawsuit. In other words, Mitchell’s obscene behavior was not related to the subject matter of its claim for copyright infringement. Specifically, the court stated: “The alleged wrongdoing of the plaintiff does not bar relief unless the defendant can show that he has been personally injured by the plaintiff’s conduct”[105] or that “the public injury . . . frustrate[s] the particular purposes of the copyright (or trademark or patent) statute.”[106] This suggests that the unclean hands doctrine might stand in a case like this, in the form of the copyright misuse doctrine.[107] The work would still be copyrightable, but the rights arising from copyright may not be enforceable against someone personally affected by the plaintiff’s conduct (such as, in graffiti, the owner of the wall), or where the particular purposes of copyright (“the promotion of originality”)[108] are frustrated in enforcing the rights over the work.[109] Mitchell illustrates the reason it is consistent to reward graffiti artists with copyright on the one hand, while punishing them with criminal sanctions on the other: just as Mitchell was subject to obscenity laws, graffiti artists are subject to vandalism laws. However, their work can still be protected under copyright, because vandalism does not preclude copyright protection.[110] As one commentator stated, “The defendant’s unethical behaviour would be vandalism, an act for which the artist may be criminally prosecuted” but that “is not the subject matter of a [copyright] infringement case.”[111] The clean hands analysis in Mitchell differs from the analysis in a typical graffiti case, however, in that Mitchell’s illegality resided in the content of the work, while the illegality in graffiti usually resides in the fixation of the work.[112] This difference, nevertheless, should not affect the analogy; in graffiti, the method of fixation itself could be considered part of the subject matter of the work. The work’s fixation provides context that could be regarded as part of the message of the work and its content. In both cases, moreover, the bad behavior of the author does not frustrate copyright’s purpose of promoting originality through exclusive rights.[113]

C. Illegal Art Can Be Protected in an Incentive-Based Copyright System

To complete the analysis, I still need to answer a fundamental question: how can we protect illegal art in an incentive-based copyright system? In such a system, the goal of copyright is to promote the creation of works that advance knowledge, or, as expressed in the United States Constitution, to “promote the progress of Science and the Useful Arts.”[114] Copyright historically protects works such as books, maps and charts, which are valuable for society. However, graffiti is made through illegal means and does not seem like the kind of work that was originally contemplated when the copyright system was established. If we protect graffiti, are we supporting and promoting the wrong type of creations? Would we be promoting the commission of illegal acts? In the face of the arguments supra, it has been claimed that a natural-rights based theory of copyright would be more suitable for protecting graffiti than an incentive-based one.[115] However, there are reasons that illegal art such as graffiti should still be protected under an incentive-based copyright system. Protecting graffiti is not the promotion of illegal acts, but merely the promotion of creative expressions, without looking into the legality of those expressions. Copyright does not incentivize artists to engage in illegal creative acts because copyright is neutral towards the legality of creative acts, as long as copyright laws are not violated. Granting copyright protection to graffiti will simply promote more art, regardless of whether that art is legal or illegal. Other bodies of law, such as criminal law, are charged with addressing the bad consequences of certain creative acts, but not copyright.[116] The copyright system may limit the undesirable or illegal consequences of enforcing a copyright by means of the copyright misuse doctrine; but this doctrine only stands to limit the enforceability of a copyright, not to determine the copyrightability of a work.[117] This is how illegal graffiti works can promote the progress of science and useful arts. Because copyrightable works do not need to be useful, as patentable inventions do, the Constitution does not restrict copyright protection to legal works only.[118] Furthermore, in an incentive-based copyright system it is not necessary that every work promote the progress of science, but instead, that the system as a whole promotes that desired end. The system does so by granting protection to all works, regardless of their legality. So concluded the court in Mitchell, maintaining that that the Copyright Clause of the U.S. Constitution was “best served by allowing all creative works (in a copyrightable format) to be accorded copyright protection regardless of subject matter or content.”[119] The court reasoned that:
“[B]y passing general laws to protect all works, Congress better fulfills its designated ends than it would by denying protection to all books the contents of which were open to real or imagined objection. . . . Judging by this standard, it is obvious that although Congress could require that each copyrighted work be shown to promote the useful arts (as it has with patents), it need not do so.”[120]
The Supreme Court has expressed a similar view in recent cases, stating that the Copyright Clause “empowers Congress to determine the intellectual property regimes that, overall, in that body’s judgment, will serve the ends of the Clause,” but not necessarily a system in which every element needs to serve the Clause’s goal.[121] Furthermore, as a practical matter, it is somewhat counterintuitive to believe that protecting graffiti under copyright would cause more artists to paint illegally on walls. On the contrary, granting protection may result in their looking for more legal places to paint. Copyright protection could help artists build their reputations faster and switch to painting legally on walls more quickly. Legal acceptance of the art form would also encourage graffiti artists, otherwise excluded by society, to accept the possibility of creating their art by legal means and help them to view the law as an ally rather than an obstacle. Many professional graffiti artists start painting on walls legally as their careers grow and their work becomes more prestigious, probably because it is very hard to develop an artistic career through illegal graffiti only.[122] Keith Haring, Jean-Michel Basquiat, Brazilian artists Os Gemeos, and many others switched to legal art when they gained renown, and realized the commercial potential of their work.[123] Of course, this does not mean that all graffiti artists would switch to legally painting if graffiti were copyrightable, since many artists choose to paint illegally in order to convey a rebellious message. However, copyright would give graffiti artists greater incentive to paint legally. Copyright is especially valuable for artists with growing reputations, as copyright protection could help them advance their careers. Although obtaining copyright protection for graffiti artists’ work would benefit all graffiti artists, it would benefit some more than others. It seems that copyright would be less valuable, for example, to spray-paint graffiti artists who write messages intended solely for the graffiti community, or to artists who reject property rights in general and do not want to keep control over reproductions of their works.[124] Conversely, copyright would be more valuable to artists who develop art for the broader community or who seek to commercialize their work.[125] Even though some graffiti artists would be unmoved by copyright’s incentives, we should still grant copyright protection to graffiti. Under the United States copyright regime, authors receive copyright protection for their qualifying works, regardless what motivated the author to create; it is not necessary that every work serves the Copyright Clause’s goal, but rather that the overall system does.[126]

IV. Challenges to the Enforcement of Artists’ Rights in Their Graffiti

As the examples and cases from Section I show, two important issues for graffiti artists are control over reproductions and preservation of works. We should keep in mind, however, that artists’ rights over their graffiti are limited. Indeed, an artist’s copyright extends only to the intangible aspect of the work, while rights over its physical embodiment remain with the property owner.[127] As a consequence, the owner of a wall containing graffiti could sell the original art piece as part of the structure that contains it, or as a separate item.[128] For example, the owners of a wall that had a Banksy piece affixed to it were able to sell their wall for $200,000.[129] The owner of the wall may also destroy the painting or paint it over completely. The new owner of a building that contained one of Banksy’s works recently did so in the UK,[130] and the same could have been done in the United States.[131] Wall owners can also defend their property against third parties who try to destroy, paint over, or remove original works that have been fixed without permission, as happened recently with two Banksy murals, removed from a factory in Detroit and from a hotel in London.[132]
Banksy’s “Gorilla in a Pink Mask,” Recently White-Washed and Restored[133]
JLo 2
JLo 3
JLo 1
  However, there are limits to the rights that graffiti artists can assert in their work. Because graffiti artists do not own the material embodiments of their work, and since artists violate property owner rights by painting their possessions without authorization, artists cannot claim any rights over the tangible embodiments of their unauthorized works. While artists have rights over the intangible aspect of their graffiti, including the right to prevent unauthorized reproductions, they have do not have equivalent rights regarding the tangible embodiment of their work, such as the right to preserve it in its original condition, against the wishes of the owner. But they may still have certain rights to protect the tangible embodiment from actions of third parties.

A. Challenges in Enforcing Copyright

Graffiti artists should hold the copyright over their work.[134] Holding a copyright means that an artist can prevent third parties from reproducing their work in copies[135] (for example, by taking pictures); preparing derivative works based upon the copyrighted work[136] (by including images of the graffiti in other media, such as videos or posters); and distributing copies of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending[137] (by commercializing or distributing images or other products which feature the graffiti). CaliKilla, Tats Cru and Villa enforced these rights in court when others reproduced their graffiti without permission and sold clothing, videos and books that infringed their copyrights.[138] The right to display the graffiti work publicly is a special case.[139] Despite being one of the rights granted by Copyright Law, the right to display could be considered a right in the tangible embodiment of a work, which should reasonably remain with the owner of the physical property in which the work is embodied.[140] This right to display also has a unique meaning in the context of graffiti because graffiti works are displayed publicly from their creation and being displayed publicly is part of their meaning.[141] Despite this fact, artists should not have the right to display their graffiti (or for that matter, not to display, after the graffiti is created) because they have no control over the tangible embodiment of their work, which belongs to someone else. Moreover, it should be noted that copyright actions may not prevail against a wall owner, who could allege a copyright misuse defense, showing that he has been personally injured by the plaintiff’s conduct.[142] The fact that a work is displayed in a public setting does not prevent an artist from enforcing these rights.[143] This is not true, however, in jurisdictions that provide exceptions for photographing or filming works displayed permanently to the public. This exception, with variations, exists in the United Kingdom,[144] Germany,[145] and New Zealand,[146] among other territories,[147] but not in the United States.[148] It has been pointed out that copyright protection for graffiti works could be problematic in practice because of the difficulty of establishing the authorship of unsigned works. Unsigned graffiti works may even qualify as “orphan works,” and reproducing them may entail significant infringement risk, at least until local laws address the issue of orphan works with proper legislation.[149] However, concerns over unsigned works are exaggerated. It is often easy to find a work’s author by asking the local graffiti community.[150] A work’s style, traces and colors usually make it relatively easy to find the artist; this is especially true today, with online communities of local artists and digital image search tools.[151] Moreover, many works are identifiable by their style even when they are not signed, and multiple artists are reachable through their websites where they publish pictures of their works.[152]

B. Challenges Under the Visual Artists Rights Act

The Visual Artist Rights Act (“VARA”) is also relevant for our analysis.[153] VARA, a piece of legislation inspired by continental moral rights and preservation laws,[154] grants authors of works of visual art the following rights: – Right of Authorship: Authors have a “right (1)(A) to claim authorship over their works; (1)(B) to prevent the use of his or her name as the author of any work of visual art which he or she did not create; and (2) to prevent the use of his or her name as the author of the work of visual art in the event of a distortion, mutilation or other modification of the work which would be prejudicial to his or her honor or reputation;”[155]Right of Integrity: Authors are entitled to prevent any intentional distortion, mutilation or other modification of that work which would be prejudicial to his or her honor or reputation. This excludes, however, modifications that are a result of the passage of time or the inherent nature of the materials.[156]Right Against Destruction: Authors have a right to prevent any intentional or grossly negligent destruction of a work of recognized stature.[157] The rights of integrity and against destruction do not protect the work from modifications that are a result of conservation, unless they are caused by gross negligence, or that result from the public presentation of the work, including lighting and placement.[158] VARA rights are preservationist in nature, since they only apply to the original works of art and not to reproductions.[159] Interestingly, there is only one court decision on the protection of illegal art under VARA to date. In English v. BFC & R. East 11th Street LLC,[160] the district court ruled that illegal murals could not be protected under VARA.[161] In this case, a group of six artists filed suit to prevent the removal of an art display in a community garden, consisting of several sculptures and murals, much of which had been set up without permission on New York City property.[162] The artists based their claims on their rights to integrity and against destruction under VARA.[163] The copyrightability of the work (the art display as a whole) was not discussed in the case. The district court dismissed the complaint on the grounds that VARA “does not apply to artwork that is illegally placed on the property of others, without their consent, when such artwork cannot be removed from the site in question.”[164] The court considered the special circumstances in which the case arose,[165] and reasoned that the illegality of the work, “[Was] a compelling argument [for preventing VARA protection], for otherwise parties could effectively freeze development of vacant lots by placing artwork there without permission. Such a construction of the statute would be constitutionally troubling, would defy rationality and cannot be what Congress intended in passing VARA.”[166] The court also rejected the plaintiffs’ arguments, based on the doctrine of estoppel, that the passage of time meant that the government accepted the works. According to the court, such a doctrine could not apply against the government’s inactivity.[167] The district judge did not expand on her reasoning about the potential problems with applying VARA to unauthorized art, but we may find arguments to support this finding in our analysis from Section III. The case’s finding is consistent with the application of the unclean hands doctrine. Under this doctrine, the artists could not invoke any rights over the tangible aspect of their work, including VARA rights that preserve the physical embodiment of the work, because the artists violated the city’s property rights over the same tangible object. In this case, the artists’ wrongdoings were relevant to preventing the application of VARA rights. The artists could not have gained rights over the tangible aspect of their works because the works were affixed onto another’s property without permission. Moreover, it would be unworkable to allow the author of an unauthorized work to claim the right to protect it, as this would prevent property owners from modifying their own possessions. In line with English, therefore, the owner of a wall can remove or destroy artwork affixed to that wall without being subject to the prior notification requirement of § 113(d)(2).[168] This is an interesting inference, considering that an important part of graffiti’s artistic meaning is its location on a public site.[169] Removing a graffiti piece from its site may be contrary to the creator’s artistic intent for the work,[170] but this artistic intent is not protected by VARA: (i) VARA cannot be invoked by an artist to protect the tangible aspect of a work, including its physical location, against modification by the owner of the property in which the work is embodied or situated, and (ii) in any event, VARA does not protect the public presentation and placement of a work.[171] Nevertheless, English should not be understood as excluding graffiti artists from having any claims under copyright law or under VARA. Under the reading proposed in this article, it is only the unclean hands doctrine and the property owner’s rights that prevent graffiti artists from asserting rights under copyright or VARA. Therefore, English should not be read as preventing simple copyright claims over unauthorized works.[172] The court’s ruling on VARA’s scope does not affect copyright protection against unauthorized reproductions of works. As the Copyright Act expressly provides, “ownership of [VARA] rights with respect to a work of visual art is distinct from ownership of any copy of that work, or of a copyright or any exclusive right under a copyright in that work.”[173] The copyright holder can enforce his exclusive rights even if VARA rights are not enforceable. Moreover, despite the ruling in English, artists may still have two types of claims under VARA:
1. Claims of Attribution over the Work
Artists could still enforce their VARA right of attribution over the original work. Since this right is not directly linked to the tangible aspect of the work, it is not pre-empted by an artist’s illegal acts. Because graffiti artists do not have rights over the physical embodiment of their work, they lack the right to affix their name to the physical painting on the wall; but they should still be able to claim attribution in other ways, for instance, by preventing others from claiming that they produced the work. Artists could still enforce a claim of attribution against any offenders, including the owner of the wall in some cases. Artists may not prevent wall-owners from erasing their signature on the wall, but they can still prevent owners from claiming that they authored the work. Because the owner made no authorial contribution to the work, they cannot claim authorship. Some have argued that graffiti artists would be unlikely to claim attribution, as doing so might draw unwanted attention from police and ultimately lead to criminal liability.[174] This may not be the case, however, because the life of VARA rights and the statute of limitations for VARA infringements may be longer than the statute of limitations for graffiti penalties.[175] Therefore, an artist might claim attribution without fearing prosecution.
2. Claims against Third Parties to Protect the Integrity of the Work and to Prevent Destruction of the Work
Graffiti artists could still enforce their VARA rights against third parties who have no rights in the physical property.[176] By painting illegally on the city’s property, the plaintiffs in English did not forfeit their VARA rights. Instead, they simply could not enforce them against the city (the victim of their illegal paintings) due to the unclean hands doctrine. However, the doctrine of unclean hands would not apply towards unaffected third parties, because the artists did nothing wrong towards them. Thus, VARA rights should remain fully applicable against third parties. In other words, although VARA rights to the integrity of a work and against destruction would not be enforceable against the owner of the property, they could be enforced against everyone else, such as bystanders who paint over a work or destroy it, including José Carlos Martinat.[177] However, in the context of graffiti, it is worth noting some factors that may prevent application of the VARA rights of integrity and against destruction to third parties. The right to integrity is shaped by the graffiti community’s codes of honor and reputation. Artists generally know that their work might be ephemeral and that someone else could paint the wall with other art or bring the wall back to its original state.[178] Some artistic modifications of the work are foreseen and expected by graffiti artists, and as such, might not implicate the artist’s right of integrity.[179] The rules of the graffiti community can help us evaluate whether a modification affects the honor and reputation of the artist or not. For example, if an artist responds to overlapping graffiti on his work with a new graffiti (she does not just restore the original work, but she creates a new work in response to the intervention), then its reasonable to think that there is an artistic dialogue and that the modification of the work does not “prejudice the author’s honor or reputation,” because modifications are understood to be an element of graffiti art.[180] The VARA right against destruction of a work, may be difficult for graffiti artists to use, as it only applies to works of “recognized stature.”[181] It may be difficult for many graffiti works to qualify for this status. Courts have interpreted the recognized stature requirement as a two-tiered standard, which demands: “(1) that the visual art in question has ‘stature’ i.e. is viewed as meritorious, and (2) that this stature is ‘recognized’ by art experts, other members of the artistic community, or by some cross-section of society.”[182] In graffiti art, this requirement was met in one case where the work was “a community work that exhibits the concerns of the community.”[183] The accepted work was a mural containing anti-drug, anti-alcohol and anti-smoking messages.[184] However, it is uncertain that the requirement would be met with regular street art that has no communitarian educational message in particular, or that was created by less than well-known artists. Some pieces by well-known graffiti artists would probably fulfill the recognized stature requirement without any communitarian or educational message because art experts, other members of the artistic community, and society as a whole recognize their stature.[185] However, works by less-famous artists may have more difficulty meeting the recognized stature standard.[186] This uncertainty is of real concern to artists who must embark on extensive legal research before litigation.[187]


In this article, I have argued that graffiti can and should be protected under copyright law. When an unauthorized graffiti work complies with the minimum requirements for copyright protection it should be protected under copyright law despite its illegality. This is because copyright should be neutral towards works created by illegal means. Copyright assigns rights over the intangible aspects of a work only; it does not exclude works that have been tangibly fixed in an illegal manner. This is true even under an incentive-based copyright system such as the one established by the United States Copyright Act. Illegal graffiti works are creative acts that comply with copyright’s goal of “promoting the Progress of Science and useful Arts.”[188] Protecting graffiti, moreover, may have the consequence of incentivizing graffiti artists to create more legal works. I have also explored the challenges that artists face when enforcing rights over their graffiti, both under the Copyright Act and VARA. Graffiti has a unique position in relation to copyright’s nature and scope. While “many people are too quick to view street art through the lens of vandalism,”[189] copyright law cannot simply dismiss graffiti works. Graffiti works must be treated on equal footing with other artistic works for the purposes of copyright law, without being discriminated against due to their illegality. Copyright protection is valuable to all graffiti artists since it gives them the ability to assert artistic control over how their works are reproduced and shared. It may be true that copyright is for losers, as Banksy has expressed.[190] But even if that is the case, graffiti artists should still have the option to be losers.
* Visiting IP Scholar, Kernochan Center for Law, Media & the Arts, Columbia Law School. Intellectual Property Law Professor, Universidad Torcuato Di Tella (Buenos Aires, Argentina). I am thankful to Jane Ginsburg, June Besek, Morgan Friedman, Agustin Waisman, Kali Nicole Murray, Michelle Pham, Jonny Robson and the Graffitimundo team in Argentina, the JIPEL editorial team, Philippa Loengard, and the participants of the Current Issues in Copyright seminar at Columbia Law School for their useful comments.
[1] This article focuses on United States copyright law. Many international examples will be used throughout this paper; however, they are used only as illustrative fact patterns, and all legal issues should ultimately be interpreted under US copyright law.
[2] U.S. Const. art. I, § 8, cl. 8.
[3] “Never before have we seen public art reach such a scale as we now see with the works of Blu, or become so pervasive as we see with Shepard Fairey’s, or so copied as that of Banksy, or so delicate as that of Swoon.” See Marc & Sara Schiller, Preface to Carlo McCormick et al., Trespass: A History Of Uncommissioned Urban Art 10 (Ethel Seno ed., 2010).
[4] See Magda Danysz & Mary-Noëlle Dana, From Style Writing To Art: A Street Art Anthology 18 (2011); see also Anna Waclawek, Graffiti and Street Art (2011) (surveying graffiti’s evolution).
[5] Lisa Gottlieb, Graffiti Art Styles: A Classification System And Theoretical Analysis 49 (2008).
[6] Even though many artists prefer to distance themselves from this word due to its illegal connotations, using this single term simplifies the analysis. I follow the practice of other writers who analyze graffiti art. See, e.g., Nicholas Ganz, Graffiti World 10 (Tristan Manco ed., 2004).
[7] “Letters used to dominate but today the culture has expanded: new forms are explored, and characters, symbols and abstractions have begun to proliferate.” Id. at 7.
[8] Graffiti: (Top left) King157, Oakland Graffiti Art (2008), Flickr, http://www.flickr.com/photos/24293932@N00/3302255569 (photograph by Anarchosyn (2009)); (Top center) A Graffiti Mecca on Borrowed Time, N.Y. Times (Aug. 28, 2011), http://www.nytimes.com/slideshow/2011/08/28/ nyregion/20110828POINTZss-6.html?_r=0 (photograph by Todd Heisler/N.Y. Times); (Top right) Graffiti in Derby, UK, Flickr, http://www.flickr.com/photos/orangeacid/180986272/ (photograph by Orangeacid (2006)); (Bottom) Graffiti Mecca, supra, http://www.nytimes.com/slideshow/2011/08/28/nyregion/20110828POINTZss-4.html (photograph by Todd Heisler/N.Y. Times).
[9] Danysz, supra note 4, at 18.
[10] Id. at 19.
[11] Street art: (Top) Dave the Chimp, Human Beins (2009) in Christian Hundertmark, The Art Of Rebellion III: The Book About Street Art 54 (2010); (Bottom Left) L’Atlas, Gaffer Tape on Concrete (2010) id. at 15; (Bottom Right) Chu & Tec, Efectos Colaterales del Tamiflu [Side Effects of Tamiflu] (2009), Flickr, http://www.flickr.com/photos/tectec/3882199518/in/pool-64973255@N00/.
[12] Even when replicated, it could be argued that there is uniqueness to each piece, despite the stencil mechanism. Stencil is an artisanal painting method, not a mechanical one.
[13] Stencil: (Left) Graffitimundo, http://graffitimundo.com (last visited Mar. 15, 2013) (sixth photograph in the homepage slideshow); (Center) Banksy, Flower Thrower; (Right) Stencil Land, Metal Gaucho, Graffitimundo, http://graffitimundo.com/artists/stencil-land/ (last visited Mar. 15, 2013).
[14] Recently, for example, Stephan Keszler’s Gallery in the Hamptons has had street art works appraised for $200,000. Anny Shaw, Banksy Murals Prove To Be an Attribution Minefield, The Art Newspaper (February 16, 2012) [hereinafter, Banksy Murals], available at http://www.theartnewspaper.com/articles/Banksy-murals-prove-to-be-a-minefield/25631. Banksy’s graffiti art has been sold in the United Kingdom for £200,000. Wall Painted by Banksy Sells for £200,000 – but the New Owner Must Also Fork Out To Move the Brick Canvas, MailOnline (Jan. 15, 2008, 9:16 AM) [hereinafter “Wall Painted”], http://www.dailymail.co.uk/news/article-508290/Wall-painted-Banksy-sells-200-000–new-owner-fork-brick-canvas.html. In the film Exit Through the Gift Shop (Paranoid Pictures 2010), the narrator mentions, “Now, no serious contemporary art collection would be complete without a Banksy.”
[15] See David Cameron Presents Barack Obama with Graffiti Art, BBC News (July 21, 2010, 5:25 AM), http://www.bbc.co.uk/news/uk-politics-10710074.
[16] An exhibition in Bristol by graffiti artist Banksy was among the top 30 most visited global exhibitions in the period 2008–2009. See Banksy Graffiti Works Enter World Exhibition Top 30, BBC News (Mar. 31, 2010, 2:02 AM), http://news.bbc.co.uk/2/hi/entertainment/8595341.stm. A group of artists is planning a new International Street Art Museum in Los Angeles. See Museum of International Street Art, http://www.internationalstreetart.org/ index.html (last visited Feb. 22, 2013).
[17] See, e.g., Ganz, supra note 5; Roger Gastman & Caleb Neelon, The History of American Graffiti (2011); Hundertmark, supra, note 11; Riikka Kuittinen, Street Art: Contemporary Prints (2010); Jaime Rojo & Steven P. Harrington, Street Art New York (2010); see also Ket, Street Art: The Best Urban Art from Around the World (2011); Alain Maridueña, New York City: Black Book Masters (2009); Eleanor Mathieson & Xavier A. Tàpies, Street Artists: The Complete Guide (2009); Style Needs No Color, Schwarz Auf Weiss (2009); Guilherme Zauith & Matt Fox-Tucker, Textura Dos: Buenos Aires Street Art (2010).
[18] Peter Rosenstein with text by Isabel Bau Madden, Tattooed Walls (2006).
[19] See David Gonzalez, Walls of Art for Everyone, but Made by Not Just Anyone, N.Y. Times, June 4, 2007, at B1, available at http://www.nytimes.com/2007/06/04/nyregion/04citywide.html?sq=walls%20of%20art&st=nyt&scp=1&pagewanted=all&_r=0.
[20] Id.
[21] Id.
[22] See infra Part IV.A.
[23] See Gonzalez, Walls of Art for Everyone, supra note 19.
[24] Villa v. Brady Publ’g, No. 02 C 570, 2002 WL 1400345, at *1 (N.D. Ill. June 27, 2002).
[25] Id. at *3.
[26] Villa v. Pearson Educ., No. 03 C 3717, 2003 WL 22922178, at *1 (N.D. Ill. Dec. 9, 2003).
[27] E-mail from Hiram Villa. Pres., Momentum Art Tech., to Celia Lerman, Visiting IP Scholar, Kernochan Center for Law, Media & the Arts, Columbia Law School (Feb. 8, 2012) (on file with author).
[28] Hrag Vartanian, Street Artist Triumphs Over Urban Outfitters in Copyright Case, Hyperallergic (Sept. 20, 2011), http://hyperallergic.com/36016/ cali-killa-urban-outfitters/.
[29] Id.
[30] Markus Balser, Cantwo Says “Can Not!” to Spanish Swimmers, Wall St. J. (Sept. 9, 2008, 4:44 PM), http://blogs.wsj.com/law/2008/09/09/ cantwo-says-can-not-to-spanish-swimwear/.
[31] Id.
[32] He told the Wall Street Journal: “Despite some color changes: To my mind the cartoon-style character was clearly taken from an artwork I sprayed on a wall legally in Muenster in 2001. [. . .] I have absolutely no idea how this Graffiti made its way to the Olympic stage, but I know: I can’t accept that somebody is copying my work, the work I have to live on.” Id.
[33] See Dean R. Karau, Will Spain’s Olympic Synchronized Swim Team Be Sunk by German Graffiti Artist?, Fredrikson & Byron P.A. (Sept. 2008) http://www.fredlaw.com/areas/trademark/Articles/trade_0809_drk1.html.
[34] See David Gonzalez, Graffiti Muralists Reach Settlement in Case of Contentious Fiat 500 Commercial, N.Y. Times, (Dec. 2, 2011, 6:00 AM), http://wheels.blogs.nytimes.com/2011/12/02/graffiti-muralists-reach-settlement-in-case-of-contentious-fiat-500-commercial/.
[35] Karen McVeigh, 5Pointz: New Yorkers Prepare To Say Goodbye To a Slice of Hip-Hop History, Guardian (Jan. 17, 2012, 12:43 PM), http://www.guardian.co.uk/world/2012/jan/17/5pointz-new-york-hip-hop-history.
[36] “‘This is a cultural landmark, not only for New York, but for hip-hop culture worldwide’ says Steve Harrington, the author of the book Street Art New York. . . .‘We need to keep our cultural institutions protected and preserved.’” Marlon Bishop, Queens Graffiti Mecca Faces Redevelopment, W.N.Y.C. (Mar. 7, 2011), http://culture.wnyc.org/articles/features/2011/mar/07/queens-graffiti-mecca-faces-redevelopment/; see also Robin Finn, Writing’s on the Wall (Art Is, Too, for Now), N.Y. Times, Aug. 27, 2011, at MB1, available at http://www.nytimes.com/2011/08/28/nyregion/5pointz-arts-center-and-its-graffiti-is-on-borrowed-time.html?pagewanted=all.
[37] Clem Richardson, Word on His Street Is Art Businessman Offers Artists a Place To Create Murals, N.Y. Daily News (June 5, 2000, 12:00 AM), http://www.nydailynews.com/archives/boroughs/word-street-art-businessman-offers-artists-place-create-murals-article-1.875235.
[38] McVeigh, supra note 35; Averie Timm, Owner Says Queens Graffiti Mecca 5Pointz Will Stay for Now, but Not Forever, Village Voice (Apr. 8, 2011, 5:11 PM), http://blogs.villagevoice.com/runninscared/2011/04/5pointz_owner_interview.php.
[40] See N.Y. Penal Law § 145.60 (McKinney 1992), which bars the making of graffiti without “the express permission of the owner or operator” of the property. See also N.Y. City Admin. Code § 10-117 (McKinney 2006) which is the municipal regulation barring graffiti without the “express permission of owner or operator of the property.”
[41] See infra Part III.A. Unfortunately, given the confidential nature of the matter, I was unable to obtain more details regarding Wilkoff’s consent and the relationship between Wilkoff and Meres One during my visit to 5Pointz in January 2012.
[42] See Claudio Iglesias, Pared Contra Pared [Wall Against Wall], Página/12 (Nov. 14, 2010), http://www.pagina12.com.ar/diario/suplementos/radar/ 9-6612-2010-11-14.html.
[43] See Paredes Robadas: Street Art Theft in Buenos Aires, Graffitimundo (Oct. 15, 2011), http://graffitimundo.com/media/paredes-robadas-the-theft-of-buenos-aires-street-art.
[44] Id.
[45] See id.
[46] See id.
[47] Interview with Jonny Robson, Co-Founder, Graffitimundo, in Buenos Aires, Arg. (December, 2011). Graffitimundo is an organization dedicated to increasing awareness of the rich heritage and dynamic culture of street art, based in Buenos Aires. See About Us, Graffitimundo, http://graffitimundo.com/about-us/ (last visited April 6, 2013).
[48] See Iglesias, supra note 42.
[49] Id.
[50] See N.Y. Penal Code § 145.60 (McKinney 2012) (“1. For the purposes of this section, the term “graffiti” shall mean the etching, painting, covering, drawing upon or otherwise placing of a mark upon public or private property with intent to damage such property. 2. No person shall make graffiti of any type on any building, public or private, or any other property real or personal owned by any person, firm or corporation or any public agency or instrumentality, without the express permission of the owner or operator of said property. Making graffiti is a class A misdemeanor.”). Other states such as California, Colorado, Connecticut, Florida, Hawaii, Idaho, Illinois, Nevada, New Jersey, New Mexico, Oklahoma, Pennsylvania, Tennessee, Utah and Washington also criminalize graffiti activity. See Ralph E. Lerner & Judith Bresler, Art Law: The Guide for Collectors, Investors, Dealers, and Artists 947 (2005).
[51] See N.Y. Penal Code § 145.65 (McKinney 2012).
[52] See N.Y. City Admin. Code § 10-117 (2012) (on the defacement of property, possession, sale and display of aerosol spray paint cans, [and] broad tipped markers and etching acid prohibited in certain instances). See also L.A., Cal., Mun. Code ch. 1 § 47.11; Cal. Penal Code § 594; Colo. Rev. Mun. Code § 34-66.
[53] 17 U.S.C § 102a (2013).
[54] See Arthur Miller & Michael H. Davis, Intellectual Property in a Nutshell 294 (2000).
[55] 17 U.S.C. §101 provides that a work is fixed “when its embodiment [. . .] by or under the authority of the author, is sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration.”
[56] Keith Haring started his career painting illegal art in the New York subways from 1980 to 1985. See About Haring, The Keith Haring Foundation, http://www.haring.com/about_haring/bio/index.html (last visited April 6, 2013).
[57] Id.
[58] As per 37 C.F.R. § 201.1(a), “Words and short phrases such as names, titles, and slogans; familiar symbols or designs; mere variations of typographic ornamentation, lettering or coloring; mere listing of ingredients or contents” are not protected under copyright. It should be noted, however, that even despite not being protected by copyright, signatures could potentially be protected by other rules such as trademark law. See Justin Hughes, Size Matters (or Should) in Copyright Law, 74 Fordham L. Rev. 575, 583 (2005) (noting courts have given small pieces of expression intellectual property protection).
[59] 37 C.F.R. § 201.1.(e) establishes: “The following are examples of works not subject to copyright and applications for registration of such works cannot be entertained: [. . .] (e) Typeface as typeface.” See also Eltra Corp. v. Ringer, 579 F.2d 294 (4th Cir. 1978) (holding that the design submitted did not qualify as a “work of art” under the Copyright Law.
[60] Graffiti (left to right): Paul Insect (2008), Banksy (2011).
[61] See 17 U.S.C. § 101 (defining “fixation”).
[62] A period more than transitory duration needs not be more than a few minutes. See Advanced Computer Servs. of Mich., Inc. v. MAI Sys. Corp., 845 F. Supp. 356, (E.D. Va. 1994) (finding that a “random access memory (RAM) representation of copyrighted computer software program is sufficiently ‘fixed’ to be a ‘copy’ protected by Copyright Act when program is loaded from computer’s hard drive to RAM and maintained there for minutes or longer, even though RAM representation of program disappears when the computer is turned off”).
[63] Under 17 U.S.C. § 101, A “work of visual art” is—
(1) a painting, drawing, print, or sculpture, existing in a single copy, in a limited edition of 200 copies or fewer that are signed and consecutively numbered by the author, or, in the case of a sculpture, in multiple cast, carved, or fabricated sculptures of 200 or fewer that are consecutively numbered by the author and bear the signature or other identifying mark of the author; or (2) a still photographic image produced for exhibition purposes only, existing in a single copy that is signed by the author, or in a limited edition of 200 copies or fewer that are signed and consecutively numbered by the author.
A work of visual art does not include–


(i) any poster, map, globe, chart, technical drawing, diagram, model, applied art, motion picture or other audiovisual work, book, magazine, newspaper, periodical, data base, electronic information service, electronic publication, or similar publication;

(ii) any merchandising item or advertising, promotional, descriptive, covering, or packaging material or container;

(iii) any portion or part of any item described in clause (i) or (ii);

(B) any work made for hire; or

(C) any work not subject to copyright protection under this title.

[64] See §101.
[65] Under §101, paintings and drawings should be signed and numbered to be considered a “work of visual art,” and that sculptures should be numbered and bear the signature or other identifying mark of the author.” § 101(1).
[66] Id.
[67] Id. (listing visual forms of art—painting, drawing, print, or sculpture).
[68] Article I, Section 8, Clause 8 of the United States Constitution grants authors the exclusive right to their respective writings. It is codified in 17 U.S.C. § 201(a).
[69] See § 202 (“Ownership of a copyright, or of any of the exclusive rights under a copyright, is distinct from ownership of any material object in which the work is embodied. . . . ”). See also Forward v. Thorogood, 985 F.2d 604 (1st Cir. 1993).
[70] Such is the definition of graffiti in state laws, see supra note 48.
[71] See Banksy Graffiti Can Push Up Property Price, The Sun (October 20, 2010), available at http://www.thesun.co.uk/sol/homepage/features/ 3187949/Banksy-graffiti-can-push-up-property-price.html.
[72] If the graffiti is sold, graffiti artists could potentially benefit from the value they add to others’ property by the doctrine of accession, under which one who has “taken the property of another, and altered it in substance of form by his own labor” that “results in a change in the identity or an increase in the value of the property, the right to the property in its changed condition” may belong to the improver. See American Jurisprudence 2D, Accession and Confusion §1. I thank Columbia Law School students Laura Mergenthal and Jessica Fjeld for this observation. Nevertheless, this doctrine would rarely apply to graffiti, since graffiti is normally not done in good faith and it does not transform the substance of the property to which it is applied.
[73] However, in Los Angeles it is against zoning laws to create graffiti murals even with authorization and on private property. See L.A., Cal. Mun. Code ch. 1 §§ 14.4.2, 14.4.4, 14.4.20, 19.01. These regulations could be considered an unreasonable restriction of the property owner’s rights, and there are local efforts to obtain their repeal. See Los Angeles Mural Ordinance Would Legalize New & Vintage Murals, Huffington Post (December 8, 2011, 6:15 PM), http://www.huffingtonpost.com/2011/12/08/los-angeles-mural-ordinance_n_1137746.html&ei=RTFcT7rlBdObtwec36WFDA&usg= AFQjCNFn7r7x0BX0gqFXgGojHYecCMM-Mg.
[74] One controversial example involving Banksy is his depiction of “a woman in underwear, her jealous husband, and her naked lover dangling from a window ledge,” painted on the wall of a clinic for venereal diseases in Bristol, United Kingdom. The clinic decided to keep the artwork, after a poll conducted by the Bristol City Council in which 93% of people voted in favor of the painting’s preservation. See Arifa Akbar, Art Or Eyesore? Public Asked If Banksy’s Mural Should Stay, The Independent, (June 23, 2006), available at http://www.independent.co.uk/news/uk/this-britain/art-or-eyesore-public-asked-if-banksys-mural-should-stay-405119.html.
[75] Keith Haring illegally painted the “Crack is Wack” mural in a plaza in Harlem, New York City. After Haring’s death, the New York City government embraced the mural and the plaza was renamed “the Crack is Wack Playground.” For a description of the park, see Crack is Wack Playground Highlights, N.Y.C. Parks, http://www.nycgovparks.org/parks/M208E/history (last visited April 6, 2013).
[76] See Wall Painted, supra note 14 (noting wall painted by Banksy sold for £200,000); Liza Ghorbani, The Devil on the Door: Could a Painting on a Dope Dealer’s Storefront Be the Last Work of Jean-Michel Basquiat?, N.Y. Mag. (Sept. 18, 2011) (describing Jean-Michele Basquiat’s door), available at http://nymag.com/arts/art/features/jean-michel-basquiat-2011-9/.
[77] As noted above, New York defines the offense of graffiti: “No person shall make graffiti of any type on any building, public or private, or any other property real or personal owned by any person, firm or corporation or any public agency or instrumentality, without the express permission of the owner or operator of said property.” N.Y. Penal Code § 145.60 (McKinney 2013). Upon first impression, the statute would not appear to permit ex post acceptance. However, as noted elsewhere in this piece, prosecutors would be unlikely to press charges when the victim welcomes the supposed intrusion.
[78] See Baumgart v. Spierings, 86 N.W.2d 413, 415 (WI 1957). Acceptance from the owner could be analogous to “implied consent to trespass,” as a physical analog. Implied consent to trespass occurs when the subject reasonably believes that the property is open to public.
[79] See J. Tony Serra, Graffiti and U.S. Law, in McCormick, supra note 3, at 313; see also L. L. Hanesworth, Are They Graffiti Artists or Vandals? Should They Be Able or Caned?: A Look at the Latest Legislative Attempts to Eradicate Graffiti, 6 DePaul J. Art & Ent. Law 225 (1995–1996); Kelly P. Welch, Graffiti And The Constitution: A First Amendment Analysis Of The Los Angeles Tagging Crew Injunction, 85 S. Cal. L. Rev. 205 (2011). In a separate but related line of arguments, other scholars have justified graffiti as a minor form of rebellion against an unjust government, according to a just war theory criterion. See Daniel J. D’Amico & Walter Block, A Legal And Economic Analysis Of Graffiti, in 23 Humanomics no. 1, 2007, at 29.
[80] Consider political or activist paintings under an oppressive regime, such as the paintings of the Mothers of Plaza de Mayo in the Plaza de Mayo square in Argentina, a sign of protest and remembrance for their children who went missing during the “dirty war.” The paintings have been regarded as legal, given their ties to freedom of speech, and were protected against later overlapping paintings by relatives of military members. See Cruces entre Madres y Pando por las pintadas en la Plaza, Infobae, http://www.infobae.com/politica/368805-0-0-Cruces-Madres-y-Pando-las-pintadas-la-Plaza (last visited April 7, 2013). Also, consider the use of Pixação in Brazil during its military dictatorship in the 1980’s. Pixação is a distinct type of graffiti art that developed in the poor neighborhoods of São Paulo as part of a social protest towards the dictatorship’s economic regime. It was pervasive and actively combated by the Brazilian government. See Simon Romero, At War With São Paulo’s Establishment, Black Paint in Hand, N.Y. Times, January 28, 2012, at A5; François Chastanet, Pixação: São Paulo Signature (2007).
[81] 466 U.S. 789 (1984).
[82] Id. at 806–807 (citing Metromedia, Inc. v. San Diego, 453 U.S. 490, 507–508 (1981) (White, J., plurality opinion)).
[83] See United States v. O’Brien, 391 U.S. 367, 376 (1968). Freedom of speech may be ineffective against anti-graffiti laws if it is considered that these laws may “further[] . . . important or substantial governmental interests,” and those interests are “unrelated to suppression of free expression,” id. at 377; and “the incidental restriction on alleged First Amendment freedom is no greater than is essential to furtherance of that interest.” Id.
[84] Clark v. Cmty. for Creative Non-Violence, 468 U.S. 288, 293 (1984).
[85] Lerner & Bresler, supra note 50, at 901.
[86] 847 F.2d 1045 (2d Cir. 1988).
[87] Id. at 1048.
[88] Id. at 1047. The decision to remove the sculpture was made after a public hearing in which artists, civil leaders, employees at the Federal Plaza complex, and community residents participated. Id.
[89] Id.
[90] Id. at 1049.
[91] Id. at 1045. The court decided to remove the sculpture “[n]otwithstanding that the sculpture is site-specific and may lose its artistic value if relocated.” Id. at 1050.
[92] The law “refuses to lend its aid in any manner to one . . . who has been guilty of unlawful or inequitable conduct in the matter,” because the law seeks to “prevent a party from taking advantage of its own wrong.” 30A C.J.S. Equity § 109 (2013).
[93] It should be noted that any state punishment involving stripping of copyright could create preemption issues. See Garner v. Teamsters, 346 U.S. 485, 498 (1953) (noting that “when two separate remedies are brought to bear on the same activity, a conflict [between state power and federal power] is imminent”). Analogous reasoning leads to the conclusion that to further punish graffiti artists beyond the sanctions imposed by the criminal justice system would disrupt these sanctions’ “fit” to the crime, possibly interfering with the legislative balancing of remedies in the criminal vandalism and civil copyright contexts. It could be objected that, in all unclean hands doctrines involving criminal acts, the infringer receives “additional punishment” when trying to benefit from the illegal act. I do not think this is correct: a successful unclean hands defense is not an additional punishment; rather it is the logical consequence of the same punishment, and thus does not violate the Eighth Amendment. We must remember that unclean hands prevent the plaintiff from benefitting from “inequitable activity regarding the very matter for which he seeks relief.” Mahaffy v. City of Woodson Terrace, 609 S.W.2d 233 (Mo. App. 1980). If the unclean hands defense arises from the very same matter that gave place to the punishment, then there is no additional punishment. See also Mitchell Bros. Film Group v. Cinema Adult Theatre, 604 F.2d 852, 863 (5th Cir. 1979) (quoting Keystone Driller Co. v. General Excavator Co., 290 U.S. 240, 245 (1933)) (stating that “the maxim of unclean hands is not applied where plaintiff’s misconduct is not directly related to the merits of the controversy between the parties, but only where the wrongful acts ‘in some measure affect the equitable relations between the parties in respect of something brought before the court for adjudication’”). In graffiti, it could reasonably be interpreted that a graffiti artist would have unclean hands if he tried to claim rights over the physical graffiti wall (the very matter of his wrongdoing: trespassing or damaging property), but not over the immaterial work in it (based on the clear distinction that copyright law provides between a protected work and its physical embodiment). Under this interpretation, sanctioning the artist by denying copyright protection to him would be a sanction from a different matter, and thus could constitute an additional punishment.
[94] See 17 U.S.C. § 202.
[95] Although in the following examples the infringers were not always criminally prosecuted, there was a potentially criminal charge that could have been raised to introduce an unclean hands defense. Moreover, we can still identify a civil offense in each case. These cases are still helpful to illustrate why an author can obtain copyright over a work even when the act of creation of the work can be considered unlawful. [Note: I believe that it does not matter whether these authors were actually criminally prosecuted as long as they could have been prosecuted: graffiti artists are often not prosecuted, though they could still have been liable.]
[96] See, e.g., Complaint for Plaintiff, Mavrix Photo Inc. v. Allieiswired.com (C.D. Cal. Oct. 12, 2010) (No. 10-7591), where a celebrity photography agency filed for copyright infringement of it picture of pregnant actress Penelope Cruz, which it took without permission. The judge finally dismissed the case without issuing an opinion.
[97] Alison Chang, whose photo taken by her youth counselor was distributed over the Internet and used by Virgin Mobile Australia without her consent, under a Creative Commons License. See Laura A. Heymann, Boundaries Of Intellectual Property Symposium: Crossing Boundaries: How To Write A Life: Some Thoughts On Fixation And The Copyright/Privacy Divide, 51 Wm. & Mary L. Rev. 825, 827 (2009). The counselor held copyright in the picture even though it was unauthorized by Chang and violated her privacy rights. While the photograph might technically have been unauthorized, the counselor uploaded the photo to Flickr and issued a license under Creative Commons. Id. Ultimately the court dismissed the suit for lack of personal jurisdiction without ruling on whether Chang could have asserted an invasion of privacy claim. Id. at 828, n. 10. For a further discussion of the relationship of privacy and copyright, see Susy Frankel, The Copyright and Privacy Nexus, 36 Victoria Univ. Wellington L. Rev. 507 (2005).
[98] Such is the case of journalist Robert D. Novak’s Mission to Niger article in the Washington Post, where he revealed the identity of CIA agent Valerie Plame. Robert D. Novak, Mission to Niger, Wash. Post (July 14, 2013), http://www.washingtonpost.com/wp-dyn/content/article/2005/10/20/ AR2005102000874.html. Novak was finally not convicted, but the reasoning would have been the same if he had been convicted.
[99] See Lerner & Bresler, Art Law, supra note 50, at 907 (citing In re Ryan D., 100 Cal. App. 4th 854 (Cal. Ct. App. 2002)). The juvenile court found that the minor made a criminal threat in violation of section 422 of the California Penal Code, but the decision was reversed on appeal. 100 Cal. App. 4th at 857, 858.
[100] 17 U.S.C. § 103(a).
[101] China has such a provision in Art. 4 of the Chinese copyright law. See Kong Qingjiang, The Doctrine of Ordre Public and the Sino-US Copyright Dispute, 2008 LAWAISA L. J. 34 (2008). Moreover, refusing trademark protection of signs that violate the local public order or morality is permitted by art. 6quinquies(B)(3) of the Paris Convention for the Protection of Industrial Property.
[102] Similarly, the court in Mitchell Bros. Film Group asserted: “The history of content-based restrictions on copyrights, trademarks and patents suggests that the absence of such limitations in the Copyright Act of 1909 is the result of an intentional policy choice and not simply an omission.” 604 F.2d 852, 854 (1979).
[103] 604 F.2d 852 (5th Cir. 1979); see also Jartech, Inc. v. Clancy, 666 F.2d 403, 406 (9th Cir. 1982) (endorsing the Mitchell court’s views).
[104] Id. at 854.
[105] See id. at 863. However, the court cites Lawler v. Gillam, 569 F.2d 1283, 1294 (4th Cir. 1978), a case that was later overruled, so its application should be reconsidered. Moreover, this case bases its quotation in J. Pomeroy, A Treatise on Equity Jurisprudence § 399, while the Mitchell court also says that “an equitable doctrine should not be applied in a way that will frustrate the purpose of a federal statute.” Mitchell, 604 F.2d at 864. Therefore, the requirement of “personal injury” should be carefully evaluated. Indeed, one could envision a regime in which the unclean hands defense would only apply if the artist brought suit against the property owner him or herself. In such a case, the court might reason that the dispute itself arises from the artist’s violation of the law and therefore has not entered the court with “clean hands.”
[106] Id.
[107] “[C]opyright misuse exists when plaintiff expands the statutory copyright monopoly in order to gain control over areas outside the scope of the monopoly. . . . The test is whether plaintiff’s use of his or her copyright violates the public policy embodied in the grant of a copyright.” In re Napster, Inc. Copyright Litigation, 191 F. Supp. 2d 1087, 1103 (N.D. Cal. 2002) (citing Practice Mgmt. Info. Corp. v. American Med. Assoc., 121 F.3d 516 (9th Cir. 1997)).
[108] Mitchell, 604 F.2d at 865 (emphasis added).
[109] In the context of applying the copyright misuse doctrine, such frustration of copyright’s purpose has been understood as “anticompetitive conduct,” Kathryn Judge, Rethinking Copyright Misuse, 57 Stan. L. Rev. 901, 924 (2005), “expansion of rights,” id. at 904, 925 (2005) (“any attempt by the copyright holder to extend the scope of his copyright beyond the exclusive rights granted to him under the Copyright Act,”), “abuse of process,” id. at 928–929 (such as when “a copyright holder uses the implicit or explicit threat of litigation to expand the scope of his monopoly,” for example by “‘advising would-be copiers that they are infringers even when the proposed copy would be a fair use’”) (quoting William F. Patry & Richard A Posner, Fair Use and Statutory Reform in the Wake of Eldred, 92 Cal. L. Rev. 1639, 1654 (2004)), or “principled guidelines,” id. at 930 (“copyright misuse arises when a copyright holder attempts to extend the scope of his copyright if in doing so he crosses certain lines identified as central to copyright policy”). Enforcing copyright in graffiti does not grant the artists broader rights in a work than those intended by copyright law; protecting graffiti may involve criminal and property law concerns, but not copyright-policy related concerns. It is hard to imagine how graffiti could be a misuse that frustrates the particular purposes of copyright.
[110] This could be one explanation for the ruling in Villa v. Brady Publishing, in which the court assumed that a graffiti piece, which was photographed and published in a book without artist Villa’s consent, was copyrightable. Villa v. Brady Publ’g, No. 02 C 570, 2002 WL 1400345, at *3 (N.D. Ill. June 27, 2002). For this point, it is not relevant that vandalism laws are often at the state level, whereas copyright is a federal system. Laws that prevent graffiti and obscenity are both state level, and thus make Mitchell analogous to illegal graffiti cases.
[111] See Stacie Sandifer, Unauthorized and Unsolicited: Is Graffiti Copyrightable Visual Communication?, 12 J.F.K. U.L. Rev. 141, 145 (2009).
[112] In graffiti, the act of fixation is not illegal under copyright law, given that under 17 U.S.C. § 101, fixation only demands “the authority of the author,” but not of the owner of the physical medium containing the work. However, the act of fixation may still be illegal under applicable criminal laws.
[113] The Mitchell court noted, “[L]imiting copyright protection on a broad public injury rationale would lead to absurd and unacceptable results. Unless the public injury rationale is limited . . . to misuses that frustrate the particular purposes of the copyright (or trademark or patent) statute, [the doctrine of unclean hands does not apply].” 604 F.2d at 864. I do not believe that limiting copyright protection based on an individual property owner’s trespass harm could be seen as a sufficiently well-targeted not to create “absurd results” of the type feared by the Mitchell court. Damage to individual property may count only to prevent copyright enforcement against the wall owner (for example, by application of a copyright misuse defense), but not to conclude that the work should receive no copyright protection at all.
[114] See U.S. Const. art. I, § 8, cl. 8.
[115] Owen Morgan, Graffiti – Who Owns The Rights?, Univ. of Auckland Bus. Sch., Working Paper 13 (Sept. 2006). Under a natural-rights based theory, works are protected because they spring from the author’s creation, not because they serve to promote a valuable goal like the progress of science. Id.
[116] See, e.g., Dream Games of Arizona v. PC Onsite, 561 F.3d 983 (9th Cir. 2009), (holding that the illegal operation of a copyrighted work (an electronic bingo videogame that had been offered in Utah and Wyoming where had been ruled to be illegal) did not preclude an award of damages).
[117] “The copyright misuse doctrine permits a court to refuse to enforce a copyright when the copyright owner has engaged in certain types of misconduct, particularly in licensing. If misuse is found, the copyright remains unenforceable until the owner purges itself of the misuse.” Julie E. Cohen, Lydia Pallas Loren, Ruth Gana Okediji & Maureen A. O’Rourke, Copyright in a Global Information Economy 671 (3d ed. 2002). Copyright misuse prevents copyright enforcement but does not denying absolute copyright protection.
[118] In the U.S. Constitution, moreover, the copyright clause is really “two provisions merged into one. The purpose of the first provision is to promote the progress of Science by securing to authors, for limited times, the exclusive rights to their Writings. The word ‘science’ in this context means knowledge in general, which is still one of its meanings today. The other provision is that Congress has the power to promote the Progress of useful arts by securing for limited times to inventors the exclusive right to their Discoveries.” H.R. Rep. No. 1923, 82d Cong. 2d Sess. 4 (1952), in Martin J. Adelman et al., Cases and Materials on Patent Law 18 (1998). This means that, constitutionally, the role of copyright is to promote the progress of science, and the usefulness of the individual works is not evaluated. Usefulness in patent law, moreover, was only originally interpreted as “legality”—i.e., “not . . . frivolous or injurious to the well-being, good policy or sound morals of society”, as Judge Story expressed in Lowell v. Lewis. 15 F.Cas. 1018, 1019 (Cir. Ct., D. Mass. 1817). In later cases, however, it was established that “where the device has several possible uses, of which only one may offend public policy, the courts have been reluctant to conclude that the invention does not possess utility.” See Martin J. Adelman et al.., op. cit., at 183. The same principles could be applied to graffiti art.
[119] Mitchell, 604 F.2d at 855.
[120] Id. at 856.
[121] See Golan v. Holder, 132 S.Ct. 873, 876 (2012) (emphasis added); Eldred v. Ashcroft, 537 U.S. 186, 222 (2004). Copyright engages in what is often called by the court as a “delicate balancing test” where many factors have been taken into account. As John Rawls has noted on the analysis of consequentialist rules, even when a rule is justified on utilitarian grounds, each action under that rule need not be justified also on a utilitarian basis. The reasons for justifying a rule are conceptually independent from the reasons justifying each action falling under that rule. See John Rawls, Two Concepts of Rules, in The Philosophical Review 64 (1955): 3-32.
[122] As graffiti artist Schmoo has expressed, “Many of the more serious writers end up taking all of their writing to the legal yards and walls.” Graffiti expert Susan Farrell explains that “that some of the most detailed and intricate pieces are done on legal walls, where writers can work undisturbed.” See Susan Farrell & Art Crimes, Graffiti Q & A, Graffiti.org, http://www.graffiti.org/faq/graffiti_questions.html (last visited April 7, 2013).
[123] Banksy is a special case because he has created unauthorized works throughout his career. Nevertheless, he is also a paradoxical example because his growth and media attention are closely related to people’s wide acceptance of his works, after they are created. Banksy’s case cannot be generalized.
[124] These artists are more “often motivated by the danger inherent in putting up the piece” than by the prospects of obtaining exclusive rights. Many of them want to share their works fully with the community and reject the idea of copyright. As graffiti experts Marc and Sara Schiller note, “Instilled in these artists is the concept that images and ideas are there to be co-opted, manipulated, and then transferred freely around the world.” McCormick, supra note 3, at 10. In his book Wall and Piece, Banksy expresses that “Copyright is for losers ©™,” despite having asserted copyright over said book. Banksy, Wall and Piece (2005). In the first page of the book, Banksy states, “[A]gainst his better judgment, Banksy has asserted his right under the [UK] Copyright, Designs and Patent Act, 1988 to be identified as the author of this work.” Id. at 1.
[125] One example is Shepard Fairey with his Obey line of works. While Obey started as a sticker and poster street art, today it has grown into a line of collectibles and clothing. See Manifesto, Obey Giant, http://www.obeygiant.com/about (last visited April 7, 2013); Obey Clothing http://obeyclothing.com/ (last visited April 7, 2013).
[126] See supra note 121.
[127] This statement is in line with 17 U.S.C. § 202 (2006).
[128] We could interpret that the artist abandoned the physical work—the graffiti paint on the wall—which the owner of the wall now owns. Therefore, under the first sale doctrine, successive sales of the physical piece would produce no earnings or royalty fees for the artist. 17 U.S.C. §109 establishes that “(a) Notwithstanding the provisions of section 106 (3), the owner of a particular copy or phonorecord lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord.”
[129] See supra note 76.
[130] In July 2011, the new owner of the building that held one of Bansky’s first works painted over it. The owner did not know that the graffiti was Banksy’s and he whitewashed the wall to prepare it for his upcoming Muslim social center. See Banksy’s Gorilla In A Pink Mask Is Painted Over, The Guardian (July 15, 2011), available at http://www.guardian.co.uk/artanddesign/2011/jul/15/banksy-gorilla-mask-painted-over.
[131] Cf. Serra v. United States Gen. Servs. Admin., 847 F.2d 1045 (2d Cir. 1988).
[132] A Banksy mural was removed by artists of the non-profit space 555 Galleries from an abandoned car plant owned by Bioresource Inc. Biosource filed a lawsuit seeking the return of the mural. Moreover, when Banksy’s work “Sperm Alarm” was removed from London’s Hesperia Hotel, the alleged remover was charged with theft. See Anny Shaw, Banksy Murals. This rule would apply only if the graffiti did not violate any further regulations or time/place/manner restrictions, such as zoning regulations (see supra note 73). But see Margaret L. Mettler, Graffiti Museum: A First Amendment Argument for Protecting Uncommissioned Art on Private Property, 111 Mich. L. Rev. 249 (2012) (arguing that private property owners who wish to keep uncommissioned art on their property can successfully claim that graffiti abatement ordinances and sign regulations, as applied, violate their First Amendment speech rights).
[133] See supra note 130.
[134] See U.S. Constitution, art. I, § 8, cl. 8; 17 U.S.C. §201.(a), which grant the copyright to the author. As explained above, the wall owner would have no claim to the copyright, because he did not make any authorial contribution to the graffiti artwork: owning the physical embodiment of a work does not give the owner any title to the copyright. See supra note 68.
[135] § 106(1) (2006).
[136] § 106(2).
[137] § 106(3).
[138] See Villa v. Pearson Educ., Inc., No. 03 C 3717, 2003 WL 22922178 (N.D. Ill. Dec. 9, 2003); Gonzales, supra note 34, at 8; Vartanian, supra note 28, at 7.
[139] § 106(5).
[140] See supra note 69.
[141] See Susan Farrell & Art Crimes, Graffiti Q & A (1994), http://www.graffiti.org/faq/graffiti_questions.html (where graffiti artist Schmoo expresses, “Graffiti is meant to be a public display.”).
[142] See Mitchell 604 F.2d at 24; see also Belcher v. Tarbox, 486 F.2d 1087, 1088 (9th Cir. 1973) (holding “fraudulent content is not a basis for denying copyright protection to a work, and is not a defense to infringement”) (citing Dream Games of Arizona, Inc. v. PC Onsite, 561 F.3d 983, 990 (9th Cir. 2009)). The wall owner, victim of the graffiti crime, could also potentially claim the transfer of any profits derived from the graffiti (even by third parties), as a matter of victim restitution. See N.Y. Exec. Law § 632(a) (McKinney 2011) (under which the victims (or in some cases, the state) obtains a right to any profits or income derived from the wrongful act). However, besides the unclean hands arguments against these potential claims, there is a content-based restriction argument. See Simon & Schuster, Inc., v. Members of New York State Crime Victims Bd., 502 U.S. 105, 512 (1991) (ruling unconstitutional a law that mandated the Crime Victims Board be paid all income from a book on a crime written with the assistance of the criminal, noting the law “ has singled out speech on a particular subject for a financial burden that it places on no other speech and no other income. The state’s interest in compensating victims from the fruits of crime is a compelling one, but the Son of Sam law is not narrowly tailored to advance that objective. As a result, the statute is consistent with the First Amendment.”).
[143] Despite what many photographers—such as Peter Rosenstein—think. See Gonzalez, Walls of Art for Everyone, supra note 19, at 6.
[144] Copyright, Designs and Patents Act, 1988, c. 48, § 62 (U.K.).
[145] Urheberrechtsgesetz, [UrhG] [Copyright Law], September 9, 1965, BGBL. I at 59(1), last amended by Gesetz [G], May 8, 1998, BGBl. I at 59 § 1 (Ger.).
[146] Copyright Act 1994, part 3(63) (N.Z.).
[147] Directive 2001/29/EC, of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society, 2001 O.J. (L 167) art. 5(3)(h).
[148] A similar exception in the U.S. only covers architectural works in buildings; graffiti works fall outside of this exception.17 U.S.C. § 120(a) (2006).
[149] Henry Lydiate, Street Legal, 336 Art Monthly 41, 41 (2010) (defining orphan works as works whose rights-holders are unlocatable); see Robert A. Gorman, Jane C. Ginsburg & R. Anthony Reese, Copyright Cases and Materials 528–29 (8th ed. 2011).
[150] Interview with Jonny Robson, Co-Founder of Graffitimundo, in Buenos Aires, Arg. (December 2011).
[151] See Marisa A. Gomez, Note, The Writing on Our Walls: Finding Solutions Through Distinguishing Graffiti Art From Graffiti Vandalism, 26 U. Mich. J. L. Reform 633, 645 (1993).
[152] See Murals, Graffiti Style, Art Crimes Directory, http://www.graffiti.org/muralists/index.html (last visited Feb. 23, 2013) (compiling a complete list of artists and graffiti local communities); Sara Schiller & Marc Schiller, Wooster Collective, http://www.woostercollective.com/more-about-wooster (last visited Feb. 23, 2013) (showcasing street art).
[153] 17 U.S.C. § 106A (2006).
[154] Christopher Robinson, The “Recognized Stature” Standard in the Visual Artists Rights Act, 68 Fordham L. Rev. 1935, 1935–36 (2000).
[155] 17 U.S.C. §§ 106A(a)(1)–(2) (2006).
[156] §§ 106A(a)(3)(A), (c)(1).
[157] § 106A(a)(3)(B).
[158] § 106A(c)(1).
[159] § 106A(c)(3) (“The rights described in paragraphs (1) and (2) of subsection (a) shall not apply to any reproduction, depiction, portrayal, or other use of a work in, upon, or in any connection with any item described in subparagraph (A) or (B) of the definition of ‘work of visual art’ in section 101, and any such reproduction, depiction, portrayal, or other use of a work is not a destruction, distortion, mutilation, or other modification described in paragraph (3) of subsection (a).”).
[160] English v. BFC & R East 11th St. LLC, No. 97 Civ. 7446, 1997 WL 746444 (S.D.N.Y. Dec. 3, 1997).
[161] Id. at *5.
[162] Id. at *1.
[163] Id. at *2.
[164] Id. at *5.
[165] Several particulars of English seem to have affected the legal outcome more than the court expressed. First, English was preceded by an action brought by a New York gardens preservationist group (to which some of the English plaintiffs belonged) that unsuccessfully sought to enjoin the building’s development on environmental, zoning and real property arguments. See English v. BFC & R East 11th St. LLC, No. 97 Civ. 7446, 1997 WL 746444 at *1, n. 2 (S.D.N.Y. Dec. 3, 1997); In re New York City Coal. for the Preservation of Gardens v. Giuliani, 670 N.Y.S.2d 654 (N.Y. Sup. Ct. 1997). The court seems to have been careful about not applying VARA when the main intentions of the plaintiffs are to stop building development for non-artistic reasons. See English v. BFC & R East 11th St. LLC, No. 97 Civ. 7446, 1997 WL 746444 at *1 (S.D.N.Y. Dec. 3, 1997). Secondly, the murals at stake would not have been destroyed or touched, but instead would have been moved from public site by the construction of the building. Id. at *3. VARA does not prevent modifications which are based on the placement or lighting of a work.
[166] Id.
[167] Id. at *4.
[168] 17 U.S.C. §113(d)(2) (2006).
[169] McCormick, supra note 3, at 51 (“Location is everything; context and content are ultimately the most measurable difference between what is written in the bathroom stall and the profound bravado of more heroic feats [of graffiti].”).
[170] Anny Shaw, Banksy Murals Prove To Be an Attribution Minefield, The Art Newspaper, Feb. 16, 2012, available at http://www.theartnewspaper.com/articles/Banksy-murals-prove-to-be-an-attribution-minefield/25631 (“[T]he artist’s belief [is that] that these works have been executed for the public to view and appreciate . . . [w]e do not condone [their] removal.”)(quoting street art specialist for Bonhams, Gareth Williams).
[171] § 106A(c)(2).
[172] For examples of simple copyright claims over unauthorized works, see those analyzed supra, Section IV.A.
[173] § 106A(e)(2).
[174] See Morgan, supra note 115, at 12–15; Stacie Sandifer, Unauthorized and Unsolicited: Is Graffiti Copyrightable Visual Communication?, 12 John F. Kennedy Univ. L. Rev. 141, 149 (2009).
[175] 17 U.S.C. § 106A(d)(1) (2006) (VARA rights “[e]ndure for a term consisting of the life of the author”); § 507(b) (statute of limitations is three years); N.Y. Penal Code § 30.10.2.(c) (McKinney 2008); N.Y. Penal Code § 145.60 (McKinney 1992). The statute of limitations of a graffiti offense, in New York, for example, where making graffiti is a class A misdemeanor is two years. Id.
[176] See, e.g., English v. BFC & R East 11th St. LLC, No. 97 Civ. 7446, 1997 WL 746444 (S.D.N.Y. Dec. 3, 1997), although this case doesn’t expressly deal with enforcement of rights against third parties.
[177] See supra Section I.
[178] For Schmoo and other graffiti artists’ views on having their graffiti pieces painted over, see Susan Farrell & Art Crimes, Graffiti Q & A, http://www.graffiti.org/faq/graffiti_questions.html (last visited Feb. 23, 2013) (“When you become a writer, you know that your stuff won’t last forever. It is just accepted that either society won’t allow it, or other writers won’t. Battling and competition have been a part of graf [sic.] since its inception . . . [O]n the same note, graffiti is a temporary art form, like improvisational theatre. You take pictures of your pieces to remember them, and share them with other writers, but you know that your piece soon will be gone.”) (quoting Schmoo).
[179] Danysz, supra note 4 at 12 (“In graffiti . . . art, the codes are very precise, shaping a language that has been built over the years and transmitted from one artist to another.”). Artists often do not conceive of their works as static pieces, but as artwork immersed in an artistic dialogue, in which it is highly likely that another artist will come and intervene with their work. Consider, for example, the recent Robbo/Banksy artistic dialogue in the Camden Canal in London. In 1985, Robbo painted one of England’s first and best known graffiti pieces. This piece was later covered by several taggers and damaged by years without repainting; until in 2009, Banksy modified the art on the wall and created a new piece based on Robbo’s. That intervention started an artistic dialogue between both artists, where the artists “bombed” (covered up) each other’s work on the wall over a period of two years. For the evolution of the dialogue as documented on Banksy’s website, see Camden Canal, Banksy, www.banksy.co.uk/QA/camden/camden4.html (last visited April 7, 2013) The dialogue was also covered in detail in the documentary Graffiti Wars (Channel 4 in the United Kingdom 2010).
[180] See Massachusetts Museum of Contemporary Art Found. v. Büchel, 593 F.3d 38, 54 (1st Cir. 2010); Carter v. Helmsley-Spear, Inc., 861 F. Supp. 303, 323 (S.D.N.Y. 1994) (noting case law suggests that the damage to honor and reputation should be interpreted as the “injury or damage to plaintiffs’ good name, public esteem, or reputation in the artistic community”); see also H.R. Rep. 101-514, at 15 (1990), as reprinted in 1990 U.S.C.C.A.N. 6925, 6926 (“The formulation for determining whether harm to honor or reputation exists must of necessity be flexible. The trier of fact must examine the way in which a work has been modified and the professional reputation of the author of the work. Rules 701–706 of the Federal Rules of Evidence permit expert testimony on the issue of whether the modification affects the artist’s honor or reputation.”) (emphasis added). The standard used is not analogous to that of a defamation case, where the general character of the plaintiff is at issue, but rather “the artistic or professional honor or reputation of the individual as embodied in the work that is protected.” 17 U.S.C. § 106A(a)(3) (2006). In this context, the rules of the graffiti community will play a fundamental role in evaluating the affection to honor and reputation. Thus, if the Robbo/Banksy dialogue had taken place in the United States, it could be argued that Robbo could not assert his rights of integrity against Banksy once he consented to the dialogue. VARA’s right to integrity stifles the artistic dialogue to some extent, because the artist will decide if integrity is preferred to the dialogue or vice versa).
[181] 17 U.S.C. § 106A(a)(3)(B) (2006).
[182] Carter, 861 F. Supp. at 325.
[183] Hanrahan v. Ramirez, 1998 WL 34369997 (C.D. Cal. 1998).
[184] Michelle I. Bougdanos, The Visual Artists Rights Act and Its Application to Graffiti Murals: Whose Wall Is It Anyway?, 18 N.Y. L. Sch. J. Hum. Rts. 549, 564 (2002) (citing Hanrahan v. Ramirez, 1998 WL 34369997 (C.D. Cal. 1998) (finding that an anti-drug, alcohol and smoking mural had recognized stature)); see also Robinson, supra note 143, at 1954.
[185] For example, works of artists that are featured in specialized books on graffiti, or that are included in national and international graffiti and street art meetings like the Meeting of Styles, would fulfill the recognized stature requirement. See Meeting of Styles: Frequently Asked Questions, Wall Street Meeting, http://wallstreetmeeting.de/faq-for-your-convinience (last visited April 7, 2013).
[186] See Matilda Battersby, Mr. Brainwash: Banksy’s Street-Art Protégé And His Latest Brainwave, The Independent (August 3, 2012), http://www.independent.co.uk/arts-entertainment/art/features/mr-brainwash-banksys-streetart-protg-and-his-latest-brainwave-8001407.html. This would include works by self-promoted artists, who take pictures of their works and upload them to their websites. In this line, it would be interesting to see if works by self-promoted artist Mr. Brainwash, the controversial protagonist in Banksy’s film, Exit Through the Gift Shop (2010), would be regarded as works of recognized stature if they are not recognized by the community, despite Mr. Brainwash’s fame.
[187] See McCormick, supra note 3, at 313.
[188] U.S. Const. art. I, § 8, cl. 8.
[189] McCormick, supra note 3, at 11.
[190] Banksky, supra note 124, at 10.

The Recent DOJ and FTC Policy Suggestions for Standard Setting Organizations – The Way out of Standard-Essential Patent Hold-Up

The Recent DOJ and FTC Policy Suggestions for Standard Setting Organizations – The Way out of Standard-Essential Patent Hold-Up
By Jonas Hein* A pdf version of this article may be downloaded here.  


“What hasn’t been said about patent hold-up in standard setting organizations (SSO)?” the discerning reader might ask. Since its beginnings[1] the issue has spurred an immense amount of research, has found its way into numerous litigations, and yet still appears to puzzle courts, economists and lawyers.[2] Antitrust agencies all over the world are discussing the problem. In the US, the Department of Justice (DOJ) and the Federal Trade Commission (FTC) are focusing their efforts on reviewing the Intellectual Property Rights (IPR) policies of SSOs. Recently, both Renata Hesse,[3] Deputy Assistant Attorney General at the DOJ, and Joseph F. Wayland,[4] then Assistant Attorney General of the FTC, have introduced policy suggestions aimed at reducing the likelihood of hold-up in the standardization process.[5] This article focuses on three of these suggestions. It argues that while Hesse and Wayland address the crucial issues of standard-essential patent hold-up, they remain precariously vague on pivotal points and overlook important repercussions of their suggestions. Presumably this will leave SSOs in a disturbing haze of uncertainty. Both brevity and my intention to focus on a specific issue prompt me to establish some preliminary assumptions. I assume that patent hold-up does exist,[6] that it results in significant deadweight loss,[7] and that it reduces incentives of market players to invest in standard-specific applications, which are crucial to consumer welfare.[8] Therefore I assume that hold-up can result in inefficient accumulation of market power. Before analyzing the individual suggestions in detail and formulating a conclusion, expedience suggests providing a brief overview of patent hold-up and the standard setting process in SSOs.

I. Patent Hold-Up, Standard-Essential Patents, and Standard Setting Organizations

In Law and Economics the hold-up problem is seen as a form of duress.[9] A party to a contract uses the investment costs its counterpart incurred in reliance on reciprocal compliance as leverage to extract a return higher than the value of its contractual performance. To understand this, consider the following:
Example 1: A has won a machine with which he intends to produce widgets. As it happens, no worker skilled in the use and maintenance of widget machines can be found. Therefore, A agrees to the following: B will undergo widget-machine training that costs $1200 paid by A. Upon completion of this training, B will operate the machine for its entire 12-month durability at a monthly salary of $100. After B has successfully completed the training, he insists on a monthly salary of $199.91 instead.[10]
Here, B is holding up A by expropriating the return of his investment that cannot be recovered (so-called sunk costs).[11] Economists and intuition suggest that, once incurred, sunk costs should not influence a firm’s subsequent economic decisions.[12] A should ignore the costs of the training when comparing B’s offer to alternative strategies. He could either pay B a total wage of $2399 or he could pursue an alternative strategy by paying for training and wage of C, which, absent hold-up, would total $2400. Clearly, A has no rational choice but to accept the offer. Assume that the value of widget operation is the amount A and B agreed upon in the initial agreement, i.e. $100. Then B has extracted a wage that exceeds the market value of his labor by an amount slightly less than the cost of A’s alternative strategy. The specific hold-up problem this paper addresses pertains to the standardization process in SSOs. Standards can be defined as “any set of technical specifications that either provides or is intended to provide a common design for a product or process.”[13] They are especially important for modern, high technology products. For instance, they ensure interoperability and make possible the use of networks, such as mobile telephone networks or the Internet.[14] The pro-competitive benefits of standards are unanimously accepted.[15] Notwithstanding, standardization carries some potentially anticompetitive baggage because it reduces competition to provide consumers with more choice.[16] Standardization processes usually take place in private standard setting organizations, in which competing firms participate as members in a standard’s adoption.[17] For a number of reasons, the existence of SSOs is a conspicuous matter from the point of view of antitrust law.[18] First, they provide a communication forum amongst competitors that arguably facilitates collusion.[19] Furthermore, standardization processes can increase prices for consumers for the sake of other motives, e.g. social utility. For example, the members might agree to standardize certain minimum quality thresholds or eligibility requirements, sparing the consumer low quality goods but depriving them of the choice.[20] Finally, members might also be tempted to impose standards where there is no immediate need for them. This can decrease consumer choice and restrict competition for best designs.[21] Nonetheless, the general desirability of standardization has led to widespread acceptance of SSOs.[22] All that should be noted here is that the legality of the existence of SSOs is not obvious from the perspective of traditional antitrust doctrine. As we will see, this has implications for the limits of SSO policies and bylaws. Now, to understand the type of hold-up relevant to this paper, consider the following:
Example 2: Firms A, B, and C are members of the D-SSO and are seeking to set a standard relevant to mobile phones. Once adopted, B and C, who are manufacturers of mobile phones, invest considerably in production sites, equipment and design of their new cell phones based on the standard. After a while, A discloses that it in fact owns a patent essential[23] to and incorporated by the standard. What will A do?
Quite possibly, A will now demand royalty fees from B and C. This would not be of significance if not for the threat of A obtaining an injunction against the manufacture or sale of the cell phones by B and C. According to the standard view in the literature on patent hold-up, the threat of injunctive relief provides the patent holder with leverage to extract a royalty rate that exceeds the value of the patents’ contribution to the end product.[24] In other words, as in example 1 above, A can potentially extract a royalty rate from both B and C that is slightly below their respective sunk investment costs. On this view, the peculiarities of the standardization process make it susceptible to the misuse of patents and allow for the amplification of the effect of hold-up behavior. SSOs have reacted to this problem by implementing intellectual property rights (IPR) policies that structure the standardization process. These policies include obligations on the members that aim to protect manufacturers and assure uninhibited standard adoption and implementation. Yet, SSOs are confronted with a governance dilemma: the more extensive and effective the policy, the less attractive membership becomes and the lower the willingness of members to provide their efforts and technology to the adoption of a standard.[25] On the other hand, a lax IPR policy can raise serious anticompetitive concerns attracting the attention of antitrust agencies.[26] It is of no surprise then, that SSO IPR policies and their treatment of standard-essential patent hold-up have become central issues for antitrust law.

II. The Policy Suggestions

This section will focus on three of the policy suggestions for SSOs that have been made by both Joseph Wayland and Renata Hesse. It should be mentioned that Wayland and Hesse proposed these suggestions in speeches at international conferences, and thus they carry no binding legal weight. However, because FTC and DOJ enforcement decisions are largely discretionary, market participants will most definitely monitor any public comments made by antitrust officials. The suggestions will therefore likely have an immediate effect on the conduct of SSOs. The following three recommendations will form the basis of my analysis: (I) adopting disclosure requirements, (II) implementing rules concerning the permissibility of cross-licenses, and (III) limiting injunctive relief for patents subject to reasonable and non-discriminatory (RAND) commitments.[27] The analysis will be structured in three steps. After presenting the specific suggestion and explaining its context, the article will identify the problem at its core by skimming relevant literature and case law. Finally, the article will analyze whether the suggestion appropriately addresses the contentious issues. This framework is meant to elucidate the strengths and weaknesses of each suggestion and will lend support for the article’s conclusion.

A. Disclosure

1. The Policy Suggestions
With their first suggestion, Hesse and Wayland propose the adoption of disclosure rules for standardization processes. SSO members are to identify “in advance, if any proposed technology path involves IP which the patent holder has not agreed to license on RAND terms.”[28] Disclosure requirements are not at all new and can vary greatly in their scope and determinateness.[29] Essentially, they require some sort of publication of patents possibly tangential to the technology area of the standard.
2. The Problem
Patent hold-up is more likely to occur where SSO members are imperfectly informed about the existence of patents the adopted standard will be encumbered by. Yet, the patent application process does little to mitigate the issue. Patent applications are kept secret for 18 months after their filing date.[30] This will often allow patent holders to delay disclosure until after the standard is set. It leaves the other SSO members behind a “veil of ignorance”[31] which is only lifted after the “fundamental transformation” of the market has taken place.[32] In other words, while different technologies competed for inclusion before standardization, now competition for substitution is restricted as lock-in[33] and network effects[34] make redesign costly and unprofitable.[35] Moreover, patent law may even incentivize opportunism. A particularly egregious example of this is the divisional application procedure.[36] A divisional patent application is filed after a “parent” application has been filed and is pending. Such applications can “carve out” part of the subject matter of parent applications that encompass more than one invention. The result is, assuming the applications are successful, the grant of two (or more) individual patents by the United States Patent and Trademark Office (USPTO).[37] Alas, patent law considers the effective filing date of this type of subsequent application to be that of the parent application.[38] To understand how a divisional application can be misused in the standardization process, consider the following:
Example 3[39]: Firm B is a member of the D-SSO and is participating in a standardization process. It files an overly broad patent application with the USPTO that pertains to the technology potentially covered by the standard. By including more than one invention in the application, B ensures that it lacks the “unity of invention” condition to patentability.[40] The USPTO will now demand the “application to be restricted to one of the inventions.”[41] Because of its participation in the continuing standardization process, B knows which technology the standard covers. Therefore, B files a “divisional application” that “carves out” this technology from the parent application as an individual invention. Once the patent is granted, B sues its competitors for infringement.[42]
Strikingly, the Federal Circuit has approved the practice of amending a patent application with the intention “to cover a competitor’s product the applicant’s attorney has learned about during the prosecution of a patent application.”[43] Granted, “the new claims must find adequate support in the original application.”[44] Nonetheless, a firm participating in a standard setting process can secretly tailor an original application to encompass technologies it now knows are essential to the standard. Subsequently, it can hold-up competitors locked-in by sunk investments by threatening injunctions in order to procure unreasonable royalty payments.[45] Such conduct has also been the subject of antitrust litigation. In Rambus Inc. v. FTC[46] the court was confronted with a monopolization claim under § 2 of the Sherman Act brought by the FTC against Rambus, a developer of computer memory technologies. The FTC accused Rambus of using its membership in JEDEC, an SSO, to gain “information about the pending standard, and then amend[ing] its patent application to ensure that subsequently-issued patents would cover the ultimate standard.”[47] The court disagreed with the FTC on the monopolization claim. It had not been shown whether absent the alleged deception, JEDEC would either have used a “nonproprietary standard” or extracted a RAND commitment from Rambus.[48] If the FTC could not prove the former, it had only proven deceptive behavior, which in itself did not constitute an antitrust violation.[49] The case shows the vice and virtues of disclosure rules. First, JEDEC had adopted an IPR policy with a disclosure requirement. However, it proved insufficient in the case of divisional patents. In a case brought by one of Rambus’ competitors, the court found the requirement far too imprecise to create an obligation to disclose future plans to “modify applications.”[50] Arguably, had JEDEC’s disclosure requirement been more precise, Rambus would more likely have felt obligated to disclose its pending divisional patent applications. On the other hand, the case also shows that deception itself is not sufficient for a monopolization claim. The court required a showing of a harm “to the competitive process” precisely because of the deception.[51] In light of this, it is conceivable that the mere existence of a precise disclosure rule in a SSO’s IPR policy would not subject all forms of deceptive behavior to antitrust liability. Thus, a proposal to establish disclosure requirements is not surprising. It is consistent with the agencies’ earlier remarks[52] and has been mentioned by scholars as a tool to mitigate hold-up.[53] Rules for disclosure aim to enable participants to weigh the costs of available standardization paths in order to find the most cost-efficient outcome available. In this way they prevent the inefficient acquisition of market power.[54] The question of concern here is: does the policy suggestion address the contentious issues?
3. Analysis
The policy suggestion is, perhaps intentionally, unclear on which mechanisms would be most helpful in confronting patent hold-up. This section will focus on three possible mechanisms.[55]
i. Pure Disclosure Rule
A simple disclosure rule requires SSO members to inform other members of patents relevant to a possible technology path that are not yet subject to a RAND licensing obligation.[56] Such a rule would not however require a member to make specific RAND licensing commitments ex ante. The goal is generally to “minimize the possibility of inadvertent infringement of the IPR.”[57] However, while a pure disclosure rule certainly is helpful in some cases, it falls short of effectively countervailing patent hold-up.[58] Most SSOs have adopted disclosure rules in their patent policies.[59] Yet, as Rambus shows, IPR policies with pure disclosure requirements are often not sufficient to prevent hold-up. Therefore, it is unclear why Wayland and Hesse are stating the obvious, rather than addressing the more pressing questions. Are SSOs concerned about what constraints antitrust law places on the extent and permissibility of further-reaching ex ante disclosure mechanisms?[60] For example, could SSOs require disclosure of maximum royalty rates and most restrictive licensing terms?[61] Is a rule that establishes joint negotiation on licensing terms by SSO members or the SSO itself permissible?[62] The DOJ and FTC have principally accepted both joint negotiation and most restrictive licensing terms and have signaled their intent to apply mere rule of reason scrutiny in the past.[63] Surprisingly however, the suggestions make no mention of them. This silence is striking as it aggravates existing legal uncertainty. Notwithstanding, it seems necessary to assess whether these rules could potentially alleviate the hold-up problem.
ii. Joint Negotiation Rules
A joint negotiation procedure would enable SSO members to collectively negotiate the licensing terms of a patented technology during the standardization process. Such a rule would necessarily accompany an ex ante disclosure requirement as described above. Critics of joint negotiation rules focus on two efficiency concerns: allocative[64] and dynamic efficiency.[65] It is argued that joint negotiation rules could lead to a loss in allocative efficiency resulting from monopsony power[66] on behalf of the licensees.[67] Standard monopsonist models assume a static deadweight loss as the result of a decrease in demand below competitive levels.[68] Yet, Farrell et al. claim that such concerns are not relevant to IP licenses as supply curves in these markets are flat.[69] This is also true for the marginal cost curve of intellectual property, which equals zero.[70] This is because the use of an additional unit is cost-free. It follows that the price of a license is not a function of the buyers’ demand. Therefore, if the use of monopsony power by the jointly acting buyers leads to a reduction of the royalty rate of the patent, the amount of supply will not be affected. The effect of monopsony power is unnoticeable and the relation between demand and supply is much like in a competitive market.[71] The purchase of an additional unit does not affect the price of those already purchased. For antitrust purposes this is important because even if the royalty fee is set at a sub-competitive level on account of monopsony power, this merely leads to “redistribution of surplus from the sellers to buyers.”[72] However, a resource allocation problem, i.e. a decrease in total supply, does not ensue. If this is the case, rule of reason applies and SSOs can provide pro-competitive justifications by proving dynamic efficiencies resulting from joint conduct.[73] Specifically in the case of ex ante joint negotiations, SSOs could allege that they simply reschedule licensing negotiations to occur before lock-in and network effects take hold. In doing so, they mitigate the market power of patent holders and thereby allow for more vigorous price competition before standard adoption.[74] This could decrease royalty rates and lower prices of end products. But in the longer term, monopsony could lead to unsustainably low royalty rates thereby ultimately deterring future innovation.[75] Gregory Sidak claims joint negotiation results in dynamic inefficiencies as soon as it pressures royalty rates to equal marginal cost.[76] Only rates that enable licensors to recoup costs sunk on successful and unsuccessful inventions provide a reasonable incentive for firms to engage in high cost innovation.[77] The defendants in Sony Electronics, Inc. v. Soundview Technologies, Inc. challenged this view.[78] Sony argued that it was in the interest of the buyers of technology to uphold incentives for the innovation their business model depended on. The Court rejected the argument: “[B]usiness conduct is not always rational, and economic actors do not always have access to perfect information, the utopian ideal of economics.”[79] In my view, Sidak raises an important point about the source of patent hold-up. Patent law contains an incentive scheme, which grants an exclusive right to the licensor and allows him to charge whatever rate he can profitably obtain on the market.[80] Arguably, this is a structural flaw of patent law itself. But one should be mindful of modifying normal competitive market mechanisms to alter unreasonable, yet legislatively intended results of patent law. Policies enabling SSO members to collectively negotiate license terms come close to allowing oligopsonist collusion. Such market alterations directly impact the “implicit incentive/access tradeoff” scheme of patent law.[81] The resulting repercussions for dynamic efficiency are unclear. While there are pro-competitive benefits to joint negotiation rules, it seems preferable to support SSO policies that do not interfere with the market’s price system. Beyond that, a reform of patent law would more likely be able to avoid inconsistencies resulting from the prevention of the hold-up phenomenon.
iii. Most Restrictive Licensing Terms Disclosure Rules
These rules impose an obligation on the SSO’s members to make binding commitments ex ante as to the maximum royalty fee and other conditions they will use in licensing contracts.[82] In contrast to joint negotiation rules, they do not necessarily presuppose ex ante disclosure, although such conjunction might be advisable. There are a number of arguments for and against these rules. Obviously, such requirements could lessen uncertainty SSO members face when calculating the future cost of a specific standardization path.[83] Information on maximum rates and conditions could therefore improve the economic quality of standard adoption decisions. Accordingly, such terms could alleviate the probability of welfare losses on account of imperfect information.[84] Also, they could competitively restrain rates patent holders demand ex ante in order to increase the chances for their patent to be included in the standard.[85] Essentially, price competition could ensue before firms are locked into the standard. On the other hand, anticompetitive effects are conceivable.[86] It is argued that information on maximum licensing terms could allow SSO members to pressure patent holders into lowering rates, raising similar dynamic efficiency concerns as discussed above.[87] Moreover, ex ante RAND commitments are often vague and regularly entail costly disputes on their interpretation, specifically when licensors make sham proposals in order to formally fulfill their disclosure commitments.[88] These anticompetitive effects need to be addressed in the antitrust analysis, but the pro-competitive justifications available to SSOs are considerable. Nonetheless, if phrased correctly it seems that most restrictive licensing obligations provide necessary information that inform beneficial calculations and market-based results.
iv. Conclusion
Presumably, the policy suggestion will leave many SSOs disappointed. The agencies do not address the most pressing issues. What is more, the policy suggestion encompasses “any proposed technology path.”[89] Such a wording would leave disclosure obligations dangerously vague and broad. Two consequences should be noted here. First, transaction costs might rise to prohibitively high levels if firms, in order to comply with their obligations, were pressed to provide vast amounts of information. SSO members would need considerable time to review all submitted documents, leading to more lengthy standardization processes. It is also possible that members would be incentivized to be excessively compliant by disclosing a large amount of their patents and thereby further complicating the process. On the other hand, most restrictive licensing restrictions could lessen these incentives. If a firm has made ex ante licensing commitments, over-disclosure would create a risk of granting blanket licenses to all disclosed patents.[90] This might restrict the scope of disclosure to more manageable levels. Thus, a disclosure obligation in conjunction with a most restrictive licensing commitment could be an acceptable IPR policy for SSOs. At any rate, the silence concerning the permissibility of joint negotiations and most restrictive licensing terms revives uncertainty about their antitrust implications. Wayland and Hesse have chosen to make obvious as well as indeterminate statements. Conceivably, this may be detrimental to the standard setting process as SSOs balance the risk of hold-up with the chances of antitrust litigation. These uncertainties might also leave firms reassessing the benefit of further participation in SSOs.[91]

B. Cross-Licenses and Royalty Stacking

1. The Policy Suggestion
Wayland proposes to give licensees “the option to license RAND encumbered patents declared essential to a standard on a cash-only basis and allowing voluntary cross-licensing.”[92] Thus, the suggestion proposes a choice rule. Cross-licensing agreements involve two firms that license a number of their respective patents to each other.[93] Such cross-licenses will often not be a viable strategy for small firms or manufacturers with no particular patent portfolio. Cash-only licenses would seem more appropriate for such firms.
2. The Problem
In order to understand the problem this suggestion addresses, a brief analysis of the vices and virtues of cross-licensing is necessary. The practice of cross-licensing is believed to be a solution to the problem of “royalty stacking.”[94] This phenomenon occurs when a downstream firm[95] produces a product involving a standard, which carries a large number of patents, each owned by different patent holders, i.e. complementary patents. Then, the downstream firm is faced with a “stack” of royalties that it must pay in order to mitigate the risk of infringement litigation.[96] Consider the following:
Example 4: Firm A manufacturers mobile phones. Its newest creation, the Bphone, incorporates many different technologies: a camera, Internet access and wireless data transfer, a touchscreen, sleek casing and so on. All of these technologies incorporate patents owned by various firms. To A, this stack of patents is composed of strict complements, i.e. it needs to acquire licenses for all of them in order to manufacturer the Bphone without risking infringement suits. After its negotiation with all of the patent holders, A realizes that the cumulative royalty payments are so high that an economical production of the Bphone is no longer possible. What has happened?[97]
Economists call the underlying problem here the “Cournot complements” effect. Each patent holder can disregard negative externalities[98] that the royalty rate it charges imposes on the cumulative royalty rate paid by the manufacturer.[99] According to the “Cournot complements” effect, this results in an increase of marginal cost, leading the downstream firm to increase prices and reduce output below a level that would have been set by a vertically integrated monopolist.[100] In effect, these circumstances describe the “individual hold-up problem”: the effects of hold-up are exacerbated the more patents the standard encumbers.[101] Cross-licenses are a market-driven mechanism that can reduce the effects of royalty stacking.[102] However, incentives to cross-license are only prevalent in cases in which various vertically integrated firms hold the patents encumbered by the standard. Such firms can obtain profits with downstream sales, rather than royalties.[103] Hence, it is rational to exchange licenses in order to avoid potential costs of infringement suits. Yet, cross-licensing schemes can also have significant anticompetitive effects. The combined effect of patent hold-up and a strategy of market foreclosure by raising rivals’ costs may have considerable impact on the downstream market.[104] Consider the case where a non-integrated downstream firm faces vertically integrated firms that have all entered into cross-licensing agreements. A single integrated firm can raise the costs of its downstream rivals by simply raising its royalty rates.[105] Once the firm can undercut its rival’s end-product price, market foreclosure ensues. In other words “by restricting the supply available to rivals of a key input without similarly restricting the amount available to satisfy the purchaser’s demand,” the vertically integrated firm can attract consumers to switch to its product.[106] The result is an expansion of its downstream market share to the detriment of its competitors.[107] The situation here is slightly different from the classic models of raising rivals’ costs. These rely on either direct foreclosure by means of control of a bottleneck or a significant portion of market supply or by inducing vertical restraints through collusion on the upstream market.[108] In the case suggested here, the integrated firm’s patent need not represent a major part of the standard technology for the anticompetitive effect to arise. This is because an injunction based solely on this patent would prohibit the production of the entire product.[109] Also, upstream collusion is unnecessary as each patent is in itself essential to the standard. Finally, specifying RAND terms is extremely difficult for the downstream firm when all vertically integrated firms have entered into cross-licensing agreements, essentially excluding any reasonable comparative benchmark.
3. Analysis
By giving licensees the option to demand cash-only licenses and by permitting cross-licenses, the agencies attempt to strike a balance between the pro-competitive and anti-competitive implications of cross-licenses. An SSO policy defining an express claim for cash-only licenses could help downstream firms that are not party to cross-licensing agreements. However, considerable difficulties remain unresolved. A claim for a cash-only license in no way obviates the exercise of hold-up power by upstream firms. On the contrary, cross-license agreements can obscure the incremental contribution of the patent to the standard.[110] Moreover, upstream firms could quickly agree to cross-license in order to inhibit royalty rate negotiations amongst direct competitors. In such a case, a downstream firm would have little to gain by claims for cash-only licenses as it could hardly prove that the fees demanded exceeded RAND requirements. Moreover, cash-only licenses do not prevent the use of raising rivals’ costs strategies by vertically integrated firms in order to cut off downstream competitors from significant market shares. Thus, the implementation of this policy suggestion might result in vertical restraints potentially foreclosing non-integrated downstream firms from the market.

C. Limitation of Exclusion through Injunctions

1. The Policy Suggestion
As was shown in Example 2, injunctions are a central tool of patent hold-up strategies. In line with this, Hesse and Wayland suggest SSOs “[p]lace some limitations on the right of the patent holder who has made a F/RAND licensing commitment who seeks to exclude a willing and able licensee from the market through an injunction.”[111]
2. The Problem
In recent years a great deal has been said about the merits of and conditions for the issuance of injunctions following a finding of patent infringement by courts.[112] The policy suggestion points to the specific situation where a firm has committed to RAND terms in a standardization process. The literature on the relationship of hold-up and injunctions is too abundant to be treated in its entirety. Rather, this section will try to outline the general problem and focus on the two main conflicting positions. Importantly, different standards apply to federal courts and the International Trade Commission (ITC). The discussion is structured accordingly.
i. Injunctions by Federal Courts
Generally, there are two key remedies in patent litigation. First, a court can order an injunction to cease any further conduct in violation of the patent.[113] This remedial measure is essential to upholding the exclusive nature of the patent.[114] However, a court can also issue damages calculated by lost profits of the patentee or, in absence thereof, a “reasonable royalty.”[115] The requirements for ordering injunctions have recently been reviewed. Prior to the Supreme Court’s eBay decision, courts applied Federal Circuit precedent under which a finding of patent infringement triggered an automatic right to injunctive relief.[116] The Supreme Court reversed and pointed to the wording of 35 U.S.C. § 283. It prompted the court below to apply “traditional equitable considerations”.[117] Instead of a per se rule for the granting of injunctive relief, a four-factor test is to be applied by the courts. A plaintiff must now demonstrate “(1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.”[118] Yet, the impact of eBay seems to have been humble. In 2007 Iancu & Nichols argued that “the vast majority of cases continue the traditional pattern of granting permanent injunctions to patentees who have successfully proven infringement.”[119] Other studies have reached similar conclusions.[120] Nonetheless, in some cases, perhaps more than before, injunctions were denied and compulsory licenses granted. As mentioned, injunctions are crucial to hold-up theory. Some argue that even the threat of an injunction can exacerbate the hold-up problem.Shapiro and Lemley claim that by threatening an injunction, the patent owner is likely to achieve a royalty fee that exceeds the marginal contribution of his patent to the total value of the final product.[121] Moreover, to a standard, a single patent is typically only one of many contributions.[122] Hence, the threat of an injunction allows the patent holder to exploit a value extrinsic to his own invention as leverage in royalty negotiations. The authors analyze the proportion of the negotiated rates attributable to hold-up by assuming a threshold royalty rate of θβν, i.e. the rate the patent holder would receive absent hold-up.[123] Here θ is the likelihood that a patent will be found valid. β is the fraction of the total gains a patent holder gets (generally taken to be 50%), ν is the per unit value of the patented feature.[124] They find that for relatively strong patents, the threat of an injunction will lead to a negotiated royalty rate that is twice as high as the benchmark level.[125] Accordingly, if Courts apply eBay, award reasonable royalty rates, and take caution when issuing injunctions, “the hold-up component of negotiated patent royalties will be reduced or eliminated”.[126] Others question the premise of this conclusion. Elhauge claims that the threshold level under appreciates the return necessary to incentivize socially desirable upstream innovation, because it assumes a monopsonistic downstream market.[127] He argues that the benchmark rate deters any innovation the costs of which (I) are I > (θβνX), where X is the number of units sold.[128] This leads to an unsatisfactory outcome. In a case where investment costs of an invention are less than its total value (θνX), it will only be pursued when the investment costs are lower “than β times the expected value of the investment.”[129] Elhauge claims that this result reflects the assumption that it is appropriate for the licensee to extract part of the value (β) of the upstream invention. By including β, the model essentially allows for a monopsonist licensee to hold-up the licensor in reverse. Then, θβν in fact does not assume the absence of hold-up.[130] He proposes a “natural” royalty rate of θν, that is the likelihood that the patent will be found valid multiplied by the per unit value of the patented feature.[131] Notably, the disagreement here lies not in whether issuance of an injunction or threat thereof could lead to higher royalty rates as a matter of fact. Rather, what is disputed is how interests and efficiencies should be balanced.[132] This is a matter of “economics of improvement.”[133] Hold-up theorists argue that the threat of hold-up ultimately leads to socially suboptimal investments by downstream firms and their consequent avoidance of “follow-up innovations.”[134] Their critics view injunctions as a means of the patent system to attribute to the patent holder the return necessary to incentivize innovation on the upstream market. In stressing equitable principles, the Supreme Court has assumed a more narrow interpretation of injunctive relief. This complicates matters for patent holders trying to demonstrate the inadequacy of damages.[135] Particularly, firms that have committed to RAND terms face significant difficulties in this respect, given that they have already committed to license.[136]
ii. Exclusion Orders by the ITC
The ITC is not obligated to follow the eBay mandate.[137] It has jurisdiction over matters relating to Section 337 of the Tariff Act of 1930.[138] Plaintiffs can obtain exclusion orders if they can show that the downstream product infringes “a valid and enforceable United States patent”.[139] An exclusion order effectively shuts down all imports of that product. It is to be granted after the ITC has considered “the effect of such exclusion upon the public health and welfare, competitive conditions in the United States economy, the production of like or directly competitive articles in the United States, and United States consumers”.[140] Unsurprisingly, plaintiffs have increasingly chosen the ITC as their venue of choice for patent infringement claims.[141] A recent case reveals some of the difficulties of exclusion orders where the complainant had made RAND commitments. The complainant, Motorola Mobility, Inc. (MMI), accused Microsoft Corp. of violating five Motorola patents in the design and production of Microsoft’s Xbox 360 video game system.[142] Four of these patents were subject to RAND commitments MMI had made.[143] Microsoft sought to bar the exclusion order by means of equitable estoppel. First, it invoked a RAND defense. It claimed that by committing to license under RAND conditions, a patent holder had essentially forfeited the right of issuance of equitable remedies by the ITC.[144] In response to this, the ITC stated that Microsoft had not shown any precedent “in which a section 337 remedy was foreclosed due to the existence of RAND obligations.”[145] Therefore, the existence of a RAND commitment did not necessarily amount to a waiver of the right to seek equitable or exclusionary remedies. In an attempt to establish the three elements of equitable estoppel under the A.C. Aukerman Co. v. R.L. Chaides Constr. Co. standard,[146] Microsoft first accused MMI of misleading communication, because it had sent assurance to the SSO that it would license under RAND terms. Yet MMI could show that Microsoft had let two letters offering licenses go unanswered, and that MMI had thereby fulfilled its RAND obligation to engage in “good-faith negotiations.”[147] Microsoft in turn contested that the offered rate of 2.25% on the end price was a sham, unreasonable offer.[148] The ITC conceded that the rate offered by MMI “could not possibly have been accepted by Microsoft” and was thereby misleading.[149] In arguing the second element, Microsoft pointedly stated that it relied on MMI’s commitment because both firms benefited from the standardization process, “which depends on reliable and enforceable RAND assurances.”[150] Interestingly, the ITC disagreed. Microsoft had not proven that it had in fact relied on any of MMI’s statements. Because of this, Microsoft was denied equitable estoppel of MMI’s exclusion order. The example shows that the ITC is a potential venue for parties to engage in patent hold-up, even where district courts might not be. Yet, two further conclusions can be drawn. First, the case showcases conduct that could be called “reverse hold-up.” An alleged patent infringer could simply claim that the proposed rates are inconsistent with the RAND commitments and refuse to enter a licensing agreement. Suppose the patent holder has previously resigned the right to get an injunction, as the policy recommendation here suggests. Then it must essentially submit to compulsory damages based on a reasonable royalty as issued by a court. The patent infringer can effectively evade royalty negotiations thereby shifting the burden to the courts. Secondly, as the ITC states, the mere fact that a patent holder has committed itself to license on RAND terms in a SSO, does not prima facie create legally sufficient reliance of the SSO members to be eligible for equitable estoppel. This casts significant doubt on the effectiveness of ex ante RAND commitments.
3. Analysis
With this policy suggestion, the agencies attempt to strike a balance between the acknowledged rights of patent holders and the perceived menace hold-up exerts on the standardization process. After the eBay decision, this policy could more dominantly concern ITC cases. It reflects the view expressed by Microsoft as explained above: when a SSO member commits to license its patents under RAND, it is implicitly relinquishing its right to seek an injunction against those firms willing to agree on RAND terms.[151] This also seems to be the view of the 9th Circuit. It recently expressed doubts whether RAND commitments are consistent with the issuance of injunctions.[152] However, the wording of the suggestion leaves room for less radical solutions, i.e. that the patent holder retains a part of his right to get an injunction. For example, the patent holder could refrain from injunctions until the downstream firm can redesign non-infringing products.[153] Such a rule might be an option for SSOs intending to alleviate the threat of reverse hold-up and its repercussions on dynamic efficiencies on the upstream market. One of the policy suggestions not discussed here could further mitigate this issue: devising arbitration requirements directed to reach agreements on reasonable royalties.[154] In conclusion, the policy suggestion strikes an acceptable balance. Yet, limiting the right to receive injunctions can result in reverse hold-up. As stated above, certain policies might counteract such conduct.

Closing Remarks

Hesse and Wayland have chosen to voice these policy suggestions at a time when the strategic use of patents has reached alarming significance, particularly in the smartphone market.[155] For instance, in June 2012 the FTC issued subpoenas in an investigation of Google’s RAND licensing policies after the company’s acquisition of Motorola.[156] Hopefully, this article has shown where these suggestions provide useful guidance and where they lack necessary precision. Particularly with respect to the disclosure requirement, it is unclear what exactly Hesse and Wayland had in mind. A disclosure rule in conjunction with a most restrictive licensing terms commitment is a balanced way of providing SSO members with adequate information prior to standard adoption. However, joint negotiation rules would interfere with the market’s price system and therefore should not be pursued. Cross-licensing provisions can significantly reduce the Cournot complements effect, but the risk that vertically integrated firms will engage in strategies to raise rivals’ costs must be taken into account. The same is true for the potential lack of available comparative benchmarks for reasonable royalty rates that downstream firms might face when demanding cash-only licenses. Finally, restricting the right to seek injunctive relief addresses the focal point of patent hold-up. However, the possibility of reverse hold-up needs to be duly addressed. This might be accomplished by temporarily barring injunctive relief until the infringing features are redesigned. Clearly the suggestions offered by Wayland and Hesse do not provide definitive solutions to standard-essential hold-up. But it is unlikely that they intended to do so. As has been stated, the actions of the agencies and SSOs can only present part of the solution; eradicating standard-essential patent hold-up completely would inevitably require a legislative reform of patent law.[157]
* LL.M. candidate, NYU School of Law, 2013; First German State Exam, Humboldt University of Berlin and State of Berlin. I would like to thank Vaughn Morrison, Nick Walrath, Dustin Williamson, Josh Baker, David Sullivan, Sabrina Mawani and the staff of the NYU Journal of Intellectual Property and Entertainment Law Journal for their invaluable comments and critique. This paper was written as part of the Antitrust Law and Economics Seminar taught by Prof. Daniel Rubinfield, to whom I am indebted for an insightful and stimulating class. [1] See Robert P. Merges & Richard R. Nelson, On the Complex Economics of Patent Scope, 90 Colum. L. Rev. 839, 865 n. 115 (1990); see generally Oliver E. Williamson, The Economic Institutions of Capitalism: Firms, Markets, Relational Contracting (1987). [2] For an overview of relevant literature until 2009, see Thomas F. Cotter, Patent Hold-up, Patent Remedies, and Antitrust Responses, 34 J. Corp. L. 1151, 1151 nn.1-14 (2009). [3] Renata Hesse, Deputy Assistant Attorney Gen., U.S. Dep’t of Justice, Six “Small” Proposals for SSOs Before Lunch, Remarks Prepared for the International Telecommunications Union Patent Roundtable (Oct. 10, 2012). [4] Joseph F. Wayland, Assistant Attorney Gen., U.S. Dep’t of Justice, Antitrust Policy in the Information Age: Protecting Innovation and Competition, Remarks Prepared for the Fordham Competition Law Institute Annual International Antitrust Law and Policy Conference 5 (Sept. 21, 2012). [5] Id. at 3. [6] For literature arguing the contrary, see Cotter, supra note 2, at 1152 n.7. [7] Deadweight loss is a comparative term. It describes the difference between the total (i.e. consumer and producer) surplus attained in an inefficient market and a market in perfect competitive equilibrium, i.e. the point at which the value a consumer attaches to an additional unit equals the additional cost of production. Such inefficiencies can be caused by any external cost-increasing distortion that inhibits some amount of consumption, e.g. monopolies, taxes or tariffs. See Dennis W. Carlton & Jeffrey M. Perloff, Modern Industrial Organization, 70-72 (4th ed. 2005); Paul A. Samuelson & William D. Nordhaus, Economics, 182-83 (16th ed. 1998). [8] See Joseph Farrell, John Hayes Carl Shapiro & Theresa Sullivan, Standard Setting, Patents and Hold-Up, 74 Antitrust L.J. 603, 632 (2007); see generally, Cotter, supra note 2, at 1152 nn.7-11. [9] Péter Cserne, Duress, in 6 Contract Law and Economics 57, 68 (Gerrit De Geest ed., 2d ed. 2011). [10] For similar examples see Robert Cooter & Thomas Ulen, Law & Economics 345 (6th ed. 2012); Antonio Nicita & Ugo Pagano, Incomplete Contracts and Institutions, in The Elgar Companion to Law and Economics 145, 148-49 (Jürgen G. Backhaus ed., 2d ed. 2005). [11] Robert S. Pindyck & Daniel L. Rubinfield, Microeconomics, 231-32 (8th ed. 2013). [12] Id.; Carlton & Perloff, supra note 7, at 29. [13] Mark A. Lemley, Intellectual Property Rights and Standard-Setting Organizations, 90 Cal. L. Rev. 1889, 1896 (2002). [14] Christine Varney, Assistant Attorney Gen., U.S. Dep’t of Justice, Promoting Innovation Through Patent and Antitrust Law and Policy, Remarks Prepared for the Joint Workshop of the U.S. Patent and Trademark Office, the Federal Trade Commission, and the Dep’t of Justice on the Intersection of Patent Policy and Competition Policy: Implications for Promoting Innovation, 5-6 (May 26, 2010); Damien Geradin & Miguel Rato, Can Standard-Setting Lead to Exploitative Abuse? A Dissonant View on Patent Hold-up, Royalty Stacking and the Meaning of Fraud, 3 Eur. Competition. J. 101, 103-04 (2007). [15] See, e.g., Herbert Hovenkamp et al., IP and Antitrust, An Analysis of Antitrust Principles Applied to Intellectual Property Law § 35.1. (2d ed., 2012); Lemley, supra note 13, at 1900-01. [16] Lemley, supra note 13, at 1900. [17] Hovenkamp et. al., supra note 15, at § 35.1 (stating that standards might also be adopted de facto or by government action). [18] Id. at § 35.2. [19] Id. [20] Id. [21] Id. [22] See Lemley, supra note 13, at 1900. [23] A patent is “essential” to a standard if “there are no alternative ways to implement a particular element of a standard without infringing the protected technology.” Rudi Bekkers & Andrew Updegrove, A study of IPR policies and practices of a representative group of Standards Setting Organizations worldwide, 34 (2012), http://sites.nationalacademies.org/PGA/step/IPManagement/PGA_072197. This definition is not completely convincing, because alternative implementation paths often do exist that allow firms to design around the allegedly infringed patent. Yet, these design alternatives usually will be more cost-intensive than the royalty rates demanded by the patent owner and the firm might not know whether the re-design will itself infringe other patents. See Daniel L. Rubinfield & Robert Maness, Strategic Use of Patents: Implications for Antitrust, in Antitrust, Patents and Copyright: EU and US Perspectives, 85, 89 (Francois Leveque & Howard Shelanski eds. 2005); see Mark A. Lemley & Carl Shapiro, Probabilistic Patents, 19 J. Econ. Persp. 75, 82 (2005). [24] Cotter, supra note 2, at 1160-61 (citing Mark A. Lemley & Carl Shapiro, Patent Hold-up and Royalty Stacking, 85 Tex. L. Rev. 1991, 1992-93 (2007)). [25] See Bekkers & Updegrove, supra note 23, at 4; Joseph Scott Miller, Standard Setting, Patents, and Access Lock-in: RAND Licensing and the Theory of the Firm, 40 Ind. L. Rev. 351, 353 (2007) (detecting in this dilemma a “tension between free access and tight control.”). [26] See Bekkers & Updegrove, supra note 23, at 4. [27] What exactly “RAND” means in the ambit of standardization processes is the matter of some discussion. For a good overview and further literature, see generally Miller, supra note 25, at 355-59 (stating that “by making this promise all the participants who own patents in the resulting standard grant the adopter community an irrevocable right to use its patented technology to comply with the standard in exchange for a reasonable royalty and other reasonable terms, the details of which are negotiated later without any possibility of a court injunction.”). [28] Wayland, supra note 4,at 5; see Hesse, supra note 3, at 10. [29] See Bekkers & Updegrove, supra note 23, at 48-49. [30] 35 U.S.C. § 122(b) (2006). This is the result of the American Inventors Protection Act of 1999 that sought to prevent the existence of so-called “submarine patents.” Before, applications were kept secret until the issuance of the patent. This lead to duplicative research by inventors unaware of the pending application that now were potentially infringing the issued patent. See Janine M. Mueller, An Introduction to Patent Law 25 n.73, 53 (3d ed. 2009). [31] Miller, supra note 25, at 366-67 (citing John Rawls, Theory of Justice 136-142 (1971)). [32] Williamson, supra note 1, at 61-63 by which is meant “what was a large numbers bidding condition at the outset is effectively transformed into one of bilateral supply thereafter. See, e.g., Rambus, Inc., FTC Docket No. 9302, Opinion of the Comm’n 3 (Aug. 2, 2006), available at http://www.ftc.gov/os/adjpro/d9302/ 060802commissionopinion.pdf. [33] “Lock-in” describes a situation in which the alteration of a given situation is uneconomical for an actor on account of switching and other transaction costs. Therefore, it “hinders customers from changing suppliers in response to (predictable or unpredictable) changes in efficiency, and gives vendors lucrative ex post market power over the same buyer in the case of switching costs (or brand loyalty), or over others with network effects.” Joseph Farrell & Paul Klemperer, Coordination and Lock-In: Competition with Switching Costs and Network Effects, in 3 Handbook of Industrial Organization 1968, 1970 (abstract) (Mark Armstrong & Robert Porter eds., 2007), available at http://www.nuff.ox.ac.uk/users/klemperer/ Farrell_KlempererWP.pdf (found in Farrell et al., supra note 8, at 617 n49). [34] Also called “positive network externalities,” network effects refer to the increase of the individual value of a product in response to the growth of its purchase by others. See Pindyck & Rubinfield, supra note 11, at 135. In standardization processes, this means that the increased value of the product for the individual consumer due to network effects directly corresponds to an increase in the leverage power of the standard-essential patent holder vis-á-vis the alleged infringers; see Farrell et al., supra note 8, at 616. [35] See Farrell et al., supra note 8, at 607; George S. Cary, Mark W. Nelson, Steven J. Kaiser & Alex R. Sistla, The Case for Antitrust Law to Police the Patent Hold-up Problem in Standard Setting, 77 Antitrust L. J. 913, 914 (2011); Andreas Klees, Das Missbrauchsverbot für Beherrschende Unternehmen, in Computerrechts-Handbuch, ch. 1, pt 6, ¶ 75 (Wolfgang Kilian & Benno Heussen eds., 2012). [36] See 35 U.S.C. § 121 (2006). [37] See Mueller, supra note 30, at 55-56; Lester Horwitz, Patent Office Rules and Practice 201.06 (8d ed., 2003). [38] 35 U.S.C. § 120 (2005) (“Benefit of Earlier Filing Date in the United States“); see Mueller, supra note 30, at 45-46; Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law, ¶ 712a (3d ed. 2008). [39] See Areeda & Hovenkamp, supra note 38, at ¶ 712b. [40] Jon W. Henry, Some Comments on “Independent and Distinct” Inventions of 35 Usc 121 and Unity of Invention (Part i), 84 J. Pat. & Trademark Off. Soc’y 745, 777 (2002) (citing 37 C.F.R. 1.141(a) (2006)); see also Mueller, supra note 30, at 56 (“A patent may claim only a single invention, so any other invention must be “divided out” and claimed in a separate application.”). [41] A so-called “restriction requirement,” 35 U.S.C. § 121 (2005). [42] What is important to keep in mind is that if B had filed a first application after adoption of the standard, the standardized technology would be considered prior art and subsequently denied on account of the “novelty” requirement of 35 U.S.C. § 102 (2006). [43] Kingsdown Med. Consultants, Ltd. v. Hollister Inc., 863 F2d 867, 874 (Fed Cir 1988); Areeda & Hovenkamp, supra note 38 at ¶ 712a n.7. [44] Areeda & Hovenkamp, supra note 38 at ¶ 712n n.7. [45] Areeda & Hovenkamp, supra note 38 at ¶ 712b. [46] See Rambus Inc. v. F.T.C., 522 F.3d 456 (D.C. Cir. 2008); Areeda & Hovenkamp, supra note 38 at ¶ 712b. [47] Areeda & Hovenkamp, supra note 38 at ¶ 712b. [48] Rambus Inc., 522 F.3d at 462; Areeda & Hovenkamp, supra note 38 at ¶ 712b. [49] Rambus Inc., 522 F.3d at 464; Areeda & Hovenkamp, supra note 38 at ¶ 712b. [50] Rambus Inc. v. Infineon Tech. AG, 318 F.3d 1081, 1102 (Fed. Cir. 2003). It criticized JEDEC’s disclosure policy as containing “a staggering lack of defining details (. . .).” In fact, it found no express obligation of disclosure within JEDEC’s patent policy. Areeda & Hovenkamp, supra note 38 at ¶ 712b. [51] Rambus, 522 F.3d at 465 (citing NYNEX Corp. v. Discon, Inc., 525 U.S. 128, 136, 139 (1998)); id. at 466 (distinguishing Broadcom Corp. v. Qualcomm Inc., 501 F.3d 297 (3d Cir. 2007)) (“To the extent that the ruling (which simply reversed a grant of dismissal) rested on the argument that deceit lured the SSO away from non-proprietary technology [. . .] it cannot help the Commission in view of its inability to find that Rambus’s behavior caused JEDEC’s choice; to the extent that it may have rested on a supposition that there is a cognizable violation of the Sherman Act when a lawful monopolist’s deceit has the effect of raising prices (without an effect on competitive structure), it conflicts with NYNEX.”). [52] See Letter from Thomas O. Barnett, Assistant Attorney Gen., U.S. Dep’t of Justice, to Michael A. Lindsey, Esq., Dorsey & Whitney LLP (April 30, 2007) (on file with Department of Justice), 9-10; Letter from Thomas O. Barnett, Assistant Attorney Gen., U.S. Dep’t of Justice, to Robert A. Skitol, Esq., Drinker, Biddle, and Reath, LLP (Oct. 30, 2006), (on file with Department of Justice) 9; R. Hewitt Pate, Assistant Attorney Gen., U.S. Dep’t of Justice, Remarks at EU Comp Workshop, Competition and Intellectual Property in the US: Licensing Freedom and the Limits of Antitrust (June 3, 2005), 10; Rambus, Inc., FTC Docket No. 9302, Opinion of the Comm’n 4 (Aug. 2, 2006), available at http://www.ftc.gov/os/adjpro/d9302/ 060802commissionopinion.pdf. [53] Lemley, supra note 13, at 1904; Farrell et al., supra note 8, at 624; Gil Ohana, Marc Hansen, Omar Shah, Disclosure and Negotiation of Licensing Terms Prior to Adoption of Industry Standards: Preventing Another Patent Ambush?, 24 Eur. Competition L.R. 644, 646 (2003); David J. Teece & Edward F. Sherry, Standards Setting and Antitrust, 87 Minn. L. Rev. 1913, 1938 (2003). [54] See Farrell et al., supra note 8 at 609. [55] For a variety of possible disclosure and licensing rules in IPR policies, see generally Bekkers & Updegrove, supra note 23. [56] Sew, e.g., ETSI Rules of Procedure § 6.4 (2008), available at http://www.etsi.org/WebSite/document/Legal/ETSI_IPR-Policy.pdf. [57] NFC Forum, Inc. Intellectual Property Rights, 1 (2004), available at http://www.nfc-forum.org/join/join_thanks/NFC_Forum_IPR_POLICY.pdf. [58] Bekkers & Updegrove, supra note 23, at 98. [59] Lemley, supra note 13, at 1904. [60] See Farrell et al., supra note 8, at 626; John J. Kelly & Daniel L. Prywes, Safety Zone for the Ex Ante Communication of Licensing Terms at Standard-Setting Organizations, Antitrust Source (Mar. 2006), 1; see also Barnett (2007), supra note 52, at 4. [61] The VITA patent policy included this rule. Barnett (2006), supra note 52, at 4; Cotter, supra note 2, at 1202; Farrell et al., supra note 8, at 631. [62] E.g., Cotter, supra note 2, at 1202; Farrel et al., supra note 8, at 632. [63] Cotter, supra note 2, at 1202-3; Barnett (2006), supra note 52, at 8, 9 n.27; U.S. Dep’t of Justice & Fed. Trade Comm’n, Antitrust Enforcement and Intellectual Property Rights: Promoting Innovation and Competition, 52 (2007). [64] “The use of economic resources that produces the maximum level of satisfaction possible with the given inputs and technology.” Samuelson & Nordhaus, supra note 7, at 744. [65] An economy is dynamically efficient if it not only ensures current, static efficiency benefits, but also long-term benefits, such as innovation. J. Gregory Sidak, Patent Hold-up and Oligopsonistic Collusion in Standard-Setting Organizations, 5(1) J. Comp. L. & Econ. 123, 141 (2009). [66] For a good explanation of monopsony power and monopsonist buyers, see Pindyck & Rubinfield, supra note 11, at 385. [67] Sidak, supra note 65 at 142; see Cotter, supra note 2, at 1202 n.282. [68] Roger D. Blair & Jeffrey L. Harrison, Antitrust Policy and Monopsony, 76 Cornell L. Rev. 297, 303 (1991); Pindyck & Rubinfield, supra note 11, at 382-84; see Farrell et al., supra note 8, at 632 (“The classic danger associated with collective negotiation is that, in order to depress prices, buyers collectively (facing an upward-sloping supply curve) will choose a smaller quantity than would be efficient or than they would individually.”). [69] Farrell et al., supra note 8, at 632; Hillary Greene, Non-Per Se Treatment of Buyer Price Fixing in Intellectual Property Settings, 2011 Duke L & Tech. Rev. 4, ¶ 31-32 (2011); Sidak, supra note 65, at 151-160. [70] Greene, supra note 69, at ¶ 31. [71] See Sidack, supra note 31, at 155-56, who accepts this premise if output represents the number of licenses, but calls the observation “trivial” because it doesn’t focus on the ramifications for dynamic efficiencies; see also Carlton & Perloff, supra note 7, at 57. [72] Greene, supra note 69, at ¶ 31. [73] See Cotter, supra note 2, at 1202-1203. [74] For ex ante group negotiations, see, e.g., U.S. Dep’t of Justice & Fed. Trade Comm’n, supra note 63, at 52. [75] Richard Schmalensee, Standard-Setting, Innovation Specialists, and Competition Policy, 24-25 (April 30, 2009), available at SSRN: http://ssrn.com/abstract=1219784; see also Greene, supra note 69, at ¶ 36. [76] Sidak, supra note 65, at 157. [77] Id. at 158; Sidak’s argument rests on his understanding that patent hold-up, if it exists, is merely a legitimate means to reap the benefits of the legally awarded position of exclusivity. Cotter, supra note 2, at 1204. As mentioned above, I presuppose the existence of patent hold-up for the purpose of this paper. [78] Sony Elecs., Inc. v. Soundview Tech., Inc., 157 F. Supp. 2d 180, 185 (D. Conn. 2001). [79] Id. at 186. [80] See Cotter, supra note 2, at 1205; Geradin & Rato, supra note 14, at 102, 111. The incentive argument has also been brought up by the Supreme Court, when it stated that “the opportunity to charge monopoly prices” attracts “business acumen”. Verizon Commc’ns, Inc. v. Trinko, 540 U.S. 398, 407 (2004). [81] Cotter, supra note 2, at 1205 (“As long as patent law allows patentees to charge whatever the market will bear for their technology, joint conduct aimed to lower that price interferes with patent law’s implicit incentive/access tradeoff.”). [82] See Bekkers & Updegrove, supra note 23, at 94. [83] See Knut Blind et al., Directorate Gen. for Enter. & Indus. of the Eur. Comm’n, Study on the Interplay between Standards and Intellectual Property Rights,25 (Apr. 2011), available at http://ec.europa.eu/enterprise/policies/european-standards/standardisation-policy/policy-activities/intellectual-property-rights/index_en.htm). [84] Geradin & Rato, supra note 14, at 137–38; Schmalensee, supra note 75, at 27; U.S. Dep’t of Justice & Fed. Trade Comm’n, supra note 32, at 54; Letter from Thomas O. Barnett, Assistant Attorney Gen., U.S. Dep’t of Justice, to Michael A. Lindsey, Esq., supra note 52, at 10; Bekkers & Updegrove, supra note 23, at 95. [85] Bekkers & Updegrove, supra note 23, at 95. [86] For a full study, see Blind et al., supra note 83. [87] Damien Geradin & Anne Layne-Farrar, The Logic and Limits of Ex Ante Competition in a Standard-Setting Environment, 3 Comp. Pol. Int. 79, 103 (2007); Blind et al., supra note 83, at 26. [88] See, e.g., Certain Gaming & Entm’t Consoles, Related Software, & Components Thereof, Inv. No. 337-TA-752, 2012 WL 1704137, at *167 (USITC Apr. 23, 2012) (Initial Determination) (discussed infra C.III.2.b). [89] Wayland, supra note 4, at 9. [90] Mark A. Lemley, Ten Things to Do About Patent Hold-up of Standards, 47 B.C. L. Rev. 149, 157 (2007). [91] Lemley, supra note 13, at 1959. [92] Wayland, supra note 4, at 9. [93] U.S. Dep’t of Justice & Fed. Trade Comm’n, supra note 63, at 57; for an interesting description of the process, see Blind et al., supra note 83, at 74; Hovenkamp et. al., supra note 15, at § 34.2. [94] Geradin & Layne-Farrar, supra note 87, at 94; Mark A. Lemley & Carl Shapiro, Patent Hold-up and Royalty Stacking, 85 Tex. L. Rev. 1991, 2014 (2007). [95] This term simply refers to firms that manufacture goods, i.e. firms that are at the supply-end of the production process. Carlton & Perloff, supra note 7, at 406. [96] Lemley & Shapiro, supra note 94, at 1993. [97] Damien Geradin, Anne Layne-Farrar & A. Jorge Padilla, The Complements Problem Within Standard Setting: Assessing the Evidence on Royalty Stacking, 14 B. U. J. Sci. & Tech. L. 144, 146 (2008). [98] A negative “externality occurs when consumers or firms do not bear the full cost from the harm their actions do to others. Pollution is one of the most important examples of a negative externality.” Carlton & Perloff, supra note 7, at 82. [99] Geradin et al., supra note 97, at 145-46. [100] Lemley & Shapiro, supra note 94 at 1993; Geradin et al., supra note 97, at 146. [101] Lemley & Shapiro, supra note 94, at 2011; Geradin et al. supra note 97, at 154. [102] See Geradin et al., supra note 97, at 165-66; Carl Shapiro, Navigating the Patent Thicket: Cross Licenses, Patent Pools, and Standard Setting, 1 Innovation Pol’y & the Econ. 119, 130 (2001). Another possibility by which to achieve this aim is creating patent pools. Id. at 134. [103] See Geradin et al., supra note 97, at 166. This solution is of no surprise as it is well known from the problem of “vertical double marginalization,” an effect that also plays into the royalty stacking problem displayed here. Double marginalization occurs when both upstream and downstream firms exert their market power resulting in a double markup. The remedy to the problem is often seen in vertical integration. See Carlton & Perloff, supra note 7, at 419; Klaus M. Schmidt, Licensing Complementary Patents and Vertical Integration 5 (Ctr. for Econ. Studies & Ifo Inst. for Econ. Research, Working Paper, Nov. 2006), available at http://ssrn.com/abstract=944169. [104] On the theory of this form of exclusionary conduct, see Rubinfield & Maness, supra note 23, at 87; Thomas G. Krattenmaker & Steven C. Salopp, Anticompetitive Exclusion: Raising Rivals’ Costs To Achieve Power over Price, 96 Yale L.J. 209 (1986). [105] Schmidt, supra note 103, at 6. [106] Krattenmaker & Salopp, supra note 104, at 230. [107] Rubinfield & Maness, supra note 23,at 87; Krattenmaker & Salopp, supra note 104, at 230. [108] Krattenmaker & Salopp, supra note 104, at 234-42. [109] See Farrell et al., supra note 8, at 638. [110] See id. [111] Hesse, supra note 3, at 11. [112] See Farrell et al., supra note 8, at 638; Cotter, supra note 2, at 1160; Lemley & Shapiro, supra note 94, at 1993; Carl Shapiro, Injunctions, Hold-Up, and Patent Royalties, 12 Am. L. & Econ. Rev. 280 (2010); Lemley, supra note 90; Mark A. Lemley & Philip J. Weiser, Should Property or Liability Rules Govern Information?, 85 Tex. L. Rev. 783 (2007); Einer Elhauge, Do Patent Hold-up and Royalty Stacking Lead to Systematically Excessive Royalties?, 4 J. Comp. L. & Econ. 535 (2008); Miller, supra note 25, at 366-67. [113] 35 U.S.C. § 283 (2005). [114] Mueller, supra note 30, at 482. [115] 35 U.S.C. § 284 (2005). [116] Richardson v. Suzuki Motor Co., 868 F.2d 1226, 1247 (Fed. Cir. 1989) (“It is the general rule that an injunction will issue when infringement has been adjudged, absent a sound reason for denying it.”). There have been exceptions to this rule only if beneficial to public health and welfare. Mueller, supra note 30, at 483-84. [117] eBay Inc. v MercExchange, L.L.C., 547 U.S. 388, 393-94 (2006); see also Cotter, supra note 2, at 1174. [118] eBay, 547 U.S. at 391. [119] Andrei Iancu & W. Joss Nichols, Balancing the Four Factors in Permament Injunction Decisions: A Review of Post-eBay Case Law, 89 J. Pat. & Trademark Off. Soc’y 395, 404 (2007). [120] Rachel M. Janutis, The Supreme Court’s Unremarkable Decision in eBay Inc. v. MercExchange, L.L.C., 14 Lewis & Clark L. Rev. 597, 604 (2010) (citing Douglas Ellis, John Jarosz, Michael Chapman & L. Scott Oliver, The Economic Implications (and Uncertainties) of Obtaining Permanent Injunctive Relief After eBay v. MercExchange, 17 Fed. Cir. B.J. 437, 441-42 (2008)) (finding that injunctions were issued in 28 out of 36 cases); Benjamin Petersen, Injunctive Relief in the Post-eBay World, 23 Berkeley Tech. L.J. 193, 196 (2008) (finding that injunctions were issued in 24 out of 34 cases). [121] E.g., Lemley & Shapiro, supra note 24, at 1993; Farrell et al., supra note 8, at 638; see Shapiro, supra note 112, at 283; see also Lemley & Weiser, supra note 112, at 787 (claiming “injunctive relief . . . can increase the value of an entitlement and make a holdout strategy possible”). [122] Farrell et al., supra note 8, at 638. [123] Shapiro, supra note 112, at 289. [124] Id.; Lemley & Shapiro, supra note 94, at 1999; see generally Elhauge, supra note 112, at 538-42 (providing background to understand the implications of the findings). [125] Shapiro, supra note 112, at 289, 296-97 (reflecting strong value of the patented feature, versus a lower rate for a relatively weak patent). [126] Id. at 308. [127] Elhauge, supra note 112, at 541. [128] Id. [129] Id. [130] Id. at 542. [131] Id. [132] Cotter, supra note 2, at 1168. [133] Id. [134] Id. at 1164. [135] Julie Brill, Comm’r Fed. Trade Comm’n, The Intersection of Patent Law and Competition Policy, Keynote Address at the University of Colorado Law School, 5 (Oct. 3, 2012), available at http://www.ftc.gov/speeches/brill/121003patentip.pdf. [136] Id. [137] Id. [138] 19 U.S.C. § 1337 (2006). [139] 19 U.S.C. § 1337(a)(1)(B)(i), (d)(1). [140] 19 U.S.C. § 1337(d)(1). [141] Brill, supra note 135, at 5. [142] Certain Gaming & Entm’t Consoles, Related Software, & Components Thereof, Inv. No. 337-TA-752 at *2-4. [143] Id. at *159. [144] Id. at *162. [145] Id. at *163. [146] A.C. Aukerman Co. v. R.L. Chaides Constr. Co., 960 F.2d 1020, 1041 (Fed. Cir. 1992) (“[1] The actor, who usually must have knowledge of the true facts, communicates something in a misleading way, either by words, conduct or silence. [2] The other relies upon that communication. [3] And the other would be harmed materially if the actor is later permitted to assert any claim inconsistent with his earlier conduct.”). [147] Certain Gaming & Entm’t Consoles, Related Software, & Components Thereof, Inv. No. 337-TA-752,at *167. [148] Id. [149] Id. at *168. [150] Id. at *170. [151] Brill, supra note 135, at 5; see Wayland, supra note 4, at 4; Hesse, supra note 3, at 10; Jon Leibowitz, Chairman, Fed. Trade Comm’n, Remarks at Georgetown Law Global Antitrust Enforcement Symposium, 9 (Sept. 19, 2012), available at http://www.ftc.gov/speeches/leibowitz/ 120919jdlgeorgetownspeech.pdf; cf. Third Party United States Fed. Trade Comm’n Statement on the Public Interest at 5, Certain Wireless Commc’n Devices, Portable Music & Data Processing Devices, Computers & Components Thereof, Inv. No. 337-TA-745 (USITC June 6, 2012), available at http://www.ftc.gov/os/2012/06/1206ftcwirelesscom.pdf. [152] See Microsoft Corp. v Motorola, Inc., 696 F.3d 872, 885 (9th Cir. 2012) (“injunctive relief against infringement is arguably a remedy inconsistent with the licensing commitment.”). [153] See Shapiro, supra note 112, at 308 (proposing courts grant stays pending redesign). [154] Hesse, supra note 3, at 10; Wayland, supra note 4, at 9. [155] See generally Charles Duhigg & Steve Lohr, The Patent, Used as a Sword, N.Y. Times, Oct. 7, 2012, at A1 (explaining recent developments in patent litigation). [156] Steve Lohr, Widening Scrutiny of Google’s Smartphone Patents, N.Y. Times, Oct. 9, 2012, at B1. [157] Shapiro, supra note 102, at 126.

Part of the Team: Building Closer Relationships Between MLB Teams and Independent Agents in the Dominican Republic through an MLB Code of Conduct

Part of the Team: Building Closer Relationships Between MLB Teams and Independent Agents in the Dominican Republic through an MLB Code of Conduct
By Dustin Williamson* A pdf version of this article may be downloaded here.  


Every year in the Dominican Republic, hundreds of boys enter baseball academies run by one of Major League Baseball’s (MLB) franchise teams.[1] While there, the players pursue baseball with a single-minded passion, with drills, games, and other instructional activities from dawn until dusk.[2] Competition is fierce, and many players take performance-enhancing drugs to better their chances of advancing within the system.[3] The dream of every player is to be sent to the team’s farm system in the United States and from there to be called up to the major leagues, where many Dominican players, including the New York Yankee’s Robinson Cano and the Boston Red Sox’s David Ortiz, have gone on to make millions of dollars. The reality of the situation, however, is much less glamorous. Over the last decade, only two percent of players signed out of the Dominican Republic made it to the major leagues.[4] That means that for every Cano or Ortiz, there are 50 players who never even make the League’s minimum salary. While academies provide shelter and a salary for the athletes, only an exceptional few provide an educational component beyond some basic English classes and classes on American culture.[5] This means that when the vast majority of these athletes, who have devoted their lives to baseball, eventually wash out of the academy system after two or three years, they are thrown back into the working population with little education and no transferrable skills to show for the years they spent playing baseball.[6] The situation is exacerbated by the treatment that players receive before they even get to the MLB academies. In the Dominican Republic, potential baseball players are cultivated as early as their preteen years by independent handler-agents known as buscones.[7] Children represented by buscones may be encouraged (or possibly coerced) to drop out of school in order to focus on baseball full time.[8] Most buscones operate independent baseball academies, which, unlike the MLB academies, may not provide any education outside of that needed to develop as a baseball player.[9] And again in contrast to the official academies that are overseen by MLB and governed by MLB rules, (insofar as the latter provide any guidance) the buscón-run academies receive little oversight. Given the young age at which many athletes join unofficial academies, not only are they deprived of secondary education, but potentially primary education as well. While MLB does not contract with buscones or have any official connection with the independent camps, MLB, with its network of official academies and scouts throughout the Caribbean, is the only significant outlet for players produced through this system.[10] This article proposes that, given the type and scope of labor rights violations that occur as a result of MLB’s presence in the Dominican Republic, MLB should promulgate a voluntary corporate code of conduct to govern the relationship between MLB and buscones in the Dominican Republic. In Part I, I explain the differences between the recruitment processes for players in the United States, the United States’ territories, and Canada, who are covered by the draft, and for players from the rest of the world, who are signed through international free agency. I then explain the practical effects of international free agency on how MLB operates in the Dominican Republic. In Part II, I draw an analogy between the academy system in the Dominican Republic, which produces MLB players, and a multinational corporation’s (“MNC”) supply chain. I then use this analogy to identify potential labor and human rights violations that may occur in the Dominican Republic as a result of the system that produces MLB players. In Part III, I introduce the example of corporate social responsibility as a movement under which MNCs have made efforts to self-regulate both their behavior and the behavior of their suppliers, through corporate codes of conduct. In Part IV, I examine the unique features of MLB and how these features affect the potential scope and shape of a code of conduct. In Part V, I examine specific aspects of a code of conduct that could be implemented, including a licensing program for buscones and independent academies. While at least one commentator has suggested an MLB code of conduct that would govern behavior in the Dominican Republic academies, I argue that a strict, penalty-based code of conduct would likely be counterproductive. A licensing program with a commitment to dialog instead of punishment might have a better chance of positively affecting the lives of young baseball players. Central to my argument is the recognition that, while MLB may contribute to labor law violations in the Dominican Republic, it also spends a substantial amount of money in the country. Additionally, players who “make it” in in the major leagues typically send some part of their earnings back to their families and communities in the Dominican Republic. As such, any solution should encourage cooperation between MLB, the teams, buscones, and the Dominican government, instead of punishing players or forcing teams to leave the Dominican Republic if violations are found. In Part VI, I discuss the problem of applying pressure to MLB to adopt a corporate code of conduct for the Dominican Republic.

I. The Selection of Players and Its Effect on the Dominican Republic

A. Major League Baseball Recruiting

The Major League Rules (MLR) governs the method by which MLB teams recruit baseball players.[11] Under the current rules, teams wishing to sign players who are not already within the MLB system must abide by the draft rules for players from the United States, Puerto Rico, and Canada, or by a different set of rules for international players who are not covered by the draft. Under Rule 3 of the MLR, players who are residents of the United States, Puerto Rico, and Canada are subject to the amateur draft[12] held every June.[13] Players who are eligible for the draft cannot bargain for the best deal that they can reach with any team; rather, teams pick individual players during successive rounds of drafting. MLB supplies suggested signing bonuses for different draft slots. The slotting system is not binding, and the most eagerly sought after players often garner signing bonuses far above the suggested value.[14] Players who do not sign with the team that drafted them are prohibited from signing with a different team but may enter the draft again in the future.[15] This often occurs with players who are just out of high school and would rather go to college before signing with a team, or players who are already in college and would either like to wait for a better offer in the future or finish college. The most significant restriction on draft eligibility is that teams may not draft players who are currently in high school.[16] In addition, although teams may sign high school graduates, they are typically prohibited from signing college players until after their junior year.[17] The NCAA and other university regulatory systems may also require teams to abide by additional rules when dealing with college players. Therefore, although there are a few players who sign when they are as young as 17, most players are adults, and a large portion have at least a couple of years of junior college or university education when they sign with an MLB team.[18] Players from the rest of the world are not subject to the draft, but instead are signed as international free agents. The MLR puts few restrictions on how such players are signed. The main restriction is the 17-year-old rule, which prohibits teams from signing international players younger than 17.[19] Even under this rule, a player may be signed when they are 16, so long as they will turn 17 by the end of the current baseball season.[20] Under this system, teams may bid against each other for a player’s talents; though if a player is relatively unknown, a team may be the only one to make an offer.[21] In addition to the MLB’s 17-year-old rule, the country from which the player is drafted may impose additional restrictions on MLB recruitment. For instance, in Japan, another country with a developed professional baseball league, an MLB team wishing to sign a player must pay the player’s team a substantial sum even to open negotiations with the player.[22] The Dominican Republic, on the other hand, does not have its own professional league, nor does it have independent requirements supplemental to the 17-year-old rule. This means that players from the Dominican Republic are usually lesser known than players coming out of other countries MLB teams target, such as Japan and South Korea. Given the lack of regulation, the chance of finding an underexposed player, and the economic conditions, which lead to lower bonuses and salaries for Dominican players, teams are highly motivated to scout the Dominican Republic for cheap players.

B. MLB in the Dominican Republic

MLB scouting in the Dominican Republic is run out of each team’s baseball academy. Once signed by an MLB team, the vast majority of players, whether signed through the draft or as an international free agent, spend years honing their skills in the team’s minor-league affiliates, spread throughout the United States.[23] Most players from the Dominican Republic begin by playing for up to three years at the MLB team’s academy before even being called up to the United States to play in the minor leagues. Currently, 28 out of the 30 MLB teams run a baseball academy in the Dominican Republic.[24] It has been estimated that MLB has invested more than $75 million in the Dominican Republic and created more than 2,000 jobs in the country.[25] Players in the academies are signed according to the 17-year-old rule. In the past, teams may have hidden younger players at academies and then signed them when eligible; this practice allowed them to avoid having to bid against another team for the player’s services and kept the signing bonus owed to the player much lower.[26] This type of subterfuge may not be as much of a problem as it once was, since under the current rules teams may only allow an unsigned player to remain at an academy for a month.[27] On the other hand, given deficiencies in the Dominican Republic’s record keeping system, players younger than the signing age may routinely be admitted to academies under a false birth certificate.[28] In a highly publicized case, it was discovered that employees of the Los Angeles Dodgers falsified records to sign the Dominican baseball player Adrian Beltre, who was found to have been 15 when he signed with the team.[29] As a result, MLB shut down the Dodger’s academy in the Dominican Republic for a year.[30] Conditions at the camps vary. While some may be relatively luxurious, others are more spartan.[31] When journalists first reported on the academies, they found the facilities to be overcrowded and lacking in basic medical facilities—resembling prisons more than athletic training facilities.[32] Today, even on the low end, the academies are much improved, though there are exceptions. After visiting the Chicago Cubs academy for a 2010 article, Time magazine reporter Sean Gregory gave the following account of the facility:
At the Cubs academy one hazy afternoon, 10 prospects piled into a room that, at best, could comfortably fit two or three. There were four bunk beds crammed into the space; two kids napped while sharing a mattress on the floor. Several players said they all lived in that room. I snapped a picture of the scene and showed it to Sandy Alderson, the veteran baseball executive who was tapped by MLB commissioner Bud Selig earlier this year to clean up the sport in the D.R. He said the conditions were “not acceptable,” though he later insisted that not all 10 prospects actually lived in that room and that players sometimes sleep on the floor because it’s cooler. Still, he stood by his “unacceptable” assessment. It’s difficult to disagree with a Dominican man who also saw the scene. “It looked like f______ county lockup,” he said.[33]
In most academies there is little to do besides play baseball. Players in the academies get up, have breakfast, and are on the field by 7:30; other than a lunch break, they practice until the sun goes down.[34] Competition within the camps is fierce. Given the lower cost of signing and training Dominican players, teams are able to take a “quantity over quality approach,” signing a large number of players for the same price it would have cost to sign a single American player.[35] Because the investment in most Dominican players is small, teams are more concerned with finding a diamond in the rough than developing talent.[36] Consequently, only about two percent of academy players ever make it to the American major league system.[37] The small percentage of players who make it to America through the minor leagues and onto an MLB team will be able to provide for themselves, their families, and their communities, even if they only play in the majors for a short period, since the league minimum salary is high. For instance, in 2011, players who made the league minimum were paid $400,000 for the season.[38] By comparison, the per capita GDP in the Dominican Republic is $8,300,[39] and 34.4% of the country lives below the poverty line.[40] Therefore, the players’ incentive is to gain any advantage they can over other players. This includes pushing themselves to their physical limits day after day. It may also include hiding injuries—and thereby exacerbating them—for fear of being cut from the academy.[41] The pressure to succeed may also lead to the use of performance-enhancing drugs.[42] Such drugs both exacerbate the risk of immediate injury and can contribute to life-long health problems.[43] At most camps, the only supplemental education that the participants receive are classes in basic English and classes designed to prepare athletes for life in the United States,[44] although some camps have partnered with local schools.[45] A few camps provide educational facilities on site.[46] When compared with the astronomical salaries paid to MLB players, the cost of running an educational program is small. In 2010, the Pittsburg Pirates, MLB’s poorest team, spent only $75,000 to run its educational program, a partnership with a local provider that offered high school classes to the athletes in its Dominican academy.[47] Before players ever get to an academy, most spend time either at an independent camp or under the control of a Dominican agent, known as a buscón.[48] A buscón is similar to an agent in that he or she represents unsigned Dominican players in negotiations with a team that wishes to sign the athlete. However, instead of representing a player for a span of his professional career, a player’s relationship with a buscón ends when he is signed by an academy.[49] The player receives a signing bonus; the buscón takes a percentage cut; and the relationship is severed.[50] While players younger than 16 may occasionally make it into an MLB academy because of forged papers, buscones routinely recruit players as young as 10 or 12.[51] These children may drop out of school and enter the custody of the buscón.[52] Instead of completing compulsory education, which in the Dominican Republic is 8 years,[53] these children spend their formative years developing their baseball skills with the sole goal of being signed by an MLB academy. Unlike the MLB camps, which are regulated to some extent by the league through its office in Santo Domingo,[54] the buscones and independent academies have no substantive supervision. Simply put, the Dominican Republic has not made it a priority to regulate the system that places Dominican youths with teams in MLB, an organization that has made significant capital investments in the country.[55] Therefore, the worrisome behavior that may occur at an MLB academy, including overwork and the use of performance-enhancing drugs, is rampant throughout the domestic system that produces players.[56] Likewise, problems that may occur less frequently in the MLB system, such as players younger than 16 taking part in the academies, are a fact of life in domestic Dominican baseball.[57] Exacerbating all of these problems is the fact that a buscón has no financial stake in a player once he has signed with an academy. Therefore, a buscón may not care about players’ long-term health or ability to play baseball for any length of time after leaving their care.

II. Potential Labor and Human Rights Violations: An Analogy to a Multinational Corporation Supply Chain

A. Overview

While it may seem unfair in some general, moral sense that MLB academies do not provide transferrable skills for many of the players that pass through their gates, by itself, this treatment is not that much different from how any minor league player is treated; most players wash out of baseball before making it to the majors and without ever making significant money.[58] The major difference between the treatment of players in the Dominican Republic and in the United States is that while most U.S.-born players will enter professional baseball with at least a high school education,[59] the combination of the rules governing the signing of international players and the Dominican Republic’s poor education system, leads many young players to drop out of school at a much earlier age. Since there is no domestic professional baseball,[60] the only reason these children take up baseball (either willingly or because they are coerced by a buscón or parent) is the hope of being signed by an MLB team. Because MLB is the dominant employer of Dominican baseball players who take up baseball with the aim of playing professionally, we should establish a legal duty that runs from MLB to the players to protect the labor and human rights of Dominican players inside official MLB academies, as well as children who have not signed but have spent their childhood preparing for the opportunity, under a buscón’s care. While it may be difficult to bring a legal claim based on the duty, the existence of one would provide labor and human rights advocates leverage to convince MLB to better regulate their behavior. Any solution must also take into account MLB’s large investment in the country and the fact that those players who are signed, especially those who eventually make major league salaries, typically send a large percentage of their earnings to their families and communities.[61] The first step is to identify the ways in which MLB owes an obligation to protect labor and human rights. Then, Part D will identify, which, if any, labor and human rights standards have been violated.

B. Is This Labor At All? An Analogy to the Multinational Corporation Supply Chain

In the globalized economy, MNCs operate across national borders. While the international scope of economic activity is nothing new, globalized MNCs exhibit a cohesiveness that prior forms of international economic activity did not.[62] As described by Gary Gereffi, globalized supply chains may be divided into two types – “producer-driven” and “buyer-driven” global commodity chains:[63]
Producer-driven commodity chains are those in which large, usually transnational, manufacturers play the central roles in coordinating production networks . . . . This is characteristic of capital- and technology intensive industries such as automobiles, aircraft, computers, semiconductors, and heavy machinery. Buyer driven commodity chains, on the other hand, refer to those industries in which large retailers, marketers, and branded manufacturers play the pivotal roles in setting up decentralized production networks in a variety of exporting countries, typically located in the third world. This pattern of trade-led industrialization has become common in labor-intensive, consumer goods industries such as garments, footwear, toys, handicrafts, and consumer electronics. Tiered networks of third world contractors that make finished goods for foreign buyers carry out production. Large retailers or marketers that order the goods supply the specifications.[64]
In a buyer-driven commodity chain, companies often receive goods or services from many low-level suppliers, or through an intermediary.[65] While a lead firm may have a contract with some of its suppliers, those suppliers, in turn, deal with their own constellation of lower-level suppliers.[66] At the lowest end, or in very small shops, individuals supply piecemeal work to other unregulated firms—some within a lead firm’s chain, but often supplying to many different firms.[67] While a lead firm may have a direct relationship with some other firms on the supply chain, it likely does not know that the firms on the lowest end even exist, let alone have a contractual relationship with them.[68] Typically, even if an MNC would like to do so, lead firms have a difficult time policing the bottom rungs of their supply chain.[69] However, as I show in the following sections, through the advent of corporate codes of conduct, MNCs have developed a system to attempt to regulate the behavior of their suppliers, as well as those their suppliers buy from. MLB shares characteristics with both producer-driven and buyer-driven supply chains. At higher levels, such as in MLB’s minor leagues, or even the MLB-owned academies in Latin America, MLB teams are directly responsible for molding the growth of their potential major leaguers, even though that development is relegated to a lower rung of the organization. In this way, MLB teams can be seen as producer-driven: a central entity coordinating its disparate production network.[70] The independent academies and the demand for cheap players from the Dominican Republic (and other parts of Latin America) lends this arrangement an aspect of the buyer-driven supply chain, in which MLB teams “buy” players. However, even though this arrangement may, at first glance, resemble the bottom rung of a buyer-driven supply chain, there are aspects of the relationship between MLB and the buscones that run the independent academies that may allow us to categorize these academies as entities analogous to a subsidiary branch of the MLB. While MLB teams do sign players from these independent academies, the players are neither raw recruits nor fully formed baseball players. Unlike a buyer-driven supply chain, in which the producers at the lowest rung produce textiles or shoes,[71] players produced by the independent academies are not fungible; MLB teams must scout players at the independent academies, deal directly with buscones, and decide which players to sign.[72] Finally, as noted earlier, MLB’s presence in the Dominican Republic is responsible for the development of the independent academy system.[73] Although the MLB teams do not have a contract with the buscones, similar to low-level suppliers in a buyer-driven supply chain, the actual teams operate in the Dominican Republic and deal directly with the buscones and players in the independent academies.[74] As such, MLB’s relationship with the bottom rung is, in some ways, more like a producer-driven supply chain and is certainly a closer relationship than a typical MNC with its suppliers in a buyer-driven supply chain.[75] The lack of a contractual relationship and the fact that buscones operate according to their own prerogatives may prevent us from defining the independent academies as subsidiaries of MLB as a legal matter, but the analogy to a supply chain would lend legitimacy to a movement to pressure MLB to adopt a code of conduct for dealing with buscones. Even if independent academies can be analogized to the bottom rung of a supply chain, can the activities performed by Dominican players be defined as labor in such a way that it would be recognized under international labor and human rights standards? In the case of athletes who enter the official academies, this question is easily answered in the affirmative. Quite simply, the players in the official academies are employees as defined by common law master-servant agency principles,[76] and accordingly, the employment relationship is subject to the international laws described in the proceeding section, which apply to employment conditions. Under agency law, although no one factor is determinative, the issues to consider when determining whether someone is an employee include the following:
[T]he skill required; the source of the instrumentalities and tools; the location of the work; the duration of the relationship between the parties; whether the hiring party has the right to assign additional projects to the hired party; the extent of the hired party’s discretion over when and how long to work; the method of payment; the hired party’s role in hiring and paying assistants; whether the work is part of the regular business of the hiring party; whether the hiring party is in business; the provision of employee benefits; and the tax treatment of the hired party . . . .[77]
In the case of the official MLB academies, these factors weigh heavily in favor of classifying the players as employees. The players sign contracts with the individual teams, receive pay for the time spent playing and training at the academy, and while there, are under the control of the staff of the academy.[78] However, as noted in the previous section, while there may remain a problem within the official academies, MLB understands that they bear some responsibility to the players in those academies. The argument about the regulation of official academies is an argument over the scope, not the existence of a duty. The independent academies, on the other hand, are a substantively different problem. It is not immediately clear that what the players at these academies do is labor in a traditional sense, despite the long hours and physical toll that life in the academy may have on their bodies. Although many have argued that the activity of amateur college athletes constitutes labor and should be covered by U.S. labor and employment law,[79] unlike college athletes, players in independent academies do not play for revenue generating teams. Just because one trains to become a baseball player does not automatically qualify that activity as labor. Millions of children spend substantial amounts of time practicing an athletic or artistic skill; whatever obligations the parent(s) of a young oboe player owes the child, it would be a stretch to argue that international labor standards apply to teenage musicians’ practice regimes. Similarly, although attending school may require a good deal of work in the form of studying, writing papers, and taking tests, that activity is not labor; rather, it is a personal investment in cultivating skills that will lead to a better job than one could get without such education. However, the role of the buscones in the independent academies lends a unique feature to the situation that is not present in typical training programs; the children in the academies spend their time training to become the player that is produced by the academies, from which the buscones make their living.[80] Unlike the intensive training that takes place under the tutelage of, say, a gymnastics or swimming coach in the United States, the buscones receive their money when the player signs with a team, not upfront from a parent whose child is an Olympic hopeful. Buscones make a living by training players and then taking a cut of the player’s signing bonus or receiving a finder’s fee for their services.[81] While the time at which the trainer receives her money might seem like a semantic distinction, under the master-servant principles enumerated above, this distinction militates in favor of treating the young athletes under the care of a buscón as servants and thus employees. If a parent sends his child to an independent academy, as opposed to paying to board their child with a coach, the food, shelter, and training provided by the buscón is a form of payment for the athlete’s services. The fact that not every child under the buscón’s care eventually makes it to an MLB team makes this more like a traditional employment relationship than some sort of deferred payment scheme for the training that the athletes receive, since the buscón pays out whether or not the athlete makes him money. If one views the room, board, and potential stipend as payment, the rest of the factors for determining whether the athletes under the buscón’s care are employees weigh in favor of categorizing them as such.[82] The athletes train on facilities controlled by the buscones; the relationships can exist from the time the athletes are in their preteens until they are signed by an MLB academy; the type and extent of training is dictated by the buscones; and, the buscones are in the business of training players, from which they make their living.[83] Also, the temporal difference likely has a large effect on how the child athletes are treated. While children under both a traditional coach and a buscón may be pressed to their physical limit, a coach also has a stronger incentive to maintain her reputation. If, for instance, word gets out that a coach treats the athletes under her care poorly, she may lose customers. Similarly, if a parent discovers that her child is being neglected in favor of another athlete, that parent may simply find another coach. The buscón’s incentives, on the other hand, only run towards getting the largest signing bonuses for the athletes under his care. This means he is likely to push a large number of athletes whose skills are on the margins to the breaking point in search of the handful that have the talent and training necessary to sign with an MLB academy.[84] A parent may object to the treatment of players, but given the poverty and lack of education in the Dominican Republic, they may feel they have little choice other than to send their children to train with the buscón who gives them the best deal.[85] This feature further highlights the particularly coercive and controlling nature of the buscón-athlete relationship under the master-servant analysis. Because there is no other significant outlet for the training the players receive at the academies, the academies operate as the de facto bottom rung of MLB’s supply chain, analogous to very low-level manufacturing on an integrated supply chain that ultimately provides players—as both goods and laborers—to MLB teams. Since the players produce themselves and the buscones make a living off of those players, it is sufficiently analogous to labor to be so understood when determining whether the regulated party, in this case the buscones, is violating international human rights and labor laws. Although independent academies and the buscones who run them are similar to typical low-level suppliers in some ways, such as their lack of contracts with MLB, there are ways in which they are different that would make it easier for the league to regulate them. Unlike low-level manufactures that supply goods to MNCs, either to a number of MNCs or a large supplier of goods, independent academies only supply MLB teams and the number of players “sold” is small.[86] Agents of the teams must scout the players represented by a buscón and come to an agreement with both the player and the buscón.[87] As described above, the connection in this regard has elements of a production-based supply chain, in which the MNC is more finely attuned to the behavior down the supply chain.[88] This means that the connection between MLB and the independent academies, despite the lack of a legal contract, may be much tighter than that between a supplier of widgets and the MNC that eventually buys them, thereby making it more feasible to regulate than it would be in a scenario in which hundreds of micro manufacturers ship fungible products to the next step up the supply chain.[89]

C. Sources of Potentially Applicable Labor and Human Rights Standards

Given the fact that under an analogy to an MNC supply chain, MLB may owe a duty to child athletes in independent academies, the next step is identifying the duties that MLB and the Dominican Republic may have under international law, as well as potential violations of such duties. Although I am not advocating bringing a claim before an international body, especially given the fact that the duty owed by MLB is only analogous to a typical MNC supply chain, sources of international law serve as a reference point for corporate codes of conduct developed under a corporate social responsibility model.
1. International Labor Organization (ILO)
The International Labor Organization (ILO) promulgates conventions that set international labor standards.[90] Both the United States and the Dominican Republic are members of the ILO.[91] Countries that ratify any given convention are obligated to make the convention a part of their national law.[92] However, in addition to voluntary ratification, in 1998 the ILO adopted the “Declaration of Fundamental Principles and Rights at Work.”[93] In the declaration, the ILO noted that the following are fundamental rights: “(a) freedom of association and the effective recognition of the right to collective bargaining; (b) the elimination of all forms of forced or compulsory labour; (c) the effective abolition of child labour; and (d) the elimination of discrimination in respect of employment and occupation.”[94] Whether or not a country has ratified the conventions underlying the fundamental rights, they “have an obligation arising from the very fact of membership in the Organization to respect, to promote and to realize, in good faith and in accordance with the Constitution, the principles concerning the fundamental rights which are the subject of those Conventions.”[95]
2. UN Convention of the Rights of the Child
In 1989, the UN General Assembly adopted and opened for ratification the Convention of the Rights of the Child.[96] The Convention covers a broad spectrum of rights tailored to the specific needs and dangers present for developing, non-autonomous children, covering such topics as child labor,[97] education,[98] and health and safety.[99] Both the United States and the Dominican Republic have ratified the Convention without reservation.[100] The UN Committee on the Rights of the Child oversees compliance with the Convention.[101] The countries that have ratified the Convention are required to prepare reports documenting their compliance.[102] In addition, NGOs are allowed to file “alternative reports” with the committee if they believe the government’s report is not an accurate reflection of the conditions for children in the country.[103]

D. Potential Violations

1. Child Labor
One of the ILO’s core tenets is the prohibition of child labor, including the Minimum Age Convention (No. 138),[104] to which the Dominican Republic is a signatory.[105] The fundamental convention sets the minimum age for employment at 15.[106] However, there is an exception for countries “where the economy and educational facilities are insufficiently developed,” in which case the minimum allowable working age is 14[107] (13 for light work).[108] The Dominican Republic ratified under the exemption.[109] No matter which standard governs the Dominican Republic, if official MLB academies admit children under the age of 14, either because the children lie about their age or are taken in without a contract, the team’s actions would violate the treaty. Although there may be ambiguity as to whether players in unofficial academies are employees, players in the official academies undoubtedly are, as they receive a salary and the MLB academies are an extension of their respective team’s minor league system. However, it appears such violations are isolated, and if not accidental, then at least not flagrantly willful either.[110] If we extend the earlier analogy of the independent academy as a small firm, at the domestic level there may be widespread violations of the child labor standard.[111] Although baseball may be a game and buscones would likely dispute the characterization of their young charges as employees, these independent agents make their living by “producing” baseball players for the official MLB academies. In such a situation, to the extent that the production of players results in conditions that would violate the convention, it makes sense to apply the convention to the players as a means of regulating the buscones. Therefore, in instances where a Dominican player is under the age threshold and is primarily pursuing baseball as a career—instead of playing in a school or recreational league as an ancillary matter to attending school—under the above conception of the domestic Dominican baseball industry as the bottom rung of a multinational supply chain, that activity is sufficiently analogous to employment to be a violation of the Minimum Age Convention.
2. Education
The UN Convention of the Rights of the Child (Article 28)[112] and the UN Declaration of Human Rights (Article 26)[113] raise education to the level of a human right. The right to education is a human right with a labor rights connection since it puts a laborer in a better position to realize her other rights, whether human, labor, political, or economic. The declarations and conventions call for compulsory primary education and insist on the right to secondary education.[114] Other than in the rare instance in which a player would use deception to get into an MLB academy, it does not appear that the academies directly violate the right to education by taking players of an age that the international and regional communities declare should otherwise receive primary education. And while there might be pressure to drop out of high school to attend an academy, it does not appear that athletes are, strictly speaking, required to do so. On the other hand, the presence of the MLB academies is the sole reason for the existence of the domestic baseball training system. In the domestic system, there is no doubt that children are dropping out of school to pursue playing baseball in the academies.[115] The buscones and independent academies that take in young children and prevent them from going to school directly violate the child’s right to education. The players that are then lucky enough to be signed by an academy often arrive without the requisite education. The players that are not signed by MLB academies are returned to the labor market with very little education—not even the rudimentary English skills taught in most MLB academies.[116] Although the Dominican Republic requires nine years of compulsory education, it is clear that most children do not receive the required level.[117] Therefore, the argument could be made that the independent academy system does not make the situation any worse in the Dominican Republic than it would be without such a system. However, even if most participants in baseball academies might drop out in any event, the academies arguably violate the right to education by providing a reason for doing so. This argument is made stronger in cases in which it would be impossible or at least incredibly difficult, given the time commitment, for children both to train at a buscón-run facility and to finish compulsory education. As outlined above and developed further below, I believe MLB should bear responsibility for the actions further down the player production chain as the party ultimately responsible for the existence of the buscones and independent academies.
3. Health and Safety
The ILO has promulgated standards regarding occupational health and safety.[118] Although the Dominican Republic has ratified some health and safety standards for particularly dangerous employment sectors, such as construction,[119] it has not ratified broader, cross-industry standards.[120] While academy athletes do not toil under life-threatening working conditions, they may be at risk of preventable injuries, and may not receive adequate care for the injuries they do receive (perhaps just getting cut from the program instead of receiving any treatment for injuries). Likewise, to the extent that steroid use is under regulated, it presents health and safety concerns. Given the fierce competition and the all-or-nothing stakes, despite a testing program, players appear to abuse steroids in high numbers.[121] As with any of the potential violations noted in this article, the violations are likely worse and more pervasive in buscón-run independent academies. Since the buscón has no economic commitment to the players outside of the bonus they receive—a relationship that is severed the moment the buscón gets his cut of the bonus—some may actively promote steroid use or otherwise disregard player’s injuries and long-term health.[122] More broadly, Article 32 of the UN Convention of the Rights of the Child recognizes the right of children to be “protected from economic exploitation and from performing any work that is likely to be hazardous or to interfere with the child’s education, or to be harmful to the child’s health or physical, mental, spiritual, moral or social development.”[123] There is no question that steroid use that is either forced or enabled by baseball organizations and personnel in the Dominican Republic violates Article 32. Likewise, a system of child labor that leaves the child susceptible to routine injury, as is the case in baseball—both as a matter of accidents and stress injuries that result in muscle, tendon, and ligament damage—without adequate preventative measure, would violate the Convention. Moreover, even without steroid use and injury concerns, any situation in which adults make money by taking a share of any eventual signing bonus received by children coerced to drop out of school and take up a profession that provides few transferrable skills and a low probability of success is surely both economically exploitative and harmful to a child’s development. As such, no matter how pervasive the use of steroids is,[124] the treatment of young baseball players in the Dominican Republic surely violates Article 32.

III. Corporate Codes of Conduct

A. Overview

There are two obvious places at which pressure could be directed to remedy the labor and human rights abuses taking place within baseball academies: the Dominican government and Major League Baseball. Most commentators have suggested primarily pressuring one or the other.[125] At least one writer has suggested that the situation in the baseball academies is primarily a Dominican problem, since she believes that to the extent abuses occur, they occur almost exclusively within independent Dominican-run academies; therefore, any violation of domestic or international law falls squarely at the feet of the nation responsible for such conditions.[126] Even if this claim is true, I believe that MLB is responsible for conditions in the independent academies. The presence of MLB is the primary, if not the only, reason such academies exist.[127] In that way, as outlined above, the independent academies are analogous to supplier factories from which MNCs buy commodities to make their goods. In fact, since the independent academies (and the Dominican Republic more generally) are producing players almost exclusively for MLB teams, MLB’s connection to the player protection chain is tighter than it might be for other MNCs, even when a MNC has a supplier contract with a factory in a buyer-driven commodity chain.[128] While buscones may not be employees of MLB, independent academies are sufficiently analogous to supplier factories to apply pressure to MLB to help regulate the behavior of buscones. In other words, both the Dominican Republic and MLB should share responsibility for abuses. If pressure is only applied to the Dominican Republic, there is little hope of changing the status quo. Although the Dominican Republic is a signatory to the ILO and has education laws on the books that ostensibly make some of the practices within the independent academies illegal, because of intense poverty and an otherwise low level of development, there is little chance that increased scrutiny of labor practices alone would provide sufficient incentives to the Dominican Republic to turn off or even regulate the spout of cheap, young talent flowing into the MLB academies.[129] This is doubly unlikely given the island nation’s fascination with baseball and the large amount of money that MLB spends in the Dominican Republic each year.[130] As such, it is necessary to make MLB shoulder some of the burden to ensure that players have not had their rights abused. Unlike the Dominican Republic, MLB is highly susceptible to public pressure. Part of the product they sell is a sense of sportsmanship and fair play. In this way, MLB is no different than the countless consumer brands that offer a good or service that depends in some degree on the goodwill of the consumer.[131] I believe that a combined approach, bringing attention to the Dominican Republic’s failure to protect its young players and using that information to expose MLB’s role in that failure, stands the best chance of improving the conditions for Dominican baseball players. Although legal channels may be technically available, such as bringing a claim against MLB under the Alien Tort Claims Act (ATCA), such a claim is highly unlikely even to get far enough to expose MLB to substantial negative publicity.[132] Although the ATCA has been used to prosecute torts “in violation of the law of nations,”[133] the state of the law is in flux.[134] It is currently unclear whether a corporation can be found responsible under the ATCA, and if one is, to what degree a corporation must be aiding and abetting a state action.[135] In this case, it is even less clear whether MLB owes a duty to the players in the independent academies that could be violated under the ATCA. Even if someone brought a claim against the Dominican Republic for labor rights abuses, the claim is highly unlikely to get any traction with a court. In its broadest reading, claims under the ATCA typically deal with extreme issues, such as political murder and forced labor.[136] Therefore, the most efficacious way to improve conditions for young baseball players in the Dominican Republic is for the public and NGOs to push MLB to develop a code of conduct that puts MLB in the position of working with the Dominican Republic to ensure that players who enter MLB academies have received the proper education and are not exploited as child laborers. Recognizing the limits of a legal challenge to conditions in the academies, this type of campaign would rely on the moral underpinnings of the domestic and international law as opposed to the formal mechanisms of the various international institutions. In this way, the campaign would resemble the anti-sweat shop campaigns that led MNCs such as Nike and Levi Strauss to develop corporate codes of conduct (CCOC) under which these companies attempt to regulate their suppliers. While another commentator has suggested a code of conduct as a method to remedy potential abuses,[137] previous scholarship has promoted an “all-or-nothing” approach that would do more harm than good to both the children in independent academies as well as the Dominican Republic more broadly.

B. MLB and a Corporate Code of Conduct

Major League Baseball is a MNC whose success is highly dependent on fan perception.[138] One way in which other MNCs whose business depends on public goodwill have attempted to garner approval is through the development of a CCOC for dealing with supplier factories and other contractors in the developing world.[139] Because of their vast economic power, the presence of MNCs may overwhelm the public regulatory system of many developing states. This outcome occurs even in situations where the company does not make a conscious effort to subvert regulation of labor standards. Where the country and its citizens are desperate for contract work, the race (to the bottom) to produce goods at low cost creates a situation where the country would rather have jobs than enforce the domestic labor laws. During the 1990s, in response to a number of reports on horrible working conditions in supplier factories for some of the leading apparel and sporting goods companies,[140] companies began to see the benefit of corporate social responsibility (CSR), one part of which was establishing CCOC as a method of dealing with public outrage over MNCs’ complicity in labor and human rights abuses. While some of the codes of conduct may have been drafted proactively and presented to the public as an altruistic reflection of the corporation’s moral principles, many such codes were passed in response to a human or labor rights scandal, uncovered by activists, non-governmental organizations (NGOs), or journalists, implicating the company.[141] Over time, some corporations have also seen CCOC as a means to achieve other business ends, such as efficiency and retention of employees[142] and not merely as a public relations ploy. Whatever the reason for passing the code of conduct, the measure of success of any code of conduct is both the substance of the code itself, and, more importantly, the tangible steps taken by the MNC to prevent abuses. Although many CCOC began as vague, aspirational statements of principles, increased transparency, monitoring and enforcement efforts, including the use of independent agencies, have moved many CCOC past hortatory claims to enforceable regulatory mechanisms. [143] Companies such as Levi Strauss,[144] Nike,[145] and Reebok[146] want to appear to be good corporate citizens. They have done so, in part, by developing codes meant to establish the company’s commitment to core labor, human, social, or economic rights. Organizations such as the Federation Internationale de Football Association (FIFA), the Swiss organization that governs international professional soccer, have created labeling programs that require suppliers of “official” gear to abide by such standards.[147] Under either type of code, many CCOC incorporate labor standards as set out by the ILO “Declaration of Fundamental Principles and Rights at Work.”[148] This often means making sure that the factories that are part of their production chain, either as producers of the product or the raw materials from which the products are made, respect certain minimum rights. Because it appears to be particularly frowned upon by Western consumers, the use of child labor is of core importance. Levi Strauss is an example of a MNC with a highly developed, self-imposed code of conduct. Levi Strauss initially developed its code not just for ethical reasons, but also to protect its brand image in the face of other scandals implicating apparel companies in the abusive labor practices of their overseas contractors.[149] Levi’s dealings with contractors in countries across the globe are governed by the two-part “global sourcing and operating guidelines.”[150] Through its “country assessment guidelines,” Levi Strauss determines if a country in which it is considering doing business meets minimum levels of health and safety protections, human rights guarantees, a functioning legal system, and political stability.[151] If Levi Strauss decides to do business within a country, it then monitors the conditions in its contracting factories under its “Terms of Engagement” (TOE).[152] The TOE covers wages and benefits, working hours, child labor, prison and other kinds of forced labor, discrimination, and disciplinary practices.[153] Levi Strauss works with the third party, non-profit monitoring organization, Verité, to ensure that its suppliers comply with the code of conduct.[154] In some instances, Levi Strauss has withdrawn from countries for violations of the TOE.[155] According to a self-published case study, Levi Strauss says it withdrew production from Mauritius because of TOE violations as a result of discrimination against migrant workers in Mauritian factories.[156] According to the company, it met with the U.S. government to ask them to pressure Mauritius to investigate and change labor practices within the country as a condition to retaining trade benefits with the U.S.[157] Levi Strauss maintains that its actions led the Mauritian government to create the “Inter-Ministerial Committee on Foreign Labor” to examine labor conditions for migrant workers and strengthen labor protections.[158]

IV. An MLB Corporate Code of Conduct for the Dominican Republic

A. Features of MLB that Would Effect the Implementation of a CCOC

The hierarchy of the League is a unique feature that could make it easier to monitor and enforce a code of conduct. MLB as an organization oversees and coordinates 30 franchise teams. It, along with the players association, has developed a complicated set of rules governing how teams operate and how they treat their players.[159] Since MLB already operates as a top-down governing body of the teams, it is in a position to promulgate a CCOC that applies to the behavior of the franchises. It is also better able to monitor and enforce a code against teams, since unlike a manufacturer who receives the products produced by noncompliant suppliers, violations by low level producers (independent academies and buscones) directly benefit only the franchises. Because the League has less of a stake in whether a team is able to exploit players,[160] it will be better able to make sure that the teams are living up to their obligations. However, while this might be theoretically true, it is also true that MLB has been reticent to act as a monitor and enforcer in the past, such as when it was pressured to institute a drug-screening program in the wake of steroid scandals in the league.[161] The issue of developing a code of conduct for MLB academies would not likely be contentious in the same way, since the players association does not represent the players in the Dominican academies. There are also a number of ways in which MLB’s relationship with the Dominican Republic is different than the typical MNC-developing country relationship, which make it difficult for MLB to enforce a code or create a situation in which strictly enforcing a code would have a deleterious impact on the same young athletes MLB should be trying to help. For instance, MLB’s relationship with buscones and independent academies is different than that between MNCs and in-country contractors. As noted earlier, MLB academies do not have an ongoing contractual relationship with independent academies and buscones. In fact, although MLB teams may visit independent academies or meet with scouts to determine which players they would like to sign, the only contractual relationship is likely to be between the boys and the buscones who represent them. The lack of a contractual relationship makes it even harder to regulate the behavior at the very bottom.[162] Even if MLB develops a CCOC that calls for compulsory education and the prevention of the usage of child labor, buscones, parents, and players will continue to see a system that results in very large payout for those that make it to the top. CCOC or not, it would be nearly impossible for MLB to have in-school monitors to make sure potential future players are receiving an adequate education. Likewise, if a young boy is a promising baseball talent, but dropped out of school before completing compulsory education, there is an incredibly strong incentive for that child to forge the proper documentation or otherwise shirk the CCOC. This problem is exacerbated by the fact that the education system is poor in the Dominican Republic to begin with, and that, baseball player or not, many children drop out of school after the 5th grade.[163] After all, the player very literally has nothing to lose and everything to gain. Similarly, even if MLB were to institute a code that requires players to receive compulsory education and prohibits independent academies from engaging in practices that amount to the use of child labor, an all-or-nothing approach would likely end up only hurting the Dominican Republic as a whole. This is analogous to a CCOC that requires a company to pull out of a country entirely if it finds that the factory or the country in which it operates is a flagrant violator of code provisions. A CCOC with such an enforcement mechanism gives the MNC leverage to make its partner accede to its demands—at least where the partner country or factory is able to meet those demands.[164] However, there are situations in which a partner cannot meet the standards set by the MNC. If the only recourse is ending business with that firm or in that country, while it might assuage the guilt of Western consumers, it does little to improve the conditions for workers in that country or factory who could have used the capital that the MNC would have expended to improve their economic situation, perhaps long term. This situation is exacerbated in an industry like baseball and in a country like the Dominican Republic, where the primary focus of the code would be the regulation of behavior at the very bottom of the production chain. This behavior is typically difficult to regulate, given the fact that employees’ only competitive advantage is the low cost of their labor. This is especially true since every boy is in competition with every other boy; there is every incentive to cheat the system, especially when complaining about one’s treatment is likely the surest way to lose one’s chance to advance.[165] Even in the face of MLB pulling out of the country, as long as individual buscones see that other scouts and players are able to get an advantage out of not following the CCOC, they will also cheat the system. If an individual follows the rules and others do not, the individual loses out. If MLB pulls out of the country because the independent academies and buscones refuse to follow the rules en mass, the individual does not lose any more, but the rest of the country does, since MLB takes its $75 million a year investment with it. Also, without MLB in the country developing talent, there would be fewer Dominican players in the league and, therefore, less money being sent back by such players to families and communities throughout the Dominican Republic. Instituting a corporate code of conduct vis-a-vis independent academies in the Dominican Republic presents another unique challenge. The product that the academies produce is not a good but a laborer in the form of baseball players. This presents problems because, in addition to creating ambiguity as to whether a player should be considered a laborer at all, it compounds the enforcement issues outlined above. If a code of conduct prohibits an MLB academy from signing a player who was taken out of school or otherwise exploited, it is an injury almost exclusively borne by the individual player. Therefore, any code of conduct adopted by MLB regarding the Dominican Republic should be drafted to avoid harming players, who, through little fault or their own, may have already been exploited by overzealous buscones. Any solution should work to create a closer connection between MLB and the independent academies and scouts who provide the academies with players. Likewise, instead of merely pulling out of the country or even scaling back its investment, any solution should provide incentives for MLB, the Dominican Republic, and domestic academies to work together to make sure core labor and human rights standards are met. This would go beyond the all-or-nothing approach of many codes and could lead to both a greater investment in the country by MLB and an increased commitment to public regulation by the Dominican Republic.

B. Suggested Features of an MLB Code of Conduct

1. Establish a Buscón Licensing Program
One way that MLB could potentially attempt to remedy the situation would be the adoption of a code of conduct that includes a buscón licensing program under which buscones would not be allowed to represent players unless they can verify that players under their control have finished compulsory education and have not been exposed to unduly hazardous conditions while under a buscón’s care. In the Dominican Republic, children are currently required to finish eight years of compulsory education.[166] However, most children drop out after the fifth grade.[167] Even if this is the case, since entrance to MLB is the primary reason such children take up baseball and its academies are the only real conduit for talent off of the island, MLB has an imperative to make sure that it is not responsible for children leaving school. Given both the state of the Dominican education system and the international norm of requiring only compulsory education,[168] requiring players to have graduated high school is currently an unrealistic goal. In fact, such a standard would do more harm than good. If MLB teams were unable to sign Dominican players who have not completed high school, MLB teams would have to scale back their operations in the Dominican Republic without a corresponding educational benefit to potential players. A code of conduct provision requiring documentation of completion of compulsory education would also have the effect of reducing any child labor violations within the independent academies. Requiring children to finish compulsory education would help correct the school-baseball balance. If baseball training was relegated to an after school activity, it would be less likely to qualify as employment under common law agency principles, since both the duration of the activity would be shortened and the player would be better able to set the bounds of his participation.[169] One Note has argued that creating an obligation on the part of MLB to make sure academy players received an adequate education is not feasible because, even if MLB has an obligation to make sure the children who play in its academies have received an education, MLB’s efforts would not affect the children playing in independent academies.[170] If a code of conduct results in only baseball players receiving a better education in the Dominican Republic, I would consider it a success. MLB might have a general obligation to all children on some vague moral level, but as I argue in my prior analysis, it has a specific obligation to the children who drop out of school to become baseball players and enter the independent academies that supply players to MLB academies. There are also the indirect effects of both drawing more attention to the Dominican Republic’s poor educational system and contributing to the solution.[171] Heightened public awareness of the educational crisis in the Dominican Republic may spur further action by the Dominican government, NGOs, and other MNCs. Therefore, even if MLB only has an obligation to its players, that encompasses an obligation to verify that baseball players entering its academies have received adequate education. By enforcing such a rule, MLB would help children throughout the Dominican Republic. Commentator Adam Wasch, focusing on prohibiting child athletes from working at the expense of education, provides an example of what a code of conduct of this kind might look like:
Enforcement of MLB’s Child Labor Code of Conduct. Major League Baseball will discontinue cooperation with any third-party that persists in non-compliance with our MLB Child Labor Code of Conduct. Apprenticeship Programs. Major League Baseball accepts apprenticeship programs for children between the ages of fourteen and sixteen years, but only under certain conditions. The total number of hours spent on work and school together should never exceed seven hours per day. The apprentice must prove that work is not interfering with the child’s education, that the apprenticeship is limited to a few hours per day, that the work is light and clearly aimed at training, and that the child is properly cared for, housed, and fed. Apprenticeship program directors must file a report with the league that details that their apprentices are receiving a quality, formal education. We will not work with apprenticeship programs that do not comply with these terms. Special Recommendations. Major League Baseball acknowledges that according to Article 1 of the UN Convention on the Rights of the Child, a person is a child until the age of eighteen. We therefore recommend that children in the age group of 14-18 be treated accordingly (i.e., by limiting the total number of working hours per day and implementing appropriate rules for overtime). Children in this age group are not allowed to perform strenuous work that will impair their ability to receive an education.[172]
While his proposed Child Labor Code of Conduct is a decent first step, it would likely be insufficient to remedy the child labor and education violations committed by buscones. First, it has been established that the record keeping system in the Dominican Republic is open to manipulation.[173] As such, an enterprising player or buscón could likely forge any required documentation to show that the requisite education has been received. This is especially true for exceptionally talented players, for whom there is an incentive to forge documentation or to do a less than thorough job of investigating dubious documents.[174] On the other hand, it is necessary because it makes the Dominican Republic responsible for enforcing its own education laws if it wishes to keep MLB academies in the country. After all, if verification becomes too difficult, MLB teams might significantly scale back their operations in the country. Likewise, Wasch’s code suffers from an adversarial, all-or-nothing approach. Under his code, independent providers of baseball players would operate under a cloud of suspicion; and, if they fail to meet the strictures of the code, they will be cut out.[175] In a country without adequate regulation to prevent buscones from violating labor rights, a code that treats each buscón or academy as an independent data point will likely be ineffective in bringing the domestic system in line with international labor standards. As long as some independent actors are able to get away with violating labor standards, there will be intense pressure for others to push their luck. A potentially more effective approach, which would retain the same thrust as Wasch’s code, is one that creates a closer partnership between MLB and the independent actors which supply the MLB academies with players, as well as the government of the Dominican Republic. For instance, the code could require Dominican scouts and independent academies to apply for a license from MLB. The license would require the independent provider to abide by certain minimum labor and educational standards, as set by Dominican law. In turn, MLB would require the teams in the league to sign only players who are represented either by a licensed scout or institution. Alternatively, MLB teams could sign players who are at least 17 years old and are currently attending or have already graduated from high school and, therefore, have received both the compulsory education required by Dominican law and are eligible to be signed under MLB rules governing international players. This combined approach would provide incentives for independent providers to abide by Dominican law but would not punish those players who decided to stay in school past the compulsory period. In fact, creating a closer relationship with buscones would inure to the benefit of the scouts, since only they would be allowed to make a premium off of players signed by MLB teams, likely more than offsetting the cost of compliance with the code. The franchise structure of MLB could be useful in facilitating a partnership between the teams, buscones, and government. Since MLB is a corporation that exists outside of the teams it oversees, it has the ability to implement a code that governs the teams and buscones without the need for an outside monitoring group (though perhaps there is a role for such a group). Through the monitoring program, MLB would oversee the independent producers. Under this approach, instead of immediately withdrawing a license when violations are found, MLB should require the independent actors to demonstrate why they are unable to meet their obligations and what steps they are taking to reach compliance. MLB already has an international office in Santo Domingo.[176] If it implements a licensing program for buscones, it could use its office in the Dominican Republic to serve as a meeting place for all of the regulated entities to discuss violations, as well as successes and concerns with the program. For instance, buscones may complain that the education system in the country is in bad shape; children are not actually required to finish compulsory education and, in fact, most do not—therefore, the independent operators are unable to meet their obligations under the licensing program. The dialogue created through a partnership between MLB and independent baseball scouts could then be used to pressure the government to better enforce its education laws.[177] A code that produces communication instead of merely the threat of withdrawal of benefits would likely benefit young baseball players and the Dominican Republic.
2. Require Teams to Provide Additional Education, Either On-Campus or Through a Partnership with Local Schools
Even if MLB develops partnerships with buscones and independent academies, given the economic jackpot that a player receives if they are skilled enough to make it to the major leagues, the pressure to cheat would still be intense. Therefore, MLB may need to take additional proactive steps to ensure that its presence in the Dominican Republic does more good than harm. One method would be to require MLB academies to offer additional education to players in the academy. This could be accomplished either by bringing teachers to the academies to teach classes in addition to the English and American culture classes already taught, or alternatively, academies could provide busing from the academies to nearby schools. This educational component would be required for the high-school-age players (16-18) and, perhaps, could also be offered to older players who did not graduate high school as an optional program. In fact, some MLB teams have already instituted additional education at the academies. As noted earlier, five teams currently either bus players to nearby schools[178] or have on-site educational facilities.[179] Given the relatively low cost to the teams,[180] the high value to the players, and the remedial benefit for athletes who dropped out of school to pursue baseball, there should be a push to get MLB to add such a provision to any code of conduct it adopts. The policies of the MLB academies would be easier to monitor than those in the independent academies. If MLB discovers that a team is not fulfilling the educational requirement, the league could impose fines and implement the program itself, charging the cost to the team. While MLB should be more willing to penalize a team than they would an independent operator, the penalty should be aimed at improving conditions for players and should not include forcing the team to close the academy, since the effects of that penalty would be felt most strongly by the Dominican players.
3. International Draft
Perhaps the mechanism most likely to change the fortunes of players in the Dominican Republic is the institution of an international draft. In fact, the latest collective bargaining agreement (CBA) between MLB and the Major League Baseball Players Association calls for an investigation into instituting such a draft.[181] An international draft would require teams to pick all first-time signers, instead of leaving those players subject to free agency and the vagaries of the market. Players chosen in an international draft may fall into “slots” with corresponding signing bonus values.[182] Even if there were not a hard slotting system with mandatory signing bonuses, a player would only be able to negotiate with the team that picked him. Proponents of an international draft believe it would be more fair, both to players from developing countries as well as to players already subject to the draft, who may not be able to command the same kind of premium that a proven talent from Japan or Korea could get.[183] Most significantly, the institution of an international draft would largely undercut an MLB team’s incentive to maintain an academy in the Dominican Republic. The academy could still be the first stop for many drafted Dominican players; however, the reason that teams run academies is so they are able to give a large number of cheap players a test run before making a larger commitment to the players and sending them to the U.S. to play in the minor, and perhaps eventually, the major leagues. If teams were only allowed to sign the limited number of players that fell to them through a draft, which encompassed not only Dominican players but players from all over the world, this key function of the academies would be lost. Some have argued that undercutting MLB teams’ incentive to operate academies in the Dominican Republic is a good thing.[184] While MLB’s current policies may contribute to labor and human rights violations in the country, the background conditions in the Dominican Republic are not rosy. MLB teams spend a significant amount of money in the country, including providing some infrastructure improvements.[185] Likewise, players in the official MLB academies make a wage that is many times higher than the prevailing factory wages.[186] Therefore, while there may be gains, such as more children pursuing occupations other than baseball, the goal should be for MLB to make a greater commitment to helping the Dominican Republic reach international standards—not reducing MLB’s investment in the country. After the institution of an international draft, there might not even be an appreciable decline in Dominican boys dropping out of school to pursue it; even without an academy system, there is still the lure of the enormous payday and a tradition of players who went on to become international sporting celebrities. Likewise, while there may be less money to go around, an international draft would likely not undercut the incentives for buscones to develop, represent, and garnish the signing bonuses of players to the same degree that it would reduce MLB’s investment in the country. Therefore, while it might be an inevitable development, it is not likely a good one for the Dominican Republic or its baseball players.

V. Development of an MLB Corporate Code of Conduct

Currently, MLB does not have a corporate code of conduct independent of the collective bargaining agreement (CBA) negotiated between team owners and the Major League Baseball Players Association (MLBPA), whose only relevant provision for this discussion is the requirement that MLB teams offer English-as-a-second-language courses if any major league player requests it.[187] Additionally, MLB maintains an office in Santo Domingo in the Dominican Republic, which has established rules regarding field conditions, housing, and nutrition in the academies.[188] Therefore, the rules governing MLB’s conduct in the Dominican Republic are the bare-bones requirements found in Rule 3(a)(1)(B)(i) and (ii) requiring that players are either 17 when signed, or will be 17 by the end of the current season.[189] That means most players in the Dominican MLB academies receive little outside training besides baseball-related English classes, and even then it is generally agreed that players do not develop English skills until they come to the United States.[190] Given the unique features of the academy system—including very young players, dire poverty, lack of government regulation, and an incredibly small chance of success—it is unlikely that Dominican players will develop the bargaining power necessary to substantially change their conditions. Any player who speaks out would likely be immediately let go from the academy. As such, the pressure to develop a code of conduct will need to come from an outside combination of public and MLBPA pressure, backed by the guidelines furnished by international labor and human rights law. Although the MLB rules govern player selection and development, whenever there is conflict between the rules and the CBA, the CBA governs.[191] This means that players through the MLBPA have the ability to shape the rules to protect labor rights in the Dominican Republic. In fact, given the strength of the player’s association, its cooperation may be required to institute any rule change or corporate code of conduct governing MLB behavior in the Dominican Republic. Therefore, while an independent corporate code of conduct would help protect Dominican players, the player’s association insistence on adding the code to the CBA would carry additional moral force and operate not only as a self-imposed code but also as a binding contract with the MLBPA. One potential problem with taking this approach is convincing the MLBPA to use their bargaining power to protect players not currently in the association. Even Dominican players, who make up a substantial minority of MLB players,[192] may not see the benefit in pushing for better treatment of other Dominican players; after all, they made it out of the Dominican system—some of them as millionaires. Also, as one commentator has pointed out, Dominican players may also be acutely aware of their fragile position as foreign baseball players, and may not be willing to stick their neck out, lest they be labeled troublemakers.[193] In fact, given the precarious position of most MLB players, even those who believe the situation in the Dominican Republic needs to change may be unwilling to rock the boat for the benefit of young future players. However, if the issue in the Dominican Republic could be shown to have a negative effect on the major leagues, the MLBPA might make a greater push toward remedying the education and child labor problems in the Dominican Republic. Perhaps the MLBPA would become stronger advocates for change in the Dominican Republic if it could be shown that the lower bonuses and salaries paid to players signed in the Dominican Republic suppress salaries across the league. Similarly, the MLBPA might take a lead role if the relatively unregulated international free-agent market leads MLB to focus attention on the Dominican Republic, churning through many players, few of whom become members of the association, instead of focusing on countries covered by the draft, in which a higher percentage of players initially signed, eventually make it to the majors. In that instance, the MLBPA would be most likely to push for a fix that levels the playing field for all potential major league players, such as the institution of an international draft. Even without the involvement of the player’s association, MLB could adopt a corporate code of conduct that requires MLB teams operating in the Dominican Republic or elsewhere to abide by a set of rules, since those players are not currently covered by the CBA. In fact, unlike other codes of conduct, by which companies self-regulate, there is more distance between MLB and its independently owned franchises; while still self-regulation, this structure separates enforcement and compliance. However, MLB has been reticent to fully confront the labor rights violations that their presence in the Dominican Republic might cause. This reticence persists despite years of media coverage on the potential problems caused by academies.[194] The plight of Dominican players was even documented in the feature film Sugar.[195] Therefore, it may require additional public pressure for MLB to see that a CCOC is in its best interest. Admittedly, a public campaign faces some pitfalls that were not present in the campaigns against sweatshop labor in the 1990s. For one, the problem is potentially more nuanced. Unlike a sweatshop where all of the workers, perhaps including child laborers, make subsistence (or lower) wages for work performed under dangerous conditions, there are large numbers of Dominican-born players in MLB that make millions of dollars a year, some of whom are the face of their franchise.[196] The plight of school-age children may not seem so pressing when there is such dramatic upside for a few lucky players. Similarly, unlike the anti-sweatshop movement, which drew strength from many interrelated groups and causes,[197] there may not be a similar block of baseball fans dedicated to labor rights. I have no doubt that there are individual baseball fans who care about labor conditions in the Dominican Republic, but baseball is, after all, a spectator sport, and many baseball fans wish to escape real-world problems. If the average fan’s critical faculties are engaged, they are likely directed toward dissecting the decisions of the team on the field, not the labor conditions that produced the players on the team.[198] However, it is likely that the prospect of getting Western consumers to care about the conditions under which their jeans and shoes were produced seemed similarly dire in early days of the anti-sweatshop movement. On the other hand, because the problem is less extreme than some labor law violations, such as widespread labor and health and safety violations throughout a global supply chain, and the fixes would cost less, it may take less pressure before MLB decides that the benefit of implementing a code of conduct regarding players in the Dominican Republic is worth the cost. In fact, through continued discussions about possibly instituting an international draft, MLB may be coming to the conclusion that its brand will suffer if it continues to ignore the circumstances that produce players in the Dominican Republic. The degree to which a commitment to even an international draft is real, and not just a way of kicking the can down the road, is yet to be seen.[199] Although management and the players association may both agree with the draft in principle, neither appears to be willing to expend bargaining power to make it a reality. Without additional public pressure, even this small change may never come to pass.


While MLB has delivered benefits to the Dominican Republic, including making some of its citizens very rich, baseball has left many aspiring Dominican players who pursue a career in the big leagues with little educational or vocational skills. Exacerbating this problem is the presence of buscones, who have no incentive to make sure the children they train get a proper education or receive sufficient medical care. Given that MLB has contributed to this situation, as the only organization paying for young baseball players, it should bear some responsibility for remedying the educational and health deficit. Like MNCs, MLB should adopt a corporate code of conduct to regulate its behavior in the Dominican Republic. A corporate code of conduct, which institutes a licensing program for buscones, would go part of the way toward ensuring that children receive a better education and are not otherwise abused by licensed buscones. However, since such a licensing program would promote dialog over rigid punishment, the code of conduct may also need to require MLB academies to provide supplemental education, at least until improvement is shown in school attendance and conditions improve for child players at independent academies. Some commentators have called for the institution of an international draft. While an international draft may help prevent abuses, it would also have the effect of removing the incentives for MLB to invest in the Dominican Republic. Finally, any solution to the problem would require increased public pressure, since MLB has been slow to confront the scope of its obligation in the Dominican Republic. Although the prospect of rallying baseball fans around labor conditions in the Dominican Republic may seem daunting, given the scope of the harm and the relatively small changes required, it may not be as insurmountable a task as it seems.
* J.D., 2013, New York University School of Law; B.A., 2005, University of Wisconsin-Milwaukee. I would like to thank Cynthia Estlund for her helpful substantive and structural suggestions. [1] See Sean Gregory, Baseball Dreams: Striking Out in the Dominican Republic, Time, Monday July 26, 2010, available at http://www.time.com/ time/magazine/article/0,9171,2004099-1,00.html. [2] See Diana L. Spagnuolo, Swinging for the Fence: A Call for Institutional Reform as Dominican Boys Risk Their Futures for a Chance in Major League Baseball, 24 U. Pa. J. Int’l Econ. L. 263. [3] See Gregory, supra note 1. [4] Id. [5] See Jesse Sanchez, Creating Complete, Healthy Players, MLB.com, http://mlb.mlb.com/news/article.jsp?ymd=20070918&content_id= 2215646&vkey=news_mlb&fext=.jsp&c_id=mlb. [6] See Gregory, supra note 1. [7] Id.; Steve Fainaru, The Business of Building Ballplayers, Washington Post, June 17, 2001, at A01, available at http://www.latinamericanstudies.org/sports/dominican-ballplayers.htm [hereinafter Fainaru, Business of Building]. [8] See Gregory, supra note 1. [9] See Spagnuolo, supra note 2, at 275. [10] See Bob Ruck, Baseball’s Recruiting Abuses, Americas Quarterly, available at http://americasquarterly.org/node/2745 (describing MLB’s overwhelming presence in the Caribbean, and how this presence led to the development of the buscón system). [11] See Major League Rules, available at http://bizofbaseball.com/docs/MajorLeagueRules-2008.pdf [hereinafter MLR]. [12] Id. § 3(a)(1)(A) (“A player who has not previously contracted with a Major or Minor League Club, and who is a resident of the United States or Canada, may be signed to a contract only after having been eligible for selection in the First-Year Player draft.”). [13] Id. § 4(a). [14] J.P. Breen, Hard Slotting is Bad for Baseball, Fangraphs (Nov. 9, 2011), http://www.fangraphs.com/blogs/index.php/hard-slotting-is-bad-for-baseball/. [15] MLR, supra note 11, § 4(h) (“A player who is selected at a First-Year Player Draft and who does not sign a Major or Minor League contract before being removed from the selecting Club’s Negotiation List . . . shall be subject to selection at the next First-Year Player Draft at which the player is eligible for selection.”). [16] Id. § 3(a)(2)(A). [17] Id. § 3(a)(3)(B)-(E). [18] Even though the percentage of high school players drafted rose between the 2011 and 2012 draft, high school players still only make up 30% of the players drafted. See Kevin Askeland, MLB Draft 2012 by the Numbers, Max Preps, http://www.maxpreps.com/news/ Yb40hby1E0Ocecbsw72k9w/mlb-draft-2012-by-the-numbers.htm. [19] MLR, supra note 11, § 3(a)(1)(B)(i). [20] Id. § 3(a)(1)(B)(ii). [21] Arturo Marcano & David P. Fidler, The Globalization of Baseball: Major League Baseball and the Mistreatment of Latin American Players, 6 Ind. J. Global Legal Stud. 511, 538 (1999) (“The power of the MLB scouts vis-a-vis a baseball prospect in Latin America is greater than it was in the United States (generally speaking) because of the poverty and relative lack of education suffered by the prospect and his family. As a representative of a MLB team, a scout with the power to sign prospects has tremendous leverage over a vulnerable young player from a poverty-stricken country. In addition, although many MLB teams scout in Latin America, potential prospects may not see scouting frenzies over their talent because the scouting system is not as well structured as the pre-draft American system was. These factors lead to Latino prospects who are generally willing to sign anything a MLB scout puts in front of them without receiving anything close to the kind of signing bonuses received by American baseball draftees.”). [22] See Posting System, Baseball Reference, http://www.baseball-reference.com/bullpen/Posting_System (in 2011, MLB’s Texas Rangers paid the Hokkaido Nippon Ham Fighters over $51 million to negotiate a contract with their star pitcher Yu Darvish). [23] See Teams by Affiliation, MILB.com, http://www.milb.com/milb/info/affiliations.jsp. [24] See Sanchez, supra note 5. [25] See Adam Wasch, Children Left Behind: The Effects of Major League Baseball on Education in the Dominican Republic, 11 Tex. Rev. Ent. & Sports L. 99 (citing Office of the Commissioner MLB-Dominican Republic, MLB Investment in the Dominican Republic, http://www.dominican-baseball.com/articles.php?artid=9). [26] See Spagnuolo, supra note 2, at 269-270 (“Many allege that not all players at the academies are actually signed, and that boys between the ages of twelve and sixteen often attend the camps.”). [27] See Spagnuolo, supra note 2, at 275; Vanessa Marie Zimmer, Dragging Their Devotion: The Role of International Law in Major League Baseball’s Dominican Affairs, 4 Nw. U. J. Int’l Hum. Rts. 418, 421 (2005). [28] See Zimmer, supra note 27, at 421 (noting that while it is clear that forging documentation is a problem, it might be more prevalent at the other end of the spectrum with players falsifying their ages to appear younger than they are. This behavior only reinforces the notion that players believe teams put a premium on youth.). [29] See Spagnuolo, supra note 2, at 270. [30] Id. [31] See Gregory, supra note 1. [32] Id. [33] Id. [34] See Spagnuolo, supra note 2, at 272-73. [35] See id., at 271 (referring to this method of signing Dominican players as the “Boatload Mentality”). [36] See Spagnuolo, supra note 2, at 271(“Critics argue that this unabashed behavior by scouts only proves their point: MLB sees these players as commodities and fails to recognize the long-term negative implications that some of their actions might have on the players’ lives.”). [37] See Gregory, supra note 1. [38] Major League Baseball-Major League Baseball Player’s Association Collective Bargaining Agreement, § 7(B)(1) [hereinafter CBA]. In November 2011, MLB and MLBPA negotiated a new CBA extending through the 2015 season, by the end of which the minimum salary will be $500,000 per season. Jayson Stark, Major League Baseball Players, Owners Sign New Labor Agreement, ESPN.com, http://espn.go.com/mlb/story/_/id/7269300/ major-league-baseball-players-owners-sign-new-labor-agreement. [39] See Gregory, supra note 1. [40] CIA, The World Factbook, https://www.cia.gov/library/publications/the-world-factbook/geos/dr.html. [41] In fact, it appears that those players who are cut due to injury after they sign may never receive their signing bonus. See Marcano & Fidler, supra note 21, at 545. [42] If fact, it appears this “succeed at all costs” mentality does not end once Dominican players reach the United States. Between 2005 and 2007, 58.5% of all players who tested positive for performance-enhancing drugs across major and minor league operations, including those in Latin America, came from the Dominican Republic. See Arturo J. Marcano Guevara & David Fidler, Fighting Baseball Doping in Latin America: A Critical Analysis of Major League Baseball’s Drug Prevent and Treatment Program in the Dominican Republic and Venezuela, 15 U. Miami Int’l & Comp. L. Rev. 107, 123-24 (2007). [43] The dangers are exacerbated by the fact that many players take steroids intended for animals. See Fainaru, Injecting Hope—and Risk: Dominican Prospects Turn to Supplements Designed for Animals, Washington Post, June 23, 2003, at A01, available at http://www.majorwager.com/ forums/mess-hall/122165-injecting-hope-risk.html [hereinafter Fainaru, Injecting Hope]. [44] See Sanchez, supra note 5. [45] See Sanchez, supra note 5. The article notes that four MLB teams, the Boston Red Sox, Cleveland Indians, New York Mets and Seattle Mariners, have established connections with high schools in Santo Domingo. [46] See Wasch, supra note 25, at 108 (noting that the San Diego Padres built class rooms at their facility and have also “partnered with the Dominican Government, the American Chamber of Commerce in the Dominican Republic and the U.S. Agency for International Development (USAID) to improve the quality of basic public education in the Dominican Republic, specifically, . . . the surrounding schools that sit only a few miles away from the team’s new multi-million dollar baseball academy”). [47] See Gregory, supra note 1(noting that in 2010, of the 31 prospects in the academy during that school year, 29 passed their current grade level and 5 were expected to earn high school diplomas). [48] See Gregory, supra note 1; Fainaru, Business of Building, supra note 7. [49] See Gregory, supra note 1; Fainaru, Business of Building, supra note 7. [50] Fainaru, Business of Building, supra note 7 (stating that not only do buscones take a cut, but in some cases steal the signing bonus from the player). [51] Fainaru, Business of Building, supra note 7. [52] Fainaru, Business of Building, supra note 7. [53] U.S. Dep’t of Labor, Bureau of Int’l Labor Affairs, Dominican Republic (2005) available at http://www.dol.gov/ilab/media/reports/iclp/tda2004/ dominican-republic.htm#_ftnref1332 [hereinafter ILAB]. [54] See Santo Domingo Office Mission Statement, MLB.comDR, http://mlb.mlb.com/dr/santo_domingo.jsp. [55] See Wasch, supra note 25. [56] See Fainaru, Injecting Hope, supra note 43. [57] See Gregory, supra note 1. [58] See Mike Rosenbaum, Examining the Percentage of MLB Draft Picks Who Reach the Major Leagues, Bleacher Report (June 12, 2002), http://bleacherreport.com/articles/1219356-examining-the-percentage-of-mlb-draft-picks-that-reach-the-major-leagues. While Rosenbaum notes that sixty-six percent of first round draft picks reach the major leagues, the percentage drops precipitously from there, with players in the last rounds of the draft reaching the major leagues less than ten percent of the time. [59] Id. [60] There is a professional “winter league” in the Dominican Republic, but its players are drawn mostly from MLB players looking to stay in shape in the offseason, as opposed to a long-term domestic employment opportunity. See Dominican League, Baseball-Reference.com, http://www.baseball-reference.com/bullpen/Dominican_League (last visited Feb. 20, 2013). [61] Spagnulo, supra note 2, at 278 (“Remittances from family members in the United States are one of the largest contributors to the Dominican economy.”). [62] “‘Internationalization’ refers to the geographic spread of economic activities across national boundaries. As such, it is not a new phenomenon. Indeed, it has been a prominent feature of the world economy since at least the seventeenth century when colonial empires began to carve up the globe in search of raw materials and new markets for their manufactured exports. ‘Globalization’ is much more recent than internationalization because it implies functional integration between internationally dispersed activities.” Gary Gereffi, Outsourcing and Changing Patterns of International Competition in the Apparel Commodity Chain (2002), available at http://www.colorado.edu/IBS/PEC/gadconf/papers/gereffi.html. [63] Id. [64] Id. [65] Citing a Department of Labor Study, one commentator mapped J.C. Penny’s complex supply chain: “J.C. Penney purchases its childrens’ apparel from Renzo, a U.S.-based importer; Renzo imports from Robillard Resources, its Filipino agent; Robillard purchases from a number of contractors in the Philippines, one of whom is Castleberrry [sic]; Castleberry subcontracts to about thirty plants; these plants employ factory workers and subcontract out certain jobs like smocking or embroidery to home workers on a piece work basis.” Maria Gillen, The Apparel Industry Partnership’s Free Labor Association: A Solution to the Overseas Sweatshop Problem or the Emperor’s New Clothes?, 32 N.Y.U J. Int’l. L. & Pol. 1059, 1085 (2000). [66] Id. [67] Id. [68] Id. [69] See Gillen, supra note 65 and accompanying text. For instance, the soccer federation, FIFA, has had difficulty regulating the production of soccer balls, in part because the production is spread between many low-level suppliers. In 1996, after the use of child labor to make “official” FIFA soccer balls was exposed, labor unions and international soccer’s governing body reached an agreement by which FIFA would regulate the labor conditions of soccer ball manufacturers. See Frederick B. Jonassen, A Baby-Step to Global Labor Reform: Corporate Codes of Conduct and the Child, 17 Minn. J. Int’l L. 7, 39-40 (2008). In addition to the physical requirements (such as size and weight), manufactures that wished to produce FIFA soccer balls, which included the corresponding label, would be required to meet the core ILO labor standards. Id. However, after FIFA established the program, NGOs uncovered continued use of child labor in the manufacturer of “official” FIFA soccer balls. Id. In 2003, FIFA and the ILO entered into an agreement to try and stop the use of child labor called “The Red Card to Child Labor.” Id. (citing FIFA Tolerates Massive Violations of Labour Law, Berne Declaration, (Feb. 5, 2002), available at http://www.evb.ch/en/p25001374.html.) However, as late as 2010, NGOs were still reporting widespread use of child labor in the manufacture of soccer balls. See Press Release, World Cup Soccer Balls: Exploitation Still the Norm, Clean Clothes Campaign, (June 7, 2010), available at http://www.cleanclothes.org/media-inquiries/press-releases/world-cup-soccer-balls-exploitation-still-the-norm. [70] See Gereffi, supra note 62. [71] See id. [72] See Ruck, supra note 10. [73] Id. [74] See Gereffi, supra note 62. [75] See Gillen, supra note 65 and accompanying text. When set against the attenuated buyer-side supply chain that Gillen describes, the relationship between MLB teams and buscones seems exceedingly familiar. [76] In a series of cases, the United States Supreme Court has determined the statutory scope of the term “employee,” when used in a statute, and otherwise undefined, as describing the master-servant relationship as understood by common-law agency doctrine. See Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 322-23 (1992) (citing Cmty. for Creative Non-Violence v. Reid, 490 U.S. 730, 439-40 (1989). In looking at the situation in the Dominican Republic, I believe common-law agency principles are applicable here, especially since I am proposing guidelines to govern the behavior of a U.S. multinational. [77] Cmty. for Creative Non-Violence v. Reid, 490 U.S. 730, 751-752 (1989). This list is adapted from the Restatement (Second) of Agency, which provides the following factors to determine whether one is a servant or independent contractor:
(a) the extent of control which, by the agreement, the master may exercise over the details of the work; (b) whether or not the one employed is engaged in a distinct occupation or business; (c) the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision; (d) the skill required in the particular occupation; (e) whether the employer or the workman supplies the instrumentalities, tools, and the place of work for the person doing the work; (f) the length of time for which the person is employed; (g) the method of payment, whether by the time or by the job; (h) whether or not the work is a part of the regular business of the employer; (i) whether or not the parties believe they are creating the relation of master and servant; and (j) whether the principal is or is not in business.
§ 220(2). [78] See Gregory, supra, note 1. [79] See, e.g., Robert A. McCormick & Amy Christian McCormick, The Myth of the Student-Athlete: The College Athlete as Employee, 81 Wash. L. Rev. 71 (2006); Jonathan L. H. Nygren, Forcing the NCAA to Listen: Using Labor Law to Force the NCAA to Bargain Collectively with Student-Athletes, 2 Va. Sports & Ent. L.J. 359 (2003); Stephen L. Ukeiley, No Salary, No Union, No Collective Bargaining: Scholarship Athletes Are an Employer’s Dream Come True, 6 Seton Hall J. Sports L. 167 (1996). [80] See Fainaru, Business of Building, supra note 7. [81] Id. [82] See Cmty. for Creative Non-Violence, 490 U.S. 730. [83] See Gregory, supra, note 1. [84] As noted above, this can include the use of steroids. See Fainaru, Injecting Hope, supra note 43. [85] See Ruck, supra note 10 (“Parents, who are most often poorly educated and know little about the business of baseball, rarely serve as a check on less-than-ethical buscones.”). [86] The number of players entering the academies each year is only in the hundreds, as opposed to the millions of small pieces that may be manufactured when making small machinery, or, say, shoes. See Gregory, supra note 1. [87] See Fainaru, Business of Building, supra note 7. [88] See Gereffi, supra note 62. [89] Id. (noting that an “attenuated supply chain is . . . perhaps the biggest obstacle to ensuring a code of conduct is implemented at all levels of production.”). [90] Constitution of the International Labour Organisation, available at http://www.ilo.org/ilolex/english/constq.htm (last visited Apr. 13, 2012) [hereinafter ILO]. [91] Alphabetical List of ILO Member Countries, http://www.ilo.org/public/english/standards/relm/country.htm (last visited Apr. 13, 2012). [92] See ILO, supra note 90, 19 ¶ 5(d). [93] ILO Declaration on Fundamental Principles and Rights at Work and its Follow-up (adopted June 18, 1998 (Annex revised June 15, 2010)), available at http://www.ilo.org/declaration/thedeclaration/textdeclaration/lang–en/index.htm (last visited Apr. 13, 2012). [94] Id. ¶ 2 (emphasis added). [95] Id. [96] UN Convention on the Rights of the Child, adopted Nov. 20, 1989, 1577 U.N.T.S. 44 (entry into force Sep. 2, 1990), available at http://www.ohchr.org/EN/ProfessionalInterest/Pages/CRC.aspx. [97] Id. at Article 32. [98] Id. at Article 28. [99] Id. at Article 32. [100] Status of treaty ratification as of Apr. 13, 2012, available at http://treaties.un.org/Pages/ViewDetails.aspx?src=TREATY&mtdsg_no=IV-11&chapter=4&lang=en. [101] Monitoring the Fulfilment of States Obligations, UNICEF, http://www.unicef.org/crc/index_30210.html (last updated Nov. 5, 2005). [102] Id. [103] Id. [104] Convention Concerning Minimum Age for Admission to Employment, June 26, 1973, 1015 U.N.T.S. 297 [hereinafter Minimum Age Convention]. [105] Ratifications of C138 – Minimum Age Convention, 1973 (No. 138), Int’l Lab. Org., http://www.ilo.org/dyn/normlex/en/f?p=1000:11300:2002906217888221::NO:11300:P11300_INSTRUMENT_ID:312283 (last visited Mar. 8, 2013) [hereinafter Ratifications C138]. [106] Minimum Age Convention, supra note 104, art. 2, no. 3, at 300. [107] Id. at art. 2, no. 4. [108] Id. at art. 7, no. 1, at 302. [109] Ratifications C138, supra note 105. [110] See Zimmer, supra note 27, at 421 and text accompanying note 128. [111] See Fainaru, Business of Building, supra note 7; Gregory, supra note 1. [112] See UN Convention of the Rights of the Child, supra note 96, art. 28, at 53. [113] Universal Declaration of Human Rights, G.A. Res. 217 (III) A, art. 26, U.N. Doc. A/RES/217(III) (Dec. 10, 1948). [114] See id.; United Nations Convention of the Rights of the Child, supra note 96, art. 28, at 53. [115] See Fainaru, Business of Building, supra note 7. [116] See Gregory, supra note 1. [117] See Wasch, supra note 25, at 107 (noting that only the Dominican Republic spends only 2.3% of GDP on education and that only 58.9% of Dominican boys who enter first grade complete fifth grade). [118] Occupational Health and Safety, Int’l Lab. Org., http://www.ilo.org/global/standards/subjects-covered-by-international-labour-standards/ occupational-safety-and-health/lang–en/index.htm (last visited Mar. 7, 2013). [119] Ratifications of C167 – Safety and Health in Construction Convention, 1988 (No. 167), Int’l Lab. Org., http://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:11300:1820539468972702::NO:11300:P11300_INSTRUMENT_ID:312312:NO (last visited Mar. 7, 2013). [120] Ratifications of C155 – Occupational Safety and Health Convention, 1981 (No. 155), Int’l Lab. Org., http://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:12100:2643525827901069::NO:12100:P12100_ILO_CODE:C155:NO (last visited Mar. 22, 2013). [121] See Guevara & Fidler, supra note 42, at 123-24. [122] See Fainaru, Injecting Hope, supra note 43. [123] See U.N. Convention of the Rights of the Child, supra note 96, art. 32, at 54. [124] See Fainaru, Injecting Hope, supra note 43; Guevara & Fidler, supra note 42, at 123-24. [125] Also, one writer has suggested that the United States and Latin American countries producing baseball players enter into a multinational agreement that would govern the situation. See Jessica N. Trotter, Rooting for the “Home Team”: How Major League Baseball and Latin America Can Better Provide for the “Safe”-ty of Their Players, 13 Sw. J.L. & Trade Am. 445 (2006). [126] See Zimmer, supra note 27. [127] See Ruck, supra note 10. [128] See Gillen, supra note 65, at 1065-67 (identifying attenuation in the international production chain that “allows multinationals to disclaim responsibility for the inhumane labor standards” in developing countries). [129] See Natasha Rossel Jaffe & Jordan D. Weiss, The Self-Regulating Corporation: How Corporate Codes Can Save Our Children, 11 Fordham J. Corp. & Fin. L. 893, 901 (2005) (“Underdeveloped countries benefit greatly from the presence of MNCs, and the incentives are skewed against regulating them. They create wealth in the states where they operate by providing jobs, producing goods and services, introducing technologies, and developing markets.” (footnotes omitted)). [130] See Wasch, supra note 25, at 101. [131] See Jonassen, supra note 69, at 42-48 (describing the responses of a number of MNCs to scandals over labor conditions within their supply chains). [132] Terry Collingsworth, The Key Human Rights Challenge: Developing Enforcement Mechanisms, 15 Harv. Hum. Rts. J. 183, 202 (2002) (“The ATCA presents the potential to address claims involving intentional physical or mental harm, but is not likely to reach less extreme but much more common claims, including abominable working conditions.”). [133] 28 U.S.C. § 1350 (2006). [134] The Supreme Court is currently deciding Kiobel v. Royal Dutch Petroleum Co., where the questions include whether the ATCA applies to corporations, and whether and under what circumstances the ATCA applies to violations occurring within the territory of a sovereign other than the United States. No. 10-1491 (U.S. argued Oct. 1, 2012). [135] See Collingsworth, supra note 132, at 197. [136] See Collingsworth, supra note 132, at 185-95. [137] See Wasch, supra note 25, at 123. [138] One needs look no further than the ongoing steroid scandals in baseball for evidence of how difficult it is for baseball to deal with issues of integrity. Although baseball attendance did not decline during the so-called “steroid” era, that period of baseball history has left a stain on the current game, including seriously tarnishing the reputations and post-baseball careers of those persons implicated. See Wayne G. McDonnell, Jr., A Hall of Fame Quandary Involving Sportsmanship, Integrity and Character, Forbes (Jan. 4, 2013, 9:25 PM), http://www.forbes.com/sites/waynemcdonnell/2013/01/04/a-hall-of-fame-quandary-involving-sportsmanship-integrity-and-character/. [139] Of course, a CCOC need not only apply to a MNC’s operations in the developing world. I am focusing on codes that do so apply because they represent a private regulatory enforcement function that is likely to exist in the absence of a functioning public regulatory system in many developing countries. [140] See Jonassen, supra note 69, 42-46. [141] Famous sweatshop scandals include the discovery by a New York Times journalist of sweatshop conditions in a factory in El Salvador where GAP clothing was made, and the National Labor Committee allegations that Kathie Lee Gifford-brand clothing was made with the use of child labor in Honduras. Kathie Lee Gifford later became an outspoken advocate against the use of child labor. See Jonassen, supra note 69, 42-46. [142] These values are espoused by consultancy organizations such as Business for Social Responsibility. BSR, http://www.bsr.org/ (last visited Mar. 7, 2013). [143] The movement from code to a regulatory mechanism often requires additional public pressure. For example, media scrutiny of—and subsequent consumer displeasure with—the conditions under which Apple products are made at the FoxxConn Factories in China has led Apple and FoxxConn to agree to a more intrusive self-regulatory scheme, including allowing independent monitoring firms access to the factories. See Charles Duhigg & Steven Greenhouse, Electronic Giant Vowing Reforms in China Plants, N.Y. Times (Mar. 29, 2012), http://www.nytimes.com/ 2012/03/30/business/apple-supplier-in-china-pledges-changes-in-working-conditions.html?pagewanted=1. [144] See Levi Strauss & Co., Social and Environmental Sustainability Guidebook (2010), available at http://www.levistrauss.com/sites/default/files/ librarydocument/2010/6/ses-2010-guidebook.pdf. [145] See Nike, Inc., Code of Conduct (2010), available at http://www.nikeinc.com/system/assets/2806/Nike_Code_of_Conduct_original.pdf. [146] See Adidas Grp., Workplace Standards (2007), available at http://www.adidas-group.com/en/sustainability/assets/workplace_standards/ English_Workplace%20Standards.pdf. [147] See Jonassen, supra note 69, at 39-40. [148] In fact, Levi-Strauss references ILO-equivalent standards throughout its code of conduct. See Levi Strauss & Co., Levi Strauss and Co. Global Sourcing and Operating Guidelines [hereinafter Levi Global Sourcing], available at http://www.levistrauss.com/sites/levistrauss.com/files/ librarydocument/2010/4/CitizenshipCodeOfConduct.pdf. [149] See Jonassen, supra note 69, at 43. [150] See Levi Global Sourcing, supra note 148. [151] See Levi Global Sourcing, supra note 148. [152] See Levi Global Sourcing, supra note 148. [153] Id. [154] Verité, Client Testimonials, http://www.verite.org/AboutUs/ClientTestimonials (last visited Apr. 12, 2012). [155] Lisa G. Baltazar, Government Sanctions and Private Initiatives: Striking a New Balance for U.S. Enforcement of Internationally-Recognized Worker’s Rights, 29 Colum. Hum. Rts. L. Rev. 687, 719 (1998). [156] Levi Strauss, “LS & CO. Affects Positive Change in Mauritian Labor Conditions,” available at http://www.levistrauss.com/library/lsco-affects-positive-change-mauritian-labor-conditions. [157] Id. [158] Id. [159] See MLR, supra note 11. [160] Though of course MLB has a stake in the production of star players, since such players drive interest in MLB generally. [161] For a timeline of MLB’s response and eventual implementation of a drug testing program see Drug Policy Coverage, MLB.com, http://mlb.mlb.com/mlb/news/drug_policy.jsp?content=timeline (last visited Apr. 20, 2012). [162] See Gillen, supra note 65, at 1085. [163] See Wasch, supra note 25, at 107. [164] See Baltazar, supra note 155, at 718-19 (noting that under Levi-Strauss’s guidelines, it may withdraw from countries which fail to comply with its code of conduct). [165] See Zimmer, supra note 27, at 428. [166] See ILAB, supra note 53, at 152. [167] See Wasch, supra note 25, at 107. [168] See Wasch, supra note 25, at 107. [169] See Cmty. for Creative Non-Violence, 490 U.S. 730. [170] See Zimmer, supra note 27, at 427. [171] See Robert J. Liubicic, Corporate Codes of Conduct and Product Labeling Schemes: The Limits and Possibilities of Promoting International Labor Rights Through Private Initiatives, 30 Law & Pol’y Int’l Bus. 111, 152-56 (1998) (detailing indirect effects of CCOC). [172] See Wasch, supra note 25, at 123-4. [173] See Zimmer, supra note 27, at 421. [174] Note the case of Adrian Beltre, who was signed at age 15, perhaps knowingly, by the Los Angeles Dodgers. See Spagnuolo, supra note 2, at 270. [175] See Wasch, supra note 25, at 123 (“Major League Baseball will discontinue cooperation with any third-party that persists in non-compliance with our MLB Child Labor Code of Conduct.”). [176] See Sanchez, supra note 5. [177] Although Levi’s did withdraw before it entered into negotiations to push the Mariatas to adopt stronger anti-discrimination laws, given MLB’s position as the major employer of Dominican baseball players, it likely has more leverage to negotiate with the Dominican government without taking such a drastic measure. See Levi Strauss, “LS & CO. Affects Positive Change in Mauritian Labor Conditions,” supra note 156. [178] See Wasch, supra note 25, at 108-9. [179] See Gregory, supra note 1. [180] As noted earlier, the Pittsburg Pirates, MLB’s poorest team, paid $75,000 in 2010 to run an educational program at its academy. Id. [181] MLB.com, “MLB, MLBPA reach new five-year labor agreement,” http://mlb.mlb.com/news/article.jsp?ymd=20111122&content_id= 26025138&vkey=pr_mlb&c_id=mlb (last accessed Apr. 12, 2012) (“By December 15, 2011, the parties will form an International Talent Committee to discuss the development and acquisition of international players, including the potential inclusion of international amateur players in a draft or in multiple drafts.”). [182] Although the current draft also has a suggested slotting system, it is not clear that teams and players feel bound by the suggested signing bonus figures. [183] Incredibly, one commentator has argued that the current system disadvantageous players in the draft to the benefit of international free agents to such a degree that it amounts to national origin discrimination. See Daniel Hauptman, The Need for a Worldwide Draft to Level the Playing Field and Strike Out the National Origin Discrimination in Major League Baseball, 30 Loy. L.A. Ent. L. Rev. 263 (2010). In fact, some players have threatened to establish residency in another country to escape the strictures of the draft, and presumably command a higher signing value. See id. at 264. However, the bargaining power that a player in that position has is greater than a player with equal skills who grew up in a developing country. [184] See Timothy Poydenis, The Unfair Treatment of Dominican-Born Baseball Players: How Major League Baseball Abuses the Current System and Why it Should Implement a Worldwide Draft in 2012, 18 Sports Law. J. 305 (2011); Wasch, supra note 25; Spagnuolo, supra note 2. [185] See Wasch, supra note 25, at 108. [186] According to the interviews conducted by Spagnuolo in 2001, players in the academies made between $600 and $700 per month, while garment workers made around $100 per month. See Spagnuolo, supra note 2, at 273. [187] CBA, supra note 38, § 15(F). [188] See Wasch, supra note 25, at 106 (quoting http://www.usatoday.com/sports/baseball/2004-04-13-cover-latinos_x.htm). [189] MLR, supra note 11, § 3(a)(1)(B)(i)-(ii). [190] Tom Weir and Blane Bachelor, Spanish-Speaking Players Get Lesson in American Life, USA Today (Apr. 4, 2004), http://www.usatoday.com/ sports/baseball/2004-04-13-cover-latinos_x.htm. [191] See CBA, supra note 38. [192] In 2010, over 10% (86 of 833) of players on MLB opening day rosters were from the Dominican Republic. See Gregory, supra note 1. [193] See Zimmer, supra note 27, at 428. [194] See Gregory, supra note 1; Fainaru, Business of Building, supra note 7. [195] Sugar (2008). Although Sugar was a drama, not a documentary, it showed the path of one player who began his career in the Dominican academies, made it to the American minor leagues, but due to injury and lack of an adequate support system, dropped out of baseball. Unlike players who stop playing baseball while still in the Dominican Republic, after the protagonist in Sugar leaves baseball, he is left to fend for himself in the United States with no education and rudimentary English skills. [196] David Ortiz of the Boston Red Sox and Robinson Cano of the New York Yankees, to give two prominent examples. [197] See Michele Micheletti & Dietlind Stolle, The Politics of Consumption/The Consumption of Politics: Mobilizing Consumers to Take Responsibility for Global Social Justice, 611 Annals 157, 163-64 (2007) (noting that the global anti-sweatshop movement was made up of “more than one hundred organizations representing church groups; student groups; think tanks; policy institutes; foundations; consumer organizations; international organizations; local to global labor unions; labor-oriented groups; specific antisweatshop groups; no-sweat businesses; business investors; and international humanitarian and human rights organizations, networks, and groups.”). [198] Commentators such as Noam Chomsky have posited that there is a real danger in the vigor with which people consume sports, in that the energy used to follow, and criticize a sports team takes up critical thinking skills and might otherwise be used to examine and criticize institutional power. See Noam Chomsky, Manufacturing Consent: Noam Chomsky and the Media (1992). [199] Although, the institution of an international draft has been floated for many years, the latest collective bargaining agreement merely says that the issue will be revisited at the end of the current agreement, which expires at the end of 2015. See MLB.com, supra note 181.