Research Matters: Anthony Casey on "Copyright in Teams"

Research Matters is a biweekly feature in which a member of the faculty talks about some of his or her latest work and its impact and relevance to law and society.

Anthony Casey, Assistant Professor of Law, and Andres Sawicki, Associate Professor of Law at the University of Miami School of Law and 2006 Law School graduate, wrote “Copyright in Teams,” to be published in the next issue of the University of Chicago Law Review. Casey and Sawicki started working on the topic while both were Bigelow Fellows at the Law School. In the paper, they explore how the theory of the firm applies to creative collaboration such as novel-writing and movie-making, why these pursuits are taken either individually or in teams, and how the law affects that.

Q. Why is this something you wanted to study?

A. It started with a seminar I taught on how the law fits with the theory of the firm, which looks at why and how firms, or businesses, are organized. Andres came in to help teach one section on intellectual property. We asked, why do firms buy patents rather than have in-house research teams, and how does the patent law affect that? What we noticed was that the literature focused on the ownership of assets, like whether the person who produces the iPhone owns all the inventions that go into the iPhone. There wasn’t a lot of research about how the pure inventive, creative part came to be. If you imagine a team of people just creating an idea, there are no assets to own. There are just ideas. And yet firms organize in hierarchies where people are creating things.

The reason we focused on copyright is because some of the most pure creativity happens there. If you’re writing a novel or making a movie, that’s creative. And what we found is that there are differences in different industries and the law might affect the way teams are organized. For example, you don’t see many novels written in teams. Although, as we kind of dug into it, there are a couple of firms that are now writing books. The most popular is this company called Alloy that wrote the “Sweet Valley High,” “Gossip Girl,” and “The Sisterhood of the Traveling Pants” books, teen novels that became TV shows and movies. So the question is, why do we see teams and firms writing those but not writing “Harry Potter,” or Faulkner? In contrast, all movies have to be done in teams. Basically these distinctions form a whole area of creative production where the current literature doesn’t talk about how and why it’s organized in connection with intellectual property law. We started with copyright, though we hope to do some follow-ups on how the theories we’ve developed impact patent and trademark too.

Q. What did you find?

We started looking at different industries and which things are organized in teams and which aren’t. It’s costly to collaborate creatively and so you need mechanisms to foster that. So the reason we might not see the most creative novels written in teams is that it’s very difficult to monitor co-authors in a novel. If you look at a list of the top 100 fiction novels of all time, there are no co-authored books in there. If you look at the top 100 nonfiction novels, there’s a handful of co-authors, some written by two people, some by three. So you might say it’s easier to monitor nonfiction writing because you can verify facts. Did you get that right? Was your writing style at the top level? But if you’re saying, did you give me the best idea that’s in your head? Did you create the best plotline? That’s much harder. It’s much easier to observe and verify writing well technically, and much more difficult to observe and verify creativity. We suggest that it might be that “Sweet Valley High” was less creative, and that’s why they were able to do it in a firm. And as the firm got better and more experienced, then they were able to do things that were incrementally more creative. So “Sweet Valley High” is the beginning, and then it moves to “Gossip Girl” and “The Sisterhood of the Traveling Pants.” But it hasn’t gotten to your high-end, critically acclaimed literature. That’s the most costly in terms of monitoring a team. We take these ideas and in the paper we explore the role that intellectual property law and copyright law might play.

If you look at movies, movies really have to be done in collaboration. So what does the law do to facilitate that collaboration or to potentially hinder it? One theory we put forward involves the derivative works right of copyright law. Only the original author has the derivative works right. What we suggest in the paper is that the right to sequels is a useful reward that you can give a team to encourage them to be creative in the original. So for example, if a team makes a movie – and we use “Batman Begins” as an example – and the team is successful, you greenlight a sequel. But only because the firm owns the rights to the sequel can you do that. The theory is you’re using this right to a sequel to encourage the optimal production of the original. So what are the implications of that? Well, if firms do better when they use that kind of reward system, it wouldn’t be a surprise to see the larger firms drawn toward making things you can have sequels for. There’s all this talk that Hollywood has lost its creativity, that they only make sequels. Well, it’s not that they don’t like creativity, it’s that they have a comparative advantage in managing large teams, and movies with sequels give you a tool to be really good at managing large teams. It’s not surprising that the top big movies that are being made are movies that either are sequels or are likely to have sequels.

Q. Why is this significant?

This can help us talk about what we want to do with the derivative works right. If you buy some of the literature out there that says it’s meaningless, that it doesn’t hold any value, well this work shows that maybe it does. And you have to decide whether you like the value of collaboration and team production. If you do, it’s an input into the policy decision about the derivative works right.

The paper also touches on the work-made-for-hire doctrine. The default rule is, if I write a book, I have the copyright. But, if I’m an employee of someone, and the employment contract has certain factors that turn largely on control, the default rule switches, and the firm owns the copyright. What we suggest in the paper is that the default rule for work-made-for-hire could be backwards. We might want to flip it. We might want to say, don’t look at control, look at whether or not it was a creative collaboration that needed a substitute for monitoring. For example, the the manager can only use the derivative works right for a rewards systems if it owns the underlying work. So the work-made-for-hire should award that right to the manager when the rewards system has inherent value.When monitoring is easy and the firm has a lot of control, then the work should belong to the author or authors and not the manager.