Balkinization  

Wednesday, March 25, 2015

The Hidden Wisdom of Architectural Copyright Before the AWCPA

Guest Blogger

Kevin Emerson Collins

For the Innovation Law Beyond IP 2 conference, March 28-29 at Yale Law School

My project follows through on an intuition about the value of architectural copyright that dates from my days as an architect before I went to law school. When I was an architect, I believed that copyright would be valuable to me not because it prevented other architects from borrowing from my designs but rather because it gave me more bargaining power in relation to the building owners who were my clients. More specifically, my current project identifies the hidden wisdom of architectural copyright before the adoption of the Architectural Works Copyright Protection Act (AWCPA) of 1990—an odd copyright regime that, to date, no one has sought to justify. Formalizing my old intuition, I argue that the primary benefit of pre-AWCPA copyright was not an augmented incentive to create but rather the resolution of a variant of Arrow’s information paradox. That is, pre-AWCPA architectural copyright was a well-engineered copyright regime because it allowed strangers to free ride on design information while it prevented building owners who were contractually related to architects from opportunistically appropriating disclosed information without full payment.

Before the AWCPA, copying original expression from an architectural drawing amounted to infringement, but copying the exact same original expression from a constructed building did not. Economically speaking, pre-AWCPA architectural copyright was therefore a defeasible right because it lost much of its economic value upon the construction of a building. Pre-AWCPA copyright was a facially odd copyright without an analog in any other copyrightable subject matter. Imagine protecting the drawings used to design useful articles, but not the conceptually separable aspects of the useful articles themselves. Alternatively, imagine protecting the sketches made in preparation for large-scale murals or mosaics, but not the completed murals or mosaics.

Pre-AWCPA copyright has been widely criticized by critics who evaluate it under the incentives-access tradeoff that underpins conventional economic justifications of copyright. Aspiring to a maximalist regime, some copyright scholars criticize pre-AWCPA copyright directly, arguing that its defeasible rights are too paltry. Because free riding on constructed buildings is permitted, they posit that it does not generate meaningful incentives to invest in creative architectural design. Others, aspiring to a minimalist regime, argue in favor of thin—or perhaps even non-existent—copyright protection for architecture. However, they do not defend the defeasible nature of pre-AWCPA rights as a good way to limit an architect’s copyright rather than, say, a strictly administered substantial similarity test. In sum, pre-AWCPA architectural copyright was not only weak, but runtish as well. If the point of copyright is to generate incentives for creativity and tamping down on the most egregious free riding is the most palatable way of having copyright augment the incentive to create, pre-AWCPA copyright simply misses the mark.

I identify the hidden wisdom of pre-AWCPA architectural copyright by shifting the discussion away from the incentives-access tradeoff. The social value of architectural copyright does not rest primarily on the additional incentives that copyright generates by reducing free riding by strangers, i.e., other architects who are not contractually engaged on any given project. Rather, it follows principally from the resolution that copyright provides to a twist on Arrow’s information paradox. Absent architectural copyright, industry-standard architectural contracts would lead to a disclosure conundrum and would hinder the transmission of design information from architects to the building owners who have hired them to design buildings early in the design process.

The architect’s disclosure dilemma presents a twist on the conventional account of Arrow’s information paradox because it comes into being only after an initial contract between an architect and a building owner has been signed. The post-contract dilemma exists because of three features of the standard industry contracts between architects and building owners. First, the contract specifies a multi-phase process, and the architect generates the bulk of the design information in the early phases. Second, it back-loads the bulk of the architect’s fee into the later phases. Third, it is terminable at the building owner’s convenience.

This industry-standard contract permits strategic behavior by building owners: they can hire a first, design-minded architect to perform the early stages of the design, terminate the architect, and then take the first architect’s drawings to a second, less expensive architect to perform the latter stages. In a world in which this appropriation of an architect’s design without full payment is possible, architects would be hesitant to disclose information about their designs to building owners without a much more significant, up-front payment by building owners. Yet, building owners would understandably be hesitant to agree to pay a larger sum without first having some confidence that the architects will produce designs that satisfy their needs and preferences. This is Arrow’s information paradox in action, albeit in a variant that occurs after an initial contract has been signed.

Of course, either pre-AWCPA copyright or post-AWCPA copyright could resolve the architect’s disclosure dilemma. The beauty of pre-AWCPA copyright, however, is that it fully protects architects against owners who attempt to appropriate design information without full payment while it permits the free borrowing by other architects for which the copyright minimalists discussed above advocate. [1] The defeasible nature of pre-AWCPA copyright means that copyright is strong until the very point in time at which the architect is fully compensated for the design work—building completion—and that it then becomes weak, enabling unrestricted inter-generational borrowing by future architects.

In sum, the hidden wisdom of pre-AWCPA copyright was that it was well-engineered from the perspective of someone who does not expect copyright to solve the problem of free riding by strangers but who rather expects it to facilitate the disclosure of design information by architects to their clients. In fact, defeasible pre-AWCPA copyrights were well-engineered precisely because they allowed free riding by strangers while they simultaneously ensured that building owners could not appropriate valuable design information without full payment to architects.

In conclusion, I want to point out that viewing pre-AWCPA copyright as a well tailored solution for the architect’s disclosure dilemma not only offers an economic justification for pre-AWCPA copyright, but it also makes a novel contribution to the general scholarly literature on the use of intellectual property to resolve Arrow’s information paradox. Conventional discussions of Arrow’s information paradox assume that the intellectual property rights needed to resolve the paradox are always the same broad rights that are needed to prevent free riding by strangers. Pre-AWCPA copyright demonstrates that this assumption is faulty: it resolves the disclosure paradox without significantly reducing free riding by strangers. If the goal is to facilitate the one-time, bilateral exchange of information, more limited rights—for example, defeasible rights that effectively expire upon completion of the exchange—may sometimes be enough to achieve that goal.

[1] Personally, I believe that there are significant incentives for the creation of original architecture even absent a right to prevent future architects from copying an architectural design. See the paper for more on this point.

Kevin Collins is Professor of Law at Washington University in St. Louis. He can be reached at kecollins at wustl.edu.

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