Wendy J. Gordon

Boston University School of Law Working Paper 01-22


This article suggests that that from a neoclassic economic perspective, common law defenses to property torts can be divided into two categories. The two types correspond in a rough but useful way to the categories of defense in criminal law known as "excuse" and "justification". The article then elaborates the Calabresi and Melamed framework and applies it to the excuse/justification distinction, and uses the resulting analysis to clarify the 'fair use' defense of copyright law.

"Excuse" connotes a response that the law allows but does not want emulated. Therefore, from a market perspective, "excuse" can be used to denote behavior that we would prefer to occur in a market, but which we allow to bypass the market because of particular circumstances. In cases of potential "excuse", then, relying on the market becomes doubtful because of a failure of perfect market conditions (perfect information, absence of transaction costs, and so forth), but economic norms remain the appropriate governing criteria. In such a case, if the transaction cost problem or other market malfunction were eliminated, the court would want the defendant to proceed through the market. At best, therefore, the defendant's market bypass is "excused".

By contrast, the notion of "justification" connotes behavior that, even absent special circumstances, we would be willing to see emulated. Market bypass can be "justified" when significant noneconomic norms or noncommodifiable interests give rise to a court's doubts about the reliability of the market as a mode of achieving social goals. Justification occurs when, even if market conditions were perfect, it would be normatively appropriate for the defendant to proceed outside the market's ordinary process of consent and payment.

The article also shows that excuse and justification need be applied separately to three levels of inquiry: (1) the defendant's behavior in using the plaintiff's property, (2) the defendant's having failed to obtain the property owner's consent, and (3) the defendant's having failed to pay compensation.

The article suggests, inter alia, that cases of "excuse" are curable in a way that cases of "justification" are not. It also suggests that a property owner who can show that the defendant's behavior significantly harms him is likely to be able to defeat claims of "excuse", while claims of "justification" are likely to be more robust against showings of plaintiff harm.

For an example of "excuse" in copyright, consider cases where transaction costs prevent otherwise-desirable negotiations between copyright owners and users, e.g., where individual copiers are making photocopies of articles, or are making videocassette recordings of television programs at home. A court might well order "fair use" as the only practicable way to preserve the socially-valuable copying behavior, but if so, the failure of payment and consent is only "excused". When transaction costs decrease, the court might instead enforce the copyright and expect consensual licensing to evolve.

As an example of "justification" in copyright law, consider cases where a biographer quotes from his subjects' letters or other writings, or where an art critic reproduces an image in order to explain its merits and defects to her audience. Or consider a parodist who uses the heart of her target's work in order to ridicule it. Obtaining consent in such a context is likely to lead to watered-down criticism and biography. Similarly, a requirement that a potential parodist obtain consent may prevent the parody from coming into being. Therefore, in such cases we may affirmatively want the law to free the biographer, critic or parodist from any obligation to obtain the consent of their targets. If so, proceeding without obtaining consent is "justified" regardless of the presence or absence of perfect market conditions.

Whether lack of compensation is also "justified" in the latter class of cases is a complex question. The article suggests that although there is some attraction in turning to judicially-imposed compulsory licenses, the imposition of such a 'liability rule' solution has some under-appreciated dangers.

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Wendy J. Gordon Contact Information

Boston University School of Law
765 Commonwealth Ave
Boston, MA 02215
(617) 353-4420

Presentation and Publication Information:

Forthcoming in THE COMMODIFICATION OF INFORMATION: SOCIAL, POLITICAL, AND CULTURAL RAMIFICATIONS (Neil Netganel & Niva Elkin-Koren, eds.) (Kluwer International, 2002).

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