Derivable Works

Abstract

From sequels and spinoffs to physical merchandise, copyright and trademark law together give a creative work’s owner exclusivity over a range of derivative products. It is often said that this enhanced appropriability encourages firms to spend money producing the underlying works. Less discussed, however, is what kinds of works it is encouraging them to spend money on. How, in other words, does providing control over a work’s derivatives affect the direction of creative firms’ investment?

This Article offers a theory. Granting originators exclusivity over derivative works and their related merchandise can enable marginal investment to tilt toward what I call derivable works: works that, from the owner’s ex ante perspective, are most likely to generate marketable derivatives. Derivable works should be at the center of derivative-rights analyses because those rights selectively raise expected values for the subset of works from which derivatives predictably flow. By making ownership of rights in a derivable work often the most feasible entryway to derivative markets, IP law raises the opportunity cost of producing a standalone project. The more valuable the derivative markets become, the less attractive standalone projects look in comparison.

I examine this phenomenon through a case study of the U.S. film industry. Changing economics have increased the private value of protectable content that is best positioned to generate more protectable content. Filmmakers today are spending more to produce derivative films than before, and consumers are likewise spending more to see them. Studios are racing to launch new franchises and extending existing ones, while standalone films face new challenges to profitability. Though IP law is not solely causing these shifts, it is contributing to them by raising the private value of derivable content. They may not realize it, but IP policymakers face a choice on which direction to encourage investment to go. What they decide can affect which films are likely to be made, who is likely to make them, and how consumers will likely be able to access them.

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About the Author

Associate Professor of Law, Vanderbilt Law School.

By uclalaw