The Class Action as Licensing and Reform Device

By Xiyin Tang. 2022

The age of digital distribution exacerbates transaction costs in two distinct ways. First, the dissemination of large quantities of works requires permissions from myriad copyright holders. Second, new technologies lower the cost of content creation, resulting in millions of individual creators, rather than a discrete set of large industry repeat players. The potential of class actions to address this rising transaction cost problem has gone largely unexplored. Instead, copyright scholars approaching the problem have advocated for either private ordering or legislative reform. But aggregate litigation fulfills a different function— something much closer to an administrative copyright—administering millions of licenses while filling in statutory gaps to address a rapidly shifting technological landscape. In this sense, copyright class actions also differ from procedural scholars’ understanding of mass litigation as either a regulatory or joinder device to address distinct past harms. Instead, this Article offers a novel view of the class action as both an efficient transactional mechanism—a hybrid public–private licensing scheme—and as substantive legal reform, updating copyright law for new technological uses. Settlements in copyright class actions have been used as blanket licenses—for both past harms and forward-looking royalties—where individual negotiations are impossible. They have also been progenitors to landmark copyright legislation—and indeed, some settlements themselves contain quasi-legislative components that solve long-standing problems in the copyright industry. This Article argues for a vision of copyright class actions as the future and for the promise of licensing and reform by litigation in an age of mass aggregation, far-flung rights, and legislative gridlock.

Subfields: Social Sciences & Humanities

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  1. Percy Liang
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