11. "The DFC was forged in 1995 in response to the release of the Clinton administration's White Paper on Intellectual Property and the National Information Infrastructure. The White Paper recommended significantly altering existing copyright law to increase the security of ownership rights for creators of motion pictures, publishers and others in the proprietary community. Members of the DFC recognized that if the policy proposals delineated in the White Paper were implemented, educators, businesses, libraries, consumers and others would be severely restricted in their efforts to take advantage of the benefits of digital networks." See http://www.dfc.org/dfc1/Learning_Center/about.html.
12. See the classic account in Mancur Olson, The Logic of Collective Action: Public Goods and the Theory of Groups, 2nd ed. (Cambridge, Mass.: Harvard University Press, 1971).
13. See note 2 above.
14. Pub. L. No. 105-147, 111 Stat. 2678 (1997) (codified as amended in scattered sections of 17 and 18 U.S.C.).
15. Pub. L. No. 105-298, 112 Stat. 2827 (1998) (codified as amended in scattered sections of 17 U.S.C.).
16. S 2291, 105th Cong. (1998).
17. Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 (1984).
18. See Tina Balio, Museum of Broadcast Communications, "Betamax Case," Encyclopedia of TV (1997), available at http://www.museum.tv/archives/etv/B/htmlB/betamaxcase/ betamaxcase.htm ("The Betamax case went all the way to the Supreme Court, which reversed the appeals court decision on 17 January 1984. By 1986, VCRs had been installed in fifty percent of American homes and annual videocassettes sales surpassed the theatrical box-office."). The year 1986 was also the peak of the video rental market: "Video's high mark, according to studies by A. C. Nielsen Media Research, was in late 1986, when an estimated 34.3 million households with VCR's took home 111.9 million cassettes a month, or an average of 3.26 movies per household." Peter M. Nichols, "Movie Rentals Fade, Forcing an Industry to Change its Focus," New York Times (May 6, 1990), A1.
19. For background, see Wendy Gordon, "Fair Use as Market Failure: A Structural and Economic Analysis of the Betamax Case and Its Predecessors," Columbia Law Review 82 (1982): 1600-1657. For accounts that imagine a reduction of fair use as transaction costs fall, see Edmund W. Kitch, "Can the Internet Shrink Fair Use?," Nebraska Law Review 78 (1999): 880-890; Robert P. Merges, "The End of Friction? Property Rights and the Contract in the 'Newtonian' World of On-Line Commerce," Berkeley Technology Law Journal 12 (1997): 115-136. This argument has hardly gone unanswered with articles pointing out that it neglects both the social values of fair use and the actual economics of its operation. See Jonathan Dowell, "Bytes and Pieces: Fragmented Copies, Licensing, and Fair Use in A Digital World," California Law Review 86 (1998): 843-878; Ben Depoorter and Francesco Parisi, "Fair Use and Copyright Protection: A Price Theory Explanation," International Review of Law and Economics 21 (2002): 453-473.
20. "I believe the answer to the question of justification turns primarily on whether, and to what extent, the challenged use is transformative. The use must be productive and must employ the quoted matter in a different manner or for a different purpose from the original." Pierre N. Leval, "Toward a Fair Use Standard," Harvard Law Review 103 (1990): 1111.