It causes a flood of litigation.

In an ideal world, the stringency of § 412 would be relaxed, and it would come to operate along the lines of § 411--requiring registration prior to commencing the lawsuit and not earlier. Alternatively, the "grace period" might be extended, especially given the periodic term extensions that copyright law has seen over the years, 203 which rely on the assumption that creative works hold value for longer and longer periods of time. 204 Yet, legislative modification of § 412 is highly unlikely, and will likely have to accompany a broader reform of copyright's statutory damages regime. 205 The net effect of the provision and the possibility of third party funding is therefore likely to accrue to authors (i.e., creators) who worry about high litigation costs and about being unable to litigate an infringement suit on their own, who then choose to register their works voluntarily merely in order to preserve the option of enticing third party funders to acquire their claims in due course. In the short term, then, § 412 will serve to deter the entry of third parties into copyright litigation; in the medium term, however, it is likely to induce a greater number of creators to register their works hoping to entice third parties. As the involvement of third parties grows, and copyright owners are able to anticipate the kinds of claims that the market best responds to, § 412 is likely to produce an equilibrium where works most suited to third party funding come to be registered.

<<FOOTNOTE 205 BEGINS>>

Any modification to § 412 suggested here would certainly have to accompany other reforms to copyright's regime of statutory damages, as others have already noted. See Samuelson & Wheatland, supra note 75, at 509--10 (documenting problems with copyright's statutory damages regime and suggesting potential legislative reforms). As currently operationalized, courts award plaintiffs statutory damages simply upon request, without any inquiry into the purpose of the award. See 17 U.S.C. § 504(c)(1) ("[T]he copyright owner may elect, at any time before final judgment is rendered, to recover, instead of actual damages and profits, an award of statutory damages . . . ."). This practice undoubtedly originated in the Copyright Act's fusion of compensatory and punitive purposes into a single award of statutory damages. The author has elsewhere argued that this reality has encouraged the emergence of copyright trolls and that the only way to curb their activities is by reforming copyright's regime of statutory damages by making a court's award of such damages contingent upon a plaintiff's showing that it suffered some injury of the kind that would have triggered copyright law's very need to award damages. See Balganesh, Uneasy Case, supra note 6, at 736--38 (describing phenomenon of trolling and its reliance on statutory damages). This regime would in principle track antitrust law's "antitrust injury" rule, and serve to ensure that the regime is not misused opportunistically. Id. at 770--73. Expanding the allowance for statutory damages by relaxing the requirement in § 412 would thus have to accompany the introduction of this safeguard, so as to ensure that the entry of third parties seeking to fund legitimate claims does not exacerbate the problem of copyright trolling. Cf. James DeBriyn, Shedding Light on Copyright Trolls: An Analysis of Mass Copyright Litigation in the Age of Statutory Damages, 19 UCLA Ent. L. Rev. 79, 110 (2012) (claiming "statutory damages give copyright holders the incentive to litigate over such small losses," thereby creating "a flood of litigation").

<<FOOTNOTE 205 ENDS>>