Special interest groups share a dream: enacting legislation customized for, and hopefully drafted by, their industry. Customized rules created via legislative capture, though, are the worst case scenario from a public choice perspective: they enable narrow interests to capture rents without generating sufficient societal benefits. American intellectual property law offers useful case studies in legislative capture: special interests have created their own rules three times in the past forty years with the Semiconductor Chip Protection Act, Audio Home Recording Act, and Vessel Hull Design Protection Act. Paradoxically, though, these customized IP systems have consistently disappointed their drafters: all three of these systems lie in desuetude. This result challenges the conventional wisdom about regulatory capture by special interests, suggesting there is less to fear from legislative capture than most legal scholars believe, in intellectual property and beyond. The puzzle is why, when given free rein to design the rules that govern them, interest groups have done such a poor job in seizing that advantage.
This Article brings together two scholarly debates. The first is within intellectual property: should IP doctrines be tailored by industry or comprise rules of general application? The second is within public choice: how risky is regulatory capture by special interests?
The Article identifies two key reasons for the ineffectiveness of customized regimes. First, industry groups are fragile, fractal-like coalitions of disparate interests that often fracture between creators and copyists. Groups must choose between narrower, more politically attainable legislation and broader, more rewarding proposals that strain the coalition. Second, interest groups embed current business models and technologies into these systems, making regulation vulnerable to disruptive innovation. It explories how these findings affect proposals for customized regimes for artificial intelligence, weather data, traditional knowledge, privacy, and fashion. The Article concludes with a cautionary tale for interest groups that is otherwise welcome news: customized regimes are often less effective, and less threatening, than previously supposed.
Berkeley Technology Law Journal (forthcoming)