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Tax incentives. One approach to altering the cost calculus in favor of abandonment would be to leverage the tax system to provide rights holders marginal economic incentives to part with their works. Existing tax law countenances donations of intellectual property, including copyrighted works, to charitable organizations and branches of state and federal government.272 _{For example, Irving Berlin donated}

his interest in “God Bless America” to a trust that supports the Boy Scouts and Girl Scouts.273 _{As noted above, Carol Highsmith has}

donated more than 50,000 images to the Library of Congress on a copyright-free basis.274 _{The Library has also elected to make other}

works in its collections available for unrestricted public use.275 _But

nothing requires that works donated to the Library of Congress, or any other government entity, be dedicated to the public domain.276

Likewise, the donation of works to a non-profit organization need not result in abandonment. Those contributions are merely assignments—transfers of copyright ownership from one party to another. In both cases, abandonment would require some further evidence of an intent to eliminate the copyright, either by the donor at the time of transfer or by the donee organization after the fact. Whether donated to the Library of Congress, an existing organization like Creative Commons or the Internet Archive, or to a newly formed non-

272 _{26 U.S.C. § 170(c) (2018). (defining “charitable contribution” to include a gift to}

“A State, a possession of the United States, or any political subdivision of any of the foregoing, or the United States or the District of Columbia, but only if the contribution or gift is made for exclusively public purposes.”

273 _{William Glaberson, Irving Berlin Gave the Scouts A Gift of Song, N.Y.TIMES,}

Oct. 14, 2001, https://www.nytimes.com/2001/10/14/us/irving-berlin-gave-the- scouts-a-gift-of-song.html.

274 _{See supra note 56. Highsmith’s initial gift to the Library included a number of}

transparencies, negatives, and prints, but in the same document she “dedicate[d] to the public all rights, including copyrights, throughout the world … in this collection.” Id. at Exhibit I.

275 _{See supra note 113.}

276 _{The government can own copyrights assigned by non-governmental authors. 17}

profit that committed to dedicating works to the public domain, such works could qualify as charitable contributions.277

But the current tax treatment of copyrighted works provides little incentive for owners to part with them. The Internal Revenue Code distinguishes between two types of copyrighted works for the purposes of charitable deductions: those donated by their creators and those donated by non-creators. Since 1969, if the creator of a work donates it, they are not entitled to deduct its fair market value, but only. out of pocket expenses associated with the work that have not been previously deducted.278 _{In many cases, that translates to no deduction}

whatsoever.279 _{In contrast, works donated by someone other than their}

creators were deductible historically at fair market value.280 _{But in}

2004, Congress tightened the rules for donations of intellectual property amid concerns about patent valuation abuses.281 _{Under the}

new rules, the donor’s tax deduction is the lesser of asset’s fair market value or its tax basis. Typically, that tax basis is very small, and again, in many cases it is zero.282

More generous deducibility could yield an increase in abandonment. But it may sacrifice significant federal revenue in the process. The IRS discourages large-scale fraud by requiring a qualified appraisal for any charitable deductions over $5000.283 _But

277 _{Martin Skladany has offered a similar proposal to encourage the dissemination}

newly-designated public domain works. MARTIN SKLADANY, BIG COPYRIGHT VERSUS THE PEOPLE (2018).

278 _{Charitable contributions of creators are governed by the general rule in 26 U.S.C.}

§ 170(e)(1)(A). Income from their sale is not considered a capital asset, so the value is reduced by any gain from a hypothetical sale. Id. § 1221(a)(3).

279 _{Xuan-Thao Nguyen & Jeffrey A. Maine, Giving Intellectual Property, 39 U.C.}

DAVIS L.REV. 1721 (2006).

280 _Id.

281 _{See Jobs and Growth Tax Relief Reconciliation Act of 2003, S. 6457, 108th Cong.}

(2003) (noting “widespread abuse involving donations of patents and similar property”).

282 _{Nguyen & Maine, supra note 279. Deductions arising from such donations must}

be reduced by any long-term capital gains. 26 U.S.C. § 170(e)(1)(B)(iii). To partially address the disincentive created by these harsher rules, Congress provided for future deductions, over a 12-year phase-out period, based on any revenue derived by the donee from the gift. Id. § 170(m)(3). This provision does little to encourage copyright abandonment.

283 _{INTERNAL REVENUE SERVICE,PUBLICATION 561,DETERMINING THE VALUE OF}

DONATED PROPERTY 8-9 (2017). In addition, for items valued at $50,000 or more, the IRS Art Advisory Panel provides an additional layer of scrutiny. INTERNAL REVENUE MANUAL 4.48.2.

$1000 or $100 deductions for abandoned photos, emails, and mediocre poetry could add up. Conversely, there’s a risk that given the recent increase in the standard deduction, itemizing low dollar value donations of works might insufficiently incentivize individual copyright holders. Finally, attaching a monetary benefit to an otherwise altruistic act like donating a work to the public may actually dissuade would-be abandoners by framing the act in terms of financial self-interest rather than concern for others.284

Cash incentives. A simpler approach would offer copyright holders modest cash payments to abandon. If, rather than charging rights holders $105 to file a notice of abandonment, the Copyright Office gave abandoning rights holders $10 per work, we would expect to see a considerable increase in abandonment.

But this approach faces its own set of challenges. First, calibrating payments to induce the optimal levels of abandonment would be no easy task. A payment of $1000 per work would undoubtedly enrich the public domain, but may lead many songwriters or photographers to abandon works with considerable commercial potential. Second, cash payments increase the risk of gaming the system. Even at $10 each, a dedicated, if unskilled, poet could make a tidy sum producing soon-to-be-abandoned works. An annual or lifetime cap on payments could mitigate some of that risk. But more generally, a cash-based abandonment incentive could prove massively expensive given the number of unwanted copyrighted works produced each year. Justifying that expense in light of other demands on the federal budget would be difficult.

Of course, there is nothing preventing a private entity from investing its resources in enriching the public domain. The Arcadia Fund, for example, has made an $850,000 grant to MIT Press to support open access monographs.285 _{Perhaps public domain}

dedication would prove an even more attractive investment. Even for- profit corporations may have some incentive to foot the bill for abandonment, although they are more likely to prefer exclusive licenses to abandonment.

284 _{See Dave Fagundes, Why Less Property Is More, 103 IOWA L.REV. 1361, 1395-}

98 (2018) (citing literature showing that self-interest and altruism tend to compete directly with each other, and that the former tends to predominate).

285 _{MIT Press, The MIT Press Receives a Generous Grant from the Arcadia Fund to}

Develop and Pilot a Sustainable Framework for Open Access Monographs, Oct. 3, 2019, https://mitpress.mit.edu/blog/mit-press-receives-generous-grant-arcadia-

Golden swan insurance. In Part II, we discussed “golden swans”—works that generate substantial and unexpected value late in the copyright term—and authors’ fears of parting with such works in light of the costlessness of owning a copyright. The golden swan problem is a matter of risk assessment clouded by optimism bias. But insurance may furnish a solution.

Consider a system that promised any owner who abandoned their work compensation if that work earned significant revenue either through being republished or incorporated into a derivative work. Such a system should be funded and managed by a federal agency, like the Copyright Office, since private funding would prove infeasible. Given that the public receives the benefit of abandonment, public funding makes some measure of sense even if securing significant federal dollars for golden swan insurance is unlikely. Aside from that budgetary hurdle, the chief practical challenges of such a system would be accounting for the profit earned by a given work and administering payouts. One partial solution would be to keep the compensation structure as simple as possible. The policy could give donors of abandoned works a set rate (e.g., $10,000) if their abandoned work earns gross revenue286 _{in excess of some threshold (e.g.,}

$100,000).287 _{This may undercompensate owners whose works}

become true blockbusters. But such outcomes are vanishingly rare. The aim of the policy is less to ensure full compensation and more to assuage owners’ hesitance to abandon a potential golden swan. The mere possibility of compensation may suffice to overcome owners’ optimism bias.288

286 _{Abandoned works are in the public domain, but they may still be used to create}

revenue, such as by creating valuable derivative works.

287 _{Admittedly, determining the contribution of a particular work to revenues}

generated by a derivative work presents a more complex challenge.

288 _{A rough analogy is FEMA flood insurance. The federal government offers}

residents of homes in designated high-risk areas low-cost insurance to compensate them for damage in the event of a flood. The policies do not promise full compensation, but only reimbursement up to a cap well below the property’s value. They thus function as an enticement to offset concerns about possible low- probability, high-impact risks. But unlike FEMA flood insurance, golden swan policies would have vanishingly small payout risks. And the behavior they incentivize is socially beneficial (dedicating works to the public domain) as opposed to socially harmful (building homes likely to contribute to increased environmental damage). See Bonnie Kristian, The perverse incentives of the National Flood Insurance Program, THE WEEK, Aug. 29, 2017,