Copyright Unbalanced: From Incentive to Excess (2 page)

The same challenges exist for copyright. Without copyright, there would still be songs written and movies made. Congress just thinks there wouldn’t be
enough
. So, it offers a subsidy in the form of copyright protection to incentivize more creative output. The same questions we asked about renewable energy present themselves: How does Congress know we wouldn’t have “enough” creative works without copyright? And assuming it knows that, how does it know the right amount of incentive to offer?

The first Copyright Act, which the Framers legislated, was limited to maps, charts, and books, which meant that other kinds of expressive works, such as songs and plays, were not protected. The Framers must have thought they would get enough such works without a subsidy. Were they wrong? Today songs and plays are protected, but fashion designs are not. Do we have the right balance now? How do we know?

The first Copyright Act also set a copyright term of 14 years renewable for 14 more, and required authors to register their works before receiving protection. Was 14 years enough, or too little? Today the copyright term is life of the author plus 70 years. Is that too much, or not enough? How do we know?

Also, requiring registration and renewal meant that only those authors who sought a subsidy got one. Only 5 percent of books published at the time were registered for copyright, and a small minority of their authors sought renewal, making the subsidy modest and somewhat self-regulating.
⁹
Today there is no requirement for registration or renewal, and anything you write is automatically protected whether you want it to be or not. Does such a massive trade of access for incentive get us closer to striking the delicate balance? How do we know?

This is not to say that because the ideal contours of copyright are unknowable, we should therefore have no copyright. After all, we also don’t know that zero is the right amount of copyright. However, understanding that there is a knowledge problem in copyright is useful. It tells us that while Congress may inevitably have to make an educated guess when it designs copyright, it should be humble and not take lightly the possibility that it will strike the wrong balance and introduce serious inefficiency.

Unfortunately, humility and restraint are not qualities readily found in the modern Congress. As a result, we should question whether it has struck the right balance today. We should also question why Congress’s quest for a delicate balance has required such massive trades in one particular direction.

If the probability of striking the right balance for copyright didn’t seem unlikely enough given the knowledge problem, consider then that the body charged with striking that balance is Congress.

The process by which the terms and scope of copyright are decided is a political one. This means that as it designs the contours of copyright, Congress will be picking winners and losers. Just as it might pick to subsidize solar- over nuclear-energy projects, Congress today has chosen to extend copyright protection to architecture and boat hull designs, for example, but not to fashion or aircraft designs.

It might be necessary for Congress to have such discretion in order to properly formulate a property right, but it also invites rent-seeking. Affected parties will undoubtedly invest resources to influence the design and enforcement of copyright with a goal of advantaging themselves and harming competitors—not benefitting the public, which is the object of copyright. Such activity is not only wasteful, it also makes it even less likely that Congress will do the right thing and strike the proper balance in its trade of access for incentive.

Retroactive term extension presents the clearest example of harmful rent-seeking in copyright. As we have seen, copyright’s rationale is that potential authors are incentivized to create by having exclusive control of their works for some number of years. You can imagine that Congress may want to lengthen this term if it finds that it has not created a sufficiently strong incentive to elicit “enough” creative productivity. But any such lengthening, one would think, should apply only to new works. After all, increasing the protection afforded to a work that has already been created can’t possibly incentivize its author to create the work, for the simple reason that
it has already been created
. Yet this is what Congress has done time and again.

It seems like a joke, but each time the copyright on the Walt Disney character Mickey Mouse was about to expire, and the happy rodent was about to become a shared cultural icon like Santa Claus, Hamlet, and Uncle Sam, Congress has extended the copyright term not just prospectively for new works, but also retroactively for existing works. From the original 56 years it was entitled to under the 1909 Act, to life of the author plus 50 years in 1976, to life plus 70 years in 1998. If the pattern holds, we can expect another retroactive copyright term extension before the Mickey Mouse copyright expires in 2023.
¹⁰

The problem is that Mickey Mouse already exists, and extending its copyright term cannot possibly incentivize Walt Disney to create Mickey Mouse. Not only is it a logical impossibility, but it’s a sad fact that Walt Disney is dead, and increasing the protections afforded to his works can’t possibly incentivize him to do anything.
¹¹

Retroactive term extensions do not serve the purpose copyright was originally intended to serve. They are nothing more than naked protections against competition, sought by the holders of existing copyrights. And not only can’t retroactive extensions incentivize creators, but they also create a perverse incentive to invest in rent-seeking to acquire such extensions rather than investing in new creative work.

In Europe, the copyrights on the Beatles’ first recordings were about to expire in 2013. Songs like “Love Me Do” would have joined classics like “Camptown Races” or “Danny Boy” in the public domain.
¹²
But music publishers lobbied for and got a 20-year retroactive term extension, stretching their government-granted monopoly on songs by the Beatles, Elvis, and many other popular musicians of the ’60s until the 2030s. What the public got in return for this grant, if anything, is unclear.

And that’s just it. Copyright’s political problem is a classic case of concentrated benefits and diffused costs. Hollywood, the music industry, and book publishers reap the rewards of increased protection, while the public bears the costs. The copyright industries can easily organize themselves into lobbies that have every incentive to invest heavily in acquiring greater protections, while individual members of the public, the nominal beneficiaries of copyright, face a collective action problem that keeps them from organizing against stronger copyright laws.

Congress is supposed to represent the public’s interest, but it has abdicated that responsibility. As Jessica Litman has carefully documented, Congress has turned over the responsibility of crafting copyright law to the representatives of copyright-affected industries.
¹³
That is, lobbyists write the copyright laws—not just figuratively, but literally.

For more than 100 years, copyright statutes have not been forged by members of Congress and their staff, but by industry, union, and library representatives who meet (often convened by the Copyright Office) to negotiate the language of new copyright legislation. As Litman explains, “When all the lobbyists have worked out their disagreements and arrived at language they can all live with … they give it to Congress and Congress passes the bill, often by unanimous consent.”
¹⁴

The public does not have a seat at the negotiating table, and Congress and the Copyright Office have tended to see copyright holders—not the public—as their constituents. What we have is capture, a government failure that conservatives and libertarians have long abhorred because it allows private parties to wield the power of government to grant privileges and limit competition. Copyright today is a public choice fiasco.

Copyright’s knowledge and political problems result in a dysfunctional system that today looks more like an out-of-control government program, granting subsidies and privileges to special interests, than a rational system of statutory property. By almost any measure, copyright has exploded over the last 30 or 40 years, shifting the balance markedly in one direction.

“Terms of protection are longer, the number of things that are copyrightable has increased, it is easier to qualify for copyright protection, copyright owners have broader rights to control uses of their works, and penalties are harsher,” writes Mark Lemley. “In addition, Congress has created entirely new rights.”
¹⁵

Perhaps worse is that in the name of further strengthening copyright, Congress has gone beyond establishing property rights and has moved to place restrictions on technology. The Digital Millennium Copyright Act of 1998 (DMCA), for example, criminalized the production or dissemination of technology that circumvents copy protection. The result is that while it was completely legal to make a backup copy of an analog VHS tape, it is now illegal to do the same with a DVD. As Christina Mulligan explains in
chapter 5
, the DMCA not only diminishes users’ long-held rights to access information, but it also harms competition and free expression.

More recently, Congress attempted to pass the Stop Online Piracy Act (SOPA), which was defeated after vociferous online protests. That law would also have moved copyright policy into the realm of regulating technology. It would have required service providers to alter the Internet’s Domain Name System to block allegedly infringing websites. As David Post explains in
chapter 3
, any benefits of increased copyright protection SOPA could have provided would have been outweighed by the damage it would have done to the Internet’s technical and legal infrastructure.

Finally, the last decade or so has also seen a dramatic rise in the criminal enforcement of copyright, a departure from the traditional practice of civil suits by copyright holders against suspected infringers. Donald Harris has compared the current state of affairs to the Prohibition era because law has outpaced societal norms.
¹⁶
There might also be a comparison to the drug war. As Tim Lee explains in
chapter 4
, the federal government now routinely employs civil asset forfeiture to seize the domain names, servers, and other assets of alleged infringers and online intermediaries. Such seizures take place before the owners are convicted of any crime and sometimes property is seized without the owners ever being charged.

Conservatives and libertarians, who are naturally suspicious of big government, should be skeptical of an ever-expanding copyright system. Congress today routinely shifts the copyright balance in only one direction: away from public access and freedom, and toward greater and deeper privileges for organized intellectual property interests. If we take economics and public choice seriously, then we should be concerned.

There is no incompatibility between respect for property and wariness of a radically unbalanced copyright system. Conservative politicians are beginning to understand this. As Reihan Salam and Patrick Ruffini point out in
chapter 2
, the anti-SOPA movement was led in part by Tea Party activists, and Republican members of Congress were the first to drop their support for the bill while Democrats like Al Franken defended it to the bitter end. After all, the entrenched interests copyright protects—Hollywood movie and music producers and New York publishers—tend to favor the political left.

Conservatives and libertarians should begin to think differently about copyright. We should ask ourselves, How much is enough protection? And how much is enough enforcement? As Eli Dourado points out in
chapter 6
, the system we have today likely far exceeds what we need in order to offer authors an incentive to create. And we should not only be skeptical of the inevitable calls for yet stronger protections, but we should seek serious reform as well. Tom Bell suggests in
chapter 7
that perhaps the Framers got it right, and we should consider returning to the original Copyright Act.

If we can for a moment put aside our foundational disagreements about the nature of intellectual property rights, conservatives and libertarians may find that there is much agreement about the excesses and deficiencies of our current system. And we may also find that we are the best situated to lead a reform.

NOTES

1
.    Ayn Rand, “Patents and Copyright,” in
Capitalism: The Unknown Ideal
, ed. Ayn Rand (New York: Signet Books, 1967), 131.

2
.    For a great discussion of the differences between customary and common law, see John Hasnas, “Hayek, Common Law, and Fluid Drive,” New York University Journal of Law & Liberty 1 (2005): 79–110,
http://www.law.nyu.edu/ecm_dlv3/groups//files/01/46/69/f014669/public/@nyu_law_website__
journals__journal_of_law_and_liberty/documents/documents/ecm_pro_
060886.pdf
.

3
.    It should also be noted that it is unclear whether copyright is subject to the Fifth Amendment’s takings clause. Thomas F. Cotter, “Do Federal Uses of Intellectual Property Implicate the Fifth Amendment?”
Florida Law Review
50 (1998): 529, 532 (noting that the question “has evoked wildly differing responses, ranging from the view that virtually all government uses of intellectual property constitute takings to the view that virtually none of them do”). While the question remains undecided for copyright, the Federal Circuit in
Zoltek Corp. v. United States
recently held that the Fifth Amendment does not apply to patents. 442 F.3d 1345, 1350 (Fed. Cir. 2006). In that case, the court drew a distinction between traditional property and statutorily created patents, noting, “As the Supreme Court has clearly recognized when considering Fifth Amendment taking allegations, ‘property interests … are not created by the Constitution. Rather, they are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law.’ Here, the patent rights are a creature of federal law.” Ibid., 1352. This holding could suggest a similar outcome for copyright.