Constitutionality of Copyright Term Extension
Congress's Copyright Giveaway
Richard A. Epstein
"Rule of Law" Piece in Wall Street Journal, December 21, 1998
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Click here for links to other items dealing with the constitutionality of copyright term extension, including the lawsuit brought by Stanford Professor Larry Lessig making a constitutional challenge.
See below for some letters written to the WSJ in response to Professor Epstein's article and for Dennis Karjala's short commentary on such letters.
Copyright © 1998 Richard A. Epstein. I have concluded that the importance of these views to the ongoing public policy debate and the noncommercial nature of this web site justify the reprinting of this editorial as a fair use under copyright law. Please do not copy for any purpose other than a fair or otherwise noninfringing use without the permission of Professor Epstein and/or the Wall Street Journal.
In this holiday season, we are reminded that it is better to give than to receive. But it is even better to give what you own -- not what belongs to other people.
Yet that's precisely what Congress and the president did when it presented Disney shareholders with an early Christmas present this year by passing the Copyright Term Extension Act. This measure, which the president signed in October, extends the period of copyright protection on existing copyrightable material by 20 years. For a grateful Disney, which led the lobbying for the legislation, this was no Mickey Mouse extension but a gift of billions of dollars in future revenues. Thanks to Congress's giveaway, its happy gang of cartoon characters -- Mickey, Donald, Goofy and Snow White -- won't soon slip into the public domain.
Our legal system recognizes no natural, perpetual right to copyright. Copyright's constitutional pedigree allows Congress to make take-it-or-leave it deals with authors. To promote their literary and scientific efforts, authors get the exclusive use of their work for a limited period of time.
In return, everyone gains the right to use the copyrighted material once its protected period is over. The limited period knocks out the monopoly restrictions on the dissemination of the work by allowing its free use to everyone else, including other authors. It also has the added virtue of keeping the government forever out of the business of controlling literary works forever.
This copyright bargain, however, only makes sense going forward. The works covered under the new law were produced with the incentives available under then existing law. The public gets no new quid pro quo from extending copyright protection for works already created. Removing these works from the public domain works a huge uncompensated wealth transfer from ordinary citizens to Disney, Time Warner and other holders, corporate and individual, of preexisting copyrighted material. It also produces a net social loss by restricting overall level of use of this material.
In other words, Congress's political conniving will cost the public billions. It may be unconstitutional to boot. Here's why.
When Congress takes property from a private individual for public use, it must compensate the holder of that property for the loss. One function of that protection is to prevent government from singling out an individual or group to bear exclusive burdens for benefits obtained by the public at large. A second function is to improve the odds that Congress only takes property with greater value in public than private hands, which won't often happen if it can snap up property for nothing, or even for less than it is worth.
The Constitution does a worse job with government givings than with government takings. But the applicable principles are the mirror image of those that govern moving assets from private to public hands.
Suppose the Disney board transferred Mickey's copyright to Michael Eisner's family without charge. Disney shareholders could recover the copyright from the Eisners just like they could recover transferred cash, land or Goofy's portrait. Similarly, Congress cannot transfer literary works in the public domain unless it receives a quid pro quo, conspicuously absent here, for the benefit of all in exchange.
More than 100 years ago, under what's known as the public trust doctrine, the Supreme Court set aside an Illinois grant of land to the Illinois Railroad as an improper disposition of public assets for private benefit. Similarly, the public trust doctrine ought to apply to the new grant of intangibles under the Copyright Extension Act. If anything, the mechanics for setting aside a transfer of intangible property are easy to work out, for no reconveyance of specific land has to be made to the government. Ordinary citizens can simply resist copyright infringement suits brought by holders of expired copyrights.
Defenders of the act have urged that the extension was necessary to allow U.S. firms to take advantage in the European Union of the 20 additional years of copyright protection available there. The applicable legal rule protects U.S. copyrights in the EU, and vice versa, only for the shorter period in either place.
Before the Copyright Term Extension Act, the shorter U.S. standard applied both here and abroad for cross-national copyrights. The act therefore benefits U.S. firms by allowing them to continue to charge for copyright use overseas. By the same token, it protects EU copyrights in the U.S. for another 20 years, and thus harms American consumers twice, once for domestic and once for European works.
Some readers might find it odd that I take so dim a view of the copyright holders' new claim in light of my nonstop condemnation of the paltry protection offered private property under the Constitution's takings clause. But the real-estate cases that sparked my criticism are very different; the individual owner has perpetual title in his own property while here the copyright holder's term had run out.
My position, moreover, does protect some copyright holders against a second provision of the new law -- the Sensenbrenner Amendment, which flatly exempts small restaurants, bars and shops from paying license fees for the right to broadcast copyrighted music. Congress's ad hoc pruning of existing property rights works no better for copyrights than for land: It is as unconstitutional as a hypothetical statute that allows only stamp clubs to use an owner's land free of charge while preserving to the owner the right to exclude all others.
Two wrongs don't make a right, in copyright law or anywhere else. Congress has the power to tinker with the length and scope of copyright protection for new works. But once rights have been created under an existing system, both sides of the bargain, public and private, should be respected.
The stability of property rights in the face of government intrigue is as important for literary work as it is for land or water. It is as necessary for rights in the public domain as for those in private hands. The Supreme Court shouldn't tolerate the copyright shenanigans of Congress on this or any other Christmas.
Mr. Epstein is professor of law at the University of Chicago, and author, most recently, of "Principles for a Free Society: Reconciling Individual Liberty With the Common Good" (Perseus, 1998).
Letters Responding to the Epstein Article
On January 8, 1999, the Wall Street Journal published two letters in response to Professor Epstein's article. Betty M. Dietsch of Marion, Ohio, wrote as follows:
In his Dec. 21 Rule of Law "Congress's Copyright Giveaway," Richard A. Epstein grants that the government's taking of copyrighted property from authors after 70 years (formerly 50) is akin to seizing real estate, but he points out that the law protects holders of real estate for perpetuity, whereas it does not offer that protection to copyright holders. Then he objects to the government's waiting 20 more years (approval of the Copyright Term Extension Act) before relieving authors of the lawful property.
Mr. Epstein's spin misapplies a law: "When Congress takes property from a private individual for public use, it must compensate the holder of that property for the loss." Therefore, he claims, the public now goes uncompensated after the copyright period expires. He justifies this seizure of copyrighted property by waving a red flag, saying that "Removing these works from the public domain works a huge uncompensated wealth transfer from ordinary citizens to Disney, et. al." What about the transfer of wealth from ordinary authors to the public? And shouldn't large entities that own copyrights be protected, too?
Ms. Dietsch seems to be starting from a false underlying assumption, namely, that copyright is some sort of inherent perpetual property right of authors and their descendants. But without a copyright statute, authors would have no exclusive right to any aspects of their works once the works were published. And the Constitution explicitly provides that copyright may endure only "for limited times." The statute creates a "bargain" between the author and the public: In order to induce authors to create works and make them generally available, the copyright statute recognizes certain exclusive rights in authors for a limited time. Part of the bargain is that the public gets free use of the work after the limited time expires. When an author creates a work, he or she knows how long that term is--a maximum of life + 50 years for individuals and 75 years for "corporate" authors until the recent extension. To extend the term in mid-stream--that is, to extend the term not only prospectively but also for works already in existence--makes the public wait longer for its share of the bargain. Consequently, Professor Epstein is perfectly correct in his analysis and conclusions.
Stephen R. Barnett, a Professor of Law at the Boalt Hall School of Law in Berkeley, California, also wrote as follows in response to Professor Epstein's article:
Prof. Epstein is correct in stating that the Copyright Term Extension Act may be unconstitutional. While creatively finding a basis for this conclusion in the public trust doctrine, however, Mr. Epstein overlooks the more evident ground in the Constitution's text. Congress is authorized to grant copyrights for a limited purpose: "to promote the Progress of Science and useful Arts." As Mr. Epstein points out, a wholesale and uncompensated extension of copyrights on works already created keeps those works out of the public domain while hardly promoting their creation. It therefore exceeds Congress's power under the Copyright Clause.
Professor Barnett is surely correct. How can extending copyright on existing works possibly promote the progress of science (knowledge)? Arguably, even extending the copyright term only prospectively (i.e., for newly created works alone) would hardly promote the progress of science or culture. For an argument that an extended term provides essentially no additional incentive to create works--once the term is as long as our term already was prior to adoption of the Sonny Bono Act--see the discussion contained in the 1998 Statement of Copyright and Intellectual Property Law Professors, submitted to Congress in opposition to what became the Sonny Bono Copyright Term Extension Act.