Thursday, January 16, 2003

In the Eldred v. Ashcroft case (involving the Copyright Term Extension Act), Justice Breyer once again showed that of all the Justices, he is the one who best understands the economics of regulation. That should come as no surprise; regulatory economics has always been his area of expertise, both as a law professor and before (he worked on airline deregulation for the Senate in the 1970s). My favorite passages from his dissent:
What copyright-related benefits might justify the statute’s extension of copyright protection? First, no one could reasonably conclude that copyright’s traditional economic rationale applies here. The extension will not act as an economic spur encouraging authors to create new works. * * * No potential author can reasonably believe that he has more than a tiny chance of writing a classic that will survive commercially long enough for the copyright extension to matter. After all, if, after 55 to 75 years, only 2% of all copyrights retain commercial value, the percentage surviving after 75 years or more (a typical pre-extension copyright term)–must be far smaller. * * * And any remaining monetary incentive is diminished dramatically by the fact that the relevant royalties will not arrive until 75 years or more into the future, when, not the author, but distant heirs, or shareholders in a successor corporation, will receive them. Using assumptions about the time value of money provided us by a group of economists (including five Nobel prize winners), * * * it seems fair to say that, for example, a 1% likelihood of earning $100 annually for 20 years, starting 75 years into the future, is worth less than seven cents today. * * *

What potential Shakespeare, Wharton, or Hemingway would be moved by such a sum? What monetarily motivated Melville would not realize that he could do better for his grandchildren by putting a few dollars into an interest-bearing bank account? The Court itself finds no evidence to the contrary. It refers to testimony before Congress (1) that the copyright system’s incentives encourage creation, and (2) (referring to Noah Webster) that income earned from one work can help support an artist who “ ‘ continue[s] to create.’ ” But the first of these amounts to no more than a set of undeniably true propositions about the value of incentives in general. And the applicability of the second to this Act is mysterious. How will extension help today’s Noah Webster create new works 50 years after his death? Or is that hypothetical Webster supposed to support himself with the extension’s present discounted value, i.e., a few pennies? Or (to change the metaphor) is the argument that Dumas fils would have written more books had Dumas père’s Three Musketeers earned more royalties?

[My view] finds empirical support in sources that underscore the wisdom of the Framers’ judgment. See CRS Report 3 (“[N]ew, cheaper editions can be expected when works come out of copyright”); see also Part II—B, supra. And it draws logical support from the endlessly self-perpetuating nature of the publishers’ claim and the difficulty of finding any kind of logical stopping place were this Court to accept such a uniquely publisher-related rationale. (Would it justify continuing to extend copyrights indefinitely, say, for those granted to F. Scott Fitzgerald or his lesser known contemporaries? Would it not, in principle, justify continued protection of the works of Shakespeare, Melville, Mozart, or perhaps Salieri, Mozart’s currently less popular contemporary? Could it justify yet further extension of the copyright on the song Happy Birthday to You (melody first published in 1893, song copyrighted after litigation in 1935), still in effect and currently owned by a subsidiary of AOL Time Warner?)
And this:
Finally, the Court complains that I have not “restrained” my argument or “train[ed my] fire, as petitioners do, on Congress’ choice to place existing and future copyrights in parity.” * * * The reason that I have not so limited my argument is my willingness to accept, for purposes of this opinion, the Court’s understanding that, for reasons of “[j]ustice, policy, and equity”–as well as established historical practice–it is not “categorically beyond Congress’ authority” to “exten[d] the duration of existing copyrights” to achieve such parity. * * * I have accepted this view, however, only for argument’s sake–putting to the side, for the present, Justice Stevens’ persuasive arguments to the contrary, ante, at 5—22 (dissenting opinion). And I make this assumption only to emphasize the lack of rational justification for the present statute. A desire for “parity” between A (old copyrights) and B (new copyrights) cannot justify extending A when there is no rational justification for extending B. At the very least, (if I put aside my rationality characterization) to ask B to support A here is like asking Tom Thumb to support Paul Bunyan’s ox. Where the case for extending new copyrights is itself so weak, what “justice,” what “policy,” what “equity” can warrant the tolls and barriers that extension of existing copyrights imposes?


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