Politics & Policy

Myths and Facts about Copyright

What should a Republican policy look like?

Progressive academics and libertarian-oriented conservatives have found an area of harmony: bashing the conservative Republican Study Committee in the House over copyright law.

Two weeks ago, an RSC staffer wrote and released a policy brief on “Three Myths about Copyright Law and Where to Start to Fix It.” The paper was skeptical of copyright as an institution, which delighted the progressives who dominate legal academia. These folks have never met a property right of any sort that they liked, but their contempt for intellectual property is particularly intense. The paper also pleased the large section of the libertarian community that embraces tangible property but opposes rights in intellectual property.

Among the less intellectual classes, the paper found favor with much of the tech industry, led by mighty Google, which has a strong interest in demolishing intellectual-property rights. Consumers buy a package consisting of the content plus a mechanism for finding it (such as a search engine) and a telecommunications pipe for delivery. If content has no rights attached to it, it can be appropriated by the other participants without payment, which leaves more of the consumers’ dollars for search and delivery.

#ad#Naturally, the paper outraged the content industry, which has the wealth and glamour to be among the most politically powerful players in Washington. While the talent supports the Democrats, the business side of the industry is more even-handed, and the Republicans get their share. The RSC soon withdrew the paper, claiming it had received insufficient review. The withdrawal has led to the blogosphere equivalent of a public flogging, with both Left and Right wielding the whip. The reversal provided the big news hook — as usual, it is not the crime but the cover-up. To support the Republican-bashing theme of the official narrative, the paper has been built up as a work of genius. Matt Yglesias epitomized the tone in Slate: “An influential conservative group released a copyright reform memo that was so smart it had to immediately disavow it.”

In fact, the paper was mediocre, and should never have been released in the first place.

The big problem was with its basic premises, which were mostly on the silly side of erroneous.

The first idea identified as a “myth” was that copyright exists to compensate the creator. Not so, said the paper, since the preamble to the Constitution’s copyright clause says that its purpose is “to promote the progress of science and useful arts.” Therefore, the scope of the property right should be determined by the public interest, not by any concept of what the creator deserves.

This issue may be novel to the paper’s author, but it is a familiar topic in copyright-law circles. As the Supreme Court has said, the purpose is to promote science and useful arts, but the mechanism for achieving this is to recognize property rights. It is not clear why, in determining the boundaries of these rights, the concept of moral deserts should be excluded. Recognition of property rights has a utilitarian component, but this does not exclude considerations of right and justice in shaping its contours.

As Professor Mark Schultz, one of the most sensible analysts of copyright, puts it:

As between creators . . . and others, who has a better claim to control and exploit a work of authorship? Of course, to a dedicated [intellectual property] utilitarian, this question is irrelevant. Nobody deserves anything; society takes what it needs, subject to the need to persuade the producer to keep producing what the takers want.

The idea that a creator, whether of crops or books, should get only the minimum that “society” decides is necessary to keep him or her working might belong in the Democratic-party platform, but surely it does not belong in a paper from the RSC.

The second proposition branded as myth in the RSC paper was that “copyright is free market capitalism at work.” The paper denies this on the ground that content creators are given a monopoly, which is then enforced with excessive levels of statutorily set damages.

The idea that a copyright is a monopoly in any meaningful sense was demolished by Professor Edmund W. Kitch over a decade ago, in an article aptly titled “Elementary and Persistent Errors in the Economic Analysis of Intellectual Property.” Basically, an exclusive right to a bit of property is a very different thing from monopoly power over an entire market. As an analogy, a homeowner has an exclusive right to his house, but this does not mean he has a monopoly over the real-estate market. Any author or musician starving in his garret wishes that he had a monopoly. But he does not.

#page#As for the damages point, it is a valid concern, but it has nothing to do with the monopoly point. The crux of this issue, unnoted by the author, is that the computer-created problem of mass piracy and the difficulty of creating reasonable enforcement mechanisms under these new circumstances are luring the protectors of property into in terrorem enforcement, which is a bad idea anywhere. The solution is to find fair means of enforcing the right, not giving it up.

The third myth attacked in the paper is that the “the current copyright legal regime leads to the greatest innovation and productivity.”

#ad#This is akin to a myth about unicorns, in that it would be impossible to find anyone who believes it. Copyright law has always been a practical discipline. Its doctrines reflect the technology of the time. For example, if one needs expensive printing presses to produce a book, then the law need not be concerned with any piracy that is not conducted on a large scale.

With the invention of the hand-held scanner and the computer, the ambit of concern is rather different, and no one would claim that copyright law has kept up with technological developments over the past few decades. Some of the specific problems noted in the paper and elsewhere are very real: Copyright terms are too long; rights are overly convoluted and hard to pin down; transaction costs are too high; the easy availability of copying is attriting the creative community; orphan works, for which the copyright holders are unknown, present problems. The list is long.

We probably need a clean-sheet rewrite of copyright law, but the solutions to many current problems are far from obvious, and the risks of any such enterprise are so great as to daunt everyone with a stake in the system. So we keep muddling along, with the confusion abetted by those who profit from the current mismatch between law and technology.

Confusion is also caused by the content industry. Much of it really is as greedy and rapacious as its critics contend. The only property rights it cares about are its own; it has no sympathy for anyone caught up in the toils of the EPA or the local zoning board (unless the issue involves Malibu beach property, of course).

Conservatives are so angry with Hollywood over its unrelenting cultural degradation that they are eager to embrace any position that causes it pain. Furthermore, last year saw a complicated battle in Congress over the protection of content on the Internet. It was not clear exactly how far the provisions backed by the content industry and the Chamber of Commerce would reach, and there was real concern that the law, if enacted, would be subject to abuse and misuse. Nothing in the history of the industry or of the government’s use of broad vague laws, such as anti-racketeering statutes, alleviated this fear.

Despite all these concerns, the temptation for Republicans to reflexively embrace the foes of copyright should be resisted, because the church of property rights is greater than its servants.

If this noble sentiment is not sufficient motivation, then bear in mind that undermining copyright will increase rather than decrease the power of these large, avaricious corporations. If it is too difficult for an individual creator to defend his interests, then he must become a satellite of a large organization that can provide muscle to protect his work or that can integrate his content with distribution and advertising. In a world without copyright protection, creators are necessarily serfs.

So what should an RSC copyright policy look like? Well, it should start with some basics that are not myths:

‐ Copyright was recognized as a legitimate form of property right long before 1789, and the copyright clause of the Constitution was indeed meant to recognize both the natural rights and moral claims of creators and the importance of incentives. The language about science and useful arts explains the purpose of the grant, in contrast to the habit of the British crown of granting patents and monopolies to reward favorites. Under the U.S. Constitution, no copyright can be recognized that does not rest on creation.

‐ Creators want people to use their works. Customers want creators to produce. The idea that these two groups are engaged in a zero-sum tug of war is absurd. As in other economic relationships, everyone gains from trade, and the function of the government should be to establish rules for property rights, contracts, and markets that allow the participants’ gains to be realized.

‐ Physical property and intellectual property are on a continuum, with some profound similarities and some differences. The differences must be reflected in specific doctrines, in the same way that the rules governing different sorts of tangible property reflect differences in their characteristics. But the basic justifications, in terms of a mix of utilitarian and natural-rights considerations, remain constant.

‐ Copyright does not provide a “monopoly” in the sense in which that term is normally used, and anyone who repeats that irritating error should be ignored. (Patents present a different set of problems.)

‐ Many specific reforms should be enacted. My list would include shorter copyright terms; a requirement of registration and renewal, to show seriousness; a one-time requirement of registration of existing works to get rid of the orphan-works problem; and centralized databases to reduce transaction costs.

‐ The question of dealing with Internet piracy is damned hard, and no one has a good answer. Realistically, the system can tolerate a lot of leakage at the retail level as long as creators retain the right to move against commercial-grade piracy. It is also important that the content producers and the telecom distributors be free to strike bargains about piracy prevention. Technology taketh away and technology giveth, and it is far more efficient for Verizon or Comcast to police piracy than for battalions of lawyers to do so.

Perhaps most important, the RSC should not issue a policy brief on intellectual property as a discrete topic. It should address policy toward property in general, and take up intellectual property in the context of the broader topic.

The content industry should not be given a free ride on the coattails of great conservative philosophers of the past and present. If its producers believe that property rights are good things for them, then the RSC should extract in return explicit public recognition and political support for the proposition that property rights of all kinds are an essential element of a free and functioning market economy.

— James V. DeLong is the author of Ending Big SIS (The Special Interest State) and Renewing the American Republic.

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