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Richard A. Epstein
The Wall Street Journal
December 21, 1998
Copyright © 1998, Dow Jones & Company, Inc.
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).
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