July 10, 2014

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Must-Read Copyright Articles

Recently I read two great articles on copyright: Tim Wu’s Copyright’s Communications Policy and Mark Lemley’s Ex Ante Versus Ex Post Justifications for Intellectual Property.

Wu’s paper, which has already been praised widely in the copyright blogosphere, argues that copyright law, in addition to its well-known purpose of creating incentives for authors, has another component that amounts to a government policy on communications systems. This idea has been kicking around for some time, but Wu really nails it. His paper has a fascinating historical section describing what happened when new technologies, such as player pianos, radio, and cable TV, affected the copyright balance. In each case, after lots of legal maneuvering, a deal was cut between the incumbent industry and the challenger. Wu goes on to explain why this is the case, and what it all means for us today. There’s much more to this paper; a single paragraph can’t do it justice.

Lemley’s paper is a devastating critique of a new style of copyright-extension argument. The usual rationale for copyright is that it operates ex ante (which is lawyerspeak for beforehand): by promising authors a limited monopoly on copying and distribution of any work they might create in the future, we give them an incentive to create. After the work is created, the copyright monopoly leads to inefficiencies, but these are necessary because we have to keep our promise to the author. The goal of copyright is to keep others from free-riding on the author’s creative work.

Recently, we have begun hearing ex post arguments for copyright, saying that even for works that have already been created, the copyright monopoly is more efficient than a competitive market would be. Some of the arguments in favor of copyright term extension are of this flavor. Lemley rebuts these arguments very convincingly, arguing that they (a) are theoretically unsound, (b) are contradicted by practical experience, and (c) reflect an odd anti-market, central-planning bias. Based on this description, you might think Lemley’s article is long and dense; but it’s short and surprisingly readable. (Don’t be fooled by the number of pages in the download – they’re mostly endnotes.)

Comments

  1. Matt Brubeck says:

    Typo: I think “ex ante” in the last paragraph was supposed to be “ex post.”

    [Fixed. Thanks! -- EWF]

  2. Copyfight says:

    Must Read Must-Read List

    Don’t miss Edward Felten’s Must-Read Copyright Articles, a byte-sized review of Tim Wu’s Copyright’s Communications Policy (PDF) and Mark Lemley’s Ex Ante Versus Ex Post Justifications for Intellectual Property….

  3. Matt Brubeck says:

    The typo was corrected. Please disregard or delete these comments.

  4. mp3 is NOT a crime.org says:

    Must-Read Articles on Copyright

    Great articles from Freedom to Tinker. Please read them and spread the links when you get a chance….

  5. Steve @ PM-Style.com says:

    Tim Wu’s paper is a good consolidation of other literature. Last year, I spent a lot of time gathering that information and Tim presents some of it better than I would have done.

  6. Paul S says:

    I was a little dismayed by this. The comparison to paper clips was inept. Here’s why:

    Any commercial project, be it developing a new drug, discovering a new singer, writing a new book, or bringing a new album to market, has a production cost. The only reason to invest that initial outlay is if you’re reasonably sure that you can recover that and more in the marketplace. The price you’re able to charge for your product has to reflect that initial investment, or you can’t recover your costs in a timely way and make a net profit.

    Now, your competitors don’t have your initial costs. If what you produce isn’t protected by patent or copyright, then competitors can begin producing and distributing your product at a lower price than you can yourself, because they don’t have those costs to recover. And of course if someone else is selling the same thing for less, why should the public buy from you?

    In other words, investing in new creations without protection is a fast way to go out of business. And that is why copyrights and patents, in some form, are essential to innovation and commercial creativity.

    That’s why the comparison to paper clips is bogus. The company that first invented (and patented) the paper clip has long since recovered its development costs. Accordingly, the patent has lapsed and paper clips can be freely produced by anyone. That’s why patents and copyrights have a time limit: so they provide protection only for a reasonable period to allow the inventor to recover his costs and make a profit, after which time anyone can legally distribute the new invention.

    Today, the only up-front costs of making paper clips are the costs of building and staffing the production facilities. Those costs are more or less the same for everyone, so they don’t give anyone an unfair advantage. But if the inventor hadn’t had patent protection to allow him to recover his development costs, he would have had no incentive to create them in the first place.

  7. Anonymous says:

    I think you mean “inapt”.

    Prof. Lemley seemed to be criticizing only retroactive
    term extensions and not the existence of copyrights
    and patents in the first place.

  8. Paul S says:

    No, I really did mean “inept.” The word has two meanings:

    1) Not apt or fitting; inappropriate. [What you thought should be written as "inapt"]
    2)Displaying a lack of judgment, sense, or reason; foolish

    I meant it in both senses. Thanks for the attempted correction though.

    Source: http://dictionary.reference.com/search?q=inept

  9. J.B. Nicholson-Owens says:

    One problem with examining patents and copyrights in terms of “protecting” initial investment is that we’re bound to not get that initial investment right; America has a history of listening to whatever the investors say their investment was and then giving them all sorts of monopoly power. Corporations have the ear of many governments and I don’t see much evidence that these governments care what objectors have to say. Do we fret about what commercial interests want too much?

    Patents in software, for instance, are typically built on ideas that existed before they began and computer software can be experimented with at a very low cost. I would find it hard to believe that someone couldn’t implement Amazon.com’s one-click idea for less than what Amazon.com would tell you they spent on developing the idea. And how much discount do we give the public when one idea is based on another (as all ideas are)?

    In drugs we sometimes learn that drug patents are granted even though a drug was researched with public funds. Or the drug is an herbal remedy from another culture used and developed without patent “protection”. Thus the taxpayer gets to pay twice for a patent that will be leveraged against them — once in taxes to keep the university or other public institution ready to do more research, twice to get an instance of the patented drug.

    Copyrighted works are interesting along these same lines — shouldn’t we be ready to tell the publishers of songs that we don’t need that service anymore (that their investment here is increasingly likely to be a waste)? We could use filters to help us weed out the “good” music from the “bad” music but that is a reviewer’s job, not a call for state-granted exclusivity.

    And who is Congress to declare that the Walt Disney corporation needed more time than Walt himself (apparently) thought was needed to commercially develop and distribute “Plane Crazy” or “Steamboat Willie”? These works (and countless others) had their copyright extended just before it was to expire. If we look at copyright as an investment+profit opportunity, when do we say enough is enough and tell Disney that if it didn’t do its financial forecasting properly that’s not the public’s job to give them more time to get it right? Where, exactly, can we get financial forecasts for the next 100 years so we’ll be better equipped to discuss the next round of copyright extension (which will probably include justification based on Mexico’s ridiculous life+100 term)?

    Distribution isn’t as valuable as it once was and the music corporations know this and are scared that they might be replaced by the public doin’ it for themselves. Also, if we think of copyright and patent law as working to give an opportunity to recoup investment and provide a profit, are we providing a reason to ignore those who make copyrighted works with no expectation of profit or those who are willing to forgo recouping investment? The most important body of computer software was written largely by volunteers starting over 20 years ago. I would hate to think that those who are so generous with their copyrighted works should have little or no say in the length of the term of copyrights and patents because they are not running a business.

    And when patents and copyrights are extended to cover costs and give an opportunity to make profit, how much profit opportunity are we giving? How much do we want to give? How will we know how much profit opportunity we’re giving without a full and complete accounting for the costs in the products? What about refunds for building on public developments? Shouldn’t it be illegal to withhold something from having an opportunity to make a profit (like Bernard Rose’s movie “The Paper House” which the distributor did not want to distribute on home video so Rose had to — and I’m using the word correctly here — steal the reels to the movie after it was shown at the Roger Ebert Overlooked Movie festival last year so it could be distributed for home video)?

    In fact, why stop there: Since patents and copyrights are for profit and investment recouping, shouldn’t it be wrong to frame this debate in terms of *opportunity* to make a profit; what about using patents and copyrights to *guarantee* a profit (if, as you’re saying, that’s what these exclusive powers are for)? Shouldn’t the government hand every commercial copyright and patent holder a pile of money equal to investment+profit and then place that work in the public domain (for copyrighted work) or let everyone deal in the idea (for patented work) since we all collectively paid for it?

    This idea of looking at patents and copyrights as recouping time has some serious flaws when taken to its logical end which suggest that is not a good interpretation of the underlying reason for having patents and copyrights.

  10. Nick Coghlan says:

    The paperclip analogy is perfectly apt, because the author was applying it *only* to the ex post justification of efficient distribution of a work, *after* the initial development costs have already been recouped.

    The argument you give (the ‘incentive to create’) is the ex ante argument for copyright, which the paper’s author acknowledges as the perfectly valid argument for why copyright exists in the first place.

    For example, selling reprints of the works of William Shakespeare really is just like selling paperclips. You don’t have to do anything particularly creative – you just take something that already exists (the works of Will, or the design of a paperclip), repackage it, and then sell it at a price that people are willing to pay.

    People like to use paperclips, and people like to read (or are forced to study) Shakespeare. So long as you keep your costs below what people are willing to pay, you stay in business. Otherwise, you drop out of the competition, and more efficient producers take your place.

  11. Nick Coghlan says:

    A thought that occured to me while reading Mark Lemley’s article:

    1. Which book has consistently outsold every other book on the planet?

    2. Which book has been translated into over 2000 different languages and dialects?

    3. Which book has been adapted with children’s versions, pictorial versions, numerous movie adaptations, audio version, frequent stage plays worldwide and problem other formats that aren’t occuring to me at this point?

    4. Is that book subject to an exclusive copyright?

    With the answer to that last question, of course, being an emphatic NO

  12. McGee's Musings says:

    Must-Read Copyright Articles

    A series of pointers on copyright to follow up on.