The Public Domain Part 27

Yet as I pointed out earlier, without the copyright holder's permission, it is illegal to copy or redistribute or perform these works, even if it is done on a nonprofit basis. The goal of copyright is to encourage the production of, and public access to, cultural works. It has done its job in encouraging production. Now it operates as a fence to discourage access. As the years go by, we continue to lock up 100 percent of our recorded culture from a particular year in order to benefit an ever-dwindling percentage--the lottery winners--in a grotesquely inefficient cultural policy.

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Finally, fifty years after they were made, sound recordings enter the public domain in the United Kingdom (though as I pointed out earlier, licensing fees would still be due to the composer if the work itself was still under copyright). Now anyone--individual, company, specialist in public domain material--could offer the work to the public. But not if the record companies can persuade the government otherwise. Like my imaginary painter, they want to change the terms of the deal retrospectively. But at least the painter's proposal would not make the vast majority of paintings unavailable just to benefit a tiny minority of current artists.

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The recording industry's proposal for retrospective extension was effectively a tax on the British music-buying public to benefit the copyright holders of a tiny proportion of sound recordings. The public loses three times. It loses first when it is forced to continue to pay monopoly prices for older, commercially available music, rather than getting the benefit of the bargain British legislators originally offered: fifty years of exclusivity, then the public domain. The public loses a second time when, as a side effect, it is denied access to commercially unavailable music; no library or niche publisher can make the forgotten recordings available again. Finally, the public loses a third time because allowing retrospective extensions will distort the political process in the future, leading to an almost inevitable legislative capture by the tiny minority who find that their work still has commercial value at the end of the copyright term they were originally granted. As Larry Lessig has pointed out repeatedly, the time to have the debate about the length of the copyright term is before we know whose works will survive commercially.

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The whole idea is very silly. But if this is the silly idea we wish to pursue, then simply increase the income tax proportionately and distribute the benefits to those record companies and musicians whose music is still commercially available after fifty years. Require them to put the money into developing new artists--something the current proposal does not do. Let all the other recordings pa.s.s into the public domain.

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Of course, no government would consider such an idea for a moment. Tax the public to give a monopoly windfall to those who already hit the jackpot, because they claim their industry cannot survive without retrospectively changing the terms of its deals? It is indeed laughable. Yet it is a far better proposal than the one that was presented to the Gowers Review.

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What happened next was instructive. The Review commissioned an economic study of the effects of copyright term extension--both prospective and retrospective--on recorded music from the University of Cambridge's Centre for Intellectual Property and Information Law. The resulting doc.u.ment was a model of its kind.11 79

With painstaking care and a real (if sometimes fruitless) attempt to make economic arguments accessible to ordinary human beings, the study laid out the costs and benefits of extending the copyright term over sound recordings. It pointed out that the time to measure the value of a prospective term extension is at the moment the copyright is granted. Only then does it produce its incentive effects. The question one must ask is how much value today does it give an artist or record company to have their copyright extended by a year at the end of the existing period of protection. Then one must look to see whether the benefits of the added incentive outweigh the social costs it imposes. To put it another way, if the state were selling today the rights to have protection from year fifty to year ninety- five, how much would a rational copyright holder pay, particularly knowing that there is only a small likelihood the work will even be commercially available to take advantage of the extension? Would that amount be greater than the losses imposed on society by extending the right?

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Obviously, the value of the extension is affected by our "discount rate"--the annual amount by which we must discount a pound sterling in royalties I will not receive for fifty-one years in order to find its value now. Unsurprisingly, one finds that the value of that pound in the future is tiny at the moment when it matters--today--in the calculation of an artist or distributor making the decision whether to create. Conservative estimates yield a present value between 3 percent and 9 percent of the eventual amount. By that a.n.a.lysis, a pound in fifty years is worth between three and nine pence to you today, while other estimates have the value falling below one penny. This seems unlikely to spur much creativity at the margin. Or to put it in the more elegant language of Macaulay, quoted in Chapter 2: 81

I will take an example. Dr. Johnson died fifty-six years ago. If the law were what my honourable and learned friend wishes to make it, somebody would now have the monopoly of Dr.

Johnson's works. Who that somebody would be it is impossible to say; but we may venture to guess. I guess, then, that it would have been some bookseller, who was the a.s.sign of another bookseller, who was the grandson of a third bookseller, who had bought the copyright from Black Frank, the Doctor's servant and residuary legatee, in 1785 or 1786. Now, would the knowledge that this copyright would exist in 1841 have been a source of gratification to Johnson? Would it have stimulated his exertions? Would it have once drawn him out of his bed before noon? Would it have once cheered him under a fit of the spleen?

Would it have induced him to give us one more allegory, one more life of a poet, one more imitation of Juvenal? I firmly believe not. I firmly believe that a hundred years ago, when he was writing our debates for the Gentleman's Magazine, he would very much rather have had twopence to buy a plate of s.h.i.+n of beef at a cook's shop underground.12 82

The art form is different, but the thought of a 1960s Cliff Richard or Ian Anderson being "cheered under a fit of the spleen" by the prospect of a copyright extension fifty years hence is truly a lovely one.

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Considering all these factors, as well as the effects on investment in British versus American music and on the balance of trade, the Cambridge study found that the extension would cost consumers between 240 and 480 million pounds, far more than the benefits to performers and recording studios. (In practice, the report suggested, without changes in the law, most of the benefits would not have gone to the original recording artist in any case.) It found prospective extension led to a clear social welfare loss. What of retrospective extension?

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The report considered, and found wanting, arguments that retrospective extension is necessary to encourage "media migration"--the digitization of existing works, for example. In fact, most studies have found precisely the reverse--that public domain works are more available and more frequently adapted into different media. (Look on Amazon.com for a cla.s.sic work that is out of copyright--Moby-d.i.c.k, for example--and see how many adaptations and formats are available.) It also rejected the argument that harmonization alone was enough to justify extension--retrospective or prospective--pointing out the considerable actual variation in both term and scope of rights afforded to performers in different countries. Finally, it warned of the "hidden 'ratcheting' effect of harmonisation which results from the fact that harmonisation is almost invariably upwards." Its conclusion was simple: 85

[R]etrospective term extensions reduce social welfare. Thus, in this case, it would seem that basic theory alone is sufficient to provide strong, and unambiguous, guidance for policy-makers. . . . We therefore see no reason to quarrel with the consensus of the profession on this issue which as summed up by Akerlof et al. . . . [states] categorically that . . .

"[retrospective] extension provides essentially no incentive to create new works. Once a work is created, additional compensation to the producer is simply a windfall."13 86

The Gowers Review agreed. Its fourth recommendation read simply, "Policy makers should adopt the principle that the term and scope of protection for IP rights should not be altered retrospectively." Perhaps more important, though, was the simple paragraph at the front of the doc.u.ment captioned "The Approach of the Review." It begins thus: "The Review takes an evidence- based approach to its policy a.n.a.lysis and has supplemented internal a.n.a.lysis by commissioning external experts to examine the economic impact of changes. . . ."

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Why specify that one was taking an "evidence-based" approach? At first, the comment seems unnecessary. What other approach would one take? Anecdotal? Astrological? But there is a framework in which empirical evidence of the effects of policy simply seems irrelevant--one based on natural right. When the Review was given to the House of Commons Select Committee on Culture, Media and Sport, that frame of mind was much in evidence: 88

The Gowers Review undertook an extensive a.n.a.lysis of the argument for extending the term. On economic grounds, the Review concluded that there was little evidence that extension would benefit performers, increase the number of works created or made available, or provide incentives for creativity; and it noted a potentially negative effect on the balance of trade. . . .

Gowers's a.n.a.lysis was thorough and in economic terms may be correct. It gives the impression, however, of having been conducted entirely on economic grounds. We strongly believe that copyright represents a moral right of a creator to choose to retain owners.h.i.+p and control of their own intellectual property.

We have not heard a convincing reason why a composer and his or her heirs should benefit from a term of copyright which extends for lifetime and beyond, but a performer should not. . . . Given the strength and importance of the creative industries in the U.K., it seems extraordinary that the protection of intellectual property rights should be weaker here than in many other countries whose creative industries are less successful.14 89

A couple of things are worth noting here. The first is that the Committee is quite prepared to believe that the effects of term extension would not benefit performers or provide incentives for creativity, and even to believe that it would hurt the balance of trade. The second is the curious argument in the last sentence. Other countries have stronger systems of rights and are less successful. We should change our regime to be more like them! Obviously the idea that a country's creative industries might be less successful because their systems of rights were stronger does not occur to the Committee for a moment. Though it proclaims itself to be unaffected by economic thought, it is in fact deeply influenced by the "more rights equals more innovation" ideology of maximalism that I have described in these pages.

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Nestling between these two apparently contradictory ideas is a serious argument that needs to be confronted. Should we ignore evidence--even conclusive evidence--of negative economic effects, harm to consumers, and consequences for the availability of culture because we are dealing with an issue of moral right, almost natural right? Must we extend the rights of the artists who recorded those songs (or rather the record companies who immediately acquired their copyrights) because they are simply theirs as a matter of natural justice? Do performers have a natural right to recorded songs either because they have labored on them, mixing their sweat with each track, or because something of their personality is forever stamped into the song?

Must we grant an additional forty-five years of commercial exclusivity, not because of economic incentive, but because of natural right?

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Most of us feel the pull of this argument. I certainly do. But as I pointed out in Chapter 2, there are considerable problems with such an idea. First, it runs against the premises of actual copyright systems. In the United States, for example, the Const.i.tution resolutely presents the opposite picture. Exclusive rights are to encourage progress in science and the useful arts.

The Supreme Court has elaborated on this point many times, rejecting both labor-based "sweat of the brow" theories of copyright and more expansive visions based on a natural right to the products of one's genius--whether inventions or novels.

Britain, too, has a history of looking to copyright as a utilitarian scheme--though with more reference to, and legal protection of, particular "moral rights" than one finds in the United States. But even in the most expansive "moral rights"

legal systems, even in the early days of debate about the rights of authors after the French Revolution, it is accepted that there are temporal limits on these rights. If this is true of authors, it is even more true of performers, who are not granted the full suite of author's rights in moral rights jurisdictions, being exiled to a form of protection called "neighboring"

rights.

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In all of these schemes, there are time limits on the length of the rights (and frequently different ones for different creators--authors, inventors, performers, and so on). Once one has accepted that point, the question of how long they should be is, surely, a matter for empirical and utilitarian a.n.a.lysis. One cannot credibly say that natural rights or the deep deontological structure of the universe gives me a right to twenty-eight or fifty-six or seventy years of exclusivity. The argument must turn instead to a question of consequences. Which limit is better? Once one asks that question, the Gowers Review's economic a.s.sessment is overwhelming, as the Select Committee itself recognized. In the end, the government agreed--noting that a European Union study had found precisely the same thing. The sound recording right should not be extended, still less extended retrospectively. The evidence-free zone had been penetrated. But not for long. As this book went to press, the European Commission announced its support for an even longer Europe-wide extension of the sound recording right. The contrary arguments and empirical evidence were ignored, minimized, explained away. How can this pattern be broken?

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In the next and final chapter, I try to answer that question. I offer a partial explanation for the cognitive and organizational blindnesses that have brought us to this point. I argue that we have much to learn from the history, theory, and organizational practices of the environmental movement. The environmental movement taught us to see "the environment" for the first time, to recognize its importance, and to change the way we thought about ecology, property, and economics in consequence. What we need is an environmentalism of mind, of culture, of information.

In the words of my colleague David Lange, we need to "recognize the public domain." And to save it.

Chapter 10: An Environmentalism for Information 1

Over the last fifteen years, a group of scholars have finally persuaded economists to believe something noneconomists find obvious: "behavioral economics" shows that people do not act as economic theory predicts. But hold your cheers. This is not a vindication of folk wisdom over the pointy-heads. The deviations from "rational behavior" are not the wonderful cornucopia of human motivations you might imagine. There are patterns. For example, we are systematically likely to overestimate chances of loss and underestimate chances of gain, to rely on simplifying heuristics to frame problems even when those heuristics are contradicted by the facts.

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Some of the patterns are endearing; the supposedly "irrational"

concerns for distributive equality that persist in all but the economically trained and the extreme right, for example. But most of them simply involve the mapping of cognitive bias. We can take advantage of those biases, as those who sell us ludicrously expensive and irrational warranties on consumer goods do. Or we can correct for them, like a pilot who is trained to rely on his instruments rather than his faulty perceptions when flying in heavy cloud.

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This book has introduced you to the wonders and terrors of intellectual property law--the range wars of the Internet age.

There have been discussions of synthetic biology and musical sampling, digital locks and the hackers who break them, Jefferson and Macaulay, and the fight over video recorders. Now it is time to sum up.

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I would argue that the chapters in this book present evidence of another kind of cognitive bias, one that the behavioral economists have not yet identified. Call it the openness aversion. Cultural agoraphobia. We are systematically likely to undervalue the importance, viability, and productive power of open systems, open networks, and nonproprietary production.

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CULTURAL AGORAPHOBIA?

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Test yourself on the following questions. In each case, it is 1991 and I have removed from you all knowledge of the years since then. (For some, this might be a relief.) 7

The first question is a thought experiment I introduced in Chapter 4. You have to design an international computer network.

One group of scientists describes a system that is fundamentally open: open protocols and open systems so that anyone could connect to the system and offer information or products to the world. Another group--scholars, businesspeople, bureaucrats--points out the problems. Anyone could connect to the system! They could do anything! The system itself would not limit them to a few approved actions or approved connections.

There would be p.o.r.n, and piracy, and viruses, and spam.

Terrorists could put up videos glorifying themselves. Your neighbor's site could compete with the New York Times or the U.S. government in doc.u.menting the war in Iraq. Better to have a well-managed system in which official approval is required to put up a site, where only a few selected actions are permitted by the network protocols, where most of us are merely recipients of information, where spam, viruses, and piracy (and innovation and partic.i.p.atory culture and anonymous speech) are impossible.

Which network design would you have picked? Remember, you have no experience of blogs, or mashups, or Google; no experience of the Web. Just you and your cognitive filters.

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Imagine a form of software which anyone could copy and change, created under a license which required subsequent programmers to offer their software on the same terms. Imagine legions of programmers worldwide contributing their creations back into a "commons." Is this anarchic-sounding method of production economically viable? Could it successfully compete with the hierarchically organized corporations producing proprietary, closed code, controlled by both law and technology? Be truthful.

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Finally, set yourself the task of producing the greatest reference work the world has ever seen. You are told that it must cover everything from the best Thai food in Durham to the annual rice production of Thailand, from the best places to see blue whales to the history of the Blue Dog Coalition. Would you create a ma.s.sive organization of paid experts, each a.s.signed a topic, with hierarchical layers of editors above them, producing a set of encyclopedic tomes that are rigorously controlled by copyright and trademark? Or would you wait for hobbyists, governments, scientists, and volunteer encyclopedists to produce, and search engines to organize and rank, a cornucopia of information? I know which way I would have bet in 1991. But I also know that the last time I consulted an encyclopedia was in 1998. You?