Sunday, March 4, 2012

Did Sonny Bono Put the Internet at Risk?

The Sonny Bono Copyright Term Extension Act (also known, as Wikipedia notes, as the "Mickey Mouse Protection Act"), extended the term of a copyright to 70 years after the death of the author, or 75 years for a work of corporate authorship.  The Sonny Bono Act capped a 200 year long process that saw copyright terms increase from 28 years in 1790 to between 70 and around 150 years today (depending on how long an author lives after creating the work).

Source: Tom W. Bell

With the Sonny Bono Act, copyright term became essentially infinite relative to the lifetime of any human living when a work is created. Congressional authority over copyrights was granted in broad, but not unlimited, language in Article 1, Section 8 of the Constitution.  That section provides:  "The Congress shall have Power to ... promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries."  At some point, a sufficiently long copyright term must exceed the "for limited Times" limitation on congressional authority.  It seems doubtful, for example, that the Supreme Court would find an extension of copyright terms to 1,000 years to be within the constitutional grant of authority (unless they read the Commerce Clause as providing the power to create copyrights of infinite duration with regard to works that affect interstate commerce).

Professor Lessig represented the plaintiff in Eldred v. Ashcroft, a case that challenged the constitutionality of extending the terms of existing copyrights.  The Supreme Court summarized the plaintiff's position  as follows:

Petitioners do not challenge the "life-plus-70-years" time span itself. "Whether 50 years is enough, or 70 years too much," they acknowledge, "is not a judgment meet for this Court." Brief for Petitioners 14.1 Congress went awry, petitioners maintain, not with respect to newly created works, but in enlarging the term for published works with existing copyrights. The "limited Tim[e]" in effect when a copyright is secured, petitioners urge, becomes the constitutional boundary, a clear line beyond the power of Congress to extend.

Unfortunately, the Court held (7-2) that "Congress acted within its authority and did not transgress constitutional limitations."

After the Sonny Bono Act, in 1997 Congress went on to pass the No Electronic Theft Act (NET Act).  The NET Act criminalized even non-commercial copyright infringement, providing for up to five years in prison and a $250,000 fine.

The next year, Congress passed the Digital Millennium Copyright Act (DMCA) (EFF link, bill text).  The DMCA criminalized devices or services that circumvent copyright protection, even when those measures are taken so that the work can be used in a legal, "fair use" manner (such as educational use, criticism, commentary, etc).  A willful violation of that provision can be punished with 5 years in prison or a half million dollar fine (which double for a second offense).

Civil penalties for copyright infringement continue to be vastly out of sync with actual damages, in one notable case culminating with a jury award of $1.5 million for sharing 24 songs online (an award the judge reduced to $54,000, or $2,250 per song).  Such a disproportionate penalty raises serious constitutional questions, although the government has tried to avoid having them adjudicated.

Copyright holders (or, to be fair, some large corporations holding many copyrights to film and music, at least for now) felt this was not enough protection, and lobbied for legislation that would allow incredibly overbroad, probably unconstitutional, really probably unconstitutional, interference with online free speech in the event that a copyright holder accuses a site of violating copyright.  Two acts, SOPA and PIPA, came closing to becoming law before a large-scale protest (featuring an internet blackout) derailed them -- for the time being.

Hollywood continues to vastly overstate the impact of piracy, while downplaying the importance of an internet free of potentially censorial regulations.

So how does this all relate to the title of this post, "Did Sonny Bono Put the Internet at Risk"?  Simple.  By giving copyright holders an essentially infinite copyright term, and by creating functionally infinite penalties for infringers (short of making piracy punishable with the death penalty, increasing the criminal penalties further is unlikely to decrease piracy), Congress has already maximized the value of copyrights.  There is nothing further Congress can do to increase the value of copyrights.  With an infinite term and infinite penalties, a copyright is as valuable as it can be.

Now lets take a look at what Hollywood really wants:  Money.  There are two additional tools Congress has to give Hollywood money.  The first tool is forcing people to pay money directly to Hollywood.  Lots of countries do this in one way or another, including the United States.  The United States doesn't have a very large levy, but in theory Congress could essentially create a new tax and pay the proceeds directly to copyright holders.  I doubt that proposal would have legs (thankfully).  The second tool is breaking the mechanisms that people who ignore the criminal and civil penalties rely on to traffic in infringing material.

Imagine a group of monks who make their living copying books by hand.  They are sitting at lunch one day when they hear about a pirate-coddling innovator named Gutenberg.  Gutenberg, it turns out, has invented a printing press capable of massive piracy.  The manuscripts that monks take years to copy could be turned out by the thousands with little effort and no penalty.  The monks immediately head over to the palace and ask the king to protect their industry by banning this new piracy tool.  Where would we be today if the printing press had been banned, or even delayed by a hundred years?

The point is that new technology disrupts settled industries, and forces them to adapt.  Companies that don't adapt go out of business, as they should.  It is insanity to hobble new technology in order to protect industries built around now-obsolete technology.  Pirated DVDs are regularly sold on the streets of big cities, but we don't ban the use of cash or make sidewalks impassible to pedestrians even though either step would essentially end the street-corner sale of pirated movies.  The second option to make Hollywood happy -- breaking the mechanisms that infringers use -- simply carries too large a societal price.  It is more damaging to society than directly taxing people to pay Hollywood, and it should be at least as unacceptable as a policy choice.

By giving Hollywood functionally infinite copyright terms and functionally infinite civil and criminal penalties for infringement, Congress has left itself with no way to compensate Hollywood for the costs of the portion of copyright infringement that we could stop --  but decline to stop -- by destroying free speech and the free internet.  Sonny Bono and the term extension acts that led up to it gave away the store, and Congress is left with only unacceptable choices.

As a patent holder, I am very aware that my patents have a limited lifespan (20 years from the date of filing, although the patent is not enforceable until it issues years after filing, with an adjustment if the patent office causes undue delay).  If Congress found itself unable to fix a problem that was interfering with the value of patents (for example if the drug approval process was so slow that the patents expire before the drugs are approved, or if there were massive trafficking in infringing devices that law enforcement couldn't stop), Congress could extend patent life and make up for the lost value or increase the criminal or statutory civil penalties for patent infringement.  The formula is simple:  Every year of protection has a value, and Congress just needs to add enough additional years of protection to keep the value of patents stable (although I hope no such threat is on the horizon).  That option no longer exists for copyrights.

All of this raises a few questions:  Why did Congress feel the need to max out the value of copyrights at a time when copyright value was already rising (kind of a rhetorical question, since we know how much money Congress gets from Hollywood)?  When the Supreme Court finally decides what the constitutional bounds of "for limited times" means, should it be measured relative to the value that can be extracted from the copyright grant (so the "limited times" would be longer if there were factors depressing copyright value, such as piracy)?  Should all copyrights continue to have the same lifespan, or should some categories of works with high up front value (such as software -- who buys Windows 3.1 anymore?) have a shorter (or longer) copyright period than those with a more level value over time?  Does the phrase "to promote the progress of science and useful arts" impose any meaningful limitation on copyright term or reach?

On a related note, I find it interesting that copyrights, which are frequently held by corporations and enforced against individuals, have been strengthened while patents, which are frequently held by individuals and enforced against corporations, have been weakened.  I'll explore that in a future post.