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Today marks the end of Copyright Week, an opportunity to examine the current system of copyright and consider opportunities to reform a system that many view as dysfunctional and a hindrance to innovation. Copyright Week was born in the wake of the massive digital protest against SOPA, the Stop Online Piracy Act, copyright reform legislation that would have done more harm than good. On the anniversary of the protests that saw many websites go dark to show their opposition to the legislation, Copyright Week provides a focus on the need to reform an outdated system that no longer serves its intended purpose.
Since its founding, the United States has recognized the importance of copyright, as well as its ambiguity from a property rights perspective. Article I, Section 8 of the Constitution—often called the Copyright Clause—states that Congress has the authority “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.” A period of exclusive ownership or copyright provides an incentive to produce works that might otherwise not be undertaken.
Congress first exercised this authority in 1790 when it passed the Copyright Act that determined a copyright to last for 14 years, with an option for an additional renewal of 14 years. Over time, Congress has revisited this definition, most recently in the Sonny Bono Copyright Extension Act of 1998, which extended copyrights to include the life of the author plus 70 years, or in the case of corporate authorship 120 years from the year of creation or 95 years from the year of publication, whichever comes first.
Clearly, the Congress has provided an increasing level of exclusivity for copyright holders over time. But this exclusivity has always been balanced by the doctrine of fair use, which, under certain circumstances, allows limited use of copyrighted materials without first seeking permission from the owner of the copyright. The fair use doctrine attempts to provide a common sense balance to copyright. For example, singing a copyrighted song while walking down the street does not rise to the level of a copyright violation, nor does posting a newspaper column on your office door. While these uses appear trivial and uncontroversial, without a fair use doctrine they would be illegal.
The courts have traditionally navigated this netherworld between copyright protection and violation, addressing much thornier questions of use to determine what is fair. In this sense fair use doctrine is a “loose joint” that allows the courts to balance the interests of consumers and copyright owners in a constantly changing world. This process was perhaps most famously displayed in the Supreme Court’s Betamax case in 1984, when the court ruled that recording a television show for later viewing—“time shifting”—was a legitimate fair use for consumers.
The digital revolution, the deployment of broadband networks, and the emerging Internet of Things are forcing a reassessment of copyright and the proper realm of fair use. For example, do consumers have the right to tinker with their cars when the automakers have copyrighted the source code that controls modern engines? The Auto Alliance suggests that this is “legally problematic.” As automakers, the entertainment industry, and others seek more control over new technologies, consumers may see their options limited and innovators may be thwarted by new restrictions on fair use.
Unlike more tangible property rights, intellectual property has been assigned to Congress, which has the constitutional authority to set up a regulatory regime for rights holders. In effect, Congress has created a regulated monopoly for intellectual property. And there is no reason that the regulated monopoly for intellectual property is not susceptible to the same political pressures and public choice problems as any other government created monopoly. As a result, the current copyright system may not be the most efficient system to promote the “progress of science and useful arts.” It may be time to consider reforming copyright, with an eye towards consumer welfare and innovation.