Copyright Protectionism

by on August 5, 2016 at 7:26 am in Economics, Law | Permalink

ChairThe argument that copyright encourages innovation is simply a pretense for protectionism. Some protection for intellectual property probably does encourage innovation, as the “Tabarrok Curve” illustrates, but the pretense becomes clear when we see copyright repeatedly extended for works already in existence. Walt Disney was long-dead when his copyright to Mickey Mouse was extended. Rumors to the contrary, Walt ain’t coming back no matter how much we incentivize him with a longer copyright.

The latest case in point is last week’s extension of copyright in the European Union for design:

Mid-century design classics, such as Charles Eames chairs, Eileen Gray tables and Arco lamps are set to rocket in price, following EU regulations which came into force this week that extend the copyright on furniture from 25 years to 70 years after the death of a designer.

…Companies can currently sell replica goods providing 25 years has passed from the date the designer died, but the EU ruling – speeded up by the British government – has extended that period to 70 years. Eames died in 1978, so the new protection extends the copyright of the many chairs, tables and clocks he designed until 2048. For items designed jointly with his wife, Ray, the copyright would extend for a further 10 years, as she died in 1988.

Dead people tend not to be very creative so I suspect that the retroactive extension of copyright will not spur much innovation from Eames. The point, of course, is not to spur creativity but to protect the rents of the handful of people whose past designs turned out to have lasting value.

Retroactive extensions of copyright throw the entire reasoning behind copyright into reverse. The incentive argument for copyright would have to run, We don’t have enough designs so we should increase the incentive to produce more. The actual argument for copyright runs–We have lots of popular designs and we need to keep selling them at a high price.

Moreover, if this nonsense were not enough, how is this for a kicker:

Companies which publish design books may have to get numerous licences to reproduce photos because designs have come under copyright.

Hat tip: The excellent Mark Thorson.

1 BenK August 5, 2016 at 7:48 am

This is one of the few cases in which I recommend nationalization. The companies that have substantial profits from previously extended copyright should have their complete intellectual property brought into the public domain, while the copyright laws are brought back into sensibility for future works, so as to stand as a warning to anyone who thinks about corrupting the political system like this in the future. It is the moral equivalent of seizing profits derived from criminal activity. The risk of losing everything should be so great that retroactive copyright extensions are something that every company will lobby against, for fear of the torches and pitchforks.

2 Eustis August 5, 2016 at 8:20 am

Nationalization never works; much wiser to just abolish copyright laws entirely.

The fashion & clothing industry, for example, functions quite well without copyright burdens.

3 Floccina August 5, 2016 at 10:29 am

+1 I think that the idea that copyright is net positive is weak but Software companies would have to find ways to deal with this and they might have worse solutions so let’s move with caution.

4 Doug August 5, 2016 at 4:56 pm

Virtually all new software being produced is either open-source or sold as a hosted service (SaaS) rather than a product. Elimination of copyright may hurt some legacy vendors like Oracle or Adobe. But it world have hardly any effect on the production of new code. Analogous to Alex’s argument, the only justification is protection of entrenched interests, not incentivizing creativity.

5 prior_test2 August 6, 2016 at 11:11 am

‘Virtually all new software being produced is either open-source’

The GPL depends explicitly on copyright law to ensure its benefits.

‘or sold as a hosted service (SaaS)’

Well, GPL v3 is trying its best, but this remains a disturbing trend, based on something considerably beyond the realm of copyright.

6 Peter Schaeffer August 6, 2016 at 6:09 pm

F, D, PT2,

‘or sold as a hosted service (SaaS)’

Without copyright protection, Saas either would not exist or not exist in anything remotely approaching its current scale.

Simple test, how many of the leading SaaS vendors have Open Sourced their core code? Some have Open Sourced a bit… Generally, when they wanted the community to do their maintenance for them.

Copyrights and patents (and even zoning) can be taken too far. That’s doesn’t mean they don’t have merit.

7 Roy LC August 30, 2016 at 8:10 pm

Anyone using 28 year old code should not be dependendent on that as a revenue stream, copywrite should be 14 years renewable to 28 years. That would mean that Excel 3.0 goes out of copywrite in two years, clearly that will destroy Microsoft.

8 byomtov August 5, 2016 at 11:32 am

OK, but books are a different story entirely, especially in the digital age. A popular book, or an unpopular one, can be reproduced and distributed extremely cheaply. So can movies and TV shows.

I agree with Alex that copyrights are way too long, but that’s a far cry from not having them at all.

9 Doug August 5, 2016 at 4:53 pm

Torrents for books, televisions and movies are already widely distributed and freely available. Legal enforcement is hardly a deterrent. VPNs are dirt cheap and stupidly easy. They virtually eliminate the possibility of civil or criminal action. Yet people still go to the movies, buy paperback books, and subscribe to HBO.

The only difference between our world and a copyright free world, is one-click and $3/month. Somehow I doubt that this is all the only thing stopping the complete implosion of the entertainment industry.

10 Thiago Ribeiro August 5, 2016 at 8:34 am

You can’t retroactively punish people for having honestly corrupted the system and perverted its stated purpose. You would get so many adverse consequences. Forty years of darkness! Earthquakes, volcanoes! The dead rising from the grave! Human sacrifice! Dogs and cats living together! Mass hysteria!

11 Hazel Meade August 5, 2016 at 9:42 am

Why the heck should the government collect royalties on mickey mouse images?

12 Ray Lopez August 5, 2016 at 8:37 am

While it’s true ex post rewards are weaker than ex ante rewards, any K Street lobbyist who used to be a politician will tell you that ex post rewards are a form of incentive. Thus, while I favor weakening copyright law, AlexT is simply wrong on this issue.

AlexT: “Some protection for intellectual property probably does encourage innovation, as the “Tabarrok Curve” illustrates” – not true, the Tabarrok Curve is simply a Laffer Curve tautology that proves nothing. Obviously the endpoints are lower than some point in the middle, which has a maximum (this is a definition of a Laffer curve) but where on the curve we are–what point– is not clear. An academic survey of the literature paper from a while ago stated that the literature on whether existing patents are too strong or too weak is not clear. Anybody who professes to tell you that patents are too weak (me) or too strong (AlexT) is simply advocating without evidence. It’s that simple. At least I’m transparent with my advocacy and don’t pretend that I figured out where on a Laffer curve/ self-styled Tabarrok Curve the existing point is. I personally think it’s too low, but it’s an opinion from years of working with inventors. What are AlexT’s credentials? Some basic knowledge of free trade, perfect competition,and advanced economic models as taught in textbooks? No real world experience The first thing VC types like Peter Thiel ask is: are there any patents on this?

13 Gary Lowe August 5, 2016 at 10:14 am

Agree. The incentive is not for Walt Disney, it’s to show others how well they could do by creating new works. A weak incentive, I’ll grant you, but an incentive nonetheless.

14 Urso August 5, 2016 at 3:05 pm

You think potential artists will be swayed by the benefit of receiving royalties for death +40 years, whereas royalties for death +20 years just wouldn’t have made it worthwhile?

15 Malik August 5, 2016 at 4:21 pm

Is there substantial overlap between the set of people who propose higher estate taxes and the set of people who support death + x copyright? Are these the ‘serious democrats’?

16 Axa August 5, 2016 at 8:38 am

A confusing issue. I read the entire Guardian article but I did not find a detailed explanation of the problem. Is it a) trademark: call it anything but Barcelona or Eames, or b) copyright: the design can’t be copied (at a certain degree) ? So, what is this extension about? The use of the name or the design?

17 Ray Lopez August 5, 2016 at 8:52 am

It’s a confusing issue. Usually the party with deeper pockets wins, as a practical matter, since such issues of copyright infringement are litigated where in most countries the side with the most money wins more often than not. For theory: an example is (Wikipedia this): “derivative works” protected by copyright. Is painting the Mona Lisa with a mustache by Duchamp a ‘derivative work’ (which is entitled to protection) or not? The key: “The key is whether the copied elements are original and expressive (not merely conventional or mise en scène); if that is so, the second or derivative work is independently subject to copyright protection, and if that is not the second work (if unauthorized) may infringe the first, but it is not independently copyrightable.” – and the court held in the bearded Mona Lisa case that the work was sufficiently original so as to merit a copyright for Duchamp and if there was a Leonardo copyright (I don’t think there was) the owners of the original would have gotten nothing.

Bonus trivia: https://en.wikipedia.org/wiki/Marcel_Duchamp – Duchamp was so obsessed with chess he gave up a lucrative career as an avant garde artist to pursue his hobby.

18 Picador August 5, 2016 at 8:55 am

It is confusing. But the answer is that it is indeed a copyright.

Copyright is now mandated by international conventions to last for the lifetime of the author plus 70 years, which is the absurd length dictated by the US. These conventions typically work by mandating international protection to match the most ridiculously corrupt and over-extended jurisdiction in the world.

The confusing but is that functional designs are not protectible under copyright in the US. If you wanted a monopoly on a design in the US, you would have to file for a design patent, which gives a 14-year monopoly (the original length of copyright protection, notably). Other countries have similar design registration regimes with similarly limited terms. But apparently Europe has decided that functional designs can also be protected by copyright, which has become a de facto perpetual monopoly.

Trademarks are a different matter, and they can be perpetual. The header image is confusing because of the distinction between replicas and official designs marked with the brand name. But my understanding is that the replicas would be illegal to sell under this regime, and the 500 euro figure is intended to demonstrate that where such replicas can be sold, the cost of production is a fraction of the rents attached by the monopolist.

19 Brett Dunbar August 5, 2016 at 10:43 am

In fact the state of copyright law is due to the USA losing the argument. The Berne convention eventually won out over the much weaker treaty system that the USA had backed. The minimum permitted term under Berne is life+50 and no registration requirement is permitted. Neither of these are negotiable.

The life+70 term is due to EU law, for the Berne convention rules to be compatible with EU law the EU needed a uniform term. Germany absolutely refused to consider any reduction. So we equalised on the German life+70 rule. Britain and France had wanted to keep life+50, the government of Bavaria however was not willing to allow the copyright on Mein Kampf to expire any earlier than 1 Jan 2016.

The only area where US copyright terms are longer is work for hire where the US term is 95 years the EU has 70 years. It is treated like anonymous or pseudonymous work here.

Having the date based on the artist’s death simplifies dealing with works that were revised and works that were published after a delay, as then you avoid problems with works that were published in various forms over a long period, which you get with fixed term. Also publication can be somewhat ambiguous. Does a limited distribution non commercial fanzine or newsletter count? Death is usually a clear demarcation.

20 louis August 5, 2016 at 12:31 pm

“Death is usually a clear demarcation”
Line of the day.

21 Mark Thorson August 5, 2016 at 10:55 pm

I just sent an e-mail to the new tips mailbox at the Daily Mail. They haven’t used any of my other suggestions yet, but this is the first one with a tie-in to Hitler. We shall see.

There does seem to have been a recent editorial shift over there. Much less Hitler, and I can’t remember the last time I saw an article about lesbians, Tesco, or Suri Cruise.

22 Albigensian August 5, 2016 at 10:06 am

Knockoffs tend to be very noticeably cheap, with molded plastic replacing artisinal glass, painted steel replacing wood, chromed plastic replacing metal, and mass-production techniques replacing hand crafts. It seems unlikely that anyone would mistake one of these cheap knockoffs for an original, but, the law will still consider these to be “copies”?

So, how close can you go? I would expect copyright on “designer furniture” (and appliances and other artifacts) to generate a huge amount of costly litigation, for when does “inspired by” legally become a “copy”?

Then again, since the early 20th century most star architects have produced furniture designs. Copyright is moot for many of these as many have been sufficiently impractical as to be suitable to look at but not to actually use. Can one actually make an argument that such designs are less likely to be created without this additional protection?

23 Eric Rasmusen August 30, 2016 at 11:20 am

Good point. Design copyrights are for that reason much more expensive the economic system than book copyrights, because they require more careful monitoring by owners and more expensive litigation, and more accidental violation. In theory one could publish a knockoff book using the same words but a different author and title, but it would be too hard to market.

24 Axa August 5, 2016 at 10:43 am

Thanks for the answer. So, it’s a copyright issue. Once that’s cleared, as Ray said, you’re in the labyrinth of derivative works and actually proving the “copy” is breaking the law.

I don’t know the law but I like this small car. Derivative, a replica? http://www.factoryfive.com/kits/mk4-roadster/

25 anon August 5, 2016 at 8:54 am

Of course you are right Alex that at a top level cost-benefit analysis is not done on IP. People are for and against emotionally. Perhaps a periodic reminder will move opinion, but I’d expect slow progress, perhaps even worsening conditions.

The harm by excessive IP protection is large but diffuse, the gain for corporate IP holders under advanced protection is large and localized.

26 Ray Lopez August 5, 2016 at 11:52 am

@anon- as you correctly say, it’s an emotional issue, but NO evidence exists that IP protection, specifically in the field of patents, is either bad or good. No evidence. You can either believe Alex or me. But you cannot back up your opinion with a peer reviewed paper(s) that conclusively prove the pro or anti IP case. It’s like those vitamin studies that show mixed benefits (including the mineral calcium). Also, your ‘protectionist’ argument ignores that most people don’t produce original works, they consume them. So of course for them, Piratebay.org (which BTW I also use) is great: (c)-protected works for free. But if everything is free, who will have incentive to create works? Cite Megadeath, Taylor Swift, other (c)-strong artists here. And to carry your ‘protectionist’ argument to the limit: in Asia (see Joe Studwell’s works) the “infant industry” argument has been found to work: limited protection from competition, so long as the term is limited, the industry is open to competition internationally, and the business adopt ‘export oriented’ (i.e. First World) standards. It works (cite Japan, Korea, Taiwan here).

Imitation is NOT the sincerest form of flattery. Money is. Even the Chinese know that.

27 anon August 5, 2016 at 1:37 pm

Surely if there was no data on cost and benefit, IP terms should have been left where they were in 1940.

28 chuck martel August 5, 2016 at 9:05 am

There’s the Realtor thing:

Interestingly, the Merriam-Webster dictionary (“America’s leading and most-trusted provider of language information”, says that the word, “realtor” (since when are trademarks in the dictionary? The word, “Pepsi” is not listed in this dictionary, and the word, “coke” is listed as referring to the residue of coal), is a word “used for a real estate agent who is a member of the National Association of Realtors”.

However, in an interesting contrast, the UK-based Collins Dictionary, which is arguably equally famous as the Merriam-Webster one, succinctly states that the word, “realtor” is a simple noun and refers to an estate agent, especially an accredited one, and no reference at all to the NRA or any other governing body for real estate agents.

Fortunately, somebody once tried to do something about the REALTOR trademark, at least in the U.S. According to Wikipedia, in 2003, a Jacob Zimmerman, who was a student no less, and not a member of the NAR, petitioned the USPTO to cancel the REALTOR and REALTORS trademarks on the basis that they were generic. Unfortunately, he was not successful as the USPTO ruled against him. According to the USPTO decision, upon graduating from Cornell, Jacob was “in the business of buying and selling website addresses containing the word ‘realtor’ and ‘realtors’.

http://blog.dnattorney.com/2013/09/the-meshugas-of-realtor-trademark.html

29 Ray Lopez August 5, 2016 at 11:58 am

@CM – I’m no expert on trademarks (I flunked out of law school) but REALTOR is not the same as Realtor is not the same as realtor is not the same as rEaLToR for trademark purposes. And that’s just using ordinary font. If a stylized font it’s another whole set of examples. And then colors come into play etc. REALTOR in uppercase is usually conventionally reserved for trademarking the letters, in any case, including CamelCase. So RAYLOPEZ as a trademark would include Raylopez and RayLopez — Ray Lopez® (c) 2016, all Berne-convention rights reserved worldwide.

30 Lord August 5, 2016 at 9:08 am

By now I think innovators can expect not only rewards for their work but future extensions of them, so this can be an inducement, though still not one I would prefer.

31 Lord Action August 5, 2016 at 9:26 am

This isn’t a topic I’ve thought a lot about, but there’s something to be said for extending the protections on works that are still in vigorous use. One thing I really dislike about the IP system is protections preventing useful work on an idea that the owner has no intention of using. Like unused patents or out-of-print books.

32 Urso August 5, 2016 at 3:10 pm

I’ve imagined a system where you have to re-register every five years, and every re-registration becomes logarithmically more expensive. So your first few registrations are essentially free, then it becomes real money, then it becomes essentially cost-prohibitive – unless, of course, you’re re-registering Mickey Mouse. This will allow corporations to keep those few hypervaluable rights that are worth retaining, while allowing the vast majority of rights to ease into the public domain where they belong.

33 Daniel Weber August 5, 2016 at 3:49 pm

Just as a ball park, in your mind what would the fees be for “The Force Awakens,” and what would be the fees for the photo of Tank Man in Tiananmen Square?

34 Urso August 5, 2016 at 4:20 pm

Fees aren’t based on perceived value, they’d just be based on how long something has been extent. Protecting a work that’s five years old would be cheap. Protecting a work that’s 100 years old should be expensive. If you want me to calculate dollar figures I’ll need a grant.

35 Daniel Weber August 30, 2016 at 10:57 am

(Sorry to stark the thread.)

Would it be the same amount to cover each one 50 years after the fact?

36 Marton August 9, 2016 at 4:34 am

Main problem with that is that lots of works include smaller parts – a famous move will include a famous sound track, which in turn will include famous songs. Having to extend copyright for each of these separately will become prohibitive.

(This might be a feature rather than a bug – if copyrighting the film is worthwhile but copyrighting 20 songs in the sound track is not, then the public has gained 20 songs.)

37 Marton August 9, 2016 at 4:36 am

The other issue: a tricky film studio would have one song that they renew at whatever exorbitant cost; then they include that song into all of their movies even the ones which are only renewed for a few years. Checkmate for freely distributing the movie.

38 Ted Craig August 5, 2016 at 9:09 am

The problem with the Mickey Mouse example is that the concept of a company built solely on intellectual property, like Disney, didn’t really exist in when copyright law was conceived. It’s like arguing for traffic laws designed for horse and buggies. Copyright law should probably be improved, but it should reflect the reality of companies like Disney.

39 (Not That) Bill O'Reilly August 5, 2016 at 9:25 am

Exactly right. Are there issues with “soft” IP laws like copyrights and trademarks? Probably. But to do away with them would cause immense value destruction, and it’s not especially clear whether that would offset by the freedom creators would now have to create alternate value. For something like Mickey Mouse (or Star Trek, or Star Wars), part of the value is premised on the existence of a rights-holder who gets to dictate what the “canon” is, because that’s the only way you get cohesive universes that audiences can keep up with; if we eliminate trademark/copyright and there are suddenly competing versions of Star Trek, does one really expect audiences are going keep up with which is which?

40 Thiago Ribeiro August 5, 2016 at 10:39 am

“For something like Mickey Mouse (or Star Trek, or Star Wars), part of the value is premised on the existence of a rights-holder who gets to dictate what the “canon” is (…) [I]f we eliminate trademark/copyright and there are suddenly competing versions of Star Trek, does one really expect audiences are going keep up with which is which?”
I am pretty sure Trekkers and whatever Star Wars fans are will. The real questions is, will audiences stick to the current owners’ vision — after such failures as the Star Wars prequels or Voyager or Enterprise or the Next Generation movies — if it finally gets an option? There is no reason why my fanfic where Spock, Luke Skywalker and I help Rambo to rescue American POWs in North Korea should not be canon. It is all politics, I tell you.

41 Bob from Ohio August 5, 2016 at 11:09 am

“if we eliminate trademark/copyright and there are suddenly competing versions of Star Trek, does one really expect audiences are going keep up with which is which?”

Sherlock Holmes is in the public domain and there are competing uses of the character on TV right now. Somehow the audiences keep up.

42 (Not That) Bill O'Reilly August 5, 2016 at 12:12 pm

You’ll notice that none of those adaptations have the slightest hope of creating comparable value to, e.g., Star Trek or Star Wars.

43 Bob from Ohio August 5, 2016 at 1:24 pm

“creating comparable value”

Yes, few things do. So?

It is creativity we are encouraging for the good of the public. The benefit in value to the creator is secondary.

44 (Not That) Bill O'Reilly August 5, 2016 at 3:56 pm

The point is that “value to the creator” does not inure merely to the creator.

45 mpowell August 5, 2016 at 3:12 pm

I’ve thought about this before. But I think there should be a solution. If a rights holder wants to extend their copyright past the life of the creator, they should be able to do so, but at a cost. Say, the greater of $100K/year and 2% of revenue. Or just the flat $100K if you prefer, the % is just a way to avoid too much rentier benefits. It would get the vast majority of work into the public domain where it would be more valuable. while protecting corporate copyright IP that is being actively merchandised. Disney can pay the government directly (instead of lobbyists) and the rest of us can sit in comfortable chairs for the marginal cost of production.

46 Brett Dunbar August 5, 2016 at 7:36 pm

That creates the Jack Williamson problem. He was a fairly successful mid list science fiction writer who was in generally poor health from his seventies but actually lived until he was ninety eight and remained productive, his last original novel was published when he was ninety seven. His publisher knew that they would have a substantial period of exclusivity regardless of when he actually died so it made sense to pay a significant advance for the publication rights. A payment of $100,000 on the other hand would have been prohibitive. That proposal would make it largely impossible for elderly or ill authors to sell the rights to their works as the publisher would have little security.

47 Urso August 5, 2016 at 3:15 pm

Dude I am a huge Star Trek fan (pre-Abrams) but are we really basing FEDERAL LAW on a small subset of hyper-geeks’ excruciatingly boring arguments over “canon” minutae?

48 (Not That) Bill O'Reilly August 5, 2016 at 4:01 pm

Of course not–we’re basing it on whether rights holders’ ability to hold those rights in, essentially, perpetuity allows content rights, in aggregate, to accrue greater value than they otherwise would. My contention is that the competing derivative works which would emerge after the expiration of rights would, in aggregate, have less value than than the single rights-holder managed derivative works, in part because of the network effects of fandom.

Take a look at the asinine pissing matches over whether Nicholson was a better Joker than Ledger, and then imagine companies had a vested interest in promoting those arguments in earnest. Fans would get turned off very quickly.

49 Thomas August 5, 2016 at 4:33 pm

Your argument doesn’t withstand a quick glance. For your argument to be true, world GDP must suffer from multiple manufacturers of any good, and monopoly must be the path to wealth in every market.

50 derek August 5, 2016 at 10:02 am

The reality where you buy a few politicians, quite cheaply I understand, and you guarantee your market.

Pretty good investment. Far better, cheaper, more predictable and profitable than actually innovating and creating something.

51 (Not That) Bill O'Reilly August 5, 2016 at 10:19 am

The premise that Disney is just sitting on its ass passively collecting royalties is ludicrous.

52 Bob from Ohio August 5, 2016 at 11:14 am

“passively collecting royalties is ludicrous”

Of course but without the income from Mickey Mouse [and other older characters] the company might be more creative.

Mickey’ s income stream helped them buy LucasFilms. Who knows, some other company may have used original ideas in the new Star Wars movie instead of remaking the original.

53 Chris August 5, 2016 at 2:24 pm

There is still a difference between copyright and trademark. Disney will still hold the trademark for Mickey Mouse even if its older cartoons and stories enter the public domain and can be published by others. The real question is the degree to which a public domain work can be used for derivative works if the characters are still trademarked. My understanding is that they can’t. People can’t create new Mickey Mouse cartoons or produce their own new designs with the characters. They could, however, sell public domain copies of the older cartoons. I don’t know if they could sell distinct, unaltered images of the cartoons (say on a t-shirt), or if that would count as derivative work and infringe on trademark.

For example, the old Max Fleischer Superman cartoons for the 1940s are in public domain, but Warner Brothers still holds the trademark on Superman so we don’t see derivative works based on the public domain 1940s cartoon. Even if other Superman creations being entering public domain (say the first issues of Action Comics), I don’t think that would change things. I welcome any lawyers to correct me.

On the other hand, some obscure 1940s superheroes have completely entered public domain. Not only are their old comics no longer copyrighted, the trademarks went into abeyance. So new stories are now being created with those characters (or derivatives thereof), sometimes in multiple versions by different creators.

For consumers, I don’t think the issue is that new works with the old characters aren’t being created. It is that so many old stories are no longer available to be read or seen because of complex copyright issues.

54 Bill August 5, 2016 at 8:17 pm

Thoughtful points.

55 Troll me August 5, 2016 at 9:11 am

Europe is exploring a lot of retarded ideas about IP protection these days.

Soon no one will publish anything about those designs, because they protected the images too heavily and the designers got no free marketing. And so no one will know about these designers their designs, etc., and will buy nothing made from those designs.

Like the link tax. Content producers who think they will get ahead if they charge a tax to promote or link to their copyrighted content.

56 Daniel Weber August 5, 2016 at 9:22 am

I’d like a shorter copyright term. But all the allies on my side are crazies who want to end it entirely, or double-dealing fellows who talk about how bad copyright is while selling a $200 textbook.

So I end up advocating for the laws as is.

57 (Not That) Bill O'Reilly August 5, 2016 at 9:27 am

double-dealing fellows who talk about how bad copyright is while selling a $200 textbook.

Not that I could possibly think of an example, but if the author then assigns the same textbook for his own classes I believe that would be self-dealing rather than double-dealing.

58 prior_test2 August 5, 2016 at 1:40 pm

‘…but if the author then assigns the same textbook for his own classes I believe that would be’ normal.

Lots of professors reasonably believe their textbook is the best one on the subject, so as desirable as it is to mock Profs. Cowen and Tabarrok, if they assign their textbook in a course they teach, they are not actually proving any of the Virginia School’s tenets concerning economic self-interest if their students are required to buy the textbook.

It might still work out to their advantage, of course, and since no one can look inside another person’s soul, it is reasonable to assume that both members of the GMU econ dept. write such textbooks for a nobler purpose than lining their pockets.

59 athEIst August 5, 2016 at 3:48 pm

If the costs of textbooks were included in tuition, thus shifting the benefit of cheaper textbooks to the university instead of students, the price of textbooks would decline .

60 prior_test2 August 6, 2016 at 11:31 am

Interesting thought – particularly as this already occurs when it comes to software/database access for enrolled students.

61 (Not That) Bill O'Reilly August 5, 2016 at 4:08 pm

As the copyright holder of the textbook, a professor could distribute it to his students free of charge (I can understand why the publisher may not be fond of this, but if they’re unwilling to publish a textbook over one class worth of sales, perhaps it isn’t actually that good?)

62 piror_test2 August 6, 2016 at 11:42 am

‘As the copyright holder of the textbook, a professor could distribute it to his students free of charge’

Not true – the publisher has a contract with the author, and in most cases this is most specifically excluded. What is not impossible are the following –

a. The author(s) are provided free books from the print run, to distribute as they please – in other words, a freight company delivers two boxes weighing 50 lbs each, and the 100 delivered books are for the author to hand out as they wish (whether the author pays for those copies, and how much, is a contractual question) Not that Profs. Tabarrok or Cowen are likely to discuss at least a possible way to earn a few thousand dollars on the sly – it is even possible they are actually unaware of it, after all. (From past personal experience, I can say this is not the case with some of their GMU colleagues back in the 80s.)

b. The authors retain the rights to their words, so that they can essentially hand out copies of what they have written to their students. This was pretty unusual in the past, but the current digital age is a bit different than the one based on actual costs associated with typesetting and printing a physical copy. However, it is quite possible that such distribution is not allowed – publishers are interested in profit, not spreading knowledge, after all.

63 Troll me August 6, 2016 at 1:44 pm

Shouldn’t it be more a “kudoz for advocating against your interest and according to some ideal” rather than claiming that he’s a hypocrite for profiting from the present rules while advocating for a change which he believes to be beneficial more broadly speaking?

64 Charles August 5, 2016 at 9:28 am

While it is true that Walt will not be creating more today based on these outcomes, it is the case that the amount a creator today will be able to sell her intellectual property for is dependent upon the length of time that the purchaser can expect that property to be protected. Therefore, the incentives today for a creator depend in part on the value of the creation long after death.

65 Anonymous August 6, 2016 at 3:29 pm

Even if we pretend that any artist, writer or film company is so forward thinking that they make decisions on 70+ year time scales, what you say works only for copyright extensions of new works. Retroactive copyright extensions are one of the few ideas that have actually been implemented and don’t have any conceivable benefits. It is almost like making a law that 100k dollars from the tax money will be given to me every year from now on. Why? Because… fuck you, that’s why!

66 M Ward August 5, 2016 at 9:41 am

And why should rights to farm lands be inherited by the original homesteader’s children even after the homesteader is long dead? Shouldn’t these lands revert to the public domain (100% death tax)?

Or perhaps the homesteader improved the land, not for his own benefit, but for his children’s (bequest motive).

Or perhaps the children sold the land to a new owner who valued the land because he was able to improve the land even further only because of the homesteader had made the past improvements. The efficient improvements path might take more than one lifetime (sequential investment).

Or perhaps the inability of the homesteader’s children to manage future improvements decreases the land value. For example, the value of their daycare facility might be diminished if a brothel or crack house were built on the same lot. [Indeed, the reason Disney World has such a large footprint is that a red-light district developed around Disneyland that tended to cut into gate admissions.] Or, porno Mickey reduces sales of family-friendly Mickey (free-riding).

67 derek August 5, 2016 at 11:56 am

I think you have hit upon a solution to the public pension problem. Tax copyrighted works like you tax property. A rate per year independent of anything except existing.

Just wait to see how long it is yours if you don’t pay the tax.

68 Daniel in VA August 5, 2016 at 12:20 pm

Land is a rivalrous good, ideas aren’t. IP isn’t really property but a publicly granted monopoly to induce creation of those ideas.

69 Urso August 5, 2016 at 3:18 pm

The moment you start talking about intellectual “property” you have ceded this critical rhetorical ground. Plus the term is essentially meaningless, legally, since completely different statutory schemes apply depending on which flavor of IP you’re referencing. It’s far more precise to refer to patent, or trademark, or copyright, as appropriate.

70 Troll me August 6, 2016 at 1:50 pm

At 6% interest, the NPV of $1000 of royalties earned in 70 years is a bit over $15.

Do you think that’s really going to substantially impact the quantity or quality of output? How many media products today can be estimated to have a non-zero value in 70 years time?

Surely, those with the huge libraries who it MIGHT make a difference to, will be unlikely to assume that producing an additional 2% quantity of films or books a year would, at the margin, really be relevant to the profitability of the entire library 30, 50 or 70 years out.

71 Anonymous August 6, 2016 at 3:22 pm

I have always suspected that the real reason why media industry really really wants these almost-infinite copyright terms is to limit competition from older works. No-one is making any real money by selling 50 year old films now, but if they were completely free, they might act as a partial substitute of entertainment for people who might otherwise spend money on new films. This is of course disgusting rent-seeking at the expense of everyone else in the society, but that is almost always the case when copyright law is being changed so we should have almost gotten used to it by now.

72 Troll me August 8, 2016 at 3:17 am

Yes, it is disgusting rent-seeking.

Well, I don’t honestly mind it all that much. It gives me all the moral license in the world I want to take advantage of shared use of their works – they would have fleeced me first, so I unfleece myself pre-first.

73 Hazel Meade August 5, 2016 at 9:41 am

I generally agree, but one does have to draw some distinctions here. “Protectionism” prevents competitors with a *similar* product from entering a market. Copyright prevents competitors from selling *identical* products. There is a difference between someone selling identical copies of Disney films and someone selling a Toyota in competition with a Ford.
Because books and other digital media are identically reproducible, the “competitor” who wishes to enter the market and sell a copy is not innovating at all.

That said, obviously creative license should include using Mickey Mouse images, but IIRC the Mickey Mouse is protected as a trademark, not a copyright.

74 Cyrus August 5, 2016 at 9:49 am

There’s a straightforward accounting argument for a fixed-term copyright of 15-45 years (depending on your choice of a plausible discount rate). At the point where NPV of future monopoly profits = NPV of past monopoly profits, the public has paid for the IP by granting the past monopoly.

75 Thomas August 5, 2016 at 4:39 pm

And where the future is infinity?

76 Troll me August 6, 2016 at 1:53 pm

Has to do with exponents and discount rates.

If the interest rate is 6%, the value of the infinite income flows, brought into 2016 currency, could be divided into two time periods in order to equally divide the net present value (NPV) of the flows, such that half of the NPW would be earned by a specific date some decades later, and the other half of the NPV would relate to all flows into infinity.

77 Lazy Rentier August 5, 2016 at 10:14 am

Ain’t nothin’ wrong with protectin’ IP rights.

If a mundane story with Mickey Mouse as the lead character sells 20x more than the same mundane story with Gregory the Hairy Elephant with Anger Management Issues, then there’s surely some value in the character, whether created at character inception (Disney himself and his workers) or in later development (work by the company later on). Either way, as the rights holder, they should be in control. It hardly stifles innovation if you can’t use a character or a specific design of furniture. Build a better one. If you build it (and market it well), they will come!

78 Marton August 9, 2016 at 4:42 am

The characters are already trademarked. Nobody is arguing about that. We are arguing about the works, which are copyrighted (retroactively ever longer).

79 Bill August 5, 2016 at 10:40 am

Harry Potter, we’re coming after you.

Alex has a secret weapon. It’s called the Tabarrok curve.

But, don’t worry.

It’s copyrighted and will soon disappear.

80 Urso August 5, 2016 at 3:19 pm

Except that JK Rowling is not dead. Do kids today still read Harry Potter? I wonder if they consider it old and passe. The prime HP fanbase is now in their late 20s and early 30s.

81 Bill August 5, 2016 at 3:27 pm

No, but she created her works earlier, and from Alex’s logic, whether she is alive or dead, it was created in the past and she (or her estate) should not rewarded. Of course, this is silly. It’s sophistic to say: dead authors should not be rewarded for their past accomplishments. Only problem is: that when they were alive, the value of the future revenue stream will turn on whether the right to exclude is extinguished or not, and whether the person who buys the rights has the incentive to further invest in the asset or promote it.

82 Urso August 5, 2016 at 3:30 pm

“from Alex’s logic, whether she is alive or dead, it was created in the past and she (or her estate) should not rewarded” Interesting interpretation, I didn’t read it that way at all.

83 Malik August 5, 2016 at 4:42 pm

Ah, yes, a serious Democrat as I suggested earlier: more IP for rentiers but a bigger cut for government too! Greedy, greedy.

84 Bill August 5, 2016 at 3:31 pm

You need help with current culture.

85 Troll me August 8, 2016 at 3:21 am

Obviously, she never would have written the books without 70 year copyright. Because that’s actually how creative content works.

86 Max August 5, 2016 at 10:41 am

Retroactive extension is pure rent seeking, sure. That’s not controversial. It’s an exaggeration to say that copyright is all a pretense.

87 Bob from Ohio August 5, 2016 at 12:03 pm

“Eames died in 1978, so the new protection extends the copyright of the many chairs, tables and clocks he designed until 2048. ”

Since his designs are already in the public domain, is the copyright actually revived? Or does the extension only apply to un-lapsed rights [someone who died 24 years ago]?

I would think the latter despite what the article says.

88 C. Gorman August 10, 2016 at 11:12 am

The Eameses’ designs are in the public domain in the USA because our laws have generally not allowed “useful articles” such as chairs and lamps to be copyrighted. And the USA, the utility and design patents that originally protected the Eameses’ furniture expired many years ago. Thus in the USA, anyone may legally copy Eames furniture designs today: there’s nothing illegal whatsoever about it, and indeed Congress and the courts have both stated explicitly, numerous times, that they have declined to extend copyright protection to useful articles precisely because they think it is socially desirable in a democracy to have well-designed useful articles available at affordable prices to broad swaths of the American public. The short terms of utility patents and design patents (short relative to copyrights, at least) make it possible for multiple producers to compete with the original designers/assignees on the basis of price and quality fairly quickly. (US IP and trade laws have been extremely effective over the last 50 years at ensuring that Americans have access to a wide gamut of very cheap products and clothes. Whether that’s what democracy really means, I’m not sure.)

In contrast, most western European countries’ copyright laws *do* allow chairs and lamps to be copyrighted, and thus many/most of the Eameses’ furniture designs are still protected by copyright in Europe. Most European countries have placed a greater emphasis on protecting designers’/assignees’ intellectual property rights than on ensuring that creative works are relatively quickly accessible to, and thus able to benefit, the public. I don’t think the USA’s system of IP law is perfect, but I do like the fact that it doesn’t grant generations-long monopolies for chairs. (If we had had Euro-style copyright laws in the USA during the twentieth century, the famous webbed chair that Jens Risom—who is now 100 years old—designed in 1942 could in theory have been protected through *at least* 2086…that’s a term of at least 144 years, which seems a bit much!)

89 Bill August 5, 2016 at 12:11 pm

Here’s an interesting economics problem.

I can trademark the name Harry Potter, and then license it for, say, in an amusement park. Trademarks are perpetual, so long as they are in use.

A complementary good to a trademarked product might be a book. But, if Alex gets his way, copyright terms would be limited, so if the trademark owner advertised the park or the character name, which have valid licenses of the trademark, the book publisher (who can now publish the book without royalty), get;s a free ride on the trademark owners publicity.

Free riding, of course, by the book publisher. But, also, less advertisement in the trademark than there would be if the copyright for the book were still in existence. In essence, users of the trademarked goods pay to increase the enjoyment of the reader of the book that is out of copyright.

Ever seen a Dicken’s amusement park.

90 Ted Craig August 5, 2016 at 12:56 pm
91 Bill August 5, 2016 at 3:30 pm

Is that next to Trump World Towers? https://en.wikipedia.org/wiki/Trump_World_Tower I guess Trump will never lose rights as his children would be called Trump and could claim that the tower is named after them.

While we’re at it: I have a new way to extend the copyright: co-author your book with a grandchild, since the term of the copyright is based on the death of the last co-author.

92 Malik August 5, 2016 at 4:46 pm

Better: create a perpetual agent that is a individually owned non-profit. Solicit donations by selling the perception of corruption. Spend nothing on charity or the stated purpoae of your non-profit. Ensure noble status for your progeny and theirs and theirs and theirs – estate tax free!

93 Bill August 5, 2016 at 4:56 pm

It’s already been done.

94 Urso August 5, 2016 at 6:23 pm

This is brilliant.

95 Todd Kreider August 5, 2016 at 12:37 pm

“Hat tip: The excellent Mark Thorson.”

Wait… Tyler Cowen has a copywrite on the phrase “The excellent _____________”

Was this cleared through your lawyers?

96 Todd Kreider August 5, 2016 at 12:39 pm

Er, copyright…

97 prior_test2 August 5, 2016 at 1:34 pm

Macualay had this covered back in 1841, in that flowing Victorian prose style so beloved by those with a proper respect for erudition – ‘We have, then, only one resource left. We must betake ourselves to copyright, be the inconveniences of copyright what they may. Those inconveniences, in truth, are neither few nor small. Copyright is monopoly, and produces all the effects which the general voice of mankind attributes to monopoly. My honorable and learned friend talks very contemptuously of those who are led away by the theory that monopoly makes things dear. That monopoly makes things dear is certainly a theory, as all the great truths which have been established by the experience of all ages and nations, and which are taken for granted in all reasonings, may be said to be theories. It is a theory in the same sense in which it is a theory, that day and night follow each other, that lead is heavier than water, that bread nourishes, that arsenic poisons, that alcohol intoxicates. If, as my honorable and learned friend seems to think, the whole world is in the wrong on this point, if the real effect of monopoly is to make articles good and cheap, why does he stop short in his career of change? Why does he limit the operation of so salutary a principle to sixty years? Why does he consent to anything short of a perpetuity? He told us that in consenting to anything short of a perpetuity he was making a compromise between extreme right and expediency. But if his opinion about monopoly be correct, extreme right and expediency would coincide. Or rather why should we not restore the monopoly of the East India trade to the East India Company? Why should we no revive all those old monopolies which, in Elizabeths reign, galled our fathers so severely that, maddened by intolerable wrong, they opposed to their sovereign a resistance before which her haughty spirit quailed for the first and for the last time? Was it the cheapness and excellence of commodities that then so violently stirred the indignation of the English people? I believe, Sir, that I may safely take it for granted that the effect of monopoly generally is to make articles scarce, to make them dear, and to make them bad. And I may with equal safety challenge my honorable friend to find out any distinction between copyright and other privileges of the same kind; any reason why a monopoly of books should produce an effect directly the reverse of that which was produced by the East India Companys monopoly of tea, or by Lord Essexs monopoly of sweet wines. Thus, then, stands the case. It is good that authors should be remunerated; and the least exceptionable way of remunerating them is by a monopoly. Yet monopoly is an evil. For the sake of the good we must submit to the evil but the evil ought not to last a day longer than is necessary for the purpose of securing the good.’ http://homepages.law.asu.edu/~dkarjala/OpposingCopyrightExtension/commentary/MacaulaySpeeches.html

98 Ray Lopez August 6, 2016 at 9:54 am

Copyright was a big deal to 19th century authors, like Dickens and the one you cite. There’s even a book on the importance of copyright to these authors, who, as you say, covered all the issues and angles of this topic exhaustively. No time at the moment to look up said book, it’s by an English major, a women, and it was dry but interesting.

99 Anonymous August 6, 2016 at 6:25 pm

While reading this from modern perspective, one should remember that in Macaulay’s time, there was no realistic way to crowfund things and the idea of government funding a public good was pretty underdeveloped. Nowadays we do have alternatives to intellectual monopolies and we should use them instead. I don’t know why these alternatives are not even considered in public discussion.

100 Anonymous August 6, 2016 at 3:16 pm

I recommend looking into Richard Stallman’s views on copyright. For example: https://www.gnu.org/philosophy/freedom-or-copyright.html or one of his talks on the issue: https://www.youtube.com/watch?v=eginMQBWII4 .

A concrete proposal Stallman has is following: 1) limit commercial copyright to ten years. 2) Always allow non-commercial sharing. 3) Fund creative efforts from tax funds by giving creators money in proportion to how popular their work is.

The third proposal is interesting in many ways. Usually, one of the largest benefits of funding something with free markets is thought to be that markets contain information about how the money should be distributed among actors of the market. However, in the case of digital downloads we have this information also without markets; just take the number of downloads from some popular download site. Keep in mind also that if private sharing was legal, we would most likely have more, bigger and more respectable download websites available for this data. Given this, what exactly is the benefit of restricting copying of digital goods and thus giving them market value? To decide the total amount of money we should spend on culture (and not how it’s distributed)? Not really; since copyright works via creating artificial monopolies, I can’t believe this leads to efficient allocation of money.

By the way, in case Alex is reading this: I recently read and very much enjoyed your article “Patent theory versus patent law”. Have you considered writing similar work on copyright? I think that the main point that law doesn’t take into account sunk costs of creative effort at all also generalizes to copyright.

101 JFern August 8, 2016 at 4:41 am

Unlike trademarks, which preserve the owner’s brand and are under continued use, a copyrighted product is not “used” by its owner other than for reproduction and resale. Yet, copyrights receive protection for upwards of ~150 years and patents only receive 20 years. Since copyrights are not needed by their creator to protect their brand (like trademarks) or to exclude competition and make up for research costs (like patents), it should be obvious that the current IP laws provide an unnecessary large incentive for creators to produce new works that could be reduced without cutting into the amount of new works being created.

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