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Copyright Law

: Moral Panics and the Copyright Wars

Ben and the Not Invisible Hand

By William Patry, Esq

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Here is Ben's reply to my "Adam Smith and the Invisible Hand" post:

Talk about "wow"! I cite Adam Smith in defense of the profit motive in copyright, and I (and copyright owners) get lumped in with those who espouse an "obviously discredited theory" that recently led us to the brink of global economic collapse: Alan Greenspan, "bankers, hedge fund owners, AIG, and the real estate industry." Talk about guilt by association...

I think the problem lies in a misunderstanding of what I argued in my last post. You say:

What Ben is saying is that by acting in ways that show no concern for a balanced or effective copyright, the copyright industries are inadvertently promoting such balance and such effective laws.

Not quite. What I tried to say, perhaps not clearly enough, is this: Congress (and to some extent the courts) set the bounds of copyright. They're the ones who do the balancing. Once those bounds are set, the system says to copyright owners: Use those rules to your maximum advantage. Set your business models accordingly. Collect license fees where the law says you're entitled to them. If someone violates your rights, you can seek redress in the courts. Of course, the flip side is that users can use copyrighted works as the law permits, through fair use, first sale, and other doctrines. Again, reasonable people can disagree over the scope of copyright, and its limits. But the point of the system as a whole is to encourage copyright owners to act in their self interest, on the theory that that will result in the creation of an optimal amount of artistic and literary works. And given the output of the US creative industries over the past century, I think the system has worked rather well.

And what I'm saying isn't some radical, hypercapitalist theory held only by Adam Smith, Alan Greenspan, and the Hollywood chapter of the Ayn Rand Society. Let me keep this post short and sweet by closing with a quotation from Ruth Bader Ginsburg -- no radical hypercapitalist, she:

Justice Stevens? characterization of reward to the author as ?a secondary consideration? of copyright law, post, at 6, n. 4 (internal quotation marks omitted), understates the relationship between such rewards and the ?Progress of Science.? As we have explained, ?[t]he economic philosophy behind the [Copyright] [C]lause ? is the conviction that encouragement of individual effort by personal gain is the best way to advance public welfare through the talents of authors and inventors.? Mazer v. Stein, 347 U.S. 201, 219 (1954). Accordingly, ?copyright law celebrates the profit motive, recognizing that the incentive to profit from the exploitation of copyrights will redound to the public benefit by resulting in the proliferation of knowledge? . The profit motive is the engine that ensures the progress of science.? American Geophysical Union v. Texaco Inc., 802 F. Supp. 1, 27 (SDNY 1992), aff?d, 60 F.3d 913 (CA2 1994). Rewarding authors for their creative labor and ?promot[ing] ? Progress? are thus complementary; as James Madison observed, in copyright ?[t]he public good fully coincides ? with the claims of individuals.? The Federalist No. 43, p. 272 (C. Rossiter ed. 1961). Justice Breyer?s assertion that ?copyright statutes must serve public, not private, ends? post, at 6, similarly misses the mark. The two ends are not mutually exclusive; copyright law serves public ends by providing individuals with an incentive to pursue private ones.

Eldred v. Ashcroft, 537 U.S. 186, 212 n.18 (2003). That was the view of seven members of the US Supreme Court in 2003, and, given dissenting Justice Souter's replacement with Justice Sotomayor, I wouldn't be surprised if there were now eight.

Full post as published by Moral Panics and the Copyright Wars on August 23, 2009 (boomark / email).

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