The Copyright Jungle

On Tuesday, the librarian of congress rejected the recommendations of the Copyright Arbitration Royalty Panel, a trio of arbitrators who had proposed that Internet radio stations pay some very steep fees to performers and record labels for the right to broadcast their music. This would have been separate from the payments that those stations—along with their AM and FM counterparts—deliver to songwriters. It was a new fee structure altogether, one that ordinary radio stations don't pay. It was also much, much higher than the songwriters' fees—prohibitively high, in fact.

The librarian's decision follows a loud and popular campaign against the panel's proposal, and while it doesn't conclude the discussion—the Digital Millennium Copyright Act requires some sort of royalty system to be created, and a final proposal is supposed to be devised within the next 90 days—it does mean that Net stations everywhere are feeling awfully relieved.

There's a lesson here—not a new one, but a fact that tends to surprise people when they first probe the strange terrain of intellectual property law and expect to find a rational, well-organized system based on a few simple rules. Turns out, it doesn't make much sense. In fact, it's downright funky. So Internet radio stations will face a fee that FM broadcasters avoid? That's hardly the oddest nuance to the law. Why is it that you can own the rights to a business strategy, but not a fashion design? And what about that strange wrinkle that lets record companies pay artists far less in royalties—sometimes none—from sales made through record clubs? (Yes, these are the same record companies who wailed about artists' rights during the Napster debate.)

The world of intellectual property is a political battlefield not unlike a budget bill, with different interest groups competing for shares of the pie. Some of them win, some of them lose, all of them compromise—and when the outcome coincides with justice, that's more a matter of luck than design.