Making Sense of Intellectual Property Law

A new book tries to bring some balance back to copyright policy.

Copyright Unbalanced: From Incentive to Excess, edited by Jerry Brito, Mercatus Center, 137 pp., $12.95

The United States Constitution grants Congress the 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." Today intellectual property law arguably does not serve that purpose, morphing instead into a tool to secure the incomes of lobbyists, lawyers, and powerful special interests. The successive retroactive extensions of copyrights, for example, make a mockery of the phrase "for limited Times" and surely don't create incentives to create what was already created. And it hardly promotes the Progress of Science and useful Arts to suppress technological innovations, as Congress did when it tried to ban the VCR in the 1980s. It failed to block that development, but it succeeded in hampering DVD technology in the 1990s and in prohibiting outright technologies that might be used to circumvent technical protection mechanisms on copyrighted material, even if the technology can also be used in perfectly legal ways.

In Copyright Unbalanced, legal scholar Jerry Brito of the Mercatus Center—full disclosure: he and I used to be colleagues at the Cato Intitute—has gathered together a number of lawyers, economists, entrepreneurs, and technology wonks to make the case(s) for throttling back what copyright law has become. It's a stimulating little collection that should get wide attention.

The volume is directed primarily at "conservatives and libertarians," urging them to "be skeptical of the copyright system that has developed over the last century." As it happens, copyrights and patents (generically known as "intellectual property," although that term also covers some rather different legal instruments, such as trademarks, bailments, and trade secrets) generally find both their strongest supporters and their strongest detractors among libertarian free-market enthusiasts. Brito contrasts the brilliant libertarian lawyer Lysander Spooner as holding down one extreme pro-copyright end of the continuum with my humble self as holding down the other. (I am extremely skeptical of patents and copyrights, and I did my bit some decades ago to revive the traditional classical liberal skepticism towards the economic/legal and moral justifications of those institutions.)

Libertarians believe that legal protections of property rights are necessary to realize liberty, since they delineate the ways in which we are free to act and the ways in which our actions would impinge on the rights, and thus the liberties, of others. Well-defined, legally secure systems of property replace conflict over scarce resources with trade and peaceful cooperation. They work well when we're talking about parcels of land, subsurface veins of metals, flows of water, and other scarce resources, for such systems generate "compossible" claims, meaning that my free exercise of my rights is compatible with your free exercise of yours; you can dance in your house and I can read in mine.

The simultaneous realization of liberty and exclusive property rights breaks down when it comes to "ideal objects," such as songs, poems, and images, for when someone asserts a right over a song, it means a right to control my own body if I choose to sing it. As Thomas Jefferson put it, "If nature has made any one thing less susceptible than all others of exclusive property, it is the action of the thinking power called an idea….He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me." The copyright holder's right over a song limits the rights of action over their own voices of everyone else on the planet, without their agreement.

Combined with the state's proactive powers of enforcement, that presents serious threats to freedom of expression, as the hugely controversial Stop Online Piracy Act (SOPA) demonstrated. In one chapter of Brito's book, David Post of Temple University Law School vividly describes the bill's dangers to freedom of expression and the rule of law, by vesting in copyright holders the power to "disappear" websites, to shut down bank accounts upon mere written notice, and to force foreign entrepreneurs to submit to the jurisdiction of the US government, which imposes criminal penalties for what is not illegal in other countries.

Two more of the book's contributors, columnist Reihan Salam and digital entrepreneur Patrick Ruffini, highlight SOPA's anticompetitive dangers. In another chapter, Yale Law School lecturer Christina Mulligan piles on with a description of the threats copyright poses to freedom of expression even without SOPA—by, say, requiring Youtube and other Internet services to take down content merely upon being given written notice, not evidence or proof or a court order, that posted content infringes intellectual property. (Mulligan's negative appraisal of the Digital Millennium Copyright Act, which she states "fails to protect free expression and has been routinely abused by copyright holders and other parties,"  is at odds with David Post's praise for the DMCA, whose  "notice-and-takedown scheme has worked quite well, removing immense quantities of infringing material from distribution over the Internet while imposing few burdens on user expression or the free flow of information.")

From the perspective of economic analysis, the most interesting contribution is a chapter by Eli Dourado, a Ph.D. student in economics at George Mason University. Dourado's essay on the "new economics of weak copyright enforcement" shows how charging different prices to different customers can be a profitable strategy for producers of public goods. The seemingly inefficient New York Times paywall is easily circumvented, for example, but it distinguishes those who will pay to get access without having to undertake extra steps from those who prefer to undertake the extra steps. The minor losses to digital ad revenue are more than made up for by increases in subscription revenues.

Another former colleague, Chapman University law professor Tom Bell, concludes the book with "Five Reforms for Copyright." I found a couple of them implausible, notably his call for reinstating the 1790 Copyright Act, which only covered maps, charts, and books. But Bell's ideas are well worth considering as the current system becomes more unwieldy and threatens the rule of law and freedom of expression.

Even copyright's most ardent advocates acknowledge that there must be some limits to a person's ability to restrict, or to demand benefits from, other people's use of the works he or she produced. Copyright Unbalanced is a good place to start to sort out where those limits should be.