Re: Copyright Extension Bill Passes Congress

On 10/28/98, Robert Cumbow <cumbr[_at_]perkinscoie.com> wrote:
>
> Actually, I don't buy the argument that an author's heirs don't
> deserve to make money off the author's work. I don't expect either
> of my daughters will become a lawyer, but I hope to give them a good
> start in life with the money I've worked hard to make from that
> career. I don't know why an author or artist shouldn't be allowed
> to rely on the prospect of his work becoming a legacy for his family.

You make money by providing services during your lifetime. You are paid during your lifetime, and leave the money to your heirs. They can invest that money and earn interest, but if they want to earn more money, they have to provide additional services.

The author also earns money during his or her lifetime, and can leave that money to his/her heirs. The author's heirs can invest that money and earn interest; but now they want to earn additional money WITHOUT providing any additional services.

The difference is that you typically charge for your services in one lump sum (even if the benefit of those services extends over a period of time, or even after your death). If you secure a legal right for your client, they don't pay you annually for as long as they continue to exercise that right. An author, however, typically gets a stream of royalty payments. How long should that stream last?

The problem is that a copyrighted work is a public good: its value does not depreciate over time, so the benefits it produces are potentially infinite in duration. Unless we want to to keep track of every authors' heirs for eternity, some time period must be set. In order to reduce transaction costs in later years, a shorter period makes more sense than a longer one; but it must be long enough to produce the number of artistic works we desire.

It seems to me that conceptually, copyright should be measured by the amount that authors would accept to create the desired amount of new works and to dedicate those works to the public immediately. If we could estimate that, then we could calculate a stream of royalty payments that would provide the equivalent present value.

This is, of course, impossible to calculate. In addition, it involves a trade-off: the author could accept smaller royalties for a longer period, or greater royalties for a shorter period, and still have the same present value. So instead of allowing authors to negotiate both values, what we do if define the time period, and let the authors negotiate only the amount.

Congress must settle on an appropriate figure, and we can argue about whether life plus 70 is or is not reasonable prospectively. But the fact remains that the heirs of authors who negotiated their bargain at a time when the period was 56 years get a windfall when the period is extended to 75 or 95 years.

Tyler T. Ochoa
Associate Professor
Whittier Law School
<tochoa[_at_]law.whittier.edu> Received on Fri Oct 30 1998 - 01:50:21 GMT