Monday, July 16, 2007

Statute of Anne Too Generous by Half

The 1710 UK Statute of Anne established a term of protection of 14 years for an original period of protection, followed by a 14 year renewal term. This is the same durational structure adopted in the U.S. in the 1790 Act. The length of copyright has been on an upward arc ever sense, with the current regime in the U.S. at the obscene level of life of the author plus 70 years, a term utterly divorced from the reasonable need for incentives to create.

During the briefing leading up to the U.S. Supreme Court's oral argument in the Eldred case, 537 U.S. 186 (2003), which upheld as constitutional the 1998 term extension, a fine brief by economists such as Ronald Coase and Milton Friedman was submitted. The brief concluded that the additional twenty years provided was a windfall that would lead at most to a statistically trivial incentive to create, little if any different from a perpetual term. At the same time, the economists asserted that there were significant negative social costs associated with term extension, principally in the form of increased costs for existing works whose term was extended, thus leading to an overall reduced level of innovation (e.g. prohibiting the creation of derviative works building on existing works).

The brief did not attempt, though, to set out an optimal term of protection. Last week, Rufus Pollock,who is pursuing a Ph.D in Innovation and IP at Cambrdige University and who recently accepted a three-year fellowship at Emmanuel College (also Cambridge), has made available (here, at his website) a copy of the paper doing just that. The paper is called, ""Forever Minus a Day: Some Theory and Empirics of Optimal Copyright." The reference to "forever minus a day," is to a remark attributed to the late Jack Valenti (may his Rock keep and save him). Mr. Pollock concludes that the optimal term of protection to be around 14 years, half of that possible under the two early acts mentioned above. One interesting point about his analysis is that it is based on the dramatic (and he believes permanent) fall in the costs of production as a result of the savings from digital means of production.

He does of course also discuss the difference between low costs of production and the other side of the equation, the low costs of reproduction, and this is precisely what I find interesting: in in the policy debates about digital technology, going back in my experience in Congress to 1992, digital technology was regarded as a monolithic monster poised to forever destroy copyright unless some powerful weapons (read DMCA) were put in place. Mr. Pollock's paper is unique for looking at the larger picture, i.e., that is production costs and how those costs impact on the extent of incentives required. The paper is chock-full of statistics which is likely to turn many away, but there are other papers on his site (link provided above) that may prove easier going.

12 comments:

Crosbie Fitch said...

A paper presenting an optimal term of enslavement (balancing competence, fitness and motivation) would have about the same appeal to MLK.

The problem with copyright is not the extent of its term, but that it is ineffective at any term.

William Patry said...

I don't think that is Mr. Pollock's conclusion

Admiral said...

I am not sure that the Harvard link works, and even when I change the spelling of Harvard, still getting problems.

William Patry said...

Well, I fixed the link, but screwed up the line spacing

Max said...

I wasn't impressed with the paper because, essentially, a bunch of gut feelings on the value of X or Y sent through the correct math formulas find that the correct term should be what the term orignally was. Interesting.

William Patry said...

Max, I am not going to defend the number picked by Mr. Pollock, and agree what you stick in at the beginning is likely to determine what comes out at the end. The interest of his paper for me was only conceptual: that the reduction in costs at the production side due to digital technology should be factored in to any calcualtion of what the optimal term of protection shold be, whether that is 14 or 74 years.

Timothy Phillips said...

After filling up the backs of a few envelopes I find I agree with Pollock's treatement up to Proposition 10. In fact I agree with all of it, but confirming the math on the dynamic part will take longer. It seems a foregone conclusion, though, that once Pollock introduces "cultural decay" into the model, it will favor shorter terms: Assuming the market is stable enought to bring a book into existence in the first place, it seems obvious that consumer surpluses are greater if a title is thrown open to free competition while it is still near the height of its popularity. The benefit is less if the book is long past its prime before it is promoted to the public domain. Just as, on the patent side, the public will benefit more if the patent on an antibiotic expires while the antibiotic is still near its peak effectiveness.

William Patry said...

Bravo to you for your efforts, Timothy.

Laurent GUERBY said...

"Mr. Pollock's paper is unique for looking at the larger picture, i.e., that is production costs and how those costs impact on the extent of incentives required."

I'm surprised by this remark.

Michele Boldrin and David K. Levine (both professor of economics) book "Against Intellectual Monopoly" has a far more complete analysis (see chapter 7 on copyrights).

The book is available for free online here and there is a 2007 update also available for free.

William Patry said...

Mr. Guerby, you must have overlooked this part of the post: "I am aware of some earlier efforts in this respect, but at least in one case I don't think it has the rigor of Mr. Pollock's)."

d.keogh said...

The idea of an optimal copyright term which takes into account anything other than maximizing creative output is fundamentally flawed. The Constitution does not authorize Congress to confiscate private property for public use without compensation to it's owner.

A copyright term of the life of the author plus another average lifespan is justifiable. The present limitation on copyright duration is a little short but pretty much on target.

Consider:

When a natural person's copyrights are limited to their remaining lifespan plus 70 years the author is able to transfer his property to another living person for the approximate remainder of that other person's lifetime. The ability to leave property to living childern or grandchildren for their lifetime is generally seen as an incentive to obtain property.

When the continued existence of an author's private property is calculated from the death of that author, the additinal 70 years assures that no other person will have an incentive to expedite the death of that author in order to gain some advantage from the copyright's expiration. Not fearing premature death for owing private property is an incentive to obtain property.

William Patry said...

Dear d. keogh, certainly the debate on what is the optimal length of copyright has been debated for many lifetimes and will never be resolved. I would disagree that copyright a priori is private property; it is, instead, a statutorily created right that may be crafted as Congress sees fit, and at least with respect to domestic works, abolished entirely.
The only reason for having it is as an incentive to create works, and some works need more incentive than others. I have, however, never heard of or met an author declined to create a work because the term of protection was too short. The pay-back for most works is calaculated on a very short basis and most works have a very short shelf-life.
When I die, I would be very happy for my wife and children to receive some of the proceeds from my treatise, but I would have written it if the term was life of the author because it is a way for me to earn money for them now. I can't justify for myself or others a term of life plus 70 years; it is completely divorced from any need for an incentive to create and is too attenuated from the author and disastrous as a policy matter. If an author created something at 30 and lives to 90, the term of protection will 130 years, an obscene length of time in my opinion.