Copyhype

Late last Friday evening, a policy brief written by 24 year old Derek Khanna was posted to the website for the Republican Study Committee (RSC), a caucus of conservative House Republicans. The brief, Three Myths About Copyright Law and Where to Start to Fix It, was removed from the site Saturday morning, but copies were all over the internet shortly afterward, with critics of copyright applauding the paper.

Many on the internet were quick to declare the paper the absolute most stunningly brilliant paper history has ever produced. Techdirt’s Mike Masnick lamented the fact that, having read the paper, he will no longer be able to enjoy future papers, for they will only pale in comparison.

RSC spokesman Brian Staessle remarked upon retracting the brief that “we hope people will now use this opportunity to engage in polite and serious discussion of copyright law.” I agree. Copyright law increasingly requires dialogue from all corners of society; this is, in fact, one of the reasons I began writing this blog over two years ago.

But any debate or dialogue should begin with sound premises. This policy brief doesn’t. Instead, like an unfortunate strand of copyright skepticism, it runs from reality, rewrites history, and hides from logic.

The brief begins with Khanna presenting three “myths” that he debunks, and then turns to several areas of concern under current copyright law while finally offering a number of potential policy solutions. Today I want to begin an in-depth look at the brief, starting with the first two “myths”. In later posts, I will look at the remaining sections.

Myth 1. The purpose of copyright is to compensate the creator of the content

Khanna begins:

It’s a common misperception that the Constitution enables our current legal regime of copyright protection – in fact, it does not. The Constitution’s clause on Copyright and patents states:

“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;” (Article I, Section 8, Clause 8)

Thus, according to the Constitution, the overriding purpose of the copyright system is to “promote the progress of science and useful arts.” In today’s terminology we may say that the purpose is to lead to maximum productivity and innovation

Khanna is correct on one point: the view of the Copyright Clause he disagrees with is indeed common. But rather than being a misperception, this is the view embraced by the Founding Fathers and, over the past 200 years, the Supreme Court, Congress, and numerous jurists, scholars, and writers. ¹See my post Copyright is for the Author First and the Nation Second.

In recent decades, many copyright skeptics have increasingly turned to the Founding period of US history in search of arguments against the perceived overreach of the law. This search has given birth to many myths about the goals and purposes of Congress’s copyright power.

Though there was little said about the copyright power during this time, what was said more often than not supports a property right to establish a functioning market for the creation and dissemination of expressive works, not the utilitarian view embraced by Khanna here.

This is evident several years before the Constitution would be drafted. James Madison, who would author the Copyright Clause sat on the committee of the Continental Congress which recommended that the states pass laws protecting copyright. In March 1783, this committee issued a report saying it was “persuaded that nothing is more properly a man’s own than the fruit of his study, and that the protection and security of literary property would greatly tend to encourage genius.” ²24 Journals of the Continental Congress 326.

Most of the States that subsequently adopted copyright statutes explicitly adopted the Continental Congress’s natural rights language. ³The preambles to the Massachusetts, New Hampshire, and Rhode Island copyright acts stated:

Whereas the improvement of knowledge, the progress of civilization, the publick weal of the Commonwealth, and the advancement of human happiness, greatly depend on the efforts of learned and ingenious persons in the various arts and sciences: As the principal encouragement such persons can have to make great and beneficial exertions of this nature, must exist in the legal security of the fruits of their study and industry to themselves, and as such security is one of the natural rights of all men, there being no property more peculiarly man’s own than that which is produced by the labour of his mind.

In a similar fashion, North Carolina’s copyright act read:

Whereas nothing is more strictly a man’s own than the fruit of his study, and it is proper that men should be encouraged to pursue useful knowledge by the hope of reward; and as the security of literary property must greatly tend to encourage genius, to promote useful discoveries and to the general extension of art and commerce.

If compensating creators is not the purpose of copyright law, then early lawmakers must not have gotten the memo either. As the first Congress worked on a copyright act, South Carolina Representative Aedenus Burke urged his fellow Representatives of the importance to creators of passing a copyright bill, noting “several gentlemen had lately published the fruits of their industry and application, and were every hour in danger of having them surreptitiously printed.” ⁴Annals of Congress, 1st Cong., 2nd sess., 1080.

Most telling, the Supreme Court has spoken on the Constitutional purpose of copyright twice in the past decade. Claims similar to Khanna’s were thoroughly rejected by the Court in 2003:

JUSTICE STEVENS’ characterization of reward to the author as “a secondary consideration” of copyright law 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.” 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.” 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.” JUSTICE BREYER’s assertion that “copyright statutes must serve public, not private, ends,” 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. ⁵Eldred v Ashcroft, 537 US 186, n.18.

And again in 2012:

Even were we writing on a clean slate, petitioners’ argument would be unavailing. Nothing in the text of the Copyright Clause confines the “Progress of Science” exclusively to “incentives for creation.” Evidence from the founding, moreover, suggests that inducing dissemination—as opposed to creation—was viewed as an appropriate means to promote science. Until 1976, in fact, Congress made “federal copyright contingent on publication[,] [thereby] providing incentives not primarily for creation,” but for dissemination. Our decisions correspondingly recognize that “copyright supplies the economic incentive to create and disseminate ideas. ⁶Golan v Holder, 565 US ___ (2012).

Khanna next attempts to cast proponents of copyright as somehow taking an “entitlement” mentality toward their rights. He concludes this first section by saying:

Strictly speaking, because of the constitutional basis of copyright and patent, legislative discussions on copyright/patent reform should be based upon what promotes the maximum “progress of sciences and useful arts” instead of “deserving” financial compensation.

I doubt many — if any — creators believe they are “entitled” to financial compensation merely because they have created something. Like any market, creators are only entitled to seek profit, not have it given to them. As Irwin Karp testified during the last Copyright Act revision, though the Copyright Clause establishes these rights, “it does not guarantee a fair reward, or any reward.”

For authors and publishers, both commercial and non-profit, must depend on income derived from uses of their books and journals to compensate for the talent, labor and money expended in creating them, and provide working capital for further publications. And as entrepreneurs, they must assume the ever-present risk that books and journals produced by substantial labor and cash outlays will fail financially although they make valuable intellectual contributions to the public interest.

But there’s a huge difference between feeling entitled to a reward and arguing for compensation when economic users exploit one of the exclusive rights of a work — by reproducing or publicly performing a work, for example. One of the favorite claims of copyright skeptics is that creators routinely oppose new technology because it “disrupts their business model.” ⁷See, for example, previous posts on The Story of John and Jack and 100 Years of Copyright and Disruptive Technology. On the contrary, it is often the case that the businesses utilizing the new technology are the ones who feel entitled — entitled to profit off the exploitation of established rights without compensating creators merely because they are using new technology. In this case, creators do “deserve” compensation. This isn’t a prize at the bottom of the box, it’s one of the foundations of a just capitalist society.

Myth 2. Copyright is free market capitalism at work

Khanna next writes:

Copyright violates nearly every tenet of laissez faire capitalism. Under the current system of copyright, producers of content are entitled to a guaranteed, government instituted, government subsidized content-monopoly

These two sentences are packed with so many misconceptions that I want to address them each one by one.

First, copyright has historically been treated like property — not a government subsidy.

Thomas Paine said in 1782, “in all countries where literature is protected, and it never can flourish where it is not, the works of an author are his legal property.”

At the birth of the United States, copyright was couched in terms of property more often that not. In Copyright and Incomplete Historiographies: Of Piracy, Propertization, and Thomas Jefferson, Justin Hughes traces the “robust history of copyright being referred to as ‘property.'” ⁸79 Southern California Law Review 993, 1004 (2006). Most frequently, those involved in the creation and maintenance of copyright law have cited to the work of John Locke and his labor theory of property to justify copyright — a view that remains viable to this day.

Eaton Drone’s 1879 treatise on copyright, considered “the most extensive and comprehensive published on the topic in the United States in the nineteenth century” and the dominant treatise for decades, also embraced the view of copyright as property in Lockean terms. More importantly, it noted, in stark terms, that “To preserve the sanctity of property has ever been a chief function of government. Next to protecting the lives and liberties of the people, it is the highest.”

Not only is the security of property a chief function of government, but its protection is inextricably linked to the advancement of life and liberty. Even today, this important role of property in free capitalist societies continues to be expressed:

States which did not guarantee property and contract did not flourish economically compared to states that did. . . Property and contract law have indeed been foundational to enabling capitalism to take off. . . The emergence of well defined, secure property rights was a part of a much broader historical process in which absolute monarchies and their legitimating political philosophies lost their institutional dominance to be replaced by the institution of the modern state and secular political philosophies that recognized the rights of individuals within and against the state. . . The idea of a natural right of property was one crucial premise in John Locke’s rejection of the absolute authority of Kings. ⁹Dr. Peter Drahos, The Universality of Intellectual Property Rights: Origins and Developments.

Like property in general, copyright — the recognition of the rights of creators — has contributed to free society. Former Register of Copyrights Barbara Ringer wrote in 1974, “It is striking that the second and third copyright statutes in the world — those of the United States of America and of France — were adopted immediately following the revolutions in those countries that overthrew autocratic government and were based on ideals of personal liberty and individual freedom.” She adds:

Freedom of speech and freedom of the press are meaningless unless authors are able to create independently from control by anyone, and to find a way to put their works before the public. Economic advantage and the shibboleth of “convenience” distort the copyright law into a weapon against authors. Anyone who cares about freedom and authorship must insure that, in the process of improving the efficiency of our law, we do not throw it all the way back to its repressive origins in the Middle Ages.

Far from the government instituted regulation that Khanna suggests in his policy brief, copyright is no more and no less like any other free market system. ¹⁰See also Testimony of Irwin Karp: “the instrument chosen by the Constitution to serve the public interest, i.e., the securing of literary and scientific works of lasting value — is an independent, entrepreneurial property-rights system of writing and publishing”; David Householder, The Progress of Knowledge: A Reexamination of the Fundamental Principles of American Copyright Law, 14 Loy. L.A. Ent. L. Rev. 1, 35 (1993): the Copyright Clause “assumes that promoting the progress of knowledge is advantageous and directs Congress to achieve this benefit by securing exclusive rights in intellectual property. It mandates the creation of a marketplace, wherein this unique form of property, the copyright, may be traded and protected.”

In fact, the Constitutional Convention delegates explicitly rejected proposals that would give the federal government a more active role in promoting the progress of the sciences and useful arts — for example, the establishment of a national university or provisions for premiums and rewards to inventors and authors. ¹¹The Records of the Federal Convention of 1787, Vol. 2, August 18, 1787, ed. Max Farrand (New Haven: Yale University Press, 1911). The delegates tossed these aside for the hands-off approach embodied in the Copyright Clause, which would establish a functioning market for expression. This suggests that the delegates thought the pursuit of self-interest would best serve to promote the public interest — as James Madison said of the Clause in the Federalist Papers, “The public good fully coincides. . . with the claims of individuals.”

Some might argue that the promotion of the public interest through the pursuit of self-interest is one of the cornerstones of capitalism. ¹²Some might also argue that “to oppose copyright is to oppose capitalism.”

Much along the same lines, Khanna’s characterization of copyright as “government-subsidized” is completely erroneous. The government offers nothing to creators except a functioning market to pursue their own ends. Khanna’s suggestion that because copyright holders can pursue civil and criminal remedies for infringement acts as a subsidy is bizarre. That would make all property a government subsidy — contracts too, since contractual parties can turn to courts in the event of a breach. Khanna asserts that because the statutory damages are “massive”, this creates a subsidy. While I think it’s completely appropriate to debate whether copyright remedies are fair and effective, for purposes of this myth, it’s enough to point out that the nature of the remedies does not transform a copyright into a government subsidy.

Second, Khanna describes copyright as a “content-monopoly.”

There is perhaps no more elementary and persistent error in the history of copyright then the claim that it is a monopoly. ¹³This phrase comes from Edmund W. Kitch, Elementary and Persistent Errors in the Economic Analysis of Intellectual Property, 53 Vand. L. Rev. 1727 (2000). And, just as persistently, it has been debunked.

As in the entry for “monopolies” in an 1839 encyclopedia, which states, “Copyright and patents are now generally placed among monopolies by legal writers, but not correctly.” ¹⁴The Penny Cyclopedia of the Society for the Diffusion of Useful Knowledge, Vol. 15, pg 341 (C. Knight, London, 1839). A treatise on literary property written around the same time says:

[The author’s] case is precisely the same as that of the maker of houses, who cannot get a monopoly rent, because other men make more houses, as soon as he demands too much. So, when an author who has produced a book for which the demand is great, is unwise enough to ask too high a price, another author, (perhaps greater than he,) will write another book on the same subject, and thus demolish his ideal monopoly. ¹⁵Philip H. Nicklin, Remarks on Literary Property (Phila. 1838).

An 1896 book on copyright goes into more detail, noting that such “monopoly language” is based more on rhetoric than reality:

It is sometimes attempted to stigmatize copyright as monopoly, and writers of loose and careless habit sometimes speak of copyright as monopoly. It is no more monopoly than is the ordinary ownership of a horse or a piece of land. Blackstone says that a monopoly is—

A license or privilege . . . whereby the subject in general is restrained from that liberty of manufacturing or trading which he had before.

The law dictionaries define it in the same way. A monopoly takes away from the public the enjoyment of something which the public before possessed. Neither copyright nor patent does this, for neither can be applied to anything which is not new; neither can be applied to anything which the public before possessed. The author and inventor must produce something new in order to be entitled to copyright or patent. ¹⁶The Question of Copyright, pg. 86 (GP Putnam, 1896).

There are many other examples from more recent decades. ¹⁷See, for example, RR Bowker, Copyright, Its History and Its Law, pg 50 (Houghton Mifflin 1912), “Copyright is a monopoly only in the sense that any ownership is a monopoly”; Karp, Id.,

The copyright in a book is not a “monopoly” in the antitrust sense. It does not give the author control over the market in books, or the business of publishing them. His book must compete in the market place with the 40,000 other titles published that year and the hundreds of thousands still in print from prior years, including many that deal with the same subject. His copyright only gives him certain rights to use the book he created. The owner of a copyright only has a “monopoly” in the innocuous sense that all property owners do — each owns a collection of rights, granted by law, to use that which he has created, purchased or inherited.

Householder, Id.,

It is like saying the owner of the lot on the northwest comer of Elm and First Streets controls, and is able to exclude competitors from the market for, property on the northwest comer of Elm and First Streets. That owner’s right is a property right; calling it a monopoly adds nothing to an understanding of the owner’s rights. Such usage merely serves to make the meaning of the term “monopoly” less precise and therefore less useful.

Finally, as the Supreme Court said in one of its more recent copyright cases, “copyright gives the holder no monopoly on any knowledge. A reader of an author’s writing may make full use of any fact or idea she acquires from her reading.” ¹⁸Eldred v Ashcroft, 537 US 186, 217 (2003).

Final Notes

Next time, I’ll dive into the remaining pages of Derek Khanna’s policy brief, but, in my opinion it has so far not gotten off to a great start.

Parker Higgins of the EFF said of the paper that Congress shouldn’t debate copyright in a reality-free zone. I agree. But we should concentrate on actual reality, not the alternative reality that Khanna and some other copyright skeptics have constructed over the past few years. No doubt there are areas of copyright law that need improving. And certainly there’s no argument that some who favor the continuing vitality of creators’ rights at times use unhelpful rhetoric. But Khanna’s brief is Exhibit A in what not to do. A fair, just, and equitable marketplace for creative expression deserves better.

Read Republican Study Committee Policy Brief on Copyright: Part 2