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Copyrights -- or Mothballs?

By Heather Green When the Supreme Court announced on Feb. 18 that it planned to hear a landmark suit contesting the expansion of copyright terms, few were more surprised than the lawyers who filed the case. The court's interest in the copyright and the public-domain issue, though, reflects the broader debate that's raging right now over innovation and digital publishing.

Publishers are justifiably worried about how the Internet will hurt their businesses. While the Net is drives much innovation in publishing, the risks it also represents for established companies are huge. In response to that threat, music, movie, and book publishers and distributors have expanded and extended their control over copyright through technology, legislation, and standards during the past four years (see BW Online, 3/4/02, "Entertainment Exces, Fear Not the Net").

But in the rush to protect the established publishing industries, two avenues that were crafted specifically to allow innovation to thrive within the legal structure of copyrights are being closed down. For innovation to bloom in digital publishing, something has to give.

OUT OF BALANCE. Works need some kind of protection to encourage authors to publish. Limited copyright protection makes that possible by providing a balance. It enables the author to make money and/or gain recognition from her works during a period of time and then allows others to innovate and profit on the works once they fall into the public domain.

Another key aspect of this balancing act between authors and the public is the recognition that fair abridgements or uses of works, even those under copyright protection, don't necessarily infringe an author's rights. This concept is called "fair use."

This balance is established in U.S. law. The Constitution granted 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." In the Copyright Act of 1790, Congress established copyright protection for 14 years, with the ability to renew it for another 14 years.

INNOVATION AT RISK. To create a safety valve so that copyright wouldn't clash with the First Amendment's protection of free speech and to recognize fair abridgments, a fair use doctrine was established, granting individuals certain rights over how they use copyrighted material.

Now, though, that balance is being upset. The threat of the Net sent the publishing industry scrambling, and fair use and public domain are being crowded. That's putting innovation at risk.

The first side of the squeeze on innovation comes in extending the delay in allowing works to fall into the public domain. That's what's at issue in the case the Supreme Court will hear in October. Congress has extended copyright terms 11 times since 1962, compared to only twice from 1790 to 1962. A big contention of the current Supreme Court case is that lawmakers are simply turning limited copyright protection into endless protection by continually extending the terms. That trend negates the intention of the limited copyright.

PROTECTED FOREVER? The Copyright Term Extension Act of 1998 expands copyright limits by 20 years on existing and future works. That means copyright terms on works created for hire by a corporation now last 95 years, while an individual's works are protected for the author's life plus 70 years.

That simply didn't seem fair to Eric Eldred, the lead plaintiff on the Supreme Court case. Eldred had created a business publishing electronic versions of works that were in the public domain, like The Scarlet Letter. He argues that the copyright extension prevents modern works from falling into the public domain.

The other side of the squeeze play is the move to protect existing copyrights by controlling the uses that individuals and businesses make of published works. To ensure that digital versions of music and video can't be pirated, publishers lobbied Congress in 1998 to pass a computer-age copyright-protection law, called the Digital Millennium Copyright Act. The DMCA makes it illegal to circumvent copyright-protection technology, thus locking consumers into using the works according to the methods and on the devices that publishers decide.

COMMON CRIMINALS. If individuals bypass the protection technology, even for fair use, they're breaking the law. If someone breaks the copyright protection so that she can play a CD or a DVD she purchased on a device or operating system that isn't authorized by the publishing companies, she's a criminal.

The crackdown on fair use extends even further. This year, music publishers began selling copyright-protected music CDs that can't be played on computers or used to make copies of songs. Senator Fritz Hollings of South Carolina recently held hearings on a proposal to mandate that standardized digital copy-protection technology be embedded in nearly all PCs and consumer electronic devices. That standard would be developed by either industry or government (see BW Online, 2/27/02, "A New Ref for the Tinseltown-Techie Tiff").

This is the wrong approach. The government and industry shouldn't be in the business of setting standards, which could end up being anticompetitive, shutting out upstarts or preventing uses that publishers don't like. Publishers have fought other innovations in the past that they perceived to be threatening -- but that ended up creating entirely new markets for them. VCRs and cable TV were initially attacked because of copyright infringement and piracy.

DOUBLE WHAMMY. For 20 years, TV and movie producers fought cable-TV suppliers over the way they used antennas to capture commercial broadcasts that were then resold to customers. The battle went to the Supreme Court twice, and each time the court decided not to stop the practice. Congress finally stepped in, setting up a compulsory licensing-fee system on the grounds that the content owners didn't have total control over granting control over broadcast.

The current double whammy of expanding and extending copyright control leaves little room for these kinds of creative innovations. Publishers will view some innovations that seem to threaten their businesses as copyright infringement. A whole slew of companies have been sued on this basis, ranging from Napster to personal video recorder ReplayTV. Meantime, Apple Computer's iPod technology of copying and mixing digital music is in the crosshairs of the Hollings proposal.

Sometimes the publishers are wrong about what they view as copyright infringement, and sometimes they're right. But they shouldn't be able to set the ground rules. If they do, their instinct will always be to protect their established industries, no matter how the public suffers for it. Green covers the Internet and e-commerce for BusinessWeek in New York

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