Rip. Mix. Burn.

Copyright and the law

Jun 30th 2005
From The Economist print edition

Media companies are jubilant at a Supreme Court judgment, but Congress should take them on

AS USUAL, America's Supreme Court ended its annual term this week by delivering a clutch of controversial decisions. The one that caught the attention of businessmen, and plenty of music lovers, was a ruling concerning the rampant downloading of free music from the internet.

Nine elderly judges might have been forgiven for finding the entire subject somewhat baffling. In fact, their lengthy written decisions on the case betray an intense interest, as well as a great deal of knowledge. Moreover, they struck what looks like the best available balance under current laws between the claims of media firms, which are battling massive infringements of their copyrights, and tech firms, which are keen to keep the doors to innovation wide open.

This case is only the latest episode in a long-running battle between media and technology companies. In 1984, in a case involving Sony's Betamax video recorder, the Supreme Court ruled that technology firms are not liable if their users infringe copyright, provided the device is “capable of substantial non-infringing uses”. For two decades, this served as a green light for innovations. Apple's iTunes, the legal offspring of illegal internet file-sharing, is among the happy results. But lately, things have turned against the techies. In 2000, a California court shut down Napster, a distributor of peer-to-peer (P2P) file-sharing software. It had, the court decided, failed to stop copyright violations (though the firm relaunched as a legal online-music retailer).

In its ruling this week, the court unanimously took the view that two other P2P firms, Grokster and StreamCast, could be held liable if they encourage users to infringe copyrights. The vast majority of content that is swapped using their software infringes copyrights, which media firms say eats into their sales. Although the software firms argued they should not be responsible for their customers' actions, the court found that they could be sued if they actually encouraged the infringement, and said that there was evidence that they had done so. On the other hand, the court did not go as far as media firms demanded: they wanted virtually any new technology to be vulnerable to legal action if it allowed any copyright infringement at all.

Turning customers into pirates

Both the entertainment and technology industries have legitimate arguments. Media firms should be able to protect their copyrights. And without any copyright protection of digital content, they may be correct that new high quality content is likely to dry up (along with much of their business). Yet tech and electronics firms are also correct that holding back new technology, merely because it interferes with media firms' established business models, stifles innovation and is an unjustified restraint of commerce. The music industry is only now embracing online sales (and even experimenting itself with P2P) because rampant piracy has demonstrated what consumers really want, and forced these firms to respond.

The Supreme Court tried to steer a middle path between these claims, and did a reasonable job. But the outcome of the case is nevertheless unsatisfactory. That's not the court's fault. It was struggling to apply a copyright law which has grown worse than anachronistic in the digital age. That's something Congress needs to remedy.

In America, the length of copyright protection has increased enormously over the past century, from around 28 years to as much as 95 years. The same trend can be seen in other countries. In June Britain signalled that it may extend its copyright term from 50 years to around 90 years.
This makes no sense. Copyright was originally intended to encourage publication by granting publishers a temporary monopoly on works so they could earn a return on their investment. But the internet and new digital technologies have made the publication and distribution of works much easier and cheaper. Publishers should therefore need fewer, not more, property rights to protect their investment. Technology has tipped the balance in favour of the public domain.

A first, useful step would be a drastic reduction of copyright back to its original terms—14 years, renewable once. This should provide media firms plenty of chance to earn profits, and consumers plenty of opportunity to rip, mix, burn their back catalogues without breaking the law. The Supreme Court has somewhat reluctantly clipped the wings of copyright pirates; it is time for Congress to do the same to the copyright incumbents.

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