Internet Copyright Laws
With Richard A. Epstein
Professor of Law, University of Chicago Law School
Thursday, Feb. 21, 2002; 11 a.m. EST

"The Supreme Court announced yesterday that it will review whether Congress has unlimited power to determine how long artistic work is protected by copyright, a decision that could influence the availability of content on the Internet and affect billions of dollars collected by movie studios, record companies and publishers." Read the full story High Court to Hear Case on Copyright (Post, Feb. 20, 2002).

Richard A. Epstein, professor of law at University of Chicago Law School, comes online Thursday, Feb. 21 at 11 a.m. EST to discuss the Supreme Court's intervention on copyright laws and how the results would affect content available on the Internet.

Epstein has written extensively in many legal areas. Since 1991, he has been an editor of the Journal of Law & Economics. Some of his books include: "Principles for a Free Society: Reconciling Individual Liberty with the Common Good (1998)," "Simple Rules for a Complex World (1995)," and "Takings: Private Property and the Power of Eminent Domain (1985)." He is also the editor of Cases and Materials in the Law of Torts (7th ed.) and has written a one-volume treatise, Torts (1999). He has written many scholarly articles on a broad range of common law, constitutional, economic, historical, and philosophical subjects. Among the subjects that he has taught are contracts, property, torts, and criminal law and conflicts of law.

A transcript follows.

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Richard A. Epstein: It came as quite a surprise that the Supreme Court took a case that most people thought was going to die in the Circuit Court. But the issues involved with the Copyright Term Extension Act are exceedingly important in defining the relationship between private property and what might be called the intellectual commons for copyright. Here my own wish is that the CTEA will be struck down as an impermissible giveaway of public resources to private individuals. The impulse behind that result is that property which would normally make its way into the public domain should not be kept out of it by the original creators unless some good reason can be shown for that result. In this case that cannot be done. All the incentives to create the work were created by the original grant of the monopoly. In this case nothing is received in return. It is important to realize that private monopolies can be created for good reasons, but that this is not one of those occasions.

Reaching this result will not be easy in this case. The idea that public property has been given away for private use strikes a powerful chord here, as it does in corporate law, but the case itself is concerned largely with the construction of the basic copyright provisions on such issues as what it means to have a limited term, what progress means and the like It will be a technical argument that will obscure the larger issues involved.

Arlington, Va.: Assuming the Supreme Court grants Congress unlimited power to determine length of copyright, what, if any, changes will take place in terms of the government's ability to enforce these laws given the decentralized nature of many of the programs and applications utilized to freely obtain copyrighted material?

Richard A. Epstein: These two issues work at cross purposes with each other. The question of enforcement presupposes that the copyright is valid, and theproblem of their enforcement takes place whether the copyright is one day old or 50 years old. Private holders will have strong incentives to enforce in both cases. The hard question is to make sure that these mechanisms do work once the validity of the copyright is settled.

Washington, D.C.: The U.S. government to date has displayed a relatively hands-off approach to the Internet. Furthermore, little hard evidence exists that the programs such as Napster and Gnutella have resulted in a reduction to the bottom lines of major media companies. Do you feel that extension of copyrights offers undue protection of the already highly influential, highly concentrated media conglomerates?

Richard A. Epstein: The hands off approach to the internet has generally been a good thing. What one wants to have is a common highway for easy access to private sites which can then determine whether to sell or to post their wares for free use and consumption. But the copying that has taken place through Naptster was adjudged, rightly in my view, to constitute an infringement. It is very hard to chase after the individual users, but much easier to get the one source, Napster, that facilitates these transactions as a contributory infringer. Which is what has been done. The size of the bottom line is never the issue in these cases. One cannot steal or use land, make a profit, and then claim that the owner was not hurt. The opportunity has been lost and generally the profits have to be returned. The same regime should apply to copyright. The real question is whether the right configuration of property rights was created in the first instance. Yes in most cases. No with the CTEA. But if it is upheld, then the extensions granted are as good as any initial claim.

Brookeville, Md.: Isn't the entire concept of copyrights and patents completely perverted in the 21st century?

Large copyright holders have advanced a fairly radical idea: the concept that a copyright confers ownership. Its my understanding copyrights are a limited license provided by the government to ensure that authors enjoy a limited monopoly of distribution. Copyright doesn't confer ownership anymore than a drivers license confers a right to drive. The ultimate aim of copyright isn't to aid authors, but is a bargain struck between copyright holders and the public.

To cut to the heart of the matter, when copyrights are used as a means for large media companies to club technologies they don't like into submission, it appears to me that copyrights are no longer serving the public insterst. Isn't it time for congress to completely revist how and why copyrights are granted?

I find it fascinating that if I loan a CD to my friend, I'm considered a "thief," yet if I loan him my book its OK. I don't see the difference, yet the RIAA has managed to create a very artificial distinction that when I share something with my friends, I'm stealing.

Finally, something to consider. If libraries did not exist (a stretch, I'll admit), and I proposed an organization that for free would allow me to borrow books and read them without paying the copyright holder, do you think I'd be accused of being someone promoting theft?

P.S. Can we drop the notion of "Intellectual Property?" It's a complete oxymoron.

Richard A. Epstein: Well, I can't cover it all, but here is some start.

Copyright and patents are not perverted ideas in this century. The old tradeoffs between creation and dissemination still remain. There may need to be some jiggering of the length of protection and the scope of patents, but that has been true across time, and not just today.

The constitution confers the exclusive right for limited times to holders of copy rights and patents. That sound very much like an ownership interest to me, which in turn allows the holder of the patent or copyright to issue licenses for others to use, which may be exclusive or nonexclusive, and subject to all sorts of contractual restrictions. There is a debate as to whether these restrictions should be allowed to run with the copy sold, which is generally restricted under the first sale doctrine, so take your money early and run. And lending a CD does not create a violation, because it is not a copy. The rules for books and CDs are in this respect similar. The problem with the virtual library is that it does more than allow a single copy to circulate. It creates lots of separate copies. Finally, I would beware of the turn "clubbing" which carries a lot of heat, but not necessarily light. Sometimes the companies do have rights that are violated. It is tempting to say that they should get nothing for an additional use because its marginal cost is zero. But that is true of the first use as well, at which point nothing is left to cover the costs of innovation for successful products, and, of course, the costs of the projects that never make it in the marketplace at all.

Harrisburg, Pa.: How successfully can we prevent copywritten materials being placed on the Internet? What is to prevent websites in jurisdictions beyond our legal reach from placing materials on their website for all to download for free or at lower costs? Is it possible to create national blocking of sites, and, if so, who and how should decisions be made as to which sites should be blocked?

Richard A. Epstein: The pronoun "we" conceals lots of difficulties. It is very hard to track down individual users who place things up anonymously, but it is much easier to find ways to attack the hub of the operation and shut it down. Overseas sights are often difficult to block, but local distributors, if any, can be chased down. Clearly some form of cooperation is needed in these cross border cases. Generally, I would be uneasy about having the state block sites without some real determination of infringement, which usually requires private suits. but the threat of successful action should deter much piracy.

Mitchellville, Md.: If the Supreme Court rules that the constitutional authority does not permit such extensions, do you believe the ruling could have an impact on private efforts to extend copyright protection, such as, for example, using technology to lock up access to works forever, or using technology to prevent people from being able to effectively sell or give away their legal copies (because the new owner would have to pay another fee to gain access), or "timing out" legal copies to, in effect, gain a right to control private performances?

Richard A. Epstein: This is a tough problem in some cases. A museum could for example deny access to the building to anyone who wants to photograph an object that is in the public domain. But the mere fact that powerful interstes (e.g. Disney or the Gershwin estate) worked so hard to get the CTEA shows that the self-help methods won't work for lots of things. Music is always known to the publi, and so too Donald Duck. Once these go into the public domain for good, then there will be no private methods to protect them to their once and former owners. Other cases may have this quality. But note that trade secrets (if you don't seek other forms of IP protection last indefinitely, subject to indepedend discovery or reverse engineering.

Arlington, Va.: What is the argument for protecting the property rights of the music distribution industry in the face of the overwhelming public good of free distribution of music?

Richard A. Epstein: This is another way of asking the question of incentives versus free distribution. If you want to keep the stock of music constant, offer no protection to new songs. but if you wish to see them created, then you have to protect. The public good requires both of these elements to be taken into account, which is why we reached the compromise of limited terms. What has happened is that the period of protection has become too long with time, which is much more critical with artistic creations than technical ones, where the periods are shorter under patent law and the devices are often supplanted in the marketplace before the patent expires.

Falls Church, Va.: Who were the biggest corporate backers of CTEA? I heard that Disney was the No. 1 beneficiary.

Richard A. Epstein: Your hear correctly, at least if you heard from the same sources that I did.

Silver Spring, Md.: Just curious: What, if anything, did the original text of the Constitution say about copyrights? And what were the original U.S. laws pertaining to this area?

Richard A. Epstein: The original text in fullgives the Power to congress "To promote the progress of science and useful arts by securing for limited times to authors and investors the exclusive right to their respective discoveries." That's it. The initial system was put into place very quickly, with relatively short terms for copyrights, which have been extended over time. The patent system has been more stable in its time configuration. One question with the CTEA is whether it falls within the power of Congress to regulate given that the freebie does not promote "progress" in the industry. the counterargument is that progress is for Congress not the courts to determine. So if we have a low standard, called "rational basis: reiew, then the government will win and the CTEA will be upheld. The dissent in Eldred argued that a tougher look was required, and turned to the recent commerce clause decisions to indicate that some limits could be placed on commerce.

Roseburg, Ore.: RE: copyright, public domain, and government websites -- I have worked with some federal government employees who have posted (with permission) materials (writing and/or photos) online with a notice that the material is copyrighted. I've also heard from employees that a photo without such notice WAS copyrighted and not available for other use, even after they had posted it to a federal website. It's my opinion that anything posted on a federal website is public domain period, and that federal webmanagers should link to copyright-protected material rather than posting it (with or without permission and with or without a notice) on a federal site. What say you?

Richard A. Epstein: I would not say that posting it on the federal website makes it in the public domain, because that would allow a single government official to negate the system. The government can condemn with compensation, but why bother here when all is available for a fee from the owner. The correct practice is to get permission or to supply the link so that the holder of the copyright retains control over its use.

New York, N.Y.: You say Napster is a contributory infringer. If that is the case, what is the difference as you see it between Napster and a VCR, which the Sony case held was not a contributory infringer? Napster, as I see it, had a substantial non-infringing use, that is, to trade non-protected files.

Richard A. Epstein: the decision in the Napster case had a hard time dealing with the Betamax situation. In the end there is surely a hard question of degree about the mix between copyrighted and noncopyrighted material that goes over the system. There is also another difference. So long as the commercials are taped (and sometimes to my amazement watched) the increased dissemination on Beta does not hurt the original producer. Here there is no indirect benefit from the copying. But the joint use creates serious problems. No doubt that Napster could start up again if it were limited to public domain or licensed materials.

Winter Park, Fla.: Your guess of how the court will decide and why? What are the good and bad effects of deciding the case either way?

Richard A. Epstein: My guess is that the government will win a case that it ought to lose. The level of deference is pretty high in these matters, and there are earlier issues of extensions that were pretty outrageous, but which were approved by the Supreme Court. I wish that the public giveaway issue were in the case explicitly, but the public trust doctrine, which would be implicated has only shadowy authorization in the Constitution, so the atmospherics of the political intrigue have to be worked in by indirection. The more the court thinks tha thte process that led to the act stunk, themore likely it is that the CTEA will be struck down. If that happens it should be a narrow opinion that does not prevent Congress from making its usual countless adjustments to the overall process.

Washington, D.C.: Professor -

While I would agree that from a policy standpoint stretching the term of copyright to 70 years after death is a bad idea I'm not sure that the Court is going to accept an argument that this runs afoul of the Constitutions grant to Congress to extend rights for a limited time. After all 70 years is still a "limited" time.

The real problem I have with CETA is that Congress has the ability to grant rights in ownership for a limited time to advance innovation. I don't see how grandfathering in works that had already been created but whose term has not expired can in any rational way be said to create incentives for creation of those works.

Why don't I see this brought up anywhere? What am I missing?

Richard A. Epstein: You're not missing anything about the tradeoff. I wrote to this effect in the Wall Street Journal when the Act was passed in 1998. Others have said the same thing. But again, the word limited time has no precise end point as you have noted, and this creates genuine difficulties becuase it allows for perpetual extensions, each done independently on an ad hoc basis. It would have been so much clearer if the Congress had picked a term, but it would have been a mistake to use the same term for patents and copyrights, and hence the resort to constitutional language that articulates a principle that it does not render operational.

Alexandria, Va.: Is it possible for the Supreme Court to strike down the CTEA without overturning Chief Justice Marshall's earlier decision on this issue? If not, how should stare decisis considerations play in the justices' decision?

Richard A. Epstein: The case you refer to is the Evans decision from 1810 or so. It was a pretty ugly business in which a single patent that was expired was reinstated after it lapsed and then enforced against subsequent sales made by someone who started with the same device during the interim period. Bad facts make worse law. Sustsaining that makes this case hard to challenge, unless we change the standard of review upward to some kind of serious scrutiny that looks at the actions of Congress in light of the purposes of the clause.

Chambesburg, Pa.: why do u say that the notion of intellectual property a complete oxyemoron? Can you expatiate further on that subject in relation to the Supreme Court Case.

Richard A. Epstein: Did I say that it was an oxymoron? It strikes me as a useful term to cover rights in intenagibles. the field is very diverse with copyright, patent, trademarks, trade secrets, and rights of publicity, and they all follow somewhat different rules. but as a useful first cut into the field, it seems fine and some other term would have to be invented (but not copyrighted) if this one were knocked out.

Vienna, Va.: Using your own citing of the Constitutional clause that gives this power to Congress and Congress only, it would seem that the Supreme Court here, besides not only not being included in the regulation process, would not even have the power to hear arguements on this case....without a Constitutional amendment. Congress here may have the power to block a Supreme Court hearing on this matter.

Richard A. Epstein: No. Our constitution has judicial review to see whether or not Congress has exceeded its limited and enumerated powerse.

Woodbridge, Va.: Might this review affect the traditional public library? How about public library electronic resources, such as online databases (which have been affected recently by the Tasini case)?

Richard A. Epstein: I don't think that this case will have much effect on libraries as such no matter which way it comes out. These are institutions with high public accountability and will only do what they can do within the law, whether they deal with printed or on line materials. Of course if the CTEA is struck down then more stuff comes into the public domain and they can make more effective utilization of what it is that they have. But compliance with them is not a serious issue.

Arlington, Va.: Isn't there a global Internet copyright treaty under discussion by the WTO or U.N.?

Richard A. Epstein: I do not know the particulars on these negotiations, but it seems clear that the subject is one that is per force under perpetual negotiation. It is clear that all IP goes across the globe in a twinkling and that some international coordination is needed. American IP lawyers know as much about TRIPS (trade related intellectual property) in the international arena as about the domestic stuff because they work in both markets simultaneously. And harmonization is a big issue with all IP laws. One argument for the CTEA was harmonization with the EU law. They would only protect our property in their markets for the length that we protected it in ours. So we get the longer foreign monopoly with CTEA. There is kind of a Prisoner's dilemma game here. All consumers and producers may be better off with a shorter term, but they cannot sit down at one table to get it. The WTO is quite protective, and sometimes it can be too much so. But in other instances property rights come out on the short end. There is no easy presumption in this area to say what should and should not be protected. It takes time to sort through the issues one by one to get them right. Monopolies are dangerous; monopolies are necessary. There is no way to duck the question.

Bethesda, Md.: Okay, so the scummy RIAA was able to kill Napster because they kept all the files on their servers. How will they make a case against the folks at Musiccity, which doesn't store the actual files? All they do is provide a lookup tool. So how can you argue that Musiccity is violating copyright laws? They're not doing any copying or storing any copyrighted material.

Richard A. Epstein: To the extent that there is facilitation without copying, there is still potential liability, or so it could be easily argued. Enforcement may be harder as the level of decentralization is greater. And there is always the defense that the hook up was made for noninfringing purposes, but that does not look too strong here. You really don't like those guys, even if you love their music!

Alexandria, Va.: I read yesterday that the period for Napster and the record labels to reach some sort of settlement has expired. What's likely to come out of the Napster saga, esp. given that Napster is no longer what it once was.

Richard A. Epstein: It takes someone a good deal closer to the industry than I to figure out what will happen. Truth is that the easy dissemination could work to the advantage of all if some easy payment system is created as with ASCAP. Perhaps the case will be altered in some way, but the overall industry wide search for a better blend between production and distribution will continue no matter what goes on. The gains from trade are huge if this can be accomplished. So let's look for more fevered, confused, and sometimes secret negotiations.

Washington, D.C.: I am glad that the Supreme Court is hearing this case, as I think that the duration of copyrights is really pretty ridiculous and unduly burdensome on the public, especially as regards out of print written materials. However, I'm afraid I don't understand precisely on what grounds the court might decide that Congress does not have the power to determine copyright's duration. It seems to me almost that doing so would be usurping the legislative branch's power to legislate. Can you outline the legal argument in support of limiting Congress's power in this area? Does the Constitution say anything about copyrights? Thanks.

Richard A. Epstein: I have mentioned these before: is progress promoted under the clause; can perpetual renewal be for a limited time.and, does the first amendment intrude in this case. This last point needs a bit of clarification because the law generally says that you can protect expression but not the ideas that are expressed. So if I write an account of the Boer War others can read my work and write their own account, but they cannot copy my language. No one gets a monopoly in ideas or in past events, only their take on it, narrowly conceived. That said, the first amendment law on freedom of speech defines freedom in a way that respects property rights that are created, so that the two systems are said, almost by definition, not to be in conflict with each other. Here the argument has to be that the CTEA took back a future public domain object so that it limits the use of forms of expression that should be left unprotected. It is novel going on this theory. I prefer the simple approach that state giveaways of future public domain property should not be allowed. That leaves Congress with the power to extend copyright protectioin to induce new production.

Oakton, Va.: Vienna has a good point here about Congress maybe having the power to block judicial review on this matter. The Supreme Court does indeed have judicial review powers, but only within the limits of its constitutional power - the constitution here may not allow a Court ruling on this issue. This is going to be a VERY, VERY interesting situation here. The Court may try to hold a hearing on this case only to have it nullified by Congress....and the Justices may find themselves in Contempt of Congress
if they do not cease. Yes, indeed, this could really be interesting. My guess, though, is that some compromise will be reached, as it usually is.

Richard A. Epstein: Let's not get carried away. There have been no successful efforts to cut out judicial review of legislation, and this is not the case that will give rise to a controversy over whether this should or should nto be allowed under the somewhat difficult language of Article III, defining the judicial power. Lots of statutes have been sustained, lots struck down before; no one wants to fight the ultimate battle over separation of pwoers on this case.

Bethesda, Md.: You're right, professor, I do like the material -- and the artists, not the sleazeballs at the RIAA produce that.

But going back to the Musiccity issue. If you say that they facilitate the illegal distribution of copyrighted material, couldn't that be said about the US Postal Service as well? I mean, after all, if someone copies a CD, and mails it to their friends, the USPS is the tool of distribution. Or if I copy a single track of a CD and send it by e-mail, by that logic, they could say that both my ISP and my friend's ISP are liable because copyrighted material travelled from my account to his account?

Where does it end?

Richard A. Epstein: Long before these cases. The post office is a common carrier and takes all that is sent. It does not know the content and we don't want it to find out. If there is to be an injunction on the use of the mails for illegal activity someone has to come forward to identify why it should be stopped and perhaps get a judicial order. The electric compnay is not guilty of copyright infringement even if it knows that someone somewhere will use power to run Napster.

Minneapolis, Minn.: Article I: "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..."
Clearly, extending the duration of copyrighted works ex post is inconsistent with the framers' utilitarian justification of providing exclusive rights (as opposed to a Lockean labor-desert theory); if a work has already been created there is no need to further promote its creation through term extension. However, the term "limited" must have some meaning, and as copyright duration extends once again, this time to life + 70 years, do you believe that the 1998 Act has deviated from the plain meaning of "limited" and the intent of the framers? Specifically, can you generate a normative approach for determining what "limited times" ought to entail and could an analysis of how existing copyright incentives affect the creation of artistic expression assist this determination?

Richard A. Epstein: The framers certainly thought that way, but I don't think that they were anti Lockean as such because the labor theory of value points the same way. Here you cannot keep physical possession of all that you have created and thus need legal protection to make sure that you can reap what you have sown. This is an important element in the intellectual history as Adam Mossoff has shown in a recent piece in the Hastings Law Journal, which addresses this point. But for the CTEA the generic justification for copyright still does not require that one be paid twice for the same work, which is what the Act does.

Richard A. Epstein: Well, I see that my time on line has ended, and it back to the rest of the busy day. It is clear that IP is here with us to stay and that the difficulty of defining the boundary lines will be with us in all sorts of areas. Lunchtime will bring me to a panmel discussion on gene patenting, where again the issues are complex and murky because the implicit tradeoffs are so unclear and the stakes so large. But get used to it. IP is always that way, and will become more so with the higher rate of innovation leading to greater market values. But remember we are all better off having some innovation to fight over. What is truly frightening is the though of stagnation, either in industry or discussion.

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