On March 27, Microsoft’s Innovation & Policy Center hosted a discussion focused on whether current copyright law properly balances the dual goals of the Constitution’s IP clause to incentivize creation and to properly protect authors’ works. And, how that balance has and will continue to benefit consumers. Overall, the panelists agreed that the Copyright Act has been successful in striking this balance, as evidenced by the great wave of new distribution technologies and business models that have emerged over the past few decades and the corresponding continued production of quality content by authors. However, panelists noted that this healthy environment could only continue to thrive if copyright is understood and respected by all parties in the copyright ecosystem.
Microsoft’s Tom Rubin, Chief IP Strategy Counsel, moderated a panel that included Joe Keeley, Majority Chief Counsel, Courts, Intellectual Property and the Internet House Judiciary Subcommittee; Shira Perlmutter, Chief Policy Officer and Director for International Affairs at USPTO; Troy Dow, VP and Counsel, Government Relations and IP Legal Policy and Strategy at The Walt Disney Company; Mitch Glazier, Senior Executive VP of the Recording Industry Association of America; and Sherwin Siy, VP of Legal Affairs at Public Knowledge.
The discussion began by reviewing the status of the comprehensive Copyright Act review announced by the Senate last spring, which is currently underway. Mr. Keeley emphasized throughout the discussion that the review of the law must be holistic and forward thinking, given the technological convergence and rapid innovation characterizing the copyright sector today.
Next, Shira Perlmutter discussed the multi-stakeholder reform process the Copyright Office initiated last year. The process began with a green paper released last July, which considered issues arising due to new digital technologies, and whether existing rights and exceptions are capable of addressing such issues. In areas where the law and marketplace practices seem mismatched, the paper considered whether legislative or other reforms would be necessary to promote continued development of the digital marketplace. Ms. Perlmutter emphasized the importance of non-legislative reforms to confront certain issues, including the DMCA’s notice and takedown procedure, and to address this issue she proposed a multi-stakeholder approach. Ms. Perlmutter stated the goal of this process would be a code of conduct or voluntary industry ‘best practices’ agreement.
Then, representatives from the software, video and television, and music industries discussed how copyright law and policy can both benefit consumers and enable innovations that promote access to works. Victoria Espinel noted that perhaps the most important, and exciting, development that software has enabled is the change in how consumers interact with content. Today software allows anyone with a phone or computer to be a copyright creator. Troy Dow stated that these and other innovations have benefited consumers by meeting their rapidly changing demands to be creators, or to access content anywhere, anytime. He noted that keeping pace with consumer demands by making content available on a well-timed, well-priced basis is the best way to disincentivize and prevent piracy. Mr. Dow also observed that copyright protection allows creators to take the required risks to find out what content consumers want, since more than half of all businesses, artists, or other ventures fail.
Mitch Glazier provided an especially interesting perspective, given the drastic and constant changes the music industry has confronted over the past 40 years. Mr. Glazier stated that copyright should get more credit for being the fundamental foundation for innovation. He explained how content drives the sale for technologies and devices, and that without copyright protection, patents would not be as important. He emphasized that copyright is often viewed as an inhibitor, but in fact, copyright enables creators to make compelling content by balancing incentives with protections.
Sherman Siy advanced an alternate view of copyright, arguing that the exceptions and gaps in copyright law, rather than the protections, are what incentivize innovative uses of content and technological developments. However, representatives from the software, movie and television, and music sectors seemed to agree that copyright protections and the exclusive rights granted to authors of works are what have enabled the risk-taking and innovation in copyright-driven industries.
Victoria Espinel in particular made an important observation. She found that there is a view that copyright has not kept up with the times, and the public’s perception of copyright has deteriorated. She explained that changes in technology and consumer behavior and the trend toward digital disintermediation have enabled consumers to be creators. As creators, consumers must understand law, whereas in the past institutional actors like record labels or movie studios were the only parties who really had to understand the law and its implications.
Ms. Perlmutter advocated the importance of educating the public and promoting awareness of copyright law and its benefits. She and Ms. Espinel agreed that consumers have a real role to play in determining how to reform copyright law and policy. Ms. Espinel emphasized the importance of garnering respect for copyright from consumers and institutional actors alike. Although the copyright marketplace is currently characterized by constant and rapid changes in technology, business models, and consumer behavior, copyright protection is still utterly relevant and important to the continued development of this vibrant sector and to maintaining the proper balance of promoting creation and protecting authors’ rights.
Free State Foundation scholars agree that retaining a strong IP system will provide incentives for creation of both content and distribution platforms and technologies, which is why we are in the process of publishing an ongoing series of papers exploring foundational principles of intellectual property. The five papers in this "Perspectives from FSF Scholars" series published to date are listed below:
No. 1: The Constitutional Foundations of Intellectual Property, by Free State Foundation President Randolph J. May and Research Fellow Seth L. Cooper
No. 2: Reasserting the Property Rights Source of IP, by Free State Foundation President Randolph J. May and Research Fellow Seth L. Cooper
No. 3: Literary Property: Copyright's Constitutional History and Its Meaning for Today, by Free State Foundation President Randolph J. May and Research Fellow Seth L. Cooper
No. 4: The Constitution's Approach to Copyright: Anti-Monopoly, Pro-Intellectual Property Rights, by Randolph J. May and Seth L. Cooper
No. 5: The "Reason and Nature" of Intellectual Property: Copyright and Patent in The Federalist Papers