January 17, 2003

0.2% for the Mouse!

When Congress passed the Sonny Bono Copyright Term Extension Act, the event was obscure enough that even people in the movie business were hardly aware. Now that the Supreme Court has upheld the constitutionality of the law, the act is gaining some attention. While the Bono Act is likely to have little economic impact on the movie business, or entertainment generally -- most 75 year-old intellectual property just isn't that valuable -- it does shed light on how obscure acts are passed into law without real debate.

The law was passed without a squeak largely at the behest of Walt Disney, which was concerned that early Mickey Mouse cartoons would fall into the public domain 75 years after their creation. The act tacked 20 years onto existing copyrights. The court, not surprisingly, said Congress was within its prerogative as 95 years is still a "limited time" -- the only constitutional language limiting the legislature's power. If Congress believes long-dead artists can be retroactively incentivized to create, that's OK.

Disney was pleased with the ruling. But it's not clear what economic benefit the Mouse house gets as Mickey is protected by trademark laws as well as copyright. Perhaps more valuable are works by Hemingway or Fitzgerald or Gershwin. But if Disney wants to make a movie of "The Sun Also Rises," the cost of the rights would be a trivial portion of their investment.

In his dissent, Justice Stephen Breyer offered an economic argument that copyright holders achieve 99.8% of all possible benefit under the old law compared to what they'd gain from a perpetual copyright. If that's correct -- few would put the number at any less than 99% -- the act was a fight over 0.2%. For Justice Breyer, giving the trivial worth of the extra 20 years was proof that the act could not "rationally be understood to advance a constitutionally legitimate interest." But for Disney, 0.2% may be worth some lobbying. It wouldn't take much because there's no natural opposition. The owners of works in the public domain -- that is, everyone -- don't even know who they are. In a footnote, Justice Ruth Bader Ginsburg offered a half-hearted defense of the law by noting that Congress heard testimony from Bob Dylan and Carlos Santana. These rock icons offered their pleas in 1995, when the issue was completely off the radar.

Even eccentrics like Eric Eldred, who ultimately challenged the law, were not heard from in 1998. Many believe -- including some conservative jurists like Richard Posner -- that too many intellectual property rights are clogging the system and actually impeding progress.

Supreme Court decisions are often trivial in themselves or in money terms, but they are said to involve important principles. The case of Eldred v. Ashcroft is no different. But the main principle involved isn't anything to do with copyright. It's about how laws are passed with opposition absent until it is way too late.

Mr. Ackman is a screenwriter and lawyer.