Texas A&M Journal of Property Law Volume 6 Number 1 Texas A&M CLIP Symposium on Article 3 Copyright's Excess 10-1-2020 Using the Lessons of Copyright's Excess to Analyze the Political Economy of Section 203 Termination Rights Ann Bartow University of New Hampshire School of Law, [email protected] Follow this and additional works at: https://scholarship.law.tamu.edu/journal-of-property-law Part of the Intellectual Property Law Commons Recommended Citation Ann Bartow, Using the Lessons of Copyright's Excess to Analyze the Political Economy of Section 203 Termination Rights, 6 Tex. A&M J. Prop. L. 23 (2020). Available at: https://doi.org/10.37419/JPL.V6.I1.3 This Symposia Article is brought to you for free and open access by Texas A&M Law Scholarship. It has been accepted for inclusion in Texas A&M Journal of Property Law by an authorized editor of Texas A&M Law Scholarship. For more information, please contact [email protected]. \\jciprod01\productn\T\TWR\6-1\TWR101.txt unknown Seq: 1 15-SEP-20 11:01 USING THE LESSONS OF COPYRIGHT’S EXCESS TO ANALYZE THE POLITICAL ECONOMY OF SECTION 203 TERMINATION RIGHTS By: Ann Bartow1 I. INTRODUCTION .......................................... 23 R II. THE TIME FOR OVERALL COPYRIGHT REFORM IS NIGH ................................................. 24 R III. THE CURRENT APPROACH TO TERMINATION RIGHTS DESPERATELY NEEDS REFORM ......................... 27 R IV. CAN’T STOP THE SECTION 203 TERMINATION RIGHTS: THE VICTOR WILLIS STORY ............................ 29 R V. ARE SOUND RECORDINGS WORKS FOR HIRE?.......... 31 R VI. APPLYING THE LUNNEY LENS .......................... 34 R A. The Special Case of Sound Recordings .............. 35 R VII. A COUPLE OF RECOMMENDATIONS AND A CONCLUSION ............................................ 36 R I. INTRODUCTION Glynn Lunney’s recent book Copyright’s Excess: Money and Music in the Recording Industry provides many important, even stunning in- sights about copyright law and policy, primarily from the standpoint of economic analysis. To highlight just one example of many, Lunney does an outstanding job assembling data to support a core assertion— more money does not mean more music. In fact, according to his re- search, more money empirically means less music. Consider the intro- duction to Chapter Seven, in which Lunney observes: In the previous chapters, we found that for the recording industry from 1962 through 2015, copyright’s fundamental premise did not hold. More copyright led to a sharp increase in revenues from the sale of recorded music, but more revenue did not lead to more and better music. To the contrary, it led to less. Moreover, the data reveals precisely why: as revenues increased, earnings for our top artists rose sharply; as they did, our top artists started producing fewer hit songs. Only when revenues and earnings began to fall in DOI: https://doi.org/10.37419/JPL.V6.I1.3 1. Professor of Law and Director of the Franklin Pierce Center for Intellectual Property at the University of New Hampshire School of Law. The author thanks Glynn Lunney for writing this book, Saurabh Vishnubhakat for inviting me to partici- pate in TAMU Law’s symposium on this book, and Lauri Connolly for stellar admin- istrative support and editorial assistance. This review essay is dedicated to Casey Bartow-McKenney, PhD. 23 \\jciprod01\productn\T\TWR\6-1\TWR101.txt unknown Seq: 2 15-SEP-20 11:01 24 TEX. A&M J. PROP. L. [Vol. 6 the post-file-sharing era did the productivity of our top artists begin to pick up again.2 He further claims that if musical artists retire after banking a specific amount of money, they very well may choose to work only as hard as accumulating that desired level of wealth requires. Lunney noted that if a copyright regime enabled an artist to earn that sum by recording fifty successful songs, then that artist might rationally decide to retire after recording and releasing fifty songs. If a copyright system enabled an artist to earn the desired sum of money for recording a single suc- cessful song, then that might be the only song the artist produces.3 It remains unclear whether motivating high-earning, successful art- ists to create more works (by shrinking their incomes), or motivating them to retire (by enhancing their incomes) to make room at the top for other artists is the way to increase the overall level of production of good music. The impact that current copyright laws have on the number of recording artists who are able to fully support themselves by authoring copyrighted sound recordings is similarly opaque. Yet without Lunney drawing attention to the economic dynamics of the music industry as he did, one might not even think of these questions, no less attempt a search for answers. In the context of making policy recommendations, Lunney ex- plained that copyright owners will perpetually lobby Congress to alter copyright laws to transfer wealth from consumers to themselves.4 He noted: “Fortunately, in politics it is much easier to prevent Congress from acting than to get Congress to act.”5 He further (and very as- tutely) observed that copyright owners will also continually avail themselves of any venue available to them, including the courts. Addi- tionally, they will try to persuade European actors to expand copy- right, and then “argue harmonization or trade-related interests to persuade Congress to grant them the same protection in the United States.”6 II. THE TIME FOR OVERALL COPYRIGHT REFORM IS NIGH One of the most important contributions that Copyright’s Excess makes is to demonstrate very convincingly that copyright law as a whole needs fresh analysis and rethinking. It has been almost a quar- ter of a century since the United States Congress enacted the Digital Millennium Copyright Act, which among other initiatives established the “notice and take down” paradigm that provides a safe harbor from copyright infringement liability for website owners that remove mate- 2. GLYNN LUNNEY, COPYRIGHT’S EXCESS: MONEY AND MUSIC IN THE RECORD- ING INDUSTRY 193 (2018). 3. Id. at 193–94. 4. Id. at 197. 5. Id. 6. Id. \\jciprod01\productn\T\TWR\6-1\TWR101.txt unknown Seq: 3 15-SEP-20 11:01 2020] SECTION 203 TERMINATION RIGHTS 25 rial that copyright holders allege to be an infringement. It has been over twenty years since passage of the Copyright Term Extension Act, which increased copyright terms retroactively as well as prospectively. Supplementing Congressional action, mainly to wrangle doctrinal lapses and ambiguities, the United States Supreme Court has dis- rupted previous copyright law understandings in cases like: M.G.M. Studios v. Grokster,7 which added “inducing infringement” as a cate- gory of secondary liability for copyright infringement; Kirtsaeng v. John Wiley and Sons, Inc.,8 which extended the “first sale doctrine” to copyrighted works lawfully made abroad; American Broadcasting Cos., Inc. v. Aereo, Inc.,9 which expanded the definition of “public performance” by analogizing the Internet broadcasting of copyright- able audiovisual works to cable retransmission; and Star Athletica, LLC v. Varsity Brands, Inc.,10 which established a new test for deter- mining the copyrightability of pictorial, graphic, and sculptural works that are “useful articles.” Parties who are unhappy with these juris- prudential developments want Congress to legislatively undo them. Parties that benefited from these changes want Congress to codify them by amending the Copyright Act. Lunney is correct to be con- cerned that some of these parties’ lobbying initiatives will gain trac- tion and change the law without considering how this alters incentives for various stakeholders. There are other signs that pressure is building for significant new copyright law reforms as well. One powerful indication is that the American Law Institute (“ALI”) is producing a Restatement of Copy- right Law,11 something this author recommended in 200512 and again in 2014.13 Given the controversy this project has engendered,14 ALI is unlikely to explicitly include Lunney’s recommendations in any signif- icant way within the rules of this Restatement. Though some invested parties accuse the drafters of promulgating radical change, the final version of the Restatement of Copyright is unlikely to be revolution- 7. See Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913 (2005). 8. See Kirtsaeng v. John Wiley & Sons, Inc., 568 U.S. 519 (2013). 9. See American Broadcasting Companies, Inc. v. Aereo, Inc., 573 U.S. 431 (2014). 10. See Star Athletica, L.L.C. v. Varsity Brands, Inc., 137 S. Ct. 1002 (2017). 11. See Restatement of the Law, Copyright, THE AM. L. INST., https://www.ali.org/ projects/show/copyright/ (last visited Aug. 31, 2019). 12. Ann Bartow, The Hegemony of the Copyright Treatise, 73 U. CIN. L. REV. 1, 3 (2004). 13. Ann Bartow, A Restatement of Copyright Law as More Independent and Stable Treatise, 79 BROOK. L. REV. 457, 498 (2014). 14. See e.g. Terry Hart, Clearing the Air on the ALI Copyright Restatement, COPY- RIGHT ALL. BLOGS (Jan. 19, 2018), https://copyrightalliance.org/ca_post/ali-copyright- restatement/ [https://perma.cc/CR6X-EYP6]; Scott Alan Burroughs, ALI’s Great Copyright Caper: Has The American Law Institute Been Hijacked by Big Tech?, ABOVE THE L. (Jan. 24, 2018, 6:15 PM), https://abovethelaw.com/2018/01/alis-great- copyright-caper-has-the-american-law-institute-been-hijacked-by-big-tech/ [https:// perma.cc/MYA7-XJ82]. \\jciprod01\productn\T\TWR\6-1\TWR101.txt unknown Seq: 4 15-SEP-20 11:01 26 TEX. A&M J. PROP. L. [Vol. 6 ary. It would be encouraging to find references to Lunney’s research mentioned in appropriate related ALI commentaries, but we shall see if this happens.