Whitney Houston and the Morality of Copyright Term Extensions

The recent untimely death of diva and part time actress (who doesn't love "The Bodyguard"...) Whitney Houston has got me thinking about the recent extension of the Copyright act. (Recent as in 1998 -- but when you have a law that goes back to 1790, almost anything is "recent".) I think that the Act, even flawed as it was, demonstrated a triumph of Moral/Economic IP, as well as tangible evidence that Michael Eisner did not want Mickey to go off copyright on his watch.

Wow, that's random you say. Well not really. Using Michael Jackson and Whitney Houston as two recent examples, we can conclude that Copyright Terms that exist beyond the life of the artist, are in part, social insurance programs designed to care for the offspring or spouses of artists. The most recent extension of the copyright act is "Life + 70 years" for authors (or songwriters) and "120 Years after creation  / 95 Years after publication" for corporate authorship. Leaving aside the arguments about corporate authorship (which is where the "Mickey Mouse Protection Act" comes into play), lets look at the effect of the term for regular authors.

Both Whitney and Micheal had substance abuse issues. Likely, these issues killed them. Both Whitney and Micheal have children who will grow up parent-less in a world which places a significant dollar value on their talent. Their heirs (notably their minor and semi-minor children) should be allowed to collect on the remaining value of the works, that society is willing to pay. This is more true in situations where the artist has died fairly young.

It is impossible to calculate the value of having a world renowned (and rich) artist as your parent. As a society, we have made a collective decision that the works of art are still valuable to us after the untimely passing of their creator. Therefore, easily identifiable heirs should be the recipient of that residual economic value. As it stands, Whitney's heir's have copyright income till 2082. That's a long time. But, Whitney's child is 18. If her mother was a non-substance abusing hedge fund manager, it would be obvious that by the time she was 88 she would have lived a life of privilege.

 If, as some argue, copyright terms should expire upon the death of the author, they as a society, are we prepared to send Micheal Jackson's children to love on the south side of Chicago with their abusive grandfather and enabling grandmother? From a moral rights stand point, the value of Micheal and Whitney's contribution to society in terms of economic output has vastly exceed the amount they were allowed to collect from society in life.

Intellectual Property is not just something that evil record companies use to sue you.  It is a form of deferred pension to those who create lasting works. It is a source of economic security for those left behind, when troubled talent meets an untimely end. IP should extend beyond the life of the artist because....I don't know...the children are the future.

IP Insurance in China

Recently, I had the good fortune to participate in a series of IP and Patent Law lectures in Shenzhen, PRC.  The main topics of discussion were related to the practical application of prosecution strategies and the new changes going into effect because of the AIA. While the audience was very receptive to the practical and philosophical changes coming to American Patent law, a strain of thought kept appearing in the questions presented to the speakers. (Pictures to Follow)  

The Chinese audience seamed, relative to the usual American audience, to place a high premium on risk mitigation.  The questions related to risk were varied, but they all had a component that sought to forestall danger by unloading risk to someone else.  This usually took the form of a question about IP Insurance in the U.S.  For those unaware, IP underwriters (for a fee, natch) will supposedly cover the cost of your outrageously expensive Patent infringement litigation. The Chinese audience wanted to know the extent of IP Insurance policies and how they were implemented.  Beyond the specifics of insurance, additional questions were directed to other forms of risk mitigation and risk allocation as it applies to drafting patents and filing disclosures.  While the mechanisms of action were different, the essential question always boiled down to "How can I eliminate risk to myself, while engaging in a profitable venture?"

The answer is, you can't.  We told them as much.  My colleague explained that those firms that would foresee being sued relentlessly are already capable of handling their litigation costs.  Those who could not, likely can not afford the premium on the policy for an event that may never happen in the life of the company.  Patent litigation, as related to risk mitigation, is too statistically random to allow a proper allocation of risk premiums. Either the insurance company will go out of business due to massive 'bet the company' litigation payouts, or a number of start-ups are going to bleed capital paying premiums to insure an event that never occurs. Either way, your money is better spent elsewhere. (Like getting an opinion on infringement from a competent Patent Attorney) 

What's the takeaway for the Start-Up community.  Patent Law is complex.  Risk management is complex. Anything worth doing, that you can make money at, carries a risk component.  Worrying about the potential of being sued by a competitor is something that is a necessary part of the innovation experience.  Efficient offsetting of the risk would not result in better products and services, it would merely enable people to take financially rewarding risks without consequence to the danger (See: Wall Street, 2008-present ).  Fear of a competitor's patent should never deter your from seeking your own.  The more time and money you spend focusing on risk mitigation, the less time you have to perfect your own idea. If your investors want more assurances, you can always get an opinion from counsel.