The IP Report

This IP Report is written by the lawyers in Piper Rudnick LLP's Intellectual Property practice group:

http://www.piperrudnick.com/intellectualproperty.

THE CONSTITUTIONALITY OF THE COPYRIGHT TERM EXTENSION ACT

Mickey Mouse Saved Once Again From The Public Domain

On January 15, 2003, the United States Supreme Court, in a 7-2 vote, upheld the 1998 Copyright Term Extension Act (CTEA),1 a law that extends the term of existing copyrights by 20 years. As a result of the Court's ruling in Eldred v. Ashcroft,2 books like "The Great Gatsby,". films like "The Jazz Singer,". musicals like "Show Boat" and popular cultural icons like Mickey Mouse - all set to enter the public domain - will remain under copyright protection for another two decades.

The Supreme Court's ruling was a victory for the music, entertainment and publishing industries but a major setback for artists, online publishers and anyone else seeking free access to works on the verge of being released into the public domain.

Background

Eric Eldred, the plaintiff, had an idea to launch a web site on which he would publish the creative materials of others, including the poems of Robert Frost - whose copyrights were set to expire. His idea, however, was quickly foiled by the enactment of the CTEA.

On October 27, 1998, President Clinton signed into law the CTEA, which allows copyright holders, including entertainment companies and book publishers, to retain their rights to existing books, music, movies and other creative materials an additional 20 years. Congress passed the law after heavy lobbying from companies with lucrative copyrights such as The Walt Disney Company.

The extension resulted in the copyright term for individual authors being the author's life plus 70 years, and the copyright term for copyrights held by corporations being the lesser of 95 years from publication or 120 years from creation. The 20-year extension applied retroactively, and not merely to newly created works, thus delaying the time that works would enter the public domain. This ensured that the writers and creators of the material could continue to collect revenue and royalties from their works throughout the period.

This is not the first time Congress extended the terms of copyright. Congress has issued a series of extensions over the last 40 years.

Upon the enactment of the CTEA, Eldred was joined by nine other plaintiffs interested in using the creative works of others, including a church choir director, an orchestral sheet music company, a company that restores old films and a book publisher. Together they brought a class action suit in the United States District Court for the District of Columbia challenging this latest copyright extension law, and seeking to use hundreds of thousands of books, movies, poems and songs due to be released into the public domain.3 The group challenged the constitutionality of the CTEA claiming that the law is beyond Congress' enumerated power under the Copyright Clause of the Constitution, and that it violates the First Amendment.4

Under Article 1 Section 8 of the United States Constitution, Congress was granted the power "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"5 Plaintiffs asserted that by issuing a series of 11 extensions, this latest, being by far the longest, Congress has exceeded it powers by, in effect, giving copyright holders an unlimited monopoly over the use of their material.

Plaintiffs also argued that the CTEA violates the Copyright Clause of the Constitution as it inhibits creativity. They asserted that creativity is stifled when it becomes harder and more expensive for people to obtain and build upon another creator's existing work.

Plaintiffs' First Amendment argument was based on the contention that the continuing extension of copyrights keeps works from the public domain and restricts their free use. These restrictions, they argued, inhibit the free flow of and access to information that is an acknowledged part of the free speech guarantee.

On the other hand, the government and other supporters of the copyright extension argued that the CTEA is a rational exercise of Congress' legislative authority conferred by the Copyright Clause. The government argued that Congress' enactment was offered to promote creativity by offering a larger economic payoff to those who invest in creating works, and that longer terms would encourage copyright holders to invest in the restoration and public distribution of their works. They further argued that the 1998 law aligns the United States copyright terms with those of the European countries, which ensures that American authors would receive the same copyright protection in Europe as their European counterparts.

The District Court entered judgment on the pleadings for the government, holding that the CTEA does not violate the Copyright Clause's "limited Times" restriction because the CTEA's terms, though longer than the 1976 Act's terms, are still limited, not perpetual, and therefore fit within Congress' discretion.6 The court also held that there are no First Amendment rights to use the copyrighted works of others.7 The District of Columbia Circuit affirmed the District Court's ruling, and the plaintiffs appealed to the Supreme Court.8

Supreme Court Decision

The Supreme Court in Eldred v. Ashcroft, was asked to address the issues raised by the parties and determine (i) whether Congress acted unconstitutionally in granting the extended copyright protection, and (ii) whether such extension impacted the free speech guarantees afforded under the First Amendment.9

Constitutionality

The Supreme Court's review of the CTEA marked the first time in history that the Court accepted a case that challenged the constitutionality of any aspect of the U.S. Copyright Act.

In the 7-2 opinion, the majority of the justices found that the CTEA did not violate the Constitution. Writing for the Court, Justice Ruth Bader Ginsberg, found that, "Nothing before the Court warrants construction of the CTEA's 20 year term extension as a congressional attempt to evade or override the 'limited Times' constraint."10 Instead, the Court held that the Constitution "gives Congress wide leeway to prescribe 'limited times' for copyright protection and allows Congress to secure the same level and duration...