Last week, Senator Josh Hawley (R-Mo) introduced a bill in the Senate to reduce the length of copyright protection and (mostly) to punish Disney.  Called the "Copyright Clause Restoration Act," Senator Hawley's bill would reduce the length of copyright protection from the current term of life of the author plus 70 years in most instances and 95 years in many other instances.  Senator Hawley's bill would bring back the old 28-year term with a possible renewal term of 28 years for a maximum total of 56 years.   The text of the bill can be found here

For the most part, Hawley's bill would apply prospectively, with the new, shorter term applying to works "fixed" on or after the date of its enactment.  But the bill would apply retroactively to a very small group of entertainment companies with huge market capitalizations.

Senator Hawley's press release accompanying the proposed bill could not have been much clearer in terms of expressing the purpose of the retroactive provisions.  Hawley states that 

"The age of Republican handouts to Big Business is over. Thanks to special copyright protections from Congress, woke corporations like Disney have earned billions while increasingly pandering to woke activists. It's time to take away Disney's special privileges and open up a new era of creativity and innovation."

While passage of this bill seems like a longshot, these are strange times, so it's probably worth taking a closer look at some of the provisions. 

First, as noted above, the retroactive provisions only apply to certain entertainment companies with a huge market capital.  The bill defines which companies fall into this category by reference to the classifications of business types under North American Industry Classification System (NAICS), a system used by the US (and other) governments for statistical analysis and other purposes.   The bill specifies that the retroactive provisions are  applicable to businesses that fall under NAICS code 5121 (the motion picture/video industries) or code 71 (arts, entertainment or recreation),  or which engages in "substantial activities" for which such a code could be assigned.   And, as noted above, the retroactive provisions only apply to gigantic companies; i.e., those  which "on any date on or after May 1, 2022  have a market capitalization of more than $150 billion.  As of today, among entertainment companies, only Disney and possibly Comcast would meet these criteria.  Companies such as Sony, Warner Discovery  and Fox don't even come close.  Of course, the catchall provision noted above might mean that other purveyors of content, such as Apple, Meta, Amazon and Google, would fall within the reach of the statute.

Senator Hawley's bill is sensitive to the fact that certain people or businesses may have entered into licenses with these entertainment behemoths and that it would be unfair to deprive them of the benefits of their agreements.  So the bill has a provision that states that a "person" operating under a license to a copyright that, because of the application of this new statute, would expire during the ten year period beginning on May 1, 2022, such license will remain in effect for the shorter of 50% of the remaining license term or 10 years.  

To say that this bill is not fully thought out would be a gross understatement.  And it does seem unlikely to pass.  But if it did pass, it certainly would be a boon to copyright litigators and also the organizers of industry events and conferences.  Indeed, one could probably hold an entire convention on the issues raised by this bill.  To name but a few:

  • The entire bill may be unconstitutional, including as an illegal taking of property without compensation.   It also likely would be violative of the US's treaty obligations under Berne. Of course, constitutional analysis and adherence to international obligations ain't what it used to be.
  • The bill does nothing to address how it would impact other provisions of US copyright law, including the termination provisions that permit authors to recapture rights after a certain number of years.  
  • The provision that triggers the retroactive provisions if at any time an owner's market capital exceeds $150 billion could lead to the sudden loss of copyright ownership by a company's whose value ticks above that number even if only briefly.
  • The bill reinstates the old requirement that in order to remain protected, a copyright must be formally renewed in its 28th year.   So we would be back to the good old days where adherence to formalities would be of paramount importance.  
  • The inclusion of large companies who engage in "substantial activities" for which the specified NAICS code could be assigned hardly provides certainty.  And we thought the transformative test was hard to apply.  And speaking of fair use, this statute could throw a monkey wrench into factor four of the fair use factor since the potential for market harm might be impacted by the possibility that the copyright owner's market capitalization would hit the magic mark.
  • I can only begin to think of all of the issues that would be raised by the odd provisions giving protection to certain licensees for a limited period of time.  And none of these protections would apply to any licenses entered into after May 1, 2022.

While Senator Hawley's bill seems ludicrous, there certainly has been discussion as to whether the current term of copyright is too long.  So it's always possible that some sort of term reduction bill will gain traction.  

Stay tuned!

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