[Part III of the Text for Remarks made at the Piracy and Counterfeiting in a Digital Environment: U.S. and Italian Experiences, U.S. Consulate General Florence, Italy, September 27-28.]

Last week a colleague at Cornell asked me to give a talk to his class on intellectual property. I found myself explaining the historical dynamics behind the American Revolution, Constitution and a free-market political economy.

\”Unless you were a pirate,\” I said, \”you could not trade anywhere in the world from England without a license.\” Another quote: \”The first law to establish exclusive rights, a monopoly in copyright, dates back to 1557 when Elizabeth I squelched counterfeiters use the new technology, the printing press, to manufacture fraudulent documents for everything, including Royal charters to trade.

The irony was not lost on the students. Even the same terms, pirates and piracy, counterfeit and fraud, rang a familiar bell. After discussing the meaning of article 1 section 8, the original copyright provision in the U.S. Constitution, and the terms of the first copyright law in 1790, 14+14 years, limited scope, and registration, the comparison to contemporary law was telling. We are now up to life +70 years for an individual and 95 for a corporation. Anything that is original work in a tangible medium qualifies, and registration is not required. Finally, damages are extraordinarily high, ranging from $750 for a completely innocent infringement to $250,000 for intentional violations.

What will people of goodwill in the future who believe in order liberty say about how the US has structure intellectual property in the 20th century?

Will the US government, which largely supported content owners wishes to expand copyright exponentially: scope, terms and damages, be viewed as the bulwark against anarchists and enemies of the rule of law? Or will people of goodwill, who prize the balance of incentive and innovation, who seek fairness, who wish for a vibrant global economy, look upon the United States as a patsies for powerful corporate interests? We should aspire to something in the middle and stop giving oxygen to voices who speak in extremes. Remediation should be balanced and reasonable.

If you will excuse me, a little more history to place my call to reform into perspective. In antebellum American society, the Supreme Court transformed American law to provide the foundation for the development of corporations. After the Civil War, when the political economy divided between slave and free labor united around the latter, corporations took off economically because the law proved fertile ground. By the 20th century, for all intents and purposes, corporations achieved their highest stage of development in American society. That is, they were and remain the society\’s most power forces.

Moreover, as US corporations became ascendant in their own country, they followed the path of American global hegemony in the aftermath of the Second World War. Ironically, today, the question now is how to keep them there! The European tiger, Ireland, is the country of choice for many corporations. Small companies are easy to procure following Ireland\’s economic turndown. US entities buy them and then re-incorporate in a country where it does not face the same tax liability as in the United States.)

Because American law applies fiduciary responsibilities to corporations, there should be nothing surprising about these developments. That corporations regard the government and law instrumentally is also given. Corporations strive for their own profit. Back in the 19th century, unwritten social policy assumed such striving good for the public because profit motives stimulated the economy. The absence of social policy now to address powerful corporate interests that act outside of the public good is the challenge we face today, and not least in the area of intellectual property.

Under our most recent copyright law, promulgated in 1976 before the explosion of Internet technologies, publishing and entertainment companies lobbied for tremendous expansion of scope, terms that exceed normal life expectancy and are subject to perpetuity by Congressional installment, and exorbitant damages that do not clearly distinguish between individual infringements and the work of organized crime or very high volume infringers. The heavy hand of corporations pressed hard on incentive over innovation. But now the question has become whether that imbalance serves the public good. Content owners assure us that they do citing the statistics that show them the leading US export. But all of this infringement cannot be good for society, especially among youth who remain a generation of criminals under existing law. Worse yet, the lesson they learn about the relationship of law to technology is not a good one, especially as technology continues to drive the global economy. Most damaging is how those messages lessen foundational concepts of citizenship.

A better understanding of infringement takes into account complicated market factors, disruptive new technologies, user behaviors that cover a wide spectrum of people if not countries, and of course, the nature of law written for technologies that suited a 20th-century paradigm. Serious and meaningful copyright law reform would signal a willingness to negotiate out of this conundrum not simply as handmaidens of powerful publishing and entertainment companies but for the good of global society.

What would those reforms entail? First, we should rethink the scope of copyright, it is too broad, it should be more limited. Second, the terms are too long. They need to be reduced significantly in order to give true understanding to the notion of incentive. Third, damages should be clearly differentiated between organized crime and very high volume infringers and individual users who make no profit from small infringements. A repeal or at least revision of the 1997 No Electronic Theft Act might also be undertaken in this vein. Fourth, registration should be in line with the scope of copyright. As flattering as it may be to receive copyright protection in, say, my own simple poetic creativity, it does not make sense that work should receive the same degree of protection as a major movie.