In “When elephants dance” I called for the end of corporate ownership of copyrights. Jerry Kindall wrote one of the better riffs on that essay. In his response, Kindall makes some excellent points to which I’ll respond in a minute.
But first, I’d like to point out that I never suggested that we could “buy back our rights.” I was merely mentioning my disgust that it costs about US$1 million to get a bill introduced in the Senate and about US$2 million in the House. I’m a strong supporter of real campaign finance reform and believe that money does not equate speech. I’m naive enough to believe that we can retain our intellectual property rights—both as creators and customers—by voting appropriately and holding candidates’ feet to the fire with regard to these issues.
Now, on to Kindalls’s comments.
He uses the example of a writer creating a user manual for a software package and states that “it won’t do me a lot of good to own that copyright, since it’s tied closely to the product….” When I wrote the “elephants” piece, I didn’t have technical writers in mind, but I’ll play along. Presumably this manual Kindall uses as an example is created as a work-made-for-hire either as an employee of the software manufacturer or as an independent contractor. Kindall suggests that under my proposal he would assign his copyright in the work to one of the corporate officers. The assignee would, according to Kindall’s scenario, have a clause in his employment agreement that calls for him to assign his copyright interests to yet another employee upon the assignee’s termination of employment.
Applying my proposal to this situation, work-made-for-hire would disappear. The copyright in the work produced would never leave the hands of the person or persons who actually created the work. Certain rights—likely exclusive rights for a given use or application (a manual in this case)—but not the copyright itself would be licensed by the creator to the software company. The terms of a contract between the creator and the software company—including the rights mentioned—would govern any use of the work. Any right not specifically granted in the contract would be retained by the author of the work.
Here’s why the creator of the work retaining copyright is so important:
A year after the original contract with its grant of rights is executed, the software company is ready to start its development effort for version 2.0 of the product. Like most software companies, this one believes that it’s at best trivial to create high-quality user manuals. After all, it’s just a set of redundant directions: “mash this to make that happen.” The software company decides that an easy way to increase shareholder value is to get an intern to make additions to the most excellent user manual Kindall created last year. But Kindall was smart and insisted on licensing only the rights the software company needed to produce his user manual. Those rights expire when version 1.0 of the product is retired and a new license must be negotiated for Kindall’s services and intellectual property for version 2.0. And if the software company decides to contract with another writer for the version 2.0 user manual, it may not use the underlying work Kindall produced for the version 1.0 product without relicensing the material.
This protects Kindall from being ridiculously underbid and collaterally protects the software company’s customers from getting a crappy manual. If Kindall wants to publish a book about the software product, or a magazine article about, say, power-user tips—using the underlying material—he’s free to do so by negotiating a license for those rights with third parties. I challenge anyone to demonstrate how this in any way harms the software company.
Is this approach to intellectual property fair? Of course it is. If the software company doesn’t like Kindall’s price, it is free to contract with someone else. But even then, it is precluded from using any underlying work it hasn’t licensed. Now, extend this scenario to the programmers who actually developed the software program. The only way of ensuring some semblance of fairness for all parties involved is in prohibiting the software company from owning the copyright in the software or its accompanying manual. The appropriate penalty for corporations that willfully infringe on a copyright is revocation of the corporate charter.
Again, work-made-for-hire is not what I had in mind when I wrote the “elephants” piece, and I’m willing to concede that my proposal won’t work in those particular cases. But I’ve yet to see a compelling argument that would cause me to make that concession. Kindall’s certainly doesn’t.
That corporations control copyrights, without actually owning them, under the current system is precisely the problem. When corporations are no longer allowed to own copyrights, and when moral rights are recognized, control resides where it should, with the creator of the work. Most publishing contracts today call for the author to grant “all rights in all media known or unknown throughout this or any other universe” to the corporation. Seriously.
“Corporate ownership of intellectual property is just as important to the continued operation of a modern business as corporate ownership of physical property is,” writes Kindall. “That’s the point of a corporation in the first place…” This is simply wrong, on its face. The explicit purpose of modern corporations is merely to deliver value to shareholders. Implicit in that purpose is the obligation of the modern corporation to its community of stakeholders, including—among many others—employees and suppliers. Many corporations fully recognize this obligation, but many more conveniently sidestep it whenever possible.
Corporations were originally instituted by the British monarchy as “charters” to control commerce on behalf of the crown. What is now the state of Maryland, for example, was originally created under such a charter that required all exports to be shipped through England. These charters, and the fears associated with their growth and misuse, were a core factor in the American Revolution. After the Revolution, when the representative government of the republic was being formed, elected representatives issued corporate charters, solely on the behalf of the people, and with great reservation. By and large these charters were issued for public works such as bridges, canals, and the like. In fact, corporate charters were regularly denied when local communities opposed them. The most important aspect of these restrictive charters was that they absolutely precluded corporations from activities that were not specifically allowed. Furthermore, corporate charters were limited to a set number of years, and capitalization, debt, and sometimes even profit were all controlled. Large and small shareholders enjoyed equal voting rights through “scaled voting” and corporate directorates that interlocked were illegal.
Almost all of these restrictions were removed when the Supreme Court found that corporations were “natural persons” under the Constitution. As I’ve written, repeatedly, that was a mistake and it’s imperative that we begin by setting that right. The result is the condition we now collectively face: corporations are allowed to do anything that is not specifically disallowed, and even that restriction is now in question.
Finally, Kindall writes that creators of intellectual property—he uses the example of recording artists, directors, and screenwriters—sign the contracts that they do because they “want the fame that only a major distributor can give them.” First, let’s bracket the situation of directors and screenwriters; I don’t know enough about their intellectual property predicaments.
I know a lot of musicians and I’ve yet to meet a serious one who signed a recording contract to get either famous or rich. Every musician I’ve ever met has been happy and figured they “made it” when they were able to quit their day jobs. Same for writers, and I know a boat-load of them too. Being able to earn a comfortable living doing what you love is a great plenty.
Recording contracts are even worse than book publishing contracts in that if the recording company decides not to publish the work, they still own all the rights to it. No one has outlined the plight of the writer or musician more articulately than Courtney Love’s speech to the Digital Hollywood conference in May 2000.
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