Fixed copyright terms cause rent-seeking---only the counterplan solves.

Rent-seeking activities are a natural consequence of any fixed copyright term, since the Congress that enacts the term cannot prevent future Congresses from increasing it retroactively. There will always be copyright holders whose incomes are diminished when their works fall into the public domain, and they have an incentive to expend resources on seeking retroactive extensions as the end of the copyright term draws near. This rent seeking would be lessened by indefinite renewability, which by eliminating the prospect of losing the income produced by old but still valuable copyrights would largely eliminate the incentive to lobby for copyright extensions. “Largely” rather than “entirely” because some resources might still be expended on lobbying for lower renewal fees and longer renewal terms. But normally it would be cheaper to pay the renewal fee than to try to change the law. And while a system of indefinite renewals limited to future copyrights would not curb the incentive to seek retroactive extensions of existing copyrights, that problem would disappear in time as old copyrights lost their value.

A particularly unfortunate aspect of congressional extensions of the copyright term is that they apply to all copyrighted works, not merely those whose owners lobbied for the extensions. Disney might have sought a private bill that would have extended only its copyrights, but a politically more effective strategy was to ally itself with other copyright owners and represent that the legislative relief sought would benefit all creators of intellectual property, not just Disney and a handful of rich heirs. But the result of the blanket extension of the copyright term was that a huge amount of intellectual property having little or no commercial value, yet potential value as a public domain input into future intellectual property, will be kept out of the public domain for another twenty years.

It might be objected that allowing indefinite renewals would eliminate only one form of rent seeking because copyrights have other dimensions of value besides duration, notably scope. But whatever incentive there is for lobbying for enlarged scope exists under the current system; it would not be greater under a system of indefinite renewals. A more serious concern is that copyright holders might renew their copyrights for strategic purposes, hoping one day to “hold up” an author who wanted to copy their work. This practice would resemble strategic patenting, discussed in Chapter 11, and would be a danger posed particularly by software copyrights, which is one reason why we do not discuss the applicability of a system of indefinite renewals to them. With regard to other classes of copyrightable work, a stiff renewal fee, combined with the effect of discounting to present value, should minimize the problem.

If we are correct so far, the average copyright duration might be shorter under a system of indefinite renewals than under the current system. Such a system might therefore reduce access costs for most but not all works, compared to the present system. (It probably would not reduce deadweight costs because these presumably are generated mainly by valuable copyrights, which would tend to be renewed.) But whatever the case with regard to costs, it may seem that there could be no social benefits from continuing indefinitely to protect even a small number of valuable works. This assumes, however, that the only justification for copyright protection is the incentives it produces to create new works. This may be wrong, as we consider next.