William Patry writes another highly educational piece, this time about the history of one of the most technically complex aspects of copyright law, the right of termination for works whose term has been extended (Do Termination of Transfers Matter?). For those unfamiliar with this aspect of copyright law, termination means that if you licensed your copyright to some person or entity, you (or your heirs) can get the copyright back to take advantage of the new, extended term, if you comply with some complex formalities.

Patry writes that the inalienable aspect of the termination right is due to a failure of the renewal requirement (28years of copyright, then you have to renew in the last year of the original term for another 28 years) to let artists have a second bite at the apple. Patry writes about the original renewal term:

The purpose of this arrangement was (hard as it is to believe) to give the author a second bite at the apple: because it was believed difficult to calculate the market value of a work at its inception, it would be hard to calculate what an assignment of the renewal term was worth. Congress therefore considered the renewal term to be an opportunity for the author or his or her heirs to renegotiate the terms of an assignment made during the original term. But that plan worked only if the author was not permitted, during the original term, to also convey the renewal term. If the author could convey the renewal term along with the original term, the plan failed.

Patry writes that the Supreme Court's decision in Fred Fisher Music Co. v. M. Witmark & Sons, 318 U.S. 643 (1943), shot this down by permitting the artist to convey the renewal interest before the renewal had taken place. Patry thinks the case wrongly decided, "Whether one agrees with this or not (and great judges like Judge Pierre Leval do agree with the policy expressed by Frankfurter), the Court should not have ended up where it did, since it conceded the statute was plain and plainly to the contrary."

Of course, all this complexity would easily have been avoided if Congress (and the Constitution) would permit only prospective change to copyright terms, rather than change in term for subsisting copyrights.

Moreover, the whole concept behind renewal, that it is essentially impossible for the artist to properly calculate the future value of their work and thus need an opportunity to renegotiate with licensees, seems rather inconsistent with the claim in the Sonny Bono Copyright Term Extension Act (CTEA) that extending the term of copyright another twenty years will incentivize creativity. If calculating the value is so darn hard, how in the world will that change my incentives? It isn't even as valuable as a lottery ticket, since I can calculate precisely the expected value of a lottery ticket. Heck, how will the possiblity that a future Congress might increase the term down the road provide any cognizable incentive, if I can't properly calculate the present value anyway? Why have a termination right? Why didn't artists take into account the possibility that Congress would pass the CTEA and figure it into their original licensing agreements?

Subsisting copyright term extension is simply windfall rent seeking.