On January 15, 2003, the United States Supreme Court upheld the 1998 Copyright Term Extension Act in which Congress extended the term of copyright protection by 20 years. The Eldred v. Ashcroft decision represents a major victory for companies and individuals holding valuable copyrights.

The case drew a particularly large degree of attention due to the notoriety of several copyrights at stake. The copyrights on materials such as the version of Mickey Mouse portrayed in "Steamboat Willie", movies such as "Casablanca", "The Wizard of Oz" and "Gone With the Wind", and songs such as "Happy Birthday to You" all would have faced expiration had the Court overturned the Act.

The Constitutional Provision Allowing Copyright Grants

The basis for copyright protection is found in the United States Constitution. In creating protection for copyrights, the framers of the Constitution empowered Congress to "promote the progress of science" by granting exclusive copyrights for "limited times." The nation’s first copyright statute was enacted in 1790 and provided a federal copyright term of 14 years, renewable for an additional 14 years if its creator was still living. Since its inception, Congress has repeatedly amended and expanded the scope and duration of copyrights, with the most recent amendment taking place in 1998 under the Copyright Term Extension Act.

Prior to passage of the Copyright Term Extension Act, the duration of protection afforded to Copyright owners had been extended so as to provide for exclusivity for the life of the creator plus 50 years for individual works, and 75 years from the date of publication for works held by corporations. The passage of the Copyright Term Extension Act extended these terms by an additional 20 years. Eldred’s arguments to the Court did not focus on the length of time that Congress chose to extend protection, but rather centered on the retroactive nature of the Act.

The Case

The Eldred case involved a number of plaintiffs, each of whom wished to publish works that were about to pass into the public domain when the Copyright Term Extension Act was passed. Eldred’s principal argument was that Congress does not have the authority to extend the term of an existing copyright because extension of the term would result in the subversion of the Constitutional requirement that copyrighted works "promote the Progress of Science." Eldred also argued that the Court could not allow Congress to extend the term of copyright protection without ignoring the Constitutional requirement that copyrights be granted for "limited times." Such an allowance, according to Eldred, would create a regime of perpetual copyrights.

In rejecting Eldred’s arguments, the Court reasoned that the Constitution gave Congress broad discretion to determine the scope of copyright protection and that the Court is "not at liberty to second-guess the Congressional determinations and policy judgments of this order, however debatable or arguably unwise they may be." Some opine that the Court’s decision ensures that copyright owners will have an incentive to create, while others believe the extension is imprudent, and will stifle creativity.

Implications of the Decision

Businesses that rely on licensed intellectual property such as publishers, artists, architects and others must be aware that Congress has never been shy about modifying existing intellectual property laws, has done so repeatedly and will do so again. The most immediate implication on business activities that has been created by the Act and its subsequent validation in Eldred, is the extension of the term of protection for copyrighted works that were nearing the end of their terms of exclusivity. Businesses who had previously planned to enjoy royalty-free use of copyrighted works must now reconsider these plans. Additionally, copyright licenses that were negotiated for the term of a copyright grant may need to be revisited, as copyright owners may have unwittingly licensed their work for a longer period than had been anticipated. Finally, this decision is representative of the somewhat amorphous nature of intellectual property laws, and is indicative of the amount of care and consideration that should be exercised when entering into intellectual property licenses. Copyright owners and licensees should draft copyright licenses with clauses which account for and accommodate any legislative changes in scope or duration that may create uncertainty or unintended consequences in their license agreements.

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