Some Thoughts on the Political Economy of Intellectual Property:
A Brief Look at the International Copyright Relations of the United States(1)
David G. Post(2)
Temple University Law School/Cyberspace Law Institute
As everyone is no doubt well aware, over the past decade or so, as intellectual (rather than physical) assets begin to increasingly dominate the world economic scene, intellectual property matters have moved to center stage in the world of international trade. The rather tangled history of United States - China trade negotiations over intellectual property matters,(3) and the central role that intellectual property played during the negotiations leading to the last round of the General Agreement on Tariffs and Trade, are well-known examples of this phenomenon.
As a result, questions about the relationship between intellectual property, intellectual property law, and economic development have taken on a new urgency. What role do intellectual property laws play in economic development? How should nations in different stages of development react to calls for increasing global harmonization and enforcement of intellectual property laws?
These are large, difficult questions, both in theory and in practice, and I can hardly do justice to them in a short presentation. Theorists have argued, and will undoubtedly continue to argue, about the role of intellectual property in economic development, and perhaps the only thing on which there is a consensus is that there is a complex feedback relationship between the scope of a country's intellectual property laws and its stage of economic development(4) -- that one size does not necessarily fit all, that countries in different stages of economic development face very different benefits and costs with respect to providing any particular level of protection for intellectual property.
Rather than talking about this question in the abstract, I want to explore these issues by looking at the history of United States copyright law, and in particular, at the history of its international copyright relationships. To be sure, every nation's experience with these questions is shaped by complex (and possibly unique) historical, political, and cultural forces; but there may, perhaps, be general principles at work that can be better understood through examination of specific cases. If nothing else, a look at the history of United States copyright relations will illustrate that international trade and intellectual property have long been intertwined, and that today's problems may be no more than logical extensions of yesterday's problems.(5)
The story of United States copyright law begins at the founding of the American Republic itself. The framers of the U.S. Constitution, believing that "nothing is more properly a man's own than the fruit of his study, and [that] protection and security of literary property would greatly tend to encourage genius,"(6) inserted the so-called Patent and Copyright Clause into the Constitution. This listed, among the powers that the new Congress was permitted to exercise, the power to "promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries."(7)
The first Congress, convened shortly after ratification of the Constitution, wasted no time in putting this clause into effect, enacting the new republic's first Copyright Act in its very first session. The main provision of this Act, defining the "copy right" itself, read as follows:
SECTION 1. [T]he author and authors of any map, chart, book or books already printed within these United States, being a citizen or citizens thereof, or resident within the same, . . . and any other person or persons, being a citizen or citizens of these United States, or residents therein, his or their executors, administrators or assigns, who hath or have purchased or legally acquired the copyright of any such map, chart, book or books, . . . shall have the sole right and liberty of printing, reprinting, publishing and vending such map, chart, book or books, for the term of fourteen years from the recording the title thereof in the clerk's office.Most interesting, from my perspective here, is that the copyright itself, the "sole right and liberty of printing, reprinting, publishing and vending" literary and artistic works, was granted only to "citizens" and "residents" of the United States; foreign authors, in other words, could obtain no copyrights under this law.(8) Not to put too fine a point on it, United States law at its outset was highly "protectionist," allowing -- even, some have suggested, encouraging(9)-- the "piracy" of foreign works of authorship.(10)
Discrimination against foreign authors remained a central feature of United States copyright law throughout the late eighteenth and nineteenth centuries.(11) It was not until passage of the International Copyright Act (also known as the "Chace Act") in 1891 -- exactly 100 years after the passage of the first Copyright Act -- that the United States finally pledged itself to accord foreign authors equal treatment under the copyright law (if the author's country of citizenship accorded reciprocal protections to the works of American authors).(12)
Even then, it must be admitted, recognition of foreigners' rights was extended rather grudgingly, and in a manner that denied foreigners much effective protection for their works within United States borders;(13) this would not truly become a part of U.S. copyright law until 1989, with United States accession to the Berne Convention on Literary and Artistic Property (and its requirement that all signatory nations provide the same treatment to foreigners as it provides to its own nationals).
America's early policy is rather easy to understand. Simple economics offers a convincing reason why a country that is primarily an importer of copyrighted works might choose to leave foreign works unprotected. As Professor Goldstein puts it, "If Country A imports more literary and artistic works from Country B than it exports to Country B, it will be better off denying protection to works written by Country B's authors even if that means foregoing protection for its own writers in Country B."(14) Discrimination against foreign works can be explained as an attempt to build up a domestic copyright-based industry by allowing it to "free ride" on the efforts of others, and America's copyright policy was part of a larger strategy, designed (largely) by America's first Treasury Secretary, Alexander Hamilton, to promote the development of infant industries within the United States. Providing copyright protection for American authors only, it was felt, worked to the advantage of the growing American publishing industry; American publishers could, because of this provision, publish American versions of foreign (especially British) works at relatively low cost (since they were not obligated to pay royalties to the [foreign] authors when they did so). Much of the early history of international copyright throughout the West is consistent with this simple principle, as discrimination against foreigners was the rule, rather than the exception, in international copyright relations until the middle part of the nineteenth century.(15)
What accounts, then, for a shift away from copyright protectionism? This is, to be sure, an enormously complex question, and no one factor can possibly account for this dramatic worldwide trend. But one very significant factor, clearly, is that just as recognition of foreign copyrights is disadvantageous to countries that are importers of literary and artistic works (or any works protected by copyright -- now, of course, including computer software), so, too, should it be advantageous for those that are primarily exporters of such works. As countries move up the developmental ladder -- from importer to exporter of intellectual creations -- the ration of benefits to costs of recognizing the intellectual property rights of foreigners shifts. Exporting nations are happy, in effect, to offer the following deal to others: we will provide copyright protection for the works of your authors if you provide the reciprocal protection for our authors under your copyright law -- for we have more to gain from the protection that our authors can receive outside our borders than we have to lose by offering protection to foreigners.
International copyright relations, then, should reflect this simple opposition between exporters (favoring reciprocal recognition of foreign copyrights) and importers (resisting such recognition). And, by and large, at least in the West, it does so. The first countries to begin agitating for the principles of "international copyright" were the two major exporters of literary property -- Great Britain and France.(16) These countries exerted intense diplomatic pressure on those countries that were denying copyright protection to foreigners (and where copyright "piracy" was rampant) -- in France's case, the most serious offender was neighboring Belgium, in Great Britain's it was the United States.(17) And this opposition certainly explains at least a fair bit of the current trade climate surrounding intellectual property matters, whereby the intellectual property exporters demand, and the importers resist, demands for recognition and enforcement of foreign copyrights on a consistent basis.(18)
But this is not the full story; there are more subtle and complex forces at work as well. Recognition of foreign intellectual property rights is not simply a response to increasing exports of intellectual property, it may help to bring about that change from importer to exporter status.
The American experience during those crucial 100 years between the first Copyright Act and the International Copyright Act is instructive. The protectionist provision of the U.S. Copyright Act was relatively uncontroversial for the first 40 years or so, as the publishing industry grew (at least partially due to these protections). Public debate over the question of recognition of foreign copyright began in earnest in 1837, when the first formal proposal to recognize international copyright and to remove the discrimination against foreign authors was made by Senator Henry Clay -- one of America's most influential Congressmen and a future Presidential candidate -- in the much-publicized "Clay Report." Clay argued that American interests were harmed, not benefitted, by the absence of recognition for foreign copyrights. Whatever benefits American publishers might be reaping by virtue of the ability to reprint foreign works at low cost was offset, Clay argued, by the benefits that American authors would reap by an extension of copyright to the works of foreigners.(19)
It sounds like a paradox: why would American authors gain if copyright protection was extended to the works of their counterparts -- their competitors -- in other countries? The answer is two-fold. First, American authors were finding that their books, which were protected by copyright in the United States, were hard-pressed to compete with inexpensive editions of foreign works. As the international law scholar Max Kampelman put it, who would pay one dollar for the work of American authors such as Herman Melville or Nathaniel Hawthorne when they could get the latest novel by Dickens or Trollope for one-half that price or less?
And American authors were also harmed by discriminatory treatment of foreigners because they themselves were beginning to try to sell their works overseas, and they were discovering that other nations were -- understandably! -- reluctant to give copyright protection to American authors when the United States was denying copyright protection to their authors.
The argument, in other words, was that the United States would not become an exporter of literary and artistic works -- that its "authorship industry" would not be able to develop as quickly -- unless copyright protectionism were abandoned. Protectionism was helping to maintain the country' status as a copyright importer, by conferring a competitive benefit on the publishing interests that were doing the importing. Over the 50 years following publication of the Clay Report, American authors took the lead in opposing the publishing interests and supporting efforts to remove the protectionist provisions from American copyright law. And differences of opinion developed within the publishing community itself, as those publishers who began to specialize in the works of American, rather than foreign, authors joined in those efforts to amend the copyright statute and to provide for recognition of foreign copyright.(20)
I would suggest that this development reflects an important, and sometimes overlooked, component of international copyright relations. In Professor Goldstein's words again, "Viewed in the long perspective, the current protectionist surge in international copyright relations is nothing new. From the very first French-Belgian treaty and the early American refusal to undertake international copyright obligations, copyright has been a protectionist card that nations play according to their current notion of what arrangements will best promote the national interest."(21) But while the costs and benefits of copyright protectionism are clear at the ends of the developmental spectrum; it is in the middle that things get interesting. As a domestic "copyright industry" matures, it also fragments; some portions of that industry -- authors, the producers of new intellectual property -- begin to perceive that their self-interest lies in equitable copyright treatment for foreigners. The publishers -- the distributors of already-produced intellectual property of others -- are no longer the only voice heard in the debate, their interests no longer the only ones to be considered.
One would be foolish indeed to project this simple model onto today's
complex world of international intellectual property relations. But I suspect
that there is something in the above framework that may help put these
new problems into a useful perspective. Non-recognition of foreign copyright
may be as straightforward a benefit to distributors of foreign software
as it was to distributors of foreign literary works in 19th
century America. It may also be as harmful to the interests of 20th
century authors -- domestic software developers -- in developing countries
as it was to their 19th century literary counterparts.
William P Alford, "Intellectual Property Theory Does -- and Does Not -- Matter: American Approaches to Intellectual Property Law in East Asia," 13 UCLA Pac. Basin L. J. 8 (1994)
William P. Alford, To Steal a Book is an Elegant Offense: Intellectual Property Law in Chinese Civilization (1996)
William Alford, Don't Stop Thinkg About . . . Yesterday: Why There was no Indigenous Counterpart to Intellectual Property Law in Imperial China, 7 J Chinese L 3 (1993)
Richard Rogers Bowker, "Copyright: Its History and Its Law" (1912)
Edgardo Buscaglia and Clarisa Long, "U.S. Foreign Policy and Intellectual Property Rights in Latin America," Hoover Institution Essays In Public Policy (1997)
Jane Ginsburg and Robert Kernochan, "One Hundred and Two Years Later: the US joins the Berne Convention," 13 Col. VLA J. Law and the Arts (1988)
Paul Goldstein, Copyright's Highway (1994)
Henry G. Henn, "The Quest for International Copyright Protection," 39 Cornell L. Quart. 43 (1954)
Ladas, The International Protection of Literary and Artistic Property (1938)
Paul Liu, "US Industry's Influence on Intellectual Property Negotiations and Special 301 Actions," 13 UCLA Pac. Basin L.J. 87 (1994)
Michel Oksenberg, Pitman Potter, & William Abnet, "Advancing Intellectual Property Rights: Information Technologies and the Course of Economic Development in China, National Bureau of Asian Research Analysis Vol 7 Number 4 (1996)
A. Samuel Oddi , the International Patent System and Third World Development: Reality or Myth?, 1987 Duke L.J. 831 (1987)
William Patry, "The Failure of the American Copyright System: Protecting the Idle Rich," Cardozo School of Law Occasional Papers in Intellectual Property Number 2 (1997)
Sam Ricketson, "The Birth of the Berne Union," 11 Col VLA J. L & Arts 9 (1986)
Barbara Ringer, "The Role of the United States in International Copyright -- Past, Present and Future", 56 Geo. L.J. 1050 (1968)
Robert Sandison, The Berne Conventiona and the Universal Copyright Convention: The American Experience," 11 Colum-VLA J. L & Arts 89 (1986)
Guo Shoukang, "China and the Berne Convention," 11 Col VLA J. Law & Arts 121 (1986)
Wolfgang Siebeck, ed., "Strenthening Protection of Intellectual Property in Developing Countries," World Bank Discussion Paper 112 (1990)
Thorvald Solberg, "The International Copyright Union," 36 Yale LJ 68 (1926)
Emilio Zizza, "Eliminating the Preferential Treatment of Foreign Works
under United States Copyright Law: Possible Impacts of the Copyright Reform
Bill of 1993," 19 Seton Hall Legis. J. 681 (1994)
2. Temple University Law School, 1719 North Broad Street, Philadelphia, PA, 19122 USA. Email: Dpost@vm.temple.edu.
3. See Liu (1994); Alford (1994); Oksenberg et al (1996); Shoukang (1986).
4. See Siebeck (1990) for an excellent summary of this theoretical literature.
5. See Ricketson (1986), who notes that the arguments that raged in the 19th century about international copyright protection "have a surprisingly modern ring to them."
6. The quoted phrase is from the minutes of the meetings of the Constitutional Convention, quoted in Patry (1997).
7. U.S. Constitution, Article I section 8.
8. This reflected the then-existing copyright statutes in the individual States, each of which also only protected citizens and residents of the United States. See Henn (1954).
9. See Ringer (1968); Henn (1954); Sandison (1986); Ginsburg & Kernochan (1988). The first Copyright Act, for example, not only provided that foreign authors could not receive copyright protection, but added expressly that nothing in the Act should be read to "prohibit importation or vending, reprinting, or publishing within the United States of any map, chart, book, or books, written, printed or published by any person not a citizen of the United States, in foreign parts . . . "
10. The same, it should be pointed out, was the case for the earliest Patent Acts. See Oddi (1987).
11. The United States Copyright Act was revised twelve times between 1791 and 1873, including major revisions in 1831 and 1870. See Bowker (1912).
12. Section 4952 of the Chace Act altered the definition
of the copyright as follows:
"The author, inventor, designer, or proprietor of any book, map, chart,
dramatic or musical composition, engraving, cut, print, or photograph or
negative thereof, or of a painting, drawing, chromo, statue, statuary,
and of models or designs intended to be perfected as works of the fine
arts, and the executors, administrators, or assigns of any such person
shall, upon complying with the provisions of this chapter, have the sole
liberty of printing, reprinting, publishing, completing, copying, executing,
finishing, and vending the same; and, in the case of a dramatic composition,
of publicly performing or representing it, or causing it to be performed
or represented by others; and authors or their assigns shall have exclusive
right to dramatize and translate any of their works for which copyright
shall have been obtained under the laws of the United States.''
Note that the reference to "residents" or "citizens" of the United States has been omitted. See Bowker (1912); Henn (1954); Ginsburg & Kernochan (1988); Ringer (1968); Solberg (1926).
13. See Goldstein (1994). Although the International Copyright Act removed the overt discrimination against foreign authors that was contained in all prior versions, it still imposed substantial formalities on foreign publishers (e.g., the requirements of copyright notice, and registration and deposit of copyrighted works with the Library of Congress) as a condition to copyright protection, with which, as a practical matter, foreign authors and publishers found it difficult to comply. The International Copyright Act also added the so-called "manufacturing clause" to the Copyright Act. This clause required that any printed book or periodical in the English language had to be printed from type set within the limits of the United States, or from plates made within the limits of the United States, from type set therein, or by a lithographic or photoengraving process wholly performed within the limits of the United States, in order for the work to receive copyright protection at all. Furthermore, the printing of the text and the binding of such books had to be performed within the United States.
The manufacturing clause was not repealed until the revision of the Copyright Act in 1976.
14. Goldstein (1994). See also Oddi (1987) noting, with respect to patent law, that "a fundamental distinction appears to exist between patents granted in developed countries and those granted in developing countries. In the former the cost/benefit analysis may ultimately work out: it is likely that there are a significant number of inventions that the patent system induces that would not otherwise be available and that would not otherwise add to the net social benefit of those countries. This cannot be said of developing countries. By protecting inventions -- in particular foreign inventions that are not patent induced -- developing countries significantly add to the cost side of the cost/benefit analysis."
15. See Henn (1954); Ringer (1968); Kampelman (1947); Ricketson (1986). Ladas colorfully describes this situation as follows:
"Some peoples, who had no literature of their own, lived at the expense of those with a rich and prosperous literature. National industries had developed supplying the domestic market, and they were reluctant to yield their interests to those of foreign authors and foreign publishers. On the other hand, foreign works were badly adapted or mutilated for the domestic market, and another group of persons interested in art and literature organized and demanded that the social interest in the production and publication of the genuine works of foreign authors be secured and protected. Furthermore, national writers and artists found that their interests were prejudiced by the abundant publication and sale of unauthorized foreign works at cheap prices."
16. Great Britain first passed legislation extending copyright protection to nationals of other countries (provided that those countries entered into reciprocal agreements with Great Britain to protect British authors) in 1837. France followed, in 1852, with a law extending copyright protection to the works of any author, wherever located, whether or not a reciprocity arrangement had been entered into. See Kampelman (1947); Bowker (1912); Ringer (1968).
17. The battles between France and Belgium about Belgian piracy of French works is well described in Goldstein (1994). The (unsuccessful) negotiations between Great Britain and the United States to provide copyright protection for British works in the U.S. are described in Bowker (1912) and Solberg (1926).
Prominent British authors, among them Charles Dickens and Anthony Trollope, did not take kindly to their treatment at the hands of the Americans and were in the forefront of the opposition to American copyright policy, complaining bitterly, and quite publicly, about what they perceived to be the injustice of this arrangement. See Sandison (1986). Dickens devoted much of his public tour of the United States in 1841-42 to this subject, as he did on a later tour in 1867, which helped to increase the awareness of the American public of this question.
18. See Buscaglia & Long (1997).
The conflicting views on foreign protection held by exporters and importers
is exemplified by the demand for portection by those exporting goods from
the United States to China and by the resistance of such rights
by those receiving such goods in China. These views differ according to
what is most economically beneficial to that sidewithout foreign protection, the exporters will suffer economically, while the importers will prosper economically. For example, American manufacturers saw it economically benefit to increase their exportations of goods and materials, particularly sophisticated technologies, into the rapidly-expanding Chinese market. See Elizabeth M. Nimmo, "United States Policy Regarding Technology Transfer to the People's Republic of China," Northwestern Journal of International Law and Business, vol. 6 (1984), p. 250, 266; Seth Goldberg, "Internal and External ForcesWhy and How the Major Record Companies Will Successfully Access the China Market," New York International Law Review,
vol. 7 (1994), p. 47. These American exporters, however, were faced with an imposing barrier to their exportation - China's protectionist trade policy. See Goldberg, at 47. China's lack of protection to foreign manufacturers greatly impacted American exports, including those pertaining to intellectual property rights. Id. at 50. United States record companies, for example, which sought to export recorded materials to China, risked thefts and piracy of their goods in the absence of adequate copyright protection from the Chinese government. Id. at 60. Without such protection, those who imported the sound recordings could easily illegally manufacture, distribute, and sell the goods. Id. at 60. With no costly research and development investment to recoup, the importers could undersell the exporters, causing serious financial losses to the exporters. See Nicole Telecki, "The Role of Special 301 on the Development of International Protection of Intellectual Property Rights After the Uruguay Round," Boston University International Law Journal, vol. 14, p. 188 (1996). Consequently, China's lack of foreign protection on intellectual property rights deprived American exporters of their exclusive rights, as well as their opportunity to reap economic benefit from their products. Conversely, China's lack of protection benefited those people in China who received and sold the goods from the United States. Consequently, an importing country, such as China, would oppose any protection to foreign
exporters, since its people were economically benefiting from a lack of foreign protection rights. These importing countries view such protection only as a hinderance to their economies. In fact, some newly industrialized and lesser developed countries rely on piracy and the unauthorized selling of goods exported from other countries as a major source of income and employment. See John T. Masterson, Jr., "Protection of Intellectual Property Rights in International Transactions," Practicing Law Institute Corporate Law and Practice Course Handbook Series, p. 230 (1990).
19. The British author Anthony Trollope, see note 17, noted the growing disagreement among American authors and publishers with regard to this question; writing in 1868, he noted:
"The argument . . . is that American readers are the gainers -- that as they can get for nothing the use of certain property, they would be cutting their own throats were they to pass a law debarring themselves from the power of such appropriation. . . . In this argument all idea of honesty is thrown to the winds ... [T]his argument, as far as I have been able to judge, comes not from the people, but from the book-selling leviathans, and from those politicians whom the leviathans are able to attach to their interests."
Quoted in Sandison (1986). Earlier, Charles Dickens had expressed his dismay that United States authors did not "dare to raise their voices and complain" of the "monstrous injustice" of American copyright law. See id.
20. The increasing involvement of the most distinguished American authors and artists -- including William Cullen Bryant, Henry Longfellow, George William Curtis, Horace Greeley, Oliver Wendell Holmes, Ralph Waldo Emerson, J.G. Whittier, William Dean Howells, Harriet Beecher Stowe, Louisa May Alcott, among many others -- is marvelously described in Solberg (1926).
21. Goldstein (1994).