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*Executive Committee Member
CHAIR
*C. Boyden Gray
2445 M Street NW
Washington, DC 20037-1435
CHAIR-ELECT
*Neil R. Eisner
U. S. Department of Transportation
400 7th Street, SW, Room 10424 (C-50)
Washington, DC 20590
VICE CHAIR
*Thomas D. Morgan
George Washington University Law School
720 20th Street, NW
Washington, DC 20052
SECRETARY
*Cynthia A. Drew
U.S. Department of Justice
ENRD/PO Box 23986
Washington, DC 20552-3986
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Jonathan J. Rusch
Washington, DC
BUDGET OFFICER
*David W. Roderer
Office of Federal Housing Enterprise Oversight
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Washington, DC 20552
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Daniel Cohen
Washington, DC
SECTION DELEGATES TO THE
HOUSE OF DELEGATES
*Ernest Gellhorn
George Mason University School of Law
2907 Normanstone Lane
Washington, DC 20008
*Ronald A, Cass
Boston University School of Law
765 Commonwealth Avenue
Boston, MA 02215
IMMEDIATE PAST CHAIR
*Ronald M. Levin
Washington University School of Law
Campus Box 1120
St. Louis, MO 63130
COUNCIL MEMBERS
Stephen Calkins
Detroit, MI
H. Russell Frisby
Washington, DC
Daniel B. Rodriguez
San Diego, CA
Lynne K. Zusman
Washington, DC
John F. Cooney
Washington, DC
David Frederick
Washington, DC
Lisa A. Whitney
New York, NY
Renee M. Landers
Boston, MA
John F. Duffy
Williamsburg, VA
Cynthia R. Farina
Ithaca, NY
Leonard A. Leo
Washington, DC
Sidney A. Shapiro
Lawrence, KS
COUNCIL MEMBERS EX OFFICIO STATE ADMINISTRATIVE LAW
Jim Rossi
Tallahassee, FL
EXECUTIVE BRANCH
Viet Dinh
Washington, DC
LEGISLATIVE BRANCH
Hannah Sistare
Washington, DC
JUDICIARY
Merrick Garland
Washington, DC
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Judith Ann Dowd
Washington, DC
ADMINISTRATIVE & REGULATORY
LAW NEWS
EDITOR
William F. Funk
Portland, OR
ASSOCIATE EDITOR
William S. Morrow, Jr.
Washington, DC
ADMINISTRATIVE LAW REVIEW
CHAIR OF FACULTY BOARD
Thomas O. Sargentich
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STUDENT EDITOR-IN-CHIEF
Allison Carle
Washington, DC
ABA BOARD OF GOVERNORS LIAISON
Hunter Patrick
Cody, WY
YOUNG LAWYERS DIVISION LIAISON
Lori Davis
Lexington, KY
LAW STUDENT DIVISION LIAISON
Christine Monte
Washington, DC
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740 15th Street, NW
Washington, DC 20005-1022
(202) 662-1582
Fax: (202) 662-1529
April
12, 2002
American
Bar Association
Board of Governors
750 North Lake Shore Drive
Chicago, IL 60611
Dear
Members if the Board of Governors:
The Intellectual Property Law Section (IPL) has
proposed that the Board adopt a new ABA policy supporting the constitutionality
of the Copyright Term Extension Act of 1998 ("CTEA"), Pub. L. No.
105-298, 112 Stat. 2827 (1998). We believe that the IPL Section’s analysis
of this issue implicates matters of regulatory policy on which the Section
of Administrative Law and Regulatory Practice has expertise. We write to
inform you that the IPL Section’s analysis has generated significant
discussion amongst the Members of this Section’s Leadership Council and
that a number of our Members believe the analysis of the IPL Section to be flawed
on crucial issues. We currently oppose the IPL Section’s request for
adoption of the requested ABA policy.
This matter concerns issues falling within our
Section’s regulatory expertise.
Intellectual property rights are a specialized form of
regulation of natural monopoly industry: A time-limited exclusive right is
held out as an incentive to make capital investments in a field with high
fixed costs (the cost of creating the IP) and essentially zero marginal
cost (the cost of replicating it).
The IPL
Section argues that retroactive intellectual property rights will
"promote the Progress of Science and useful Arts" within the
meaning of Article I, section 8, clause 8 of the U. S. Constitution because
"extending the copyright term of existing works by 20 years in most
cases provided additional income to copyright owners with which to
subsidize the creation of new works. Film studios and publishers, in
particular, rely on income from enduring works to finance marginal or
financially riskier artistic projects." IPL Section Memo to the board
of Governors, at page 6. That theory is viable only if film studios and
publishers have poor access to modern capital markets, which seem highly
implausible and is not supported by any economic data.
Furthermore, because retroactive extensions produce
pure rents (i. e., windfalls) for the right holder, right holders have an
incentive to expand resources lobbying congress for more extensions (I.e.,
classic rent seeking), rather than creating new intellectual property. This
possibility suggests why the framers of the constitution may have wanted to
limit the intellectual property clause to prospective rights only.
We recommend
that the board should not adopt the IPL Section proposed new policy at this
time.
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Sincerely,
C. Boyden Gray
Chair
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