Copyright term, film labeling, and film preservation legislation : hearings before the Subcommittee on Courts and Intellectual Property of the Committee on the Judiciary, House of Representatives, One Hundred Fourth Congress, first session, on H.R. 989, H.R. 1248, and H.R. 1734 ... June 1 and July 13, 1995 (1996)

417 market is working in this country, then it necessarily means the public is paying these extra royalties Mr. Hoke. Excuse me. I'm going to run out of time. I want to know what — I still don't see where the objection is, though, to the extension to the 20 years on this. What's the specific objection? Mr. Karjala. Well, that's an additional public cost with no public benefit. Mr. Hoke. OK, we had testimony earlier that cost is de minimis on a per-unit basis. Mr. Karjala. That's right, and I'm — my first point is that I don't accept that testimony. Mr. Hoke. Oh. Mr. Karjala. I think it's factually wrong. We ought to have a study of that cost before we push ahead. That's the first point. The second point I think is a much higher cost. The money, the royalties that flow into the hands of the copyright owners whose copyrights would be extended is only a small part of the total cost paid by the public because of the way we tie up the hands of new creators who aren't able to take things that would have otherwise been in the public domain and create new works. Mr. Belton gave a number of examples of derivative works that are based on public domain works. I have offered some more examples in my own written testimony. And so to the extent that we tie up the hands of these unknown creators — we don't know who they are or where they'll be in the future— we take a serious risk of losing whatever they would otherwise have created. The system is now carefully balanced to encourage these people to produce. Therefore, to the extent that the extension does not provide new incentives for production — and I didn't hear any testimony even suggesting that it provides increased incentives — we have a public cost, a risk of a serious lost in creation of new works, with no public benefit. That's what's wrong with this legislation. Mr. Hoke. I want to make a couple of observations and then ask one other question, if I could, Mr. Chairman. All right. There's been a lot of talk about what the justification is for creating the copyright law or the copyright asset in the first place, the protection. And Mr. Jones testified that he thought this would create, by extending the length of the term another 20 years, that this would create an additional incentive, and I suppose that's part of what you could call the fundamental incentive theory. I personally think that that theory doesn't hold up very well except for a very short period of time. I think that there clearly has to be a short period of protected time with respect to creating an incentive to go to the things that you, Professor, were discussing, and I think it's very important at the period of inception. But I think if you rely intellectually on that incentive theory to the prop for which you're going to justify copyright law, you're going to run into a real problem because, frankly, you've got to come up with a much more compelling reason for giving that right in the future. I don't have a hard time coming up with that compelling reason. That is that there is a value to intangible property which is intellectually created, which is unique, and which is very