Karl Fogel: The Balanced Buyout Option

[Andrius Kulikauskas]

The Balanced Buyout Option: How To Turn Monopolies into Markets by Karl Fogel

The copyright system we have had for the last three hundred years was
not designed to support creation. It was designed to support
distribution, by guaranteeing certain monopoly rights to printers, in
order to make printing an economically viable enterprise.

If we were to design a new copyright law for the age of the Internet,
we might simply decide to have no copyright law at all. After all, it
is already clear that there is no shortage of creativity, distribution
is essentially zero-cost, and accurate attribution is best protected
by widespread distribution anyway.

However, we might not want to jump directly from today's system to
having no copyright law at all. There is an intermediate step that
might be politically more acceptable, at least for now. This
intermediate step is a copyright system designed to create a public
domain market instead of a monopoly market. It is fairly simple:

A new work (a book, a song, a movie, etc) would first get an automatic
three to five years of copyright. The primary purpose of this initial
period would be to give the work a chance to establish itself, without
interference from competing derivatives.

After this initial period is over, the copyright holder must register
the work with the government in order to keep the monopoly.
(Registration was formerly required for copyrights in many countries,
in fact, so this part is not new.) When the owner registers the work,
she must choose a number: the total value of the work. That number
can be as low or as high as she wants, but her registration fee will
be a percentage of that number, so she has an incentive not to declare
too high.

Now comes the key: since the owner has declared a total value for the
work, anyone can look up that value in the central copyright registry,
and pay the owner that amount to liberate the work into the public
domain. This would be a mandatory transaction. The owner must
liberate the work for that amount, because she has been paid exactly
the amount she declared the monopoly to be worth.

Since the value of a work may change over time, registrations are
renewed annually, and the owner may change the declared value each
time. The registration fee will, of course, adjust along with it.

Note that liberation is different from purchasing the copyright
itself. A copyright could still be rented or sold, just as today, and
might be sold for less or more than the registered total value (since
the prospective purchaser might prefer to keep the monopoly, rather
than liberate the work into the public domain). The new owner would,
of course, be responsible for registration upkeep thereafter.

After twenty-five years, there could be no more renewals of
registration: the work must pass into the public domain. Twenty five
years is long enough for anyone to hold a monopoly on a replicable
work.

The exact numbers I have used are not important. The initial period
could be longer or shorter; the percentage of total value required for
registration upkeep could be 1% or 5% or something in between; the
final limit could be twenty years instead of twenty-five. The
important point is that keeping something out of the public domain is
a privilege, not a right. The owner of that privilege should pay the
public for it, and the public should have a meaningful choice about
the transaction. This system accomplishes both goals.

(See http://www.questioncopyright.org/balanced_buyout for more.)