Copyright Registration Reform and Transaction Costs in the Information Economy

And Larry and Hal Varian find some common ground: Copyrights That No One Knows About Don’t Help Anyone (Frankly, I hope that some of my colleagues at least read the first two paragraphs; the pretentiousness of liberally festooning even the most basic of presentations with “© My Name, year” is just overwhelming sometimes)

Here’s a quiz question for authors: To copyright a written work in the United States, you must (a) register it with the Copyright Office; (b) insert a notice that says “Copyright © 2007;” (c) insert a notice that says “All rights reserved.”

Answer: none of the above. Under current law, a work is automatically copyrighted the moment it is “fixed in tangible form.” And these days, that copyright lasts virtually forever: 70 years after the death of the author, in most cases.

Since there is no requirement to register a work and a copyright lasts so long, the legal owner of a work can be difficult to find, particularly when the work is more than a few decades old.

When some librarians at Carnegie Mellon University tried to request permissions to digitize a collection of out-of-print books, they were unable to find more than 20 percent of the rights holders, despite persistent efforts.

Failing to locate rights holders can be costly since copyright infringement may be subject to statutory damages of up to $150,000 an incident.

The costs of locating rights holders are an example of what economists call transactions costs. Not surprisingly, high transactions costs tend to discourage transactions from occurring.