Declared Value System

Discussion

Karl Fogel:

"Suppose things worked this way instead — I’ll use copyrights for the sake of discussion, but this applies to patents too:

A new work gets an initial automatic copyright term, as it does today but much shorter: maybe a few weeks or months from publication, enough to ensure there’s time for the owner to register the work if they wish to extend the monopoly.

If the copyright owner does not register, the work simply enters the public domain.

But there’s an alternative: instead of letting the monopoly lapse, the copyright owner can choose to register the work for continuation of copyright (renewable annually), with a registration fee proportional to the self-declared value of the work. That is, the copyright owner picks a number of dollars (yuan, euros, whatever) that she claims the work is worth. It can be any number at all, but the yearly registration fee will be a percentage of it — for discussion’s sake, say 1%. The exact proportions don’t matter here: it could be 0.5% or 2% instead of 1%, registration could be semi-yearly instead of yearly, etc. The idea is the same, regardless of how you set the knobs.

Now comes the key:

Since that declared value is now a matter of public record, anyone can pay it to the copyright owner to liberate the work into the public domain. This is not a purchase, it is a liberation. Prior to liberation — whether it comes through payment or through term expiration — people would still be free to sell or lease their copyrights, for whatever price they can get (which, interestingly, may be higher or lower than the registered value — the market dynamics behind that decision are just as rich as those involved in determining exclusivity value under today’s copyright system). But whoever the owner is, whether the author or someone else, they’re responsible for keeping up the registration. And while the work is still under registration, anyone can come along and pay the registered owner the declared value to liberate it.

Liberation, unlike purchase or lease, is a mandatory transaction. The justification is that since the registrant chose the price in the first place, it is by definition fair: it was self-declared. Furthermore, these are after all public monopolies, and the public’s ultimate interest is in having works be available without restriction. For governments to hand out monopolies with no escape clause has always been an abdication of responsibility. If there is a way to fix that, we should take it.

The copyright holder has an incentive not to declare too high a value, because she’ll have to pay a percentage of it to register; she has an incentive not to declare too low, because then someone will come along and liberate the work very quickly at a low price (though some artists will find that liberation is economically a better deal for them anyway, and simply not register, or register at a declared value of zero in order to get a timestamp for attribution purposes).

Because the value of a work may change over time, the registrant may adjust the declared value up or down each year when renewing the registration [3]. This is also one of the reasons behind that brief initial registration-free monopoly term: it gives the copyright holder a chance to judge the work’s monopoly value, information she can use to decide how much to register the work for.

Whether indefinite renewal should be available is an open question. Personally I think not, for two reasons: first, because there has simply never been a compelling argument for perpetual copyright and most jurisdictions do not have it. Second, because awareness of an approaching horizon will pressure registrants to set lower liberation prices as that horizon comes closer — which is the right direction for things to move, from the public’s point of view, since even the most confident authors cannot reliably predict years ahead of time which monopolies will remain valuable, and therefore far-future valuations do not have a significant incentivizing effect anyway.

But even if indefinite renewal were permitted, the system still has desirable effects. The tendency of monopolies to accumulate in media conglomerates (who then press for Internet censorship to preserve those monopolies) would be greatly lessened by the cost of maintaining all those registrations. Forced to choose which assets are really valuable, the companies would have to lower the liberation values for many works, thus providing the fertile ground for re-use and innovation that artists, other publishers, and the rest of us are denied under the current system." (http://falkvinge.net/2012/12/10/declared-value-system/)