Thursday, February 21, 2002

Limited vs. Unlimited The Constitution states that Congress only has the ability to set copyright to a limited term. But how long does "limited" have to be until it becomes, in essence, "unlimited"?

The way to work this out is to think of copyright payments as an annuity, pick a discount rate, and see how close every limited term's net present value is to the unlimited term's net present value. People can have an intelligent conversation about how close a limited term needs to get to an unlimited term in % terms until it becomes, in essence, unlimited.

The formula for the net present value of an annuity is (1 - (1 + discount rate) ^ -years)/discount rate.

At 5% discount rate:
10 year duration is 39% to unlimited term
20 year duration is 62% to unlimited term
50 year duration is 91% to unlimited term
100 year duration is 99% to unlimited term

At 7% discount rate:
10 year duration is 49% to unlimited term
20 year duration is 74% to unlimited term
50 year duration is 97% to unlimited term
100 year duration is 100% to unlimited term

Scalia, being a strict constructionist, will almost certainly rule that copyright extensions cannot be applied retroactively. If he takes his Chicago Law & Economics approach to defining when "limited" becomes "unlimited", we should see copyright being restricted to 30-50 years. Nice.

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