By Damian Vaughan.
Among the myriad of terms in the Trans Pacific Partnership trade deal is the proposed extension of copyright from its present 50 years to 70. This is a good thing. It will help New Zealand’s creative sector to benefit further from its work, encouraging and supporting innovation and stimulating the creation of intellectual property – creativity.
However, there is a perception the cost of compliance for the country would be onerous. As a result, an eight year phase-in period has been negotiated for New Zealand, possibly because of that perception of onerous cost. This is a bad thing. Not only is that perception of heightened costs based on faulty maths, but the phase-in period is complicated and unnecessary.
The creative sector in this country is active and punches well above its weight on the international stage. It isn’t just in the music industry either: in film, television, literature, architecture and design, Kiwis excel domestically and around the world. The intellectual property created by New Zealanders resonates around the world and those efforts should be protected to the nth degree.
So, why change the copyright term from 50 years to 70 years? And will it cost more to do so than the benefits which might accrue?
These are important questions, the answers to which have been distorted to a large extent by a study on which government has based much of its thinking. The 2009 report by Concept Economics – known as the Ergas report – found the costs of copyright extension would average a massive $55 million per year – costs which would be accrued by government in upholding copyright law.
This isn’t the case at all.
But before we debunk the erroneous costing of the Ergas report, let’s consider the first question. Copyright term extension increases the incomes of future producers of copyright works by increasing the number of years over which they are entitled to receive a flow of royalty payments. In simple terms, the longer your creative output is copyrighted, the more you earn from it.
Copyright isn’t a ‘protectionist gripe’, either. It doesn’t seek to exclude anyone from participating in or benefiting from the fruits of their labours; quite the contrary, it seeks to encourage it. Furthermore, what applies to our creatives through the change contained in the TPPA, applies to other artists in all the nations which are signatories to the deal. In other words, the protection isn’t for one group at the expense of another.
Further, it is absolutely the case – and accepted practice – that building on top of others’ work is part of the growth/intellectual property creation cycle. But those using the rights of others to build upon and monetise, need to pay a fair price.
Now, on to the erroneous calculations that came out of that seven year-old Ergas report. Fundamentally, there are two problems: the first involves simple arithmetic errors which, thanks to the beauty of mathematics, is easily resolved. The second is a deeply erroneous assumption which cannot be supported – the assumption that New Zealand and its creative sectors will not benefit at all from copyright extension. It is our view there will be a benefit; if 50 years delivers a benefit, it follows that 70 will deliver an extended benefit.
Economist Dr George Barker is Director of the Australian National University’s Centre for Law and Economics. When Recorded Music commissioned Dr Barker to review the Concept Economics report, he found the underlying figures on which the report relied for the $55 million cost were unavailable, even to government officials. Barker also found that even when consulting the sales data on which the report was based, the maximum cost of compliance for extending copyright protection would not exceed $250,000 per year.
What’s at stake here is sustainable jobs and livelihoods. It is about export opportunity for one of our most important sectors – a sector that not only generates income, wealth, wellbeing and taxes, but also has an influence on culture and community. And it does this by protecting the intellectual property of creative people not only in New Zealand, but wherever the TPP comes in to force.
Damian Vaughan is chairman of Recorded Music NZ.
