On January 18, 2012, the United States Supreme Court upheld the constitutionality of copyright legislation adopted 17 years earlier that extended U.S. copyright protection to foreign works previously in the public domain in the United States. The majority opinion in Golan v. Holder, with two dissenters, rejected claims that the controversial extension (deemed a "restoration") of copyright rights in the foreign works infringed the First Amendment and exceeded the intended scope of the Copyright Clause in the U.S. Constitution. Despite the long delay, the decision could have immediate practical impacts.

Background

The case had its roots in the tangled history of American involvement in international copyright agreements. For most of its history, the United States dealt with other countries on copyright matters on a bilateral basis, if at all. Although the United States belatedly signed on to the Berne Convention for the Protection of Literary and Artistic Works in 1989, it failed to afford fully reciprocal copyright protection to foreign works in the United States until 1994 when the Uruguay Round of trade negotiations produced both the World Trade Organization and the Agreement on Trade-Related Aspects of Intellectual Property Rights. The United States then adopted the Uruguay Round Agreements Act ("URAA"). Effective January 1, 1996, URAA extended copyright protection to foreign works previously in the American public domain. This had a dramatic impact on individuals and entities who had had free use of those works. The Golan plaintiffs claimed the extension was unconstitutional.

The majority opinion by Justice Ginsburg held that the Copyright Clause and the First Amendment do not bar Congress from exercising its legislative power to award protection to previously created works in the public domain. In so holding, the Court determined that the creation of new original expression is not the only objective of the Copyright Clause and that the "idea/expression dichotomy" and the fair use defense function as "built-in First Amendment accommodations."¹ The dissent by Justice Breyer, in an equally scholarly analysis, found the majority's holding unsupported by the intent of the Constitution's framers and prior case law.²

Impacts and Actions

Beyond settling a longstanding legal dispute, the decision may have immediate impacts. The owners of a vast, if not immediately known, group of works created over six decades may decide to enforce their rights against U.S. entities that have used or are using those works. While URAA provides some protection to such U.S. users, at a minimum, they will have to stop using the works for free. United States creators of derivative works based on restored copyright may have to share their profits with the restored rights owners. In both cases, litigation is possible.

A restored rights owner that did not file notice with the Copyright Office before the end of 1997 must serve a "Notice of Intention to Enforce" ("NIE") before it can seek a remedy from a "reliance party," which the statute defines as someone who engages in what would have been infringement of copyright but for the work having been in the public domain prior to the restoration of copyright protection. No NIE is needed for infringers who are not reliance parties.

Finally, for derivative works based upon a "restored" work (say, the movie version of a book or a photograph of artwork for which copyright was restored), the derivative work can continue to be exploited if the owner of the restored copyright is paid "reasonable compensation." If agreement can't be reached on what is reasonable, it will be up to a federal court to decide, taking into account any harm to the actual or potential market for, or value of, the restored work from the continued performance of the derivative work and compensation for the relative expressive contributions of the authors of the restored and derivative works.

¹Slip Opinion at 24 (quoting Eldred v. Ashcroft, 537 U.S. 186, 219 (2003).

²Justice Alito joined in the dissent. Justice Kagan did not participate.