Disney and the Copyright on Mickey Mouse

Daniel Diermeier

Background

In the March of 1998 Walt Disney Co. chairman Michael D. Eisner was involved in intense lobbying activities on Capitol Hill. At the top of Disney's agenda was a request for Congress to resolve one of Disney's most urgent problems:  The copyright for Disney's crown jewel, Mickey Mouse, will expire after 2003, 75 years after the appearance in 1928 of the Disney cartoon that launched Mickey's golden career, "Steamboat Willie."  In fast succession, copyrights will end for Pluto in 2006 and Goofy in 2008.  Early in the next century, protections also will expire for Bambi, Dumbo, Donald Duck, Snow White and all the Seven Dwarfs. Without copyright, Disney would collect no fees for the showing of classic movies such as "Fantasia," and other companies could freely use its characters in their movies and videos.

Copyright is a form of intellectual property right protection provided by the laws of the United States (title 17, U.S. Code) to the authors of "original works of authorship," including literary, dramatic, musical, artistic, and certain other intellectual works. This protection is available to both published and unpublished works. Section 106 of the 1976 Copyright Act generally gives the owner of copyright (among other things) the exclusive right to reproduce the work in copies or phonorecords, to prepare derivative works based upon the work, to distribute copies or phonorecords of the work to the public by sale or other transfer of ownership, to rent, lease, or lend the work, and to perform the work publicly. The copyright for an individual creator like an artist lasts for the life of the creator plus 50 years. For a work owned by a corporation, the duration is 75 years from the date of publication or 100 years from the date creation. Whatever comes first.  

There is no international copyright. However, unlike most forms of intellectual property protections (such as patents etc.) U.S. copyrights are valid overseas through the Berne Convention, an international treaty signed by most major countries. In practice, however, copyright protection may be difficult and costly, and may eventually rely on the help of the U.S. Government.

To prevent the loss of its most precious assets Disney pursued a nonmarket strategy designed and implemented by Preston Patten, Disney's head of lobbying operations. First, Disney increased its campaign contributions. Recipients of campaign money included members of key committees such as Sen. Patrick J. Leahy, D-Vt., a family friend of Eisner and ranking Democrat on the Judiciary Committee, and Rep. Howard Coble, R.-N.C., chairman of the Judiciary Subcommittee on Arts and Intellectual Property, which oversees copyright issues.  Disney contributed nearly $800,000 to political campaigns in the 1997-98 cycle.

In 1998 this strategy bore fruit. In the Spring of 1998, the U.S. House of Representatives debated HR2589 (sponsored by Rep. Coble): the Copyright Term Extension Bill. The bill would extend the 75-year copyright by 20 years. It would thus grant Disney exclusive rights to the images for another generation and make it harder for them to be reproduced by other manufacturers when copyrights run out.

Despite the company's lobbying campaign, Disney faced a tough fight in Congress, where a wide range of interests including consumer groups, libraries, restaurants and small business had raised questions about media companies' efforts to extend and toughen copyright protection. Critics of the bill argued the companies already had earned plenty of money from classic movies and should now allow other companies to offers video and other produces based on these works when copyrights expire. Consumer groups opposed the extension, charging that the original purpose of the copyrights--to provide benefits to human creators of cultural works and nurture production of more works--had been lost.  They saidy the biggest benefits of copyright extension would flow to large companies and investors. "The bill is moving because it is supported by big entertainment companies like Disney," said Jamie Love, director of the Consumer Project on Technology, an advocacy group opposed to tougher copyright laws. Adam Eisgrau, a lobbyist for the American Library Association, contended the bill would merely preserve Disney's premium prices. "After 75 years, these classic movies belong in the public domain like the works of Shakespeare and Mark Twain.  Works in the public domain are more accessible to more people at lower prices," Eisgrau said.

The bill, however, was supported by Jack Valenti, president of the Motion Picture Association of America, who stated that the copyright term must be extended by 20 years, to 95 years, to match a change adopted by the European Union. According to Disney and the MPAA copyright extension simply would grant American entertainment the same rights that the European Union gave to European companies. "It is important the United States and its artistic talent not be disadvantaged in the worldwide market for creative properties," the company said.

In addition to opposition from consumer groups Disney faced an additional complication. The issue was an amendment proposed by F. James Sensenbrenner Jr., R.-Wis., to exempt most restaurants, bars and other small businesses from paying annual music licensing fees for piping in broadcasts from television and radio stations.  The fees typically range from $200 to more than $1,000 per year, depending on the size of the business. The Sensenbrenner amendment would exempt most restaurants, if the rooms where sound speakers were located covered less than 3,500 square feet. 

Among the opponents of the Sensenbrenner Amendment were songwriters and music licensing societies who wanted a narrower exemption covering restaurants with an entire floor space of less than 3,500 square feet. Orrin G. Hatch, R-Utah, chairman of the Senate Judiciary Committee, said the bill will not move unless the exemption is removed or reduced.  Sensenbrenner defended his amendment.  "If they want to separate the two issues, it won't happen," Sensenbrenner said.

Disney now had to make a variety of decisions: Should they support the Sensenbrenner Amendment, or oppose it? How should they deal with consumer opposition? What strategy should they pursue in the Senate?

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