Copyrights, Criminal Sanctions and Economic Rents: Applying the Rent Seeking Model to the Criminal Law Formulation Process

By Saperstein, Lanier | Journal of Criminal Law and Criminology, Summer 1997 | Go to article overview

Copyrights, Criminal Sanctions and Economic Rents: Applying the Rent Seeking Model to the Criminal Law Formulation Process


Saperstein, Lanier, Journal of Criminal Law and Criminology


I. Introduction

Few, if any, public choice theorists(1) have applied the rent seeking

model(2) to the criminal law formulation process.(3) This is particularly

odd given that rent seeking is such a prevalent model in examining

the formulation of civil legislation.(4) On first inspection, public choice

theorists may posit that the benefits of criminal law are public goods.(5)

For example, streets which are free from criminal activity offer

benefits that are nonexcludable and nonrivalrous. Accordingly, interest

groups have little incentive to organize on the ground that the

benefits of their collective action would be available to the public at large,

yet they would have to bear the entire cost of organization. This may

well be true for some aspects of criminal law, in particular policies of

general deterrence. On closer inspection, however, there are areas of

criminal law which enable organized interests to use the mechanism

of government to create or protect economic rents. These areas lend

themselves to rent seeking analysis.

In order to clarify the argument, this Comment will examine the

changing nature of copyright law. Copyright law is making increased

use of criminal sanctions to punish transgressions.(6) Prior to 1976, for

example, the maximum criminal sanction for the willful infringement

of a copyright by an individual constituted a misdemeanor penalty of

$1,000 and one year in prison.(7) After 1992, by contrast, the maximum

criminal sanction for the willful infringement of a copyright by an

individual constituted a felony penalty of $250,000 and five years in

prison (for first time offenders) and ten years (for second time

offenders).(8) Thus, there has been a clear and dramatic shift toward

stiffer and more stringent criminal penalties for copyright infringement.

This Comment posits that the traditional public choice model of

rent seeking can explain the increase in criminal sanctions for

copyright infringements. As the value of intellectual property rights has

increased with the emergence of new technology, particularly in the

area of computer software, the incentives for interests to expend

resources in order to gain monopolies over these products have also

increased.(9) This Comment argues that Congress' decision to increase

criminal penalties was driven by interest groups seeking copyrights

protected by criminal sanctions as a means of restricting entry into an

increasingly profitable market. Indeed, given the nature of

intellectual property, criminal sanctions are the most effective means of

restricting competition and realizing economic rents. Thus, this

Comment extends the methodology of public choice from the civil to

the criminal law formulation process. To public choice theorists such

an argument may not seem particularly controversial. To legal

scholars, however, such thinking may be quite revolutionary.

The fundamental purpose of the Comment is thus to

demonstrate that the criminal law formulation process does not occur in a

political vacuum; namely, it is not a frictionless process void of interest

group activity. Given that quotas, tariffs and regulations are coveted

by economic interests,(10) it would seem reasonable to suggest that

certain criminal sanctions are also coveted by economic interests. The

secondary purpose of the Comment is to suggest that copyright

protection may be inappropriate for certain works. Specifically,

government-conferred copyrights enable the holder to realize economic

rents, and these rents offer an incentive for interest groups to expend

resources in order to gain these copyrights. …

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