On September 12, 2011 the EU Council of Ministers passed the copyright term extension in sound recordings from 50 to 70 years, which was proposed by the European Commission in 2008 and voted on by the European Parliament in 2009. The term extension was welcomed by the music industry bodies and several musicians. The newly appointed IFPI chairman Plácido Domingo called the extension great news for performing artists which “(…) reflects the important role performers play in success of songs by narrowing the gap between the protection offered to recorded performances and that offered to compositions.” IFPI CEO Frances Moore added that “The extension of the term of protection to 70 years (…) improves the conditions for investment in new talent.” In first statements U2 manager Paul McGuiness and ABBA’s Björn Ulvaeus applauded to the EU decision.
On the other hand, the extension is criticized by open access activists, but also by most of the academics in the field of intellectual property rights. In an open statement to the European Parliament the who-is-who of IP-law professors and economists, including Nobel laureats Sir James Mirrlees and Kenneth Arrow, opposed the copyright term extension as an ineffective and unnecessary extension of monopoly rights in 2008.
Thus, the question arises, what is the economic rational for such a term extension? What are arguments and counter-arguments and how they can be assessed by economic theory?