SpicyIP Trivia: The Royalties That Never Grow Up

This blog has always had a healthy fascination with the lesser-known quirks of intellectual property law. We’ve always had posts that throw the limelight on the interesting, the off-beat and the downright bizarre IP phenomena. I’m going to try and rekindle this passion for IP trivia in the weeks to come. 

Tucked away in a corner of the UK’s Copyright, Designs and Patents Act 1988 is one of the most unique provisions an IP lawyer will ever encounter: Section 301 is titled “Provisions for the benefit of the Hospital for Sick Children”. What does a children’s hospital have to do with an IP legislation, you ask? Perhaps you think it’s an exceptional provision that allows patents on life-saving drugs for infants to be subject to compulsory licensing? Good guess, but wrong answer. Here’s the text of the statute:

301. Provisions for the benefit of the Hospital for Sick Children.

The provisions of Schedule 6 have effect for conferring on trustees for the benefit of the Hospital for Sick Children, Great Ormond Street, London, a right to a royalty in respect of the public performance, commercial publication [or communication to the public] of the play “Peter Pan” by Sir James Matthew Barrie, or of any adaptation of that work, notwithstanding that copyright in the work expired on 31st December 1987.

In a nutshell, the section has the effect of granting the Hospital a perpetual right to recover royalties for the commercial exploitation of Peter Pan in the UK. PlagiarismToday sums up the position pretty well: the question arises only with respect to performances or publications in the UK because copyright term harmonisation in the EU and elsewhere means that the work is already in the public domain in these countries.

So why did this come to be? It so happened that Sir JM Barrie, in an extraordinary gesture, bequeathed the rights to Peter Pan to the Hospital, in order to keep it funded and functioning. With the expiration of the copyright’s term in 1987 (50 years after Barrie’s death), the Hospital was set to lose a significant source of funding. Fortunately for the hospital, it could count on former PM Jim Callaghan to move an amendment to the Copyright, Design and Patents Act and stop the march of time through legislative intervention. Following this, in 1995, the EU adopted a life plus seventy years copyright term, meaning that the work would only have ordinarily fallen out of copyright in 2007. In 2007, the hospital lost its right to collect EU royalties, but the existence of Section 301 ensured that its position in the UK was secure.

In a way, Section 301 is the perfect tribute to the very idea of Peter Pan. At a deeper level, though, it seems to be the most grotesque caricature of the mindset that informs IP law-making today. When confronted with a problem (underfunded hospital, access barriers to knowledge and technology), legislators seem to intuitively reach for the chainsaw where a scalpel is called for. Fencing away knowledge through legislative fiat is like amputating a limb – it’s the quick and easy solution, but not necessarily the most appropriate one. In a word, it’s a kludge. While I understand that the Peter Pan provision owes more to sentimental value than to complex calculations of welfare maximisation, the broader claim that IP law-making intuitively favours the creation of privately held interests is still tenable. Otherwise, Mickey Mouse would have entered the public domain a long, long time ago.

Image from here. Original article strongly recommended.

Having said all of this, it’s important to note that at least in Peter Pan’s case, the legislature did not create a proprietary right in the true sense of the word – the Hospital has no right to exclude anyone from performing the play, and can exercise no creative control over the work after 2007. The copyright has grown up, but the requirement to pay up before commercially exploiting the work (albeit for a good cause) will remain as timeless as the perpetual child himself.

If you know of a similar quirk of IP law (especially in India), please put it down in the comments. We’ll be sure to credit you for the lead!

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4 thoughts on “SpicyIP Trivia: The Royalties That Never Grow Up”

    1. Balaji Subramanian

      Thanks for writing in 🙂
      I’ll look into this. I think I’ve heard about this one – where Judge Kozinski advised the parties to chill?

  1. The Copyright (Amendment) Act 1992 extended the term of copyright in India from 50 to 60 years. This was a compromise to head off loud demands from the Eastern part of India to make copyright in Rabindranath Tagore’s work perpetual (on the grounds that otherwise people might “tamper” with that sacred canon, and also in the interests of Shantiniketan to which Tagore had bequeathed his copyrights).. The then HRD Minister, Arjun Singh, didn’t feel politically able to say NO, but did agree that it would be quite wrong to keep Tagore’s work out of the public domain. His fudge did work: ten years later Tagore’s works finally did fall into the public domain, the controversy having been forgotten.
    In the UK, there is a perpetual copyright in the King James version of the Bible, though fortunately it is not enforced.

    1. Balaji Subramanian

      Thank you so much for taking the time out to comment!
      I’ll follow this lead and do some digging on Tagore – this looks really exciting!

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