It's Mickey Mouse: How Copyright Law Affects Accounting

In many situations, matters like copyright infringement directly affect the accounting profession in a number of ways. Why?

It's easy to understand that big business wants to protect its assets. Take the case of Disney, who banks on the fact that Mickey Mouse is spared any public domain once the character's copyright period expires.

Based on a 1998 law enacted by Congress called the Sonny Bono Copyright Term Extension Act (CTEA), companies like Disney can hold on to a copyright for a term as long as 20 more years. While the mouse would have expired in 2003, it now is safe until 2023.

Critics of the law contend that public domain is a good thing because it not only strengthens our culture, but encourages cost-savings as well. In fact, a case is under appeal right now involving The Great Gatsby, where critics argue that the book should be public domain.

What does this mean to the value of a copyright, keeping in mind that a large number of professionals specialize in IP (intellectual property) cases, including copyright and patent infringement?

'Copyrights are really related to the income generated over the period of exclusive rights,' says James S. Rigby, CPA/ABV, ASA, managing director of The Financial Valuation Group in Los Angeles. 'In simple terms, if I own Mickey exclusively and allow you use him, you have to pay me something. When the copyright dies, you no longer have to pay me. Therefore, the longer the period, the higher the value.'

This directly relates, says Rigby, into potential revenues for CPA firms who specialize in expert testmony or valuation.

'The longer the copyright period, the more infringement cases there will be, and the more work that will exist for all of us,' says Rigby.

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