Somewhere in Burbank, Calif., a mouse called Mickey is smiling. In a decision that will have massive financial consequences for Hollywood, book publishers and the recording industry, the U.S. Supreme Court today upheld a law that extends copyrights by 20 years.

The Walt Disney Co.

In the face of intense lobbying from The Walt Disney Co. and other companies, Congress passed the law in 1998, making corporate copyrights good for 95 years and those owned by individuals good for 70 years past the author's death. This morning's decision means thousands of films, music recordings and books that would have soon entered the public domain will continue to be owned by the current copyright holders.

The biggest winners are companies like Disney, whose control of lucrative Mickey Mouse cartoons and Winnie the Pooh characters will now extend to the 2020s, and AOL Time Warner , one of the largest copyright holders in the world. In an amicus brief, AOL argued that if the court ruled in the plaintiff's favor, AOL would lose its rights to thousands of cartoons, television episodes, music recordings and classic films such as Casablanca and Gone with the Wind.

Jack Valenti , the president of the Motion Picture Association of America, called the ruling "a victory not solely for rights holders but also for consumers everywhere."

Perhaps. But the plaintiff's lawyers suggest that the decision will stifle innovation. In speeches to college crowds and at techie conventions over the past few years, Stanford University professor Lawrence Lessig has become something of a celebrity with his argument that all works of literature, music and film are based on previous works. The Mickey Mouse film Steamboat Willie, for instance, was based on a Buster Keaton short titled Steamboat Bill Jr. The framers of the U.S. Constitution recognized this, so they allowed innovators to hold copyrights for "limited times," and only when the purpose was to "promote the progress of science and useful arts."

To Lessig, the extensions give companies a virtually unlimited monopoly, discouraging innovation by forcing would-be innovators to pay enormous costs in royalties and other fees. He found support for his arguments from innovators like Eric Eldred , who wanted to build an Internet library but was prevented from doing so because of copyrights held by certain authors, including some who had died years ago. Eldred became the name plaintiff in the Supreme Court case. Lessig also found support from library associations and 14 prominent economists, including Nobel Prize winners like Milton Friedman , who argued that the extension smacked of protectionism.

Economics aside, the Supreme Court found that Congress was perfectly within bounds to extend the copyright. "The [extension] reflects judgments of a kind Congress typically makes, judgments the Court cannot dismiss as outside the Legislature's domain," the court ruled.

Now for the political battle. Jonathan Zittrain, a Harvard Law professor who worked with Lessig on the case, says there are a growing number of would-be innovators who are discouraged and stifled by such a lengthy duration of copyright protection. They could lobby Congress to change the law--or at least prevent future copyright extensions. "One thing the case has represented since its inception and the efforts of Larry Lessig and Eric Eldred," Zittrain says, "is that there's a movement brewing."