New Copyright Study Illustrates Economic Need For Balanced Policies

BY Heather Greenfield
July 21, 2011

Congressman Jared Polis, D-Colo., welcomed the release of a new economic study on Capitol Hill Thursday saying industries that depend on exceptions to copyright law, like the tech sector and news media, are happy it has been published.

“Fair Use in the U.S. Economy,” commissioned by CCIA, updates economic data incorporating new numbers from the economic downturn in 2008 and 2009. Andrew Szamosszegi of Capital Trade, Inc. which conducted the study, said “fair use-related industries” held their own despite the economic downturn and that jobs held steady at 17 million from 2002 to 2009.

In 2008 and 2009, fair use industries generated revenue averaging $4.6 trillion, a 35 percent increase over 2002 revenue of $3.4 billion.

Szamosszegi said the most telling number of the study is really the “value added” figure, which he likened to the cargo on ships, picking up on a metaphor Polis offered about ships and Internet traffic.

The “value added” from the fair use industry to the U.S. economy averaged $2.4 trillion, approximately 17 percent of total U.S. current dollar GDP – roughly one-sixth of the economy.

Polis said the study comes just in time as Congress considers legislation like the controversial PROTECT IP Act, which law professors and Internet engineers have opposed.

Polis said zero tolerance enforcement has consequences, much like stopping nautical piracy by stopping all ships from sailing on the ocean. He said all online infringement could be stopped by shutting down the Internet and that PIPA would “weaken the underpinnings” of the Internet.

CCIA President & CEO Ed Black said CCIA has always advocated a balanced approach to copyright, but the economics and facts in this study should stand on their own.

“We have long known that these limitations on IP regulation are important for social purposes – they enable news coverage —research — academic and educational use— criticism — and commentary.  But we’ve more recently started to discover that an immense amount of economic activity also depends on these limitations and exceptions,” Black said, adding that many industries depend both on copyright and exceptions to copyright like the software industry and the news media.

“All of these ‘fair use industries,’ it turns out, make a large and growing contribution to our economy.  In fact, what copyright leaves unregulated is at least as economically significant as what it regulates,” Black said.

Polis praised the study for bringing numbers to help balance the debate on copyright enforcement measures.“These economic arguments are particularly important when there’s a lot at stake – jobs, jobs jobs,” Polis said. “That’s something at the top of the agenda for members of both parties.”

CCIA Executive Vice President and former member of the European Parliament Erika Mann ended the event by saying Europe does not share robust fair use protections and that is what enabled the US Internet economy to grow more quickly than the European Internet economy. She said more harmonization and adopting copyright exceptions similar to the fair use doctrine in the US would help the European Internet economy grow.

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