Companies that rely on fair use generated $4.7 trillion in revenues and $2.2 billion in value added – roughly 16.2 percent of U.S. GDP in 2007. This is among the findings of a report released yesterday by the Computer and Communications Industry Assocation. The report based its findings on what it dubs “fair use industries,” which includes educational institutions, software developers, Internet search and Web hosting providers, and manufacturers of consumer devices that allow for the copying of copyrighted programming.
Noting the importance of the fair use industries for both innovation and economic growth, the CCIA research argues that “enlightened limitations and exceptions to U.S. copyright law have nurtured Internet industries by providing space for them to develop and expand their service offerings to meet the needs of consumers and businesses.”
The CCIA findings seem to run counter to the arguments for more strict enforcement of intellectual property laws, most popularly espoused by the entertainment industry.
Indeed on Monday – Intellectual Property Day – the U.S. Chamber of Commerce published what seem to be contradictory findings in their study entitled “The Impact of Innovation and the Role of IP Rights on U.S. Productivity, Competitiveness, Jobs, Wages and Exports.” According to the report, “During 2000-07, IP-intensive industries spent almost 13 times more on R&D per employee than in non-IP-intensive industries. Industry spending on R&D in the United States accounts for approximately 72 percent of total R&D spending, totaling nearly $1.2 trillion, an average of $145 billion annually.” The Commerce report contends that IP protection, not fair use, is crucial for economic growth.
According to Sec. 107 of the US Copyright Act of 1976 , “[t]he fair use of a copyrighted work for … purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research is not an infringement of copyright.”
Earlier this month, the General Accounting Office issued a report questioning some of the statistics that have been bandied about in defense of stricted copyright enforcement, particularly those that cite widespread economic losses based on piracy and counterfeiting. Arguing that the “economic losses resulting from counterfeiting cannot be substantiated due to the absence of underlying studies,” the GAO contends that the economic impact of IP infringement is actually quite difficult to gauge.
Nevertheless, the Department of Justice announced on Monday that it was appointing 15 new Assistant U.S. Attorneys and 20 FBI Special Agents, dedicated to combating domestic and international IP crimes. According to Acting Deputy Attorney General Gary Grindler, “Intellectual property law enforcement is central to protecting our nation’s ability to remain at the forefront of technological advancement, business development and job creation.”
Questions of copyright, fair use, and intellectual property have become increasingly contentious recently, with the passing of the Digital Economy Bill in the UK and with YouTube cracking down on the popular Hitler “Downfall” meme. The laws that govern intellectual property may not have kept pace with technological innovation.
But in a day where we’ve seen several majoracquisitions – touted in part for the intellectual property that’s been acquired – it seems as important as ever for entrepreneurs to be able to develop and profit from their innovative ideas. (We posted a list of legal resources for startups and entrepreneurs back in January.)
What are your thoughts on this topic? Do you think current IP law protects or prevents innovation?
