"Fair use" generates trillions in the US alone

By Nate Anderson

When pressing Congress to ratchet up the legal screws on infringers, copyright holders are fond of touting apocalyptic reports about how piracy is destroying their industries—and the US economy.

But strengthening the nation's intellectual property laws isn't just a matter of cracking down ever harder, of limiting the limitations and giving increasing power to rightsholders. Fair use and other limitations on copyright themselves generate significant economic activity—$4.7 trillion in 2007.

The Computer and Communications Industry Association (CCIA), which counts Google and Microsoft among its members, today rolled out a report (PDF) on the value of fair use, one that tries to answer the question: "What contribution is made to our economy by industries that depend on the limitations to copyright protection when engaged in commerce?"

The method is similar to that used in several prominent piracy studies; in this case, the "fair use" industries are divided into "core" and "non-core" companies, depending on how important fair use is to their very existence. Economic activity and payroll numbers can then be crunched from this data, offering a rebuttal to any view of fair use that sees it as a mere afterthought in copyright law, one good for protecting YouTube parodies but not much more.

The CCIA report's numbers are staggering. The "fair use economy" accounted for 23 percent of all US real economic growth between 2002 and 2007. Fair use industries (core and non-core combined) generated $4.7 trillion in 2007. And "about one out of every eight workers in the United States is employed in an industry that benefits from the protection afforded by fair use."

Doing these kinds of analyses is notoriously imprecise, in some cases amounting to little more than guesswork. Still, the basic idea presented in the study serves as a useful corrective to simplistic views on "strengthening" IP law ("Strengthening IP law for whom?" is the question worth asking), and we agree with CCIA boss Ed Black, who noted in the report:

"We must be careful that any attempt to alter our intellectual property laws not overlook any crucial sectors of the economy... We must therefore safeguard the fair use economy from the unintended consequences of overbroad copyright regulation in order to ensure that technology innovators can maximize their contribution to our nation’s economic health."