Lofgren Warns Against ACTA as New Study Shows $4.7 Trillion Fair-Use Windfall
With few options for countering the Anti-Counterfeiting Trade Agreement, concerned lawmakers must put pressure on the Obama administration to reconsider the multilateral intellectual property agreement, a senior member of the House Judiciary Committee said Tuesday at a Computer and Communications Industry Association event on Capitol Hill. The group released a study it commissioned saying industries relying on fair use contribute $4.7 trillion to the U.S. economy. The copyright industries have long had the upper hand in economic arguments, all agreed.
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Appreciation for the balances in U.S. copyright law isn’t “pervasive,” said Rep. Zoe Lofgren, D-Calif., who represents much of Silicon Valley. The spirit of the constitutional treatment of copyright, protecting works for “limited times,” has been undermined in “modern times,” she said. An early draft of the DMCA would have had the effect of banning Web browsing, Logren said. “Without fair use, there wouldn’t be a World Wide Web.” Her colleagues on the Judiciary Committee need to see the new CCIA study, since some of them have publicly bemoaned copyright’s limited constitutional protection, she said.
From the start, when Lofgren viewed a classified draft of ACTA, the agreement was “all about enforcement” and didn’t mention user rights as exist in U.S. law, she said. ACTA’s draft text was officially released last week, but the action did little to quiet alarms sounded by opponents (WID April 22 p1). The agreement is a “step to completely lock down content around the world,” not just improve enforcement in needed areas, Lofgren said. Detractors must be “very blunt that we're talking about a freedom agenda” that is antithetical to ACTA. “It’s been crafted in secret,” she said during Q-and-A. “It is a serious mistake to move forward” on ACTA, but with no need for Senate ratification of the agreement, lawmakers must take their complaints to the White House and consider court remedies, she said.
Washington IP lawyer Adam Eisgrau, who years ago led the P2P United file-sharing industry group, asked how advocates could use the CCIA report, given that the copyright industries “have kind of owned the economic arguments to date.” The U.S. Chamber of Commerce released a study for World IP Day showing faster job growth in IP-intensive industries than in others (WID April 27 p7). Lofgren said advocates must get “down in the trenches” and emphasize that stronger IP across the board will harm jobs, such as those being created in Silicon Valley, which is “starting to wake up” from the recession. “Sometimes just making a good-government argument doesn’t always win in the Congress.” Lofgren also urged advocates to view net neutrality, which “very much commands our attention” in Congress now, through the lens of fair use, because without neutrality, content owners can “completely control” access to works.
Flexible Fair Use Less Risky, Professor Says
CCIA released a similar fair-use study more than two years ago (WID Sept 13/07 p10), but the data are more reliable this time, said Andrew Szamosszegi of consulting firm Capital Trade, a co-author of the nearly 100-page report released Tuesday. The firm used the same methodology as the World Intellectual Property Organization, finding that fair use continues to be a “big deal” economically for the U.S., he said.
The most controversial decision in the study was picking which industries to include, Szamosszegi said. It settled on ISPs, Web search portals, makers of computers and peripheral equipment, legal services and newspaper publishing as “core” industries relying on fair use, and sellers of books, periodicals and music, plus consulting firms and communications equipment makers, as non-core industries. His firm had to estimate 2006 data for the last study but now has official government data for that year, Szamosszegi said. The study covers 2002 through 2007 and includes brand-new 2007 Census data.
Industries enabled by fair use had $4.7 trillion in revenue in 2007, up from $4.4 trillion in 2006, the study said. They made “value-added” contributions of $2.2 trillion in 2007, totally about one-sixth of U.S. gross domestic product. They counted for about one-quarter of economic growth from 2002 to 2007 as well. Core industries’ revenue grew 47 percent 2002-2007. The core industries also saw higher-than-average productivity gains, leading to lower prices for their products and a larger “footprint” overall, Szamosszegi said. Core and non-core industries saw employment grow at a slower pace, hitting 17.5 million employees in 2007 from 16.9 million in 2002. Payrolls grew faster, to $1.2 trillion in 2007 from $900 billion in 2002.
The report shows that “robust and useful copyright flexibilities” are at least as important to creativity as content protection, said Professor Peter Jaszi of American University, a co-author of the report. Many copyright industries “owe their very existence to fair use,” such as software that must interoperate with older versions and platforms, and TV shows and movies that don’t need to clear every copyrightable object in a shot, he said. “I wonder whether we are playing entirely fair with the rest of the world” by pushing bilateral free trade agreements and multilateral pacts such as ACTA that lack copyright balances.
Section 107 of the Copyright Act, setting out a four-part test for fair use, may get a “greater workout” as courts test the limits of other sections of the law governing specific activities, Jaszi said. Section 108 library exemptions “need some brushing up” to keep pace with digital developments, and the Supreme Court recently agreed to take a case, Costco v. Omega, on the first-sale doctrine in Section 109 as applied to “graymarket” products, he said. “This small army” of copyright provisions is “equally essential.” Jaszi said he disagreed with other academics who want more specificity in Section 107 so those seeking to make fair uses have more certainty in court. The subject has seen much wrangling in the past 20 years that’s been “really healthy,” and nailing down fair uses is “risky,” as it could lock in older technologies in the statute, he said.
The study drew a swift rebuke from the Copyright Alliance, which accused CCIA of overbreadth. “It is not helpful for policymakers or the public to pronounce sweeping arguments that defy logic,” said Executive Director Patrick Ross. The study takes “broad industries” with some entities that “occasionally engage in what some might call fair use” and puts them all in a single category, he said: It’s like claiming the auto industry is responsible for all U.S. jobs. The study also miscategorizes new licensing models used by consumer electronics makers and online distributors as fair use, Ross said.