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Fairly Useful: The Many Ways Fair Use Helps Industry

· January 21, 2015

We’re taking part in Copyright Week, a series of actions and discussions supporting key principles that should guide copyright policy. Every day this week, various groups are taking on different elements of the law, and addressing what’s at stake, and what we need to do to make sure that copyright promotes creativity and innovation.

The fair use doctrine is an essential limitation on copyright which serves the public interest and benefits every sector of the U.S. economy.  As fair use expert Peter Jaszi told the House Judiciary IP Subcommittee last year, “Everyone who makes culture or participates in the innovation economy relies on fair use routinely – whether they recognize it or not.”

The economic impact is particularly significant.  Research commissioned by CCIA in 2011 concluded that industries depending upon fair use and related limitations to copyright generated revenue averaging $4.6 trillion, contributed $2.4 trillion in value-add to the U.S. economy (roughly one-sixth of total U.S. GDP), and employ approximately 1 in 8 U.S. workers.

A few examples of the many industries that depend on fair use are below:

Entertainment

The diverse industries that encompass the entertainment industry—including film, television, music, theater, literature, art, sports—have all benefited from fair use.  This benefit often becomes most apparent in litigation, as all of these industries have defended business conduct to courts under the fair use doctrine, resulting in many fair use wins for entertainment industries in 2013.

Media

Fair use is also essential to the media, which relies on existing reporting.  The Newspaper Association of America told the House Judiciary IP Subcommittee last year that “the ‘fair use’ defense, which draws a distinction between infringing and non-infringing uses of copyrighted material, is a critically important issue for the news industry in the digital age.”

Media Tracking

Similarly, media tracking necessarily relies on the fair use doctrine.  SnapStream explained in testimony to the House Judiciary IP Subcommittee last year the importance of fair use to government agencies: “Without fair use and the ability to make recordings, it wouldn’t be possible for government agencies to monitor television and quickly and efficiently respond to TV coverage and to hold TV content creators accountable.”  They added that fair use is essential to media tracking for news reporting and public debate: “Without fair use and the ability to make recordings, the creative satire and comedy of programs like the Daily Show, and, in many cases, the public awareness and spirited public debates they create would not be possible.”

Education

Students, teachers, and scholars rely on the fair use doctrine daily, in making and using copies and portions of copyrighted works.  Recent litigation brought by the Authors Guild in New York against the Google Books book scanning project led to judicial affirmation of how the digital availability of scholarship and literature enabled by “Google Books provides significant public benefits.”  Similarly, last year DisCo interviewed HathiTrust’s Executive Director Mike Furlough, who explained how “fair use is enabling new kinds of access to knowledge in our digital world.”

Search

Search engines by design must crawl and make copies of the world’s web pages in order to make searchable indexes.  Getting permission would be prohibitive, and so these essential tools for finding information on the Internet would not exist without the fair use doctrine.  As DisCo has discussed, flexible limitations and exceptions, found in U.S. copyright law, have allowed U.S. search engines to thrive without requiring permission, which is not true in most other countries.

A quintessential case on displaying thumbnails in search engines, Kelly v. Arriba Soft Corp., found that a search engine’s “use of Kelly’s images promotes the goals of the Copyright Act and the fair use exception. The thumbnails do not stifle artistic creativity because they are not used for illustrative or artistic purposes and therefore do not supplant the need for the originals. In addition, they benefit the public by enhancing information-gathering techniques on the internet.”

Technology

New online products and services almost inevitably involve copying, making the fair use doctrine a necessity.  One of the major benefits of the U.S.’s flexible fair use doctrine is its adaptability, which can cover unanticipated new uses and technologies.  The breathing space provided by fair use has enabled a thriving technology industry in the United States.  A 2010 article by two DisCo authors explained that the Supreme Court’s holdings in the 1984 Sony Corp. of America v. Universal City Studios, Inc. case (which celebrated its 30th anniversary last year!) “enabled an explosion of innovation that all of us enjoy in our daily lives,” by allowing companies to “invest in the development of new digital technologies without the incurring the risk of enormous liability for the potential misuses of those technologies by some of their consumers.”  Thanks to Sony, “[c]ompanies could now build the innovative products and services that comprise the Internet without fear of crippling copyright liability.”

The fair use doctrine continues to benefit innovative new technology and disruptive business models, including in two recent important C.D. Cal. cases, Fox v. DISH and Rosen v. eBay, which DisCo will be covering later this week.  [Update: More on Rosen v. eBay here, and Fox v. Dish here.]  As CCIA told the IP Subcommittee a year ago:

The committee’s consideration of the subject of fair use should recognize the importance of fair use and related limitations in ensuring a balanced intellectual property system. In particular, the absence of technology innovators among today’s witnesses should not obscure the significance of fair use to the technology industry and the broader economy. Not only does fair use serve extensive societal interests, it has enabled extraordinary contributions to the U.S. economy, which our copyright policy should seek to encourage.

Intellectual Property

The Internet enables the free exchange of ideas and content that, in turn, promote creativity, commerce, and innovation. However, a balanced approach to copyright, trademarks, and patents is critical to this creative and entrepreneurial spirit the Internet has fostered. Consequently, it is our belief that the intellectual property system should encourage innovation, while not impeding new business models and open-source developments.