Fair Use in the U.S. Economy

Abstract

While policymakers pay much attention to copyrights, exceptions to copyright protection also promote innovation and are a major catalyst of U.S. economic growth. Specific exceptions to copyright protection under U.S. and international law, generally classified under the broad heading of Fair Use, are vital to any industries and stimulate growth across the economy. Companies benefiting from fair use generate substantial revenue, employ millions of workers, and, in 2006,represented one-sixth of total U.S. GDP.

Under guidelines published by the World Intellectual Property Organization (WIPO), economic activity associated with copyrights has been studied extensively. To date, however, the economic contribution of industries dependent on fair use has not been quantified. Thus, a primary objective of this study is to fill the gap and provide an initial assessment of the economic contribution generated by companies benefiting from fair use. Fair use is an important restriction to the rights conferred on original works by the U.S. Copyright Act of 1976: "The fair use of a copyrighted work ... is not an infringement of copyright." The fair use doctrine, and other limitations and exceptions, have grown in importance with the rise of the digital economy, as fair use permits a range of activities that are critical to many high technology businesses and are an important foundation of the Internet economy.

The beneficiaries of fair use encompass a broad range of companies, particularly those whose business activities involve the Internet, as well as consumers. The ubiquity of the Internet means that its benefits are widespread as well.