Copyright Law Vital to Economic Growth

Published October 1, 2009

A new report concludes strict copyright enforcement is a key to economic growth, especially in the technology field, because of the increasingly high cost of piracy.

The report, titled “Copyright Industries in the U.S. Economy” and commissioned by the International Intellectual Property Alliance (IIPA), notes core copyright industries contributed $889.1 billion, or 6.44 percent of America’s gross domestic product, to the U.S. economy in 2007. Those industries employed 5.5 million people, or 4.05 percent of America’s workforce, in that year.

“The U.S. copyright-based industries represented in the IIPA remain optimistic that economic growth, combined with strong laws and effective enforcement, will continue to pave the way for economic growth in both the U.S. and global markets,” wrote Stephen E. Siwek of Washington, DC-based Economists Incorporated in the report.

Adds Tax Dollars

Patrick Ross, executive director of the Washington, DC-based Copyright Alliance, contends increased copyright protection is a worthwhile investment.

“Rights are not respected if not enforced, so some level of enforcement is necessary to ensure the continuation of rights,” Ross said. “But there is a positive return to rights holders and taxpayers.

“For every tax dollar spent on increased intellectual property enforcement, at least three new dollars in federal taxes would be collected,” Ross added. “This trend is also true at the state and local level because sales taxes are collected from legitimate sales, which would increase without pirated goods.”

Current Laws Called Sufficient

David Sohn, senior policy counsel at the Washington, DC-based Center for Democracy and Technology, sees the IIPA report as calling for stronger enforcement, not new legislation.

“If the copyright industries are doing as well as this report suggests, I think it is hard to argue that they need major changes to the existing legal regime,” Sohn said.

Sohn says more regulation instead of enforcement of current laws could “undermine the ability of Internet-related services and technologies to serve as a major engine of economic growth.”

“Keeping the Internet open does not require throwing up our hands and abandoning copyright altogether,” Sohn added.

‘Creative Commons’ Value Doubted

As a proponent of strong copyright enforcement, Ross questions the economic viability of a “creative commons,” a push by the “copyleft” movement to scale back intellectual property rights.

“Despite attempts by academics, no commons advocate has been able to produce anything beyond anecdotal evidence of economic return on a commons,” Ross said. He says the creative commons idea is “antithetical to a free market because as incentives to produce are reduced, production will be reduced.

“The revenues cited in the IIPA report are the result of consumers voluntarily surrendering income for goods, which occurs because one party has ownership and another party desires access,” Ross added. “Without ownership for rights holders—without some rights of reproduction, distribution, and performance—there is far less incentive to create.”

Nicholas Katers ([email protected]) writes from Wisconsin.

For more information …

“Copyright Industries in the U.S. Economy,” Stephen Siwek, Economists Incorporated: