ArtsWatch: Copyright's Trillions

Economic impact of copyright in the U.S. in 2010 estimated at $1.6 trillion

GRAMMY.com
Philip Merrill

The Recording Academy actively represents the music community on such issues as intellectual property rights, music piracy, archiving and preservation, and censorship concerns. In pursuing its commitment to addressing these and other issues, The Recording Academy undertakes a variety of national initiatives. ArtsWatch is a key part of an agenda aimed at raising public awareness of and support for the rights of artists. To become more involved, visit Advocacy Action @ GRAMMY.com and sign up for Advocacy Action E-lerts.

On Nov. 2 the International Intellectual Property Alliance released "Copyright Industries In The U.S. Economy: The 2011 Report" at a Washington, D.C. event hosted by the Congressional International Anti-Piracy Caucus. The economic study revealed that core copyright industries contributed $932 billion to the U.S. economy in 2010, $1.6 trillion when including the broader copyright community, and U.S. copyright-related exports amounted to $134 billion. IIPA members include MPAA, NMPA and the RIAA. Describing the latest findings, RIAA Chairman/CEO Cary Sherman said, "The core copyright industries now employ more than 5 million workers in 2010, or nearly 4 percent of the entire U.S. workforce. On a wider scale, the broader copyright community employed more than 10.6 million workers in 2010 — that's more than 8 percent of total U.S. employment. These are all good-paying, private sector jobs that anchor communities across the country and stimulate local economies. While these numbers are encouraging, unfortunately, we should have an even more positive story to tell." Prepared by Stephen E. Siwek of consulting firm Economists Incorporated, these reports have consistently been used to encourage antipiracy enforcement and respect for intellectual property's fundamental importance. In a backhanded tribute to the heft these big numbers have brought to the national discussion, the Computer & Communications Industry Association has promoted a dueling study estimating an even higher contribution for the economic importance of copyright law's fair use exception.

President Barack Obama announced nominations for new Federal Communications Commission commissioners on Nov. 1. Republican Ajit Varadaraj Pai was named to replace Meredith Attwell Baker, and Democrat Jessica Rosenworcel was named to replace Michael J. Copps. Both, who have previous experience working at the FCC, drew wide praise for their selection and are now pending confirmation hearings and a vote by the Senate.

On Nov. 2 the Third Circuit Court of Appeals ruled for the second time that the FCC was "arbitrary and capricious" in imposing a $550,000 fine on CBS for the 2004 Super Bowl halftime incident involving Janet Jackson and Justin Timberlake. This sets up some tension with the U.S. Supreme Court's 2009 Fox ruling that caused the Third Circuit Court of Appeals to reconsider the case. The resolution for now seems to be that even if the change in FCC indecency policy was reasonable, CBS still should have had notice of the new policy prior to being fined; however, there is more litigation ahead in this fleet of rulings regarding fleeting indecency. The Center for Creative Voices in Media applauded the decision while the Parents Television Council condemned it.

The MPAA announced on Oct. 28 that its U.S. District Court lawsuit against video streaming service Zediva has concluded with a permanent injunction against the service and a $1.8 million fine. Zediva had claimed it did not need to pay licensing fees because it was operating a DVD rental business that provided content remotely over the Internet with a DVD player in operation for each stream — a strategy the MPAA described in April as a "gimmick." MPAA Senior Vice President and Associate General Counsel Dan Robbins said, "We are pleased that this case ended with a court order permanently ending Zediva's infringement. This result sends a strong message to those who would exploit the studios' works in violation of copyright law, on the Internet or elsewhere, and it is an important victory for the more than 2 million American men and women whose livelihoods depend on a thriving film and television industry."

Book publisher John Wiley & Sons reportedly sued 27 New York consumers in federal court last month for unlicensed downloading of books in its For Dummies series from a rogue website based in the Ukraine. The publisher estimates its popular Photoshop For Dummies title has been illegally downloaded more than 74,000 times since summer 2010.

On Nov. 1 Universal Music Group's motion to dismiss was denied in the class action lawsuit brought by the estate of Rick James and Rob Zombie over the calculation of digital royalties. The class action was filed in April shortly after UMG was denied a U.S. Supreme Court appeal of Eminem's lawsuit over the same issue. On Nov. 2 attorneys for Chuck D filed a separate class action against the label on the same issue. The suits contend that a download constitutes a license of the music, which results in a nearly 50 percent royalty to the artist, while labels typically argue a download is a sale, which pays between 10 and 20 percent.

Law firm Righthaven made a name for itself suing bloggers who used unlicensed reproductions of newspaper stories. It is now in the ignominious position of coping with multiple claims for legal costs from defendants who successfully fought back. A Las Vegas judge ordered U.S. Marshals to seize $63,720 worth of Righthaven's assets on Nov. 2; however, outside counsel for Righthaven said the next day that the firm was not yet ready to file for bankruptcy and was considering requiring valuation of any property to be seized and whether to appeal the seizure order.

Click on the "ArtsWatch" tag below for links to other GRAMMY News stories in this series.