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L.A. Biz - Debate Stirring Once Again over Protection Profitable Intellectual Properties

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By Gina Hall

Intellectual property is big business. Copyright industries added over $1 trillion in value to the U.S. economy in a single year, accounting for almost 6.5% of the total U.S. GDP in 2012. That's according to a new study out from the International Intellectual Property Alliance® (they include that registered trademark symbol just in case you decide to pirate their catchy name).

I was able to catch up with Representative Judy Chu (D-CA 27th District) during the American Film Market to discuss the Congressional Creative Rights Caucus, founded to educate Washington politicians about copyright infringement.
"The the story of content producers has not been told," Chu told me in an interview. "This issue is important to people's livelihood and the Caucus is a chance to have a dialogue and educate Congress."

The study out from the IIPAA® tracked impact of U.S. industries "creating, producing, distributing, broadcasting or exhibiting copyright materials, including computer software, videogames, books, newspapers, periodicals and journals, motion pictures, music, and radio and television programming."

In 2012 alone, the study found that these industries employed nearly 5.4 million, close to 5% of the total private employment sector. These jobs pay, on average, 33% more than the rest of the workforce and accounted for $142 billion in foreign sales and exports, which is more than the aerospace, agriculture, food, and pharmaceuticals sectors.

"This study demonstrates that not only do U.S. copyright industries develop the creative works that inspire and entertain so many, they also provide high paying jobs and spur economic activity, consistently contributing to a trade surplus and adding substantial value to our GDP," Chu said in a statement about the study. "This is why we must preserve and protect the works of our creative industry, so they can continue to drive economic growth and innovation with a uniquely American product."

But how far should legislators go in protecting intellectual property? The SOPA/PIPA debate brought the wrath of the tech industry claiming the proposed legislation went too far in curbing Internet freedom.

"This certainly isn't about shutting down the Internet," said Chu, who was a co-sponsor on SOPA. "This is about fighting the worst of the piracy situations ... we have same day piracy in some situations."

"It all depends on the specifics of what they're suggesting," Mike Masnick, founder and CEO of Floor64 and editor of the Techdirt blog, told me via email. "I think even the language choices, of 'fighting' piracy, rather than understanding why it happens and what to do with it, suggest a fundamental misunderstanding of the problem, meaning that any proposed solution will probably be problematic."

Chu acknowledged that the tech industry had made strides in voluntary efforts to reduce piracy of content. Still, she noted that even though companies like Google had altered their algorithms, sites that contained pirated material still appeared on the first pages of searches.

Yet is cracking down on websites a viable solution?
"To foster continued growth of this dynamic sector, we need strong and modern copyright laws that take into account changes in technology and the continuing harm caused by copyright piracy, especially as legitimate digital distributors continue to emerge," said Steven J. Metalitz, Senior Vice President of the IIPAA®.

"Vigorous enforcement of those laws is also critical to ongoing efforts to create and preserve good U.S. jobs, reduce persistent trade deficits, and foster durable economic growth."

Masnick disagrees.

"It's never been the answer before," said Masnick. "Every time they've asked for new laws. But, historically, they've been wrong every single time."

"If Jack Valenti got his way, there would have been no home movie business. The answer is not 'fight' piracy. It's to understand why it happens, and to realize that it shows people demanding what the technology allows. By allowing innovation to flourish, it helps to create new business models that help the industry -- often by enabling new people to contribute without having to go through the old gatekeepers. When Congress only listens to the old gatekeepers, they end up holding back innovation and actually hindering the wider growth of the market."

"I know that Congress is now trying to be extra cautious not to 'pull a SOPA' again," added Masnick, "but if they continue to start from incorrect assumptions, they're going to end up with bad proposals."


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