From InformationWeek…

Fair use exceptions to U.S. copyright laws account for more than $4.5 trillion in annual revenue for the United States, according to a report issued on Wednesday by the Computer and Communications Industry Association.

“Much of the unprecedented economic growth of the past 10 years can actually be credited to the doctrine of fair use, as the Internet itself depends on the ability to use content in a limited and nonlicensed manner,” CCIA president and CEO Ed Black said in a statement. “To stay on the edge of innovation and productivity, we must keep fair use as one of the cornerstones for creativity, innovation, and, as today’s study indicates, an engine for growth for our country.”

By one measure — “value added,” which the report defines as “an industry’s gross output minus its purchased intermediate inputs” — the fair use economy is greater than the copyright economy.

Recent studies indicate that the value added to the U.S. economy by copyright industries amounts to $1.3 trillion, said Black. The value added to the U.S. economy by the fair use amounts to $2.2 trillion.

The fair use economy’s “value added” is thus almost 70% larger than that of the copyright industries…

The report is here.

Later: Alas, it’s not as good as it seems. Nick Carr has a good critical swipe at it:

There’s a little problem, though. Even by the woeful standards of the bespoke research industry, this study is a crock. It’s not just bad; it’s absurd. What the authors have done is to define the “fair-use economy” so broadly that it encompasses any business with even the most tangential relationship to the free use of copyrighted materials. Here’s an example of the tortured logic by which they force-fit vast, multifaceted industries into the “fair use” category: Because “recent advances in processing speed and software functionality are being used to take advantage of the richer multi-media experience now available from the web,” then the entire “computer and peripheral equipment manufacturing industry” qualifies as a “fair-use industry.” As does the entire “audio & video equipment manufacturing” business. And the entire software publishing industry. And the entire telecommunications industry. And – hey, why not? – the entire insurance industry. Stock markets and commodity exchanges? Sure, throw them in, too…

I’ve always thought that a more insightful comparison is between the economic value of the information technology industry and that of the media industry. In terms of size and economic importance the former dwarfs the latter — which is why it’s absurd for legislators to agree to measures that would allow the latter to determine the pace and nature of innovation in computing and networking. Fair Use is no doubt significant in economic terms, but its real importance is cultural. Unless our societies have free exchange of ideas, they’re dead.

Hooray! Good analysis by Scott Feldman of recent US Supreme Court decisions…

Filings of patent suits increased from 2,112 in 1997 to 2,830 in 2006. That does not take into account any increase in the number of defendants per filing. Between 2001 and 2005, the average cost of litigating a large case through trial jumped from $3 million to $4.5 million. How much of that jump is due to the increase in filings–and thus in demand for lawyers–is unknown. At several million dollars a case, plus the costs of settlement and of the many expensive patent opinions sought, the direct costs mount. Indirect costs do, too: companies feel obliged to practice “defensive patenting” to protect against infringement claims, and litigation can disrupt a company’s operations.

In three quick strokes, the Supreme Court has made things better. Though the recent rulings did not necessarily involve trolls, they will affect them. In eBay v. MercExchange, decided in May 2006, ­MercExchange sought an injunction shutting down much of eBay’s operations. Absent exceptional circumstances, courts used to presume that an injunction should be issued in any instance of patent infringement. But in this case, the Supremes instructed lower courts to apply what’s called a traditional test before entering injunctions. The test gives a trial court more discretion to deny injunctions, since the court must assess what is “fair.” Trolls can no longer count on getting injunctions, even if they win their cases.

In January 2007, the justices made it harder for trolls to wage licensing campaigns. Before, trolls could send letters to targeted companies, putting them on notice–and in so doing putting them at risk of being found “willful” infringers facing triple damages. Companies that wanted to remove that potential liability, however, could not themselves file suit to get a court to declare that they were not liable. Now, according to ­MedImmune v. Genentech, as interpreted by the Federal Circuit, a company receiving a letter referencing its activities and offering a patent license may file a lawsuit where it resides.

And in April, in KSR International v. Teleflex, the Supreme Court made it easier to find that a patent should not have been issued in the first place, or that it should be declared invalid once sued upon. In KSR, the patentee claimed a patent on the combination of a gas-pedal accelerator and a sensor. The Court found the combination obvious and the patent consequently invalid. The Supremes have reëmphasized that “obvious” inventions are not entitled to patent protection. District-court judges may now use common sense to determine whether a patent for a combination of existing technologies merits protection…