IP Bill Criticized by House Subcommittee Members, Witnesses

Chairman Howard Berman, D-Calif., said “about 90 percent” of the bill is workaday, with no flashpoint provisions for “allowing wiretapping for intellectual property crimes” or “criminalizing infringement.” But with the Digital Millennium Copyright Act’s 10th anniversary near, “it’s time to analyze protections to ISPs, some exemptions provided to educational institutions and the effectiveness of takedown notices,” he said.

Rep. Rick Boucher, D-Va., was among members opposing section 104, which he calls a threat to innovation. Under it, copyright owners could claim statutory damages for “each copyrighted work sued upon that is found to be infringed” and the court may “make either one or multiple awards of statutory damages with respect to infringement of a compilation” or derivative work. The provision also says that the court “may consider any facts it finds relevant relating to the infringed works… including whether the infringed works are distinct works having independent economic value.” The provision’s effects on innovation “will be real and will be adverse,” Boucher said. Rep. Zoe Lofgren, D-Calif., is “deeply troubled” by section 104, she said.

The provision “needs to be deleted from the bill,” Public Knowledge President Gigi Sohn testified. “I'm not sure how you fix it.” Most infringement disputes “don’t ever go to court,” Sohn said. “The threat is held over the user’s head and it never goes anywhere. Often the threat is enough for people to settle.” Larger damages would worsen the problem, she said. Representatives discussed extending liability to shipping companies, Web sites and others down the line that knowingly or unknowingly enable infringement. Sohn said that would result in “massive litigation against every single company that might have a tangential relationship to piracy sites” and could create “copyright trolls” that go after everyone connected in any way to piracy.

House Judiciary Committee Chairman John Conyers, D-Mich., co-sponsor of the bill, said it’s possible the provision could “result in opportunistic lawsuits… [But] we're always watching lawyers that are hustling. That goes with the turf.” He said “the current law is outdated, damages need to reflect that we live in a world… where works are being consumed in bite size pieces.” Bill co- sponsor Rep. Lamar Smith, R-Tex., agreed that “we can’t effectively combat new techniques by merely doing more of what’s been done.” The Coalition Against Counterfeiting and Piracy he chairs at the U.S. Chamber of Commerce supports the bill, said council chairman Rick Cotton, who also is NBC Universal general counsel. “What is critical is that we step up, and we make penalties not just the cost of doing business” for pirates, but “that we actually make it a serious deterrent,” he said.

Another provision would create an Intellectual Property Enforcement Representative in the Executive Office of the President, given “primary responsibility for developing, coordinating, and facilitating the implementation” of IP measures. Sigal Mandelker, deputy assistant attorney general, Department of Justice Criminal Division said the administration “greatly appreciates” the bill’s bid to boost penalties, but she’s “concerned” about the proposed position because “the current structure of coordination works quite effectively.” An existing Commerce Department IP coordinator “regularly ensures” that agencies collaborate, she said. “We're always going to be concerned when you have somebody at the White House who may… direct what cases we should and shouldn’t do” which seems “contrary to the longstanding tradition” of the Justice Department making independent decisions, she said. - Alexis Fabbri