President Bush signs PRO-IP Act

President Bush signed S.3325, now known as the Prioritizing Resources and Organization for Intellectual Property Act, or PRO-IP Act, into law on Monday Oct. 13, 2008.  This signature comes despite the bill still mandating the creation of an IP Enforcement Coordinator office within the White House--something the administration had previously characterized as "objectionable on constitutional separation of powers grounds".  As I have mentioned previously, one of the roles for this office will be to coordinate international pressure tactics, intended to promote an enforcement-oriented approach to IP law around the world.  The law will also authorize appropriations to fund enforcement activities at the local and national levels.

Beyond the creation of additional bureaucracy, the primary impacts of the law are: 

• to increase the statutory damages and other remedies for civil counterfeiting cases; 
• to prohibit the importation or exportation of "copies or phonorecords, the making of which either constituted an infringement of copyright, or which would have constituted an infringement of copyright if this title had been applicable"; and,
  
• to add broad new forfeiture requirements, allowing the US government to seize "[a]ny property used, or intended to be used, in any manner or part to commit or facilitate the commission of an offense" under criminal copyright infringement statutes.

The latter provision is troubling, since it is rather broad, and could on its face be interpreted as allowing the seizure of any and all communication infrastructure involved in distributing infringing material.  While it is perhaps unlikely that the US government would (or could) attempt to seize the entire network infrastructure, it seem likely that innocent third parties will suffer when shared resources are affected.

This bill was supported by the RIAA, the MPAA, the US Chamber of Commerce, and the AFL-CIO.  It was opposed by Public Knowledge, the Electronic Frontier Foundation, the American Library Association, and at one point, the Bush administration itself.  However the most controversial aspect of the bill--a provision that could have diverted public resources into pursuing civil actions on behalf of (and to the benefit of) private rights holders--was dropped.

US Dept. of Justice rejects role in civil enforcement of IP

As has been reported elsewhere, the US Department of Justice responded rather critically to S.3325. The EFF has a copy of the letter. There are two principle complaints: first, that the DoJ has better things to do with public funds than provide pro bono legal representation for rights holders in enforcement actions; and second, that the mandated U.S. Intellectual Property Enforcement Coordinator (IPEC) office "constitutes a legislative intrusion into the internal structure and composition of the President's Administration."

The letter concludes: "It is our hope that changes will be made so that the President's senior advisors can recommend that the President support the measure." This is, of course, a veto threat. The fact that the letter was co-signed by Lilly Fu Claffee, General Counsel of the US Department of Commerce, can only be seen to underline the force of this threat. This was a strong signal from the administration that the bill would not be acceptable in that form.

The US Senate responded to the first complaint, by dropping that section entirely. The amended S.3325, now called the Prioritizing Resources and Organization for Intellectual Property Act of 2008, no longer authorizes the Attorney General to pursue civil actions on behalf of the rights-holders. This amended bill passed unanimously in the Senate on Friday, September 26, 2008, and now has been moved over to the House of Representatives, where it is on the suspension calendar as a postponed suspension vote and thus could potentially be passed in a matter of minutes, under the procedural rules. (Exactly how this bill qualifies for suspension under the $100 Million threshold, when it contains, by my count, $275 M of appropriations in Title IV and an unbounded ("such sums as may be necessary to carry out this title") appropriation in Title III, isn't clear to me. But then that threshold is not in the House rules; it's something the parties impose on themselves.)

The amended bill does nothing to address the second complaint, and is presumably still "objectionable on constitutional separation of powers grounds" to the Bush administration. Whether this is sufficient on its own to doom this version of the bill remains to be seen. Naturally, the other parts of the bill also remain, including the seizure powers, the increased statutory damages, and the $125 M appropriation for the enhancement of local enforcement activities. RIAA Chairman and CEO Mitch Bainwol is reportedly pleased with this, saying "Additional tools for intellectual-property enforcement are not just good for the copyright community but for consumers who will enjoy a wider array of legitimate offerings."

Public Knowledge issued a statement, saying in part "At a time when the entire digital world is going to less restrictive distribution models, and when the courts are aghast at the outlandish damages being inflicted on consumers in copyright cases, this bill goes entirely in the wrong direction." The comment about the courts is presumably a reference to the recent appeal decision ordering a new trial for Jammie Thomas, which described the statutory damage award in that case as "unprecedented and oppressive," and noted that "it would be a farce to say that a single mother’s acts of using Kazaa are the equivalent, for example, to the acts of global financial firms illegally infringing on copyrights in order to profit in the securities market." (my emphasis) (See also Howard Knopf's comments on this case here.)

From the Canadian perspective it is worth pointing out that one of the stated purposes of the IPEC office would be to pressure foreign governments to "establish international standards and policies for the effective protection and enforcement of intellectual property rights." Notably, sec. 303(a)(7)(C) would mandate "building a formal process for consulting with companies, industry associations, labor unions, and other interested groups in other countries with respect to intellectual property enforcement." Clearly, the opinions of citizens (of any country) are of little importance, except to the extent that they belong to "interested groups". And groups that would advocate for user's rights--like the Canadian Library Association, for example--are of secondary concern at best.

UPDATE: S.3325 was passed by the House of Representatives, shortly after 4:30 pm, in a vote of 381 yeas to 41 nays (11 not voting). It remains to be seen whether President Bush will sign it, or whether the two-thirds majority support (which is currently present in both houses of Congress) would still be there to override a veto.

Copyright expansion pressure at work in the US

Declan McCullagh had an interesting piece on The Iconoclast yesterday morning, talking about some copyright bills that are working their way through the US Congress, at the moment. One, the Enforcement of Intellectual Property Rights Act of 2008 (S.3325), which was approved by the Senate Judiciary Committee yesterday, would empower the Justice Department to pursue civil lawsuits against "any person who engages in conduct constituting an offense under section 506". Section 506 is the "Criminal Offenses" section, so it's not quite every copyright infringement; McCullagh is wrong on that point, as I read the bill. (But I admit I haven't read it thoroughly, so I may well have missed something.) But it does reduce the standard of proof required to the more relaxed "preponderance of evidence". This is important, since a lot of copyright infringements are difficult to prove beyond a reasonable doubt.

One might ask (and indeed some are asking) why it would be a good idea to spend public funds on civil litigation when the rights holders are demonstrably capable of pursuing their own suits. RIAA alone has launched over 30,000 file-sharing lawsuits in the US, over the past 5 years.

There is more in this bill: provisions about importation and transshipment; provisions about forfeiture and seizure; creation of a new "Intellectual Property Enforcement Coordinator" position within the Executive branch. Much of it seems rather similar to what the RIAA has allegedly proposed be enshrined in the ACTA. This is presumably not coincidental. And yes, it is the kind of thing that gets people talking about whether their iPods will be seized at the border:

Importation into the United States, transshipment through the United States, or exportation from the United States, without the authority of the owner of copyright under this title, of copies or phonorecords, the making of which either constituted an infringement of copyright or would have constituted an infringement of copyright if this title had been applicable, is an infringement of the exclusive right to distribute copies or phonorecords under section 106, actionable under sections 501 and 506.

A second bill, the International Intellectual Property Protection and Enforcement Act (S.3464) may also be of interest to Canadians. It proposes what amount to unilateral trade sanctions against countries that remain on the USTR's Special 301 Report priority watch list for more than one year, and who don't meet the benchmarks of an "Action Plan" designed to "achieve—(I) adequate and effective protection of intellectual property rights; and (II) fair and equitable market access for United States persons that rely upon intellectual property protection."

In 2008, that could be all of the countries on the priority watch list except Pakistan: China, Russia, Argentina, Chile, India, Israel, Thailand, and Venezuela. At least they have all been on the list for more than a year. Canada has been on the (lower priority) watch list for years, and both the MPAA and RIAA have lobbied to have Canada added to the priority list. The sanctions, which could include a ban on US Federal Government procurement of goods or services, cancellation of any preferential trade treatment, as well as restriction of various import/export and development funding programs, would not be automatic. They would be at the discretion of the President.

This bill is being sponsored by Max Baucus (Democrat, Montana) and Orrin Hatch (Republican, Utah). Baucus doesn't seem to have much of a history in IP-related issues. Hatch does. He was behind the controversial INDUCE Act, which critics claimed could outlaw the VCR, the iPod, and even the PC. Also, in a slightly surreal moment from 2003, he suggested remotely destroying people's computers for copyright infringement, while using unlicensed software on his web site.

A number of Canadian critics of the now-defunct Bill C-61 commented on the role that US pressure played in its creation. Clearly the Baucus-Hatch bill demonstrates that the US may be increasing the amount of pressure it applies to its trading partners to conform to its desires in the IP realm. And the Enforcement of IP Rights Act suggests the direction where those desires may be heading. All of which suggests that, whatever the make-up of the next Canadian Parliament, the copyright reform issue will not go away.