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.

5 Questions (for candidates) about Copyright

Recently there has been some discussion on a mailing list I'm a member of about questionnaires to solicit candidates' positions on copyright reform, now that the election campaign is officially underway. After contributing my suggestions, I noted that I should probably just go ahead and send my questions off to my local candidates, regardless of what the other participants in the conversation decided to do. So I did. Here's what I sent, minus a short introduction:

1. Do you agree with the Supreme Court of Canada that "[i]n order to maintain the proper balance between the rights of a copyright owner and users’ interests, [fair dealing, among the other exceptions in the Act] must not be interpreted restrictively." [CCH Canadian Ltd. v. Law Society of Upper Canada, [2004] 1 S.C.R. 339, 2004 SCC 13]?
2. Do you believe that Canada should implement and ratify the WIPO Internet treaties (the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty)?
3. If the answer to 2. is "yes", do you agree that the Article 11 WCT obligation (and similar obligation under Article 18 of the WPPT) can, and should, be satisfied without imposing a blanket prohibition on tools and/or technologies that may have both infringing and non-infringing uses?
4. Do you believe that the current private copying regime for audio recordings defined by Part VIII of the Copyright Act, including the associated levy and collective society is basically fair to both rights-holders and users of recordings?
5. Do you believe that a creator's right to control their creation includes the right to control or limit a consumer's private enjoyment of property?

I don't really view any of these questions as no-brainers. While one can treat them as a simple yes/no scorecard, there's plenty of room for interesting discussion within these parameters. So I'm curious to see what, if any, response I get from the candidates.

Notice bots under DMCA and C-61

The recent order denying the defendants' motion to dismiss in Lenz v. Universal has prompted some discussion of the ruling's implications for automated delivery of takedown notices under section 512 of the DMCA. (See, for example, Techdirt and Freedom to Tinker.)

The question in the Lenz case turned on whether the "good faith belief that use of the material... is not authorized by... the law" [17 U.S.C. § 512(c)(3)(A)(v)] requirement requires the potential complainant to consider Fair Use. The defendants argued that it should not. Judge Fogel disagreed, concluding:

The DMCA already requires copyright owners to make an initial review of the potentially infringing material prior to sending a takedown notice; indeed, it would be impossible to meet any of the requirements of Section 512(c) without doing so. A consideration of the applicability of the fair use doctrine simply is part of that initial review.

This is interesting in itself, particularly when you add the extra step and connect it to the liability under Section 512(f); which Judge Fogel does (accepting the plaintiff's claim):

An allegation that a copyright owner acted in bad faith by issuing a takedown notice without proper consideration of the fair use doctrine thus is sufficient to state a misrepresentation claim pursuant to Section 512(f) of the DMCA.

But there's an additional implication. There are systems out there that promise to automate the identification of infringing content, and the delivery of takedown notices. But, as David Robinson of Freedom to Tinker notes, "it’s hard to imagine a computer performing the four-factor weighing test that informs a fair use determination." So, if this judgment stands, fully automated takedown notices may be illegitimate, and potentially vulnerable to counter-claims.

Since Bill C-61 proposes to establish a conceptually similar liability shield for ISPs in Canadian copyright law, one might be inclined to wonder whether the same argument would hold. The requirements for notices of infringement in this bill are as follows.

(2) A notice of claimed infringement shall be in writing in the form, if any, prescribed by regulation and shall
(a) state the claimant’s name and address and any other particulars prescribed by regulation that enable communication with the claimant;
(b) identify the work or other subject-matter to which the claimed infringement relates;
(c) state the claimant’s interest or right with respect to the copyright in the work or other subject-matter;
(d) specify the location data for the electronic location to which the claimed infringement relates;
(e) specify the infringement that is claimed;
(f) specify the date and time of the commission of the claimed infringement; and
(g) contain any other information that may be prescribed by regulation.

I'm no lawyer, but I don't see anything like a "good faith" requirement. Such a requirement could be built in via regulation, but it's not explicitly present. One might imagine reading something into "the infringement that is claimed", but on its face it provides no standard that the claim can be judged against. So, fully automated notice bots would seem to be permissible, provided they can satisfy the (unspecified) regulations. Certainly these would be capable of producing a claim of infringement in the required form, if it doesn't need to be accurate, or even reasonable.

Michael Geist has noted that C-61 specifies no penalty for filing a false notice. One could argue that such a penalty is unnecessary, since the consequences of an abusive notice are much less severe that they would be under the DMCA. C-61 establishes a notice-and-notice system; the only requirements on the person receiving the notice are to pass it on to whoever owns the "electronic location" in question, and to "retain records that will allow the identity of the person to whom the electronic location belongs to be determined". If one ignores the privacy implications of the data retention requirement, it's not a very onerous obligation. Indeed, responding to those obligations could also be automated relatively simply.

So, we can imagine a scenario here where bots are trawling the net, looking for allegedly infringing content. When they find something, they generate a 41.25(2) compliant notice and send it off to another bot, which passes it on down the line, until eventually it reaches a human who can decide whether or not to do anything about it. All of this seems to be permissible under the terms of C-61, and so far it doesn't even seem especially objectionable. (Processing illegitimate notices would have similar undesirable consequences to spam, in terms of the burden they potentially impose on the network, not to mention their nuisance value. But there is a provision to cover this by adding a processing fee via regulation.)

Except that 41.27(2)(f) says the liability shield for Search Providers only applies if the provider "has not received a notice of claimed infringement relating to the work or other subject-matter that complies with subsection 41.25(2)." So, here a hypothetical illegitimate automated notice has a very different consequence. Instead of simply being a piece of spam that can be filtered, or ignored, it is targetable device that can be used to undo the liability shield offered by section 41.27(1). Of course this doesn't create any liability for the search provider--a potential complainant would still have to actually have a real claim in order to obtain any remedies. But if I were, say, Google, I wouldn't be at all happy about the prospect of being flooded with automated 41.25(2) notices, and having to identify the ones that were credible.

C-61: history and context

I mentioned in my first post that I had an interest in copyright reform. Here in Canada, there's a public debate underway about Bill C-61, An Act to Amend the Copyright Act. This is a complex piece of legislation. It's also, in my view, not a particularly good one, for a number of reasons. But, before getting into detailed discussion it's worth taking a moment to establish a bigger picture: how did we get here; and what's going on, anyway? (See also this chronology, which includes additional information.)

The bill was introduced on June 12, 2008, by the Honourable Jim Prentice, Minister of Industry and the Honourable Josée Verner, Minister of Canadian Heritage and Status of Women and Minister for La Francophonie. The government has made some effort to try to give them equal billing, but Mr. Prentice has largely taken the lead. The web site for government communication about the bill is within Industry Canada's domain, for instance. This is itself noteworthy. Traditionally, Copyright has been seen in Canada as primarily the purview of the Department of Canadian Heritage, placing the emphasis on its role in cultural policy. Giving the Department of Industry the lead role would rather strongly suggest that the present government is more interested in the commercial aspects of copyright policy.

The bill, of course, does not arrive in a vacuum. For one thing, there are World Intellectual Property Organization (WIPO) treaties: the WIPO Copyright Treaty (WCT) and the WIPO Performances and Phonograms Treaty (WPPT), which Canada signed in 1997 but has not implemented or ratified. Ever since then, the question of how (and whether) to implement these treaties has been one of the central questions of copyright reform in Canada. But there are many others: copyright reform is a complex issue with many stakeholders looking for often contradictory outcomes. This tends to lead to the so-called "piling-on" effect, where each party insists that its interest be catered-to in the next revision of the Copyright Act. In recognition of this, the so-called Section 92 Report recommended that a piece-wise approach be adopted in which copyright reforms would be grouped into more manageable "thematic" packages. The "short term" package was recommended for adoption within "1 to 2 years" (i.e. by 2004), and would have included "the four digital issues and other WIPO treaty issues, access and education, photographic works, and transitional periods for unpublished posthumous works".

Of course, this didn't happen. At least not under that (Chrétien majority) government, and not by 2004. (There were a couple of smaller changes to the Copyright Act, during this period: one that excluded Internet re-transmitters from rights that cable and satellite operators have access to, and another that partly dealt with the issues about unpublished postumous works, and created an exemption to allow archival reproduction in more circumstances.) Meanwhile, the Standing Committee on Canadian Heritage released an Interim Report with a different set of recommendations. But in 2005, the Martin minority government introduced Bill C-60, which was closer to the Section 92 Report proposal. This bill died when the Martin government was defeated, in 2006.

A copyright reform bill from the Harper government appeared on the Notice Paper on December 10, 2007. Fearful of what that bill would likely entail, Michael Geist, Canada Research Chair of Internet and E-commerce Law at the University of Ottawa, started the Fair Copyright For Canada Facebook Group, with a stated goal of helping "ensure that the government hears from concerned Canadians". The group quickly attracted tens of thousands of members. As I write this, the group has 91,468 members. (I'm one of them.)

And the media noticed. So did the government. As noted above, the bill ultimately wasn't introduced until June (right before the House recessed for the summer break). It has been suggested that the intervening period was used to add some "consumer friendly" provisions, which might have been hoped to make the legislation more palatable to average citizens. However, these provisions have a number of limitations that make them less useful than they might be.

Over the summer, there has been a certain amount of discussion of the bill, particularly among its opponents. A casual web search for "C-61" turns up a lot of criticism, and not a lot of support. However, this probably has a lot to do with it being summer; the larger organizations are apparently taking their time to study the bill, prepare analyses and formulate strategies. If Parliament re-convenes in the fall, we can presumably expect to see more involvement from organizations like the Creator's Copyright Coalition, who can probably be expected to support the implementation of the WCT and WPPT. (Though one might expect them to also point out that their Platform on the Revision of Copyright calls for a host of additional measures that have not been included.)

As I write this, however, most observers seem to believe that there will be a fall election. If this happens, the Conservative Bill C-61, like the Liberal Bill C-60 before it (that's a co-incidence, by the way: the numbers come from the order in which the bills are introduced within a Parliamentary session), will die on the Order Paper, and the next government will have its own chance to introduce legislation. Either party could re-introduce either one of those bills, or a new one; or the issue could drop off the legislative agenda for a while.

But the debate, and the pressure behind it, won't go away, even if the bill does. Yesterday, John Degan of the PWAC put out a release noting that "[t]he Professional Writers Association of Canada (PWAC) encourages Canadian voters, media and politicians to ensure information economy issues are front and centre in any coming federal election, and into the next legislative session." I agree entirely, even though I would probably disagree with them about what that should entail or lead to.