House panel kills controversial copyright provision

by Grant Gross

March 6, 2008 —

A U.S. House of Representatives subcommittee has stripped out a provision in
a copyright enforcement bill that would have increased fines for compilation
CDs containing pirated music by 10 times or more.

Critics of the original
version of the Prioritizing Resources and Organization for Intellectual
Property (PRO IP) Act had complained that one provision would assess fines for
each separate copyright work on a compilation work such as a CD, meaning the
fines for a 10-song compilation CD would range from US$7,500 to $1.5 million,
instead of the current $750 to $150,000. But the House Judiciary Committee's
Subcommittee on Courts, the Internet, and Intellectual Property voted on Thursday
to approve an amendment that stripped out the controversial provision.

Critics, including online civil rights group Public
Knowledge, had complained that the compilation provision in the original
bill would have gone too far with new penalties. The compilation provision would
have treated each song on a compilation CD as a separate copyright violation,
instead of treating the entire CD as one copyright violation, as is the practice
now.

"We are pleased that the subcommittee deleted from the bill the section
... that would have allowed multiplied damages for infringement of a compilation
far beyond any reasonable levels," Public Knowledge President Gigi Sohn
said.

The compilation provision in the original bill raised too many questions, said
Representative Howard Berman, a California Democrat and subcommittee chairman.
Lawmakers need "more time to identify the appropriate legislative solution,"
he said during a hearing to amend the bill.

Several lawmakers, including Representative Zoe Lofgren, a Democrat representing
part of Silicon Valley in California, praised sponsors of the bill for removing
the compilation provision. "I was concerned that [the compilation provision]
would stifle innovation by exposing American business to uncertain, and potentially
crushing, liability," she said.

The PRO IP Act would still increase other penalties for copyright infringement,
including a doubling of damages in counterfeiting cases, with the maximum penalty
for a counterfeiting offense rising to $2 million. The bill would create an
Office of U.S. Intellectual Property Enforcement Representative in the White
House, and would create an intellectual-property division in the U.S. Department
of Justice.

Lofgren and Representative Robert Scott, a Virginia Democrat, said they still
have concerns about the bill. The White House intellectual-property office's
mandate is unclear, and could end up going after legitimate businesses, Lofgren
said. The amendment approved by the subcommittee softened a provision that would
allow for forfeiture of devices and property used to create counterfeit goods,
the bill could still allow law enforcement authorities to seize devices that
were used without the owner's consent, Lofgren said.

The forfeiture provision also appears to create a new form of seizure, in civil
lawsuits involving copyright claims, Scott added. Scott had no objections to
property seizure in criminal copyright cases, where the defendants have been
charged and convicted, but the new civil forfeiture provision "starts to
raise flags," and could result in overly aggressive seizures of property,
he said.

Public Knowledge's Sohn said she was happy to that the forfeiture provision
was amended to require that the U.S. Department of Justice show a "substantial
connection" between the property it wanted to seize and the infringing
activity. "This change would protect against a defendant having property
taken by the government, such as a car or a home, which has only the most tangential
relationship to infringing activity," she said.

Several lawmakers praised the bill, saying stronger penalties and better coordination
of intellectual-property enforcement are needed in the U.S. Intellectual property
makes up about 45 percent of the gross domestic product in the U.S., and protecting
intellectual property is critical to maintaining a strong U.S. economy, said
Representative Lamar Smith, a Texas Republican.

Copyright violations are "easy and massive" and cost the U.S. hundreds
of billions of dollars each year, Smith said. "Our response to these losses
must be proportionate to the harm inflicted," he said.

IDG News Service