NEWS

By Tamlin H. Bason

Neither the House's Stop Online Piracy Act (H.R. 3261) nor the Senate's similar proposal to go after rogue websites that infringe U.S. intellectual property, the Protect IP Act (S.968), are attempts to “regulate the internet,” Rep. Adam B. Schiff (D-Calif.) said Nov. 2.

Rather, Schiff said both bills deal with regulating “blatant criminal activity and theft.”

Schiff, speaking in Washington, D.C., at an event sponsored by the International Intellectual Property Alliance, said, “Nobody is attempting to regulate legitimate activity, but when we have American products brazenly stolen … we have a duty not only to protect American work products but to protect American jobs.”

Rep. Robert W. Goodlatte (R-Va.), who along with Schiff and Sens. Sheldon Whitehouse (D-R.I.), and Orrin G. Hatch (R-Utah) leads the Congressional International Anti-Piracy Caucus, said that he would be “happy to work with anyone who feels that we are in any way regulating legitimate businesses.”

The lawmakers said that the need for legislation to protect content owners was underscored by the release of IIPA's study which showed that sales of U.S. copyright products continue to expand in overseas markets and that the core copyright industries employed nearly 4 percent of the entire U.S. workforce and accounted for over 6 percent of the U.S. Economy.

Study: Core Copyrights Boost Economy

The study, which was written by Stephen E. Siwek and titled “Copyright Industries in the U.S. Economy: The 2011 Report,” was released Nov. 2. It reported that the core copyright industries—those whose primary purpose is to produce and distribute copyright materials including theatrical films, television programs, home video, DVDs, business software, entertainment software, books, music, and sound recordings—added $931.82 billion to the U.S. economy in 2010 alone, up from $900 billion in 2009. Additionally, annual copyright growth has far outpaced the average growth of the U.S. economy, averaging a 1.10 percent annual growth for core copyrights compared to the U.S. economy's annual growth of .05 percent.

According to the study, U.S. exports of core copyrights amounted to $134 billion in 2010, an amount that “significantly exceed[s] foreign sales of other U.S. industries including aircraft, automobiles, agricultural products, food, and pharmaceuticals.”

“We've long known how important the U.S. copyright industries are to the economy, and today's report underscores that fact,” Hatch said. “Maintaining strong IP rights is essential to economic growth and continued American innovation, and I look forward to working with my colleagues to protect and strengthen our nation's largest export.”

House, Senate Bills Aimed At Rogue Websites

Both the Senate's Protect IP Act, which was approved by the Judiciary Committee May 26, and the House's bill, introduced Oct. 26, seek to give the government tools to combat websites that give access to infringing material and counterfeit goods and to act against unauthorized streaming of content.

The House bill ostensibly takes aim directly at foreign sites that are alleged to facilitate wholesale infringement of U.S. copyrights. The bill would give the attorney general the authority to seek injunctive relief against websites hosted on foreign top-level domains and an ability to seek a court order to block infringing websites from accessing the U.S. market.

The bill was immediately criticized upon its release for going too far, and for creating an uncertain legal environment that may chill technological innovation (209 PTD, 10/28/11).

Critics seemed particularly troubled the bill's creation of a private right of action for rights holders against websites that contain infringing material. Under the bill, a rights holder would be able to seek injunctive relief against a website after contacting online advertising providers and requesting that they sever ties with a rogue website.

Lawmakers Dismiss Criticism

The definition of an internet site “dedicated to theft of 11 U.S. property,”—and thus subject to action under the bill— is a site that “ is taking, or has taken, deliberate actions to avoid confirming a high probability of” infringement of U.S. copyrights.

The lawmakers at the IIPA event were asked whether this language could potentially result in liability for websites that rely on user-generated content, some of which may be infringing.

“It is easy for people when they just see the language to assume the worst and assume that the rule of reason will not apply in enforcement,” Whitehouse said. “But I think that between the careful work that has been done to get the bill to the stage where it is, and the immensity of the problem that really requires some action, … that we will be safeguarded against those concerns.”

Whitehouse added that due to rampant infringement, “America today is on the losing end of the biggest transfer of wealth in human history.”

Copyrights a Driver of Domestic Jobs

Goodlatte focused on the positive force that copyright industries play in the job market, and noted that stronger protection against infringement will directly lead to more domestic jobs.

The report indicated that nearly 5.1 million Americans are employed by the core copyright industry.

Cary Sherman, chairman of the Recording Industry Association of America, said that the employment numbers could be even higher if not for infringement. He said that the U.S. music industry “has declined more than $7 billion in value, and has shed thousands of jobs, primarily due to the impact of online music theft.”

“We could have lots more jobs if we did a more effective job of combating piracy around the globe,” Goodlatte said. He said that he is confident that Congress will be able to work together to swiftly pass a bill with bipartisan support.

By Tamlin H. Bason

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Study at http://www.iipa.com/pdf/2011CopyrightIndustriesReport.PDF  

H.R. previous 3261 at http://pub.bna.com/ptcj/HR3261Oct26.pdf  

S. 968 at http://pub.bna.com/ptcj/S968Rept.pdf