• Playing Hardball with Soft IP Legislation
  • April 2, 2008 | Author: James J. Halpert
  • Law Firm: DLA Piper - Washington Office
  • Congress is considering legislation to bolster anti-piracy and anti-counterfeiting laws by greatly increasing penalties in copyright and trademark cases, adding protection for unregistered works, and completely overhauling the structure of federal IP enforcement.

    The bill, H.R. 4279, The Prioritizing Resources and Organization for Intellectual Property Act of 2007 (PRO IP Act), was introduced in December with bipartisan support and has a better than even chance of passage this year.

    The legislation enhances the current criminal and civil penalties in several respects:

    • First, criminal actions could be commenced against infringers even if a copyrighted work has not been registered;
    • Second, the bill doubles statutory damages in trademark counterfeiting cases, and provides for treble damages in cases of intentional inducement of a violation or providing goods with the intent the recipient would commit a violation; and 
    • Third, civil and criminal forfeiture provisions for IP offenses would be harmonized and broadened to allow forfeiture of the proceeds of offenses and of property used in the offense.

    The enforcement-related provisions of the bill would create the office of US IP Enforcement Representative in the White House to coordinate all government-related IP enforcement activity and develop a "Joint Strategic Plan" to reduce trafficking in counterfeited and pirated goods. The bill also creates an IP enforcement division with the Justice Department and provides for IP attaches to be detailed to US embassies.

    The original bill had a provision for cases of copyright infringement of "works included in a compilation," which would have allowed judges to award statutory damages of up to $150,000 for each work with independent value within a compilation, instead of a single statutory damage award for the entire compilation (e.g., this would subject someone who illegally downloads the contents of a compact disc to possible statutory damages for each song on the disc). This provision, however, was removed during a markup of the bill by the House Judiciary Committee's Subcommittee on Courts, the Internet and Intellectual Property on March 6.

    Status

    The subcommittee reported out the legislation after unanimously agreeing to strike the compilation provision. A coalition of technology companies and user groups had testified against this provision at the subcommittee's February hearing on the bill.

    Supporters at the February hearing included The Coalition Against Counterfeiting and Piracy (CACP) -- representing more than 500 businesses across a range of industries -- and James Hoffa, Jr., testifying on behalf of the Teamsters Union. Public Knowledge, a public interest group representing content users, testified against the measure, arguing in part that the enhanced penalties are too extreme.

    Also at the hearing, the Department of Justice testified in favor of the increased penalties, but expressed concern that the new White House position and new IP division at Justice could create too much bureaucracy and thus might hamper enforcement.

    The full House Judiciary committee is expected to consider the legislation in April or soon thereafter.

    Outlook for Passage: Good

    This measure likely provides the best chance that lawmakers will have in the next few years to update copyright and trademark enforcement. With strong backing from the leaders of the House Judiciary Committee, the business community (including entertainment and manufacturers), organized labor, and other stakeholders, it stands a better than even chance of passage.

    The bill is expected to undergo further revisions during the full committee markup of the legislation in the spring and to be introduced in the Senate with some different provisions, including a provision giving DOJ civil enforcement authority for criminal intellectual property offenses.