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Department Of Justice Blasts New 'Copyright Czar' Bill

The Department of Justice on Thursday slammed intellectual property legislation that would re-organize its IP enforcement structure, calling it unnecessary and counterproductive to the work it has already accomplished.

“We have a current structure … that works quite effectively,” Sigal Mandelker, deputy assistant attorney general, told the House Judiciary subcommittee on Courts, the Internet, and Intellectual Property.

Judiciary Chairman John Conyers last week introduced H.R. 4279, which would further crack down on intellectual property violations, and create several new government positions with the power to enforce the new law. It is intended to preserve American economic prosperity, according to sponsors.

The new government positions include an intellectual property enforcement representative who would report to the White House, and a permanent intellectual property division within the Department of Justice.

Those plans would be “ill-advised,” Mandelker told the committee. Removing the department’s IP division from the criminal division, as the bill proposes, “will disrupt important relationships within the criminal division and will make intradepartmental IP coordination more difficult,” she said.

The IP division works closely with the DOJ’s cyber crime laboratory, so separating a copyright unit could fracture investigation, Mandelker said. “This close collaboration … could be jeopardized if the IP enforcement component were split off from computer crime and placed into a separate division,” she said. “Moreover, it may lead to duplicative administration and training programs.”

The DOJ itself has an IP task force and recently implemented 31 recommendations, but “there was never any recommendation to create an entirely new division for IP,” Mandelker said.

Copyright controls in the hands of the White House? Bad idea

DOJ was also not pleased with an IP office inside the White House. “We are always going to be concerned when you have somebody at the White House who may be in the position of directing our enforcement or what cases we do or don’t do,” she said. “That would be contrary to the long-standing tradition of the department making independent decisions regarding law enforcement.”

Rick Cotton, executive vice president and general counsel for NBC Universal and chairman of the Coalition Against Counterfeiting and Piracy, suggested that IP issues tend to “fall down the ‘to-do’ list”. Until there are senior policy executives specifically tasked with IP enforcement, he said, “we will not make progress in addressing the issues that are on the table.”

Panel members also expressed concern over Section 104 of the bill, which would allow a copyright owner to collect statutory damages for each copyrighted work that is stolen. Detractors fear that this provision could result in protracted lawsuits, expensive settlements, and unintended consequences, especially when it comes to music.

Under current law, for example, someone who pirates a single album will be charged with one crime. Section 104, however, would penalize criminals on a per-song basis, so if someone pirated a motion picture soundtrack that had songs from 12 different artists, the pirate would be charged with 12 separate offenses and be subject to exorbitant fees.

Panelists said that while slapping music pirates with hefty fines may not seem overly problematic, these fines often wind up affecting the parents of kids sharing copyrighted material on their home computers or third-party hardware and software providers more than the operators of sophisticated piracy rings.

Increasing fines “would do little or nothing to deter willful infringers,” said Rep. Rick Boucher, D-Va. “There are already ample statutory damages directed at them.”

If anything, an increase in fines could deter innovation, Boucher suggested. Researchers might waver on “whether or not to introduce [a] product and involve themselves in that level of innovation” if the risk of being sued is too high, he said.

Rep. Zoe Lofgren, D-Calif., was “deeply troubled” by Section 104. “These statutory damages would provide for $1.5 million damages for a single CD. I think that’s unreasonable.”

Chairman Conyers was not convinced.

“Damages need to reflect the fact that we live in a world where music is being consumed in bite-sized pieces, not just in albums or whole books,” he said.

Conyers was not concerned about opportunistic lawsuits. “We’re always watching lawyers that are hustling, so that goes with the turf,” he said.

Subcommittee Chairman Howard Berman pointed out that that Section 104 is discretionary and not a mandate, and called on the Copyright Office to hold a serious of meetings with various stakeholders about Section 104 to address any concerns.

Conyers, meanwhile, shot down the notion that a provision allowing for the seizure of equipment used to pirate copyrighted goods would result in the collection of a family’s general-purpose computer in a download case.

Bill authors “carefully crafted the language to allow seizure only if the property was owned or predominantly controlled by the infringer,” Conyers said. “A warehouse used to store counterfeit goods could be seized, or property used to transfer” pirated good would be the likely target of that provision, he said.

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