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Consumer, Industry Groups Spar Over Piracy Bill

WASHINGTON, D.C. -- Rivals debating a new intellectual property enforcement bill had their say before a U.S. House of Representatives subcommittee today, with labor and media figures supporting its counterfeit crackdown while consumer groups warned of a possible "chilling effect" on digital media and fair use.

The Prioritizing Resources and Intellectual Property Act of 2007, or "PRO IP", enjoys bipartisan backing as well as broad support from media and labor leaders, a number of whom spoke today before the House Subcommittee on Courts, the Internet and Intellectual Property.

The act would create a new structure within the Department of Justice to enforce intellectual property laws. It also expands the penalties for infringement on IP to include forfeiture of property involved or "intended for use" with infringed material.

The bill also would change how statutory damages are assessed, which could significantly increase damages for copying and redistributing copyrighted material in some cases.

"The good thing about this bill is we've got strong support on both sides of the aisle," said Rep. John Conyers (D-Mich.), the sponsor of the bill and chairman of the House Judiciary Committee, during his opening remarks.

Conyers, who described the bill as being "for the people," pointed out the public safety concerns of counterfeit products. He also discussed the economic impact of IP piracy, which he placed at 750,000 lost jobs and between $200 billion and $250 billion.

"We can either wring our hands, or make a difference," he said.

Media industry and labor leaders joined Conyers in supporting the bill.

"I'm particularly pleased to be able to support legislation that not only has bipartisan support but also brings labor and management together," said Teamsters President James Hoffa. "Some people might think it's not a big deal to buy a knockoff bag or DVD, but these things cost us hundreds of thousands of jobs."

Rick Cotton, executive vice president and general counsel for NBC Universal, spoke before the committee as chairman of the Coalition Against Counterfeiting and Piracy, calling the PRO IP act "a much-needed declaration of war" on IP violations.

"Counterfeiting and piracy represent a global pandemic which is getting worse, not better," Cotton said. "The unprecedented and explosive growth [of each] represents a dagger aimed at the heart of future U.S. economic growth."

Yet consumer advocates charged that some of the measures in the PRO IP Act could hurt the development of new ways to consume media. They also claimed the bill further encroaches on consumers' "fair use" rights to use copyrighted material.

The most controversial measure in the bill, Section 104, would change current copyright law to treat each infringement of work in a compilation as a separate act. As a result, it could potentially multiply statutory damages for even accidental or non-willful infringement.

"Section 104 of the bill would disaggregate the parts of a compilation or derivative work for the purpose of calculating damages, multiplying the already-massive statutory damages associated with copyright infringement," said Gigi Sohn, president of Public Knowledge, during her oral testimony. "Increasing damages this way will have a severe chilling effect on legitimate uses of copyrighted works and on innovation."

Rep. Zoe Lofgren (D-Calif.) also expressed concern about Section 104 of the bill, and doubts about the efficacy of greater statutory damages in any case. "When we inspect less than one percent of the containers that come into the US, this bill isn't going to stop piracy."

Sigal Mandelker, a U.S. Deputy Asst. Attorney General, testified that the White House is generally pleased with the bill because it incorporates changes in IP law that the administration had recommended.

However, Mandelker said the Department of Justice was concerned with Title V of the bill, which creates a new division within the department to enforce intellectual property laws. That portion of the bill also creates a new White House office, similar to that of the U.S. Trade Representative, dedicated to coordinating international intellectual property enforcement.

"We do have significant concerns with Title V of the act, which we feel will have a detrimental effect on how the DOJ performs enforcement," Mandelker said.